Gorilla Technology Group Stock

Thank you for standing by. This is the conference operator. Welcome to the Gorilla Technology Group, Inc. NASDAQ GRRR First Quarter (sic) [ First Half ] 2026 Financial Results Conference Call. [Operator Instructions] The conference is being recorded.

Before we begin, we would like to read the forward-looking statements. Today's call includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and projections about future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially. Forward-looking statements often include terms such as expects, believes, plans, anticipates, may, should and similar expressions.

For a discussion of important factors that could affect Gorilla's results, please refer to our filings with the SEC, including the most recent annual report on Form 20-F. Except as required by law, Gorilla undertakes no obligation to update or revise any forward-looking statements made on this call, whether as a result of new information, future events or otherwise.

I would now like to turn the conference over to Jay Chandan, Chairman and Chief Executive Officer; and Bruce Bower, Chief Financial Officer. Please go ahead.

Thank you very much. Good afternoon, everyone, and thank you for joining us. Now the first half of 2026 marks, for me, a very decisive step forward for Gorilla. The revenue increased 99%, nearly 100% year-on-year to $78.4 million, effectively doubling in the first 12 months. But more importantly, the momentum strengthened as the half progressed. Now Q2 revenues reached well over $50.1 million, which was a net increase of roughly 78% from Q1 and 138% from Q2 last year.

Now we had originally expected, as we had promised to the market, about $33 million, which we upgraded to $44 million. We've exceeded that by another $6.1 million to nearly by 14%, which principally means that all the deliverables and certain milestones were completed earlier than anticipated. Personally, that's what execution looks like. Now the challenge we've also had is that the operating performance and progression at the same time was also equally significant.

Our reported operating loss narrowed from $41.1 million in Q1 to approximately $2.2 million in Q2, which was a reduction of 95%. A substantial part of the first quarter result was share-based compensation that has already been recognized and more than 80% of the H1 share-based compensation was absorbed in the Q1 itself, and the quarterly charge declined by approximately, what, about 78% in Q2. In plain, simple English, Q1 carried the overwhelming majority of the burden. Q2 showed a much clearer picture of the operating momentum beneath it.

Now our cash efficiency also improved considerably. Whilst the revenue increased by approximately 100%, operating cash consumption declined by approximately 65% from $12.5 million in H1 of 2025 to $4.3 million in H1 of 2026. Operating cash usage also fell from 31.8% of the revenue to just 5.5%. Now these are very material important numbers, which we need to take into consideration. Now the company also recorded an overall increase in cash of approximately $79.8 million during the first half, principally reflecting financing support and the expansion program together with customer collections.

So we ended June with roughly around $179.4 million in cash, approximately 82% above our Q1 closing balance. That capital is not just sitting there for like in a bank and trying to get some interest rate, it is there to be deployed. What we are doing is that we are purchasing infrastructure, securing capacity, preparing sites, building teams and funding the deposits and working capital required to deliver projects of a scale Gorilla has never previously undertaken.

And just FYI, we are preparing currently about 5 different sites in parallel, and that takes a humongous effort. At the same time, we also understand that the cash balances will move between the reporting periods. Investors should distinguish between cash being consumed by an underperforming operation and capital being deliberately deployed into contracted projects and revenue-generating infrastructure. They're not remotely the same thing, however convenient it may be for some people to pretend otherwise. Now this investment phase also explains the current gross margin profile as well.

Now our gross margin had dipped, reflecting a revenue mix weighted towards hardware, initial deployment and project mobilization. What I need to make sure is that Gorilla also deployed more than $14.1 million into property and equipment. Currently, that number is $29.4 million. We are also building the installed base first. As the infrastructure is commissioned, customer workloads migrate, utilization increases, and we expect the revenue mix to broaden towards compute, monitoring, managed services and all other associated services. Hardware, personally, guys, does not begin producing its full financial results the moment it leaves the factory. It must be delivered. It has to be installed. It has to be powered. It has to be tested. It has to be accepted by the customer. And more importantly, then the utilization happens. More importantly, we want to make sure that we are moving very, very quickly.

Now in terms of updates, I think the market has been asking me for updates for a long time. For Yotta Phase 1, for example, the testing has been completed. The equipment deliveries are underway and deployment have commenced. Testing will commence by the end of this week, early next week. Yotta Phase 2, the equipment is currently being manufactured with completion expected over the next 25 to 30 days. In Indonesia and Batam, we're working very closely with our OEM and infrastructure partners. We have, as everybody knows, secured substantial data center space, and we're targeting approximately another 200 megawatts of capacity with an initial ready for service in the middle of 2027 and the broader deployment expected to be in the second half of 2027.

At Korat in Thailand, the land has been cleared. We're advancing with the financing, the GPU procurement, the infrastructure requirements while engaging with prospective offtakers with the objective of moving into discussion into firm customer contracts. Now to be absolutely clear, megawatts are not just capacity -- they're not just capacity, they are revenue. More importantly, the capacity must be commissioned. It has to be contracted. It has to be utilized. Now our accountants remain very stubbornly unwilling to accept that electricity as a payment. So unfortunately, we have to make sure that the customers pay us at any given point of time.

Alongside these major infrastructure programs, our established security and network intelligence operations remain an important part of Gorilla. They provide not just the customer relationships, they also provide a better delivery experience, cash collections that support our broader expansion. Now for people thinking that we are pivoting, we're not. We're not abandoning the business that brought us here. We are using it as a platform to build something substantially larger. Now for Q3, we are planning revenues between $48 million to $50 million compared to the previous plan of $36 million to $40 million. That represents a significant jump of about 20% to 39% than the earlier planning range.

For Q4, our operating plan is revenues exceeding well over $60 million to $70 million. Taken together with the H1 revenue of $78.4 million, our revenue outlook for 2026 now stands at least $200 million, which is up from the $137 million to $200 million range we provided at the beginning of this year. Now reaching the upper end requires additional execution, including further deliveries, customer and workload activation. We intend to earn the upper end. I want to make sure that we're not simply announcing this, but we want to make it more and more useful as we go through the quarters.

Now looking further ahead into 2027, we're targeting revenues of about $450 million to $500 million. Now that's an ambitious target that represents a quarterly revenue of roughly over 120 -- $112 million to $125 million. Now we are not expecting the calendars to produce the growth for us. The target depends on all of the capacity that's being installed now, the commissioning of the additional projects, the conversion of the prospective demand into contracts and the migration of utilization of the customer workloads. Now there has been no shortage of personally barking from the sidelines. Unfortunately, that does not deliver GPUs for us or neither does it commission data centers or collect dollars from our customers.

Our answer to all this would be execution. Now Gorilla has entered the second half with substantially greater revenue scale, dramatically improved quarterly performance, stronger liquidity and a growing portfolio of major international projects. We have more work to do. We are maintaining absolute delivery discipline. We're managing capital very carefully. We're improving utilization, converting opportunity into recognized revenue. And make no mistake, the direction of the travel now is unmistakable. So we're no longer explaining what Gorilla intends to become. We're beginning to demonstrate it.

Thank you very much. Bruce, over to you.

Thank you, Jay. I think Jay hit on all of the highlights, but there are a couple of areas I want to expand on or emphasize. So the first is, of course, the first half revenue of $78 million, 99% revenue growth. As you can hear from the guidance figures, Gorilla is in hyper growth mode in terms of revenue. So we're happy with these figures, and we expect to see this kind of growth trajectory continue. Also, as Jay mentioned, the gross profit for the first half showed an investment into the business and also reflected a mix.

As the mix improves, we expect to see an expansion of gross margins. The mix will improve in a couple of ways. The first is as Yotta 1 and the other GPU-as-a-Service projects go live in the second half of the year. Those projects generate gross margins of 75% or more. So of course, there will be an expansion in the overall gross margin of the business as a result. And then that will flow through to the operating -- there will be significant operating leverage coming from that as well. So that will flow through to the underlying EBITDA numbers as well.

We mentioned some of the expense items. I would just like to highlight that this was not a normal first half. There were significant for -- there were foreign exchange -- significant foreign exchange movements in the markets due to the Iran conflict and [ Freedom Day ] tariffs and tariff wars even as we have a significant exposure in foreign currency in the Middle East and in Southeast Asia, which were the 2 regions hardest hit by geopolitics and by tariffs. This did produce significant volatility in our underlying numbers.

We expect that as the situation seems to have calmed down that, that will also result in a calming down of some of the below-the-line expense items that we incurred in the first half. Also, as Jay mentioned, there was a stock-based compensation item. This is something that had been previously disclosed in all of our filings, which should come as no surprise to somebody. And then my attitude would be that this is out of the way. So again, the second half P&L should be quite clean from that perspective.

A couple of things that I want to highlight from the balance sheet side. One is that we finished the quarter with the second -- the first half going into the second half with $175 million (sic) [ $179.4 million ] of cash. We had $13 million of conventional debt, sort of traditional debt bank loans and then $107 million of long-term debt from a 5-year convertible that we placed in June. We also did a convertible in July. That gives us really enough cash that we are going on offense. This is the time where we are paying for equipment and for deliveries of equipment and setting them up, and that will be converting into revenue in third and then substantially in the fourth quarter.

We have paid for the items for Yotta 1 for the first deployment with Yotta out of our own balance sheet, our own funds and then a facility, a small facility that is tied directly to the project level. And then Yotta 2, we have paid again substantial prepayments out of our own balance sheet, and then we intend to fund the balance of the payments from a larger project finance facility, where I will share more details when we can. But I think everyone on the line will be very happy with the terms that we've managed to get. And then a couple of other things.

When I talk about investment, you can see already, as Jay mentioned, in the CapEx investment. So $14 million of investment went into the first half. That number is, of course, going to be many, many multiples of that in the second half. But this is where the investment in the business is going to be showing up in the future, and that leads to revenue growth and to margin expansion. In spite of the large CapEx, I would say that the business is actually performing well on the cash flow front. Operating cash flow was minus $4 million in the first half.

This was a tightening from minus $15 million (sic) [ $12.5 million ] in the first half of last year. I would expect to see the operating cash flow numbers continue to improve. We're expecting large customer collections in September and October to the tune of over $20 million. And then the SG&A and everything else from the -- all the other operating costs in the business will not be overwhelmed by that. So that should result in a breakeven or operating cash flow for the entire year.

And last but not least, I want to remind you, we have the guidance figures in the press release, $200 million plus is our guidance for this year, $450 million to $500 million is the revenue guidance for next year. How we make guidance is we take what is contracted revenue where we have an amount and a date. If we have a contract, but maybe the timing is not exactly firmed up or the amounts aren't exactly firmed up, we don't include it in the guidance. So again, we try to be underpromising and overdelivering to the market. We try to trade only on -- based on what will not disappoint you. So when Jay talks about the delivery schedules for Yotta 1 and Yotta 2 and then going out to the project in Batam or NeutraDC, as we call it, where we have the delivery schedule firm, that has been included in guidance.

Where we do not have the delivery schedules firm, that has yet to be included in guidance, but stay on the lookout as those delivery schedules firm up, then the guidance might change as a result. We don't provide a gross margin forecast for next year at the moment. That will depend really on the timing of when these projects initiate. But I would just remind people that Yotta 1, Yotta 2 and NeutraDC, we expect on those projects an average gross margin of 75%. So if we're talking about $450 million to $500 million of revenue, then the gross margin on that would be substantial. The majority of that would be coming from GPU-as-a-Service. So I would expect you would see gross margins in the sort of 40% plus range for next year. Again, that is not official guidance, but that's just working out the figures.

In terms of a financing update, I mentioned -- so we have an offer from -- already on the table for financing for NeutraDC. We also have -- we also have used the proceeds from the convertible for the initial part of that. For Yotta 1, we've used -- and Yotta 2, we've used substantially all the proceeds from the convertible to pay for prepayments or deliveries. And then we're funding the balance of the deliveries from 2 different project finance facilities that we either are arranging or have arranged. So again, I think you'll see for the future growth and the future CapEx of the business, you'll see more of a focus on project finance or debt overall, and we'll have more details in the coming days about how that works.

With that, I turn it back to Jay.

Thank you very much, Bruce. We're now open for questions.

[Operator Instructions] And the first question comes from Brian Kinstlinger with Alliance Global Partners.

A lot of progress and a lot of things to talk about. But Bruce, you mentioned guidance, at least for next year and any year is based on what's in hand where you know how much is coming in and what projects and when. So for 2027, what is on the delivery schedule, which phases will be active? And which programs? Is it all of the first 2 phases of Yotta and the first of NeutraDC? Or just maybe take us through what is assumed versus what is not assumed?

Yes. So the first phase for the Yotta contract, we have delivery schedule and we're taking deliveries now of the equipment. So that is assumed. That is $100 million annualized roughly of incremental revenue. The -- then for the Yotta 2 contract, as we call it, there -- it's split into 2 different batches. The first batch, we have the delivery schedule. So that is assumed. That is $250 million of incremental revenue.

And then the last is for the NeutraDC project, we mentioned in the initial press release that there was a deployment expected of 300 servers around the September time frame. And then by the end of the year, a subsequent 700 servers. The 300 servers, the delivery schedule has firmed up. So that is included in the guidance. That would be 30%, about $260 million. So that would be an incremental $75 million to $80 million a year.

So -- and then the balance comes from existing contracts or contracts that we've won and not yet announced, and that's how you get to the $450 million to $500 million mark. So there is the 700 servers from the first phase of NeutraDC and which are not included in the guidance. The second phase of NeutraDC, which is 875 servers, correct me if I'm wrong, is also not included in the guidance. And then the second phase -- part 2 of the second phase of Yotta is not included in the guidance at the moment. So obviously, we want to get the delivery schedule firmed up. GPUs are like spice in Dune, they're very valuable commodities. So it's better to have them in hand before we start talking about schedules and timing and amounts. So again, this is why we take the ultra-cautious approach in formulating guidance.

Great. And then a follow-up -- of course...

Sorry, Brian. See, for us, the confidence is from the capacity and the projects we're putting now. Like I think Bruce eloquently said, right, we have delivery scheduled for Yotta 1. In fact, there are a whole bunch of them on the plane right now as we speak. They're underway. We are commencing all our deployment, which effectively means the power drops are there, the connectivity is there. And the Yotta Phase 2 equipment is also being completed and will be approximately delivered. The deliveries will start coming in.

So we have a fixed time line. That means we have to deliver the first set by the end of this month, the second set mid of next month. And then -- so between now and end of November, Yotta 1 and Yotta 2 Phase 1 will be complete. And then you've got the big elephant, which is the NeutraDC, that particular one actually -- the first 300 servers have to be deployed by the end of October. Testing will take probably between 20 and 30 days. So we're looking at going operational end of November, first week of January -- December, sorry.

Now on top of that, we were also working towards closing the remainder of the 700 plus the 875 servers, which will obviously -- once that is done, we will absolutely revise the targets for next year. But again, the challenge we have today, just to address what the challenges are, the GPUs are in shortfall. The CPUs are in shortfall. Memory and storage is short. Then you've got the cabling and everything else. On top of that, electricity seems to be of a bit of a problem. But what we are doing is we're making sure that whatever we have committed today is based on the operational milestones, which we already have in place, whether it's equipment, capacity, customer contracts signed, workloads migrated and all of the utilization that is being done.

Great. That's super helpful. A follow-up. I think the NeutraDC, those are data centers that were already built, if my memory serves me. But on Yotta, do you have any construction you have to do?

No, none whatsoever. Yotta is a phenomenal constructor. They build it themselves. So they have done it all by themselves. And by the way, all of the Yotta data centers are fully ready for service. All the floors are ready for service. All we're doing now is getting the power drops in and getting the GPUs to be tested.

Great. And then on the project financing, last quarter, you had mentioned you had offers and you made similar offers on the table and you had similar comments here. What has been the biggest obstacle in securing the project financing?

Brian, I'd be very careful. I didn't say we had offers. I said, in one case, we have arranged and in the other case, we are close to completing. The obstacles has been, first of all, us fighting for the best terms possible. There were some initial offers that were not conducive to shareholders. So we said, no, we're not going to accept that.

And then the second thing has been more recently when there has been a shift in some of the delivery schedules. The shift actually was one where they wanted us to pay. The vendors wanted us to pay more quickly. So we had to make people hurry up and meet different delivery schedules and thus we do something. But in general, I'm very happy with where we are. I'm very happy with where -- not just with the project finance story, but also with how we are with the debt markets overall. And then I would say, we said earlier that we are pursuing a credit rating. So I'd stay tuned on that front.

Your next question comes from the line of Alex Latimore with Northland Capital Markets.

Glad to see everything evolving well here. I was curious about the terminal value of the GPUs. Are you looking to sell them after 5 years? If so, what would that residual value be? And then also alternatively, is there an opportunity to keep operating the GPUs for a sixth year?

That's a great question. Alex, good to hear from you. I hope all is well. So yes, so the current -- if you look at various sources today, B300s and GB300s, they still have residual value at the end of the fifth year. You're looking at roughly around between 20% and 25%. But that's today, Alex. We don't know what's going to happen in 5 years' time. But at the end of the day, we will continue to operate those GPUs. We will also -- we've already received offers, just FYI, from various either institutional investors or from data center operators saying, look, I'm happy to sign an agreement with you at the end of the fifth year, we'll take it off and here's -- we will get it evaluated by a top-tier firm like Ernst & Young or PwC or KPMG, and then we will put an assigned value to it.

But the Gorilla's intent is to continue working. As the models evolve, you're evolving from training workloads to inferences, edge will become a meaningful kind of -- will make a meaningful entry towards the beginning of next year. We are looking at deploying at scale in these regions.

The other things you should also look at is sovereign AI. Each of these countries where we are present today, whether it's the Middle East, parts of Europe, parts of Asia, they are very actively sourcing GPUs. They're looking to secure the future, especially the governments and so on and so forth, and we can deploy it at that point of time. So net-net, either it's revenue-based incremental working towards the next -- I don't know, the next 3 or 4 years after or there's an immediate liquidity for sale to an existing data center provider.

Alex, if I may add to that. So the -- for accounting purposes, we'll depreciate the equipment over 5 years. So that's the assumed life just -- the major reason is that some of the contracts -- most of the contracts we're signing for 5 years. But I would emphasize that, first of all, what Jay mentioned that there is a couple of ways to monetize them later. I would also point out that this has been a story that we've heard discussed numerous times, what is the useful life of the GPU.

Some other players in the market are putting A100s into service for 7, 8, 9 years running now and still generating revenue and a very decent yield on cost. So obviously, the A100s don't rent for the same thing that they would 5 years ago, but it's still a very healthy return and very favorable economics. So all the evidence is pointing to the fact that the service life might actually be much longer than 5 years.

Awesome. Another question. For your CapEx forecast for India and Indonesia, does that include maintenance CapEx? Or is that additional? And if it is, how should we think about the sequencing or the cadence of that maintenance CapEx?

Yes, I'll take that. So the CapEx forecast we've given is for the upfront CapEx. The upfront CapEx really covers networking equipment, GPUs, servers, cabling, setup, everything that you would need to get up and running. The maintenance CapEx, we are taking as an expense. There are a couple of reasons for that. The first is that most of it will be labor actually. So we're doing an RMA service where we're -- we have people that are going to be servicing the equipment and then also repairing it.

And then secondly, a lot of the equipment will be covered by warranty by the vendor. So we will spend a little bit to repair or to swap out spare parts, et cetera. But the big CapEx that would be needed in case a machine -- an overall server breaks would not be with us. It would sit with the vendor. So basically, when you look at the forecast and our gross margin, we put in the gross margin, all the cost of spare parts and labor. It's not broken out separately as maintenance CapEx.

Awesome. One more. Could you describe the debt financing for Indonesia? Just a few questions to run through. What is the interest rate? Is the customer financing portions of it? If so, how much? And then what percent of the financings are complete there?

We have an offer that we disclosed in the press release about the project for 70% of the project. The balance will come from the Gorilla balance sheet and then from customer prepayments. So so far, how it works is if we're deploying 30% of the project upfront, so 300,000 (sic) [ 300 ] servers, then that comes out of customer prepayments and out of Gorilla's pocket. And then the debt portion would fund the 700 servers to come at the end of the year. So that's what I can share about the financing arrangements for that project. So the first deliveries are coming basically out of Gorilla's pocket and then drawing on customer prepayment.

Our next question comes from the line of John Roy with Water Tower Research.

Congratulations, gentlemen. I wanted to maybe take a step back real quick and think about what could go wrong next year. What do you think is your biggest risk? Is it people? Is it power? Is it building facilities? Is it acquiring equipment? What are you most worried about?

Great question, John. Good to hear from you again. So let me classify that into 3 principal risks, okay? One is the hardware timing. The second one is the -- I would categorize site and power readiness. And the third one is customer acceptance with workload migration.

Now we've been ordering early. Just for FYI, all of the equipment, which are supposed to be delivered in end of September have been delivered now. So it's about 5 weeks early. Yotta 2, it's about 8 weeks early in terms of manufacturing and so on. So we're ordering early, testing before the deployment, taking deliveries with our OEM and our integration partners. Then more importantly, we're making sure all the sequencing matters.

Second, we're gating the deployment against what I call power -- confirmed power and readiness, site readiness. Engineering is working actively 24/7 on this. Networking and installation work streams are running in parallel. Our teams are sitting on the sites in different parts of the world. Now unfortunately, electricity has an inconvenient habit of being very essential. So on top of that, customer testing and workload migration has to begin before full commission. Now that allows us to resolve all of the integration issues progressively.

So what we are doing is we're making sure that the paying workload works better. So we have scheduled buffers in each of these phases, phased deployment plans. And then more importantly, the ability to resequence work where appropriate. We also have to build our own internal processes. You will see that we have actually gone -- we've almost doubled our size in terms of human resources. And we're also making sure that there's contingency plans, which is both for the operational preparation as well as all of the hardware as well.

So all of the RMAs, all of the RFSs, all of them have to be done well before the schedule. So that is something we believe are some of the important risks we are looking at in H2 ramp for ourselves. But we do have contingencies for every single one of them.

[Operator Instructions] Your next question comes from the line of Bharath Nagaraj with Cantor Fitzgerald.

Previously, you referenced hiring across -- aggressive hiring, I should say, across Thailand, India, Taiwan, et cetera, targeting 1,000-plus people, I think, Thailand alone maybe. What's the current headcount? And what's the monthly OpEx run rate exiting Q2 at this stage? That's the first one.

So good to hear from you again. So we have, I think, on a full-time resource basis, I think we're about 300-plus people. On a contractor basis, we're already at about 300, 350. We're going through the -- as you can imagine, we're going through various phases now. We are going through land assessment, power readiness, water readiness, EPC certifications and so on and so forth, both in Thailand and in Indonesia. That will involve probably another 400 to 500 people, but we are going through the whole RFP process right now as we speak. As we are going forward, we would see that number specifically expand significantly. So I can tell you at the peak, let's say, by mid-2027, we'll be at about 2,000 people. Currently, we're at about 300 plus another 350, so about 650 people. So yes, we are expanding rapidly.

Bruce, do you want to take the second half?

Yes. It's about $2.7 million a month is the SG&A. So that is more than just the people costs. We have -- we expect that to go up over -- by the end of next year to sort of $38 million to $40 million annualized range. Now as Jay mentioned, there's a significant headcount expansion, but just keep in mind the geographies, right, India, Thailand, et cetera, not -- it's not Silicon Valley, right? So that explains the -- why the cost increase would not be so large. And then we think that, that's -- in order to operate projects generating hundreds of millions of gross margin, I think that that's a worthwhile trade-off.

Understood. The second question I have is on the GPU spot prices, given how volatile they are. Are Gorilla's contracted take-or-pay agreements fixed price? Or is it indexed to the spot? For example, if things change and supply catches up next year and you have a multiyear agreement, is Gorilla taking the margin risk? Or how does it work?

That's a very good question. So we are basically -- all our hardware are fixed cost today. There is no, what I call, index or pass-through pricing, which transfer some of the volatility to the customers. All of our agreements, for example, the power agreements are fixed. There is no change in the power prices. All of our prices for water and the connectivity are fixed as well. So we're not trying to either pass on the risk to the customer or keep the risk to ourselves.

Everything has been defined very clearly. Our customers have also been very understanding. So there's a higher charge upfront. And we are basically telling, look, this is the risk today. This is the cost of memory. It's gone up 40%, 50%, 60% over the last 4, 5 months. Here is the upgraded cost. And we're making sure that we are intending to protect all of the project economics. We're not just relying solely on unhedged spot pricing or anything like that.

That said, we have gone to every single vendor. Personally, we haven't -- we've sat down with every single one of them and made sure that the prices are fixed. So whatever they deliver between now and December are all fixed, on a fixed price basis, it does not carry any risk for us.

Okay. Very clear. Just a couple more for me, if that's all right, just quick ones. I know you gave us attribution -- project level attribution for your guidance for 2027. I just wanted to understand what kind of utilization assumptions underpin the guidance, like maybe even for '26 and for '27 as well. And then a separate question is around Egypt, Taiwan and Thailand, like what kind of contribution has it made in H1?

That's a great question. So Bharath, I'm going to break it down into 2. So there is no project level guidance or attribution -- unit attribution because these are take-or-pay, okay? The customer chooses to use it, the customer doesn't choose to use it. It's basically an identified customer, not customer demand, okay? So the mix for us is commissioned GPU capacity. Utilization is 100%. That's how we consider it. Obviously, there are some RMA issues. So the customer has asked us for a 99.95% delivery. But more importantly, we are making sure that all of these recurring compute service revenues are part of the established business.

So when I tell you, I'm billing, just to give you an example, $1 for this customer, that is not going to go down to $0.9. It's not going to go up to $1.01. It is actually $1, and that will be something which we will be billing for the next 5 years. Now we model a phase commissioning. The commissioning is what will -- there will be an onboarding customer curve. As the utilization will increase as the workloads will migrate. So what would happen is the customer testing will happen. The first 300 servers will go live, the next 700 will go live, then the next 875 will go live.

That is the onboarding curve, which we have. But in terms of the payment, the customer is actually paying us a flat fee for that. Now Yotta is obviously a big contributor as the phases go through. India and Indonesia are poised to become very aggressive. It's going to be a huge part of our revenues going forward. But at the same time, on Egypt, Taiwan and Thailand, we have already had, as Bruce alluded to, we've established already a security, network intelligence, public sector operations and so on. We're not giving up on that. In fact, we're bidding for some very large projects as we speak, and we're going through the motions of closing them as and when. So we will make the necessary announcement there.

They remain for us a very important source of revenue, customer collections, but more important, technical credibility to help support our AI infrastructure. Now for people who don't understand what we are, how we actually do this, all of our network intelligence, all of our established security, all of our video, our data intelligence platform, our building management solutions and so on and so forth are part of our data center. Our SOC and NOC, which we have built for Egypt has actually become a part of our business. And now we are providing the same for our data centers.

At the same time, we made an investment in a company called Astrikos in Bangalore in India. They are helping us integrate our SOC, NOC and our BMS solutions and providing us even more robust technological infrastructure, which we are personally using for some of our data centers. So if you look at Korat, for example, as and when we build it, almost 90% of all the technology provided will come from Gorilla or Gorilla white label solutions.

And that concludes our question-and-answer session. I would now like to turn the conference back over to management for any closing comments.

Thank you very much. I mean, thank you, everybody, for being part of this. I want to thank everyone who actually stood by Gorilla, when the numbers were smaller, our explanations occasionally required a map sometimes. People question where the certain countries were. Sometimes it took a calculator and probably even a strong shot of whiskey. In the next 12 months, now what we've done after that, we've doubled our first half of our revenue. We've reduced our operating loss by approximately 95% from Q1.

Now I'd love to take credit, but unfortunately, the people who did it -- who did the actual work are actually listening to this call. So I'm not taking credit for that. Now my wife recently asked me something. She said, hey, what are you thinking about? I said power distribution. Personally, I don't think it's a -- romance is dead. It only requires a substation. And that's what we're building. So as CEO, I provide the optimism. Bruce patiently explains that, hey, the optimism is still not recognized under the IFRS. I've asked him twice. Unfortunately, he doesn't blink. So I'm asking all of you to judge us by the contracts we've signed, equipment we've delivered, revenue we're recognizing and cash we're collecting.

To all our shareholders, customers and partners and all of our extraordinary employees, both old and new, I really thank you. We intend to make your patience personally look less like faith and more like excellent judgment. I know sometimes the market can complain and they'll say, you know what, oh my God, the CEO is trying to make a fool of you. That's fine. It's okay. Gorilla is only getting started. You can say only once. And when all goes to plan, and I'm saying this very clearly, when all goes to plan, not if. My family will eventually invite me back to the dinner table, which I left. I promise you that we will be talking about GPUs and megawatts at the dinner. So until then, patience. Thank you very much indeed for your time, and thanks for your support. Cheers.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.

Thank you for standing by. This is the conference operator. Welcome to the Gorilla Technology Group, Inc. First Quarter 2026 Financial Results. [Operator Instructions] The conference is being recorded.

[Operator Instructions] Before we begin, we will read the forward-looking statement. Today's call includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and projections about future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially. Forward-looking statements often include terms such as expects, believes, plans, anticipates, may, should and similar expressions. For a discussion of important factors that could affect Gorilla's results, please refer to our filings with the SEC, including our most recent annual report on Form 20-F. Except as required by law, Gorilla undertakes no obligation to update or revise any forward-looking statements made on this call, whether as a result of new information, future events or otherwise.

I would now like to turn the conference over to Jay Chandan, Chairman and Chief Executive Officer; and Bruce Bower, Chief Financial Officer. Please go ahead.

Thank you very much. Thanks, everyone. Thanks for joining. Bruce and I are going to keep this very direct today. Q1 was not a very quiet quarter. For us, it was not an accounting quarter which was wrapped in a bow. It was one of those quarters where everyone smiles politely, Bruce and I read from a script, pretend that the world has changed because someone added AI to the script and the release. Also, I'm not going to be reading from a piece of paper today.

Now Q1 for me was the quarter where Gorilla moved from turnaround into scale. And scale is not always pretty in the first few innings. Anyone who's actually built a business and something meaningful knows that. You do not build the data center campus, you do not secure power, buy hardware, deploy GPUs, hire people, expand products and move into sovereign AI infrastructure without creating some noise in the P&L. If anyone expected a perfectly polished quarter while we are building the next version of this company, they may also believe that the British sunshine arrives on schedule. So a charming idea, rarely accurate.

Now let me start with the facts. We delivered USD 28.2 million of revenue, which is up 55% year-on-year. More importantly, we turned operating cash flow positive. Let that sink in. Net cash from operating activities was $6.6 million compared with the cash, more importantly, used in operating activities to about $10.7 million in Q1 of last year. Now this is a huge swing. It's a positive swing, about $17.3 million of improvement or 162% swing. Now on top of that, we ended the quarter with a little over $98.4 million of cash, which is up 373% year-on-year. Let me put that in plain simple English. Revenue grew, our customers paid us, operating cash flow turned positive. Cash stayed strong. On top of that, this is not just theory. This is not market theater. This is execution landing on the cash flow statement.

Now the reported operating loss of about $41.1 million, that number, you should stop reading there. If you stop reading there and if you look at the business, then you actually missed the business. The loss was heavily distorted by 2 major items. There was a $20.9 million stock compensation, which has been due for a better part of 3.5 years. We had to take that hit. Second, you've got a USD 18.9 million of foreign exchange losses. Together, combined, that's about 97-plus percent of reported operating loss.

Now excluding those items, the underlying operating loss of the entire company was only $1.2 million. Now that's real context. So no, it was not a $41 million reflection of the operating business. This was an accounting heavy quarter inside a company that grew revenue 55%, turned operating cash flow positive and ended up with nearly $100 million of cash. So that is why I say this quarter separates accounting noise from an operating reality.

Now the stock-based compensation charge is a noncash. It reflects a long overdue equity compensation linked with several years, which we have been discussing with the market. Now frankly, I would rather recognize the charge when our equity value is materially higher than issue it at stress levels or punish the shareholders. Now put it more simply, I would rather take the accounting medicine at around, let's say, $15 and hand out the company at $3. Now this is not arrogant. This is arithmetic.

The FX loss was painful. Nobody enjoys currency devaluation unless they have a very unusual weekend hobby. Now -- but again, look actually what happened underneath that accounting line. We collected cash. What people seem to be missing is that we've collected cash. Our customers paid us, Egypt paid us, milestones were achieved. All of our advanced payment. Let me repeat that again, all of our advanced payment guarantees associated with the project now have been completed and for every single project stage, we released and the project moved into a final implementation, which means we're successful. When naysayers came out and said you're not going to be able to deliver, we have now delivered. We're in the final stage of implementation. So yes, the FX [Technical Difficulty] the projects progressed, the guarantees have been reduced, and that is the operating story.

Now let us talk about what Gorilla is becoming, which is what we are all excited about. When we spoke to the analysts previously, Gorilla was still largely being viewed as a Security Intelligence, Network Intelligence, Smart City technology company. That business remains important. It is part of our DNA. It is who we are and who we were for the last 25 years. But the company is now moving into a much larger arena, AI infrastructure, GPU infrastructure, data centers, sovereign compute and secure national digital platform.

The transition costs money before it produces its full return. We're hiring people. We're buying hardware. We're securing land. We're progressing with power. We're taking colocation capacity. I think most of you have seen that press release come out in the last couple of days. We're investing in GPUs, networking, storage, cabling, security infrastructure, operational systems. Now we could have managed the quarter for optics. We chose to manage the business for scale. The easy thing would have been to protect in short term, the EPS, make sure that the right thing is to build the company, but that is most important for us to build this company.

Now personally, I do not believe PowerPoints run GPUs. Headlines do not cool data halls and definitely hope does not secure power for us. Most importantly, execution task. That is what we are doing. In India, we have signed contracts with Yotta and materially expanded our AI infrastructure collaboration. That program supports major infrastructure deployment and gives us credible foundation for significant revenue scale. And when I speak about Gorilla becoming a $500 million revenue business next year, I am not throwing darts at a wall after a long lunch, okay? I'm not drunk on my wine. I am looking at a signed demand, contracted opportunity and infrastructure required to deliver it. Now since then, people will say, Jay, you've been aggressive, fine, but I call it ambition with a calculation.

Now in Thailand, for example, we're advancing with our 200-megawatt AI data center campus in Korat. We have secured and acquired a strategic land. We've secured the foundation of the power planning. We are building the physical platform for Gorilla's AI infrastructure. But more importantly, it is an owned AI infrastructure strategy in Asia. Now Thailand is not just a concept. It's not just a mood for. It's land power, planning, water, dark fiber, cooling, security, a real development path. Anyone can say they are [Technical Difficulty]. Very few can assemble the infrastructure required to power.

We're also pursuing additional opportunities across Thailand, including Rayong. In Indonesia, I think [Technical Difficulty] you've seen, we have moved forward securing colocation facility in Jakarta and in Batam. Now across Southeast Asia, our goal is to combine own data centers, colocation facilities, GPU deployments and sovereign AI demand into one regional infrastructure platform. Personally, as Jay, I believe Gorilla has a credible path towards approximately over 500 megawatts of AI infrastructure capacity by the end of 2028. I'm not talking 5 years. If we execute properly, I can even go more. The demand is well north of a couple of gigawatts today. So we need to execute across Korat, whether it's Rayong, whether it's Bangkok whether it's Jakarta, Batam, Singapore, Malaysia, Philippines and other regional opportunities.

Now 0.5 gigawatt of potential AI infrastructure is not normal for a company of our current size. I've heard that before. Many have told me, Oh, you're too small, how are you going to build it? That is why this opportunity is actually so significant for a company of our size. And here is the most important point. We're not becoming a one-dimensional data center company. We have not stopped products. Raj, our Group CTO, he continues to develop platforms. He continues to deepen our Security Intelligence capabilities. He is continuing to expand our Network Intelligence portfolio and push our sovereign technology road map forward.

In Taiwan, we continue to pursue new customer opportunities. With Chelpis, for example, as you've seen a couple of weeks ago, we're advancing our quantum safety and security. With Astrikos in India, we're strengthening our intelligence layer that helps predict and optimize infrastructure across cooling, IT load and physical systems. That matters because the future of AI infrastructure will not be judged by how many GPUs I own and I can point to. It will be judged on whether the infrastructure is secure, resilient, sovereign, efficient and more importantly and most importantly, trusted.

Now compute without control for me is just expensive heat. Now Gorilla's advantage is that we are building the infrastructure layer and the intelligence layer together. We are also investing very heavily into people. A lot of people questioned us last year. And now I can tell you, over the last several months, we have added more than 100-plus employees and over 200-plus contractors across delivery, engineering, finance, compliance, operations, commercial functions, procurement and so on and so forth. That is not overhead for the sake of overhead. That's execution muscle.

No one and personally, Gorilla cannot deliver multibillion-dollar scale with a village hall committee and a lucky spreadsheet. No, that does not work. We're building the organization required for the next phase. So when you look at Q1, do not look at it as small quarterly miss against an old model. Look at it from the first visible quarter of a company that is going to be much larger and is being built. The old gorilla was about proving that we could turn around. The new gorilla is about proving we can scale.

We are raising our full year 2026 guidance to $160 million to $200 million. And I am personally focused on what it takes to build a profitable $500 million revenue business next year. That will require execution. It will require discipline. It will require capital. It will require delivery. And more importantly, it will require us to keep pushing across all of the markets in Middle East and Asia, along with other strategic locations. But the direction is very, very, very clear. Revenue is growing. Our customers are paying. I'm going to repeat that. Our customers are paying.

Operating cash flow is positive. Cash is strong. We are securing land. We're securing capacity. We're buying hardware. We are building data centers. We're developing new products. We're investing in people. We're building the capital platform to fund larger projects. That is not hype. That's not Jay spinning some BS; that's execution. And frankly, in an AI market where there are too many companies selling dreams before breakfast and explanations by dinner, personally, execution is becoming rather refreshing. So my message to the market is very simple. Gorilla is no longer proving that it survived. Gorilla is proving that it can build something far larger and bigger. The market can debate my narrative. Markets can enjoy the debate. It gives people something to do between the spreadsheets. But the cash flow statement has already started speaking.

So thank you. I will hand this over to Bruce, who will now walk you through the numbers in a way I counted to enjoy and now -- Bruce?

Thank you for that. I think Jay covered all of the highlights. I just wanted to zero in on a few of those highlights and then a few other numbers that stood out to me. So the first is, as Jay mentioned, revenue up 55% year-on-year. You can see from the full year guidance, $160 million to $200 million is the range compared to last year. So that shows we're already on track with our year-over-year forecast.

The other thing is that, that revenue is converting into operating cash flow. So we collected -- we collected invoices from 3 large customers in the first quarter. So that meant that overall net cash was $6.6 million. Subsequent to this quarter, we also got a release of all of the guarantees for our major project in Egypt. So basically, the free cash portion of the balance sheet is very strong and the restricted cash, which a year ago was a very large number, has come down to almost 0.

At the end of the quarter, we were $98.4 million of cash and cash equivalents. That shows, I think, that we have a fortress-like balance sheet, which is able to tackle the projects that we have enumerated. So in between the coax and then the expansion into the colocation facilities and in the projects at Yotta, et cetera, this is what gets us through the first stages.

We also -- the debt position continues to perform in the sense that it's continuing to dwindle. So we have $13.2 million of debt. So that leaves us with a very strong net cash position. And then the last thing I would say is when you look at the top line and the operating cash flow, obviously, the results, we're very excited about. But also we have invested, but a lot of this is operating leverage in the sense that the operating expense line, so in the financial results, it shows up as other operating expenses. That's basically the SG&A bill. It was only up 16% year-on-year. And that's because some of the major hires we made last year, some of the major steps up in the budget we made last year. So we're actually seeing those investments pay off. And then I think the second round of investments that we're making now into building out the infrastructure offering will soon pay off in a similar fashion.

The last thing I want to talk about was really -- so Jay mentioned some of the numbers about the FX losses and then the stock-based compensation. I would -- so there was a $1.1 million operating loss without those 2 big revaluations. I would note that basically, we carry large balances in 3 currencies in -- apart from U.S. dollars, obviously, in Taiwan dollars, in Thai baht and in EGP. And given geopolitical events in the first quarter, all of those had adverse movements. Taiwan, Egypt, and Thailand have all stabilized with currencies. So we shouldn't see a repeat of that magnitude.

Second is some of those exchange rate losses actually showed up in the operating figures because they had to do with the movement in the receivables value. So that, I think, masks the underlying profitability of the business. So in a stable exchange rate environment, what I'm saying is we should revert one without significant geopolitical upheaval, we should revert to a much more positive net income profile.

Then in terms of -- many people have asked us over the last couple of months, okay, you have all these projects. You've announced that you're going for project financing. What is the update? Without going into too much detail, which I think lenders would not like me to do is we are very happy with the progress. We have multiple term sheets that we have either received and are waiting to sign and go into documentation phase or we are in the documentation phase already. And then the next announcement about the project level financing will be one where we basically say it's closed, and this is the [indiscernible] project for the various projects that would be funded. So that is my update on the project financing, but we're very happy with how it's progressing, and it's comparing well with the assumptions that we had when we went in and signed the projects. So the profitability is there.

That's all for me. I'll turn it back over to Jay, and we can open up for questions.

Thank you, Bruce. Operator, we're happy to take the questions.

[Operator Instructions] Our first question comes from the line of Brian Kinstlinger with Alliance Global Partners.

This is [ Kevin ] for Brian. Could you talk about the planned time line for the variety of HPC AI deals you've announced during -- that you had announced, including the multiple phases, the 3, 3-year programs and the 200-megawatt campus in Thailand, as well as any others that I might be missing, particularly when each phase is expected to begin revenue generation?

Kevin, it's good to hear from you. Thank you. So we have started out our campus build-out in Korat. Let me start with that. So we have already started talking to the EPCs. We're looking at the water. We're looking at power. So our build-out should start somewhere around the third to fourth quarter this year. So that's when we will potentially start looking at pouring the concrete.

In terms of the other projects, so Yotta has already kicked off. We've already placed the orders with our OEM partner, Supermicro to our distributor in India. We are working through all of the customs, the government of India regulations and requirements for import, which is a very tedious task. That has kicked off already, and we are expecting our first delivery to come in at the end of July. We've already got the confirmation from our very close partner, Supermicro, who've basically given us the first delivery schedule. The second Yotta phase, which is the much larger project, that is expected to be delivered end of August. And subsequent to that, every month we are having -- up until November, we're going to complete all the delivery. So if you look at the revenues hitting our books, you will see the first phase revenues hit our books from September. Then going on for the second phase would be from October, November, and December.

In Asia, which you talked about, that was your first question. We are -- as you know, we've just signed up the colocation facility with NeutraDC over the last couple of weeks. That revenue is expected to hit our books from the mid of third quarter or the fourth quarter of this year because, again, we have the data center, we have the power and all that fully connected. We have now confirmed the full design architecture with the customer. We are working with our -- again, our partner, Supermicro to get the delivery schedule. And as of now, the delivery schedule looks like something between August and September. So we will keep the market updated as and when we evolve with our time lines. I hope that answers your question.

The next question comes from the line of Mike Latimore with Northland Capital Markets.

Congrats on the first quarter results. Your cash flow looks great. I guess you raised the lower end of your guidance from the start of the year, it was $137 million to $160 million. Maybe what was the main factor behind that?

Bruce, do you want to take that?

Yes, sure. So as you know, how we forecast guidance is we take what is contracted. So we don't just stick our finger in the wind and think about all the pipeline looks like this and this projected conversion and hope for the best. So we feel confident in 2 things. The first is that the time line, as Jay just mentioned, are looking very good for us to deliver above what was the previous low end of the range, $137 million. And then the second thing is that the second quarter and the third quarter are shaping up with more contracted revenue than we were originally planning on. So in between -- so by the end of the third quarter, I think we'll come out in a better place than we originally assumed. So those 2 factors led us to think, okay, the bottom end of this range needs to move up.

Then the $200 million is still being ultra conservative. You heard, for instance, that one of the phases would be October, November delivery. If there's any hiccups and it falls into the next year, I don't want to include that in our guidance for this year and then have egg on my face, right? It's much better to be conservative to the market, under promise but to be transparent. And then as things become 99% certain, then we will adjust the guidance as appropriate. Jay, anything I missed?

No, I think you hit the nail on the head. Mike, good to hear from you again. Again, we are working very, very closely. As you can imagine, a lot of the global political environment in terms of deliveries and all that have also been a bit of a challenge. We are making sure that we're getting the right attention at the highest level at NVIDIA, making sure that we get it over with -- through Charles, who's at Supermicro is the Co-Founder of Supermicro and make sure that we are able to get all the deliveries sent over to us. Now the good thing about India is that we've already gotten the delivery schedules, and that's why we upped the lower end of the guidance. Once we get through the hurdles of over the next few days or weeks, we will come back to you with a more concrete, maybe an upgrade for the upper end of the numbers.

At that $200 million level, how much of that would be in the kind of AI, data center, digital infrastructure category?

Roughly around 60% to 70%. Our core business will continue to grow, but this AI is new, so we're going from 0% to almost 150% of that in terms of revenue. So yes, that's going to be where we are.

Then on the Egypt deal, you're at full implementation. Is there a recurring revenue that continues now?

Yes. So we have a 5-year recurring revenue, as we mentioned to the market about 3 years ago, post the completion. So we are looking to complete sometime mid to third quarter of next year. We're in the final implementation stage. As I've mentioned earlier, we've gone through the motions. We've done all the deliveries. Customers have been super happy. One thing I want to mention here is that we now have nil, near nil advanced payment guarantees on any projects. All our projects have been delivered successfully. The total advanced payments, I mean, as you know, 3 years ago, our advanced payments were well north of $50 million, $60 million being held hostage by our customers, which is obviously very important for them. So we can prove we're delivering. Today, it's $45,000. I just want to make that statement very clear. So it means we have delivered, customers have paid us.

That's great. And then just last for me on the gross margin. How should we think about gross margin for the year?

Yes. So last year's gross margins were in the low 30s. Given the growth in the AI-focused business, the margins will expand. The gross margins on the data center GPU-as-a-Service implementation are sort of 75% to 80% in a bad case and can be even higher. So that will drive the gross margins up for the full year. In this quarter, we saw a lower gross margin than we'd like given the mix were basically skewed a little bit towards more hardware. And then frankly, we are a little more aggressive on the pricing just to get an extra customer across the line. But overall, we've announced the contracts that will form the growth phase for quarter 2 to Q4, and the margins on those are much higher than the traditional business, the gross margins at least. So we expect them to move higher. When Jay alluded to a guidance update, when we update the guidance, we'll have a firmer picture with a pretty tight range on what that will be.

If I may add to -- Mike, my apologies. If I may add to that, right, just a quick point. See, we -- personally, for Bruce and I, this was like a mobilization quarter, okay? We've been front-loading the costs. As you see, we have hired people, tons of people, new people for a company of our size. Infrastructure readiness. We've been buying hardware. We have to run POCs. We have data center capacity, which we have to pay for. You don't sign data center capacity by not paying. You have to pay a significant amount in advance. Then project delivery and technical deployment. So these are the costs which have kind of come in into the Q1.

Now most importantly, Mike, we're also building our capacity before the full revenue curve lands, right? That means the concept here first, but the gross margin recovery follows as the utilization increases. You've been in the space for so long, you understand data centers better than most people. The AI infrastructure for us does not scale for free. So more importantly, we're making sure that the platform is up, running, getting ready, steady. We're giving our 99.999% SLAs to our customers and making sure that all of our GPU deployments, our data center revenue, our managed revenues are all improving materially over a period of time. That was just to add to Bruce's point.

The next question comes from the line of Bharath Nagaraj with Cantor Fitzgerald.

I think you mentioned 100 new people were hired and 200 new contractors. I guess that will only be partly reflected or maybe I think Bruce was mentioning maybe fully reflected in Q1 and you're continuing to hire more. So just wondering how much should we expect operating expenses to increase by in the coming quarters? And basically, that ties into any comments on where the EBITDA target should be for the coming quarters in the year? That's the first question.

Bruce, if you want to take the first half, I'll take the second half for that.

Sure. So I think we mentioned that they were hired as contractors. So that's one of the reasons why the gross margin is depressed because a lot of the contractors would appear as project level costs, not as SG&A. In terms of SG&A, it was a little over $7 million in the first quarter. It's going to expand in subsequent quarters. We'll continue to build scale operationally. But it won't -- first of all, it won't expand as quickly as the revenue will. And then also given that we're adding higher gross margin business, there should be expansion in gross margin and it flows through to EBITDA margin. So last year, we saw at the end of the year, $101 million of sales and then $20 million of adjusted EBITDA or $19.5 million of adjusted EBITDA. So I would expect it will expand beyond that margin to 25%, 30% plus. I'm going to -- we'll give the exact when we have the final numbers.

Yes. And just to add to that for the second half, I mean, I think the market also needs to understand the number of people we're hiring is not enough. This will expand by another 5x or maybe even 10x more, both on the full-time side and the contractors. Let me explain one, right? Today, we bid these contractors, this is because they're sitting together, putting all these infrastructure in play and so on and so forth. But look at the execution side of it. We need people on delivery and program execution, which we'll be hiring. We'll look at engineering and infrastructure build-out. We'll be doing data center operations. I mean, just to build a single data hall, we would need roughly around 300-plus people, right, on an average, each person working, let's say, 60 people working in a shift, that's 180 people, including everything else, you're looking at about 300 people per data center operation. You've got your GPU deployment, you've got your technical enablement. You've got your product development. You've got your SOC, NOC and managed services. Then you have your finance, compliance, procurement and project controls, export controls. We have to have a separate legal team for all the export controls with the U.S. government and NVIDIA and which we have to support. And then finally, we have to have our commercial support and what I call as our customer success.

Now again, Bharath, we are not collecting these employees like stamps, okay? We're moving from a lean turnaround business into a scale execution. So the mobilization on Q1 and Q2 should be understood as hiring directly into what I call backlog execution. We're not hiring and waiting for new projects to come. We've already signed these projects. We're looking at about roughly -- we've got $3.2 billion coming from the year projects. We've got another $2 billion of signed contracts. So you're looking at about $5-plus billion of backlog execution.

Number two, Korat data center build-out, that's going to be at least another 1,000 to 2,000 people. The India GPU infrastructure, which is running up and running. We have the team from India sitting here today in Asia, in Southeast Asia with us, and we are building all of our infrastructure teams and so on and so forth. Then you've got your Southeast Asia colocation capacity. We have outsourced most of that work to our friends at NeutraDC. But then you've got your security, network intelligence and so on and so forth. So we are building what I call 0.5 gigawatt of ambition. And fortunately, that is going well in our favor today.

That's very helpful color. Just a quick couple of follow-ups. In terms of the capacity of data center capacity or AI capacity you want to be installing by the end of this year, I think you mentioned 60% to 70% at the upper end of your guidance is to come from that. But in terms of the capacity, what's it going to be? I think it was historically around 100 megawatts, maybe that was at the lower end. So I just wanted to clarify what that number is for 2026? Because I think 2028, you have mentioned 500 megawatts.

That's a really, really good question, Bharath. So we are aiming at anything between 100 to 150 megawatts by the end of this year. By end of 2027, my personal ambition is to complete the full 500 megawatts we've already received inbound interest on a number of other land sites and government approaches on -- from various different parts of Asia. We received inward requests in terms of how we can build up scale to about 2 gigawatts as well. These are conversations we're having right now as we speak. But my personal ambition, like I said, end of 2027, I want to have at least 0.5 gigawatts of power capacity with a view that I've signed another gigawatt -- another gigawatt of -- full gigawatt of development capacity as well.

Super. Just one -- sorry, actually, I have a couple more, if that's all right. Just on the -- you have obviously, a lot of competing demands for GPU. How confident are you that these -- all the GPUs for all these projects can be delivered given the supply chain issues? I mean, there's a lot of orders that you have won. Pipeline is pretty significant. And hence, I was wondering around that.

Yes. Well, listen, if I had a magic wand and I was looking into my crystal glass, I would love to tell you that I can have all this delivered by the end of this year, and I'll be significantly pumping up revenues next year, but it takes time. NVIDIA is releasing a lot of -- I mean, if you look at NVIDIA's release now, you're looking at the next generation of Vera Rubin also coming out. Customers are now keen to look at that as well and potentially talk to us about it. But that changes the entire goalpost as well sometimes. So we're making sure that the customers' architectures don't change. So we have to make sure that the customers are grounded, right? There's a nice shiny object out there. Customers want to run towards it. So we've got to keep them grounded.

Now on the delivery side, fortunately, we have not had any major issues at all in terms of NVIDIA to date. The global concerns or issues today, which are like a nose around my neck, don't seem to be having created a major problem yet. But what has created some level of delay is the current lack of availability of memory and storage in the market. And compounded now, we are also seeing shortages in CPU availability in the market. So we are working with our partners. So we are very, very, very closely integrated with Supermicro right now. We're working day in and day out. In fact, I was there the whole of the week before with them. We're spending the next full week at Computex as well in Taiwan, where we are sitting together and making our plans as to how we make sure that the memory does not -- I mean, getting the GPUs is great, but our capacity needs to increase, right? So we are working hand in glove with every single major partner of ours across the region to make sure that it does not falter.

One small and minor accounting question. On the SBC costs, am I right in saying that given you recognized most of what you had said you would in Q1 itself, the remaining quarter should be minimal. Is that right? Or am I getting that wrong?

Bruce?

Yes, I think that's correct. I mean, there was some -- there was deferred stock-based compensation, and it's been out there for a couple of years. And for various reasons, we decided to pay in this quarter. So it takes no longer an overhang.

Bharath, if I may add to that, and this is not me being funny. I've seen comments like, oh, my God, CEO has gotten paid and blah, blah, blah. No, this is not just the CEO. This was for the employees as well and everybody else around the company. I want to make sure that the compensation, the market understands that the compensation was due for the last, what, nearly 4 years now since the company went public. And employees need to be paid. They need to be given their stock. Unfortunately, it had to come in this quarter. That's okay. If I don't pay my employees, that's the wrong thing for me to do. So I'm setting the right precedents.

The next question comes from the line of John Roy with Water Tower Research.

So Jay, obviously, there's been a lot of talk about much larger and larger projects, AI infrastructure, GPUs, data centers, et cetera. I was curious, I know Bruce talked a little bit about funding just to your maybe philosophy about how are you going to fund these massive projects? And where do you stand on that? Maybe just give a step back and tell us where you're at.

John, good to hear from you. I was wondering when you would ask me a question. That's a very fair question, and frankly, it is the right question. The scale of Gorilla has changed, right? You and I know we talk regularly. We're not talking about small software deployments. We're signing and pursuing large AI infrastructure, GPU data center projects across India, Thailand, Indonesia, Malaysia, Singapore, Philippines and so on and so forth. That requires capital. And there's no version of my story or this story today where we signed multibillion-dollar opportunities to buy GPUs, reserve data center capacity, procure networking, memory. I was just telling Bharath about it, memory and storage, secure power, buying land, building data centers without funding the business properly, right? I mean, GPUs take money. I mean, I don't know if people realize buying a B300 server costs me more than $0.5 million. That's excluding networking and all the other hoopla that goes with it.

So when a customer tells me that I need 1,000 servers, you're looking at about $500-plus million of investment just on the GPUs on the servers. And then you've got networking and so on and so forth, which costs you another $20 million to $25 million. It's a pretty penny. On top of that -- so where are we today? We have not yet relied on dilutive equity to fund the build-out today. Our approach has been to protect shareholders while building the capital stack required for our particular club, okay? We are actively working on vendor financing. We have received term sheets in the range of approximately $0.5 billion to $1 billion across all of the vendor financing and debt structures. We are progressing with various debt financing. We have term sheets and bank-led proposals between $300 million to more than $700 million, $800 million that contemplate lending at the project or the SPV level rather than relying purely on the listed path. You remember what Bruce said last quarter, we're making sure it's a nonrecourse. And I think people need to understand when Bruce meant that, he meant that for real.

So we're also looking at different levels of SPV structures. Now that is important because infrastructure assets could be financed against their own cash flows, the contracts, equipment and the project economics where possible. So we are working with various levels of structures at the SPV level. We're also building Gorilla Capital. Again, the market seems to have forgotten about it because it's what I call a strategic funding platform. The goal is to bring long-duration capital, including pension funds, endowments -- sorry, institutional investors with structures that can support a 7- to 10-year long-life infrastructure asset investment.

Now we're matching funding to the asset. GPUs, data centers -- sorry, and contracted infrastructure revenue should not be financed with short-term thinking. Now the capital structure has to match the commercial life of the assets. More importantly, we're also being very disciplined on shareholder impact. We will not do financing simply for the sake of financing. The objective is to make sure that there is growth, profitability and shareholder value. So what the market needs to understand -- I have no idea what's happening to me, sorry. I apologize. We're looking at potentially more than $5 billion of signed contracts and executable opportunity across our AI infrastructure and data pipeline -- data center pipeline. The market knows about this already.

If we want to move Gorilla from a $100 million revenue business last year to $500 million revenue next year plus annualized business for the next 5 years, then the business has to be funded like a Sirius infrastructure platform. So growth requires capital, and more importantly, profitable growth requires very disciplined capital. So that's why we're not raising money because the business is weak. I think the market needs to understand this, John. We're not raising money because the business is weak. We're assembling capital because the opportunity is much, much, much larger ahead of us. And the difference is very simple.

My message to you and to the entire market and to all the people listening to this call is we're funding growth through a variety of vendor financing, SPV level financing, long-term --long-duration institutional capital. But we're doing it very carefully to protect our shareholders, keeping them in mind at every single time. I hope that answers your question.

Yes, it does, actually. It kind of brings up a corollary question, which is the pipeline. Can you give us any kind of color on the pipeline? I know there's some big numbers out there. Just curious if maybe you could summarize it with some...

Sure. So today, the pipeline -- the signed contracts or I would go into say backlog is well over $5 billion, okay? The pipeline to be signed or in negotiations and discussions is well north of another $5-plus billion. That's excluding any of the build-out we're doing currently in Korat or in Rayong and so on and so forth. So -- and when I mentioned this previously to Bharath, I made this very clear to him that we are looking -- my personal ambition would be to get a full gigawatt in there. If I get the full gigawatt with offtakers -- and by the way, just FYI, we do not sign any colo. We're not purchasing any land without an offtaker. I have signed offtakers completely ready to take over the capacity day 1. It's not a single hour. I will spend on GPU power without having an offtaker. So our revenue will hit the books as soon as the date opens when the ribbons have been cut. So if we do the 1 gigawatt, then you're looking at -- you know what the revenues are. I'm not going to prompt any numbers right now, but we will look at a significant upgrade from even the $500 million plus number.

[Operator Instructions] The next question comes from the line of Barrett Boone with RedChip.

Jay, Bruce, congratulations on the strong start to 2026. As discussed earlier in the call, receivables came down meaningfully during the quarter. Can you talk about what's driving the better collections? And how we should think going forward about cash conversion as we scale towards the $500 million revenue target?

I'm happy for Bruce to start, and then I can chip in. Bruce?

Sure. So what's driving it is really we have 3 core customers, which we disclosed in the 20-F. And we delivered over the course of 2025, we invoiced and then in 2026, we said these are terms, make sure that we collect. So 2 of them have always been extremely prompt payers, and that's the kind of customer we like. And then in the third one, it's really just a simple logic, commercial logic where we say, look, in Egypt, we've been working together since July 2023 when we were awarded the contract. We've come this far. We've done this much for you. Is it too much to ask that you pay on time and the customer is -- recognizes the value and then the core nature of the infrastructure that we've built. So that is helping and just the sticky nature of our product. And then the thing I would say is that with new customers, we're extremely vigilant about the payment terms for who we -- new customers that we're onboarding. Jay?

Absolutely. Thanks, Barrett. Bruce, that was actually quite interesting. You stole everything from me already. So just to add to it, Barrett, personally, revenue is wonderful. Of course, everyone likes revenue. But cash is what separates the business from being a brochure, okay? We produced operating cash flow. As you know, you know the numbers, I'm not going to repeat it. There was a huge swing, positive $6.6 million and so on -- a $1 million and so on. But more importantly, what drove it? I think, again, I think we need to educate the market. First, our customers paid us. That may sound very obvious. But when you look at large infrastructure projects, payment behavior is one of the clearest signals of delivery quality. It shows quality of the company. Customers do not release meaningful cash because they're feeling charitable, okay? They release cash because milestones are being met, documentation is being accepted and projects are moving forward.

The second part is that we've also tightened our project discipline. We're no longer a $20 million revenue company. We're being more aggressive internally and invoicing, collections, milestone tracking, project governance, all of that customer acceptance. It is not enough to win large programs, but we must convert that into recognized revenue and subsequently into cash. So the difficulty is that we want to make sure that we are running the business profitably.

The third most important part of the business is -- now that we're building the business where cash conversion is becoming part of the operating model, but not an off the top. What matters next is scale. Now if we are being serious about moving towards our $500 million of revenue, then we cannot allow working capital to become for me, a museum of unpaid invoices. We need disciplined contracting, delivery, acceptance, billing, collections, cash application and so on and so forth.

So as we scale Barrett into data centers and GPU, cash flow will always not move in a perfectly straight line. I wish it did, but these are all large programs. So we're going to make sure that we are going to stick to our guns on every single month. But the Q1 signal is very important. We grew revenues. We reduced our receivables. We reduced our advanced payment guarantees. I just mentioned this earlier to Mani. It's gone down from $50-plus million to $45,000. That's talking about next phase of our business evolution. So the simple answer is, as we scale forward, cash conversion will become key -- it will become the most key metric for us, which personally, Bruce and I are watching and will continue to watch like a hawk. Revenue gets attention, but cash earns respect for me. So for me, cash will be our standing ovation going forward, Barrett.

Understood. I just had one last question. Actually, about today's release, you do cite that the combination of infrastructure and AI products gives Gorilla leverage. Can you talk about how everything sort of works together and how these products help you win infrastructure deals that perhaps a pure-play data center competitor couldn't?

That's actually a really good question. I think, again, markets and many, many investor seems have also missed this. The simple point is, Barrett, we're actually not just selling space, power and cooling. A pure-play data center operator will give you building, they'll give you racks, they'll give you power, service desk, useful, but it's not stuff of Shakespeare, okay? I'm just using a British chronology here. Why? Because Gorilla brings the full operating layer around the infrastructure. Think about it this way, site assessment, power planning, cooling infrastructure and architecture, feasibility studies, data center readiness, all that is being done by us. Racking, stacking, cabling, GPU commissioning, network integration, cloud enablement, that's also being done by us. When you look at security, whether it's physical security, access control, cybersecurity, your SOC capabilities, your NOC monitoring, CCTV, access controls, we build and manage everything ourselves. We also operate it. That means we have a 24/7 monitoring, managed services, remote operations, preventative maintenance, life cycle support, all of that.

So for us, we're not just providing a room with very, very lovely blinking light. We are making sure that our products are sitting in it. And that's why we invested into Astrikos, right? Look at the difference. We have security intelligence products, which actually help customers protect their critical infrastructure, their endpoints, their users, their cameras, their operational networks. We've got the network intelligence products coming in from our friends at Astrikos. We have built our own SD-WAN, secure tunneling, orchestration and edge connectivity for products. Our business intelligence layer talks about all of our operational data, our infrastructure data, our video, IoT analytics and actual decisions.

So when we sit with a government, telecom operator or enterprise and any infrastructure partner per se, right, we're not saying here is a building, good luck. That's not us. That's not a strategy. That's a real estate with electricity, okay? It puts Gorilla in a much stronger position than a pure data center competitors. So with Gorilla, it gives them capacity plus control. So look at it this way, customers care about sovereignty, what is it, security, latency, compliance and so on and so forth. They don't have 12 vendors doing this. Typically, when you go into a data center, you've got 10 to 12 vendors doing this. We are there for the one throat to choke when something goes wrong. This is very, very, very important.

Now our model also gives us leverage. It gives us scale. It creates differentiation. It also creates what is called as the Gorilla edge, right, all pun intended. Because if you look at the full stack model across design, development, deployment and operations and so on and so forth, we're sitting right at the top of it. So if you look at a pure data center, think about it as someone giving you a garage. But more importantly, Gorilla gives you the garage. It provides you the engine, it provides you the security system. It provides you the control room and someone who's awake at, let's say, 3:00 a.m., like I was awake at 2:00 a.m. this morning, when things actually matter, Barrett. I hope that answers your question.

That concludes the question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you very much, Pamela. I really appreciate it. Analysts, investors and employees listening to my conversation today, thank you very much for your support. I would want to leave our investors with this thought. We have rebuilt the business. We've proved the technology. We've collected cash. We've turned operating cash flow positive and are now moving into a much larger arena, AI infrastructure. We've always been an AI infrastructure company, okay? We've been building the blocks. If you hear me what I said in my first interview on the NASDAQ in July of 2022, I said we were moving into building an AI infrastructure platform as a Service. That's exactly what we're doing. Data center is a part of it. It's not a pivot. So please do not use that word. We're not pivoting. We are building the platform, and we're going to close and secure the platform. We're building GPU capacity. We're building sovereign compute, and we're making sure that national platforms function. We're buying land. We're securing power. We're taking data center capacity. We're building new products. We're hiring new people, more people needed to deliver. So we're not talking about scale from a distance, we're actually building it.

So my message to the market is very simple. Judge us on execution, judge us on cash, judge us on delivery and judge us on whether we keep scaling. Everything else for me is commentary. And frankly, there's been plenty of commentary from people who are just sitting on the sidelines, and these people are not even able to build a sandwich, let alone an AI infrastructure business. So Gorilla is not only getting started. The market can doubt the story if it wants, but it cannot ignore our direction of travel.

Thank you very much for listening in. Have a lovely evening.

Thank you. And this concludes today's conference call. You may now disconnect.

Welcome to today's fireside chat with Gorilla Technology. I'm John Roy. I cover technology here at Water Tower Research. And today, I'm joined by Jay Chandan, he's the CEO; and Bruce Bower, the CFO.

I should mention that Gorilla's safe harbor statements can be found on their website. This fireside chat may not be reproduced or written transcript distributed without the expressed written consent of Water Tower Research.

Jay and Bruce, welcome, guys. How are you doing?

John, absolutely fantastic. Thank you very much indeed. How are you?

I'm doing well actually.

So Jay, obviously, you made the Yotta announcement. Can you give us some of the color and insights as to what is in that announcement? And what does it mean?

Absolutely. The first takeaway, John, is quite simple. It's a moment where I believe, and Bruce, of course, we both believe that Gorilla has moved away from just being an AI company to an AI infrastructure company. Think about it from -- moving from PowerPoint to [ Power ], okay? For a long time, the AI market has been full of brand speeches. We've been looking at all of this glossy gags, you're looking at people. We're using the word transformational like confetti at a wedding. So for me, that's not what it is.

Yotta is not about a pilot program. This is where real infrastructure, real GPUs, real deployment, but more importantly, real revenues. Now the initial Yotta deployment is about 640 for high-performance servers, and this is representing roughly around 5,000-plus GPUs. But if you look at this, what Gorilla is doing, it's moving from what we call the base case of reality to actually what really matters into what we can prove going forward. And that has already been what we call scaled up by the second contract we signed with Yotta, which we also made an announcement. That covers an additional roughly around 20,736 GPUs.

These are B300 GPU cards, which will be the largest AI cluster within the region. And as you know, NVIDIA has taken 1/2 of the offtake agreement with Yotta. And all these have to be delivered by 30th of September this year. So, the total aggregate value of that second phase is roughly around $2.7 billion, $2.8 billion, net-net, putting about 225,000 GPUs with roughly around $3.2 billion, $3.3 billion of announced commercial values for the Yotta framework. Now for me, personally, that's not just a press release, that's intent.

Now the second takeaway for us is India. Now India is not just a big market. India is one of the most important AI infrastructure markets on the planet after U.S., China, it's -- I mean, you're talking about 1.6 billion people with roughly around 1 billion-plus people using the Internet, roughly around 22.5 billion, 22.6 billion UPI transactions just last month alone. So you're not talking about a population story anymore. It's about a digitized population which loves data. And who loves data, AI does, right?

Data needs compute. Compute needs power, they need cooling, they need racks, they need networking, they need security, and more importantly, people who can actually deliver the whole thing without turning this into a very expensive, what I call, glamorous bunch of radiators. So that's where we come in. We -- as you know, we actually have teams in Taiwan. We have a big data center team now in Thailand, India, U.K. and in Egypt. So we're bringing all of these together to create a global deployment team.

The third one, which we are seeing is very important, which is the sovereign AI part of it. This is not just about compute -- the companies wanting compute. This is about nations where we are seeing countries like India decide that their data, all of their models, all of their citizen services like the Aadhaar Card and so on and so forth, their financial services and all of the critical infrastructure just cannot be sitting somewhere else because it is convenient, right?

If India is building its own compute, as you know, they've gone from 38,000 high-performance GPUs, they'll be adding another 20,000 GPUs. We're also getting significant demand requests from India and the Indian government where we're seeing another 30,000, 40,000, 50,000 GPUs on top of what we've already built. So that tells you the direction of travel. It tells me that India is not just dabbling into it. They're investing billions so that they can be competitive.

And finally, the most important thing is Yotta. Now Yotta is a phenomenal partner for us. It's not just like a local partner who just wakes up at morning and says, "Look, I've got a few racks in there and you've got a wave of flag, and thank you, we've declared victory." When somebody actually goes and sees the Yotta data centers, they will understand how serious these guys are. I'm talking about data centers that are 14 stories high.

Personally, I have not seen anything of that scale today. So what they bring is they bring discipline, they bring the cooling, they need to bring all the customer access. More importantly, we've created a relationship of trust, finally. So all that, including our commercial execution, it's not just about performance, it's not just about a supplier relationship, it's about scale. So for me, the bigger message for your question, sorry, it's turning out to be a long response.

It's about Gorilla becoming the picks and shovel company of the AI revolution, right? Soup to nut, the one throat to choke, as you said. Everybody wants to talk about AI, everybody wants GPUs, everybody talks about networks. For me, what Gorilla is building along with Yotta is, it does 3 things, which shows that the demand is real. It shows that India is enormous and Asia is growing as a banner.

Third, Gorilla can execute at scale. We're not talking about smaller deployments of GPUs. So we are going to be banging our chests or beating our chest hard. We're going to make sure that those machines switch on. We're not just going to live on hope. But more importantly, I think this is where, for us, the fun begins. It's exciting.

Wow, that's a whole lot going on. So Bruce, how do you corral all this stuff to really focus on profitability and improve the balance sheet?

Well, the improvement in the balance sheet has been an ongoing focus for the company. So, at the end of 2024, we had about $21.5 million of debt. As of the end of the first quarter, it's down to $13.2 million. So it's been a very disciplined, sustained reduction. We didn't just go pay it off willy-nilly. It was basically when it came up for renewal or we didn't need it, we paid it down.

And in so doing, we freed up restricted cash that was held against the debt. So basically, we had debt. We had to post collateral. The collateral was restricted deposit. So we pay off the debt, release the restricted cash. So net-net, it was very little unrestricted or free cash that was moving out to pay this debt down. And then we've also been disciplined in terms of reducing restricted cash balances. So just last week, we had an extra $5 million released. So, we're feeling very comfortable about the reduction in restricted deposits and debt.

The cash that we have is about $90 million as of today on the balance sheet, and this is really with one goal. It's to fund all of the ambitious project pipeline that we have identified. So, I think the way we think about it is 2 ways. First is that there's plenty of cash for growth and then to take the steps that we need. So for instance, putting down deposits to place orders for equipment, et cetera, and also having a reserve so that there's plenty of runway for SG&A and everything else in the meantime.

The other thing I would say is that profitability, well, all the projects that we're talking about, the new ones that we've signed up that we're implementing will be a boom to profitability. The sort of historical margin profile [ is between ] 30% to 45%. The exact kind of gross margin depends on the data center focused projects, but it's higher than the previous. So each of these new projects, when we implement them, improves the overall mix, and it's going to lead to improving margins, both gross margin level and then EBITDA level. So we're excited about the outlook for revenue growth. We're excited about the outlook for profitability and margins overall and also for cash generation going forward.

And then the last thing I would say is that, as always, our focus remains on finding the funding where it doesn't stress the parent company balance sheet. So for many of the projects where we can, we're getting project level financing. So that means debt or, in some cases, non-recourse and non-debt financing at the project level. And then also where we're looking for additional funding, it would be -- we're looking at debt and nondilutive financing at the parent company level as well.

And then I think Jay can talk about Gorilla Tech Capital and what that means as well.

Excellent. So we've talked about some of the recent future outlook. We've talked about controlling costs and getting the profitability better and that's stupendous. So Jay, give us an update of where you are on the progress? And how are you on the global rollout? I mean there's a lot of countries you've mentioned, but what's the progress?

Yes. John, I mean, you've covered us for a long time now, right? I think we've grown old together. So 3 years ago, Gorilla was largely seen as a strong technology company or a technology company with one market. Today, we're becoming a serious AI infrastructure player across not just Asia, Middle East, North Africa and even in Europe. That shift did not happen by accident. It was very deliberate.

The decision we made was deliberate because we decided we're not going to simply sit in one corner of the world, polish a few products here and there and wait for the world to notice us. That, for me, was an expensive mediation with a bad return on investment, right? Now we decided that the demand is real. Governments are caring about sovereign AI. Enterprises need secured infrastructure and global players were not always moving very quickly. Some of them actually, we've realized move with all the urgency of the British passport office in August. So you can understand how close that is, right?

But that has taken us to different markets, whether it's India, Singapore, Malaysia, Thailand, Indonesia, The Philippines, Taiwan. And with the Astrikos investment, we're actually now starting to look into the Middle East and United States. We're having multiple conversations, particularly around real-time infrastructure intelligence, smart infrastructure, and more importantly, AI-enabled operational control. That also leads us into that GPU deployment, service level operations, data center intelligence and so on.

So we're not just dropping equipment in a room and hoping that someone is going to remember we have to switch the lights on or switch -- put the switch on. This is about real infrastructure where we're actually creating very complex machines. Now, this is also -- more importantly, it's about how we can help design, deploy and manage in these regions.

Remember, when we are going into a region, we're not just building from, let's say, India or Thailand as a low-cost base. We're building within those regions. Like Indonesia, we're building a team now. Singapore, we're building a team. Malaysia, we just started looking at hiring as well locally. So when I talked about Thailand, Thailand is a great example. It's becoming a very important anchor for us. Why? Because we've been very active in Thailand.

As you know, we're working in smart grids, we've worked in smart city, we've worked on data center security and critical infrastructure projects. With the announcement we made a day ago, Korat, that's where the story became real for us. This was about Gorilla owning land, Gorilla owning power, Gorilla owning fiber, water and execution at the same time. So the Korat, which is near -- in Nakhon Ratchasima is a campus that we recently purchased. It's roughly around 200 megawatts of total facility load, providing about 150 megawatts of IT load.

There is -- obviously, we are working with the government to help us provide more power within that particular campus. And currently, the government is talking to us about additional 250 to 300 megawatts of power being available through the local substations, which are right next to the plant or the land we purchased. Now we're not talking about a proper AI infrastructure campus. We're talking about not a hyperscale but near hyperscale quality. okay?

That means it gives us the ability to create high-density compute, it has GPU as a service, it allows creating sovereign cloud and hyperscale colocation. And really where it matters is it becomes a stepping stone into the next level as to how we're evolving. We're also looking at other land agreements in the region, not just here, but we're looking at Indonesia and Malaysia as well.

And we're looking to invest into Malaysia at the Johor complex where we can actually buy land and build data centers. So across the region for me, it is absolutely clear. Singapore gives us the financial, commercial, regional discipline. Malaysia kind of gives us the, what I call, the power-rich data center market. Indonesia gives us the population. It gives us the scale and the digital demand. The Philippines is developing really quickly, and what is happening is this need for cloud, AI and sovereign infrastructure and the demand is increasing and accelerating quite rapidly.

And Taiwan, of course, as you know, remains a core part of our DNA and which helps us develop all the products we want, whether it's the BMS products, whether it's your SOC/NOC and so on and so forth and more importantly, brings us the customer history. So in short, if AI for me was, let's say, a dinner party, so India would bring the appetite, Thailand would bring land and power, Singapore would bring discipline, Malaysia brings scale. Indonesia brings in population, but Philippines brings in the growth and Taiwan brings for me the engineering brain, and we have some very strong people. I think we have a little over 200-plus people in Taiwan.

So, for me, now, when I go to any meetings, I look at it and say, great. Listen, wonderful speeches everyone. Now how are we actually going to build this bloody thing, right? And that's very important. So we're moving from country to country, but we're winning at the same time. It's not just about creating an office and a fancy place. So we are becoming aggressive. And as you know, a few years ago, everybody saw us as a technology company or a smart technology company. Today, people are seeing us as an AI infrastructure partner, which is helping them grow to the next phase, which is sovereign, secure and building regional GPUs. I hope that answers.

No, that's great. It does bring up the question, maybe one question, one final question is that, what are your plans for fundraising to support a lot of this stuff? And can you give us an outlook into 2026?

Sure. I think Bruce touched upon this very briefly. I mean this is a very touchy subject for a lot of people. Everybody thinks we're going to dilute the hell out of that. But let me start with this very important point. I think I need to let the market know. When people hear AI infrastructure, they immediately assume huge capital requirement, therefore, huge dilution, right?

I follow some of the message boards, I stopped looking at them now because people keep thinking, God, this guy is going to raise $1 billion and dilute them. Frankly, some companies do that. And I can understand why they're upset by it. People get one contract, they run to the market, they issue equity, dilute the hell out of everybody else, very elegant. But it's like basically burning the furniture to heat your house.

You don't do that, right? That's not our model. What we are trying to do is, our approach is very clear. We wanted to be very disciplined. And as Bruce mentioned, we're trying to be as nondilutive or with minimal dilutive structures. That is very important for us. Even if we're going to $1 billion, a couple of billion market cap, we will keep that rigor absolutely. That means we're looking at various options, project-level financing, customer-backed structures, asset-backed debt.

Bruce talked about vendor financing, SPV-based financing, institutional co-investments. What am I missing? infrastructure funds. Then we have got strategic partners funds who are looking at AI data centers. We're looking at family offices who are looking at long duration of asset investment and not worried about the whole quarterly gimmick or anything as such. But the most important acquisition, which we did this year was the Gorilla Technology Capital, which is the Shackleton Finance acquisition with a full FCA approval. I think the market has missed the message on that.

What people don't understand is that we have created a new route to fund data centers and GPU-as-a-Service deployment. How? We're basically looking to work with, like I said, SPVs, build co-investment, non-dilutive project funding across the infrastructure pipeline. And so we are targeting roughly around $2 billion to $3 billion of funds under management by the end of 2027. So the strategy for us is to raise money, but not to raise money for the sake of raising money. It's to make sure that we match the right capital to the right asset. So we've broken down our assets.

So if you're looking at data centers, then we would be looking at infrastructure capital. People have asked me, how do you deploy GPUs? Isn't it going to be expensive? No, we're looking at asset-based or customer-backed financing. That's number 2. If you're looking at, let's say, long-term government contracts or enterprise demand like we have signed up recently with Yotta, then we're looking at contracted cash flow financing. That's number three.

Then if you look at sovereign infrastructure, then we attract institutions using the likes of Shackleton, where we attract pension funds, endowments, institutions, strategic capital, right, and family offices. So for me, the lazy answer would be dilution. The grown-up answer for me is structure. And personally, I don't think so Bruce and I spent the last 3 years building or strengthening the balance sheet just so that we could hand over a dilution sandwich just because we have some financial jargons being thrown in there.

Now, as you know, you asked about our outlook, we're looking at what, about $150 million to $200 million of revenue. Now again, that's another question for people. People are like, "Oh, my God, you've signed all these big deals. Why aren't you giving us guidance or re-upping your numbers, right?" I could do that. I could wake up one morning and just say I can do that overnight, but I have to be realistic. Data center projects do not happen overnight. The time taken to build the architecture, the time taken to work with the likes of NVIDIA, Supermicro, getting the architecture design correct, the networking and getting the supply chain.

Nowadays, everybody is talking about memory and storage. People don't realize it takes 5 to 6 months to get it delivered. So how can I sign a contract and then come to the market and say, "Look, I have re-upped my guidance." I would be the absolute idiot unless the market is missing something. We're not -- we're building infrastructure. So, the most important thing is, 2026 for me was a year -- is a year, sorry, where we're going to be proving that the turnaround is real and where scale. It's no longer going from $100 million to $120 million or $130 million. We're going from $100 million to $150 million to $200 million.

My personal target next year will be about $600-plus million, which I've already talked about. We said $500 million plus. So market, hear me out, hear Bruce out. We will adjust the guidance responsibly as and when needed. Data centers definitely take time to develop, deploy and finance as well at the same time. We're not talking about a microwave dinner where we can just cook it overnight. It's going to take -- we have to make the right level of guidance. We've got to get the market excited at the same time. It's not a 5-minute job. And I surely don't want to disappoint people at the end of 3 months and say, "Look, we've got to redo the guidance to a lower number."

And then finally, again, my message to the market, we're not going to fund this like amateurs, okay? The last 5 months or now I've got 4 months and 5 days, I have spent more than 3-plus months on a plane, not because I fancy sitting on a plane and having my bones aching, it's making sure that we kept the funding. Bruce and I are on a plane almost every week. We want to make sure that we are not wandering around Wall Street with a begging bowl every time we need a cable. We're making sure that the money is real and that it is long term and sustained.

So this is the difference between building a company or just a financing story. We're building a real company, John. So what is the outlook? Big opportunity, serious by discipline and pipeline and definitely no nonsense. So if you'd ask me, some people in this market are still doing this whole AI, like what is the best example I can give you? Like Mr. Bean trying to assemble an Ikea furniture without instructions, right?

Lots of noise, one missing screw and a surely very worried set of investors. So we're taking the opposite approach, land, power, GPUs, customers, contracts, cash flow. Most important, cash flow.

Excellent. Excellent, gentlemen. Well, I think we're going to have to leave it there at this point. Jay and Bruce, thanks so much for spending time with me today and with the investors.

Investors, to learn more about Gorilla, please visit our website or visit Gorilla's website. Our website is www.watertowerresearch.com. I want to thank everyone for joining us. And now I'm going to read a short disclaimer.

The views expressed in this fireside chat may not necessarily reflect the views of Water Tower Research LLC and are provided for informational purposes only. This fireside chat may not be distributed or reproduced without the written consent of Water Tower Research and should not be considered research nor a recommendation. WTR is an investor engagement firm, not a licensed broker, broker-dealer, market maker, investment banker, underwriter or an investment adviser. Additional disclaimers can be found at www.watertowerresearch.com.

Welcome to the Gorilla Technology Group Inc. Fiscal Year 2025 Financial Results Conference Call. As a reminder, the conference is being recorded. [Operator Instructions]

Before we begin, we will read the forward-looking statement. Today's call includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and projections about future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially.

Forward-looking statements often include terms such as expects, believes, plans, anticipates, may, should and similar expressions. For a discussion of important factors that could affect Gorilla's results, please refer to our filings with the SEC, including our most recent annual report on Form 20-F. Except as required by law, Gorilla undertakes no obligation to update or revise any forward-looking statements made on this call, whether as a result of new information, future events or otherwise.

I would now like to turn the conference over to Jay Chandan Chairman and Chief Executive Officer; and Bruce Bower, Chief Financial Officer. Please go ahead.

Thank you very much, Krista. Thanks, everyone, and thanks for joining. I will keep it quick. If you want drama, the market's already provided enough already today. So I will stick to the facts.

Now let me start with the headline. We reported a record full year revenue $101.4 million, up 35.7% year-on-year. This is the first time in our risk, we have lost $100 million annualized revenue. We guided the market at $100 million to $110 million, and we delivered inside that range. That matters because credibility matters, and we intend to keep it that way.

Now the more important part is how we got share. We executed a real turnaround. Our IFRS operating loss narrowed to about $13.7 million from $66.9 million last year. That was a remarkable improvement of $53.2 million or 79.6% reduction in the IFRS operating loss. Now our IFRS net loss netted to about $11.3 million from $64.8 million last year and 82.6% improvement. And IFRS basic EPS improved to about $0.51 from negative 6.13%, which is a 91.7% improvement. So yes, it was a proper sweep. It was not just a cosmetic one.

We did all of this while keeping the underlying profitability at scale. Adjusted EBITDA came in around $19.1 million and adjusted net income was about $19.9 million and with our adjusted basic EPS being 0.89 and an adjusted diluted EPS at 0.88. What I can tell you is that it is strong and it is very disciplined.

Now I know what comes next because investors always ask it, how did we do versus expectations for the fourth quarter. market consensus was roughly around $34.75 million of revenue and adjusted EPS of $0.30. Based on our full year results, our fourth quarter revenue was approximately $35.6 million, which is well above consensus. And based on the implied fourth quarter adjusted earnings, our adjusted EPS was roughly around 0.37, which is about 22% beat versus the 0.30 onset.

Now for the full year, the market consensus was approximately $10.6 million of revenue with an $0.8 billion for adjusted EPS. We delivered roughly around $101.4 million of revenue and delivered about $0.89 adjusted EPS, which is about a 6% beat versus confess. So the message from micro side is simple. We delivered record revenue. We delivered a major IFRS turnaround. We delivered underlying profitability that exceeded expectations.

Now let's just talk about the broader market because it has been volatile. The market conversation has shifted from -- you beat the quarter to, with AI spending hold up. And I'm sure all of you have seen this in the last few days and weeks. That is a fair debate, but personally, it misses the bigger picture. AI is no longer a discretionary software trend. It's rapidly becoming a national capability and a core operating layer for enterprises and governments.

Now the next phase of AI demand cannot be defined by 1 buyer or 1 deal. It will be defined by many buyers across various sectors, building permanent capacity, governments; regulated enterprises, telecom operators, logistics networks, financial services platform. This list is long and the spend is becoming structural. The compute is also evolving at a rapid pace. This is what the market is really missing.

Now AI compute is actually shifting from training that cycle to an influence led cycle. This is important because that does not time. It broadens demand, influence pushes AR into everyday workflows and mission-critical operations with increases the need for distributed complete across regional data centers and edge environments where latency, data residency and resiliency requirements matter.

Now this is where edge becomes a major driver -- as most of you know, we were one of the lead edge companies when we went public, and we continue to invest heavy edge compute expands. And what AI can do because it moves inference closer to the decision point is closer to the sensor, closer to the customer interaction closer to regulated data. It does our force multipliers for adoption in public safety, transportation, logistics, financial services, telecom networks, industrial and the whole plethora [indiscernible].

Now let us talk about scale of the infrastructure market in our region. We're not kind of relying on slogans. We're tracking that data very, very closely. We have an internal and of a research team, which is doing that, and we use external data at the same time. Now we see Asia Pacific data center investment growing from roughly $30 billion in mid of 2026, up roughly to about $90 billion by 2031. We see installed capacity broadly doubling from about 29,000 megawatts today to about 63,000 megawatts by the end of the decade.

Now Southeast Asia also follows the same trajectory, going from the low teens of billions towards roughly $30 billion by 2030 as more capacity is being built in the market rather than exported offshore. India is another example. It's scaling very rapidly. From a little over 1 gigawatt of installed IT load today, they're moving towards about 1.8 gigawatts by 2027 and to multiple gigawatts by 2030. We're seeing the same trend in the Middle East. We're seeing the sovereign build-out dynamic with market growth from low single-digit billions to a high single-digit brand by early 2030 as governments and national champions called local compute and secure infrastructure.

This is the structural build cycle. We are positioning Gorilla for. So what are we doing in '26? We are advancing our AI infrastructure and data center build strategy well across Malaysia, Thailand, Indonesia, Singapore and the other regions, including Taiwan and so on. We're expanding our evaluation work in India. We're progressing our strategy in the Middle East included Saudi Arabia, where memo has already been signed and we're very actively exploring data center development opportunities in that region.

We're also exploring opportunities to buy and/or build our own data center assets. Ownership changes the model. It gives us more control over activity and stronger long-term positioning and the potential to build recurring infrastructure-led revenue streams rather than relying on project cycles. Now in table, we are also strengthening our product edge for its next stage of adoption. Our core content cryptography will started to be ready in April 2026.

At our last of interception product suites remain in continued research and development as we expand sovereign grade capability across security and intelligence as well as compliance-led deployments. Now come 2027, we're also now putting a team together, which would be investing very heavily into 60 local introduction as well. Now we have currently got about 300 full-time employees today, a little over 200-plus contractors working on all the projects we have signed.

But based on just the projects we have recently signed we anticipate growing to about 1,200 to 1,500 full-time employees by mid-June next year, and that would be about an additional of roughly around 700 to 800 contractors. So we'll have roughly between 200 to 2,500 employees for the company at any given point of time.

Now investors want proof. They want execution, not a narrative. So I will speak directly about the signal that matters, delivery and collections more about the cash conversion. Our top customers are progressing very strongly, and our customer satisfaction is reflected in our payment behavior, okay? In the first 2 months of 2026, we have collected more than $22 million from our largest customers for solutions delivered and involved in 2025. We also expect meaningful collections in the coming weeks.

Now we finished the year 2025 with about a fair cash of $104.8 million. But what was very important that we did all this by reducing the total debt load to about $13.8 million, which is 35.6%, lower from the $21.4 million in the prior year. Now through the refinancing of certain lending agreements and the repayment of others, we also reduced our debt, releasing more than 5.3 million of deposits previously held as collateral against some of these loan obligations. Now this kind of balance sheet gives us very meaningful flexibility to execute existing programs, fund working capital to delivery cycles and scale our infrastructure strategy with discipline.

Now we've also spent at the same time, more than $11 million on buybacks today, which we believe the market continues to undervalue Gorilla relative to our performance and our strategy. Personally, I think you could call this confidence. I call it [indiscernible], right? Why? Because that leads me to my next one. We're aiming to be cash flow positive in 2026. That's not just a slogan for me. It's an operating objective that comes with very disciplined delivery, disciplined overhead control and a very disciplined cash collection.

And finally, a lot of people have asked me this question over and over again, Gorilla Technology capital. Personally, it's a game-changing catalyst for our next phase. It's designed to expand our ability to execute larger infrastructure programs by structuring capital efficiently, aligning long-duration funding with long-duration assets as well as enabling our customers to move faster with clear financing pates. Some people said, hey, maybe they're buying the bank.

No, we're not buying a bank. I mean you guys have to understand what Gorilla technology capital do. It strengthens our ability to scale data center peers accelerated GPU infrastructure deployment and more upon we participate materially in larger mandates with institutional-grade structures and governance. So if I summarize 2025 in 1 line, we delivered a historic revenue milestone, we executed a major profitability turnaround -- we strengthened the balance sheet and positioned Gorilla for the next stage of AI infrastructure, which is sovereign and regional, more importantly, distributed, which is becoming increasingly edge-enabled.

In 2026, we ship from proving we can build the work to scaling what we can deliver, converting execution into cash, expanding our data center footprint across India, Malaysia, Thailand, Singapore, Indonesia, Middle East and more importantly, using Gorilla technology to unlock materially larger programs without compromising. All this while accelerating our product road map, which means we're investing heavily into R&D.

Thank you for your time. I will hand over to Bruce, who knows the numbers well not to recite them without blinking. Bruce, please go head.

Thank you, Jay. I think you covered the main points in terms of the financials. I wanted to hit of things. So first of all, we mentioned that the cash balance at the end of the year was $104.8 million. I'd just like to emphasize that due to the collections so far this year, the cash balance actually increased. So as of the 26th of February, it was $108 million of unrestricted cash and $116.6 million of total cash. That is in spite of spending $3 million this calendar year, so in the last 2 months on share buybacks. So we have been able to increase cash and also buy back shares this year. So it's a strong start of the year.

The other thing I would point out is when we talked about freeing up the debt load or reducing the debt load and freeing up cash deposits, some people asked, why didn't you pay off all of the debt? Well, the debt that we have remaining, the $13.8 million is at an average interest rate of 3%. So to be blunt, it makes sense to keep it as flexible capital instead of repaying it and borrowing and higher rates.

The last thing I would talk about is we issued guidance last year of $137 million to $200 million as the revenue guidance range for this year. We are maintaining that. At this point, we're not prepared to issue gross margin or EBITDA guidance, but stay tuned in the coming months. We announced that basically the range for why is there such a wide range of $137 million to $200 million. It depends on the delivery schedule of certain data center projects we're pursuing with Freyr and also with others. That I think we'll have a very good update coming in the next month to 1.5 months about the timing of those projects, about the delivery schedule from NVIDIA and then also with the customers, and that should help to firm up the guidance and give you a better idea.

With that, I'd just like to reinforce what we mentioned in the press release, which Jay said, we believe that the balance sheet has improved to the point where we're able to fund growth initiatives and also to buy back the shares that we feel that they're undervalued and that we can take on a lot of the growth projects that we've talked about, not just the increase in revenue this year, forecasted to be in the middle of the range would be almost 70% increase but also the contracts that we have in the pipeline, so a $7 billion revenue opportunity in the pipeline. We believe that we can fund substantially through the access to debt facilities, mostly through project finance and then through the cash that we have on the balance sheet at the moment.

With that, I'd like to turn it back to Jay and if once I open up to questions, we can do that.

Thanks, Bruce. I'd like to open up the questions to all standing by. Thank you.

[Operator Instructions] Your first question comes from Brian Kinstlinger with Alliance Global Partners.

Yes. Close enough. Great. Thanks so much guys come certainly a very long way over the last 2 years. Congratulations on that. Has anything changed in terms of your best guess on timing for the first 3 phases of the Freyr partnership. I think the plan was project financing to help you start in April for Phase 1, September Phase 2 in December for Phase 3? And then the second part of that question, outside of financing these projects, are there any gating factors to starting these projects? And if so, what needs to happen in those time frames?

Brian, good to hear for you and thank you for your kind comments. We are on track with where we are today. Obviously, they're considering the market forces today, we have had some slight delays in terms of the delivery. But that said, let me kind of walk you through what has happened some grams have moved in terms of timing, and we talked about the a contract, for example, that is on schedule. We are currently in the final stages of getting our first set of GPUs coming through over the next few days and we'll be deploying it as we speak.

We have also accelerated the timing on some of the data center discussions when we spoke last, I think we were looking at about 12.5 megawatts of data center. If you recollect and we were looking at roughly around several hundred high-density airlines. What we did was rather than kind of commissioning them all on a single day, we're slowly putting them in plant-based. So power cooling network zones are all commissioned. Revenue ramps are going to be energized as we speak. And as the racks go live, we will drop in the clusters through our partner ecosystem, which also drives what I call the GPU as a service usage line.

Now what is very exciting for us, and I can tell you today, as we have now realized that we would need to kind of be deploying a lot of capital in the data center space ourselves because we have been inundated with a ton of requirements. So we are now currently looking at about more than 600 megawatts of capacity rather than the 12 megawatts alone. And that allows us to control our destiny over a period of time, which means we're looking at several hundred million dollars per year once all these racks and the GPUs are all in nation.

So from our perspective, Brian, the part to that particular point is a very controlled ramp-up, not a single bank. Now you talked about are there any delays. There are no significant delays so far. Thailand MOE, for example, it has been delayed because of the political transition, some sort of department organization. As you know, the new prime minister that has been elected. So we're just waiting for the postelection leadership and sign-ups to settle as we speak.

But otherwise, we are not facing any delays. We're going ahead with all of the approvals, all of the permitting, all of the site readiness all of the customer prerequisite flip as we go into it. So when the customer gets reopened now, I think we will start our billing on time. I hope that answers your question, Brian.

It does. My second question is you've got this large pipeline of other data center opportunities you've discussed. And not to say that your business development has been slow. It's been very fast. But do you think those customers are waiting to see how execution is on the first freighter contract? Is that going to, in the near term, hold back agreements? Or do you think those will be able to move forward without delivery on those 3 projects?

Absolutely not. Like I mentioned, our pipeline is exploding. And we have not been slow in our sales plan. I can tell you only the thing we've been doing has been restricting. We've been inundated and I'm not exaggerating it at is the right word for that. So first of all, the deals are mature at the start of the year of January this year, we were looking at POCs and MOUs and so on. So it was very promising since then, we have moved into late-stage commercial structuring or improve force contracting, which naturally kind of increases the scale and the certainty of the pipeline.

If you recollect what I told at the end of December, towards the end of December, we are making sure that we have certainty of the pipeline. Now I mentioned the $1.4 billion in Southeast Asia contract, that was only a catalyst. Once the government in telcos basically saw what we are able to deliver and we started signing up with the first 12.5 megawatts suddenly out of nowhere, it triggers some sort of a sovereign gain grade AI infrastructure requirement and a huge surge in interest for us. So I don't want to give you names, but what has happened is that the demand behind that is significantly larger than where itself. So that's one of the primary reasons why our pipeline is now enduring the dollars.

Third most important part, if things have changed from ambition. Governments are no longer looking at this ambition, it has turned into urgency for us. Now I mentioned this last time as well. Not only are we looking at GPU capacity as strategic infrastructure, the ship that actually moved into edge compute. Distributed environments are taking shape right now. And like I said, the market has missed that already. People think, oh, is the spending going to continue, it is going to accelerate. It is not going to continue at the rate it is going. It is going to exponential. We are sitting with every sale major customer on the planet. And I can tell you, these platforms are just going to explode in terms of compute requirements and demand.

Then finally, our execution has not just been on 1 data center, Brian. We've been doing data centers for a very long time. We built data centers on behalf of government, for example, in Taiwan, in Thailand, in Egypt and so on and so forth. So things like when we deploy large-scale lawful interception programs, which are more complex than putting up a data center, the governments and the organizations, they look at it and say, look, what is Gorilla delivered we see that and the confidence growth. So we are not investing in our past levels, but we are putting everything into motion. So like I said in my previous response, we are now targeting over 600 megawatts of power. So the opportunity to have this very comfortably substantial prime, and it's only growing.

Great. My last question, you had [indiscernible] in my career in your type of business is always a great leading indicator. How would you characterize the recruiting market in the geographies you're hiring? And then outside of the execution staff, are there significant AI HPC senior executive level that gives you that add strategy and expertise at the high level?

That's a really good question. So as you know, we are hiring at a rapid pace. What you don't see is on our website, the names of the top people we have hired already in Thailand, we're actually going strong hires of about 80-plus people. In Taiwan, we have deployed a significant data center team and an R&D team for our cybersecurity products. We have done that through what is called as a hub-and-spoke model. This is very important because our R&D platform and engineering needs to accelerate both our product and our services capabilities.

So on the services side, as you know, Satish came in mid of last year, and he's been driving all of the client impact and deepening our technical capabilities. On the R&D side, we've been hiring SDLAN postponed and cryptography, local interception capability, video analytics, we've been growing that product. And over the atomic by April, we would have a fully launched world first, fully ready post-quantum to SD-WAN. And we're already working on massive proof of concepts with customers as well. But this is what matters to localization. Every single region they're working in, whether it's India, Middle East, North Africa, Southeast Asia, East Asia. They're all asking about how are you building stronger land capacity.

So what do we do? We are building teams in Thailand. So my team in Thailand, for example, because we're looking at some very large data centers here, will be about 1,000 people by the end of this year. It will be probably 1,000 people in Thailand, will be about between 200 to 300 people in India and our Taiwan team will be not the 100-plus people. Now we are hiring senior executives as well at the same time. As you've seen, Thomas has come in and joined us as CTO of Infrastructure. Jackie has coming from the hardware side and become the GM for Asia.

We are also hiring next-level capability for them as well. At the same time, we're also making sure that finance and compliance are also tightened. So we are hiring to improve cash discipline, collections, control, audits and so on and so forth. So think about it this way, the hub-and-spoke model is going to be centered across each of these regions. And as we expand and grow, we will be spending our teams rapidly over the next course of few months. and the teams are already and running at a rapid pace.

Your next question comes from the line of [ Brad Naiga ] with Cantor Fitzgerald.

Thanks for the presentation. Just a few questions from me. Just to start off with on the gross margin. Just wondering on the mix, which resulted in a, let's say, a slightly different gross margin than what I was expecting, but I just wanted to understand what the mix of revenues is? And then the second question is around -- given that you're going to deploy the latest compute for data centers in Southeast Asia, what kind of level are you level of revenue are you modeling per megawatt there? What sort of use cases are you thinking about for that?

Bruce, do you want to take the first part of the question? I'll take the second part.

Sure. So I think a better way to think about it is 2024, we had abnormally high service mix in the revenue mix. So the majority was service. And then it was a higher percentage of hardware in 2025. It was sort of 40%. So that's why the gross margins were a little bit lower than you would expect. The other thing is that we announced last year that we had signed 2 major law enforcement customers in Asia. And in at least one of those cases, the margin that we have predicted going into the project was a little bit lower than we normally except that's because it was a key win for us as a client and as a solution to demonstrate our capabilities.

So altogether, that is why the margin drifted a little bit lower. I would say that going forward, so building on what Jay mentioned about the pipeline is we are much -- we have the ability to be very choosy about the projects that we do. So because we have so much demand, if the margin turns -- if the credit terms or the credit profile of the customer isn't right or if the payment terms aren't there, then we just say, I'm sorry, you either come online or we'll move on to the next project.

The other thing is that the data center -- the GPU as a service has an extremely high gross margin. So it's 70% plus 70% is kind of the minimum cutoff. There is obviously a depreciation hit because we would -- an SPV would hold the equipment and then that would be consolidated onto our financial statements. and we will take the depreciation charge, I would say, at scale, that would be like a 25% operating margin, but that is at scale, I'm not providing yet the forecast for margins for this year.

We're going to wait until we get the exact details firmed up. But so that's how I would say 2025 is kind of a dip in terms of gross margins, and I would see them improving over time and a much stronger margin profile for all the new business coming in?

Just to add to that as well, Brad, more important, we're investing very, very heavily into building the business for sustainable long-term growth and gross margins, right? Now that brings me to the second part of your question. No. In terms of pricing today, in Asia, it's structured either in what we call a capacity per server per month or in terms of usage per kilowatt hour depending on the customer and the program. typically for sovereign enterprise deployments, we are targeting contracted multiyear take-or-pay kind of a style, where the pricing and sustainable margins and cash conversion is predefined. So we know exactly what we're getting ourselves into.

Now we avoiding a single rate. I mean personally, I don't want to quote a single rate because it dates by GPU class, as you know, some land utilization profile, power, cooling specs, location, land values, service level stack and so on and so forth. But the proof point for us comes only when we sign these programs where the unit economics are very disciplined and our collections and our milestone payments protect our cash. So there is the whole single kind of an Asia price, if I may. We're not just looking at Southeast Asia, by the way, there's no Middle East or Asia price.

But that said, I can tell you, typically, if you're looking at CSP class GPU rack capacity, they can run in high 4 figures to low 5 figures per GPU per month. when bundled with power, floor space, connectivity, managed services, but also remember, these are long-dated fixed milestone agreement. So we often layer, what we call a service level fees, compliant components and so on and so forth. Now each of these can change, for example, in the U.S. spot rents for top-tier GPU can be 2x to 3x typically on what you see on structured regional capacity in Asia.

But what we are doing is that we are not putting a standard rate. And because our compute requirements are more stringent here and our contracted deals are much more longer, we are able to create a highly what I call competitive pricing as opposed to even the United States. So think about it this way. Where compliance premium and service premium will do about 20% to 40% where we include covenants, telemetry, managed the ops and so on and so forth. But the energy cost differentials mean that Asia deals are often much more profitable.

So if I may say this, combining Asia and the U.S. is like thinking like hotel in Vegas might be cheaper, but 10,000 in Bangkok are much more expensive than some of them even in Manhattan. Did we answer your question, Brad?

Yes, absolutely. May I just sneak in a quick a couple more. small ones. Does the Arctics acquisition that you made, does that carry like in terms of your strategy, does that -- are you planning -- do you have an explicit pricing and margin contribution for the new contracts that you signed for this? Or is it currently being bundled to strengthen your competitive advantage and increase like long-term customer lifetime value?

That's a great question. Let me kind of give you an update to why we invested, why we are integrating, right? I think that's your question. And what are we going to do? What is your spring hoard look like, right? If you'd ask me -- that would be a question I would ask myself. When we actually looked at Astrikos, First of all, what is Astrikos? Astrikos is a real-time infrastructure intelligence engine that does monitoring prediction, optimization for critical systems. Now it is already a deployed system in very serious environments, including some high state level smart city platforms, for example, the new Indian Parliament complex.

I think what I talked about it previously, and major initiatives in the Middle East as well. That matters because Astrikos is not a demo, it is a fully deployed solution. Now your second part of your question, what are we doing with it? We're integrating our Astrikos into 3 parts of our stack. First, most important, smart city and national infrastructure operation. It gives us telemetry addiction layer that makes national infrastructure more measurable, but at the same time, optimizable in the real time. Now what does that mean? It strengthens our ability to sell outcomes, not just the technology, with real uptime and response time, threat detection. And finally, we have what is called generating high operational efficiency for the customer.

The second is video intelligence and security. Now Astrikos typically announces real-time monitoring your positioning around critical infrastructure, security and operational workflows. It complements our video intelligence stack, and it allows us to improve our operationalization of the data across our SOX environments. And finally, this is very, very important. This is a big one. data centers and environments like a standard in the data center, you cannot run very heavy GPU environments. You will need continuous telemetry, predictive optimization, integrated security and operational automation. This is where Astrikos actually plugged into that requirement.

And then on the kind of the springboard and if I was looking at Astrikos, for me, it's a spring growth in India, but it's very immediate because it brings deep presence in the region, shortens our sales cycle improves our delivery readiness. In the UAE, we are already kind of working on building up at least in footprint. In the U.S.A., is a standard in a partnership-driven market. So we are kind of progressing market level entry work in that region as well. So think about it this way. We're a significant minority investor. We have an option to materially increase our ownership, but also giving us a lot of flexibility to integrate and progress the traction on a very large commercial scale. Got it?

Yes, absolutely. That's very helpful indeed.

Your next question comes from the line of Mike Latimore with Northland Capital Markets.

Yes. I'm a great year. excellent results there. I guess just a couple of things. You talked about maybe some more collections coming in here this quarter. Can you frame that a little bit more? Is that -- are we talking a few million dollars? Are you talking over or maybe you can't say it, but just kind of curious on that?

Bruce, do you want to take that?

I would say it's plus or minus -- it's $10 million plus or minus a few million, $2 million to $3 million on the side.

Okay. And that relates to the 2025 effort?

It's solutions that were delivered in the voice in 2025, yes.

And then just to keep it simple for me. The large Southeast Asian deal, so it sounds like pretty much no change there in terms of total value or value by each of the first 3 data centers. Is that right?

That's correct. But that has become a catalyst like I mentioned previously.

Okay. Great. And then Jay, you talk a little bit about maybe seeing your first group of GPUs in the next few days. I guess just a little bit more on that. Does that specifically relate to the Southeast Asia deal? And then also did you sort of say that you expect sort of to get some of these GPUs every week and then that builds over time? Or maybe just a little more clarity on kind of that pattern?

Sure. So I think we were creating a flywheel effect, if I may, Mike. What we are doing is we are making sure that we have delivery coming in every week. So the latest agreements we have with our OEMs is that starting next week, we're getting a few deliveries going in. But again, I mentioned this previously as well, we've actually won other contracts as well. So we are actually delivering against those contracts as well. So you will see a regular flow of -- that's why we've hired a very solid procurement team as well. which will make sure that these deliveries are on time.

So for us, these data centers are driving GPU demand. And for us, our GPU demand unlocks much more deeper national engagements. So don't look at as the payer contract is a one-off. This is actually, like I said, a catalyst to some very large contracts we've already signed. We've also agreed by the way, with all of the OEMs, local OEMs in the region. We have signed all of the MOUs that required we've signed all the LOIs and the pricing agreements, the Palms have been done, the SOWs have been completed. And as you know, we are now just working on the delivery schedules and the mechanisms over the next few weeks.

Got it. So these GPUs will go to more than the Southeast Asia customers, how it sounds like?

Yes. If you give us a rates on that. I'll give you a very concrete schedule as well.

Okay. Great. And then I guess in terms of the Southeast Asia deal, the first data center, you're still thinking gets up and running in the second quarter?

We're trying to push it for the first quarter, depending on the delivery schedules. But I'm 100% confident, 101% confident that it will be live second quarter. We've just completed the agreement on the bond. We have sent the bonds to the -- our OEM partners. Obviously, as you can imagine, it's not just the GPUs coming in. You've got a whole bunch of networking equipment, which have to come along with that. And as we kind of scale up with the customer and the demand accelerates, we will have to then kind of build on top of it.

Now one of the things, Mike, I think your question leads to another important aspect. We have been struggling to get all of the compute demand from our end customers to be satisfied in the regions. As you can imagine, the U.S. is investing in hundreds of billions of dollars, we don't see that kind of investment within the region. Yes, we've seen KKR acquired SCT for $10 billion recently. But again, to deploy at data centers at scale, we need a lot more compute. So we have decided internally that we were going to build our own using mobile technology. So we're currently targeting about 600-plus megawatts.

And hopefully, fingers crossed, we should be able to complete all of the signing of those by the end of this year as well. And we'll be going into full-scale production to the latter part of this year as well. So we're super excited, and we think we are actually creating a new market, which doesn't exist currently.

Great. And then maybe the strategy to buy and build some of your data centers change this question. But I think on your business update call in January, you mentioned that you're trying to lease out any available capacity you can in colocations across the regions? I guess any update on more -- any releases that you've executed on?

Yes, yes, yes. We already have signed many deals in the region. It's absolutely fascinating. But the problem is, like I said, it doesn't exist, whether it's 9 megawatts, 4.5 megawatts, 99 megawatts, 21 and 25, that's kind of the available capacity today, okay? So you're absolutely right. What are we going to do? We're simply going to turn and build new capacity and deliver infrastructure ourselves to the end customer, right?

Mike, I've not made this -- maybe I've not made this clear previously. Our demand is in hundreds of megawatts Okay. And Asia, not just -- I'm not talking to Southeast Asia or East Asia or even South Asia, Asia Pac as a whole does not have the capacity right now. India, for example, has only 1 gigawatt of fully utilized scale. And as you've seen recently, they had the AI Summit and India is absolutely going bonkers in terms of deploying the scale. But there are other structural issues. We need power, we need water and so on and so forth, right?

So we are working. And just FYI, we are working very closely with the Indian government, to make sure that we get our infrastructure ready across various requirements and various architectures and edge deployments in the country as well. So long story short, keep your eyes in your field, we are definitely headed in the right direction over the next few days.

One thing I would add to that when we're looking at reserving or lining up capacity or building it ourselves, this is a different -- we're not in the business of building scale and building it and hoping the customers come. So the business here is purpose-built, AI-focused data centers or GPU as a service for those clients. So what that means is, first of all, we're not going to invest capital until we see clear customer demand. The second thing is that we demand customer prepayments so that money talks.

And then in most cases, the customer prepayments are an integral part of our financing strategy, so that in between project finance and customer prepayments we can secure 90% plus of project CapEx cost. So what we found is that when customers show commitment upfront, it obviously makes us more comfortable to move ahead and also makes it more likely that the economics work in our favor.

Your next question comes from the line of John Roy with Water Tower Research.

Obviously, some things changed over the weekend. I was wondering if you could give us any kind of update on operations or outlook for the Middle East given the Iran-U.S. situation?

Roy, thank you for the question. First of all, to everybody who's listening and everybody out there, I'm genuinely sorry to see what is happening. My heart really goes to all the families caught up in this and to everyone who's lost their loved one. I'm feeling very, very sorry. I've got trends across both sides of the past.

Now from a business perspective, John, we are monitoring the situation very closely. And as you know, we have a very, very disciplined risk posture. At this point, we have not seen any material impact on any of our operations. Egypt is progressing at full flow. Our delivery continues to guess plan. And across the region, we can see we're continuing to execute with a very appropriate caution, strong compliance and a very clear operational controls.

Now what we are watching for are very practical factors that matter, logistic routes being more, supplier lead times, local security conditions, FX exposure, collection cycles any regulatory changes that could affect movement of goods for personnel. If anything changes, the impact would likely show up on timing rather than demand. In that case, we will respond very quickly. protect delivery quality of our delivery, update the market when there is something definitive to report. But the trends down in our favor and it favors very strongly, and they're accelerating, not slow. I hope that answers your question.

Yes, it does. Actually, speaking of trends, and you obviously was talking about AI in India. Can you give us maybe take a step back and look at the macro AI environment? And what do you see happening out there in general?

Sure. That's actually a good question. I think a lot of people keep asking me, and I've been speaking about this at various events as well. I would divide this into what I call 3 different trends, John. First one, in no order, right? AI is currently becoming national and a regulated infrastructure. If you look at governments, telecom operators, regulated enterprises, they were treating the eye compute as strategic capacity tied to their sovereignty, data residency, compliance and critical services.

Now that shifts demand from optional pilots to what I call targeted programs with long duration and intent. So think about -- look at Asia. They are rapidly drawing up their chats now and thinking we don't want to fall behind. And so now they're coming up with large budgets but more importantly, we have long-duration intent, as I mentioned.

Now the second side to that is the center of gravity, and this is very, very important. Again, I don't know why I'm stressing this, but I would stress you this again. market is getting this wrong completely. It's all -- people are talking about, oh, this is not going to sustain the investment into AI and the companies are investing hundreds of billions of dollars in the U.S. and in China. The center of gravity is moving from training to inference and from inference to distributed influence.

Training is very lumpy, okay? Inference is very persistent. You need to take that. I think most people on this call, I'm happy for you to take this message. Training is very lumpy. Inference at the same time is persistent, which means as the influence moves into everyday workflow, your compute demand spreads across regional hubs and closer to the data source which drives our more build of regional data centers. It is not going to slow down. It is only going to go up exponentially.

And that brings me to my third trend, which is edge. Now as is expanding the addressable market dramatically, Edge brings AI to the decision point where latency, privacy and resiliency, all matters -- so what happens now? It accelerates the adoption across public safety, as I mentioned previously, transportation and telecom networks, logistics, industrial operations and so on and so forth. These things do not replace data centers. it multiplies us. Once again, it multiplies them by creating more endpoints that we absolute regional capacity and orchestration.

So think about it this way. In the future, you're going to find a lot more what I call distributed inference points, which will create a huge requirement of regional capacity. And that's why you see the likes of open AI or meta or Google or anybody else in the market, they are moving across a distributed environment. And those trends favor us very, very strongly, and they're only accelerating John, they're not slowing down at all.

[Operator Instructions] Your next question comes from the line of [ Barrett Boon ] with RedChip.

Jay and Bruce, congratulations on the transformative 2025. I just had one question regarding Quantum Safe Networks and your SD-WAN product. Can you share some concrete milestones that investors can look for?

Sure. As I've mentioned previously, we have actually created a very strong product, and we've already tested it very effectively in the last few months. Roger's team is very confident that they will be able to launch it by end of April 2026. Now just to give you, when we deploy AI infrastructure, we're not just dropping GPUs in the room. We're talking about secure connectivity, telemetry, orchestration and compliance layers, okay? These are very, very key important.

People need to understand we're not selling hardware or we're not renting hardware. We're providing ourselves. That means your SD-WAN has your quantum safe encryption allows us to control the network edge to the core very security. That creates for us the solution value and improve the margin mix. That's number one.

Second, our quantum solutions and why the people be like, oh, they're just going after it because it has the word quantum? No, we're not. People think that are less. They make edge AI viable. Why? Because edge compute only works at scale, if connectivity is intelligent and more importantly, secure. So what does SD-WAN do? What is our post quantum SD-WAN do? It gives us traffic optimization, it allows segmentation and performance control.

Now post-quantum crypto future proofs the transport layer. So once you build the transport layer, it will help future proof that and together with the distributed AI architecture, which we just responded to it makes these architectures deployable both in a national and an enterprise environment.

Now what does that make us? I think that was probably where we were headed to us with your question. They do not position us as a rent or a compute for rent kind of a provider. It positions us as a trusted operator. That means we can design solving grade, quantum safe, policy-compliant AI network. And more importantly, we can help you GPU generate additional revenue secure network that protect it and more importantly, what makes sure that neither cause the part when we get more complicated. When the world gets more complicated, like we are in today, we make sure that our non and our quantum does not fall apart.

That's very helpful. And congratulations again.

This concludes the question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you very much, Krista. That was really helpful. some very impactful questions, some caught me off guard as well, which is interesting. But to all our investors, to our analysts and every person who's supporting Gorilla. First of all, thank you. You have trusted me as and the entire Gorilla team, long enough to let results replace speculation, okay? But are people out there who say, our contracts are garbage and our numbers are garbage, that's okay. It's speculation.

We are building the AI infrastructure that government and critical industries will rely on, and we intend to execute with discipline. To everybody who knows me, they know me as someone who will execute with discipline. So what I will do is thank every single one of you. And I will stop here and hand over before my tea gets cold. It's 5 a.m., actually 5: 25, and that would be a genuine crisis for me. Thank you, everybody. Have a lovely day.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.

Hello, everyone. This is Craig Brelsford with RedChip Companies. Thank you for joining today's event with Gorilla Technology Group, which trades on the NASDAQ under the ticker GRR. With us today, we have Jay Chandan, Chairman and CEO of Gorilla Technology Group; and Bruce Bower, Chief Financial Officer. Today's event will consist of management addressing pre-submitted investor questions followed by an analyst Q&A session moderated by John Roy of Water Tower Research.

Before we begin, please allow me to read today's safe harbor statement. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results, along with other statements about future expectations, beliefs, goals, plans or prospects expressed by management constitute forward-looking statements. Any statements that are not historical fact should also be considered forward-looking statements. Of course, forward-looking statements involve risks and uncertainties.

Let us now turn to those presubmitted questions. Jay, are you ready?

Absolutely ready. Thanks, Craig.

Can management break down current signed backlog versus announced pipeline and outline expected revenue recognition over the next 4 quarters.

Yes, definitely. I will give you the real picture without pretending pipeline as revenue. Firstly, backlog for us means contracted revenue. It is signed, scheduled and tied to delivery milestones. Most importantly, going into 2026, our signed and contracted backlog is well north of $100 million today. And that is the execution base we can deliver a guest. Now pipeline, on the other hand, is what we call qualified opportunity set, and I'm going to define this again when I complete the answer in detail. It matters a lot to us because what is important is that what we do not book becomes contracted until it becomes contracted, we don't move it into the backlog. Now the important point of scale, we're actively pursuing deals well in excess of $10 billion across the AI infrastructure, national systems and data centers today. And this, for us, is not wishful thinking. These are opportunities really at scale, but more importantly, it is also something we're measuring ourselves against.

Now the numbers for 2026, we have guided $137 million to $200 million. Now that range is built on the backlog driven by the base plus the phased ramp-up in our Asia, Middle East, Europe data center programs as well. Now we deliberately sequence delivery so that we have typically signed contracts in hand that exceed what we intend to perform within the single year. Now on data center specifically, our operational target is to deploy up to 100 megawatts this year -- by the end of this year and roughly a few hundred megawatts, which we are expecting to sign over the next few months to be 100 megawatts by the end of next year, obviously subject to contracting approvals in the delivery sequencing and so on. We will only disclose the specific sites and basis when we are contractually allowed to and able to.

Now on revenue recognition, this is what our next 4 quarters look like. Early quarters are basically mobilization, engineering and procurement milestones commissioning, SOWs commissioning and getting all the delivery schedules. And finally, more importantly, recurring operations as the Raco life. So you should expect from us a controlled ramp-up through 2026 as contracted milestones convert into revenue and utilization as we drive the services built. Now if you want me to respond to that particular question in a single sentence, we have a contracted base well north of $100 million, a guided ramp-up in 2026 bringing up to $200 million. We're chasing a pipeline of over $10 billion while scaling AI infrastructure in megawatts. Now I told you I'm going to define what the market sometimes construes or misconstrues. Signed backlog means executed contracts with delivery milestones. These are not MOUs. These are not verbal commitments. These are what converts revenue as milestones as they are achieved.

Number two, the assigned backlog. Now a portion of the signed backlog scheduled for the period, this is not the full multiyear value. This is for that particular year, and this is our execution when it comes to near term. The third, announced pipelines. Now these are publicly discussed programs that we are progressing. They are not fully contracted, and they're not fully defined in terms of the number of years and the number of phases, but that moves into a backlog as the contract moves forward. Then the fourth most important internally qualified pipeline. This is the wider opportunity set for us. So this is not revenue, not guidance, but this is the future growth once contracted. Bruce, do you want to add something to this?

Yes. Thanks, Jay. I just want to add that we've always been very clear from the initial announcement of the contract with [indiscernible] there were several phases. And then basically the timing of the revenue recognition would vary depending on when it was delivered to the -- each of those individual phases was delivered to the end client. The delivery schedule depends partly, of course, on us, but also depends on the client. We have to agree the design, the architecture, scope of work, timings for the -- they have to approve the overall design, and then we have to make sure that we have a delivery slot. So that is why that range is so wide. As we go through the year, first of all, we're optimistic that we'll do 1 or probably 2 of those deployments. And Jay mentioned up to 100 megawatts. So as we go through the year, I think we'll have more announcements to make.

And then the second thing is that, that range will tighten once we have the timing set and then it will move from basically a very advanced opportunity into backlog because we have, again, contract signed at the delivery date scheduled. We have an amount next to the date. So as we go forward in the year, hopefully, we'll be tightening that guidance and we'll be moving to the upper end of the range as we deliver the projects.

Thank you, gentlemen. Number two, what is the progress for both a U.S. acquisition and a U.S. new win?

Craig, we are progressing on both, and let me answer it properly without turning this into a soap opera today. We are pursuing the U.S. acquisition. It is very active, and it is very real. But it's not something like you buy a sandwich at Subway, right? We are going through diligence, contracts, customers, compliance, all the boring bits that stopped a public company like ours ending up on the front page for all the wrong reasons. Now on timing, there's a very practical reason why it has taken longer than anyone would like. The U.S. government shutdown slowed the procurement and the approvals across the system. Now that has had a knock-on effect on the contract cycles for the company, which we're potentially looking to acquire. But what -- what happens is when the contracting slows, our process also slows. So this is not just an excuse, it's just machinery.

Now on the new U.S. win, we are working on opportunities, which we will announce hopefully in the next few months. as they contracted and disclosable. Now until then, you will get discipline from us, not theater. But at the same time, in parallel, we're also building globally, it's not just about the U.S. We're working with our partners, BroadSat, NVIDIA, HPE and so on. to make sure that we are delivering and advancing at large-scale data center opportunities across the globe. It's all across Asia, we're looking at Southeast, East Asia, India. I'll talk a little more about it over the course of this webinar. And then, of course, we are scaling our delivery capabilities. Today, we're proud to say that we have 4 delivery centers for data centers across the globe. That includes Southeast and East Asia, includes India, Middle East, North Africa and, of course, Europe today.

And then finally, the most important thing is the U.S. acquisition is progressing. The U.S. wins are being pursued as we go through proper disclosure and discipline. But more importantly, we are executing whilst we build the U.S. as well at the same time.

Great. Thanks, Jay. Who is or are the client or clients for the $1.4 billion contract?

I understand why people ask me this question over and over again, but I'm not going to name the end customer on a public call, right? This is a very fast way to turn a commercial contract or relationship into a legal hobby. What I can say is that as per our public disclosure, our contractor counterparty is [indiscernible] in Singapore, and we are delivering the AI data center backbone work under that agreement. I think most of them have seen potentially the announcement by the government, where they have validated the data center approvals within the region, I think it's about $3 billion to $4 billion. We're not to conversations with the government as well, and we are looking at also deploying our AI data centers at scale here. Now the part that should make the investors very happy is not the case. It's real substance. Now this is a data center and a GP deployment program, which means we're building AI reasoning workloads. The market has moved beyond how many GPUs to have effectively and efficiently, you can run your rack scale systems your liquid cooling, your networking and how do you scale the operations.

And that's exactly what we're doing today. On the technology side, we're architecting around the black well generation and the next step up, which is your B-300 Grace [indiscernible] systems. We are using NVIDIA, which is positioning the HGX for AI reasoning with much higher compute and increased memory, and that's exactly where the market is going today. Now if you look at the implementation of our Rack scale systems like the GB 200, which is the and the B30 results of NVL72, which are fully liquid cooling integrated with all of your Blackwell ultra GPUs and your grace CPUs, we are working very closely with our customer, which is fair. And we will talk about this all day long in terms of delivery capability, our architecture choices, why what we are doing and what we have been aligned with the compute market that's headed, but more importantly, where we are using our P300 to GB 200s and GB300s at scale. Craig?

Thanks, Jay. In your recent call with Water Tower, you said all phases of the project have been completed, when can shareholders expect to hear financing in terms of the Freyr deal?

I'm happy for Bruce to chime in to the latter part of my answer. But when I say completed, I think I did not mean we finished building and gone home for tea, right? I think the market needs to understand I mean the heavy lifting phases that make or bake these programs are complete and are done. The technical architecture, the delivery sequencing the commercial structure that lets us execute at scale without playing Russian relate with our corporate balance sheet. Now that is the point of our model where we fund the project and the SPV level, we keep very clearly the corporate cash discipline rather than stuffing debt into the parent company. Now on financing terms, we're at the final stage. We have investor term sheets on hand. We are working through contracting and documentation with a very clear preference for nondilutive project level capital. Non-dilutive key word and the export style structures rather than lighting shareholders on fire just for sport. That's not us.

Second, why this word matters is because the funding is tied to commercial utilization and face delivery just not wishful thinking. At the same time, we're also working on the OEM side so that we can place the orders and lock the lead test I think the market needs to understand the lead times are significant nowadays. So it's not just a generic model build and a data center build. It's a very specific AI native architecture and supply chain does matter. There are so many components which people just think it's not just going to drop from the habits. Now Phase 1 has already been defined. As I've mentioned previously, I think Bruce and I talked about this. We have about a $300 million plus deployment starting in Indonesia. And then we're leading into the AI infrastructure deployment for the next phases, the GPU deployment, multiyear SLA operations and so on. So -- but what we have done is we've built a very strong fortified cash position to execute at scale.

So when should our shareholders expect to hear more from us -- as soon as the financing documents are fully contracted, locked in, all of the ordering and the mobilization milestones are locked in that investors should watch for what we believe are the practical ones notice to proceed, procurement lots awarded, first racks powered to go live in early 2026. And if anyone is still getting impatient, I get it. but this is not a raffle ticket guys. I mean it's infrastructure. I would rather be late by a fortnight or even a month, then go wrong by a week. Bruce?

Yes. I think just to build on that, there are 2 really components to the question. So the first is where are we with the projects? So we have financing term sheets in hand and we're progressing on those in parallel with the commercial realization of the project. Like Jay said, we can only announce the final close of the documents when the project is delivered. And basically, the project can't close until the goods get delivered. So to some extent, we're dependent on the delivery schedules of the underlying goods. And as we've mentioned, there's been some delays there. I would just say that building on what Jay said, we are pursuing project finance. Project finance means it's nonrecourse to grow the parent company. It becomes basically a lockbox where the contract and then the assets that we purchased, which are the GPUs go into. Customer pays there. The cash in the first instance goes to pay the interest and start paying down the principal and then it pays Gorilla management fee. And after some time, there's excess cash, which gets released to Gorilla and the financing is paid down. We try to be -- we are extremely disciplined in our deployment of capital.

So we're looking for an under 3-year payback period on the project finance. So that means that after -- by the end of year 3 at worst case, we own the assets outright, we can realize the cash flow in subsequent years or we can sell them if we want. Second thing is that there is the quantum that comes from debt is usually 85% or more of the final cost CapEx. So we're able to project finance a very large chunk of it in between customer payments and Gorilla equity, Gorilla would probably invest $20 million, maximum $30 million in an individual deployment, at least $300 million or $350 million deployment. So in order for us to do these first 2 deliveries, we have the cash and the financing relationships, meaning lending relationships to do that. The other thing is you're asking about the end customers. I mean, as Jay mentioned, we can't disclose that. But I can tell you something about them is the kind of people or the kind of clients that want a purpose-built data center that's 10, 20 megawatts for training and AI models or for running inference on a massive scale are either governments or their household name corporates where they have such a scale that they know exactly what they need.

They can define it, and they can pay for 10, 20, 30 megawatts and are happy to do a 5-year contract on it. So that means they are good credit risks. That's why the project finance makes sense. If we're doing mom-and-pops or if we are doing to kind of build a huge architecture and hope that people come as clients, it would not be financeable. But it's financial because it's purpose-built. It's precisely for the customers' needs. It's a long-term contract with a very high-quality off-taker

Thanks, gentlemen. Given the HF IAA time line, can we expect insider ownership filings on 18 March?

Yes, that's a mouthful Creek HF IAA. Yes, we will fully comply with the related requirements. And we will also come back to all of the SEC reporting obligations, where filings are required they will be made in line with all of the applicable rules and time lines, and we will ensure that the information is complete and fully supported. I mean, the point is very simple, right? We do not play games with compliance. We want to make sure that we will disclose what is required. We will disclose when it's required. And more importantly, we will do it in a way that stands up to the test of the auditors, regulators and more importantly, common sense.

Thanks, Jay. What is the impact of rising NVIDIA products and memory prices on gross margins and order intake?

That's actually a really good question. I mean, the prices have moved. I mean, no question. It's -- anybody who doesn't understand that is probably living under the rock. For the context, I mean, our trend force forecast server DRAM contract prices up by about 60% to 70% in Q1 of 2026. And there's also been a reporting, by the way, of the HBM3 prices up roughly 20% to 40% for early 2026 deliveries. Now the good bit is that this does not change our trajectory because we do not run a [indiscernible], okay? Where we buy hardware, pray and just hope for the margins to supply. That's not the kind of business we're in. We structure the program with project level economics which means we have the procurement gates, we've got all the pass-through where the appropriate and multiyear service agreements are signed, utilization revenues laid on the top. But more importantly, that's why our guidance of $137 million to $200 million is built on the contracted base which we're able to execute, not just wishful think. Now a simple way to think if the memory prices are up by, let's say, 20%, just example, then the all-in cost moves up by high single digits. If it goes up by 30% to 40%, then you're looking at double digits plus across the blended full rack, okay?

Now we can absorb single-digit movements but without -- with the proper contracting. But what happens at this point of time is when you're looking at double digits, then the customers have to pay us more, so if you will see us actually define that over the next few months. On the order intake as the prices are getting higher, there's a signal of urgency. Real buyers do not haggle. Real -- I mean you heard Bruce talk about governments and even corporates, large corporates. They pull the decisions forward. They make sure that the secure allocation because they were willing to pay the premium price of what is it today because the cost of not having the compute is higher than the cost of having the compute. So if anything at all, if I'm being very -- if I can make a remark, it separate stores from operators, and we're just getting started. So the demand has only increased but the price is also pushing is being pushed up.

Thanks, Jay. How big was the investment in a street cost AI? And how does it fit into the overall growth strategy?

So we have not published the exact check signs. I'm not surely going to invent a number on a live call. But what we have published is the important part. Now we are a significant minority with an option to materially increase our equity ownership with a ROFR. Now that tells you that this is not a casual fund. It is strategic. It's a strategic foothold. It's a clear path to scale for us. Now why this fits into our strategy, [indiscernible] is real-time infrastructure intelligence. It does monitoring, prediction optimization of critical systems, which means it plugstrate a way into what we are building. Our video intelligence models tax, our Smart City architecture, our GPU as a service data center model. This kind of aligns really well. And it helps us immediately upgrade our capability and not just build a science experiment here. Now why India, India is currently becoming a headlong. It's -- India is in the middle of a very serious infrastructure expansion. I think you've seen in the last couple of weeks even. The numbers are not subtle. The AI data center market in India is estimated to grow from roughly about $1.9 billion to about $4 billion in the next couple of years.

The data center market, it will be roughly around $30 billion by 2030. On capacity, I think the market currently is at about 1.7, 1.8 gigawatts you're looking at about 8 to 9 gigawatts by 2030. Why do we notice? We're in very active conversations with some of the key players in the Indian market today. So Astrikos allowed us to go into the market. It allowed us to bring delivery at scale. It allowed us to bring an integrated platform to the country of India. And it's not just India, by the way. Astrikos has given us a springboard into the UAE, the U.S.A. By the way, Astrikos has an office already present there, and we're expanding our capability in the United States are using Astrikos and, of course, India. With a deep Indian presence and combined with all of the strengths of delivery potentially even in the Middle East and Asia, we come together as a deployment ready state-level smart city platform and more importantly, we're taking the references of Astrikos into the global level.

So for example, the new Indian Parliament complex has been deployed as deployed Astrikos solution. The major international and national infrastructure programs in the Middle East as well as India have been deployed by Astrikos. So we -- it's a marriage made it heaven.

Thanks, Jay. What is management doing about the current share price?

Everything Well, Bruce, I'm happy for you to chime in. We do take our share price seriously. And I think the market understands that already. I mean if they do not, I don't know what else I can do. Why aren't you have to run a business to please the daily taker guys. Okay? We're certainly not here to satisfy any short sellers. What we are trying to do is a very controlled execution disclosure, capital allocation, and we're doing all 3 at the same time. This is not an easy job. But on capital allocation, we just did not talk about buybacks. We act it. I'll let Bruce talk about the details. We increased the authorization to $20 million, I think we've repurchased over $11-plus million, leaving us about $9 million still in the city. We have a very strong position of cash and the most important thing is that we have done these buybacks with that compromising on any of the committed projects and our growth story, okay? More importantly, we've also tried to buy. This is very important for the market to understand we have tried to buy large orders, but we could not fill them just because the stock was simply not available insights.

And this is not a management problem. This is a liquidity reality. So on disclosure and credibility, we publish, we verify and most simply, we do not try to hide class all. But we will be releasing our full financials late Feb to early March as we have promised. But more importantly, here's the blunt truth, right? We cannot start people from talking rubbish. What we can do is continue to deliver, keep improving through our liquidity, through our fundamentals and keep compounding value until the market has no choice but to play catch up. If I can be as prudish I can, we're not here to wrestle pigs in the market. We're here to build the firm and let the results do the show. Bruce?

Yes. So Jay covered the basics of the buyback. So we announced earlier that we had increased the authorization to $20 million. We've been active in the market, so especially end of last year, beginning of this year when the share price was in the 11 category, we really stepped up. So that's one thing. We run the numbers 100 times, and we are very confident that we can fund our growth plan as is and also to continue to buy back shares. The other thing I would add is, so focus is execution, right, execution, execution and execution. The reason why we're so focused on execution is because we have an enormous opportunity in front of us. As Jay mentioned, when the pipeline runs into the multiple billions, we want to make sure to stick to lending, so to say, right? On the last quarterly conference call, we mentioned that we had a sort of internal target. This is not public guidance, this is not official guidance, but you can easily do the math on the fair contract alone and see that we could exit the year with a $400 million or $500 million annualized run rate.

And then if you're talking about deploying hundreds of megawatts over the next 2 years, that would take the revenue into multiples of that figure that I just cited. So it's a great market opportunity and our focus is laser focused on lining up to customers, the operations and the financing to get all those contracts in order. That's the first thing. Second thing is, of course, capital allocation, where there's excess capital where we believe we have excess capital to allocate to buybacks we do that. The third thing is we've just been out there telling the story. So I've been -- and Jay have been attending conferences, more often at a cadence doing webinars and other public interactions and then we were just on a road show last week in New York City, meeting with dozens of institutional investors telling the story. And I have to say the reception was very warm even though New York City is very cold otherwise. There is a very large base of massive institutional investors who are getting up to speed on the story. And the last thing I'll say is, if you look, this is 1 of the slides that we love to focus on, right?

So this is the [indiscernible] so far of the management team, Jay and Raj, when they came in, in 2022. You've seen revenue go from $22 million to $100 million to $110 million is the range for 2025. We're guiding to $137 million to $200 million. A management team went from $22 million to, call it, $170 million in a few years would be on the front page of business magazines. So I think more and more, we're just going to stand on the track record. I'm going to tell people about what we've done and if they don't like it, too bad they miss out.

Thanks gentleman. Multiple times, the PR team has made mistakes in PRs. Any plans for restructuring this team?

I'm sorry, that's a stupid question. No, we will not. We take accuracy very seriously. And when we get something wrong, we may fix it fast, we tighten the process. That said, I am not going to let [indiscernible] run our business from a message board, okay? Our team is doing a strong job. We have improved governance around disclosures. Here is what we have done, tighter internal review, legal sign-off where required, single accountable owner for final release language. Now I've seen this time and again, the market, especially the armchair critics I call them without naming them. They keep telling us you have to do this, you have to do that. You have to try and run a business before you start commenting. It is very important, okay? Because we are restricted by a number of things. I can't just come out and say I've got these contracts which are ready to sign up because I have to get approvals. I have to get released languages. I've got a whole bunch of lawyers I need to respond to. I've got the SEC breathing. If I do something wrong, they'll bring down my next. So if something slips we will correct it transparently and move on.

So we're improving the process. No, we are not going to have any public flogging just to satisfy people who have no idea what disclosure control is from a door handle. Craig, that's my response.

Gentleman what's the status of the smart education project?

It is progressing, Craig. Just slower than any of us would have liked to hear. We have been selected as the preferred party selected and the program remains active. Anybody can do a simple search check the website, you'll be able to see on the government website. What has changed is the timing. The time government as most people know, have 3 prime ministers in 3 years. Now we're going to elections in March. So we have to have significant alignment, get the budgets in place, wait for the final award let does internal sequencing to compete. That's the government process. And anybody thinks that government was easy. I'm happy for you to come and help me out here on the ground. That's the phase we are in right now. The important point is that nothing has been canceled. We remain in lead. We have the letters which prove that we have been obviously the preferred party but more importantly, we keep the solution ready. We're engaged with all the stakeholders. We move as soon as the government moves into the final steps.

Now at the same time, Thailand is not a 1 project story for us. We're advancing in multiple initiatives in parallel and larger initiatives with the larger discussions. We're in very active discussions with the larger part of the government to actually deploy AI infrastructure at scale. So what we are doing is that we are working with the government to even -- I can tell this publicly, we are actually working with the government to potentially even deploy between 200 to 300 megawatts of data center capacity over the next 18 months. And so what we do is we will continue to execute, we will continue to build, and we are not just waiting here for 1 document to arise.

Thank you, Jay. How many data center projects are we anticipating, where and when?

That's actually good question. So listen, I don't think so we want to all play data center bingo on a live call, but I'll give you this, which is -- which will give you the shape of what your internal process is today. For the already announced $1.4 billion project, it is paced multi-site rollout rather than on [indiscernible]. You should think of this as several facilities between Indonesia, Thailand and Malaysia delivered in stages as the procurement and commissioning go live and the capacity ramps up. Beyond that, I just mentioned, we have -- we are now targeting deals well over $10 billion. We're in advanced stages on multiple fronts in Asia Pacific and to name a few, Singapore, Malaysia, Thailand, Indonesia, Japan, Australia. We are targeting very closely in India, large, large conversations going on right now. Definitely the Middle East, Saudi, Abu Dhabi, Dubai. And as you know, we continue to build out our data center for the Ministry of Defense in Egypt as we speak. In a number of these, we are working with local partners where they bring site power and all of the other AI infrastructure layers, including GPU, operational capability and so on. And as and when we are able to quantify I want to make sure that these contracts are signed and the disclosure is permitted, and we want to stay credible. I hope that answers your question, Craig.

Yes, you have.

I would also add 1 thing to that is I think everyone can sort of tell that the top of the funnel is quite wide, right? There are numerous conversations going. So 1 of the things for us is to select the best opportunities for us, right? It's not just signing a contract for the sake of stain contract. You heard the financial discipline that we apply -- so basically, I know other GPU as a service operators have looser financial terms, right, longer payback periods, et cetera. We have a very strict filter. If it doesn't meet those filter, thank you for the conversation. We move on to the next opportunity. So one of the reasons why we mentioned all these opportunities is because they're kind of making their way through the qualification system on our side, but the ones that survive will be only the ones that are most attractive for Gorilla. One of the things I can also share is that all these jurisdictions that we mentioned have much lower power costs, they have much lower rental costs and other infrastructure costs and certainly, labor costs the United States and Europe. So the economics that you used to seeing for GPU as a Service, while attractive in a developed market are actually more attractive in Southeast Asia. So that's why the numbers stack up for a 3-year payback period on financing, et cetera.

Just to add to that, Bruce, I think you're absolutely right. One thing I really want to add to that is timing, the right expectation of face delivery between now and 2027, 2026 of course, we are already deploying. For people who do not know, we deployed the first P300 servers last month for the government of Taiwan, and this is the first B-300 implementation in Taiwan ever, for liquid cooling B-300. So we are continuing to progress. We're not fiddling with our terms. But what I can say is that our ambition is hundreds of megawatts between now and the end of '27. I talked about this. This is subject to contracting, approvals and delivery schedules. And this is not just APAC. This is also Middle East. We're opening up a new office in Saudi. We're opening up potentially our relationships in Dubai and Abu Dhabi, and we're looking at potentially building an office there as well with local talent. At the same time, I want to make sure that just to take a leaf out of Bruce's page, we have more than 1 kettle on the staff, right? Some of them are already boiling. We will announce the exact temperature when we are allowed to. I hope that sums it up.

Thank you. Next to last question. Can you elaborate on previous comments and the opportunities you are working on with NVIDIA?

Yes, of course. We work very closely with NVIDIA and all our OEM partners across all of our AI infrastructure bills, data -- current data center work in Indonesia, for example, and the wider ecosystem. Now I don't want to comment on any commercial specifics. Obviously, it's confidential. But the direction is very clear. Our credibility inside the NVIDIA ecosystem is increasing. We can execute. They know we can. We're not just stock. But what that means in practice is that we're well positioned as an operator and integrator across the full stack. GPU infrastructure, data center delivery, ongoing operations. This is important because these conversations have broadened our reach beyond any single site, beyond any single country. But that said, you're looking at different regions. East Asia, Southeast Asia, Asia Pac, Middle East, North Africa, Europe and so on and so forth. The same momentum continues to help us deliver at scale.

Now the short version is, we have strong relationships, very active deployment, expanding scope and only put the frames as and when we kind of -- the numbers are in play, and we're contractually allowed to do so.

And final question for this segment, gentlemen. Are you continuing R&D for video analytics and any plans to release an SDK?

Yes. But the SDK already exists. I mean, I'm not sure why people don't know that. But yes, the video analytics is live for us. it's not theoretical. We've been in this space for 25 years. This is our 25th year. We've built platforms such as the ICC TV. We've got the post event, the world's best post event. Let me put it this way and [indiscernible] already deployed for public safety and Smart City cases. We have built real time, real capable cybersecurity capabilities, including all of the seam and [indiscernible], all of the secure tunneling, lawful interception analytics, IoT and data analytics stack. And all of these are helping power our large-scale sensor and data ingestion platforms. Now that's important. Now what is an STK, STK is simply a developer toolkit. We've already done that. We have 1 and more importantly, most of our customers now move away from that to wanting an integrated a client-led platform where we delivered the outcome, not just subparts.

Example, we invest in SD-WAN most people know, we call it intelligent Director. Now because of that, it is a connected delayer that helps us run the distributed video, your cyber, your IoT, your SoC and your [indiscernible] visibility. It's a big market for us because we're looking at about roughly -- I think last year, it was about $8 billion in 2025, going up to roughly around $30 billion by 2030 to 2033. On the post quantum, I think, again, our approach to cryptotility and architectural readiness, we are designing our networking and our security platform to adapt as standards mature. We expect to be post quantum ready by the end of Q1 2026. Now this is important because the market is scaling very fast. We're looking at roughly about $6 billion by 2030. In plain English, yes, video is the eyes for us. SD-WAN is our nervous system, but the post quantum is the next immune upgrade. And like I said, we will be post quantum ready by Q1 of 2026. Craig?

Thank you very much for that, Jay. Let me now introduce John Roy of Water Tower Research, John will be moderating the analyst Q&A segment, analysts to ask your question, please click the raise hand button.

Thanks, Craig. John Roy. I worked for Water Tower Research covering technology companies. I think I look back just earlier today, I think I wrote my first report on Gorilla 2 years ago. So a lot has happened in 2 years, I'd say, for sure. So let's get right to the questions. If you will press on the raise hand button. We'll get to your questions analysts and we'll make that happen as soon as we can. Yes, it's been a crazy time. So while we collect these questions. So we'll first go to Brian from AGP.

Believe he raised his hand, but we're not getting there and along to the one.

Yes. John, can you find Brian's name in the list, go to the right-hand side there, and you should be able to over huge list of attendees Yes. number. Right. And then you should see, Brian, with his hand raised. Do you not -- you do? And then you hover over the right-hand side of his line there. Why don't we move down to David Williams, give him permission to speak and then ask him, when you get permission to speak, David, you should see it on your screen a notification then you would unmute your line and be able to speak.

Can you hear me okay?

Yes, we can. Fantastic. Well, thanks for doing this today and certainly appreciate the time and letting me ask a question here. But Jay, first question is what kind of get hard you have back there or I'm just wondering what you have behind you there.

This is an effect one. This is -- 1 of my favorites have been signed by some of the top man in the world, Rockstar in the world for personal friends of mine. So that's why I keep them a treasure them.

Very nice -- very nice. Well -- so I guess 1 of the real questions here is as we kind of think about some of the constraints across the data center, the ecosystem outside of just the logic of the DPUs, but also on the optical side, how do you think about sourcing and your supply assurance as you go to deployment -- do you have the same relationship with maybe that networking side of the supply chain as you do on the -- like the -- for the GPUs?

It's a great question, David. Yes, we do. So we are not just talking to 1 OEM provider. We are talking to multiple OEM providers across the globe and across -- and people who can actually provide us the allocation. That's on the NMDA side, whether it's your B-300 class, you raise Blackwell rack scale systems, NBL. Now we're talking about the next generation of [indiscernible], let's see when that's being released. So we will look at those working very closely with the likes of Dell, HPE, Qantas, Super Micro and so on and so forth. On the networking side, we have both relationships in our Taiwan it's been coming back -- coming from Taiwan. That helps us quite a bit. We have some deep relationships where, and this is very important, where you're looking at network switches and routers and so on and so forth, run of the mill.

Some customers are really concerned about the prices, so we can build and deploy and white label our own Google isolation. So where you go to certain data centers, you will actually see Gorilla networking switches and routers. But the others who come in and say, listen, we want Cisco, we work very closely with Cisco, you now a Cisco partner and we will deploy them at scale with them. So we're not looking at through a single lens, we're looking at multiple lenses at the same time.

Fantastic. And then maybe just as you think about the -- your place in the market and how you win, can you talk a little bit about your go-to-market and how you're able to win some of these data center type contracts, just how do you get into the market? And then maybe what is it that allows you to win versus maybe some competitors and you see competitors in the market?

David, again, great question. Listen, first of all, it's a great chance we do beat the drum role, okay? Our execution track record speaks for itself. In Egypt when we just started delivering we were 1 year ahead of schedule. Our lawful interception program, when we signed with the customer, it was a 3-year project. We delivered it under 2.5 years. The customer extended those contracts, and now we are going into multi-hundred million dollar projects and we're going to bid for that as well, which means that low for interception, for example, which we built about 2.5 years ago is now expanding from what was a $21 million contract to potentially well, the bid size will be about $200-plus million. That speaks volumes for our capability and our wins. On the public safety side, we have 1 progress we won projects across the globe, which is not a one-trick pony, but more importantly, why are we winning? We're winning because we're moving from ambition to urgency, okay? What has happened is that our engagement with NVIDIA with all of the OEM partners, all of the appliance partners, all of the other government agencies and so on and so forth, they are looking at it from a strategic infrastructure investment. It is not an optional requirement going forward. That means the shift has moved from discussion to committed.

They want to partner with a one throat to choke. The problem we have today is that you've got the data center builders, you've got the GPU suppliers, you've got the OEMs, you've got the racks. It's a painful process when you're trying to integrate that. So what we do very well okay, but from being a construction gig for us, we make sure that we are able to build and become the one throat to choke. And as we build that our customers gain confidence that Gorilla is the one we can work with, and we can rely on them to deliver quarter-on-quarter, and that has changed significantly as we evolve and mature in the market.

Add to that, David, is the other thing, we have this Tricard, and in the past, we work mostly with governments who were comfortable paying on a one-off basis as CapEx for them. And then we had worked with enterprises in the past as well, but what really unlocked the floodgates was we tried to be flexible with our clients. So they said, "Well, look, I don't know if I can pay for a data center or some of the other projects as a one-off, I want to do it over time. And we said, yes, that's fine. We will pay for the CapEx and then you pay us in an OpEx model for you. So that is building on the same technological [indiscernible] building a data center where you transfer it over to a government customer is pretty much the same as building a data center for a commercial customer where you then subsequently manage it. But the difference is basically the financing model had to change a little bit. As we've said 100 times in the last few months, we're very comfortable that the financing model works for us. and it also works for our clients.

But those are all of the reasons at the same time, why the data center market has become such a red hot space for us.

Okay. And just 1 last one, if I can, if you don't mind here. But Bruce, how do you think about cash flow as you start kind of moving forward and building and deploying some of these assets?

Yes. So -- the cash flow, really, we think about growth at the parent company. So for each of these, there will be an equity check that goes out to fund the CapEx. It would be sort of million-$20 million to $30 million each on the initial 2 deployments. We can comfortably cover that with the cash that we have on hand. We have about $105 million on hand today. And then those projects won't return cash to Gorilla for a year or so because that will go into a lockbox to pay down the project financing. But after that, they will start to generate some cash flow and then year 4 and afterwards, it will become a very interesting cash flow stream for Gorilla. So that's how we're looking at it for the data center projects where we're funding the CapEx. For the rest of the projects, we see the cash flow profile improving. So some of the government customers that we won last year and delivered on a very quick turnaround time in terms of paying us. So we were sort of out cash for 2 or 3 months with them. So we've collected about $13 million, $14 million this year just from 2 government contracts in cash collected. So I would say that if you look at the consolidated financial statements by the end of this year, you'll probably see a big number for CapEx, but that's mostly debt comes into an SPV that funds CapEx and the actual equity check that's coming out from Gorilla will be smaller and controlled. And then in 3 to 4 years, that will repay multiples.

As a quick follow-on to that. Are you finding that as you go through more and more Ds, you're starting to get recipes that you can follow in terms of not being totally bespoke every time. Or is it public from scratch new design every time?

No, actually. You're absolutely right, John. every -- we are learning very actively. I mean, listen, there are certain models which certain corporates want to build. And there are certain influences which they want to deploy. Once as with the market matures, our deployment and our thought process will also mature. And over a period of time, it becomes much more easier and quicker. So the go-to-market is much more effective and faster. But more importantly, we're also scaling at the same time, right? We're scaling -- as I had mentioned, when we started out, we had 1 data center team, which was in Egypt. Today, we have a data center team in Time. We have a large data center team in Thailand. We have a significant size data center team in India and in Egypt. We're building a data center team in Indonesia. And we're going to -- once we open up our office in Saudi over the next 45 to 60 days, will also start local hiring as well.

So we will have data center teams and deployments, and these are not just architecture. They're also managing all of the SLAs and the uptimes and so on and so forth.

Great. We'll go to [indiscernible] from Cantor.

Given the sizable pipeline that you have, what specifically do you see as constraints for like quicker conversion of the pipeline? Is it like GPU availability? Is it like customer readiness or capacity or capital, any of these -- any of these or all of these real bottlenecks today? And also like just a follow-up to the same question. Apart from the Freyr contract, are there any other larger contracts that you're currently focused on taking up a lot of your time, for example, some of the larger ones that you won in Southeast Asia and the smart school contract or the one in Taiwan.

Okay. So we'll break it down to 2. And Bruce, happy for you to chime in, please. See, what is constraining us today is, I think the lack of thereof in terms of memory capacity and delivery capability. If you look at the market today, the memory prices, I talked about it, they went up almost 60%, 70%. They're expected to go up more than 100% by the end of Q1 this year. So that's going to be one kind of bottleneck. The second bottleneck is also the speed of delivery. Obviously, some of the OEMs, they take longer. Some of the OEMs take much more lesser time. There's a cost differential always. So we have to make sure that we are delivering as we are supposed to in terms of the schedules which we build for the customer. Listen, at the end of the day, the customers game, okay? We have to make sure that we're delivering based on their requirements because they have a business to run. So for us, the reality is that our data center programs are fixed, the time lines are fixed, we have to juggle with the end -- with the OEMs and all of the related parties to make sure that we're able to deliver.

The other issue we are seeing, which is a bottleneck, is that globally, there is a lack of scalable data centers. So if you look at data centers today, in Thailand, for example, you've got about 4 gigawatts of data centers. they have allocated about 10 gigawatts of power. But if you look at Indonesia, 1.5 gigawatts, they want their ambition to grow to 5, but the probe-based lack of availability of land, lack of availability of the fiber, water, which is very, very important. And of course, your substations and your grid availability. So there's a lot of constraints when we look at data centers, but we are working meaningfully with every single government department, so we can move forward on behalf of the end customer, we shield them from all these issues and troubles. Bruce?

Yes. I mean, I would agree with everything you said. I think that financing for these stages is not a bottleneck. We -- our philosophy here is to dig our well before we're thirsty. So we've had conversations with lenders starting from the middle of last year. So we're confident that it's there. And we are building a syndicate of banks and private lenders that will be there for the next stage of projects. And then we're also -- we are getting a credit rating so that we'll be able to issue either debt in the -- sort of at the project level or debt at the group level to fund these projects. And then if someone wants to sign up for a gigawatt with us, then maybe financing will become a constraint, but that's a problem we'd be happy to have.

Sorry, we've actually had that problem. We've actually had customers come and say, "Hey, we want to build a gigawatt and well like stock. It's not going to happen overnight. Let's start with 20, 25, right? It's sometimes the ambition is a bit too much, and we've got to turn down the customers' ambitions as well. It's a fine line.

Yes. No, absolutely -- just a quick follow-up, if I may. For the first phase of the Freyr deployment that you detailed earlier in the presentation, when approximately does the financing needs to be all set up and ready for you to execute on your -- like the goals for this year?

Bruce, again, happy for you to chime in. You and I are in active discussions, but just FYI, the prayer contract is just a doorway and everything what we're doing in terms of selling and so on and so forth. But more importantly, we are building sorry, first, let me start. We're designing, building, operating it, and we're going to monetize it for the next 5 years. So it's a long-term relationship. And again, once you've gone into the process of building the data center for on behalf of the incumbent, they're not just going to walk away because remember, these are purpose-built customized data centers. They're not run of the mill where you can just host your data and so on and so forth. So we're not just hosting the racks. We're layering a lot of solutions as well at the same tact. Whether it's the video side of it, whether it's the data intelligence side of it, the cybersecurity, the network intelligence, your SD-WAN, and I talked about being post-quantum ready as well. Bruce?

Yes. So I mean, the financing is one where there's 2 phases. So once you have the contract with the customer and then the early -- that includes the scope of work. You go to your banking and say, this is my contract, are you funding it? What are the terms? You have a back and forth, you agree on the terms. And then the moment when it gets funded is when you have to pay, right? So that's usually we've made a -- you make a small deposit in order to buy your place in the queue. And then it's only when the goods are delivered and then you do the setup that you actually pay so you don't need to fund it until then. So that's a roundabout way of saying the project gets funded officially when we have to pay, which is the delivery moment for the GPUs and for the other equipment. And that's why, as Jay was mentioning earlier in the call, we haven't announced who's financing it in the exact terms because it hasn't been delivered yet. But we have term sheets, we have an agreement on the terms and we're progressing through the process.

I just also had one, are you finding any available facilities that exist already that you can go into? Or is everything pretty much from scratch?

No, no. We're not -- so most of our contracts today up until, let's say, the 70 to 100 megawatts are all colo facilities, we're just leasing them out. But now we are now in active conversations with very, very large players across the planet, who actually got either the financial muscle or the land muscle as we call it, the infrastructure muscle. And they have actually invited us to partner with them and create joint ventures with them so that we can actually build this. And we're looking at modular data centers. We're not looking at a 2.5 year built. We're looking at a 60-day build guaranteed with a 30-day testing. So we're about 90 days we'll be ready. So we are working. In fact, I just came out of a conversation yesterday with one of the largest players in the planet, and we were sitting together and figuring out how we build it, and they are looking at roughly 300 megawatts to be deployed by the end of this year and about 2.5 gigawatts across Southeast -- just across Southeast Asia by the end of 2027. And and they want us to partner with them at scale. So it's going to be high -- it has to be hybrid, unfortunately. Sorry.

Yes. Makes sense. So we'll go to the next analyst, David Williams from benchmark.

Thanks. I've asked most of my questions earlier, but I certainly appreciate the comeback.

Okay. All right. We go on to Mike Latimore of Northland.

All right. Can you hear me?

Yes.

Great. How are you guys?

No, bad Yes.

Jay, congrats on the Nobel Prize nomination. So just a couple of basics here maybe for Bruce. You have your backlog number. Can you give a little bit more detail on that, I don't know, types of customers or use cases or regional breakup?

So the revenue guidance that we see this year. So first of all, it's going to be -- if you take the middle of the range, $170 million, it's going to be about half enterprise and have government. The majority will be from Southeast Asia. The next biggest region would be the Middle East and North Africa. And then third place would be Latin America and the Americas. And then in terms of the overall margins, so the -- the way I would say it is in the past, the Gorilla model was 40 -- 35% to 40% gross margins. So the sort of security convergence, et cetera, our business would be at those levels. The gross margin for the data center business is much higher. It's sort of like 70%, 70%-plus. But there is a depreciation charge, which will appear on our financial statements. So think about the operating margin there of 20% to 25%. So I think if you take the midpoint of the guidance, 170 million, you would see a blended operating margin of about 20% plus. And there's a significant amount of operating leverage because as we -- as the revenue number goes higher, that just basically drops down because the SG&A won't have to expand significantly in order to -- I mean, the SG&A would probably go up 20%, and then the gross profit might go up 50%. -- if you had, say, a run from $170 million to $200 million, right? So there's operating leverage in the business model.

And then I guess, Jay, you talked about that the -- some of these data centers internationally are just more efficient costs less than in the U.S., Europe. How much of your pipeline, how much of your customer discussions are among customers that are sort of making a choice now, yes, we're looking at U.S., we're looking at Europe, but if you guys can deliver at this cost, we want to go with you -- like it seems like this is going to be sort of a tight wave towards your opportunity here?

Yes. I can actually talk about real numbers, in data centers today are becoming an anchor for us, okay? We design. So we're not just building the data centers or leasing them. We design, we build, we run, we host the power, we do all the capacity contracts and so on and so forth. On top of that, we stack the GPU as a service using all of our NVIDIA platforms. And that gives us what we call as recurring revenues. So you would see a seismic change in how we -- Mike, you've known us for a long time, we were a lumpy project-based revenue business. Today, we're able to go quarter-on-quarter and Bruce, I'm happy for you to kind of fill in the blanks later. But what is important for us today is that we're seeing demand accelerate. The maturity of these customers is quite significant. They know exactly what they want. They know exactly what design needs to run their workloads and they come to us with a very specific requirement. Each of these specific requirements have a certain lifespan and more importantly, they have a certain cost, okay? They have a budget. These guys are very smart nowadays. All these guys are coming to us are very smart.

So what do we do? We work and depending on which of these regions are able to serve them. So for example, if you look at Thailand, the cost of electricity, if you buy today, it's about $0.08 to $0.10. If you went on a wholesale model, you're able to bring it down to about $0.05 to $0.06. The cost of land is cheaper. The cost of the build is cheaper cost of resource is cheaper and cost of managing that is much cheaper. You go to Indonesia, you can bring it down from, let's say, $0.08 to $0.12 to about $0.06 to $0.08. And then the cost of running is actually the same, at the same level as Thailand. You're looking at other markets right now, like I talked about the Middle East, but the Middle East does not have very many trained resources compared to Malaysia, Thailand, Indonesia or even India. So what we're able to do is we're able to -- and that's why when I tell people, we actually have 4 centers where we can actually use people from. We're using the labor to move across these regions so that they can train them run them and turn them into long-term economics, Mike.

So where is the demand coming from? The demand is coming globally, whether it's Middle East, American customers or Asian customers. But at the same time, we're seeing a tidal wave here. That -- I think it's probably the right term to use, a title wave and a seismic shift towards the Middle East and Asia.

Okay. Great. And then I guess, Bruce, on the guidance range for the year.

The upper end of the range, should we assume that means that you sort of fulfilled this first phase and start to fill in the first quarter? Or like how important is the kind of -- like how should we think about what drives the upper or lower end of that range, I guess? The upper end as a rule of thumb would be if we deploy in the first half of the year, the first phase of the fair contract -- and the second phase is deployed, say, by the end of September. Then that would be the upper end of the range. The lower end of the range assumes that we deploy only the first phase, and it's towards the end of the year like September.

Okay. sorry, just to Mike, apologies. What we are doing is we're moving Q2 and Q3. In Q2, we are going from design to mobilization. And also we are preparing the deployment schedule as we speak. And then as we get all the GPOs, I mean, they're coming in phases. I would have loved to do a big bang approach and get all the 625 servers overnight. The problem is there's a delivery delay, so there's going to be about 190 to 200 servers initially coming in now and then the rest will come in sometime in April. And so what we are doing is that Q4 will then move forward to Q3 for infrastructure readiness, all of the scheduling and multisite coordination as well at the same time. So within the next few weeks, we would have finalized the design, site sequencing and all of the commercialization and then the deployment will start over the next 4 to 5 weeks.

And that may have just answered this next question, my last question. But -- so on the first phase, do you have like a specific site address like lockdown? And do you have the power there?

Yes. It's in Indonesia, just outside of Jakarta, it's all done locked in, signed ready. We're just waiting for the GPUs to land, and we're done.

The other thing, Mike, I would point out about the guidance is the upper end of the range doesn't assume any other wins in the data center business.

Well, gentlemen, I had 1 final question for me, which was on Amazon. If you could give us an update, that would be great. That would be an exciting project and love to hear about.

Absolutely. So the 1 Amazon project has been moving forward. As you know, we've already done our first proof-of-concept in Panama. We are looking to for concept. We are deploying some of the, what I call, containerized data centers in Brazil. We are working very closely with the government to make sure that we're able to get the sensors in place. As you know, we're doing our own R&D to build environmentally friendly sensors so that we can stream all of the environmental and health intelligence and so on. We've signed up with the satellite companies so we can start tracking at least from the Sky level, we're in deploying the LIDAR technology as we speak. And of course, Rodrigo and his team, they are currently fund raising actively so that we can start deploying at scale at the latter part of this year.

Great. I'll pass it back to RedChip.

Thank you very much, John. All right. This is information on how to get more information on Gorilla. You can call us at 1-800-RedChip or e-mail us at [email protected]. Please visit the information page created by Red chip for Gorilla. It's GRRinfo.com. There, you can view and download the investor presentation and fact sheet and register for news alerts on Gorilla. Watch small stocks big money, red chips program for insuring exciting small cap companies, every Saturday night at 7:00 p.m. Eastern on Bloomberg USA. Register for all Red Chip webinars at redchip.comvents. Thanks again to all our many hundreds of participants today, and thank you, Jay, Bruce and John.

Thank you, Craig. Can I just address the shareholders' relief?

Absolutely.

First of all, all our shareholders and our analysts, I really appreciate your time. Thank you. Thank you for your patience whilst we are rebuilding and thank you for backing us with. Whilst we do all the unglamorous work -- we do not take your trust for granted. Again, this is coming from my heart. Our commitment is very simple: keep executing, keep earning credibility, keep the riffraff of the fence and make sure that we create value for the business, we will be impossible to ignore. Thank you, everybody.

I'm your host, John Roy. I cover technology here at Water Tower Research. And today, I'm joined by Jay Chandan, the CEO of Gorilla. Jay, good to see you again.

Likewise, John, hope all it's been well with you.

Absolutely. I should mention that the company's safe harbor statements can be found on their website. Also, this fireside chat may not be reproduced or written transcript distributed without the expressed written consent of Water Tower Research. So with that, Jay, why don't we get started? And for those that don't know Gorilla, why don't you give us a quick overview of what the company does?

Absolutely. So John, first of all, thanks for having me once again. It's been a very exciting period for us. We've been deploying mission-critical AI security platforms as people understand it. It's video intelligence, post-event analytics, secure network intelligence, lawful interception, IPDR capabilities as and when the customers require. Now we're pretty much built up to scale and resilience as we build for national infrastructure. But what is very unique about it is what the AI infrastructure we've been building have moved from being purely what I call software and a solutions company, but into a sovereign grade AI compute with increased data center capabilities across the regions, whether it's Middle East, North Africa, Europe, Southeast Asia, Latin America, East Asia and so on and so forth.

Now the headline example, for example, is the 3-year contract we signed with Freyr for about $1.4 billion. And the first $300 million is currently being launched in Thailand as we speak. I'm actually sitting here right in Thailand right now. And the structure will lead to us building our AI infrastructure layer and the GPU deployments as we go forward. Now when we go through the motions of that, if you look at the other side of it, we have pushed hard on the foundations. We are strengthening our inferences across multiple accelerator types, and we're extending all our capabilities with enterprise customers such as Toyota as well. It's not just sovereign AI data centers. We've also advanced our one Amazon stack with our real sensors running on AWS with full operational capability layers with Knox and SSOs.

We've also continued to work on lawful interceptions. You've seen that we won actually 2 other deals in Southeast Asia, and these were big IPDR programs with the customers. And there, we were able to deploy our existing 5G AI solutions. At the same time, we started productizing our solution -- our intelligent network director solutions as well, along with our firewall capabilities. I can proudly tell you today, John, that we're now building our solutions for post-quantum readiness, which means designed today to withstand all of the security threats of tomorrow and more importantly, make sure that we're already not being too late. Now on the scale side, finally, we've created our Indonesia data center program. We're in the final stages of closing the SOWs and the SLAs, and we are moving from paperwork into mobilization.

Our Phase 1, as I mentioned, is $300 million of deployment. And in parallel, we're also now executing additional paperwork for the $450 million phase running alongside it as well. So we're working very tight time lines with our OEM partners, making sure we're working with NVIDIA to lock all the delivery time lines and so on and so forth and bringing best-of-breed of all of the GPU tranches in the Blackwell generation systems, including our GB200-class architecture. So what are we doing? What does Gorilla do? We're investing behind execution. That means we're building out our R&D teams in Thailand. We're scaling up our engineering teams in India.

We've expanded our footprints across Taiwan, Thailand, India, and we are increasing our hiring cycles in -- to match both the delivery pipeline as well as making sure that we're able to create a productization schedule so that we're making our deployments repeatable. That's important. We have our -- I'm also very proud to say that we will have our 2 new offices, one in Singapore and one in Indonesia over the next 2 weeks. We'll be hiring about 20 new people in our Jakarta office over the next 40 days, and we'll also be building our India data center team as we speak. So long and short of it is we're not trying to be noisy. We're just trying to be inevitable. That's Gorilla.

That sounds like great progress. Speaking of progress, I mean, obviously, Amazon ONE is a big deal. And I believe someone won a Nobel award for Sustainability -- or I should say, was a finalist for the Nobel award there. Maybe you could give us a little insight and color on how that all came about and how crazy was it?

It has been crazy since then. It's really difficult to overstate, John, what it means, what the recognition means because you don't -- nobody dreams of waking up one day or being born and saying, listen, I want to be part of the Nobel Sustainability Club. Now people often underestimate the weight behind it. This is not one of these awards where you just wake up one morning, you get it, you have a nice dinner and everybody goes home, frame certificate, logo, blah, blah, blah. No. This was a formal nomination for 2025 Sustainability Awards in the category of leadership in implementation for Jayesh Chandan. Now what that wording really matters because it's not just about the good intentions or the clever decks we prepared, it's also about actually building on a national scale where sustainability is engineered into the infrastructure itself.

Now the Nobel Sustainability Trust, everybody knows about it is an institution that has changed and shaped the global thinking on responsibility, right? I mean when you say Nobel, everybody talks about responsibility. But it's also about how the progress is made for the future of this planet. And when I met with the Nobel's, I spent a lot of time over the last few months with them. They are absolutely on top of it. They breathe sustainability. So for me, there's no shortcut to getting on top of that pyramid. It's not the way you can just bluff in and weigh market your way in. For me, it was very meaningful and most importantly, it was also very surreal. Why? Because I built my career with building complex systems across the world, whether it was Nigeria, whether it was Thailand, whether it was Latin America, whether it was India, very complex markets, and I was never chasing applause.

But to suddenly find that our work has been acknowledged by an institution associated with the Noble legacy. For me, it was about a pause and think, okay, what does that mean? Maybe all those late nights I did, all those stubborn decisions weren't completely irrational. Now for Gorilla, it was a validation. What does it mean for Gorilla? It tells the market, we're just not talking nonsense. We're not talking about sustainable AI. We're deploying it at national scale, right? Whether it's the ONE Amazon, whether it's the Taoyuan Airport, whether it's the Thai projects, whether it's the India investments we're currently making and looking going after AI across the Indian subcontinent, I often say sustainability only counts when it survives the contact with reality. So for me, the challenge is not about being nominated, it's about being recognized. And frankly, I wouldn't have it another way, but it makes me even more now think larger than I've ever done before.

Well, congratulations again. You certainly deserve it.

Thank you, sir.

Now you have continued to make investments in other ways. I believe you made an acquisition recently or closed on a deal, Astrikos.

Astrikos. Yes, we invested in the company. Yes. So we did not invest -- I've been watching all the blogs and so on and so forth. And I've seen people talk about, hey, it's just another fancy logo. No, it's not. We invested in India because it's the fastest moving theater right now for AI adoption and national scale digital infrastructure deployment. Now what does Astrikos do? Astrikos is building AI-driven platforms, and built a whole product suite aimed at turning infrastructure into operational outcomes across different verticals. What most people don't realize is that they actually have a whole bunch of product suites, which is now deployed in various cities and states in India. They have a contract with NEOM, and they're also very actively engaged in the United States.

Now so what does that do? Their product -- they've got a whole bunch of products, Omnific, Cognus, this company has product called Kolaz, KIM and so on. These are all about measuring impacts across different data collection platforms so that they can take -- make decisions at scale. Now what is the biggest challenge for us when we went into India is that there were 3 different market categories we wanted to address: AI compute, data centers and more importantly, sovereign security. Now if you look at AI as a strategically compelling story in India today. The demand according to, I think, Grand View Research, in 2024, they were at about $15 billion. But by 2033, they're growing to more than $330 billion. That's a 40% CAGR, okay? I would be a fool to ignore that market and that incremental growth. But on the other side, if you look at data centers, they're growing from, what, $9 billion, $10 billion, again, according to Grand View to about $30 billion by 2032, 2033.

Again, that's something we cannot ignore. And there's also proof in the pudding. If you look at the hyperscalers, for example, they've actually proven the thesis. Microsoft recently announced, I think as recent as about 3 days ago, announced a $17.5 billion investment into AI in India. Amazon has already planned more than $35 billion of investment. And Google just recently committed, I think, about $15 billion or $16 billion. So what does that mean for Gorilla? What does Astrikos mean? We're actually building a serious delivery engine across India and Southeast Asia, so that we can scale up demand.

Now Astrikos provides us a complementary product portfolio where we can actually go out to the market, not just in India or the neighboring regions, globally where our data center programs can actually provide compute foundation for the AI adoption rates, which the globe is going through right now. So we're investing in India purely because India is where we believe AI will become infrastructure and infrastructure will become national capability. So that's Astrikos that's why.

Excellent, excellent. Yes, there's been a lot of news flow about India, certainly for sure. So you've mentioned, obviously, a variety of projects. Maybe if you were to take a step back for a second and just kind of highlight the top 3 or 4 that you see that are going on right now that are -- I'd really like to hear about differentiated stuff, right, stuff that you really think makes Google shine.

Yes. That's a really good one. You put me on the spot there. I'm trying to figure out the 4 -- okay, let me give you 4. The short answer for me would be we have execution and we have references, okay? Now as you know, we signed a very large project with the government of Egypt. At that point in time, people are like, "Oh, Egypt, come on, what's happening there? " Now I can tell you, the project is running at full speed. We've built our Air Gap network program. The mission-critical sovereign infrastructure is running. Parts of the data center environment have already been built. They're ready, tested and the program is now progressing across all of the FAT, which is file acceptance testing, rollout planning and all of the delivery milestones are being met.

And what is more important is that the customer is paying us on time, proof in the pudding, right? The second one is our 5G lawful interception. Now in Taiwan and Southeast Asia, we had a lot of these wins recently. And again, I don't think so people understand we were the first 5G LI solution to be deployed globally, okay? This is a time when people didn't have a product at all. Now we built these products, and these are not isolated projects. They are national scale platforms where we're delivering in highly regulated environments, where performance, security, compliance are completely nonnegotiable. Now when you look at these deployments, we're all live and operating at scale, okay? Why this matters is because if you look at all these 5G programs across the globe, they're either a white paper or they are proof of concepts. These are not proof of concepts.

Governments and telecom operators, they want to talk to each other. But when you deliver at that level, word travels really fast. And if you look at the other 2 projects, which we recently signed, they were word of mouth. They reached out to us and said, we're seeing this direct influence on the government of Taiwan, can you help us out, right? And so -- and the third one is on the AI infrastructure. Now we had a lot of publicity on the AI infrastructure side.

So the first program we are kicking off is about $300 million, as I mentioned, and that's the first phase. And that's on the way. The mobilization is already kicking off. In parallel now, I can tell you, we did this today, we have now started directly the second phase of $450 million, and that will move alongside. But of course, we have to go to the SOWs, the SLAs and so on. And we finished finalizing the next steps on all of the different phases with Freyr today. We sat in our offices, we closed all of them. So what is -- if you look at what is consistent, the pattern is very consistent because we're now delivering at national scale. We're no longer becoming a POC company. We're becoming a global reference. And that's exactly what is happening today in terms of where our projects are.

Great. That's some very good highlights. So now for the number’s guys, what do you think you're going to be able to do in 2026 in terms of -- I mean, I know you guys have a lot of cash ready to go to use. You got a lot of cash committed. You're going to need investments, you're going to need to make investments. Give us kind of a flavor of what you see 2026 is going to be like, not guidance, just kind of what is it going to be to you?

Absolutely. For me, okay. So 2026 is about scale for me with discipline and personally, a little less caffeine for our finance team. Don't tell that to Bruce. He's not here today. He loves this coffee, by the way. See, revenue -- for us, revenue with real visibility is no longer a wishful thinking, okay? We are -- I know we give a broad guidance of $137 million to $200 million, but that was because we were being very prudent and very factual with what we have. We have $85 million of signed contracts and a backlog already, which we have to deliver towards. Now that range is driven by timing, not by demand.

We're seeing a broader customer diversification across the globe for us, not just in Asia. So we're trying to reduce the concentration risk. So if you look at how we evolve as a company and you look at our concentration risk, 2026 will be the year of what I call reduced concentration across different customers, across different industries, across different geographies. Now the Freyr timing for us is also a swing factor. Why? Because the only real variable in the guidance for us is the timing of the first Freyr deployment, which is happening in the first half of '26. Our numbers deliberately assume minimal contribution from the Freyr in the other phases of the projects and the later phases of the projects as well. So think about it this way, optimism for me is fun, but I think discipline, it actually pays the bills, right?

So Freyr deployment now changes for us the scale of the company itself. So once the Freyr programs are fully deployed, we will have what is called as a very strong annualized revenue, predictable month-on-month, quarter upon quarter, which means Gorilla stops being a growth story and starts becoming a steady infrastructure platform. That's a very key message, which I wanted to kind of deliver. But as that happens, margins improve, right? The AI infrastructure ramps up. Now data centers, for example, being a very different margin profile. When on balance sheet, we're expecting about 75% gross margin, 60% to 65% EBITDA. But with a 20% to 25% operating margin, what happens is these assets sit in SPVs with a nonrecourse debt. And this is something which the market is also not able to understand and visualize because we're not putting this -- whether it's debt or equity, we're not putting this at least on the debt on the balance sheet. We're getting the upside without turning the balance sheet into a stress test.

Now we have over $110 million of cash today. We have reduced our debt well below $15 million, which is kind of making us quite -- and we haven't sold our asset yet, and our asset is now valued at about $25 million, $26 million. We have a further $22 million -- actually $30 million of collections expected over the next few weeks. That gives us the flexibility to execute without having to tap into the equity market every time we build something large and expensive. Now capital intensive, yes, reckless, no. Okay?

Most people are expecting they're like, hey, you've signed this $1.4 billion contract, when is revenue coming, right? There is upfront cash burn because GPUs don't grow on trees, right? And paybacks are within 2, 2.5 years, and we're seeing financing offers at 85% to even 100% loan to cost, okay? We've actually got term sheets. So equity is already in place for the first 2 deployments and leverage only increases when the revenue is contracted. So I think that's the key message we want to leave to the market, less equity, more leverage, nonrecourse debt, off-balance sheet SPVs. That's kind of where we are, and that's the outlook for '26 for us.

Great. Well, Jay, we're kind of running at the end of our time here. We're going to have to leave it. I want to thank you so much for joining me.

Thank you, John.

For investors, if you want to learn more about Gorilla, please visit their website or access the research on the company that we have at WTR at www.watertowerresearch.com. I want to remind everyone that the views expressed in this fireside chat may not necessarily reflect the views of Water Tower Research LLC and are provided on the informational purposes only. This fireside chat may not be distributed or reproduced without the written consent of Water Tower Research and should not be considered research nor recommendation. WTR is an investor engagement firm, not a licensed broker, broker-dealer market maker, investment banker, underwriter or investment adviser. Additional disclaimers can be found at watertowerresearch.com.

Good morning, and welcome to the Gorilla Technology Group's Third Quarter 2025 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the call over to our speakers today, Jay Chandan, Chairman and Chief Executive Officer; and Bruce Bower, Chief Financial Officer. Thank you. Please go ahead, gentlemen.

Thank you very much. Good morning, everyone. Q3 marks the strongest quarter in Gorilla's history with revenue ahead of expectations, operating profit firmly positive and the bottom line at breakeven.

Now we've delivered a clear swing in profitability. We've built a cash position about over $119 million. We've reduced debt to a point of $15.1 million, and we've advanced our AI infrastructure programs across Southeast Asia, Latin America and the Middle East, securing multibillion-dollar projects, but at the same time, we're also creating a historic pipeline for this business. The simple message is that Gorilla is now operating above the analyst model and scaling faster than the market expected.

Thank you. Bruce, anything you want to say?

Yes. I'd just like to take a walk through some of the highlights from the quarter and then in terms of where we are overall.

So the first, as Jay mentioned, it was a record quarter for us in terms of revenue. The balance sheet, as Jay mentioned, $121.4 million of cash total. That breaks down to $109 million of unrestricted free cash and then the balance in restricted cash. Debt of $15.1 million means that we're in a significant net cash position of $106 million. This follows on the performance of the business and also in terms of the -- it was helped by a fundraise that we did in July.

In terms of where we are as a business how and we're performing, you can see that we're on track to meet the guidance for 2025, which is in the range of $100 million to $110 million in terms of revenue. And then we were talking about EBITDA margins in the 20% plus range and net income margins in the 15% to 20% range. So we remain on track to hit all of those. The gross margins through the 9 months have been a bit over 35%. That's a little bit lower than we'd expect for the full year. So I think that we'll be on track to hit the 35% to 40% range for the full year.

At the end of the quarter, we had accounts receivable of $36 million, and I know people are looking at that and worried. I'd just like to say that we expect the business to be collecting or some of those we've already collected on in the fourth quarter, a couple of significant outstandings in Asia and then some remaining in the Middle East, we expect to collect on.

For the 9 months of the year, we had operating cash flow of minus $15 million, and we still expect to either have breakeven or positive operating cash flow for the total year. Another thing speaking about going into the next year is we issued guidance for the next year of $137 million to $200 million. I just wanted to talk a little bit more about how that works, and Jay can help me out as well. But basically, this is how we forecast guidance is based on contractual backlog, which is the revenue that we expect to realize from signed contracts and then also where we have delivery time lines and specified contractual milestones.

In this case, we have a signed contract. And in the case of 2026, we have a large signed contract with FREYR, and we have individual deployment as part of that contract. The timing is more or less certain, but still subject to some change, which is why we opted for a wide range to reflect our conservatism in making our guidance.

Nonetheless, the fair contract is still a large contract at $1.4 billion overall. So that means over $400 million annualized. And that will be when up and running, $400 million annualized. But the rollout will be through 2026. So the contribution will hit starting in 2026, but it's still -- it won't be the full amount.

Nonetheless, we also have a strong pipeline, as we alluded to, which Jay can talk about in a second, which makes us optimistic about hitting the full year guidance for 2026. A couple of other things to point out about 2026 is we have been talking to the market for a long time now about where we're going to grow, diversifying the business and derisking it.

What we've seen is that the contract wins and then the pipeline is mostly in Southeast Asia, which would lead to us hitting our target of over 50% coming from Southeast Asia next year. It's also a good mix between government and enterprise. So we'll be diversifying and reducing the government share of our revenue. And then the corporates are investment grade and then the government clients that we're talking to or that we've converted are investment grade as well. So we see an improving credit quality from our end customer.

All of this points, I think, to an improving business mix. a diversified revenue base on all measures and then improving client quality. The last thing I'd like to do is Jay is a bit too modest to do this, so I'll do it for him, is the track record is now piling up to the point where I think we have many proof points. When this business went public in 2022 via de-SPAC, the revenue for that year was $22 million. The guidance for this year is $100 million to $110 million. So that's obviously a significant increase in a short period of time.

Looking at the guidance for next year, that marks 2 things. One is it's a large absolute increase. The second is that the percentage growth rate actually for next year would be an acceleration over the percentage growth rate for 2025. So it's, I think, quite a testament to the management team to see an improvement in the revenue growth rate and also after a 5x increase in revenue since going public.

And then that's not the only highlight. several other highlights. So first of all, we have, as I mentioned, over $100 million of net cash. This is after being in net debt when we went public. We had a very painful or even toxic financing mix earlier in 2022, 2023, all of which has been cleaned up. So the cap table is almost all common equity.

And then when we talk about winning new contracts now or executing on contracts that we signed, looking at the balance sheet now, we have the ability to fund significant new deployments from our own resources and then from project level finance that we have on the table from several banks. So we anticipate overall a good year to finish up in 2025. We're quite excited about the outlook for 2026.

And then with that, I'd like to turn it over to Jay for anything else that he'd like to add about the outlook, the pipeline, et cetera.

Thank you, Bruce. Yes, it was a very good quarter, rather, wasn't it? But if anyone is still wondering whether this is structural, I would gently suggest that they may need a new pair of spectacles.

Now just to highlight on what Bruce talked about and clarifying some of the proof points to all the naysayers out there, our revenue, the consensus analyst model was roughly about $26 million to $26.2 million. Our actuals were at $26.5 million. Gross profit estimate was $9.5 million. We did about $9.9 million. Our operating income, IFRS operating income was to be at minus $6 million. We did a positive of $4.4 million. That's a big swing.

And our adjusted EBITDA was about $5.6 million estimated, we did $6.8 million. Adjusted net income was about $3.5 million. We completed quarter 3 at $6 million. Our EPS non-IFRS was $0.26, and we came in at the Gorilla actual was about $0.257, which is in line. Our EPS IFRS was expected to be at negative 0.8. We completed it at breakeven, which is 0.00, which is a 100% improvement. Our analyst implied debt was at about $21 million. Gorilla's actual was at about $15.1 million, and we're looking to reduce that substantially before the end of this year.

What we also had modeled for was the unrestricted cash, the restricted cash and the total cash position, and we are predominantly on top of everything today. Why? Because we delivered profitability at an operating level, not adjusted, not sprinkled with ferry dust, not if you squint, you can't see it, so on and so forth. This is proper profitability. We ran the business efficiently. We delivered on big projects across the region. We are delivering big projects across the region. We controlled our costs, but most importantly, we generated a real operating profit.

This is not a one-off. This is what we call discipline. Second, we did this at the same time, we were scaling at pace. Now most companies only turn profitable when they stop investing. We turned profitable while executing national infrastructure programs across Southeast Asia, Middle East, LatAm and so on. Anyone who has ever worked in this sector will tell you that is not just coincidence. It is pure operational muscle.

Third, we have visibility. And when I say visibility, I mean proper visibility. The $1.4 billion Southeast Asia data center project is not a rumor. It's not a letter of intent. It is not a win. It is a contract and is underway already flowing into our scheduling and revenue plans for 2026 and onwards, of course. The first phase alone provides for $100 million of annual revenue for the first 3 years. This is the definition of structural.

Now people also asked me about the pipeline of $7 billion. I'm going to show you this is not something we found under a sofa cushion, okay? It has come from governments, telcos, serious institutions that are designing their national AI and digital sovereignty strategy. Our role in those programs is not episodic. It is recurring, expandable and is increasingly indispensable.

Now our balance sheet is also a strategic weapon for us. Over $110 million of unrestricted cash, $15 million plus of debt and working with major partners like Telstra with us on data centers, we are not just hoping to deliver, we are capitalizing to deliver. And finally, with the deepening partnerships with the likes of Intel, Edgecore, HPE and NVIDIA and expanding our sovereign 5G local interception cybersecurity platform, we're not a one-hit wonder. These are partnerships that stick because we execute.

So just to go back into the question-and-answer session now, we're not at a peak today. If anything, this is the foothill before the climb. Our numbers are consistent. The profitability is real. The backlog is defined and the demand curve ahead of us, particularly on AI data centers and national infrastructure programs is significantly larger than what is formally in the guidance today.

With that, I'd love to turn this over for question and answers.

[Operator Instructions] Our first question today comes from Mike Latimore from Northland Capital Markets.

Congrats on the great results here. In terms of the guidance for '26, what are you assuming on this large deal contribution kind of low end to high end of guidance? Or what are the factors that get you to the lower high end of that guidance?

Mike, good to hear from you. Let me answer it with numbers first, Mike.

For 2026, we've guided a revenue range of roughly around $137 million to $200 million. This is built on only 2 things. One is our contracted backlog with very clear delivery milestones. Number two, the first phase of the Southeast Asia data center project, which alone contributes $100 million from '26 to '28.

Now there is 0 revenue in that guidance from databases of the $1.4 billion program and 0 from any other new mandates that are being structured. Now the reality is that the remaining phases of the AI data center program are much larger than the Phase 1. As the time lines and the site consequences are finalized with the customers, we will then extend both our '26 and '27 revenue base quite materially as well.

Now on top of that, as you know, we've also built a pipeline. Inside of these are several national projects in late stage that also touch data centers, public safety, network intelligence, our 5G offer inception programs and so on. None of that is in the current guidance of 2026. So the question you've asked me is the range we have given you is based on the backlog driven by a base case assumption. It is also dependent significantly on some of the very important issues we're facing today.

One is material shortages of semiconductors, deliveries from likes of NVIDIA, Dell, HPE, Super Micro and so on and so forth. But that said, the upside from additional AI data center phases and new sovereign mandates will sit about all of these, and they will crystallize and therefore, they will become our future guidance as well. So I personally believe that we published a very sensible conservative number, and that's why we have deliberately left the rest out of them for now.

All right. Perfect. Any color on EBITDA margins, what you think they might do in '26?

Sure. Bruce, do you want to take that?

Sure. So we would guide for a sort of 15% to 25% range.

Okay. Good. And I guess just last one for me. The -- what -- can you provide a little more detail on the deliverables on this large contract in '26? Like what is the thing you're going to be delivering in the first quarter and throughout '26?

That's a good question. So the right way, Mike, to see the first $100 million is the run rate it builds. Personally, for me, I think most people expect that you've signed a $1.4 billion contract, it's a light switch and the revenue starts flowing in. No, it doesn't work that way. I'm sure you know data centers very well. We've been communicating on this for quite some time.

The first one is basically about 6 to 8 megawatts. That's several hundred high-density AI rack. And we do not like them all in one day, as you can imagine. They come online in plan based as the power, cooling, all of the network zones are commissioned. So revenue ramps up in each batch as they are energized.

Second, when you look at the GPU capacity, that becomes a very important factor as it follows in through these waves. As the racks go live, for example, we drop in the cluster through our NVIDIA and partner ecosystem, which drives up the GPU as a service usage line.

Now on top of that, we stack our services over a period of time. So not all at once. You can't just do a big bang approach. It's video intelligence, say, for example, for cities, transports and borders, big data analytics, building your large language models for both the government and telco, bringing your inference engines and so on, your cybersecurity, your network appliances and intelligence platforms and things like even the environmental intelligence and smart policing. So as the national workloads move into the platform and the utilization grows, typically from 30%, 40% all the way up to, let's say, 70%, 80%, that deepens our revenue at the same time at the same levels as the physical capacity.

So for -- just to take a leap from what Bruce said earlier, if you want us to be doing about $300 million to $400 million steady-state revenue, the GPUs all need to be in motion and be sinking harmoniously at the same time. So the part to that is a controlled ramp, as I said, is not a big bang. So we're anticipating, again, working very closely with NVIDIA on this. We're anticipating that we will get all of this commissioned and to go live by the end of 2026.

Our next question comes from David Williams from Benchmark.

Congratulations on the progress and success here, gentlemen. I guess maybe one of the first questions is kind of around the guidance. Obviously, you talked about this a bit earlier, but it feels like there is some potential upside there.

And I guess if you kind of think about the risks in the market and maybe from the supply side and just the market dynamics, what do you think -- I mean, how would you gauge that from the midpoint of the guidance up to the upper end? And I would suspect that there's more upside opportunity than downside risk. Is that fair to assume?

David, it is absolutely fair to assume there is more upside. Why? Because see, let me give you the risks to the guidance. I think there are 2 parts to your question. First is the timing of the customer deployment. Large AI infrastructure and data center programs rely on client site readiness. There has to be site access, as you know, the market very well, power allocation, import clearances, customer procurement cycles, they can all shift from one quarter to the other. And even a slight change in a week or 2 changes that significantly.

Number two, your supply chain constraints are also -- there is a big challenge today. If you look at the demand, there's a high demand for GPU servers, not just in the United States, but across the globe, right? And then if you're looking at things like networking equipment, they can also create longer lead times. I don't know if you've seen recently, the price of memory has shot up 40% in the last 2 months.

Then you've got the things like regulatory and compliance approvals, you've got things like project phasing on multiyear platforms. You'll have to take -- we take into account even geopolitical sensitivities in certain regions like Southeast Asia, Middle East, Latin America and so on and so forth. But then if you look at the upside for us, I did talk about it previously. For us, it's about when these programs come live.

Now our aim is to get all of these live by 2026 and make sure that we drop all of these clusters to our NVIDIA partnership and our partner ecosystem and make sure that we drive the GPU as a service usage line. Now once we've driven that -- and remember, these are all purpose-built data centers. That means there's one customer occupying 100% occupancy, okay? That means our revenue would hit scale as soon as the switch is switched on. So what we are trying to do is we are working very closely. I mean, I did mention to you the risks. But taking all those risks into mind, we're also looking at the upside. And we want to make sure that our upside actually helps negate the risks on the lower end. I hope that answers your question.

Can I add something to...

So a couple of other things, David, to keep in mind. The first is the data center opportunity -- the data center contract we have is an umbrella contract with Freyr. When we announced it, the $1.4 billion was based on the scheduled deployments that we had then. there is always the possibility that there are more deployments added to that. So that would be another source of potential upside.

The second thing is, of course, while we're talking about the contractual backlog, and we talked about the data center side, we haven't talked about anything else. So Gorilla is still actively bidding for government contracts. And so we put in several bids recently, and we're staying tuned for good news from a couple of governments in Asia.

The other thing is that we've talked many times about one Amazon and some of the MOUs that we've signed with government customers in the past. None of those are in the guidance now because they haven't yet turned into a date and an amount. But as soon as we know and have crystal clear vision on the date and the amount, then those would also be added to the guidance for next year. So it's not just about delivering everything from the data center contract, although that's the biggest mover. There are many ways for Gorilla to win next year.

And then maybe, Bruce, is there a way to size kind of the magnitude of your backlog? You've talked about a few things. You don't have the amounts or maybe even dates to. But if we were kind of thinking about your total backlog and kind of what you're anticipating for next year, how do you -- how should we size that?

So the backlog for us is -- we go with a strict definition. So $85 million is the backlog for 2026, where we have the exact date and time and it's signed and it's being implemented now. Then we have, as we mentioned, the data center contract where it's signed, it is being implemented, but the exact timing of the deployment is still -- we have a good idea, but it's not definite yet.

As Jay mentioned, there are some [ DUCs ] that we have to get in a row or there are other people that we have to work with before we can define that. The pipeline is where we have a qualified lead, where we think that they'll make a decision in the next 3 to 6 months, where they have budgets, but that doesn't have a signed contract or with an amount and a date next to it.

So there's 2 parts. One is the backlog is very strict. And then the pipeline for us is really about converting from customer either where it's signed, but it's not amount and dated or where they sign up and then they sign a contract and we know the amounts and the dates and can then move that into the backlog.

If I add some color to that, David, as well, the pipeline has grown rather enthusiastically, if I may. If it grows any faster, I think I might need to send a congratulatory card for myself. But that said, the deals are also very mature.

If you look at what we did a couple of years ago and where we were last year, we were building POCs, we're signing MOUs and so on and so forth, whether it was part Asian in the U.K. or the Middle East, LatAm and so on and so forth. The data center project has accelerated beyond our expectations. And I don't want people to think that we're only building the data centers.

There's a lot of ancillary support services we provide on top of that as well. So the $1.4 billion, for example, was only a catalyst. Once governments and telcos saw that we could deliver sovereign grade AI infrastructure, that basically kind of triggered a surge of interest.

Now without giving names, the demand wave behind the FRR is significantly larger than Freyr itself. That is one of the primary reasons why our pipeline is well north of $7 billion. Now if you look at the GPU infrastructure, it has moved away from ambition for us to urgency. Through our engagements with likes of NVIDIA and Edgecore and including our own appliances within the kind of the government, we're seeing that strategic infrastructure as an essential, not optional.

So now what has happened? We've also started working with the likes of Telstra in Brazil who's providing capital and looking to build some seriously large data centers as well. So these are all kind of whole country platforms as opposed to just incremental pilots.

And then finally, what we are doing is that we're making sure that we can formally count a large portion, let's say, even if it's 20% to 30% of the $7 billion to be signed very quickly in 2026. And that allows us to actually be much more confident of our multiyear expansion. So in short, David, the opportunity is pretty comfortably substantial for us, but it's also growing at the same time. And it's not definitely a single year anomaly.

Okay. And one more, if I may here. Just if you kind of think about your competitors in the market and the 800-pound Gorilla, so to speak, you're competing against there. Why are they choosing Gorilla? What gives you the edge? And why are you winning?

That's a good question. Why we're winning? I think we've proven ourselves, okay, to where we are today. We believe that we work with governments to make sure that we understand what their requirements are, what their commission requirements are, what their ecosystem requirements are, and then we help them build national workloads.

Now Gorilla has been in this space for a very long time. As you can imagine, we've been here for 24 years. We're going to be celebrating 25 next year, right? We are a full stack AI operator. And I think I kind of talked about this in my first speech at the NASDAQ, and I said we want to be an AI stack operator. We design the architecture, we build the data centers. We integrate the GPU stacks. We operate the platform, and we stay as a long-term partner for the governments and telco.

Now apart from that, they also -- we offer these customers of ours, both enterprise as well as the government level, sovereign control and predictable economics. And that is very, very, very important because our customers know exactly who runs their infrastructure, who carries the responsibility for their uptime and performance. And then finally, it's about capability.

Now as you know, we've been delivering national cybersecurity infrastructure. We built 4 data centers in Egypt for our $270 million contract. We're executing multimillion-dollar projects, national projects across Southeast Asia, Middle East, LatAm and so on. What has happened is we are moving faster than our competitors.

Our speed of execution, our ability to structure these projects and our operational discipline is making us the preferred partner where you understand this probably better than most people do, AI infrastructure cannot fail. It does -- it cannot fail. It just cannot fail. And it has to be with people who can have a very strong operational discipline. I think that's the responsibility we take. So we will build, operate and manage responsibly. So think about it this way. Everybody is trying to sell buildings and servers. We're trying to sell outcomes. That's it. That's as simple as that.

And one thing to add on to that, as the numbers guy, is when I was investigating why we win, so to prepare some investor materials, all of that came out.

The other thing is that given our history and our relationships with hardware vendors in Taiwan and then using our own software to create appliances out of the hardware, we actually deliver a significant cost savings over a competitor. I mean, obviously, the biggest cost item will be NVIDIA GPUs and there's not much flexibility. But on items where there's flexibility, we can deliver like a 30%, 40% cost savings with better performance, and that will reduce the overall cost of the data center by 5% to 7%. And 5% to 7% may not sound like much, but when you're talking $1 billion data center, that's a significant cash savings.

So not only is it sort of everything that the customer is looking for in terms of sovereign data infrastructure, faster time to market, but it's also cheaper. So in the end, there's enough that stacks up, it becomes very difficult to look at a competitor by comparison.

Our next question comes from John Roy from Water Tower Research.

Obviously, a lot of discussion around '26. I want to step back for half a second and look beyond that. And kind of these questions are related.

One is, do you need to grow your sales team to turn that pipeline into backlog? And can you give us some color on the pipeline beyond '26? And the last thing is, what are you going to plan to do with all that cash? Is it for growth? What's it for? Just kind of curious.

That's really, really good. No, no, that's a good question. You caught me off God there. No, but listen, I can tell you that my pipeline is $7 billion, and I can sign all of these deals, and it's all going to be hunky dory. It is not. It is going to take its own challenge. It's got its own challenges.

Am I going to expand my sales team? Our sales teams are already well established. We have more than what, 250-plus people today. Full time, we have more than 200-plus contractors. So we're stretching our bottles right now.

The sales guy -- there's one sales guy who gets everything done, which is myself. I make sure that I'm there in front of every single customer, every single project. It doesn't matter whether it's a $1 million project or a $1 billion project, I make sure that I'm there so that I can give them the confidence in the guidance.

Where are we aiming for -- I think you kind of touched upon this as to what your -- what the future looks like. For me, personally, right, if the programs and partnerships in front of us land the way I expect it to be in the next, let's say, 3 to 6 months, I would like us to be -- and this is my personal target, please do not assume that this is going to be the company's target, around $500 million of annual revenue by '27. That's not a formal guidance, by the way. This is my target for what the platform is capable of delivering.

Now that's what I am focused on. I want to get there, but we need to make sure that we've built all the LEGO blocks in place. to make sure that we're no longer a project shop, make sure that our pipeline is real and growing, make sure that we can have more cash and that it meets our ambition. And more importantly, it talks about what kind of acquisitions we're also able to do so that we are able to support. We need teams, we need people.

Just to give you the scale, we've gone on a massive hiring free in Taiwan. Thailand is almost what, 60-plus people. We are looking at India. We've got about 150-plus new recruits going on in India. And we're looking at acquisitions as well for the first time in India as well as in the U.S. So that's -- keep your eyes peeled, and I'm sure we'll be able to provide you more updates in due course.

No, that sounds good. And the cash, maybe, Bruce, can you give us some highlights on where that cash might be headed?

Yes. So for all of the major contracts, there is a capital needs from Gorilla side. Sometimes with government customers, that can be for performance guarantees and for working capital.

For some of these data center projects, we have to fund the CapEx upfront and then deliver it to the customer. In this case, we are in active negotiations with banks. I mean, Jay and myself are in New York this week, meeting with banks. So we have term sheets on the table from lenders, which will finance the vast majority of it. But just like getting a mortgage for a house, there's an equity component and the equity component would come from the balance sheet.

We anticipate that we have more than enough cash on balance sheet now to fund the first deployment or 2 and hopefully even more than that. Like I mentioned, the business should generate substantial cash in the fourth quarter. And so that will see us into much higher revenue numbers in the coming 3 to 6 months.

Our next question comes from Brian Kinstlinger from Alliance Global Partners.

Congrats on all the business development achievements over the last few months. As it relates to as it relates to the Freyr contract, I'm curious or I assume the margins are substantially higher than the operating margin of your existing business.

The offset is the CapEx side. So the cash returns maybe aren't what the EBITDA margins are, but the EBITDA margins are super high. I just want to see if my assumption is right.

You're right, Brian. First of all, good to hear from you. First of all, Freyr is not a construction gig. For me, it's a long-term AI infrastructure relationship across Indonesia, Malaysia, Thailand, Vietnam, Philippines and so on.

Now what we are doing is we're designing, building, operating and monetizing it over the years. Now once that data center is live, we're not just there to host the racks. We're also layering a lot of services on top of it. So video intelligence, like I said, big data analytics for government, cybersecurity platform, smart policing and so on and so forth.

So for me, Freyr is the doorway. The real value is what we sell on top of it and everything inside that footprint. So what we -- when you look at it from that perspective, yes, you're absolutely right. It carries a higher margin, your EBITDA is much higher. But in terms of cash generation, it might actually because of the CapEx -- extensive investment of the CapEx, it's going to be slightly full cycle.

But what we will do is we will then deploy our own operations team. And more importantly, we will also apply our own stack of our solutions on top of them, helping them go from building large language models to inference engines and moving up the value chain going from let's say, H100 to 200 to GB 200, GB 300 and what comes after. And so look at it this way. For me, building data centers is only one part of it. Think of us as creating, curating, hosting and protecting your data. That's what we do.

Great. And then as we enter 2026, regarding your first large contract, which was the Egypt Smart City contract, how do you see the economics change in '26 versus '25 in terms of revenue? Are we increasing, declining, kind of steady state? And then how did the mix change from '26 compared to '25?

That's a really good question. So if you recollect about a couple of years ago, Brian, when we first spoke, I said my first job was to derisk the business. And it was to derisk our delivery profile in 3 ways.

I mentioned this to you, and I'm going to stick to my guns here. First, we secured the contracted program. Once we did the technical validation with the government of Egypt, we then score our revenues and so on and so forth. And as you know, 95% of our revenues came from government customers. So what we did was we wanted to move away from projects to long-term milestone-based predictable collections so that our cash exposure is limited.

It took us about 1.5 years to build that. And today, we're seeing that we're able to strengthen our balance sheet, but more importantly, we're able to reduce debt. Now what has happened, and this has allowed us to give us the breathing space to reengineer our business and to build our, what I call, capabilities at the same time.

So look at it from having project-based schedules and programs to a full fledged deployment. These factors kind of helped us reduce our execution risk, revenue timing and financial risk. So going into '26, I can say with confidence that we are able to now have a more predictable, more stable quarter upon quarter as opposed to what we had previously. that answers your question?

Yes, somewhat. I'll take some of it offline. And then I'm curious, you had a number of MOUs, including Amazon One, there's a smart city contract. Any update on your progress? And I don't need to go over each one of them, but maybe where you're seeing more progress headed towards the finish line of any of the MOUs that are very large.

Yes. So the One Amazon project is going full steam ahead. As you know, we've already completed the proof of concept in Panama, and now we're running into Mato Grosso. You saw the signing happen sometime last month. So there's an initial $100 million program where we have received -- we expect to receive a good chunk of that in our tech deployment.

Now of course, there are lots of issues we need to worry about because we have to worry about the sensors, the way they deployed, how every active is being monitored, how it becomes a stream of environment and health intelligence and so on and so forth. And these are monetized for decades. So we've already started work on that. It's growing, and that is not part of our guidance for 2026. We've also signed, as I said, with our MOUs with the likes of nTelastra, for example. This is not a single site. We're talking about 120-plus megawatts to be done over the next 24 months.

So that also tie that to our Freyr project and so on and so forth, we're expecting that to also convert into a portfolio of other AI infrastructure projects, which are repeatable. We're also working very closely with the projects, and I know what is on the tip of the tongue of everybody in Thailand, for example, we are working very closely with the government and to give you some confidence that we are sure that there would be an outcome and light at the end of the tunnel over the next few months.

In terms of the overall One Amazon and the other MOUs, which we've already signed, our team has been working day in and day out, and we're making sure that each of the platform builds the digital backbone and make sure that we are sitting on top of their infrastructure play. So again, all these are not included in the guidance for 2026.

Great. My last question, that was helpful. You highlighted, Jay, accurately that you invest to grow. You made a comment about that, and you've done that. But given the solid awards, the growing pipeline, are there any key investments you need to make now in terms of personnel, staff, facilities to take advantage of the opportunities in front of you? Anything meaningful that you can talk about or can quantify?

Absolutely. I think I touched upon this, Brian. This is very, very, very important because I think most people think that, no, we're a small company, we don't have the means to do what we do. So what we are doing right now, and just give it to you straight, right?

These are all numbers back. So we are focused heavily on our M&A story as well because that brings in deep execution legs for us. But at the same time, we're also looking at how we expand ourselves into some of the fastest-growing economies in the world. So first, India. if you look at the India AI market today, and I mean, I may be slightly off on these numbers, but we're looking at about $9.5 billion today, and that's expected by 2032, I think, or '23, it's going to be about $130 billion.

There's a tenfold expansion of the AI market. The country is also -- I was there recently, the country is also doubling its data center capacity from 950 megawatts to roughly around 1,800, 2,000 megawatts. By 2026, we're talking about a transformational change. So this is a massive national shift when it comes to AI compute cloud and digital sovereignty. So our investment into India is not cosmetic.

Our acquisition potentially is also not very cosmetic. It positions us in a triple-digit billion dollar economy and where we are building our own local team, our own regulatory posture, but more importantly, we are looking at sovereign grade projects at scale today.

So India is one big market for us going forward. The second market, which we talked about and which is also going to give us scale and people to help deploy in the local market is the United States. Now the U.S., as everybody knows, the largest AI market on the planet, represents roughly around 36% to 38% of the global AI spend today. But that said, it is also true that public safety, digital infrastructure, your GPU demand, defense and so on and so forth are all running into tens of billions of dollars apart from the data center market and the AI market.

So for me, the acquisition there we're pursuing is very deliberate. It gives us established platform. It gives us huge customer potential. And more importantly, it gives us execution depth. And that's something you asked me to talk about as well to deliver, can I deliver real AI infrastructure and public safety programs in a country like the United States or India? This is how we're going to do it.

So the U.S. for us becomes what we call a second engine for Gorilla for the next 2 to 3 years, not just a size project. So look at it this way. We're not buying revenue, we're buying capability. So that gives us scale. So India gives us scale in the hypergrowth market. U.S. gives us credibility in the world's most mature AI and law enforcement ecosystem.

Our last question comes from [ Bart Boone ] from Red Chip.

Jay, Bruce, congratulations on a great quarter.

Thank you.

I just have a few questions here. First, we know you design, build and operate AI data centers, provide GPU as a service and you're rolling out your own branded AI GPU platforms with partners like EdgeCore and Intel.

At the same time, you're deepening your relationship with NVIDIA and the wider GPU ecosystem. So how should investors think about the unified flywheel you're building and Gorilla's strategic role inside the next wave of AI compute infrastructure?

That's a very interesting question. Well, I'll keep it short. The short answer to that is that we're not playing in one corner of the AI infrastructure. And I think the market needs to understand that. Why? Because we're building the whole engine.

The data centers are just an anchor, [ Bart ]. We design them, we build them, we run them. We sit on them because they're long-term hosting and power and capacity contracts and so on and so forth. On top of that, we stack the GPU as a service using our NVIDIA-based platforms with our partners.

That gives us usage-based recurring revenue as the workload scale. And this is a very important term, which the market needs to understand. As we scale, we will scale as well. And as our customers scale, our revenues will scale automatically. That term is called usage-based recurring revenue as the workload scale.

Now on top of that, we talked about the flywheel. The flywheel is very simple. Data centers drive GPU demand. your GPU demand pull through our software, the software then locks in longer and deeper national engagement. Think of it as a 3-pronged approach. So how should someone see us, whether it's investors or customers, they should see us as a sovereign grade AI operator, not just as a project contributor or a box shifter. We're surely not a box shifter.

Thank you, Jerry. I think that adds a lot of color there. Now shifting away from the data center conversation. You've spoken about Quantum-safe networks and the Intelligent Network Director platform for lawful interception and network intelligence.

How should we think about these as commercial gateways into larger sovereign infrastructure and national security programs rather than stand-alone products, right? How do they all work together?

The quantum question. I love that. [ Bart ], let me keep this tight. I know we're running short on time. This is one of the most misunderstood parts of our business.

First of all, the market is enormous, right? Post-quantum cryptography alone is expected to cross over $100 billion to $150 billion globally over the next decade as governments upgrade everything from national networks to their financial systems to their defense communications and so on and so forth. Now look at this, every country will need this not want, but they will need it. That's an absolute must.

Our Intelligent Network Director is never just a product. What we do is when a country lets you monitor its entire network flows, your lawful interception, your cyber posture, they're not just trialing a tool. They're effectively handing you the keys of their national nervous system. And this is what the market has misunderstood. We're not trying to sell a product. We're actually managing their national nervous system.

Now that becomes a gateway into data centers, into sovereign cloud, into your public safety modernization, your AI workloads and your full national security stack and so on and so forth. Now as we move forward, right, the quantum-safe network opens the door even wider for us. Why? If you look at the way we protect country's backbone communications, we're automatically in the room. I mean, whether it's Taiwan, whether it's Thailand, whether it's Egypt, whether it's LatAm, it doesn't matter where it is. We are in that room for the next phases of their data centers, their GPU infrastructure, all of the national analytics, all of their secure workloads and all of their critical infrastructure protection.

We signed 2 projects, as you know. And these were 5G lawful interception protecting national critical infrastructure. Now these technologies are the starting point for the programs that run into hundreds of millions of dollars over their lifetime. So what is Gorilla doing? We're sitting in that room. We're negotiating. We may sign tens of millions of dollars today, but my aim is to convert them to hundreds of millions of dollars over their lifetime. So think of it this way, whether it's your Intelligent Network Director or your Quantum-safe, we're not stand-alone. Think of them as a handshake that goes together over larger sovereign scale national infrastructure program. That's how I look at it from our IND perspective.

That's very helpful. I just have one more question to leave you with. So over the past few years, you've gone from survival mode to a position where you have record revenue, strong profitability, a multiyear AI data center mandate and a multibillion-dollar pipeline. What do you think the market is missing about Gorilla's trajectory when you look at the next 2, 3 years?

You put me on the spot there, about it. Okay. So first of all, I want everybody to understand this. We're no longer a project shop. we are becoming the sovereign AI infrastructure operator, right?

Our Phase 1, for example, just in Southeast Asia, we're talking hundreds of billions of revenue per year. Later phases are just larger in scope. And the duration and none of that is in the guidance as yet. Again, I want to repeat that, it's not in the guidance.

Second, our pipeline is growing. We're now sitting on our pipeline about what, $7 billion across telcos, law enforcement, infrastructure and government. These are multiyear national platforms.

Now once we have proven that we can deliver, you're rarely a one contract supplier and the market knows that. Now if you look at the third part of it, balance sheet. And I think there's been quite a few questions on that. We have more than, like I said, $119-plus million of unrestricted cash -- sorry, $107 million of unrestricted cash and total of about $120 million of total cash left on the books.

Now that means we can go fund serious data center builds without even blinking. A year ago, and you said it very rightfully, so we were managing survival. Today, we're designing national architectures. We're also making very clear, we're trying to make sure that we do not dilute our shareholders as a default. We're exploring a very range -- wide range of creative structures with our partners from project-level vehicles to revenue sharing and other funky options that let us scale hard without handing away the company to them.

Now I did talk about my ambition. And again, this is my personal ambition, and this is not in guidance. This is not target. But I would like to see that the way things are moving forward and all the partnerships in front of us, I would like to be operating at about $500 million of revenue -- annual revenue by 2027 and increasing from there going forward as well.

And finally, I think Brian talked about the flywheel question previously and so did you, [ Bart ]. Every data center for us brings in long-term GPU and hosting revenue. On top of that, as we evolve, the more infrastructure we operate, the more software intelligence we can pull through.

What is the market missing? I think that was your question. The market is missing the fact that Gorilla is shifting from a small cap story of survival into a multi-region sovereign AI operator with long duration of contracts, expanding margins and a very serious revenue ambition. Most people are looking at it as the Gorilla yesterday. That yesterday was in [ Weber ] at $22 million of revenue.

Trust me, when I hit $27 million, if my personal ambitions fulfilled are fulfilled and we hit $500 million, that's an exponential growth, which not many people have seen before. So the gorilla that they will meet in the next year will be a very different animal [ Bart ], and that's what the market is missing.

We have no further questions. I'd like to turn the call back over to management for any closing remarks.

Thank you very much. Thank you, everybody, for taking your time and listening to us. To our institutional and retail investors, I'm going to say this out loud, and I haven't written this or practiced the speech before. Your conviction has carried us from survival to scale. Now people ask me about survival. This is very important. You stood with me, Bruce and the rest of the team through every single battle we have bought to get you.

Now we enter a new phase. We're not just winning contracts. We're building the AI infrastructure of nation. Your belief has shaped this company, and it will definitely define everything we've been building in the years ahead. Most importantly, I want to thank every single one of you, naming people like Sam, people like Christian, people like Gunther, who actually stood by me while the world was still playing catch-up. And I intend to repay the trust with performance.

So thank you. And thanks, everybody, for listening in. Have a lovely day.

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Welcome, everyone, to this extended in-depth fireside chat with Gorilla Technologies. I'm your host, John Roy. I cover technology companies in Water Tower Research. Today, I'm joined by Jay Chandan, he's the CEO of Gorilla and by Board member, Thomas Sennhauser.

I should mention that the company's safe harbor statements can be found on their website. Also, this fireside chat may not be reproduced or a written transcript distributed without the expressed written consent of Water Tower Research.

Well, welcome. Well, let's jump right into it. Let's go right into the questions. So as an introduction, maybe you could give us an overview of the company and your markets.

Absolutely, John. First for all, thanks for having me. Gorilla is a London-headquartered AI infrastructure and intelligence operator. Now we're not a software vendor or a hardware retailer like most allude to. We're a full stack builder and operator of sovereign AI infrastructure. What does that mean? It means that we design, we build and fund and operate all these AI data centers and help monetize them so that we can provide national intelligence security platforms on a long-term basis anchored by multiyear service agreements.

Now what do we offer? I mean there are four markets we serve today. Security and network intelligence. So things like sovereign surveillance, lawful interception, threat analytics, compliance platforms, which been -- all of the -- or underpin the national security, cybersecurity requirements and public safety.

The second one is smart city platforms. AI-driven monitoring traffic, environmental and safety platforms for both urban and national deployments.

The third one is GPU as a Service. These are high-density GPU infrastructure for governments, enterprise and more importantly, research clients for delivering orchestration software, service levels, which they obviously would require a guaranteed availability. And then finally, operations and managed services. So think of it this way. Once we've secured the customers' contracts, we have long-term SLAs where we own, operate the infrastructure on behalf of the customers. That means we have to ensure uptime. We have to ensure security. We have to ensure compliance and final scalability.

What does that mean? It means that the different markets. So there's been a lot of questions about, "Oh, what markets are you serving?" So for me, the market segments will be divided again, primly into 4 different segments. Government and public agencies. Today, more than 80% of our revenue is actually government and public agencies. So think about it this way, smart policing, tourism, smart city deployment, intelligence, national security.

The second one is telecoms, telecom operators and utilities. So think about it this way, national backbones, AI-ready infrastructure that supports 5G. We just recently won a number of 5G projects as well, energy management and digital services. The third one is enterprises and financial institutions. So anybody who's looking for secure AI workloads, fraud detection, network intelligence, compliance and so on. And finally, we do a lot of work in education and research, so national scale digital infrastructure, for example, smart education platforms, GPU access for universities and innovation centers. So those are the 4 primary segments we cover. I hope that answers your question.

No, that's great. I mean you were talking about operations and then data centers. Maybe you can give us a little more color on this very large, what, $1.4 billion contract you did with Singapore. And I know you're building a few data centers for them, I think.

Yes. We are actually going to be building four across three different geographies, which is Indonesia, Malaysia and Thailand. When we signed the contract with Freyr, who's an NCP partner, by the way. We decided that we were going to build it in phases. We didn't want to take the big bang approach of going and deploying all $1.4 billion across three different countries. It just doesn't make sense.

So what we did was we're taking the first phase of $300 million in Indonesia, starting Q4 with optional extensions. So these are 3-year contracts with obsolete extension. What are we doing? We're providing AI-native infrastructure, which means we're providing GPU-dense racks, optimized with NVIDIA H200plus hardware, liquid cool for sustained training workloads. Then we are providing low PUE workloads, basically below 1.25 typical for tropical environments, and this is very essential for the customer. We are providing sovereign-ready orchestration, which means for workload scheduling, compliance, tenant level SLAs, we manage all of that.

And finally, we're also providing them with edge integration, so linking national sites to very low latency workloads. We will have kicked off all the services by first quarter of 2026. But look at it this way, John, the market demand is far more significant. You said this was large, but we are actually going after even larger projects today. The market is there. There's a demand of more than $12 billion to $15 billion plus today. And our alliance with Freyr is already pursuing more than $2.5 billion of opportunities within the Southeast Asia region alone. And what makes it very different is that we're not just building these facilities. We are owning, operating and monetizing them through multiyear SLAs. So think about it this way, what makes us more than just a contractor.

So Thomas, can you give us a little more color on that?

Absolutely. We are just in the final statement of work, a little bit about details about the networking, all the [ small PBT stuff ] we are doing and also negotiating with our partners, the pricing so that we have an optimized price, which is fitting our calculation plus also our partner. And very soon, we will have that on the road with the first chunk, which is about $300 million. And we're already discussing the next phases with the end customer, and there is much more to come. So just stay tuned.

So what about ONE AMAZON, I mean I know there was a lot of noise about that a little while ago. Tell us more, what's going on?

We've just gone through this whole last week with -- at the Climate Week. And what was exciting for us was we were able to showcase our entire profile through a launch stage activities during the September Climate Week. It was not just an ESG branding, what we are doing is that we took our flagship environmental intelligence platform and showed the world that we were actually now turning the Amazon's biome into structured investable data.

Until now, it was all about, building proof of concepts, you're signing the deals with Mato Grosso, for example, getting 1 million hectare commitments from them, getting the likes of IDB to work with you. This is a long process. We're talking about a 30-year project. So it took us a long time before we could actually get this. Now we have started to look at how we deploy our Gorilla AI stack to capture all of the biodiversity. So whether it's all the biodiversity that exists within the Amazon rainforest, the water, the soil, the climate signals across millions of hectares. So we're going to start with the first 1 million hectares and go across the board. The raw biome data, which we generate is then processed in our natural infrastructure which is basically to create the world's largest natural compound database.

Now we're working with the likes of [ Okura ], for example, based out of Singapore, where we're using our AI engines to analyze all of the biome compounds, the Amazonian Biome compounds for application in medical, medicines and wellness. Now the model is a dual model. From infrastructure side, we're building the data capture layer. We're having the sensor. So we're working -- we've got the sensors being deployed on the ground level. We've got the satellites mapping the topology. We've got the edge compute. And then what we're doing is it's flowing back to all of the Gorilla data centers, which we will be building within the regions.

So we're building 9 data centers across each of the Amazonian countries, and we'll be building one in the United States, which will host all of the satellite data. So that's your -- that's the first model. The second one is the intelligence model. So we're converting the natural capital into tradable usable outputs. So basically, we're taking compound libraries for the biotech. We're taking environmental credit streams for finance, real-time monitoring of the government and making them tradable. That's a very unique thing which no one has ever done before. And this matters for us, and it matters for ONE AMAZON. Why? Because it shows Gorilla's ability to take something such so vast and so complex as a rainforest and turn it into a sovereign digital asset with real economic scientific value, and we're doing that in a region in Latin America. That's the most unique thing about it today.

So Thomas, ONE AMAZON is huge. Can you give us some more details?

Yes. I just came back from Climate Week in New York last week, and we had the Chairman of the Environment Task Force from the White House, Ed Russo, who did the opening. We had a big announcement on SEC, the Security of Exchange Commission who approved the digital token for ONE AMAZON. There was an MOU signed with the IDB, the Inter-American Bank. And we did a demo of our sensor with a first POC we did for a few first hectares. So things is in progress. But again, it's a huge project. It will take time. And we're looking forward to COP30, where we will have a little bit more demonstration and the first data, which we hopefully can then public share with a bigger audience.

Interesting. So let's dig a little deeper. So let's talk about your vision and strategy. I mean, obviously, there's a lot going on. Do you -- how do you define and measure your success for Gorilla over the next 12 to 24 months?

Okay. That's a good question. We -- I mean, we've told this before, and I think we want -- I want to reiterate this to the market again. We measure success in hard contracted terms, okay? There's no fluff, there's no fake contract. This is real. We've already covered over $1.4 billion, plus we won tens of millions of dollars in Southeast Asia on the 5G contracts as well. We are on track to close another further $1 billion by June 2026, which I promised. So this was completely -- which came -- which we obviously didn't disclose to the market at that point of time until we sign the deals. But now the pipeline is even bigger than before. We've got now another $5-plus billion of pipeline, apart from the $1.4 billion we've already covered and the $1 billion we've signed, and we hope that we will sign, sorry, my apologies. Now what are the metrics we measure ourselves?

First of all, contracted backlog. I'm very proud to say that we have multiyear SLAs locked in, in converting our pipeline into signed agreements. Today, I can announce that we have over $85 million already locked in for 2026. By the way, this does not include the data center project of $1.4 billion, which has already been contracted. No, it does not.

The second, we pride ourselves on execution speed. We go from the time we select to do our site selection to our first review, we are going in less than 90 days. That's kind of unheard of as well. The third one is cash discipline. Cash conversion cycle is important. Accelerated collections is important. Debt reduction. We've gone from, as you know, $21 million of debt in the beginning of the year. Now we're under $16 million. So we're very fortunate and we're very blessed to have done. Our CFO has done a phenomenal job. But more importantly, what the market also doesn't understand or realize is that we have $27 million of real estate assets, which is actually earmarked against the debt. So when I clear off the debt completely, I will still have additional capital reserves that will be adding to my kit.

And finally, operational readiness. We need to make sure that we're able to scale delivery teams. So what we have done is that we have hired a massive team in India. As you can see, we're hiring more than 150, 200 people as we speak. We will have about 70 people in Thailand by the end of next month by the time we close our acquisitions. We will have about 150-plus people in Taiwan. We have more than 30 to 40 people in Egypt. And we're also accelerating some of our U.S. acquisition as well. So it's not just about announcing contracts, we're making sure that we are revenue generating and building on our infrastructure as well.

Yes. There was a lot of projects you were mentioning there. Are you getting any kind of reuse from one project to the next, are there feeding to each other? Are there cross-selling opportunities?

Yes, there are cross-selling opportunities today. But what we are trying to do is that we are making sure that we're able to make our partnerships and our ecosystem much more stronger. Now when I work with -- so for example, if I'm working with government sectors, I'm making sure that I'm able to work on a particular project. So for example, the 5G LI. Now that is a very, very important project for us. What we have done is that we have taken that particular project. We built on the customers done 4 years ago, successfully deployed it. The customer gave a raining review. We took that and implemented again for the same customer. So now we expanded our capabilities.

Now we've gone and sold in other regions in the Southeast Asian market, as you've seen in the press announcement recently. We've got 2 new projects. And we're actively engaged in 2 more discussions in the Middle East who come to us and said, we don't know of anybody who's done that. Can you please help us? So for us, this is not just building a product and selling it and deploying it once, we make it repeatable, and that's the mantra of Gorilla today.

Great. Let's talk a little bit about your financials and capital essentially. Can you break down your capital needs and your burn rate and funding needs over the next 12, 18 months?

Absolutely. First of all, we have raised $105 million recently. We haven't spent any of that. So we only reduced debt further. We haven't used that money either. And our customers are paying. And this is an important fact, Roy. We have our customers paying us regularly now. Last quarter, they paid us. This quarter, they paid us. They're going to pay us again in a couple of weeks. So we are delivering and our customers are paying. That's one.

Second, we have closed $1.4 billion of contracts, and we're targeting another, like I said, $1 billion plus by mid of 2026. The backlog itself generates payments, first of all. Secondly, we're not going to be dilutive. And I want to make this message very clear because we want to preserve shareholder value. So what we are doing is we're exploring very creative alternative sources of funding. So for example, we are already engaged in very active discussions on project level debt. We're doing vendor financing. We're working on export credit. We're working with sovereign funds. We're working with green infrastructure capital, and we're working on other partnerships where we can -- we believe that dilution is the last lever, not the first for us, okay?

And then finally, what we will also do is we will also use our scale. We were developing more into the U.S., and I'll talk a little more about it as we go through this discussion. The CNS and CANS integration is helping us access local credits now. Now we are also able to tap into targeted pools of capital with our broad equity issuers as well. So think of it this way, we're prudent and capital efficient. Our burn is tightly managed and our project phased. We do not need heavy corporate level cash because our model funds the project at the SPV level and ties CapEx to contracted utilization. This keeps us very lean on our working capital and avoid speculative build. And that's why someone quoted sometime back, "we have an office or a research parlor or enhance a lot," doesn't really matter because it's London, and we've got a very, very, very lean, efficient business to run.

So looking a little shorter term, over the next 6 to 12 months, what kind of milestones should investors be looking for or watching out for?

That's a good one. Now for the last -- I mean, we have been focused on actively building our pipeline, but reducing debt at the same time, right? So -- but that does not mean we have missed the ball on how we expand. Now the next 6 to 12 months, the first focus would be our Southeast Asia Phase 1 mobilization. We've signed this large contract. We're not going to lose our eyeballs on that, and we're going to make sure we are focused. So what would the investors watch? They would be looking for anything, NTP being issued, the procurement loss being awarded in Q4 of 2025, the first racks being powered in the GPUs land. So that's our first thing.

Our second would be we are very actively pursuing an acquisition, a potential acquisition in the United States. That will give us an integration of over 200 people to establish scale in an American footprint. So we believe that, that would come to some sort of a conclusion, not closing, but that would take a long time, but at least to some sort of a logical conclusion. The third one would be Thailand. We're very actively focused on Thailand. So what would happen is we would have closed our CNS and CANS acquisition, and we would have deepened our delivery capabilities in Thailand and the APAC region.

I've also mandated my team and my Head of Strategy to close and look at a large facility in India. We're currently closing that as we speak. I think we should be live in either October or November. That's for our existing facility. But that said, I've also mandated to look for an acquisition, and we're in conversations with about 3 or 4 businesses, which have about 1,000 to 2,000 people, and we're looking to acquire that as well. So investors should keep an eye out on that. Singapore, we will be opening up our office. That would be more a sales office, having more with an anchored regional AI data center operations.

For MENA, we are actually -- 2 things that we've been looking out for will be the milestones on the Egypt project because now we're going into testing early next year, which means we'll go -- we'll complete a full deployment by the end of next year, which will be a year ahead in terms of completion. But at the same time, we'll also be looking at projects. I just told you about a couple of 5 GLI projects, which we are looking at and talking to in the Middle East. Hopefully, that comes to some sort of a logical conclusion over the next 6 to 12 months. LatAm, this is important. The one I said has actually opened up a lot of doors for us in the LatAm region, whether it's Panama, Mexico, Guyana, Brazil, Peru, Chile and so on. We've got some very large projects coming out of Brazil, which we will be slowly or quickly announcing over the next 6 months, 6 to 12 again.

And then finally, the revenue ramp. Now I talked to you about the $85 million backlog, but I didn't talk to you about what the ramp-up would be in terms of revenue. What we will do is we will provide guidance during our third quarter results so that we will let the market know exactly what that number looks like for 2026 and 2027. I hope that answers your question.

Definitely. It does seem like you've got a lot of things going on. A lot of balls in the air. You're juggling quite a number of things. Maybe we should talk about risk. So risk and execution risk. So what do you see are your biggest execution risks? And what are you doing to mitigate them?

That's a good one. I think I have about 4 or 5. And we talked about -- interesting you asked me that because we just had a management session recently, and we talked about this and we discussed it at length, and we've put some of them to rest right now. So biggest risk for me would be the GPU supply chain today. Global demand is outstripping availability. That's a big challenge. Long lead times for NVIDIA class GPUs. So that's going to be my first challenge.

I can tell you that's a 4090 that I've got sitting over here.

The second one would be power and readiness, cooling readiness. I'm sure you've seen that the high-density workloads require reliable low PUE infrastructure in very hot climates. And as you see, we are very actively investing in very hot climates today. That's number two. Sometimes there are delays in local permits and regulatory approvals. That becomes a bit of a hurdle. Sometimes there are sovereign compliance issues like strict data localization that requires security requirements, different countries. Like if you look at Southeast Asia, no 2 regulations are aligned. So we have to conform to each of the local regulations.

Sometimes, sometimes, there are civil delays, vendor coordination, integration of IT and so on, geopolitical, and that's a big, big risk. In fact, I should put that first. The geopolitical exposure for us is a bit of a challenge because, for example, what happened in Thailand, right? The Prime Minister got fired. We got a new Prime Minister, lots of projects were put on hold. So people -- I do believe sometimes -- some of our investors just don't have the patience. They just don't understand the political risk we have to go through when you're looking at government projects.

Listen, government projects are great for 2 reasons. Once they contract, they're gonna bed with you for the next 10, 15 years, and they pay regularly. But the biggest challenge is the political exposure, right? That's kind of a big comp. So things like regional instability, political shifts in emerging markets, FX volatility, those are some of the big execution risks, but we're also putting the mitigation strategies already in place, and we're making sure we have a team, by the way, a dedicated team to look after the mitigation of these risks.

So Thomas, any kind of view on execution risk from your position on the Board?

Yes. I think for us on the Board level, I think we have 4 risks we see in it. One is supply, of course, which is always a channel power, people and then we have the regulation region, geopolitic macroeconomics around it. And I think to mitigate all the risk on the supply side, we're working as a company very, very close with partners. We bring them early on board as early as possible. And we really believe in a strong relationship, which helps us also with the ecosystem to get the supply under control.

On the power side, we have normally when we build data center, make sure that we have multiple contracts in place. We are very careful on the location. And again, a partner is a critical part to overcome this risk. On the people side, I think it's for everybody these days, critical to find the right people, the right talent. And what we are doing as a company in Gorilla, we really want to attract the right people, the right talent. And I think we have a unique culture in our company, which makes it easy to work for us, and I think it's really a cool team. So we really emphasize that and making sure we attract the people around that.

Regulation and geopolitical, we work with all the regulators, the different governments as tight as possible to reduce that risk. We have in multiple regions, big projects. So if something happened in one region, it will not impact as big as we're not depending on Asia only or on European market. So that helps us to do that. And also our pipeline is in all the different regions very, very strong. And with that, we mitigation of the risk is much, much lower than maybe other company have.

Let's dig into that a little bit more. I mean you have a lot of public sector clients. Obviously, it's a large percentage of your current business and future. How are you really doing this? Did you add a team? Can you give us a little more color, particularly given the long procurement cycles?

Yes. So the biggest challenge we have is localization and capability transfer. You go into these regions, like, for example, when we went into Egypt, we were completely gobsmacked by the local -- by the requirements on the local side. Forget all the other complexities, HR is one of the biggest challenges. So what do we do? We invest local hiring. We build training and partnerships. So what did we do? We went into the universities in Egypt, hired them fresh off the books and said, now we're going to train you.

We're doing the same thing in Thailand. We have CNS and CANS, for example, which we're acquiring. What we're doing is we're using them to go into the universities and hire locally so that we can build an R&D team. Now the good news is that CNS and CANS actually has about 30-plus people in R&D. That's a good kind of a stepping stone, and we can evolve from that particular stepping stone. Now in India, we are looking at potential acquisition. But in the meanwhile, we're working very closely with the universities to make sure that there is long-term control from the business side of it in terms of HR. The second one would be the regulatory and the compliance engagement.

Now our platforms are built for national data localization and making sure that lawful interception standards are met from the stock. That means we have to go through every single precertification and local council requirements. It's not like I go to the country and I've done it. Every single part, like, for example, working in Brazil, in ONE AMAZON. Mato Grosso is completely different from Sao Paulo, completely different from Rio, right? We have localization and precertification requirements in each of these different places. So we have to make sure that we are aligned to any -- to reduce any late-stage regulatory risk. Then you have the geopolitical risk we just talked about it. So what we do is we do country-level SPVs so that we can have diversified vendor sourcing projects, which reassures the governments and that Gorilla can deliver even if the market shifts.

So for example, when we're delivering GPUs, we make sure that it comes into the country, let's say, for example, in Southeast Asia, in the country in an SPV so that the delivery stays there and that Gorilla owns those GPUs on their books. And I think these are maybe the 2 or 3 key alignments or interest we would like to align with public sector clients today.

So Thomas, from your experience, how is the best way to mitigate these long cycles that Jay is talking about in procurement?

Yes. I think it's -- as Jay said, it's long and it's challenging. But what we are doing is we're really working very local. So we have local people on the ground because we believe business is done locally and not on a regional or on a worldwide level. So that's why we have offices and engage with the local people that helps us to drive the decision faster than as a global company.

Got it. So you've talked a little bit about GPUs and other data centers and things. I'm curious as to the competitive positioning. I mean, there are a lot of AI data centers out there in the world. How are your different than traditional? How are you protecting your IP and your technology road map from the competitors?

That's an interesting question. Why? Because, again, the market just does not seem to get what we sometimes communicate. And I think I want to be -- maybe spend a little bit of time and be very clear as to how we differentiate ourselves, what is our technology stack and how defensible is our IP, right? So the proprietary AI orchestration intelligence stack, which Gorilla has built, our platform integrates with all of the GPU scheduling, the multi-tenant security requirements, the telemetry and billing at a sovereign level. Now this allows governments and critical operators to run secured AI workloads in a way off-the-shelf data center software cannot match today. So that's kind of our first IP.

The second is the domain-specific know-how and certification. We have been in lawful interception for decades now. We've been in business for 25 years out of 20 years we spent in lawful interception. We understand smart policing and national security deployment like nobody else, at least within the region today. So what does that mean? It means we have deep compliance. We have deep regulatory approvals, and we have kind of almost firewalled any new entrants who cannot fast track in this space. This requires a lot of trust from the customer. That's one side, but it also requires very deep compliance. So these go hand in hand, and it's very difficult for new entrants to come in, impossible, in fact, for new entrants to come in. The third one, which I'm very, very passionate about is our Platform as a Service, right? The end-to-end vertical integration, we own the entire stack today, whether it's video analytics, whether it's infrastructure, whether it's IoT and whether it's cybersecurity. Each of them reinforces the other.

So for example, the video intelligence feeds on smart city workloads, which require our data centers to operate and securitize the backbone. Now the network in this case, the effect looks and locks actually. It looks and locks in the client and makes displacement very hard. Now if you look at our average tenure with our customer today, it's over 14 years, okay? So that's what I said. The network effect of this locks, looks and locks in the clients at any -- and makes it very difficult for us to be replaced or displaced today.

And then finally, the sovereign relationships and all the embedded SLAs we have built with the customer. See, once the systems are replaced, it is very difficult to contractually get them out of system unless they want -- we've screwed up on a big proportion. Thank God to date, we haven't done that. That's one. Now as we have tried contractually with the customer, we have to deploy and deliver critical KPIs for the customers pertaining to the local loss. That creates a lot of long-term stickiness and it also prevents -- has very high switching values. So these are the 4 or 5 things we have today, which makes us very defensible.

Excellent. So moving a little bit, let's say, adjacent. If you start thinking about your partnerships and you're building an ecosystem, you've got partners with HPE and NVIDIA and AECOM. I mean, how are those really helping accelerate execution at this point?

Listen, we thrive because of our partners. We have partnerships with HPE, NVIDIA, AECOM, Dell, Edgecore, Supermicro and so on and so forth. Now our HPE partnership, it strengthens the credibility with the top of list. It helps accelerate our product deployment. The one with NVIDIA, for example, the alignment underpins the GPU supply and optimization. Now regional partners such as Freyr, for example, which we signed with recently, helps us compress the time to market and localize the delivery and operations.

Now I'm sure you've seen already, John, NVIDIA actually helped us work -- actually build and deploy an AI model, which has never been tried and tested before. They help the Sápara Community doing the ONE AMAZON, create the large language model, which translates and near extinct language on the planet. There are only 2 people who speak the language. One is 99 years old. The other person is, I think, about 60, okay? We managed to get the person to speak for about, I think, about 16 to 18 minutes, and we're able to map it and translate it into English. So what have we done along with the media, we've been able to now preserve a language that would have been extent. There were 3 people who spoke this language 4 months ago, God bless their soul, the chieftain's mother passed away. And there was a Chieftain who actually came and said, how do I preserve my culture, my language, my identity. And if you see some of the photos recently, I was with the Sápara community in -- at the Climate Week, we had invited them, and I was truly humbled. That's what partnerships bring, right? That's one.

Second, I see these partnerships as backwards, whether it's national operators with utility companies, we work very closely with utility companies. We make sure that we work with engineering firms. We work where we have to partner with civil firms, for example, for bringing water and local licenses and so on and so forth. We don't do the work, but we have relationships and we have to work with them. So those are our JV or consortium partners. And finally, I think the customer validation side of it is very important for us. And we make sure that these partnerships will help enhance some of the customer validation, for example, for us.

So Thomas, with your little bit broader reach and experience, how are partnerships and ecosystems with these giant companies really helping Gorilla?

Yes. I think leverage partner is super critical for us. And I think it's also important to bring them early on board. So we are really leaving partnership not only on paper, we really engage with them very, very early in every opportunity we have to make sure they are part of the process and they feel comfortable to work with us in a different opportunity. So it's a critical path to win and making sure also that we grow with them together. So it's a win-win situation for both. And I think that's really very, very critical also for our growth to make sure that we are scaled as fast as we want. So I just want to emphasize partner and ecosystem are super critical and is part of our DNA to work with them in a real day-to-day business.

So speaking of partnerships. Where are you looking for opportunities for more joint ventures and consortium. Do you see any kind of things on that horizon, places to look for?

Yes. We are currently very well engaged in Southeast Asia, as you can imagine, rolling from our Indonesia into Malaysia into Thailand. So that's one. Closing CANS and CNS in Thailand will be amazing. United States, I just announced that we are actively pursuing a deal to acquire a company. John, this is fresh off. But that helps us position into large government contracts in the United States. Now why? Because when we have a company which provides managed services and take a product company such as ours, you put them together, it's a match made in heaven. We can provide state-level AI infrastructure or we can provide education-focused GPU services does not matter what that is or smart policing or even our lawful interception programs.

Our India, for example, we are going to be focused on our acquisition in India. That would be, like I said, about 1,000 to 2,000 people. That would be our capability center to anchor all of our edge AI, cybersecurity and smart education workloads. So we are going to use that more predominantly as a customer success and an R&D center. So that will be our strategic regions or focus, and that will be our key sectors where we're going to be putting our money to work.

So Thomas, on your radar, what are you looking to -- or in what direction do you think Gorilla should really go into?

Yes. I think today, our presence with the offices we have in the U.S., in Europe, in Asia, we have very well covered the different regions. And we also have projects in South America, Middle East. I mean we have also an office in Egypt, which is Middle East, Africa, depending how you look on it. And I think we are very focused with customers. So I don't think we have very specifics we want to go for. I think we really want to grow with the customer we have, making sure we deliver what we are committed. And then I think we have more than enough in our pipeline to achieve our forecast over the next couple of years.

Now one of the things that investors often do is look at customers for validation of business, the pricing, the delivery, et cetera. Can you share some concrete examples of a client that's used the Gorilla platform and maybe the impact?

Absolutely. Actually, I think I can give you a really good example of what I was reading today from one of the messages sent to me today. The 5G lawful interception platform. Now a lot of people don't understand what we are actually building and doing there. Now in APAC, Gorilla built and operates the first fully sovereign 5G LI backbone, which meets the strictest security and compliance standards while sustaining a 99.99% availability for critical law enforcement and intelligence agencies. And this is important because for them, this is literally their backbone. Now what was -- what came out of that was the outcome and efficiency, it helped the agencies reduce time to insight from days previously to minutes and cut the local cost of ownership by double digits versus in-house bills.

So previously, they added in-house bills, and it actually literally cut their total cost of ownership. So they were so very happy that they asked us to deploy the next phase of that as well, so which we got an extension from a 3, now we've gone to another 3-year contract. But what they've also done is that we have gained real-time compliance reporting for the customer, which they didn't have before. They were like, "Oh my God, can we get real-time reporting" because sometimes you can imagine, right, things go wrong, they need the reporting so that they can put it in front and say, look, we were compliant.

And then finally, we also help them build new AI analytical workloads on a regular basis. We are the only team that sits inside the premise of the customer. That means we are sitting in between 3 of the top telecom -- there are only 3 telecom agencies in Taiwan. We sit in between all of them. And what we do is we future-proof all of the new AI workloads that the customers asked us to build as well. Now that is a great example as to how we can take a product, successfully deployed into one customer and then roll it out to 2 other new customers across the region. Now we've got suddenly 3 new customers for a product we only built 3 years ago, and we have received tens of millions of dollars in revenue. Actually, it will be quite a lot more than that. And by the time we close this, let's say, by end of 2026, we would cross the north of $120 million, $130 million of revenue just on this particular investment of ours. That, I think, is a big success for us.

So kind of following on with that, if you look at your outlook for growth beyond Singapore and ONE AMAZON and certainly what you've talked about, what other strategic regions or sectors are really on your radar?

So today, as I mentioned, the U.S. is a very key market for us. We are actively engaged in quite a number of discussions through our partners, BroadSat, AECOM and so on and so forth in the United States. So the U.S. will be the one key market we will be actively entering over the next 6 to 12 months. That would be both through an acquisition and potentially through an investment we will make as well. That is number one.

We are going to heavily invest into the Asia region. We're seeing a lot of potential growth coming into this. So for example, we talked about policing -- smart policing projects here. We talked about utilities and electricity projects here as well. And what we are doing is we are going to use our capability, which is the newly built capability within the regions and expand across the other regions. So for example, in Thailand -- from Thailand, we can expand very quickly into Vietnam, Cambodia, and Laos. We get from Malaysia, we already got our expansion into Indonesia, but we will slowly be targeting Philippines and so on and so forth as well.

And then finally, we'll be looking to expanding our horizons within the Taiwanese sector as well, where we're going to go from governments to enterprises. And as you know, we just signed a joint venture with a very well-known telecoms operator in Taiwan. That relationship is going to really kick off.

Excellent. So there's one area I wanted to talk about a little bit, which is sustainability and ESG. How does that fit into your growth strategy?

To be honest with you, this is something we have been very passionate about, but we did find a very large project to kind of hone in our capabilities. But ONE AMAZON brought that for us. For me, ONE AMAZON is not branding, okay? It converts -- as I said, it converts rainforest biome data into investable outputs such as lateral compound databases for health, environmental credits for finance and so on and so forth. But ONE AMAZON will be the largest sustainability project ever done, period.

If you listen to Rodrigo Veloso speak at the Climate Week last week, he said that they were looking to raise over $1 trillion for this particular initiative. And they believe that, that is a possibility. And I've known Rodrigo for some time. When he puts his head to it, he will make it happen. So he's an absolute phenomenal human being.

The second for us is moving our AI data centers into green AI data centers. Now designs with PUE below 1.25, renewable integration and ESG monitoring as part of the SLA, we make sure that we're ensuring every workload is measured for impact. And that's something we are very, very, very passionate, and we're investing quite a bit on that.

And then finally, if you look at our sustainability and ESG data monetization, for example, we have got a steer tourist safety project in Thailand. We're working with the Thai tourist police and the Royal Thai police. So our data monetization is focused on the ESG, and we want to replicate that in LatAm to run our infrastructure, showing how sustainability can actually deliver and not only just be an add-on, right? It's more like a core part of your function going forward. And that's what excites us today.

Well, that's great. Well, I think we're going to have to leave it there. We're running at the end of our time here. Jay, Thomas, I really appreciate you spending the time with me today at our fireside chat.

So to learn more about Gorilla, please visit their website or you can look at our research on www.watertowerresearch.com, I want to thank everyone for joining us.

Thank you very much, John.

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