Intuitive Machines, Inc.: Form 10-Q for the period ended Sep 30, 2025

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report, as well as our audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023 which was filed with the Securities and Exchange Commission (the “SEC”) on March 25, 2025. Certain of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the sections titled “Cautionary Note Regarding Forward-Looking Statements“ and Part II. Item 1A. “Risk Factors” included in this Quarterly Report and in the section titled Part I. Item 1A. “Risk Factors” in our 2024 Annual Report on Form 10-K filed with the SEC on March 25, 2025, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Unless otherwise indicated or the context otherwise requires, references in this section to the “Company,” “IM,” “Intuitive Machines,” “we,” “us,”, or “our” refer to Intuitive Machines, Inc. and its consolidated subsidiaries.

Overview

We are a space technology, infrastructure, and services company founded in 2013 that is contributing to the establishment of cislunar infrastructure and helping to develop cislunar and deep space commerce. Cislunar encompasses objects in orbit in the Earth-Moon system and on the Lunar surface, while deep space exploration is space beyond the Moon, including Mars. We believe we have a leading position in the development of technology platforms operating in three core pillars —delivery services, data transmission services, and infrastructure as a service — as described below under Our Business Model. We are focused on establishing the lunar infrastructure associated with each of the three pillars, which provides the basis for commerce to inform and sustain human presence off Earth. Our vision is that our infrastructure services enable our customers to focus on their unique contributions to create a thriving, diverse cislunar economy and expand the commercial space exploration marketplace to the Lunar surface and beyond.

The United States (“U.S.”) government has indicated that returning to the Moon is of strategic importance to the U.S. and we believe it will continue to have bipartisan support as we enter the next generation space race with the People’s Republic of China (“China”). We believe that space is the next economic frontier, with the Moon being the next stepping stone, and the increased demand from governments, intelligence agencies, commercial industries, and private individuals has created multiple opportunities for long-term growth. We intend to participate in expanding the cislunar economy through a steady cadence of missions, with the intent of offering reduced cost of access and operations while providing reliable missions on a defined schedule. We are one of a select few companies servicing NASA and a worldwide set of commercial payload customers. We believe we have a strong position, as evidenced by four Commercial Lunar Payload Services (“CLPS”) awards to date as of September 30, 2025. On February 22, 2024, our Nova-C lander became the first U.S. vehicle to softly land on the lunar surface since 1972, utilizing our Nova-C Guidance, Navigation and Control (“GN&C”) and Propulsion systems, both of which were designed and are produced in-house. Our IM-1 Nova-C lander carried approximately 100 kilograms of science experiment and technology demonstration payloads, including the first CLPS payload, to a landing site closer to the lunar south pole than any previous mission. We operated on the lunar surface beyond the CLPS required mission duration and downloaded over 500 MB of payload customer data on our commercial Lunar Data Network. In March 2025, our IM-2 mission landed at the southernmost location of the Moon, 5 degrees from the south pole. While in transit, our space to ground communications brought down over 8GB of data from space over our network; delivered 3 rideshare customers to trans lunar injection orbit and assisted them with ground tracking and communication; and demonstrated precision autonomous orbit operations circling the Moon for 39 orbits over a 72 hour period. While on the surface, we demonstrated the ability to manage power in thermal conditions on the south pole surface and in a crater. With the challenge of not being able to recharge the IM-2 lander solar panels post landing, the mission was still able to complete several mission and payload milestones, including downloading 500 MB of payload customer data from the lunar surface.

The U.S. Space Force (“Space Force”) has recently begun to turn its attention to the cislunar space, as noted in the Mitchell Institute paper “Securing Cislunar Space and the First Island Off the Coast of Earth.” As the leading CLPS provider and the first company to have successfully landed and operated on the Moon, we believe we are at the forefront of NASA's push for a sustainable return to the lunar surface, while simultaneously driving critical early conversations with the U.S. Department of Defense (“U.S. DoD”) and Space Force to secure the Moon and cislunar space to ensure peaceful and strategic operations in this emerging domain.

Our Business Model

We primarily generate revenue through our contracts with customers of our orbital and lunar access services and by collecting and transmitting cislunar data for science, technology and infrastructure. We are a provider and supplier of space products and services that we believe will enable sustained robotic and human exploration to the Moon, Mars, and beyond.

We employ a “land-and-expand” go-to-market strategy with the goal to deliver increasing value and repetitive revenue with each customer over time by expanding the scope of the services we offer. We work closely with our customers and partners to enable their early success. We expect that deeper adoption of our products and services from our customers will come in many forms, including increased reliance on our technology as a core part of a mission, increased usage of our landers for lunar transportation and exploration, and greater dependence on our advanced software analytics capabilities for satisfying each customers’ needs.

We operate under three core pillars which we believe are required to develop cislunar and deep space commerce: delivery services, data transmission services, and infrastructure as a service. Under Accounting Standards Codification (“ASC”) 280 “Segment Reporting,” we concluded that our core pillars operate as one reportable segment. See our Segment Reporting disclosure under Notes 2 and 16 in our condensed consolidated financial statements for further discussion on our reportable segment. Provided below are summarized descriptions of our three core pillars.

• Delivery Services provides for the transportation and delivery of payloads, such as, satellites, scientific instruments and cargo to various destinations in space, in addition to rideshare delivery and lunar surface access. In February 2024, our Nova C lander became the first U.S. vehicle to softly land on the lunar surface since 1972. In March 2025, our IM-2 mission landed at the southernmost location of the Moon, 5 degrees from the south pole and conducted a shortened mission.
• Data Transmission Services offerings include the collection, processing, and interpretation of space-based data, utilizing applications, such as, command, control, communications, reconnaissance and prospecting. In September 2024, NASA awarded Intuitive Machines a NSNS contract for communication and navigation services for missions in the near space region, which extends from Earth’s surface to beyond the Moon.
• Infrastructure as a Service delivers space assets performing tasks and making decisions without human intervention that are designed to perform essential functions, such as, navigation, maintenance, scientific data collection, and system health monitoring. During 2024, NASA awarded Intuitive Machines a LTV contract to support the agency’s Artemis Campaign as a prime contractor, leading the development of the Moon RACER.

We integrate these fundamental pillars to not only enable access to the Moon but also to lay the foundation for a thriving cislunar and deep space economy. We believe our delivery, data transmission, and infrastructure capabilities uniquely position us to drive innovation, create long-tail revenue streams, and ultimately support humanity’s push to establish profitable industries in space. We expect to achieve leading time to market across these core pillars driven by our short design to manufacture process, enabled through vertical integration and rapid iterative testing. We leverage technologies developed for our three core service pillars to expand into adjacent markets where these capabilities provide a competitive advantage.

Adjacent and Opportunistic Market Opportunities

Due to Intuitive Machines’ unique technology platforms and engineering expertise, we are also pursuing and executing on business opportunities outside the three core pillars for customers aligned with our talent and product offerings. This includes work on the JETSON Low Power project for the Air Force Research Laboratory (AFRL), the development of scalable reentry technologies, and federal engineering services contracts at various NASA centers.

New Awards and Recent Developments

Purchase Agreement - Lanteris Space Systems

On November 3, 2025, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”), to acquire Lanteris Space Holdings LLC (“Lanteris”) from Advent International LLC. Formerly Maxar Space Systems, Lanteris is a leading satellite manufacturer and provider for space exploration with a record of delivering mission success across national security, commercial and civil space. Pursuant to the Purchase Agreement, and upon the terms and subject to the conditions therein, the Company will purchase from Advent 100% of the issued and outstanding membership interests of Lanteris. The aggregate consideration for the acquisition is $800 million, consisting of $450 million in cash and $350 million in the Company’s Class A Common Stock, subject to adjustments as set forth in the Purchase Agreement. In alignment with the Company’s vision, the acquisition of Lanteris positions it as a vertically integrated, next generation space prime that can design, manufacture, deliver, and operate missions from earth orbit to the Moon, Mars, and beyond.

The transaction is expected to close in the first quarter of 2026, subject to customary regulatory approvals and closing conditions.

Stock Purchase Agreement - KinetX, Inc.

On October 1, 2025, the Company completed the stock purchase agreement to acquire 100% of the issued and outstanding capital stock of KinetX, Inc (“KinetX”). KinetX is a privately-held, Arizona-based aerospace company with more than 30 years of experience delivering flight-proven, deep space navigation, systems engineering, ground software, and constellation mission design to the U.S. government and international customers. The consideration for the acquisition totaled approximately $31.1 million, consisting of the aggregate base consideration of $30.0 million plus $1.1 million for net working capital and other adjustments, and was paid in a combination of $16.1 million cash and 1,434,005 shares of the Company’s Class A Common Stock valued at $15.0 million based on a volume-weighted average price of $10.46.

The acquisition reinforces the Company’s flight dynamics and navigation business line within its Data Transmission Services pillar. The Company plans to pair KinetX software and talent with its lunar-proven flight systems, positioning the Company to lead in emerging opportunities like NASA’s Near Space Network Services, the potential for Tracking and Data Relay Satellite System replacement, Mars data relay missions, and commercial operations of legacy Deep Space Network infrastructure.

Orbital Transfer Vehicle

In July 2025, we received a $9.8 million government contract from a National Security customer to advance our Orbital Transfer Vehicle design. This phase two award represents the final engineering milestone prior to manufacturing the vehicle as early as 2026 and expands our in-space mobility solutions beyond lunar surface delivery into the rapidly growing market for in-space logistics.

Tax Legislation

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. We have assessed the impact of the OBBBA and determined that the impact on our condensed consolidated financial statements is not material.

Key Factors Affecting Our Performance

We believe that our future success and financial performance depend on several factors that present significant opportunities for our business, but also pose risks and challenges, including those discussed below and in the sections titled Part I., Item 1A. “Risk Factors” in the 2024 Annual Report on Form 10-K, and Part II., Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q.

Inflation and Macroeconomic Pressures

The global economy continues to experience volatile disruptions including to the commodity and labor markets. These disruptions have contributed to an inflationary environment which has affected, and may continue to adversely affect, the price and availability of certain products and services necessary for our operations, which in turn, has adversely impacted, and may continue to adversely impact our business, financial condition and results of operations.

We continue to monitor economic conditions and the impact of macroeconomic pressures, including repercussions from elevated interest rates, sustained inflation and recession fears, supply chain disruptions, monetary and fiscal policy measures (including future actions or inactions of the United States government related to the “debt-ceiling” or “Department of Government Efficiency” actions), heightened geopolitical tensions (such as the war in Ukraine and Israel), changes to the U.S. federal budget, current or future government shutdowns, and the political and regulatory environment (including changes as a result of policy shifts implemented by the current administration) on our business, customers, suppliers and other third parties. While rising costs and other inflationary pressures have not had a material impact on our business to date, we are monitoring the situation and assessing its impact on our business, including to our partners and customers.

During 2025, we observed a significant shift in U.S. trade policy, with increased tariffs and the imposition of new tariffs that could impact our supply chain and our business. While some of these wide-reaching tariffs have been paused, these trade policy decisions are outside of our control and may have consequences for our business. Changes in trade policies, such as new tariffs or increases in tariffs, or reactionary measures including retaliatory tariffs or legal challenges, could have an adverse impact on our business. Even though we primarily sell our products and services to U.S. Government customers and our suppliers are primarily domestic, we have some exposure to imported materials and components. Based on current conditions, we do not expect a material impact on our 2025 results. We will continue to monitor the evolving trade landscape and assess potential implications on our supply chain and business.

On September 30, 2025, the continuing resolution allowing U.S. government departments and agencies to operate through the end of the government fiscal year expired and the U.S. government shut down. As a result of the U.S. government shutdown, our business, program performance and results of operations may be impacted by the disruptions to federal government offices, workers, and operations, including risks relating to the funding of certain programs, stop work orders, delay in contract awards, new program starts, payments for work performed, and other actions. We may also experience similar impacts in the event of a series of short-term continuing resolutions rather than full-year fiscal year 2026 appropriations. Generally, the significance of these impacts will primarily be based on the length of the shutdown and timing of passage of a new continuing resolutions or a full budget.

Our ability to expand our product and services offerings

We are in the preliminary stages of developing our full space infrastructure offerings. These services are expected to grant customers access to cislunar space and the lunar surface at lower price points than previous lunar missions. We are also working to provide data transmission services at lunar distance to include far-side connectivity, along with ancillary services that are likely to include orbital servicing, earth reentry, and payload development and manufacture.

Our growth opportunity is dependent on our ability to win lunar missions and expand our portfolio of services. Our ability to sell additional products and services to existing customers is a key part of our success, as follow-on purchases indicate customer satisfaction and decrease the likelihood of competitive substitution. To sell additional products and services to new and existing customers, we will need to continue to invest significant resources in our products and services as well as demonstrate reliability through a successful lunar landing. If we fail to make the right investment decisions, are unable to raise capital, if customers do not adopt our products and services, or if our competitors are able to develop technology or products and services that are superior to ours, our business, prospects, financial condition and operating results could be adversely affected.

We expect to make significant investments in our lunar and data programs in the short term. Although we believe that our financial resources will be sufficient to meet our capital needs in the short term, our timeline and budgeted costs for these offerings are subject to substantial uncertainty, including due to compliance requirements of U.S. federal export control laws and applicable foreign and local regulations, the impact of political and economic conditions, and the need to identify opportunities and negotiate long-term agreements with customers for these services, among other factors. Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves to pay any additional indebtedness that we may incur.

Our ability to expand spaceflight mission operations

Our success will partially depend on our ability to expand our lunar mission operations and win government contracts in 2025 and beyond. We completed the first mission in February 2024 and completed our second mission in March 2025. We are working to establish a regular cadence of missions. We believe that this will provide our customers with proven and reliable cislunar access, with which to plan their future manifest. With binding agreements for additional launches as of September 30, 2025, we have $235.9 million in backlog, and we are in active discussions with numerous potential customers, including government agencies and private companies, to potentially add to our contracted revenue backlog.

Prior to commencing missions, we must complete internal integration activities as well as launch vehicle integration with our launch provider, SpaceX. Any delays to our targeted mission launch date or in commencing our missions, including due to congestion at the pad launch site or delays in obtaining various approvals or licenses, could adversely impact our results and growth plans. As we improve production efficiency and schedule reliability and begin to launch our satellites for our lunar data network, we expect to improve our market penetration, which we believe will lead to higher revenue from both volume and mission complexity as well as increased operating leverage.

Ability to continue to capitalize on government expenditures and private enterprise investment in the space economy

Our future growth is largely dependent on our ability to continue to capitalize on increased government spending and private investment in the space economy. U.S. federal government expenditures and private enterprise investment have fueled our growth in recent years, and it has resulted in our continued ability to secure increasingly valuable contracts for products and services. An increased focus on U.S. federal government spending could unfavorably impact the space exploration sector in the future. On January 20, 2025, President Donald J. Trump announced an executive order establishing the “Department of Government Efficiency” to maximize government efficiency and productivity. Pressures on and uncertainty surrounding the U.S. federal government’s budget and potential changes in budgetary priorities, could adversely affect the funding for individual programs and delay purchasing decisions by our customers. If our existing programs and project pursuits are not focused on the federal government’s higher priorities, our business, prospects, financial condition and operating results could be adversely affected.

Ability to improve profit margins and scale our business

The growth of our business is dependent on our ability to improve our profit margins over time while successfully scaling our business. We intend to continue investing in initiatives to improve our operating leverage and significantly increase utilization. Our ability to achieve our production-efficiency objectives could be negatively impacted by a variety of factors including, among other things, lower-than-expected facility utilization rates, manufacturing and production cost overruns, increased purchased material costs and unexpected supply-chain quality issues or interruptions. If we are unable to achieve our goals, we may not be able to increase operating margin, which would negatively impact gross margin and profitability.

Our ability to continue to innovate

We design, build, and test our landers, satellites, spacecraft and subsystems in-house and operate at the forefront of composite structures, liquid rocket engines, guidance, navigation and control software, precision landing and hazard avoidance software, and advanced manufacturing techniques. We believe the synergy of these technologies enables greater responsiveness to the commercial and government requirements for lunar exploration. To continue establishing market share and attracting customers, we plan to continue to make substantial investments in research and development for the continued enhancements of our landers, lunar data network, and other space systems. Over time, we expect our research and development expenditures to continue to grow on an absolute basis, but remain consistent or decrease as a percent of our total revenue as we expand our service offerings.

Components of Results of Operations

Service revenue

We perform work under contracts that broadly consist of fixed-price, cost-reimbursable, time-and-materials or a combination of the three. Pricing for all customers is based on specific negotiations with each customer. For a description of our revenue recognition policies, see the section titled “Critical Accounting Policies and Estimates.”

Historically, most of our revenue has been derived from fixed-price, long-term contracts for the delivery of payloads to the lunar surface. In order to satisfy these contracts, we undertake the engineering for the research, design, development, manufacturing, integration and sustainment of advanced technology space systems. The integration of these technologies and systems lead to an organic and integrated capability to provide lunar access on a commercial services basis. Individual contracts are aggregated by mission (e.g., IM-2, IM-3, IM-4) for management purposes. Revenue is measured based on the amount of consideration specified in a contract with the customer.

We recognize revenue when we transfer control of a promised good or service to a customer in an amount that reflects the consideration we expect to be entitled to in exchange for the good or service. Under the overtime revenue recognition model, revenue and gross profit are recognized over the contract period as work is performed based on actual costs incurred and an estimate of costs to complete and resulting total estimated costs at completion.

Revenue from long-term contracts can fluctuate from period to period largely based on the stage of the project and overall mission. These projects will typically have a ramp up period in the beginning stage and wind down as the mission nears launch date. A significant portion of the revenue (approximately 10% of the contract price) contains variable considerations which is constrained to nil for accounting purposes as it is dependent on a successful mission landing. This may cause fluctuations in future revenue, profits and cash flows.

Since late 2023, we have been performing a more significant amount of work on cost-reimbursable contracts such as OMES III. Under cost-reimbursable contracts, the price is generally variable based upon our actual allowable costs incurred for materials, equipment, reimbursable labor hours, overhead and G&A expenses. Profit on cost-reimbursable contracts may be in the form of a fixed fee or a mark-up applied to costs incurred, or a combination of the two. The fee may also be an incentive fee based on performance indicators, milestones or targets and can be based on customer discretion or in the form of an award fee determined based on customer evaluation of the Company's performance against contractual criteria. Cost-reimbursable contracts are generally less risky because the owner/customer retains many of the project risks, however it generally requires us to use our best efforts to accomplish the scope of the work within a specified time and budget.

Cost-reimbursable contracts with the U.S. government are generally subject to the Federal Acquisition Regulation (“FAR”) and are competitively priced based on estimated or actual costs of providing the contractual goods or services. The FAR provides guidance on types of costs that are allowable in establishing prices for goods and services provided to the U.S. government and its agencies. Pricing for non-U.S. government agencies and commercial customers is based on specific negotiations with each customer.

Grant revenue

From time to time, the Company may be awarded government grants. Government grants or awards are initially recognized when there is reasonable assurance the conditions of the grant or award will be met and the grant or award will be received. After initial recognition, government grants or awards are recognized as income under revenue within the statement of operations on a systematic basis in a manner consistent with the manner in which the Company recognizes the underlying costs included in the cost of revenue within the statement of operations for which the grant or award is intended to compensate.

Cost of revenue (excluding depreciation)

Cost of revenue (excluding depreciation) consists primarily of direct material and labor costs, launch costs, manufacturing overhead, other personnel-related expenses, which include salaries, bonuses, benefits and stock-based compensation expense and freight expense. We expect our cost of revenue to increase in absolute dollars in future periods as we sell more products and services. As we grow into our current capacity and execute on cost-optimization initiatives, we expect our cost of revenue as a percentage of revenue to decrease over time.

Depreciation

Depreciation consists of the depreciation of tangible fixed assets for the relevant period based on the straight-line method over the useful life of the assets. Tangible fixed assets include property and equipment.

General and administrative expense (excluding depreciation)

Selling, general and administrative expense (excluding depreciation) consist primarily of personnel-related expenses for our sales, marketing, supply chain, finance, legal, human resources and administrative personnel, as well as the costs of customer service, information technology, professional services, insurance, travel, allocated overhead and other marketing, communications and administrative expenses. We expect to invest in our corporate organization and incur additional expenses associated with transitioning to, and operating as, a public company, including increased legal and accounting costs, investor relations costs, higher insurance premiums and compliance costs. As a result, we expect that selling, general and administrative expenses will increase in absolute dollars in future periods as a percentage of total revenue.

Interest income

Interest income consists of interest income earned on cash and cash equivalent balances held by us in interest-bearing demand deposit accounts, money market funds, and certificates of deposit.

Interest expense

Interest expense is primarily incurred on the Convertible Notes as discussed in Note 6 - Debt, in addition to interest expense on our finance leases.

Change in fair value of earn-out liabilities

Earn Out Units are classified as liabilities transactions at initial issuance which were offset against paid-in capital as of the closing of the Business Combination. At each period end, the Earn Out Units are remeasured to their fair value with the changes during that period recognized in other income (expense) on the condensed consolidated statement of operations. Upon issuance and release of the shares after each Triggering Event is met, the related Earn Out Units will be remeasured to fair value at that time with the changes recognized in other income (expense), and such Earn Out Units will be reclassed to stockholders’ equity (deficit) on the consolidated balance sheet. See Note 11 of the condensed consolidated financial statements for additional information on the earn-out liabilities.

Change in fair value of warrant liabilities

In connection with the Private Placement, Warrant Exercise Agreement, and the Bridge Loan Conversion, the Company has issued warrants which are classified as liabilities on our balance sheet. At each period end, the warrants are remeasured to their fair value with the changes during the period recognized in other income (expense) on our condensed consolidated statement of operations. As of September 30, 2025, only the Bridge Loan Conversion warrants remain outstanding. See Notes 9 and 11 of the condensed consolidated financial statements for additional information on the warrant liabilities.

Loss on issuance of securities

In connection with the Private Placement, Warrant Exercise Agreement, and the Bridge Loan Conversion, the Company has discussed in Notes 9 and 11 to the condensed consolidated financial statements, the Company issued warrants and recognized a loss on the issuance as the fair value of the securities exceeded the gross proceeds at the issuance date. The Company evaluated the terms of the warrants and determined they meet the criteria in ASC 815, “Derivatives and Hedging”, to be classified as a derivative liability, initially measured at fair value. The subsequent changes in fair value are recognized in earnings in other income (expense) on the condensed consolidated statement of operations.

Other income, net

Other income, net primarily consists of immaterial miscellaneous income sources.

Income tax expense

Intuitive Machines, Inc. is a corporation and thus is subject to United States (“U.S.”) federal, state and local income taxes. Intuitive Machines, LLC is a partnership for U.S. federal income tax purposes and therefore does not pay United States federal income tax on its taxable income. Instead, the Intuitive Machines, LLC unitholders, including Intuitive Machines, Inc., are liable for U.S. federal income tax on their respective shares of Intuitive Machines, LLC’s taxable income. Intuitive Machines, LLC is liable for income taxes in those states which tax entities classified as partnerships for U.S. federal income tax purposes.

Net loss attributable to redeemable noncontrolling interest

Redeemable noncontrolling interest represents the portion of Intuitive Machines, LLC that the Company controls and consolidates but does not own. The noncontrolling interest was created as a result of the Business Combination and represented the common units issued by Intuitive Machines, LLC to the prior investors. The Company allocates net income or loss attributable to the noncontrolling interest based on the weighted average ownership interest during the period. The net income or loss attributable to noncontrolling interests is reflected in the condensed consolidated statement of operations. As of September 30, 2025, the financial results of Intuitive Machines, LLC were consolidated into Intuitive Machines, Inc. and resulted in the allocation of approximately 34.1% of Intuitive Machines, LLC’s net loss to noncontrolling interest.

Net income attributable to noncontrolling interest

Intuitive Machines and KBR entered into a joint venture agreement (the “OMES III JV Agreement”) within Space Network Solutions to execute the OMES III contract with a profits interest of 47% for Intuitive Machines and 53% for KBR, which represents the noncontrolling interest. We have determined that the OMES III JV Agreement represents a silo within Space Network Solutions and is a standalone VIE.

Results of Operations

The following tables set forth our results of operations for the periods presented. The period-period comparison of financial results is not necessarily indicative of future results.

The following table sets forth information regarding our consolidated results of operations for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, and for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

(in thousands)

42

Revenues

Revenue for the three and nine months ended September 30, 2025 and 2024 was primarily driven by NASA and other commercial payload contracts associated with our lunar payload missions as well as the OMES III contract where we provide engineering services to the Landsat Servicing mission at the Goddard Space Flight Center in Maryland, the NSNS contract for the development of a satellite communications and navigation network, and the LTV contract leading the development of the Moon RACER Lunar Terrain Vehicle.

The following provides a summary of the significant contracts and estimated mission launch dates for each lunar payload mission impacting our results of operations:

• The NASA payload contract for the IM-1 mission was awarded in June 2019 and was completed in February 2024. As a result of the successful landing on the lunar surface, previously constrained revenue of approximately $12.3 million as of December 31, 2023 was released and approximately $11.6 million was recognized as revenue during the first quarter of 2024, bringing the total IM-1 mission contract revenue under NASA and other commercial fixed-priced contracts to $132.4 million. As of March 31 2024, the IM-1 mission and all related contracts have been closed out.
• The initial NASA payload contract for the IM-2 mission was awarded in October 2020 and the mission was completed in March 2025. During the third quarter of 2025, the post-launch services were completed and the previously constrained revenue of $5.7 million was released and recognized as revenue, bringing the total IM-2 mission contract revenue under NASA and other commercial fixed-priced contracts to $131.2 million. As of September 30 2025, the IM-2 mission and all related contracts have been closed out.
• The initial NASA payload contract for the IM-3 mission was awarded in November 2021 with an initial targeted mission launch date no later than June 2024. Total IM-3 mission estimated revenue under fixed-priced contracts is $91.3 million (excluding constrained revenue of $9.7 million) as of September 30, 2025 as compared to $93.0 million as of September 30, 2024. The IM-3 mission timeline currently runs through June 2026; however, as discussed below, we expect to further extend the mission launch window into the second half of 2026.
• The initial NASA payload contract for the IM-4 mission was awarded in August 2024 with an initial targeted mission launch date no later than August 2028, although we expect the mission launch to occur during the second half of 2027. Total IM-4 mission estimated revenue under fixed-priced contracts is $105.2 million (excluding constrained revenue of $11.7 million) as of September 30, 2025.

Comparison of three months ended September 30, 2025 and 2024

Total revenue decreased by $6.0 million, or 10%, for the three months ended September 30, 2025 compared to the same period in 2024, primarily driven by decreases on the OMES III contract of approximately $17.1 million due to NASA’s cancellation of the OSAM project task orders and decrease of $9.9 million on LTV contract which was completed during the second quarter of 2025. These decreases were mostly offset by overall increases in revenue from CLPS mission contracts of $13.1 million (as further discussed below) and new projects ramping up in 2025, most notably the NSNS contract with an increase in revenue of $1.8 million and various other engineering services revenue increased by approximately $6.1 million.

For the three months ended September 30, 2025 compared to the same period in 2024, revenue on the IM-2 mission decreased slightly by $0.4 million as the mission was completed in March 2025 and the close-out process was finalized in the third quarter of 2025. Revenue from the IM-3 mission for the three months ended September 30, 2025 compared to the same period in 2024 was relatively flat with a decrease of approximately $0.1 million. The IM-4 mission was awarded in August 2024 and we recognized revenue of $13.7 million during the three months ended September 30, 2025 compared to $0.1 million for the same period in 2024.

Comparison of nine months ended September 30, 2025 and 2024

Total revenue decreased by $8.1 million, or 5%, for the nine months ended September 30, 2025 compared to the same period in 2024, primarily driven by the OMES III contract decrease in revenue of $56.6 million due to NASA’s cancellation of the OSAM project task orders. This decrease was partially offset by a net increase in revenue from CLPS mission contracts of $23.3 million (as further discussed below), as well as increases in revenue related to the ramp up of the NSNS contract of $14.3 million, the LTV contract of $0.9 million, and various other engineering services of $10.0 million,

The IM-1 mission successfully completed in February 2024 and resulted in the release of approximately $12.3 million of previously constrained revenue during the first quarter of 2024. For the nine months ended September 30, 2025 compared to the same period in 2024, revenue on the IM-2 mission increased by $2.6 million as the mission was completed in March 2025 and the mission close-out process was finalized in the third quarter of 2025. Revenue from the IM-3 mission increased by $5.3 million for the nine months ended September 30, 2025 compared to same period in 2024 as activity increases on the IM-3 mission following the close-out of IM-2. The IM-4 mission which was awarded in August 2024, recognized revenue of $27.7 million during the nine months ended September 30, 2025 compared to nil for the same period in 2024.

Cost of revenue (excluding depreciation)

Comparison of three months ended September 30, 2025 and 2024

Total cost of revenue decreased by $7.6 million, or 14%, for the three months ended September 30, 2025 compared to the same period in 2024, primarily driven by decreases on the OMES III contract of $15.4 million due to NASA’s cancellation of the OSAM project task orders and the LTV contract decrease of $8.2 million due to the close-out during the second quarter of 2025, offset by overall cost increases related to the CLPS mission contracts of $7.7 million (as further discussed below), the NSNS contract of $3.8 million, and other engineering services of $4.5 million.

The IM-2 mission cost of revenue decreased by $7.9 million for the three months ended September 30, 2025 compared to the same period in 2024, as the mission was completed in March 2025 and the close-out process was finalized during the third quarter of 2025. IM-3 mission cost of revenue increased to $5.2 million for the three months ended September 30, 2025 compared to $3.8 million for the same period in 2024, as activity picked up on IM-3 following the close-out of IM-2. As of September 30, 2025, the IM-3 contract is in a loss position and the accrued contract loss increased by approximately $1.1 million during the three months ended September 30, 2025. The IM-4 mission which was awarded in August 2024, incurred cost of revenue of $14.2 million during the three months ended September 30, 2025 compared to nil for the same period in 2024. During the second quarter of 2025, IM-4 became a loss contract and the accrued contract loss increased by $0.6 million for the three months ended September 30, 2025.

Comparison of nine months ended September 30, 2025 and 2024

Total cost of revenue decreased by $6.5 million, or 4%, for the nine months ended September 30, 2025 compared to the same period in 2024, primarily driven by the OMES III contract cost decrease of $53.5 million due to NASA’s cancellation of the OSAM project offset by overall cost increases related to the mission contracts of $26.1 million (as further discussed below), the NSNS contract of $9.1 million, the LTV contract of $2.8 million, and various other engineering services of $9.0 million,

The IM-1 mission completed in February 2024 and incurred cost of revenue of $4.8 million during the first quarter of 2024. On the IM-2 mission, cost of revenue decreased by approximately $14.2 million for the nine months ended September 30, 2025 compared to the same period in 2024 as the mission was completed in March 2025. IM-3 mission cost of revenue increased by approximately $12.7 million for the nine months ended September 30, 2025 compared to the same period in 2024, as IM-3 mission activity increases following the final close-out of IM-2. As of September 30, 2025, the IM-3 contract is in a loss position and the accrued contract loss increased by approximately $9.7 million for nine months ended September 30, 2025 compared to the same period in 2024, driven by cost adjustments during the second quarter of 2025 related to decisions to align the mission schedule with the completion of an internally-developed satellite to be placed in lunar orbit to meet NSNS contract obligations. The IM-4 mission which was awarded in August 2024, incurred cost of revenue of $32.4 million during the nine months ended September 30, 2025 compared to nil for the same period in 2024. During the second quarter of 2025, IM-4 became a loss contract and has accrued contract losses of approximately $3.3 million for the nine months ended September 30, 2025.

General and administrative expense (excluding depreciation)

General and administrative expense (excluding depreciation) increased by $8.0 million for the three months ended September 30, 2025 compared to the same period in 2024, and $12.7 million for the nine months ended September 30, 2025 compared to the same period in 2024. These increases primarily reflect the Company’s investment in its workforce to support our operations and business infrastructure, business development, and information technology to optimize corporate and operational processes and systems, and research and development initiatives to expand our product and service capabilities. These increases are summarized below.

The $8.0 million increase for the three months ended September 30, 2025 compared to the same period in 2024 was primarily driven by research and development of $3.7 million, professional services of $1.8 million driven by legal fees, higher employee compensation and benefits expense of $0.7 million, bids and proposals cost of $0.7 million, and various other administrative costs of $1.1 million.

The $12.7 million increase for the nine months ended September 30, 2025 compared to the same periods in 2024 was driven by research and development of $4.4 million, higher employee compensation and benefits expense of $2.9 million, software licenses of $1.5 million, bids and proposals cost of $1.4 million, professional services of $1.3 million driven by legal fees, and various other administrative costs of $1.2 million.

Other income (expense), net

Total other income (expense), net favorable change of $72.1 million for the three months ended September 30, 2025 compared to the same period in 2024 was primarily driven by the favorable changes in the fair value of warrant liabilities of $35.6 million, earn-out liabilities of $33.3 million (as the remaining Earn Out Units vested in the first quarter of 2025), and $4.8 million increase in interest income earned on cash and cash equivalents balances held by us in highly liquid interest bearing overnight sweep and demand deposit accounts slightly offset by increase in interest expense of $1.3 million mostly related to our Convertible Notes issued in August 2025 and various other unfavorable changes of $0.3 million.

Total other income (expense), net favorable change of $144.7 million for the nine months ended September 30, 2025 compared to the same period in 2024 was primarily due to the non-recurrence of the $68.1 million loss on issuance of securities incurred in 2024, the favorable change in the fair value of warrant liabilities of $68.6 million and the earn-out liabilities of $0.4 million, in addition to a $9.6 million increase in interest income earned on cash and cash equivalents balances held by us in highly liquid interest bearing overnight sweep and demand deposits accounts slightly offset by increase in interest expense of approximately $1.4 million mostly related to our Convertible Notes issued in August 2025 and various other net unfavorable changes of $0.7 million.

Key Business Metrics and Non-GAAP Financial Measures

We monitor the following key business metrics and non-GAAP financial measures that assist us in evaluating our business, measuring our performance, identifying trends and making strategic decisions.

Backlog

We define backlog as our total estimate of the revenue we expect to realize in the future as a result of performing work on awarded contracts, less the amount of revenue we have previously recognized. We monitor our backlog because we believe it is a forward-looking indicator of potential sales which can be helpful to investors in evaluating the performance of our business and identifying trends over time. We generally include total expected revenue in backlog when a contract is awarded by the customer under a legally binding agreement. Our backlog does not include any estimate of future potential orders that might be awarded under government-wide acquisition contracts, agency-specific indefinite delivery/indefinite quantity contracts or other multiple-award contract vehicles, nor does it include option periods that have not been exercised by the customer. Due to government procurement rules, in certain cases revenue included in backlog are subject to budget appropriation or other contract cancellation clauses. Nearly all contracts allow customers to terminate the agreement at any time for convenience. If any of our contracts with firm orders were to be terminated, our backlog would be reduced by the expected value of the unfilled orders of such contracts. Consequently, our backlog may differ from actual revenue recognized in our financial statements.

The following table presents our backlog as of the periods indicated:

(in thousands)

Orders comprising backlog as of a given balance sheet date are typically invoiced in subsequent periods. As of September 30, 2025, we expect to recognize approximately 20% of our backlog over the remainder of 2025, approximately 45-50% over the subsequent twelve months of 2026 and the remaining thereafter. Our backlog could experience volatility between periods, including as a result of customer order volumes and the speed of our fulfillment, which in turn may be impacted by the nature of products and services ordered, the amount of inventory on hand to satisfy orders and the necessary development and manufacturing lead time required to satisfy certain orders.

Backlog decreased by $92.5 million as of September 30, 2025 compared to December 31, 2024, primarily due to continued performance on existing contracts of $165.3 million, IM-2 mission close-out adjustments of $8.4 million and adjustments on the IM-3 mission of $1.8 million, partially offset by $83.0 million in new awards primarily associated with the NSNS contract of $18.0 million, TSC grant of $10.0 million, OMES III contract of $16.2 million, and various other contracts.

As of September 30, 2025, our backlog of $235.9 million exceeded our remaining performance obligations of $119.3 million as reported in Note 3 - Revenue to our condensed consolidated financial statements included in this Quarterly Report. The difference of $116.6 million was primarily related to $39.3 million of variable consideration associated with constrained revenue and $77.3 million in backlog related to the funded value of the OMES III contract, the NSNS contract, and various other contracts where revenue is recognized when services are performed and contractually billable and therefore not included in remaining performance obligations.

Non-GAAP Financial Measures

Adjusted EBITDA

Adjusted EBITDA is a key performance measure that our management team uses to assess our operating performance. We calculate Adjusted EBITDA as net income (loss) excluding results from non-operating sources including interest income, interest expense, share based compensation, change in fair value instruments, gain or loss on issuance of securities, other income/expense, depreciation, impairment of property and equipment, and provision for income taxes.

We present Adjusted EBITDA because we believe it is helpful in highlighting trends in our operating results and because it is frequently used by analysts, investors, and other interested parties to evaluate companies in our industry.

Adjusted EBITDA has limitations as an analytical measure, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

• Adjusted EBITDA does not reflect interest income, interest expense or other non-operating gains and losses, which may represent an increase to or reduction in cash available to us;
• Adjusted EBITDA does not consider the impact of share-based compensation expense, which is expected to continue to be part of our compensation strategy;
• Adjusted EBITDA does not consider the impact of change in fair value of earn-out liabilities, change in fair value of warrant liabilities, loss on issuance of securities, or impairment of property and equipment, that we do not consider to be routine in nature for the ongoing financial performance of our business;
• Adjusted EBITDA excludes non-cash charges for depreciation of property and equipment, and although the assets being depreciated may have to be replaced in the future, Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; and
• Adjusted EBITDA does not reflect provisions for income taxes, which may represent a reduction in cash available to us.

Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and our other U.S. GAAP results.

The following table presents a reconciliation of net loss, the most directly comparable financial measure presented in accordance with U.S. GAAP, to Adjusted EBITDA.

(in thousands)

Free Cash Flow

We define free cash flow as net cash (used in) provided by operating activities less purchases of property and equipment. We believe that free cash flow is a meaningful indicator of liquidity that provides information to management and investors about the amount of cash generated from operations that, after purchases of property and equipment, can be used for strategic initiatives, including continuous investment in our business and strengthening our balance sheet.

Free Cash Flow has limitations as a liquidity measure, and you should not consider it in isolation or as a substitute for analysis of our cash flows as reported under U.S. GAAP. Some of these limitations are:

• Free Cash Flow is not a measure calculated in accordance with U.S. GAAP and should not be considered in isolation from, or as a substitute for financial information prepared in accordance with U.S. GAAP.
• Free Cash Flow may not be comparable to similarly titled metrics of other companies due to differences among methods of calculation.
• Free Cash Flow may be affected in the near to medium term by the timing of capital investments, fluctuations in our growth and the effect of such fluctuations on working capital and changes in our cash conversion cycle.

The following table presents a reconciliation of net cash used in operating activities, the most directly comparable financial measure presented in accordance with U.S. GAAP, to free cash flow:

(in thousands)

Liquidity and Capital Resources

Since inception, we have funded our operations through internally generated cash on hand, proceeds from sales of our capital stock, proceeds from warrant exercises, and our proceeds from the issuance of bank debt. We assess our liquidity in terms of our ability to generate adequate amounts of cash to meet current and future needs. Our expected primary uses of cash on a short and long-term basis are for working capital requirements, general corporate purposes, and capital expenditures as well as research and development efforts and potential mergers and acquisitions. Our primary working capital requirements are for project execution activities including purchases of materials, subcontracted services and payroll which fluctuate during the year, driven primarily by the timing and extent of activities required on new and existing projects. Our capital expenditures are primarily related to machinery and equipment, computers and software, and leasehold improvements for general corporate and operational purposes. We expect construction in progress to continue to increase as we develop data relay satellites and ground networks associated with our Data Transmission Services business.

As of September 30, 2025, we had cash and cash equivalents of $622.0 million and working capital of $560.0 million. The Company invests excess cash in highly-liquid, low risk interest-bearing demand deposit accounts, money market funds, and certificates of deposits, all of which are with major financial institutions.

On August 18, 2025, the Company issued $345.0 million aggregate principal amount of 2.500% convertible senior notes due 2030 (the “Convertible Notes”). The Convertible Notes are general, unsecured obligations of the Company and bear interest at a fixed rate of 2.500% per year, payable semiannually in arrears on April 1 and October 1 of each year, beginning on April 1, 2026. The Convertible Notes will mature on October 1, 2030, unless earlier converted, redeemed, or repurchased. The net proceeds of the Convertible Notes were $334.6 million after deducting the initial purchasers’ discount and commissions and the offering expenses payable by the Company and we used approximately $36.8 million of the net proceeds to pay the cost of the capped call transactions (as defined in Note 6). For further information on the Convertible Notes, refer to Note 6 - Debt.

On March 4, 2025, we entered into a loan and security agreement with Stifel Bank which provides for a secured revolving credit facility in an aggregate principal amount of up to $40.0 million. As of the date of this filing, the revolving credit facility remains unborrowed. See Note 6 - Debt for additional information on this loan and security agreement.

On November 3, 2025, the Company entered into a definitive agreement to acquire 100% of the issued and outstanding membership interests of Lanteris Space Systems, formerly Maxar Space Systems, a spacecraft manufacturer, from Advent International LLC. The aggregate consideration for the acquisition is $800 million, consisting of $450 million in cash and $350 million in the Company’s Class A Common Stock, subject to adjustments. The transaction is expected to close in the first quarter of 2026, subject to customary regulatory approvals and closing conditions. See Note 17 - Subsequent Events for additional information on this acquisition.

Management believes that the cash and cash equivalents as of September 30, 2025 and the liquidity provided under the Convertible Notes and the Stifel revolving credit facility, will be sufficient to fund the short-term liquidity needs and the execution of the business plan through at least the twelve-month period from the date the financial statements are issued.

Cash Flows

The following table summarizes our cash flows for the periods presented:

(in thousands)

Cash Flows for the nine months ended September 30, 2025 and 2024

Operating Activities

During the nine months ended September 30, 2025, our operating activities used $7.0 million of net cash as compared to $55.6 million of net cash used during the nine months ended September 30, 2024. Changes in operating assets and liabilities which consist primarily of working capital balances for our projects may vary and are impacted by the stage of completion and contractual terms of projects. The primary components of our working capital accounts are trade accounts receivable, contract assets, accounts payable, and contract liabilities.

Investing Activities

During the nine months ended September 30, 2025, investing activities used $26.0 million of net cash as compared to $5.2 million of net cash used during the nine months ended September 30, 2024. The $20.8 million increase in investing activities was driven by capital expenditures associated primarily with the fabrication and development of commercial communications satellites and navigation network, and capital expenditures related to our expansion to a new leased facility at Houston Spaceport to support the growth of our operations.

Financing Activities

During the nine months ended September 30, 2025, financing activities provided $447.4 million of net cash as compared to $147.9 million of net cash provided during the nine months ended September 30, 2024.

During 2025, our financing activities primarily included $334.6 million in net proceeds from the issuance Convertible Notes, $176.6 million in proceeds from the exercise of warrants, slightly offset by $36.8 million for the purchase of capped call transactions associated with the issuance of the Convertible Notes, $20.7 million for share repurchase, $4.8 million in net activity related to our share-based awards, and $1.5 million in distributions to noncontrolling interests.

During 2024, our financing activities primarily included $107.5 million in net proceeds from the issuance of securities, $51.4 million in proceeds from the exercise of warrants, $10.0 million in proceeds received in borrowings under the Bridge Loan offset by the repayment of $10.0 million, $8.0 million repayment on a loan under the Credit Mobilization Facility $2.0 million in net activity related to our share-based awards, and $1.0 million in distributions to noncontrolling interests.

Contractual Obligations and Commitments

The following table presents our significant contractual obligations and commitments as of September 30, 2025 (in thousands):

(1) Represents the undiscounted payments for lease arrangements for certain facilities and equipment with various expiration dates through 2048.

(2) From time-to-time, we enter into long-term commitments with vendors to purchase launch services and for the development of certain components in conjunction with our obligations under revenue contracts with our customers. This represents our significant remaining purchase obligations under non-cancelable commitments.

Lunar Production and Operations Center Expansion

In July 2025, we executed an amendment to our ground lease agreement to expand our Lunar Production and Operations Center (“LPOC”) at the Houston Spaceport at Ellington Airport. The expansion calls for an additional investment of approximately $12.6 million by the Company for the construction of new production and testing facilities, plus support infrastructure, to scale our lunar lander assembly, Earth-reentry systems, Lunar Terrain Vehicle development, and NASA’s Near Space Network Services. The amendment expands the total leased project site by an additional tract of approximately 3.0 acres. The amendment extends the lease term from 20 years to 25 years (ending October 2048), with three optional renewal periods of 5 years each, and reduces the right-of-use assets and liabilities by approximately $7.1 million. The Company accounted for this amendment as a lease modification by remeasuring the right-of-use assets and liabilities as of the effective date. Should construction costs exceed the estimated expansion investment, the Company will consider and account for the excess as variable lease payments or, if the excess costs is significant, the Company will remeasure the lease liability and right-of-use asset. Furthermore, the amendment includes lease components that have not yet commenced. The Company expects to recognize additional lease liabilities of approximately $7.9 million as the expansion phases are completed in 2026.

Spaceport Facility Lease Agreement

Also in July 2025, we executed a sublease for additional office and production space at the Houston Spaceport at Ellington Airport totaling approximately 116,000 square feet. The leased production space includes turn-key production equipment, including test facilities, that allow for an efficient and cost-effective expansion of our manufacturing capabilities. The lease agreement has a remaining term of 7 years. As of September 30, 2025, the Company recorded operating right-of-use assets of $6.5 million and operating lease liabilities of $6.7 million. .

Tax Receivable Agreement

See Note 7 of the condensed consolidated financial statements for information regarding our tax receivable agreement.

Debt

For disclosures regarding the Convertible Notes and Stifel Loan Agreement, refer to Note 6 - Debt of the condensed consolidated financial statements

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

We believe that the following accounting policies involve a high degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of our operations. Significant accounting policies employed by us, including the use of estimates, are presented in Note 2 - Summary of Significant Accounting Policies to our condensed consolidated financial statements included elsewhere in this Quarterly Report and our audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023 contained in our Annual Report on Form 10-K, filed with the SEC on March 25, 2025.

The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and judgements that affect the amounts reported in those financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates.

Revenue Recognition

We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers. Our revenue is primarily generated from the progress on long-term lunar mission contracts and engineering services for the research, design, development, and manufacturing of advancement technology aerospace system.

Revenue is measured based on the amount of consideration specified in a contract with a customer. Revenue is recognized when and as our performance obligations under the terms of the contract are satisfied which generally occurs with the transfer of services to the customer. For each long-term contract, we determine the transaction price based on the consideration expected to be received. We allocate the transaction price to each distinct performance obligation to deliver a good or service, or a collection of goods and/or services, based on the relative standalone selling prices.

For most of our business, where performance obligations are satisfied due to the continuous transfer of control to the customer, revenue is recognized over time. Where the customer contracts with us to provide a significant service of integrating a complex set of tasks and components into a single project or capability, those contracts are accounted for as single performance obligations. We recognize revenue generally using the cost-to-cost method, based primarily on contract costs incurred to date compared to total estimated contract costs at completion. This method is deemed appropriate in measuring performance towards completion because it directly measures the value of the goods and services transferred to the customer. Billing timetables and payment terms on our contracts vary based on a few factors, including the contract type. Typical payment terms under fixed-price contracts provide that the customer pays either performance-based payment based on the achievement of contract milestones or progress payments based on a percentage of costs we incur.

Due to the nature of the work required to be performed on many of our performance obligations, the estimation of total revenue and cost at completion (the process described below in more detail) is complex and subject to many variables and requires significant judgment. The consideration to which we are entitled on our long-term contracts may include both fixed and variable amounts. Variable amounts can either increase or decrease the transaction price.

We include estimated amounts of variable consideration in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the contract price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. We reassess the amount of variable consideration each accounting period until the uncertainty associated with the variable consideration is resolved. Changes in the assessed amount of variable consideration are accounted for prospectively as a cumulative adjustment to revenue recognized in the current period.

When changes are required for the estimated total revenue on a contract, these changes are recognized on a cumulative catch-up basis in the current period. A significant change in one or more estimates could affect the profitability of one or more of our performance obligations. If estimates of total costs to be incurred exceed estimates of total consideration the Company expects to receive, a provision for the remaining loss on the contract is recorded in the period in which the loss becomes evident.

Emerging Growth Company Status

We are an “emerging growth company” (“EGC”), as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is either not an emerging growth company or an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Loss of EGC and Smaller Reporting Company Status

As of September 30, 2025, we continue to qualify as an “emerging growth company” and a “smaller reporting company” as defined under Rule 12b-2 of the Exchange Act. As such, we are permitted to take advantage of certain reduced disclosure and reporting requirements applicable to such companies in this and future filings. However, we will cease to qualify as an emerging growth company and a smaller reporting company as of December 31, 2025. This change in status is due to our classification as a large accelerated filer, as our public float exceeded $700 million as of June 30, 2025, and we will have been subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act for at least 12 calendar months and have filed at least one annual report as of December 31, 2025. Beginning with the fiscal year ended December 31, 2025, we will be subject to increased disclosure and compliance obligations, including the requirement to obtain an auditor attestation of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002. As a result, we will incur additional expenses in connection with compliance with these regulations and our management will need to devote additional time and effort to implement and comply with such requirements.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

In accordance with Exchange Act Rules 13a-15 and 15d-15, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2025, to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Our disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving their desired control objectives.

There have been no changes in the Company’s internal control over financial reporting during the three months ended September 30, 2025 that have materially affected, or that are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Factors that could cause our actual results to differ materially from those in this report include the risk factors described in our 2024 Annual Report on Form 10-K. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in the 2024 Annual Report on Form 10-K except as disclosed below.

We are subject to risks from the continuation of the ongoing U.S. federal government shutdown.

Our business is exposed to operational and financial disruptions caused by the U.S. federal government shutdown that began on October 1, 2025. The ongoing U.S. federal government shutdown may result in us experiencing delays or decreases in task orders with NASA or other governmental agencies or potentially the suspension of work on contracts in progress or in payment delays related to the funding status of different programs. Given the indefinite nature of the current shutdown and the absence of a clear resolution timeline, we anticipate continued volatility in the federal contracting environment. If the shutdown persists for an extended timeframe, it could materially and adversely affect our results of operations and financial performance.

As part of growing our business, we have made and may continue to make acquisitions. Any acquisitions, partnerships or joint ventures into which we enter could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations.

From time to time, we may evaluate potential strategic acquisitions of businesses, including partnerships or joint ventures with third parties, to add new products and technologies, acquire talent, grow new sales channels or enter into new markets or sales territories. For example, on November 3, 2025, the Company entered into a Membership Interest Purchase Agreement, to acquire Lanteris Space Systems. Pursuant to the Purchase Agreement, and upon the terms and subject to the conditions therein, the Company will purchase from Advent 100% of the issued and outstanding membership interests of Lanteris The aggregate consideration for the acquisition is $800 million, consisting of $450 million in cash and $350 million in the Company’s Class A Common Stock, subject to adjustments as set forth in the Purchase Agreement. The transaction is expected to close in the first quarter of 2026, subject to customary regulatory approvals and closing conditions.

We may not be able to continue the operational success of the businesses we acquire or successfully finance or integrate such businesses or the businesses with which we form a partnership or joint venture. Furthermore, the integration of any acquisition may divert management’s time and resources from our core business and disrupt our operations or may result in conflicts with our business. Any acquisition, partnership or joint venture may not be successful, may reduce our cash reserves, may negatively affect our earnings and financial performance and, to the extent financed with the proceeds of debt, may increase our indebtedness. Further, depending on market conditions, investor perceptions of the Company and other factors, we might not be able to obtain financing on acceptable terms, or at all, to implement any such transaction. We cannot ensure that any acquisition, partnership or joint venture we make will not have a material adverse effect on our business, financial condition and results of operations.

In addition to possible shareholder approval, we may need approvals and licenses from relevant government authorities for the acquisitions to comply with applicable laws and regulations, and a failure to obtain such approvals and licenses could result in delays in completing an acquisition and increased costs, and may disrupt our business strategy. Furthermore, acquisitions and the subsequent integration of new assets, businesses, key personnel, customers, vendors and suppliers require significant attention from our management and could result in a diversion of resources from our existing business, which in turn could have an adverse effect on our operations. Acquired assets or businesses may not generate the financial results we expect. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities and potential exposure to unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant.

We will no longer qualify as an “emerging growth company” nor a “smaller reporting company” as of December 31, 2025, and, as a result, we will have to comply with increased disclosure and compliance requirements.

We are currently an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act and a “smaller reporting company” (“SRC”) under the Securities and Exchange Commission (“SEC”) rules. However, because (i) the market value of our common stock held by non-affiliates exceeded $700 million as of June 30, 2025, (ii) we have been a public company for more than one year, and (iii) we have filed at least one annual report, we will no longer qualify as an EGC or a SRC as of December 31, 2025 and will be a large accelerated filer beginning January 1, 2026 for future filings.

As a large accelerated filer, we will be subject to certain disclosure and compliance requirements that apply to other public companies but that did not previously apply to us due to our status as an EGC and a SRC. These requirements include, but are not limited to:

• the requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002;
• compliance with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements;
• the requirement that we provide more detailed disclosures regarding executive compensation; and the requirement that we hold a non-binding advisory vote on executive compensation and obtain stockholder approval of any golden parachute payments not previously approved. We expect that the loss of EGC and SRC status and compliance with the additional requirements of being a large accelerated filer will increase our legal, accounting and financial compliance costs and costs associated with investor relations activities, and cause management and other personnel to divert attention from operational and other business matters to devote substantial time to public company reporting requirements. In addition, if we are not able to comply with changing requirements in a timely manner, the market price of our stock could decline and we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the SEC or other regulatory authorities, which would require additional financial and management resources.