Question · Q2 2026
Kyle Baker asked for clarification on how the persistence of lower-margin backlog into FY2027 impacts margin expectations, and the progress towards a normal baseline for net EAC adjustments, which have remained around $4 million-$5 million quarterly.
Answer
Chairman and CEO Bill Ballhaus and EVP and CFO Dave Farnsworth clarified that the impact of lower-margin backlog diminishes significantly by FY2027 as it's replaced by higher-margin bookings. They noted that EAC adjustments are now in a 'normal course range' and are not expected to hinder achieving target margins.
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