Good day, everyone, and welcome to the Mercury Systems 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 Vice President of Investor Relations, Tyler Hojo. Please go ahead, Mr. Hojo. Good afternoon, and thank you for joining us. With me today is our Chairman and Chief Executive Officer, Bill Ballhaus, and our Executive Vice President and CFO, Dave Farnsworth. If you have not received a copy of the earnings press release we issued earlier this afternoon, you can find it on our website at mrcy.com. The slide presentation that we will be referencing to is posted on the Investor Relations section of the website under Events and Presentations. 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, Tyler. Good afternoon. Thank you for joining our Q3 FY 2025 earnings call. We delivered solid results in Q3 that were once again in line with or ahead of our expectations, and I'm optimistic about our ongoing efforts to improve performance as we move through the fiscal year. Today, I'd like to cover three topics. First, some introductory comments on our business and results. Second, an update on four priorities: delivering predictable performance, building a thriving growth engine, expanding margins, and driving improved free cash flow. Third, performance expectations for FY 2025 and longer term. I will 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. I'd also like to thank our Mercury team for their dedication and commitment to delivering mission-critical processing at the edge. Please turn to slide four. Our Q3 results reinforce my confidence in our strategic positioning and our expectations to deliver predictable organic growth with expanding margins and robust free cash flow. Bookings of $200 million and a trailing 12-month book-to-bill of 1.1. Revenue of $211 million and year-to-date revenue growth of 8.9% year-over-year. Adjusted EBITDA of $25 million and adjusted EBITDA margin of 11.7%, both up substantially year-over-year. Free cash flow of $24 million, up $50 million year-over-year, resulting in $146 million of free cash flow over the last four quarters. We ended Q3 with $270 million of cash on hand. These results reflect continued progress in each of our four priority areas, with highlights that include solid execution across our broad portfolio of production and development programs, backlog growth of 4% year-over-year, reduced operating expense enabling increased positive operating leverage, and continued progress on free cash flow drivers with net working capital down $148 million year-over-year, or 24.6%. Please turn to slide five. Starting now with our four priorities and priority one, delivering predictable performance. In the third quarter, our focus on predictable performance positively impacted our results primarily in two areas. First, in Q3, we recognized approximately $3.7 million of net EAC change impacts across our portfolio, which is again down sequentially to the lowest level in several quarters, reflecting our maturing capabilities in program management, engineering, and operations, and progress in completing development programs. Our focus on accelerating customer deliveries allowed us to largely offset the $29 million of revenue that we accelerated into Q2, as discussed in our last call. Please turn to slide six. Moving on to priority two, driving organic growth. Q3 bookings of $200 million resulted in a backlog of $1.34 billion, up 4% year-over-year. In the third quarter, we received a number of significant contract awards, including a total of $40 million in production contracts for our Common Processing Architecture, adding to our backlog in this area, and a $20 million follow-on production order associated with the F-35 program. It's also worth noting that in the month of April, we had several meaningful bookings, including a $20 million follow-on production agreement with an innovative commercial space company that supports a U.S. national security mission, a $7 million development contract with the U.S. Navy for an electronic warfare capability, and a $6 million follow-on production order for a classified avionics program that leverages our commercial memory products and advanced packaging expertise. In line with our expectations, over 80% of trailing 12-month bookings were production in nature, which continues to drive a makeshift toward production. 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. In addition to this bookings progress, in early Q4, we entered into two agreements that we believe will enhance our competitive position going forward. First, we announced the acquisition from Wind River of Star Lab, a longtime partner and provider of cybersecurity software that integrates with our Common Processing Architecture products, adding to our overall differentiation in this area. Second, we announced an agreement to divest and outsource our manufacturing operation in Switzerland, which we believe will enhance our ability to scale and increase capacity with improved efficiency as we pursue continued growth of our international operations. Please forward to slide seven. Now turning to priority three, expanding margins. As we've discussed in prior calls, to achieve our targeted adjusted EBITDA margins in the low- to- mid-20% range, we are focused on the following two drivers: backlog margin expansion as we burn down lower margin existing backlog and replace with new bookings aligned with our target margin profile, and driving organic growth to realize positive operating leverage given our streamlined operations. Q3 adjusted EBITDA margin of 11.7% was in line with our expectations, up sequentially 180 basis points, and indicative of progress on each of these levers in our effort to reach our targeted margins over time. Gross margin of 27% was in line with our expectations and largely driven by the average margin in our backlog coming into FY 2025. We expect backlog margin to continue to increase as we bring in new bookings that we believe will be both in line with our targeted margin profile and accretive to the current average margin in our backlog. Operating expenses are again down year-over-year and down significantly year-to-date as a result of prior and ongoing actions to streamline and focus our operations. Please forward to slide eight. Finally, turning to priority four, improved free cash flow. We continue to make significant progress on the drivers of free cash flow, and in particular, reduced net working capital, which at $453 million is at the lowest level since Q2 of FY 2022 and down $207 million from peak net working capital levels in Q1 of FY 2024. Notably, combined free cash flow over the last four quarters is approximately $146 million, and net debt is down to $322 million, the lowest level since Q1 of FY 2022. 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 net debt 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 for FY 2025, I will update the color we previously discussed. For full year FY 2025, we continue to expect annual revenue growth approaching mid-single digits, with timing positively impacted by our enhanced execution and accelerated deliveries earlier in the year. As we discussed last quarter, our current backlog margin is lower than what we expect to see on a go-forward basis, driven primarily by a small number of low-margin development programs and programs that incurred adverse net EAC change impacts in FY 2024. 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 FY 2025. We continue to expect Q4 adjusted EBITDA margins to be the highest level of the fiscal year approaching mid-teens. Finally, with respect to free cash flow, our year-to-date free cash flow of $85 million is above our previous expectations. Even with this acceleration of cash year-to-date, we expect free cash flow to be around break-even for Q4, resulting in full year free cash flow that is ahead of our prior expectations. In summary, given the operational improvements over the last several quarters and our recent momentum, I expect that our performance in FY 2025 will represent a positive step toward our target profile, and I look forward to providing commentary on expectations for FY 2026 in our call next quarter. With that, I'll turn it over to Dave to walk through the financial results for the quarter, and I look forward to your questions. Dave? Thank you, Bill. Our third quarter results reflect solid progress toward our goal of positioning the business to deliver predictable performance characterized by organic growth, expanding margins, and robust free cash flow. There is still work to be done, but we are encouraged by the progress we have made and expect the fourth quarter fiscal 2025 revenue and adjusted EBITDA margins to improve over those in the first three quarters. With that, please turn to slide 10, which details our third quarter results. Our bookings for the quarter were $200 million with a book-to-bill of 0.95. Our bookings on a trailing 12-month basis reflect a book-to-bill of 1.1. Our backlog of $1.34 billion is up $51 million, or 4% year-over-year. Revenues for the third quarter were approximately $211 million, up $3 million, or 1.5% compared to prior year. Our revenues grew approximately $52 million, or 8.9% on a year-to-date basis. Gross margin for the third quarter increased to 27% from 19.5% in the same quarter last year. As Bill previously noted, we expect to see an improvement in our gross margin performance over time as the average margin in our backlog improves. This is the result of our expectation that newer awards will be at targeted margins coupled with further expected progress toward completion of lower margin activities. Operating expenses decreased approximately $12 million year-over-year, primarily due to lower R&D expense and restructuring and other charges. These decreases were driven by the actions taken in fiscal 2024 and 2025 to improve our performance by consolidating and simplifying our operations and aligning our team composition with our increased production mix, as we discussed last quarter. GAAP net loss and loss per share in the third quarter were approximately $19 million and $0.33, respectively, as compared to GAAP net loss and loss per share of approximately $45 million and $0.77, respectively, in the same quarter last year. The improvement in year-over-year earnings is primarily a result of increased gross margins coupled with reduced operating expenses. Adjusted EBITDA for the third quarter was $24.7 million compared to negative $2.4 million in the same quarter last year. Adjusted earnings per share were $0.06 as compared to adjusted loss per share of $0.26 in the prior year. The year-over-year increase was primarily related to lower net losses in the current period as compared to the prior year. Free cash flow for the third quarter was approximately $24 million as compared to an outflow of approximately $26 million in the prior year. The significantly increased cash flow was primarily driven by the improvement in cash provided by operating activities, which was approximately $48 million higher as compared to the same quarter in the prior year. Slide 11 presents Mercury's balance sheet for the last five quarters. We ended the third quarter with cash and cash equivalents of nearly $270 million, driven primarily by approximately $30 million in cash provided by operations, which were partially offset by investments of approximately $6 million in capital expenditures. Billed receivables remained relatively flat sequentially, while unbilled receivables decreased approximately $7 million. Unbilled receivables decreased year-over-year by approximately $54 million, or 17%. The decrease in unbilled receivables reflects the incremental progress we've made by delivering on programs to our customers, which significantly drove our cash flow performance during fiscal 2025. Inventory increased slightly year-over-year and sequentially by approximately $10 million and $8 million, respectively. We continue to see increases in deferred revenue, which in many cases provides an offset to a portion of our unbilled and inventory balances. Accounts payable increased approximately $9 million sequentially, driven by the timing of payments to our suppliers. Accrued expenses increased approximately $5 million sequentially, primarily due to increased litigation and settlement-related expenses. Deferred revenues increased year-over-year and sequentially by approximately $72 million and $7 million, respectively, as a result of additional milestone billing events achieved during the period. Working capital decreased in the third quarter approximately $148 million year-over-year, or 25%, and decreased by $22 million, or 5%, sequentially. This demonstrates the progress we've made in reversing the multi-year trend of growth in working capital, highlighted by six quarters of sequential reductions in unbilled receivables, resulting in the lowest net working capital since Q2 of fiscal 2022. As a reference point, in the last four quarters, we have driven our net working capital from a high of 72% of trailing 12-month revenue to 51%. Net working capital remains a primary focus area, and we believe we can continue to deliver improvement. Turning to cash flow on slide 12, free cash flow for the third quarter was approximately $24 million as compared to an outflow of $26 million in the prior year. We believe our continuous improvement related to program execution, hardware delivery, just-in-time material, and appropriately timed payment terms will lead to continued reduction in working capital. In closing, we are pleased with the performance through the third quarter of 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. Absolutely. We will now begin the question-and-answer session. If you would like to ask a question, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Please limit yourself to one question and one follow-up. You're welcome to return to the queue to ask follow-up questions. Your first question comes from the line of Peter Arment with Baird. Peter, please go ahead. Yeah, thanks. Good afternoon, Bill, Dave, Tyler. Nice results. Thanks. Hey, Bill, could you maybe give us a little bit of an update on LTAMDS, given just recent developments of that kind of program moving into kind of initial production? I know that was always going to be considered one of your larger programs as we get into kind of that production stage. What is the latest on that? Yeah, thanks for asking the question. We've talked about this before as one of the major programs that we worked our way through. The development has tremendous potential for us in terms of long-term production. We're really pleased to see our customer achieve their significant milestone, which was critical to the program moving forward. We continue to work with them to ramp up consistent with their schedule and their needs and are excited about the growth prospects for LTAMDS. Okay. And then just maybe as my follow-up, Dave, could you just maybe just give us a little more color on the increase in deferred? I know you guys are making a lot of progress on unbilled receivables, and that's been great to see. But just how do we think about the deferred revenues kind of jumping the way it's been over the last few quarters? Yeah, I think Peter goes back to when we've talked about really focused on the terms that we have with our customers and being in a position where we can set milestones we go. As long as we're achieving those milestones, we have solid payment terms associated with that. We've been getting through those milestones on schedule and the payments result. One of the things we've talked about in the past, and you see this in our inventory, is where customers will come and say, "Hey, we'd like you to go buy a bunch of end-of-life components for us so we can have production for several years and not have to worry about it." We say, "We're absolutely willing to do that," and they're willing to pay us to do that upfront so that we can go out and get those things and have them in stock for them. You see a little bit of inventories tick up because of that, but at the same time, the deferred payments that offset that. Got it. I'll jump back in queue. Thanks, guys. Okay. Thanks, Peter. Your next question comes from the line of Michael Ciarmoli with Truist Securities. Michael, please go ahead. Hey, good evening, guys. Thanks for taking the question. Nice results. Maybe just really good free cash flow performance. Dave, what's sort of the optimal net working capital level as a percent of revenues? As you're kind of continuously driving or taking out costs and improving efficiencies, is anything changing with your expectation of free cash conversion? Yeah. No, Mike, thanks for the comment starting out. No, we've looked at it and we've talked about kind of ultimately looking at a 50% free cash flow conversion from EBITDA, and that still makes sense to us. I mean, we're running significantly ahead of that, as you said, because we're bringing down our working capital to a more level that would be commensurate with our business. And as we've talked about, we were as high as the 70+% of revenue. That's just not the right model for this business. We're down in the low 50% now and still have room to go. We've talked about a model in the future, kind of in an ideal world, we'd love to get to 30 or 35%, but more 35-40% is probably the right range for us. We have room to go, as Bill and I have both said before, and we're going to continue to work on that. Got it. That's helpful. Just to follow- up, does this low margin backlog that you're burning off, does that drag, continue, or have an impact as we start fiscal 2026? Should we think of the EBITDA margins you're going to generate in the fourth quarter as sort of a launching point for 2026? Yeah, I think the way I would think about it is every quarter, as we've talked about, we've been adding new bookings that are at our targeted margins or better, so higher than what the existing margin and backlog is, and we're burning off those lower margin things. It's not a binary activity that all of a sudden it's going to jump in one quarter to the final number. It's going to go gradually up there over time. I would not think of it as, "Hey, we're going to wake up one morning and it's going to be completely different." It's going to gradually move up, and Bill's talked about approaching that line over time. Got it. Helpful. I'll jump back in the queue. Thanks, guys. Okay. Thanks, Mike. Your next question comes from the line of Seth Seifman with JPMorgan. Seth, please go ahead. Hi, good afternoon. This is Rukhwan for Seth. Was the revenue stepped down sequentially due to the pull forward into Q2? Yeah, we talked about it last quarter, that our focus on accelerated deliveries for our customers, trying to get the benefits of our technology into their hands sooner. We've been really focused on the operations of the business, and we had a significant pull forward from Q3 into Q2. I think we characterized it as around $30 million. In thinking about the Q3 revenue, I think there's an opportunity to think about it as normalized for that pull forward. For our full-year commentary, as we indicated, our expectations for the full year remain the same. The timing profile within the year is shifting to the left because of the acceleration of deliveries. Right. So that acceleration of deliveries is what's driving the flat revenue year-over-year in Q4 that's implied, which would be a deceleration versus the first half. Correct. Consistent with our prior expectations. Cool. Great. Thank you. Your next question comes from the line of Pete Skibitski with Alembic Global. Pete, please go ahead. Yeah, good evening, guys. Nice quarter. Hey, Pete. Yeah, Bill, maybe to follow- up on Mike's question, just you guys mentioned the 12-month trailing bookings were greater than 80% production. I'm just wondering if we switch to revenue, what's the revenue split development versus production this year, and how do you expect that changes in fiscal 2026? Yeah, we haven't talked about the split out of the revenue that way. Suffice it to say that over time, it follows our bookings for sure. We expect it to continue moving in that direction, but we haven't broken out in our financials exactly how much of the revenue is production versus development. Definitely, you should look at the bookings as an indicator. Okay. Okay. And then just one follow-up. If I look at the 10Q and some of your revenue by program area, the radar area has really grown nicely year- to- date through the first three quarters. Some of the other areas, like electronic warfare, C4I, they still seem to be kind of sort of flattish, I guess. Is there anything going on that is driving that improved radar performance revenue-wise, and it's causing the other couple of areas to kind of lag? Yeah. We've talked about before when we talked about some of the significant adjustments that we saw in the QM catch-up on EACs, that a large piece of that was in that radar area. That had to do with some of our Common Processing Architecture activities. Now you're seeing that's not as big an impact. That was a negative. That was naturally going to rise. If you think about the programs we have, and we don't talk about the individual programs and how much revenue they are, but you guys have a good sense of the programs you know we're working on and which ones are in that radar area. It'll give you an idea of what's driving that. Okay. Okay. Yeah. To complement that, I'm just wondering why the other areas seem to be kind of lagging a bit. Yeah. I think there's not so much lagging. There's a little bit of timing involved in some of those things. Again, remember, we're in a situation where we've been very cognizant of ensuring that materials just in time. We've talked about you'll see some as we go up that curve a little bit slower than we have in the past, some timing impact in some of those areas. Overarching, the revenue will be identical for the programs, just a little bit of a different timing situation. Okay. Okay. Sounds great. Thank you. Yep. Thanks, Pete. Your next question comes from the line of Ken Herbert with RBC Capital Markets. Ken, please go ahead. Yeah. Hi. Good afternoon, everybody. Hi, Ken. Maybe Bill or yeah, Bill or Dave, you called out $40 million, I think, of production contracts for the Common Processing Architecture in the quarter. Just to help put that in context, can you talk about maybe sort of how did that trend across through the first through third quarters? Was that a relatively high number that you called it out? And then maybe, if you can, what% of the backlog does the CPA represent, or can you give any sort of scale as to how that is represented in the backlog? Yeah. No, thanks for the question, Ken. I do not think we have given specifics on the magnitude of the backlog associated with CPA. I will point out, though, that we referenced earlier in the year some strategic wins, good-sized wins, along with the wins that we discussed on this call, which has added pretty substantially to our backlog in that area. Of course, we feel very good about that. It is an area where we see demand. We have differentiation. We added to the differentiation this quarter with the acquisition of Star Lab. We are feeling really good about the progression associated with CPA. I would add that although we do not break out the allocation of our bookings into the individual kind of categories, we have pointed out in the past when there has been a significant booking that was impactful to the backlog in that area. The fact that we pointed out that $40 million is an indication that it is impactful, that that is significant. Yeah. That's helpful. Thanks. I know it's been over the last few quarters you've been able to call out some nice share gains on some specific recompetes or new wins. Can you give any commentary on the competitive landscape maybe and how you see the opportunity to maybe outgrow the industry here in these areas, especially with what looks like to be a host of new program starts coming out of the DOD as part of maybe the 2025 supplemental or into 2026? Yeah. I mean, those dynamics are still shaping up, but I think in general, we feel pretty good about the tailwinds, at least as they've been discussed to date and more specific to us. I think we feel well-positioned. I think it's backed up by our LTM book-to-bill of 1.1. Already in this quarter, we had some nice wins and a volume of awards that in the first month of the quarter is the highest that we've seen in any quarter in our history. I don't want to make too much of that because the first month of a quarter is usually a low-volume month, but we did have a good month of April and feel good about where we sit in some of those tailwinds. Great. Thank you very much. I'll pass it back there. Okay. Thank you. Your next question comes from the line of Conor Walters with Jefferies. Conor, please go ahead. Hi, guys. Thanks so much for taking the question. Hey, Connor. On the quarter. Hey, guys. Thanks, guys. Thank you. Yeah. Maybe on the EBITDA margins approaching mid-teens for Q4, it's a nice sequential step up. I was hoping to dive into that a little bit. You previously pointed to some OPEX, mainly SG&A, steadily rising, which we're seeing. Maybe on the gross margin level, things have been a little bit flattish quarter over quarter despite the EAC improvement. I was hoping you guys could provide some color on how to think about that progression in Q4 and to what degree we can think of that as a fair launching point in 2026. I mean, I can take a cut at it, and then Dave can jump in. At least for us, in terms of our path to our targeted margins, which we discussed in the low- to- mid-20s, it's now really clear what the drivers of that progression are. It's the two things that we've mentioned. It's this dynamic associated with our backlog margin and how that's improving over time as we burn down the low margin and replace with bookings that are at or above our targeted margins. Again, in Q3, the margin associated with the bookings that we brought in in the quarter were at or above our targeted margins. Dave, I think we would say very strong relative to the last several quarters. We feel very good about how that dynamic is playing out. In Q4, what I think you're seeing is those two things, that plus the operating leverage associated with our OPEX being sort of in the zip code of where we think it needs to be, all starting to play out. Hopefully, that gives a sense of the timing and the progression of how the backlog margin dynamic is starting to play out in conjunction with the operating leverage. That's really what's driving the Q4 expectations. Yeah. I would just echo what Bill said. When you look at EBITDA and the expectations that Bill outlined for EBITDA, it is a function largely of exactly those two things. We've made the progress on the OpEx spend, and you can see that in our financials, and you've seen that as we've gone through the year. At the same time, every quarter we are making more progress as we both finish off or get to the lower levels on some of the lower margin activities, and we are adding to our backlog at higher margins. That backlog margin is increasing, and we expect to see that start playing out. As I said earlier, it will play out over time, but we do expect to see benefit from both of those things in the fourth quarter to benefit the EBITDA. Okay. That's great. Thanks so much. I'll leave it there. Okay. Thanks, Conor. Your next question comes from the line of Noah Poponak with Goldman Sachs. Noah, please go ahead. Hey, good evening, everyone. Hey, good evening, Noah. Could you grow free cash flow full year 2026 versus 2025? Yeah. That's a good question. The way we're thinking about cash in 2026 is continuing to, as we think about in general, as we go forward, we're not providing any color or guidance around 2026. I think I would talk to the longer-term model that Bill had talked about in his remarks is we expect to get to a point where there's a kind of a recurring 50% of EBITDA cash flow, and we expect to continue as we go through time until we get to the right working capital level to reduce working capital. I think, as Bill talked about, when we get to at the end of next quarter, we'll have a little more color around FY 2026. Right now, we're just focused on getting through this year and completing strong and then working towards the model that we've talked about. Yeah. I think there's two pieces to coming up with the answer to that question. One is kind of our steady state free cash flow conversion that we think we can deliver. Dave spoke to that earlier, around 50%, and we feel good about how we're honing in to that part of the model. I think the other contributor is the cash that's still available to be freed up off of our balance sheet driving towards the working capital targets that Dave mentioned. We still see a really good opportunity on that front. It'll be a matter of how those two things play together in 2026. As I said earlier, I look forward to coming back in our next call and giving some commentary on how we think 2026 is going to shape up. Okay. Great. The framework is sort of directionally 50% of EBITDA, and then it sounds like multiple years still of improving working capital. That can be lumpy. We'll sort of just see how that layers on top. Yes, sir. I think you could look at the progression that we've made and the timing associated with that, and that can inform a view of what's left to go and the time associated with it. Okay. Excellent. In terms of the burning out of the backlog, the older legacy lower margin contracts, what's the timeframe in the future at which that is close to entirely gone from your revenue? Yeah. I mean, if I were to just think about the answer to that question from a math standpoint, I would think about our commentary on the backlog at the end of FY 2024 being lower than what we expect to see on a go-forward basis and the timing for that aggregate backlog to burn off and the number of quarters it would take for it to be replaced by the bookings that, since we made that comment, have been in line with what we expect to be our targeted margin profile associated with the EBITDA margin profile we've discussed of low- to- mid-20s. I think you can create an estimate for what that timeframe looks like based on our duration and the commentary at the end of FY 2024. Okay. That makes a lot of sense. I guess. As Dave said, it's a matter of several quarters where that will play out. The good news is we're seeing that progression happen. Okay. Great. Just last thing related, how do you define bringing new work into the backlog at a higher margin? Obviously, the simple definition is it has a higher margin, but over time, everything you bring into the backlog has an assumed margin, and then that can change over time based on cost and execution. I was just curious to hear you talk about how you're defining that, if it's just purely the initial price-cost assumptions or if it's also some version of conservatism or something else in the assumptions you make on the front end versus what's happened in the past. Yeah. When you think about how companies in our business, in the aerospace and defense kind of business, think about these things, you propose, you bid, you negotiate, you get awarded, and then you go through a startup process. In that startup process, you review the risk opportunity set around programs, and you establish, "This is what I'm going to start at in terms of a margin rate." We put a great deal of additional rigor around that process in the last 12 or 18 months since we started. It is reflective of that startup process, which is taking into account the risk and opportunities and how we're going to work through them. It is not, "Oh, we won this and we bid X rate." It is what we believe when we line up the program and go through that analysis and pressure test that as to what we use as the backlog margin. I understand. Okay. Thank you so much. Okay. Thank you. Your next question comes from the line of Jonathan Ho with William Blair. Jonathan, please go ahead. Hi. This is Garrett Berkham for Jonathan Ho. Thanks for taking my question. Just. Hey, Garrett. The book-to-bill ratio, they're dipping below one this quarter. Can you just help us understand why that is? It looks like it's been trending lower for two quarters in a row now. Maybe just some color on why that's happening. Yeah. I think the timing of bookings can move around a little bit. I do not get too hung up on it on a quarter-by-quarter basis. That is why we are really pointing at the LTM book-to-bill of 1.1, which we think is in a good zip code. Also, look at the quality of the bookings. We have talked about production versus development mix. Also, this quarter, the margin at which we brought those bookings in that we feel very good about. As I said, in Q4, we are off to a really good start with a lot of activity. Already had some new awards, some of which slipped out of Q3 into early Q4, which can also help inform a view of an adjusted book-to-bill for the quarter. We feel great about our position. We feel really good about our pipeline, the activity in Q4, and all in all, good about the bookings performance in Q3. Okay. Got it. That makes sense. Maybe just on the macro environment, is there anything notable to call out there? Particularly, are you seeing any disruption from the federal space from DOGE at all? Not so much a disruption associated with DOGE. I'm sure that our customers' customers are dealing with some dynamics associated with that. I think we're focused on the macros that early on sound like a growing overall defense budget. What we think is a constructive mix adjustment, specifically away from services and into acquiring technologies and capabilities. There are some systems and priorities that have been discussed and in executive orders like Golden Dome, where our technology is right at the center of some of the existing systems. We feel really good about the opportunity to participate there. All in all, as we step back and look at those dynamics, I'd say for me personally, I have a positive overall bias on those dynamics and the tailwinds that they present. Got it. Got it. Thank you. Again, if you would like to ask a question, press star followed by the number one on your telephone keypad. Your next question comes from the line of Pete Skibitski again from Alembic Global. Pete, please go ahead. Yeah. Thanks, guys. A question, guys, we've been asking everyone, but didn't ask you yet. Tariffs, just because of your commercial chip supply chain, have you seen, do you expect to see any impact from the tariffs? Yeah. Certainly no material impact in FY 2025. When we look at country exposure, we do not see any direct impact from tariffs on China or Mexico or Canada. There are a number of exclusions, to your point, that apply to a significant piece of our bill of materials. Like everybody else, we are monitoring the situation and paying attention to it. At this point, we feel like we feel good about where we sit relative to tariff exposure. Okay. That is both from a cost perspective, but also just from a sourcing perspective. You think sourcing will be okay? I think from a sourcing standpoint, yes. Also from a cost perspective, we have a number of different ways that we can address any potential cost impacts that may emerge associated with tariffs. Okay. 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. Thank you very much. I appreciate everybody joining the call this evening, and I look forward to our next update next quarter. Thank you very much. That concludes today's call. You may now disconnect.