Astra Space, Inc.

Ladies and gentlemen, thank you for standing by. Today's conference call will begin momentarily. Until that time, your lines will again be placed on music hold, and we thank you for your patience. Music Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Ladies and gentlemen, good afternoon. My name is Abby and I will be your conference operator today. At this time, I would like to welcome everyone to Astra's second quarter fiscal 2023 financial results conference call. Today's conference is being recorded and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you, and I will now turn the conference over to Andrew Xing, Vice President of Strategic Finance and Capital Markets. You may begin.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us for Astra's second quarter 2023 results call. After the market closed, we released our financial results. The press release is available on the SEC's website and our investor relations website at investor.astra.com. A supplemental presentation related to our results can also be found on the investor relations section of our website. This teleconference is also being broadcast over the internet and will be archived and available on our investor relations website. During our call today, we will reference non-GAAP financial measures, which we believe to be useful to investors as our management team uses these non-GAAP financial measures to plan, monitor, and evaluate our financial performance. These non-GAAP financial measures exclude certain items and should not be considered as a substitute for comparable GAAP financial measures. Astra's methods of computing these non-GAAP financial measures may differ from similar non-GAAP financial measures used by other companies. A description of these items along with the reconciliation of our non-GAAP financial measures to the most comparable GAAP financial measures can be found in our results release. Today's call will also contain forward-looking statements. These forward-looking statements refer to future events, including Astra's future financial outlook. When used in this call, the words anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions as they relate to Astra are, as such, a forward-looking statement. These forward-looking statements are subject to a number of risks and uncertainties, and as a result, Astra's actual future results and performance may differ materially from those discussed in this call. We encourage you to review our filing with SEC in which we describe the factors that could cause actual results to differ materially from our current expectations, including those updated risk factors included in our annual report on Form 10-K. Finally, I would like to remind everyone that this call will be recorded and will also be made available for replay via link available on the investor relations section of our website. With that, I'll turn the call over to Chris Kemp, Astra's founder, chairman, and CEO. Chris?

Thanks, Andrew. Good afternoon, everyone, and thank you for joining us. Joining me on today's call is Axel Martinez, our Chief Financial Officer. During the call, we will review our operational and financial results during the second quarter, review guidance for Q3, and provide a recap of the recent strategic decisions we've announced. For those of you who weren't able to attend our conference call on August 7th, I wanted to summarize and provide some color on the announcements related to our integrated strategy around financing, expense reductions, and strategic optimization. In early August, we announced a strategic reallocation of a portion of our workforce from our launch services organization to our Astra spacecraft engine organization. Our priority is delivering on our commitments to customers, which requires ensuring we have sufficient resources and an adequate financial runway to do so. To support this, we reallocated approximately 50 engineering and manufacturing personnel from launch services to the spacecraft engine business. Some of these are permanent reassignments and others are temporary assignments to either support specific customer programs or to increase production and test capacity through the end of the year. In addition to this reallocation, we identified other areas to optimize our organization and reduce expenses. As a result, we've reduced our overall workforce by approximately 25% since the beginning of Q3, including the recent announcement of a reduction of approximately 70 employees. We expect this overall headcount reduction to result in savings of over $4 million per quarter starting in Q4 of 2023. The workforce reduction included employees primarily supporting the launch services, SG&A, and shared services functions within the business. We now have just over 200 employees and aim to continue running a lean organization while maintaining all of the critical capabilities and skills required to achieve our near-term goals. These reductions were painful, but necessary to reduce operating expenses, which, when combined with ongoing reductions in CAPEX and additional reductions in OPEX, are expected to result in substantial decreases in cash burn over the next few quarters. I want to thank all of the impacted employees for supporting Astra and our mission. Overall, this reorganization is intended to focus the company's resources on serving our Astra spacecraft engine customers and delivering our commitments to them in the near term. We remain excited about the Astro spacecraft engine business and are committed to resourcing it for growth and success. We also announced the closing of a senior secured note facility. Please see the form 8K we filed on August 4th for important details about that transaction. When combined with our existing ATM, the closing of this transaction represents a broad financing strategy and demonstrates our ability to access the capital markets when needed. Now, I'll go through some of the highlights of our space products business during the quarter. In our Q1 results call, I said we would ship the first couple of spacecraft engines out of our new spacecraft engine production facility in Silicon Valley. I'm happy to report that in Q2 we shipped the first four spacecraft engines out of the new facility, and we remain focused on ramping up spacecraft engine production in the second half of the year. Axel will provide guidance for Q3 Astra spacecraft engine shipments in a few minutes. As we've covered before, module shipments are the first step in a 9-12 month joint development activity between Astra and each customer that involves integrating Astra's proprietary propulsion module, power module, feed system, and tank into our customer's unique satellite platform. This joint development activity typically includes milestones such as conceptual, preliminary and critical design reviews, building and testing qualification modules, and production readiness reviews prior to production. Astra typically receives payments for completion of these milestones, however we only recognize revenue upon final delivery of spacecraft engines following shipment, delivery, and inspection of the modules. As of today, Astra has completed over 75% of the pre-production, non-delivery customer milestones in its current customer programs. Finally, in early July, we completed an organizational change to separate our Astra spacecraft engine business included the creation of a distinct leadership team for the Astra spacecraft engine business and assignment of dedicated employees. This organizational change will enable Astra to evaluate strategic opportunities to efficiently finance each of our businesses, our spacecraft engine and launch businesses, on both an individual and combined basis, and provides Astra with increased flexibility as we evaluate strategic and capital markets opportunities. In addition, as our spacecraft engine business scales, it was important for us Distinct resources dedicated to the successful execution of each customer program, which are now currently in place. Overall, we remain confident in our ability to produce world-class propulsion systems for our growing roster of customers across both commercial and government applications. We will continue to take necessary actions to ensure we are delivering on our obligations to our customers, as you have seen in recent weeks. Now I'll review key highlights this quarter from our launch services business. We continue to focus on the development of Rocket 4 and the servicing of our existing launch contracts. Earlier this year, we announced several additional launch services contracts, including with United States Space Force and the Defense Innovation Unit. We've had recent discussions with our launch customers. We've indicated that they are committed to our launch service business and are supportive of recent changes. we remain committed to achieving all milestones stated in our existing launch contracts. In Q2, we commissioned our rocket production line, unveiled the first fit check of Rocket 4 at our annual Space Tech Day, and prepared the material for the Service Readiness Review, SRR, for Astra's Space Force STP-29B mission, which we successfully completed last month. For the rest of Q3, we intend to prepare the materials for our first mission design review for STP-29B and continued development and testing of various Rocket 4 and Launch System 2 components. The reduction and reallocation of launch services resources is expected to delay the timing of our first test launches into 2024. The timing of paid commercial launches currently scheduled in 2024 will continue to depend on the results of these test flights. Before handing the call over to Axel, I wanted to provide some final thoughts on Astra's long-term strategy. We made some very difficult decisions in the recent weeks to part with some incredible team members focused on launch, SG&A, and shared services. This was an incredibly difficult decision for me and Adam, but it was necessary to support a sustainable business plan for Astra going forward as we continue to carefully manage our cash burn and financial runway while still maintaining the flexibility for Astra to pursue growth opportunities as they arise. We are also excited to partner with strategic and financial parties that are supportive of our long-term vision and will continue to evaluate opportunities where it makes sense for our business. I'll now turn the call over to Axel to review our financials and guidance. Axel?