Welcome back everyone. Great day so far on our conference. The next presenter is Terran Orbital. It trades on the New York Stock Exchange under the symbol LLAP, and is a leading manufacturer of satellite products, primarily serving the aerospace and defense industries. Terran Orbital provides end-to-end satellite solutions by combining satellite design, production, launch planning, mission, operations, and on-orbit support to meet the needs of the most demanding military, civil, and commercial customers. Please welcome its CEO, Marc Bell, and CFO, Gary Hobart. Welcome, gentlemen. We are thrilled to have you on the conference today and very much looking forward to hearing your presentation. Thank you so much for having us today. We really appreciate it. I'd like to kick off with the slides. Okay. And? Yes, you guys can control those slides. You, you got that? I don't know. It's, I don't see it. Oh, can you guys see the slides? It doesn't show on the video bridge. Sorry, apologize, everybody. Are the slides up? Yeah, the slides are up. Okay. John is controlling them. You can go on the Slides tab and view them. Got it. Thank you. All right. Sorry about that, everybody. My name's Marc Bell. I could build a satellite, not so much a PowerPoint. Let me just tell you a little bit about the company. We are pioneers of what people call new space. We invented something called the CubeSat over a decade ago, and the CubeSat is really what settled this whole resolution. CubeSat was something you could hold in the palm of your hands. It was something that was very small. It allowed us to. We could build something, what used to took billions to build, we could do for millions. What used to take a decade, we could do in months. It dramatically changed how satellites are built today. You could use it for everything. We could use it for weather, we could do it for imaging, we can do it for something called synthetic aperture radar, synthetic aperture radar. GPS, tons of applications for what we use. We sold a third of the company to Lockheed Martin. That gave us over $100 million of additional capital in October of 2022. We signed a strategic cooperation agreement with them that goes throughout to 2035. This allows us to build basically all of Lockheed Martin's small sats. We have a natural good customer, but we work with everybody, not just Lockheed Martin, but all the defense primes we work with on their smallsat programs. We have an ever-growing backlog that continues to increase, and we have a very active pipeline. You know, the U.S. government says 50,000 satellites are gonna be built over the next 10 years. 300 rockets are gonna be launched every year over the next 10 years. You know, we are the last independent manufacturer of smallsats in the United States. All our competitors have pretty much been acquired. Blue Canyon got acquired by Raytheon, Millennium got acquired by Boeing, and York Space got acquired by AE Industrial Partners. By the way, we decided to, instead of selling, we decided to go public, and we're very happy to be there. Next. We basically do everything. We design, we build, we do launch integration, and we do mission operations. We solve a problem from space, customer comes to us to solve a problem. We differ from all the other new space companies you may hear about, whether it be BlackSky, Flats, Spire, Planet. What they do is they build a constellation, and they hope customers come to them. What we do is a customer comes to us with a problem to solve from space, and we then turn around and we solve the problem. We don't take credit risk. We are not building it and hope they will come. They come to us, we will build it. We believe. You know, you hear a lot about supply chain lately, and we believe that, you know, controlling your supply chain is controlling your destiny. We are vertically integrated. We build over 85% of our components and modules in-house today. We build our buses, our flight computers, our GPS modules, our star trackers, all the things that go inside a satellite, we build today. We will continue to expand that as we will get into more building secure comms and propulsion systems. The goal of the next 24 months is to build 100% of all of our main components in-house. We have. We've been around longer than pretty much everybody else in new space. We've been building smallsats 'cause longer than CubeSats and smallsats 'cause we're the folks who invented it. We have over 200 missions that we've supported so far. We have 80 missions over the past decade. We have over 65 modules that are built and put in space already. Our customers are, you know, Lockheed Martin, the Defense Department, NASA, the European Space Agency. But we also work with all the national laboratories, whether it's Lawrence Livermore, MIT Lincoln Labs, Jet Propulsion Labs, Georgia Tech Research Institute, all the big government program, think tanks around the country we work with. We have commercial partners as well, commercial customers as well, such as EchoStar. Lockheed Martin, the strategic cooperation agreement, and the $100 million is in addition to $60 million they've already invested. They have $160 million invested with us. We have 11 of our 31 active programs are currently with Lockheed, and they account to $162 million of our backlog as of September thirtieth. You know, we continue to work with Lockheed to bid on more programs, bid on new business, but we also have to increase our capacity. Which is what we've been doing with that money, is we're building out a new facility which will open on April first, which will dramatically increase our throughput. We'll go from the ability to do 10 satellites a month to the ability to do over 20 satellites a month, which is a huge jump. We continue to increase our capacity in-house to meet the demand that we're seeing out there today. The Space Development Agency is one of our most important customers that we build at Lockheed. We are on the Transport Layer, which is the biggest part of the SDA. What the Transport Layer does is, think of it as the Internet of space. All the other constellations that get built will connect to the Transport Layer, which will bring data back to Earth. We won the first 10 satellites in October. August of 2020, we won 42 more satellites in 2022, and we will be bidding on Tranche 2 this summer to continue hopefully building satellites for the SDA. We've already delivered. Here it says we're on track. We've actually delivered, as you see this slide here, we actually delivered ahead of schedule, and we were the only one to deliver, 'cause other people are building them as well. We're the only one to meet the deadline and deliver not only on time, but we delivered ahead of schedule. You see that cute picture in the middle. That was a LinkedIn post from Jonathon Caldwell, who runs military space at Lockheed Martin. We decided to gift wrap the last three satellites 'cause we delivered them on Christmas morning, so we thought it was appropriate to gift wrap the last three. It's also an endorsement of what we're doing by Lockheed and the SDA, you know. The press said, "We're not going to pick, we're not gonna pick winners. The winners are going to deliver." We were the only ones who delivered for Tranche 0 on time. We wanna have a. We have a mix of customers. We have a mix of customers for civil, being NASA. We have CAPSTONE, which is a mission that we did to the Moon. While we're building the Transport Layer for the U.S. military, around Earth, we're building the communications network as well around the Moon for a permanent Moon station and a permanent Moon base. The goal is for them to get 100% comms uptime with Earth in near real time. Our first satellite is already in orbit around the Moon, and we look forward to building the others. I'm sure I could tell you read it in the press all the time. You all hear, everyone hears about SpaceX and how things are booming, and the space market is just growing exponentially. There's a lot of space in space, and I say that half-jokingly. There are only about 18,000 operational satellites today moving, but there's the ability for hundreds of thousands, if not millions, of satellites in space. There's a lot of space, but over the next 10 years you'll see another 50,000 being built. Our revenue pipeline is enormous. We have a $15 billion pipeline with over 140 projects. We are at this point selectively choosing which programs that we wanna aggressively go after. We like the DoD work as, again, the NDAA, the National Defense Authorization Act, is the only thing the Democrats and Republicans have agreed on 61 years in a row and guaranteed funding for the Defense Department. Regardless of interest rates, regardless of recession, the Defense Department always gets funded, so it's a guaranteed stable customer. Looking for the best experts to work on your digital product? Meet Merixstudio. We are a team of 250 agile professionals experienced in building digital products remotely. Our secret sauce is a combination of battle-tested ways of working and an exclusive talent pool of top local engineers and designers. We deliver outstanding value in cross-functional, dedicated teams suited to your needs. Just take a look at what we can do for you. We build digital products for businesses from all around the world at every stage of development. Product design, software architecture, quality assurance, project management. We cover everything. It's more than just an outsource development team. It's a true proactive tech partnership that delivers measurable business outcomes. We're here to empower your path to tomorrow. Partner up with Merixstudio. At, we were told, as I said a minute ago, we've got 31 active programs. That's up from 24 a year ago. Our backlog was quarter end was $190 million, versus $73 million the year before. We continue to expand our backlog, we continue to expand our pipeline, and we continue to expand our manufacturing capacity. Backlog conversion is driving revenue. You know, we see that. You know, customer relationships also drive revenue. As we succeed, and it's all about success in this industry, you know, the more you succeed, the more people wanna use you. We're having a lot of great success with a lot of great customers. Here's an interesting one, because, you know, people always think that you build a satellite and then it's gone, but it's really a recurring revenue business because 95% of our satellites are in what's called low Earth orbit. They're traveling about 6 kilometers a second or two and a half times the speed of a hypersonic missile around the Earth. They gotta be replaced every 5 years 'cause we build them so cost-effectively because they're not radiation hardened. The radiation from the sun will eventually burn out the batteries. After about... if it's a 5-year lifespan, two and a half years into that lifespan, we get a reorder to replace the satellites we built. The more programs we get on, the more we have to replace down the road. Things like the SDA become a massive recurring revenue stream over the next decade, along with many other programs that we're on today. We're scaling. You know, we've added more space, we've added more people. We continue to grow our headcount by about 10% a month, and it's important. We're adding a lot of engineers, a lot of very smart people, and we're adding a lot of production and manufacturing facilities and now assembly facilities to increase the number of satellites that we can build in-house. Lastly, you know, I just want, you know, to talk about, you know, we are, you know, you know, we are an end-to-end solution provider. We've done this before. We're a seasoned management team. This will be my fifth unicorn at the end of the day. We've had a lot of success in our past. We have a lot of success, right? We know how to the importance of running a public company, of hitting analyst estimates. Between my partner and I, this is the seventeenth company we've taken public. You know, we're excited to be here, and we love what we do. With that, I will open it up for questions. All right. Great job, gentlemen. Okay. H. Clark wants you to talk a little bit more about the revenue model. Is it a one-time sale? Is there recurring service type revenue? Break that down for us. The revenue model is we call the crawl, walk, run approach. People will hire us to build 1 satellite, then 3, then 10, then 100. We're seeing that because they wanna see that it works. What happens is we build that 1, we put it into orbit. They say, "Wow, that works. That's cool. Let's build some more." We're seeing that with more and more programs as the Defense Department gets more comfortable with commercial manufacturing, the way we're doing it now, versus having the large primes do it. They used to build the what John Hyten, General Hyten called big, juicy targets in space. These big geosynchronous satellites in orbit that took 10 years to build, cost $billions to make, the reality is, with a $5 million Chinese missile, they could be blown up. Our satellites are resilient, they're fast, very difficult to take out of orbit, they're the future. We're building them. By the time I can build and launch a satellite while the current iPhone is being made, versus there with the way it used to be done, it's the iPhone from technology from 10 years ago is what's getting launched today. We view the recurring part as very important because, you know, these all have to be replaced. Not all, but all the ones low Earth orbit have to be replaced. We view... Our revenue model is such that as long as we keep getting on programs, we'll know we'll be on those programs for many years. It's like the F-35 fighter jet. Once they sold 1, they knew eventually they were gonna sell 2,000 of them. They sell every year, they get orders for a few hundred every year. Then they get the parts and everything else to go with it. In our case, instead of parts, they get to buy more satellites. Thank you for that answer. Brandon Lamont has two questions. One, what technological advancements are you making in order to sustain steady growth? Sure. We continue to spend money on IRAD and Evolve. We're the guys who invented the CubeSat. We think we have about a five-year head start on most people. We're on our fourth and fifth generation of some of our modules, where people are just doing the first generation. We have flight tested tons of our modules, which is very important because we've proven they work in space. We continue to innovate, but we're also now adding payloads. We make now synthetic aperture radar payloads, which allows us to image the Earth at night, through the clouds, not just on a clear, sunny day. We're also gonna be making our own electro-optical payloads, meaning we will image the Earth on a clear, sunny day, but using a certain kind of lens called a monolithic lens, that doesn't need to be focused. It's always in focus. We continue to come up and evolve and create evolutions to these products that continue to improve resolution, improve the speed of communication back to Earth, and improve on the resiliency and redundancy on the satellites. How is the operational leadership ensuring that all timelines are met? By sheer brute force. You know, we, you know, tar, feather. We're gonna try. We always. We've never missed a deadline. We deliver everything on time. But that's by also we're using robotics now for a lot of what we do. We are building, we're building robots to do all our module assembly currently. Next, we'll be building a robotic assembly line to actually assemble the physical satellites. And robots have been. Robots work 24/7. They don't take breaks. They don't have lunch. It has been a huge game changer on how we do business. For example, on batteries, we could build now 10 times the number of batteries in a month than we used to be able to do when we did it the manual way. The manual way, we were at, like, 70 a month. Today, we're at almost 700 a month using robots. Carla Wise says, "You mentioned you really have no competitors, what are you doing to expand and grow? How do you get new customers? Well, we have competitors. They just became... They're just the primes. We're one-sixth the cost of most of the primes. We are very... You know, robotics helps us keep our pricing down. You know, we are going out, we've partnered with Lockheed Martin a lot as we go out and bid. It's a great relationship because it's the best of the world's biggest defense prime and the largest manufacturer of satellites in space, coupled with the innovation and entrepreneurship of a small startup. It's the best of both worlds. We get all of their knowledge put into a small form factor. We've built amazing relationships with Space Force, with all the areas of the DOD and the intelligence community, it's about gaining their trust and showing them that we can deliver. That's again, delivering SDA's Tranche 0 on time was a huge win for us and a huge validator of what we did. People are very much paying attention to us because of what we did. Mike Fisher asks, "Do your satellites require maintenance once they're up? The only thing they require sometimes are software updates, and we do that all the time. We'll have to do software update, firmware. Though we are building satellites to help maintain some of the bigger satellites in geosynchronous orbit. We're working on programs that if someone can launch a big satellite into geosynchronous, and we can literally pull out boards and put in new boards using robotic satellites. We just launched a demonstrator of that called CPOD for NASA, which is a proximity demonstrator on how we can have two satellites find each other in space, dock using a pair of hands, and undock, showing how we could do that. Yeah. That will grow into eventually a upgradeable geosynchronous satellite. Those satellites could have lives instead of 25 years, they can last for 50 or 75 years. We have a few questions I'm gonna try to combine. Carrie Reid asked, "How many do you have up that you're currently maintaining? We do a lot of classified work for the U.S. government, I can't answer that. Okay. It's a lot. What is the average recurring fees per satellite? That's a good question. Every satellite's different, they're not all the same. It's like going to buy a car. You could buy a car for $24,000, or you can buy a car for $250,000. It's still a car. We view it as, you know, we build everything from Volkswagens to Ferraris. It's really a matter of what the customer wants. It's all at the end of the day, it's about the mission. What are they trying to accomplish? How complex is the mission? The complexity drives the price up. Can you talk about the CSGs of an average satellite? What do you sell them for? Talk a little bit more about that, plus margins. It can go anywhere from $1 million to $20 million for a satellite, depending what's on it. I'll let Gary talk a little bit about margins. Sure. In general, think about our microsats at about $4 million a pop. What we've been doing is bidding programs to achieve, and build up to about a 30% adjusted gross margin. We're not there yet. We're still in kind of a lot of first article phases, new programs and scaling up. Right now the margins are more modest, but we have a path to expand those mostly from having economies of scale and really building out. The SDE program that Mark has been mentioning, where we had delivered 10 satellites this year, we're on order for another 42 that we'll begin delivering this coming year, is part of that overall expansion. We've really geared up the company to be, as you saw from that one page, a little over $70 million of 9-month revenues to get to the phase of $500 million, $1 billion of revenues. Right now we're in the building phase and expansion phase, but economies of scale will really drive and expand our margin. We have a question from Nathaniel asking about who are your customers? Is it government? Is it corporate? Can you give us some examples? Sure. Our customers are the DoD, most of the three letter agencies that are involved in space and the intelligence community. You know, DoD, Space Force, Air Force, and all the other services. They tell that makes up 95% of our work. The other balance of it is NASA and a handful of commercial customers. How do you get your customers? What's your sales team like? A lot of the government work is, you know, competitive bids. Not all of it. On the classified side, you know, someone comes to you and asks you to do something. It, it's more about, you know, having a solution that the government wants. When you submit a bid, they ask you to submit things, you know, your heritage, your flight heritage, your experience. That's the great part of partnering with Lockheed Martin, 'cause we jointly bid together. We get all the experience Lockheed has on one of our bids, but it's at a price point that the government gets very excited about. Peter Boone wants you to talk a little bit about share price projections. Are they realistic over the next few years? We can't comment on that. Unless Gary, unless you could say something other than that. I don't, I don't think we can actually comment on share price projections. There are lots of very smart analysts who cover us. Yeah I will refer to them. Talk a little bit... On the analyst thing on our website, there's a link on our investor page to analysts. You can see who covers us, and you can get their list of phone numbers, how you can reach each analyst, and feel free to ask them those questions. Can you talk a little bit about how your business is impacted by the macroeconomic environment currently? You know what's great is, you know, we are recession-proof because the military is, you know, they're not as good, known. You know, the biggest threat to our business is world peace. If world peace happens, we have a lot of problems. It doesn't look like it's happening anytime soon. Things like, you know, China sending a balloon over the U.S. is great for business because all of a sudden everyone's like, "Why didn't we see it? What else could we do?" Then people come to us, and we've had lots of conversations, since that balloon is, you know, "What can we do to help solve that problem?" So it is. That's why that's the biggest problem. You know, interest rates don't affect us. We're dealing with a, you know, there are lots of people out there who focus on commercial customers or consumers from space. That makes us fairly immune to economic pressures. Talk a little bit about that, the Lockheed Martin partnership. It seems like a positive partnership, but does it constrain other opportunities with other customers out there? No. We're very lucky. You know, we have this relationship with Lockheed, and they are amazing to work with. Well, they didn't allow us. The contract doesn't prevent us from working with anybody else. We work with all the primes. We have great relationships. The reality is, even Lockheed, a lot of programs are done with other primes. Look at ULA, you know, they do that with Boeing. There's a lot of. We call it co-opetition. Even though they may be competitors, we all cooperate at the end of the day to get a mission done. A lot of the other primes build payloads. We build a lot of buses and some payloads, but if we don't build the payload, then we would just buy it from another prime. Orlando Morgan wants you to talk a little bit more about growth rate. What can we expect over the next 12 to 24 months? Gary? Sure. Well, you see in the third quarter alone, we were up 170% on revenue. Generally speaking, we're gearing the company to grow revenues and double them on an annual basis going forward. The basic catalyst for that is taking that $15 billion pipeline that Mark has shown on the slide and converting that into backlog. The backlog converts into revenue. Can you talk a little bit about debt? How much debt do you have? Right now we have about just over $300 million of debt. About $100 million of it is a convertible instrument held by Lockheed. If Lockheed converts that, they own about a third of the company. If they don't convert it, they're about 10%. We have a few more questions. You've mentioned it before, but maybe talk again about some margins that you can expect. I think I've already addressed margins. I'll just go back to my prior comments. Okay. We just have the questions coming in. I'm sorry. All right. Do you wanna talk a little bit about your competitors and your competitive advantages that you have against them? Sure. I mean, our competitors, we compete against the primes. The advantage we have is our overhead is much lower than that of Northrop, of Boeing, of Raytheon. They have this massive overhead that has to be applied to the programs. We don't have a lot of overhead. We don't have a lot of people. We're able to bid at a phenomenally lower price point. Most of the primes don't manufacture the components in-house. They're mostly assemblers, and they buy it through lots and lots of other companies that buy the components. We make most of our components in-house. We have our own machine shop where we make all the steel for our satellites. We are opening our own printed circuit board assembly facility April 1st. We just opened our own 3D printing facility. We'll be making, all the components literally in-house other than chips right now. Everything will be made in-house. Steven Brock asks? Yeah. Are you doing any fundraising in the market? I'm sorry. Can you ask the question again, Anna? Yeah, sure. Are you doing any fundraising in the market? From a capital perspective, Lockheed Martin just invested $100 million into us in October. As a growing company, we're always opportunistically considering whether to tap the private or public markets for additional capital. On a quarterly basis we go forward, we'll be updating the market on our viewpoint on that. That capital raise was very significant for us because it gave us a long runway to really build out the expansion that Mark talked about, as well as cover ourselves on our path to profitability. talk a little bit about what does the market and the investors misunderstand about Terran Orbital? I think that we've two things. One, we unfortunately ran into a SPAC. As we, you know, as we know, SPACs are a four-letter word. Most SPACs got crushed right after they went out. Two, all new space companies are the same, and they're not. You know, most everybody else that we're working with or that are in our space, I should say, they're the build it and hope they will come approach, whether with the constellations, they're building launch vehicles. They have to wait for the customer to come to them. In our case, the customer comes to us first before we actually build something. It's a very different, it's a very low-risk business model. The reality is everybody needs to buy satellites and, you know, it is, you know, all our competitors have been acquired by the big primes. We're the last independent one left that could do classified work. It puts us in a very unique position as Congress wants to break the stranglehold of the primes. This really gives, working with us gives the primes that ability to, you know, make Congress happy by showing they're able to do things at a lower cost and yet still be able to work with and help deliver the programs. Great. Anna, one thing I'd add on that is speed and turnaround times are important to us as well. We do things in months versus years. These programs are taking 7-10 years. We're turning satellites in 24 months, and our goal is to get that down below 12 months and ultimately have ready-made, off-the-shelf ability to deliver satellites, not real time, but literally measured in months, not years. Well, gentlemen, do you have any closing remarks? No, I just wanna thank everybody for coming. Our website, terranorbital.com, is a great source of information. If you shoot us an email, we're happy to put you on our list. Shoot ir@terranorbital.com. You know, we are always happy to meet people in person. It's a fascinating world that you guys are in, so excited to stay in touch and hopefully you come back with some updates 'cause it's only growing. It's only going up. Thank you guys so much for joining us. Thank you for having us. We really appreciate it. All right. Stay with us, everyone. We'll be right back.