Quarter 1

Q1 2026 Earnings Call — May 7, 2026

Analyst Jeff Benry (Craig Hallam): Congrats. Numbers look good. So just a couple questions. Brian, as it relates to the pipeline, can you talk to – you've talked about these pilots coming in, and then obviously customers are getting a sense of Gen 3 and converting. Can you put a little finer point on the quantity of pilots coming in the top of the funnel – Give us a sense of the magnitude of the pipeline, how many have converted, how many are there, how many you've added in this last quarter, any quantification about funnel and particularly pilots.

Executive Brian (Title): Yeah, you may have seen this week we had a release on securing our next wave of customers. This was in the scale of a couple dozen. And, you know, we're seeing that momentum really pick up. So they all start with, you know, a six figure type pilots. And you're seeing as a result that moving into seven and eight figure subscription contracts, they're all in different points in the pipeline. So it's difficult to kind of quantify, um, timing and all of that, but, uh, we're just seeing strong momentum and the pipeline's looking good.

If I could follow up on that, is there anything you could share with respect to what I'd call the mega deals? Obviously, you've got a lot of sovereign momentum out there. A number of players in the space are talking about nine-figure deals working through their pipe. Can you give us any sense of the frequency in which you're seeing those and seeing those work through your pipeline?

Executive Brian (Title): Yeah, I think we announced a $30 million one-year subscription contract. That started with a six-figure pilot project about six months ago. And we are seeing a lot of that type of activity, particularly as customers now have had an opportunity to evaluate Gen 3 performance tied to the operational flexibility, the timeliness, and the quality of the imagery, and how that can integrate into their operations. And so these are major customers. And we're seeing a pretty strong pipeline of those worldwide. It's hard to, again, quantify the timing of some of these deals. But you can see we also announced another large deal as well. So a lot of momentum with these larger contracts.

Yeah, real nice traction on the signings. Just two other quick ones, if I could. Spectra and Analytics, what are you seeing in terms of new customer attach rates on the Analytics side? What do you anticipate based on pipeline?

Executive Brian (Title): Well, Jeff, that's why our pipeline and the conversion rate is going so well. It's not just the attachment rate. It's the fact that all of these things are integrated into the service. So it's highly flexible access to dynamic monitoring and tasking with the AI integrated as part of the service, and then the short delivery timelines, which are really critical to what, as you can imagine, that things are happening around the world today. It's the combination of those three things that has us differentiated in the market and what customers are responding to. And as I mentioned in our remarks, our AI is operational and it is embedded in our customer workflows. And so it's not just a tech demo or some offline processing capability. It's happening in real time and it's delivering real information and intelligence.

Yep, got it. That's helpful. And then just lastly, on Gen 3, I know maybe sometime last year you were thinking eight Gen 3s early-ish in the year. It looks like you're now thinking that later this year, if I caught your comment in the script. Just curious to what extent that influences your ability to book customers, influences your ability to assign incremental revenue if you're capacity-constrained in any way, assuming it doesn't present any gating factors. But we're just kind of trying to figure out how I should think about that capacity and its potential influence on your ability to sign new business. Thanks.

Executive Brian (Title): Yeah, Jeff, as I said, we're on track to get eight up this year. The real inflection point, as I'll say, in customer adoption was the performance of Gen 3. I've always said once we have a few up there and get to a daily service, it provides customers a very good experience. So that's now happened. And the growth and what you're seeing in that line of business is not limited by our capacity and we're in good shape this year with what we have and we'll just continue to grow the constellation.

Analyst Timothy Horan (Oppenheimer): It's not compared to what you've done historically and, and, you know, how do you think that's going to ramp? And are there any kind of new areas or new customers that are there surprising you or, you know, new use cases? And any color would be helpful.

Executive Brian (Title): Yeah, I mean, the customer sales and adoption cycle is not surprising. You know, we've had very good visibility in our pipeline, and there has been – a lot of interest by a lot of major customers in our Gen 3 capabilities. So now that we're getting over the hump on that and they're getting firsthand experience with it, we're just seeing a natural growth in that business. As we mentioned in our remarks, we announced several large contracts, but we now are expecting the space-based intelligence and AI services, which is our primary subscription business, to grow over 50% this year. This is our high margin business, so you're also seeing how that is translating directly into improving EBITDA margins and performance, particularly because that part of our business is delivering about 80% type gross margins. So no surprises in the sales pipeline. If anything, current events are accelerating opportunities as the demand for this type of capability has never been stronger. And we're in a good position where we're now just converting the pipeline into new contracts.

And can you talk about the sovereign satellite capability or seeing more interest there?

Executive Brian (Title): Yeah, as I mentioned, we are seeing demand increase. There is major investments happening worldwide in space programs by governments around the world. Uh, uh, we're seeing both, uh, opportunities for large constellations and opportunities related to countries that are just getting started. Uh, we have seen a pickup in interest around gen three cause it's proven, uh, on orbit performance, uh, at this 35 centimeter capability is, uh, is a really important factor as they're looking at other options in the market. And our ability to manufacture Gen 3 at scale and also deliver that under very competitive timelines is an attractive offering. So we have a lot in the pipeline. We're pursuing a number of opportunities and moving them through. And we expect this to be picking up as we go out through the year and into next year.

Lastly, Henry, can you give us a sense of the revenue, quarterly revenue, or maybe exit run rate at the end of the year? How should things pace? Is it linear? Is it hockey stick? Any color there would be helpful.

Executive Henry (Title): Sure, Tim. We'll be following the queue this afternoon in there. You'll see how we've got our backlog. Our backlog, full backlog is about $351 million as of March 31st, but that does not include some of the large contracts that we signed in early April. So that would be total backlog, including those, about $380 million. Of that 380, we would expect about 90 million to be already booked for 2026. There will be some step functions in there, and we've got a lot more pipelines coming in as well. So we do expect the second half of the year to be a much stronger than the first half. And as we go, we do expect to get to that 100 million run rate by the end of the year.

Analyst Edison Yu (Deutsche Bank): Hey, this is Laura for Edison. Thanks for taking our questions. So, firstly, I want to ask about how the Middle East conflicts impacting your growth. Has that led to, like, large increasing usage year-to-date? And how do we see that trend continue?

Executive Brian (Title): I would say, if anything, we've already had a very strong sales pipeline for Gen 3 capability. And you're seeing that we're converting that into long-term subscription contracts. I think, if anything, the conflict in the Middle East is amplifying for other customers the need to lock in long-term contracts for capacity in the event these types of crisis events occur. And that's been traditionally how the market operates is because we serve the national community, national security community, the business is not driven by singular events. It's driven by day-to-day needs for a range of national security missions. So, you know, we don't see ebbs and flows around these events, but if anything, they amplify the importance of entering into these long-term contracts. But also I will say, you know, the capabilities that we have are, do shine in these type of events when you're really trying to, you can see the importance of really rapid and flexible intelligence that these operations need to monitor what's going on.

Okay, got it. Appreciate it. I also want to follow up on your AI efforts. So how should we think about the AI roadmap over the next 12 to 24 months? And what are the priorities there? And would you try to bring some AI partners on either the model side or some cloud platform, et cetera?

Executive Brian (Title): Yeah, I think the first major point is our AI is a proprietary capability. It was purpose built for real time space-based intelligence. So it's, um, um, it was really designed to operate, uh, in customer workflows at scale and at speed. Uh, so we will continue to expand, uh, over time. The, uh, our ability to not only detect, uh, and classify important, um, objects and things of that nature, but then how we start to see patterns and changes that are important to customers. That's really the bottom line. AI is really just an enabler, but it's really all about providing that actionable intelligence to decision makers at rapid timeline. So we do incorporate a lot of third party technology, but at the core, it's our proprietary capabilities around this mission set that has us leading in the market.

Okay. That's helpful.

Analyst Austin Muller (Canaccord Genuity): Hi. Good morning, Brian and Henry. So just my first question here. Is there a critical mass of Gen 3s that need to be launched in order to get access to more contract dollars from either EOCL or LUNO? Or is it just a matter of the 26 budget being in place and task orders going out now from the program executive offices?

Executive Brian (Title): Yeah, good morning, Austin. Yeah, I would say our growth in that line of business is not dependent on a rate of launching satellites. We've got a core amount of capacity on orbit. And you have to remember, when combined with Gen 2, you have over 15 satellites up there that are providing dynamic hourly monitoring capabilities. So now that Gen 3 is proven, we're just seeing a ramp in those contracts. More satellites means more capacity and improved frequency and a very high resolution capability. We don't have anything right now that will be triggered by more satellites. We'll just continue to grow.

Okay. And can you comment on how Spectra's AI object classification capabilities compare with some of your peers that have expertise in mapping and data analytics?

Executive Brian (Title): I'll just say that, as I said in my remarks, we are delivering this operationally today. They've been validated by major defense and intelligence customers. So they trust the results that we're delivering and we're constantly improving and refining the training of those algorithms. The models are operational real time. So that's a major differentiator. It's not an offline process. But all I can say is you've seen our performance on Luno in the past and winning contracts because of the performance of our AI. And now you're seeing it working operationally. And I think that should give you a sense of why that capability is winning in the market right now.

Excellent. That's very helpful. Thank you.

Analyst Greg Burns (Sedoti): Just to follow up on the last question around EOCL, does the updated guidance still contemplate revenue levels at their current level where they exited last year, or are you expecting that to build back up to where they were prior to when they were haircut last year?

Executive Henry (Title): Yeah, I think the assumption we have now is they remain at the current levels, the levels we exited last year. There are multiple funding lines that were in the fiscal year 26 budget for commercial imagery that are in the process of being allocated to specific programs and contracts and we're actively following that process. We'll see better visibility um throughout the quarter but for now we've been conservative um assuming the levels we exited the year at um it's also important to note that as we talk about you know we we're seeing the increase now um on that on that business line and uh these large contracts we were winning have significantly diversified our customer base um and, you know, international is now a much larger percentage of our revenues. So we've minimized the impacts of some of the annual budget effects of the U.S. government.

Okay, thank you.

Analyst Sheila Kayalu (Jefferies): Good morning, guys. It's Billy on for Sheila. And thanks for taking the questions. Just to continue on the international side, there's a lot of momentum there. And how do you think about the pipeline and untapped opportunity going forward? And how do we think about progression of current customers expanding versus new customers?

Executive Brian (Title): Yeah, I think we're seeing growth from a couple of dimensions. We are expanding the revenues with customers we've had for a long time as they start transitioning and scaling the use of Gen 3. So we're seeing that. And then in parallel, we're adding new customers. And I talked about that earlier. And then we're continuing to grow the pipeline to continue bringing a wave of those new customers into service. The other thing I'll mention is the quality of Gen 3 is demanding a higher premium than Gen 2 because of the 35 centimeter capability. So the dollars per sold capacity are increasing. You're seeing an expansion of existing contracts. We're seeing new customers coming online and then the translation of those new customers in small initial pilots transitioning into seven and eight figure type subscriptions. So there's multiple growth factors as we bring new and existing customers into higher levels of service.

Great, thanks. And then just like following up on that, in terms of international mix, like it's higher now. How do we think about that going forward? And how do we think about domestic versus international contributing to the, you know, 50% plus growth for the rest of the year?

Executive Brian (Title): Yeah, as I mentioned earlier, you know, we're, we've assumed the U.S. government EOCL kind of maintains its current level. The majority of the growth is coming internationally. Although we did announce a new subscription contract this quarter from another U.S. government agency. That's leveraging the capacity of our Gen 2 constellation. So we are seeing new opportunities emerging with the U.S. government as well. But the revenue mix will be growing significantly internationally as compared to the U.S. government.

Analyst Chris Quilty (Quilty Space): Thanks. I wanted to follow up on something that was already discussed, just regarding a typical customer journey. Is that, you know, accelerating, slowing down, staying the same? Are there any reasons that you're seeing a change in how quickly they're converting?

Executive Brian (Title): Yeah, we're seeing an acceleration. As I mentioned, I think getting Gen 3 operational at a daily service level and putting that in the hands of customers to experience that firsthand is driving an increase in the pipeline, and it's increasing the rate at which things are moving through the pipeline. And it's really... It's fundamentally based on the level of service that's available to these customers when combining 35 centimeter imaging with low latency, flexible tasking operations with integrated analytics. That's a first of its kind capability in the market that's giving customers operational intelligence faster than ever and a lot of flexibility in how to leverage that capability across a lot of different mission sets.

So it's not just about the pixels it's about the level of service and how that's being integrated and used in a dynamic environment.

Gotcha so, um, for Henry, I mean you did 16 and a half million in the space based intel and ai in the first quarter which is the average of what you did all last year so obviously to ramp to 100 million you're going to see a significant quarterly step up is that due simply to the contracts you have in backlog and those just you know falling in or is there a higher level of book and ship type business that you expect this year?

Executive Henry (Title): Well thanks Chris, we've got a couple of things that are going to help that step up you recall we just announced that roughly 30 million dollar one year subscription contract. If you take that and divide that by four, you've got a pretty big step up on that one contract alone. That contract we signed in early April, so that should be kicking in here in the second quarter. So then when you take a look at our total backlog, we've got a lot of that already booked, and we've got some additional renewals coming on board as well in the near term. So we feel pretty comfortable on it. We're going to get a step up here in the second quarter, but bigger step ups as we go into the third and fourth.

Gotcha. And remind me, the backlog in terms of the breakdown, I think you said 90 million to ship this year and which business segments that falls across?

Executive Henry (Title): We don't break it down between the different business segments and business elements. But for the most part, a lot of that is Gen 3 subscription. Most of it is Gen 3 subscription.

Gotcha. Brian, also a follow-up on the EOCL. Back when that was awarded like three years ago, I was always under the impression that, you know, the uptake of the revenue, because it didn't have, you know, a material impact at the time, but that the upside to the contract was based on Gen 3 capability being added into the contract. Is that not correct? Are they simply paying on the number of satellites and volume and not on resolution improvement?

Executive Brian (Title): Now, Chris, if you remember when it was originally awarded, 10-year contract, heavily back-end loaded around Gen 3 services that grew over time. So the initial service levels were primarily around Gen 2 capacity. And that was really the subscriptions we've been operating under the last couple of years. Gen 3 is they are looking at integrating gen three into that subscription this year. There's a lot of interest in that. And as I said, we're watching how this, uh, the funding from the fiscal year 26 budget is going to flow through. Um, but, uh, we are at a point with gen three, that that's an attractive offering to the U.S. government. And, you know, we'll have better visibility in that. I think by the time we get through the second quarter, but, um, there's a lot of interest in Gen 3 and the contract is primarily back-end loaded for that capability.

Okay, great. And Brian, you mentioned earlier, you know, the latency of the content delivery and goals to improve it. Can you talk about like what would be your, you know, sort of mid to long-term goals for where you think latency should get? And, you know, does that drive higher revenue as you drive the latency down, or is that just becoming the table stakes of being in this business?

Executive Brian (Title): I think there's two ways to think about it. I think low latency is a requirement these days. We're responding to dynamic events on the ground. And Chris, as you know, this is a purpose-built capability around responsive tactical operations. So to us, it is a required part of the service, and it's what customers are asking for. In addition to the basic commercial service, we also have the ability to directly downlink into customers' environments, and that brings that down into minutes. As well and so what you'll see from us continuing is just a constant improvement in that latency not only in the imagery tasking and delivery timelines but you know as we're processing more and more in ai we're doing that in real time so you know imagine we're interrogating this imagery and looking for objects and activities across a lot of things in parallel. But we see it as really a core part of our offering, and it's what customers are really looking for.

Got it. And maybe if I can, a final question. I know you don't do backlog breakdown, but I'm going to ask you a question on pipeline breakdown. Can you just give us a general sense, when you talk about your business pipeline, either where you're currently seeing the largest area of pipeline or alternatively, where you're seeing the greatest growth in pipeline opportunity?

Executive Brian (Title): I think proportionally, we're seeing growth in all three aspects of our business. We're seeing growth in the pipeline around our space-based intelligence and AI services, as you're seeing that translate into new contract wins. I already talked about the mission solutions pipeline as the demand for sovereign is increasing and we're seeing an acceleration of those types of programs. And we're also seeing a lot of interest in the advanced technology programs. As you know, Chris, you know, as well as anybody, space is a long game. And so customers are understanding that it's not only about what you have now, but where this is going to be in the future in the next three to five years. So we're seeing a step up in that part of it as well. And we see that as a key part of our strategy is leveraging those investments and then translating that into the innovation and a leadership position in our space portfolio. So we're seeing growth across all three aspects of the sales pipeline.

All right. Great. Thanks, guys.

Analyst Scott Buck (Titan Partners): Hi. Good morning, guys, and thanks for letting me jump on. I think most of my questions have been answered, but just one. Brian, as demand for sovereign increases, are you seeing more?

Executive Brian (Title): I think, yeah, there are a lot of – there is increasing competition, but they're from a number of companies that have really not demonstrated proven operational performance. And as I mentioned in my remarks – Having a capability like Gen 3 that is delivering the quality of 35 centimeter imaging at the level of performance that we're seeing, and then having that on orbit and proven and operational at the economics of that spacecraft is a really compelling proposition for customers. As you know, these types of customers aren't going to risk their long-term roadmaps on unproven space capability and so we feel like we have a very good advantage there. Gen 3 worked right out of the box and it has been exceeding expectations and that is giving customers a lot of confidence in our ability to support their long-term program so we feel we're really well positioned. There are not Gen 3 is a best-in-class capability, and we're seeing that in the opportunities that are coming at us.

Perfect. Well, that's all I have, guys. I appreciate the time. Thank you.

Analyst Preston Graham (StoneGate): Hey, guys. Good morning. Preston's sitting in for Dave. You touched in the prepared remarks on land and expand. And so I guess for customers and pilot programs for Gen 3, are most using the broader, full analytics suite from the beginning, or do they typically start with imagery and then expand into analytics over time?

Executive Brian (Title): Yeah, good morning, Preston. Yeah, I think the way you have to think about it is they have access to a platform, and that platform has a lot of different capability that they can tap into. And so they can task imagery from Gen 2 and Gen 3 satellites. They can also, as part of that tasking operation, request different types of AI-enabled analytics as part of the natural workflows. So what we typically see is customers start with the basic operations, which is dynamic tasking. And then as they integrate that, then they start adding the AI analytics as part of the service. I think it's an important comment in that it's a full service offering that we have through the platform. And again, that's not typical in the market. So that's another factor that's driving the increase in our demand and the customer traction.

Got it. So you wouldn't even say it's not like 35 centimeters. The quality of the imagery is the main driver. It's the platform. It's the whole suite. It's all of it. It's all of it. 35 centimeter is an important aspect because very high resolution matters. The more resolution you have, the better insights you get from the imagery, but also the level of analytics you can extract with AI goes up as well. So but I'll also say timeliness matters and time diverse collection throughout the day matters as well. So it's a combination of all those things. And keep in mind, you know, just a few years ago, this went from really commercial being mapping capabilities to now we're in dynamic monitoring with real time intelligence from space. So it's a major paradigm shift around our purpose built capabilities.

Understood. And then maybe just one final one. You've talked about in the past kind of vertical integration gives you better visibility into production and deployment. Are there any kind of current supply chain constraints that could impact Gen 3 production or launch timing or still feeling good about the roadmap?

Executive Brian (Title): As I said, we're on track. We did bring Lea Stella into the company over a year ago now to improve our visibility into supply chain and streamline production operations. That's going very well. We have ordered long-lead supply components so that we can maintain a regular cadence of production of Gen 3. And through that cadence of production, we can use those satellites to expand our commercial constellation or accelerate deliveries on mission solutions contracts which is a competitive advantage in the market so the vertical integration we've achieved is paying off and you're going to see that scale as we move throughout the year and in the next year.

Got it. Thank you for taking my questions.

Executive Management: There are no further questions

at this time.

This concludes today's call. Thank you all for attending. You may now disconnect.

Quarter 2

Q4 2025 Earnings Call — February 26, 2026

Analyst Edison Yu (Deutsche Bank): Good morning, everyone, and thank you for taking your questions. First, I want to ask about the new eight-figure sovereign deal. I guess it's falling under Mission Solutions now. Can you give us a little bit more detail about both in terms of the customer, the pacing of how that revenue gets recognized, and more generally, the pipeline of similar opportunities going forward about deals like this or structures like this?

Executive Name (Title): Sure. Good morning, Edison. Thanks for the question. Yeah, as we outlined in our remarks, this is a, we'll call it an initial contract for a Gen 3 satellite that includes some ground capability and software as well as multi-year support services. It is bundled with a commercial contract for subscription-based access to our commercial constellation and AI services. That means that these types of contracts support both of those elements of our business. In this case, we were able to, as Henry mentioned, recognize a good portion of revenue of that in the fourth quarter as we were able to make immediate deliveries. The strength of this is that we were able to pull a satellite off the production line and accelerate the customer's schedule. So we will move forward on their schedule to launch the satellite as quickly as we can, either later this year or early next year. So we are seeing a general trend where a number of these types of customers will start with a few satellites with ambitions to expand much further beyond that and grow those over time.

Analyst Edison Yu (Deutsche Bank): Just to follow up, do you have a sense of how many of these type of programs or deals are in your pipeline? Is this something that could be multiple countries, dozens of countries? How does one think about that?

Executive Name (Title): Yeah, I think we're building a very strong pipeline. We're seeing this type of trend across a number of regions in the world and with a number of customers in each region. So I think, Edison, the way we think about this as a TAM expansion opportunity, maybe to put this in some numbers, about maybe less than five years ago, there were under 12 or 15 countries that had sovereign space capability. Now there's over 60. And many of them are in the early phases of building out their capability. This is a large and expanding market, and there's a number of customers that are coming into this with very little initial capability that we're able to help accelerate their long-term plans.

Analyst Edison Yu (Deutsche Bank): Patrick, if I could just sneak one more in. Would you expect to announce another similar type of deal this year?

Executive Name (Title): As I said, we have a very strong pipeline. We have a number of deals moving through the pipeline. Timing of international deals has always been challenging to predict exactly. And just also keep in mind, these tend to be lumpy. So, you know, these deals will come in and then you'll see these spikes in revenue as we recognize revenue, depending on the nature of the contract.

Analyst Jeff Van Ree (Craig Hallam Capital Group): Great. Thanks for taking the questions. Maybe to start with you, Henry, in terms of the guide, if I look at the low end of the guide, what has to happen here to hit that in terms of new bookings versus already having that in backlog?

Executive Name (Title): We've got a strong Jeff. Thanks for the question. This is Henry. We've got strong visibility. We do have a backlog, as we've said, maybe about $345 million. We've got nearly 75 million of that coming through in 2026. We also have renewals that are not yet in there. So that's kind of our standard modus operandi. So we've got strong visibility to get into the low end and actually into all the way into the full range there.

Analyst Jeff Van Ree (Craig Hallam Capital Group): Just to be clear, is the low end, assuming, I mean, can you give a ballpark of what kind of new bookings you need to make that, or is it already in the bag?

Executive Name (Title): Well, as I said, we've got a fair bit of renewals in there, so we feel pretty comfortable. Obviously, we wouldn't put a low end out that we didn't feel that we could hit.

Analyst Jeff Van Ree (Craig Hallam Capital Group): Got it. And then, Henry, you mentioned on the guide in terms of linearity, assume it's back-end loaded. Can you expand a little bit? You had this large eight-figure customer. It sounds like a lot, maybe most of that revenue fell in Q4. So how much of that does not recur in Q1? Just trying to get a sense of the step down and then how to build the ramp through the year.

Executive Name (Title): Well, I guess the way I would look at it, if you look at us historically over the last number of years, we've usually been in kind of like the – 45, 40, 45, less than 50% in the first half of the year, and 55 to as much as 60% in the second half of the year. That's kind of the way I would be looking at it.

Analyst Jeff Van Ree (Craig Hallam Capital Group): Got it. Okay, and then just last, on the Gen 3s, obviously I think compared to your initial hopes, expectations, the timeline of getting those in the sky has been slower than expected. Just curious, as you're looking back on kind of what's playing out there, is there anything that needs to change? Are you satisfied with the timelines it looks like in terms of how those are going to roll? And where do you think you're going to end 2026 in terms of the number of Gen 3s up?

Executive Name (Title): Yeah, Jeff, the way that we're looking at it right now is, you know, we've got these first three up, and they're meeting and exceeding expectations, performing exceptionally well. And that performance has driven success. The revenue ramp that we're experiencing in the fourth quarter and taking into this year. We have the next one already at the launch site. Our goal will be to have eight to nine Gen 3s on orbit by the end of this year. We're in very good shape. As we mentioned, we have found an issue in testing on the prior satellite. This is very typical with your first few satellites. I'll remind you with our Gen 2 constellation, we started with a similar cadence, and then we quickly got to the point where at one point we launched six satellites within 20 days. So we are on track, and the satellites are performing well, and our production operations are ramping.

Analyst Timothy Horan (Oppenheimer): Thanks guys. Any updated thoughts on is there an inflection point for where you get some scale when you hit like six, seven, eight satellites when maybe more general availability and do you see a little bit more operating leverage? Just thoughts on what the critical number is there.

Executive Name (Title): Yeah, good morning, Tim. I guess we don't think of it that way. I think the way we are seeing it is the three we have up there have been sufficient to put in front of customers so they can validate the performance and how they integrate this capability into their operations. And our sales cycle reflects that along with unlocking revenues from existing contracts. So the thing that maybe keep in mind is the number of satellites is not indicative of revenue. There's some companies with hundreds of satellites that have a certain revenue profile and others that have six to eight that have a completely different revenue profile. So we view it more as customer adoption rate and unlocking performance, and we scale that capacity commensurate with the level of service that we need to deliver, whether it's imaging, performance and quality revisit, or low latency delivered with AI-enabled intelligence. So it's a customer ramping and capacity ramping trend that we're working toward.

Analyst Timothy Horan (Oppenheimer): Got it. It does sound like you are a little bit capacity constrained on the manufacturing line, but I think you're implying that that's going to accelerate your ability to accelerate your manufacture of these satellites. Is that pretty accurate?

Executive Name (Title): Yeah, I wouldn't call it capacity constrained. I would call it being very measured with the first several satellites to ensure that the ones that are going up there are meeting our quality standards and we are in parallel optimizing supply chain and our production processes to hit a operating cadence out of production so as I said this is typical and we are feeling very good about where we are.

Analyst Timothy Horan (Oppenheimer): And then lastly just any thoughts on U.S. spend are you at this point from the government what are you kind of expecting this year are you seeing improvements there?

Executive Name (Title): Yeah, I think, let me just say, you know, we're happy that Congress approved the 26th budget, which includes funding for EOCL and other commercial imagery and analytics initiatives, both at NGA and Space Force. So for EOCL, we've taken a conservative approach in our forecast this year, and we expect that it will take some time into Q2 across all of these programs before we get better visibility into how this funding is going to be appropriated to specific programs and contracts. But we're seeing increased interest across the government in expanding use of commercial imagery and analytics.

Analyst Jason Schmidt (Lake Street): Yes, thanks for taking my questions. Just following up on the new eight-figure contract. Just curious how long you were in discussions with that customer before inking that contract and I guess relatedly what you're seeing from sort of a sales cycle timeline when it comes to some of these January contracts.

Executive Name (Title): Yeah, I think I think the way we think about it, Jason, it's. These are 12 to 18 month type sales cycles and. In this particular case, this was at the faster end of that. So I think we're seeing a very consistent trend around that length of sales cycle.

Analyst Jason Schmidt (Lake Street): Okay. Okay, that's helpful. And then just as a follow-up, not looking for specifics, but just curious at a high level, if the pricing of the Gen 3 capacity is in line with your prior expectations?

Executive Name (Title): Oh, it's exactly in line with our expectations and what we have modeled in our business plan. The thing that you need to keep in mind is we have increased the pricing commensurate with the from gen 2 to gen 3 with the improved 35 centimeter capability. Also keep in mind that these gen 3 satellites are producing imagery at a level of performance of much larger and more expensive satellites that in some cases can be 10 times more expensive so these types of compelling economics are really enabling us to provide our customers with exceptional value at competitive prices while delivering strong margin performance to the business.

Analyst Chris Quilty (Quilty Space): Board and gentlemen, looking out to 26, and thank you, by the way, for providing the new segment reporting that's definitely helpful. Can you give us a sense of what sort of a breakdown you expect revenue-wise between the segments? I'm thinking it's probably like a 70-30ish on the imagery and analytics.

Executive Name (Title): Yeah, good morning, Chris. Thanks for the question. Let me take the first question before I hand it over to Henry. Yeah, I think the mix is really consistent with where we've been in the past. This is just providing some visibility across those three elements. We expect that the space-based intelligence and AI services to contribute, you know, somewhere in that 60 to 70% of our revenues, which is, that's our higher margin subscription element of our business. The mission solutions element, know think of that being in this kind of 25 range at this point but we expect that to grow we expect them all to grow um that may that may grow a little bit more disproportionately as those are larger deals and then finally the uh technology development programs uh as I said we've had a long history of those um and we we expect to kind of sustain that and grow it you know think roughly you know, 15% or so of our of our total revenue. So no, really not much change in the blend, but just providing better visibility.

Executive Name (Title): Chris, kind of looking at kind of the mission solutions line, given the fact that these satellites do have some customization associated for each individual client because of the way they need to operate them a little bit, we are able to look at it from kind of an ETC basis or kind of a percent complete, as you're calling it, so that we do expect to be able to get some revenue recognition as we march through. And that's what we were able to do with this eight-figure contract in the fourth quarter.

Analyst Chris Quilty (Quilty Space): Great. And when you look at the, you know, the international sales model, I mean, we've certainly seen kind of two different models, one where transfer the satellite, you know, to the customer, another where you operate the satellite as a bespoke element of that customer's, you know, customer ownership, you're operating it and you monetize in different regions. Do you prefer either of those margins? What direction do you see that trend line going? And are there significant modeling considerations we should think about, depending upon which model you use?

Executive Name (Title): Yeah, Chris, I'm not sure we would say we prefer one model versus the other. I think what we're doing now is being responsive to how our customers want to structure these contracts. As I mentioned before, in the mission solutions, it's essentially giving them sovereign capability and control that may include operational support, leveraging our commercial infrastructure, and then bundling that with our commercial services that are giving them higher performing revisit and real-time AI-enabled intelligence that augment that. So there's a number of different business models, whether it's a constellation as a service or a turnkey system. We've developed a strategy where we're flexible to meet the customer where they are and be on that journey for them in the long haul of how they want to expand this over time.

Analyst Chris Quilty (Quilty Space): Great. Henry, are you going to give a quarterly breakdown of the new segment reporting in the K? For a historical, yes, we will. Historically, they will be.

Analyst Austin Mueller (Canaccord Genuity): Hi, good morning, Brian and Henry. So just my first question, can you comment on the NRO having 200 of its own satellites in orbit now? Do you know what modality they are? Are they like EO, infrared, SAR? And would you consider that to be complementary or competitive to Gen 3?

Executive Name (Title): Well, I think the U.S. government and other major governments have always had their own sovereign capability for critical national security needs. That's been the case for a long time. I think what's important to understand in the U.S. government is that there's several unique missions that the U.S. government has moved to commercial capabilities, and that those set of requirements have long been allocated to what is now EOCL, but prior to that, enhanced view and the predecessor contract. So I think the way we look at it is we're not competing with those systems. We're augmenting them. We can move much quicker in the innovation cycles. We can provide a resilient augmentation capability and then also which is extremely important, is everything we do is unclassified, which is shareable with our allies. So it's not a competition, it's an augmentation, and it's serving very specific missions that have been allocated to the commercial industry.

Analyst Austin Mueller (Canaccord Genuity): Okay. And are you able to comment on what the size of the commercial imagery budget was in 2026 now that the budget was passed? I know it's usually classified, but I don't know if that's been divulged yet.

Executive Name (Title): It's still, it's a classified budget line.

Analyst Scott Buck (HC Wainwright and Co.): Hi, good morning, guys. Thanks for the time. Brian, I'm curious, you guys talked about the significant international demand. Can we get a little more granular there? Is that Asia? Is that Europe? Or what can you tell us about where that's coming from? And then second, what do you think was left on the table in the U.S. in terms of revenue from the shutdown during the end of 25?

Executive Name (Title): Yeah, I think, Scott, I think we're seeing on the mission solution side internationally pretty much demand almost in every major region across the world, you know, Europe, Middle East, Asia Pacific, Southeast Asia, et cetera. So, like I said, you know, the number of countries that are putting significant dollars into building sovereign space capability, both for national security and economic development purposes is growing very rapidly. And so we do have a pretty strong pipeline worldwide. I think on the what was left on the table question, we talked about the impact of some of those government budget changes that we addressed in August. I don't know, Henry, if you want to maybe comment on that again, but I think we shared those numbers.

Executive Name (Title): Yeah, we have shared, Scott, back in some of our prior earnings calls, we did talk about how with the budget cuts and the impact that we had, that was in the neighborhood of about $2 million per month starting in August, so about a $10 million hit for the year. So that's what we've stated.

Analyst Scott Buck (HC Wainwright and Co.): Great. I appreciate that. And then as we move closer to 27, could you give us a little more color on how the rollout of Eros would work and maybe some color on what the revenue opportunity looks like versus the imagery business?

Executive Name (Title): Yeah, the Eros satellite is a TAM expansion opportunity for us. Our Gen 3 capability is high-frequency dynamic monitoring of strategic sites of interest. EROS is being designed as a large area mapping, digital mapping capability for large area change monitoring. Think of the large imagery demands and collection required for things like Google Maps and other digital platforms, including in support of next generation AI capabilities, the development of digital twins. And so Eros is being designed specifically for those set of requirements. The Gen3 and the Eros satellites will work cooperatively to deliver a high value service to our customers that need both of those capabilities. And then also it's a commercial expansion opportunity, particularly an area of digital mapping and other civil and other civil type markets that require that type of mapping. So it's a purpose-built satellite for a new market opportunity.

Analyst Sheila Kayalu (Jefferies): Good morning, everyone. This is Billy on for Sheila. Thanks for taking our questions. Just on the cash operating expenses, you've held them relatively flat while growing revenue, which is great. What are some of the drivers of the cost management? And as Gen 3 continues to scale, how are you thinking about OPEX and operating leverage?

Executive Name (Title): Yeah, I think I'll start. I can hand it over to Henry. We have from day one been building a platform that gives us significant operating leverage. As we get the business over the fixed price cost of running that and maintaining it, that's where you see significant margin performance that goes to the bottom line for every incremental amount of capacity that we sell. So you can see that in our EBITDA margin performance over the last couple of years as we've been monetizing that capacity off of a fixed operating, generally fixed operating base. I don't know, Henry, if you want to add anything.

Executive Name (Title): I think you covered it there, Brian. I mean, we're disciplined in kind of cost management. We do make investments in sales, marketing, and other R&D type stuff so that we are always making sure that we're growing, but we're also quite disciplined to make sure that we provide the leverage so that as we grow our top line, it will drop to the bottom.

Analyst Sheila Kayalu (Jefferies): Great. Thanks. Helpful. And then just one more on free cash flow for 2026. What do you see as the major moving pieces as you progress towards positive free cash flow for 2026? What are the working capital needs? And for the, you know, 55 million in CapEx, how do you think about the mix between Gen 3 investments and AI technologies?

Executive Name (Title): Well, we don't break CapEx down between those two in our guidance, but as you can look historically, I mean, we typically have a neighborhood of about 12 to $15 million of kind of general corporate development CapEx, AI CapEx, et cetera. But the big thing there is, as we're guiding, we're growing the adjusted EBITDA, which is a surrogate for operating cash flow, and we believe that we'll be able to hit the target ranges that we're putting out there.

Analyst Greg Burns (Sedoti): Good morning. Just to follow up on the EOCL question. Funding and I know it's the budgets classified, so maybe you don't have an exact number, but do you have any sense of whether or not the cuts the proposed cuts were enacted or if funding was restored to historic levels?

Executive Name (Title): As I mentioned earlier, it is classified, but what we are seeing is. There's multiple budget lines. There's been a couple that have been added. And we're sorting through how that is going to play out in actual implementation. So we're seeing some positive trends out of that, but we have to see how this shakes out over the next quarter.

Analyst Greg Burns (Sedoti): Okay. And I guess, is any part of your guidance range, does that include that the level of revenue from EOCL stepping back up or is that not anywhere in your guidance and that is potential kind of upside?

Executive Name (Title): I'll just say we've taken a very conservative approach to our forecast this year relative to EOCL and we'll see where this lands by later in the second quarter.

Analyst Greg Pendi (ClearStreet): Hey, guys. Thanks for taking my question. Just one real quick one. Under the old reporting, your Ks and Qs would break down imagery versus data, software, and analytics. And I think at the beginning of the call, you mentioned sort of that flywheel effect of getting the better imagery feeding into the AI capabilities framework. Thus far the data software and analytics growth has been pretty stagnant so you can you kind of give us a little bit of color on how the improved imagery kind of feeds into that area and how it would play out in 2026 with the better imagery?

Executive Name (Title): I think just first off you know last year because of the government budget issues that had an impact on the growth of that line but now that is being offset by the strong demand we're seeing in the international markets, particularly around Gen 3. And then the expansion of the improved AI capability that Gen 3 brings as well. And then the pricing increase. So we have very good visibility on how that line is going to be growing going forward.

Analyst Dave Storms (StoneGate): Good morning, and thanks for taking my questions. I wanted to circle back to cash management. Henry, I believe in your remarks you mentioned that we should see an accounts receivable burn throughout the year. Just curious if you could give us any more color there, maybe some of the points it takes on working capital management. If we should expect that AR balance rate to get back down to 2024 levels or not.

Executive Name (Title): Yeah, I mean, when you take a look in the press release about the balance sheet theory, our accounts are about that $37.5 million mark. A lot of that, as you might imagine, when we sign a contract late in the year and there's a fair bit of revenue, we bill for it, but you haven't lapsed that through that typical $30 million. 45-day receipt cycle, so you'd expect to kind of be able to bring that stuff back down. With the mission solutions, we may get some lumpiness on that, but we've never had a problem with collecting receivables.

Analyst Dave Storms (StoneGate): Understood. Very helpful. Thank you. And if I could just ask one clarifying question. I think you mentioned earlier in the call that the sales cycle is typically 12 to 18 months, and I think that was specific to those eight-figure contracts. Are you seeing a similar sales cycle for call at the 45 additional sovereign nations that have kind of come online in the last five years, or do they tend to have a little bit of a longer sales cycle?

Executive Name (Title): I think they're all a little different, Dave. It's hard to, especially when you have customers that are doing this for the first time and implementing new acquisition programs. So, you know, my range and sales cycle is really a general number. We'll see some go faster. We'll see some take longer.

Executive Name (Title): There are no further questions

at this time.

This concludes today's call. Thank you for attending. You may now disconnect.