Good day, everyone, and welcome to the Mercury Systems First Quarter, Fiscal 2025, Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I'd like to turn the call over to the company's Executive Vice President and Chief Financial Officer, Dave Farnsworth. Please go ahead, Mr. Farnsworth. Good afternoon, and thank you for joining us. With me today is our Chairman and Chief Executive Officer, Bill Ballhaus. If you have not received a copy of the earnings press release we issued earlier this afternoon, you can find it on our website at mrcy.com. The slide presentation that Bill and I will be referring to is posted on the Investor Relations section of the website under Events and Presentations. Turning to slide two in the presentation, I'd like to remind you that today's presentation includes forward-looking statements, including information regarding Mercury's financial outlook, future plans, objectives, business prospects, and anticipated financial performance. These forward-looking statements are subject to future risks and uncertainties that could cause our actual results or performance to differ materially. All forward-looking statements should be considered in conjunction with the cautionary statements on slide two, in the earnings press release, and the risk factors included in Mercury's SEC filings. I'd also like to mention that in addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, during our call, we will also discuss several non-GAAP financial measures, specifically adjusted income, adjusted earnings per share, adjusted EBITDA, and free cash flow. A reconciliation of these non-GAAP metrics is included as an appendix to today's slide presentation and in the earnings press release. I'll now turn the call over to Mercury's Chairman and CEO, Bill Ballhaus. Please turn to slide three. Thanks, Dave. Good afternoon. Thank you for joining our Q1 FY25 earnings call. We started FY25 with positive momentum, delivering results in line with or ahead of our expectations, and I look forward to our continued focus on performance improvement as we move through the fiscal year. Today, I'd like to discuss three topics. First, some introductory comments on our business and results. Second, an update in each of our four priority areas: delivering predictable performance, building a thriving growth engine, expanding margins, and driving improved free cash flow. And third, performance expectations for FY25 and longer term. Then I'll turn it over to Dave, who will walk through our financial results in more detail. Before jumping in, I'd like to thank our customers for their collaborative partnership and the trust they put in Mercury to support their most critical programs, and our Mercury team for their dedication and commitment to delivering mission-critical processing at the edge. Please turn to slide four. Coming out of Q1, I am optimistic about our strategic positioning and our expectations on delivering predictable organic growth with expanding margins and robust free cash flow. Our Q1 results were generally as expected: Q1 bookings of $247.7 million, up 29% year-over-year, and a book-to-bill of 1.21. Q1 revenue of $204.4 million, up 13% year-over-year. Q1 Adjusted EBITDA of $21.5 million and Adjusted EBITDA margin of 10.5%, both up substantially year-over-year, and Q1 free cash flow of - $20.9 million, up $26.2 million year-over-year. We ended the first quarter with $158.1 million of cash on hand. These Q1 results reflect solid progress in each of our four priority focus areas, with highlights that include improved execution across our portfolio, and most notably in our Common Processing Architecture area, with progress toward full-rate production. Expanding our record backlog to over $1.3 billion, up 16% year-over-year. Reduced operating expense, enabling increased positive operating leverage, and continued progress on free cash flow drivers, with net working capital down $97 million year-over-year, or 14.6%. Please turn to slide five. Turning to each of our four priorities, and starting with the first, delivering predictable performance. In the first quarter, our focus on delivering predictable performance positively impacted our results primarily in three areas. First, we continue to make progress on mitigating what we believe to be predominantly transitory impacts that we have discussed over the last several quarters. In Q1 FY25, we recognized approximately $11 million of items, down 31% from $16 million in Q4 FY24, including $8 million of net EAC change impact across our portfolio and $3 million of inventory reserves. These items impacted Q1 revenue by approximately $8 million and gross margin by approximately $11 million. Although still greater than we would like to see, the magnitude of these items is the lowest in five quarters and reflects the progress we are making in driving toward predictable execution by maturing our processes in program management, engineering, and operations. Second, we continue to make progress in the quarter, ramping toward full-rate production in our Common Processing Architecture product area. We expect to have our full capacity online as we move through the second half of the year. Notably, this production progress contributed to receiving over $50 million in follow-on orders in the quarter. And third, our focus on improved operational performance and delivering for our customers generated an acceleration of deliveries in the quarter, as reflected in a 21% year-over-year increase in point-in-time revenues. The $16 million of year-over-year point-in-time revenue increase was a primary driver of our year-over-year revenue growth, the majority of which was driven by accelerated deliveries from Q2. Please turn to slide six. Turning now to the second focus area, driving organic growth. Q1 bookings of $247.7 million resulted in a record backlog of over $1.3 billion, up 16% year-over-year. In line with our expectations, over 90% of Q1 bookings were production in nature, which we believe is a good leading indicator that our mix shift toward production is continuing. Some wins in the quarter worth noting: a follow-on award in our Common Processing Architecture area, which was facilitated by the continued progress we made in Q1 in ramping up toward full-rate production. A production order for heads-up displays used in the Navy's T-45, a trainer aircraft, which is instrumental to preparing Navy and Marine Corps aviators to fly off of aircraft carriers. A large follow-on order from a prime contractor for FPGA processor boards to be integrated on a key U.S. Air Force program of record, where Mercury has already delivered hundreds of boards for developmental testing. Under the new contract, Mercury will deliver approximately 1,500 production boards. A large follow-on production order for a multi-chip module that will be employed in a key U.S. Air Force program of record, where Mercury is the sole source provider of this device. A large production order for RF Solutions employed in a critical missile defense system that is being used in multiple regions to provide a defensive umbrella against hostile threats, and a five-year contract worth as much as $131.3 million from the U.S. Naval Air Systems Command to continue providing secure data transfer systems for naval aircraft, which enable the transfer of data between planners on the ground and aircraft, significantly improving operational readiness of airborne assets. These awards are important not only because of their value and impact on our growth trajectory, but also because they reflect those customers' trust in Mercury to support their most critical franchise programs. We know from engagements with our customers that our unique capabilities providing mission-critical processing at the edge align well with their priorities and what we view as strong demand in growth markets, including sensors and effectors, electronic warfare, avionics, and C4I. Please turn to slide seven. Now turning to our third priority focus area, expanding margins. As we've discussed in prior calls, in our efforts to achieve our targeted adjusted EBITDA margins in the low to mid-20% range, we are focused on the following levers: executing on our development programs and minimizing cost growth impacts, getting back toward a more historical 20/80 mix of development to production programs, driving organic growth to generate positive operating leverage, and achieving cost efficiencies. Q1 adjusted EBITDA margin of 10.5% was in line with our expectations and indicative of progress on each of these levers we're pursuing in our effort to reach our targeted margins over time. Gross margin of 25.3% was in line with our expectations and largely driven by the average margin in our backlog coming into FY25. As we discussed last quarter, our backlog margin coming out of FY24 was lower than what we expect to see on a go-forward basis, driven primarily by a small number of low-margin development programs and programs that incurred adverse EAC adjustments in FY24. We expect backlog margin to increase going forward as we continue to bring in new bookings, as we did in Q1, that we believe will be in line with our targeted margin profile and accretive to the current average margin in our backlog. Operating expenses, specifically R&D and restructuring and other charges, are down significantly year-over-year as a result of the actions implemented in FY24 to streamline and focus our operations. Additionally, Q1 R&D reflects the completion and streamlining of internally funded efforts and an increased allocation of resources toward customer-funded activities to drive development contracts to completion and to accelerate customer deliveries. Going forward, I expect R&D levels to increase incrementally as we progress on customer-funded activities and ramp up targeted efforts in our Advanced Concepts Group to fuel innovation across the Mercury processing platform. Please turn to slide eight. Finally, turning to our fourth priority focus area, improved free cash flow. We continue to make progress on the drivers of free cash flow and, in particular, in reducing net working capital. Although our net working capital balance and free cash flow in Q1 were partially impacted by timing, with an expected Q1 cash inflow of $19 million occurring in early Q2, net working capital is down year-over-year, $96.6 million, or 14.6%. Inventory is down $11.8 million year-over-year. Notably, WIP is up 23% year-over-year from $101.1 million to $124.3 million, and raw materials is down 12.3% from $235.9 million to $207 million, reflecting an increased mix of inventory progressed toward delivery. While inventory is up sequentially, this increase is offset by an increase in deferred revenue, which reflects our focus on improved contract terms. Unbilled receivables are down year-over-year $90.3 million, or 23.2%, and down sequentially $5.8 million, reflecting our focus on progressing our programs in order to deliver for our customers and, in turn, invoice and collect cash. We believe our continuous improvement related to program execution and hardware delivery, just-in-time material, and appropriately timed payment terms will lead to continued reduction in working capital and improved free cash flow performance going forward. Please turn to slide nine. Looking ahead, I am optimistic about our team, our leadership position in delivering mission-critical processing at the edge, and our expected ability over time to deliver results in line with our target profile of above-market top-line growth, adjusted EBITDA margins in the low to mid-20% range, and free cash flow conversion of 50%. As we discussed last quarter, although we will not be providing specific guidance this early in the year for FY25, I will reiterate the color we previously discussed. Although we are pleased with the acceleration of customer deliveries and revenue into Q1 largely from Q2, we continue to expect that revenue for the first half will be approximately in line with last year. For FY25, we continue to expect revenue to be relatively flat year-over-year, with an increase in run rate as we exit the fiscal year. With respect to gross margin, as we discussed last quarter, our current backlog margin is lower than what we would expect to see on a go-forward basis, driven primarily by a small number of low-margin development programs and programs that incurred adverse EAC adjustments in FY24. Although we are encouraged that our recent quarter bookings are accretive to our overall backlog margin, we continue to expect low double-digit adjusted EBITDA margins overall for FY25, with adjusted EBITDA margins in the high single-digit range for the first half of the year and then expanding in the second half as we complete lower margin development efforts and continue to shift our mix toward production. Finally, with respect to free cash flow, we are expecting to be cash flow positive in FY25, with second-half free cash flow higher than the first half. In summary, given the operational improvements over the last several quarters and our recent momentum, I expect that our performance in FY25, in particular our exit run rate, will represent a positive step toward our target profile. As we progress through the first half of the year, I look forward to providing additional insights relative to our expectations for second-half and full-year performance. With that, I'll turn it over to Dave to walk through the financial results for the first quarter, and I look forward to your questions. Dave? Thank you, Bill. As Bill previously noted, our first quarter results were in line with or ahead of our expectations and reflect solid progress toward our goal of transitioning the business to deliver predictable performance characterized by organic growth, expanding margins, and robust free cash flow. There is still a lot of work to be done, but we are encouraged by the progress we have made so far, and we continue to expect our transition efforts to become more apparent in our financial results during the second half of fiscal year 2025. Our continued progress in our priority areas is highlighted by a few key milestones that we achieved during the first quarter. This includes delivering improved operating performance, making additional progress in our ramp toward full-rate production in our Common Processing Architecture, and continuing to expand our record backlog. With that, please turn to slide 10, which details our first quarter results. Our bookings for the quarter were $248 million, with a book-to-bill of 1.21, yielding a backlog of $1.3 billion, up $188 million, or 16% year-over-year. Revenues for the first quarter were $204 million, up $23 million, or 13% compared to the prior year of $181 million. The increase was primarily driven by higher point-in-time revenue of $16 million, largely accelerated from Q2, as we have continued to improve our operational performance. As Bill noted, we experienced approximately $8 million of net EAC change impact in the quarter as compared to approximately $16 million in the first quarter of fiscal 2024, which was the lowest net EAC change impact in the last five quarters. Gross margin for the first quarter decreased to 25.3% from 27.9% in the prior year. The decline in gross margin during the current quarter was primarily driven by higher manufacturing adjustments and inventory reserves of $11 million. These decreases to gross margin were partially offset by lower net EAC change impacts of $8 million in the current quarter. As Bill previously noted, we expect to see an improvement in our margin performance over time as the average margin in our backlog improves, resulting from newer awards at higher margins. Operating expenses decreased approximately $26 million year-over-year, primarily due to lower R&D expenses, restructuring, and other charges. These decreases were driven by actions taken in fiscal 2024 to improve our performance by consolidating and simplifying our operations. The R&D headcount was impacted by more than 130 employees, driving lower costs as compared to the prior year. GAAP net loss and loss per share in the first quarter were $17.5 million and $0.30 respectively, as compared to GAAP net loss and loss per share of $36.7 million and $0.64 respectively in the prior year. The improvement in year-over-year earnings is primarily a result of reduced operating expenses driven by our reductions in force throughout fiscal 2024. Adjusted EBITDA for the first quarter was $21.5 million compared to $2 million in the prior year. Adjusted earnings per share was $0.04 as compared to adjusted loss per share of $0.24 in the prior year. The year-over-year increase was primarily related to lower net losses in the current year as compared to the prior year. Free cash flow for the first quarter was an outflow of $20.9 million as compared to an outflow of $47.1 million in the prior year. The increased free cash flow was primarily driven by the reduction in cash used in operating activities of approximately $24 million in the current year as compared to the prior year. Slide 11 presents Mercury's balance sheet for the last five quarters. We ended the first quarter with cash and cash equivalents of approximately $158 million, driven primarily by approximately $15 million in cash used from operations and investments of approximately $6 million in capital expenditures. Billed receivables increased approximately $13 million sequentially. Unbilled receivables decreased sequentially by approximately $6 million, due in part to continued successful execution and billings across the program portfolio. Inventory increased sequentially by approximately $16 million, primarily as a result of material receipts supporting milestone invoicing, which largely drove the increase in our deferred revenue of approximately $22 million. On a year-over-year basis, while inventory decreased by approximately $12 million, WIP is up approximately $23 million from the prior fiscal year period, reflecting an increased mix of inventory progressing toward delivery. Accounts payable decreased approximately $6 million sequentially, driven by the timing of payments to our suppliers. Accrued expenses decreased approximately $19 million sequentially, primarily due to payments under our incentive compensation plans and payroll expenses. Deferred revenues increased sequentially in year-over-year by approximately $22 million and $38 million respectively, as a result of additional milestone billing events achieved during the period. These increases were primarily driven by material receipt milestones as we continue to improve on aligning our contractual billing milestones with our cash outlays. Working capital increased approximately $25 million, or 5% on a sequential basis in the first quarter, but decreased by almost $100 million year-over-year. The year-over-year decrease shows the progress we've made in reversing the multi-year trend of growth in working capital, highlighted by four quarters of sequential reductions in unbilled receivables. Net working capital remains a primary focus area for the year ahead, and we believe we can continue to deliver improvement. Turning to cash flow on slide 12, free cash flow for the first quarter was negative $20.9 million as compared to negative $47.1 million in the prior year. As Bill noted, while this negative cash flow performance during the quarter was expected, we did experience some timing delays, which resulted in some free cash flow being pushed into the second quarter. As Bill outlined in his earlier comments, we will not be providing detailed guidance for fiscal year 2025 at this time, but I would point you to slide nine for some qualitative comments. In closing, we are pleased with the solid start to the fiscal year and the higher level of predictability in the business. We believe continuing to execute on our four priority focus areas will not only drive revenue growth and profitability, but will also result in further margin expansion and cash conversion, demonstrating the long-term value creation potential of our business. With that, I'll now turn the call back over to Bill. Thanks, Dave. With that, Operator, please proceed with the Q&A. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw that question, again, press star one. We also ask that you limit yourself to one question, and for any additional questions, please re-queue. Your first question comes from the line of Pete Skibitski with Alembic Global Advisors. Please go ahead. Hey, good evening, guys. Hey, Pete. Hey, Bill. Hey, Bill, could you give more color on the Common Processing Architecture programs? I'm just trying to get a feel for what challenges remain on those programs, if you're just trying to get yields up in the second quarter before you go into full-rate production. Just maybe give us some more of a feel there. And do you still call them challenge programs, or are we past using that term? Yeah, I mean, I'll start with the second part of your question first. We've really moved away from using that term, and I think that's just reflective of the progress that we made over the last five quarters. We talked about it pretty much quarter over quarter, how we made pretty methodical and systematic progress in closing out those programs. When we left it last year, we had a couple left where we felt like the risk was in line with ordinary course risk, and then we had some programs associated with the CPA. We feel like we've made progress such that we don't need to talk about those programs. On the Common Processing Architecture and our production, I'd say from the time that we initiated the root cause corrective action, we halted the line, we put a plan in place, and this is going back a few quarters now, we've pretty much executed to that plan. We're in the progress of ramping up toward full-rate production. As I've mentioned before, we have the resources trained and in place. We have our capital in place. We're just being very methodical and rigorous in how we ramp this up. I think another positive sign in the quarter, and we alluded to the possibility of this in prior quarters, was once we got closer to full-rate production and demonstrating that our corrective action was in place and working, we felt like there was the potential for follow-on awards to become unlocked. And we saw that happen in the quarter, which I think is another positive indicator of the progress that we made on that front. Hopefully, that's some helpful color on the topic. Yeah, yeah, I appreciate it. And just one last one for me. Just was wondering on the cadence here in the first half, it sounds like you had some revenue get pulled forward into the first quarter. So the second quarter will probably be down sequentially, probably year-over-year. Does the gross margin take a step down in the second quarter as well before it ramps in the second half? I was just wondering if you could clarify that for us. That's it. Thanks. Yeah, I'll let Dave address the gross margins, and then maybe I can come back and provide a little color on the volume. Yeah, I think what you see is, and we had talked last quarter about our expectations being in the high single digits, and we were slightly higher than that in Q1. And I think what you would find is, as a result of the volume that got pulled in, we were able to have a bit of a higher operating leverage, which resulted in EBITDA being higher, even though gross margin was not. And so we would expect that if the volume ends up being lower in Q2, we wouldn't have as much of an impact from operating leverage, but it would still be in the same realm from a gross margin standpoint. Okay, great. Very helpful. Thank you. Yep, thanks, Pete. Your next question comes from the line of Peter Arment with Baird. Please go ahead. Yeah, thanks. Good afternoon, Bill and Dave. Hi, Peter. Hey, Bill. Hey, Bill. Hey, Bill. Thanks for all the color on the Common Processing Architecture. It sounds like that's kind of tracking to your plan. But you've always talked about, I think, when you retired the risk on all these other kind of programs that are no longer challenged, that eventually you had to wait for them to get into kind of production before you could be able to start to see that unwind. And obviously, you've made progress on the unbilled, but how do we think about it? It sounds like the CPA will start to ramp in the second half. But how about all those other programs? How do we think about kind of how they layer in? Yeah, I think about it in terms of just a transition that's happening over time. As we're completing the developments, there's then a transition into production. And on many of those development programs, that's the phase that we're in. I'd also point to our operating expense, which reflects an allocation of our engineering and our technical resources to closing out the development programs and ramping up production. So the status varies program by program, but I would say that we're generally in that phase where we're ramping down on the developments and beginning the process of transitioning to production. Okay, that's super helpful. And just a quick follow-up. Just your R&D, obviously, as you mentioned, ticked down this quarter, and then you said it's going to incrementally come back. Is it going back to kind of your historical 12% of revenues, or is that not a good cut? Yeah, I don't expect any major swings, but I do expect some incremental movement on that front, just as we make progress on ramping down on the development programs and then have the capacity to increase in an incremental way our investment in innovation across our Mercury processing platform. Got it. I'll jump back into queue. Thanks, guys. Thank you. Your next question comes from the line of Seth Seifman with J.P. Morgan. Please go ahead. Hey, thanks very much, and good afternoon. I wanted to ask when the CPA programs get ramped up, how do we think about the kind of portion of the mix that programs related to Common Processing Architecture will comprise at that point when they're at full-rate production? Yeah, I think we haven't specifically spoken about exactly what percentage of the portfolio any of these things are. Nothing is. They're not a majority of the portfolio. Everything we have a breadth of 300-plus programs across the portfolio. And no program in and of itself contributes 10% of revenue. So it is a bunch of programs across various capabilities. So it is, as you saw last year, a significant contributor to revenue. And as Bill talked about, we did see increased production booking activity around this, and we expect that to be impactful as we move throughout the second half of the year. Right. Okay. Okay. So I guess you said $50 million of follow-on orders? Correct. In Q1, right? So that's about $250 million, so that's about 20% of the bookings. But it sounds like when we think about where future revenues are going forward, it's not 20% of future revenues going forward. It's something much lower than that in terms of CPA-based programs. Yeah, I think we're not specifically calling out how much that it is of the total. And I would not conclude that it's much less than or much more than. I mean, I think that I don't think there's enough that we've commented on for you to make that conclusion. Okay. Okay. Sounds good. And then just as a follow-on, the SG&A in the quarter definitely down meaningfully from the levels we saw in the second half of last year. Q1 of 2024 was also kind of low, and then it kind of popped up for the remainder of the year. Do we think about a similar profile there, or is that kind of low 30s kind of number sustainable quarterly on a go-forward basis? Yeah, so there is some cyclicality in the SG&A, as you've seen historically from us. It's just timing of some of the expenses that happen. But we do expect our operating leverage to improve throughout the second half. Okay. Excellent. Thanks very much. Your next question comes from the line of Michael Ciarmoli with Truist Securities. Please go ahead. Hey, good evening, guys. Thanks for taking the question. Hey, Michael. Hi, Michael. Good progress. Good results here. Just a point of clarification back to Pete's first question. The first half flat, and I always appreciate the conservatism, but should we expect revenues to be down kind of in that 15% sequential range? I mean, just to think flat year-over-year? Well, I think what we've said is for the full year, we expect our revenue to be roughly in line in the first half. The thing that we're really focused on is the exit run rate coming out of the year. With the things that we're focused on, our four priorities, the progress that we make in the first half of the year and coming out of the first half, we're really focused on the impacts of that focus and how it drives our run rate coming out of 2025 leading into 2026, so that's really where our focus is right now. But what we said is first half roughly in line with last year, and we did have a little bit of pull forward from Q2 into Q1, but appreciate that our focus is really on driving the exit run rate coming out of the year. Got it. Got it. And then I guess just on that exit run rate, is there any way to quantify? I mean, if you get to full capacity on the Common Processing Architecture, I mean, can you maybe help us out with kind of the overhead absorption, what the drag on gross margins are now, just in getting full volume through on the end of the year? Yeah. I mean, I'll comment on the things that we're thinking about as the drivers on that exit run rate, and it aligns with our priority focus. So first, it's continuing to drive down the volatility in the business, getting the Common Processing Architecture line up to full-rate production. Second, it's on our bookings and our organic growth focus. It's on the mix of bookings. And in this case, it's also on the margin in our bookings based on the dynamic that we talked about of our backlog margin being a little bit lower than what we'd expect to see on a go-forward basis driven by some low-margin development programs and EAC impacts from last year. And we are feeling good about the new bookings coming in and being accretive to our backlog margin and in line with our target margins aligned with our target profile. Also, the progress that we make on the working capital front and how we're able to allocate increased capacity away from deliveries on the large unbilled balances that have very little revenue with them and over to programs that do have a higher revenue content. So I mean, there's nothing new in what I just said. That's what we've been focused on for the last year plus. And those are the areas that really are going to drive our velocity and our run rate coming out of the year, both top line and on the bottom line. Got it. Got it. Just the last one, I'll jump off. Just on those production bookings that you're getting, especially if it's kind of a core legacy program, not talking about the new CPA bookings. I mean, do you see that line of sight to gross margins maybe at or above the 40% level? Michael, it's Dave. We do see that and have spoken about we expect those margins to be in line with what our target model is for production. And we have been seeing that as Bill indicated in Q4 and Q1 bookings on those production activities. Yeah, I think the other add here that I'd emphasize is just the mix too. We're seeing in this quarter an even heavier mix toward production, which I think is helpful to the margin story going forward as well. Got it. Very helpful. Thanks, guys. Yep. Thank you. Your next question comes from the line of Conor Walters with Jefferies. Please go ahead. Hi, guys. Thanks for taking my question. Congrats on a great quarter. Hey, Conor. Hi, Connor. Maybe sticking with the bookings, you're clearly making great progress here given the 90% production mix in the first quarter. This seems to be much improved from the 80% on fixed price programs you mentioned throughout fiscal 2024. So curious if this provides any clarity or better line of sight on that timing for mix normalization of that 80/20 mix you've talked about previously. Yeah, I think this quarter our bookings overall were greater than 90% production. And I think we had a pretty heavy mix of firm fixed price this quarter. So last quarter, we did say that of our firm fixed price bookings, a certain amount were production. But in this case, it was 90% of our overall bookings, which I just think is further an indication of the shift in the mix. Yeah. I think from the standpoint of when is there a magic point where the 80/20 is crossed? I think we've seen a significant shift, as Bill said, in those production activities that should really be manifesting itself in the second half of the year. So we absolutely see ourselves moving in the direction we've been discussing. Okay. Great. That's very clear. And then just one more from me. As we look at the R&D spend, much improved this quarter. And as we think about the progress you've made since standing up the Advanced Concepts Group recently, just trying to make sense of this as whether truly more efficient spending with customer funds or how we should be thinking about that over the duration of the year and into next. Yeah, I think it's a combination of factors. We have completed some internal projects. We have definitely streamlined our focus. And in Q1, you could see the increased allocation toward customer-funded development programs and production programs. I do think we'll see an incremental lift in R&D as we move through the year and we're able to free up some resources and target it back on internally funded innovation. But as I said earlier, I don't expect major swings. These are more incremental adjustments. Perfect. Thanks so much. Thank you. If you'd like to ask a question, please press star one on your telephone keypad. Your next question comes from the line of Ronald Epstein with Bank of America. Please go ahead. Hey, guys. Good evening. Hey, Ronald. Good evening. A couple of quick ones. What are you seeing in your supply chain and your suppliers? You didn't talk about that too much. And I mean, are there still challenges or not? How's that going? Maybe as a follow-on to that, what's going on with your own workforce in terms of having enough folks and retaining them and so on and so forth? Because it seems like kind of across the industry, workforce and supply chain have been an issue. Yeah. I mean, I'll start with the workforce first. I mean, they're central to everything that we do, and we're very focused on our talent in the organization. I would say that at the current point, I don't see significant constraints on our performance tied to either workforce or supply chain right now, but we are always focused on those two areas, but not seeing any significant constraints. Yeah. I think I would, Ron, this is Dave again. I would add from a supply chain perspective, we haven't seen an elongation of lead times beyond kind of where we've been. We haven't felt that. I mean, are there occasional things that pop up and we got to go figure out, "Hey, can we accelerate that? How do we get that?" Yes. But I would not say there's a systemic thing that we've seen at this point. Got it. Got it. Got it. And then maybe one more if I can. How should we think about free cash flow generation as we go out over time? And when would we expect that kind of more in line with your EBITDA or your net income, that kind of thing? Yeah. Yeah. As you recall, we had a very significant positive cash flow for the fourth quarter. The first quarter, as Bill discussed, we were negative, but much improved from a year ago. There were a couple of things that timing-wise just fell into the very start of the second quarter, and we would have been breaking even or positive in Q1. We expect to be positive for the year, and we expect to have a stronger second half than a first half. And we've talked about we believe that this business should be and will be a consistent positive free cash flow generator. Got it. Okay. Thank you very much. Yep. Thank you. Mr. Ballhaus, it appears there are no further questions. Therefore, I would like to turn the call back over to you for any closing remarks. Okay. Thanks, Krista. Well, thanks, everyone. Appreciate you taking the time to join us for our Q1 FY25 earnings call, and we look forward to another update a quarter from now. Take care. This concludes today's conference call. Thank you for your participation, and you may now disconnect.