Intuitive Machines (NASDAQ:LUNR) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.
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Summary
Intuitive Machines reported $206 million in revenue for Q2 2026, a significant increase from the previous year, and ended the quarter with a $1.8 billion backlog across civil, commercial, and national security sectors.
The company reaffirmed its full-year revenue outlook of $900 million to $1 billion and expects a positive adjusted EBITDA for the year, demonstrating confidence in their strategic direction and operational execution.
Strategic acquisitions, such as Lance Harris, Kinetics, and Gunhili, have expanded the company's capabilities, making them a leading integrated aerospace company and widening their addressable market to over $150 billion.
Operational highlights include the successful delivery of 16 satellites for the SDA Tranche 1 tracking layer and progress on various NASA and commercial projects, with a strong pipeline of future opportunities.
CEO Steve Altemus emphasized the company's transition towards building and operating space infrastructure, positioning Intuitive Machines as a next-generation space prime, with a focus on recurring revenue from infrastructure services.
CFO Pete McGrath highlighted improvements in gross profit and adjusted EBITDA, despite increased SG&A and R&D expenses, and noted strategic investments to support future growth and backlog execution.
Full Transcript
OPERATOR (Operator)
Ladies and gentlemen, thank you for standing by and welcome to the Intuitive Machines second quarter 2026 conference call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press star one again.
Please be advised that today's conference is being recorded. I would now like to turn the conference over to Stephen Zhang, Head of Investor Relations. Go ahead.
Stephen Zhang, Head of Investor Relations
Good morning. Welcome to the Intuitive Machines second quarter 2026 earnings call. Chief Executive Officer Steve Altemus and Chief Financial Officer Pete McGrath are leading the call today. Before we begin, please note that some of the information discussed during today's call will consist of forward-looking statements setting forth our current expectations with respect to the future of our business, the economy, and other events. The company's actual results could differ materially from those indicated in any forward-looking statements due to many factors.
These factors are described under Forward-Looking Statements in the company's earnings press release and the company's most recent 10-K and 10-Q filed with the SEC. We do not undertake any obligation to update forward-looking statements. We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in the applicable SEC rules and regulations. Reconciliations to the company's GAAP measures are included in the earnings release filed on Form 8-K. Finally, we posted an earnings call presentation to our website which provides additional context on our operational and financial performance. You can find this presentation on our Investor Relations page at www.intuitivemachines.com/investors. Now I'll turn the call over to Steve Altemus.
Steve Altemus, CEO
Good morning, and thank you for joining us. We delivered a strong quarter highlighted by $206 million of revenue, more than four times the prior year, exited the quarter with approximately $1.8 billion of backlog, and have positioned the company for the next phase of growth. Our backlog now spans civil, commercial, and national security customers, and we have more than 80 spacecraft under contract. Based on that visibility, we are reaffirming and remain confident in our $900 million to $1 billion revenue outlook and our expectation for positive adjusted EBITDA for the full year.
Two years ago, Intuitive Machines returned America to the Moon for the first time since Apollo. Last year, we became the first company to land a second time at the lunar South Pole. Those missions demonstrated our ability to deliver complex space missions that advanced the state of lunar exploration. That was never our ultimate destination. It was the foundation for building the next-generation Space Prime, a fundamentally different company. Our strategy has evolved alongside the market as our customers increase their presence across LEO, GEO, cislunar, and deep space.
Their need is now for more than individual missions alone. We believe the next era of space will require a next-generation Space Prime capable of building spacecraft, connecting them through resilient networks, and operating the resulting infrastructure across the space ecosystem. Over the past 18 months, every strategic decision we have made has been focused on building that next-generation Space Prime. The Lance Harris acquisition transformed Intuitive Machines to one of the nation's leading satellite manufacturers, adding proven production capabilities.
The Kinetics acquisition added mission operations, flight dynamics and deep space precision navigation, and satellite constellation management, allowing us to support customers throughout the operational lives of their missions. Our most recent acquisition of Gunhili, Earth Station and Comsat expanded our ground segment communications infrastructure with globally recognized deep space ground systems that strengthen our ability to deliver resilient communications and navigation services from Earth orbit to cislunar space and beyond.
With these acquisitions, Intuitive Machines is an integrated aerospace company capable of building, connecting, and operating a system of systems as space infrastructure. We believe that integration is becoming increasingly valuable as customers move beyond individual spacecraft toward complete operational systems. Combined with our existing leadership in lunar transportation and infrastructure, we believe these capabilities have expanded our addressable market from roughly $20 billion only a few years ago to well over $150 billion across civil, commercial, and national security space sectors.
As part of our strategy, we are investing today to establish capabilities that we believe will generate value over many years this quarter. Those investments include inventory purchases, production capacity increases, and manufacturing efficiency initiatives. Customers are increasingly seeking greater production volume and faster delivery. Companies can no longer rely solely on the traditional model of waiting until a procurement or contract is awarded to begin preparing.
Our investments position us to respond more quickly and deliver on our customers' timelines. NASA Moonbase is an example, an excellent example. While we begin by building and landing lunar delivery systems for NASA under the CLPS contract, we've since expanded our capability by providing communications and navigation systems for NASA and other government customers under the Near Space Network Services contract. And we continue to evolve towards production-ready landing systems and satellites in support of the rapid cadence of Moonbase missions required across manufacturing, communications, and mission operations.
These investments support our objective of delivering and operating space infrastructure and expanding long-term, durable operational revenue. The effect of these investments can be seen in the recent uptick in bookings this quarter. As of this call, Intuitive Machines generated $1.7 billion in bookings this year, including $1.2 billion in new bookings in quarter two through today. This marks the highest quarterly bookings in company history and validates our strategy by expanding the infrastructure base we are building for the future.
Quarter two bookings also include partial awards with authority to proceed. We anticipate these ATPs will contribute an additional $300 million in bookings through the second half of the year. As the contracts are fully definitized, our diversification strategy and capability investments have expanded our total addressable market, moving us beyond a primarily NASA and civil lunar delivery company to one able to address the broader space ecosystem. This quarter's bookings reflect that diversification. Our $1.8 billion Q2 backlog is split approximately 37% civil space, 49% commercial space and 14% national security space. Q2 bookings through today were composed of approximately 20% civil, 50% commercial and 30% national security space, highlighting our continued diversification.
As you've heard me talk about on previous earnings calls, our strategy is organized around three integrated pillars: Build, Connect and Operate space infrastructure. Let me walk through each. The first pillar, Build, begins with the spacecraft and physical infrastructure that make our broader strategy possible. Today we are applying our engineering and production discipline across lunar landers, government and commercial communications satellites, national security spacecraft, orbital transfer vehicles and deep space systems.
Beginning with our civil portfolio, NASA continues to advance its long-term vision for sustained lunar exploration through the Moon Base Initiative. Earlier this year we were awarded the CT4 mission and this quarter NASA selected Intuitive Machines for the CS8 mission, extending our lunar delivery cadence beyond 2028 into 2030. These awards represent our fifth and sixth missions under the CLPS contract. Looking ahead, we expect to compete for four additional CLPS task order opportunities this year, including the 10-year CLPS 2 multi-award follow-on contract.
These opportunities represent far more than individual delivery missions. They reinforce the transition from demonstration missions toward higher cadence, repeatable and reliable lunar transportation supporting long-term operations on the Moon. We also began work with NASA under our first contract supporting the reconfiguration of the Gateway power and propulsion element for NASA's flagship Mars mission, SR1 Freedom. This program demonstrates how spacecraft developed for lunar exploration can be adapted for entirely new missions, in this case a deep space Mars mission, extending the value of existing technologies while reducing development risk for future exploration architectures. At the same time, we continue operating the Lunar Reconnaissance Orbiter Camera and ShadowCam programs, providing mission operations, data collection and lunar surface analysis. Next week we'll fly over and image the impact area of a recently disposed upper stage on the surface of the Moon. As lunar activity accelerates, we see significant opportunities to expand these capabilities through future lunar surveying, mapping and data repository services supporting NASA's Artemis program and Moon Base initiatives.
Now moving to national security space. This quarter we successfully delivered all 16 satellites supporting the SDA Tranche 1 tracking layer while continuing production on Tranche 2 tracking layer. Earlier this year, we expanded that production line with awards for the SDA Tranche 3 tracking layer representing another 18 satellites, and as of this earnings call, we were awarded an additional 18 satellites supporting AMDT 3, part of the nation's Golden Dome architecture.
In addition, we received ATP on an award for two restricted 300 series spacecraft to an undisclosed customer. With these recent awards, we have more than 70 IM300 spacecraft under contract today. This represents an unprecedented number of IM300 series spacecraft simultaneously in production. This month we also received authority to proceed for continued development of our Nebula orbital transfer vehicle on a Phase 3 contract for a government customer.
This award will take the OTV design from paper to full-scale spacecraft development, integration and testing, all the way through flight. Collectively, these programs demonstrate our ability to manufacture spacecraft at production scale while supporting some of the nation's highest priority national security missions. In commercial space, we continue to see strong demand for our flight-proven IM 1300 series platform. In quarter two, we were awarded three geostationary communication satellites from an undisclosed customer valued at over $600 million over the next 30 months.
Sirius XM11 also launched and deployed during the quarter, and we are on track to hand that spacecraft over to the customer later this month, continuing the long heritage of one of the industry's most reliable commercial communications satellites. Beyond traditional communications satellites, we believe the same high-power spacecraft architecture positions us well for the emerging commercial orbital data center market. We are currently discussing strategic partnerships to bring our expertise and satellite production capability to this burgeoning market.
The second pillar is Connect, linking spacecraft, ground systems and users through resilient communications and navigation networks. As activity expands beyond Earth orbit, communications, navigation and data transport become essential infrastructure rather than supporting capabilities. Through Near Space Network services, our Lunar Data Relay Architecture, COMSAT, and our investments in resilient communication networks, we are building systems that connect spacecraft from Earth orbit to cislunar space and ultimately to the lunar surface.
These investments are designed to support many customers across many missions rather than a single contract. At the Lunar Frontier, Office 1, our first lunar communications relay satellite remains in production and is scheduled to launch aboard IM's Mission 3 during the first quarter of 2027. As with any launch manifest, timing will reflect spacecraft readiness, launch vehicle availability and NASA stakeholder priorities. As part of the acceleration associated with Moon Base, development continues on Altis 2 through 5.
We now plan to deploy these remaining four satellites together in 2028 to complete our lunar communications constellation ahead of schedule. On Earth, we continue enhancing the ground segment of our Near Space Network, including installation of our first of several tri-band antenna feeds, starting with Katowista, Pennsylvania, and integrating the newly acquired Goonhilly, UK, and COMSAT US facilities into our network. These investments extend our ability to provide secure communications, navigation, timing and data relay services across Earth, lunar, cislunar and deep space operations.
The third pillar is Operate. We believe the path toward durable recurring revenue is to not only develop and deliver systems; it is to then operate the infrastructure throughout its life cycle. Through kinetics, with our mission operations expertise, lunar navigation capabilities, communications infrastructure and future network operations, we are positioning Intuitive Machines to generate recurring operational revenue from the systems we deploy.
Near Space Network services, our operations supporting LROC and ShadowCam, and the continued expansion of our communications architecture demonstrate that evolution. As additional infrastructure comes online, we expect to expand communications, navigation, hosted payload, mission operations and data services that deepen customer relationships and increase recurring revenue opportunities. Whether supporting NASA's evolving Moon Base, expanding national security space capabilities, enabling commercial communications, or helping commercialize the next generation of space communications networks, each opportunity builds upon capabilities that already exist within the company. As we add missions, assets and customers, we strengthen the platform and expand the opportunity to provide long-duration services and revenue. We believe this transition from delivering hardware to operating infrastructure represents one of the largest value-creation opportunities in the emerging space economy. Intuitive Machines is positioned to lead that transition because we now bring spacecraft manufacturing, communication networks, navigation expertise, mission operations and ground infrastructure together within one company.
Our objective is not simply to win the next mission; it's to build, connect and operate the systems that enable the missions that follow. This is the next-generation space infrastructure prime we are building, and with that I'll turn the call over to Pete for a review of our financial results.
Pete McGrath (Chief Financial Officer)
Thank you, Steve, and thanks to everyone joining us today. Q2 demonstrates how the business is changing as we scale across civil, commercial and national security markets. Year over year, we generated significant revenue growth, materially improved gross profit and adjusted EBITDA, and added substantial backlog while continuing to invest ahead of customer demand. Those investments, which Steve described, increased near-term cash usage, but they also strengthened our ability to execute the backlog we have already secured.
We delivered 206 million in revenue for the quarter. That was driven primarily by execution across satellite manufacturing, CLPS missions, NS and OMS programs. Gross profit increased to 36 million in the quarter, up significantly from negative 12 million in the prior year. This improvement was driven by the growing contribution from our satellite business and the continued focus on cost and execution across our programs. SG&A was 60 million in the quarter, which includes approximately 11 million of share-based compensation, 8 million of acquisition-related transaction and integration costs, some additional headcount as we adjusted our growth initiatives, as well as some timing on software license renewals in the quarter. Operating loss for the quarter was 47 million, driven by a higher SG&A amortization and a 14.7 million estimate-at-complete adjustment on the IM4 to accommodate payload changes. Research and development was 8 million in the quarter. These investments are focused on upgrading our lunar landers, expanding our software-defined satellite architecture, increasing addressable market opportunities in GEO and systemic communications, and supporting future high-margin infrastructure services.
Q2 profitability continues to improve as adjusted EBITDA was negative 14 million, compared to negative 25 million last year, driven primarily by higher-margin contributions from landers, partially offset by IM4 EAC adjustments, SG&A and investment in R&D. Operating cash used was 60 million during the quarter. Operating cash reflected strategic investments in long-lead inventory to position for competitive awards, as Steve described earlier. Operating cash included approximately 17 million of accelerated inventory and infrastructure investment supporting awarded or anticipated programs, 8 million of acquisition and integration costs, and 17 million associated with the IM-4 milestone payment to SpaceX.
We believe the strategic investment in the quarter has strengthened our production readiness, supported recent awards, and positioned us to convert our growing backlog into future revenue. Capital expenditures of 24 million were primarily for our NS and S satellite constellation and ground segment. Note that CAPEX in the quarter includes not only our first NSNS satellite but also upgrades to our ground segment and long-lead material buys for satellites 2 through 5 as we look to accelerate the full constellation following our discussions with NASA.
CAPEX is expected to be at these elevated levels in the coming quarters as we continue to work on all five satellites. Taken together, these investments along with timing of milestone payments received resulted in an 84 million cash deployment during the quarter. While investments increase near-term cash usage, we believe it strengthened our ability to execute our record backlog, expand our long-term competitive position, and accelerate recurring infrastructure services.
Free cash flow is expected to improve throughout the second half of the year as investments stabilize and milestone receivables come in. Following our recent awards, we ended the quarter with 367 million in cash, which includes 235 million in net proceeds in the quarter from our at-the-market program. Total today we have raised 291 million gross at a VWAP of $26.81. Our current liquidity provides the capital necessary to fund current operations. Turning to growth and backlog, we exited the quarter with a record 1.8 billion in backlog supported by 920 million in new bookings highlighted by three commercial GEO satellite awards, our sixth CLPS mission, and 18 AMDT-3 Golden Dome satellites for L3Harris in support of their national security space customer. This backlog provides strong multi-year visibility and reflects increasing demand across both civil and national security markets. Approximately 25 to 30% of our Q2 backlog is expected to be revenue in 2026, 35 to 40% in 2027, and the remaining thereafter. Looking ahead, as Steve mentioned, we expect additional backlog growth from several large multi-year NASA and national security programs in the second half of the year, including the AMDT-3 Golden Dome award that was already booked in the third quarter.
In addition, we have other ATPs with contracts pending, proposals submitted awaiting selection, and expect to bid on three new CLPS awards later this year along with other NASA Moon-based opportunities. As of August 6, our total shares outstanding are 228.9 million, with 173.2 million shares of Class A and 55.7 million shares of Class C. Moving on to guidance, we are reaffirming our full-year revenue outlook of 900 million to 1 billion and continue to expect positive adjusted EBITDA for the year.
Our 1.8 billion backlog provides substantial visibility into the remainder of '26. The primary variable determining where we land within the range is the timing of contract definitization and revenue conversion, not customer demand. On the profitability side, we continue to expect positive adjusted EBITDA for the full year. Our decision to reaffirm guidance reflects not only our confidence in execution but also the benefits of a significantly more diverse business portfolio.
This quarter demonstrates that Intuitive Machines is no longer dependent on a single market, customer, or mission cadence for growth. We now have meaningful business across civil, commercial, and national security space with 1.8 billion of backlog. With a growing communication and mission operations infrastructure, our focus for the second half is straightforward: execute the backlog, convert it into revenue while improving profitability, and continue building recurring infrastructure revenue.
We remain confident in our full-year outlook. With that, operator, we are now ready for questions.
OPERATOR (Operator)
Thank you, and we will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad to join the queue. If you would like to withdraw your question, simply press star one again. If you are now called to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Just a reminder, please limit yourself to one question and one follow-up only.
After that you can simply join the queue again. Thank you. And your first question comes from Griffin Boss from B. Riley Securities. Please go ahead.
Griffin Boss, Analyst at B. Riley Securities
Hi, thank you, and good morning. So just off the bat, wanted to touch on backlog. You just mentioned 25 to 30% expected to convert to revenue this year, and you've already added 300 million to the backlog in three quarters. So assuming maybe even just 5 or 10% of that extra 300 million is also converted this year, you're getting relatively close to the low end of the guidance. So I just kind of want to dig into what the major swing factor is to get up to the midpoint.
Is it these programs that you're bidding on that you expect to come through in the second half that are going to have immediate impact, or is it more so is the delta primarily additional ATPs on contracts already that you expect to flow through over the remainder of the year?
Pete McGrath (Chief Financial Officer)
Thank you. Yeah, so thank you, Griffin. I would say when I look at revenue conversion, you're right, we have a very strong visibility of the bottom end of the range. The opportunities to get to the middle of the range are a couple of things. One is timing of procurements and things as they come in. We see some acceleration of that that gives us opportunities to move higher into the range. There's also those ATPs; as we definitize them, the timing of that definitization will pull revenue into this year versus if they roll later, it would defer it to next year.
So that's why we're keeping, I'd say, the wider range because we see opportunities at the low end all the way through that high end.
Griffin Boss, Analyst at B. Riley Securities
Got it. Thanks for the color, Pete. And then just for my follow-up, wanted to dive into CLPS. The task orders that you're bidding on — what's the timeline for bid submission of the RFPs? I believe you said CLPS task orders for the remainder of the year. Do you expect those to be multi-vendor awards, or are these four individual awards? And then also related, did you say that one of those four is expected to be an initial CLPS 2.0?
Steve Altemus, CEO
Yeah. Griffin, good morning. Yes, we expect — well, there are two awards — or, I'm sorry, task orders — issued with draft RFPs that are coming on top of each other here for this summer; those are landed missions. The other mission coming out this year, a little bit later this summer, maybe early fall, is the Orbiter Surveyor to map the Moon in replacement of the Lunar Reconnaissance Orbiter. And then there is, this year, we expect the CLPS 2.0, which is estimated to be over $10 billion, multi-award IDIQ.
So that'll be much like CLPS 1 that spans 10 years with probably an option for 5 more years, plussed up about 4x from where CLPS 1 was to really get to the heavier cargo landers. And that'll be multi-award. And then we think as we cross the new year into January timeframe, there's the final award for CLPS 1.0, which will be a procurement called CLPS CP32. So those are the what five awards that we're expecting and contracts we're expecting for the balance of the year and crossing into the new year.
Griffin Boss, Analyst at B. Riley Securities
Excellent, thank you for that, Steve. And thanks, Pete. Appreciate you taking the questions.
OPERATOR (Operator)
And your next question comes from Jonathan Siegman from Stifel. Please go ahead.
Jonathan Siegman, Analyst at Stifel
Hey, good morning, thanks for taking my question. Congratulations on the backlog build and the order haul — fantastic momentum there. Can you talk a little bit about what it means to have simultaneous satellite construction? Just how similar are some of these satellites? I know you can't share too many details on what you've won, but just what does that mean for margins building this many satellites all at once? Thank you.
Steve Altemus, CEO
Yeah. Good morning, Jonathan. The 300 series satellite is a full-on production. You hear us talking about SDA Tracking Layer tranche 1, 2, and 3. Those satellites — full production line spinning off those 300 series satellites for proliferated low Earth orbit constellation. We have production line for the 1300 series geosynchronous satellites, communication satellites; you heard recently we've launched and checked out EchoStar satellite. We've launched and are checking out the SiriusXM satellites.
You see them coming in lesser numbers but full production. And then we have a series of that 80 satellites under contract. The 300 series has the bulk in production. And then we have a series of one-off satellites. Those are our spacecraft — those are our CLPS mission landers, which we have missions 3, 4, 5, and 6 to build. We have then what we call the Nebula Orbiter transfer vehicle, which is a one-off to start with the possibility of moving that spacecraft into production later with further orders.
And then we have our satellites which we're building five of — those ALTIS satellites. So you see us production in the tens, like, you know, 50 to 70. You see those that are a handful, you know, five or so to 10. And then you see the one-offs that are like one to five satellites. And that is what the production kind of layout is across the company.
Pete McGrath (Chief Financial Officer)
Just to add one more thing to that, Steve mentioned the 300-class satellite — you know that's the one where we're producing 70 currently. The bulk of the non-recurring was retired with the first 16 satellites that were delivered to SDA for tranche one, and there's very high commonality across the bus going forward. So that is truly more of a production run of a common satellite. So that's how we can put 70 through the factory at a given time.
Jonathan Siegman, Analyst at Stifel
And when we think about the capacity for additional orders, can you layer on more in the near term, or do they get added to the back of the queue? Thank you.
Steve Altemus, CEO
We have capacity and have been putting on additional capacity not only here in Houston, where we're adding another 75,000 square feet of production space and manufacturing space to actually build the additional landers and satellites for the Loop Data Relay constellation. And also we have not yet tapped out the full 300 series production line. We have additional room to expand that throughput in that production as further orders come in. So with over a million square feet of manufacturing, production space, and office space in the company, we have ample room to grow still.
Jonathan Siegman, Analyst at Stifel
Thank you.
OPERATOR (Operator)
And your next question comes from Andres Shepherd from Cantor Fitzgerald. Please go ahead.
Andres Shepherd, Analyst at Cantor Fitzgerald
Hey everyone, good morning. Congratulations on the quarter, and thanks for taking our questions — and very exciting to see the growing backlog. Steve, I wanted to maybe touch on IM since I don't think we've touched that in the Q&A. So just curious, what are the milestones left between now and the launch window, and how confident are we in that Q1 '27 launch window? Thank you.
Steve Altemus, CEO
We are scheduled in the launch window January through March for mission three of next year on a SpaceX Falcon 9. We still have, we are in assembly, integration and test. We are doing functional testing right now on the powered up spacecraft. We have engine hot fire once it's integrated into the vehicle to do, which is where we fire the LOX methane engine on the lander to verify that all systems are functioning through an engine ignition that's yet to come here in the coming month.
We're finalizing, you know, with Mission 2 and the laser sensor challenges that we had there. We're finalizing the integrated suite of laser sensors, cameras, IMUs that get integrated on the vehicle for precision landing and hazard avoidance. Those are the technical tests that need to be done and proved correct and accurate before we are go for launch. We've had our initial flight readiness review back in July and we'll have a delta flight readiness review to check out all status of all the systems in October, which will give us our green light, ready to fly in the first quarter of 2027.
So that's what's ahead of us and we're really looking forward to that flight. And a soft touchdown.
Andres Shepherd, Analyst at Cantor Fitzgerald
Excellent. Thank you, Steve. That's well said. And maybe just as a quick follow-up, I wanted to touch on LTVs. You know, how are you thinking about the opportunities here? You know, I think it's roughly about 10% or so of the total LTV contracts that have been awarded. So just how are you thinking about these? How are you positioned? And perhaps any catalysts here that we can look forward to. Thank you.
Steve Altemus, CEO
Yeah, the LTV contract was a massive award. Up to three vendors that could bid on that, $4.5 billion worth of value over a period of about 10 years, I think with a five-year option. The very small initial awards were issued back in May, if you recall. And talking to Moon Base Initiative folks at NASA, there's a lot more activity left to go on LTV as they build greater and greater capability. And we'll wait to see when those task orders come out and we'll bid on those and move that forward.
I think the long pole, or what's driving the actually slow pace of the LTV, is the fact that there are no heavy cargo landers available to fly the larger LTV, which was what our primary bid was. So we're working heads down to build a heavier cargo variant of our Nova-class lander that can accommodate LTV flights in the future. And that's part of the roadmap that NASA Moon Base is looking for in phase two. And that's where we're positioning ourselves.
Andres Shepherd, Analyst at Cantor Fitzgerald
Excellent. Thank you very much and congrats again on all the great progress. I'll pass it on.
Stephen Zhang, Head of Investor Relations
Thanks, Andres.
OPERATOR (Operator)
And your next question comes from Suji DaSilva from Roth Capital. Please go ahead.
Suji DaSilva, Analyst at Roth Capital
Hi, Steve. Congratulations on the strong backlog growth here. Just curious, I don't know if you talked, Pete, about the pipeline, but I mean I'd imagine with all the backlog conversion, unclear what happened with the pipeline, but I'm sure there's a lot of opportunity ahead of you. Any quantification or understanding of the pipeline expansion year as well?
Steve Altemus, CEO
Yeah. Suji, good morning. I did talk briefly about the CLPS opportunities with Griffin in the first question. You know, we have four opportunities this year to bid on additional CLPS missions. Recently there was a call, in addition in our communications and networking area, there was a call for commercialization of a portion of the Tracking and Data Relay Satellite service network, TDRS. We bid on the TDRS replacement that's in Ku-band, Ka-band. And so we'll wait and see whether or not we'll receive that award.
That comes in three phases. And then there's some other strategic partnerships we're looking at in terms of orbital data centers that we bid, and we'll wait to hear whether or not our experience in high-power satellites wins the day and we win those development efforts for orbital, on-orbit data centers. So those are some of the major activities. I think there's one other in national security space that we're really keenly looking for. That's Andromeda.
It's called the RGXX. It's a GEO, highly maneuvered geosynchronous orbit satellite for national security space. And so really exciting opportunities in front of us, all major programs. And that's yet to be seen in our backlog.
Suji DaSilva, Analyst at Roth Capital
Sounds good, Steve. You guys are very busy.
Steve Altemus, CEO
Certainly.
Suji DaSilva, Analyst at Roth Capital
And then my other question is around the pipeline for the Altus satellites, two to five in ’28 roughly. Do those satellites imply four separate missions? One per, or is there ability to take multiple in a mission? Any color there would be helpful.
Steve Altemus, CEO
Yeah. So initially, Suji, what we had planned was a launch of Altus 1. And then our missions to fly additional satellites were opportunistic to align with the CLPS awards that we had received, and we would rideshare two additional satellites on every lander mission. What that did in effect was while it got the next two after Altus 1 up in orbit sooner, our fully operational capability was delayed out to 2029 or 2030. When we spoke to NASA, they were interested in putting on the fully operational capability.
So we pulled the satellites off of our CLPS missions, are negotiating with NASA for a dedicated launch to fly all four simultaneously on an independent mission to take all four to translunar injection and then fly all four out and deposit them in lunar orbit all at once to get a fully operational capability in 2028. That's the acceleration that we're talking about. So very excited about that and getting that network up and running in time for the Artemis missions.
Suji DaSilva, Analyst at Roth Capital
Great, helpful color.
OPERATOR (Operator)
Thanks, Steve. And your next question comes from Addison Yu from Deutsche Bank. Please go ahead.
Addison Yu, Analyst at Deutsche Bank
Good morning. Thanks for taking our questions. One, to start off housekeeping: the $600 million in GEOsats for the three GEOsats, is that for the C-band related to the C-band reallocation, or is that separate?
Steve Altemus, CEO
Yeah, I have that yet undisclosed, Addison. And in the future we'll come out and give you a little more color on that one.
Addison Yu, Analyst at Deutsche Bank
Okay. And then secondly on the cash flow, I know you talked about some of the drivers for that. How are you thinking about it in the second half? Should we expect some of these headwinds to continue? Does the working capital get better? Just, I don't know if you can provide some rough numbers around how we should be modeling the burn.
Steve Altemus, CEO
Yeah, I'll give you a little color around that. So when I look at the current OPEX and cash burn, there are a couple of anomalies that are occurring. We have, as part of our transaction agreement with Lantiris, we have a slight uptick in RSUs or share-based comp that will exist through this year, through the end of this year, as part of our retention agreement on certain employees as part of the transaction. Those will tick down next year. But we are seeing that increase this year, which is causing some of that OPEX growth.
So we do see, I'd say, something more of a steady state through the end of the year if you take all the adjustments out. The other benefit we're seeing too is our new CLPS contracts now have milestones lined up with the SpaceX payments. The one you saw in the second quarter, which was specific DIAN 4, did not. And so we'll see cash more match those significant events now on the SpaceX payments for CS8 and CT4. So I think those will balance out the cash as well.
So, you know, you take the anomalies out, I think you're pretty much at a steady state. And then that's probably a good way to look at it.
Addison Yu, Analyst at Deutsche Bank
Great, thank you.
OPERATOR (Operator)
And your next question comes from Greg Pendy from Clear Street. Please go ahead.
Greg Pendy, Analyst at Clear Street
Hey, thanks for taking my question. Just, you know, on the NSN contract, can you give us kind of what the most likely cadence right now is to get to five satellites? And also, you know, what does the demand right now look like in the environment in terms of, you know, the pay-by-the-minute service? Thanks.
Steve Altemus, CEO
Yeah. So as you heard in this introduction, we're going to fly the Altus 1 first communication data relay satellite on Mission 3 in 1Q27, will then follow it up with four additional satellites. Our complete constellation includes five satellites around the moon that do communications in Ka-, X-, and S-band. Those will all be deployed and operational in 2028, is the plan. We'll have a pay-by-the-minute structure with a minimum set of minutes for data relay.
But then there's an additional position, navigation, and timing service revenue as we add the PNT—the navigation and timing—which will be a kind of a broadcast, always-on service that will be supported by the government to keep that signal processing for any missions that go around the moon. So that's kind of the two-phase structure for the business in terms of payments and revenue, and the timing being the 2028 activation of the full operational capability.
Greg Pendy, Analyst at Clear Street
Okay. So, I mean, I guess what I'm saying is that's ahead of the prior thought process, which I think was just one and then a mission in 2028. So is that a reflection that there's significant demand in the market, I guess, for the services?
Steve Altemus, CEO
Yeah. What's really important as part of the NASA ignition event was to align all of the systems that, pardon me, all the systems that have to support Artemis IV, which is humans on the Moon, in 2028. Our fully operational capability was opportunistic, flying two birds on the next two subsequent missions after Mission 3 CLPS missions, which extended us out into July of 2029. So we needed to pull those back in. And it really wasn't a constraint for how we build the satellites.
That wasn't a challenge. It was when we could get launch capacity to put those in orbit. And so by renegotiating with NASA the launch strategy for those satellites, we're able to pull full operational capability back to the left into 2028 to support the Artemis program. Yeah, and just a note, we're seeing some benefits in that too because now we're buying four ship sets and we've got good commonality in purchasing as well as assembly and integration.
So it actually is becoming more beneficial from a business perspective to accelerate as well.
Greg Pendy, Analyst at Clear Street
That's very, very helpful. Thanks a lot.
OPERATOR (Operator)
And your next question comes from Michael Leshock from KeyBanc Capital Markets. Please go.
Michael Leshock, Analyst at KeyBanc Capital Markets
Hey, good morning. Just wanted to ask, on lunar landers and given NASA's accelerated demand for landers, how quickly can you produce a Nova-C with your current footprint? And do you see any need to expand capacity further on the lander side to support NASA's initiatives? And then also how does that compare for the Nova-D production expectations? Thank you.
Steve Altemus, CEO
Yeah, we recently bid a mission called CS8, which was exactly what you're pulling on, is how do you get to production lander? You know, that's the whole idea here is no longer building bespoke landers for each individual mission, but how do you get the production rate up? And we bid a 26-month development and build time for CS8 and that'll fly in 2028. That's for the Nova-C. We do have a Nova-D class, you know, roughly 500 kilograms of payload to the surface under contract in CT4.
And we're looking at building two in a row, or two in parallel is a better way to put it, in our facilities here, anticipating an award for a second Nova-D in the same timeframe, which is the 2029 timeframe. So we have, about a year ago or so, began a facility expansion in anticipation of growth of the Nova-D. And so those facilities are coming online now. We finished half of the expansion here and we're completing the machine shop and manufacturing area right now.
And that'll accommodate this increase in cadence and throughput through the factory to support the heavier cargo missions.
Michael Leshock, Analyst at KeyBanc Capital Markets
Okay, great. And then just following up on NS&S as you look ahead to fully operational revenue in 2028. Given the demand you talked about and timelines, what do you see as kind of the ballpark opportunity size for that program on an annual basis as it matures?
Steve Altemus, CEO
Well, we initially bid about half a million minutes a year for that operational capability. We'll have to wait and see what the ultimate demand is. I think that demand for that network will span across civil space, commercial and national security space with all the activity that's projected to be in and around the moon. So what I quote in terms of half a million minutes was an initial bid into a government requirement on the civil side. And so I can't quantify the top end of that, but I can quantify roughly the bottom end at about a half a million minutes of time.
And that doesn't include, like I mentioned, the PNT broadcast signal, which is an additional over and above the pay-by-the-minute model that we're anticipating.
OPERATOR (Operator)
Your next question comes from Alex Preston from Bank of America. Please, go ahead.
Alex Preston, Analyst at Bank of America
Hey, good morning, guys. Thanks for taking the question. Just curious, going back to the sort of national security Golden Dome side of things. The additional AMD T3 award supporting L3, it's clear that you guys are gaining traction on the bus side of things. I'm curious, as these programs begin to continue to scale, is there appetite to get involved more on the payloads and really come to market as an end-to-end supplier, or I guess maybe more broadly, what is the roadmap for that national security business look like given the recent wins?
Steve Altemus, CEO
Yeah, very good. I think you'll see us emerge as a prime contractor here. We do work with L3 as a sub to provide the bus, which we're going to continue to do. But as we move into other opportunities, you'll see us bidding as a prime on a lunar surveyor, supplying all the imagers and the bus for mapping the moon and then integrating those data products, downlinking them through our networks, bringing them back to our data repository and doing the analytics on those data products and providing derived products and digital terrain maps of the moon.
So as I think about this, the prime aspect of it is not just providing a bus with the sensors, but integrating that bus and the sensor into our platform of communications and analytics to provide the data products and information that the government's going to want. And that's where you'll see us emerge as I talk about this, selling the infrastructure as a service. And then other places where we're working now to incubate the Nebula Orbital Transfer Vehicle, we'll take that and provide more of an integrated solution in the future, I anticipate, in terms of providing additional transfer vehicles with payloads.
And also as you think about the satellite constellation around the moon, we provide the satellites, we already provide the communications package in X, S and K band, and there's additional payload space on those birds which will integrate additional payloads to create a more fulsome offering in the data constellation. So we are moving towards being that prime and integrating the sensors with our buses as we move forward. But right now in the Golden Dome area, we're a subcontractor supporting L3 on the buses.
Pete McGrath (Chief Financial Officer)
Yeah, just a comment. As you see us rolling out those ATPs that we're talking about and as they transition to contracts, there are some in that mix that we are a prime contractor on that you will see as we roll those out.
Alex Preston, Analyst at Bank of America
All right, thanks for the call. I really appreciate it.
OPERATOR (Operator)
And your next question comes from Austin Moeller from Canaccord. Please go ahead.
Austin Moeller, Analyst at Canaccord Genuity
Hi, good morning. I was just wondering if you see an opportunity, given the recent additions to the ground stations and the ground network, to U.S. Space Force programs in providing data uplink or downlink, and TT&C as the growing Space Force fleet continues to expand.
Steve Altemus, CEO
Good morning, Austin. Yes, in fact that's the case and we've been having some discussions about that not only here in the U.S. but in the U.K., and we can bring down the full raw data stream and then patch that data stream to wherever that needs to go to give it to any customers that are interested in looking at that data stream. So the network is available for users in the cislunar space arena and for space domain awareness. And we're talking about that presently and actively with those customers.
Austin Moeller, Analyst at Canaccord Genuity
Great. And can you comment on where we're at on Nova D? Planning, construction, R&D process, what capital might be required to support this, and how much might be customer-funded R&D and CAPEX?
Steve Altemus, CEO
Yeah, for Nova D—and that's our class of lander that, say, 500 kg to the surface of the moon of payload—that is currently essentially fully funded to take that development to flight and land on the moon. The two areas that may take investment in CAPEX and technology IRAD would be when you're talking about moving to a three-engine configuration with a fully gimbaled package of three main engines that gets you to at least one metric ton delivery to the surface.
And then NASA is calling for landers that can carry 2 to 5 metric tons to the surface; that would require an upgrade to the engine itself and maybe even an e-pump or electric pump that goes with that engine package. And so those are areas we're looking at now to provide a roadmap of where we're going to make technology investments in the future heavy cargo class. However, the 500 kilogram Nova D is funded under contracts today and there are opportunities, like I mentioned, to rebid that class of lander for yet a subsequent mission so that hopefully we could build two in parallel.
So that's kind of what we're doing and coming up with that roadmap of where those technologies need to be matured to get to the heavier and heavier cargo, which will be an essential point or piece of CLPS 2.0.
Austin Moeller, Analyst at Canaccord Genuity
Awesome. Thanks for all the details.
OPERATOR (Operator)
And your next question comes from Jeff Van Re from Craig-Hallum Capital Group. Please go ahead.
Vijay, Analyst at Craig-Hallum Capital Group
Hey guys, this is Vijay for Jeff. First on just IM4, is there anything you can provide us in terms of timeline? I think originally that was planned for 2027, if I remember correctly, but obviously with how IM3 has moved around. Just wondering if you have any update there.
Steve Altemus, CEO
Yeah, IM4 is still on the books for late 2027 and still on track. You heard us talk about EAC as we shift resources over from IM3, which is nearing completion, to IM4—slide up or there. But everything seems to be on track so far for IM4.
Vijay, Analyst at Craig-Hallum Capital Group
Great, glad to hear that. And then as far as free cash flow, I think you guys mentioned that you expect it to improve kind of throughout the second half. Do you guys have a target time frame for when you want to hit free cash flow breakeven, or is it just kind of sequential improvements each quarter?
Stephen Zhang, Head of Investor Relations
We haven't guided yet on free cash flow, so we're not providing a formal date. Although I will say that quarter over quarter we've been improving gross profit. And with the exception of the EAC this quarter, I think we're seeing good EBITDA growth as well. And so I think our near-term focus is EBITDA positive. And then I think the next step is definitely moving into free cash flow positive.
Vijay, Analyst at Craig-Hallum Capital Group
Got it. Thanks for taking the questions. Thank you.
OPERATOR (Operator)
And there are no further questions at this time. And I would now like to turn the call back over to Steve Altemus for the closing remarks. Please go ahead.
Steve Altemus, CEO
Well, thank you everybody for attending today and for your questions. You can see Intuitive Machines continues to diversify. We saw record orders across all of our customer channels and we look forward to executing while also expanding backlog even further throughout the rest of the year. So thank you very much,
OPERATOR (Operator)
Ladies and gentlemen, thank you all for joining. And that concludes today's conference call. All participants may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
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