Jan-Frans Engelbrecht

Jan-Frans Engelbrecht asked about Rocket Lab's high-level thoughts on the PWSA program, particularly the shift in focus towards the Tracking Layer and the future of the Transport Layer, including the feasibility of commercial variants like Starshield. He also inquired about Rocket Lab's plans for optical terminals, specifically if Geost or OSI could develop them as an alternative to Mynaric.

Answer

CEO Peter Beck confirmed the intentional shift to the more difficult and valuable Tracking Layer, which is critical for programs like Golden Dome. He stated that Rocket Lab has not seen evidence of the Transport Layer going away and believes a dedicated Transport Layer makes more sense for SDA's objectives due to interoperability requirements. Regarding optical terminals, Peter Beck noted that while Geost has developed some and OSI provides optics, Mynaric stood out as having the "absolute best" technology, making acquisition a faster path than in-house development.

Jan Engelbrecht inquired about the exportability of BlueHalo's product offerings, such as the LOCAST system and space capabilities, given Europe's defense spending plans, and whether Red Dragon's Blue UAS clearance enables immediate export.

Answer

Wahid Nawabi, Chairman, President, and CEO, highlighted BlueHalo's complementary capabilities, including the $1.5B+ Space Force program, the leading LOCAST directed energy counter-UAS, and Titan RF solutions, all with multi-billion dollar market potential and international demand. He confirmed that Red Dragon's Blue UAS certification facilitates easier international sales and domestic government purchases. He also clarified that their laser comms and phased arrays address GEO, MEO, and LEO orbits, with a specific 'Panther' product for LEO/MEO, emphasizing the multi-billion dollar market for secure laser communication.

Jan Engelbrecht asked about the exportability of BlueHalo's product offerings, such as the LOCAST system and space capabilities, given Europe's spending and industrial base limitations. He also inquired if Red Dragon's placement on the Blue UAS cleared list implies immediate exportability or if it's primarily a domestic opportunity.

Answer

Chairman, President, and CEO Wahid Nawabi stated that BlueHalo's solutions, including the space domain's phased array technology, LOCAST directed energy counter-UAS, and Titan RF solutions, are highly complementary and have significant international market potential. He confirmed that Red Dragon's Blue UAS certification facilitates easier international sales and government procurement. In a follow-up, Mr. Nawabi clarified that AeroVironment's laser communications solutions address both geosynchronous (GEO) and low Earth orbit (LEO) satellites, with products like Panther designed for LEO/MEO, positioning them as leaders in a multi-billion dollar market.

Jan Engelbrecht asked about the exportability of BlueHalo's product offerings, such as the LOCUST system and space capabilities, given Europe's defense spending and industrial base. He also inquired if the Red Dragon's Blue UAS cleared list placement implies immediate exportability or primarily a domestic opportunity.

Answer

Chairman, President, and CEO Wahid Nawabi highlighted BlueHalo's complementary capabilities, including the LOCUST directed energy counter-UAS solution and space laser communications, as multi-billion dollar long-term opportunities with strong international potential. He confirmed that Blue UAS certification facilitates easier international sales and domestic procurement for Red Dragon.

Jan-Frans Engelbrecht of Baird asked about the impact of the recent reconciliation bill on potential orders and inquired about the revenue recognition timeline for the BWRX-300 SMR project.

Answer

President, CEO & Director Rex Geveden confirmed the reconciliation bill was beneficial, with funding that supports key programs like defense enrichment and advanced reactors (Pele). For the BWRX-300, he reiterated the opportunity is around $100 million per reactor, with revenue recognized evenly over a roughly four-year period due to the long-lead nature of the components BWXT manufactures.

Jan-Frans Engelbrecht of Baird asked if strong defense budget signals increase DRS's confidence to self-fund more product development and also requested clarification on the interest expense cadence for the rest of the year.

Answer

CEO William Lynn stated DRS will continue its existing path of increasing CapEx and R&D to proactively develop capabilities for customers. CFO Michael Dippold reinforced this, noting that R&D spend increased 40% year-over-year in Q1 to support key initiatives. Regarding interest expense, Dippold indicated a likely tailwind for the full year due to a strong cash position, resulting in a lower interest burden than the prior year.

Jan-Frans Engelbrecht inquired about CACI's involvement in the GSA's cost-savings review and asked about the company's positioning and opportunities in the counter-unmanned systems (counter-UAS) market.

Answer

CEO John Mengucci confirmed CACI is not on the GSA's top 10 list and has not been formally contacted, but emphasized that CACI's strategy of delivering outcomes via agile software development inherently provides the cost savings the government seeks. On counter-UAS, he highlighted that CACI has over 5,000 systems deployed with confirmed kills and is well-positioned for future opportunities like the Golden Dome initiative and border security applications.

Jan-Frans Engelbrecht inquired about CACI's position on the Navy's Spectral contract following the Azure Summit acquisition and asked about expected changes to the company's contract mix (fixed-price vs. cost-plus) in the near future.

Answer

CEO John Mengucci detailed that Azure Summit is prime on a key Navy program that CACI's Spectral program builds upon, creating a dominant combined offering for the next decade. He also noted that while technology sales from acquisitions like Azure Summit are typically fixed-price, the EITaaS program is ramping up on a time & material basis, creating a mixed effect. CFO Jeffrey MacLauchlan added that the EITaaS T&M revenue is expected to continue growing.

Jan-Frans Engelbrecht of Baird asked about Kratos's position in the space market amid a government shift towards fixed-price contracts and requested more details on the Marine Corps aviation plan involving the Valkyrie drone.

Answer

CEO Eric DeMarco clarified that Kratos is comfortable with fixed-price production contracts but wary of fixed-price development work. He emphasized that the national security space opportunity pipeline is accelerating dramatically. Regarding the Marine Corps plan for Valkyrie, he stated he could not provide details beyond the prepared remarks due to customer confidentiality.