Guardforce AI Co., Limited FY2025 Earnings Call - AI push gathering steam, but sloppy math and mixed messaging raise red flags

Conference Call Operator, Call Moderator, Guardforce AI Co., Limited: Good morning. Welcome to the Guardforce AI Co., Limited Financial Results Conference Call for the year ended December 31st, 2025. Your hosts this morning are Chairwoman and Chief Executive Officer, Olivia Wang, and Financial Controller, Melody Yang. At the request of the company, today’s call is being recorded and will be available for replay on the investor relations section of the company’s corporate website, ir.guardforceai.com. You may also access the teleconference replay by dialing 1-844-512-2921 or 1-412-317-6671, referencing access ID 13760045, beginning three hours after the end of this event. The replay will be available until Tuesday, April 28th at 11:59 P.M. Eastern Time. Guardforce AI issued a press release this morning containing its 2025 fiscal year financial results, which is also posted on the company’s website.

If you have any questions after the call or would like any additional information about the company, please contact Skyline Corporate Communications Group at [email protected]. I would like to inform all parties that your lines will be placed in a listen-only mode until the question answers segment of this call begins. That segment will begin with questions that have been emailed in response to the company’s press release of April 16th, and will be followed by questions you can ask on this call via chat. You can submit online questions at any time today using the chat function of the webcast platform, and they’ll be answered after the presentation during the Q&A session. Simply type your question in the box and click send. At this point, I would like to turn the call over to Scott Powell, President of Skyline Corporate Communications Group. Please go ahead, Scott.

Scott Powell, President, Skyline Corporate Communications Group: Thank you, operator, and thanks everyone for joining us on this call. Before we begin, I’d like to read you our forward-looking statements provision. During today’s conference call, company representatives may make forward-looking statements. Any statements made in this presentation about future operating results or other future events are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Please note that actual results achieved by the company may differ materially from such forward-looking statements. A discussion of factors that could cause such differences appears in the Risk Factors sections of the company’s 20F. Now, Guardforce AI Chairwoman and CEO, Olivia Wang, will present an analysis of the company’s performance during fiscal 2025, including a report on recent business developments and updated business metrics, and then provide some outlook for fiscal 2026. Olivia?

Olivia Wang, Chairwoman and Chief Executive Officer, Guardforce AI Co., Limited: Thank you, Scott, and good morning, everyone. Thank you for joining us on Guardforce AI 2025 Financial Results Conference Call. Let me start with our business highlights in 2025. I am pleased to report that 2025 was a pivotal year for our company, a year marked by meaningful operational progress, including launching our AI-driven technology solutions, implementing smart solution business across Thailand, and growing our revenue as well as our legacy business retail client base. Let me begin with our technology initiatives. In April 2025, we launched our self-developed beta version AI agent, DeepVoyage Go. We call it DVGo, which was released to the public in early 2026. DVGo is a unique AI agent that assists travelers by understanding their needs and preferences, planning a trip, and producing an itinerary with all required services efficiently.

Most importantly, DVGo aims to turn the traveler’s subjective experiences and preferences into digital assets that can be shared with others and monetized. In July of 2025, we extended our traditional cash management service into in-store assets by launching our smart retail solution. By the end of the year, this service, which offers AI-guided customer traffic analysis and RFID inventory system, had been deployed at 13 retail stores across Thailand. In February of 2026, we signed a partnership to deploy smart retail solution at several additional locations of an international chain retailers. Our rollout’s expected to continue through 2027. Besides the vertical business development, horizontal acquisition is another growth line of GFAI.

In March of 2026, we expanded our AI implementation into the education and healthcare sectors through our acquisition of MGAI Limited, a pioneer in AI-driven solutions for pediatrics, speech therapy and rehabilitation in Asia. This acquisition positions us to capture a validated and growing market opportunity in these sectors, an opportunity with strong potential for cross-sector scalability and synergies across the platform. Now, turning to our legacy secured business. The business continued to perform well in 2025, increasing its revenue contribution by about 7% compared to 2024. Our client base has transitioned from being bank-dominated to diversified mix. As of now, 10 of our top 15 clients were retailers and commercial entities. Five years before, eight of 10 were banks. This shift, in turn, enhances our overall business stability and strengthens our long-term growth profile.

Also, in 2025, in order to better reflect our growth strategy and the evolving revenue mix, we updated our business metrics. Today, our business metrics were divided into two groups. The first group is our technology-driven businesses, which include AI robotics as a service and smart solutions. Within smart solutions, I mentioned we have Smart Cash as well as our smart retail solution. Our Smart Cash Solution is a great example of this process, as it integrates smart deposit infrastructure and digital reporting capability in order to improve accuracy, transparency, and efficiency from cash handling operations. More importantly, our AI-related agents represent the next layer of our evolution. It serves as an intelligent interface between users and the services, enabling real-time decision-making and personalized interaction.

Together with our underlying AI capabilities and platform infrastructure, we are moving towards a full stack architecture where services, intelligence, and user interaction are seamlessly connected into a unified system. Our second business group is our service business. Our legacy secured logistics, which encompasses our traditional services like cash management operations, coin processing, ATM management, and related offerings. This matrix delivers stable, contracted, and recurring revenue underpinned by long-term client relationships and high renewal rates. Growth in this business is managed through operational discipline, as revenue expansion is accompanied by corresponding increase in fuel, equipment, and manpower costs. In this context, maintaining consistent margin reflects strong execution. Overall, we believe that this updated matrix can give investors a clearer view of our revenue mix and how our growth is evolving in the long term. Now to review our financial highlights for 2025, here is our Financial Controller, Melody Yang.

Melody Yang, Financial Controller, Guardforce AI Co., Limited: Thank you, Olivia, and thanks again to everyone for joining this presentation. As Olivia mentioned, 2025 was a very positive year for Guardforce AI. During the year, total revenue increased 8% to $35.2 million compared to $32.6 million for 2024. Legacy secure logistics accounted for 86.6% of total revenue in 2025. This growth continued to demonstrate our legacy business strong stability, achieving over 99% recurring revenue and delivering year-on-year growth of 6.9%, primarily driven by the expansion of our retail-focused service lines in Thailand. Our AI, robotics and smart solution accounted for 13.4% of total revenue in 2025 and recorded a robust growth of 15.3% during the year. This performance is mainly supported by increased demand from retail customers for our Smart Cash Solution product.

Our gross profits for 2025 grew by approximately $9.4 million, or 7.5%, to $5.3 million, compared with gross profits of $4.9 million in 2024, with gross margin remaining stable year over year. We have now achieved gross profit growth in every year since 2022. R&D investment for the year was approximately $0.8 million, an increase of 115.4% compared to approximately $0.4 million in 2024. This increase reflects our commitment to advancing our AI capabilities and product innovation. Throughout the year, our R&D team continued to enhance our AI robotic solutions platform, ICP 3.0, reinforcing our commitments to innovation and ensuring that ICP 3.0 remains the core platform for our next generation AI solutions. We recorded the lowest net loss from continued operations since 2021, narrowing down by $0.6 million, or 10.1% compared to 2024.

We also achieved the lowest operating loss since 2022, which improved by $0.8 million or 12.4% compared to 2024. These improvements were mainly due to the higher gross profits and lower expenses. Now turning to our balance sheet. We also achieved a stronger balance sheet. At year-end 2025, our cash and cash equivalents stood at $24.5 million, compared to $21.9 million at year-end 2024. These resources are primarily reserved for future AI investments, including R&D expenses, talent recruitment, and strategic acquisitions. Working capital as of December 31st, 2025, stood at $27.7 million, with a current ratio of 5.32, highlighting the strength of our short-term liquidity and our ability to support ongoing operations and near-term growth initiatives. Our non-current liabilities did increase, primarily driven by newly recognized lease liabilities on the recently signed lease agreements.

We also classified certain assets and liabilities as held for sale in connection with the divestiture of our general security segment in 2025. This action reflects our ongoing efforts to streamline our portfolio and sharpen our strategic focus on higher growth, AI-driven opportunities. With that, I will turn the call back to Olivia to discuss our strategic priorities for 2026.

Olivia Wang, Chairwoman and Chief Executive Officer, Guardforce AI Co., Limited: Thank you, Melody. Looking ahead to the remainder of 2026, we intend to pursue several strategic goals principally intended to create long-term value for our investors. First, we will continue to deepen our investment in AI by advancing the capabilities of our DVGo, the AI agent. While DVGo initially focused on travel as a high-value, decision-intensive use case, we see it as much more than a single vertical application. It is designed as a modular agent-based AI agent that can be extended across multiple industries. At its core, DVGo enables intelligent decision-making, planning, and service matching, capabilities that are highly transferable to other sectors such as banking, hospitality, education, and healthcare. Over time, we believe this will allow us to scale DVGo from a vertical solution into cross-industry agent platform, significantly expanding its addressable market and long-term value. That’s why we acquired MGAI in early 2026.

It’s a way to pursue selective mergers and acquisitions as a way to accelerate our AI platform. We do not view M&A as an expansion for its own sake, but as a strategic tool to strengthen our core capability, particularly in AI deployments across multiple verticals. MGAI, in this context, enhances our capability layer, complementing our DVGo as the interface layer and ICP 3.0 as the infrastructure. Going forward, we will remain disciplined and focused, targeting opportunities that improve capital efficiency, deepen our technology stack, and drive scalable long-term value creation across the platform. Meanwhile, we will accelerate the cross-selling of our smart solution services across our existing retail client base, leveraging our long-standing trusted relationships to evolve from primarily service delivery providers to integrated multiple solutions partners.

This transition, we believe, has potential to unlock significant incremental revenue in 2026 and beyond. Expanding service will not only increase our technology product customer base and enable us to better meet the soaring demands now being seen in Southeast Asia’s AI-related business sector. They will also drive sustainable cost optimization for our company and significantly improve our margins and operating income across all our business segments. With that, Melody and I would be happy to answer your questions.

Conference Call Operator, Call Moderator, Guardforce AI Co., Limited: Thank you, Ms. Wang. I’ll now return the floor to Hu Yu, who will read investor questions that have been emailed prior to this call. For the webcast viewers, simply use the chat function of the webcast platform and type your questions and click send.

Hu Yu, Question Moderator, Guardforce AI Co., Limited: Thank you, operator. As mentioned in our call announcement for SVBs, we invited investors to submit their questions in advance. We’d like to address those questions right now. Some questions are duplicative, so we did our best to reconcile those questions where possible. If you have any further questions after the call, please feel free to follow up with the Guardforce AI investor relations team. Now it comes to question one about AI business and the traditional business. Can you provide a breakdown of AI-driven revenue versus the legacy cash-secure logistics revenue for the fiscal year 2025 and also for the second half of 2025? I think this addresses to Melody.

Melody Yang, Financial Controller, Guardforce AI Co., Limited: Yeah. Thank you for the question. In our earnings script, we provided a comparison between AI-driven and legacy revenue growth for 2025. The revenue for legacy secure logistics was approximately $13.5 million and accounted for 86.6% of total revenue in 2025, with year-on-year growth of 6.9% and more than 99% of this business is recurring revenue. This growth is primarily driven by the expansion of our retail-focused service lines in Thailand. The revenue for AI, RaaS, and smart solution was approximately $4.7 million, accounting for 13.4% of total revenue in 2025, with growth of 15.3% during the year. Besides the growth, what’s important to highlight is the trend it shows. AI-related revenue is growing at a significantly faster pace than our traditional cash logistics business.

In the second half of 2025, we saw a clear acceleration in AI and smart solution deployments in Thailand. While legacy services remain a stable revenue base, the mix is gradually shifting towards high-margin, technology-driven income streams. This gives us confidence that our transformation is not just strategic, but already reflected in our revenue structure.

Hu Yu, Question Moderator, Guardforce AI Co., Limited: Thank you for the answer, Melody. Now we come to the question two is about the new business matrix. This is addressed to Olivia. Why do you think the company began to categorize the business into AI-driven solutions versus the legacy services starting in 2025? And how should investors interpret the shift?

Olivia Wang, Chairwoman and Chief Executive Officer, Guardforce AI Co., Limited: That’s a good question. Thank you. This reclassification is not just a financial presentation change. It reflects a fundamental shift in how we operate and create value. Historically, we were a service-driven company. Today, we are evolving into a technology-driven solution provider with services as the foundation, AI, robotics, and software as the growth engine. As we can see from the revenue breakdown in 2025, our technology-driven solutions segment has a higher growth rate, with smart retail solution POC completed, and cross-sell opportunities exist in Thailand. Continued expansion of our Smart Cash Solution and the completed acquisition of MGAI, our technology-driven solutions are showing great growth potential in 2026. By separating AI-driven revenue from legacy services, we aim to give the investor clearer visibility into the transition, both in terms of growth rate and long-term scalability.

More importantly, that aligns our reporting with how we manage the business internally and how we see our future positioned, not just as a service company, but as an AI and a RaaS-enabled platform.

Hu Yu, Question Moderator, Guardforce AI Co., Limited: Thank you, Olivia. Thank you for answering the second question. Now, the third question is about the recent development and executions. Can you elaborate on the recent business developments, including new partnership or deployments since our last earnings call?

Olivia Wang, Chairwoman and Chief Executive Officer, Guardforce AI Co., Limited: Of course. Since the last earnings call, we have been focusing on growing our AI business and the smart solution expansions in Thailand. As we previously mentioned, we strengthened our AI capability in vertical use purpose by acquiring MGAI, and we are working on integrating this capability in our existing solutions. At the same time, DVGo continues to evolve as part of our AI-driven product strategy, with a focus on enhancing user experience and interaction. Our priority is to gradually align this development with our broader platform framework to support long-term scalability. We believe this integrated approach will support more sustainable growth over time.

Hu Yu, Question Moderator, Guardforce AI Co., Limited: Thank you, Olivia. Now, coming to the fourth question. It’s about the NASDAQ compliance and also the buyback program that the company announced earlier this year. What actions is the management taking to achieve the NASDAQ compliance, and how does the share buyback program factor into the strategy?

Olivia Wang, Chairwoman and Chief Executive Officer, Guardforce AI Co., Limited: A good question again. Of course, as the listed company, maintaining NASDAQ compliance is a priority for us, and we are actively managing both operational performance and capital strategy to address this. From a fundamental perspective, our focus is on executing our growth strategy, particularly in AI and smart solutions, to drive the long-term value. At the same time, the share buyback program provides us with additional flexibility to support the stock when appropriate. We view the buybacks as a tool, not the core strategy. Our primary objective remains to improve business performance and investor confidence through execution. We will continue to evaluate all available options and act in the best interest of our shareholders. Thank you.

Hu Yu, Question Moderator, Guardforce AI Co., Limited: Thank you, Olivia. Thank you, Melody. That concludes our list of previously sent questions. Now, let’s see if we have any additional questions from the webcast other than the ones we already answered.

Conference Call Operator, Call Moderator, Guardforce AI Co., Limited: Thank you. For the webcast viewers, simply use the chat function of the webcast platform and type your question in the box and click send. At this time, we’ll now take any questions from the webcast.

Hu Yu, Question Moderator, Guardforce AI Co., Limited: Thank you, operator. We have one additional questions to ask here. It’s about the platform and also the intelligent cloud platform that Guardforce AI has. How should investors think about the ICP 3.0’s value, and in the overall Guardforce AI platform strategy, and how do we measure the progress at this stage? I think this addresses to Olivia Wang.

Olivia Wang, Chairwoman and Chief Executive Officer, Guardforce AI Co., Limited: Yeah. Let me answer the question. The ICP is the Intelligent Cloud Platform. Now, it’s the version now. ICP 3.0 is a conventional platform that connects our different business lines, including DVGo and our robot service. It is going to support MGAI as well in the future. MGAI enhance our AI capabilities across various applications, while our DVGo focuses on improving user interaction and experience through AI agent. Well, we are still in early stage of the full rollout. We are already seeing increasing adoption among our enterprise clients, particularly those looking for integrated solutions rather than stand-alone service. Instead of focusing only on client count, at this stage, we are prioritizing depth of our integration, how many modules are being used and how embedded we are in the client’s operations, how recurring the revenue becomes.

Over time, we’re expecting that the ICP 3.0 to drive higher contact value and a stronger client retention, positioning it as a key driver of our platform-based revenue model. Thank you.

Hu Yu, Question Moderator, Guardforce AI Co., Limited: Thank you, Olivia. Okay, thank you, everyone. That concludes our section for the live questions for now. I’ll give it back to the operator, and for any follow-up questions that we haven’t answered or we didn’t have a chance to get back to you, feel free to email that at [email protected] at any time. We’ll get back to you as soon as possible. Now, I’ll give it back to Olivia for any closing remarks. Olivia.

Olivia Wang, Chairwoman and Chief Executive Officer, Guardforce AI Co., Limited: Okay. Thank you, Hu Yu. Thanks again to everyone for taking the time to join us this morning. We appreciate your interest in our company, and we invite you to visit our website and follow our progress in 2026. We hope you have a great day.

Conference Call Operator, Call Moderator, Guardforce AI Co., Limited: Thank you, Ms. Wang, and thank you to everyone for joining our presentation today. This concludes our conference call for Guardforce AI Co., Limited. Thank you and have a wonderful day.