Ladies and gentlemen, thank you for standing by. [Operator Instructions] I would now like to turn the conference over to Tahmin Clarke. Please go ahead, sir.

Thank you, operator. Good afternoon, and welcome to Arlo Technologies Fourth Quarter and Year-End 2025 Financial Results Conference Call. Joining us from the company are Mr. Matthew McRae, CEO; and Mr. Kurt Binder, COO and CFO. If you have not received a copy of today's release, please visit Arlo's Investor Relations website at investor.arlo.com. Before we begin the formal remarks, we advise you that today's conference call contains forward-looking statements. Forward-looking statements include statements regarding our potential future business, operating results and financial condition, including descriptions of our revenue, gross margins, operating margins, earnings per share, expenses, cash outlook, free cash flow and free cash flow margin, ARR, Rule of 40 and other KPIs, guidance for the first quarter and full year of 2026, the long-range plan targets, the rate and timing of paid subscriber growth, the commercial launch and momentum of new products and services, the timing and impact of tariffs, strategic objectives and initiatives, market expansion and future growth, partnerships with various market leaders and strategic collaborators, continued new product and service differentiation and the impact of general macroeconomic conditions on our business, operating results and financial condition. Actual results or trends could differ materially from those contemplated by these forward-looking statements. For more information, please refer to the risk factors discussed in Arlo's periodic filings with the SEC, including our annual report on Form 10-K filed earlier today. Any forward-looking statements that we make on this call are based on assumptions as of today, and Arlo undertakes no obligation to update these statements as a result of new information or future events. In addition, several non-GAAP financial measures will be discussed on this call. A reconciliation of the GAAP to non-GAAP measures can be found in today's press release on our Investor Relations website. At this time, I would now like to turn the call over to Matt.

Thank you, Tom, and thank you, everyone, for joining us today. In addition to providing an overview of our recent performance, we have designed this year-end call to provide a deeper dive into our broader strategy and the investments which provide a path for continuing growth into the future. But first, let's jump straight into our results. Arlo had an incredibly strong fourth quarter. Total revenue came in at $141 million, slightly above the high end of our guidance range and fueled by our product launches and impressive performance across our services business. In fact, service revenue hit $89 million, representing 63% of total revenue and grew at an astounding 39% year-over-year. This momentum propelled our annual recurring revenue to $330 million, which is up 28% year-over-year. Fourth quarter EBITDA hit $23 million, up an incredible 138% year-over-year and resulted in Arlo posting $0.22 of non-GAAP EPS, substantially above the high end of our guidance range. And looking at our SaaS performance in the quarter by utilizing the Rule of 40, Arlo achieved a score of 45, putting us in an elite handful of companies executing at this level. Underpinning the record-breaking quarter and continued expansion of our services business is a world-class team that is executing at the highest level. I would like to touch on a couple of examples. Last year, we continued our strong pace of innovation and deployed Arlo Secure 6 across our user base, introducing a myriad of class-leading features, including an advanced multi-recognition engine, AI-based scene descriptions, numerous new AI-based audio detections and the only personalized AI micro model capability in the world. We also made innumerable performance and interface improvements throughout the year to retain our leadership position in simple yet powerful user experiences. And in the second half of 2025, Arlo executed…

Thank you, Matt, and thank you, everyone, for joining us today. 2025 was another tremendous year for Arlo as we generated outstanding financial and operational results. Our subscription-driven strategy and services business remain paramount to our success. And as a result, we are now experiencing the benefits of stellar execution and a clear strategy. We continue to utilize our innovative products and competitive pricing to identify, target and monetize new households with our AI-enabled services. This approach, along with a disciplined focus on execution, enables us to consistently deliver record levels of subscription and services revenue, ARR, gross margin and free cash flow. Let's briefly review our consolidated results for 2025 when compared to the original guidance we provided at this time last year. At the beginning of the year, we shared our expectations to deliver consolidated revenue in the range of $510 million to $540 million, with subscriptions and services revenue comprising 50% or more of total revenue or approximately $300 million. We ended 2025 with actual consolidated revenue of about $530 million and subscriptions and services revenue at $316 million or 60% of total revenue. Our top line revenue performance was strong. But what's truly remarkable is our ability to substantially exceed our goals for profitability in a year fraught with uncertainty due to macroeconomic, geopolitical and tariff challenges. We generated record levels of EBITDA, which resulted in an adjusted EBITDA margin of 14.1%. Additionally, our bottom line outperformance was even more impressive given the non-GAAP EPS outlook range of $0.56 to $0.66 as we provided when we embarked on the year. We delivered an impressive non-GAAP EPS of $0.70, surpassing the high end of our guidance even withstanding the impact of tariffs, an incredible outcome for our shareholders and a testament to the phenomenal execution by this…

Thank you, Kurt. Arlo's performance in 2025 was truly outstanding and a reflection of both the fundamental strength of our business and the excellent execution across the team. In parallel to delivering on our 2025 plan, Arlo has been hard at work building the foundation for continued growth in the coming years, and I would like to update you on a few of these initiatives. Arlo has a multipronged strategy to drive growth across the business as we look to exceed our long-range plan. First is to continue our faster-than-market growth in the retail and direct channels. Our recent product launch drove an expansion of Arlo's assortment across channels, and we continue to capture share in our key market segments. Arlo will also launch several new retailers over the next 12 months, allowing us to reach new customers and market segments. And as I mentioned before, 89% of our service revenue is generated from users that became subscribers by purchasing Arlo devices in this channel and incremental household formation will drive our services business. Our software and services road map remains a key lever for growth, and Arlo has a robust pipeline of new features, AI-powered capabilities and additional subscription tiers, which will begin to roll out later this year. Arlo is set up for continued success across our SaaS metrics, including subscriber acquisition, ARPU expansion and retention. These services will layer on top of our massive product refresh from last year, new devices launching this year and a new hardware platform launching in 2027. Arlo will continue to focus on new strategic partnerships that fuel both additional growth and diversification. These partnerships can provide access to millions of users at scale with little or no customer acquisition cost and provide substantial incremental service revenue. Arlo is uniquely positioned to…

Thank you, Matt. Before I provide an outlook for 2026, I want to share some perspective that is foundational to our confidence in our outlook for the current year and beyond. Over the past few years, we told you that Arlo would transform into a durable recurring revenue subscriptions and services business, and we have accomplished that. We assured you that Arlo would be a market leader in innovation and technology with a scalable AI-driven platform, and we have exceeded on that front. Last year, we indicated that we would evolve into an enterprise-grade business supporting large global companies. And the recent signing of Comcast caps off a year where we have added ADT and Samsung to a robust portfolio of strategic partnerships. We believe the latest evolution will enable Arlo to diversify our revenue base and further enhance our operating model. The latest evolution will enable Arlo to diversify our revenue base and further enhance our operating model. With that said, we expect the first quarter consolidated revenue for 2026 to be in the range of $135 million to $145 million. We expect our first quarter GAAP net earnings per share to be between $0.01 and $0.07 and our non-GAAP net income per diluted share to be between $0.17 and $0.23 per share. We expect product margins in the period to rebound from the level that we reported in the fourth quarter of 2025. For the full year 2026, we expect consolidated revenue to be in the range of $550 million to $580 million, with service revenue comprising greater than 65% of total revenue. We will implement initiatives to improve customer retention and drive higher conversion, and we will adjust our innovative service offerings to enable us to deliver ARPU growth and expanded ARR. These efforts will enable us…

Thank you, Kurt. Given our rapid growth, stellar results and exciting new components of our business, I would like to quickly level set on where Arlo stands. Arlo is a rapidly growing SaaS business that pioneered the DIY security market and created AI-powered services to create a compelling user experience. Arlo's singular focus on the smart home security market has allowed us to move quicker, innovate faster and maintain technology leadership in the market. Every day, every person at Arlo is solely dedicated to delivering on our safety and security pledge. Our mission is to connect and protect what people care about most. And that mission extends to our users and partners through our privacy pledge, which is transparent and clear. Your data will only be used to cultivate the best security experience for you. It's that pledge and singular focus, which has allowed some of the largest strategic players in the world like Samsung, Comcast and ADT to team up with Arlo to be their security partner of choice. And our continuous investment in our platform remains a substantial differentiator. While others have been pulling back on their investment in the segment, we have been pushing the boundaries further. We leverage our class-leading devices to acquire users and lock in long-term relationships that can't be disintermediated like many other AI or subscription business. And our groundbreaking features and functionality that we deployed in Arlo Secure 6 will only be further enhanced by our rollout of Arlo Secure 7 later this year. The home security market is large and growing quickly, now valued at $25 billion in the U.S. alone, and we estimate that the penetration of our market remains in the early innings at just over 20%. Our routes to this market have historically been retail channel partners, but…

[Operator Instructions] Our first question comes from the line of Jacob Stephan with Lake Street Capital Markets.

On a great year and a really strong guide to start off '26 here. Maybe just first off, I wanted to touch on kind of the 2 strategic partnerships, more specifically Comcast and ADT. So when I look at Comcast, you've got 31 million subscribers that have Xfinity. Maybe help us think through kind of -- is this kind of like a Calix-type partnership? And then maybe just kind of lay that over with a quick ADT update.

Yes. So maybe I'll go in order of the partnerships that we've announced or talked about either previously or today. So ADT is going very well. The technical integration was basically done by the end of last year. And so what's being done now is planning for their go-to-market. And again, I don't want to kind of get ahead of their launch announcement, but the original target was sometime in the middle of this year. And so we're excited about seeing that come to market because I think it will be able to trigger a lot of growth for them. And it's an exciting partnership for us because of, obviously, their scale and their brand in the segment. We've been able to open Arlo up to a lot of households that we're not really addressing right now through our primary channels of retail and direct. So if I look at Samsung, Samsung is interesting, even though it was publicly announced at CES, I think people kind of missed the impact of that partnership. So what we announced is actually powering an emergency service across Samsung devices. It will start with their mobile phones and tablets, but you should expect that to kind of broaden across all Samsung devices starting in the United States. It's a very large population of users. And what's really interesting about that is, like I said on the call, it's the first time we've done a real deep partnership and integration without hardware, right? I mean they have hardware. It's on their phones and tablets. But for us, the integration is we're really just powering a pure service and subscription service that Samsung will be providing out to their Smart Things users. So that's really exciting. And like we said on the call, I think you'll see more information coming up next quarter. Comcast, I can't say too much about. So it's announced. We'll be doing -- what I would suggest is the integration of a very large partnership like this takes usually between 9 and maybe 12 months. So that's -- there'll be a lot of work making sure that the technology is integrated and Comcast is ready to deploy. But I think you'll see that provide some revenue for us this year, but then really ramp going into '27 and beyond. But there'll be a lot more information when Comcast is ready to release more information about the partnership. But like I said on the call, from our perspective, the scale of Comcast, how many Xfinity customers they have is really exciting for us. And I think the partnership for us could be as impactful, if not more impactful from a service revenue perspective than even Verisure, which is one of our largest and most successful partners.

Got it. Very helpful. Maybe just to kind of touch on some of these -- the new products, the new hardware products that you're kind of planning to launch over the 2026 as well. I mean, what end markets are attractive? You kind of look at your history and your spin-off from NETGEAR. Are routers on the table? Or what's -- I guess, what's exciting about the different hardware products?

Yes. So what you've seen us do is at the end of last year, we did basically a pretty comprehensive refresh, right, 109 SKUs across our channels. And that really set the foundation for not only having a successful holiday period, which we demonstrated, but the foundation for a bulk of sales that we'll be doing in 2026. So we think we're situated extraordinarily well for 2026. And you'll see some updates to some of those products and a couple of new form factors this year and really adding to the assortment of cameras and working. I say not too much, working on some product segments that are seeing some specific growth, very similar to what we did in P2Z in the refresh that we did last year. So that will continue to grow, and we'll be able to grow assortment and market share with those launches this year. When we look into 2027, we talked about launching a new hardware platform, and that is going to be a combination of a couple of things. One is it will be a refresh of a technology-first or innovation-led type platform, new user experiences, starting from scratch a little bit, thinking about home security in the world where the experiences can be AI native or built from -- with AI from the very beginning. So think of a clean sheet of paper and starting over in the space, starting at the high end, and coming out in 2027, but also broadening into the broader market of smart home control, right? It doesn't mean we'll be building those devices in every respect, but the idea of being able to make the smart home and the various devices that are in a smart home participate in home security in the smart home ecosystem. So…

Okay. And if I could just sneak one more in. The service revenue in the quarter, $89 million, that was well above what we were expecting. Maybe you could kind of help us think through, is this the kind of second phase of the plan simplification you did earlier this year? Or maybe just any kind of color you can provide as to why that was such a strong sequential number?

Yes. Jacob, it's Kurt. So yes, most -- so $89 million for Q4 was a great quarter for us. Obviously, we continue to build on the previous 2 or 3 quarters with the service plan optimization that we kicked off and also on the ARPU expansion that we experienced. So the core business grew nicely as a result of adding new subs especially coming out of the retail and direct channel and then the ARPU expansion. We did have about $4 million of NRE in Q4 hit. This was associated with a strategic partner that we've been working with for the better part of a year. They came in and actually increased our service revenue. did have a slight impact on our overall services margin. But all in all, it was a nice windfall for us in the fourth quarter. So I think, as I mentioned in the prerecorded remarks, you're going to see a little bit more of this as we go into 2026. Given the caliber of the strategic accounts that we're working with now, we're being asked to do a lot of integration work with our platform. And as a result of that, we're monetizing service revenue through those relationships a bit earlier than sort of what we've done in the past. So 2026, you'll continue to see growth in our core subscription business, and then we'll add on in these cases where we're working hard to deliver on the promises to these large strategic accounts.

Our next question comes from the line of Scott Searle with ROTH Capital.

Great job on the fourth quarter and really exciting in terms of the strategic opportunities and new adjacencies that you guys are moving into. Maybe in terms of starting, the outlook for subscription and services growth this year of around 20%. I'm wondering if you could give us an idea of strategic contribution into that number. How much are you guys factoring in? It seems like we might start to get some in the second half, but it's going to be fairly limited on that and which sets up a nice growth trajectory into '27. But also as part of that, I'm wondering if you could talk about the opportunity pipeline as well. Are there additional opportunities that you guys have percolating there? I also would like to couple that, Matt, with the privacy concerns have really reached, I'll call it, a little bit more of a fever pitch now and how that's factoring into how you guys are positioned on that front. And then where adjacencies kind of fit into the numbers this year? Is there any contribution that you guys are assuming at all at this point? And then I had another follow-up.

Yes. So maybe I'll start with the privacy matter. So as you know, over the last, I would say, I guess, 6 weeks or so, 4 to 6 weeks, privacy and the idea of data security and data ownership has really become a topic in the public's mind, but also, I would tell you, in strategic partners and the industry as a whole. We are very proud of the pledge and the stance that we've always taken at Arlo, which is it's not our data. It's your data as a customer. We're servicing it on your behalf. If you choose to share it to somebody, that's fine, but we are not taking that data and using it in unexpected ways or sharing it with third parties without your permission or anything else. And I will tell you, I think that's helped in the consumer market, and we're hearing that from the channel, and we're hearing that from our customers directly. But like I said, I think it's having a big impact with potential strategic partners. So when we talk to some of the accounts and some of the partnerships -- partners that we've mentioned on the call and some of the ones that may be coming, this is increasingly a topic of discussion and something that they're using to make their decision on where to put their investment from a relationship perspective. So I think it's why Arlo is winning in most cases when it comes to driving strategic partnerships and having that be part of our growth going forward as part of our long-range plan. When you talk -- you asked about what's the revenue contribution when we look at the 20% or more service revenue. A big portion of that is still just the core business growing. We're…

Great. Very comprehensive. And if I could, from an investor standpoint, the concerns I've been getting on risks from a feedback standpoint, a bit around privacy, which you've addressed, but also AI in terms of marginalizing the recurring revenue stream and the opportunity in what Arlo provides as basic services. I wonder if you could quickly address that again. I know you had some comments in your opening remarks, but I'm wondering if you could dive deeper. And then as well, concerns about memory, not just in terms of pricing, but also availability, particularly as we get into the second half of this year, how that impacts you and how you guys are thinking about it?

Yes. I'll answer the AI component, and then I'll let Kurt talk about the supply chain from an operations perspective. I think the AI market and the potential for disintermediation that we're seeing in the broader software market really just doesn't apply to us. And I think it's one of the key differentiators that Arlo has over most of the market when you look at like an AI SaaS-based market, if you're looking at the broader category. And a lot of that is due to our relationships with our customers drive from a hardware component that they purchase and invest and that draws a linkage to then our cloud services. So there's no way to actually disintermediate and actually drive different AI services to those cameras. They are locked to our back end. It's part of our security mechanism, and we are the only one that provides those services. So there's an inability to actually be disintermediated that doesn't exist in many markets, and that's driven from our dual relationship with the end user. It's a hardware relationship that starts right when they purchase the devices and get them installed that then converts into an ongoing long-term service relationship that makes us very unique in that the user is actually investing in the relationship as much as we are. So it's something that I think is missed by a lot of investors when we get swept up in some of the concerns around AI. It's actually an advantage that I think differentiates us from a lot of what's happening in the marketplace.

Yes,. And we, as you know, have been leaders in supply chain management for probably the better part of 15 years. The team that we have at Arlo had began at NETGEAR and has done a phenomenal job of building incredible relationships across the entire supply chain. And those relationships obviously bear significant benefits when you have a situation that's like unfolding today with memory. Memory costs have gone up, absolutely. Across our actual product ecosystem, it represents probably somewhere between 4% and 6% of the BOM cost. And so it's not, I would say, overly significant to us. We look at it as just another element of that cost of customer acquisition because we use that particular product to gain access to a household and convert them into a service or paid household. What I would say to you is that we use the lower end of the DRAM spectrum type capacity. Most of the stuff that's being highly coveted right now is sort of the high-bandwidth memory, which is consuming a lot of capacity at plants. We have multiple suppliers that we can tap into. And at this point in time in all of our discussions with our suppliers, we feel like the supply is available to us and any increase or incremental cost has already been factored into our medium- to long-term plan. So we're feeling pretty good about the situation. Obviously, we're monitoring it closely. And of course, as new information becomes available, we'll make sure that we share it with you guys.

Our next question comes from the line of Logan Katzman with Raymond James.

This is Logan on for Adam. Kurt, maybe for you. We -- I think you mentioned product gross margins for 2026 were expected to rebound off of the 4Q level here. I just wanted to get your thoughts on maybe gross margins in 2026 and more specifically product gross margins and your thoughts on the cadence there.

Yes, Logan, let me just clarify a couple of things. So when we came out of Q3, our product gross margin was in, I think, around the negative 17% range. And we had heard from various investors that, that was a bit concerning because it had bounced up a little bit relative to what we were presenting in the first half of this year. And then what you saw in Q4 is it actually came back about 300 basis points. We reported negative margins of about 14.4% for product in Q4. We were pleased with that. We've obviously been very focused on ensuring that we keep our product costs in check. As we communicated in Q3 into Q4, when we launched the third generation of products that Matt mentioned earlier, we brought down the BOM cost anywhere between 25% and 30%. One of the challenges we had in the third quarter of last -- of 2025 was we also had the added cost of EOLing a lot of the existing legacy products. So that impacted our product margins. What I communicated about 2026 was that in Q1, we do expect the product gross margin to continue to bounce back a bit. Currently right now, the first half of 2026 looks pretty strong from a device standpoint. And we're feeling really good about the way we're managing our product margins given the 25% to 30% BOM cost down that we communicated earlier and our ability to manage the promotional sort of the depth and the frequency of promotions at this point. So all we're saying is that we're watching it very closely. We know that it factors into the overall combined gross margin. We hold ourselves accountable to growth in that combined gross margin. And frankly, when you look at the 2025 combined gross margins and the growth that occurred over 2024, we were extremely pleased with that. We also believe that going into 2026, we'll continue to see that growth. And so we'll keep you posted. But right now, we're feeling really good about the way we're managing our overall combined gross margins, given that our services margins are still trending in that 84% to 85% range and our actual product margins are manageable where they are right now and using that particular element as our cost of customer acquisition.

Great. That's super helpful. I appreciate it. And then I guess as my follow-up, I just wanted to get your guys' thoughts on what you guys are currently seeing in your international markets and the opportunity you guys see there in 2026. I know one of your largest partners just went public and is talking about maybe doing some expansion. So just curious your guys' thoughts in 2026 around international.

Yes, it's a great question. So you're correct. So obviously, our European partner, Verisure went public in October. They've raised a bunch of capital, obviously, using that capital for growth. So when we look out at least over the first half of this year, where we have already forecast, we're expecting some strength and continued growth from that region. So I think that's -- we're starting off really strong there. And they are moving into Mexico and potentially some other areas that they've talked about publicly. And so there was likely some growth there. We are also actually spending more time looking at some of our other regions that we spent less time focused on as we've been driving just core growth in the business. And so you will likely see a little bit more growth in areas like Canada, Australia and New Zealand. And so those are some areas that we're going to start pushing a little bit of investment in as we think they're right for some additional share gain. So international expansion, I would say, is something that we are working on and expecting some strong results as we go into 2026.

Our next question comes from the line of Anthony Stoss with Craig-Hallum.

It's Rian on for Tony. Matt, for you, you mentioned last quarter, shelf share nearly doubled on a SKU basis with Walmart. And we've seen more and more chatter against home security cameras coming out of China and the U.S. I'm curious your thoughts around any further potential share gains or if you're hearing anything from your retail partners regarding that.

Yes. It's a really good question. And there is a lot of different, I would say, vectors of activity that we're seeing there. So one, like I said and like you mentioned, is we are able to capture additional share in several areas. One was obviously Walmart, like I talked about as far as our product launch. That product launch also drove additional assortment at other retailers and obviously, e-commerce. We'll be launching additional product SKUs, as I talked about earlier, that will help us capture some additional share and assortment across the retailers. So I'd say that's one. Two, we are looking at expanding into some additional retailers over the next 6 to 9 months as well. And so there's some discussions going on there. So I think there's incrementality just from that perspective of us being able to capture some incremental shelves across our key markets. I would say also that some of the key retailers and some of our channel partners are realizing that having a very large assortment, meaning many different brands isn't really a path to success. And so they're looking at actually consolidating down to maybe a smaller number of brands on the shelf as we look at this year and probably going into 2027. And that's something, obviously, will be one of the brands that get to remain on the shelf and actually capture a little bit more share, at least mind share or shelf share from a relative perspective. So I think you'll see that trend continue. And then there's various areas that you touched on of the import of cameras from specifically China as an example, and a couple of brands that are being investigated at the federal level and in some cases, some the state level. That is continuing. And I think the activity there has accelerated. We're seeing actual formal actions being taken at the congressional level, at some of the Department of Homeland Security and other areas of the federal government. And there's likely to be some action sometime this year that could block the import of 1 or 2 brands that could open up as much as maybe somewhere between 10% and maybe 20% of unit volume in the United States to be captured. So what we're doing is we're following that from at least an informational perspective and actually working with some of the federal agencies and Congressmen that are actually pushing some of these activities. At the same time, we are making sure that our products, especially the products we just launched, are priced correctly, positioned correctly and are in the right channels to be able to attack that share if it becomes available. So I think it's more likely than not something happens this year, and Arlo is ready to go capture additional share above and beyond the share capture that we're working on with just organic activities across the channels.

Got it. Super helpful. And then just if I could just piggyback on kind of the retail partner stuff on a more broad level. So unit volumes were strong in 2025. I'm curious, it's early in the year, but do you have any thoughts on '26 unit volumes or just overall consumer demand, anything that you're hearing on that front?

Yes. I would say third-party data is just coming out. And I think what you'll see when that third-party data comes out is they're expecting the overall market to be flat to maybe up 5% to 10% so kind of a typical year-over-year. We endeavor to grow faster than that, as always, because we'll be capturing share. What I would tell you is so far year-to-date, we're seeing a stronger result. And I would say, from a consumer demand perspective than what maybe the third-party data suggests. So I would say the year is off to a good start from at least a consumer confidence perspective. It is a little bit week by week as we're having snowstorms and other quick shutdowns and things that are happening. So there's a little bit of volatility. But overall, I think the year is off to a very good start, and it supports our annual operating plan and the forecast that we're putting together. So I think it's going to be a normal year-over-year growth from a third-party data perspective, and then we're going to outperform that going forward.

Our next question comes from the line of Hamed Khorsand with BWS Financial.

So first question I have was, any reason why the cash balance didn't grow so much as your profitability did this quarter compared to Q3?

Yes. So we ended the year at $166 million, and we generated on the year close to $68 million of free cash flow. What you don't see in the numbers is that during the year, there was 2 pretty sizable areas of investment we made for our capital allocation plan. First thing is, in the beginning of the year, we made an investment in a company called Origin Wireless. That was about $12.8 million. It's really the first investment that we've made in a technology or IP play, and that's worked out pretty well for us. The other thing is that we actually invested $45.5 million in the share repurchase program. So we returned capital to our shareholders of $45.5 million. So when you look at just the cash balance and the overall year-over-year growth, given the free cash flow that was generated, you have to take into consideration those factors to get to really what the overall business is generating. When we look forward into 2026, we expect free cash flow to continue to grow. We do believe that we can grow free cash flow upwards of $80 million. And so we'll look at that in relation to the capital allocation program that Matt talked in depth about as part of his prerecorded remarks.

Okay. Maybe I missed it, but I was referring to the difference between Q3 and Q4 was only less than $1 million. Was there any share buybacks in Q4?

Yes.

Okay. That's what it is. And then as far as the investment into your partnerships with Comcast and Samsung, does that require a CapEx spend for you this year?

There will be a level of investment we'll need to make. Actually, that is a thing we've factored into our 2026 guidance that we will be putting some of our OpEx away to invest in things like R&D and sales and marketing. So we've already started that planning. And given that those projects in the development phase have already kicked off, that will be factored into -- that is factored into our guidance.

There are no further questions registered. That will conclude today's call. You may now disconnect your lines.