Thank you for standing by. This is the conference operator. Welcome to the Gorilla Technology Group, Inc. Earnings Call for the First Half of 2025. Gorilla Technology Group is listed on NASDAQ under the ticker GRRR. [Operator Instructions] The conference is being recorded. [Operator Instructions] Before we begin, we will 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 our 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. For everyone who's dialed in, thank you very much for your support and attention. Gorilla Technology has entered the second half of 2025 with more momentum and firepower and more market reach than any other time in our history. Our first half delivered about $39.3 million in revenue, which is a 90-plus percent year-on-year increase. But at the same time, we did so by executing on very large complex projects in multiple geographies. This proves that our AI-driven security, intelligence infrastructure solutions are in demand at the highest scale and that we can deliver them consistently at scale. Now financially, we have also strengthened our position on every front. We have a rock-solid CFO, who's reduced debt to $18.1 million, improved our liquidity with about $26.1 million of cash and then further added another $105 million to our kit in July through an equity raise to accelerate growth. Now these are just not numbers on the page. These are what we call -- this is fuel for securing and delivering long-term high- value projects, which will define the future of Gorilla. Operationally, we've also signed 3 new projects over the last 30 days. I promised I was going to be announcing a lot more coming in the coming days in my previous call, and we will be making very many announcements shortly as well. Two projects were in Taiwan, one in the U.K. The one in the U.K. was a significant extension of the existing U.K. customer we have, but the 2 new projects in Taiwan were new customers. These were strategic footholds for us, not one- off wins alone. What it also does is it helps us strengthen our long-term recurring revenue base with new customers so that we can increase and expand further into these markets. Now profitability remains a core discipline for Gorilla. On a normalized basis, adjusted EBITDA and adjusted net income both came at about $5.7 million, demonstrating we're not just chasing top line growth. Now we are building a profitable, sustainable business. Our model now is structurally much stronger compared to where we were last year at same time, shifting from a very seasonal milestone heavy cycle to multiyear contracts that will deliver steady revenue alongside what we call milestone upsides going forward. We are no longer just a business of supplying technology. We are delivering national scale AI cybersecurity, data intelligence platforms that change how governments and enterprises operate. But more importantly, with the platform partnerships and global delivery capabilities we have now in place or which we have created and put in place, Gorilla is built to scale, and we're built to win and we're built to lead. I will pass it over to Bruce. Bruce?

Thank you, Jay, for the kind words, and thank you also for the overview. Jay gave you the headline financial numbers. What I wanted to do is to dive into a few items and really highlight certain things. So the first is, as Jay mentioned, the first half revenue surged to $39.3 million. That is obviously a great start, up 90% year-over-year. One of the things you might notice is that the gross margin is in the low 30s. This is skewed lower compared to last year because of the mix. Last year was just essentially service revenue, which was -- is higher margin. Nonetheless, we still maintain our full year forecast for gross margins in the 40% range, and that's given basically the mix that we see in the second half of the year. A couple of other things is you noticed that there are 2 one-off adjustments or losses that show up, and I wanted to explain those. So the first is a financing-related loss. This is primarily due to the exercise of warrants by warrant holders in the first half of the year. This is basically a pure accounting item. There's no cash impact, and that's essentially the loss or the difference between the exercise price of the warrants, which was $5.60 a share and the prevailing market price, which was higher. So we just -- we have to book that for accounting purposes as a loss. So there's no cash impact. There's no impact on the business at all. Actually, we were collecting cash from the warrant exercise. There's also FX-related losses. So as we note, this is due to the -- this is the lagged impact of the devaluation from the Egyptian pound in 2024. So what happens is there is certain work that was…

Absolutely. Let's move on to Q&A.

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

All right. Congrats on the strong growth this year so far.

Thank you, Mike.

Jay, maybe can you just highlight or summarize which customers or projects or regions were the main revenue drivers half of the year? And which do you expect to be kind of key to the second half of the year?

Absolutely. So the first half of the year, Mike, we have very actively worked on and in Taiwan. The second half of the year, it will be a majority of -- a lot of the revenue will be coming in from Taiwan, Thailand and Middle East. And for 2026, the mix is almost an even spread between the U.S., Southeast Asia.

Great. Great. So getting nice and diverse sources, it sounds like.

Yes. As we had promised a couple of years ago -- sorry, I apologize, we promised a couple of years ago to derisk our business, not just in terms of territories and geographies, but also in terms of business segments. So that's where we are today. And that we have managed to kind of derisk it.

And then on -- maybe just touch on 2 projects you've highlighted in the past, ONE AMAZON. Can you detail a little bit about when that's going to roll out, how you're going to roll it out in terms of the number of sensors and when? And just a little more clarity on that would be great.

Absolutely. This is going to be slightly long hold on -- horses there. Now for us it has been progressing very strongly, okay? In fact, it's been a real success story for us, even pre-implementation. Now the milestones we have, one will be the official showcase at the New York Climate Week in September of 2025. And that's where the world leaders are gathering and they'll be talking about the ONE AMAZON project. The second one will be the tokenization completion and launch at COP30. That will be in November of 2025 alongside the official release of the ONE AMAZON tokens as well. On the technology side, we already -- we've got our team in Taiwan and in India, working on all the sensor technology, whether it's field deployment, environmental monitoring, IoT devices, configuring them for forest health, biodiversity tracking and an anti- deforesting alerts. We've also now actively engaged on our POCs on the satellite mapping. So multilayer imaging, creating AI-based land use mapping operations, enabling real-time monitoring and verification. The Internet of Forest, which is the third part of our technology solution is providing the connectivity, the edge AI, the cloud analytics to capture and process environmental data at scale. We've already started working very closely with the university to democratize some of the data. I was in India until yesterday, just got back this morning. We are now signing up with a very large university, one of the top-tier universities in the country so that we can build the innovation lab and absolutely make sure that we are able to help build large language and small language models in the region. And then finally, we've also started on the cost per hectare analysis. The model is fully operational, where basically what we're doing is we're working to…

Yes. Excellent. Excellent. And I guess just last one for me. The Smart School program in Thailand, maybe can you provide a sort of quick update there? And once that starts getting deployed, what kind of revenue might you be able to see in the first year?

Sure. Mike, we are currently in very, very deep negotiations with the government. The project, as I mentioned previously, has already expanded in scope. It's not just the smart education, there is a smart cloud infrastructure as well as there is the database integration project, the AI database integration project as well at the same time. We are in active discussion both in terms of scoping with the customer and agreeing on some of the contractual terms as well. So I want to be a little careful so that I don't comment on any specific details such as the commercial model, delivery schedule and so on. But the size and scope of the project has only expanded, not reduced. When there's a formal contract and a public announcement, we will definitely share the details over the course of the next few weeks.

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

This is Kevin for Brian. Could you provide an update or a little bit more of an update on any of the large MOUs that you've discussed and the progress of signing contracts? And while you've had a few MOUs, is there one do you think is closest to getting signed? And if so, which one?

Sure. I mean, Brian, the Wan Hai Port in Taiwan and the ADE were both on the MOU phase. We closed them already. As you know, Wan Hai, we will be deploying our AI port logistics safety and operational efficiencies on the port over the next few months. On the ADE, that's a far more complex project. That will integrate our AI-based analytics to track and disrupt financial crime networks. It's the first of its kind, which we are building, especially for the blockchain platform. The remaining contracts we are working on currently are in the final stages, and we will announce once they are signed. We are on plan. And just to be blunt, closing multimillion multiyear AI infrastructure contracts with governments, especially, is not a same-day exercise. So the MOUs, which we talked about, we are at a very mature phase. I can give you an example for -- we talked about the project in Thailand previously, the one with the Thai Police. That project, we have actually deployed and completed the proof of concepts already. The customer is extremely happy with our results. And if anybody outside of the market today took some time to look, they would see actually our solutions running live in multiple locations, including Pattaya, Chiang Mai, Ayutthaya, Lopburi and so on and so forth. So the opportunity remains, and we are currently engaged once we converted these proof of concepts into contracts, these will turn into what we call broader national programs as well. And more importantly, we are still sticking to our commitment that this will turn out to be a $50 million to $60 million project. I hope that answers your question.

If I could add a couple of points as well. Kevin. Just to add 2 more things. So the first is that not all projects that Gorilla undertakes have the same life cycle. So some it goes through a very lengthy procedure of we discuss the initial terms, we sign an MOU, we go through a proof of concept that sometimes can take months to refine and execute properly. And then we expand that into a formal contract. So like the system that Jay was describing, -- some of them, however, it skips over some of those steps, and it just -- you start talking about an idea and it goes straight into the contracting phase. Some of the opportunities that we alluded to earlier in the call are like that. So there is no MOU that we skipped over that phase, and we're just talking about final signed contracts at the end of the day. The other thing I would note is that the time lines -- one of the reasons we're so cautious about how we forecast revenue, why I'm always talking about backlog instead of sort of our finger in the air forecast is because the time lines can shift, something that is a proof of concept can take longer, maybe it gets reworked. And like Jay mentioned, in a couple of projects, the scope has actually expanded, so we're happy to have the project take a little bit longer in exchange for a larger scope. But that just makes it very difficult to forecast properly, and that's why we err on the side of being conservative. So where I'm going with this is when we do MOUs, it's the start of a relationship. It's a relationship that takes time to cultivate and then to flourish as business, and we don't try to force it. We try to let it take its own time and focus on the business relationship. And then if it takes a little bit longer, we want to make sure that the market is not getting overly excited overly early. Instead, we message the market when it's mature.

Great. And then could you talk a little bit more about the primary uses of the capital raise? Will there be any significant increases in expenses that can help drive top line growth or near-term M&A opportunities? Or is it just to kind of have a solid cash balance that makes winning new contracts easier given your financial positioning?

I can take that, if you want, Bruce. We raised about $105 million, Brian, because we were moving forward on some very large projects. We want to make sure that we can hit our ambitious targets without -- and without the right capital, we're just not being realistic. I mean I'll give you an example, government asked us to put in a bond, a bid bond -- a cash-based bid bond for a very large project, which was -- that alone was like $20 million. So we don't want to get hamstrung. That's one. Secondly, we're not raising money for the sake of raising it. Every dollar we raised right now to date is tied to a very clear high-return opportunity. And whilst equity was the right move at the time, we always want to make sure that we are looking at debt and other strategic funding structures as well so that we can minimize dilution while maximizing growth. Now in terms of our growth, today, we are very actively engaged in, as you know, with CNS and CAN. That said, we are also actively engaged or looking at opportunities in India, currently, where we are looking at about 500 -- actually about between 750 to 2,000 people center to help grow very quickly. And we're also actively potentially pursuing an acquisition in the United States as well. Apart from that, all the projects which we are working on are pretty strategic. We have a whole mix of new R&D products that are coming in. So we will be investing some of the investments into our SD-WAN, which is our Intelligent Network Director product. We're working very closely with NVIDIA. We're building quite a number of -- we're co-engineering a number of these solutions and for the ONE AMAZON as well. And so you will see quite a few developments over the next few months.

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

Great. First of all, congratulations on a great first half. I wanted to ask about gross margins. Obviously, they tend to be down. Bruce, maybe you can give us some color on when that might stabilize in the future? Or is that unlikely?

Well, first of all, the gross margins, as I mentioned, in the first half of last year and the first half of this year is influenced really by the mix -- of the revenue mix. So last year, we had a couple of large projects in Taiwan and the Middle East, which were really primarily service and software, so higher margin, whereas in the first half of this year, there were significantly more hardware deliveries in that mix, which as part of filling one contract, which took the margins down. I would say that for the year, we expect the margins to move up towards the target that we announced given the mix. So as Jay was talking about with some of the contracts that we have announced and are working on. So in the Middle East, in Taiwan and Thailand, et cetera, other places, we expect that mix to bring it to 40% gross margin for the year and then looking forward, we expect, given the current contract mix, we expect a similar margin profile in the future for the full year. Given that these are governments, the timing can kind of shift around, the timing of the recognition of revenue for hardware or for services can move around. So any one quarter might be volatile. But over the full year, they should be stabilized and hopefully, over the next few years, drifting up. Does that help?

No, that definitely help. No, Go ahead, Jay.

Sorry, just to add to that, I think Bruce made a very valid point, right? We've already moved from a very lumpy milestone-driven revenue model to a more predictable model. If you look at the last 2 quarters and the next 2 quarters, it will be more predictable. But more importantly, what we are trying to do is we're trying to move away from these lumpy projects itself to long-term multiyear sustainable revenues, which means we're signing multiyear projects. Now what will happen over a period of time, where we're trading our ship right now, we will see the effect of that towards the latter half of this year or latter quarter of this year and the first 2 quarters of next year. Whilst there will be some revenue spikes and some of the spikes in gross margins and so over a period of time, what you need to look at is the yearly number at the end of the day. The yearly number will be much more managed, less volatile, and we will have more visibility with a much more stronger baseline for growth, and we'll be capturing all the upside from all these wins as well at the same time. So just to give you an example, the projects we're talking about in Southeast Asia, in Thailand, we've got projects in Singapore, got projects in Jakarta, Malaysia and in Taiwan. These are all 3-, 5-, 8-year contracts. And these are not just maintenance contracts. These are proper long-term multiyear recurring contracts. That will allow us to -- and those will be more stable as opposed to lumpy as well. Just wanted to add that there.

That's really helpful. And one quick question on your U.S. efforts. I know you were talking about possible acquisition. Are you still working with AECOM significantly in the U.S.

Yes, yes, we are. I mean, for us, it's AECOM, Cisco, ONE AMAZON, of course, which is now moving its tokenization strategy to the United States just FYI, will be amazing. But more importantly, we will also be working very closely with the likes of HPE, whom we signed a global OEM relationship with and with NVIDIA in the near future as well.

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

Thank you very much. Some questions which you probably need answering, but I'm happy to respond to people who are sending us messages at any given point of time. What I wanted to let people know is that our business is moving forward in what we call as real- world implementation. We are managing country risk, sovereign risk, procurement risk, implementation risk and making sure that we can get paid on time and can deliver on time. That is actually something I think most of you have seen today that our customers are paying us. They're not just holding their money back. Our largest customer has already paid us this quarter, as you've seen from the press release this morning. But what we are making sure also is that we reduce our overall accounts receivable and make sure that we're able to run a complex global organization. For a company of our size, it's very unique that we are positioned in so many different countries. But at the same time, we also want to make sure that our cash conversion stays on the money, no pun intended. Ensuring payments flowing in line with the project milestones is very essential for us for maintaining liquidity and funding expansion. What we are doing is that we are having a multi-sourcing, multi-localization procurement program. But at the same time, we're making sure that strict payment protection and contractual safeguards are also put in place. I mean, guys, we're dealing with government. It always slips. So we want to make sure that before we make any major capital outlays, we ensure that we are protected and ensure our cash flow. But the reality is, we all know that sometimes executions can slip. We also know that design of our contracts and some of the operational plans to take those risks off the table before they become a problem. But what we are doing is we're still delivering growth in a very volatile global market today. And I would really appreciate all your patience, and I'm really thankful for everyone being very supportive of Gorilla. Thank you very much indeed.

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