Q3 2023 Intuitive Machines Inc Earnings Call

Welcome to intuitive machines third quarter 2023 conference call at this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session. If he would like to ask a question. Please press star one on your telephone keypad.

Speaker 1: Welcome to Intuitive Machines third quarter 2023 conference call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer.

Speaker 1: If you would like to ask a question, please press star 1 on your telephone keypad.

A consultation town.

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Speaker 1: If anyone should require operator assistance during the conference, please press star then zero to signal an operator. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Steve.

As a reminder, this conference is being recorded I would now like to turn the conference over to your host Stephens Inc. Please go ahead Sir.

Speaker 2: Good morning. Welcome to the intuitive machines third quarter 2023.

Good morning, welcome to the intuitive machine third quarter 2023 or call it.

Speaker 2: Chief Executive Officer Steve Altemus and Chief Financial Officer Eric Sally are leading the call to action.

Executive Officer, Steve Ultimate and Chief Financial Officer, Eric Valley are leading the call today.

Speaker 2: Before we begin, please note that some of the information discussed during today's call will consist of forward-looking states.

Before we begin please note that some of the information discussed during today's call will consist of forward looking statements setting.

Speaker 2: setting forth our current expectations with respect to the future of our business, the economy, and other

Setting forth, our current expectations with respect to the future of our business the economy and.

In other bets.

Speaker 2: The company's actual results could differ materially from those indicated in any forward-looking statements due to many facts.

The company's actual results could differ materially from those indicated in any forward looking statements due to many factors.

Speaker 2: These factors are described under forward-looking statements in the company's press release and the company's most recent 10-Q filed with the SEC.

These factors are described under forward looking statements in the company's press release and the company's most recent 10-Q filed with the SEC.

Speaker 2: We do not undertake any obligation to update forward-looking states.

We do not undertake any obligation to update forward looking statements.

We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in the applicable SEC rules and regulations.

Speaker 2: We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in the applicable SEC rules and regulations.

Speaker 2: Reconciliation to the company's GAAP measures are included in the earnings release filed on Form 810.

Reconciliations to the company's GAAP measures are included in the earnings release filed on form 8-K.

Finally, we posted an earnings call presentation on our website, which provides additional context on our financial performance.

Speaker 2: Finally, we posted an earnings call presentation on our website, which provides additional context on our financial performance.

Speaker 2: You can find this presentation on our investor relations page at www.intuitivemachines.com slash investors. Now I'll turn the call over.

You can find this presentation on our Investor Relations page at Www Dot intuitive machine Dotcom flash investors.

Now I'll turn the call over to Steve Alton.

Thanks Steven.

Speaker 3: Welcome everyone and thank you for joining us in today's presentation. I'll provide updates and accomplishments across the company's for business unit.

Welcome everyone and thank you for joining us in today's presentation I'll provide updates and accomplishments across the company's four business units.

Speaker 3: After after I will hand the call to our chief financial officer Eric Kelly to review our financial results for the third quarter of 2023. Let's begin with our lunar

After I will hand, the call to our Chief Financial Officer, Eric Kelly.

Our financial results for the third quarter of 2023.

Let's begin with our lunar access services accomplishments.

During our second quarter call. We mentioned that we believe launchpad congestion was going to determine the priority of launches through the rest of the year.

Speaker 3: During our second quarter call, we mentioned that we believed launch pad congestion was going to determine the priority of launches through the rest of the year.

Speaker 3: In coordination with NASA and SpaceX, liftoff of the IM-1 lunar mission is now targeted for a multi-day launch window which opens on January 12, 2024.

In coordination with NASA and Spacex lift off of the am one lunar mission is now targeted for a multi day launch window, which opens on January 12 2024.

In case of unfavorable launch conditions, such as poor weather backup opportunities are available and will be determined based on the lunar blackout window and other factors.

Speaker 3: In case of unfavorable launch conditions, such as poor weather, backup opportunities are available and will be determined based on the lunar, blackout window, and other factors.

Speaker 3: I'd like to take a moment to expand on this change to add context and perspective. Intuitive Machines completed its lunar lander actually in September , and we were looking forward to launching it in November . We also know better than most that there are inherent challenges of space flight. Schedule changes and mission adjustments are a natural consequence. More detailed specific areas to explore in our next training.

Like to take a moment to expand on this change to add context and perspective intuitive machines completed its lunar lander actually in September and we were looking forward to launching it in November we also know better than most but there are inherent challenges of space flight schedule changes in Michigan adjustments are a natural consequence.

Of pioneering lunar exploration.

Speaker 3: Preparing to return the United States to the surface of the Moon has been an incredible journey. Our lunar lander is performing beautifully in all its testing, and we are authorized to deliver it to Florida later this month.

Preparing to return the United States the surface of the Moon has been an incredible journey are.

Ah lunar lander is performing beautifully and all the testing and we are authorized to deliberate to Florida later this month.

Speaker 3: We have a launch date and the necessary approvals ready to go.

We have a launch date and the necessary approvals.

Ready to go.

Speaker 3: This is a great achievement for the company and a lesson in patience. This delay is a small price for making history.

This is a great achievement for the company in a lesson in patients. This delay is a small price for making history.

Speaker 3: Meanwhile, we are smartly using this extended interval before the planned launch date to continue offline confidence testing.

Meanwhile, we are smartly using this extended interval before the planned launch date to continue offline confidence testing spin.

Speaker 3: Specifically, we've pulled in work plan for pad processing, which included a fit check to our separation ring and spacecraft adapter. We tested the fitment and the separation of the vehicle to the spacecraft adapter. In addition, we still plan to run another mission sequence test to provide additional training for the operations team in preparation for the mission and to do additional testing on the...

Specifically, we've pulled and work plan for pad processing, which included a check to our separation ring and spacecraft adapter, we tested the fitment and the separation of the vehicle to the space craft the Doctor in addition.

We still plan to run another mission sequence pests to provide additional training for the operations team in preparation for the mission.

And to do additional testing on the flight and ground software.

Speaker 3: Finally, we continue confidence testing with our propulsion system in our offline vertical test facility, continually refining propulsion system parameters.

Finally, we continued confidence testing with our propulsion system and our offline vertical test facility.

<unk> refining propulsion system parameters. Our second planned mission is benefiting from all the testing we've done for mission, one and is quickly taking shape.

Speaker 3: Our second planned mission is benefiting from all the testing we've done for mission one, and it's quickly taking shape. Intuitive Machines engineers completed helicopter testing of the LIDAR navigation system for IM-2 at the Kennedy Space Center.

Intuitive machines engineers completed helicopter testing of the Lidar navigation system for I am too at the Kennedy Space Center.

Speaker 3: The use of LIDAR to land our second mission allows us to land in shaded regions of the moon targeted by NASA's Artemis program.

The use of Lidar to land our second mission allows us to land in shaded regions of the moon targeted by Nasa's Artemis program.

Speaker 3: IM-2's propulsion and structural components are in-house undergoing assembly, and we're working on the integration of NASA's ice mining drill and commercial payload.

I am twos propulsion and structural components are in house undergoing assembly and we're working on the integration of massive ice mining drill and commercial payloads.

Speaker 3: Our micro nova hopper, which is designed to search for water ice in permanently shadowed regions of the moon is assembled and undergoing thermal vacuum and vibration.

Our micro Nobel Hopper, which is designed to search for water ice and permanently shadowed regions of the moon is assembled and undergoing thermal vacuum and vibration testing.

Speaker 3: Nokia's lunar 4G LTE network is taking shape, including integration with the lunar surface rover, which will deploy from the lander to test and validate the robustness and performance of Nokia's cellular network communication between the rover and the lander in the harsh lunar environment.

Nokia's lunar <unk> LTE network is taking shape, including integration with the lunar surface Rover.

Which will deploy from the land or to test and validate the robustness and performance of Nokia's cellular network communication between the Rover and the land or in the harsh lunar environment at.

Speaker 3: At the end of the quarter, we submitted a proposal for another contract admission with NASA. This is the CP-22 task order contract under the agency's Commercial Lunar Payload Services Initiative.

At the end of the quarter, we submitted a proposal for another contracted Michigan with NASA. This is the C. P 22 task order contract under the agencies commercial lunar payload services initiative we.

Speaker 3: We believe this is still on target for award notification later this month.

We believe this is still on target for award notification later this month.

Speaker 3: And looking ahead, we're excited to share that this past week, we were selected by a leading International Space Agency for a $16.8 million contract to deliver two payloads through our lunar rover service.

And looking ahead, we're excited to share that this past week, we were selected by a leading international space agency for a $16 8 million dollar contract.

To deliver two payloads through our lunar Rover services. These services include the deployment of the Rover and payloads with our Novus the lender along with data relaying communications services back to Earth.

Speaker 3: These services include the deployment of the rover and payloads with our Nova Sea Lander, along with data relay and communications services back to Earth.

Speaker 3: This award is our largest international payload contract to date and demonstrates our continued focus on diversifying our customer base as we expand into international markets.

This award is our largest international payload contract to date.

And demonstrates our continued focus on diversifying our customer base as we expand into international markets.

Speaker 3: For lunar data services, as we look forward to providing communication capabilities between assets using Nokia's 4G LTE on the lunar surface, we're continuing to expand our lunar data services business line to support the evolving needs of the future cislunar market communications and data between the Earth and Moon.

For lunar data services as we look forward to providing communication capabilities between assets using Nokia <unk> LTE on the lunar surface.

We're continuing to expand our lunar data services business line to support the evolving needs of the future cislunar market communications and data.

Between the Earth and Moon.

Speaker 3: In preparation for our lunar mission, the operations team and mission control has completed all required ground station interface checks.

In preparation for our lunar mission the operations team and mission control has completed all required.

Station interface checks these.

Speaker 3: These checks give assurance that our commercial lunar telemetry and tracking network is operational and prepared to provide near 24-7 coverage of our mission.

These checks give assurance that are come Marshall lunar telemetry and tracking network is operational and prepared to provide near 24 seven coverage of our mission.

And any future tracking missions, whether that's from the civil defense or commercial sectors.

Speaker 3: and any future tracking missions, whether that's from the civil, defense, or commercial sector.

Speaker 3: In addition, the mission control team is continuing to complete payload data transmission and mission sequence testing. These functional practice sessions will continue all the way through the scheduled launch in January to fully appreciate and understand all the nuances in the software and the ground.

In addition, the Michigan control team is continuing to complete payload data transmission and mission sequence testing. These functional practice sessions will continue all the way through the scheduled launch in January to fully appreciate and understand all the nuances in the software and the ground network.

Speaker 3: As mentioned last quarter, NASA's award for the Near Space Network Services contract award is expected in early 2024.

As mentioned last quarter Nasa's Award for the near Space Network services contract or.

Award is expected in early 2024.

Speaker 3: In orbital services, we began customer transition for NASA's five-year, $719 million Omnibus Multi-Engineering Services Contract, or OMS-III, and expect revenue to start December 1st.

In orbital services, we began customer transition for NASA is five year.

$719 million omnibus, multi engineering services contract or one three.

We expect revenue to start December 1st.

To date, we have secured more than 87% of the total workforce for the contract and we'll be ready to support NASA in the next month.

Speaker 3: To date, we've secured more than 87% of the total workforce for the contract and will be ready to support NASA in the next month.

For space products and infrastructure, we believe the energy sector will continue to develop across our space products and infrastructure business why.

Speaker 3: For space products and infrastructure, we believe the energy sector will continue to develop across our space products and infrastructure business lines.

Speaker 3: In the days leading up to this call, Intuitive Machines announced a $9.5 million award from the Air Force Research Laboratory to develop satellite positioning and maneuverability solutions using radioisotope power...

In the days, leading up to this call intuitive machines announced a $9 5 million dollar award from the Air Force Research Laboratory to develop satellite positioning in middle maneuverability solutions using radioisotope power systems. The award feeds into our growing space products and infrastructure business line and this is an exciting opportunity for us.

Speaker 3: The award feeds into our growing space, products, and infrastructure business line, and is an exciting opportunity for intuitive machines to evolve as a dynamic, adaptable, and forward-looking company, diversifying into defense and energy.

Two of the machines to evolve as a dynamic adaptable and forward looking company.

Diversifying into defense and energy.

Speaker 3: During the third quarter, we started our one-year program to develop a radioisotope power system to enable in-space assets like our lunar landers to survive the lunar night, potentially extending lunar missions from roughly two weeks to several years.

During the third quarter, we started our one year program to develop a radioisotope power system to enable in space assets like our lunar landers to survive the lunar night potentially extending lunar missions from roughly two weeks for several years.

Speaker 3: As we mentioned in our second quarter call, Intuitive Machines completed phase one of its fission surface power reactor contract for the Department of Energy and NASA.

As we mentioned in our second quarter call and two of the machines completed phase one of its vision surface power reactor contract for the department of energy and NASA.

Speaker 3: Now the company is proposing Phase 1a, which would extend the contract by eight months for early risk reduction on hardware and design matching.

Now the company is proposing phase one a which would extend the contract by eight months for early risk reduction on hardware and design maturation.

Speaker 3: We expect the work completed during phase 1 and 1A will give the company valuable insights toward Department of Energy and NASA's $4.5 million second phase of the contract.

We expect the work completed during phase one and won a will give the company valuable insights where department of energy and NASA is $4 5 million dollar second phase of the contract.

Speaker 3: Looking ahead, we submitted our bid as the prime contractor for NASA's Lunar Terrain Vehicle Services contract earlier this year for the exploration and development of the South Pole region of the Moon.

Looking ahead, we submitted our bid as the prime contractor for NASA as the lunar terrain vehicle services contract earlier this year for the exploration and development of the South pole region of the Moon.

Speaker 3: The lunar terrain vehicle is a key part of NASA's Artemis program and would be our prime contractor debut in human space.

The lunar terrain vehicle is a key part of Nasa's Artemis program and would be our prime contractor debut and human space flight. We're.

Speaker 3: We're expecting multiple down selected prime contract awards and the expected award timing is now the end of quarter one 2024.

We're expecting multiple down selected Prime contract awards and the expected award timing is now the end of quarter one 2024.

Speaker 3: Finally, Intuitive Machines has expanded its ability to support each of the business units in our fully operational lunar production and operations center at the Houston Spaceport. We opened the facility with a ribbon cutting with over 400 people in attendance, including federal and state representatives, Houston mayor, and city council.

Finally, intuitive machines has expanded its ability to support each of the business units and are fully operational lunar production and operations center at the Houston Spaceport.

We opened the facility with a ribbon cutting with over 400 people in attendance, including federal and state Representatives.

Houston Mayor and City Council members by.

Speaker 3: By moving into our new operations center, the company now has the ability to simultaneously manufacture multiple spacecraft, including up to four lunar land.

By moving into our new operations Center of the company now has the ability to simultaneously manufacture multiple spacecraft, including up to four lunar landers.

Speaker 3: Moving into our new home designed to support NASA's $93 billion Artemis program marks a new beginning on our journey for growth and expansion.

Moving into our new home designed to support Nasa's $93 billion Artemis program marks a new beginning on our journey for growth and expansion.

Speaker 3: With that, I'll turn the call over to the machine's chief financial officer, Eric Kelly. Thank you, Steve.

With that I'll turn the call over to 200 machines, Chief Financial Officer, Eric Kelly.

Thank you, Steve and thanks to everyone joining us today.

Speaker 3: We ended the third quarter with a contracted backlog of $135.2 million.

We ended the third quarter with a contracted backlog of $135 $2 million. This.

Speaker 3: This backlog does not include the $719 million NASA OMS-3 contract, which will be booked as task orders are received. As Steve mentioned earlier, the OMS transition is nearly complete, and we expect revenue to begin in December .

This backlog does not include the $719 million NASA, almost three contract, which will be booked as task orders are received as Steve mentioned earlier, you're almost transition is nearly complete and we expect revenue to begin in December.

Revenue for the quarter was driven primarily by NASA commercial lunar payload services initiative or eclipse as the company concluded third quarter 'twenty, three with $12 $7 million in revenue compared to $10 $3 million for the third quarter of 2022 revenue run rate was down from the first half.

Speaker 3: Revenue for the quarter was driven primarily by NASA's Commercial Lunar Payload Services Initiative, or CLPS, as the company concluded third quarter 23 with $12.7 million in revenue compared to $10.3 million for the third quarter of 2022. Revenue run rate was down from the first half due to updated launch timing and an increase in cost estimates required to successfully deliver our three lunar landings with NASA.

Due to updated launch timing and an increase in cost estimates required to successfully deliver our three lunar landings with NASA.

Speaker 3: Operating loss was a negative $23.2 million versus negative $11.8 million in the year prior period.

Operating loss was a negative $23 $2 million versus negative $11 $8 million in the year prior period.

Speaker 3: This was primarily due to the updated cost estimates as well as public company costs.

This was primarily due to the updated cost estimates as well as public company costs.

Speaker 4: G&A also included $1.4 million of one-time transaction costs related to the equity raise we secured in the quarter. On the cash side, we ended the third quarter with a cash-bound.

G&A also included $1 4 million of one time transaction costs related to the equity raise we secured in the quarter.

On the cash side, we ended the third quarter.

With a cash balance of $47 million.

Speaker 4: Free cash flow in the quarter was an outflow of $14.6 million, of which $7.2 million was operating cash use, and $7.5 million was CapEx.

Free cash flow in the quarter was an outflow of $14 6 million of which $7 2 million was operating cash use and seven 5 billion with Capex.

Speaker 4: The primary use of CapEx was related to the new Lunar Production and Operations Center.

The primary use of Capex was related to the new lunar production and operation Center.

Within financing cash flows we received a $20 million equity investment from an institutional investor in the quarter. This.

Speaker 4: Within financing cash flows, we received a $20 million equity investment from an institutional investor in the quarter. This was partially offset by a one-time member distribution of $3.7 million relating to taxes.

This was partially offset by a onetime member distribution of $3 $7 million relating to taxes.

As we discussed last quarter, the ohms protest along with the timing of major awards have impacted our results. This year. However, none of the significant awards were lost we want homes and are still looking forward to successful outcomes on S. N S LTV and additional clips missions in the first half of 2024 and the <unk>.

Speaker 4: In the interim, we are taking steps to retire risk and manage costs.

Interim we are taking steps to retire risk and manage costs. For example, our SG&A of approximately 9 million per quarter is best in class as we remain capital and cost efficient.

Speaker 4: For example, our SG&A of approximately 9 million per quarter is best in class as we remain capital and cost efficient.

On the portfolio side, we continue to diversify across not only various government entities in civil energy and National security, but also across budgetary line items within each entity suggestion contract moves us into the department of Defense and Steve mentioned earlier, our success with the international market.

Speaker 4: On the portfolio side, we continue to diversify across not only various government entities in civil, energy and national security, but also across budgetary line items within each entity. The Jetson contract moves us into the Department of Defense, and Steve mentioned earlier our success with the international market.

Speaker 4: Additionally, should we be successful with the Lunar Terrain Vehicle Award next year, we will secure a spot on a key piece of infrastructure within the Artemis program and budget capitalizing on the growing lunar and space economy.

Additionally, should we be successful with the lunar terrain vehicle Award next year, we will secure a spot on a key piece of infrastructure within the Artemis program and budget capitalizing on the growing lunar and space economy.

We remain optimistic on the over $3 billion in outstanding proposals and look forward to the Prime contract award decisions on C V 22, and F N F and LTV.

Speaker 4: We remain optimistic on the over $3 billion in outstanding proposals and look forward to the prime contract award decisions on CP22, NSNS, and LPV, while we focus on execution and manage costs efficiently in the interim. With that, operator.

While we focus on execution and managed cost efficiently in the interim.

With that operator, we're now ready for questions.

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Permission tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue and for participants using speaker equipment may be necessary to pick up your handset before pressing the star. He is our first question is from Josh Sullivan with the benchmark company. Please proceed.

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Speaker 1: Our first question is from Josh Sullivan with the Benchmark Company. Please proceed. Thank you.

Hey, good morning.

Good morning, Josh Josh.

Speaker 3: I just want to get your thoughts on NASA's, you know, commitment to the commercial service model. You know, this international lunar services contract, you know, appears to be following that model. And just curious on your current thoughts there.

Just wanted to get your thoughts on Nasa's commitment to the commercial service model. This international linear services contract.

Here's to be following that model and just just curious on your current thoughts there.

Yeah. Thanks for the question Josh is a really interesting last week I was up on Capitol Hill and talking to the.

Speaker 3: Yeah, thanks for the question, Josh. It's really interesting. Last week, I was up on Capitol Hill and talking to the staffers associated with.

The staffers associated with.

You know the authorization and appropriations for Artemis and we see.

Speaker 3: you know, the authorization appropriations for Artemis, and we see quite a bit of support for NASA's programs, and in particular, CLPS, as a precursor to Artemis, as an ability to set a regular cadence.

Quite a bit of support for Nasa's programs and in particular cliffs as a precursor to Artemis.

The.

The ability to set a regular cadence submissions.

Speaker 3: As and if Artemis launches move around on the schedule, as you know, that...

And if Artemis launches move around on the schedule as you know that those missions are highly complex and they have a tendency to move to the right and clips offers an opportunity for for NAFTA to have this cadence submission and activities towards the moon and by doing so we see the international partners come.

Speaker 3: Those missions are highly complex and they have a tendency to move to the right. And CLPS offers an opportunity for NASA to have the escape submission and activities towards the moon. And by doing so, we see the international partners coming up and suggesting to fly their payloads.

Is that suggesting to fly their payloads.

Speaker 3: earlier using the CLPS vendors and the CLPS program as opposed to waiting for manifesting on the Artemis mission.

Earlier, using the clips vendors and the eclipse program as opposed to waiting for manifesting on the Artemis missions. So we're very encouraged about.

Speaker 3: So we're very encouraged about the House and the Senate commitment to CLPS and the Artemis program and the way it's structuring now, CLPS is in a position to serve any, covering any gaps that might occur in delays in the Artemis program.

Passing the Senate commitment to cliffs in the Artemis program and the way it's structured now clips.

Has is in a position to to serve any covering any gaps that might occur in delays in the Artemis program.

Okay.

Speaker 5: And then as far as the Near Space Network contract, does your January mission, you know, help provide any past performance metrics which might be helpful in the scoring for NSN?

And then as far as the the near Space Network contract does your January mission, you know help provide any test performance metrics, which might be helpful. In the scoring for it for NSA.

Speaker 3: Well, I believe that the relevant experience of past performance would have already been considered in the competition and the evaluation of the proposals by January already. So what we have done is included all of the validation work that we've done with our ground sites against the Lunar Reconnaissance Orbiter in space around the moon and validate that the whole system...

Well I believe that the.

Relevant experienced the past performance.

Would have already been considered in the and the competition and the evaluation of the proposals by January already so what we have done is and that included all of the validation work that we've done with our ground sites against the lunar reconnaissance orbiter in space around the moon and validate that the whole system.

Speaker 3: works and is tied together and able to bring the communications back down to the ground. So even prior to flying our first mission in January , we've done the ground work or the leg work to test our ground against the lunar distance communication, and that will go into contributing to our experience when the NSNS is selected.

Works and is tied together and able to bring the communications back down to the ground. So even prior to flying our first submission in January we've done the groundwork.

Or the legwork to test our ground against.

Lunar.

Distance communication in that.

We'll go into our.

Contributing to our experience when the NSS is selected.

Speaker 5: that. And then just one last one. On OHMS, can you just help us with the cadence through 24, how we should think about that?

And then just one last one on <unk> can you just help us with the cadence through through 'twenty four how we should think about that.

Okay.

Yes, Josh this is Eric as you know it.

Speaker 4: Yeah, Josh, this is Eric. As you know, the top line dollar value of the contract is $719 million. That's over five years. There'll be an initial ramp up period of a matter of months. But then after that, we think it'll be pretty steady state, month over month, equally divided over that time period, help contributing to our top line.

The topline dollar value of the contract is $719 million that's over five years.

There'll be an initial ramp up period of you know a matter of months, but then after that we think it'll be pretty steady state month over month.

Equally divided over that time period helped contributing to our topline.

Okay. Thank you for the time.

Thank you Josh.

Speaker 1: Our next question is from Edison Yu with Deutsche Bank.

Our next question is from Edison you with Deutsche Bank. Please proceed.

Speaker 6: Hey, thanks for taking our question. Just one on the, I guess, the government funding situation. Are we concerned at all about the continuing resolution? Anything about the government shutdown that could be impacting the, the, the money side?

Hey, Thanks for taking my question just.

One on the I guess the government funding situation.

We are concerned at all about the continuing resolution.

Anything about the government shutdown that could be impacting.

The money thing.

Good morning Edison Glenn.

Speaker 3: Good morning, Edison. Glad to have you with us. And yeah, great question. Like I said to Josh that was up on Capitol Hill talking to the staffers. And generally, I would say there is quite a bit of optimism and hard work going on to get us through at least a partial CR or a CR for a short term to keep the government open. And so nobody's wanting to shut down.

Glad to have it with us and yeah, great question like I said to Josh on Capitol Hill talking to the staffers and generally I would say there is quite a bit of optimism.

And hard work going on to it.

To get us through.

At least a partial CR or a CR for a short term to keep the government opened and so nobody's wanting a shut down it seems like generally everyone was optimistic.

Speaker 3: It seems like generally everyone was optimistic that CR, at least interim.

A CR at least interim would be approved to get us.

Speaker 3: would be approved to get us time into January before the full CR or budget could be passed. So that was encouraging, and I'm optimistic there. We're well into our transition for the OMS contract with 87% of the workforce on board, or at least.

Time into January before.

<unk> CR or budget could be passed.

So that was encouraging and I'm optimistic there, we're well into our transition for the <unk> contract with 87% of the workforce onboard or at least Uh huh.

Speaker 3: captured, that will continue on. And we think the commitment to Artemis program, the outlook is good for intuitive machines. These CRs tend, and government shutdown associated with it, tend to be short-term outlook. So in the long term, it doesn't look like it's gonna have any effect on the company this year.

Captured.

That will continue on.

And we think the commitment to Artemis program.

The outlook is good for intuitive machines.

<unk>.

The government shutdown associated with it tend to be short term outlook. So in the long term.

It doesn't look like it's going to have any effect on the company. This.

This year.

Speaker 6: Got it. Longer term question, I know you had some advancements on the nuclear side. Do you have any sense of timeline on when we could see some actual re-applications of that? I know typically it's you know when we hear about it it's quite long term but but curious if you have any sort of views on that.

Got it.

Longer term question I know you had some.

Some advancements on the nuclear side.

Any sense of timeline.

When we could see some some actual applications of that I know typically its.

When we hear about it it's quite it's quite long term, but curious if you have any views.

He was on that.

Speaker 3: Yes, so you see in what we outlined, there's been some movement there in three different areas of nuclear space that we've captured, and that's a follow-on to... Well, we're negotiating a follow-on to the fission surface power. That's phase 1A, which is a continuation of phase 1 for another eight months.

Yes, so you see and what we outlined there has been some movement there in three different areas of nuclear space that we've captured and Thats a follow on to well for negotiating a follow on to decision surface power. That's phase one which is a continuation of phase one for another eight months.

Speaker 3: And lining up for phase two, we think that that will eventually, in the long term, like you say, turn into a development activity for a fission reactor. You see the Jetson Satellite procurement, that's a new AFRL.

And lining up for phase two.

We think that that will eventually in the long term like you say turn into a a development activity for efficient reactor you see the jetson satellite.

Procurement, that's a new F R L.

Speaker 3: per contract and what's great about that one is that one can actually grow faster into

Contract and what what's great about that one.

Where does that one can actually grow faster into the into a real satellite. So we will do this first execution on the low power Jetson satellite and then we'll see if they pick that up at the end of the year that's about it.

Speaker 3: into a real satellite. So we'll do this first execution on the low-power Jetson satellite, and then we'll see if they pick that up at the end of the year, that's about a 12-month runway. And then also, that technology...

12 months.

Run rate and then also that technology from the Justin.

Speaker 3: The Jetson contract, we're also developing under a NASA STMD.

The contract work, we're also developing under a NASA S. TMT tipping point award for the radio isotope power system. So theres some dovetailing of technologies between those two and I'm really happy to see that while they're not large dollars for those contracts. What they are is there a commitment.

Speaker 3: tipping point award for the radioisotope power system. So there's some dovetailing of technologies between those two.

Speaker 3: And I'm really happy to see that while they're not large dollars for those contracts, what they are is they're a commitment and some movement in the right direction for an overall cohesive.

Some movement in the right direction for an overall cohesive.

Speaker 3: story in the government about nuclear space and how we should advance in nuclear space. So it's quite an encouraging sign that we're starting to converge on.

Story, and the government about nuclear space and how we should advanced nuclear space. So it's quite an encouraging sign that we're starting to converge on on the types of materials.

Speaker 3: on the types of materials we'll use, the types of systems we'll use, and to make some progress in the design so that maybe the appropriators can make some decisions about the systems of the future.

Materials will use the types of systems will use it to make some progress.

Progress in the design so that.

Maybe the appropriators can make some decisions about the systems of the future.

Okay. Thank you.

Thank you Liz.

Our next question is from Jay Shepard with Cantor Fitzgerald. Please proceed.

Speaker 1: Our next question is from Andre Shepherd with Cantor Fitzgerald.

Hi, good morning, everyone. Congrats on the quarter and that thanks for taking our questions.

Speaker 7: All right, good morning, everyone. Congrats on the quarter and thanks for taking our question.

Speaker 7: I was just wondering if you can give us an update on the IM Missions 2 and Missions 3, just when they're scheduled for or what is the current target for. I know in the past you had mentioned about the second mission being in the first half of next year, possibly into the first quarter, so I'm just wondering if that delay in the IM-1 mission might have an impact on the second mission and so forth. Thank you.

What I'm wondering.

Hey, good morning, guys. So I was just wondering if you can give us an update on the I am missing two and mission Street just win there.

Schedule four or what is the current target for I know in the past you had mentioned about the second mission being in the first half of next year, possibly at the FERC.

Quarter.

Wondering if that delay in the I am one mission might have an impact on the second mission and so forth. Thank you.

Speaker 3: Yeah, I appreciate that. Everyone's interested in launch dates. We are planning three missions in 2024. Obviously, you see how we did with our first mission balancing all the stakeholder needs between NASA and SpaceX and our payload customers. You know, that's a pretty complicated mission.

Yeah I appreciate that.

Everyone's interested in launch dates we are planning three missions.

In 2024, you know obviously you see how we did with our first mission balancing all the stakeholder needs between NASA and Spacex in our payload customers.

Complicated.

Speaker 3: set of negotiations that gets you to everybody's needs and where you can actually launch and land. The other complication, in terms of pinpointing a date for those missions, is really in the orbital dynamics.

Set of negotiations that.

Gesture to everybody's needs and where you can actually launch and.

The other complication in terms of pinpointing a date for those missions is really in the orbital dynamics.

Speaker 3: and trying to get to the South Pole. Specifically, there's seasons for that. So trying to shuffle the missions around and find the particular month we want to go for each of the missions based on not only our stakeholder needs, but on the landing site and the landing site selection.

I'm trying to get to the south pole and specific specifically their seasons for that.

Trying to shuffle their missions around and find that particular months, we want to go for each of the missions based on not only our stakeholder needs, but on the landing site in Atlantic site selection. So we're currently negotiating with NASA on the landing site permission to.

Speaker 3: So we're currently negotiating with NASA on the landing site for Mission 2. And like I said, we have an initial date, and the landing site determination will adjust. We'll move that around, and then as a result, Mission 3 will fall out in a few months following Mission 2. So more to come on that in terms of specific dates as we get closer and as we pinpoint the exact position of the Mission 2 South Pole ice drilling mission.

And like you said, we have an initial date and Atlantic site determination will will adjust we will move that around and then as a result misses III will fallout.

In a few months following mission too so more to come on that in terms of specific dates as we get closer and as we pinpoint the exact position of the mission to South pole ice drilling mission.

Speaker 3: So we're excited about that one, so But you can count on, you know At least our our firm plans are to put mission one two and three in the history books in 2020

So we're excited about that one so.

But you should count on at least our firm plans are to put mission one two and three in the history books in 2024.

Speaker 7: Got it. Thanks Steve. That's super helpful. One question for Eric. With a cash balance now about $40 million as of Q3, would you mind just reminding us the run rate? Looks like cash use in the quarter was about $7.2 million, so pretty low burden rate. But just what is the expected run rate, particularly as you get closer and closer to these missions? Thank you.

Got it thanks, Steve.

Super helpful.

One question for Eric with a cash balance of about $40 million as of Q3 would you mind, just reminding us the run rate, let's say cash used in the quarter. It was about $7 2 million, so pretty low burn rate, but just what is the expected run rate, particularly as you get closer and closer to.

These questions. Thank you.

Speaker 4: Yeah, you bet. So that's a pretty good indication from an operational CAS standpoint.

Yeah, you bet.

So that's a pretty good indication from an operational cash standpoint, there is not.

Speaker 4: There's not necessarily increased cash outflows associated with a mission specifically. Obviously, there's some costs related to launch.

Not necessarily.

Increased cash outflows associated with emission specifically.

Obviously, there's some costs related to launch but.

Speaker 4: But then other costs associated with emissions, such as material procurements and other things, are dying down at that point. So we're not going to see that's not going to cause necessarily a big increase or decrease in operating cash one way or the other.

Then.

Other costs associated with the missions such as material procurements and other things are dying down at that point right. So it's not we're not going to see that's not going to cause a necessarily a.

Big increase or decrease in operating cash one way or the other.

Speaker 4: So I would say from an operational perspective, that's a good indicator. Obviously, from the investing cash flows, you saw the new building was the main use there and we're completing that this quarter. So that should tail off. So we're happy about that. So from that perspective, we can even become.

I would say from an operational perspective, that's a good indicator obviously.

The from the investing cash flows you saw the new building was the main use there and were completing that this quarter. So that should tail off so we're happy about that.

So from that perspective.

You know, we can we can even become even more capital efficient as we talked about right moving forward.

Speaker 4: even more capital efficient as we talked about, right, moving forward. So, I don't know if you have a follow-up on that or if that kind of gives you an idea of what you were looking for.

I don't know if you have a follow up on that if that kind of gives you an idea of what you were looking for.

Yeah, No that's perfect. That's helpful. Thanks, Eric and congrats again on the quarter and I'll I'll I'll pass it on thank you.

Speaker 7: Yeah, so that's perfect. That's helpful. Thanks, Eric. And congrats again on the quarter and I'll pass it on. Thank you.

Thank you Roger.

Our next question is from Austin Moeller with Canaccord Genuity. Please proceed.

Speaker 1: Our next question is from Austin Muller with Kenneclerk.

Speaker 8: Hi, good morning. So, uh, it sounds like you've spent some time on the hill in the past couple of weeks But if we just think about the fiscal year 24 budget as it comes together I mean, we've got a split congress now. And so do you think that

Hi, good morning so.

It sounds like you've spent some time on the hill in the past couple weeks, but if we just think about the fiscal year 'twenty for budget as it comes together I mean, we've got a split Congress now and so do you think that.

Speaker 8: Despite the fact that there's a lot of bipartisan support for NASA, especially Artemis, that there could be some prioritization in the budget for Artemis versus Clips or other related programs just given that It looks like there's going to be a lot more control on spending at this point There is no CAT unit.

Despite the fact that there's a lot of bipartisan support for NASA, especially Artemis that there could be some prioritization and the budget for artemis versus clips or or other related programs just given that it looks like theres going to be a lot more control on spending at this point.

Austin, Good morning, and thanks for the question.

Speaker 3: Yeah, I think there's quite a number of, uh,

Yes, I think there is quite a number of.

Competing priorities within the NASA budget for sure.

Speaker 3: competing priorities within the NASA budget for sure.

Speaker 3: You see the Mars sample return is under independent review and possibly re-planning as it's over-budget. You see the Artemis program having a large price tag and moving to the right.

You see the Mar sample return is under independent review and possibly re planning as this over budget, you'll see the Artemis program.

Having a large price tag.

And moving to the right.

Speaker 3: What we find is there's strong support for Artemis, bipartisan support, as you said. But we do understand that it's going to flip to the right as it's a complex program. So what happens with CLPS in our position is CLPS has been a nontraditional procurement, as you know, and is able to move with some speed and agility at lower cost than these major programs of record. And so CLPS is in a position.

What we find is there is strong support for Artemis bipartisan support as you said, but we do understand that it's going to slip to the right as it is a complex program, so what happens with cliffs and our.

<unk> is cliffs has been non traditional procurement as you know and is able to move with some speed and agility at lower cost than these major programs of record and so clips is in a position to be a tool for.

Speaker 3: to be a tool for appropriators at NASA to keep in the public's mind.

Appropriators at NASA too to keep in the public's mind.

Speaker 3: a regular cadence of missions and the moon as an activity that's of importance. And so it serves to make some near-term accomplishments while the major programs get their capabilities in place and get ready to launch. You see that the other parts of the budget are going to be affected as they figure out which programs are of higher priority and which ones need to be trimmed. Like I mentioned, Mars sample return is probably twice or over budget.

Okay.

Regular cadence submissions.

And the Moon as an activity that's of importance and so it serves to make some near term accomplishments while the major programs.

Get their capabilities in place and get ready to launch.

You see that the other parts of the budget are going to be affected as they figure out which programs are a higher priority and which ones need.

We need to be trimmed like I mentioned more sample returned is probably twice.

Were over budget by 100%.

Speaker 3: by 100% over its life cycle. And so there's some room there that's got to be reprioritized. And then you'll see some of that.

Okay.

Life cycle, and so there's some room there.

That's got to be re prioritized and then youll see some of that trim.

Speaker 3: coming out of the Science Mission Directorate, possibly, and Planetary Science, those areas in terms of what can be accomplished with all these other priorities. So you'll see this mix occurring.

<unk> coming out of the Science Fisher director, possibly.

Planetary science in those areas in terms of what can be accomplished with all these other other priorities. So you'll see this mix occurring.

Speaker 3: But I think in the long term, CLPS is the right type of contract at the right time in history to provide great value to the government and to NASA.

But I think in the long term clips is the right type of contract at the right time in history to provide great value to the to the government.

Asset and so on.

Speaker 3: And so I'm hopeful that we'll see more eclipse-like type contracts as a solution to trimming areas of overspend in NASA budget.

I'm hopeful that we'll see more more clips like type of contracts as a solution to trimming.

There is of overspend in the NASA budget.

Speaker 8: Great, that's helpful. And then it looks like one of your competitors on the CLPS program is trying to get onboard a competing launch vehicle, though like the Vulcan hasn't launched yet. So just what is your thinking there in terms of that timing and how it might impact additional down selects for future task orders on CLPS?

Great. That's helpful and then it looks like one of your competitors on the Eclipse program is trying to get on board a competing launch vehicle, though like the Balkan hasn't launched yet. So just what are your what is your thinking there in terms of that timing and.

How it might impact our additional down selects for future task orders on clips.

Okay.

Speaker 3: Well I think it's fantastic that with the country we have multiple missions aiming to land on the moon in the same kind of timeframe. Currently the Astrobotic mission is set to launch on Christmas Eve on December 24th with a landing on January 20th.

Well I think it's fantastic that country, we have multiple missions Amy to land on the mood in the same kind of timeframe currently the Astrobotany mission is set to launch on.

Christmas Eve on December 24th with a landing on January 20th.

Speaker 3: If all goes well, they'll touch down on the 20th. We're set to launch on January 12th with a landing, believe it or not, on January 19th. So we'll make it there a day ahead. But to have two missions flying in space at the same time aiming for the moon is quite incredible actually.

If all goes well we'll touchdown on the 20th we're set to launch on January 12, where the landing believe it or not on January 19th So we'll make it there.

Jay ahead, but to have two missions flying in space at the same time Amy.

Aiming for the Moon is quite incredible actually and Austin, you know I think we've talked before about.

Speaker 3: And, Austin, you know, I think we've talked before about our particular mission and how our propulsion systems design and the kind of trajectory that we fly gets us to the moon in about four and a half days with about one day of loiter. And that's how we're able to land.

Our particular mission and how our propulsion systems design and the kind of trajectory that we fly gets us to the moon at about four five days with about one day of loiter and Thats, how were able to land roughly a week after.

Speaker 3: you know, roughly a week after we launched.

After we launch, whereas the other trajectories used by other clips vendors tend to be a more secure this route to the moon using gravity assist with a lower specific impulse propulsion system.

Speaker 3: whereas the other trajectories used by other CLPS vendors tend to be a more circuitous route to the Moon using gravity assist.

Speaker 3: with a lower specific impulse propulsion system that takes up to 30 to 60 days to get to the moon. And that's what the big disparity is between the two types of missions.

Takes up to 30 to 60 days to get to the mood and that's what the big disparity is between the two types of emissions, but we're excited for.

Speaker 3: But we're excited for our competimates in Astrobotic to make a shot at the moon and to be in space at the same time.

For our competitiveness in Astrobotany too.

To make a shot at the moon and to be in the space at the same time.

Yeah.

And just taking that gravity assist maneuver approach to it.

Speaker 8: And just taking that gravity assist maneuver approach to getting into lunar orbit, I mean, that puts you in space longer period of time and you're subject to more radiation, correct?

Adding into lunar orbit I mean that puts you in the space longer period of time, and you're subject to more radiation correct.

Speaker 3: That's right, Austin, and that's one of the architectural decisions that we made was to minimize the risk of transition through the Van Allen radiation belts and minimize those radiation hits to our electronics, sensitive electronics. So we make one pass through and onto the moon where the radiation environment is fundamentally different and somewhat easier than the high concentration of radiation you get in the Van Allen radiation belts. So yeah, great observation.

That's right Austin and Thats one of the architectural decisions that we made was to minimize the risk of transition through the van Allen really radiation belts.

And minimize those radiation hits to our electronics sensitive electronics, so we make one pass through and onto the Moon were the radiation environment is just.

It is fundamentally different and somewhat easier than the high concentration of radiation you get in the van Allen radiation belts, so yeah, great observation.

Awesome, thanks for the detail.

Thanks Austin.

Speaker 1: As a reminder to star one on your telephone keypad if you would like to ask a question. Our next question is from Suji De Silva with Ross Capital Park.

As a reminder, the star one on your telephone keypad, if he would like to ask a question. Our next question is from city to Silva with Roth Capital Partners. Please proceed hi.

Speaker 9: Hi, Steve. Hi, Eric. Good to catch up. Just want to understand the payloads the customers are committing to you on IM 1, 2, and 3. As the dates move later, and the customer readiness increases, does that mean you can take on more payloads and increase your revenue opportunity? Or are all those payloads already committed today? I just don't understand how that works as these missions may be moved out. That can be a tailwind in some ways. Yeah, good morning.

Steve Hi, Eric I could catch up.

Just want to understand the the payloads the customers are committing to you on I am one two and three.

As the dates move later and the customer banners increases does that mean, you can take on more payloads and increase your revenue opportunity or are all those payloads already committed today I'm sorry understand how that works is these missions, maybe without that can be a tailwind in some way.

Yes, good morning, <unk> actually.

Speaker 3: The manifest for this particular mission has been set for some time now, and we've maximized this mission so that it is sold out, and so we don't have any opportunity to take on additional payloads. All the payloads that we started with have stayed with us.

The manifest for this particular mission has been set for some time now.

We maximize this submission so that it is sold out.

So we don't have any opportunity to take on additional payloads. All the payloads that we started with have stayed with us.

Speaker 3: So, that's a series of NASA payloads and commercial payloads that make up the complement for this mission.

So that's a series of NASA payloads and commercial payloads that makeup the complement for this mission.

Speaker 3: And they've been quite understanding about the delays we've had during the development of this particular mission. They understood that when we started and everybody's getting very excited about our launch date. All the payloads are integrated. All the payloads have been tested, both on our offline flat sat and on the vehicle. And so everything seems to be working in...

<unk> been quite understanding about the.

The delays we've had.

During the the development of this particular mission they understood that when we started and everybody's in getting very.

We're excited about our launch date.

All the payers are integrated all the pilots have been tested both on our offline flat sat in on the vehicle.

And so everything seems to be working in perfect order.

Speaker 3: perfect order and folks are trained and ready for the mission. So looking forward to early January .

Folks are trained and ready for the mission. So looking forward to early January.

Okay, and Steve just I am too and I am thinking it was already fully committed at this point just understand.

Speaker 9: And Steve, IM2 and IM3 are already fully committed at this point, just understand.

Speaker 3: Yeah, IAM-2 and IAM-3 mission payloads are essentially committed in terms of what we're taking to the surface.

Yes, I am too and I have three mission payloads are essentially.

Committed in terms of what we're taking to the surface.

Speaker 3: And again, a combination of NASA and commercial and international payloads.

And again, a combination of NASA and commercial and international payloads.

Speaker 3: The area that we're still shuffling around and have some capacity that we're negotiating to take on additional revenues is in the rideshare component. As you know, we fly a lander attached to a spacecraft adapter, which is attached to a payload adapter ring. On that payload adapter ring, we can take some 800 kilograms of payloads to a translunar injection.

The area that we're still shuffling around and have some capacity that we're negotiating to take on additional revenues as in the rideshare component as you know we fly a lander.

Two a space craft adapter, which is attached to a payload adaptor rig on that payload adapter ring, we can take some 800 kilograms of payloads.

Two a transplant or injection orbit and we have a complement of those payloads, but filling out both mission to admission three and having a complete.

Speaker 3: And we have a complement of those payloads, but filling out both Mission 2 and Mission 3 and having a complete set of payloads to fly on those, we're moving those around and adjusting them as payload customers are keenly interested in taking rideshare out this far into space, which

A payload to fly on those.

Moving those around in adjusting them as payload customers are keenly interested in taking rideshare out this far in the space, which in.

Speaker 3: in the past has not been available to them and our missions to the moon provide that availability and that seems to be the fastest growing area of our lunar access business.

In the past has not been available to them and our missions to the moon.

Provide that availability and that seems to be the fastest growing area of our lunar access business.

Okay. Thanks, Steve.

Thanks Eddie.

Speaker 1: We have reached the end of our question and answer session. I would like to turn the conference back over to management for closing comments.

We have reached the end of our question and answer session I would like to turn the conference back over to management for closing comments.

Well. Thank you everyone for joining us this morning, the coming months are set to be pivotal moment in history for the company.

Speaker 3: Well, thank you everyone for joining us this morning. The coming months are set to be pivotal moment in history for the company and indeed for the United States as a whole. So thank you for listening in and wish us luck for January .

And indeed for the United States as a whole so thank you for listening in.

And wish US luck for January.

Speaker 1: Thank you. This concludes today's conference. You may disconnect your lines at this time and thank you for your participation.

Thank you. This concludes today's conference you may disconnect your lines at this time and thank you for your participation.

Okay.

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