Scott Searle: Great. Thanks so much.
John Morrison: Thank you, Scott.
Mike Knowles: Thank you, Scott.
Operator: Thank you. And your next question comes from the line of Brian Kinstlinger from Alliance Global Partner. Please go ahead.
Brian Kinstlinger: Great, thanks so much for taking my questions. In the defense market, it’s long been characterized as having long sales cycles, and you’ve talked about the late, both of those are common. You mentioned you expect a return to growth in the second half of the year. Maybe if you could talk about how you think about sales cycles for some of your new products and just some of your products in general and how does that contemplate in expecting a return to growth in the second half of the year?
Mike Knowles: Sure. Thanks, Brian. So, on the commercial side, with our standard product approach in a number of areas, those terms tend to come a little bit quicker. We’re seeing some increased activity in that composable market — composable data center market that I was talking about. The contract, the five-year agreement with FLYHT was a good move for us. They were advancing a new product line based on projected future growth they see. So, that was another one that we’ll be developing a product and roll through to them. The defense side, it will continue to leverage our high technology readiness level products. That gives us a really good capability where we see a technology refresh cycle or upgrade opportunity on any vehicle or platform for us to be able to readily bid a highly mature and readily available solution.
So that gives us some competitive edge in any of those competitions, or allows us if we have a unique discriminating capability to justify a sole source acquisition to OSS. So, those cycles, again, will prove to be short or long depending on when the vehicle upgrade cycles are, but we’ve begun to plot those into the timing into our pipeline so we can start to see those. And now, we’re starting to see the picture start to paint on when we’d expect the opportunities to come to market, which is why we’re feeling the second half of 2024, we should start to see — you’ll start to see some early bookings wins and then that’ll roll into revenue increases. So, as we start to exit Q3 into Q4, we should see consolidated revenues increase over where we have been in the last two quarters.
Brian Kinstlinger: Got it. Okay. And then, you’ve been there now for, I don’t know, what is it, five, six months?
Mike Knowles: Nine months.
Brian Kinstlinger: Nine months, wow. So, now that’s plenty of time to take a look and evaluate the business of where you need to increase your investments to drive growth. Maybe talk about new product opportunities. You already talked about your increased pipeline. How do you bid on more, so to speak, or capture more of the market, maybe anywhere you see investment opportunities to capture that?
Mike Knowles: Yeah, Brian. So, as John mentioned, right, and part of the reason to bring in the lower-margin programs was to help to make sure we could facilitate keeping our products line going forward and keep stable cash in the program and the company. So, we have a number of product development elements planned for the year that will continue to keep us on the forefront of compute storage and switching technology. We did just launch our Gen 5 SCS and our Gen 5 storage products. So, those are both new in the market, so they’ll have a product life cycle run here for a bit of time. We’ll be able to leverage that. And then the second half of your question again, Brian, was on…
Brian Kinstlinger: Just on proposals, like how — the bidding proposal, how are you going to, with that growing market opportunity, go after more business, bid on more work, so to speak?
Mike Knowles: Yeah, no, I appreciate that. So, that’s part of the reason why we take our pipeline and we assess the probabilities as we do, so we can determine where to focus our resources on our highest probability of winning. And so that actually has been quite useful for us. We’ve kind of restructured and reprocessed how we use some of our tools internally to help facilitate getting more proposals out the door more efficiently and more effectively. And then, as I noted, we had the opportunity to add Craig Powell to our sales force. That will significantly increase not only our opportunity growth, but more ability of a seasoned veteran in terms of being able to respond to and conduct captures on programs in the defense market.
And then outside of that, other areas in terms of just general product line growth, there’s interest in moving to some of the international defense and commercial opportunities. Craig will provide us the opportunity to expand additionally into Canada with an existing sales force — with sales capability that we have. So, I think we’re well situated with priorities of our resources and a team to be able to tackle it.
Brian Kinstlinger: Okay. Thank you.
John Morrison: Thanks, Brian.
Operator: Thank you. And your next question comes from the line of David Williams from Benchmark. Please go ahead.
David Williams: Hey, good afternoon, and thanks for letting me ask the question.
John Morrison: Sure.
