Thank you for standing by. This is the conference operator. Welcome to the Gorilla Technology Group Inc. Full Year 2024 Earnings Call. Gorilla Technology Group is listed on NASDAQ under the ticker GRRR. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] Before we begin, we will read the forward-looking statement. Today’s call includes forward-looking statements made under pursuant to the safe harbor provisions of the Private Securities Litigation Reforms 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 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; Bruce Bower, Interim Chief Financial Officer; and Dr. Raj Natarajan, Chief Technology Officer. Please go ahead.

Thank you very much, Isha [ph]. First of all, before I begin, I would like to thank our incredible community of institutional retail investors. You’ve all been standing by me and this incredible business we’ve built through every single high and every single low. Your belief is not only indeed, but it also fueled everything we have and we will build. So thank you. I would like to quickly give you an update as to where we are with Gorilla Technology as a company today, but more importantly, talk to you about how we have evolved as a business starting from 2022 all the way up until 2024, going into 2025. In 2022, we were largely a regional player with limited global reach and all complicated capital structure and a business that was technically promising, but commercially constrained as well at the same time. And fast forward today, what you’re seeing is a radically transformed organization built for scale, sustainability and dominance in some of the fastest growing markets on the planet. In 2023, we began our shift. We doubled down on our global expansion, we cleaned up the business, rebuilt the leadership team, stabilized our operations, and began unlocking national level opportunities. Now, our revenue, as you all know, jumped by about 189% to about $64.7 million, but we also turned a prior year with net loss of $87 million into meaningful net profit. But 2024 is when the engine truly fired. We delivered about $74 million-plus in revenue, exceeding guidance and reinforcing the strength of our global sales execution. Our net income, excluding one-off non-cash items, surged to about $21 million-plus, and that was surpassing guidance by 253%-plus. That was purely driven by disciplined cost control, and sharp operational focus. Our adjusted EBITDA reached about $20 million-plus outperforming…

Yeah, sure. Thank you, Jay. Thank you, everyone. So, the first thing before I dive in is I want to say that we’ve shared today the abridged financials. There’ll be a 20-F filing, which is our year end full financial filing that will be coming up in a matter of a week or two. So, stay on the lookout for that. That will have all the details behind this. So to reiterate just the key numbers, I’ll walk through the income statement and go through those. So first is the revenue, as we mentioned, delivered $74.67 million. We’re quite thrilled with this as it’s a 15% increase over last year. This is really due to performance from some of the large contracts that we had announced earlier, so 2023, and also some onboarding of new clients or new contracts from repeat clients. The gross profit was 49.96%. This is a decline from last year due to a change in the mix. What we saw was basically in 2023, a very high margin focus on services, on high margin services. And we think that that was basically a one-off. Going forward, we expect the gross margin to stay around this level. So 45% to low 50% range. We think that this is the margins that the business is able to generate at scale going forward. As we scroll down to the cost items, you can see that basically the SG&A and the R&D spend were down less in 2024. That reflects the right sizing of the business, some structured layoffs that we took in 2023 and 2024. Really to get the business down to cut some of the fat and get some muscle mass. We’re starting to hire again and to rebuild in some key areas, especially with the senior team.…

Thank you, Bruce. Hello, everyone. I’d like to take a moment to share a few thoughts from a technological development standpoint so that it helps ground ourselves. At Gorilla, our journey has been very intentional from being a software company to purpose-built appliances company and now on to delivering comprehensive solution-based software. Each evolution brought us closer to our customer, deepening our understanding of their challenges and allowing us to control more of the value chain. Initially, we specialized in powerful AI software, but software alone left our customers facing hardware and compatibilities, integration headaches, infrastructure gaps, and unpredictable performance. Recognizing this, we shifted our approach. At the top of 2024, we transitioned into creating purpose-built appliances, pairing our AI with optimized hardware. This gave our customers reliable performance, enhanced security, and faster realization of value. Yet, we knew our customers needed even more. Today, we deliver complete outcome-focused solutions, fully integrated systems designed to solve end-to-end challenges, not just isolated components. The ONE Amazon project illustrates this perfectly. We don’t simply go in offering AI software or standalone appliances. Instead, we are designing and deploying an integrated solution, combining infrastructure, video analytics, secure communications, all seamlessly embedded within the Amazon’s ecosystem. This holistic approach unites hardware, software, services, intelligence, and data center operations, all working cohesively towards strategic long-term goals. That’s the future that we’re building, where Gorilla serves as the foundational platform, the delivery engine, and the trusted partner for intelligent large-scale infrastructure. I’m often asked this question, how long does it take for Gorilla to operationalize these large scale projects? The reality is that it depends. These projects all begin with clearly identifying and understanding critical problems, whether it’s enhancing traffic safety for a city, providing secure surveillance for a nation, or helping partners modernize infrastructure. The foundational understanding informs every subsequent step that we take. Once clarity is established, we move quickly, but deliberately, involving relevant experts early, and clearly mapping out constraints, may they be environmental, regulatory, and operational. Then, we leverage our extensive library of proven blueprints, and we take these designed architectures, optimize them through our ownership of the entire stack, which is software, AI, and hardware. So, what distinguishes Gorilla is our dedication beyond product delivery. We manage deployments, integration complexities, AI optimization for localized conditions, custom model creation and user training. Reengineered solutions for the real world resilience, not for lab simulations. The ONE Amazon project exemplifies this commitment from Gorilla, starting from a shared vision for intelligent conservation of the Amazon rainforest. We are architecting a robust solution, integrating advanced AI, secure communications, and physical infrastructure. So, how does a Gorilla project come to life? It’s very simple. So clear purpose, precise execution, and total ownership from start to finish. This is how we consistently transform complex problems into impactful, lasting solutions. With that, back to you, Jay.

Thanks, Raj. I’m now very keen to open the forum for the analysts and questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Mike Latimore with Northland Securities. Please go ahead.

Hi, this is Keaton Schuelke on for Mike. Looking at your guidance, I was wondering how much does the Egypt project represent of this year’s revenue guidance.

Hey, Keat. I’m happy to take that question. So if you looked at, let me go back, and I think since Mike’s been involved with the business ever since 2022, Egypt didn’t form a big part of our revenue in 2022, 2023, that was a big part of our revenue. 2024, we managed to kind of de-risk the business, and I think that was something which I’ve been talking about as to how we move away from single large contracts. Today, if you look at our revenue, it’s broken down into 4 or 5 large customers. 2025, I’m looking at roughly about 7 to 8 large customers. All-in-all, we have about 97 customers today, and Egypt currently is about 50% of that, probably slightly lesser than that. Next year, it will be under 30%, and the year after will be well under 15%. So our aim is to make sure that by the time we’re in 2026 and early 2027, we are going to have no client greater than 10% to 15%.

Okay. Thank you for the color on that. And then order some that’s needed before you start recognizing material revenue on ONE Amazon, the Thailand energy deal and the Asia smart school deal and when might that occur?

Sure. I mean I think the first thing, the first most important thing which I mentioned earlier is that it takes us a lot of time and effort before we start building each of these customers’ requirements, understanding the customers’ requirements. So whether it’s to be that the solution design, whether it’s the architecture planning, whether it’s a compliance, whether it’s working with multiple partners, whether it is PoC validation, building their infrastructure policy and so on and so forth. Once we have done all of those it then takes us at least between 3 to 4 months before we can start the building and scaling up there the operations. Now, first of all, what we have to do is we have to build the people and structure, obviously, you cannot scale up globally without having a playbook. So, we have to kind of build a leadership team. We have to bring in deep operational capability. We have to create the model for the customer. And then, more importantly, being a small company and everybody keeps pointing us out that we have about 150 to 200 people. Today, we have about 200 people. Raj currently is hiring a little over 140 people as we speak. So by the end of this year, we should be anything between 600 to 800 people. But the problem is that you have to move with speed for the customers. The complexity of the delivery as we roll out, and you talked about the Southeast Asia project, no two projects are the same, right? Whether it’s lawful interception, deployment in Taiwan, or the Ministry of Education in Southeast Asia, every single one of them comes up with their own compliance, integration, political context, and so on. So there’s no copy/paste button for each of these. Third is cash flow. We have to make sure that we’re working in multiple jurisdictions with different banking regulations, FX controls, payment cultures. Managing each of them is a master class of patience, if I may. And let me tell you this, Egypt alone has given us an entire MBA course already. And then finally, more importantly, is to deliver. I will let Raj kind of fill in a few sentences on that. But when we do country led development programs, we have to absolutely bake ourselves into the entire delivery framework. Raj, do you have anything to comment?

No, I’ll echo what you just said, Jay. Being the merging of minds with the different work styles and mechanisms in place across countries is certainly a learning to be had. But the good news is that, we’ve cracked that nut pretty early on in the equation itself. And we’ve established rhythms across all of these different governments where our execution is pretty much like work at the moment. So, I think, we are in great standing.

One thing I’d like to add is also we discuss how these projects ramp up. It takes time. And we don’t include any of these projects into revenue forecasts until we know exactly when and how much. So, as we’re sort of signing them and doing the scope of work and getting started on the work, it’s not included in the forecast. It’s only when we know how much and when that it moves into the forecast.

Okay. Thank you for that additional color. And kind of spinning off that, do the contracts for these large deals provide upfront payments, so you can buy the required supplies and hardware and another kind of spin off of that for the ONE Amazon deal the funds raised so far, how much of that will get directed to Gorilla for technological development?

So yes and no, it depends on what these projects are. For example, the educational project in Southeast Asia is a multi-year, multi-phase smart education initiative. The first phase is only $460 million-plus out of the 10 phases which we talked about. The customer is not going to pay us an advanced payment. That is going to pay us on a monthly basis for the next 5 years. So think about it this way. Every year I complete the first phase, the next phase begins and the phase after that and so on and so forth. So, when you look at the project itself, by the time I’m on year 9, I’m already on year 14, because it will take me to deploy the project. By the time I’m on year 11, it’ll be year 16 and then you’ve got a 5-year maintenance project. So, you’re looking at a 20-year project and the customer is going to pay you monthly for the next 15 to 20 years. So no, those customers will not pay us in advance. But, if you’re looking at someone like the PEA project for example, they are going to pay us in advance but that’s not going to be enough for just buying all the equipment both hardware and software. I think it would be unrealistic for us to come back to the market and tell them that, yes, we’re going to get paid and all that is going to cover for the cost of the project itself, because the project is $1.8 billion and the customer decides to pay us 10% in advance, then it’s only $180 million. We would still need to raise substantial capital and that’s why when Bruce alluded to the fact that we are going to be working with the likes of the local institutions, whether it’s EIF, whether it’s the UKEF, whether it’s ADP, whether it’s local banks, CD, J.P. Morgan, and doesn’t matter who it is, we will try and raise money through effective means at that point of time. Does that answer your question?

Yeah. Thank you, and congrats on the quarter, I’ll return to the queue.

Thank you.

The next question comes from Brian Kinstlinger with Alliance Global Partners. Please go ahead.

Great. Thanks for taking my questions. First, Bruce, you mentioned 10% to 18% margin for 2025, was that EBITDA, was that net margin? I just didn’t catch that.

Net margin. 20% to 25% is the forecast for EBITDA margin, and net margin is a wider range, yeah.

Got it. Okay. And then, as it relates to the $400 million-plus smart education first phase of that contract, in December, I think you announced you were down selected as the provider, I kind of thought of that as an intend award. Has that contract been finalized? I’m confused by your previous answer. If it hasn’t been signed yet, what are the obstacles right now to getting that contract agreed upon?

Brian, if I may, there are no obstacles. The only issue being that we’re going through a very, very stringent PoC with a customer. The issue being that we’re talking about the customer jumped the gun. Okay. What he’s looking to do, he wants to sign the entire 10 faces with one party, which is us. The issue being that we have to make sure that the technical design, the specifications, the milestone based payment, the deployment, the software, the network, the integration timelines, the approvals, the stage deployments, and all of the technical audits need to be defined before we can put into the paper. The SOW alone, and Raj and I are working with this along with our team, is a little over 900 pages. By the time we can get this over the hurdle with these guys, it’s taking a much longer time than I’d anticipated. It was a simple $460 million contract. I think we would have signed it and we would have started moving forward. The problem we have today is that the customer now wants to actually move forward with the entire budget. And just FYI, the budgets for Phase 2 and Phase 3 have already been approved as well by the parliament.

So with the 900…

Yeah.

Yeah, you answered it. But I’m going to ask you a second with this large document, as well as the PoC, can you help frame for investors what a reasonable time frame is? Are we 6 months away from going through the PoC and getting that signed? Is it much shorter? Is it longer? Just help set expectations for investors if you could.

Absolutely. So Raj, I think you should take it since you’re very close to the project on the ground, if you want to?

No, absolutely. So, if I were to look into my crystal ball, I would say that the best guess estimate at the moment would be somewhere just south of 6 months. And that’s a good estimate for us to keep in mind and track. We are rapidly trying to influence the customer to get there even quicker, but that’s where I would say. Good news on this particular front is that while the paperwork is long and arduous, the proof of concept is actually progressing pretty well. We’ve finished a bunch of surveys over there. We’ve got some foundational systems already running. We’re just saying true to our ability to deliver value quickly. And I think that differentiation is actually helping us win the hearts of the customers even more if we can. So, all-in-all, it’s on the up and up.

Great. Thanks for those comments. If I can move to ONE Amazon, if I’m listening to your commentary accurately, there’s a lot that has to happen before you start generating revenue. I think we all should understand that. When 2 weeks ago, you come out with a press release that suggests $100 million has been raised, I think, or has been allocated for ONE Amazon on the technology side. What are you trying to communicate to the market? Because I don’t think that changed the timeframe. So help us understand of what you want to communicate the meaning to Gorilla in the near-term for that or long-term?

Yeah, definitely. I’ll take one half of that question. Raj, you may want to talk about the technology side of it once I’ve kind of addressed his question. So, Brian, the ONE Amazon project is pretty much on track. In fact, it’s ahead of track. Why? Because they have received commitments from a number of very, very large sovereign wealth funds and foundations and institution investors, who’ve come in and want to deploy capital. Now, as you know, Rodrigo Veloso is dynamic. He’s looking at raising anything between $100 billion to $750 billion over the course of the next 20 years so that he can help support the Amazon. Of course, being Brazilian, it’s very close to his heart. Now, what we have, when I said $100 million, it was basically the capital that was needed to initially run the proof of concept, and I’ll let Raj fill in once I’ve completed this. The proof of concept is basically to deploy it across a few hundred hectares to figure out the topological mapping to figure out whether we’re using LiDAR, whether we’re using biodegradable sensors, what kind of data are we going to generate, how do we clean up that data, how do we democratize the data, and I think you asked the question as to how much of that money is going to go into Gorilla. Now, as per the agreement we have with them, it’s between 25% and 30% is what we have agreed to for every $100 million that’s raised. But that said, the first $100 million, most of that, if not all of that, will go into the proof of concept to Gorilla directly as well. Because this is a very, very important proof of concept, because you’ve got all the other investors sitting on the sidelines waiting to see what comes out. Raj?

Yeah, thanks for clarifying that on the business side. From a technical perspective, I think, as Jay pointed out, we’ve actually made significant progress on that particular front. First of all, the core data analytics engine is something that we already have, which has been running for many governments on our cybersecurity infrastructure portfolio for almost 15 years now when it’s been growing from strength to strength. So, all we need to do now is to button up some additional sensors onto that particular pipeline. We have the system for functional end-to-end in our R&D labs, both in India and in Taiwan. And currently, what we’re really working towards is identifying the right mix of sensors for ground truth. And, we are also talking to a bunch of satellite imagery providers in order for us to figure out what the truth from the sky is going to be. So, there is an amalgamation of data points that we need to collect, synthesize, and summarize in order for our customers to kind of be able to digest the value behind the coins that are being created. But it’s something that the whole team at Gorilla is really excited about, and it’s full steam ahead from our perspective.

Okay. My last question is, is management still committed to reporting results on a quarterly basis going forward? Should we expect four separate earnings reports this year?

Absolutely, yes, Brian, we are.

Okay, thank you so much.

No, sure, but just FYI, Brian, we’ve actually built a very, very strong team, which is now going to be working in tandem on a quarterly basis. Bruce’s team, the finance team now spans across the globe. And, I think, we’re working tirelessly day in and day night. His team is going to be delivering on a quarterly basis. And, I think, we owe it to the market, but more importantly, we have to be transparent. I think we’re going to stick to our guns.

The next question comes from John Roy with Water Tower Research. Please go ahead.

Great. Thank you. I kind of wanted to step back a little bit. Certainly, every company on the planet is saying, we’re an AI company and we’re doing a lot in AI. Raj, I wanted you to give us some color about, what is different about the approach you’re taking or is it generating any barriers or kind of give us some more depth as to what exactly is AI about your product suite?

Thank you John for that question. I completely understand that we live in a very crowded space. I like simple analogies and the simplest way that I can put it is that we build AI that actually works where it matters. The net-net is that we are not trying to out GPT anyone. We are certainly not trying to chase academic benchmarks. Our focus is on real world impact and, more importantly, we focus on environments where traditional AI just doesn’t cut it like on the edge in smart cities and in secure and often offline deployments, right? We specialize in edge AI which is built from ground up and the idea is to run on constrained hardware and wherever there is real-time processing whether that’s on a camera pole, on a router in the field or a rugged device in the factory we are there and that is essentially where we focus on especially in areas where latency actually matters. And our strength is that we optimize for the edge. We don’t optimize for the cloud and this gives us a huge advantage in the market specifically in markets like public safety, transportation, critical infrastructure, places where you just can’t wait around on the cloud to pick. If you think about it from a smart city perspective, the most important aspect that we’ve been trying to convey through this last hour is that we’re not merely trying to do demos, right? We are actually powering actual infrastructure maybe traffic systems, access controls and cloud monitoring or environmental insights with regards to ONE Amazon. So, we’re actually working very closely with the governments, the integrators, in such a way that there is purposeful AI being developed to actually solve real world problems. So, the way I think about it is that Gorilla’s AI is built for the edge, it’s tested on the field and it’s scaled for real world, right? It’s not just smart, right? It’s practical and it’s delivering value today. And delivering value today in real time and ensuring that our customers, no matter who they are, governments or cities or enterprises, they see that return on investment in weeks, not in quarters, that’s always our goal. And, I think, our agility and the simplicity behind our AI solving very complex problems is what’s actually helping us leapfrog in the industry today.

Great. That’s good to hear. One of the other things that you guys have done is you set some pretty significant and transparent expectations for 2025 and 2026. And I heard one kind of milestone along the way, which is this 6-month signing coming up. I wonder what other kind of milestones might investors look for along the way to see that you are going to hit what you hopefully are going to hit in 2025 and 2026.

John, is that for me, Jay?

Yeah – or for Bruce.

Yeah. So as I mentioned, the biggest milestones that we would be focused on would be basically the contracts that we’ve mentioned, getting a more concrete precise idea of when the revenue is arriving and how much. The process is multiple steps. So you start with a MOU or some kind of earlier commercial agreement, then you move into scope of work, proof of concept, you iron out all the details, and then you move into a definitive contract. The definitive contract includes the milestones, the timing, the payment amounts, et cetera. So, I think that we have a very, very robust pipeline of qualified leads and also signed MOUs and work that’s in progress in terms of scope of work, et cetera. And I think it’s really just the passage of time and working closely with our clients to iron out, okay, this is exactly what we’re going to do when, and that’s what will get us to the right numbers and knowing when we will be achieving those numbers. But I think that in between the customers that we’re starting with and ramping up and also the business that we have in the backlog, I think that the forecast that we just set up that are quite achievable.

Right. Okay. So Bruce, could we expect to hear for updates to the backlog as you report quarterly going forward? Is that something you hopefully will do?

Yes, absolutely. As timelines get more precise, we are quite concerned on how we forecast. So, when I come out with guidance, it’s not me sticking my finger in the air, right? It’s me saying, okay, we’re very sure that these contracts are going to deliver this revenue on this day, this timeline. And that’s the only time that we start putting things into the guidance. So, as we get a much firmer idea, then we’ll be able to do that. But, the discussion about ONE Amazon that you heard, right, so there’s funding there from ONE Amazon. We know how much funding is there. We know that the timeline will take several months, but we know that, maybe in 2026, maybe in 2027, there is a decent chunk of revenue that will start to appear. It’s a similar situation within Thailand with the PEA, the smart electricity grid. We know that that’s a mammoth contract. We know that it takes time to get it right, from the customer side, from our side. So it could be that the revenue starts to flow in earnest in early 2026, late 2026. We just don’t know. And we’re not going to rush. We’re not going to over promise and under deliver. That’s not our style.

Great. And…

John, sorry, my apologies. Let me interrupt there. I also want to add something there, right? Let me be blunt. If someone believes that we get an AI powered smart grid or a sovereign digital infrastructure plan and that can be switched – flipped on like a light switch, then they do not understand the space we operate in. Okay. We’re building long-term high margin recurring revenues, which are deeply embedded infrastructures. So, the commercial flow basically, from my perspective is structured, predictable and layered. What we are trying to build, which I think, a lot of the market doesn’t still seem to understand, is that we are building our pipeline for the next 20 years. So, when I go and tell you that I am going to close my deal with the Ministry of Education project, we’re not just talking about rolling out the entire solution, design, architecture, and so on. We have to make sure that we have to understand their legacy systems as well, but that takes time. Secondly, when you look at projects, like for example, we’re working on airports across Latin America, we’re building smart cities in Santa Marta and Cartagena. We have a lot of political headwinds to deal with as well. It’s not just about coming in and dealing with the project. It’s also about creating the economic catapults. Now, you’re very familiar with our model as to how we move forward. We’re not just investing into a project. Gorilla is very unique, and that’s why today, this morning as well, when we were having a conversation with one of the states of the United States, the Secretary of State was like, how do you think you could benefit the local market? They’re not talking to us about projects. They’re talking to us…

Great. Perfectly. Very good. Thank you so much.

Thank you.

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

Well, first of all, thanks everybody for attending the earnings call. I am super excited about the future of Gorilla. And all I’m going to say is that we are building a digital backbone for the modern world. We would love for our investors to continue being with us, invest with us. And more importantly, we make sure that all of our employees and shareholders are yet to win. So thank you once again for being the backbone of our business, and me and my team will continue to work hard to make sure we deliver. Thank you, everyone.

This brings to a close today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.