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Astra Announces Second Quarter 2023 Financial Results

Astra Space, Inc. (“Astra”) (Nasdaq: ASTR) today announced financial results for its second quarter ended June 30, 2023.

Astra also announced on August 4, 2023 a strategic near-term prioritization of the Astra Spacecraft Engines business, including a reallocation of approximately 50 engineering and manufacturing personnel from Launch Services to Space Products, spanning both permanent and temporary reassignments to support specific customer programs and to increase Astra Spacecraft Engine production and test capacity through the end of the year.

"We remain intensely focused on near-term deliveries of Astra Spacecraft Engines to our customers and have made difficult but necessary decisions to enable these efforts. I believe our existing organization can support a sustainable business going forward," said Chris Kemp, Founder, Chairman and CEO.

Astra’s Launch Services business will continue to focus on the development of Rocket 4 and servicing new and existing launch contracts, including the contracts announced earlier this year with the U.S. Space Force and Defense Innovation Unit, among others.

In Q2 2023, Astra continued to closely manage its financial runway and evaluate strategic opportunities in support of a long-term sustainable growth strategy across both Space Products and Launch Services.

“We were excited to announce on August 4, 2023 the closing of a Senior Secured Notes offering, which, when combined with our existing ATM, represents a broad financing strategy and demonstrates our ability to access the capital markets when needed. We also continue to reduce operating expenses, including a 52% decrease in G&A Expenses quarter over quarter. We expect additional savings of approximately $4 million per quarter starting in Q4 based on the strategic reallocation of resources announced earlier this month. As a result, we expect further reductions in quarterly cash burn throughout the remainder of the year,” said CFO, Axel Martinez.

Recent Business Highlights:

  • Announced the first 4 shipments of Astra Spacecraft Engines out of Sunnyvale spacecraft engine manufacturing facility
  • Announced the completion of approximately 77% of non-delivery customer milestones related to Astra Spacecraft Engines
  • Completed the Service Readiness Review (SRR) for Astra's Space Force STP-29B mission
  • Announced the closing of a Senior Secured Notes facility offering and ATM program

Second Quarter 2023 Financial Highlights:

For the three months ended June 30, 2023:

  • GAAP Gross Profit was $0.3 million
  • GAAP Net Loss was $14.0 million
  • Adjusted Net Loss* was $33.7 million
  • Adjusted EBITDA Loss* was $33.1 million
  • Capital expenditures during the quarter totaled $3.2 million
  • Cash, cash equivalents and marketable securities totaled $26.3 million

_________

*Denotes Non-GAAP financial measure. Refer to “Explanation of Adjusted (or Non-GAAP) Financial Measures” later in this press release for reconciliation of GAAP to Non-GAAP financial measures.

Third Quarter 2023 Outlook

As of August 14, 2023, we are providing guidance for the third quarter 2023 based on current market conditions, our ongoing investments to scale our Space Products business and on the development of Launch System 2. We emphasize that the guidance is subject to various important cautionary factors referenced in the section entitled “Forward-Looking Statements” below and our annual report on Form 10-K for the year ended December 31, 2022, including risks and uncertainties associated with geopolitical conditions and their potential impact on our business as well as our ability to continue operating as a going concern.

For the third quarter ending September 30, 2023, we currently expect:

  • Deliveries of 8 to 12 Astra Spacecraft Engines,
  • Adjusted EBITDA loss* to be between $25.0 million and $29.0 million,
  • Basic shares outstanding to be between 280 million and 290 million shares,
  • Capital expenditures to be between $1.0 million and $2.0 million, and
  • Cash, cash equivalents and marketable securities to be between $15.0 million and $20.0 million

_________

In conjunction with this announcement, Astra will host a conference call for investors at 1:30 p.m. PT (4:30 p.m. ET) today to discuss second quarter 2023 results and our outlook for the third quarter ending September 30, 2023. The live webcast and a replay of the webcast will be available on the Investor Relations section of Astra’s website: https://investor.astra.com/news-and-events/events-and-presentations.

About Astra Space, Inc.

Astra’s mission is to Improve Life on Earth from Space® by creating a healthier and more connected planet. Astra pursues that mission through its Launch Services and Space Products businesses. Astra’s Launch Services business offers one of the lowest cost-per-launch dedicated orbital launch services of any operational launch provider in the world. Astra delivered its first commercial launch to low Earth orbit in 2021, making it the fastest company in history to reach this milestone, just five years after it was founded in 2016. Astra’s Space Products business offers one of the industry’s first flight-proven electric propulsion systems for satellites, the Astra Spacecraft Engine™. Astra Spacecraft Engines™ have extensive on-orbit flight heritage and are available as fully assembled units or as individual components in the Astra Propulsion Kit. Astra (NASDAQ: ASTR) was the first space launch company to be publicly traded on Nasdaq. Visit astra.com to learn more about Astra.

Forward Looking Statements

Certain statements made in this press release are “forward-looking statements”. Forward-looking statements may be identified by the use of words such as “anticipate”, “believe”, “expect”, “estimate”, “plan”, “outlook”, and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements reflect the current analysis of existing information and are subject to various risks and uncertainties. As a result, caution must be exercised in relying on forward-looking statements. Due to known and unknown risks, actual results may differ materially from Astra’s expectations or projections, including the following factors, among others: (i) the failure to meet projected development, delivery and launch targets, including as a result of the decisions of governmental authorities or other third parties not within our control; (ii) changes in applicable laws or regulations; (iii) the ability of Astra to meet its financial and strategic goals, due to, among other things, competition and the reallocation of our resources to Astra Spacecraft EngineTM and its ability to continue operating as a going concern; (iv) the ability of Astra to pursue a growth strategy and manage growth profitability without additional funding; (v) the possibility that Astra may be adversely affected by other economic, business, and/or competitive factors; (vi) the ability to manage its cash outflows related to its business operations, (vii) the ability of Astra to develop its space services offering as part of its long-term business and growth strategy and (viii) other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in other reports and other public filings with the Securities and Exchange Commission by Astra.

Explanation of Non-GAAP (or Adjusted) Financial Measures

This press release includes information about Adjusted Net Loss and Adjusted EBITDA (collectively the “non-GAAP financial measures”), all of which are non-GAAP financial measures. These non-GAAP financial measures are measurements of financial performance that are not prepared in accordance with U.S. generally accepted accounting principles and computational methods may differ from those used by other companies. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with Astra’s condensed consolidated financial statements prepared in accordance with GAAP. Non-GAAP financial measures are reconciled to their most comparable GAAP measures in the table set forth in this release.

We believe that both management and our investors benefit from referring to these non-GAAP financial measures in planning, forecasting and analyzing future periods. Specifically, our management uses these non-GAAP financial measures in planning, monitoring and evaluating our financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the excluded items described below.

We believe that providing the non-GAAP financial measures, together with the reconciliation to GAAP measures, helps investors make comparisons between Astra and other companies in our industry. In making any comparisons to other companies in our industry, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable SEC rules.

We define Free Cash Flow as cash used in operating activities including cash used for capital expenditures.

Adjusted Gross Loss differs from GAAP Gross Loss in that it excludes inventory and deferred launch cost write-downs related to discontinuance of production of our current version of launch system.

Adjusted Net Loss differs from GAAP Net Loss in that it excludes the items excluded from Adjusted Gross Loss and the following items: (a) stock-based compensation, (b) loss on change in fair value of contingent consideration, (c) cash earnout compensation cost related to the acquisition of Apollo Fusion and (d) other special items. For the three months ended June 30, 2023, other special items primarily related to revenues from government research and development contracts and for the three months ended June 30, 2022, other special items primarily related to amortization of licensed intellectual property, employee COVID-19 testing expenses and payroll taxes.

We define Adjusted EBITDA as Adjusted Net Loss, excluding the following items: (a) interest income, (b) loss on marketable securities and (c) depreciation and amortization. We are unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort.

Astra Space, Inc.

 

Condensed Consolidated Statement of Operations

 

(Unaudited, in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

Launch services

$

-

 

 

$

1,988

 

 

$

-

 

 

$

5,899

 

Space products

 

707

 

 

 

694

 

 

 

707

 

 

 

694

 

Total revenues

 

707

 

 

 

2,682

 

 

 

707

 

 

 

6,593

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

Launch services

 

-

 

 

 

17,179

 

 

 

-

 

 

 

28,193

 

Space products

 

388

 

 

 

266

 

 

 

388

 

 

 

266

 

Total cost of revenues

 

388

 

 

 

17,445

 

 

 

388

 

 

 

28,459

 

Gross loss

 

319

 

 

 

(14,763

)

 

 

319

 

 

 

(21,866

)

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

24,395

 

 

 

40,798

 

 

 

55,477

 

 

 

78,725

 

Sales and marketing

 

650

 

 

 

4,636

 

 

 

3,134

 

 

 

9,400

 

General and administrative

 

7,580

 

 

 

20,608

 

 

 

23,262

 

 

 

41,594

 

(Gain) loss on change in fair value of contingent consideration

 

(16,625

)

 

 

1,800

 

 

 

(19,390

)

 

 

17,300

 

Total operating expenses

 

16,000

 

 

 

67,842

 

 

 

62,483

 

 

 

147,019

 

Operating loss

 

(15,681

)

 

 

(82,605

)

 

 

(62,164

)

 

 

(168,885

)

Interest income

 

384

 

 

 

356

 

 

 

1,714

 

 

 

530

 

Other income/(expense), net

 

1,293

 

 

 

(54

)

 

 

1,553

 

 

 

339

 

Loss before taxes

 

(14,004

)

 

 

(82,303

)

 

 

(58,897

)

 

 

(168,016

)

Provision for income tax

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net loss

$

(14,004

)

 

$

(82,303

)

 

$

(58,897

)

 

$

(168,016

)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share

 

 

 

 

 

 

 

 

 

 

 

Weighted average basic and diluted shares - Class A

 

215,870

 

 

 

209,022

 

 

 

215,288

 

 

 

208,570

 

Loss per share

$

(0.05

)

 

$

(0.31

)

 

$

(0.22

)

 

$

(0.64

)

Weighted average basic and diluted shares - Class B

 

55,539

 

 

 

55,539

 

 

 

55,539

 

 

 

55,539

 

Loss per share

$

(0.05

)

 

$

(0.31

)

 

$

(0.22

)

 

$

(0.64

)

Astra Space, Inc.

 

Condensed Consolidated Balance Sheets

 

(Unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

June 30,

2023

 

 

December 31,

2022

 

Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

13,384

 

 

$

33,644

 

Marketable securities

 

 

12,935

 

 

 

69,173

 

Trade accounts receivables

 

 

5,546

 

 

 

5,327

 

Inventories

 

 

11,231

 

 

 

4,142

 

Prepaid and other current assets

 

 

15,757

 

 

 

13,496

 

Total current assets

 

 

58,853

 

 

 

125,782

 

Property, plant and equipment, net

 

 

28,301

 

 

 

24,271

 

Right-of-use asset

 

 

11,096

 

 

 

12,813

 

Intangible assets, net

 

 

8,999

 

 

 

10,132

 

Other non-current assets

 

 

1,847

 

 

 

1,701

 

Total assets

 

$

109,096

 

 

$

174,699

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

Accounts payable

 

$

7,187

 

 

$

1,799

 

Operating lease obligation, current portion

 

 

3,797

 

 

 

3,800

 

Contingent consideration

 

 

14,510

 

 

 

33,900

 

Accrued expenses and other current liabilities

 

 

40,262

 

 

 

42,043

 

Total current liabilities

 

 

65,756

 

 

 

81,542

 

Operating lease obligation, net of current portion

 

 

7,548

 

 

 

9,051

 

Other non-current liabilities

 

 

8,629

 

 

 

1,796

 

Total liabilities

 

 

81,933

 

 

 

92,389

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

27,163

 

 

 

82,310

 

Total liabilities and stockholders’ equity

 

$

109,096

 

 

$

174,699

 

Astra Space, Inc.

 

Summary of Cash Flow Data

 

(Unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Cash used in

operating activities

 

$

(33,489

)

 

$

(43,588

)

 

$

(69,488

)

 

$

(91,862

)

Capital expenditures

 

 

(3,192

)

 

 

(11,122

)

 

 

(8,223

)

 

 

(32,064

)

Free cash flow (non-GAAP)

 

$

(36,681

)

 

 

(54,710

)

 

 

(77,711

)

 

 

(123,926

)

Cash provided by (used in) investing activities

 

$

30,068

 

 

$

(13,964

)

 

$

48,787

 

 

$

(129,647

)

Cash provided by financing activities

 

$

-

 

 

$

346

 

 

$

441

 

 

$

817

 

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

 

(Unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Launch services

 

$

-

 

 

$

1,988

 

 

$

-

 

 

$

5,899

 

Space products

 

 

707

 

 

 

694

 

 

 

707

 

 

 

694

 

Total revenues

 

 

707

 

 

 

2,682

 

 

 

707

 

 

 

6,593

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

Launch services

 

 

-

 

 

 

17,179

 

 

 

-

 

 

 

28,193

 

Space products

 

 

388

 

 

 

266

 

 

 

388

 

 

 

266

 

Total cost of revenues

 

 

388

 

 

 

17,445

 

 

 

388

 

 

 

28,459

 

GAAP gross loss

 

$

319

 

 

$

(14,763

)

 

$

319

 

 

 

(21,866

)

GAAP gross margin

 

 

45

%

 

 

(550

%)

 

 

45

%

 

 

(332

%)

Inventory write-downs

 

 

-

 

 

 

10,200

 

 

 

-

 

 

 

10,200

 

Deferred launch costs write downs

 

 

-

 

 

 

2,213

 

 

 

-

 

 

 

2,213

 

Adjusted gross profit (loss)

 

$

319

 

 

$

(2,350

)

 

$

319

 

 

$

(9,453

)

Adjusted gross margin

 

 

45

%

 

 

(88

%)

 

 

45

%

 

 

(143

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(14,004

)

 

$

(82,303

)

 

$

(58,897

)

 

$

(168,016

)

Stock-based compensation

 

 

(2,112

)

 

 

12,791

 

 

 

3,216

 

 

 

29,832

 

(Gain) loss on change in fair value of contingent consideration

 

 

(16,625

)

 

 

1,800

 

 

 

(19,390

)

 

 

17,300

 

Apollo cash earnout compensation

 

 

-

 

 

 

1,242

 

 

 

-

 

 

 

2,575

 

Inventory write downs

 

 

-

 

 

 

10,200

 

 

 

-

 

 

 

10,200

 

Deferred launch costs write downs

 

 

-

 

 

 

2,213

 

 

 

-

 

 

 

2,213

 

Other special items

 

 

(967

)

 

 

1,088

 

 

 

(1,185

)

 

 

2,781

 

Adjusted net loss

 

$

(33,708

)

 

$

(52,969

)

 

$

(76,256

)

 

$

(103,115

)

Interest income

 

 

(384

)

 

 

(356

)

 

 

(1,714

)

 

 

(530

)

Accretion (amortization) of marketable securities

 

 

(679

)

 

 

65

 

 

 

(679

)

 

 

132

 

Depreciation and amortization

 

 

1,688

 

 

 

4,858

 

 

 

3,033

 

 

 

7,633

 

Adjusted EBITDA

 

$

(33,083

)

 

$

(48,402

)

 

$

(75,616

)

 

$

(95,880

)

 

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