Gorilla Technology Group Inc. Q1 FY2026 earnings call

### Company Transition and Core Operating Updates - The company has completed its turnaround phase and officially entered a scaling phase for its new AI infrastructure business. Scaling creates near-term P&L noise as the company invests in land, power, GPUs, hardware, and personnel ahead of full revenue generation. - Q1 2026 total revenue grew 55% YoY to $28.2 million, and operating cash flow turned positive to $6.6 million, a $17.3 million (162%) improvement from the $10.7 million operating cash outflow in Q1 2025. - End-of-quarter cash and cash equivalents totaled $98.4 million, up 373% YoY, with restricted cash (from advance payment guarantees) reduced from over $50 million to just $45,000, and total debt of $13.2 million resulting in a strong net cash position. - The reported $41.1 million operating loss is heavily distorted by non-recurring non-cash items: $20.9 million in multi-year deferred stock-based compensation recognized entirely in Q1, and $18.9 million in foreign exchange losses from adverse currency movements in Taiwan dollar, Thai baht, and Egyptian pound. Excluding these items, underlying operating loss was only ~$1.2 million. - SG&A (other operating expenses) grew only 16% YoY, showing early operating leverage from prior year investments in personnel and infrastructure.

### AI Infrastructure Deployment Progress - In India: The IOTA AI infrastructure collaboration contract has kicked off; first GPU hardware deliveries are scheduled for end of July 2026, with second phase deliveries planned for end of August, and full deployment completed by November 2026, with revenue starting to hit books in September 2026. - In Thailand: The 200 megawatt AI data center campus in Korat has secured strategic land and power planning; build-out is scheduled to start in Q3-Q4 2026, with additional opportunities being pursued in Rayong. - Across Southeast Asia: Co-location facilities have been secured in Jakarta and Batam, with the Neutra DC co-location facility revenue starting in mid-Q3/Q4 2026. Management targets over 500 megawatts of total AI infrastructure capacity by the end of 2027 (up from the prior 2028 target), with inbound interest for up to 2 gigawatts of total capacity across the region. - The company differentiates from pure-play data center providers by offering an integrated full-stack offering combining infrastructure with security/network intelligence, monitoring, and operational management, which meets customer demand for sovereign, secure, and trusted AI compute.

### Organizational and Financial Updates - The company has added 100+ full-time employees and 200+ contractors across delivery, engineering, operations, and compliance to build execution capacity for $5+ billion in signed backlog. Additional hiring is planned to support 500 megawatts of capacity build-out. - Project financing for AI infrastructure projects is progressing well, with multiple term sheets received and currently in documentation; project-level non-recourse SPV structures are being used to avoid reliance on corporate balance sheet funding. The company currently holds over $5 billion in signed backlog, with an additional $5+ billion in active negotiations.

Gorilla Technology Group operates two core business segments: the legacy security intelligence/network intelligence/smart city product segment, and the new AI/AI infrastructure/data center segment. In Q1 2026, total company revenue was $28.2 million, representing 55% year-over-year growth. For full year 2026 guidance, management expects 60-70% of total revenue will come from the new AI infrastructure/data center segment, with the remaining 30-40% coming from the legacy security and smart city segment. The legacy segment continues to grow and remains profitable, while the new AI-focused segment has higher gross margins (75-80% for GPU as a service and managed implementations) that will lift full-year company gross margins over the 2025 low-30% level. Q1 2026 gross margin was temporarily depressed by a higher mix of hardware sales and aggressive pricing to secure new customers.

- Full year 2026 revenue guidance was raised to a range of $160 million to $200 million, up from the prior guidance range with a lower bound of $137 million. The upper bound of $200 million remains conservative to account for potential delivery delays that could push revenue into 2027. - The upward revision to the lower bound reflects better-than-expected contracted revenue for Q2 and Q3 2026, and on-schedule delivery timelines for the IOTA and co-location projects. - 60-70% of 2026 guided revenue will come from the new AI infrastructure and data center business. - Management expects adjusted EBITDA margin to expand to 25-30%+ in 2026, up from ~19.5% in 2025, driven by higher-margin AI infrastructure revenue. - The company targets $500 million in annual revenue in 2027, with a credible path to 100-150 megawatts of deployed AI capacity by the end of 2026, and 500 megawatts by the end of 2027.

- Global supply chain constraints for memory, storage, and CPUs have already created minor delays for GPU server deployments, even as GPU availability from NVIDIA has not been a major issue to date. Customer demand for next-generation NVIDIA Vera Rubin GPUs can also alter project timelines as customers shift to newer hardware. - Adverse currency movements across emerging market currencies (Taiwan dollar, Thai baht, Egyptian pound) created large non-operating FX losses in Q1; while currencies have stabilized in Q2, future geopolitical or macroeconomic volatility could lead to additional non-operating losses. - Large-scale AI infrastructure projects require significant capital, and failure to secure long-term project financing on acceptable terms could slow the company's scaling trajectory. - Scaling the business from a ~$100 million annual revenue company to $500 million requires significant additional hiring and operational build-out; failure to hire and retain sufficient qualified personnel could impact project delivery timelines.

Q: What is the timeline for revenue recognition across the company's announced HPC/AI projects, including the Thailand 200MW campus, India IOTA project, and Southeast Asian co-location facilities? / A: The Korat Thailand campus build-out is scheduled to start in Q3-Q4 2026. The India IOTA first phase GPU delivery is scheduled for end of July 2026, with second phase delivery at the end of August, and full deployment by November 2026, so first phase revenue will hit the books starting in September 2026. The new Neutra DC co-location facility in Southeast Asia will start generating revenue in mid-Q3 or Q4 2026, with GPU delivery scheduled for August-September 2026.

Q: What drove the upward revision to 2026 revenue guidance, how much of 2026 guidance will be AI-related, and what is the expected gross margin trend? / A: Guidance was raised because contracted revenue for Q2 and Q3 is higher than originally planned, and project timelines are on track. The 200 million upper bound remains conservative to account for potential delivery delays that push revenue into 2027. 60-70% of 2026 revenue will come from AI infrastructure, which carries 75-80% gross margins, so full-year company gross margins will rise meaningfully above 2025's low 30% level, with a clearer guidance range to be provided alongside future guidance updates. Q1 2026 gross margin was depressed by temporary front-loaded mobilization costs and a higher mix of hardware sales.

Q: What is the company's approach to funding large-scale AI infrastructure projects, and how does it plan to avoid diluting shareholders? / A: Large AI infrastructure projects require significant capital (a 1,000 server order can cost over $500 million just for GPU servers), so the company is using a multi-layered non-dilutive capital strategy. To date, the build-out has not relied on dilutive equity. The company has received term sheets for $500 million to $1 billion in vendor financing, and $300 million to over $800 million in non-recourse project-level debt structured through SPVs, which are backed by project cash flows rather than the corporate balance sheet. The company is also building a strategic funding platform Gorilla Capital to attract long-duration institutional capital matching the 7-10 year asset life of AI infrastructure. The company prioritizes protecting shareholder value while scaling to match the large $5+ billion signed opportunity pipeline.

Q: What is the company's target for AI capacity by the end of 2026, and what are the key supply chain risks? / A: The company targets 100 to 150 megawatts of deployed AI capacity by the end of 2026, with 500 megawatts completed by the end of 2027, with inbound interest for up to 2 gigawatts of total capacity. GPU availability from NVIDIA has not been a major issue to date, but current market shortages of memory, storage, and CPUs have created minor delivery delays. The company works closely with key partner Supermicro to mitigate these supply chain constraints, and also manages customer demand for new next-generation GPUs to avoid unplanned project scope changes.