Financial Data and Key Metrics Changes - For Q3 fiscal 2026, the company reported revenue of $16.9 million, which is down from $18.9 million in the same period of the prior fiscal year and essentially unchanged from the second fiscal quarter of this year [13][19] - The revenue from commercial and U.S. government satellite programs was approximately $4.2 million, accounting for 25% of total revenue, compared to $11.2 million or 59% in the same period of the prior fiscal year [13][14] - Consolidated net income for Q3 fiscal 2026 was approximately $1.6 million or $0.16 per share, compared to approximately $15.4 million or $1.60 per share for the same period of the previous fiscal year [20] Business Line Data and Key Metrics Changes - Revenue from non-space U.S. government and Department of Defense customers was $12.5 million, up from $7.4 million in the same period of the prior fiscal year, accounting for approximately 74% of consolidated revenue [14] - Other commercial and industrial revenues were approximately $180 thousand, down from approximately $367 thousand in the prior fiscal year [14] Market Data and Key Metrics Changes - The company’s backlog at the end of January 2026 was approximately $83 million, a new all-time high, compared to approximately $70 million for the previous fiscal year ended April 30, 2025 [21] - The company anticipates that backlog could exceed $100 million in the near future, supported by new contracts and ongoing business [6][21] Company Strategy and Development Direction - The company is focusing on growth in large and emerging markets, including quantum sensing and proliferated satellites, alongside its traditional space and defense businesses [3][4] - The management emphasized the importance of maintaining a balance between traditional and new business lines, expecting both to grow simultaneously [5] Management's Comments on Operating Environment and Future Outlook - The current geopolitical climate, including ongoing conflicts, is expected to drive demand for defense programs, which the company is heavily involved in [9][11] - Management expressed optimism about the future growth of the company, particularly in the defense sector and alternative positioning, navigation, and timing systems [12] 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 [22] - The company plans to continue investing in R&D to keep its products at the forefront of technology [18] Q&A Session Summary Question: Insights on proliferated satellite wins - Management noted that success in proliferated constellation deals is linked to providing a technical edge, while cost-driven contracts pose challenges [26][27] Question: Details on the $45 million contracts - Management indicated that both contracts are significant but did not disclose specific proportions [28][29] Question: Funded backlog timing - Management confirmed that the new contracts will significantly impact the current quarter's backlog [30] Question: Cost structure and operating expenses - Management clarified that some operating expenses are due to investments in Colorado, and they expect expenses to normalize [31][33] Question: Update on Turbo's market reception - Management expressed increased optimism about Turbo's revenue potential, expecting significant growth in the coming quarters [34][35] Question: Clarification on proliferated satellites - Management explained that proliferated satellites differ from traditional systems by having many more, less costly satellites, which allows for continuous production [40][42] Question: Gross margins on new satellite programs - Management anticipates lower gross margins initially for proliferated satellites but expects strong margins in the long run [48][49] Question: Alternative positioning and navigation systems - Management discussed ongoing projects in magnetic navigation and other non-satellite alternatives to GPS, with current revenue from development activities [88][95] Question: Impact of new contracts on backlog - Management confirmed that the new contracts could have a significant long-term impact on backlog, potentially following a 10x revenue realization pattern [99][100]

Financial Data and Key Metrics Changes - The company reported revenue of $17.1 million for the second quarter, up 24% sequentially, marking the third highest quarter of revenue in the past decade [3][12] - 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 [17] - The fully funded backlog at the end of October 2025 was approximately $82 million, up from approximately $70 million for the previous fiscal year [18] Business Line Data and Key Metrics Changes - Revenue from commercial and U.S. government satellite programs was approximately $4.6 million, or 27%, down from $9.4 million, or 59%, in the same period of the prior fiscal year [12] - 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% for the prior fiscal year [13] Market Data and Key Metrics Changes - The company anticipates significant growth in sectors such as quantum sensing, proliferated satellites, and alternative position navigation and timing (ALT-PNT) programs, which are expected to contribute to future revenue growth [5][6] - The defense business is experiencing a boom, with increased spending anticipated in missiles, munitions, and modernization initiatives [9] Company Strategy and Development Direction - The company is focusing on expanding its core business while also pursuing new growth opportunities in emerging markets [7] - Strategic partnerships with major prime contractors are crucial for current and future business, providing an advantageous position on many programs [8] - The company is actively hiring senior scientists in Colorado to enhance its capabilities in quantum technology and low-phase noise oscillator technology [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a strong multi-year growth period, supported by a significant backlog and ongoing business development [3][10] - The company believes that defense spending will remain robust regardless of political changes, driven by global security concerns [59] Other Important Information - The company is debt-free and maintains a strong working capital position of approximately $31 million, with a current ratio of approximately 2.6-1 [18] - The company plans to continue investing in R&D to keep its products at the state of the art, despite fluctuations in R&D expenditures [16] Q&A Session Summary Question: Can you provide details on the Golden Dome Awards? - Management indicated that specifics are still being defined, but they anticipate participation in various aspects of the program, particularly in ground-based and space-based missile defense [22][24] Question: What activities are ongoing in Colorado? - The focus in Colorado is on quantum technology and low-phase noise oscillator development, with several senior scientists hired from NIST [25][26] Question: Will margins normalize in the near term? - Management confirmed that they expect margins to normalize as program requirements have been cleared up and new contracts are anticipated [36] Question: How does the company view growth opportunities irrespective of political changes? - Management believes that growth in the space business is driven by technology rather than politics, and defense spending will likely remain stable due to global security concerns [58][59] 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 [63][64] Question: What is the status of international business? - The company has some significant business overseas and is actively pursuing additional opportunities, though export controls present challenges [71][72]