Q1 2026 LiqTech International Inc Earnings Call

May 13, 2026

Speaker #1: International Reports first quarter fiscal year 2026 financial results conference call. After today's presentation, there will be an opportunity to ask questions. To submit a question, you may to submit a question, you may type it into the Ask a Question box on the webcast screen.

Speaker #1: Please note that this event is being recorded. I would now like to turn the conference over to Robert Blum with Lithium Partners. Please go ahead, sir.

Speaker #2: All right. Thank you very much, Operator, and good morning, everyone. thank you all for joining us on today's conference call. As the operator indicated, to discuss LIQTECH INTERNATIONALS first quarter 2026 financial results.

Speaker #2: Joining us on today's call from the company, our Fei Chen, Chief Executive Officer, and David Kowalczyk, the company's Chief Financial and Chief Operating Officer.

Speaker #2: Before I before I turn the call over to management, let me remind listeners that there will be a Q&A session at the end of the call.

Speaker #2: Again, to ask a question through the webcast portal, simply type your question, through the Ask a Question feature in the webcast player there. Before we begin with prepared marks, we submit for the record the following statement.

Speaker #2: This conference call may contain forward-looking statements. Although the forward-looking statements reflect the good faith and judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed during the call.

Speaker #2: The company, therefore, urges all listeners to carefully review and consider the various disclosures made in their reports filed with the Securities and Exchange Commission, including risk factors that attempt to advise interested parties of the risks that may affect their business, financial condition, operations, and cash flows.

Speaker #2: If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, the company's actual results may, vary materially from those expected or projected.

Speaker #2: The company, therefore, encourages all listeners not to place undue reliance on these forward-looking statements, which pertain only as of this date and the date of their release and conference call.

Speaker #2: The company assumes no obligation to update any forward-looking statements, to reflect any events or circumstances that may arise after the date of this release and conference call.

Speaker #2: Now, I'd like to turn the call over to Fei Chen, CEO of LIQTECH INTERNATIONAL. Fei, please proceed.

Speaker #3: Thank you, Robert. And good day to everyone on the call. The first quarter was in line with our expectations. And the representative continued to step forward in transition we have been describing over the past several quarters.

Speaker #3: Our focus remains on building a more balanced, repeatable, and ultimately more profitable LIQTECH by placing greater emphasis on in-the-market where our technology delivers clear value and where customer adoption can scale in a more predictable way.

Speaker #3: The year-over-year revenue comparison was impacted by a significant water for energy delivery in the first quarter of 2025. That did not repeat in the first quarter of 2026.

Speaker #3: As well as timing of older conversion. However, the underlying activities across the business were encouraging. Commercial pool marine DPF and the membrane all showed meaningful activity in the quarter.

Fei Chen: A significant water-for-energy delivery in Q1 2025 that did not repeat in Q1 2026, as well as timing of order conversion. The underlying activities across the business were encouraging. Commercial pool, marine, DPF, and membrane all showed meaningful activity in the quarter, and the new pool and marine orders are setting the stage for improved results in Q2 and throughout 2026. Compared to Q4 2025, revenue increased by 32%. Our growth margin expanded by roughly 1,290 basis points. The nature of our business and the sales cycle time means that all the improvements we have made in 2025 will show gradual improvements quarter over quarter in 2026.

Fei Chen: A significant water-for-energy delivery in Q1 2025 that did not repeat in Q1 2026, as well as timing of order conversion. However, the underlying activities across the business were encouraging. Commercial pool, marine, DPF, and membrane all showed meaningful activity in the quarter, and the new pool and marine orders are setting the stage for improved results in Q2 and throughout 2026. Compared to Q4 2025, revenue increased by 32%. Our growth margin expanded by roughly 1,290 basis points. The nature of our business and the sales cycle time means that all the improvements we have made in 2025 will show gradual improvements quarter over quarter in 2026.

Speaker #1: Significant water for energy delivery in the first quarter of 2025. That did not repeat in the first quarter of 2026. As well as timing of older conversion.

Speaker #3: And the new pool and marine orders are setting the stage for improved results, and the second quarter and throughout 2026. Compared to quarter four in 2025, revenue increased by 32%.

Speaker #1: However, the underlying activities across the business were encouraging. Commercial pool marine DPF and membrane all showed meaningful activity in the quarter, and the new pool and marine orders are setting the stage for improved results, in the second quarter and throughout 2026.

Speaker #3: Our gross margin expanded by roughly 1,290 basis points. The nature of our business and the sales cycle time means that all the improvements we have made in 2025.

Speaker #3: We'll show gradual improvements quarter over quarter in 2026. We are, therefore, reiterating our full year 2026 outlook for revenue of 23 million to 27 million.

Speaker #1: Compared to quarter 4 in 2025, revenue increased by 32%. Our gross margin expanded by roughly 1,290 basis points. The nature of our business and the sales cycle time means that all improvements we have made in 2025.

Speaker #3: David, we go through the financial details in a few minutes. So I will focus on operating progress, customer activity, and the strategic direction. The main message is that our strategy is advancing.

Speaker #1: We'll show gradual improvements quarter over quarter in 2026. We are therefore reiterating our full-year 2026 outlook for revenue of 23 million to 27 million.

Fei Chen: We are therefore reiterating our full year 2026 outlook for revenue of $23 million to $27 million. David will go through the financial details in a few minutes, so I will focus on operating progress, customer activity, and strategic direction. The main message is that our strategy is advancing. We are building around a portfolio of opportunities where our silicon carbide membrane technology can be deployed in repeatable platforms, supported by stronger service capabilities and scaled across geographies. Our commercial pool business continues to be one of the clearest examples of this strategy. During the Q1, pool delivery totaled revenue of $0.8 million, compared to $0.3 million in the Q1 2025.

Speaker #3: We are building around a portfolio of opportunities where our Silicon Carbon membrane technology can be deployed in repeatable platforms supported by stronger service capabilities and scaled across geographies.

Speaker #1: David, we go through the financial details in a few minutes. So I will focus on operating progress, customer direction. The main message is that our strategy is advancing.

Speaker #3: Our commercial pool business continues to be one of the clearest examples of this strategy. During the first quarter, pool deliveries totaled revenue of 0.8 million, compared to 0.3 million in the first quarter 2025.

Speaker #1: We are building around a portfolio of opportunities where our Silicon Carbon membrane technology can be deployed in repeatable platforms supported by stronger service capabilities and scaled across geographies.

Speaker #3: More importantly, the older activity we have announced since the beginning of the year reinforces our confidence that Clary Flow is getting traction as a differentiated solution for modern commercial aquatic facilities.

Speaker #1: Our commercial pool business continues to be one of the clearest examples of this strategy. During the first quarter, pool deliveries totaled revenue of 0.8 million, compared to 0.3 million in the first quarter 2025.

Speaker #3: In fact, based on our older book, we expect a record quarter for commercial swimming pool in quarter two 2026. A key milestone was our first US pool system order consisting of three systems to be installed at the Wiston County School District District District No.

Speaker #1: More importantly, the older activity we have announced since the beginning of the year reinforces our confidence that clearly flow is getting traction as a differentiated solution for more than commercial aquatic facilities.

Fei Chen: More importantly, the order activity we have announced since the beginning of the year reinforces our confidence that QlariFlow is getting traction as a differentiated solution for modern commercial aquatic facilities. In fact, based on our order book, we expect a record quarter for commercial swimming pool in Q2 2026. A key milestone was our first US pool system order, consisting of 3 systems to be installed at the Weston County School District #1 Aquatic Center in Newcastle, Wyoming. Entering the US market has been an important objective for us because it is a large market with aging infrastructure, high water quality expectations, and a growing need for more automated and space-efficient filtration solutions. We view this first US order as an important proof point that can help open additional opportunities over time. We also received consecutive record-setting pool system orders internationally.

Speaker #3: 1 Aquatic Center in Newcastle, Wyoming. Entering the US market has been an important objective for us. Because it is a large market with aging infrastructure, high water quality expectations, and a growing need for more automated and space-efficient filtration solutions.

Speaker #1: In fact, based on our older book, we expect a record quarter for commercial swimming pool in quarter 2, 2026. A key milestone was our first US pool system order consisting of three systems to be installed at the Wiston County School District No.

Speaker #3: We view this first US order as an important proof point that can help open additional opportunities over time. We also received consecutive record-setting pool system orders internationally.

Speaker #1: 1 Aquatic Center in Newcastle, Wyoming. Entering the US market has been an important objective for us. Because it is a large market with aging infrastructure, high water quality expectations, and a growing need for more automated and space-efficient filtration solutions.

Speaker #3: One was in partnership with LOTEC for a new large-scale commercial pool project in the header, Netherlands. The next was the follow-on record order in partnership with Waterco Limited for 10 systems for plum-ton aquatic and leisure center in Fraser Rice, Victoria, Australia.

Speaker #1: We view this first US order as an important proof point that can help open additional opportunities over time. We also received consecutive record-setting pool system orders internationally.

Speaker #3: These ones demonstrate that our solution is being adopted across different geographies project types and the partner channels. Clary Flow is well-suited to this market because it addresses several customer needs at the same time.

Speaker #1: One was in partnership with LOTEC for a new large-scale commercial pool project in Hedder, Netherlands. The next was the follow-on record order in partnership with Waterco Limited for 10 systems for plumb tube aquatic and leisure center in Fraser Rice, Victoria, Australia.

Fei Chen: One was in partnership with Lotec for a new large-scale commercial pool project in Den Haag, Netherlands. The next was a follow-on record order in partnership with Waterco Limited for 10 systems for Plumpton Aquatic and Leisure Center in Fraser Rise, Victoria, Australia. These wins demonstrate that our solution is being adopted across different geographies, project types, and partner channels. QlariFlow is well suited to this market because it addresses several customer needs at the same time. Our systems are compact, modular, and designed for stable water quality, automation, and efficient operation. For retrofit projects, the smaller footprint can be a meaningful advantage where equipment room space is limited. For new build facilities, the modular design gives customers a flexible solution that can be planned into the project from the beginning. From a business model perspective, pools are attractive because the systems are becoming more standardized and repeatable.

Speaker #3: Our systems are compact, modular, and designed for stable water quality automation and efficient operation. For retrofit projects, the smaller footprint can be a meaningful advantage.

Speaker #1: These ones demonstrate that our solution is being adopted across different geographies project types and the partner channels. Clearly flow is well-suited to this market because it addresses several customer needs at the same time.

Speaker #3: Where equipment, room space is limited, for new-build facilities, the modular design gives customers a flexible solution that can be planned into the project from the beginning.

Speaker #1: Our systems are compact, modular, and designed for stable water quality automation and efficient operation. For retrofit projects, the smaller footprint can be a meaningful advantage.

Speaker #3: From a business model perspective, pools are attractive because the systems are becoming more standardized and repeatable, this is different from a large one-off projects.

Speaker #1: We are equipped room space is limited. For new build facilities, the modular design gives can be planned into the project from the beginning. From a business model perspective, pools are attractive because the systems are becoming more standardized and repeatable.

Speaker #3: Which often require more customization and can be more difficult to forecast. As a pool adoption grows, we believe this vertical can contribute to better revenue visibility, improved execution, and a stronger margin profile over time.

Speaker #3: Our marine business also continued to build momentum. In the first quarter, we delivered two systems under the quarter for marine dual-fuel engine water treatment for LNG vessels.

Fei Chen: This is different from large one-off projects, which often require more customization and can be more difficult to forecast. As the pool adoption grows, we believe this vertical can contribute to better revenue visibility, improved execution, and a stronger margin profile over time. Our marine business also continued to build momentum in Q1. We delivered 2 systems under the quarter for marine dual-fuel engine water treatment for LNG vessels, and we expect 2 more systems to be delivered during Q2. Marine revenue totaled $0.8 million in Q1, compared to $0.2 million in Q1 2025. The growth in this vertical is being supported by our joint venture in China, which we believe can help drive more sustainable order flow throughout 2026.

Speaker #1: This is different from large one-off projects, which often require more customization and can be more difficult to forecast. As pool adoption grows, we believe this vertical can contribute to better revenue visibility, improved execution, and a stronger margin profile over time.

Speaker #3: And we expect two more systems to be delivered during the second quarter. Marine revenue totaled 0.8 million in the first quarter compared to 0.2 million in the first quarter 2025.

Speaker #1: Our marine business also continued to build momentum. In the first quarter, we delivered two systems under the quarter for marine dual fuel engine water treatment for LNG vessels, and we expect two more systems to be delivered during the second quarter.

Speaker #3: The growth in this vertical is being supported by our joint venture in China, which we believe can help drive more sustainable order flow throughout 2026.

Speaker #3: As we discussed on our last call, we have invested in local capabilities to support the marine market, including development and the localization activities and the regional service infrastructure.

Speaker #1: Marine revenue totaled 0.8 million in the first quarter compared to 0.2 million in the first quarter 2025. The growth in this vertical is being supported by our joint venture in China.

Speaker #3: This is important because the marine market requires reliable execution responsive service and a cost-competitive localized supply chain. We believe Silicon Carbon membrane technology has a strong fit in marine applications particularly for vessels equipped with a dual-fuel engines these vessels require advanced water treatment solutions that can support onboard wastewater purification and reuse.

Speaker #1: Which we believe can help drive more sustainable order flow throughout 2026. As we discussed on our last call, we have invested in local capabilities to support the marine market, including development and the localization activities and the regional service infrastructure.

Fei Chen: As we discussed on our last call, we have invested in local capabilities to support the marine market, including development and the localization activities and regional service infrastructure. This is important because the marine market requires reliable execution, responsive service, and a cost-competitive localized supply chain. We believe silicon carbide membrane technology has a strong fit in marine applications, particularly for vessels equipped with the dual-fuel engines. These vessels require advanced water treatment solutions that can support onboard wastewater purification and reuse. We are meeting demanding operating requirements. Marine is also attractive because it has the potential to become more repeatable as adoption grows. Each vessel project has its own delivery schedule, but the underlying system platform can be standardized and supported through our regional presence. Turning to water for energy and industry applications, our view remains balanced and disciplined.

Speaker #1: This is important because the marine market requires reliable execution responsive service and a cost-competitive localized supply chain. We believe Silicon Carbon membrane technology has a strong fit in marine applications particularly for vessels equipped with a dual fuel engines these vessels require advanced water treatment solutions that can support onboard wastewater purification and reuse.

Speaker #3: We are meeting demanding operating requirements. Marine is also attractive because it has the potential to become more repeatable as adoption grows. Each vessel project has its own delivery schedule.

Speaker #3: But the underlying system platform can be standardized and supported throughout our regional presence. Turning to water for energy and industry applications, our view remains balanced and disciplined.

Speaker #1: We are meeting demanding operating requirements. Marine is also attractive because it has the potential to become more repeatable as adoption grows. Each vessel project has its own delivery schedule, but the underlying system platform can be standardized and supported throughout our regional presence.

Speaker #3: Oil and gas continue to be an opportunity for LIQTECH, and our pipeline remains active. At the same time, as we have said before, the timing of larger projects can be difficult to predict.

Speaker #3: During the quarter, we commenced a new pilot program in West Texas, for produced water stream treatment with an energy services and solutions company. This type of field activity is important because it gives customers the opportunity to validate the performance of our technology in demanding operating conditions prior to their investment decision for large-size commercial projects.

Speaker #1: Turning to water for energy and industry applications, our view remains balanced and disciplined. Oil and gas continue to be an opportunity for LIQTECH and our pipeline remains active.

Fei Chen: Oil and gas continue to be an opportunity for LiqTech, and our pipeline remains active. At the same time, as we have said before, the timing of larger projects can be difficult to predict. During the quarter, we commenced a new pilot program in West Texas for produced water stream treatment with an energy services and solutions company. This type of field activity is important because it gives customers the opportunity to validate the performance of our technology in demanding operating conditions prior to their investment decision for large-size commercial projects. It allows us to further demonstrate the value proposition of silicon carbide membranes in produced water treatment. We continue to believe our technology is well-positioned for difficult water streams where durability, chemical resistance, and stable filtration performance are critical.

Speaker #1: At the same time, as we have said before, the timing of larger projects can be difficult to predict. During the quarter, we commenced a new pilot program in Wist, Texas, for produced water stream treatment with an energy services and solutions company.

Speaker #3: And it allows us to further demonstrate the value proposition of Silicon Carbon membranes in produced water treatment. We continue to believe our technology is well-positioned for difficult water streams.

Speaker #1: This type of field activity is important because it gives customers the opportunity to validate the performance of our technology in demanding operating conditions prior to their investment decision for large size commercial projects and it allows us to further demonstrate the value proposition of Silicon Carbon membranes in produced water treatment.

Speaker #3: Where durability chemical resistance and stable filtration performance are critical. Produced water and industry wastewater are both areas where customers are looking for solutions that can handle high variability reduce operational disruptions and support environmental and water reuse objectives.

Speaker #1: We continue to believe our technology is well positioned for difficult water streams. We are due ability chemical resistance and stable filtration performance are critical.

Speaker #3: At the same time, we are being careful in how we allocate resources. We are not basing our operating plan on the timing of any single large oil and gas project.

Speaker #1: Produced water and industry wastewater are both areas where customers are looking for solutions that can handle high variability reduce operational disruptions and support environmental and water reuse objectives.

Fei Chen: Produced water and industry wastewater are both areas where customers are looking for solutions that can handle high variability, reduce operational disruptions, and support environmental and water reuse objectives. At the same time, we are being careful in how we allocate resources. We are not basing our operating plan on the timing of any single large oil and gas project. We will continue to pursue attractive opportunities, we will do so in a way that supports the broader strategy of building a more balanced business. Beyond systems, our DPF and membrane business and our plastics business remain important contributor to LiqTech. In Q1, DPF and membrane revenue increased to DKK 1.3 million from DKK 1 million in the prior year quarter. This was driven by strong order flow from both existing and the new customer following our renewed focus within this market vertical.

Speaker #3: We will continue to pursue attractive opportunities but we will do so in a way that supports the broader strategy of building a more balanced business.

Speaker #1: At the same time, we are being careful in how we allocate resources. We are not basing our operating plan on the timing of any single large oil and gas project.

Speaker #3: Beyond systems, our DPF and the membrane business and our plastic business remain important contributors to LIQTECH. In the first quarter, DPF and the membrane revenue increased to 1.3 million from 1 million in the prior year quarter.

Speaker #1: We will continue to pursue attractive opportunities but we will do so in a way that supports the broader strategy of building a more balanced business.

Speaker #3: This was driven by strong order flow from both existing and the new customer following our renewed focus within this market vertical. Plastic revenue increased approximately 5% in the quarter and the totaled about 1 million driven by strong external interest especially in food processing.

Speaker #1: Beyond systems, our DPF and the membrane business and our plastic business remain important contributors to LIQTECH. In the first quarter, DPF and the membrane revenue increased to 1.3 million from 1 million.

Speaker #1: In the prior year quarter, this was driven by strong order flow from both existing and the new customer following our renewed focus within this market vertical.

Speaker #3: Looking ahead, our priorities are clear. We are reiterating our 2026 outlook and remain focused on executing against the revenue growth and adjust EBITDA improvement we have communicated.

Fei Chen: Plastic revenue increased approximately 5% in the quarter and totaled about DKK 1 million, driven by strong external interest, especially in food processing. Looking ahead, our priorities are clear. We are reiterating our 2026 outlook and remain focused on executing against the revenue growth and adjusted EBITDA improvement we have communicated. The path to achieving this outlook is not depending on a single large oil and gas order. It is based on continued progress across commercial pool, marine industry application, and the components market with potential upside from water for energy as opportunities convert. The most important strategic priority is to improve the quality of our growth. Markets where solutions can be standardized, partners can extend our reach, service infrastructure supports customer confidence, and the volumes can support better margins. We believe the Q1 provide encouraging evidence that this transition is working. Pool orders are expanding geographically.

Speaker #1: Plastic revenue increased approximately 5% in the quarter and totaled about $1 million, driven by strong external interest, especially in food processing. Looking ahead, our priorities are clear.

Speaker #3: The path to achieving this outlook is not depending on a single large oil and gas order. It is based on continued progress across commercial pool, marine industry application, and the components market with potential upside from water for energy as opportunities convert.

Speaker #1: We are reiterating our 2026 outlook and remain focused on executing against the revenue growth and adjusted EBITDA improvement we have communicated. The path to achieving this outlook is not dependent on a single large oil and gas order.

Speaker #3: The most important strategic priority is to improve the quality of our growth. Marks where solutions can be standardized partners can extend our reach. Service infrastructure supports customer confidence and the volumes can support better margins.

Speaker #1: It is based on continued progress across commercial pool, marine industry application, and components market with potential upside from water for energy as opportunities convert.

Speaker #3: We believe the first quarter provide encouraging evidence that this transition is working. Poor orders are expanding geographically marine deliveries are increasing supported by China GV DPF and the membrane is benefit from renewed commercial focus and the water for energy remains active but we are approaching it with approach credit appropriated discipline.

Speaker #1: The most important strategic priority is to improve the quality of our growth. Marks where solutions can be standardized partners can extend our reach. Service infrastructure supports customer confidence and the volumes can support better margins.

Speaker #1: We believe the first quarter provide encouraging evidence that this transition is working. Poor orders are expanding geographically marine deliveries are increasing supported by China GV DPF and the membrane is benefit from renewed commercial focus.

Speaker #3: Let me now turn the call over to David to review the financials in more detail. I will then make a few close comments and look to open the call for your questions.

Fei Chen: Marine deliveries are increasing, supported by China JV, DPF, and membrane is benefit from renewed commercial focus. The water for energy remains active, but we are approaching it with appropriated discipline. Let me now turn the call over to David to review the financials in more detail. I will then make a few close comments and look to open the call for your questions. David?

Speaker #3: David? Thank you, Fei, and good day everyone. Let me take some time to walk through our first quarter financial results in a bit more detail.

Speaker #1: And the water for energy remains active but we are approaching it with approach created appropriated discipline. Let me now turn the call over to David to review the financials in more detail.

Speaker #3: And add some color to what was included in the press release. As Fei noted, the quarter was generally in line with our expectations. The expectations we provided in our year-end call.

Speaker #1: I will then make a few close comments and look to open the call for your questions. David?

Speaker #3: My remarks today will focus primarily on the year-over-year changes. For the first quarter, and on how those results fit in to the full-year outlook.

Speaker #2: Thank you, Fei. And good day everyone. Let me take some time to walk through our first quarter financial results in a bit more detail in the press release.

David Kowalczyk: Thank you, Fei, and good day everyone. Let me take some time to walk through our Q1 financial results in a bit more detail and add some color to what was included in the press release. As Fei noted, Q1 was generally in line with our expectations. The expectations we provided in our year-end call. My remarks today will focus primarily on the year-over-year changes for Q1 and on how those results fit into the full year outlook that we are reiterating today. Let's start with revenue. Revenue for Q1 2026 was DKK 4.1 million, compared with DKK 4.6 million in Q1 2025. This represents a decrease of 10.4%.

Speaker #3: That we are reiterating today. Let's start with revenue. So revenue for the first quarter of 2026 was 4.1 million. Compared with 4.6 million in the first quarter of 2025.

Speaker #2: As Fei noted, the quarter was generally in line with our expectations. The expectations we provided in our year-end call. My remarks today will focus primarily on the year-over-year changes.

Speaker #3: This represents a decrease of 10.4%. Broken down by verticals, sales for the year were as follows. Systems and aftermarket sales were 1.8 million, compared to 2.7 million in the prior year quarter.

Speaker #2: For the first quarter, and on how those results fit in to the full year outlook. That we are reiterating today. Let's start with revenue.

Speaker #2: So revenue for the first quarter of 2026 was 4.1 million. Compared with 4.6 million in the first quarter of 2025. This represents a decrease of 10.4%.

Speaker #3: DPF and membrane sales were 1.3 million, compared to 1.0 million in the prior year quarter. And finally, plastic components revenue was 1,000,000, compared to approximately 1,000,000 in the first quarter of '25.

David Kowalczyk: Broken down by verticals, sales for the year were as follows: Systems and aftermarket sales were $1.8 million compared to $2.7 million in the prior year quarter. DPF and membrane sales were $1.3 million, compared to $1.0 million in the prior year quarter. Finally, plastic components revenue was $1 million, compared to approximately $1 million in Q1 2025. The year-over-year revenue decline was solely attributable to lower system sales, specifically the fact that we had a significant order for energy delivery in Q1 2025. This did not repeat in Q1 2026. That comparison is important because the underlying activity in several of our priority areas was stronger than the headline revenue number might suggest. Within systems, both commercial pool and marine showed meaningful improvements.

Speaker #2: Broken down by verticals sales for the year were as follows. Systems and aftermarket sales were 1.8 million compared to 2.7 million in the prior year quarter.

Speaker #3: The year-over-year revenue decline was solely attributable to lower system sales. Specifically, the fact that we had a significant water for energy delivery in the first quarter of '25.

Speaker #2: DPF and membrane sales were 1.3 million compared to 1.0 million in the prior year quarter. And finally, plastic components revenue was 1 million compared to approximately 1 million in the first quarter of '25.

Speaker #3: This did not repeat in the first quarter of '26. That comparison is important because the underlying activity in several of our priority areas was stronger than the headline revenue number might suggest.

Speaker #2: The year-over-year revenue decline was solely attributable to lower system sales. Specifically the fact that we had a significant water for energy delivery in the first quarter of '25.

Speaker #3: commercial pool and marine showed meaningful improvements. Commercial pool revenue was approximately 0.8 million for the quarter compared with approximately 0.3 million in the prior year quarter.

Speaker #2: This did not repeat in the first quarter of '26. That comparison is important because the underlying activity in several of our priority areas was stronger than the headline revenue number might suggest.

Speaker #3: Marine revenue was also approximately 0.8 million compared with approximately 0.2 million in the first quarter of '25. Those increases were offset by the non-repeat of the larger water for energy delivery last year.

Speaker #2: Within systems, both commercial pool and marine showed meaningful improvements. Commercial pool revenue was approximately 0.8 million for the quarter compared with approximately 0.3 million in the prior year quarter.

David Kowalczyk: Commercial pool revenue was approximately $0.8 million for the quarter, compared with approximately $0.3 million in the prior year quarter. Marine revenue was also approximately $0.8 million, compared with approximately $0.2 million in Q1 of 2025. Those increases were offset by the non-repeat of the larger water for energy delivery last year. Outside of systems, DPF and membrane sales increased meaningfully, driven by strong order flow from both existing and new customers following our renewed focus within that market vertical. Components also increased during the quarter, supported by continued external interest, especially within food processing. These are important contributors because they provide a more stable base for recurring activities while we continue to scale the high growth system opportunities. Turning to gross margins. Gross profit for the quarter was $0.4 million, representing a gross margin of 9.5%.

Speaker #3: Outside of systems, DPF and membrane sales increased meaningfully. Driven by strong order flow from both existing and new customers. Following our renewed focus within that market vertical.

Speaker #2: Marine revenue was also approximately 0.8 million compared with approximately 0.2 million in the first quarter of '25. Those increases were offset by the non-repeat of the larger water for energy delivery last year.

Speaker #3: Components also increased during the quarter supported by continued external interest especially within food processing. These are important contributors because they provide a more stable base for recurring activities while we continue to scale the high-growth system opportunities.

Speaker #2: Outside of systems, DPF and membrane sales increased meaningfully. Driven by strong order flow from both existing and new customers. Following our renewed focus within that market vertical.

Speaker #3: Turning to gross margins. Gross profit for the quarter was 0.4 9.5%. That compares to a gross profit of 0.1 million or a gross profit of 2.7% in the first quarter of '25.

Speaker #2: Components also increased during the quarter supported by continue external interest especially within food processing. These are important contributors because they provide a more stable base for recurring activities while we continue to scale the high growth system opportunities.

Speaker #3: The improvement in gross margin is an important point. Even though total revenue was lower year-over-year, our gross profit dollars actually increased. And our gross margin expanded by roughly 280 basis points.

Speaker #2: Turning to gross margins. Gross profit for the quarter was $0.4 million, representing a gross margin of 9.5%. That compares to a gross profit of $0.1 million, or a gross margin of 2.7%, in the first quarter of '25.

David Kowalczyk: That compares to a gross profit of $0.1 million or a gross profit of 2.7% in Q1 2025. The improvement in gross margin is an important point. Even though total revenue was lower year-over-year, our gross profit dollars actually increased, and our gross margin expanded by roughly 280 basis points. The improvement was primarily driven by mix in system sales, better utilization of our manufacturing capacity, procurement efforts on prices, and lower depreciation expenses. As we have discussed before, we are still operating below the level, the revenue level, where our production platform can fully absorb fixed costs. As a result, our gross margin is not yet where we believe it can be over time.

Speaker #3: The improvement was primarily driven by mixed and system sales better utilization of our manufacturing capacity procurement efforts on prices and lower depreciation expenses. As we have discussed before, we are still operating below the level that the revenue level where our production platform can fully absorb fixed costs.

Speaker #2: The improvement in gross margin is an important point. Even though total revenue was lower year-over-year, our gross profit dollars actually increased. And our gross margin expanded by roughly 280 basis points.

Speaker #2: The improvement was primarily driven by mix and system sales, better utilization of our manufacturing capacity, procurement efforts on prices, and lower depreciation expenses. As we have discussed before, we are still operating below the revenue level where our production platform can fully absorb fixed costs.

Speaker #3: As a result, our gross margin is not yet where we believe it can be over time. That said, the first quarter shows the benefit of improving mix.

Speaker #3: Continued operating discipline and greater focus on repeatable applications where our cost structure and system design can become more efficient as volume increases. Gross margin improvement remained a key priority.

Speaker #2: As a result, our gross margin is not yet where we believe it can be over time. That said, the first quarter shows the benefit of improving mix.

Speaker #3: Scaling standardized system in commercial pool and marine along with continued strength in our component business should help support a better margin profile as we move through 2026.

David Kowalczyk: That said, the first quarter shows the benefit of improving mix, continued operating discipline, and greater focus on repeatable applications where our cost structure and system design can become more efficient as volume increases. Gross margin improvements remain a key priority. Scaling standardized system in commercial pool and marine, along with continued strength in our component business, should help support a better margin profile as we move through 2026. Turning to operating expenses. The total operating expenses for the first quarter were $2.7 million, compared to $2.3 million in the first quarter of 2025. Approximately 60% of this increase was related to foreign exchange development. Of course, the majority of our cost base is denominated in Danish kroner or euros. The year-over-year currency movement affected how expenses translate into US dollars. Breaking operating expenses down by category.

Speaker #2: Continued operating discipline and greater focus on repeatable applications where our cost structure and system design can become more efficient as volume increases. Gross margin improvement remained a key priority.

Speaker #3: Turning to operating expenses. The total operating expenses for the first quarter were 2.7 million. Compared to 2.3 million, in the first quarter of '25.

Speaker #2: Scaling standardized systems in commercial pool and marine, along with continued strength in our component business, should help support a better margin profile as we move through 2026.

Speaker #3: Approximately 60% of this increase was related to foreign exchange development. Because the majority of our cost-based is denominated in Danish kroner or euros, the year-over-year currency movement affected how expenses translate into US dollars.

Speaker #2: Turning to operating expenses. The total operating expenses for the first quarter were 2.7 million. Compared to 2.3 million, in the first quarter of '25.

Speaker #3: Breaking operating expenses down by category. Selling expenses for the first quarter were 1.0 million, compared to 0.7 million in the prior year quarter. Excluding foreign exchange effects, the increase was primarily related to the full-year effect of hires within our Chinese joint venture as well as continued investment in the sales organization across the United States and Europe.

Speaker #2: Approximately 60% of this increase was related to foreign exchange development. Because the majority of our cost-based is denominated in Danish kroner or euros, the year-over-year currency movement affected how expenses translate into US dollars.

Speaker #2: Breaking operating expenses down by category. Selling expenses for the first quarter were 1.0 million compared to 0.7 million in the prior year quarter. Excluding foreign exchange effects, the increase was primarily related to the full year effect of hires within our Chinese joint venture as well as continued investment in the sales organization across the United States and Europe.

David Kowalczyk: Selling expenses for Q1 were $1.0 million, compared to $0.7 million in the prior year quarter. Excluding foreign exchange effects, the increase was primarily related to the full year effect of hires within our Chinese joint venture, as well as continued investment in the sales organization across the United States and Europe. General and administrative expenses were $1.4 million, compared to $1.4 million in Q1 2025. Adjusting for foreign exchange development, G&A expenses remained stable and below general inflation. We continue to manage overhead carefully, and the filling of open position was balanced by savings in other areas. Research and development expenses were $0.3 million, compared to $0.2 million in the prior year quarter. The increase was primarily tied to membrane development costs and development work related to marine systems.

Speaker #3: General and administrative expenses were 1.4 million, compared to 1.4 million in the first quarter of '25. Adjusting for foreign exchange development, G&A expenses remained stable and below general inflation.

Speaker #3: We continue to manage overhead carefully and the filling of open position was balanced by savings in other areas. Research and development expenses were 0.3 million, compared to 0.2 million in the prior year quarter.

Speaker #2: General and administrative expenses were 1.4 million compared to 1.4 million in the first quarter of '25. Adjusting for foreign exchange development, G&A expenses remained stable and below general inflation.

Speaker #3: The increase was primarily tied to membrane development costs and development work related to marine systems. Overall, our approach to operating expenses remains disciplined. We are investing where we see clear commercial returns particularly in sales coverage marine development and capabilities that support the scaling of repeatable system platforms.

Speaker #2: We continue to manage overhead carefully and the filling of open position was balanced by savings in other areas. Research and development expenses were 0.3 million compared to 0.2 million in the prior year quarter.

Speaker #2: The increase was primarily tied to membrane development costs and development work related to marine systems. Overall, our approach to operating expenses remains disciplined. We are investing where we see clear commercial returns particularly in sales coverage marine development and capabilities that support the scaling of repeatable system platforms.

Speaker #3: At the same time, we are carefully managing overhead and focusing resources on the areas of the business that are most important to our path towards profitability.

David Kowalczyk: Overall, our approach to operating expenses remains disciplined. We are investing where we see clear commercial returns, particularly in sales coverage, marine development, and capabilities that support the scaling of repeatable system platforms. At the same time, we are carefully managing overhead and focusing resources on the areas of the business that are most important to our path towards profitability. Other expenses for the quarter were DKK 0.4 million, compared to other expenses of DKK 0.2 million in the comparable period for 2025. The change was primarily attributable to losses on foreign exchange transactions due to the US dollar development compared to euro, lower interest income, and accrued interest on the senior promissory note, partly balanced by lower amortization of debt discount and a decrease of net interest expenses.

Speaker #3: Other expenses for the quarter were 0.4 million, compared to other expenses of 0.2 million in the comparable period for '25. The change was primarily attributable to losses on foreign exchange transactions due to the US dollar development compared to euro lower interest income and accrued interest on the senior promissionary note partly balanced by lower amortization of debt discount and a decrease of net interest expenses.

Speaker #2: At the same time, we are carefully managing overhead and focusing resources on the areas of the business that are most important to our path towards profitability.

Speaker #2: Other expenses for the quarter were 0.4 million compared to other expenses of 0.2 million in the comparable period for '25. The change was primarily attributable to losses on foreign exchange transactions due to the US dollar development compared to euro lower interest income and accrued interest on the senior promissionary note partly balanced by lower amortization of debt discount and a decrease of net interest expenses.

Speaker #3: The loss for the first quarter of '26 was 2.7 million compared to a net loss of 2.4 million in the first quarter of '25.

Speaker #3: The year-over-year change was primarily driven by the higher operating expenses and other expense levels that are just discussed. Particularly offset by the improvement in gross profit.

Speaker #3: For the first quarter adjusted EBITDA was a negative 1.5 million, compared to a negative 1.4 million in the first quarter of '25. While the year-over-year comparison was relatively stable, we continue to believe the most important drivers of adjusted EBITDA improvements are revenue scale.

Speaker #2: The loss for the first quarter of '26 was 2.7 million compared to a net loss of 2.4 million in the first quarter of '25.

David Kowalczyk: The loss for Q1 2026 was DKK 2.7 million, compared to a net loss of DKK 2.4 million in Q1 2025. The year-over-year change was primarily driven by the higher operating expenses and other expense levels that I just discussed, particularly offset by the improvement in gross profit. For Q1, adjusted EBITDA was DKK -1.5 million, compared to DKK -1.4 million in Q1 2025. While the year-over-year comparison was relatively stable, we continue to believe the most important drivers of adjusted EBITDA improvements are revenue scale, stronger system mix, and increased utilization, and disciplined operating expense control. We are making investments in targeted areas, our objective remains to convert revenue growth into meaningful operating leverage as the year progresses. Turning to our outlook.

Speaker #2: The year-over-year change was primarily driven by the higher operating expenses and other expense levels that I just discussed. Particularly offset by the improvement in gross profit.

Speaker #3: A stronger system mix and increased utilization and disciplined operation expense control. We are making investments in targeted areas but our objective remains to convert revenue growth into meaningful operation operating leverage as the year progresses.

Speaker #2: For the first quarter adjusted EBITDA was a negative 1.5 million. Compared to a negative 1.4 million, in the first quarter of '25. While the year-over-year comparison was relatively stable, we continue to believe the most important drivers of adjusted EBITDA improvements are revenue scale.

Speaker #3: Turning to our outlook. We are reiterating our expectations for the full year of 2026 revenue to be in the range of 23 to 27 million.

Speaker #2: A stronger system mix and increased utilization and disciplined operation expense control. We are making investments in targeted areas but our objective remains to convert revenue growth into meaningful operation operating leverage as the year progresses.

Speaker #3: This would represent a growth of approximately 39 to 64 percent compared to full year '25. As Fei discussed, the growth outlook is expected to be driven primarily by commercial pool marine and continued activity across water for energy and industrial applications.

Speaker #2: Turning to our outlook. We are reiterating our expectations for the full year of 2026 revenue to be in the range of 23 to 27 million.

David Kowalczyk: We are reiterating our expectations for the full year of 2026 revenue to be in the range of DKK 23 to 27 million. This would represent a growth of approximately 39% to 64% compared to full year 2025. As Fei discussed, the growth outlook is expected to be driven primarily by commercial pool, marine, and continued activity across water for energy and in this industrial applications, supported by stable contributions from DPF and membranes and plastic components. We expect improved pool results in Q2 and through 2026, supported by recent order activity, including the first US pool system order and additional larger international pool projects. In marine, we delivered 2 systems during Q1 and expect 2 more systems to be delivered during Q2, with further sustainable order flow expected through the year, supported by our Chinese joint venture.

Speaker #3: Supported by stable contributions from DPF and membranes, and plastic components. We expect improved pool results in the second quarter and through 2026. Supported by recent order activity including the first US pool system order and additional larger international pool projects.

Speaker #2: This would represent a growth of approximately 39 to 64 percent compared to full year '25. As Fei discussed, the growth outlook is expected to be driven primarily by commercial pool marine and continued activity across water for energy and industrial applications.

Speaker #3: In marine, we delivered two systems during the first quarter and expect two more systems to be delivered during the second quarter with further sustainable order flow expected through the year.

Speaker #2: Supported by stable contributions from DPF and membranes and plastic components. We expect improved pool results in the second quarter and through 2026. Supported by recent order activity including the first US pool system order and additional larger international pool projects.

Speaker #3: Supported by our Chinese joint venture. The quarterly cadence of revenue will continue to be influenced by system and delivery time. As a result, we do not view the first quarter as a full year indicator.

Speaker #2: In marine, we delivered two systems during the first quarter and expect two more systems to be delivered during the second quarter. With further sustainable order flow expected through the year.

Speaker #3: We remain focused on executing against backlog converting the order pipeline and maintaining cost discipline as the business scales. And finally, from a CAS perspective, we ended the first quarter with cash on hand including restricted cash of 2.7 million.

Speaker #2: Supported by our Chinese joint venture. The quarterly cadence of revenue will continue to be influenced by system and delivery time. As a result, we do not view the first quarter as a full year indicator.

David Kowalczyk: The quarterly cadence of revenue will continue to be influenced by system and delivery time. As a result, we do not view the Q1 as a full year indicator. We remain focused on executing against backlog, converting the order pipeline, and maintaining cost discipline as the business scales. Finally, from a cash perspective, we ended the Q1 with cash on hand, including restricted cash, of $2.7 million as of 31 March 2026. Our focus remains on disciplined cash management and careful allocation of resources. We are aligning spending with the verticals that we believe can support repeatable growth, improved margin performance, and better revenue visibility over time. As we move through 2026, we will continue to balance investments in growth with the need to preserve flexibility and drive the business towards positive adjusted EBITDA.

Speaker #3: As of March 31, 2026. Our focus remains on disciplined cash management and careful allocation of resources. We are aligning spending with the verticals that we believe can support repeatable growth, improved margin performance, and better revenue visibility over time.

Speaker #2: We remain focused on executing against backlog converting the order pipeline and maintaining cost discipline as the business scales. And finally, from a cash perspective, we ended the first quarter with cash on hand including restricted cash of 2.7 million.

Speaker #3: As we move through '26, we will continue to balance investments in growth with the need to preserve flexibility and drive the business towards positive adjusted EBITDA.

Speaker #2: As of March 31, 2026. Our focus remains on disciplined cash management and careful allocation of resources. We are aligning spending with the verticals that we believe can support repeatable growth improved margin performance and better revenue visibility over time.

Speaker #3: And with that, let me now turn the call back to Fei.

Speaker #2: Thank you, David. Before we open the call for questions, I want to reiterate that our first quarter results were in line with our expectations and reflect continued progress against our strategic plan.

Speaker #2: As we move through '26, we will continue to balance investments in growth with the need to preserve flexibility and drive the business towards positive adjusted EBITDA.

Speaker #2: We are building LIQTECH around end-markets that can support more predictable repeatable growth, particularly commercial pool marine DPF membrane and plastic compound. We believe the results in this year will continue to highlight this transition.

Speaker #2: And with that, let me now turn the call back to Fei.

David Kowalczyk: With that, let me now turn the call back to Fei.

Speaker #1: Thank you, David. Before we open the call for questions, I want to reiterate that our first quarter results were in line with our expectations and reflect continued progress against our strategic plan.

Fei Chen: Thank you, David. Before we open the call for questions, I want to reiterate that our Q1 results were in line with our expectations and reflect continued progress against our strategic plan. We are building LiqTech around end markets that can support more predictable, repeatable growth, particularly commercial pool, marine, DPF membrane, and plastic compound. We believe the results in this year will continue to highlight this transition. At the same time, we remain encouraged by the long-term opportunity in water for energy. We are being disciplined in how we plan the business and allocate resources. Our focus is on markets where our silicon carbide technology delivers clear performance advantages and where we can scale profitably. With that, Robert, we would be happy to take any questions.

Speaker #2: At the same time, we remain encouraged by the long-term opportunity in water for energy. But we are being disciplined in how we plan the business and allocate resources.

Speaker #1: We are building LIQTECH around end markets that can support more predictable repeatable growth particularly commercial pool marine DPF membrane and plastic compound. We believe the results in this year will continue to highlight this transition.

Speaker #2: Our focus is on markets where our silicon carbon technology delivers clear performance advantages and where we can scale profitably. With that, Robert, we would be happy to take any questions.

Speaker #1: At the same time, we remain encouraged by the long-term opportunity in water for energy. But we are being disciplined in how we plan the business and allocate resources.

Speaker #3: Thank you very much, Fei, and David, for your prepared remarks there. As a reminder to everyone listening through the webcast portal there, if you would like to ask a question, you can type it into the Ask a Question feature on the webcast player.

Speaker #1: Our focus is on markets where our silicon carbon technology delivers clear performance advantages and where we can scale profitably. With that, Robert, we would be happy to take any questions.

Speaker #3: We do have a few questions already in the queue here, so Fei and David, I'll begin. First question here is, what does a "steady state margin" structure look like for the new LIQTECH?

Speaker #2: Thank you very much, Fei and David, for your prepared remarks. As a reminder to everyone listening through the webcast portal, if you would like to ask a question, you can type it into the 'Ask a Question' feature on the webcast player.

Robert Blum: Thank you very much, Fei and David, for your prepared remarks there. As a reminder to everyone listening through the webcast portal there, if you would like to ask a question, you can type it into the Ask a Question feature on the webcast player. We do have a few questions already in the queue here, so, Fei and David, I'll begin. First question here is, what does a, quote, steady state margin structure look like for the new LiqTech? How should we model gross margins?

Speaker #3: How should we model gross margins?

Speaker #4: Yeah, that's a good question. And so essentially what we have told before and what you can say continue to see is that on a project basis, we are realizing margins between 30 to 50 percent.

Speaker #2: We do have a few questions already in the queue here, so Fei and David, I'll begin. First question here is, what does a "steady state margin" structure look like for the new LIQTECH?

Speaker #4: So essentially you can say on average 40 percent. So with a volume increase, we should be closing in on a steady state margin of 40.

Speaker #4: Of course, on top of that, with a volume increase, you will see additional scaling effects, leaving you can say opportunity open for lowering the production cost further for systems and membranes.

Speaker #2: How should we model gross margins?

Speaker #3: Yeah, that's a good question. And so essentially what we have told before and what you can say continue to see is that on a project basis, we are realizing margins between 30 to 50 percent.

David Kowalczyk: Yeah, that's a good question. Essentially what we have told before and what we, you can say, continue to see is that on a project basis, we are realizing margins between 30% to 50%. Essentially you can say on average 40%. With the volume increase, we should be closing in on a steady state margin of 40%. Of course, on top of that, with the volume increase, you will see additional scaling effects, leaving, you can say, opportunity open for lowering the production cost further for systems and membranes.

Speaker #3: Okay, very good. There are a few questions here regarding guidance for the year, so I'll try to combine them together. You are guiding revenue of 19 to 23 million dollars.

Speaker #3: So essentially you can say on average 40 percent. So with a volume increase, we should be closing in on a steady state margin of 40.

Speaker #3: Of course, on top of that, with a volume increase, you will see additional scaling effects, leaving, you can say, opportunity open for lowering the production cost further for systems and membranes.

Speaker #3: For the rest of the year here, which implies 6.3 to 7.6 million per quarter. What are the major drivers of this steep revenue growth and how much does water for energy or industry contribute to this revenue?

Speaker #2: Okay, very good. There are a few questions here regarding guidance for the year, so I'll try to combine them together. You are guiding revenue of 19 to 23 million dollars.

Robert Blum: Okay. Very good. There are a few questions here regarding guidance for the year, I'll try to combine them together. You are guiding revenue of DKK 19 to 23 million for the rest of the year here, which implies DKK 6.3 to 7.6 million per quarter. What are the major drivers of this steep revenue growth, and how much does water for energy or industry contribute to this revenue?

Speaker #4: And Robert, that was a very good question and your numbers correct. And the first quarter, we do not have very much contribution from water for energy and water for industry.

Speaker #2: For the rest of the year here, which implies 6.3 to 7.6 million per quarter. What are the major drivers of this steep revenue growth and how much does water for energy or industry contribute to this revenue?

Speaker #4: But we do have a pipeline with some very interesting projects with high probabilities. So we expect when the year going forward, we will see some projects go through from these two areas, water for energy and water for industry.

Fei Chen: Robert, that was a very good question, and your numbers correct. In Q1, we do not have very much contribution from water for energy and water for industry, but we do have a pipeline with some very interesting projects with high probabilities. We expect in the year going forward, we will see some projects go through from these two areas, water for energy and water for industry. Very importantly also, we see really significant growth in our pool, commercial pools, marine, and also DPF and membrane for the rest of the year. This whole together will contribute the increase quarter by quarter.

Speaker #3: And Robert, that was a very good question, and your numbers are correct. In the first quarter, we do not have very much contribution from Water for Energy and Water for Industry.

Speaker #4: But very importantly, also we see really significant growth in our commercial pools, marines, and also DPF and the membrane for the rest of the year.

Speaker #3: But we do have a pipeline with some very interesting projects with high probabilities. So we expect when the year going forward, we will see some project go through from these two areas, water for energy and water for industry.

Speaker #4: So this whole together will contribute the increase quarter by quarter.

Speaker #3: Okay, very good. And as a sort of extension of that, do you have any information you could provide relating to how revenue will be distributed between Q2, Q3, and Q4?

Speaker #3: But very importantly also, we see really significant growth in our commercial pools, marines, and also DPF, and the membrane for the rest of the year.

Speaker #4: Yes. So we definitely and as we said, you can say also in the presentation of the result, we expect the implementations of you can say changes in how we operate in '25 to show gradual improvements through '26.

Speaker #3: So this whole together will contribute the increase quarter by quarter.

Speaker #2: Okay, very good. And as a sort of extension of that, do you have any information you could provide relating to how revenue will be distributed between Q2, Q3, and Q4?

Robert Blum: Okay, very good. As a sort of extension of that, do you have any information you can provide relating to how revenue will be distributed between Q2, Q3, and Q4?

Speaker #4: So we definitely do expect to see a gradual ramp-up. But also with the Q2, you can say increase compared to Q1 of this year already.

Speaker #2: Yeah, I would like to add, as I mentioned in my speech before, if we look at our order book, we already can see for example, for marine and especially commercial pool system, we already have very strong order book.

Speaker #3: Yes. So we definitely and as we said, you can say also in the presentation of the result, we expect the implementations of you can say changes in how we operate in '25 to show gradual improvements through '26.

David Kowalczyk: Yes. We definitely and, as we said, you can say also in the presentation of the result, we expect the implementations of, you can say, changes in how we operate in 2025 to show gradual improvements through 2026. We definitely do expect to see a gradual ramp up, but also with the Q2, you can say increase compared to Q1 of this year already.

Speaker #2: So we know at the quarter two for the commercial pool, we'll be a record quarter on revenue because there's a time difference between the commercial order and the revenue conversion.

Speaker #3: So we definitely do expect to see a gradual ramp-up. But also with the Q2, you can say increase compared to Q1 of this year already.

Speaker #1: Yeah, I would like to add, as I mentioned in my speech before, if we look at our order book, we already can see for example, for marine and especially commercial pool system, we already have very strong order book so we know at the quarter two for the commercial pool, we'll be a record quarter on revenue because there's a time difference between the commercial order and the revenue conversion.

Fei Chen: Yeah. I would like to add, as I mentioned in my speech before, if we look at our order book, we already can see, for example, for marine and especially commercial pool system, we already have very strong order book. We know at the Q2 for the commercial pool will be a record quarter on revenue because there's a time difference between the commercial order and the revenue conversion. That's, you know, always make it complicated when the revenue is coming. We have a very strong order book, so we can really see what's happening next quarter.

Speaker #2: And that's always make it complicated when the revenue is coming in. But we have a very strong order book so we can really see what's happening next quarter.

Speaker #3: All right, very good. Again, once as a reminder, if you'd like to ask a question, feel free to type it into the Ask a Question feature on the webcast player.

Speaker #3: And if there are any follow-ups that need to be submitted, please send those along as well. Next question here is regarding commercial pools. The order that you highlighted in the Netherlands is for a new pool.

Speaker #1: And that's always makes it complicated when the revenue is coming in. But we have a very strong order book so we can really see what's happening next quarter.

Speaker #3: This person's understanding is that you focused on retrofits. Is new sales a new opportunity for the company?

Speaker #2: All right, very good. Again, once as a reminder, if you'd like to ask a question, feel free to type it into the ask a question feature on the webcast player and if there are any follow-ups that need to be submitted, please send those along as well.

Robert Blum: All right. Very good. Again, as a reminder, if you'd like to ask a question, feel free to type it into the Ask a Question feature on the webcast player. If there are any follow-ups that need to be submitted, please send those along as well. Next question here is regarding commercial pools. The order that you highlighted in the Netherlands is for a new pool. This person's understanding is that you focused on retrofits. Is new sales a new opportunity for the company?

Speaker #4: That's a very, very good question. I mean, two years ago, I think our pool system has been very much focused on the retrofit. It's very much depends on the distributors because at that time, our distributor in the UK was Total Pool.

Speaker #2: Next question here is regarding commercial pools. The order that you highlighted in the Netherlands is for a new pool. This person's understanding is that you focused on retrofits.

Speaker #4: They are focused was and still is retrofit swimming pools. And now we have started building up the new distributors both in the UK with the Binary and also in LOTIC.

Speaker #2: Is new sales a new opportunity for the company?

Fei Chen: That's a very, very good question. I mean, 2 years ago, I think our pool system has been very much focused on the retrofit. It very much depends on the distributors because at that time, our distributor in UK was Total Pool. Their focus was, and still is, retrofit swimming pools. Now we have started building up the new distributors, both in UK with Barr + Wray and also in Lotec. They are the ones really very active, you know, both on the retrofit and the new project. Now we see the new projects also coming in. I would like to emphasize, we're actually working both on the retrofit and the new pool new build pools because our system has really strong advantages for both segments.

Speaker #3: That's a very, very good question. I mean, two years ago, I think our pool system has been very much focused on the retrofit. It's very much depends on the distributors because at that time, our distributor in the UK was Total Pool.

Speaker #4: They are the ones really very active both on the retrofit and the new project. So now we see the new projects also coming in.

Speaker #4: So I would like to emphasize we actually working both on the retrofit and the new built pools because our system has really strong advantages for both segments.

Speaker #3: They are focused was and still is retrofit swimming pools. And now we have started building up the new distributors, both in the UK with the Binary and also in LOTIC.

Speaker #3: All right, very good. I'm showing no further questions in the queue here. So with that, Fei, I will turn it back over to you for closing remarks.

Speaker #3: They are the ones really very active both on the retrofit and the new project. So now we see the new projects also coming in.

Speaker #3: So I would like to emphasize we actually working both on the retrofit and the new built pools because our system has really strong advantages for both segments.

Speaker #2: All right, very good. I'm showing no further questions in the queue here. So with that, Fei, I will turn it back over to you for closing remarks.

Robert Blum: All right. Very good. I'm showing no further questions in the queue here. With that, Fei, I will turn it back over to you for closing remarks.

Fei Chen: Thank you, Robert. Thank you all very much for being with us today. We look forward to communicating with you soon again.