Greg Burns: So with these contracts on the terrestrial wireless side, do you have a history of pricing power? Are you able to increase prices typically on renewals? Or are these kind of first time around, so not really sure how it’s going to go. Can you give us any insight into your thoughts on your ability to improve the margin.
Mike Bondi: Sure, I’ll take that. These are contracts in the terrestrial wireless segment that were competitive in nature and they were definitely first of their kind. So this is the first go around. We felt that these were important contracts for us. We wanted to be in this space and we competed and we won the work. And so these are three to five year contracts that in terms of the base award, we had to put in some CapEx upfront. We have to depreciate that as we get closer to the renewal side of it, and we amortize off the CapEx and move into recurring revenues, we do expect to see the margin improvement. It is going to take some time. So I think we’re, like I said, about maybe a year or two away from burning that off and we’ll be approaching some of these renewals. But we’re not there yet.
Ken Peterman: I would add — this is Ken, I would add that these — I refer to these sometimes is launch platforms, these incumbent contracts where we’ve done the land grab. We’ve successfully won the state or the geography. And now you might have seen that there’s a $14.8 billion funding bill for Next-Gen 911 that passed the house unanimously. Now, I’m not saying that money is going to come to the states quickly, but it does signal that there is a recognized need to move beyond human-to-human 911 calls today and move to machine-to-machine, so that the Internet of connected things, Fitbit, a camera, and a doorbell camera overlooking a street intersection, these kinds of machines in a 5G connected world can trigger a 911 call when they see a problem.
And that can’t be handled by a human. That’s going to have to be handled by a machine. It’s going to drive the implementation of machine learning AI solutions, data processing, cybersecurity, all those kinds of technologies are going to come into play. And the number of transactions, the number of 911-like calls, the number of transaction is going to go up. So this is a market that is going to experience a technology inflection over the upcoming couple of years and the land grab that we successfully took initially is going to — you can easily see where that will return, improve profitability and growth as the technology inflection point really bends.
Greg Burns: Perfect. Thanks. That’s good color. And I just wanted to ask about there was a — you talked about the restructuring charges. This is also something you’ve called out strategic emerging technology costs. What is that? And is that going to be repeated?
Mike Bondi: Sure. The strategic emerging technology costs are related to a LEO customer of ours that we are taking our technology and upgrading it and enhancing it to meet the specs of their end-use applications. So this was something that we felt was important to show our real customer that we’re ready to partner with them. And as we prepare for, hopefully, production orders to start being placed as their launch schedules are starting to approach that point in time where they need to start putting out some long lead orders. So these are investments that we will continue to make. I would expect these to occur in Q4 and also as we navigate through fiscal ’24. But as we get closer to production, I would say that would be the time where they would start to ramp down.
