Elauwit Connection, Inc. Common Stock 2026 Q2 Earnings Call

Please go ahead, sir. Thank you, and good morning to all.

Thank you for joining us today to discuss Elauwit's second quarter 2026 financial results and business update. The earnings release covering our 2Q 2026 results is now available on the investors page of our website at investors.elauwit.com. We plan to file our Form 10-Q in the next few days. I would encourage you to review the full text of the release and the accompanying financial tables in conjunction with today's discussion. This conference call is being webcast live and will be available for replay on our investors page. Speaking on the call today, our Executive Chairman, Dan McDonough, Chief Executive Officer, Barry Rubens, and Chief Financial Officer, James DiBartolo. We'll cover our prepared remarks on the business and financial results, then open a call for questions from our analysts and institutional investors.

Please note that during this call, management will make projections and other forward-looking statements regarding our future performance. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the earnings release, as well as other risks that are more fully described in Elauwit's filings with the SEC. Our actual results may vary materially from those projected in the forward-looking statements. We encourage you to review our filings with the SEC for additional information on factors that could cause actual results to differ from our current expectations. Elauwit specifically disclaims any intent or obligation to update these forward-looking statements except as required by law. We'll also reference adjusted EBITDA, which is a non-GAAP financial measure. A description of adjusted EBITDA, along with a reconciliation of adjusted EBITDA to the most comparable GAAP financial measure, can be found in our earnings release.

With that, I will now turn the call over to Dan.

Please go ahead. Thank you, Matt, and thank you to everyone who has joined today's call.

I'll begin today with an overview of the business trends. Barry will have a discussion around our operations, and James will provide a few highlights from the financial results. Then we'll open to questions from our analysts. The second quarter showed continued strong progress on the key metrics that will drive our growth in long-term recurring service revenue. We remain fully focused on execution, and the sales activity shows the traction in those efforts. In fact, we achieved record year-over-year and quarter-over-quarter increases in contracted units, with almost 5,900 new units across 21 properties contracted in the second quarter alone. For those tracking, that represents a 16% quarterly increase in contracted units and 33% annual. Year to date, we have signed more than 10,000 units, and the momentum continues into the third quarter.

Our activated units also grew substantially, rising 94% year-over-year, and billed units increased 163% year-over-year, supporting growth in our long-term recurring services revenue. While revenue declined in the short term, this was due to the timing of our construction contracts for new networks, which can occasionally have an outsized short-term effect on our quarters at the moment. They are lumpy and not evenly distributed throughout the year, as this quarter demonstrated. Even so, we believe we are still on track to our full-year goals, with more construction activity weighted to the second half this year versus the first half. As we scale, we expect to smooth out the quarters more as construction projects will likely become more evenly distributed through the year, and recurring services revenue will become a larger component of our overall revenue composition.

At that point, all of our key customer metrics that measure the overall pace of our business long term, new contracted units, activated units, and billed units increased significantly year-over-year as they did last quarter, and our contracted backlog for long-term services continued to grow. We also have good line of sight to potential new contract awards in our pipeline and contracts that have been verbally awarded ahead to us of formal contracting. The key takeaway here is that contracted units is the most important KPI we track. With now almost 43,000 units under contract through June 30th and a robust start to the third quarter, I fully expect to exceed 50,000 units under contract before year end. Doing so would achieve a more than 46% annualized increase in contracted units for 2026.

These wins will drive both construction revenue and long-term recurring revenue as we seek to build a robust and durable business at Elauwit. Before I hand the call over, I'll do a quick recap of our business for those still new to the story. At its core, the Elauwit model provides simplicity, service, and profit through differentiated broadband infrastructure services provided to multifamily properties in a nearly $26 billion market opportunity. Instead of residents choosing the service provider for just their unit through an inconvenient, expensive, and outdated process, we install and activate ubiquitous carrier-grade gigabit service via fiber and Wi-Fi 6 access throughout an entire property. The internet fee is then included in every new lease on the property as a standard cost, but usually at a savings compared to other market offerings.

The resident signs their lease, gets their keys, and the property-wide Wi-Fi passcode at the same time and is online before they even walk into their unit. Once installed, we generate long-lived recurring service revenue from these properties under a managed service or NaaS contract. That alone is a compelling case. We take it one step further by integrating the property owner into the monthly recurring revenue stream, which provides a source of profit, increased recurring cash flow, and higher value for their property. We call this the win-win-win model because it creates a compelling case for Elauwit across all three constituents in the transaction, the resident, the property owner, and our business.

This is a proven model with a large number of units already under contract, plus a rapidly growing pipeline of new installations ahead as more and more properties seek to expand revenue through added services. We are now moving ahead quickly to expand our service base and sales pipeline of targeted managed services and NaaS opportunities. In addition to the growth I noted at the start of my comments, our sales team has secured verbal commitments on additional properties, giving insight to our continued selling activity as we work a pipeline of hundreds of thousands of potential units. We also have increasing expected revenue visibility as we scale, with backlog of more than $38 million in construction and recurring service revenue. The first half of this year has also included a heavy focus on creating a more efficient operating structure.

Barry can speak to this more in a moment. We have invested in enhanced business intelligence such as next generation ERP and advanced inventory platforms to provide real-time visibility into business health and rigorous cost controls. We are also partnering with software development experts to bridge disparate systems, reducing duplicative data entry and reclaiming valuable leadership time. We are scaling our network operation center and account management teams to provide a consistent customer experience. We are implementing AI and LLM tools to integrate vendor platforms into a single pane of glass, accelerating root cause analysis and proactive service level resolution. We have structured our project management office into pods, specializing in new construction and conversions that pair senior project managers with on-site construction managers for seamless stakeholder reporting.

We are also prioritizing automation through custom and off-the-shelf tools to allow our network engineering team to provision and activate properties with unprecedented efficiency. With that, I will turn the call over to Barry.