Greetings, welcome to The Redwire Corporation First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note, this conference is being recorded. I will now turn the conference over to your host, Alex Curatolo, Senior Director of Investor Relations. Thank you, you may begin.

Good morning and thank you, Darrell. Welcome to Redwire's first quarter 2025 earnings call. We hope that you've seen our earnings release, which we issued earlier this morning. It has also been posted in the Investor Relations section of our website. Let me remind everyone that during the call, Redwire management may make forward-looking statements that reflect our beliefs, expectations, intentions, or predictions of the future. Our forward-looking statements are subject to risks and uncertainties that are described in more detail in our earnings release. Additionally, to the extent we discuss non-GAAP measures during the call, please see our earnings release or the investor presentation on our website for the calculations of these measures and their reconciliations to U.S. GAAP measures. I am Alex Curatolo, Redwire's Senior Director of Investor Relations. Joining me on today's call are Peter Cannito, Redwire's Chairman and Chief Executive Officer; and Jonathan Baliff, Redwire's Chief Financial Officer. With that, I would like to turn the call over to Pete. Pete?

Thank you, Alex. During today's call, I will outline our key accomplishments during the first quarter of 2025, and Jonathan will then present the financial highlights for the same period. We will then discuss our 2025 outlook, after which we will open the call for Q&A. On our last earnings call, I introduced our 2025 growth strategy, which is centered around five key principles; providing picks and shovels, delivering multi-domain platforms, exploring the moon, Mars, and beyond, unlocking venture optionality, and executing accretive M&A. Over the next few slides, I will discuss a recent key success for each growth area, to demonstrate how we are executing against these focus areas. Starting with providing picks and shovels, during the quarter, Redwire was awarded a contract from Thales Alenia Space to provide four docking systems for the European Space Agency's I-Hab habitation module. The Redwire system is branded as the International Berthing and Docking Mechanism or IBDM, which will enable safe transfers of crew and cargo from visiting spacecraft to I-Hab, supporting continuous operations and missions within the Lunar Space Station. This is a mission-critical element of infrastructure that applies to space habitats and both crewed and uncrewed space capsules. Turning next to delivering multi-domain platforms, in February, Redwire announced the award of a study contract from ESA to develop the preliminary spacecraft design for the upcoming ARRAKIHS dark matter mission that will image faint galaxies in the nearby universe and provide insight into dark matter. Redwire's solution is built around an adapted version of our flight-proven small satellite platform, Hammerhead. If selected for the implementation phase of the ARRAKIHS mission, Redwire would integrate the full satellite in our state-of-the-art clean room facilities in Belgium, underscoring the maturity of our full mission systems capability in the European market. These first-quarter successes illustrate that Redwire is proudly building on decades of flight heritage and continuing to play a critical role in developing organic capabilities for the European market as it pivots toward increased independence in space and defense. Moving next to exploring the moon, Mars, and beyond. In early April, Redwire and i-space-U.S. signed a Memorandum of Understanding to jointly pursue commercial lunar exploration and science missions and for the NASA CLPS initiatives, as well as additional private sector customers. Redwire is a prime contractor on the CLPS IDIQ contract, which has a cumulative maximum contract value of $2.6 billion through 2028. Redwire is proud to combine our advanced digital engineering, integration and testing, and lunar subsystems and payloads with ispace's proven lunar landing platform and mission operations to create a world-class team to support future lunar missions. Turning to unlocking venture optionality, in April, Redwire launched both a new drug development technology and a cancer detection experiment to the International Space Station as we scale our in-space pharmaceutical drug development. Based on our highly successful PIL-BOX platform, the high-volume industrial crystallizer is capable of processing samples that are up to 200 times the volume of what could be processed in the original technology. To validate the new hardware, Redwire launched its Golden Balls nanotechnology manufacturing demonstration. Today, Redwire is proud to announce that we have signed an agreement with a new commercial partner, Espero Biomedicines, to fly two additional PIL-BOXES to the ISS. Redwire will crystallize a new cancer treatment that Espero Biomedicines is working on. Redwire and Espero Biomedicines see this as the start of a long and fruitful partnership and are excited to have a new commercial customer funding advanced biopharma development in space for the benefit of people on Earth. Finally, when it comes to executing accretive M&A, Redwire announced that it has signed an agreement to acquire Edge Autonomy in January 2025. In March 2025, we announced that we had received all regulatory approvals needed to complete the transaction, and just this past Friday, May 9, 2025, we filed our definitive proxy with the SEC. With these critical milestones behind us, we expect to close during the second quarter of 2025 with the special meeting scheduled for June 9, 2025. This transaction is expected to transform Redwire into a global leader in multi-domain autonomous technology, broadening our portfolio of mission-critical space platforms to include combat-proven autonomous airborne platforms. Next, I would like to discuss tariffs in the context of Redwire's supply chain. Redwire's supply chain provides resiliency in the current environment with a U.S.-based supply chain for our U.S. customer base, particularly on federally funded contracts, and with a European-based supply chain for our international customers. Our global manufacturing footprint serving local markets is a natural tariff mitigant. As such, we have yet to see notable widespread price increases or shocks due to tariffs. We are addressing one-off cases with suppliers. However, we currently do not expect any material financial impact. Redwire will continue to monitor potential impacts closely as we manage our business through this dynamic environment. In some instances, we believe that the current trade environment may lead to increased investment in U.S. manufacturing and in European space and defense budgets that could benefit Redwire's significant manufacturing presence in both regions. Turning to our contract awards and backlog, our contract awards during the first quarter of 2025 were $56.2 million with a book-to-bill ratio of 0.92 times, a significant improvement on both a sequential and year-over-year basis. In addition, backlog remained relatively flat at $291.2 million as of March 31, 2025. 37% or $107.2 million of this contracted backlog is from our international operations in Europe. As we have continuously reinforced, we often see lumpy contract awards from quarter to quarter. Although we saw key wins for the first quarter coming out of the European market, including the contract for the IBDM, I-Hab and ESA study contract for the ARRAKIHS mission mentioned previously, we also saw notable delays in awards in the U.S. Government market due to the transition of key decision-makers in NASA, SDA and other agencies, as well as budget uncertainty associated with new administration priorities. We believe these delays are temporary and based on analysis of the Presidential budget request that includes funding for key space and defense programs like Golden Dome. We remain optimistic about the future of U.S. national security and space and defense budgets. In the meantime, we continue to see a strong pipeline with an estimated $6 billion of identified opportunities, including approximately $0.5 billion in proposals submitted during the first quarter of 2025. We continue our efforts to increase the average size of the individual opportunities we are pursuing, and as a result, we continue to have a pipeline of bids that could result in a substantial increase in backlog if we land some of these larger opportunities. Because of the success of our transformational investments building the Redwire platform in 2024, we are now positioned to continuously pursue larger opportunities in 2025 and beyond.

Thank you, Pete. Before turning to our financials, I would like to highlight the rendering on this page, which is ESA's Proba-3 spacecraft using a version of Redwire's Hammerhead platform. During the first quarter, the Proba-3 spacecraft, which launched in late 2024, demonstrated key on-orbit milestones by autonomously acquiring and maintaining spacecraft formation flying over the course of two Earth orbits. This is the world's first on-orbit precision flying mission with two spacecraft maintaining their relative positions down to less than a millimeter while flying 150 meters apart in space. This is not only a significant technological achievement but also a critical step in achieving the mission objectives of studying the Sun's corona forces. So let's review the results for the first quarter of 2025 starting with revenue. Redwire recorded revenues of $61.4 million, a decrease both on a sequential and year-over-year basis. As Pete mentioned, although we saw key wins coming out of our European market, we also saw movement of revenue to the right on existing contracts and delays in awards across our customer classes, especially in the U.S. during this quarter. Turning to profitability, during the quarter, we saw a significant sequential improvement in our adjusted EBITDA from a negative $9.2 million in the fourth quarter of 2024 to a negative $2.3 million in the first quarter of 2025. Our adjusted EBITDA included a net unfavorable impact from EACs of $3.1 million, primarily due to additional unplanned labor and increased production costs related to the development of new technologies required to meet customer specifications. Looking at our cash and total liquidity, we ended the quarter with a record level of available liquidity, $89.2 million. This is a 39.2% improvement over the $64.1 million of total liquidity at the end of last year. We had an expected increase in year-over-year and sequential use of free cash in the first quarter and this was inclusive of a $33.9 million shift in working capital. This shift included one-time payments related to litigation settlements and M&A activities. Even with this, overall liquidity was enhanced by the $82.9 million exercise of our outstanding warrants. This represents an 82.3% exercise rate for these public warrants. As part of the announcement of our combination with Edge Autonomy, we provided a financial forecast for fiscal year 2025 as if the transaction closed on December 31, 2024. In 2025, there has been significant commercial market uncertainty, especially in the U.S. Defense and Government Services sector, with the incoming new administration. Both Redwire and Edge Autonomy have seen some of our projected wins slip to the right. However, we believe that we are still on track to end 2025 within our previously provided ranges. Therefore, we are reaffirming the combined forecast at this time. For revenue, as if the transaction had closed on December 31, 2024, Redwire is forecasting full year 2025 combined revenue to be in the range of $535 million to $605 million. This represents a 52.9% compound annual growth rate from fiscal year 2023 to fiscal year 2025 at midpoint, and for adjusted EBITDA to be between $70 million and $105 million, which represents 138.8% compound annual growth rate from fiscal year 2023 to fiscal year 2025 at midpoint. Post-closing, we expect to provide guidance for the remainder of 2025.

I want to thank the entire Redwire team for their contribution to our results during the first quarter of 2025, a truly global effort. We will now open the floor for questions.

Good morning.

Good morning, Greg.

Hey, Greg.

In the prepared remarks, one of the things you highlighted was Europe's increased independence in space and defense. Can you maybe talk about some of the risks, given the potential for some of the programs that the U.S. and Europe partner on to potentially be pushed out versus the opportunities on that independence and what you're seeing given some of the award flow out of Europe?

Yes, thanks, Greg. That's an excellent question. On the space side, you see a wakeup call in Europe about their starting investment levels in a competitive context with the U.S. and China. There's a real interest in additional investment. However, we anticipate that the funds will continue to flow to projects. The realignment may just mean redirecting existing funds to new partners rather than cutting funding entirely. So we see a positive trend due to this urgency in the European markets.

For a follow-up, I think the lumpiness on the U.S. side is fairly well appreciated. You had a robust submitted bids last year, and it seemed like Q1 was strong in aggregate. Any kind of change in the U.S. regarding the skinny budget and CR in place for 2025, have you seen any changes, or is it still relatively constrained?

Again, the same basic theme applies. We don't have an asset administrator fully in place yet. There's dollar shifting where some things may be deprioritized, while others are getting prioritized. However, we believe that as the government finalizes its decision-making, we’ll see significant opportunities in space, especially on defense instrumentation.

Hi Pete. Hi, Jonathan. Congrats on keeping the guidance in a tough environment. Can you talk about the prioritization of U.S. Government programs? Where do you see drones fitting in terms of international and domestic spend given the Edge Autonomy acquisition coming near close?

Drones have proven their efficacy as force multipliers in combat, and additional investments are required in that area. There is plenty of discussion surrounding drone development at AUSA, and it has become a central focus of future U.S. Army operations. This aligns well with Edge Autonomy's capabilities, giving us a strategic edge.

Great, thanks, Pete. You announced an MOU with ispace at Space Symposium. What milestones should we track, and how do you think your combined approach to lunar missions may be differentiated in the marketplace?

Redwire is a prime on the CLPS contract that funds missions from Firefly’s Blue Ghost and Intuitive Machines. We are taking on a larger role in lunar missions, supported by ispace's lunar lander technologies. The next significant milestone will involve our team beginning to bid and win CLPS task orders and missions.

Thank you. Regarding the retained pro forma annual guidance for 2025, can you provide details on what's going on with Edge today? What revenue and EBITDA did the company attain in Q1 and how's the pipeline looking?

We're not disclosing Edge's first quarter results at this time since we will release that information in a U.S. GAAP format later. However, we previously provided historical revenues showing an increase in backlog. The current backlog has grown to $99.4 million. Once we close the transaction, we'll provide street guidance for 2025.

Okay, thank you. Any color on the $0.5 billion bids submitted and any other big opportunities we should be tracking?

Without getting into specific contracts for competitive reasons, the primary focus is on moving up the value chain from components and subsystems to bidding as primes on larger full mission spacecraft programs. We're leveraging our established foundation to pursue larger opportunities, including missions like ARRAKIHS.

Looking through the forecast numbers on Edge Autonomy's cash flow; could you talk about free cash flow expectations for organic Redwire? What indicators should we watch as we progress through the year?

We expect cash flow to improve as we progress through the year. Some revenues moving into the second, third, and fourth quarters should start generating cash flow. Once contracts start reaching milestones, we anticipate cash flow to reflect that positively.

Thanks for taking my questions. Can you share what the total value of outstanding bids is and how do you think about the gross margin mix moving forward?

We do not publicly disclose bid specifics, including margins. However, we are aiming for a mix of larger projects that can help us achieve higher margin potential compared to the last 12 months. We have seen a large push in the commercial segment, especially in Europe.

Curious about the entrance of Edge into the UAV space. Is there interest in expanding capabilities similar to what you've done with legacy Redwire?

We're not changing our strategy; we're transforming into a space and defense company, targeting multi-domain missions. Our approach is opportunistic while focusing on adding value through strategic acquisitions.

Thank you for the questions. Before we conclude, we want to incorporate questions from our retail investor community. Here’s today's question: Can you elaborate on how your space infrastructure technologies like in-space manufacturing are positioning Redwire to win future contracts?

In-space infrastructure is among the largest addressable markets in the space sector. Our innovative technologies around in-space manufacturing and advanced deployables are fundamental building blocks that will support our future contract wins across a range of markets, underscoring our proven capability to deliver solutions in space.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time. Have a wonderful day.