Ladies and gentlemen, thank you for standing by and welcome to the Intuitive Machines. Third quarter, 2024 conference call at this time, all participants are in a listen-only mode.
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Oh, no, I'd like to turn the conference over to Stephen Zhang, Head of investor relations. Please go ahead.
Good morning. Welcome to the intuitive machines. Third quarter, 2024 earnings call, Chief Executive Officer Steve Altius 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 nongaap 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 8-K.
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 dot intuitive machines dotcom slash investors.
Now I'll turn the call over to Stephen Altemus.
Thanks, Steven and welcome to everyone joining us this morning.
Two of the machines had a very strong third quarter highlighted by key awards revenue growth and we closed the quarter with record highs in both cash and backlog validating our upward trajectory Q3 revenue was 58.5 million over four times our Q3 sales last year, our cash balance at the end of Q3 reached 89.6 million. This strong cash position combined with zero debt provides ample liquidity as we continue our blueprint to commercialize the moon.
Our backlog also hit a company record at $316.2 million primarily driven by lunar surface delivery missions. And the first task order for the near space network services contract throughout the quarter. We continue to focus on our three core service pillars, delivery data transmission and infrastructure as services. These pillars provide foundational capabilities that enable the missions and goals of commercial and government exploration of the moon.
We made progress across all three pillars by first securing another South Pole lunar delivery mission then winning the near space network services contract and finally continuing to mature both our LTV lunar terrain vehicle design. In conjunction with our heavy cargo class lander, these strategic revenue streams bring our business thesis clearly into view, allowing us to focus on capturing more operational services which we believe will provide long tail revenues with higher margins as we look forward to executing on these strategic advances. We appointed Pete mcgrath as our Chief Financial Officer, previously, our Chief Operating Officer, Pete brings 35 years of aerospace and financial expertise to the team.
His unique experiences tightly align the company's financial strategy with the operational demands of executing large scale complex programs.
It's great to have you on the call. Pete thanks Steve now, moving on to data transmission services and the NSMS contract and in line with our growing momentum, we captured the nspace Network services contract in September which marked a transformative step for intuitive machines in data transmission for inspace communications and navigation.
As the sole awardee, the contract is valued up to $4.82 billion over the next decade. We intend to leverage our already contracted delivery missions to deploy a constellation of lunar data relay satellites around the moon.
This lunar constellation is central to our strategy to commercialize the moon supporting both commercial ventures and the Artemis campaign's goal of sustained human lunar presence.
This contract introduces a pay by the minute service model focused on scalable data transmission services.
This is significant in that we believe it boosts margin potential through its software. As a service like revenue model, we are able to incorporate communications satellite deliveries with each lunar lander mission at a marginal cost due to extra performance on the booster resulting in significant cost savings. As such, we intend to deploy the first of five lunar data relay satellites on our third contracted surface delivery mission. This deployment enables an initial operational capability that allows NASA to initiate pay by the minute services.
Two additional satellites are slated for delivery on our fourth surface delivery mission awarded in September followed by two final satellite deployments to complete the constellation for the lunar missions themselves. Our next surface delivery mission im two. We completed a propulsion system hot fire test on the vehicle representing the most complex integrated test of the lander. Thus far in preparation for a mission window in the first quarter from nasa's Kennedy Space Center.
The mission is designed to validate water hunting infrastructure such as a prospecting drill and essential mobility services like our micro Nova hopper which is designed to deploy off the lander and prospect by hopping across the lunar surface.
Our third delivery mission IM three is on a similar pace right now. The vehicle is undergoing integrated vibration testing and we anticipate a mission window through early 2026. With this launch opportunity, we will also deploy the first of five data relay satellites under the near space network services contract. As I mentioned, we intend to deliver the next two data relay satellites on our fourth service delivery mission. IM four NASA awarded intuitive machines that $116.9 million in September. And we expect additional commercial payloads to join that mission.
This South Pole mission includes six NASA payloads. In addition to a European Space Agency led drill suite to search for water ice.
During the third quarter, intuitive machines continued to mature the lunar terrain vehicle design culminating in delivery of our prototype vehicle to nasa's Johnson Space Center for Human in the loop testing where astronauts will evaluate crew interfaces and operations with the vehicle.
Prior to delivery of NASA intuitive machines was honored to host Apollo era moonwalkers, Charlie Duke and Harrison Schmidt to evaluate our design.
This was a unique opportunity for our mechanics to incorporate real life astronaut experience of driving the original Apollo rover into our design for the nasa's ltvs program.
This past Thursday, the LTV team unveiled our first fully electric crab walking motorized vehicle at nasa's official visitor center in Houston later this month, you will see our vehicle performing testing near Meteor Crater National Park in Arizona.
Since the LTV is large and heavy, roughly the size of a pickup truck, it requires a larger lander for delivery to the surface of the moon. Through a series of rigorous design reviews, we continue to mature our heavy cargo lander variant Nova D which will be capable of delivering the pickup truck size lunar terrain vehicle to the surface of the moon.
Recall the next phase of the LTB contract is still competitive as intuitive machines is one of three vendors vying for the delivery and demonstration mission which is expected to be awarded late next year.
It's important to note that the LTVS contract is more than just a mobility platform. It's a full service offering.
This includes the ability to deliver the vehicle to the lunar surface to communicate and autonomously operate the vehicle while on the surface of the moon. Over a 10 year period, the experience gained from past and near term surface delivery missions will enable intuitive machines as the only prime contractor in the LTVS bidding pool with validated experience delivering to transmitting data from and autonomously operating infrastructure on the surface of the moon.
Our strategic approach to create a lunar economy appears well aligned with current and future political priorities.
We believe the United States returning to the moon has and will continue to have bipartisan support as we enter the next generation space race with China.
It's critical for the country to develop a sustainable lunar economy and lead the world in space exploration.
Our government has made it clear that returning to the moon is of 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 gradually learning about how to live and work on the moon for NASA to successfully execute its artemis campaign in a globally competitive landscape.
We see the possible need for a reformulation driven by budgetary and scheduled realities. We believe NASA must continue to partner with commercial industries to drive an affordable incremental road map that enables steady visible progress.
The emphasis on low cost combined with precursor work to gain engineering insights for surface infrastructure are essential for a long term stay on the moon and a thriving lunar economy. This infrastructure and data first approach can then accommodate potential delays and budget shortfalls in developing the human systems while keeping them squarely in sight for the United States company finished the third quarter by taking an immediate tangible step towards playing a key role in future commercial and government lunar activities by establishing a foothold in lunar orbit before our first relay satellite is deployed, intuitive machines has assumed the contract, the team and the responsibility for operations and data analysis for nasa's Lunar reconnaissance orbiter and shadow cam. Cameras and imagery.
The lunar reconnaissance orbiter has been circling the moon since 2009 with the primary goal of making a 3d map of the moon's surface and is critical for analyzing and selecting all future lunar landing sites. Shadow Cam's objective is to provide information about the distribution and accessibility of water ice and other volatile on the surface with intuitive machines. Now participating in collection of lunar surface data, we've added an incredible team and technical capability in Phoenix Arizona prior to joining intuitive machines. This team supported our first mission including capturing imagery and documenting our actual landing location on the surface of the moon.
This team brings invaluable experience that we believe will accelerate in two, the machine's ability to field the first lunar data relay satellite constellation under the near space network services contract while providing immediate high resolution images of the moon for prospecting landing site selection and mobility mission planning for the entire industry.
With that, I'll turn the call over to tuor machines, Chief Financial Officer Pete mcgrath.
Pete McGrath
Thank you, Steve and thanks everybody for joining us today.
As Steve mentioned, we had another strong quarter financially with quarter three revenues of $58.5 million up 359% over the same quarter of the prior year and closed the quarter with record highs in both cash and backlog.
Q3 revenue was driven primarily by oams clips and LTVS execution 's revenue was 34.1 million in the quarter down about 5 million from Q2 as expected. Given the ramp down of Osam within Elms, we expect a continued ramp down here late in the fourth quarter and into the first quarter of next year.
We continue to work with NASA on opportunities for further work scope within the Elms contract for in space assembly and manufacturing technology development as well as space weather monitoring systems and applications.
We expect to see some revenue growth starting in the fourth quarter as a result of CP 22 and Ns and S awards in Q3, we paid off the outstanding 3 million balance on our credit mobilization loan resulting in zero debt on our balance sheet, zero debt coupled with our strong cash balance gives the confidence that we have ample liquidity to execute on our growth trajectory.
Gross profit was 4.1 million for the quarter versus a negative 13.8 million in the prior year. Demonstrating our continued focus on driving towards profitability operating loss for the quarter was negative 13.7 million versus negative 24.8 million. In the third quarter of 23 the lower operating loss in the quarter was again driven primarily by the gross profit in the quarter, partially off slaught by $5 million impairment of property and equipment.
SG and A for the quarter was 12.3 million versus 9.9 million in the prior year, the higher SG and A was due to increase in public company costs, employee compensation benefits and rent on our new corporate headquarters operating cash used was 17.9 million in the quarter with capital expenditures of 1.4 million resulting in free cash flow in the quarter with an outflow of 19.3 million.
Our cash balance significantly increased in Q3 to 89.6 million. The highest quarter ending balance in company history.
This was driven by 80.5 million of cash raised in the quarter through the at the market offering program.
Our ATM was completed and the committed equity facility from our IPO expired unused in the third quarter.
Two significant receivables were collected shortly after quarter end as such, our cash position increased at month end, October to 106.9 million with our cash balance at 106.9 million. Coupled with our strong visibility into the timing of receivables from contracted milestone payments. This gives us the confidence that we will end the year with a similar cash balance.
We ended the third quarter with contracted backlog of 316.2 million. A record for the company.
This includes our recent clips award of 116.9 million but does not yet include the full set of initial task orders for near space network services towing 150 million through the multiple task orders, we expect continued backlog growth as we receive new S and Ns MS task orders. While winning new business both domestically and internationally and with multiple us government customers overall, this was another strong quarter for intuitive machines. As we reach the end of the year, we are narrowing our full year revenue guidance range to 215 million to 235 million. And within that range, trending towards the midpoint as demonstrating the quarter, we continue to execute our current programs. While winning key awards.
I look forward to guiding the company through a new lens of co and focus on managing cost efficiently to drive towards profitability and achieve our financial targets. With that operator. We are now ready for questions.
Operator
As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced to withdraw your question. Please press star 11 again in the interest of time we ask that you please limit yourself to one question and one follow up. Please stand by while we compile the Q&A roster.
And our first question comes from Austin Moeller with Canaccord Genuity. Your line is open.
Austin Moeller
Hi, good morning, Steven Pete.
My first question here. Do you anticipate that that LTV could still go to multiple vendors even after NSNS was awarded sole source to you?
Stephen Altemus
Well, yes, I think we, we're having discussions with NASA currently about what the strategy might be and whether it will be a single award or multiple awards on LTV, that hasn't yet been determined, determined. But I think the door is open for discussions and they're receptive to that possibility. Austin.
Austin Moeller
And then what types of space force or other dod programs are you looking at bidding on ForEx? Go contract work?
Stephen Altemus
Yes, we have some opportunities that we've been talking with the dod community about and, and really those are in the areas of like orbital transfer stages, things like that versus surface operations. So we think there's an opportunity for us as we launch towards the moon for rideshare payloads that can, can go into other orbits in the sis lunar space.
Austin Moeller
Excellent. Thanks for all the.
Operator
Details.
Thank you. And our next question comes from Griffin Boss with B Riley Securities. Your line is open.
Griffin Boss
Hi, good morning. Thanks for taking my questions. So first for me, I I know we'll see a break out when the, when the, when the 10-Q comes out. But can you give some more color on program mix for revenue in the quarter? I know Oams was probably I would say 50% to 60% of the top line but any color on other program contributions and and, and to what degree, you know, LTV, that one, you know, the initial one year contract contributed to the third quarter results.
Stephen Altemus
Yes.
Yeah, Pete, why don't you take that one.
Pete McGrath
So the 34 was mostly attributed to owns. The other programs are really a mix of the Landers plus LTV LTV contract was only $30 million for the 1st year. So that's pretty level loaded over a 12 year, 12 month period. So that's only contributing about, you know, 2 million to 3 million a month.
I'm sorry. Yeah, I'm not sorry.
Griffin Boss
Oh, okay, great. 2 to 3 per month. Thanks. And then is there any expectations you could share for how NSNS could potentially ramp in the fourth quarter? And then maybe in 2025 I acknowledge it's a, it's an ID IQ. So perhaps you don't have visibility but, but maybe you have visibility into kind of initial task orders that you're, you're bidding on there and, and maybe any color on, on the degree of those or the or the magnitude of those task orders would be helpful.
Pete McGrath
Yes, I can give you more detail around the, the task order breakdown for the initial $150 million verification phase. The first task order is a six month period of performance, which is the one we're under today that's worth about $9 million that the second task order would follow that, which is also about six months in period of performance for 18 million.
And then that's followed by the third task order, which is 43.5 million, which has a that one actually is one where we complete on orbit verification of the first satellite and actually start operational task force, which is additional funding beyond the verification task order and allows us access to the four point 4,000,004 billion plus contract value.
That one's roughly about 6 to 12 months. And then the task order for is another one that's about a 12 month period of performance. And that's 61.5 million that gets us to where we've verified on a performance of the second two satellites. And then that opens up more additional task orders for operations.
And then the final one is another task order five for 12 months, which gets us to the final operational capability of the satellites. That value is about $18 million. And then that allows us to get to full operational capability and provides full access to the follow on operational task orders.
Griffin Boss
Excellent. That's great color. I really appreciate it and thanks for taking my questions.
Operator
Thanks Griffin.
Thank you.
And our next question comes from Edison yu with Deutsche Bank. Your line is open.
Edison yu
Hey, good morning, everyone and thanks for taking our questions. You know, first off, just kind of on the industry, you know, we obviously got a new administration coming in. I think there's this, there's this notion that it could be very positive for, for the space industry. Curious if you have any initial thoughts on on just that that sentiment.
Stephen Altemus
Yes. Well, you know, certainly, like I said, we had bipartisan support over the past five or six years, certainly in Insis Lunar space. And so we see a continuation of the United States focused strategically on the moon and returning humans to space, what we or to the moon. But we see that really the commercial space activities are here to stay and commercial space will be an integral component to opening up the system in our economy. You see that in the NSMS contract, you see that the commercial sector intuitive machines, in particular is now an integral partner with NASA for space, communications and navigation. And we expect that only to continue and actually be strengthened in this administration.
Edison yu
Understood. And then just a follow up, I was wondering if you could, you could dive maybe a little bit deeper into your competitive advantage on on LTV. You know, is it more the data, the rover, the lander, is it, is it all three?
Stephen Altemus
Like I said in the pre the remarks here was that, you know, the LTV is a service, it's a full service offering. It's not just the rover or a or a moon buggy, you have to deliver it to the surface, you have to operate it on the surface autonomously, which means you need communications and navigation abilities to bring the data down and control it on the surface. And so the three things that we set the company up for which is delivery, data transmission services and infrastructure as a service. We provide all three uniquely and that really sets us up for this LTV service provide to provide to NASA other unlike any other of the competition. So I feel we're in a strong place strategically and we'll see how NASA reacts when they come out and compete it next year. And we expect that to be competed in the latter half of the year and awarded late 2025.
Edison yu
Thank you very much.
Operator
Thank you. And our next question comes from Andre Shepard with Cantor Fitzgerald. Your line is open.
Andre Shepard
Hey, everyone. Good Morning.
Stephen Altemus
Morning, Andres.
Andre Shepard
Great to hear from you guys. Congratulations on another strong quarter. Good revenue beat and, and great liquidity position there. You know, a lot of our questions I think have been asked but maybe Steve just wondering, you know, as we look into the IM two mission launch window for January and then a decision on the LTV contract late next year. What are some things that investors, you know, that, that you think investors should be aware of as you get closer and closer to those timelines, you know, any particular milestones or, or catalysts for both those two that you know, we should be paying close attention to. Thank you.
Stephen Altemus
Yeah, thanks for that question. I think, you know, I mentioned for mission two, I am too, which is our, you know, essentially our prospecting mission, very complicated mission to deploy a drill, a hopper, a rover that is on target to meet a February launch window, which is, you know, amazing that the team pulled together to get that thing, the lander put together. So that's on track and you'll see us flying that mission in the first quarter. As I said, what's also interesting on the heels of that success, we also have a, essentially a design review with NASA on the Novod our heavy cargo lander that comes up in March and that those two things, the delivery to the South Pole for a prospecting mission in February and a design review for the heavy cargo variant in March. Really tease us up for entering into the down select for the delivery demonstration mission of LTV. We expect that contract to start the proposal activities that start in May and be awarded by the end of the year. And so those are the things I'll be looking towards and putting energy into to ensure success.
Andre Shepard
Wonderful, super helpful. I appreciate that color Steve and maybe just a quick follow up if I May. So you ended the quarter with about 90 million in liquidity, which I believe again is the highest on record. Just curious how are you thinking about that kind of cash runway cash burn or, or you know, expectations for liquidity over the next 12 months? Thank you.
Stephen Altemus
Yeah, we're clearly in a in a strong liquidity position, cash position for the next year. At least we're going to look opportunistically at adding capital to the balance sheet. Should we have the opportunity to do that?
You know, we have these major contract awards in NSSS and potentially LTV, that we might want to take some capital on to work project financing. But right now, we're in a secure position, at least through the end of the next year.
Andre Shepard
Wonderful. Thank you so much again for taking our questions. Congratulations on the quarter and looking forward to the next mission in in in Q1. Thank you so much. I'll pass it on.
Operator
Thanks, Andrew.
Thank you. And our next question comes from Josh Sullivan with Benchmark company. Your line is open.
Stephen Altemus
Hey, good morning morning, Josh.
Josh Sullivan
In your remarks, you mentioned how the commercial model and intuitive capabilities can keep the goal of the lunar development squarely in sight.
What's the tempo of that conversation right now? Just given the broader kind of questions around resources necessary for pardon me?
Stephen Altemus
Well, I think you know that the shift is if you look at the way the Artemis program is currently laid out, you know, with trying to get humans to the surface. And that was the urgency I think that we've learned at least from our first mission that flying a regular cadence of missions is is packed with opportunities to learn and develop and engineer the systems that are needed for a longterm stay on the surface. And so a regular cadence of missions to engineer the systems that are going to be required to support the astronauts is as crucial as the astronauts actually arriving. And so if we, my theory is to redistribute the activities in the Artemis program to make sure that the infrastructure arrives and is delivered that will support sustained human presence. And, and that's really the infrastructure first comment I made in my remarks. And so that's what we'll be talking about, you know, with this idea of flying to the moon, flying to the South pole, drilling on the south pole, all of those kinds of things are things that we're doing as a first and I think we need to get good at that and build the reliable systems and that's done by doing it over and over and over again. And so I think there's an opportunity to keep the moon in squarely in the, in the sights of the United States by this regular cadence submissions. And when the complex systems that are required for humans to be on the moon are ready and safe will be prepared for those. And that's kind of the comment. I'm I'm trying to pull up.
Josh Sullivan
Alright, thank you for that.
And then, and then just on the, you mentioned the assumption of the lunar reconnaissance and shadow c, what, what is the financial commitment side of that? Look, like for intuitive and then, you know, do you gain any proprietary data from, from taking those over?
Stephen Altemus
Well, that's really open-source data for the public, for scientists for NASA to use as they need to. And so it's open for folks NASA pays the contract. It's about $9 million for managing that. But what's critical is that gives us a capability and an infrastructure we can build on here on earth for data warehousing the big database that can be searched, the tools to search that those petabytes of data that are, that are collected around the moon and to provide some advanced analytics, machine learning and A I kind of analytics that will give us greater insight into what resources are up there on the moon. When we do think about putting our own surveyor up around the moon, we'll now have the infrastructure in place on earth and that repository to host that data.
Josh Sullivan
Great. Thank you for the time.
Operator
Great, Josh.
Thank you.
Our next question comes from Suji DeSilva with Roth capital. Your line is open.
Suji DeSilva
Hi, good morning. Congrats on the progress here. The the, yeah, the NSM contract, Steve, looking ahead to that, you know, what are the first infrastructure deployment steps we should think about happening and what will be the time frame for those.
Stephen Zhang
So the first piece of infrastructure for the NSMS contract will be deployed on mission three in late 25 early 26. That's on, that's when we're scheduling that that satellite, that satellite once it's on orbit and it's checked out communicating with the surface asset or with the LRO for example, we'll be able to start the operational service kind of revenue stream. That, that's the first thing to look forward to.
Suji DeSilva
Okay, great. And then similar question for the, the ro ro we anticipating, you know, kind of success there for you. What would be the, the the first kind of milestones to watch for once the program gets underway? Is that really just the same thing, preparing equipment for a launch or any milestones prior to that?
Stephen Zhang
So the the you're if you're talking about the next phase of LTV, so the first phase complete the design through a preliminary design review level and that includes not only the, the rover but also the landing system, you have to provide a mature land landing system solution as part of that effort. And that's what Steve was referring to earlier about a Nova DPDR for the next phase of the contract. We would mature the design initially through a CD R which NASA could decide to actually do two contracts through CD R. That's one option they can decide to take and then down select at that time. But the next phase will take it through a CD R and then it will take it through design development and qualification of the the rover before you fly it, then flying it to the surface of the moon and then you need to do a full surface check out pro validation of performance on the surface.
And then in parallel NASA award contracts for operational missions on the surface of the man.
Suji DeSilva
Okay, thanks.
Stephen Zhang
Thanks, Suji.
Operator
Thank you. This concludes our question and answer session. I would now like to turn the call back to intuitive machines, CEO Steve Almo for any closing remarks.
Steve Almo
Well, thanks everyone for dialing in this morning to the call. As you heard, we had an excellent quarter and please look forward to and join us on our next mission in the coming months to the moon South Pole. Thank you very much.
Operator
This concludes today's conference call.
Thank you for participating. You may now disconnect.
