Good morning, and welcome to the Serve Robotics Inc. fourth quarter and full year 2025 financial results conference call. I am France, and I will be the operator assisting you today. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star-1 on your telephone keypad. If you would like to withdraw your question, please press star-1 again. Thank you. I would now like to turn the call over to Steve Webb. Please go ahead.

Thank you, operator, and good afternoon, everyone. I am Steve Webb, Serve Robotics Inc.’s SVP of Marketing and Communications. Welcome to Serve Robotics Inc.’s fourth quarter and full year 2025 earnings call. With me today are Serve Robotics Inc.’s Co-Founder and CEO, Ali Kashani, and our CFO, Brian Read. During today's call, we may present both GAAP and non-GAAP financial measures. If needed, a reconciliation of GAAP to non-GAAP measures can be found in our earnings release filed earlier today. Certain statements in this call are forward-looking statements. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements. We do not undertake any obligation to update any forward-looking statements we make today, except as required by law. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as the risks and uncertainties described in our most recent Annual Report on Form 10-K and in other filings made with the SEC. We published our quarterly financial press release and our updated corporate presentation to our Investor Relations website earlier this morning, and we ask you to review those documents if you have not already. With that, let me hand it over to Ali.

Thanks, Steve. Morning, everyone, and thank you all for joining us. A year ago, we told you that we would deploy 2,000 autonomous robots across the country by the end of 2025, that we would expand from a single city to a truly national footprint, and would prove that this technology works, not just in a lab or a closed campus, but on open sidewalks in dense cities, navigating the full complex of urban life. We did all of that and then some. Today, a fleet of 2,000 Serve Robotics Inc. robots have been activated across 20 distinct cities in six major metropolitan areas, from Los Angeles all the way to the Washington, D.C., corridor. We launched Atlanta, Dallas, Chicago, and Miami. We expanded aggressively in every existing market. We also added DoorDash alongside Uber Eats. This gives us access to over 80% of the U.S. food delivery market. We also completed four strategic acquisitions since early 2025, met or exceeded our revenue guidance every single quarter, and through all of it, we maintained a 99.8% delivery completion rate and a proud safety record. So let me say it again: 20 times the fleet, national scale, four acquisitions, and near-perfect reliability. And in Q4, we once again delivered revenue above guidance as we drove 400% year-over-year growth in the quarter. This is not incremental progress. This is a company that is defining a category in real time. But before I get into the quarter, let us look at the broader trends. We are living through one of the most consequential technology transitions of our lifetime. For the past few years, the world has marveled at what AI can do with words and images and code. The next frontier—the one that will reshape our physical world—is physical AI, machines that can…

Thank you, Ali. Good morning, everyone. Entering 2025, we set explicit operating targets around fleet expansion, revenue growth, and geographic scale, and we delivered against each one of them. More importantly, we strengthened the economic foundation of our business while doing so. That operating discipline will continue to define Serve Robotics Inc. into 2026. I will walk through the details. Total revenue for Q4 2025 increased over 400% year over year to $900,000. Full-year 2025 revenue was $2,700,000, exceeding our guidance of $2,500,000 and representing growth of 46% over the prior year. Fleet revenue was $700,000 for the quarter, growing 50% sequentially. Branding saw record bookings during the quarter as our expanded fleet attracted larger advertising commitments. We also recorded our first revenues related to data monetization in the quarter, an early signal of the data and platform opportunity ahead. As Ali and I have mentioned, these opportunities will continue to evolve through 2026. Software revenues were over $200,000 in the quarter. Our transition to recurring software revenue continues to progress, with our recurring software base now representing approximately 70% of software revenues. More broadly than software, we noticed the shift in revenue quality during the year. Our underlying recurring revenues, defined as revenue excluding one-time agreements, grew over 3x during the year. That shift increases revenue visibility while reducing volatility as we scale. Beneath the top line, Q4 margins reflect the largest single-quarter deployment in our history, with nearly 1,000 new robots. When deployments occur at this scale, newly introduced cohorts initially operate below steady-state efficiency. That is expected and by design. What matters is the trajectory as that fleet matures. This past year, we observed average daily operating hours per robot climb 56% to over 12 hours compared to Q4 last year. Cost per delivery trended down quarter…

Thank you, Ali and Brian. We will now move into the Q&A session. But first, I would like to say a big thank you to all the investors and analysts who submitted questions via email. Thank you so much for your engagement. The first question we have is related to new robots. Serve Robotics Inc. deployed 2,000 robots last year. What is the goal from a unit deployment perspective in 2026 and beyond that?

Thank you. I am happy to take this one. So over the next few years, we expect to deploy thousands more robots. But in the short term, as we have shared in the past, before we go on and share a detailed plan, we want to really let the recent growth settle in, and we want to gather all the data and learnings from last year’s 20x fleet growth. We have the capacity to continue growing our revenue right now. On the other hand, manufacturing and supply chain, as we all know, require certain lead time. So we are already working on the supply chain for the next batch of robots, so that we can expand to new major markets as they become available quickly. But the time between now and when the supply chain and manufacturing of the robots would be available is a good time for us to really hone in on our playbooks and get them refined based on the existing growth. And we do not really want to be deploying more robots until we get all the current ones fully activated on a daily basis.

Yes, if I can wrap up on that, Ali. In the prepared remarks, we talked about CapEx guidance being approximately $25,000,000 during 2026. A significant majority of that will be for the Serve Robotics Inc. fleet expansion. But we are going to continue to invest not only in Serve Robotics Inc. but for additional Moxie robots and look to accelerate their growth as well. I think, Ali, exactly as you summed up, in this time period—Q1 2026—we are looking to optimize the performance of the full fleet. And most importantly, we retain control over that CapEx timing and also the OpEx deployment costs as that fleet continues to grow.

Great. Thanks, Brian. On to our next question. What percentage of the 2,000 deployed robots should be daily active by the end of first quarter?

I am happy to take this one as well. So from manufacturing and deploying robots to reaching full utilization of the fleet, as we have discussed in the past, there are several steps that take place. You start with, obviously, creating the depots in each new market, building the operational footprint, which includes hiring and training staff. So this is a lot of the work we have already done. And then the next step after that is getting any requirements by local municipalities, any stage gates, all of that addressed. We need to then activate neighborhoods with our delivery partners, onboard local merchants, and then once all of that is done, we can have robots at full operational hours every day. We would focus on operational efficiency—it is a question of where to put the robots, how to move them around, all of that—so that we capture the maximum demand. So we expect that by the middle of this year, as I said before, before we manufacture any additional robots, we would get all of the existing robots on a fully active daily basis and shift our focus to that operational optimization. We are timing everything again so that we have that full utilization, the full activation of these robots, before manufacturing new ones, given the lead times for manufacturing.

Ali. On to the next question. We received this one about the acquisition of Diligent Robotics. How are the integration efforts going, and what are your plans for growing the healthcare business?

That is a great question. So we covered some of this earlier, but I can dig in a bit more. We have always intended for our autonomy platform to extend beyond just food delivery and into many other environments, including, in this case, hospital and healthcare. As we looked at Diligent Robotics during our acquisition process, it became pretty clear very quickly that it is the right time and right company for us to expand our scope. So this acquisition actually strengthens our flywheel, as I mentioned earlier, by really enriching our data further. It also creates a more balanced and resilient revenue base for us, and it opens up, obviously, new market opportunities and a new growth engine. We are already starting to integrate our platform capabilities with Moxie robots, but this will take some time. As we do this integration work, we are creating a repeatable playbook for expanding into new verticals and operating in multiple domains.

On the second part of that question for the revenue, and just to give a little bit more color, these are existing, established recurring revenue contracts that we were able to acquire through Diligent. And so these are different than our demand cycle for current food delivery. The $7,000,000 number we referenced in the prepared remarks is for revenue here in 2026. And I think it is important, from an integration standpoint, we are going to continue to focus on additional investments into the healthcare business around engineering headcount and infrastructure to support that team through their next phase of growth. Our business development team and sales teams are looking at other opportunities in the pipeline. Several of those are currently being evaluated, and we are going to make the best decisions to drive long-term revenue growth.

Great.

On to the next question. Is optimization of the fleet a linear process, or are there step functions? And if so, what would cause that?

Yes. You know, we touched on the steps earlier. Of course, we are pushing a lot of these steps at the same time, but you are never going to get everything done at the same time. I think going from that deployment to full, full utilization steps are pretty important. There are many factors that affect that utilization, and those steps kind of outline, as I said, as I mentioned earlier. Overall, though, we are seeing that our more mature markets are further along on that optimization curve. We mentioned this earlier: 2026 is really about compounding returns for us. 2025 was all about building that infrastructure. So in 2026, we are going to be really laser-focused on optimization and efficiency of the fleet, both on the sidewalk and in the hospitals.

And we have enough time for one more question. Can you speak more about your plans to expand internationally? What is the time frame for those city launches?

Yes. That is an exciting one to end on. Let me maybe give some context on our thinking here. So we have really built a great foundation for expansion. We are now in 20 cities, six major metros. We have really proven the tech at scale, built the operational playbook, a way to launch new markets efficiently. So this work really supports that international expansion well. We are now in active discussions with city officials and partners in multiple international markets, from Canada to Australia, Japan, Spain, and many other countries. We are considering major cities, dense urban environments, strong delivery markets, and municipal governments that are really leaning into autonomous robots on sidewalks. I want to emphasize that we are going to be disciplined and intentional about these expansions, especially weighing our growth opportunities here in the U.S. versus markets abroad. We have learned from our U.S. expansions to date that the right way to go to a new market is methodical, and we want to really be measured as we identify the right partners and the right expansion cities. We do get a ton of inbound interest to consider, but we want to be very selective. And we see this ultimate growth opportunity internationally as a 2027 opportunity, but 2026 is for us to lay the groundwork for it, just as we laid the groundwork for this year last year by expanding to new cities. In the meantime, our robots obviously will continue and collect more data in more than 20 cities today and expanding by the end of the year, and we will keep making that flywheel move faster and become more durable so that we can enable even further rapid growth and expansion. I will just end by saying this again. I have never been more energized and excited about what is ahead for Serve Robotics Inc., and I cannot wait to see Serve Robotics Inc. robots operating in cities across the globe.

Great. Thanks, Ali, and thanks, Brian. That is all the time we have for today. I would like to thank everyone for joining us again. Thank you for joining us on the call today.

Ladies and gentlemen, thank you all for joining, and that concludes today’s conference call. All participants may now disconnect.