Welcome to today's Fireside Chat with Gorilla Technology. I'm John Roy. I cover technology here at Water Tower Research. Today I'm joined by Jay Chandan. He's the CEO of Gorilla Technology and Bruce Bower, CFO. Hey guys, how are you doing?
John, how are you?
Doing great. Doing great. I should mention that Gorilla's Safe Harbor statements are available on their website. Why don't we get right to the questions? Can you give us a kind of review of the audited 2024 numbers that came out? I know you just put out your 20-F, so maybe if you could kind of give us an overall look at 2024 and the filing.
Bruce, do you want to take that?
Sure. Some of the numbers that were in the 20-F, we already released the headline numbers at the end of March. I think I just want to recap the headline numbers for everyone. We reported revenue of $74.7 million for the full year. That's up from $64.7 million. We reported adjusted EBITDA of $20.6 million and adjusted net income of $16 million after tax. Those are all improvements on last year. We're very happy with those numbers. It's also bang on with our guidance. I think that shows that the business is firing on all cylinders. We're growing, we're profitable, and all of the major directions are working. There are also a few other things that people may not have noticed or that are in the 20-F that I wanted to also highlight.
The first is that year on year, from end of 2023 to end of 2024, the debt is down. It was $21 million, now it is $19.6 million. We also have the cash balance. We finished up substantially. We finished the year with a cash balance of $37.5 million. That is split between unrestricted cash of $21.7 million and restricted cash of $15.8 million. Very healthy on both accounts. Also, gross margin was 50%. That shows that all of our moves to increase the profitability of the online operations are coming through, starting at the gross margin level and then filtering down to EBITDA and to net profitability level. Another thing that I want to highlight, which is qualitative, is that in 2023, we had what is known as material weakness clause, where we together with the auditors mentioned a couple of areas that needed improvement.
This year, there is no material weakness clause. That means that is really a testament to Gorilla having worked hard during the year to clean up its internal processes, strengthen controls, and really mature as a company. Together with that, we are Sarbanes-Oxley compliant. We initiated a significant program in 2024 to further tighten controls and processes and to be next level Sarbanes-Oxley compliant. We achieved that in 2024. Those are the main highlights that we are proud of that we wanted to pull out of the 20-F. If you go through it, I think that there are many other areas that we're proud of. They cannot be captured in a couple of bullet points, but one of those would be the capital structure. We retired all of the preferred convertible shares and a decent chunk of the private warrants last year.
The shareholder structure, the cap table looks much better. Another area is going to be on if you look at the accounts receivable. We've basically taken a charge on accounts receivable for the ones that were long-term overdue. The rest are sort of up to, the vast majority is up to 90 days. From that perspective, we're looking very healthy and current. Overall, we're very happy with the balance sheet, very happy with income statement, and then the cash flow statement. There was significant investment into our contracts in the first part of 2024, but I think we finished strong in terms of cash generation. That would be what I want to highlight. Jay, do you have anything to add?
Yeah, sure. I'd love to add a couple of points. I think, John, to Bruce's and his team's credit, the Adjusted EBITDA stood at, what, $20.62 million in 2024. The Adjusted EPS was $2.02, which is about, what, 475%-477% outperformance over market expectations. Now, if you look at our operating income before exceptionals, it was about $19.2 million. Now, that actually reflects real execution. These are not paper losses. It also shows that these adjusted figures actually reflect how the business is really functioning. They are very, very, very strong. Okay. One point very worth noting is that every number we have put through has been reviewed very thoroughly by our auditors. More importantly, we as a company believe that it is very important for us to be very transparent. The 20-F is actually a proof of that.
If you understand how transformation works, you'll recognize that this is a controlled demolition to make us way more profitable as a business and more scalable for Gorilla. I think that's what our 2024 numbers reflect.
Great. Good to get that out of the way. Now talking about more current things, how is the global expansion going? I know you've been on a plane. You said you just flew back last night. I also know you've been spending, what, time in South America and Thailand?
Things are going rather well. Actually, my passport looks like I have been through some weird war zones across the world, and I am starting to almost recognize the border control staff, okay, by name. I mean, a lot of people actually say, "Welcome, Jay." It is quite hilarious. Jokes aside, global expansion is not just looking well. It is actually going exactly to plan. This is not just a case of us showing up and shaking hands and hoping for the best. It is structured, surgical, and strategic. The three S's for us, which is important. You talked about Southeast Asia. Now, this is becoming almost like a poster child for us, right? What Gorilla does best is large-scale, nationally integrated AI infrastructure projects.
We're leading on projects that range from smart policing to school safety to AI-driven energy grids, national tourist protection systems, and so on and so forth. Now, these are not just pilots. These are real funded operational developments. We are also working with the governments to make sure that we can bring in private funding from third-party investors like sovereigns and so on and so forth. We're also working side by side with ministries, law enforcement, energy authorities to make AI part of their national policy, not just a PowerPoint deck. Now, you talked about South America. What's happening with South America is that I'd like to call this our next engine of growth. Now, for example, in Colombia, we've been invited to lead, design, and build national AI data centers. This is upon the request of the chief advisor, not just a reseller or a middleman.
Now, that tells you everything about the level of access and trust we have established. Now, we're not trying to sell tech. We're trying to shape the country's digital future. That's important for us because we feel that we're leaving a legacy. We're not stopping there. We're working across Peru, Panama, Brazil, Jamaica. We're also laying foundation for groundwork in, let's say, regional sovereign infrastructure model, which includes things like cloud modernization, public safety, digital identity, the whole lot. Okay. Our model is very replicable. Once we have deployed it, let's say, in Southeast Asia, we literally can take that modular model and sovereign by design into a replicable solution. That's what governments want right now. What they were looking for, what, control, transparency, and local capability without being at the mercy of tech companies or systems integrators. Now, strategically, what sets it apart?
A lot of people pick up, they send me emails. They ask questions, "Hey, Jay, why are you different? Why are others not winning?" Now, we are not an AI SaaS company trying to fish for logos. What we are trying to do is we are actually becoming the strategic national infrastructure partner for the governments. We are trying to solve very hard problems for the governments, but we also, at the same time, need to move fast and at scale without compromising sovereignty security. Now, if you look at it, frankly, we show up, we stay in the room, and we actually deliver. That is something which they absolutely feel is very important for them. We are not just tourists. We are boots on the ground. We are tourists. Sorry, we are builders. We are not tourists. We are with boots on the ground, contracts on the hand, and momentum on the side.
But then there's one more side to us, which is the U.S. effort. The U.S. is not just a side project for us. It's a strategic market. We're going in with full conviction, backed by real capability and serious partners. Now, what we are trying to do, if you look at our partner list today, and we're working very closely with these trusted partners, partners like AECOM, Cisco, Intel, Red Hat, BroadSet, amongst others. These are not press release relationships. These are delivery advisory partners and co-investment allies. With AECOM, we're shaping large-scale smart city, smart infrastructure programs. With Cisco and Intel, we're embedding our AI stack into a very secure, high-performance edge environment tailored for the US government and great deployments. Red Hat is helping us power our sovereign infrastructure solutions with open architecture and compliance baked in. BroadSet is helping us go beyond terrestrial networks.
What they're helping us is they're helping us offer satellite-based delivery where resilience and national coverage are critical. That is kind of the global picture. That is why I'm on a plane 24/7 now.
Right. You said you were coming to Miami pretty soon. Another step back into the U.S. for another while.
Yes. I mean, it does matter for us, right? I mean, because to succeed in the U.S., you have to be there. If you're working in transportation, defense, public safety, digital infrastructure, you need to just be more than good tech. You need to be credible. You have to have compliance. You have to have capability at scale, and so on and so forth. We have bolstered our relationship. More importantly, it's not just the best names in the business. We have actually created a strong impact already. Now, we're already in discussion with multiple authorities in the U.S. We're looking to bring in smart airport security, AI incident management systems into play. We are speaking with the law enforcement bodies so we can replicate what we had done in the U.K., for example, with the Metropolitan Police, with the police departments there.
We are also working real-time under real pressure, high-pressure environments as well. Why are they talking to us? Why are some of the departments in the U.S. talking to us? Because what we are doing in Thailand, Colombia, Taiwan, Egypt, Middle East, these are not just experiments. These are live, national-scale projects. We are helping these countries go to the execution model. Yes, we are building our brand, our capabilities in the U.S., but we are also localizing ourselves to the regulatory environment, the delivery muscle, strategic partnerships. More importantly, we want to be the one that delivers.
Great, Jay.
It's much longer than you'd expected. Sorry.
No, no, no problem. Yeah. A lot of these are, what, half a decade, decade and a half, even, projects. So Bruce, you had talked about profitability and cash position for 2024. Can you give us a little bit of an insight into 2025 and what you guys are thinking basically now? I mean, it is May.
Yep. Where we're looking right now as of today is the cash position is $19.5 million unrestricted and another $13 million of restricted cash. That's about $32.5 million of total cash. The current debt position is $18.6 million. That's down about $900,000 from the start of the year or from the end of 2024. Basically, the average interest rate on the debt is less than 3%. It's about 2.92%, 2.93%. We're not in a rush to pay it off, but if it comes up for renewal, we just choose not to renew it. If it's an LC, we retire it. In terms of where it's going, I think, first of all, as I stated, we have about $25 million of invoices that we're collecting on. That was $25 million at the end of the year. We've collected on $5 million of that.
Twenty million of invoices that we're going to collect on in the next month to two months. We're also sending invoices in this quarter that we'll hopefully start collecting on a month to two months after we send them. That together should swing the cash balance in the upward direction, hopefully by $10 million-$30 million before the end of the third quarter. The cash balance is strong. The debt position is we're improving it gradually, but again, no rush given the interest rate. There's no maturity wall or anything like that to worry about. In terms of the overall guidance for this year, I know that that might be another question for later, but I just wanted to say we guide to $100 million-$110 million of revenue this year and EBITDA margins of 20%-25%.
You can sort of work out what our guess is for EBITDA. That is the profitability that we see for the overall business. That is driven, I think, by the gross margin. Jay has done a heroic effort over the last few years to raise the gross margin by getting rid of customers that are not that profitable, by changing and optimizing the product mix so that it is higher margins. Frankly, we have a pipeline that is such we can ask for stronger terms for ourselves. All those together have shifted the gross margin. We expect to stay in the 47%-53% range, bang on a 50% mid or better. We are adding headcount globally. We announced a couple of weeks ago we added a gentleman named Satish in the U.S. Some of this headcount is not directly attributable to projects.
There will be an uplift in the SG&A costs. At the same time, at the project level, we have operating leverage. We can take on increased business levels without adding headcount. It works out to improved margins at the EBITDA level. Some of the people we've been adding are in Egypt, they're in India, a few are in Taiwan. These are not high-cost places, right? Actually, Egypt and India are rather on the low-cost end of the spectrum. When I say that we're hiring 20 engineers in India, I mean, it's not going to be $500,000 per year or $500,000 a year per engineer, right? It's going to be much more modest. The headcount on the SG&A will go up, but sort of less than $1 million or maybe $2 million annualized.
The last thing I would say is, as I mentioned, when you talk about profitability, we are seeing improved terms. Some of the projects, we want to have improved profitability, profit margins. If there is a trade-off to be made where it is a little bit under our target, but it is a 5- year , 10- year , 15-year project, and we get steady recurring revenue and predictability, we will make that trade-off. We will price the recurring nature. For large contracts, we will do that. What we are trying to do now is to optimize the profitability while also getting longer-term contracts with stickier business lines, stickier customers.
Great. Thanks, Bruce. Kind of following on that, look at 2025 and beyond, Jay, can you give us any kind of color on what the pipeline looks like and where things are possibly headed? I mean, I'm not calling for guidance, but any kind of color would be helpful.
Sure. I mean, as John, I mean, we've already provided guidance of what, $100 million - $110 million for 2025. And that is based on real deals, signed contracts, active deployment timelines, and so on and so forth. These are not some pie-in-the-sky investor fantasy for us, right? This is Gorilla stepping into the role as a global AI infrastructure partner, not just as a product company, not just a hype machine, but a serious operator building national systems for governments that want results and not just promises. Otherwise, these guys are not going to be paying us. Let's start with Asia. We are doubling down on national rollouts. We are working on smart policing, smart grids, energy digitization. We're working on AI-powered solar grids as now. Yes, our AI is actually powering AI grids and the sun, which is great.
In Taiwan, our security platforms, they continue to gain ground in government and law enforcement circles. That's real traction with real budgets. We're currently bidding on some very, very large projects in Taiwan, which will transform the business completely at another scale over the next few months. On the LatAm side, we're deploying our sovereign digital infrastructure across our models in Colombia. We're holding very serious discussions now in Peru, Panama, Brazil, Chile, Montego Bay, and so on and so forth. Now, we're not just flying in and selling boxes. We're selling embedded platforms that run everything right from public safety to cloud modernization built locally, operated nationally, and scaled regionally. Now, if you look at the markets going forward, you know we have a very active presence in the Middle East.
We're deepening our relationships in Saudi, Qatar, Dubai, and other parts of the UAE, where smart cities, AI security, and digital infrastructure are national priorities, and they have real funding behind them. Now, if you look at our sovereign-first architecture, our edge AI capability and delivery model, which is being recognized as a different value proposition, that is an opening of the door to very serious opportunities going forward as well. In the U.S., our entry has been very strategic and deliberate, focusing on airport infrastructure, law enforcement, digitization, incident management systems, incident response systems. Like I said, we're working with partners like AECOM, Cisco, Intel, Red Hat, BroadSet. We have muscle and credibility to quickly scale once the doors open. The idea being that what does 2026 look like for us? What does it shape for us?
Bigger projects, stronger margins, more geographies where Gorilla becomes the invisible layer to national AI infrastructure. We're evolving from what I call a startup mode into a sovereign-grade scale. I can say that without blinking today that we are creating real impact. If things keep going the way they are, I might actually get to take a proper holiday in 2027, maybe.
That sounds great. I'm sure you deserve it. Gentlemen, I think we're going to need to leave it there. This is a lot of things for the investors to digest. Jay, Bruce, I really appreciate you spending time with us on today's fireside chat.
I'm looking forward to my holiday in 2027.
To learn more about Gorilla Technology, you can visit their website or access our research on Water Tower Research at www.watertowerresearch.com. I want to thank everyone for joining us. I want to say that the views expressed in this fireside chat may not necessarily reflect the views of Water Tower Research and are provided for informational purposes only. The fireside chat may not be distributed or reproduced without written consent of Water Tower Research and should not be considered research nor recommendation. WTR is an investor relations firm, not a licensed broker, broker-dealer, market maker, investment banker, underwriter, or investment advisor. Additional disclaimers can be found at watertowerresearch.com. Bye, everybody. We'll see you soon.
Thank you, John. Cheers.