Gorilla Technology Group Inc. Q3 FY2025 earnings call

Key Points

• Q3 was the strongest quarter in Gorilla's history with revenue ahead of expectations, operating profit firmly positive, and bottom line at breakeven.
• Built a cash position over $119 million, reduced debt to $15.1 million, and advanced AI infrastructure programs across Southeast Asia, Latin America, and the Middle East, securing multibillion-dollar projects.
• 2025 guidance: revenue in the range of $100 million to $110 million, EBITDA margins in the 20% plus range, and net income margins in the 15% to 20% range.
• 2026 guidance: $137 million to $200 million in revenue, based on contractual backlog and a large signed contract with FREYR. Aim to have over 50% of revenue from Southeast Asia next year, diversifying the business and improving client quality.
• Q3 actuals outperformed analyst models: revenue, gross profit, operating income, adjusted EBITDA, and adjusted net income all exceeded expectations, and debt was lower than analyst implied.

In Q3, Gorilla's revenue was a highlight. The consensus analyst model was roughly $26 million to $26.2 million, but actuals were $26.5 million. Gross profit estimate was $9.5 million, but Gorilla did about $9.9 million. Operating income was expected to be minus $6 million, but Gorilla achieved a positive of $4.4 million. Adjusted EBITDA was estimated at $5.6 million, but Gorilla did $6.8 million. Adjusted net income was about $3.5 million, and Gorilla completed the quarter at $6 million. EPS non-IFRS was expected to be certain values, and Gorilla came in line. EPS IFRS went from expected negative 0.8 to breakeven. Analyst implied debt was about $21 million, but Gorilla's actual debt was $15.1 million. The cash position was strong with over $119 million in cash, $109 million of unrestricted free cash, and net cash position of $106 million.

2025 Guidance

• Revenue: $100 million to $110 million.
• EBITDA margins: 20% plus range.
• Net income margins: 15% to 20% range.

2026 Guidance

• Revenue range: $137 million to $200 million, based on contractual backlog and the large signed contract with FREYR. The first phase of the Southeast Asia data center project contributes $100 million from 2026 to 2028. There is also a strong pipeline, but guidance is conservative due to factors like material shortages and delivery timelines. There's potential upside from additional AI data center phases and new sovereign mandates.

• Material shortages: Semiconductors, networking equipment, etc., may have longer lead times.
• Delivery timelines: Customer procurement cycles, project phasing, and geopolitical sensitivities can shift timelines.
• Regulatory and compliance approvals: Uncertainties in obtaining necessary approvals.

Q: For the guidance in '26, what are the factors that get you to the lower and high end of the guidance?

A: The 2026 guidance of $137 million to $200 million is based on contracted backlog with clear delivery milestones and the first phase of the Southeast Asia data center project. The lower end is the base case assumption, and the higher end could come from additional deployments in the data center contract, winning more government contracts, and MOUs turning into definite amounts. Risks like material shortages and timeline changes affect the lower end, while upside from more deployments and new mandates affects the higher end.

Q: How should investors think about the unified flywheel Gorilla is building and its strategic role in the next wave of AI compute infrastructure?

A: Gorilla is not playing in one corner of AI infrastructure. It's a sovereign grade AI operator, designing, building, and operating AI data centers, providing GPU as a service using NVIDIA-based platforms with partners. Data centers drive GPU demand, which pulls through software, locking in longer and deeper national engagement, forming a 3-pronged flywheel approach.