Investing in Space: The military doled out $6 billion for rocket launches — and it's not done yet
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Overview: Launch & Orders (Space Vehicles Unit)
The orders are in and we now finally know how the Space Force's most recent block buy of rocket launches shook out: In the end, the military dished out over $5.6 billion in contracts to SpaceX and ULA for 48 launches.
Before I dive in here, a public service announcement: This newsletter is all about how much the U.S military spends to buy rocket launches from companies and, as such, it will be filled with acronyms. But the significant Space Force dollars on the table for launches makes this revenue opportunity a core part of any rocket company's market strategy – especially as the program expands to feature even more competition in the years ahead.
The numbers alone here are eye-catching. The folks over at Space Force's Space Systems Command shared with me the full breakdown of the National Security Space Launch (NSSL) Phase 2 contract awards. In total, Space Force assigned United Launch Alliance (ULA) with 26 missions worth $3.1 billion, while SpaceX got 22 missions worth $2.5 billion.
With the Phase 3 bidding process underway, I spoke with SSC's deputy program executive officer Col. Doug Pentecost about takeaways from Phase 2 and expectations for Phase 3. Pentecost expects that Phase 3 will order 90 rocket launches – with a new split approach to feature not two companies, or even just three, but multiple companies bidding for missions assignments in two different categories (known as Lane 1 and Lane 2).
One of the interesting insights from the Phase 2 award data is that the program's orders ramped sharply: Over the course of the five order years, assignments climbed from three launches the first year to 21 launches by the fifth — the most missions the DOD has bought in a single year, according to Pentecost.
"In some respects, that just shows how much more we are getting space assets in order to go after the pacing challenge, meet the future threats and put new capability in orbit," he told me.
Part of the reason Phase 2 was so back-loaded, Pentecost noted, was due to the addition of launches for the Space Development Agency's (SDA) satellite constellation, PWSA. In his words, "when we planned Phase 2 … SDA wasn't even a three letter agency at that time."
Pentecost doesn't expect Phase 3 to continue the hockey stick trajectory of orders, but it's also "not going to drop back down to only ordering three or four a year." While this is "subject to change" since the timelines for satellites are "always moving around," Pentecost said to expect 17 missions ordered during the first year of Phase 3, 14 missions the next year and 16 missions the following.
One important thing to keep in mind: This discussion is entirely about ordering launches, not actually launching the rockets themselves.
"It's kind of weird to be talking about the end of Phase 2 from an ordering perspective, when I've still got 47 of the 48 missions to launch," Pentecost said.
"But if you look at the economy today — inflation is higher but we do have real competition, and companies have found efficiencies. I don't know how it's going to play out from a budgeting perspective, because we've got to see how it plays out. We think this block buy approach … allows the companies to get their supply chain [ready] for a long timeframe and that does help bring the cost of launch down [overall]."
SSC sent out its request for Phase 3 proposals in early October, with bids due Dec. 15, Pentecost said.
What's up
- Astra founders offer to take company private, with CEO Chris Kemp and CTO Adam London delivering a proposal to the board of directors to acquire outstanding stock at $1.50 a share. The founders disclosed they would need to raise $60 million to $65 million in capital to fund the take-private move, given the purchase price as well as transaction expenses and bridge financing. – CNBC
- SpaceX adds crew access arm to second Florida launchpad, with the company reportedly planning to launch the upcoming Ax-3 mission from the newly-modified SLC-40. – SpaceflightNow
- NSA official warns satellite operators must strengthen cybersecurity, with Darren Turner, chief of Critical Networks Defense for the NSA's Cybersecurity Directorate, emphasizing the need for "robust" cryptography. – Via Satellite
- NASA pushes back astronaut lunar rover contract award to March 31, a four-month delay that the agency said was to allow more time to evaluate proposals. – SpaceNews
- ESA looks to Starlab as a post-ISS option, with the European Space Agency signing an agreement with Voyager and Airbus to explore "opportunities for sustained access to space for Europe through the Starlab space station." – Airbus
- Insiders allege harassment inside ESA's corporate environment with internal documents showing that "between 30 and 50 percent of the people working there said they had witnessed harassment." – Ars Technica
- SpaceX reportedly expects to bring in $15 billion of 2024 revenue, with the company currently headed toward $9 billion in revenue this year. The company's Starlink business is reportedly expected to bring in more than its launch business next year. – Bloomberg
- Russian 'zombie' satellite raises national security concerns after the spacecraft, which was assumed to be imperative, began maneuvering late last year and approached another, more recently launched Russian satellite. – SpaceNews
- Qualcomm cofounder Franklin Antonio's estate gifts $200 million to SETI Institute, a non-profit research and education group that searches "for intelligent life beyond our world" and supports more than 100 active scientists. – SETI
- Amazon tests Kuiper satellite prototypes' maneuverability, in an update on the company's first mission that says the spacecrafts' onboard electric propulsion system was successful. – Amazon
- Space Force to launch seventh X-37B spaceplane mission on a Falcon Heavy rocket, with SpaceX set to fly the mission in early December under a $130 million contract. – SpaceNews / Space Force
- FAA closes investigation into first ABL launch failure and "paving the way" for the company's second rocket launch according to CEO Harry O'Hanley. – O'Hanley
- Astrobotic prepares for launch, releasing details about the lunar Peregrine Mission One and the payloads the moon lander carries with it. – Astrobotic
- Firefly targets second half of 2024 for first lunar launch, as the company prepares its Blue Ghost lander to deliver cargo and research to the moon's surface. – TechCrunch
- Lynk debuts satellite-to-phone service in the Solomon Islands via a regional operator in four provinces. – Via Satellite
Industry maneuvers
- SES wins $270 million Pentagon contract for satellite communications services from the O3b constellation, over a five-year period. – SES
- Lockheed Martin awarded $33.7 million Air Force contract for nuclear spacecraft development, as part of the the Air Force Research Laboratory's (AFRL) Joint Emergent Technology Supplying On-Orbit Nuclear (JETSON) High Power program. – Lockheed Martin
- UK funding £2 million ($2.5 million) for debris removal studies, with the country's space agency looking to assess the feasibility of demonstrating the refueling of a satellite in orbit. – UKSA
Market movers
- Rocket Lab emphasizes push to resume Electron launch momentum before year-end, with the company's Q3 report disclosing a "fully" booked manifest of 22 Electron missions for 2024. – CNBC
- Virgin Galactic stock jumps after Q3 report unveils cost savings plan, including an 18% reduction of its workforce and a pause in flights next year to focus on getting its next-generation Delta class of spacecraft in service. – CNBC
- Viasat shares climb after reporting quarterly results. The company disclosed $900 million in write-downs during its fiscal second quarter of 2024 for the losses from the malfunctioning satellites ViaSat-3 Americas and I6-F2. The company will also no longer invest in its planned ViaSat-4 satellite. – Viasat
- EchoStar reports Q3 results, with revenue from its core broadband business slipping. Subsidiary Hughes lost 165,000 subscribers since the beginning of the year due to capacity limits and competitive pressure. The company's merger with Dish is expected to close by the end of the year and its new JUPITER 3 satellite is expected to begin service in December. – EchoStar
- Telesat remains 'on track' with Q3 report, CEO Dan Goldberg said, adding the company's work on its Lightspeed satellite constellation is ongoing. Its LEO 3 demonstration satellite successfully completed on-orbit testing. – Telesat
- BlackSky ekes out Q3 profit, reporting its first quarterly net income but noting it was due to accounting for warrant liability exposure. – CNBC
- Redwire sticks to full year revenue guidance of over $220 million in Q3 report, emphasizing its "strong financial and operational momentum" going into the end of the year. – Redwire
- Spire emphasizes 'strong progression toward profitability' in Q3 report, as both revenue increased and losses declined. The company's annual recurring revenue (ARR), a key measure of subscribers, was at $103.1 million at the end of the quarter, with 877 total customers. – Spire / Spire
Boldly going
- Sierra Space COO Jeff Babione and SVP Neeraj Gupta left the company, departures which a spokesperson said were unrelated, stating that Babione retired. Gupta led the company's space station business. – Sierra
- Robert Sproles joins Exolaunch as CTO, coming to the German payload services company having previously served as Spire's Vice President of constellation planning and operations. – Exolaunch
- Diana Lovati hired as Chief Information Security Officer at startup True Anomaly, joining the Colorado spacecraft company having previously served as the CISO at Ball Aerospace. – True Anomaly
On the horizon
- Nov. 9: SpaceX's Falcon 9 launches CRS-29 cargo mission for NASA from Florida.
- Nov. 13: Astra reports Q3 results after market close.
- Nov. 14: Terran Orbital, AST SpaceMobile and Momentus report Q3 results before and after market close.