Gross Margin Improvement
Q: Gross margins went up to 48%; will this continue?
A: We achieved 48% gross margins this quarter, which is impressive. We've been targeting these numbers and ideally want to maintain them. While we won't always be able to do this—it depends on the mix of work—we're working hard to achieve it.

R&D Spending
Q: R&D costs increased; will this continue or come down?
A: R&D spending is up to about 10% of revenue this year, significantly higher than last year when we probably underspent. We anticipate maintaining this level over the next couple of years as it reflects where we need to be.

Government Funding Impact
Q: How is government budget affecting business in coming months?
A: There's always frustration with government funding; it's never as fast as we'd like. The recent election results give hope for an actual budget soon, which will help programs move forward. While some delays may push business further out, we believe the space market will grow for the foreseeable future. We have a good handle on the next few months and think we're in really good shape.

Prospects for GEO Contracts
Q: What's the outlook for more GEO contracts and upgrades?
A: We anticipate a significant amount of work in GEO contracts over the next 6 to 9 months. We have proposals out to multiple primes on several programs. These are important for us to achieve good margins and position ourselves for the small satellite market.

Involvement in R-GPS Program
Q: Are you working on R-GPS with Astranis?
A: Yes, we're very familiar with Resilient GPS (R-GPS) and are actively pursuing it. Although funding is limited, we're working with three of the four government-funded prime contractor teams, including Astranis. If the program moves forward with additional funding, we're in a good position to be involved.

Zyfer Unit Performance
Q: How is the Zyfer unit performing?
A: Zyfer is doing pretty good, and we're happy with their performance. We see their business as solid and profitable, with anticipated significant growth, though timing is challenging to predict.

Zyfer R&D Priorities
Q: Any new R&D priorities at Zyfer?
A: Yes, we're focusing on developing smaller, cheaper versions of traditional products, and adding capabilities for navigation in the absence of GPS, like inertial navigation and alternate means. We're potentially incorporating quantum sensor technology into Zyfer products in the future.

Revenue from Quantum Sensing
Q: Any revenue this quarter from quantum sensing?
A: There's not a significant amount of revenue this quarter from quantum sensors.

LEO as Future Focus
Q: Is LEO the future of the company?
A: LEO is part of our focus but not the whole story. We're looking at small, low-cost satellite applications not exclusive to LEO. We're also involved in GEO and MEO orbits, including geosynchronous satellites and GPS systems. The LEO environment will get crowded over the next decade, so we're diversifying our efforts.

Technical Challenges in Smaller Satellites
Q: What are the challenges in making smaller, cheaper satellites?
A: The main challenge is adapting terrestrial products to survive the space environment due to radiation. Using smaller, cheaper digital electronics is difficult in space because of radiation effects like single event upsets. We're working on solutions like radiation-hardened parts and adequate testing to make products that survive 3 to 5 years in low Earth orbit.