Ladies and gentlemen, good day and welcome to the Leonardo DRS third quarter fiscal year 2025 earnings conference call. At this time, all participants are in the listen-only mode. Following the company's prepared remarks, there'll 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 thanks for participating on today's quarterly earnings conference call. Joining me today are Bill Lynn, our Chairman and CEO, John Baylouny, our COO and incoming CEO, and Mike DeBold, our CFO. They'll discuss our strategy, operational highlights, financial results, and forward outlook. Today's call is being webcast on the Investor Relations portion of the website where you will also find the earnings release and supplemental presentation. Management may make forward-looking statements during the call regarding future events, anticipated future trends, and the 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 release. At this time, I'll turn the call over to Bill. Bill? Thanks, Steve. Good morning and welcome everyone to the DRS Q3 earnings call. We continue to perform well. Our third quarter results demonstrate DRS close alignment with customer priorities, which was clearly reflected in our strong bookings, revenue, and profit growth as well as solid cash flow generation. As I told you last call, we expected second half bookings strength and that materialized in spades in the third quarter. We secured $1.3 billion of bookings in the quarter, resulting in a 1.4 book-to-bill ratio. Our year-to-date book-to-bill ratio sits at 1.2 and we continue to see a solid path to remain above one for the full year. This quarter, demand was most evident for our Counter-UAS, advanced infrared sensing, naval network computing, and electric power and propulsion technologies. Our exceptional bookings propelled us to another record total backlog, which now sits at $8.9 billion, up 8% year over year and also up sequentially. Funded backlog also saw remarkable year over year growth of 20% in the quarter. Diving deeper into our quarterly financial performance across metrics, we sustained double-digit growth in the year to date, including in Q3. This provides greater visibility to close out the year on a strong footing. Furthermore, the foundation built in the year to date leads us to increase our full year revenue growth expectations to 10%- 11%. Our profit metrics also showed strong performance. Adjusted EBITDA was up 17%, although margins slightly lagged behind prior year levels. As we continue to ramp our investment in internal research and development, adjusted diluted EPS increased by 21%. Lastly, free cash flow significantly surpassed prior year levels, reflecting improved collection linearity and working capital efficiency. In aggregate, our strong Q3 results place us in a solid position to meet our full year outlook. However, we continue to operate in a dynamic market environment and are focused on smoothly navigating its complexities. The team and I remain focused on execution discipline and maintaining investment to sustain strong organic growth. While DRS continues to perform well, the operating environment offers both opportunities and challenges. Global threats persist, leading to continued growth in U.S. and allied defense investments to expand and enhance capabilities to deter and condense these adversaries. We are thankful that earlier this month the remaining Israeli hostages were returned and that initial steps toward peace are being made in the Middle East. We are hopeful that the ceasefire sustains and brings lasting stability not only for our employees in the region, but for all situated there. Domestically, the federal government remains shut down, marking the longest full shutdown on record. Unlike the last lengthy government shutdown in late 2018, all agencies, including the Department of Defense, are impacted. Thankfully, to date we have not seen a meaningful impact on our ability to execute our programs or deliver for our customers. However, as the shutdown extends, we are keeping a watchful eye on any impacts. We are hopeful that Congress and the administration negotiate and enact funding to provide clarity and visibility to our national security customers. Zooming out and taking a look at the bigger picture, DRS remains well positioned in areas of customer priority, with strong alignment to enduring themes of Counter-UAS, improving shipbuilding throughput via industrial base expansion, enhancing missile production, and sensing and electronics modernization. There are clear funding tailwinds in the $150 billion for defense embedded in the tax reform reconciliation passed earlier this year. We are eager to see the enacted funding start to flow to our customers. Shifting to the supply chain, we are executing the strategy laid out last quarter to strengthen our germanium supply chain. We have begun recycling initiatives and are seeing early success in extracting adequate levels of germanium. We are also actively working on strategic agreements with several partners to ensure consistent supply in 2026. Overall, I'm pleased with the progress made to date. There's still work to be done before resolving this constraint fully, but I am confident that the initiatives that we have put in place will successfully resolve this challenge in 2026. Let me wrap up my remarks with a few closing thoughts. Our year to date results reflect the resilience of our business and the strength of our differentiated technology portfolio. Customer demand is clear for our capabilities, and we remain focused on executing with excellence to support them in their most critical missions. The team has performed remarkably. Their commitment is unwavering and their incredible contributions are foundational to our financial success. Earlier today, I announced that I will be retiring as Chairman and CEO on January 1, and our COO, John Baylouny, has been named the company's new CEO. I've had the distinct privilege of leading DRS as CEO since 2012. The DRS we have today is unmistakably better and stronger than the one I joined 14 years ago. I could not be prouder of what the team and I have accomplished together. We have strategically transformed DRS through a steadfast focus on reshaping the portfolio into enduring areas of demand, driving consistent innovation and executing to provide exceptional capability into the hands of our warfighters. All of these strategic actions have resulted in a consistently growing business with expanding profitability and strong cash generation. I am pleased with where the company is positioned today and the incredible potential ahead of it. This inflection point offers an opportunity for me to hand the reins over to someone who has been my right hand for a near decade. While I'm delighted with what we have achieved, I have high expectations for what this company will achieve under John's leadership as our next CEO. Many of you already know John. He's an outstanding leader and is absolutely the right person to take this on. He has a wealth of knowledge, deep technological expertise, and vast experience at DRS spanning over 35 years with significant operational impacts. Equally important, he possesses a profound understanding of our customers and their needs, coupled with an unwavering commitment to driving innovation and delivering solutions that ensure their mission success. Separately, the Board has unanimously elected Fran Townsend, our current Lead Independent Director, to become Chair. She has been a steady hand on our Board dating back to our acquisition by Leonardo. As part of this transition process, John, Mike, Steve and I will have several opportunities to meet with many of you over the coming months. John and I will be sharply focused on ensuring a seamless transition through the end of the year. Congratulations, John. Now let me turn the call over to him so he can review our operational highlights. Thank you, Bill. First, on behalf of all of our employees, I want to thank you for your extraordinary leadership and the incredible impact you've had on the company. I am honored to be the next CEO of Leonardo DRS, and I appreciate the trust you and the Board have in me to lead this exceptional organization. I'm very excited about where Leonardo DRS is today, and more importantly, where we can take this company moving forward. The opportunities to create value for both our customers and shareholders are as abundant as ever. Let me now turn to discuss key business highlights from the quarter. As Bill mentioned earlier, we continue to see vigorous appetite for our Counter-UAS solutions. Due to evolving threats, we are constantly iterating our offerings to stay ahead of the threat. Earlier this month at the AUSA Annual Meeting, we showcased our leading expertise in Counter-UAS. We demonstrated our ability to develop and integrate a palletized mission equipment package that is vehicle and platform agnostic and applicable to both manned and unmanned systems. Furthermore, we successfully combined both short-range air defense and Counter-UAS missions into a significantly smaller and lighter platform to JLTV. In a growing field of Counter-UAS solutions, Leonardo DRS stands out due to its reputation for bringing best-of-breed technologies well ahead of others and with proven, field-tested results and mission effectiveness. To that end, I would like to commend the team for taking first place at a recent Army Counter-UAS competition, showcasing our cutting-edge electronic warfare capabilities to disrupt drone threats. Additionally, in Q3, we demonstrated cross-modality success in solving some of the hardest problems facing our armed forces, integrating our sensors to enable threat neutralization through a platform-to-platform kinetic kill handoff. Our leadership position in Counter-UAS has translated into demand across our portfolio, including our integrated systems and sensing solutions in tactical, radar, electronic warfare, and infrared. I want to highlight that in the quarter, we were awarded over $250 million in contracts for our premier ground-based Counter-UAS and short-range air defense programs. Moving to Sensing, we continue to see strong demand building. In the missile domain, we are actively engaged in initiatives to expand sensing capacity and bring generational upgrades to sensing content on new platforms. Additionally, unmanned systems present a growing area of opportunity for our multimodal sensing business as we integrate our technologies into both unmanned aerial and surface vessel platforms. Lastly, in our core infrared business, we continue to capture an outsized share of the market to supply our customers with infrared capabilities for dismounted and ground combat vehicle applications. Next, I want to highlight our new software offering, Sage Core. Sage Core is an integrated operating system that brings AI, advanced sensor, and edge computing together in a single deployable solution for use on tactical platforms across multi-domain environments. Sage Core is one piece of the innovation we are bringing to next generation computing and sensor fusion in the quarter. We also released Thor, a 4.1 multifunction network computing product with the ability to host electronic warfare, onboard crypto, and tactical Wi-Fi capabilities. Thor complements the AI processor we developed earlier this year and supports the Army's Next Generation C2 initiative with a zero trust, cost-effective solution for tactical and ruggedized computing at the edge. Additionally, we continue to see steady demand for our next generation naval network computing solutions in support of the Navy's Network Sensor and Integrated Fire Control Initiative Cooperative Engagement Capability, or CEC. Last but certainly not least, I want to commend our electric power and propulsion business for the consistent and remarkable performance. The impact of their strong execution is evident not only at the segment level, but also at the company level. We continue to see this part of our business driving significant growth and margin expansion. We are well positioned to capture incremental scope and remain active in conversations with our customers on industrial base expansion, particularly steam turbine generators. The growth opportunity of proliferating our electric power and propulsion technology into future platforms remains an exciting growth factor. Let me now turn the call over to Mike, who will review our third quarter and our revised 2025 guidance in greater detail. Thanks John and congratulations. I look forward to working closely with you in your new role to create value for our customers and shareholders. Bill, it's been a heck of a ride and I'd like to thank you for your outstanding leadership. Overall, I'm pleased with our solid year-to-date performance, particularly amidst a complex and dynamic operating environment. Our third quarter reflects the results of our sustained focus on driving innovation, processing customer demand into revenue growth, and maintaining disciplined execution. Let me start by discussing our Q3 performance. Quarterly revenue grew by 18% over the prior year, totaling $960 million. The team did an impressive job converting strong customer demand. We also benefited from favorable timing of material receipts, resulting in revenue above the framework laid out on the Q2 call. From a segment perspective, IMS was our growth engine. IMS quarterly revenue was up 34%, driven by strong contributions from Counter-UAS and electric power and propulsion programs. ASC demonstrated a healthy upper single-digit increase of 9% thanks to growth from naval network computing, advanced infrared sensing, and tactical radar programs. Shifting to adjusted EBITDA, Q3 adjusted EBITDA was $117 million, up 17% from last year. Quarterly adjusted EBITDA margin was 12.2%, reflecting a 10 basis point margin contraction from the prior year. Higher volume and improved electric power and propulsion program profitability were offset by increased research and development investments, less favorable program mix, and less efficient program execution, leading to the slight margin decrease in the quarter. Shifting to the segment view, ASC adjusted EBITDA was flat on a dollar basis but saw a 100 basis point contraction due to greater internal research and development investment along with less favorable program mix. IMS adjusted EBITDA was up 47%, with margin expanding by a higher 120 basis points thanks to higher volume and improved profitability on our Columbia Class program. Onto the bottom line metrics, third quarter net earnings were $72 million and diluted EPS was $0.26 a share, up 26% and 24% respectively. Our adjusted net earnings of $78 million and adjusted diluted EPS of $0.29 a share were up 22% and 21% respectively. The favorable year-over-year compares were driven primarily by operationally led profit growth coupled with slightly lower interest expense. Now on to free cash flow. Free cash flow was $77 million for the quarter, up significantly over the prior year despite increased capital expenditure investment driven by increased net profitability and better working capital efficiency. With one quarter remaining, we are revising our full year 2025 guidance to incorporate our strong year to date performance along with factors we expect to influence the business as we close out the year. We now expect revenue in the range of $3.55 to $3.6 billion, implying 10% to 11% year over year growth. Our backlog position provides clarity into the execution range. The single most important factor driving the output is the variability in the timing and level of material receipts received by year end. I would resist the urge to fixate on the implied fourth quarter trend. Over the past few years, we have steadily worked to improve quarterly linearity and our year to date performance this year is certainly reflective of that initiative. We expect Q4 to reflect comparable patterns as last year where there is a step down in growth from the first nine months of the year. Lastly, the nature of our business makes it challenging to run rate quarterly performance into any useful trend. Bottom line, the step down in implied growth to close the year should not be used as a read through for next year. Just as Q4 2024 was not indicative of the growth we are currently on track to deliver for 2025. Next, we are maintaining the range of adjusted EBITDA. As a reminder, the range is between $437 and $453 million as evidenced by our year to date results. We continue to expect IMs to be the source of the vast majority of profit and margin expansion for the year. Adjusted EBITDA margin at the company level continues to be constrained by increased R&D investment, less favorable program mix and less efficient program execution, including the impact of germanium. The increased adjusted diluted EPS range incorporates a slightly lower effective tax rate. We now expect adjusted diluted EPS between $1.07 and $1.12 a share. Our revised tax rate assumption for the year is 18% and our other non-operational assumptions remain static from our prior guidance. Lastly, with respect to free cash flow conversion, we are still targeting an approximately 80% conversion of adjusted net earnings for the full year. Shifting to 2026, w e are in the middle of our normal course budgeting process. It's premature to provide specific guidance for next year, but as a team we are focused on driving continued organic growth and expanding adjusted EBITDA margin. Consistent with past practice, we plan to provide formal guidance in conjunction with our fourth quarter and fiscal year 2025 call in late February. In conclusion, I want to thank the team for their incredible contributions in bringing innovation to solve complex national security challenges, delivering exceptional technologies to our customer and delivering solid financial results for our investors. We will continue to remain focused on rigorously executing our strategy to create value and through durable long term growth. With that, we are ready to take your questions. Thank you. If you would like to ask a question, please press star 11 on your telephone. You will then hear an automated message advising your hand is raised. If you would like to remove yourself, press star 11 again. We also ask that you please wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q and A roster. The first question today will be coming from the line of Peter Arment of Baird. Please go ahead. Yeah, good morning and congrats Bill and John. Bill, thanks for all the support over the years. Really appreciate it. Peter, hey, question on just IRAD spending. Obviously you're seeing a lot of opportunities up pretty significantly, 35% I think in 2025. How do we expect that to be trending? Just because of kind of some of the March performance we've seen at AFC, just because some of that is impacting that. How does that trend as we go forward? I would expect to see this internal research and development investment kind of stay at this% of revenues. I think we're in a more dynamic operating environment where the procurement processes have changed from the department. I think that we're going to continue these investment levels to provide that agility in order to maintain this growth meter. Okay, that was roughly like mid 3% or so or r oughly right around there? Yeah. You can check around there. Okay, helpful. I guess any updates on just kind of foreign military sales activity? Obviously there's a lot of demand signals from Europe. You guys are well positioned. What are you seeing there, Bill? Any opportunities for DRS? Yeah, thanks, Peter. We do think we're going to see a ramp up in foreign military sales opportunity. We're just at the, I think at the start for the force protection, the Counter-UAS. I think that has real opportunity. We continue to see demand for our sensors, the EOIR sensors, and for our network computing. Given the threat environment, we expect those to continue. We are working to develop markets for our naval power and propulsion system, particularly in Asia. Just last one for me, just on. Mike, on the germanium pricing, have things stabilized there? Have you gotten more suppliers or supply lined up for next year? Thanks. Yeah, I'll take that to start and then maybe hand it over to Bill. On the pricing side, as we talked about in our last call, I think we've got 2025 kind of lined out and there were no real surprises or anything from our last call. On the germanium front, we are making some progress in terms of solidifying supply into 2026. I'll hand it over to you, Bill. Yeah. As Mike said, Peter, we're trying to build a structure that supports our revenue flow for optics going forward. That involves in the near term, recycling existing germanium from older optics. Over the midterm, we've moved to diversify our supply base with agreements with different suppliers and processors. Basically, we need to move it away from reliance on China. We're seeing success in both those near term and midterm initiatives, and we think that will put us in a strong position in 2026. Thanks. I'll jump back in the queue. Thanks, guys. Thank you. Our next question will be coming from the line of Robert Stallard of Vertical Research. Your line is open. Thanks very much. Good morning. Good morning. Best of luck, Bill a nd congratulations John, first of all, to kick things off. A very good quarter for bookings. I was wondering if there was a ny unusually large orders that were placed this quarter, and in relation to that, how do you expect these bookings to flow through to revenues? Yeah, I would say there was an increase in demand that we saw on the Counter-UAS and short-range air defense programs. Those came in heavy for the quarter, which accelerated some of the bookings results primarily in the IMF segment. That was a little bit of a pop there. We did see some accelerations just across the board as just the typical flow you see at the government fiscal year end as September wrapped out. A little bit plussed up. As I look out for the year, I expect to be comfortably ahead of that one to one target that we've put out there. We've got a good foundation for that. We expected demand to continue and feel good about our bookings number for the year. In terms of the revenue turn, you know, obviously for us it's about our funded backlog and how that pulls over into revenue. Bill mentioned in the prepared remarks here that the funded backlog was up 20% year over year, and if you look at it sequentially, it's up 7%. We're feeling good about the foundation we have for 2026. Rob. Okay. As a follow up for Bill, you highlighted the extended U.S. government shutdown. If this carries on, what sort of potential risk do you see for DRS from this situation? Yeah, Rob, it depends for how long. Of course we're anticipating at least going well into November. As I said in the prepared remarks, the impact of that length is moderate. As it starts to go longer than that, the people who pay us and give us the awards aren't there, so you'll start to see delays in awards and delay in pay. It would really have to keep going for a longer period where we're already basically longer than we've ever seen. It would have to be a historic length before we'd see an impact. Just one final one for Mike. You said there was some, I think o perating efficiency issues on programs in the quarter. You highlighted germanium. Is there anything else we should be aware of? It's primarily germanium. Obviously, with our development programs, we always have a little lower margin when we have that mix. In terms of the context of the comment, it centers around germanium. That's great. Thank you very much. Thank you. Our next question will be coming from the line of Michael Ciarmoli of Truist Securities. Your line is open. Hey, morning guys. Thanks for taking the question, Bill, John, congrats. Bill, thanks for everything over the years. Maybe just back to Peter's question on the margins. I mean, you guys had 26 targets out there. You've obviously got this elevated R&D. How do we think about the p ayback and measuring the return on this R&D? Should we expect, do we see new programs, maybe an acceleration of revenue growth off of what you've done this year? Just trying to get a sense of r eally measuring the payback on the R&D investments? Yeah, I think the payback on the R&D investments are going to put us in positions to attack a lot of those adjacent markets and growth opportunities that we've had. I think as you think about the kind of new way of procurement and coming to the table with solutions that are already at a higher kind of technical maturity, that's what we're really doing here. I think it is giving us some good opportunities in the Counter-UAS domain. I think it's giving us some opportunities here as we look to kind of unmanned surface vessels. All of these are giving us some additional opportunities to continue the growth that we've seen. That's really what we're expecting from the IRAD investment at these levels Mike. Okay, okay. You just mentioned Counter-UAS and we've heard it a couple times. Is there any way to sort of q uantify or size your exposure at this p oint to Counter-UAS programs and you m aybe size the pipeline of opportunities? You know, you mentioned AUSA. There's certainly a l ot of competing companies from new entrants t o large scale primes, guys like yourselves, everybody's throwing around new offerings. Can you give us any sense of where your revenues are today or what you think your g rowth rate is or sort of adoption penetration there? Yeah, I think this is one of DRS's nice differentiators. When we talk about Counter-UAS, that is largely all of our force protection type of revenue that we have there. We talk about and disclose force protection being about 20% of our revenues. That's largely dominated by the short-range air defense and Counter-UAS program. We have real penetration, which we believe gives us an advantage as we look to the future here. Think about that kind of in that 18% to 20% range of revenue; it is all tied to those efforts. Let me add to that quickly and just say that, you know, we're the current provider, the approved provider for Counter-UAS for the U.S. Army. Our solutions are battlefield tested. We know that our solutions work, and we're always adapting our solutions to the evolving threat. We did see a lot of Counter-UAS solutions on the AUSA floor, but we distinguish ourselves by having a battle-proven capability. We're very close to our customer. We understand what they need, we understand where they're thinking. We do expect Counter-UAS to kind of expand and proliferate to all echelons of the forces and really all domains. We see a real opportunity in the future here, driving innovation and pushing this out, new technology. Okay. Would you say you're kind of equally e xposed to both kinetic and kind of Non-kinetic solutions for Counter-UAS? Yeah, I would say this, Michael. I think that you're going to see both capabilities on the battlefield. It's going to depend on where you are in the echelon. If you're up in the front, next to the front, you're going to see some capabilities. Back in the back, at higher echelons, you're going to see other capabilities. DE is going to end up probably at both echelons, but those capabilities are going to be differing. You're going to start seeing the Counter-UAS market kind of proliferate across all echelons, all different capabilities, and we provide all of that. Okay, last quick one for me, Mike. Should we expect the same margin p rofile in 2026 with kind of IMS b eing the lead engine and some more of that IRAD dampening down the ASC margins? Yeah, I would expect the trends to continue. We're not going to go deep into 2026 here, but in terms of just the allocation of profit, the investment is going to stay heavy at ASC, and we still feel pretty good about the tailwind that is Columbia as we look into the future. Got it. Thanks guys. I'll jump back in the queue. Thank you. Our next question will be coming from the line of Kristine Liwag of Morgan Stanley. Your line is open. Hey, guys. Bill, congratulations on your retirement. It's been a pleasure to see how you've transformed Leonardo DRS over the years. John, congrats on your new role. I guess following up on the supply chain, you guys have called out germanium a few times, so I just wanted to dive a little bit deeper into this. Can you talk a little bit more about your sourcing strategy for this? How much inventory do you have? It sounds like you got a little bit better access, but it would be really helpful to understand regarding some sort of timeline or some sort of quantity. Yeah, thanks, Kristine. I don't think I can give you precise numbers, but let me give you kind of the approach we had before anticipating these kinds of issues. Bought a buffer stock, which is we are using to transition 2025 and support our 2025 flow through at the same time. We're now actively involved in recycling from over optics and pulling the extracting the germanium and constructing new optics from that. We've seen success in that process, and that will bridge us into 2026 and get us partway through 2026. At the same time, we're involved in developing partnerships with companies in both the mining and the processing area outside of China, so that we have a long-term supply. That's what gives us confidence that we're going to have a robust 2026 and we're going to be able to support our germanium needs with these both mid-term and short-term initiatives. Great, thank you for that. Maybe pivoting to a different topic, in the quarter you guys made a $15 million investment on Hoverfly. I think you're now at 25% of your equity stake here. I wanted to better understand what's your strategy regarding these unmanned capabilities. Where does this fit into your broader portfolio and strategic vision? I would say the investment with Hoverfly is really kind of key to some of the strategy that we have in terms of making sure we're bringing the best in breed technologies to different solutions. We think this tethered capability is going to allow for, obviously, elevated sensing, for targeting, potentially for Counter-UAS. There are some good applications here for this capability, and that's what fostered the investment. If I could do a follow-up question. IMS growth was up 34% year over year, 32% up sequentially. Can you provide any color on how much of this was driven by the Columbia class? Were there any other transitions in ship sets that drove this step up? Thank you. I didn't catch the first part of that question, Kristine. I'm sorry. On IMS growth, IMS was up 34% year over year, up 32% sequentially. Trying to understand how much of this step up was driven by Columbia class or if there were other transitions and ship sets that drove this increase. Yeah, good question. The increase in the revenue. Actually, Columbia has been pretty stable from its revenue output in a quarterly cadence throughout the course of the year. The increase in revenue is really coming from a lot of the short-range air defense and Counter-UAS programs for the quarter. That's where the big pop was this quarter. Great. Thank you. Thank you. As a reminder, please limit yourself to one question and one follow up. The next question will be coming from the line of Anthony Valentini of Goldman Sachs. Please go ahead. Hey guys, thanks for taking my question. Bill, congrats on a great run. I'm just trying to get a sense for the longer term growth prospects here. Are there opportunities to take what you guys are doing in propulsion on Columbia to other types of ships and programs? The primes are talking about significant growth in missiles, which I think are highly dependent on the sensors. You guys have expertise there. I'm wondering how large the missile business is today for DRS and where that can go over time. Any color really on the large growth factors would be great. Thanks. Thanks, Anthony. This is John. Let me start with the ship and the propulsion systems. Absolutely, we are looking and bidding other ship classes, and we have some real progress in that regard shaping. We believe that we have an advantage in providing energy flexibility on board a ship. It's not obvious, but the more energy power a ship has, the further away it can fight, you know, longer range radars, longer range electronic warfare, a longer range directed energy. Our solutions allow for that capability to be able to direct that energy to different places on the ship. Yes, for sure we believe that there's opportunity, long-term growth for us there. Turning to missiles, DRS has always been a supplier of the best infrared sensing in the industry and other sensors as well. We're really at the top of the food chain when it comes to missiles. Those missiles have to be smarter, they have to have longer range, they have to have greater capability. We're seeing an increased pull for those higher performing sensors into that space. We're playing at all different levels from the very low cost, high volume missiles and effectors all the way to the very high end missiles and effectors. Thank you. One moment for the next question. The next question will be coming from the line of Seth SeIfman of JP Morgan. Your line is open. Thanks very much. Good morning everyone, and congratulations to Bill and to John as well. Wanted to ask John, you mentioned at t he outset the Sage Core. I wonder if you could talk a little bit about how that fits into the U.S. Army's Next Generation C2 plans and the extent to which that can be a growth driver. It seems there's a good amount of funding headed in that direction. Thanks, Seth. Let me step back and talk about the fact that when we see platforms, all platforms are going to end up having to think for themselves. They're going to have to sense for themselves and think for themselves. At the end of the day, those platforms that are at the edge of the battle space, whether it's land, sea, or air, are going to have disrupted communications in battle. The computing resources for those platforms to think about what's happening on the battle space have to be on the platform, have to be at the edge. This is where we're putting our energy, this is where we're putting a lot of our money, to build out that capability. The connectivity from the platform up to the enterprise will be there at certain times, and some of the enterprise capabilities will play there. Those platforms have to think. This is part of the Next Generation C2 program with the U.S. Army, being able to build out a capability on the platform not just to communicate, but also to think. We're adding the AI capability, and now with the Sage Core, it's really the DRS operating system which we're going to place onto those computing resources at the edge that allow those platforms to think for themselves, to fuse the sensing information, to have AI, to understand what's going on on the edge, and to be able to make sense and act on the information. That's where Sage Core fits into the program, not just for the U.S. Army's platforms, but we're also using it on the sea for USVs. We're also putting it in other air platforms and in space as well. Excellent, excellent. Thanks. As a follow up, we could, j ust talk about IMs and on the Columbia, kind of what ship set you're up to, or maybe a different way of saying it is how far up the curve are we in terms of when you've got kind of to a place where pricing is kind of stabilized. Yeah. We've talked about Columbia in the past that we're always kind of working on three different chipsets simultaneously. In terms of our revenue base, what happens in 2025 is we will start to pretty much retire the second chipset, which was bid at a lower price point. Subsequent to 2025, we'll be at a cadence where all of the new ship and revenue base associated with the different ship classes will be negotiated after the design was materially complete, after the inflation impacts to labor and materials. We should see more consistent margin output from Columbia starting in 2026 with one more year of margin expansion. The little asterisks I'd put on that is, that is before we see the margin benefit from the South Carolina facility. Think about that impact starting in 2027. Great, great. Thanks very much. Thank you. Our next question will be coming from the line of Andre Madrid of BTIG. Your line is open. Good morning, everybody, and congrats to Bill and John. Thank you. Thank you. I want to talk again about Hoverfly. Great to see the upped investment there. Is this something that fits into your previously outlined M&A criteria? Yeah. I would say that when we're talking about M&A, we're looking at different aspects of that, whether they're joint ventures, partnerships, minority investments, and certainly with this capability, having the ability to assist us in elevated sensing, to bring our sensors through from a network perspective. I think that this kind of checks the boxes that we were looking at from an M&A perspective, and it's certainly strategic to where Leonardo DRS is headed. Got it, got it. That's helpful. I wanted to follow up on the Counter-UAS work that you guys are doing. Could you maybe talk a bit more a bout the margin profile of that work and if it's generally accretive or dilutive to IMs? Yeah, we don't get into the marginality of this particular programs, but it's the same customer set. It's, you know, in line with the rest of our portfolio. There's no anomalies here from a drag or from a tailwind perspective. Got it, got it. I appreciate the color, Mike, and I'll leave it there. Thank you. Our next question will be coming from the line of Ronald Epstein of Bank of America. Your line is open. Hey, guys, this is Alex Preston on for Ron today. First of all, just wanted to echo the congratulations to both Bill and John. Thank you. I wanted to circle back on the government shutdown. Obviously, 3Q bookings are really strong. You guys mentioned there's not a ton of material impact at this point, but I'm wondering if you're seeing any slowness in the contracting environment and if so, where? I think, for instance, we might have expected Golden Dome Awards to be maybe a little more firmed up by now, given the reconciliation funding is to be spent, there's contract vehicles in place. Curious if you have any commentary on that. Yeah, as I said, it would take a while before this would catch up to influencing things like that. It would, you know, go through things like testing to prove systems out. Those schedules are generally pretty far out, so we haven't really seen much more than modest impact yet. It would have to go much closer to the end of the year before we'd see that. Okay, thanks. Just as a quick follow up, you know, we've noted a bunch of us have noted the strength in Counter-UAS bookings and revenue this quarter. Just curious if you could characterize more on where the demand is coming from. I know you mentioned there's particular strength of the U.S. Army, there's foreign military sales involvement. Just curious if you could provide any color on the split there. I think that's where the demand is coming from for sure. We are seeing demand coming from really all over. We're seeing demand coming from the Army for sure and that's evident in the bookings. We're seeing demand coming from Navy, Marines as well. The U.S. Air Force is also plagued with this problem. We're seeing progress there in demand building and some bookings there as well. Of course, direct, commercial, and international FMS sales as well. There's demand coming from all avenues as you might imagine, due to the changing nature of warfare. Great. Thank you guys. Appreciate the help. Thank you. Our next question will be coming from the line of Jon Tanwanteng of CJS. Please go ahead. Hi, good morning. Thank you for taking my questions and congratulations on your retirement and John Fran on their appointments. My first question is if you could d rill just a little bit more into the germanium supply, that would be helpful. You mentioned bridging into the future with r ecycling and then alternative supply. Do you expect to be constrained in the coming quarters as your stockpile f alls off, and then maybe catch up l ater in the year, or how do you expect that to shape up? Do the programs that you have f ill 100% of supply right o ut the gate, or does it take time to get there? We think we have a plan, Jon, that does bridge from 2025, where I think we've taken account of the supply restrictions and price increases, and we have it planned into 2026 with the different initiatives that I mentioned. We're feeling comfortable as to where we are. Okay, great, that's helpful. Second, is the price on these alternative supplies significantly higher than what you're seeing in the market? Does that further impact the ASC? Margin as we go forward? How should we think about the profitability there as you ramp these alternative sources? Yeah, I would say that as you know, we're largely a fixed price shop, so the higher pricing is certainly going to be inherent in those programs as we look into 2026. Okay, got it. One last one, if I could. Any changes to thoughts on capital allocation y ou obviously did the Hoverfly investment. You did some share repurchases. Any thoughts on capital allocation and use of cash going forward? Yeah, I mean, as we've said, we want to have a balanced capital allocation strategy, so we've instituted a dividend this year. We have a moderate buyback, but our priority continues to be seeking out M&A opportunities that meet both our strategic and financial criteria. In that, we've exercised patience, we've looked at a lot of things. We are doing the Hoverfly this quarter, as we mentioned, we're looking at larger investments as well. You should expect going forward to see more M&A, but a balanced strategy as well. Great. Thank you, and congrats again. Thank you. Our next question will be coming from the line of Austin Moeller of Canaccord. Your line is open. Hi, good morning. Thanks again, Bill and John, for your leadership. Just my first question here. You talked about recycling germanium from older optics. It sounds like you're going to get additional legs on your supply beyond Q1 2026, which is, I think, what you discussed last time for your visibility. Have you looked into alternative glass-based solutions like Black Diamond glass, potentially to replace the germanium just given it has less temperature sensitivity and better supply? You're correct. We are looking at alternative materials. It's particularly relevant for smaller optics where you can replace germanium with others. That is part of the portfolio of solutions we're pursuing. That one is in the early stages, but we are seeing success there as well. Okay, just to follow up, if we think about the opportunity for Golden Dome and when do we start to get RFPs and contracts for that, do you have any sense of the timing? Next year? There's also your partner, AeroVironment, has been testing UAS solutions at Grand Forks in North Dakota. Let me take the Golden Dome part of that for sure. We're seeing a lot of activity on Golden Dome. While the architecture is not yet public, we certainly see movement. You're probably aware of the Shield RFI/RFP that I think 1,500 companies bid, including DRS. We do expect that to move forward very quickly. I think that we see opportunity here not just in the space sensing, but also in the under layer and also in the Overland Horizon radar area. We believe that that's going to move forward and General Bootlein is moving forward very quickly. On the Counter-UAS front, we see a lot of activity in Counter-UAS including Anduril's activity. I think that, just to go back to the points about the fact that we are the ones that are solving this problem for the U.S. Army. We have battle-proven technology, we've proven our capability, and we're following the threat, making sure that we're ahead of the threat and very close to a customer. Got it. Thanks for filling me in. Thank you. I would now like to turn the call over to management for closing remarks. Please go ahead. Thank you, Lisa. Thank you all for your time this morning and your interest in DRS as usual. If you have any follow-up questions, please call or email me. We look forward to speaking with all of you again soon. Enjoy the rest of your day. This does conclude today's program. Thank you all for participating. You may now disconnect.