What is the expected timeline for technology deployment and cash flow generation from this contract?

Timeline for Deployment & Cash‑Flow Generation

Mobix Labs’ press release indicates that the rail‑inspection program will be rolled out in three phases: design & prototype (Q4 2025‑Q1 2026), field‑testing & certification (Q2‑Q3 2026), and full‑scale commercial deployment (starting Q4 2026). The company has structured the contract with milestone‑based payments, so the first tranche of cash is payable upon delivery of the prototype (expected by the end of Q1 2026). Subsequent payments are tied to successful field tests (mid‑2026) and the commencement of serial production and service contracts, which should begin generating recurring revenue in late 2026‑early 2027.

Trading Implications

• Near‑term catalyst: The prototype delivery in Q1 2026 will likely trigger a modest earnings beat and a short‑term price uptick. Positioning before that window (e.g., buying on dips now) could capture the upside.
• Medium‑term upside: Full‑scale deployment in Q4 2026 opens a new multi‑billion‑dollar rail‑infrastructure market for Mobix. Assuming the contract size is in the low‑hundreds of millions, the incremental revenue could lift FY‑2027 top‑line guidance by ~15‑20 %, supporting a 12‑18 % price target over the next 12‑18 months.
• Risk management: Execution risk remains (technology integration, regulatory clearance). A stop‑loss around the current 20‑day VWAP or a 5‑% downside from today’s price would protect against a missed milestone. Overall, the contract’s phased payment schedule gives a clear cash‑flow timeline, making the stock an attractive speculative‑growth play for investors willing to hold through the Q4 2026 deployment milestone.