LUNR Q3 2026 earnings call transcript, November 12, 2026

Welcome to the Intuitive Machines third quarter 2026 earnings call. Chief Executive Officer Steve Altemus and Chief Financial Officer. Pete McGrath are leading the call today. 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 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 forward-looking statements in the company's earnings press release and the company's most recent 10-K and 10-Q filed with the SEC. We do not undertake any obligation to update forward-looking statements. We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in the applicable SEC rules and regulations. Reconciliations to the company's GAAP measures are included in the earnings release filed on Form 8K. Finally, we posted an earnings call presentation to our website, which provides additional context on our operational and financial performance. You can find this presentation on our investor relations page at www.intuitivemachines.com slash investors. Now I'll turn the call over to Steve Ultimis.

Center and the National Reconnaissance Office. Now, turning to our quarterly performance, during the third quarter, we definitized contracts for AMDT-3 and Hartford, both national security space missions based on the IM-300 satellite platform. We also definitized Eagle VisWare, an Earth observation mission under NASA's Earth Science Division. New Q3 awards that have not yet been definitized include the next phase of our orbital transfer vehicle for a national security customer, the Falcon Radar, a NASA science mission using our IM-300 platform, and transition of NASA's power and propulsion element contract to a NASA cost-plus contract for SR-1 Mars mission. Effective September 1st. Both Eagle VisWare and Falcon Radar, NASA science platforms, have applications beyond civil space markets, further reinforcing our diversified growth strategy. New bookings plus assumed black log from our Goonhilly and ComSat acquisition was over $450 million during quarter three, contributing to our record $1.9 billion. And backlog, demonstrating strong customer confidence and demand across multiple markets. While backlog provides a foundation for future revenue, the real measure of value is how effectively we convert contracted work into deliveries, revenue, and earnings. We are emphasizing production readiness, long lead material availability, and supplier preparedness, program schedules and capacity so that the

We are seeing a lot of people in the future. Transition from award to revenue becomes more predictable. We are also making deliberate capital investments and capabilities such as the Altus satellite constellation that can support longer duration infrastructure services. Our strategy integrates three capabilities, building spacecraft and infrastructure, connecting them through communications and navigation networks, works. and operating them throughout their mission lives. Our build capabilities deliver space vehicles to national security space, civil space, and commercial customers. Earlier this year, we secured significant awards for new lunar delivery missions, commercial geostationary communication satellites, and additional space development agency spacecraft. For the commercial sector and our IM-1300 series I agree. satellite offering, we delivered the Sirius XM-11 satellite to the customer. This geostationary satellite is fully operational in space now. Our commercial pipeline remains robust. In addition to the six commercial IM-1300 spacecraft in either early development or production, we see multiple new bids in the pipeline, positioning us for continued growth in the commercial sector. Our expanding work in national security space, specifically the Space Development Agency's tracking architecture, AMDT-3, Hartford, and Orbital Transfer Vehicle, provides evidence that we've matured as a company and have the ability to manage the development of complex systems with demanding requirements.

We believe strategic investments in production capacity, long-league materials, supplier readiness, and workforce capabilities will increase awards and shorten the interval from award to production and delivery. This aligns with emerging requirements we've seen from our customers. In-space compute applications remain early-stage opportunities. We are aligning investment with funded demand, technical maturity, and credible economics. Our experience may- manufacturing high-power commercial spacecraft, the IM-1300 platform, gives us a foundation in power generation and distribution, system integration, and thermal management. NASA's SR-1 program extends that experience into advanced power and propulsion architectures relevant to sustained civil and national security operations. The SR-1 effort is an opportunity to apply our high-powered spacecraft and the SR-1 effort is an opportunity to apply our high-powered spacecraft. manufacturing discipline to the integration challenges of power-intensive space systems. With over 25 satellites producing 20 kilowatts plus of power in orbit and our work to scale the SR-1 over 60 kilowatts, we believe we are well positioned at evaluating how these capabilities could also support high-power compute platforms in space. including edge computing and orbital data center concepts, where electrical power, thermal management, and reliable operations are fundamental design constraints.

Our lunar business remains a strategic differentiator and an important bridge from individual missions to enduring infrastructure. NASA's evolving plans for sustained activity on and around the moon, including its moon-based efforts, point toward . . . requirements that extend beyond individual payload deliveries. Under NASA's Commercial Lunar Payload Service's 10-year contract, IM secured six mission awards with two completed missions to date and several outstanding bids with pending awards, establishing a multi-mission production portfolio extending throughout the remainder of the decade. Future lunar activities will require . . . Heavier transportation, communications, navigation, mapping, power, and continuous mission support. As part of NASA's moon-based initiative, they have extended the Eclipse operation model, known as CLIPS-2, for the next 10 to 15 years at a total value of $10 to $15 billion. As an awardee, we're excited to participate in this next evolution of CLIPS-2 with expanding . . . limited tasking opportunities to meet NASA's needs at the moon, Mars, asteroids, and beyond. The broader scope of CLIPS-2 builds on our extensive leadership in space infrastructure and aligns with investments we're already making while helping to accelerate NASA's moon base and shape new opportunities for customers. On our existing lunar contracts, we continue to focus on executing milestones. In late October . . . .

We successfully fired our LOX methane engine on a fully integrated IM3 lander. We are on track to complete final end-to-end testing in the first quarter to support a planned launch in the March-April timeframe. The IM3 launch is also expected to deploy our first Altus Lunar Communications Relay Satellite, representing a significant step toward integrating our lunar transportation and communications infrastructure. In terms of launch, we have commercial Falcon 9 boosters purchased for our missions through 2028 and believe we have access to government purchase boosters through 2030. This provides continuity as we manage the transition and launch providers and work with alternative providers while they ramp up capabilities for our mission requirements beyond 2030.

Connecting and operating the near space network extends our participation from delivering assets to enabling communications and navigation services. To support our NS-NS contract, we are developing the ALTIS architecture for sislunar communications and navigation. We are accelerating ALTIS II through ALTIS V to deploy the remaining satellites together in 2028 aboard a NASA-provided Falcon 9 booster, recently confirmed by NASA's moon-based leadership. We are actively engaged with the Pentagon sislunar coordination office and responding to Space Force RFIs calling for space domain awareness, communications, positioning, navigation, and timing in ground communications out to sislunar space in alignment with our investment in NASA near space network. We have also expanded ground infrastructure and deep space communications capabilities, integrating ground stations, satellite communications expertise, flight dynamics, and navigation into a broader network architecture. We closed on the Gunnhilly Earth Station ComSat acquisition on August 3rd. Gunnhilly's strategic UK location will expand visibility across major earth viewing arcs, increasing contact opportunities for lunar and deep space missions. With deep expertise in antenna, planning, scheduling, and station maintenance, Gunnhilly's ground station assets and competencies strengthen our ability to deliver end-to-end mission support. Since the acquisition, Gunnhilly has demonstrated their ability to support space domain awareness between dishes at their Cornwall, England site.

We continue to expand our ground network with the recent addition of a new dish partner and completion of an upgrade to their 32-meter dish at Roaring Creek, Pennsylvania. This dish upgrade enables S, X, and KA band communications from Earth to the moon and beyond, increasing our uplink and downlink capabilities and expanding our capabilities in telemetry, acquisition, tracking, and command relay. We recently demonstrated performance of the ground station with NASA's Lunar Reconnaissance Orbiter and James Webb Space Telescope. We are leveraging the same modifications across existing and future partners to complete our ground network that will support MSNS. As our data relay constellation and ground capabilities are deployed and integrated, we see the potential for longer duration communications navigation. Data and mission operations services. Reliable connectivity will be foundational to sustained activity in syslunar space. Now, OPERATE. OPERATE extends customer relationships beyond spacecraft delivery into sustained mission support. We have completed the build out of our primary satellite constellation mission operations center at our headquarters located in Houston. We are in the process of integrating Gunhilly's mission operations center as well as building out a backup mission control center at our Maryland facility. With completion of our primary first mission operations center, we have begun training our satellite operators in advance of the ALTIS-1 launch. This operational capability creates opportunities for longer duration operational revenue. As more spacecraft and communications

we are going to be able to do that. Thank you. Networks and infrastructure systems are deployed. Customers will increasingly require dependable mission operations, flight dynamics, navigation, data management, and ongoing technical support. I'd like to take a moment to provide comments on the recent midterm election. Looking forward, federal budgets and policy direction may likely evolve. We've been building a diversified portfolio across civil, commercial, and national security space. Each market represents about one-third of our business today. We believe the convergence between civil and national security space associated with deploying and operating space infrastructure will continue and will offer additional opportunities that we are well positioned for. Creating a cislunar economy is also well aligned with current and future political economic development. We believe the United States returning to the moon has and will continue to have bipartisan support as we continue the space race with China. It's critical for the country to develop a sustainable lunar economy and lead the world in space exploration. Returning to the moon is clearly a strategic importance to the United States. Collectively, the industry must continue to produce capabilities that enable expansion. of the lunar economy. For our part, we plan to accomplish this through a steady cadence of missions, deploying critical infrastructure that supports robotic and human exploration. We will align capital and program commitments with funded customer priorities while pursuing opportunities for shared infrastructure and international cooperation where appropriate. As we look to turn the corner into 2020.

Our emphasis will be to continue to scale execution and accelerate growth. We expect to convert contracted backlog into revenue through repeatable production, operational excellence, and reliable customer delivery. We're not simply delivering missions. We are building, connecting, and operating the infrastructure needed for sustained activity in space and working to translate that strategy into measurable performance for our customers. Customers and shareholders. With that, I'll turn the call over to Pete McGrath for a more detailed review of our third quarter financial performance. Thank you.

Compared to $6 million of gross profit and 11% of gross margin in the prior year quarter.

The improvement reflects the increased contribution from our satellite production business, higher volume, and approximately $19 million related to net favorable one-time program adjustments, which also includes EAC and other cost adjustments in the quarter. Our focus remains on making that performance more consistent through dis- discipline program execution, greater production efficiency, and improved utilization of our manufacturing infrastructure. SG&A expense was $83 million in the quarter and included several non-recurring items. Share-based compensation, non-recurring legal expenses, and acquisition-related transaction integration costs totaled $30 million for the quarter, which are backed out of adjusted EBITDA. SG&A expense also included in- $9.5 million reserve related to the HughesNet bankruptcy, which was not backed out of adjusted EBITDA. We believe our current accrual sufficiently covers our receivables risk tied to their bankruptcy. In October, we concluded our transition services agreement with Vantor after successfully completing the transition of all systems and services following the Lenteris acquisition. Depreciation and amortization total- $13 million. Research and development expense was $7 million in a quarter, driven by investments in landing sensors, high-powered processing satellites, and larger cargo-class landers ahead of the CLIPS II task orders. We reported an operating loss of $34 million in a quarter, which included the SGA charges discussed above, as well as the contracted adjustments reflecting gross profit.

Adjusted EBITDA was positive $8 million, compared with negative $13 million in the prior year quarter, and negative $14 million in the second quarter. We ended the quarter with $464 million in cash, compared with $367 million at the end of Q2, resulting in a sequential cash balance increase of $97 million. This increase includes cash outflows of $18 million for acquisition of businesses, and $9 million for repayment of loans.

This aligns with the acquisition price of 37 million British pounds. Note that the remaining value was paid in stock. During the quarter, we received approximately $97 million of net proceeds from our at-the-market program. Cumulative gross proceeds through Q3 were approximately $337 million at a volume-weighted average. Price of $23.90 per share. Our liquidity supports current operations and planned infrastructure investments while preserving strategic flexibility. Operating activities generated $66 million of cash in the third quarter, a record for the company, compared with $60 million use of cash in the second quarter. The improvement reflected stronger collections, cash associated with new contract wins in Q2 and Q3, as well as... the absence of unfavorable working capital timing we discussed last quarter. Capital expenditures for $33 million in the quarter are driven primarily by the acceleration of our NSNS lunar constellation. As Steve mentioned, we are accelerating investment in the Altus constellation and associated ground infrastructure to support an Altus 2 through 5 launch in 2028 with a launch service provided by NASA. Our capital investments... to remain focused on capabilities that support near-term program execution and long-term infrastructure opportunities. These investments are intended to support the transition from individual mission deliveries toward longer duration communications, navigation, and operational services. We expect capital expenditures to remain elevated as we complete these infrastructure investments. We will continue to evaluate spending against customer requirements, development schedules, and...

expected economic returns. Free cash flow, defined as operating cash flow-less capital expenditures, was $33 million in the quarter, a company record. Our priorities are to improve cash generation for operations while maintaining the timing and schedule of our CapEx satellite and infrastructure investments. Turning to backlog. We ended the third quarter with $1.9 billion of contracted backlog. Reflecting continued demand across our commercial, civil, and national security markets. New bookings plus assumed backlog from Goonhilly totaled approximately $450 million. Bookings included 18 AMDT-3 in support of Golden Dome satellites for L3Harris, two IM300 satellites for Hartford, and NASA's Eagle-Vismur Earth Science spacecraft. Pending backlog also refers to the reflects the removal of the remaining PPE scope and the addition of the first phase of the cost plus SR-1 contract. We expect the full scope of SR-1 to be booked in the fourth quarter. Ending backlog was approximately 32% civil, 43% commercial, and 25% defense. Based on current program schedules, we expect approximately 13 to 15% of our September 30 backlog to convert into revenue during the fourth quarter of 2026, approximately 40 to 45% during 2027 and the remaining thereafter. As of November 5th, our total shares outstanding are $232 million, with 177 million shares of Class A and 55 million shares of Class C. Moving on to guidance. We are refining our full year 2026 revenue.

Outlook to a range of $920 to $950 million, reflecting the timing of certain anticipated contract modifications and awards. We are maintaining our guidance for positive adjusted EBITDA for the full year as we continue to focus on improving underlying operating performance as the business scales. As always, we will remain focused on program execution, cost discipline, and converting backlog into revenue and cash. We continue to invest in our long-term infrastructure strategy. Looking at 2027, our diversified backlog, expanded manufacturing portfolio, and communications infrastructure will provide a foundation for continued growth. Our expected backlog conversion profile provides visibility into a meaningful portion of next year's potential revenue. We expect to provide our 2027 financial outlook with our fourth quarter results. Our priorities next year are to increase production throughput, improve cost efficiency, and expand long duration services. Our long-term financial objective remains straightforward. Convert backlog into revenue, revenue into profitable earnings, and earnings into cash flow. With that operator, we are ready for questions. I would like to remind everyone in order to ask a question, press star, then the number.

with Craig Hellen. Please go ahead.

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