Q3 2025 908 Devices Inc Earnings Call

Speaker #1: Ladies and gentlemen, thank you for joining us, and welcome to the 908 Devices Q3, 2025 financial results conference call. After today's prepared remarks, we will host a question-and-answer session.

Speaker #1: If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press *9 to raise your hand and *6 to unmute when it is your turn.

Speaker #1: I would now like to turn the call over to Barbara Russo and Vesta Relations. Please go ahead.

Speaker #2: Thank you. This morning, 908 Devices released financial results for the third quarter ended September 30th, 2025. If you've not received this news release, or if you'd like to be added to the company's distribution list, please send an email to ir@908devices.com.

Speaker #2: Joining me today from 908 is Kevin Knopp, Chief Executive Officer and Co-founder, and Joe Griffith, Chief Financial Officer. Before we begin, our commentary today will include the presentation of some non-GAAP financial measures.

Speaker #2: These measures should be considered as a supplement to and not a substitute for GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures can be found in today's earnings press release, which is available in the Investor Relations section of our website.

Speaker #2: Additionally, I'd like to remind you that management will make statements during this call. Better forward-looking statements within the meaning of federal securities laws. These statements involve material risk and uncertainties that could cause actual results or events to materially differ from those anticipated.

Speaker #2: Additional information regarding these risks and uncertainties appears in the section entitled "Forward-looking Statements" in the press release 908 Devices issued today. For a more complete list and description, please see the risk factors section of the company's annual report on Form 10-K for the year ended December 31, 2024, and in its other filings with the Securities and Exchange Commission.

Speaker #2: Except as required by law, 908 Devices disclaims any intention or obligation to update or revise any financial projections or forward-looking statements whether because of new information, future events, or otherwise.

Speaker #2: This conference call contains time-sensitive information. It is accurate, only as of the live broadcast, November 10th, 2025. With that, I'd like to turn the call over to Kevin.

Speaker #3: Thanks, Barbara. Good morning, and thank you for joining our third quarter 2025 earnings call. I'm incredibly proud of the momentum we've built and the progress our team is driving.

Speaker #3: We're executing the plan, sharpening our focus, and setting the stage for a stronger, more profitable 908 Devices. Revenue from continuing operations was $14 million, down 4% year over year and up 8% sequentially.

Speaker #3: Growth was driven this quarter by our FTIR devices, which accounted for 42% of revenue as we continue to see very strong demand for our Explorer gas identification device.

Speaker #3: Another revenue highlight was the US Coast Guard's purchase of 23 MX908 devices for narcotics interdiction efforts and hazardous threat detection. In total, we placed $176 devices during the quarter, growing our installed base 27% year over year to over 3,500 devices.

Speaker #3: Considering our year-to-date progress, revenues from continuing operations for the first nine months total $38.8 million, representing an increase of 16% year over year. Recurring revenue represented $36% of total revenue.

Speaker #3: Moreover, revenue from our US state and local channel for the first nine months represented $47% of total revenues. Growth in this channel and in our recurring revenues are key parts of our strategy to enhance predictability as this is more run-rate business versus large enterprise device deals, which can be lumpy.

Speaker #3: We also made excellent progress toward our adjusted EBITDA target for 2025. Our adjusted EBITDA loss was just $1.8 million for the third quarter, an improvement of more than $5 million year over year compared to our previously disclosed adjusted EBITDA for Q3 2024 prior to our transformation.

Speaker #3: And importantly, the adjusted EBITDA loss reduced by 53% quarter over quarter. I'd like to thank our team for their tremendous effort over the past few months as we realized these savings.

Speaker #3: This is our lowest adjusted EBITDA loss in our public company's history, demonstrating that the structural changes are working and providing a solid foundation for achieving our goal of becoming adjusted EBITDA positive in Q4.

Speaker #3: Overall, I'm pleased with our execution this quarter as we continue to build momentum towards our growth and profitability goals. While our transformed strategy is taking hold and our Q4 pipeline remains healthy, we continue to gauge the effects from the protracted US government shutdown in three areas of our business.

Speaker #3: First, demand from state and local customers remains strong, supported by multi-year federal grant programs that remain active. Second, international engagement and order flow remain solid, however, US export licensing requirements may extend delivery timing in some cases.

Speaker #3: Third, while smaller federal and defense orders have continued to move forward, larger awards have experienced delays due to constrained staffing and contracting authorities. We estimate that approximately $4 million of our Q4 revenue could be potentially impacted by delays in these areas.

Speaker #3: However, our base case remains that we are on track to achieve our full-year guidance, and we view any near-term impact as a timing issue, as our strategic alignment remains strong.

Speaker #3: We believe we are well positioned as appropriations advance and contracting activities stabilize as we address mission-critical priorities such as fentanyl interdiction, border security, and chemical threat preparedness.

Speaker #3: With that context, I'd like to turn to our progress on the three strategic focus areas that are propelling us forward and bringing our 908 Devices 2.0 vision to life.

Speaker #3: Our first focus is to increase adoption of our devices to address global threats to public health and safety. We equip frontline responders with rapid, reliable chemical identification tools that require minimal training and perform when it matters most.

Speaker #3: Our aim is to define the benchmark for advanced chemical detection in the field. A clear example is our Explorer device, which is setting the benchmark for advanced chemical detection of over 5,000 gases and vapors.

Speaker #3: Q3 was another record-setting quarter for Explorer shipments, achieving a 30% quarter-over-quarter increase in placements. We see Explorer as a strong supporter of our 2026 growth goals as it fills a critical gap in the market for hazardous material response.

Speaker #3: Firefighters and hazmat response teams have long used a photoionization detector, or PID, to detect the presence of a subset of gases and vapors. Knowing a gas is present is helpful but limited.

Speaker #3: Teams must then rely on their experience and educated guesswork to coordinate a response. Explorer changes the game. With Explorer, first responders can not only detect presence but, more importantly, identify and quantify thousands of unknown gases in seconds, informing decision-making and accelerating action.

Speaker #3: After encountering unknown gases in several recent incidents, the Contra Costa County Hazmat team in California purchased four Explorer devices. Helping to improve their on-scene response in facing similar situations, the Kansas State Fire Marshal's office purchased three Explorer devices, and the U.S. Marine Corps CBRNE Installation and Protection Program purchased 17 Explorer devices in the third quarter for potential hazmat incidents and military installations.

Speaker #3: While the majority of Explorer shipments in Q3 were in the US, the need is global. We are seeing early traction internationally in countries such as Italy, Finland, Poland, Taiwan, Korea, and Azerbaijan.

Speaker #3: We are excited to see the continued growth of this game-changing device as a hazmat team's around-the-world modernized their toolkit with advanced chemical detection and identification.

Speaker #3: Civilian hazmat response and military suburban defense missions are distinct but closely related, and our portfolio is purpose-built to serve both markets. As the future of incident response shifts towards autonomous ground robots and unmanned aerial system drones, we are extending our analytical platforms to operate on these emerging frontline technologies.

Speaker #3: To that end, we are collaborating with multiple partners to demonstrate capability, including most recently the Thales Group, a global leader in aerospace, defense, and security, on a next-generation unmanned ground vehicle, UGV, integration to enhance mission safety and improve situational awareness for operators in the field.

Speaker #3: As we build momentum with emerging autonomous defense tech integrations, we continue to advance key initiatives with our established partners, including our collaboration with Smith Detection on DOD's AVCAD program.

Speaker #3: We completed low-rate, initial production in late 2024, delivering over 100 component sets to support system builds and government testing in 2025. The program is now concluding a final field validation event, which, if if successful, is expected to trigger an RFP for a next phase.

Speaker #3: While timelines have been affected by program changes due to the government shutdown, we continue to expect clarity on next steps by year-end. We stand ready to support Smith Detection in the next phase of this important national defense effort.

Speaker #3: Our second focus area is advancing our next-gen analytical tools portfolio. At our core, we are an innovation-driven analytical instrumentation company. We're committed to the relentless pursuit of higher performance, breakthrough capabilities, and greater simplicity.

Speaker #3: In July, we announced the launch of VIPER, our handheld chemical analyzer that uniquely combines FJR and ROM and spectroscopy into a single seamless workflow, powered by our smart spectral processing technology.

Speaker #3: During the quarter, we shipped one of our first VIPER units to government intelligence agency in Southeast Asia. They selected VIPER to modernize their counter-narcotic and counter-terrorism capabilities.

Speaker #3: Upgrading from a competitor product, this initial unit serves as a pilot and has the potential to extend into a broader deployment across the country, establishing a new enterprise account.

Speaker #3: We also shipped several purchased VIPER units during the quarter to our channel partners, seeding awareness and engagement in the field. Last month, I attended our EMEA channels partner summit, where we had gathered more than 25 partners from across the region to review our latest innovations and compare notes on pipeline opportunities.

Speaker #3: The enthusiasm for VIPER was unmistakable, fueled by a clear shift in NATO preparedness and increased spending among nations along the alliance's eastern flank. We are encouraged that VIPER, like Explorer, will become a ramping contributor through 2026 and a key beneficiary of recent funding improvements.

Speaker #3: One of VIPER's differentiated capabilities garnering interest is its integration with our team leader software. Using VIPER's built-in cellular connectivity, or Wi-Fi, first responders can upload sample data on unknown solids and liquids in real time.

Speaker #3: Using the team leader app, incident commander leaders outside the hot zone can view this data to make rapid informed decisions on the response based on a clear understanding of the chemical threat.

Speaker #3: Team leaders currently integrated with all of our FJR devices and are on the roadmap for our mass spec devices. We already have more than 700 users on the team leader platform, and over the next year, we plan to add additional compelling functionality.

Speaker #3: And finally, our third focus area is strengthening our financial position and accelerating profitability. Under our 908 Devices 2.0 transformation, we set an ambitious target to achieve positive adjusted EBITDA by Q4 of this year, a goal we've been laser-focused on.

Speaker #3: As I covered at the outset, and as Joe will detail shortly, we're making meaningful progress toward that target. Our facility consolidation and operational scale-up in Danbury, Connecticut, are delivering improved productivity and cost structure.

Speaker #3: For example, our gross margin increased quarter over quarter and reached 58% on an adjusted basis, reflecting the first benefits of those efforts. Over the long term, we expect further margin uplift as we insource precision machining following our acquisition of the assets of the KAF manufacturing.

Speaker #3: Importantly, our products continue to command premium pricing due to their innovation and market differentiation, a trend we expect to maintain. And as we build more value in our team leader offering, we intend for it to become an incremental contributor to recurring revenue.

Speaker #3: Further, we concluded the quarter with approximately $112 million in cash and marketable securities, with no debt, providing a strong financial position and optionality as we scale.

Speaker #3: I'll now hand it over to Joe to review our third quarter financial performance.

Speaker #2: Thanks, Kevin. As a result of the sale of our desktop portfolio in the first quarter, the financials we are reporting today are for continuing operations only.

Speaker #2: All current and historical activity related to our desktops (including the gain on sale) is captured in a single discontinued operations line in our financial statements.

Speaker #2: Total revenue was $14 million for the third quarter 2025, down 4% from $14.5 million in the prior year period. Primarily driven by a smaller number of multi-unit MX908 device orders to U.S.

Speaker #2: federal and defense customers. Offset by continued momentum in our state and local end users. Handheld product and service revenue was $13.2 million for the third quarter 2025, down 5% from $13.9 million for the third quarter 2024.

Speaker #2: We shipped 176 devices in the third quarter, compared to 178 devices shipped in the third quarter of 2024. Bringing our install base to 3,512.

Speaker #2: As a reminder, there were approximately 700 FTIR devices placed prior to our acquisition of Red Wave. Including these units, our product install base was greater than 4,200 exiting the third quarter.

Speaker #2: As expected, program product and service revenue was not material in either the third quarter of 2025 or in 2024. We are not assuming any meaningful revenue contribution from the AVCAD program in 2025.

Speaker #2: As we completed the initial low-rate production deliveries in Q3 2024 and are preparing for the next phase and potential ramp in 2026. OEM and funded partnership revenue was $0.8 million for the third quarter 2025, compared to $0.5 million in the prior year period.

Adjusted ibida for the third quarter of 2025 was a loss of 1.8 million compared to a loss of 2.7 million. In the prior year, period representing a 32% year-over-year reduction and a 53% quarter-over-quarter reduction.

The significant Improvement was related to our aggressive cost initiatives resulting in reduced operating expenses across the board, including facilities R&D costs, and professional fees.

As we enter the fourth quarter, we will continue to leverage. The structural changes to drive positive adjusted Deepa with our scale and projected High Teens Revenue growth.

We ended the third quarter 2025 with 112.1 million in cash. Cash equivalents and marketable securities with no debt outstanding.

We consume approximately 6.5 million of cash in the third quarter of 2025.

The usage was primarily related to working capital and supporting our operations, but also included the 2 million used for our asset acquisition of KF.

As we noted last quarter, the combination of proceeds, from the desktop, portfolio, sale discipline cost, actions and durable growth, Catalyst for 2025, and beyond reinforces our confidence, in sustaining a healthy, cash balance, through our transition to profitability.

Looking at 2025, we continue to expect revenue from continuing operations.

To be in the range of 54 to 56 million, representing growth of 13 to 17% over the full year, 2024 revenue from continuing operations.

Our guidance range includes the following assumptions first. We expect handheld product and service Revenue to grow 16 to 20% year-over-year, Which equates to a range of 51.5 million to 53.5 million.

The $500k decrease reflects the funding-related pause and service coverage for our defense customer, as previously mentioned.

Second, we now expect OEM and funded Partnerships including contract Revenue to be approximately 2.5 million. The 500k increase is mainly based on third, quarter performance and the inclusion of revenues from the KF acquisition.

And third, a state of all year, we are not assuming any meaningful Revenue contribution from the US Department of Defense afcad program in 2025 as we are preparing for a potential, next phase and ramp in 2026.

During the quarter, our commercial team made strong progress in advancing large enterprise opportunities across both U.S. and international accounts.

We're also encouraged by the early momentum with Viper.

Where we now have secured more than 35 units for Q4 shipment, the state, local and international customers.

Securing a few of the larger 20 plus Enterprise opportunities in our pipeline is Central to achieving our fourth quarter, Revenue expectations.

Our expectations assumed that the government resumes normal contracting and operations this quarter.

Our operations are Nimble, we build to forecasts. We have the inventory and we are able to fulfill most orders as received right through the last days of the year.

Moving down the P&L, we continue to expect adjusted gross margins to be in the mid to high 50s range for the full year 2025, with further opportunity to expand in 2026.

With an adjusted gross margin of 56% for the 9-month ended September 30th 2025. We remain confident in our ability to deliver on our expectations for the full year.

When we continue to target adjusted debit del positivity in Q4 of this year, supported by our Q4 revenue projection, anticipated mix and resulting gross margin, and lower operating costs following our portfolio, Dennis' chair and facility consolidation.

at this point, I would like to turn the call back to Kevin

Fence Awards and creates a steadier, Cadence of orders across a more distributed customer base.

Further, we deliver our best adjusted EBITDA results. Since our IPO, we have reflected disciplined execution, cost control, and continued progress towards profitability with a solid balance sheet and strong year-to-date revenue growth. We are optimistic about achieving positive adjusted EBITDA. In the fourth quarter, we're confident in our trajectory and the foundation we're building for sustained growth in 2026 and beyond. Thank you for your continued interest in 908 Devices. We look forward to updating you on our progress next quarter. With that, let's open it up for questions.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please raise your hand now.

If you have dialed in to today's call, please press star 9 on your telephone keypad, to raise your hand and star 6 on your telephone keypad to unmute when it is your turn. Please stand by while we compile the Q&A roster.

You are. First question comes from the line of puny suda with lying. Please go ahead.

Yeah, hi guys. Uh, thanks for taking my questions. Um, so far Swan, uh, clarification on the fourth on the 4 million. Um, you know, I just wanted to make sure you're accounting for that in the full year guide. If you could confirm that and then if that was to come in, uh, later, um, uh, then expected then, is this going to be the first? Is it

Is going to be a contribution to the first quarter, 26 revenue. And then if I could follow up for the 26th. Um uh, are you expecting uh, 20% growth or could this be more than 25% growth year over year in 2016?

Sure. Absolutely. So I guess let me uh,

Explain it this way, for our Q4 guidance, it includes the runway business and the larger Enterprise orders. The total to about 60-ish units, maybe approximately 3 million. You know, we have the pipeline of those. Large Enterprise opportunities for Q4 spanning, the US, Federal us defense, and international accounts.

We do have greater than 3 million of high probability Enterprise opportunities from those US Federal and defense customers. That are held up waiting for the US government to get back to business.

Additionally, we also have about a million international orders that require export license applications. These are moving, but they're slower than normal and require an expedite request with the shutdown.

You know, to deliver on our guidance, we are assuming the government returns to normalize operations in the quarter.

And we can land and ship these before your end, you know, we build divorce, we have the inventory and we can ship right up through uh the end of the day, the last days of the year.

uh, we do have sizable additional sizable Enterprise opportunities for international customers, progressing, towards closure, some require export license and some do not

Um, further, we have seen our state and local channel overperform our expectations all year, and we're very pleased with the Viper traction to date. We now have more than 35 units in hand for Q4 shipment, representing about 15% of our Q4.

so 4 million revenue and our guidance, it could be impacted if the government is not returned to normal by year end, but we will be looking to leverage other opportunities in our pipeline to mitigate

And importantly, this is a timing thing. These opportunities do not um do not go away and carry over whether in q1 or early in 2026. Another way I guess to read this is that if the government was fully back to work and operating normally you'd probably be hearing increased confidence to the high end or even higher in today's call.

Got it. That's very helpful, Joe. Um, and then on the have CAD program and the coast got, I mean a coast guard order. Um, could you update us? Um, how should we think about abcande? Um, uh, in 26? Is this more first half versus the second half and then on the Coast Guard order of 23 MX 908 and correct me if I'm wrong on that, when do you expect that to be in the revenue? Thank you.

Yeah, the Coast Guard was in our shipments for Q3, so I was exciting to get that that key win.

A meaningful growth driver and and to scale up and uh to have have a nice runway for us over potentially a 5 to 7 year Horizon. So um as we mentioned before on aad Smith is working through kind of a handful of small incremental improvements and and that was the goal to demonstrate in this field test. And and we'll be looking for uh that validation that that it has occurred. Uh the scientist in me. I I remain very encouraged about where we're at. Uh, because the detection side of it is really so impressive performance levels. I had to be hit and and were doing that. So. Um and with the new Administration you know, certainly there's there's changes in the the Contracting. So could there be an acceleration? Could there be a delay probably equally or possible on that? Uh, but at the moment I think we've got good good momentum and they're coming up to a decision point that we should get those next steps Clarity. So from a 2026. Yeah, I think it's abcande creates its 1 of the levers, or, or catalysts for growth. There's the opportunity as we learn at the end of the year that I can contribute to that 20% product growth, uh, that will continue to evaluate and

talk to as we get into March.

Got it. Okay, helpful guys. Thank you. You're welcome. Bye.

Your next question comes from the line of Matt LaRue with William Blair. Please go ahead.

Matt, a reminder to please unmute yourself by clicking the unmute button in the bottom left corner.

Okay, can you hear me, okay?

Yes, we can hear you, Matt? Okay. Fair enough. Um, so Joe just wanted to ask on, um, just to give a Break, Even This quarterly given the the government shutdown and and a can, you know, some some moving parts that are are big in size in terms of the Topline, just the sensitivities around hitting that number and and maybe even more importantly, as you think about taking through the pnl performance into 2026? Do you think once you hit the just break, even the, you know, sort of remain at or above that level or, you know, given some of the first step for second half spend and cash Dynamics could you sort of have a you know, 2 steps forward, 1, step back and kind of uh you know path from here.

Got it. Yeah. From a sensitivity perspective you know the 4 million in a potential risk it would be impactful you know if we don't land the 3 million or so in high probability orders, anticipated from those Federal and defense customers and maybe the million dollars that need to export licenses then unless we can partially offset and get to the low end of our Revenue range, it will be a challenge, you know, it's hard to offset the gross margin loss and we need to be at the low end really to from the range to achieve our Target. We'll look for ways to minimize the revenue risks, uh, but we do need the scale to get to our Q4 adjusted ibida, positivity goal.

So I mean just to reiterate a bit, you know, we are holding our Revenue guidance, steady and our base case which is the 54 to 56 million for the year. And a minimum will need to be at that low end easier of Q4 revenues are near the midpoint of that range or even the higher. But at least at the minimum the adjusted gross margins in the mid to high 50s that we've been talking about and on the Q4 Opex, excluding non-cash stock comp and intangibles and call it 11 million range. Not far off from where we were in Q3 really benefiting from the impact of the facility transition and other cost savings. We've done. So as you might expect, you know, of those factors driving positive. Adjusted Ebon Q4 revenues are the most critical and crucial. And as we think about 26 and adjusted ebita, you know, be working towards getting there on a full year adjusted debit, uh, you know, there is seasonality. So, from a revenue perspective, I would expect it to flip back to negative earlier in the year if we're not at the same scale as Q4. And I think our history has shown that there is, you know, a ramp in the back half. Typically,

Uh, on the Adjust City button.

Okay, great. And then Kevin, you know, 1 of the 3 growth channels for next year is the next gen.

Uh, MX. And uh, you know, just as you now, get closer to that replacement cycle, getting going, just kind of curious updated thoughts on uh, that opportunity and and to the extent, you you shared any of the new features or form factor with customers, you know feedback and how that's kind of linked into your excitement for the product launch.

Uh, teams working, uh, working on that program aggressively and and uh, very encouraging. I would say improvements there. But, you know, again, we've got a, a very disruptive product in terms of no direct competition with our current MX. So we'll work through the timings of that launch, but we still expect it in 2026. And, and again, explore and Viper really been doing well. And was part of the thesis of the Redway acquisition, of course. And so, we're super excited, uh, for those contributions as well.

All right. Thank you.

Your next question comes from the line of Brendan Smith with TD Cowen. Brendan, a reminder to press *6 on your telephone keypad in order to unmute.

Great. Thanks for taking the questions, guys. Can you hear me? Okay? Yep.

Hello. Hello. Okay.

So uh, yeah. So maybe just putting a shutdown aside just the the time being I wanted to ask a little bit more about uh, and I fully appreciate it. It's still early but just where you're seeing. Um, and expecting to see kind of the most interesting Viper so far. Uh and maybe how we should think about the launch ramp of Viper relative to kind of your expected growth trajectory for the earlier agent devices. Uh, maybe just, if you would expect any potential cannibalization, just of the earlier, J growth trajectory as Viper gets its legs. Or if you're really expecting, you know, some of the Target customers could continue to persist for both independently.

Yeah, no. Great question. I I think, uh, Viper were were really, really pleased with that last quarter. We highlighted that we expected Viper to be a small contributor in Q4. Um, and then Rising contributor in 2026. Uh, in the third quarter, we, we did ship that first Viper, good, good feedback on that another handful or so that went out, uh, for a demo unit to our partners that are that are working today and evangelize that product, um, really excited about all of the all about what we're hearing there and that team leader connection and and as we reported today, there's a meaningful amount 35 or so uh, that are on deck for Q4 shipment. So I think the takeaway is that the, the engagement is showing great early signs. And, and that we do see Viper playing a, a good role in supporting our growth goals for 2026 from a cannibalization. It, it really doesn't, uh, impact our our MX. It's a complimentary product. It's also complimentary uh, in use case with our other other other products on the ftir side. So, you know,

We think this is just great to have in in the toolbox and and right now it's uh, seems to be uh, being validated that way. So we remain excited about it.

Okay, great thanks. Um, and then maybe on on team leader that you mentioned, maybe just what our kind of the the next steps there in development and um thoughts on maybe a broader role out as as that gets, you know, integrated a little bit more um just give me help us understand a little bit more, how you're thinking about potentially monetizing that aspect of the system moving forward and maybe when

I could start to factor in.

Yeah, absolutely. So team leader is a an application software, that hicks, that connects to all of our FTR devices and then soon our Mass Effect device and it allows, uh, people remotely to, to see what's going on with the unit, uh, location information. And we're starting to add more and more. What we think is compelling features and the Fleet Management perspective. So, you can understand where each of the devices, sit software training, things of that nature. And as we do that, and that roadmap, uh, we think of of these features is pretty compelling. Yes. The the value of that and its contribution, we expect to be incremental to our recurring Revenue. So, uh, you may know some large caps in the gas detection space and and saw some more medium cap device, uh, out there in the gas detection, space companies. Um, do see that uh working well for them in, in other segments of the gas detection market. So, you know, I think it's early days here. Uh, but we see a growing contribution as we go over time. With that product. Yep.

Great. Thank you.

A reminder, if you would like to ask a question, please raise your hand. Now, if you have dialed into today's call, please press star 9, to raise your hand and star, 6 to unmute

Our next question comes from the line of Dan Arias with stifel please go ahead.

Hey, good morning guys. Thank you. Kevin or Joe anything that you guys would consider a risk when it comes to

production capabilities or supply chain Etc, on full abcande fullfillment. The only reason I ask is because you have a bigger portfolio now more balls in the air. So just sort of curious if there's anything that you think is worth calling out when it comes to scale up capabilities that you need or just, you know, sort of requires some particular attention.

Third quarter completely, uh, in Danbury Connecticut, uh, that includes our MX 9008 where those core components and subsystems are in common uh with many of the elements of the abcande product. So we feel good about it. That we've got a nice base there. Uh we feel good about it. That we can handle some of the Machining requirements from where we're set to build our pumps at scale. Uh, from both both the the KF Precision Machining asset acquisition. And importantly, the Machining capabilities that we have here in the, in the Boston area. So not nothing of note there. I think we really stand at ready and these programs take time. So you do get visibility into Revenue ramps or unit volume ramps. Um, so I I would expect that uh as we get clarity as we anticipate over the the the last few months here, a couple months of of the year um that will help us prepare for what their intended volumes and and shipment and and planets.

Yep. Okay. No, I don't expect any supply chain problems or ramp abilities.

Yeah, great to hear. Okay um and then Joe maybe just to follow up on the shutdown Dynamics. If we do move past the shutdown here and you get the confidence in 4, q Revenue recognition, that you mentioned, does it stand to reason that the first half of 2026 revenues, that might be dependent on Business Development activity? That you should be taking place now. Um, is, is that still sounding good? Or is there some residual timing risk? Um, when you just think about the first quarter or the second quarter of the calendar year? I mean I know we have

Sign the layout next year, right? Just trying to make sure that we sort of fully round out the impact of the government stuff here. Mhm. Yeah. In many ways, with with the shutdown, our sales team is kind of cranking along business as usual. Um, most of them are still around. It's a lot of the Contracting folks. So continue to work the pipeline in short term and longer term, uh, opportunities, across the Enterprise, uh, portfolio. So, uh, I do see this as a timing issue and a bit of a pause. But, um, yeah. And I, I think I would just add to that. I mean, and it is a unprecedented time there. Certainly, we're encouraged by the, the news, over the weekend of of government progress on that. And we, we tried to to paint it as a, as a possibility here on, on the, on the impacts that we're continuously gauging. But I, I would clarify that it's probably not a black and white situation. As as we called out, you kind of have greater than 3 million dollars of these high probability Enterprise orders in the US fed, defense customer bucket, uh, that are held up. But each have a shade of gray, you know, some of these uh can can move.

Efficiently in the continuing resolution. Uh, some of these could move and are even when it's completely shut down, uh, but there's other dynamics that we're always trying to get on top of, for instance, it some of our opportunities use on them money, but if the government is shut down, some of that can be redirected temporarily, uh, to be used to, to keep the lights on in other areas. So all of these types of issues, but as we work through each, it's not a black and white situation. Uh, but yeah, it certainly feel good about the the pipeline and

And they would, uh, likely manifest itself. If that were to happen, the ones that slip were would be into 2026. But as Joe pointed out, I mean really, the good news is that we build vanilla boxes, right? We're building C's products we build to forecast. Uh, we have the inventory of them based upon that and and we can deliver all the way up through the last days of the year. So it's really about the government call it returning to normal operations. As Joe said, we're actively engaged with customers. Many of our customers are still there, but maybe they're Contracting colleagues, are are missing or or there's another priority during this more limited resource time. But, uh, yeah. We remain, uh, encouraged about the, the future, and how we're aligned to the Appropriations that we anticipate here, hopefully, in days, in, for some of the for some of the branches that we're hearing about

Yep. Fingers crossed. Okay, thank you very much.

There are no further questions at this time. I will now turn the call back to Kevin Knopp for closing remarks.

Yes, thank you very much. Thank you for joining our, our Q3 call, and we appreciate uh your your interest in 9008. And thank you have a great day.

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