Financial Data and Key Metrics Changes - The company reported revenue of $17.1 million for Q2 fiscal 2026, representing a 24% sequential increase and the third highest quarterly revenue in the past decade [3][11] - Consolidated net income for the quarter was approximately $1.8 million, or $0.18 per share, compared to approximately $2.7 million, or $0.28 per share for the same period of the previous fiscal year [15] - The fully funded backlog at the end of October 2025 was approximately $82 million, up from approximately $70 million at the previous fiscal year-end [16] Business Line Data and Key Metrics Changes - Revenue from commercial and U.S. government satellite programs was approximately $4.6 million, down from $9.4 million in the same period of the prior fiscal year [11] - Revenue from non-space U.S. government and Department of Defense customers was $11.9 million, accounting for approximately 69% of consolidated revenue, compared to 37% in the prior fiscal year [11] - Other commercial industrial revenues were approximately $560,000, slightly down from approximately $591,000 in the prior fiscal year [12] Market Data and Key Metrics Changes - The company anticipates significant growth in non-space defense products, which contributed to the increase in backlog [45] - The company expects a reversal in backlog growth towards space-related contracts in the upcoming quarters [46] Company Strategy and Development Direction - The company is focusing on growth opportunities in quantum sensing, proliferated satellites, and alternative position navigation and timing (ALT-PNT) programs, which are expected to be additive to the current business [5][6] - The company has established a facility in Colorado focused on quantum technology and low-phase noise oscillator technology, aiming to attract talent from local research institutions [22][23] - The company maintains strong strategic partnerships with major prime contractors, enhancing its competitive position in the defense sector [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory, citing a strong core business and new market opportunities [9] - The company believes that defense spending will remain robust regardless of political changes, driven by global security concerns [68][69] - Management indicated that many delays in revenue recognition were due to customer-driven issues rather than the government shutdown, and they expect to see normalization of margins in the near term [30][39] Other Important Information - The company is debt-free and has a strong working capital position of approximately $31 million, with a current ratio of approximately 2.6 to 1 [16] - The company plans to continue investing in R&D to maintain its technological edge [14] Q&A Session Summary Question: Can you provide details on the Golden Dome Awards? - Management indicated that they anticipate participating in various aspects of the Golden Dome initiative, particularly in ground-based and space-based missile defense [20][21] Question: What activities are ongoing in Colorado? - The Colorado facility focuses on quantum technology and low-phase noise oscillator technology, with several senior scientists hired from NIST [22][23] Question: Will margins normalize in the near term? - Management confirmed that they expect margins to normalize as program requirements have been resolved and new contracts are anticipated [39] Question: How does the company view growth opportunities irrespective of political changes? - Management believes that growth in the space sector is largely independent of politics, and defense spending is expected to remain strong due to global security concerns [68][69] Question: Is there potential for Turbo in commercial drones? - Management sees potential for Turbo in both military and commercial applications, but anticipates more immediate opportunities in military [72][73] Question: What is the company's position on international business? - The company has some significant business overseas and is actively pursuing additional opportunities, though export controls present challenges [79][80]

Financial Data and Key Metrics Changes - For the nine months ended January 31, 2025, consolidated revenue increased to $49.8 million from $39.7 million in the same period of the prior fiscal year, reflecting a significant growth [12] - Consolidated net income for the nine months ending January 31, 2025, was $20.5 million or $2.18 per share, compared to $3 million or $0.32 per share in the previous fiscal year [22] - The company recorded an operating income of $8.5 million compared to $2.5 million in the prior year, indicating improved profitability [17][18] Business Line Data and Key Metrics Changes - Revenue from commercial and U.S. government satellite programs was approximately $28.8 million, or 58%, compared to $16.3 million, or 41%, in the same period of the prior fiscal year [13] - Revenues from non-space U.S. government and DoD customers decreased to $19.5 million from $21.1 million, accounting for approximately 39% of consolidated revenue compared to 53% in the prior fiscal year [13] - Other commercial and industrial revenues were $1.5 million for the nine months ending January 31, 2025, down from $2.3 million in the previous year [14] Market Data and Key Metrics Changes - The company’s backlog at the end of January 2025 was approximately $73 million, down from approximately $78 million at the previous fiscal year end [22] - The company continues to maintain a strong working capital position of approximately $27 million and a current ratio of approximately 2.2 to 1 [23] Company Strategy and Development Direction - The company aims to continue investing in R&D to modernize products and maintain a competitive edge in the market [17] - The focus is on adapting products for proliferated satellites and quantum sensing, which are expected to drive future growth [6][79] - The company is cautiously optimistic about new business opportunities in both legacy systems and quantum sensors [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s upward trajectory despite potential near-term uncertainties in the market [6] - The company believes that the increasing strategic importance in the industry and exposure to larger addressable markets will lead to higher revenue and profitability [6] - Management noted that while there may be delays in some government programs, they do not anticipate any eliminations of programs of interest [62] Other Important Information - The company is debt-free and believes its liquidity is adequate to meet operating and investing needs for the next 12 months [25] - SG&A expenses remained approximately 19% of consolidated revenues, with increases primarily due to payroll-related expenses [15] Q&A Session Summary Question: Inquiry about quantum sensing products and revenue expectations - Management indicated that there are no products available yet, but several development contracts are anticipated over the next year or two, with potential revenue generation [32] Question: Clarification on backlog and specific contracts - Management confirmed that part of the backlog includes revenue from a previously secured contract [46][48] Question: Discussion on R&D spending trends - R&D expenses decreased slightly percentage-wise, but not in dollar terms [50][52] Question: Update on government program participation - Management stated that they are currently working with two of the three remaining prime contractors on a GPS-related project [56][58] Question: Future opportunities in proliferated satellites - Management highlighted ongoing involvement in classified satellite programs and the need for investment to adapt products for space environments [78][79] Question: Financial resources for future investments - Management confirmed that they have adequate resources to invest cautiously in necessary areas [104][105] Question: Bidding environment and competition - Management noted a mix of new entrants and familiar faces in the bidding environment, particularly for proliferated satellite programs [111]