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DATE

Thursday, May 14, 2026 at 10 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Shahram Askarpour
  • Chief Financial Officer — Jeffrey DiGiovanni

TAKEAWAYS

  • Revenue -- $22.4 million, up 2% year over year, primarily due to a 50% increase in the commercial aerospace and business aviation segments despite a $7 million decline in F-16 program revenues.
  • Gross Profit -- $11.4 million, up 1.5% year over year, driven by revenue growth and a favorable mix in the commercial aftermarket, partially offset by F-16 transition expense timing.
  • Gross Margin -- 51.1%, down from 51.4% year over year, attributed to product mix shift and F-16-related expense timing; long-term margins expected in the mid-40% range.
  • Product Sales -- $14.3 million, increased from $13.2 million year over year, reflecting higher sales of aftermarket products, commercial market upgrades, and business aviation products.
  • Service Revenue -- $8.1 million, down from $8.8 million year over year, due to nearly $3 million decline in F-16 services, partially offset by increases in IRUs and radio lines.
  • Operating Expenses -- $6.5 million, up 4% from $6.3 million year over year, reflecting higher R&D expenses and one-time acquisition integration costs.
  • Net Income -- $3.4 million, or $0.19 per diluted share, compared to $5.3 million, or $0.30 per share, year over year; lower due to increased R&D and acquisition costs.
  • Adjusted Net Income -- $4.8 million, with adjusted EPS of $0.27, compared to $5.7 million and $0.32 year over year.
  • Adjusted EBITDA -- $6.8 million, down from $7.7 million year over year, primarily reflecting timing differences from F-16 expenses and increased growth investments.
  • Backlog -- Approximately $87 million as of period end, up $7 million from the comparable period; new orders for the quarter totaled $24.7 million.
  • Free Cash Flow -- $7.7 million for the first half, up from $1.3 million in the previous year, resulting from stronger operating results and low capital requirements.
  • Net Debt -- $48.3 million at period end, increasing $22.2 million year over year after more than $35 million spent on acquisitions and capital expenditures.
  • Recent Acquisitions -- Three acquisitions this quarter, projected to contribute $10 million in annual revenue at a blended 50% gross margin, expanding both OEM and aftermarket platforms.
  • F-16 Program Status -- All recertifications and production resumed for critical F-16 components; expected quarterly F-16 revenue run rate between $3 million and $5 million.
  • Guidance -- Third quarter revenue forecasted in the $24 million to $26 million range; management expects full-year organic revenue growth to be essentially flat due to the prior F-16 revenue pull-forward.

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RISKS

  • The $7 million year-over-year decline in F-16 program revenues created a headwind, requiring the company to shift sales mix to commercial and business aviation segments.
  • Gross margins declined to 51.1% from 51.4% and are expected to decrease further into the mid-40% range over the long term as military business, which carries lower gross margins, ramps back up.
  • Net income dropped to $3.4 million from $5.3 million year over year, directly affected by increased R&D costs and integration expenses from recent acquisitions.
  • Net debt increased by $22.2 million year over year, reflecting over $35 million in outflows for acquisitions and capital expenditures, impacting balance sheet leverage.

SUMMARY

Innovative Aerosystems (ISSC 15.40%) reported modest overall top-line growth, achieved by offsetting anticipated F-16 program revenue declines through significant gains in commercial aerospace and business aviation. Management outlined substantial portfolio expansion via three strategic acquisitions, expected to add $10 million in annual revenue and bolster capabilities in integrated cockpit and autopilot products. Integration of F-16 manufacturing at the Exton facility is now complete, returning key program deliveries to normalized levels with a projected quarterly run rate of $3 million to $5 million. The backlog increased to $87 million, indicating a solid flow of new orders and future demand visibility.

  • Management projects third quarter revenue in the $24 million to $26 million range, with full-year organic growth expected to remain flat due to prior revenue pulls from the F-16 program.
  • The company's stated acquisition pipeline remains "pretty active" with financial capacity to pursue further expansion, as management indicated openness to both product line and full business unit acquisitions if strategic.
  • Free cash flow sharply improved to $7.7 million in the first half due to robust operational execution and limited capital expenditure requirements.
  • Ongoing investment in R&D is expected to support further development of next-generation platforms, with operating expenses rising accordingly.
  • Future revenue mix may shift further toward products over services, following integration of recent acquisitions and continued product portfolio development.

INDUSTRY GLOSSARY

  • UMS Platform: Unified Management System — an advanced aircraft system management architecture designed to monitor and control multiple aircraft subsystems, integrating flight controls, environmental, and power systems.
  • IPTG/IPDG: Improved (Programmable) Display Generator — a key avionic subsystem supporting F-16 aircraft upgrades and modernization.
  • IRUs: Inertial Reference Units — avionic devices that provide aircraft attitude and heading information for navigation and control systems.
  • Liberty Flight Deck: Proprietary next-generation flight deck solution integrating advanced avionics for increased autonomy and mission management.

Full Conference Call Transcript

Operator: Greetings. Welcome to Innovative Aerosystems Second Quarter Fiscal Year 26 Results Conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference. Please note this conference is being recorded. At this time, I will turn the conference over to Paul Bartolai, Partner at Valem Advisors. Thank you, Paul. You may now begin.

Paul Bartolai: Thank you. Good morning, everyone. And welcome to Innovative Aerosystems second quarter fiscal 26 Results Conference Call. Leading the call today are our CEO, Shahram Askarpour and CFO, Jeffrey DiGiovanni. This morning, we issued a press release detailing our fiscal 26 second quarter operational and financial results. This release is publicly available in the Investor Relations section of our corporate website www.iascorp.com. I would like to remind you that management's commentary and responses to questions on today's conference call may include forward looking statements. Which by their nature are uncertain and outside of the company's control. Although these forward looking statements are based on management's current expectations and beliefs, actual results could differ materially.

For a discussion of some of the factors that could cause actual results to differ, please refer to the risk factors section of our latest reports filed with the SEC. Additionally, please note that you can find reconciliations of all historical non GAAP financial measures mentioned on this call in the press release issued this morning. Today's call will begin with prepared remarks from Shahram, who will provide a review of our recent business performance, an update on our strategic framework, followed by a financial update from Jeffrey. At the conclusion of these prepared remarks, we will open the line for your questions. And with that, I will turn the call over to Shahram.

Shahram Askarpour: Thank you, Paul, and good morning to everyone joining us on the call today. Our positive business momentum carried into the second quarter as we reported another strong result highlighted by significant organic growth in our commercial aerospace and business aviation markets. Continued strength in bookings, strong margin realization and efficient free cash flow conversion. We were able to deliver second quarter modest organic growth driven by growth of approximately 50% in our commercial and business aviation markets, despite an unfavorable comparison to the 2025. As a reminder, we faced an unfavorable comparison to last year due to the transition of the F-16 manufacturing to our facility in Exton.

Our F-16 revenues in the 2025 were elevated as deliveries to Lockheed were accelerated to buffer them during the transition related manufacturing hiatus. Resulting in a $7 million year-over-year decline in F-16 revenues. The anticipated lower F-16 revenues due to the IPTG required approvals and therefore shifted the mix of our sales to be more commercial centric in our commercial aftermarket sales together with increasing volumes in business aviation. We continue to make important progress under our IA NEXT long term value creation strategy during the second quarter. Highlighted by 3 new acquisitions during the quarter that further expand our base of recurring high value aftermarket and OEM revenue across legacy and next generation aviation platforms.

Together, these transactions are projected to contribute $10 million in annual revenue with a blended gross margin profile of approximately 50% putting us another step closer to delivering on our $250 million annual revenue target. In February, we are acquired the STEC autopilot product line from Moog. This was an important transaction as it brought us an established Autopilot solution to integrate into our avionics cockpit solution. This was 1 of the key products missing in our integrated cockpit avionics platform. We could have built this on our own, but the solution from Moog gives us a recognized and trusted product. This was followed in March with the acquisition of several product lines from Honeywell.

In addition to navigation radios, multifunction displays, transponder technologies, and power generation This transaction, importantly, included additional Autopilot solutions. Coupled with the MOOC Autopilot, Together, these Autopilot platforms significantly enhance our integrated cockpit solution and accelerate our ability to deliver autonomous solutions to our customers for both the military and commercial markets. In aggregate, the Autopilot product line acquisitions recently made established us as a major supplier of aircraft autopilots. With certified and fielded solutions that range from small general aviation aircraft all the way to large Part 25 platforms. Including helicopters, for both military and commercial markets. These solutions will also be integrated into our UMS platform and Liberty flight deck.

Our full suite of avionics solutions now include advanced flight deck and mission systems, precise flight and navigation computers, autothrottle, flight control computers, mission computers, navigation and communication radios, transponders, audio systems, electrical power generation systems, and proprietary software technologies targeting autonomous flight. This is an important milestone fulfilling the company's ongoing strategy to build a comprehensive avionics ecosystem that bridges legacy platform sustainment with next generation capability development ensuring operators can maximize aircraft availability safety, and long term value.

As with the past transactions, these acquisitions expand our reach into new customers and platforms as well as provide an opportunity to reengineer these products and integrate them into our existing solutions to offer to new potential customers in military business aviation and commercial air transport sectors. Our acquisition funnel remains robust and we see additional opportunities as we continue to execute on our strategic growth initiatives. This quarter, provided clear evidence that our strategy is working as we saw the benefits of both acquisitions and strong organic growth driven by internal investments in new product development. We will remain disciplined in our approach continuing to focus on transactions and investments that advance our strategic objectives.

I also wanted to provide a quick update on integration of our products in support of the F-16 program. As we discussed last quarter, we completed all required recertifications and resumed full scale production of the digital flight control computer at our Exton facility. The recertification and resumption of production of the improved programmable display generator is also now complete. We are excited to be fully up and running on these products and we continue to be optimistic regarding the long term growth potential of this platform. The F-16 remains a critical asset for our military as well as many of our allies around the world.

Additionally, we remain encouraged by the growth potential for our broader defense business as we experienced significant level of inquiries for cockpit upgrades and new aircraft platforms. As such, in the current political climate, we are even more encouraged by the long runway of growth we see ahead. We have made significant investments to position our business as a mission critical partner with the defense supply chain and believe that we stand to benefit given the strong backdrop for defense spending.

At the product level, we continue to move closer to delivering the new version of our UMS platform We expect deliveries to ramp up through the year and remain excited for the potential of our new UMS platform and our Liberty flight deck. We continue to make significant investments in internal and development as we continue to advance our progress towards autonomous flight through our next generation flight deck Liberty. Which employs our UMS system. Our next generation UMS system is an advanced aircraft systems management platform designed to monitor and control multiple aircraft subsystems from flight controls to environmental and power systems. In a unified intelligent architecture.

In summary, we were pleased with our strong second quarter results that further built on our recent strong performance. We remain encouraged by the growth outlook for our business supported by strength across our key end markets Momentum for our new products, and an active acquisition pipeline. We remain committed to our strategic priorities with an ongoing focus on maximizing long term value for our shareholders. With that, I will turn the call over to Jeffrey for his prepared remarks.

Jeffrey DiGiovanni: Thank you, Shahram, and good morning to all those joining us. Today, I will provide a high level overview of our second quarter performance including a discussion of working capital, our balance sheet, and our liquidity profile at quarter end. And conclude with comments on our outlook for the business which remains positive given current demand conditions. We generated net revenues of $22.4 million in the second quarter, up 2% from the second quarter last year despite the unfavorable comparison given the elevated F-16 revenues during the second quarter last year as Shahram discussed?

We anticipate a lower F-16 revenues and were able to offset this $7 million headwind by shifting our operations to be more commercial and business aviation set centric, which increased roughly 50% on an organic basis. We have now completed all certifications and testing related to the digital flight control computer and the display generator in support of the F-16 program at our Exton facility. We expect manufacturing levels to normalize to support ongoing shipment levels in the 2026.

Product sales were $14.3 million during the second quarter up from $13.2 million during the same period last year as stronger volumes of aftermarket products, upgrades, to the commercial market and sales to the business aviation market more than offset the decline in the F-16 revenues. Service revenues was $8.1 million down modestly from $8.8 million in the same period last year, due to a decline of nearly $3 million in F-16 service revenues. This was partially offset by growth in the service volumes related to the IRUs and radio product lines. Gross profit was $11.4 million during the second quarter, up 1.5% from the same period last year.

The improvement was driven by revenue growth and a favorable mix within the commercial aftermarket business partially offset by an unfavorable comparison to last year's second quarter given the timing of expense recognition related to the F-16 transaction. As we have discussed previously, we experienced some lumpiness in the timing of expense recognition during the manufacturing transition from Honeywell that impacted our quarterly results. As a result, our second quarter gross margin was 51.1%, down modestly compared to 51.4% last year given the difficult comparison. We continue to expect our gross margins to be in the mid-40% range over the long term with some quarterly fluctuations based on mix.

As our military business ramps back up, which has lower gross margins, we would expect our gross margins to normalize However, as we have discussed, our military business has similar EBITDA margins, to our other businesses given a lower SG&A burden. Operating expense during the 2026 was $6.5 million an increase of 4% from $4.3 million during the same period last year. The increase in operating expenses reflects investments in R&D in support of growth initiatives as well as onetime acquisition related cost associated with the 3 recent acquisitions.

Net income was $3.4 million or $0.19 per diluted share during the second quarter compared to net income of $5.3 million or $0.30 per share in the second quarter of last year. The effective tax rate was 22.6% during the second quarter, up from 19.2% during the same period last year due to our overall growth in the business. Adjusted net income which includes the same adjustments made to adjusted EBITDA in addition to an adjustment for the amortization acquired intangibles, was $4.8 million for the quarter as compared to $5.7 million last year. Adjusted earnings per diluted share $0.27 versus $0.32 last year.

Adjusted EBITDA was $6.8 million during the second quarter down from $7.7 million in the second quarter of last year due to growth investments and timing of expense recognition related to the F-16 transition in the prior year period. Our R&D investments during the second quarter were up roughly $1 million versus the second quarter last year and for the remainder of the fiscal year, we continue to expect to increase R&D spending to support our growth initiatives. Moving on to backlog. New orders in the second quarter of fiscal 26 were $24.7 million and backlog as of March 31 was approximately $87 million and an increase of approximately $7 million over the comparable period.

Backlog represents the value of contracts and purchase orders less the revenue recognized to date on those contracts and purchase orders. The backlog includes committed purchases and excludes potential sole source production orders from products developed under the company's engineering development contracts programs. Now turning to cash flow. During the 2026, cash flow from operations was $10.5 million compared to $3.1 million in the year ago comparable period. Driven by our solid operating results and financial discipline. Capital ex expenditures during the first 6 months of 26 were $2.7 million versus $1.8 million for the year ago period. Free cash flow was $7.7 million during the first half up from $1.3 million in the previous year.

Our strong free cash flow reflects the limited capital needed to grow our business, which results in strong free cash flow conversion. At the end of the second quarter 26, we had total debt of $55.1 million and cash and cash equivalents of $6.8 million resulting in net debt of $48.3 million. Net debt increased $22.2 million from the year ago period despite over $35 million used for acquisitions and capital expenditures in support of the company's growth initiatives. Reflecting strong operating results and strong free cash flow conversion. As of March 31, 2026, we had total cash and availability under our credit line of approximately $49.8 million.

Our net leverage at the end of the quarter was 1.7x despite the recent acquisitions, our modest leverage combined with availability under our expanded credit facility gives us significant financial flexibility to continue executing on our strategic initiatives. Before we move into our Q&A, I would like to provide a current our current thoughts around the outlook for the remainder of the fiscal 26. As previously disclosed, we continue to expect organic revenue growth to be essentially flat year over year given the pull forward of revenue from 2026 into 2025 related to the F-16 production in service revenue.

As we look ahead, we expect third quarter revenues to be in the range of $24 to $26 million That completes our prepared remarks. Operator, we are now ready for the and answer portion of our call.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you like to ask a question, please press 1 on your telephone keypad For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Thank you. And our first question comes from the line of Robert Brooks with Northland Capital. Please proceed with your questions.

Analyst (Robert Brooks): Hey. Good morning, guys, and thank you for taking my questions. Thought it was interesting the commentary that shifted operational mix away from -16 to more commercial aftermarket and business aviation. Just wanted to hear more discussion on that.

Shahram Askarpour: The verbiage makes it seem like you the verbiage makes it seem like it was 1 of the other. And, like, you kind of written--you kind of--the limiting capacity of being able to execute on 16 orders in commercial and aftermarket.

Analyst (Robert Brooks): But I do not think that is the case, but I just wanted to unpack that a little bit more by what you what you meant.

Shahram Askarpour: Yeah. Thank you, Bobby. So effectively, we the approval of log heed for the IPDG Got us to kind of the was getting us to kind of the last couple of weeks of the quarter. there is over 80 hours of testing that goes for these boxes. Each. Before we ship them. And there was not much we could ship when you only had a few weeks left to the end of the quarter. So in anticipation, for that, we did we focused the production more towards the commercial deliveries that we were doing. We would have shipped more F-16 if the thing would have happened a little bit earlier. But, like, early in the quarter.

But it was not an either-or situation. We have capacity here. Well over the numbers that we are delivering right now. With the infrastructure that we have. It was just it was just the way the F-16 product lines that the amount of time it takes at the end before you can test them and ship them. That would have made it difficult. To ship a lot of F-16. In previous quarter, we shipped last year We did about roughly about $10 million of F-16 product lines due to all the pull ins. On average, we think every quarter, the F-16 is gonna be somewhere between $3 to $5 million a quarter. Going forward.

And I think this quarter, we just did over $3 million. So that was kind of a little bit of a shift in the going from $10 million to $3 million, and we had to kind of fill in for it.

Analyst (Robert Brooks): Got it. that is helpful. And that is the especially the clarity on the ad you have, the capacity to execute on both opportunities. Shifting gears to the app. Acquisitions that you have done in the quarter, you have kind of started, as you in the prepared remarks, where they started to build a pretty unique portfolio. I was just curious to hear what has the customer reception been. Have you guys been inbound, after announcing these deals? Like, just wanted to hear what how customer conversations have evolved. Have new customers come into the fold because of the you know, the platform that you are accumulating. Just more color on that.

Shahram Askarpour: So I start with the acquisition we did from Moog. To the best of our understanding, their strategic objectives had shifted over time the STEC product lines that they had acquired a while ago they were kind of moving away from those product lines their autopilot solutions, that they offer in the market are more integrated into their into their cockpit. So they wanted to divest these product lines because they were not really supporting the customer base with it.

After we did the acquisition, we have had significant inquiries from all over the world for people that wanna buy these autopilot. it is this has been going on These product lines are well established STEC Autopilot is well established in the in the general aviation and business aviation markets. So it was it was it was very positive. We got a lot of inquiries and we are in the process of building a backlog so we can deliver on these product lines. To the market. The Honeywell product lines that we got, there is OEM contents in that. I think there is they still supply with still supply some of these to Pilatus. As well as Boeing.

And so that was very positive. Because their experience had not been that great with the parts of Honeywell that produce these equipment. So we have gained a fair amount of momentum here. Especially acquiring this many lines of autopilot product lines. We have acquired from Honeywell. We got the AeroCruise product line. That goes in all the lower end general aviation airplanes, and that is a that is a good revenue generator. That continues to do that. But also, the next generation that we got, which was the KFC 32, which is the new digital autopilot. As well as KFC 25, which was the older generation. Of autopilot Those are installed in over tens of thousands of aircraft.

The KFC 25. So there is revenue associated with maintaining and upgrading those things, The KFC 32 is going to be the workhorse for our own autopilot. it is a it is a very capable digital autopilot. And that Honeywell developed, like, 3-4 years ago. And so in aggregate, it is put us in a position where we I would say we are probably the largest autopilot supplier right now in the market. Covering the spectrum. Of aircraft.

Analyst (Robert Brooks): that is very exciting to hear. And just last 1 for me, is could you compare could you compare your acquisition pipeline today comparatively to 1 year ago's Q1 results? And then could you just speak towards your appetite for more? Obviously, $33 million acquisitions over the past 2 months is a healthy chunk. Trying to get those integrated first before looking for more. Just thoughts there.

Shahram Askarpour: So we have obviously, we have expanded the our engineering group as well as well as contact contracts and program management group. To be able to more easily transfer these technologies in into our organizations and do a bill. We are at the position now. Where we are still looking at acquisitions. We have got we have got the dry powder. To go do that. Obviously, product line acquisitions are good. But we would only do that if they are strategic. To us. We are also looking at acquiring businesses that complement us And that is an active we have got a pretty active pipeline.

And we will continue to evaluate and if we find things that are interest to us, and they are profitable and the good businesses, we would acquire. that is great to hear. I will return the queue. On good quarter.

Operator: Thank you. Our next questions are from the line of Greg Palm with Craig-Hallum. Please proceed with your questions.

Analyst (Greg Palm): Yes. I am curious, Shahram, you talked a little bit about the defense market and some of the opportunities that, you know, may or may not be emerging. Know, in light of the positive backdrop. Maybe you can expand a little bit on kinda what you are seeing, you know, pipeline and what you are excited about, you know, over the next cup couple of years?

Shahram Askarpour: Yeah. I mean, in terms of the I mean, we have I mean, you see what the news is out there, and, you know, the investment that our government is planning to make in the defense area. And there is there is a lot of aging aircraft that resides in our in the within the DOD And the funding they are making available to do upgrades to all of these airplanes. We there is very, very large programs out there, things like the KC 35, There is which is you know, there is hundreds of those, about 600 of them out there. So there is there is a lot of inquiries going on right now.

But also, you know, we talked about this over a year ago, was when we when we did the acquisition on the 16, it put us at the table with the decision my makers that lock it Martin. They are very impressed with the way we have integrated and delivering these equipment to them. And that has opened a lot of new doors for us. So we are we are we are discussing a lot of other unrelated 16 programs. As well as you know, upgrades for the f 16. Looking into the future.

So we see we see a lot of positive feedback that we have had on how we executed on integration of the defense contracting organization into our organization. And we are upbeat that the future revenues we are gonna get from it.

Analyst (Greg Palm): Yeah. Okay. That sounds good. And as it relates to F-16 and maybe you can tie this out to what is baked into the guide for the current quarter. But does it assume you know, I assume it probably some sequential improvement in 16, but does it imply kind of a normalization of revenues, or are we still in a ramp up phase? And if that is not the case, when does, you know, F-16 you know, get to more of a normalized run rate?

Shahram Askarpour: Yeah. I think we are we are there now. Moving forward, like I said, we are looking at about nominally 3 to $5 million F-16 business. A quarter. it is again, there is there is so much you can produce on that product line in a quarter because of the because of the amount of time it takes to put these boxes through the required testing. And once that you know, we are off and running now, that is kind of gonna be the run rate for it.

Analyst (Greg Palm): Okay. I guess last 1 in light of kind of a pickup in some recent acquisitions activity? You know, what is your appetite going forward, and, you know, how does the pipeline specifically look versus maybe previous quarters?

Shahram Askarpour: Actually, pop on is very good. it is you know, Honeywell is obviously there is splitting the company up end of this quarter. So for this quarter, we have not seen any, yeah, any product divestitures. That was at least related to us. But I am pretty sure once that over with, they will divest additional product lines that they have indicated planning to do so. Some of those are of interest to us. But we have we have now obviously opened up our aperture quite a lot. And we are looking at a lot of other companies' divestitures. And you know, some of them are just product lines, some of them are divisions. Which we find interesting.

And we are looking at those. Okay. Perfect. Best of luck. Thanks.

Operator: Our next questions are from the line of Sergey Glinyanov with Freedom Brokers. Please proceed with your questions.

Analyst (Sergey Glinyanov): Good day, gentlemen. So many talks about thiF-16 program, and now we are aware of redesign issues. Just wondering, could it impact on your revenue next couple of quarters or maybe it does not matter what is happening with the program overall.

Jeffrey DiGiovanni: Sergey. Can you repeat that?

Analyst (Sergey Glinyanov): Yes. Sure. So we are aware of 4 x 16 redesign issues this impact on your revenue next couple of quarters or it is it does not matter what is happening with this program. Overall, and you can deliver, any way your products So this is Jeffrey.

Jeffrey DiGiovanni: What I think you are asking is did the is that impact the flux fluctuation in the F-16 is going to go forward? And the answer to that is, right now is it is up and running. The IPDG line is up and running, and that is where we are expecting a roughly 3 to $5 million on a quarterly basis because, again, the amount of time to test the equipment in the chambers it is 80 hours, so that dictates just the amount of time how much we could deliver. The backlog is still there for the keep that in mind for the f 16. So there is still a plentiful amount of backlog to be built.

Over the next few years.

Analyst (Sergey Glinyanov): Okay. Got it. Maybe I missed some point about your recent acquisitions So maybe you can put some colors on what portion of revenue will bring this new acquisitions.

Shahram Askarpour: Yeah. As we said, it is about $10 million year end revenue. For the for the acquisitions that we just did.

Analyst (Sergey Glinyanov): Okay. Okay. Thank you. And the last 1 is you know, in terms of your you know, acquisition pipeline or, recent acquisitions, On your commercial side, do you expect your revenue mix will shift toward products rather than services?

Shahram Askarpour: In the long term. Yes. And that is the that is an ongoing thing. I think the original acquisitions that we did 3 years ago it kind of increased our services significantly from what it was before. We were doing, like, roughly about $4 or $5 million in services and then it became $25 million in services. But as we have done additional acquisitions and as we are developing our next generation cockpits and platforms, That mix is changing. As a percentage our production is getting larger than our than the way that the services are going. Yeah.

Analyst (Sergey Glinyanov): I got it. Thank you. that is all for me. Thank you for taking my question.

Shahram Askarpour: Thank you.

Operator: Thank you. At this time, this concludes our question and answer session. And I will turn the floor back to management for closing comments.

Shahram Askarpour: Thank you, operator. And thank you all for your time and interest in Innovative Aerosystems. Have a great day. Thanks.

Operator: Thank you. And gentlemen, thank you for your participation. This does conclude today's conference. You may now disconnect your lines at this time, and have a wonderful day.