AeroVironment Inc (AVAV) September 2026 Conference Transcript

Noon, everyone. My name is Sheila Kayalu with the Jefferies Aerospace Defense and Airlines Equity Research Team. Thanks so much for joining us for our aero environment fireside chat with Wahid Nawabi, who's chairman and CEO, and Sean Woodward, EVP and CFO. Thank you both for being here, especially in light of your stock being up 10% this morning on solid results. So always a much easier fireside chat when results are good. She does this every day. There you go.

A little cooler.

There you go. So upside from year only. You know, great results on fiscal Q1 from a revenue and EBITDA perspective beating, but maintaining your fiscal 27 guidance, how do we think about the puts and takes and all that?

Thank you, Sheila. Thank you, Jeffries, for having us. Obviously, we had a fantastic quarter, not even a good quarter, but a fantastic quarter. There's three main areas that we were focused on, making sure that what we expected in terms of our plans that we deliver financially, which we did, and we met or exceeded pretty much almost all of our metrics financially. The second one was to make sure that we make strategic progress on the milestones that takes the company to the long-term plans that we unveiled in June, which has a pretty solid, not aggressive, but realistic organic growth, both in terms of top and bottom lines. And then third was also that we're really scaling a whole bunch of different products and franchises to get it ready for, you know, significant growth over the next four or five years because we're at an inflection point and expanding capacity in several of our facilities. And I think we achieved those goals and surpassed some of those goals based on our own plans as well. So overall, a great quarter. We're in a very, very good position. I say this not lightly but very seriously. that decade-and-a-half time that Sean and I have been with the company, the prospects for growth and value creation has never been better. We've got lots and lots of momentum behind us, we're in the right categories, regardless of what happens to the budgets within the U.S. D.O.W. or internationally, we're in the right categories with the right solutions that's been battle-tested, validated, and we've got the production capacity, and we're scaling, and we can deliver now, and they're very affordable. Those four or five ingredients is ideal scenario for growth and focus for the department and our allies.

That's great to hear. And one of the other things is your recent awards have increased your revenue visibility to 86% of the full year guidance. How do we think about what remains unbooked and execution dependent for the 27 guide?

Sure. Yeah, 86% quarter one visibility is a fantastic start to the year. Last year, looking at our visibility at that same time, we were at 82 percent. We ended the year pretty strong last year, and the prior year at 80 percent visibility. So, sitting at 86 percent gives us a very strong confidence that we're going to be able to execute to our fiscal targets that we have. In terms of the remaining 14 percent, we have multiple different opportunities that we're tracking pretty much across our portfolio. There's multiple different opportunities coming through that we are tracking closely and obviously we'll announce and provide that information as additional awards come through.

Great. And the cadence still calls for about 45% of revenue and one-third of EBITDA on the first half. Can you maybe unpack some of the Q2 EBITDA drivers, EBIT margin drivers, and specific mix and volume impacts there?

Sure. Yeah, you're right. We continued with our 45-55 revenue split, first half, second half, and one-third, two-thirds on the EBITDA. We see the second half of the year really being driven by higher sales volume, a little bit more favorable sales mix, some of these key awards that we just announced, including the E-Hell Award and an International Directed Energy Award, those will ramp up from a revenue standpoint in the second half of the year, which has a little bit better margin profile than we've had in that segment, too, in the SEDE segment. So, we should see some improvements in the second half of the year, driving the EBITDA as the two-thirds in the second half of the year. In terms of the second quarter, we're still maintaining a 45 percent revenue for the first half of the year, and one-third on the EBITDA. A little bit of a sales mix and some ramp-up of new products coming to the market, which will have a little bit of pressure on our EBITDA, and some increased investments that we continue to plan to make this fiscal year will align to those targets.

Can we maybe talk about, can we maybe discuss bridge investors from the backlog to the broader opportunity set? How do we think about what the opportunity set looks like remaining across Switchblade, FMS and Titan capacity?

Sure. So, in terms of additional orders and backlog conversion? Yeah. So, we have, you know, $1.5 billion of funded backlog. That's going to convert, you know, 86% is going to convert this year. We're going to bring that into next year as well. Additional orders that we're tracking are going to convert to the second half of the year revenues. We've gotten some key awards on Titan. We announced a $80 million delivery order on a $500 million contract award for the domestic shield program. Those are going to convert to revenue this fiscal year. They're in our guide. And EHEL and the international LOCUS are also part of our guide this year and will convert to revenue partially this year. And that's going to continue on for the foreseeable future in the next few years.

Great. And just on Switchblade, the Army IDIQ for $990 million while the international vehicle has not yet been utilized. How do we think about key milestones on the international vehicle and potential for any additional Army add-ons?

Yeah, so we just announced a delivery order, I think it was 12 for the Army, $51 million that we got just in the last quarter or so. So that's continued demand that we're seeing on the $990 million contract. We still have some room remaining on that contract vehicle to support additional directory requirements for the loading munitions. And we have multiple different FMS cases as well as direct commercial sale cases for our switchblade product in the pipeline, all tracking as scheduled and hopefully be awarded this year. And of course, we'll announce those as soon as we can. So multiple different FMS cases are working their way through the system.

Great. I guess just one more, as I think about the demand and backlog outlook, book to bill was 1.5. How should we think about just the lumpiness going forward that's always been a watch area for investors and the sustainability of the demand? But I think Maybe if you could talk about the demand metrics, too, across directed energy, counter UAS, and loitering munitions.

Yeah, so we had a great book-to-bill of 1.4 in quarter one, and our last 12 months are at 1.5, which is fantastic. It is lumpy. The business doesn't always have a steady order flow. There are certain quarters that are better than others. We're very happy with our first quarter at the 1.4 book-to-bill ratio. We'd love to continue with that, but we know the business, there is some lumpiness in the cycles. There's been a lot of pent-up demand, a lot of dollars that were waiting to be allocated from the GFY26 budgets. We've been seeing that go through. We thought that was going to happen on the last call. We thought the summer was going to increase order activity, and we saw that play out as the orders were coming through, through our quarter one as well as into the first quarter or second quarter that we've announced so far.

Can you maybe talk about Lotus production and firm fixed price there? Maybe backing up, how do you think about locust demand overall? and I know you discussed it in the June Analyst Day, and how do we think about the revenue contribution this year?

Sure. So, Locus went from, you know, seven years ago beginning the development. Handfuls of systems have been built over those seven years, demonstrated on ships, on land, the southern border, in war zones. It's proven its capability, but it's been a very low-rate volume build so far. We are now investing in our New Mexico facility in Albuquerque, where we're putting $30 million to build out that production facility to scale the directed energy. That's going to allow us to execute on the e-health program. It's going to allow us to execute on the international award that we received as well as additional volume. That e-health program is going to be over a multiple-year window. It's roughly a four-year program. We expect demand both domestically as well as internationally to increase for the locust product as the Army has put that seal of approval that they've awarded it to us. So we're building up the capacity to support far greater than the current volume, up to roughly half a billion dollars a year type of volume for the Locust Directed Energy.

And as you think about Locust, the 500 million of annual franchise opportunity, how do you think about, you know, the competitive landscape there and, you know, potential other service sales? Would it only be the Army? How you could think about that?

So, I mean, this particular win, coupled with the international win, I believe it's an inflection point for this business, for this product line. If you go back five-plus years ago when the Ukraine conflict started, loading munitions and one-way attack drones was, you know, nobody expected it to be, or generally speaking, in the public investor community and in the militaries, how big of a role it's going to have in the war. And that has changed the paradigm, and that's why it's close to three-quarters of a billion-dollar business for us to pass forward five years from then. I believe that the locus directed energy solution is in a similar inflection point with possibly a bigger market opportunity globally over the next five to ten years. The U.S. military has been chasing and investing in directed energy systems for over 30-plus years, three-plus decades. and no one's been able to actually solve the problem reliably and effectively with a solution that's affordable, that's practical, that's resilient, that is also with a high level of reliability and availability. We've done that. Our system is in the fight, as Sean mentioned earlier, in different theaters around the world, including the southern border, and the army has been convinced now. And that's why they awarded us this half a billion dollar, the largest production contract for laser weapon systems in the history of the department. And so I believe that these two awards are going to start the knee in the curve, where more and more services are going to look at procuring these things, protecting sites. We're very vulnerable in a lot of different ships that it's in the Central Command in the Middle East as well as in Asia-Pacific. And then the economics of the current solution set doesn't work out. Every time Iran, for example, fires a $150,000 Shahid, we use a million to $10 million missile to defeat one. We just don't have the battery, the depth of magazine, or the economics to be able to sustain that kind of a conflict if it were to go further with a larger adversary. So directed energy is really the holy grail when it comes to that type of a defensive mechanism. And the solution is developed for the U.S. Army, the e-health program and X3 Locust, to address Group 1, 2, and 3 drones effectively. And as he said, it's mobile systems. It can go on ships. It can go on land, stationary. And it takes the cost equation to less than $10 a shot, from millions of dollars a shot to less than $10 a shot. And the second thing is it gives you, as long as you have electricity, it gives you unlimited magazine. It means you can keep shooting this. So adversaries will lose that equation or that challenge if they were to compete with drones and lethal drones with the LOCUS system. That's why I believe that the application for this is massive. And we're the first company that's done that. That's why we're scaling manufacturing. Historically, of any of our product franchises, when we get a very strong, validated acceptance with the U.S. Army or U.S. military, followed by especially an international award, the franchise adoption rate just takes off. It's happened to us half a dozen times in our history. Raven, Puma, P550 now, Jump 20, Switchblade 300, Switchblade 600. This is something that we know how to do. We've done it several times in our history. So I feel very confident that fast forward this scenario a few years from now, it could be as big as a half a billion to a billion dollar plus business for Davey. And it's also we're designing, we've designed the product to be a commercially viable product. So we sell it as a firm fixed price commercial product. That's why we were able to actually successfully get a DCS sale, direct commercial sale with a national ally. That also is the first time in the history of the Department of War in the United States where U.S. has allowed a supplier like us, anybody, to sell and export a laser weapon system for military applications to a foreign country. It has never happened in the history of the Department. So I think these are significant milestones in the overall trend of, you know, aggressive adoption over the next several years.

I have a few follow-up questions, if that's okay. Can you talk about Locus X3? So as an Army platform, it sits on top of an armored vehicle. How could you expand it to potentially other services, and what differentiates it versus its competitors?

So there's lots of differentiators in our solution versus everyone else's. there's lots of people that are chasing this we really a few things that's really important number one we focused on the sweet spot of the market a lot of players are going after much higher kilowatt power that's like giving somebody bigger and more powerful bullets but they don't know how to aim at the target so giving somebody more bullets or bigger bullets does not really solve the problem if somebody's spraying the shots everywhere if i were to use that analogy the secret sauce to our system is that we are able to perfect the ability for a moving vehicle, such as a Humvee or a striker vehicle, armored vehicle, to be able to go in an uneven pavement at around 20, 30 kilometers per hour, detect 360 degrees around it, you know, just real time, any type of drone from group one to three, and then aim at it and then basically zap it down within three to five seconds. And do that every few minutes as you reload and you recharge. That tracking, targeting, and control hardware and software algorithm is something that we've been perfecting for a lot of lots of years. Now, this base gives us the ability to expand the product line also at higher kilowatts and at lower kilowatts for a variety of other applications. In addition to that, the way X3 is designed, not only can you detect while you're on the move, you can also hit and defeat drones while you're on the move. That makes it incredibly compelling and powerful. It means you don't have to stop to do that action of actually hitting the drone. And lastly, we have done many tests with our customers, including the U.S. Navy, onboard aircraft carriers, ships, where they have given us – the latest one was we were given 17 real targets on a real mission with the U.S. Navy on a ship, George W. Bush, I believe, in Norfolk, where they give us 17 different types of real targets, and our system hit 17 out of 17. 100% success rate. And so far, the success rate of this product in the field in terms of its availability also is very high. There are very few systems in operation, and our customers just keep moving them around because it's in such high demand. Last piece of data. Department of Homeland Security and Customs and Border Patrol deployed some of these systems on the southern border. They just published some stats on this, that the success of Locust has been so phenomenal that the drug cartel drone traffic over the southern border has decreased by 70% plus. 70% plus. And it just shows the power of this type of a solution set in the technology that it has. And so we're really focused on this. It's not the only one. we're very fortunate because we have a half a dozen of these growth opportunities in our portfolio. But I think Locus is going to be very unique because we've got a solution set that has a moat. It's very effective. And our customers have already pushed the I Believe button. And we're scaling production and we can deliver them at scale today.

And as you think about the international expansion, you mentioned that these franchise programs tend to come in waves. And once you get one under the belt, more will go forward. How are you thinking about this international opportunity being tested in the timeline of potential other workers?

Yeah. So, I mean, historically, when we get adoption with the U.S. military and the U.S. government allows us to export and sell them to allies, the momentum picks up very quickly. Because, look, the world is not a safe place. Think of all the different theaters around the world, the Middle East, Straits of Hormuz, Eastern Europe, Mediterranean Black Sea, Mediterranean Sea, Asia Pacific, lots of these places, Gulf of America, Latin America, there's lots of places where systems like this could be dramatically effective and helpful to the needs of our customers. And so once the government gives them the nod that this is validated, it, and I believe buttons pushed. I mean, we're in multiple active shooting wars around the world, and it's not a safe place, right? And you see drone attacks in places like the Middle East, where Iran fires a thousand plus of these drones in a week, and basically this just drives havoc into many countries' economies, let alone the global markets. So it's not a small little deal that we're talking about. This is something that is going to be very seriously, I believe, observed, and most likely adoption is going to take off after that. It doesn't happen overnight because the acquisition process still takes time. It is a military sale. It does have to go through the governments, and we still have to ramp up production because the lead times on some of the materials are still very long. It's a very new market. But we know how to do this. We've done it several times in our history and we're executing on our plan that's super helpful color maybe I'll ask two more on international and focus on your other products from here you know you mentioned it's it's still a process to sell internationally how does the export agency approvals help you and how are you thinking about localized efforts as well sure so another thing that's very unique about AV is that our success and track record of being able to sell and successfully export products from the United States and our technologies internationally is phenomenal. We export to 55 different countries around the world and pretty much every continent except Antarctica. And so we are very successful in knowing how to do that. We've been growing that before. And before the Blue Halo acquisition, international revenue represented at various times between 40% to 50% of the total company revenue. I believe that the international market's adoption and revenue is going to grow even faster because there's tremendous need for our systems out there. We're actively engaged in several countries in those three markets. The key markets that we're focused on is Europe, Middle East, and Asia Pacific. We have announced several joint ventures, subsidiaries, teaming agreements, partnerships in multiple countries, and I think that that's going to continue to grow. In terms of local content versus not, some of these countries have such great needs, and there's so much demand for our systems that it's going to require some local content. We have a very sound strategy around that. We know exactly how to do that without compromising our IP, without compromising our value proposition and the business model. And we know how to work with the U.S. government on how to set these things up. We've done it many times in our past, and that's a strength of AV in my view in general.

That's super helpful. Can we talk about Titan as well, the $500 million IDIQ, just to touch upon that again, and the initial $80 million order under domestic shield tied to Golden Dome? How do we think about that converting to revenues and further milestones?

Sure. So let me just touch on our overall strategy on Counter-UAS. Counter-UAS to us is not just a product. Counter-UAS is a problem in its category that is going to continue to grow over the next 5, 10 years. We never thought that you're going to have a one-solution-fits-all strategy for this market. Our strategy, which is unique compared to almost all of our competitors, is to have a layered defense solution set that addresses counter UAS and multiple different types of capabilities. The first layer of that defense against UAS is RF jamming. We've got one of the world's best RF jamming systems in the world, Titan series is proven. It's worked in Ukraine. It's worked in the U.S. It's internationally. We're doubling revenue every year in the last couple of years alone, and it's going to continue to grow. And the example you just described, the order from the drone shield program or the shield and the Golden Dome initiative, is roughly about a half a billion dollars total contract award, sole source to AV, so we can actually build more of these and deliver them to the U.S. military. We're going to deliver those things, or a portion of that $80 million, a significant portion of it this year. We're already actively ramping production. It's one of the product lines out of seven different ones that we're scaling production aggressively. The second layer of our defense, just to go back to the counter UAS, is the directed energy solution. So if the RF jamming fails, which most likely in the future, as drones become more autonomous and independent of GPS and RF communication, then RF jamming doesn't work. So then you have to go to the second layer of defense, which is direct energy. Direct energy is the technology that is going to become probably the lion's share of the use cases in the market for military applications. And you heard my story earlier as to what we're doing there and why we're the leader. If those two layers fail, the last resort is to use a kinetic missile. In the entire arsenal of the U.S. military's missiles, there is not a missile that is designed from the ground up that can address a Group 1-2-3 drone cost-effectively. Today, as I said, we use million-dollar to $10 million missiles to shoot down a $150,000 shy-head drone. That economically is not feasible. We have been awarded a contract. We competed with RTX on this called LRKI, Long Range Kinetic Intercept. It's a U.S. Army program to develop a next-generation counter-UAS missile, specifically at cost targets, that changes that equation, make it a parity, economically feasible to do that. We're ramping up our Huntsville facility, specifically to scale that site. The U.S. Congress actually put more money and awarded us more funding to accelerate the production and transition to full-rate production. and we're aggressively building those units going through the safety confirmation and testing and maturity of that product to get it to a production level in the next 12 to 18 months. So as you can see, our strategy is not a one-solution-fits-all or solve part of the problem. We believe that the counter-UAS market is a multibillion-dollar global market. We've got the leading solutions in all three categories, and I think over the next several years we're going to continue to scale this and benefit from that growth as well.

That's, as always, super helpful to provide the macro perspective, and I think we all appreciate it, especially myself. So on UAS, you know, the revenues have been growing quite significantly. How do we think about the run rate going forward and sequential growth in that business?

Yeah, so the first quarter UAS revenue was up 71% year over year. So we'd love to continue that trend going forward at that level of rate. We've had some key wins. We won in the first quarter a $117 million P550, our Group 2 solution for the long-range reconnaissance program of the U.S. Army. That award is beginning its deliveries now. It had it in Q1. It's going to continue in Q2, and it will be included in our full-year numbers. Overall, UAS is continuing to grow. We're seeing tremendous adoption of our Jump 20 and our Jump 20X, our Group 3 solutions in that space, both domestically and internationally. We've won multiple different programs internationally with our Jump 20. We've recently got a military designation for it by the Italian government, putting it into their inventory as a defined inventory item. That's a really key milestone to win and improve the airworthiness and the overall capability of that platform. So our UAS platforms continue with Puma as well. And Puma's been around for a while, but we've enhanced it over the years. And we just announced a $30 million Germany award where the German military basically bought the full suite of our Puma capabilities. Our Puma AE, our Puma Long Range, our Puma VTOL, our autonomous kits that get added to They bought the highest capable Puma system out there, and we're going to be delivering that this year as well. So UAS is doing very well. It's been part of our legacy for a while, and we're continuing to invest in it and expand the production capabilities and be able to deliver on all these key contract awards.

That's great to hear. And I guess putting all that together, how do you think about margins across the business going forward as you've laid out your margin plans back in June?

Yeah, so we did our investor day back early July, and we laid out our fiscal year 2030 targets. That took us from a revenue standpoint of growing roughly 15% to 20% over the next four years, getting us to essentially doubling our company between $3.5 and $4 billion. We also put some financial targets around our EBITDA expectations. We're currently running, last year was at 14.5%. We're guiding 14.5% this year, and we expect that to grow between 18% and 20% or to 18% and 20% by fiscal year 2030. The way that we're going to get that growth and that improvement is by, obviously, the volume is going to help, but also the mix. We're going to increase our product-related sales versus services. We're going to increase our firm fixed price-type contracts versus cost-plus-type contracts. And we're going to increase our international sales that typically yield a little higher margin than domestic sales. All those things we rolled out in July, and a lot of those things are already happening through these recent announcements. The SCDE segment is where the LOCUS awards are being executed against. Those are going to help drive improvements in gross margins in the latter half of this year, as well as into the future as we transition more and more of the technologies that were acquired through Blue Halo into the production levels that we're expecting.

Great. And maybe can we talk about, despite the 400 basis point margin increase in your target, You know, R&D has been a big part of AVAV double digits over the last decade. You're normalizing to more of a 7% to 9% range. How do we think about where you're spending the dollars?

Yeah, I'll take it. So historically, before the acquisition of Blue Halo, the AV, old AV, I call it, R&D as a percentage of revenue was double digits. Between anywhere from 10 to even sometimes we went to 13, 15. The highest was actually 18% one year. I'm not indicating that for the future right now. Just don't have to panic about that. And Blue Halo had a slower rate. So the combined rate still, the dollars is much bigger, but it's around between the 7% and 9%, as we discussed. We think that that's the normal range for us for the next several years, and it's going to fluctuate from year to year. We have a very ferocious appetite for opportunities to invest in. But we're very judicious on how do we risk adjust these opportunities and rank them, rank and stack, and then we make decisions on the portfolio level as to where we should place our bets. Historically, AV has probably got one of the best track record of investing in a technology or an opportunity, and then over the next three to five years, demonstrating how we can take that and build it into our franchise capability and product line and business line for us. So if you look at the history of our company, it's literally made up of those layers of the cake. We've got several of those today. Majority of the investments are going in these specific areas. It's going into our bread-and-butter, no, no, multi-mission ISR drones, non-lethal drones, call it. Precision strike systems such as Switchblade, Red Dragon, FE1, et cetera. Counter UAS is getting very heavy investments, primarily the locust and the direct energy systems. And then we have a whole bunch of other smaller, earlier stage investments for what we call breakthrough capabilities that essentially becomes a franchise later on. One of those that's actually you know about is Red Dragon. You know, Red Dragon was not even known three plus years ago. We developed it during the Ukraine conflict, and it's going to be a significant driver of revenue and profitability for the company this and next year. And so that's usually our strategy. That's what we're going to end up doing. We're fortunate because the market for us to invest is actually pretty good. The returns on these things look really, really good, and you could argue that we should be higher in some cases. But, you know, we're trying to balance the two things, being judicious and methodical and very systematic in how we do this. And two, also, we don't want to get too aggressive and also make sure that we have profitable business and sustainable that way.

That's super helpful, Culler. I guess as we think about some of those margin drivers, services, and international, have you quantified the mix change or percentage change that you look to?

Yeah, so the overall mix is going to help drive that adjusted EBITDA from 14.5% up to the 18% to 20%. As Waheed mentioned, our historical international portion of our portfolio was a lot larger a couple years back. It has come to a smaller percentage as we've integrated a larger company with Blue Halo that was mostly domestic focused. So those percentages were sitting in roughly 20-ish percent right now, international exposure. We expect that to grow to 30% to 35%, probably not getting back to 50%. we don't need it to get back to that level in order to hit those adjusted EBITDA targets. From a product and services, we're around 68 percent product, 32 percent services. We expect that to also improve, so a higher mix of product sales going into the mid-70s, which will help drive fixed price contracts, which will help drive margins as well. So, all those factors are in play. We're executing to that. These key awards that we're winning are all evidence that our strategy is paying out. Now, we're just going to see that our execution of the programs effectively, and ideally the margins, will improve in the back half of the year and continue into 28.

Two more questions and we'll wrap up. Blue Halo, where are you on the acquisition integration today, and where do you look to be in the next six months to a year?

When we did the acquisition, we had a very crisp and clear plan on a three-phase approach on how do we integrate the business, how do we execute our strategy on this, and how we go create value as a, you know, the two businesses, one plus one equals way more than four or five. We're right now at the, what I call, you know, two and a half phase, two and a half roughly. Phase one was to basically get two organizations together, move the businesses and product lines in the right places, connect the plumbing and the wiring so we can function as a one AV company. Phase two, which is the heaviest part of the lift, was to actually connect our systems to be able to allow us to scale, scale both in terms of operations, the cost synergies, revenue synergies, customers, products, et cetera. We're about 60 to 70 percent or 50 percent, between depending on which area you look at, of that transition complete and successful. Remember, this is a very large thing to take on, and we're going very deep in terms of integrating these businesses very aggressively, very aggressively. There's no such thing as AV or Blue Halo anymore. We're one company, we're trying to go into one ERP system, one HR system, one Salesforce CRM system. Massive, massive amount of effort internally. Third phase of the integration is actually streamlining our investments and products and aligning our R&D and SG&A investments to make sure that we get one plus one equals five or ten. That takes a little longer because then you have to start it has to be in a lot of a new development on new products new technologies that allows us to spend a dollar and let five or six products benefit from that that effort is already on the way too but i would say it's probably 20 to 30 percent uh done in terms of a just rough order of magnitude and the last thing i would say is i'm very pleased with the progress we're making acquisitions integrations of this size and nature is never easy uh we have had lots of experience and track record here and if you look at what we've been able to achieve both we've already achieved the cost synergies we had a target for the first two years we achieved that in the year in the first year we're ahead of our revenue synergy expectations and goals too and the last 12 months alone we've won four or five different half a billion dollar sole source programs and franchises titan freedom eagle one laser communication terminals laser weapon systems like locust the list goes on helmsman is another program that we won and so we continue to win when our record so far of being able to create the type of synergy that we wanted on the revenue side i'd say it's quite quite good and so we're very pleased with that and there's a lot more to come. There's a lot more to come. We're going to continue to work on this, and I think the combination of the two is strategically exactly what our customers want us to do and generate value for our shareholders.

Thank you both. I think that's a great note to end on, so appreciate it. Thanks, everyone.