Intuitive Machines, Inc. (LUNR) Earnings

Management highlights

### Strategic Transformation to Integrated Next-Generation Space Prime - The company has evolved from a pure-play lunar delivery provider to an integrated aerospace firm organized around three core pillars: build, connect, and operate end-to-end space infrastructure across LEO, GEO, cislunar, and deep space. - Completed three strategic acquisitions (Lanteris, Kinetics, Goonhilly Earth Station/ComSat) that added full satellite manufacturing, mission operations, deep space navigation, and global ground communications infrastructure capabilities, expanding total addressable market from ~$20 billion to over $150 billion across civil, commercial, and national security sectors. ### Pillar 1: Build Spacecraft and Physical Infrastructure - **Civil Space**: Secured the CS8 CLPS mission contract with NASA, extending lunar delivery cadence to 2030 (now holds 5th and 6th CLPS missions); began work reconfiguring the Gateway power and propulsion element for NASA's Mars SR-1 Freedom mission; continues operating Lunar Reconnaissance Orbiter Camera and ShadowCam programs, with a planned lunar impact site imaging flight scheduled the following week. - **National Security Space**: Successfully delivered all 16 satellites for SDA Tranche 1 Tracking Layer; continues production on Tranche 2 and was awarded 18 additional satellites for Tranche 3, plus a further 18 satellites for the AMDT-3 program under the U.S. Golden Dome architecture; holds over 70 IM-300 spacecraft under contract, representing unprecedented simultaneous production scale; secured a Phase 3 contract for the Nebula orbital transfer vehicle advancing it from design to full-scale development. - **Commercial Space**: Awarded a $600 million contract for three geostationary communication satellites from an undisclosed customer; successfully launched and deployed Sirius XM11, on track for customer handover later in the quarter; is pursuing strategic partnerships to enter the emerging commercial orbital data center market leveraging its high-power satellite architecture. ### Pillar 2: Connect Space Assets via Resilient Networks - Building multi-customer communications and navigation infrastructure spanning from Earth orbit to the lunar surface, to support the growing volume of deep space activity. The first Altus 1 lunar communications relay satellite remains on track for Q1 2027 launch onboard Mission 3. - Accelerated deployment of the remaining four Altus (2 through 5) relay satellites, now planned for a combined dedicated launch in 2028 to complete the full lunar communications constellation a year earlier than originally scheduled, to align with NASA's Artemis program timeline. - Upgrading the ground segment of the Near Space Network, including new tri-band antenna installation in Pennsylvania and integration of newly acquired Goonhilly (UK) and ComSat (U.S.) facilities into the global network. ### Pillar 3: Operate Infrastructure for Recurring Revenue - Transitioning business model from one-off hardware delivery to long-term lifecycle operations to generate durable recurring revenue, leveraging in-house manufacturing, communications, navigation, and mission operations capabilities. - Invested strategically in inventory, production capacity, and manufacturing efficiency in the quarter to enable faster delivery timelines, as customers increasingly require higher volume and faster turnaround compared to traditional aerospace procurement models. The company reports these investments have already supported recent contract awards. - Record Q2 bookings of $1.2 billion (year-to-date 2026: $1.7 billion) includes partial Authority to Proceed (ATP) awards that are expected to add an additional $300 million to backlog in H2 2026 as contracts are fully finalized. Q2 bookings were 20% civil, 50% commercial, and 30% national security, demonstrating ongoing business diversification.

Guidance

- Management reaffirmed full-year 2026 guidance of $900 million to $1 billion in total revenue, and continues to expect full-year adjusted EBITDA to be positive. - The primary variable that will determine the final result within the revenue range is the timing of contract definitization of partial ATP awards and associated revenue conversion, not weak customer demand. Management indicates strong visibility for hitting the lower end of the range, with opportunities to move higher if definitization occurs earlier in H2 2026. - Capital expenditures are expected to remain at elevated levels in coming quarters as the company continues work on the full five-satellite Altus communications constellation. - Free cash flow is expected to improve throughout H2 2026 as strategic investment levels stabilize and milestone payments from recent awards are received. - Management expects additional backlog growth in H2 2026 from multiple large multi-year NASA and national security programs, including new CLPS task orders and the 10-year CLPS II multi-award follow-on contract.

Segment performance

The company does not break out separate financial performance for its three strategic segments (build, connect, operate). Overall Q2 2026 results: total revenue of $206 million, representing over 400% year-over-year growth. Gross profit was $36 million, an improvement from a negative $12 million gross profit in Q2 2025. Adjusted EBITDA was negative $14 million, an improvement from negative $25 million year-over-year. SG&A expense totaled $60 million, including $11 million in share-based compensation and $8 million in acquisition-related transaction and integration costs. R&D expense was $8 million, focused on product upgrades and new market expansion. Operating cash used in the quarter was $60 million, with total cash deployment of $84 million including capital expenditures. Capital expenditures totaled $24 million, primarily for the Near Space Network Services (NS&S) satellite constellation and ground segment upgrades. Ending cash balance for the quarter was $367 million. Total backlog exiting the quarter was a record $1.8 billion, split by customer segment: 37% civil space, 49% commercial space, and 14% national security space. Q2 2026 new bookings totaled $920 million, with year-to-date 2026 bookings of $1.7 billion.

Risks & headwinds

No specific material risks or operational failures were explicitly discussed during the call. The only standard forward-looking statement disclaimer noted that actual results could differ materially from expectations due to undisclosed factors referenced in the company's recent SEC filings, including launch timing variability, contract definitization delays, and development technical risks.

Analyst Q&A

• Q: Are the expected second half revenue upside from new contracts or from partial ATP awards already won? What is the timeline and structure for the upcoming CLPS task orders and the CLPS II (Eclipse 2.0) follow-on? /

  A: Revenue upside to the top end of the guidance range comes from both faster than expected procurement timing and earlier definitization of existing partial ATP awards, which would pull revenue into 2026 instead of deferring to 2027. For CLPS, two lunar lander task orders and one lunar orbiter surveyor task order are expected by early fall 2026. The 10-year multi-award Eclipse 2.0 CLPS II IDIQ contract, which is expected to be 4x larger than the original CLPS contract, will also be awarded this year, with the final CLPS 1.0 task order expected in early 2027.

• Q: With over 70 IM-300 satellites in simultaneous production, how does the commonality of the platform impact margins and production capacity? /

  A: The IM-300 has very high bus commonality, and all non-recurring engineering costs were already retired after delivery of the first 16 tranche 1 satellites, so this is now a true mass production run. The company has added 75,000 square feet of new production space in Houston and has over 1 million square feet of total space, leaving ample room to add additional orders to the existing production line without queue delays.

• Q: What are the remaining milestones for the IM-3 mission, and how confident is management in the Q1 2027 launch window? How is Intuitive Machines positioned for Lunar Terrain Vehicle (LTV) opportunities? /

  A: IM-3 is currently in functional testing, with upcoming engine hot fire testing, final integration of the precision landing sensor suite, and a Delta flight readiness review in October 2027, which is expected to give a green light for the January-March 2027 SpaceX Falcon 9 launch window. For LTVs, only a small portion of the total $4.5 billion 10-year contract has been awarded to date, and further task orders are slow to materialize because heavy cargo landers do not yet exist to fly larger LTVs. Intuitive Machines is developing a heavier cargo variant of its Nova-class lander to accommodate future LTV flights and is well positioned for upcoming task orders.

• Q: Why was the full Altus lunar communications constellation accelerated to 2028, and what is the annual revenue opportunity for the Near Space Network? /

  A: The original plan was to rideshare Altus satellites on CLPS lander missions, which would have delayed full operational capability until 2029-2030, too late to support the 2028 Artemis IV human lunar landing. NASA supported a switch to a dedicated single launch for all four remaining satellites to bring full capability online in 2028. The initial civil government requirement is for approximately 500,000 minutes of relay service per year, plus additional separate revenue from the always-on positioning, navigation, and timing broadcast service, with additional unquantified upside from commercial and national security customer demand.

• Q: What is the roadmap for the national security space business, and will Intuitive Machines move beyond bus subcontracting to end-to-end prime contracting? /

  A: Intuitive Machines expects to emerge as a prime contractor for national security programs, in addition to continuing its current subcontractor role for bus supply on the Golden Dome program. Upcoming prime opportunities include the lunar surveyor mission, where Intuitive Machines will deliver end-to-end data products including bus, sensors, communications downlink, and lunar terrain mapping analytics. The company will also pursue end-to-end integrated solutions for the Nebula OTV program and lunar data constellations, integrating payloads on its Altus satellites.