Terran Orbital Nabs Rivada Payment

Image: Terran Orbital

Terran Orbital ($LLAP) announced yesterday that after months of delays it received a key Rivada Space Networks milestone payment for its mega-contract to build 300 internet satellites.

The company said in a release that the payment was for the completion of a program milestone, and that Rivada “is current on all outstanding invoices.”

Though the total value of the payment was not disclosed, its confirmation is expected to come as welcome news for investors who had become skeptical of the massive $2.4B contract and newcomer Rivada’s ability to fund the project. The $LLAP share price jumped 11% on Tuesday. 

Dollar amount: While not explicitly disclosed, the dollar amount of the payment appears to be less than the $180M+ the company has been expecting.

  • The company announced yesterday its end-of-year cash balance increased to $70M+, a jump from the $38.7M it reported in Q3, “primarily resulting from the receipt of key customer payments at year-end.” 
  • Considering the company’s average cash burn of $38M a quarter, the payment likely came in short of the $180M anticipated wire transfer.

Nevertheless, the payment will provide Terran Orbital with some much-needed short term liquidity relief. The company said it expects to receive additional Rivada milestone payments in 2024 as it prepares to begin delivering buses in 2025.

Late to the game: Rivada appeared out of nowhere in 2022 with a high-priority chunk of spectrum, splashy plans for a nearly 600-satellite comms constellation, and a looming deadline from the International Telecommunications Union (ITU) to deploy the fleet. In July, the ITU signed off on Rivada’s request to extend its constellation deployment timeline, citing sufficient financing.

Rivada is a new player entering a crowded satellite internet market. Established players like Starlink and OneWeb have a significant head start, and Amazon is waiting in the wings with a $10B commitment to its own mega constellation. 

Terran Orbital won the $2.4B contract to build the Rivada constellation in early 2023. The award represents the vast majority of Terran Orbital’s Q3 $2.6B total backlog. 

Terran’s other projects: In October, Terran Orbital won a large Lockheed contract to build 36 Tranche 2 Transport Layer satellite buses (which has not yet been included in the reported backlog). The company is also building 42 Lockheed buses for Tranche 1, which is expected to launch in late 2024. 

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