Gorilla Technology Group Inc. (GRRR) Earnings Call Transcript & Summary

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. [Operator Instructions] And 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 under pursuant -- made 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 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; Bruce Bower, Interim Chief Financial Officer; and Dr. Raj Natarajan, Chief Technology Officer. Please go ahead.

Thank you very much, Ayesha. 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 has not only endured, 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, and we had limited global reach, an overcomplicated capital structure and a business that was technically promising, but commercially constrained as well at the same time. 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. Now 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 $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 plus million, outperforming estimates by a little over 70% plus. And that shows operational efficiency and a scalable business model. But more importantly, if you look at our operating income, excluding exceptional items, we climbed to a little over $19 million. That exceeded the guidance by well over 40%, highlighting also robust performance across the business. But what was also very notable to learn, which I'm sure the market has already realized, is that we beat market expectations on adjusted EPS by a little over 470%, reflecting our strong underlying profitability of the business. Now these are not just paper gains. These are hard earned results, delivering while executing across 5 different continents, securing sovereign level infrastructure projects and scaling long-term recurring revenue streams. And yet here is the question we keep hearing, especially from skeptics and other naysayers, if I may. How is Gorilla signing multibillion dollar deals? How are we building a $6 billion pipeline? Is that even real? These are questions I've been faced on daily basis. Now let me be clear. We're not out there cold pitching. These are inbound opportunities that are coming to us because the market is finally catching up to what we have built. Whether it's governments, strategic funds, global partners, they're seeking out to lead their national digital transformation programs, and they're seeking us. When you deliver on the ground, like what we've done in Taiwan, Thailand, Latin America, United Kingdom, who are troubles. When you're recognized by someone like Global Edge Fund as the exclusive AI and digital infrastructure partner, door is open. When a major platform such as ONE AMAZON selects Gorilla AI stack to support their mission critical operations to create a tokenized nature capital, you do not have to convince anyone that we're real. The work speaks for itself. So yes, we have nearly $2 billion plus in signed contracts, or contracts won to-date. These are not theoretical. They are structured commercial agreements with detailed scope, phased delivery schedules and monetization milestones. And the remaining $4.6 billion pipeline, it's not fluff. It includes late-stage contracts, formal MOUs transitioning into final terms, and more importantly, government-backed frameworks with long-term commercial scope. Now, I want to address a very, very common misunderstanding. Just because an MOU is signed, or even a contract is secured, it does not mean the revenue falls from the tree the next day. This is not a plug and play. We're not selling prepackaged software over the checkout counter, and we're definitely not selling taco trucks. What we are doing is far more ambitious, and we are far more complex. Before the first dollar is earned, I need to educate everybody as to how this goes by, things we need to do. We must, first of all, understand the client's national priorities, map the real-world complexity of legacy infrastructure, scope and architect future state environments, become what we call build trust as a strategic partner, not just as a transactional vendor, engage in solution design, proof-of-concept validation, architecture planning, compliance alignment, and finally, most importantly, we have to work with multiple global partners often under sovereign level scrutiny. Only then do we move into delivery. And delivery at a national scale takes time. Why? Because when you're digitizing an energy grid, or reimagining national cybersecurity infrastructure or building the smart ecosystem across thousands of institutions, speed without structure is failure. So when I say we are signing long-term deals, it's not to impress the market today. It is to build a 5, 10, 15, 20, 30-year revenue base so that when Bruce, Raj and I can stand in front of the market, our investors and analysts will say with conviction, "We know what we're delivering, we know where the revenue is coming from, and more importantly, we're building something that lasts." Now this is not just a business growth we're talking about, this is category leadership. And finally, before I hand it over, let me say this. We're just getting started, not just globally, but also in the United States. We're expanding very rapidly. And this is not just about business development, but it's also about engineering, policy engagement and partnerships that will place Gorilla at the heart of the AI infrastructure narrative in the United States. Now this is not speculative tech hype. This is infrastructure policy, AI and execution at scale. But more importantly, as we now take you through our business strategy, technology road map and financials, I ask you to look beyond the noise, see Gorilla for what it is. It's a company with a proven model, real profitability, global reach and a pipeline that is not built on hype, but built on delivery, trust and unmatched execution capability. So here are a few things I want to leave you with. We're not here to compete for space, but we're here to define, define that particular space or define it, as if I may say it. We're not following a category, but we're trying to build one. But more importantly, the market is just beginning to realize that. Now, I will hand it over to Bruce. Bruce, do you want to take them through the numbers behind that momentum? Thank you.

Yes, 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 2. 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 in 2023, and also some onboarding of new clients or new contracts from repeat clients. The gross profit was 49.96%. This was 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 last year in 2024. That reflects a rightsizing of the business, some structured layoff 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. So in the second half of this -- of last year and then in the beginning of this year, we have been building up in the finance team, technology team operations. Also on the cost side, we saw a foreign exchange loss of about $27.5 million. That is primarily due to the impact of the one-off devaluation that we saw in Egypt in March of 2024. Now this is a provision that we've taken to be sort of max conservative. There is the potential for a reversal, or a decrease in the provision as first of all the exchange rate could settle down or reverse. And secondly, as there is the potential for compensation from clients for exchange rate, some of the exchange rate losses. So for now, we have booked the maximum provision and we await further developments. The other big impact here, as we mentioned at the bottom of the press release, was in terms of the conversion of the preferred shares and the exercise of the warrants. So basically this is a non-cash loss of $59.54 million. I want to emphasize that this is on paper, right? It doesn't change any of the operating results and it doesn't change any of the cash items. But it is a charge that we have to take because it reflects the difference between the prevailing share price and either the exercise price of the warrants or the conversion price of the preferred shares. So that is a charge that we took, but also that is a charge that we won't take in the future because all of the preferred shares were converted into ordinary shares. And then, almost all of the warrants were converted into ordinary shares last year. And then, we have a very small amount of warrants to be -- that we hope will be converted this year. In terms of -- so that was a brief tour of the profit and loss. In terms of the cash flow, so last year, we saw a significant outflow from operations -- of cash from operations of $34 million, that was financed by basically raising money from the market in the first part of 2024. That build -- sorry, that decrease in cash flow was financed -- was due to a build in the contract assets, i.e., unbilled revenue. This is basically because we performed work and then as we performed work and recognized revenue, we waited to bill it. We believe that the unbilled revenue has peaked at the end of 2024 because we're billing actively to our main customers now in terms of sending the invoices and moving it into the accounts receivable column. We also expect that this year will be cash flow positive from operations because of that, right? The unbilled revenue won't expand dramatically. We're sending bills to customers and collecting them, or awaiting collection in the next week or 2. In terms of where we are with the balance sheet, the unrestricted cash balance is $21.7 million at the end of the year. That is up from $5.3 million at the end of 2023. That's obviously a dramatic improvement that came partly from the reduction in the restricted cash balance. So restricted cash ended the year at $15.77 million, that was down from $41.47 million. That basically is because we had several guarantees to clients where we delivered a certain milestone. We reached a certain milestone, and we were able to unlock those guarantees and turn them from restricted cash into unrestricted cash. And some of that cash was put to work in -- either in some hardware prepayments or in other uses for the business. So also part of that freeing up of cash, part of that increase in cash was used to pay down debt. So we finished at $21.42 million, down from $25.09 million of debt. So that is improvement and we expect further improvement along those lines. So to come to the shareholder structure as of today. So I mentioned this earlier, but there are no preferred shares. Those were all converted into ordinary shares in 2024. We have about 700,000 shares that can be issued due to private warrants, private warrants whose strike price is $5.90. And then we have the publicly traded warrants, GRRRW, which are about 958,000 potential shares. Also that means that we reduced the fully diluted share count from the middle of last year until now by about 750,000 shares. So we've tried to be very -- keep a lid on dilution. Coming to a couple of other points for 2024. So as I mentioned, we will announce the full financials. It will be a filing with the SEC. We expect to see improvements in the language about material weaknesses and internal controls. Obviously I don't want to front-run the exact statement, but we have made a lot of progress in the year in terms of internal controls, operations and Sarbanes-Oxley compliance. So we expect to see a much better statement about internal controls. We also expect to announce that we are Sarbanes-Oxley compliant. And actually that's 2 years ahead of the requirement that The Exchange has for us. I want to turn now to the guidance for 2025. So as we mentioned earlier in the year, the guidance is $100 million to $110 million of revenue. The gross margins are 40% to 50%, that's a wide range. It should be closer to the top end of the range than the bottom end of the range. And then we see 20% to 25% EBITDA margins and net margin of 10% to 18%. Again, there's a wide range because of certain -- It depends basically where we book the revenue for tax purposes. We have a lot of confidence in those predictions as well because the backlog at the moment is $93 million. So to expand on what Jay was talking about, a backlog for us means revenue where the contract is signed. It is either in the process of being delivered, or it is booked to be delivered in 2025. So that $93 million is what -- is just what's attributable to 2025. We also expect a ramp up in some of the projects that we have discussed before. So for instance, our work with the Thai Tourist Police, our work in Santa Marta and some of the other smart cities in Latin America, which will take us beyond the backlog figure of $93 million into our range of $100 million to $110 million. So that's how we get there. It's -- I don't yet have the exact amounts and timing for those, but we know that those projects will generate revenue this year. And together, they will get us to the $100 million to $110 million guidance. We anticipate that, I should say. Also we anticipate cash from operations to be positive due to further reductions in restricted cash collections from customers and also because as of now we don't expect significant investment. Last but not least is talking about debt. We own a property in Taipei, which is on the market. The plan is very much that we will repay our debt load with the proceeds from the sale of that property. That will also free up about $5.5 million of cash that is restricted because it is pledged as collateral to -- against the loan. And last but not least, I want to talk a little bit about 2026. So as Jay mentioned, a lot of the MOUs, contracts, et cetera, that we have announced to the market, have a revenue impact where we're still figuring out when exactly it starts. It's not press a button and it starts. It could take 6 months to start, it could take 9 months, it could take 12 months. But nonetheless, we are confident that revenues will be in 2026 higher than our guidance for 2025. We also have a backlog of $67 million, which is attributable just to 2026. So this is contracts that we already are working on, where looking forward, we can see that we'll deliver this revenue in 2026. We also have funding for our current project portfolio. Growing the business requires putting capital to work in different projects and to service different contracts. If we get more contracts or they become sooner-dated, I guess would be the right way to say it, then we will seek to utilize, first, our cash balance; secondly, debt in the form of bank debt, also project level finance and last would be equity. So if we had an amazing run of converting projects into signed contracts that would be operational this year, then there's a chance we would raise equity. But of course, we would only do that if it was accretive for shareholders by delivering EBITDA and revenue growth and to fund exciting projects. Otherwise, we'll stick with the current project portfolio, and then we will fund it with our own resources. So that is all for me. With that, I'd like to turn it over to Jay and to Raj again.

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 incompatibilities, 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 didn'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. We engineer 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. Through 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.

[Operator Instructions] The first question comes from Mike Latimore with Northland Securities.

This is Keaton Schuelke on from Mike. So looking at your guidance, I was wondering how much does the Egypt project represent of this year's revenue guidance.

Keaton, 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 '22. '23, that was a big part of our revenue. '24, we've 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. '25, 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, it'll be well under 15%. So our aim is to make sure that by the time we're in '26 and early '27, we are going to have no client greater than 10% to 15%.

Okay. And then, what are some key steps needed before you start recognizing material revenue on ONE AMAZON 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 customer's requirements. So whether it's the solution design, whether it's the architecture planning, whether it's the compliance, whether it's working with multiple partners, whether it's 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 building and scaling up 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 are about 150 to 200 people, today we are 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 2 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?

I'll echo what you just said, Jay. 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 a clockwork 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 forecasts. It's only when we know how much and when that it moves into the forecast.

Okay. And kind of spinning off that, do these -- 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 multiyear, multiphase 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 advance payment. That he's 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, another phase stays 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 -- deploy the project. By the time I'm in 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 U.K. EF, whether it's ADP, whether it's local banks, Citi, JPMorgan, 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?

Yes.

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

Great. First, Bruce, you mentioned an 10% to 18% margin for 2025. Was that EBITDA? Was that net margin? I just -- I didn't catch that.

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

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 intent to award. Has that contract been finalized? I'm confused by your answer -- 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 the 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 phases 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 time lines, the approvals, the stage deployments and all of the technical audits need to be defined before we can put ink to 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. And 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, yes.

Yes, that answers it. But I'm going to ask a second if I could, 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 finished a bunch of surveys over there. We've got some foundational systems already running. We're just staying 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. 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. But when 2 weeks ago you come out with a press release that suggests $100 million has been raised, I think -- or 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 time frame. So help us understand of what you want to communicate the meaning to Gorilla in the near-term for that or long-term.

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, is ahead of track. Why? Because they have received commitments from a number of very, very large sovereign wealth funds and foundations and institutional 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 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. It take us quite -- how do we democratize the data. And I think you asked the question, 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?

Yes, 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. And 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 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 4 separate earnings reports this year?

Absolutely, yes, Brian, we are.

Okay.

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.

Great. 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 wonder if you could give us some color about what is different about the approach you're taking? 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 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 think. And 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 that 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 '25 and '26. And I heard one kind of milestone along the way, which is a 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 '25 and '26?

John? Is that for me, Jay?

Yes. Or for Bruce.

Okay, I can take it. So I'll go for it, yes. 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. We -- the process is multiple steps. So you start with an 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 forecasts that we just set out are quite achievable.

Right. Okay. So Bruce, should 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 things -- as time lines get more precise, we are quite conservative 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 time line. 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 time line will take several months. But we know that maybe in '26, maybe in '27, there is a decent chunk of revenue that will start to appear. It's a similar situation with -- in 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 2020 -- 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 maybe...

Yes. John, sorry, my apologies. Let me interrupt there.

No problem.

So I 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. We're building long-term, high-margin recurring revenues, which are deeply embedded infrastructure. 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 in 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 about economic development of these regions. Now what we are trying to do is we're trying to make sure that we are able to sustain our growth, but at the same time make sure that we focused on key KPIs. Okay? Now when we track execution across -- we track 4 different core dimensions. Whether it's revenue conversion, we focus on delivery milestones, cash flow and client satisfaction. So we monitor revenue velocity, we make sure how do we measure, how quickly are the contracts signed. But what is our active billing look like and more importantly, what is our pipeline conversion. That's number one. Number two, we make sure that every single project, whether it's a POC, whether it's high-level integration, testing and so on, we track project delivery milestones down to the country level, to the client level. Then comes the responsibility falls on Bruce and his team on the financial side, where we look at cash collection cycle, what kind of payment realization needs to be happening, what is closely monitored, we have teams and so on and so forth, right? And more importantly, when you realize that this is not a sprint, it's a marathon, that means we have to now operate across multiple countries, multiple jurisdictions, multiple political and tribal issues we have to work with. And then finally, client success. Every single customer has a different client satisfaction indicator. So we have to make sure that we are working very closely with them. So to do that today, I'm also -- I think one of the things which we haven't mentioned at the market is that we internally set what we call a strategic office of impact group led by a lady called Deborah Hudson who's been hired recently. That allows us to track all these KPIs very, very effective, and make sure that when we deliver these numbers to the market and to the analysts, we make sure that they are spick and span to the last T.

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. We -- 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 here to win. So thank you once again for being the backbone of our business. And I will continue to work -- 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.