Terran Orbital may be on the brink of receiving a significant sum from their main client, according to CEO Marc Bell’s recent disclosure at a company-wide meeting.
Rivada Space Networks is in the final stages of securing funding for a mega-constellation project to be constructed by Terra, with an estimated cost of $2.4 billion. This agreement currently represents the majority of Terran’s backlog revenue.
While Terran has been actively pursuing other lucrative contracts that could amount to billions of dollars in work, their $2.4 billion deal with Rivada stands as the largest they have secured so far. However, earlier this quarter, Terran had to adjust their financial outlook for the year as Rivada experienced delays in paying an additional $180 million towards their total contract.
“I had dinner with [Rivada CEO] Declan Ganley last week in DC,” Bell revealed during the meeting. “He told me they expect to close tomorrow on their funding. He showed me the documents. I saw them, I read them. He texted me this morning and maybe Thursday, Friday now. […] As long as it’s by Christmas, I’ll be happy. Nothing wrong with getting a good Christmas present.”
In February of this year, Rivada, a German subsidiary of U.S.-based Rivada Networks, contracted Terran to construct 300 satellites for their mega-constellation project under a $2.4 billion agreement. Additionally, Rivada has a separate deal with SpaceX to launch these satellites starting in April of 2025.
However, despite the anticipated funding closing before Christmas, neither company has made any public announcements. This prompted TechCrunch to reach out for comment, but neither company responded by press time. During the meeting, Bell mentioned that even if the funding is secured, both parties will need to make modifications to their contract which could further delay payment terms and public announcements.
“He’s been very transparent with me and I have no reason to doubt him,” Bell stated regarding Ganley. “But unfortunately, he’s not the one writing the check, somebody else is writing the check to him. But if he gets a check, I have to assume we’ll also get a check. However, we do need to modify the contract, which may cause a delay. But at least we’ll be paid for the $9 million invoice that is currently owed. But of course, we all want the big check, as that will significantly help our share price and overall business.”
In a call with investors last November, Bell expressed that the funding and payment delays from Rivada came as a “surprise” to both companies. He also mentioned that Rivada’s funding source is assumed to be “a large sovereign” – potentially a sovereign wealth fund – and both parties expect the money to eventually close.
As of November, Terran reported a backlog of future work amounting to $2.6 billion, with the majority, $2.4 billion, coming from the Rivada contract. Despite the expected milestone payment, Bell reassured staff that the company still expects to generate $130 million in revenue this year, a significant increase from the $94 million earned in 2022.
Terran is actively seeking other high-value contract opportunities, including with the Space Development Agency’s “Proliferated Warfighter Space Architecture”. The company has already built and delivered satellites for the initial phase of this project known as “Tranche 0” and is currently in the process of constructing 42 satellite buses for “Tranche 1”, with an additional 32 buses planned for “Tranche 2”. Additionally, Bell shared that the company will also be pursuing another award for a variant of the “Tranche 2” satellites, called “Gamma”. This time, Terran may be the prime contractor if successful, rather than a subcontractor to prime winner Lockheed Martin.
“We are confident that we will secure the Gamma award,” Bell disclosed. “We are considering being the prime contractor, rather than a sub[contractor] […] We are currently at even odds of being the prime contractors, which would be a game-changer. But we have yet to make a final decision, and we’ll be discussing this with Lockheed.”
Bell also mentioned that Terran is in talks about taking the company private, with the intention of eventually going public again through traditional means. This would allow them to avoid their current “dumbass market cap”, which has declined since Terran Orbital’s public debut via a SPAC (Special-Purpose Acquisition Company) reverse merger in March of last year. The company’s initial stock price was $10.96, but as of now, the shares are trading for approximately $1.22.
