FORM 10-Q Filing Information [Registrant Information](index=1&type=section&id=Registrant%20Information) This section details Intuitive Machines, Inc.'s (LUNR) official filing information, confirming its status as a smaller reporting and emerging growth company Condensed Consolidated Balance Sheets (in thousands) | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :-------------------------------------- | | Class A Common Stock, par value $0.0001 per share | LUNR | The Nasdaq Stock Market LLC | - The registrant is a smaller reporting company and an emerging growth company, having filed all required reports during the preceding 12 months[3](index=3&type=chunk) Outstanding Shares [Common Stock Outstanding as of May 8, 2025](index=2&type=section&id=Common%20Stock%20Outstanding%20as%20of%20May%208%2C%202025) As of May 8, 2025, Intuitive Machines, Inc. reported total outstanding shares for Class A and Class C common stock Common Stock Outstanding as of May 8, 2025 | Class of Stock | Par Value | Shares Outstanding | | :--------------- | :-------- | :----------------- | | Class A Common Stock | $0.0001 | 117,330,851 | | Class B Common Stock | $0.0001 | 0 | | Class C Common Stock | $0.0001 | 61,301,804 | Table of Contents [Report Structure](index=3&type=section&id=Report%20Structure) The Table of Contents outlines the Quarterly Report's two main parts: Financial Information and Other Information, detailing specific items and page numbers - The report is divided into two main parts: Part I for Financial Information and Part II for Other Information, detailing specific items and their corresponding page numbers[6](index=6&type=chunk) Cautionary Note Regarding Forward-Looking Statements [Forward-Looking Statements and Risk Factors](index=4&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section highlights forward-looking statements are subject to risks and uncertainties, including reliance on personnel, limited operating history, customer concentration, and market growth failure - The report contains forward-looking statements regarding missions, demand, financial performance, and business strategy, which are subject to material risks and uncertainties[8](index=8&type=chunk) - Key risk factors include: * Reliance on key personnel and Board of Directors * Limited operating history and failure to manage growth or win new contracts * Customer concentration and competition * Safety performance of spaceflight systems or security incidents * Failure of the commercial spaceflight market to achieve expected growth * Delayed launches, mission failures, or increased costs * Reliance on a single launch service provider and risks associated with commercial spaceflight * Failure to protect trade secrets and unpatented know-how * Inability to maintain effective internal control over financial reporting * Dependence on U.S. government contracts and funding levels[8](index=8&type=chunk)[13](index=13&type=chunk) Available Information [Company Website and SEC Filings](index=5&type=section&id=Company%20Website%20and%20SEC%20Filings) The company provides free access to SEC filings and material information on the 'Investors' section of its website - The company's website (www.intuitivemachines.com) serves as a resource for SEC filings and material information, accessible via the 'Investors' section[11](index=11&type=chunk)[12](index=12&type=chunk) Part I – Financial Information [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents Intuitive Machines, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, operations, equity, and cash flows [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The unaudited condensed consolidated balance sheets provide a snapshot of the company's financial position at specific dates Condensed Consolidated Balance Sheets (in thousands) | ASSETS | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $373,253 | $207,607 | | Total current assets | $431,312 | $293,161 | | Total assets | $500,014 | $355,404 | | LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT | | | | Total current liabilities | $98,148 | $98,831 | | Earn-out liabilities | $— | $134,156 | | Warrant liabilities | $25,776 | $68,778 | | Total liabilities | $172,400 | $351,483 | | Redeemable noncontrolling interests | $456,698 | $1,005,965 | | Total shareholders' deficit | $(135,223) | $(1,008,034) | - Cash and cash equivalents increased significantly from **$207.6 million** at December 31, 2024, to **$373.3 million** at March 31, 2025 - Total assets increased by approximately **$144.6 million**, from **$355.4 million** to **$500.0 million** - Earn-out liabilities were fully settled, decreasing from **$134.2 million** to **$0** - Warrant liabilities decreased from **$68.8 million** to **$25.8 million** - Total liabilities decreased by approximately **$179.1 million**, from **$351.5 million** to **$172.4 million** - Total shareholders' deficit improved substantially from **$(1,008.0) million** to **$(135.2) million**[16](index=16&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The unaudited condensed consolidated statements of operations detail the company's revenues, expenses, and net income or loss over specific periods Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Revenue | $62,524 | $73,219 | | Total operating expenses | $72,601 | $75,994 | | Operating loss | $(10,077) | $(2,775) | | Total other income (expense), net | $11,052 | $(115,256) | | Net income (loss) | $975 | $(118,031) | | Net loss attributable to the Company | $(11,396) | $(97,486) | | Net loss per share of Class A common stock - basic and diluted | $(0.11) | $(2.68) | | Weighted average shares outstanding - basic and diluted | 107,081,918 | 36,612,270 | - Revenue decreased by **$10.7 million** (**14.6%**) YoY - Operating loss increased from **$(2.8) million** to **$(10.1) million** YoY - Net income (loss) significantly improved from a loss of **$(118.0) million** to a gain of **$0.98 million** YoY, primarily due to favorable changes in fair value of warrant liabilities and non-recurrence of loss on issuance of securities - Net loss attributable to the Company decreased by **$86.1 million** (**88.3%**) YoY - Net loss per share improved from **$(2.68)** to **$(0.11)** YoY - Weighted-average common shares outstanding increased significantly from **36.6 million** to **107.1 million** YoY[18](index=18&type=chunk) [Unaudited Condensed Consolidated Statements of Mezzanine Equity](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Mezzanine%20Equity) The unaudited condensed consolidated statements of mezzanine equity track changes in redeemable noncontrolling interests and preferred stock Condensed Consolidated Statements of Mezzanine Equity (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :------------------------------------------ | :------------- | :---------------- | | Series A Preferred Stock Amount | $6,139 | $5,990 | | Redeemable Noncontrolling Interest | $456,698 | $1,005,965 | Condensed Consolidated Statements of Mezzanine Equity (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :------------------------------------------ | :------------- | :---------------- | | Series A Preferred Stock Amount | $5,560 | $28,201 | | Redeemable Noncontrolling Interest | $443,181 | $181,662 | - Redeemable noncontrolling interests decreased significantly from **$1,005.9 million** at December 31, 2024, to **$456.7 million** at March 31, 2025, primarily due to subsequent remeasurement[20](index=20&type=chunk) [Unaudited Condensed Consolidated Statements of Shareholders' Deficit](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Deficit) The unaudited condensed consolidated statements of shareholders' deficit detail changes in equity components, including common stock and accumulated deficit Condensed Consolidated Statements of Shareholders' Deficit (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :------------------------------------------ | :------------- | :---------------- | | Total Shareholders' Deficit attributable to the Company | $(136,913) | $(1,009,262) | | Total Shareholders' Deficit | $(135,223) | $(1,008,034) | - Total shareholders' deficit attributable to the Company improved by **$872.3 million**, from **$(1,009.3) million** at December 31, 2024, to **$(136.9) million** at March 31, 2025 - This improvement was driven by significant non-cash activities including subsequent remeasurement of redeemable noncontrolling interests (**$561.2 million**) and issuance of Class A common stock for warrants exercised (**$176.6 million**) and Class C common stock for earn-out awards (**$167.5 million**)[25](index=25&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The unaudited condensed consolidated statements of cash flows categorize cash movements from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $19,419 | $(6,442) | | Net cash used in investing activities | $(6,122) | $(1,588) | | Net cash provided by financing activities | $152,349 | $60,754 | | Net increase in cash, cash equivalents and restricted cash | $165,646 | $52,724 | | Cash and cash equivalents at end of the period | $373,253 | $55,242 | - Operating activities generated **$19.4 million** in cash in Q1 2025, a significant improvement from using **$6.4 million** in Q1 2024 - Investing activities used **$6.1 million** in Q1 2025, an increase from **$1.6 million** in Q1 2024, primarily due to higher property and equipment purchases - Financing activities provided **$152.3 million** in Q1 2025, up from **$60.8 million** in Q1 2024, largely driven by warrant exercises[29](index=29&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [NOTE 1 - BUSINESS DESCRIPTION](index=12&type=section&id=NOTE%201%20-%20BUSINESS%20DESCRIPTION) This note describes Intuitive Machines, Inc.'s core business as a space technology, infrastructure, and services company - Intuitive Machines, Inc. is a space technology, infrastructure, and services company focused on establishing cislunar infrastructure and commerce, headquartered in Houston, Texas[31](index=31&type=chunk) - The company completed a business combination with Inflection Point Acquisition Corp. (IPAX) on February 13, 2023, and was reorganized into an Up-C structure, with Intuitive Machines, LLC as the accounting acquirer[33](index=33&type=chunk)[34](index=34&type=chunk) - Class A Common Stock and warrants began trading on Nasdaq under 'LUNR' and 'LUNRW' on February 14, 2023. Warrants were redeemed on March 6, 2025[35](index=35&type=chunk) [NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=13&type=section&id=NOTE%202%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the significant accounting policies and estimates used in preparing the financial statements - The financial statements are prepared in accordance with U.S. GAAP for interim reporting and SEC rules, consolidating subsidiaries like Space Network Solutions, LLC and IX, LLC[36](index=36&type=chunk) - The company is an emerging growth company (EGC) and has elected to use the extended transition period for complying with new or revised financial accounting standards[39](index=39&type=chunk)[254](index=254&type=chunk) - Key accounting policies and estimates include: * Use of estimates based on historical experience and economic environment * Operating in one reportable segment * Concentration of credit risks, with one major customer accounting for **78%** of revenue in Q1 2025 * Earn-out liabilities were fully vested and no longer exist as of March 31, 2025, following the satisfaction of Triggering Events II-A and III in February 2025[40](index=40&type=chunk)[42](index=42&type=chunk)[47](index=47&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - Immaterial errors related to historical estimated contract losses were corrected in previously issued financial statements, impacting net income attributable to the Company by an understatement of approximately **$5.1 million** cumulatively as of June 30, 2024[63](index=63&type=chunk)[64](index=64&type=chunk) [NOTE 3 - REVENUE](index=17&type=section&id=NOTE%203%20-%20REVENUE) This note details the company's revenue recognition policies and disaggregated revenue by contract type Disaggregated Revenue by Contract Type (in thousands) | Revenue by Contract Type | Three Months Ended March 31, 2025 | % | Three Months Ended March 31, 2024 | % | | :----------------------- | :-------------------------------- | :- | :-------------------------------- | :- | | Fixed price | $38,183 | 61 | $29,359 | 40 | | Cost reimbursable | $22,597 | 36 | $42,040 | 57 | | Time and materials | $1,744 | 3 | $1,820 | 3 | | Total | $62,524 | 100 | $73,219 | 100 | - Fixed-price revenue increased by **$8.8 million** (**30.0%**) YoY, becoming the largest revenue source - Cost-reimbursable revenue decreased by **$19.4 million** (**46.1%**) YoY - Amortization expense for deferred contract costs was **$8.0 million** in Q1 2025, up from **$3.5 million** in Q1 2024 - Revenue recognized from beginning-of-period contract liabilities was **$14.9 million** in Q1 2025, compared to **$7.3 million** in Q1 2024 - Net losses related to contracts with customers were **$1.3 million** in Q1 2025, compared to **$1.0 million** in Q1 2024[66](index=66&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - As of March 31, 2025, remaining fixed price performance obligations totaled **$135.9 million**, with **40-45%** expected to be recognized over the next **9 months**[72](index=72&type=chunk) [NOTE 4 - PROPERTY AND EQUIPMENT, NET](index=19&type=section&id=NOTE%204%20-%20PROPERTY%20AND%20EQUIPMENT%2C%20NET) This note provides details on the company's property and equipment, including gross amounts, accumulated depreciation, and net values Property and Equipment, Net (in thousands) | Asset Category | March 31, 2025 | December 31, 2024 | | :----------------------- | :------------- | :---------------- | | Property and equipment, gross | $34,711 | $27,874 | | Less: accumulated depreciation and amortization | $(4,918) | $(4,510) | | Property and equipment, net | $29,793 | $23,364 | - Net property and equipment increased by **$6.4 million** (**27.5%**) from December 31, 2024, to March 31, 2025 - Construction in progress includes **$11.1 million** for a commercial communications satellite and **$9.0 million** for a satellite communications and navigation network[74](index=74&type=chunk)[75](index=75&type=chunk) [NOTE 5 - DEBT](index=19&type=section&id=NOTE%205%20-%20DEBT) This note outlines the company's debt arrangements, including credit facilities and loan repayments - On March 4, 2025, the company entered into a **$40.0 million** secured revolving credit facility with Stifel Bank, maturing April 30, 2027, with no outstanding debt as of March 31, 2025[76](index=76&type=chunk)[78](index=78&type=chunk) - The Live Oak Credit Mobilization Facility was fully repaid and terminated in July 2024[79](index=79&type=chunk) - A **$10.0 million** Bridge Loan from Pershing LLC was repaid in full on January 29, 2024, through contributions from a guarantor, resulting in the issuance of Class A Common Stock and Conversion Warrants[80](index=80&type=chunk)[82](index=82&type=chunk) [NOTE 6 - INCOME TAXES](index=20&type=section&id=NOTE%206%20-%20INCOME%20TAXES) This note details the company's income tax expense, effective tax rates, and valuation allowances - The company recognized no U.S. federal and state income tax expense for the three months ended March 31, 2025 and 2024, with an effective combined U.S. federal and state income tax rate of **0.0%** for both periods[84](index=84&type=chunk) - Due to historical losses, management has applied a full valuation allowance to deferred tax assets, and no Tax Receivable Agreement (TRA) liability is expected to be recorded as of March 31, 2025[86](index=86&type=chunk) [NOTE 7 - MEZZANINE EQUITY AND EQUITY](index=21&type=section&id=NOTE%207%20-%20MEZZANINE%20EQUITY%20AND%20EQUITY) This note provides information on the company's capital stock, preferred stock, and redeemable noncontrolling interests Capital Stock Information as of March 31, 2025 | Stock Type | Authorized Shares | Issued Shares | Outstanding Shares | | :----------------- | :---------------- | :------------ | :----------------- | | Class A Common Stock | 500,000,000 | 119,329,328 | 117,138,248 | | Class C Common Stock | 100,000,000 | 61,301,804 | 61,301,804 | | Series A Preferred Stock | 25,000,000 | 5,000 | 5,000 | - The company repurchased **941,080** shares of Class A Common Stock for **$20.7 million** in connection with the Warrant Redemption[89](index=89&type=chunk) - The Series A Preferred Stock conversion price was reduced from **$12.00** to **$3.00** per share due to private placement and warrant exercise agreements[90](index=90&type=chunk) - Redeemable noncontrolling interests, representing **34.4%** ownership in Intuitive Machines, LLC, have the right to exchange common units for Class A Common Stock or cash, subject to Board approval[93](index=93&type=chunk) [NOTE 8 - WARRANTS](index=22&type=section&id=NOTE%208%20-%20WARRANTS) This note details the company's warrant activity, including redemptions, exercises, and fair value changes - All outstanding Public and Private Warrants were redeemed on March 6, 2025, for **$0.01** per warrant. Prior to redemption, **15,358,229** warrants were exercised, generating **$176.6 million** in gross proceeds[98](index=98&type=chunk) - The Series A Preferred Warrants' exercise price was reduced from **$15.00** to **$11.50** per share, and the number of issuable shares increased to **706,522**. No exercises of these warrants have occurred as of March 31, 2025[102](index=102&type=chunk)[103](index=103&type=chunk) - Conversion Warrants, issued in connection with the January 2024 Bridge Loan Conversion, were initially classified as derivative liabilities. The company recognized a **$43.0 million** gain from the change in fair value of the Conversion Series A Warrant liability in Q1 2025[109](index=109&type=chunk)[111](index=111&type=chunk) Warrant Activity for Three Months Ended March 31, 2025 | Warrant Type | Balance, Dec 31, 2024 | Warrant Exercises | Warrant Redemptions | Balance, Mar 31, 2025 | | :------------------ | :-------------------- | :---------------- | :------------------ | :-------------------- | | Public and Private Warrants | 21,929,953 | (15,358,229) | (6,571,724) | — | | Series A Preferred Warrants | 706,522 | — | — | 706,522 | | Conversion Series B Warrants | 4,150,780 | — | — | 4,150,780 | [NOTE 9 - SHARE-BASED COMPENSATION](index=25&type=section&id=NOTE%209%20-%20SHARE-BASED%20COMPENSATION) This note outlines the company's share-based compensation plans, expenses, and unrecognized costs - Share-based compensation expense for options was **$47 thousand** in Q1 2025, down from **$114 thousand** in Q1 2024. Unrecognized costs for options are **$271 thousand**, to be recognized over **2.27 years**[117](index=117&type=chunk) - The 2023 Long Term Omnibus Incentive Plan authorized **12,706,811** shares of Class A Common Stock, with **7,652,301** shares available for future grants as of March 31, 2025[119](index=119&type=chunk) - Share-based compensation expense for RSUs was **$2.7 million** in Q1 2025 (up from **$1.1 million** in Q1 2024) and for PSUs was **$0.1 million** in Q1 2025 (down from **$2.7 million** in Q1 2024) - Unrecognized costs for RSUs and PSUs are **$19.4 million** and **$0.2 million**, respectively, to be recognized over weighted average periods of **3.27 years** and **0.42 years**[122](index=122&type=chunk) [NOTE 10 - FAIR VALUE MEASUREMENTS](index=26&type=section&id=NOTE%2010%20-%20FAIR%20VALUE%20MEASUREMENTS) This note describes the fair value measurements of the company's liabilities, including earn-out and warrant liabilities Fair Value of Liabilities (in thousands) | Liabilities | March 31, 2025 | December 31, 2024 | | :------------------------ | :------------- | :---------------- | | Earn-out liabilities | $— | $134,156 | | Warrant liabilities - Series A | $25,776 | $68,778 | | Total liabilities measured at fair value | $25,776 | $202,934 | - Earn-out liabilities were fully converted to equity during Q1 2025, decreasing from **$134.2 million** to **$0** - Warrant liabilities (Series A) decreased by **$43.0 million** due to changes in fair value[125](index=125&type=chunk) - The fair value of Conversion Series A Warrant liabilities as of March 31, 2025, was estimated using a Black-Scholes-Merton model with a Class A Common Stock price of **$7.45** and expected volatility of **98%**[127](index=127&type=chunk) [NOTE 11 - NET LOSS PER SHARE](index=28&type=section&id=NOTE%2011%20-%20NET%20LOSS%20PER%20SHARE) This note presents the calculation of basic and diluted net loss per share for Class A Common Stock Net Loss Per Share of Class A Common Stock (in thousands, except share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net loss attributable to Class A common shareholders | $(11,543) | $(97,957) | | Basic and diluted weighted-average shares outstanding | 107,081,918 | 36,612,270 | | Net loss per share - basic and diluted | $(0.11) | $(2.68) | - Net loss per share significantly improved from **$(2.68)** in Q1 2024 to **$(0.11)** in Q1 2025 - Potentially dilutive securities, including RSUs, PSUs, options, and warrants, were excluded from diluted EPS calculation as their effect would be anti-dilutive during loss periods[130](index=130&type=chunk)[131](index=131&type=chunk) [NOTE 12 - COMMITMENTS AND CONTINGENCIES](index=29&type=section&id=NOTE%2012%20-%20COMMITMENTS%20AND%20CONTINGENCIES) This note discloses the company's legal proceedings, accrued losses, and remaining purchase obligations - The company is involved in legal proceedings, with an accrued amount of approximately **$2.1 million** as of March 31, 2025, for probable and estimable losses[134](index=134&type=chunk) - A breach of contract action was filed in Delaware Chancery Court regarding Series A Preferred Stock conversion, which the company intends to vigorously defend[135](index=135&type=chunk) Remaining Purchase Obligations (in thousands) | Period | Amount Due | | :---------------- | :--------- | | Remaining 2025 | $35,800 | | 2026 | $37,700 | | 2027 | $20,300 | | Total | $93,800 | [NOTE 13 - RELATED PARTY TRANSACTIONS](index=29&type=section&id=NOTE%2013%20-%20RELATED%20PARTY%20TRANSACTIONS) This note details transactions with related parties, including revenue and expenses with affiliates - Affiliate revenue from KBR, Inc. (a **10%** equity holder in Space Network Solutions, LLC) was **$0.6 million** in Q1 2025, with related cost of revenue of **$6.3 million** - Affiliate revenue from ASES (a joint venture between Aerodyne and KBR) was **$0.3 million** in Q1 2025 - Expenses with X-energy, LLC (an affiliate of Kamal Ghaffarian, Chairman of the Board) were **$0.3 million** in Q1 2025[139](index=139&type=chunk)[141](index=141&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) [NOTE 14 - VARIABLE INTEREST ENTITIES](index=30&type=section&id=NOTE%2014%20-%20VARIABLE%20INTEREST%20ENTITIES) This note identifies and describes the company's variable interest entities (VIEs), including joint ventures - Space Network Solutions, LLC (SNS), a joint venture with KBR (**90%** IM interest), is a Variable Interest Entity (VIE) where Intuitive Machines is the primary beneficiary. SNS was awarded the OMES III contract by NASA[147](index=147&type=chunk)[148](index=148&type=chunk) - IX, LLC Joint Venture (IX LLC JV) with X-energy (**51%** IM interest) is also a VIE, with Intuitive Machines as the primary beneficiary. The JV is developing nuclear space propulsion and surface power systems[149](index=149&type=chunk)[150](index=150&type=chunk) [NOTE 15 - SEGMENT INFORMATION](index=32&type=section&id=NOTE%2015%20-%20SEGMENT%20INFORMATION) This note clarifies that the company operates in one reportable segment, with performance evaluated by consolidated net income and Adjusted EBITDA - The company operates in one operating and one reportable segment, underpinned by three core pillars: delivery services, data transmission services, and infrastructure as a service[152](index=152&type=chunk) - The Chief Operating Decision-Maker (CODM) evaluates consolidated Net income (loss) and Adjusted EBITDA for performance assessment and resource allocation[152](index=152&type=chunk) - Substantially all revenues are derived from U.S. customers, with foreign customer revenues being immaterial[153](index=153&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, condition, and operational results for Q1 2025, including business model, recent developments, and key factors [Overview](index=33&type=section&id=Overview) This overview introduces Intuitive Machines as a space technology company focused on cislunar and deep space commerce - Intuitive Machines is a space technology, infrastructure, and services company focused on cislunar and deep space commerce, operating under three core pillars: delivery services, data transmission services, and infrastructure as a service[159](index=159&type=chunk) - The company achieved the first U.S. soft lunar landing since **1972** with its Nova-C lander (IM-1 mission) in February **2024** and completed its IM-2 mission in March **2025**, landing at the southernmost location of the moon[160](index=160&type=chunk) - Intuitive Machines holds a leading position in NASA's Commercial Lunar Payload Services (CLPS) program, with **four** awards to date, and is engaging with the U.S. Department of Defense and Space Force to secure cislunar space[160](index=160&type=chunk)[161](index=161&type=chunk) [Our Business Model](index=34&type=section&id=Our%20Business%20Model) This section describes the company's revenue generation through orbital and lunar access services and its 'land-and-expand' strategy - The company generates revenue primarily through orbital and lunar access services and by collecting/transmitting cislunar data, employing a 'land-and-expand' strategy to increase value and repetitive revenue from customers[162](index=162&type=chunk)[163](index=163&type=chunk) - Three core pillars: * **Delivery Services:** Transportation and delivery of payloads to space, including lunar surface access. Achieved first U.S. soft lunar landing since **1972** (IM-1) and IM-2 mission to the lunar south pole * **Data Transmission Services:** Collection, processing, and interpretation of space-based data, including command, control, communications, reconnaissance, and prospecting. Awarded NSN contract by NASA in September **2024** * **Infrastructure as a Service:** Provides space assets for navigation, maintenance, scientific data collection, and system health monitoring. Awarded **$30.8 million** LTV contract by NASA in **2024**[168](index=168&type=chunk) - The company also pursues adjacent market opportunities, such as the JETSON Low Power project for AFRL, scalable reentry technologies, and federal engineering services contracts at NASA centers[166](index=166&type=chunk) [Recent Developments](index=34&type=section&id=Recent%20Developments) This section highlights key recent events, including warrant redemption, stock issuance, and new credit facilities - All outstanding warrants were redeemed on March 6, 2025, generating **$176.6 million** in gross proceeds from exercises. The company also repurchased **941,080** shares of Class A Common Stock for **$20.7 million**[167](index=167&type=chunk)[169](index=169&type=chunk) - **7,500,000** shares of Class C Common Stock were issued on February 4, 2025, upon the vesting of Earn Out Units related to Triggering Events II-A and III[170](index=170&type=chunk) - A new **$40.0 million** secured revolving credit facility with Stifel Bank was entered into on March 4, 2025, with no outstanding debt as of March 31, 2025[171](index=171&type=chunk) - In April 2025, the Texas Space Commission selected Intuitive Machines for a grant of up to **$10.0 million** to support the development of an Earth reentry vehicle and orbital fabrication lab[172](index=172&type=chunk) [Key Factors Affecting Our Performance](index=35&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) This section identifies critical factors influencing the company's future success, including macroeconomic pressures, product expansion, and innovation - The company's future success is influenced by: * **Inflation and Macroeconomic Pressures:** Monitoring volatile disruptions, rising interest rates, inflation, supply chain issues, and geopolitical tensions, though no material impact on **2025** results is expected from trade policy changes * **Ability to Expand Product and Services Offerings:** Dependent on winning lunar missions, expanding service portfolio, and continued investment in R&D, with a focus on lower price points and far-side connectivity * **Ability to Expand Spaceflight Mission Operations:** Success relies on establishing a regular cadence of missions, with **$272.3 million** in backlog as of March 31, 2025 * **Ability to Capitalize on Government Expenditures and Private Enterprise Investment:** Growth is fueled by increased government spending and private investment in the space economy, but subject to changes in U.S. federal budget priorities * **Ability to Improve Profit Margins and Scale Business:** Dependent on improving operating leverage, increasing utilization, and managing production efficiency, material costs, and supply chain * **Ability to Continue to Innovate:** Requires substantial investments in R&D for landers, lunar data networks, and other space systems to maintain market share and attract customers[173](index=173&type=chunk)[174](index=174&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk) [Components of Results of Operations](index=37&type=section&id=Components%20of%20Results%20of%20Operations) This section explains the key components of the company's financial results, including revenue, cost of revenue, and general and administrative expenses - Revenue is primarily from fixed-price, cost-reimbursable, and time-and-materials contracts, recognized over time using the cost-to-cost method. Variable consideration, often dependent on successful mission landing, can cause fluctuations - Cost of revenue (excluding depreciation) includes direct material and labor, launch costs, and manufacturing overhead, expected to increase in absolute dollars but decrease as a percentage of revenue over time - General and administrative expense (excluding depreciation) includes personnel, professional services, and public company costs, expected to increase in absolute dollars - Other income (expense), net includes interest income/expense, changes in fair value of earn-out and warrant liabilities, and loss on issuance of securities[188](index=188&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk)[193](index=193&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk) - Net income (loss) attributable to redeemable noncontrolling interest represents the portion of Intuitive Machines, LLC's net income or loss allocated to noncontrolling interests (**34.4%** in Q1 2025)[202](index=202&type=chunk)[203](index=203&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) This section analyzes the company's consolidated financial performance for the three months ended March 31, 2025, compared to the prior year Consolidated Results of Operations (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change | % Change | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | :------- | :------- | | Revenue | $62,524 | $73,219 | $(10,695) | (14.6%) | | Total operating expenses | $72,601 | $75,994 | $(3,393) | (4.5%) | | Operating loss | $(10,077) | $(2,775) | $(7,302) | (263.1%) | | Total other income (expense), net | $11,052 | $(115,256) | $126,308 | (109.6%) | | Net income (loss) | $975 | $(118,031) | $119,006 | (100.8%) | | Net loss attributable to the Company | $(11,396) | $(97,486) | $86,090 | (88.3%) | - Revenue decreased by **$10.7 million** (**15%**) YoY, primarily due to a **$20.1 million** decrease from the OMES III contract (NASA OSAM project cancellation), partially offset by increases from LTV (**$6.9 million**) and NSN (**$3.0 million**) contracts - IM-1 mission completed in February **2024**, releasing **$12.3 million** of previously constrained revenue in Q1 **2024** - IM-2 mission completed in March **2025**, with revenue increasing slightly by **$2.7 million** YoY - IM-3 mission revenue increased to **$7.3 million** in Q1 **2025** from **$5.5 million** in Q1 **2024**, and the IM-4 mission (awarded August **2024**) recognized **$6.4 million** in Q1 **2025** - Total cost of revenue decreased by **$3.4 million** (**6%**) YoY, mainly due to a **$19.4 million** decrease from the OMES III contract, offset by increases from mission contracts (**$5.3 million**), LTV (**$7.7 million**), and NSN (**$1.6 million**) - General and administrative expense decreased slightly by **$0.3 million** YoY, driven by lower share-based compensation and professional fees, offset by higher employee compensation - Total other income (expense), net, showed a favorable change of **$126.3 million** YoY, primarily due to a **$67.0 million** favorable change in warrant liabilities fair value and the non-recurrence of a **$68.7 million** loss on issuance of securities[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) [Key Business Metrics and Non-GAAP Financial Measures](index=42&type=section&id=Key%20Business%20Metrics%20and%20Non-GAAP%20Financial%20Measures) This section defines and presents key business metrics like backlog and non-GAAP financial measures such as Adjusted EBITDA - Backlog is defined as total estimated future revenue from awarded contracts, less recognized revenue. It serves as a forward-looking indicator of potential sales[218](index=218&type=chunk) Backlog (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :------- | :------------- | :---------------- | | Backlog | $272,336 | $328,345 | - Backlog decreased by **$56.0 million** from December 31, 2024, to March 31, 2025, due to performance on existing contracts, partially offset by new awards - Approximately **45-50%** of the backlog is expected to be recognized over the remainder of **2025**, and **25-30%** in **2026** - Backlog of **$272.3 million** exceeded remaining performance obligations of **$135.9 million**, with the difference primarily related to constrained variable consideration and funded value of certain contracts[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net income (loss) | $975 | $(118,031) | | Adjusted EBITDA | $(6,610) | $1,565 | - Adjusted EBITDA is a non-GAAP measure used to assess operating performance, excluding non-operating items like interest, share-based compensation, and fair value changes. It decreased from **$1.6 million** in Q1 **2024** to **$(6.6) million** in Q1 **2025**[222](index=222&type=chunk)[226](index=226&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, capital resources, and ability to fund its operations - As of March 31, 2025, the company had **$373.3 million** in cash and cash equivalents and **$333.2 million** in working capital[232](index=232&type=chunk) - The company received **$176.6 million** in gross proceeds from warrant exercises in Q1 **2025** and entered into a new **$40.0 million** secured revolving credit facility with Stifel Bank[232](index=232&type=chunk)[233](index=233&type=chunk) - Management believes current cash and cash equivalents are sufficient to fund short-term liquidity needs and the business plan for at least the next **twelve months**[234](index=234&type=chunk) [Cash Flows](index=44&type=section&id=Cash%20Flows) This section summarizes the company's cash flows from operating, investing, and financing activities Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $19,419 | $(6,442) | | Net cash used in investing activities | $(6,122) | $(1,588) | | Net cash provided by financing activities | $152,349 | $60,754 | | Net increase in cash, cash equivalents and restricted cash | $165,646 | $52,724 | | Cash and cash equivalents at end of the period | $373,253 | $55,242 | - Operating activities provided **$19.4 million** in Q1 **2025**, a significant improvement from using **$6.4 million** in Q1 **2024** - Investing activities used **$6.1 million** in Q1 **2025**, an increase of **$4.5 million** YoY, primarily due to capital expenditures for the new NSN contract - Financing activities provided **$152.3 million** in Q1 **2025**, up from **$60.8 million** in Q1 **2024**, mainly from warrant exercises (**$176.6 million**) offset by share repurchases (**$20.7 million**)[236](index=236&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk) [Contractual Obligations and Commitments](index=45&type=section&id=Contractual%20Obligations%20and%20Commitments) This section details the company's significant contractual obligations and commitments, including operating leases and purchase commitments Significant Contractual Obligations and Commitments as of March 31, 2025 (in thousands) | Obligation Type | Total | 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | | :---------------- | :--------- | :--------- | :--------- | :--------- | :-------- | :-------- | :--------- | | Operating lease obligations | $68,952 | $1,920 | $2,614 | $2,175 | $2,264 | $2,710 | $57,269 | | Finance lease obligations | $111 | $38 | $45 | $21 | $7 | $— | $— | | Purchase commitments | $93,770 | $35,750 | $37,733 | $20,287 | $— | $— | $— | | Total | $162,833 | $37,708 | $40,392 | $22,483 | $2,271 | $2,710 | $57,269 | - Total contractual obligations and commitments amounted to **$162.8 million** as of March 31, 2025, with significant portions due in **2025** (**$37.7 million**) and **2026** (**$40.4 million**)[239](index=239&type=chunk) [Critical Accounting Policies and Estimates](index=45&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section discusses the critical accounting policies and estimates that require significant judgment in financial statement preparation - The preparation of financial statements requires significant estimates and judgments, particularly in revenue recognition for long-term contracts, where total revenue and cost at completion are complex to estimate[245](index=245&type=chunk)[247](index=247&type=chunk)[250](index=250&type=chunk) - Revenue is recognized over time using the cost-to-cost method for most performance obligations, with variable consideration included only to the extent that a significant reversal of cumulative revenue is improbable[249](index=249&type=chunk)[251](index=251&type=chunk) - As an emerging growth company (EGC), the company has elected to use the extended transition period for new or revised financial accounting standards, which may affect comparability with other public companies[253](index=253&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Intuitive Machines, Inc. is exempt from providing market risk disclosures - The company is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a smaller reporting company[256](index=256&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025, ensuring reasonable assurance for timely and accurate reporting[257](index=257&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the three months ended March 31, 2025[258](index=258&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings and claims, with details on commitments and contingencies in Note 12 - The company is subject to various legal proceedings and claims in the ordinary course of business, with details on commitments and contingencies provided in Note 12[260](index=260&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) This section refers to risk factors from the 2024 Form 10-K, noting no material changes as of this Quarterly Report - No material changes to the risk factors disclosed in the **2024** Annual Report on Form 10-K have occurred as of the date of this Quarterly Report, except as specifically disclosed[261](index=261&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Information on unregistered equity sales was previously disclosed in the Form 8-K filed on February 4, 2025 - Information on unregistered sales of equity securities was previously disclosed in the Current Report on Form 8-K filed on February 4, 2025[262](index=262&type=chunk) [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were no defaults upon senior securities[263](index=263&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[264](index=264&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) No other information is reported under this item - No other information is reported under this item[265](index=265&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report, including CEO/CFO certifications and Inline XBRL documents - The exhibits include certifications from the Chief Executive Officer and Chief Financial Officer, as well as Inline XBRL documents for financial data[267](index=267&type=chunk) Signatures [Report Signatures](index=50&type=section&id=Report%20Signatures) The report is signed by Peter McGrath, CFO, and Steven Vontur, Chief Accounting Officer, on May 13, 2025 - The report was signed by Peter McGrath, Chief Financial Officer, and Steven Vontur, Chief Accounting Officer, on May 13, 2025[272](index=272&type=chunk)

Space stock Intuitive Machines (LUNR 28.11%) posted positive free cash flow for the first quarter and forecast continued gains in the quarters to come.Investors are buying in, sending Intuitive shares up 30% as of 10:15 a.m. ET. Expanding into new marketsIntuitive Machines is focused on delivering payloads, data transmission, and space infrastructure, with an emphasis on the moon.The company generated $62.5 million in revenue in the quarter, down 14% year over year and slightly below what Wall Street had ex ...

Financial Data and Key Metrics Changes - Q1 revenue was $62.5 million, up 14% from Q4 2024, driven primarily by CLIPS, LTVs, and NSMS execution [27] - Gross profit for the quarter was $6.7 million, compared to $0.7 million in Q4 2024, marking the third consecutive quarter of positive gross margins [28] - Operating loss for the quarter was $10.1 million, improved from a loss of $13.4 million in Q4 2024 [29] - Positive free cash flow of $13.3 million was achieved for the first time in the company's history [30] - Cash balance increased to $373.3 million, driven by the redemption of warrants and positive free cash flow [32] Business Line Data and Key Metrics Changes - Under NASA's NSNS contract, $3 million in revenue was recognized during Q1, with an additional task order valued at $18 million issued for upcoming milestones [14] - The company secured a key contract for an Earth reentry vehicle, broadening its footprint across the space domain [11] - Significant progress was made in stealth satellite and orbital transfer vehicle programs during Q1 [11] Market Data and Key Metrics Changes - The company anticipates continued opportunities in civil and national security space due to evolving federal priorities and budgetary direction [6][7] - The backlog at the end of Q1 was $272.3 million, down from $328.3 million in Q4 2024, with expectations to recognize 45% to 50% in 2025 [34] Company Strategy and Development Direction - The company is diversifying into national security space and leveraging its lunar lander architecture for new government and commercial customers [11][13] - Intuitive Machines aims to build a comprehensive offering in lunar and Mars exploration, aligning with national priorities and long-term strategies [9][25] - The focus remains on execution and leveraging proven performance to expand into adjacent markets [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of core exploration programs despite potential budget reductions in NASA's science budget [9] - The company expects to achieve positive adjusted EBITDA by Q4 2025 and positive adjusted EBITDA for 2026 [35] - Management highlighted the importance of learning from past missions to improve future performance [22] Other Important Information - The company is actively discussing with National Security Space stakeholders to host multi-agency payloads on its Lunar Data Relay satellites [15] - A $40 million credit facility was opened to smooth out working capital fluctuations [33] Q&A Session Summary Question: Do reductions to the planetary science budget impact revenue opportunities from NASA payload deployment awards? - Management indicated no direct impact on the CLPS budget based on the president's budget [40] Question: Is there any risk of LTV delivery being changed or delayed due to the need for an alternative launch vehicle? - Management confirmed that the LTV procurement is moving forward and is not dependent on SLS [43] Question: Can you elaborate on the IM2 milestones expected to be recognized in Q2? - Management expects about half of the $14 million in success payments for IM2 to close in Q2 [55] Question: How does the company view the potential for M&A in the current market? - Management looks opportunistically at M&A to add capabilities that provide competitive advantages [69] Question: How does the company see the global competitive environment for NSN evolving? - Management noted that international collaboration is currently more prevalent than competition in the near space network [77]

Financial Data and Key Metrics Changes - Q1 revenue was $62.5 million, up 14% from Q4 2024, driven primarily by CLIPS, LTVs, and NSMS execution [26] - Gross profit for the quarter was $6.7 million, compared to $0.7 million in Q4 2024, marking the third consecutive quarter of positive gross margins [27] - Operating loss decreased to $10.1 million from $13.4 million in Q4 2024, driven by higher gross profits [28] - Positive free cash flow of $13.3 million was achieved for the first time in the company's history [29] - Cash balance increased to $373.3 million, driven by the redemption of warrants and positive free cash flow [30] Business Line Data and Key Metrics Changes - Under NASA's NSNS contract, $3 million in revenue was recognized during Q1, with an additional task order valued at $18 million issued for upcoming milestones [13] - The company secured a $10 million contract from the Texas Space Commission for developing a precision Earth reentry vehicle [12] - Significant progress was made in stealth satellite and orbital transfer vehicle programs, with a key contract award for an Earth reentry vehicle [10] Market Data and Key Metrics Changes - The company is leveraging federal budget signals and NASA's funding priorities to expand into adjacent markets like national security space [6] - The evolving federal landscape presents opportunities for Intuitive Machines, particularly in civil and national security space [5] Company Strategy and Development Direction - The company aims to diversify into national security space while continuing to execute on its core exploration programs [10] - Intuitive Machines is focused on delivering end-to-end space services from lunar surface operations to precision Earth reentry [12] - The company is advancing its Lunar Terrain Vehicle Services contract and integrating its data transmission architecture to enhance competitiveness [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of core exploration programs despite potential budget reductions in NASA's science budget [7] - The company anticipates continued opportunities for key contract awards throughout the year, with a focus on execution [25] - Management highlighted the importance of learning from past missions to improve future performance and maintain a competitive edge [21] Other Important Information - The company ended Q1 with a contracted backlog of $272.3 million, down from $328.3 million in Q4 2024 [32] - Guidance for 2025 revenue is expected to range between $250 million and $300 million, with a positive adjusted EBITDA run rate by Q4 2025 [34] Q&A Session Summary Question: Do reductions to the planetary science budget impact revenue opportunities from NASA payload deployment awards? - Management indicated that they do not see a direct impact on the CLPS budget based on the president's budget [39] Question: Is there any risk of LTV delivery being changed or delayed due to the need for an alternative launch vehicle? - Management stated that the Lunar Terrain Vehicle Services contract procurement is moving forward and is not dependent on SLS [42] Question: How does the company differentiate its reentry vehicle in the market? - The company highlighted its unique precision landing capabilities and soft touchdown technology as differentiators [46] Question: What is the company's view on nuclear propulsion and its applications in space? - Management discussed ongoing work on low power nuclear propulsion systems and their potential for sustained presence in space [48] Question: Can you elaborate on the IM2 milestones expected to be recognized in Q2? - Management expects to close out about $14 million in success payments for the IM2 mission, with half expected in Q2 [54] Question: How does the company view the potential for M&A in the current market? - Management is looking opportunistically at M&A to add capabilities that provide competitive advantages [66] Question: How does the company view the competitive environment for NSN? - Management noted that the near space network market is emerging and currently collaborative rather than competitive [76]

Financial Performance - Q1 2025 revenue reached $62.5 million, a 14% increase compared to Q4 2024[82, 86] - Gross margin expanded to 11%, amounting to $6.7 million in Q1 2025[82] - The company generated $19.4 million in positive operating cash flow in Q1, resulting in a positive free cash flow of $13.3 million after $6.1 million in capital expenditures[84] - The company ended Q1 with a cash balance of $373.3 million[85] - Backlog as of March 31, 2025, was $272.3 million, a 22% year-over-year increase[94, 95] Key Projects and Milestones - The company executed the first two milestones for NASA's NSNS contract for $9 million and received an additional $18 million for the next two milestones[15] - The company received a $10 million grant from the Texas Space Commission to develop an Earth reentry vehicle and microgravity research lab[21] - Phase two activities for the Orbital Transfer Vehicle (OTV) are underway under a letter contract with a government customer, valued at approximately $11 million[30] - IM-2 mission successfully landed on the south pole region of the Moon[17] Outlook - The company anticipates full-year 2025 revenue to be between $250 million and $300 million[104] - The company expects to achieve positive run-rate Adjusted EBITDA by the end of 2025 and be Adjusted EBITDA positive in 2026[104, 105]

[Financial and Operational Highlights](index=1&type=section&id=Highlights) Intuitive Machines achieved a second lunar landing and key contract milestones in Q1 2025, reporting **$62.5 million revenue** and **$13.3 million positive free cash flow** - The company is leveraging its proven performance to expand into adjacent markets like National Security Space and other non-lunar domains, positioning itself as a broader space economy infrastructure and data services provider[3](index=3&type=chunk)[4](index=4&type=chunk) - Key Operational Achievements in Q1 2025: * Landed its second mission on the Moon's south pole region * Completed the preliminary design review for the Lunar Terrain Vehicle Services (LTVS) * Executed the first two milestones for NASA's Near Space Network Services (NSNS) contract, earning **$9 million** * Received a **$10 million** grant from the Texas Space Commission to develop an Earth reentry vehicle * Performed phase one of the Air Force's JETSON contract for low-power nuclear electric propulsion[5](index=5&type=chunk) Q1 2025 Financial Highlights | Metric | Value | Note | | :--- | :--- | :--- | | Revenue | $62.5 million | Up 14% vs. Q4 2024 | | Gross Margin | 11% ($6.7 million) | Third consecutive quarter of positive gross margin | | Operating Cash Flow | $19.4 million | - | | Free Cash Flow | $13.3 million | - | | Cash at End of Quarter | $373.3 million | Following warrant redemption process | [2025 Outlook](index=1&type=section&id=2025%20Outlook) The company projects full-year 2025 revenue between **$250 million and $300 million**, targeting positive adjusted EBITDA by late 2025 and for 2026 Full-Year 2025 Guidance | Metric | Outlook | | :--- | :--- | | Revenue | $250 - $300 million | | Adjusted EBITDA | Positive run-rate by end of 2025 | | 2026 Adjusted EBITDA | Positive | [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q1 2025, covering Balance Sheet, Operations, and Cash Flows [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to **$500.0 million**, driven by cash, while total liabilities decreased to **$172.4 million** Condensed Consolidated Balance Sheets (In thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $431,312 | $293,161 | | **Total assets** | **$500,014** | **$355,404** | | **Total current liabilities** | $98,148 | $98,831 | | **Total liabilities** | **$172,400** | **$351,483** | | **Total shareholders' deficit** | ($135,223) | ($1,008,034) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 revenue was **$62.5 million**, resulting in a **$10.1 million operating loss**, but achieved **$1.0 million net income** due to warrant fair value changes Condensed Consolidated Statements of Operations (In thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Revenue** | **$62,524** | **$73,219** | | Total operating expenses | $72,601 | $75,994 | | **Operating loss** | **($10,077)** | **($2,775)** | | Total other income (expense), net | $11,052 | ($115,256) | | **Net income (loss)** | **$975** | **($118,031)** | | Net loss attributable to Class A common shareholders | ($11,543) | ($97,957) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, the company generated **$19.4 million** cash from operations and **$152.3 million** from financing, increasing cash by **$165.6 million** Condensed Consolidated Statements of Cash Flows (In thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | **$19,419** | **($6,442)** | | Net cash used in investing activities | ($6,122) | ($1,588) | | **Net cash provided by financing activities** | **$152,349** | **$60,754** | | Net increase in cash, cash equivalents and restricted cash | $165,646 | $52,724 | | **Cash and cash equivalents at end of the period** | **$373,253** | **$55,242** | [Non-GAAP Financial Measures and Other Metrics](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Other%20Metrics) This section presents key non-GAAP financial measures, including Adjusted EBITDA, Free Cash Flow, and backlog, for performance and future revenue insights - The company uses non-GAAP measures like Adjusted EBITDA and Free Cash Flow, as well as contracted backlog, to help investors understand operating trends, liquidity, and potential future sales[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk) [Adjusted EBITDA Reconciliation](index=8&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q1 2025 was a **$6.6 million loss**, compared to **$1.6 million positive** in Q1 2024, after adjusting for non-operating items Adjusted EBITDA Reconciliation (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income (loss) | $975 | ($118,031) | | Adjustments | ($7,585) | $119,596 | | **Adjusted EBITDA** | **($6,610)** | **$1,565** | [Free Cash Flow Reconciliation](index=8&type=section&id=Free%20Cash%20Flow) The company generated **$13.3 million positive Free Cash Flow** in Q1 2025, a significant improvement from an **$8.0 million outflow** in Q1 2024 Free Cash Flow Reconciliation (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $19,419 | ($6,442) | | Purchases of property and equipment | ($6,122) | ($1,588) | | **Free cash flow** | **$13,297** | **($8,030)** | [Backlog](index=8&type=section&id=Backlog) Contracted backlog was **$272.3 million** as of March 31, 2025, a **$56.0 million decrease** from year-end 2024, reflecting revenue recognized and new awards Backlog (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Backlog | $272,336 | $328,345 | - The backlog decreased by **$56.0 million** primarily due to recognizing **$62.5 million** in revenue from existing contracts, which was slightly offset by **$6.5 million** in new contract awards[27](index=27&type=chunk) [Company Information and Disclosures](index=3&type=section&id=Company%20Information%20and%20Disclosures) This section provides a corporate overview, contact information, and legal disclaimers, including forward-looking statement warnings - Intuitive Machines is a diversified space technology, infrastructure, and services company focused on disrupting lunar access economics through three pillars: Delivery Services, Data Transmission Services, and Infrastructure as a Service[12](index=12&type=chunk) - The press release contains forward-looking statements regarding mission timing, contract bids, revenue expectations, and business strategy, which are subject to numerous risks and uncertainties, and actual results may differ materially[13](index=13&type=chunk)[14](index=14&type=chunk) - The company will host a conference call and webcast on May 13, 2025, at 8:30 am Eastern Time to discuss the results, with a replay available on its investor relations website[7](index=7&type=chunk)[8](index=8&type=chunk)

Core Insights - Intuitive Machines, Inc. reported financial results for Q1 2025, highlighting a revenue increase and positive cash flow, while also emphasizing strategic expansion into adjacent markets [1][4][11]. Financial Performance - The company achieved revenue of $62.5 million in Q1 2025, a 14% increase compared to Q4 2024 [4]. - Gross margin expanded to 11%, or $6.7 million, marking the third consecutive quarter of positive gross margin [4]. - Positive operating cash flow of $19.4 million was generated in Q1, resulting in free cash flow of $13.3 million [4][28]. Strategic Developments - Intuitive Machines is diversifying into adjacent markets such as National Security Space, leveraging its existing capabilities [3][4]. - The company completed a preliminary design review for Lunar Terrain Vehicle Services (LTVS) and was awarded a NASA contract to support lunar surface logistics [4][12]. Outlook - The full-year 2025 revenue outlook is projected between $250 million and $300 million, with expectations for positive adjusted EBITDA by the end of 2025 [11][12]. - The company anticipates recognizing success payments from the IM-2 lunar mission in Q2 2025 [4]. Backlog and Contracts - As of March 31, 2025, the contracted backlog was $272.3 million, a decrease of $56 million from December 31, 2024, primarily due to performance on existing contracts [32].

Core Viewpoint - Intuitive Machines, Inc. (LUNR) is expected to report a decline in first-quarter revenues while showing improvement in its bottom line compared to the previous year, despite recent setbacks in its lunar missions [2][5][6]. Financial Performance - The Zacks Consensus Estimate for first-quarter revenues is $59.4 million, reflecting an 18.7% decline from the same quarter last year [2]. - The consensus estimate for the bottom line is a loss of $0.10 per share, which is an improvement from a loss of $0.21 per share reported in the prior-year quarter [2]. - The bottom-line estimate has deteriorated from a loss of $0.05 per share in the past 60 days [2]. Earnings Surprise History - LUNR has a mixed earnings surprise history, outperforming the Zacks Consensus Estimate in three out of the last four quarters, with an average earnings surprise of 69.92% [2][3]. Recent Developments - The company has experienced a setback with its second lunar mission, IM-2, which tipped over upon landing, likely impacting first-quarter results negatively [6]. - Increased selling, general, and administrative expenses due to public company costs and employee benefits are expected to negatively affect earnings performance [7]. - A recent contract awarded by NASA for lunar logistics is anticipated to boost the company's order book and backlog count [8]. Stock Performance - LUNR's shares have increased by 52.3% over the past year, outperforming the Zacks Aerospace-Defense industry's growth of 7.3% and the broader sector's growth of 11.8% [9]. - The stock's forward 12-month price-to-sales (P/S) ratio is 5.24X, significantly higher than the industry average of 2.02X, indicating a premium valuation [11]. Industry Context - The market for space exploration is experiencing solid growth, driven by investments from private companies and governments, which is beneficial for companies like LUNR [15]. - LUNR is developing its largest lander, Nova-M, which is expected to generate substantial revenues upon launch [15]. Investment Considerations - Despite the company's strong stock performance, there are concerns regarding its ability to meet earnings expectations for the first quarter, given the unfavorable earnings ESP and recent downward revisions in estimates [17].

Company Overview - Intuitive Machines has made significant progress since its February 2023 IPO, securing four NASA contracts for lunar payload deliveries, completing two missions with partial success, indicating a design flaw in the Nova-C lander [2][3] - The company generates $77 million and up from NASA for each landing attempt, with annual revenue reaching $228 million last year, tripling from 2023, and projected to grow to $280 million this year (23% growth) and $387 million next year (38% growth) [3][4] Financial Performance - Despite revenue growth, Intuitive Machines is not yet profitable, recording over $343 million in losses last year, primarily due to stock warrant retirement costs; analysts expect losses to decrease to less than $35 million this year, with potential for a small GAAP profit by 2026 [5] - The company has a $4.8 billion, 10-year contract with NASA to build and operate a Near Space Network, valued at approximately $480 million per year, which could significantly boost revenue beyond current forecasts [9] Future Outlook - NASA's current contract schedule allows for about one mission per year, limiting short-term growth until design issues are resolved; however, the NSN contract could sustain growth for Intuitive Machines [7][9] - Analysts predict that annual revenue could average at least twice the current amount over the next five years, with potential revenue reaching $625 million and a net profit margin of 18% [12] Valuation - Intuitive Machines stock is currently valued at around $1 billion, translating to over 4 times trailing sales, which is near the upper limit for valuations of unprofitable space stocks [13]

Core Insights - The space industry is experiencing accelerated growth due to rising geopolitical tensions, rapid digitization, and increasing government-private partnerships, with Intuitive Machines (LUNR) and Rocket Lab (RKLB) emerging as key players [1][2] Financials and Growth Outlook - Rocket Lab ended 2024 with cash and cash equivalents of $419 million, current debt of $12 million, and long-term debt of $404 million, indicating a moderate solvency position [3] - The company secured over $450 million in new launch and space systems contracts in the previous year, including a significant $1.45 billion contract for a hypersonic test flight for the Department of Defense [4] - Additionally, Rocket Lab won a $5.6 billion award from the U.S. Space Force for national security missions, enhancing its revenue growth prospects [5] - Intuitive Machines concluded 2024 with cash and cash equivalents of $210 million and no debt, reflecting a solid solvency position [6] - The company is developing its largest lander, the Nova-M, expected to generate substantial revenues, and has a backlog of $328.3 million, a 22% year-over-year increase [7] Key Risks - Intuitive Machines faces risks related to its dependence on NASA-funded programs and the success of its lunar missions, which could impact future contract awards [8] - Rocket Lab's high operating expenses from investments in innovations may offset revenue gains, leading to losses [9] - Legal challenges, including a securities class action lawsuit, could affect Rocket Lab's investor confidence and future government contracts [10] Sales Estimates - The Zacks Consensus Estimate for Intuitive Machines' 2025 sales indicates a 19.2% year-over-year increase, while Rocket Lab's estimate suggests a 32.1% increase [11][12] Stock Performance - Over the past three months, Intuitive Machines' stock has decreased by 60.3%, while Rocket Lab's has decreased by 22.9%. However, over the past year, Intuitive Machines' shares surged by 66.7%, compared to Rocket Lab's 481.9% increase [14] Valuation - Intuitive Machines is trading at a forward sales multiple of 4.93X, which is more attractive compared to Rocket Lab's forward earnings sales of 15.18X [15] Return on Invested Capital - Both companies exhibit a negative Return on Invested Capital (ROIC), indicating insufficient profit generation from investments to cover capital costs [19] Conclusion - Both Intuitive Machines and Rocket Lab present opportunities in the evolving space economy, with LUNR's strong backlog and debt-free balance sheet positioning it for long-term growth, while RKLB's diversified business model offers near-term revenue visibility [20] - However, both companies face execution risks and earnings uncertainty, with LUNR's reliance on lunar missions and RKLB's high operating costs and legal issues potentially impacting performance [21][22]