WASHINGTON — Space technology company Redwire said that while it still sees the commercial sector as its biggest long-term growth prospect, volatility among its customers may cause delays.
Redwire, which went public through a merger with SPAC last year, reported revenue of $32.9 million in its first-quarter earnings release on May 12. The company had a net loss of $17.3 million and an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss of $4.7 million in the quarter.
The first quarter fell “slightly below expectations,” Peter Cannito, Redwire’s chairman and chief executive, said on an earnings call. That shortfall was due in part to contract awards being delayed due to delays in completing fiscal year 2022 allocations from the federal government, as well as supply chain issues with subcontractors.
Another factor, he said, was “some volatility associated with emerging commercial space contract orders.” He didn’t give specific instances of problems, but went on to say that companies running into funding or regulatory problems can affect the timing of orders.
“With rapidly changing economic conditions, uncertainty has increased,” he said. “If we were to say that anything has changed, it’s a bit of uncertainty about the timing of many commercial space companies in our sector being a provider that changes their forecasts over time.”
“If the commercial space segment does not meet its forecasts according to widely held projections at this time last year, that also adds uncertainty to our forecast for the next five years,” he added.
Despite the current uncertainty, Cannito remained optimistic about the commercial sector’s long-term growth potential. Redwire does business both with NASA and in the national security space, where it said the company saw strong “signs of demand” for various technologies the company develops. The company used the call to highlight work such as building solar panels for the International Space Station and a U.S. Air Force indefinite-delivery, indefinite-quantity contract worth up to $950 million for the Advanced Space System. Battle Management of the service, the company’s experience in digital engineering.
However, the commercial market offered better long-term prospects, he argued. “The emerging commercial space segment has tremendous growth potential over the next 5 to 10 years that could far outpace the other segments in annual growth rate.”
Redwire affirmed previous financial guidance for 2022, projecting $165 million to $195 million in revenue and $8 million to $15 million in adjusted EBITDA for the full year. “We expect sales to be more heavily weighted in the second half of the year,” said Bill Read, Redwire’s chief financial officer, citing its $273.9 million order book.