Q4 2024 Intuitive Machines Inc Earnings Call
Operator: Good day, ladies and gentlemen. Thank you for standing by. And welcome to the Intuitive Machines fourth quarter and full year 2024 conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your. You will then hear an automatic magic advise on you. Thank you all for joining us for today's conference.
Okay.
Speaker Change: Good day, ladies and gentlemen, thank you for standing by.
Welcome to the <unk>.
Speaker Change: Michelle's fourth quarter and full year 'twenty 'twenty four conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Speaker Change: He will then hand automatic metric advising you you'll handler space. Please.
Speaker Change: Please note that today's conference is being recorded.
Stephen Zhang: I would now like to turn the conference over to Stephen Zhang, Head of Investellations. Please go ahead.
Speaker Change: I would now like to turn the conference over to Steven Chang head of Investor Relations. Please go ahead.
Stephen Zhang: Good morning. Welcome to the Intuitive Machines fourth quarter and full year 2024. Chief Executive Officer, Steve Altemus, and Chief Financial Officer, Pete McGrath, are leading the call today.
Steven Chang: Good morning.
Speaker Change: Welcome to the intuitive machine fourth quarter and full year 2024 earnings call.
Speaker Change: Chief Executive Officer, Steve Hoffman.
Speaker Change: <unk> Financial Officer, Pete Mcgrath are leading the call today.
Stephen Zhang: Before we begin, please note that some of the information discussed during today's call will consist of four looking states. Setting forth our current expectations with respect to the future of our business, the economy, and other events. The company's actual results could differ materially from those indicated in any forward-looking statements due to many factors. These factors are described under four looking statements in the company's earnings press release and the company's most recent 10-K and 10-Q filed with the SEC.
Before we begin please note that some of the information discussed during today's call will consist of forward looking statements setting forth our current expectations with respect to the future of our business the economy and other bets.
Speaker Change: The company's actual results could differ materially from those indicated in any forward looking statements due to many factors.
Speaker Change: These factors are described under forward looking statements the company earnings press release and the company's most recent 10-K 10-Q filed with the SEC.
Stephen Zhang: We do not undertake any obligation to update forward looking.
Speaker Change: We do not undertake any obligation to update forward looking statements.
Stephen Zhang: We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in the applicable SEC rules and regulations. Reconciliation, the company's gap measures are included in the earnings release filed on form.
Speaker Change: We also expect to discuss certain financial measures and information that are non-GAAP measures.
Speaker Change: As defined in the applicable SEC rules and regulations.
Speaker Change: Reconciliation the company GAAP measures are included in the earnings release filed on form 8-K.
Stephen Zhang: Finally, we posted an earnings call presentation on our website, which provides additional context on the operational and financial.
Speaker Change: Finally, we posted an earnings call presentation on our website, which provides additional context on the operational and financial performance.
Steve Altemus: You can find this presentation on our Vector Relations page at www.intuitivemachines.com slash Now I'll turn the call over to Steve. Good morning, and thanks for joining our fourth quarter and full year 2024 earnings call. Just two years ago, we became a public company with a bold vision for the future. Over the past year, we've deliberately positioned ourselves for long-term success by expanding our technical capabilities, opening new revenue streams. Fortifying Our Financial Position. In the fourth quarter, we reported revenue of $54.7 million, contributing to a record fiscal year revenue of $228 million. This exceeded the midpoint of our previous guidance range and is a reflection of our ability to execute and grow within the lunar commercialization sector.
Speaker Change: You can find this presentation on our Investor Relations page.
Speaker Change: Www Dot intuitive machine dot com slash investors.
Speaker Change: Now I will turn the call over to people.
Speaker Change: Good morning, and thanks for joining our fourth quarter and full year 2024 earnings call.
Speaker Change: Just two years ago, we became a public company with a bold vision for the future.
Speaker Change: Over the past year, we've deliberately positioned ourselves for long term success by expanding our technical capabilities opening new revenue streams.
Speaker Change: Fortifying our financial position.
Speaker Change: In the fourth quarter, we reported revenue of $54 7 million.
Speaker Change: Contributing to a record fiscal year revenue of $228 million. This exceeded the midpoint of our previous guidance range and is a reflection of our ability to execute and grow within the lunar commercialization sector.
Steve Altemus: Our financial position remains robust. We ended 2024 with a record cash balance of $207.6 million, following a successful equity raise in December. As of March 10th, our cash balance stood at $385 million after recent warrant exercises. This strong liquidity position ensures that Intuitive Machines is well funded.
Speaker Change: Our financial position remains robust we ended 2024 with a record cash balance of $207 6 million. Following a successful equity raise in December.
Speaker Change: As of March 10th our cash balance stood at $385 million.
Speaker Change: After recent warrant exercises.
Speaker Change: This strong liquidity position ensures that intuitive machines as well funded for the future.
Steve Altemus: Now, with a fortress-like balance sheet, we're seeking the highest return opport- whether that's through internal innovation or strategic We got to this point because we choose to tackle one of the hardest challenges first, landing on the moon. Now, the technologies and expertise that built our initial lunar program are ready to expand our reach into new markets and new customers.
Speaker Change: Now with a fortress like balance sheet, we're seeking the highest return opportunities, whether that's through internal innovation or strategic acquisitions.
Speaker Change: We got to this point.
Speaker Change: Because we choose to tackle one of the hardest challenges first landing on the Moon.
Speaker Change: The technologies and expertise that built our initial lunar program are ready to expand our reach into new markets and new customers.
Steve Altemus: This year is not just about growth, it's about defining the future of our company and the industry itself. The fourth quarter welcomed a new administration that is revamping the whole of government, and NASA is not excluded from that. There's been a shift in how the federal government approaches the acquisition of technology-based goods and services. And we believe Intuitive Machines is well-positioned. The new administration has signaled a strong emphasis on stretching the federal dollar by shifting from large, government-owned, cost-plus development programs to commercial service models that leverage private sector innovation that demand service providers thrive in a fixed price environment.
Speaker Change: This year is not just about growth, it's about defining the future of our company and the industry itself.
Speaker Change: The fourth quarter welcomed a new administration that is revamping the whole of government and NASA is not excluded from that theres been a shift in how the federal government approaches the acquisition of technology based business services.
Speaker Change: And we believe intuitive machines is well positioned for this.
Speaker Change: The New administration has signaled a strong emphasis on stretching the federal dollar by shifting from large government own cost plus development programs. The commercial service models that leverage private sector innovation that demand service providers thrive in a fixed price.
Steve Altemus: Ecosystem with Revenue Service Tail. Similar to the environment, Intuitive Machines has grown up.
Speaker Change: Ecosystem with revenue service tail similar to the environment that <unk> changed has grown up in.
Steve Altemus: Clips, with LPB, and the Near-Faith Network Conference. Federal government changes and uncertainty at NASA is an opportunity for Intuitive Machines to expand our customer base into areas like national security space and broaden our service footprint in addition to lunar, further diversifying our role in the space industry. We're in a position to do this because we're operating an end-to-end LUNA program with a regular KD submission. The infrastructure, expertise, and proven capabilities required for lunar missions inherently support a wide range of space operations. Offering our validated technologies and capabilities is a natural progression into other markets.
Speaker Change: With clips with LTV and the near space network contracts.
Speaker Change: The federal government changes and uncertainty at NASA is an opportunity for intuitive machines to expand our customer base into areas like national security space and broaden our service footprint. In addition to lunar further diversifying our role in the states economy.
Speaker Change: We are in a position to do this because we're operating at end to end lunar program with a regular cadence of missions.
Speaker Change: The infrastructure expertise and proven capabilities required for lunar missions inherently support a wide range of space operations.
Speaker Change: Offering our validated technologies and capabilities is a natural progression into other markets.
Steve Altemus: These technologies and capabilities form the foundation of our three pillars of commercialization. They are delivery services, data transmission services, and infrastructure as a service. What we've demonstrated from operating two lunar missions is that There are essential capabilities necessary for sustained and resilient operations across all three service pillars. The first is extensible and reliable space communication. This secure and continuous connectivity is essential for transmitting data, coordinating missions, and making real-time decisions in flight and on the surface of any celestial body. The second is Position, Navigation, and Timing, also known as PNT. Just as GPS enables seamless navigation on Earth, precise and repeatable navigation is required to support flight, orbit, and landing operations, surface mobility, and resource utilization.
Speaker Change: These technologies and capabilities form the foundation of our three pillars of commercialization.
Speaker Change: They are delivery services data transmission services and infrastructure as a service.
Speaker Change: What we've demonstrated from operating to lunar missions.
Speaker Change: Is that.
Speaker Change: There are a central capabilities necessary for sustained and resilient operations across all three service pillars.
Speaker Change: The first is extensible and reliable communications.
Speaker Change: It's secure and continuous connectivity is essential for transmitting data coordinating missions, and making real time decisions in flight and on the surface of any celestial body.
Speaker Change: The second is position navigation and timing also known as PMT.
Speaker Change: Justice GPS enabled seamless navigation on Earth.
Speaker Change: Sites and repeatable navigation is required to support flight orbit.
Speaker Change: Landing operations surface mobility and resource utilization.
Steve Altemus: The final capability is autonomy and artificial intelligence, given the distance and complexity of space operations. Autonomy and AI-powered systems play a critical role in managing assets, executing scientific objectives, and mission success. The IM-2 mission demonstrated significant advancements in all three capabilities.
Speaker Change: The final capability, it's autonomy artificial intelligence, given the distance and complexity of space operations.
Speaker Change: Economy, and AI powered systems play a critical role in managing assets executing scientific objectives and mission success.
Speaker Change: CIM two mission demonstrated significant advancements in all three capabilities, but to be straightforward space flight is a complex endeavor.
Steve Altemus: To be straightforward, spaceflight is a complex endeavor. For every mission, we must accept a degree of risk and the possibility of subsystem faults. And that picture isn't always black and white. On one hand, our lunar lander Athena touched down inside a shallow crater of the moon's south pole, a place we believe holds frozen water trapped beneath the surface, but previous missions avoided because of the jagged terrain, deep craters, and brutal cold. While Athena's landing didn't go quite as planned, our team's accelerated payload operation... including Operating NASA's Prime 1 Drill Suite, Nokia's Lunar Surface Communication System, Intuitive Machines' Micronova Hopper, and several commercial payloads including a Japanese Micro Rover and Edge Computing Data Center.
Speaker Change: For every mission, we must accept a degree of risk and the possibility of subsystem false.
Speaker Change: And that picture is it always black and white.
Speaker Change: On one hand, our lunar lander Athena touchdown inside a shallow crater of the Moon South pole.
Speaker Change: A place we believe holds frozen water trapped beneath the surface, but previous emissions avoided because of the jagged terrain deep craters and brutal cold.
Speaker Change: While it seen Atlantic didn't go quite as planned our teams accelerated payload operations.
Speaker Change: Including operating <unk> Prime one drill suite Nokia's lunar surface communications system intuitive machines micro Nova Hopper and several commercial payloads, including a Japanese micro Rover and edge computing data center.
Steve Altemus: to bring back valuable data capturing the majority of the outstanding $15.8 million as final success payment. As a reminder, 90% of the NAFTA commercial payments and associated revenue is earned and paid before law. On the other hand, from the moment Athena launched on February 26th, every mission step to landing validated Intuitive Machine's ability to provide reliable space communications and navigation using our data transmission. Through the reliability of our network, we executed autonomous precision main engine firings on the way to the moon using our proprietary propulsion. conducted precision orbital maneuvers, used AI-powered systems to guide our spacecraft across 39 lunar orbits, and performed high-bandwidth data transmission that outpaced IM-1's capabilities by 5X.
Speaker Change: To bring back valuable data, capturing the majority of the outstanding $15 $8 million Thats final success payments.
Speaker Change: As a reminder, 90% of the nascent commercial payments and associated revenue is earned and paid before launch.
Speaker Change: On the other hand from the moment Athena launched on February 26th every mission step to landing validated in two of the machines ability to provide reliable space communications and navigation using our data transmission network.
Speaker Change: Through the reliability of our network, we executed autonomous precision main engine firings on the way to the mode using our proprietary propulsion system.
Speaker Change: <unk> precision orbital maneuvers used AI powered systems to guide our spacecraft across 39 lunar orbits and performed high bandwidth data transmission that outpaced <unk> capabilities.
Speaker Change: Buybacks.
Steve Altemus: All of this, while demonstrating our network is interoperable with the NASA Deep Space Network and the National Radio Astronomy Observatory Network, a requirement for national security space. The function of our spacecraft for the entire mission was nearly flawless, and its contribution towards advancing our data transmission network directly supports our execution of NASA's $4.8 billion Near Space Network services contract and the company's position as a utility provider for space data transmission, similar to the way telecommunications companies bill customers on the amount of data they use.
Speaker Change: All of this while demonstrating our network is interoperable with the deep that is deep space network and the National Radio Astronomy Observatory network, a requirement for national security space.
Speaker Change: The function of our space craft for the entire mission was nearly flawless and its contribution towards advancing our data transmission network directly supports our execution of NASA is $4 $8 billion near space Network services contract and the company is positioned at the utility provider for space data transmission.
Speaker Change: Similar to the way telecommunications companies Bill customers.
Speaker Change: On the amount of data they use.
Steve Altemus: Surface delivery missions like IM-1 and IM-2 provide the baseline for proving technology that leads to opening the space economy. For IM-2 and every space exploration mission, engineers conduct a critical post-flight review of the mission's performance. We call this a hot watch. Over the next several weeks, Intuitive Machines will lead internal, external, and independent reviews. We invited NASA, the European Space Agency, and NASA's Jet Propulsion Laboratory experts to participate. Intuitive Machines expects to keep its third lunar mission on track for this time next year, incorporating findings and corrective actions from the The mission includes NASA and commercial payload delivery near the moon's equator, a generally flat terrain called Rhine or Gamma.
Speaker Change: Surface delivery missions like I am one and I have to provide a baseline for proving technology that leads to opening that space economy.
Speaker Change: Brian two in every space exploration mission.
Speaker Change: Engineers conduct a critical post slight review of the emissions performance we call. This a hot wash.
Speaker Change: Over the next several weeks with two of the machines will lead internal external and independent reviews, we invited NASA the European Space Agency, and Nasa's Jet propulsion laboratory experts to participate.
Speaker Change: And so the machine is expected to keep it third lunar mission on track for this time next year incorporating findings a corrective actions from these reviews.
Speaker Change: Emission includes NASA and commercial payload delivery near the Moon's equator, generally flat <unk> co Brian or gamma.
Steve Altemus: One of the mission's primary objectives is researching magnetic anomalies using rover technology. In addition to the mission's surface delivery, IM3 will also deploy the first of five planned data relay satellites under the Near Space Network contract. The Data Relay Satellite is deployed as a ride-share from the second stage of the rocket, independent of the layer. We demonstrated satellite deployment on our last mission with three rideshare payloads, including two that utilize our data transmission network for communication and navigation services. The first state-of-the-relay satellite deployment opens additional near-space network contract task orders beyond the initial validation task orders of $150 million for the contract.
One of the missing primary objectives, its researching magnetic anomalies using rover technology.
Speaker Change: In addition to the mission surface delivery I am three will also deploy the first of five planned data released satellite under the near space network contract the.
Speaker Change: The data really satellite is deployed at the rideshare from the second stage of the rocket independent of the ladder.
Speaker Change: We demonstrated satellite deployment on our last mission with three rideshare payloads, including two that utilize their data transmission networks for communications navigation services.
Speaker Change: The first data really satellite deployment opens additional near space network contract task orders beyond the initial.
Speaker Change: Validation task orders of $150 million for the contract.
Steve Altemus: Introducing a pay-by-the-minute service model, which we expect to have higher margin and recurring revenue. In December, Intuitive Machines secured additional awards under the contract for direct-to-Earth services. We believe the additional awards position the company to capitalize on the full $4.8 billion maximum potential value. We intend to deliver the second and third data relay satellites as rideshare payloads, along with our fourth NASA-contracted surface delivery mission, IM-4, in 2027. followed by the final two satellite deployments approximately one year later to complete the constellation.
Speaker Change: Introducing a pay by the minute service model, which we expect to have higher margin and recurring revenue streams.
Speaker Change: In December intuitive machine secured additional awards under the contracts for direct to Earth services. We believe the additional awards position the company to capitalize on the full $4 8 billion maximum potential value.
Speaker Change: We intend to deliver the second third data related satellites as rideshare payloads, along with our fourth naphtha contracted surface delivery mission I am for in 2027.
Speaker Change: Followed by the final two satellite deployments approximately one year later to complete the constellation.
Steve Altemus: As I said at the top of the call, the new White House administration is instituting a more modern acquisition strategy for how to procure technology services. We believe that benefits Intuitive Machines and we're in a position to expand our customer base and apply those services in addition to LunarSpace, without accepting exceptive work.
Speaker Change: As I said at the top of the call the New White House administration is instituting a more modern acquisition strategy for how to procure technology services.
Speaker Change: We believe that benefits intuitive machines, and we're in a position to expand our customer base and apply those services. In addition to lunar space without accepting accepted work as we move into 2025, we are focused on diversification of customers and markets and we've already made progress.
Steve Altemus: As we move into 2025, we're focused on diversification of customers and markets, and we've already made progress. Expanding Data Transmission Services for our Lunar Satellite Constellation outside the Near Space Network contract needed authorization to work with other government agencies, and the company now has those permissions.
Speaker Change: Expanding data transmission services for our lunar satellite constellation outside the near space network contracts needed authorization to work with other government agencies and the company now has those permissions.
Steve Altemus: To capitalize on that opportunity, Intuitive Machines appointed James Sproul as Senior Vice President of Data Services in the first quarter of Jim has more than 30 years of experience in national security, commercial satellites, intelligence, surveillance, reconnaissance, and other critical programs in government, commercial. Our lunar lander performance in getting to and operating in orbit was exceptional during IM-2, and we're actively leveraging that capability. Finalizing a Phase 2 contract with a government customer for an orbital transfer vehicle. The contract is designed to advance in-space mobility and logistics using the same Lunar Lander core technology in this orbit delivery vehicle.
Speaker Change: To capitalize on that opportunity and two new machines appointed James Brown Senior Vice President of data services in the first quarter of this year.
Speaker Change: Jim has more than 30 years of experience in National security and commercial satellites intelligence surveillance reconnaissance and <unk>.
Speaker Change: Other critical programs in government and commercial industry.
Speaker Change: Our lunar lander performance and getting to an operating in orbit was exceptional during I have to and we are actively leveraging that capability.
Speaker Change: Finalizing a phase II contract with a government customer for an orbital transfer vehicle.
Speaker Change: The contract is designed to advance in space mobility and logistics using the same lunar lander core technology in this orbit delivery vehicle.
Steve Altemus: Last year, NASA proposed cancellation of the On-Orbit Servicing, Assembly, and Manufacturing Project, OSAP. We're now capitalizing on NASA's traditional contracting investment to develop low-Earth orbit programs. By right now, we're conducting a Space Force study on how to commercialize OSAM for geostationary orbit, a new playing field for intuitive We believe this co-investment model is the kind of forward-thinking approach the new administration is encouraging in its acquisition strategy. Finally, financially we remain strong with growing revenue, expanding margins, and a record cash balance. 2025 is about a The company expects two NASA Commercial Lunar Payload Services contract bids this year.
Speaker Change: Last year not the proposed cancellation of the on orbit servicing Assembly and manufacturing project <unk>.
Speaker Change: We're now capitalizing on masses traditional contracting investment to develop low earth orbit programs.
Speaker Change: Right now we're conducting a phase four study on how to commercialize <unk> for geostationary orbit, a new playing field for intuitive sheets.
Speaker Change: We believe this co investment model as the kind of forward thinking approach the new administration is encouraging and its acquisition strategy.
Speaker Change: Finally financially we remained strong with growing revenue expanding margins and a record cash balance.
Speaker Change: 25 is about execution is.
Speaker Change: As the company expects to NASA commercial lunar tailored services contract bids. This year. The first is due in may with an anticipated contract award in July.
Steve Altemus: The first is due in May with an anticipated contract award in July, followed by an additional task order later in the year.
Speaker Change: Led by an additional task order later in the year.
Steve Altemus: In addition, Intuitive Machines has been invited to speak to the House of Representatives on our vision for the next version of CLPS to include larger cargo-class lunar delivery. Potentially Creating High Margin Opportunities. Our vision for heavy cargo class landers applies directly to our Lunar Terrain Vehicle Delivery Service, which we anticipate will be awarded in the second half of 2020.
Speaker Change: In addition to the machines has been invited to speak to the house of Representatives on our vision for the next version of clips to include larger cargo class lunar deliveries potentially creating high margin opportunities.
Speaker Change: Our vision for heavy cargo class lenders applies directly to our lunar terrain vehicle delivery service, which we anticipate will be awarded in the second half of 2025.
Steve Altemus: That concludes my comments.
Pete Mcgrath: Now I will hand off to Pete McGrath, our CFO, for further comments on our financial... Thank you, Steve, and thanks to everybody joining us today. As Steve mentioned, we ended the year strong with Q4 revenues of $54.7 million, up 79% over the same quarter of the prior year.
Speaker Change: That concludes my comments now I'll hand off to Pete Magrath, our CFO for further comments on our financials.
Pete.
Pete Magrath: Steve and thanks to everybody joining us today.
Pete Magrath: As Steve mentioned, we ended the year strong with Q4 revenues of $54 7 million up 79% over the same quarter of the prior year.
Pete Mcgrath: and finish with record highs in both cash and back. Q4 revenue was primarily driven by CLPS, HOMES, and LTVS. Holmes revenue was $30 million in the quarter, down about $4 million from Q3, as expected. Keep in mind, as Steve mentioned, we are performing a study to commercialize the use of OSAM for the space. Gross profit was $0.7 million for the quarter versus $0.3 million in the prior year as we drive consistently towards profitability. Operating loss for the quarter was $13.4 million versus a loss of $7.5 million in the fourth quarter of 2020. The higher offering loss in the quarter was driven primarily by higher SG&A.
Pete Magrath: And finished with record highs in both cash and backlog.
Pete Magrath: Q4 revenue was primarily driven by clips homes and Ltvs execution.
Pete Magrath: <unk> revenue was $30 million in the quarter down about $4 million from Q3 as expected.
Pete Magrath: Keep in mind as Steve mentioned, we are performing a study to commercialize the use of <unk> for the space Force.
Gross profit was <unk> 7 million further quarter versus zero point $3 million in the prior year.
Pete Magrath: Drive consistently towards profitability.
Pete Magrath: Operating loss for the quarter was $13 4 million versus a loss of $7 5 million in the fourth quarter of 2023.
Pete Magrath: The higher operating loss in the quarter was driven primarily by higher SG&A.
Pete Mcgrath: SG&A for the quarter was $13.5 million versus $6.4 million in the prior year. A higher SG&A was due to increases in public company costs, employee compensation and benefits, and rent on our corporate headquarters, as well as our new offices in Maryland. Prior year also included the impact of incentive comp, accrual reversal as we look to preserve cash. Current ST&A cost represents our estimated steady state of business going. Operating cash use was $2 million in the quarter with a capital expenditures of $4.9 million. Resulting in a free cash outflow in the quarter of 6.9. As we mentioned on the last earnings call, favorable operating cash in Q4 included the timing impact of two significant receivables.
Pete Magrath: SG&A for the quarter was $13 5 million versus $6 4 million in the prior year.
Pete Magrath: A higher SG&A was due to increases in public company costs employee compensation and benefits and rent on our corporate headquarters as well as our new offices in Maryland and Phoenix.
Pete Magrath: Prior year also included the impact of incentive comp accrual reversal as we look to preserve cash.
Pete Magrath: Current SG&A cost represents our estimated steady state of business going forward.
Pete Magrath: Operating cash used was $2 million in the quarter with a capital expenditures of $4 9 million, resulting in a free cash outflow in the quarter of $6 9 million.
Pete Magrath: As we mentioned on the last earnings call favorable operating cash in Q4 included the timing impact of two significant receivables specifically timing on homes and the iron core milestone one payment.
Pete Mcgrath: Specifically, timing on ohms and the Ion Core Milestone 1 CapEx in the quarter was driven primarily by the investments in our first near space network.
Pete Magrath: Capex in the quarter was driven primarily by the investments in our first aerospace network satellite.
Pete Mcgrath: Going forward, we expect to see CapEx. for our five satellite constellations around the moon in support of NSF. These CapEx levels will be offset by higher margin service revenues from the NS&S program. Our cash balance significantly increased in Q4 to $207.6 million, another company record. This increase was driven by $116.9 million of cash raised in the quarter, which included a $10 million strategic investment from Boreon Corporation and the remaining from our follow-on equity office.
Pete Magrath: Going forward, we expect to see Capex for.
Pete Magrath: Four or five satellite constellation around AMR and supportive NSM.
Pete Magrath: These capex levels will be offset by higher margin service revenues from the NSS program.
Pete Magrath: Our cash balance significantly increased in Q4.
Pete Magrath: $207 6 million another company record.
Pete Magrath: This increase was driven by a $116 9 million of cash raised in the quarter, which included a 10 million strategic investment from Foreign Corporation and the remaining from our follow on equity offering.
Pete Mcgrath: Note that, more recently, in Q1 2025, we cleaned up the majority of our overhangs since December. namely through the redemption process of our $11.50 strike price. The majority of our warrants were exercised at $11.50. resulting in $148 million of cash to the company. 6.6 million warrants were unexercised in exchange for one cent. We currently have no outstanding $11.50 public issue. As of March 18, we had 178.3 million shares outstanding following the warrant redemption process. with 115.7 million shares of Class A and 62.6 million shares of Class B. The exercise of warrants, along with diligent cash management to start the year, resulted in a cash balance of $385 million as of March 10, 2020.
Pete Magrath: Note that more recently in Q1 2025, we cleaned up the majority of our overhangs since dates back.
Pete Magrath: Namely through the redemption process of our $11 five strike price warrants.
Pete Magrath: The majority of our warrants were exercised at $11 50, each resulting in $148 million of cash to the company.
Pete Magrath: $6 6 million warrants were unexercised and exchange for <unk> each.
Pete Magrath: We currently have no outstanding $11 50 public issued warrants.
Pete Magrath: As of March 18th.
Pete Magrath: We had $178 3 million shares outstanding following the warrant redemption process.
Pete Magrath: With a 115 7 million shares of class, a and 62 6 million shares of class C.
Pete Magrath: The exercise of warrants along with diligent cash management to start the year resulted in a cash balance of $385 million as of March 10th of 2025.
Pete Mcgrath: To further fortify our liquidity position on a position of strength as a company, we opened a $40 million credit facility with favorable financial This facility remains unused and is meant to smooth out our working capital ups and downs as we work through the timing impact of milestone payments for our programs and our respective cost schedules. We ended the fourth quarter with contracted backlog of $328.3 million, another record for the company. We expect to recognize 60 to 65% of our backlog during 2025. 15% to 20% during 2026. and the remaining direct.
Pete Magrath: To further fortify our liquidity position.
Pete Magrath: The position of strength as a company, we opened a $40 million credit facility with favorable financial terms. This facility remains unused and is meant to smooth out our working capital ups and downs as we work through the timing impact of milestone payments for our programs and our respective cost schedule.
Pete Magrath: We ended the fourth quarter with contracted backlog of $328 3 million another record for the company.
Pete Magrath: We expect to recognize 60% to 65% of our backlog during 2025.
Pete Magrath: 15% to 20% during 2026 and.
Pete Magrath: And the remaining thereafter.
Pete Mcgrath: Keep in mind, this does not yet include the full set of initial task orders for the Near Space Network Services contract, totaling $150 million, or any new awards we may receive throughout the year.
Pete Magrath: Keep in mind. This does not yet include the full set of initial task orders for the near space network services contract totaling $150 million.
Pete Magrath: Or any new awards, we may received throughout the year.
Pete Mcgrath: Moving on to guidance. Last year, our revenue was $228 million. And for 2025, we see a range of 250 to 300 million. The accepted growth of our key programs is expected to more than offset the impact of those. which was roughly 40-50% of the OMS revenue in 2024. This represents a tremendous shift in our business mix as we focus on expanding revenues into higher margin. On the profitability side, we are continuing to demonstrate improvement in margins with a focus on having a positive runway adjusted EBITDA by fourth quarter of 2025 and a positive adjusted EBITDA by 2026.
Pete Magrath: Moving onto guidance last year, our revenue was $228 million.
Pete Magrath: And for 2025, we see a range of $250 million to $300 million.
Pete Magrath: The accepted growth of our key programs is expected to more than offset the impact of <unk>, which was roughly 40% to 50% of the <unk> revenue in 2024.
Pete Magrath: This represents a tremendous shift in our business mix as we focus on expanding revenues and a higher margin services.
Pete Magrath: On the profitability side, we are continuing to demonstrate improvement in margins with a focus on having a positive run rate adjusted EBITDA.
Pete Magrath: The fourth quarter of 2025, and a positive adjusted EBITDA by <unk> 26.
Pete Mcgrath: Overall, this was another strong quarter and a historic year for Intuitive Machinima. Last year, we set aggressive but reasonable guidance targets. We're proud to have exceeded the midpoint of the range. We effectively managed cash and set the company up with a fortress balance sheet, a streamlined capital structure with a substantially reduced overhang from derivative securities, and no outstanding debt.
Pete Magrath: Overall this was another strong quarter and a historic year for Intuit admissions last year, we set aggressive but reasonable guidance targets. We're proud to have exceeded the midpoint of the range we.
Pete Magrath: We effectively manage cash and set the company up with a fortress balance sheet, a streamline capital structure with a substantially reduced overhang from derivative securities and no outstanding debt.
Operator: We look forward to continuing this growth trajectory in 2025 with a focus on driving towards profitability and achieving our financial With that, operator, we are now ready for questions.
Pete Magrath: We look forward to continuing this growth trajectory in 2025 with a focus on driving towards profitability and achieving our financial targets.
Pete Magrath: With that operator, we're now ready for questions.
Pete Magrath: Thank you ladies.
Operator: Ladies and gentlemen, as a reminder, to ask a question you will need to press star 11 on your telephone and wait for your name to be announced.
Speaker Change: Ladies and gentlemen, as a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced.
Speaker Change: To withdraw your question simply press Star one again, please standby, while we compile the Q&A roster.
Yelena Snow: Again, please stand by while we Our first question, coming from the line up. DeSilva, Woodrott Capital, Yelena Snow Hi Steve, hi Pete. Good morning. So maybe you can talk first about the, you talked about the funding and the balance sheet being stronger and strategic moves beyond NASA and CISLUNAR expanding reach new markets customers.
Speaker Change: Our first question coming from the line of Judith Silva with Roth Capital. Your line is now open.
Judith Silva: Hi, Steve Hi, Good morning, So maybe you can talk first about the.
Speaker Change: You talked about the funding of the balance sheet being stronger and.
Speaker Change: Strategic moves beyond nascent cislunar, expanding reach new markets customers.
Steve Altemus: Steve, maybe you can give a framework of sort of where you could see Intuitive Machines headed, you know, three to five years out that would kind of paint a picture of what you might be thinking of beyond what you've done today.
Speaker Change: Maybe you can give a framework of sort of where you could see to the machines headed three to five years out that would kind of paint a picture of what you might be thinking of beyond what you've done to date.
Steve Altemus: Yeah, good morning, Suji. Thanks for the question. Yeah, when we think about the company, we're really moving into this data services business full court press here because what we see the lunar data network that we're installing with the data relay satellites and the ground stations is really, I would deem a national asset. And that asset can be used by many different customers. It also gives us the capability for alternate forms of GPS. It gives us ability to communicate in a difficult location around the moon, but those services can also be brought back towards Earth. So you see us expanding in the near space network regime at multi-layer domains in space from low Earth orbit to geosynchronous orbit out to cislunar space.
Speaker Change: Yes, good morning, <unk>. Thanks for the question, yes, when we think about the company.
Speaker Change: We're really moving into this.
Speaker Change: Data services business.
Sure.
Speaker Change: A full court press here, because what we see the lunar data network that we're installing with the data really satellites in the ground stations, there's really I would deem a national asset and that asset can be used by many different customers. It also gives us the capability.
Speaker Change: For.
Speaker Change: Alternate forms of GPS It gives us ability to communicate.
Speaker Change: In this difficult location around the moon, but those services can also be brought back towards Earth. So youll see us expanding in the near space network regime at Mueller.
Speaker Change: <unk> layer domains in space from lower orbit to geosynchronous orbit emphasis lunar space. We're just doing it in reverse order from lunar space back backwards. So that's what you can look for over the next three to five years.
Steve Altemus: We're just doing it in reverse order from lunar space backwards.
Steve Altemus: So that's what you can look for over the next three to five.
Steve Altemus: Okay, and then maybe you could touch on specifically the orbital terrain vehicle, the spacecraft there, and you said there's a government contract there. Maybe you can talk about that product line and how we should think about that. Yeah, the nebula, as we call it, is a derivative of the NovaSea Science Autonomous Robotic Lander that we flew to the moon twice. And so it's a cryogenic stage, essentially a third stage, if you will, with our proprietary propulsion system. And we can deliver satellites, multiple satellites, to varying locations in space around cislunar space. And that's of interest to some customers, and we're doing that under a commercial contract as a subcontractor for a government customer.
Speaker Change: Okay, and then maybe you could touch on specifically the orbital train vehicle vehicle the <unk>.
Speaker Change: Spacecraft, they're in a sense, it's a government contract. There maybe you can talk about that product line and how we should think about that.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Nevertheless, as we call it as a derivative of the Nova Sea.
Speaker Change: Autonomous robotic lender that we flew to the Moon twice and so it is a cryogenic stage essentially a third stage. If you will with our proprietary propulsion system and we can deliver.
Speaker Change: Satellites multiple satellites to varying locations.
Speaker Change: In space around CIS lunar space.
Speaker Change: That's of interest to some customers and we're doing that under a commercial contract with the as a subcontractor for our government customer.
Pete Mcgrath: And then the last question, I'll pass it along. As you talk about 26 adjusted EBITDA positive, maybe you could talk about two elements of that guidance in terms of the maybe long-term growth rate of the revenues. That would be a reasonable set of bands to think about. And then the operating expense growth expectation to kind of get to that 26 guidance.
Okay, Great and then last question and I'll pass it along as you talked about 26, adjusted EBITDA positive and maybe you could talk about two elements of that guidance in terms of the maybe long term growth rate of the revenues that would be a reasonable set of.
Speaker Change: Bands to think about and then the operating expense growth expectation to kind of get to that 26 guide.
Pete Mcgrath: Yeah, so I probably won't provide guidance on what our growth rate is going forward beyond 25. But if you look at where we were in terms of our run rate and our G&A expense, we've stabilized around a good G&A spend rate, which is going to really help us as we continue to grow on the profits and the margin side towards that EBITDA positive.
Speaker Change: Yes so.
Speaker Change: Probably won't provide guidance on what our growth rate is going forward beyond 'twenty five.
Speaker Change: But.
Speaker Change: If you look at where we were in terms of a run rate and our G&A expense, we've stabilized around a good G&A spend rate.
Speaker Change: Is going to really help us as we continue to grow on the profits on the margin side towards that EBITDA positive case.
Pete Mcgrath: Okay, appreciate the color, Pete.
Yelena Snow: Thanks, guys.
Speaker Change: Okay I appreciate the color thanks, guys.
Speaker Change: Okay.
Yelena Snow: Our next question coming from the line of Mycroft. Security, Yolanda Snow. Thank you. Regarding the Lunar Terrain Vehicle Down Select, which you said you still expect to occur in 2H25, Is there anything from that baked into the... Current Guidance Mike, the way we look at that one is that will affect 2026 primarily and not necessarily 2025, with that award coming so late in the year, we believe. There are alternatives that the government may consider in terms of how they award that. They may choose multiple bidders, down select to two, take two to CDR, or give the full demonstration to a single bidder.
Speaker Change: Our next question coming from the line of Mike Crawford with B Riley Securities. Your line is now open.
Speaker Change: Thank you regarding the lunar terrain vehicle down select which you said you still expect to return $2 25, but is there anything from that.
Speaker Change: Baked into that.
Speaker Change: Current guidance.
Speaker Change: Mike The way we look at that one is that will affect 2026, primarily and not necessarily 2025 with that award coming so late in the year, we believe.
Speaker Change: There are alternatives.
Speaker Change: May consider in terms of.
Speaker Change: How they award.
Speaker Change: They may choose multiple bidders down select to take two to ctr or give the full demonstration to a single bidder.
Pete Mcgrath: I'm not quite sure what the shape of that procurement will look like, but we did not include any of the LTV beyond the initial $30 million in the operating plan for 2025.
Speaker Change: Not quite sure what the shape of that procurement will look like but we did not include any of the ltvs beyond the initial $30 million in the operating plan for 2025.
Yelena Snow: Okay, and then, thank you, and then, regarding the data relay satellite deployment. Are, what, is there an order to the range points that you're targeting for the second and third payloads and beyond? So just to clarify, you're looking for the timeline for deployment of the satellite? Yeah, and does it matter to which location each goes to in order? Good.
Speaker Change: Okay and then thank you and then.
Speaker Change: Regarding.
Speaker Change: The data related satellite deployments.
Speaker Change: Right.
Speaker Change: What is their order to the grains points that you're targeting for the second and third.
Speaker Change: <unk>.
Speaker Change: Beyond.
Speaker Change: So just to clarify youre looking for the timeline for deployment of the satellites.
Speaker Change: Yes, and does it matter to which location each goes to.
Speaker Change: An honor.
Steve Altemus: So our current baseline plan is that the first satellite will go up as a rideshare on IM3, which is scheduled for about this time next year. And then the second and third will go off as a ride-share on IM4, which we're currently slating for the second half of 27. And then the fourth and fifth would go off about a year after that. They're all going to a highly elliptical polar orbit around the moon that will have a long stair time around the South Pole, which is a requirement for NASA in terms of the coverage over the South Pole.
Speaker Change: Got it.
Speaker Change: Our current baseline plan is that the first satellite will go up as a rideshare on iron III, which is scheduled for about this time next year.
Speaker Change: And then the second one second and third will go office arrived shot iron for which we're currently slated for the second half of 2007.
Speaker Change: And then the fourth and fifth would go off about a year after that.
Speaker Change: We're all going to a highly elliptical polar orbit around the moon that will have a long stare time around the south pole, which is a requirement for mass in terms of.
Speaker Change: The coverage over the Sao Paulo region.
Yelena Snow: Okay, thank you very much.
Speaker Change: Okay. Thank you very much.
Speaker Change: Thank you.
Austin Moeller: Our next question, coming from the line... Austin Moeller with Canon Core Genuity, Ilana Hi, good morning. So just my first question, has the data collected during IM2 impacted your conversations with NASA or plans for the upsized Nova D'Lander? And has NASA decided if they will pay a vendor to deliver the Viper rover yet? With respect to NOVA-D, we're currently in the design cycle to get to preliminary design review for the demonstration mission for LTV delivery, so NOVA-D continues on. We are doing the hot wash associated with IM2 and the faults we saw in the laser altimeters, and we're doing a complete system review.
Speaker Change: Our next question coming from the line of.
Austin <unk> with Canaccord Genuity. Your line is now open.
Speaker Change: Hi, Good morning. So just my first question how does the data collected during I am too impacted your conversations with NASA or plans for the upsize, Nova D lender and has NASA decided if they will pay a vendor to deliver the viper over yet.
Speaker Change: With respect to Nova D. We're currently in the design cycle to get to preliminary design review for the.
Speaker Change: Demonstration mission for LTV delivery. So nobody continues on we are doing the hot wash associated with I am too and the false we saw in the laser altimeters and we're doing a complete system review I don't expect much change to the way the designs going for Nova.
Steve Altemus: I don't expect much change to the way the design's going for NOVA-D coming out of that hot wash, and like I said in my comments, Austin, that we'll actually look at any effects to IM3 other than the laser range finders that might be incorporated into that mission this time next year. Your other part of your question was VIPER. Right now, NASA put out an RFP to industry to say after they looked at all the RFIs that were submitted and said, hey, submit a proposal, they'll do a down-select. Once they see all those proposals, we expect that down-select here shortly, probably by the end of the month.
Speaker Change: Coming out of that Hot Bosch and like I said in my comments Austin will actually look at.
Speaker Change: Any effects to I am three.
Speaker Change: Other than the laser rangefinders that might.
Speaker Change: We incorporate it into that that mission. This time next year.
Speaker Change: The other part of your question was the Viper.
Speaker Change: Right now NASA put out an RFP to industry to say after they looked at all of the RFID that were submitted.
Speaker Change: Said he put submitted proposal they'll do a down select once they see all of those proposals, we expect that down select here shortly probably by the end of the month and then they'll do.
Steve Altemus: And then they'll do kind of a down-select from those ones that give a good plan or meet the competitive range. I'm not sure what we're going to do with that VIPER yet. The way that came out, that's got to be fully funded without NASA, and NASA retains all the data, so it's quite limited in our ability to commercialize it, so we're still thinking about what we want to do there. And if we just think a little bit further out, the new administration has said they have Mars as a priority.
Speaker Change: Kind of a.
Speaker Change: Diesel down select from those from those.
Speaker Change: One is that.
Speaker Change: Yes, I'll give a good plan or meet the competitive range.
Speaker Change: Sure what we're going to do with that Viper, yet the way that came out thats got to be fully funded without the government without NASA and NASA retains all the data. So it's quite limited in our ability to commercialize it so were still thinking about what we want to do there.
Speaker Change: Okay, and if we just think a little bit further out the new administration has said they have Mars is a priority. So has the new administrator discussed with you or the other cliffs participants an equivalent program for doing commercial lenders on margin just given the cost overruns on Mars sample return.
Steve Altemus: So has the new administrator discussed with you or the other CLPS participants an equivalent program for doing commercial landers on Mars, just given the cost overruns on Mars sample return? We've been talking for about two years now with the agency and the administrators and deputy administrators of the agency about using the CLIPS model to replace the aging infrastructure around Mars, and so that conversation has been well-received so far. We have not had discussions yet about how that might play in this administration or with this new administrator once confirmed, so we plan to have those discussions and see what that might be.
Speaker Change: We've been talking for about two years now with the agency and the.
Speaker Change: Administrators.
Speaker Change: Deputy administrator of the agency about using the clips model to replace the aging infrastructure around Mars.
Speaker Change: That conversation has been well received so far we have not had discussions yet about how that might play in this administration.
Speaker Change: Or with this new administrator once confirmed so we plan to have those discussions and see what that might be I would say, though that it is clear to us from our discussions on the hill with everybody that we run into and talk to and meet with is that the moon is of strategic interest in.
Steve Altemus: I would say, though, that it is clear to us from our discussions on the Hill with everybody that we run into and talk to and meet with is that the moon is of strategic interest and will remain that way. The idea of Mars first or Mars only is really not the mainstream thinking at this time. Mainstream thinking is that a stretch goal for Mars is a good thing for the country. Well, the moon is of strategic interest and will remain. Thanks for all the details there.
Speaker Change: We'll remain that way the idea of Mars first or Mars only is really not.
Speaker Change: The mainstream thinking at this time mainstream thinking is that a stretch goal for <unk> is a good thing for the country. While the moon is of strategic interest and will remain so.
Austin Moeller: I'll pass it back. Thank you.
Speaker Change: Thanks for all the details there I'll pass it back thank you.
Speaker Change: Great.
Speaker Change: Thank you.
Andres Sheppard: Our next question coming from the line of Andres Sheppard. Strobel under Hey, everyone. Good morning. Congratulations on the quarter. And thanks for taking our question.
Speaker Change: Our next question coming from the line of Undress Shepard with Cantor Fitzgerald. Your line is now open.
Undress Shepard: Hey, everyone. Good morning, congratulations on the quarter and thanks for taking our question.
Steve Altemus: I was just wondering if maybe you could elaborate a little bit further on some of the data that you were able to procure from the IM-2 mission, maybe particularly on the Nokia side. Just curious if you could tell us how that communication worked out versus expected. Thank you.
Undress Shepard: Just wondering if maybe you could elaborate a little bit further on some of the data that you were able to procure from the <unk> mission, maybe particularly on the Nokia side. Just curious if you could tell us how that.
Undress Shepard: <unk> and workout in versus expected. Thank you.
Steve Altemus: Yeah, good morning, Andres. Let's see, Nokia Bell Labs had a fully successful payload. Operations on the Moon, where they tested out each element of their cellular network with us. Even though we were on our side, Nokia was able to power up and communicate with each part of that network, demonstrating that that technology, Earth-based technology, hardened for space, was successful. And so this is really a good news story in terms of how you can take that technology all the way to TRL level 9, and now we have the basis for surface communications between elements on the Moon.
Andres: Yes, good morning Andres.
Undress Shepard: Let's see Nokia Bell labs.
Undress Shepard: Fully successful.
Undress Shepard: Payload.
Undress Shepard: <unk>.
Undress Shepard: Operations on the Moon, where they test it out each element of their cellular network with us even though we were on our side Nokia was able to power up.
Undress Shepard: And communicate with each part of that network.
Undress Shepard: Demonstrating that that technology Earth based technology Harden for space was successful and so this is really good.
Undress Shepard: A good news story in terms of how you can take that technology, all the way to TRL level nine.
Undress Shepard: And now we have the basis for surface communications between elements on the move so.
Andres Sheppard: So, a rousing success for Nokia Bell Labs. Very helpful. Appreciate that, Keller.
Speaker Change: A rousing success for Nokia Bell labs.
Undress Shepard: Very helpful. I appreciate that color.
Steve Altemus: And maybe just as a quick follow up, Steve, you touched on this a little bit on the call, but maybe just remind us, you know, what are the key catalysts, maybe the near term key catalysts that you think investors should be aware of, you know, as we look you know, for in 2025. Thank you. Yeah, so right now the team is getting ready for the NOVA-D design cycle review with NASA on that delivery vehicle, the heavy cargo variant for delivery of the LTV. And we'll also do a preliminary design review with NASA in the first half of this year on the LTV itself, Lunar Terrain Vehicle.
Speaker Change: And maybe just as a quick follow up.
Speaker Change: Steve you touched on this a little bit on the call, but maybe just remind us.
Speaker Change: What are the key catalyst maybe the near term.
Speaker Change: Key catalyst that you think investors should be aware of as we look.
Speaker Change: For in 2025, thank you.
Speaker Change: Yes, so right now the team is getting ready for that.
Speaker Change: <unk> D design cycle review with NASA.
Speaker Change: On that delivery vehicle the heavy cargo variant for delivery of the LTV.
Speaker Change: Also do.
Speaker Change: Eliminate design review with NASA.
Speaker Change: In the first half of this year on the LTV itself lunar trained vehicle and then you heard that we're going to have the next clips mission called <unk> six.
Steve Altemus: And then you heard that we're going to have the next CLPS mission called CS6 procurement in May. Proposals are due with award in July. And then finally, there's a third project or contract, that's the second CLPS award this year, which we expect later in the year. So those are the big contract award milestones.
Speaker Change: Procurement and May proposals are due with award in July and then finally, there is a third.
Speaker Change: Sure.
Speaker Change: A third project with a contract Thats. The second clips award this year, which we expect later in the year.
Speaker Change: So those are the big contract award milestones, while we prepare our first satellite for launch on <unk>. Three this time next year that satellite will be delivered for integration.
Steve Altemus: While we prepare our first satellite for launch on IM3 this time next year, that satellite will be delivered for integration to us for our payload integration this year and ready to fly early next year. Super helpful. Thank you so much. And congrats again.
To the.
Speaker Change: To us for our payload integration this year and ready to fly early next year.
Speaker Change: Super helpful. Thank you so much and congrats again I'll pass it on.
Steve Altemus: I'll pass it on. Thank you.
Speaker Change: Thank you.
Edison Yu: Our next question coming from the line of Edison Yu with Deutsche Bank, you'll understand Hey, good morning. Thanks for taking our questions. First, I want to ask about the cash. You're obviously in a very good position now, after the recent raises. How are we thinking about deploying that? Do you have a pipeline of M&A that might be of interest? So, we have a continuing process of review for opportunistic M&A, where we review what capabilities as a company we want to put add-on, where we have soft spots in the supply chain, for example, or where we want to vertically integrate.
Speaker Change: Thank you.
Speaker Change: Our next question coming from the line of Edison <unk> with Deutsche Bank. Your line is now open.
Speaker Change: Hey, good morning, Thanks for taking our questions first I wanted to ask about the cash obviously in a very good position now after the recent ranges how are we thinking about deploying that do you have a pipeline of M&A.
Speaker Change: It might be of.
Speaker Change: Of interest.
Speaker Change: So we have.
Speaker Change: Continuing process of review for.
Speaker Change: Opportunistic M&A, where we review.
Speaker Change: What capabilities as a company we want to.
Speaker Change: Put add on where we have soft spots in the supply chain for example, or where we want to vertically integrate we also want to think about markets and opening up a new customer to diversify our revenue streams. So we look at these on a continuing basis and we'll be strategic in our assessment of M&A going forward. There's also a number of.
Steve Altemus: We also want to think about markets and opening up a new customer and diversify our revenue stream. So, we look at these on a continuing basis and will be strategic in our assessment of M&A going forward.
Steve Altemus: There's also a number of technology innovations that we want to on-ramp. In particular, you know, for the Nova-D, we want to make sure that the propulsion system is, you know, up to date. developed in a way that can support the heavier cargo lander. So for example, investment in an e-pump project to put electric pumps on the main engine would be a good project we've already started. So there'll be some of those innovations we'll be doing with the capital, and some of the strategic M&A we're thinking about will continue. Understood.
Speaker Change: Technology innovations that we want to on ramp in particular for the Nova D. We want to make sure that the propulsion system is.
Speaker Change: Developed in a way that can support the heavier cargo lander. So for example investment in an E pump project to put electric pumps on the on the on the main engine will be a good project. We've already started so there'll be some of those innovations will be doing with the capital and some of the strategic M&A. We are thinking about will continue.
Steve Altemus: And now follow up, you mentioned the new administration earlier. I'm wondering if you can talk about the potential opportunities in defense. In the context of some of these big programs, is there a lot of incremental CAM that could be derived from some type of DOD defense path?
Speaker Change: Understood and then a follow up you mentioned that the new administration earlier.
Speaker Change: I'm wondering if you could talk about the potential opportunities in defense.
Speaker Change: In the context of some of these big programs is there a lot of incremental Tam.
Speaker Change: Could could be derived from some type of DMD defense and pass.
Steve Altemus: Yeah, the way I talk about defense tech or DoD tech is really national security space tech. So, as we're building out our network, the Near Space Network services, there's a lot of space domain awareness, space traffic management capability. By having assets in and around the moon that we can move into that market. And like I said, other areas where communications are needed, data relay, we have that architecture now and that IP associated with flying those kinds of data relay satellites with those kind of radio packages and sensors. All that can be applied to that national security space market.
Speaker Change: Yes, the way I talked about.
Speaker Change: Defense Tetra Tech is really national security space Tech. So as we're building out our network the near Space Network services. There is a lot of space domain awareness based traffic management capability by having assets in and around the moon that we can we can move into that market.
Speaker Change: Like I said other areas, where communications are needed data relay we have that.
Speaker Change: Architecture, now and that that IP associated with flying those kinds of data really satellites with those kind of <unk>.
Radio packages and sensors all of that can be applied to that that national security space market.
Ronald Epstein: Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you.
Steve Altemus: Our next question, coming from the line of Ronald Epstein with Bank of America, your line is now open. Hey, good morning, guys. I mean, so far, we've covered a lot of ground, but just wanted to circle back on what's your thinking on the impact that Department of Government Efficiency could have on NASA, what it could mean for you guys. You know, Musk seems to be a big influence. keeps talking about Mars and yeah how do we circle that all up and what's it mean Well, I think the Department of Government Efficiency is looking to drive efficiency within NASA, in particular, in our case, and the monies that are recaptured or saved can be applied to commercial space endeavors that could be more efficient.
Speaker Change: Our next question coming from the line of Ronald Epstein with Bank of America. Your line is now open.
Ronald Epstein: Hey, good morning, guys.
Speaker Change: So far we've covered a lot of ground, but just wanted to circle back on what's your thinking on the impact that.
Ronald Epstein: The <unk>.
Ronald Epstein: Department of government efficiency could have on NASA, what it could mean for you guys.
Ronald Epstein: And musk seems to be a big influence here.
Ronald Epstein: He keeps talking about Myers.
Ronald Epstein: How do we circle that all up and what does it mean for you.
Ronald Epstein: Well I think the department of government efficiency is looking to drive.
Ronald Epstein: Efficiency within NAFTA in particular in our case.
Ronald Epstein: The monies that are.
Ronald Epstein: Re captured or saved can be applied to commercial space endeavors that can be more efficient and so like I said the two of the machines.
Steve Altemus: And so, like I said, the Intuitive Machines is in a position now where we can navigate this kind of commercial market, we're driving innovation in a rapid, affordable way to deliver space systems reliably, and that is attractive for this modern era or modern administration approach towards NASA. So, I think this is good. This is the way the space agency can get more accomplished and be more globally competitive. So, I think in the end, while there might be reformulations within Artemis or changes within the civil servant workforce of NASA, the efficiency of the government driving innovation and delivering space systems on a regular cadence is only good for, like I said, our global competitiveness.
Ronald Epstein: In a position now where we can navigate this kind of commercial market, we're driving innovation in a rapid affordable way to deliver space systems reliably.
Ronald Epstein: And that is attractive for this.
Ronald Epstein: Modern era modern administration approach towards NASA. So I think this is good this is the way.
Ronald Epstein: The space agency can get more accomplished and be more globally competitive. So I think in the end, while there might be re formulations within arm Artemis or.
Ronald Epstein: Changes within the.
Ronald Epstein: The civil servant workforce of NASA, the efficiency of the government driving innovation and delivering space systems on a regular cadence is only good for like I said, our global competitiveness.
Steve Altemus: So, I think that's a good thing.
Steve Altemus: Mars first. Mars is further away. As an architect, space architect, I can tell you it's more than a presidential administration away. So, while we can have a stretch goal to aim and build the technologies for Mars, like I said, the moon is of strategic interest and will remain so, and so that's where our focus will be. However, a lot of our technologies are extensible to deeper space, and we will be looking at opportunities to replace some of the aging infrastructure around Mars if that's the direction the country wants to go.
Think thats a good thing.
Speaker Change: <unk> first Mars is fair.
Speaker Change: Further away as an architect space architect that could tell you it's more than a presidential administration away. So while we can have.
Speaker Change: Have a stretch goal to aim and build the technologies for Mars.
Speaker Change: I said the Moon is of strategic interest and will remain so and so that's where our focus will be however, a lot of our technologies are extensible to deeper space and we will be looking at opportunities.
Speaker Change: To replace some of the aging infrastructure around Mars, if that's the direction the country wants to go.
Steve Altemus: And then, I mean, just maybe two follow-ons, if I can. Be it that Mars is farther away, right, if we look at it as an opportunity, wouldn't that suggest that that's just a lot more work, which could potentially be good for you if they were to go that way? Meaning, you know what I mean? It is a bigger hurdle, but the bigger hurdle would require more funding. I don't know if I'm thinking about that right. But if they do push that way or maybe push that way in parallel, that could potentially be good, right? Well, I think if you think about constrained budgets, that's one of the factors that the House and the Senate are going to have to deal with in how they fund future space programs. If we say that there's efficiency coming out of NASA, the Artemis program may move to the right.
Speaker Change: And then I mean, just maybe two follow ons if I can.
Speaker Change: Be it that margin is farther away right.
Speaker Change: It is an opportunity wouldn't that suggest that that's just.
Speaker Change: Lot more work, where it could potentially be good for you if they were to go that way.
Speaker Change: <unk>.
Speaker Change: It is a bigger hurdle, but bigger hurdle would require more funding.
Speaker Change: If I'm thinking about that right, but if they do push that way or maybe pushed that way in parallel.
Speaker Change: That could potentially be good right.
Well I think if you think about constrained budgets, that's one of the factors that.
Speaker Change: The house and the Senate are going to have to deal with and how they fund future space programs.
Speaker Change: <unk>.
Speaker Change: We say that theres efficiency coming out of NASA. The Artemis program may move to the right. What's important is that the near space network is decoupled from Artemis currently in the budget and that gets implemented so that we have a strategic asset in and around the moon and we revamped and.
Steve Altemus: What's important is that the near space network is decoupled from Artemis currently in the budget, and that gets implemented so that we have a strategic asset in and around the moon. And we revamp the Mars sample return to become more affordable. That might create more opportunity to put the aging infrastructure replacements in orbit around Mars. And so you'd have to look at all the deck chairs and how they get shuffled. But all of this. speaks to the need for agile commercial space involvement in not only opening the cislunar economy, but actually contributing to commercializing Mars.
Speaker Change: Mark sample returned to become more affordable that might create more opportunity to put the aging.
Speaker Change: Replacements in orbit around Mars, and so you'd have to look at all the deck chairs and how they get shuffled.
Speaker Change: But all of this.
Speaker Change: Speaks to the need for agile commercial space involvement in not all leased at opening the system our economy, but actually.
Speaker Change: Contributing to <unk>.
Speaker Change: Commercializing Marsh.
Steve Altemus: got it.
Ronald Epstein: And then maybe this is the last one. If we're in a continuing resolution for fiscal 25. I mean, it seems like that's what's gonna happen, right? Or like, maybe just a hair away from that. But a lot of people are now talking that fiscal 26 could be a continuing resolution. How does that impact you? I mean, when we think about your business and a CR or two years of a CR. Well, our company currently is working on existing programs that are covered under the Continuing Resolution, and those programs would exist moving forward in a Continuing Resolution in 2026, obviously.
Speaker Change: Got it and then maybe last one yes.
Speaker Change: We're in a continuing resolution for fiscal 'twenty five I mean, it seems like that's what's going to happen right.
Speaker Change: Maybe just a hair away from that.
Speaker Change: But a lot of people are now talking to a fiscal 'twenty six could be a concern.
Speaker Change: Continuing resolution how does that impact you I mean, when we think about your business in <unk>.
Speaker Change: Our two years of a CR.
Speaker Change: While our company currently is working on.
Existing programs that are covered under the continuing resolution and those programs exist.
Speaker Change: Sure.
Speaker Change: Moving forward would exist moving forward in a continuing resolution in 2026, obviously.
Steve Altemus: We'll have to see about what happens there.
Speaker Change: It might.
Speaker Change: We'll have to see about what happens there.
Steve Altemus: I did mention I'm going up to testify on the House Subcommittee to talk about CLPS 2.0 and the follow-on and moving towards heavier cargo deliveries. Right now, CLPS is funded, NSNS is funded, LTV is funded, so all our programs there with NASA seem to be in a good position. All right.
Speaker Change: I did mentioned I'm going up to testify on the house Subcommittee to talk about <unk> 2.0, and the follow on and moving towards a heavier cargo deliveries.
Speaker Change: Right now clips is funded Nsls's funded LTV is funded so all of our programs there with assets seem to be in a good position.
Josh Sullivan: Thank you.
Speaker Change: Gotcha alright, thank you.
Speaker Change: Thank you.
Josh Sullivan: Our next question, coming from the line Josh Sullivan with the Benchmark Company. Your line is now open. Hey, good morning. Morning, Josh.
And our next question coming from the line of Josh Sullivan with the Benchmark Company. Your line is now open.
Josh Sullivan: Hey, good morning.
Speaker Change: Good morning, Josh.
Josh Sullivan: Just on on the comment earlier on the full core press into data services, can you talk maybe about How are you, Ma? So Jim Farrell was an addition. We were very fortunate to bring Jim on board. He has incredible experience in bringing in, like starting DigiGlobe, which has then went to Maxar. He's worked for Lockheed. He's worked for NASA. He's got incredible depth of experience in data services, from Earth observation kind of data services. So when we think about the Near Space Network, we think about data services. And actually, if you also recall, we now run the LRO camera, Lunar Reconnaissance Orbiter camera, and the ShadowCam with a group in Phoenix.
Speaker Change: Just on the comment earlier on the full core press into data services can you talk maybe about Jim's appointment how are you modeling that long term communications revenue model at this point.
Speaker Change: Appointment or a perspective that.
Speaker Change: So.
Speaker Change: Jim.
Speaker Change: In addition, we were very fortunate.
Speaker Change: To bring Jim on board he has incredible experience in.
Speaker Change: Bringing in.
Speaker Change: Starting digitalglobe to said went to Max our he's worked for Lockheed He's worked for NASA. He's got incredible depth of experience in data services from.
Speaker Change: Earth observation kind of data services, so when we think about.
Speaker Change: The near Space Network, we think about data services and actually if you also recall that we now run the.
Speaker Change: <unk>.
Speaker Change: Camera lunar reconnaissance or whatever in the shadow Tam with a group in Phoenix and so we have our largest risk positivity of lunar data that we steward for NASA and we talk about integrating the data products that are collected by <unk> with our own data products, we can start to get.
Steve Altemus: And so we have a largest repository of lunar data that we steward for NASA. And we talk about integrating the data products that are collected by LRO with our own data products. We can start to get serious data content out of this network. And Jim is the one who knows how to commercialize that, having done that three times. And he also brings incredible experience in national security space and connections, where we can actually build this network, like I said, as a national asset to serve other government agencies as well. So that's really his forte. And that's why we brought him in as we did.
Speaker Change: Serious data content out of this network and Jim is the one who knows how to commercialize that having done that three times and he also brings incredible experience in national security space and connections, where we can actually bill.
Speaker Change: Build this network like I said as a national asset to serve other government agencies as well so that's really his.
Speaker Change: <unk> <unk> and that's why we brought him in.
Steve Altemus: And we're very proud to have him on board.
Speaker Change: As we did and were very proud to have him on board.
Speaker Change: Got it.
Steve Altemus: And then Steve, on your plans to speak to Congress. What needs to be communicated at that event, or maybe what does Congress need to be convinced of that it's not already inclined to pursue, you know, with clips? Well, the success of the lunar commercialization and where we're going with that in terms of communications, space traffic management, developing infrastructure and factories on the moon is essential for our strategic interests.
Speaker Change: And then Steve on your plans to speak to Congress on clips.
Speaker Change: It needs to be communicated at that event or maybe what is congress need to be convinced that it is not already inclined to pursue clips likes models.
Speaker Change: While the success of the.
Speaker Change: Luna commercialization and where we're going with that in terms of.
Speaker Change: Communications.
Speaker Change: Space traffic management.
Speaker Change: Developing infrastructure and <unk>.
Speaker Change: Factories on the Moon.
Speaker Change: Central for.
Steve Altemus: Now, if you think about clips and how you can alter the first clips. program into 2.0 would be to move towards heavier and heavier cargo, so that set up that logistics supply that we can get equipment to to to begin building these factories on the moon and to begin you know working autonomously on the moon and by emphasizing heavier cargo spreading that delivery across multiple directorates within NASA, multiple budget line items to serve not only science but the human spaceflight side, the space technology side, right, the exploration side. All of that is what we want to communicate to to the house about Eclipse 2.0.
Speaker Change: Our strategic interests now if you think about clips and how you can you can alter the first clips.
Speaker Change: Program into two dot O would be to move towards heavier and heavier cargo so that setup that logistics supply that we can get equipment to begin building. These factories on the moon and to begin working.
Speaker Change: Autonomously on the Moon and bye.
Speaker Change: Emphasizing heavier cargo.
Speaker Change: Spreading that delivery across multiple directorates within NASA multiple budget line items to serve not only science, but the human space flight side.
Speaker Change: The space technology side right. The exploration side all of that is what we want to communicate to to the house about the eclipse two pointed out.
Steve Altemus: Thank you for the time.
Speaker Change: Got it thank you for your time.
Greg Pendy: Okay. And our next question, coming from the lineup, Greg Pendy with Clear Street, Ilan Ismail. Hey guys, thanks for taking my question. I'm just I know you're going through the hot wash right now.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: And our next question coming from the line of Greg <unk> with <unk>. Your line is now open.
Speaker Change: Hey, guys. Thanks for taking my question.
Speaker Change: Just I know you've gone through the hot wash right now, but just from.
Steve Altemus: But just from, you know, The targeted mission for IM-3 with Rainier Gamma region of the moon, what type of flexibility would you have on that region to possibly push the data out further if you felt you needed that time? What does the launch windows look like for that region of the moon? Thanks. Yeah, we have quite a bit of flexibility, if needed. Right now, we're not anticipating a shift in the schedule. Should that unexpected shift occur, we have several months of give in that schedule to still meet that equatorial mission to Rhino Gamma. It's not as highly constrained as the South Pole missions are, which seem to be occurring in the fourth quarter and first quarter.
Speaker Change: The targeted medicine for I am thrilled with the rainy or gamma region at the moment what type of flexibility would you have on that region, yes, possibly.
Speaker Change: Possibly pushing the data out further out you need at that time, what is the launch windows look like for that region at the moment. Thanks.
Speaker Change: Yes, we have quite a bit of flexibility if needed right now we're not anticipating a shift in the in the schedule.
Speaker Change: Should that unexpected shift occur we have several months.
Speaker Change: On.
Speaker Change: Given that and that scheduled to still meet that equatorial mission to Ryan or damage not as highly constrained as the south pole missions are which seem to be occurring in the in the fourth quarter and first quarter. This can extend first and second quarter easily.
Steve Altemus: This can extend first and second quarter easily.
Steve Altemus: Right, and then just just one more on that. I am three. What type of timeline would you think you'd need for commissioning on that first satellite before you can get the follow-on task revenue opportunity? Yeah, we think you get that bird up and in its polar orbit. We have about a 60- to 90-day commissioning period before we do a communications check, data relay check with an asset in orbit. So our satellite to another asset, that check is a validation task order, and then we can start the follow-on operational task order. Great, that's helpful. Thanks a lot.
Speaker Change: Great and then just just one more on that.
Speaker Change: I am three machines.
Speaker Change: What type of timeline would you think you'd need for commissioning on that first.
Speaker Change: The first.
Speaker Change: Satellite before you can get a follow on cask rabbit.
Speaker Change: Taskrabbit no opportunity.
Speaker Change: Yes, we think you get that or that bird up in and its polar orbit, we have about a 60 to 90 day.
Speaker Change: Commissioning period before we do a communications check data relayed check with an asset in orbit, so our satellite to another asset.
Speaker Change: Check is a validation task order and then we can start the <unk>.
Speaker Change: Follow on operational quarter.
Speaker Change: Yeah.
Speaker Change: Great. That's helpful. Thanks, a lot.
Speaker Change: Sure.
Speaker Change: Thank you.
Pete Mcgrath: Our last question in queue coming from the lineup, Eric Brunson with Stifel. Yeah, thanks for taking the questions. You guys gave an outlook for 25, 250, 300 million in revenue, any insights that maybe you can share that that gets you to this range? And, and then maybe just how should we think about the shape of that growth throughout the year? I guess we'll start with the fact that if you look at the backlog numbers and the percentages I talked about earlier, it gives you a good indication that a lot of our revenue to get to the bottom of the range is from existing contracts and work we have in front of us.
Speaker Change: Our last question in queue coming from the line of Eric <unk> with Stifel. Your line is now open.
Eric: Yes, thanks for taking the questions.
Speaker Change: You guys gave an outlook through 'twenty five.
Speaker Change: $250 million to $300 million.
Speaker Change: And revenue any insights maybe you can share that that gets you to this range.
Speaker Change: And then maybe just how should we think about the shape of that growth throughout the year.
Speaker Change: I guess, we'll start with the fact that if you look at the backlog numbers and the percentages.
Speaker Change: Talk about earlier it gives you a good indication that.
Speaker Change: A lot of our revenue to get to the bottom of the range is from existing contracts on work we have in front of us.
Pete Mcgrath: Because those are on contract, they're going to be throughout the entire year. So that's a pretty steady rate of revenue. What we're looking to grow with are the things that Steve mentioned earlier about the opportunities that we have in front of us this year, which include two CLPS opportunities, and there is potential upside depending on what happens with the market and the congressional direction as to funding and NASA direction as to where programs are going, like things where LTVS could actually be awarded this year, and there could be revenue this year. We're not putting that in our plan today, but that gives us some opportunity.
Speaker Change: Because those are on contracts theyre going to be throughout the entire year. So that's a pretty steady rate of revenue.
Speaker Change: Well, we're looking to grow with or the things that Steve mentioned earlier about the opportunities that we have in front of us This year, which include two clips opportunities.
Speaker Change: And there is potential upside depending on what happens with the market and the congressional direction as to funding and NASA direction as to where our programs are going.
Speaker Change: Things, where ltvs could actually be awarded this year and there could be revenue. This year, we're not putting that in our plan today, but that gives us some opportunities.
Steve Altemus: NASA Jet Propulsion Laboratory, California Institute of Technology That allows us to fit within the.
Speaker Change: That allows us to fit within the range.
Steve Altemus: Great. Maybe just, I know the Hot March Review is ongoing and there's still a lot of work to be done, but any sort of initial observations that maybe you can share, and I know coming out of IM1, there was around 60 some odd items that you needed to address coming into IM2. Would you expect that list to be maybe as much or greater or less than, you know, maybe just some initial thoughts would be helpful. The hot wash is set up, and it's our own idea about coming from our experience with working with human spaceflight programs. And we take a 30-day period, very focused time frame, short interval, but very focused, and we examine every aspect of the development, the development testing, the assembly integration and functional testing of the vehicle, how we did at the CAPE when we went to Florida to do the integration of the payloads, how the launch wet dress rehearsal went and how the launch went, how the mission all unfolded, and how each phase of the mission all the way down to the surface and the payload operations.
Speaker Change: Great and maybe just I know that walks reviews ongoing.
Speaker Change: You just still a lot of work to be done, but any sort of initial observations that may be you can share.
Speaker Change: Coming out of I am one there was around 60, some odd items that you needed to address.
Speaker Change: Coming into <unk> would you expect that list to be may be.
Speaker Change: As much or greater or less than.
Speaker Change: Maybe just some initial thoughts would be helpful.
Speaker Change: <unk> is set up.
Speaker Change: It's our own idea about coming from our experience with working with human spaceflight programs and we take a 30 day period very focused timeframes short interval, but very focused and we examine every aspect of the development.
Speaker Change: The development testing the assembly integration and functional testing.
Speaker Change: Of the vehicle, how we did at the Cape When we went to Florida to do the integration of the payloads, how the law launch wet dress rehearsal wet and how the launch went.
Speaker Change: The mission of unfolded.
Speaker Change: And how each phase of the mission all the way down to the surface and the payload operation. So we're very comprehensive when we take a look at this.
Steve Altemus: So we're very comprehensive when we take a look at this, and we identify not only what went wrong, what went right, but where were there some soft spots that could use shoring up to increase reliability, or what were the faults that occurred, and what do we need to address? And those get binned in a set of categories of those that need to be implemented for the next immediate mission or those that can be carried as fleet upgrades as we go forward in the future. So that's kind of the process. We expect our internal... review meeting on April 3rd, where we will hear findings from across all the subsystems. And then we'll probably close that out, where we'll finalize everything around the 15th of April.
Speaker Change: And we identify not only.
Speaker Change: Wrong.
Speaker Change: Right.
Speaker Change: But where there's some soft spots that could do shoring up to increase reliability or what were the fault.
Speaker Change: <unk> and what do we need to address and those get burned in a set of categories of those need to be implemented for the next immediate mission or those that can be carried as fleet upgrades as we go forward in.
Speaker Change: In the future.
Speaker Change: So that's kind of the process, we expect our internal.
Speaker Change: Review.
Speaker Change: Meeting on April 3rd.
Speaker Change: We will hear findings from across all of the sub systems and then we will probably be close that out where we will finalize everything around the 15th of April and then from there we're going to.
Steve Altemus: And then from there, we're going to, you know, talk it to all our stakeholders, our customers, our NASA stakeholders, and share our lessons learned. So we're very transparent. Like I said, we have some external reviewers from NASA, ESA, and JPL that are subject experts. And we're looking forward to the findings, because it only makes us better and stronger.
Speaker Change: Talking to all our stakeholders our customers our NASA.
Speaker Change: <unk>.
Speaker Change: Stakeholders and share our lessons learned.
Speaker Change: We're very transparent like you said, we have some external reviewers from NASA Isa in JPL that are subject experts and we're looking.
Speaker Change: Going forward to the findings because it only makes us better and stronger.
Steve Altemus: Great, thanks for that. Good luck.
Speaker Change: Great. Thanks for that good luck.
Speaker Change: Thank you.
Operator: And I'm showing no further questions in the queue at this time.
Speaker Change: Thank you and I'm showing no further questions in the queue. At this time I will now turn the call back over to Joseph Machine CEO, Mr. Steve Hoffman for any closing remarks.
Steve Altemus: I will now turn the call back over to Intuitive Machines CEO, Mr. Steve Altemus, for any Well, thank you, everybody, for your participation and your questions. And we're looking forward to another exciting year of growth for Intuitive Machines in 2025. Thank you.
Speaker Change: Well. Thank you everybody for your participation and your questions and we're looking forward to another exciting year of growth for <unk> machines in 2025. Thank.
Speaker Change: Thank you.
Operator: Ladies and gentlemen, this concludes today's call. Thank you for participating. You may now.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Operator: Thank you for watching!
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].