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Operator: Ladies and gentlemen, thank you for standing by. And welcome to the Intuitive Machines’ Third Quarter 2024 Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to turn the conference over to Stephen Zhang, Head of Investor Relations. Please go ahead.

Stephen Zhang: Good morning. Welcome to the Intuitive Machines’ third quarter 2024 earnings call. Chief Executive Officer, Steve Altemus and Chief Financial Officer, Pete McGrath are leading the call today. Before we begin, please note that some of the information discussed during today’s call will consist of forward-looking statements, setting forth our current expectations with respect to the future of our business, the economy, and other events. The company’s actual results could differ materially from those indicated in any forward-looking statements due to many factors. These factors are described under forward-looking statements in the company’s earnings press release and the company’s most recent 10-K and 10-Q filed with the SEC.

We do not undertake any obligation to update forward-looking statements. We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in the applicable SEC rules and regulations. Reconciliations to the company’s GAAP measures are included in the earnings release filed on Form 8-K. Finally, we posted an earnings call presentation to our website, which provides additional context on our operational and financial performance. You can find this presentation on our Investor Relations’ page at www.intuitivemachines.com/investors. Now, I’ll turn the call over to Steve Altemus.

Steve Altemus: Thanks Steven and welcome to everyone joining us this morning. Intuitive Machines had a very strong third quarter highlighted by key awards, revenue growth and we closed the quarter with record highs in both cash and backlog, validating our upward trajectory. Q3 revenue was $58.5 million, over four times our Q3 sales last year. Our cash balance at the end of Q3 reached $89.6 million. This strong cash position combined with zero debt provides ample liquidity as we continue our blueprint to commercialize the moon. Our backlog also hit a company record at $316.2 million, primarily driven by lunar surface delivery missions and the first task order for the Near Space Network Services contract. Throughout the quarter we continued to focus on our three core service pillars, delivery, data transmission and infrastructure as services.

These pillars provide foundational capabilities that enable the missions and goals of commercial and government exploration of the moon. We made progress across all three pillars by first securing another South Pole lunar delivery mission, then winning the Near Space Network Services contract, and finally continuing to mature both our LTV Lunar Terrain Vehicle design in conjunction with our heavy cargo class lander. These strategic revenue streams bring our business thesis clearly into view, allowing us to focus on capturing more operational services which we believe will provide long tail revenues with higher margins. As we look forward to executing on these strategic advances, we appointed Pete McGrath as our Chief Financial Officer. Previously our Chief Operating Officer, Pete brings 35 years of aerospace and financial expertise to the team.

His unique experiences tightly align the company’s financial strategy with the operational demands of executing large scale complex programs. It’s great to have you on the call, Pete.

Pete McGrath: Thanks Steve.

Steve Altemus: Now moving on to data transmission services and the NSNS contract and in line with our growing momentum, we captured the Near Space Network Services contract in September which marked a transformative step for Intuitive Machines in data transmission for in space communications and navigation. As the sole awardee, the contract is valued up to $4.82 billion over the next decade. We intend to leverage our already contracted delivery missions to deploy a constellation of lunar data relay satellites around the moon. This lunar constellation is central to our strategy to commercialize the moon, supporting both commercial ventures and the Artemis campaign’s goal of sustained human lunar presence. This contract introduces a pay by the minute service model focused on scalable data transmission services.

This is significant in that we believe it boosts margin potential through its software as a service like revenue model. We are able to incorporate communication satellite deliveries with each lunar lander mission at a marginal cost due to extra performance on the booster, resulting in significant cost savings. As such, we intend to deploy the first of five lunar data relay satellites on our third contracted surface delivery mission. This deployment enables an initial operational capability that allows NASA to initiate pay by the minute services. Two additional satellites are slated for delivery on our fourth surface delivery mission awarded in September, followed by two final satellite deployments to complete the constellation. For the lunar missions themselves, our next surface delivery mission, IM-2, we completed a propulsion system hot fire test on the vehicle, representing the most complex integrated test of the lander thus far, in preparation for a mission window in the first quarter from NASA’s Kennedy Space Center.

The mission is designed to validate water hunting infrastructure such as a prospecting drill and essential mobility services like our Micro Nova Hopper, which is designed to deploy off the lander and prospect by hopping across the lunar surface. Our third delivery mission, IM-3, is on a similar pace. Right now the vehicle is undergoing integrated vibration testing and we anticipate a mission window through early 2026. With this launch opportunity we will also deploy the first of five data relay satellites under the Near Space Network Services contract as I mentioned. We intend to deliver the next two data relay satellites on our fourth service delivery mission. IM-4 NASA awarded Intuitive Machines that $116.9 million mission in September and we expect additional commercial payloads to join that mission.

This South Pole mission includes 6 NASA payloads in addition to a European Space Agency-led drill suite to search for water ice. During the third quarter, Intuitive Machines continued to mature the lunar terrain vehicle design, culminating in delivery of our Prototype vehicle to NASA’s Johnson Space center for Human in the Loop testing where astronauts will evaluate crew interfaces and operations with the vehicle. Prior to delivery to NASA, Intuitive Machines was honored to host Apollo-era moonwalkers Charlie Duke and Harrison Schmitt to evaluate our design. This was a unique opportunity for our mechanics to incorporate real life astronaut experience of driving the original Apollo rover into our design for the NASA’s LTVS program. This past Thursday, the LTV team unveiled our first fully electric crab walking motorized vehicle at NASA’s official visitor center in Houston.

Later this month you will see our vehicle performing testing near Meteor Crater National Park in Arizona. Since the LTV is large and heavy roughly the size of a pickup truck, it requires a larger lander for delivery to the surface of the moon. Through a series of rigorous design reviews we continue to mature our heavy cargo lander variant Nova-D, which will be capable of delivering the pickup truck sized lunar terrain vehicle to the surface of the moon. Recall the next phase of the LTV contract is still competitive, as Intuitive Machines is one of three vendors vying for the delivery and demonstration mission which is expected to be awarded late next year. It’s important to note that the LTVS contract is more than just a mobility platform, it’s a full service offering.

This includes the ability to deliver the vehicle to the lunar surface, to communicate and autonomously operate the vehicle while on the surface of the moon over a 10-year period. The experience gained from past and near term surface delivery missions will enable Intuitive Machines as the only prime contractor in the LTVS bidding pool with validated experience delivering to, transmitting data from and autonomously operating infrastructure on the surface of the moon. Our strategic approach to create a lunar economy appears well aligned with current and future political priorities. We believe the United States returning to the moon has and will continue to have bipartisan support as we enter the next generation space race with China. It’s critical for the country to develop a sustainable lunar economy and lead the world in space exploration.

Our government has made it clear that returning to the moon is of strategic importance to the United States. Collectively, the industry must continue to produce capabilities that enable expansion of the lunar economy. For our part, we plan to accomplish this through a steady cadence of missions gradually learning about how to live and work on the Moon. For NASA to successfully execute its Artemis campaign in a globally competitive landscape, we see the possible need for a reformulation driven by budgetary and schedule realities. We believe NASA must continue to partner with commercial industries to drive an affordable incremental roadmap that enables steady visible progress. The emphasis on low cost, combined with precursor work to gain engineering insights for surface infrastructure are essential for a long-term stay on the Moon and a thriving lunar economy.

This infrastructure and data first approach can then accommodate potential delays and budget shortfalls in developing the human systems while keeping them squarely in sight for the United States. The company finished the third quarter by taking an immediate, tangible step towards playing a key role in future commercial and government lunar activities by establishing a foothold in lunar orbit before our first relay satellite is deployed. Intuitive Machines has assumed the contract, the team, and the responsibility for operations and data analysis for the NASA’s Lunar Reconnaissance Orbiter and Shadowcam cameras and imagery. The Lunar Reconnaissance Orbiter has been circling the moon since 2009 with the primary goal of making a 3D map of the Moon’s surface and is critical for analyzing and selecting all future lunar landing sites.

Shadowcam’s objective is to provide information about the distribution and accessibility of water, ice and other volatiles on the surface. With Intuitive Machines now participating in collection of lunar surface data, we’ve added an incredible team and technical capability in Phoenix, Arizona. Prior to joining Intuitive Machines, this team supported our first mission including capturing imagery and documenting our actual landing location on the surface of the Moon. This team brings invaluable experience that we believe will accelerate Intuitive Machines ability to field the first Lunar data relay satellite constellation under the Near Space Network Services contract while providing immediate high resolution images of the Moon for prospecting, landing site selection and mobility mission planning for the entire industry.

With that, I’ll turn the call over to Intuitive Machines Chief Financial Officer, Pete McGrath.

Pete McGrath: Thank you Steve, and thanks everybody for joining us today. As Steve mentioned, we had another strong quarter financially with quarter three revenues of $58.5 million up 359% over the same quarter of the prior year and closed the quarter with record highs in both cash and backlog. Q3 revenue was driven primarily by OMES, CLPS and LTVS execution. OMES revenue was $34.1 million in the quarter, down about $5 million from Q2 as expected given the ramp down of OSAM within OMES. We expect a continued ramp down here late in the fourth quarter and into the first quarter of next year. We continue to work with NASA on opportunities for further work scope within the OMES contract for in space assembly and manufacturing technology development as well as space weather monitoring systems and applications.

We expect to see some revenue growth starting in the fourth quarter as a result of CP-22 and NSNS awards. In Q3 we paid off the outstanding $3 million balance on our credit mobilization loan resulting in zero debt on our balance sheet. Zero debt coupled with our strong cash balance gives the confidence that we have ample liquidity to execute on our growth trajectory. Gross profit was $4.1 million for the quarter versus a negative $13.8 million in the prior year, demonstrating our continued focus on driving towards profitability. Operating loss for the quarter was negative $13.7 million versus negative $24.0 million in the third quarter of 2023. The lower operating loss in the quarter was again driven primarily by the gross profit in the quarter, partially offset by a $5 million impairment of property and equipment.

SG&A for the quarter was $12.3 million versus $9.9 million in the prior year. The higher SG&A was due to increase in public company costs, employee compensation benefits and rent on our new corporate headquarters. Operating cash used was $17.9 million in the quarter with capital expenditures of $1.4 million resulting in free cash flow in the quarter with an outflow of $19.3 million. Our cash balance significantly increased in Q3 to $89.6 million, the highest quarter ending balance in company history. This was driven by $80.5 million of cash raised in the quarter through the at the market offering program. Our ATM was completed and the committed equity facility from our IPO expired unused in the third quarter. Two significant receivables were collected shortly after quarter end.

As such, our cash position increased at month end October to $106.9 million. With our cash balance at $106.9 million coupled with our strong visibility into the timing of receivables from contracted milestone payments, this gives us the confidence that we will end the year with a similar cash balance. We ended the third quarter with contracted backlog of $316.2 million, a record for the company. This includes our recent CLPS award of $116.9 million, but does not yet include the full set of initial task orders for Near Space Network Services totaling $150 million through the multiple task orders. We expect continued backlog growth as we receive new OMES and NSNS task orders while winning new business both domestically and international and with multiple U.S. government customers.

Overall, this was another strong quarter for Intuitive Machines. As we reach the end of the year, we are narrowing our full year revenue guidance range to $215 million to $235 million and within that range trending towards the midpoint. As demonstrated in the quarter, we continue to execute on current programs while winning key awards. I look forward to guiding the company through a new lens as CFO and focus on managing costs efficiently to drive towards profitability and achieve our financial targets. With that operator, we are now ready for questions.

Operator: [Operator Instructions] And our first question comes from Austin Moeller with Canaccord Genuity. Your line is open.

Austin Moeller: Hi, good morning, Steve and Pete.

Steve Altemus: Morning Austin.

Austin Moeller: My first question here. Do you anticipate that LTV could still go to multiple vendors even after NSNS was awarded sole source to you?

Steve Altemus: Well, yes, I think we’re having discussions with NASA currently about what the strategy might be and whether it’ll be a single award or multiple awards on LTV. That hasn’t yet been determined, but I think the door is open for discussions and they’re receptive to that possibility Austin.

Austin Moeller: And then what types of Space or other DoD programs are you looking at bidding on for ex geo [ph] contract work?

Steve Altemus: Yes, we have some opportunities that we’ve been talking with the DoD community about, and really those are in the areas of like orbital transfer stages, things like that versus surface operations. So we think there’s an opportunity for us as we launch towards the moon for rideshare payloads that can go into other orbits in the cislunar space.

Austin Moeller: Excellent. Thanks for all the details.

Operator: Thank you. And our next question comes from Griffin Boss with B. Riley Securities. Your line is open.

Griffin Boss: Hi, good morning. Thanks for taking my questions. So first for me, I know we’ll see a breakout when the 10-Q comes out, but can you give some more color on program mix for revenue in the quarter? I know OMES was probably, I would say 50% to 60% of the top line. But any color on other program contributions and to what degree LTV that one, the initial one year contract contributed to the third quarter results.

Steve Altemus: Yes, Pete, why don’t you take that one?

Pete McGrath: Yes. So the 34 was mostly attributed to OMES. The other programs are really a mix of the Landers plus LTV. LTV contract was only $30 million for the first year. So that’s pretty level loaded over a 12-month period. So that’s only contributing about 2 to 3 million a month. I’m sorry, a month. Yes.

Griffin Boss: Okay, great. Two to three per month. Thanks. And then is there any expectations you could share for how NSNS could potentially ramp in the fourth quarter and then maybe in 2025? I acknowledge it’s an IDIQ, so perhaps you don’t have visibility, but maybe you have visibility into kind of initial task orders that you’re bidding on there. And maybe any color on the degree of those or the magnitude of those task orders would be helpful.

Pete McGrath: Yes. I can give you more detail around the task order breakdown for the initial $150 million verification phase. The first task order is a six month period of performance which is the one we’re under today. That’s worth about $9 million. The second task order would follow that, which is also about six months in period of performance for $18 million. And then that’s followed by the third task order which is $43.5 million, which has a — that one actually is one where we complete on orbit verification of the first satellite and actually start operational task orders, which is additional funding beyond the verification task order and allows us access to the 4 point or the 4 million 4 billion plus contract value. That one’s roughly about 6 months to 12 months.

And then the task order 4 is another one. That’s about a 12-month period of performance and that’s $61.5 million. That gets us to where we’ve verified on over performance of the second two satellites. And then that opens up more additional task orders for operations. And then the final one’s another task order 5 for 12 months, which gets us to the final operational capability of the satellites. That value is about $18 million. And then that allows us to get to full operational capability and provides full access to the follow on operational task orders.

Griffin Boss: Excellent. That’s great color. I really appreciate it. And thanks for taking my questions.

Steve Altemus: Thanks, Griffin.

Operator: Thank you. And our next question comes from Edison Yu with Deutsche Bank. Your line is open.

Edison Yu: Hey, good morning everyone, and thanks for taking our questions. First off, just kind of on the industry, we obviously got a new administration coming in and I think there’s this. There’s this notion that it could be very positive for the space industry. Curious if you have any initial thoughts on just that sentiment.

Steve Altemus: Yes, well, certainly like I said, we had bipartisan support over the past five or six years, certainly in cislunar space. And so we see a continuation of the United States focus strategically on the moon and returning humans to space or to the moon. But we see that really the commercial space activities are here to stay. And commercial space will be an integral component to opening up the cislunar economy. You see that in the NSNS contract. You see that the commercial sector, Intuitive Machines in particular, is now an integral partner with NASA for space communications and navigation. And we expect that only to continue and actually be strengthened in this administration.

Edison Yu: Understood. And then just a follow up, I was wondering if you could dive maybe a little bit deeper into your competitive advantage on LTV. Is it more the data, the rover, the lander? Is it all three?

Steve Altemus: Yes, like I said in the pre –the remarks here was that, the LTV is a service. It’s a full service offering. It’s not just a rover or a moon buggy. You have to deliver it to the surface, you have to operate it on the surface autonomously, which means you need communications and navigation abilities to bring the data down and control it on the surface. And so the three things that we set the company up for, which is delivery, data transmission services and infrastructure as a service, we provide all three uniquely. And that really sets us up for this LTV service provide to provide to NASA unlike any other of the competition. So I feel we’re in a strong place strategically and we’ll see how NASA reacts when they come out and compete it next year. We expect that to be competed in the latter half of the year and awarded late 2025.

Edison Yu: Thank you very much.

Operator: Thank you. And our next question comes from Andres Sheppard with Cantor Fitzgerald. Your line is open.

Andres Sheppard: Hey, everyone. Good morning.

Steve Altemus: Morning, Andres.

Andres Sheppard: Great to hear from you guys. Congratulations on another strong quarter, good revenue beat and great liquidity position there. A lot of our questions, I think, have been asked, but maybe, Steve, just wondering, as we look into the IM-2 mission launch window for January and then a decision on the LTV contract late next year, what are some things that investors that you think investors should be aware of as you get closer and closer to those timelines? Any particular milestones or catalysts for both those two that we should be paying close attention to? Thank you.

Steve Altemus: Yes, thanks for that question. I think I mentioned for mission two, IM-2, which is essentially our prospecting mission, very complicated mission to deploy a drill, a hopper, a rover that is on target to meet a February launch window, which is amazing that the team pulled together to get that thing, the lander put together. So that’s on track. And you’ll see us flying that mission in the first quarter as I said. What’s also interesting on the heels of that success, we also have essentially a design review with NASA on the Nova-D, our heavy cargo lander that comes up in March. And those two things the delivery to the South Pole for a prospecting mission in February and a design review for the heavy cargo variant in March really tees us up for entering into the down select for the delivery demonstration mission of LTV.

We expect that contract to start the proposal activities to start in May and be awarded by the end of the year. And so those are things I’ll be looking towards and putting energy into to ensure success.

Andres Sheppard: Wonderful. Super helpful. I appreciate that color Steve. And maybe just a quick follow up if I may. So you ended the quarter with about $90 million in liquidity, which I believe again is the highest on record. Just curious, how are you thinking about that kind of cash runway, cash burn or expectations for liquidity over the next 12 months? Thank you.

Steve Altemus: Yes, we’re clearly in a strong liquidity position, cash position for the next year at least. We’re going to look opportunistically at adding capital to the balance sheet should we have the opportunity to do that. We have these major contract awards in NSNS and potentially LTV that we might want to take some capital on to work project financing. But right now we’re in a secure position at least through the end of next year.

Andres Sheppard: Wonderful. Thank you so much again for taking our questions. Congratulations on the quarter and looking forward to the next mission in Q1. Thank you so much. I’ll pass it on.

Steve Altemus: Thanks, Andre.

Operator: Thank you. And our next question comes from Josh Sullivan with Benchmark Company. Your line is open.

Josh Sullivan: Good morning.

Steve Altemus: Morning. Josh.

Josh Sullivan: In your remarks you mentioned how the commercial model and Intuitive’s capabilities can keep the goal of lunar development squarely in sight. What’s the tempo of that conversation right now, just given the broader kind of questions around resources necessary for Artemis?

Steve Altemus: Well, I think, the shift is if you look at the way the Artemis program is currently laid out, with trying to get humans to the surface. And that was the urgency. I think that we’ve learned, at least from our first mission that flying a regular cadence of missions is packed with opportunities to learn and develop and engineer the systems that are needed for a long-term stay on the surface. And so a regular cadence of missions to engineer the systems that are going to be required to support the astronauts is as crucial as the astronauts actually arriving. And so if we — my theory is to redistribute the activities in the Artemis program to make sure that the infrastructure arrives and is delivered that will support sustained human presence.

And that’s really the infrastructure first comment I made in my remarks and so that’s what we’ll be talking about, with this idea of flying to the moon, flying to the South Pole, drilling on the South Pole. All of those kinds of things are things that we’re doing as a first. And I think we need to get good at that and build the reliable systems. And that’s done by doing it over and over and over again. And so I think there’s an opportunity to keep the Moon squarely in the sights of the United States by this regular cadence of missions. And when the complex systems that are required for humans to be on the Moon are ready and safe, we’ll be prepared for those. And that’s kind of the comment I’m trying to pull on.

Josh Sullivan: Got it. Thank you for that. And then just on the — you mentioned the assumption of the Lunar Reconnaissance and Shadowcam. What does the financial commitment side of that look like for Intuitive? And then, do you gain any proprietary data from taking those over?

Steve Altemus: Well, that’s really open source data for the public, for scientists, for NASA to use as they need to. And so it’s open for folks. NASA pays the contract, that’s about $9 million for managing that. But what’s critical is that gives us a capability and an infrastructure we can build on here on Earth for data warehousing the big database that can be searched, the tools to search those petabytes of data that are collected around the Moon, and to provide some advanced analytics, machine learning and AI kind of analytics that will give us greater insight into what resources are up there on the Moon. When we do think about putting our own surveyor up around the moon, we’ll now have the infrastructure in place on Earth and that repository to host that data.

Josh Sullivan: Great. Thank you for the time.

Steve Altemus: Great, Josh.

Operator: Thank you. Our next question comes from Suji DeSilva with Roth Capital. Your line is open.

Suji DeSilva: Hi, good morning. Congrats on the progress here.

Steve Altemus: Hi Suji.

Suji DeSilva: Yes, the NS [ph] contract, Steve, looking ahead to that, what are the first infrastructure deployment steps we should think about happening and what will be the timeframe for those?

Steve Altemus: So the first piece of infrastructure for the NSNS contract will go be deployed on mission three in late 2025, early 2026. That’s when we’re scheduling that satellite. That satellite, once it’s on orbit and it’s checked out, communicating with the surface asset or with the LRO, for example, we’ll be able to start the operational service kind of revenue stream. That’s the first thing to look forward to.

Suji DeSilva: Okay, great. And then similar question for the rover, anticipating kind of success there for you. What would be the first kind of milestones to watch for once the program gets underway? Is that really just the same thing? Preparing equipment for a launch or any milestones prior to that?

Pete McGrath: So if you’re talking about the next phase of LTV. So the first phase completes the design through a preliminary design review level, and that includes not only the rover, but also the landing system. You have to provide a mature landing system solution as part of that effort. And that’s what Steve was referring to earlier about to Nova-D PDR. For the next phase of the contract, we would mature the design initially through a CDR, which NASA could decide to actually do two contracts through CDR. That’s one option they can decide to take and then down select at that time. But the next phase will take it through a CDR and then it will take it through design development and qualification of the rover before you fly it, then flying it to the surface of the moon. And then you need to do a full surface checkout, improve validation of performance on the surface. And then in parallel, NASA will award contracts for operational missions on the surface of the moon.

Suji DeSilva: Okay, thanks.

Steve Altemus: Thanks, Suji.

Operator: Thank you. This concludes our question-and-answer session. I would now like to turn the call back to Intuitive Machines CEO, Steve Altemus for any closing remarks.

Steve Altemus: Well, thanks everyone for dialing in this morning to the call. As you heard, we had an excellent quarter. And please look forward to and join us on our next mission in the coming months to the Moon, South Pole. Thank you very much.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.