Executive Summary / Key Takeaways

• Gorilla Technology Group has undergone a profound transformation, evolving into a global leader in AI-driven national infrastructure and cybersecurity solutions, culminating in a landmark US$1.4 billion contract with Freyr Singapore that significantly enhances its revenue visibility and market position.
• The company has demonstrated a robust financial turnaround, achieving its first profitable full year since de-SPAC in 2023 and projecting strong revenue growth to US$100-US$110 million in 2025 with 20-25% EBITDA margins, underpinned by a substantial backlog of confirmed contracts.
• Gorilla's core technological differentiation lies in its proprietary Edge AI and Security Convergence platforms, offering real-time, on-site processing capabilities and integrated physical-cyber defenses crucial for critical infrastructure and smart city deployments, providing a distinct advantage over traditional cloud-centric solutions.
• A strategic shift towards multi-year, recurring revenue contracts and a disciplined funding approach prioritizing project-level and debt financing aims to de-risk the business model and ensure sustainable, capital-efficient growth.
• While navigating inherent execution complexities in large-scale government projects and competitive pressures from larger technology players, Gorilla's specialized regional expertise, innovative technology, and strategic partnerships position it for continued market leadership in high-growth AI and IoT sectors.

The Dawn of a New Era: Gorilla's AI Vision in a Connected World

Gorilla Technology Group Inc. is rapidly establishing itself as a pivotal force in the burgeoning global market for AI-driven security, network, business intelligence, and Internet of Things (IoT) technology. The company's overarching strategy centers on delivering an "ecosystem or a platform-as-a-service" for critical sectors such as smart cities, smart energy, smart transportation, smart retail, and safe cities, with a core focus on data intelligence, video intelligence, and security convergence. This strategic positioning aligns with powerful macroeconomic tailwinds; the global smart cities market, valued at over US$1 trillion in 2021, is projected to surge to between US$7 trillion and US$11 trillion by 2030, representing a compound annual growth rate (CAGR) exceeding 20%. Similarly, the Southeast Asian data center market is expected to exceed US$12 billion to US$15 billion, while the global video analytics and AI cybersecurity markets are projected to see CAGRs in the 20-25% range over the next decade. These trends underscore a massive and growing demand for the integrated solutions Gorilla provides.

At the heart of Gorilla's foundational strength lies its proprietary AI algorithms and IoT infrastructure, which enable real-time threat detection, predictive maintenance, and data-driven decision-making. The company's technological differentiation is particularly pronounced in its Edge AI capabilities. As CTO Raj Natarajan articulated, Gorilla's AI "actually works where it matters," focusing on "real world impact" in environments where traditional, cloud-dependent AI solutions fall short, such as "on the edge in smart cities and in secure and often offline deployments". This Edge AI is purpose-built to run on constrained hardware, performing real-time processing where latency is critical, whether on a camera pole, a field router, or a rugged factory device. This optimization for the edge, rather than the cloud, provides a significant advantage in public safety, transportation, and critical infrastructure, where immediate response is paramount.

Complementing its Edge AI, Gorilla's Security Convergence platform merges physical security systems, such as cameras and sensors, with cyber defenses, addressing a critical need as cities and enterprises digitize. A prime example is the Air Gap Network project for the Egyptian government, designed to provide "complete isolation between two networks so that there can be no malicious actors across the region". This integrated approach ensures enhanced precision, adaptability, and operational efficiency, leading to faster innovation cycles in specific verticals. Furthermore, Gorilla is actively investing in R&D, including its Intelligent Network Director (SD-WAN) product, co-engineering solutions with NVIDIA (NVDA), and evaluating the deployment of its own low-orbit satellite constellation for the ONE AMAZON project, aiming to provide "sovereign environmental intelligence" and control over its data economy. These technological advancements contribute directly to Gorilla's competitive moat, enabling potentially higher average selling prices, lower operational costs, better margins, and a strong market position for long-term growth.

A Journey of Transformation and Strategic Expansion

Gorilla Technology Group's current standing is the culmination of a deliberate and successful transformation initiated in 2022. Initially characterized as a regional player with a complicated capital structure and commercially constrained, the company embarked on a strategic pivot in 2023. This year marked a significant shift, as Gorilla "doubled down on its global expansion, cleaned up the business, rebuilt the leadership team, stabilized operations, and began unlocking national level opportunities". This strategic reorientation yielded remarkable financial results, with revenue surging by 189% to US$64.7 million, marking the company's first profitable full year since its de-SPAC, achieving a net profit of US$19.9 million and adjusted EBITDA of US$29 million. Key operational milestones included establishing an operational hub in Cairo, Egypt, for MENA region expansion, forging a partnership with Protactics in Colombia for advanced security and smart city solutions, and integrating video management systems in a prestigious hospital in Thailand. The company also began evolving its product strategy from pure software to developing purpose-built appliances that paired its AI with optimized hardware.

The momentum accelerated into 2024, a year when the company's "engine truly fired". Revenue reached US$74.67 million, a 15% increase over 2023, and net income (excluding one-off non-cash items) exceeded US$21 million, surpassing guidance by over 253%. This period saw a strong focus on operational efficiency, with SG&A and R&D expenses reduced through structured layoffs and significant improvements in internal controls, leading to Sarbanes-Oxley compliance ahead of schedule. Major projects included the continued deployment of an Air Gap Network for the Egyptian government, moving into large-scale testing and connection phases. By the end of 2024, Gorilla had secured nearly US$2 billion in signed contracts.

The first half of 2025 further solidified this trajectory, with revenue reaching approximately US$39.3 million, a "90-plus percent year-on-year increase". The company significantly strengthened its financial position, reducing debt to US$18.1 million and raising an additional US$105 million in equity in July to support large projects and potential bid bonds. Operational achievements included a US$5 million investment in the ONE AMAZON partnership, which is progressing towards an official showcase in September 2025 and tokenization launch in November 2025, with Gorilla serving as the exclusive technology backbone. The Royal Thai Tourist Police contract, initially a proof-of-concept, expanded into a signed contract valued at US$50 million-US$60 million, with a broader addressable opportunity of US$500 million-US$550 million over several years. The Smart Education contract in Thailand also expanded in scope to include smart cloud infrastructure and AI database integration, entering late-stage negotiations. Additionally, Gorilla signed a global OEM agreement with Hewlett Packard Enterprise (HPE), further validating its technology and expanding its market reach.

Landmark Freyr Singapore Contract: A Catalyst for Growth

A pivotal development underscoring Gorilla's strategic evolution and future potential is the US$1.4 billion, three-year contract signed with Freyr Singapore, an infrastructure platform company, announced on September 17, 2025. This binding agreement, not a memorandum of understanding, is for the design, build, and operation of a network of AI-powered data centers across Southeast Asia, including Indonesia, Malaysia, and Thailand. Under this contract, Gorilla will serve as the principal operator and AI infrastructure lead, providing full-stack GPU-dense compute, orchestration software, and multi-year SLA-based operations. Phase One of this ambitious program is valued at US$300 million and is scheduled to commence execution in the fourth quarter of 2025, providing immediate revenue visibility.

This landmark contract is a testament to Gorilla's global delivery capabilities and its strategic shift towards multi-year, recurring revenue streams. It is a significant step in the company's goal to "derisk our business, not just in terms of territories and geographies, but also in terms of business segments," aiming for no single client to represent more than 10-15% of total revenue by 2026-2027. The Freyr Singapore deal, alongside other multi-year contracts in Southeast Asia (Thailand, Singapore, Jakarta, Malaysia, and Taiwan) ranging from three to eight years, positions Gorilla to build a stable, predictable revenue base with substantial upside potential.

Financial Performance and Liquidity: Fueling Ambitious Targets

Gorilla's financial performance reflects its strategic pivot and operational effectiveness. In the first half of 2025, the company reported approximately US$39.3 million in revenue, a robust 90% year-on-year increase. Adjusted EBITDA and adjusted net income both reached approximately US$5.7 million on a normalized basis, demonstrating a commitment to "profitable, sustainable business" growth. While gross margins in the first half of 2025 were in the low 30s, primarily due to a higher mix of hardware deliveries compared to the previous year's service-heavy revenue, the company maintains its full-year forecast for gross margins in the 40% range. One-off adjustments in H1 2025 included a non-cash financing-related loss from warrant exercises and FX-related losses due to the lagged impact of the Egyptian pound's devaluation in 2024.

For the full year 2024, Gorilla delivered US$74.67 million in revenue, a 15% increase over 2023. Gross profit stood at 49.96%, a decline from 2023's 69% due to a shift in revenue mix, but management expects gross margins to stabilize in the 45% to low 50% range going forward. Net income, excluding one-off non-cash items, surged to over US$21 million, and adjusted EBITDA exceeded US$20 million, highlighting disciplined cost control and operational focus.

Liquidity has significantly strengthened. As of the end of H1 2025, Gorilla had approximately US$26.1 million in cash, further bolstered by a US$105 million equity raise in July 2025. This brings the unrestricted cash balance to about US$114 million and restricted cash to US$11.3 million, with restricted cash decreasing as guarantees are released. The company's debt position has also improved, falling to US$18.1 million at the end of H1 2025 from US$21.4 million at the end of 2024, with a cash-neutral strategy of paying down debt to release pledged deposits. While 2024 saw a US$34 million operating cash outflow due to a build-up in unbilled revenue, management believes this has peaked and anticipates positive operating cash flow in 2025 through active billing and customer collections. The company's funding strategy prioritizes project-level funding and debt over equity, with the recent equity raise strategically executed to demonstrate readiness for large projects and improve terms for future debt financing.

Outlook and Guidance: A Clear Path to Higher Revenues

Gorilla Technology Group has provided clear and ambitious guidance, underpinned by a disciplined, backlog-driven forecasting approach. For 2025, the company projects revenue between US$100 million and US$110 million, with EBITDA margins targeted at 20-25% and net margins between 10-18%. Gross margins are expected to be in the 40-50% range, likely closer to the upper end, reflecting a strategic "cutoff for new projects of 40%" gross margin to ensure profitability. This guidance is supported by a confirmed backlog of US$93 million for 2025, comprising signed contracts either in delivery or scheduled for the year. The remaining revenue to reach the guidance range is expected from the ramp-up of projects like the Royal Thai Tourist Police and smart cities in Latin America.

Looking ahead to 2026, Gorilla has already confirmed a backlog of US$70 million, and management anticipates revenues to be "higher than our guidance for 2025". This long-term outlook is further supported by several near-term opportunities and projects currently in the proof-of-concept stage that are expected to advance. The company's strategic focus is on building a "pipeline for the next 20 years," emphasizing "long-term high margin recurring revenues, which are deeply embedded infrastructures" through multi-year contracts. Strategic initiatives to drive this growth include pursuing an acquisition in the United States, establishing a large 750-2,000 person center in India, and finalizing an acquisition in Thailand to gain operational depth and local scale.

Competitive Landscape and Strategic Differentiation

Gorilla operates in a competitive landscape alongside technology giants and specialized cybersecurity firms. Direct competitors include Cisco Systems (CSCO), Honeywell International (HON), IBM (IBM), and Palo Alto Networks (PANW), all of whom offer solutions in AI analytics, network security, and IoT technologies.

Gorilla's primary competitive advantage lies in its proprietary AI technology, particularly its Edge AI and Security Convergence platforms. While larger players like Cisco offer broader ecosystems and global reach, Gorilla differentiates itself through more specialized AI, deeper regional customization, and potentially faster innovation cycles in specific verticals. Its Edge AI, optimized for real-time processing on constrained hardware, provides a distinct edge in critical infrastructure where latency is paramount, a capability that often surpasses the cloud-centric approaches of some rivals. The company's "guerilla strategy isn't really to be the cheapest option, it's about being the most integrated".

Compared to Honeywell, which focuses on industrial IoT and physical security convergence, Gorilla's AI-centric approach, with advanced behavioral analytics, offers qualitatively superior real-time insights in urban environments and potentially more agile deployments in smart city applications. Against IBM's broader analytics suites, Gorilla provides more targeted, cost-effective solutions for IoT security in emerging markets, often delivered through hardware-software bundles that offer superior performance in edge computing. While Palo Alto Networks excels in cloud-based cybersecurity, Gorilla's integrated AI for physical security and video analytics complements this, offering a more holistic security posture.

Gorilla's specialized regional expertise, particularly in the Asia Pacific, MENA, and Latin America, allows for tailored solutions that exploit gaps in the offerings of larger, more generalized competitors. Its consultative approach and willingness to undertake smaller proof-of-concept projects build strong customer loyalty, which is crucial for securing larger, long-term contracts. The company's 29 global patents and 23 years of R&D further solidify its technical edge, creating significant barriers to entry for new players due to high R&D costs and regulatory requirements.

However, Gorilla faces competitive disadvantages, including potential dependency on regional markets and a relatively smaller global scale compared to its behemoth rivals, which could lead to higher operational costs and challenges in competing in highly diversified markets. The company's strategic response is to focus on niche innovation, integrated solutions, and long-term partnerships, while maintaining capital discipline.

Risks and Challenges on the Horizon

Despite its strong momentum, Gorilla Technology Group faces inherent risks and challenges. The execution of large-scale government projects, a cornerstone of its strategy, carries risks of project delays and payment uncertainty, as evidenced by past experiences with the Egyptian project. The complex nature of these contracts means that "time lines can shift," making forecasting difficult and requiring the company to err on the side of conservatism. Political headwinds in certain regions, such as Latin America, can also complicate project delivery and economic development initiatives.

Operating across multiple jurisdictions introduces complexities related to diverse banking regulations, foreign exchange controls, and payment cultures, which management acknowledges as a "master class of patience". While the company expects positive operating cash flow, short-term working capital pressure may arise until large customer payments are received. Furthermore, while diversifying, a temporary dependency on regional markets could create vulnerability if client demand fluctuates. Operational execution remains critical to sustaining growth momentum, and the company must continuously convert its substantial pipeline into signed contracts and recognized revenue.

Conclusion

Gorilla Technology Group Inc. stands at an inflection point, having successfully transformed from a regionally constrained entity into a dynamic global player in AI-driven national infrastructure and cybersecurity. The recent US$1.4 billion Freyr Singapore contract is a powerful testament to its technological prowess and strategic vision, providing significant revenue visibility and validating its shift towards long-term, predictable revenue streams. Backed by a robust financial turnaround, a disciplined approach to profitability, and a clear roadmap for growth, Gorilla is poised to capitalize on the accelerating demand for smart city and AI-powered solutions worldwide.

The company's differentiated Edge AI and Security Convergence platforms provide a critical competitive edge, enabling real-time, on-site intelligence and integrated physical-cyber defenses that are essential for mission-critical applications. While the complexities of large-scale government projects and intense competition necessitate vigilant execution and risk management, Gorilla's specialized regional expertise, innovative technology, and strategic partnerships position it as a formidable force. For discerning investors, Gorilla Technology Group represents a compelling opportunity to participate in the growth of a company that is not merely participating in the digital transformation, but actively defining its future.