What you need to know: • BQE reported annual financials yesterday that were ahead of our estimates on revenue, gross margin, and net income; however, EBITDA came in below our expectations. • 2025 prop. revenue came in at $39.9M (+61% YoY) compared to our estimate of $38.0M and adjusted EBITDA was $8.2M (21% margin, +47% YoY) vs. our expected $9.4M. • BQE provided a strong outlook for both major segments of the business. Yesterday, after market close, BQE Water (BQE:TSXV, BTQNF:OTCPK) reported Q4 and 2025 financial results that came in ahead of our estimates on revenue and gross margin, with EBITDA finishing below our expectations. 2025 represented a landmark year for BQE, and we remind readers that the Company has been signing contracts at a record pace, with four new agreements signed since December. BQE remains one of the highest-quality growth stories in our coverage, and we believe that the successful 2025 speaks to the management team’s ability. We are maintaining our BUY rating and increasing our target price to $108.00/share (previously $90.00/share) on BQE. Key Highlights • 2025 prop. revenue was $39.9M (+61% YoY) vs. our $38.0M, comprising of operations services revenue of $7.3M (-30% YoY, 18% of revenue), technical services revenue of $28.3M (+322% YoY), and BQE’s share of JV revenue of $4.4M (-42% YoY). Q4 prop. revenue came in at $8.4M (+46% YoY) vs. our estimate of $6.5M. • Gross margin for 2025 came in at 43% vs. our estimate of 41%, and 49% in 2024. Gross margin for the quarter was 49% vs. our expectation of 41%. The decline YoY was due to the emergence of the technical services segment, which is lower margin. • Full-year adjusted EBITDA came in at $8.2M vs. our $9.4M, representing a 21% EBITDA margin and +47% YoY growth. Adjusted EBITDA in Q4 was $0.5M vs. our estimate of $1.7M and breakeven in Q4/24. The miss was due to increasing sales & development costs, which were up 114% YoY. • BQE’s share of JV net income was $4.4M for 2025 and $0.9M for Q4. • 2025 net income was $8.1M (+68% YoY) or $6.23/share compared to our $7.5M or $5.81/share and $4.8M or $3.78/share in 2024. Q4 net income was $1.6M vs. our $1.1M. The beat was largely due to a $1.6M tax recovery for the year. FCFF came in at $2.0M in Q4 and $4.9M for 2025. • BQE ended the quarter with $19.0M in cash and $2.7M in debt (leases and interest free loans).