Intuitive Machines, Inc. Q1 FY2025 earnings call

Federal Landscape and Opportunities

• The federal government's rethinking of acquiring emerging technology and services provides opportunities for Intuitive Machines, with alignment at the federal level including key appointments and budgetary direction. The President's budget request reinforces NASA's funding priorities, and the House Armed Services Committee advanced a $150 billion reconciliation package supporting DoD initiatives.

Program Progress

• CLPS initiative and LTVS program are progressing with three delivery procurements planned in 2025. Intuitive Machines was invited to testify before the House Space Aeronautics subcommittee on NASA's CLPS initiative.
• IM-2 mission faced issues like laser altimeter interference, terrain and lighting effects, and crater recognition tuning. Changes are being made for IM-3, including adding dissimilar and redundant altimeters, incorporating additional lighting independent sensors, expanding onboard terrain crater database, and using flight data to improve algorithms.
• Infrastructure programs are maturing, with NASA awarding a $2.5 million contract to define Moon to Mars architecture and the Lunar Terrain Vehicle Services contract making progress, including completing preliminary design review and integrating scanning LiDAR system.

Technology and Contracts

• Advancement in stealth satellite, orbital transfer vehicle, and earth reentry vehicle programs. Secured a $10 million contract from the Texas Space Commission for a precision Earth reentry vehicle and microgravity research laboratory. Completed a key customer verification milestone under NASA's NSNS contract, recognizing $3 million in revenue, and issued an additional $18 million task order for near space network services milestones.

In the first quarter of 2025, Intuitive Machines reported Q1 revenue of $62.5 million, which was 14% higher than Q4 2024. Gross profit was $6.7 million compared to $0.7 million in Q4 2024. SG&A for the quarter was $16.1 million. Operating loss was $10.1 million. Adjusted EBITDA was negative $6.6 million, an improvement from Q4 2024. Operating cash generated was $19.4 million with capital expenditures of $6.1 million, resulting in positive free cash flow of $13.3 million. Cash balance increased to $373.3 million in Q1. Contracted backlog was $272.3 million at the end of the quarter.

Intuitive Machines expects a revenue range of $250 million to $300 million for 2025. The company aims for positive run rate adjusted EBITDA by Q4 2025 and positive adjusted EBITDA for 2026. The recent awards including Task order 2 for NSNS, a grant from TSC, and a letter contract on an orbital transfer vehicle will be included in the second quarter backlog.

• Potential impacts from reductions in NASA's science budget on CLPS program. - Risks associated with changes to the SLS program and its impact on LTV delivery. - Competitive environment in the near space network landscape with potential entry of global competitors.

Q: Do reductions to the planetary science budget or earth science budget impact the revenue opportunity from NASA payload deployment awards?

A: Steve Altemus stated there is no direct impact into the CLPS budget based on the President's budget, with two procurements expected in the second half of 2025.

Q: Is there any risk of the LTV delivery on a Nova-D lander for Artemis 3 or beyond being changed or delayed due to the need to procure an alternative launch vehicle?

A: Steve Altemus noted the LTVS procurement is moving forward as their proposals are due in late July with an award in November, and the Nova-D heavy cargo lander flies on a Falcon 9 heavy, not requiring SLS.

Q: How does one differentiate in the reentry vehicle category?

A: Steve Altemus mentioned their Zep program is a guided precision reentry vehicle with a unique aero shape and soft touchdown capability, differentiating it from ballistic capsules.

Q: What's the outlook for free cash flow for the rest of the year?

A: Steve Altemus said free cash flow will still be lumpy over the year but is a positive trend moving forward.

Q: How does a continuing resolution for fiscal 2026 affect Intuitive Machines?

A: Steve Altemus stated they are fairly unaffected as there are no real new program starts, but they are watching the reconciliation bill's effect on DoD budgets.

Q: How do changes for future IM missions affect cost profile and competitiveness?

A: Steve Altemus said there is a slight cost increase for additional sensors but the program is healthy and they continue to execute missions regularly.

Q: What's the global competitive environment for NSN and how does it affect opportunities?

A: Steve Altemus said the international work in NSN is collaborative with European companies on standards and interoperability, with room for all to succeed.