Good day, welcome to the Tantalus Systems second quarter 2026 financial results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone, to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mrs. Deborah Honig, Head of Investor Relations. Please go ahead, ma'am. Thank you, operator. Thank you for joining us to discuss Tantalus Systems financial results and operating performance for the second quarter ended June 30th, 2026. Tantalus issued these results, including their financials and of the company's corporate presentation. As a reminder, we will not be utilizing an earnings deck for this call. Joining me today on the call from Tantalus Systems, herein referred to as Tantalus or the company, are Peter Londa, President and Chief Executive Officer, and Azim Lalani, Chief Financial Officer. During the call, we will make forward-looking statements about Tantalus' business. These statements are subject to certain risks and uncertainties, which could cause actual results to differ materially. Tantalus refers conference call participants, either today or in the future, to the company's forward-looking statements contained in the investor presentation on our website at www.tantalus.com. Statements made on this call reflect management's analysis as of today, August sixth, 2026. Management does not assume any responsibility or obligation to update forward-looking statements made during this conference call unless required by law. Please note that the financial information referenced on today's call is stated in U.S. dollars and in accordance with IFRS, unless otherwise stated. The company is also presenting selected non-IFRS financial measures, non-IFRS ratios, and other supplementary measures, including EBITDA, adjusted EBITDA, adjusted EBITDA margin, recurring revenue, annual recurring revenue referred to as ARR, and liquidity. Tantalus believes these non-IFRS measures provide meaningful information to investors. However, they do not have a standardized meaning and are not likely comparable to similar measures presented by other issuers. We'll now turn the call over to Peter Londa, President and CEO. Please go ahead, Pete. Thank you, Deborah, good morning, everyone. On behalf of our board of directors and our employees, thank you for joining us to review our results for the second quarter of 2026. Tantalus delivered a strong second quarter, more importantly than any single number, demonstrated the durability and operating leverage of our business model. Four results define it. Record revenue of $15.4 million, up 18% year-over-year. Gross profit margin of approximately 55%, well above our long-term target of 50%. Positive adjusted EBITDA of $690,000, up 35%, while continuing to fund growth. The strongest balance sheet in our history with approximately $41.3 million of liquidity. We also set new high water marks for first-half revenue at $30 million and trailing 12-month revenue at approximately $60 million. While Azim will take you through the details, I'd like to spend my time on what sits behind these results. Utilities across North America are managing rising load, aging distribution infrastructure, heightened reliability expectations, and real affordability pressure on the customers they serve all at the same time. The scale of the response is substantial, and it is concentrated in exactly the part of the grid where we operate. According to Lawrence Berkeley National Laboratory, distribution has become the fastest-growing category of utility investments, rising by roughly 50% between 2019 and 2023, a period over which generation CapEx spending actually declined. While research that tracks utility spending certainly highlights the opportunity, we continue to validate that opportunity by expanding the number of utilities in our user community with another five new additions in Q2 and witnessing an increasing number of utilities embrace and adopt our technology, including another seven utilities adding the TRUSense Gateway into their mix. We see expanding investments in the distribution grid that go beyond metering and are hearing utilities ask about sequencing their investments and deployments. How do they do more with and extend the life of the infrastructure they already own, since many utilities cannot upgrade everything all at once? Utilities also already hold a considerable amount of data. We recently witnessed the first IOU utilizing the TRUSense Gateway report to their regulators that they have lacked visibility into what is actually happening across their grid, which from our perspective, reflects just the tip of the iceberg, since the need to leverage and supplement existing systems to provide that visibility to utilities is precisely what Tantalus was built to deliver. The opportunity to upgrade the distribution grid is massive and not just limited to the U.S. As reflected in our filings yesterday, we are actively investing to expand in Canada by hiring our folks. Ontario's integrated energy plan contemplates CAD 103 billion- CAD 120 billion to upgrade the province's distribution system. We believe our previous announcement relating to the factory integration with the Aclara meters that supports Measurement Canada and our heritage as a Canadian-based company positions us well. The clearest financial evidence of the opportunity in front of us and validation that our business model is working ties to the continued growth of our annual recurring revenue, or ARR. We hit a new milestone of $15 million in ARR as of June 30th, and our compound annual growth rate of recurring revenue dating back to 2016 is approximately 19%. Nine consecutive years of compounding at that rate indicates that our solutions are gaining traction, that we are making good progress towards a paradigm shift in the industry to embrace data-centric solutions, and that our business is scalable. Every connected device we deploy expands the installed base against which we can deliver analytics and software to solve problems for utilities, and every new application we introduce increases the value of that base. That is the engine that converts traditional hardware deployments into predictable, high-margin, recurring revenue, and we are pleased with the continued upward trajectory that continues to hit and deliver new quarterly milestones. To drive operating leverage out of our business model and deliver earnings power, we start by evaluating our gross profit margin, which hit nearly 55% in Q2. On a relative basis to other grid modernization companies in our sector, we are delivering among the highest thresholds of gross profit margin, which is a direct reflection of deliberate management by our team and consistency within our business model. Margins remained strong within connected devices and infrastructure, and we continued to benefit from higher margins generated by our software and services segment. While the large majority of our supply chain remains stable, we are actively managing pockets of cost pressure for specific components, including memory. To protect margin continuity through the second half of 2026, our team put our balance sheet to work building inventory of key components and finished goods ahead of anticipated deployments. That strategic planning insulates our bill of materials from the risk of component price increases and positions us to meet customer demand without interruption. It reflects both the financial strength we have built and the disciplined, forward-looking approach our team takes in managing the business. Turning to commercial results, as of today's call, 77 utilities have placed orders for the TRUSense Gateway, up from 70 as reported during our first quarter earnings call. More significant than the count is the progression. Utilities moving beyond pilots into scaling deployments grew from 28- 37 over the past three months. We have now shipped roughly 6,200 TRUSense Gateways and deployment volumes are expanding, which also helps us build and validate use cases over time. That progression from evaluation to deployment is the clearest validation we can point to. Utilities are confirming with their capital two things that make the TRUSense Gateway unique. First, it delivers circuit-level visibility into power quality from the edge of the grid, a capability that has not previously been available in our industry for metering. Second, it offers a practical alternative to traditional rip-and-replace models for metering infrastructure. That value proposition was tested in a public hearing a few weeks ago. In July, our Innovative Energy Solutions pilot with United Illuminating was reviewed before the Connecticut Public Utilities Regulatory Authority. Both the utility and the program administrator confirmed the pilot worked as intended, and both highlighted the circuit-level visibility that the utility had not previously had. We are awaiting the regulator's determination, but the pilot proved something significant and that is applicable to all utilities. A single device can deliver granular power quality measurement in front of a meter while simultaneously integrating distributed energy resources and creating dispatchable load behind the meter in a secure, equitable, and reliable manner. We believe this unique capability of the TRUSense Gateway will become increasingly important as the rise of data centers and large industrial loads continue to pressure local and rural distribution grids. We also expanded our software platform during the quarter with two new offerings, both designed to help utilities generate greater value from the data they are already collecting. TRUGrid Verify is an AI-enabled analytics application that identifies and eliminates hidden errors in data from GIS and AMI systems, whether those are Tantalus Systems or our competitors. TRUGrid Advantage is a managed service that pairs our analytics suite with Tantalus data experts to help utilities convert that data into actionable insights. Both capabilities advance the same strategy, growing recurring higher-margin software and services revenue while deepening the value we deliver. We have utilities already deploying and leveraging these new offerings, and we are well-capitalized to keep investing behind initiatives like these. That brings me to orders, where I want to give you the full picture rather than focus on a single ratio. Through the first six months of 2026, we converted approximately $30 million of orders, producing a book-to-bill ratio of approximately 0.97 x. A few points of context are important here. First, we believe a rolling book-to-bill ratio is more relevant given the size of Tantalus, because that is the lens that best reflects how our orders actually materialize. As previously referenced, our average sales cycle approximates 18 months and can vary utility by utility. Order timing in our market is driven by utility budget cycles, board and commission approvals, and project scheduling, most of which is outside of our control and none of which aligns neatly to a 90-day window. A single quarter's implied ratio will move above and below 1.0. If we look back at the past 14 quarters where Tantalus has reported quarterly orders figures, you'll notice that eight of those quarters, or over 50%, are below 1.0. The range on a quarterly basis varied from 0.46x to 2.3 x. On an annual basis, dating back to 2021, that range has varied between 0.84x and 1.76 x. From our perspective, the book-to-bill ratio is never a straight upward line. On its own, a sub 1.0 quarter or period of time is not the best or only signal about demand of our ability to scale, as it fails to take into consideration the attributes of our overall model, including the depth of our user community, the percentage of revenue that's derived from existing customer base each year, outstanding backlog tied to multi-year deployments, and our ability to drive ARR. More importantly, every forward indicator we track is moving in the right direction. There are four I draw to your attention. First, the adoption of our solutions is broadening. As referenced yesterday, we've added seven utilities, placing orders for the TRUSense Gateway over the past three months, with 77 in total now moving forward. Our order base is becoming broader for all solutions, which will support our ability to scale over the coming years. Second, customers are scaling. As an example, 37 utilities are now moving in deployments of the TRUSense Gateway, up from 28 just three months ago. Our user community is quickly approaching 350 utilities. Those conversions from pilot to deployment and the expanded user community are the clearest leading indicators we have of future order flow. Third, near-term conversion is in motion. We currently have eight utilities in active contracting, compared with four utilities at the end of the second quarter of 2025, and we expect all late opportunities to convert before year-end. Lastly, I'd say our qualified order pipeline is at a record level. It's the strongest in our company's history. That strength reflects two forces, the necessity for utilities to modernize the distribution grid, and our data-centric approach, which lets them sequence that modernization through prioritized investments rather than a single large capital event. Those are the operating highlights for the quarter, I want to thank our team for the execution behind them. With that, I'll turn it over to Azim to review our financial results in more detail and then provide some broader observations before we take your questions. Go ahead, Azim. Thank you, Pete. As a reminder, all financial results are reported in US dollars unless otherwise stated. The second quarter demonstrated growth across both our connected devices and infrastructure and our utility software applications and services segments while improving the overall quality and visibility of our revenue. I'll cover five areas: revenue quality, margins, cash flow, the balance sheet, and where we stand on a trailing 12-month basis. Revenue of $15.4 million grew 18% year-over-year, notably, both reported segments grew at the same rate. Connected devices segment revenue was $10.4 million, an increase of $1.6 million. Software and services segment revenue was $5 million, an increase of $770,000. Growth was driven by the ongoing expansion of deployments across our existing customer base, new utilities joining our platform, continued adoption of the TRUSense Gateway, higher software and maintenance revenue. Two characteristics of that revenue matter as we evaluate our performance. The first is durability. Approximately 89% of revenue during the quarter and 87% relationships, the significant opportunity to deepen them through additional connected devices, software applications, and analytics over time. The second is diversification, it is a characteristic of our business we believe is often overlooked. No single customer represented more than 5% of first half revenue, our largest customer remained well below 10% of revenue on a trailing 12-month basis. For a company of our scale, that is an unusually broad base. It materially reduces concentration risk, reflects our platform-based approach, gives us confidence in our multi-year growth trajectory. A key element of our long-term strategy is increasing the amount of recurring revenue. Recurring revenue generated during the quarter increased to approximately $3.6 million and represented 23% of total revenue. As previously mentioned, annual recurring revenue, which we report on a forward-looking 12-month basis, reached another record of $15 million, representing 13% year-over-year growth. As utilities deploy more connected devices across their distribution systems, they create long-term opportunities for software products, analytics applications, and managed services over the life of those assets. The two TRUGrid offerings Pete described are direct examples of how we expand the value of that installed base. Our overall gross profit margin remains strong at approximately 55% and continues to trend favorably. Three dynamics are worth understanding within connected devices segment. First, tariffs. We are currently incurring tariff rates of 12.5%, which we fully pass through to our customers. The impact on margins this quarter was muted. Though, on a first-half basis, the year-over-year comparison is more pronounced as initial tariffs only came into effect on April 2nd, 2025. Second, as TRUSense Gateway production scales, we expect to realize manufacturing efficiencies through larger volumes that will improve margin contribution over time, and this is beginning to materialize. Third, for component costs, we have proactively taken steps to manage supply chain continuity. Importantly, our software and services segment generated strong gross margins of approximately 78%, highlighting the attractive economics of that platform. As it grows as a share of the mix, it lifts our consolidated margin profile, which is the core of our strategy. We reported a loss for the period of $1 million, compared with a loss of $903,000 in the prior year. Higher gross profit was offset by deliberate decisions to increase headcount in research and development and in sales and marketing to support longer-term growth initiatives. Adjusted EBITDA was positive at $690,000, compared with $510,000 in the prior year, which represents 35% growth year-over-year. While we continue to demonstrate improving operating leverage as Tantalus scales, we remain committed to investing in strategic growth initiatives across sales and marketing and product development. We believe these investments position us to capture significantly more opportunities as utilities continue to modernize the distribution grid. Cash used in operating activities during the quarter was $5.7 million. For clarity, I want to be specific about the composition, because it was entirely working capital and a function of timing and not a structural change in our business model. Cash operating profit before working capital was positive. Within working capital, inventory consumed approximately $2 million of cash. That was a deliberate decision made earlier this year in response to conditions in the global memory and semiconductor markets. Specifically, we increased inventory of our high-volume edge computing modules that are integrated into third-party meters, additional TRUSense Gateways, and our custom ASIC. We expect the bulk of those modules and gateways to convert to revenue in the second half of 2026 and to continue supporting strong gross profit margins. Given capacity constraints and pricing across the semiconductor sector, we now have sufficient supply visibility into mid-2027 to ensure continuity for our customers. In addition to the investment in inventory, we also witnessed strong collections during the quarter while processing payments to key suppliers. Deferred revenue followed its normal seasonal pattern, building in the fourth and first quarters as renewals are billed. Declining in the second and third quarters as revenue is recognized. This seasonal movement in deferred revenue contributed approximately $ 2.6 million of our use of cash. The right frame for our cash generation model is the trailing 12 months, over which operating cash flow was approximately $ 1.1 million and free cash flow was positive, after the investment in working capital and after increased headcount. We will continue to use our balance sheet opportunistically where it protects margins and maintains continuity of our supply chain. To that end, during the quarter, we restructured our loan facility with Fifth Third Bank, formerly Comerica Bank, upsizing the revolver to $12 million and adding a new $ 3.5 million term loan. After quarter end, we used those new loan proceeds and cash on hand to fully repay our EDC term loan. This series of actions accomplished four things. First, we de-levered the business. On a trailing 12-month basis, our debt to EBITDA ratio moved from approximately 1.5x to below 0.9 x. Second, we increased liquidity by upsizing the revolver. Third, we lowered our interest costs with the average rate on the term loan declining from 11.75% to under 6%. This is expected to generate approximately $200,000 in annualized cash interest savings. Fourth, we extended loan maturity dates, moving the revolver maturity date to June 30, 2029, and the term loan maturity date to June 29, 2031. As a result, the company has no debt maturities over the next three years, and by consolidating our borrowings with a single lender, we have a simplified capital structure. Notwithstanding our investments in working capital and headcount, overall liquidity improved to approximately $41.3 million, consisting of $29.3 million in cash and $12 million of available borrowing capacity under the revolver, and we remain comfortably within our covenants. That positions us to support continued investment in product innovation, software and services, sales and marketing, and other strategic growth opportunities. Beyond the Q2 results, we track trailing 12-month results given the size of our organization and the corresponding buy cycles of utilities, so that investors can look through normal quarterly seasonality and focus on the underlying growth of the business. Revenue was approximately $60 million on a trailing 12-month basis, another all-time high, and more than 21% growth over the prior 12-month period. This marked the eighth consecutive quarter in which we set a new trailing 12-month revenue record. Recurring revenue recognized over this period increased 16% to $14.7 million, representing approximately 25% of total revenue. Adjusted EBITDA was approximately $4 million, reflecting 40% growth year-over-year, and an adjusted EBITDA margin of 6.7%. Revenue compounding above 20%, while adjusted EBITDA grows 40% is operating leverage, and it is the clearest financial expression of the model Pete described earlier. Combined with the de-leveraging and liquidity improvements, it demonstrates that we are funding our growth strategy while generating cash and maintaining a solid financial foundation. With that, I'll turn it back to Pete. Thanks, Azim. Before we open the line for questions, I want to briefly step back because the four results we led with are more than just a set of data points. Together, they describe a business model working as designed. Record revenue indicates that demand is real and that we are winning our share of it. Gross profit margin, near 55%, indicates that we are selling differentiated capabilities rather than competing on price. Adjusted EBITDA growing at 40% on a trailing 12-month basis, while we simultaneously increase investment in R&D and sales and marketing, as well as pursue new geographic locations, indicates that our business model generates operating leverage as it scales. The strongest balance sheet in our history enables us to fund the next phase of our growth. The utility industry is in the early stages of a multi-year grid modernization cycle. The companies that capture it will be the ones able to invest consistently across its length. We are now one of them. On behalf of our team, Tantalus is entering the second half of 2026 in the strongest position in our company's history, and we remain optimistic about our position in the market. Thank you very much for your time. Operator, we're ready to take questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Our first question for today will come from Baltej Sidhu with National Bank of Canada. Please go ahead. Good morning and congrats on the results. Pete, I appreciate the color you provided on the book-to-bill. I just wanted to dig a bit deeper, given the continued volatility and elevated oil and fuel prices. Could you provide some color on if anything has changed in conversations or customers' purchasing timelines relative to prior periods? Baltej, good morning, and thanks for the question. If I think back to our comments after the Q1 results and during that earnings call in May, we had referenced that from Tantalus's experience, I'll personalize it, from my experience in almost 20 years. When there's volatility at the macro level, whether that's inflationary pressure, gas prices in particular, and geopolitical uncertainty, what's unfolding in Iran right now, utilities tend to be conservative. We've got a number of utilities that are sitting in contracting. I have confidence in all of them. They have funding available. They are moving through their processes. My gut instinct is they are being deliberate to try to better understand the implications of what's unfolding globally. Certainly with the continued reports and indications of inflationary pressures throughout our economy here in the U.S. and in Canada, I think utilities, I wouldn't suggest they're at a pause, but I think they're just being more deliberate. It's not uncommon. With that said, we're making good progress. It may not translate into a metric in Q2. Overall, for the first half, we're calculating a metric based on the highest amount of revenue that we've ever generated in the first six months of a year, which is the denominator in that calculation. We're seeing now eight utilities convert through the first six months with eight more in contracting. That gives me a lot of confidence that we'll stay on track to deliver our average 20 utilities adding to the user community. I think we're really pleased with the progress we're making on the TRUSense Gateway. To the extent broader economic and inflationary pressures impact utilities, it will force them to focus on how to maximize the value of what's already in the field. That's where the TRUSense Gateway and our analytics play extremely well. I think we've got a natural hedge based on our capabilities, Baltej. As a result, we feel pretty strongly about where we are as an organization. Thanks for that, Pete. Then just pivoting over to the TRUSense Gateway adoption. It's encouraging to see the increase during the quarter. Could you just provide some detail on where the 37 utilities currently in the post-pilot stage sit within the broader commercialization process? Yeah. There are really three primary use cases. They're then derivatives off of that. There are three primary use cases that are emerging for us. The first one that is advancing most rapidly is incorporating the TRUSense Gateway as part of a broader smart metering or AMI system, and really advancing a legacy system to more robust capabilities. That's the path of leveraging existing infrastructure without having to rip and replace. The TRUSense Gateway is unique. It's not only got the granular power quality sensing at a level that has never been available in our market, and the behind-the-meter control, but it also serves as a collector that sits right at a meter socket, meaning devices don't have to be put up on poles. Utilities don't have to run bucket trucks and incur that expense to begin collecting data from meters or other devices in and around the area. That use case is the one that's most advanced. The 37 utilities, all of them are focused on either enhancing an existing AMI system or simultaneously upgrading metering infrastructure over a period of time. The second use case is the power quality measurement capabilities. While we've got uncertainty in terms of the direction the state of Connecticut will take, to have a program administrator on behalf of regulators, to have an investor-owned utility convey publicly that the TRUSense Gateway is delivering a level of visibility at the circuit level that the utility does not currently have today, is a very powerful statement from our perspective. We see a number of opportunities around that power quality measurement. We've got, of the 37 utilities, I think all interested in the capability. Some are trying to figure out what to prioritize, as is our team from a product management and solution engineering perspective. I think that's the next big use case that really drives incremental volume and incremental utilities. The third use case is load management and behind-the-meter capabilities. We're seeing increasing pressure and certainly an increasing amount of attention on the current administration's efforts to have data centers activated. The vast majority of data centers on file or planned are in rural communities. That's right in the sweet spot of where we operate and where we have competitive advantage. I think as data centers surface, and utilities need to think about how to manage that large industrial load or large load capability. I see potential partnership between data center, utility, and Tantalus to leverage dispatchable load behind the meter, to offset variability and pressure on the grid. That'll take a little bit more time to validate, Baltej, but if we can hit on all three of those use cases, we'll have massively exceeded our expectations over time. Very good. Just a quick follow-up, on the last point you made there, and maybe this is a little bit preliminary, but are you having any conversations with data centers and utilities in that regard? Just given you hinted towards you operate more in the sweet spot in the rural communities. Not to sidestep your question, Baltej, maybe we can revisit that at a future time. I'd say we're formulating a robust strategy around it. We have a number of existing customers that are contemplating and planning for the impact of data centers beginning construction within their footprint. I think the opportunity there, I'm not sure if it's 12 months out, but it's coming, and I think we're going to be extremely well-positioned for it. Perfect. Thank you, Pete, and congrats once again. I'll turn the line. The next question will come from Nick Boychuk with ATB Cormark. Please go ahead. Thanks. Morning, Pete. Morning, Azim. I want to focus a little bit on the TRUSense Gateway order book. You called it this quarter, there's the 37 utilities beyond their pilot. We also know that EPB Chattanooga ordered 20,000 of these devices last year. Relative to the 6,200 that you've already shipped, I'm curious how that ties into the comment that Azim made on earnings quality. At this point, the snowball has rolled enough down the hill that you must have a lot of visibility on the TRUSense orders that you're going to get just from these 37 existing utilities. How is that impacting the way that you're running the business, either from a sales and marketing, manufacturing, inventory? The visibility must be improving your business decision-making. Any color around that would be helpful. Let me provide you some context. Azim can, I think, dive deeper on how we are leveraging our balance sheet strength to build inventory and prepare, Nick. By the way, good morning, and thanks for the question. The visibility only continues to improve for us. Where I would just try to be mindful of not getting ahead of or getting over our skis is, in my experience, when new technology is introduced into the utility industry. This is not just for Tantalus, but what I've seen from other organizations that are driving innovation like us. Utilities tend to be, we like to use the word deliberate, but also cautious. They test, they evaluate, and from that, they then begin to deploy. The slope of the curve on adoption is a bit of a bell curve. It's fairly slow at the beginning. As the utility integrates the capabilities, integrates the data, and really starts to maximize the value of the technology, it accelerates at a pretty quick rate. The TRUSense Gateway will follow that curve, in my opinion, and certainly based on what we're seeing. As from our perspective, beyond how to prepare for that, the balance sheet strength puts us in the best position possible. I'd say where our focus is really at this point is in the solution engineering expertise of the company, enhancing our distribution engineering expertise and access so that we can quickly start to think about how that power quality data solves very specific problems. The sooner we can do that and the faster we can invest behind it through analytics, the more adoption we'll see. Azim, do you want to cover what we're doing from an inventory perspective and how that sort of transpired with cash flow in Q2? Yeah, absolutely. The comment I would add is we have visibility into orders for TRUSense Gateway for the back half of 2026 and into 2027. In that anticipation of that, what we were seeing with pricing increases for certain components really pushed us to dive in and stock up on some of the product so that we could maintain pricing consistency and protect the margins over the next few quarters. Okay. That's great. Thanks. I guess on that margin front, specifically related to TXG, there was a line in the MD&A calling out how there's a little bit of gross margin percentage headwind from the initial delivery of those units. Do you guys have a sense of the inflection point of when that would convert to positive margin contribution? Is there a number of units you have to reach with your contract manufacturer where that becomes a positive? I think at the volume we're currently at on a monthly basis, Nick, we are able to hit the gross profit margin on the hardware, on the device itself, and be in alignment with the balance of our connected devices portfolio. I think we've gotten fairly close to that inflection point. The reference was really the first few thousand that we built into the end of last year and into the beginning of this year. That's where we still generated positive margin contribution, but just at a lower percent than our normal connected devices average. I think, relative to where we are from a monthly volume today, we're pretty close to it. Okay. Where we are seeing some pressure, and we've referenced this in the memory market, we have an SD card. It's a removable card that plugs into the TRUSense Gateway. The SD card market is tough. We are working rapidly, from a supply perspective, from a vendor perspective, and from an engineering perspective, to ensure it doesn't compromise or impact margin, both for us as well as price to the customer. I'm pretty confident we'll be able to navigate around it. Got it. Thanks. Just tying it to your point back to the data you mentioned pulling out of the TXG, the new AI offering and the managed service offering that you have, how much of that was you guys identifying a need that your customers had, either a lack of resources on their end to manage the data that your devices are producing? Was this them actually pulling you into those opportunities such that you think that both of these offerings are almost going to be near guaranteed tag-alongs when you start to sell future TXGs to new utilities? Thanks, Nick. One of the great attributes of our organization is the users conference, which you've had the benefit of attending the past few years. As you know, at that users conference, we run a series of surveys that ties directly into our product roadmap. From that product roadmap, we develop and deliver to solve specific problems. We are building capabilities alongside utilities as they're identifying problems, as opposed to just building and hoping that we'll hit the mark. I'd say that TRUGrid Verify and TRUGrid Advantage are directly correlated to feedback that we received, not this most recent one, 2026, but feedback that we received in 2025. We then launched both of those capabilities at this most recent users conference, a year removed from the feedback. I think we'll continue to see that. It's a unique element of working with public power and electric cooperative utilities. They are collaborative in nature. They are capable of joining advisory committees, which we've used very effectively, as you know. We'll continue to leverage utilities. They frankly have greater expertise in how to manage their respective systems than we do, since every grid is a little bit different and unique. As issues surface and as utilities and our team identify ways to solve based on the data-centric approach that we're taking through the TRUSense Gateway, I think we're only going to see an incremental number of analytics materialize. Yes, I would expect that their bolt-on capability enhancing the value of the TRUSense Gateway out of the box. I'd also say, keep in mind the way we've structured our pricing, the upfront revenue that we generate, hits both connected devices and software and services with the device license. The recurring revenue from the TRUSense Gateways kicks in at month 13. As we think about normalizing margin as well, Nick, over time, the life of that TRUSense Gateway margin only begins to enhance at month 13, as the revenue from it is 100% tied to software maintenance and TSAs and the software and services segment. I think it double-fisted there in terms of pull-through and margin accretion. Thanks a lot of times, guys. Really appreciate the color. Thank you. The next question will come from Jeffrey Osborne with TD Cowen. Please go ahead. Yeah, thanks. Good morning, Pete. Just two quick ones on my side. I was wondering if you could give us a sense of perspective on what your anticipated OpEx trajectory is in the second half versus the step-up in the second quarter. Yeah. Thanks, Jeff. Good morning. Thanks for the question. I'd say twofold. We added some headcount, and activated some efforts in the first half and in Q2 to really get after the Canadian market. I think that'll normalize as that train leaves the station. We've also added some horsepower recently to bolster our internal analysis of pipeline to support the sales team, and really prioritize opportunities. I think that'll normalize. Within R&D, we've done a bit of restructuring in Q2 that led to some one-time costs that do not repeat, and I'd see that normalizing in Q3 as well. Azim, you've got your finger on the pulse of OpEx, so please feel free to jump in and add color. Yeah, absolutely. I think the way to think about OpEx, as Pete mentioned, we did have some restructuring charges, which are non-recurring. Outside of that, it's probably a good run rate of where we think OpEx will land for the balance of the year. Got it. Do you happen to know how many people you added in the second quarter? I just took a peek at your jobs posting site. You have seven open positions now. I'm just trying to get a sense of what net people will be. Yeah. Mainly in the R&D side, we added about five or six. I know in the first half, we've added about 11 bodies, which has been mostly skewed towards Q2. Perfect. Maybe, Pete, just for you, coming out of DistribuTECH earlier in the year, you had highlighted some momentum discussion, so to speak, with other IOUs beyond Connecticut. Can you just update that opportunity for us? I know the sales cycle's very long, especially with them, any progress beyond the state of Connecticut would be helpful too. Appreciate it. Yeah. Thanks, Jeff. It's an area of focus for us. I'd say we've started to see some traction in the southeast portion of the U.S., where I think power quality is going to be paramount. I think the behind the meter capability, and at least at a minimum, even though the deployment was not large up in Connecticut, at least validates publicly, and at a regulatory level, that we can control and create dispatchable load behind the meter in a very secure and reliable manner for the utility. I think that's going to get some attention as we think about the Southwest and into Texas, given some of the challenges that are being confronted out there with load capacity constraints. I'd say it's small, but we actually won our first IOU around an AMI system. It's a small IOU up in the Pacific Northwest. It's actually deploying a combination of our metering capabilities as well as our TRUSense Gateway and analytics will follow. I'd say we're starting to make progress there, Jeff. One thing that as we're learning through trial and error in Connecticut, the regulatory process is one that's new for our sales organization. Not necessarily individuals within our sales organization, but as a team. We've got to be very mindful of how we balance and prepare for the concept of a rate case, which is just very different than an ROI analysis for co-op and public power utilities. Perfect. One 20-second clear. Yeah. Quick clarification. When you say you won it, does that mean it has regulatory approval or you've been technically awarded it and then that IOU is seeking state level approval? No, it's been approved at the state level. Good to hear. It's got regulatory approval and it's deploying. Excellent. Thank you. Yep. The next question will come from Gianluca Tucci with Haywood. Please go ahead. Hi. Good morning, guys. Congrats on all the progress. Pete, maybe just taking a step back at a higher level, the yield curve is steepening out here. Are you hearing any concerns or commentary around budgets, budget cycles, budget holdbacks from customers? I'm just curious if this is trickling into budget decisions. Gianluca, Good morning, and thanks. I'd say, in a few conversations I've had at the senior level of utilities, what we're hearing is that other vendors are raising price as a result of certain components across the supply chain. We haven't activated a price increase, but we'll evaluate it in normal course the way we always do. That just puts compression within public power, municipal, and cooperative utilities. There's a finite budget within the calendar year. As price increases hit, it impacts dollar spend within that budget. IOUs are a little bit different with the way that they can maneuver around that a little bit more seamlessly. Yeah, we're starting to get feedback on at least the annual budget process. With that said, that goes hand in hand with the follow-up question from those general managers of how do we help those utilities extend the life of existing infrastructure, maximize the value of what they've got, and then think about a sequencing of deployment. As we think about 10- and 15- and 20-year relationships, I think we're in an excellent position to be responsive to that, both from a technology solutions perspective of extending the life of existing stuff and then helping utilities sequence relative to near-term pressure that they might be seeing as a result of other vendors raising price. Okay. That's really helpful. Thanks, Peter. Perhaps a follow-up question for Azim. R&D saw a nice uptick in the quarter. Could you unpack that for us? Where is that being spent? On the TRUSense, or is that on next-gen products in the pipeline? Just some color there would be helpful, Azim. Thanks. I'll pass the line. I always like it when somebody answers their own question, certainly from our perspective, it's really twofold. The first one is on the analytics side. We do have those two products that Pete mentioned. Quite a bit of work is required for that. Certainly from a managed services perspective, we're looking at investments there, it's not necessarily just people. It's people, it's software, it's virtual servers. There's a whole bunch of back-end stuff that's required to support that type of product offering. Then clearly, as we are ramping up TRUSense Gateway and looking at enhancing that product, there's investments there. When you look at our OpEx profile, you can see that by far the largest increase in OpEx was R&D, that's where all the bodies are going from a cost perspective. Okay, thanks, guys. Congrats again. Thanks, Gianluca. The next question will come from Theo Genzebu with Raymond James. Please go ahead. Hey, great. Thanks, Pete and Azim, for taking my call today. Good discussion today. Most of the questions have been asked, just a couple on my side. For the 30% of the 70 utilities placing orders for the Gateway who are new to the community, just some color on how the cross-selling for other Tantalus products has gone. Is that too early to fully know just yet? Theo, thanks. I'd say in all circumstances, those utilities are buying capabilities beyond the TRUSense Gateway. We've been really fortunate on that. The TRUSense Gateway, I'd say in almost every single one of those new utilities to our user community, if I understand your question correctly, have selected Tantalus because of the TRUSense Gateway. I'd say the pull-through for us is substantial. We track number of devices shipped, deployed, utilities activating. In every circumstance, I should say in almost every circumstance, it's creating an opportunity for us to either be selected by the utility for a much more comprehensive grid modernization deployment and/or pulling other capabilities with it. Really pleased with the progress that's been made in such a short period of time. Okay. Yeah, great. Thanks for the extra color on that. Maybe just one more from me on Canada, I know it's early days, I believe this is your second quarter with the expanded Canadian commercial effort. Have you started to see any measurable traction in the Canadian pipeline? How did that opportunity, I guess, compare with your expectations entering the year? I think we've exceeded expectation is probably the best way to describe or answer your question succinctly. Okay. The progress that the team's making, I think is being demonstrated in the number of metrics that we've outlined that are good barometers for the confidence we have moving forward. Great. Okay. Thanks for answering my questions today. Congrats on a great quarter. Thank you. The next question will come from Gabriel Leung with Beacon Securities. Please go ahead. Good morning. Thanks for taking my questions. Actually, I just have one pretty simple one, I think, Pete. I think during the user conference, you had provided a metric around how many TRUSense units had yet to be delivered amongst the 70 utilities which had already placed orders. I'm curious, I think it was like 22,000 or something. Do you have an updated figure based on the 77 utilities that now have placed orders? In terms of the aggregate number, Gabe, it's north of 25,000. I just, off the top of my head, can't give you the specific number. In terms of aggregate number of TRUSense Gateways ordered at this point, we're approaching 30,000. Gotcha. That's perfect. It's really helpful. Thanks a lot. Yep. Thank you. That will conclude our question and answer session. I would like to turn the conference back over to Mr. Peter Londa for any closing remarks. Please go ahead. First and foremost, thank you all for allocating time to our Q2 update. I would remind everybody, to the extent they'd like additional information about our results, they can find that on our website under the investor's landing page and our investor presentation, as well as the filed results. Finally, I'd just like to thank and commend the broader team at Tantalus for the continued hard work, and great execution as we end Q2 on record results for the business. Hope you all have a great day, and appreciate your time. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.