Ladies and gentlemen, good day, and welcome to the Leonardo DRS Fourth Quarter Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the company's prepared remarks, there will be an opportunity to ask questions, and instructions will be given at that time. As a reminder, this event is being recorded. I would now like to turn the conference over to Steve Vather, Senior Vice President of Investor Relations and Corporate Finance. Please go ahead. Good morning and welcome, everyone. Thanks for participating on today's Quarterly Earnings Conference Call. With me today are Bill Lynn, our Chairman and CEO, and Mike Dippold, our CFO. They will discuss their strategy, operational highlights, financial results, and forward outlook. Today's call is being webcast from the Investor Relations portion of the website, where you will also find the earnings release and supplemental presentation. Management may also make forward-looking statements during the call regarding future events, anticipated future trends, and anticipated future performance of the company. We caution you that such statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual results may differ materially from those projected in the forward-looking statements due to a variety of factors. For a full discussion of these risk factors, please refer to our latest Form 10-K and our other SEC filings. We undertake no obligation to update any of the forward-looking statements made on this call. During this call, management will also discuss non-GAAP financial measures, which we believe provide useful information for investors. These non-GAAP measures should not be evaluated in isolation or as a substitute for GAAP performance measures. You can find a reconciliation of the non-GAAP measures discussed on this call in our earnings press release. At this time, I'd like to turn the call over to Bill. Bill? Thanks, Steve, and thank you all for joining us today to discuss our fourth quarter and fiscal year 2024 results. The DRS team continues to execute impeccably. Before we get into the details of our performance, I want to express my genuine appreciation to our talented people for their steadfast focus and significant contributions that drove another strong year for our customers and our shareholders. In 2024, we delivered record bookings, mid-teens organic revenue growth, healthy Adjusted EBITDA margin expansion, and steady free cash flow generation. Our business saw broad-based customer demand, which was reflected in the over $4 billion of contract awards secured throughout the year. The robust level of bookings translated to a 1.3% book-to-bill ratio for both the fourth quarter and the year. Solid execution, strong international demand, and a more normalized supply chain enabled the acceleration to 14% revenue growth, with double-digit growth evident in both segments for the year. Furthermore, we delivered 23% adjusted EBITDA growth, along with 90 basis points of margin expansion in the year. More importantly, we achieved the increased profit margin while maintaining steady investments for future growth. I'm pleased to report that in 2024, we increased our investment in internal research and development and capital expenditures by approximately 25% year-over-year. We are committed to stepping up both R&D and CapEx investment in 2025 as we invest to unlock incremental avenues of future long-term growth. Some of these investments include the expansion of our sensing modalities, directed energy capabilities, enabling the application of AI and quantum in sensing and processing, and, of course, from a CapEx standpoint, our new facility in Charleston, South Carolina. Additionally, we generated $190 million of free cash flow in line with our targeted conversion of approximately 80% of adjusted net earnings. Our crisp execution in 2024, coupled with a record $8.5 billion total backlog, provides visibility into driving continued growth and margin expansion into 2025 and in achieving our multi-year Investor Day targets. Moving to some comments on the macro backdrop, as we look across the globe, the threat environment remains elevated. We expect the need to contest and deter global threats as continuing to apply steady upward pressure on U.S. and allied defense investment. The imperative and focus remains on building next-generation strategic capabilities as well as modernizing existing platforms. We are operating in a more dynamic environment. The new administration has brought an emphatic focus on speed, innovation, efficiency, and best-in-class technology. It is evident that DRS is well-positioned across all of these themes. Since our inception, DRS has earned a reputation for its agility and cutting-edge innovation. This has been consistently demonstrated through our capacity to rapidly deliver advanced capabilities with exceptional quality and reliability in an affordable manner for our customers. Furthermore, DRS enjoys a differentiated market position as a growth-focused, critical defense technology company. Our diverse portfolio is intentionally designed to be platform-agnostic, which buffers us from budget volatility. Columbia-c lass is our largest program, yet approximately 10% of revenue, and is a top national priority and a key leg in the nation's nuclear deterrence modernization effort. Beyond electric power and propulsion, the balance of the portfolio is aligned to enduring missions ranging from counter-UAS and short-range air defense to multi-domain and multimodal advanced sensing to next-generation network computing solutions for secure mission management, communications, combat systems, and fire control. The bottom line is that we have incredible technology depth and domain expertise. As you know, our entire business model is predicated on delivering technology and integrated solutions that are critical to our customers executing their missions successfully and in an effective manner. Our ability to consistently produce technologies that meet and exceed the most stringent operational requirements at scale makes us a trusted partner to U.S. and allied defense customers. With this new administration considering a greater shift toward fixed-price contracts, I want to remind you that our mix already significantly skews fixed- price and has for some time. As a result, we have a rigorous understanding of how to deliver innovative capability in an affordable manner to customers while managing risk and generating appropriate returns for shareholders. We are also continuously identifying and driving improvements enterprise-wide to optimize performance, and in 2025, we are maintaining that steadfast focus on execution excellence. Additionally, in the coming months, we look forward to gaining better clarity and a deeper understanding into the new administration's key priorities as well as the finer details of their initiatives. I want to emphasize that for over 55 years, we have been delivering on our commitments, innovating for future growth, and leveraging our market-leading capabilities to provide our customers a decisive edge. Our steady stream of bookings and growing backlog across our differentiated portfolio of advanced sensing, network computing, force protection, and electric power and propulsion technologies provide us confidence that DRS is well-aligned to critical and enduring defense priorities. In short, our fundamentals are solid. I expect 2025 to be another strong year of performance for DRS. Our success remains evident throughout the entire portfolio. Let me expand with some observations on our notable operational and technical accomplishments exiting 2024. In our advanced sensing business, we continue to expand into attractive market adjacencies, which is a testament to our differentiation and further broadens our growth factors. In the quarter, we received several over-the-horizon radar contracts, clearly demonstrating our growing technical leadership in this arena. Additionally, we were selected to provide infrared sensing on several missile programs, including those utilized for counter-UAS as well as more strategic mission applications. It's worth noting that these recent wins are an expansion of our presence in the missile domain. DRS has diverse content on several missile programs such as THAAD, Patriot, and Aegis. Moving to our tactical radar business, it continues to enjoy exceptional demand as it remains one of the most compelling commercial off-the-shelf solutions to enable on-the-move counter-UAS, short-range air defense, and active vehicle protection. Furthermore, our expanded capabilities in electronic warfare and software-defined radios were also met with healthy customer interest and demand. From a network computing standpoint, we continue to progress next-generation architecture that leverages open standards, modularity, advanced cooling, and the ability to utilize AI sensing and processing at the tactical edge. I'm also pleased to announce that we were able to begin performing on a contract to help the Army modernize its mortar fire control. Again, a very complementary and logical expansion of our network computing offering. Moving to our electric power and propulsion business, I'm pleased to report that over the course of 2024, we were able to secure more than $45 million of submarine industrial base funding commitments from the Navy and our prime customers, namely HII and General Dynamics. This industrial base funding will be utilized to equip and expand our capabilities in our new Charleston, South Carolina facility. Specifically, the investments will strengthen our capacity and capabilities in the design, manufacture, integration, and test of steam turbine systems. Additionally, we continue to make solid progress toward the targeted facility completion by 2026. As a reminder, the rationale for building this facility was to more efficiently execute the Columbia-c lass program, but also create capacity for next-generation platforms. These future platforms are a critical part of the long-term growth opportunity that we see in expanding our electric power and propulsion business. While these platforms remain further out, recent data points continue to bolster our strategy. Current design requirements for DDG(X) all for 40 megawatts of power generation, as well as a design approach that is focused on platform modularity to accommodate regular modernization, as well as the deployment of next-generation combat systems. These advanced combat systems are moving from concept to reality. For example, the Navy recently tested a surface combatant-based directed energy weapon. Whether it be directed energy or other future combat communications and sensing systems, we expect the shipboard power requirements to only increase, which is most effectively addressed by electric power and propulsion architecture. Shifting to force protection, we are the key enabler and integrator of the directed energy Counter-UAS system that is currently undergoing tests and demonstration by the Army. The system continues to show strong performance, and we look forward to working closely with our customer to operationalize and field this capability in the medium term. Moreover, we are seeing distinct international demand for our integrated solutions in Counter-UAS and short-range air defense. As a result, we are focused on progressing the ability to export these capabilities to close allies. Speaking of international, we saw our percentage of revenue coming from international customers rise to 13% in 2024. This demonstrates remarkable year-over-year growth and marks the fourth consecutive year of increased international business. The elevated global threat environment continues to catalyze an urgent push for capability modernization, which we view as lasting for years to come. We continue to see clear international growth opportunities across the entire portfolio, but particularly for our multi-domain sensing and network computing technologies. On the leadership front, I'm pleased to announce that we have appointed Bill Guyan as our Senior Vice President of Business Development, and he is also leading our international expansion efforts. Bill has made an incredible impact in a number of roles at DRS throughout the course of his over 20 years of service at the company, including most recently leading our Land Electronics business. In his new role, I look forward to working with him closely to sharpen the competitive positioning of our business to drive growth in core, adjacent, and new markets, both domestically and internationally. With Bill in a new role, we have promoted Denny Crumley to succeed him as Senior Vice President and General Manager of our Land Electronics business. Denny has been at DRS for nearly 15 years and has both deep customer intimacy and domain expertise in the ground network computing market. These promotions reflect the incredible depth of talent resident at DRS and also exemplify our steadfast commitment to leadership and employee development. Furthermore, our strong culture and competitive employee proposition are enabling our success in driving record hiring and retention rates. Now to a discussion on our capital deployment strategy. In our earnings press release, we announced a shift toward a more balanced capital allocation approach. Let me reiterate that our value creation strategy remains focused on driving growth, both organically and through M&A. That said, our steady cash generation and our strong balance sheet enable us to commence a capital return program comprised of a cash dividend and a modest share buyback, which will supplement our priority for value-additive M&A. With respect to the dividend, our board of directors has declared a cash dividend in the amount of $0.09 per share. The dividend is payable March 27, 2025, to shareholders of record at the close of business on March 13, 2025. We intend to begin payments of regular quarterly cash dividends subject to the discretion and final determination by the board. We are also announcing that the board has authorized the company's first share buyback program. It is an authorization totaling $75 million over the next two years. The program is expected to commence early next month and is designed to mitigate the dilutive impact of shares issued under the company's employee stock plan. Before I turn the call over to Mike, let me conclude my remarks by stating that our nation continues to operate in a complex global threat environment. Foundational to our country's ability to deter and contest these increasingly sophisticated threats is the technological competitive edge provided by companies like ours. It is our strategy and our talented people that enable DRS to meet our customers' most challenging needs. Our focus remains on driving innovation and capability to enable our customers' success, as well as drive value for our shareholders through steady growth, margin expansion, and cash flow generation. Mike, over to you to review our recent financial performance and 2025 outlook. Thanks, Bill. I also want to commend the entire DRS team for delivering another year of exceptional financial results. As a quick note, I have structured my comments to review both our fourth quarter and full year 2024 results by key metric, and then we'll discuss in detail our 2025 outlook. First, revenue was $981 million and up 6% year-over-year for the quarter. Our programs related to tactical radars, naval network computing, advanced infrared sensing, and electric power and propulsion were key drivers to growth. On a full year basis, revenue was $3.2 billion, which represents a 14% organic growth over 2023. Similar to the quarter, we saw consistent strength in our advanced infrared sensing, tactical radars, and electric power and propulsion businesses, as well as healthy growth from our force protection programs. Broad-based strength was evident across both segments. Our Advanced Sensing and Computing segment increased revenue year-over-year by 9% in the fourth quarter and by 16% for the full year. For our Integrated Mission Systems segment, revenue was down slightly in Q4 by 1% due to program timing, but was up a healthy 11% for the full year thanks to solid growth throughout the segment. Moving to Adjusted EBITDA, Adjusted EBITDA was $148 million for the fourth quarter and $400 million for the full year, representing year-over-year growth of 13% and 23% respectively. Resulting margins were 15.1% for the fourth quarter and 12.4% for the full year, a year-over-year expansion of 100 basis points and 90 basis points respectively. Increased program profitability on Columbia-class, improved program execution, favorable mix, and operational leverage from higher volume helped drive the margin expansion. Moving to the segment trends, ASC segment Adjusted EBITDA increased 9% on higher volume as margin was flat year-over-year in Q4. For the full year, ASC segment Adjusted EBITDA was up 22% and margin expanded 70 basis points on improved program execution, favorable program mix, and higher volume. IMS segment Adjusted EBITDA was up 24% in Q4 and 27% for the full year, which translated to a margin expansion of 290 basis points and 140 basis points respectively. Margin was up in both periods thanks to increased profitability on our Columbia-class program, but the full year also enjoyed the benefit of higher volume. Now to the bottom line metrics. Diluted EPS and adjusted diluted EPS were up 18% and 23% year-over-year in the fourth quarter respectively. Solid operational performance combined with lower interest expense drove the favorable compares. For the full year 2024, diluted EPS and adjusted diluted EPS were up 25% and 27% respectively. The full year results similarly reflected strong execution and lower interest expense, but the more normalized tax rate was a slight headwind to the compare. Moving to free cash flow, Q4 free cash flow generation was robust and totaled $416 million in the quarter, driving the full year to $190 million. Our implied free cash flow conversion was consistent with expectations of 80% of adjusted net earnings. Adding to Bill's discussion earlier, our balance sheet is now in a net cash position to start 2025, and this is spurring us to adapt our capital deployment strategy to a more balanced approach that maintains a focus on M&A, but also incorporates an element of consistent shareholder return. Now to our 2025 guidance, we are focused on building upon our spectacular execution track record by driving healthy organic growth and margin expansion. I am pleased to report that the range of guidance that we are formalizing today sits slightly above the framework that we outlined on our Q3 call back in October. We are now expecting revenue to range between $3.425 billion-$3.525 billion, which implies a 6%-9% organic growth. Our growing backlog provides us with ample visibility to execute within the range offered. As usual, the variability of performance will rely on the pace of material receipts and progress of labor inputs, as well as the timing and level of customer orders that comprise the smaller portion of book-to-bill driven revenue. Assumed in our guidance is the passage of FY2025 appropriations and a stable supply chain. Additionally, we continue to monitor and evaluate the executive orders that are being rapidly executed and implemented, but do not see any material business impacts at this time. Moving to Adjusted EBITDA, we are expecting between $435 million-$455 million for 2025. The implied year-over-year margin improvement is in the range of 30- 50 basis points. Margin expansion continues to be driven by improved profitability on Columbia-class, the steady transition from development to production on smaller programs, favorable program mix, and growth operational leveraging. Given our strong focus on growth, we have opted to increase our investment into our business development and company-funded R&D over the prior year and also over our prior expectations for 2025. As a percentage of revenue, depreciation, and amortization expense should remain comparable to 2024. Now to adjusted diluted EPS, we are initiating a range of $1.02-$1.08 a share. Embedded in our guidance is a tax rate of 19%. We are assuming a fully diluted share count of 270 million. Note that we will adjust our share count expectations after we better understand the pace of our stock buyback program execution. Additionally, we are anticipating an 80% conversion of adjusted net earnings into free cash flow for the year. While our Charleston, South Carolina facility investment is tracking to schedule, we saw CapEx come in lower than expected in 2024, largely due to timing of spend. We anticipate to catch up in 2025, and as a result, CapEx should trend around 4% of revenue. Lastly, I expect that our quarterly cadence for revenue and adjusted EBITDA should be largely comparable to the improved linear progression we saw in 2024. In Q1, we are expecting revenue around $725 million with mid-10% adjusted EBITDA margins. Free cash outflow should also closely mirror Q1 2024. Let me quickly wrap up before we move to questions. Our team continues to build upon its execution track record as demonstrated by another year of exceptional financial results. DRS remains attractively positioned to continue to drive continued growth based upon our sizable backlog and our strong alignment to well-funded customer priorities. Our strategy, culture, people, and platform-agnostic portfolio are foundational in generating long-term value for our customers and shareholders. As we look ahead, we are increasing investments to best capitalize on the abundant opportunities in front of us. With that, we are ready to take your questions. Ladies and gentlemen, if you have a question or comment at this time, please press star one, one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press star one, one again. Again, if you have a question or comment at this time, please press star one, one on your telephone keypad. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of Robert Stallard from Vertical Research. Mr. Stallard, your line is open. Thanks so much. Good morning. Morning. A couple of questions from me. First of all, for Bill, more of a big picture question, I suppose. Have you seen any impact as yet from the whole DOGE effort, or is everything at this stage still being focused on the Department of Defense and has yet to slow down? And then secondly, a more technical question for Mike. There were a couple of one-off items in the fourth quarter. I was wondering if you could elaborate on what those are and if you've got any further adjustments anticipated in your 2025 guidance. Thank you. Thanks, Rob. With regard to DOGE, no. I mean, one, they haven't really reached the Department of Defense. Two, they've really been focused on federal workforce and things like grants, which we're not in part of either of those. Our focus as you really start the new administration is what are their strategic priorities and how is their 2026 budget bill looking? And so that's really where we're focused. And Rob, the one-off adjustments, I'm assuming that you're referring to the adjustments to the adjusted EBITDA? Is that where the question is centered? Yeah, that's right. In the back of the slide deck, there's a reconciliation. I just wondered what was the actual practical basis there. Yeah, the only real change there is attributed to the currency shift that we have. So we put the FX impact to some of our balance sheet items that are adjusted in that line item. That's kind of the other non-operational events in that reconciliation. That's the only real change from what we've seen from a pacing item in prior quarters or the prior year. Great. Thanks so much. Thank you. Our next question or comment comes from the line of Peter Arment from R.W. Baird. Mr. Arment, your line is open. Yeah, thanks. Good morning, Bill and Mike, Steve. Nice results. Thanks, Bill. Thanks, Peter. When we think about your margin targets for 2026, and we know that Columbia has a favorable impact on that, what other areas, whether you want to talk about a program or a product area like force protection, what other areas are kind of helpful in the margin progression when we think about it outside of Columbia? Yeah, it's some of the smaller sensing and force protection programs. They're on a similar track to Columbia in that they're moving from a development phase into a production phase. So we're moving into a lower risk profile and generally a higher margin profile. And so collectively, they're not as big as Columbia, but they're still a quarter or a third of that margin improvement. Got it. That's helpful. And then just on the last couple of quarters, you've mentioned the investments or the Over-the-Horizon Radar kind of investments that you're making. And you've also mentioned that you received a contract. What is the opportunity that you think about in that area? Well, I mean, for us, this is a move up the food chain, and we're going from an area where we were really doing components to one where we've now gotten some prime contracts. So that's an important step. And then this whole area is becoming more important. We're still assessing, or I think the administration is still assessing what this Iron Dome missile defense architecture is going to look like. Over-the-Horizon Radar is certainly a candidate to be part of that. So there's, I think, some potential with the new administration and the priorities they're bringing to missile defense for this growing area for us. Okay. And then just lastly, quickly on the, you've got a high percentage of fixed-price, so you seem to be set up well for this administration's focus. How do you see that evolving just with the rest of the industry? Because a large percentage of the industry is 50/50. How do you see the changes being implemented? Well, I mean, I think they're going to have to move to where we already are, which is we operate in a fixed-price environment. I mean, I think you're referring to we're about 85% fixed-price now, which means you have to have a very good risk process. You have to be very careful in how you bid. You need to understand what the development risk means for production cost. That all has to go into the pricing and the bids. I think we've become quite good at that. I think the rest of the industry is now going to have to follow. Appreciate the call. Thanks, Bill. Thank you. Our next question or comment comes from the line of Andre Madrid from BTIG. Your line is open. Hey, everyone. Thanks for taking my question. Yeah, so looking, I guess, at the IMS level, obviously, continued strong demand there, and the Navy just released their latest renderings of what DDG(X) looks like. I mean, is any of this being factored into the 2025 outlook? And I guess just beyond that too, I know I feel like I've asked about this a lot, but how do things stand on KDDX, and what could we expect there, if anything? Yeah, I'll start with the last first. I mean, KDDX is the same as before. We're actively engaged with the Korean customer, the shipyards. We've kept our bid updated, but we don't have a decision yet from the Korean customer. And we don't have a timeline. We think it's coming, but we do not have a timeline. With respect to DDG(X), I think there is growing attention both in Congress and the Navy for the electric propulsion option for that as meeting the growing requirements for electric power. It's no longer just driving the ship, or even driving the ship and the sensors are now experimenting with directed energy weapons. All of that's going to increase the power requirement, which drives you to electric. In terms of the timing, 2025 is a little early. The ship is really a 2030 ship. The decisions and the design and the development of the electric power system that we think will go into it will start, I think, in the next couple of years, though. Excellent. Thank you for the color, Bill. And if I could follow up and maybe pivot more to raw material supply. I know back in December, China banned the export of germanium, and that's obviously a huge component or partial component into the sensing business. Although I feel like a lot of attention has shifted more towards the supply of other materials ever since the Trump administration took hold. I'm trying to think, are there any other materials that we might have to worry about in terms of sourcing and access? I would say in terms of our concern list, that germanium continues to be our focus point. As you alluded to, we put the safety stock up there to protect against an absence of supply. We're not tapping into that yet because the supply is still available, but what we've seen is some volatility in the pricing. From another material perspective right now, and what has helped us from a growth perspective is the stabilization and the predictability of the supply chain. Nothing that is jumping out as overly concerning. I think you're still in a position where lead times and such are still elongated from what we saw in a pre-pandemic environment. But the predictability remains strong. The availability remains strong. So as of now, there's not a lot outside of germanium that's keeping us up at night. Awesome. Appreciate the color. Mike, Bill, I'll leave it there. Take care. Thanks, Andre. Thank you. Our next question or comment comes from the line of Michael Ciarmoli from Truist Securities. Your line is open. Hey, morning, guys. Good results. Thanks for taking the question. Hey, Bill, maybe not on DOGE. And I know this news flow is pretty fast and furious, and we've got the 8% budget cuts. But I think the House Armed Services Committee was also asking the Pentagon for a list of potential cuts by March 1st. And maybe it feels a little bit similar to the Night Court exercise back in 2019. You've got a lot more exposure to the army. I don't know what 24 closed out at. But do you see maybe kind of some of those army revenues, ground systems? Could that be a headwind for you guys? And just trying to figure out how that might be contemplated, if it even is an impact in 2025, or if army does see more ground cuts, or whether it's warfighter systems. Is that on your radar right now? I mean, obviously, we're looking closely at what the new administration does. There's always going to be turbulence when you have a new administration. They reset the priorities, reset the whole team, and so on. We're right now, Michael, about 30% army, give or take. Over the past five or six years, we have realigned. We used to be much, much heavier army, and now actually navy is larger. But I think the key is we're more balanced. And the largest program we have is Columbia, the navy program. That's 10%. Nothing else we have even approaches that. So as we go into this kind of budget environment, there's no single decision that is going to fundamentally change our direction. And then overall, going back to your army point, overall, we think we consciously targeted growth areas in all the services, and particularly the army. So think Counter-UAS, think artificial intelligence supported computing, longer range sensing that you'll need in the Indo-Pakistan fight. We think all of those are growth sectors. That's why we identified them. They were growth sectors in the first Trump administration. They were growth sectors in the Biden administration. And we think when the dust settles on the priorities of this new administration, there'll be growth sectors there too. We're not in platforms where I think we don't build platforms. I think that's the bigger vulnerability, and we're not in that area. Got it. That's helpful. And then just one on margins. I think you called out, maybe, Mike, the IRAD investment in 2025. Can you just give us a sense of the magnitude there? I mean, you're still getting some pretty good margin expansion. I mean, you had a high watermark in the fourth quarter for IMS. Just trying to get a sense kind of, yeah, what that R&D headwind investment is, and if there's maybe anything preventing IMS from continuing to drive higher from here. Yeah, a couple of things. I think you have it right first in that as we look at the margin expansion into 2025, IMS will be the key driver of that on the back of Columbia, and that performance continues to go very well. The investment that we're looking at is we're certainly looking at increasing the investment. We're trying to increase IRAD about 20 basis points as a percentage of revenue. So I think kind of a double-digit growth on our IRAD number that exceeds the revenue growth by a pretty good margin. So we think it's going to be important to continue that investment, especially with the new administration's kind of emphasis on agility and kind of rapid prototyping and getting solutions in the hands of the warfighter quicker, and that's why I think we're going to tick up the investment a little bit to be able to be that active. Okay. Perfect. Thanks, guys. I'll jump back into the queue. Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star one, one on your telephone keypad. Our next question or comment comes from the line of Ronald Epstein from Bank of America. Mr. Epstein, your line is open. Hey, good morning, guys. Good morning, Ronald. How are you given your experience running the company and the DOD, how are you thinking about this 8% reallocation? What could it be reallocated to, and how is that impacting how you're thinking about running your business? Well, I mean, I think they're assessing both sides of this. It's a moving game. So where the 8% is coming from is they're assembling right now. And I think where the 8% is going, they're similarly assembling right now. But the indications have been I mean, the biggest one has been the executive order on Iron Dome. I think they want to put more money into missile defense. And it's missile defense broadly defined. When Iron Dome, you think the Israeli system, which is the lower side of this. But I think they're thinking all the way up to space and then all the way back down to Counter-UAS. We're in much of that. So I think we see opportunities. I mentioned Over-the-Horizon Radar. Counter-UAS is one of our core mission areas. We're demonstrating our space capabilities in space. So I think that's an opportunity. And then I think the other big muscle movement, but I think it's hard yet to see all the programmatic implications, are the move to Indo-Pac region. That's longer ranges. It's a different set, more Air Force, more Navy. Although I would never you need an Army in every conceivable scenario. So I wouldn't understate that. But I think it's what are the programmatic implications of that beyond what I mean, the Biden administration was focused on Indo-Pac too. So it's kind of incrementally, what are they doing more there? I think we're going to see in the coming weeks. Got it. Got it. Got it. Then have you thought about, I mean, what implications does it have for you if we end up in a continuing resolution for fiscal 2025 and maybe for a lot of the same reasons of CR in fiscal 2026? I don't think we know where we are. I mean, on 2025, there's always talk at this point in the process about a CR. We've never had one for defense. It's always possible. It would mean, I think, incremental cuts to programs. For us, that would be probably more of a 2026 issue than a 2025. We have about 75% of our 2025 revenues already in backlog. So it's already contracted. But 2026 is where you'd start to see a CR take hold. Got it. Got it. Got it. Got it. And then maybe just one last one for me. Given sort of the politics of what's going on right now with the Ukraine and Russia, what impact do you think that could have on foreign military sales, if any? NATO's going to need more stuff, but one would assume NATO doesn't think they can count on us anymore. So I mean, how do you think about the positives and negatives there? It is hard to assess the last couple of days. I think longer term, we saw a tick up in Ukraine, low single digits for us in terms of our revenue. We've been assuming that that will go down in 2025, and then we think it'll taper off. It'll go down in 2025 and then probably down further in 2026 as we move to a negotiation phase. In terms of the Europeans, I think will be interested in buying American. I understand what you're saying about kind of the transatlantic relationship. But to the extent that this causes them to think they need things more urgently, they're going to look more to the U.S. because many of the things that we have, things like counter-UAS systems that we build, we're in production on them. They're still, to the extent that they have them, they're still developing. So if you wanted something urgently, you would have to look to this side of the Atlantic in many cases. Got it. Got it. Thank you very much. Thank you. Our next question or comment comes from the line of Jon Tanwanteng from CJS Securities. Your line is open. Most of them have already been answered, but I just wanted to touch on the investment by the Navy into Charleston. Could you talk about the opportunity there? And I know it's far out, but what exactly are you expecting in terms of market size for these steam turbines and other advanced components that are outside what you had previously envisioned? And are those at margins that are creative, or does it come with the strings attached with the investments? Yeah, let me start, Jon. I'll let Mike do a bit more of the numbers side here. First of all, we think this is a major move by the Navy. We developed the Charleston facility to support the Columbia program, basically to insource since we had a decade-long contract, we could execute that contract more efficiently. We had an option to expand and facilitize that facility to support the Submarine Industrial Base expansion. And frankly, we're thrilled that the Navy's going to invest $45 million in that initiative. Initially, as you said, it would go to the steam turbine capacity. That's a critical node in terms of expanding the number of submarines that we build per year. That's a point. You have to be able to build steam turbines faster to build submarines faster. Bringing us on as a source along that and investing in that, we think that's a major move for the submarine industrial base. Of course, in the midterm, in a few years, that would be a major program for us. Yeah. Let me just jump on what Bill said here. I think one of the key takeaways is we started this investment in South Carolina. We had a thesis that we can underwrite it based upon the efficiencies built into Columbia, and that's moving along well. The other piece was that it was going to give us a seat at the table to expand the relationship with the Navy and really help from an industrial base throughput perspective. The continued kind of trusted relationship that we have with the Navy on Columbia is showing them our commitment to this effort, and I think that's certainly helped us in terms of getting that seat at the table and expanding what we can offer in South Carolina. When we think about this, it's going to be longer out, probably beyond the next couple of years outside of some design, but this has the opportunity to be another tool in our toolbox from a scope of work perspective that contributes significantly to the revenue output as we look out five, six years. Okay. Great. And then just to follow up to the margin question for heading into 2026, I think at the midpoint of the guidance, you're doing just under 13% EBITDA margins this year. Could you just break down again the components of getting to that 14% in 2026, especially with the stepped-up R&D intensity? Yeah. And I'll zoom out a little bit just from our overall 2026 commitments that we had at the investor day. But obviously, a lot of puts and takes since last March when we came out. On the revenue growth side, we're far exceeding the expectations of that mid-single-digit growth. And I'd like to remind that what we're saying now with this 6%-9% growth range is on a much higher base. So from a revenue perspective, we are well outpacing our commitments that we laid out. On the profit side, it's been a little less linear. But the key element of that margin expansion has always been on the back of Columbia. And Columbia continues to execute very well. So although we're a little behind a straight linear progression to that 14%, we do remain committed to achieving those targets as we look out into 2026. Okay. Great. Thank you. Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star one, one on your telephone keypad. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to management for any closing remarks. Thank you, Howard. Thank you all for your time this morning and your interest in DRS. Of course, if you have follow-up questions down the road, please don't hesitate to call or email me. We look forward to speaking to you all again soon. Have a great day. Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.