Q4 2021 Maxar Technologies Inc Earnings Call
Please wait the conference will begin shortly.
[music].
Good afternoon. My name is Sylvia and I will be your conference operator for today I'd like to welcome everyone to the Max Our technologies Q4, 2021 earnings call and webcast.
All lines have been placed on mute to prevent any background noise and after the Speakers' remarks, there will be a question and answer session.
I'd like to ask a question during that time, Please press star one.
Thank you I would now like to turn your conference over to Jason Gursky, Vice President of Investor Relations and corporate Treasurer. Please go ahead.
Good afternoon, and thanks, operator, welcome to <unk> fourth quarter 2021 earnings Conference call I'm joined today by our company's Chief Executive Officer, Jim Dan Jablonsky, and Chief Financial Officer, Biggs Porter, both will make some opening remarks, after which we're going to open up the line for your questions. We're shooting to wrap up the call in about an hour.
Before we get started a refer listeners to the accompanying slides for today's presentation, which can be found on the company's website at <unk> Dot com. Once there. Please turn to slide two where I would like to remind you that part of today's discussion including responses to various questions may contain forward looking statements, which represent the company's estimates future plans objectives and expected performance at <unk>.
Days date. These statements are based on current assumptions that the company believes are reasonable but are subject to a wide range of uncertainties and risks that could lead actual results to differ materially from the forward looking information you referred to the advisory regarding forward looking statements contained in our quarterly earnings releases earnings call slide deck and the company's most recent MD&A section five.
And in our Form 10-Q , excuse me 10-K on the company's website at <unk> Dot com with that I'm going to hand, the call over to Dan Dan go ahead.
Thanks, Jason and good afternoon, everyone.
Today I'm going to review the key highlights of our performance in 2021 and provide an update on the Legion build as.
As well as the electro optical commercial air program with the National Reconnaissance office.
I will then discuss our priorities and outlook for 2022 and beyond and.
And wrap up by discussing an important ESG topic <unk>.
<unk> product impact on the world.
Biggs will then take over with a review of fourth quarter and full year results as well as our guidance.
Please turn to slide three for a review of key highlights.
We had a very solid year generating top line growth margin expansion and positive free cash flow.
Without the effects of EBIT differed revenues grew 8% and margins expanded over 300 basis points.
Importantly, we generated $60 million of free cash flow from continuing operations and look forward to growth in this metric is work on the leasing Capex program wraps up later this year.
Total company book to Bill ended the year at one times with Earth intelligence tracking above one and space infrastructure slightly below after experiencing solid bookings in 2020.
We had key wins across a diverse set of customers, including the NRO NGA. The U S Army Intel agencies, several key U S allies in a multitude of enterprise customers, representing a who's who of large technology companies.
Importantly, we continued to see increased government and enterprise adoption of our <unk> and other advanced geospatial products, which helped to drive 9% revenue growth in the Earth intelligence segment without the effect of VB differed.
That's roughly $100 million of growth using existing datasets and constellation capacity, demonstrating the company's robust ability to sell products and data as a service as well as the strong demand we're seeing from a broad set of customer verticals.
I'm very pleased with the foundation, we've set with our product and enterprise go to market strategies and expect both to be key drivers of revenue growth in the future.
We also made some key hires across the organization.
Chris Johnson is an experienced leader now running our space infrastructure segment.
Dan Norte came from Amazon in the gaming World and is now driving our product in enterprise efforts in Earth intelligence.
Colin Campbell has a wealth of expertise and global and digital marketing and is serving as our CMO.
And Tom Wayne, who is the space industry veteran with 20 plus years of experience is serving as our chief strategy Officer.
All four of these executives have made immediate impact on the company and will help to drive our growth strategy in the future.
And finally, we continued to improve our capital structure and financial flexibility with the results. We just reported and with the proceeds of an equity issuance in the first quarter that was used to retire debt.
We continued to see significant cash generation in the years ahead, which should drive debt and leverage levels lower.
Please turn to slide four for an update on the Legion program.
Last quarter I walk you through the various phases remaining prior to the first launch and I'm happy to report that we continued to make progress.
The integration of the hardware and initial performance testing of the first two satellites is now complete and we've moved onto environmental testing.
Which again includes thermal vac acoustics and vibration.
All of which are designed to stimulate as much as we can the extreme temperatures and the environment. The satellites will see in space and the vibration acoustics. The satellites will go through during lunch.
In the slide you can see the first of the satellites entering the thermal Vac chamber.
And ops for the second satellite before it was transferred to Palo Alto from our San Jose Metalwork.
In addition to all of this we're also in the process of software validation.
Once these steps are complete we will begin launch campaign activities, including the shipment of the satellites to the launch facility down at the Cape.
And lastly of course on orbit testing in the beginning of revenue generation.
We continue to progress through these steps with no significant exceptions to date. However, we did lose critical testing personnel to Covid quarantine and contact tracing protocols in late December and January when Omicron was spiking.
This absorbed our timeline margin for the May 15th of June 15th launch window.
While we are still working to make that window, assuming no major issues arise the more likely range for the first launch runs from June through July at this point.
We have also made the decision to add a third launch to manifest with each launch carrying two satellites.
Although higher cost we believe it is in the best interest of mission assurance to reduce the concentration of risk associated with the program.
This approach also provides an opportunity to get to our targeted full run rate revenue more quickly on the second set of satellites as we'll be able to better position them in orbit with the launch vehicle.
At this point, we expect the second and third launches to follow the first within three and six months respectively.
Please turn to slide five.
I won't dwell on this slide as I presented it in the third quarter call back in November , but I did want to remind listeners that the Legion satellites will be launching this year represent both replacement and growth capacity to support our guidance for 2022 and beyond.
Importantly, Legion and the existing constellation assets are broad area collectors that allow for monitoring type missions and that when combined with our existing constellation will provide revisit rates of up to 15 times per day.
This type of high resolution highly accurate collection capacity feet wide area, AI and ml modeling.
Sensor to shooter applications and is a key enabler of our ability to drive highly accurate and lifelike <unk> models, which we believe positions Max are well to continue to be an industry leader as customers transitioned from <unk> to <unk> to address critical missions, such as GPS died navigation simulation and training autonomy and network planning.
Please turn to slide six for a quick update on the <unk> program, which we expect will replace the enhanced <unk> follow on program later this year.
As a reminder, we have been a trusted partner of the U S government for over 20 years, delivering commercial capabilities with superior quality cost security and reliability.
And as you've heard me discuss on prior earnings calls, we continue to hear from our government customers the demand for geospatial data and analytics is as robust as ever.
Our customers at the NRO NGA and military services seek to leverage the capabilities of the industrial base to better understand what's going on in every corner of the planet.
Importantly, they are increasingly looking for answers to tough questions and technology solutions not just data.
We believe the investments we've been making in our constellation assets secure ground infrastructure data platforms, <unk> capabilities, AI and ml analytical tools and technology to support relevant sensor to sugar timelines position us well to deliver significant value to our customers.
We are very proud to support the U S government mission and look forward to continuing to work with the NRO as they increasingly adopt commercial geospatial data sources through the <unk> program.
Please turn to slide seven for a discussion of our priorities for 2022.
And Earth intelligence, we are going to be focused on getting the Worldview Legion satellites completed and launched and successfully winning an award on the <unk> program with the NRO.
We will also be focused on further developing our product roadmaps and enterprise strategies. In fact, we're investing an additional $30 million back into the business. This year to improve our SaaS and das offerings double our precision three D coverage and accelerate our mission to be the reference flow for the immersive three D applications of the future.
We're also making strategic investments and recently established a partnership with radiofrequency or RF data and analytics firm who are insight.
The company observes the RF environment with both terrestrial and satellite based sensors using machine learning algorithms to build continuously updated mapping products for government and commercial customers.
By combining Aurora insights RF spectrum capabilities with high resolution imagery advanced AI analytics, and <unk> capabilities, Max <unk> will be able to offer its public sector and enterprise customers more comprehensive and accurate geospatial solutions and insights.
Importantly, this transaction provides a path for Max art to take control of the company in the future months.
Much the same way, we brought broadcom fully into the Max our family back in 2020.
We're excited about the prospects for this technology and about the ability of our team to both source and execute these types of <unk> at these types of transactions.
And space infrastructure will be focused first and foremost on execution.
It's going to be a busy year for the team out in California, as they look to finish building 15 satellites, including the six Worldview Legion.
On the business development side of things, we'll be looking to capture our historic share of commercial communication satellites, where we continued to see a stable market from a unit volume perspective.
We will also be focused on diversifying both our products and our customer mix on.
On the product side, we are making investments and proliferated Leo platforms and technologies and on the customer side, we remain focused on civil and National security pursuits.
As a reminder, we've had some demonstrated success with civil programs like Artemis and continue to believe will be successful with national security programs over time.
And lastly financial flexibility.
We'll be looking to take care of upcoming maturities, maintaining sufficient liquidity to support our growth initiatives and setting ourselves on a path to generate cash to further reduce debt and leverage to our targeted ranges.
Please turn to slide eight.
Thought I'd also provide a reminder, today of the journey we've been on here at <unk>.
As you know 2019, and 2020, we're about resetting and stabilizing the business.
We recovered from the loss of a satellite in a cyclical downturn in the Geo comsat market.
Hold some assets to reduce indebtedness.
2021, and 2022 is the growth inflection period with this year's results a very positive proof point that we're executing on our strategy.
I am, particularly excited about the growth we were able to generate in the Earth intelligence business from our product portfolio demonstrating solid demand for the unique capabilities, we bring to both government and enterprise customers.
As we look out to 2023 and beyond we see an acceleration of growth as Legion provides more capacity and we benefit from the investments, we're making today in product and go to market strategies across both Earth intelligence and space infrastructure.
In the future, we expect to see margin expansion from mix and operating expense leverage.
<unk> levels.
Higher returns on invested capital as we reduce the capital intensity of the business with assets like Legion anymore.
In a more optimized capital structure from solid free cash flow, that's used to reduce debt and leverage.
Please turn to slide nine.
As you recall each of the last several quarters I've taken a few minutes to double click on some of our capabilities and product offerings, including the technologies, we're developing at space infrastructure, our AI and ml capabilities as Earth intelligence and most recently, our burgeoning enterprise business in Earth intelligence.
Today I wanted to spend a couple of minutes to highlight the impact these products have on our customers and broader communities with an ESG lens.
We think of our impact in four main categories.
Data philanthropy climate, and sustainability efforts customer impact and community outreach.
I'll be focusing on the first two today.
Please turn to slide 10, where we highlight one of our largest data philanthropic initiatives. The work, we do with our purpose partners.
Our purpose partners of nonprofits, who work aligns with our corporate values to make the world a better place.
These organizations have deep relationships with <unk> and their staffs understand how to harness the power of geospatial data to further each of their respective efforts.
We've shared detailed stories about our partners and how they utilize Max our capabilities and blog posts and previously published impact reports.
And today I'd like to share our recent experience, we had with one of them.
Please turn to slide 11.
The Amazon Conservation team supports indigenous peoples reserves in the Amazon region to protect non contacted tribes.
Lands to indigenous communities and protect the rainforest.
We have historically supported the team by providing pro Bono access to our satellite imagery through the secure watch platform, which includes both our 20 plus year archive as well as recent tasking.
However, we recently upped our game and help them with a complex problem.
Illegal gold mining is widespread in the Amazon, including in Colombia.
It could have a negative impact on the environment as the toxic chemicals used in the activity threaten local food sources.
Since the pandemic local enforcement agencies have been forced from these areas under threat from illegally armed groups, leaving the river ways, even more vulnerable to illegal mining.
The Amazon Conservation team reached out to Max are to explore potential solutions and we were able to task our high resolution satellites to generate imagery that identified the illegal mining barges.
This evidence was been shared with the Colombian government, who in turn executed our right to arrest the illegal miners sees our chemicals and destroy the barges.
On slide 12, you'll find some of the high resolution imagery, we task that was used as evidence presented to the Colombian government.
This is a perfect example of the power of our capabilities and how they can be used to protect the vulnerable communities as well as one of the most cherished natural resources on the globe the Amazon Basin.
You can find video of the rate plus more on the story in our blog post on our website.
Please turn to slide 13.
Our open data program launched in 2017 helps first responders during natural disasters and it plays a significant role in our data philanthropy initiatives.
Our collection planning team worked to task our industry, leading constellation in affected areas to generate geospatial geospatial data that provides invaluable insights enables first responders to arrive more quickly.
Rescue teams to know precisely where to deploy as they look to save lives and governments to have a source of truth to support coordination and recovery efforts.
Please turn to slide 14.
The Max Our News Bureau is our partnership program with respected and trusted media organizations and our team is in regular contact with hundreds of journalists both here in the U S and abroad investigating stories, providing high resolution satellite imagery to supplement good journalism and working to increase global transparency.
Whether it's the Wall Street Journal, New York Times with the associated press, if you've seen high resolution satellite imagery published in connection with an important story that image was more than likely taken by a max or satellite.
The next four slides provide examples of the types of imagery and analysis that the news Bureau has provided to journalists, including the recent buildup of Russian troops around Ukraine.
Slides 19 through 21 highlight our climate and sustainability efforts with slide 20, focusing our offerings helped to understand the globe at scale, including mapping land and water use monitoring the Arctic and understanding the effects of conservation efforts.
Slide 21 highlights examples of how our offerings enable our U S government customers allies in enterprise customers to timely respond to events to have the greatest impact.
And finally on slide 22 highlights our <unk> capabilities facilitate Earth science and deep space missions, starting with robotic arms, we built for every Mars Rover, including the sample handling assembly on the most recent mission.
Our 300 class platform is being used for tempo a NASA mission that will monitor air pollution across North America on a commercial geo stationary communication satellite.
And lastly, we are currently running a campaign with a worldwide life fund and the British and Arctic survey to detecting count wall risks in the Arctic using our imagery and crowd sourcing products.
The resulting data will inform broader conservation efforts as walrus habitats change with warming global temperatures.
All of that I've shared here today is important not just to the partners, we work with but to every Max our employee.
We are a passionate mission driven team and we believe in utilizing the technologies, we're privileged to work with everyday to provide better outcomes for the Earth and the most vulnerable amongst us.
My sincere hope that these efforts are of value to our investors as well.
And with that I'm going to stop and hand, the call over to Biggs for a discussion of our fourth quarter and full year results as well as our guidance for 2022 and beyond.
Yeah.
Thanks, Dan Please turn to slide 23, where we present year over year comparisons for the fourth quarter.
Our net income for Q4 was $71 million, including a $49 million gain recognized in Q4 from the reversals and overall receivables allowance given.
Given the improved financial positioning of one of our customers in this space of structure segment.
Revenue was roughly flat year over year for the quarter is up 3% for the full year on a reported basis as growth in Earth intelligence was offset by program is maturing at space infrastructure.
Excluding the effects of the enhanced via contract deferred revenue burn off total company revenues increased 8% for the full year driven by recent wins in space infrastructure and product growth to Earth intelligence.
For the full year, excluding the effects of <unk> deferred revenue burn off adjusted EBITDA grew 24% with margins expanding 320 basis points.
Please turn to slide 24, where I will discuss Earth intelligence results without the effects of.
<unk> deferred.
Revenue increased 12% year over year in the fourth quarter, driven primarily by increases from international Defense and intelligence commercial and enterprise customers, while revenue for U S government customers held constant.
Adjusted EBITDA grew 23% with margins expanding 390 basis points driven by the mix of revenue growth.
On a full year basis revenue increased 9% year over year also driven by international Defense and intelligence commercial enterprise customers and adjusted EBITDA grew 14% with margins expanding 170 basis points.
Please turn to slide 25.
Space infrastructure revenues decreased 11% year over year in the fourth quarter as several U S government programs near completion.
Margin expanded 270 basis points driven by the profitability of recent awards offset partially by an increase in SG&A.
Full year revenue increased 3%.
Driven by an increase in revenues from commercial programs as well as lower EAC growth.
The full year results include the charge taken at <unk>, seven satellite, which adversely impacted revenue and adjusted EBITDA by $33 million.
Excluding this charge revenues would have increased 7% and adjusted EBITDA margins would have expanded to 10, 2%.
Driven by solid execution and the profitability of recent program Awards.
We are pleased with performance in the segment outside of that charge, which demonstrates the ability of the team to drive margins to industry standard levels when supported by good mix and adequate business space.
Please turn to slide 26.
The company generated $108 million in operating cash flow from continuing operations in the fourth quarter and invested $78 million in capex.
For the full year, the company generated $294 million in between from continuing operations and invested $234 million in capex, yielding $60 million and free cash flow generation for the year.
Please turn to slide 27.
I would just note quickly that we had roughly 519 million liquidity at the end of the quarter.
And now please turn to slide 28 for a discussion of our 'twenty two guidance.
We expect revenue in the Earth intelligence segment to be between $1 billion $155 million and $1 billion $235 million, which implies 9% growth at the midpoint similar to 2021 growth rate excluding <unk>.
The range is driven by a mix of factors, including our continued product and three D growth efforts CEOC L Award as well as our ability to ramp Legion sales muscle satellites come online.
We set this range a little wider than normal given them, primarily our expectations for the potential for more upside than downside on iOS.
I should note we believe the customer can award <unk> contracts under the continuing resolution.
But may not be able to increase the total awarded as much as they can after our budget is passed.
<unk> was awarded we will consider tightening the range.
And space infrastructure.
We expect 22 revenues to be roughly $700 million or.
Or a 5% decrease from 2021 as several larger U S government programs near completion.
Roughly $600 million of the guidance levels already in backlog, which stands at $865 million at 12 31 21.
Okay.
As a reminder, we remain focused on diversifying this segment further into civil and military and Intel verticals.
Adjusted EBITDA for Earth intelligence is expected to be between $505 million and $570 million, implying 45% margins at the midpoint.
Recall, we had some good book ship business in 2021, and our continued product growth will continue to drive margins higher Earth intelligence, but this growth will be tempered in part by the $30 million, we're investing back into the business that Dan mentioned earlier to drive further product growth in later years $20 million of which flows through <unk>.
<unk> this year.
Adjusted EBITDA in space infrastructure is expected to be in the range of $45 million to $60 million for the year.
Implying roughly 8% adjusted EBITDA margins for the for the year.
This includes $10 million, we are investing in Iran.
Take advantage of the near and long term upside we see in proliferated Leo opportunities on both the commercial and national side.
This $10 million is on top of our base spend.
Corporate and other expenses are expected to remain largely consistent at approximately $85 million for the year.
On a consolidated basis. This all leaves to 2022 revenue guidance at a range of one <unk>.
709 billion to $1 87 billion at.
At the midpoint this implies consolidated growth of 3%.
In line with the consolidated growth levels, we've achieved each of the last two years.
But keep in mind that there is 9% growth at the midpoint in the higher margin Earth intelligence business.
Total adjusted EBITDA is expected to be between $440 million and $520 million.
With total margins increasing modestly.
Due to a shift in the business mix between Earth intelligence and space infrastructure.
At the midpoint this is 13% growth.
Note. This includes the $30 million of incremental investments, we're making back into the Earth intelligence and space infrastructure segments. This year normalizing for that the growth is 20%.
In terms of quarterly cadence, both 2020 and in 2021 and Earth intelligence had strong fourth quarters.
With a drop off in Q1 of the subsequent year. This has been driven largely by the timing of book ship business.
We expect a similar drop off in Q1.
2022, then for revenues and adjusted EBITDA to grow sequentially through the year.
As space infrastructure there'll be some skewing towards the first half of the year, but this is not likely to affect consolidated results materially.
Operating cash flows for 2022 are expected to increase from 2021 to a range of $340 million to $420 million as we continue to improve the cash flow cash flow profile of the business.
Capital expenditures are expected to be between $300 million and $320 million.
<unk> capitalized interest implying year over year growth in free cash flow generation at the midpoint.
As with prior years, the precise timing of cash flows and capital expenditures can vary throughout the year.
Importantly, capex is expected to be higher in 'twenty two than in 'twenty, one given the cadence of work on the Legion program and the cost associated with third launch we added to the manifest as Dan discussed earlier.
Please turn to slide 29.
Turning now to our 'twenty three targets. These remain largely unchanged from the outlook, we provided a year ago. At this point, we expect $110 million and adjusted EBITDA growth from the Earth intelligence segment versus 2021 results.
Driven by increased Legion increased capacity as Legion comes online and continued growth from our product portfolio.
As a reminder, we generated roughly $100 million in product related growth in 2021, and we're making investments. This year that we believe will allow for solid performance in the years ahead.
Our 2023 performance will have multiple drivers, including revenue from Legion continued product growth efforts as well as the <unk> CL Award.
And space infrastructure, we expect $35 million in incremental adjusted EBITDA over 2021 levels, which included $25 million of mixed shift from intercompany work representing.
Representing a slightly more conservative view than the target we provided last year for this segment given the dependency on an anticipated mix of new business needed to be awarded this year.
Our 'twenty two guidance for space infrastructure implies adjusted EBITDA margins of roughly 6% to 9% with a midpoint of seven 5% in.
In 2023, we expect revenues base infrastructure to yield margins in line with the top half of that range.
So altogether, we expect roughly $570 million of adjusted EBITDA in 2023 versus the previous target of $580 million.
Please turn to slide 30.
For free cash flow our.
<unk> III target is $340 million.
Last year, we published a target of $325 million and subsequently noted there will be an additional $35 million expected and interest savings from the equity raise completed after that guidance was published.
A modest change in free cash flow is driven in part by the slightly lower adjusted EBITDA target as.
As well as a slight increase in capex investments for 2023.
As we look out beyond 2023, we see continued growth demand for geospatial data products and services remains robust from both our government and enterprise commercial customers as Dan discussed earlier.
Commented earlier that we were making investments in 2022, primarily interests intelligence to fuel future growth.
While those investments may continue in 2023 and beyond they are anticipated to be more of a self funded by the growth we expect from those investments.
Prospects over the long term in space hardware continue to look promising as governments focused on military and Intel capabilities as well as Earth science and exploration missions and commercial customers look for new ways to exploit the opportunities in this domain to provide communications and business intelligence applications, we feel very positive about.
The number of opportunities in the pipeline.
Overall, we remain very constructive on the outlook for our industry, where we see mid to high single digit growth for the customer verticals we address.
Our goal is to outgrow those rates.
As we continue to make investments to bolster our industry, leading technologies and products.
At this point, we expect long term growth in both of our segments, but higher growth Earth intelligence segment.
Which from a mix perspective would be margin accretive.
Combine this with Opex leverage and we would expect margins to expand beyond 2023.
And finally on cash flow, we expect operating cash flow growth to be driven by adjusted EBITDA growth and lower interest expense recognizing working capital swings can always have pluses and minuses in any given year.
We continue to expect Capex of stepped down to 23 after the Legion launch and remain in a relatively tight range thereafter.
Barring a significant new win requiring additional capabilities.
To wrap up.
We're pleased with the business growth and margin improvements experienced in 2021, and we are on course to our 2023 targets.
And importantly, we don't think will be done once we get there given the very positive backdrop. The industry is seeing and the investments, we're making to further our offerings and position ourselves in the expanding marketplace.
With that I'd like to hand, the call back over to the operator to begin Q&A.
Thank you and as a reminder, if you would like to ask a question. Please press star one I'll pause for a moment to compile the Q&A roster.
And our first question will come from Jason with Jpmorgan.
Please go ahead.
Okay can you hear me.
We can hear you.
Okay. Okay.
Thanks, very much and good.
Good afternoon.
I guess just just to start.
Start out a quick question on the 2023 targets and the change in the Legion.
Launch schedule and whether weather that had a it seems like that had very little or no impact on the outlook for 2023.
Is that.
That fair and B should we then.
I think that the full impact of Legion is kind of recognized in the 2023 guidance or to the extent that there is a further kind of ramp up period beyond.
Yes, Legion will be ramping up during 2023.
So.
Not at a run rate in terms of revenue and margin and cash.
Impact.
Impact.
The accretive impact it will have when it does reach a full run rate so.
As we've said before there is capacity to grow and Legion and so.
Irrespective of even if we were fully.
Operable if you will at the start of 2003 and at a full year in there we'd still expect it to grow in 'twenty four or so.
There is growth coming there.
There was a an impact on 'twenty three in our guidance from the fact that we are launching later than we originally anticipated.
I noted in our last call our gross on the product side has really made up for that and so Legion isn't the only way to get accretion in the business.
We still have so much we can grow from a product standpoint as we've demonstrated.
The <unk> products otherwise.
Okay. Thanks, and then maybe as a follow up question.
When we think about the the declining in Capex.
That's coming in 2023 and beyond.
Where.
Where will investment defocus.
After the Legion constellation is fully built and I guess what are the what are the major opportunities that you think about post Legion.
And maybe even specifically.
Space infrastructure business will there be investments to make it at some point too.
Drives future future growth there.
Yes, absolutely.
When we look at the business and we think about growth.
The smartest place to invest.
Money to create shareholder value. The first place. We look is organic growth those opportunities, where we know we've got good customer contact good adoption of our products and in continued.
Acceleration of how they're using them I think three D and the success we've had with for Eikon is a really good example of that but other earth intelligence products have been growing as well. So we're really pleased to see the investments we've been making there as well as our secured infrastructure in our direct access program with international customers.
As we've gone out to those markets as well.
On the.
Well look.
As we get to continue to Delever and we get to that nominal sort of two to three times as Biggs has talked about before we'll look at inorganic opportunities. We will continue to pay down debt along the way and we will continue to look for different ways to return value for shareholders on the space infrastructure side, we're seeing some really good positive trends with P. Leo constellations and some of the study contracts.
We have been winning and some of the business we're chasing there.
Nothing to announce today, but things are.
Our growing well and we've been increasing our IRA to support that type of business.
We've got really solid robotics and.
Propulsion characteristics for our spacecraft and so we'll continue to think about spark smart investments. There and then we're also making investments as we continue to pursue that.
The U S government business transitioning not just in the civil programs put into the defense and intelligence programs for.
Secured infrastructure like we've had on the Earth intelligence side of the business.
Secure protocols for our facilities and people clearances to be able to do that kind of work as well and we're finding a lot of uptake on our bus design in the space craft heritage that we've got in that market Biggs anything to add on that.
I think that pretty much covered it Dan I think.
One day, we might add an analytics you commented on it.
We are seeing a lot of opportunity to partner with others.
In space infrastructure as well as we pursue new business and is not solely dependent upon our own capabilities, but we.
We bring some significant capabilities.
To play that others don't have and so the teaming opportunities seem to be going up.
Great. Thanks, very much guys.
Our next question will come from Robert <unk> with <unk> research.
Please go ahead.
Hi, good afternoon.
At our up Dan or Biggs I wanted to just get.
An idea if we can figure think about space infrastructure post Legion build I figure you are running a fair amount of that through the P&L now.
$1 billion in revenues down to about 700, what does this business look like once that's done and finished and you win some of the things you are talking about is there a new normal here that we should think about.
Well, we gave guidance in 'twenty, three which is after the Legion program is complete so you can look at that as what.
What.
A fairly near term.
Outlook is.
But beyond that.
Because of all the things that we're pursuing and the opportunities we see we do see it as a growing business now and as I noted the margin rates on it are lower and we will be lower than the Earth intelligence business. So Earth intelligence is.
In all likelihood going to be the much greater driver of consolidated results, but we do expect space infrastructure to be contributing on an increasing basis at that time as we succeed in.
And growing the business and diversifying it as we've talked about it.
Rob the only thing.
Yes.
The thing I would add to that is what we're most focused on being able to grow in those businesses, where we've demonstrated.
Some.
Supported more specialized capabilities because that gives us a better chance to compete there and a handful of those are our power like the power propulsion element Jupiter three those types of very large satellites at the higher kilowatt levels are.
A pretty good platform for us we're building some of the biggest satellites in the world and the high throughput side there.
Propulsion robotics, and then the <unk> bus design, we're finding a lot of derivatives of Legion and some other stuff we've been designing here.
That has got some good customer uptake so far.
Okay.
Just switching over to.
Thinking about <unk>.
Allegiant build out what are the pinch points that are remaining you've gone through some of this in the monologue, but if we could get a little bit more specific.
As to whether it's supply chain hardware testing software, how do you think of those relative to one another.
Yes, so on the first ill disaggregate them, a little bit between launches here, but on the first launch we have all the hardware in that ones within our control so getting through testing as the major feature we've got to get done there and we talk about thermal vac vibration jitter acoustics, all of those kind of things I think I'd note.
Is it in the prepared remarks, where we've been in thermal vac for the better part of a month now the testing process is going as expected with no major issues. So far and that's a really that's a really important step for us. So we're excited about that.
Got it finished software testing and those kind of things, but those satellites are fully integrated they have the instruments I've got all the hardware they need they're going through the testing protocols and when they complete the testing protocols to our satisfaction that is almost shifted the launch range and do launch ops.
On the on the other satellites.
And again, we're doing three launches now not the two.
We expect those to be on about three months center lines. After the first launch.
Up.
Don't have any red flags right now we've got three of the six instruments in.
Expect all the remaining wants to come in through the spring.
No Red flags right now dependent on Covid, that's slow different parts of the supply chain down, but we do expect to have all the hardware for the second launch by the April timeframe.
And all of the.
Hardware for the third launch in time to be able to complete launches this year.
That's not a given there is some risk in that but.
That's what we're driving for and we'd like to like to accomplish that in this calendar year.
Okay, and then just Biggs forgive me for going back to the first question, but just a clarification how much of the space infrastructure revenue and EBITDA in the 23 guide is under firm order right now and what still needs to be awarded.
So.
Sure.
We're not going to give stats out therefore, we allowed for the instant year and if you look at.
Next year, we're pretty much in line with what we've historically been at with about.
<unk>.
As I said.
Yes.
80, blood buzzword, 84% of what.
We have in backlog.
As covered.
For 2020 twos revenue if you look at what that leaves us with.
Is about little less than $300 million of backlog remaining going into 'twenty three okay.
Okay.
It's pretty close to where we were coming out of last year last year were around $320 million.
Opening backlog left going you are projected to be left going into 'twenty. Two so not a big difference here in terms of what we have in.
And backlog going into the next year.
So.
All I can say is it.
Like every other year, it's important for us to go win new business. There is new business in the pipeline and we expect to succeed.
Getting that in support of 'twenty three and beyond.
Right right. Thank you both for all the help.
Youre welcome.
Our next question will come from <unk>, <unk> with BMO capital markets.
Please go ahead good afternoon.
Hi, Dan because obviously a lot happening.
Geopolitically.
Can you put some color as to what that does for the book ship business. I mean are most of your defense customers simply covered within their existing contracts or is that a key driver of incremental book ship business.
Well as you.
Fast it's not just book ship business, but Theres also access business layered on top of that in the past we have seen benefits from Geo political events of the type we're seeing now heating up and we may see some.
From that but we're we're also.
Early compact capacity constrained right now so we'll have to see how that plays out.
Tom.
We have been.
As with the.
Assets the way, they're designed they've been in very high demand in this type of activity and I think that's a good signal for us that we're doing the right thing for our customers both with the assets. We have on orbit, which are the best constellation in the world right now as well as the capacity and type of capacity will be adding with the Legion constellation.
Then I guess beyond that the products that we've also been we do have some upside from the types of products, we've been developing for the three D.
Sensor to shooter applications are in very high demand and we have been ramping up production. There. So we could see some upside there even as we don't have satellite capacity to benefit the current situation.
Okay great.
And just update us on the services business.
Has that been kind of constrains for growth given that said kind of a head count kind of business, where you might be hiring constrained or what kind of growth are you seeing in that part of business.
Yes, that's been a little more challenging lately and it had less to do with it being.
One related to head count, although I think almost all services.
Services companies face that to some extent, it's been more impacted I think across the board by the fact that we're in a continuing resolution.
Harder to get the new programs up and running.
Going there, but I guess, what I'd say is we've been really successful in even as revenue has been a little light there the types of business, we're winning which are architecturally right in line with our strategy, especially as that relates to some of the other big programs. We've got like one world trade and those kinds of analytics programs have been really really positive and again, it's a low margin business. So as revenue goes up and down there it doesn't impact.
The bottom line as much as you would see in the rest of the year consulting side of the business.
Okay, Great and then finally on the timing of the <unk>.
CL contract is that going to be dependent to large extent on the timing of the overall U S budget.
Last or any critical mass.
Yes.
I'll talk about our understanding with everything.
We're not in the government, but our understanding is that the extension of the current program is not a new start.
So that the continuing resolution that's underway now is not impactful if people wanted to continue with those levels.
Or the budget at amounts that they are working with now.
Yes.
The award could drop at any day, we are not aware of any holdups now we do believe we're well positioned for potential upside scenarios and those are probably more dependent on the full appropriations bills being passed.
To be able to fund at those levels and then the numbers that have been.
Put into the budget by the house and Senate are very for commercial imagery for the commercial aspect of this are very we're very positive about that.
The investments we've made not just in the current constellation, but what we're doing with Legion, our secure operations and our long track record of performance are very positive and so we will.
Nothing holding up right now but upper.
Positive scenarios might depend on the full budget for that.
Great. Thanks, I'll pass the line.
Our next question will come from Peter Arment with Baird.
Hey, good afternoon, Dan Good afternoon, Dan Biggs.
Dan maybe just to circle back on just to make sure we understand the Legion kind of move here and obviously on the cloud, but just maybe if you could just go through the.
Adding the third launch to the manifest as kind of the de risking just kind of the key points on why you did that and why it's so ultimately I think probably going to be helpful. Thanks.
Yes.
We continue fully assess all of our programs here at the company and we continually assess.
What the impacts could be on our customers of downside type events type.
<unk>.
And as we can.
Took a look at that we thought.
We want to further de risk Derisk. The program. These are critical assets for our customers National security intelligence customers as well as technology customers that rely on us for their business case in their product development.
And we thought it was appropriate to further derisk. The program at this point this provides better mission assurance for shareholders.
And our customers better mission assurance for us and the cost is in the numbers that we gave out so it's.
It's all contemplated in the 'twenty, two and 'twenty three guidance, we've given we think the business supports it and we think it's the right thing to do.
Okay. That's helpful and then maybe just quickly.
Maybe if you could just give us further update on how break on the growth is going as we think about 2022 I know you've had a lot of success with kind of rolling that out.
Yes, we're really excited about that that being part of our product portfolio.
Being integrated into many of the other things we're doing and that was obviously a very strong contributor to the $100 million of product growth. We saw this year and a big reason we think.
It's appropriate to be investing back into the business for our product suite.
For the three D type capabilities for.
For the enterprise customers as well as the government customers that are coming to rely on that so we're excited about it.
And we don't see anything slowing down in fact were part of those investments are to double that the amounts of <unk> production, we've got going into our base case this year.
Terrific. Thanks, so much.
Keith.
Our next question will come from Ken Herbert with RBC.
Please go ahead.
Hi, good afternoon, Dan.
I wanted to see if I could just follow up on that on the growth you saw in the products business. It seems like that was a source of upside and maybe better than expectations. As you headed into this year, what should we think about in terms of the opportunity to for similar type of upside or growth in that business here in 'twenty two and how are how are you seeing.
Pricing or margins in the products evolve here as you as you start to capture more growth.
And I'll, let biggs chime in on this as well he has got a lot of the details behind the numbers, but.
The $100 million of product growth of 26% CAGR growth, we saw on the enterprise side of the business are being driven by the investments we've made and the high quality of the products. We've had margin expansion throughout the year. So I think as youre seeing that we've held up pricing power pretty well as we've rolled those products out into the market and.
As Biggs gave out the 22% 23 guidance.
We do expect to see product growth moving continuing strongly into the future, which is why we're making the decision to keep investing into it.
For our customers.
Yes so.
It is possible that has the same kind of growth in product.
And 'twenty two that we add in 'twenty one.
So thats certainly one of the.
Potential drivers and our overall range.
So as Dan says, it's very worthy of the investments, we're making and we have high expectations over time.
Julian is that having that continue to be a big driver of long term growth.
I think one thing I'd note on top of that was it was really broad based growth as well it wasn't.
Just sector specific it was across the U S government International Defense and intelligence, our enterprise customers, which really are a who's who of technology and we saw really solid adoption of that three D type of technology and increased usage of it you know a great proof point that we've talked about before is the one world terrain program with the U S. Army that's underwriting a lot of the types of.
Technology, we've been developing but also where we see the future of this propagating across a very important customer like the U S government.
Yes, the 100 million just makes us more than just three D. So it's not the only thing that we're working on and that customers are.
Yes.
Relying upon in showing greater demand for.
Well that's great I appreciate all the color there if I could on space infrastructure as you as you continue to push diversification in civil and and maybe National security customers. There can you just talk about how the pipeline of opportunity is changing maybe what we should watch out for in the next few quarters either in terms.
Bookings there were other ways, we can think about better monitoring your progress.
<unk> success as you look to diversify.
The space infrastructure segment.
Yes.
We've got a very solid commercial business to start with and there is a replacement capex cycle going on so I don't want I don't want people to not think about that as part of how we're thinking about our space business as well really important commercial customers and we've been developing the technology speed and efficiency, including high throughput and other types of satellites to be able to.
To continue to compete there.
Yes.
When we started talking about how we were moving into the defense and Intel market.
Talk about it as building on success of our summer programs and we always said it would be a three to five year story.
We're a couple of years and at this point, we've been booking really good study contracts, we've been getting really good feedback from customers and we've also really importantly, I think been getting noticed by the other primes. So we will see as part of this more partnering with other prime contractors going forward and that will help as we underwrite Iran.
Continued investment in that side of the business.
In terms of.
Milestones and when we get to that.
Nirvana of one third one third one third I think it's going to be a little lumpy as we get there but.
We do expect to see some wins this year and hopefully we'll be able to announce those in the near future.
Great nice quarter and good luck with Legion.
Thank you Sir.
And our next question will come from Matt Sharpe with Morgan Stanley .
Go ahead.
Dan Biggs, Jason Good afternoon, gentlemen, and nice quarter.
Hey, Thanks, Matt good afternoon.
Biggs.
I just wanted to talk a little bit about the cap stack and how youre thinking about that at this point in time, you know you've got a you've got in collecting our cash flow profile now in and there's probably some opportunity here to refi or reduce debt potentially in 2022, but overall whats the strategy at this juncture.
Could there be some upside here in 2022 as a result of it.
Yes, so actually I'll, let Jason chime in here.
As Dan has already commented were still focused on.
Delevering first and foremost over time and getting the leverage down to the two to three turns.
Turns kind of level.
There is opportunity to continuously to improve the cap structure as we go through time other than that and I'll, let Jason.
Yes.
Alright, Thanks, Biggs, yes, as you can expect we can't really comment on the timing of such things, but I think it's pretty clear if you.
Looking at some of our debt securities that are out there today, our notes are trading.
Trading pretty tight.
Suggesting that there is an opportunity here for us to improve our cost of capital.
And.
I suspect given what Dan had to say at the outset of the call here that we're going to be looking to shore up some of these near term maturities, particularly.
Given the higher coupon rates that we see on some of those and afford ourselves an opportunity to reduce our overall cost of capital and as we look out to the future that two to three turns is.
Big focus item for us at this point, we are all committed to getting to that level and then coming back to you all and assessing where we go from there and looking at our both.
Our organic and inorganic opportunities at that point.
More to come certainly a big focus item for us and.
Something we've put in.
And our own internal expectations to go get some thought worked out on that.
Got it that's very helpful and then Dan.
Nice progress here on signing customers up for Legion and preparing the ground infrastructure ahead of the launch of the constellation just given that progress how should we think about the speed at which you can ramp for revenue on the first two satellites and is there any sort of indication.
How much capacity is either sold or sold out at this juncture for those satellites.
Yes.
Good question, we try not to give too much specifics about which customers and exactly what the size of those contracts are but we did we did announce we had already two capacity sales with other countries.
And many more have been upgrading their ground infrastructure huge kudos to our team here, but our ops teams got ground infrastructure work done even during COVID-19 . They traveled to a lot of places around the world and got everything ready for Legion. So thats been on track and they're a really important piece of work we got done last year.
We're seeing strong demand signals are sales and marketing teams are of course at work.
<unk>.
Some of that's modeled into the 22 and 'twenty three numbers that Biggs gave.
But.
Assuming some level of Legion derive growth this year.
<unk>.
The guidance range is probably just a little wider than normal but.
We're seeing some really really positive signals here, we've got a got to complete the programs get them checked out on orbit and get them producing revenue as expeditiously as we can at this point.
Got it thanks.
Thanks, Matt.
Our next question will come from Keith Osterlund with Tristan.
Security.
Hey, good evening, Thank you for taking our questions.
In space infrastructure in the past you've referred to a target of potentially getting to a level of 10% margins in the segment is that still the goal and where do you see additional opportunities to expand margins in the segment beyond the expectations you set for 'twenty, two and 'twenty three.
Yes.
It remains the goal obviously, depending on the program mix, we get and the timing of it and how well the business is performing.
Little bit lumpier going through.
We always said the first piece and the turnaround was to get to breakeven and then we grow from there I think we've had some good program mix is newer programs have come in and some harder.
Harder performing programs that started rolling off and so that we've seen some of the margin expansion. There we're going to be watching that really closely as we got into the future here.
Particularly as we think about what types of programs.
Bid for and how aggressively we work on what we want to do there but.
A 10% business is pretty close to what our.
Competitive set does out there.
We think there are some great trends in our favor with the investment space both on the commercial side and in the National security infrastructure.
That should provide a sort of a nice back wind as we.
Look to capture more business and increase the performance of the business.
What we showed.
That in my comments.
With good business base and mix, we can be at 10%.
But we are also in.
And the guidance for 'twenty two 'twenty three you talked about being under that driven by lower volume, especially in 'twenty, two and in some mix shifts.
So it is going to vary.
Volume and mix.
But as Dan says getting getting to 10% stays the objective.
That's what we think the long term target should be 10% or better yet I would also note that in 'twenty, two we're investing $10 million back into the business thats flowing through appliances. This year.
Yeah makes sense, thanks, and then.
Just one more and the current geopolitical environment. It just seems like Theres been a lot more press lately involving satellite imagery, including specifically calling out the provider whether it's Max our competitor. So just wondering have you seen any meaningful change in the competitive landscape as a result of this and have there been any new opportunities or benefits, especially on the commercial side for <unk>.
The increased visibility.
Well first of all kudos to Colin Campbell, our Chief Marketing Officer in the News Bureau team as I mentioned in my remarks, and that is led by Steve Wood here.
They've been doing an awful lot of around the clock work, helping to answer People's questions helped through analysis help explain what's going on and why the satellite imagery.
What's contained in that they've been doing a lot of <unk>.
Emission update reports and so that's been really helpful.
It has I think done a done a great job of continuing to highlight the importance of the types of services and products, we provide as well as the quality and accuracy of the data that we're doing.
And it matches really well into our ESG initiatives, providing transparency and the current situations. So it's been a.
While the situation itself is tough it's I'm really proud of the way our team has been responding there.
In helping solve so it's kind of hard questions.
Great. Thanks for taking the questions.
Yes.
And our next question will come from Chris Quilty with Quilty analytics.
Please go ahead evening gentlemen.
Good evening Jay Chris.
And Jason.
Sure.
Right.
Put me I think back of the queue again.
A question on the Legion program costs I know you gave capex for next year, which is helpful. But obviously, there's a lot rolled into that.
$30 million plus up that's already been added to the program just due to COVID-19 delays and now the incremental Spacex launch cost, which.
List prices $50 million for reuse one should we assume that the incremental on top of the overall Capex program, which I think when we initially started at Legion was sort of positioned as being a third less capex intensive.
The legacy Worldview programs is that still the goal or we can't get quite there and maybe just as an add on on the launch is it fair to assume since Youre go into I think a 53 inclination that.
You can probably do.
Rideshare on that maybe with some star links or somebody else to mitigate costs.
Why don't I take the back part of that first and then I'll, let biggs answer the Capex piece.
One feature of Derisking the programs, we actually get to revenue orbital <unk> faster with the met inclination launches. So thats an important feature here.
<unk>.
So we're excited about that that helps us solve customer problems faster.
There are rideshare opportunities here will be the primary customer on our own launches wed like to handle them that way and there is enough.
And the two Legion satellites to be that prime spot, but if we have some other things or where were working with some partners kind of like sometimes we've traded.
Imagery for value in the past trading some.
Capacity on launches in terms of.
Other third parties, we're working with where it makes sense for us strategically.
A much more exciting to us than just the monetary transaction.
The other probably just.
Side note there as you talked to it before Biggs talks about Capex levels. As these are the first six legions and programs and NRI in the first of its kind of spaced program always take a little.
A little more upfront, but for future legions.
We don't have to repeat the NRA, we don't have to repeat software development we've got.
Test equipment procured and in operation and so the future costs of the Legion constellation will be much more much more in line with what we originally thought as we move forward here.
But overall, yes, okay.
There's probably a few different.
Thanks to say around that.
Question you had.
First off in terms of total program cost with the third launch.
And.
A little bit further delay here the total program cost is over $700 million.
Excluding capitalized interest, having said that though it doesn't change what we think recurring cost would be for additional ages of the future I think it was just a very important point to make so you talked about the efficiency of producing legions.
And what that means to the long term that's still stays intact.
The.
In terms of the cost growth and how it's affecting our guidance.
If you want to look at it display.
I think about <unk> million dollars increase in 22 over 'twenty one in terms of Capex about $60 million of that be associated with the timing on Legion shift from 'twenty, one to 'twenty, two and combined with the third launch cost.
Another factor on Capex growth as the additional product Capex that I think I referred to we would have in <unk> and.
'twenty two as a result of our investments there talked about $20 million expense, but there is $10 million.
In.
And Capex and then.
We haven't talked about it but there's another $10 million, we're spending on long lead.
For Legion of 708, we've talked.
Previously about having spares on the ground, we're not going that route having spares on the ground for future growth.
But we did think it made sense to go ahead and invest long lead.
The event that the demand would be there for 708.
Sooner than we anticipate but.
It's efficient overall to go do that so.
That if you will is the combination of things driving capex in 'twenty two I'll just note one more thing before I stop talking and that is that.
There is a little bit of Capex chuckle over on Legion into 'twenty three so.
Even if the launches all occur this year there are some trailing cash in 'twenty three that has.
Really been the reason why 20 threes capex is a little bit higher than what we had said before.
Hopefully that's the whole waterfront covered there.
And that answer.
Good. Thanks, Thanks for the detail I wanted to switch back over to the space infrastructure business.
You've got a big nut in the C band satellites moving through the satellite and as those exit on a pretty defined schedule that your customer needs to hit can you give us a sense of what that looks like in terms of the roll off of that program.
When it happens.
Magnitude of roll off and when you think about filling the pipeline, obviously, you're investing more in small sats, but on the Geo side.
Okay.
It's a lot more challenging from the perspective that most of the traditional geo operators arent really buy and many geo satellites anymore and the one that that has been Intelsat one of your best customers has made their last four orders from your European competitors in part because you lack a digital payload.
So is there some point at where you need to make that investment in the digital payload or do you shift.
More of your effort into the Leo game.
There is arguably a much bigger up in field.
Hey, Chris This is Jason I'm, just going to started off on the timing of C band and.
And some of the dynamics around backlog that was <unk>.
We addressed that with the first questioner I believe and Biggs walk through some numbers I'd certainly refer you back to that.
The amount of.
Backlog.
They were going to use on the guidance. This year is in line with what we've seen historically the amount of backlog that we're carrying in.
Outside of the current year is in line with what we've seen here over the last couple of years.
And the business development team here is pretty focused on.
Like they have over the last couple of years, making sure that they.
Continuing to build up backlog throughout the year so.
No I don't think we ever want to give you a date certain or a quarter certain on the delivery of the saddle.
A group of satellite so just kind of give you that backlog and keep that in the back of your mind is that this year is shaping up pretty similar to what we've seen here over the last couple of years and go back to the details specific details. It Biggs gave with that first question ill hand, it back over to Dan for some of the other questions.
And Theres a lot to unpack there so if I Miss something happy to have it come back at it but.
Kind of remind everybody for my remarks.
We are working 15 satellite programs through the.
<unk> and Palo Alto this year and Thats everything from the six lesions through the C band through NASA programs.
Big stuff like <unk>.
<unk> three <unk>.
Beyond that we've been winning we've got to keep winning it to keep the facilities at capacity the way. They are this year, but things are humming there.
Standing room, only and a lot of places and.
The test equipment, Everything's running run pretty pretty hot right now, which is good to see.
I think the maybe just kind of talking about the future that you talked a little bit about.
Recap of current constellations versus.
Software defined payloads versus P. Leo.
Or are those types of constellations or other defense type missions and.
We're continuing I think to invest and where we have discriminated capabilities.
We've got solutions that are.
With through our partner ecosystem for software defined satellites, but we're seeing the.
Some customer continued customer demand is the replacement Capex capex gets done for the power platforms, they need and the efficiency of current technology as well. So I think it will continue to be kind of a mix of stuff.
And I don't think its going to.
Everybody over on one side of the field versus the other side of the field, we're going to continue to make the investments where we think it best support the business case and the value for customers and shareholders.
Fair enough and if I can throw one final question two of your emerging competitors in the.
<unk> side of the business have recently scaled back on their constellation plans.
When you look at your future business model do you have any concerns around the demand environment.
That would cause you to look at your capacity requirements or do you see.
Full steam ahead.
Boy I'd say from our chair here the demand environment remains very strong.
And that gives us a lot of confidence in the Legion constellation plus.
Future constellation ideas that we might have going forward.
And there was theres growth capacity, there was always some replacement capacity as well I think the most interesting thing we're seeing off that Chris is not just the satellite capacity itself image by image are stripped by strip, our broad area collect by broad area collect but how thats feeding the product investments we've been making so.
Analyst and AI ready data.
Globally, Gd and secure watch type platform infrastructure.
The three D modeling and the point clouds, and they're not just pretty pictures right. These are the hyper accurate global solutions for <unk> point clouds that are that are unique to Max are right now.
And.
All of that satellite data is feeding that engine and then the analytics that come out the other side of it. So we're really excited by that.
The data quality and accuracy and timeliness of that very much matter and so where we're seeing the satellite capacity questions. It's mostly like how does that feed that chain and get answers to people on a more timely basis to solve mission or commercial needs.
Great.
The office pool on the Walworth referenced so thanks for that.
Yes.
Operator, we've exhausted our time for questions.
So at this point in time going to think both you and the listeners and participants in the call today for joining us.
Certainly look forward to interacting with all of you on our next earnings call and if we have the opportunity to cross paths between now and then obviously look forward to that as well.
Operator back to you to wrap it up.
And that will conclude today's conference. Thank you for your participation and you may now disconnect.
Please wait the conference will begin shortly.
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