Financial Data and Key Metrics Changes - Revenue for Q3 fiscal 2025 was $167.6 million, a decrease of 10% compared to $186.6 million in Q3 fiscal 2024 [39] - Adjusted EBITDA for Q3 was $21.8 million, down from $28.8 million in the same quarter last year [45] - The company reported a net loss of $1.8 million compared to a net income of $13.9 million in the same period last year [49] - Funded backlog at the end of Q3 was a record $763.5 million, with expectations for bookings to exceed $1 billion for the year [54][56] Business Segment Data and Key Metrics Changes - The Loitering Munitions Systems (LMS) segment recorded revenue of $83.9 million, a 46% increase from $57.7 million in the previous year [40] - The Uncrewed Systems (UXS) segment generated $53.8 million, down 44% from $113.3 million, primarily due to a decrease in Ukraine-related revenue [41] - The Macready Works segment revenue was $20 million, an increase of 28% from $15.6 million in the same quarter last year [43] Market Data and Key Metrics Changes - Shipments to Ukraine are expected to represent only 17% of revenues for the full fiscal year, down from 38% last fiscal year [15] - The company anticipates that Ukraine will account for about 6% of Q4 revenues [15] Company Strategy and Development Direction - The company is focused on expanding production capacity and launching innovative products while leveraging acquisitions to strengthen market leadership [10] - The BlueHalo transaction is expected to enhance the company's market opportunity by adding capabilities in space technologies, counter-UAS, directed energy, and cyber solutions [17] - The company aims to achieve more than 10% revenue growth and $1 billion in orders in fiscal year 2025 [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged short-term challenges due to unprecedented high winds and fires in Los Angeles, which impacted operations and financial performance [20][21] - Despite these challenges, management remains confident in achieving record fourth-quarter revenue and accelerating growth in fiscal year 2026 [10][56] - The evolving global security landscape is driving demand for cost-effective AI-driven autonomous defense solutions, aligning with the company's core offerings [12] Other Important Information - The company is lowering its fiscal year 2025 guidance to revenues of $780 million to $795 million and adjusted EBITDA of $135 million to $142 million [56] - The company incurred approximately $10 million in acquisition-related expenses in Q3, which will continue into Q4 [46] Q&A Session Summary Question: Insights on fiscal year 2026 growth - Management expressed confidence in achieving nearly a billion-dollar year in fiscal 2026, supported by a strong backlog and growing pipeline of opportunities [65][66] Question: Details on BlueHalo acquisition growth areas - Management highlighted excitement around BlueHalo's counter-UAS business, space communication capabilities, and advanced cyber solutions as key growth areas post-acquisition [70][72] Question: Clarification on work stoppage for foreign military sales contracts - Management confirmed a stop work order on $13 million in foreign military sales contracts, indicating uncertainty about the duration but expressing confidence in future demand [78][80] Question: Demand environment for uncrewed systems - Management noted strong drivers for growth in the uncrewed systems business, including new capabilities and significant contracts expected to drive revenue in the coming years [84][86] Question: Update on international sales and negotiations - Management reported firm orders from approximately six countries and ongoing engagements with an additional twenty countries for Switchblade systems, indicating a strong long-term growth outlook [112][114]