And so we think that that would play a big role because scaling manufacturing production at high levels of reliability and lower cost is key to the success of U.S. against our top adversaries in the world. And the Replicator initiative is all about that. So I think we’re positioned quite well.
Louie DiPalma: Great. And following up on Peter’s question, is the LASSO tranche one award that you were like verbally given, is that now in backlog for the end of this quarter? Or does there need to be the 2024 budget appropriations to be passed in order for that tranche one award to be funded and for it to be formally given to you?
Wahid Nawabi: I think that it’s all based on the budget approval within Congress, Louie.
Louie DiPalma: Okay.
Wahid Nawabi: So many of those orders are not so far reflected in our backlog. I won’t be able to comment on any specific ones, but there is several of our potential opportunities that are still within the budget approval process, and it’s tied up in Congress. And also there is additional, as you know, tranches that the U.S. DoD’s and the White House is planning to provide to Ukraine. And we believe that we should also be great candidates for those tranches as part of the assistance packages.
Louie DiPalma: Great. And one final one. How dependent is the fiscal 2025 — like double-digit growth on major Ukraine stimulus funding?
Wahid Nawabi: Not much at all, Louie. We are expecting our 2025 to be very — another record year for us. Obviously, we’ll provide you the details next quarter, but we’re sitting at a very high level of the backlog right now. Our position in the market is really strong. Our track record of delivering and our top product is performing in the battlefield, real relevant battlefield today is extremely high. Our customer satisfaction level is excellent and high. And I believe that the demand is going to continue to grow and many of those opportunities are not in our current backlog or expectations for next year.
Louie DiPalma: Awesome. That’s it from me. Thanks, everyone.
Wahid Nawabi: Thank you, Louie.
Operator: [Operator Instructions] Our next question comes from Ken Herbert with RBC Capital Markets. Please proceed with your question.
Stephen Strackhouse: Hi, Wahid, Kevin, and Jonah, this is Steve Strackhouse on for Ken Herbert. Congrats on the quarter, guys.
Wahid Nawabi: Thank you.
Jonah Teeter-Balin: Hi, Steve.
Stephen Strackhouse: So, just wanted to start on the seasonality of the business. I was hoping if you kind of discuss what that kind of means for your business moving forward. Historically, the fourth quarter represented 30% plus of your revenue. And looking at the guide, it looks like it’s going to be about flat, either sequentially or year-over-year. So just trying to think about — just trying to get a gauge for how we should think about that moving forward?
Wahid Nawabi: Sure. So, Steve, I’m glad that you noticed that because I’m specifically mentioned in my remarks that due to the fact that we’ve been able to have a very large backlog at the beginning of the fiscal year, it allowed us to level load our factories in terms of production, which helped not only deliver product on an equal increments each quarter. So level load our revenue for the quarters, but also improved our throughput and increased our efficiencies in terms of margins improvements. So all of that has been a very, very positive for us. So we intentionally this past year been fortunate and intentionally decided to level load our factories. And it’s quite remarkable how well we’ve been able to achieve that throughout the whole year.
Given the fact that we’re growing nearly 30% of the midpoint of our guidance for the year, we’ve been level-loaded the year at each quarter almost equal quarters. So that’s really good. Going forward, it obviously is too early to determine that, but we are always trying our best to level load our factories to have a large backlog going into the next year, that allows us to afford all these synergies, that helps us improve a lot of things. Not to mention also that we — our customers would prefer to receive products as early, as soon as possible. So those things all are our intentions and more to come on that for next fiscal year.
Stephen Strackhouse: Great. And then maybe just one more as a follow-up. Just wanted to get your thoughts on the recent CR and the fiscal budget for 2024. It sounds like most people, as we’ve gone through this earnings season, have kind of just continued to push it to the right as far as expectations. Can you maybe just outline some of yours as to kind of where we sit now?
Kevin McDonnell: So, Steve, given our strong backlog in visibility for this fiscal year and fourth quarter, the continuing resolution is not going to impact our revenue for fiscal year 2024 this fiscal year. And since we have a fairly strong backlog, even the first quarter of next year should be quite manageable. However, if this continuing resolution were to elongate and go beyond this fiscal year of AeroVironment, obviously it’s not going to be a good news for anybody. And so from that perspective, we’re hopeful that a bipartisan budget is passed, there is fairly good signs this past couple of weeks in Congress. There are many other experts that know a lot more about that than I, so I won’t speculate. But what I can tell you is that we’re prepared.
We believe that our systems are high priority. We believe that our military really needs these capabilities. And the stockpiles are still quite low in terms of Loitering Munitions and small unmanned systems. And the war in Ukraine and the Middle East still is continuing, and there — we don’t see an end to that anytime soon, from what I’m reading and I’m understanding from what’s going on. So, therefore, I think we’re positioned quite well. But we just need Congress to get over the hurdle and pass a budget, and I think everything will be much better off as a result.
