Financial Data and Key Metrics Changes - The company reported consolidated revenue of $18.8 million for Q3 2025, a 36.9% increase year-over-year from $13.7 million in Q3 2024 [15][16] - The OSS segment revenue increased by 43.4%, contributing approximately $2.8 million to the overall revenue growth [15][16] - Consolidated gross margin improved to 35.7%, up from 32% in the prior year when excluding a $6.1 million inventory charge [17] - GAAP net income for Q3 2025 was $0.3 million, compared to a net loss of $6.8 million in the prior quarter [18][19] - Non-GAAP net income was $0.7 million, a significant improvement from a non-GAAP net loss of $6.4 million in Q3 2024 [19] Business Line Data and Key Metrics Changes - The OSS segment achieved a gross margin of 45.6%, up from an adjusted 43.2% in the same period last year, driven by a more profitable product mix [17] - The Brezhnev segment reported a gross margin of 26%, reflecting a 400 basis point increase due to a favorable product mix [18] Market Data and Key Metrics Changes - The company noted strong demand in both defense and commercial markets, with a book-to-bill ratio of 1.4 for the OSS segment [4] - The Brezhnev segment experienced growth of $2.3 million in Q3, with $600,000 attributed to foreign exchange effects [34] Company Strategy and Development Direction - The company is focused on leveraging high-performance edge compute solutions to meet growing demands in AI, machine learning, and sensor fusion [4][9] - A multi-year strategic plan has been launched, with increased R&D investments to capitalize on emerging opportunities [9][10] - The company plans to broaden its commercial product lineup with new Gen 6 systems aimed at enhancing processing capability [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth and strong profitability for the remainder of 2025 and into 2026, supported by a solid backlog of orders [3][14] - The ongoing government shutdown is expected to impact the timing of near-term bookings but is viewed as a timing issue rather than a demand issue [8][25] - The company raised its full-year 2025 revenue guidance to $63 million-$65 million, up from $59 million-$61 million [21][14] Other Important Information - The company raised approximately $12.5 million in gross proceeds through a registered direct offering, enhancing its financial position [12][20] - The company has recognized lifetime contracted revenue of over $50 million on the P-8 Poseidon reconnaissance aircraft [5] Q&A Session Summary Question: How should investors think about the seasonality going forward for core OSS in light of strong bookings execution and the government shutdown? - Management indicated a consistent pattern of higher revenues in the second half of the year, with expectations for a moderated ramp compared to 2025 [24][25] Question: Can you update us on the data center market opportunity and the Army's situational awareness technology procurement evaluation? - The company is evaluating its Ponto product in data center markets and noted that testing for the Army's situational awareness technology continues, albeit delayed due to the government shutdown [26][28] Question: What was behind the strong performance of the Brezhnev segment? - The Brezhnev segment's growth was attributed to recovery in industrial end markets and favorable foreign exchange effects [34] Question: How is the cash from the recent offering being deployed? - The cash raised is being used to support working capital needs and is expected to facilitate positive cash flow in Q4 [38][39] Question: Is the core OSS business expected to be EBITDA positive for the year? - Management expressed confidence that the core OSS segment could achieve positive EBITDA in 2026, supported by a strong pipeline and growth expectations [46][47]