Kratos Defense and Security Solutions Inc (KTOS) 2023 Q3 法說會逐字稿

Good day, and welcome to the Kratos Defense & Security Solutions' Third Quarter 2023 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Marie Mendoza, Senior VP and General Counsel. Please go ahead.

美好的一天，歡迎參加 Kratos 國防與安全解決方案的 2023 年第三季財報電話會議。 （操作員指示）請注意，今天的會議正在錄製中。現在我想將會議交給今天的發言人，高級副總裁兼總法律顧問瑪麗·門多薩 (Marie Mendoza)。請繼續。

Thank you. Good afternoon, everyone. Thank you for joining us for the Kratos Defense & Security Solutions' Third Quarter 2023 Conference Call. With me today is Eric DeMarco, Kratos' President and Chief Executive Officer; and Deanna Lund, Kratos' Executive Vice President and Chief Financial Officer.

謝謝。大家下午好。感謝您參加 Kratos 防禦與安全解決方案 2023 年第三季電話會議。今天與我在一起的是 Kratos 總裁兼執行長 Eric DeMarco；以及 Kratos 執行副總裁兼財務長 Deanna Lund。

Before we begin the substance of today's call, I'd like everyone to please take note of the safe harbor paragraph that is included at the end of today's press release. This paragraph emphasizes the major uncertainties and risks inherent in the forward-looking statements we will make this afternoon. Please keep these uncertainties and risks in mind as we discuss future strategic initiatives, potential market opportunities, operational outlook, and financial guidance during today's call. Today's call will also include a discussion of non-GAAP financial measures as that term is defined in Regulation G, non-GAAP financial measures should not be considered in isolation from or a substitute for financial information presented in compliance with GAAP. Accordingly, at the end of today's press release, we have provided a reconciliation of these non-GAAP financial measures to the company's financial results prepared in accordance with GAAP.

在我們開始今天電話會議的實質內容之前，我希望大家注意今天新聞稿末尾包含的安全港段落。本段強調了我們今天下午將要做出的前瞻性陳述所固有的主要不確定性和風險。當我們在今天的電話會議上討論未來的策略舉措、潛在的市場機會、營運前景和財務指導時，請牢記這些不確定性和風險。今天的電話會議還將討論非 GAAP 財務指標，因為該術語在 G 條例中定義，非 GAAP 財務指標不應被視為獨立於或替代根據 GAAP 提供的財務資訊。因此，在今天的新聞稿結尾，我們提供了這些非公認會計原則財務指標與根據公認會計原則編制的公司財務表現的調節表。

With that, I will now turn the call over to Eric DeMarco.

現在，我將把電話轉給埃里克·德馬科。

Thank you, Marie. And good afternoon. We've recently received additional interest in Kratos from existing and potential new stakeholders. As a result, I'll begin my remarks with a summary of our strategy. Kratos is a technology company in the national security commercial and global markets, and we make targeted internally funded investments to be first to market with relevant products and software. The benefit of Kratos being both defense and commercial market focused is that we lever our technology, our resources, facilities, production quantities, providing Kratos a competitive advantage, including cost and also a unique rapid technology development and delivery aspect to our customers.

謝謝你，瑪麗。午安.最近，我們收到了現有和潛在的新利害關係人對 Kratos 的更多興趣。因此，我將首先總結我們的策略。 Kratos 是一家針對國家安全商業和全球市場的科技公司，我們進行有針對性的內部資助投資，以便率先將相關產品和軟體推向市場。 Kratos 專注於國防和商業市場的好處是，我們利用我們的技術、資源、設施和生產數量，為 Kratos 提供競爭優勢，包括成本以及獨特的快速技術開發和向客戶交付方面的優勢。

Kratos utilizes existing leading-edge technology, not-yet-to-be-developed leading edge technology, which approach accelerates our development and fielding time while reducing our risk, schedule and cost elements. Kratos' dual commercial and security market focus is most represented by our space, satellite software and turbine technologies areas, representing approximately 50% of Kratos' revenue today.

Kratos 利用現有的尖端技術、尚未開發的尖端技術，這種方法加快了我們的開發和部署時間，同時降低了我們的風險、進度和成本要素。 Kratos 的商業和安全雙重市場重點主要體現在我們的太空、衛星軟體和渦輪機技術領域，約佔 Kratos 目前收入的 50%。

Also consistent with making targeted internal investments in our first-to-market strategy, at Kratos affordability is a technology and better is the enemy of good enough ready to go today, which is becoming even more important in the existing budgetary and threat environment. As reflected in our third quarter and year-to-date results, Kratos' 2023 transition year of making targeted internal investments in high-growth market opportunity areas while also generating increased revenue, profit and cash flow is on track. With this trajectory expected to continue in the future as an increased number of our programs and initiatives enter or see increased production or deployment.

與我們在率先進入市場的策略中進行有針對性的內部投資相一致，在Kratos，可承受性是一項技術，更好的是今天足夠好的敵人，這在現有的預算和威脅環境中變得更加重要。正如我們第三季和年初至今的業績所反映的那樣，Kratos 的2023 年過渡年正在步入正軌，該過渡年將在高成長的市場機會領域進行有針對性的內部投資，同時增加收入、利潤和現金流。隨著我們越來越多的計劃和舉措進入或看到生產或部署的增加，這種軌跡預計將在未來繼續下去。

The Kratos team in every business unit are successfully executing our strategy and business plan in the light of day as a public company, competitively bidding on and receiving large contract and program awards and programs of record, generating revenue and cash flow while simultaneously managing significantly internal funded investments to further grow the business.

每個業務部門的 Kratos 團隊都在作為一家上市公司成功執行我們的策略和業務計劃，競標並獲得大型合約和項目獎勵以及記錄項目，產生收入和現金流，同時管理大量內部資助投資以進一步發展業務。

This approach has positioned the company for sustained future year-over-year organic growth with increased margins, along with potential transformational opportunities including in tactical drones, software-based satellite C2 and TT&C, turbine propulsion engines, hypersonics, and certain other system areas. As we complete 2023, we expect to achieve our forecast and we currently expect Kratos' base case 2024 revenue and EBITDA profitability to continue to increase. Kratos' base case forecast does not include any assumed tactical drone production contracts, which we will only forecast once assured.

這種方法使公司能夠在未來實現持續的逐年有機成長，提高利潤，並帶來潛在的轉型機會，包括戰術無人機、基於軟體的衛星C2 和TT&C、渦輪推進發動機、高超音速技術和某些其他系統領域。隨著 2023 年的結束，我們預計將實現我們的預測，目前我們預計 Kratos 的 2024 年基本情況收入和 EBITDA 獲利能力將持續成長。克雷托斯的基本情況預測不包括任何假設的戰術無人機生產合同，我們只有在確定後才會進行預測。

With the United States government, the defense industry and Kratos currently operating under a continuing resolution authorization, similar to previous years, we will wait until we report Kratos' fourth quarter financial results in February to provide our detailed 2024 financial guidance to you as we should have additional clarity on both the fiscal '24 budget and the '25 budget request outlooks at that time.

由於美國政府、國防工業和 Kratos 目前在持續決議授權下運作，與往年類似，我們將等到 2 月份報告 Kratos 第四季度財務業績後，向您提供詳細的 2024 年財務指導，因為我們應該這樣做對當時的24 財年預算和25 財年預算請求前景有更多的明確性。

However, unless something significantly adverse occurs funding-wise at a high level, we are currently expecting at least 10% 2024 over '23 base case organic revenue growth and increased EBITDA margins with Q1 '24 similar to prior years being the weakest due to the currently ongoing CRA.

然而，除非在資金方面出現重大不利情況，否則我們目前預計2024 年23 年基本情況下的有機收入增長至少為10%，並且EBITDA 利潤率將增加，其中24 年第一季與前幾年相似，由於目前正在進行的 CRA。

Kratos' recent program awards and our record backlog and opportunity pipeline, which are driving our demand for qualified personnel, is a primary reason for our expected future organic growth trajectory confidence. Simply stated, Kratos has the right technology, software, systems, products and solutions at the right price, at the right price points, at the right time to address certain of the most mission- and time-critical national security and commercial market requirements. We currently have 400 open billable requisitions across our company on a base of approximately 3,800 employees, which is also indicative of the strength of our business and the demand for our offerings.

Kratos 最近的計劃獎項以及我們創紀錄的積壓和機會管道推動了我們對合格人員的需求，這是我們對未來有機成長軌跡充滿信心的主要原因。簡而言之，Kratos 在合適的時間以合適的價格、合適的價位提供合適的技術、軟體、系統、產品和解決方案，以滿足某些任務和時間最關鍵的國家安全和商業市場需求。目前，我們公司約有 3,800 名員工，有 400 個開放的計費申請，這也顯示了我們的業務實力和對我們產品的需求。

The obtaining and retaining of qualified workers, including those willing and able to receive a national security clearance remains a primary operational challenge, including the continuing increased cost of these individuals, which is impacting our margins.

獲得和留住合格的工人，包括那些願意並能夠獲得國家安全許可的工人，仍然是主要的營運挑戰，包括這些人員的成本持續增加，這正在影響我們的利潤。

Recent Kratos business highlights include the Air Force has now reported that an artificial intelligence combat enabled Valkyrie successfully recently flew at the Eglin Gulf Test and Training Range. As reported, AI algorithms developed and trained by the United States Air Force Research Lab Autonomous Air Combat Operations with the AI trained through deep reinforcement learning, use neural networks to fly the Valkyrie against simulated opponents, mission systems and weapons.

Kratos 最近的業務亮點包括空軍現在報告稱，人工智慧戰鬥使 Valkyrie 最近在埃格林灣測試和訓練場成功飛行。據報道，由美國空軍自主空戰研究實驗室開發和訓練的人工智慧演算法，透過深度強化學習訓練的人工智慧，使用神經網路駕駛「瓦爾基里」戰鬥機對抗模擬對手、任務系統和武器。

Also recently reported in a separate flight, Kratos' Valkyrie successfully demonstrated all defined artificial intelligence enabled high performance unproved air vehicle specified relevant functions. Kratos' Valkyrie with United States Marine Corps also continues to progress with the Marines recently announcing the successful first flight of Kratos' Valkyrie under the penetrating affordable autonomous collaborative killer portfolio or PAACK-P program as Kratos was able to announce today. As reported, the Marine Corps partnered with the Office of the Undersecretary of Defense, or OSD, for research and engineering, the Navy Air Systems Command and the Naval Air Warfare Center Aircraft Division with multiple expected additional funded future Valkyrie flights planned under the program.

最近還報導稱，奎托斯的「瓦爾基里」在一次單獨的飛行中成功展示了所有定義的人工智慧啟用的高性能未經證實的飛行器指定的相關功能。美國海軍陸戰隊的奎托斯「女武神」也在繼續取得進展，海軍陸戰隊最近宣布奎托斯的「女武神」在滲透性負擔得起的自主協作殺手組合或PAACK-P 計劃下成功首次飛行，正如奎托斯今天宣布的那樣。據報道，海軍陸戰隊與國防部副部長辦公室（OSD）、海軍航空系統司令部和海軍空戰中心飛機師合作進行研究和工程，預計根據該計劃計劃為未來的多次瓦爾基里飛行提供額外資助。

Kratos' drones, including Valkyrie, also continue to progress under the Rapid Defense Experimentation Reserve or RDER program, including as related with the USMC. The Valkyrie is the only high performance stealthy jet drone in its class flying today, continues to mature in actual flights with funded customers, including with artificial intelligence and other relevant mission systems as the DOD progresses towards the future large scale deployment of high performance jet powered drone UAV systems.

奎托斯的無人機，包括“瓦爾基里”，也在快速防禦實驗儲備或 RDER 計劃下繼續取得進展，包括與美國海軍陸戰隊相關的計劃。 Valkyrie 是當今同類中唯一一款正在飛行的高性能隱形噴射無人機，在與資助客戶的實際飛行中不斷成熟，包括人工智慧和其他相關任務系統，因為國防部正在朝著未來大規模部署高性能噴射機的方向前進。

We have now executed Phase 1 of an expected 5-year funded contract initiative with the new national security entity for Kratos' Valkyrie B version mission capability expansion, which initiative is very confidential. We have also now completed negotiations and expect to receive in the fourth quarter a Valkyrie-related contract in the tens of millions of dollars from a separate national security entity for a Valkyrie version A category. And we have recently received an entirely new tactical system related contract award, which we are unable to discuss further in any detail at this time.

我們現在與新的國家安全實體執​​行了預期為期 5 年的資助合約計劃的第一階段，以擴展 Kratos 的 Valkyrie B 版本任務能力，該計劃是非常保密的。我們現在也已經完成了談判，並預計在第四季度從一個單獨的國家安全實體獲得價值數千萬美元的 Valkyrie 相關合同，用於 Valkyrie 版本 A 類別。我們最近收到了一份全新的戰術系統相關合同，目前我們無法進一步詳細討論。

Separately, we are in negotiations with the customer related to Kratos' Thanatos Tactical Drone System, a version of which is flying today with multiple Thanatos systems expected to be performing funded mission capability demonstration expansion flights with this new customer in the future. We have also recently entered discussions with the customer regarding Kratos' Athena tactical drone system also which is now flying and we hope to be under contract next year.

另外，我們正在與 Kratos 的 Thanatos 戰術無人機系統相關的客戶進行談判，該系統的一個版本今天正在飛行，多個 Thanatos 系統預計將在未來與該新客戶一起執行資助的任務能力演示擴展飛行。我們最近也與客戶就 Kratos 的 Athena 戰術無人機系統進行了討論，該系統目前正在飛行，我們希望明年簽訂合約。

Since our last report to you, Deputy Secretary of Defense, Kathy Hicks announced the new Replicator initiative to field thousands of attritable autonomous drone systems over the next few years. Similar to the reported completely separate Air Force CCA program where it has also been reported the thousands of CCA drones are expected to be fielded. I am also unable to say anything more on either Replicator or CCA at this time. However, Kratos is the only company with low cap cost, high performance, expendable and attributable jet drones both in production and flying today, including Air Wolf, Mako, Valkyrie, Thanatos, Athena, and others.

自從我們向您提交上一份報告以來，國防部副部長凱西·希克斯 (Kathy Hicks) 宣布了新的 Replicator 計劃，將在未來幾年內部署數千個可消耗的自主無人機系統。與報告的完全獨立的空軍 CCA 計劃類似，據報道，預計將部署數千架 CCA 無人機。目前我也無法對 Replicator 或 CCA 發表更多評論。然而，Kratos 是目前唯一一家在生產和飛行中擁有低上限成本、高性能、消耗性和可歸因噴射無人機的公司，包括 Air Wolf、Mako、Valkyrie、Thanatos、Athena 等。

Assuming the Fiscal '24 budget is approved as we expect and the fiscal '25 NDAA and FYDP typically released by the Pentagon in calendar Q1 are also as we expect. Late next year we hope to receive our largest to-date Kratos tactical drone related contract award, which once again is not included in Kratos' base case financial forecast. In addition to recent developments with Thanatos and Athena, Kratos' Ghost Works continues to make progress on a separate new system. And assuming the range scheduling holds, we expect to demonstrate this system later this year. Kratos' Ghost Works has also recently been focused on a large new prime program opportunity, which includes the rapid design and build of an additional separate new system requiring significant Kratos' funded NRE, B&P and other costs which we expect to incur through Q4 and into Q1 of next year.

假設 24 財年預算如我們預期獲得批准，而五角大廈通常在第一季發布的 25 財年 NDAA 和 FYDP 也如我們預期。明年年底，我們希望獲得迄今為止最大的 Kratos 戰術無人機相關合同，該合約再次不包含在 Kratos 的基本情況財務預測中。除了塔納托斯和雅典娜的最新進展之外，奎托斯的幽靈工廠還在獨立的新系統上繼續取得進展。假設範圍安排成立，我們預計將在今年稍後演示該系統。 Kratos 的Ghost Works 最近也專注於一個大型新的主要專案機會，其中包括快速設計和建造一個額外的獨立新系統，需要Kratos 資助的大量NRE、B&P 和其他成本，我們預計這些成本將在第四季度和明年第一季。

We recently acquired Sierra Technical for approximately $25 million in Kratos' stock if all earnouts are achieved. Sierra's a longtime partner of Kratos and this was a one-on-one negotiated stock exchange merger with STS' husband and wife founders. Sierra recently received an approximate $77 million single award contract for two stealth jet drone, fifth generation aerial target or 5GAT aircraft with an initial period of performance of approximately 3 years and then expected production thereafter.

如果所有收益都實現的話，我們最近以大約 2500 萬美元的價格收購了 Sierra Technical 的 Kratos 股票。 Sierra 是 Kratos 的長期合作夥伴，這是與 STS 夫婦創始人一對一談判的證券交易所合併。 Sierra 最近獲得了一份價值約 7700 萬美元的單項合同，合約涉及兩架隱形噴氣無人機、第五代空中目標機或 5GAT 飛機，初始性能期約為 3 年，隨後預計生產。

For both competitive and security considerations, I am not going to comment any further on Sierra-related to future growth expectations other than to say that Kratos has big plans for the 5GAT stealth drone and also an additional opportunity Sierra is working on that is highly confidential along with Kratos' Ghost Works.

出於競爭和安全方面的考慮，我不會對 Sierra 與未來成長預期相關的任何進一步評論，只是說 Kratos 對 5GAT 隱形無人機有宏偉的計劃，以及 Sierra 正在開發的另一個高度機密的機會以及奎托斯的幽靈工廠。

Our primary focus is to successfully execute the 5GAT program and be first to market with the Fifth Generation Aerial Target drone system.

我們的主要重點是成功執行 5GAT 計畫並率先將第五代空中目標無人機系統推向市場。

We are working with Shield AI with Shield's artificial intelligence pilot integration into several of Kratos' high performance jet drones, including Valkyrie. The Shield-Kratos relationship is exactly consistent with Kratos' first-to-market with relevant system strategy, with Kratos flying drones and Shield flying today Hivemind AI pilot. We believe Shield will have a clear market advantage over its primary competitor as Shield has access to Kratos' family of flying today jet drone systems and its competition as PowerPoints, ground models, simulations, or propeller planes. The Kratos-Shield flights are occurring at the Oklahoma, Burns flat facility, which I completely endorse as the competition does not know what Kratos and Shield are up to. Shield AI is expected to be advanced through these flights and also at a separate additional range facility.

我們正在與 Shield AI 合作，將 Shield 的人工智慧飛行員整合到 Kratos 的多款高性能噴射無人機中，包括 Valkyrie。 Shield-Kratos的關係與Kratos率先上市相關係統的策略完全一致，Kratos飛行無人機，Shield今天飛行Hivemind AI飛行員。我們相信，與主要競爭對手相比，Shield 將擁有明顯的市場優勢，因為 Shield 可以使用 Kratos 的當今飛行噴射無人機系統系列及其競爭對手的 PowerPoint、地面模型、模擬或螺旋槳飛機。奎托斯-盾牌飛行是在俄克拉荷馬州伯恩斯公寓進行的，我完全同意這一點，因為競爭對手不知道奎托斯和盾牌在做什麼。 Shield AI 預計將透過這些飛行以及單獨的附加射程設施進行改進。

We continue to come down the learning curve on the 24 Valkyrie serial production run with currently 3 separate Valkyrie variants, A, B and C underway and a fourth variant we are currently considering based on recent customer interest. We are internal resource planning, balancing and phasing the Valkyrie production pace and Kratos' capital allocation against other new customer-funded tactical drone programs we have recently received and potential opportunities.

我們繼續沿著 24 Valkyrie 系列生產運行的學習曲線前進，目前有 3 個獨立的 Valkyrie 變體，A、B 和 C 正在進行中，我們目前根據最近的客戶興趣正在考慮第四個變體。我們正在內部資源規劃，根據我們最近收到的其他新的客戶資助的戰術無人機項目和潛在機會，平衡和分階段瓦爾基里的生產節奏和奎托斯的資本分配。

We have also now submitted a large quantity ROM, or rough order of magnitude, to a government customer for a significant Kratos tactical drone production run, which production planning and preparation we have completed, along with our existing in-place critical suppliers. The demand for Kratos' target drones is strong, and we expect to continue for the foreseeable future as the global recapitalization of weapon systems and the need to test and train on these weapon systems increases as recently demonstrated in the Vigilant [livern] test last week.

我們現在也向政府客戶提交了大量 ROM（或大致數量級），用於重要的 Kratos 戰術無人機生產運行，我們與現有的關鍵供應商一起完成了生產計劃和準備工作。對奎托斯目標無人機的需求強勁，我們預計在可預見的未來，隨著武器系統的全球重組以及對這些武器系統進行測試和訓練的需求的增加，這種需求將持續下去，正如上週的警惕[肝臟]測試所證明的那樣。

In the space and satellite area, almost every aspect of a satellite ground station can now be converted from hardware software, lowering cost, accelerating technology advancement and deployment time and increasing the ability for an operator to immediately react to changing conditions and requirements, which is the large, new and growing addressable market Kratos is pursuing. New satellite space vehicle technology and requirements, providing Kratos market opportunity include software-defined payloads, high-throughput spot beam enabled and other advanced system payloads and laser optical and other capabilities. Kratos' first-to-market open space software platform is the only software networking solution specifically designed to address and advance this new software and commercial technology-focused Paradigm, connecting dynamic space to a dynamic virtualized ground system.

在太空和衛星領域，衛星地面站的幾乎每個方面現在都可以從硬體軟體轉換，從而降低成本，加快技術進步和部署時間，並提高營運商對不斷變化的條件和要求立即做出反應的能力，這Kratos 正在追求的大型、新興且不斷成長的潛在市場。新的衛星太空船技術和要求為 Kratos 提供了市場機會，包括軟體定義的有效載荷、高通量點波束啟用和其他先進的系統有效載荷以及雷射光學和其他功能。 Kratos 首個上市的開放空間軟體平台是唯一一款專門設計用於解決和推進以新軟體和商業技術為中心的範式的軟體網路解決方案，將動態空間連接到動態虛擬化地面系統。

We recently announced that Kratos' OpenSpace platform is the first commercially available fully virtualized satellite ground system to achieve MEF 3.0 Carrier Ethernet certification. The MEF Carrier Ethernet or CE standard is the same industry standard adopted by global terrestrial and mobile network carriers, meaning Kratos' OpenSpace makes satellite service networks seamlessly interoperate with terrestrial and cellular transport networks. The CE standard achievement is representative of Kratos' satellite team's successful and methodical execution of our global satellite software-based virtualization strategy led by Kratos' first-to-market open space system. The total addressable market opportunity for Kratos' open space, both commercially and for national security is expected to remain strong with thousands of additional satellites planned for launch in the future.

我們最近宣布，Kratos 的 OpenSpace 平台是第一個獲得 MEF 3.0 營運商乙太網路認證的商用全虛擬化衛星地面系統。 MEF 營運商乙太網路或 CE 標準與全球地面和行動網路營運商採用的業界標準相同，這意味著 Kratos 的 OpenSpace 使衛星服務網路能夠與地面和蜂窩傳輸網路無縫互通。 CE 標準的成就代表了 Kratos 衛星團隊成功、有條不紊地執行了由 Kratos 首個上市的開放空間系統主導的全球衛星軟體虛擬化策略。奎托斯開放空間的整體潛在市場機會（無論是商業還是國家安全）預計將保持強勁，未來計劃發射數千顆衛星。

Kratos Turbine Technologies or KTT, and our TDI engine business, we believe, similar to our tactical drone business is well positioned for the expected significant growth in drones, cruise missiles, powered munitions, high-performance loitering munitions and other systems, all of which need engines. Kratos' first-to-market made in the USA engines are flying today and are designed into several new program systems, including as recently reported with Kratos TDI engines and the Boeing-powered Joint Direct Attack Munition. For engines, motors and propulsion systems, the time to get successfully designed into the vehicles, munitions and systems is now with working engines, not unproven start-up technology and photo renditions, and Kratos is taking advantage of our first-to-market positioning.

我們相信，Kratos Turbine Technologies 或KTT 以及我們的TDI 發動機業務，與我們的戰術無人機業務類似，處於有利位置，可滿足無人機、巡航導彈、動力彈藥、高性能巡飛彈藥和其他系統的預期顯著增長，所有這些需要引擎。 Kratos 第一款在美國製造的發動機現已投入使用，並設計成多個新的項目系統，包括最近報導的 Kratos TDI 發動機和波音動力聯合直接攻擊彈藥。對於發動機、電機和推進系統，現在成功設計到車輛、彈藥和系統中的時間是使用工作發動機，而不是未經驗證的啟動技術和照片再現，而奎托斯正在利用我們率先進入市場的定位。

Since our last report to you, we have received a contract to integrate Kratos' running engines into certain of Kratos' jet drones, both target and tactical. Once integration is complete, we believe that Kratos will be one of the only companies in the world vertically integrated, building both the jet aircraft and propulsion system, significantly reducing cost and supply chain risk while also increasing system performance for our customers with new technology provided by Kratos' engines.

自從我們上次向您報告以來，我們收到了一份合同，將奎托斯的運行發動機整合到奎托斯的某些噴氣無人機中，包括目標和戰術無人機。一旦整合完成，我們相信Kratos 將成為世界上唯一一家垂直整合的公司之一，同時建造噴射機和推進系統，顯著降低成本和供應鏈風險，同時透過提供的新技術為我們的客戶提高系統性能由奎托斯的引擎驅動。

We will also have the same vertical integration with Kratos' Zues rocket motors, and our Erinyes and Dark Fury aerial flyers. Kratos turbine shadow works development team has also been working on a separate new class of turbofans, Kratos codename blade for new larger drones. And I hope to be able to provide an update on our tangible progress with this initiative in the future as the total addressable market size for this larger engine class is incredibly large as represented by recently published reports.

我們還將與奎托斯的 Zues 火箭發動機以及我們的 Erinyes 和 Dark Fury 空中傳單進行相同的垂直整合。 Kratos 渦輪機影子工程開發團隊也一直致力於開發一種單獨的新型渦輪風扇發動機，即用於新型大型無人機的 Kratos 代號「葉片」。我希望能夠在未來提供有關這一舉措的實際進展的最新信息，因為正如最近發布的報告所示，這種更大的發動機類別的總潛在市場規模非常大。

The demand for Kratos' turbine products, technology and solutions is strong across the portfolio, including in the turbofan, space propulsion, hypersonic and other classified areas.

整個產品組合對 Kratos 渦輪機產品、技術和解決方案的需求強勁，包括渦輪風扇發動機、太空推進、高超音速和其他機密領域。

(technical difficulty)

（技術難度）

is the crown jewel of Kratos and is having an incredible 2023, and we are expecting continued significant future organic revenue, EBITDA and profit growth from the business.

是 Kratos 皇冠上的明珠，2023 年將是令人難以置信的，我們預計該業務未來的有機收入、EBITDA 和利潤將持續大幅成長。

Kratos Microwave Electronics business with a record backlog and opportunity pipeline is also performing well, including our team's successful penetration of the new-to-Kratos microwave, space and satellite market. In addition to space and satellite, the global recapitalization of air defense, drone, counter-UAS, missile radar, powered and loitering munitions and C5ISR systems is providing a large and growing market opportunity for Kratos' microwave business.

Kratos 微波電子業務擁有創紀錄的積壓和機會管道，也表現良好，包括我們的團隊成功滲透到新的 Kratos 微波、太空和衛星市場。除了太空和衛星之外，防空、無人機、反無人機、飛彈雷達、動力和巡飛彈藥以及 C5ISR 系統的全球資本重組也為 Kratos 的微波業務提供了巨大且不斷增長的市場機會。

Kratos' rocket systems business where Kratos' Zues, Erinyes, Dark Fury, ARAV and other rocket-related systems are produced, also recently had a very successful mission with our government partners at the Vigilant livern exercise with multiple Kratos rocket system ballistic missile targets and multiple Kratos unmanned drone system targets utilized with all Kratos systems being successfully tracked, intercepted and destroyed by the USS Carl M. Levin. The Vigilant livern exercise is a recent example of franchise Kratos programs, systems and products from multiple Kratos business units, providing mission-critical solutions to our customers for the United States National Security.

Kratos 的火箭系統業務生產 Kratos 的 Zues、Erinyes、Dark Fury、ARAV 和其他火箭相關係統，最近還與我們的政府合作夥伴一起在 Vigilant Liven 演習中成功執行了多個 Kratos 火箭系統彈道導彈目標和任務多個奎托斯無人機系統目標，所有奎托斯系統都被卡爾·M·萊文號航空母艦成功追蹤、攔截和摧毀。 Vigilant Liven 演習是來自多個 Kratos 業務部門的特許經營 Kratos 計劃、系統和產品的最新示例，為我們的客戶提供美國國家安全的關鍵任務解決方案。

I encourage you to watch the videos of Vigilant livern when you can, where you can see your company's products in action. Importantly, the Kratos rocket system team recently met with the L3 Aerojet team, and I can assure you that L3 is a 100% mission and customer-focused, including as related to Kratos' Zues Systems and Kratos' recently ordered numerous Zues rocket motors from L3 related to upcoming Kratos' Erinyes and other missions.

我鼓勵您盡可能觀看 Vigilant Liven 的視頻，在那裡您可以看到貴公司產品的實際應用。重要的是，Kratos 火箭系統團隊最近與L3 Aerojet 團隊會面，我可以向您保證，L3 是100% 的使命並以客戶為中心，包括與Kratos 的Zues 系統和Kratos 最近訂購的大量Zues 火箭發動機相關的內容。

Kratos' C5ISR product, hardware and systems business is expected to be one of our strongest future organic growth generators for the next several years with important contracts and programs of record, including Sentinel, Patriot, [FAD], Enduring Freedom our [IFPIC], Integrated Air and Missile Defense Battle Command or IBCS, short range air defense or SHORAD and many others. Kratos' C5ISR team's professionalism, our facilities, classified assets, past performance qualifications, et cetera, and their mission focus and execution has positioned Kratos C5ISR as the go-to relevant hardware product and system provider in the industry.

Kratos 的C5ISR 產品、硬體和系統業務預計將成為未來幾年我們最強大的未來有機成長動力之一，擁有重要的合約和記錄項目，包括Sentinel、Patriot、[FAD]、Enduring Freedom 我們的[IFPIC ]、綜合防空與飛彈防禦作戰指揮（IBCS）、短程防空（SHORAD）等等。 Kratos 的 C5ISR 團隊的專業精神、我們的設施、分類資產、過去的業績資質等，以及他們的任務重點和執行力，使 Kratos C5ISR 成為業內首選的相關硬體產品和系統提供商。

Past performance qualifications are incredibly important in the national security software systems and product business, and Kratos provide a significant barrier to entry to new or start-up potential entrants. There are also a number of cross-Kratos division programs, including where our C5ISR team and our space, defense, rocket and hypersonic businesses together are providing a complete integrated system solution to the customer. We're focused internally on organic growth and on increased profit margins with no significant acquisitions planned. We are balancing our increased future EBITDA profit objectives against a significant number of new program opportunities that we are and expect to pursue, many of which are right in Kratos' wheelhouse that have recently presented themselves.

過去的績效資格在國家安全軟體系統和產品業務中非常重要，而 Kratos 為新的或新創的潛在進入者提供了重大的進入障礙。還有許多跨 Kratos 部門的項目，包括我們的 C5ISR 團隊和我們的太空、國防、火箭和高超音速業務部門共同為客戶提供完整的整合系統解決方案。我們內部專注於有機成長和提高利潤率，沒有計劃進行重大收購。我們正在平衡我們增加的未來 EBITDA 利潤目標與我們正在或期望追求的大量新計劃機會，其中許多機會就在 Kratos 的駕駛室中，並且最近出現了。

Now is the time to win these and get designed in for these new significant opportunities.

現在是贏得這些機會並為這些新的重大機會而設計的時候了。

Deanna?

迪安娜？

Thank you, Eric. Good afternoon. As we've included a detailed summary of the third quarter financial performance as well as the fourth quarter and full year 2023 financial guidance in the press release we published earlier today, I will focus on the highlights in my remarks today.

謝謝你，埃里克。午安.由於我們在今天早些時候發布的新聞稿中詳細介紹了第三季度財務業績以及第四季度和 2023 年全年財務指引，因此我將在今天的演講中重點介紹重點內容。

Revenues for the third quarter were $274.6 million, up from $228.6 million in the third quarter of '22, reflecting a 20.1% organic increase. Revenues came in above our forecasted range of $240 million to $260 million, with organic growth in our Space and Satellite, Turbine Technologies, Microwave Products, C5ISR, Training Solutions and Unmanned Systems businesses. Our KGS and unmanned systems segments grew organically 22% and 13.4%, respectively. Cash flows used from operations for the quarter of $100,000 included working capital requirements associated with funding the sequential revenue growth of $7.7 million from the second quarter.

第三季營收為 2.746 億美元，高於 20 年第三季的 2.286 億美元，有機成長 20.1%。隨著我們的太空和衛星、渦輪技術、微波產品、C5ISR、培訓解決方案和無人系統業務的有機成長，收入超出了我們 2.4 億至 2.6 億美元的預測範圍。我們的 KGS 和無人系統部門分別有機成長 22% 和 13.4%。本季營運使用的現金流量為 10 萬美元，其中包括為第二季 770 萬美元的連續收入成長提供資金所需的營運資金。

Consolidated days sales outstanding continued to improve from 120 days in the second quarter to 117 days in the third quarter, with the increase in receivable balance in the third quarter of $14.8 million driven by the sequential increase in revenues. In addition, advanced purchases of inventory to mitigate potential supply chain disruptions and delays continued, as well as increased production to fulfill scheduled future deliveries, resulting in an increase of $3.7 million in inventories for the quarter, representing a reduced pace from the first half of 2023, with the total use of working capital for the 9 months of $23.7 million related to increased inventory levels.

綜合銷售應收天數持續改善，從第二季的 120 天增加到第三季的 117 天，在營收季增的推動下，第三季應收帳款餘額增加了 1,480 萬美元。此外，繼續提前採購庫存以減輕潛在的供應鏈中斷和延誤，並增加產量以完成預定的未來交付，導致本季庫存增加 370 萬美元，較上半年下降。相關的9 個月營運資金使用總額為2,370 萬美元。

Free cash flow used from operations was $14.3 million after funding capital expenditures of $14.2 million. Our contract mix for the third quarter of 2023 was 72% from fixed price contracts, 22% from cost plus fixed fee contracts and 6% generated from time and material contracts. Revenues generated from contracts with the U.S. government during the quarter were approximately 68%, which include revenues generated from contracts with the DoD, non-DoD federal government agencies and FMS contracts. And 12% of revenues generated from commercial customers and 20% from foreign customers.

扣除 1,420 萬美元的資本支出後，營運所使用的自由現金流為 1,430 萬美元。在我們 2023 年第三季度的合同組合中，72% 來自固定價格合同，22% 來自成本加固定費用合同，6% 來自時間和材料合同。本季與美國政府的合約產生的收入約為 68%，其中包括與國防部、非國防部聯邦政府機構和 FMS 合約產生的收入。其中12%的收入來自商業客戶，20%來自外國客戶。

Moving on to financial guidance. Our fourth quarter and updated full year 2023 financial guidance we provided today includes our current forecasted business mix and current delivery schedules and our assumptions related to the expected impact of our continued operating challenge related to obtaining and retaining qualified technical personnel and the related increased cost for these employees and across our labor base as well as the continued impact of supply chain disruptions, inflation and related expected cost and price increases, including increased personnel costs associated with hiring new qualified technical personnel that are currently and expected to continue impacting both the industry and Kratos.

轉向財務指導。我們今天提供的第四季度和更新後的2023 年全年財務指引包括我們目前預測的業務組合和當前的交付計劃，以及我們對與獲得和保留合格技術人員相關的持續營運挑戰的預期影響以及相關成本增加的假設。將繼續影響產業和奎托斯。

Our revised full year 2023 cash flow guidance reflects the ongoing impact of working capital requirements to fund revenue growth, including the continued increase in inventory balances, which was previously expected to begin reducing and converting the cash in the second half of 2023 as well as the shift of certain milestones on a handful of projects, primarily in our Training Solutions and C5ISR businesses, which has impacted expected cash receipts of approximately $16 million to $17 million shifting into 2024.

我們修訂後的 2023 年全年現金流指引反映了營運資金需求對收入成長的持續影響，包括庫存餘額的持續增加，此前預計將在 2023 年下半年開始減少和轉換現金，以及少數項目的某些里程碑發生了變化，主要是我們的培訓解決方案和C5ISR 業務，這影響了2024 年約1,600 萬至1,700 萬美元的預期現金收入。

Eric?

艾瑞克？

Great. Thank you, Deanna. We'll turn it over to the moderator now for questions.

偉大的。謝謝你，迪安娜。我們現在將其交給主持人提問。

(Operator Instructions) Our first question comes from Seth Seifman with JPMorgan.

（操作員指令）我們的第一個問題來自摩根大通的 Seth Seifman。

Nice quarter. I guess one thing that stood out to me is, as we look at the rest of the year and we look at what the guidance is for the fourth quarter and what's implied with regard to sales and EBITDA margin versus Q3, what accounts for the step down there and what's usually pretty seasonally strong quarter?

不錯的季度。我想對我來說最突出的一件事是，當我們審視今年剩餘時間時，我們會審視第四季度的指導，以及與第三季度相比銷售和EBITDA 利潤率的暗示，是什麼導致了這一步驟那裡通常是季節性強勁的季度？

Right. Primarily, Seth, this year, the CRA, which we had built into our plan, as you know, from the beginning, and we anticipated we would have one at least for the quarter. And we sell, as we've discussed previously, a lot of software that comes in either Q3 and/or Q4. We received several of those orders in Q3. We may not get them in Q4. That's number one. Number two, I mentioned there are a number of new opportunities that we are pursuing, where we are incurring very significant bid proposal, nonrecurring engineering and other costs. We're actually building some things that have to go into the air. And that's also something that's been factored into Q4. So we're trying to balance. We're making sure we meet or beat our numbers while also positioning ourselves to go after and win some of these new opportunities.

正確的。 Seth，今年首先是 CRA，如您所知，我們從一開始就將其納入我們的計劃中，我們預計至少在本季度會有一個。正如我們之前討論的，我們在第三季和/或第四季銷售了很多軟體。我們在第三季收到了其中一些訂單。我們可能無法在第四季度獲得它們。這是第一名。第二，我提到我們正在尋求許多新的機會，我們正在承擔非常重要的投標建議、一次性工程和其他成本。我們實際上正在建造一些必須進入空中的東西。這也是第四季考慮的因素。所以我們正在努力保持平衡。我們確保達到或超過我們的目標，同時也定位自己以追求並贏得一些新機會。

Great. Great. And then maybe when we think about where things are ending up for the year on OpenSpace versus kind of what you thought coming in and then the prospects into '24 and beyond. If you could update us there, that would be great.

偉大的。偉大的。然後，也許當我們思考 OpenSpace 今年的發展與您所想像的情況以及 24 世紀及以後的前景時。如果您能在那裡更新我們的最新情況，那就太好了。

Yes. Absolutely. OpenSpace, as I said, continues to make progress. It is not making as fast a progress as, I'll speak about me personally, as I had hoped, but my expectations, as you know, on the CEO, are very, very high. But the business is killing it, literally killing it. And as I mentioned, even in the remarks are on the release, we're in source selection on a very large opportunity right now. And there are a number of very large opportunities that we're pursuing that we believe we're going to win because we're the only one that has the virtualized software element. So we believe we've got a tiger by the tail here, Seth. We got a tiger about the tail. And we're going to hit an inflection point. It's either going to be in late -- my opinion, late '24 or '25. And that inflection point is when we cross the lines of development against production and deployment and sales. And the production, deployment and sales aspect of that curve are rapidly going up. And when they cross that development cost and maintenance cost number that we have to maintain, then we're going to see significant margin expansion. And that's what's coming. So the business is doing -- it's doing phenomenally well. I mean they're first to market with new technology. The leader is focused, the whole team is focused and they're doing it. And thank God, at Kratos we have -- we've got a number of other things that are coming up that are hitting all cylinders. And so it's a little -- if it's a quarter or 2 later than I hoped, all is going to be fine.

是的。絕對地。正如我所說，OpenSpace 不斷取得進展。它的進展並不像我所希望的那樣快，就我個人而言，但正如你所知，我對執行長的期望非常非常高。但商業正在扼殺牠，名副其實地扼殺牠。正如我所提到的，即使在發布的評論中，我們現在也面臨著一個非常大的機會來選擇來源。我們正在追求許多非常大的機會，我們相信我們會贏得這些機會，因為我們是唯一擁有虛擬化軟體元素的公司。所以我們相信我們已經抓住了一隻老虎的尾巴，賽斯。我們的尾巴上有一隻老虎。我們將迎來一個拐點。要嘛會晚一點——我認為是24年晚或25年晚。這個拐點是當我們跨越開發與生產、部署和銷售的界限時。該曲線的生產、部署和銷售方面正在迅速上升。當它們超過我們必須維持的開發成本和維護成本數字時，我們將看到利潤率大幅增加。這就是即將發生的事情。所以生意正在做——它做得非常好。我的意思是他們是第一個將新技術推向市場的人。領導者很專注，整個團隊都很專注，他們正在這樣做。感謝上帝，在奎托斯，我們還有許多其他即將發生的事情，這些事情正在全力以赴。所以這有點——如果比我希望的晚四分之一或兩個季度，一切都會好起來的。

Our next question comes from Michael Ciarmoli with Truist.

我們的下一個問題來自 Michael Ciarmoli 和 Truist。

Nice quarter. Hey, Eric, just -- I mean you had good margins in the quarter, especially adjusted EBITDA margins, I think, highest since maybe second half '21. Are you starting to see or get that expected pricing and flow-through from some of these newer contracts that you had kind of anticipated?

不錯的季度。嘿，艾瑞克，我的意思是，你們本季的利潤率很高，尤其是調整後的 EBITDA 利潤率，我認為，可能是 21 年下半年以來最高的。您是否開始看到或獲得您所預期的一些新合約的預期定價和流量？

We are starting to. We're starting to. But Michael, the costs of labor continue to be significant, especially in the specialty areas. I think turbo machinery engineers, software engineers and system engineers. And as I mentioned, we have about 400 open [recs] on a 3,800 person base and we're a product company. So that tells you the amount of revenue we've got sitting there ready to convert, and those are expensive people. So good news, we're growing. And at some point, the growth, irrespective of what the cost increases are, the growth is going to overcome it and we're really going to have a step function in margin increases. But it's not going to be for the next few quarters because of the reasons I said.

我們正在開始這樣做。我們開始這麼做了但邁克爾，勞動成本仍然很高，尤其是在專業領域。我認為渦輪機械工程師、軟體工程師和系統工程師。正如我所提到的，我們在 3,800 名員工中擁有大約 400 個開放[建議]，而且我們是一家產品公司。所以這告訴你我們有多少收入可以用來轉換，而這些都是昂貴的人。好消息，我們正在成長。在某個時候，無論成本增加多少，成長都會克服它，我們的利潤成長確實會出現階躍函數。但由於我所說的原因，未來幾季不會出現這種情況。

Okay. Got it. And then the color on '24 and the 10% growth, can you give us maybe your underlying assumptions? I know it's hard, but the budget environment, whether we get sort of a full year kind of this sequestration and then maybe even just some directional growth within your different lines of business. And I think you said you didn't really include -- you didn't include any tactical drones in there.

好的。知道了。然後是 24 年的顏色和 10% 的成長，您能給我們您的基本假設嗎？我知道這很難，但是預算環境，我們是否會獲得一整年的這種隔離，甚至可能只是您不同業務領域的一些定向成長。我想你說過你並沒有真正包括——你沒有包括任何戰術無人機。

Yes. Yes. So if we -- obviously, if we have a -- the industry has a full year CRA, we're not going to -- we will not hit 10%. It's not going to happen. It's no -- and it's not really that no new contract awards. It's the no new increases in existing production because we have a number of programs that we're in production on that are ramping, right? Assuming we get something by the end of the year, January, February, I feel pretty good we can hit the 10% with some of the big drivers trajectionally as you asked, our C5ISR business. We are in production on a number of programs, and we are entering production on programs like IBCS and SHORAD. Sentinel EMD phase is ramping. That's going to significantly ramp this year and we're following our great partner, Northrop Grumman. They're probably one of the best partners we have on that. Enduring Shield or IFPC with our partner Dynetics, we're expecting significant activity with that program. I think it was publicly reported that the units that we're building are all going to be delivered next year. Our engine business, our turbine business, Michael, is doing phenomenally well. That is where a significant number of those open recs are. And those are programs in space propulsion, turbofans and turbo jets and hypersonic systems and also the big B-52 reengine program. So our engine business is definitely going to have an up and to the right trajectory next year. Our Microwave Electronics business, as you know, it's in Israel, and God bless and help them all, the whole country. But that business is ripping, as you can imagine. We are on Iron Dome. We are on Arrow. You've been reading about these in the paper. We're on the radar, we're on the (inaudible). So our microwave business is going to continue to be up and to the right significantly. Our rocket system business, okay? Ballistic missile targets and hypersonic system testing, those are incredibly well funded. And the launch manifest is very robust for us next year. And we're going to see an uptick in the drone, in our drone business next year, primarily driven by target drones. All of the weapon systems that the primes are selling right now, our partners, the primes like Lockheed Martin, they're another outstanding partner. It was their system that was involved in Vigilant livern on the weekend test. They have to be exercised against target drones and ballistic missile targets. So that's driving our target drone business. So literally, across the board, we're expecting and have the programs for significant growth and margin expansion. We are being very cautious in tactical drones. We are not going to assume anything until it happens, but I hope you can see by my commentary, God willing, we're almost there.

是的。是的。因此，如果我們——顯然，如果我們有——行業有全年的 CRA，我們就不會——我們不會達到 10%。這不會發生。不，也不是真的沒有新合約授予。這是現有產量沒有新的增加，因為我們正在製作的許多項目正在增加，對吧？假設我們在今年年底、一月、二月之前有所收穫，我感覺很好，正如您所問的，我們的 C5ISR 業務可以與一些大型驅動因素一起達到 10%。我們正在製作許多節目，並且正在進入 IBCS 和 SHORAD 等節目的製作。 Sentinel EMD 階段正在加速。今年這一數字將顯著增加，我們正在追隨我們偉大的合作夥伴諾斯羅普·格魯曼的腳步。他們可能是我們在這方面最好的合作夥伴之一。 Enduring Shield 或 IFPC 與我們的合作夥伴 Dynetics 合作，我們預計該計劃將開展重大活動。我認為公開報道稱我們正在建造的單元將於明年交付。我們的發動機業務，我們的渦輪機業務，邁克爾，做得非常好。這就是大量開放建議的所在。這些項目涉及太空推進、渦輪風扇發動機、渦輪噴氣發動機和高超音速系統，以及大型 B-52 發動機再造項目。因此，我們的引擎業務明年肯定會走上正確的軌道。如你所知，我們的微波電子業務位於以色列，上帝保佑並幫助他們所有人，整個國家。但正如你可以想像的那樣，這項業務正在蓬勃發展。我們在鐵穹上。我們在箭上。您已經在報紙上讀到這些內容。我們在雷達上，我們在（聽不清楚）。因此，我們的微波爐業務將繼續大幅成長。我們的火箭系統業務，好嗎？彈道飛彈目標和高超音速系統測試的資金非常充足。明年的發布清單對我們來說非常強勁。明年我們的無人機業務將看到無人機的成長，這主要是由目標無人機推動的。 primes 目前正在銷售的所有武器系統，我們的合作夥伴，像洛克希德馬丁公司這樣的 primes，他們是另一個出色的合作夥伴。週末測試中的 Vigilant Liven 就是他們的系統參與的。它們必須針對無人機和彈道飛彈目標進行演習。這正在推動我們的目標無人機業務。因此，從字面上看，我們全面期待並製定了顯著成長和利潤擴張的計劃。我們對戰術無人機非常謹慎。在事情發生之前我們不會做出任何假設，但我希望你能透過我的評論看到，上帝保佑，我們已經快到了。

Got it. Got it. Just one other one. The downward revision to cash flow, it sounded like just the working capital to support growth, but I think you also talked about some milestone collections maybe slipping out. I guess you don't want to talk to next year, but I think we've been -- all of us have been waiting for some cash generation. What's sort of the thought around cash flow?

知道了。知道了。只是另一件。現金流的向下修正，聽起來只是支持成長的營運資金，但我想你也談到了一些里程碑式的系列可能會滑落。我想你不想談論明年，但我認為我們一直在等待一些現金產生。關於現金流有什麼想法？

Yes. I don't want to comment about next year at this point, Michael. But the milestones, they were about $16 million to $17 million on a small number of projects, but they obviously were fairly significant in our Training Solutions and our Modular Systems business. We expect to collect those in 2024.

是的。邁克爾，我現在不想評論明年的事情。但對於少數專案來說，里程碑的成本約為 1,600 萬至 1,700 萬美元，但它們顯然對我們的培訓解決方案和模組化系統業務相當重要。我們預計在 2024 年收集這些數據。

Mike, let me give you a little more color on that. I want to. We're standing up an engine production line. We're going to be standing that up. It will be done by the middle of next year as we're anticipating going into production on at least 1 engine. So we're standing that line up. We've stood up a new line in the tactical drone area for something. That will be stood up by the end of Q1, middle of Q2. These are for programs that are funded. So we're spending some money to get -- we've won these programs. We've won development. Now they're going into production. We're standing these up, and that's going to take some capital as well.

麥克，讓我給你更多的解釋。我想要。我們正在建立一條發動機生產線。我們將堅持這一點。這將在明年年中完成，因為我們預計至少有一台引擎將投入生產。所以我們就站在那條線上。我們在戰術無人機領域建立了一條新的生產線。這將在第一季末、第二季中期之前落實。這些適用於受資助的計劃。所以我們花了一些錢來贏得這些項目。我們贏得了發展。現在他們正在投入生產。我們正在維持這些，這也需要一些資金。

As well as the second line of the Valkyrie production that we announced that we started earlier this year. So that will be ongoing throughout 2024 as well.

以及我們宣佈於今年稍早啟動的《瓦爾基里》第二條生產線。因此，這也將持續到 2024 年。

Our next question comes from Mike Crawford with B. Riley Securities.

我們的下一個問題來自 B. Riley Securities 的 Mike Crawford。

And thanks for providing some color on some of these other drones under development and just in the Valkyrie like Thanatos and Athena. Another one that you won a couple of years ago, AFRL award for the Off-Boarding Sensing Station, the OBSS contract, which is I think the derivative drone out of that is your Demogorgon. Is that one that's still featuring in your plans?

感謝您為其他一些正在開發的無人機以及瓦爾基里（例如塔納托斯和雅典娜）提供了一些顏色。您幾年前贏得的另一項合約是 AFRL 離機感測站合同，即 OBSS 合同，我認為其中的衍生無人機就是您的 Demogorgon。這仍然是你計劃中的一部分嗎？

We are not involved with OBSS at this point, Mike.

麥克，我們目前不參與 OBSS。

Okay. And you also mentioned the 3 year $77 million 5GAT contract. I imagine that there's no reason you wouldn't do, execute on the same playbook you've used with targets in the past and develop a fifth-generation actual tactical drone out of the 5GAT. Is that a process that's already starting or something you're going to decide on next year?

好的。您還提到了 3 年 7700 萬美元的 5GAT 合約。我想您沒有理由不這樣做，按照您過去針對目標使用的相同劇本執行，並根據 5GAT 開發第五代實際戰術無人機。這是一個已經開始的流程還是您將在明年做出決定？

I'm sorry, Mike. No, I can't comment on that. I'm sorry.

對不起，麥克。不，我不能對此發表評論。對不起。

Okay. That's fine. Just maybe switching gears to open space. So you're first to market with this virtual networking solution that goes way beyond just tracking and telemetry and control. And are there any bottlenecks that you see with your solution, will be at [data radio] or something else that when you're trying to connect all these disparate networks?

好的。沒關係。也許只是將齒輪切換到開放空間。因此，您是第一個向市場推出這種虛擬網路解決方案的人，該解決方案遠遠超出了追蹤、遙測和控制的範圍。當您嘗試連接所有這些不同的網路時，您的解決方案是否會在[資料廣播]或其他方面看到任何瓶頸？

I do not believe so. The team, the President of (inaudible) pulled together and created. They're incredible. These are some of the, if not the greatest technologists, not only in the company but in the entire industry. And the speed that they have developed OpenSpace to address existing hardware elements on the ground to virtualize them to interface with space, the speed of which they have mastered the technology of the RF or analog signal coming down, converting it to IP. So now it's virtualized and which means the entire backbone can be virtualized, is incredible to me. And I do not believe there is an issue, Mike, relative to what you asked.

我不這麼認為。這個團隊是（聽不清楚）總裁齊心協力創建的。他們太不可思議了。這些人即使不是最偉大的技術專家，也是公司乃至整個產業的一些技術專家。他們開發 OpenSpace 的速度是為了解決地面現有硬體元素的問題，將其虛擬化以與空間接口，他們掌握了將射頻或模擬信號傳輸到 IP 的技術。所以現在它已經虛擬化了，這意味著整個主幹網路都可以虛擬化，這對我來說是不可思議的。麥克，我認為與你所問的問題無關。

Our next question comes from Ken Herbert with RBC Capital Markets.

我們的下一個問題來自加拿大皇家銀行資本市場的肯·赫伯特。

Nice results this quarter. Hey, Eric, maybe just to start off. I wanted to see if you could level set us on maybe the revenue run rate for the Turbine Technologies business. And how much of growth in '24 can that perhaps contribute? And then maybe more importantly, you've had some nice wins there recently, but can you talk about the pipeline in that business in particular because it sounds like there's -- it's expanding pretty rapidly?

本季業績不錯。嘿，艾瑞克，也許只是開始。我想看看您能否為我們設定渦輪技術業務的收入運行率。這可能對 24 年的成長有多大貢獻？也許更重要的是，你最近在那裡取得了一些不錯的勝利，但是你能特別談談該業務的管道嗎，因為聽起來它正在迅速擴張？

Right. So level setting that business, think of it going from approximately $70 million or $75 million to over $100 million in '24. So that's the type of trajectory that it's on. Programmatically, the big programs are in no particular order, but these are the big ones, are -- with our partner, Rolls-Royce on the B-52 re-engine. I'm not allowed to say the name, but we're involved with companies that are doing lunar landing and maybe beyond the moon, those types of engines, those companies. We're involved with agencies for engines for drones and KTT's engines, certain of KTT's engines right now are being integrated into drones, all of this I can't talk about other than what I just said. We have the program with Boom. So we're designing a supersonic engine for Boom Supersonic. That's a big one. And then we have a number of programs with the Air Force and/or the Air Force Research Lab that we are working on turbojets and turbofans for drones and cruise missiles and loitering munitions. And we are -- we have a very specialized aspect of that business. That's an MRO for helicopter engines. That is doing phenomenally. If you're designed in on legacy systems right now, there are very few new starts in certain areas, which means the legacy systems have to survive and keep flying for years and years. And if you're in some of those niches on certain helicopters that we are, that business is very powerful because there are no replacements coming.

正確的。因此，對這項業務進行水平設定，想像一下它在 24 年從大約 7000 萬美元或 7500 萬美元增加到超過 1 億美元。這就是它所處的軌跡類型。從計劃上看，大型項目沒有特定的順序，但這些都是大型項目，與我們的合作夥伴勞斯萊斯一起對 B-52 進行了重新設計。我不被允許說出這個名字，但我們參與了一些正在進行登月甚至超越月球的公司，那些類型的發動機，那些公司。我們與無人機引擎和 KTT 引擎的機構合作，KTT 的某些引擎現在正在整合到無人機中，所有這些除了我剛才所說的之外我無法談論。我們有 Boom 的計劃。因此，我們正在為 Boom Supersonic 設計一款超音速引擎。那是一件大事。然後，我們與空軍和/或空軍研究實驗室有許多項目，我們正在研究用於無人機、巡航飛彈和徘徊彈藥的渦輪噴氣發動機和渦輪風扇發動機。我們的業務非常專業。這是直升機發動機的 MRO。這是非常出色的。如果您現在是在遺留系統上進行設計的，那麼某些領域很少有新的開始，這意味著遺留系統必須生存並保持運作多年。如果你在我們的某些直升機上處於某些利基市場，那麼這項業務非常強大，因為沒有替代品出現。

Okay. Very helpful. And if I could, just one follow-up on the -- on sort of the slower pace of EBITDA growth in the next year. And obviously the margin pressure, you talked about from staffing and specifically the specialized people you need. It seems like this has obviously been going on for quite a while as the industry is going through some pretty substantial growth. How much are you looking at maybe other geographic locations or maybe sort of significantly changing maybe the -- where you're recruiting or other maybe approaches to that? Because it seems like that's clearly holding you back a little bit. And has for quite a while in terms of some of the opportunities.

好的。非常有幫助。如果可以的話，我只是對明年 EBITDA 成長放緩的一個後續行動。顯然，你談到了人員配置的利潤壓力，特別是你需要的專業人員。看起來這種情況顯然已經持續了很長一段時間，因為該行業正在經歷相當可觀的成長。您在多大程度上關注其他地理位置，或者可能會發生重大變化——您正在招募的地方或其他可能的方法？因為這似乎明顯阻礙了你。並且在一些機會方面已經有相當長一段時間了。

Yes. So on the first part of your question, I want to make sure I clarify that I was clear. In our base case, assuming we get a budget and a reasonable amount of time, and we do 10% year-over-year growth, we're going to expect our EBITDA margins to increase at a greater rate than that. So we're expecting significant EBITDA margin growth. I'm saying it's being held back by the cost inputs, including labor. Okay? So I want to make -- I'm very clear, okay. We are absolutely -- we are studying everything that you mentioned, different geographics, educational areas, technical schools. Mike, this is a supply-demand problem. There is -- Ken, excuse me. Ken, there's no -- the supply of qualified people or people that want to get qualified, people that want to get a security clearance can, it's not there. And there is a recapitalization of strategic weapon systems occurring for the obvious reasons. And in addition to that, we have new space companies that are hiring these people because they want to go to Mars or Venus. There's just an incredible demand and there's not enough of them, and they're being bid up, which is why we are -- and now I'm going back to a question (inaudible). Ken, I'm really glad you asked this. We are putting a significant amount of money in robotic machinery, 3D printing, automation. We're standing up a center of excellence to produce very, very unique elements for our engines. We're making significant capital investments to address that we can't get the people, so we're going to automate the heck out of it. I would say we are on the leading edge in the industry, including the big guys, on a relative basis, of course, of robotics, 3D printing, automotive -- automated manufacturing. We're doing all those things, and it's another reason why our CapEx and our other stuff is going to remain up because we're trying to offset the labor issue we have.

是的。因此，關於你問題的第一部分，我想確保我已經說清楚了。在我們的基本情況下，假設我們有預算和合理的時間，並且我們的同比增長率為 10%，我們預計 EBITDA 利潤率將以更高的速度增長。因此，我們預計 EBITDA 利潤率將大幅成長。我是說，它受到包括勞動力在內的成本投入的阻礙。好的？所以我想說——我很清楚，好吧。我們絕對是——我們正在研究你提到的一切，不同的地理位置、教育領域、技術學校。麥克，這是一個供需問題。有——肯，對不起。肯，沒有－合格的人或想要獲得資格的人的供應，想要獲得安全許可的人可以，但不存在。出於顯而易見的原因，戰略武器系統正在進行資本重組。除此之外，我們還有新的太空公司正在僱用這些人，因為他們想去火星或金星。需求量令人難以置信，但數量卻不夠，而且它們的價格正在被抬高，這就是我們的原因——現在我要回到一個問題（聽不清楚）。肯，我真的很高興你問這個問題。我們在機器人機械、3D 列印、自動化方面投入了大量資金。我們正在建立一個卓越中心，為我們的引擎生產非常非常獨特的元件。我們正在進行大量的資本投資來解決我們無法招募到人員的問題，因此我們將實現自動化。我想說，我們在機器人、3D 列印、汽車自動化製造等領域處於行業領先地位，當然也包括大公司在內。我們正在做所有這些事情，這是我們的資本支出和其他東西保持不變的另一個原因，因為我們正在努力抵消我們面臨的勞動力問題。

Our next question comes from Peter Arment with Baird.

我們的下一個問題來自 Peter Arment 和 Baird。

Hey, Eric, where are you in the development of engines for your own drones? Have you -- I know you had talked about [VML], that was one of the areas that you had focused on way back when. But what can you say on that?

嘿，艾瑞克，你在為自己的無人機開發引擎方面處於什麼階段？我知道您曾經談論過 [VML]，這是您很久以前就關注的領域之一。但對此你能說什麼呢？

Well, I mean let me -- so we have now received a contract from a U.S. government agency, and we are integrating, running Kratos engines into certain of our tactical drones and our target drones. We're doing it right now. We're going to be doing that throughout '24. And hopefully, this time next year or shortly thereafter, we will be -- I believe, the only company in the world totally vertically integrated air frame, electronics, et cetera, and engine with flying aircraft. So we -- I'm glad you asked. We've made -- the team has made significant progress. We're under contract. We're integrating Kratos engines into Kratos aircraft.

好吧，我的意思是讓我——所以我們現在已經收到了美國政府機構的一份合同，我們正在將奎托斯發動機整合並運行到我們的某些戰術無人機和目標無人機中。我們現在正在做。我們將在整個 24 年這樣做。我相信，希望明年這個時候或不久，我們將成為世界上唯一一家將機身、電子設備等和發動機與飛行飛機完全垂直整合的公司。所以我們——我很高興你問這個問題。我們團隊已經取得了重大進展。我們是有合約的。我們正在將奎托斯引擎整合到奎托斯飛機中。

That's helpful. That's fair. And then on -- just in general on Valkyrie and -- maybe we'll just focus on Valkyrie. Do you still anticipate that this is just going to be another year of a lot of test flights? I mean you still continue to be kind of in this lead position. But just like the marine program, [PAC] program, I mean that's a new development. And obviously, they're going to continue to test flight. How do you see this kind of playing out?

這很有幫助。這很公平。然後——一般來說，關於《瓦爾基里》——也許我們只會關注《瓦爾基里》。您是否仍預計今年將是大量試飛的另一年？我的意思是你仍然繼續處於領先地位。但就像海洋計劃、[PAC] 計劃一樣，我的意思是這是一個新的發展。顯然，他們將繼續試飛。您如何看待這種情況？

I learned my lesson in 2019 and then 2020. Even when the customers came out publicly and they said we're going to start ordering Valkyries or other Kratos planes in quantity and because of either change in personality, if the government or change in policy, it didn't happen, I'm going to -- Pete, I'm going to be very cautious. I don't know. But on the optimistic side of the point you made, we are flying with multiple customers right now. We're the only one client. We're the only one with aircraft. We're doing all types of mission systems, including with artificial intelligence. I believe that this will happen. I mean, Replicator, I think it's just another indication. This is going to happen, and we're going to be there when it happens and we're going to participate. And I'm sorry, I'm just -- I'm going to be cautious, brother, on this one.

我在 2019 年和 2020 年吸取了教訓。 即使客戶公開表示我們將開始大量訂購 Valkyries 或其他奎托斯飛機，由於個性的變化，如果政府或政策的變化，它沒有發生，我會——皮特，我會非常謹慎。我不知道。但從您提出的觀點的樂觀方面來看，我們現在正與多個客戶一起飛行。我們是唯一的客戶。我們是唯一擁有飛機的國家。我們正在開發各種類型的任務系統，包括人工智慧。我相信這將會發生。我的意思是，Replicator，我認為這只是另一個跡象。這將會發生，當它發生時我們會在那裡並參與其中。抱歉，我只是──兄弟，在這件事上我會保持謹慎。

Yes, no worries. I figured I'd ask. But on the target side, what -- should this business be ramping up further just given all the sort of national security implications that we're seeing on missile defense and other activities? Do you --

是的，不用擔心。我想我會問。但在目標方面，考慮到我們在飛彈防禦和其他活動中看到的各種國家安全影響，這項業務是否應該進一步發展？你 -

Absolutely.

絕對地。

-- should be a bigger business than you look at?

——應該是比你想像的更大的企業？

Yes. You will see 2024 will be a significant increase in our Unmanned Systems revenue, primarily from target drones at multiple customers that are ramping up their utilization. And also, Pete, in our rocket business, ballistic missile targets and other rocket propelled targets, you're going to see a significant increase there. We have the orders in '24, which again ties into my optimism that we're going to generate the growth we have. Our targets business says (inaudible). And obviously it's because of what's going on geopolitically in the world.

是的。您將看到，2024 年我們的無人系統收入將大幅成長，主要來自多個客戶的目標無人機，這些客戶正在提高其利用率。而且，皮特，在我們的火箭業務、彈道飛彈目標和其他火箭推進目標中，你會看到那裡的顯著成長。我們在 24 年收到了訂單，這再次與我的樂觀情緒有關，我們將實現我們的成長。我們的目標業務說（聽不清楚）。顯然這是因為世界地緣政治上正在發生的事情。

Our next question comes from Josh Sullivan with The Benchmark Company.

我們的下一個問題來自 Benchmark Company 的 Josh Sullivan。

Just as far as the Sierra acquisition, how much of the $77 million 5GAT contract is yet to be consumed as the deal closes here?

就 Sierra 收購而言，交易完成時價值 7,700 萬美元的 5GAT 合約中有多少尚未消耗？

Is yet to be incurred, Josh?

還沒發生嗎，喬希？

Yes, yes. Yes, exactly.

是的，是的。是的，完全正確。

Yes. The vast majority, they received the contract approximately 2 months, 60 days prior to us acquiring them. As I mentioned, and I think you know, we've been partners with Sierra and the family that owns it for a long time. And so the significant majority of that program, we will execute with the Sierra team.

是的。絕大多數人在我們收購他們之前大約 2 個月零 60 天收到了合約。正如我所提到的，我想您也知道，我們長期以來一直是 Sierra 及其所有者家族的合作夥伴。因此，該計劃的大部分內容將與 Sierra 團隊一起執行。

Got it. And then just as far as the new Thanatos or Athena customer that you mentioned in the opening remarks, are you able to say if that customer is a government service branch or another defense contractor?

知道了。至於您在開場白中提到的新塔納托斯或雅典娜客戶，您能否說該客戶是政府服務部門還是其他國防承包商？

I am not able to say, I'm sorry.

我無法說，對不起。

Our next question comes from Joe Gomes with Noble Capital.

我們的下一個問題來自Noble Capital 的喬·戈麥斯。

Congrats on the quarter. So Eric, you just -- in the previous question, you were talking about geopolitically. And just wondering on the great quarter you just posted, the events that were in Ukraine, is that helping boost the revenues for you guys? Have you seen anything material coming from there?

恭喜本季。艾瑞克，你在上一個問題中談到了地緣政治。只是想知道您剛剛發布的精彩季度，烏克蘭發生的事件，這是否有助於增加您的收入？你有看到從那裡傳來的任何材料嗎？

I can't comment on what we're doing over there. I'm sorry.

我無法評論我們在那裡所做的事情。對不起。

No worries. And then if we put aside the continuing resolution and the labor issues for a moment, what else do you see as kind of the biggest challenges to achieving the growth you're hoping for in '24?

不用擔心。然後，如果我們暫時將持續的解決方案和勞工問題放在一邊，您認為實現 24 世紀成長所希望的最大挑戰還有哪些？

Putting aside tactical drones, so just talking our base case and putting aside people which is #1, 2 and 3, our operational challenge right now. It's, we have to build a lot of stuff. Our space team has to do a lot of software delivery of OpenSpace. It's just a lot. We are ramping across the company. And with ramp comes risk and challenge. And so just the ramping, we have to get those engine factories set up. I mean we've got to do that. We've got to do it seamlessly, efficiently. We've got to make sure we do it in conjunction with the applicable program office. So just those types of operational execution types of things are the biggest drivers. And then I'll say this one, I don't see it being an issue, but I want to mention it, specifically in our space business, that's an international business. And they've got some very big well-known customers across the globe that are existing customers that we have some large and midsized proposals in on. If those get delayed 2 or 3 months here, 2 or 3 months there, that could move some things out of next year into 25. That could be a risk too, totally outside of our control, but that kind of stuff happens internationally.

拋開戰術無人機，所以只是談論我們的基本情況並拋開人員，這是我們現在的營運挑戰#1、2和3。我們必須建造很多東西。我們的太空團隊要做很多 OpenSpace 的軟體交付工作。只是很多。我們正在整個公司範圍內不斷發展。隨著斜坡的到來，風險和挑戰也隨之而來。因此，我們必須建立這些引擎工廠。我的意思是我們必須這樣做。我們必須無縫、有效率地完成這件事。我們必須確保與適用的專案辦公室合作進行這項工作。因此，這些類型的操作執行類型才是最大的驅動因素。然後我會說這個，我不認為這是一個問題，但我想提一下，特別是在我們的太空業務中，這是一項國際業務。他們在全球範圍內擁有一些非常大的知名客戶，這些客戶都是我們有一些大中型提案的現有客戶。如果這些事情在這裡延遲2 或3 個月，在那裡延遲2 或3 個月，那麼明年的一些事情可能會被推遲到25 個月。這種事情在國際上發生。

Right. And one last one for me. On Sierra acquisition, I think they're based at an airport in California there. And I was wondering, is there opportunities to do some of the same things there as you do in Oklahoma? If that could be a potential additional benefit to that acquisition?

正確的。最後一張是給我的。關於塞拉收購，我認為他們的總部設在加州的機場。我想知道，那裡是否有機會做一些與俄克拉荷馬州相同的事情？這是否可能成為此次收購的潛在額外好處？

Joe, that's a great question. The facility (inaudible) and it is actually on the runway. It's on the air base with the hangers. Absolutely, unequivocally, that was a strategic element of our plan here.

喬，這是一個很好的問題。該設施（聽不清楚）實際上位於跑道上。它在空軍基地，有衣架。絕對、明確地，這是我們計畫的策略要素。

Our next question comes from Pete Skibitski with Alembic Global.

我們的下一個問題來自 Alembic Global 的 Pete Skibitski。

Eric, can you help me understand the nuances to the extent you're able to, on Replicator, a little bit more because you mentioned in your remarks, Replicator being distinct from Air Force CCA. But I thought Replicator wasn't really a funded program of record. I thought it was more so kind of a, I don't know, a concept or kind of an umbrella program. What's the right way to think about that?

Eric，您能否幫助我在您能力範圍內進一步了解 Replicator 上的細微差別，因為您在發言中提到，Replicator 與空軍 CCA 不同。但我認為 Replicator 並不是一個真正有紀錄的資助計畫。我認為這更像是一種，我不知道，一種概念或一種傘式計劃。正確的思考方式是什麼？

Right. Replicator is not a program of record. Replicator is an initiative. That is what Secretary Hicks calls it, and Shyu, Heidi Shyu, an initiative. It is part of the Office of the Secretary of Defense. It is going to be managed by the defense innovation unit out of Silicon Valley. And who is in charge of it, I believe is the Vice Chair of the Joint Chiefs of Staff. That is the ultimate decision maker. I believe that is what has been reported. I believe that Air Force officials have very clearly stated, Replicator is completely separate from their CCA program. I believe that's been reported. These are 2 complete initiatives -- and the -- I believe it's been publicly reported also that the people involved with Replicator have said that they've identified the funding. I know something about this. That's why I'm choosing my words very carefully. They've identified the funding and how they want to deploy thousands of these in the next few years. That's how I would frame it up. They've talked about the RDER funds. I mentioned the RDER funds, the RDER funds. You should take a look at that. That's a tidbit that is out there on this. And there are some other ones where you can connect the dots, and I think you can see where the money is coming from.

正確的。 Replicator 不是一個記錄程式。 Replicator 是一項倡議。這就是希克斯國務卿所說的，而舒，海蒂舒，是一項倡議。它是國防部長辦公室的一部分。它將由矽谷的國防創新部門管理。我認為負責人是參謀長聯席會議副主席。那是最終的決策者。我相信這就是報道的內容。我相信空軍官員已經非常明確地表示，Replicator 與他們的 CCA 計劃完全分開。我相信這已經被報導了。這是兩個完整的計劃 - 而且 - 我相信 Replicator 相關人員也已公開報導他們已經確定了資金來源。我對此有所了解。這就是為什麼我非常謹慎地選擇我的措辭。他們已經確定了資金以及他們希望如何在未來幾年部署數千筆資金。這就是我的框架。他們討論了 RDER 基金。我提到了 RDER 基金，RDER 基金。你應該看看那個。這是一個關於此事的花絮。還有其他一些你可以把這些點連結起來的地方，我想你可以看到錢從哪裡來。

Okay. But I guess, most importantly, it's not a program of record, but there's money behind it, which is I guess is what matters.

好的。但我想，最重要的是，這不是一個記錄在案的計劃，但它背後有資金，我想這才是重要的。

That is what [OSD] is saying. Absolutely.

這就是[OSD]所說的。絕對地。

Okay. Okay. Last one for me, just on just Powered JDAM, I guess your press release was the first time I heard about that. But are we kind of early days in development of Powered JDAM and maybe it will be a few years before a production would start? Is that the right way to think about that?

好的。好的。我的最後一篇，就在 Powered JDAM 上，我想你的新聞稿是我第一次聽到這一點。但我們是否還處於 Powered JDAM 開發的早期階段，也許需要幾年時間才能開始生產？這是正確的思考方式嗎？

If you could see me, buddy, I'm smiling ear to ear. I cannot get ahead of our Boeing partner, I cannot. However we're standing up a production factory, as I mentioned, to do some things, and I'll leave it at that.

如果你能看到我，夥計，我會笑得合不攏嘴。我無法領先我們的波音合作夥伴，我不能。然而，正如我所提到的，我們正在建立一個生產工廠來做一些事情，我就到此為止。

(Operator Instructions) Our next question comes from Sheila Kahyaoglu with Jefferies.

（操作員說明）我們的下一個問題來自 Jefferies 的 Sheila Kahyaoglu。

I know it was somewhat asked, but I wanted to get into more detail. Eric, can you talk about the tactical drone programs showing some of the biggest promise here, Valkyrie, Mako and Air Wolf. Can you just talk about potential scenarios for '24 on those 3 programs?

我知道有人問過這個問題，但我想了解更多細節。艾瑞克（Eric），您能談談戰術無人機計畫嗎？您能談談 24 世紀這 3 個項目的潛在情況嗎？

Yes. The potential scenarios I'm comfortable talking about, Sheila, is we will continue to work with our customers in test and evaluation and mission development flights and scenarios. And that is what we modeled in for 2023, and it worked out, and that is what we're going to model in, in our base case 2024, that we will continue to sell drones, 2 here, 3 there, 4 here, for test and evaluation, RDT&E and S&T. But, no, we will not assume any production until it happens.

是的。希拉，我很樂意談論的潛在場景是，我們將繼續與客戶合作進行測試和評估以及任務開發飛行和場景。這就是我們為 2023 年建模的內容，它成功了，這就是我們將在 2024 年基本案例中建模的內容，我們將繼續銷售無人機，這裡 2 架，那裡 3 架，這裡 4 架，用於測試和評估、RDT&E 和S&T。但是，不，在它發生之前我們不會承擔任何生產。

Cool. And then Thanatos, you had an image in the press release on that one. And Athena, I think you brought back, you haven't talked about those 2, I think, since August 2022. So maybe just what brought those back into the fold and just near-term milestones there?

涼爽的。然後塔納托斯，你在新聞稿中看到了那張照片。雅典娜，我想你帶回來了，我想，自 2022 年 8 月以來，你就沒有談論過這兩個。

Yes. Good question. Customer interest, that -- Sheila, it's that -- that's what it is. It's customer interest and customer funding. And as I said, we're in contract negotiation/discussions. I am confident these will turn into contract awards mid-next year or so, confident. And then we're going to go fly under funded contracts. Your question is indicative of there's a lot going on, and it's accelerating in the low-cost attritable drone area. And I believe it's because of what's going on in the world.

是的。好問題。客戶利益，就是這樣──希拉，就是這樣──就是這樣。這是客戶利益和客戶資金。正如我所說，我們正在進行合約談判/討論。我相信這些將在明年中期左右轉化為合約授予，並有信心。然後我們將根據資助合約進行飛行。你的問題顯示正在發生很多事情，而且在低成本可消耗無人機領域正在加速發展。我相信這是因為世界上正在發生的事情。

That concludes the question-and-answer session. At this time, I would like to turn it back to Eric DeMarco for closing remarks.

問答環節到此結束。現在，我想請艾瑞克‧德馬科（Eric DeMarco）做總結發言。

Okay. We appreciate you all joining us this afternoon and your interest and support in the company. And we'll be chatting with you after we close out the year. Thank you.

好的。我們感謝大家今天下午加入我們，以及你們對公司的興趣和支持。我們將在今年結束後與您交談。謝謝。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。