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Intuitive Machines, Inc. (LUNR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $50.3M, up 21% YoY but down sequentially due to a strategic Estimate-at-Completion adjustment shifting IM-3 revenue and costs into 2026; adjusted EBITDA was -$25.4M and gross margin was -$11.8M .
  • Guidance now points to revenue near the low end of the prior $250–$300M range, with potential to reach near the prior midpoint ($275M) on late-year awards; positive adjusted EBITDA remains targeted for 2026 .
  • Balance sheet strengthened: ended Q2 debt-free with $344.9M cash; contracted backlog was $256.9M (recognition weighted to 2026) .
  • Strategic moves: in-house satellite manufacturing for NSNS, facility expansion, and a $30M definitive agreement to acquire KinetX (deep-space navigation/software), expected to enhance data services and national security positioning .
  • Near-term catalysts: LTVS award (demonstration scope $1B), OSAM-1 potential shift to Space Force, NSNS task orders, IM-2 success payments ($5.7M expected in Q3), and OTV Phase II definitization ($9.8M) .

What Went Well and What Went Wrong

  • What Went Well

    • Vertical integration of satellite manufacturing and KinetX acquisition aim to reduce cost, retain IP, and accelerate NSNS execution; “We’ve executed decisively... brought satellite manufacturing in-house... moved to acquire KinetX” .
    • Strong liquidity: ended Q2 debt-free with $344.9M cash; management reiterated sufficient capital for operations and strategic M&A in data and national security space .
    • Program momentum and pipeline breadth (LTVS, OSAM, NSNS, JETSON, reentry): “We are positioned for multiple business catalysts... and intend to remain aggressive in the marketplace” .

  • What Went Wrong

    • IM-3 EAC adjustment reduced Q2 revenue by $10.1M and increased costs by $9.7M (total earnings reduction $19.8M), driving negative gross margin and operating loss .
    • Backlog declined to $256.9M from $272.3M in Q1 and $328.3M at year-end as performance outpaced new awards; recognition profile skews to 2026 (40–45%) .
    • Profitability timeline: management guided away from prior run-rate EBITDA positive by year-end; now expects adjusted EBITDA positive in 2026 (Q&A confirmed no Q4 2025 EBITDA positive) .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$41.641 $54.662 $62.524 $50.313
Net Income attributable to Class A shareholders ($USD Millions)$18.534 $(149.343) $(11.543) $(25.332)
Adjusted EBITDA ($USD Millions)$(25.108) $(11.239) $(6.610) $(25.368)
Gross Margin ($USD Millions)$(16.1) $0.7 $6.7 $(11.8)

Program Mix and Items (where disclosed)

ItemQ4 2024Q1 2025Q2 2025
OMES/OSAM-related revenue ($USD Millions)—$21.7 $19.6
NSNS revenue recognized ($USD Millions)—$3.0 —
IM-3 EAC revenue impact ($USD Millions)——$(10.1)

Key KPIs

KPIQ4 2024Q1 2025Q2 2025
Backlog ($USD Millions)$328.345 $272.336 $256.909
Cash & Equivalents ($USD Millions)$207.607 $373.253 $344.901
Operating Cash Flow ($USD Millions)$(57.587) FY 2024 $19.419 $0.156 (H1)
Capital Expenditures ($USD Millions)$10.111 FY 2024 $6.122 $14.176 (H1)
Free Cash Flow ($USD Millions)$(67.698) FY 2024 $13.297 $(14.020) (H1)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$250–$300M “Near the low-end,” with opportunities to reach near prior midpoint ($275M) Lowered bias vs prior range
Adjusted EBITDAFY 2025 / FY 2026Run-rate positive by end-2025; positive in 2026 Continue to expect positive adjusted EBITDA in 2026; no Q4 2025 EBITDA positive Timing clarified to 2026
Backlog RecognitionAs of Q1/Q2 202545–50% in 2025; 25–30% in 2026 (Q1) 30–35% in 2025; 40–45% in 2026; remainder thereafter (Q2) Shifted more to 2026
CapEx Direction2025–2026Investment for first data relay satellite Continued CapEx for 5-satellite lunar constellation and ground network; cost offset by higher-margin follow-on task orders Reinforced upward bias tied to NSNS

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Data services/NSNSNSN awards; service model framing $3M milestone recognized; Task Order 2 ($18M) issued; satellite/ground architecture described Vertical integration of satellite manufacturing; align IM-3 schedule; commercialization of DSN sites; per-minute task orders expected post initial assets Accelerating buildout and commercialization
National Security Space (OSAM/OTV/JETSON)OSAM progress; diversification OTV Phase II letter contract; expectation to finalize; JETSON Phase 1 progressing OSAM may shift to Space Force; OTV Phase II definitized ($9.8M); stealth satellite demo interest (ISS) Increasing defense orientation
LTVS (moon mobility)Highlighted as strategic; PDR underway PDR completed; autonomy features; simulator; draft RFP and timing Management views LTVS as most transformative; demo mission near ~$1B; award late Q4 2025 Priority program; potential large award
Earth ReentryNoted as emerging capability $10M TSC grant; precision soft touchdown concept; biopharma/semiconductor customers Team formed; milestones completed; partnership expansion; commercial pathway discussed Advancing toward commercialization
M&ACapital raise and intent Opportunistic for capabilities SPA to acquire KinetX ($30M); trailing ~$9.8M revenue, ~14% EBITDA margin; focus on software/satellites/data Executing capability-focused deals
Vertical Integration & Supply ChainGeneral efficiency aims Emphasis on internal assets build Rationale to meet cislunar performance (delta-V, power), supply constraints; cost-effective vs external buses Strategic insourcing for schedule/cost/IP

Management Commentary

  • “Our long term vision is to become a new space prime contractor providing communications, navigation and control services for defense, civil and commercial markets.”
  • “To execute the NSNS vision... we made the strategic decision to vertically integrate satellite production... allowing us to align the IM-3 mission with satellite readiness.”
  • “We will continue to remain opportunistic on further strategic M&A... particularly in data services and National Security Space markets.”
  • CFO: “The result of the EAC adjustments was a reduction of $10.1M to revenue and a cost increase of $9.7M for a total earnings reduction of $19.8M in the quarter.”
  • CFO: “We ended Q2 with a cash balance of $344.9M and... more than sufficient capital to fund our current operations... and M&A.”

Q&A Highlights

  • KinetX acquisition: trailing 2024 revenue ~$9.8M with ~14% EBITDA margin; deep-space navigation/software synergy enhances constellation design and operations .
  • Vertical integration: initial ~$5M NRE; recurring satellite costs expected at/below market; decision driven by cislunar performance needs and supply chain limitations .
  • LTVS: management views it as “most transformative” award; demo scope near ~$1B; NASA considering awarding a second vendor through CDR option .
  • Profitability timeline: management clarified adjusted EBITDA positive shifts to 2026; no Q4 2025 EBITDA positive .
  • Backlog adds expected from CLPS, OSAM (if shifted to Space Force), LTV, JETSON, Mars Relay proposals; specifics not yet defined .

Estimates Context

  • S&P Global consensus estimates for Q2 2025 (EPS, revenue, EBITDA, target price, recommendation) were unavailable for LUNR at the time of this analysis; therefore, no vs-consensus comparison could be made. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • The quarter’s strategic EAC shift materially reduced reported revenue/profitability but aligns IM-3 with NSNS satellites, reinforcing the service-based model and long-term margin profile .
  • Liquidity and capital flexibility remain strong (debt-free; $344.9M cash), enabling continued internal investment and M&A in data/national security domains—key for moat expansion around NSNS .
  • Backlog recognition is increasingly 2026-weighted; near-term revenue trajectory hinges on late-2025 awards (LTVS, CLPS, additional NSNS task orders) and IM-2 success payments in Q3 .
  • KinetX acquisition is strategically accretive to deep-space navigation/software; expect operational synergies across satellite constellation management and national security programs .
  • Watch for NSNS asset deployment milestones and DSN commercialization decisions—each can trigger operational task orders and higher-margin service revenue inflection .
  • Trading lens: guidance tilting to low end and profitability pushed to 2026 can be near-term headwinds; catalysts (LTVS award, OSAM/Space Force decision, NSNS milestones) are potential positive inflections.
  • Medium-term thesis: vertical integration + data transmission/services (recurring, higher-margin) positions LUNR to evolve from mission-based revenue to infrastructure prime economics .

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