Firefly Aerospace Q3 2026 Earnings Call Transcript

Firefly Aerospace (NASDAQ:FLY) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Firefly Aerospace reported a significant $1.3 billion agreement with AST SpaceMobile, including $800 million in cash and stock for engine IP licenses and $500 million for support services and engine deliveries.

The company achieved a 259% year-over-year increase in third-quarter revenue to $110.7 million, largely driven by its spacecraft business, with a growing backlog of $1.7 billion.

Firefly Aerospace is expanding production facilities and workforce, particularly for its Alpha and Eclipse launch vehicles, supported by non-dilutive funding from the AST deal.

The company is actively progressing on multiple lunar missions, including NASA’s CLPS program and the Blue Ghost lunar lander, further establishing its presence in lunar exploration.

Future outlook includes ramping up Alpha Block 2 production and a strategic focus on its Eclipse vehicle, with expectations of a strong demand environment and pricing power in the launch market.

Full Transcript

Carmen (Moderator)

Welcome to the Firefly Aerospace Third Quarter 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal remarks. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please note this conference call is being recorded.

I will now turn the conference over to Michael Sheets, Firefly’s Director of Investor Relations. Michael, you may begin.

Michael Sheets (Director of Investor Relations)

Thank you, Carmen. Hello there, I’m Michael Sheets, and welcome to Firefly’s third quarter financial results call. I’m pleased to be joined on the call by CEO Jesung Kim and CFO Darren Ma as we report for the period ending September 30, 2026. Today’s call will include forward-looking statements, including but not limited to statements the company will make about its future financial and operating performance, growth strategy, and market outlook. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause the actual results and trends to differ materially are set forth in our annual and quarterly reports filed with the SEC.

Firefly assumes no obligation to update any forward-looking statements, which speak only as of their respective dates. Also on this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in the third quarter 2026 earnings release. Unless otherwise stated, financial information referenced on this call will be non-GAAP. Our earnings press release, SEC filings, and a replay of today’s call can be found on our Investor Relations website at investors.fireflyspace.com.

Now I’ll turn the call over to Jesung.

Jesung Kim (Chief Executive Officer)

Thank you, Michael, and welcome to our third quarter 2026 earnings call. As tomorrow is Veterans Day, I thank our country’s service members for their dedication and sacrifices in supporting our nation. Firefly is proud to employ more than 200 veterans like myself, and we are honored to work on a wide variety of critical national security missions that support our warfighters and allies. Before I get into our business updates, I will discuss the recent transformative deal we signed with AST SpaceMobile. Our intellectual property supply and services agreement, valued at more than $1.3 billion, marks the beginning of a three-year partnership bringing together two bold, complementary Texas companies. For those unfamiliar, AST is building a space-based constellation of satellites to provide a global cellular broadband direct to Everyday Smart.

The company is working with more than 60 mobile network operators around the world and has launched over a dozen satellites to date. But launch is highly constrained with need for deployment of proliferated constellations like AST’s Direct to Device satellites. This agreement is yet another tremendous validation of our technology. When an experienced operator like AST SpaceMobile evaluates the options available and chooses Firefly, it represents a powerful external endorsement of our world-class engine technology. Based on our proven patented tap-off cycle, we have spent years developing and refining our next-generation Miranda engines. Notably, this agreement is complementary to our existing launch business.

By design, AST’s vehicle will be purpose-built to launch their own satellite constellation while Firefly continues to serve the broader commercial and government launch market. Fundamentally, this deal does not change Firefly’s identity. We are a vertically integrated space and defense company with diversified lines of business. We build and operate launch vehicles, lunar landers, spacecraft platforms, and national security software. This partnership leverages one of our core competencies and is a natural extension of our fundamental business. Our commitment to our core launch services Alpha and Eclipse is unwavering.

As a non-dilutive agreement, this more than $1.3 billion collaboration provides new fuel for Firefly’s growth, allowing us to expand rapidly. In several areas, we will expand our infrastructure and workforce as well as deepen our supply chain. We are building multiple new test bays at our Rocket Ranch to increase our launch vehicle production and testing capacity. We are adding more team members dedicated to our launch programs. We will make bulk purchases of long-lead materials, deepening the resilience and cost efficiency of our supply chain.

And the new capacity will help further scale the bandwidth of our engineering core. Under the terms of this partnership, Firefly will build, test, and deliver a total of 27 Miranda first-stage engines and nine Vera upper-stage engines, making up three complete flight sets. These engines will power AST’s new reusable three-stage heavy-lift launch vehicle designed to carry 20 metric tons to low Earth orbit. Critically, Firefly retains full ownership of the intellectual property associated with our engines. We are licensing the technology to AST, who will independently configure the engines for their own vehicles, mission profile, and integration requirements.

When a company sets out to build its own rocket, the engine is the hardest, highest-stakes decision they make. AST chose Firefly, and that tells you everything you need to know about where our technology stands. This agreement is a true win-win. AST gets control of their own launch schedule. Firefly gets steady, non-dilutive funds to reinforce our launch services production, strengthen our supply chain and infrastructure, grow our team, and push the boundaries of what is possible in space.

I would now like to hand the call to Darren to discuss selected financial terms of this agreement.

Darren Ma (Chief Financial Officer)

Thank you, Jesung. This partnership is transformative from both an operational and financial perspective. This deal is broken into three primary parts worth $1.3 billion. First, there is approximately $800 million in cash and AST stock associated with the Miranda and Vera engine IP licenses to AST. The IP license is broken out into $400 million in cash and 10 million to 14 million shares of AST Class A common stock as determined by a forward VWAP calculation. These shares are also subject to various lockup periods. Second, there is $250 million in support services leveraging our team’s expertise, and third, the remaining $250 million is for delivering engines to support their first three flights.

Revenue for this contract will be recognized in two parts. The fair value of the IP portion of the contract and support services will be recognized over time on a percentage-of-completion basis. The fair value of the engine deliveries will be recognized at a point in time upon delivery to the customer. Please note that revenues recognized from this agreement will be included in our launch business. Now let me walk through how operational milestones will help shape the revenue ramp for this program. The program begins immediately, but revenue will start in earnest next year, ramping gradually as we hire and execute toward contract milestones. Engine deliveries will begin ramping in year two of the agreement, and we expect this will lead to revenue increasing in the second year and continue ramping through the third year. From a gross margin perspective, the corresponding revenue associated with the intellectual property agreement and support services will steadily expand our gross margin profile.

On the cost side, we expect to make significant investments through research and development as well as CapEx and infrastructure related to this agreement. We expect these investments will generate returns in the long term as they benefit our existing launch services business. The agreement represents a tremendous source of non-dilutive funding for Firefly that bolsters our future, partners us with an industry leader, and enhances our financial profile. Now I will turn the call back over to Jesung for our third quarter business updates.

Jesung Kim (Chief Executive Officer)

Thank you, Darren. We are closing the year with momentum, adding new contracts and achieving milestones across our programs. Our added wins drove our backlog to a record total of $1.7 billion at the end of the third quarter, further supporting our long-term growth trajectory. We opened and moved into the clean room expansion at our spacecraft campus, which quadrupled our square footage for assembly, integration, and testing of both Blue Ghost landers and Electra orbiters.

Our expansion comes at an ideal time. As we heard this weekend, NASA is full speed ahead on the Moon. We previously talked with you all about building larger landers. That time is now with CLPS 2, and we are thrilled to get started. Larger cargo landers, which can help deliver bigger payloads such as light terrain vehicles, will expand our ability to support Moon-based operations. Onboarding to this $10 billion program positions us to compete for and deliver task orders.

Firefly Aerospace is creating the railroad to the Moon. The vehicles we build will deliver and support many of the capabilities needed to enable a permanent lunar presence. And the Moon is not just about exploration and discovery. The U.S. is locked in a space race with China, and we equally understand that the Moon is the ultimate high ground. To quote a recent report published by the U.S. Defense Intelligence Agency, China portrays its interest in cislunar space as peaceful, but PRC officials have also discussed pursuing military capabilities in cislunar space.

The Pentagon is responding to this adversarial threat with funding. U.S. Space Force Major General Stephen Purdy, who leads the branch’s acquisition efforts, is urging commercial providers to support national security efforts on and around the Moon. Our fleet of spacecraft is ready to support. For those new to Firefly Aerospace, and as a reminder for others, we are a space and defense company delivering innovative hardware and software to perform the hardest missions in space for national security, exploration, and commercial technology.

Our hardware is represented by our spacecraft, the Blue Ghost lunar landers and Electra satellite orbiters, and our launch vehicles, the small-lift Alpha and medium-lift Eclipse. Our spacecraft solutions platform also includes our software portfolio of AI-enabled offerings, which are proven in national security operations as well as autonomous guidance and navigation systems. We are tenaciously focused on and prioritizing safety, quality, and reliability as we scale up our hardware and software product deliveries.

Now, turning to our business updates, we are progressing towards the launch of Alpha Flight 8. In the first quarter of 2027, we received direction from a national security customer that required a readjustment to our launch manifest. I am proud of the national security demand for Alpha, as Alpha is uniquely suited to dedicated orbits for missions such as hypersonics, tactically responsive space, and Golden Dome. We did not make this decision lightly, as our preference was to launch before the end of the year.

However, we are proud to have the confidence from the customer to support this critical mission. Additionally, we have been in this position before, having conducted a similar manifest rescheduling when we launched the historic VICTUS NOX responsive launch on Alpha Flight 3. As always, timing depends on variable external factors such as customer readiness, range availability, weather conditions, and more. We will conduct a thorough review of our post-Flight 8 data to ensure any lessons learned flow into subsequent launches.

This consequential launch represents the debut of our Block 2 vehicle configuration, a series of improvements that we have been developing to increase manufacturing rate and enhance reliability. We are focused on the debut of Block 2 because it’s not just about Flight 8. Back at the Rocket Ranch, we have structures and engine chambers for Flight 9, Flight 10, Flight 11, and Flight 12. As we step into an increasing launch cadence in 2027, all the structures and tanks for Flight 9 are complete, with all four Reaver engines and the Lightning engine in assembly.

The structures for Flight 10 completed proof testing. We’ve completed manufacturing of all tanks and structures for Flight 11. And the composites for Flight 12 are in production. All of these structures were made using our automated fiber placement machine, on which we have continuously refined our processes over the past few years. Our AFP is producing multiple structures simultaneously to support these launches and more. We are ramping up engine chamber output.

We currently have 24 Reaver engine chambers and counting in production. Block 2 is about unlocking rate for Alpha, and we’re seeing those improvements reflected on the factory floor. I know folks are eager to hear about our plans for Alpha’s launches next year. But right now we’re focused on the debut of Block 2. We will give our 2027 launch target during our fourth quarter earnings call. Demand for Alpha remains the most supply constrained it has ever been in our company’s history.

We have more customers than we have rockets available in the near-term manifest. This is a very good problem to have and reinforces our investment in production capacity. We’re stepping into rate with Block 2. During the quarter, we announced our first contract with SSC Space for two Alpha launches from Esrange Space Center in Sweden. This is a landmark deal representing our first European launch contracts. We are looking forward to serving European customers in a domestic capacity as we build our global franchise.

Firefly Aerospace also added a third hypersonic task order for Alpha from a confidential customer, as well as extended our Lockheed Martin multi-launch agreement. We also added another great commercial customer, signing Japanese synthetic aperture radar satellite company Synspective for up to 10 launches through 2030. Alpha will double Synspective’s deployment pace per launch by delivering two satellites to orbit per mission. We will launch their satellites from both our California and Virginia launch facilities, giving Synspective flexible access to a range of orbital inclinations.

A few weeks ago I visited our future launch site at NASA’s Wallops Flight Facility. I got to see firsthand the progress we are making to prepare for launches of Alpha and Eclipse. This specialized launch pad will be able to launch two different vehicles from the same location. Our Fireflies are working on the launch adapters, the strongback, the launch control center, and the commodity systems. I spent time meeting with local authorities, partners, and NASA leadership, as well as our own employees.

It was great to see the work we’re getting done toward launching from Virginia no earlier than next year. Finally, during the third quarter, Firefly Aerospace onboarded to NASA’s Spacecraft Processing Operations contract. As one of the few commercial payload processing facilities at Vandenberg Space Force Base, this contract allows us to further support NASA missions. We provide flexible infrastructure and services to alleviate bottlenecks for our partners while unlocking a new revenue opportunity that will utilize our existing facilities.

Moving to Eclipse, our reusable medium launch vehicle in development alongside Northrop Grumman, we made important progress in the quarter. I’m pleased to say our Miranda engine qualification campaign is underway. To date, we have completed more than 175 hot fire tests, totaling 4,230 seconds of cumulative runtime across 20 engines. Miranda’s unrivaled development from clean sheet to qual campaign is a testament to the dedicated work of our team.

It’s been made possible by the lessons learned from Alpha, as the common tap-off cycle engine technology allows us to move faster in bringing this critically needed vehicle to market. Fireflies have been hard at work testing out the critical technologies we need for reusability, including multiple relights and power throttling. We have simultaneously reduced risk and compressed schedule in developing this powerful next-generation engine. The data we’ve gathered from Miranda’s development gives us high confidence in the engine’s performance and reliability.

Now that we’re in qual, we are able to further proceed with manufacturing and assembling the Miranda engines for the first Eclipse launch. Alongside our co-developer Northrop Grumman, we’re pleased to see Eclipse making progress toward the launch pad. I am enhancing the program team with added technical experts as well as investing in infrastructure to prepare to ramp up Eclipse production. The demand for launch in this segment remains at all-time highs, with capacity more constrained than ever.

So I’m actively working to make sure our team has the tools, people, and investments needed to bring Eclipse to market. The world needs Eclipse more than ever. Turning to Blue Ghost, our lunar program carried significant momentum through the third quarter. We are executing on five Moon missions in parallel, a milestone that demonstrates the maturity and repeatability of our lunar architecture. Each of these missions is at a different stage of development, and the team is managing this portfolio with tremendous discipline. One of the most significant milestones of the quarter was the completion of our new clean room facility at our Austin, Texas campus.

We enjoyed hosting multiple partners at the ribbon cutting, including leadership from the Texas Space Commission, NASA’s Moonbase team, and both state and local representatives. The ribbon had hardly touched the ground before we began moving in multiple spacecraft for NASA and the Department of Defense, making the clean room immediately operational. This is no small upgrade. This is a multi-bay facility that is purpose-built to enable simultaneous integration of up to a dozen lunar landers and orbital vehicles, giving us flexibility to add even more spacecraft contracts.

The new clean room is foundational to our Moonbase ambitions. We are scaling production to meet the growing NASA pipeline as well as support commercial demand. On Blue Ghost Mission 2, known as Riders Through the Dark, we are getting closer to being launch ready. The lander completed proof testing during the third quarter, which is a final test to verify the full integrated fluid system is complete with pressurization and leak checks. We stacked both the lander and the Electra transfer vehicle, installed electronics on the lander, and powered it on. Riders Through the Dark is one of the most complex multi-stage missions to the Moon to date, with a spacecraft stack that is 22 ft tall.

We are proud to carry commercial and government payloads representing the U.S., Australia, Canada, the United Arab Emirates, and the United Kingdom. We expect the second Blue Ghost mission will launch next year, with specific timing dependent on delivery of our spacecraft and confirmation of the launch window. Following Riders Through the Dark, Blue Ghost’s mission to the Gruithuisen Domes is progressing through flight hardware production. The team has transitioned from design to build, and the hardware is taking shape with launch targeted in 2028.

Joining the Gruithuisen Domes mission is the new customer StarCloud, which signed an agreement with Firefly Aerospace during the third quarter to fly an advanced AI compute payload on the Electra vehicle. Together, StarCloud and Electra will look to validate the core capabilities of a future data center in the Moon’s orbit, which would support lunar surface and orbital infrastructure. StarCloud’s processor will ingest data from Firefly Aerospace’s Solix autonomous vision system, a critical technology we added as part of our acquisition of SpaceNG earlier this year.

Our StarCloud deal is a significant validation of our thesis that the Moon is a platform for commercial infrastructure, not just a destination for government science. We’re bringing together space-based compute and the cislunar economy. We’re not stopping there either, as Solix will support other commercial surface efforts related to the Moonbase program. I will share more on those in the future. Our Blue Ghost mission to the lunar south pole is making progress, with the team completing the critical design review to progress the mission’s development.

This is another hugely exciting mission as we pursue potentially groundbreaking research discoveries, such as looking for water ice that unlocks key Moonbase resources on the surface like breathable oxygen, rocket propellant, and science. Firefly Aerospace also signed Zeno Power Systems as a commercial payload customer to our accelerated Blue Ghost mission of the Moon’s near side. Zeno’s radioisotope heater payload is a remarkable cutting-edge technology which is critical to a sustained lunar presence.

Onboard Blue Ghost, Zeno will seek to demonstrate its Survive the Night package, which is intended to allow spacecraft and infrastructure to operate through the extreme cold of a long lunar night, which reaches below negative 275 degrees Fahrenheit. NASA’s Moonbase program is seeding the lunar economy. Our missions have bolt-on opportunities and hosted payload options for commercial customers, which improve each mission’s gross margins and unlock additional revenue sources.

Switching to Electra, the Moonfall mission passed through preliminary design review, verifying our spacecraft’s design to support this flagship NASA mission. As part of our $75 million subcontract, we are collaborating closely with NASA’s Jet Propulsion Laboratory to deliver their drones to low lunar orbit. This mission is a new frontier in lunar surface mobility and exploration, and we’re excited to be part of it alongside one of the world’s premier research institutions.

I recently visited NASA’s JPL and met with Director Dave Gallagher during our fireside chat in front of the JPL workforce, which you can watch online. I love the way Dave described the drones Electra is delivering: “There are going to be tremendous scouts for the resources you need, potential Moonbase locations, and there is a bit of national security flavor to this as well.” During the third quarter, Electra added another contract with the Department of Defense’s Defense Innovation Unit.

We are designing a mission that would have Electra provide deorbit services. Once we complete the preliminary design review, Firefly Aerospace will be eligible to compete for the next phase, which could include launch and spacecraft operations for a low Earth orbit mission. We are also fired up to have won a spacecraft subcontract to support NASA’s Skyfall mission to Mars. This is our first effort supporting a mission to the red planet and another statement mission for JPL.

And our spacecraft for the DIU’s Project Cinequone is entering integration and testing as we prepare for launch next year. Recently we completed testing the deployment of the folding solar panels for this Electra maneuverability mission. The orbiter is now at our spacecraft clean room to undergo the remaining steps of testing and integration. And finally, our subcontract with Benchmark Space Systems for the Department of Defense DARPA LASSA program is progressing to the next phase.

After competitive down-select, Benchmark advanced its feasibility and design effort for DARPA, and we’re pleased to support this lunar mission with our Solix autonomous vision navigation system. Now let’s talk about SciTech. Recently I had the privilege to visit the FORGE operations floor at Buckley Space Force Base in Colorado. There I witnessed an amazing group of Space Force Guardians and contractors dedicated to serving our nation and our allies. I saw FORGE operations in action with Firefly Aerospace’s SciTech team supporting. It made me very proud to see how we are directly supporting advanced processing of missile warning and tracking data using our in-house AI capability to force-multiply the Space Force’s work.

When I spoke to high-ranking Guardians, they told me that FORGE has been delivering results that not only the Space Force and our nation appreciate; they get phone calls from allied nations that they are grateful for the life-saving capabilities. These same Guardians also said they see Firefly Aerospace’s capabilities that no other contractor provides. FORGE continues to be one of our most consequential programs. The current geopolitical environment, including ongoing conflict in the Middle East and evolving global missile threats, has only reinforced the strategic importance of FORGE’s capabilities to our government customers.

FORGE is operational, it is performing, and the demand signals from our customers remain strong. During the third quarter, we added another operational milestone for FORGE, adding data to the system from the Space Force’s GEO Wide Field of View space vehicle. On a personal note, this milestone is a meaningful moment, as I built and operated that geostationary orbit satellite in my prior role. The spacecraft adds wide-area situational awareness and augmenting time-critical detection capability, further enhancing the FORGE system.

We are steadily executing operational advances on FORGE, in just the last few weeks adding new technical intelligence capabilities. Because our engineers are co-located with Space Force operations, we are able to respond directly to customer needs and advance the technology at unique speed. And now we’re further diversifying our capabilities and revenue into adjacent opportunities and programs of record. During the third quarter, we won a $94 million Space Force contract under the Ground Based Radar Digitization, or GBARD, program to support work overhauling legacy defense systems.

GBARD applies the FORGE playbook to radar modernization. We onboarded to the $981 million Space Force IDIQ contract for Knightstar. This allows us to compete for task orders that will support advanced space-based test and training operations through 2032. This represents another example of the synergies between our hardware and software capabilities. And we extended Firefly Aerospace’s Air Force contract for the Air Battle Management System Data Fusion program, which benefits from decades of expertise in sensor integration and multi-source data correlation.

Under this ABMS contract, we are integrating a new class of counter–unmanned aerial system sensor feeds into the cloud-based command and control system. CBC2 is a central component of the Air Force battle network, so we’re pleased to support integration of yet another data stream into the system. Since then, we received Air Force System Interoperability Test certification for the CBC2 system, a critical program milestone that establishes readiness ahead of operational acceptance.

Additionally, during the third quarter we onboarded to a $66 million IDIQ for work on our Instrumentation and Testing group while also executing a test campaign for our missile defense customer. All in, our advanced data and artificial intelligence business is executing well and steadily broadening its scope into new programs of record. We are building toward a future where we provide our customers an on-demand app store with missile warning, space domain awareness, position, navigation, timing, targeting, and exploration services.

With that business summary, I’ll turn it over to Darren for a review of the third quarter financials.

Darren Ma (Chief Financial Officer)

Thank you, Jason. We delivered our second consecutive quarter of more than $100 million in revenue that brought year-to-date revenue to $309.2 million, representing growth of 203% compared to the first nine months of the prior year. Our third quarter results demonstrate the strength across Firefly Aerospace’s diversified portfolio and reinforce our strategy to build a fully integrated space and defense technology company. Third quarter revenue of $110.7 million represented a strong 259% increase year over year and compares with $30.8 million in the same quarter a year ago.

Notably, our third quarter performance was achieved without a revenue benefit recognized in the second quarter from an accelerated national security hardware order. Within total revenue, Spacecraft accounted for $106 million and Launch was $4.7 million. Our third quarter results demonstrate the strength and resilience of our business model. To briefly explain our revenue recognition model, the Spacecraft Solutions business generally recognizes revenue over time under each contract on a percentage-of-completion basis. For the Launch business, revenue for Alpha is recognized at a point in time when a launch occurs, while Elytra revenue is recognized over time based on program milestones. As part of our Northrop Grumman partnership, Elytra will shift to point-in-time revenue when the vehicle is operational.

We ended the third quarter with a total backlog of approximately $1.7 billion, up from $1.5 billion last quarter and up from $1.3 billion for the same quarter a year ago, driven primarily by the ground-based Radar Digitization award, additional hardware server orders, and an additional Alpha Hypersonics task order. The majority of our third quarter revenue represented backlog conversion, but over $300 million in new customer contracts more than replenished the revenue recognized within the quarter.

Backlog remains one of our strongest indicators of future revenue growth for our business. Third quarter GAAP gross margin was 22.9% compared with 20.3% in the prior quarter. The sequential improvement was driven by favorable product mix, as lower-margin hardware server purchases weighed on Q2. As a reminder, the primary GAAP-to-non-GAAP adjustments to operating expenses are stock-based compensation expense, one-time transaction-related expenses, and the amortization of intangibles. Operating expenses for the third quarter were $104 million compared with $94.3 million in the second quarter.

The increase represents R&D investments in our next-generation launch vehicles, bringing online Alpha Block 2, and ramping up Elytra development. Operating loss was $78.7 million compared with a loss of $70.4 million in the second quarter. Our net loss in the third quarter was $75.4 million, or a net loss of $0.45 per share. This compares with a net loss of $67.7 million in the prior quarter, or a net loss of $0. per share last quarter. The third quarter net loss per share figures were calculated using a weighted average share count of 168.4 million due to a series of option exercises throughout the period.

Our third quarter ending share count was 171.6 million shares, and we expect this number will increase by about 1 million shares per quarter. Stock-based compensation expense was $15.3 million in the third quarter, compared with $17 million in the prior quarter. Adjusted EBITDA in the third quarter was a loss of $69.5 million, compared with a loss of $61.2 million in the second quarter. Our balance sheet remains strong, ending the quarter with total liquidity of $839.7 million. This consists of $534.7 million in cash, cash equivalents, and short-term investments, and $305 million of available capacity from our revolving credit facility, which remains undrawn. Capital investments in the third quarter were $15.6 million, compared with $24.7 million sequentially. The sequential decline primarily came from the completion of investments related to test upgrades to support Alpha Block 2, the spacecraft clean room expansion, and other infrastructure improvements to support our growth objectives.

Free cash flow was an outflow of $85.3 million, compared with an outflow of $106.3 million in the second quarter. As a reminder, the Q2 number included the final SciTec acquisition-related payment of approximately $24 million. Regarding our revenue outlook for 2026, we are updating the 2026 revenue range to $440 million to $450 million from our prior range of $420 million to $450 million. This increases the midpoint of our guidance to $445 million from $435 million.

In closing, our financial strength rests on a diversified revenue base, an expanding backlog, and substantial liquidity to support disciplined investment. We continue to identify ways to optimize our programs by leveraging our core technologies while retaining the capital-efficient discipline that has accelerated our development in just nine years as a company. To highlight a few examples from our playbook, we are leveraging the proven Blue Ghost lander for subsequent missions and deployed a lift-and-shift strategy which leverages many years of investment in the Forge missile defense system, unlocking adjacent opportunities like GBAR and ABMs.

Additionally, we’ve tapped non-dilutive funding sources such as the Texas Space Commission’s grant program for a clean room expansion. The AST agreement is the latest example of this playbook. Our Miranda and Vera engines represent proprietary technology that very few companies in the world possess. Now we are leveraging and monetizing that technology. With that, I’ll turn the call back to Jason.

Jesung Kim (Chief Executive Officer)

Thank you, Darren. As I think about where Firefly Aerospace stands today, three things come to mind. First, Alpha production is ramping up. The factory is humming with Block 2 manufacturing and assembly, giving me confidence after Flight 8 launches. Alpha flights 9, 10, 11, and 12 are right behind it. We made upgrades to our test stands, our Vandenberg facilities, and are making progress on both our Virginia and Sweden launch sites. And we added new international customers thanks to the deals with SSE Space and Synspective.

Second, our platform is expanding. We added multiple commercial partnerships for our upcoming lunar missions. The DIU Deorbit contract validates another growth vector for Elytra’s orbital services. Forge validates the national importance of what SciTec brings to the Firefly platform, and our agreement with AST SpaceMobile validates the extreme scarcity value of our propulsion technology. Third, our team is world class. They have delivered these results every quarter and are the reason Firefly wins. Fireflies are bold, resilient, and passionate, and I am proud to support them. Our team has led Firefly to land on the Moon, launch in 24-hour call-ups, and provide operational no-fail AI defense software. We have a robust, diversified space and defense business. Every quarter, the addressable market for what we are building grows larger.

Thank you for joining today’s call. Michael, back to you.

Michael Sheets (Director of Investor Relations)

Thank you, Jason. We will be attending multiple investor events in November and December, and we look forward to seeing many of you in the coming weeks. Operator, we’re ready to take questions.

OPERATOR

Thank you. And as a reminder, to ask a question, simply press star one one on your telephone and wait for your name to be announced. To remove yourself, press star one one again. One moment, please. For our first question, it comes from Sheila Caioglo with Jefferies. Please proceed.

Sheila Caioglo (Analyst)

Thank you, and good afternoon, guys. Lots of developments this quarter, so two questions if that’s okay. With Firefly now onboarded to the $10 billion CLPS 2 IDIQ, can you just talk about how the scope of that opportunity changes relative to the existing program, and maybe more specifically, what additional mission types or larger payload classes can Firefly now address? Thank you.

Jesung Kim (Chief Executive Officer)

Hey, Sheila. We’re very pumped and excited about onboarding onto CLPS 2. Just, you know, going back to last year, we were the first company to successfully land on the Moon, and we did that with our Blue Ghost Mission 1, which was part of the $4 billion CLPS 1.0 program. There’s still a few outstanding bids there that we’re still waiting for as long CLPS 1.0, but CLPS 2—really excited because we began design work on that ahead of time, and a lot of the fundamental technologies that allowed us to successfully land on the Moon are also embedded on our larger landers.

And so that gives a lot of confidence to NASA and to Firefly, as well as some of our commercial customers that are bolt-on opportunities. And so we’re really excited. Some of the things that we could launch with the larger cargo lander are things like light terrain vehicles. I think you remember that Carlos from the Moon base program mentioned that they awarded a couple of those light terrain vehicles already. So we’re excited about that opportunity to take mobility to the Moon. There’s also other cargo that can help sustain a permanent human presence on the Moon. If you remember, the Moon’s whole surface area is about the size of Africa, and then the usable part of the South Pole, which we believe has all the resources like water ice and other resources to sustain life, is about the size of Washington, D.C. And so we’re excited about those missions and supporting any cargo that helps with a permanent presence on the Moon with humans. And then there’s a lot of other science that we can gather as well.

But I’m really particularly excited about manufacturing on the Moon as well. There’s a lot of resources like water ice I mentioned that could be converted into propellants. There are some rare earth minerals that could potentially be used for manufacturing. The regolith itself can be used and converted into different fabrication as well. And then there’s a whole economy, a commercial economy, that can be built upon what NASA and other global agencies are doing.

But in addition to that, we’re also seeing a lot of demand on the national security side. You saw that the Space Force stood up a whole organization to coordinate things in cislunar space, led by Major General Stephen Purdy. And so we expect that there will be more and more. Maybe it starts out with 10% scope. You know, the Moon base is bigger than just the $30 billion opportunity that NASA is talking about with the Moon base. You know, there’s potentially 10% of what goes to the Moon might be Space Force-based.

It might go up to 25%. We already saw requests for information for up to five satellites to go and look around cislunar space. And those are the kinds of things that we’ve invested in with our acquisition of Space NG, with the Vision autonomous navigation camera systems that we have now in-house. And we’re able to deploy things like the Oculus service to provide space domain awareness, even beyond just space exploration.

Sheila Caioglo (Analyst)

That’s really helpful long-term color. If I could ask one more, maybe a little bit more short term. As we think about fiscal ’26 guidance, we raised the low end of the revenue guide, but Flight 8 has now moved into Q1. Maybe can you help us bridge what’s driving the revenue uptick, and are any Alpha launches achieved in Q4 revenue? Thank you.

Darren Ma (Chief Financial Officer)

Yeah. Hi, Sheila, this is Darren. So for the remainder of this year, there’s definitely some moving parts there. There’s strength in the spacecraft business—you know, we’re working on five Moon programs all in parallel. And there’s strong demand on the AI software solutions side, really offset by some of the revenue impact on launches. Jason discussed one of the strengths of our business model is that we have a diversified portfolio that generates revenues, and basically the AST deal also adds to this multiple of revenue streams that we already have in place.

Sheila Caioglo (Analyst)

Great, thank you so much.

OPERATOR

Thank you. Our next question comes from Edison Yu with Deutsche Bank. Please proceed.

Edison Yu (Analyst)

Hi. Congratulations on the deal with AST. Thank you for taking our questions. Wanted to ask about the AST, the rev rec. I’m sure you guys know better than anyone, right? Rocket programs historically probably average 3 to 5 year delay. If there’s any sort of delay on their end, has nothing to do with you. Does that impact the rev rec at all, if we think in the next couple years?

Darren Ma (Chief Financial Officer)

Hey Edison, this is Darren. I mean, when you look at the revenue recognition for this program, it’s broken up into two parts. The IP portion is tied into the services portion, which we’ll be recognizing as we perform over the three-year time period. And then the engine deliveries will also be recognized as we deliver the engine. So if there is any delay on their side, I don’t believe it has any impact on us in terms of revenue recognition.

Edison Yu (Analyst)

Okay. And then just a follow up also on the deal. You mentioned, I think in the prepared remarks, that the gross profit margin contribution help expand in any sense. How we can think about just the incremental margin. Is this basically kind of almost pure margin? Is there some like small expense to just… just how to think about it as we kind of layer in all this revenue?

Darren Ma (Chief Financial Officer)

Yeah, I think the way to think about it is, when you look at our gross margin, you know, right now we’re in the mid-20s, and because the IP portion of it is tied closely to the services and recognized at the same time, that will provide incremental gross margin expansion as we execute on this deal. But there will be some gross margin expansion associated with the contract.

OPERATOR

Great, thank you. Thank you. Our next question comes from the line of Christine Lewog with Morgan Stanley. Please proceed.

Kyle Benvenuto (Analyst)

Hi, this is Kyle Benvenuto on for Christine. Thank you for taking my question and congrats on all the progress this quarter. I wanted to ask about SciTech and the outlook for the business. First, with that $94 million GBARD award and onboarding to the $981 million Nightstar IDIQ, extending the Forge playbook into the adjacent programs of record, how should we think about SciTech’s organic growth heading into 2027 and how much could Nightstar task orders and other new programs contribute relative to the existing Forge base?

And then second, as the business scales, you previously discussed moving more of SciTech’s work towards fixed-price contracts. So how far along is that shift today and how much margin uplift do you see as programs like Forge move from cost-plus development into repeatable software-driven deployments? Thank you.

Jesung Kim (Chief Executive Officer)

Yeah, I’ll try to unpack all those multiple questions, but I am super excited about SciTech, just like you are. I’ll go back to Forge. Forge is built upon a foundation of over 45 years of algorithm development specifically for national security and more specifically for missile warning and missile tracking. And so when you look at the Forge program, it’s, you know, an $800 million program and counting total value. And you know, that program is doing no-fail operational missions right now.

I was at the mission operations floor, and it was eye-watering what SciTech is doing in support of that mission, helping to save lives of our war fighters and our allies. A lot of the work that’s on there, both the data center hardware work and the framework that’s applied to it and the mission applications for missile warning and missile tracking, a lot of that is transferable, and you can lift and shift that capability into things like winning Ground Based Radar Digitization program. Now what we did was we lifted and shifted the framework in this case, and it helped us accelerate our capabilities compared to the landscape, and we were able to win the phase one, which is around a $94 million first phase.

There’s a lot of upside opportunities there. It could be around $400 to $500 million of upside. But we’re focused on working with our team that we assembled to provide an asymmetric capability to modernize the ground-based radar legacy programs so that we can provide more missile warning, missile tracking, and space domain awareness for the war fighters. So that’s one example. There is growth upside opportunity there. But then I’m also excited about lifting, shifting, you know, the things we learned from both Forge and GBARD into other types of areas like position, navigation, timing, air moving target indicator, ground moving target indicator, and space domain awareness. So a lot of those kinds of algorithms are very transferable, and they’re proven in battlefield today. And we’re using AI, we’re improving the AI, so we’re really excited about those opportunities.

And then in terms of firm fixed-price contracts, you know that’s been a movement for a few years now, and that’s why a lot of the Space Force migrated to these other transaction authorities, or these OTAs, which are primarily firm fixed-price type contracts, going away from the cost-plus type contracts. And you know those have opportunities, as long as you execute, for gross margin expansion. So we’re really excited about the future of what we do with SciTech and don’t count us out in terms of upside opportunities of taking SciTech algorithms and deploy it to space as well.

Because the name of the game in national security is to be faster than the adversary’s OODA loop. And by bringing things to orbit and doing things with lower latencies, we can be within the adversary’s OODA loop.

Kyle Benvenuto (Analyst)

Very helpful. Thank you, Jason. I’ll turn it over.

OPERATOR

Thank you. Our next question comes from Michael Leshock with KeyBanc Capital Markets. Please proceed.

Michael Leshock (Analyst)

Hey, good afternoon. I just wanted to ask, given how constrained the launch supply-demand market is today and for the foreseeable future, particularly just thinking about Falcon 9 sunsetting over the coming years, and then also given the prices that medium-lift vehicles are commanding in the market today for the latter part of this decade, has that changed your pricing approach at all for future Eclipse or Alpha launch agreements?

Jesung Kim (Chief Executive Officer)

Yeah, absolutely. We’re seeing the most highly constrained launch supply environment ever, and we’ve got a lot of inbounds. As you see, we signed two Alpha contracts with Sweden, as well as up to 10 with inspector from Japan, and another confidential hypersonic test launch with Alpha. So we’re seeing that demand turn into actual contracts, and the pricing power is there. When you look at our Victus SOL mission that we signed with the Space Force previously, that was a $22 million contract, and we’re seeing things with upside opportunities higher than those prices lately.

And so we do see that on our Alpha missions, which are very, very uniquely suited for national security, like hypersonic test launches, as well as typically responsive space launches and other. In terms of Eclipse, we are heads down, and this deal that we did with AST, it’s really a win-win because what it does is it injects capital that is helping our Eclipse program at the same time as helping AST. And so we’re going to be ramping up our Miranda production and, you know, also our production of Eclipse in general with the additional engineering and manufacturing supply chain stuff — the injection of hardware-rich long-lead materials buys, optimal equipment, as well as more integration and test capacity.

So all that is going to help us get Eclipse up and running as soon as possible because the demand is so high. And we do see that the demand affords higher pricing for medium lift as well.

Michael Leshock (Analyst)

Great. And then on the AST agreement, the release had said it was non-competitive by design and purpose-built for AST’s payloads. Just curious if you could give any color on the formal restrictions on how the engines and IP can be used and what’s in place there. Is AST only allowed to launch its own internal AST payloads, or is there potentially some reality where they could become another launch provider for the commercial market over the long term?

Just any clarity on that would be great. Thank you.

Jesung Kim (Chief Executive Officer)

Yeah. It’s important to note that Firefly retains ownership of our core intellectual property, and that’s Miranda, while AST focuses solely on launching its own constellation. You know, they have a great business of direct-to-mobile constellations, and they’re going to ramp up continuously. And because they’re ramping up their proliferated constellation, they need to basically control their launch schedule and their capacity. And so I see them being laser-focused on launching their own constellations while we are unwavering in terms of launch capability of our Eclipse rocket for commercial and government customers.

And so it’s truly a strategic transformational deal. It’s a win-win.

OPERATOR

Thank you. Thank you. Next question comes from Seth Siffman with JP Morgan. Please proceed.

Alex (Analyst at JP Morgan)

Yeah, hey guys, this is Alex on for Seth. Good afternoon. Hey, so wanted to ask — I guess no one’s really directly asked about this yet — and get that you guys don’t really want to share specific plans on how to think about, you know, Alpha rockets launch cadence next year. But you guys have kind of outlined that, say, the next five or so Alpha rockets are under various stages of production. You know, curious if everything kind of goes according to plan, is that, you know, maybe a reasonable baseline to think about, about how many launches you could do next year?

And then, you know, off of that, thinking about this AST deal, like how much does the capital that, you know, you guys are getting from them potentially help accelerate, you know, your ability to do launches next year?

Jesung Kim (Chief Executive Officer)

Hey Seth, I just will give you a data point just from today. Within three hours today at our Rocket Ranch, which is all co-located, vertically integrated with our test stands, we ripped a bunch of engine tests. Two Reavers were hot-fired today. One Lightning was hot-fired. One Miranda qualification was hot-fired as well. This was all within three hours of each other today. And so you could see that our test capabilities are just ramped up. And then when you look at Alpha Block 2, the whole point of the upgrade was to make it more manufacturable and reliable.

And so that’s being seen and manifested on the factory floor. So if you look at Building 3, we’ve got Flight 8 and Flight 9 there for integration, finishing off integration. Flight 8 is getting ready, prepared for shipping to Vandenberg. Flight 9 is getting all the Reaver engines and Lightning engines assembled to integrate. And then Flight 10, all the composite structures are proof-tested. Flight 11 composites are finishing up. Flight 12 composites are starting up.

We’ve got 24 Reaver engine chambers that are in flow right now — that’s about six ship sets right there. And this is all within the fourth quarter. So we’re really excited about, you know, going forward. Building upon that success, we opened up our Cortex feeder line for all the avionics and harnessing as well. So that’s ramping up. So everything is humming in our production factory floor. And the test capabilities are also ramped up, as I mentioned before. And then in addition to that, we’ve upgraded Vandenberg for Block 2. I just was at Wallops, Virginia earlier this year, and we’re making progress there with all the different components of that launchpad.

And then Sweden, I was there earlier this year as well, and same thing — we’re making a lot of progress there. So, you know, we’re just ramping up in all areas. Yeah. As I mentioned before, we’re heads down on Eclipse. We’re laser-focused on delivering the first stage to our co-developer Northrop Grumman. And we’re over 175 hot fires on Miranda, you know, count the one from today. And we’re looking at all the data, verifying the capability. It’s a very mature engine, and we’re very confident in its capabilities. We’re building ahead the flight engines as well.

Everything is just laser focused on all the milestones in terms of qualifying Miranda and qualifying our composite tanks and fluid systems as well. We’re really just excited about the future of Eclipse, especially with this injection of capital that will help accelerate our production line.

OPERATOR

Thank you. One moment for our next question that comes from the line of Griffin Boss with B. Riley Securities. Please proceed.

Mike Crawford (Analyst)

Yeah, this is actually Mike Crawford from B. Riley Securities. But just further on Eclipse, your partner ASTS is building the simpler rocket by design to only go to LEO versus Eclipse can go all the way to trans-lunar injection. But is there a reason why they would be using a three-stage rocket if it’s supposed to be a simpler rocket versus the two-stage Eclipse?

Jesung Kim (Chief Executive Officer)

Yeah, hey Mike, you know that’s AST’s design. They are responsible for the overall design of their Blacklift rocket. As we mentioned before, we’re providing the IP for the Miranda engines as well as providing the first three ship sets of 36 engines to them for those first three launches. There’s some engineering services as well that we’re going to provide to them, but that is AST’s design. They are focused on mass of their constellations of the Bluebirds on each launch.

That’s why they’re focused on what they have in terms of their three-stage design. Whereas for our Eclipse rocket, we’re building the railroad to the Moon. And so we’re looking at a number of different missions for commercial and government customers to include Moon missions as well. So that’s why we have a different stage design. Okay, thank you, Jason. And then just regarding Electra, could you maybe help compare and contrast some of its RPO and maneuverability abilities versus competitors like True Anomaly Jackal or Quantum Space Scout or Turion, etc. Yeah. A lot of the fundamental technologies that made the Blue Ghost Mission 1 successful, all the way from the seven major burns that we had to do through translunar injection, all the way to low lunar orbit and then finally braking and maneuvering and descending softly onto the Moon’s surface—a lot of those things are built into our Electra spacecraft and provide us heritage. And as you know, we traversed through many days—45 days—through LEO, MEO, GEO, cislunar, all the way to the Moon.

So we have heritage in all those orbits. What I would say is the capabilities that Electra affords is a lot of fuel. We have chemical propulsion systems, so there’s a lot of fuel that we can carry on board. We use carbon composites for our primary and secondary structures, which means you can put more into the mission payload. And so we have a system that not only is maneuverable with precise millimeter-per-second kind of precision of thrust, but we also have a lot of lightweight structural technology that allows us to carry more mission payload capability, like optics, like camera systems, and other systems that can help with space domain awareness.

We also acquired SpaceNG earlier this year, and their autonomous navigation camera system allows us to perform a lot of autonomous maneuvers, including RPO. And so it’s a really great capability that has flight heritage and can operate in all the different orbits. And as I mentioned before, the Moon is the ultimate high ground, and so everything is moving more towards cislunar space. And the Space Force is going to need more space domain awareness in that area, and we already have capability that has been proven in that area. In addition to that, we signed some really great commercial hosted options like Star Cloud, and now we’re providing AI from our Electra spacecraft as well. So, really excited about Electra’s future.

Mike Crawford (Analyst)

All right, thank you. Thank you, Jason.

OPERATOR

Thank you. Our next question comes from David Strauss with Wells Fargo. Please proceed.

Ben Thomas (Analyst at Wells Fargo)

Hey, this is Ben Thomas going for David. Could you guys just talk about how should we think about the cash burn for the full year and into 2027 and how much incremental CapEx should we expect related to the AST agreement?

Darren Ma (Chief Financial O