AAC Clyde Space CEO Luis Gomes: 2025 goal is profitable growth

AAC Clyde Space (STO: AAC) CEO Luis Gomes deserves more praise for delivering frank and timely shareholder presentations. After Q2 when supply chain delays from two suppliers negatively impacted revenue, Gomes did not shy away from disappointed shareholders. This time, with record revenue Q3 just behind him, Gomes’s mood in front of investors is unchanged. Not even the slightest bit more joyous. Instead Gomes calmly focused on AAC Clyde reaching break even.

After discussing the AAC Clyde’s product offerings, Gomes provided a financial update and business forecast. Notably, AAC Clyde’s cash position increased significantly in just one month since Q3. As of September 30th, AAC Clyde reported SEK 25.4M in cash and equivalents. As of end of October, cash increased to SEK 81.5M. At prior investor presentations, shareholder concern arose over further dilution or cash raises. AAC Clyde’s organic accumulation of cash should alleviate such prior concern.

Gomes reiterated 2024 revenue target of SEK 350-400m. Inline with this forecast, AAC Clyde investors should anticipate Q4 being big. The low end of this range (SEK 350m) necessitates AAC Clyde posting Q4 revenue of SEK 150m. AAC Clyde’s prior record quarter last quarter was SEK 84.8m which sent the stock up 31% over two trading days. As a small cap stock with no professional analyst coverage, AAC Clyde posting SEK 150m in Q4 will almost certainly send the stock up again.

Perhaps even more importantly, CEO Gomes addressed profitability. Gomes expects continued growth, but claims “the objective for the company now is to grow in a profitable manner, managing our cashflows.” Gomes said this will be AAC Clyde’s focus in 2025.

Data-as-a-Service business updates

AAC Clyde has long touted Data-as-a-Service as its highest margin segment. (Gomes repeated mentioned of the same in this presentation.)

Luis Gomes highlighted last month’s success of AAC Clyde’s Ymir-1 satellite testing two-way sea vessel VDES communication. Saab provided the payload and ORBCOMM is in line to distribute the data. According to Gomes, AAC Clyde’s second VDES satellite launches in December or January. According to Gomes, a constellation of 12 VDES satellites AAC Clyde is building for another party will launch in 2025. Gomes thinks AAC Clyde may be first to market for VDES after he eluded that an unnamed competitor’s test satellite failed (Sternula-1??).

Finally, Gomes addressed AAC Clyde’s Cyclops constellation launching in 2025 to service agriculture and forestry sectors. The constellation will consist of 4 satellites with 1.5 meter resolution, offering daily revisits, and near infrared sensors. Gomes pitched the 1.5m resolution range as the sweet spot for forestry application from a cost-vs-data quality standpoint.

Contrast AAC Clyde’s 1.5 meter resolution with Sidus Space trying to address the same forestry and agriculture markets with their second and third Lizziesat satellites. Both Lizziesat-2 and -3 satellites contain Raptor Photonics Owl 1280 sensors, providing short wave infrared resolution <5 meters. According to Gomes, 1.5 meters is required to resolve individual trees. AAC Clyde’s data offering likely will be superior to Sidus’s.