Terran Orbital facility in Irvine, California. Photo: Terran Orbital

Terran Orbital reported record revenue of $32.2 million in the second quarter of 2023, a 51% increase over the same period in the prior year, and is targeting an even steeper ramp-up in revenue during the second half of the year.

The company reported second quarter 2023 results on Tuesday, reaffirming its target to hit $250 million in revenue this year. That puts a steep revenue requirement on the second half of the year — Terran Orbital has recognized just $60.4 million in revenue so far this year. 

The company narrowed its net loss in the second quarter — net loss for the second quarter was $28.1 million compared to a net loss of $32.3 million for the same period in the prior year. 

As of June 30, Terran Orbital had approximately $48.6 million in cash on hand and approximately $311.4 million in gross debt obligations. 

The company had more than $2.6 billion of backlog, as of June 30 2023, and estimates approximately 80% of this revenue will be recognized by the end of 2025. 

The backlog is made up of about 30 programs and 370 satellites total. The backlog includes a 300-satellite, $2.4 billion deal to build Rivada Space Networks Low-Earth Orbit (LEO) constellation and satellite builds for Lockheed Martin for the Space Development Agency. 

CEO Marc Bell said the development phase of the Rivada contract is ramping up and the contract is on schedule. Rivada remains current on all payments. There are “material” milestone payments expected in the second half of this year, Bell said. 

Rivada is privately funded and does not disclose its funding sources. As one Terran Orbital investor pointed out on the call, this situation leads to some “investor hesitation” around the contract. 

Bell reiterated Terran Orbital’s confidence in Rivada as a customer. “We’ve done extreme due diligence on their financials, both with ourselves and our attorneys. We feel confident. We can’t disclose the information we know, but we are very much aware of who their funding is, and how much it’s for, and where it’s coming from,” Bell said. “The provider has asked us that any questions about their funding be directed to them, but we can tell you that we are confident about their ability to fund.”

Rivada has stressed it is a private company and does not have to reveal its financing sources. “There are advantages to being a wholly privately owned company, one of them is not having to tell your competitors your business until the timing suits you,” Rivada CEO Declan Ganley recently tweeted. 

In terms of the SDA subcontract with Lockheed Martin, Bell said Terran Orbital is on track to begin delivering the first batch of Transport Layer Tranche 1 satellites this year. Terran Orbital is subcontracted for 42 satellites total, and Bell said the remaining satellites will be delivered by the end of 2024, bringing in approximately $65 million in cash. 

Last quarter, analysts had concerns about Terran Orbital’s declining cash reserves. During the second quarter, the company sold a registered direct offering to raise $37 million. 

CFO Gary Hobart said Tuesday the company expects to be free cash flow positive by the beginning or during 2024. “The cash flow we generate from our programs and invoicing should cover our needs going forward, and we’ll start seeing that ramp up even more so going into 2024,” he said.