John Roy

John Roy inquired about SOL Strategies' M&A strategy, seeking details on the types of acquisitions being considered and the company's future outlook regarding potential targets. He also asked how the new Liquid Staking Token (LST) fits into the existing staking business, whether it competes with native validation, and what revenue expectations are for the LST long-term.

Answer

Interim CEO Michael Hubbard explained that SOL Strategies is actively evaluating a strong M&A pipeline, considering both larger, revenue-generating businesses in the Solana infrastructure/product space and smaller teams with strong technological promise that could enhance internal engineering and business teams. Regarding the LST, Mr. Hubbard clarified that it serves as an aggregator layer, not competing with native validation but rather serving a different market segment by offering flexibility and supporting decentralization through algorithmic delegation to dozens of validators. He noted that the LST generates a new revenue stream via a 5% fee on all rewards from the liquid staking protocol, similar to a validator commission.

John Roy with Water Tower Research inquired about SOL Strategies' M&A strategy, seeking details on the types of acquisitions being evaluated and the future outlook. He also asked for clarification on how the newly launched stakeSOL Liquid Staking Token (LST) integrates with the existing native validation business, specifically addressing potential competition and long-term revenue expectations.

Answer

Interim CEO Michael Hubbard explained that SOL Strategies is actively evaluating both larger, revenue-generating businesses in the Solana infrastructure and product space, as well as smaller teams with strong potential and technology. Regarding stakeSOL, Mr. Hubbard clarified that it acts as an aggregator in the liquid staking market, serving a distinct segment from native validation, and generates a new revenue stream through a 5% fee on all rewards from the liquid staking protocol.

John Roy inquired about specific, trackable milestones for Sol Strategies' strategic initiatives beyond general institutional growth announcements, and also asked for the company's reaction to the MSCI announcement regarding DATs (Digital Asset Treasuries) not being excluded.

Answer

Michael Hubbard, Interim CEO of SOL Strategies, stated that current primary products include staking services for over 27,000 entities and white-label validator services, such as for Solana Mobile. He announced an upcoming product launch related to new staking products later this month and mentioned exploring other infrastructure services for institutions. Regarding the MSCI announcement, Mr. Hubbard noted he hadn't seen it but broadly stated it wasn't highly relevant to Sol Strategies as they don't consider themselves a DAT, focusing instead on infrastructure and revenue generation.

John Roy inquired about specific milestones SOL Strategies expects to achieve beyond institutional growth announcements, particularly regarding new products and infrastructure services. He also asked for management's reaction to the MSCI announcement regarding DATs not being excluded.

Answer

Interim CEO Michael Hubbard stated that current primary products are staking services and white-label validator services (e.g., for Solana Mobile). He announced an upcoming new product in the staking space later this month and mentioned exploring other infrastructure services for institutions on the Solana blockchain. Regarding the MSCI announcement, Michael Hubbard hadn't seen it but reiterated that SOL Strategies does not consider itself a DAT, focusing instead on building a revenue-generating infrastructure business rather than a pure treasury play.

John Roy from Water Tower Research inquired about Gorilla's strategy beyond 2026, specifically whether the sales team needs expansion to convert the substantial pipeline into backlog, further details on the pipeline's scope, and the company's plans for its significant cash reserves.

Answer

Chairman and CEO Jay Chandan stated that the sales teams are already well-established and expanding, with a massive hiring spree in Taiwan, Thailand, and India, and plans for acquisitions in India and the US. He shared a personal target of $500 million in annual revenue by 2027, emphasizing the need for strategic acquisitions to build capabilities and support this ambition. CFO Bruce Bower explained that the cash is earmarked for capital needs of major contracts, including performance guarantees and upfront CapEx, with active negotiations for bank financing and the balance sheet providing the equity component. He anticipates substantial cash generation in Q4.

John Roy inquired about Gorilla Technology Group's need to expand its sales team to convert its growing pipeline into backlog, sought insights into the pipeline's scope beyond 2026, and asked about the company's plans for utilizing its substantial cash reserves.

Answer

Chairman and CEO Jay Chandan stated that current sales teams are well-established, with significant internal involvement, and shared a personal target of $500 million in annual revenue by 2027, emphasizing the need for strategic acquisitions and a massive hiring spree in regions like India and the U.S. CFO Bruce Bower explained that the cash is primarily for capital needs related to major contracts, including performance guarantees and upfront CapEx for data center projects, with active negotiations for project-level financing to supplement the balance sheet. Mr. Chandan reiterated that acquisitions are focused on capability and scale, not just revenue, targeting hyper-growth markets like India and mature ecosystems like the U.S.

John Roy of Water Tower Research LLC asked for clarification on gross margin volatility and when it might stabilize, and also inquired about the company's U.S. efforts, particularly its relationship with Aecom.

Answer

Bruce Bower, CFO, explained that H1 gross margin was lower due to a higher hardware mix but reiterated the full-year 40% target based on the expected H2 mix, noting that full-year margins should stabilize over time. Jay Chandan, Chairman & CEO, added that the company is shifting to multi-year contracts to create more predictable revenue. Regarding U.S. efforts, Jay confirmed the ongoing work with Aecom and also highlighted relationships with Cisco, HPE, and NVIDIA.

John Roy from Water Tower Research inquired about the volatility in gross margins and when they might stabilize, and also asked for an update on the company's efforts in the U.S., particularly with its partner Aecom.

Answer

CFO Bruce Bauer explained that H1 gross margins were lower due to a higher mix of hardware deliveries, but he reaffirmed the full-year target of 40% as the mix shifts back towards software and services. CEO Jay Chandan added that the company's strategic shift to multi-year recurring revenue contracts will lead to more predictable and stable margins over time. Regarding U.S. efforts, Mr. Chandan confirmed the ongoing partnership with Aecom and also highlighted collaborations with Cisco, HPE, and NVIDIA, as well as the One Amazon project's U.S. tokenization strategy.

Inquired about the company's strategy to sustain its high growth rate and asked for details on the composition of the current backlog for 2025 and 2026.

Answer

The company detailed a six-part strategy for growth, including converting pipeline, securing long-term contracts, new partnerships, financial discipline, market visibility, and a strategic acquisition in Thailand. The 2025 backlog is $93M (mostly existing clients) and the 2026 backlog is $70M (mix of new and existing clients).

John Roy asked about the definitive steps Gorilla Technology is taking to sustain its high growth rate and requested more color on the composition of its current sales pipeline and backlog.

Answer

CEO Jay Chandan outlined a six-pronged strategy for sustained growth, focusing on converting its pipeline, executing multi-year contracts, entering new markets with new partners, maintaining financial discipline, increasing market visibility, and pursuing a strategic acquisition in Thailand. CFO Bruce Bower clarified the 2025 backlog is $93M, primarily from existing contracts, while the 2026 backlog currently stands at $70M from a mix of existing and new clients.

John Roy from Water Tower Research asked about the definitive steps Gorilla Technology is taking to sustain its high growth rate and requested more details on the composition of its current pipeline and backlog.

Answer

CEO Jay Chandan outlined a six-part strategy for sustained growth, including converting the pipeline, securing multi-year contracts, entering new markets, maintaining financial discipline, increasing market visibility, and pursuing a strategic acquisition in Thailand. CFO Bruce Bower specified that the 2025 backlog is $93 million, primarily from existing contracts, while the 2026 backlog currently stands at $70 million from a mix of existing and new clients.

John Roy from Water Tower Research LLC inquired about the primary drivers of the accelerating Lifeline activations and how Surgepays balances its strategic priorities and resource allocation between the Lifeline and LinkUp wireless businesses.

Answer

President & CEO Brian Cox explained that growth is driven by focusing on high-margin states with profitability similar to the former ACP program. He stated that the company prioritizes the 'known' and predictable revenue from Lifeline to achieve cash flow positivity quickly, viewing the market adoption for the prepaid LinkUp service as more of a 'grind' that requires a different, longer-term approach.

John Roy of Water Tower Research LLC inquired about the general feedback from enterprise users of Molecular Universe, what new features they are requesting, and the timeline and potential features for the next software release, such as cost and manufacturability inputs.

Answer

Qichao Hu, Founder, Chairman & CEO, responded that users are less focused on new features and more on leveraging the platform's accuracy to solve extremely difficult problems that human scientists have been unable to resolve. The primary test is its ability to deliver solutions beyond human capability. Hu projected the next version of Molecular Universe would be released around September or October, and it will include more accurate cell-level data to enhance prediction accuracy. He also confirmed that manufacturability considerations are being integrated into the system.

John Roy, on for Jared Shaw, asked CEO Jim Reuter about any positive or negative surprises with the bank's technology platform given his background. He also inquired about the loan yield outlook for 2025 and the bank's exposure to the senior living sector following the downgrade of two related credits.

Answer

CEO Jim Reuter responded that surprises have been positive, highlighting the quality of the team and the growth markets. He noted the bank's technology stack has all the necessary tools and can be better leveraged with a focus on organic growth. Deputy CFO David Redmon added that loan yields are expected to move modestly higher through 2025, excluding rate impacts. Mr. Reuter clarified that the bank does not view senior living as a 'vertical' and that the recent downgrades were credit-specific, not industry-related.

John Roy from Water Tower Research asked for color on the competitive landscape for FiscalNote's identified growth opportunities, questioning whether these were greenfield markets or if established players were already present.

Answer

President and COO Joshua Resnik clarified that the growth opportunities, particularly in international, are focused on better leveraging FiscalNote's existing proprietary global data sets and content. He explained the strategy is to drive deeper engagement and upsell with the current customer base through improved product experiences, rather than entering entirely new competitive arenas.

John Roy asked about the potential size of the market opportunity created by Microsoft's platform changes and requested a summary of Crexendo's main investment priorities for the upcoming year.

Answer

CEO Jeffrey Korn described the Microsoft opportunity as very large, positioning Crexendo as a leading alternative. CRO Jon Brinton noted it is a long-tail opportunity with end-of-life dates extending to 2029. Korn identified three key investment priorities: 1) continued investment in Oracle Cloud Infrastructure (OCI) for agility, 2) implementation of a new Oracle accounting system for scalability, and 3) a renewed focus on pursuing substantial acquisitions, supported by the company's strong cash position.