Terran Orbital CEO Marc Bell in an investor town hall event on Oct. 26.

Terran Orbital held a town hall on Thursday to increase investor confidence in an attempt to raise the share price. Over an hour-long call, CEO and Chairman Marc Bell took questions to assuage concerns that the company’s business is too concentrated with customers Lockheed Martin and Rivada Space Networks. The town hall event was in advance of its third quarter update, after getting a notice from the New York Stock Exchange that its stock is at risk of being delisted, and a public letter of discontent from a group of minority shareholders. 

The company has been criticized for having a customer base overly concentrated by Lockheed Martin and Rivada Space Networks. Terran Orbital has a strategic investment from Lockheed Martin and supports as a subcontract on programs for the Space Development Agency (SDA), and a large portion of its backlog is attributed to the $2.4 billion Rivada constellation order. 

Rivada’s milestone payment is delayed, Bell said Thursday. As a result of this, Terran Orbital will revise revenue guidance for the full year in its upcoming third quarter results call. However, Terran Orbital still expects to receive $180 million from Rivada over the remainder of this year.

In the half-year update, Terran orbital had recognized $60 million in revenue so far in 2023 and expected full-year revenue of $250 million. 

“Due in part to delays on the [Rivada] program and other key awards, we expect to revise revenue guidance to be lower than the $250 million established earlier this year, but we anticipate it will still reflect the material increase over last year’s revenues,” Bell said. 

Rivada has kept its funding sources private as it is a private company, which has led to concern from investors. Bell said that so far, Rivada’s funding comes from a “large sovereign that has not yet publicly announced their support for the project.” He said Rivada has paid Terran Orbital $5 million to date and the contract is structured so Terran Orbital is paid in advance of work being performed. 

Bell assured investors the company is sufficiently funded to reach positive EBITDA and free cash-flow positive in 2024 without an additional offering. 

He said Terran is working to broaden its customer base domestically and globally. The company has had “meaningful” discussions with nearly all of the top, non-Chinese global defense primes about working together. The company is currently working approximately 80 opportunities for more than 2,800 satellite buses for approximately 40 different customers valued at over $2.7 billion, he said. 

“We are positioning ourselves as a merchant bus supplier to all defense primes, commercial and civil customers and multiple different parts within the U.S. military,” Bell said. “We are not just a subcontractor. Of submitted bids for U.S. government work, we are bidding as a prime contract on more than 40% of our outstanding bids [for] satellite buses.”

The company announced more than $160 million in new awards this week, including a $4.7 million prime contract from the European Space Agency, $7.7 million from Lockheed Martin on an existing program, and it was confirmed as the subcontractor to build the buses for Lockheed’s Tranche 2 Transport Layer – Beta satellites for the SDA. Bell said Terran is not allowed to disclose the value of the subcontract. 

However, when asked why Lockheed Martin hasn’t acquired Terran Orbital, he said he believes both Lockheed Martin and Terran Orbital benefit from the company’s independence. 

“Congress is always looking to break the stranglehold on the primes, but by partnering with them, it’s the best of ‘old space’ and ‘new space,’” Bell said. “All the knowledge and education of the world’s largest defense contractor, coupled with the entrepreneurialism and responsiveness of a small company. We have much lower overhead, which makes us much more competitive.” 

Thursday’s call came after the company received notice from the New York Stock Exchange that its stock is at risk of being delisted if it cannot raise the average share price over $1. Terran Orbital will enter into a six-month “cure period” to regain compliance with share price rules.

Bell said Thursday the notice wasn’t a surprise, and Terran Orbital must perform and increase investor confidence to regain compliance. 

Terran Orbital went public in March 2022 through a special purpose acquisition (SPAC) merger. Bell said that the SPAC was a “dumb idea” and he would never do it again. He mentioned the Securities and Exchange Commission (SEC) changing some rules related to SPACs, and advised other companies to use a traditional public offering. 

Earlier this month, a group of minority shareholders holding 8.4% of Terran Orbital’s shares sent a letter to the board of directors with recommendations to raise the company’s share price. This includes separating the role of CEO and chairman and installing a new CEO; Bell currently holds both positions. The group also suggested reconstituting the board. 

Terran Orbital’s independent directors issued a letter in response, outlining their “continued and unqualified support for Marc and the company’s entire management team.” Independent director Stratton Sclavos appeared on Thursday’s call and reiterated his support for Bell.