Intuitive Machines, Inc. (LUNR)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $62.5M, up 14% sequentially vs. Q4 2024; gross profit expanded to $6.7M with 11% gross margin, marking a third consecutive quarter of positive gross margin .
• Positive operating cash flow ($19.4M) and free cash flow ($13.3M) were driven by milestone timing and margin expansion; cash ended at $373.3M after warrant redemptions; backlog decreased to $272.3M as the company executed awarded contracts .
• Guidance maintained: FY 2025 revenue $250–$300M and positive run-rate adjusted EBITDA by Q4 2025; positive adjusted EBITDA in 2026 .
• Strategic progress in LTVS, NSNS, and CLPS; IM-2 landed at the lunar south pole but ended early due to a landing anomaly—management detailed corrective actions for IM-3 and expects IM-2 success payment closeouts primarily in Q2 .
• Street consensus (S&P Global) was unavailable for LUNR this quarter, so beat/miss vs. estimates cannot be determined; we anchor comparisons to company guidance and prior periods (Values from S&P Global were unavailable).

What Went Well and What Went Wrong

What Went Well

• Sequential growth with margin improvement: “Q1 revenue was $62.5M, up 14% over Q4 2024… Gross profit was $6.7M… third consecutive quarter of positive gross margins.” .
• Cash generation and liquidity: “Operating cash generated $19.4M… resulting in positive free cash flow of $13.3M… Cash balance increased to $373.3M… no outstanding $11.50 strike price warrants” .
• Strategic execution across programs: Completed LTVS PDR incorporating astronaut feedback, autonomous driving integration, and a 1/6g simulator ahead of the draft RFP timeline .

What Went Wrong

• IM-2 mission ended early due to landing anomalies (altimeter interference, terrain/lighting, crater recognition tuning), requiring additional sensors and algorithm updates for IM-3; management cites slight cost increases but no schedule impact .
• Backlog decreased to $272.3M from $328.3M as the company executed previously awarded work; recognition in 2025 expected at 45–50% of Q1 backlog .
• Adjusted EBITDA remained negative at $(6.6)M, albeit improving vs. Q4; SG&A rose sequentially due to annual incentive and stock comp timing .

Financial Results

Core P&L vs. Prior Periods

Note: EPS and consensus estimates were unavailable from S&P Global this quarter (Values from S&P Global were unavailable).

Program Contribution (Q1 2025)

Discrepancy note: Press release referenced two NSNS milestones totaling $9M executed in Q1, while CFO indicated $3M recognized as revenue in Q1 .

KPIs and Balance Sheet Trajectory

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Financially, we remain strong with sequential revenue growth, positive free cash flow for the first time in the company’s history and moving steadily towards EBITDA profitability.” — Steve Altemus .
• “With access to over $400 million in capital, coupled with no debt and improving profitability, we continue to believe we have more than sufficient capital to fund our current operations.” — Pete McGrath .
• “We must learn fast, fix what needs fixing and move forward smarter. IM-2 gave us data that nobody else has… applying those lessons directly to IM-3, which remains on schedule.” — Steve Altemus .
• “The Lunar Data satellite constellation… designed to provide secure and continuous connectivity… while driving higher-margin recurring revenue streams.” — Steve Altemus .

Q&A Highlights

• NASA budget/CLPS: Management does not see a direct impact to CLPS budget; two procurements expected in H2 with one in July (CS6) .
• LTVS timeline and launch vehicle: Proposals due late July; award targeted November; Nova-D/LTV flies on Falcon Heavy—no SLS dependency .
• IM-2 success payments: ~$14M constrained revenue; about half expected to close Q2, possibly into Q3 .
• NSNS competitive landscape: International efforts are currently collaborative with focus on standards/interoperability; room for successes to “raise all boats” .
• Free cash flow outlook: Positive Q1 driven by milestone timing; remains lumpy through 2025; consistency targeted in 2026 .

Estimates Context

• Wall Street consensus (S&P Global) for Q1 2025 revenue and EPS was unavailable for LUNR; therefore, we cannot assess beats/misses vs. Street. We benchmarked performance vs. guidance and prior periods (Values from S&P Global were unavailable).

Key Takeaways for Investors

• Margin trajectory is improving with three consecutive quarters of positive gross margins and Q1 gross margin at 11%—watch for continued mix shift toward higher-margin NSNS services .
• Near-term catalysts: IM-2 success payment closeouts (~half of ~$14M targeted for Q2), NSNS Task Order execution ($18M added in Q2), and LTVS Phase 2 proposal/award timeline (July/November) .
• Liquidity “war chest” (>$370M cash, no debt, undrawn $40M facility) provides optionality for M&A and internal investments; management reiterated opportunistic posture .
• Backlog conversion is driving revenue while backlog declined as expected; management expects 45–50% of Q1 backlog recognized in 2025—monitor award flow in 2H25/1H26 (CLPS, LTVS, JETSON) .
• IM-3 risk mitigation underway (redundant altimeters, lighting-independent sensors, ML enhancements); slight cost increases but no schedule impact per management .
• NSNS verification-to-operations pathway supports recurring revenue profile (Globalstar/Iridium-like model per CFO); capex for satellite and ground network offset by higher margin services over time .
• Trading implications: In absence of Street estimates, investors should focus on milestone execution (IM-2 closeouts, NSNS tasks), margin progression, and award cadence as key stock narrative drivers .