iQPS posted a note updating financial forecasts for both the current 1H and full fiscal year. QPS-SAR-5 failing in orbit caused iQPS to record an extraordinary impairment loss of 1.636B yen (about $11.5m). iQPS still forecasts same revenue this fiscal year (ending 5/31/2025) but decreased expenses. The forecast calls for a net loss this fiscal year of -1.62B yen. Interesting, without the loss taken on QPS-SAR-5, iQPS would be forecasting 36m profit this year! That’s only $250,000 USD, but still demonstrates iQPS’s ability to operate profitably with only a small number of revenue generating satellites.
Updating on QPS-SAR-5, iQPS disclosed the failed telemetry transmitter (not identified) reportedly flew on 20 iQPS and other satellites without issue. iQPS concluded a high energy cosmic ray hit and fried a circuit in the transmitter. iQPS committed to engineering a redundancy in future satellites such that if this happens again, control of the satellite will not be lost.
The timing of this news and IQPS stock movement was peculiar. On September 26 and 27, iQPS stock rose 42% and no news. Earlier this month iQPS reported the in-orbit failure of QPS-SAR-5. But September 26th and 27th pushed the iQPS stock to a level 39% higher than just preceding the QPS-SAR-5 announcement. After this run, on 5PM September 27th, iQPS released the generally positive news that next quarter’s guidance raised. However, trader were not impressed. The next trading day September 30, iQPS stock fell 18% (along with the broader Nikkei due to concerns of tax hikes in Japan). However, the huge run up two days prior to favorable news dropping merits watching closely next time whether iQPS stock moves again in the same direction of news, just prior to news release.
Finally, iQPS reiterated their business plan. After iQPS saturates the domestic Japanese government market, iQPS intends to branch into foreign commercial and government sales. This remains the biggest risk facing iQPS shareholders. iQPS apparently has yet to achieve any foreign sales. Although they have proven profitability just from the Japanese domestic market, these profit levels do not support the current stock price. iQPS needs to demonstrate ability to capture significant overseas sales to alleviate this risk that they like Satellogic launch a large constellation with no buyers.