Good morning, and welcome to Otovo's third quarter 2026 results presentation. Presenting today are John Berger, Chief Executive Officer, and Jennifer Santoscoy, Chief Financial Officer. Before we begin, please review the disclaimer on slide two. Today's presentation contains forward-looking statements that involve certain risks and uncertainties. Actual results may differ materially. I will now turn the call over to John.
Thank you and good morning. I will start with the business highlights from the quarter and why we believe Otovo sits right where three long-term growth trends meet. Jennifer will then take you through the financial results before I come back to cover our outlook, including our 2027 targets. Then we will open for your questions. The third quarter marks the completion of the final phase of Otovo's transformation into an AI-enabled energy services platform. There are four things I want you to take away today. First, strong growth in field services. Field services revenue grew 70% from the second quarter, and the momentum has carried into the fourth quarter. In October, we completed an estimated 4,049 service work orders at an average of $760 per order and an estimated gross margin of 52%. Second, AI-led cost reductions.
Adjusted OPEX was down 26% from the second quarter and down 45% from the same quarter last year. Endurance is what makes this possible. It lets us cut SG&A further while taking on more work orders, and that gives us real scale advantages and operating leverage. Third, acquisitions. We have closed eight acquisitions since December 2025 and anticipate additional acquisitions to close by the end of the year for those companies that fit the Otovo model. Fourth, our 2027 targets. We expect to generate approximately $120 million of revenue and approximately $36 million of adjusted EBITDA. That is built on an assumption of 14,200 service work orders a month at $700 per order and a 50% gross margin, with SG&A expected to be between $1.75 million and $2.15 million a month. The milestone that ties this together, Otovo has been adjusted EBITDA positive from September 2026.
That is a target we set for ourselves in the second quarter, and we have delivered it. I want to remind you why we are so excited about this business. Otovo sits where three long-term trends meet, and each one reinforces the others. The first is power. We are in a long-term global bull market and behind-the-meter power driven by AI, electrification, data centers, and reshoring. The second is consolidation across service industries. Home services, HVAC, pool, pest, plumbing are consolidating for scale. Our market has a particular gap. There are more than 37 million behind-the-meter power installations across Europe and the United States, and after a wave of installer bankruptcies, more than 13 million of the customers have no one to call. The third is AI. Applied AI is the next phase of this mega trend and is driving major productivity gains in services.
Otovo turns this into margin through Endurance, lower costs for us, and easier communication and quicker service for the customer. The service gap in which we operate is real. We estimate that around half of the residential solar installers operating in 2020 have gone bankrupt or left the industry. That leaves millions of homeowners with no one to call when their systems fail. Across the U.S. and Europe, that is more than 13 million orphan customers and an annual service market of more than $60 billion. The market is also fragmented and primed for consolidation. In the U.S. alone, we estimate that there are around 300 service-only companies and more than 10,000 installers with some sort of service operation. Most of them run expensive software stacks and serve only their local market. Valuations are depressed, which makes this an ideal environment for us to buy.
We have three growth channels. First is M&A. We buy local service companies, which give us vans, technicians, and customer contracts in one step. We also buy customer books from failed installers at cents on the dollar. After closing, we deploy Endurance to cut software, dispatch, and call center costs. Second, OEM and asset owner deals. We lock in OEM service partnerships across our footprint and sign multi-country contracts. Every new geography adds value to the OEM relationships we already have. Third, direct organic growth. We have a legacy base of 1.9 million customers inherited from predecessor brands, and it grows with every acquisition. We market directly into that base and convert customers to Otovo Care memberships, upgrades, and retail power. Endurance is our own AI-native operating platform, and it pulls two levers at once. The first lever is more revenue per technician.
AI scheduling packs routes and lifts fleet utilization. We have seen an increase of more than 30% in truck rolls per technician per day. The second lever is a lower cost base. Automation takes out manual work in sales, operations, and back office. Adjusted OPEX in the third quarter of 2026 was 45% lower than the adjusted OPEX in the same quarter last year. Put together, this changes the margin profile of the business. The service industry today runs at an EBITDA margin of around 15%. We believe Endurance adds at least 15 percentage points from cost avoidance and scale, taking Otovo to above 30%. With that, I'll hand over to Jennifer for the financial results.
Thank you, John. Let me start with the overview. Revenue in the third quarter was $9.7 million, down 3% from the second quarter, but the mix is what matters. Field service revenue grew 70% to $5.6 million on organic growth, higher technician utilization, and the consolidation of SST. New build fell 44% to $3.4 million due to the planned wind-down of the segment. Service revenue, which includes field services and recurring combined, is now about 2/3 of the group revenue, up from around 40% in the second quarter. On gross profit, field services grew 67% from the second quarter to $2.5 million. At group level, gross profit was $2.4 million, which includes a negative $800,000 from new builds as a result of the write-off of inventory in connection with the wind-down of the new build business, combined with a prior period adjustment related to warranty accrual and the Italian subsidiary.
As field services becomes a bigger share of the business and the new build drag falls away, we expect group gross margin to improve. Adjusted OPEX was $ 5.6 million. That is down 26% from the second quarter, even after adding $ 400,000 from SST, and down 45% from the third quarter of last year. Lower customer acquisition costs and organic cost cuts more than offset the consolidation of SST. That takes adjusted EBITDA to $ -3.2 million, an improvement of $ 1.2 million from the second quarter and $ 2.9 million from the same quarter last year.
Reported EBITDA was $ -9.1 million after $ 5.9 million of add-backs. The largest items are $ 2.4 million of dual listing costs, $ 1.2 million of M&A and restructuring costs, and $ 1.7 million of non-cash items. You will find the full reconciliation in the appendix. Most importantly, adjusted EBITDA has been positive from September. This slide shows what is driving field services.
Revenue is simply work orders times revenue per work order, and both are moving in the right direction. We grew through the third quarter and continue into the fourth quarter. As the numbers on this slide show, October alone was more than half of field services revenue for the whole third quarter. October also includes only a partial month of PV Hawaii. Gross margin is moving the same way in all months as technicians have moved from training to billable work. On cost, total adjusted OPEX fell by $ 2 million, or 26%, from $ 7.6 million in the second quarter to $ 5.6 million in the third quarter. Compared to Q3 of 2025, adjusted OPEX declined $ 4.6 million, or 45%. Organic OPEX, the businesses we already own, fell from $ 6.5 million-$ 5.2 million, down 20%.
Inorganic OPEX from businesses consolidated for the first time was $ 400,000 in the quarter, compared with $ 1.1 million in the second quarter. That means we are already running at around $ 1.9 million a month inside the $ 1.75 million-$ 2.15 million a month that our 2027 target is built on. That is before the savings from SaaS contracts that we have terminated and yet are still already booked as costs today.
This slide is, for me, the most important one in the deck because it shows how the model scales. At October's numbers, each work order brings in $760 of revenue and $395 of gross profit. So every additional 1,000 work orders a month adds $760,000 of revenue and $400,000 of EBITDA a month. Annualized, that is $9.1 million of revenue and $4.7 million of EBITDA. The key point is that none of our OPEX scales with volume.
Endurance runs dispatch, scheduling, customer service, quoting, so the back office cost base stays flat as we add technicians. The business is also asset light, no capitalized costs, and limited working capital, so incremental EBITDA turns into cash. The same math applies to the work orders we acquire once the businesses are on Endurance. Turning to the balance sheet, cash was $ 3.7 million at the end of September, compared with $ 3.8 million at the end of the second quarter. After the quarter, we raised $ 2.9 million of equity in October, and we expect another $ 2.4 million from asset sales. With that, our business plan is fully funded. Other current liabilities were $ 22.2 million at $ 5.3 million. This includes $ 8.1 million of trade payables, as well as our euro-denominated $ 1.5 million credit facility, which has been reclassified from non-current with no cash effect.
Remaining interest-bearing debt is $500,000 . Non-current assets came down $ 5.2 million, driven by the EDEA write-down. With that, I will hand back to John.
Thank you, Jennifer. Let me finish with where we are heading. Technicians are the engine of this business. More technicians mean more work orders, and with Endurance, more work orders do not mean more back office cost. We started the year with 13 technicians. In early November, we had 129. By year-end, we are targeting capacity of around 300 to meet surging demand in our field service business. That brings me to our 2027 target. We are targeting approximately $ 120 million of revenue and approximately $ 36 million of adjusted EBITDA in 2027, and adjusted EBITDA margin of around 30%. The model is simple, and you can check it yourself. We assume 14,200 service work orders a month at $700 per work order and a 50% gross margin. Note that both the price and the margin are below what we delivered in October.
That gives field services revenue of around $ 10 million a month and gross profit of around $ 5 million a month against adjusted SG&A of $1.75 million-$2.15 million a month. That is adjusted EBITDA of $2.8 million-$3.2 million a month, or $34 million-$39 million for the year, with a midpoint of around $36 million. This is a field services case only. It excludes new build projects and excludes potential CEO compensation, which depends on the company maintaining positive adjusted EBITDA. To sum up, now that Otovo has completed its transformation into an AI-enabled energy services platform, it is time to build on our success. Field services revenue grew 70%, adjusted OPEX fell 26% in a single quarter, and we have been adjusted EBITDA positive from September. October was our strongest month yet, with more work orders, higher prices, and higher margins.
As we approach the end of 2026, our focus remains on hiring service technicians to meet the strong demand we see in field service work, closing the right acquisitions to help us achieve our goals, and cutting costs utilizing our Endurance platform. Thank you for listening. If you would like to ask a question, please use the messaging feature.
At this point, we're going to take questions. We'll start off with Phil Shen.
Hi, everyone. Can you hear me okay?
Yes. Hey, Phil. It's John.
Hey, John. Hey, Jack. Great job on the execution here and laying out the unit economic model, and you've given us this guidance for 2027 or outlook. It seems like SG&A stays very flat as you guys grow aggressively, and then with the 50% gross margin, was wondering if you could talk through what kind of return on capital that could lead to for 2027 and beyond. It seems like we could get to pretty high numbers here, and if you can just comment on that'd be great. Thanks.
Yeah, Phil. Thanks for the question. I mean, very clearly, the return on capital is going to be enormous. We basically, after we complete the EDEA transaction, we will have no debt except for a few hundred thousand dollars of bank debt, and that's about it. The company's almost completely unlevered, and when you look at the earnings profile relative to the market cap, it's eye-popping, to say the least.
I would say that given where we are right now and the trajectory, we feel that the returns on capital, even at a fraction of what we laid out here, and basically going back to our execution that we demonstrated in our monthly operational update for October and what we're seeing so far in November in completion of Q4, I think that the investment thesis here from a shareholder's perspective, and I'm the largest shareholder, is pretty compelling, to say the least. In fact, I'm not aware of anything else that looks this way return-wise. We will continue to maintain the discipline on the SG&A. We will continue to cut where we see opportunities with AI, with Endurance®, and we will then reinvest those proceeds into our B2C marketing to continue our growth there, or take that in savings and further add to the adjusted EBITDA.
I look forward to not adjusting EBITDA post our listing in the U.S. We can go through the numbers if you want in terms of the quantity amount of money we need to invest on the listing process, but after that and post any other deals, which we're comfortable with the outlook with the transactions that we've identified or a like substitute, then I think that we can then further just look at EBITDA from then on, because the adjustments are primarily dual listing and deal costs.
Great. Thanks, John. In terms of the growth strategy slide number eight, you guys laid out three channels for growth. Can you give us a feel for the 2027 growth versus 2026? How much of the volume comes from M&A versus OEM versus direct acquisition? Just a mix of the incremental new customers by channel. Then secondly, John, maybe dive in a bit deeper into the OEM channel and just maybe give us some color on who you guys partner with, if you can talk about anybody publicly now, and maybe even mix by that channel. When I think of Enphase, I think of SolarEdge, I think of maybe Tesla and other inverter companies, and so what's that mix look like for that specific channel? Thanks.
Certainly. First of all, I think that probably the easiest way for folks to take a look at, we would go back to the October monthly operational update, for instance, we lay out the number of technicians, and we just gave an update of where we are. When you look at our backlog, I will get into the B2B with the OEMs and the asset managers, that is another big one in category, if you will, for B2B, for customers that have been highly successful for us in terms of growth. If you look at, say, we got 129, we see line of sight pretty easily, and many of these techs are already in the backlog of about 200 techs for the U.S. We see line of sight on organic recruiting of at least 30 techs into Europe or they are on staff.
We have about 112 techs. That is maybe a little bit too precise for the acquisitions. You add all those up, and somewhere in the range of 325-375 is our estimate of techs needed for 14,200 work orders a month. You could look at that, with 112 techs plus 30 techs plus 200 techs, about 342 techs is about midpoint of that range, right? The vast majority of what we see today is organic hiring that we have line of sight to already have, and then we have roughly about 1/3 on the acquisition side. Again, we have line of sight on those acquisitions, expect to close these acquisitions or in-kind in the coming weeks. In terms of B2B, we cannot disclose names. We do not have permission from anybody to do that, and so I unfortunately cannot do that.
You know this industry probably better than most, Phil, so I think you have got a pretty good idea about who those folks are. They are valued customers, and as we continue to open more geographies, we are getting more and more of that business. Right now, we continue, again, as the October monthly operational update said, to generate more work orders than we do close in a week or a month. We do expect that to, in terms of chewing into our backlog, to start to happen this month, maybe next month for sure, as the holiday set upon us and weather. But we continue to see huge amounts of demand for service work across the world, and there really is nobody of scale other than Otovo that can do this work.
Thank you, John. Next question here is on the quality of customer service. Ultimately, your business can succeed only if customers appreciate and value and receive good quality in terms of the service that they receive or that they get from you. As you transition to an AI-dominated platform, how do you guys ensure the quality at a high level? I think you guys have metrics that you measure, customer service satisfaction and so forth. Was wondering if you could kind of give us the trends on those numbers and to talk about your philosophy around how you ensure high-quality service. Thanks.
Hey, this is Jack here. When designing Endurance, a lot of this, when we look at the old Otovo versus the new Otovo here, we're trying to emphasize, and we do emphasize, extremely rapid response to customers. On text and email, a lot of times that means AI, and phone, that means AI as well. But a lot of this we've seen is customers get their issues resolved with a callback, a physical callback, and emphasizing that through and through. We are emphasizing customer support at every single step, and also rapid customer support, because whether or not your response is AI or it is human is somewhat immaterial if it doesn't resolve your issue or it comes two weeks late, which is what we were looking at in the past.
With what we see in the future here, we really see that AI is allowing us to respond to customers within five minutes consistently. We've seen internal metrics up and to the right on customer satisfaction, and we're extremely obsessed with this. I check it every day on Endurance as we come in, and we're extremely customer-obsessed here.
Yeah, to add to that, Phil, this is John. I would say that, look, the sheer amount of demand that we have for our services does sometimes lead to longer service lead times, and we are working on that, namely by hiring aggressively in both U.S. and Europe, as I just laid out. The second point is wrapping up particularly the cash install business in Europe. I think we'll solve a lot of customer angst and issues as that business was quite challenged, and we never wanted to be a part of that. We've been able to shut that down, and we'll wrap those up and take care of those customers as fast as we can.
Okay, thanks, John and Jack. As relates to AI, cynical folks might say, "Hey, everybody has access to AI. Computer science and software has been democratized. Anybody can build this platform." What makes this so hard to do? We've talked through some of this in the past, but I think an update here would be very helpful. What is your moat, and how do you guys maintain it if everybody can build the software that's behind Endurance?
Yeah, so I think there's a difference between the software and then the operations. Here at Otovo, Endurance is the operations of the company directly, which allows us to do a lot of things fully automated. When we're talking about building software with AI and redesigning processes with AI, you can't put an existing process and just add AI to it and hope it works. We've tried it before. I promise you it doesn't work. We've had to redesign entire processes to be able to handle this. That makes us have a significant moat as well, because a lot of these are very hard-fought lessons that are impossible to learn without going through the actual operations itself. The actual software, we still maintain the actual level of code and the platform that you're working on. That will be done with AI completely.
The operations with this software is completely different, and I think a lot of people will struggle immensely getting there with just any regular AI without going through a lot of our learnings on the operations processes there.
Yeah, and I would, Phil, it's John. I would add to that, it takes at least some time to be able to put something like this together. We may end up being the only company that, at least I'm aware of, that has an end-to-end enterprise, their own tech stack. We've got a couple of other modules to do, namely a piece in the HR side, and then we're even talking on Endurance to you today. We've displaced the software and saved the cost for shareholders on even holding our earnings calls, which is the second earnings call we've done that on our Endurance system. This is quite complex.
It does take special talent with Jack and his team to put together, and then special domain knowledge to really understand how to do it and put the operations in place and configure the entire company, both with the machines, with AI or super intelligence, however you want to term it, and humans. It is not easy to do, and the integration with the acquisitions is not easy to do. We feel like we have quite a big lead, to say the least, in putting together a company that is more efficient than anybody out there, and not by a small amount.
Yeah. I think the courage to execute on this is, there are a lot of hard decisions that come with this as well, John? In terms of, it's easy to bring in software, but then you have to make some tough decisions in terms of SG&A and OPEX and headcount. Is there something you want to speak to that about?
You are correct. We've continued to shut down offices as we've acquired companies. We want to be really lean, focus all of our resources into our valuable technicians in the field, continue to pour more resource in terms of human resource recruiting those technicians, retaining those technicians, and do whatever we can to limit the overhead cost. We are very ruthless on the cost in the sense that we are looking constantly to figure out how can we not spend money on SG&A. I think the results speak for themselves. I would tell you and remind, Jennifer made a comment in her prepared remarks that the SG&A you're seeing there has already been A chunk of that with SaaS software and payroll and offices and other SG&A has already been cut.
You're seeing that in the rearview mirror. I would encourage shareholders to be really thinking about where do you think we are today, because right now, I'll tell you, our SG&A for October, for instance, is lower than it was in the average of the Q3. That is why September is positive in adjusted EBITDA, and that's why we have so much confidence on the future in Q4 and beyond on positive EBITDA. A lot of what we've been doing is very much in the rearview mirror, and you'll start to see that come out in the wash. The reason why we do the monthly operating reports is we cannot report our progress and success fast enough to you, so we're endeavoring to get that information out to the shareholders in a faster timeframe.
Thanks. On that, we hosted a webinar with you and Jack maybe four or five months ago, and in that webinar, you guys had a slide that highlighted the SaaS graveyard, to use that term. On that slide, I think there were at least 20, 25 packages that were dropped from your system, and I think there might be a total of 50 that you guys were working to eliminate from the platform. There are some notable names there, AWS, Box, Dropbox, DocuSign, et cetera. You could probably add this conference call software from today. I don't know what the brand name there is. What's the latest count in terms of SaaS packages that have, or just software packages that have been removed from the platform? I have another question thereafter, but let's talk about this first. Thanks.
Yeah, I think the best estimate we have is above 70. I will say the progress in AI models has surprised even us. I mean, we have very optimistic views of future on this, but it continues to defy the curve, and it doesn't look like it's slowing down, according to what we see there. We've cut out more than we expected by a long shot. My internal predictions of what we would be able to cut keep getting one-upped basically by the reality of our situation and the reality of what the models look like in Q4 and Q1 and beyond.
Thanks, Jack. There's a term I recently learned from John called bare metal. Can you walk us through what that means and how that might be a trend for others and how you guys are perhaps leading that trend? Thanks.
Yeah, bare metal is when we're talking about, you have different layers of the SaaS and expense stack when you're looking at these different things. One layer is the SaaS software itself, so your Salesforce, your HubSpot, what have you. Then you have your AWS, your Google Cloud, your Oracle Cloud, anything like that as well. Then below that even is the actual computers. So, there's multiple stacks and companies have been built on top of these different items here. We are at the bare metal. We own the computers, we own the rack, we own every single part of this, and we've built our system right on top of that. That's very important for cost savings because a lot of times, part of the reason SaaS has worked so well is you have these companies that are aggregating these huge compute contracts at AWS.
Even if you are building your own software, and you have all these companies building their own software now, if you don't go all the way down to the bare metal, you often don't get most of your expense returned to you. We started day one back in June of 2025 with this in mind, and it's gone pretty well for us as of right now.
And is this a trend you're seeing with others? As a result of this trend, from a percentage of savings standpoint, how much does bare metal allow you versus not going after bare metal, but then still employing AI?
Yeah. We're starting to see really big banks do this, your JP Morgans of the world, and Jane Street and things like that are doing their own compute or have done it for a bit. But no one in our market cap size that I've seen, anyone below pretty significant amount of capitalization. This has been incredibly important to us. Our hardware in the U.S. estimated at AWS prices would be about $50,000-$60,000 a month, and our purchase price has been a one-time cost of about around $20,000. So it is a very, very dramatic difference. As we add more customers, add more users, monitor more systems, that advantage compounds. It doesn't shrink. I think it's extremely difficult, though.
I will say it is by far the hardest part of what we do on the AI side, is building our own system down to the bare metal. It also allows us to have much greater security, where we can monitor our own things, we can see all items coming in, and we have very, very granular control over our systems versus, oh, if another system in AWS is hacked at root, we can't really control that, versus here, we control every aspect of it down to who enters that supply, the room that we have the servers in.
Jack, I just want to echo back what you just said. To build the hardware and platform that your AI Endurance platform runs on, it costs you $20,000 one time, and that compares to what would be in the marketplace at $50,000 a month or $600,000 a year on a recurring annual basis, and that could go higher. It could go lower maybe, depending on supply and demand there. But it's just a stark contrast. Can you confirm that? Also, when you think about these large cloud providers, you think redundancy and security and all these things. You just addressed the security part. But from a redundancy standpoint, are you able to match what they provide you?
Absolutely. This is a great question on this. We get questions on data security as well. I know you didn't ask this, but I will volunteer it as well. We have four layers of backups. We have compliance backups. We have multiple regions that we've built because we operate in Europe and the U.S. We will be expanding our fleet as we grow as well. We have generated our own. Part of that too is because we're a very physical business. We have warehouses to put this stuff, right? We're in a unique advantage where, hey, we already have a warehouse. This already has power going to it. This already has all of this. We have technicians to handle the power, right? Very unique perspective where we are currently. We can actually get that and also get the data security.
I think we go much further than you would normally go with a normal cloud provider, because we like doing that because we are very focused on how good the architecture is, basically.
On the cost again, can you just confirm the annual versus your one-time?
Yes. It's actually probably a little bit more than $50,000 a month, but that's a pretty good estimate.
Probably about $60,000.
Yeah. So we're using back of the envelope is, would be about $750,000 compared to your $20,000 .
Wow. Non-trivial. I think that does it for me, guys. Keep up the good work. this is going to be a very fun story to follow. Thank you.
Thank you.
Okay, now we have a few questions that have come through the chat. The first one, you had NOK 35 million in cash at the end of September, and your operating cash outflow was NOK 58 million in the third quarter. How much cash do you have today, and when do you expect the company to become cash flow positive without raising additional equity?
Yeah, thank you. We ended September with about $ 3.7 million in cash, and since then, we've added $ 2.9 million from the October placement. We expect an additional $ 2.4 million from the EDEA sale in December. While we don't give inner quarter cash balances, I would say that those steps fully fund our current business plan. Regarding the outflow, the $ 6 million in the third quarter, that's not really our run rate, and it's inclusive of significant cash costs. We don't expect to recur at that level, specifically related to dual listing, M&A, restructuring severance. The business has been adjusted cash flow, I'm sorry, adjusted EBITDA positive from September.
I'd say because field services carries little working capital and almost no CapEx, you should expect as we turn to the new year, EBITDA is going to be indicative of what cash will look like as these one-time items roll off.
Thank you, Jennifer. Next question. Your 2027 target assumes 14,200 monthly service work orders, compared with approximately 4,000 in October. How much of that increase is expected from acquisitions already completed or under agreement, and how much depends on additional acquisitions or organic growth?
I'll take this. This is John. It goes back to my answer previously on the technician side of things. If you look at the number of techs that we have today and that we expect from organic hiring versus what number of techs we expect from inorganic, the acquisitions, or like acquisitions, that's roughly about 1/3 of our growth we expect from inorganic, and then 2/3 from an organic at this point in time. Again, to highlight what Jennifer said, we have a fully funded plan in terms of the acquisition. There may be one or two other deals we'd be able to do after the listing in the U.S., but for the most part, we feel that we can hit this target with what we have, and mostly with organic growth that we have been experiencing and seeing.
Next question. Your 2027 financial target excludes membership and new build, while you also highlight significant membership growth opportunities in both Europe and the U.S. Can you quantify the expected contribution from these businesses in 2027 and clarify whether the planned acquisitions and U.S. dual listing can be financed without substantial additional share dilution?
Yeah. I would say that the membership is, and projects are included in the earnings forecast. We just look at it, we're taking a very conservative view on membership. If you look at, it's about roughly about 3/4 of $1 million of cash a quarter, and we just assume that, although we are growing the membership, and projects are a little bit on top of that. But we've been, for the most part, well, not for the most part, we've basically been very conservative in this forecast and consider that to be extra in terms of the membership cash and the project cash.
We feel that we, best job we could do on a forecast and execution is just to focus on the core work orders business and let the other two lines of business generate additional cash to make up any sort of potential shortfall or increase what we've laid out here.
Thank you, John. Next question. Given that M&A remains your primary growth strategy, should investors expect acquisitions to continue at the current pace throughout 2027? How do you intend to finance these acquisitions, and what safeguards do you have in place to ensure that growth creates value per share rather than primarily increasing the number of outstanding shares?
Yeah, I would say that, for the U.S. listing, that's the purpose of the U.S. listing is to raise capital for additional acquisitions. We do have quite a robust pipeline in the backlog, so if anything ever happens to a deal, we can pull another deal up in any part of the world. We're primarily interested in a lot of the commercial business and growing that in the United States, and really acquiring companies to build out the platform that we have in Europe. There may be some other opportunities elsewhere. Right now, we're going to be happy with what we got. We're going to focus on, we're going to move forward on the U.S. listing, and at that point in time, we can talk about whenever that occurs, what we would shift gears and start to acquire back again.
At this point in time, I think we've identified the targets, we have what we need, and we're seeing a lot of organic growth.
Thank you, John. Next question. You achieved positive adjusted EBITDA in September, but operating cash flow was still significantly negative in Q3. When do you expect to become operating cash flow positive, and do you believe your current liquidity is sufficient to reach that point without additional equity financing?
Yeah, sure. This is Jennifer. There is a pretty big difference between the two, and it is again the items that we adjust for. The Q3 operating cash flow was $ -6 million, and again, that includes cash that we spend on dual listing, M&A, restructuring, and severance, and all of that sits outside of adjusted EBITDA. The quarter as a whole was still loss-making on an adjusted EBITDA basis, and it was only September that was positive, which we expect to continue. From here, there are going to be two things that really close the gap. Adjusted EBITDA grows as we add technicians, and since the back office costs stay flat, we expect that to translate into cash flow. The one-time items we have identified for you are going to fall away, with OPEX expected lower again in the fourth quarter, as John mentioned.
Service in the field carries very little working capital and almost no CapEx. So again, operating cash flow should follow adjusted EBITDA through 2027. On liquidity, with the $ 3.7 million that we end up the quarter with, the $ 2.9 million that we raised in October, and about $ 2.4 million we expect from the transaction with EDEA complete in December, our business plan is fully funded.
Thank you, Jennifer. Next question. What monthly adjusted SG&A run rate do you expect to exit 2026 with after the remaining SaaS cancellations, layoffs, and office closures?
I think we have laid out our guidance range, expectations range on SG&A. We are running towards the low end of that range at this point in time, and we do have a line of sight on further reductions in spending, as I laid out earlier into a prior question, answering a prior question. I would say that we are also seeing a lot of opportunity to increase the marketing budget for the B2C to, again, go towards meeting the growth targets, going to answer a couple of the questions on the growth targets. So I would assume that we can fall within that range. I personally use something around the $ 1.92 million range per month, and that is, again, inclusive of our B2C marketing. Whatever we can cut, and then use that capital intelligently to grow the business profitably on the B2C, we will do.
I think this is a range we feel pretty comfortable in. We will maintain discipline to stay within it, even despite acquisitions. It may be a blip up as we do an acquisition, but we will be able to move and make the associated cuts and be able to get back very quickly into that range.
Thank you, John. Our final question. An average of 14,200 work orders per month gives less than 400 operators an average in work for 2027. What holds you back from assuming a higher number?
Well, look, the demand is clearly there for a much higher number. You look at the market size, roughly about a $50 billion a year market that has been estimated by third party, very well-informed third parties. Candidly, what we have heard over and over again is that we are underestimating the market quite a bit. And we look at the number of installs we have said is roughly 37 million installs in Europe and the U.S. on behind-the-meter residential and commercial. We are hearing it would be well in excess of 40 million. So the total addressable market is not the problem. The problem is to continue to execute. And I would say, as we execute towards what we laid out, or even a fraction thereof, just look at what we are doing right now, it is an extremely compelling case.
We feel very proud of what we have been able to accomplish very quickly. The transformation from the old Otovo to the new Otovo is now here, and now it is a question of how much money can we generate, how much growth can we generate on a forward basis. We look forward to proving that out and getting as high as we can for shareholders.
One other comment that I will tack on here is that we are very pleased to have a new Chief Operating Officer join us, Yaniv. Brings a lot of wealth and experience in service, global service operations, OEM relationships, and so we know that he can bring a lot to the table, and we are quite excited to welcome him in the coming weeks and months, and look forward to being able to grow the business quite strongly under having him join the leadership team.
Okay. Thank you for everybody for joining us today. This ends our call for the third quarter.