Space Summit. I'm Greg Conrad with the Aerospace and Defense Equity Research Team at Jefferies. Very excited to have Pete Cannito, Chairman and CEO of Redwire, with us today. Thank you, Pete. Maybe just to start, if you can give us a little bit of background on Redwire, its history, up through the closing of Edge Autonomy acquisition earlier this month. Absolutely. Thanks for having me, Greg. It's great to be here with you and the folks from Jefferies. Yeah, Redwire started a little over five years ago. It started out as a thesis in a private equity company, AE Industrial, who's extremely active in the space industry now. At the time, they were not. At the time, they were mostly commercial aerospace. I happened to also be an operating partner at AE Industrial, and I was at that time. I sat down with now one of their managing partners, Kirk Konert, and we said to ourselves, let's take a look at where the puck is heading in terms of aerospace. Although it seems like it's pretty obvious now, at the time, there were not a lot of people who were talking about space. As a matter of fact, we were right in the middle of COVID. It was 2020. That was what most people were focused on. We recognized that space was becoming more important than ever in the commercial, civil, and particularly national security domains. We decided at that point to build a purpose-built middle-market space company to kind of fill that void somewhere between the really large primes and the more smaller niche, many times venture-backed pre-EBITDA, but in some cases, pre-revenue startup companies. That was the whole genesis behind the Redwire start. What we did is we moved out, and we acquired eight companies in 18 months while we were private. We were far enough ahead of the curve that we were able to pick them up at really decent multiples when you look at historically. After we built that up, we recognized, again, the generational opportunity in space as it makes its way over the next 5-10 years towards a multi-trillion dollar market. And recognized that to really—there was a strong opportunity to be one of the major players, especially on the pure play middle market side of the house, which is there really weren't with the acquisition of Orbital ATK by Northrop Grumman. You had seen that most of the middle market players had kind of gone away. We went public. That was a key transformational milestone for us to be able to tap into the capital markets and make investments on scaling. We've, over the years, had 30% compound annual growth rate. We were growing really fast. Fast-growing companies need capital. Going public was really exciting for us. We continued to do acquisition. We made a major play right after we went public into the European markets because we also recognized the opportunity not only for growth in space in the United States, but we felt like the outsized growth in Europe was a really good opportunity. We made a major acquisition there, did a few more, and then most recently saw that in addition to space, there is tremendous opportunity in defense tech. Again, space as a warfighter domain has been very transformational. When we started moving out on VLEO, Very Low Earth Orbit, with our SabreSat platform, people were referring to it as an orbital drone. That is when we had the idea that, well, there is really no line between space. People think that you are in the atmosphere and then all of a sudden you are not. It is not like that. VLEO actually operates in a smaller degree of the atmosphere. We started looking at it. We say, well, the airborne platforms are doing a lot of the same missions that we're doing in space. They operate very similarly. We made this transformational move into becoming a multi-domain company. That's where we find ourselves today. I think a lot of the roots are as emerging supplier. How do you decide where to prime versus maybe where it makes sense to be a supplier of key technology given kind of the current mix of your business? Yeah, yeah. It's a great question. And you're right. Redwire's, when we were going public, our bumper sticker was, "When space wins, Redwire wins," because we're a merchant supplier to so many key performers in the industry. I think you had a couple of them on today: Intuitive Machines, Vast as examples of customers and partners that Redwire has. And that continues to be foundational. It really was a stability strategy. One of the key aspects of Redwire that I like to say is there's no leap of faith that has to occur for Redwire to execute on its plan. We're not raising capital and then putting that capital exclusively into a major technical achievement. We're actually funding those achievements. We have been executing a strategy over the last year, year and a half, what we call moving up the value chain, where we have been priming more, especially now that we have collectively seven platforms, five space-based platforms, and two drones, airborne platforms. We are selectively priming. Where we select the prime opportunities is where we have a strategic advantage, and particularly in an area where there are not many folks already operating. That was really the genesis behind SabreSat and our VLEO platform in the U.S., and Phantom, our VLEO platform in Europe. As we looked at it, we said, there are a lot of companies that are operating in LEO, fewer but some operating in GEO. VLEO was greenfield. We made an internal investment on some technology and bid some emerging opportunities out of the U.S. government and Europe, such as the SCIMSAT program over in Europe. Now we've established ourselves as a major player in VLEO. That was really entering a market where we felt like we had a sustainable strategic advantage, and there was not a lot of competition. That is what we are going to do going into the future. We are looking at areas like dynamic GEO or multi-domain vertically integrated capabilities where space and airborne assets are working together. Those are differentiated areas in new emerging markets where we have some sort of intellectual property where we could differentiate ourselves. That is where we choose to prime. That's actually a good transition to the next question. I mean, we have seen a real push into satellites. You mentioned LEO. There's LEO, GEO, MEO. Some of that's organic. Some of that's inorganic. How do you think about the competitive positioning on the satellite side, given I think you pretty much are covering every orbit? How has that heritage as a mission enabler strengthened that offering? Yeah, it's all about having some advantage that others don't to limit the competition, right? Whether it be working in national security, where we have security infrastructure that is challenging to develop over time, but based on our deep customer relationships and the history as a performer through a lot of our legacy entities. Or whether it's a piece of intellectual property like what we're developing for the VLEO markets, or the heritage of what we've done. As you know, you've been covering space for a while now. Flight heritage is kind of the coin of the realm. Whether that's on something like putting Rollout Solar Arrays on the International Space Station or developing next-generation satellites, customers want to work with people who have been there, done that, who understand the harsh and unique and challenging environment of space. I think all of our heritage, whether it comes from our legacy providing subsystems and components or some of the heritage that we have, particularly in Europe, where we've been offering satellites for decades, plays into good positioning and future work for us. I mean, you touched on Edge Autonomy a bit in the beginning. The move to multi-orbit in space, to adding airborne, how do you think about the advantages to have offerings across domains? How interrelated are the systems? How do you think about potential customer technology overlap as you integrate that business? Yeah. Yeah, it's a great question. If you think about airborne and spaceborne assets, it may not be intuitive to people initially. If you break it down to their functional decomposition and say, what are the technology involved, and what are the missions that are being performed, you start to see that an autonomous AI-driven airborne platform is not as different as you might think from an autonomous AI-driven spaceborne platform. We do not call satellites or spacecraft uncrewed spaceborne systems the way people call drones uncrewed airborne systems. Essentially, that's what they are, right? They use similar technologies. There is some sort of power element. There is some sort of structure involved. There is some sort of navigation that has to occur. They are usually carrying either an optical payload or a communications payload. They are driven by AI software or autonomy avionics. Whether you're doing it in the atmosphere or in space, it's a lot of the same technologies. Now, from a mission perspective, they're actually operating and conducting a lot of the same missions, most notably intelligence, surveillance, and reconnaissance. You have drones that are doing ISR from a certain altitude. Then you have spacecraft and satellites, whether it's VLEO or all the way up to GEO or even in Cislunar. They're doing some sort of intelligence, surveillance, and reconnaissance as well. When you look at communications relays, whether it's airborne or spaceborne, you're doing that multi-layered communications architecture. Where our customers are going, because they recognize that, quite frankly, when they're conducting their missions, it's irrelevant in terms of whether it's in the atmosphere or in the vacuum of space. What they care about is getting the information. There's a lot of commonality there. Now, when you blend these into a multi-domain architecture, you start to see how they're very complementary as well. You can see how if you're closer to the Earth with an airborne asset, you have higher fidelity. If you're in space, you have a wider field of view. They can share information for like tipping and queuing. Of course, the future of warfighting, whether you look at something like Golden Dome, Golden Dome is inherently going to be multi-domain. It's going to have not only airborne and space-based assets, but it'll have land and sea aspects as well. That's where our customer is headed. When you have at least two aspects of it, the airborne and the spaceborne, if you will, capabilities into a single vertically integrated company, that provides a strategic differentiation. That was kind of the logic behind the deal. Maybe just transitioning to opportunities around the exploration and the commercialization of space. I mean, thinking about the International Space Station transition to private space, I mean, how do you think about Redwire playing in that market? What do you view as maybe the biggest opportunities in that transition? Yeah, core to the, it's a great question. Core to the Redwire theme is we don't have to choose, right? We have many paths to victory, starting with being a merchant supplier across commercial, civil, and national security space. We sell what we call the fundamental building blocks of space. Because they're fundamental building blocks, they're relevant to all those missions. As you see, whether it's the evolution to a permanent presence on the moon, or whether it's going to Mars, or whether it's happening here inside the United States, or whether it's happening in Europe, in all cases, it's all of the above. Redwire is positioned, right? We have major manufacturing sites developing capability in Europe as well as the United States. We're on many programs for civil space to include our MASON program, which is looking at how do you build permanent structures like berms and landing pads on the Moon. In Europe, where we were recently awarded a study from ESA on the Lightship program that looks at sending a spacecraft and how we would architect and build a spacecraft ultimately to go to Mars. We have many paths to victory across all these different trends. Even, as you mentioned, the ISS, we currently operate very actively. At any given time, we'll have 9-11 different capabilities, payloads operating on the ISS. We're also partnered with the Vast and the Axioms and the Orbital Reefs and everybody on the future of commercial LEO destinations and commercial space stations as well. I always like to think that if you provide the Rollout Solar Arrays for the International Space Station, that positions you really well to be a power and subsystem provider for commercial space stations, in addition to all the payloads that we offer that will be leveraged on these space stations as well. We're covering a lot of ground, both in space today and where the trends are headed. Maybe transitioning to space manufacturing and specifically the success you've seen with Pillbox. Can you maybe describe the technology? How do you think about now versus the future? What are the catalysts for Pillbox market to really accelerate? I think you've talked about it before, but that path to further monetize that technology and market. Yeah, that's right. The Pillbox is an extraordinary technology and just underscores the importance of the decades that we've been operating through our legacy entities on the International Space Station, right? Because there's kind of a barrier to entry in terms of things that a lot of people don't think about, such as being human-rated, the ability to have a payload. There's a set of requirements that NASA has, the ability to understand how these things work in space. What is exciting about Pillbox is it has gone from millions of dollars in investment from NASA and Redwire over many years through the experimentation and really the research and development phase, and is now actually hitting a phase where it's not about an experiment. It's about real production and therefore a business model that can close, where there's a lot of people who are still in that research and development phase of things like manufacturing crystals for pharmaceuticals in space. We're beyond that now. It works. We've already demonstrated that it works. Now we're focused on new technologies like our Industrial Crystallizer, which we announced recently that allows you to do it reliably and at scale. Redwire, while many are still in the research and development phase in terms of microgravity manufacturing, we're moving into the production and commercialization phase. That's super exciting. What does that look like? We've made a number of announcements where we're partnering with the who's who of pharmaceutical companies to start taking these crystals and feeding them into their pipeline so that we can commercialize the technology. We have talked about, I think, on our last earnings calls, two specific business models for that. One is just folks paying us to send these capabilities up to a space station, whether it be the ISS or a commercial space station, and manufacturing the crystals for them, or in some cases, flying the crystals on our own, retaining the IP and licensing that technology. We are in the early stages of commercialization. We have announced some great partnerships recently. We have a history of partnering with companies like Eli Lilly and Bristol Myers Squibb. We are now taking something that works and is ready for production and commercialization and forming the partnerships necessary to bring it to market. That is super exciting because that is what the industry has been waiting for for a long time. Maybe rolling it all together, I mean, how do you think about the outlook for defense and national security versus commercial versus civil? Where are we in terms of the evolution of those markets and what leads going forward? Kind of tacking one more onto that, how does Europe play into that given the local exposure to that market? Yeah, yeah. I've never been good at making predictions, particularly about the future, as Yogi Berra would say. That's why we have a strategy that lets us be agile and pivot as required. When we first went public, commercial space was all the rage. You had a number of companies out there that were talking about refueling commercial satellites and building huge constellations like OneWeb and others. That has settled down, although I think you're going to see it start to come back. It started to settle down. National security and civil space started to emerge with the Artemis Program. Of course, space is a warfighting domain. Because we're involved in all those markets, it wasn't really a pivot. We were there. You just focus on where the growth is occurring. We were able to do that effectively since we play across all those civil, commercial, and national security. Now some of the NASA budgets are down, and national security is the hot thing. On the civil side, also the hot thing is Europe starting to invest and catching up with the U.S. and China and having their own autonomous space-based capabilities, both on the civil side and, quite frankly, on the defense side as well. That is a huge growth trend. Where Redwire is trying to position itself by providing these foundational technologies with decades of flight heritage is to take advantage of wherever the trends are going. As they evolve, we'll be right there with them. There is a lot of dynamics going on. I think national security is obviously really high right now. Even if that changes in the future, we'll be ready to go and a participant in those other markets. I think you actually have a slide on this in one of your decks. A question that we are asking everyone today is, how do you make money? I mean, how much is hardware versus software? What is the subscription element? Just thinking about constellations, longer-term agreements, or some of the opportunities that might have replacement demand tied to them. Yeah, right. And it's an important aspect of who we are. One of the things that I like to point out is Redwire is a space now company, right? There's no leap of faith that has to occur. We're selling subsystems and components, spacecraft. We have two European spacecraft right now doing a first-of-a-kind engineering achievement in flying in precision formation, creating an artificial eclipse so that scientists at ESA and around the world, quite frankly, can better study the coronal forces of the sun. This is happening now. These are two satellites that were built by Redwire in our Belgium facility. They're flying now. It's working. We have some great shots. Of course, we provided the cameras for the Intuitive Machines lunar landings as well as the Firefly lunar landings. We're making money by profitably selling these things, these capabilities today. We will continue to do so. Going into the future, there's a lot of software associated with elements we're developing. We do have a software-based digital engineering capability that is very effective and has been sold and is used by many customers to model out space-based missions. We're expanding that to model out multi-domain missions. With the addition of Edge Autonomy, we're selling hundreds of drones right now. We have hundreds of drones that are currently fielded with the Marine Corps, Special Operations Forces. We have hundreds of drones operating on the battlefield in Ukraine. This is all happening now. We're selling these things. As a result, we're making money. We're going to be increasing our economics over time through things like developing scale and continuing to grab market share in the areas where we can be highly differentiated, either through some sort of intellectual property or early mover advantage in areas like VLEO. Yeah, like you said, it's pretty transparent. One of the interesting things about the Edge acquisition is I always say there's three areas that I look at when I look at synergies for Edge. It's the technical, the operational, but also the financial. In Redwire, we tend to be, because this is how the space industry currently works, you tend to win these contracts. They're large, multi-year development contracts. Whereas in drones, the technology is much more mature. You're really taking orders. Because you have a mature manufacturing base where you're now taking orders for proven capabilities, it tends to be more transactional and have better gross margins. Certainly, in addition to all the things that I said, to pivot to going multi-domain and expanding into defense tech, particularly selling drones, that's a real tailwind for our ability to make money as well. Maybe just to wrap it up, I mean, what are three key takeaways that investors should walk away with from today's call? Yeah. I think there's really three investment dynamics in Redwire that I believe makes us very attractive and gives us both resiliency and the potential for breakout growth. Those three are the merchant-supplier model, where we're well established, and it gives us a strong economic foundation. The spacecraft, where we've moved up the value chain and we can now selectively prime in high-growth areas, which gives us scale. What we call venture optionality, but really that next-generational advanced biopharma capabilities and, quite frankly, exploration in space, like a permanent presence on the moon and everything that goes with the future of microgravity as a unique manufacturing area for the future. Within Redwire, you get a lot of paths to victory. You got nice foundational merchant-supplier, scale through priming, as well as some of this venture optionality. We think that's a really exciting place to be because it's still just, as I like to say, the first innings of spring training in terms of where the space industry is growing. I don't think anybody knows exactly what the future holds. I think it's important to be positioned for space as it evolves over time to make sure that you're well positioned for the long term. I think we are. Cool. Peter, really appreciate the time today. We'll leave it at that. All right. Thanks, Greg. Appreciate you having me.