As already well-covered, Intuitive Machines (NASDAQ: LUNR) second mission, IM-2, tipped over on landing. Two missions, both with same result. Intuitive Machines, seven hours after landing, released a statement advising that “IM-2 … is currently operating on the surface of the Moon.” But the next morning, Intuitive Machines released another statement clarifying IM-2 landed on its side in a crater, unable to charge its panels. Intuitive Machines declared the mission over. LUNR stock declined 20% twice in consecutive trading days. The stock is now down 62% from its post presidential election high reached six weeks beforehand.
Whether IM-2 will generate a final milestone payment from NASA remains open. And if so, how much. For CLPS task orders, NASA’s final milestone payment is no less than 10% of the total task order. The total value of NASA’s task order for IM-2 is $62.5 million. So at least $6.25 million is payable contingent upon IM-2 completing its final mission milestone(s). NASA also awarded IM a $41.6 million contract to build and transport the Micro-Nova hopper lander. The Micro-Nova transported on IM-2 but never deployed. One only feels bad for the team that worked years on this, but never got to see it hop. It is unclear from public information whether any of the $41.6 million depends on the Micro-Nova demonstrating specific milestones.
What is clear is that after after tipping over, Intuitive Machine engineers conserved power and attempted to complete CLPS milestones. IM’s press release says as much, “After landing, mission controllers were able to accelerate several program and payload milestones, including NASA’s PRIME-1 suite, before the lander’s batteries depleted.” Thus it is likely some of the $6.25 million final milestone payments will come Intuitive Machine’s way.
IM-2 mission profitability and future mission impact
LUNR records quarterly loss provisions for its missions in its financial filings. Reconciling those related to IM-2 versus total revenue reveals IM-2 cost Intuitive Machines approximately $158.6 million. NASA payload totaled $104.1 million (assuming full final milestone payment). Commercial customers contributed another $31.8 million in IM-2 project revenue. Intuitive Machines already lost $22.7 million on the mission. If payments tied to failed final milestones fail to materialize, the loss could rise to as much as $33.1 million. (This assumes the Micro-Nova hopper lander award similar structures a final performance milestone payment equal to 10% of total award amount.)
IM-2 was “sold out,” with cargo manifested by NASA as well as various of commercial companies. As noted, commercial revenue totaled $31.8 million. However, the future missions, I would not be surprised if commercial customers opt to manifest with Firefly, which to-date boasts the only successful commercial lunar landing. If Intuitive Machines continues marketing lunar transport to commercial customers after IM-1 and IM-2, they likely will find customers are no longer willing to pay the same prices. Firefly with just one success under its belt can likely now charge twice what IM charges and still sell out.