Firefly Aerospace Inc. Q2 FY2025 earnings call

• Firefly recently completed its historic IPO, raising $1 billion in gross proceeds.
• The company has four revenue-generating products: the Alpha rocket (operational 1-ton-to-orbit, with backlog diversification via Kratos onboarded to MACH-TB 2.0 contract), Eclipse rocket (reusable, 16-ton capacity for commercial constellations, etc.), Blue Ghost lunar lander (successful moon landing, sent nearly 120 GB of data, supporting NASA payloads), and Elytra satellite (multi-orbit, multi-mission, supporting national security capabilities).
• Second quarter saw program milestones including Blue Ghost Mission 1 success, Alpha returning to flight with FAA approval, Eclipse development progress, and Elytra testing and upcoming missions.
• Won new contracts across product lines, such as Kratos onboarded to MACH-TB 2.0, Firefly being the first to land on the moon, Elytra securing Pentagon contract, Alpha ramping flight cadence, and Eclipse development with Northrop Grumman investment.

In the second quarter, Firefly generated revenue of $15.5 million. Spacecraft revenue stood at $9.2 million, while launch revenue was $6.3 million. The company's backlog was $1.3 billion, consisting of high-quality customers and critical missions across its product lines, including the Alpha rocket, Eclipse rocket, Blue Ghost lunar lander, and Elytra satellite orbiter.

Firefly currently expects revenue for fiscal 2025 to be in the range of $133 million to $145 million, supported by its capital-efficient operating model and disciplined execution.

No major specific risks explicitly discussed, but notes that timing of revenue could be impacted by external factors outside the company's control, especially on the launch side.

Q: With the FAA approving return to flight for Alpha, how are you thinking about the timing of Flight 7 and 8? And how does that feed into your targeted launches for '26? What are the range of potential outcomes for next year, thinking about production capacity versus the current backlog?

A: Jason Kim stated they received FAA return to flight determination at end of August, expect to launch Flight 7 in coming weeks, with Flight 7 and 8 in mature states, and building ahead for 2026, working closely with range and customer on mission details.

Q: How do you think about the Golden Dome opportunity? And what news should we look to hear? What is sort of the framework and expected timing you're thinking about as it relates to Golden Dome?

A: Jason Kim mentioned Alpha, Elytra, and Eclipse are well-positioned to support Golden Dome. Alpha can support launching surrogate targets, hypersonic missiles, space-based interceptors; Elytra for space-based interceptor host missions; Eclipse for launching constellations.

Q: Starting off, maybe if you could talk a little bit about expectations for either EBITDA or free cash flow for the year?

A: Darren Ma said they're focused on hitting operational metrics linked to financial performance, guiding to annual revenue.

Q: Can you walk us through maybe some of the milestones along the way as we think about going from where we are now to the collaboration you'll have with Northrop next year to get that launch up for Eclipse?

A: Jason Kim discussed Miranda flight engine testing (over 90 hot fire tests), engine bay testing, integration of liquid oxygen and RP-1 tanks, next steps include integrating engine bay with tanks and a section, delivering to Northrop for second stage integration, payload fairing integration, and launch campaign at Wallace pad.

Q: If you can maybe update us on the time line for [NSL Lane1] and maybe kind of talk about how the team is thinking about their proposal ahead of the December window? And specifically, what are customers saying kind of about the time frame from transition from onboarding to initial contract award?

A: Jason Kim said they anticipate first launch for NSL Lane1 in late 2026, pursuing proposal submission by late year, with first task orders around first quarter 2027.

Q: Maybe on Alpha, you called out that you're going to change the design of the reinforcement of the thermal protection. I was wondering how much of a design change is that? Is that major or minor? And how mature is your progress there? And then second, you talked about changing the angle of attack on the rocket launch. Does that change the -- what kind of missions you could fulfill for your customers?

A: Jason Kim said it's a minor change, adding more layers to thermal protection system on first stage, negligible in mass; changing angle of attack can be controlled at critical flight phases.

Q: You guys called out the addendum contract, $10 million from NASA on Blue Ghost, one, I was wondering, are there more opportunity to sell more data to other governments and commercial customers? And can you size the opportunity of these kinds of potential annuities that you could get from these kinds of additional contracts?

A: Jason Kim said yes, Firefly owns the data and can sell commercial data licenses, with Ocula being core to data sales, and Darren Ma mentioned engineering change proposals common on fixed price contracts, expecting continued differentiated revenue stream.

Q: With the Blue Ghost 4 contract you got this summer, how did that contract turn out versus your expectations? And can you provide some sort of revenue recognition expectations for that since that's not launching until 2029? And also any sort of profitability metrics that we should monitor?

A: Darren Ma said they planned on winning the contract, recognized over percentage completion basis similar to Blue Ghost Mission 1.

Q: The backlog, can you just update us on the rough mix of launch and spacecraft? And maybe more specifically within the launch Alpha launch backlog, how much of that is national security responsive versus other?

A: Darren Ma noted prior to Blue Ghost Mission 4, backlog was more on launch side, but expected weighting to shift with spacecraft focus over time.

Q: Maybe on the road map for Blue Ghost and cargo to the moon, can you help us understand the road map you're planning?

A: Jason Kim said it's the beginning, with long-term road map including bigger systems like Eclipse rocket, Blue Ghost 2 mission progress, scaling technology via carbon composite structures, and plans for more rovers, infrastructure, etc.

Q: Congratulations on the first earnings call going public. I wanted to ask about the strategy around potentially some M&A. You obviously raised quite a bit of money. Any kind of types of assets out there that you're kind of vetting or interested in? And maybe if you could dimension kind of the size and scope you'd be willing to do.

A: Jason Kim said M&A targets must fit strategy, culture, and provide synergies to existing product lines.

Q: On Elytra, you made a reference to RG-XX. I was wondering if you could maybe elaborate around that. Is that supposed to be potentially a template for some future program that Elytra would go after?

A: Jason Kim explained RG-XX is a next-generation mission requiring space domain awareness, and Elytra's capabilities align with this, having ample fuel, maneuverability, and payload capacity for RG-XX.

Q: The $10 million extra, is that going to be recognized in 3Q as revenue? Or what's the, I guess, the rev rec on that $10 million for Blue Ghost?

A: Darren Ma said it's planned in their road map and would be recognized accordingly.