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Redwire (RDW) - 2023 Q3 - Earnings Call Transcript
RDWRedwire (RDW)2023-11-07 18:19
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Financial Data and Key Metrics Changes - The company achieved record revenues of 62.6millioninQ32023,representingayear−over−yeargrowthof68.162.6 million in Q3 2023, representing a year-over-year growth of 68.1% from Q3 2022 [6][26] - Adjusted EBITDA was positive at 4.9 million, a year-over-year increase of 6.4million[6][39]−Thenetlossimprovedto6.4 million [6][39] - The net loss improved to 6.3 million, a 4.1millionyear−over−yearimprovement[6][39]−Freecashflowwasnegative4.1 million year-over-year improvement [6][39] - Free cash flow was negative 5.9 million, showing a year-over-year improvement of 6.7million[6][39]−Cashfromoperationswasnegative6.7 million [6][39] - Cash from operations was negative 3.3 million, an improvement of 8millionyear−over−year[14]BusinessLineDataandKeyMetricsChanges−Revenuefromcommercialcustomersgrewby90.28 million year-over-year [14] Business Line Data and Key Metrics Changes - Revenue from commercial customers grew by 90.2% year-over-year, civil customer revenues increased by 78.5%, and national security revenues grew by 30.5% year-over-year through September [27] - The company reported organic growth of 31.8% when excluding revenue from Space NV [40] Market Data and Key Metrics Changes - 21.2% of revenues were derived from national security for the year-to-date period through September 30, 2023 [21] - The U.S. Space Force budget request for fiscal year 2024 is 30 billion, a 15% increase from the previous year [20] Company Strategy and Development Direction - The company aims to balance top-line growth with bottom-line profitability, avoiding growth at any cost [17][75] - Redwire is focusing on selective bidding to maintain margins and profitability [62] - The company is well-positioned to capitalize on growth in the national security market due to current geopolitical dynamics [15][32] Management's Comments on Operating Environment and Future Outlook - Management noted that the commercial space market faces near-term headwinds due to volatility in capital markets, but national security growth is expected to offset this trend [8][32] - The company reaffirmed its full-year guidance range of 220millionto220 million to 250 million, indicating a 46% year-over-year growth at the midpoint [43] Other Important Information - The contracted backlog increased by 59.5% year-over-year to 253.4millionasofQ32023[34]−Thecompanyhasidentifiedapproximately253.4 million as of Q3 2023 [34] - The company has identified approximately 4.5 billion in opportunities, with $714 million in proposals submitted year-to-date [34] Q&A Session Summary Question: Can you provide more detail on the bid pipeline and any expected awards? - Management acknowledged that while they are always bidding and losing, they are also winning and have increased their bid tempo, which is crucial for growth [53] Question: What factors could lead to a spike in revenue in Q4? - The timing of awards is key, as many customers do not focus on fiscal year-end dynamics, which could shift revenue expectations [56] Question: How is the company managing CapEx and investments? - Management emphasized the importance of balancing investments with profitability, ensuring that CapEx supports growth without compromising cash flow [75] Question: What is the outlook for commercial LEO destinations? - The company feels confident in its position, as it continues to generate revenue from services to both government and commercial space stations [59] Question: How has the pricing process changed in the last 12 to 18 months? - The company has become more disciplined in its pricing strategy, focusing on profitability rather than growth at any cost [62][102]