Firefly Aerospace Stock

Greetings. Welcome to the Firefly Aerospace Second Quarter 2026 Financial Results Conference call. [Operator Instructions] Please note, this conference call is being recorded. I would now like to turn the conference over to Michael Sheetz, Firefly's Director of Investor Relations.

Michael, you may begin.

Thank you, Carmen. Hello there. I'm Michael Sheetz and welcome to Firefly's second quarter financial results call. I'm pleased to be joined on the call by CEO Jason Kim and CFO Darren Ma as we report for the period ending June 30, 2026. Today's call will include forward-looking statements, including but not limited to statements the company will make about its future financial and operating performance, growth strategy, and market outlook.

Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause the actual results and trends to differ materially are set forth in our annual and quarterly reports filed with the SEC. Firefly assumes no obligation to update any forward-looking statements which speak only as of their respective dates. Also in this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in the second quarter 2026 earnings release. All financial information referenced in this call will be non-GAAP.

Our earnings press release, SEC filings, and a replay of today's call can be found on our investor relations website at investors.fireflyspace.com. Now, I'll turn the call over to Jason.

Thank you, Michael, and welcome to our second quarter 2026 earnings call. Firefly's first quarter surpassing $100 million comes in just our ninth year as a business, pairing record-breaking revenue with our history-making programs. Halfway through the year, the momentum we started with is building across our entire company, bolstered by multiple flagship companies, contract wins and operational milestones achieved on our revenue generating Blue Ghost, Elytra, Alpha, MLV, FORGE and Golden Dome programs as well as the recent acquisition of SpaceNG.

Our second quarter contract wins drove our backlog to a record total of $1.5 billion, further supporting our long-term growth trajectory. Our strategic investments to increase spacecraft production capacity are timely, given the latest round of NASA Moon base contract awards for both Blue Ghost and Elytra. To showcase our expanded 144,000-square-foot spacecraft campus, my team and I hosted NASA's Moon base lead Carlos Garcia Galan for a tour of landers, transfer vehicles, vertically integrated manufacturing, and our mission operations center.

After seeing our end-to-end capabilities, Carlos shared that our recent Moonfall program award is not only important for space exploration, it is also important for national security, as future missions can collaborate with the Space Force. Our capabilities are inherently dual-use, such as our Ocula Imaging and Mapping Service, so we are very excited to be able to collaborate with the Space Force. We embrace this call to action. We will continue to find ways to synergize between NASA and the Space Force to force and multiply their investments toward a common strategic goal of securing the ultimate high ground.

As demonstrated by our recent track record of landing and surface operations, as well as contract awards, the spacecraft we're building will deliver and support many of the capabilities needed to enable permanent presence on the Moon. Our lunar contracts constitute a revenue generating flywheel with NASA as the base customer and additional bolt-on contracts from a diverse set of commercial and international customers. Additionally, space is a national security priority, as shown by significant year-over-year increases in the U.S. Space Force budget, major conflicts around the world, and evolving missile threats.

Market signals from customers point to orbital launch only getting more supply constrained. Demand for government and commercial constellations and missions outstrips the rocket capacity available, both in the U.S. and globally. Moon base, national security, Golden Dome, and assured access to launch are driving significant industry tailwinds for space. Firefly is addressing those pressing needs with the advancement of our technology, scaling of our product lines, and development and training of our workforce. Space is accelerating, and Firefly is accelerating with it.

For those new to Firefly, and as a reminder for others, we are a space and defense company delivering innovative hardware and software to perform the hardest missions in space for national security, exploration, and commercial technology. Our hardware is represented by our spacecraft, the Blue Ghost lunar landers, and Elytra satellite orbiters, and our launch vehicles, the small-lift Alpha and medium-lift MLV. Our spacecraft solutions platform also includes our software portfolio of AI-enabled operations, which are proven in national security operations, as well as autonomous guidance navigation systems.

The industry tailwinds behind artificial intelligence, data centers, and autonomy are fueling operational realities for our company as we develop crucial, no-fail systems in support of the U.S. and our allies. We have co-located vertically integrated infrastructure within a 25-mile radius near Austin, Texas. This is where we develop and build our own carbon composite structures, in-house patented engine technology, and software autonomy for all of our products. We are obsessively focused on prioritizing safety, quality, and reliability as we scale up our hardware and software product deliveries for our national security space exploration and commercial customers.

Now turning to our business updates. In the second quarter, we completed new milestones across each of our product lines and services, while also engaging with our top customers. As a leading lunar company, we're proud to have won our fifth and sixth Moon mission contracts during the second quarter, and 2 more missions for delivery in 2028. During the second quarter, NASA awarded us with another Commercial Lunar Payload Services contract for an accelerated Blue Ghost lander mission to the Moon. The primary goal of this mission is to demonstrate repeatable access to the lunar surface on an accelerated timeline, executing the mission half the time of our first landing.

This increases our target from 1 annual lunar landing to multiple per year. The NASA contract represents a near-build-to-print lander design to enable faster production cycles and template our successful Blue Ghost into a production line vehicle. For our next lunar mission that is landing on the far side of the Moon, we completed assembly of the Blue Ghost lander's main structural and fluid components. We're now integrating the avionics and payloads as we prepare to stack the lander on top of our Elytra spacecraft.

All of our primary structures have passed acceptance testing for our far side mission, while our flight-proven Spectre engines are undergoing acceptance testing in preparation for integration. All the mission payloads have been delivered as well. We are currently anticipating Riders Through the Dark will launch early next year, pending delivery of our spacecraft to Florida and confirmation of the launch window. Similar to our first mission, we'll have 1-week windows each month to ensure we arrive at the surface for the beginning of lunar day.

Riders Through the Dark will showcase one of the most complex multi-stage missions to the Moon to date. The full spacecraft stack is 22 feet tall, consisting of our lander on top, the European Space Agency Lunar Pathfinder satellite in the middle, and our Elytra spacecraft at the bottom. Elytra will serve as a long-haul communications relay orbiter and host our commercial Ocula Imaging and Mapping Service. We are proud to support both commercial and international payloads. Our far-side mission carries payloads representing the U.S., Australia, Canada, the United Arab Emirates, and the United Kingdom.

Additionally, we acquired SpaceNG, a leader in AI-powered vision navigation and autonomous guidance systems, further adding to Firefly's vertical integration. They bring proven spacecraft software and camera hardware for Blue Ghost and Elytra, bolstering our capabilities to advance the future of autonomous space operations. Firefly is partnering with Benchmark Space Systems on their recent selection for the DARPA LASSO program. We will help the mission operate safely and persistently in very low lunar orbit, utilizing our newly acquired SpaceNG team and their vision navigation hardware and software.

The software from our new acquisition was proven on Blue Ghost Mission 1 when it performed autonomous hazard avoidance and navigation in the last hour to ensure we safely and softly landed on the Moon's surface. Work on Blue Ghost's mission to the Gruithuisen Domes is well underway, as the team completed the critical design review with our customer during the second quarter. This milestone progressed development of the spacecraft as we marched towards this historic mission to the silica-rich volcanic features of the Moon, where humanity has never explored. Rover subcontractor Blue Origin recently passed its critical design review, unlocking the flight build toward delivery to Firefly.

Likewise, on Blue Ghost's South Pole mission, we completed the preliminary design review to verify the vehicle's design before production begins. We continue to expand our spacecraft capabilities both in infrastructure and technologies. During the second quarter, we expanded our Cedar Park campus, adding a new headquarters that is closer to our spacecraft facilities. We are more than quadrupling our spacecraft cleanroom space, thanks to our grant from the Texas Space Commission. And we added our Glow Works Innovation Lab to support accelerated research and development without any disruption to our mature production lines.

We're also looking ahead toward larger lander designs which are maturing. We have submitted our proposal for the $6 billion CLPS 2.0 program and look forward to competing for opportunities to support the increased payload mass and volume needed to build Moon base infrastructure. Moving to Elytra, in the second quarter Firefly won a new flagship role, Moonfall. We're proud to support this high priority mission for NASA's Jet Propulsion Laboratory, under a $75 million subcontract for Elytra to deliver flying JPL drones to the Moon's South Pole in 2028.

We have a robust working relationship with JPL from our Blue Ghost missions and are eager to collaborate further as we dare mighty things together. There is a key national security interest in Elytra as well. Building upon the way we are using Elytra to carry our landers and support Moonfall, the Space Force has come out with a pressing request for information about fast transfer vehicles. These spacecraft could take critical national security small satellite payloads from GTO to GEO on diverse launch vehicles on a recurring basis. Elytra is uniquely suited to service this type of [ rideshare? ] opportunity.

In today's launch constrained reality, transfer vehicles become a relief valve for critical customers who are more schedule sensitive and just need a way to get to their mission unique destination from any available medium to heavy launch vehicle. The Elytra we are building for the Defense Innovation Unit's Project Sine Qua Non is making progress toward launching next year. During the second quarter, we completed the integrated readiness review, which ensures that the spacecraft segment components and subsystems are available and ready to be integrated into the system.

Since the end of the quarter, we also won a new spacecraft subcontract to support NASA's Skyfall mission to Mars. From JPL, this $13 million award will see us manufacture, test, and deliver the mission's aeroshell for launch in late 2028. This is a strategic win for Firefly as it is the first time our [ core tech? ] that goes for the Moon will extend to Mars. This is another statement mission for JPL, as Skyfall is a high visibility program that will deploy a cluster of helicopter drones to the Mars surface. We have many upcoming shots on goal to support consequential Moon base, national security, and space exploration missions with our landers and orbiters.

Our SciTech National Security AI team added multiple wins as well. In the second quarter, we were awarded a U.S. Air Force contract option to deliver the operational data fusion system for the Cloud-Based Command and Control program. This came after a multi-year competition, wherein our data fusion system was evaluated and selected from among high-profile industry and government-owned alternatives. This program is a centerpiece to the Department of Air Force's Advanced Battle Management System. Also in the second quarter, the Air Force Research Laboratory awarded us a contract to support development of the Advanced Algorithm, R&D, and Verification Architecture.

We'll be supporting AFRL by implementing deep learning and advanced AI algorithms on small size, weight, and power processors. This capability supports enhanced target detection, tracking, and custody, and is conducive to future on-orbit processing missions across multiple domains. It's also worth emphasizing again that Firefly was announced as a prime contractor for the Golden Dome program early in the second quarter. As a prime contractor on Golden Dome, we have a decisive seat at the table with the customer to listen to their needs and drive rapid solutions.

It is no surprise to us that our AI capabilities are well positioned due to our battle tested operational FORGE program, processing high volumes of missile warning and tracking satellite data at rapid data rates to help inform our guardians of threats simultaneously to keep our nation and allies safe. In the first half of the year, I spoke to senior Pentagon generals and congressional leaders. There is unanimous support and advocacy for how critical FORGE is to the nation to keep ahead of advanced missile threats. FORGE recently achieved another operational milestone by integrating the GEO Wide Field of View spacecraft into the platform.

FORGE continues to support conflicts around the world and recently received a superior performance rating from the Department of Defense for supporting operations in the Iran conflict. A few weeks ago, Firefly SciTech won a $94 million Space Force contract under the Ground-Based Radar Digitization effort. GBARD program of record is a critical overhaul of legacy missile defense systems. We took the FORGE playbook in missile warning and tracking and applied it to the GBARD competition to secure the strategic win and now we are in execution. Nearly a year since our acquisition, this win represents the synergy of Firefly and SciTech in a 1+1=4 moment as our combined platform helps unlock capability.

Shifting to launch, we are driving forward to launch our first Block II Alpha with Flight 8 now targeting the fourth quarter of the year. We are preparing for acceptance testing of Alpha in the next few weeks, followed by delivery to Vandenberg, static fire, payload integration, and then launch. As with any flight, we'll disclose more specific timing as we get closer to launch. Launch timing is always dependent on variable factors such as customer readiness, regulatory approval, range availability, weather conditions, and other factors that are not within our control.

We also will conduct a thorough review of our post-Flight 8 data to ensure any lessons learned flow into subsequent launches. We are targeting to launch Alpha 2 additional times this year, Flight 8 and 9, for a total of 3 launches in 2026, and Flights 10 and 11 are already flowing through our production line as we build ahead for next year. Our demand remains strong, having sold the majority of Alpha's manifest through 2027. We have visibility into out years as well, in part thanks to the extension of our Lockheed Martin multi-launch agreement. Additionally, we added a second hypersonic task order for Alpha from a confidential customer.

During the second quarter, I visited Sweden's Esrange Space Center and met with our partner, SSC Space. With our support, they have completed critical milestones to get the pad ready, including the payload processing facility, horizontal integration building, ground support equipment buildings, and a launch control center. Final construction of Launch Complex 3C is underway and our first launch from Sweden is targeted for no earlier than 2028. We also recently hosted Space Cotan, our partners from Japan, who are eager to replicate Sweden's blueprint on their side of the Pacific.

At the Farnborough Air Show in the U.K., we met with new and existing customers who are keen to fly on Alpha from our current and future launch sites. These launch site expansions increase our cadence capacity beyond our operational Vandenberg Space Force-based launch pad. As we go global, our increased production rate supports Alpha's underlying growth strategy. We are making progress on rating up Alpha production while keeping safety, quality, and reliability top of mind. We have taken new steps to increase the output production, and between May and August, we significantly increased overall production throughput.

For a few examples, our new Alpha mandrel tooling drove improvements in structure production time, allowing our automated fiber placement machine to decrease run time and enhance quality, while manufacturing multiple vehicle structures simultaneously. We are increasing Reaver chamber throughput via more efficient machine labor and equipment utilization, leading to Reaver engine integration at higher rates. Our Cortex integration facility, which opened in spring, added 55,000 square feet for subsystems production. This has already driven improvements in the pace of making harnessing, batteries, and avionics that are used across our vehicles.

Moving to MLV, we are focused on delivering the vehicle's first stage to our co-developer, Northrop Grumman, progressing through milestones for building and testing MLV. We are maturing MLV toward first flight. Our thunderous Miranda engine designed for reusability crossed 150 hot fire tests to date as the campaign crosses key milestones at pace. A big recent unlock was the flight-like mission duty cycle test that the team completed with the engine firing for 226 seconds, all while completing both power ratio and mixture ratio sweeps.

Our Miranda engine qualification test campaign is imminent as our recent test demonstrated the performance needed to meet the range of stress requirements during a launch. We're building ahead with flight Miranda engine chambers in production. The team also completed a burst pressure qualification campaign of first stage COPVs. And the first flight's forward bay is built and completed testing with our first stage tank test campaign now underway. The engine base structure, which mounts the 7 Miranda engines for each MLV first stage, is in assembly and bonding as we prepare for integration.

And finally, the metal hold-down release adapters in build, which is a key piece of ground infrastructure that we are preparing for proof testing. We invested in a new onsite mezzanine at our Rocket Ranch with workstations that bring engineering and manufacturing teams to the factory floor, which you can see here is co-located with our production line. Firefly is addressing the most pressing demands from our diverse blue chip customer base. Our team is focused on executing, improving our technologies, scaling our capacity to deliver our products, and strengthening our bold and passionate workforce. With that business summary, I'll turn it over to Darren for a review of the second quarter financials.

Thank you, Jason, and good afternoon, everyone. Today marks a defining moment for Firefly. We delivered record revenue, crossing the $100 million threshold for the first time, while simultaneously achieving the highest backlog in the company's history at $1.5 billion. These milestone results demonstrate the accelerating demand for end-to-end space and defense solutions and are a direct reflection of our team's execution. Second quarter revenue of $117.7 million represents 46% sequential growth and an impressive 659% increase year over year.

This acceleration was driven by exceptional performance in our spacecraft solutions business, where for the first time in company history, our team is executing on 5 lunar missions in parallel. We are also experiencing similar momentum in our AI software solutions, with a national security customer requesting acceleration of their hardware order by 1 quarter. Within total revenue, spacecraft accounted for $108.3 million and launch was $9.4 million. For those new to Firefly, let me briefly explain our revenue recognition model, as it's critical to understanding our financial trajectory.

The spacecraft solutions business generally recognizes revenue over time under each contract as we complete contract milestones. This provides a more predictable recurring revenue component alongside the more event-driven launch business. For the launch business, we focus on the number of launches. For example, revenue for Alpha is recognized at a point in time when the launch occurs. For MLV, we currently recognize revenue as a percentage of completion based on program milestones as part of the Northrop Grumman partnership. Once the MLV vehicle is operational, we will recognize revenue when launches occur, in the same manner as Alpha.

We closed the second quarter with a total backlog of approximately $1.5 billion, up from $1.3 billion last quarter. This represents significant growth when you consider that we converted existing backlog into $117.7 million in quarterly revenue. The contract awards this quarter were headlined by 2 additional NASA lunar missions and the Alpha multi-launch agreement extension from Lockheed Martin. Subsequently after Q2, we closed an additional hypersonic task order, won a NASA JPL mission to Mars, and onboarded to the Space Force's GBARD and Nightstar programs.

Second quarter GAAP gross margin was 20.3% compared with 21.6% in the prior quarter. The modest decline was driven primarily by FORGE hardware purchases to support a U.S. government program during heightened geopolitical conflicts as mentioned previously in the revenue section. GAAP operating expenses for the second quarter were $119.1 million, compared with $113.1 million in the first quarter. Non-GAAP operating expenses for the second quarter were $94.3 million, compared with $93.7 million in the first quarter. The slight increase represents our continued R&D investments to support Alpha Block II production ramp and MLV development.

As a reminder, the primary differences between the GAAP and non-GAAP figures are stock-based compensation expense, one-time transaction-related expenses, and the amortization of intangibles. GAAP operating loss was $95.2 million, compared with the loss of $95.7 million in last quarter. Non-GAAP operating loss was $70.4 million compared with the loss of $76.2 million in the first quarter. GAAP net loss in the second quarter was $92.3 million, compared with the GAAP net loss of $96.7 million in the first quarter. Our non-GAAP net loss in the second quarter was $67.7 million. This compares with a non-GAAP net loss of $74 million in the prior quarter.

GAAP basic and diluted net loss per share was $0.57, compared with a GAAP net loss of $0.61 last quarter. Non-GAAP basic and diluted net loss per share for the second quarter was $0.42, compared with a loss of $0.46 last quarter. Net loss per share figures were calculated using a weighted average share count of 161.8 million. We exit the second quarter with a share count of 166.2 million shares, which includes shares from our common stock offering completed in June. For purposes of calculating net loss per share in the third quarter, we expect weighted average share count to be approximately 167.2 million. This number will increase by about 1 million shares per quarter.

Stock-based compensation expense was $17 million in the second quarter compared with $12.5 million in the prior quarter. The increase was related to new stock-based awards that were granted during the period. Adjusted EBITDA in the second quarter was a loss of $61.2 million, compared with a loss of $64.7 million in the first quarter. Our balance sheet remains a position of strength, ending the quarter with total liquidity of $940.3 million. This consists of $635.3 million in cash, cash equivalents, and short-term investments, and $305 million of available capacity from our revolving credit facility, which remains undrawn.

Our cash balance includes approximately $182.6 million in net proceeds from our June's common stock offering. The capital raise positions us with substantial financial flexibility to invest in growth initiatives and accompanied a controlled block sale by insider stockholders. Capital expenditures for the second quarter were $24.8 million, up from $16.3 million sequentially, reflecting investments that enhanced production capacity to drive our growth. This includes tests and upgrades to support Alpha Block II and expansion of spacecraft manufacturing, which positions us to support NASA's accelerated lunar opportunities.

Free cash flow was an outflow of $106.3 million, compared with an outflow of $78.9 million in the first quarter. The increase is primarily due to the final site acquisition related payment of approximately $24 million. We closed the SpaceNG acquisition which brings proven AI vision navigation and autonomous guidance systems critical enabling technology for our Blue Ghost landers and Elytra orbiters. This acquisition adds approximately 15 software engineers and we view this as a strategic transaction that vertically integrates a key capability on a cost-neutral basis.

Regarding our revenue outlook for 2026, we remain confident in our trajectory to achieve significant annual revenue growth this year and reiterate the range of $420 million to $450 million. The second quarter was an inflection point for Firefly. We crossed the $100 million revenue threshold for the first time in company history, while also achieving record backlog of $1.5 billion. With over $940.3 million in total liquidity and clear line of sight to our revenue guidance for 2026, we have both the financial flexibility and operational momentum to continue scaling.

As production ramps and operational efficiency improves, we expect to see corresponding expansion in gross margins and operating leverage. We're building Firefly to be the definitive end-to-end space solutions provider, and the results you're seeing today are proof of that vision becoming reality. We remain intensely focused on discipline execution and delivering long-term shareholder value. Thank you for your continued confidence in Firefly. And with that, I'll turn the call back to Jason.

Thank you, Darren. Our record quarterly revenue is a testament to the focused execution of the Firefly team. And our multiple contract wins show how the significant tailwinds from the efforts like the Moon base, Golden Dome, and Assured Access to Space are turning into realities for our programs. Firefly's strategic investments are paying dividends. SciTech is winning on more programs of record by leveraging our FORGE playbook repeatedly for additional phenomenologies and missions. SpaceNG brings us greater vertical integration for more frequent, repeatable, and reliable spacecraft operations and landings.

Expansion of our spacecraft campus and Rocket Ranch are fueling production efficiency and scaling of Alpha, MLV, Blue Ghost, and Elytra. We are extending our global reach thanks to partners in the international markets such as Sweden and Japan, as the strong launch capacity demand extends beyond just domestically. The Moon opportunity is accelerating and we're eager to apply our Blue Ghost playbook to larger landers for CLPS 2.0 to serve NASA's need for greater mass and volume to the lunar surface. We've talked before about missions to orbit the Moon and beyond. Well, the beyond is here with our first Mars program, leveraging our Moon capabilities and extending it. Space is critical and Firefly is a critical player in space. Thank you for joining today's call. Michael, back to you.

Thank you, Jason. We will be attending multiple investor events in September, and we look forward to seeing many of you next month. Operator, we're ready to take questions.

[Operator Instructions] One moment for our first question. It comes from Sheila Kahyaoglu with Jefferies. Please proceed.

Maybe I could just start off on launch. Two-part question, if that's possible. You put out a press release noting the Lockheed Martin extension for 2 years to 2031 plus the hypersonic task order. I guess how do we think about that, and then you noted Alpha 8 into Q4 from late summer and 10 to 27. So I guess, how is Alpha shaping up just given healthy demand in 27 as well and stability for launch?

Hi, Sheila. Yes, the demand for launch is increasingly getting amplified. This is the most constrained we've seen in launch. And so there is strong demand that we see with Alpha. You know, we saw it at the Space Symposium. We saw it at Farnborough at the U.K., as well as our BD team at SPACETIDE. So there's a lot of strong demand from existing and new customers and that's referencing the Lockheed Martin extension, that's one of our existing customers. So that just reaffirms Lockheed's confidence in our Block II Alpha.

It also reaffirms the 25-Alpha multi-launch service agreement. We continue to collaborate with Lockheed on our next flights. We're even talking about offshore launches with combination with [ Sea Launch? ] and Lockheed Martin and Firefly to do more responsive launches. And then the confidential hypersonic task order 2, that's another confidence builder in Alpha Block II. Because we can launch not only 1 ton to orbit, but 2 tons to suborbital, that makes Alpha very uniquely suited to launch multiple hypersonic missiles at a time. There's a lot of economies of scale with that.

The second task order for the hypersonic missiles really helps burn down that rich backlog of hypersonic testing that is needed. And then we're seeing this with all the international customers we're talking to. We're seeing that strong demand also with commercial customers and we're really excited about the progress we're making in our factory. We're seeing record production from our factory. Carbon composites are providing tanks that are passing first-time quality. And we have Flight 8 that's in this integration and test right now. And we're getting ready for acceptance testing before we ship it to Vandenberg and then do the static fire testing, integrate the payload, and then get ready for launch.

And then Flight 9 is entering the integration and test phase as well because we are so rich with carbon composite tanks, the machine shops is also flowing. We have a record number of Reaver chambers that are getting delivered to our Reaver engine integration and test. Thanks to a lot of the labor and equipment utilization that is more efficient since May through August, we've seen our factory floor ramp up significantly. And then we've got Flight 10 tanks that are completing, Flight 11 tanks are starting to get through their automated fiber placement machine production as well. So the factory is just flowing at record pace. And really, the demand is not the problem. The backlog is not the problem. We're really ramping up production so we can deliver the amount of Alpha rockets to meet the demand.

Can I follow up with, I guess, what, you know, is it just ability to produce or is it the customer on the 3 launches from 4 in 26? And how should we think about 2027? Is it still 12 launches?

You know, I've always mentioned that there's always risk with customer availability and regulatory approvals and range availability, as well as weather. Those are things that we'll still have to address, but are out of our control. So those factors are things that we have to address for our Flight 8 and Flight 9. But the production is just ramped up. We are going to have several Alphas in this year. We're building ahead, as I mentioned, and that's giving us a good position for 2027 and beyond. And I mentioned before that a majority of our manifest for 2027 has already been sold out.

And that's another piece of data points that just shows the launch demand is amplified right now. We're getting a lot of demand for more and more Alpha launches because it is the 1-ton rocket with orbital flight heritage that's active. And another thing that helps us in 2027 is we're going to bring online, in addition to our operational Vandenberg launch pad, we're going to bring online the Wallops launch pad in Virginia as well. And then, as I mentioned before, in 2028, we'll be able to bring on our Swedish Space Corporation Sweden launch pad as well. So we'll have 2 launch pads next year, 3 launch pads in 2028 to help with the launch cadence opportunities.

Our next question comes from Seth Seifman with J.P. Morgan. Please proceed.

Maybe a question for Darren. So Darren, I think in your prepared remarks, you mentioned how spacecraft revenue was $108 million in Q2. And if you kind of look at the growth on a sequential basis, it was around 60%, which is obviously a pretty big number. You know, curious, I know you mentioned among the drivers that there's the 5 lunar missions you guys are working on, strength and AI software. And I think there's also an acceleration of a hardware order. I was curious if there's maybe a way that you could break that down a little bit more between those 3 pieces, just to give us a sense of what drove that revenue strength.

Yes, hey Alex, good to hear from you. So there's definitely some puts and takes this quarter from a revenue mix and timing perspective, but the trajectory and the destination to $420 to $450 million in annual revenue remains the same. I mentioned the hardware order that impacted the timing in the Q2, so that was an acceleration from a national security customer. And one of the strengths in this business is really the diversified revenue streams from multiple product lines.

But there's really strong demand, as you can see as evidence on the spacecraft side, as the team's working through 5 lunar lander programs in parallel right now, we're seeing similar strength in the AI software solutions, that's really going to offset some of the revenue impact of launch, right? What gives us a lot of confidence heading into the second half of the year is that we have 95% of our revenue booked for 2026 if you take the midpoint of our guidance.

Okay, great. And then, you know, as kind of a quick follow up, you know, Jason, I think you mentioned that you're maturing towards the first MLV flight. But, you know, I might have missed it, but didn't hear an update on maybe updated expectations on when that may be. He's curious if there is any updated expectation there?

Yes Alex, again I can't stress enough that the demand for launch capacity is amplified right now. We've never seen the launch capacity so constrained. So that not only helps the demand for Alpha but also for MLV. And right now we are heads down, you know, getting all the qualification completed for our Miranda engine. Qualification is imminent. We just surpassed our 150th hot fire test. And what was very, very encouraging on this last hot fire was it was flight-like. It was 226 seconds, which surpassed the full mission duty cycle duration of 206 seconds.

And we got really great test results from that. And that unlocks moving forward. We're also building the Miranda flight engines in parallel. So we're making progress there. We've got a number of chambers for the Miranda engines. The forward bay, as I mentioned, has been qualified and tested. Every hardware part of the first stage of MLV is either in build or in test. And we've already qualified our tanks. We'll continue to qualify them. We've got flight tanks also in build as well.

So all that hardware, we're very hardware rich at this time. We're making sure that everything's done with safety, quality, and reliability at the forefront. And the thing about this capability is it's going to unlock a lot of long-term launch capacity in the future. And we're working with Northrop Grumman on delivering the vehicle, the first stage no earlier than next year. And this is a inaugural launch of no earlier than 2027. We did also complete COPVs in addition to the rocket engines, are the hardest part of any rocket development. The COPVs are extremely challenging and difficult for the industry as well.

And we completed COPV burst pressure qualification campaign testing for the first stage. And then the hold-down release adapter, that's where rubber meets the road that holds down the rocket before it launches. That's a key piece of the ground infrastructure, and we're preparing to proof test that. So lots of exceptional progress. Really proud of the team for all the progress that we're making. The factory floor is just really, really hardware rich at this moment.

Our next question comes from Edison Yu with Deutsche Bank. Please proceed.

First question, wanted to follow up on an earlier point. Let's assume the next launch for [ Flight 8 ] goes well. Not asking for guidance for next year, but what kind of cadence are you kind of targeting if the next launch goes well? Can you speak to that at all? Is it like once a month, once a quarter, or like twice a quarter? Like what kind of cadence?

Yes, good to hear from you, Edison. We have so much hardware on the floor. The production is at an all-time high. So that gives us really, really high confidence that we're going to continue to pump out Alphas at rate. As I mentioned, Alpha 8 is in final integration test before we ship it. 9 is entering right behind it in integration and test. 10, all the airframes are completed. 11 airframes are progressing. And so that gives us a head start on getting ready for rate next year.

So that gives you an indication of what we're doing at this point that kind of gives us a lot of optimism for next year. The other thing is, we're not going to talk about guidance for 2027, but I mentioned the hardware production ramp. But the people part of it, our workforce successfully launched Flight 7, that was a lot of muscle memory and repetitions that they got from that, doing the static fire testing and then the launch itself, then doing the post-processing of the data, and they're getting faster and faster at doing that using tools that we have in-house. And so the goal is to launch Flight 8 successfully, get all the post-flight data, process that as soon as possible, let that flow into Flight 9 launch campaign, and continue that momentum into 2027 and beyond.

A separate topic, I want to ask you about the Moon, I want to ask you about CLPS. Can you give us a sense of what you're expecting for the rest of the year in terms of NASA awarding out task orders? Are we done with CLPS 1.0 and waiting for 2.0? Do we expect more from 1.0, do we expect to win over, and you're just kind of a flavor we should expect some stuff used to fit in and potentially went on some stuff before year end.

Yes, we're never done with CLPS 1.0. There's 3 more opportunities in the second half this year. We already won, as we mentioned before, the [ CS3? ] opportunity and we're on contract and away we go because it's a near build-to-print of our successful Blue Ghost Mission 1 and it also went further vertically integrated with acquiring SpaceNG. So that is moving along. The opportunities ahead of us are 2 lander missions under CLPS 1.0 and then 1 orbiter imaging service under CLPS 1.0 as well. So there are multiple shots and opportunities that go for the rest of the year.

And because we invested in the CapEx to have quadrupled the clean room space, put in the most optimized streamline assembly line that we could into that clean room as well as expanded our spacecraft campus with vertically integrated components like avionics and harnessing in-house engines as well. That gives us a really good position and extra capacity to take on more. So we see the [ CS3? ] win in second quarter as just the beginning.

It did put us in a category of we won not only that, but also the JPL Moonfall mission. That was 2 of the Moon missions this year. It expanded our number of Moon missions in 2028 to 3. So that's a positive trend going from 1 mission a year to multiple missions a year. But that capacity in our hiring and staffing up is a good combination to go after more of these CLPS 1.0 missions. And then CLPS 2.0 is also happening.

We did put a bid in for that, and we had designs that we were working on for that, and we hope to hear from NASA in the coming months. But we're really excited about taking our success from the Blue Ghost Mission 1 and subsequent missions and applying it and extending it to a larger lander to take even more mass, even more volume to the Moon so that we can be part of the infrastructure builds of the Moon base.

Our next question comes from the line of Michael Leshock with KeyBanc Capital Markets. Please proceed.

On the guidance piece, what are the biggest swing factors that could cause revenue to shake out, you know, either at the high end or the low end of the guidance range? And then given the unchanged range for the year, I think you were previously expecting 4 total Alpha launches in 26, and now you're expecting 3. So that would imply that you were able to reiterate guidance without the maybe, you know, $15 or $20 million of revenue from that additional Alpha launch, assuming the ASP is a bit higher than these next ones for Flight 10. So, ex-Alpha guidance would have increased. Is that the right way to think about it? And then, yes, just maybe the swing factors for that range.

Hey, Michael, good to hear from you. Yes, I think I touched on this a little bit earlier. When you look at where we are from a guidance perspective, we reiterated $420 to $450. And, you know, some of the moving parts there, as I mentioned before, the trajectory of our growing revenue and the destination, which is between the $420 to $450, where we're going to be. We're going to land there. We have really strong confidence because the team's been executing. You can see the momentum in Q2, but also heading into the second half of the year, as I mentioned, 95% of that revenue was already booked. So it's just up to us in terms of execution.

Where things that swing on the high end or low end, I mean Jason touched on a little bit earlier, if we wind up winning one of these additional CLPS missions in the end of the year, it could push us towards the higher end of the range. And our business is really well diversified. There's multiple product lines that can generate revenue and continue to generate revenue. You see that, you know, we're working on the FORGE program for AI software solutions, the 5 lunar missions, Golden Dome, SBI, and you know, we're really excited about some of the most recent wins in terms of GBARD and Skyfall that allows us to kind of offset some of the impact of Alpha launch.

Okay, great. And then on SciTech, maybe you could talk about what you saw there in the quarter and how revenue might be impacted from geopolitical tensions when there's a lot more activity. Do customers pay more? Is it a function of, you know, higher demand during more activity? Any color on, you know, the contract structure there and what was seen, you know, during the war?

I think you're seeing strong demand on that side of the house, and you can see that we had a hardware order that got accelerated in Q2 and requested by our national security customer. In terms of the geopolitical tensions, that's really been an area where you know there's really a strong demand in that product line. Um, maybe I'll let Jason comment on some of the...

...geopolitical part of it. And Michael, the conflicts have not gotten any better. We see a lot of the Iran conflict earlier in the year and that continues, it's the most missile conflict that we've seen in the history. You know, in the first 30 days, if you remember, FORGE earlier this year processed over thousands of threat messages. That was just in the first few weeks. And so the problem is continuing. And it's not just in one region, it's global as well.

And so missile threats are getting more advanced. And because of those reasons, we need more AI capability, more battle space awareness, more technical intelligence, more tactical missile warning, missile tracking, and strategic missile warning and tracking. So those are all things that FORGE is, the purpose of FORGE is to provide that kind of AI software support to the guardians and force multiply each one of them so that we can keep our nation safe and our allies safe. We only see more acceleration of those type of capabilities because of this threat emerging.

One moment for our next question. It comes from Kristine Liwag with Morgan Stanley. Please proceed.

You've clearly seen strong order of momentum across your portfolio. I was wondering as you convert these new awards into revenue, can you help us understand the profitability and cash milestones associated with that backlog, especially for some of these capabilities where you've already proven the technology, how do these margins and cash flow typically evolve as these new orders convert into revenue?

Yes, Kristine, good to hear from you. I mean, Q2 is a great example, right? When you look at the $117 million in terms of revenue, we converted pretty much all of that was from backlog conversion. And we're in a contract, a lot of our contracts primarily on the spacecraft side are milestone driven. So we're getting cash and that allows us to, you know, we're build out our teams and buy long lead items to support the programs for our customers as we progress through each one. So we're able to really just, and on top of that, after we close some of these contracts, let's take the Blue Ghost orders from NASA, for example, these lunar missions really have bolt-on opportunities as Jason talked about that allows us to expand gross margins, whether they're from commercial payloads or from imaging services like Ocula, which I would expect to be much higher gross margins. And then from a gross margin perspective, as we unlock Alpha, as cadence increases, I would expect the corresponding increase in gross margin there. That's really the big unlock for us.

Great, super helpful and I guess you know you kind of partially answered my follow-up question. I guess key level set us in terms of how do we think about the path to positive EBITDA as a whole for the company and free cash flow break even? I guess specifically is there some sort of level of revenue as you convert some of those specific milestones that you get to where either it's a mix, scale, fixed cost absorption, or more profitable contracts leveling through where you can actually get to that profitability and positive free cash?

Yes, really so much of our business is driven by these operational milestones. So, you know, our operational milestones really drive our financials. So things I look at as everyone else is looking at is getting Alpha to rate in cadence, right? MLV development, finishing up MLV development. That takes a lot off the R&D line. And, you know, we're excited about the ramp of our spacecraft business. It's progressing really well. There's a really high demand there for that business, whether it's our Blue Ghost lander, Elytra vehicle, or on the AI software solutions side, right? And that positions us really well for profitability in the future.

Our next question comes from Colin Canfield with Cantor Fitzgerald. Please proceed.

Maybe following up on the supply-demand environment, if we could talk a little bit about MLV. How much of the national security customer are talking about essentially kind of like releasing some of the requirements on NSSL on-ramp? And how do you kind of think about MLV's prospects of getting early on-ramps to NSSL?

Yes, hey Colin. Nice to hear from you. You know, we're just heads down right now on our MLV program. We are going through qualification of Miranda and testing, getting the test data to inform our flight builds as well. And same thing with the tanks, the LOX, and getting to a point where we can deliver the first stage to our co-developer, Northrop Grumman. Northrop Grumman leads the government facing work like NSSL. And so we're confident that our co-developed MLV rocket, it's American-made. It meets the standards and needs of the U.S. Space Force.

And it's an ideal solution to deploy a broad range of payloads with such critical payloads that the Space Force demands. And so we're just working towards our first launch, showing the capability, because at the end of the day, what matters the most is delivering the payload to the mission orbit that we sign up for, and that's what we're focused on. But as I said before, the demand for launch capacity is the most constrained we've seen it. There's strong, strong demand both on the National Security Space Launch program side as well as commercial and international, so as long as we continue to just focus on our first launch and get that data and then continue on. That's where we're focusing.

Got it, got it. And then maybe on that same kind of topic, if you could discuss the pricing elements of the Launch Services Agreement extension with Lockheed. How do we think about that current list versus current list price and how much of that pricing increase would you kind of attribute to hypersonics mix or other international national security factors, second stage relight on orbit maneuverability and the like.

Hey Colin, good to hear from you. Yes, I mean just overall Alpha pricing we'd expect it. I mean Jason talked about the launch constraint environment. We'd expect our Alpha ASPs to go up over time. I mean in the earlier years now in the next 6 to 12 months we're burning down some of our earlier backlogs. So you'll see some of those lower ASP emissions burn off. I would expect our prices to go up in a long-term strain environment.

One moment for our next question. It comes from Griffin Boss with B. Riley Securities. Please proceed.

First for me, wanted to jump back to the CLPS opportunity. You mentioned that you submitted a proposal for a larger lander variant of the Blue Ghost. Curious if we can hear any more details on that. Are we talking 500 kilogram payload capacity at time? Is there any more color you can bring up?

Hey Griffin, you know the thing I could say right now because we can't release any, you know, proprietary information, but what the NASA Moon base program announced in March as part of their admission program was they wanted 30 landers in the next 3 years, and the first 15 were going to be nominal landers, and that's anywhere between the hundreds of kilograms to the surface of the Moon. But they also wanted additional 12 landers that around the 2 to 4 ton kind of capability, and then another 13 landers for the, you know, the 8 ton kind of down mass.

And so we have a scalable design that's modular that we can take different cargo to support, you know, human presence in the future. You're going to need power. You're going to need navigation and guidance communications cargo to sustain life, you know, rovers, light terrain vehicles, all of the above. And so we have a design that takes a lot of the common components that we successfully landed on the Moon already with, but scales in terms of size, volume and mass, so we can take those Moon base infrastructure cargo reliably.

Super helpful. Thanks, Jason. And then just one more, if I could. I was hoping we could touch back on tactically responsive space and specifically where your work with True Anomaly stands. I believe, or at least it was our understanding that Firefly was originally supposed to launch that VICTUS HAZE mission. But of course, as we saw Rocket Lab handle that launch stuff. Curious if you could just give an update there specifically with your work with True Anomaly.

Yes, we are very bullish on tactically responsive space. If you look at the Space Force budget, it could double from, you know, 2026 to 2027 numbers. And with that, the tactically responsive space line could quadruple. That's how important and critical this is, doing demonstration missions. In the future, we'll do operational missions because this capability is really to meet the needs of urgent and priority missions for the Space Force. It's also to deter U.S. adversaries in space. And so we're delighted that there's multiple providers capability in addition to us.

We were the first to do it within a 24-hour timeline, but there's going to be more and more. And that's something we've always envisioned along with the Space Force. But the Space Force, at their direction of the Space Safari, moved our future Tactical Responsive Space Mission that will utilize now our upgraded Alpha Block II launch vehicle to launch True Anomaly's Jackal in the future. And this new mission will build on the lessons learned of VICTUS NOX. And we also did VICTUS DIEM earlier this year. Now, the lessons learned from the successful VICTUS HAZE and others that we'll foresee in the future to shape the next generation of tactical responsive space missions.

Okay, so if I'm still on here, I just want to clarify, then, what you said. So does that mean you're – so there's no change in your responsive space pipeline, just that mission had it – so it went to Rocket Lab, but maybe you have another mission lined up in the future then? That mission is not lost? It's just saved for a later date. Is that the right way to think about it?

That's the right way to think about it, saved for a later date per the Space Force direction.

Our next question comes from [ David Tross ] with Wells Fargo. Please proceed.

Going back to the CLPS missions, so with all the awards you have now and like more awards to come, how should we think about this accelerated Blue Ghost cadence's impact on Blue Ghost margins? Is there a certain rate that we really see like an inflection of margins there?

Yes, I'll take that one. So, I mean, obviously with more Blue Ghost and spacecraft missions, that kind of spreads out that fixed manufacturer overhead we have in the business. So we'd expect that our gross margins to continue to expand. On top of that, you're looking at, in addition to the base contract that we've won from NASA, there's opportunity for commercial providers to for additional payloads from commercial providers. And then I talked about the Ocula Imaging Service as well. So those can provide gross margin expansion opportunities.

Got it, thanks. And then switching over to SciTech, how should we think about the contract mix going forward? I think you talked about trying to do more fixed price there.

Yes, I think the way to look at it is our mix of spacecraft and launch for the rest of this year, you're probably looking at somewhere in 85% spacecraft or remainder launch. That's how I view it.

Yes, and I would add that, you know, the whole acquisition of SciTech has been very successful. One of the things that we look at is not only strategy and culture and financials, but also synergies. And our larger Firefly platform has been able to successfully unlock a lot of the synergies of 1+1=4 kind of moments. And you saw that with the Golden Dome award announcement in second quarter and also most recently the GBARD program. That's a $94 million phase 1, early phase program to look at the legacy radars that do missile warning, missile tracking and space domain awareness, and then modernize that.

Well, we're taking the FORGE playbook that's so successful and already battle tested and getting superior ratings from all the generals in the Pentagon, we're taking that and we're extending it, lifting and shifting it to other adjacent missions of phenomenologies like radar and you could look at upside opportunities like air moving target indication and ground moving target indication and more. There's a lot of upside opportunities with what used to be the Space Development Agency on top, you know, in terms of the tracking layer tranches and the ground processing there. And then there's more Golden Dome outside opportunities as well. So, FORGE has become a really large part of what we're going to do in the future with.

One moment for our last question. It comes from the line of Suji Desilva with Roth Capital.

On the backlog number, Darren, $1.5 billion, any color there, how much of that is launch versus spacecraft, and maybe also how much it's covering the next 12 months to understand near-term versus longer-term backlog?

Hey, Suji, good to hear from you. You know, we haven't really broken that out, but when you look at it from a conversion perspective, this quarter, $117.7 million, pretty much all of that was backlog conversions. So when you look at that and kind of look at extrapolate where our $1.5 billion lands like you know you can you kind of see how far that stretches out. It's not exactly apples to apples because you have things like you know the Lockheed Martin multi-launch agreement mixed in there that extends through 2031 so it's not a straightforward answer but you can give a rough ballpark by taking extrapolating Q2.

Okay, got it. It's a very high conversion. Great. And then, um, question is on Elytra. Can you update us on the demand backlog there in pipeline and maybe how much Elytra is contributing to revenue in the second half of this year or next year? Just to understand how that's coming into the revenue mix.

Yes, hey, Suji. I'd like to unpack that in two parts. Maybe I'll start with the first part, which is the demand. You already see that we have an Elytra contract with the Defense Innovation Unit. You know, that's clearly supporting, you know, space domain awareness and rendezvous proximity operations. And it's very, very in line with the White House agenda, executive order for space supremacy, where they're looking to advance capabilities for Department of Defense, as well as involve commercial technology. We're doing all those things with our Sine Qua Non mission. So that's progressing towards a launch no earlier than next year.

In addition to that, each Blue Ghost 2, 3, 4 will have an Elytra transfer vehicle that will transfer the lander to their destination on the Moon's surface, but also serve as a long-haul communications relay and also host our commercially available Ocula Imaging and Mapping Service. So those Elytras are progressing, as you know, on Blue Ghost Mission 2. We're stacking our Elytras, so that's the progress we're making there. And then Moonfall, we were put on contract by Jet Propulsion Laboratory for this flagship Moon base program. It's moving really, really quickly because we have several Elytras in production. We're able to leverage the designs and the manufacturing and the supply chain for that vehicle. And that gives us confidence of meeting that very stringent schedule.

But everything you need to do to go successfully burn several times to get to the Moon, to deploy those JPL drones is similar stuff that the Space Force needs to deploy high-value national security kind of constellations from GTO to GEO. We responded to a request for information recently and we're progressing along with sharing information on our Elytra transfer vehicle to serve that fast transfer vehicle mission. So that's a new category that we want to continue working with the Space Force on.

Yes, I'd also add, I mean, singling out the Elytra missions by itself, while we're very excited about these contracts that Jason talked about, including Moonfall, which would go to $75 million going through 2028, really doesn't do that product justice because when you look at it, Blue Ghost Mission 2 has an Elytra orbiter on there. So that contract in itself is a part of Elytra and that allows us to really just leverage every R&D dollar on there and be really efficient about how we produce these vehicles.

And as I see no further questions in the queue, I will conclude the Q&A session and pass it back to Michael Sheetz for final comments.

Thank you all for attending today's call. We look forward to speaking with you all again when we report our third quarter results. Have a good one. Thank you.

This concludes our conference. Thank you for participating, and you may now disconnect.

Greetings. Welcome to the Firefly Aerospace First Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please note, this conference call is being recorded.

I will now turn the conference over to Michael Sheetz, Firefly's Director of Investor Relations. Michae, you may begin.

Thank you, operator. Hello there, and may the fourth be with you. I'm Michael Sheetz, and welcome to Firefly's First Quarter Financial Results Call. I'm pleased to be joined on the call by CEO, Jason Kim; and CFO, Darren Ma, as we report for the period ending March 31, 2026.

Today's call will include forward-looking statements, including, but not limited to, statements the company will make about its future financial and operating performance, growth strategy and market outlook. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause the actual results and trends to differ materially are set forth in our annual and quarterly reports filed with the SEC. Firefly assumes no obligation to update any forward-looking statements, which speak only as of their respective dates.

Also, in this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in the first quarter 2026 earnings release. Unless otherwise stated, financial information referenced in this call will be non-GAAP. Our earnings press release, SEC filings and a replay of today's call can be found on our Investor Relations website at investors.fireflyspace.com.

Now I'll turn the call over to Jason.

Thank you, Michael, and welcome to our first quarter 2026 earnings call. Firefly opened the year with strong execution and increasing momentum driven by major government programs that align directly with our core capabilities. We delivered record quarterly revenue of $81 million. The acceleration of the Artemis program, combined with NASA's Moon base initiative calls for monthly robotic lunar landings and reinforces the demand signals we've been building toward.

Our early investments to scale Blue Ghost production and our milestone as the first commercial company to land on the Moon successfully position us to be a critical commercial partner as NASA expands lunar operations. With 3 additional missions ahead, we're already executing towards the goal. We also advanced our Ocula lunar imaging service through a new partnership with NVIDIA, enabling on-orbit processing for faster, more actionable data in cislunar space.

On the national security front, Firefly's subsidiary, SciTec, secured an agreement with the U.S. Space Force to support the Space-Based Interceptor program under Golden Dome. We are concurrently delivering and proving the value of our AI-enabled data processing through the U.S. Space Force's operational FORGE Missile Defense system.

Within launch, the capacity-constrained market is driving increased demand for Alpha following its successful return to flight. We also completed the VICTUS DIEM responsive launch demonstration and made steady progress on our reusable Eclipse rocket in the first quarter. The pace of change in the space economy is accelerating, and Firefly is scaling up our existing revenue-generating capabilities to meet the demand across every line of business.

For those new to Firefly, we are a space and defense company delivering innovative hardware and software to perform the hardest missions in space for national security, exploration and commercial technology. Our hardware is represented by 4 revenue-generating products, our Blue Ghost lunar landers, electro satellite orbiters, small lift Alpha rockets and medium-lift Eclipse rockets.

Firefly's software portfolio falls under SciTec's AI-enabled defense systems, which are proven in national security operations. The industry tailwinds behind artificial intelligence and data centers are fueling operational realities for our company as we deliver crucial no-fill systems in support of the U.S. and our allies.

We are meeting the U.S. government's call for commercial investment, speed and scale in defense and exploration. Our advanced technology products and funding of infrastructure include upgrades and expansion of Firefly's co-located spacecraft and rocket factories, clean rooms and test stands as well as our data centers and classified facilities.

Now turning to our business updates. In the first quarter, we completed new milestones across each of our product lines and services. The lunar opportunity is here. Recent milestones, including the NASA Moon Base event, Artemis II successful lunar orbit and our Blue Ghost Moon landing and service operations ignited the industry and the world. The Moon is now a permanent destination.

NASA's Moon base plan represents a dramatic acceleration of the Artemis program with a detailed pathway to a regular cadence of missions to the surface and persistent support from satellites and lunar orbit. Our prior growth strategy was to extend from Moon landing a year to multiple a year, and now we have an amplified demand signal from NASA.

The agency's objective is to provide monthly robotic landings on the Moon surface starting next year as well as larger lander missions to support the required lunar infrastructure for a permanent presence. The first 2 phases of the NASA Moon base architecture taking place over the next 7 years represents a $20 billion program with multiple shots on goal opportunities for Firefly. When you combine Blue Ghost, the only commercial lander to operate successfully with our electric spacecraft, we provide the ideal system to deliver and support many of the payloads and capabilities needed such as navigation, orbital communications, surface observation, power infrastructure, exploration drones, rovers, cargo and support systems for humans on the Moon.

The Moon is a vastly untapped resource, and Firefly is the tip of the spear in the routine deliveries and services that NASA needs to support a permanent presence on the Moon. Last week, we heard NASA administrator Isaacman's request in a congressional hearing to template Blue Ghost and launch with frequency. As stated earlier, we are already building towards this.

In the first quarter, we made significant progress on our new cleanroom, which is 4x the size of our existing cleanroom. This enables a production line of lunar landers for frequent missions. We are leveraging our vertical integration to scale up while also investing in our Blue Ghost supply chain. We are working closely with each major supplier to ensure they are ramping up with us through long-term agreements and strategic inventory in place to ensure quality, schedule and quantities of delivery.

Meanwhile, assembly of our Blue Ghost lander and Elytra orbiter is well underway for Blue Ghost Mission 2, and we're on track to complete assembly and payload integration this summer. We named Blue Ghost Mission 2 riders to the dark as our team charges toward another historic milestone, conducting the first American landing on the Moon's far side, carrying both NASA and commercial payloads.

We are making progress on our additional lander contracts with the Blue Ghost Mission 3 preliminary design review complete, which verifies the vehicles designed to deliver payloads to the Moon's Gruithuisen Domes. The team is now preparing to complete the critical design review for Mission 3 while also getting ready to complete the preliminary design review for Blue Ghost Mission 4 to the Moon's South pole.

Moving to Elytra. We're pleased to add NVIDIA as another Firefly partner with our first collaboration included as part of our Ocula lunar imaging service. NVIDIA's Jetson module was embedded in the high-resolution Lawrence Livermore National Laboratory telescopes and delivered to Firefly spacecraft facility for integration on our Elytra orbital vehicle. This Elytra will first serve as a transfer vehicle and communications relay for Blue Ghost and then began our Ocula service to support advanced lunar service mapping, mineral detection and reconnaissance for 5 years in lunar orbit. Our Ocula data will be rapidly processed onboard Elytra and autonomously transmitted back to Earth utilizing the NVIDIA Jetson module, combined with Firefly's SciTec-enabled AI software. This allows Firefly to mitigate downlink constraints from the Moon by processing data on orbit before it is transmitted to Earth as real-time actionable insights for government and commercial customers.

Firefly's AI software will further enable advanced space domain awareness. Our AI algorithms and data fusion technologies are already proven in critical national security missions in Earth orbit. Our software will enable Elytra to leverage multiple data feeds on board to more accurately track objects and provide timely situational awareness of space operations occurring in the cislunar domain. These capabilities are transferable to Elytra's upcoming space domain awareness mission for the Defense Innovation Unit Sinequone project. This mission also incorporates high-resolution Lawrence Livermore National Laboratory telescopes, just like the ones enabling our Ocula service. After completing the critical design review for the mission, the team has begun building and testing ELECTRO flight hardware.

Additionally, in the first quarter, Firefly completed critical Elytra test milestones for Blue Ghost Mission 2, including separation testing to demonstrate Elytra's mechanisms that will deploy the European Space Agency's Lunar Pathfinder satellite following separation from our Blue Ghost lander. This further highlights Elytra's ability to operate and deploy critical high mass payloads across cislunar space.

The team also completed the initial interoperability testing to ensure our Elytra orbiter communicates with Blue Ghost on the Moon's far side and access a backup communications relay for NASA's LuSEE-Night payload. This enables NASA's radio telescope to operate for up to 2 years on the surface even without direct line of sight to earth. This relay service on Elytra is the pathway to our commercial offering, delivering alternative communications options that reduce blackout periods and strengthen connectivity for multiple future lunar missions for Firefly and our customers.

As we saw at the recent Space Symposium event, there is growing demand for Elytra's robust capabilities, combined with our AI-powered software to support dynamic space operations for national security, space exploration and international missions. The demand includes space maneuverability to novel orbits, de-orbit services for multiple spacecraft and long-haul communications.

At the symposium, U.S. Space Force Major General Purdy further emphasized the need for enhanced national security capabilities in cislunar space, including transportation, communications and navigation systems beyond earth orbit. Once deployed, those assets require protection and continuous monitoring, which is best done from the Moon as the ultimate high ground. Our Elytra vehicles are well-positioned to enable these missions with high-thrust precision Spectre engines, ample fuel and payload capacity and AI software.

As General Saltzman said in his April 30 congressional testimony, speed, scale and clear demand signals are critical and Elytra positions us to capture that with a responsive on-orbit capability. We'll continue to scale up our Elytra production line as demand steadily increases.

Moving to our SciTec software offerings under our spacecraft business. We are pleased to be selected by the U.S. Space Force to support the Space-Based Interceptor program under Golden Dome. In a Space Force press release just a week ago, this program was announced to develop a space-based missile defense interceptor system that will demonstrate capability integrated into the Golden Dome architecture by 2028. Space Force awarded a select group of companies, including Firefly's subsidiary, SciTec, with contracts totaling up to $3.2 billion. This critical program will enable next-generation space-based tracking and advanced interceptors integrated with artificial intelligence to counter the speed, maneuverability and lethality of threats.

As the prime contractor, we continue to execute on the operational U.S. Space Force FORGE system, providing a modernized AI-enabled missile warning and tracking architecture. We're rapidly processing vast amounts of data from satellites across all orbits from LEO to MEO to GEO to deliver high-quality mission-critical information to our war fighters to defend against threats.

After the Space Force operationally accepted our FORGE system last year, in the first quarter, we were awarded a $109 million engineering change proposal to accelerate and expand data center delivery. This critical system processed thousands of threats in the first 30 days of the Iran conflict to help protect our war fighters.

The team further completed the interim ground readiness review for the Space Development Agency as part of our role in delivering the mission management and data fusion ground components for the proliferated warfighter Space Architecture Satellite Constellation Tranche 1 tracking layer.

More recently, the Air Force Research Laboratory awarded us a contract to support development of the advanced algorithm R&D and verification architecture by implementing deep learning and advanced AI algorithms on small size, weight and power processors. This capability supports enhanced target detection, tracking and custody and is conducive to future on-orbit processing missions.

Last week, we also heard Chairman of the Joint Chiefs of Staff, General Caine, underscore in a congressional hearing the urgent need for critical investments in space-based command and control, artificial intelligence and advanced surveillance and reconnaissance. This capability counters modern multi-domain threats where operations are coordinated and synchronized across air, land, sea, space and cyber domains. Our proven AI software and on-orbit processing capabilities are well positioned to support these multi-domain operations.

Shifting to launch. In March, Alpha Flight 7 successfully returned to flight and completed all mission objectives after deploying a Lockheed Martin demonstrator payload and validating key Block II subsystems. Additionally, in the first quarter, Firefly supported Lockheed Martin on the U.S. Space Force's VICTUS DIEM mission, performing 2 responsive space exercises to practice and advance emergency launch protocols required in a real threat scenario. VICTUS DIEM marks the second tactically responsive space effort that Firefly completed to date after our record-setting VICTUS NOX mission, which launched with a 24-hour notice.

The first VICTUS DIEM exercise included a rapid payload processing demonstration where spacecraft arrival operations, checkouts, mating and encapsulation were completed in under 12 hours. The second exercise included a 36-hour rapid launch simulation to practice and advance emergency launch protocols required to execute tactically responsive space missions in a real threat scenario.

We are now focused on delivering our first Block II vehicle, which will debut on Flight 8 that's targeted to launch late this summer. Block II is designed to expand Alpha's deployable launch capabilities for critical responsive space missions such as hypersonic testing, national security missions and commercial satellite launches for domestic and international customers.

Firefly completed qualification testing for the first and second stage tanks for Flight 8 and moved into the integration and test phase as we progress towards launch. The significant improvements across Alpha from Block II focus around enhancing reliability and production rate as part of our company culture of safety, quality and reliability. And we're working ahead. We have structures and engines in build for Flights 9, 10 and beyond, rolling off our automated fiber placement machine and into assembly as we continue to target 3 more Alpha launches in 2026.

For our 2027 manifest and beyond, we talked to both new and repeat customers at Space Symposium this year and see strong interest in Alpha on the heels of our successful Flight 7 launch. As we look to the future, we are pleased to see the recent Swedish defense budget allocating tens of millions to invest in orbital launch infrastructure. Our international partners want to bring Alpha to market in Sweden as well as other allied countries to meet the growing demand for satellite launch capabilities around the globe. This approach allows us to not only increase our launch cadence, but also open new markets, add resiliency to our launch sites and provide a national security advantage.

Firefly also recently signed an agreement with Seagate Space to collaborate on the development of an offshore launch platform that enables responsive sea-based Alpha launches. Together, we will work to mature the design of an integrated offshore launch system capable of supporting the unique requirements of liquid fueled orbital rockets. These capabilities are in alignment with the Space Force's demands for flexible infrastructure to accommodate responsive small launches and eliminate single points of failure.

In the Space Port of the Future report, they've called for flexible manifesting, rapid integration and launch to orbit time lines of 24 hours or less for designated payloads, which we've proven on VICTUS NOX. Everything we learned from building testing and launching our Alpha rockets allows us to improve and reduce risk for Eclipse. Our reusable medium-lift vehicle is marching towards a debut while the need for more launch capacity from more providers is growing. All the major flight articles for our first Eclipse vehicles are in build and test, including our Miranda flight engines.

In the first quarter, we completed qualification of the Eclipse interstage, a critical primary structure that connects the first stage to the second stage as well as the liquid oxygen transfer line in the composite overwrap pressure vessels. More recently, we are progressing through the test campaign on Eclipse's first stage tanks, which tower nearly 100 feet tall. This risk reduction testing allows us to push the tanks beyond their limits to verify flight margins.

With that business summary, I'll turn it over to Darren for a review of the first quarter financials.

Thank you, Jason, and good afternoon, everyone. We delivered record Q1 revenue driven by strong business fundamentals. As Jason highlighted, we have multiple growth drivers in place, which gives us confidence in achieving our long-term objectives.

In today's call, I'm going to review the financial results of first quarter 2026 before handing the call back to Jason for closing remarks. For listeners new to Firefly, I wanted to reemphasize that key operational metrics drive our financial performance. In our spacecraft solutions business, we generally recognize revenue over time under each contract as we complete milestones. This adds a more predictable recurring revenue component alongside the more event-driven launch business.

For the launch business, we focus on the number of launches. For example, revenue for our operational Alpha vehicle is recognized at a point in time when the launch occurs.

For Eclipse, while in development, we recognize revenue as a percentage of completion based on program milestones as part of the Northrop Grumman partnership. Once the Eclipse vehicle is operational, we will recognize revenue in the same manner as Alpha when launches occur.

Now turning to our first quarter results. We delivered the highest quarter of revenue in the Company's history at $80.9 million. This compares with $57.7 million in the fourth quarter and $55.9 million in the same quarter a year ago. The sequential revenue growth was driven by the ramp of the FORGE and Golden Dome Space-Based Interceptor programs, a full quarter of SciTec and the successful Alpha launch.

Within our total revenue, spacecraft solutions accounted for $67.6 million and launch was $13.3 million. We ended the first quarter with a total backlog of approximately $1.3 billion, relatively flat from last quarter, reflecting the conversion of backlog to revenue and timing of new awards.

As Jason mentioned earlier, we are excited about the industry tailwinds, including NASA opportunities for Blue Ghost, customer demand for Alpha, additional missions for Elytra and increasing demand for our AI software solutions. Our position in the market and these sector catalysts provide Firefly with confidence in our long-term revenue growth trajectory.

First quarter GAAP gross margin was 21.6% compared with 27.7% in the prior quarter. The change was primarily due to a higher mix of cost-plus program contracts driving revenue. GAAP operating expenses for the first quarter were $113.1 million compared with $101.6 million in the fourth quarter. The increase was primarily from the inclusion of SciTec's operating expenses for the full quarter and our continued R&D investments.

For operating expenses, the primary differences between GAAP and non-GAAP measures are stock-based compensation expense, onetime transaction-related expenses and the amortization of intangibles.

Non-GAAP operating expenses for the first quarter were $93.7 million compared with $80.5 million in the fourth quarter. The sequential increase was driven by our continued R&D investments to support Alpha Block II production ramp and Eclipse development.

GAAP operating loss was $95.7 million compared with a loss of $85.6 million in the fourth quarter. Non-GAAP operating loss was $76.2 million compared with a loss of $64.5 million in the fourth quarter.

GAAP net loss in the first quarter was $96.7 million compared with a loss of $41.1 million in the fourth quarter. As a reminder, we recognized a onetime $37.1 million tax benefit related to the SciTec acquisition and a onetime $8.4 million gain on settlement of contingent liabilities in Q4. Our non-GAAP net loss in the first quarter was $74 million. This compares with a net loss of $58.5 million in the prior quarter.

GAAP basic and diluted net loss per share was $0.61 compared with a loss of $0.26 last quarter. Non-GAAP basic and diluted net loss per share for the first quarter was $0.46 compared with a loss of $0.38 last quarter.

We exited Q1 with a share count of 160.1 million shares. We expect our total share count to increase by about 1 million shares per quarter.

Stock-based compensation expense was $12.5 million in the first quarter compared to $12.6 million in the prior quarter.

Adjusted EBITDA in the first quarter was a loss of $64.7 million compared with a loss of $57.3 million in the fourth quarter.

Turning to our balance sheet. We ended the quarter with a total liquidity of $811.6 million, consisting of $551.6 million in cash, cash equivalents and short-term investments and $260 million of available capacity from our revolving credit facility. After the close of the quarter, we upsized the capacity of our credit facility to $305 million, which remains undrawn.

Capital expenditures in the first quarter were $16.3 million compared with $12.1 million in the fourth quarter. The sequential increase was driven by test and upgrades to support Alpha Block II production and spacecraft manufacturing expansion that positions us to support NASA's accelerated lunar opportunities.

Free cash flow was an outflow of $78.9 million compared with an outflow of $79.3 million in the fourth quarter. As a reminder, in the second quarter, we will have the final SciTec acquisition-related payment of approximately $24 million reflected in our cash flow.

Now turning to our revenue outlook for 2026. With continued strength across our business, we remain confident in our trajectory to achieve significant annual revenue growth this year and are reiterating our outlook of $420 million to $450 million, consistent with what we gave on the March call. Thank you for your interest in Firefly.

With that, I'll turn the call back to Jason for his closing remarks.

Thank you, Darren. The first quarter proved what we have been building toward. Firefly is not just participating in the space economy, we are shaping it. This is a defining moment in our industry from our Moon landing to missile defense systems, from responsive launch to AI-powered space domain awareness, we're delivering the integrated capabilities that define the future of space exploration and defense operations.

NASA is accelerating. The space force is investing. Our allies are mobilizing. Firefly stands ready. With mission-proven hardware and production, battle tested software and operation and our team of Firefly is innovating and executing at pace.

We stand at the threshold of a new era where what was once impossible becomes inevitable. Firefly has the end-to-end ecosystem to make it happen. Thank you for joining today's call.

Michael, back to you.

Thank you, Jason. Operator, we're ready to take questions.

[Operator Instructions] It comes from the line of Sheila Kahyaoglu with Jefferies.

On this morning, you guys announced SciTec won a key position among 12 total companies on Space Force's Space-Based Interceptor program. Can you maybe elaborate on that one a little bit more, your positioning there and how SciTec accelerates the growth profile of Firefly?

Thanks, Sheila. I'll go back to what we've said before on previous earnings calls is that Firefly has multiple shots on goal for Golden Dome. And we've referenced that a lot of the capabilities that SciTec has in battle-tested AI development on the FORGE program, which went operational last September, it's seen a lot in real operations, particularly in Iran. And so a lot of the battle-tested algorithms are very transferable to other programs like Golden Dome. And if you remember what General Guetlein has said before, one of the hardest parts of such an architecture of this magnitude and complexity is the command and control and the power control and the ground processing. And because SciTec has battle-tested and has exercises AI, no fill missions and real-world operations. All those algorithms are transferable to Golden Dome as well. And then as you know, our Alpha rocket is able to take 1 ton to orbit as well as 2 tons to suborbital. So it makes it really rightsized to launch hypersonic tests, potentially targets for things like space-based interceptor. And so there's multiple shots that we have on goal.

Great. And maybe, Jason, you called out in the slides, you expect a $20 billion opportunity for the initial phases of the Artemis Moon Base program over the next 7 years based on listing missions and large landers. I guess what are you hoping -- and I'm sure you spoke it Space Symposium, what are you hearing from the customer on that? And can you talk about your operational readiness in support of that type of cadence?

Yes. The bold thinking that we heard from NASA administrator, Jared Isaacman recently in the last month since he released the Moon base plans by NASA is the exact type of thinking that we embraced at Firefly. We were already thinking ahead and already building out our cleanrooms and our production line capabilities to support not just one lunar lander a year, but multiple. And this just further validates or amplifies the demand signal. And so when you look at having a permanent presence on the Moon, you're going to have to validate a lot of technologies to understand the Moon better, to support human environmental control, life support systems on the Moon, take cargo to the Moon as well as have mobile mobility such as rovers and light terrain vehicles. So all those things are things that we are working on is landers that can be templated into production line landers so that we can address the frequency that's being demanded by NASA to take those types of technologies.

One of the things that we're doing is we've quadrupled our cleanroom space compared to our existing cleanroom. And so that floor space and footprint helps us with the rate. We're also with our new Chief Operating Officer, Ramon Sanchez, that came in fourth quarter of last year. He's brought a lot of best practices and expertise of production flow and labor utilization and equipment utilization. And so that's helping us with ramping up production lines.

We're vertically integrated as well. So one of the things that is important for rating up lunar landers is having the hardware put together, having the components. So we build the avionics, we build the harnesses, carbon composites, structures. But we also are investing in some of our supply chain of our key critical components. And so we're working closely with our supply chain in terms of having their dedicated support as well as strategic inventory and quality, safety, quality and reliability is really important to us. And so that's our focus as well because at the end of the day, it's about increasing the frequency of launch of these lunar landers. It's also building bigger lunar landers that we have designs for. And then the other thing is we want to ensure the probability of mission success, just like we did on Blue Ghost Mission 1.

Our next question comes from the line of Seth Seifman with JPMorgan.

I wanted to follow-up quickly on the space-based interceptor award for SciTec and just understand kind of in terms of how they fit in, how you see the ground station role kind of ramping up? What specifically -- the infrastructure that SciTec has now, is that what would be used to work on and support a space-based interceptor as part of Golden Dome? Is it something that would require the build-out of new infrastructure? I guess if you can kind of help us think about in a little bit more detailed way what that involves and where we saw there were several contracts that went out to different companies to work on it. Are there other competitors who are potentially playing the same role here?

Seth, I think I mentioned in fourth quarter of last year that SciTec -- the acquisition of SciTec was strategic and it truly is. It really bolstered Firefly's entrance into national security. And in particularly, SciTec is the prime contractor on FORGE. And that's a multi-hundred million dollar program of record. It is doing AI today in real-world operations. If you remember what General Guetlein said about Golden Dome, he's looking to defeat or stay ahead of the threats that have speed and maneuverability as well as lethality. And one of the things that counters that is AI and the use of AI. And because SciTec has that capability as well as a rich history of 45 years of algorithms that also have been used to support the Space Force and the Air Force and the Missile Defense Agency, all of those battle-tested operational algorithms are also brought to bear for things like golden dome ground processing. And so with the AI processing, you could speed up the time lines because the threats are very advanced. And in terms of the capabilities that SciTec has, they can mix and match a lot of those algorithms together to apply to this mission.

Okay. Okay. Cool. And then just in terms of the overall contribution that they had in the quarter, is that something that you guys can disclose?

Yes, Seth. We haven't broken it out separately, but FORGE and Golden Dome, Space-based interceptors, the revenue did ramp-up in Q1 this quarter.

Our next question comes from the line of Kristine Liwag with Morgan Stanley.

I wanted to follow-up on your comments about the Alpha after Stairway to Seven success. You called out stronger customer demand, but backlog is relatively flat in the quarter. Does that mean that you anticipate orders that occurred after the quarter closed? And how should we think about that order trends for the year?

Kristine, yes, we're seeing strong interest in Alpha on the heels of the successful Alpha Flight 7 Stairway to Seven mission. We completed all the post-flight data. Everything was nominal. And as you remember, I was in the mission control room with our team. And it was a flawless launch. It was with a Lockheed Martin demonstrator as well, and we were able to insert that into the proper orbit. We even had our relight of the second stage. And a lot of the transition to Block II, a lot of the components and technologies that are going to help us with manufacturability and reliability on Block II were tested on Flight 7 to include the avionics, the in-house avionics, the in-house batteries and some temperature protection systems. So we're very, very happy with those results. Because of that, when we're at Space Symposium, there was a lot of interest with existing customers as well as new customers. And it's just a matter of timing. A lot of our government customers, as you know, they're going through some timing with their funding as well as we had a lot of interactions with new customers as well.

So I'll pass it on to Darren in terms of any additional.

Yes, I think you covered it, Jason. I mean also keep in mind, we burned down the backlog this quarter with a record revenue quarter as well.

Great. Super helpful. And if I could pivot to the Moon opportunities. So with NASA potentially right skipping Artemis and going straight to the Moon, Blue Ghost's capability set is really unique there with your successful landing as the first commercial company to have done so. But I was wondering, as you start seeing other companies really also accelerate their human landing systems capabilities and just much higher volume of potential payload that could reach the Moon. How do you think about where Blue Ghost lives in the construct when you have higher volume available to? Where does it live in that ecosystem? And how do we think about the longer-term opportunity for Blue Ghost? And I think, Jason, you called out that you're also looking at a higher payload lander in the future.

Yes. In terms of our Blue Ghost line, we have designs for larger landers. A lot of the underlying technologies that made us successfully land and perform the 14 days of service operations on Blue Ghost Mission 1 is transferable to our larger lander designs as well. If you go back to the NASA budgets, the CLPS 1.0 program, which is a highly successful program, has increased its budget from $2.6 billion to $4.2 billion. And then if you look at the anticipated CLPS 2.0 program, it's going to be around $6 billion.

And when you look at post 2030 landings, there's at least 3 500 kilogram to lunar surface CLPS missions and then there's 12 3-ton mask to lunar surface as well and then the remaining 15 are around 8 tons of mask to lunar surface. Those are all in our road map. In fact, our larger lunar lander designs are scalable to meet that demand. So it's not just the frequency of launch cadence of these lunar landers that NASA is asking for. It's also the magnitude or the size of these lunar landers that are increasing. And because we have a lot of capabilities that share common vertical integrated components such as carbon composites and engine technology as well as avionics, we build big things at this company. Our Alpha rocket is 100 feet tall and our Eclipse rocket is 200 feet tall. So building a larger lander is right up our alley.

Great. Super helpful. And when do you think you could see these demand signals firm up into contracts?

We're seeing a lot of requests already, Kristine. And so there are things like CX-2. There's things like MoonFall and CS-8 and CLPS 2.0. And so these are -- majority of these are already solicitations that are already out. And so if NASA stays on schedule, performers can get on contract as no earlier than the third quarter of this year for some of these.

Our next question comes from Edison Yu with Deutsche Bank.

This is [ Laura ] on for Edison. So I want to ask about like more broadly, how should we think about the role of AI across your business today? I mean, given your recently announced NVIDIA collaboration, also the R&D contract you awarded, should we be thinking AI is like primarily supporting SciTec software? Or do you also see like it's becoming increasingly important for the spacecraft autonomy, et cetera?

Yes. You're exactly right, Laura, that we see AI as critically important to space. One of the visions that we have is we want to deploy on-orbit processing more and more. And that's what makes this SciTec acquisition so strategic fourth quarter last year is that we were thinking ahead and SciTec's software is operational on the ground today with big data centers to do no-fill space force missions, programs of records. But they also have experience operationally of performing on-orbit processing in space. And so that's one of the things that we envision at Firefly.

We have the whole ecosystem to launch satellites, build the satellites, operate the satellites with processing on board with the SciTec algorithms to perform AI and processing with low latency because a lot of these missions that we're going after, especially in national security, have very, very short time lines to be effective.

Our recent partnership news with NVIDIA around the Moon on our Ocula service to do space domain awareness more quickly using AI and SciTec algorithms is a perfect example of that of taking things that work on the ground or lower earth orbit and then deploying it to the Moon because the Moon is the ultimate high ground. So we see more and more deployment of AI on orbit. And in addition, AI is being used across the company to increase productivity. So we see it not only in the products that we provide, but also in the use of how we do work as well.

[Operator Instructions] It comes from the line of Suji Desilva with ROTH Capital.

Congratulations on the progress here. Following up on the Alpha discussions you've had at Space Symposium and others. I'm wondering, given your strong government defense relationships, should we expect the launches in the future to manifest to remain primarily government? Or do you think we'll diversify into civil or commercial? Obviously, there a lot of strong demand from government, but wondering if there will be an effort on your part to diversify that or that's not -- shouldn't be the expectation?

Suji, demand is not the problem with Alpha. We are steadily increasing rate year-to-year because there's so much demand from national security as well as commercial and in terms of civil as well. But what I would say is that a lot of the benefits of the Alpha rocket of being a 1 ton to orbit capability and a 2-ton to suborbital capability as well as having the responsive launch capability like we demonstrated on VICTUS NOX and recently with VICTUS DIEM, that really is very fit for national security purposes. Because if you think about national security purposes, if there was a conflict, especially in the near-peer conflict, one of the things that would be vulnerable are our launch sites. And so we have a deployable alpha capability that we would like to field. And with that capability, you can get resiliency through having a deployed capability in case any of the U.S. launch capabilities are inoperable.

We are opening up a launch pad in Sweden, and that is the first time that we're going to take Alpha Global. But with our deployable launch system, we can take it to other places. So having the resiliency tied to the 1 ton capability that is rightsized to counter threats that U.S. adversaries might put into lower earth orbit in addition to the 24-hour response time line that we demonstrated on VICTUS NOX, that's a combination that really supports national security very, very well.

Okay. Great. And then my other question is on Elytra. With the first launch of a lunar satellite and with the second Blue Ghost, I mean, can you remind us the revenue model framework for Elytra, whether you can start revenue with that launch? And does the NVIDIA partnership enhance your pricing or revenue opportunity above and beyond what it was before? Just any color there would be helpful.

Yes. Suji, so that Elytra that's on Blue Ghost Mission 2 is recognized as part of the entire contract. So that Blue Ghost Mission 2, we won it for $130 million. We have a number of commercial payloads on there including a Rover from UAE and a couple of other commercial payloads that are add-ons on top of that. And then the Ocula imaging service is another add-on on top of that as well. So that's all being recognized over time as we discussed on the call.

Great. And Darren, does the NVIDIA partnership enhance your ability to capture revenue in Ocula?

That's definitely part of the Ocula imaging service, but I'll let Jason see if he wants to add anything to that.

Yes, Suji, I think the way to look at this is Ocula on Blue Ghost Mission 2, we're going to be able to experiment and try out different modes. And not only are we going to be able to send the raw data from doing lunar mapping and surveying as well as saving space domain awareness data down to the ground to get processed even more. We're going to be able to demonstrate and experiment with AI on our NVIDIA module that's on the Ocula sensor using SciTec algorithms. So there's going to be a lot of new discovery, and those are the kinds of things that the Department of War as well as NASA are looking for more of. So there's more to come there.

Our last question comes from Liam Baker with KeyBanc Capital Markets.

It's Liam on for Mike today. I wanted to ask more broadly about NASA's lunar plans in building a base on the Moon. What do you think would be the most feasible type of power gen to power the grid for lunar operations? And what type of role could Firefly play in powering the lunar grid?

Well, I'll go back to Blue Ghost Mission 1 when we successfully landed. We performed the 14 days of surface operations, which is the longest of any commercial mission on the surface of the Moon. But we also had an engineering chase proposal to look at operating slightly into the lunar night. So using our in-house batteries, we were able to operate 5 hours into the lunar night and still get -- gather data from that.

So one of the things we can do in the future is just add more batteries as we collect solar energy from our solar arrays, and that will allow us to keep heating critical components like avionics and instruments on the lunar lander to last longer into the lunar night. So we can also scale our solar energy as well. So that's something that we've proven with Blue Ghost Mission 1.

But there's other opportunities like radioisotope heater units, RHUs. As you remember from the Mars missions, there's also other type of RTGs that can be used. So you could use nuclear powered plants as well. Those are all things that NASA will want to explore more of because the essential things that you need to have a permanent presence on the Moon are things like power and communications and navigation. And those are all things that Firefly envisions to continue to support NASA with.

And then lastly, on Blue Ghost, I guess given NASA's increased appetite for landers versus 3 months ago, how should we think about steady state gross margins once mission cadence ramps up? And I guess, has there been any changes to your view on Blue Ghost margins?

Yes. We haven't -- the only thing that's really changed there is there's been an acceleration in the program. Previously, we were planning to win -- we'll have multiple shots on goal each year, but now that's really accelerated. Our views on gross margin there haven't really changed. We don't really break out the spacecraft gross margin. I mean spacecraft solutions includes Blue Ghost, includes Elytra, also includes our software solutions business.

And this will conclude our Q&A session. I will pass the call back to Michael for closing comments.

Thank you, everyone, for attending today's call. We look forward to speaking with you again when we report our next quarter's financial results. Thanks all.

And this concludes our conference. Thank you for participating, and you may now disconnect.

Greetings, and welcome to the Firefly Aerospace Fourth Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to Michael Sheetz, FireFly's Director of Investor Relations. Michael, you may begin.

Thank you, operator. Hello there. I'm Michael Sheetz, and welcome to Firefly's Fourth Quarter Financial Results Call. I'm pleased to be joined on the call by CEO, Jason Kim; and CFO, Darren Ma, as we report for the period ending December 31, 2025. Today's call will include forward-looking statements, including, but not limited to, statements the company will make about its future financial and operating performance, growth strategy and market outlook.

Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause the actual results and trends to differ materially are set forth in the annual and quarterly reports filed with the SEC. Firefly assumes no obligation to update any forward-looking statements, which speak only as of their respective dates. Also, in this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in the fourth quarter 2025 earnings release. Unless otherwise stated, financial information referenced in this call will be non-GAAP. Our earnings press release, SEC filings and a replay of today's call can be found on our Investor Relations website at investors.fireflyspace.com. Now I'll turn the call over to Jason.

Thank you, Michael, and welcome to our fourth quarter and year-end 2025 earnings call. We're coming off a transformative year in [indiscernible] history when we more than doubled our annual revenue to a record $160 million. We pulled off the first and only successful commercial moon landing, completed a historic IPO that strengthened our balance sheet for long-term growth. and acquired [indiscernible], further bolstering our national security contributions alongside defense contract wins for our [indiscernible] and Alpha vehicle. We've entered a new era as an end-to-end space services business, executing on all these milestones as we begin just our ninth year as a company.

Firefly is a space and defense company, delivering innovative hardware and software to perform the hardest missions in the space for national security, exploration and commercial technology lighting the way to a bold space ecosystem that expands Humanity's future. Our hardware is represented by 4 revenue-generating products, our smallest Alpha Rocket, medium-lift Eclipse rocket, Blue Ghost lender and [indiscernible] orgin. Now with Cytec onboard, Firefly's capabilities include AI-enabled defense software proven in operations, such as missile warning and defense. The industry tailwinds behind artificial intelligence and data centers or fueling operational realities for Cytec, which is delivering crucial now sales systems in support of national security.

We are meeting with the U.S. government's call for commercial investment and scale in the defense sector. We are further developing our advanced technology products and funding infrastructure upgrades expansion of Firefly spacecraft and rocket factories as well as [indiscernible] and classified facilities. Late last year, we brought on [indiscernible] as Chief Operating Officer to drive our production scaling and operational execution as we enhance safety, quality and reliability across our product lines.

Firefly's product suite is strategically tailored to support the growing opportunities in the space sector. In particular, the renewed interest in the moon as a top priority is an outstanding confirmation of Firefly's market position, verified by the success of Blue Ghost Mission One and accelerated with our contracts for emissions 2, 3 and 4. We applaud an asset administrator Jardine's decision to ramp up [indiscernible] missions. The agency recognizes that Firefly's motor emissions offer a unique opportunity to test and refine technologies and integrate systems that will provide insight for future crude missions.

[indiscernible] recent call for a monthly cadence of linear Landers to the moveout pole starting next year is exactly the type of for thinking that Firefly given the scale of the liner opportunity, last year, Firefly began studying how we can scale our flight-proven technology into larger landed designs. Additionally, we've made progress on expanding our spacecraft cleaning room this year thanks to funding from the Texas Space Commission to build multiple landers simultaneously. I also think the industry for celebration of Blue dose Mission One which is on a steadily growing list of prestigious awards. To highlight a few, BGM 1 was awarded the Robert J. Collier Trophy, the Jackson Aerospace Memorial in times best in benches of 2025. These are not trophies for us to rest on our laurels, but instead recognize the hard work and achievement of our world-class talent and serve as an inspiration for the work ahead of us with increasingly ambitious future new missions.

Together with SciTec, Firefly onboarded to the missile defense agencies scalable home and innovative enterprise layer defense or Shield contract, which has a ceiling of $151 billion over 10 years. As the Department of Work pushes the industry to deliver commercial speed and scale, the Shield contract allows Pentagon entities to rapidly complete orders under a single contract mechanism with an emphasis on leveraging AI and learning capabilities that we're ramping up further.

Shield provides a key support mechanism for Goldman Dome, which we're ready to serve through our comprehensive end-to-end capabilities. As a reminder, there are multiple gold and done elements that we can support such as launching surrogate targets and hypersonic tests with our alpha rocket or integrating data processing from a global network of sensors to perform fire control with SciTec.

Now turning to our business updates. In the fourth quarter, despite the 43-day federal government shutdown, we completed new milestones across each of our revenue-generating products and services. Let's start with launch. On March 11, we successfully launched Alpha's seventh flight to Orbit. This mission was a journey that started last year when I stood up a dedicated reliability team within Firefly, we analyze vulnerabilities improved processes. We added new launch awards reinforce contamination control and implemented additional trainings. When we shift Alpha's first stage, our team was deliberately cautious anything we found was thoroughly investigated after delivering the vehicle to [indiscernible], the Alpha team worked diligently through static fire testing. I was there with the team while we went through 2 days of [indiscernible].

We worked through multiple boards and on the second day, executed a clean 22nd static fire test. The team was calm, cool and collected throughout the process fully committed to methodically executing every step. When we stepped into launch a test, that intense rigor continued, while scrubs can be frustrating, I'm proud of the team for pausing whenever they needed to take a closer look at potential hazards. In come launch date, the team was collaborating and listening to each other, withstanding in the launch control center when Alpha took off. launching right at the first moment of the window. I watched our data flow through during flight with the variance bar of our trajectory toward it showing we were debt center on target all the way up as we smoothly went through every part of launch for payer deployment approximately 45 minutes later. We also did a second stage relight as part of the flight, further verifying off as upper stage performance. We completed all mission objectives, deploying a test demonstration for Lockheed Martin. As anyone in this business would know, our team didn't celebrate stairway to 7 until after deployment. Most of all, that movement was a really satisfying filling a price given the team's accomplishments and execution.

[indiscernible] strengthened our muscle memory, giving us the reps we need to launch cadence. Additionally, we validated key subsystems for Block 2, which will lead to improvements, starting with Slide 8, including greater mass savings, optimized production and increased reliability across the entire out vehicle Block 2 is designed to expand this employable launch capabilities for critical response to space missions, such as hypersonic testing, national security missions, including Golden Done and commercial satellite launches for domestic and international customers.

Speaking of the international market, [indiscernible] is taking a phased approach to launching and operating from other allied countries by utilizing a launch as a franchise model. In this model, FireFly works closely with a strategic international partner to operate our outport rocket from their launch site and meet the growing demand of the satellite market across the globe while adding rail for our nation and allies.

For example, Firefly partnered with the Swedish Space Corporation to launch Alpha from strange Space Center in Korea, Sweden. In collaboration with SSC, we're building on the existing infrastructure in range to develop a launch complex for Alpha and enable oral watch capabilities from mainline Europe. We're evaluating a similar arrangement with [indiscernible] to potentially launch Alpha from the Hyped space port in Japan. These co-launch partnerships become a force multiplier in a win-win win with the U.S. our allies and industry. Back in our rocket factory, we passed acceptance testing of the qualification article for the Alpha Flight second-stage liquid oxygen tank in preparation for the debut of the upgraded Block 2.

Simultaneously, we're progressing on extensive ground equipment upgrades on the alpha stage test and as we prepare to validate Block 2 upgrades ahead of its date. We've worked closely with our domestic and international customers to incorporate data and lessons learned across our previous outplans Block 2 comes with significant improvements across Alpha, including increased length and structural strength, consolidated in-house batteries and avionics and optimized propellent paints. We're thoroughly reviewing the data from Slide 7 as we prepare for the debut of Alpha Block 2 with the launch of lie. We expect to launch another 3 times this year for a total of 4 Alpha launches in 2026.

Moving to Eclipse. Everything we've learned from Alpha is scaled to our reasonable medium-lift vehicle, including the tap off cycle engines and carbon composite structures a key differentiator versus traditional requirements to start a new vehicle development from scratch. These found efficiencies through our automated fiber placement machine, which is versatile in building carbon composite structures at rate across all our rockets and space grows.

The ASP improves quality, cycle times and safety of our structures, a benefit we've seen since debuting the machine in late 2023. All the major flight articles for our first cost [indiscernible] are in build and test with Eclipse's Miranda engine having crossed more than 100 hot bar tests and the team now preparing to enter our qualification campaign. In anticipation, we've begun assembling multiple [indiscernible] flight engines.

Additionally, we completed qualification on the Eclipse interstage, a critical primary structure of milestone as we assemble the first flight vehicle. We also completed qualification testing of the liquid oxygen transfer line for the first stage of the clips, putting the assembly through a rigorous campaign on our test and as we prepare to integrate the line with the vehicles. This line feed walks through our propellent tank to our brand engines and very flight, the LTL feeds locks to the engines at a rate that would fill 300 back tons per minute. We are progressing through assembly and integration for the Eclipse program. with the targeted shift the first stage to [indiscernible], our vehicle coated over later this year with the full variation of Eclipse utilizing both our first stage and the second stage built by Firefly we are targeting first launch no earlier than 2027.

In less than a decade, Firefly has valuable oral flight heritage that scales to our medium listed vehicle, which is a testament to our team of experts who have the lessons learned and passion to execute on these bold missions. Shifting to spacecraft, which includes SciTec. We're simultaneously building multiple landers and orbiters as well as advancing our AI data center systems, supporting the future operationally resilient ground evolution program, also known as Forge.

Starting with SciTec. In September 2025, the United States Space Force operationally accepted SciTec Sports modernized AI-enabled space exploitation architecture, delivering a transformational lead and capabilities across miss warning and tracking missile defense, battle space awareness and technical intelligence. As a reminder, Forge is an advanced and operational defense program for the United States that serves as the brains of our nation's multi-orbit missile warning and tracking architecture. SciTec rapidly processes vast amounts of data and satellites across all orbits, [indiscernible] to deliver high-quality mission-critical formation to our war fighter to defend against missile threats.

In the first days of the [indiscernible] conflict, the Space Force's 11th Space Warning [indiscernible] used force to provide real-time data in forming defensive operations against over 1,000 threat events. As a veteran I think Americas service members as well as those of our allies or defending our nation. Firefly teams are providing continuous support to the limit-based Warning Squadrons critical 24/7 mission as part of the defensive systems involved in this operation. We are rapidly integrating unique operational lessons into new ports generations during what is the most extensive missile engagement in history.

Forge is ensuring the single most capable tool for missile warning, tracking and events in the world remains ahead of the threat. In the fourth quarter, our team won an 8-figure contract from a confidential U.S. customer to deliver time-dominant space control software with potential for significant upside contract expansion. Additionally, in the fourth quarter, SciTec completed the interim ground readiness review with the Space Development Agency for SciTec's role delivering the mission management and data fusion ground components for the proliferated war fighter space architecture, satellite constellation, Tranche 1 tracer.

The SciTec team was also awarded a $109 million engineering change proposal under the Space Force's Forge enterprise OPIR services contract to accelerate and expand data center delivery, which increased the total contract value from $263 million to $372 million. Sintech's leading work on multiple elements of forges exemplary as the team reached operational acceptance of Forge for threat missile warning in September, marking the first time in 50 years that the U.S. government change the prime contractor for missile warning ground systems.

Furthermore, SciTec's on order processing heritage, data center capabilities an AI-enabled applications positions Firefly with the differentiated software aware that is hosted on the physical layer neither for space, data centers. Moving to Blue Ghost. We completed structural qualification testing on the fully stacked [indiscernible] Mission 2 lander and [indiscernible] Jet Propulsion Laboratory during the fourth quarter. We also completed the Palen integration Radius review for BGM 2, accepting delivery of [indiscernible] and commercial payloads, including the UAE Mohammed Bin Rashid Space centers whose [indiscernible].

We have critical Blue Ghost Mission 2 hardware coming together, progressing through structural integration of the lander and the electric transfer repo. We're marching onwards towards launching our next [indiscernible] with windows opening no earlier than late in the fourth quarter and into the first quarter of next year.

Similar to our first mission, will have 1-week windows each month to ensure we arrive at the service for the beginning of Lunar Day for the first U.S. planning on the far side of the mine. Blue Ghost Mission 2 is progressing as well with the team in the fourth quarter completing the preliminary design review, which verifies the vehicle is designed to deliver payloads to the men's group izen bones. We also completed the system requirements review for Blue Ghost Mission 4, establishing readiness across the vehicle subsystems and ordered long lead items for the mission to the new South Pole. Similar to how Alpha scales Eclipse, our Blue Ghost technologies are transferable to larger vehicle designs that can further support the U.S. government's goal of a permanent motor presence as well as exploration of other planetary bodies. Switching to Elytra, we recently completed separation testing on the electric system that will act as a transfer vehicle supporting Blue Ghost Mission 1 an important milestone as we move toward flight hardware assembly. For reference, this electro is win to win or orbit with Blue Ghost before separating in orbit. It will relay data via long-haul communications from the far side of the mine.

It also hosts our ocular commercial imagery and mapping service, which will provide high-resolution imagery and videos as well as multi-spectral phenomenology data to our customers. Oculus shows how we can responsibly add on payloads and services to our landers and orders since we have flexibility in our modular design, processes and teams. Additionally, in the fourth quarter, we completed the critical design review for the Defense Innovation unit's [ Sinequone ] project progressing development of the spacecraft in preparation for the DI use space domain awareness demonstration mission. The team also completed a NASA study contract regarding a planetary defense mission called Trinity.

This potential mission would utilize an electro dark space graph for near earth object reconnaissance, highly leveraging nonrecurring engine for [indiscernible] designs. With that business summary, I'll turn it over to Darren for a review of the fourth quarter financials.

Thank you, Jason, and good afternoon, everyone. 2025 was a defining year in Firefly's 9-year history. We completed a historic IPO, achieved record annual revenue of $159.9 million, increasing 163% year-over-year. and successfully closed the strategic SciTec acquisition, our largest acquisition to date. These transformative steps strengthen our company for long-term success, reflecting the dedication and vision of our team.

In today's call, I'm going to review our fourth quarter and full year 2025 financial results as well as provide our annual revenue outlook for 2026. I want to reemphasize that operational metrics drive Firefly's financial performance. Key operational metrics include the number of launches and execution on program milestones across both our spacecraft solutions and launch businesses.

Specifically, in our [indiscernible] solutions business, which now includes SciTec, we generally recognize revenue as a percentage of completion under each contract. For the watch business, we focus on the number of launches. Revenue for our operational alpha vehicle is recognized at a point in time when the launch occurs. For Eclipse, while in development, we recognize revenue as a percentage of completion based on program milestones as part of the Northrop Grumman partnership.

Once the Eclipse vehicle is operational, we will recognize revenue in the same matter as outlook when launches occur. Now turning to our fourth quarter results, which include SciTec in the last 2 months of the year. This was the highest quarterly revenue in the company's history at $57.7 million. This compares with $30.8 million in the third quarter and $9 million in the same quarter a year ago. Within our total revenue, Spacecraft Solutions revenue was $50 million and lost revenue was $7.7 million. The sequential increase was primarily driven by completion of multiple milestones across the spacecraft business.

We ended the fourth quarter with a total backlog of approximately $1.4 billion. This increased from $1.3 billion at the end of the third quarter and up 22% from $1.1 billion year-over-year. Backlog is one of the key metrics we monitor and is a leading indicator of our future revenue performance. Fourth quarter gross margin was 27.7%, which compares with 27.6% in the prior quarter.

I'd like to take a moment to highlight how the addition of sites government contracts to our space crop business integrates into our financials. On the revenue side, A majority of the contracts are similar to our existing space cat programs, where revenue is recognized on a percentage of completion basis, balancing out the more vet-driven watch business. Direct costs associated with contract execution are recorded in cost of goods sold, while indirect costs are reflected in SG&A.

As a result of this mix, R&D will decrease as a percentage of total operating expenses, while SG&A will increase as a percentage of total operating expenses. GAAP operating expenses for the fourth quarter were $101.6 million compared with $70.7 million in the third quarter and $57.1 million in the same quarter a year ago. The quarter-over-quarter and year-over-year increases resulted primarily from costs related to our SciTec acquisition, the inclusion of SciTec's operating expenses for the final 2 months of 2025 and increased stock-based compensation expense and a full quarter of public company costs.

For operating expenses, the primary differences between GAAP and non-GAAP measures are stock-based compensation expense onetime acquisition-related expenses and the amortization of intangibles related to the SciTec acquisition. Non-GAAP operating expenses for the fourth quarter were $80.5 million, compared with $61.3 million in the third quarter and $55.6 million in the same quarter a year ago. After excluding the differences between GAAP and non-GAAP operating expenses I just mentioned, the quarter-over-quarter and year-over-year increases resulted primarily from the inclusion of SciTec's operating expenses for the final 2 months of 2025, a full quarter of public company costs and increased research and development investments across all programs. This includes R&D investments into [indiscernible] upgrades, eclipse development and Elytra to support our growth objectives.

Operating loss was $85.6 million compared with a loss of $62.2 million in the third quarter and a loss of $77.2 million in the fourth quarter a year ago. Non-GAAP operating loss was $64.5 million compared with a loss of $52.8 million in the third quarter and a loss of $75.8 million in the fourth quarter a year ago. Our GAAP net loss in the fourth quarter was $41.1 million.

In Q4, we recognized a onetime $37.1 million tax benefit related to the SciTec acquisition as well as a onetime $8.4 million gain on settlement of contingent liabilities. This compares with a loss of $13.4 million in the prior quarter. Our non-GAAP net loss in the fourth quarter was $58.5 million. This compares with a loss of $51.4 million in the prior quarter and $80 million in the same quarter a year ago. GAAP basic and diluted net loss per share was a loss of $0.26 based on a weighted average share count of $155.6 million.

We exited Q4 with a share count of 159.3 million shares. Our total share count will typically increase by about 1 million shares per quarter moving forward. Non-GAAP basic and diluted net loss per share in the fourth quarter was a loss of $0.38 based on a diluted average share count of $155.6 million. Stock-based compensation expense was $12.6 million in the fourth quarter, which reflects our first full quarter as a public company. This compares with $4 million in the prior quarter, which reflected approximately 7 weeks as a public company following our IPO on August 8.

Adjusted EBITDA in the fourth quarter was a loss of $57.3 million compared with a loss of $46.3 million in the third quarter and a loss of $67.7 million in the fourth quarter a year ago. Turning to our balance sheet. We ended the quarter with cash, cash equivalents and short-term investments of $893 million, which included $260 million drawn from our revolving credit facility.

The strong total liquidity position gives us the capacity to prudently fund our growth objectives while maintaining a disciplined approach to capital allocation. As a reminder, in the fourth quarter, we completed our SciTec acquisition. The purchase price included $277.4 million in cash paid net of cash acquired. Capital expenditures in the fourth quarter were $12.1 million compared with $8.9 million in the third quarter and $2.7 million in the fourth quarter of 2024. The sequential increase was driven by planned test and upgrades to support Alpha Block 2 production eclipse development, spacecraft manufacturing and other facilities expansion.

For 2026, we currently expect capital expenditures to increase above 2025 levels as we continue to invest in our infrastructure to support the growing number of opportunities Jason discussed earlier. Free cash flow was a loss of $79.3 million compared with a loss of $62 million in the third quarter and a loss of $42.9 million in the fourth quarter of 2024. The change in free cash flow quarter-over-quarter is primarily driven by payments related to the acquisition and integration of SciTec.

This includes $24.5 million in cash payments related to the SciTec acquisition. As a reminder, in the second quarter, we will have the final SciTec acquisition-related payments of approximately $24 million which will be reflected in our cash flow. For some additional color, we expect our cash usage in the coming quarters to increase slightly from the fourth quarter of 2025 as we continue to invest in the critical parts of our business to support our growth objectives.

Now moving to our outlook for the year ahead. We currently expect full year 2026 revenue will be in the range of $420 million to $450 million. Our outlook is supported by the 4 Alpha launches Jason discussed and from a program milestone perspective, this includes execution on all 3 [indiscernible] missions continued development of our Eclipse and Elytra programs and software development for key government programs.

In summary, the midpoint of our revenue outlook would represent a year-over-year increase of 172%. The I would like to thank everyone for their interest in Firefly. With that, I'll turn the call back to Jason for his closing remarks.

Thank you, Darren. We're kicking off 2026 by building on the momentum that we ended the year. We entered the year with a successful return to flight for Alpha and a robust backlog of $1.4 billion. supported by a very strong balance sheet to drive our growth objectives. We are laser-focused on delivering Alpha Block 2 with multiple launches ahead for our customers. industry tailwinds from the intensified focus on the moon and the opportunity of space-based data centers are verifying Firefly strategy as we prepare to return to the later surface and leverage the operational data center capabilities of SciTec.

We've bolstered our leadership and are driving forward on multiple programs with a company-wide emphasis on safety and quality. We are focused on reliably and repeatedly launching, landing and operating space systems from the earth to the moon and beyond. Thank you for joining the call. I'll turn it back over to Michael.

Thank you, Jason. Operator, we're ready to take questions.

[Operator Instructions] One moment for our first question, comes from the line of Sheila Kahyaoglu, Jefferies.

For 2026 in the prepared remarks, you mentioned 3 additional launches this year, Jacana and including the start-up block too. So can you maybe talk about the cadence from here how we think about those and the milestones ahead?

Sheila, thanks for that question. This is Jason. We had a tremendous success with Alpha Flight 7. We're very proud of the team for what they accomplished on that mission. They're pulling through all the post-flight data. But from my lens, I was in the lodge control center with the team and everything was nominal in terms of the first stage. We launched at the first instance of the window and also the second stage, the payload deployment, the relight of the lighting engine on the second stage as well. So very happy with the results there. But in parallel, we have been in production for our Block 2 [indiscernible] will be light, but we're also building 9 and 10 as well. It's in production in terms of the carbon composite tanks as well as the engines and the avionics. So obviously, we are always working closely with our customer for their customer readiness. We're working closely with the range and FDA for the range of availability. There's -- obviously, I don't have to say too much about the weather and safety factors factors as well. Those are all things that are considered. But we are excited about accelerating the road map for our transition to Block 2. It is a more reliable and manufacturable rocket, still use the same carbon composites, still use the same river and mining engines, but we were able to derisk the in-house avionics and batteries that we flew in especially the avionics that we flew in shadow mode on Flight 7, and so really happy with those results. But we continue to produce. So that's how we're looking at 2026 cadence.

Great. And if I can maybe ask another 1 on SciTec congratulations again on closing that a while ago, can you talk about how you're gaining traction with the SciTec business and how it flows into your revenue guidance for the year?

Yes, I can get started and pass it on to Darren. But SciTec has been a highly strategic acquisition. The way we look at acquisitions is -- we look at the strategy and the fit with our strategy. We look at the culture and the cultural fit as well as the accretive nature of the acquisition and then filing the synergies with SciTec software capabilities. Right from the get-go, SciTec has added a lot of value to especially what we're trying to do in the national security and defense domain. They have a no fail operational program called [indiscernible], which we're very proud of because it's been supporting the recent conflict since it went operational at September, processing over 1,000 missile messages for our national defense. They have been focused on execution on Forge, but they're also working on a variety of other programs like the space development agency, ground processing for the tracking layer tranche. They're also well positioned for things like [indiscernible] because they can leverage a lot of their 40-plus years of algorithms that they developed for missile tracking and missile defense to include the board's program. They have a lot of capabilities, not just in missile [indiscernible], but also multi-domain to include things like air battle management system. And so they've been an incredible add to the team. I'll let Darren talk about the revenue.

Yes, I'd say financially, Sheila, we head into 2026 with that kind of momentum, right, with the SciTec acquisition. I mean, if you took the midpoint of what we guided at the $435 million mark, 80% of that revenue is already booked. So [indiscernible] part of that. And when you think about it, as Jason said, it was a strategic acquisition when you look at how it folds into our financials, you're really looking at the nature of their site government contracts, their expenses are, as I mentioned earlier on the call, are primarily accounted for in cost of goods sold and G&A. Yes, we're very excited about the SciTec acquisition and what it means to us this year.

Our.

Next question comes from the line of Kristine Liwag with Morgan Stanley.

So congrats on the successful launch of [indiscernible] so you can talk about how for launch. You've got some of the testing already finished. Can you give us some sort of indication with the upgrade and how technically derisked like 8, 9 and 10 for the rest of the year in 2026 are? Have you done further testing on any of those elements? And how do we think about the derisking?

Kristine, thank you. This is Jason. Just as much as the hardware and software is the people. And I think last year, when we did our production engineering stand down. We looked at the vulnerabilities across each department. We came up with improvements to our processes and a lot of additional training. From the people side, there's a lot more rigor and collaboration and active listing between the teams. And we really built up a lot of muscle strength in the muscle memory of the team during production as well as operations. And we saw that from the fruits of the steroid to 7 successful flight 7. With that being said, there are a lot of upgrades from Block 1 to Block 2 that were derisked actually on Flight 7. We flew the in-house avionics that actually proved out some functionality, and we're pouring over that data, I was able to see real-time data telemetry from that, and it was nominal. And then in addition to that, batteries as well, we're derisked the native like termination system was also derisked from a routine operations, we always test out each of our carbon composite locks tanks and RP tanks as well as the rebrand in the Lightning engine as part of our normal course of producing and integrating and testing our Alpha rocket. So we're just going through all that, as I mentioned before, we did qualify and pass successfully our second stage locks tank, and we just continue to achieve milestones. So all that is derisking the Block 2 program. I will say that I have high confidence in the designs and the processes that really have enhanced our safety, quality and reliability culture and then especially our people as well.

Great. Super helpful. And if I could ask a second question on SciTec. You called out the forge program. And look, this is the first time in 15 years that the U.S. federal government selected a new plant contractor for missile warning ground system, which seems like a pretty big deal. So can you talk about the importance of this program and also with the operation with RN and the threat environment we see acceleration of what you're providing in 2026 to the government in this program? And also, when we think about the revenue outlook for 2026 what path to occur? What's driving the difference between the on and the high end? What's the variables we should be watching?

Thanks, Kristine. I'll get started and pass it to Darren later. But what I would say, yes, you're absolutely right, Forge is incredibly important consequential program of record. And SciTec is not a stranger to these kind of things. They've been supporting these type of missile defense agency and Space Force and Air Force programs for 40-plus years. And so they have a library of algorithms that you can mix and match that continue to get modernized and advanced. In this case, [indiscernible] does use AI, and it allows you to force multiply each operator in the room. And so the 11th space wing is actually using this operational system today, and it is supporting 24/7, 365 operations for conflicts such as [indiscernible]. So it's really important. I would say that it is the most advanced missile warning missile tracking system out there, processing high rate, high volume of data from all the low earth orbit, medium earth orbit that are coming online and geosynchronous orbit [indiscernible] OPIR satellites -- it's really helping us defend our homeland. So I would say that there's a lot of upside opportunities to continue to add on to the program. As we mentioned, there was a hardware purchase and I'll let Darren talk a little bit more about

Yes. Kristine, this is Darren. So heading into -- I mean, you've seen the Q4 numbers that gives us a great deal of momentum from a revenue perspective going into 2026. I mean, as I mentioned, [indiscernible], out of our midpoint guidance number, 80% of that is already booked. So we feel pretty good about the guidance number. And I mean, as -- and as we ramp up the alpha launches, that will stabilize that number. But from an upside potential perspective, 1 thing that's noteworthy is we do have significant potential upside opportunities, and we're well positioned for that. For example, as Jason discussed on the call, NASA's need to accelerate landers to a monthly cadence starting in 2027. That's not included in our numbers today.

Our next question comes from the line of Suji Desilva with ROTH Capital.

But you talked about NASA wanting to push the cadence of lunar missions. I'm curious on how you think about Firefly's ability to support an accelerated cadence of line missions versus what you currently talked about?

Yes. Thanks, Suji. This is Jason. Yes, we have been investing in CapEx as well as expansion of our clean rooms as well as our in-house avionics and batteries and integration and test facilities here in Cedar Park, Texas. We just had some of the senior NASA top executives [indiscernible] our facilities. And what we showed them was we're doing operations on Blue Ghost submission too. There's a lot of hardware being integrated as we speak, a lot of welding going on for both the lender as well as the electric transfer vehicle. We have all the payloads as well for Blue Ghost Mission 2. But we're also achieving milestones on Blue Ghost submission 3 passing PDR and [indiscernible] with expansion, we've been able to increase our clean room space, thanks to the Texas Space Commission that gave us a grant last year. And so we're completing that this year. And that will allow us to ramp up steadily the number of lunar lander we could build simultaneously. So when we hear the NASA Administrator, [indiscernible] say, "Hey, we want to go to the moon South pole with robotic missions every month starting in 2027. Those are just validation of the investments we've already made. And so a lot of our designs are scalable and modular so that we can continue to take advantage of the streamline of building and integrating these linear lenders at rate. We also are able to get strategic inventory as well to help us with our suppliers. I'll pass it on to Darren.

I think you summarize the well to I mean investment in ramping up production for space crop.

That's good. And then my follow-up maybe is for Darren. Can you talk perhaps about the revenue per Lunar mission trend we should be expecting? Is it fairly steady from IM mission demission or is there a way that it would be ramping up over the next few?

Suji. So our Blue Ghost missions with every Eclipse win that we've had has been ramping up. As you recall, the first Blue Ghost mission was roughly $100 million, and they've been suddenly ramping up to in the $150 million to $200 million range with potential add-ons as well, like, as Jason mentioned, with ocular and data sales with the imaging services that'll be done.

Our next question comes from the line of Michael Leshock with KeyBanc Capital Markets.

I wanted to ask on alpha given the data you got back from Flight 7 and the improvements that you previously made on its [indiscernible] are you expecting the thicker thermal protection to be able to fly at more stressful inclinations on future launches? Or do you foresee any other changes to Alpha's TPS going forward?

Michael, this is Jason. Thanks for that question. Everything that I've seen to date has looked nominal. We'll continue to go through all the data that we received. We actually put additional telemetry on the first stage so that we could get the temperature protection system sensors that we put on as an addition, so we can validate everything that we learned from our prior launches. So we'll be able to share more as we get all that data and crunch all that data. But we're very confident that the minimal additions of thermal protection system on our Stage 1 booster. It gives us the ability to envelope even more types of launch trajectories going forward.

Great. And then on SciTec, are there any additional contracts there that you're competing for that could potentially be step changes to the growth that you're already expecting for SciTec?

Yes. For SciTec, I've already mentioned that they have the program of record for missile warning muscle tracking processing with the U.S. Space Force forge program the Space Development Agency also has them on contract to support tracking tranche 1 ground processing as well. I think that there definitely are other types of competitions out there especially in the multi-domain arena, so things like air battle management system. And in addition to missile warning missile tracking, all the algorithms that SciTec have are transferable to missions like air moving target indication and potentially ground moving target indications. So those are upside opportunities for SciTec. In addition, I already mentioned that SciTec is very well positioned because of their 40-plus years of vessel tracking and missile defense algorithm work that is in operations, such as forage. For things like the [indiscernible] program, which is now we hear $185 billion opportunity. And if you look at that opportunity, the most important thing for that architecture to succeed is the ground processing, integration of sensor data to decision-making, things like fire control. So SciTec's very well positioned for those kinds of missions.

Our next question comes from Colin Canfield with Cantor.

Do you mind talking perhaps about FY '27 National Defense strategy, kind of increased focus on satellite-based architectures and what it implies for both intelligence and orbital intelligence satellite an orbital transfer vehicle demand? Like essentially, how much are you hearing from acquisition officers that they're going to expand beyond kind of like 2 and 3 supplier programs to a broader set of acquisition partners.

Colin, this is Jason. Thanks for that question. We are very, very bullish and committed to the national defense strategy for this year and beyond. We have a contract with the Defense Innovation Unit called [indiscernible]. And in that one, we are developing -- we just passed our CDR. We're developing a round-of-bout proximity operations capability with our satellite [indiscernible] which is able to do dynamic space operations and carry different types of space domain awareness type sensors and other. We see a feature where space will not be [indiscernible]. You will have to have dynamic space operations capabilities to either abate threats or even a threat. And Elytra is well positioned for those kind of missions because it's got a lot of maneuverability and precise in-house engine thrusting based on heritage from our Blue Ghost mission. It also has a lot of ample fuel capacity and we're building a lot of autonomy into the system as well. So it really does support things like [indiscernible] about proximity operations and space domain awareness and adjacent kind of missions. In LEO, support MEO and GEO as well as system liter emissions as well. And then in addition to that, we do see that there will be a lot more demand for missile warning, missile tracking sensors and satellite processors. SciTec has a lot of capability because of forge on how to process large amounts of data and turn it into good track quality. They also have experience doing onboard processing on orbit. And so we are investing in that capability so that we can enable more on-orbit edge processing, so you can further reduce latencies from sensing to the actual war by decision-making.

Got it. And then in terms of the customer conversations that you're having, to what extent is the like additional side tech capability essentially like forcing them or not or forcing them, but giving them increased confidence in pushing Firefly towards doing like hard intelligent satellite work, essentially, if you had to put a rough time line on it, like would 2030 kind of be fair to characterize as Firefly looking a lot like kind of millennium of 5 years ago?

Well, I can't speak to other places that I've led before, but what I could say is that the capabilities that Firefly plus SciTec brings to the table are very advanced. As I've said before, space is hard, but landing on the moon is even harder, and we were the first an only commercial company to do that successfully stable and bright. If you think about it, we roundabout successfully with the moon, and we were able to conduct the 14-day operations with 10 different NASA payloads successfully. And so all those lessons learned, also shared with our electric spacecraft made for a really powerful capability that can perform things like and space domain awareness as well as long-haul resilient communications missions and transfer vehicle missions as well. But the addition of SciTec brings a lot of best practices for software development, existing algorithms to process any type of sensor phenomenology because SciTec does have a sensor phenomenology, subject matter experts with the software developers and they have a lot of secure software development practices that we can transfer between our spacecraft and our SciTec programs. So it does really give us a lot more capability synergies, if you will, to go after these type of no fill critical missions that are -- need to also be affordable and advanced.

Our next question is from Laura Lee with Deutsche Bank.

This is Laura on for Edison. So first question I want to ask, do you have any preliminary thoughts on the space data center opportunities are those technical or economically feasible? Or do you see best potential area of interest for [indiscernible]

Thanks, Laura. This is Jason. I appreciate the question. Long before there was a renewed interest in space-based data centers. Firefly has been envisioning a future processing more and more in space because a lot of advantages of doing that. To name a few, there's a lot of power generation and a lot of thermal radiator capabilities in space not to mention you reduce latency if you are able to sense things and process things on orbit and get it directly to the users efficiently. One of the main reasons our SciTec acquisition was so strategic is because we were putting the pieces together to enable such a system. And so with SciTec's capabilities of working with software applications, on frameworks on terrestrial data centers. They have a lot of knowledge that we can apply to on Orbit data centers as well. If you think about it, on orbit data centers are really the hardware and physical layers and the frameworks. But what do you put on that? Well, we have site who has the software applications that you actually put on the Oracle data centers. So that's what we're going to work closely with our subsidiary, SciTec on. And we'll be able to, for example, connect different orbital constellations together so that we can enable enhanced collection opportunities by having LEO and MEO and GEO satellites collaborating with each other like they have never done before. So there's a lot of upside opportunities with the things we're doing with SciTec and our electric spacecraft.

Our last question comes from Seth Seifman with JPMorgan.

This is Alex on for Seth. Maybe one area we haven't talked quite as much about on this call on Eclipse. I know you guys kind of mentioned some updates on you guys are progressing towards delivering the first states to Northrop later this year, and the first flight is kind of targeted for no earlier than 2027. Just curious if you guys could kind of walk us through some of the milestones we should be looking for there? Over the next several months?

Yes, I get started, I can Darren can add more. This is Jason. We're really excited about Eclipse. Everything that we've learned and we're producing on alpha to include our carbon composite structures in our tap off cycle engine technology is reducing risk for Eclipse. And so we didn't have to start from scratch with developing our engine technology, we're able to scale it in terms of size for our top off cycle engines. And then the carbon composite structures, we've been using the automated fiber placement machine already since 2023 when it was stood up in our Texas factory. So we have a lot of experience building the tanks and structures in domes and max transfer lines using our proven techniques. And then every different element of the Eclipse program is either in development or -- and building or test. So we're really excited about the progress we're making. We have over 100 hope brand engines under our belt. In fact, I was just at Rocket Ranch and experienced 2 in a day. And then on top of that, we are already building the flight engines for the [indiscernible] launch as well of Miranda engines. The first stage thank is making a lot of progress. We did test out the inner stage past qualification there. We also tested our box transfer line that is a significant progress there. So all the testing is happening. We're still targeting, delivering the first stage to our co-developer, [indiscernible] Grumman towards the end of the year. And then for the full variant of Eclipse where Firefly builds the first stage and the second stage, we're anticipating no earlier than 2027 for that first launch.

Thank you and this will conclude our Q&A session. I will pass it back to Michael Sheetz for his closing comments.

Thank you so much, operator. Thank you, everyone, for joining the call, and we'll talk to you next quarter. Bye everyone.

This concludes our conference. Thank you for participating. You may now disconnect.

Welcome to the Firefly Aerospace Third Quarter 2025 Financial Results Conference Call.

[Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Michael Sheetz, Firefly Director of Investor Relations. Michael, you may begin.

Thank you, operator. Hello there. I'm Michael Sheetz, and welcome to Firefly's Third Quarter Financial Results Call. I'm pleased to be joined on the call by CEO, Jason Kim; and CFO, Darren Ma, as we report for the period ending September 30, 2025.

Today's call will include forward-looking statements, including but not limited to, statements the company will make about its future financial and operating performance, growth strategy and market outlook. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause the actual results and trends to differ materially are set forth in the annual and quarterly reports filed with the SEC. Firefly assumes no obligation to update any forward-looking statements, which speak only as of their respective dates.

Also, in this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in the third quarter 2025 filing. Unless otherwise stated, financial information referred in this call will be non-GAAP. Our earnings press release, SEC filings and a replay of today's call can be found on our Investor Relations website at investors.fireflyspace.com.

Now I'll turn the call over to Jason.

Thank you, Michael, and welcome to our third quarter 2025 earnings call. As yesterday was Veterans Day, I want to kick off today's call by thanking our country's service members for their dedication, courage and sacrifices in serving our nation, ensuring we remain the home of the free and the land of the brave. Firefly proudly employs many veterans like myself, and we are honored to continue to serve as we work critical national security missions supporting our war fighters.

Firefly is a space and defense company delivering innovative hardware and software to perform the hardest missions in space for national security, exploration and commercial technology, built to keep America as the leader in space while inspiring the world. Our hardware is represented by 4 revenue-generating products: Our small lift Alpha rocket; medium-lift Eclipse rocket; Blue Ghost lunar lander; and Elytra satellite orbiter. These hardware products have a robust backlog of $1.3 billion at the end of quarter 3.

Our software offerings come through our recent strategic acquisition of SciTec. These capabilities include AI-enabled defense software proven in operations, including missile warning and defense, intelligence surveillance and reconnaissance, space domain awareness, remote sensing and analysis and autonomous command and control to support diverse spacecraft missions. Firefly's product suite is strategically tailored to support the growing opportunities in space. Every day, there are new industry tailwinds for the space sector, artificial intelligence development, data center expansion and an intensifying focus on the strategic and economic benefits of the moon.

In addition, we have seen a major shift on defense funding and priorities supporting Golden Dome with $175 billion planned for the program over 3 years. We are positioned to meet the call from the Secretary of War in his Arsenal Freedom address, where he demanded commercial speed and scale, similar to what we delivered on the U.S. Space Force with the 24-hour turnaround VICTUS NOX launch as well as our landing on the moon earlier this year at a fraction of the time and cost of previous missions.

Before I get into our third quarter business updates, I will provide an update on the status of one of our multiple product lines, Alpha. A few weeks ago, an event during a ground test firing at our facility in Texas led to the loss of the Alpha first stage booster that we were preparing for Flight 7. Following a thorough review, Firefly identified a process error during Stage 1 integration that resulted in a minute hydrocarbon contamination, which then led to a combustion event in one of the engines during the ground test. Proper safety protocols were followed and all personnel were safe. The test stand structure remained fully intact and no other facilities were impacted.

We immediately took action and implemented corrective measures, including a production stand-down day. As this was not a design issue, those corrections included increasing inspection requirements for the fluid systems, optimizing the first stage sensors and incorporating additional automated robots for testing. We also implemented key process improvements following the standdown day, where the production, integration and test teams conducted exercises to review and optimize existing procedures.

As part of Firefly's effort to improve reliability and quality, the team will continue to hold regular exercises for sustained process enhancements. Flight 7 will now utilize the next Alpha first stage booster from our production line, which is currently undergoing final preparations for shipment to our launch site in Vandenberg. Prior to the event, we had already tested the second stage and fairing and delivered them to the launch site.

As part of Firefly's test campaign ahead of each launch, the team will then conduct a static fire test at our launch pad prior to Flight 7 launch. Our Flight 7 launch is targeted between late fourth quarter to early first quarter, depending on range availability. Firefly will have more details to share on the technology demo mission in the coming weeks, and I have full confidence in our vehicle's design as well as our passionate and dedicated Alpha team to return to flight safely. Additionally, we are concurrently upgrading the Alpha stage test stand at our Briggs facility. These previously planned upgrades are expected to be complete in the next few months.

Another key update since the end of the third quarter is that Firefly closed the acquisition of SciTec in line with our strategic growth plan. SciTec is an exceptional company with more than 4 decades of operational excellence, bringing game-changing proven software applications and big data processing elements that bolster Firefly's proven hardware elements. As an analogy, Firefly builds the hardware smartphone, such as our launch vehicles and spacecraft. SciTec develops the software apps such as mission autonomy, targeting and sensor intelligence. Together, we expand from hardware-centric programs into long-term software-enabled revenue.

SciTec has operational defense software applications and big data processing. Their infrastructure is state-of-the-art with classified facilities in support of the Department of War, intelligence community and commercial customers. SciTec is differentiated from other defense software companies through its industry-leading multi-phenomenology expertise that are closely linked with spacecraft and constellations. Together with SciTec, Firefly will be able to provide the Golden Dome program with comprehensive end-to-end capabilities.

There are 3 major elements of Golden Dome that we are pursuing. We can fly and deliver space-based interceptors utilizing our Elytra spacecraft, launch surrogate targets and hypersonic tests with our alpha rocket as well as integrate data processing from a network of sensors to perform fire control with SciTec ground processing. This closes the fire control loop with an integrated network of interceptors, essentially filling the missing link for the air and missile defense shield for the U.S. homeland. Firefly's workforce following the SciTec acquisition stands at over 1,300 strong. SciTec's highly technical employees are made up largely of PhDs and software developers, 90% of whom have security clearances.

Now turning to our business updates. In the third quarter, we completed important program milestones across each of our revenue-generating product lines. Let's start with spacecraft. As the only company to have successfully landed and completed a NASA commercial lunar payload services mission, we were honored to have the agency award us with back-to-back contracts worth $177 million to fly Blue Ghost Mission 4. Targeting a 2029 launch, this mission will see Blue Ghost deliver 5 NASA payloads to the Moon South Pole, supporting our annual lunar flight cadence. On this mission, Blue Ghost will enable NASA to evaluate the moon South Pole resources such as hydrogen and water as well as study the radiation and thermal environment. The Moon South pole is a strategic priority for our nation as we anticipate a high density of resources that supports the growth of the lunar ecosystem.

Another opportunity we are able to provide to our customers was collecting additional data above contractual requirements during our first mission. In September, NASA awarded us a $10 million contract addendum for Blue Ghost Mission 1 for the acquisition of additional LUNAR data collected. This stands as a historic lunar economic milestone as it represents the start of monetizing valuable data of the moon to support more science and exploration, the understanding of the geographic features of the moon surface and to support future human mobility, mining and infrastructure initiatives.

Of note, we continue to pursue additional sales opportunities beyond NASA for our Blue Ghost Mission 1 lunar data. We're in discussions with multiple commercial and international organizations about how the information gathered by Blue Ghost Mission 1 can benefit future missions such as how we successfully landed and maintain operations through extreme temperature ranges on the moon. The Blue Ghost data sale also serves as validation for our Ocula commercial imaging and mapping service model we are debuting with our Blue Ghost Mission 2. Hosted by an electroorbiter, Ocula will continue to provide even higher resolution imagery, videos and multispectral phenomenology data that can support NASA, the commercial lunar industry, international entities and the U.S. Space Force missions on and around the moon.

Blue Ghost Mission 2 targeted to launch next year is well underway. We built and fit-checked the structural qualification models that will support our second mission as well as performed initial systems level qualification testing on site in Texas before delivering to the Jet Propulsion Laboratory in Pasadena, California, where further testing is underway. This pioneering multi-mission effort will land on the far side of the moon, which will be a first for a U.S. lunar lander and then perform the NASA's LuSEE-Night science mission to sense radio frequency signals traveling over millions of years that could help unlock answers about our universe.

In addition, our lander will deploy the Rashid Rover 2 for the United Arab Emirates Mohammed Bin Rashid Space Centre. The full stack will also include an electric transfer vehicle that will deploy the lander as well as a European Space Agency Lunar Pathfinder satellite. We are excited about the nation, Congress and world's growing focus on the moon. We anticipate the next NASA administrator to further reinforce this, leveraging transformative commercial technologies and increasing both the magnitude and frequency of high return on investment programs like that of the Commercial Lunar Payload Services program.

Moving to Elytra, our Mission 1 team conducted simulation testing in preparation for the spacecraft to ship out for launch. This rigorous testing campaign saw our team perform more than 200 hours of rehearsals, simulating dozens of orbits around the earth. Back in our Hive Spacecraft clean room, assembly is underway of our Elytra Mission 2 spacecraft, which will support Blue Ghost Mission 2, as mentioned earlier. And Elytra Mission 3 completed its preliminary design review, maturing the vehicle's high maneuverability design as we prepare for the Defense Innovation Unit's high-priority national security space domain awareness demonstration mission in 2027 and reduced risk for future space domain awareness programs of record.

In addition, our SciTec team can enhance the mission with its over 4 decades of classified data processing and mission operations experience. Additionally, Elytra is increasingly supporting more NASA initiatives. We partnered with Advanced Space to support NASA's LunaNet Communications Relay service. We're developing a mission framework that utilizes our Elytra vehicle as a transfer stage for the Relay network, similar to how we will use Elytra on Blue Ghost missions.

NASA also awarded an Elytra study contract to demonstrate how to meet the need for multi-spacecraft and multi-orbit delivery to difficult-to-reach orbits beyond current launch service offerings, highlighting the multi-mission capability of Elytra. Shifting to the launch side of our business, we signed an IDIQ and task order for a hypersonic test mission on Alpha with a confidential customer. We're proud to have Alpha support these critical national security missions, which further diversifies Alpha customer base, and we look forward to sharing more information when possible.

We also signed an agreement with SPACE COTAN to study launching Alpha from the Hokkaido Spaceport in Japan, in addition to work underway at our coming launch sites in Virginia and Sweden. This potential launch site in Northern Japan offers strategic orbital access advantages, provides resiliency in launch pads and would allow us to tap into the large satellite industry in Asia, while also supporting U.S. allies in the region.

Development of Eclipse, our medium-lift reusable rocket continued to progress in the third quarter. The build of all first flight Miranda engines is underway. The first Vira development engine, which powers the upper stage of Eclipse has completed the majority of design reviews, clearing the way for manufacturing to begin build. We're on track to begin Vira hot fire testing in the first half of next year. And we've begun final assembly of the launch site hold-down release adapter ahead of a fit check with the first flight engine bay.

I am so proud of our Firefly and the SciTecers who now are part of our team. They achieved historical milestones, proven to deliver operational systems and continue to do the boldest missions in space, and we are just getting started. We are focused on executing our strategic growth plan, fostering a culture of safety, quality, reliability and innovation. We are enhancing our products and with our dedicated and passionate Firefly team, we collaborate with our partners in achieving new category-defining missions in space to help protect, connect and explore.

With that business summary, I'll turn it over to Darren for a review of the third quarter financials.

Thank you, Jason, and good afternoon, everyone. In today's call, I'm going to review the SciTec acquisition, which recently closed, discuss our third quarter financial results and provide our revenue outlook for the remainder of 2025. I would like to thank the teams from both Firefly and SciTec for the incredible dedication and laser focus on completing this transaction in just a month after announcing the proposed deal.

As we noted at the time of the transaction announcement on October 5, the purchase price of approximately $855 million included a combination of $300 million in cash and 11.1 million shares of our common stock at $50 per share. Recently, we upsized our revolving credit facility to $260 million from $125 million. For the cash portion, we used $40 million from our cash balances with the remaining amount coming from our recently upsized revolving credit facility. After careful analysis, we concluded increasing our revolver and minimizing cash usage was the most prudent way to maintain our fortress-like balance sheet that we will leverage to drive our growth objectives.

Before reviewing our third quarter performance, I want to reemphasize that operational metrics drive Firefly's financial performance. Key operational metrics include the number of launches and execution on program milestones across both our spacecraft solutions and launch businesses. Specifically, in our spacecraft solutions business, which will include SciTec going forward, we recognize revenue as a percentage of completion under each contract. For the launch business, we focus on the number of launches. Revenue for our operational Alpha vehicle is recognized at a point in time when the launch occurs.

For Eclipse, while in development, we recognize revenue as a percentage of completion based on program milestones as part of the Northrop Grumman partnership. Once the Eclipse vehicle is operational, we will recognize revenue as launches occur.

Now turning to our third quarter results. Revenue was $30.8 million. This compares with $15.5 million in the second quarter and $22.4 million in the same quarter a year ago. Within our total revenue, spacecraft solutions was $21.4 million and launch was $9.4 million. The sequential increase was primarily driven by the Blue Ghost Mission 1 data sale to NASA, progress on Blue Ghost Mission 2 development and the ramp of Elytra Mission 3 for the Defense Innovation Unit. We ended the third quarter with a total backlog of approximately $1.3 billion. This was up from $1.1 billion at the end of the second quarter, driven by the NASA Eclipse contract award Jason referenced earlier.

Backlog is one of the key metrics we monitor and is a leading indicator of our future revenue performance. Third quarter gross margin was 27.6%. This compares with 25.7% in the prior quarter and 34.7% in the same quarter a year ago.

GAAP operating expenses for the third quarter were $70.7 million compared with $58.3 million in the second quarter and $42 million in the same quarter a year ago. The changes were primarily driven by an increase in launch material expenses, costs associated with becoming a public company and onetime expenses, including those related to the IPO and acquisition-related transactions.

For operating expenses, the primary differences between GAAP and non-GAAP are stock-based compensation expense and onetime expenses. Non-GAAP operating expenses for the third quarter were $61.3 million compared with $55.8 million in the second quarter and $39.7 million in the same quarter a year ago. The changes were driven by the same factors as I noted in the GAAP operating expense comments.

GAAP operating loss was $62.2 million compared with a loss of $54.4 million in the second quarter and a loss of $34.2 million in the third quarter a year ago. Non-GAAP operating loss was $52.8 million compared with a loss of $51.8 million in the second quarter and a loss of $31.9 million in the third quarter a year ago. Our GAAP net loss in Q3 was $133.4 million. This compares with a loss of $63.8 million in the prior quarter and $40.8 million in the same quarter a year ago. The sequential difference was due primarily to a change in warrant liability and the payoff of an existing term loan following the IPO.

Our non-GAAP net loss in Q3 was $51.4 million. This compares with a loss of $57.1 million in the prior quarter and $38.2 million in the same quarter a year ago. GAAP basic and diluted net loss per share was a loss of $1.50 based on a weighted average share count of 93.8 million. Non-GAAP basic and diluted net loss per share was a loss of $0.55 based on a weighted average share count of 93.8 million.

For some additional granularity on EPS and share count, as a reminder, our IPO date was August 7. If you took into account a full normalized quarter as a public company, assuming that the IPO and its related transactions, including the repayment of our term loan facility occurred prior to the beginning of the third quarter, the basic and diluted non-GAAP net loss per share would have been a loss of $0.33 based on a weighted average share count of 147.7 million.

Adjusted EBITDA in the third quarter was negative $46.3 million compared with negative $47.9 million in the second quarter and negative $28 million in the third quarter a year ago.

Turning to our balance sheet. As of September 30, our cash and cash equivalents and restricted cash was approximately $996 million. Firefly's fortified balance sheet positions us to scale our market-leading products and fuel strategic growth in the years ahead. Capital expenditures in the third quarter were $8.9 million compared with $9.2 million in the second quarter and $8.2 million in the third quarter of 2024. Free cash flow was negative $62 million compared with negative $37.3 million in the second quarter and negative $44.8 million in the third quarter of 2024. The increase in negative free cash flow is primarily driven by Blue Ghost mission launch prepayments and investments in Eclipse development.

With the government shutdown, we are assessing what lingering impact that the closure will have on our financial results. During the closure, there was a pause of many government programs that resulted in delays with some contract receivable payment dates and customer milestone reviews. As of now, we don't have clarity when the government's normal operations will ramp and payments that were on hold will be made.

Now moving to our outlook. We currently expect full year 2025 revenue will be in the range of $150 million to $158 million, which is an increase from the $133 million to $145 million range we previously provided. And for clarification, with the SciTec close date of October 31 and shares associated with the transaction, we expect our basic and diluted weighted average shares outstanding for Q4 to be between 155 million and 157 million shares.

I would like to thank everyone for their interest in Firefly. I'll now turn the call back to Jason for his closing remarks.

Thank you, Darren. Since the end of the third quarter, Firefly has been pushing forward with additional progress on several items. Recently, we took delivery of Rashid Rover 2, which, as noted earlier, is a payload we're flying on Blue Ghost Mission 2. The UAE MBRSC team has been a pleasure to work with and payload delivery was very smooth as a testament to their team's impeccable knowledge and dedication to space and the moon. We are honored to be supporting MBRSC, further strengthening U.S. relations with the UAE.

Our Blue Ghost Mission 3 team completed the preliminary design review as the mission progresses towards its launch for NASA targeted for 2028. As a reminder, Blue Ghost Mission 3 will utilize Firefly's Blue Ghost lander, an electroorbiter and a Rover from Blue Origin Honeybee to investigate the unique composition of the Gruithuisen Domes, a part of the moon that has never been explored before. Blue Ghost Mission 3 will deploy the Rover and operate 6 NASA-sponsored payloads for more than 14 days on the lunar surface.

And I'd be remiss if I didn't mention that Time named Blue Ghost Mission 1 to its list of the best inventions of 2025, with Firefly Spacecraft Program Director, Ray Allensworth, also named among the world's rising stars on the TIME100 Next list. The planets are aligned with the White House, Pentagon and NASA demanding speed and scale through transformational change, leveraging commercial innovation and investments into technology and production systems.

We're delivering on those demands. We've mapped our return to flight path for Alpha Flight 7, added Alpha contracts via the hypersonic task order and are expanding our plans for multiple resilient launch sites. We are pursuing the $175 billion Golden Dome program on multiple fronts and are clearing operational milestones across our product lines. These are exciting times at Firefly as we execute our strategic growth plans and create new categories in space that support our customers and inspires the world.

That concludes our prepared remarks. I'll turn it back over to Michael.

Thank you, Jason. Operator, we're ready to take questions.

[Operator Instructions] One moment for our first question and it's from Sheila Kahyaoglu with Jefferies.

Maybe just on visibility into Launch 7 timing now. How do you think about how that impacts 2026 alpha launches? Does that put pressure on the rest of the manifest? Or do we think about Launch 8 still a good target timing?

Yes, Sheila, thank you for that question. This is Jason. So we're targeting in between late fourth quarter and beginning of early first quarter for our Flight 7 launch. We'll get a lot of post-flight data from that. But we are still assessing 2026. And our plans are we get a good flight up, get the post data and continue production. As you know, we have a production line going. And so that's how we were able to take the next Stage 1 booster and apply it to our Flight 7. So we're just continuing to make progress on production.

Got it. And then maybe if I could ask on -- I know it's only been a few days since you closed SciTec. So how are you just thinking about the next quarter or going into year-end moving forward on the integration and the road map there and just potential revenue synergies?

Yes. Sheila, the integration with SciTec is going very smoothly. We've done a lot of work with our finance and accounting and our human resources and IT and the list goes on and on, especially in engineering. One of the strategic values of the SciTec acquisition was it bolsters our national security pursuits, particularly the $175 billion Golden Dome program. And in addition, when we look at M&A, we're looking at strategic fit. We're looking at culture fit, financials as well but also synergies. And in the engineering department, there are a lot of synergies with software.

Our hardware is defined by the software that goes into it. And so SciTec best practices and software developers, especially the classified software developers will help bolster our capabilities that we already build today. So there's a lot of synergies there. And in addition, SciTec has a lot of capabilities that they could leverage Firefly as well for their programs, in particular. There's a lot of FORGE work that they're doing, a lot of command and control work that they're doing, a lot of autonomy that they're doing. And there's a lot of synergies with what we're doing with our Elytra spacecraft in terms of space domain awareness, missile warning, missile tracking and autonomy that we could synergize with SciTec.

One moment for our next question that comes from Seth Seifman with JPMorgan.

I wanted to follow up on SciTec. How should we think about the growth rate in that business versus the LTM revenue that you've reported? And then -- well, let's just start with that one and then I have a follow-up as well.

Yes. Seth, this is Darren. We haven't broken out SciTec separately. We've rolled it in and factored into our 2025 number. So I mean, when you look at 2026, that's obviously dependent on a number of factors, a number of alpha launches. We have -- we're making great progress on the Eclipse side while generating revenue on the development. And on the spacecraft side, we've got Blue Ghost Missions 2, 3 and 4 ramping all in parallel as well as Elytra missions.

Okay. And -- okay. And so SciTec, not really much color at this point about how that -- I think it was 160 something in the slides for the LTM revenue.

Yes. We've included -- obviously, I mean, right now, there's some moving parts, but we've included 2 months of that into our 2025 revenue guidance.

Right. Okay. And I guess when we think about just more conceptually about how this fits into the business, SciTec can obviously provide -- you talked about the analogy with the iPhone and the apps and having it go into your hardware. Is the intention for this to be something that's exclusively or very much having the resources dedicated to your hardware? Or to the extent that there's other hardware involved in Golden Dome that you would be pursuing the ability to have SciTec apps or SciTec involved in supporting the hardware that's made by others?

Yes, Seth, this is Jason. Thank you for that question. SciTec will be operated as a Firefly subsidiary, and they'll operate under its current business model. So Jim Lisowski is the CEO of SciTec. He'll report into me directly. We did that for deliberately so that SciTec can continue to provide their best-in-class capabilities for all of their government customers but also their commercial customers. There's a number of prime contractors that they support with both ground processing and software analytics. But in addition, also onboard processing, edge processing as well with the algorithms.

And so we want them to continue that growing business. But where there are synergies is we build our own spacecraft as well, our lunar landers and our electro-orbiters. And so we will be able to leverage their software developers and their best practices and their algorithms to put on board our spacecraft as well in addition to who they already support. In addition, they also do a lot in ground command and control and ground processing. And that's something that today could help some of our programs that we have for national security in that they could provide classified mission operation centers as well as classified processing.

In terms of Golden Dome, what they add to our offering is, as you know, Firefly offers our Alpha responsive launch capability to launch targets as well as hypersonic test vehicles. We also have our Elytra spacecraft that can serve and is well positioned for the maneuverability requirements for a space-based interceptor capability. But SciTec has the ground processing and fire control element that is also required by the Golden Dome program. And that's something that gives us multiple shots of the goal for Golden Dome.

Our next question comes from Edison Yu with Deutsche Bank.

I wanted to ask about the international opportunity. You cited the Alpha partnership in Japan. What kind of volume do you think of launches is maybe up for grabs outside the U.S.?

The short answer is we want to continue building on the relationship with Japan and others in that region. As we build up relationships, we'll give more firm numbers in terms of the total available market. But what I would say is, in the past, I've heard that Japan has $6 billion for applying to space. So that's a very large market. And they are also looking at their own space force that they stood up in the past couple of years. And so we envision that they'll need the same things that the U.S. and other allies will need, things like responsive launch, things like SciTec ground processing and software, also things like constellation launch with Eclipse and furthermore, orbiters such as Elytra.

We're working with not only Japan but the European Space Agency. We've been in discussions with the UAE, as mentioned before, and the MBRSC. So it goes beyond just Alpha launches, it includes all of our product lines. And the success and progress we've had with expansion into other launch sites that gives us more resiliency of launch and more opportunities to have launch cadence launching from more destinations such as Wallops and Sweden, gives us a lot of good experience to support the study with SPACE COTAN.

Understood. And then separate topic, I want to follow up on the SciTec question earlier. Can you disclose any sort of maybe backlog numbers or pipeline numbers around that business? And I know that kind of not trying to give out a growth rate but you would expect this to grow right going forward in the next couple of years?

Yes, absolutely, Edison. So I'll give you a little bit more color there in terms of SciTec. SciTec backlog is roughly $170 million. So that will be additive to the $1.3 billion that we exited Q3 with.

[Operator Instructions] Our next question is from Kristine Liwag with Morgan Stanley.

I just wanted to follow up regarding SciTec on the guidance. You guys highlighted last 12 months, revenue for SciTec is $164 million. So if we kind of look at that on a monthly basis, that implies $14 million of revenue per month, and it looks like you're going to own this thing for about 2 months. So presumably, that's $28 million of potential SciTec revenue in 2025, but you only raised the midpoint of your guidance by $15 million. Can you talk us through what the moving pieces here are of the changes?

Yes, Kristine, so just to give you a little bit more color there. Yes, it includes -- our guide includes the 2 months of SciTec. Not all the SciTec revenue is all linear. So that's one part of it. There's obviously some moving pieces there. We've also included in our revenue guide and the updated Alpha schedule as well. So it includes, again, the 2 month of SciTec and our updated Alpha schedule. So at that point, we've raised our guide to where it is the $150 million to $158 million.

Great. Super helpful. And then also, just looking back regarding your launch success, the Launch 6 was a failure and then this most recent ground testing, this anomalous event also was a failure. So when you look at the repeatability of your capability, can you walk us through what you're changing in your operational structure to make sure that the subsequent launches here would be successful? Are there changes that you're implementing? And how should we think about your path towards a repeatable successful launch?

Yes. Thank you for that question. Following the test event, we immediately took action and implemented corrective actions, which I mentioned before includes increasing the inspection requirements for the fluid systems, optimizing some first stage sensors and also incorporating additional automated robots. We also had a daylong quality standdown with production integration and test teams where we implemented key process improvements. We conducted a number of exercises to review and optimize our existing procedures. And we're going to continue to enhance our reliability and quality culture.

The team is going to continue to hold regular exercises for these sustained process enhancements. I will say that safety and quality has been a major focus for me this past year at Firefly. After the test event, the team immediately started the root cause analysis and when initial findings showed the process errors, that's when I immediately requested a full stand down production, integration and quality test team standdown day, required all of the executive leaders also to attend. And this was our moment to utilize industry best practices and reset, refocus and return us to flight.

And do these events with Alpha change the time line with Eclipse at all?

The short answer is no. We have different flows for Eclipse in terms of the test stands, both the structural testing and the engine testing. There are some subject matter experts we have at the company that are supporting Alpha but that's for a limited period of time. We are also staffing up on the Eclipse program per our program plan. And so this should not -- Alpha should not affect our Eclipse production.

I will also say that one of the benefits of our commonality in our product lines is that every time we reduce risk or learn best practices on any one of our product lines, it also benefits the other programs in terms of carbon composites and tap off up cycle engines and test procedures as well.

Our next question is from Suji Desilva with ROTH Capital.

My first question is on Golden Dome. Can you please go through some of the details of how Firefly perhaps with SciTec would have opportunity here so we can kind of think about what may be coming as that program starts to have offerings?

Yes. Thanks, Suji. This is Jason. I think the plan is aligned, as I mentioned in the call, the White House, the Pentagon, they have strong initiatives for reform for speed and scale and affordability. You've heard that on the Golden Dome program under General Guetlein. You've also heard it from Secretary of War Hegseth and others. It's things like the first and only 24-hour Space Force VICTUS NOX mission that they want more of, and we have more of those kind of missions coming as well. They want more OTAs, more CSOs. They want to look at commercial technology first as a default. And so they're very focused on interoperability, speed, scale, strengthening competition in the industrial base.

With that, we've been in communications with the Golden Dome customers in terms of Alpha rockets, like I mentioned before, to support test targets for the space-based interceptors, also hypersonic test as well because there's a rich backlog of hypersonic test technology that needs to get burned down. So Alpha provides a commercially available capability to launch up to 1 ton into orbit and 2 tons of suborbital regimes. It's also something that -- if you look at Golden Dome, it's got multiple lines of effort, at least this first tranche of space-based interceptors. There's at least 5 lines of effort, 3 are space-based and 2 are ground-based.

And with the acquisition of SciTec, we're able to go after not only the rocket part of Golden Dome but also the space-based interceptor part of Golden Dome with our electric vehicle, partnered up with SciTec for some of the discriminating algorithms. And then the ground piece, which includes the fire control system and the ground control element, that's something that SciTec does for a living. As you know, they are the prime contractor and software developer for the apps and the hardware portion of FORGE for the Space Force.

And if you remember what FORGE does, it takes in all the sensor data with high volume at rate from low earth orbit, medium earth orbit, geosynchronous orbit, polar orbit, SBIRS and next-generation OPIR systems takes all that data at rate and then processes it into decision quality information that the war fighters can use to go and protect our nation. So it's that type of ground processing and software analytics that can be brought to bear to Golden Dome, just like other national security ground systems that the Space Development Agency has and the Space Force has.

Okay, Jason. I appreciate all that detail. And then thinking about SciTec and the synergies, I know it sounds like it's a very -- it feels like it's a very terrestrial sort of value proposition for SciTec but could it possibly enhance what you may be planning with Ocula and being able to extract analytics and information from lunar observation in the future as well?

You're spot on, Suji. Anywhere that you could take sense optical information, infrared information, even radio frequency information, whether it's around the earth or interplanetary or even the moon and Mars, SciTec has the capabilities with their 40 years of algorithm development and continuous tech refresh of those algorithms and apply it almost from a library like LEGO pieces and mix and match it to apply to different missions such as Ocula. Ocula is going to debut next -- we're targeting late next year, 2026 to launch our Blue Ghost 2 mission.

And on that Blue Ghost 2 mission, there will be an electric transfer vehicle that will orbit the moon for 5 years, and it will do the first commercial imaging and mapping of the lunar surface. It also be tasked to do space domain awareness in Lunar space. And so all those algorithms that SciTec provide today for missile warning, missile tracking and ISR and space domain awareness around the earth can also be applied to the moon as well.

Thank you. And this concludes our Q&A session. I will turn it back to management for final comments.

This is Michael. Thank you so much for joining today's call, and we look forward to talking to you next time in our fourth quarter financial results. Have a good day.

And ladies and gentlemen, this concludes our Q&A session. Thank you all for participating. You may now disconnect.

Greetings. Welcome to the Firefly Aerospace Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please note, this conference call is being recorded. I will now turn the conference over to Michael Sheetz, Firefly's Director of Investor Relations. Michael, you may begin.

Thank you, operator. Hello there. I'm Michael Sheetz, and welcome to Firefly's inaugural quarterly financial results call. I'm pleased to be joined on the call by CEO, Jason Kim; and CFO, Darren Ma, as we report our second quarter 2025 results for the period ending June 30, 2025. Today's call will include forward-looking statements, including, but not limited to, statements the company will make about its future financial and operating performance, growth strategy and market outlook.

Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause the actual results and trends to differ materially are set forth in the annual and quarterly reports filed with the SEC. Firefly assumes no obligation to update any forward-looking statements, which speak only as of their respective dates.

Also in this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in the second quarter 2025 filing. Unless otherwise stated, financial information referenced in this call will be non-GAAP. Our earnings press release, SEC filings and a replay of today's call can be found on our Investor Relations website at investors.fireflyspace.com.

Now I'll turn the call over to Jason.

Thank you, Michael, and welcome to our second quarter 2025 earnings call. We're proud to be reporting quarterly results for the first time on the heels of our historic IPO, the largest by U.S. space and defense company and one of the largest of any industrial company in the 21st century, raising $1 billion in gross proceeds to supercharge our growth. For those new to our journey, Firefly is a space and defense company delivering rockets and satellites to perform the hardest missions in space for national security, exploration and commercial technology built to keep America as the leader in space.

Our products position us to support the $175 billion Golden Dome opportunity as well as NASA's moon to Mars plan. We have 4 revenue-generating products: our small lift Alpha rocket, medium-lift Eclipse rocket, Blue Ghost Lunar Lander and Elytra Satellite Orbiter. Today, these products have a robust backlog of $1.3 billion. Our backlog consists of high-quality customers with critical missions that shape the world we live in.

Alpha is differentiated as the only operational 1 ton-to-orbit rocket. It is the first and only rocket to successfully perform a technically responsive space launch with a 24-hour notice for the U.S. Space Force. Alpha's 1-ton capability gives our customers more options to perform critical high sticks missions to help deter threats and maintain our freedom.

Earlier this year, Kratos onboarded Alpha to the Missile Defense Agency's MachCTV 2.0 contract to launch hypersonic missile tests, further diversifying the upside opportunities to our backlog. All of Alpha's proven technologies are scaled up to our larger reusable Eclipse rocket capable of carrying 16 tons to orbit. This medium lift rocket is built to support commercial constellations, exploration and the National Security Space Launch Program. Eclipse is a right-sized launch vehicle, meeting the growing customer demand for dedicated missions.

Earlier this year, Firefly became the first company in the world to successfully land on the moon. In total, Blue Ghost sent nearly 120 gigabytes of data back to earth, supporting 10 NASA payloads and unlocking new insights that will have a substantial impact on future human and robotic missions to the moon, Mars and beyond. Blue Ghost's Mission 1 was not only the longest commercial operation on the moon to date, but also set the tone for the future commercial exploration across Sisler space.

The other spacecraft in our portfolio is ELYTRA, a multi-orbit, multi-mission satellite capable of high-performance maneuvering missions. ELYTRA will support national security capabilities, including space domain awareness with rendezvous proximity operations, resilient long-haul communications and high-resolution planetary observation.

Now turning to our business update. In the second quarter, we completed a host of program milestones while also winning new contracts across our product lines. I'll start with spacecraft. In April, I had the honor of testifying before the United States Congress speaking to the House Committee on Science, Space and Technology about the success of Blue Ghost Mission 1 and its historic role in NASA's commercial lunar payload services initiative.

The bipartisan congressional support for more lunar missions is a welcomed boon to Firefly as we ramp up annual cargo deliveries to the moon surface. NASA continues to be an outstanding customer, especially as Blue Ghost delivers research and science to maximize returns on investment.

Firefly is working with NASA to pave the way for international and commercial partners to build the logistics that support the lunar economy on and around the moon. And Firefly is steadily working on our next lunar missions. Blue Ghost Mission 2 valued at $130 million will deliver our lander to the far side of the moon, marking the first such mission by a U.S. lander. The structures for this mission entered assembly in our spacecraft clean room after completing the crucial integration readiness review earlier this year.

The first payloads arrived with Australian company Fleet Space delivering its Sider payload and NASA's Jet Propulsion Laboratory delivering their user terminal. We are also conducting Spectre engine testing in preparation for Blue Ghost Mission 2.

Additionally, we signed another customer to Blue Ghost Mission 2 through our contract with the United Arab Emirates Mohammed Bin Rashid Space Center to fly their Rashid II Rover. This UAE contract carries dual significance. It represents both Firefly's expansion of Blue Ghost services to commercial and international customers. It also shows how we can add value to core NASA contracts by selling additional capacity on our lander.

In December, NASA awarded Firefly's third Blue Ghost contract valued at $180 million. Our team completed a systems requirements review, allowing us to move forward with design and development of the lander system. And as you will hear more about later, NASA awarded a $177 million contract for Blue Ghost Mission 4 in July. All of these missions support the growing NASA CLPS initiative, which recently received a $250 million budget increase for fiscal year 2026.

Moving to ELYTRA product line under Firefly's spacecraft business. In the second quarter, we secured a contract from the Pentagon's Defense Innovation Unit for ELYTRA Mission 3, flying in 2027 to demonstrate responsive Ronda Group proximity operations using our ELYTRA vehicle. This mission positions us well for upcoming opportunities like the Space Force's RGXX geosynchronous space domain awareness program of record.

Notably, the high threat maneuverability, ample fuel reserves and generous payload capacity of ELYTRA are well suited for future Golden Dome space-based interceptor hosts. We also unveiled our Ocular imaging service, which ELYTRA will host on upcoming Blue Ghost missions. This groundbreaking commercial lunar imaging capability enabled through telescopes provided by Lawrence Livermore Laboratory uses our ELYTRA vehicles and lunar orbit to provide high-resolution data.

Ocular will map the surface of the moon and provide space domain awareness services for customers to purchase during 5-year missions. Finally, we're looking forward to ELYTRA's first demonstration mission. The spacecraft completed testing and is preparing the launch. ELYTRA Mission 1 will test and validate ELYTRA's core capabilities as well as demonstrate Xtenti Phantom Ride dispenser for the National Reconnaissance Office.

Shifting to the launch side of our business. The FAA approved Alpha to return to flight. Alongside the FAA, government agencies, customers and industry experts, our independent review Board conducted a thorough misap investigation that found Alpha's flight safety system performed as expected through all phases of flight and pose no risk to public safety. In the words of our Alpha Chief Engineer, technical challenges are not roadblocks. They are catalysts and opportunities to improve. As a result, we increased the thermal protection system thickness on Stage 1 and will reduce our angle of attack during key phases of the flight.

Above all, safety and quality are of the highest importance. With FAA approval to return to flight and corrective actions implemented, Firefly is now working to determine the next available launch window for Alpha Flight V7. We are ramping Alpha flight cadence to meet the strong demand for launch services, especially for responsive national security missions and our best-in-class customers. We expect to launch Alpha 2 more times this year and are building ahead with several additional Alpha vehicles in production.

Earlier this year, Alpha won a Space Force award for the VICTUS SOL Mission, a $22 million contract under the growing Tactically Responsive Space program. That program received a $135 million budget increase for fiscal year 2026. In the second quarter, Alpha won an award from the Air Force Research Laboratory. This contract will work on developing a ceramic rocket engine nozzle, which aims to reduce nozzle mass by up to 50% through use of lightweight materials.

We are finding ways to enhance performance as we scale up Alpha production to deliver a more robust vehicle and a faster launch cadence for our customers. Additionally, the United States and Sweden signed a technology safeguards agreement. We've already partnered with the Swedish Space Corporation to launch Alpha vehicles from Europe. This critical regulatory milestone unlocks international growth opportunities and supports higher alpha launch cadences.

Moving to our Eclipse launch vehicle. Northrop Grumman invested $50 million into Firefly to further advance production. Alongside Northrop, we continue to make progress in developing Eclipse flight hardware with qualification testing underway. Eclipse is steadily completing milestones to our inaugural launch next year. We built and fit checked the first stage tanks for Eclipse's debut flight, and we've begun structural and load testing of the engine bay that will house our 7 Miranda engines. These powerful Miranda engines are progressing through our rigorous test campaign with more than 90 hot fire tests completed to date, including full power and mission duty cycle firings.

Our team is hard at work executing on Eclipse development, especially as we prepare to compete for national security launches alongside our partner, Northrop Grumman. Our 200-foot tall 15-foot wide Eclipse fills an important gap for dedicated missions for our customers.

With that business summary, I'll turn it over to Darren for a review of the second quarter financials.

Thank you, Jason. With this being our first earnings call, I'm going to review the financials from the second quarter and discuss our revenue outlook for 2025. A more detailed presentation of our financial results is contained in the financial tables included in the news release we published earlier.

Before we start, I will take a few minutes to explain how operational metrics drive the financial performance of the company. Key operational metrics include the number of launches and execution on key program milestones across both our spacecraft and launch businesses. For example, in our spacecraft business, we focus on delivery milestones because the revenue is generally recognized as a percentage of completion under each contract. For the launch business, we focus on the number of launches.

Revenue for our operational alpha vehicle is recognized at a point in time when the launch occurs. For ECLIPSE, which is in development, we recognize revenue as a percentage of completion based on program milestones as part of the Northrop Grumman partnership. Once the Eclipse vehicle is operational, we will recognize revenue as launches occur. It's important to note that the timing of revenue could be impacted by things that are outside of our control, especially on the launch side.

Now turning to our second quarter financial results. We generated revenue of $15.5 million. This compares with $55.9 million in the first quarter and $21.1 million in the same quarter a year ago. As a reminder, the successful launch of Blue Ghost Mission 1 drove an increase to our first quarter revenue. Spacecraft revenue for the second quarter was $9.2 million based on achieving key contract milestones. Launch revenue was $6.3 million, driven by nonrecurring engineering for Eclipse development. We ended the second quarter with a total backlog of approximately $1.1 billion.

In addition, we have a robust pipeline of revenue opportunities that is incremental to the backlog conversion. For example, our backlog increased in July of this year when we secured our fourth Lunar mission from NASA of approximately $177 million, bringing our current backlog to $1.3 billion. Second quarter gross margin was 25.7%. This compares with 4% in the prior quarter and 14% in the same quarter a year ago. The sequential gross margin increase was primarily driven by a customer requested contract modification that results in an overall increase in contract value for our Blue Ghost Mission 2.

I should point out that gross margin in the near term could fluctuate from quarter-to-quarter based on the timing of alpha launches and primarily because of the current accounting classification of our Alpha launches. As a reminder, Alpha costs are currently expensed as R&D. In the future, we expect Alpha costs to be capitalized as inventory and recognized as cost of goods sold at the same time as launch. Non-GAAP operating expenses for the second quarter were $55.8 million compared with $57.9 million in the first quarter and $51.4 million in the same quarter a year ago.

We expect operating expenses for the remainder of 2025 to increase, driven by Eclipse development, Alpha material purchases and spacecraft development. The primary difference between GAAP and non-GAAP operating expenses are onetime expenses, such as IPO expenses, stock-based compensation expense and other onetime expenses. Non-GAAP operating loss was $51.8 million compared with a loss of $55.7 million in the first quarter and a loss of $48.5 million in the second quarter a year ago.

Our non-GAAP net loss in Q2 was $57.1 million. This compares with a net loss of $56.3 million in the prior quarter and $53 million in the same quarter a year ago. Adjusted EBITDA in the second quarter was negative $47.9 million compared with negative $47.1 million in the first quarter and negative $47.7 million in the second quarter a year ago.

Turning to our balance sheet. As of June 30, our cash and cash equivalents and restricted cash were approximately $221.5 million. While we are not presenting an updated balance sheet as of today, I do want to note that we raised nearly $1 billion in gross proceeds through our successful IPO in August. Following the IPO, we used $148.1 million to pay off our term loan, leaving us with approximately $1 billion in cash, cash equivalents and restricted cash as of the end of August.

In addition, after the close of the IPO, we secured a $125 million revolving line of credit, which gives us additional liquidity to support our growth objectives. CapEx was $9.2 million compared with $2.7 million in the first quarter and $17.3 million in the second quarter a year ago. The sequential increase was primarily driven by investments for Eclipse infrastructure and our East Coast launch facility in Wallace, Virginia.

Free cash flow was a negative $37.3 million compared with a negative $59.2 million in the first quarter and a negative $37.6 million in the second quarter a year ago. The sequential improvement was primarily driven by customer payment for Blue Ghost Mission 1.

Now turning to our revenue guidance for fiscal 2025. We currently expect revenue will be in a range of $133 million to $145 million. In summary, our capital-efficient operating model, combined with disciplined execution continues to support revenue growth, margin expansion and strong cash flow conversion potential over time. Firefly's fortified balance sheet positions us to scale our market-leading products and fuel strategic growth in the years ahead.

Now I will turn the call back over to Jason for his closing remarks.

Since the end of the second quarter, Firefly is pushing forward with additional wins. NASA's award of Blue Ghost Mission 4 in July represents back-to-back Lunar lander contracts for our team. The contract will see Blue Ghost deliver 5 NASA payloads to the Moon South pole in 2029 and increases our backlog to $1.3 billion. As with Blue Ghost Missions 2 and 3, ELYTRA will support our fourth mission. Our Blue Ghost lander enables NASA to evaluate the moon's South pole resources such as hydrogen and water as well as study the radiation and thermal environment.

We are honored to be supporting yet another critical NASA mission. We are proud to support the United States building a sustainable long-term presence on the lunar surface and fortify U.S. leadership of the ultimate high ground. In late breaking as of this morning, I am pleased to share that NASA added $10 million to our Blue Ghost Mission 1 contract as an addendum to acquire high-value data. This goes above and beyond the base contract to include large amounts of lunar surface images. This is significant as it shows how each NASA CLPS mission has opportunities for additional high-margin recurring revenue generation. This addendum contract also demonstrates the market for our Ocula commercial lunar imaging surface deploying as part of upcoming Blue Ghost mission starting in 2026.

As a U.S. Air Force veteran, I'm proud that Firefly is an American-based company with American manufacturing and supported by American suppliers. Firefly is vertically integrated with production hardened facilities and engineering teams that are based in Austin, Texas. The unique co-location of our manufacturing, testing and integration allows us to deliver our products on cost, schedule and at increasing capacity.

We have core technology advantages through our carbon composite technology used across all of our product lines as well as patented, scalable top-off cycle engines that are shared across our launch vehicles. For those who are new to Firefly, thank you for joining us in this journey. And for the many long-time supporters, thank you for your years of belief and continued backing. And to our Fireflies, thank you for your bold can-do attitude and your dedication to our mission. Together, we inspire the world, unlock new categories in space and deliver critical national security capabilities for America and its allies.

Thank you, Jason. Operator, we're ready to take questions.

[Operator Instructions]

Our first question comes from the line of Sheila Kahyaoglu with Jefferies.

Congratulations on a successful launch in more ways than one. Maybe if we could start on the first question. With the FAA approving return to flight for Alpha, how are you thinking about the timing of Flight 7 and 8? And how does that feed into your targeted launches for '26? What are the range of potential outcomes for next year, thinking about production capacity versus the current backlog?

Thank you, Sheila. We received our FAA return to flight determination at the end of August. We expect to launch Flight 7 in the coming weeks. If you saw our slides in the Alpha slide, you could see that Flight 7 is in a mature state right next to Flight 8 in a mature state. And so we keep increasing our production capacity, and we're building ahead as well for 2026. So we're working closely with the range and our customer, Lockheed Martin, to share more details on the mission and payload soon. But above all, safety and quality are the highest importance.

Got it. And maybe if we could talk about Golden Dome. We've heard a lot about it, but some companies are starting to solidify what it could mean. How do you think about the opportunity? And what news should we look to hear? What is sort of the framework and expected timing you're thinking about as it relates to Golden Dome?

Sheila, yes, being an Air Force veteran, Golden Dome is something near and dear to my heart and the fireflies -- we have 3 product lines of the company that are well positioned to support the Golden Dome architecture. First off, Alpha. It is a commercially available rocket, and we're increasing our production capacity to deliver more and more alphas per year. It can support launching surrogate targets for the Golden Dome missions. It can also support launching test missions of things like hypersonic missiles as well as space-based interceptors. And it also can serve as an operational rocket as well.

As you know, we were the first and only to launch a 24-hour call-up mission on the Victus Nox mission, and that's something that is helpful for the Goldman Dome mission. On the spacecraft side, our electric spacecraft with its ample fuel reserves and its high thrust and maneuverability as well as its payload carrying capacity is well suited to support space-based interceptor host missions. And there's optionality there to provide that as a prime or as a subcontractor.

And then finally, Eclipse, it's a 16-ton rocket. It is capable of launching constellations, whether they be sensors or space-based interceptors in the future, and that's part of onboarding onto the national security space launch program.

Our next question comes from the line of Seth Seifman with JP Morgan.

I wanted to ask, starting off, maybe if you could talk a little bit about expectations for either EBITDA or free cash flow for the year?

Seth, this is Darren. So as of now, we're guiding to annual revenue. We're focused on hitting the operational metrics, which, as we discussed previously, was -- is very much linked to our financial performance. And that's essentially what we're guiding to right now.

Okay. Okay. And then just maybe a little bit more qualitatively, as we think about the path to ECLIPSE launch and kind of have the potential perhaps to do that next year, can you walk us through maybe some of the milestones along the way as we think about going from where we are now to the collaboration you'll have with Northrop next year to get that launch up?

Yes. Seth, this is Jason. Thank you for that question. We're extremely grateful and excited to be partnered with Northrop Grumman. They're our co-developer on the ECLIPSE program. As you remember, in the second quarter, Northrop Grumman, they invested a first-of-a-kind investment into Firefly at $50 million. We are working on the milestones towards our inaugural launch. We've completed our Miranda flight engine testing as of recently, over 90 hot fire tests that include full mission duty cycle hot fire testing at 206 seconds as well as at 100% thrust. We're going to move into qualifying that engine and then building the flight engines. We also have developed the engine bay, and that's undergoing testing.

So once we complete testing there, we would integrate the 7 flight Miranda engines with the engine bay. We've also done the checks of the integration of our liquid oxygen tank and our RP1 tank. We've completed the integration of that. And so we're going to -- the next step would be to make the engine bay with the tanks and the section. From there, we would deliver that to Northrop Grumman to integrate with the second stage, complete the payload faring with the payload, integrate the payload and jointly conduct the launch campaign at our Waltz pad.

Our next question comes from the line of Colin Canfield with Cantor.

If you could maybe update us on the time line for NSL Lane 1 and maybe kind of talk about how the team is thinking about their proposal ahead of the December window? And specifically, what are customers saying kind of about the time frame from transition from onboarding to initial contract award?

Thank you, Colin, for that question. We wanted to provide a credible offering. And so one of the requirements of onboarding into the U.S. Space Force's National Security Space Launch program, Lane 1 is to have a credible plan for the first launch. We anticipate that first launch being the late 2026 time frame. And so we're pursuing along with our co-developer, Northrop Grumman, a proposal for late this year to be submitted. Once onboarded, you would need to have a first launch before bidding the first task orders and the first task orders would be around the -- after the first quarter of 2027.

Got it. Okay. And then in terms of the tax responsive space line item in the supplemental that was mentioned in the script, the $135 million. Can you maybe discuss kind of the velocity of the money and what contracting officers are saying with respect to kind of potential near-term unlock in terms of awards? I think one of the things that we've gotten feedback from other supplemental oriented players is that they're seeing a pretty fast acceleration of that kind of related spend versus base accounts, but happy to hear kind of what your experience sounds like?

Yes, we're very positive on this additional $135 million that was put into the reconciliation budget because of our Victus Nox experience, and we subsequently have been put on contract for Victus Haze and Victus Sol. We're very much looking forward to working with the Space Safari Space Force customer on the next missions. We would like to have as many of our alpha rockets that we can fit in storage at our Vandenberg Space Force base so that we could be ready at any time to launch more tactically responsive space launches in the 24-hour time line so that we can continue to deter our U.S. rivals.

Our next question comes from the line of Kristine Liwag with Morgan Stanley.

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

Kristine, it's Jason. There is no change to the design. It's just adding more layers of the thermal protection system to the bottom of the first stage, and it's negligible in terms of mass. The second part of that question is how does this change the angle of attack. We can control that at different -- critical phases of the flight profile. And so that is something that we can plan for and can control as well.

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

Thank you for that question, Kristine. So the answer is yes. We -- at Firefly, we own that data. And so we are able to sell that commercial data license to multiple customers. This was really helpful for us because it was the first of many data sales that we plan to do. You heard Ocula, and that is something that is very core to the Oculus service that we unveiled a couple of months ago. I'll pass it on to Darren to talk more.

Yes. Kristine, I'd say engineering change proposals are common across our firm fixed price contracts. For example, on Blue Ghost Gose Mission 1 prior to this data buy, we've already been -- the team has already been executing on engineering change proposals, increasing that contract from $93.3 million up over $100 million over time. So we fully expect this trend to continue. It really gives us a differentiated revenue stream with higher margin dollars going forward with things like Ocula, as Jason mentioned.

Great. If I could sneak a third and last one. With the Blue Ghost 4 contract you got this summer, how did that contract turn out versus your expectations? And can you provide some sort of revenue recognition expectations for that since that's not launching until 2029? And also any sort of profitability metrics that we should monitor?

Yes. So Blue Ghost Mission 4, we had 2 opportunities to win another additional Blue Ghost contract going forward. We did plan on winning 1 of the 2, and it's an example of how we -- the team has converted opportunities in the backlog. It's a significant opportunity that the team has executed on. From a revenue recognition perspective, it's recognized over a percentage completion basis, very similar to Blue Ghost Mission 1, which you guys saw how it plays out in our financials.

Our next question comes from the line of Suji Desilva with ROTH Capital.

The backlog, can you just update us on the rough mix of launch and spacecraft? And maybe more specifically within the launch Alpha launch backlog, how much of that is national security responsive versus other? If you could give us some rough estimate there, that would be helpful.

Yes. So -- so today, I'd say we haven't really disclosed the split between launch and spacecraft. But if you reference how we -- our revenue split between Q2, it was a majority of spacecraft. So I'd say prior to Blue Ghost Mission 4, most of our backlog was more on the launch side. But with Jason's background as in the spacecraft sector over decades of experience, we would expect that weighting to shift over time and perhaps even outpace the launch side in the future.

Okay. Great. And then I think there was earlier -- there was an announcement about NASA's VIPER launch. And I'm just curious, is there a road map, Jason, of kind of how much capacity you can carry to the moon with the glucose and pairing up with electro potentially as we move toward cargo, I know you're taking the UAE Rover yourselves, larger cargo infrastructure cargo and then over time, man. If you could help us understand the road map you're planning, that would be helpful.

Yes. Thanks, Suji. This is just the beginning. Although we have the most number of commercial lunar payload services contract out of any commercial company right now with NASA. We have a long-term road map where we build big things here at Firefly. If you look at, for example, at our Eclipse rocket, that's a 200-foot rocket like 15 feet diameter. So that's a large structure. If you look at our Blue Ghost 2 mission, we just sent a full stack of our Lunar lander and our DPA with our electric vehicle, which sits at 22 feet high to get environmentally tested at Jet Propulsion Laboratory.

So we're already building bigger and bigger things. We are able to scale our technology because we're using carbon composite structures and tanks -- and all of our Lunar lander technology that helped us successfully land stable and upright on Blue Ghost 1 is transferable to those bigger systems. So long term, we would like to put not only lunar landers on the moon, but more rovers, potentially light terrain vehicles, infrastructure like power plants. So that is all inclusive of our Lunar lander road map. We see more than just annual missions to the moon, but multiple missions annually to the moon by the end of the decade.

Our next question comes from the line of Edison Yu with Deutsche Bank.

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

Thank you, Edison. We look at M&A using our well-defined process as it relates to M&A targets. First and foremost, any M&A target has to fit our strategy. We have a robust long-term strategy. It also has to fit our culture, our Firefly culture, which is one of a can-do spirit as well as speed and collaboration and technology and innovation. Also, there are synergies that the M&A target could provide to our existing product lines. So those are things that we look for in companies...

Understood. And then a follow-up question on ELYTRA. I think you made a reference to RGXX in the opening remarks. I was wondering if you could maybe elaborate around that. Is that supposed to be potentially a template for some future program that ELYTRA would go after? Or how is -- how should we think about that kind of reference you made?

Well, if you recall, RGXX is a follow-on to the geosynchronous space situational awareness program, which once was a $6 billion program of record that the traditional prime contractors were developing. It is a requirement that is still needed going forward -- but earlier this year, the Pentagon signed out an acquisition decision memo to open up the competition for the next-generation mission called RGXX to commercial providers like Firefly and bring in our transformative commercial technologies.

It just so happens that earlier this year, we won a DIU contract for our ELYTRA Mission 3, and that mission is to perform space domain awareness using [indiscernible] proximity operations. And I already mentioned that ELYTRA has ample fuel reserves, high thrust maneuverability as well as carrying capacity for different payloads. We're able to apply that same technology to the RGXX program of record.

Great. If I could sneak in one housekeeping. The $10 million extra, is that going to be recognized in 3Q as revenue? Or what's the, I guess, the rev rec on that $10 million for Blue Ghost?

That's correct, and we did plan for that in our road map.

Ladies and gentlemen, I am showing no further questions in the queue. I would now like to turn the call back over to Michael for closing remarks.

Thank you, everyone, for attending today's call. We look forward to speaking with you all again when we report our third quarter financial results [indiscernible] .

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.