Conference Transcript - FLY 2026-03-19

Speaker 2

Greetings and welcome to the Firefly Aerospace 4th Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal remarks. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please note this conference is being recorded. I would now like to turn the conference over to Michael Sheets, Firefly's Director of Investor Relations. Michael, you may begin.

Speaker 8

Thank you, Operator. Hello there. I'm Michael Sheets, and welcome to Firefly's fourth quarter financial results call. I'm pleased to be joined on the call by CEO Jason Kim and CFO Darren Ma as we report for the period ending December 31, 2025. Today's call will include forward-looking statements, including but not limited to statements the company will make about its future financial and operating performance, growth strategy, and market outlook. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause the actual results and trends to differ materially are set forth in the annual and quarterly reports filed with the SEC. Firefly assumes no obligation to update any forward-looking statements, which speak only as of their respective dates. Also, in this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in the fourth quarter 2025 earnings release. Unless otherwise stated, financial information referenced in this call will be non-GAAP. Our earnings press release, SEC filings, and a replay of today's call can be found on our Investor Relations website at investors.fireflyspace.com. Now, I'll turn the call over to Jason.

Speaker 7

Thank you, Michael, and welcome to our fourth quarter and year-end 2025 earnings call. We're coming off a transformative year in Firefly's history, when we more than doubled our annual revenue to a record $160 million. We pulled off the first and only successful commercial moon landing, completed a historic IPO that strengthened our balance sheet for long-term growth, and acquired SciTech, further bolstering our national security contributions alongside defense contract wins for our Electra Orbiter and Alpha vehicle. We've entered a new era as an end-to-end space services business, executing on all these milestones as we begin just our ninth year as a company. Firefly is a space and defense company delivering innovative hardware and software to perform the hardest missions in space for national security exploration and commercial technology lighting the way to a bold space ecosystem that expands humanity's future our hardware is represented by four revenue generating products our small lift alpha rocket medium lift eclipse rocket blue ghost lander and electro satellite orbiter now with sci-tech on board Firefly's capabilities include AI-enabled defense software proven in operations such as missile warning and defense. The industry tailwinds behind artificial intelligence and data centers are fueling operational realities for SciTech, which is delivering crucial no-fail systems in support of national security. We are meeting the U.S. government's call for for commercial investment and scale in the defense sector. We are further developing our advanced technology products and funding infrastructure upgrades, the expansion of Firefly spacecraft and rocket factories, as well as SciTech's data service centers and classified facilities. Late last year, we brought on Ramon Sanchez as Chief Operating Officer to drive our production scaling and operational execution as we enhance safety, quality and reliability across our product lines. Firefly's product suite is strategically tailored to support the growing opportunities in the space sector. In particular, the renewed interest in the Moon as a top priority is an outstanding confirmation of Firefly's market position, verified by the success of BlueGhost Mission 1 and accelerated with our contracts for Missions 2, 3, and 4. We applaud NASA Administrator Jared Isaacman's decision to ramp up Artemis missions. The agency recognizes that Firefly's lunar missions, quote, offer a unique opportunity to test and refine technologies and integrate systems that will provide insight for future crewed missions. Administrator Isaacman's recent call for a monthly cadence of lunar landers to the Moon South Pole starting next year is exactly the type of forward thinking that Firefly embraces. Given the scale of the lunar opportunity, last year, Firefly began studying how we can scale our flight-proven technology into larger lander designs. Additionally, we've made progress on expanding our spacecraft clean room this year, thanks to funding from the Texas Space Commission to build multiple landers simultaneously. I also thank the industry for its celebration of Blue Ghost Mission One, which has won a steadily growing list of prestigious awards. To highlight a few, BGM One was awarded the Robert J. Collier Trophy, the Jackson Aerospace Memorial, and Time's Best Inventions of 2025. These are not trophies for us to rest on our laurels, but instead recognize the hard work and achievement of our world-class talent and serve as inspiration for the work ahead of us with increasingly ambitious future moon missions together with scitech firefly onboarded to the missile defense agency's scalable homeland innovative enterprise layer defense or shield contract which has a ceiling of 151 billion dollars over 10 years as the department of war pushes industry to deliver commercial speed and scale the shield contract allows pentagon entities to rapidly compete orders under a single contract mechanism with an emphasis on leveraging ai and machine learning capabilities that we're ramping up further shield provides a key support mechanism for golden dome which we're ready to serve through our comprehensive end-to-end capabilities as a reminder there are multiple golden dome elements that we can support such as launching surrogate targets and hypersonic tests with our alpha rocket or integrating data processing from a global network of sensors to perform fire control with sci-tech now turning to our business updates in the fourth quarter despite the 43-day federal government shutdown we completed new milestones across each of our revenue generating products and services let's start with launch on march 11th we successfully launched alpha's seventh flight to orbit this mission was a journey that started last year when i stood up a dedicated reliability team within firefly we analyzed vulnerabilities improved processes we added new launch aborts reinforced contamination control and implemented additional trainings. When we shipped Alpha's first stage, our team was deliberately cautious. Anything we found was thoroughly investigated. After delivering the vehicle to Vandenberg, the Alpha team worked diligently through static fire testing. I was there with the team while we went through two days of static fire attempts. We worked through multiple aborts and on the second day, executed a clean 20-second static fire test. The team was calm, cool, and collected throughout the process, fully committed to methodically executing every step. When we stepped into launch attempts, that intense rigor continued. While scrubs can be frustrating, I'm proud of the team for pausing whenever they needed to take a closer look at potential hazards. And come launch day, the team was collaborating and listening to each other. I was standing in the launch control center when Alpha took off, launching right at the first moment of the window. I watched our data flow through during flight with the variance bar of our trajectory to orbit showing we were dead center on target all the way up as we smoothly went through every part of launch before payload deployment approximately 45 minutes later we also did a second stage relight as part of the flight further verifying alpha's upper stage performance we completed all mission objectives deploying a test demonstration for lockheed martin as anyone in this business would know our team didn't celebrate stairway to seven until after deployment most of all that moment was a really satisfying feeling of pride given the team's accomplishments and execution flight 7 strengthened our muscle memory giving us the reps we need to launch at cadence additionally we validated key subsystems for block 2 which will lead to improvements starting with flight 8 including greater mass savings optimized production and increased reliability across the entire Alpha vehicle. Block 2 is designed to expand Alpha's deployable launch capabilities for critical responsive space missions such as hypersonic testing, national security missions including Golden Dome, and commercial satellite launches for domestic and international customers. Speaking of the international market, Firefly is taking a phased approach to launching and operating from other allied countries by utilizing a launch as a franchise model in this model firefly works closely with a strategic international partner to operate our alpha rocket from their launch site and meet the growing demand of the satellite market across the globe while adding resiliency for our nation and allies for example firefly partnered with the sweda space corporation to launch alpha from s range space center in karina sweden in collaboration with ssc we're building on the existing infrastructure s range to develop a launch complex for alpha and enable orgo launch capabilities from mainline europe we're evaluating a similar arrangement with space katan to potentially launch alpha from the haikido spaceport in japan these co-launch partnerships become a force multiplier and a win-win-win for the u.s our allies and industry back at our rocket factory we passed acceptance testing of the qualification article for the alpha flight 8 second stage liquid oxygen tank in preparation for the debut of the upgraded block 2. simultaneously we're progressing on extensive ground equipment upgrades on the alpha stage test stand as we prepare to validate block 2 upgrades ahead of its debut. We've worked closely with our domestic and international customers to incorporate data and lessons learned across our previous Alpha flights. Block 2 comes with significant improvements across Alpha, including increased length and structural strength, consolidated in-house batteries and avionics, and optimized propellant tanks. We're thoroughly reviewing the data from Flight 7 as we prepare for the debut of Alpha Block 2 with the launch of Flight 8. We expect to launch another three times this year for a total of four Alpha launches in 2026. Moving to Eclipse, everything we've learned from Alpha is scaled to our reusable medium lift vehicle, including the tap-off cycle engines and carbon composite structures, a key differentiator versus traditional requirements to start a new vehicle development from scratch. We've found efficiencies through our automated fiber placement machine, which is versatile in building carbon composite structures at rate across all our rockets and spacecraft. The AFP improves quality, cycle times, and safety of our structures, a benefit we've seen since debuting the machine in late 2023. All of the major flight articles for our first Eclipse vehicle are in-build and test, with Eclipse's Miranda engine having crossed more than 100 hot-fire tests and the team now preparing to enter our qualification campaign. In anticipation, we've begun assembling multiple Miranda flight engines. Additionally, we've completed qualification of the Eclipse Interstage, a critical primary structure milestone as we assemble the first flight vehicle. We also completed qualification testing of the liquid oxygen transfer line for the first stage of the Eclipse, putting the assembly through a rigorous campaign on our test stand as we prepare to integrate the line with the vehicle. This line feeds locks through our propellant tank to our Miranda engines, and during flight, The LTL feeds locks to the engines at a rate that would fill 300 bathtubs per minute. We are progressing through assembly and integration for the Eclipse program, with the target to ship the first stage to North Gremmen, our vehicle co-developer, later this year. With a full variation of Eclipse, utilizing both a first stage and a second stage built by Firefly, we are targeting first launch no earlier than 2027. In less than a decade, Firefly has valuable orbital flight heritage that scales to our medium-width vehicle, which is a testament to our team of experts who have the lessons learned and passion to execute on these bold missions. Shifting to spacecraft, which includes SciTech, we're simultaneously building multiple landers and orbiters, as well as advancing our AI data center systems, supporting the future Operationally Resilient Ground Evolution Program, also known as FORGE, starting with SCITEC. In September 2025, the United States Space Force operationally accepted SCITEC's FORGE modernized AI-enabled space exploitation architecture, delivering a transformational lead-in capabilities across missile warning and tracking, missile defense, battle space awareness, and technical intelligence. As a reminder, FORGE is an advanced and operational defense program for the United States that serves as the brains of our nation's multi-orbit missile warning and tracking architecture. DITEC rapidly processes vast amounts of data in satellites across all orbits, from LEO to MEO to GEO, to deliver high-quality mission-critical information to our warfighter to defend against missile threat. In the first days of the Iran conflict, the Space Force's 11th Space Warning Squadron used force to provide real-time data informing defensive operations against over 1,000 threat events. As a veteran, I thank America's service members as well as those of our allies who are defending our nation. teams are providing continuous support to the 11th Space Warning Squadron's critical 24-7-365 mission as part of the defensive systems involved in this operation. We are rapidly integrating unique operational lessons into new FORGE generation during what is the most extensive missile engagement in history. FORGE is ensuring the single most capable tool for missile warning, tracking, and defense in the world remains ahead of the threat. In the fourth quarter, our team won an eight-figure contract from a confidential U.S. customer to deliver time-dominant space control software with potential for significant upside contract expansion. Additionally, in the fourth quarter, SciTech completed the interim ground readiness review with the Space Development Agency for SciTech's role delivering the mission management and data fusion ground components for the proliferated warfighter space architecture satellite constellation tranche one tracking layer the sci-tech team was also awarded a 109 million dollar engineering change proposal under the space force's forge enterprise opir services contract to accelerate and expand data center delivery which increased the total contract value from $263 million to $372 million. SciTech's leading work on multiple elements of FORGE is exemplary, as the team reached operational acceptance of FORGE for threat missile warning in September, marking the first time in 50 years that the U.S. government changed the prime contractor for missile warning ground systems. Furthermore, Cytec's on-orbit processing heritage, data center capabilities, and AI-enabled applications positions Firefly with the differentiated software layer that is hosted on the physical layer, neither for space data centers. Moving to Blue Ghost, we completed structural qualification testing on the fully stacked Blue Ghost Mission 2 lander and electro-orbiter at NASA's Jet Propulsion Laboratory during the fourth quarter. We also completed the Payload Integration Uranus review for BGM-2, accepting delivery of NASA's Lucy Knight and commercial payloads, including the UAE's Mohammed bin Rashid Space Center's Rashid Rover 2. We have Critical Blue Ghosts Mission 2 hardware coming together, progressing through structural integration of the lander and the electric transfer repole. We're marching onwards towards launching our next moon mission, with windows opening no earlier than late in the fourth quarter and into the first quarter of next year. Similar to our first mission, we'll have one-week windows each month to ensure we arrive at the surface for the beginning of lunar day for the first U.S. landing on the far side of the moon. Blue Ghost Mission 3 is progressing as well, with the team in the fourth quarter completing the Preliminary Design Review, which verifies the vehicle is designed to deliver payloads to the moon's Brutheisen domes. We also completed the System Requirements Review for Blue Ghost Mission 4, establishing readiness across the vehicle subsystems and ordered long lead items for the mission to the moon's south pole. Similar to how Alpha scales to eclipse, our Blue Ghost technologies are transferable to larger vehicle design that can further support the U.S. government's goal of a permanent lunar presence, as well as exploration of other planetary bodies. Switching to ELECTRA, we recently completed separation testing on the ELECTRA system that will act as the transfer vehicle supporting Blue Ghost Mission 2, an important milestone as we move toward flight hardware assembly. For reference, this ELECTRA is flying to lunar orbit with Blue Ghost before separating in orbit. It will relay data via long-haul communications from the far side of the moon. It also hosts our Ocula commercial imagery and mapping service, which will provide high-resolution imagery and videos, as well as multi-spectral phenomenology data to our customers. Ocula shows how we can responsibly add on payloads and services to our landers and orbiters, since we have flexibility in our modular design processes and team. Additionally, in the fourth quarter, we completed the critical design review for the Defense Innovation Unit's Cinequan project, progressing development of the spacecraft in preparation for the DIU Space Domain Awareness Demonstration mission. The team also completed a NASA study contract regarding a planetary defense mission called TRINITY. This potential mission would utilize an electro-dark spacecraft for near-Earth object reconnaissance, highly leveraging non-recurring engineering for Mars spacecraft designs. With that business summary, I'll turn it over to Darren for a review of the fourth quarter financials.

Speaker 6

Darren Walker Thank you, Jason, and good afternoon, everyone. 2025 was a defining year in Firefly's nine-year history. We completed a historic IPO, achieved a record annual revenue of $159.9 million, increasing 163% year-over-year, and successfully closed the Strategic SciTech Acquisition, our largest acquisition to date. These transformative steps strengthen our company for long-term success, reflecting the dedication and vision of our team. In today's call, I'm going to review our fourth quarter and full year 2025 financial results, as well as provide our annual revenue outlook for 2026. I want to re-emphasize that operational metrics drive Firefly's financial performance. Key operational metrics include the number of launches and execution on program milestones across both our spacecraft solutions and launch businesses, specifically in our spacecraft solutions business, which now includes SciTech, we generally recognize revenue as a percentage of completion under each contract. For the launch business, we focus on the number of launches. Revenue for our operational alpha vehicle is recognized at a point in time when the launch occurs. For Eclipse, while in development, we recognize revenue as a percentage of completion based on program milestones as part of the Northrop Bremen partnership. Once the Eclipse vehicle is operational, we will recognize revenue in the same manner as Alpha when launches occur. Now turning to our fourth quarter results, which include SciTech in the last two months of the year. This was the highest quarterly revenue in the company's history at $57.7 billion. This compares with $30.8 million in the third quarter and $9 million in the same quarter a year ago. Within our total revenue, spacecraft solutions revenue was $50 million and launch revenue was $7.7 million. The sequential increase was primarily driven by completion of multiple milestones across the spacecraft business. We ended the fourth quarter with a total backlog of approximately $1.4 billion. increased from 1.3 billion at the end of the third quarter and up 22 percent from 1.1 billion year over year. Backplug is one of the key metrics we monitor and is a leading indicator of our future revenue performance. Fourth quarter gross margin was 27.7 percent which compares with 27.6 percent in the prior quarter. I'd like to take a moment to highlight how the addition of SCITEX government contracts to our spacecraft business integrates into our financials on the revenue side a majority of the contracts are similar to our existing spacecraft programs where revenue is recognized on a percentage of completion phases balancing out the more event-driven launch business direct costs associated with contract execution are recorded in cost of goods sold while indirect costs are reflected in SG&A. As a result of this mix, R&D will decrease as a percentage of total operating expenses, while SG&A will increase as a percentage of total operating expenses. GAP operating expenses for the fourth quarter were $101.6 million,

Speaker 3

compared with $70.7 million in the third quarter and $57.1 million in the same quarter a year ago.

Speaker 6

The quarter-over-quarter and year-over-year increases resulted primarily from costs related to our SciTech acquisition, the inclusion of SciTech's operating expenses for the final two months of 2025, increased stock-based compensation expense, and a full quarter of public company costs. For operating expenses, the primary differences between GAAP and non-GAAP measures are stock-based compensation expense, one-time acquisition related expenses, and the amortization of intangibles related to the CITEC acquisition. Non-GAAP operating expenses for the fourth quarter were $80.5 million, compared with $61.3 million in the third quarter and $55.6 million in the same quarter a year ago. After excluding the differences between GAAP and non-GAAP operating expenses i just mentioned the quarter over quarter and year over year increases resulted primarily from the inclusion of sci-tech's operating expenses for the final two months of 2025 a full quarter of public company costs and increased research and development investments across all programs this includes r d investments into alpha block 2 upgrades eclipse development and ELECTRA to support our growth objectives. GAP operating loss was $85.6 million compared with a loss of $62.2 million in the third quarter and a loss of $77.2 million in the fourth quarter a year ago. Non-GAP operating loss was $64.5 million compared with a loss of $52.8 million in the third quarter and a loss of $75.8 million in the fourth quarter a year ago.

Speaker 8

our gap net loss in the fourth quarter was 41.1 million dollars in q4 we recognized a one-time

Speaker 6

37.1 million dollar tax benefit related to the site tech acquisition as well as a one-time 8.4 million gain on settlement of contingent liabilities this compares with a loss of 133.4 million in the prior quarter. Our non-GAAP net loss in the fourth quarter was $58.5 million. This compares with a loss of $51.4 million in the prior quarter and $80 million in the same quarter a year ago. GAAP basic and diluted net loss per share was a loss of $0.26 based on a weighted average share count of $155.6 million. We exited Q4 with a share count of count of 159.3 million shares. Our total share count will typically increase by about 1 million shares per quarter moving forward. Non-GAAP basic and diluted net loss per share in the fourth quarter was a loss of 38 cents based on an weighted average share count of 155.6 million. Stock-based compensation expense was $12.6 million in the fourth quarter, which reflects our first full quarter as a public company this compares with four million dollars in the prior quarter which reflected approximately seven weeks of the public company following our ipo on august 8th adjusted ebitda in the fourth quarter was a loss of 57.3 million dollars compared with a loss of 46.3 million in the third quarter and a loss of 67.7 million in the fourth quarter a year ago. Turning to our balance sheet, we ended the quarter with cash, cash equivalents, and short-term investments of $893 million, which included $260 million drawn from our revolving credit facility. The strong total liquidity position gives us the capacity to prudently fund our growth objectives while maintaining a disciplined approach to capital allocation. As a reminder, in the fourth quarter, we completed our Scientec acquisition. The purchase price included $277.4 million in cash paid, net of cash acquired. Capital expenditures in the fourth quarter were $12.1 million, compared with $8.9 million in the third quarter and $2.7 million in the fourth quarter of 2024. The sequential increase was driven by planned test stand upgrades to support Alpha Block two production eclipse development spacecraft manufacturing and other facilities expansion for 2026 we currently expect capital expenditures to increase above 2025 levels as we continue to invest in our infrastructure to support the growing number of opportunities jason discussed earlier free cash flow was a loss of 79.3 million dollars compared with a loss of 62 million in the third quarter and the loss of 42.9 million in the fourth quarter of 2024. The change in free cash flow quarter over quarter is primarily driven by payments related to the acquisition and integration of SITEC. This includes 24.5 million dollars in cash payments related to the SITEC acquisition. As a reminder, in the second quarter we will have the final SITEC acquisition related payments of approximately 24 million dollars which will be reflected in our cash flow for some additional color we expect our cash usage in the coming quarters to increase slightly from the fourth quarter of 2025 as we continue to invest in the critical parts of our business to support our growth objectives now moving to our outlook for the year ahead we currently expect full year 2026 revenue will be in the range of 420 million to 450 million dollars our outlook is supported by the four alpha launches jason discussed and from a program milestone perspective this includes execution on all three blue ghost missions continued development of our eclipse and electro programs and software development for key government programs in summary the midpoint of our

Speaker 3

revenue outlook would represent a year-over-year increase of 172 percent. I would like to thank

Speaker 6

everyone for their interest in Firefly. With that, I'll turn the call back to Jason for his closing

Speaker 7

remarks. Thank you, Darren. We're kicking off 2026 by building on the momentum that we ended the year. We entered the year with a successful return to flight for Alpha and a robust backlog of $1.4 billion, supported by a very strong balance sheet to drive our growth objectives. We are laser-focused on delivering Alpha Block II, with multiple launches ahead for our customers. Industry tailwinds from the intensified focus on the moon and the opportunity of space-based data centers are verifying Firefly's strategy as we prepare to return to the lunar surface and leverage the operational data center capabilities of SiteNet. We've bolstered our leadership and are driving forward on multiple programs with a company-wide emphasis on safety and quality. We are focused on reliably and repeatedly launching, landing and operating space systems from the earth to the moon and beyond. Thank you for joining the call. I'll turn it back over to Michael.

Speaker 8

Thank you, Jason. Operator, we're ready to take questions.

Speaker 2

So much, and as a reminder, press star 1-1 to get in the queue and wait for your name to be announced. To remove yourself, press star 1-1 again. One moment for our first question. Comes from the line of Sheila Kayaoglop with Jeffries. Please proceed.

Speaker 10

Good afternoon, guys, and thank you for the time. For 2026 and the prepared remarks you mentioned, three additional launches this year, Jason, Darren, and including the Startup Block II. So can you maybe talk about the cadence from here, how we think about those and the milestones ahead?

Speaker 7

Hi, Sheila. Thanks for that question. This is Jason. We had a tremendous success with Alpha Flight 7. We're very proud of the team for what they accomplished on that mission. They're pouring through all the post-flight data, but from my lens, I was in the launch control center with the team and everything was nominal in terms of the first stage. We launched at the first instance of the window and also the second stage, the payload deployment, the relight of the lightning engine on the second stage as well. So very happy with the results there. But in parallel, we have been in production for our Block II inaugural rocket will be Flight 8, but we're also building 9 and 10 as well. It's in production in terms of the carbon composite tanks, as well as the engines and the avionics. so obviously you know we are always working closely with our customer for their customer readiness we're working closely with the range and faa for the range availability there's there's obviously i don't have to you know say too much about the weather and safety factors factors as well those are all things that are considered but we are excited about accelerating the roadmap for our transition to block two it is a more reliable and manufacturable rocket still use the same carbon composites still use the same reaver and lightning engines but we were able to de-risk the in-house avionics and batteries that we flew and especially the avionics that we flew in shadow mode on Flight 7. And so really happy with those results. But we continue to produce. So that's

Speaker 10

how we're looking at 2026 cadence. Great. And if I can maybe ask another one on SciTech, congratulations again on closing that. A while ago, you know, can you talk about how you're gaining traction with the SciTech business and how it flows into your revenue guidance for

Speaker 7

the year? Yeah, I can get started and pass it on to Darren. But SciTech has been a highly strategic acquisition. You know, the way we look at acquisitions is we look at the strategy and the fit with our strategy. We look at the culture and the cultural fit as well as the creative nature of the acquisition, and then finally the synergies with SciTech software capabilities. Right from the get-go, SciTech has added a lot of value to especially what we're trying to do in the national security and defense domain. They have a no-fail operational program called FORGE, which we're very proud of because it's been supporting the recent conflicts since it went operational in September, processing over a thousand missile messages for our national defense. They have been focused on execution on FORGE, but they're also working on a variety of other programs like the Space Development Agency ground processing for the tracking layer, Tranche 1. They're also well-positioned for things like Golden Dome because they can leverage a lot of their 40-plus years of algorithms that they've developed for missile tracking and missile defense to include the FORGE program. They have a lot of capabilities, not just in missile warning, missile tracking, but also multi-domain to include things like air battle management system. And so they've been an incredible add to the team. I'll let Darren talk about the revenue.

Speaker 6

Yeah, I'd say financially, Sheila, we head into 2026 with a ton of momentum, right? With the SysTac acquisition. I mean, if you take the midpoint of what we guided at the $435 million mark, 80% of that revenue is already booked. So SysTac's a part of that. And when you think about it, as Jason said, it was a strategic acquisition. When you look at how it folds into our financials, you're really looking at, you know, the nature of their side tax government contracts. Their expenses are, as I mentioned earlier on the call, are primarily accounted for in cost of goods sold and G&A. So, yeah, we're very excited about the side tax acquisition and what it means to us this year.

Speaker 2

Great. Thank you. Our next question comes from the line of Christine Lee, work with Morgan Stanley. Please proceed.

Christine Lee-Weig, Analyst — Morgan Stanley

Good afternoon, Jason, Darren, and Michael. So, you know, and congrats on the successful launch of stairway to seven. So, you know, you talked about how for launch eight, you know, you've got some of the testing already finished. Can you give us some sort of indication with the upgrade and how technically de-risked flight eight, nine, and ten for the rest of the year in 2026 are you know have you done further testing um on any of those elements and how do we think about the de-risking hi christine thank you this is jason um you know

Speaker 7

just as much as the hardware and software um is the the people and i think uh last year when we did our production and engineering stand down we looked at the vulnerabilities across each department. We came up with improvements to our processes and a lot of additional training. From the people's side, there's a lot more rigor and collaboration and active listening between the teams. And we really built up a lot of muscle, strengthened the muscle memory of the team during production as well as operations. And we saw that from the fruits of the stairway to successful flight seven uh with that being said um you know there are a lot of um upgrades uh from block one to block two that were de-risked actually on flight seven we flew the in-house avionics that actually proved out some functionality and we're pouring over that data i was able to see real-time data telemetry from that, and it was nominal. And then in addition to that, batteries as well were de-risked. The automated flight termination system was also de-risked. From a routine operations, we always test out each of our carbon composite LOX tanks and RP tanks, as well as the rebrand engine and the lightning engine as part of our normal course of producing and integrating and testing our Alpha rocket. So we're just going through all that. As I mentioned before, we did qualify and pass successfully our second stage LOX tank, and we just continue to achieve milestones. So all that is de-risking the Block II program. I will say that I have high confidence in the designs and the processes that really have enhanced our safety, quality, and reliability culture, and then especially our people as well.

Christine Lee-Weig, Analyst — Morgan Stanley

Great. Super helpful. And if I could ask a second question on CITEC. you know you called out the forge program and look this is the first time in 50 years that the u.s federal government selected a new client contractor for missile warning ground systems this seems like a pretty big deal so can you talk about uh the importance of this program and also with the operation we're seeing in iran and the threat environment um we see acceleration of uh what you're providing uh in 2026 to the government on in this program and also you know when we think about the revenue outlook for 2026 what has to occur you know what's driving the difference between the low end and the i end you know what's the the variables uh we should be

Speaker 7

watching thank you thanks christine i'll get started and pass to darren uh later but what i would say yes you're absolutely right forge is incredibly important consequential program of record and sci-tech is not a stranger to these kind of things they've been supporting these type of missile defense agency and space force and air force programs for 40 plus years and so they have a library of algorithms that you can mix and match that continue to get modernized and advanced in in this case forge does use ai and it allows you to force multiply each operator in the room And so the 11th Space Wing is actually using this operational system today, and it is supporting 24-7, 365 operations for conflicts such as in Iran. So it's really important. I would say that it is the most advanced missile warning, missile tracking system out there, producing high-rate, high-volume of data from all the low-Earth orbit, medium-Earth orbit that are coming online, and geosynchronous orbit missile warning and missile tracking OPIR satellites, and it's really helping us defend our homeland. So I would say that there's a lot of upside opportunities to continue to add on to the program. As we mentioned, there was a hardware purchase that I'll let Darren talk a little bit

Speaker 6

more about yeah hey christine uh this is darren so so heading into i mean you've seen the q4 numbers that gives us a great deal of momentum from a revenue perspective going into 2026 i mean as i mentioned to sheila the uh out of our midpoint guidance number 80 of that is is already booked so we feel pretty good about the guidance number and i mean as and and as as we ramp up the alpha launches, that'll stabilize that number. But from an upside potential perspective, one thing that's noteworthy is we do have significant potential upside opportunities, and we're well positioned for that. For example, as Jason discussed on the call, NASA's need to accelerate landers to a monthly cadence starting in 2027. That's not included in our numbers today. Great. Thank you very much.

Speaker 2

Thank you. Our next question comes from the line of Suji DeSilva with Roth Capital. Please proceed.

Suji DeSilva, Analyst — ROTH Capital

Hi, Jason. Hi, Darren. Apologies for any background noise here. But you talked about NASA wanting to push the cadence of lunar missions. I'm curious how you think about Firefly's ability to support an accelerated cadence of lunar missions versus what you've currently talked about.

Speaker 7

Yeah, thanks, Suji. This is Jason. Yeah, we have been investing in CapEx as well as expansion of our clean rooms, as well as our in-house avionics and batteries and integration and test facilities here in Cedar Park, Texas. We just had some of the senior NASA top executives tour our facilities, and what we showed them was we're doing operations on Blue Ghost Mission 2. There's a lot of hardware being integrated as we speak, a lot of welding going on for both the lander as well as the electric transfer vehicle. We have all the payloads as well for Blue Ghost Mission 2. But we're also achieving milestones on Blue Ghost Mission 3, passing PDR, and Blue Ghost Mission 4, passing SRR. With the expansion, we've been able to increase our clean room space thanks to the Texas Space Commission that gave us a grant last year. And so we're completing that this year, and that'll allow us to ramp up steadily the number of lunar landers we can build simultaneously. So, when we hear the NASA administrator, Jared Isaacman, say, hey, we want to go to the moon south pole with robotic missions every month starting in 2027, those are just validation of the investments we've already made. And so, a lot of our designs are scalable and modular so that we can continue to take advantage of the streamline of building and integrating these lunar landers at rate, we also are able to get strategic inventory as well to help us with our suppliers. I'll pass it on to Darren. I think it summarizes it well, Jason.

Speaker 6

I mean, the investment is ramping up production for spacecraft. That's good.

Suji DeSilva, Analyst — ROTH Capital

And then my follow-up maybe is for Darren. Can you talk perhaps about the revenue per lunar mission trend we should be expecting? Is it fairly steady from IAM mission to IAM mission, or is there a way that it would be ramping up over the next few? Thanks.

Speaker 6

Yeah, so our Blue Ghost missions, with every eclipse win that we've had, has been ramping up. As you recall, the first Blue Ghost mission was roughly $100 million, and they've been suddenly ramping up in the $150 to $200 million range with potential add-ons as well, like as Jason mentioned with Ocula and data sales with the imaging services that we've done.

Speaker 2

Thank you. Our next question comes from the line of Michael Leshock with KeyBank Capital Markets. Please proceed.

Speaker 3

Hey, good afternoon. I wanted to ask on Alpha, given the data you got back from Flight 7 and the improvements that you previously made on its TPS, are you expecting the thicker thermal protection to be able to fly at more stressful inclinations on future launches, or do you foresee any other changes to Alpha's TPS going forward?

Speaker 7

Hey, Michael. This is Jason. Thanks for that question. Everything that I've seen to date has looked nominal. We'll continue to go through all the data that we received. We actually put additional telemetry on the first stage so that we could get the temperature protection system sensors that we put on as an addition so we can validate everything that we learned from our prior launches. So we'll be able to share more as we get all that data and crunch all that data. But we're very confident that the minimal additions of thermal protection system on our stage one booster gives us the ability to envelope even more types of launch trajectories going forward.

Speaker 3

Great. And then on CITEC, are there any additional contracts there that you're competing for that could potentially be, you know, step changes to the growth that you're already expecting for CITEC?

Speaker 7

Yeah, for SciTech, you know, I've already mentioned that they have the program of record for missile warning, missile tracking processing with the U.S. Space Force Forge Program. The Space Development Agency also has them on contract to support tracking tranche one ground processing as well. I think that there definitely are other types of competitions out there, you know, especially in the multi-domain arena, so things like air battle management system and in addition to missile warning, missile tracking, all the algorithms that SciTech have are transferable to missions like air moving target indication and potentially ground moving target indication. So, those are upside opportunities for SciTech. In addition, I already mentioned that SciTech is very well positioned because of their 40 plus years of missile tracking and missile defense algorithm work that is in operations such as Forge for things like the Golden Dome program, which is now we hear $185 billion opportunity. And if you look at that opportunity, the most important thing for that architecture to succeed is the ground processing integration of sensor data to decision-making, things like fire control. So, SITIC is very well positioned for those kinds of missions.

Speaker 2

Thank you. Our next question comes from Colin Canfield with Cantor. Please proceed.

Colin Canfield, Analyst — Cantor

Hey, thanks for the question. Do you mind talking perhaps about FY27's national defense strategy, you know, kind of the increased focus on satellite-based architectures and what it implies for both intelligence satellite and orbital transfer vehicle demand. Essentially, how much are you hearing from acquisition officers that they're going to expand beyond two and three supplier programs to a broader set of acquisition partners?

Speaker 7

Hi, Colin. This is Jason. Thanks for that question. We are very, very bullish and committed to the national defense strategy for this year and beyond. We have a contract with the Defense Innovation Unit called Cinequan Project. And in that one, we are developing, we just passed our CDR. We're developing a rendezvous proximity operations capability with our satellite, Elettra, which is able to do dynamic space operations and carry, you know, different types of space domain awareness type sensors and other, we see a future where space will not be sedentary. You will have to have dynamic space operations capabilities to either evade threats or even chase after threats. And Electra is well positioned for those kinds of missions because does, it's got a lot of maneuverability and precise in-house engine thrusting based on heritage from our Blue Ghost mission. It also has a lot of ample fuel capacity, and we're building a lot of autonomy into the system as well. So it really does support things like rendezvous proximity operations and space domain awareness and adjacent kind of missions. And LEO can support MEO and GEO as well as systems of emissions as well. And then in addition to that, we do see that there will be a lot more demand for missile warning, missile tracking sensors, and satellite processors. SciTech has a lot of capability because of FORGE on how to process large amounts of data and turn it into good track quality. They also have experience doing onboard processing on-orbit, and so we are investing in that capability so that we can enable more on-orbit edge processing so you can further reduce latencies from sensing to the actual WarFi decision-making.

Colin Canfield, Analyst — Cantor

Got it. And in terms of the customer conversations that you're having, to what extent is the additional side tech capability essentially forcing them or not forcing them? giving them increased confidence in pushing Firefly towards doing, say, like hard intelligent satellite work? Essentially, you know, if you had to put a rough timeline on it, like would 2030 kind of be fair to characterize as Firefly looking a lot like kind of millennium of five years ago?

Speaker 7

Well, I can't speak to other places that I've led before, but what I could say is that the capabilities that Firefly plus SciTech brings to the table are very advanced. You know, as I said before, space is hard, but landing on the moon is even harder. And we were the first and only commercial company to do that successfully stable and upright. If you think about it, we rendezvoused successfully with the moon and we were able to conduct the 14-day operations with 10 different NASA payloads successfully, and so all those lessons learned, also shared with our Electra spacecraft, make for a really powerful capability that can perform things like RPO and space domain awareness, as well as long-haul resilient communications missions and transfer vehicle missions as well. But the addition of SciTech brings a lot of best practices for software development, existing algorithms to process any type of sensor phenomenology, because SciTech does have the sensor phenomenology subject matter experts with the software developers. And they have a lot of secure software development practices that we can transfer between our spacecraft and our SciTech programs. So it does really give us a lot more capability synergies, if you will, to go after, you know, these type of no-fail critical missions that need to also be affordable in advance. Got it. Thank you for the call. I appreciate

Speaker 2

it. Thank you. Our next question is from Laura Lee with Deutsche Bank. Please proceed.

Speaker 7

Hey, this is Laura on for Edison. Thanks for taking my question. So, first question I want ask do you have any preliminary thoughts on the space data center opportunities are those like

Suji DeSilva, Analyst — ROTH Capital

technically or economically feasible or do you see this as a potential area of interest for

Speaker 7

firefly thanks laura this is jason appreciate the question uh we long before um there was a renewed interest in space-based data centers firefly has been envisioning a future processing more and more in space because a lot of advantages of doing that. To name a few, there's a lot of power generation and a lot of thermal radiator capabilities in space, not to mention you reduce latency if you are able to sense things and process things on orbit and get it directly to the users efficiently. One of the main reasons our SciTech acquisition was so strategic is because we were putting the pieces together to enable such a system. And so with Cytec's capabilities of working with software applications on frameworks on terrestrial data centers, they have a lot of knowledge that we can apply to on-orbit data centers as well. If you think about it, on-orbit data centers are really the hardware and physical layers and the frameworks. But what do you put on that? Well, we have SciTech, who has the software applications that you actually put on the orbital data centers. So, that's what we're going to work closely with our subsidiary SciTech on. And we'll be able to, for example, connect different orbital constellations together so that we can enable enhanced collection opportunities by having LEO and MEO and GEO satellites collaborating with each other like they have never done before. So there's a lot of upside opportunities with the things we're doing with CITEC and our electrospacecraft.

Christine Lee-Weig, Analyst — Morgan Stanley

Okay, gotcha. Appreciate it.

Speaker 2

Thank you. Our last question comes from Seth Siefman with J.P. Morgan. Please proceed.

Speaker 1

Yeah, good afternoon, guys. This is Alex on for Seth. Now, maybe one area we haven't talked quite as much about on this call is on Eclipse. I know you guys kind of, you know, mentioned some updates on, you know, you guys are progressing towards delivering the first stage to Northrop later this year. And, you know, the first flight is kind of targeted for no earlier than 2027. Just curious if you guys could kind of walk us through some of the milestones we should be looking for there over the next several months.

Speaker 7

Yeah, I'll get started. I can, and Darren can add more. This is Jason. We're really excited about Eclipse. Everything that we've learned and we're producing on Alpha to include our carbon composite structures and our tap-off cycle engine technology is reducing risk for Eclipse. And so we didn't have to start from scratch with developing our engine technology. We're able to scale it in terms of size for our tap-off cycle engines. and then the carbon composite structures we've been using the automated fiber placement machine already since 2023 when it was stood up in our texas factory so we have a lot of experience building uh the tanks and structures and domes and locks transfer lines using um our proven techniques and then every different uh element of the eclipse program is either in development or in building or test. So we're really excited about the progress we're making. We have over a hundred hot fire Miranda engines under our belt. In fact, I was just at Rocket Ranch and experienced two in a day. And then on top of that, we are already building the flight engines for the inaugural launch as well of Miranda engines. The first stage tank is making a lot of progress. We did test out the interstage past qualification there. We also tested our LOX transfer line. That is a significant progress there. So all the testing is happening. We're still targeting, delivering the first stage to our co-developer, Northrop Grumman, towards the end of the year. And then for the full variant of Eclipse where Firefly builds the first stage and the second stage, we're anticipating no earlier than 2027 for that first launch.

Speaker 2

Okay. Thanks very much, guys. I'll leave it there. Thank you. And this will conclude our Q&A session. I will pass it back to Michael Schietz for his closing comments.

Speaker 8

Thank you so much, Operator. Thank you, everyone, for joining the call, and we'll talk to you next quarter. Have a good one.

Speaker 2

Concludes our conference. Thank you for participating. You may now disconnect.