Terran orbital It may be about to receive a big boost from its largest customer, CEO Mark Bell announced internally at a company-wide meeting earlier this month. Rivada Satellite Networks It is in the final stages of closing financing to help finance a massive constellation that Terran will build at a cost of $2.4 billion, revenues that currently make up the vast majority of Terran’s backlog.
While Terran is seeking other lucrative contracts that could involve billions in work, its $2.4 billion contract with Rivada is by far the largest it has secured to date. Earlier this quarter, Terran was forced to revise its full-year financial forecasts after Rivada was late in paying an additional $180 million toward the total contract awarded.
The Terran President and CEO broke the news to employees during a December 19 meeting.
“I had dinner with [Rivada CEO] Declan Ganley last week in D.C.,” Bell told staff during the meeting, a recording of which was obtained by TechCrunch. “He told me they expect to close tomorrow on their financing. Show me the documents. I saw them, I read them. He texted me this morning and probably Thursday and Friday now. […] As long as it’s Christmas, I’ll be happy. “There’s nothing wrong with getting a good Christmas gift.”
Rivada, a German subsidiary of US-based Rivada Networks, contracted Terran to build 300 satellites for the mega-constellation under a $2.4 billion agreement in February this year. Rivada has a separate deal with SpaceX to launch satellites starting in April 2025.
Naturally, Christmas has come and gone and neither company has made any public announcements about financing. TechCrunch reached out to both for comment and neither responded as of press time. Bell said later in the meeting that even if Rivada closed the financing, the two entities would have to make an amendment to their contract, which could delay payment terms and public announcements.
“He’s very transparent with me, so I have no reason not to believe him,” Bell said of Ganley. “But unfortunately, he’s not the one writing the check, someone else is writing the check to him. But if he gets a check, I have to assume we’ll get a check. But we have to amend the contract. That’s the only thing that might hold us back, because We have to make an amendment to the contract. […] But at least we’ll get our money on the bill that’s due, the $9 million bill. But I want to get the big check, as does everyone else, because that will help tremendously with our stock price and everything else in our world.
On a call with investors in November, Bell said Rivada’s financing and payment delays were a “big surprise” for both companies. He added that Rivada’s funding source is a “large sovereign fund” – presumably a sovereign wealth fund – and that the two companies expect to eventually close the funds.
As of November, Terran reported a future backlog of $2.6 billion, including $2.4 billion from the Rivada contract. Even without the expected significant boost, Bell told employees he still expects the company to generate $130 million in revenue this year, a significant increase from the $94 million the company generated in 2022.
The company is also pursuing other high-value contracting opportunities, including with the Space Development Agency’s Proliferative Combat Engineering constellation. Terran has already built and delivered satellites for the initial tranche of the constellation, Tranche 0, and is currently building 42 space buses for Tranche 1 and will build an additional 32 space buses for Tranche 2. Bell said the company will also seek additional award satellites for a variety of satellites. Tranche 2 is named Gamma, perhaps as the prime contractor for that prize (for others, Terran is a subcontractor to main winner Lockheed Martin).
“We feel good about Gamma and how we are going to win. We are thinking about preparing Gamma rather than it being just a sub […] But for now, we’re likely to finally be ahead of the curve on these matters. That would be huge. That would change the dynamic. But I have not made a decision yet. We will sit down and talk to Lockheed about this matter.”
Bell also told employees that the company is still in talks about taking Terran private, but the goal would be “to go private, then take it public again in the traditional way and not have this stupid market capitalization that we have today.” He said.
Terran Orbital’s share price has collapsed since it went public via a SPAC – a reverse merger with a special purpose acquisition company – in March last year. The company debuted with a share price of $10.96, but today shares are trading for around $1.22.