Gorilla Technology Group Inc. Ordinary shares 2026 Q2 Earnings Call

Good afternoon, everyone, and thank you for joining us. The first half of 2026 marks, for me, a very decisive step forward for Gorilla. The revenue increased 99%, nearly 100% year-on-year to about $78.4 million, effectively doubling in the first 12 months. More importantly, the momentum strengthened as the half progressed. Q2 revenues reached well over $50.1 million, which was a net increase of roughly 78% on Q1 and 138% from Q2 last year. We had originally expected, as we had promised to the market, about $33 million, which we upgraded to $44 million. We have exceeded that by another $6.1 million to nearly by 14%, which principally means that all the deliverables and certain milestones were completed earlier than anticipated. Personally, that is what execution looks like.

The challenge we have also had is that the operating performance and progression at the same time was also equally significant. Our reported operating loss narrowed from $41.1 million in Q1 to approximately $2.2 million in Q2, which was a reduction of 95%. A substantial part of the first quarter result was share-based compensation that has already been recognized, and more than 80% of the H1 share-based compensation was observed in the Q1 itself, and the quarterly charge declined by approximately about 78% in Q2. In plain simple English, Q1 carried the overwhelming majority of the burden. Q2 showed a much clearer picture of the operating momentum beneath it. Our cash efficiency also improved considerably. Whilst the revenue increased by approximately 100%, operating cash consumption declined by approximately 65%, from $12.5 million in H1 of 2025 to $4.3 million in H1 of 2026.

Operating cash usage also fell from 31.8% of the revenue to just 5.5%. These are very material important numbers, which we need to take into consideration. The company also recorded an overall increase in cash of approximately $79.8 million during the first half, principally reflecting financing support and the expansion program together with customer collection. So we ended June with roughly around $179.4 million in cash, approximately 82% above our Q1 closing half. That capital is not just sitting there politely in a bank and trying to get some interest rate. It is there to be deployed. What we are doing is that we are purchasing infrastructure, securing capacity, preparing sites, building teams, and funding the deposits and working capital required to deliver projects of a scale Gorilla has never previously undertaken.

Just FYI, we are preparing currently about five different sites in parallel, and that takes a humongous effort. At the same time, we also understand that the cash balances will move between the reporting periods. Investors should distinguish between cash being consumed by an underperforming operation and capital being deliberately deployed into contracted projects and revenue-generating infrastructure. They are not remotely the same thing, however convenient it may be for some people to pretend otherwise. This investment phase also explains the current gross margin profile as well. Our gross margin had reflected revenue mix weighted towards hardware, initial deployment, and project mobilization. What I need to make sure is that Gorilla also deployed more than $14.1 million into property and equipment. Currently, that number is $29.4 million. We are also building the install base first.

As the infrastructure is commissioned, customer workloads migrate, utilization increases, and we expect the revenue mix to broaden towards compute, monitoring, managed services, and all other associated services. Hardware, personally, guys, does not begin producing its full financial results the moment it leaves the factory. It must be delivered, it has to be installed, it has to be powered, it has to be tested, it has to be accepted by the customer, and more importantly, then the utilization happens. More importantly, we want to make sure that we are moving very quickly. In terms of updates, I think the market has been asking me for updates for a long time. For Yotta phase one, for example, the testing has been completed. The equipment deliveries are underway and deployment has commenced. Testing will commence by the end of this week, early next week.

Yotta phase two, the equipment is currently being manufactured, with completion expected over the next 25 to 30 days. In Indonesia and Batam, we are working very closely with our OEM and infrastructure partners. We have, as everybody knows, secured substantial data center space, and we are targeting approximately another 200 megawatts of capacity with an initial ready for service in the middle of 2027. The broader deployment expected to be in the second half of 2027. At Korat in Thailand, the land has been cleared. We are advancing with the financing, the GP procurement, the infrastructure requirements, while engaging with prospective off-takers with the objective of moving into a discussion into firm customer contracts. To be absolutely clear, megawatts are not just capacity, they are revenue. More importantly, the capacity must be commissioned. It has to be contracted. It has to be utilized.

Now, our accountants remain very stubbornly unwilling to accept that electricity as a payment, so unfortunately, we have to make sure that the customers pay us at a given point of time. Alongside these major infrastructure programs, our established security and network intelligence operations remain an important part of Gorilla Technology Group. They provide not just the customer relationships, they also provide a better delivery experience, cash collection that support our broader expansion. For people thinking that we're pivoting, we're not. We're not abandoning the business that brought us here. We are using it as a platform to build something substantially larger. For Q3, we're planning revenues between $48 million to $50 million compared to the previous plan of $36 million to $40 million. That represents a significant jump of about 20% to 39% than the earlier planning range.

For Q4, our operating plan is revenues exceeding well over $60 million to $70 million. Taken together with the H1 revenue of $78.4 million, our revenue outlook for 2026 now stands at at least $200 million, which is up from the $137 million to $200 million range we provided at the beginning of the year. Reaching the upper end requires additional execution, including further deliveries, customer, and workload activation. We intend to earn the upper end. I want to make sure that we're not simply announcing this, but we want to make it more and more useful as we go through the quarters. Looking further ahead into 2027, we're targeting revenues of about $450 million to $500 million. That's an ambitious target that represents a quarterly revenue of roughly $112 million to $125 million. We're not expecting the calendars to produce the growth for us.

The target depends on all of the capacity that's being installed now, the commissioning of the additional projects, the conversion of the prospective demand into contracts, and the migration of utilization of the customer workloads. There has been no shortage of personally barking from the sidelines. Unfortunately, that does not deliver GPUs for us, and neither does it commission data centers or collect dollars from customers. Our answer to all this will be execution. Gorilla Technology Group has entered the second half with substantially greater revenue scale, dramatically improved quarterly performance, stronger liquidity, and a growing portfolio of major international projects. We have more work to do. We are maintaining absolute delivery discipline. We're managing capital very carefully. We're improving utilization, converting opportunity into recognized revenue. Make no mistake, the direction of the travel now is unmistakable. So we're no longer explaining what Gorilla Technology Group intends to become.

We're beginning to demonstrate it. Thank you very much. Bruce, over to you.

Thank you, Jay. I think Jay hit on all of the highlights, but there are a couple of areas I want to expand on or emphasize. The first is, of course, the first half revenue of $78 million, 99% revenue growth. As you can hear from the guidance figures, Gorilla Technology Group is in hypergrowth mode in terms of revenues. We are happy with these figures, and we expect to see this kind of growth trajectory continue. Also, as Jay mentioned, the gross profit for the first half showed an investment into the business and also reflected a mix. As the mix improves, we expect to see an expansion of gross margins. The mix will improve in a couple of ways. The first is as Yotta one and the other GPU-as-a-service projects go live in the second half of the year. Those projects generate gross margins of 75% or more.

Of course, there will be an expansion in the overall gross margin of the business as a result, and then there will be significant operating leverage coming from that as well. That will flow through to the underlying economics as well. We mentioned some of the expense items. I would just like to highlight that this was not a normal first half. There were significant foreign exchange movements in the markets due to the Iran conflict and Liberation Day tariffs, and tariff wars even. As we have a significant exposure in foreign currency in the Middle East and in Southeast Asia, which were the two regions hardest hit by geopolitics and by tariffs, this did produce significant volatility in our underlying numbers.