Momentus Inc.

Q4 2022 Earnings Conference Call


spk_0: gentlemen thank you for sandy by walking to the momentous ain't fourth quarter twenty twenty two ernie the conference call i would now like to turn to call over the darryl genovese vice president of investor relations please go ahead
spk_1: recorded ordered one point you and peculiar quite my to earnings carbon call with me here today or john ruth keep executive officer of the company and chairman of it's board of directors as well as that it's mahoney interim chief financial officer each will prepare each will provide prepared remarks following the prepared remarks will take questions from our in the interest of time we would ask that you limit yourself to one question and one brief follow up earlier today we issued a press release and me to fly presentation available on our investor relations website which provides an overview of our business and financial highlights for the quarter and the year you can download a copy of the release and presentation flight at better at that moment that bad faith during today's call we will make certain forward looking statements within the meaning of section twenty seven a of the securities act of nineteen thirty three and texan twenty one he of the exchange act of nineteen thirty four forward looking statements are predictions projections and other statements about future events that are based on for an expectation that assumption and as a result are subject to risks and uncertainties many factors could cause actual future events in different materially from the forward looking statements in this communication you should listen to they call with the understanding that are act for a gulf may be materially different from atlanta and pension fund expectation was closed in the forward looking statements we make for more information about factors that may cause actual results are materially differ from forward looking statements please refer to the are expressed relief we see today as well as the company filing to the security and exchange commission readers are cautioned not to put undue reliance on forward looking statements and the company specifically disclaims any obligation to update the forward looking statements that may be discussed during this call please also note that we were heard it's or non gaap financial information on today's call you can find reconciliation for the non gaap financial measures to the most comparable gap measures and aren't properly none of the non gaap financial measures as a substitute for are superior to measure the financial performance prepared in accordance with got with that i'd like to turn the call over to our chairman and chief executive officer john ruth well thank you errol i'm delighted to give you an overview of the companies progress and twenty twenty two and so far and twenty twenty three as well as our plans for the future i'm also pleased at dentist mahoney here for his first earnings call as our interim cfl after i make my comments dems will take you through the financial highlights turning the slide for momentous to great strides and twenty twenty two and so far and twenty twenty three toward our goal of being one of the market leaders in in space transportation and infrastructure services
spk_2: we are one of a small number of companies that have launched orbital service vehicles in space to serve this market
spk_1: we have made significant progress on our technology development conducting the first large of our vigor i'd orbital service vehicle called vigor i'd three in may of twenty twenty two click right three was launched from cape canaveral florida into low earth orbit on the spacex transporter five mission in addition to lodging they gripe three on the transporter five mission momentous used a second port on the launch vehicle for the player made by a third party using vigor i'd three and this deploy your momentous placed eight satellites into orbit these eight satellites were from fox assistance orbit np and you
spk_2: you and california state polytechnic university at pomona we also carry a payload from a fourth customer who prefers not to be publicly games
spk_1: our inaugural lot of vigor i three was followed by a second vigor i'd launch in early january of this year with our vigorous five vehicle which is a lead ship and i've new block two point to configuration then incorporated lessons learned in improvements from the bigger i'd three mission figure i'd five is now in low earth orbit where it is in good health and is undergoing a deliberate commissioning process as we prepare to fire it's microwave electro thermal thruster in the coming weeks maneuver the spacecraft in orbit place a customer satellite in orbit and continue to support a cutting edge house to payload from cal
spk_2: tech the aims to demonstrate the ability to collect solar energy and space and transmit electricity wireless lee in space and back to earth
spk_1: during the first two months of twenty twenty three we conducted the assembly ground testing and flight reading this review of the next spacecraft we intend to launch the grad six we then shipped vig ride six to as launch site at vandenberg space for space in california where it has been integrated onto a spy a sex launch vehicle i'm pleased to report that we are on track to launch the great sex on the spacex transporter seven mission targeted for next month we really strengthened our engineering and operations capabilities over the past year we assembled an impressive group of leaders for our technology development engineering program management manufacturing operations and supply chain functions composed of industry veterans with decades of experience and leading companies and say ace and defence industries we've also recruited outstanding talent below the level the organization chart below the top of the organization chart down to the individual contributor
spk_2: momentous combines the strength of a highly experienced team with the agility of people trained in early stage enterprises an interplay between his backgrounds has produced a stronger engineering and innovation culture we believe are highly experienced team gives us a competitive advantage over our peers
spk_1: we streamlined our engineering and development organizational structure to support more rapid development of our spacecraft and enable more mature documented engineering processes to develop assemble and test our spacecraft and it's components the results are evident as we encountered far fewer issues during assembly and testing of the guide six than we did during the production and they gripe five which already represented a big improvement relative to what we experienced on the earlier vehicle the great three to be specific our engineers and technicians reporting forty five percent fewer nonconforming says on vigor i'd six relative to vigor i'd fight and not only are we seeing progressively fewer issues as or assembly and test process is mature were also resolving the issues that we do encounter more rapidly all of this gives us increased confidence in the reliability of our vigour i'd orbital little service vehicle productivity has similarly improved he can family and testing vigor i'd six faster with substantially fewer labour hours and big like by and we expect to see continued productivity gains during the production of our next vehicle the grade seven that is already underway we're pleased with how customer interest has been trending we recently secured following orders from to of our vigor i three customers and well as contracts with several additional customers including nasa like space clobber and contact
spk_2: momentous also signed a memorandum of understanding was signed a space during twenty twenty two to explore launching it's lizzie said satellites on board vigor i'd and the generally foster collaboration between our two companies
spk_1: as i mentioned that our last earnings call momentous started to focus on growing our business with us government departments and agencies like the defense department and nasa and we think these customers can ultimately grow to represent a major part of our business
spk_2: to lead this effort we have hired christian minutes or need she'd commercial officer chris comes to us from north of from and space system where he led the business development team in their capture satellite and payload opportunities for the defense department and intelligence community chris brings more than three decades of experience driving growth in the defense and civil government and commercial space that years and he is already making a big difference for us
spk_1: during twenty twenty two we improved i systems tools and processes for better cyber security and a better user experience that should improve workforce productivity we've also improved our finance and accounting tools and processes and hired a new and i'm cfl dennis mahoney who is here with us today
spk_2: damn it has been the cfl our senior financial executive of six publicly traded companies he has negotiated with closed for acquisitions in one company sale
spk_1: he comes to momentous with deep experience in defining financial strategy scaling operations and driving profitable growth that technology companies were really happy to have dennis on board at you'll hear from him and just a minute about our for financials over just the last few weeks we've made progress and retiring some legacy obligations from before the company was public including settling a class action lawsuit we also successfully raised roughly ten million dollars and gross proceeds from an institutional investor momentous as a share repurchase agreement or s array or final payment of ten million dollars to the to founders of the company the former founders were diverted from the company in january twenty twenty one do us government foreign ownership concerns in the company previously paid twenty million dollars for this purpose
spk_2: the ten million dollar investment which is equivalent to tell specified in the us or a provide capital to the company to eat the obligations in yes array
spk_3: retirement
spk_1: she's years the way the momentous to move forward with it's vision to provide backbone infrastructure services for the growing space economy
spk_4: turning fly bys
spk_1: in early january of this year we launched our second degree mission with our big right five spacecraft recall invigorated five is a next generation vehicle from our block two point to configuration which is much more capable compared to our previous vehicles improvements include modular payload bay that allows us to swap customer pay a loads for additional propellant our next generation microwave electro thermal thruster or m e t which is designed to be more capable than it's predecessor an enhanced payload hosting capabilities and allow us to host multiple experiments from caltech onboard the by
spk_2: trying to slide sex
spk_1: launching separation of vigor i five from the launch vehicle has been completed a big right five is now and low earth orbit undergoing commissioning as commissioning operations advance vigor i five remains in good health and the vehicles power and thermal systems continued to be with a nominal range his the solar arrays are fully deployed in generating power a generating power nominally on my dad both uplink and downlink communications with a vehicle or healthy recent activities have included commissioning the attitude determination system and completing the pressurization and vehicles propulsion system
spk_2: as part of the commission and campaign a spacecraft camera has now been activated and has been returning images of the spacecraft which momentous uses for engineering devaluation at one of the images we've collected is displayed now
spk_1: in the coming weeks momentous will prioritize testing vehicles innovative microwave electric them a thruster or any t get momentous is a pioneering commercializing this technology the immediate his ideas water as propellant and produce thrust by expelling extremely hot gases through a rocket nozzle
spk_2: unlike a conventional rocket engine which creates thruster a chemical reaction the emmy of designed to create a plasma and thrust using microwave energy using the m e t momentous aims to offer cost effective efficient safe and environmentally friendly precaution to meet the demands for in space transport
spk_1: asian and infrastructure services we plant operate big riding space to powered flight and test it's ability to maneuver to different orbits using unity all we plan to deploy cosmos this is satellite in it's desired or that they gripe five what has caltech payload for the entirety of it's mission as was the case for our inaugural mission or intention is to perform the plant like mission test our technology in space meter obligations to our customers and apply the lessons learned during the mission to improve our technology
spk_2: this is harder knowledge they can only be game three flights
spk_1: during the slide seven
spk_2: beyond big ride five we plan to launch big right six on spacex is transporter seven mission targeted for next month the big right six manifesting couldn't two satellites for nasa payloads for several commercial customers as well as a prototype of the momentous keep spring solar array or tessa
spk_1: we're delighted that nasa contracted with us to fly to satellites for their light in l l i t v or low latitudes ionosphere thermos fear enhancements intensity mission we recently completed they griped six assembly and a rigorous ground tested campaign including vibration and thermal testing of those things simulate those tests simulate environment that vigor i've six one count on the launch vehicle and in space this slide that were showing now illustrates the progress we've made in preparing they right six the picture the top left shows a spacecraft in are clean room at when we were just beginning to assemble it can the other photos traced it's journey through various states with testing and large preparation customer satellites have been integrated under the great six and we conducted our flight reading this review a week ago
spk_2: then on february twenty eight we shipped vigor i'd six to it's launch site vanderburgh space where space in california where it has been integrated with the launch vehicle
spk_4: we're on track to watch the i'd six on the spacex transport seven mission targeted for next month
spk_5: turning slide eight
spk_1: one of the key objectives of the classics and dissipates the big test the taste like solar array or tasker on orbit
spk_2: our team led by rct job love schwartz has been working on the test the concept for several years as a potential means of reducing the garage unit manufacturing costs and we'd times
spk_1: we've applied patented technology behind tessa you can see the task of fully unfurled on the left it's about eleven meters or roughly thirty six feet long to build tasser the team bonding large sheets of flexible solar cells to take breaks the inch mandrell is much smaller than those used it competing rollout solar arrays which provides weight savings
spk_2: once development is complete we estimate that replacing big arrives third party solar array with tacit could reduce the overall recurring production cost of leg i'd buy as much as about ten percent while potentially reducing lead time by several months
spk_1: these are important improvement as we continue to transition from vigor i'd development to production at lower unit costs
spk_2: we're also seeing interest from commercial and government customers and tessa
spk_6: the grade six will be equipped with it's standard for that solar arrays so tax will not be it's main power source of rather taxable flies a hosted payload and the upper deck a big red six on the bottom right corner of the chart you can see tacit in had stowed position on the big red six upper deck
spk_1: turning slide nine we have another technology demonstration plan for our next mission with vigor i'd seventh scheduled to be launched on a spacex transporting nine mission targeted for october twenty twenty three and vigor i'd seven wins and to test and demonstrate big arrives ability to rendezvous with other objects in space and maintain close proximity bigger i'd seven will deploy a satellite and then attempt to maneuver closer and farther away as well as maintain relative distance to it in space using sensors week sign on table and proximity operations or are key oh recall that the current version of they i'd like to point to is expendable after completing it's mission move to a decaying orbit and burns up during reentry a reusable big right after completing it's mission would rather do with and provide services to additional customer satellites to be clear what we mean by reusable decried is one that would stay in space and be refueled and therefore reused on later wish his this would allow momentous to serve customers at lower cost than expand by building and launching an additional trigger i we think transitioning from an expandable to a reusable decried vehicle offers the potential to deeply reduce our manufacturing and launch costs and part of that process is the need to upgrade the guy with a few key technologies including p o
spk_2: r p o capability is also key to our ability to expand the menu services that i can provide to include in orbit maintenance and refueling and customer satellites life extension and the orbiting satellites at the end of their useful life chinese like him this slideshow a few commercial highlights from the fourth quarter an early part of twenty twenty three
spk_1: contact is a korean company that is a new customer momentous flight plans to provide transportation services for the jin you sat one cute sat and twenty twenty three in support of a korean national space we've all society district as million research council training center to keep sad and crude aerial vehicles and their applications or club
spk_2: a contract for the transportation of to clobber cute that to lower orbit while those a new customer we also signed contracts with fastest systems in spain for transportation a two satellites and one pocket pod the player carrying eight satellites as i mentioned that fosters of previous momentous customer who participated in our vigour i'd three mission we deployed six satellites on that mission from a faucet there
spk_1: and then finally we signed a contract with another repeat customer who would prefer not to be publicly turning slide eleven we're excited about the potential growth markets we serve this chart estimates market segment sizes for last mile transportation and d orbiting services where we expect growth to accelerate given recent regulatory changes from the federal communications commission or fcc that we covered in detail in our last remnants call that will require operators to deal
spk_2: or but their satellites within five years after mission conclusion as well as a potential for harmonization from other global regulatory bodies to closely resembled the new fcc rules
spk_1: defense and civil government space budgets are growing as you can see their measured in the billions of dollars we believe momentous has a right team and experience to peel these customers with decades of experience in aerospace and defense industry and the department defense in sync former focusing our business development efforts turning slide twelve i would like to conclude my prepared remarks with a summary the key reasons why momentous is well positioned in the space market first the markets that we serve are rapidly developing as a result of progressively lower costs the number of satellite deployment is growing and these satellites need additional services once they get space both the private sector and public sector recognizes need and the regulatory environment is trending favorably with new fcc the orbiting rules being an important sample the space foundation estimates the size of a space economy at about four hundred sixty nine billion dollars today and morgan stanley space team expects the market to more than doubled over one trillion dollars by twenty fourth bank of america and other groups forecasting and faster second momentous as well positioned to capture portion of it's growing market momentous is now launched to figure i vehicles space as well on it's way to launching a third while others have aspirations we are one of just a select group of companies already flying and space and with deployed eight or satellites beyond our in space transportation service we offer payload hosting services and are currently flying a substantial has to pay look for caltech
spk_7: we believe our power generation capabilities and the size and flexibility by configuration give us a competitive advantage in this segment
spk_1: we continue to build and our service offering and plan to introduce in orbit services such satellite me and an orbital debris them our plan twenty twenty three our t o demonstration should a this in this effort our relationships with launch companies such as spacex are strong moreover nigger i did large vehicle agnostic so we should benefit from increasing large capacity and associated price competition amongst launch providers over time third we were encouraged by our improvements and reliability and inefficiency we're confident they were path to be a profitable business once we get scale
spk_2: or car succeed reading today as we're still early in the learning curve and a producing and flying pig arrives at a low frequency as we increase vehicle reliability we expect capacity utilization in revenue generation per vigor admission to increase
spk_1: at the same time we expect to be able to produce vigor rights more efficiently and as a result of learning economies of scale designed for manufacturing and targeted cost reduction efforts like our tessa as a result as revenue growth we plan to cheat profitability and expand margins in the future additionally we expected discreet margin boost once we introduce reusable big right and start to save on manufacturing costs
spk_2: and finally driving all of this is are highly experienced capable leadership team that i believe to be the most credible among nice space companies as evidenced by all the progress the company has made in his last eighteen months
spk_1: overall i believe the combination of a growing space economy favorable to services we provide competitive advantages relative to other in space transportation because if central for margin improvement position momentous as for the future
spk_2: i'm pleased with what we were able to accomplish and twenty twenty two and so fine twenty twenty three including a large of to orbital service vehicles the deployment of eight customer satellites are progress towards conducting the they glide six launch next month recent customer contracts further progress on our cost reduction plan and the retirement of legacy matters through the settlements of the class action lawsuit and raising capital the cover expenses of the share purchase agreement without one former founders
spk_1: and i look back over the last eighteen months since we've gone public i'm proud of how many consequential strides momentous has taken from being a up to discipline public company we are today this is not been easy not by any means but seeing what we've done successfully over these eighteen months is what gives me great optimism for our future success
spk_8: perhaps most of all adding new talent at all levels with the company has resulted in a culture that is focused relentless and refuses to quit
spk_1: i'd like to thank our dedicated team for getting us here and would also like or customers and investors for their continued support i'll now him the mike after an see about dentists mahoney and they will take your questions ab john i am pleased to present highlight said the financial results achieved by the moment his team during our fourth quarter and fiscal year two thousand and twenty two with comparisons to prior corresponding periods turning dislike fourteen or fourth quarter and fiscal year twenty twenty two results reflect our ongoing progress and investments toward our future launches we currently have contracts for approximately thirty three million dollars in backlog representing potential revenue out of december thirty first two thousand and twenty two compared to forty three million dollars at the end up que three twenty twenty two and sixty seven know new dollars at two thousand and twenty one fiscal year round the thirty three million dollars in contracts had been entered into with eighteen companies in twelve countries similar total to the prior periods the decline in total backlog at fiscal year and two thousand and twenty to compare to que three twenty twenty two and fiscal twenty twenty one is due to the combination of fulfillment of prior contracts cancellations and the expiration of option agreements entered into for a fee to participate in momentous like that future dates typically our customers have a right to cancel of like reservation and when doing so for dollar deposit and milestone payments shit a customer cancel a contract for their rescheduling needs or other reasons before all of it's payments are made the resulting revenue will be less than the full value of the backlog momentous has historically included in back lot both from orders as well as options
spk_2: these options give our customers the flexibility to opt into and available launch slot without requiring a separate agreements
spk_1: the decline and backlog from prior periods to thirty three million dollars at que for twenty twenty two was due to a combination of these factors including the expiration of options
spk_2: of particular note are from contracted order backlog is consistent with levels reported at the and at que three two thousand and twenty two
spk_9: we ended few for two thousand and twenty two with non restricted cash and cash equivalents at sixty one million dollars which compares to ending cash balances of one hundred and sixty million dollars at you for twenty twenty one and eighty two million dollars at que three twenty
spk_1: twenty two we believe the company has sufficient liquidity the meet it's needs for the next twelve months we ended the year and fourth quarter at twenty twenty two with approximately fifteen million dollars an outstanding gross debt consisting of a term loan that we began to that we began to repay in march versus twenty five million dollars at the year and it be thousand twenty one
spk_9: we invested approximately eighty eight million dollars in operations in two thousand and twenty two compared to eighty seven million dollars in two thousand twenty one
spk_2: two thousand and twenty two investments that eighty eight million dollars include seventeen million dollars in queue for twenty twenty two a like amount compared to queue for twenty twenty one and in line with our plan
spk_1: we recognized two hundred and ninety nine thousand dollars in revenue and twenty twenty two compared to three hundred thirty thousand dollars in two thousand twenty one during que for two thousand and twenty two we recognize one hundred and twenty thousand dollars in revenue which included customer deposits forfeited upon the expiration of options other two thousand and twenty two revenue related to bigger right three as it continued to deploy customer satellites that telling performance obligations to our customers the majority of our figure can dig digger ride manufacturing costs and last costs are accounted for as research and development exp dance because the bigger ride platform is still under development we expect gross margins to decline once vigour i development is completed
spk_9: and we entered the production days when costs will be accounted for as cost of revenue and not research and development expenses
spk_1: in the fourth quarter of two thousand and twenty two regenerated approximately twenty one million dollars in losses from operations on a non gap basis or adjusted ebitda with negative fifteen point five million dollars which represents an improvement of approximately five hundred thousand dollars versus few three twenty twenty two please refer to the earnings press release issued today for the reconciliation as either dot to gap net income non gap as dna expenses for the fourth quarter at twenty twenty two total approximately six million dollars approximately one million dollars lower than que three twenty twenty two non gap are in the expenses for the fourth quarter twenty twenty two total approximately ten million dollars in line with que three twenty twenty two we ended few for twenty twenty two with approximately eighty four million shares outstanding i will now have the call back to darryl dennis it's in a moment wanted answer portion of my car
spk_0: i would like to remind participants in all disclaimers outlined at the outset of this call extend to the question and answer session book that includes ah disclaimers relating to non yup financial measures and forward looking statements monday would you please remind participants how to enter the que
spk_2: now for your questions asked a question is time please best our one telephone keep if anything you'd like to withdraw from the key please past one again you'll be provided opportunity to ask one question in one source or follow up question will take a moment to render roster i first question consigned eric ramazan front of people please proceed
spk_1: yeah thanks for taking the questions
spk_2: ab just stone starting with the big right five bye in a given that success you've seen so far i need even if certain milestones around a the you mentioned it solar arrays deployment as the is ridiculous power communications has his changed their true get frame by maybe for been able to do up precise orbits of and transportation services well thanks for the question eric
spk_1: out the vigor eg five mission of course of the second mission that we've conducted i'm first one thing last year in may have twenty twenty two the spacecraft the vigor i five spacecraft right now is in low earth orbit
spk_10: again the spacecraft is in good health it is
spk_1: if solar arrays are fully deployed and generating power and nominally were able to charge and discharge the batteries normally the telemetry we're getting back to regular communications and that and the uplink good health the keep your father reply on the civil war was the me coming up soon is that we as i mentioned attitude determination has been unable them work hard pressurization of the fuel system since a lousy to move the water propellant around on the spacecraft's and we've tested our ability to do that the things that are
spk_2: coming soon will be completion of commissioning of the reaction control system first and the reaction control system uses the same water in the same propellant take as the microwave a letter from a thruster and so without rcs we will not only reorient and adjust our attitude is necessary but it's one of the
spk_1: redundancy features that we have been bigger i did it for some reason the microwave watch a thermal thruster should not perform we can maneuver the vehicle using the water based reaction control system to different altitudes and adjust our haram position and space that way
spk_2: now we do plan to test the microwave electro thermal thruster soon and just the coming weeks we expect you out with plan to the test their system we've tested in of course that you know dozens and dozens of times on the earth and conditions that stimulates space and now we're looking forward to this latest
spk_1: the next generation i should say about microwave electro thermal thruster operating in space and and those are the keys to space transportation as you mention having ability maneuver and deliver our customers to a precise custom a lot of it's either through space transportation services or through the kind hosted payload service they were providing to a customer like caltech and we do think that our technology provides a competitive advantage in our ability to services needs particular hosted payloads and there's more opportunity hosted payloads for differentiation and margins expansion
spk_2: great be so it seems like you you know this is just it's an ongoing process it will find out more as in the coming weeks and an obviously with the beagle right i six coming up in april and may maybe just my follow up question the a you settled the class action lawsuit i was it the material drag on the business and the as you continue to scale the business in a in drive efficiencies her how she will be thinking about the quarterly cash burn rate and endure timeframe for achieving a breakeven thank you
spk_1: sure it will be i'll mention a couple thanks and turn over to our cfl dennis on that matter well certainly it's it's something that we're we're paying close attention to as would begin to scale the the business you mention the settlement the class action lawsuit we're we're very pleased to have that behind us it's been pending for a while and while that the settlement provides and near term tash outflow it does allow us to reduce or ongoing legal spending now but that issue is behind this so when i turned to dentist to cover some of the things on the cash outlook ray what thank you john and eric get sad very nice to meet you on this call while of course we do not give forward looking guidance eric or perhaps i can clarify for you are more about our results that we've achieved in progress he made in this in this year just ended on also on it we are absolutely focused on the resource utilization and putting our would behind all right arrows and managing our cash appropriately of we also of course watch our our watched markets and watch opportunities and we will continue to act or opportunistically an odd me we believe we can say with good judgment going forward when when we look at our cat
spk_2: to earn this last year we also see a trend and while we we can't predict what that trend by be in the future and were certainly ablow focused on the goal and or monthly cash burn for the fourth quarter of this year with six point eight million that
spk_11: compares to cast burns in the first half of the year that were between eight and nine million so we had a very good ran i as we completed fiscal year two thousand and twenty two on cash is team will continue to watch it and manage your business tightly
spk_0: course those with monthly figures that dennis provided
spk_12: the understood great thanks to the update as good luck
spk_13: thank you can
spk_2: our next question concerning line of deeded stross from barclays please proceed
spk_1: hi good afternoon at this is josh corn on for forgave it i'm just wanted to ask out of the yeah forward sales pipeline look thanks
spk_2: sure
spk_1: one of the things that we're very pleased about his arm as we generate more flight heritage and as we are get a further in our development cycle where same growing interest from commercial customers as well as our government customers
spk_2: on the pipeline we continuously to customer opportunity bidding about would feel good about the way our service offering aligns with our customers plans to go to market
spk_1: as we mentioned earlier we recently announced and custom orders from repeat customers like foster system as well as new customers like contact and plaza where we're seeing as significant opportunities to grab this this and that were actively pursuing his with the defense department and nasa the feedback were receiving is very encouraging about the capabilities of our big ride or more service vehicle and it's ability to support a range of military intelligence scientific needs and things of that nature epa defense department and nasa some of it discriminate or so the things that we think set us apart and that market is that the vigor i on your service vehicle has lot power relative to our competitors and powers one point of the realm that allow you to support instruments payloads the operations of album of the systems on board so
spk_14: a scrap and ever hosted payload and to do different missions with them secondly are configurations very flexible compared to our competitors are right now we're flying the caltech payload on the gripe five i would say a number of other competitors are not able to fly a payload of that type because of this
spk_1: eyes and configuration of it and to that some second advantage that vigor i provides a third would be the payload hosting capacity a fourth would be our speed the market one of the feedback a pieces were getting a particular from government customers is the speed at which we can produce vehicles that we just produced or third one and
spk_2: under a year and it was a real joy for us all to be outside our headquarters here cheering that the truck as it pulled away way ago the launch site or with that those are some special moments in the space industry and then a last and discriminate or aired are differentiated mention is a we intend to be very competitive on cost and to that
spk_1: computer aggressive so for all those reason i think we're very optimistic about the future and then let's say there's a there's an external changed the government regulators have fought this new fcc rule requiring the deal or but the satellites after five years and into their useful lot of the end of their useful life
spk_0: is a real change in the environment and just to give you a sense of the scale of at according to the government accountability office or g a oh at today about five thousand five hundred satellites are orbit the g o estimates by twenty third over fifty five thousand will be in orbit that's the roughly ten for
spk_2: all the expansion over the next seven years and so what as we begin to think about the need to d or but those satellites consistent with the new fcc iraq and rules that their government counterparts in places like europe are gonna to implement that's going to provide another significant opportunity for a flexible orbital service vehicle like vigor right
spk_1: our next question concerned the line of edison you from two ships please proceed
spk_2: a thanks for taking questions first time i understand it you going to test any t properly to the next few weeks do have some parameters in mind and how you define success it's okay against other success cares are you about that
spk_1: what banks of the question edison the microwave lecture thermal thruster onboard a nigger i five is something that we'll have to test here in the coming weeks as you mention some of the things that will evaluate his
spk_2: the water on board league or ipod once it is moved to the thrust chamber if he will first it's vaporized and then there's a startup sequence that we will help the monitor on evaluate carefully because once that startup sequence begins we can control of her and the duration now that and modify the position of vigor i've five using that the any t and so we'll we'll evaluate it's performance will look very carefully deliberately at the telemetry were receiving an hour and whoa whoa whoa look at term any refinements that we want to offer in the performance of it in so
spk_1: yes it's performance that's the plan now once the image he begins operation we do intend to change the altitude an inclination of ziggurat that's one of the benefits of an orbital service vehicle is your ability to take a satellites to different altitudes from the drop off locations so your customers receive that custom orbit image
spk_15: is going to the general location of being about five hundred kilometers up in space but they're going specifically to where they want to go and to lot like a container ship it being the equivalent to the launch vehicle on earth
spk_16: the takes a series of cargo payloads to the port but that cargo needs to be redistributed elsewhere and that's that's the role we intend to play and are playing ah then secondly on the are inclination change that allows you to modify the ordinance so that time you can go to a more precise location that it's
spk_1: optimize for customers' needs depending on whether it's a communications mission and or a remote sensing mission or whatever they're out the particular customer pilots are so what do those things using the that our plan anyways to do those thanks to the any t in the coming weeks
spk_2: understood separately under a bigger i'd seven the reusable one how comfortable are you with the tech upgrades that are needed to to do this and also you mentioned your certificate savings get the sense of of how much you know we're talking about here in terms of the with the cost
spk_1: but vigor and seven is currently being assembled in our cleaner and here we're we're doing this call from themselves a california dumb vigor i'd seven or be assembled over the coming weeks and were complete testing of it at the right just to clarify edison and nigger and seven is up walk to point to vehicle which is the same configuration which is expendable as vigor at five in orbit now and they griped six that is our integrated for launch next month now have a reasonable bigger i'd is part of our future our product roadmap and the first demonstration of some of those key technologies needed for a reasonable version will be unfair great saboteur with the remote proximity operations or r p o ah projects we do think it's it's very important eventually develop developer reusable decried vehicle as this has the potential to reduce or two largest costs times which are manufacturing costs and launch costs while also allowing his dad new revenue stream such as in orbit refuelling maintenance and york thing in terms of on you know rule of thumb to assess the magnitude of the cost reduction the intent is for the reusable are you might call it and refuel big arrive to stay in space so it would go to space on launch vehicle delivered customers are supposed to cook support hosted payloads or do in space servicing and then stay there
spk_16: who can on a subsequent launch vehicle replenishment few all or additional payloads would be delivered and vigor vigor i'd the reasonable version in the future could then we feel itself take the payloads and continue onward the planet to do this a few times and sophie think about the cost to produce one leg arrived
spk_2: and one launch in useful to support one set of missions if he can do that for two three four five missions you can see the extent the outward commensurate reduction in launch got it's not exactly a one hundred percent reduction because after all you have to send up new fuel and of pay
spk_1: a lot but you'd be much much more efficient i not i'm launching the mass of the vehicle itself but rather just a fuel and the additional pylons thanks i get just seek one more and i think the last earnings call your nations your bidding or are going after some some government contracts defense contracts do we have any updates on he prospects out of those and yes thanks for the good question
spk_2: we are focusing on government business and particular with the defense department that we are are pursuing the i'm interested were receiving has has been very rewarding the lisa government organizations are actively and engaging with as they are our comments
spk_0: thing about an a number the ways that they see our our platform our capabilities being differentiated in there are around and they liked the flexibility of the platform that we have the power that's available the speed at which we can produce the vehicles and the cost to win were an active dialogue
spk_17: anna with defense department organizations like other space force sta darpa and we're also talking a nasa and to pursue additional business is so we're optimistic about those as you know these are as long cycle business with the government and and so we don't have any contracts to announced today however i'm at work we're optimistic about the future in that area
spk_2: i give
spk_1: our next question comes from the line of genes practice from everything i as i please proceed
spk_2: i basically question ah knows that spacex recently raised the right share prices and what does that mean for you directly particularly in regards to or the be aggregation business
spk_1: ah i'm and how how protected if it all are you against was increases and in regards to the bigger picture of what's your view on you overall trends in cost to orbit ah now versus ratings were looking for a year ago and oh thanks for the question james
spk_2: we currently have a large service agreements signed with spacex that will that cover our launches in the planned and twenty twenty three and the first one plant and twenty twenty four out his dead currently targeted for january twenty twenty four and so on those those missions where we already have assigned a month services occurring contract our our prices there will not be affected by the increase prices that spacex recently announced after those contracts though we would like others in the market ah be subject to the increased our pricing that spacex has has introduced
spk_1: those that new pricing structure which is really meant to also come with a new interface for ride sharing missions
spk_2: our is designed to provide increased flexibility to spacex customers
spk_1: we maintain a very close dialogue spacex
spk_18: the and i will say once those new cause come into play know our our costs permission will be higher under that new framework
spk_1: however that will be unique to us it'll also affect our competitors who are also fly on spacex and certainly once the starship is introduced to the market by spacex and course they're they're saying that their plan to launch starship this year at a much larger lock it a reddish understatement they are substantially larger of course that well as significantly reduce the per pound or port kilogram cost place things in orbit
spk_2: and the other thing i'd say as we're seeing other competitors to stay sir x begin to and mature their rockets and relativity friend senses are talking about are conducting their are is planning to conduct their their first launch here shortly and we have seen other a new systems be tested
spk_1: you know it reminds us all of the difficulty in doing that he probably saw the news about japan or the japanese space agency
spk_19: i am the unfortunate failure of the aged three launch here in the last twenty four hours from tonic is sheila
spk_0: i'm in always seen other examples of that with our aeons us and they their recent vega failure be l and virgin orbit so there it just reminds us how difficult space can be but as those new systems come online and we see more competition and more capacity including from starship
spk_20: we think we're going to see launch costs begin to ah
spk_2: have price possibly checked into come down
spk_1: so that you know that this is one of the things that there's a lot of demand for existing launch vehicle capacity in the industry and and so i think is is there more up to his go space at our customers will also benefit i can't thanks for the question
spk_2: a final question concerning line of michael matheson from singular research please proceed
spk_1: good evening gentlemen just coming back to some of this financial our figures are that we work with you mention the your order backlog stands at thirty three million as a quarter and and the committed portion of that is consistent with pinter periods president camp touristic you
spk_2: i'm do discloses figure for the committed amount
spk_20: i'm how we we we we have not been disclosing that breakdown
spk_1: i'm michael body the backlog it the at year and cemetery first is very three million dollars and the key take away would be that are the fix component of them because
spk_9: dollars
spk_21: from a from orders as well as options and the from component of that has remained steady from previous quarter when we are announced that the declining recent backlog was do the expiration of some options the way we signed contracts with our customers as will
spk_0: wow them sign options in some cases if they wish to for future contracts and obviously that's an advantage for us to potentially game featuring business and so on number those options had expired

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