Yahoo Finance

David Rosenberg

Thank you, Scott, and good morning, everyone. Let's review how each of the segments contributed, starting with Textron Aviation. Revenues at Textron Aviation of $1.2 billion were up $24 million from the first quarter of 2024, largely reflecting higher aftermarket revenue of $27 million. Segment profit was $127 million in the first quarter, down $16 million from a year ago, primarily reflecting the mix of aircraft sold, partially offset by higher aftermarket volume.
Backlog in the segment ended the quarter at $7.9 billion. Moving to Bell, revenues were $983 million, up $256 million from the first quarter of 2024. The revenue increase in the quarter was driven by higher military revenues of $154 million, primarily due to higher volume from the US Army's FLRAA program and military sustainment programs. and higher commercial revenues of $102 million, primarily due to higher volume and mix.
Segment profit of $90 million was up $10 million from a year ago, primarily due to higher volume mix of products and services. Backlog in the segment ended the quarter at $7.1 billion. At Textron Systems, revenues were $296 million, down $10 million from last year's first quarter, largely due to lower volume, which included the impact of the cancellation of the shadow program in 2024, partially offset by higher volume for the Ship to Shore Connector program.
Segment profit of $40 million was up $2 million from last year's first quarter. primarily due to lower research and development costs, partially offset by lower volume. Backlog in the segment ended the quarter at $2.3 billion. Industrial revenues were $792 million, down $100 million from last year's first quarter largely due to lower volume and mix.
Textron Specialized Vehicles revenues decreased $62 million, reflecting lower volume and mix, primarily in golf and context revenues decreased $38 million, largely due to lower volumes. Segment profit of $30 million was essentially unchanged from the first quarter of 2024 as the impact of lower volume and mix was offset by the benefit of cost reductions from restructuring activities.
Textron eAviation segment revenues were $7 million in the first quarter of 2025 and segment loss was $17 million as compared with a segment loss of $18 million in the first quarter of 2024. Finance segment revenues were $16 million and profit was $10 million in the first quarter of 2025 as compared to segment revenues of $15 million and profit of $18 million in the first quarter of 2024.
Moving below segment profit. Corporate expenses were $43 million. Net interest expense for the manufacturing group was $25 million, LIFO inventory provision was $29 million. Intangible asset amortization was $8 million and the nonservice component of pension and postretirement income were $66 million. Our adjusted effective tax rate for the first quarter of 2025 was 15.3%. For the full year, we still expect a rate of 18%.
During the quarter, we repurchased approximately 2.9 million shares, returning $215 million in cash to shareholders. To wrap up with guidance, we are reaffirming our expected full year adjusted earnings per share to be in a range of $6 to $6.20. We also expect full year manufacturing cash flow before pension contributions of $800 million to $900 million.
That concludes our prepared remarks. So, operator, we can open the line for questions.

Question and Answer Session

Operator

(Operator Instructions)
Robert Stallard, Vertical Research.

Robert Stallard

Thanks so much. Good morning. Scott, maybe to start with you. On the Arctica disposal, congrats on getting that done. Are you considering any further portfolio actions here?

Scott Donnelly

Nothing that we're announced here, Rob. We always look at the portfolio, but we certainly would never preannounce.

Robert Stallard

Okay. And then the other major issue, of course, at the moment is tariffs and the trade war. And I was wondering if you've given any consideration to what the impact could be on the Textron businesses going forward from here?

Scott Donnelly

Sure. Look, I think the tariff issue is one that everybody is talking about. I would say that when you look at our businesses, First of all, our largest business is in the aviation space, whether it's fixed wing or rotorcraft, and we are principally a North American manufacturer, the vast majority of that manufacturing is in the United States. Certainly, we have operations in Mexico and in Canada.
The good news is that with the USMCA compliance, we're not having tariffs as things are crossing over that border -- we do have quite a process that we were sort of in the middle of just going through and validating USMCA compliance. But I think so far, we seem to be in very good shape. So we haven't seen a tariff impact in terms of anything moving amongst our North American operations.
If you look at the Caltex business, as you know, we have manufacturing operations all around the world. You need to be close to those OEMs, but as a result, all those products that we manufacture in different regions around the world are consumed in those regions around the world. So we're not subjected to tariffs on any of that.
Certainly, in all of our businesses, we do have some parts and suppliers that are either in Europe or in Asia. But so far, the impact of that has been pretty de minimis. And I think we'll just continue to monitor that as the situation evolves. But at this point, we certainly don't see it as being something that's a material impact to the company.

Robert Stallard

That's great thanks a lot.

Operator

Sheila Kahyaoglu, Jefferies.

Sheila Kahyaoglu

Thank you. Morning, Scott and David. And David, I just want to say congratulations on keeping up with the eight-minute type script that Scott and Frank have. So congrats on that with a prepared remark.

David Rosenberg

Thank you. Thank you.

Sheila Kahyaoglu

Scott, maybe first one on Bell, just really outstanding performance there. Revenue is up 35%, equally split between military and commercial, how do you think about the puts and takes on maybe the FLORA revenue contribution and profitability from here?

Scott Donnelly

Sure. So Sheila, I think we had a very big increase, obviously, on a Q1-to-Q1 basis. We did have very strong performance in terms of deliveries on the commercial helicopter side, but we also had a very large increase on the FLRAA program. Q1 was sort of still early in the program. Obviously, we're full run.
At this point, it's not only in our internal level of activity, but a lot more suppliers on board as we're starting to issue drawings and get things on purchase authorizations and actually start to build first parts in many cases. So we're seeing a real step function. I do still believe if you look at FLRAA on a year-over-year basis, it's probably going to be up 20% or so.
So it will be a contributor through the course of the year. I think the margins are roughly in line with where we guided. I think that will be relatively consistent through the course of the year as we see a large mix of the FLRAA program driving a lot of the growth and commercial helicopters. OEM deliveries, as you know, are also tend to be a little bit dilutive to our overall margin rate. But I think all in all, we had a great quarter, and we would expect to continue to see nice growth and solid performance through the balance of the year.

Sheila Kahyaoglu

Can I also ask on industrial, how the Arctica and certain product line sales impact revenues and profitability for the remainder of the year?

Scott Donnelly

Yes. So we'll be down a little bit on revenue. When we did the guide, we assume first quarter, which obviously is revenue in line with what we expected here in we did have some revenue through the balance of the year and expectation that we would need to run this as an aftermarket business.
Obviously, as a result of the sale, which was really our desired outcome -- we won't have that revenue in the next three quarters, but it's a pretty de minimis number. So I think we'll still be in the guide range on the revenue side and probably have a little bit of movement towards the upper end of the guide in terms of the margin.

Operator

Noah Poponak, Goldman Sachs.

Noah Poponak

Hey, good morning, everyone. Scott, maybe you could just talk about the demand environment in the private jet market. Obviously, hard to predict the future. But in the past, when we've had macro concerns that we've at least seen some pause in orders.
Your 1Q book-to-bill was still pretty healthy, even though the equity market highs were early March, but April 2 was after the quarter ended. So I know it's never super useful to break it apart month by month, but just curious to what you're seeing and hearing from your customers?

Scott Donnelly

Well, no, I mean, look, I think as you point out, any time there's a great deal of uncertainty in the world. You can see some folks pause a little bit. we're not seeing a dramatic impact. There's still order activity and flow that's happening, which I think is encouraging. And I do think part of it now is the fact that unlike the last decade or so when you have an uncertainty or a ripple in the system, it's easy for people to say, well, I'll wait till next quarter, I think the backlog situation helps people say, okay, look, I'm talking about an aircraft.
It's going to deliver 18 months from now. So I think it's a different dynamic. When you're thinking about deliveries that are out there 18 months to two years, even as opposed to (inaudible) do it this quarter or next quarter. So yes, some customers are taking a pause, but a lot of other customers are continuing with order activity, and I think we still feel like the demand environment is solid, and we continue to press on.

Noah Poponak

Okay. And then -- maybe you could just give us your updated plan on production and delivery growth through the rest of the year as you continue to recover from the strike but have demand to deliver more airplanes.

Scott Donnelly

Sure. Look, I think we will see the ramp continue as we guided originally. We expected the first half to be a little bit lighter -- to be a little bit later on the margin rate because you had a lot of that disruption still kind of working its way through and aircraft that were in part built last year and still getting delivered through the first of this half of this year. So I still think we're very confident in where we guided and we'll see these a couple of hundred basis points below our guide here in the early part of the year and make up for that in the back half.
The encouraging part is as we leave the quarter, the metrics that our teams track around productivity and attrition and earned hours and all those sorts of metrics that Ron and his guys drive every day, leaving the quarter, we're getting back to kind of where we were in the prestrike.
So I would say that we do feel very comfortable that we've recovered from that disruption and those aircraft that we're now manufacturing largely which will deliver in the second half of the year are seeing the impacts of the productivity and efficiencies that we expected. So that model of sort of a ramp through the course of the year and improving margins, particularly in the back half, I think, is going to be what we're going to see.

Noah Poponak

Okay. Thank you.

Operator

Peter Arment, Baird.

Peter Arment

Yes, thanks, good morning, Scott, Dave. On the continuing resolution, I know you had limited new starts in the first half, but now we've got a full year CR. Any impacts from that on systems or any of the other businesses?

Scott Donnelly

Well, that's a good question, Peter. I would say that in general, no. So when you look at this full year CR, which is obviously a very unusual situation, there were quite a few so-called amendments to that that provided specific guidance that allowed programs to increase, FLRAA is a good example that was in there at the number that we always expected in terms of the appropriation process.
So that's why you're seeing this ramp on the FLRAA side. So I think we're in good shape there. Similarly on Ship-to-Shore Connector, the next tranche of Kraft was in that number. And so that's -- we're in the process of getting that added to the contract work with the Navy in sort of real time here. Other programs look money was appropriated in that FY '25.
So it's there. So we're hoping to understand final resolution here on things like RCV and FTS later on in the year. But the good news is, generally speaking, order flow, contract activity in systems has been looking pretty good so far.

Peter Arment

That's great to hear. And then just a quick follow-up on in Aviation, just the latest on Denali, I saw the -- we saw the GE engine certainly certified in February. How is the rest of the program going?

Scott Donnelly

I'd say the rest of the program is going very well. Peter, the last stone of getting the engine certified is hugely important to us. As you guys know, as we saw delays on that side of the program, we've always continued to reflect test program. But in terms of all the formalities, we would kind of put other things in front of it, like Ascend and some of these Gen 2 on CJ3s and things like that.
So we kind of have -- I would say we have Denali back in the queue here in terms of working through the balance of certification. And as we've always said, the good news is this issue around the engine with a certification was challenging, but the performance has been very, very good. So the aircraft is flying really, really well. We're thrilled with it, and we're sort of back in the queue now with the FAA, and we'll be working through the aircraft level certification.

Peter Arment

Appreciate the details. Thanks.

Operator

David Strauss, Barclays.

David Strauss

Scott, you talked about Caltex, no real tariff impact given the localized production. But how do you think about the demand environment for Caltex given what's going on with tariffs?

Scott Donnelly

Yes, David. Look, it's a good question. And if there's any risk to a lot of the stuff in general, economically, it's more so than tariffs. It is what happens to the macro demand. we try not to -- we don't generally forecast on that. We kind of follow IHS. As you know, it's one of the only business really where we're not the end market guy.
So I don't have any crystal ball to pontificate on what's going to happen to the global automotive markets. But the Q1 numbers were in line, consistent with what we have expected so far that's true in Q2, but what happens to global automotive demand is, I suppose, anybody's guess. And we -- obviously, we'll roll with that one way or the other.

David Strauss

Okay. And Dave, I mean, can you -- it sounds like industrial margin may be a little bit higher. Can you maybe just walk us through if there are any other moving pieces relative to the original guide, maybe corporate is a little bit lower than what you thought for the year, if there's anything else we should know.

David Rosenberg

I mean I think, we would still expect corporate expense to normalize through the year. So we'll maintain our guide of $160 million. Interest expense will continue to trend up slightly throughout the year as we expected, just based on the turnover of our debt at a higher interest rate, and we expect to lower cash on hand, which generates interest income.
On Industrial, I'd say the sequencing remains the same. We talked about as the year went on, on the restructuring impact will continue to take effect and we're starting to see that. So you'll see some sequential growth in the overall industrial number as we go through the rest of the year. And then as Scott said, a slight benefit as a result of the transaction with Arctic Cat that we announced today.

David Strauss

Okay. Are there any proceeds from the powersports divestiture? And are you holding on to that aftermarket piece? Or did that go as well?

David Rosenberg

The aftermarket piece went with the business, and there was some small proceeds that were immaterial that will be in the Q2 results.

David Strauss

Thank you.

Operator

Seth Seifman, JP Morgan.

Yes, hey guys, this is Alex on for Seth. Maybe I wanted to kind of ask a follow-up regarding demand that you guys have kind of seen in aviation. I understand you guys kind of pointed to that there hasn't really been any major changes, but maybe to put a finer point on it and kind of address, I guess, the fractional/NetJet side of things.
Curious if you guys' kind of have any color you could add on that, whether you've maybe seen any changes in kind of that of customer behavior, typically think of them as a little bit more macro sensitive. So curious if you guys could kind of maybe provide some color there?

Scott Donnelly

No, I guess we don't normally try to provide NetJet's guide. I mean we're still -- I mean, NetJets still taking deliveries of aircraft and and that's just still putting new aircraft on order. So I guess I probably won't give a lot of color as far as the NetJet fractional end market. But certainly, order activity continues, deliveries continue. So I don't -- I wouldn't break that out as a specific item one way or the other.

Okay. Understood. And then maybe as a quick follow-up, maybe if we could get kind of an update on how things are trending more recently in the supply chain with regards to aviation. I know you guys talked about an expected improvement in labor productivity following the strike as well. Is everything there kind of trending towards expectations?

Scott Donnelly

Yes. I would say that we still feel very good about where the supply chain side is at Aviation. I think that -- certainly, that's one of the factors driving the improvements in productivity. We don't see nearly as much all station work. parts of there. So the flow is much cleaner. That clearly helps to drive the productivity side. Our attrition rates are also down.
So in terms of training and disruption, new people coming in, we're about the level of employment that we need to execute on the plan. I mean, obviously, there's always a certain amount of hiring going on with retirements and things of that nature. But yes, I would say that the part situation at Aviation is where we expect it to be. It's in much, much better shape than it's been in a long time.
There are always, as you can imagine, supply chain issues that pop up, there always have been issues that pop up periodically. But I'd say at a macro level, the supply chain at aviation is in good shape and our workforce situation is in good shape. And that's what I think will help to drive that improvement in both the volume and the productivity efficiencies and therefore, margins as we go through the balance of the year.

Operator

Myles Walton, Wolfe Research.

Myles Walton

Thanks. Good morning. I'm wondering on systems backlog; it looks like it declined sequentially about in line with your sales. And so maybe, Scott, back to Rob's question, maybe it was Peter's question on the demand in the defense complex. What, if anything, was ordered there? And did you have any books that caused that decline?

Scott Donnelly

No, there were no de-book, guys. I mean we don't usually go into much detail on the systems backlog. It tends to be very lumpy, right, because it aligns with contract awards. So I mean, I talked frankly about Ship-to-Shore is a good example, right? I mean that was in the CR.
We're in the process of negotiating with the Navy that number -- that won't go into backlog until we've definitized that contract. So it tends to be very lumpy, and I wouldn't read anything one way or the other into the system backlog.

Myles Walton

Okay. And on the cash flow statement, could you give some color as to the larger use of cash and operating cash flow from the other category? What was that?

David Rosenberg

Yes, there are really two components. Some additional inventory build at Aviation that will normalize throughout the year. And then just some payment timing at Bell from Q1 to Q2 around some government programs. but nothing really unexpected in either of those. And we will look at -- on the payment timing with Bell we'll get those receipts in Q2.

Myles Walton

Okay, got it, thank you.

Operator

Jason Gursky, Citigroup.

Jason Gursky

Yes, good morning, Scott. I wanted to ask you a quick question about the defense businesses, both at Bell and maybe systems. We're clearly hearing a lot from DoD that the future is going to include a lot more unmanned autonomous and attributable systems. I'm just kind of curious what you're seeing both on the demand side and whether there are new programs of record that are being stood up or whether there's increased usage of OTAs and we've got some nontraditional actors that are coming in.
And in garnering some wins, utilizing some products that they've developed that are unmanned autonomous and attributable. And kind of how your company is responding to this new vector in demand and what that means for R&D and contract types that you might be working on in the future. I'm just kind of curious if there's going to be a bit more IRAD here and firm fixed price contracts going forward.

Scott Donnelly

Sure. So I guess I would say with respect to unmanned, without a doubt, there's a continued focus in that area. Obviously, things like FES are on the horizon, which is all unmanned. I would say that even when you look at platforms like FLRAA, for instance, the Army wants to make sure that, that aircraft can be unmanned.
Now that doesn't necessarily mean they're going to fly it as an unmanned aircraft with 12 guys in the back going into an assault insertion, but relocations and different missions, there might be places where they want that. So certainly, one of the requirements on a new platform like that is that it needs to have the capability to perform autonomously.
You may recall, the good news is we flew the actual original B-280 with safety pilots, obviously, but we flew that on autonomous mission many years ago. So ensuring that the capability is in these platforms for either optionally or unmanned capabilities as becoming very, very standard. In terms of other activity that's out there, look, we've talked in the past about our high-speed VTOL program.
I think we're working with the military sort of what are the next steps of that. So certainly, when you look at technology that's still in that DARPA/sort of special operations, there's activity there, which again is very focused on unmanned capability, whether that's in the CCAs or contested logistics, that continue to be a focus, and we're participating in that area.
So there's no question that unmanned platforms of all types are going to continue to be a focus area. When you look at remote combat vehicle, right? But again, there is an area where we've invested for a better part of a decade for autonomous land vehicles as well. And of course, we have our custody programs and things which we continue to support an unmanned mine sweeping.
So as a company, we have a lot of different programs everywhere from production to working with the DARPA of the world on an unmanned platform. So it will be a continued focal point. And I think we're in a very good place. In terms of contract type, I guess I would say that I continue to see the trend being that when you're in production, that the military will lean towards fixed-price contracts, and frankly, we're fine with that.
When you have a cushion product, you understand it, you know it, I think it's in everyone's interest to try to drive fixed price contracting, but the most development activity. FLRAA a good example, when you're in the EMD case, you're largely cost-plus. Most of these other contract types we are working with earlier development, even if it's both it's developmental, they're tending to stay to the cost-plus or best effort kind of contracting.

Jason Gursky

Right. Okay. That's helpful. And just kind of as a follow-up, one of the things you didn't mention there is attributable systems. I'm just kind of curious on the munitions side or attributable mass seems to be a phrase that we hear quite a bit coming out of DoD these days. And just from a product perspective, what does that mean to you? And is it an area that's of interest to you?

Scott Donnelly

Well, we have some areas in the classified space and IRAD space that are looking at attributable, I guess, most of the stuff for sure that I just mentioned are sort of platforms or derivations of platforms there are certainly much higher dollar value. So those would not fall into a desire for those to be attributable.
But that's not been our historical focus, but for sure, there are some smaller programs that we're executing that would be even more along that attributable line.

Jason Gursky

Appreciate the color.

Operator

Kristine Liwag, Morgan Stanley.

Kristine Liwag

Hey, good morning, everyone. On Bell, we saw a nice positive uptick in commercial helicopter deliveries in the quarter. Can you talk about the demand environment, customer profile, pricing and whether you'd expect this strength to continue?

Scott Donnelly

I would say on the Bell commercial side, the demand is solid. I mean our order activity is good. It's across pretty much all of our models, all of our product lines, everything from the 505 up through the 412s. As you know, we have our initial 525s booked.
We just got Verticon signed a deal with Omni to get 5 to 5 out into their routes to the route proving. So I would say pretty much across the board, whether it's paramilitary, border patrol, medical, oil and gas, we're seeing strong demand across pretty much all of the helicopter product lines.

Kristine Liwag

Great. Thanks. And Scott, if I could add another one on business jets, I mean, on Aviation. Historically, we've seen a strong correlation of US investment spending and demand for medium-sized business jets. And with this administration focused on bringing manufacturing back to the US, are you seeing any early indication of increased demand from corporate clients who may want to reshore manufacturing or anything like that?

Scott Donnelly

As I said, I think we're -- we continue to see a strong demand environment. I don't know if I know how to correlate that to a company that's bringing reshoring per se. But I would say, in general, despite the fact that there's a great deal of uncertainty and without a doubt, the tariff situation is helping create some uncertainty. But I think most companies in the mid- to long term, we feel pretty good about where things are.
And I mean, look, tax policy, obviously, is hugely important. That doesn't get talked about here a lot, just because of all the other things that are going on. But I think most people view the mid- to long term as a favorable environment. So I think that's partly what's driving that is reshoring and growth in the US helping that. It could be. I don't know that I have any anecdotal that would say, hey, this particular company who's reshoring is talking about a yet. But it's a good environment.

Kristine Liwag

Great thank you.

Operator

Gavin Parsons, UBS.

Hi Scott and Dave. This is (inaudible) on for Gavin Pars from UBS. Given the current demand environment for business yet, can you give us some more color on how net pricing and performance have been year-to-date? And if it does align with your expectation for 2025?

Scott Donnelly

Well, as I said, I think the environment for biz jets remains solid. Our order activity continues to flow. You saw that in the first quarter in terms of book-to-bill. And as I said earlier, I think you'll have some people that will take a brief pause here just for some of the uncertainty. But given the nature of the backlog and the overall, I think people's longer-term economic outlook, we continue to see good order activity.

And aviation aftermarket, can you guys give us some more color on the strategy in place for continue to grow the segment and how that's impacting the overall profitability?

Scott Donnelly

Okay. The aftermarket business was up 6% in the quarter, which is good growth. So we see flying hours stays robust. So our service centers are busy. Parts flow into the aftermarket is obviously strong.
So that's a really important part of our overall company. As you guys know, we serve in a huge installed base. And that's largely driven by fly and people are flying.

Perfect. Thank you.

Operator

Ronald Epstein, Bank of America.

Ronald Epstein

Yes, hey, good morning, guys. Maybe changing gears, a little bit. With the Electric Aviation segment, is there an opportunity to take some of the technology you guys are developing in there and like moving it over to some of your other aircraft like, for example, an electrified caravan?

Scott Donnelly

Well, look, Ron, as you know, there's a number of companies out there that are electrifying caravans. It's been sort of one of the preferred choices frankly, for folks that are working in that space because it has just such a huge useful load, right? So to the extent that you have a penalty in terms of battery weight and stuff like that, a caravan can absorb an awful lot of weight and still provide really good performance with a good payload and still hundreds of miles of range even with a lot of battery loads.
So caravans have actually been used by a lot of companies as test beds for this activity. So now again, where that goes? And is it the right answer? Do you have a hybridized version of it? That I think is all still to be determined. But for sure, caravan is one where you can electrify and people have electrified caravans, and we work to support those companies. We're not doing that ourselves. We're working with those guys to support their efforts towards, ultimately, hopefully, certification where you have an electrified caravan.

Ronald Epstein

Now if there's meat on that bone, is that a market need money to get into, I guess that's what I'm getting at, right? Like given that you have in-house technology anyway.

Scott Donnelly

Yes. I mean -- well, I mean I will go to all the gory details here. But I mean a couple of companies we've worked with, and we do have arrangements where I say they're doing the work. We're supporting them and providing information. They would own, let's say, a supplemental type certification that would let you take a caravan and modify it to put it into service as an electrified aircraft.
And we have the ability to take that and incorporate that STC basically into our production line. So if we see sufficient volume, sufficient demand, we would absolutely look at incorporating that and turning that into a production product.

Ronald Epstein

Got it. Got it. And then maybe just one last one, changing gears. Nobody has really asked much about on the M&A front. Is there much out there? I mean you guys are looking at stuff. Defense Tech seems to be a space where there's a lot of interest in kind of software-driven hardware and that kind of thing.
Are you guys thinking about anything like that? Or if you could just give us a broader feel about how you're thinking about the current M&A environment.

Scott Donnelly

Sure, Ron. Look, I mean, we continue to look all the time. We've been in a number of deals, but we do look at what do the multiples look like, what do the earnings look like? And is it something that we can do that would be accretive. And if it's something that we thought we could get a price point where it's accretive, we would absolutely entertain adding things like that obviously, particularly in our A&D space.
But look, I mean, things may be here are a little rocky with some of the uncertainty in the world, but a lot of these deals were just kind of little bit on the nutty side in terms of multiples and not something that we thought could be accretive for our shareholders.

Ronald Epstein

Yes, got it. Alright, cool, thank you.

Operator

Peter Skibitski, Alembic Global,

Peter Skibitski

Good morning, guys. Scott, the release stated that -- and I think you might have mentioned that Bell military sustainment volume was up year-over-year. Can you talk about where that's coming from? I assume maybe it's H1 and V-22, I don't know if it's weighted one way or another, but can you talk about that and maybe if that's sustainable or it was just a timing thing?

Scott Donnelly

Sure, Pete. Look, you're right. I mean it is the legacy -- so-called legacy platform. So H1 and V-22, we continue to have ongoing contracting activity with parts, with PBLs and things of that nature. So that, as you know, is always also a little bit lumpy, right?
We often find ourselves in a situation where we're out there building because we know the demand is there and then just contracting takes a while. And so, when those contracts get definitized stuff that we have that would move from company funded long lead gets put against that contract.
So you always do have a little bit of lumpiness. But yes, it's related to H1 and V-22 programs. But I expect that to continue to be there. These aircraft are flown every day, and they generate a lot of aftermarket demand, and we expect to continue to support that for many, many, many years to come.

Peter Skibitski

Okay. And then I just want to follow up on Jason's comment earlier -- a question earlier about unmanned. But sticking kind of to the unmanned surface vehicle area where you've participated in the past with the CUSV and I think you guys announced the Tsunami family. I just wanted to ask, is this a marketplace on the USG side, that's really growing rapidly. You mentioned you dropped and classified earlier in your comments.
And I asked that because I think there's been a couple of start-ups that have emerged out of stealth mode fairly recently with some money behind them. And so, I'm just wondering if this is an area on the surface side that's really kind of poised to grow or if you're maybe more balanced type of a view and you think it's going to be a few more years of experimentation before we see something there out there.

Scott Donnelly

Well, look, Pete, I do think it's growing. I think the analogy I would go back to when you think about early days of unmanned aircraft systems, the proliferation of those missions and different types and whatnot has grown dramatically from just ISR to weaponization. Obviously, you've got a very long-range, high-altitude stuff, you got very tactical all the way down to almost micro versions of these systems.
So I think you're seeing the same thing happen in the unmanned surface vessel area. Obviously, we've been a player in this from the very, very early days of it with CUSV. It's not surprising that the first applications that everyone knows of that are out there are around mine hunting, this is a place you'd like not to be as a person when you're out there doing mine hunting operations.
So whether it's sweeping or in addiction, that's an area that we've played. We continue to do that, and we work very closely with the Navy and have for quite some time in supporting that mission and also supporting now the integration of new platforms on to those sorts of craft.
I think they have a road map that shows more craft of different types and different missions going into the future. We're working with them on that. All the way to the extreme, and you mentioned it is something like Tsunami, right, which is sort of in that attributable higher volume, lower cost. Again, with different mission payloads going forward. And that's a good example.
Everybody talks about sort of these new companies will and putting money behind it. We've been putting money behind this for a very long time, and we have programs to show for it. So it's -- these things do take investment upfront for sure. But I think Tsunami is a good example shows you can go compete with all these new upstart companies, and we actually won because we, too, have put a lot of money behind this and invested in the future applications.

Peter Skibitski

Great thanks for the color.

Operator

We have no further questions. And so, this concludes today's call. Thank you, everyone, for your participation. A replay will be available until Thursday, May 1 at 11:59 p.m. Eastern Time.
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