Jaeson Schmidt: Okay. And then, just as a follow-up. How should we think about gross margin trending this year?
Brian O’Toole: Henry, you want to take down?
Henry Dubois: Sure. Thanks, Brian. On gross margin, as you see, when we take a look at the slide we have that shows the incremental gross margin, as we’ve always talked, when you kind of normalize for just kind of the period costs associated with delivering revenues, every incremental dollar yields a very high gross margin. So, when you take a look, we had about $47 million or so of imagery and analytics revenue this past year against somewhere in the neighborhood of about $13 million or so of our actual operating costs in period for the year. So, you’re generating that kind of that 92% incremental gross margin. You had about a 70.1% — or 71% in total gross margin for the imagery and analytics. But as you add more dollars, you’re almost getting about kind of around that 90% incremental. So, as we grow that business, that’s what’s going to help drive us towards the EBITDA positive in the fourth quarter as we’re forecasting.
Jaeson Schmidt: Okay. That’s helpful. Thanks a lot, guys.
Operator: Thank you. Our next question has come from the line of Scott Deuschle with Credit Suisse. Please proceed with your questions.
Scott Deuschle: Hey, good morning. Brian, you said that, I think, 65% of your ’23 revenue is from contracted backlog. Just wanted to check on the confidence interval in getting the other 35% and the line of sight you have to them?
Brian O’Toole: Yes, we’ve got a — as I mentioned, we’re seeing really strong and growing demand worldwide. So, we’ve got the $65 million in contracted and we’ve got very strong visibility in the 2023 revenue forecast. It includes a very strong pipeline a follow-on and new opportunities. Some of the — a good portion of the gap between the $65 million and our forecast is also follow-on contracts from existing customers. So, we are very confident in our forecast this year.
Scott Deuschle: Got it, great. And then, you mentioned there’s a development phase on this $150 million contract you won. If you could just talk a little bit what that entails and how long the development period will last before it moves into the subscription period?
Brian O’Toole: Yes, it will commence, as we said, in the second quarter. And there’ll be over a period of a couple of years activities to develop and integrate certain capabilities with the customer. And so, that will continue, and then there will be a commencement of the subscription service that starts in a few years.
Scott Deuschle: Are you basically building a bespoke constellation for them?
Brian O’Toole: No, this is 100% aligned with our commercial strategy. So, it’s…
Scott Deuschle: Why can’t they just use the app or the SaaS model? Like, why does it take two years? I thought that the SaaS model .
Brian O’Toole: Yes, this customer is already getting capacity from our existing constellation. And the subscription increases significantly with our Gen-3 capability combined with the level of AI intelligence that we’re going to be delivering under the contract as we’re expanding the AI analytics of our platform over the coming years. So, this is a long-term strategy for this customer that’s aligned with our commercial platform and the timing of our investments in both space and software.
