Colin Canfield

Colin Canfield inquired about the end market expectations for fiscal year 2027, asking if defense and intelligence are projected to grow with civil remaining flat, and when the downdrafts in the civil sector are expected to lift. He also followed up on the multi-year civil setup, asking how the downdrafts experienced this year might be recovered over a multi-year period and how the level of cuts in civil this year presents an opportunity for Booz Allen Hamilton.

Answer

Chairman, CEO, and President Horacio Rozanski stated that the national security business continues to see good growth and prospects, while the civil business is beginning to reignite with double-digit pipeline growth and increased work activity, suggesting an inflection point. Executive Vice President and Chief Operating Officer Kristine Martin Anderson explained that civil has changed, with modernization shifting from cloud to data platform readiness for AI, and highlighted green shoots in AI-enabled public health, bio-threat detection, fraud detection, aviation safety, autonomy at the edge, and weather infrastructure.

Colin Canfield inquired about Booz Allen Hamilton's end market expectations for fiscal year 2027, specifically if defense and intelligence are projected to grow while Civil remains flat, and when the Civil business is expected to recover. He also asked for a multi-year outlook on the Civil segment, considering current downdrafts and the opportunity for rebuilding.

Answer

Chairman, CEO, and President Horacio Rozanski noted strong growth prospects for national security and an exciting reignition in the Civil business, with double-digit pipeline growth in both. Executive Vice President and COO Kristine Martin Anderson explained that Civil has changed across administrations, with a shift from cloud to data platform readiness for AI, consolidation of platforms, and green shoots in AI-enabled public health, bio-threat detection, and aviation safety.

Colin Canfield inquired about the potential growth trajectory for fiscal year 2027, asking if a scenario of civil decline and national security acceleration would lead to 0-2% organic growth, and when the business is expected to return to overall growth, noting potential margin troughs this year.

Answer

Matt Calderone (EVP and CFO) stated he wouldn't provide specific 2027 guidance but noted momentum in national security and stabilization in civil, with easier comps ahead. He also highlighted increasing contract conversion to outcome-based models and a changing relationship between revenue growth and headcount. Horacio Rozanski (Chairman, CEO and President) added that growth vectors in national security are more robust, and they are aggressively seeking opportunities in civil aligned with administration priorities.

Colin Canfield inquired about the potential for Booz Allen Hamilton's business to return to growth in FY27 and beyond, asking if his high-level math for 0-2% organic growth in FY27 accelerating in FY28 was accurate, and when the business is expected to return to overall growth. He also asked for reasons why an investor should not short the stock next quarter.

Answer

Matt Calderone (EVP and CFO) stated he wouldn't get into next year's guidance but expressed medium-term optimism due to national security momentum and a stable civil business, noting that growth would not be as linearly connected to headcount due to utilization improvements and mix shift. Horacio Rozanski (Chairman, CEO and President) added that growth vectors would play strongly in national security and that the company is aggressively pursuing opportunities in civil aligned with administration priorities. Matt Calderone declined to give investment advice.

Colin Canfield of Cantor Fitzgerald asked for details on non-operational cash flow, including the expected cash tax benefits and potential returns from venture capital investments. He also inquired about quarter-to-date bookings and how the 'One Big Beautiful bill' is affecting the pace of contract awards and funding.

Answer

CFO Matt Calderone confirmed a $200M federal cash tax benefit this fiscal year and a $170M refund next year from a favorable IRS agreement. He noted the venture fund is performing in the top decile but cautioned against modeling cash tailwinds yet, as investments are ongoing. Calderone stated it's too early to comment on Q2 bookings. COO Kristine Anderson reiterated that funding is moving slowly, partly due to fewer contracting officials, but they expect the logjam to break.

Colin Canfield from Cantor Fitzgerald inquired about the multi-year growth outlook, the differing dynamics between the defense and civil segments, and the company's plans for share repurchases.

Answer

Horacio Rozanski, Chairman, CEO and President, aligned the outlook with budget trends, seeing defense growth and civil pressure. Kristine Martin Anderson, EVP and COO, added that civil slowdowns are creating opportunities for transformational tech adoption. Matthew Calderone, EVP and CFO, confirmed the balance sheet remains a strength and that capital deployment will remain flexible, including share repurchases and strategic venture investments.

Colin Canfield inquired about the current status of Federal Acquisition Regulation (FAR) reform, its potential magnitude and timing of impact on CACI's cost-plus exposure, and the scalability of intelligence services gained from the ARCA acquisition, specifically the Danbury Optics business.

Answer

CEO John S. Mengucci discussed the ongoing shift towards firm fixed price and FAR Part 12, noting CACI's intentional build to support both FAR Part 12 and 15, which has driven its electronic warfare business. CFO Jeffrey D. MacLauchlan added that OTA contracting has increased 2.5 times in the last two years. Regarding ARCA, CEO John S. Mengucci highlighted its role as a leading developer of sense and sense-making capabilities, its involvement in critical national security missions with long-term funding streams, high technical barriers to entry, and strong execution in fixed-price environments, including agile software development for intelligence data.

Colin Canfield (Cantor) questioned the current status of Federal Acquisition Regulation (FAR) reform, its expected magnitude, and timing of impact on CACI's cost-plus exposure, later asking about the scalability of intelligence services from the ARCA acquisition, specifically the Danbury Optics business, and potential roadblocks.

Answer

CEO John S. Mengucci explained CACI's alignment with acquisition reform, emphasizing the shift towards firm fixed price and FAR Part 12, and the company's readiness to support these changes through OTAs and commercial investment models. CFO Jeff McLaughlin added that CACI is finding its rhythm with OTAs, seeing a significant increase in contracting. Mr. Mengucci described ARCA as a leading developer of sense and sense-making capabilities, involved in critical national security missions with long-term growth funding, high technical barriers, and a strong contract portfolio, highlighting its investment ahead of need and agility.

Colin Canfield asked about early expectations for the FY2027 budget request, specifically regarding defense budget trends and CACI's positioning in a potentially shifting funding environment. He also inquired about the government's evolving agile contracting approaches for counter-UAS, cyber, and electronic warfare, and how CACI leverages its commercially developed solutions.

Answer

CEO John Mengucci emphasized CACI's strategic focus on critical national security priorities, which benefit from deep, enduring funding and bipartisan support. He highlighted CACI's large addressable market and ability to grow due to long-term contracts and backlog, regardless of top-line budget fluctuations. Mengucci also noted the government's shift towards agile buying methods like OTAs, stating CACI's unique position with both CAS compliant and commercial practices allows for quick, part-number-based ordering of its software-defined technology.

Colin Canfield inquired about the evolving contracting approach for counter-UAS, cyber, and electronic warfare, noting a shift towards more agile methods rather than traditional large multi-year vehicles, and how CACI's commercially developed solutions fit this trend.

Answer

President and CEO John Mengucci highlighted the U.S. government's increasing use of OTAs and commercial-like purchasing methods. He emphasized CACI's unique position with both CAS compliant and commercial accounting practices, enabling them to support diverse buying mechanisms. Mengucci noted that most of CACI's software-defined technology work is now awarded via purchase orders, allowing for agile delivery and financial flexibility.

Colin Canfield from Cantor Fitzgerald inquired about the assumptions in the FY26 guidance regarding a continuing resolution (CR) and whether a faster budget process could drive results to the high end. He also asked about the margin progression towards Investor Day targets.

Answer

President and CEO John Mengucci explained the guidance range accounts for various funding scenarios, with a full-year CR pushing results toward the low end and a faster budget process moving them toward the high end. CFO Jeffrey MacLauchlan addressed margin progression, noting a typical pattern of lower margins in the first half of the fiscal year and higher margins in the second half, consistent with prior years.

Colin Canfield asked about the budget cadence contemplated in CACI's Investor Day targets, particularly regarding expertise versus technology, and inquired about the potential speed and nature of supplemental funding outlays.

Answer

CEO John Mengucci detailed several factors supporting CACI's long-range plan, including strong book-to-bill, a large backlog providing clarity, a favorable FY25 CR, and significant potential funding from reconciliation bills. He reiterated confidence in the 3-year targets. CFO Jeff MacLauchlan added that while details are pending, supplemental funding would likely benefit both O&M and R&D-funded work.

Colin Canfield inquired about the investor day pipeline of 20 contracts averaging $170 million, asking about the expected conversion rate and the magnitude of upfront awards, and also about the potential value capture and Google's R&D investment for the 81-cluster SunCatcher concept.

Answer

CEO, Chairperson, and Co-founder Will Marshall stated Planet is well-positioned for the 20 opportunities, focusing on a half-dozen more mature ones with a higher probability of conversion. He emphasized Planet's unique capability in building scaled constellations. Regarding SunCatcher, Marshall clarified the current contract is for early-phase demo satellites, not the full 81-satellite cluster, but acknowledged the significant long-term R&D investment potential from Google, highlighting Planet's competitive advantage in cost-efficient, scaled satellite deployment and AI integration.

Colin Michael Canfield asked about the growth dynamics, specifically how much of the Germany and JSAT contracts are included in the current backlog, and the growth mechanics within the U.S. Department of Defense, including trends for Planet Labs PBC to engage directly with combatant command controls for naval maritime domain awareness.

Answer

Will Marshall (Co-Founder, CEO & Director, Planet Labs) explained that the U.S. Department of Defense is increasingly leveraging Planet's broad area monitoring and maritime domain awareness solutions. Ashley Fieglein Johnson (President & CFO, Planet Labs) confirmed that the full amounts of the Germany and JSAT contracts are included in the backlog and will be recognized over multiple years. Regarding multi-year free cash flow dynamics and working capital, Ms. Johnson stated that satellite services contracts generally have a positive impact on working capital, enabling fleet build-out without relying on the balance sheet, with specifics varying quarter-to-quarter and early years being weighted.

Colin Michael Canfield asked about the growth dynamics, specifically the inclusion of Germany and JSAT contracts within the current backlog, and the growth mechanics within the U.S. Department of Defense (DOD), particularly regarding Maritime Domain Awareness and direct engagement with combatant commands. He also inquired about multi-year free cash flow dynamics and the working capital schedule related to these major awards and other international opportunities.

Answer

Will Marshall (Chairman, Co-Founder, and CEO, Planet) explained that the DOD is increasingly leveraging Planet's broad area monitoring capabilities, including GMS and Maritime Domain Awareness solutions, citing recent wins with the U.S. Navy and Defense Innovation Unit. Ashley Fieglein Johnson (President and CFO, Planet) confirmed that the full amounts of the Germany and JSAT contracts are included in the backlog and will be recognized over multiple years. She added that satellite services contracts generally provide positive working capital benefits, aiding fleet build-out without relying on the balance sheet, with significant weighting in the early years of the contracts.

Colin Canfield of Cantor Fitzgerald asked about the components of Planet's free cash flow, questioning the drivers of working capital benefits and the cash terms for the pipeline of large, JSAT-like satellite services deals.

Answer

President & CFO Ashley Fieglein Johnson acknowledged the Q1 positive free cash flow as a significant milestone. She explained that working capital can be lumpy quarter-to-quarter due to large contracts but affirmed the company is focused on a path to sustainable free cash flow generation within the next 24 months through capital-efficient growth.

Colin Canfield asked about the dynamics of achieving positive free cash flow, including working capital and CapEx assumptions, and inquired about the size of the bid pipeline for new satellite services opportunities.

Answer

CFO Ashley Whitfield Johnson explained that FY26 is a peak CapEx year, but cash burn is expected to be halved due to front-loaded cash payments from the JSAT contract, keeping them on a 24-month path to positive free cash flow. CEO William Marshall added that while he couldn't provide a specific number for the satellite services pipeline, demand from various countries is strong and has accelerated since the JSAT deal was announced.

Colin Canfield with Cantor Fitzgerald asked about the drivers for the anticipated Q4 EBITDA step-up, focusing on the progression of SG&A and the impact of supply chain dynamics, and sought clarification on whether AeroVironment expects to achieve break-even free cash flow for the full fiscal year.

Answer

Chairman, President, and CEO Wahid Nawabi explained that Q4 will see higher volume (55% of H2 revenue) and a more favorable product mix, which will significantly boost profitability, while SG&A and R&D spending levels are expected to be maintained. Executive Vice President and CFO Kevin McDonnell added that improved gross margins and some SG&A leverage from realized synergies will contribute. Kevin McDonnell reiterated the goal of 50% cash conversion from EBITDA for the year, which implies minimal change in working capital.

Colin Canfield asked for a cash flow bridge for the remainder of the fiscal year, specifically seeking insight into normalized working capital balances (in dollars or as a percentage of revenue) and how they relate to growth plans and CapEx.

Answer

Executive VP and CFO Kevin McDonnell indicated opportunities for improvement in unbilled receivables and a goal to be cash flow positive with some cash conversion this year. He noted a balancing act between cash generation and scaling up manufacturing for growth, suggesting working capital improvements could offset CapEx increases. Chairman, President, and CEO Wahid Nawabi added that working capital shouldn't go much higher than current levels for the year.

Colin Canfield asked for a cash flow bridge for the rest of the year and insights into normalized working capital balances, either in total dollars or as a percentage of revenue.

Answer

Kevin McDonnell, Executive VP and CFO, stated there's opportunity in unbilled receivables, aiming for positive cash flow and cash conversion this year. He noted a balancing act between cash generation and growth plans requiring ramp-up, which could offset CapEx increases with working capital improvements. He indicated that normalized working capital shouldn't go much higher than its current level for the year.

Colin Canfield asked about the magnitude and focus of SAIC's portfolio shaping, particularly regarding adding to defense/intelligence capabilities versus civil exposure. He also inquired about the multi-year outlook for defense and civil budget growth, weighing the risk-reward through upcoming midterms.

Answer

Interim CEO Jim Reagan stated portfolio shaping would focus on opportunities unlocked by refocusing the business, without a specific dollar figure. He expects upward pressure on the DoD budget due to readiness needs. CFO Prabu Natarajan added that SAIC needs to demonstrate organic growth before considering large-scale M&A, focusing on tuck-ins. He anticipates the DoD base budget to be flat to slightly up, with reconciliation money needed. For civil budgets, the baseline assumption is continued pressure for the next 12-18 months, despite modernization needs, with SAIC focusing on consistent performance and on-contract growth within its control.

Colin Canfield of Cantor Fitzgerald inquired about the margin trajectory for the Defense and Civil segments relative to multi-year targets and asked for SAIC's perspective on the best-case outcome from different defense budget mix scenarios.

Answer

CFO Prabu Natarajan reiterated expectations for Civil margin improvement and noted the Defense segment is bidding on work with higher thresholds. CEO Toni Townes-Whitley added that a focus on solid program transitions is a key risk mitigator. Regarding budget mix, she expressed confidence in the portfolio's diversity to offset risks and capture opportunities, particularly in the growing Civilian and Intel businesses, to support guidance.

Colin Canfield from Cantor Fitzgerald asked for clarification on the SSLE contract booking, the balance between cost savings and investment for margin improvement, and SAIC's aspirations in the space and digital engineering markets.

Answer

CFO Prabu Natarajan explained the SSLE net booking in Q1 should be over $1 billion after accounting for the runoff of the prior contract. CEO Toni Townes-Whitley detailed that margin improvement comes from scrutinizing investments, bidding on higher-margin work, and strong program execution. On space, Prabu defined SAIC's role as an 'asset-light integrator' focused on software and data, not building hardware, a point Toni reinforced by highlighting the use of their core digital engineering capabilities.

Colin Canfield asked about the timing and one-time margin and cash flow dynamics in the quarter, including Section 174 benefits and any merger-related pull-forward or push-out effects. He also inquired about the multi-year margin progression, synergy targets, and the impact of shutdown-related dynamics on the FY26 margin progression and the investor day framework. Finally, he sought an update on potential divestitures and the timing and magnitude of the upcoming Space Launch System (SLS) award.

Answer

COO Steve Arnette detailed the strong year-end cash performance, noting a $20 million impact from additional working days and an expected $35 million benefit in FY26 from OBDA tax law changes. He reaffirmed the target of 8.5%-9% margins by FY28, highlighting 10 basis points margin expansion in FY25 and an expected 20 basis points in FY26, with over $60 million in net run rate cost synergies by end of FY26. CEO John Heller emphasized the two-pronged growth strategy, leveraging core markets and accelerating growth in space systems, critical digital infrastructure, and global nuclear energy for margin improvement. Steve Arnette clarified the Space Force range contract (not SLS), confirming it cleared protest and operations begin in December, with $1.5 billion appropriated for infrastructure upgrades by 2028. John Heller added that while Rapid Solutions and the New Zealand business were non-core divestitures, Amentum is currently excited about its portfolio and continuously reviews for non-core assets.

Colin Canfield inquired about the timing and one-time margin and cash flow dynamics in the quarter, including Section 174 benefits and any merger-related pull-forward or push-out effects. He also asked for an update on the multi-year margin progression, synergy contribution, and the multi-year framework from the investor day, as well as the timing, magnitude, and multiple of potential divestitures and the upcoming SLS award.

Answer

CFO Travis Johnson highlighted strong year-end cash performance, noting a $20 million impact from additional working days and an expected $35 million benefit from OBDA tax law changes in FY26. He reaffirmed the goal of 8.5-9% margins by FY28, with 30 basis points expansion in the first two years, and confirmed exceeding $60 million in net run rate cost synergies by end of FY26. CEO John Heller emphasized the two-pronged growth strategy focusing on core and accelerating growth markets (space systems, critical digital infrastructure, global nuclear energy) for margin improvement. COO Steve Arnette provided an update on the Space Force Range contract, confirming it cleared protest and operations begin in December, and discussed the company's current satisfaction with its portfolio, while acknowledging annual strategic reviews for non-core assets.

Colin Canfield sought details on the expected proceeds and valuation of the Rapid Solutions divestiture and asked for a breakdown of the quarterly book-to-bill ratio, including joint ventures.

Answer

CFO Travis Johnson confirmed the Rapid Solutions sale price is $360 million, with expected after-tax proceeds of approximately $325 million, which will be used to accelerate deleveraging. He stated the Q2 book-to-bill was 0.9x on both a reported and imputed basis, noting that the strength in JV awards was concentrated in Q1.

Colin Canfield of Cantor Fitzgerald & Co. inquired about Amentum's JV-adjusted book-to-bill ratio, the pipeline for its Space Force and NASA contracts following the recent SFRC win, and the key drivers for revenue and EBITDA growth in fiscal 2026 across its various business segments.

Answer

CFO Travis Johnson clarified that the imputed book-to-bill, including joint ventures, was a strong 1.8x for the quarter. CEO John Heller and COO Steve Arnette detailed the significant opportunities in space, including the Golden Dome initiative and the Artemis II mission. Regarding FY2026, Heller highlighted strategic momentum in nuclear, space, and defense, while Johnson noted the company is ahead of schedule on deleveraging and margin expansion, positioning it well for future growth.

Colin Canfield asked for specifics on the Rapid Solutions divestiture, including the expected proceeds and valuation, and requested details on the quarterly book-to-bill ratio including joint ventures.

Answer

CFO Travis Johnson stated the Rapid Solutions divestiture has a sale price of $360 million, with expected after-tax proceeds of approximately $325 million. He noted these funds will accelerate deleveraging towards the company's goal of 3x net operating leverage by the end of FY26. For bookings, Johnson reported the Q2 book-to-bill was 0.9x on both a reported and imputed basis (including JVs), with the year-to-date imputed figure at a strong 1.2x, driven by Q1 JV awards.

Colin Canfield asked about the $200 million orders in progress, their expected materialization into backlog, and the anticipated revenue building blocks for next year, specifically for drones. He also inquired about the targeted R&D spend for air mobility, progress with government officials on military/municipal capabilities, and the timing of initial study contracts for the air mobility platform.

Answer

CEO Joe Burns confirmed solid visibility for $200 million in orders for the remainder of the year and 2026. CFO Mariya Pylypiv added that over $190 million in bookings are expected to be delivered in the next 18 months, with expanded sales efforts in Asia-Pacific and North America. She detailed strategic spending on drone R&D, new avionics products, training equipment, and air mobility R&D, noting 30% government funding confirmed for air mobility. Mariya Pylypiv further explained that approximately 17% of air mobility funding will be internal, 30-40% from customer advances, and the remainder from government support, with positive discussions on dual-use cargo drones. Joe Burns highlighted Jaunt's active engagement and funding by the Quebec government for a corridor project and the dual-use cargo drone development, mentioning applications for new Canadian military funding. Executive President of Investor Relations Dan Johnson noted the Phoenix facility's progress towards US drone manufacturing, with first RQ-35 drones assembled by year-end. Joe Burns also mentioned the Blue UAS certification program, expected in the first half of 2026, as crucial for US military programs.

Colin Canfield inquired about the $200 million in orders in progress, seeking clarification on when these orders are expected to materialize into backlog and how revenue building blocks, particularly for drones, are projected for the upcoming year. He also asked for a quantification of Air Mobility R&D spend for the current and next year, and updates on government engagement for military or municipal Air Mobility capabilities and potential initial study contracts.

Answer

Executive Chairman Chirinjeev Kathuria, CEO Joe Burns, and CFO Mariya Pylypiv responded. Joe Burns confirmed solid visibility for orders, reiterating the $200 million figure for the remainder of the year and 2026. Mariya Pylypiv specified that over $190 million in orders are expected to be delivered within the next 18 months, highlighting expanded BD and sales efforts in Asia-Pacific and North America, and strategic investments in R&D for drones, new Avionics products, training equipment, and Air Mobility R&D, with 30% of government funding for Air Mobility already confirmed. Joe Burns added that the Phoenix facility is now open for AS9100 production of drones and avionics, and Jaunt is actively engaged and funded by the Quebec government for a corridor project, with the cargo drone developed for dual use. Chirinjeev Kathuria noted the Phoenix facility's progress towards U.S. drone manufacturing, with first RQ-35 drones assembled by year-end. Joe Burns also mentioned the Blue UAS certification program is expected in the first half of 2026.

Colin Canfield of Cantor Fitzgerald inquired about the demand landscape for Arrow's drone pipeline, comparing the U.S. and European markets. He also asked about the growth drivers for the avionics segment, including partnerships with Joby and L3Harris, and sought clarity on the working capital outlook. In a follow-up, he asked about the company's strategy regarding alternative PNT (Position, Navigation, and Timing) and the distinction between GNSS and GPS.

Answer

CEO Joe Burns addressed the questions, stating that while Europe currently leads in drone revenue, U.S. demand is accelerating, particularly for small and medium tactical ISR drones. He highlighted that avionics growth is driven by both OEM integrations, like the Joby Aviation partnership, and retrofits. Burns also detailed the company's advanced alternative PNT capabilities, noting their systems can navigate in GPS-denied environments. CFO Dr. Maria Pilipiv added that working capital needs are expected to increase in the second half of the year to support drone and avionics production.

Colin Canfield of Cantor Fitzgerald inquired about the geographic demand mix for AIRO's drone pipeline, the primary growth drivers for the avionics segment including key partnerships, and the expected evolution of working capital. He later followed up with a detailed question on AIRO's alternative PNT technology (GNSS vs. GPS) and its role as a competitive differentiator.

Answer

CEO Captain Joseph Burns explained that while Europe currently leads in drone revenue, US demand is accelerating. He also highlighted avionics growth from both OEM integration, like the Joby Aviation partnership, and retrofits. CFO Mariya Pylypiv detailed an expected increase in working capital due to higher receivables and inventory buildup. In response to the follow-up, Burns elaborated on AIRO's advanced GNSS and alternative PNT capabilities, which are proven to work in GPS-denied environments and represent a significant growth area.

Asked about the drone demand pipeline comparing the U.S. and Europe, the growth drivers for the avionics segment including partnerships and alternative PNT technology, and the outlook for working capital for the rest of the year.

Answer

The company responded that drone demand is strongest for tactical ISR drones, with Europe currently leading revenue but U.S. demand accelerating. Avionics growth is driven by both OEM integration and retrofits, with the Joby partnership and advanced alternative PNT capabilities being key drivers. Working capital needs are expected to increase in the second half of the year due to higher receivables and inventory buildup for production.

Colin Canfield asked about AST SpaceMobile's supply chain relative to European counterparts, its capability to leverage economies of scale for additional frequency bands beyond S, L, and C-band, and the company's strategy for acquiring future spectrum or assets versus organic investment to achieve free cash flow positive status sooner.

Answer

Scott Wisniewski, President and Chief Strategy Officer, explained that AST SpaceMobile's platform is designed to tune across over 1,000 MHz of all 3GPP low-band and mid-band spectrum, making the incremental cost for additional spectrum marginal. He emphasized the company's focus as an American manufacturer based in Midland, Texas, partnering with MNOs globally, and prioritizing manufacturing, launching, and delivering broadband services using a combination of local and proprietary spectrum.

Colin Canfield from Cantor Fitzgerald asked about AST SpaceMobile's supply chain versus the European supply chain, its aperture for additional bands, and leveraging economies of scale. He also inquired about the company's strategy for its capital war chest, considering potential acquisitions of future spectrum or assets to accelerate free cash flow, versus organic investment in IP.

Answer

Scott Wisniewski, President and Chief Strategy Officer, and Abel Avellan, Chairman and CEO, emphasized that their platform is designed to capture over 1,000 MHz of software-defined, 3GPP-compatible spectrum across low and mid-bands, making incremental spectrum costs marginal. They reiterated AST SpaceMobile is a U.S.-based company manufacturing in Midland, Texas, focused on partnering with local MNOs globally. They stated their primary focus is on manufacturing and launching satellites at a rapid pace to deliver broadband services.

Colin Canfield of Cantor Fitzgerald questioned how technology partnerships affect spectrum acquisition and pricing. He also asked for the timeline on the competitive process for the growing government opportunity and how ASTS considers teaming with "neo-prime" defense contractors like Anduril.

Answer

Founder, Chairman & CEO Abel Avellan explained that ASTS's technology makes satellite spectrum more valuable by enabling its use with standard cell phones, creating a massive opportunity. President & Chief Strategy Officer Scott Wisniewski noted that government contract awards could occur this year. Avellan added that the technology's applicability to drones and vehicles opens up opportunities with various partners for both communication and non-communication use cases.

Colin Canfield of Cantor Fitzgerald inquired about the drivers of higher launch costs, the company's spectrum strategy regarding EchoStar and FCC sharing rules, and details about the new DIU government contract.

Answer

Executive Scott Wisniewski and CFO Andy Johnson explained that higher launch costs are due to an accelerated timeline to meet market demand and the impact of tariffs, prioritizing speed to orbit. CEO Abel Avellan detailed the dual-spectrum strategy, using MNO-partnered low-band for broad access and owned mid-band for capacity. Scott Wisniewski clarified the DIU contract is an incubator for various government agencies to test and accelerate use cases, with a potential value in the low tens of millions.

Colin Canfield from Cantor Fitzgerald inquired about the chipset engineering team's structure, the progression of non-GAAP OpEx, the ability to win government contracts, and the status of the Ligado deal.

Answer

CEO Abel Avellan clarified their proprietary ASIC chip is for satellites only and requires no handset modifications. CFO Andrew Johnson projected OpEx would remain consistent with Q4 levels, with falling R&D costs offset by investments in commercial functions. He also noted the $43 million government contract revenue is milestone-based and that the Ligado deal is 'tracking nicely' within the agreed-upon timeframe.

Colin Canfield asked about the valuation of Viasat's S-band spectrum, drawing comparisons to the SpaceX/EchoStar transaction and its implied value for 75 megahertz, inquiring if the deal was comparable, Viasat's preference for cash versus equity, and how management views the arbitrage opportunity of carrying such assets on the balance sheet. He also asked about demand signals for defense bookings beyond the U.S., particularly in Europe, and how the IRIS timetable aligns with national security risks, suggesting accelerated interest in new constellations and capabilities.

Answer

Chairman and CEO Mark Dankberg explained that spectrum valuation involves assessing its market utility, compliance with public interest obligations, and potential for value creation, either by Viasat or through coordination with others. He noted that direct comparisons to other transactions are difficult due to differing environments and that Viasat focuses on using its allocated spectrum to deliver value to customers and shareholders, while remaining open to better opportunities. Regarding defense bookings, Dankberg highlighted two main drivers: sovereignty (countries not wanting to depend on foreign entities for national security) and the need for specific effects like small, rapidly deployable, jam-resistant, and cybersecure terminals, as exemplified by Ukraine. He stated that these needs can be met through infrastructure sharing or geosystems, and these conversations are ongoing.

Colin Canfield posed a multi-part question regarding the valuation of Inmarsat shares, referencing a 'DAT Unlock' and organic Satcom business, and comparing Viasat's 75 MHz of S-band to precedent transactions like SpaceX/EchoStar. He asked about the company's preference for cash versus equity in spectrum deals, the management's view on arbitrage opportunities, and the incremental government demand beyond the U.S., particularly in Europe (IRIS2), and how it relates to national security risks and new constellation builds.

Answer

Mark Dankberg, Chairman and CEO, discussed spectrum valuation in terms of bringing it to market in modern ways, compliance with public interest obligations, and potential coordination agreements. He emphasized focusing on how Viasat can use its allocated spectrum to deliver value to end-users and shareholders, rather than speculating on dissimilar transactions. Regarding defense bookings, he highlighted two main drivers: sovereignty (countries not wanting to depend on foreign entities for national security) and the need for specific effects like small, rapidly deployable, jam-resistant, and cybersecure terminals, which can be achieved through various systems, including geosystems and infrastructure sharing.

Colin Canfield (referred to as Colin Cantino in the transcript) asked how TMT giants are shaping D2D conversations regarding capital and spectrum, how a shared infrastructure coordinator would approach pricing given recent market events, and if there was a timeline for an announcement.

Answer

CEO & Chairman Mark Dankberg used the cell tower analogy to explain that a shared infrastructure utility can attract third-party capital by being insulated from carrier-specific competition. He emphasized Viasat's technical approach is more productive and can cover more spectrum, which lowers costs for all participants. He declined to give a specific timeline for an announcement but suggested it was not far in the future.

Colin Canfield from Cantor Fitzgerald sought clarity on the expected revenue ramp from the ViaSat-3 F2 and F3 satellites, how to think about contracted revenue additions, and the building blocks for free cash flow in fiscal 2027.

Answer

Chairman and CEO Mark Dankberg explained that revenue will fill as platform counts and bandwidth usage per platform grow, rather than through pre-sold transponder backlogs. Chief Financial Officer Garrett Chase added that the 200 basis point margin expansion goal is a 3-year target driven by integration synergies. While declining to give specific 2027 guidance, he confirmed the key drivers for future free cash flow are EBITDA growth, a significant reduction in CapEx post-ViaSat-3, and disciplined working capital management.

Colin Canfield from Cantor Fitzgerald sought details on the $200 million CapEx reduction, particularly the launch savings for ViaSat-3, asked about the ramp-up of the Space Force PLEO award, and inquired about Inmarsat's role in the alternative Positioning, Navigation, and Timing (PNT) market.

Answer

CEO Mark Dankberg clarified that launch savings from a different launch vehicle configuration were a small part of the total CapEx reduction. CFO Garrett Chase added that the savings came from broader capital efficiency, timing deferrals, and synergy realization. Dankberg noted that for PLEO, Viasat is currently packaging partner LEO services for government applications and that the company is pursuing regional and augmentation opportunities in the PNT market to counter jamming threats.

Colin Canfield sought clarification on the building blocks for Kratos' projected 2027 revenue, potential upside from Marine Corps and Air Force CCA, and additional U.S. customers. He also asked about the impact of software partners on production volumes and the accretion dynamics and key IP technologies from the Orbit acquisition.

Answer

Eric DeMarco, Kratos' President and CEO, confirmed the multi-billion-dollar vision, noting that current forecasts exclude tactical production. He highlighted the Sentinel ground transporters, jet engine production (turbojets), and other classified programs as significant drivers. Mr. DeMarco explained that if software partners like Anduril and Castellian are successful, Kratos would participate through increased demand for engines and communication capabilities. Regarding Orbit, he emphasized miniaturization technology for unmanned systems as a key IP, enabling Kratos to participate in vast quantities of systems needing communication in challenging environments.

Colin Canfield asked about Kratos's 2027 revenue building blocks, additional U.S. customers beyond the Marine Corps and Air Force, the potential for production doubling, how software partners' growth could drive Kratos's production, and the key IP technologies acquired with Orbit.

Answer

Eric DeMarco, President and CEO of Kratos, confirmed a multi-billion dollar vision, noting current growth forecasts exclude tactical production. He highlighted Sentinel ground transporters and jet engine production as significant drivers, projecting Kratos could be a multi-billion dollar company, with tactical drones adding hundreds of millions incrementally by 2028. DeMarco explained Kratos participates in software partners' growth by supplying engines and platforms, and identified Orbit's miniaturization technology for unmanned systems' communication capabilities as key IP.

Colin Canfield of Cantor Fitzgerald questioned the potential production scale for the X-58 Valkyrie, the feasibility of doubling revenue in three years, the potential for a services-based model, and the company's approach to securing rare earth minerals.

Answer

CEO Eric DeMarco stated that current Valkyrie production capacity is 50 units per year, with a planned capability to expand to 100. He agreed that doubling revenue in three years is possible in an 'upside case.' He also noted that international partners currently prefer to buy aircraft and integrate their own systems, and that Kratos actively manages its rare earth mineral supply chain through rigorous internal and vendor checks.

Colin Canfield asked about the key factors and contracts that would contribute to bridging from mid-single-digit organic performance in 2025 to potentially high-single-digit organic growth in 2026, normalizing for shutdown impacts.

Answer

CFO Chris Cage stated it was too early for 2026 specifics but flagged defense systems, energy infrastructure, and a large intelligence community award as strong growth drivers. He also mentioned the impact of DOGE, the modest Varik divestiture ($40 million top-line), and the Antarctic support program exiting in 2026. CEO Tom Bell added that post-shutdown, he expects significant customer activity on programs like FAA, ATC modernization, Golden Dome, border security, and airport screening, which gained traction after the 1BBB law.

Colin Canfield asked about the key factors and contracts that will bridge Leidos from its current mid-single-digit organic performance to potentially high-single-digit organic growth next year, while normalizing for shutdown results.

Answer

CFO Chris Cage stated it's too early for specific 2026 guidance but highlighted defense systems, energy infrastructure, and a large intelligence community award as key growth drivers, along with opportunities from Golden Dome, air traffic control, and border security. CEO Tom Bell added that post-shutdown, he expects tremendous customer uptake and activity on these programs, with the team ready to respond as the future unfolds.

Colin Canfield of Cantor Fitzgerald sought a refreshed view on the company's multi-year growth and margin expansion outlook, asking specifically about accelerating civil growth and the potential for margin expansion beyond the updated guidance.

Answer

CEO Thomas Bell highlighted a robust $70 billion pipeline, with three-quarters being new or takeaway work, which should drive future growth. CFO Chris Cage expressed satisfaction with the raised mid-13s adjusted EBITDA margin guidance but was not yet prepared to commit to further expansion from that level, though he noted levers for improvement remain. He identified managed health services and FAA opportunities as key drivers for civil growth.

Colin Canfield from Cantor Fitzgerald asked about opportunities from the supplemental defense bill, the outlook for share repurchases after the recent ASR, and the company's strategy on portfolio divestitures.

Answer

CEO Tom Bell identified FAA modernization, border security, and the 'Golden Dome' missile defense shield as key opportunities. He also stated the $500M ASR completes most of the 2025 repo plan for now, and that only minor divestitures are being considered as the portfolio is well-positioned. CFO Chris Cage added that demand for unmanned maritime capabilities is at record levels.

Colin Canfield asked about Leidos's assumptions for the FY'26 defense budget request and how potential top-line increases might flow through to its programs.

Answer

CEO Thomas Bell responded that he has no firm expectations yet, but emphasized Leidos is focused on both capturing new opportunities and helping the DoD unlock savings through efficiency programs like Defense Enclave Services. He stated the company's growth pillars are based on enduring demand, independent of a specific budget top-line.

Colin Canfield asked about the potential takeoff value of Iridium, including a possible timeline for realizing its full value and identifying key value components that other partners might seek. He also inquired about a rank order of potential teammates, such as Apple, Amazon, Globalstar, or SpaceX, for future partnerships.

Answer

CEO Matt Desch highlighted Iridium's value in its broad experience, ecosystem, solutions, and growing market segments, including the U.S. government business, unique PNT technology, and leadership in IoT satellite services. He acknowledged market underappreciation and the pivot towards longer-term growth areas. Regarding potential partners, Mr. Desch noted it's an active time for discussions in the industry but refrained from signaling specific deals, acknowledging the presence of larger players with significant assets.

Colin Michael Canfield inquired about the potential timeline for realizing Iridium's full value, the key assets other partners might want to integrate, and a rank order of potential teammates (e.g., Apple, Amazon, Globalstar) for future partnerships.

Answer

CEO Matthew J. Desch highlighted Iridium's value in its experience, ecosystem, U.S. government business, and unique PNT technology. He noted that the market isn't fully appreciating their assets and that a pivot to more investment in long-term growth areas is prudent. He acknowledged active discussions in the industry but declined to rank potential partners or signal imminent deals.

Colin Canfield of Cantor Fitzgerald asked about the commercial growth strategy, particularly how to think about partnerships with large tech companies. He also inquired about the growth waterfall for the PNT business in the drone market and how Iridium maintains its competitive moat in PNT.

Answer

CEO Matthew Desch explained that the commercial growth model is expanding from proprietary solutions to standards-based products (5G/6G), which will open up a much larger market of terrestrial IoT players. He described government PNT growth as a 'stepwise function' based on regional deployments. He attributed the PNT moat to its global L-band LEO architecture, which offers unique advantages and has no capacity constraints, positioning it against mainly regional alternatives.

Colin Canfield from Cantor Fitzgerald asked about lessons learned from past economic shocks in 2008 and 2020, the company's total government exposure beyond direct contracts, and the pricing mechanics and strategic view of its PNT (Position, Navigation, and Timing) services in a national security context.

Answer

CEO Matt Desch recounted that Iridium's growth trajectory was largely unaffected by the 2008 and 2020 economic shocks due to the critical nature of its services. He estimated that indirect government business through commercial channels is likely in the single digits as a percentage of total revenue. Regarding PNT, he emphasized its unique global capability to protect against GNSS jamming, noting that interest from governments and commercial entities has been 'exploding' as the need for resilient timing and location services becomes more critical.

Colin Canfield of Cantor Fitzgerald asked how future constellation plans might interact with the $3 billion free cash flow target through 2030 and about the capitalization of R&D. He also sought clarity on the revenue growth dynamics with the large IoT customer beyond 2025 and how customers weigh national security in their purchasing decisions.

Answer

CEO Matt Desch clarified that current capitalized R&D is for the NTN Direct service, not a new constellation, which is a post-2030 consideration. He explained that the large IoT partner's shift to monthly plans creates short-term subscriber volatility but is expected to grow their user base and Iridium's revenue long-term. He affirmed that national security is a key strength, with Iridium deeply embedded in critical government solutions.

Colin Canfield inquired about the timeline for the National Security Space Launch Program Lane 1, the proposal strategy for the December window, and customer feedback on the transition from onboarding to initial contract awards. He also asked about the velocity of the $135 million tactically responsive space supplemental and the outlook for near-term awards.

Answer

CEO Jason Kim indicated that the first Eclipse launch for NSSL Lane 1 is anticipated in late 2026, with a proposal submission planned for late this year and first task orders after Q1 2027. Regarding the supplemental, Mr. Kim expressed positivity, citing past Victus Knox success and subsequent contracts, emphasizing the goal to store Alpha rockets at Vandenberg for rapid, 24-hour responsive space launches.

Colin Canfield requested an update on the timeline for the National Security Space Launch Program Lane 1, including the proposal strategy for the December window and customer feedback regarding the transition from onboarding to initial contract awards. He also inquired about the velocity of the $135 million supplemental budget for Tactically Responsive Space and the potential for near-term awards.

Answer

CEO Jason Kim stated that the first launch for NSSL Lane 1 is anticipated in late 2026, with a proposal to be submitted later this year. Initial task orders would follow after Q1 2027, post-first launch. Regarding Tactically Responsive Space, Mr. Kim expressed positivity about the $135 million supplemental, citing past Victus Knox experience and subsequent Victus Hayes and Victus Soul contracts, aiming to store Alpha rockets at Vandenberg for rapid 24-hour launches to deter rivals.

Colin Canfield inquired about the timeline for NSSL Lane 1, the team's strategy for the upcoming proposal, and customer feedback on the transition from onboarding to initial contract awards. He also asked about the velocity of the $135 million supplemental budget for the Tactically Responsive Space program and the potential for near-term award unlocks.

Answer

CEO Jason Kim stated that a credible offering for NSSL Lane 1 anticipates a first launch in late 2026, with a proposal submission planned for late this year and first task orders expected after Q1 2027. Regarding Tactically Responsive Space, Mr. Kim expressed positivity about the additional $135 million, citing Firefly's VICTUS NOX experience and subsequent contracts for VICTUS HAZE and VICTUS SOL, emphasizing readiness for more 24-hour timeline launches.

Colin Canfield of Cantor Fitzgerald inquired about the balance between accounting controls and engineering complexity following the Q2 EAC charge, the conditions required to reinstate adjusted EBITDA guidance, and the due diligence process for the Edge Autonomy acquisition, particularly regarding its future free cash flow potential.

Answer

CEO Peter Cannito explained that the volatility of firm-fixed-price development contracts can lead to EAC adjustments due to unforeseen technical challenges. He stated that this variability, combined with government budget uncertainty, led to the withdrawal of EBITDA guidance. CFO Jonathan Baliff affirmed that accounting controls have improved and that the Edge Autonomy acquisition, which has historically been free cash flow positive, is expected to continue this trend and reduce the company's overall exposure to developmental contract risks.

Colin Canfield asked about the expected free cash flow cadence for organic Redwire through 2025 and the mechanics of recovering costs from unfavorable Estimate at Completion (EAC) adjustments.

Answer

Jonathan Baliff, CFO, stated that cash flow is expected to improve as delayed revenues are recognized and milestone payments are received. Peter Cannito, CEO, explained that EACs are sometimes 'growing pains' from developing novel technologies. He compared it to the ROSA platform, which had early variability but is now stable, suggesting costs from development can be recouped in future production-phase orders.