Redwire warns of volatility in commercial space markets
WASHINGTON — Space technology company Redwire said while it still views the commercial sector as its biggest long-term growth prospect, volatility among its customers can cause delays.
Redwire, which went public through a SPAC merger last year, reported revenue of $32.9 million when it released its first-quarter results on May 12. The company posted a net loss of $17.3 million and an adjusted earnings before interest, tax, depreciation and amortization (EBITDA) loss of $4.7 million in the quarter.
The first quarter fell “slightly below expectations,” Peter Cannito, chairman and chief executive of Redwire, said in an earnings call. This shortfall was due in part to the postponement of contract awards due to delays in the completion of federal government appropriations for fiscal year 2022, as well as supply chain issues with subcontractors.
Another factor, he said, was “some volatility associated with emerging commercial space contract orders.” He did not give specific instances of the problems, but said later that companies encountering funding or regulatory issues can affect the timing of orders.
“With rapidly changing economic conditions, uncertainty has increased,” he said. “If we were to say anything has changed, it’s a bit of uncertainty as to when many of the commercial space companies in our industry that we are a supplier are changing their forecasts over time.”
“If the commercial space segment does not meet its forecast in line with the projections that were ubiquitous at this time last year, it also adds uncertainty to our forecast for the next five years,” he added.
Despite this current uncertainty, Cannito remained optimistic about the long-term growth potential of the commercial sector. Redwire does business with both NASA and national security, where he said the company has seen strong “demand signals” for various technologies developed by the company. The company used the call to highlight work such as the construction of deployment solar panels for the International Space Station and an indefinite, indefinite-quantity U.S. Air Force delivery contract worth up to $950 million. dollars for the service’s advanced combat management system, leveraging the company’s expertise in digital engineering.
The commercial market, however, offered greater long-term prospects, he argued. “The emerging retail space segment has tremendous growth potential over the next 5-10 years that could far outpace other segments in terms of annual growth rate.”
Redwire confirmed previous financial guidance for 2022, forecasting revenue of $165 million to $195 million and adjusted EBITDA of $8 million to $15 million for the full year. “We expect sales to be more heavily weighted in the second half of the year,” Redwire chief financial officer Bill Read said, citing its $273.9 million backlog.