NASDAQ: GRRR
Brian Lantier: Good morning. My name is Brian Lantier. I'm a senior research analyst with Zacks Small Cap Research, and thank you for joining us for another one of our CEO Chats. Today I'm thrilled to be joined by Jay Chandan, the CEO and Chairman at Gorilla Technology (NASDAQ: GRRR). Gorilla Technology, for those that don't know, is an AI security-powered analytics firm, and they're rapidly expanding into the AI infrastructure and data center markets, which is probably going to be the focus of most of our conversation today. Shares of Gorilla currently trade at about $14 a share, and I have what I feel is a fairly conservative target of $24 on the shares currently. Welcome, Jay, and thank you for joining us.
Jay Chandan: Brian, thank you for having me. $24 is way too conservative! [laughs]
BL: [laughs] That's a good thing for us to talk about. As I alluded to in the opening, you're in the midst of this meaningful transformation to focus on AI infrastructure, though you did just announce a nice little contract last week in the AI security market, which maybe you could touch on. Can you walk investors who are new to the story through the business as you see it today, and what drove the decision to really focus on the AI infrastructure market going forward?
JC: Absolutely, Brian. Once again, thank you for having me. For those who don't know Gorilla, we started out as an edge AI specialist: video analytics, big data, data intelligence, post-event analytics. We kind of morphed into cybersecurity, video, smart city technologies, and so on and so forth. But what most people don't realize is that as we started working in smart city technologies over the last 14 years, we've built a whole bunch of data centers for sovereigns. As you know, 98% to 99% of our customers are government customers across the world, ranging all the way from the US to Japan.
Now, the foundation remains as is. We're building more infrastructure underneath. Whether it's AI compute, whether it's GPU as a service, whether it's sovereign AI, or whether it's data centers, we have not abandoned our software, Brian. We are simply making it a little more what I call niche, rather than becoming more of what comes underneath it.
Now, as I think people have seen the growth story of Gorilla, we've gone from being a $22 million company to $74 million, give or take, in 2024. In 2025, we hit about $101 million. This year we're about to be $200 million. Next year, we've got a big challenge ahead of us, and we're anticipating to actually better that challenge. The commercial scale has actually increased quite significantly as well. Our contracts have gotten bigger. A contract with Yotta in India is about $3+ billion, and a contract in Indonesia is about $2.5 billion. These are all multiyear programs. I think most people have forgotten that in the first interview I did after we went public, I said I wanted to take this from a project-based business to a long-term, predictable revenue business. And today, lo and behold, I can tell you more than 90% of our business is long-term, predictable revenue.
Now, we touched upon the contracts which we recently signed, and that goes back to our foundation. We haven't abandoned our foundation. We recently won the extension of a 5G lawful interception contract with the largest criminal investigation bureau in Taiwan. That covers all of the networks across the region, and we'll be providing more insights into that over the next few weeks and months as we evolve into the project as well.
The strategic logic for us is to participate across all of the AI infrastructure layers, whether it's compute, software, integrated services, or just building the entire infrastructure for the customer, rather than just selling one layer today. Think about it this way: our business is growing larger because of the infrastructure we're building, but we're not discarding where we are.
BL: That's a great way to frame the discussion around Gorilla, because I think there is still some confusion in the marketplace. A couple of the major projects that we've talked about in the past, obviously Yotta, which you mentioned, and NeutraDC, are the ones that are really going to drive a lot of the growth in the next couple of years. Could you give us an update on where you stand with those contracts and what you see the next major milestones being?
JC: Absolutely, Brian. On the Yotta 1 project, which is in Navi Mumbai, surprise, surprise, we've actually started delivering, and we are now testing and installing our GPUs in Mumbai. This is well ahead of schedule. This is about 5,120 GPUs that need to be delivered, and I think all of the delivery should be done by the second week of October. Testing has commenced, equipment deliveries are well underway, and more importantly, deployment has commenced. That's number one.
On the Yotta 2 project, we have 20,736 NVIDIA B300 GPUs. That is the broader procurement arrangement we have had with Supermicro. What is also very important is that Supermicro has already started manufacturing all of those. The first delivery should be coming between the 15th and the 20th of October, and there are no delays there. In fact, we're anticipating them to be earlier. As committed to our friends at NVIDIA, we have to deliver and deploy all of them by the end of November, and this was part of our earnings release as well.
On the Indonesia side, we have to deliver the first 300 servers by the end of November and the rest of them in the first quarter of next year. We're going to complete all of the deployment by January of next year, so we're also ahead of schedule there. Now, think about it this way: these are the two projects which have about $5.5 billion of announced revenue value, but the conversion depends on delivery, site readiness, commissioning, acceptance, utilization, and billing. Most importantly, it's not about what I call a lovely press release going forward. It's about getting installed and getting paid.
BL: It sounds like it's going to be a very busy time over the next four to six weeks for you. One of the questions that comes up frequently when we talk about not just Gorilla, but anyone in this space, is financing and how you're going to finance these significant projects. I think your approach is unique, so maybe you could talk about how your financing strategy differs from some of the other approaches in the market.
JC: Absolutely, Brian. We're very unique, and I think we pride ourselves on that. We're a bunch of tech geeks, or tech guys as we call ourselves, with a whole lot of financing background. I don't know if most people realize, but I've invested in more than 500 companies in my lifetime, and that's in the last 15 or 16 years. What is unique is that we use corporate capital to unlock the projects, but at the same time, we also bring asset-level financing and support scale. Let me expand on that.
We raised about $232 million from June to July in bond financing, which the market obviously did not understand. But at the same time, we also received a whole bunch of net cash from our customers, which allowed us to be a little more fluid and liquid. Fast forward, come June, we had more than $299.5 million of cash. We deployed more than $270 million of that into advance payments for Yotta 1, Yotta 2, and the Batam project as well.
Now, this is where it gets interesting. We have to fund another $1.5 billion to $1.6 billion. We're doing what is called vendor financing. We're currently looking at bonds, and we're looking at funding through Gorilla Technology Capital. I think a lot of people have discounted that. They don't understand what we're trying to do there. What we're trying to do with Gorilla Technology Capital is go after long-term, patient capital, which effectively means that we'll be looking at raising between $2 billion and $3 billion over the next 12 to 18 months. The team is already deeply involved in setting up the structures in Singapore, because we're going to be headquartering these structures in Singapore, whether it's a QDS system or a VCC system.
Once we have received the capital, we'll be deploying it to close all of our deployments in Indonesia and India, and then we will go to the next round of fundraising for our Korat project, which is in Thailand. We are very excited about that as well, because that will give rise to roughly another $20 billion to $25 billion of revenue, which we're going after right now.
The test for us should be: can we generate more sustainable shareholder value without diluting the shareholders? Can we be better at the financing costs? Yes, of course we can. We've just gone through a credit rating with Fitch, and I think you've seen that we've received a B- with a positive outlook. We're now going through ratings at the project level as well, which will probably be much higher than where we are. We're excited about this, and we're looking at multiple agencies to potentially rate us as we go through this journey. We believe that a GPU will not just produce money the day it is deployed. It takes time. We have to manage the financing costs and make sure that we're able to balance the risk.
BL: That's really exciting to hear from you directly how that financing is going to come together, because it is going to be a challenge for sure. But your background and experience there are definitely going to play a big role in ensuring that the market recognizes that. You and CFO Bruce Bower have talked a lot about the inflection coming in your gross margin as the infrastructure business becomes a more significant part of your overall business. When do you think that margin inflection is going to start showing up meaningfully in your results?
JC: That's a great question, Brian. H1 2026 was kind of the turning point, where we had to deploy a lot more assets than we needed. As you've seen, we've hired a whole bunch of new people. We've gone from 250 full-time employees to now 500+ employees, including contractors and so on. We're going to go up to a thousand people by the middle of next year, so there's a lot of investment happening.
Now, the explanation for the market is that you have to look at what is called the revenue mix. It's the hardware, the initial deployment, the project mobilization, and so on and so forth. These activities establish what is called an installed base. These initially have a lower margin, and as the GPUs come to life, the recurring compute, monitoring, and managed services pieces kick in. As we go through that, customers start deploying, and we are looking at 99.5% delivery. Once we've done that, the higher-margin revenue will follow as the equipment is commissioned and accepted and the customers start using it. If I was sitting with a GPU crate without plugging it in, I'd be looking at very expensive furniture, right?
If you look at where we are today and where the inflection point is, it will be toward the latter part of H2 2026, and then it will pick up and start going into steady state in the first, second, and third quarters of 2027. Now, the indicators to watch at that point will be: What is the total commissioned capacity? What are the customer workloads? And more importantly, what does utilization look like? I don't want any utilization less than 99.5%, so I would make sure that we are delivering to the fullest extent of our capability and at the behest of the customer.
BL: That's well said. I appreciate that. I think it's a good goal. It's an ambitious target to have, but I think most people that know you know that you're going to set pretty ambitious goals and targets.
JC: We try.
BL: This is a unique opportunity for our investors, and for me personally, to talk directly to a management team, and that is really the reason why we host these chats. Could you talk about your strategic vision and where you see the company heading? Right now, you're building AI infrastructure to be owned and also infrastructure for others. What is the mix that you foresee out three to five years for the business, and will you be tweaking it as the market demands?
JC: Brian, our vision is big. It's really bold. The value proposition is not just having a simple operating platform. It's not just having what I call a collection of equipment and invoices. For us, the most important thing, and we talked about it a couple of weeks ago, is execution, execution, execution. Delivery matters, customer acceptance matters, utilization will matter, and cash collection will matter. As we evolve as a business, we're seeing our evolution in the shape of larger AI infrastructure programs.
I'm just going to step back. We talked about the 5G lawful interception program previously. That is infrastructure which we are building for the customer. We intend to participate in the entire infrastructure lifecycle, whether it's development, assets, compute, recurring software, or building all the services around them.
Now, one of the things I would like to highlight is that we've actually procured our own land with about 218 megawatts of facility, so you're looking at roughly 200+ megawatts. We've just about selected our partner who's going to help us build that data center. We're looking at about 12 to 18 months to close all of the 200 megawatts of build capacity. We're also going to be bringing in a whole bunch of institutional capital. As I mentioned, we're looking at about $2 billion to $3 billion raised by Gorilla Technology Capital. We'll be going to the bond market, and we'll be going through further rounds of project financing and so on.
So, what is our inflection point, especially from the business perspective? We talked about the profitability perspective. I want to make sure that we are moving from the 20 megawatts we have signed in Indonesia to a 200-megawatt campus in Thailand, and we're about to take on another 400 megawatts as we speak. I can let the market compute what those revenues could look like. But if you're looking at standard B300, GB300, and potentially the next generation of Vera Rubin, or working very closely with the likes of Cerebras or AMD Helios, we're looking at anything between $55 billion and $75 billion of revenue, right? I'm not saying that I'm targeting that as a number. I don't want the market to say, "My God, he gave me these big numbers, and he's going to go after it." But that's an ambition. You talked about big ambition.
We've already signed up, as you've seen, 20 megawatts and 200 megawatts, and we're about to close 400 megawatts. We're going to continue building all of this between the end of 2026, 2027, and 2028. Our approach is phased development, making sure that we fulfill our customer commitments and not just announcing capacity. We're announcing capacity with the financing already in place.
BL: That's an important part in this press release-driven world. Having the follow-up behind that is definitely what investors are looking for. If we have another one of these conversations in 12 to 18 months, what sort of milestones would you be pointing to and say, "We've actually delivered on what we said we were going to when we had the conversation in 2026"?
JC: First of all, I think people should look at it and say, "These guys said $137 million to $200 million, and they've actually gone to the higher end of it, which is $200 million by the end of this year." For 2027, we're planning anything between $450 million and $500 million. We made that very clear to the market. Compare a company that was about $22 million two and a half years ago going up to about $500 million. That's a decent jump in terms of revenue.
If you look at where we are today, that equates to an average quarterly revenue of roughly $110 million to $127 million, compared to $50 million in Q2 2026. It's not a target alone, and it's not a statement. It is revenue contracted. This is a very important term, which I will use over and over again.
The first milestone I am focused on is substantially delivering all the capacity we have contracted and commissioned. Number two is making sure that our customers are accepting all of that capacity and migrating all of their workloads. And the most important, third, is rising utilization, so that we can convert that into recurring cash and, more importantly, profitability.
I want investors to judge us on how we're delivering the equipment, when we're delivering the equipment, whether we're on time, capacity accepted by these customers, revenue recognized over the next 12 months, margins, which we talked about briefly, and more importantly, how much cash we're generating. One thing I can guarantee you: every quarter going forward from Q2 or Q3 of next year, we'll be generating cash hand over fist. That's the plan. We've always been very focused on cash generation. I think those will be the announcements the market needs to be focusing on.
BL: That's a perfect thing to circle back to in 12 to 18 months. We'll have a conversation about where you stand with cash generation. I think that's a great note to end on. Jay, thank you again for walking us through this very compelling story. There aren't a lot of small-cap companies that we cover that are looking at the growth rates that you're targeting, so this is a very exciting story. I would encourage all of our investors to take some time and read the research. You can find it on our website, scr.zacks.com, or reach out to me directly. Jay, again, thank you so much for spending some time with us. I really appreciate it.
JC: Brian, it's an absolute pleasure. Thank you very much for having me.
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