Neo-Concept International Group Holdings Limited Q4 FY2025 earnings call

• Q4 was highest billing quarter on record, 19 consecutive quarters of LTM revenue growth. Full-year revenue beat guidance. - Strong cash collection in Q4 with accounts receivable and contract assets declining. No bad debt expense in full year, receivables aging quality improved. - Net dollar retention and gross dollar retention reflect strong customer trust. - G&A expenses elevated due to headcount and geographic expansion, but expecting operating leverage as revenue scales. - AI seen as potential tailwind with productivity gains and increased demand. - Geopolitical conflict in Middle East not materially impacting operations as Saudi fiscal position remains stable and Vision 2030 continues.

Q4 revenue was $23.9 million, up 38.9% YOY. Full-year 2025 revenue was $83.4 million, a $5.4 million beat on guidance of $78 million. Q4 operating expenses were 22.9% of revenue, with G&A at 16% and sales & marketing at 6.9%. Q4 adjusted EBITDA was $3.8 million (15.8% margin), full-year adjusted EBITDA was $11.9 million (14.3% margin). Net dollar retention for 2025 was 134.7%, gross dollar retention was 99.3%. About 71% of revenue came from top five customers. Incremental revenues: ~$19.9 million from existing customers expanding scope, ~$7.7 million from new customers.

• Revenue guidance for 2026 is above $90 million, anchored in contract backlog and expected renewals. - Adjusted EBITDA guidance for 2026 is 13% - 16% margin, recognizing Q1 slowdown due to Ramadan and Eid, but expecting stronger back half. - $30 million of revenue expected from renewals and expansions outside current backlog.

• Geopolitical conflict in Middle East could potentially impact operating environment, but currently no material impact seen. - Foreign exchange volatility impacts net income. - Double taxation in Canada and Saudi led to high effective tax rate in 2025, ongoing tax restructuring needed.

Q: How much of the $30 million in revenue guidance is from existing clients?

A: It's from renewals and expansions expected from existing clients.

Q: Was the change in AR due to credit issues?

A: No, it's a billing timing issue due to customers wanting to reduce administrative burden.

Q: Thoughts on Vision 2030 shift?

A: Positive as it focuses on technology digital transformation.

Q: When will contract assets normalize?

A: It's an invoice timing issue, not a credit issue, and will normalize as invoicing cycles adjust.

Q: When might share buybacks happen?

A: When cash flow is consistent enough to fund growth and working capital, will update when developed.

Q: How soft is Q1 expected to be?

A: Closer to Q3 2025.

Q: How will taxes impact future?

A: Restructuring to have earnings taxed in one jurisdiction to reduce burden.

Q: Impact of Iran war?

A: No material impact seen on operations.