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Terran Orbital’s biggest customer is close to securing funding for multibillion-dollar constellation

Image Credits: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images
Image Credits: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

During a company-wide meeting earlier this month, Terran Orbital’s Chief Executive Officer, Marc Bell, announced that the firm may be on the verge of receiving a significant payment from its most important client. Rivada Space Networks is now in the final stages of closing funds to assist in funding a mega-constellation that Terran will construct for $2.4 billion. These revenues currently constitute the vast bulk of Terran’s backlog.

There are other attractive contracts that Terran is chasing, some of which might include billions of dollars in work; nevertheless, the $2.4 billion contract it has acquired with Rivada is by far the most significant contract it has secured. At the beginning of this quarter, Terran was forced to adjust its financial projections for the entire year since Rivada had delayed paying an additional $180 million toward that total contract award.

The news was shared with the personnel during the meeting on December 19 by the chair and CEO of Terranet.

“Last week in Washington, DC, I had dinner with [Rivada CEO] Declan Ganley,” Bell said to the team at the meeting, which TechCrunch was able to secure a tape of. “He informed me that they anticipate completing their fundraising the following day. In front of me, he took the paperwork. I was able to read them by myself. This morning, as well as maybe on Thursday or Friday, he sent me a text message. […] I’ll be content as long as it’s around Christmas time. There is absolutely nothing wrong with receiving a lovely Christmas present.

Under the terms of a $2.4 billion agreement reached in February of this year, Rivada, a German subsidiary of Rivada Networks located in the United States, entered into a contract with Terran to construct 300 satellites for the mega-constellation. The satellites will be launched beginning in April 2025, according to a separate agreement that Rivada has with SpaceX.

Given that Christmas has already passed, it is hardly surprising that neither of the companies has made any public comments on the funding. TechCrunch contacted both for comment, but neither answered when the press release was published. During the discussion, Bell stated that even if Rivada decides to withdraw the financing, the two organizations would still be required to revise their contract, which may potentially postpone the payment conditions and public statements.

While speaking about Ganley, Bell stated, “He is being very transparent to me, and as a result, I have no reason not to believe him.” Nevertheless, it is sad that he is not the one who is writing the check; instead, another individual is writing the check to him. But if he gets a check, I have no choice but to presume we will also get one. However, we are required to modify the contract. Because we need to modify the contract, this is the one issue that might potentially slow us down. […] Nevertheless, we will at least receive payment on the overdue account, which is the $9 million billing. However, I would like to receive the giant check, just like everyone else, because doing so would significantly impact the value of our shares and everything else in our environment.

In a call with investors in November, Bell stated that the finance and payment delays Rivada experienced were “quite a surprise” to both firms. He said that Rivada’s funding comes from “a large sovereign,” which indicates that it is most likely a sovereign wealth fund and that both businesses anticipate that the money will eventually be invested.

According to Terran’s report, the company has a backlog of future work of $2.6 billion as of November, with $2.4 billion coming from the Rivada contract. Even though the anticipated milestone payment has not yet been received, Bell has informed his workers that he continues to anticipate that the firm will produce revenue of $130 million this year. This is a significant increase from the $94 million that the company made in 2022.

Additionally, the corporation is actively pursuing additional high-value contract prospects, one of which is with the Space Development Agency constellation, referred to as “Proliferated Warfighter Space Architecture.” Currently, Terran is constructing 42 satellite buses for Tranche 1 and will be constructing an additional 32 buses for Tranche 2. Terran has already constructed and delivered satellites for the constellation’s first tranche, which is Tranche 0. Bell stated that the business would also be pursuing an additional award for a derivative of the Tranche 2 satellites known as Gamma, perhaps as the prime contractor on that award (for the previous awards, Terran is a subcontractor of Lockheed Martin, who was the primary winner).

“We have a positive outlook on Gamma and how we will come out on top. The idea of priming Gamma rather than simply being a sub is one that we are considering. But now, the odds are even that we could finally be at the top of our game about these things. And it would be very enormous. There would be a shift in the dynamic. On the other hand, I have not yet settled on a choice; we will discuss the matter with Lockheed.

Bell also informed the workers that the firm is still discussing the possibility of going to Terran Private. However, he stated that the objective would be to “go private, and then take it public again the traditional way, and not have this dumbass market cap like we have today.”

Since Terran Orbital became public through a reverse merger with a particular purpose acquisition firm in March of the previous year, the corporation’s stock price has plummeted to an all-time low. Today, the firm’s shares are selling for around $1.22, a significant decrease from the initial price of $10.96.

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