Sidus Space(SIDU) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Results and Business Update This report details Sidus Space's Q2 2025 financial performance, operational achievements, and strategic business updates 1.1 Introduction and CEO Statement Sidus Space announced Q2 2025 financial results and a business update, with CEO Carol Craig highlighting disciplined execution, building durable technology assets like LizzieSat-3 and Orlaith™ AI, and a strategic pivot towards commercialization and capital-efficient revenue generation - Sidus Space (NASDAQ: SIDU) is an innovative space and defense technology company[1] - CEO Carol Craig stated that Q2 focused on disciplined execution and building durable technology assets, including LizzieSat-3 commissioning, a 24/7 Mission Operations Center, Fortis™ VPX, and Orlaith™ AI Ecosystem. The company invested ahead of revenue to build core IP and capability and is now prioritizing commercialization and capital-efficient revenue generation[2] 1.2 Operational Highlights Sidus Space achieved significant operational milestones, including completing LizzieSat-3 ADCS commissioning, fully staffing its 24/7 Mission Operations Center, securing a patent for its Modular Satellite Platform, deploying the Orlaith™ AI system in Asia, and expanding its lunar satellite manufacturing contract with Lonestar Holdings to $120 million 1.2.1 Subsequent Operational Highlights Sidus Space completed LizzieSat-3 ADCS commissioning, staffed its Mission Operations Center, secured a satellite platform patent, deployed Orlaith™ AI in Asia, and expanded its Lonestar contract to $120 million - Completed commissioning of the ADCS system on LizzieSat-3 with cutting-edge Autonomous, Machine-Learning-Powered on-board GNC software[5] - Fully staffed the in-house Mission Operations Center, enabling 24/7 spacecraft monitoring[5] - Received Notice of Allowance for the Modular Satellite Platform patent, safeguarding adaptable and scalable satellite architecture IP[5] - Deployed Orlaith™ AI system in Asia, strengthening global AI and analytics offerings[5] - Amended and extended the lunar satellite manufacturing contract with Lonestar Holdings, increasing the total potential value to $120 million[5] - Designed LizzieLunar™ to address the Moon's unique operational challenges[5] - Successfully executed a capital raise to fund key technology initiatives, including the dual-use, multi-domain Fortis™ VPX product line[5] - Appointed Tiffany Norwood, Founder and CEO of Tribetan, to the Board of Directors[5] 1.3 Financial Highlights (Summary) Sidus Space reported Q2 2025 revenue of $1.3 million, up 36% YoY, driven by a strategic shift from legacy services. However, gross profit declined to a $(1.0) million loss, and net loss increased to $5.6 million, reflecting strategic investments and depreciation. Cash position improved significantly to $3.6 million from $1.4 million a year prior Financial Highlights Summary | Metric | Q2 2025 ($) | Q2 2024 ($) | Change ($) | % Change | | :-------------------- | :---------- | :---------- | :----- | :------- | | Revenue | $1.3 million | $928,000 | +$372,000 | +36% | | Cost of Revenue | $2.3 million | N/A | N/A | +29% | | Gross Profit (Loss) | $(1.0) million | $(841,000) | $(159,000) | -19% | | SG&A Expenses | $4.3 million | $3.1 million | +$1.2 million | +39% | | Adjusted EBITDA (Loss) | $(3.9) million | $(3.2) million | $(0.7) million | -22% | | Net Loss | $(5.6) million | $(4.1) million | $(1.5) million | -37% | - Cash Position: $3.6 million as of June 30, 2025, versus $1.4 million a year earlier[9] - Revenue increase reflects a strategic pivot away from legacy services to new commercial models[9] - Cost of Revenue increase due to increased satellite and software depreciation and higher material and labor costs[9] - Gross Profit (Loss) due to reduced contribution from legacy high-margin services as the company transitions to higher-value, recurring revenue lines[9] - SG&A Expenses increase driven by headcount growth, launch rescheduling, and operational scaling[9] - Net Loss driven by strategic investment and depreciation[9] 2. Conference Call and Webcast Information Sidus Space hosted a conference call and webcast on August 14, 2025, to discuss its Q2 financial results, with replay and online archive options available for interested parties - Event: Sidus Space Second Quarter Financial Results Conference Call[7] - Date & Time: Thursday, August 14, 2025, at 5:00 p.m. Eastern Time[7] - Access: Live call via U.S. Toll-Free (+1-877-269-7751) or International (+1-201-389-0908) numbers, and webcast available at https://viavid.webcasts.com/starthere.jsp?ei=1729391&tp_key=88085fa059[7](index=7&type=chunk) - Replay: Dial-in replay available until Thursday, August 28, 2025, by dialing +1-844-512-2921 (U.S. Toll-Free) or +1-412-317-6671 (International) and entering replay pin number: 13755242[7] - Archive: An online archive of the webcast will be available for three months following the event at https://investors.sidusspace.com/[8](index=8&type=chunk) 3. About Sidus Space Sidus Space is an innovative space and defense technology company providing flexible, cost-effective solutions including satellite manufacturing, AI-driven data solutions, mission planning, and hardware manufacturing. Headquartered on Florida's Space Coast, the company serves government, defense, intelligence, and commercial sectors globally - Core Business: Innovative space and defense technology company offering flexible, cost-effective solutions[10] - Offerings include satellite manufacturing and technology integration, AI-driven space-based data solutions, mission planning and management operations, AI/ML products and services, and space and defense hardware manufacturing[10] - Mission: 'Space Access Reimagined,' committed to rapid innovation, adaptable and cost-effective solutions, and optimization of space system and data collection performance[10] - Demonstrated space heritage, including manufacturing and operating its own satellite and sensor system, LizzieSat[10] - Serves government, defense, intelligence, and commercial companies around the globe[10] - Operates a 35,000-square-foot space manufacturing, assembly, integration, and testing facility on Florida's Space Coast[10] Legal and Financial Disclosures This section details forward-looking statement disclaimers and provides reconciliation for non-GAAP financial measures like Adjusted EBITDA 4.1 Forward-Looking Statements This section outlines the nature of forward-looking statements within the press release, cautioning that actual results may differ materially due to various factors, including market conditions and risks detailed in SEC filings. The company disclaims any obligation to update these statements - Statements about future expectations, plans, and prospects, or non-historical facts, may constitute 'forward-looking statements' under The Private Securities Litigation Reform Act of 1995[11] - Actual results may differ materially from those indicated by such forward-looking statements due to various important factors, including market conditions and other factors described in Sidus Space's Annual Report on Form 10-K and other periodic reports filed with the SEC[11] - Sidus Space, Inc. specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise[11] 4.2 Non-GAAP Measures and Reconciliation Sidus Space uses Adjusted EBITDA as a non-GAAP measure to evaluate operating performance and make strategic decisions, providing a comparable metric to peers. The reconciliation shows an Adjusted EBITDA loss of $(3,946,350) for Q2 2025, an increase from $(3,183,847) in Q2 2024, primarily due to increased depreciation, interest, and equity-based compensation - Adjusted EBITDA is used to evaluate operating performance and make strategic decisions, providing a meaningful comparison to peers[12] - Adjusted EBITDA is defined as net income (GAAP) adjusted for interest expense, depreciation and amortization expense, acquisition deal costs, severance costs, capital market and advisory fees, equity-based compensation, and warrant costs[12] - Non-GAAP measures should not be considered in isolation or as a substitute for relevant U.S. GAAP measures[12] Adjusted EBITDA Reconciliation (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | % Change | | :-------------------------------- | :--------------- | :--------------- | :------------- | :------- | | Net Income / (Loss) | $(5,625,070) | $(4,136,084) | $(1,488,986) | 36% | | Interest Expense | $334,658 | $249,174 | $85,484 | 34% | | Depreciation and Amortization | $1,132,294 | $605,003 | $527,291 | 87% | | Severance Costs | $27,320 | $17,231 | $10,089 | 59% | | Equity based compensation | $184,448 | $80,829 | $103,618 | 128% | | Total Non-GAAP Adjustments | $1,678,720 | $952,237 | $726,483 | 76% | | Adjusted EBITDA | $(3,946,350) | $(3,183,847) | $(762,503) | 24% | - Increased interest expense due to short-term note payable and an asset-based loan[13] - Increased depreciation expense in 2025 and 2024 with the launch and deployment of satellite fixed assets and related satellite software, as well as new ERP software capitalization[14] - Increased equity-based compensation expense due to incentive programs implemented by the Board in 2025[14] Condensed Consolidated Financial Statements This section presents the company's condensed consolidated balance sheets, statements of operations, and cash flows for the reporting periods 5.1 Condensed Consolidated Balance Sheets As of June 30, 2025, total assets decreased to $29.7 million from $37.7 million at December 31, 2024, primarily due to a significant reduction in cash. Total liabilities increased slightly to $15.4 million, while total stockholders' equity decreased to $14.3 million from $23.5 million Condensed Consolidated Balance Sheet Summary | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | | :-------------------------------- | :-------------- | :---------------- | :------------- | | Total Assets | $29,669,423 | $37,745,567 | $(8,076,144) | | Total Liabilities | $15,355,116 | $14,209,502 | +$1,145,614 | | Total Stockholders' Equity | $14,314,307 | $23,536,065 | $(9,221,758) | - Cash decreased significantly from $15,703,579 at December 31, 2024, to $3,634,693 at June 30, 2025[16] - Property and equipment, net, increased from $14,891,976 to $17,179,137[16] - Accounts payable and other current liabilities increased from $3,388,667 to $5,755,965[16] - Asset-based loan liability increased from $6,902,636 to $7,881,629[16] - Notes payable decreased from $3,059,767 to $0[16] 5.2 Condensed Consolidated Statements of Operations For Q2 2025, total revenue was $1.26 million, up from $0.93 million in Q2 2024. However, cost of revenue increased significantly, leading to a gross loss of $(1.03) million. Selling, general and administrative expenses also rose, resulting in a net loss of $(5.63) million for the quarter, compared to $(4.14) million in Q2 2024 Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | | :-------------------------------- | :----------- | :----------- | :------------- | | Total Revenue | $1,261,023 | $927,570 | +$333,453 | | Cost of Revenue | $2,288,165 | $1,768,671 | +$519,494 | | Gross Profit (Loss) | $(1,027,142) | $(841,101) | $(186,041) | | Selling, general and administrative expense | $4,263,269 | $3,056,814 | +$1,206,455 | | Net loss | $(5,625,070) | $(4,136,084) | $(1,488,986) | | Basic and diluted loss per common share | $(0.31) | $(0.99) | +$0.68 | Condensed Consolidated Statements of Operations (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | | :-------------------------------- | :----------- | :----------- | :------------- | | Total Revenue | $1,499,517 | $1,977,725 | $(478,208) | | Cost of Revenue | $4,155,137 | $2,734,762 | +$1,420,375 | | Gross Profit (Loss) | $(2,655,620) | $(757,037) | $(1,898,583) | | Selling, general and administrative expense | $8,707,711 | $6,702,397 | +$2,005,314 | | Net loss | $(12,039,697) | $(7,946,584) | $(4,093,113) | | Basic and diluted loss per common share | $(0.66) | $(2.32) | +$1.66 | - Q2 2025 revenue included $569,953 from related parties, a significant increase from $92,772 in Q2 2024[18] - Basic and diluted loss per common share improved from $(0.99) to $(0.31) in Q2 2025, despite increased net loss, due to a higher weighted average number of common shares outstanding (18,320,025 in 2025 vs. 4,181,344 in 2024)[18] 5.3 Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities was $(7.85) million, similar to the prior year. Net cash used in investing activities was $(4.35) million, primarily for property and equipment purchases. Net cash provided by financing activities significantly decreased to $0.13 million from $11.87 million in 2024, leading to a net change in cash of $(12.07) million and an ending cash balance of $3.63 million Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | | :-------------------------------- | :----------- | :----------- | :------------- | | Net Cash provided by (used in) Operating Activities | $(7,845,359) | $(7,570,068) | $(275,291) | | Net Cash used in Investing Activities | $(4,354,130) | $(4,067,741) | $(286,389) | | Net Cash provided by (used in) Financing Activities | $130,603 | $11,866,071 | $(11,735,468) | | Net change in cash | $(12,068,886) | $228,262 | $(12,297,148) | | Cash, end of period | $3,634,693 | $1,444,369 | +$2,190,324 | - Net cash used in operating activities was primarily driven by net loss, partially offset by non-cash adjustments like stock-based compensation and depreciation/amortization[20] - Net cash used in investing activities was primarily for the purchase of property and equipment[20] - Financing activities in 2025 included proceeds from exercise of warrants ($2,381,247) and asset-based loan agreement ($4,413,239), largely offset by repayments of asset-based loan ($3,604,116) and notes payable ($3,059,767)[20] - Cash paid for interest increased to $630,874 in 2025 from $338,116 in 2024[20] 6. Contacts Provides contact information for investor relations and media inquiries for Sidus Space - Investor Relations: investorrelations@sidusspace.com[21] - Media Inquiries: press@sidusspace.com[21]