Unusual Machines, Inc.

Greetings and welcome to Unusual Machines fourth quarter and fiscal year 2025 financial results conference call and webcast. At this time all participants are on a listen only mode and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. And please note, this conference is being recorded. I will now turn the conference over to your host, Christine Petraglia, Investor Relations for Unusual Machines. Mom, the floor is yours.

Thank you, operator. Good morning, everyone. With us today, our Unusual Machines CEO, Alan Evans, and CFO, Brian Hoff. During this call, management will make forward-looking statements, including statements that our expectations concerning the growth of our operations, our business and our revenues, the growth of the NDAA compliant drone market, our anticipated growth margins, our plans to scale manufacturing capacity, including the timing and success of new production lines for motors, batteries, cameras, and headsets our ability to achieve cash flow positive operations in the future, our workforce expansion plans, and future acquisitions we may make. The results expected by some or all of these forward-looking statements may not occur. Factors that affect our ability to achieve these results include the risks that enough of our customers receive orders under the drone dominance program, or other government programs and in turn place component orders with us as well as potential funding reductions, program delays or changes in procurement priorities. Our dependence on a limited number of enterprise customers and the risk of customer concentration, the risks that our inventory build up will become obsolete or that we cannot sell such inventory at reasonable margins. Our ability to manage our rapid growth, including integrating new employees and maintaining quality control. Risks relating to manufacturing bugs, delays, or failure to achieve anticipated production efficiencies. The availability of satisfactory labor pool to meet our planned growth potential, supply chain disruptions, or component shortages. The impact from tariffs, including inflation and increased costs of goods sold. The risk that our automated production equipment may not be operational on the anticipated timeline. Any risk that our auditors may require us to make changes to our financial statements and the risk factors contained in our Form 10-Q filed with the SEC on November 6, 2025. Prospective supplements filed with the SEC on September 2, 2025, July 15, 2025, and May 6, 2025. And in our Form 10-K, for the year ended December 31, 2025, which we anticipate filing in the coming days. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Any forward-looking statement made by us herein speaks only of the date on which it is made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law. And as a reminder, this call is being recorded, and a replay will be available on Unusual Machines' website at www.unusualmachines.com. Now let me hand the call over to our CEO, Alan Evans. Please go ahead, Alan.

Thank you, Christine. Good morning, everyone, and thank you very much for joining us this Monday. During this call, I will discuss our 2025 annual performance and also emphasize results specific to the fourth quarter. In the year 2025, we generated approximately 11.2 million in revenue. This is 101% year-over-year growth from 2024. Over the course of the year, we raised $157.8 million through equity financing and closed out the year with $103.3 million as part of our $157.4 million in total working capital. This is a massive, massive balance sheet increase from the $3.7 million we had in cash at the start of 2025. The 2025 results taken in aggregate don't clearly portray the dramatic changes that occurred throughout the year. The year was a turning point for our business as we underwent the transformation from an online retail store to become a drone components producer and enterprise sales business. This can clearly be seen in the quarterly percentage of our revenue that was attributed to our enterprise segment. It was 31% in quarter one, 48% in quarter two, 57% in quarter three, and 81% in quarter four. Hardware companies like ours that rapidly scale operations and often see revenues, we often see these revenues follow operation scaling by a quarter or so. Our growth shift started in the third quarter when we went from 19 employees to 38 employees across the quarter. At the same time, we also began to expand our footprint from the 6,900 square feet to the 62,500 square feet that we had at the end of 2025. The fourth quarter results, the financial results, are representative of the start of this growth process because the growth process started in the third quarter. and I would like to cover them in more detail. The fourth quarter was our seventh consecutive quarter with record revenues, and it is not even close. We generated approximately $4.9 million in the fourth quarter, which represents quarterly sequential growth of 133%. While growing, we were also able to sustain gross margins of approximately 36% which did exceed our internal expectations for the quarter. We continue to scale operations in the quarter, growing from 38 employees to 81 employees at the end of 2025, and we started production of our motors in some scale at our motor factory in November. We expect this operational growth from quarter four to be evident in the 10Q we file at the end of the first quarter of 2026. even now we are continuing to scale as quickly as we can to meet demand and are already over 140 total employees our ipo was only two years ago and we went public with the plan to transform into a leader for onshoring the production of drone components in a relatively short period of time we have managed to undergo that transformation and we are absolutely in the early phases of rapid growth. This success would not be possible without the work our entire team puts in. As we continue to grow, we now have a few older and many, many newer employees. Everyone is working hard and bringing just incredible energy and ideas to all of the challenges we face. I am confident that we can handle the growth because I am confident in everyone I work with. So I want to say thank you to everyone working at Unusual Machines. I will now hand this off to our CFO, Brian Hoff, to cover our financial results in detail. And once he finishes, I will go into much more detail on what this looks like going forward. With that, I am handing the call to our CFO, Brian Hoff.

Thank you, Alan. Thank you to everyone for joining our call this morning. I know you've heard it from Alan, but it's the absolute truth. 2025 was a transformational year for unusual machines. We started the year with the goal of bringing drone component manufacturing to the United States. And by the end of the year, not only have we accomplished this, but we did this with such dramatic pace and scale that's required for the industry. And this is starting to show in our financial results, as we will discuss. But a quick note. As we mentioned in our shareholder letter issued this morning, the numbers in our presentation are unaudited and subject to change. We expect our audits to be completed in the next few days. Revenue was 4.9 million for the fourth quarter, which is approximately 133% growth quarter over quarter. And fiscal year end 2025 revenue was 11.2 million, which was 101% year over year increase. This is the start of us realizing that operational scale and transformation that's driven by the shift from retail to enterprise customers, as Alan highlighted. And again, it's based on our enterprise mix starting around 30% in Q1 to over 80% in Q4 and really driven by our manufacturing coming online. And again, just the start. Gross margin has increased from 24% in the first quarter to 36% in the fourth quarter and 35% for the full fiscal year 2025. Our margins continually improve as our mix has also shifted from retail to enterprise. That being said, we do expect to see some margin fluctuation and decline in the future quarters based on certain product mixes as we continue to scale up manufacturing, invest in growth, add team members, and making our processes more efficient. Once our automated motor line is installed in the second half of this year, we expect to see operating efficiencies and the ability to increase our delivery of drone components to customers. Our operating expenses increased from $18.5 million for 2024 to $29 million for 2025, all of which are choices to enable us for this growth, and more importantly, for even more growth in the future, and this increase is in line with our expectations. The largest increase in there is non-cash stock compensation expense, which was $15.6 million during 2025. We also increased our headcount from 15 at the beginning of the year to 81 by the end of the year, expanded our systems, increased our investor relations outreach, and again, many other investments for enabling us for the future. We added additional facilities, which includes our motor factory, fulfillment center, headset factory, And I'd also just like to reference you guys to our GAAP Q4 net loss to our net non-GAAP operating loss in table two of our shareholder letter to provide more detail. In regards to other income and expense, we had an interest income of 0.8 million and combined realized and unrealized gains from, or sorry, for the year it was 1.8 million and combined realized and unrealized gains for short-term investments of approximately 4.1 during 2025. Shifting to our balance sheet, Our balance sheet is strong and is a reflection of our continued investment and growth and the momentum that we have heading into 2026. Our primary three items that we look at is cash, inventory, and our investment portfolio. We ended the year with $103 million in cash, and that included three different capital raises that netted approximately $157 million in cash. Our inventory, including prepaid inventory, is over $15 million at the end of the year, and we're continuing to make purchases to be in a position to help provide needs in the drone supply chain. As part of our strategic plan to develop strong and strategic partnerships within the industry, we made strategic investments in drone companies that expect will drive additional liquidity. These three assets combined with no debt is setting us up for additional success, success, growth, and scale for 2026. As Alan said, thank you to the entire UMAC team. Everybody's working very hard. Strong growth as we couldn't do without them. We look forward to making this a great place to work. Also, thank you to all of our shareholders and partners. Alan?

Thanks, Brian. 2026 is going to be a year of rapid growth for the U.S. drone ecosystem. Excuse me. We believe we are extremely well positioned as one of the supply chain leaders for components for small drones. As Brian said, we have the capital to execute and the responsibility to demonstrate to our customers and shareholders that we can manage rapid growth. I'm about to go into more detail, but want everyone to know that my following comments are forward-looking and they are in no way guaranteed. Let's start by talking about demand. In general, right now, we view the current drone marketplace as being supply constrained. We see demand outstripping supply this year and deep into 2027. This perception, this idea is the assumption that allows us to procure material, build capacity and otherwise invest in growth more aggressively than we traditionally would. For example, if we order extra material now, we see the constant increase in demand over the next 24 months as consuming any excess that we have and making it reasonably safe from a business perspective to be so aggressive that we could even overbuild in the short term. This supply and demand imbalance, and it's dramatic, is created by two factors. First, legislative and regulatory actions have removed foreign competition from the market and domestic capacity is nascent. Second, the recent success of drones in international conflicts like Ukraine has resulted in the Department of War driving demand for drones and a domestic supply chain capable of supporting the expected burst drone demand required in a potential wartime scenario. The legislation is walled off the garden and the Department of War is providing the influx of capital to quickly mature domestic solutions. There are several legislative actions that all layer in to enable domestic producers to succeed in the U.S. market while making it more difficult for competitors that are overseas to sell into the market. This has been true for the drone companies themselves for a few years with legislation like the American Securities Drone Act, but this has recently extended to components providers with legislation in 2025. There were some smaller examples of government action that highlight how quickly this market wall has erected. In early 2025, T-Motor, a major Chinese supplier, was added to the entities list and banned from selling in the US. And then across 2025, there were tariffs on imported goods that increased the relative cost of our foreign competitors' products relatively to our domestically produced goods. The most substantial government action was the FCC ban on new licenses for all foreign made drones. And drone parts. That went into effect in late December of 2025. The impact of this legislation on our business cannot be overstated. The US drone market for small drones is about $10 billion in revenue annually. That represents about somewhere between a $3 and $5 billion total addressable market for parts if the drone market stays flat. And it will all have to be made in the United States going forward or get a waiver from the FCC. This FCC action was unexpected. And it creates a huge marketplace vacuum in both the consumer and enterprise segments to go along with the demand we're seeing from the military segment of the industry. To repeat, we believe the FCC actions have created at least a $3 billion non-defense components marketplace that will require domestic solutions within the next three to five years. and massively expand the total addressable market we can go after. The second government push that is driving demand, still on that demand side, is the injection from the Department of War. The DOW has recently initiated several programs to buy different types of small drones, including short-range reconnaissance, which is SRR, purpose-built detritable system, PBAS, and most recently and most publicly, the Drone Dominance Program. The Drone Dominance Program is a very public example of how the Department of War is trying to drive scaling of the drone companies and the supply chain. They have communicated the entire procurement process publicly on their website. They plan on buying 90,000 low cost drones in 2026 and 250,000 drones in 2027. This program alone represents about 90 million component opportunity for us this year in 2026 and roughly a 250 million dollar component opportunity in 2027. While the environment is set and demand is there. It really doesn't matter unless we unusual machines are able to see and sell into that demand. As of right now, We have about $12 million in outstanding purchase orders that we are working to fulfill. About $9 million of those purchase orders are for programs that are not drone dominance. The first set of 11 winners for drone dominance were just announced on Friday, so I expect our sales team is probably reaching out and we would see additional orders from them hopefully soon. For the record, More than half of the announced winners of drone dominance are already customers of ours in some form or fashion. This early demand for our parts from the marketplace gives us a high level of confidence that we can capture a significant percentage of the total demand and total demand growth as long as we deliver quality parts on time for our customers. Given this overwhelming environment of demand, we have started to scale as fast as possible to provide as many products as we can. In very late December, you see some of that on our balance sheet, and in early January, we placed over $15 million worth of raw materials so that we could receive elements from our supply chain to build motors and other products. We have scaled from 81 employees at the end of 2025 to over 140 employees today. We have started a second and third shift at our motor factory, and we're currently producing about 15,000 motors a month, while that number is regularly increasing as we generate efficiencies. We've also started a second shift at our flexible production facility where we kit and do other things to help our customers more effectively manufacture their drones. In addition to scaling our current products, we're working on introducing new products to capture more of the total component market. Some people might call that wallet share. In January, we produced our first US-made Fat Shark headsets, and we are very quickly scaling to be able to manufacture 100 headsets per shift per day, and we expect to hit that run rate sometime in April. We are working on setting up battery pack production, which we expect to be online in the second half of 2026, as well as install a very high volume automated motor production line in the second half of 2026. That should get us to well over 100,000 motors a month. Finally, we anticipate manufacturing cameras in the United States by the end of 2026. Our explicit goal is to scale production so that we could meet the entire demand for every part that we sell from every company that would get orders in the second phase of drone dominance. And we expect that to occur in September of 2026. And we want to be ready. That second tranche requires drone companies to use domestic supply chains, or at least NDAA compliant supply chains, and represents a major opportunity for our parts to get designed into their products. This is not mandatory for delivery of drones in this first phase, but it is for the second. We want to be available to all those great companies to be a supplier and deliver on time even if every single one of them requires parts from us. We have enough money to do all of this. We finished 2025 with about $157 million in networking capital and over $100 million in cash. Our growth is not resource constrained, and we are doing a very good job of actively generating revenue as we scale. Our financial position is strong enough that we can consider potential acquisitions if the right opportunity presents itself without having to compromise our growth plans. We do view acquisitions as a meaningful way to go faster, and we would use the template that we used when we acquired Rotor Lab. We see the acquisition plus the build out in conjunction accelerated our motor production by six to 12 months and has allowed us to scale faster. To summarize, 2025 tells the tale of our transformation. The fourth quarter demonstrates tangible outcomes from scaling we started in the third quarter. We are well capitalized, continuing to grow, and we believe that there is overwhelming demand for components that we make for the next two years. Unusual change is at the forefront of the domestic components market, and the market is undergoing rapid growth. Our business is capitalized and extremely healthy. We are continuing to grow as fast as we possibly can, and I believe we will capture a significant portion of this rapidly expanding market. I am so confident that our team can meet this demand. I want to say thank you again to our entire staff and all of our shareholders and our great customers. And with that, I would like to open up the call to questions.

Thank you. Ladies and gentlemen, at this time, we will be conducting our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. And you may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question is coming from Austin Bolig with Needham and Company. Your line is live.

Hey guys, thanks for taking the question and congrats on the solid quarter. First question was just around kind of like the backlog number. So I think you guys said it's around 12 million. Is that the right way to think about total backlog?

Yeah, so my whole team is cringy, Austin. Thank you for the question because I don't like the word backlog. It implies we're not delivering on time. But that is the outstanding volume that we're working toward delivering to, and we're still hitting delivery schedules. So $12 million is what we have purchase orders for right now. And then we have forecasts further out from customers.

Gotcha. Gotcha. And then congrats on the high exposure to drone dominance, staunch one. Could you maybe just like walk through with like these six to five customers, like, how much content per drone you guys are working with? Like, are they buying the whole portfolio content? Is it primarily motors? Would just love to get a sense of kind of how you're exposed for this first launch.

Yeah. So very few customers across all of the entrants have placed full drone dominance orders yet. So that's being discussed this week now that they've found out that they've won. So for, Our blend could be anywhere from one part for a customer all the way through a large chunk of them. But even actively over the weekend, we were getting some of these customers asking about other parts we offer. So I don't know what the mix is. I trust Stacey and the whole revenue side of the house will do whatever we can to serve as much of their needs as possible.

And then just kind of last question, a sense of kind of like how we should thinking about the ramp. throughout the year, should we be modeling sequential revenue growth throughout 2026?

We're still scaling as quickly as we can.

What I would say is there could be hiccups. Supply chains could be tough. For instance, There's currently a challenge getting barometers and as demand for drone dominance, I think sucks up a lot of parts. We have to get further in front of it, but I would expect sequential growth over the course of the year with maybe some supply chain acquisition challenges if demand continues to outstrip supply. So, you know, the goal is sequential growth, our procurement teams in front of it, but You've got to be material complete to make a part, and if you're waiting on one component, there could be a delay that could cause revenues to slide one way or another.

Okay. Well, guys, thank you for taking my question, and congrats on the good results. Best of luck this year.

Thanks, Austin.

Thank you. Our next question is coming from Matthew Galinko with Maxim Group. Your line is live.

Hey, thanks for taking my questions, and congrats on the strong year. Touch on the investment needed for the automated motor production line, and do you expect it to be kind of tuned and yielding at its expectation this year, or is that kind of a 2027 event?

So the CapEx has already been made. That is already accounted for on our books. It's really, you know, we're targeting having it in-house. Right now, July, it's a little bit uncertain. But then at the same time, the cost that you'll see is the material components. So if you're going to run 100,000 motors a month, you've got to procure the material for that six months ahead of time. So you'll see inventories match the requirement for that probably two to three months out, and then it'll turn on slowly. We really expect to see it running, you know, at reasonable scale by quarter four. with you know if we're faster if we get it done in quarter three that'd be great and you'll see the the cost the added cost for it will be us scaling inventory but since we're already moving toward 20 to 30 000 motors a month you'll just see that carried as inventories and prepaid inventories probably at the end of q2 got it uh okay thanks and then

You mentioned outperforming your internal expectations for gross margin in the quarter. Can you maybe give us some thoughts on how that trends as you make the additional investments and expand into – I think you mentioned battery pack production sometime this year. So where does gross margin trend?

Sure, and I'll explain why just so everybody can be aware on how gross margins work. You scale operations. All right. You don't really start to see revenue till a quarter delayed. You don't really see the gross margin impact till even a quarter after that. In a lot of ways, gross margin, because the people doing the work are in gross margin, but it doesn't show up in the financials till the product is shipped. So, for instance, you know, as we had people and we're building motors in November, we shipped many fewer motors that we made in November versus that we would in January. And so when you start new processes and new people, you know, they're not as efficient as they become with training and expertise and new processes. So I would expect whenever we turn something on, like the motor factory, the biggest impact to gross margins would be a quarter delayed. So you'd expect those in quarter one and then recovery from that as efficiencies and processes and scale come in. so we thought we'd see more from really the rapid scaling more of a dip but the employees that came on were more productive and crushed it and learned and our team did a good job of of keeping the dip lower but i would still expect our worst gross margins as we go through this to be somewhere in the quarter one quarter two time frame as we've just brought on so many new people and created so many new processes that the natural impact to cogs will be in those quarters

Very helpful. Final question for me. Maybe if you could touch on what the competitive environment and components looks like today. You know, you've kind of been going at this for, you know, a few quarters now, and I'm curious if anybody is kind of following a similar playbook or, you know, starting to catch up in components. Thanks.

There's several other small companies that are private that are out there doing different types of parts. In addition, Some of our customers choose to do their own parts. So I would say for electronics, PCBs, there's a really great supply chain in the US. I'd say for everything else, there's nobody that is doing higher volumes than us. And again, because we think that this is a supply constrained market, it's just us growing as fast as we can without worrying about competitors because there's this much larger demand where we just collectively can't fulfill it all. So right now, everybody can go as fast as they can to secure market share question. And so we think there are a lot of other companies out there trying to do and enter some of these segments in the U.S. I do think that if you looked at who some of our competitors were last year, you'd look and say, like Luminaire on the retail side or GetFBB, A lot of them set up NDA compliant, but foreign supply chains in terms of and the FCC ruling was a really big surprise for that. So, you know, we've been very aggressive about onshoring production and still are.

And I think, you know, a lot of the categories right now are the largest producer. Appreciate it. Thanks. Thank you.

Our next question is coming from Jonathan Siegman with Stiefel. Your line is live.

Good morning, Alan and Brian. Thanks for taking my question. Great color on how supply-constrained the market is. I appreciate that. Just with your capacity being so valuable in this environment, can you just talk a little bit about how you allocate that your resources to customers? How do you choose winners in this dynamic marketplace? Thank you.

Jonathan, appreciate it. The first thing I would say is the other side of this question is a lot of people ask why we don't increase our prices. So I'd like to start to say that we're trying to build relationships in a pricing model that's sustained and we're not in this unique market. We try really hard not to pick winners. We try to work with as many people as possible. And that's where I'll use my statements about drone dominance as an example. We are building capacity to build components for every single winner of phase two. Will we be able to supply every single winner? Will they all want to buy our parts? Probably not, but I hope they do. But in that way, we'll talk to and work with the 30 potential companies When drone dominance only down select to 10, and then we'll have a capacity to supply 10, and we won't be forced to make companies that may not have won that program take components. So we think by building to match the end customer demand, we're in a better position to shift material streams from us to the customers based on how effectively they compete. And that's really what we're trying to do is meet the entire U.S. components demand so that none of our customers, so that we don't have a dependency and they don't have a dependency on any specific individual program.

Thank you. Good luck with the year.

Thank you.

Thank you. Our next question is coming from Barry Sein with Litchfield Hills Research. Your line is live.

Hey, good morning, folks. I want to ask about the B2B sales pipeline coming up for 2026 and a couple parts of the question with a lot of numbers. So how many B2B customers have you shipped to over the last year? How many are in that 12 million backlog? And then looking ahead, what does the process look like? I know Stacey was promoted to Chief Revenue Officer. What does her team look like? I assume, you know, with the drone dominance announcement, it's all hands on deck right now to get those orders. But if you give us a little visibility that it would help us looking out over the next year. Thank you.

Yeah, so I think the number of customers we've sold to depends on how far down the line you want to slice it. We've sold to hundreds of enterprise customers in small scale for R&D and some of that even through our retail channel. At large scale, it's constantly shifting with some of these programs, but we don't have single customer concentration. We still don't. I'm not positive where the exact blend is exactly today. And really where we see Stacy's team continuing to drive this, and what we see is really important is not new customer outreach, but more importantly, being sure all the customers we have are satisfied. I believe in the last year, our sales team has done a really good job of driving awareness to everybody and getting small numbers of parts and being designed in for most of the drone companies that people are aware of or that we think have any ability to scale and even some that are smaller. And now it's really relationship management and starting to look more past what they need today to what they need tomorrow. So, you know, we don't care if to service 200 customers. We think the market is going to consolidate some and maybe be down to 50 customers. And we want to be sure that those 50 customers have a great experience working with us and get what they need.

And maybe a little visibility on what does Stacey's team look like? How many folks are underneath her now? How many, you know, in sales? How many customer service? What does that team look like?

There's five or six people right now doing the combination of sales and customer service, really more relationship management. And then we're actively looking for more account managers. Nice thing is it doesn't need to be a huge team because we don't have to go door to door or anything. And they're doing a great job.

And if I could shift gears, I know it's no longer the focus, but on the retail part of the business. Are you still looking to grow that business? How important is it? I know you've added a new person in charge of that. I'm actually seeing Rotor Riot TV commercials now. What's the strategy for the retail business?

The strategy is to use it as a sales funnel and provide parts out there. So the goal is to keep it healthy. We don't expect significant growth there. We expect it to move in the marketplace. but it acts as an amazing sales funnel. So a lot of our customers will go and buy motors off of there for R and D, et cetera, knowing that they can buy them at scale when they go to production. And so from that perspective, we think it's a really important part of our sales process. It, it minimizes the need for people to go ship stuff all the time. And from that perspective, our hope is to, see it continue where it's at with some growth and some energy, but right now it's not the priority of our business.

All right. Those are my questions. Thank you, Alan.

Thanks, Barry.

Thank you. Our next question is coming from Josh Sullivan with Jones Trading. Your line is live.

Hey, good morning. Morning. Just with...

But with the start of Operation Epic Fury, Alan, what have been your observations just relating to unusual machines and future warfare and how you're positioned? You know, I got mostly larger systems at this point, but, you know, if you look at lessons learned so far, curious what your observations are.

Yeah, so I'll start and say, hey, war sucks, right? And what we're seeing is through conflict, people have developed new technologies, right? And in this case, you know, I think Ukraine is still the largest driver of what has caused people to look at the drone component supplies. I would say when you look at Epicury, when you look at everything else, when you look at drone dominance, whether it's, you know, on the positive or negative side, I think the current Department of War realizes not just that drones are going to matter but counter drone is going to matter and that we have to understand both sides of it and so i think they'll procure a whole bunch of drones to test counter drone systems to understand what they may use from our department of war may understand what adversaries may use against us and i think you're just seeing the solidification of this next generation or next paradigm of how conflicts are going to be operated you know, with robots and particularly aerial robots.

And then I guess just a question on the funding side or your customer funding side, you know, what are customers seeing on contract adjudications? You know, is the environment picked up? Is funding getting out to them?

I don't track too many of them too hard. I mean, most of them or a lot of them are large enough that they make money and they pay their bills on time. So I haven't had people say, hey, look, we can't pay for components because we're waiting on payment, which we'd be fine with. So in that case, I assume that they're getting paid. But we don't dive too deep into it past that.

And then in the letter for 25, you painted a picture of two halves for 25. How would you characterize 26, particularly as you scale here to capture this big demand environment?

So I'm going to use an analogy because I like it, and this is a little bit more me, but 25 was fuel in the rocket. And then you saw in early, like in mid-25, we lit the fuse. And like any rocket taken off, it starts really slow. You know, it just starts to lift off the pad. And I think 26 is going to look like the next part of the launch.

Great. Perfect. Thank you for your time. Thanks, Josh. Thank you.

As we have no further questions in the queue at this time, I'd like to hand the call back over to Mr. Evans for any closing remarks.

Thank you, everybody. We really appreciate your time this morning. Please reach out if you have additional questions. And again, I'd like to say thank you to the entire team for making all this possible.

I hope you guys have a great morning. Thank you.

Ladies and gentlemen, this does conclude today's conference and you may disconnect your lines at this time. We thank you for your participation.