CislunarEquities

SPAC Shareholders Set to Vote on Intuitive Machines Merger

Intuitive Machines Nova-C mission render
Nova-C mission render. Image: Intuitive Machines

On Wednesday morning, shareholders are set to vote on Intuitive Machines’s reverse merger with Inflection Point Acquisition Corp ($IPAX), a Nasdaq-listed SPAC. If investors vote to approve the de-SPAC, the combined entity will be listed under the new ticker symbol $LUNR. 

SPAC facts, at a glance

Intuitive Machines, headquartered in Houston, announced its intentions to go public last September. The company expects the transaction to generate $331M in gross proceeds and grant the combined entity an enterprise value of ~$817M. 

The business

The company has received three CLPS contracts, with NASA clearly being its anchor customer. Intuitive Machines reports $369M in bookings and a contracted backlog of ~$188M. In its Dec. 2022 investor deck, Intuitive Machines management points to a revenue ramp and a total addressable market (TAM) that for all intents and purposes is still theoretical. 

  • Intuitive Machines made $8M in 2018, $20M in 2019, $44M in 2020, and $73M in 2021. 
  • The company anticipates making $88M in 2022 (revised downward from a $102M estimate given last September), $300M in 2023, and $759M the subsequent year. 
  • Big, if true…from 2021 to 2024, Intuitive Machines’ revenue projections would represent a CAGR of 119%. 
  • Intuitive Machines says it’s targeting a three- to five-year gross margin of 52%, and expects to generate “positive cash flow” in 2025. 

The breakdown

Intuitive Machines’s business is split up among four divisions: 

  1. lunar access services
  2. lunar data services
  3. orbital services
  4. space products and services

#1 is the most mature and “proven” segment, responsible for 92% of expected 2022 revenues. By 2024, though, Intuitive Machines expects lunar access services to be just ~37% of the revenue mix ($279M), with lunar data services at 14% ($106M), orbital services at 17% ($129M), and space products and services at 32% ($246M).

  • Reading between the lines (and charts), #1 represents a solid pipeline for Intuitive Machines in the years ahead. 
  • The other segments, though, require execution on #1 (i.e., the lunar landers have to land) and bigger leaps of faith for investors. 

What to watch for

Assuming the de-SPAC receives investors’ blessing in Wednesday’s vote, we’ll then want to watch the redemption rate—or percentage of shares redeemed by SPAC investors prior to a merger closing. We’ll also want to see how $LUNR trades; $IPAX was trading at $9.11 as of press time. Finally, of course, we’ll keep close tabs on the company’s IM-1 mission, set to launch in the first half of this year and take the express route to the Moon. 

+ While we’re here: This morning, Intuitive Machines said that NASA has redirected the IM-1 landing site to the lunar South Pole region.

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