Good afternoon, and welcome to the Luna Innovations Incorporated Fourth Quarter and Full Year 2022 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Allison Woody, Senior Director of Administration. Please go ahead. Good afternoon, and thank you for joining us today. Following market close today, we issued our fourth quarter and full year 2022 earnings press release. As usual, you can find the release in a presentation with supplemental information for the quarter posted to the investor relations section of our website. If you do not have a copy of the release or the supplemental materials, please check our website at lunainc.com. We will also post a replay of this call to our website. Some of our comments and discussions today are based on non-GAAP measures. These adjusted numbers exclude the effect of certain non-cash expenses and other items. The adjusted results are a supplement to the GAAP financial statements. Luna believes the presentation and exclusion of these items is useful to focus on what we deem to be a more reliable indicator of ongoing operating performance. Before we proceed with our presentation today, let us remind you that statements made on this conference call as well as in our public filings, releases, and websites, which are not historical facts may be forward-looking statements that involve risks and uncertainties, and are subject to changes at any time including, but not limited to, statements about our expectations regarding future operating results or the ongoing prospects of the company. Actual results may differ materially as a result of a variety of factors. More complete information regarding forward-looking statements, risks, and uncertainties is available in the company's SEC filings, which can be found on the SEC website and our website. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments, except as required by law. After our prepared remarks, Scott Graeff, our President and Chief Executive Officer, Gene Nestro, our Chief Financial Officer, and Brian Soller, our Chief Technology Officer, will be available to take your questions. At this time, I'd like to turn the call over to Scott. Good afternoon, everyone, and thank you for joining us today. I'm pleased to be here to discuss a year of significant accomplishment as well as our 2022 fourth quarter and full year results. I'll also share our 2023 outlook. Before I get into the details of the fourth quarter, I'd like to reflect on the year we just closed and comment on what we see for the current fiscal year. Certainly, 2022 was a year of significant execution and achievement. Overall, I would characterize 2022 as a transformational year for Luna. Incredibly, it has been a full year since we announced the divestiture of Luna Labs and the acquisition of LIOS. You will remember that divestiture, in particular, was a critical element of execution on our strategy to focus our capital on fiber optic measurement and sensing solutions. As you may remember, when we set our strategic plan, we knew that we would need to divest assets that weren't a fit for a pure-play fiber optics company and invest in initiatives and assets that were a strategic fit and that would support acceleration of growth. The Luna Labs transaction represented the sale of the last non-core asset in the Luna portfolio. It also eliminated the limitations that were present as a result of the Luna Labs' reliance on the SBIR program. Not only did divestiture allow us to become a pure play in fiber optics, it also removed a natural governor to our growth. We also added important capabilities to our portfolio with the acquisition of LIOS Sensing, a set of assets that we knew would put us in a position to lead the market in fiber optic-based sensing solutions for infrastructure, energy, and industrial applications. With LIOS based in Germany, this acquisition broadened our European footprint. We enter 2023 with Luna positioned as a global fiber optics leader. We have a more significant international presence, and we are poised to further capitalize on all of the opportunities available in our ever-expanding markets. In addition to the last two transactions I just discussed, we also did considerable work to optimize Luna's operations across our various locations. To reframe, we acquired two substantial international assets during COVID. Integration is hard enough in normal times, but even more challenging during a global pandemic. I'm extremely proud that we were able to assess, acquire, and integrate these two companies, all without the advantage of face-to-face interactions. While remarkable, we did have some need to optimize our acquisitions. We made significant progress through 2022 towards refining our integration. Each of the members of my leadership team have spent time in the U.K. and Germany, as well as all the other Luna locations. Through the integration work, we gained an understanding about the operating process, and with that made necessary changes. We've gotten closer to our employees and made determinations about whether we had all the right people in the right seats. We have formulated a more detailed, yet holistic view of the company, unified these businesses that have executed against our philosophy of One Luna. This is critical to our ability to optimize the whole, thereby increasing efficiencies and preparing for significant scalability. To drive the kind of growth we believe we're capable of, we need to ensure that our team understands and embraces our vision and culture, understands our approach, and has clear line of sight to their role in serving our customers with excellence. The ultimate purpose of our work is to strengthen the infrastructure of our leading global organization with world-class capabilities. Our investments in infrastructure and systems, as well as added capabilities from recent acquisitions, position us for a strong future in an expanding market with incredible potential. We're headed into 2023 with intense focus on and high expectations for organizational optimization, large customer wins, and market advancement. We'll talk more about the outlook for 2023 later, but right now I'll turn our focus to a review of the financial performance for Q4 and the full fiscal year 2022. I'll also touch upon a few business highlights before I turn the call over to Gene. For the fourth quarter of 2022, we recorded total revenues of $31.7 million, an increase of 31% compared to the prior year period. Adjusting for the foreign exchange, revenue was $32.5 million, up 34% versus last year's fourth quarter. Our gross margin was 61% in Q4 2022 versus 58% for the three months ended December 31st, 2021. Adjusted EBITDA was $4.7 million for the final quarter of 2022, compared to $3.1 million last year. Our adjusted earnings per share for the three months ended December 31st, 2022, was $0.08, matching the EPS figure from the prior year period. For the full year of 2022, we grew total revenues by 25% to $109.5 million. On a constant currency basis, we grew to $111.9 million, an increase of 28% and the midpoint of our guidance range. I'm pleased that the growth was driven not only by last year's acquisition, but also by very strong growth in our legacy businesses. Adjusted EBITDA was $12.1 million for the 12 months ended December 31st, 2022, compared to $7.6 million for the prior year. This put us at the top end of the $10 million-$12 million range we projected for 2022. You can see that the strategic changes we made resulted in a stronger flow-through of our top line growth to profit. Adjusted EPS was $0.21 for the year ended December 31st, 2022, compared to $0.17 for the prior year. Through last year, you heard me say that investment was critical to both our top and bottom line growth. Our financials are proving that case. We're delivering top line growth, and our gross margin and adjusted EBITDA demonstrate that we are creating pull-through leverage to the bottom line. We have continued strong execution against our strategy and have enjoyed consecutive quarters of positive leverage. We fully expect to carry that momentum forward into 2023. Before we look too far into the future, I wanna share some year-end highlights from the businesses. By now, I realize that this may be coming old hat to you, but I like to take the opportunity each quarter to remind everyone that our capabilities fall into two categories. First, fiber optic sensing, and second, communications testing. Let's start again with sensing, where we use fiber as the physical sensor to create smart materials and structures. This includes pairing the following instruments that we manufacture with fiber sensors that allow distributed measurement and monitoring of physical assets like stress, strain, temperature, pressure, and more. ODiSI for short range, high resolution applications. HYPERION for long range discrete applications. DAS for long range continuous acoustic monitoring. DTS for long range continuous temperature and strain monitoring. Terahertz, a technique that leverages fiber optic technology to produce terahertz waves used to measure layer thickness and density of opaque materials. Growth in Q4 in our sensing vertical, which includes both OptaSense and LIOS, was 16% compared to the same period last year. Growth was supported by the acquisitive revenues generated in Q4 by LIOS Sensing, which we acquired in March of last year. Looking only at the project side of the sensing business, where revenues are generated through larger sales that directly or indirectly support large field deploy projects, revenue grew about 10% on a year-over-year basis. This was a tough comp related to Q4 2021 based on the historically high level of revenues and growth achieved in that quarter. Also, as we've discussed on our last several calls, the project-related business is an area of significant growth, but the associated revenues can be lumpier in nature. We've taken, and continue to take, measures to smooth out these lumps by improving our overall project management approach. Growth in the non-project portion of our sensing business, which includes sales of our legacy ODiSI, HYPERION, and Terahertz products, was up 26%, driven by the strong continuing secular drivers that support growth in this market. Overall, our growth strategy in sensing is continuing to drive market adoption of our technologies in a number of key focus areas, including infrastructure, aerospace, energy, and industrial applications of our Terahertz technology. Let me share just a few examples of recent successes that we've had in this portion of the business to help you understand why we're optimistic about the future. We were awarded multiple large power cable monitoring contracts in North America, including partnering with Dominion Energy to provide monitoring services for the largest offshore wind project in the United States. Our products will be used to monitor the project's export cable system, which will transport power to shore. Once fully operational, this system will displace as much as five million metric tons of carbon dioxide emissions annually. We are proud to count this amongst our growing list of global flagship installations. We also won a large contract with PT Freeport Indonesia, one of the world's leading gold and copper mining companies. We will provide an early warning monitoring system for the earthen levees that rely in the mining operations. Our technologies will greatly enhance the safety of those structures. Winning the PT Freeport contract is particularly exciting because it builds on work we started last year in the mining industry. As I mentioned then, Luna has a preeminent solution for protection of tailings dams and levees used globally by mining companies. The potential in this industry is significant for us. We won a large contract with a major organization in Europe for deployment of fire detection systems for battery storage facilities. Similar to the PT Freeport win, we know that our technology can greatly enhance the safety of our customer's operation. As a final example, we secured additional pipeline monitoring awards in Texas, Nigeria, Mexico, and Saudi Arabia in Q4, demonstrating our global reach. I'd also like to share a quick note on progress in Terahertz. Terahertz revenue grew 47% year-over-year in Q4, where deployments in manufacturing for automotive EVs and industrial adhesives continue to be major drivers. With all of the activity I just outlined, it's safe to say that we feel very good about the future growth potential of this business and are looking forward to continuing to share updates as we make strategic progress in these critical growth areas. Moving on to the communications test vertical. As a reminder, this area includes our high-end line of communications test products, such as the OVA and OBR, as well as our polarization measurement and control modules and the RIO Laser business. This business is now 50% test and measurement equipment for communications testing devices and 50% optical components and laser modules, a combination that lends to a variety of photonic applications such as medical devices, sensing systems, and LIDAR. Revenues in this vertical in Q4 2022 grew 59% versus 2021. On last quarter's call, I talked about a recent large order from our OBR 6200 product for support of the global fleet of F-35 aircraft. I'm happy to report that in December, we did indeed receive a large follow-on order for our OBR 6200s from our partner, Northrop Grumman. The agreement includes an initial receipt of a $3.4 million incremental multi-unit purchase order for the OBR 6200 portable backscatter reflectometer. We're excited to continue expanding our strong relationship with Northrop Grumman. We look forward to continuing our work with them, providing critical testing and monitoring technology for the aerospace and defense industries. As we've discussed before, large recurring orders such as this are a testament to and foundational to the success of our growth strategy. Another very important highlight since we were last together is our announcement that we signed a $14.2 million contract with our long-standing partner, Intuitive Surgical. Deliveries on this significant order began in December. We are moving forward on the program with no delays. We also had a very strong sales quarter for polarization modules, recording 27% year-over-year growth. The growth was driven by strong sales associated with the larger OEM contracts I just mentioned, in addition to strong sales of our gyroscope coils for navigation applications. As a final highlight for the comms test vertical, I'll note that in Q4, we received multiple large OEM orders for our RIO line of tunable lasers, totaling over $3 million for applications in LIDAR and space-based communications. I also wanna provide an update on the ongoing effects of the supply chain challenges. As many others are, we are still experiencing pandemic-related delays in supply chain. Supply chain pressure that we experienced in 2021 carried over into 2022. For example, issues with semiconductor part availability, combined with increasing lead times and prices have not abated, though we have seen some improvement. Our team is managing this as best as possible, but we have felt and expect to continue to feel the effects of disruptions in the global supply chain for at least a few more quarters. We've created a bit of buffer for ourselves to ensure that we continue to get products to our customers as quickly as possible. You will notice this on our balance sheet in the inventory account. What does this all mean for us as we head into 2023? Because of the foundational work we did in 2022, we've entered 2023 with a strong leadership team and organizational structure, proven systems, and best practices. Our charge for 2023 will be to continue to drive operating excellence that will help to set the stage for greater expansion into new markets, where we can deliver our superior capabilities and capture share. With a united team and an expanded sales force, we will drive forward in the pursuit of additional large multi-unit orders and the expansion of existing customer accounts. We're more confident than ever about our strategic direction and excited about the opportunities ahead. We're beginning to reap the rewards of our shift to become a pure-play fiber optics company, and we're optimistic about the opportunities in front of us and growth we expect to drive. We are just getting started, and our future is very bright. Knowing this, we are issuing our 2023 outlook ranges, which are total revenues of $125 million-$130 million, adjusted EBITDA of $14 million-$18 million, and first quarter 2023 revenue of $23 million-$25 million. As I share this outlook with you, I wanna remind you that even with our recent growth, we remain a cyclical business. Like many companies in our industry, we are weighted towards the second half of the year. Q1 historically has been our softest quarter, followed by steady acceleration through the remainder of the year. Please keep that in mind as you consider the ranges we're providing today. Before I hand things over to Gene, I wanna mention a few more items of interest. I recently attended OFC, a premier trade show event hosted in San Diego for telecom and data center optics. As I walked the floor, it was as busy a scene as I've ever seen in the last 10 years. That kind of activity is proof positive of what's going on in the market and the opportunities available to us. I'm also happy to share with you that Luna will host its first ever Investor Day this spring in New York. Details will be issued soon, I look forward to seeing many of you to share even more about where we're headed. I wanna wrap up the way I started. 2022 was a transformational year for Luna. I believe we sit in rarefied air as a company that set a five-year strategic plan and actually delivered against it in the middle of a pandemic. Our steady execution against this plan allow us to be in the position we are today, a pure-play fiber optic company. If you're wondering what comes next, I hope you'll consider attending our Investor Day. I'm happy to take questions about any of the topics I've discussed today, but for now, I'll turn the call over to Gene. Gene? Thank you, Scott. As we just heard from Scott, 2022 was a year of significant achievement. The financials and business highlights he shared demonstrate our strategic focus and the abundance of our long-term opportunities. As he mentioned, we made incredible strides last year by completing the divestiture of Luna Labs, finalizing the integration of OptaSense, managing the onboarding of LIOS, and now operating as a pure-play fiber optics company. It marked a culmination of our work against our five-year strategy and puts us in an incredibly strong position for 2023 and beyond. You may remember me saying at last year-end that putting a scalable foundation in place was critical to our ability to efficiently drive both organic and acquisitive growth. We spent much of this past year laying this groundwork, while we still have some work to do, we are happy with our progress and look to create synergies we can leverage going forward. We are proud of the fact that we accomplished all of this while continuing to manage through the residual complications of the COVID pandemic. I am particularly proud of the entire finance team, without whom we would not have been able to accomplish all of this work. There was an incredible amount of heavy lifting that had to be done behind the scenes throughout 2022 in order for us to be where we are today. With a strong foundation, consolidated operations, and expanded capacity, we are well prepared for market expansion and continued growth. With that as context, I'll turn our attention to fourth quarter and full year results. Revenues for Q4 2022 increased 31% to $31.7 million on a GAAP basis. On a constant currency basis, revenue increased 34% to $32.5 million. The increase in revenues was driven largely by the LIOS acquisition and strength in communications test products. Our gross profit increased to $19.3 million for the quarter compared to $14.1 million for the same quarter last year, representing a gross margin of 61% this quarter versus 58% in Q4 last year. The increase in gross margin was primarily due to mix as product sales comprised a higher portion of our total sales this quarter versus Q4 2021. Going forward, we continue to expect our gross margin to be approximately 60%. Operating expenses were $17.9 million compared to $13.1 million in Q4 2021. The primary drivers of this increase were LIOS, which was not included in prior year's Q4, employee costs, product redesigns, and IT spend. Our operating profit was $1.5 million and 4.6% of revenue compared to $1 million and 4.3% in the prior year quarter. As we've mentioned before, adjusted EBITDA is a key metric reflecting our underlying operations. Adjusted EBITDA for the quarter ended was $4.7 million, an increase of $1.6 million from last year's Q4. For the full year, revenues increased 25% to $109.5 million on a GAAP basis and increased 28% to $111.9 million using constant currency. We are pleased that annual revenue was within our guidance, especially considering the lingering impacts of the COVID pandemic. The increase in revenues year-over-year was driven largely by the LIOS acquisition, increasing adoption of our Terahertz Technology and strength in communications test products. Our gross profit increased $14.9 million - $66.5 million for the year compared to $51.6 million last year, representing a gross margin of 61% versus 59% last year. The increase in gross margin was primarily due to revenue mix. As I mentioned previously, we expect our gross margin to be approximately 60% going forward. Operating expenses for the year were $68.4 million versus $54.1 million last year. LIOS and its associated amortization added $9.5 million. The remainder of the increase was due to employee costs, commissions on higher sales and product redesigns as we continue to prepare Luna for its future growth. For the full year, operating loss of $1.9 million improved $700,000 from the prior year. Let me move now to the balance sheet. We ended the quarter and year with $6 million of cash and cash equivalents compared to $17.1 million at the end of 2021, as we funded the LIOS acquisition with cash and debt. Our working capital was $54.2 million on December 31st, compared to $49.8 million on December 31st, 2021. Our working capital increased slightly due to the full year impact of the LIOS acquisition, as well as an increase in inventory due to expected product redesigns and the lingering effects of COVID on our supply chain. Our total debt outstanding is $23.2 million as of December 31st, 2022. Overall, as Scott mentioned, we had a solid performance in Q4 and the full year. Let me now address our outlook for 2023. As you heard Scott say earlier, our outlook ranges are total revenues of $125 million-$130 million, adjusted EBITDA of $14 million-$18 million, and first quarter 2023 revenue outlook of $23 million-$25 million. With that, I will turn the call back over to Scott. Thank you, Gene. Brian, Gene and I would be happy to take any questions at this time. Chad, please open the call for questions. Thank you, sir. We will now begin our question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question will be from Jim Marrone from Singular Research. Please go ahead. Yes, thanks for taking my call, gentlemen. Maybe I have a few questions. Maybe let's just start with the supply side headwinds that you mentioned in the call. I think from previous calls you mentioned that the supply side constraints were actually coming from the clients and not so much from Luna. Is that still the case or is Luna also experiencing supply side constraints? Yeah, you know, I think the answer is both, Jim. Most of what we experience is delays on the project side, and they are supply delays related to our customers on the project base. We have seen supply issues, and why I talked about on our side was. You know, we have quite a bit of cash tied up on the balance sheet due to loading inventory higher than we normally would, because of being able to chase down some of the parts that we need. We're able to get them. We're having to buy a lot more of them, and pay a higher price. Brian, is that fair, or do you wanna... Yeah, I think that's accurate. I mean, we've seen, as Scott mentioned, some easing. That easing has mostly been on the project side, and the impact on our customer base. We're you know, still experiencing delays in procurement and board development, longer than, you know, much longer than typical, but that's been the case for the last 18 months. Yeah, it's really both with a little bit of easing on the customer side. Okay, good. Thank you for that insight. Is that what's kind of weighing in on the bottom line are these additional costs? Because the revenue growth is, you know, seems to be there. I think it is, it does have the acquisition in there in that revenue growth. In terms of the adjusted EPS being flat, is the, you know, the additional costs are in a way in on the bottom line? Is that what we're seeing there? You know, so if you take a look at this year and you look at our headcount, and you would take where we ended last year, plus LIOS, we actually have, you know, when you add those two together, a headcount reduction. We were looking and keeping our headcount in line and our costs in line. I don't think that's the case. It's just timing I think of when you look at some of these expenses that come in. I'm not sure are you looking at year-over-year or quarter or? Well, just the 4Q EPS being flat, the adjusted, so. Yeah. I guess it's other operating costs or- We're certainly experiencing more operating costs. We're experiencing higher prices. You know, we did increase a lot of our ASPs, but some of these project-based deliveries, you know, Jim, have been out there for quite some time, so there's no chance to increase some of those, but we bought things throughout the year. We have experienced a higher cost that I think is reflected in that adjusted EPS flatness that you're seeing. Yeah, okay. Thank you for that color. And also it's may have been addressed in prior calls, I can't recall. But, you know, has there ever been any thought as far as providing segment results, maybe, you know, between sensing and testing or even geographically if you're expanding into Europe? Yeah. I don't know if it's ever been addressed before. I don't know whether we talked about it publicly. We internally talk about it. It's just not the way that we manage, you know, we manage the business. You know, we break out and we show, I think we show the different revenues as it relates to geographically. You know, we show, you know, the U.S. and Asia, Europe and the rest of North America and South America, you know, like Canada, things like that. We break some things out geographically, but as it relates to, you know, some of the sensing and comms test business, many of that, you know, co-mingles, and that's not how we really manage the business. That's not why we don't report it out that way because that's not how we really manage it. We have sales guys that really go across both of those segments, so we really don't run it as a segment-oriented business. Right. I guess in the end of the day, it's all fiber optics, right? It's still a pure play fiber optics company. It really is. It's just, you know, we're using them differently, you know, there's a customer that would be buying an OBR as well as buying a HYPERION system to be on a, you know, a piece of infrastructure, whether it's a bridge or a tunnel. It's hard to say, you know, that may come through in one sale. You know, you'd have to go into that PO and break it out and say, well, this was... That's just not, y ou know, we're managing that from a customer basis rather than from a segment basis. All right. Fair enough. Given that, you know, your focus is being a pure play fiber optics company, then, you know, what's your appetite for 2023 in terms of acquisition? Are you looking to probably, possibly do another one, you know, with regards to geographical footprint or vertically integrating? Just wondering what your thoughts on the appetite. You know, I think our philosophy is, we talk about it at the board, and we just had a, you know, our three-year strategic plan that we presented to the board earlier this year. We are constantly looking, and I would say eyes downrange and looking at things. Anytime you go and you're bidding on a project, for example, and you have, you know, three, four, two, three others, at the table, you'd like to say that there's only one at the table, and that's Luna. I think we continue to look at things to gain more market share. You know, we believe in the organic growth that we experience here and will continue to experience. We don't feel like we need to be in a rush on anything, but certainly, are looking to the future in, you know, inorganic, growth would certainly be a part of our, of our strategy. Okay. Very good. Thank you for that insight then, gentlemen. I'll pass the call over to the others. Thanks, Jim. Thank you. The next question is from Alex Henderson from Needham. Please go ahead. Great. Thanks. It's a little difficult, looking at the history of the company to ascertain what the seasonal patterns are and some of your expenses, given how much has changed over the years. Can you talk a little bit about, you know, you've said that they're seasonally weak on the revenue side, and more back-half weighted, but is that also then going to impact the gross margins, which would then be under a little bit of seasonal pressure? Similarly, if I look at the sales and marketing R&D lines, I'm assuming those are relatively stable on the R&D side and generally tick down a little bit on the sales and marketing side. Is that kind of the right seasonal pattern we should be thinking about? Yeah. You know, we believe, you know, Alex, we believe that, you know, the high 50s, and we say 60% on the gross margin is where we will, even in some of those down, you know, in the cyclical quarters that we have, we'll still be able to maintain that. You know, the variables are your sales expenses and things like that as it relates to commissions and things like that. That kind of self-governance. I mean, I think you can look at steady R&D costs. We continue to steadily plug a lot of our investment into our R&D for redesign of current products and new products. I think you can continue to see that. The gross margin pull-through, we don't see that dipping really below where we're setting is at that bottom. You know, the operational expenses move around a little bit. You know, we said that in Q3 when we announced Q3, that, you know, even when you go back to Q2, you know, we said that was a high watermark, whatever it was in Q2 of last year, and then we dipped down with some things in Q3. We said it, you know, it stabilizes in that I don't have it in front of me, 16.5%-ish or somewhere in that range, 16.5%, 17%. Some quarters we'll experience a little bit more and some less given how we're pushing some expenses around. In general, it will stay pretty steady, Alex. Similarly, if I look at the seasonal commentary, the year-over-year growth rates, shouldn't be seasonal generally. Your guide, implies a couple of percent at the low end and, a little over 10% at the high end, and then it accelerates, over the course of the year to get to, I think it's 15% at the low end. Can you talk a little about what the mechanics are around that? Thanks. Yeah. You know, we talk about this, you know, kind of mid to upper teens, 15%-20%, you know, organic growth. We just have never experienced that type of growth, year-over-year in Q1. It just doesn't come. It, you know, we talk about that type of organic growth on an annual basis. Q1 is always a difficult, I mean, you know the test and measurement space, where, you know, people just don't spend money in Q1. We continue to see that. We even see it on the project-based side, where, you know, people just don't deploy in Q1. It just ends up being a much smaller year-over-year, organic growth, Q1 over Q1, and that goes back for several years. On average, when we look at annual growth, we do stand, you know, feel like, you know, that 15%-20% growth is good numbers. Just as a reminder, the first quarter, is that your period of your normal annual pay increases? It is. It is. How does your turnover and how attrition rates look, and what kind of annual increase, should we be thinking of modeling in, for those expenses? Yeah, we expect, you know, to be adding people as we go through this year, as we're, you know, growing our business, especially internationally. I would say the best way to look at it is if you take a look at this year, we were about. I'll just tell you how we look at it internally. We were a little bit above 62% full year on the OpEx side. We think next year we'll probably be in the mid-50s, 55-ish, 56, somewhere in that range as a percent. It should grow. You should see, you know, Q1 to Q2 to Q3 to Q4 creep up a little bit as we're adding people in there and certainly commissions. When you step back and take a look at our OpEx, roughly, you know, close to 70% of our, of our OpEx is headcount related, whether it's, you know, bonus, salary, stock comp, et cetera. 6% is amortization and, you know, 5% or 6% is commission. On a higher sales, it'll ramp up that way. I hope that, I hope that helps with your answer. We also track, you know, to make sure, especially now with everything that's going on, we wanna make sure we stay in line with our OpEx. Our sales per employee is something that we track and look at. In 2021 it was $280,000 per employee. 2022 it was $315. We think next year it should be in the mid $300s. One more clarification. The growth rate in the fourth quarter, I believe that was partially organic, partially inorganic. Can you give us either a pro forma growth rate, what the growth rate would've been had you had the same assets in the year ago or, and/or a split between organic and inorganic growth, please? I'd have to look that up, Alex. I don't... You know, I'd have to look to see what, say, LIOS did in Q4 of 2021. I don't particularly know that offhand. You can get back to me on it. It's fine. Yeah. I'll get back to you on that, and we can look at what that is. One last question then I'll cede the floor. Can you talk a little bit about, you know, how the pipeline has developed over the course of the year? I I know that, when we talked to you guys out at OFC, you know, it sounded like things are in pretty good shape. Have you seen any changes in that, you know, with the turbulence we've been seeing here in 1Q in terms of pipeline strength? Yeah. We have not. Pipeline continues to build at about that same rate. Book-to-bill throughout the course of 2022 ran between 1.1 and 1.2. Product book-to-bill, if you take our small contract revenues out, was close to 1.2 for the year, so that's historically pretty strong for Luna. You know, not really driven by, you know, supply chain, supply chain pre-buying or anything like that. It was just strong growth. Q1 on the order book side's, you know, off to a good start, so continuing along that trajectory. Great. Thank you so much. Thanks, Alex. The next question is from Paul Essi from William K. Woodruff & Co. Please go ahead. Thank you for taking my questions. You may have touched on it a little bit, but I wanted to talk a little bit about the sales and marketing. I guess with LIOS, you had mentioned that you're trying to beef up that the marketing effort there. If you could talk a little bit about that, and I know it's a long lead time if, you know, if you're seeing any fruits of the labor there. Also, your cross-selling strategy and where the monitoring aspect of this would fit in. You know, and are you know, as well as are you going after some of your installed base in that monitoring area? I have a follow-up after that. Yeah. I'll take a stab, and then I'll let Brian, you know, kind of add to that, Paul. The sales and marketing is in these last two acquisitions that we've done, is something that we're focused on. Keep in mind, you know, the OptaSense acquisition, you know, was part of a much, much larger organization in QinetiQ, and then the same with LIOS being owned by NKT. A lot of those assets, if you will, those people, resided up at the parent. It is an aggressive push that we have to do to get additional sales and particularly marketing in Europe. We are pushing hard on that, and growing that. That is a focus of what we are working on. Yeah. Hey, Paul, this is Brian. That is bearing fruit. On the, you know, on the sales side of the equation, you know, if you look at that project business and the integration we've done between the last two acquisitions, the book-to-bill in quarter four was over 1.6. The bookings. We really are seeing the fruit of those labors, the additions we've made and the integration we've done, and it's showing up in the bookings. As we've discussed in the past, you know, those orders will be scheduled out over, in some cases, 18 months. You know, we didn't see as much of the fruit of that from a revenue perspective in quarter four here in the first half of this year. You know, that's all being laid in, and it's a part of that growth curve that we see. As Scott discussed, part of the reason, you know, we'll see a little bit lower growth in the first half and more in the second, revenue-wise. Okay. Okay. Then the cross-selling, how is that handled? Is there someone that's the point person, or do they just trade leads back and forth? Yeah. I mean, Yeah. You know, that announcement of the Dominion Energy deal is important from a couple ways. You know, that was something that was in the pipeline of LIOS and we delivered that, but we brought with that and pitched Dominion why they should also want the strain sensing from OptaSense, you know, with the acoustics. That is an example of bringing together both the LIOS and OptaSense capabilities into a project. That is some cross-selling there. Yeah. All of our sales leaders in that side of the business, carry the full bag, and cross, you know, really cross-sell, the DAS and DTS products and are incentivized to do so. It's not like we have two teams that are incentivized to cross-sell. It's really more like we have one team selling everything. Okay. Okay. Then the monitoring, is that something that everyone, you know, is very well integrated as well? Also along those lines, if you've gone back into the install base, what's been the reception in trying to get some of the monitoring business? Yeah. The reception's been very, very good. In fact, we just finished the commissioning on one of the world's longest oil and gas pipelines in Turkey. Once we were able to complete that, I think we have 50+ systems on that pipeline, you know, we went back to, you know, to that installation to talk about, you know, service installations over the course of the next, you know, three, four, five years and, you know, very highly regarded. The Dominion Energy news that we discussed in our press release and on the call here today, same story in terms of, you know, really strong reception for that kind of ongoing service portion of the monitoring contract. One last question. The infrastructure build, not the broadband, which has its own issues, but, you know, the brick-and-mortar, the dams, the traffic patterns. What's your strategy here and what would be the timing of these funds being released over the next year or two? What type of impact may that have on you? Also, again, it's a long question, but how does the monitoring tie in with that program? Most of that is going to include our monitoring capabilities. In fact, I'd say when I say most, it's probably more accurate to say all or nearly all. Okay. You know, our strategy there is to follow the dollars, you know, from the federal agencies into the state, agencies, DOTs, et cetera. Also, you know, make sure we're keeping close track of the feed consultants that and the prime contractors that contracts will be let to. We have our business development team, paying very, very close attention to that as you, as you might imagine, you know, to make sure that, you know, we're aware of any and all RFPs that Luna could respond to, whether it be infrastructure, roadway, you know, et cetera. Timing-wise, that's it's rolling out a little slower maybe than we would have expected. You know, we were thinking early part of this year, mid part of this year, we'd start to see a little bit more impact on that. You know, frankly, I'd have to say that the expectation is probably moved out towards the later part of this year and the next year, before you'd start seeing a material impact. You know, it is coming. The projects will be let, they will start, Luna will be participating in those. Yeah. you know, Paul, it's truly unbelievable how these guys, you know, in many ways are difficult in rolling things out. I guess, you know, you expect it with the federal government maybe, but, you know, we're standing there, we have teams in front of them. They certainly know that we have the capabilities. They've talked to us about it. They just don't have the money yet. I don't fully appreciate or understand the delay. We certainly stand ready with it, and monitoring is a huge piece of that. We really believe that that'll play an impactful role in us going forward. Very good. Thanks for taking my questions. Yep. Thanks, Paul. Once again, if you have a question, please press star then one. The next question is from David Kang from B. Riley FBR. Please go ahead. Hi. Thank you. First question is, Brian, you talked about book-to-bill. Just wondering what that was for fourth quarter and also, if you can talk about the backlog situation. Should we expect book-to-bill to be over one, in first quarter? Yeah. As I said, throughout the year last year, it was running between 1.1 and 1.2. Fourth quarter was a little bit lower. It was really more driven by the revenues bumping up. From a book-to-bill perspective, it was more like one, you know, between one and 1.1, like 1.05. We netted the year out total 1.14, and just on the product side, 1.17. Still really strong for the year. A lot of activity between now and the end of the quarter, we expect, you know, we expect a strong book-to-bill in quarter one. I think the new norm, Dave, is certainly north of one. You know, 1.1, you know, maybe drifting to 1.2, even 1.3 in some particular quarters. I don't think we drift back down to one anymore now with some of the businesses we have. Got it. Just quickly on this year's projection. I think you talked about this year being back-end loaded as usual. Should we expect like, what, 35%, 65% or maybe 40%, 60%? Any color on that? Yeah. You know, historically, we've gone out where, you know, kind of 44, 56-ish. Maybe, you know, maybe it's closer to 40, 60, 42 in that range on H1. You know, I believe, you know, if you look at, you know, at that, you know, that midpoint of the range, you could easily be, you know, probably in that, you know, low 40s, I would say, is where we end up being. Got it. Then on regarding 10% customers, did you have 10% customers last year? Who could be 10% customers this year? No, we don't have any 10% customers. No. Yeah. No, no. We don't have that type of exposure. I think we the larger customers, drift up into the 5% - 7% range. you know, we don't have a major concentration in the top, you know, 10. Not for a full year. Got it. Not even like a Lockheed or Northrop? No, no. You don't expect them to be 10% customers. Not Lockheed, Northrop- Okay. Intuitive. Yeah, those will be-. Not on an annualized basis. They'll be 5% or 7%. Yeah. nothing that, nothing that gets up to 10. Got it. All right. Thank you. All right. Thanks, Dave. The next question is from Michael Haymaker, a private investor. Please go ahead. Yep. Thanks. Hey, I noticed that you came in at kind of the low end of the full year revenue outlook, and I'm wondering if that's just revenue that's been deferred into this coming year or if it's revenue that's been lost? Yeah, we, you know, we have a lot of when we gave guidance, you know, you have to, you know, put a stake in the ground as far as what you consider on the FX effect. You know, and that's why we go out with this constant currency. You know, constant currency, we were right around 112 is the midpoint of the range that we gave, you know, a year ago. You know, we gave guidance range of 109-115. Certainly, we continue to see as adding LIOS continue to have a little bit more lumpiness with the project base. You know, on a constant currency to finish $32.5 million for the Q4 and $112 million annually in the middle of our range and pulling, you know, the $12 million of EBITDA, you know, we feel pretty good with, you know, Asia locked down all year, still on COVID throughout all of 2022 and some of the supply issues that we had, along with the lumpiness. We feel really good about being at $112 million, which is at the middle, the mid-range of that $109 million-$115 million on that top. You really do have to factor in that, which is why we go out and announce that constant currency. When we gave the guidance range, there's no way for us to, you know, to know what the, you know, the foreign exchange is gonna do. That's why we kinda lay it out that way. Great. Great. I noticed inventories are up. Is there a revenue recognition timing kind of thing that's gonna make things look a little better in Q1 than otherwise would or? Well, you know, I think, you know. That's why I mentioned inventory is up in many cases, due to some of the supply issue, you know, issues that we've had and we're inventorying things. That could be finished good inventory that's waiting to be delivered on the project side that has that up, and that certainly is the case, as well as some parts that we're buying, you know, six months or a year's worth. We never had to do that in the past. I don't know where we finished, I think mid-30s probably on the inventory side. You know, that's high for us. And we recognize that, but it is. You know, we've never done that before, mainly due to some of these issues that we're having, on the project side with the finished goods, and on the parts side, on the product side. So- Yeah. If you can get that inventory out, that's. For sure. Is that upside for the Q1? It's upside for 2023. You know. 2023. We talk about Q1 being, you know, on the softer side. Love to flush it out in Q1 for sure. You know, I think we certainly see it staging out in 2023, which is why, you know, we have it laid out that way. Okay. My last question. You, last time I think you mentioned you had about six deals in the red zone that were gonna be repeatable and recurring revenue and that kind of thing. I saw you got Dominion, obviously that was a great one, and Intuitive Surgical. I saw something in the release about Silicon Photonics, a new laser. That- Is that gonna be one of those? Well, when you look at, when you look at the, you know, the Intuitive Surgical, was certainly one of those bigger customers that we've been selling to for years and placed that $14.5 million dollar order on us, over 18 months. The follow on with the F-35 with Northrop Grumman, was another one of those. You know, you have the big programs like some of the mining, dam issues, that are out there, where we talked about with Dominion Energy on the windmill. There's a couple, there's probably, there's still three or four hanging out there, that have not come in. You know, some on the EV battery manufacturing, some on the medical side. We have some big things still lingering out there, and we will certainly announce those when they come to fruition. You know, there's quite a few still sitting inside that area. It just takes longer to get, you know, to punch it into the end zone, if you will. Yep. Yep. Yeah, I imagine you've seen the after-hours pricing on the stock. I'm guess I'm searching for some good news for everybody. Yeah. Yeah. No, I haven't, I haven't looked closely at it. We're kind of tied up here in prep, but, you know, I'm many times surprised whether, you know, it goes one direction or the other. It was a really good year for us and, you know, with some of the things that we've been able to achieve. You know, I say transformational, I don't take transformational lightly. In that divestiture of the Luna Labs and removing that and becoming a pure play, you know, this is the full execution of a five-year plan that we put together five years ago and really feel good about delivering on that, in, you know, with all the other side, you know, static that was going on throughout the last five years. Yeah. Not sure. It's a big accomplishment. Is there another five-year plan coming then for the next five years? Certainly. Certainly, I welcome you, Michael, to come to the investor day that we're gonna have in New York. We'll certainly do some press releases before that and lay some things out. That'll be a real well laid out version. You know, not just hearing from me, but hearing from the depth of this team that I have here and really a well laid out Investor Day that we have lined up. I think we should be able to lay out and give you insight into what these next three to five years look like and what we think it looks like and why we're so excited about what we believe that can prove. Great. All right. Thanks for answering my questions. Appreciate it. Yeah. Thank you. Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Scott Graeff for any closing remarks. Well, thanks everyone for joining us today. you know, to our investors, you know, please feel free, reach out to Gene, Brian, Allison, or me with any questions. Really mark it on your calendar. You know, we'll get some details out, but don't forget we're gonna be hosting this Investor Day, first ever, this spring, and we'd love to see as many of you as possible. We will drop out the details of that in a press release, so that you can get it on your calendars. We're kinda coming to you, if you will, up in New York, and we hope to see a lot of you there. Chad, I'll let that be the conclusion of today's earnings call. Thank you so much, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.