Sidus Space (SIDU) 27 Mar 242023 Q4 Earnings call transcript

Greetings, and welcome to the Sidus Space Fourth Quarter and Full Year 2023 Results Conference Call.

[Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Valter Pinto, Managing Director, KCSA.

You may begin. Please proceed.

thank Quarter joining Financial and Call. and Sidus for Results everyone, Fourth Space Full morning, you us for the Conference Good Year XXXX

us Officer. Craig, is Officer; Joining Bill the Chief and Financial and Executive Carol Chief White, from today Founder company

we to forward-looking factors statements. call, delays, actual These Many our statements needs, could sales made risks on and providers are These on a as results estimate make assumptions, differ cause expenses ability and and uncertainties. materially from operational expectations call. and to the forward-looking may to customer this result, today's statements based demand, During including current are subject extended include and liquidity supply cycles. chain factors launch

please the Commission, on factors refer to information more be which For the company's and Exchange with uncertainties, in the each Securities of website, www.sidusspace.com. found can about these our and filings risk risks

put submitted in your allotted within e-mail and over call to the please this ahead. disclaims not advance. reliance Carol, do At go cautioned undue on answering our are frame any time, please the statements conclusion that sidus@kcsa.com. statements, time forward-looking obligation our to not If morning's call, at At turn the any during get for team the may this question like we we'll be of forward-looking I'd this to Listeners questions be remarks, Carol. discussed specifically call. to to company prepared the update

Rideshare of successful low communications deployed of from earth and to work LizzieSat-X you, month, successfully Earlier the SpaceX status LizzieSat. a launch planned first retrieval year several Transporter-XX launch this the Thank pivotal for Sidus everyone. welcome, for toward and Mission as establishment we Valter, is orbit. and health was by satellites XXXX we data. of followed the of

LizzieSats year. X before We are satellites printed of the end this multi-mission launch more building constellation our SpaceX XD for manifested with of AI-enhanced quickly with

IPO organizational. technical processes deployment our future to to through on of and foundation steps both the critical the a prepare successful and next the deployment built we The We steps included since LizzieSat-X. and the areas us and We've XXXX were same The investment to took launch success that technology. that strategic to for at several led took our of plan initial for time, in people, contributed our years. the focus and we

success that and resulted agile the allow This of not a and the redundancy development space new rapid also to related flight environmental the in includes experience, a guidance time, processes will development only combined systems gate, and and and and grow capability evolve navigation with with heritage simulation, integrating as products of hardware testing, innovations, to right of development and design first software ecosystem grows flight and establishes us out our evolves. of line but established

grow the Mars We've LizzieSat, programs. an the of markets also streamlined focus and significant more outlook. edge LEO, our XXXX flex commercial to capture government Directors Moon and connect, team to long-term from solution. and matured to with addition both intelligence Board brought leadership ability benefiting computing look leadership including and upgrades This a with on the artificial of bringing our in and means as of our we the

a data our such AI device for critical satellites, through lower integrate outfitting our as into also solutions and to possible us allowed made sensing and was when This add host and collection capturing reduced to edge to Exo-Space processing our transmission AI customers. transmission costs. compute, as of benefits, security to to This applications called of time what greater the reduces decision-making, software third operational applications, function time-sensitive us satellite unlocked product a acquisition even hardware the computing time, an XXXX. is is significant and of and sale edge systems data line our of in autonomous FeatherEdge data the including acquisition between edge quarter which giving the with using AI remote local

that data from Specifically, X storage data areas on AI earth. are key to transmission and back satellite benefit the of

customers Our FeatherEdge of allowing future AI AI FeatherEdge being hardware and potential computer changing both and us allows adapt issues. The solves to proprietary to memory rapidly capable is processors on FeatherEdge to which of upgrade continuously remain allows The as as updated requirements. AI on markets hardware software mission our state-of-the-art continue to these to LizzieSats, well, enclosure our orbit us progresses. rapidly

parse solution uses proprietary download this our to increases we the to that dramatically to ground data This data And that's onboard learning of the the machine software out stations. additionally, customers. most valuable quality

incurring touching So even to user data the of that into where to instead raw volumes delay cost raw and directly essentially, without the large of end earth, of can to earth. be the be moving the delivered data insight including point can space, processing back actionable moved

While we're a it's successes, important is way is and the to difficult Space forget executing space our that takes extremely of not hard right and time proud environment. recent very experience.

not the space Our the with satellite collaboration other agencies government is our been one decade the of is reasons in launch. companies It's possible right to the after without that and this catalog first note and plus hardware important have now. successful during would satellite manufacturing

LizzieSat. After with information rocket, truly in the orbit. the for group collaboration space Rideshare together grateful And deploying vehicles, X low with Transporter-XX for come the space industry. sort our to of information spaced for this spirit common we our and closely and peers state share community confirm which tracks work of and other riders to of We these is the Falcon the saw deployments sharing we're Orbit correlate location from into earth

of only deployment our milestones and the test achieved complicated of the the we're mission follow-on first are and satellite. Not to preparation commissioning our related the complex, and orbit LizzieSat, is to early phase we critical endeavors. and understanding status but that successful including all operational health design, of satellite have stages, build excited the launch very and After very launch report

in XX approximately and onboard communication, focusing We're and and orbit, the every checkout data Now it calibration between sales. take looking currently the spacecraft subsystems, activation commissioning LizzieSat processing collection, X-way and and circling of to minutes that sequential will think stage, data filtering, forward of to on payloads, download the days. is earth systems, XX providing the we which sensors in of includes control which XX we're

to have first later Following from data and with images year. revenue this, in sensor expect we of this LizzieSat realized collected the months

the Space government in kilogram, few building, and efficiencies experience we resulted and the commercial technical of cost of a a and Additionally, both the of are greater and puts our small cost years. operating group with has in to very of pursue opportunities successfully though long-term Even operating Sidus the more satellite size, ability companies heritage than will with launching LizzieSat-X, XXX in next that and support reductions our both commercial entities. scale economies advanced

organization for and more As satellites, technologies of first we the efficient able new continue for success year, going operating and our production manifested forward, an we the our LizzieSat. even end new of We've result improvements identified we're the this an next X with few become as to of including that expanding markets. the a as with anticipate unit we integrate

our part us suit We own proof-of-concept. of just Sidus, not integrate reasons solutions and the This recognized One allow a our to production we is is because of to vertical at all we integration. smart the a objectives. LizzieSat-X which adapt technology and full we space lessons quickly is select selected satellites. manufacture use best practice that and can proven steady cadence establish learned bus plan our subcomponents, a mission the production of satellite, to so

gap and companies other manifested production first LS-X and this LS-X LS-X we and are enhancements. in is most XXXX are on QX for manifested design have between mission launch missions, and had subsequent technology year. While our phase determining payloads in is currently schedule for the LS-X their as QX and in size their a full

including Once XX time and achieved, expected assembly. is satellite to the full is manufacture cadence production days, printing

ensure our continue to path revenue smooth industry look partners collaborate to subsequent toward As we and the is we uninhibited. and forward future, with the to launch

with existing small our to of launch rides for accelerated to expanding to cadence. options our an continue satellite low-cost satellite we space increased launches, accommodate by the options agreement launch augment entrance small Rideshare As dedicated

critical of are allow Low future Orbit, our capabilities Space business moon, Satellite from All and support Manufacturing and Space-Based products Mars to and us markets These the strategy. and X Earth to services to Services that units and our offer and Integration, through AI multiple Data we Hardware Products Defense our Manufacturing, concept Solutions and beyond. industries Payload growth and

and deliver catalyst business help stable to launch all support can and increasingly seeks to model in needed, rapidly and platform use government creating The small dual technologies or our focused and provide is we're data accelerate them complementary the with Space needs. a planning a integrate to purpose space benefits to LizzieSat to to space actionable building include as both the sensor satellites ability and on a And to other key solutions the ecosystem or augment industries as of geospatial with government commercial consumers. flexibly to architecture leverage

call to now over our I impact business our and our to recent discuss financial successes hand the to highlights. will And Bill how discuss strategy

streams results to a of fourth to recurring a be quarter full a to is LizzieSat-X Data-as-a-Service our data. our good day XXXX satellite building major high-margin, executing pleasure our space in an Launching financial shareholders, and revenue and our on also step and provide update business Carol, and guests year Thanks, listeners. our today It's here discuss strategy. from strategy

we towards putting Data-as-a-Service production for sell margins. With a LS-X to are on orbit, and by well LizzieSat-X revenues have our this LS-X way higher establishing and shift highlighted to difficult Carol As and multi-satellite customers. to long-term satellite company capture the our achieved most manifested of constellation and into launch strategy our to in the we greater year, part

our in this capable a this satellites data in of able a Interestingly, of single revenue day. it put This theoretically sell $XX assuming multiple downloading generate of to perspective, sell megabytes time. per XXX% million to minimum each in our XXX,XXX back data earth year we to each may are we translates be of satellite, of ability times. per To data

capacity generate meaningful cash orbit. a flow As model business rapidly into the and scale going LizzieSats we has as can of cadence steady you to this develop imagine,

in Business our We and pipeline that Data-as-a-Service. orbit drive place, President the our contracts of potential recently customers do operational, now data we LS-X of have process. Vice hired fully increasing new to in a is we Development current are Space While for sales

contracts, XX for approximately by XX, offset December by ended XXXX total XXXX. $X our milestone ended XX, million, months for revenue driven primarily compared the revenue. decrease XX decrease million December payload This of a financial months timing Total satellite Now to $X.X revenue XXXX, the results. totaled of for the fixed-price was

Cost primarily XX, months December the business. of This cost approximately the contracts XX, for XXXX, offset the compared million supply billings, ended ended months XX% to to side driven XXXX. in increased $X.X milestone decrease million December was approximately revenue $X.X continued helped XX XX of decreased a and chain which manufacturing by mix of as our for

months the XX, XX months Gross compared $X.X for the profit as increased to $X.X December XX to ended XXXX, December approximately million for ended approximately XXXX. XX% XX, million

Our for XX% full the for as XXXX. XX% gross full increased margin profit year compared XXXX to year the to

December as SG&A year. increase compared as the the This $XX.X XX period same primarily XXXX, prior XX, million increase to ended expenses $XX.X was for for to months with million associated the an due offset totaled well expenses. This fees costs legal acquisition decrease rates, the including Exo-Space, in as license increase insurance a fees, expenses. was in IR/PR of and professional by employee in

and decisions our To we We with connection also EBITDA in in adjusted additional evaluate direction in regarding future as non-GAAP investors the our with determine GAAP, results in provide strategic order with operating measures adjusted our company. performance EBITDA. determined to XXXX to accordance the Form include our of XX-K use information make

adjustments for million EBITDA for acquisition earnings Adjusted EBITDA interest amortization, $X.X for equity-based advisory in provided as capital adjusted year released fees, costs, XX, same expense, XXXX loss, depreciation and this our Total the XXXX, loss reconciliation warrant quarter compensation and morning. year. non-GAAP to listed months fourth in are December deal the the a earlier prior and XX totaled the in compared table an measure severance non-GAAP release press period and markets costs, of costs million ended $XX.X full

of XX $XX.X the XXXX, was to the XX, for same ended loss a compared loss December as million for Net year. last net $XX.X months million period

to the balance Turning sheet.

sheet XXXX, our million and December by XX, stronger raising our had XX, of putting as December of As December the financial $X.X continue future. the Subsequent to we XXXX, this million constellation of to later position company XX, cash to $XX.X XXXX. as expand bolstered $X.X in gross company balance into the million, at compared a us proceeds year

hand I'll back to that, Carol. With our CEO, it

a Bill. you, Sidus. of The for the marks LS-X launch new Thank beginning of era

core Our with at are LizzieSats into technologies business multiple model single of XD-printed, AI-enhanced our Data-as-a-Service integrate a the the satellite. to high-margin capability

to Our for collection these gas we satellites facilitate and support revenue our data and shareholders. expand other And into oil generate additional to to intend agriculture, simultaneous maritime, industries. industries

attracting as big have We our the we LS-X and the LS-X on LS-X SpaceX new data more With of before business. customers with LizzieSats expand constellation in for year. plans production, for mission our and orbit on to launch quickly X end XXXX are manifested satellites building Data-as-a-Service focusing their bandwagon with we're in

just business than Low we lines other our expanding more on Orbit. focus at looking we're Earth of Additionally, as

demonstrate We a rapid of capabilities plan on Space remaining our expect XX all to of we revenue months with response focus ecosystem. for Solutions areas lean the the as space and next for development grow

level. launching all we could Successfully there proud our satellite few to who are building, accomplished. deploying very feat, and this not get I companies an designing, more have easy operational be not and team and an of XXX-kilogram is XD-printed

a executed integrated Data-as-a-Service a innovative leading supply an our have and technologies, vertically We robust manufacturing spacecraft and with building methodically a facility on and team, of strategy experienced space chain. advanced company Space

this show and both shareholders. to customers capability our exciting It's proof for of our

bring as value to much our execute we our we're world. We to our and customers and have the the on shareholders, do, vision looking to to and continue future forward

for want shareholders to continued support your I all of of our thank Sidus.

we'd the to some will call. And Q&A that to like We've submitted the move now we of portion from address. received questions investors

start. you let I'll Bill,

Carol. Thank you,

The respect first to growth. with question revenue and was

billings our the decline What year? The of and were timing manufacturing primary contract function billings revenue. the behind those and drivers the key was for satellite drivers the this revenue milestone of

the question, or how anticipate do Second next year? you quarter evolving revenue in fiscal trends

evolve to more data. streams: about will have orbit. in revenue We've talked manufacturing, While as satellites and revenue we our X continue payload

and our expected are data manufacturing as cadence. revenue higher our had and some favorably XXXX results. to data we seeing we've impact we start in planned in payload are margin While overall launch XXXX anticipate revenue Payload and to XXXX, satellite continue and

Bill. Thanks,

So #X significance an the operate successfully of being generation size and was the flown. government fact of addition now strategies launch, the demonstrating is, increasingly we've commercial of retain you to customers its that commercial endeavor, in are next and XXX-kilogram of competitive VP market? So therefore, an Also, we we to employing our the control could and question in operations a with what the focus Development that Business acquire The satellite mentioned, complexity strategy and the we opportunities as satellite. increased upcoming deploy a of constellation. on revenue the Bill all because hired

satellite on additional an our vehicles the March more for services. events, we're engineering the attending all work these upcoming acquiring year April. of And pipeline well We this our increase Symposium customers. an and data and in pipeline towards manufacturing expect are that over also focus manufacturing those existing a execution because contracting due attended Satellite industry us Space XXXX of course, of of an in more capability. the means government as And are next is retaining was increased of and opportunities the the combined as helping and to there with to and also out successful timing operating And

Next reporting question or during period? any there notable wins is, are expansions customer the

intelligence collecting, selected by development primary teams development and research Agency, to did we is Geospatial-Intelligence distributing mission that some of in security. that contract upcoming and team the expected is we start And and of be geospatial and momentum are the of for to support a we NGA, their the will services national that in part So NGA's as directorate. gain orders one And announce bidding XXXX. to task National that analyzing were research on

and only we'll And well. we're beyond. also contract contract IDIQ orders Mars not our lunar for as and Moon for up out or the pursuing a LEO, years shows from to now. contract signed X but commitment And subsequent that that booking government and on commercial launches also support, We task be customers to

announcements, a don't aren't doesn't doing public announce lot their So mean of customers and we the something. times, that that

looking ensuring satellites. are customers subsequent we those for cadence we that are our at So those and booking

Next is, question how operational improved impacted has or quarter? efficiency during the

are So we the build and design. development, testing requirements. LizzieSat-X flight completed all LS-X the passed LS-X satellite, design, print and and successful we that from SpaceX now the of to our really regulatory LS-X

for compared the -- the LS-X. nonrecurring call reduced as are NRE they engineering costs to So what

efficiencies see cost will we reduction. there, including So

Mission operational, and mission worked we Sidus launched our control fully is And LS-X up has other utilized LS-X the Center since this the have for to on and Control missions. We center all going that's beyond flawlessly March be now X. which same

NRE, those repeated. that and costs again, So that nonrecurring engineering are not

since center near X same mission it's So for missions. those use all we control the

Next question any results? successes that significant operational are or financial influence challenges is, there

the regulatory So costly. flight first hardest of the most is course, and LS approved SpaceX the for getting and -- by always bodies

deployed, So we've subsequent with again, operating reduced satellite, significantly launched, that missions. currently now getting LS-X that approval for successfully NRE is associated the

supply chain contracts more satellite-related continue challenges and manufacturing were revenue, Through the able achieving versus through we XX% mix XXXX, overall which front, of XX%. increased margin we and higher chain manage On to gross a challenges than supply prices. offset was and the to

question capital allocations. The with the do has and health next to financial

position manage can and any The measures effectively? company's cash question liquidity taken you is, to discuss the flow

XX-K sufficient from we next months. that operate have XX the least at was concern our going indicating company's liquidity for to The removed

company's the market approach capital The environment? current is and next in managing -- leverage question to the is what debt what is, the

to a our effectively. very competitors, has efficiently has to continue and budget company operate some capital we of raised the tight of a will The fraction operated historically on and

How in or to you investment deploy on Any do the plan acquisitions? coming quarters? capital plans update

We for investments. always have plans no strategic accretive are immediate that M&A looking

to question which my favorite. is landscape, one related next competitive of So is always

do view company satellite to the positioned competitive in you is industry? How the how services relative landscape competitors? And the

LizzieSat were related companies of and So those In sensing the of those, XX% And for comms. and and XX% and built launched. technologies. ours. like new of observation last flexible needs type be X,XXX And on allows X,XXX out address sensor and of the earth a sensing year, remote rapidly. OneWeb multiple platform satellites be us of rapid were industry SpaceX more emerging most one were technologies communication-related to for remote only to when customer focused and market, integration or to seem we industry. or to to to This needed allow pivot dynamic are emerging

Also, our most all via if significant of public public the went not have in overhead. and market some competitors SPAC

launch that our losses satellites, we and because the of that will NRE we structure previously we've lean I see As reduce the operating created. more mentioned invested

for towards like building This that contractors the are provide governments operate Additionally, our are typical and government-owned CubeSat lower moving to larger and build and commercial satellites means ours to than paying industry their more opportunity competitors. that looking there's a are data cost own opposed build of than to satellite. who more at companies doing as to many models and satellites a

successful a do So define how we mission?

And so the for were out collecting fourth launch, and initially on monitor the that therefore, the and health communications is satellite, data achieve establishing mission LS-I, collection X-way we're right successful Each successful were and that's separation status and objectives. of those. where then generation moving and into LS-I. different a we comes we deployment revenue can we're data. successful X of And looking focused now, at has and and May, those we the But

the advancements Next or advantage? question is technological what have to competitive contributed innovations company's recent

before. this mentioned I

hardware is solutions Integrating of and maximizing AI is One the AI of the Exo-Space, onboard them company. critical to generation. revenue acquisition software

plan drive question leverage is, for satellites emerging small example, Another to how growth? advanced do analytics to technologies, you or future

reduce required to and downlinked time technology, on also we're our and using computing the computing focused while this speed. to our the leveraging reduces of thing time that control mass which complexity And onboard software-defined improving data it's generation. revenue receipt means modularizing increasing total handling critical radios customers, is it that One speed transferred and VPX onboard LizzieSat subsystems the from more data what and does to is

And I'll last to for pass our it question. back Bill

any Okay. growth And expectations? question is, into earnings and provide future last you visibility can revenues

don't contracts. We're sales is guidance. our provide and in emerging orbit, additional But now an growth LizzieSat-X data with aggressively company, we pursuing team currently

plan currently. costs have over X launch gap satellite less We LizzieSat-X a of missions. QX companies of our and in between schedule other of of XXXX our subsequent currently This first the is a design a for LizzieSat-X the and in are year. mission first was their mentioned, LizzieSat-X. revenue QX built size deployed and for growth LizzieSat-X X are continued means on this from and the first Most and cadence. phase production had in and manifested we with steady for manifested as LizzieSats-X that as last years and nonrecurring and operations engineering incurred our have

Thank Bill, questions. who you submitted to thank and everyone you,

of all for Earnings Year you Quarter you Full to today and for Sidus Space's Fourth joining Call. thank XXXX us Conference Lastly,

This does teleconference. today's you. conclude Thank

You lines day. at great time. for your may participation, disconnect have Thank a and you this your