Net Revenues

+1.5% (from $208.26 million in Q3 2024 to $211.36 million in Q3 2025)

Modest revenue growth is observed, reflecting stable customer demand and incremental order increases that build on previous period momentum, where efforts in program delivery and market positioning in Q3 2024 laid the groundwork for slightly higher revenues in 2025. " "

Cost of Revenues

-8% (from $167.62 million in Q3 2024 to $154.25 million in Q3 2025)

The reduction in costs indicates improved production efficiencies and cost management. Initiatives taken to streamline production and control expenses in the previous period contributed to a lower cost base in Q3 2025 despite similar revenue levels. " "

Gross Margin

Approximately 40% increase (from $40.64 million in Q3 2024 to $57.11 million in Q3 2025)

The significant improvement in gross margin is tied to the lower cost of revenues and a more favorable product mix/pricing strategy compared to Q3 2024, where earlier higher production costs adversely affected margins. " "

Operating Expenses

-13.7% (from $86.30 million in Q3 2024 to $74.45 million in Q3 2025)

The reduction reflects ongoing cost-cutting measures and streamlined operations. The lower spending in R&D and SG&A—initiatives that began in Q3 2024—helped bring operating expenses down in Q3 2025. " "

Operating Loss

Narrowed from $45.66 million in Q3 2024 to $17.34 million in Q3 2025 (improvement over 60%)

The dramatic reduction in operating loss results from the combination of higher revenues, improved gross margin, and lower operating expenses. This reflects continuity in initiatives from the previous period aimed at operational efficiency and cost discipline. " "

Net Loss

-57% (from $44.57 million in Q3 2024 to $19.17 million in Q3 2025)

Improved performance is evidenced by a notable reduction in net loss. Enhanced operational profitability, margin expansion, and controlled expenses compared to the prior period contributed to this decline. " "

Operating Cash Flow

Q3 2025 provided $29.97 million (no explicit YoY percentage provided)

The strong operating cash flow demonstrates improved liquidity and efficient working capital management, which builds on prior period efforts to optimize collections, billing cycles, and cash conversion processes. "

Balance Sheet Snapshot

Q3 2025 total assets at $2,414.42 million, shareholders’ equity at $1,451.09 million, cash balance at $269.82 million

The balance sheet numbers reflect a strengthened financial position. An improved cash balance and solid equity levels indicate effective capital management and operational gains realized from initiatives begun in the previous year. "

Revenue Growth

FY 2025

Expected to approach mid‑single digits year‑over‑year " "

Expected to approach mid‑single digits "

no change

Adjusted EBITDA Margins

FY 2025

Expected to remain in the low double‑digit range " "

Expected to remain in the low double digits " "

no change

Free Cash Flow

FY 2025

Expects to be cash flow positive with second‑half near breakeven " "

Year‑to‑date free cash flow of $85M above prior expectations; Q4 near breakeven resulting in full‑year free cash flow ahead of prior expectations "

raised

Adjusted EBITDA Margins

Q4 2025

Q4 margins expected to be the highest of the fiscal year " "

Q4 margins expected to be at the highest level, approaching mid‑teens " "

raised

Shift Toward Production Contracts

Q4 2024: 80% of firm fixed price bookings were production-related. " " Q1 2025: Over 90% production mix and an 80-20 development-to-production shift discussed. " " Q2 2025: Emphasis on an 80% production mix along with follow‐on awards. " " "

Q3 2025: Over 80% of trailing 12‐month bookings were production in nature, with significant production contract awards (e.g. $40 million contract, $20 million follow‐on). " " "

Consistent emphasis on transitioning from development to higher‐margin production contracts with a steady mix shift over time.

Margin Expansion Potential and Operational Efficiency Improvements

Q4 2024: Addressed margin challenges from legacy low‐margin development work and cost‐reduction initiatives. " " Q1 2025: Mentioned low double‐digit adjusted EBITDA margins, margin improvement via new higher‐margin bookings, and free cash flow targets. " " " Q2 2025: Discussed progressing backlog margin by replacing lower‐margin contracts with new targeted awards and improved free cash flow performance. " " "

Q3 2025: Focus on achieving adjusted EBITDA margins in the low to mid‐20% range supported by backlog margin improvement and operating leverage; free cash flow performance also improved. " " "

Steady focus on margin improvement and operational efficiency, with ongoing efforts to replace legacy contracts with higher‐margin production contracts and enhanced cash flow conversion.

Revenue Sustainability Concerns

Q4 2024: Highlighted timing issues with material receipts and a strong book‐to‐bill ratio (1.22) despite minor revenue dips. " " Q1 2025: Noted pull‐forward effects from Q2 revenue, resulting in a sequential dip risk but optimism around exit run rate. " " Q2 2025: Addressed pull‐forward of $30 million, a trailing 12-month book‐to‐bill ratio of 1.12, and acknowledged lumpy quarter‐to‐quarter order flow. " "

Q3 2025: Described a pull‐forward of approximately $30 million from Q3 into Q2, a quarterly book‐to‐bill ratio of 0.95 (though 12-month ratio remains strong at 1.1), and stressed long‐term revenue sustainability. " " "

Ongoing short‐term variability caused by pull‐forward effects and quarterly fluctuations, while management remains confident in long‐term revenue sustainability.

Challenges from Legacy Lower‐Margin Backlogs

Q4 2024: Legacy low‐margin development programs and adverse EAC adjustments were noted as a drag on margins. " " " Q1 2025: Acknowledged that legacy lower‐margin backlog was impacting overall margin performance with optimism for improvement via new accretive bookings. " " Q2 2025: Emphasized gradual replacement of lower‐margin contracts with new targeted awards, though timing for full replacement remains dynamic. " " "

Q3 2025: Confirmed that lower‐margin legacy backlogs will take several quarters to burn off, with new higher‐margin bookings gradually improving the overall backlog margin. " " "

Persistent challenge with consistent efforts to gradually replace low‐margin backlog, indicating a slow but steady improvement in margin profiles.

Resolution and Ramp‐Up of Common Processing Architecture

Q4 2024: Reported significant progress in resolving technical issues and ramping up CPA, with planned full‐rate production in H1 FY ’25. " " " Q1 2025: Detailed resolution of CPA challenges, systematic corrective actions leading to follow‐on orders worth over $50 million. " " Q2 2025: Focused on resolving technical risks and ramping up to full production capacity, unlocking new competitive awards. " " "

Q3 2025: Reported a $40 million production contract in CPA and highlighted ongoing production ramp‐up with additional follow‐on awards, reinforcing strong customer demand. " "

Clear progress and improvement: The CPA programs have evolved from technical challenges to a robust ramp‐up phase, unlocking new bookings and reinforcing competitive differentiation.

Emergence of High‐Growth Subsegments

Q4 2024: Emphasized mission‐critical edge processing as a key strategic focus with significant production orders and development awards in areas such as sensors, electronic warfare, and avionics. " " " Q2 2025: CEO highlighted high-growth subsegments like mission-critical edge processing as drivers in the defense electronics Tier 3 market with growth above 5–6%. " " " Q1 2025: Brief mentions of leadership in mission-critical processing and alignment with customer priorities in growth areas. " " "

Q3 2025: The Q3 call did not explicitly mention high-growth subsegments such as mission-critical edge processing. " "

Reduced explicit emphasis in Q3 despite strong focus in earlier periods, suggesting a possible strategic shift or integration of the topic into broader production themes.

Forecasting and Guidance Uncertainty

Q4 2024: Discussed qualitative factors impacting FY ’25 outlook such as development program completions, CPA ramp‐up, and backlog margin transitions without formal guidance. " " Q1 2025: Touched on pull‐forward effects impacting quarter-to-quarter revenue with uncertainty about sequential performance. " " Q2 2025: Detailed pull‐forward revenue shifts, an updated mid-single-digit growth outlook, and margin improvements amid timing challenges. " "

Q3 2025: Provided qualitative outlook with expectations of mid-single-digit revenue growth and improved margins, while acknowledging inherent uncertainties from timing and backlog dynamics. "

Consistent discussion of uncertainty factors with evolving detail; while all periods mention timing challenges, the current period maintains a relatively stable tone with clear targets despite acknowledged uncertainties.

Evolving Backlog Dynamics

Q4 2024: Reported a record backlog of $1.3 billion (up 16% YoY) with 80% production-related bookings, while noting a lower overall backlog margin due to legacy development programs. " " " " Q1 2025: Highlighted a record backlog above $1.3 billion and a strong production focus with a 1.21 book-to-bill ratio, indicating a shift toward higher-margin programs. " " " Q2 2025: Emphasized a record backlog of $1.4 billion and a trailing 12-month book-to-bill ratio of 1.12, with a clear shift toward a higher production mix. " " "

Q3 2025: Reported a backlog of $1.34 billion with significant new production contracts and a quarterly book-to-bill dip (0.95) against a healthy 12-month ratio of 1.1, confirming the ongoing transition toward a production-focused mix. " " "

Consistent evolution from record backlog achievements to a deliberate shift toward high-margin production contracts, reinforcing the company’s strategy to improve margin profiles over time.