Earth orbital may be close to receiving a large payment from its largest client, CEO Marc Bell announced internally at a company-wide meeting earlier this month. Rivada Space Networks is in the final stages of closing financing to help fund a mega-constellation that Terran will build at a cost of $2.4 billion, proceeds that currently make up the vast majority of Terran's backlog.
While Terran pursues other lucrative contracts that could encompass billions in work, its $2.4 billion contract with Rivada is by far the largest it has landed yet. Earlier this quarter, Terran had to adjust its full-year financial outlook after Rivada delayed paying a $180 million increase toward full contract award.
Terran's president and CEO broke the news to staff during the December 19 meeting.
“I had dinner with (Rivada CEO) Declan Ganley last week in DC,” Bell told staff during the meeting, a recording of which was obtained by TechCrunch. “He told me that they hope to close his financing tomorrow. 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 Christmas, I'll be happy. There is nothing wrong with receiving a good Christmas gift.”
Rivada, a German subsidiary of US-based Rivada Networks, contracted Terran to build 300 satellites for the megaconstellation under a $2.4 billion deal in February this year. Rivada has a separate agreement with SpaceX to launch the satellites starting in April 2025.
Of course, Christmas has passed and neither company has made any public announcement about funding. TechCrunch reached out to both for comment and neither responded as of press time. Bell said later in the meeting that even if Rivada closes the financing, the two entities would need to make a modification to their contract, which could delay payment terms and public announcements.
“He's being very transparent with me and so I have no reason not to believe him,” Bell said of Ganley. “But unfortunately, he is not the one who writes the check, someone else writes it to him. But if he gets a check, I have to assume we get a check. But we have to make a contract modification. So that's the only thing that could stop us, because we have to make a modification to the contract. (…) But at least they will pay us the bill that is owed, the bill of 9 million dollars. But I want to get the big check, like everyone else, because that will dramatically help our stock price and everything else in our world.”
In a call to investors in November, Bell said Rivada's financing and payment delays were “a big surprise” to both companies. He added that Rivada's funding source is “a large sovereign” – presumably a sovereign wealth fund – and that the two companies hope the money will close eventually.
In November, Terran reported a future work backlog of $2.6 billion, of which $2.4 billion is on the Rivada contract. Even without the expected milestone payment, Bell told staff he still expects the company to generate $130 million in revenue this year, a notable increase from the $94 million the company earned in 2022.
The company is also pursuing other high-value contract opportunities, including the Space Development Agency constellation known as the “Proliferated Warfighter Space Architecture.” Terran has already built and delivered satellites for the initial leg of the constellation, Tranche 0, and is currently building 42 satellite buses for Tranche 1 and will build an additional 32 buses for Tranche 2. Bell said the company will also pursue an additional satellite . award for a variant of Tranche 2 satellites called Gamma, possibly as prime contractor on that award (for the others, Terran is a subcontractor to prime winner Lockheed Martin).
“We feel very good about Gamma and how we are going to win. We are contemplating preparing Gamma instead of just being a substitute (…) But right now the odds are equal that we can finally be a main in these things. And that would be huge. It would change the dynamic. But I haven't made a decision, we will sit down and talk to Lockheed about it.”
Bell also told staff that the company is still having talks about taking Terran private, but that the goal would be to “go private and then go public again the traditional way and not have this stupid market cap like we have today.” “. saying.
Terran Orbital's share price has plummeted since it went public via SPAC (a reverse merger with a special purpose acquisition company) in March of last year. The company debuted with a share price of $10.96, but today shares are trading at around $1.22.
