Intuitive Machines, Inc. (LUNR) Q3 2026 Earnings Call Transcript

Operator: Thank you for standing by. At this time, I would like to welcome everyone to Intuitive Machines Third Quarter 2026 Earnings Webcast. [Operator Instructions] I would now like to turn the call over to Stephen Zhang.

Stephen Zhang: Good morning. 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 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.intuomachines.com/investors. Now I'll turn the call over to Steve Altemus.

Stephen Altemus: Good morning. Thank you for joining us. In the third quarter, we delivered record financial performance across the board with $269 million in revenue, representing 31% growth since last quarter, over $8 million in positive adjusted EBITDA, positive $33 million of free cash flow and $1.9 billion ending backlog spanning Civil, Commercial and National Security customers. These results are an important proof point in our transformation from a company that advanced the state of lunar exploration into a next-generation space prime, developing and integrating the technology, infrastructure and services that enable customers to achieve their differentiated missions across space. Recent strategic acquisitions have added scaled satellite production. We have also expanded our mission operations, navigation, constellation management, communications and ground segment capabilities, strengthening our integrated build, connect and operate strategy. We are executing our vision as a global space infrastructure leader, a national asset that enables enduring Commercial, Civil and National Security solutions across every orbit and surface. To further support our vision, we are excited to welcome Dr. Chris Scolese to our Board of Directors, further strengthening our Board with his extensive leadership and expertise across Civil and National Security space, including leadership roles as Director of both Goddard Space Flight Center and the National Reconnaissance Office. Now turning to our quarterly performance. During the third quarter, we definitized contracts for AMDT3 and Hartford, both National Security space missions based on the IM 300 satellite platform. We also definitized EAGLE-VSWIR, 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-VSWIR and FALCON-RADAR NASA science platforms have applications beyond civil space markets, further reinforcing our diversified growth strategy. New bookings plus assumed backlog from our Goonhilly and COMSAT acquisition was over $450 million during quarter 3, contributing to our record $1.9 billion in 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 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 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 satellite offering, we delivered the SiriusXM 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, AMDT3, Hartford and Orbital Transfer Vehicle provides evidence that we 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 lead 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 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 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 and 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 Services 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 Moon Base initiative, they have extended the CLPS operation model, known as CLPS 2, for the next 10 to 15 years at a total value of $10 billion to $15 billion. As an awardee, we're excited to participate in this next evolution of CLPS 2, with expanded tasking opportunities to meet NASA's needs at the Moon, Mars, asteroids, and beyond. The broader scope of CLPS 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 IM-3 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 time frame. The IM-3 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 purchased 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 NSNS contract, we are developing the Altus architecture for cislunar Communications and navigation. We are accelerating Altus 2 through Altus 5 to deploy the remaining satellites together in 2028 aboard a NASA -provided Falcon 9 booster, recently confirmed by NASA's Moon Base leadership. We are actively engaged with the Pentagon Cislunar Coordination Office and responding to Space Force RFIs calling for space domain awareness, communications, positioning, navigation and timing and ground communications out to cislunar 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 Goonhilly Earth Station COMSAT acquisition on August 3. Goonhilly's strategic U.K. 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, Goonhilly's ground station assets and competencies strengthen our ability to deliver end-to-end mission support. Since the acquisition, Goonhilly 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 Web Space Telescope. We are leveraging the same modifications across existing and future partners to complete our ground network that will support NSNS. 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 Cislunar 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 Goonhilly'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 Altus 1 launch. This operational capability creates opportunities for longer duration operational revenue. As more spacecraft and communication 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 1/3 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 priorities. 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 2027, 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 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.

Peter McGrath: Thank you, Steve, and good morning, everyone. As Steve discussed, Intuitive Machines continues to make meaningful progress in scaling our business across Commercial, Civil and National Security markets. Our third quarter results demonstrate that progress with revenue increasing 31% over last quarter, continued improvement in gross profit and positive adjusted EBITDA. Our focus remains on translating this growth into more predictable operating performance, improved profitability and ultimately stronger cash generation. Let me walk through our third quarter results. Third quarter revenue was $269 million, bringing year-to-date revenue to $662 million. Our growth is reflected in execution across Satellite Production, Lunar delivery, Lunar Data Services and Ground Communication Networks, which includes revenue from contracts awarded late in the second quarter and during the third quarter. Recall, last quarter, we made investments in production readiness, long-lead materials and manufacturing capacity. These investments position us to respond more quickly and deliver our customers' timeliness, which enabled new program awards in Q2 and Q3. We started recognizing the revenue associated with these contracts in the third quarter. Year-to-date, revenue was approximately 39% Civil, 34% Commercial and 27% Defense, reflecting the diversification of our customer base. Gross profit increased significantly to $69 million in the quarter, representing a gross margin of 26% 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 onetime program adjustments, which also includes EAC and other cost adjustments in the quarter. Our focus remains on making that performance more consistent through disciplined 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 and integration costs totaled $30 million for the quarter, which are backed out of adjusted EBITDA. SG&A expense also included a $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 Lanteris acquisition. Depreciation and amortization totaled $13 million. Research and development expense was $7 million in the quarter, driven by investments in landing sensors, high-powered processing satellites and larger cargo class landers ahead of the CLPS 2 task orders. We reported an operating loss of $34 million in the quarter, which included the SG&A charges discussed above as well as the contracted adjustments reflected in 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 associated with our Goonhilly COMSAT acquisition, totaling $27 million for the cash portion of the acquisition. This aligns with the acquisition price of GBP 37 million. Note that the remaining value is 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 were $33 million in the quarter, 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 five launch in 2028, with a launch service provided by NASA. Our capital investments 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 from 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 AMDT3 in support of Golden Dome satellites for Lanteris, two IM 300 satellites for Hartford, and NASA's EAGLE-VSWIR Earth Science spacecraft. Ending backlog also 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 5, 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 million 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 while continuing 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.

Operator: [Operator Instructions] And your first question comes from the line of John Siegmann with Stifel.

Jonathan Siegmann: A lot of good news in the quarter. as we start thinking about '27, the backlog gives some great visibility, as you mentioned, 40% to 45% that you referenced is at least $750 million in '27 already sitting there. So that's, by our numbers, 35% more dollars compared to where you were post-Lanteris last year. I know your guidance will be later, but just the framing of that, does that make sense? And then when you think about your balanced 3 end markets, how would you force rank their growth contributors potentially in '27?

Peter McGrath: Yes. I would say it does make sense in terms of the amount of backlog that we see pushing forward into '27. We believe we're in that range that was provided. I think you were looking at more of the lower midpoint of that range. But we've seen significant growth on the Lanteris side. They've done exceptionally well with all the captures that we've been working with them. As a note, we've also pursued new things that neither party was going to pursue that we see as opportunities moving into awards next year as well. So it does align well, and I do see them continuing to look well. Again, we'll provide the guidance when we get to the fourth quarter earnings.

Jonathan Siegmann: And then flip on just on cash because that was fantastic. Just can you call out any advances or milestone timing that might have kind of boosted Q3? And just what level of CapEx should we be thinking about for '27 just as we project forward?

Peter McGrath: Sure. And we did have some turn on with some of the contract awards. We get some early cash payments that funds -- and we did some investment, as we mentioned, in inventory. So that helped cover some of those expenses we already have, which I think is why you saw the cash flow up in the second quarter. So it's a little bit of the timing of the working capital, I think, what we talked about. But we did also see improvement, I think, across the board. With regards to CapEx, I think we're at or a little bit higher as we move into the fourth quarter and the first quarter next year as we complete out the Altus 2 through five satellites. We're procuring a lot of that hardware right now. So that's going to roll through the system as we prep for launch in '28.

Operator: Your next question comes from the line of Andres Sheppard with Cantor Fitzgerald.

Unknown Analyst: This is Peter on for Andres. Congrats on the quarter. Congratulations on being awarded as part of the CLPS 2 contract. So maybe to start off, are you able to share a bit more granularity about this opportunity? What's the time line for these missions and how you view Lunar positioned to capitalize on them?

Stephen Altemus: Yes. Thanks. Appreciate your question. CLPS 2.0 is a critical part of NASA's moon base program or initiative. It's currently set as an IDIQ, which is indefinite delivery, indefinite quantity with eight vendors that were chosen to participate over a 10-year period with an option for five additional years at $10 billion for the first base period and $5 billion for the balance of the option period. So primarily, what you look for is an increase in transportation orbiters and orbiters around the moon. And specifically in terms of transportation, they're looking for heavier cargo landers to deliver much more mass to the surface of the moon as well as much more complex payloads, many more complex payloads, higher fidelity payloads that can give us the science and the infrastructure necessary to put humans on the moon in the future. So that's kind of the focus of it, and we're looking forward to the next 10 years of establishing the lunar economy with this contract.

Peter McGrath: Just something to add is we have two soon to be three proposals in on CLPS I still that are submitted that we may see one more under CLPS I, and then they'll transition to the CLPS 2 proceeds for RFTPs after that.

Unknown Analyst: Great. And maybe as a follow-up, looking ahead to IM-3, can you remind us maybe some of the milestones that are left ahead of launch? And how is this lander separate from the previous ones?

Stephen Altemus: We have a consistent production line for the Nova-C lander. IM-3, Mission 3, is a Nova-C. It takes about 130 kilograms of payload to the surface of the Moon. It is a liquid oxygen, liquid methane lander, like our previous others. We've been through the hot fire with the integrated vehicle where we fired the engine on the vehicle and checked out the propulsion system in avionics. We'll now do the end-to-end functional testing into the new year, finish our landing sensor flight test on an aircraft and be ready to launch towards the end of the first quarter, maybe April of 2027.

Operator: Your next question comes from the line of Edison Yu with Deutsche Bank.

Unknown Analyst: First, I wanted to ask about the, call it, midterm, long-term launch situation. I mean you come at it from both ways, right, both on the Lunar side and also on the satellite side. Do you worry at all about securing launch capacity, call it, after 2029? Or do you have pretty good confidence that Starship will be available?

Stephen Altemus: So the launch capacity story is not yet complete in terms of -- fully written in terms of when we're going to see retirement of the Falcon 9 and when the new entrants will have their launch capability ready. We are confident, though, that we have purchased boosters through 2028. And we have recently government has stepped up to use the VADR contract in NASA to purchase boosters from the government and supply those for some of the tasks that we have planned in '28 through '30. So that's an important stop gap while the new entrants bring their capability online and we transition to the other variant boosters that are out there that have the capability to throw to translunar injection, as well as for our LEO constellation and our GEO satellites. We're watching it closely. We have a plan, and we're moving forward. And so far, we have things covered, and we'll watch how things develop.

Unknown Analyst: Understood. And a follow-up, another long term, probably even longer-term question. I think in the past, you talked about orbital data centers, and I think you mentioned in the prepared remarks some things as well. We've seen some movement in supply chain for another company. And so I'm curious how your discussions with customers on whether it's orbital compute, edge compute, how those discussions coming along? And could we expect something more material perhaps next year?

Stephen Altemus: We've been looking at high-power satellites and how you manage high-powered satellites thermally on orbit for the application of edge compute and orbit data centers all year long. We've been looking at that. And we're currently in a design study to look at how we can increase production to produce larger quantities of satellites, production satellites for orbital data centers. So we're working along those lines. As soon as the demand picks up, we'll be in a good position to leverage our high-power satellite skills and capabilities to support that emerging market.

Operator: Your next question comes from Griffin Boss with B. Riley Securities.

Griffin Boss: So I just want to jump back first to CLPS 2.0. Has your view changed at all on when you expect task orders to flow through? I think in quarters past, you discussed the expectation for early 2027. Pete, I don't know if you just said that you expect those task orders to flow through after these next CLPS 1.0 task orders come in or not. But if you could just give some clarity on any change in your expectation, that would be helpful.

Stephen Altemus: Yes. No change in the expectation. We have three bids on CLPS 1 that have been submitted already that will wait for award. That will close out CLPS 1, and then we expect CLPS 2 to pick up in 2027. And you'll see, like I said, larger cargo landers as part of that, maybe block buys of several missions at a time and also orbiters and transfer vehicles will also be part of CLPS 2.0. So we see that on-ramping with the uptick in Moon Base in 2027.

Griffin Boss: Okay. Great. Appreciate that. And then just a follow-up. I wanted to talk about a couple of opportunities that I don't believe you mentioned today, you talked about in the past. specifically the Andromeda, RG-XX, IDIQ, and then NASA's TDRS opportunity. Do you have any updates on where those stand? Have we started seeing task orders flow through for RG-XX, and any updated color on where TDRS stands? That would be great.

Stephen Altemus: Yes. The RG-XX proposals were due and have been submitted, I believe, last week. So we'll wait to see when those awards will be made. It's with the government's hand now. With respect to TDRS, only the first part of TDRS was put out for bid, and that's the Ku-band portion recovery. That was the most dire need for upgrades in TDRS. We do expect here in the near future the S-band portion of TDRS, Tracking and Data Relay Satellite, to come out for bid, and we'll participate in that also.

Operator: [Operator Instructions] Your next question comes from the line of Suji Desilva with ROTH Capital.

Sujeeva De Silva: Congratulations on all the progress here. You talked about the Altus two to five lunar satellites. And can you say was the timing of those being pulled in? Is it still one per lunar mission? Or are they going to be multiple? And is there a reason for any acceleration of that what's happening?

Stephen Altemus: Communications navigation, PNT, all the data relay work is critical infrastructure for the future of opening up the lunar economy and the faster we get that infrastructure up and around the moon, the more capable the systems will be to deliver additional payloads and infrastructure and crude to the moon. So we are going to put Altus 1 up on Mission Three is our plan, which is the March, April time frame. And then we have been selected for a booster by NASA's VADR contract to put all four birds in 2028, the balance Altus 2 through five on a SpaceX Falcon 9 and fly that out to the moon. So we'll have all five satellites up in the 2028 time frame.

Sujeeva De Silva: Okay. That's great. And then for the lunar missions for CLPS 2, can you talk about if those intercept, they will imagine intercept your larger landers, I guess, previously called Nova-D. And maybe what would be the size of the contracts on average CLPS 2 versus CLPS 1? Just to get a sense of how big -- how much those scale up?

Stephen Altemus: Yes. I would expect with the larger cargo landers, they're looking for landers eventually in the two to five metric ton payload delivery. We're delivering today 130 kilograms of payloads to the surface, and those are running about $150 million per task order. So when you increase the size to two to five metric tons, you can expect a significant uptick in the price of those landers. I don't really have an estimate on the size of the task orders yet. We'll have to wait and see how they're structured and how we can respond to those. But I expect with the larger landers, Nova-D and Nova-M, we will put heavier cargo up and those will be at an increased price.

Operator: Your next question comes from the line of Ronald Epstein with Bank of America.

Unknown Analyst: This is Andrew on for Ron. I guess a bigger picture one on CLPS 2. So with NASA having expanded scope, particularly covering the procurement of launch rideshares, does that mean there could be dedicated missions for CLPS 2 vendors procured by NASA? Or is launch access protected in a way for vendors given the risks of tightening capacity and rising costs in the launch ecosystem?

Stephen Altemus: Yes, there's definitely a possibility of that. The way that CLPS 2 is structured, they can buy a Commercial service where like CLPS 1, the vendor or Intuitive Machines would provide the entire end-to-end service to bring scientific payloads to the moon and return data back to the NASA or the customer. And CLPS 2.0, we can have that model. But in the land and use that for their own purposes and aggregate their own payloads and provide a booster and fly it. So they might want to fly a lander on their own. That's another option. And then there's a hybrid where they say, "Hey, you do the lander and deliver it, we'll supply the booster for the VADR contract and give you access to that. Their intention is to provide a number of transportation opportunities to the surface of the moon and then they'll decide which payloads are ready, when they're going to fly and which ones will go on which lander at what time. And they're really trying to make an increased cadence traffic model where they have many more payloads available to fly to the moon, and they can pick and choose based on those payload availabilities.

Unknown Analyst: Got you. I appreciate that color. And I guess just a follow-up here. And I know you touched on it earlier, but obviously, the contract covers 10 years, but -- and task orders are expected to start coming in, in 2027. But is there any sort of urgency to, I guess, move quickly at NASA, you think, given Falcon 9 slowing down?

Stephen Altemus: Well, I think independent of SpaceX's situation with their potential retirement of Falcon 9, NASA has, under Jared Isaacman, created a sense of urgency in terms of opening up the lunar economy and getting many shots on goal or a higher cadence of missions Under CLPS 1, for example, there have been let 22 mission task orders on CLPS 1. Half of those have come since March of this year. So there has been an uptick, and we expect that uptick in pace and cadence and that urgency to continue, if not even accelerate through '27, '28 and '29, et cetera.

Operator: Your next question comes from the line of Austin Moeller with Canaccord Genuity.

Austin Moeller: So just my first question here. So yesterday on the Senate floor, Senator John Kennedy was talking about a $200 billion reconciliation package. Is there specific funding that you expect to see in there for Golden Dome or military space that is important for AMDT3 or other programs you're involved on?

Stephen Altemus: I'm not sure yet, Austin, what that reconciliation request or call for would include. From the size of it, it appears that, that Golden Dome would be included -- right now, we think the track layer and the AMDT3 layer that we are developing is solid and potted independent of any reconciliation funding upper to defense for Golden Dome. Those Tranche 3 and AMDT3 are moving forward in earnest, and we are developing satellites for it now under funding with Lanteris. The future of Golden Dome, I am not sure. I'm not certain what the midterm election will do to that process and whether it will slow that activity down or speed it up.

Austin Moeller: Okay. And once you deploy the first Altus satellite in April, what do you expect your ballpark for the commissioning time looking like before that satellite can start to generate revenue with NASA and other customers?

Stephen Altemus: Yes. We expect that -- and we've been talking about operational service task orders already for the constellation and trying to get those potted in their contract. But we think the commissioning phase is 60 to 90 days post launch to get the satellite in position, checked out and ready for operations.

Operator: Your next question comes from Michael Leshock with KeyBanc Capital Markets.

Michael Leshock: On NSNS, with Altus One going up in a few months, should we expect meaningful operational revenue in 2027 with only one satellite? Or does that not come until the other four are launched? And then secondly, you've talked about a pay-by-the-minute kind of structure for that service over time. Is there any way to frame what the long-term annual revenue is for that service once it's fully online?

Stephen Altemus: Your first part of the question, Altus 1, we are planning and in discussions for operational service revenue from that satellite. There's pay by-the-minute opportunities for data relay. There's broadcast services for PNT -- and then there's other payloads that we have are flying on that satellite that will generate their own operational service revenue. All that has not yet been quantified at the magnitude of that. But then when you put the other four satellites up in a constellation, you can expect a stepwise increase in operational service revenue as the PNT broadcast service becomes completed and you have much more availability on the constellation with much more alternative payload swap, we call it, size, weight and power and providing that service revenue also. So we do see a step-up as the satellite constellation gets more capable.

Michael Leshock: Great. And then just taking a step back on the supply chain, what are you seeing as like the biggest bottlenecks across the supply chain today? And any way to frame what parts of the business are more acutely impacted by that?

Stephen Altemus: We have a robust supply chain, especially with the acquisition of Lanteris. They've got a very sophisticated supply chain that's globally connected. We do see that there is a challenge in space-based radios. Those are very long lead items, also the landing sensors. There's some -- they're long lead items. And so we watch that very carefully. We prepurchase inventory in a lot of cases to make sure that, that inventory -- that those things that are long lead like radios and sensors can meet the schedule that the customer is looking for. And so in some cases, we'll make an investment in inventory to make sure we can deliver the satellite in the time frame they're looking for.

Operator: Your next question comes from the line of Marni Lysaght with Macquarie Group.

Marni Lysaght: I just kind of appreciate where you've called out some nuances driving the free cash flow result in the quarter regarding working capital and timing. Maybe just to kind of zone in on some of the other, I guess, drivers of that, you can like other quantification of that in the cash flow in the balance sheet. So the step-up in payables and how we think about that moving forward?

Peter McGrath: Sure. So I think the significant movers in the cash flow statement this time, you're going to see the purchase of Goonhilly roll through in the quarter between the cash payment. And by the way, I think we say in the statement, there's a cash payment and a debt payoff. -- as part of the acquisition, the -- basically, the payment of cash covered also a debt payment back to the major shareholder, and that's why you saw that referenced that way. But that total value of the Goonhilly payment came out of cash this quarter. The CapEx, I think it was $31 million of CapEx. And so those were really the two main drivers on the outflow other than COGS. And then from that, we had an inflow of about $69 million, I think it was -- I get the numbers a little off, about -- we had an inflow from the ATM. But I think you saw most of it washed out, and we were still about neutral with the ATM inflow.

Marni Lysaght: Okay. And another question I have is just regarding, I guess, you've got the year-to-date revenues, the full year revenue guide. You've now got two acquisitions that have closed and settled this year and contributing. Is there any seasonality to call out with that? Because if you apply the year-to-date revenues against the bottom end of the full year revenue guide, it implies a sequential decline Q-on-Q. So just to maybe kind of set the scene and how we should be thinking about the business. I appreciate you've made similar comments earlier in the call.

Peter McGrath: I would say if you start back at Q1, I just want to give you some backdrop on it. If you start at Q1, we really only saw half a month of January of Lanteris in our revenues. And so we ran a little under $200 million in the first quarter. We saw the full benefit of Lanteris in the second quarter, which pushed us a little over $200 million. What you saw in the third quarter is really the wins that occurred in the second and third quarter and the step-up in a lot of the revenue from that, which is really helping show the new growth part of the business and how we're growing. I think you may see something more level to slightly up in the fourth quarter, and that's why we're showing the range that we're giving in terms of guidance. And then as you move up, and I'll give guidance for '27 next quarter. But when you look at that, we are probably getting to a new level of revenue going forward versus seeing a decline over time.

Operator: Your next question comes from the line of Jeff Van Rhee with Craig-Hallum.

Daniel Hibshman: This is Daniel on for Jeff. Maybe just on NSN, with the first satellite going up on IM-3 and then the other four all going up at the same time in 2028, maybe if you want to just talk through that launch change to put all those together instead of onCLPS launches and sort of the architecture decisions and what led to that?

Stephen Altemus: Yes. The decision I made to put aggregate them on the mission in 2028 was really to put the full operational capability of the constellation in place to meet the traffic needs that were called out via moon base in 2028. A lot of missions going to the moon in 2028. So we wanted to make sure that, that constellation, that infrastructure was in place. In the original plan, we were putting up one satellite on Mission three, two satellites on Mission four and two satellites on a mission that was in 2029. So we wouldn't have the full constellation up until late '29. And by aggregating all satellites on a dedicated booster in 2028, we can have the full constellation up by roughly mid-2028. And it really was just this increase in pace that NASA called for that we made that decision.

Daniel Hibshman: Okay. That's helpful. And then, Pete, just one modeling one. On the EACs, the positive adjustments to the quarter, what programs or generally, if you can call out sort of what that was about or in relation to?

Peter McGrath: We had some favorable performance on a couple of satellite programs. And then as we continue to move out a couple of EAC adjustments that were relatively minor on the -- some of the landers.

Operator: Your next question comes from Greg Pendy with Clear Street.

Gregory Pendy: Just on the Lanteris side, I guess, post-election, is there anything in the life sciences that was cut that may resurface? And then secondarily, just it seems like there's a lot of satellites in connectivity, whether they be broadband or direct-to-device that are looking for a launch partner. So I'm just curious, does Lanteris have any customer exposure to maybe customers that might be struggling given the launch bottleneck?

Stephen Altemus: Well, I would say science missions, what you've seen is -- we haven't seen the cuts in science affect us. We've gotten three awards in science here recently. One is the EDGE program. One is -- and we mentioned two, the EAGLE-VSWIR and the FALCON-RADAR. So three high-profile science missions for us is really a nice set of awards. And science is still a critical part of opening up the lunar economy. So we'll see more science payloads come available here in the near future. NASA has looked to revamp the science bid process to where it makes it easier to propose against their requirements or their RFPs and faster selection. We're looking forward to that. In terms of launch access, we haven't seen a bottleneck on the Lanteris side with any of the track layers or any of the commercial GEO birds. And our Lunar business, our launches of lunar missions have not been restricted based on a decrease in launch cadence at this time, and we have a plan to keep us moving through 2030.

Operator: There are no further questions at this time. I will now turn it back over to Steve Altemus for closing remarks.

Stephen Altemus: Thank you, and thank you, everyone, for your questions today. As you heard, Q3 was an exceptional quarter for the company, not only across the board financially but also operationally as we completed the transition and integration of our acquisitions without missing a beat for our customers. And we look forward to continuing this momentum into 2027.

Operator: Thank you. Ladies and gentlemen, that concludes today's webcast. Thank you all for joining. You may now disconnect.