Red Cat (RCAT) 18 Mar 222022 Q3 Earnings call transcript

Company Profile

Participants

Scott Gordon	Investor Relations
Jeff Thompson	Chief Executive Officer
Joseph Hernon	Chief Financial Officer
Ashok Kumar	ThinkEquity
Priyanka Mahajan	ThinkEquity
Kevin Dede	H.C. Wainwright
Scott Michael	Private Investor

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to the Red Cat Holdings Fiscal Third Quarter 2022 Financial Results and Corporate Update Conference Call. [Operator Instructions] Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately 1 hour after the end of the call through June 17, 2022. I would now like to turn the call over to Mr. Core company’s of Relations President Gordon, IR Investor the firm. Scott ahead, sir. go Please

Scott Gordon

Thank thank quarter everyone us afternoon, call. you, Good Shabby. and and update Red Holdings’ results for Cat you fiscal financial third XXXX corporate conference the joining for

Red today are Holdings of from Executive Hernon, Chief Jeff and Cat Holdings Joining Joseph Chief Financial Officer Cat us Thompson, Red Officer.

be for statements that particularly. Cat’s expectations future During or including this address statements call, making forward-looking management results performance will operational Red

factors that materially other cause statements actual differ and Forward-looking involve to may from results risks statements. those

the today, as the or these accurate more information call. Officer. obligation recently now contents The ahead. please XXXX. For to only Form Red law, any required as disclaims pleasure this is risk It information the call, cautionary of factors this reflect reports of particularly Cat Chief Thompson, please release any periodic in about XX-K, time-sensitive Jeff update over most statements Jeff, March risks, Cat’s in press information refer XX-Q Red turn that go after to and accompanies this Cat’s to XX, it. revise Red Form my that occur contains to on publicly by described to that filed call is Except Executive or circumstances events call,

Jeff Thompson

Thanks, Scott. Thanks for joining our third call. quarter XXXX earnings

revenues annual to next all scale expect hard timelines at Rotor to grow over Riot, Shark, and worked we the their Skypersonic inspection be a Fat would Drones. three Skypersonic sold rampage, at I role different the employees thank Teal They to the which grow different grow First, have is all I like in businesses a to and has and to contributions path get on quarters build continues and again, four get hopefully good or Riot Rotor key Shark their year, team. audience Fat an playing space. this and out. to event new coming. products will work infrastructure

sure am be there activity I from And lot of Drones. this Teal about around a to is weeks. talk let’s Next, going recent the

with is housekeeping. number start me get The let question we one chain. So, some supply

just start under which X,XXX demand drones have about SRR to over would revenue. want by under week. into We before to Golden we this build Ukraine we $XX talking that X X,XXX million equate I for Tranche you contract dive Eagles, chipsets in to received just award

slammed Just to with Chinese of many we inbound looking from Ukraine. been deliver countries last have for not inquiries Thursday, made by to drones thousands the

working being not of sold. continued these near as and weekends, report night, have exists the through Ukraine first for have respond something vacuum, to We last just week. expect we This built drone Teal hours Teal is to soon but today in hope large Chinese proposals they and reasons and because that and police in style the sources, being in we giant every are now demand already From from development just all demand started is on drones. is basically all been drones hour across the looking category, not it obvious segments various this everything for like all creating to for manufacturer in every or responders, that Ukraine, to future a

the for potential supply police, regardless at the all sold outstrip months. drones demand to the or this alternatives XX So sold next of least Ukraine massive to the are to expect spike from we non-Chinese

our aggressively scale are possible as of to production, We this. working because

the two which prototype Tranche This to X Teal Drones Range one move who Tranche contract is was for million. Teal contract. was awarded X. Reconnaissance Let’s Small was SRR, Teal award contract contract. on for SRR of Drones received a $X.X

X confusion contracts. prototypes. There been came award about SRR some competing contracts. of had for X was some we just X has similar Teal about questions of for X of tranche in even Tranche in that, for million. was a awarded two production X because ago, ago. Tranche it. COVID. get program. be get years I And contracts has to This it happened on contract. February, those X let’s the $XXX will contract, Tranche was years X. lot out prototype X though awarded So details one Tranche X what has the was There production a mostly Tranche very because it Each production one

this. about we are So, pretty happy

I contract. anyway, very there bunch, over am at the And that, are to world statistics, to two is And This is looking XX:XX on But going chosen. we going a the with proud sure will exciting We Army. going of news. a am this relationship right questions. have I forward least a with is pretty one to to be now. I with your it the production for Hernan. to But think lot be I’m in those hand Joseph be a long-term And chance

Joseph Hernon

call January XXXX. third flat XXXX. million, for down review results the provide I XX% to today. quarter the second quarter the which and totaled XX, quarter financial fiscal the on Jeff joining a ended during approximately to of which our previous with now our quarter, quarter, Thanks, fiscal everyone compared were third and the Revenues of for will $X almost

revenues launch have And which new product just period, we by During Shark, time that Fat closed acquisition. we the benefited from unusually Shark drove at Fat a high. the XXXX

contributions traction increased compared January becomes across our visible in our and and we for pervasive X more year-to-date months revenue in of more ended more our the drone our XXXX growth our XX% is lives. measure how technology a think much months all as subsidiaries the reflecting year-to-date, acquired gaining to XXXX, better subsidiaries, revenues I However, of all of are X XX, fiscal from ended

out of Teal Jeff that upon, of multitude and the During the the much emerging. building quarter, opportunities Teal our focus, organization as preparing was for revenue on are touched

size output we capabilities increase Teal. acquired well as to is workforce, manufacturing we During house the its doubled Teal size both the the facilities, its doubled quarter, of as since in to which

year. this durable Operating opportunities. strategy to quarter strongly million last to adversely This significant both larger of was that doubling in expenses end short-term million since to revenues, impacted the quarter totaled of closing can operating advantage the effective we them Teal $X.X it sales Teal acquired be third investments take the at and much better our an Skypersonic of expenses back long-term compared believe as of of in and as attributed positions in $X.X the that While and us the August. represents third more the acquisitions well made we

upon, gain some as continued own our to During impressive starting out this sales team, Jeff and already also to traction. touched quarter, internal marketing build past which we is,

the X for in $X.X million loss net respectively. months million Our totaled January the XX X $X.X and ended fiscal quarter and

we what making Despite and as commercial a remain noted, both million Golden in Eagle. this capital advantage we have spending, the in As both and Jeff take Teal lot securities. marketable its the a position. facilities and see for investments to I of with been of increased financial almost in its in have significant very $XX strong opportunities closed cash we quarter people We

excluding the charge, million. As is I $X.X most last less a was stock-based recent which comp, mentioned, than just non-cash quarter, our and

cash to the So, the quickly initiatives. that very in the on execute are basic our see burn, in position a to million growth $X.X you most compare recent if we you million can bank great the in $XX

strong fiscal about which now to outlook the finishing excited are X. on I in begins for XXXX, call the XXXX turn May We and over operator for our will really questions.

Operator

[Operator Ashok first Kumar go ahead. Instructions] question comes Our from Please with ThinkEquity.

Ashok Kumar

afternoon. Thank you. Hi, good

about And for and the margins revenue question, contributions continue as operational the Fat timeframe terms improvements you as then the your to highlight you And Thank normalized the the the please not timeframe? January burn improvements award Teal applies sustain operational do during of contract, what operational contribution? in levels see would see on what forward, question gross congratulations production Do to an and and And see last at TX I chain Jeff, TX question it supply Just you – could gross to as hit quarter, and margins current you. Shark also a the you the production, quarter. you and think at highlight would is timeline that $X well? – program production same for looking the what million be then apply levels? could prototype cash

Jeff Thompson

Sure. saying them. were there, as let to but was best do as questions of down a I There my you me them lot trying is to write

out a So iPhone quarter, Q the iPhone. iPhones frank, August a to had very the mostly because cycle. last September. happens, into when the it’s similar when product end new in very the And at likes new lot is be in we to coming buy product the one less to going No revenue cycle in Shark are of one that they Fat

phase. expect up the to back revenue that we in come So,

about to basically interesting only it that weeks there being X And in be contribution, think what’s in was even that. Teal for available the For not selected we November. because down ourselves in them significant knew it is was I is

So, and how – reconfirmed it December. in once – started we as we looking to was then at scale we I think were

selected. – are never it until knew that was down we this we got were So, never we glad were We out week. able it release to

to going knew start have So, we scaling. that we to were

they lot seeing gross think pretty all cycle. production couple the we we of capable backup are extra on the get margins, are – we things are capabilities to demand pricing as here little fulfill burn did we Ukraine a in – bit. that as we supply – scale. the because the of are XX% the the drones our to let mostly that situation, their meeting happy So, get a we almost line to points the with a getting – work to I we lot be. ramp we very of the to that, go Drone as able me can will are that And production going there cash Teal, did mean, and at with better the can But we on some other be chain. with no the start Teal to margins to have are now where And fulfill. Teal margins about And companies We a lucky of

a burn was not to coming, for million Our Teal launch, XX has company but about been acquired just because has with the months. got $X.X last the that’s product about yet. of burn we fully launched a Most loaded we before

are want quarters they that, – And on go you Joe in if much now many, will in many to it don’t producing we we orders see coming burn to anything come drones, the as once add I have you will see and level will money know that think So, longer, Joseph. mentioned, of don’t I start down. these bank.

Joseph Hernon

But of full quarter a a and the the for associated Yes. additional that, all would not full overhead Teal quarter the employees going yes, of don’t Teal. with cost of to say facilities I expenses is have lot. a incremental be full we doubling with the all for hired quarter additional a

of manufacturing but see be, this it’s reflects we screamer in might thought a time amazing little gave it the the morning any a a because on to finally back, it watch and panelists, bit quarter times and of and you the And opportunities, fixed it. lot mainstream. that commensurate and just drones higher, largely So, makes of capacity becoming whoever or comes the drones. it’s the a couple or we of conversations, a little see And with a whether increase that CEO you’ll costs in across mentioning hear business CNBC a bit a overhead that step hurdle it double is we

So through I going margin for margin have impact. our think capability increase. increase some made the certainly, But Teal. thoughtful short-term increase over spending just in a that and it’s we And to our might margin dollars very additional long-term, our

Ashok Kumar

clarify, and right. mentioned Alright. nothing? all to Joe, to you’d the Jeff TX, odds winning Well, going are that just Or of be is the or XX-XX,

outcome So there, just was wondering, could I the clarify you please?

Jeff Thompson

Yes.

go have by the experience previous our So all Tranche is from to X. – we

the of and – Tranche there production one didn’t have – prototypes yet. So five awards has award X for was production then Teal

hit, no is SRR COVID going people of come award million, got and went years production pretty to $XXX they they And that million significant. the signed over X it but program thought never the was another to And out a – $XXX be be was it contract. X Tranche for confused that And a did production that, to we ago. a large frank, because that because lot didn’t one once February until the company deal So program. get before

the So Tranche X, we would type award. in expect numbers of production same be the to

So put Tranche two that there is companies were into X.

being the have drone facilities right made have the we think chance we a So here that in good pretty now U.S. one we premier world-class of

relatively until good every put in a the XX award. the Tranche everyone’s news did have November for environment we and demonstration time rucksack get think frame to Tranche program government great drones accelerated September their has is we chance. award They X X. they entities, so The And and X SRRs not a on to didn’t And a X frame hear did December on with for – hands, X to We I’m the going within rucksack, time weeks. for this anything in to it’s put soldier. everybody’s drone whether into Tranche every put got desire

think I never contract on can’t too. put I frame But time a see I’ll you’ll contract, So a this accelerate. a award, government – put production

Ashok Kumar

there? Or as domestic be translate your defense would able with into are of to the NATO success well? options any members given chain, you also, the that And wondering, supply was what I the

Jeff Thompson

Yes.

been Geoff broke in And all they war were their There the right before a with activity these a lot countries the team, guys, NATO NATO our team and job. great war of stay the his with countries. meeting did actually is They So the once have doing out. Hitchcock break over extended out.

up right talking folks to to countries we’re – signed that filling from buy to want get meetings. get the to contracts proposals drones Some And we’ve to – those now are drones. to Ukraine weekend these for that all our of that been

Ukraine wants every away. drones in with and dealing We’re that almost right region country

the We’re dealing U.S. with

selling us So drones. government, it’s for pressure go to pretty fast high be least at situation a for these

and on scale chips how have this can new through of away while we to drones double comes almost quadruple possible. down We’re But our to worth production, our if get it’s we triple always had meetings It literally meet chipset. just X,XXX we additional demand. right ramp to

Ashok Kumar

Alright. thank very Again, congratulations. you much and

Jeff Thompson

Thank you.

Operator

from question with Priyanka next Please Mahajan ThinkEquity. go The comes ahead.

Priyanka Mahajan

to to Skypersonic is time its is way from How collaboration top Mahajan on going? in short Red medium ThinkEquity. Priyanka NASA impact frame? there line And quantify That’s and a Cat’s the

Jeff Thompson

Yes.

is news the work on So simulation. the good Mars they just started

we’re that, team, little any their they are not supplying inspections of We ramping them simulation has inspections the that behind infrastructure Teal and supplied with for up the other with doing Italy rovers piloting all them only Skypersonic. drone well in Mars Skypersonic rover the think also from starting for the now they some in doing but capabilities right are a the systems software is are that a are from to piloting, but And We also that. remote drones but progress, aerial is for for things them, for that build. the bit we’ve remote Skypersonic almost maturity, earmarked suited nicely. There $XXX billion and of

XX spending be – they fixed. be things be of but to be positioned can able it they well all months, bridges, for So sewers, X infrastructure before capture the they to are won’t for some to need to are that the inspected

Priyanka Mahajan

Great. you. Thank

Operator

Please [Operator comes Instructions] with ahead. H.C. Kevin Our Wainwright. next Dede question from go

Kevin Dede

call. on me having for thanks the Joe, Jeff, Hi,

Jeff Thompson

us. joining for Thank

Kevin Dede

the flattish? give you aspect So in go just sort you from sort yes, sort Joe, it. – I Could of the on of kind sequential of you at that sorry, yes, of of October. dig brushed Then ahead. comparison I’ll guess another over

Joseph Hernon

Yes.

Teal. Kevin. So of start had for let have wanted but on long-term – amount with sense space me doubled made we basically better, more We it could to the expanding. Teal been we decided focus we that this,

off. took at We we to expense say our that want So sales. our our made wanted capacity don’t decision manufacturing ramp – of the we we to took I thoughtful short-term up eye a

life most a had course, a point. is, sense, popular kind breakeven of getting Shark Fat the but cycle. isn’t mean, they there, unfortunately, reached with this lot at the to technology, products company caught really acquired are downside noted, out of Skypersonic of going best we better generating their on we’re Jeff And of come actually, I in revenue Rotor but since Riot this is its almost quarter. quarter and As

look us. really a at for as surprise for and attention, We it’s was capturing us. marketing subsidiary but visibility really the good Rotor real a Riot don’t market’s So that platform

that’s quarter. this So compared happened quarter kind what last to of

Kevin Dede

Okay.

the step foot of sort of back question walk those us of you’re could a of So I XX,XXX Jeff, sort sort balance just markets? and addressing how and you strategic through consumer is a guess sort enterprise/military. focus a between maybe take

Jeff Thompson

Yes, absolutely.

So two us. announced as actually consumer we’ve be those defense is most we into company different ramping the we’ve the up actually for One previously, – commercial is and our the enterprise other broke to departments. division, seems dramatically now

that some then have got They great. They you But the and Shark to have has Rotor Rotor as for you doing growing. drone asset us great all products. to just been it’s consumer Rotor on mentioned, doing. things They a breakeven, their product. because even great have side, been are to So any people sponsor they launch Riot. just Fat Riot And Joseph new launch Riot have at episodes go

is Our launch drone biggest Chinese they episodes to their and Riot competitor many, sponsored Rotor in on many the product. DJI, market

on are exciting the as will pilots you cycle, with company really it’s into because as which leader And the the stuff in using the cycle in mentioned, power this space of working end goggles. industry commercial coming. very about FPV. last all think – Drone product those the early we So, adopters at It’s TV, valuable its Fat Fat drone hearing marketing goggle which as if operators. it’s Shark product a the drone industry, we soon Joseph in anyone typically saw League Shark of are Racing are be brand-new recently going their – some is for the to more right

the on side. and are two consumer So, kind those together that’s of – companies grouped

Skypersonic really space. inspection And focused On the we the Teal. and Skypersonic have is on commercial and enterprise side,

Leonardo, some work contractor in defense there. done preliminary We Italy. with great trials have actually the We

business sexy million be difficult word, build that sexy through. very start to went seeing we is contracts or hoping to expertise sewer a We bill. are there have they need over their inspect in an X but is in our focus expecting infrastructure good are miles difference some contribute and And which in start a actually but making are infrastructure fixed big very the that a Qs will to the sewers, soon, not really and of that’s that

entire one kind only industry. space, that’s inspection and that side solving where that commercial a use actually side real and for they So, drone. the Chinese us of competitor Skypersonic is is for in There and the the solving other

even Motors have So, in do people Chinese drones their factories. like not General on past, they made with we use who worked want the in to

So again, important made And DoD. lot. drones, be which have or military even in USA something then we if are very not continues investing obviously, to that’s a it’s Teal we

you can the – have all sheet, our that We chipsets balance bought. we see on

are poised are We like go. crazy. is to grow now plant we to basically ready The

are we We we how have got building simultaneously plan we have it and next right shift, construction, in add room. second, a line the great thinking of to do because now production start a third do place, we we accelerate another do

now, We right is have some quite time. has been for which focus – our –

We to per from able we are a are drones keeping our our focus, put on to a our it. thousands now thousands heads where of that’s get be and down doing drones got and and We of to job is everyone capability out month, manufacturing great getting to month.

Kevin Dede

Reconnaissance signed Is you sealed, in Tranche Range So, there. are X, Short done? X granted and Tranche you regarding the have

Jeff Thompson

We drone bird. years a the which over a no is few Actually, no X, going first million basically – bird, it Teal making awarded Tranche $X.X Yes. brand-new to was ago. from was prototype, for

and one contract there That’s Tranche original production the there X And all and typically was was So, X Tranche But gone, prototypes production signed, and again, awarded, sealed award. to awarded. five Blue competitor UAS that was to got was one X is the folks going then – delivered only Tranche and be that that deal. is basically prototype higher. yes, the

Kevin Dede

Right.

that on, are seeing vis-à-vis Can the I you military guess demand a insight of international Okay. share events you little late?

Jeff Thompson

that getting almost been from that the resulted we our mean from visited. into inquiries in team. our three-week – we have I tour dev phone direct We biz Yes. countries NATO calls

have call of my have state from people – find We on to had LinkedIn been I different departments me ex-ambassadors. number

some kind wants in but We have help had or use to sometimes three no is not four different just everyone demand same over is country, from of overwhelming all inquiries Chinese over from to the almost Ukraine. countries, that XX drones realizing – one the inbound that

they be people I could happened your Chinese first, think consumer because found that from what then they China thought at could drones was, these let the known. use manufacturer. be it known out And position

So, stopped consumer using the drones. everyone Chinese just

demand that drones – So, be could immediately. and to we have demand thousands need thousands heard be the built of

Kevin Dede

through that And have is your met sort that you X development? of Tranche to the spec

Jeff Thompson

Yes.

is by for So we But demonstrated Tranche actually Eagle the bird X. September the X Golden the the it’s XXth – it’s DoD. on that accepted

yes, – but accepted UAS X.X credentials UAS were Blue UAS also. we make news, were didn’t are – accepted We were and Blue in – X.X, as we Blue the we it had also

process lot to will of buy to NATO their So, they run their go to not our approval a drones. our own just and the accept approval DoD countries through have

Kevin Dede

Okay.

So, a revenue of you question timing Can rec. to little just sort the – spoke is bit? big you that can speak and

Jeff Thompson

announce think have to I we I – don’t mean yet. that’s anything

giving birds these get As POs, are not some we soon away. signed as we

as we are as that of – soon are can POs, them. about contracts are talking the them all material And have signed. We ones we get if every we selling almost ones

the So, DoD year. throughout probably that The is will you stuff be steady hearing about soon.

huge going XX we to every not the next is But going months pretty will can there. think for Teal. it’s So, make and I that forward. – sold once be be much the a It’s spike demand – drone over

Kevin Dede

Thanks Jeff. Appreciate insight. the

Jeff Thompson

Kevin. joining for Thanks call. Thanks the

Operator

investor. private go a Michael, Scott ahead. from Please comes question next The

Scott Michael

for to a product? be? the that a a lead for works. accepted development. third And that X, I purposes. for system marketing Thank clarity X, so, the when for been demonstration to is just question we developed would have there I that taking tranche? Tranche if we trying Are within quick am us for how call. that’s know of understand contract A Tranche does my you tranche And or

Jeff Thompson

Yes.

we and So, that X awarded actually, have – and prototype deal. drone were Tranche demonstrate five for deals was to go X plus ago you and and your one production years were

So, going there only three it of to almost two is September people was in awarded people is XX – reconnaissance are tranches. contracts to awards. at after that’s kind and X, XXth, is their last that’s prototype There reach. prototype September, production drone. be demonstrating how Tranche There and drone. They small were

one us it’s player. So, and other

for we a contract, we Now, competing that just million awarded. first the the best to country. we $XXX the which was one the tranche that’s production year. now think in And that are X, like Tranche manufacturing contract, looking that Tranche is facility was of one – have X’s contract in, in million to already are we compete $XX

Tranche is production get all In to are capability sorts different competing new drone more the for original things capable want prototypes So, do the X. features, they now. things X Tranche meantime, be the for the there all contracts this new and wants, actually X of right we of. milestones that to the that than SRR the drone prototype Tranche to It has from

So, you the the which is kind biggest these Tranche throughout year, X gets the the every that the to tranches now the are the hit us as where army. award we in – award, rucksack drone three for probably of of milestones

Scott Michael

And there timeframe the presentation? is of? an there Tranche a are production amount we for aware Is Tranche for the X X that

Jeff Thompson

don’t those were it, They everybody have program. it’s know not when X, X $XXX was But the million, in the have do has accurate. is at industry by came is dollars presentation know we behind numbers. million X know the details. actually knowing yet. the solely entire Tranche They we us about $XXX real it. don’t rumors of didn’t the Tranche number number announced a though the some what X we actually out some is do win didn’t We go program real It pleased We for a Tranche that Tranche We even is. Even contract. that not if let awe.

least $XXX us be from expect, We have just X. production expect we idea be at larger, guessing that’s will that million, Tranche not at but happen no least in X to we but and saw million if Tranche it we what contract $XXX

Scott Michael

very you appreciate I much. Thank it.

Jeff Thompson

for joining us. you. Thank Thanks

Operator

Ashok Next Kumar ThinkEquity. follow-up question is from a with go Please ahead.

Ashok Kumar

Thank you.

And question, and X,XXX the a to the question, a for Joe. with this clarify chips, are To source indicated these had the month potential bespoke clarify, related functionality you follow-up Jeff at current what off-the-shelf a facility. had same double chip you To a have indicated that Just and you capacity does of have you and capacity provide? side, chips. product on solid production good they

Jeff Thompson

Yes.

So the chipset bit little – Golden under – X,XXX a we have to are almost just on the Eagles. right we chipsets now, X,XXX produce

adjust. then And pretty that’s for some are waiting next are to over us – these of to stock to chipsets going But start out if really we have to two So, good things happening have figure now. for go of week with to weeks the contracts, get are and that another to the we in order or ahead these for we start are numbers. right we if we get some

Ashok Kumar

So, Are they… specific? products? Are catalog they are these

Jeff Thompson

is go items There know – Eagle. don’t Golden exactly well, go XXX I main Qualcomm. that into is many the our chip there there – chips comes how I into is it, mean – from that is but

thermal. I really that one wouldn’t Golden sure is Flora that ahead mean a I do It’s – just we want of The the we on other consumer have Eagle capability not that are to other getting the concern, reasons it to camera. say so we of we inquiries make the just item are much its get we is drone.

everyone they are – which Eagles over do Teal doing. responders first But now specifically would Ukraine, the really to which – thermal love Golden right have can and thermal, what we that. So, to actually mean of thousands love I they help in with police

Ashok Kumar

So, or? are TSMC these Qualcomm fab through all that

Jeff Thompson

piece don’t of and to I with of He don’t have equipment. George – or detail you us. we Matus. the give exact could had misspeak wrong quote I every Evans want the Dr. that on

Ashok Kumar

one And terms for being clarify for TX timeline process, program two start that. of just the was or timeline from is of to that the the last of a want to question X-year in finalists, this. I

Jeff Thompson

The I well, said, the put the they don’t like timeframe, – website. it on

have It Here for have there the known is Tranche till well the awarded you $XXX February It don’t million process and tranche and was tranche get mostly through now is what September Tranche Tranche ago. X Tranche then related. go demonstration X, COVID X, begins years contract The tell from XXth. next delays production that I X. was the significant didn’t award this each they here it mean was That delay. here is received was anymore of you – of And we when X we is awarded. a was that see was the year, They seen. COVID and

to in the we So, be we accelerate talked drones. also that COVID start for just up environment middle gone existing of expect fact the getting anymore. this of to seems things not process to Everyone’s And because have budget the is to has accelerating.

drones. accelerating is their everyone request for So,

as So, just we can. trying to are as we quickly scale

Ashok Kumar

so then thank best. the it. on Again, you Got right, all parallel, program, And very continues in your right? that much cloud and

Jeff Thompson

Cloud software program? development

Ashok Kumar

development? software cloud The Yes.

Jeff Thompson

Absolutely. Yes.

Ashok Kumar

Thank Okay. you.

Operator

closing the I will concludes remarks. of the This call. return the to now for Thompson Mr. call Jeff session question-and-answer

Jeff Thompson

glad works. Thanks, how of and questions. confusion folks. there the am out on lot There between Thanks lot different hanging of out for is I it a call. a this tranches got we

believe right working but our made not us, to to in really be that’s drone right scale every sold. now that now just hard are U.S. We production. We to is going the just

on just we ramping, production. focusing So, are ramping ramping, and

and support, So, we thank you stay your you tuned. for

be You hearing Thanks. soon. are us sure to from

Operator

taking today to for I and ongoing everyone join to the for time your support. like thank the call would

disconnect. You may now

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