Mercury Systems Inc (MRCY) 2025 Q2 法說會逐字稿

Good day, everyone, and welcome to the Mercury Systems second-quarter fiscal 2025 conference call. Today's call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to the company's Vice President of Investor Relations, Tyler Hojo. Please go ahead, Mr. Hojo.

大家好，歡迎參加 Mercury Systems 2025 財年第二季電話會議。今天的通話正在錄音。現在，在致開幕詞和介紹的時候，我想將電話轉給公司投資者關係副總裁 Tyler Hojo。請繼續，Hojo先生。

Good afternoon and thank you for joining us. With me today is our Chairman and Chief Executive Officer, Bill Ballhaus; and our Executive Vice President and CFO, Dave Farnsworth.

下午好，感謝您加入我們。今天與我在一起的是我們的董事長兼執行長比爾鮑爾豪斯 (Bill Ballhaus)；以及我們的執行副總裁兼財務長 Dave Farnsworth。

If you have not received a copy of the earnings press release we issued earlier this afternoon, you can find it on our website at mrcy.com. The slide presentation that we will be referencing to is posted on the Investor Relations section of the website under Events and Presentations.

如果您還沒有收到我們今天下午早些時候發布的收益新聞稿，您可以在我們的網站 mrcy.com 上找到它。我們將參考的幻燈片簡報已發佈在網站的「活動和簡報」下的「投資者關係」部分。

Turning to slide 2 in the presentation, I'd like to remind you that today's presentation includes forward-looking statements, including information regarding Mercury's financial outlook, future plans, objectives, business prospects, and anticipated financial performance. These forward-looking statements are subject to future risks and uncertainties that could cause our actual results or performance to differ materially. All forward-looking statements should be considered in conjunction with the cautionary statements on slide 2, in the earnings press release, and the risk factors included in Mercury's SEC filings.

翻到簡報的第 2 張投影片，我想提醒您，今天的簡報包含前瞻性陳述，包括有關 Mercury 的財務前景、未來計劃、目標、業務前景和預期財務業績的資訊。這些前瞻性陳述受未來風險和不確定性的影響，可能導致我們的實際結果或績效有重大差異。所有前瞻性陳述應與收益新聞稿中第 2 頁的警示聲明以及 Mercury 的 SEC 文件中包含的風險因素一起考慮。

I'd also like to mention that in addition to reporting financial results in accordance with generally accepted accounting principles or GAAP, during our call, we will also discuss several non-GAAP financial measures, specifically adjusted income, adjusted earnings per share, adjusted EBITDA, and free cash flow. A reconciliation of these non-GAAP metrics is included as an appendix to today's slide presentation and in the earnings press release.

我還想提一下，除了按照公認會計原則或 GAAP 報告財務結果外，在電話會議中，我們還將討論幾個非 GAAP 財務指標，特別是調整後的收入、調整後的每股收益、調整後的 EBITDA 和自由現金流。這些非公認會計準則指標的對帳作為附錄包含在今天的幻燈片簡報和收益新聞稿中。

I'll now turn the call over to Mercury's Chairman and CEO, Bill Ballhaus. Please turn to slide 3.

現在我將把電話轉給 Mercury 董事長兼執行長 Bill Ballhaus。請翻到幻燈片 3。

Thanks, Tyler. Good afternoon. Thank you for joining our Q2 FY25 earnings call. We delivered solid results in Q2 that we're once again in line with or ahead of our expectations, and I'm optimistic about our ongoing efforts to improve performance as we move through the fiscal year.

謝謝，泰勒。午安.感謝您參加我們的 2025 財年第二季財報電話會議。我們在第二季度取得了穩健的業績，再次達到或超越了我們的預期，我對我們在整個財年中持續努力提高業績感到樂觀。

Today, I'd like to cover three topics: first, some introductory comments on our business and results; second, an update on our four priorities, delivering predictable performance, building a thriving growth engine, expanding margins, and driving improved free cash flow; and third, performance expectations for FY25 and longer term. Then I'll turn it over to Dave, who will walk through our financial results in more detail.

今天，我想講三個主題：首先，對我們的業務和業績做一些介紹性的評論；第二，更新我們的四大優先事項，即實現可預測的業績、打造蓬勃發展的成長引擎、擴大利潤率、推動改善自由現金流；第三，對25財年及更長遠的業績預期。然後我將把它交給戴夫，他將更詳細地介紹我們的財務結果。

Before jumping in, I'd like to thank our customers for their collaborative partnership and the trust they put in Mercury to support the most critical programs and our Mercury team for their dedication and commitment to delivering mission critical processing at the edge.

在開始之前，我要感謝我們的客戶的合作夥伴關係以及他們對 Mercury 的信任，感謝他們支持最關鍵的項目，也感謝我們的 Mercury 團隊對在邊緣提供關鍵任務處理的奉獻和承諾。

Please turn to slide 4. Our Q2 results reinforce my confidence in our strategic positioning and our expectations in delivering predictable organic growth with expanding margins and robust free cash flow; bookings of $242 million and a trailing book to bill of 1.12; revenue of $223 million, up 13% year over year; adjusted EBITDA of 22 million and adjusted EBITDA margin of 9.9%, both up substantially year over year; and record free cash flow of $82 million, up $44 million year over year. We ended Q2 with $243 million of cash on hand.

請翻到幻燈片 4。我們的第二季業績增強了我對我們的策略定位的信心，以及我們實現可預測的有機成長、擴大利潤率和強勁的自由現金流的期望；訂單金額為 2.42 億美元，後續訂單出貨比為 1.12；營收 2.23 億美元，年增 13%；調整後 EBITDA 為 2,200 萬，調整後 EBITDA 利潤率為 9.9%，均較去年同期大幅成長；自由現金流達 8,200 萬美元，較上年同期增加 4,400 萬美元。我們第二季結束時手頭上有 2.43 億美元現金。

These results reflect continued progress in each of our four priority areas with highlights that include solid execution across our broad portfolio of production and development programs, a record backlog of $1.4 billion, reduced operating expense enabling increased positive operating leverage, and continued progress on free cash flow drivers with net working capital down $115 million year over year, or 19.5%. Please turn to slide 5.

這些結果反映了我們四個優先領域中的持續進展，亮點包括我們廣泛的生產和開發項目組合的穩健執行、創紀錄的 14 億美元積壓訂單、降低的運營費用從而增加了正運營槓桿，以及自由現金流驅動因素的持續進展，淨營運資本同比下降 1.15 億美元，即 19.5%。請翻到投影片 5。

Starting now with our four priorities. And priority one, delivering predictable performance. In the second quarter, our focus on predictable performance positively impacted our results, primarily in three areas. First, we continue to make progress mitigating what we believe to be predominantly transitory impacts as discussed over the last several quarters. In Q2, we recognized approximately 4.4 million of net EAC change impacts across our portfolio, which is the lowest in the last few years and reflects the progress we are making in maturing our processes in program management, engineering, and operations.

現在從我們的四個優先事項開始。首要任務是提供可預測的效能。在第二季度，我們對可預測業績的關注對我們的業績產生了積極影響，主要體現在三個方面。首先，正如過去幾個季度所討論的那樣，我們在減輕我們認為主要是暫時性影響方面繼續取得進展。在第二季度，我們確認整個投資組合中的 EAC 淨變更影響約為 440 萬，這是過去幾年中的最低水平，反映了我們在完善專案管理、工程和營運流程方面所取得的進展。

Second, we continue to make progress in the quarter, ramping production in our common processing architecture product area. We expect to have our full capacity become available as we move through the second half of the year. This progress is enabling follow-on production awards, as we discussed last quarter, and led to a notable takeaway in Q2 from a processor-board competitor that wasn't able to meet the security requirements provided by our common processing architecture.

其次，我們在本季持續取得進展，提高了通用處理架構產品領域的產量。我們預計，到今年下半年，我們的全部產能將得以實現。正如我們上個季度所討論的那樣，這一進展使得後續生產獎項成為可能，並導致我們在第二季度從無法滿足我們通用處理架構所提供的安全要求的處理器板競爭對手那裡獲得了顯著的收益。

This reflects our ability to take share in this attractive market segment based on our technology leadership position. And third, our focus on accelerating customer deliveries generated a $29 million or 31% year-over-year increase in point-in-time revenue, the majority of which was driven by pull-forward deliveries and revenue from Q3.

這反映了我們憑藉技術領先地位在這個富有吸引力的細分市場中佔據份額的能力。第三，我們專注於加速客戶交付，產生了 2,900 萬美元或 31％ 的即時收入，其中大部分是由提前交付和第三季的收入推動的。

Please turn to slide 6. Moving on to priority two, driving organic growth. Solid Q2 bookings of $242 million resulted in a record backlog of $1.4 billion. In line with our expectations, over 80% of trailing 12-month bookings were production in nature, which has driven a makeshift toward production. In line with this shift, we recently announced a workforce restructuring to align our team composition with this increased production mix.

請翻到幻燈片 6。繼續第二個優先事項，推動有機成長。第二季訂單量穩定，達到 2.42 億美元，積壓訂單量達到創紀錄的 14 億美元。正如我們預期的那樣，過去 12 個月的訂單中有超過 80% 屬於生產性質，這推動了臨時生產的出現。為了適應這一轉變，我們最近宣布了勞動力重組，以使我們的團隊結構與增加的生產組合保持一致。

Some wins in the quarter worth noting. A development contract from the US defense prime contractor, where we will replace and upgrade a competitors' existing processing capabilities with a solution leveraging a common processing architecture. Our additional protection features enable the system to be eligible for export to allied nations to support [for] deployed operations.

本季的一些勝利值得注意。這是一份來自美國國防主承包商的開發合同，我們將利用利用通用處理架構的解決方案來取代和升級競爭對手現有的處理能力。我們的附加保護功能使該系統有資格出口到盟國，以支援部署的行動。

A $24.5 million dollar contract to develop a data processing and storage subsystem for a US defense department satellite program. Under this contract, with an innovative space systems prime contractor, we will deliver a number of subsystems that leverage our commercial products and deep expertise in data recording, data processing, and subsystem integration for defense applications.

一份價值 2450 萬美元的合同，用於為美國國防部衛星項目開發數據處理和存儲子系統。根據該合同，我們將與一家創新空間系統主承包商合作，提供一系列子系統，這些子系統利用我們的商業產品和在數據記錄、數據處理和子系統集成方面的深厚專業知識，用於國防應用。

Two awards with Naval Air Systems Command, a $16.5 million dollar delivery order for data transfer units, and a $14 million dollar contract option for high-definition video recorders that support US and allied military aircraft, and following production awards for two long-running US Navy programs of record, supported by multiple lines of business, and two key US Air Force programs of record, where Mercury is the sole source provider of memory modules.

與海軍航空系統司令部簽訂的兩項合約包括一份價值 1,650 萬美元的數據傳輸單元交付訂單和一份價值 1,400 萬美元的可選合同，用於支持美國及其盟軍軍用飛機的高清視頻錄像機，以及隨後與兩個長期運行的美國海軍記錄項目（由多個業務線支持）和兩個關鍵的美國記錄項目簽訂的生產商記錄項目的唯一內存。

These awards are important not only because of their value and impact on our growth trajectory, but also because they reflect those customers' trust in Mercury to support their most critical franchise programs. We know from engagements with our customers that our unique capabilities providing mission critical processing at the edge, align well with their priorities and what we believe is strong demand in growth markets, including sensors and effectors, electronic warfare, avionics, C4I, and space. All in all, Q2 is a good bookings quarter with multiple competitive wins, where we believe we are growing share based on our technical differentiation.

這些獎項之所以重要，不僅因為它們的價值和對我們成長軌蹟的影響，還因為它們反映了客戶對 Mercury 支持其最關鍵的特許經營計劃的信任。我們從與客戶的合作中了解到，我們在邊緣提供關鍵任務處理的獨特能力與他們的優先事項非常吻合，而且我們認為成長市場（包括感測器和效應器、電子戰、航空電子設備、C4I 和空間）的需求強勁。總體而言，第二季度是一個預訂量良好的季度，在多個競爭中獲勝，我們相信，憑藉技術差異化，我們的份額正在不斷增長。

Please forward to slide 7. Now turning to priority three, expanding margins. As we've discussed in prior calls, in our efforts to achieve our targeted adjusted EBITDA margins in the low- to mid-20% range, we are focused on the following levers, executing on our development programs and minimizing cost growth impacts, getting back toward a more historical 20-80 mix of development to production programs, driving organic growth to generate positive operating leverage, and achieving cost efficiencies.

請轉發至投影片 7。現在轉向第三個優先事項，即擴大利潤。正如我們在先前的電話會議中討論的那樣，為了實現 20% 中低水平的調整後 EBITDA 利潤率目標，我們專注於以下槓桿：執行我們的開發計劃並儘量減少成本增長的影響，恢復到歷史性的 20-80 的開發與生產計劃組合，推動有機增長以產生積極的經營槓桿，並實現成本效率。

Q2 adjusted EBITDA margin of 9.9% was in line with our expectations and indicative of progress on each of these levers in our effort to reach our targeted margins over time. Gross margin of 27% was in line with our expectations and largely driven by the average margin in our backlog coming into FY25.

第二季調整後的 EBITDA 利潤率為 9.9%，符合我們的預期，並表明我們在努力實現目標利潤率的過程中，每個槓桿都取得了進展。27% 的毛利率符合我們的預期，這主要得益於 2025 財年的積壓訂單平均利潤率。

As we've discussed over the last two quarters, our backlog margin coming out of FY24 was lower than what we expect to see on a go-forward basis, driven primarily by a small number of low-margin development programs and programs that incurred adverse net EAC change impacts in FY24. We expect backlog margin to increase going forward as we continue to bring in new bookings as we did, once again, in Q2, that we believe will be in line with our targeted margin profile and accretive to the current average margin in our backlog.

正如我們在過去兩個季度所討論的那樣，2024 財年的積壓訂單利潤率低於我們預期的未來水平，這主要是由於少數低利潤率的開發項目和在 2024 財年產生不利的淨 EAC 變化影響的項目所致。我們預計，隨著我們繼續帶來新的訂單（就像我們在第二季度所做的那樣），積壓訂單利潤率將會增加，我們相信這將符合我們的目標利潤率狀況，並將增加我們積壓訂單的當前平均利潤率。

Operating expenses, specifically R&D and SG&A, are down significantly year over year as a result of prior and ongoing actions to streamline and focus our operations. As expected, R&D levels increased sequentially in the quarter.

由於我們之前和現在採取的簡化和集中營運的措施，營運費用（特別是研發費用和銷售、一般及行政費用）較去年同期大幅下降。如預期，本季的研發水準較上季增加。

Please forward to slide 8. Finally, turning to priority four, improve free cash flow. We continue to make significant progress on the drivers of free cash flow, and in particular, in reducing net working capital, which at $475 million is at the lowest level since Q3 of FY22. Notably, combined free cash flow over the last three quarters is approximately $122 million, and net debt is down to $349 million, the lowest level since Q2 of FY22. We believe our continuous improvement related to program execution and hardware delivery, just-in-time material and appropriately timed payment terms will lead to continued reduction in working capital and improved free cash flow performance going forward.

請轉發至幻燈片 8。最後，談談第四個優先事項，改善自由現金流。我們在自由現金流驅動方面繼續取得重大進展，特別是在減少淨營運資本方面，目前淨營運資本為 4.75 億美元，處於 22 財年第三季以來的最低水準。值得注意的是，過去三個季度的綜合自由現金流約為 1.22 億美元，淨債務降至 3.49 億美元，為 22 財年第二季以來的最低水準。我們相信，我們在專案執行和硬體交付、準時材料和適時付款條件方面的持續改進將導致營運資本持續減少和未來自由現金流表現的改善。

Please turn to slide 9. Looking ahead, I am optimistic about our team, our leadership position in delivering mission critical processing at the edge, and our expected ability over time to deliver results in line with our target profile of above-market top-line growth, adjusted margins in the low- to mid-20% range, and free cash flow conversion of 50%.

請翻到第 9 張投影片。展望未來，我對我們的團隊、我們在邊緣提供關鍵任務處理方面的領導地位以及我們隨著時間的推移實現符合目標業績的預期能力感到樂觀，即實現高於市場的營收成長、調整後的利潤率在 20% 到 20% 之間，自由現金流轉換率為 50%。

As we discussed last quarter, although we will not be providing specific guidance for FY25, I will update the color we previously discussed. First half revenue, up 13% year over year, exceeded our expectation that the first half would be in line with last year. The overperformance was largely driven by the acceleration of about $30 million in customer deliveries and revenue into Q2 from Q3. For full year FY25, we now expect revenue growth approaching mid-single digits year over year versus our prior expectation that revenue growth would be relatively flat.

正如我們上個季度所討論的那樣，雖然我們不會為 FY25 提供具體指導，但我將更新我們之前討論過的顏色。上半年營收年增13％，超出了我們對上半年與去年同期持平的預期。業績超額完成的主要原因是第二季的客戶交付量和收入從第三季加速成長了約 3,000 萬美元。對於 25 財年全年，我們目前預計營收成長將接近同比中個位數，而我們先前預期營收成長將相對持平。

As we discussed last quarter, our current backlog margin is lower than what we expect to see on a go-forward basis, driven primarily by a small number of low-margin development programs and programs that incurred adverse net EAC change impacts in FY24. Although we are encouraged that our recent quarter of the bookings are accreted to our overall backlog margin, we continue to expect low double digit adjusted EBITA margins overall for FY25 as we complete lower-margin development efforts and continue to shift our mix toward production. We expect Q4 adjusted EBITDA margins to be the highest level of the fiscal year.

正如我們上個季度所討論的那樣，我們目前的積壓訂單利潤率低於我們預期的未來水平，這主要是由於少數低利潤率的開發項目和在 24 財年產生不利的淨 EAC 變化影響的項目所致。儘管我們很高興看到最近一個季度的訂單已累積到我們的整體積壓訂單利潤率中，但隨著我們完成利潤率較低的開發工作並繼續將產品組合轉向生產，我們預計 25 財年整體調整後 EBITA 利潤率仍將保持在低兩位數。我們預計第四季度調整後的 EBITDA 利潤率將達到本財年的最高水準。

Finally, with respect to free cash flow, we continue to expect to be cash flow positive in FY25. Given the large acceleration of cash from Q3 into the first half and first-half free cash flow of $61 million, which is well ahead of our prior expectations, we expect free cash flow to be around breakeven in the second half.

最後，關於自由現金流，我們繼續預期 25 財年的現金流將為正值。鑑於第三季現金流入上半年大幅加速，且上半年自由現金流為 6,100 萬美元，遠超我們先前的預期，我們預計下半年自由現金流將達到損益兩平。

In summary, given the operational improvements over the last several quarters and our recent momentum, I expect that our performance in FY25, in particular, our exit run rate, will represent a positive step toward our target profile. Given our progress in the first half and our momentum heading into the second half, I look forward to providing additional insights relative to our expectations for a full-year performance as we progress through the back half of the year.

總而言之，鑑於過去幾個季度的營運改善和我們最近的勢頭，我預計我們在 25 財年的業績，特別是我們的退出運行率，將朝著我們的目標邁出積極的一步。鑑於我們上半年取得的進展以及下半年的發展勢頭，我期待在下半年提供更多有關我們對全年業績的預期的見解。

With that, I'll turn it over to Dave to walk through the financial results for the second quarter, and I look forward to your questions. Dave?

接下來，我將把時間交給戴夫來介紹第二季度的財務業績，我期待您的提問。戴夫？

Thank you, Bill. Our second quarter results reflect solid progress toward our goal of positioning the business to deliver predictable performance characterized by organic growth, expanding margins, and robust free cash flow. There is still work to be done, but we are encouraged by the progress we have made and expect the second half of fiscal 2025 revenue and adjusted EBITDA margins to improve over the first half.

謝謝你，比爾。我們第二季的業績反映出我們在實現業務定位的目標方面取得了堅實的進展，即實現可預測的業績，其特點是有機增長、利潤率不斷提高和自由現金流強勁。仍有工作要做，但我們對所取得的進展感到鼓舞，並預計 2025 財年下半年的收入和調整後的 EBITDA 利潤率將比上半年有所提高。

Our continued progress in our priority areas is highlighted by a few key milestones that we achieved during the second quarter. This includes delivering improved operating performance, making additional progress in ramping production in our common processing architecture product area, and continuing to expand our record backlog.

我們在第二季度取得的幾個關鍵里程碑凸顯了我們在重點領域的持續進展。這包括提高營運績效、在通用處理架構產品領域的產量方面取得進一步進展以及繼續擴大我們的創紀錄積壓訂單。

With that, please turn the slide 10, which details our second-quarter results. Our bookings for the quarter were $242 million with a book to bill of 1.09, yielding a backlog of $1.4 billion, up $77 million or 6% year over year. Revenues for the first quarter were $223 million, up $26 million or 13% compared to the prior year. The increase is primarily driven by higher point-in-time revenue of $29 million, largely accelerated from Q3 as we continue to focus on delivering for our customers.

請翻到第 10 張投影片，上面詳細介紹了我們的第二季業績。本季我們的訂單量為 2.42 億美元，訂單出貨比為 1.09，積壓訂單量為 14 億美元，比去年同期增加 7,700 萬美元，增幅 6%。第一季的營收為 2.23 億美元，比上年增加 2,600 萬美元，增幅 13%。成長主要得益於 2,900 萬美元的即時收入成長，由於我們繼續專注於為客戶提供服務，該成長速度較第三季大幅加快。

Gross margin for the second quarter increased to 27.3% from 16% in the same quarter last year. The increase in gross margin during the current quarter was primarily driven by a reduction in the net EAC change impact on our programs recognized over time, so 4 million as compared to 31 million in the same quarter last year, and lower inventory reserves of approximately 12 million.

第二季毛利率由去年同期的16%上升至27.3%。本季毛利率的成長主要由於 EAC 淨變動對我們一段時間內確認的項目的影響減少，因此為 400 萬美元，而去年同期為 3,100 萬美元，庫存儲備減少約 1,200 萬美元。

These improvements in gross margin were partially offset by higher manufacturing adjustments of approximately $4 million. As Bill previously noted, we expect to see an improvement in our gross margin performance over time as the average margin in our backlog improves, resulting from newer awards at targeted margins.

毛利率的提高被約 400 萬美元的較高製造調整部分抵消。正如比爾之前所說，我們預計，隨著時間的推移，我們的毛利率表現將有所改善，這是由於我們積壓訂單的平均利潤率因目標利潤率的新獎勵而提高。

Operating expenses decreased approximately $12 million year over year, primarily due to lower R&D and SG&A expenses. These decreases were driven by the actions taken in fiscal 2024 to improve our performance by consolidating and simplifying our operations.

營業費用較去年減少約 1,200 萬美元，主要由於研發和銷售、一般及行政費用減少。這些下降是由於我們在 2024 財年採取了行動，透過整合和簡化營運來提高業績。

GAAP net loss and loss per share in the second quarter were approximately $18 million and $0.30 respectively, as compared to GAAP net loss and loss per share of $46 million and $0.79 respectively in the same quarter last year. The improvement in year-over-year earnings is primarily a result of increased revenue and the associated gross margin coupled with reduced operating expenses.

第二季 GAAP 淨虧損和每股虧損分別約為 1,800 萬美元和 0.30 美元，而去年同期 GAAP 淨虧損和每股虧損分別為 4,600 萬美元和 0.79 美元。年比收益的成長主要得益於收入和相關毛利率的增加以及營運費用的減少。

Adjusted EBITDA for the second quarter was approximately $22 million compared to negative $21 million in the same quarter last year. Adjusted earnings per share were $0.07 as compared to adjusted loss per share of $0.42 in the prior year. The year-over-year increase was primarily related to lower net losses in the current period as compared to the prior-year period.

第二季調整後 EBITDA 約 2,200 萬美元，去年同期為負 2,100 萬美元。調整後每股收益為 0.07 美元，而去年調整後每股虧損為 0.42 美元。年增主要因為本期淨虧損較去年同期下降。

Free cash flow for the second quarter was a record of nearly $82 million as compared to approximately $38 million in the prior year. The significant increased cash flow was primarily driven by the improvement in cash provided by operating activities of approximately $40 million in the current year as compared to the prior year.

第二季的自由現金流創下近 8,200 萬美元的記錄，而去年同期約為 3,800 萬美元。現金流大幅增加，主要由於本年度經營活動提供的現金較上年同期增加約 4,000 萬美元。

Slide 11 presents Mercury's balance sheet for the last five quarters. We ended the second quarter with cash and cash equivalents of approximately $243 million, driven primarily by approximately $85 million in cash provided by operations and investments of approximately $4 million in capital expenditures.

投影片 11 展示了 Mercury 過去五個季度的資產負債表。截止第二季度，我們的現金和現金等價物約為 2.43 億美元，主要得益於經營活動提供的約 8,500 萬美元現金以及約 400 萬美元的資本支出投資。

Billed receivables decreased approximately $20 million or 16% sequentially. Unbilled receivables decreased year over year and sequentially by approximately $72 million or 21% and $20 million or 7% respectively. These decreases reflect the incremental progress we've made by delivering on programs to our customers, which significantly drove our cash flow performance during the current quarter.

應收帳款比上一季減少約 2,000 萬美元，降幅 16%。未開立發票應收帳款較去年同期分別減少約 7,200 萬美元（減幅 21%）和 2,000 萬美元（減幅 7%）。這些下降反映了我們透過向客戶實施計畫所取得的漸進式進展，這極大地推動了我們本季的現金流表現。

Inventory decreased slightly year over year and sequentially by approximately $10 million and $7 million respectively. The current quarter balance also included approximately $15 million of material receipts supporting milestone invoicing, which largely drove the increase in our deferred revenue of nearly $40 million. These material receipts partially offset our decrease in inventory from accelerated point-in-time revenue. This increase in milestone invoicing activity reflects the progress we've made to better align the payment structure of our contracts to match the corresponding cash outflows of these arrangements. Accounts payable decreased approximately $10 million sequentially driven by the timing of payments to our suppliers.

庫存同比和環比分別略有減少約 1000 萬美元和 700 萬美元。本季度餘額還包括約 1500 萬美元的支援里程碑發票的材料收據，這在很大程度上推動了我們近 4000 萬美元的遞延收入的增加。這些材料收入部分抵消了我們因加速時點收入而導致的庫存減少。里程碑發票活動的增加反映了我們在更好地調整合約付款結構以匹配這些安排相應的現金流量方面所取得的進展。由於向供應商付款的時間安排，應付帳款較上月減少約 1,000 萬美元。

Accrued expenses decreased approximately $2 million sequentially, primarily due to payments under our restructuring taken in fiscal 2024. Deferred revenues increased year over year and sequentially by approximately $55 million and $40 million respectively as a result of additional milestone billing events achieved during the period. Working capital decreased in the second quarter, approximately $115 million year over year, or 20% and decreased by $89 million or 16% sequentially.

應計費用較上季減少約 200 萬美元，主要原因是我們在 2024 財年進行了重組支付。由於本期間實現了額外的里程碑計費事件，遞延收入同比和環比分別增加約 5500 萬美元和 4000 萬美元。第二季營運資本減少，年減約 1.15 億美元，降幅 20%，季減 8,900 萬美元，降幅 16%。

This demonstrates the progress we've made in reversing the multi-year trend of growth in working capital, highlighted by five quarters of sequential reductions in unbilled receivables, resulting in the lowest net working capital since Q3 fiscal '22. As a reference point, we have driven our net working capital in the last three quarters from a high of 72% of trailing 12-month revenue to under 54%. Net working capital remains a primary focus area, and we believe we can continue to deliver improvement.

這顯示我們在扭轉營運資本多年成長趨勢方面取得了進展，突顯表現是未開立應收帳款連續五個季度減少，導致淨營運資本達到22財年第三季以來的最低水準。作為參考，我們在過去三個季度中已將淨營運資本從過去 12 個月收入的 72% 的高點降至 54% 以下。淨營運資本仍然是主要關注領域，我們相信我們能夠繼續取得進步。

Turning to cash flow on slide 12. Free cash flow for the second quarter was approximately $82 million as compared to $38 million in the prior year. We believe our continuous improvement related to program execution and hardware delivery, just-in-time material, and appropriately timed payment terms will lead to continued reduction in working capital and improved free cash flow performance going forward.

轉向第 12 張投影片上的現金流量。第二季的自由現金流約為 8,200 萬美元，而去年同期為 3,800 萬美元。我們相信，我們在程序執行和硬體交付、準時材料和適當付款條件方面的持續改進將導致營運資本持續減少和未來自由現金流表現的改善。

In closing, we are pleased with the first-half performance to the fiscal year and the higher level of predictability in the business. We believe continuing to execute on our four priority focus areas will not only drive revenue growth and profitability, but will also result in further margin expansion and cash conversion, demonstrating the long-term value creation potential of our business.

最後，我們對本財年上半年的業績以及業務的更高可預測性感到滿意。我們相信，繼續執行我們的四個重點關注領域不僅將推動收入成長和獲利能力，還將進一步擴大利潤率和現金轉換，展現我們業務的長期價值創造潛力。

With that, I'll now turn the call back over to Bill.

說完這些，我現在將電話轉回給比爾。

Thanks, Dave. With that, operator, please proceed with the Q&A.

謝謝，戴夫。那麼，接線員，請繼續問答。

Thank you. (Operator Instructions)

謝謝。（操作員指令）

Pete Skibitski, Alembic Global.

皮特·斯基比茨基（Pete Skibitski），Alembic Global。

Hey, good evening, guys. Great quarter. It looks like even excluding the pull-forward revenue, it is still a strong quarter, especially on the cash flow side. So Bill, I'll ask a question I've asked before, but maybe this is the last time I need to ask it. Just can you talk about the progress in the second quarter on the CPA kind of processes and programs in terms of the maturity there? Are there any kind of technical risks to remain at this point, or is it just a matter of slowly kind of ramping from LRIP to full-rate production on the programs?

嘿，大家晚上好。非常棒的一個季度。看起來，即使不包括前期收入，這仍然是一個強勁的季度，尤其是在現金流方面。所以比爾，我會問一個我以前問過的問題，但也許這是我最後一次問了。您能否談談第二季 CPA 流程和計劃的成熟度進展？目前還存在什麼技術風險嗎，還是說這只是一個從 LRIP 慢慢過渡到全速生產的專案？

Yeah, Pete. Thanks. Well, first of all, thanks for the comments up front. And I would characterize our progress on CPA as planned and consistent with what we discussed previously. We are ramping the full-rate production. We expect to get our capacity to be fully available as we move through the back half of the year.

是的，皮特。謝謝。嗯，首先感謝您之前的評論。我認為我們在 CPA 方面的進展是符合計劃的，並且與我們之前討論的一致。我們正在全力提高產量。我們預計，到今年下半年，我們的產能將全面恢復。

And of course, how we use that capacity will benefit the business in a number of ways. We've already seen as we brought production online that we've received significant production awards. We talked about that in Q1. We had a really nice takeaway from a competitor based on our technical differentiation this quarter. That's been another benefit. And as we progress through the second half, we'll be able to allocate that capacity to drive revenue performance and deliver for our customers on new awards and continue to burn down unbilled balances, where we have receivables on older contracts.

當然，我們如何利用這種能力將在許多方面使企業受益。我們已經看到，隨著我們開始在線生產，我們獲得了重要的生產獎。我們在第一季討論過這個問題。本季度，我們憑藉技術差異化，從競爭對手那裡獲得了非常好的收益。這是另一個好處。隨著下半年的進展，我們將能夠分配該產能來推動收入表現，為我們的客戶提供新的獎項，並繼續消耗未開票餘額，即舊合約中的應收帳款。

So continued progress, all sort of normal course at this point and very much progressing to plan and consistent with what we've discussed previously.

因此，進展持續，目前一切都在正常進行，並且正在按照計劃順利進行，與我們之前討論的內容一致。

Okay. That's great. Just one more for me. As you guys build confidence in that system, I'll call it, can you talk about order flow? Backlog is kind of inched upward in the first half of the year, we can say, I think. How are we expecting order flow to trend in the second half of the year should that accelerate, or kind of in conjunction, how's the continuing resolution been impacting order flow? Thanks.

好的。那太棒了。對我來說僅此一項。當你們對該系統建立信心時，我會稱之為，你能談談訂單流嗎？我認為，可以說，上半年積壓訂單量上升。如果訂單流加速，我們預計下半年訂單流將如何變化？謝謝。

Yeah. I don't get too granular in focusing in on orders by quarter because like cash, it can be a little bit lumpy. I do think that our trailing 12-months book the bill of 1.12 is reflective of solid performance. And as we're looking forward, we still feel really confident about not only our strategic positioning, which we've talked about consistently, but also the enduring demand drivers and the need for mission critical processing at the edge.

是的。我不會太細緻地關注按季度劃分的訂單，因為就像現金一樣，它可能有點不均勻。我確實認為，我們過去 12 個月的帳面收入 1.12 反映了穩健的表現。展望未來，我們不僅對我們一直談論的策略定位充滿信心，而且對持久的需求驅動因素和邊緣關鍵任務處理的需求也充滿信心。

So, all in all, I feel very optimistic about that outlook. Our trailing 12 month book to bill, I think it's solid at 1.12. And I think it positions as well for the second half of the year.

所以，總的來說，我對這個前景感到非常樂觀。我認為，我們過去 12 個月的訂單出貨比比率穩定在 1.12。我認為它對今年下半年的定位也很好。

Peter Arment, Baird.

彼得·阿門特，貝爾德。

Yeah. Good afternoon, Bill, Dave, Tyler. Welcome to the call. Congrats on the quarter. Obviously, a lot of progress being made here.

是的。下午好，比爾、戴夫、泰勒。歡迎來電。恭喜本季取得佳績。顯然，這裡已經取得了許多進展。

I guess I just want to understand the back half of the year free cash flow kind of breakeven commentary because I think you've made a tremendous amount of progress of bringing the unbilled down. And again, you saw evidence of that this quarter, but now you've also got this deferred revenue growth, and then I just want to understand how and whether that's tied to the new contract structure and on receiving the milestones. Or could you maybe just, Dave, walk us through a little bit of the dynamics of why there isn't positive -- still cash being generated in the second half.

我想我只是想了解今年下半年自由現金流的盈虧平衡評論，因為我認為你在降低未開票金額方面取得了巨大進展。再說一次，您在本季度看到了這方面的證據，但現在您還獲得了遞延收入增長，然後我只想了解這是如何以及是否與新合約結構和實現里程碑相關。或者，戴夫，你能否向我們簡單介紹為什麼下半年沒有產生現金？

Yeah. And as we said, Peter, when we looked at the first half, our cash was ahead of where we were expecting and some of that was driven by the milestones that we were able to achieve and drove as we saw a significant increase in our deferred revenue based on the timing of those milestones. So those milestones, as we work through the second half, will be performing effort against that cash that we've already received.

是的。正如我們所說的，彼得，當我們回顧上半年時，我們發現我們的現金超出了預期，其中一些是受到我們能夠實現的里程碑的推動，並且我們看到基於這些里程碑的時間安排，我們的遞延收入顯著增加。因此，在我們下半年的工作中，這些里程碑將根據我們已經收到的現金進行努力。

So we expect to see the deferred revenue come down as we get through the back half of the year. It does not mean that unbilled won't continue to be something that we're working aggressively on. But we do expect to see materials drawdown of that deferred revenue that was brought in those milestones that were completed earlier.

因此，我們預計，進入下半年後遞延收入將會下降。這並不意味著我們不會繼續積極努力解決未開票問題。但我們確實預計，那些先前完成的里程碑所帶來的遞延收入將大幅減少。

Ken Herbert, RBC Capital Markets.

加拿大皇家銀行資本市場部的肯‧赫伯特 (Ken Herbert)。

Hey. Good afternoon, Bill and Dave. You consistently talk now about sort of the longer-term opportunity to get adjusted EBITDA margins back into the 20% -- a low 20s range. Can you provide, without getting maybe too specific on timing -- but how does the business look when you get to that level? Is there a way we should think about that from a revenue standpoint, from an efficiency standpoint? Can you provide any more parameters around how you think about that, maybe from a timing standpoint or just operationally as you think about the business moving forward?

嘿。下午好，比爾和戴夫。您現在一直在談論將調整後的 EBITDA 利潤率重新回到 20%（20% 以下）的長期機會。您能否提供一下，也許不必太具體地說明時間——但是當達到那個水平時，業務會是什麼樣子？我們是否應該從收入的角度和效率的角度來考慮這個問題？您能否提供更多關於您如何考慮這個問題的參數，也許是從時間的角度，或者只是從營運的角度，考慮業務的未來發展？

Yeah, thanks for the question. Let me -- This is Bill. I'll take it. We've talked pretty consistently, for the last several quarters, about the main levers that we're focused on. And we've made progress on each of the levers.

是的，謝謝你的提問。讓我——我是比爾。我要買它。在過去的幾個季度中，我們一直在討論我們關注的主要槓桿。我們在每個槓桿上都取得了進展。

And I think as we're sitting here looking forward and thinking about the path to our target margins, I think there's really two primary things that we're focused on. One is the conversion of our backlog margin that we talked about, the fact that coming out of FY24, backlog margin was lower than what we expect to see on a go-forward basis, impacted by a small number of low-margin development programs and a number of programs that were impacted by EAC adjustments in FY24. And as we're progressing each quarter and we're bringing in new bookings, we're really pleased to see that the margin on those bookings are coming in in line with our target margins associated with our targeted EBITDA margins that we're working to get to.

我認為，當我們坐在這裡展望未來並思考實現目標利潤率的道路時，我們真正關注的是兩件主要的事情。一是我們談到的積壓訂單利潤率的轉換，事實上，在 24 財年，積壓訂單利潤率低於我們預期的未來水平，這受到少數低利潤率開發項目和一些受到 24 財年 EAC 調整影響的項目的影響。隨著我們每季的進展和新訂單的增加，我們非常高興地看到這些訂單的利潤率與我們正在努力實現的目標 EBITDA 利潤率一致。

So that's the dynamic that will play out over time. We haven't been specific around the timing where we expect the backlog margin to be at a place where it's consistent with our target margins, but we have a duration associated with our backlog. So you could do some thinking around how that might turn over over time. That's the first driver.

這就是隨著時間的推移將會顯現出來的動態。我們還沒有具體說明預計積壓訂單利潤率與我們的目標利潤率一致的具體時間，但是我們的積壓訂單有一個持續時間。因此，您可以思考隨著時間的推移這種情況將如何發生轉變。這是第一位司機。

And then the second is around our operating expense so that we can get positive operating leverage as we continue to drive volume. And I feel like at this place where we are with our operating expense, we've made significant progress over the last 18 months on our part of our cost structure and while we said before and it will continue to be a focus that will drive efficiencies into the business as we go forward on an ongoing basis, but I feel good about where our operating expenses relative to the positive operating leverage that we expect to see as part of our game plan to get to our targeted margins.

第二個是我們的營運費用，這樣我們就可以在繼續推動銷售的同時獲得積極的營運槓桿。我覺得就我們的營運費用而言，過去 18 個月我們在成本結構方面取得了重大進展，正如我們之前所說，這將繼續成為我們持續推進業務效率的重點，但我對我們的營運費用相對於正營運槓桿的情況感到滿意，我們預計這是我們實現目標利潤率的計劃的一部分。

So those are really the two pieces. And I feel like we're in a pretty good place in terms of understanding, where we are and being able to see those two moving pieces work together to get us to our targeted margins.

所以它們實際上是兩個部分。我覺得，就理解我們目前所處的位置而言，我們處於一個相當良好的位置，能夠看到這兩個活動部分共同努力，使我們達到目標利潤。

Seth Seifman, JPMorgan.

摩根大通的塞思‧塞夫曼 (Seth Seifman)。

Okay. Thanks very much and good afternoon and nice quarter. I guess just in thinking about the growth rate, you talk about above-market. Maybe just to put some parameters around that when you think about what market is, do you think about it kind of as the defense budget, which I think a lot of people think about, maybe a low to mid-single digit growth over time? Do you think about it as a more -- as a certain subset of the defense market that might be growing faster?

好的。非常感謝，下午好，本季度過得愉快。我想，只要考慮成長率，你就會談論高於市場的成長率。也許只是為了在您思考市場是什麼時對此提出一些參數，您是否將其視為國防預算，我認為很多人都會想到，隨著時間的推移，國防預算可能會呈現低到中等個位數的增長？您是否認為它是國防市場中可能成長更快的某個子集？

And then the second part of that question is the common processing architecture and when you're fully ramped up there, what role that plays in the mix and how that plays into your thoughts about the overall growth rate of the business as we look out over, let's say, a one- to three-year period.

然後，問題的第二部分是通用處理架構，當您完全投入使用時，它在組合中扮演什麼角色，以及在我們展望一到三年的時期內，這對您對業務整體成長率的看法有何影響。

Yeah. So as we discussed before, we're focused on delivering top-line growth that represents a growth rate -- above-market growth rate. And specifically the market that we're focused in on is the defense electronics -- Tier 3 defense electronics market with growth rates that are historically in the 5% to 6% range. And we believe for a number of reasons, in particular when we focus in on the subsegments of that market where we're well positioned and we focus, and in particular that's around delivering processing power and capability to the edge, those subsegments tend to grow a little bit faster, and we feel like we're very well positioned based on our technical differentiation to deliver growth that exceeds those market growth rates. So that's really what we mean by when we talk about our targeted growth rates.

是的。正如我們之前討論的那樣，我們專注於實現高於市場成長率的營收成長。具體來說，我們關注的市場是國防電子——三級國防電子市場，其歷史成長率在 5% 到 6% 之間。我們相信，出於多種原因，特別是當我們專注於我們處於有利位置的細分市場時，尤其是圍繞向邊緣提供處理能力和能力，這些細分市場往往會增長得更快一些，我們覺得，基於我們的技術差異化，我們處於非常有利的位置，可以實現超過市場增長率的增長。這就是我們所說的目標成長率的真正意義。

With respect to the common processing architecture, as we've worked through the technical challenges in that area and gotten those behind us and then ramp to full-rate production, it impacts our business in a number of different ways, positively. First, it unlocks bookings because a number of customers were holding back follow-on development and production awards. And so we had demonstrated we got to root cause, eliminated the technical risk, and then ramped up production. So it's opened up new production awards.

關於通用處理架構，隨著我們克服了該領域的技術挑戰並將其拋諸腦後，並開始全速生產，它在許多不同的方面對我們的業務產生了積極的影響。首先，它解鎖了預訂，因為許多客戶都保留了後續的開發和生產獎勵。因此，我們證明我們找到了根本原因，消除了技術風險，然後提高了產量。因此它開闢了新的製作獎。

It also now gives us the opportunity with the capacity becoming available to allocate that capacity in the way that makes the most sense, and that could be either burning down backlog and delivering new units and revenue that goes with it or allocating the capacity to more legacy programs that represent our unbuilt balances that when we deliver those units, there's less revenue associated with those units because the revenue has been recognized in prior periods, but it allows us to deliver the units, invoice our customers, and collect cash.

現在，它也使我們有機會利用可用的產能以最合理的方式分配產能，這可能是要么消耗積壓訂單並交付新單元以及隨之而來的收入，要么將產能分配給代表我們未建餘額的更多遺留計劃，當我們交付這些單元時，與這些單元相關的收入會減少，因為收入已在前期確認，但它使我們能夠交付單元、客戶開具。

So having that capacity online gives us a number of different degrees of freedom to drive performance and have it flow through our P&L into our cash flow statement and into the balance sheet. So hopefully, that's helpful.

因此，擁有這種線上能力為我們提供了不同程度的自由來推動業績，並使其透過我們的損益表流入我們的現金流量表和資產負債表。希望這會有所幫助。

Jonathan Ho, William Blair.

喬納森·何、威廉·布萊爾。

Hi. Let me echo my congratulations as well. I just wanted to get some additional color on what drove the $30 million in pull-forward contract activity. Was this concentrated in a handful or single program and was there sort of a customer impetus or a government directive to drive earlier deliveries? Thank you.

你好。我也謹此表示祝賀。我只是想進一步了解是什麼推動了 3,000 萬美元的提前合約活動。這是否集中在少數或單一專案中，是否有客戶推動或政府指令來推動提前交付？謝謝。

Yeah, thanks, Jonathan. Thanks for the comment up front and the question. For 18 months, we've been very consistent in the prioritized focus of the business with priority one being a focus on delivering predictable performance. Looking backward, a lot of that effort was focusing on completing the large mix of development programs in our portfolio, but it also includes a relentless focus on delivering for our customers. So a lot of what you've seen in our results for both Q1 and Q2 is the byproduct of our team being relentless on delivering for our customers.

是的，謝謝，喬納森。感謝您先前的評論和提問。18 個月以來，我們始終如一地將業務重點放在提供可預測的績效上。回顧過去，我們付出的許多努力都集中在完成我們產品組合中的大量開發項目上，但我們也堅持不懈地致力於為客戶提供服務。因此，您在第一季和第二季看到的許多業績都是我們團隊堅持不懈地為客戶提供服務的副產品。

And that shows up in two ways. It's delivering out of our backlog on new awards, delivering hardware associated with that backlog, getting it out the door, as well as working down our unbilled balances. In this quarter, really the overperformance was tied to point-in-time revenue, and those were on programs and for products, where based on that focus on delivering for our customers, we were able to pull to the left from our initial expectations. And that's what really drove the ship into the quarter.

這表現在兩方面。我們正在處理新獎項的積壓工作，提供與積壓工作相關的硬件，將其推出市場，同時減少我們的未付賬單餘額。本季的超額表現實際上與即時收入有關，這些收入來自專案和產品，基於為客戶提供服務的重點，我們能夠超越最初的預期。這才是推動該船進入本季的真正原因。

And Jonathan, I would add it was not a single contract or a single customer. It was multiple different products and customer sets. And again, as Bill said, as we're improving our capacity in our operational facilities, we were able to pull some things that we thought we would not get delivery on, and this point-in-time revenue is on delivery. We would not get revenue on and deliver in Q2. We were able to pull them forward out of Q3 and Q2 to deliver them early, get them to our [costs] earlier than expected, and get them to our customers. So positive all around.

喬納森，我想補充一點，這不是單一的合約或單一的客戶。它是多種不同的產品和客戶群。而且，正如比爾所說，隨著我們提高營運設施的能力，我們能夠撤出一些我們認為無法交付的東西，而這個即時收入是在交付時產生的。我們不會在第二季度獲得收入和交付。我們能夠將它們從第三季和第二季提前推出，以便儘早交付，比預期更早達到我們的[成本]，並將它們送到我們的客戶手中。一切都很積極。

And I think one of the things that was encouraging in the quarter is as we really focused our capacity, we were able to demonstrate both the pull-forward of deliveries to drive revenue and at the same time, finish off programs and drive down our unbilled receivables. And I think that's really a credit to our team, the improvement in our management system and our focus on delivering for our customers.

我認為本季令人鼓舞的事情之一是，由於我們真正集中了產能，我們既能夠提前交付以推動收入，同時又能夠完成專案並降低未開立應收帳款。我認為這確實歸功於我們的團隊、我們的管理系統的改進以及我們對為客戶提供服務的關注。

Michael Ciarmoli, Truist Securities.

Truist Securities 的 Michael Ciarmoli。

Hey. Good evening, guys. Thanks for taking the question. Nice results. Bill or Dave, maybe just to stay on that topic and get some more clarity. I mean, it sounds like the pull-forward was just basic blocking and tackling and delivering. Because if I -- when I hear pull-forward, I probably want to strip it out and your revenues would have been down year over year and down sequentially, but that doesn't seem like the way we should interpret this.

嘿。大家晚上好。感謝您回答這個問題。效果不錯。比爾 (Bill) 或戴夫 (Dave)，也許只是繼續討論這個話題並獲得更多清晰度。我的意思是，聽起來前拉只是基本的阻擋、鏟球和傳球。因為如果我—當我聽到「提前」這個詞時，我可能想把它去掉，你的收入就會逐年下降，並且連續下降，但這似乎不是我們應該解釋的方式。

And then I guess, to pull-forward and thinking about the back half of the year, so you've got mid-single digit revenue growth, kind of implies a flattish sequential trajectory. But what would drive -- in that flattish revenue environment for the rest of the year, what drives the margins higher, especially in the fourth quarter? Is that kind of what you were referencing with the bookings coming in at that targeted margin rate?

然後我想，展望未來並考慮今年下半年，你會發現營收成長率處於中等個位數，這意味著連續的軌跡趨於平穩。但是，在剩餘年度收入環境平淡的情況下，什麼因素會推動利潤率上升，尤其是在第四季？這就是您所指的以目標利潤率進行的預訂嗎？

Yeah. So let me start with the top line and the revenue movement within the period. And again I don't want to get too granular of the revenue between quarters, but I do want to remind everyone that in Q1, we had some pull-forward from Q2 into Q1 and then again from Q3 into Q2. Now if you normalize the volume and where it sits, it does sort of spread out the growth throughout the year to get a more balanced and consistent growth between the first half and the second half. And I think if you adjust that $30 million in your thinking, you'll see a more balanced growth rate across the full year.

是的。因此，讓我先介紹一下本期間的營業收入和收入變動。再次強調，我不想過於詳細地介紹各個季度之間的收入情況，但我想提醒大家，在第一季度，我們的收入從第二季度提前到了第一季度，然後又從第三季度提前到了第二季度。現在，如果你將數量及其所在位置標準化，它確實會在全年分散增長，從而實現上半年和下半年之間更加均衡和持續的增長。我認為，如果你調整這 3000 萬美元的想法，你會看到全年更加均衡的成長率。

As far as the margin uplift in the fourth quarter, I think there's two things that are happening. It's -- yes, the dynamic is in the backlog. So we are seeing the roll-forward of the lower margin backlog being replaced with the new awards that are coming in in line with our target margins.

就第四季的利潤率提升而言，我認為有兩件事正在發生。是的，動態處於積壓狀態。因此，我們看到利潤率較低的積壓訂單被符合我們目標利潤率的新訂單所取代。

But as we saw last year, in the fourth quarter, we would expect to see some positive operating leverage with the increased volume. That would be additive to our margins, and that's why we're expecting the fourth quarter to be the highest margins in the year. Hopefully that makes sense.

但正如我們去年第四季看到的那樣，我們預計隨著銷售量的增加會出現一些積極的經營槓桿。這會增加我們的利潤率，這就是我們預計第四季利潤率將是今年最高的原因。希望這是有意義的。

Yeah. And I think there are two things that impact that backlog margin, as Bill discussed. One is, of course, the new bookings coming in, and the margin rate on those bookings and we said that it's been created as we've been going forward. And the other is the level of the margin on the contracts that we're actually performing, executing on. And we talked about some of the contracts that we're completing and moving past were some of the lower margin contracts. So those two phenomena act in concert with each other to naturally start to raise that backlog margin.

是的。正如比爾所討論的，我認為有兩件事會影響積壓訂單利潤率。一是當然的新訂單，以及這些訂單的利潤率，我們說過，這是我們在前進的過程中創造的。另一個是我們實際履行的合約的保證金水準。我們討論了一些正在完成和過去的合同，其中一些是利潤率較低的合約。因此，這兩種現象相互影響，自然開始提高積壓利潤。

Brian Gesuale, Raymond James.

布萊恩傑蘇阿萊、雷蒙詹姆斯。

Hey. Nice quarter, and thank you for taking my questions. I wanted to maybe just delve into this journey you're taking to remix the business away from -- not away from, but this natural shift from development to production work. Can you talk about where we're at in that journey and then maybe give us a little bit of sensitivity, how the margins shift higher as development moves every 500 or 1,000 basis points?

嘿。非常棒的一個季度，感謝您回答我的問題。我想深入研究你們為重塑業務而採取的這一歷程——不是遠離，而是從開發到生產工作的自然轉變。您能否談談我們目前所處的位置，然後給我們一點敏感度，隨著開發每移動 500 或 1,000 個基點，利潤率如何上升？

Yeah. We have -- we've talked about this in the past, the difference between margin rates typically on development versus production contracts and the way we think about that model and what we've talked about in the past is the differences in the 1,000 basis points, trying to arrange the difference between those two. And so we are -- and we talked about the bookings we're seeing are in line with our targeted margins.

是的。我們—我們過去曾經討論過這個問題，開發合約和生產合約的保證金率之間的差異，以及我們對該模型的看法，以及我們過去談論過的 1,000 個基點之間的差異，試圖解決這兩者之間的差異。我們也是這樣—而且我們談到，我們看到的預訂量與我們的目標利潤率一致。

As Bill talked about, when we look at our bookings for the last trailing 12 months, they've been in the 80% range production. So we're seeing that happen. Some of that is as a consequence of finishing these development programs. We had a large number of development programs that we're -- we've been working through.

正如比爾所說的，當我們查看過去 12 個月的預訂情況時，發現生產力已達到 80% 左右。所以我們看見了這樣的事情發生。其中部分是完成這些開發計劃的結果。我們有大量的開發項目，我們正在努力完成它們。

I want to make sure that people don't take the amount of production happening as a natural phenomenon -- finishing those development programs and getting the follow-on production awards, we still are focused on new development and the right kinds of new development, and we still are moving innovation along in the company. But this is a natural move of how we see the business proceeding. We expect this level of bookings to be the case for some days, some period of time.

我想確保人們不會把生產量的成長當作一種自然現象——完成那些開發專案並獲得後續生產獎勵，我們仍然專注於新的開發和正確類型的新開發，我們仍然在公司內推動創新。但這是我們看到的業務進展的自然舉措。我們預計這種預訂水平將持續某些天、某些時間段。

Right. And then maybe just a quick follow-up. So if you think about how that backlog naturally progresses towards your target margin more, how do you -- how much of that margin bridge from 10% to 20% or 10% to 20%-plus comes from this natural mix shift, as opposed to some of the other levers that Bill alluded to earlier?

正確的。然後可能只是一個快速的跟進。因此，如果您思考一下積壓訂單是如何自然地朝著您的目標利潤率發展的話，那麼您如何理解——利潤率從 10％ 上升到 20％ 或從 10％ 上升到 20％ 以上，有多少是來自於這種自然的組合轉變，而不是比爾之前提到的其他一些槓桿？

Yeah, I don't think we've broken out the individual components of that. So, I wouldn't want to try and detail that.

是的，我認為我們還沒有將其各個組成部分分開。所以，我不想嘗試詳細說明這一點。

(Operator Instructions)

（操作員指令）

Sheila Kahyaoglu, Jefferies.

傑富瑞 (Jefferies) 的 Sheila Kahyaoglu。

Great quarter, guys. Thanks for taking the time. I want to maybe start on free cash flow and just ask the $82 million of free cash flow in the quarter, I think it was your all-time high of free cash flow in a quarter -- in a year, let alone a quarter. So can we talk about how we bridge that free cash flow to what true free cash flow is, given you're implying breakeven in the second half? There was, obviously, some factoring in there and some benefit from other items. So maybe if you could just talk about how we should be thinking about the second half being breakeven and as we head into fiscal '26.

大家，這一季表現棒極了。感謝您抽出時間。我想從自由現金流開始說，問一下本季 8200 萬美元的自由現金流，我想這是你們一個季度——一年內——自由現金流的歷史最高水平，更不用說一個季度了。那麼，鑑於您暗示下半年將實現收支平衡，我們可以談談如何將自由現金流與真正的自由現金流聯繫起來嗎？顯然，這其中有一些因素，也有一些來自其他項目的好處。所以，您能否談談我們應該如何考慮下半年實現收支平衡以及進入 26 財年。

Yeah. I think, Sheila -- this is Dave. I think that the way to think about it is, we were able to accelerate cash in essence into the second quarter. Largely when you look at our deferred revenue, you see our deferred revenues up around $40 million. That's milestones that we achieved that are ahead of all of the effort being completed. So as we go through the second half, we expect to be seeing that deferred revenue come down as we get the work done around those things or complete work around those things.

是的。我想，希拉——這是戴夫。我認為，可以這樣想，我們能夠從本質上加速現金流入第二季。基本上，當你查看我們的遞延收入時，你會發現我們的遞延收入增加了約 4,000 萬美元。這是我們在所有努力完成之前所取得的里程碑。因此，隨著我們進入下半年，隨著我們完成或完成這些工作，我們預計遞延收入將會下降。

And so we expect that we'll have -- it will lower the deferred revenue resulting in an offset to the cash that we're bringing in on the other programs. So that $40 million-ish is almost a pull-forward, a piece of that out of the second half of the year. So we're not looking at it as a pure, hey, it's a break even back half of the year; we're looking at it as running to offset that activity. We still are focused on our net working capital and bringing it down.

因此，我們預計它將降低遞延收入，從而抵消我們在其他項目上獲得的現金。所以，這 4,000 萬美元左右幾乎是提前支出的，是今年下半年支出的一部分。所以我們不把它看作一個純粹的，嘿，這是一個半年的收支平衡；我們將其視為一種抵消該活動的方式。我們仍然專注於我們的淨營運資本並致力於降低它。

Our net working capital is the lowest it's been in several years. We're headed in the right direction. Obviously, that's not at the exclusion of revenue or margin, but it's something we're working in concert. So I think the way we're thinking about cash is consistent with what we've said in the past.

我們的淨營運資本處於幾年來的最低水準。我們正朝著正確的方向前進。顯然，這並不排除收入或利潤，但這是我們共同努力的事情。所以我認為我們對現金的看法與我們過去所說的話是一致的。

We expect to be a consistent positive cash flow generator. And we expect to have positive cash as we exit the year, obviously, with where we are today -- a little bit ahead of where we thought we'd be through the first half.

我們希望成為持續的正現金流產生者。而且，顯然，根據我們目前的情況，我們預計今年結束時我們將擁有正現金 - 比我們預計的上半年的水平略有提高。

Got it. And then, maybe if we could just talk about -- it's been asked a few different ways of profitability profile too. Any sort of color you could give on production versus development margins? And then if you could just talk about the competitive wins you mentioned in the slides, what are those and how do we think about the stability of those?

知道了。然後，也許我們可以談談——它也被問及幾種不同的盈利狀況。能提供一下生產利潤與開發利潤的具體資訊嗎？然後，如果您可以談談幻燈片中提到的競爭優勢，那麼這些優勢是什麼，以及我們如何看待它們的穩定性？

Yeah. I'll start and then, Bill, I'll let you can talk about the wins. As we just said, I think that -- what we said historically is that production margins and development margins because of the different profiles, those things are roughly -- the targets we see for those are roughly 1,000 basis points different.

是的。我先開始，然後，比爾，我會讓你談談勝利。正如我們剛才所說，我認為 - 從歷史上看，由於生產利潤率和開發利潤率的不同，我們看到的目標大約相差 1,000 個基點。

We've seen that consistently in our bookings. That's about right. The bookings we're bringing in are absolutely consistent, as Bill has said, with the target model that we have. And so, we see the bookings that are coming in at the margins we need to step towards our ultimate business model.

我們在預訂中經常看到這種情況。基本正確。正如比爾所說，我們獲得的訂單與我們的目標模型完全一致。因此，我們看到預訂量達到了我們邁向最終商業模式所需的利潤率。

And I'll just make a comment on the competitive wins. We had a number of head-to-head competitive wins in the quarter. I think there's a couple worth mentioning. One is on US defense department's satellite program with an innovative space systems provider. I think what's interesting about this pursuit is it was led by our Advanced Concepts Group, which is a group we launched last year to focus on our next-generation technology and position us for next-generation-type pursuits, came up with a very innovative solution that actually leveraged existing products and work that we had done for other customers. And so we think it's right in line with an innovative development program with the right risk profile that will lead to production runs down the road. So it's exactly what we wanted to do with the advanced concepts group and a really good success story.

我只想對競爭勝利發表一些評論。本季度，我們在許多正面競爭中獲勝。我認為有幾點值得一提。一個是美國國防部與創新太空系統供應商合作的衛星計畫。我認為這項追求的有趣之處在於它是由我們的高級概念小組領導的，該小組是我們去年成立的一個小組，專注於我們的下一代技術並為我們定位於下一代追求，提出了一個非常創新的解決方案，實際上利用了現有產品和我們為其他客戶所做的工作。因此，我們認為這完全符合創新發展計劃，並且具有正確的風險狀況，將引領未來的生產運作。這正是我們想要與先進概念小組一起做的事情，也是一個非常好的成功故事。

And then the second is the takeaway associated with our common processor architecture product line. And as we've said before, this is an area where we see emerging demand, and we feel like we've got solid technical differentiation. And this takeaway was a perfect example of that.

第二個是與我們的通用處理器架構產品線相關的要點。正如我們之前所說，在這個領域我們看到了新興需求，我們覺得我們已經獲得了穩固的技術差異化。這個外賣就是一個完美的例子。

It was a relatively entrenched competitor and incumbent providing a processing capability. The end customer was looking to upgrade the capability to include the functionality consistent with our common processing architecture. The incumbent couldn't meet those requirements we could, and that was the basis of the takeaway and the development awards.

它是一個相對根深蒂固的競爭對手，並且是提供處理能力的現有企業。最終客戶希望升級功能以包含與我們的通用處理架構一致的功能。現任者無法滿足我們的要求，這就是我們獲得外送和發展獎的基礎。

So I think those are very notable. They're worth mentioning, and I think they're evidence of our ability to compete head to head and win based on the technical differentiation associated with the Mercury Processing Platform.

所以我認為這些非常值得注意。它們值得一提，我認為它們證明了我們有能力基於與 Mercury 處理平台相關的技術差異進行正面競爭並取得勝利。

Mr. Ballhaus, it appears there are no further questions. Therefore, I would like to turn the call back to you for closing remarks.

鮑爾豪斯先生，看來沒有其他問題了。因此，我想請大家再一次發表結束語。

Okay. Well, thanks, everybody, for your participation. I would like to thank the Mercury team, because it's people and teams that deliver the results that we talked through today, and the team had an outstanding quarter. We appreciate your participation, and we look forward to the update next quarter. Thank you.

好的。好吧，謝謝大家的參與。我要感謝 Mercury 團隊，因為正是他們的員工和團隊實現了我們今天談到的成果，而且團隊在本季表現出色。感謝您的參與，我們期待下個季度的更新。謝謝。

Thank you.

謝謝。

(technical difficulty) concludes today's conference call. We thank you for joining. You may now disconnect.

（技術困難）今天的電話會議結束。感謝您的加入。您現在可以斷開連線。