Q4 2025 Pollard Banknote Ltd Earnings Call

March 11, 2026

Speaker #1: Certain material factors or assumptions are applied in making forward looking statements and actual results may differ materially from those expressed or implied in such statements .

Speaker #1: The risk factors that may affect the results are detailed in Pollard's annual Information form and other periodic filings , and registration statements , and you can access these documents at Cedar plus that found at Cedar Plus I'd like to remind everyone that this conference call is being recorded today , Wednesday , March 11th , 2026 .

Speaker #1: And I would like to interest introduce Mr. Doug Pollard , Co-Chief Executive Officer of Pollard Banknote limited . Please go ahead , sir .

Operator: Doug Pollard, Co-Chief Executive Officer of Pollard Banknote Limited. Please go ahead, sir.

Speaker #2: Thank you very much . Operator and thank you , everyone for joining us this morning . With us on the call today are John Pollard , Co-Chief Executive Officer and Rob Rose , Chief Financial Officer We released our 2020 fourth quarter and annual results yesterday .

Doug Pollard: Thank you very much, operator, and thank you everyone for joining us this morning. With us on the call today are John Pollard, Co-Chief Executive Officer, and Rob Rose, Chief Financial Officer. We released our 2025 Q4 and annual results yesterday. You can access our news release as well as our complete financial statements and MD&A on our website at pollardbanknote.com and also on SEDAR+. Today I'll start with some prepared remarks highlighting our 2025 accomplishments and providing an overall business update, and John Pollard will then follow up with a discussion of our Q4 results. We'll then open it up to questions. 2025 was truly a transformational year for Pollard. In particular, our ongoing investments over the past few years delivered some game-changing new contracts and revenue-producing opportunities.

Speaker #2: You can access our news release, as well as our complete financial statements and MD&A, on our website at pollardbanknote.com and also on KDR+. Today, I'll start with some prepared remarks highlighting our 2025 accomplishments and providing an overall business update.

Speaker #2: And John Pollard will then follow up with a discussion of our fourth quarter results . We'll then open it up to questions . 2025 was truly a transformational year for Pollard in particular , our ongoing investments over the past few years delivered some game changing new contracts and revenue producing opportunities .

Speaker #2: And we start out with the our initial ilottery solution using our own internal platform technology catalyst that went live in February of 2025 with the Kansas Lottery .

Doug Pollard: Let me start out with our initial iLottery solution using our own internal platform technology, Catalyst. That went live in February 2025 with the Kansas Lottery, and that represented the fastest rollout of a greenfield iLottery operation. The rollout and the subsequent operations have really exceeded our expectations. As with most startups, particularly in iLottery, losses are expected while that revenue builds. We absorbed these headwinds in 2025, but we're moving toward profitability on the Kansas contract through 2026. It's been performing well. Later in the year 2025, we were awarded a major technology contract with the Nationale Loterij, the Belgian National Lottery. It's a 12-year contract to provide their central gaming system, including the retail systems. Also, though, the player account and the player engagement platform, iLottery, loyalty, and a lottery management system and warehouse and distribution system.

Speaker #2: And that represented the fastest rollout of a greenfield Ilottery operation . And the rollout and the subsequent operations have really exceeded our expectations As with most startups , particularly in Ilottery , losses are expected .

Speaker #2: While that revenue builds , we absorb these headwinds in 2025 , but we're moving toward profitability on the Kansas contract through 2026 . It's been performing well later in the year , 25 , we were awarded a major technology contract with the National Lottery .

Speaker #2: The Belgian National Lottery . It's a 12 year contract to provide their central gaming system , including the retail systems . Also , though , the player account and the player engagement platform Ilottery loyalty and a lottery management system and warehouse and distribution system , including VAT , the value of this central gaming system is approximately 289 million Canadian , and serves as a confirmation of the demand for the state of the art technology solution that we have with catalyst .

Doug Pollard: Including VAT, the value of the central gaming system is approximately CAD 289 million and serves as a confirmation of the demand for the state-of-the-art technology solution that we have with Catalyst. In December, we were awarded a contract with the Oklahoma Lottery to provide a lottery-specific playON loyalty solution. In addition to the loyalty solution, we also provide the website, the app, and the new CRM with that. Including extensions, this seven-year contract is valued at approximately $10 million. Implementation has already started as of the end of 2025. Our loyalty solution is now operating in a number of successful lotteries and provides a great model for the lottery industry, demonstrating Pollard's excellence in managing complex digital solutions. Expanding game content is always important.

Speaker #2: Then , in December , we were awarded a contract with the Oklahoma Lottery to provide a lottery specific play on loyalty solution . In addition to the loyalty solution , we also provide the website and the app and the new CRM .

Speaker #2: With that , including extensions . This seven year contract is valued at approximately $10 million . US and implementation has already started and as of the end of 2025 , our loyalty solution is now operating in a number of successful lotteries and provides a great model for lottery .

Speaker #2: For the lottery industry , demonstrating excellence in managing complex digital solutions Expanding game content is always important , and with our internal game studio , it's a key success factor in the digital space .

Doug Pollard: With our internal game studio, it's a key success factor in the digital space, just like it is in retail. We currently have over 145 games live across nine jurisdictions, including some very popular games like Bacon Me Crazy. Great game content is an important differentiator, not just for our digital solutions, but across our complete product portfolio, including charitable tabs, printed instant tickets, and pull-tab tickets. During Q4, we were also awarded the primary supply role for instant tickets with the California State Lottery, the largest seller of instant tickets in the United States. This 12-year contract, including the available extensions, is recognition of the innovation and the retail success of our long-term relationship with the California State Lottery. Charitable growth has remained steady. Future growth expected through electronic opportunities, in particular through kiosks and eTabs.

Speaker #2: Just like it is in retail . We currently have over 145 games live across nine jurisdictions , including some very popular games like Bacon Me Crazy and great .

Speaker #2: Game . Content is an important differentiator , not just for digital solutions , but across our complete product portfolio , including charitable tabs , printed instant tickets , and pull tab tickets During the fourth quarter , we were also awarded the Primary supply role for instant tickets with the California Lottery , the largest seller of instant tickets in the United States .

Speaker #2: This 12 year contract , including the available extensions , is recognition of the innovation and the retail success of our long term relationship with the California Lottery Switching over to charitable charitable growth has remained steady .

Speaker #2: Future growth expected through electronic opportunities in particular through kiosks and . Etabs . We did absorb a reduction in margins in Minnesota . One of our larger states , due to some changes in the regulatory environment which impacted all suppliers .

Doug Pollard: We did absorb a reduction in margins in Minnesota, one of our larger states, due to some changes in the regulatory environment which impacted all suppliers. However, we have been diligently expanding and improving our game content, which has shown strong signs of improving margins toward the end of 2025 and the beginning of 2026. I remind you that our NeoPollard joint venture grew significantly through strong eInstant sales and the impact of some large draw-based jackpots in the final months of 2025. In addition, during the year, the North Carolina Lottery exercised an extension for an additional year, which takes that contract out to October 2028. Also, during 2025, we continued expanding our charitable game product portfolio with the acquisition of Pacific Gaming, a leading supplier of electronic bingo handheld sets.

Speaker #2: However, we have been diligently expanding and improving our game content, which has shown strong signs of improving margins toward the end of '25 and the beginning of 2026.

Speaker #2: I remind you that our NeoPollard joint venture grew significantly through strong eInstant sales and the impact of some large draw-based jackpots in the final months of 2025.

Speaker #2: In addition , during the year , the North Carolina Lottery exercised an extension for an additional year , which takes that contract out to October 2028 .

Speaker #2: Also during 2025 , we continued expanding our charitable gaming product portfolio with the acquisition of Pacific Gaming , a leading supplier of electronic Bingo handheld sets .

Speaker #2: The operations of Pacific have integrated seamlessly within our charitable gaming group , Ilottery opportunities for both platform solutions and E game content , whether marketed together or separately , continue to be active as lotteries look to expand their offerings and meet growing consumer demand in both North America and internationally .

Doug Pollard: The operations of Pacific have integrated seamlessly within our charitable gaming group. iLottery opportunities for both platform solutions and eInstant game content, whether marketed together or separately, continue to be active as lotteries look to expand their offerings and meet growing consumer demand in both North America and internationally. Pollard will continue to actively pursue these exciting opportunities. Important investments were made in CapEx and intangibles with more than CAD 58 million invested during the year, including specialized presses, increases in key game content for digital eTabs, and expanded eInstant content. Expanding our inventory of state-of-the-art ICON eTab machines and significant ongoing development of our Catalyst gaming platform. While still focused on investing in our businesses, we anticipate total CapEx, including additions to intangibles, will be lower in 2026.

Speaker #2: Pollard will continue to actively pursue these exciting opportunities Important investments were made in CapEx and intangibles , with more than $58 million invested during the year , including specialized presses , increases in key game content Content for digitally , tabs , and expanded content .

Speaker #2: Expanding our inventory of state of the art icon itab machines and significant ongoing development of our Catalyst gaming platform . While still focused on investing in our businesses , we anticipate total CapEx , including additions to intangibles , will be lower in 2026 .

Speaker #2: During 2025, we financed all of these investments with internal operating cash flow, while at the same time generating strong financial results.

Doug Pollard: During 2025, we financed all these investments with internal operating cash flow, while at the same time generating strong financial results. Now I'll turn it over to John to highlight the Q4 results.

Speaker #2: Now I'll turn it over to John to highlight the fourth quarter results Thanks , Doug . So during the three months ended December 31st , 2025 , Pollard achieved revenue of $150.8 million compared to 143 140.3 million in the three months ended December 2020 .

John Pollard: Thanks, Doug. During the three months ended 31 December 2025, Pollard achieved revenue of CAD 150.8 million, compared to CAD 140.3 million in the three months ended 31 December 2024. The factors impacting the CAD 10.5 million revenue increase were we had a higher average instant ticket selling prices in Q4 2025, which increased revenue by CAD 1.4 million compared to the prior year, which was primarily due to higher proprietary product sales, and changes in customer mix. However, this increase in revenue was partly offset by a small decrease in instant ticket volumes of 0.5 million compared to the prior year. Sales of our other lottery products and services increased revenues by CAD 2.8 million in the year.

Speaker #2: For the factors impacting the $10.5 million revenue increase were we had a higher average selling prices in the fourth quarter of 2025 , which increased revenue by 1.4 million compared to the prior year , which was primarily due to higher proprietary product sales and changes in customer mix .

Speaker #2: However , this increase in revenue was partly offset by a small decrease in instant ticket volumes of 0.5 million compared to the prior year .

Speaker #2: Sales of our other lottery products and services increased revenues by 2.8 million in the year . This growth was largely attributable to our Kansas I lottery sales that Doug was talking about , that launched so successfully , and also we had an increase in sales of licensed products and also our lottery management services system grew a little bit as well In charitable gaming , our volumes increased revenue or increase in volumes , increased revenue by 2.1 million in the fourth quarter .

John Pollard: This growth was largely attributable to our Kansas iLottery sales that Doug was talking about that launched so successfully, and also we had an increase in sales of licensed products. Also our lottery management services system grew a little bit as well. In charitable gaming, our increase in volumes increased revenue by CAD 2.1 million in Q4. This is predominantly the result of the acquisition of Pacific Gaming that Doug just mentioned in Q2 of 2025. These increases in sales were partially offset by a decrease in our charitable e-gaming or eTabs revenue of CAD 1.2 million compared to 2024, primarily due to the impact of the regulatory changes in the Minnesota jurisdiction, which is our largest eTab market.

Speaker #2: This is predominantly the result of the acquisition of Pacific Gaming that Doug just mentioned in the second quarter of 2025 . These increases in sales were partially offset by a decrease in our charitable gaming or etabs revenue of 1.2 million compared to 2024 .

Speaker #2: Primarily due to the impact of the regulatory changes in the Minnesota jurisdiction , which is our largest dtab market . Higher Michigan Lottery sales , increased revenue in the fourth quarter of 25 by 1.3 million , compared to the prior year .

John Pollard: Higher Michigan iLottery sales increased revenue in Q4 2025 by CAD 1.3 million compared to the prior year. Sales of both eInstant and draw-based game sales were positively impacted by the significant Mega Millions and Powerball jackpots that occurred during the quarter. Our Q4 revenue also increased by approximately CAD 2.7 million relative to 2024 due to the weakening of the Canadian dollar relative to the US dollar. In a similar way, the Canadian dollar weakened against the euro in the quarter as well, which also resulted in an increase of CAD 1.8 million in revenue compared to 2024.

Speaker #2: Sales of both instant and draw based game sales were positively impacted by the significant Mega millions and Powerball jackpot that occurred during the quarter .

Speaker #2: Our fourth quarter revenue also increased by approximately $2.7 million relative to 2024, due to the weakening of the Canadian dollar relative to the US dollar, and in a similar way, the Canadian dollar weakened against the euro in the quarter as well, which also resulted in an increase of $1.8 million in revenue compared to 2024.

John Pollard: Our combined sales, which includes our GAAP revenue plus our 50% share of our NPI joint venture, reached a quarterly total of CAD 185 million, and that is up 10% from CAD 168.2 million last year. Cost of sales was CAD 128.4 million in Q4 2025, compared to CAD 117.9 million in Q4 2024. The increase of CAD 10.5 million was primarily due to higher charitable gaming volumes, primarily resulting from the addition of Pacific Gaming, higher instant ticket costs due to product mix, additional costs associated with our increased iLottery operations, including the Kansas startup expenditures and related amortization, and the higher licensed product sales that we referred to a minute ago.

Speaker #2: And so our combined sales , which includes our GAAP revenue plus our 50% print , 50% share of our NPI joint venture , reached a quarterly total of $185 million .

Speaker #2: And that is up 10% from $168.2 million last year Cost of sales was 128.4 million in the fourth quarter of 25 , compared to 117.9 in the fourth quarter of 24 .

Speaker #2: The increase of 10.5 million was primarily due to higher charitable gaming volumes , primarily resulting from the addition of Pacific gaming , higher instant ticket costs due to product mix , additional costs associated with our increased I lottery operations , including the Kansas start up expenditures and related amortization , and the higher licensed product sales that we referred to a minute ago .

John Pollard: In addition, those higher exchange rates on the US dollar expenses further increased cost of sales compared to 2024. Gross profit was CAD 22.4 million or 14.9% of sales in Q4 2025, compared to CAD 22.4 million or 16.0% of sales in Q4 2024. The main factors impacting our gross profit percentage in Q4 2025 were, number one, the launch earlier in the year of Pollard's first iLottery operations in Kansas, which has resulted in increased costs to support our overall iLottery business, as well as negative gross profit margins in the startup phase of running Kansas iLottery. Secondly, higher amortization and depreciation expense predominantly related to the increased amortization of intangible assets, including our Pollard Catalyst gaming platform.

Speaker #2: And in addition , those higher exchange rates on the US dollar expenses further increased cost of sales compared to 2024 . Gross profit was 22.4 million , or 14.9% of sales , in the fourth quarter of 25 , compared to 22.4 million , or 16.0% of sales in the fourth quarter of 24 .

Speaker #2: The main factors impacting our gross profit percentage in the fourth quarter of 25 were . Number one , the launch earlier in the year of Pollard's first I lottery operations in Kansas , which has resulted in increased costs to support our overall lottery business , as well as negative gross profit margins in the startup phase of running Kansas II lottery Secondly , higher amortization and depreciation expense , predominantly related to the increased amortization of intangible assets , including our Catalyst Gaming platform .

John Pollard: Thirdly, the lower eTab sales in 2025 from those regulatory changes negatively impacted gross profit as well. Offsetting that, the acquisition of Pacific Gaming positively impacted our overall gross profit percentage, and as well, our higher average instant ticket selling prices, and increased proprietary sales and customer mix increased our gross profit in the quarter. Our administration expenses increased to CAD 20.2 million in Q4 2025 compared to CAD 16.1 million in Q4 2024. This CAD 4.1 million increase was largely a result of higher compensation costs, ERP implementation costs of CAD 1.3 million, and increased software licensing costs, as well as the addition of Pacific Gaming administration expenses. Selling expenses increased to CAD 5.8 million in Q4 2025, compared to CAD 5.3 million in Q4 2024.

Speaker #2: The thirdly , the lower Etab sales in 2025 from those regulatory changes negatively impacted gross profit as well . Offsetting that , the acquisition of Pacific Gaming positively impacted our overall gross profit percentage .

Speaker #2: And as well , our higher average instant ticket selling prices and increased proprietary sales and customer mix increased our gross profit in the quarter .

Speaker #2: Our administration expenses increased to 20.2 million in the fourth quarter of 2025 , compared to 16.1 in the fourth quarter of 24 . This $4.1 million increase was largely a result of higher compensation costs .

Speaker #2: ERP implementation costs of $1.3 million and increased software licensing costs, as well as the addition of Pacific Gaming Administration expenses. Selling expenses increased to $5.8 million in the fourth quarter of '25, compared to $5.3 million in the fourth quarter of '24.

John Pollard: This CAD 0.5 million increase was primarily due to the higher compensation costs and the addition of Pacific Gaming selling expenses. Pollard's share of our NeoPollard Interactive joint venture income increased to CAD 16.9 million in the Q4 of 2025, compared to CAD 12.6 million in the Q4 of 2024. This CAD 4.3 million increase was primarily due to continued strong instant sales in both North Carolina and Virginia, our two largest accounts there, and increased draw-based game sales, due in part to two significant jackpot runs that were awarded during the quarter. These increases were partially offset by the expiry of one customer contract in the joint venture at the end of the Q2 of 2025.

Speaker #2: This 0.5 million increase was primarily due to the higher compensation costs and the addition of Pacific gaming , selling expenses Pollard share of our Neo Pollard Interactive joint venture income increased to 16.9 million in the fourth quarter of 25 , compared to 12.6 million in the fourth quarter of 24 .

Speaker #2: This 4.3 million increase was primarily due to continued strong instant sales in both North Carolina and Virginia . Our two largest accounts there and increased draw based game sales due in part to two significant jackpot runs that were awarded during the quarter .

Speaker #2: These increases were partially offset by the expiry of one customer contract in the joint venture at the end of the second quarter of 2025.

John Pollard: We had a net foreign exchange loss of CAD half a million dollars in Q4 2025, compared to a net foreign exchange loss of CAD 4.4 million in Q4 2024. Adjusted EBITDA increased to CAD 27.7 million in Q4 2025, compared to CAD 25.2 million in Q4 2024. The primary reasons for that increase of CAD 2.5 million were the increase in our equity investment income from our NPI joint venture of CAD 4.3 million, increase in our gross profits, net of amortization and depreciation of CAD 1.2 million, and a small increase in the realized foreign exchange gain of CAD 0.3 million. Partially offsetting those increases to Adjusted EBITDA was the increase in administration expenses of CAD 2.8 million.

Speaker #2: Net foreign exchange loss of half a million dollars in the fourth quarter of '25, compared to a net foreign exchange loss of $4.4 million in the fourth quarter of '24.

Speaker #2: And so, adjusted EBITDA increased to $27.7 million in the fourth quarter of 2025, compared to $25.2 million in the fourth quarter of 2024.

Speaker #2: The primary reasons for that increase of 2.5 million were the increase in our equity investment income from our NPI joint venture of 4.3 million , increase in our gross profit , net of amortization and depreciation of 1.2 million , and a small increase in the realized foreign exchange gain of 0.3 million .

Speaker #2: Partially offsetting those increases to adjusted EBITDA . Was the increase in administration expenses of 2.8 million . That's net of our ERP implementation costs and the increase in selling expenses of 0.5 million .

John Pollard: That's net of our ERP implementation costs and the increase in selling expenses of CAD 0.5 million. Amortization and depreciation totaled CAD 12.8 million during Q4 2025, compared to CAD 11.6 million during Q4 2024. The increase of CAD 1.2 million was primarily the result of increased amortization of our intangible assets, largely resulting from our past expenditures on our Catalyst gaming platform. Income tax expense was CAD 5.5 million in Q1 2025, an effective rate of 54.6%, which is higher than our domestic rate of 27%, due primarily to the effect of withholding and other taxes and the effect of foreign exchange-related non-deductible items. Those were partially offset by the effect of lower income tax rates in some foreign jurisdictions.

Speaker #2: Amortization and depreciation totaled 12.8 million during the fourth quarter of 25 , compared to 11.6 million during the fourth quarter of 24 . The increase of 1.2 million was primarily the result of increased amortization of intangible assets , largely resulting from our expenditure .

Speaker #2: Past expenditures on our Catalyst gaming platform . Income tax expense was 5.5 million in the fourth quarter of 2025 , and an effective rate of 54.6% , which was higher than our domestic rate of 27% , due primarily to the effect of withholding and other taxes and the effect of foreign exchange related nondeductible items that were partially offset by the effect of lower income tax rates in some foreign jurisdictions So net income ended up at 4.6 million in the fourth quarter of 25 , compared to a net loss of 1.8 million in the fourth quarter of 24 .

John Pollard: Net income ended up at CAD 4.6 million in Q4 2025, compared to a net loss of CAD 1.8 million in Q4 2024. The main reasons for the increase of CAD 6.4 million were again our increase in equity investment income from our NPI joint venture of CAD 4.3 million, decrease in foreign exchange loss of CAD 3.9 million, and the decrease in income tax expense of CAD 3.3 million. Partially offsetting those increases to the net income were the increase in administration expenses of CAD 4.1 million and the increase in other expenses of CAD 0.6 million, as well as increasing sales expenses of CAD 0.5 million.

Speaker #2: The main reasons for the increase of 6.4 million were again , our increase in equity investment income from our NPI joint venture of 4.3 million , decrease in foreign exchange , loss of 3.9 million and the decrease in income tax expense of 3.3 million .

Speaker #2: Partially offsetting those increases to the net income were the increase in administration expenses of $4.1 million and the increase in other expenses of $0.6 million.

Speaker #2: As well as an increase in expenses of $0.5 million. So net income per share, basic and diluted, ended up being $0.17 per share in the fourth quarter of Q4 2025, compared to a net loss of $0.07 per share and $0.06 per share, respectively.

John Pollard: Net income per share, basic and diluted, ends up being CAD 0.17 per share in Q4 2025, compared to a net loss of CAD 0.07 per share and CAD 0.06 per share respectively for basic and diluted in Q4 2024. I will just comment that before we wrap up, look, 2025 was really a transformational year, as Doug talked about, with huge events. You know, the successful launch of our Kansas iLottery with our Catalyst platform. The awarding of the Belgian National Lottery contract and the awarding the primary contract for the California State Lottery. All huge transformational changes and positive things for Pollard Banknote. We did record record revenue in the year for 2025, which was fantastic.

Speaker #2: For basic and diluted in the fourth quarter of 24 . I will just comment that before we wrap up that look , 2025 was really a transformational year .

Speaker #2: As Doug talked about with huge events . You know , the successful launch of our Kansas , lottery with our catalyst platform , the awarding of the Belgium National Lottery contract and the awarding of the primary contour of the California Lottery .

Speaker #2: All huge transformational changes and positive things for Pollard Banknote . We did record a record revenue in the year for 2025 , which was fantastic with our our EBITDA increased less than what we might have hoped for , increasing to 120 million .

John Pollard: Our EBITDA increased less than what we might have hoped for, increasing to approximately CAD 120 million from CAD 115 million the year before, a CAD 5 million increase. I will just point out that there were two events that occurred during the year that we've spoken about that made that EBITDA lower than it would have been. The first one being the start of costs of our Kansas iLottery venture. That is not a bad thing. It is going fantastically and right on track. All iLottery ventures on a rev share basis start in the negative in the first year or two and grow to positive. That's going exactly as planned and is gonna become a great revenue generator for us.

Speaker #2: From $115 million a year before, a $5 million increase. I will just point out that there were two events that occurred during the year.

Speaker #2: We've spoken about that made that EBITDA lower than than it would have been the first one being the start up costs of our Kansas .

Speaker #2: Lottery venture . That is not a bad thing . It is going fantastically and right on track and all . I lottery ventures on a share basis start in the negative in the first year or two and grow to positive .

Speaker #2: And so that's that's going exactly as planned . And , and is going to become a great revenue generator for us . And secondly , we did have that unusual situation in our Minnesota market where those regulatory changes which took a significant chunk out of our EBITDA in 25 compared to the year before .

John Pollard: Secondly, we did have that unusual situation in our Minnesota eTab market with those regulatory changes, which took a significant chunk out of our EBITDA in 25 compared to the year before. As we've talked about, we've seen progressive improvement through the year because we've been aggressively dealing with our game content to improve it and work better with the new regulations. We've seen in particular the last few months really strong growth, and we expect 26 to be much better than 25 in that regard. Lots of great things in the year to celebrate, and a few things that limit our EBITDA.

Speaker #2: But as we've talked about, we've seen progressive improvement through the year because we've been aggressively dealing with our game content to improve it and work better with the new regulations.

Speaker #2: And we've seen in particular the last few months , really strong growth , and we expect 26 to be much better than 25 in that regard .

Speaker #2: So lots of great things in in the year to celebrate and and a few things that that limit our EBITDA . The last brief comment I'll make is only that the world has seen particularly recently , lots of turmoil with with military conflicts in the Middle East and gas price increases and those matters .

John Pollard: The last brief comment I'll make is only that, the world has seen, particularly recently, lots of turmoil with military conflicts in the Middle East and gas price increases and those matters. You know, we see our lottery results and our charitable game results on a daily basis because of the digital nature of a lot of our operations. We know literally to the hour and the minute how those things are affecting sales if they were to be. We see no impact on our business as yet from any of the fallout of these sort of world events. We're cautiously optimistic that 2026 won't be impacted in any way by those matters. That's it. That's the end of our prepared part of our discussions.

Speaker #2: You know , we see our lottery results and our charitable gaming results on a daily basis because of the digital nature of a lot of our operations .

Speaker #2: So we know literally to the hour and the minute how those things are affecting sales . If they if they were to be , we see no impact on our business as yet from any of the fallout of these , of these sort of world events and , and so we're cautiously optimistic that 2026 won't be impacted in any way by , by , by those matters .

Speaker #2: That's it . That's the end of our prepared part of our discussions . And , operator , we would be happy to entertain any questions at this time .

John Pollard: Operator, we would be happy to entertain any questions at this time.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any key. One moment, please, for your first question. Your first question comes from Robert Young with Canaccord Genuity. Your line is now open.

Speaker #1: Thank you . Ladies and gentlemen . We will now begin the question and answer session . Should you have a question , please press star followed by the one on your touchtone phone .

Speaker #1: You will hear a prompt that your hand has been raised should you wish to decline from the polling process , please press star followed by the two .

Speaker #1: If you are using a speaker phone , please lift the handset before pressing any keys . One moment please , for your first question .

Speaker #1: Your first question comes from Robert Young with Canaccord Genuity . Your line is now open .

Robert Young: Hi, good morning. I guess the first place to start would be the puts and takes around gross margin. I know you did provide a number of the elements, so thanks for that. But I was hoping that you could look forward through the remainder of the year. How do you expect gross margins to pace given, I mean, you've got this Oklahoma, California, you've got the Kansas contract, which I think you'd said that it should improve through 2026, and then also Belgium. Just to help understand how you expect gross margins to pace would be very helpful, I'm sure, for your investors.

Speaker #3: Hi . Good morning . I guess the first place to start would be the the puts and takes around gross margin . I know you , you did provide a number of the the elements .

Speaker #3: So thanks for that . But I was hoping that you could look forward through the remainder of the year . How do you expect gross margins to pace given ?

Speaker #3: I mean , you've got this Oklahoma , California , you've got the Kansas contract , which is I think you said that it should improve through 2026 .

Speaker #3: And then also Belgium, just to help understand how you expect gross margins to pace would be very helpful. I'm sure for your investors.

Rob Rose: Morning, Rob. It's Rob Rose here. I'll try to give you some color on that. Part of it really depends sort of on timing, and timing sort of depends on how these sort of contracts roll out and get applied, and that's just something that we don't directly control, but it will grow through the year. We've always said that, you know, our instant tickets repricing has put us in a good position on our instant ticket, pure instant ticket side. That should get back, and if not already back to sort of some of our historical margins. If you look back at some of our historical margins, sort of in that very low 20% range, we think there's no reason why throughout the year we can't move back towards that.

Speaker #2: Morning , Roberts .

Speaker #4: Rob Rose here . I'll I'll try to give you some color on that part of it really depends sort of on timing and timing sort of depends on how these sort of contracts roll out and get applied .

Speaker #4: And that's just something that we don't directly control . But it will grow through , through the year . So we've always said that , you know , our instant tickets repricing has put us in a good position on our instant ticket , pure instant ticket side .

Speaker #4: And that should get back . And if not already back to sort of some of our historical margins . And if you look back at some of our historical margins , sort of in that very low 20% range , we think there's no reason why throughout the year we can't move back towards that .

Rob Rose: John highlighted really a couple of the headwinds that kind of impacted us in 2025. They will improve through 2026, and we're seeing that already in Q1. It will take some time as we go through that quarter. Kansas is moving towards profitability. The eTab situation, we've made some great strides in terms of improving the game content. Again, that's not just us, that's impacted the whole market in Minnesota, and we're doing quite well to move back to the historical level. Without putting specific numbers on it, I think we see all of those things, Kansas, and for sure, the eTab slowly growing throughout the year, getting more towards that historical margin that we'd see in the low 20s.

Speaker #4: And John highlighted really a couple of the headwinds that kind of impacted us in 2025 . They will improve through 2026 . And we're seeing that already in the first Q but it will take some time as we go through , as we go through that quarter , Kansas is moving towards profitability .

Speaker #4: The situation we've made some great strides in terms of improving the game content . And again , that's not just us . That's impacted the whole market .

Speaker #4: Minnesota . And we're doing quite well to move back to the historical level . So without putting specific numbers on it , I think we see all those things Kansas and and for sure the slowly growing throughout the year getting more towards that historical margin that we see in the low 20s , part of the impact on Belgium will be very positive .

Rob Rose: Part of the impact on Belgium will be very positive, and it really depends on how quickly we ramp up. We're doing a ton of work on it now, and it's just a matter of when that timing impacts and when we continue to complete and do the work for them. So that will grow throughout the year in 2026. Things like California is just starting off, and that will, you know, that will blend in with our instant ticket products. So that's sort of the expected timing. Sorry, I don't want to really get into specific quarter-to-quarter changes, but you know, you should see that steady increase and improvement as we proceed on a quarter-to-quarter basis.

Speaker #4: And it really depends on how quickly we ramp up. We're doing a ton of work on it now, and it's just a matter of when that timing impacts, and when we continue to complete and do the work for them.

Speaker #4: So that will grow throughout the year . In 2026 . And things like California is just starting off and that will , you know , that will blend in with our instant ticket products .

Speaker #4: So that's sort of the expected timing . So I don't want really get into specific quarter to quarter changes , but you should see that steady , steady increase in improvement as we proceed on a quarter to quarter basis .

Robert Young: Okay, that's great color. Thank you. Maybe one more question on that theme. It seems from the comments that Kansas was the biggest single factor, followed by the eTabs pressure in Minnesota. As we go into Q1, should we expect a similar level of pressure in Q1? Or, yeah, I'll leave it there.

Speaker #3: Okay . That's great color . Thank you . Maybe one more question on on that theme . It seems from the comments that Kansas was the biggest single factor , followed by the etabs pressure in Minnesota .

Speaker #3: What as we go into Q1 , should we expect a similar level of pressure in Q1 or . Yeah , I'll leave it there .

John Pollard: I know. I mean, I think as John, both those items, the Kansas iLottery and Minnesota eTabs, we're seeing significant improvement quarter to quarter in all of them, and particularly, a little faster. We were a little slower on the eTabs. We saw steady progress all through 2025 on Kansas iLottery, and we continue to see that progress in Q1. It'll definitely get better. The eTabs was. It took us till a little later in the year to figure out the changes and get it going. We're seeing a faster ramp up on the Minnesota eTabs just in the last few months. You should see a faster ramp up in Q1. Q1 on both those factors should be significantly better than Q4.

Speaker #2: No , I mean , I think as John , both those both those items , the Kansas Lottery and Minnesota Etabs , we're seeing significant improvement quarter to quarter in all of them , particularly a little faster We were a little slower on the Etabs .

Speaker #2: We saw steady progress all through 2025 on Kansas I lottery , and we can to continue to see that progress in Q1 . So it'll definitely get better .

Speaker #2: The Etabs was it took us a little later in the year to figure out the changes and get it going . So we're seeing a faster ramp up on the Minnesota Etabs just in the last a few months .

Speaker #2: So, you should see a faster ramp-up in Q1. So Q1, on both those factors, should be significantly better than Q4.

Robert Young: All right. Thank you. That's great. You said that 2026 CapEx is expected to be lower than 2025, and that I think you noted in the prepared comments that includes the impact of intangibles. Could you just go over what the elements of CapEx in 2025 were and where you'd expect it to decline in 2026? Then, within that, you know, given the addition of California, what's the future requirement for expanded printing capacity, if there is a requirement for expanded printing capacity? How might that impact CapEx?

Speaker #3: Thank you . That's great . And you said that 2026 CapEx is expected to be lower than 2025 , and that I think you noted in the prepared comments that includes the impact of intangibles .

Speaker #3: Could you just go over what the elements of CapEx in 2025 were and where you'd expect it to decline in 2026 ? And then within that , you know , given the addition of California , what's the future requirement for expanded printing capacity ?

Speaker #3: If there is a requirement for expanded printing capacity ? And how might that impact CapEx

Rob Rose: I'll take care of that, Rob. Just right off the bat, the California contract, which brings us some more volume and is a tremendous contract, doesn't have any immediate impact on our capacity restrictions. We have capacity to do the California growth and still have comfortable levels of capacity to deal with all of our customers and current orders. You know, that's interesting that we have that ability, of course, because you know, California, as we've disclosed before, we've had about a strong secondary position, about 30% of their market share on instant tickets, and that's basically doubled.

Speaker #4: I'll take care of that . Rob . Just right off the bat . So the California contract , which brings us some more volume .

Speaker #4: And it is a tremendous contract, but it doesn't have any immediate impact on our capacity restrictions. So we have capacity to do the California growth and still have comfortable levels of capacity to deal with all of our customers and current orders.

Speaker #4: So , you know , and and that's a it's interesting that we have that ability . Of course , because California , we as we've disclosed before , we've had about a strong secondary position , about a 30% of their market share on instant tickets .

Rob Rose: We now have the primary position, which is 70%, but we still have that ability to absorb that capacity without major impacts on CapEx at all. Recall that over the last couple of years, we've mentioned and talked about how we've learned to say no to a couple of customers coming out of the major pandemic. That was important for us to say, you know, we can't do some of this work at those low margins. That's typical for us because we like to say yes, and we like to grow. Those were importantly good decisions that reduced our volumes. We've talked about that over the last couple of years. That did give us some capacity. When a great situation like California comes along, we can take advantage of it.

Speaker #4: And that's basically doubled . So we now have the primary position to 70% , but we still have that ability to absorb that capacity without major impacts on on CapEx at all .

Speaker #4: Recall that a couple of years over the last couple of years , we've mentioned and talked about how we've learned to say no to a couple of customers coming out of the the major pandemic .

Speaker #4: And that was important for us to say , you know , we can't do some of this work at those low margins . And that's difficult for us because we like to say yes , and we like to grow .

Speaker #4: But those were importantly good decisions that reduced our volumes . And we've talked about that over the last couple of years . So that did give us some capacity .

Speaker #4: So in a great situation like California comes along , we can take advantage of it . So we're fine on that . Yeah , we're fine on that perspective .

Rob Rose: We're fine on that. Yeah, we're fine on that perspective. Look, over the last couple of years, as everyone's well aware, we've made some major investments, both in what I call sort of traditional CapEx, so property, plant, and equipment, and intangibles, as we've really built up our technology, and as well as, you know, expanding our charitable side. Some of the bigger groups of our traditional CapEx, particularly in the last two years, has been expanding for this eTab growth that we've talked about. In our CapEx, we can do it through tablets, like iPads, but we also do it through kiosks, where, you know, the standalone equipment you see in locations.

Speaker #4: So look over the last couple of years as everyone is well aware , we've made some major investments both in what I call traditional CapEx .

Speaker #4: The property, plant and equipment, and intangibles, as we've really built up our technology and as well as expanding our charitable side.

Speaker #4: So some of the bigger groups of of our traditional CapEx , particularly in the last two years , has been expanding for this growth that we've talked about .

Speaker #4: So in our CapEx , we build we can do it through tablets like iPads , but we also do it through kiosks . You know , the the standalone equipment that you see in in locations .

Rob Rose: We've built up that inventory of kiosks in order to get ahead of the curve and actually go into some of these new greenfield operations, and place our what we call our ICON cabinets. That goes into our CapEx. We've done a big expansion there, so that will drop a little bit, 'cause we've got that build up already. We've also, in that CapEx, have done some improvements on our existing instant ticket presses, some upgrades, which we're now complete. We've also done some on the charitable print side, we've added some specific equipment that also we don't anticipate in the future. Those two items are gonna reduce a little bit on the PPE side. Of course, on the intangible side, there's sort of two parts.

Speaker #4: And so we've built up that inventory of kiosks in order to get ahead of the curve and actually go into some of these new greenfield operations and place our, what we call, our icon cabinets.

Speaker #4: And so that goes into our CapEx. So we've done a big expansion there, so that will drop a little bit because we've got that build up already.

Speaker #4: We've also in that CapEx have done some improvements on our existing instant ticket presses , some some upgrades which we're now complete . And so we've also done some on the charitable side .

Speaker #4: We've added some specific equipment that also we don't anticipate in the future, so those two items are going to reduce a little bit on the PPE side.

Speaker #4: And of course , on the intangible side , there's sort of two parts that really almost three parts to that , that of course , is the build out of our catalyst platform , which is taken significant resources in the last couple of years and got to the point where we've now got it installed in Kansas , and we have it ultimately being installed in Belgium .

Rob Rose: There are really almost three parts of that. There, of course, is the build out of our Catalyst platform, which has taken significant resources in the last couple of years. Got to the point, obviously, where we've now got it installed in Kansas, and we have it ultimately being installed in Belgium. There always will be investments and upgrades to that, but we've done a big part of the heavy lifting there. We also have done a big investment in our game content, both for eInstant on the iLottery side. As John and Doug mentioned, you know, we now have a large group of games out there, and we continue to expand that. That's important for two reasons.

Speaker #4: There'll always will be investments and upgrades to that , but we've done a big part of the heavy lifting there , and we also have done a big investment in in our game content , both for instance , on the Ilottery side and as John and Doug mentioned , we now have a large group of games out there , and we continue to expand that .

Speaker #4: And that's important for two reasons . When you when you look at a platform contract for opportunity , you usually wrap your instant games in there as well .

Rob Rose: When you look at a platform, contract or opportunity, you usually wrap your instant games in there as well. That's an important part of it. But more specifically, eInstants can be sold separately just to other iLottery operations, and that's a big focus of our iLottery digital side. As well, just to compete in the eTabs in Minnesota, we've really put an emphasis on increasing our game content, both in terms of quality and quantity. Those are the three levers in the intangible side. We'll continue to invest in those, but we expect that side also to come down a little bit in 2026 compared to 2025.

Speaker #4: So that's an important part of it . But more specifically instance can be sold separately just to other ilottery operations . And that's a big focus of our of our ilottery digital side .

Speaker #4: And then as well, just as to compete in the eTabs in Minnesota, we've really put an emphasis on increasing our game content, both in terms of quality and quantity.

Speaker #4: So those are the three levers on the intangible side. We'll continue to invest in those, but we expect that side also to come down a little bit in 2026 compared to 2025.

Robert Young: All right. Great. Last question from me. The positive impact from the large jackpots in the US market is that something that has an ongoing positive impact, or does that positive impact basically end when the jackpot is awarded? Maybe just talk about how that might impact Q1, and then I'll pass the line.

Speaker #3: All right . Great . Last question for me , the positive impact from the large jackpots in the US market . Is that something that has a an ongoing positive impact or does that positive impact basically end when the jackpot is awarded ?

Speaker #3: Maybe you just talk about how that might impact Q1 and then I'll pass it on .

Doug Pollard: Thanks, Rob. It's Doug Pollard here. I'll take that. I think primarily, I suspect what you're getting at that is with the iLottery aspect of the big jackpot.

Speaker #2: Thanks , Rob . It's Doug , I'll take that . I think primarily I suspect what you're getting is that is with the I lottery aspect of the big jackpot draws .

Robert Young: Right.

Doug Pollard: Draws, that's where we see it the most 'cause we get the visibility, right? Most of the Powerball purchase at retail is anonymous. It's hard to track that, what that impact is. At iLottery, that's the exciting part. You can really see the power of those, that Powerball brand and Mega Millions in the States and Lotto Max 6/49 in Canada. When you get a big jackpot, you bring in a bunch of first time depositors, a bunch of new players. Of course, a lot of those are jackpot chasers. They're very casual players. They're not all gonna start playing all the time. That's where if we do a good job with a marketing solution and with the CRM and with loyalty, we can do a better job of player retention.

Speaker #2: And that's where we see it the most, because we get the visibility, right? Most of the Powerball purchases at retail are anonymous.

Speaker #2: It's hard to track that . What that impact is . But at Ilottery , that's the exciting part . You can really see the power of those that Powerball brand and Mega millions in the states and Lotto Max .

Speaker #2: 649 in Canada , when you get a big jackpot , you bring in a bunch of first time depositors , a bunch of new players , and and of course , a lot of those are jackpot chasers .

Speaker #2: They're very casual players . They're not all going to start playing all the time , but that's where if we do a good job with a marketing solution and with the CRM and with loyalty , we can do a better job of player retention .

Doug Pollard: We've seen that that's been one of the drivers in Kansas, that our player retention has been really market leading. While we don't, you know, keep all of them, our job is to try to, you know, encourage them to have ongoing play, whether that's in a draw game or in an eInstant game, you know, with ongoing responsible gaming play. What we've seen is that every time you get one of those big jackpot runs, you kinda reset your base level of players a little bit higher. You don't capture all of those, but you capture a big chunk. That's in some ways why, you know, it was one of the headwinds that Kansas had, in fact.

Speaker #2: And we've seen that . That's been one of the drivers in Kansas that our player retention has been really market leading . And so while we don't , you know , keep all of them , our job is to try to encourage them to to have ongoing play , whether that's in a draw game or an an instant game .

Speaker #2: You know , with ongoing responsible gaming play . And so what we've seen is that every time you get one of those , those big jackpot runs , you kind of reset your base level of players a little bit higher .

Speaker #2: And so , yeah , you don't capture all of those , but you capture a big chunk . So that's in some ways why , you know , it was one of the headwinds at Kansas had in fact , in its first year of operations , we had a bit of a jackpot drought until later in 2025 .

Doug Pollard: In its first year of operations, we had a bit of a jackpot drought until later in 2025, but then we had a couple, and you could see the impact of that. It's something we monitor very closely, and it's really a measuring stick for how well we can do with our player retention.

Speaker #2: But then we had a couple and you could see the impact of that . So it's something we monitor very closely , and it's really a measuring stick for how well we can do with our player retention .

Robert Young: Okay, thanks a lot for taking the questions.

Speaker #3: Okay . Thanks a lot for taking the questions .

Doug Pollard: Thank you, Rob.

John Pollard: Thank you, Rob.

Speaker #2: Thank you . Rob .

Operator: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from David McFadgen with ATB Capital Markets. Your line is now open.

Speaker #1: Ladies and gentlemen , as a reminder , should you have a question , please press star one . You ask . Your next question comes from David McFadden with ATB Cormark .

Speaker #1: Your line is now open.

David McFadgen: Thank you. Yeah, a couple of questions. When you look at the instant ticket business, have the margins improved back to where they were before you had the supply side increases, and then you went out and you had to reprice all your contracts? Are you back to that level now?

Speaker #5: Thank you . Yeah , a couple of questions . So when you look at the instant ticket business , have the margins improved back to where they were before you had the supply side increases and then you went out and you had to reprice all your contracts .

Speaker #5: Are you back to that level now?

Rob Rose: David, it's Rob. I would say fundamentally, we are. The impact on our repricing has been very successful over the last few years, and so that's mostly all baked in. We had a significant majority that we've been able to reprice. There's a number of contracts that won't be repriced. They still have some long-term on them. Some of the contracts are some of our better higher value contracts that have already been sort of repriced for a long time. That repricing is done. When you concentrate just on and focus just on the instant ticket printing production part of our lottery segment, I think we're basically there close to what our margins were.

Speaker #4: David Robb: I would say, fundamentally, the impact on our repricing has been very successful over the last few years. And so, that's mostly all baked in.

Speaker #4: We had a significant majority that we've been able to reprice. There's a number of contracts that won't be repriced; they still have some long term on them.

Speaker #4: And some of the contracts are some of our better higher value contracts that have already been sort of repriced for a long time .

Speaker #4: So that repricing is done . So when you concentrate just on and focus just on the instant ticket printing production , part of our lottery segment , I think we're they're , they're close to what our margins were .

Rob Rose: When you look at our overall results and the overall lottery, like we've been talking about, we're so much more than an instant ticket printer. You go back a number of years, and you see this low 20% margin. That was primarily pure instant tickets with a little bit of other stuff. Now we've got so many other things that we do keep in our lottery segment because it's all related. As we've talked about, that provides the sort of headwinds to that impact negatively on terms of our gross margin. Things like the Kansas Lottery, Kansas iLottery contract with the startup costs has been an impact on it.

Speaker #4: But when you look at our overall results and the overall lottery , like we've been talking about , we're so much more than an instant ticket printer .

Speaker #4: So when you go back , a number of years and you see this low 20% margin , that was primarily pure instant tickets with a little bit of other stuff .

Speaker #4: Now we've got so many other things that we do keep in our lottery segment , because it's all related . And as we've talked about , that provides the sort of the headwinds to that impact negatively on our gross margin , things like the Kansas Lottery , Kansas Lottery contract with the start up costs has been an impact on it .

Rob Rose: Some of our digital and ancillary growth that we're developing on things like second chance drawings and some of our loyalty programs that we've built in don't quite have the same kind of margin impact. That kind of muddles the impact on our gross margin. Then, of course, if you look at it consolidated, we have the impact on the charitable side of those regulations in the eTab market for Minnesota that impacted everybody. Depending on what sort of slice you're looking at, but buried in that total consolidated gross margins, I think we're mostly where we are in terms of the instant ticket printing itself. We have some important plans focusing on the future to, of course, to continue to get more efficient because you're always looking at cost, and there's always pressure under cost.

Speaker #4: Some of our digital ancillary growth that we're developing and things like second chance drawings and some of our loyalty programs that we built in don't quite have the same kind of margin impact .

Speaker #4: So that kind of muddles the muddles the impact on our gross margin . And then , of course , if you look at it consolidated , we have the impact on the charitable side of that regulations and the etab market for Minnesota that impacted everybody .

Speaker #4: So depending on what sort of slice you're looking at , but buried in that total consolidated gross margins , I think we're mostly where we are in terms of the instant ticket printing itself .

Speaker #4: We have some important plans focusing on the future to , of course , to continue to get more efficient because you're always looking at costs , and cost is always there's always pressure under costs .

Rob Rose: We continue to focus on that side of the margin, and we think we can improve it still. Fundamentally, buried in these consolidated numbers, I'd say yeah, I think our instant ticket margins are close to what they were.

Speaker #4: So we're continuing to focus on that side of the margin , and we think we can improve it still . But fundamentally buried in these consolidated numbers , I'd say , yeah , I think our margins are close to what they were .

John Pollard: Sorry, Rob, it's John. I would just say that, look, our increase in EBITDA in 2025, that CAD 5 million increase I just talked about, fundamentally all came from improvement in our instant ticket portfolio, offset somewhat by some of the other things we've talked about with the iLottery startup expenses and that. Our improvement was pretty much all in instant tickets because we are recovering those margins.

Speaker #2: And sorry Rob , it's John . I would just say that , look , our increase in EBITDA in 2025 , that 5 million increase I just talked about fundamentally all came from improvement in an instant ticket portfolio , offset somewhat by some of the other things we've talked about with the Ilottery start up expenses and that .

Speaker #2: But our our improvement was pretty much all in instant tickets because we are recovering those margins

David McFadgen: Okay. It would appear that the Kansas iLottery, you know, is having a fairly material impact. When do you expect that would actually be EBITDA positive and start to contribute EBITDA?

Speaker #5: Okay , so it would appear that the Kansas I lottery is having a fairly material impact . So when do you expect that would actually be EBITDA positive and start to contribute EBITDA

Rob Rose: I can start with that one, David. It's gonna improve throughout the year. Again, it really depends a little bit in terms of how the revenue grows and how the influence of the large jackpots and how much we can retain throughout that. It'll certainly move back towards profitability towards the end of the year. Of course, whether or not it gets to positive EBITDA, just the reduction of negative EBITDA is of course a positive impact on the numbers. We'll continue to see that starting, as John mentioned, in Q1. The exact timing, you know, it depends a little bit in terms of that revenue growth. There's a number of levers that now that we're doing sort of in that Kansas iLottery contract that allows us to have a better impact on revenue.

Speaker #4: Yeah , I can I can start with that one , David . So it's going to improve throughout the year . Again , it really depends a little bit on terms of how the revenue grows and how the influence of the large jackpots and how much we can retain throughout that .

Speaker #4: But it will certainly move back towards profitability towards the end of the year . And of course , whether or not it gets to positive EBITDA , just the reduction of negative EBITDA is , of course , a positive impact on the numbers and we'll continue to see that starting , as John mentioned in Q1 , the exact timing , you know , it depends a little bit in terms of that revenue growth , but there's a number of levers that now that we're doing sort of in that Kansas lottery contract that allows us to have a better impact on revenue , just normal timing and the rollout of a lottery contract .

Rob Rose: Just normal timing and a rollout of the lottery contract. It'll go through the year, but it'll be, you know, you'll see that improvement just in a lower negative impact, if I can just describe it, that perspective.

Speaker #4: And so it'll go through the year , but it'll be , you know , you'll see that improvement just in a , in a lower negative impact .

Speaker #4: If I can just describe it , that perspective

David McFadgen: Okay. When do you expect to lap the regulatory impact on charitable eTab revenue?

Speaker #5: Okay . do you expect to lap the regulatory impact on the charitable etab revenue ?

John Pollard: You know, we made steady improvement in 2025 and we finished in the Q4 of 2025. We were still down about 10% from the 2024 level of play. I would suggest that based on our results over the last few months and the continuing trajectory of growth we're seeing that we will be positive to our level of 2024 play overall in 2026, for sure, we'll be positive. I mean, barring something else happening to the negative effect, but just based on what we're seeing the last few months and weeks, 2026 is gonna be positive to 2024.

Speaker #2: You know , we we made steady improvement in 2025 and we finished in the fourth quarter of 2025 . We were still down about 10% from the 2024 level of play And I would I would suggest that based on our results over the last few months and the continuing trajectory of growth , we're seeing that we will be positive to our level of 2024 .

Speaker #2: Play overall in 2026 , for sure will be positive . I mean , barring something else happening to the negative effect , but just based on what we're seeing in the last few months and weeks , 2026 is going to be positive to 2024 .

David McFadgen: Okay. Just lastly on the Michigan iLottery, that basically goes away on 1 July, right?

Speaker #5: Okay . And then just , just , just lastly , on the Michigan , Lottery , that that basically goes away on July 1st , right ?

John Pollard: Correct.

Speaker #2: Correct .

David McFadgen: Okay. That's it for me. Thank you.

Speaker #5: Okay . Okay . Okay . That's it for me . Thank you .

David McFadgen: Okay. That's it for me. Thank you.

Rob Rose: Thank you, David.

Speaker #2: Thank you David

Operator: There are no further questions at this time. I will now turn the call over to Doug Pollard for closing remarks.

Speaker #1: Downer for the questions . At this time . I will now turn the call over to Doug Pollard for closing remarks .

Doug Pollard: Okay. Well, thank you very much. As we said and as John has highlighted, 2025 was really a milestone year. A lot of very important developments, and it leaves us very excited about the future prospects of Pollard Banknote and our business. We look forward to continuing to expand into this lottery space in multiple ways, in the charitable gaming space. You know, it's a product mix that's always had great resilience and that we think is gonna be a really good place to be. We think we're in a very strong position to take advantage of these opportunities. Thankfully, you know, thanks to our relationships with many great lotteries and the tremendous employees that we have, and we appreciate all the shareholders of Pollard Banknote that are supporting us as we pursue that.

Speaker #2: Okay . Well , thank you very much . As we said and as John has highlighted , 2025 was really a milestone year .

Speaker #2: A lot of very important developments . And it leaves us very excited about the future prospects of Pollard Banknote and our business . And we look forward to continuing to expand into this lottery space in multiple ways .

Speaker #2: And the charitable gaming space , you know , it's a product mix that's always had great resilience . And that we think is going to be a really good place to be .

Speaker #2: And we think we're in a very strong position to take advantage of of these opportunities . Thankfully , you know , thank thanks to our our relationships with many great lotteries and the tremendous employees that we have .

Speaker #2: And we appreciate all the shareholders of Pollard Banknote that are supporting us as we pursue that . So that is all for for this .

Rob Rose: That is all for this. Thank you very much for your time, and have a great day.

Doug Pollard: That is all for this. Thank you very much for your time, and have a great day.

Speaker #2: And thank you very much for your for your time and have a great day

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Q4 2025 Pollard Banknote Ltd Earnings Call

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