Sidus Space CEO Talks Q1 Earnings, Space-And-Defense-As-A-Service, And More

Carol Craig is Chief Executive Officer at Sidus Space SIDU, a multi-faceted Space and Defense-as-a-Service satellite company with a focus on manufacturing mission-critical hardware, commercial satellite design, launch, and data collection. Craig recently took retail investor questions about Sidus Space’s Q1 earnings, revenue model, and more via the Public.com investing platform. Here’s an exclusive recap of the Town Hall event for Benzinga readers.

Can you describe what you mean by space-as-a-service? Is it similar to AI where innovation is now becoming a tool to be leveraged by more companies? 

CC: We actually describe ourselves as a Space and Defense-as-a-service company which refers to our ability to provide an end-to-end solution across all areas of the Space Domain along with specific services depending on the customer needs. Key to this offering is the ability to provide vital data from our constellation, without each client having to purchase their own hardware and launch it into space themselves. Our goal is to provide the benefits of LEO imagery and sensors to many parties, including consumers.
Edge AI is a key component of our space and defense-as-a-service strategy. By processing key information on orbit using our AI technology before it is transmitted, we can increase the speed of data transfer and provide near-real-time transmission of data.

Can you briefly describe your revenue model and key customer segments? Are the projects and partnerships one-offs or longstanding programs with recurring revenue?

Carol Craig: We currently have multiple, diverse revenue streams including: Data & Actionable Intelligence, Satellite Design & Manufacturing, On-Orbit Testing, Mission Critical Manufacturing, Engineering, and Custom Solutions. These include both long-standing revenue-generating partnerships and custom contracts from a number of customers. Of course, we are most excited about the recent increase in revenues related to our satellite revenue stream, which we intend to grow into a high-growth, high-margin, recurring revenue stream as we build our LizzieSatTM constellation.

In your Q1 earnings release, you reported revenue growth of 26%—what makes you most excited about this huge uptick? What do you attribute this growth to?
CC: We increased our satellite-related revenue, largely due to the contract with SpaceX that outlined our launch cadence.

What are you most proud of from your Q1 earnings?
CC: Our increase in satellite revenue and the very little debt on our balance sheet.

How do macroeconomic conditions impact the space industry, if at all? If some of your customers are government entities, are there concerns over budget cuts there, or is this a space that continues to see continuous investment? 

CC: According to Euroconsult’s Prospects for the SmallSat Market, 8th Edition, July 2022, The SmallSat manufacturing market, which is estimated to be $55.6 billion, is anticipated to grow over 250% in the next decade, so we are certainly anticipating continued investment in this space. While budget cuts are always a concern, our 10-plus years of experience working with government contracts, our ability to provide a lower-cost solution through our vertically integrated process, and our ability to scale in a controlled manner gives us an advantage when negotiating the ups and downs created by macroeconomic fluctuations. According to McKinsey & Company, commercial funding could surpass government funding within 20 years. How will the Space Economy Change the World. 

How do you view the competitive landscape for satellite technology? Is this a winner-take-all industry, or are there roles for different companies in different areas?

CC: The emerging space industry is huge, with an estimated $1 trillion market by 2040. The SmallSat market itself is also very large, at $56 billion, and is expected to grow over 250% in the next decade. We see this as a wide-open landscape with plenty of room for growth from a variety of players. Certainly, competition will increase, but we hope that collaboration will also increase, creating “competimates” that can work together for maximum effect.

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