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DATE

Tuesday, May 12, 2026 at 10 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Ramey Pierce Jackson
  • Chief Financial Officer — Anselm Wong
  • Vice President of Investor Relations — Sara E. Macioch

TAKEAWAYS

  • Revenue -- $222.7 million, an increase of 5.8%, with $18.1 million from acquisitions.
  • Adjusted EBITDA -- $33 million, down 14.1%, resulting in a margin decline to 14.8% (down 340 basis points).
  • Organic New Construction Revenue -- Decreased 9.9%, while total new construction rose 10.9%, driven by the Kiwi acquisition and international gains.
  • R3 (Renovation, Redevelopment, Conversion) -- Revenue increased 5.3%, driven by more redevelopment and improved conversion activity.
  • International Segment Revenue -- Rose to $27.3 million, up 28.8%, attributed to market share gains and new construction growth.
  • Commercial & Other Segment Revenue -- Declined by 0.5%, with continued softness in commercial sheet doors partly offset by gains in rolling steel and freight terminal projects.
  • Nokē Smart Entry Installed Units -- 477,000 at quarter-end, marking a 24.2% increase and supported by growing international adoption.
  • Share Repurchases -- 2.9 million shares repurchased for $15.7 million; $65 million remains authorized.
  • Cash Flow -- $36.2 million from operations and $33.4 million in free cash flow; trailing-12-month conversion of adjusted net income at 155%.
  • Liquidity and Leverage -- $183.8 million in liquidity, including $112 million in cash; net leverage at 2.7x following the Kiwi II Construction acquisition; total outstanding long-term debt is $551 million.
  • First Lien Term Loan Repricing -- Interest rate reduced by 50 basis points to SOFR+200.
  • 2026 Guidance -- Revenue expected between $940 million and $980 million, with $90 million to $100 million inorganic from Kiwi II Construction; adjusted EBITDA forecast in the $105 million to $185 million range (midpoint margin 18.2%).
  • Kiwi II Impact -- Management expects this acquisition to drag margin in 2026.
  • Free Cash Flow Conversion Guidance -- 75%-100% target for 2026, expected near the high end.
  • Tax Rate Guidance -- 29%-31% for the year, elevated by one-time acquisition and refinancing costs in Q1.
  • Product Launches -- New Nokē Infinity on-door smart lock, featuring dual technology with five-year battery and NFC backup, available for factory install in Q3; Door-to-Door Replace app introduced for streamlined self-storage door replacement quoting and ordering.
  • Cost Optimization -- Operational efficiencies expected from Houston facility consolidation, with savings accelerating through Q3 and Q4.

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RISKS

  • Adjusted EBITDA Margin Decline -- Margin dropped 340 basis points to 14.8%, attributed to segment and channel mix, with management expecting Kiwi II Construction to further reduce 2026 margins.
  • North America Organic Self Storage Revenue -- Guidance includes a mid-single-digit decline, primarily from ongoing softness in new construction.
  • Commercial Sheet Door Weakness -- Commercial sheet door segment continued to soften, partially offset by rolling steel performance.
  • Management Cited Headwinds -- CEO Jackson said, "new construction demand in North America is impacted by interest rates liquidity, all the things we have been talking about, mobility around housing, and I do not see that changing until we get some reprieve on interest rates."

SUMMARY

Management reaffirmed 2026 guidance despite continued operational challenges, highlighting incremental revenue growth through acquisitions and strong international performance. Capital allocation included $15.7 million in share repurchases, reflecting confidence in valuation and cash flow consistency. New product introductions, including the Nokē Infinity platform and the Door-to-Door Replace app, signal an ongoing strategy to drive technology adoption and recurring revenue. Improved liquidity, SOFR-based interest savings, and capital discipline support ongoing investment and shareholder returns while navigating a subdued demand environment.

  • International growth benefited from targeted project wins and increased Nokē adoption, especially in Germany and Spain.
  • Free cash flow conversion remains well above the long-term target, indicating robust cash generation that enabled continued share repurchases.
  • Operational and architectural wins in the rolling steel door business partially offset weakness in other commercial segments.
  • Management identified current demand conditions as unchanged quarter over quarter, with improvement prospects tied closely to lower interest rates and housing activity normalization.
  • Integration of Kiwi II Construction is progressing as planned, yielding early cross-selling successes and new customer exposure for Janus core offerings.
  • The company confirmed input cost mitigation strategies, including contract-based cost pass-through mechanisms and fuel surcharges, to address steel and fuel price volatility.
  • Artificial intelligence has begun to lower Nokē software development costs, potentially reducing unit breakeven levels and accelerating scale benefits.

INDUSTRY GLOSSARY

  • R3: Refers to renovation, redevelopment, and conversion activities focused on upgrading and modernizing existing self-storage facilities.
  • Nokē: Janus International’s proprietary smart entry platform for secure, wireless self-storage access and monitoring, featuring both hardwired (Ion) and wireless (Infinity) configurations.
  • SOFR: Secured Overnight Financing Rate; a benchmark interest rate used for financing, frequently referenced in loan pricing.
  • Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted for acquisition, restructuring, and other one-time costs, as reported by management.

Full Conference Call Transcript

Sara E. Macioch: Thank you, operator, and thank you all for joining our earnings conference call. I am joined today by our Chief Executive Officer, Ramey Pierce Jackson, and our Chief Financial Officer, Anselm Wong. We hope that you have seen our earnings release issued this morning. We have also posted a presentation in support of which can be found in the Investors section of our website at janusintl.com. Our remarks in the press release, presentation and on this call contain forward looking statements regarding the company's business, strategy, operations and financial performance. Please review the forward looking statements section in today's press release and in our SEC filings for various factors that could cause our actual results.

To differ materially from our forward looking statements and projections. The company expressly disclaims any obligation to update or revise publicly any forward looking statements whether as a result of new information, future events or otherwise. Additionally, non GAAP financial measures will be referenced in this call. A reconciliation of these measures to the most directly comparable GAAP financial measure can be found in our earnings press release and presentation. On today's call, Ramey will provide an overview of our business, Anselm will continue with a discussion of our financial results and 2026 guidance before Ramey shares some closing thoughts and we open up the call for your questions. At this point, I will turn the call over to Ramey.

Ramey Pierce Jackson: Thanks, Sara, and good morning, everyone. Thank you all for joining our call today. The first quarter reflected many of the same challenging macroeconomic dynamics we have discussed in recent quarters. Against this backdrop, our team remained focused on execution, safety, and customer service. While overall demand remained subdued, our results for the quarter were ahead of our expectations. We delivered total revenue of 222.7 million and adjusted EBITDA of $33 million for the quarter. From a financial standpoint, our liquidity position remains strong. Providing flexibility to manage through near term volatility while maintaining our strategic focus. Cash generation in the quarter supported continued balance sheet strength, and disciplined capital allocation.

During the first quarter, we repurchased approximately 2.9 million shares of common stock for a total of $15.7 million As of quarter end, we had 65 million remaining under our share repurchase authorization. Now I would like to spend some time discussing our strategic priorities and recent progress towards these initiatives. While our strategy remains consistent, we are introducing the acronym GROW to refer to these priorities. Greater penetration of self storage, ramping adoption of smart security solutions, outperforming in the commercial market, and winning through strategic accretive acquisitions. Beginning with greater penetration of self storage, our recent acquisition of Kiwi II construction announced earlier this year advances this priority by expanding our content self storage facilities.

Kiwi enhances our exterior solutions and design build capabilities. Particularly with institutional customers on the West Coast and in Florida. Early integration efforts are progressing as planned, We are encouraged by the initial collaboration opportunities between Kiwi, Betco and our Janus core business. Leveraging our unique R3 capabilities, another important lever in increasing our penetration of self storage. Ongoing consolidation within the self storage industry is creating meaningful opportunities for our R3 business. As larger operators acquire and integrate assets, they are increasingly focused on standardization upgrades, and operational efficiency. Areas where we believe Janus is uniquely positioned to serve as a long strategic partner. We continue to invest in and expand our R3 offerings to meet these needs.

To this end, during the quarter, we announced the release of Door-to-Door Replace, a mobile app designed to streamline self storage door replacement quotes, and orders. The Janus Door-to-Door Replace app was built for self storage owner operators who need fast, reliable way to request quotes and submit orders to replace damaged doors at their facilities. We also continue to be pleased with the performance of our international business as we expand our presence in the self storage industry on a global scale. Our focus on refining our product offering and go to market approach over the past several quarters continues to produce results. In the first quarter, international performance was supported by Nokē adoption and targeted project wins.

We remain focused on selectively expanding additional geographies with favorable market conditions. Next, ramping smart security solutions through our Nokē Smart Entry platform remains a central pillar of our long term growth strategy. At the end of the first quarter, we had 477 thousand total installed units, representing an increase of 24.2% year over year. Janus is the first mover in smart security and access control within self storage, and we continue to solidify our competitive advantage through customer led innovation. A recent example of this progress is the launch of Nokē Infinity, an on door dual technology smart locking system, which represents an important milestone in the Nokie product road map we are delivering this year.

Nokē Infinity combines Bluetooth technology with near field communication or NFC power harvesting. Allowing the lock to be securely accessed even after its 5-year battery life has exceeded. The dual technology meaningfully reduces operational risk and maintenance costs for owner operators. Designed with a slim on door profile, we expect Nokē Infinity to be available for factory install on both roll up and swing doors beginning in the third quarter. Importantly, we see Nokē Infinity as highly complementary to the hardwired Nokē Ion solution, and a meaningful step forward in driving adoption of smart entry solutions. Enabling customers to standardize on the Nokē platform across environments suited for both hardwired and wireless solutions.

As we advance the Nokē platform, we remain focused not just on unit growth and new product launches, but also on driving efficiencies and margin improvement as the business reaches scale. Nokē addresses real operational challenges faced by self storage owner operators by reducing labor requirements, and enhancing security through advanced access control and theft deterrents. As a result, we continue to be optimistic about the long term opportunity in this business and its potential to drive increased recurring revenue over time. The third priority of our growth strategy is increasing our share in the market for commercial doors. Our expanded distribution footprint and architectural specification efforts are gaining traction.

Resulting in strong performance in our rolling steel business this quarter and we are encouraged by the early success in segments such as data centers, where growth opportunities remain robust. Our final priority is disciplined M&A. Strategic acquisitions continue to be a core part of our strategy, as evidenced by our acquisition of Kiwi II Construction I spoke to earlier. While our M&A approach remains selective, our pipeline continues to be active. We are maintaining our focus on opportunities that expand our capabilities, enhance our solutions offering, and create long term shareholder value. As we look ahead, we will focus on what we can control. Execute with discipline, support our customers, and manage the business for long term.

While we expect many of the challenges in the operating environment we are facing will persist in the near term, we are confident Janus is well positioned for the future as the industry leader in self storage solutions. With strong operational capabilities and attractive adjacencies for expansion. With that, I will now turn the call over to Anselm to walk through a more detailed review of our financial results and discuss our reaffirmed 2026 guidance. Anselm?

Anselm Wong: Thank you, Ramey, and good morning, everyone. Ramey spoke to our strategy and results at a high level, and I will focus my remarks on our financial performance in the first quarter and our 2026 guidance. For the first quarter, consolidated revenue of $222.7 million increased 5.8% as compared to the prior year. Inorganic revenues for the quarter were $18.1 million reflecting contributions from acquisitions. New construction increased 10.9%, while R3 was up 5.3% for the quarter. The increase in revenues for new construction was driven by solid performance from our Kiwi acquisition and continued strength in our international business. Which offset continued softness in North America. On an organic basis, new construction revenues were down 9.9% year over year.

The increase in r 3 revenue was driven by increases in redevelopment and renovation activity and a normalization in conversion and expansion activity. In the first quarter, total revenues in our international segment increased to $27.3 million, up $6.1 million or 28.8% compared to the prior year. Driven by growth in new construction activity and market share gains. For the quarter, revenue in our commercial and other segment decreased by 0.5% The decline was primarily driven by continued softness in demand for commercial sheet doors partially offset by increases in rolling steel and freight terminal project activity. First quarter adjusted EBITDA of $33 million was down 14.1% compared to 2025.

This resulted in an adjusted EBITDA margin of 14.8%, a decrease of approximately 340 basis points from the prior year period. The decrease in margins year over year is primarily attributed to the impacts of geographic segment and sales channel mix. We remain focused on controlling our costs and continue to regularly evaluate opportunities to optimize operations and improve our efficiencies. We are seeing benefits from the consolidation of our 2 facilities in Houston earlier this year. For the first quarter, we produced adjusted net income of $1.7 million compared to adjusted net income of $17.7 million in the prior year period. Adjusted EPS for the quarter was $0.01.

We generated cash from operating activities of $36.2 million, free cash flow of $33.4 million in the quarter. On a trailing 12 month basis, this represents a free cash flow conversion of adjusted income 155%. Capital expenditures in the quarter were $2.8 million. We ended the quarter with $183.8 million in total liquidity including $112 million of cash and equivalents on the balance sheet. Our total outstanding long term debt at quarter end was $551 million and net leverage was 2.7x within our target range of 2x to 3x following our acquisition of Kiwi II Construction as expected. Our liquidity levels provided us flexibility as we deploy our capital.

As Ramey mentioned during the quarter, we repurchased approximately 2.9 million shares for a total of $15.7 million. We had $65 million remaining on our share repurchase authorization at quarter end. In February, we are pleased to announce a repricing of our first lien term loan, reducing our interest rate by 50 basis points from SOFR+250 to SOFR+200. Significantly lowering our cost of capital, enhancing our financial flexibility. Now moving to our 2026 guidance. We continue to expect full year revenue in the range of $940 million to $980 million. This includes approximately $90 million to $100 million inorganic growth from Kiwi II construction acquisition.

As a reminder, our guidance does not include any embedded assumptions of an improvement in market conditions. We continue to expect North America organic self storage revenues to be down mid-single digits compared to 2025, driven mostly by continued softness in new construction. In our commercial sales channel, we anticipate a return to growth in 2026 driven by our asset business. On the international side, we expect high single-digit revenue growth. 2026 adjusted EBITDA is expected to be in the range of $105 million to $185 million This reflects an adjusted EBITDA margin of 18.2% at the midpoint Consolidated EBITDA margin will continue to be impacted by both geographic segment and sales channel mix.

We expect that Kiwi II's EBITDA will be a drag in overall margins for 2026. Cash flow remains robust, and for 2026, we continue to anticipate being around the higher end of the free cash flow conversion of adjusted net income target range of 75% to 100%. Please refer to the presentation we have posted for details on the key planning assumptions for 2026. Thank you all for your time. I will now turn the call over to Ramey for his closing remarks. Ramey?

Ramey Pierce Jackson: Thank you, Anselm. Janus continues to hold a strong position in an attractive, resilient industry. We serve our customers across the full life cycle of their facilities. From design and build out to ongoing maintenance, modernization, and technology upgrades. And that end-to-end value proposition continues to differentiate us. Particularly in periods of economic uncertainty. Though new construction activity, particularly in North America, is likely to remain constrained this year. Self storage fundamentals continue to be supported by high occupancy rates, and rising household utilization trends. As housing market activity normalizes over time, we believe these trends will support increased demand for both new development and investment in existing facilities.

While operating conditions remain dynamic, we are focusing firmly on what we can control and are committed to achieving our reaffirmed 2026 guidance. We are executing with discipline, supporting our customers, optimizing our operations, and investing in areas of the business with the most durable demand, and long term opportunity. Supported by our strong balance sheet and consistent cash generation, I remain confident Janus is well equipped to build upon our industry leadership position. Expand into adjacent markets with attractive fundamentals, and deliver long term value for our shareholders. In closing, I wanna express my appreciation to our team, customers, and shareholders for your support. We thank you for your participation on today's call.

Operator, we would now like to open up the lines for Q and A, please.

Operator: Certainly. Please press 1 on your keypad. To leave the queue at any time, please press 2. We will take our first question from Jeffrey David Hammond with KeyBanc Capital Markets. Your line is open.

Analyst (David Tarantino): Hey, morning guys. This is David Tarantino on for Jeffrey.

Ramey Pierce Jackson: Hey, David.

Anselm Wong: Good morning.

Analyst (David Tarantino): Maybe starting with the demand trends, it sounds like both self storage and commercial are tracking in line with initial outlook. Correct me if I am wrong, but could you give some color around how the pipeline of opportunities has evolved to date? And how the underlying demand trends that you are seeing today compares to what you implied in the guide?

Ramey Pierce Jackson: Yes. Look, I do not-- yes, thanks for the question. I do not think there is been a lot of change quarter over quarter. Obviously, new construction demand in North America is impacted by interest rates liquidity, all the things we have been talking about, mobility around housing, and I do not see that changing until we get some reprieve on interest rates, quite frankly. You know, R3 is a bright spot for us. You know, we continue to perform well, obviously, with M&A and consolidation that is happening in the market that is driving revenue for us.

On the commercial side, you know, it is the commercial sheet door product line that is really been impacted, and that has everything to do with the metal building end market pre engineered metal building end market. The bright spot on the commercial side is our rolling steel door business again, which is Asta. You know, we have been talking about our initiatives around architectural specification, initiatives. In addition to growing market share, and that is that is certainly paying off. And is a green shoot for us on the commercial piece.

Analyst (David Tarantino): Great. that is helpful. And then maybe on the margins, could you just give us some color on price cost with around rising inputs? I know I recall, it typically shows through on a lag. So does this give you the opportunity to push more price, or how should we think about kind of the buckets of the margins going forward?

Anselm Wong: Yeah. You think about what happened in Q1 margin, we had always talked about the lag in terms of the backlog of price adjustments that we had done prior to just bleeding through into the quarter now. If you look at the steel trend, it is on its way up. As we had said last quarter. You would expect, you know, you know, commercial actions the other way going into the rest of the year. So I think I would say you probably have a little more commercial action adjustments in the back half, a little more price negative blending into this quarter, and then it goes back up the other end.

As a reminder, we our contracts allow us to adjust where we need to based on, you know, input cost changes.

Analyst (David Tarantino): Great. And maybe if I could sneak 1 more in. Could you just give some color on the tax rate and why was it so much higher in the first quarter and tracking higher 2026, and maybe what does the cash tax rate look like?

Anselm Wong: Sure. There was a lot of obviously, 1 timer adjustments in there due to the acquisition. As well as the refinancing that occurred. So if you look at the reconciliation that is included in the earnings materials, you will see that there is a, you know, approximately $2 million related to the debt refinancing. Obviously, way better rate going forward, so it is a benefit for us. But we have to take the charge for the prior cost. And then the other piece is the cost related to the acquisition. As you go through, obviously, great access. We are happy with Kiwi 2.

But, obviously, related to that, there is acquisition costs as well as compensation as we paid as you know, as we disclosed that we paid some of the purchase price and equity compensation so that drives some tax differentials for what is not as disallowed to the compensation. But I think those are the main items if you walk through that impacted the tax rate and, I will say, a few of them are 1-timers. Okay.

Analyst (David Tarantino): Great. Thanks. I will pass it along.

Operator: Thanks. Next question will come from Daniel Moore with CJS Securities. Your line is open.

Analyst: Yes. Good morning, Ramey. Good morning, Anselm. Thanks for taking the questions. Just maybe in terms of the cadence we just talked about price cost and how, you know, that may flow through. Guidance for the full year implies a little over 18% adjusted EBITDA margin midpoint, Q1 just below 15%. So just how do we think about the cadence in terms of either sequential improvement into H2 or split of EBITDA dollars between H1 and H2? You know, how we kind of think about that walk was with, you know, starting with Q2, I guess, Yes, sure.

Anselm Wong: Thanks for the question, Dan. So if you think about it, we always talked about as last quarter is that a step up every quarter. So Q1 Q2 will be better than Q1 a little better, probably a little less than the overall average for the year, and then back half, obviously, a higher than the average for the year to blend it to a year. And the reason for that is that we have always constantly looking at optimizing our footprint in terms cost. You saw the announcement in Houston.

So if you look at the timing of some of those cost savings, those actually blend up a bit a bit in Q2 and then obviously full savings in Q3 and Q4. So that is why you see a blend of it stepping up every quarter.

Analyst: Got it. And I know it is early days, but can you talk a little bit more about the whether it is cross selling or best practices between Kiwi, Betco, you know, how does the how's the integration going and maybe some early learnings from that acquisition?

Ramey Pierce Jackson: Look, we are really happy with the progress. I guess the collaboration between JanusCore and Betco and Kiwi you know, the focus you said is cross-selling. We have had some early wins on that front in terms of combining the door and hallway through the total building envelope. And, you know, in addition to that, Dan, the customer segment, the additional customers, that we now have visibility to and that are now on the Janus platform, we are super excited about where it is going and happy with, the integration efforts thus far.

Analyst: Got it. If I might sneak 1 more in, just talk a little bit about you know, obviously, the I guess, the second of your grow or, you know, ramp smart security solutions. Just talk a little bit more about how Infinity, you know, helps in that. How is it complementary to ION? And, you know, do you are you seeing more traction? You know, what kind of expectations for sequential growth? Maybe not for the next quarter, but over the next year or 2 relative to what we have seen in terms of adoption? Thanks again.

Anselm Wong: Sure. Thanks, Dan. it is a great question. And we are very excited about the new product launch we have for our Nokē business. If you look at the new product that we launched, it is an upgrade to the Nokē 1. So there is use cases where customers wanna install that is quicker for with a battery product as well as wireless. So that is what it does. The beauty of that product is that even if the battery, which we are seeing now will last about 5 years, even when that battery dies, it will still work with the NFC technology that we put in it. So you have got backup there.

So it is a beautiful product in terms of getting that use case where you want that quicker install, especially on retrofits. And then Nokē Ion further, you know, updates that product. Everyone's been happy with that product in terms of performance. As well as battery free when you can actually install it with a wire. And what it allows for is further use case, further sensors that we can add to the portfolio that we are getting a lot of requests for from customers. So very excited about the new platform obviously, helping drive, you know, sequential growth in that Nokē business. Yeah.

Ramey Pierce Jackson: I think Anselm covered it well. I just want to kind of point out you know, these you know, this road map that we will continue to launch throughout the year and next year, it is 100% innovated around voice of the customer. We are not guessing. We are not you know, in terms of what the industry needs. We are actually listening to our customers and investing in those, innovations to bring to market.

Analyst: Perfect. And then last housekeeping, just following up on the first question. Tax rate, what should we expect for kind of the balance of the year? Thanks.

Anselm Wong: Yeah. I think if you look at the guide, we put in the 29% to 31% for the full year, and again, obviously, it is a increase from last time, but it is a function of those items I just mentioned in terms of the impact of the rate in Q1. So I think you get a bit more normalized rate in the other quarters that blend to the average for the year. Got it.

Analyst: I missed that in the guidance table. Thank you again.

Operator: Our next question will come from Phil Ng with Jeff. Your line is open.

Analyst (Fiona): This is Fiona on for Phil. Just curious on the tariff side. I know you guys are probably more insulated with the tariff but how do you think about the changes to Section 301 tariff and how is that gonna impact your business relative to your competitors?

Anselm Wong: Sure. I think, as you know, obviously, most of the steel we purchase is domestic steel. So obviously, does not have an impact direct impact to the domestic steel. I think, obviously, if you go down deeper into the details of the regulation, it will impact the certain types of products made of steel. So I would expect that there will be some obviously, negative impact on some of our competitors, but I think you have to go into detail in terms of the specific item that is impacted.

Analyst (Fiona): Okay. that is helpful. And then inflation is picking up again. So we are curious about are you looking to pass through some of the higher cost through your surcharges or any mitigation actions you are thinking about for the rest of the year?

Anselm Wong: Yes. So definitely, absolutely, fuel is 1 of the top ones. We have already just like a lot of other industries, fuel surcharges to cover that piece. And then in terms of steel, actually, we track that on a daily basis and we have always said that we have the ability to adjust and there will be some commercial actions related to that trend of steel that is happening that you are seeing out there, and we are closely watching it whether or not, you know, we do more.

Analyst (Fiona): Okay. And maybe if I can just sneak in 1 last 1. Can you also talk about your mixed dynamics? I think in the quarter, it was a little bit of a headwind.

Anselm Wong: Yes. So if you look at the breakout when the Q comes out, obviously, had a very strong quarter again. They did have a bit lower margin compared to their ending trailing margin just because of customer mix and product mix. But I think that was kind of 1 of the big drivers that you saw in the quarter where a lot of our smaller BUs, which have lower margins compared to the Janus core, blended into the quarter that drove a lot of the mix negative mix impact in the quarter.

Analyst (Fiona): Okay. Thank you. Very helpful.

Operator: Our next question will come from Reuben Garner with The Benchmark Company. Your line is open.

Analyst (Joseph Gerard McGlade): Hey, good morning, everyone. This is Joseph Gerard McGlade on for Reuben.

Ramey Pierce Jackson: I appreciate you taking my questions. Morning, John.

Analyst (Joseph Gerard McGlade): I just wanted to start out, maybe we could follow-up on Nokia. It looks like you guys added about 20 thousand new units this quarter. I know the previous breakeven target was 500 thousand. Just, I guess, with the launch of the new Infinity platform, does that change your breakeven? And then you know, at this point getting closer, is there any estimates you are willing to share on really how much of a contribution hitting that breakeven milestone could be for the bottom line?

Anselm Wong: Yes. We have not disclosed that yet, but what I can tell you is we have got a couple of things that are happening. Obviously, the unit volume getting to that breakeven point but also AI is coming in and really helping us manage developing software costs. it is, you know, it is really impacting the team where we do not need as many engineers to do the equivalent work. So that is helping move that breakeven point lower. So I think we are excited about it, and we have all talked about getting to scale for that Nokē business. And these new products are gonna help drive the incremental growth to get there quicker.

Analyst (Joseph Gerard McGlade): Okay. That sounds great. I guess the 1 other question I have, obviously, international is doing well, and I know that there were some changes in the go to market strategies that you have implemented there over the past year or so. Could you maybe dive into how those have helped you gain share? And maybe what market specifically internationally you are seeing kind of outsized growth in?

Ramey Pierce Jackson: Yeah, good question. Look, we have been pretty consistent there. And laser focused on our strategy. What we are actually driving to is the Nokē Smart Entry offering is driving a lot of door and hallway opportunities. So we have been we have been super happy with that on the execution piece. Also looking in countries that have more of a robust development pipeline, which would be Germany and Spain. To answer a couple of them. So just really proud of the team, the management, the execution across the board, and see a lot of, you know, continued tailwinds on the international side of it.

But, you know, like I said, I just kind of want to highlight Nokē Smart Entry is really driving adoption in a meaningful way and is making-- is influencing owners and operators in terms of their door and hallway selection.

Analyst (Joseph Gerard McGlade): Alright. Thank you. That was helpful. I appreciate you taking my questions, and good luck in the quarter ahead.

Ramey Pierce Jackson: Thank you. Thank you.

Operator: Our next question will come from John Lovallo with UBS.

Analyst (Matt Johnson): Hey. Good morning, guys. You have Matt Johnson on for John. Appreciate the time here. I first off, if we could just put a finer point on it. I think there is obviously a few moving pieces. But at the midpoint of the full year outlook, you guys are talking about EBITDA margin of about 18.2%, which would be down about 80 basis points year over year. I guess just any thoughts you could give on how much of that you see coming from gross margin versus SG and A? And then if you guys expect Q1 to be kind of the low point of the year on gross margin specifically.

Anselm Wong: Yeah. 1Q is the low point. Like we said, every quarter, it will sequentially move up. Until, obviously, a big quarter in Q3, and then usually we have a low a little seasonality that Adjusts for Q4. I think if you look at it, we do not disclose kind of the split, but if you think about it, a lot of the restructuring actions, least that we have announced, will have a blend of hitting into the cost of goods sold as well as SG&A.

Analyst (Matt Johnson): that is great. And then just on capital allocation, I think you guys bought back about $16 million of stock in the quarter, which was encouraging. Stock's been under a bit of pressure here recently. Guess, how attractive do you think repurchases are at these levels? And I guess with net leverage, I think it is at 2.7x, which is kind of approaching the higher end of your target range. I guess, how comfortable are you repurchasing more stock moving forward at the risk of, you know, your net leverage potentially moving a bit higher from here?

Anselm Wong: Yeah. I think the first of all, I think you are right. I think it is you know, we have got a lot back in Q1. We think it is, you know, it was undervalued then. We think it is undervalued now. I think with the cash generation that we show that we do consistently deliver, provides us the flexibility to continue kind of purchasing more shares and, honestly, at the current price even more attractive.

Ramey Pierce Jackson: Thanks, guys. Thank you.

Operator: And we do have a follow-up question from Jeffrey David Hammond with KeyBanc Capital Markets. Your line is open.

Analyst (David Tarantino): Hey, guys. it is David following up. I Could you just give us some more color on what is embedded in the guide from a cadence perspective? How do we expect Q2 to shape up? And any general framework for the back half on both the top and margin lines?

Anselm Wong: Yes. We do not provide specific guidance, but I think the way to think about it is just sequentially moving up for revenues or sequentially for EBITDA, and that is what you would expect to do to hit the full year guide. And like I said earlier, obviously, second half larger than the first half in terms of EBITDA to get to the overall rate that we have in our guide.

Analyst (David Tarantino): Okay. Great. And maybe following up on r 3, could you just expand on the pipeline opportunities here a little bit more just particularly following some large M&A deals from the operators? Are you seeing any of that yet? Or is how much of it is embedded in the guide today? Any color there would be helpful.

Ramey Pierce Jackson: Yeah. Look, I am not going to comment on the specific 1. They are public. A public company. But what I can tell you is we are we are pleased with the r 3 pipeline and backlog and also the performance. You know, we have been very clear in terms of the market dynamics around consolidation. it is happening. It continues to accelerate. And we are in a really good spot to take advantage of that market trend. So, super excited about the opportunity.

Analyst (David Tarantino): Okay. Great. Thanks, guys.

Ramey Pierce Jackson: Thank you.

Operator: And it appears we have no further questions at this time. Turn the program back to the speakers for any additional or closing remarks.

Ramey Pierce Jackson: Okay. Thank you all for joining us today. We appreciate your support of Janus, and we look forward to updating you on our progress. Have a great day.

Operator: This concludes today's program. Thank you for your participation, and you may disconnect at any time.