Guys, thanks for being here. I'm going to do a quick presentation. Hopefully, everyone can see that. Baylin, our business is predicated on wireless technology, and you'll sometimes hear the term radio frequency, so it's RF technology. This is obviously a growing area of the world, and there's been a lot of innovation in it. I'm going to talk about innovation as we get into what we do. We are headquartered in Toronto, with three business units: Satellite Connectivity, Infrastructure Antennas, and Embedded Antennas. You'll notice that Satellite Connectivity does not actually say the word antenna, and that's because we actually don't make them. It's a very international business. We have people all over the world, and we certainly have customers all over the world. Satellites, the easiest way I describe it to people is we don't put things in space. We don't make dishes.
We make high-powered gear that makes that work. Just easy use cases. If you like the NFL, if you like golf, when you see the Super Bowl, Thursday Night Football, Monday Night Football, the Masters golf tournament, all those broadcasts are powered by our gear. The NASA Artemis lunar space mission that's coming up, as the communication from the Earth is going out, that is powered by our gear. We do a lot of work with NATO government entities and DOD entities. Let me give you an example. The picture on the top right is actually important for a number of ways. That is an amplifier package, the two sets of amplifiers, which are basically this large guy and this guy here. That is for a U.S. DOD application. We are completing the fourth unit in this program. That'll roll off the assembly line and be picked up this quarter.
What you're looking at is effectively a CAD 3 million PO. Sounds good. What's interesting about that is I know there are a minimum of 14 more behind this. We don't have the purchase orders for those. Once you're in a U.S. DOD program, it's not going out for bid again. You're the standard. That's what they expect. That's what they need as they do their upgrades. That's tied to federal budget capital spending cycles, which means they're not going to give you all the POs in a single year. It's as the funding hits, as it's appropriated each year, that's when we expect to see additional POs. We know in this case, we have a lot more coming towards us over time. Another interesting point about this is the power level. This large guy here is for a U.S. DOD application. That's a 2.4 kW C-band amplifier package.
I think most of us know who Elon Musk is and have heard of Starlink. We saw Starlink coming into the market. It's great technology, and we knew it could tell who we thought would be disintermediated by that. We have certainly seen that. By moving and focusing on high power, it adds resiliency to this business because Starlink won't play in the places we do, and we're not trying to play in the places that they play. Another important thing here is this allows us to have competitive differentiation, meaning there are lots of people, lots of businesses that are out there that have been in the amplifier space, as an example. There are very few companies that can do really high-power applications. What we see is when, you know, low-ech, which is a lot of the space stuff, that's the band, the frequency.
NASA, they come to us because they know that we have the expertise and can make the power levels that they need for the space missions. It's a nice place to be. The pictures on the bottom are also actually important. They just look like boxes. 100% true. Part of the journey that we have been on is that this was a business that came to us through acquisition years ago. The legacy products in this business were candidly a bit difficult to produce and had complexity to them. What you would find is, you know, in C and Ku, depending on what a customer ordered, the options they wanted, the actual equipment and configuration inside the package would be materially different. That means a couple of things. One, you have an overly complex supply chain.
Each time you get an order, depending on the specifications, you may have to order something else. Also, your manufacturing facility is doing more project-based as opposed to assembly line work. The new amplifiers that we've been launching, we've now retired our Ku line and retired our C line, which are two major bands for satcom. It's based on a common component architecture, which means even within Ku and C, much of the internal component architecture is identical. Not only have we added functionality and capability into the product, this is allowing us to, over time, simplify our supply chain and simplify our manufacturing process. We're manufacturing more of the same, which, as we continue on this journey, allows us to deliver the same or more with less, i.e., less complexity and less people, which will lead to margin expansion.
There was actually a press release a week ago, Monday or Tuesday, that we put out. It was a nice press release, CAD 735,000 order, one of several orders coming from a UAE broadcaster for this new product and technology. What's interesting about that is not the fact that we're going to see more, and that's good business for us, but what it means by being in the new architecture because we're able to, you know, your book to bill improves because we can manufacture these so much more easily and cleanly with fewer people. That's a good thing for our future in this business. Wireless Infrastructure. It's kind of what you think it is, right? If you go back to where we were on the journey, this was a nice business, but it was, I felt like it was, I've been with the company four years.
We were trying to do too many things for too many people and chasing a dressable market. We really focused on, and I made a big deal about competitive differentiation and competitive advantage, and particularly use cases that are going to matter where we can drive growth and improve margins. This here is really the bottom is what I would call our halo products. The products that matter, we have a bigger portfolio behind this, but these are the things that really are driving and opening doors. This first one, the world's thinnest DAS antenna. I actually have one here. That's fantastic. Looks like a frisbee. What's so special about that? Aside from being an antenna that works really well, you guys can see how thin that sucker is. That is hotel room card key thin. Why does that matter? Hudson Yards, MGM Casinos, Hilton Hotels, aesthetics matter.
Those are paintable, skinnable. If you're in an MGM Casino, you can't see it because it's just in the casino and it matches whatever colors they have on the ceiling. It works really well. We have sold thousands of those. By the way, we've got a big portfolio of other in-building wireless products behind it we can also sell through. That's an example of what I mean by a halo product. It's patented, it's differentiated, and it works really well. Now I have all these other avenues for our business to grow in. This next product here is called a multibeam. It looks like a panel antenna. Sure enough, it is. It is really differentiated for high-density, high-traffic situations. When we started this, we only had a few units, and it was really about how we're doing special events.
Literally, when I started, we had one product that had just come to market, and we chose to focus on this as near for growth. For example, if you go to Dallas Cowboys Stadium and you look up at the rafters in the back, you'll see these giant globe antennas. That was the traditional solution for a lot of these stadium products, stadium uses, excuse me. A few things about that product. While they work really well, they're insanely heavy, they're difficult to produce, and they were really, really expensive. To give you an example, bottom right picture here, that's actually Rocket Mortgage Arena. They originally had designed this using this legacy technology, but the problem was the structural integrity of the ceiling wouldn't be able to handle that. We've created a patented panel-based alternative that works just as well. We launched these.
I didn't have to have the smartest sellers on my team to be able to go to a customer and say, "Okay, we have a product that's going to work just as well. It weighs half as much, and it costs a quarter of the price." By the way, we make great margins on this. We now have 34 of these, multiple variants. This business unit never sold into Europe when I joined. Top picture up here, that's 80,000+ people in a field in Europe at a Harry Styles concert covered by one of our products. The carrier liked it so much, they put their logo on it so the people who had cell coverage knew why and they could see it. We've done pay-per-visits. We have trials now with multiple carriers. I'll touch base on that in a minute. Really, really interesting.
This next product here is called a Whip. It's a two-inch diameter antenna that also works really well as a small cell application. Why is that important? This picture here, that's the Empire State Building, right? We've all been in New York. New York City cares about the aesthetics in certain areas. They didn't want the big canisters sitting everywhere. That product works so well, and it got such a positive reception from all three of the major U.S. carriers that Crown Castle awarded us Manhattan and all five boroughs exclusively for small cells. We are growing. We're doing a ton in New York, New York City, Boston, and it's allowed us, we're currently in the process of becoming a national provider for Crown Castle, one of only three in that space where we can drive further growth. That's a product that matters.
Final one, I'm going to give you a really easy example, and I'm going to come back to the multibeams, and this will give you an idea of cross-selling or sell-through. I think most people know what University of Alabama football is. Brian Denny's stadium, AT&T and Verizon together did a massive technology upgrade on that stadium. Because of our multibeams, we were chosen for that stadium, but guess what? Every antenna in that stadium is one of our products. We have more coming. American Tower is doing Target Field, which is an MLB facility. We are seeing significant growth, and it allows us to cross-sell multiple products within this space. This has been the biggest part of what I would call the turnaround and growth story. When I joined, this business was running around mid-20s in terms of gross margins.
We're running north of 60%, even after tariffs, gross margins in this business with growth. To put a finer point on the growth, 2024 was the lowest capital spend market in North America for wireless infrastructure in the last six, and dollar adjusted in the last 10. This business grew 40% last year and is continuing to grow this year. This is going to be the biggest growth engine on where we go in our future. Our Embedded Antenna group.
What do you find about it?
When people want an antenna solution for a product they manufacture to sell through to their customers, if you want cheap and just get some RF out of it, there are Chinese manufacturers who do that. Quectel, Fibocom . If RF quality matters or you have a complex environment you're dealing with, they come to us to engineer a solution that we then manufacture and embed into other people's products. Do a ton in home automation. You see some of the other use cases. That body armor camera here in the middle, excuse me, actually really nice and important product for us. That's critical communication. Our customer for that is Axon. When they came to us, they needed it to work. When a police officer turns it on when an incident is happening, it has to work.
It has to get the video to the cloud, back to the command center, and they have to be able to see it, and it has to work. We were chosen for that. Launched that in late 2023. It was a great growth engine for 2024, and we're doing very well in 2025 on that. You kind of get a sense of what we do. This is who we do it for, and this is a sample customer role. You guys should probably recognize a lot of the brands here. These are the folks we work with, and you don't get to work with these folks unless what you do really matters. I'd like to think that we've gotten a lot right to see the kind of growth we've been having. Future growth, kind of talk about the new markets, organic growth, margin expansion, inorganic, product innovation, and new logos.
Let me get into that a little bit. Our goal is to get to CAD 100 million with CAD 10 million in operating EBITDA by 2026. That's where we're shooting for. That's a good, tough goal to get to. New markets, we have carrier trials underway with tier one branding carriers in Germany, the U.K., Portugal, as well as with a large multinational 3PO or infrastructure operator on behalf of carriers. The embedded team has recently broken into the EU for home networking. Our satellite division, while we have certainly worked in Europe, given what has happened with the Trump administration and with Europe effectively waking up to defense spending, satellite communications is going to be a part of that. We have added sales staff in Europe to focus on that because of our differentiation and see that as another avenue. Organic growth.
If you go back to 2021, and by the way, if you pull our reports from 2021, that's not the number you're going to see. This is pro forma for divestiture. We had a fourth business unit with, you know, this is a Samsung phone. The reason I have it is we made the antennas that were in many Samsung phones that people have, including this one. The problem was that's a low intellectual property business, which means we don't have a lot of competitive differentiation. The pricing and power was extremely low, and you're really competing on price against several others with Samsung holding all the cards. To me, that's not cool, right? That's a low margin business, and it's not going to drive growth for the long term, given the dynamics of the smartphone market.
We chose to divest it, which I believe is a good thing for the future of our business. Focus on our core. Going from CAD 62.9 million to CAD 83 million is a good turn, and the improvement in margins is also material. We should be north of 42% this calendar year. Inorganic growth is another avenue, and this is actually something I haven't been able to exercise these muscles. In a past life, I ran the merger and integration team for AT&T Mobility. Since leaving AT&T and working in the middle market, I've completed multiple transactions successfully. I've personally been involved in 17 acquisitions and divestitures and ultimately integrations for the companies that were acquired successfully. It is a really interesting avenue for further growth and bolt-on. The point is, we're only going to do it if I know it's going to add shareholder value, and I'm dang picky, right?
We have certainly had opportunities, even on our journey these past four years that I've been in this business, to potentially acquire or merge into other, or to acquire other entities and merge them into us. We've walked away because the valuation wasn't right, or I didn't think it was going to lead to further growth, ultimately shareholder value creation. We will look at that. That will be part of the playbook going forward, given the strength of the business and the improvement in our balance sheet, and can actually really add some horsepower. Again, we're only going to do that if I know that I can drive shareholder value. New product and innovation. I'm actually going to come back up here and talk about some things. The picture on the middle right right here, that's obviously a cell tower.
When we started this with one product, we were thinking special events, and then we're going to work our way into the stadium place. As carriers got a taste of what the technology will do and the value it provides, it's opened up new use cases for us and has allowed us to add additional products for specific use cases. That's clearly a cell tower. We never anticipated going on cell towers. All major carriers have something called cell sector saturation, which means for a single sector, that's obviously a four-sector tower. Some towers are three sectors, or really a rural highway will be two. When you get into these threes and fours in denser areas, you're going to get a ton of people continuing to use their phone, continuing to use their devices, and it starts to saturate the network and the spectrum's ability to support that data load.
Your alternatives, if you're a carrier, are to build more cell towers. Guess what? You're now CAD 200,000 +, plus the deployment costs, plus the operating costs for new leases in power, etc., or do infield with small cells. Guess what? Zoning, permitting, deployment costs, ongoing operational costs. T-Mobile today is actually deploying our multibeam antennas on cell towers for cell sector offload, given some of the new products we've launched that have additional capabilities. That is not a need particular to T-Mobile. Really interesting. We have another technology that we are going to be launching in Q4 that is a derivative of that that solves additional use cases for carriers.
As we have gone out and talked to wireless carriers about what we're doing with the technology, as they have the belief in what we've done and see where we're going, we have seven tier one carriers asking us for trials. That's never happened in the history of this company. That means U.S., Canada, and European carriers have asked us for trials because they see real value there. Obviously, we've got to get the commercials right, we've got to finish the product, and it has to work the way we think we do. By the way, everything in multibeam antennas that I'm talking about here is patented, so we've been building moats around it, not just how we do it, but defensive patents, so we really know that we can own this space. That will be a key area for future growth. Finally, new logos and relationship expansion.
We do see the opportunity to grow further in Europe, particularly in the wireless segment. We are getting deeper and broader relationships. We signed a volume discount agreement with Verizon for some of our multibeam antennas because they see that as being important to them and their network architecture for the future. That's a deepening. This is a good place to be, and in all of our three businesses, very clearly, I've been a little heavy on infrastructure, but that's where I see our growth engine to be for the long term. That's our management team. A lot of experience, a lot of gray hair. Yes, I do have gray hair. No, I don't color it. This is our board. We have a really experienced senior board. Some of these folks have been on this journey a while.
We have also added technology capability to the board, so it's very balanced. You have Janice, who is former operations leader at Bombardier, Dave Saska, who is a former national RAN leader for AT&T. We recently added Bejoy, who is the Chief Technology and Strategy Officer for Mavenir, which is the largest independent open RAN player with relationships worldwide. I like our board composition. I like the direction we're going. Finally, a little bit about us. As soon as I put this together, it's wrong. I mean, that's always the case, but originally this was put together. We were CAD 0.26. Then I updated it to CAD 0.29. Then as I looked this morning, we're at CAD 0.375. I like where we're going, like our future, like really love the technology we've produced, and I like how efficient we are at doing it. That's really who we are and what we do.
All right, great. Thanks, Leighton. If anyone has questions, just enter them through Zoom, and we'll get to those. I just wanted to start off with, you mentioned some of the high-power amplifiers in the government space and some nice-sized orders that you have there. Are there any issues with the current government budget process, or are you seeing any potential slowdown in or reduction in spending there?
Yeah, so it's interesting. Within the satellite business itself, we have three different, very discrete businesses. When I look at my order backlog, infrastructure is the fastest term. They kind of eat what they kill. We're at a healthy backlog for that business, and that just continues to cycle with a lot of opportunity in front of us. Our embedded business is at an appropriate level for it. It's a little lower than I would like, but we see us seeing a pretty decent year lining up for 2026. It remains very healthy. Satcom's been interesting. With the change in administration, it's been kind of a cycle in that business. Let me explain what I mean by that. New administration, then you have DOGE. I'm going to give you an example. We did, we have a program, first phase for NOAA, the National Oceanographic and Atmospheric Administration.
With DOGE coming in and layoffs all across the federal government, that delayed that order by months. We still got it, right? Then you have tariffs. I got to tell you, April was a lot of gymnastics for us. We are, we've done, I would say, exceptionally well at tariffs. Infrastructure, which produces in China, still being north of 60% in terms of gross margins, says we got a lot right there. Things we were able to do with customers, what we've been able to do with manufacturing. Our embedded product, because we manufacture and then ship to other manufacturers in Asia, who are producing the final box that's delivered to the end customer, we're largely inoculated from having to deal with tariffs. The satellite business we manufacture in Canada, now there's clarity on it with the HS codes and USMCA. We are exempt from tariffs.
By the way, a lot of who we manufacture for is the U.S. government. Pretty sure they're not paying tariffs. Interesting story, but what that means is you have a bit of uncertainty during a period of time. We have seen our backlog in the satellite division go down over time. That is in part because some of those large programmatic orders have gone out the door. We've also seen a slowdown in buying behavior. Conversely, the pipeline of opportunities we have in the satellite business, when I actually look at that, it's the largest it's ever been. Right? Why is that? The U.S. government takes a pause. You then have a legislative cycle. We just recently had the Big Beautiful Bill approved. Things like Golden Dome, we are very likely to be in the Golden Dome as an example. That doesn't happen overnight. We have this huge pipeline.
Europe has woken up to defense spending. We do expect the backlog, in particular the satellite business, to be lower as we get into the back half of the year. The 2025 results will rhyme with 2024 from an operating unit perspective. Based on what we're seeing lining up on the playing field and certainly the growth we're having in i nfrastructure in the backlog, the pipeline that is materializing and we expect to convert on in satcom, we actually see 2026 being a really nice growth year for us.
Okay, if we bridge that against the CAD 100 million top line and CAD 10 million EBITDA, is that mostly coming in 2026? Is that what the bridge from 2024 to those 2026 goals is, mostly a 2026 kind of story?
Yeah, we actually expect to see pretty reasonable growth in 2026 within our core businesses. Obviously, you know, look, if we do something inorganically, then you know, you guys are going to look at me and say you're a knucklehead for putting such a layup on your, yeah, your fundamental goals. The bottom line fundamental is that's where we want to get to. We want, you know, we need to get to a level where we're a legitimate size, we're competitively differentiated with further growth there.
Okay. There's a question here around what tech or IP advantages help protect and differentiate Baylin from its competitors. Maybe if you could go a little bit more about what you've done to kind of protect yourself and differentiate yourself in the market.
Yeah, so within satcom, it's a combination of the high power. One of the other things I didn't necessarily talk about was the modularity of the technology, meaning if you have a big amplifier package and one of the amplifiers, typically it's the power system of that amplifier that'll go out. The other amplifiers will take over and the system keeps running, and then you just do a hot swap and you're back in production. That is a material advantage that not many companies in our space have. On the infrastructure side, which is really the one that's going to be the growth engine, which we've really worked to protect, we have three material patents already granted on the multibeams. We have others, certainly. We have five more patents pending. We're about to do our sixth for another use case.
Part of the philosophy on this is you don't just have how you do it because that becomes public information. We actually went out and worked on a defensive moat of patents, thinking of other ways people could try to skin the cat to catch us. By having that defensive patent moat, it allows us to have real competitive differentiation that's going to be very hard for someone to break in with a newer technology that does what we do.
All right, great. I guess you have the target of CAD 10 million EBITDA in 2026, but at what scale do you get to sustainable profitability in the business? Where do you see that inflection point coming, and what are the key levers to get you there?
I think we're starting to see that now, right? I mean, if you look at Q2 and what we produced, that's a view of where we're going now. I'm not suggesting that Q3 and Q4 will be bang out quarters like that. I've already kind of telegraphed what's going to happen in the back half of the year. When you look at 2026 and how the playing field is lining up to that, that should start to rhyme with what we saw in Q1 to Q2. The further growth, the tight cost structure. Internally, we run a very transparent, open culture. Get the issue on the table, deal with it. Running our business with data and thinking through the issues and being very customer-focused are critical to me.
By having that structure and continuing to run lean as the growth materializes, because we run lean and tight, that flows through to the bottom line much more quickly. I really think 2026 is going to be an interesting year for us.
I like an inflection year. Longer term, I guess you know, you have 60% gross margins on the infrastructure side of the business. Do you think this, I know you have this near-term target of like a 10% EBITDA margin, but with those kinds of gross margins at more scale, you know, is there how much more room, I think, do you think that there is for the business to operate maybe at a higher operating margin level?
The short answer is I do think there's room there. Conversely, let me give you an example. This one technology that I was talking about coming to market in Q4, I know what the margin level in that product is today, and it is exceptional in that product family. As I mentioned, we just signed a volume pricing discount arrangement with Verizon for three models that they think will be important to them. I don't have to be the biggest math genius to know that if I get substantially more orders at a lower margin, but it's a reasonable margin, if that bottom line is materially improving, I'm not as focused on what my gross margin level is as much as I am driving the bottom line.
Okay.
I think this new technology will rhyme with that. While we will continue to have a healthy gross margin percentage , there are places where you will trade that to drive volume and growth and continue to maintain your efficiencies where you're going to see that scale improve on the bottom line operating EBITDA. That's kind of how we're thinking about it. It's going to be case-specific, and we're going to be very careful with that because we want to protect our growth and then ultimately the bottom line growth.
Okay. All right, great. We're at the end of our allotted time. Thanks, Leighton, for the presentation, and thanks everyone for listening in. With that, we'll wrap up the presentation.
Thank you, guys. I appreciate you guys listening to me.
All right. Bye-bye.