Q3 2026 Calian Group Ltd Earnings Call

August 13, 2026

Operator: Good day, and thank you for standing by. Welcome to the Calian Group Q3 2026 earnings conference call. At this time, all participants are on listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference will be recorded. I will now hand the conference over to your first speaker today, Jennifer McCaughey, Director of Investor Relations. Please go ahead.

Operator: Good day, and thank you for standing by. Welcome to the Calian Group Q3 2026 earnings conference call. At this time, all participants are on listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference will be recorded. I will now hand the conference over to your first speaker today, Jennifer McCaughey, Director of Investor Relations. Please go ahead.

Speaker #1: Good day, and thank you for standing by. Welcome to the Calian Group Q3 2026 earnings conference call. At this time, all participants are in listen-only mode.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1-1 on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To address your question, please press star 11 again. Please be advised that today's conference is being recorded.

Speaker #1: I would like to hand the conference over to your first speaker today, Jennifer McCulley, Director of Investor Relations. Please go ahead.

Speaker #2: Thank you, Marvin, and good morning, everyone. Thank you for joining us for Calian's Q3 2026 conference call. Presenting this morning are Patrick Huston, Chief Executive Officer, and Will Magic, Acting CFO.

Jennifer McCaughey: Thank you, Marvin, and good morning, everyone. Thank you for joining us for Calian's Q3 2026 conference call. Presenting this morning are Patrick Houston, Chief Executive Officer, and Will Majic, Acting CFO. They will walk you through our Q3 results, provide insight into the performance of our various businesses, and share our outlook for the remainder of the year. As noted on slide 2, please be advised that certain information discussed today is forward-looking and subject to important risks and uncertainties. The results predicted in these statements may be materially different from actual results. As a reminder, all amounts are expressed in Canadian dollars except as otherwise specified. With that, let me turn the call over to Patrick.

Jennifer McCaughey: Thank you, Marvin, and good morning, everyone. Thank you for joining us for Calian's Q3 2026 conference call. Presenting this morning are Patrick Houston, Chief Executive Officer, and Will Majic, Acting CFO. They will walk you through our Q3 results, provide insight into the performance of our various businesses, and share our outlook for the remainder of the year. As noted on slide two, please be advised that certain information discussed today is forward-looking and subject to important risks and uncertainties. The results predicted in these statements may be materially different from actual results. As a reminder, all amounts are expressed in Canadian dollars except as otherwise specified. With that, let me turn the call over to Patrick.

Speaker #2: They will walk you through our Q3 results, provide insight into the performance of our various businesses, and share our outlook for the remainder of the year.

Speaker #2: As noted on Slide 2, please be advised that certain information discussed today is forward-looking and subject to important risks and uncertainties. The results predicted in these statements may be materially different from actual results.

Speaker #2: As a reminder, all amounts are expressed in Canadian dollars, except as otherwise specified. With that, let me turn the call over to Patrick.

Speaker #3: Thank you, Jennifer, and good morning. We delivered an exceptional Q3, achieving year-over-year growth that significantly exceeded any prior Q3 performance. Importantly, this growth was delivered from a meaningful, larger revenue base, making the magnitude of the results that much more important.

Patrick Houston: Thank you, Jennifer, and good morning. We delivered an exceptional Q3, achieving year-over-year growth that significantly exceeded any prior Q3 performance. Importantly, this growth was delivered from a meaningful larger revenue base, making the magnitude of the results that much more important. Revenue grew 20% year-over-year, including 16% organically, driven by the continued strength of our defense and space solutions portfolio and strongest results from essential industries. This top-line growth translated into significant operating leverage, with adjusted EBITDA growing 35%, meaningfully outpacing revenue growth. The result reflects the combined benefits of higher volumes, stronger execution, and a more focused and efficient operating model. We secured CAD 168 million in new contract signings, bringing our year-to-date total to CAD 660 million.

Speaker #3: Revenue grew 20% year over year, including 16% organically, driven by the continued strength of our defense and space solutions portfolio, and strongest results from essential industries.

Speaker #3: This top-line growth translated into significant operating leverage, with adjusted EBITDA growing 35%, meaningfully outpacing revenue growth. The result reflects the combined benefits of higher volumes, stronger execution, and a more focused and efficient operating model.

Speaker #3: We secured $168 million in new contracts signings, bringing our year-to-date total to $660 million. We also recently announced a 15-year agreement valued at close to $300 million, with Raytheon UK, a landmark contract that reflects the trust of our defense partners, place in our capabilities.

Patrick Houston: We also recently announced a 15-year agreement valued at close to CAD 300 million with Raytheon UK, a landmark contract that reflects the trust of our defense partners placed in our capabilities. This puts us on track for a second consecutive year of bookings exceeding CAD 1 billion. Taking all these transactions into account, our pro forma backlog approaches CAD 1.6 billion, with approximately CAD 1.3 billion of that in defense. Beyond strong financial performance and strong signings, we have also continued to take steps to strengthen our portfolio. At the end of June, we entered into an agreement to acquire Galaxy Broadband, further strengthening our portfolio in areas closely aligned with our strategic priorities. With our Q4 supported by strong fundamentals and a growing backlog, we have built a compelling foundation to deploy additional capital and drive sustainable long-term growth. Now a few words on our operations.

Speaker #3: This puts us on track for a second consecutive year of bookings exceeding $1 billion. Taking all these transactions into account, our proforma backlog approaches $1.6 billion, with approximately $1.3 billion of that in defense.

Speaker #3: Beyond strong financial performance and strong signings, we've also continued to take steps to strengthen our portfolio. At the end of June, we entered into an agreement to acquire Galaxy Broadband, further strengthening our portfolio in areas closely aligned with our strategic priorities.

Speaker #3: With our fourth consecutive call supported by strong fundamentals, and a growing backlog, we have built a compelling foundation to deploy additional capital and drive sustainable long-term growth.

Speaker #3: Now, a few words on our operations. Let me begin with defense and space. Our defense and space segment continues to perform exceptionally well. The results reflect both discipline execution against our long-term strategy and a significant tailwinds across our end markets.

Patrick Houston: Let me begin with Defense and Space. Our Defense and Space segment continues to perform exceptionally well. The results reflect both discipline execution against our long-term strategy and the significant tailwinds across our end markets. In Q3, the segment delivered 20% revenue growth. Nearly all of it was organic. Approximately half of that organic growth came from our technology solutions across both defense and space. Importantly, this performance is not simply a function of favorable market conditions. It reflects deliberate investments we have made to strengthen and expand our product capabilities, and those investments are now translating into meaningful growth. The adjusted top-line performance translated into 25% year-over-year growth in adjusted EBITDA. I would like to take a moment to provide a bit more color on the two recent strategic developments I mentioned earlier. Our 15-year, CAD 300 million contract with Raytheon and our agreement to acquire Galaxy Broadband.

Speaker #3: In Q3, the segment delivered 20% revenue growth, nearly all of it was organic. Approximately half of that organic growth came from our technology solutions of both across both defense and space.

Speaker #3: Importantly, this performance is not simply a function of favorable market conditions. It reflects deliberate investments we've made to strengthen and expand our product capabilities, and those investments are now translating into meaningful growth.

Speaker #3: The adjusted top-line performance translated into 25% year-over-year growth in adjusted EBITDA. I'd like to take a moment to provide a bit more color on the two recent strategic developments I mentioned earlier.

Speaker #3: Our 15-year $300 million contract with Raytheon and our agreement to acquire Galaxy Broadband. On August 11, we announced a 15-year agreement with Raytheon UK to support the British Army's collective training program.

Patrick Houston: On 11 August, we announced a 15-year agreement with Raytheon UK to support the British Army's collective training program. It is set to begin in October 2026, following the conclusion of the current Project Meridian contract. It provides nearly CAD 300 million of contracted base revenue over the term, with an additional variable component of comparable potential consistent with the structure of our existing agreement. This is one of Calian's largest defense training programs, and as the renewal deepens our commitment to allied military readiness across the UK and Europe. It is a strong validation of the trust our defense partners place in Calian's expertise. On 25 June, we announced a definitive purchase agreement to acquire Galaxy Broadband Communications, a Canadian leader in satellite communications and remote connectivity solutions. Galaxy is a highly strategic fit for Calian.

Speaker #3: It's set to begin in October 2026, following the conclusion of the current Project Numidian contract. It provides nearly $300 million of contracted base revenue over the term, with an additional variable component of comparable potential, consistent with the structure of our existing agreement.

Speaker #3: This is one of Calian's largest defense training programs, and this renewal deepens our commitment to allied military readiness across the UK and Europe.

Speaker #3: It's a strong validation of the trust our defense partners place in Calian's expertise. On June 25, we announced a definitive purchase agreement to acquire Galaxy Broadband Communications, a Canadian leader in satellite communications and remote connectivity solutions.

Speaker #3: Galaxy is a highly strategic fit for Calian. The company has built a strong reputation delivering reliable connectivity to government, defense, and critical industry, in remote communities across Canada.

Patrick Houston: The company has built a strong reputation delivering reliable connectivity to government, defense, and critical industry in remote communities across Canada. Its satellite communications and multi-orbit expertise directly complements our existing capabilities while significantly expanding our ability to support customers operating in complex and remote environments, including the Arctic. On 11 August, Crown Capital's debenture holders approved the transaction, clearing an important milestone towards closing. We expect the acquisition to close in the coming weeks, subject to the completion of the remaining closing conditions. Beyond our core operations, we are taking deliberate steps to expand Calian's role as an innovation partner, bringing together advanced technology, deep integration expertise, and real-world operational experience to solve some of our customers' most complex challenges. Three announcements this quarter, I think, that reflect that ambition.

Speaker #3: Its satellite communications and multi-orbit expertise directly complement our existing capabilities, while significantly expanding our ability to support customers operating in complex and remote environments, including the Arctic.

Speaker #3: On August 11, Crown Capital debenture holders approved the transaction, clearing an important milestone toward closing. We expect the acquisition to close in the coming weeks, subject to the completion of the remaining closing conditions.

Speaker #3: Beyond our core operations, we're taking deliberate steps to expand Calian's role as an innovation partner, bringing together advanced technology, deep integration expertise, and real-world operational experience to solve some of our customers' most complex challenges.

Speaker #3: Three announcements this quarter I think that reflect that ambition. First, we launched Athora, a sovereign system of systems interoperability and orchestration platform built to accelerate military readiness and capability integration across C5 ISRT environments, marking Calian's evolution from service delivery to purpose-built defense platforms.

Patrick Houston: First, we launched ATHORA, a sovereign system-of-systems interoperability and orchestration platform built to accelerate military readiness and capability integration across C5ISR environments, marking Calian's evolution from service delivery to purpose-built defense platforms. The second I would mention is the announcement of a cooperation with Cohere to evaluate and integrate sovereign AI solutions in defense environments, positioning Calian at the forefront of responsible AI adoption for our defense customers. Third, we announced the formation of Calian's first integrated Arctic maritime security consortium, uniting six Atlantic organizations to deliver end-to-end maritime capability in support of Canada's evolving defense priorities. Taken together, these initiatives are more than a series of announcements. They are deliberate building blocks in our strategy.

Speaker #3: The second I'd mention is the announcement of a collaboration with Cohere to evaluate and integrate sovereign AI solutions in defense environments, positioning Calian at the forefront of responsible AI adoption for our defense customers.

Speaker #3: And third, we announced the formation of Calian's first integrated Arctic Maritime Security Consortium, uniting six Atlantic organizations to deliver end-to-end maritime capability in support of Canada's evolving defense priorities.

Speaker #3: Taken together, these initiatives are more than a series of announcements. They're deliberate building blocks in our strategy. We're expanding Calian's role in the defense ecosystem and positioning the company to compete for and win larger and more complex opportunities as Canada and its allies accelerate investment in next-generation defense and security capabilities.

Patrick Houston: We are expanding Calian's role in the defense ecosystem and positioning the company to compete for and win larger and more complex opportunities as Canada and its allies accelerate investment in next-generation defense and security capabilities. The defense and space segment is performing at a high level, and we believe we are still in the early stages of the opportunity ahead. Strong organic growth, landmark contract wins, the contribution from strategic acquisitions, and a growing innovation portfolio give us increasing confidence in the long-term outlook. We are investing to match the scale of the opportunity and expect defense and space to remain a significant driver of profitable growth for Calian in the years to come. Let me turn to essential industries. Our essential industries segment continues to build meaningful positive momentum with improvements across both revenue and margin.

Speaker #3: The defense and space segment is performing at a high level, and we believe we're still in the early stages of the opportunity ahead. Strong organic growth, landmark contract wins, the contribution from strategic acquisitions, and a growing innovation portfolio give us increasing confidence in the long-term outlook.

Speaker #3: We are investing to match the scale of the opportunity and expect defense and space to remain a significant driver of profitable growth for Calian.

Speaker #3: In the years to come. Let me turn to essential industries. Our essential industries segment continues to build meaningful positive momentum. With improvements across both revenue and margin.

Speaker #3: This progress is being driven by strengthening market fundamentals, better execution across our teams, and the successful integration of acquired capabilities into the broader Calian platform.

Patrick Houston: This progress is being driven by strengthening market fundamentals, better execution across our teams, and the successful integration of acquired capability into the broader Calian platform. In Q3, revenue increased 20%, reflecting strong organic growth. What began as a modest start to the year has steadily strengthened. Organic revenue growth accelerated to the high single digits in Q2 and crossed into double digits in Q3. This trajectory reflects improving demand primarily across our US commercial business and nuclear services. On the acquisitive side, AMS has been a meaningful contributor to the quarter and has provided proof to be a strategic asset for this segment. It has meaningfully expanded our presence in the Arctic, a region of growing importance to our customers and to Canada more broadly, and provides a compelling platform to advance our longer-term strategy in this critical geography.

Speaker #3: In Q3, revenue increased 20%, reflecting strong organic growth. But began as a modest start to the year has steadily strengthened, organic revenue growth accelerated to the high single digits in Q2, and crossed into double digits in Q3.

Speaker #3: This trajectory reflects improving demand primarily across our US commercial business and nuclear services. On the acquisitive side, AMS has been a meaningful contributor to the quarter and has provided proof to be a strategic asset for this segment.

Speaker #3: It has meaningfully expanded our presence in the Arctic, a region of growing importance to our customers and to Canada more broadly. And provides a compelling platform to advance our longer-term strategy in this critical geography.

Speaker #3: On profitability, adjusted EBITDA increased 46% in Q3, with margins approaching 8%. On track with our target to exit FY26 in the high single digits.

Patrick Houston: On profitability, adjusted EBITDA increased 46% in Q3, with margins approaching 8%, on track with our target to exit FY26 in the high single digits. On a year-to-date basis, revenue increased 21% and adjusted EBITDA was up by 59%, demonstrating the operating leverage embedded in this business. Looking forward, I want to highlight several recent Canadian government sovereignty announcements that we believe are positive demand signals for this segment, specifically for our health and nuclear service businesses. On the health side, Canadian government has announced increased recruitment initiatives for the RCMP, CBSA, and other frontline public safety organizations. As these agencies work to expand their workforces and address staffing shortages, we expect this to translate into demand for our health services platform. Our national healthcare capabilities are well-positioned to support these agencies, and we see this as a durable long-term tailwind for the business.

Speaker #3: On a year-to-date basis, revenue increased 21% and adjusted EBITDA was up by 59%. Demonstrating the operating leverage embedded in this business. Looking forward, I want to highlight several recent Canadian government sovereignty announcements that we believe are positive demand signals for the segment, specifically for our health and nuclear service businesses.

Speaker #3: On the health side, Canadian government has announced increased recruitment initiatives for the RCMP, CBSA, and other frontline public service safety organizations. As these agencies work to expand their workforces and address staffing shortages, we expect this to translate into demand for our health services platform.

Speaker #3: Our national healthcare capabilities are well positioned to support these agencies, and we see this as a durable long-term tailwind for the business. On the nuclear side, Canada Canadian government's nuclear energy strategy, which includes plans to develop up to 10 new reactors over the next 15 years, represents a potentially transformative long-term opportunity for our nuclear services business.

Patrick Houston: On the nuclear side, Canadian government's nuclear energy strategy, which includes plans to develop up to 10 new reactors over the next 15 years, represents a potentially transformative long-term opportunity for our nuclear services business. The scale of investments contemplating this strategy is significant, and with our established expertise and deep industry relationships and proven capabilities in the nuclear sector, we believe Calian is exceptionally well-positioned to be a meaningful participant in supporting Canada's nuclear ambitions over the coming decade and beyond. I will now turn it over to Will to discuss Q3 financial results. Will?

Speaker #3: The scale of investment contemplated in this strategy is significant, and with our established expertise, deep industry relationships, and proven capabilities in the nuclear sector, we believe Calian is exceptionally well positioned to be a meaningful participant in supporting Canada's nuclear ambitions over the coming decade and beyond.

Speaker #3: I'll now turn over to Will to discuss Q3 financial results. Will?

Speaker #2: Thank you, Patrick. Our third-quarter results reflect what happens when disciplined execution meets a favorable market environment. Q3 was a record quarter, with double-digit revenue and adjusted EBITDA growth.

Will Majic: Thank you, Patrick. Our Q3 results reflect what happens when disciplined execution meets a favorable market environment. Q3 was a record quarter, with double-digit revenue and adjusted EBITDA growth, and organic growth at its highest level that we have seen in several years. Now, let me walk you through some of the highlights. Q3 revenues increased 20% to CAD 230 million, a record quarterly high, reflecting strong execution across both of our operating segments, Defense and Space and Essential Industries. Of this amount, acquisitive growth contributed approximately 4%, driven by the partial quarter contribution of AMS, which we closed in May 2025, and InField Scientific, which closed in October 2025. Organic growth was more compelling, delivering 16%, a double-digit performance that was driven across both segments and reflects the strong momentum we have been building in the H1 of this year.

Speaker #2: An organic growth at its highest level that we've seen in several years. Now, let me walk you through some of the highlights. Q3 revenues increased 20% to $230 million, a record quarterly high, reflecting strong execution across both of our operating segments: defense and space and essential industries.

Speaker #2: Of this amount, acquisitive growth contributed approximately 4%, driven by the partial quarter contribution of AMS, which we closed in May 2025, and Infield Scientific, which closed in October 2025.

Speaker #2: Organic growth was more compelling, delivering 16%—a double-digit performance that was driven across both segments and reflects the strong momentum we have been building in the first half of this year.

Speaker #2: At a high level, organic growth in the quarter was driven by stronger-than-expected demand for our technology solutions complemented by a timing benefit as a portion of the activity originally anticipated in Q4 was accelerated into Q3.

Will Majic: At a high level, organic growth in the quarter was driven by stronger than expected demand for our technology solutions, complemented by a timing benefit as a portion of the activity originally anticipated in Q4 was accelerated into Q3. In Defense and Space, the Canadian Department of National Defence was a key contributor again this quarter, deepening its reliance on our capabilities across operational readiness, IT and cyber, and in healthcare. This ongoing partnership reinforces our position as a trusted mission-critical partner. Our GNSS product portfolio also saw strong geographically diversified demand, a direct reflection of our targeted marketing efforts. In Essential Industries, our US commercial operations maintained the momentum built in the H1 of this year, achieving year-over-year growth for the third consecutive quarter, a clear validation of our turnaround strategy and the leadership who is driving it. Nuclear services also saw positive organic growth in the quarter.

Speaker #2: In defense and space, the Canadian National Defense was a key contributor again this quarter, deepening its reliance on our capabilities across operational readiness, IT and cyber, and in healthcare.

Speaker #2: This ongoing partnership reinforces our position as a trusted, mission-critical partner. Our GNSS product portfolio also saw strong, geographically diversified demand—a direct reflection of our targeted marketing efforts.

Speaker #2: In essential industries, our U.S. commercial operations maintain the momentum built in the first half of this year, achieving year-over-year growth for the third consecutive quarter.

Speaker #2: A clear validation of our turnaround strategy and the leadership who is driving it. Nuclear services also saw positive organic growth in the quarter. Stepping back, Q3 marked our fourth consecutive quarter of positive organic growth and our second consecutive quarter at double digits.

Will Majic: Stepping back, Q3 marks our fourth consecutive quarter of positive organic growth and our second consecutive quarter at double digits. Q3 gross profit increased by 17% to CAD 78 million as compared to CAD 67 million for the same period last year and represents a record Q3 high. This increase reflects revenue growth, changes in mix, and contributions from recent acquisitions. Q3 adjusted EBITDA increased 35% to CAD 26 million, significantly outpacing top-line revenue growth. This was driven by strong top-line performance, combined with the gradual pace at which investments in Europe were ramping, which tempered costs in the quarter. As a result, adjusted EBITDA margin reached 11.1%, up from the 9.9% for the same period last year. Turning to cash flow and capital deployment. That strong operational performance translated into the cash flow statement, reflecting our continued ability to generate and retain cash within the business.

Speaker #2: Q3 gross profit increased by 17% to $78 million, as compared to $67 million for the same period last year, and represents a record third quarter high.

Speaker #2: This increase reflects revenue growth, changes in mix, and contributions from recent acquisitions. Q3 adjusted EBITDA increased 35% to $26 million, significantly outpacing top-line revenue growth.

Speaker #2: This was driven by strong top-line performance combined with the gradual pace at which investments in Europe are ramping, which tempered costs in the quarter.

Speaker #2: And as a result, adjusted EBITDA margin reached 11.1%, up from the 9.9% for the same period last year. Turning to cash flow and capital deployment.

Speaker #2: That's strong operational performance translated into the cash flow statement, reflecting our continued ability to generate and retain cash within the business. In Q3, we generated $24 million in cash flow from operations, compared to $25 million for the same period last year.

Will Majic: In Q3, we generated CAD 24 million in cash flow from operations, compared to CAD 25 million for the same period last year. This slight year-over-year decrease is primarily attributable to higher working capital requirements, specifically an increase in accounts receivable, which offset the benefit of improved profitability. Let me walk you through the key working capital dynamics we experienced in the quarter. As we outlined in Q2, we made a deliberate short-term investment in working capital in order to capitalize on a period of heightened demand for technology solutions. That strategy played out as anticipated as we saw meaningful cash conversion of those receivables in Q3. However, at the same time, demand for technology solutions remained robust throughout the quarter, which led us to continue to extend working capital to capitalize on that growth. I want to be clear on the nature of this movement.

Speaker #2: This slight year-over-year decrease was primarily attributable to higher working capital requirements specifically an increase in accounts receivable, which offset the benefit of improved profitability.

Speaker #2: Let me walk you through the key working capital dynamics we experienced in the quarter. As we outlined in Q2, we made a deliberate short-term investment in working capital in order to capitalize on a period of heightened demand for technology solutions.

Speaker #2: That strategy played out as anticipated, as we saw meaningful cash conversion of those receivables in Q3. However, at the same time, demand for technology solutions remained robust throughout the quarter.

Speaker #2: Which led us to continue to extend working capital to capitalize on that growth. I want to be clear on the nature of this movement.

Speaker #2: This is entirely a revenue growth and timing dynamic. It is not structural. We are observing in the balance sheet is simply a short-term impact of the rapid demand we have been addressing.

Will Majic: This is entirely a revenue growth and timing dynamic. It is not structural. What you are observing in the balance sheet is simply a short-term impact of the rapid demand we have been addressing. Our DSO profile and customer credit quality remain consistent with prior quarters and remain very healthy. As we have communicated previously, we expect working capital to scale in line with revenue growth. Looking beyond these working capital dynamics, the underlying cash generation story is compelling. Operating free cash flow increased by 46% year over year to CAD 18 million, reflecting solid cash conversion at 69% of adjusted EBITDA. On a year-to-date basis, operating free cash flow increased 57% to CAD 55 million, with a cash conversion at 72%.

Speaker #2: Our DSO profile and customer credit quality remain consistent with with prior quarters, and remain very healthy. As we have communicated previously, we expect working capital to scale in line with revenue growth.

Speaker #2: Looking beyond these working capital dynamics, the underlying cash generation story is compelling. Operating free cash flow increased by 46% year-over-year to $18 million, reflecting solid cash conversion at 69% of adjusted EBITDA.

Speaker #2: On a year-to-date basis, operating free cash flow increased $57% to $55 million, with a cash conversion at $72%. These results demonstrate the quality of our earnings and the ability to generate meaningful cash from our from our core operations even as we continue to invest in growth and work through acquisition integrations.

Will Majic: These results demonstrate the quality of our earnings and the ability to generate meaningful cash from our core operations, even as we continue to invest in growth and work through our acquisition integrations. Optimizing working capital efficiency and sustaining strong free cash flow generation remain key priorities as we close out the year. Turning to capital deployment, during the quarter, we used cash on hand to support key investments and priorities. We funded CAD 3 million in capital expenditures, reinforcing our investment to ongoing growth initiatives, and returned CAD 3 million to shareholders through dividends. Share repurchases were not a priority this quarter. These actions are consistent with our balanced capital allocation framework, investing in the business to drive long-term value while maintaining a disciplined return of capital to shareholders.

Speaker #2: Optimizing working capital efficiency to sustaining strong free cash flow generation remain remain key priorities as we close out the year. Turning to capital deployment, during the quarter, we used cash on hand to support key investments and priorities.

Speaker #2: We funded $3 million in capital expenditures reinforcing our investment to ongoing growth initiatives and returned $3 million to shareholders through dividends. Share repurchases were not a priority this quarter.

Speaker #2: These actions are consistent with our balanced capital allocation framework, investing in the business to drive long-term value while maintaining a disciplined return of capital to shareholders.

Speaker #2: On the M&A front, while no transactions were closed in Q3, we expect to close the acquisition of Galaxy Broadband within the next few weeks.

Will Majic: On the M&A front, while no transactions were closed in Q3, we expect to close the acquisition of Galaxy Broadband within the next few weeks. Now let's take a look at the balance sheet. As of 30 June 2026, we had drawn CAD 141 million on our debt facility, reflecting a decrease of CAD 26 million from Q2. We closed the period with net debt of CAD 95 million, resulting in a net debt to adjusted EBITDA ratio of 0.9 times, providing us with flexibility to act decisively on near-term opportunities. With compelling growth dynamics across defense, space, nuclear, and health, our focus is squarely on capitalizing on the opportunities these markets present.

Speaker #2: Now, let's take a look at the balance sheet. As of June 30th, 2026, we had drawn $141 million on our debt facility reflecting a decrease of $26 million from Q2.

Speaker #2: We closed the period with net debt of $95 million resulting in a net debt to adjusted EBITDA ratio of 0.9 times providing us with flexibility to act decisively on near-term opportunities.

Speaker #2: With compelling growth dynamics across defense, space, nuclear, and health, our focus is squarely on capitalizing on the opportunities these markets present. To do that, we are taking a deliberate look at our capital structure to ensure it is aligned with our growth ambitions and we remain open to leveraging all available means to put capital to work where we see the greatest potential.

Will Majic: To do that, we are taking a deliberate look at our capital structure to ensure it is aligned with our growth ambitions, and we remain open to leveraging all available means to put capital to work where we see the greatest potential. Now let's turn to fiscal 2026 outlook. Our outlook for fiscal 2026 has strengthened again since last quarter, reflecting an encouraging upward trend since the start of this year. Our long-term growth targets remain unchanged, where we are targeting annual revenue growth of 10% to 15%, driven by a combination of organic expansion and strategic acquisitions. This is consistent with our historical track record, which stands at 12% revenue CAGR over the past decade. Consistent with that long-term framework, for fiscal 2026, we expect revenue growth in the mid-teens and adjusted EBITDA growth in the low 20% range.

Speaker #2: Now, let's turn to the fiscal '26 outlook. Our outlook for fiscal '26 has strengthened again since last quarter, reflecting an encouraging upward trend since the start of this year.

Speaker #2: Our long-term growth targets remain unchanged. We are targeting annual revenue growth of 10 to 15 percent, driven by a combination of organic expansion and strategic acquisitions.

Speaker #2: This is consistent with our historical track record, which stands at 12% revenue CAGR over the past decade. Consistent with that long-term framework, for fiscal '26, we expect revenue growth in the mid-teens and adjusted EBITDA growth in the low-20% range.

Speaker #2: This performance would represent another record year for Calian and further demonstrate our ability to translate top-line growth into even stronger earnings growth. Achieving these objectives and building the foundation for what comes next requires us to invest ahead of the opportunity.

Will Majic: This performance would represent another record year for Calian and further demonstrate our ability to translate top-line growth into even stronger earnings growth. Achieving these objectives and building the foundation for what comes next requires us to invest ahead of the opportunity. Winning in our target markets means showing up as a capable, well-resourced partner with the talent, infrastructure, and technology to execute at scale. We are making focused commitments in Europe and Canada to accelerate our product portfolios as well as position ourselves for larger opportunities.

Speaker #2: Winning in our target markets means showing up as a capable, well-resourced partner with the talent, infrastructure, and technology to execute at scale. We are making focused commitments in Europe and Canada to accelerate our product portfolios as well as position ourselves for larger opportunities.

Speaker #2: The pace of these investments will accelerate in Q4 and into fiscal ’27. From a capital deployment perspective, we expect working capital usage to track in line with revenue growth and should finish the year in the $15 to $17 million range.

Will Majic: The pace of these investments will accelerate in Q4 and into fiscal 2027. From a capital deployment perspective, we expect working capital usage to track in line with revenue growth and should finish the year in the CAD 15 million to CAD 17 million range. CapEx is anticipated to be slightly north of CAD 10 million, supporting both ongoing operations and targeted growth investments.

Speaker #2: CapEx is anticipated to be slightly north of $10 million, supporting both ongoing operations and targeted growth investments. Our dividend policy remains unchanged for the remainder of the fiscal year.

Will Majic: Our dividend policy remains unchanged for the remainder of the fiscal year. On the M&A front, note that as AMS reached its one-year anniversary in our portfolio, it will no longer be reflected as acquisitive growth beginning in Q4, and its results will be fully absorbed into our organic baseline. Now, turning to our near-term activity. We expect to close the acquisition of Galaxy Broadband within the next two weeks for an upfront payment of CAD 24 million. Given the timing, its contribution to Q4 will be modest. Combined with the earlier closing of InField Scientific, we will have deployed approximately CAD 35 million in upfront capital this year or roughly CAD 50 million inclusive of earn-outs.

Speaker #2: On the M&A front, note that as AMS reached its one-year anniversary in our portfolio, it will no longer be reflected as acquisitive growth beginning in Q4.

Speaker #2: And its results will be fully absorbed into our organic baseline. Now, turning to our near-term activity. We expect to close the acquisition of Galaxy Broadband within the next two weeks for an upfront payment of $24 million.

Speaker #2: Given the timing, its contribution to Q4 will be modest. Combined with the earlier closing of Infield Scientific, we will have deployed approximately $35 million in upfront capital this year or roughly $50 million inclusive of earn-outs.

Speaker #2: While our total capital deployment fell short of our initial ambitions, this was the result of several factors. Market conditions, timing, and above all else, our disciplined approach to ensuring we transact at the right targets at the right valuations.

Will Majic: While our total capital deployment fell short of our initial ambitions, this was the result of several factors: market conditions, timing, and above all else, our disciplined approach to ensuring we transact at the right targets at the right valuations. That said, we are actively working to increase the pace of acquisitions. Over the next 12 months, we see an opportunity to deploy capital more actively as we move with greater urgency to strengthen our capabilities and position the business for the opportunities ahead. To support this, we are continuously evaluating our capital structure to ensure we maintain the financial flexibility and liquidity needed to act decisively when the right opportunities present themselves. Our pipeline remains robust, with multiple active discussions underway and some in advanced stages. We are optimistic about completing additional strategic transactions in the coming quarters.

Speaker #2: That said, we are actively working to increase the pace of acquisitions. Over the next 12 months, we see an opportunity to deploy capital more actively as we move with greater urgency to strengthen our capabilities and position the business for the opportunities ahead.

Speaker #2: To support this, we are continuously evaluating our capital structure to ensure we maintain the financial flexibility and liquidity needed to act decisively when the right opportunities present themselves.

Speaker #2: Our pipeline remains robust, with multiple active discussions underway and some in advanced stages. We are optimistic about completing additional strategic transactions in the coming quarters.

Speaker #2: As we have previously communicated, M&A remains our highest capital deployment priority. We will continue to pursue targets at meaningfully expand our capabilities and broaden our market reach meaning transactions that we are confident will create long-term value for our shareholders.

Will Majic: As we have previously communicated, M&A remains our highest capital deployment priority. We will continue to pursue targets that meaningfully expand our capabilities and broaden our market reach, meaning transactions that we are confident will create long-term value for our shareholders. We remain open to resuming share buybacks on an opportunistic basis, subject to market conditions and our broader capital allocation framework. As always, our priority is to ensure capital is deployed where it can generate the greatest long-term value for our shareholders. To that end, we intend to renew our NCIB when it comes due at the end of this month, subject to the TSX approval. We view the annual renewal of the NCIB as a matter of course, ensuring this tool remains available to us should conditions make its use appropriate.

Speaker #2: We remain open to resuming share buybacks on an opportunistic basis subject to market conditions and our broader capital allocation framework. As always, our priority is to ensure capital is deployed where it can generate the greatest long-term value for our shareholders.

Speaker #2: And to that end, we intend to renew our NCIB when it comes due at the end of this month subject to the TSX approval.

Speaker #2: We view the annual renewal of the NCIB as a matter of course, ensuring this tool remains available to us should conditions make its use appropriate.

Speaker #2: In summary, we enter the final quarter of fiscal 26 with strong momentum, and a clear line of sight to a record year. Our financial position is strong, our approach to capital allocation is disciplined, and the opportunity ahead is significant.

Will Majic: In summary, we enter the final quarter of fiscal 2026 with strong momentum and a clear line of sight to a record year. Our financial position is strong, our approach to capital allocation is disciplined, and the opportunity ahead is significant. We are focused on delivering today while continuing to build the capabilities, scale, and our platform. I will now turn the call back over to Patrick for closing remarks. Patrick?

Speaker #2: We are focused on delivering today while continuing to build the capabilities, scale, and our platform. I will now turn the call back over to Patrick for closing remarks.

Speaker #2: Patrick.

Speaker #3: Thank you, Will. Before we take your questions, let me take a step back for a moment. Three quarters into the year, the results are compelling.

Patrick Houston: Thank you, Will. Before we take your questions, let me take a step back for a moment. Three quarters into the year, the results are compelling. Revenue is up 17%, organic growth at 11%, the strongest we have delivered in years. Adjusted EBITDA is up 41%, fourth consecutive quarter of record results, and each one delivered off a larger base than the last. The numbers are a reflection of our evolving strategy. What we are doing is repositioning Calian. We have concentrated our capital in mission-critical markets and moved from delivering services to building platforms. We have added capability where our customers are heading, the Arctic, sovereign AI, multi-orbit connectivity, and nuclear. We have anchored a 15-year relationship with Raytheon UK that extends our defense footprint well into the next decade.

Speaker #3: Revenue's up 17%, organic growth at 11%. The strongest we've delivered in years. Adjusted EBITDA's up 41%. Fourth consecutive quarter of record results. And each one delivered off a larger base than the last.

Speaker #3: The numbers are a reflection of our evolving strategy. What we're doing is repositioning Calian. We've concentrated our capital in mission-critical markets and moved from delivering services to building platforms.

Speaker #3: We've added capability where our customers are heading: the Arctic, sovereign AI, multi-orbit connectivity, and nuclear. We've anchored a 15-year relationship with Raytheon UK that extends our defense footprint well into the next decade.

Speaker #3: The result is a business with a proforma backlog approaching $1.6 billion and a pipeline of opportunities in front of it that is larger than anything we've seen in this company's history.

Patrick Houston: The result is a business with a pro forma backlog approaching CAD 1.6 billion and a pipeline of opportunities in front of it that is larger than anything we have seen in this company's history. That is why we are investing ahead of the curve. The demand signals in defense, nuclear, and health are not cyclical, but rather multi-year government-backed commitments. Our job is to be ready to compete for that work at scale, and we intend to be. Finally, I want to thank our employees across the globe. Records like these ones are not produced by markets, they are produced by people who execute quarter after quarter for customers who depend on them. Thank you. With that, operator, we would be happy to take questions. I will pass it over to Marvin, who will lead the session.

Speaker #3: That is why we're investing ahead of the curve. The demand signals in defense, nuclear, and health are not cyclical, but rather multi-year, government-backed commitments.

Speaker #3: Our job is to be ready to compete for that work at scale and we intend to be. Finally, I want to thank our employees across the globe records like these ones are not produced by markets.

Speaker #3: They're produced by people who execute quarter after quarter for customers who depend on them. Thank you. With that, operator, we'd be happy to take questions.

Speaker #3: And I'll pass it over to Marvin who will lead the session.

Speaker #1: Thank you. At this time, we'll conduct a question and answer session. As a reminder, to ask a question, you'll need to press star 11 on your telephone and wait for your name to be announced.

Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please standby while we compile the Q&A roster. Our first question comes to the line of Nicholas Boychuk of ATB Cormark Capital Markets. Your line is now open.

Speaker #1: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And our first question concerns the line of Nicholas Boychuk of ATB Cormorant Capital Markets.

Speaker #1: Your line is now open.

Speaker #4: Thanks. Good morning, guys. I want to start the questions first on the new UK contract you signed this week with Raytheon just a little bit of an overview.

Nicholas Boychuk: Thanks. Good morning, guys. I want to start the questions first on the new UK contract you signed this week with Raytheon. Just a little bit of an overview, specifically what it is you guys are offering, the history and background with that relationship, if it is something that is a follow-on order. The pace and the scheduling of the CAD 296 million, if it is evenly throughout the 15 years or if there is some sort of a cadence to it. And you mentioned that there is a little bit of a variable upside. Just curious what unlocks that and what the magnitude of that could be.

Speaker #4: Specifically, what it is you guys are offering the history and background with that relationship if it is something that's a follow-on order. The pace and the scheduling of the $296 million, if it's evenly throughout the 15 years or if there's some sort of a cadence to it.

Speaker #4: And you mentioned that there's a little bit of a variable upside just curious what unlocks that and what the magnitude of that could be.

Speaker #3: Hey, good morning, Nick. Yeah, we've been working on this renewal. If you remember, this was originally the acquisition we did of Mavway about three and a half years ago.

Patrick Houston: Good morning, Nick. We have been working on this renewal. If you remember, this was originally the acquisition we did of Mabway about three and a half years ago, which includes the work we have been doing with the UK Ministry of Defence, doing the land forces training. So that has been a successful acquisition and a successful delivery from the team there. This is kind of the evolution of that. As the Ministry of Defence has consolidated some of these training platforms, so we have worked with Raytheon UK to do that. So this puts us and Raytheon in place to do the same work we have been doing for the next 15 years. The structure is similar to the past, where there is a base commitment of capacity, and then every year we kind of plan out what the variable activity is, and that drives that component. We would expect that component to probably be approximately the same size as the base level.

Speaker #3: Which includes the work we've been doing with the UK MOD doing the land forces training. So that's been a successful acquisition and a successful delivery from the team there.

Speaker #3: This is kind of the evolution of that. As the MOD has consolidated some of these training platforms, so we've worked with Raytheon UK to do that.

Patrick Houston: As the Ministry of Defence has consolidated some of these training platforms, so we have worked with Raytheon UK to do that. So this puts us and Raytheon in place to do the same work we have been doing for the next 15 years. The structure is similar to the past, where there is a base commitment of capacity, and then every year we kind of plan out what the variable activity is, and that drives that component. We would expect that component to probably be approximately the same size as the base level.

Speaker #3: So this puts us and Raytheon in place to do the same work we've been doing for the next 15 years. The structure is similar to the past, where there's a base commitment of capacity and then every year we kind of plan out what the variable activity is, and that drives that component.

Speaker #3: We'd expect that component to probably be approximately the same size as the base level.

Speaker #4: Sorry, just to confirm, so the variable component could effectively be a doubling of the $296 million over 15 years?

Nicholas Boychuk: Sorry, just to confirm, so the variable component could effectively be a doubling of the CAD 296 million over 15 years?

Speaker #3: Correct.

Patrick Houston: Correct.

Speaker #4: Okay. And then on the organic outlook that you're referring to on the space and antenna business, I'm curious if you're seeing any change in either activity, be it size of contract, terms, deliverables, requirements on your part—just how the outlook for that over the rest of the year looks.

Nicholas Boychuk: Okay. On the organic outlook that you are referring to in the space and antenna business, I am curious if you are seeing any change in either activity, be it size of contract, terms, deliverable, requirements on your part, just how the outlook for that over the rest of the year looks.

Speaker #3: For the rest of the year, I think it's unchanged. I think going forward, I think one of the dynamics is we're seeing larger programs in Canada, which has been a new development, mostly driven by the defense investments and the inclusion of space and the programs there.

Patrick Houston: For the rest of the year, I think it is unchanged. I think going forward, one of the dynamics is we are seeing larger programs in Canada, which has been a new development, mostly driven by the defense investments and the inclusion of space in the programs there. So I think that is a much more positive outlook that I think it will be a driver more in the midterm. Internationally, we have continued. We announced a big program in the Middle East last year, and the team is working on delivering that, and we are in the early stages of that, but I think that will continue into next year.

Speaker #3: So I think that's a much more positive outlook. I think it will be a driver more in the mid-term. Internationally, we've continued—we announced a big program in the Middle East last year, and the team's working on delivering that. We're in the early stage of that, but I think that will continue into next year.

Speaker #4: Okay, just last for me on the size. You mentioned you're competing on these larger and more complex opportunities. I'm curious if that ties into your M&A strategy and whether or not having more scale in certain platforms benefits you in terms of how you'll win and bid on these opportunities, and what that might mean in terms of the pace of M&A, but also the size of opportunities that you'd be looking to vend in.

Nicholas Boychuk: Okay, and just last for me on the size. You mentioned you are competing on these larger and more complex opportunities. I am curious if that ties into your M&A strategy and whether or not having more scale in certain platforms benefits you in terms of how you will win and bid on these opportunities and what that might mean in terms of the pace of M&A, but also the size of opportunities that you would be looking to vend in.

Speaker #3: It's a great point. We're trying to address that really in three ways. The first is just the organic investments we're making into our own platforms.

Patrick Houston: It is a great point. We are trying to address that really in three ways. The first is just the organic investments we are making into our own platforms. I think you saw us talk about ATHORA, and there is a multitude of other ones we are making. So I think that is important so that we can bring more comprehensive solutions to these opportunities. The second one is kind of the partnership and ventures models that we have launched. We are trying to bring other like-minded companies that can complement and bring a more comprehensive solution. The third one is the one you mentioned on M&A. We are continuously looking for assets that will complement kind of the capabilities we have today, allow us to go after larger opportunities. I think in this market right now, scale will be rewarded.

Speaker #3: I think you saw us talk about Athor and there's a multitude of other ones we're making. So I think that's important. So that we can bring more comprehensive solutions to these opportunities.

Speaker #3: The second one is kind of the partnership and ventures models that we've launched. We're trying to bring other like-minded companies that can complement and bring a more comprehensive solution.

Speaker #3: And the third one is the one you mentioned on M&A. We are continuously looking for assets that will complement the capabilities we have today and allow us to go after larger opportunities.

Patrick Houston: The third one is the one you mentioned on M&A. We are continuously looking for assets that will complement kind of the capabilities we have today, allow us to go after larger opportunities. I think in this market right now, scale will be rewarded. To Will's comments, we are trying to prepare ourselves so that we can accelerate the pace, we can find strong ideas that we can deploy capital on, and build more scale that will be rewarded over the longer term.

Speaker #3: And I think in this market right now, scale will be rewarded. So, to Will's comments, we are trying to prepare ourselves so that we can accelerate the pace at which we can find strong ideas that we can deploy capital on and build more scale that will be rewarded over the longer term.

Patrick Houston: To Will's comments, we are trying to prepare ourselves so that we can accelerate the pace, we can find strong ideas that we can deploy capital on, and build more scale that will be rewarded over the longer term.

Speaker #4: Understood. Thanks for the call, Patrick.

Nicholas Boychuk: Understood. Thanks for the color, Patrick.

Speaker #3: Thanks, Nick.

Patrick Houston: Thanks, Nick.

Speaker #1: Thank you. One moment for our next question. Our next question concerns the line of Stephanie Price of CIBC. Your line is now open.

Operator: Thank you. We will move on for our next question. Our next question comes from the line of Stephanie Price of CIBC. Your line is now open.

Speaker #5: Hi there. It's Sam Schmidt on for Stephanie Price. Nice to see the Raytheon contract announced this week. Are there any other kind of larger contracts in the pipeline that are coming up for renewal over the next year or so?

Sam Schmidt: Hi there. It is Sam Schmidt on for Stephanie Price. Nice to see the Raytheon contract announced this week. Are there any other larger contracts in the pipeline that are coming up for renewal over the next year or so? Can you talk a bit about Calian's level of visibility and confidence into securing those renewals? Maybe also whether you see opportunities to grow those contracts on renewal.

Speaker #5: And can you talk a bit about Calian's level of visibility and confidence into securing those renewals? And maybe also whether you see opportunities to grow those contracts on renewal.

Speaker #3: I wouldn't say there's any of the major ones that kind of anchor some of our relationship are coming due in 27. I think you'd have to look beyond that, like 28, 29 to start to see some of those come up.

Patrick Houston: I would not say there are any of the major ones that anchor some of our relationships are coming due in 2027. I think you would have to look beyond that, like 2028, 2029, to start to see some of those come up. I think that is the timeline on some of the major contracts.

Speaker #3: So I think that's the timeline on some of the major contracts.

Speaker #5: Okay. That's helpful. And then maybe just a follow-up on can you share an update on Calian's initiatives to expand the footprint and capture defense spending in Europe?

Sam Schmidt: Okay, that is helpful. Then maybe just a follow-up on, can you share an update on Calian's initiatives to expand the footprint and capture defense spending in Europe?

Speaker #3: Yeah. I think we mentioned that on the last call, so this was a point of investment. I think we've seen just continued growth. This has been mostly a four-year journey starting with a few small acquisitions that have built on top of each other and driven kind of strong double-digit organic growth.

Patrick Houston: Yeah, I think we mentioned that on the last call, that this was a point of investment. I think we have seen just continued growth. This has been mostly a four-year journey, starting with a few small acquisitions that have built on top of each other and driven strong double-digit organic growth. So we have gone back to that team and looked at how do we invest more business development support to go after more opportunities in the places we are today, but in also new geographies in Europe. So I think we are at the early stages of those investments, but we are hopeful they will start to pay off here into next year and beyond. So, stay tuned. But certainly, we are building on momentum there and certainly the defense spending pace that we have seen in Europe, I do not think is going to slow down here in the next couple of years.

Speaker #3: So we've gone back to that team and looked at how do we invest more business development support to go after more opportunities in the places we are today, but then also new geographies in Europe.

Speaker #3: So I think we're at the early stages of those investments, but we're hopeful they'll start to pay off here into next year and beyond.

Patrick Houston: I think we are at the early stages of those investments, but we are hopeful they will start to pay off here into next year and beyond. So, stay tuned. But certainly, we are building on momentum there and certainly the defense spending pace that we have seen in Europe, I do not think is going to slow down here in the next couple of years. We are trying to position ourselves to respond to that.

Speaker #3: So, stay tuned, but certainly we're building on momentum there, and certainly the defense spending pace that we've seen in Europe I don't think is going to slow down here in the next couple of years.

Speaker #3: So we're trying to position ourselves to respond to that.

Patrick Houston: We are trying to position ourselves to respond to that.

Speaker #5: That's helpful. And then, just one more for me. It was nice to see the raised '26 outlook. How should we think about the sustainability of this growth level, and can you share some color on the timing benefit to organic growth in Q3 that you mentioned in the prepared remarks?

Sam Schmidt: That is helpful. Just one more from me. It was nice to see the raised 2026 outlook. How should we think about the sustainability of this growth level? Can you share some color on the timing benefit to organic growth in Q3 that you mentioned in the prepared remarks, and how we should think about organic growth for Q4?

Speaker #5: And how we should think about organic growth for Q4?

Speaker #3: Yeah. I'll take that one. Yeah. I think our outlook still kind of remains longer term in our mid-single digits from an organic perspective. Yeah.

Will Majic: Yeah, I will take that one. I think our outlook still remains longer term in our mid-single digits from an organic perspective. We were able to capitalize on a few things in the quarter. One was timing. That pulled some of the amounts from Q4 into Q3. We were also there is a part of the demand that we are seeing this year for some of our technology solutions that is a little bit less predictable. You saw that pretty significantly in Q2, and we continue that in Q3 here. That is not one that we can bank on every year. When we see that come up, we are able to rapidly go and address that need for the customers, but it is not something that we can bank on every year.

Will Majic: I will take that one. I think our outlook still remains longer term in our mid-single digits from an organic perspective. We were able to capitalize on a few things in the quarter. One was timing. That pulled some of the amounts from Q4 into Q3. We were also there is a part of the demand that we are seeing this year for some of our technology solutions that is a little bit less predictable. You saw that pretty significantly in Q2, and we continue that in Q3 here.

Speaker #3: We were able to capitalize on a few things in the quarter. One was timing. So that pulled some of the amounts from Q4 into Q3.

Speaker #3: And then, there's also a part of the demand that we're seeing this year for some of our technology solutions that's a little bit less predictable.

Speaker #3: You saw that pretty significantly in Q2, and we continue that in Q3 here. That's not one that we can bank on every year. When we see that come up, we're able to rapidly go and address that need.

Will Majic: That is not one that we can bank on every year. When we see that come up, we are able to rapidly go and address that need for the customers, but it is not something that we can bank on every year. I would say, from an organic perspective, we are still targeting that longer term, midterm around mid-single digits from an organic perspective.

Speaker #3: For the customers, but it's not something that we can bank on every year. So I'd say from an organic perspective, we're still targeting that longer term midterm around mid-single digits from an organic

Will Majic: I would say, from an organic perspective, we are still targeting that longer term, midterm around mid-single digits from an organic perspective.

Speaker #5: Okay. Thank you. I'll pass the line.

Sam Schmidt: Okay. Thank you. I will pass the line.

Speaker #1: Thank you. One moment for our next question. Our next question comes online of Rob Goff of Ventum Financial. Your line is now open.

Operator: Thank you. One moment for our next question. Our next question comes on the line of Rob Goff of Ventum Financial. Your line is now open.

Speaker #6: Thank you. Very much. And congratulations on the quarter. Very significant beat on the quarter. Well done.

Rob Goff: Thank you very much, and congratulations on the good quarter. A very significant beat on the quarter. Well done.

Speaker #3: Good morning, Rob.

Patrick Houston: Morning, Rob.

Speaker #6: Good morning. In terms of building on the organic growth and capturing the opportunity, how do you look at scaling up? Will the OPEX investments be coincident with the growth?

Rob Goff: Morning. In terms of building on the organic growth and capturing the opportunity, how do you look at scaling up? Will the OpEx investments be coincident with the growth? Will there be upfront investments, or how do you see the two being married together?

Speaker #6: Will there be upfront investments? Or how do you see the two being married together?

Speaker #3: Yeah, good question. I think I'd look at it more broadly. I've challenged the team going into next year, and the year after, to say: how do we think about this company to try to capture larger opportunities and drive long-term, sustainable, organic growth?

Patrick Houston: Yeah, good question. I think, I look at it more broadly. I've challenged the team going into next year and the year after to say, how do we think about this company to try to capture larger opportunities and drive long-term sustainable organic growth? So that goes between what's the delivery model and platform we need to respond with the business development team and sales to capture these opportunities. What's the balance sheet and capital structure look like that allows us to take advantage of these? So I've tried to challenge the whole team to look at every single part of this business and say, "Let's position ourselves so that we can respond to these." So I think it's a broader one.

Speaker #3: So that goes between what's the delivery model and platform we need to respond? What's the business development team and sales to capture these opportunities?

Speaker #3: What's the balance sheet and capital structure look like that allows us to take advantage of these? So I've tried to challenge the whole team to look at every single part of this business and say, let's position ourselves so that we can respond to these.

Patrick Houston: I've tried to challenge the whole team to look at every single part of this business and say, "Let's position ourselves so that we can respond to these." So I think it's a broader one. To your point on timing, inevitably some of it has to be ahead of the revenue in order for us to make sure we can capture these larger opportunities. Obviously, we'll do it in a disciplined way. But I think that's the plan we have.

Speaker #3: So I think it's a broader one. To your point on timing, inevitably some of it has to be ahead of the revenue. In order for us to make sure we can capture these larger opportunities, obviously we'll do it in a disciplined way.

Patrick Houston: To your point on timing, inevitably some of it has to be ahead of the revenue in order for us to make sure we can capture these larger opportunities. Obviously, we'll do it in a disciplined way. But I think that's the plan we have.

Speaker #3: But I think that's the plan we have.

Speaker #6: Okay. And perhaps a tougher question. With the government looking to spend so much more how do you see the government streamlining the process to commercialization of budget commitments?

Rob Goff: Very good. Perhaps a tougher question. With the government looking to spend just so much more, how do you see the government streamlining the process to commercialization of budget commitments?

Speaker #3: Yeah. I'll speak to Canada specifically. That's been an evolving mandate. I expect to see the defense investment agency be named a department here in the fall once the government comes back.

Patrick Houston: Yeah. I will speak to Canada specifically. That has been an evolving mandate. I expect to see the Defence Investment Plan being the department here in the fall once the government comes back. I think that is a positive signal. I think they are trying to streamline the ability of policy to turn into industry engagement and procurement. Still lots of changes there, but I think they are positive. I think they are trying to accelerate. You certainly saw that momentum last year to get to the 2%, and I am confident they will meet that and exceed that again this year. Then it is how do they establish a platform to continue to do that into the years to come? Because this is not a one or two-year thing, but rather a decade investment.

Patrick Houston: I will speak to Canada specifically. That has been an evolving mandate. I expect to see the Defence Investment Plan being the department here in the fall once the government comes back. I think that is a positive signal. I think they are trying to streamline the ability of policy to turn into industry engagement and procurement. Still lots of changes there, but I think they are positive. I think they are trying to accelerate.

Speaker #3: I think that's a positive signal. I think they're trying to streamline the ability of policy to turn into industry engagement and procurement. So still lots of changes there, but I think they're positive.

Speaker #3: I think they're trying to accelerate you certainly saw that momentum last year to get to the 2%. I'm confident they'll meet that and exceed that again this year.

Patrick Houston: You certainly saw that momentum last year to get to the 2%, and I am confident they will meet that and exceed that again this year. Then it is how do they establish a platform to continue to do that into the years to come? Because this is not a one or two-year thing, but rather a decade investment. We are certainly engaged at all levels, try to understand what the process will look like going forward, and how we can best respond.

Speaker #3: And then it's how do they establish a platform to continue to do that into the years to come because this is not a one or two-year thing, but rather a decade investment.

Speaker #3: And we're certainly engaged at all levels to try to understand what the process will look like going forward and how we can best respond.

Patrick Houston: We are certainly engaged at all levels, try to understand what the process will look like going forward, and how we can best respond.

Speaker #6: And one just quick question. With respect to contracts that you're seeing in the marketplace, are you finding that the duration of those contracts is typically being extended?

Rob Goff: One just quick question. With respect to contracts that you are seeing in the marketplace, are you finding that the duration of those contracts is typically being extended?

Speaker #3: I wouldn't say there's been a drastic change yet. I think what they are looking for is a combination of value, sovereignty, economic impact in Canada, and matching the need going forward.

Patrick Houston: I would not say there has been a drastic change yet. I think what they are looking for is a combination of value sovereignty, economic impact in Canada, and matching the need going forward. I think they are looking to see how do they get all those things when they procure the next service or platform. Certainly, that is where it comes back to how we can deliver, how we can partner to make sure that our offer meets all of those criteria.

Speaker #3: So I think they're looking to see how do they get all those things when they procure the next service or platform. So certainly that's where it comes back to how we can deliver how we can partner to make sure that our offer kind of meets all of those criteria.

Speaker #6: Okay. Thank you very much. And good luck.

Rob Goff: Okay. Thank you very much, and good luck.

Speaker #3: Thanks, Rob.

Patrick Houston: Thanks, Rob.

Speaker #1: Thank you. One moment for our next question. Our next question comes online from Benoit Poirier of Desjardins. Your line is now open.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Benoit Poirier of Desjardins. Your line is now open.

Speaker #7: Yeah. Good morning, Pat and Will and congrats for the strong results.

Benoit Poirier: Yes. Good morning, Pat and Will, and congrats for the strong results.

Speaker #3: Thanks, Benoit.

Patrick Houston: Thanks, Benoit.

Speaker #7: Yeah. Just in terms of overall backlogs, slightly down quarter over quarter, but it doesn't include the recent contract extension with the British Army. When we look at the defense and space market, obviously very strong macro backdrop.

Benoit Poirier: Yeah. Just in terms of overall backlogs, slightly down quarter-over-quarter, but it doesn't include the recent contract extension with the British Army. When we look at the defense and space market, obviously very strong macro backdrop. I would be curious if you could maybe qualify or quantify your bidding pipeline in light of the strong environment we see. I feel that you have more discussion than you've been having in the past, so just curious to know more about the bidding pipeline.

Speaker #7: So I would be curious if you could maybe qualify or quantify your bidding pipeline in light of the strong environment we see I feel that you have more discussion than you've been having in the past.

Speaker #7: So just curious to know more about the bidding pipeline.

Speaker #3: Yeah. Thanks, Benoit. Yeah. I think from the pipeline perspective, we're seeing just that the both with the market conditions and the scale of our business.

Will Majic: Yeah, thanks, Benoit. I think from the pipeline perspective, we're seeing, both with the market conditions and the scale of our business, we're seeing larger opportunities that we're going after. I think that's where Pat's mentioning, we're going to need to continue to make investments in the business to capitalize on those larger opportunities. But those are there, and we see those continuing in the pipeline. I think that's been a positive for us.

Speaker #3: We're seeing larger opportunities that we're going after. I think that's what Pat's mentioning. We're going to need to continue to make investments in the business to capitalize on those larger opportunities.

Speaker #3: But those are there, and we see those continuing in the pipeline. So I think that's been a positive for us.

Speaker #7: Okay, thank you. Great caller. And just in terms of organic growth—obviously, very impressive—but if we look specifically at Essential Industry, the volume was driven by U.S. commercial operations, which tends to be less predictable.

Benoit Poirier: Okay. Thank you. Great color. Just in terms of organic growth, obviously very impressive, but if we look specifically for essential industry, the volume was driven by US commercial operation, which tends to be less predictable. If you were to exclude that, what would be the overall organic growth, and is there any change in terms of your view around some potential divestitures?

Speaker #7: So, if you were to exclude that, what would be the overall organic growth, and is there any change in your view around some potential divestitures?

Speaker #3: Sure. I'd look at the organic growth over a longer period. Benoit, I think that's an easier way to talk about the trending. Obviously, Will mentioned earlier we're targeting high single digits.

Patrick Houston: Sure. I look at the organic growth over a longer period, Benoit. I think that's an easier way to talk about the trending. Obviously, Will mentioned earlier, we're targeting high single digits. This year, we're delivering much better than that. I think the team's executing well, so we should deliver better than that performance. Going into next year, it's how do we set ourselves up to do that again. On the divestiture, I think I mentioned it last quarter, we said we'd taken an effort to do the portfolio review to look at various assets and that we'd come to a conclusion here at this point in the summer. I think that's still on track.

Speaker #3: This year, we're delivering much better than that. I think the team's executing well, so we should deliver better than that performance. And going into next year, how do we set ourselves up to do that again?

Speaker #3: On the divestiture, I think I mentioned it last quarter. We said we'd take an effort to do the portfolio review, to look at various assets, and that we'd come to a conclusion here at this point in the summer.

Speaker #3: So, I think that's still on track.

Speaker #7: Okay. That's great. And in terms of share services, it increased 16%. Year over year driven by increase headcounts. But slightly down on a percentage basis.

Benoit Poirier: Okay. That's great. In terms of shared services, it increased 16% year over year, driven by increased headcounts, but slightly down on a percentage basis. How could we look at the shared services going forward? You mentioned that we should expect an increased pace in terms of investment too. Is it more in terms of CapEx? Any thoughts about where we could see those higher investment, gentlemen?

Speaker #7: So, how could we look at the shared services going forward? And you mentioned that we should expect an increased pace in terms of investment too.

Speaker #7: So is it more in terms of capex? Any thoughts about where we could see those higher investment, gentlemen?

Speaker #3: Yeah. I mean, we've been investing to grow the business. I think that's been reflected both in the top line and both combined with our EBITDA.

Will Majic: Yeah. We've been investing to grow the business. I think that's been reflected both in the top line and both combined with our EBITDA and EBITDA percentage. So those do take investments from a shared services perspective. I think it's that bag, Benoit. Looking forward, we have been making some pretty targeted investments to try and see how we can get more efficiency from a cost perspective. Just this last month, we put in a team. This is the new team that we've created here at Calian to try and drive efficiency. That's going to be a near-term cost for us, but will result in some savings in the mid to longer term. This is a team that's going to be focusing on process, that's going to be looking on how do we automate, how do we get more efficient, how do we lean out process, implementing AI.

Speaker #3: And EBITDA percentage. So it's due take investments from a shared services perspective. I think it's that back. Benoit, looking forward, we have been making some pretty targeted investments to try and see how we can get more efficient from efficiency from a cost perspective.

Speaker #3: So just this last month, we put in a team this is a new team that we've created here, Calian, to try and drive efficiency.

Will Majic: This is the new team that we've created here at Calian to try and drive efficiency. That's going to be a near-term cost for us, but will result in some savings in the mid to longer term. This is a team that's going to be focusing on process, that's going to be looking on how do we automate, how do we get more efficient, how do we lean out process, implementing AI. This is going to be a big focus for us going into next year.

Speaker #3: That's going to be a near-term cost for us, but we'll result in some savings in the kind of mid to longer term. This is a team that's going to be focusing on process.

Speaker #3: That's going to be looking on how do we automate? How do we get more efficient? How do we lean out process? Implementing AI, this is going to be a big focus for us going into next year.

Will Majic: This is going to be a big focus for us going into next year.

Speaker #7: Okay, that's great. And last one for me—in terms of M&A, you're looking to increase the pace of M&A. So, any comments you could provide in terms of where you see the greatest amount of opportunity, whether it's defense space or essential industries, or any color about the geographic regions that you're looking at?

Benoit Poirier: Okay. That is great. The last one for me, in terms of M&A, you are looking to increase the pace of M&A. Any comments you could provide in terms of where do you see the greatest amount of opportunity, whether it is defense, space or essential industries, or any color about the geographic regions that you are looking at?

Speaker #3: Sure. I think what you've seen, Benoit, and you know as well, I think we've continued the effort to work the pipeline and find strong opportunities we can execute.

Patrick Houston: Sure. I think what you have seen, Benoit, and you know as well, I think we have continued the effort to work the pipeline and find strong opportunities we can execute. I think InField was a strong transaction, AMS. We are certainly very optimistic about Galaxy Broadband coming onto the team and really delivering strong results for us. I think what you have also seen, the team is really trying to hone in on the kind of the renewed strategy where the M&A is really complementary and helps the scale of both space and defense and essential industries. So we are trying to focus the M&A in those core areas. I think it is still Canada, US, Europe is really the geographical areas that we are targeting.

Speaker #3: I think Infield was a strong transaction. AMF, we're certainly very optimistic about Galaxy Broadband coming onto the team and really delivering strong results for us.

Speaker #3: I think what you've also seen the team is really trying to hone in on the kind of the renewed strategy where the M&A is really complementary and helps the scale of both space and defense and essential industries.

Speaker #3: So we're trying to focus the M&A in those core areas I think it's still Canada, US, Europe is really kind of the geographical areas that we're targeting.

Patrick Houston: I think it is still Canada, US, Europe is really the geographical areas that we are targeting. We are optimistic that we can not only continue the M&A pace that we have been doing, but even accelerate it here in the coming year so that we can build more scale and take advantage of the opportunity ahead of us.

Speaker #3: And we're optimistic that we can not only continue the M&A pace that we've been doing, but even accelerate it here in the coming year so that we can build more scale and take advantage of the opportunity ahead of us.

Patrick Houston: We are optimistic that we can not only continue the M&A pace that we have been doing, but even accelerate it here in the coming year so that we can build more scale and take advantage of the opportunity ahead of us.

Speaker #7: That's great. Thank you very much for the time. Congrats again.

Benoit Poirier: That is great. Thank you very much for the time. Congrats again.

Speaker #3: Thanks, Benoit.

Patrick Houston: Thanks, Benoit.

Speaker #1: Thank you. One moment for our next question. Our next question comes from the line of RBC Capital Markets. Your line is now open.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Paul Treiber of RBC Capital Markets. Your line is now open.

Speaker #2: Oh, thanks very much and good morning. Just a follow-up question on M&A. You mentioned the prepared remarks that the dollar capital deployed. Was a little short of your expectations.

Paul Treiber: Oh, thanks very much, and good morning. Just a follow-up question on M&A. You mentioned in the prepared remarks that the dollar capital deployed was a little short of your expectations. Does that stem primarily from valuations above your threshold? How do you think about valuations within your target markets? I imagine in defense and space that the multiples have gone up quite a bit. So where do you see the opportunities within those strategic markets to deploy capital?

Speaker #2: And does that stem primarily from valuations above your threshold? And how do you think about valuations within your target markets? I imagine defense and space at the multiples have gone up quite a bit.

Speaker #2: So how do you where do you see the opportunities within those strategic markets to deploy capital?

Speaker #3: Yeah. Good morning, Paul. I'd say it's more about focus and then necessarily about valuations on why the capital deployment maybe was a bit less than we would have expected this year.

Patrick Houston: Good morning, Paul. I'd say it's more about focus than necessarily about valuations on why the capital deployment maybe was a bit less than we would've expected this year. Again, like I just answered in the last question, I think we're still happy about the acquisitions we did, and I think there's still pipeline to go for us there. So it's not a concern, but more about a focus. On the valuations, yeah, I think indefinitely when the market is reflecting better growth, valuations generally will inch up. I think we're still working hard to try to find companies that have that strong synergy with us that will allow us to accelerate the growth once we buy them. To the extent we can do that, then we can potentially look at different valuation or deal structures that facilitate that.

Speaker #3: Again, like I just answered in the last question, I think we're still happy about the acquisitions we did. And I think there's still pipeline to go for us to execute.

Speaker #3: So it's not a concern, but more about a focus on the valuations. Yeah, I think, definitely, when the market is reflecting better growth, valuation generally will inch up.

Speaker #3: I think we're still working hard to try to find companies that have that strong synergy with us that will allow us to accelerate the growth once we buy them, and to the extent we can do that, then we can potentially look at different valuation or deal structures that facilitate that.

Patrick Houston: I think we're still working hard to try to find companies that have that strong synergy with us that will allow us to accelerate the growth once we buy them. To the extent we can do that, then we can potentially look at different valuation or deal structures that facilitate that. I think we're trying to be creative, disciplined at the same time, but also kind of accelerate the pace. I still think you'll see us do acquisitions in this area and make them as successful as the last ones.

Speaker #3: So I think we're trying to be creative, disciplined at the same time, but also kind of accelerate the pace. So I still think you'll see us do acquisitions in this area and make them as successful as the last ones.

Patrick Houston: I think we're trying to be creative, disciplined at the same time, but also kind of accelerate the pace. I still think you'll see us do acquisitions in this area and make them as successful as the last ones.

Speaker #2: Okay, that's helpful. You also mentioned a review or a look at your capital structure. Where do you see that going?

Paul Treiber: Okay. That's helpful. You mentioned also a review or a look at your capital structure. Where do you see that going? Meaning, do you expect that review or changes to help lower your WACC? That would potentially open up more M&A. Would you lean more into debt? Or potentially, are you looking for equity financing just given the flexibility there?

Speaker #2: Meaning do you expect to help it that review to help or changes to help lower your whack? And that would potentially open up more M&A.

Speaker #2: Would you lean more into debt or potentially you're looking for equity financing just given the flexibility there?

Speaker #3: I think our challenge with the team is to be ready on all fronts, Paul. I think, coming off the year we posted this year, and with a strong opportunity set going forward, both organic and M&A.

Patrick Houston: I think I've challenged the team to be ready on all fronts, Paul. I think coming off the year we posted this year and a strong opportunity set going forward, both organic and M&A, I think I'm trying to challenge the whole team to say, "What do we need to take advantage of that?" That's across the whole business. Capital structure is a component of that. You know that we like to be ready to kind of take advantage of the moment, so we're looking at all options to make sure we're there. Then, when the right one comes into focus, we'll push on that one.

Speaker #3: I think I'm trying to challenge the whole team to say, "What do we need to take advantage of that?" So that's across the whole business.

Speaker #3: Capital structures are a a component of that. You know that we like to be ready to kind of take advantage of the moment. So we're looking at all options to make sure we're there.

Speaker #3: And then when the right one comes into the to focus we'll push on that one.

Speaker #2: Okay. Thanks for taking the questions.

Paul Treiber: Okay. Thanks for taking the questions.

Speaker #3: Thanks, Paul.

Patrick Houston: Thanks, Paul.

Speaker #1: Thank you. One moment for our next question. Again, as a reminder, to ask a question, you'll need to press star 11 on your telephone.

Operator: Thank you. One moment for our next question. Again, as a reminder, to ask a question, you will need to press star 1 1 on your telephone. Our next question comes from the line of Greg MacDonald of Stifel Nicolaus Canada. Your line is now open.

Speaker #1: Our next question comes from a line of Greg McDonald of Stephen Nicholas, Calian. Your line is not open.

Speaker #4: Thanks. Good morning, guys. Will, thank you for the walk down or the context on working capital. I think that was helpful. Question I want to ask is on margins and I'm going to kind of approach it from sustainability of plus 11% margins going forward.

Greg MacDonald: Thanks. Good morning, guys. Will, thank you for the walk down or the context on working capital. I think that was helpful. The question I want to ask is on margins, and I am going to kind of approach it from sustainability of +11% margins going forward. Some things going on there. You mentioned IT services, which is margin accretive, had an impact this quarter, and I noticed that product sales in particular also had a significant impact, I do not know versus consensus, but certainly relative to what we expected. Can you talk a little bit about margin sustainability at the 11%-plus level and opportunities that you had looked at, are looking at in essential industries? Just where are you in terms of the timeline and the margin strategy overall? Thanks.

Speaker #4: So some things going on there. You mentioned IT services, which is margin accretive. Had an impact this quarter. And I noticed that product sales in particular also had a significant impact.

Speaker #4: I don't know versus consensus, but certainly relative to what we expected. Can you talk a little bit about margin sustainability at the 11% plus level and opportunities that you had looked at are looking at in essential industries?

Speaker #4: Just where are you in terms of the timeline and the margin strategy overall? Thanks.

Speaker #3: Hey, good morning, Greg. Yeah, I think for us, margins, we try to look at this on a longer-term basis. We delivered very strong results in the quarter.

Patrick Houston: Good morning, Greg. Yeah, I think for us, margins, we try to look at this on a longer-term basis. We delivered very strong in the quarter. But if I take a step back, we have been growing our margins, both gross margin percentage and EBITDA, pretty significantly year over year. This is one that we are going to continue to push on. We mentioned some of these investments, those might impact us in the next couple of quarters. But I think again, we are trying to push on creating a business that we can scale, that we can find efficiency in, that will drive higher revenue growth, while also maintaining EBITDA percentage in the business. I think this is one that we are going to continue to push on to try and continue to increase that margin profile.

Speaker #3: But if I take a step back, we've been growing our margins both gross margin percentage and EBITDA pretty significantly year over year. And this is one that we can continue to push on.

Speaker #3: So we mentioned some of these investments. Those might impact us in the next couple of quarters. But I think again, we're trying to push on creating a business that we can scale that we can find efficiency in that will drive growth while also maintaining EBITDA percentage in the business.

Speaker #3: So I think this is one that we're going to continue to push on to try and continue to increase that margin profile.

Speaker #4: And a quick follow-on to that. And I guess lots of questions on M&A. So I'd be remiss not to ask one myself. But as when you think about the types of companies that you're looking at from an M&A perspective, are those companies that will continue to allow you to be accretive on the margin side?

Greg MacDonald: A quick follow-on to that, I guess lots of questions on M&A, so I would be remiss not to ask one myself. When you think about the types of companies that you are looking at from an M&A perspective, are those companies that will continue to allow you to be accretive on the margin side, or are these companies that have higher than 10%, 11% margin profiles?

Speaker #4: Or are these companies that have higher than 10 or 11% margin profiles?

Speaker #3: Yeah. Historically, the majority of our transactions we've done has been accretive. Obviously, that was starting from a point where the margins were much lower than they are today.

Patrick Houston: Yeah. Historically, the majority of our transactions we have done has been accretive. Obviously, that was starting from a point where the margins were much lower than they are today. I think that strategy was successful in terms of both growing margins organically, but then bringing on new businesses that can do that. I think we still strive to do that going into the future. Obviously, as the margins continue to increase, that becomes more difficult. But certainly that is part of the criteria we look at that can be either at or above the margins we have. We are also looking at them through other lenses, whether they are strategic and help us try to go after larger programs. Can they work together with Calian? What is the one plus one equals three? So we try to look at through across multiple lenses, but certainly margin is one of them.

Speaker #3: So I think that strategy was successful in terms of both growing margins organically, but then bringing on new businesses that can do that. I think we still strive to do that going into the future.

Speaker #3: Obviously, as the margins continue to increase, that becomes more difficult. But certainly that is part of the criteria we look at. That can be either add or above the margins we have.

Patrick Houston: Certainly that is part of the criteria we look at that can be either at or above the margins we have. We are also looking at them through other lenses, whether they are strategic and help us try to go after larger programs. Can they work together with Calian? What is the one plus one equals three? So we try to look at through across multiple lenses, but certainly margin is one of them.

Speaker #3: We're also looking at them through other lenses, whether they're strategic and help us try to go after larger programs? Can they work together with Calian?

Speaker #3: What's the '1 plus 1 equals 3'? So, we try to look at it through multiple lenses, but certainly, margin is one of them.

Speaker #4: Okay, appreciate it. And congrats on the quarter.

Greg MacDonald: Okay. Appreciate it. Congrats on the quarter.

Speaker #3: Thanks, Greg.

Patrick Houston: Thanks, Greg.

Speaker #2: Thanks, guys.

Speaker #1: Thank you. I'm showing no further questions at this time. I'll now turn it back to Patrick Houston for closing remarks.

Operator: Thank you. I am showing no further questions at this time. I will now turn it back to Patrick Houston for closing remarks.

Speaker #3: Thanks, Marvin. And thanks, everyone, for attending. We look forward to providing you with an update on our next quarterly call. And with that, we can close the call.

Patrick Houston: Thanks, Marvin. Thanks everyone for attending. We look forward to providing you an update on our next quarterly call. With that, we can close the call.

Operator: Thank you for your participation in today's conference. This concludes the program. You may now disconnect.