Small satellite manufacturer Terran Orbital reported increased revenues last month as it ramps up work on satellites for the Space Development Agency, but is planning to sell stock as its cash reserves decline.

Terran Orbital reported $21.4 million in revenue in the second quarter of 2022, an increase of 127% over the same quarter a year ago. The company said its backlog increased to $224.1 million, a record high and 200% above the level at the end of 2021.

“We are delighted in our team’s performance in the quarter and we are happy to report that our business is rapidly expanding,” Marc Bell, chief executive of Terran Orbital, said in an earnings call. The company had more than 400 employees as of the end of the quarter, 20% more than a quarter ago.

Terran Orbital expects to complete an expanded satellite manufacturing facility in Irvine, California, this fall, that will provide the company with capacity to handle its SDA work and more. Bell said the company is still in discussions with Florida to finalize an agreement to build an even larger manufacturing facility at the Kennedy Space Center but that there is no schedule for starting construction there.

However, the cost of that expanding business is growing even faster. The company reported a net loss of $32.2 million in the quarter, compared to an $8.9 million loss in same quarter last year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was a negative $14.8 million in the quarter, compared to a negative $2.5 million in the same quarter a year ago.

Terran Orbital ended the quarter with $62.3 million of cash on hand, down from $76.7 million at the end of the first quarter. The company said it has entered into an agreement with an affiliate of B. Riley Securities to sell up to $100 million in stock over the next two years to raise additional capital. The agreement is similar to one that launch vehicle developer Astra announced, also with B. Riley, Aug. 2.

The agreement “provides us with a flexible option for access to incremental liquidity as needed,” said Gary Hobart, chief financial officer of Terran Orbital, on the call.

Terran Orbital’s near-term focus is to complete 10 satellite buses for Lockheed Martin for the SDA’s Transport Layer Tranche 0. Bell said the company expected to have all 10 delivered by the end of the year and has started work on a separate set of 42 Tranche 1 satellites for Lockheed.

That work has taken precedence over Terran Orbital’s own PredaSAR constellation of synthetic aperture radar satellites. “We’ve made it a priority to get the Tranche 0 buses done first before finishing the PredaSAR,” he said. The first two PredaSAR satellites will launch in the first or second quarter of 2023.

The overall plan for the PredaSAR constellation, originally projected to include 96 satellites, is changing, although Bell didn’t disclose changes in the number of satellites or schedule for its deployment. “The plan is evolving. We are looking at getting the first two up,” he said. “The satellites continue to evolve.”

Those satellites will be significantly larger than other smallsats being developed for SAR constellations and will use the Tranche 1 bus. “We’re seeing the benefits of going to a bigger bus with more batteries,” he said, allowing for more sustained radar imaging. The larger buses can also accommodate secondary payloads, such as one satellite that will have an optical inter-satellite link to communicate with DARPA’s Blackjack satellites.

Bell said that, once deployed, he expected PredaSAR to be competitive with existing commercial SAR systems. “MySpace was the first, but it wasn’t the winner. We keep reminding ourselves that it’s all about the endgame.”

Lynk Global have made it clear that they will test the ability to send a 5G signal from a satellite launching in December to standard mobile devices, after getting funding for the demonstration from an undisclosed partner.

The experimental 5G payload will be onboard its second commercial satellite, which SpaceX is slated to fly on a Falcon 9 rocket as part of its Transporter 6 rideshare mission.

Two other Lynk Global satellites are also due to fly on this mission to give the Virginia-based startup four commercial satellites in low Earth orbit.

Lynk’s initial satellites are designed to provide connectivity for its mobile network operator (MNO) partners’ customers over 2G to 4G. 

The startup said “in the future” its software-defined radios “will be able to switch to 5G when our MNO partners and other customers prefer that over 4G.”

Details of the 5G tests were not disclosed.

Lynk has plans to operate more than 50 satellites before the end of 2023, which it says would enable users to send and receive text messages every 15-30 minutes.

Charles Miller, Lynk’s CEO, expects MNOs will want to upgrade from 4G to 5G satellite connectivity in 2025, when the startup would be able to provide “continuous” voice and broadband data services from orbit.

“Another issue is how prevalent the demand for 5G will be from our MNO partners,” Miller said via email.

“If we are only putting 5G beams down in a country, that means that 4G phones will not get service. Our MNO partners will need to decide when a transition takes place from 4G to 5G. This decision is up to the MNOs.”

He added: “I suspect Lynk will be ready to provide 5G services well before MNOs want to make the transition from 4G to 5G.”

Lynk’s long-term plan is to beam down 4G connectivity in one spectrum band and 5G in another, enabling MNOs to use both 4G and 5G services.

Texas-based startup AST SpaceMobile plans to start deploying its first commercial spacecraft in late 2023. These will be larger than Lynk’s pizza-boxed shaped satellites for providing voice, video streaming, and other higher bandwidth services.

AST’s BlueWalker-3 prototype satellite, which SpaceX launched Sept. 10, is slated to unfurl its 64-square-meter antenna in the next couple of weeks to test its ability to bring 4G and 5G connectivity to standard mobile phones.

SpaceX announced plans to provide its own direct-to-cell service as early as late next year in partnership with U.S.-based MNO T-Mobile.

“Lynk is years ahead of everyone else in enabling MNOs to extend their cellular networks to 100% of their geographic territories,” Dan Dooley, Lynk’s chief commercial officer of Lynk, said in a statement.

“We will be years ahead in 5G as well.”

He said Lynk is actively testing satellite-direct-to-phone-services in 12 countries on five continents. 

The startup secured regulatory approval Sept. 16 to operate its initial cellphone-compatible constellation globally; however, it has not yet obtained landing rights in any country to provide services.

NovaWurks is ready to discuss contracts, customers and expansion plans, after a series of spaceflight demonstrations followed by years of secrecy.

They made a splash nearly a decade ago when the Southern California startup proposed constructing spacecraft with identical box-shaped modules weighing about six kilograms. The modules, now trademarked as Slego, provide the functions of conventional components like pointing, information processing and data storage.

Designed to operate in geostationary orbit for 15 years, Slegos offer “tons of capability,” Talbot Jaeger, NovaWurks founder and chief technologist, told SpaceNews at the Small Satellite Conference.

Rather than custom-designing spacecraft to accommodate payloads, NovaWurks arranges Slego building blocks in different configurations.

“We’re not designing, we’re configuring,” Jaeger said. “Configuration doesn’t spend money on all that nonrecurring engineering.”

NovaWurks performed its first in-orbit demonstration in 2017 on the International Space Station. An astronaut assembled a small satellite by combining six modules, then called HISats, with deployable solar arrays and an electro-optical imager in the NASA-sponsored Satlet Initial Proofs and Lessons mission.

In 2018, NovaWurks’ Payload Orbital Delivery Satellite, PODSat-1, a mission funded by the Defense Advanced Research Projects Agency, reached geostationary transfer orbit. PODSat-1’s four Slegos with a radio and antenna traveled to geostationary transfer orbit on a SpaceX Falcon 9 rocket as a hosted payload that was later deployed from a Hispasat communications satellite.

Novawurks again demonstrated its modular approach through the 2018 eXperiment for Cellular Integration Technology, or eXCITe, mission. Another Falcon 9 sent eXCITe, one of 64 payloads on the rideshare flight, to low Earth orbit.

Taken together, the demonstrations provided NovaWurks with the information engineers needed to refine their approach. For more than two years, company executives revealed little about the company’s spaceflight demonstrations or future plans. At the time, NovaWurks engineers were busy upgrading Slegos.

“With all that testing, fixing, correcting, adjusting, we have a product now that is ready and we’ve got people interested,” Jaeger said. “It was hard to turn science fiction into fact. It took a lot of money and time, but it was worth it because we can change space.”

Early in-orbit demonstrations have led to contracts. To keep up, NovaWurks plans to more than double its staff by the end of the year from 20 to 50 people.

For example, NovaWurks is working with Saturn Satellite Networks to jointly develop Saturn’s NationSat, a small geostationary communications satellite.

They are also working with NASA, the National Oceanic and Atmospheric Agency and the U.S. Space Force Space Systems Command on a mission to measure solar energy reflected and absorbed by Earth. Data will be gathered with a small telescope attached to their Slegos. The project, called Athena, is a test of NovaWurks’ quick-turnaround capability.

During the pandemic, NovaWurks provided the Space Force with another demonstration of its quick-turnaround strategy. The Space Force gave NovaWurks three different spacecraft payloads with different thermal and field-of-view requirements. The idea was that once the Space Force selected one of the three payloads to fly, NovaWurks would have only 60 days to configure the spacecraft. 

“When we said that was easy, they made 30 days a stretch goal,” said Bill Crandall, NovaWurks business development vice president.

The Space Force then selected one of the three payloads. It took NovaWurks five days to configure and turn on the spacecraft to accommodate it. The response from the Space Force was, “Okay, take that one apart and build another one,” Crandall said.

Again, it took less than five days. NovaWurks captured the process on video to share with the Space Force “because they didn’t believe it,” Jaeger said.

A Hybrid Space Architecture provides advances in commercial technology which will fundamentally strengthen the U.S. economic and security posture in space according to John Paul Parker who served as U.S. intelligence community space executive from 2018 to 2022, and previously served as a special advisor for space, cyber and intelligence to the Vice President of the United States.

Policy makers are right to expect the national security establishment to find ways to fully leverage the innovations and investment in commercial space capabilities like launch and imagery.  

But far less obvious and yet more profound is a very real revolution that is well underway: the wholesale overhaul of our national security space architecture into a “hybrid” design that effectively integrates the best of commercial and government investments.  

This transformation of our national security space architecture is prompted not only by the amazing and innovative developments in the commercial space sector, but also by the realization that our adversaries are determined to displace the United States leadership in space and target our currently vulnerable space based capabilities if conflict arises on Earth.  

These twin motivations are driving a once-in-a-generation series of changes that will fundamentally strengthen the U.S. economic and security posture in space.

Those leading the redesign of our national security space architecture in both the intelligence community and the Department of Defense are quietly but effectively utilizing three distinct approaches to capture the best of commercial space capabilities and adapt them to our national security needs.

The first approach is to augment government developed capabilities with commercial products and services.  Recently, the National Reconnaissance Office awarded the largest contracts for commercial imagery in its history.  When combined with exquisite imagery provided by government developed sources, this approach will dramatically increase intelligence capacity and provide the U.S. the ability to share with the world what we see from space without disclosing intelligence sources and methods.

Another far less visible approach being employed is to take advantage of the innovation and venture investment in commercial space technologies while adapting them to national security needs. The next generation of intelligence satellites now being developed will use flight proven hardware bought from commercial spacecraft manufacturers and adapt it with government payloads in order to lower cost and speed deployment.  

This is not merely a plan. The first of these hybrid satellites are already being tested in space, having gone from idea to orbit in less than three years, a fraction of the traditional timeframe to develop and launch a new capability.  

By radically lowering the cost of these hybrid satellites, we can afford many more of them which not only improves the technical performance of the constellation but also dramatically increases architectural resilience. Proliferation of many more hybrid surveillance satellites makes it harder for adversaries to track, target and disrupt or destroy our spacecraft in the event of conflict.

The final hybrid approach being utilized is the incorporation of commercially derived business models by traditional defense firms. The proliferation of commercial space providers has created a highly technical aerospace workforce that operates more like a Silicon Valley startup than a large defense contractor. 

In order to fully capitalize on this, we are seeing large defense firms partner with or acquire space startups and allow their commercial best practices to flourish in order to rapidly experiment and develop capabilities, while the established defense firm provides the government with a proven ability to perform classified integration and delivery. 

Combining the reliability and the assurance of the cleared defense industrial base with the speed and innovation of our space entrepreneurs is another hybridization approach already showing positive results.

As good as they are, current commercial space capabilities are not a replacement for government developed national security capabilities, nor should the U.S. be content to rely exclusively on commercial solutions for national security. Doing so may save money, but effectively reduces our technical capabilities to what anyone (including our adversaries) can acquire in the marketplace.  

However, by quietly and creatively blending the best practices from both commercial and defense sectors in order to produce “hybrid” space capabilities, we can increase our economic as well as national security.