Live Oak Acquisition Corp. V Class A Ordinary Shares 2026 Q2 Earnings Call

Sir, please go ahead. Thank you, Michelle, and good morning, everyone.

Welcome to Teamshares' Second Quarter 2026 Earnings Conference Call. Joining me today are Co-founder and CEO, Michael Brown, Co-founder and President, Alex Eu, and CFO, Brian Gaebe. Earlier today, we issued a press release announcing our financial results, which is available on our investor relations website, along with a supplemental slide presentation. As referenced on Slide 2, we will be discussing non-GAAP financial measures during this call. The most directly comparable GAAP financial measures and a reconciliation of the differences between the GAAP and non-GAAP financial measures are available in our earnings release and supplemental slide presentation on our website. In addition, certain statements being made today are forward-looking statements that are based on management's current assumptions, beliefs, and expectations concerning future events impacting the company.

These forward-looking statements involve a number of uncertainties and risks, including but not limited to those described in our earnings release, Form 10-Q for the period ending June 30, 2026, and other filings with the SEC. The actual results of operations and financial condition of the company could differ materially from those expressed or implied in our forward-looking statements. With that, I'll turn the call over to Michael.

Michael? Good morning, everyone. Teamshares is the market leader in buying great businesses from retiring owners. 4.5 million small to mid-sized businesses in America and tens of millions globally have owners approaching retirement.

We plan to be a permanent home for thousands of the highest quality companies as their owners retire. Welcome to our first-ever earnings call as TMS begins day 38 of trading on the Nasdaq. With me today are two longtime business partners, Alex Eu, Co-founder and President of Teamshares, and Brian Gaebe, our CFO. Before getting into the two key results, and for the benefit of participants who are new to Teamshares, I'd like to start with context on our recent listing, our business model and growth opportunity, and some positive updates from our press release. Teamshares began trading on June 23, following a common equity raise led by T.

T. Rowe Price Investment Management, with participation from other institutional investors and the executive team. We founded Teamshares in 2019 to be public from the outset because of the direct benefits that public capital markets provide to Teamshares' growth strategy. And because the permanent nature of public equity and the long-term duration of the bond market align well with our model of being a permanent home for great businesses. As evidence of that commitment, we told Axios in early 2024 that Teamshares would be public in 2027, and we executed on our public company readiness infrastructure faster than anticipated. We believe Teamshares is among a relatively rare group of companies whose growth strategy directly benefits from being public. Public companies have better access to financing than private companies.

All public companies, of course, have access to public company capital, but its advantage is unevenly distributed among companies who are able to use financing to drive core business growth. Financing new acquisitions is the raw material of our growth, so being public is a strategic growth advantage for Teamshares. The capital cost differential between public and private companies is well known, though perhaps underappreciated is how wide the delta can be for emerging companies. In some cases, 50% or more for similar credit profiles. What is less obvious is the speed and certainty advantages public companies have over private companies. Private financing with banks and asset managers often takes four to six months from first contact to funding, with an elevated risk of failure until the very end of the process. C's in public companies arrange capital in weeks, and sometimes days, with high certainty.

It will take time for Teamshares to arrange capital within a few days, but I am very pleased to say that the speed and opportunity set change within a few weeks of going public, and we are excited about the capital formation journey ahead and our goal of building a large and enduring public company. Onto our business model and opportunity. Teamshares is a programmatic acquirer of small to mid-sized businesses focused on retiring owners. As a business model, we are a tech-enabled holding company. We like to say part holdco, part fintech. Holdco because we employ permanent ownership, consolidation, and aim to reinvest in compound cash flow to new acquisitions. Fintech because we build software to acquire and operate at scale. As a mental model, think of the many dozens of serial acquirers that have come before us.

Public companies that grow via smaller, frequent, private acquisitions and integrate them into a larger, diversified public company capable of faster than organic growth through reinvestment. The incentive for public programmatic acquirers differ markedly from those in temporary ownership models and short-term private roll-ups. You own the cash flow permanently and thus have an intrinsic need to buy reliable cash flows on reasonable terms that can endure for the long term. We think Teamshares differs from most publicly traded serial acquirers in five ways. Size. Our niche is $0.5 million to $5 million, smaller than many, if not most strategies, resulting in a bigger TAM. Sector. Acquisition strategies tend to focus on one to three industries. We deliberately employ a diversified industry strategy based on structural acquisition criteria to maximize our addressable market and mitigate single industry risk and shocks Succession.

By focusing on retiring owners, we address a bigger market with strong risk mitigation characteristics we've discussed in the past. Software. Our software helps us acquire at scale, sourcing 75,000 actively for sale companies per year, and supporting an efficient transaction process for the ones we buy. Our software also helps us operate at scale with financial visibility and employee stock alignment in every company. Which leads us to the fifth, is stock. We align employees with stock to protect and grow the cash flows and provide everyone a stake in the outcome. In just six years, we've grown to 93 companies and half a billion in consolidated revenue, so the platform is built and it's working. But there are 4.5 million businesses with owners approaching retirement, and our goal is to be a permanent home for thousands of them.

In my opinion, it's still the first inning of our growth, and we're on a long journey aiming to build a large enduring public company. To touch on our 2026 outlook, in the press release, we reaffirmed our 2026 guidance, which includes $40 million of acquired EBITDA. The North Star metric we focus on is pro forma adjusted EBITDA, which is akin to a run rate metric as if we'd owned all companies for the trailing 12-month period. That figure is $60 million. As of today, we have approximately $30 million of estimated annual EBITDA under LOI or letter of intent. Our active pipeline well exceeds the remaining path to $40 million.

To give you a sense of how quickly we can move as a company and how deep our inbound funnel is, we have grown the signed LOI count by about $20 million in the two months since completing our listing. Going public was a near full-time effort for many of the same people who work in acquisitions, capital, and accounting. There are a few important nuances of our model and business cycle that I want to telegraph to investors as they track our progress. The first is seasonality of closings. We have found that the second half of the year, particularly the fourth quarter, is very likely when acquisitions in the SME space close. The reason is that new business listings come to market after their corporate taxes are filed in the spring. So the natural timeline of the acquisition process puts things into the back half of the year.

When you couple that natural rhythm with the fact that our listing just finished a few weeks ago, we will be highly fourth Q weighted on closings this year. Second, as we earn the trust of public investors, we want to be clear that we will deliver on our annual outlook in a very dependable manner, but that we will avoid managing to the quarter, and we will not take shortcuts on diligence or legal documentation. And we'll communicate our year-end tracking through our backlog.