WASHINGTON — Terran Orbital reported higher revenues but a significant loss in 2023 as it continues to evaluate options after a takeover bid from Lockheed Martin.
The smallsat manufacturer released its 2023 financial results April 1, reporting revenue for the year of $135.9 million, an increase of 44% over the $94.2 million in revenue the company reported in 2022.
Despite the increase in revenue, Terran Orbital still reported a net loss of $151.8 million for the year, down only slightly from the $164 million net loss the company had in 2022. It has an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $77.4 million in 2023, slightly worse than the $69.5 million adjusted EBITDA loss in 2022. The company ended 2023 with $71.7 million of cash and equivalents on hand, compared to $93.6 million at the end of 2022.
The company credited the increase in revenue to “continued and increased level of progress made in satisfying our customer contracts and reflects the ongoing favorable impact from significant contract wins and modifications in recent periods.” However, it said “growth initiatives” linked to those efforts factored into its bigger adjusted EBITDA loss.
“Our revenue growth and gross margin improvement affirm the strength of our strategy and execution. The future of space is responsive, and Terran Orbital is well-positioned to capitalize on this growing market segment,” Marc Bell, chief executive of the company, said in a statement.
Terran Orbital was scheduled to release its financial results and hold an earnings call March 26. However, a day before that scheduled release, the company said it would release its results on April 1 and hold an earnings call the next day. In the April 1 release, the company said it was cancelling its earnings call “in light of the company’s ongoing strategic review.”
That review has taken on added urgency after Lockheed Martin announced March 1 it was offering to acquire Terran Orbital by purchasing the two-thirds of the company’s shares it does not already own for $1 each as well as buy $70 million in outstanding stock warrants and assume or repay $313 million in debt. Lockheed Martin is a major customer of Terran Orbital’s smallsat buses and provided 81% of its 2023 revenues, according to Terran Orbital’s 10-K filing with the Securities and Exchange Commission.
Terran Orbital responded to the proposal March 4 by adopting a stockholder rights plan, or “poison pill,” to block a hostile takeover. It also said an independent committee of its board of directors would evaluate the Lockheed proposal as part of its broader strategic review. The company has not commented publicly further about those efforts.
The financial results provide little new insight into Terran Orbital’s largest single contract, a $2.4 billion deal with Rivada Space Networks to produce 300 satellites that accounts for nearly 90% of its backlog. Terran Orbital said in January that Rivada had paid all its outstanding invoices, and Bell said at the Satellite 2024 conference March 20 that Rivada remained current on its payments, but has not disclosed the timing or amount of those payments. The company reported in its SEC filing recognizing $6.9 million in revenue from the Rivada contract in 2023.
Terran Orbital’s 2023 revenue met a forecast it made with the release of its third quarter financial results in November, when it projected more than $130 million in revenues for 2023. That was a decrease from earlier forecasts of at least $250 million for 2023 after the company removed projected revenue from the Rivada contract for the year because of “the delay and uncertainty regarding the timing of performance” on it.
The company’s SEC filing also includes a “going concern” warning from its auditor, citing its ongoing losses and provisions in debt agreements that require the company to have adjusted EBITDA of not less than zero by the end of 2024. Terran Orbital stated that those agreements allow it to extend that deadline by one quarter for every $25 million in net cash raised from equity sales, and that it is “in active discussions with funding sources” to do so.
