Redwire warns of volatility in commercial space markets
WASHINGTON — Space technology company Redwire said that while it still sees the commercial sector as its biggest prospect for long-term growth, volatility among its customers may cause delays.
Redwire, which went public through a SPAC merger last year, reported revenue of $32.9 million in its first-quarter earnings release May 12. The company had a net loss of $17.3 million and an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $4.7 million in the quarter.
The first quarter fell “slightly below expectations,” said Peter Cannito, chairman and chief executive of Redwire, in an earnings call. That shortfall was due in part to contract awards being pushed back because of delays in completing the federal government’s fiscal year 2022 appropriations, as well as supply chain issues with subcontractors.
Another factor, he said, was “some volatility associated with orders from emerging commercial space contracts.” He did not give specific cases of problems, but later said companies running into funding or regulatory issues can affect the timing of orders.
“With the rapidly changing economic conditions, the uncertainty has gone up,” he said. “If we were to say that anything has changed, it’s a little bit of uncertainty about the timing as a lot of commercial space companies in our sector that we’re a supplier to change their forecasts over time.”
“If the commercial space segment does not deliver on their forecasts in line with the projections that were pervasive this time last year, that adds uncertainty to our forecast over the next five years as well,” he added.
Despite that current uncertainty, Cannito remained optimistic about the commercial sector’s long-term growth potential. Redwire does business both with NASA and in national security space, where he said the company saw strong “demand signals” for various technologies the company develops. The company used the call to highlight work such as building roll-out solar arrays for the International Space Station and a U.S. Air Force indefinite-delivery, indefinite-quantity contract with a maximum value of $950 million for the service’s Advanced Battle Management System, leveraging the company’s expertise in digital engineering.
The commercial market, though, offered greater long-term prospects, he argued. “The emerging commercial space segment has tremendous growth potential over the next 5 to 10 years that could far outpace the other segments in annual growth rate.”
Redwire affirmed previous financial forecasts for 2022, projecting $165 million to $195 million in revenue and $8 million to $15 million in adjusted EBITDA for the full year. “We expect sales to be more heavily weighted to the back half of the year,” said Bill Read, chief financial officer of Redwire, citing its backlog of $273.9 million.