Greetings and welcome to the Frequency Electronics Year-End Fiscal 2024 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. Any statements made by the company during this conference call regarding the future constitute forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements inherently involve uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences are included in the company's press releases and are further detailed in the company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the company undertakes no obligation to update these statements for revisions or changes after the date of this conference call. It is now my pleasure to introduce your host, Thomas McClelland, President and Chief Executive Officer.

Good afternoon, everyone. We have a very positive story to tell regarding the fiscal year that ended April 30th. Revenues have grown consistently throughout the year and we expect that to continue in the near term going forward. The backlog of $78 million is a historic high for the company and we anticipate the backlog will remain strong based on a very healthy new business outlook. The company is reporting an operating profit for the year of $5 million with the operating loss in the third quarter being followed by a profitable fourth quarter. We anticipate continued long-term growth in our primary end markets of space, navigation, secure communication and timing. Our proven heritage technical expertise in these disciplines allows us to continue to win new business while maintaining healthy growth margins. This puts us on a very solid footing going forward and gives us some breathing room to develop new technologies and products in these markets as they evolve over the next decade. As we've discussed in the past, there is a growing concern with the vulnerability of satellite assets, and thus a move to lower cost, easily replaceable satellite hardware. The company continues to respond to new business opportunities in this arena. In some cases, these programs involve higher risk and potentially lower gross margins, but are essential for the long-term strength of the company. Our very healthy backlog of traditional satellite programs incorporating our legacy technologies allows us to participate in these more risky programs while maintaining growth and profitability overall. I would like to add a few words about our other press release today. As you have hopefully seen, today, the Board of Directors authorized a $1 per share special dividend and I encourage you to read that press release for the details regarding the record…

Thank you, Tom, and Good afternoon. Before we jump into the details of the company's results for the fiscal year ended April 30th, ‘24, I would like to remind everyone that as mentioned on previous calls, there will be times the company's results will fluctuate quarter-over-quarter and that a single quarter is not indicative of future results. As an example, sometimes the effect of changes taken in one quarter can reverse in another quarter as engineering problems are solved and revenue and profitability flow through. For an accurate view of the company's performance, it's important to review the entire year and other significant items. For the fiscal year ended April 30, 2024, consolidated revenue was $55.3 million compared to $40.7 million for the same period of the prior fiscal year. The components of revenue are as follows. Revenue from commercial and US Government satellite programs was approximately $23.2 million or 42% compared to $17.9 million or 44% in the same period of the prior fiscal year. Revenues on satellite payload contracts are recognized primarily under the percentage of completion method and are recorded only in the FEI New York segment. Revenue from non-space US Government and DOD customers, which are recorded in both the FEI New York and FEI Zyfer segments, were $29 million compared to $20.3 million in the same period of the prior fiscal year and accounted for approximately 52% of consolidated revenue compared to 50% for the prior fiscal year. Other commercial industrial revenue was $3.1 million and $2.6 million for the fiscal years ended April 30, ‘24 and ‘23 respectively. The significant increase in revenue for the period was primarily related to increase in US Government orders. For the fiscal year ended April 30, 2024, gross margin and gross margin rate as compared to the same…

Okay. Thank you Steve. And we're now prepared to take questions.

[Operator Instructions] Your first question is coming from Brett Reiss from Janney Montgomery Scott. Your line is live.

Gentlemen, can you hear me because I'm calling from home?

Yes, we can hear you.

Great, great. Congrats on a spectacular quarter to both of you and the team. The dollar special dividend, fantastic. And I'm not going to give it back, but, despite that business is booming and there were so many secular tailwinds in the satellite business, how did you arrive at the dollar? Why not $0.50 and retain $0.50 and to reinvest in the growth opportunities in the business? If you could give me your thoughts on that, I'd appreciate it.

Yeah. Well, I think that's primarily a Board decision. I think there are arguments -- an infinite number of arguments for different levels of dividend there. I think this is a one-time dividend, and I think the feeling is that we can do that, we can afford that at this point in time. And we'll evaluate going forward whether there are additional dividends in the future. If some of the tailwinds that you talk about occur or become more pronounced, then we can always back off from that. But at this point in time, the feeling is that this is something that we can afford and yeah.

Great, great. One more if I may and then I'll drop back in queue because I'm sure there's a line. This tremendous momentum and business opportunity going forward, what keeps you up at night that could, derail the continued taking advantage of the opportunity that lays before us?

Well, there's certainly plenty to keep me awake at night. I think a couple of things that stand out, and in my earlier words, I tried to hit on it, we do see changes in the satellite industry and exactly how best to deal with those changes and how best to position ourselves relative to those changes is something that we give an awful lot of thought to, certainly. Particularly with government customers, we see there's kind of a desire to have the best of all worlds. They want smaller, cheaper, faster satellite hardware and they don't want to invest anything in order to get there. So how exactly to be able to do that is certainly a challenge. And I think it's something that we're working on. The trick is to do that. On the one hand, we absolutely have to participate. On the other hand, we don't want to start giving things away for nothing and go back into a situation where we're potentially losing money on these programs. So this is certainly perhaps the biggest challenge that keeps us awake at night at this point.

Thank you for taking my questions. I appreciate it.

Thank you. Your next question is coming from Richard Johns. Your line is live.

Good afternoon and thanks very much for the dollar and the great job you're doing. I just have one question. I'm wondering what the size of the tax loss carry forward is as of the end of April?

I believe the NOLs were roughly in the low $20 million range. They're not all 100%. Some will be used obviously this year and then it will be recalculated after we file our tax return.

Okay, thank you.

Thank you. Your next question is coming from George Marema from Pareto Ventures. Your line is live.

Hey, good afternoon, Tom.

Hi.

So this quarter, your gross margin was about 40%. Your backlog increased substantially here. A couple of questions on this. So how do you see -- is there any revision to your gross margin outlook over the long term or -- if you look into fiscal ‘25, how should we think about gross margin and the cadence of that? And then I want to talk a little bit about the seasonality of that.

Okay. It's actually a really good question. I think, and we've talked about it on the last few calls a little bit, I think, I divide things into two categories. We have the traditional programs that we've dealt with, particularly in the satellite industry. And I think there we really can push to keep the gross margins high. As we've said previously, we target 50% gross margin on those kind of programs. But then we have what we were just discussing a little bit earlier, these new programs where there's tremendous pressure on costs. And, of course we have a concern that if we don't get involved in some of those programs we may lose out in the long run. So in some cases, we have to take on some additional risk. And effectively, that means that the gross margins we can expect from those programs is a little bit lower. So I think that realistically, I think we can expect the gross margins to stay where they are. Stay where they are, we may be able to push them higher in some cases, but I think on an overall basis, I don't see them going a lot higher in the near future.

Okay. And then in terms of backlog, is there -- it looks like there's generally some seasonality where you win the bigger contracts in the fall, which I imagine is somewhat tied to the government fiscal year. So I was a little surprised to see in the springtime here the backlog go up so dramatically. Is there any seasonality to this?

I don't really think so. Maybe there was at one time, but the government fiscal year is a little bit distorted at this point since the fiscal year starts on October 1st and last year we didn't have a budget for six months after that. I think -- I don't think we're really too tightly correlated with the government fiscal year. I mean, there are some aspects of our business that definitely are, but I think most of our work is not direct government contracts, but subcontracts with the major prime contractors to the government. And so there's usually a lag between when they're under contract and when we get our contracts. I think that any appearance of a seasonality over the past year or so is more coincidental than anything else, frankly.

Yeah, did you win any -- I mean, because your backlog last quarter was $67 million, now it's $78 million, and you did $16 million in revenue, let's call it, to round it off. So that's about $27 million, $28 million net-net positives. Were there any large contracts in that or a bunch of small ones or how did that --- what was the makeup of that?

We've had -- I don't think there are any excessively large contracts during that time, but a number of, I guess, medium-sized contracts is the best way to put it.

Okay, thank you. I'll get back in the queue.

Thank you. Your next question is coming from Michael Eisner. Your line is live.

Hey, great job.

Thank you.

When you said 40% gross margins, was that going forward for the year?

Yeah, I think so.

Roughly, roughly.

Yes.

The contracts we received in November of last year.

Yes.

How are they coming -- how is that coming along? Is there no problems?

Well, there's never a case where we have no problems, but I would say everything is very positive at this point in time. If it was a no problem kind of contract, they wouldn't be coming to Frequency Electronics. But we don't have the kind of technical problems that caused difficulties in the past, not yet on these contracts. And yeah, so I think things are looking pretty good in that respect.

And, is Zyfer back on schedule?

Zyfer is back on schedule, yes, and we're -- that's a management effort to be pretty disciplined in that regard and make sure that that remains the case going forward.

All right. In the first quarter of last year, you did like $12.5 million. Second quarter, $13.5 million. Third quarter, like $13.7 million. This quarter, $15.5 million. But your backlog actually went up by $26 million during this period. So I guess how much of this backlog do you expect to see in 2025 fiscal year?

Steve, why don't you tackle that one?

So you're talking about how much of the backlog we expect to use to turn it?

Yeah, I think -- years ago it was like 60% to 75%, somewhere in there. I can't remember.

That's approximately where it will be. It's based on the length of the programs and backlog and everything else.

It seems like backlog is going up a lot more than revenues. That's what basically I'm getting at. All right, that's it for me. Great job.

Thank you.

Thank you. [Operator Instructions] Your next question is coming from Jason Ursaner from Bumbershoot Holdings. Your line is live.

Hey, good afternoon. Thanks for taking the questions and congratulations on a great quarter. Just had a couple of, I guess, additional questions on the margin. So the press release from after last quarter, the $1.2 million revenue, was that -- did that get recovered in fiscal Q4? And if it did, what kind of margin was that at?

Go ahead, Steve.

Some of it was recognized back in this quarter. Not all of it, just some of it.

Okay. And then maybe just try to explain it again. So there's one dynamic where you're kind of chasing business that, I would say, kind of significantly above corporate average margin. That's the 50%-ish gross margin. If you could maybe explain that piece more and then the part where it sounds like there's some pushback on price. I think you're saying everybody wants it smaller, cheaper, wants things for free. Kind of that piece sounds like it's maybe below the corporate average of this 40% level for next year. Kind of just maybe a little more detail on what the dynamic is between those two kind of lines of business and where those are at looking ahead to next year.

Okay, sure. I think that, one of the things we really pride ourselves on is that we have technologies and capabilities to provide really high precision products that nobody else can provide. In those cases, we really don't have any competition. So, many of the traditional satellite programs, when they require the absolute best phase noise and performance requirements of this sort, they come to Frequency Electronics. And in those cases, we don't need to give anything away and we can obtain very desirable gross margins on those programs. In some cases, we -- so that's what I would call the traditional markets that we've dealt in. But we also do see that times are changing, as they always do. And so in particular in the space business, there's this move to smaller, cheaper satellites. And sometimes that means that people are figuring out ways to perform the same tasks with hardware that doesn't perform as well but is lower cost. In particular, what we see in the satellites is that instead of something designed to operate within requirements for 15 years, the goal is for it to operate within those requirements or maybe even relaxed requirements for only three years. And so this is a new kind of business for us. And there are just inherently a lot of risk associated with that. The requirements are in a state of flux. I think 10 years from now, where all of that ends up will be much more concrete than it is right now. People are trying things. The Elon Musk, try it and if it breaks, you fix it. But when things break, there are costs that go along with that. So in those cases, we do still want to participate because If we don't, I think the traditional market will be there for us, but there's the danger that gradually over time those traditional satellite programs disappear, assuming these novel new approaches to things, at least some of them, are successful. And so we need to participate in that process, and we need to take some calculated risks along the way, and we will. But we want to be pretty careful about that, and I think that the thing that is really good for us at this point in time is that we still have a very, very healthy business in the traditional satellite programs. And so we can afford to take on some of these riskier programs as long as we don't get too out in front of our skis on those, so to speak. So that's really the approach that we're looking at, at this point in time.

Got you. And to the extent, some of those kind of more novel approaches work, the idea is that those would also be potentially higher volume down the road. Is it mostly the low earth orbit stuff when you're talking about space and some of these approaches or is it more broad?

Well, it's mostly low earth orbit but not exclusively. The GPS program is looking at medium earth orbit satellites along this same sort of mindset. They're looking at some procuring small number at this point of satellites that would still be in medium earth orbit but would fit into this model of low cost satellites that would be replaced every three to five years. So it's mostly the low earth orbit, but not exclusively the low earth orbit. I think it's a model that just looks very attractive to everybody. It really starts with the fact that the reality is satellites are vulnerable. It doesn't really cost very much to destroy a satellite. And if it takes 10 plus years to replace a satellite, that makes the country very vulnerable. And so it really puts a lot of pressure to come up with an approach that allows those satellites to be replaced much more quickly than 10 years. And going along with that, it needs to be able to be done for a lot less than $1 billion every time that happens. So yeah, that's kind of the name of the game all the way around. And the question really just becomes where's the sweet spot? If you make a million dollar satellite and launch it but it fails before you can get it operational, that doesn't buy anybody anything. So, if it's too cheap, it's not good. On the other hand, if it's too expensive, it's not good either. So there's a lot of work in where that ends up in the end is still an open question.

Got it. Appreciate all those details. I'll jump back in the queue. Thank you.

Thank you. Your next question is coming from George Marema from Pareto Ventures. Your line is live.

Yeah, thanks, Tom, for taking a couple more. I want a little more color, a little bit about your technologies and capabilities. In terms of commercial business, what is your outlook in the future of going after commercial business with either existing or new technology? And also, there's been a heightened worry with GPS being taken down. And I wonder if you could give a little color on your GPS capabilities, both present and future stuff.

Okay, a couple of things. I think we are going after a number of things in terms of commercial technologies. We're very interested in that, and I think That's one where we're actively pursuing external funding. We're doing a little bit with internal R&D funds, but we have some really good prospects for external funding on some of these things. We are looking at magnetic -- magnetometers primarily. One of the things to augment GPS navigation is looking at magnetic anomalies. And so there are a lot of interesting magnetometer ideas that are part of that equation. And we're looking at that. We are also looking at some other quantum sensors, Rydberg sensors in particular, which is a novel way of -- one of the applications for that technology is receiving antennas that are disconnected from the wavelength or the frequency of the signals that are received. That's one that's actually a technology very close to our atomic clock technologies and it's one that we feel that we can contribute to very successfully. So the other part of your question had to do with GPS and I guess at least in part the vulnerability of GPS. We are actively participating in GPS. We are currently providing oscillators for the GPS satellites and we of course have developed a rubidium atomic clock for the GPS satellites. We are a qualified second source at this point in time for the rubidium atomic clocks for the GPS satellites. And we are pursuing, we have some potential customers for that technology with other navigation systems that are being considered and deployed around the world. So, I think we certainly are very involved in GPS, but we also are very aware of the vulnerability, and I think we are also actively involved in some of…

No, that's great. That's a very thorough answer. Excellent. I want to keep my Uber Eats working here. One more thing. I'm going to drill on -- again on margins again. So, do you guys, for operating expenses, SG&A for ‘25, do you expect that to stay relatively steady or any material change there?

I think we expect that to retain pretty steady. No expectations of anything unusual.

Yeah. And I suspect you're being very conservative on the gross margin, but is there any production efficiencies as you kind of have a higher production rate to kind of squeeze a few more points out of that just from production?

Well, potentially. But of course, we generally and certainly in the space business, we don't deal with large quantities. Now, as we get into some of these programs with the lower cost satellites, of course, we would be looking at larger volumes. And I think eventually we should have very attractive margins because of that. But I think in the initial phases, I think that's a lot less likely. There's just so much uncertainty as to how those programs are going to evolve. And I think especially to the extent that these are government programs, it's just, trying to predict the timeframe in which the government does things is just frustrating as can be. And we've seen several of these programs where the predicted schedules are given. We provide proposals based on those schedules and a couple months later those schedules change. It's just a very tricky part of this business at this point in time.

Thank you, Tom.

Thank you. Your next question is coming from Michael Eisner. Your line is live.

Yeah, just one follow-up question. When you're talking about the clocks up there -- the clocks have stayed up there for like three years, you kept on saying riskier. In what way? To produce them or that someone can outdo you?

Well, okay, so I think, on the surface of it, you look, well, we've been producing clocks that are designed to last 15 years in space. So what's riskier about making a clock that only has to last for three years? Well, if everything else was equal, you would expect it to be less risky. But the reality is that we're expected to be able to build those clocks much, much faster and for much less money. And that's really where the risk comes in. And so there's a lot of discussion with the government at this point as to what -- so one of the really big things that drives the costs in our business is how reliable the individual electronic components that go into these devices need to be. There's a tremendous amount of testing in the traditional satellite business, tremendous amount of testing that's required on the individual parts. A $1 part for commercial applications becomes a $200 or $300 or $400 part by the time it's gone through all of the screening tests that are required on traditional satellite programs. So one of the questions is when you go from a 15-year expected life to a three-year expected life, can you get the -- is it going to be acceptable to use that $1 part or is it going to be a $400 part or is it going to be something in between? And in general, it's something in between. But this is where the risk comes in because it's pretty much an unknown. What we see from the government customers at this point in time is that they sort of waffle on what the expectations are for these parts. So I think this is where we see a lot of risk. And, there's -- the other aspect of it is, conceptually there's this spirit of, well, we try to use really good parts, but if we have some challenges with that, if the supply chain doesn't work out, we're willing to adapt and accept lesser quality parts when we have to. But again, this is where risk comes in because will people be adaptable? Will they take that kind of an attitude? In some cases in the past, we've seen people get very strict about these requirements and we can be left with some pretty high costs trying to adapt on these programs when we can't get a part when we need it. Programs get delayed over, one of our devices that maybe has 1,000 parts, we get delayed by several months over one or two parts that we can't acquire on time. So hopefully that gives you a little bit of flavor, Michael. Those are the kind of things that are risks that we have to deal with on these programs.

One final thing. Are all the companies that make these parts, they're going to have the same issue that you have? The same risk.

Well, let's see if you're talking about our competitors, that's certainly true.

Yes.

Okay. Yes, that's true. Absolutely.

So everyone has the same exact risk?

Yes.

So, it is what it is, and you guys are known to make the better parts and to get this stuff done. So what you talked about is basically everyone is going to have the same exact issue.

Yeah. I think that's correct. I think it's not that Frequency Electronics is in some special position in this regard. But I think it's where really disciplined management comes into play. We need to monitor this very carefully. We need to be responsible about what kind of -- what level of risks we take on going forward and so forth and so on.

Okay. I appreciate that.

Thank you. Your next question is coming from Brett Richards. Your line is live.

Hey guys. Congrats on a great quarter. Also appreciate the $1. Just one basic question. On the cadence of those contracts, the big ones that you signed in November, I think you were looking at about a two-year delivery time for the most part, kind of slightly front-weighted. Has that delivery cadence changed any way or what you expect?

Not really. We're -- on at least one of those programs, we have a very aggressive delivery schedule. And at this point in time, we're on target to meet the delivery requirements and it's challenging, but I think we're -- that program is going very well at this point in time.

Good to hear. And the backlog, I did want to ask you. So, of that backlog add that you had this quarter, how much of that was related to the release of backlog from those contracts versus other new business that you guys signed?

Steve, can you address that one?

I don't have the exact number of how much came from those. I would say like I said, it was a mix of both, some from older and some from newer.

Okay.

Yeah. I think that the thing to keep in mind is that when we get a new program, the full contract amount doesn't show up as a backlog is only as we get funded that shows up as a backlog. So I think it's -- I don't remember the exact percentage, but it's a significant amount of new business, but also a very significant amount of just funding of existing contracts.

Okay. That's helpful. The other one was about the commercial customer. It was kind of that same batch of contracts, you had one of the smaller ones, was I think $9 million on the commercial customer. And I think you guys had hoped that might grow into something much larger later. I'm assuming at this point, just based on the commercial revenue you guys have been recognizing that you probably haven't done a whole lot of work on that contract yet, but I'm wondering if you could provide any color kind of on where that outlook is for that business?

Yeah, I think that we have several contracts that fit into this category, but we have one in particular satellite program. We -- it's going quite well at this point in time, but I think that one in particular is really sort of a three-year time frame. And actually, that stretched out a little bit because in this case, the customer has added some additional features and which is ultimately very positive, but it is extending out to the delivery dates on that contract. That is a very promising program, and we think that there's tremendous potential beyond the existing contract in that case, yeah.

You're essentially haggling over specs at this point?

Well, it's not so much haggling. It's that the initial contract was for a very precise hardware. And there have just been some add-ons that the customer has asked for some additional features and things. So it's really add-ons to the contract.

Okay. Well, anyway, guys, great quarter. Congrats. I'll talk to you in a few months.

Okay. Thank you. Great.

Thank you. Your next question is coming from Jason Ursaner from Bumbershoot Holdings. Your line is live.

Hi, thanks for taking the follow-up. I guess on the -- I guess, the alternatives in the low-cost satellites. So it sounds like it's a cost versus reliability question, but there isn't an alternative on the cost. It's just trying to educate the customer on how much, I guess, they're valuing the reliability? Or is there -- is it a trade-off where there is some lesser technology that's significantly cheaper where they're trying to get more reliable and you obviously have the reliability but you're trying to get cost down. Is it kind of a mix or is there no alternative right now and it's just kind of trying to get cost down on a time line that works for them?

Well, I think a good way to describe this is with an analogy. In -- early in my career, the electronics circuitry made a changeover from what we call through-hole electronics. This has leaded electronic components that were soldered onto printed circuit boards through holes in the printed circuit boards. And those components were replaced with surface mount components, which are made much, much smaller than the through-hole components. And that now, of course, many years later, we're all used to the surface mount components. But in the early days, there was a period where there was a state of flux over just how small you could make things and the details of how those parts, those individual parts had to be manufactured so that they would be reliable in the applications that they were being used in. And there were some cases where things didn't work out so well. There are parts -- surface mount parts that failed very quickly. And gradually, over time, those sort of in the school of hard knocks, those kind of problems were uncovered and gradually solved. And I think it's kind of a similar thing that is going to take place over the next decade or so in the satellite industry. This new model comes about, which really makes a tremendous amount of sense, make -- instead of the idea being that you build a satellite that is just never going to fail, you build redundancy into that satellite. If you have a part that's not so reliable, you put two or three or four of them on the satellite so that if one of them fails, the next one takes over. Instead of doing that, you make a much lower-cost satellite. And the idea is if instead of having multiple parts on…

Sure. In the -- I guess, the longer term, if I think -- if LEO orbit is tremendously successful and between Starlink, OneWeb and Project Kuiper, I mean you're going to have thousands and thousands of these satellites in low earth orbit. And if it's a five-year replacement cycle or something, I mean, it's still, I don't know, 2,000 satellites a year or something. Is it -- what kind of magnitude cost reduction do you probably need to be in the ballgame of like being the solution for that market long term?

Well, that's the part that's really difficult to say at this point because we don't -- there's going to be a variety of different things. We're already looking at some satellite applications where the numbers -- in some cases, the numbers of satellites are huge. Starlink, there's tens of thousands of satellites that are supposed to be available eventually. But there are other cases where we're looking at a couple of hundred, in some cases where some of the geosynchronous satellites that exist today, where there may be one. Those will be replaced potentially in the future with maybe half a dozen instead of one. So there's kind of a broad spectrum of things. And then again, I think it -- the economics are just kind of have to play out in terms of what really makes sense. I think there will be a sweet spot that develops and people will figure out that what kind of things you can get away with and what you cannot. One of the big important things is radiation in space. So one of the desirable things as part of this -- well, let me back up just a little bit. One frustration in space is that it takes 10 years to develop and launch a new satellite. By the time it launches and gets into operation in space, it’s 10-year-old technology that's being used on that satellite. So we all know that the electronics technology, computer technology from 10 years ago is kind of ancient history. And so we have the situation that in space the technologies that are used tend to be pretty old by the time they get there, people would like to change that. So that's one of the advantages if you can launch satellites more quickly. If every year, you're launching new satellites, you can introduce newer technologies. On the other hand, one of the problems in space is radiation. And as you -- one of the ways that electronics technologies, computer technology, digital technologies improve is by making things smaller. But when you make them smaller, they become more sensitive to radiation and space, single event upsets become a problem. And so this is going to be -- one of the challenges is to figure out what you can get away with in space in this regard.

And the couple of thousand satellites that are already in orbit for low earth, are they using either your technology similar to frequency for timing and just not happy about the cost or have they just not addressed the timing issues and maybe that's why it's becoming more of an issue in terms of failure rate?

Well, some of those applications don't require the kind of precision timing that we provide in our devices. So I think that's the case for the Starlink satellites. They utilize their requirements in terms of performance in this regard is significantly less than what we typically provide. But there are other cases where particular applications that need some of our technologies and I think there's a lot of work to trying to figure out how to provide those technologies at lower cost. We're, of course, participating in that process, but we're not alone. We do have competition.

Okay. Awesome. I appreciate all the details. Thanks a lot, Tom.

Thank you. That completes our Q&A session. Everyone, this concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.