Hello, everyone. Thank you for joining us, and welcome to the York Space Systems Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] I will now hand the call over to Christopher Evenden, Vice President of Investor Relations. Please go ahead.

Hello, everyone, and welcome to York Space Systems Fourth Quarter and Full Year 2025 Earnings Call. With me on the line are Dirk Wallinger, our CEO; and Kevin Messerle, our CFO. Please note that our earnings press release is available at ir.yorkspacesystems.com. In addition, we have posted an earnings presentation to accompany our prepared remarks on the same website. Lastly, after the call we will post a transcript of our prepared remarks and an audio replay of this call. For those listening to rebroadcast of this call, we remind you that the remarks made herein are as of today, Thursday, March 19, 2026 and have not been updated subsequent to this call. During this call, we will refer to certain non-GAAP measures. A reconciliation of these measures to the most directly comparable GAAP measures can be found in our earnings press release. We will also make statements that are considered forward looking, including those related to our 2026 outlook, future growth prospects, backlog, growth of market share, growth strategy and capabilities and future health of our spacecraft. Listeners are cautioned that our forward looking statements involve certain assumptions and are inherently subject to risks and uncertainties that can cause our actual results to differ materially from our current expectations. We advise listeners to review the risk factors and other discussions included in our prospectus filed with the SEC on January 30th, 2026 and in our subsequent reports filed with the SEC including our upcoming annual report on Form 10-K for the year 2025. After the completion of prepared remarks we will open the call for questions. Now I will turn the call over to Dirk.

Thanks, Chris. Hello, and welcome to York's Fourth Quarter and Full Year 2025 Earnings Call. I appreciate you all taking the time, and I'm happy to be speaking with you. 2025 marked an inflection point in our business. We grew revenue by 52% year-over-year, and we exited the year with clear line of sight to profitability in 2026. Kevin will get to the details of that in a moment. Our financial results are a reflection of the business milestones we reached during the year. Given this is our first earnings call, I'll provide some context on how we got here. I founded York in 2012 with one purpose, to disrupt the traditional space industry. At that time, it was an era of multibillion-dollar satellites built over decade-long time lines. And it was clear to me that if the United States continued on this path, we'd lose the second space race to our adversaries. We needed the ability to design, build and deploy large constellations of satellites on significantly accelerated time lines. That meant transforming how we manufacture, launch and operate satellites, shifting from bespoke programs to a fully industrialized model. That's exactly what York was built to do and what we've been executing on since 2012. As the mission prime, we own the full satellite life cycle from design and manufacturing through launch, operations and sustainment. Our multi-platform approach is built around a standardized modular family of spacecraft that range from 200 to more than 2,000 kilograms. We architect our platforms as integrated systems, combining flight-proven hardware with proprietary flight and mission operations software. That integrated software-hardware approach is designed to allow us to seamlessly coordinate across 3 different operation centers, task across our global network of close to 50 antennas and procure and integrate launch services. Executing as the…

Thanks, Dirk. As Dirk said, 2025 was a transformative year for York. By successfully delivering on a broad set of contracts, we were able to significantly grow revenue and take significant strides towards profitability. Revenue for the year was $386.2 million, up $132.7 million or 52% on the prior year. Substantially, all of our revenue derives from long-term fixed firm price contracts and is recognized using a percentage of completion method. We believe this approach most accurately tracks the business and it provides generally a steady progression of revenue throughout a program. Year-on-year growth in revenue was primarily driven by increased completion against 2 of our Transport Layer Tranche 2 contracts. Gross margin percentage, which includes allocated labor, overheads and D&A, was 20%, up 7 percentage points year-on-year, driven by improved mix as newer programs became a larger part of the whole and a reduction in negative EAC adjustments. EAC is estimate at completion and is our estimate of final program costs and margins. We have built cross-functional teams at York that reevaluate these on a program-by-program basis every quarter. Turning to operating expenses. While our revenues increased 52% year-on-year, our SG&A plus R&D expenses only increased 8% for the same period. We also incurred approximately $12.1 million of onetime transaction costs associated with our M&A program as well as IPO-related professional fees. The ability to scale our revenue while tightly controlling expenses is the primary driver of our improvement in adjusted EBITDA from 2024 to 2025, and we expect that trend to continue through 2026. On the operations front, we had 710 employees at the end of the quarter, of whom almost 75% are directly involved in the design and manufacture of satellites or delivery of mission services. Just to touch on our liquidity. As of December 31, 2025,…

[Operator Instructions] Your first question comes from the line of John Godyn of Citi.

Appreciate it. I wanted to -- there are a few things to follow up on, but I guess the one that I'll focus on is this acquisition, Orbion. Maybe you could just talk a little bit more about that, how it came about, what the terms were. And I was curious if this was the deal that was contemplated in the S-1. There was a note in the S-1 about a letter of intent for an acquisition. Was this that? Or was it a different one?

Yes, sure. Happy to dive into that one a little bit. Thanks, John. I appreciate the question. Yes, it is the acquisition that we are contemplating from the S-1. We're really excited about Orbion for a few different reasons. We've launched a good amount of satellites at this point. We've worked with a wide range of propulsion providers. Orbion was really a clear winner as far as their ability to execute, their ability to perform. Their hardware has performed really well in orbit. It's a really great team to work with. So we're excited about bringing that on. And it kind of goes to the vision of when we were doing the IPO, right? We spoke about the 4 different things that we were going to do and how we're going to go on offense. And one of those was some inorganic associated with bringing great technologies kind of in-house so we could align our technology road map, kind of give them a better vision of where the market was headed, where we were headed. So that they could be more successful in developing those products kind of right out the gate. And that kind of communication is going to be critical because we're already a leader as far as costs and schedule go. But with Orbion with us now, we'll be able to align that technology road map, give them assurance of the kind of size of production cadence they're going to need in the coming years. So that they'll be really prepared to deliver for us. And so they've been a phenomenal performer for us for years now. And so we think this will make them an even better performer for us and the rest of the market as well. So they will continue to execute as a wholly-owned subsidiary.

That's fantastic. And do you guys -- are you willing to give us a sense of how much revenue that's contributing to this year? And then just on M&A in general, are there any other acquisitions contemplated that we should be aware of?

Yes. Kevin, correct me if I'm wrong. I mean I don't think that we're breaking out them individually, right? I think it's -- we're going to still report at the top level, right?

We're not issuing specific guidance, John, on Orbion, but we can confirm that it's included in our consolidated guidance figure.

And to the latter question about additional M&A, I mean, I do think there's some opportunity for some additional M&A. I think people in the industry and in this segment kind of see what we're doing. They're very excited about it. They want to be a part of it. And so there'll be some other things where like Orbion, they make sense, right? They're the best technologies. It will help us continue to drive down cost even further and make that advantage that we have larger, but then also kind of align that so that our schedules continue to be the best in the sector. So I think there could be some more opportunity for that. And then there's also opportunities where we might start to look at kind of adjacent markets and things like that.

Your next question comes from the line of Seth Seifman of JPMorgan.

I wanted to start off talking about some of the opportunities for new business that you mentioned coming later in the year. Is it some of the Golden Dome opportunities moving maybe to the left of initial expectations for 2027? Is it in the intelligence community? Is it the next tracking layer? And what are the prospects to exit this year with a backlog that's bigger than where it is now?

Well, yes, I mean, I think that we feel pretty great about that, Seth. So I appreciate the question. I thought the pretty exciting part of the call was where we mentioned that we just won a new constellation for M-CLASS for a commercial customer. A 20-plus constellation. It's the first constellation of many planned for this customer. So I thought that was an exciting part. I thought that, that would add to the backlog. But -- so obviously, that's pretty exciting for us as well. As General Guetlein has kind of attested to and been more public in general with regard to Golden Dome and National Defense just in general. I mean, it's got -- everyone focuses on the name Golden Dome, but the reality is it's National Defense, right? So independent of what it's called. He's spoken a lot more about the absolute need to lower the cost, to move faster and then to leverage existing acquisition vehicles. We checked the box on all 3 of those. And so I think that's why we're starting to see a little bit more come out about National Defense and Golden Dome, what that's going to be. I can't go into any more details right now other than to say that it's a late-breaking news that we have not won 1, but we've won 2 IDIQ contracts now for different classified customers. So on this call alone, we have not only our healthy backlog and our ability to convert that backlog into revenue, which Kevin reported on, we've won a new commercial contract for the first of many constellations for our M-CLASS. And then we have now won 2 IDIQs for different classified customers. So we feel very bullish about the position that we're in. I think generally, though, I mean, just as a commentary, you're not going to hear a ton about Golden Done. General Guetlein has been pretty clear that most of the work is going to be classified, and that's kind of what we're seeing, right? We're seeing contracts being awarded on the classified side of things. So I'd be happy to talk more about those contracts that we've won for the different classified customers, but that will be kind of coming in the next few weeks as we kind of sketch those out in a little bit more detail on what we're allowed to discuss and what we're not. So we're still working on that. But hopefully, that gives you more insight. I mean I think that we're in a pretty bullish position with our performance and our ability to just between IPO and now, we've already added quite a bit more to the backlog. So I think we feel like we're in a good position, and we're going to execute like we always do.

Excellent. Excellent. Maybe to follow up then on the commercial win there. I guess the pieces of the TAM that you guys have laid out in the past were pretty national security oriented. So how do we think about that commercial piece coming into it and how -- maybe the size of that relative to the other pieces of the TAM and how significant that could get within your mix?

Yes. I mean I feel focus historically has been on National Defense, but that's mostly because the reality is that's where the dollars were. That's where the contracts were. So we won the contracts that were available to us and we did a very good job on them and executing on them as well. And so that success led to more contracts. So we're happy with that. But I'm very -- I'm more and more bullish every day on what commercial can do. Unfortunately, we can't disclose who that customer is right now, but I'm very excited about the mission and what they're doing. It's very much aligned with the trends that we're seeing today. And also what I think we're going to see is a lot more growth in this area. Really, traditionally, commercial has kind of struggled with kind of getting that kind of total gravity, I guess, for lack of a better term, on really garnering the attention it needs and the dollars it needs to really be at scale. But we're really seeing that shift. We're also seeing this administration say that they want to leverage more commercial, which obviously encourages investment in it as well. So I'm in hopes this is the first of many. I mean, I know for this customer alone, this is the first of many in the constellations that they're going to deliver to orbit. So we're obviously very happy to be in the position with that. But I think in general, commercial, we're just going to see more and more. The nice part is you kind of have a giant surge in national defense, right, which is a great market for us. And we're now showing some pretty significant diversity in customer base on that front. And then to have some big commercial wins is really great, too. So I think both markets are going to surge. Obviously, I think that we're in a good position to win that work. We just got to continue to execute as we have been, deliver at scale. And I think both of those markets are going to see healthy growth for many years to come. No one is saying we need less satellites in the future.

Your next question comes from the line of Peter Arment of Baird.

Dirk, just maybe just to circle back a little bit on your comments about kind of Golden Dome/the National Defense contracts. Has there -- we're dealing with a lot of investors are kind of very focused on if there's been a material change in what you view the PWSA kind of architecture is. I was wondering if you could just maybe shed light. Do you view it to be materially changing? Or is it just morphing into the various classified versions of Golden Dome? Just any insight would be helpful.

I think it's along the lines of what you said in the latter part there. So look, if it's called PWSA, if it's called Space Data Network, if it's called pLEO, whatever the name is, the government is definitively moving towards it. And they're delivering contracts pretty quickly now out to performers who are going to execute on this. They need this executed really quickly. So I don't think it's about, hey, does PWSA, is that going away? Is MILNET going away? There's nothing going away. Communications is not only absolutely critical for Golden Dome and missile and National Defense in general, it's the most important thing. Nothing else happens without communication. So I think it's more of there's definitely a realization that this is going to be the architecture of the future for the United States. And if it is going to be the architecture for the United States that it needs to be more coordinated, right? That's a general theme that we're hearing across anything, whether that's space, whether that's sea, land, air, it has to be more coordinated. So I think a lot of the "shifts" I guess, that you're seeing in PWSA Transport or MILNET or what have you, isn't really about do we need this? It is about we do need this, how are we going to get them to talk to one another. And maybe we should look at that in more detail and definitize that more before we continue on kind of separate disparate paths, which is kind of what got us into the challenges in the United States faces today is we have lots of amazing capabilities, but they're disparate and they don't talk to one another. So I think it's really more about that is whatever the name is, it doesn't matter, it's needed. I think it's just more about let's make sure that they're going to talk to one another because we shot ourselves in the foot like a couple of times over this. So let's not do that anymore. I think it's really more about that, like that's the mentality.

Got it. That's helpful color. And just it is exciting, obviously, with the new commercial win that you announced in February. Could you maybe talk a little bit about expectations of delivery of those 20-plus satellites just over what time line?

Yes. So T1 is an operational system. And as such, the readiness of the system is controlled information. So I can't discuss actual launch date, but we are very far along on production, and I think shipping is imminent. I probably can't get any more specific than that.

Your next question comes from the line of David Strauss of Wells Fargo.

Dirk, I wanted to ask about in the fiscal '26 DoD budget that was passed, I think, end of January or early February, there was still a whole bunch of Tranche 1 and Tranche 2 funding in there. So have you actually received all of the Tranche 1 and Tranche 2 funding? Is that reflected in backlog today for you? Or is there still a fair amount of funding that has to come through and be put into your backlog related to Tranche 1 and Tranche 2?

I believe it's all included in the backlog. But Kevin, maybe if you think I'm mistaken, you can speak up.

No, that's right, Dirk. What we report as backlog are only exercised options and only funded exercised options. So it's all -- our backlog is entirely funded.

Okay. So even though that wasn't -- the funding wasn't passed until January after the end of your 2025 year, that's in the backlog or it isn't in the backlog?

So let me try it this way. So all of the programs that we're on, right, have funds appropriated for them. And then just the way just to get into some of the nuances of how the government funding works is, yes, as we move into different fiscal years, they will then technically fund it, right? So the funding does come over time. I think the bigger point is that all these programs, the money is budgeted and set aside for it. But yes, there is a technical sort of nuance of how the -- over time, the actual money moves technically to that program. So within our backlog, again, it's all exercised contracts or exercised options within those contracts. We don't include unexercised options. A lot of those are the right of launch O&S portion. So that's not included in the backlog. And then to your point, things over time when the funding actually moves it, we don't move our backlog up and down by the funding amount just because it's a very small portion that's not funded, and we know that the funds are there. It's just more of a technicality of when they occur.

Okay. And then can you talk about kind of your current build rate? What are you producing at today? And what kind of build rate underlies the 2026 revenue guide as compared to 2025?

Yes. I mean -- so I would say that build rate is definitely not going to be -- is not the challenge for us. We're not building up our production in hopes of meeting the demand that we have or meeting future demand. Quite the opposite. So York has invested pretty heavily in our production capacity. In our Willow facility alone, we have all the capacity to meet all the production needs through 2028, right? So that's Willow alone. It does not include production capacity at our Wazee facility, which is a little bit smaller, but nonetheless, a completely different production facility. And most importantly, our Potomac facility, which is actually 4x larger than our Willow facility. So we've actually built out, invested in and are prepared for massive production numbers on the order of up to 1,000 satellites a year. So that's what we've invested in, and that's what our capacity is today. And that's a little bit of a differentiator between a lot of other companies who are still trying to prove their first product. And even after they prove their first product, try to get to scale. And so that's a little bit different for us. So everything at just our Willow facility alone meets all our projections through '28, and we have 4x more capacity in our Potomac facility. So we're very well positioned for the growth that we expect going on through '26, '28, '29.

Yes. I'll just maybe add a few things here, Dirk. There's a pretty helpful slide we have in our earnings deck. I think you should all have access to that either now or after the call. But it's Slide 8, and it shows that right now, we have 33 satellites on orbit. But then we provide some general guidance to the satellites that we have currently in our backlog being produced. It's 107, and we expect all 107 of those to be launching over the course of '26 and '27. As Dirk mentioned earlier, we can't provide specific launch timing for specific programs. That's controlled information. But what we can say is, broadly speaking, we'll have a total of 140 satellites on orbit by the end of 2027, if not sooner. And so the way to think about how that ties to our -- you touched on our revenue. Again, over 70% at the midpoint of our guidance is backlog. And that's really just pretty highly predictable revenue stream. It's driven off our cost incurrence. And we have a pretty mature at this point, supply chain. And we have daily and weekly discussions depending on the vendor and the program. But it's all to say we have a pretty good line of sight into the tempo of that revenue. And it's all generally tied to the higher theme that over the course of the next 2 years, we're going to be putting 107 satellites into orbit. And that actually does not include -- that 107 number I'm citing does not include to be clear, that new commercial constellation. We're still working with that customer to fine-tune some of the expectations for launch dates there.

[Operator Instructions] Your next question comes from the line of Austin Moeller of Canaccord Genuity.

Just my first question here. Given the funding already included in Big Beautiful Bill and the fiscal year '26 budget for Golden Dome, what funding do you think might be allocated in this $450 billion reconciliation bill for space that they're talking about? Do you think it might include more satellites or more ground infrastructure for Space Force and DoW?

I mean at the 10,000-foot level, it's going to include more for both, for sure. Space is absolutely going to be critical to the National Defense and what we're doing in the future. But that does include a significant amount of ground effort as well. Ground will need to tie, like I said, all the disparate systems together. That's kind of the main challenge that we have is we have all the capabilities we need. We need to be more efficient in how they talk to one another. So ground will be a huge part of that. building out ground is important. And that's one of the IDIQs that I mentioned was a contract win for us is about York helping to contribute to that, us helping to contribute on how you operate hundreds and thousands of satellites in orbit, how you feed that information and how you distribute that information and disseminate it. And satellites are really the best way of disseminating information. It's kind of above the entire battlefront. So there's going to be a significant amount for both ground and satellites, for both. Now all that said, our pipeline that we've identified and we have to update it, I'm sure, but we have $11 billion in identified pipeline right now. So that's seemingly only going to grow. I've seen more requests for more funding for some of our more recent engagements as well. So our identified pipeline is $11 billion, and that was before a lot of the growth that you're talking about here.

Okay. And as the production lots for Golden Dome or PWSA grows with additional contracts for that constellation or those constellations, what gives you confidence in maintaining the target gross and contribution margins going forward? Is it just the strong execution record and timely delivery and best-in-class product?

Yes. I mean it's -- for us, it's always the 3 main metrics is that best capability, best performance, best schedule, which we meet on all those fronts. But historically, we have executed at a price point that is half the price of our competitors. And we've done it with the margins that we are very close to now. And we think that we have opportunity to increase that because we're only becoming more and more efficient. So just as a kind of a side story, I guess, or an example is critical design review is one of the most critical reviews for any of our programs. I can say that for the T1 program at CDR, we had 65 engineering heads working that program. And at the same critical design review for T2, we had 15, right? So we are seeing significant improvements in our efficiency and our ability to execute. So Kevin, I mean, you might have some more comments on those margins there, but those are the margins that we plan to. Those are the margins that we price to. Those are the margins that we execute on. And we've been doing it at those margins at half the price. But Kevin, I don't know if there's more to add.

No, I think you covered it really well, Dirk. What I would say is that, yes, given that we are already half the price of our competition, we're starting from a pretty enviable pricing position, right? So I don't feel like we need to certainly lower price at all. I think our strategy, as Dirk has outlined in the past is probably maintain this pricing. We make nice margins at it. But what we can do and what we are doing, right, is as our supply chain matures and we're ordering more volumes, we're going to see just our supply base or our cost base start to come down, right? So definitely, I think, there's more upside to contribution margin. Just from a sort of an accounting perspective, some of these vertical integration plays that we've done, those are highly accretive to contribution margin. Just the way that the intercompany math works with their profit margin basically getting kind of canceled out. So it's all to say, I feel very good about contribution margin growing from here. And another aspect of that, frankly, is we've been producing at large scale for a couple of years now, which is something a lot of our competition probably still has ahead of them. And so we've learned just a lot by being in the trenches and fielding these large constellations. So we -- there's no more surprises of things that we perhaps forgot to price in when we bid a contract a couple of years ago. Just that's what you get from the level of experience and repetition that we've had. So we don't expect any surprises on the material cost side. And again, the trend will be to continue to drive down our supply chain costs.

Your next question comes from the line of Ryan Koontz of Needham & Co.

And I want to ask kind of big picture here with regards to the '26 guide and I see over 70% of that's already in backlog. But if you can expand on the kind of -- the types of revenue or the mix of revenue that's not currently in backlog that you'd expect to see in '26 for us.

You want me to start -- Ryan, what I'd say is that we are expecting new business award activity to start to pick up as some of these dollars get allocated in the eventual sort of spending agencies that will ultimately be awarding the contracts. We think that's going to take a little bit of time. We think once we kind of get to that midyear and into the second half, we're going to start to see some pretty robust award activity, and that's the basis of our range of $545 million to $595 million of rev. So we do think most of that will be from our traditional Department of Defense government sector, whether that's PWSA or Golden Dome or IC. One of the themes Dirk has touched on today is that wherever it comes out of, we're a bit agnostic to that because we just believe the capabilities we have are -- position us well across the board. There'll be a little bit of commercial, that new commercial contract. We're not anticipating substantial revenue recognition from that one this year. So I would say it's going to be largely second half government defense awards and a little bit of commercial.

Helpful. That's really great. And anything on the supply chain you'd call out as challenging these days. We hear about it in other areas of tech getting tough. But any particular areas you're concerned about having to invest maybe extra working capital to be prepared?

Yes. I mean we do hear a lot about supply chains now. But I think that we're a little bit differentiated in that sense. And how I mean that is we are at production capacity now, which means that we were tackling supply chain issues several years ago. And so I think it's a little bit new for folks trying to ramp up now, but we've done that investment. I think acquisitions like Orbion are very, very helpful in the sense of we can better plan with our partners on kind of what kind of numbers we're going to need and when, and we can co-invest if that's required. And so we've done a lot of that already. And so our supply chain is very robust, very secure. We worked these issues many years ago. We did things like buy solar arrays in bulk ahead of a need, ahead of challenges that were coming ahead. We co-invested on some laser capability to stand up production on that. But again, that was for a tZERO contract. So we've basically retired a lot of that investment we needed to make in our supply chain. We're kind of more now in improvement cycle where we're trying to improve it, make it more efficient and make it a little bit better. But us kind of delaying schedule and things like that because of supply chain is a problem that we looked at a couple of years ago, and we feel like we have a good handle on it. I think when we did the IPO, we did talk about that we were going to inventory a lot of our spacecraft. We're in a unique position to be able to do that. We have a very large backlog. We have a consistent product. We know that it works. We know that it works in orbit. And so we are going to invest in some inventory, which should help with the supply chain challenges as well. The reality is something being delayed is only really a problem if you're already behind, right? But if you are ahead of the need and ahead of a schedule and have an inventory product, if something shows up 3 weeks later than it should have, but you have inventory spacecraft and you have ahead of a need, then you're able to kind of sustain those impacts. So that's where we're focused more is standing up, basically supporting our supply chain to be more efficient, and then we're going to build inventory spacecraft. And that's going to really take that kind of lead time out of the equation for us.

Great. And one just quick clarification there. If you're building that inventory and shipping from inventory, is that a different form of rev rec than traditionally?

No. What it does is effectively accelerate the revenue recognition. So as Dirk said, we want to be smart about building up some satellite platforms in inventory. And then that way, our BD folks can be empowered to say, hey, how quickly do you need this mission flown because we've proven, I think, Dirk touched on in his prepared remarks with our Dragoon mission, right? We -- ATP to orbit was 7 months, which is pretty unheard of. So what that will do is we'll kind of build up the cost structure on the balance sheet and inventory. And then once we get that allocated to a particular revenue-generating program, it will be a very fast cycle of rev rec. So it will be pretty exciting to see that happen.

Your next question comes from the line of Sheila Kahyaoglu of Jefferies.

Congrats on your first quarter. Maybe if I could ask first on just the margin comments and the pricing. You guys offer an affordable solution. What's driving some of the higher margins? I know you talked about the supply chain improvements. What is that? Is that more like supply chain pricing? And how do we think about the volume leverage? And maybe if we could clarify on Orbion, how do we think about the revenue contribution there given that's a vertical integration play as well?

Kevin, why don't you talk to that? Yes.

I'll touch on that. Yes, we'll start with the Orbion one. So the way it works, broadly speaking, when we acquire a company like Orbion, and like ATLAS, it's the same thing for ATLAS. So they do York business and non-York business. So when our consolidated numbers are put out, the net impact is just on the non-York business. Because the way it works from an accounting perspective is that our -- their York business, that revenue gets canceled out and the associated COGS from us. So their revenue is our COGS, so to speak, those net out in the elimination. So again, they are baked into our projections. They're not a, I would say, not a substantial portion of our 2026 guidance because, again, we're buying companies that we already buy a lot of stuff from. And then so that kind of -- it's more of a margin improvement. I touched on earlier, the more -- when we do these type of vertical integration acquisitions, they're very accretive to contribution margin, right? Because we're basically stripping out what otherwise would have been profit margin that we were paying to a third-party vendor. Now that just kind of stays within the family, so to speak. So that's a big driver of increased contribution margin and gross -- overall gross margin. So that's how that works. And then just in general, I think you had a question about margin. So our margins improved year-over-year, our gross margin by about 700 basis points. And that's really a result of a couple of things. It's program mix. So our newer vintage program, so a lot of the growth in revenue in 2025 came from our Tranche 2 transport layer programs, alpha and gamma. Those were programs that we were -- we priced when we had a lot of reps in our system through T0 and T1. So we priced that really well, and those are higher margin. In general, our newer programs are higher margin. So it's a factor of mix -- and then we also had reduced negative EAC adjustments in fiscal '25. And again, that's another sort of proof point of a maturing business and maturing sort of pricing rigor and cost rigor. We don't expect to see any sort of meaningful negative EAC adjustments as we move forward. So it's really those 2 things that drove the nearly 700 basis point margin -- gross margin improvement in '25.

Got it. That's very clear. And then maybe if you could just provide a quick update on how you're thinking about Transporter Tranche 3 and just the path forward for that mission.

Yes. As I kind of talked about a little bit earlier, there's no doubt that communications is going to be a major part of Golden Dome and National Defense in general. I believe that it's going to be restructured under something called the Space Data Network, where they're working through that architecture and what that will look like now. My best guess, and it's a guess, is that I think transport will probably be part of that Space Data Network, and it will interlink with the other systems. So it kind of goes to what I was saying before of, they're realizing that these systems cannot be disparate and unique, and they need to be part of a larger architecture that works together. And my feeling is that I think transport will definitively be a part of that. I think that they're working the details of that architecture now and how that will work. Obviously, I think, that we're in a really phenomenal position to win significant parts of that given that we've already performed so well on tZERO, T1. We're already under contract for T2. So I think our delivered capabilities, flight heritage and the fact that we're the first time to launch every single time kind of speak to us being able to deliver that mission successfully. So I think it's going to be part of space data network. And I think that they're working that architecture now, and we feel like we're in a strong position to win that work.

I will now turn the call back to Dirk Wallinger for closing remarks.

Yes. So essentially, I just wanted to say thank you for everyone taking the time who've been -- those -- a lot of folks who have been following us for a little bit. I appreciate you learning more about what we're doing. Hopefully, you can see that we have really strong engagement, the ability to execute. We have a lot of missions in front of us, which we're excited to get into. We're seeing our base grow significantly from not only the kind of proliferated LEO national defense systems we've historically worked on. We're seeing new contracts with multiple classified customers. We're seeing large constellations being secured for commercial customers as well. So we're really excited about the future. We hope that you'll keep following along with us, and I appreciate everyone for taking the time. So thank you so much yes.

This concludes today's call. Thank you for attending. You may now disconnect.