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Terran Orbital hit by Rivada late payment

November 15, 2023

By Chris Forrester

Satellite builder Terran Orbital reported that its revenues for 2023 would be almost half original expectations because key client Rivada Space Networks has yet to make an agreed milestone payment. The original expectation for 2023 was for $250 million (€230.3m) in revenue. Now Terran says it will be “in excess” of $130 million, some 48 per cent less.

Terran’s quarterly report to the Securities & Exchange Commission (SEC) that it had been staffing up, increasing factory space and investing in new facilities for its clients. Rivada has an order with Terran for an initial 300 low Earth orbiting satellites.

“Due to the delay and uncertainty regarding the timing of performance related to our contract with Rivada versus our original [2023] expectations, we are removing any further revenue contribution from this contract in our current year forecast but continue to expect revenue contribution in future years,” the company said in a statement.

Terran told the SEC its Riwada story, saying: “During February 2023, we entered into an agreement with Rivada Space Networks GmbH providing for the development, production, and operation of 300 satellites, inclusive of 12 in-orbit spares and ground station equipment, for a total purchase price of approximately $2.4 billion. The agreement includes termination provisions for default in the event of missed delivery targets or deadlines, insolvency, or other failures to perform, which could result in the refund of all amounts paid up to such termination. The amount of revenue recognized under the Rivada Agreement was $5.4 million and $6.6 million during the three and nine months ended Sept 30, 2023, respectively.”

Rivada has recently stated that its main financial backer is a “large sovereign” fund. The company has halted all work on Rivada’s satellites, with Terran Orbital CEO Marc Bell saying: “In the end, it’s going to cost them more in order to get there.”

Bell told analysts “We continue to believe our Rivada contract will provide significant future revenue and cash flows, the timing whichever is uncertain, and we want to be conservative in our guidance going forward.”

As to its financial results, Terran reported:
• Cash & Equivalents: $38.7 million
• Revenue: $43.9 million, +58 percent YoY
• Net Loss: $(26.4) million vs. $(27.4) million
• Backlog: $2.6 Billion ($2.4 billion from Rivada)

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