NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BUSINESS DESCRIPTION
Intuitive Machines, Inc. (formerly known as Inflection Point Acquisition Corp. or “IPAX”), collectively with its subsidiaries (the “Company,” “IM,” “Intuitive Machines,” “we,” “us” or “our”) is a space technology, infrastructure, and services company that is contributing to the establishment of cislunar infrastructure and commerce. Cislunar encompasses objects in orbit in the Earth-Moon system and on the Lunar surface. We are focused on establishing the lunar infrastructure and basis for commerce to inform and sustain human presence off Earth. We believe our business is well positioned for continued growth and expansion as we scale these services. Our vision is that our infrastructure services enable our customers to focus on their unique contributions to create a thriving, diverse cislunar economy and expand the commercial space exploration marketplace. IM is currently headquartered in Houston, Texas.
Intuitive Machines, Inc. was a blank check company originally incorporated on January 27, 2021 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. On September 24, 2021, IPAX consummated an initial public offering, after which its securities began trading on the Nasdaq Stock Market LLC (the “Nasdaq”).
IPAX Business Combination
On September 16, 2022, IPAX entered into a certain Business Combination Agreement (the “Business Combination Agreement”) by and between IPAX and Intuitive Machines, LLC, a Delaware limited liability company (formerly, a Texas limited liability company). On February 10, 2023, IPAX filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and certificate of corporate domestication with the Secretary of State of the State of Delaware, pursuant to which IPAX was domesticated and continues as a Delaware corporation, changing its name to “Intuitive Machines, Inc.”
On February 13, 2023 (the “Closing Date”), Intuitive Machines, Inc. and Intuitive Machines, LLC consummated the previously announced business combination (the “Business Combination”) and related transactions (the “Transactions”) contemplated by the Business Combination Agreement. As a result of the Transactions, all of the issued and outstanding common units of Intuitive Machines, LLC were converted into common stock of Intuitive Machines, Inc. using an exchange ratio of 0.5562 shares of Intuitive Machines, Inc. common stock per each unit of Intuitive Machines, LLC Common Unit. In addition, Intuitive Machines, LLC’s share-based compensation plan and related share-based compensation awards were exchanged or converted, as applicable, into common stock of Intuitive Machines, Inc.
In connection with the Transactions, the Company was reorganized into an umbrella partnership C corporation (or “Up-C”) structure, in which substantially all of the assets and business of the Company are held by Intuitive Machines, LLC and continue to operate through Intuitive Machines, LLC and its subsidiaries. Intuitive Machines, Inc. is a holding company whose only material asset is its equity ownership interests of Intuitive Machines, LLC. While Intuitive Machines, LLC became a subsidiary of Intuitive Machines, Inc. and Intuitive Machines, Inc. was appointed as its managing member, Intuitive Machines, LLC was deemed to be the acquirer in the Business Combination for accounting purposes. Accordingly, the Business Combination was accounted for as a reverse recapitalization, in which case the consolidated financial statements of the Company represent a continuation of Intuitive Machines, LLC and the issuance of common stock in exchange for the net assets of Intuitive Machines, Inc. was recorded at historical cost with no recognition of goodwill or other intangible assets. Operations prior to the Business Combination are those of Intuitive Machines, LLC. In addition, the number of shares subject to, and the exercise price of, the Company’s outstanding options were adjusted to reflect the Business Combination. The treatment of the Business Combination as a reverse recapitalization was based upon the pre-merger members of Intuitive Machines, LLC holding the majority of the voting interests of Intuitive Machines, Inc., Intuitive Machines, LLC’s existing management team serving as the initial management team of Intuitive Machines, Inc., Intuitive Machines, LLC’s appointment of the majority of the initial board of directors of Intuitive Machines, Inc., and the significance of Intuitive Machines, LLC’s operations prior to the Business Combination which represent the entirety of Company’s operations.
Beginning on February 14, 2023, the Company’s Class A common stock, par value $0.0001 per share (“Class A Common Stock”) and warrants to purchase the Class A Common Stock at an exercise price of $11.50 per share (the “Warrants” as further defined in Note 13) began trading on Nasdaq under the symbols “LUNR” and “LUNRW,” respectively. On February 4, 2025, the Company announced the redemption of all of its outstanding publicly issued Warrants. In connection with the redemption, the unexercised Warrants ceased trading on the Nasdaq and were delisted, with the suspension of trading effective before the market opened on March 6, 2025.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The Company’s unaudited condensed consolidated financial statements and related notes have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim reporting and pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements. Our condensed consolidated financial statements include the accounts of Intuitive Machines, Lanteris Space Holdings LLC (“Lanteris”), KinetX Inc. (“KinetX”), Space Network Solutions, LLC (“SNS” or “Space Network Solutions”) a majority-owned subsidiary, and IX, LLC, a variable interest entity (“VIE”) for which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024 contained in our Annual Report on Form 10-K, filed with the SEC on March 19, 2026. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. Management’s opinion is that all adjustments for a fair statement of the results for the interim periods have been made, and all adjustments are of a normal recurring nature or a description of the nature and amount of any adjustments other than normal recurring adjustments have been appropriately disclosed.
Reclassifications
Certain prior period amounts have been reclassified to conform to current period presentation. The Company reclassed certain prior period amounts to a separate line item in the condensed consolidated balance sheets and condensed consolidated statement of operations. These reclassifications did not result in any changes to previously reported net income.
Use of Estimates
The preparation of our condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Due to the inherent uncertainty involved in making estimates, actual results could differ from those estimates.
The Company bases its estimates and assumptions on historical experience, other factors, including the current economic environment, and various other judgments that it believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future reporting periods.
Segment Reporting
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (“CODM”) in making decisions regarding resource allocation and assessing performance. While the Company engages in manufacturing, mission services, and related activities, these operations are highly integrated and are not managed or evaluated separately by the CODM. The Company has determined that it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance. See Note 21 - Segment Information for additional disclosures on segment reporting.
Concentration of Credit Risks
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. By their nature, all such financial instruments involve risks, including the credit risk of nonperformance by counterparties.
The majority of the Company’s cash and cash equivalents are held at major financial institutions. Certain account balances exceed the Federal Deposit Insurance Corporation insurance limits of $250,000 per account. The Company generally does not require collateral to support the obligations of the counterparties and cash levels held at banks are more than federally insured limits. The Company limits its exposure to credit loss by maintaining its cash and cash equivalents with highly rated financial institutions. The Company has not experienced material losses on its deposits of cash and cash equivalents.
The Company monitors the creditworthiness of its customers to whom it grants credit terms in the normal course of its business. The Company evaluates the collectability of its accounts receivable based on known collection risks and historical experience. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations to the Company (e.g., bankruptcy filings, substantial downgrading of credit ratings), the Company records a specific allowance for expected credit losses against amounts to reduce the net recognized receivable to the amount it reasonably believes will be collected and revenue recognition is deferred until the amount is collected and the contract is completed. For all other customers, the Company records allowances for credit losses based on the specific analysis of the customer’s ability to pay on an as needed basis.
Major customers are defined as those individually comprising more than 10% of the Company’s total revenue. There were four major customer that accounted for 36%, 26%, 13%, and 13% of the Company’s total revenue for the three months ended March 31, 2026 and there was one major customer that accounted for 78% of the Company’s total revenue for the three months ended March 31, 2025. As of March 31, 2026, there were four major customers that accounted for 37%, 12%, 19%, and 14% of the accounts receivable balance as of March 31, 2026 and there was three major customer that accounted for 49%, 23%, and 11% of the accounts receivable balance as of December 31, 2025.
Major suppliers are defined as those individually comprising more than 10% of the annual goods or services purchased. There was one major supplier that accounted for 11% the goods and services we purchased during the three months ended March 31, 2026, and there was no major supplier that accounted for more than 10% of the goods and services purchased during three months ended March 31, 2025. As of March 31, 2026 and December 31, 2025, there was one major supplier that accounted for 19% and 11% of the accounts payable balance, respectively.
Trade and other receivables, net
Trade and other receivables include amounts billed to customers, unbilled receivables in which the Company’s right to consideration is unconditional and current portion of orbital receivables, net of allowance for expected credit losses. The Company bills customers as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, upon achievement of contractual milestones or upon deliveries. The Company estimates allowance for credit losses based on the credit worthiness of each customer, historical collections experience and other information, including the aging of the receivables. The Company writes off accounts receivable against the allowance for credit losses when a balance is unlikely to be collected.
Orbital Receivables
Orbital receivables relate to performance incentives due under certain satellite construction contracts that are paid over the in-orbit life of the satellite. Orbital receivables are recognized as revenue when measuring progress under the cost-to-cost method during the construction period. The interest portion of the in-orbit payments is recognized as orbital revenue and included in product revenue in the condensed consolidated statement of operations. Current orbital receivables are included in trade and other receivables, net and the long-term portion of orbital receivables, net is disclosed in the condensed consolidated balance sheets. See Note 5 - Trade and Other Receivables, net for additional information on the orbital receivables.
The Company records an allowance on its orbital receivables when, based on current events and circumstances, it believes it is probable the outstanding amounts will not be collected. The Company utilizes customer credit ratings, expected credit loss and other credit quality indicators, as well as contractual terms to evaluate the collectability of orbital receivables. When qualitative factors indicate that all or a portion of an outstanding orbital receivable is uncollectable, or that all or a portion of an outstanding orbital receivable previously deemed uncollectable is collectable, a fair value assessment is performed using a discounted cash flow model as an indicator to determine whether an increase or decrease in the allowance is necessary. Increases and decreases in the orbital receivables allowance are included in (gain) loss on orbital receivables allowance in the product revenue on the condensed consolidated statements of operations.
If the Company does not fulfill its performance obligation associated with its orbital receivables, a write-off of those orbital receivables will occur resulting in a reduction in the contractual value and revenue recognition associated with the performance obligation. The Company has a revolving securitization facility agreement with an international financial institution. Under the terms of the agreement, the Company may offer to sell eligible orbital receivables from time to time with terms of five years or less, discounted to face value using effective interest rates.
The orbital receivables that have been securitized remain recognized on the condensed consolidated balance sheets as the Company does not meet the accounting criteria for surrendering control of the receivables. The net proceeds received on the orbital receivables have been recognized as securitization liabilities and are subsequently measured at amortized cost
using the effective interest rate method. Securitization liabilities are presented in other current liabilities and other non-current liabilities on the condensed consolidated balance sheets. The securitized orbital receivables and the securitization liabilities are being drawn down as payments are received from the customers and passed on to the purchaser of the tranche. The Company continues to recognize orbital revenue on the orbital receivables that are subject to the securitization transactions and recognizes interest expense to accrete the securitization liability.
Inventory
Inventories are measured at the lower of cost or net realizable value and consist primarily of parts and sub-assemblies used in the manufacturing of satellites. The cost of inventories is determined on a first-in-first-out basis or weighted average cost basis, depending on the nature of the inventory. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expense. Inventory is impaired when it is probable inventory values exceed their net realizable value.
Transaction Costs
Business Acquisitions
Transaction costs consists of direct legal, consulting, audit and other fees related to the business acquisition of Lanteris as further described herein in Note 3 - Acquisitions. For the three months ended March 31, 2026, transaction costs incurred related to acquisitions totaled approximately $20.0 million and was recorded to general and administrative expenses in our statement of operations.
Issuance of Securities
Transaction costs related to various agreements for the issuance of securities (as further described in Note 12), includes direct legal, broker, accounting and other fees. Transaction costs related to these activities totaled approximately $7.5 million for the three months ended March 31, 2026 and were netted against the proceeds recorded in additional paid in capital.
Warranty and After-Sale Service Costs
Warranty and after-sale service provisions are based on management’s best estimate of the expected obligation using historical warranty data and experience. In connection with our acquisition of Lanteris (as further discussed in Note 3 - Acquisitions), we assumed warranty and after-sale service liabilities which are presented in other current liabilities and other long-term liabilities on our condensed consolidated balance sheets. Warranty and after-sale service costs are recognized within cost of product revenue (excluding depreciation and amortization) in the condensed consolidated statement of operations. The current and non-current portions of the warranty and after-sale service liabilities totaled $11.7 million as of March 31, 2026 and $13.3 million as of January 13, 2026, the acquisition date of Lanteris, with the $1.6 million change attributable to payments and uses of the warranty.
Defined Benefit Pension and Other Postretirement Benefit Plans
The Company assumed defined benefit pension and other postretirement benefit plans for certain employees associated with the recent Lanteris acquisition. Pension and postretirement obligation balances and related costs reflected within the condensed consolidated financial statements include costs directly attributable to plans dedicated to the Company. The pension and other postretirement plan benefits were frozen on December 31, 2013. See Note 15 - Employee Benefit Plans for additional information on the defined benefit and other postretirement plans and Note 3 - Acquisitions for more information on the acquisition of Lanteris.
The Company recognizes the funded status of each pension and other postretirement benefit plan in the condensed consolidated balance sheets. The calculation of pension and other postretirement benefit obligations is performed annually by qualified actuaries using the projected unit credit actuarial cost method. The projected benefit obligation is the sum of the actuarial present value of all pension benefits attributed to benefit service completed to the determination date.
Pension and other postretirement plan liabilities are revalued annually, or when an event occurs that requires remeasurement, based on updated assumptions and information about the individuals covered by the plan. The Company’s net obligation in respect of the pension and other postretirement benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the prior periods, discounting that amount and deducting the fair value of associated plan assets.
The Company uses the net asset value (“NAV”) practical expedient to measure the fair value of the plan’s commingled fund investments. These commingled fund investments for which the fair value is measured using the NAV practical expedient are excluded from the fair value hierarchy.
The Company recognizes the amortization of prior service costs as a component of general and administrative expense. All other costs, including administrative expenses related to frozen plans, are recognized within other income (expense), net. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in the net benefit liability that relates to past service or the gain or loss on curtailment is recognized immediately in accumulated other comprehensive income (loss). The Company recognizes gains or losses on the settlement of a defined benefit plan when settlement occurs.
For the Company’s pension and other postretirement benefit plans, accumulated actuarial gains and losses in excess of a 10 percent corridor and the prior service cost are amortized on a straight-line basis from the date recognized over the average remaining service period of active participants or over the average life expectancy for plans with significant inactive participants.
Liquidity and Capital Resources
The unaudited condensed consolidated financial statements as of March 31, 2026 and for the three months ended March 31, 2026 and 2025, and related notes were prepared on the basis of a going concern, which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business.
As of March 31, 2026, the Company had cash and cash equivalents of $231.6 million and working capital of $89.8 million. The Company invests excess cash in highly liquid, low risk interest-bearing overnight sweep and demand deposit accounts with major financial institutions. The Company has historically funded its operations through internally generated cash on hand, proceeds from sales of its capital stock, proceeds from warrant exercises, and proceeds from the issuance of bank debt.
On January 13, 2026, the Company completed the acquisition of 100% of the issued and outstanding membership interests of Lanteris Space Holdings LLC (“Lanteris”), formerly Maxar Space Systems, a spacecraft manufacturer, from Advent International LLC. The aggregate consideration transferred at the closing of the acquisition was $851.0 million, consisting of $403.3 million in cash plus $43.7 million of transaction bonuses deemed to be part of consideration and the issuance of 22,991,028 shares of the Company’s Class A Common Stock valued at $404.0 million based on the acquisition date closing stock price of $17.57. The Company funded the cash consideration using cash on hand. See Note 3 - Acquisitions for more information on the acquisition of Lanteris.
On February 27, 2026, the Company completed the issuance and sale to certain institutional investors or their affiliates (collectively, the “Investors”) of 11,574,069 shares of the Company’s Class A Common Stock at a price of $15.12 per share for an aggregate purchase price of $175.0 million pursuant to the terms of a definitive securities purchase agreement (the “Securities Purchase Agreement”), and incurred related transaction costs of $7.5 million for the three months ended March 31, 2026. Refer to Note 12 for additional information on this issuance.
Management believes that the cash and cash equivalents as of March 31, 2026 and the liquidity provided the proceeds of the issuance of securities pursuant to the Securities Purchase Agreement and the issuance of the Convertible Notes (defined in Note 10 - Debt), will be sufficient to fund the short-term liquidity needs and the execution of the business plan through at least the twelve-month period from the date the financial statements are issued.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to improve the disclosures of expenses by providing more detailed information about the types of expenses in commonly presented expense captions. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The standard can be applied either prospectively or retrospectively. The Company is currently evaluating the impact of the standard on the presentation of its consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which clarifies the requirements for determining whether to account for certain early settlements of convertible debt instruments as induced conversions or extinguishments. The standard is
effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those fiscal years. Early adoption is permitted. The standard can be applied either prospectively or retrospectively. Management does not expect this new guidance to have a material impact on the Company’s consolidated financial statements.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which changes how companies determine the accounting acquirer in certain business combinations involving variable interest entities. The standard is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods. The standard can be adopted early and must be applied prospectively to any acquisition transaction that occurs after the initial application date. The Company decided to early adopt this standard as of January 1, 2026, and applied the new guidance when analyzing the acquisition.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses for Accounts Receivable and Contract Assets which provides all entities a practical expedient option when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, including those assets acquired in a transaction accounted for under Topic 805, Business Combinations. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, and applied prospectively. Early adoption is permitted. The Company has adopted the amendments as of January 1, 2026, with no material impact to its consolidated financial statements.
In September 2025, FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 modernizes the accounting for internal-use software costs by eliminating the prescriptive and sequential development stage model and introducing a principles-based framework requiring companies to capitalize internal-use software costs when management commits to funding the software project and it is probable the project will be completed. The amendment is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company has adopted this ASU as of January 1, 2026, with no material impact to its consolidated financial statements.
In December 2025, FASB issued ASU 2025-10, Government Grants (Topic 832) - Accounting for Government Grants Received by Business Entities ASU 2025-10 which establishes authoritative guidance for the accounting of government grants received by business entities. The guidance requires recognition of grants when it is probable that the entity will comply with the related conditions and that the grant will be received. Asset-related grants may be recorded as deferred income or as a reduction of the related asset, while income-related grants are recognized in earnings over the periods in which the related costs are incurred. The amendment is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the potential impacts of adopting this ASU on its consolidated financial statements.
Other Current Liabilities
As of March 31, 2026 and December 31, 2025, other current liabilities consisted of the following (in thousands):
| | | | | | | | | | | | |
| March 31,
2026 | | December 31,
2025 | |
| Accrued compensation and benefits | $ | 26,609 | | | $ | 12,818 | | |
| Income tax liability | 143 | | | 143 | | |
| Professional fees accruals | 6,330 | | | 11,458 | | |
| Commercial insurance financing | 3,912 | | | — | | |
| Loan interest payable | 5,343 | | | 3,186 | | |
| Securitization liabilities - current | 24,869 | | | — | | |
Contingent consideration liabilities (Note 3 and 16) | 5,874 | | | 5,353 | | |
| Pension liability - current | 1,868 | | | — | | |
| Warranty and after-sale service liabilities | 5,000 | | | — | | |
| Other accrued liabilities | 10,468 | | | 70 | | |
| Other current liabilities | $ | 90,416 | | | $ | 33,028 | | |
NOTE 3 - ACQUISITIONS
Lanteris Space Holdings LLC Acquisition
On January 13, 2026, the Company completed the acquisition of 100% of the issued and outstanding membership interests of Lanteris, a spacecraft manufacturer serving national security, civil, and commercial customers. The acquisition expands the Company’s spacecraft manufacturing and space systems capabilities. The acquisition date fair value of consideration transferred totaled approximately $851.0 million consisting of $403.3 million in cash, $43.7 million of cash transaction bonuses (which were included in consideration as they had no required service conditions and were deemed to be for the benefit of the Company), and the issuance of 22,991,028 shares of the Company’s Class A Common Stock valued at $404.0 million, based on the acquisition date closing stock price of $17.57 per share. The Company funded the cash consideration and cash transaction bonuses using cash on hand. The excess of the consideration transferred over the fair value of the acquired net assets was recorded as goodwill which primarily represents expected growth synergies, developed workforce, and future opportunities. The goodwill is partially deductible for income tax purposes. As of March 31, 2026, the Company has incurred acquisition-related costs of $29.4 million (consisting of $10.4 million incurred during the fourth quarter of 2025 and $19.0 million during the first quarter of 2026), which are recorded in general and administrative expense on our condensed consolidated statement of operations.
The following table presents the purchase consideration, acquisition related costs, and the preliminary estimated fair values of the assets acquired and liabilities assumed by the Company as of the acquisition date (in thousands):
| | | | | | | | |
| | January 13, 2026 |
| Cash consideration | | $ | 403,340 | |
| Fair value of Class A Common Stock issued | | 403,953 | |
| Transaction bonuses and other adjustments | | 43,689 | |
| Purchase consideration | | $ | 850,982 | |
| | |
| | |
| | |
| Assets: | | |
| Cash and cash equivalents | | $ | 2,242 | |
| Restricted cash | | 268 | |
| Trade and other receivables | | 97,152 | |
| Contract assets | | 23,144 | |
| Inventory | | 56,147 | |
| Advances to suppliers | | 17,125 | |
| Prepaid and other current assets | | 5,798 | |
Property and equipment | | 162,908 | |
| Intangible assets | | 297,000 | |
Operating lease right-of-use assets | | 32,174 | |
| Orbital receivables, non-current | | 223,366 | |
| Total assets | | 917,325 | |
| Liabilities: | | |
Accounts payable and accrued expenses | | 40,429 | |
| Contract liabilities | | 161,716 | |
Operating lease liabilities, current | | 17,986 | |
| | |
Other current liabilities | | 61,977 | |
Pension and other postretirement benefits, non-current | | 54,792 | |
Operating lease liabilities, non-current | | 40,578 | |
Other non-current liabilities | | 49,535 | |
| Total liabilities | | 427,013 | |
| Noncontrolling interests | | 415 | |
| Fair value of net identifiable assets acquired | | 489,897 | |
| Goodwill | | $ | 361,085 | |
The following table summarizes the preliminary estimated fair values of intangible assets acquired by class and the related estimated lives (in thousands, except useful life in years):
| | | | | | | | | | | | | | |
| Intangible Asset | | Estimated Life in Years | | January 13, 2026 |
| Trademark / trade name | | 1 | | $ | 5,000 | |
| Customer relationships | | 15 | | 138,000 | |
| Developed technologies | | 15 | | 154,000 | |
| Total intangible assets | | | | $ | 297,000 | |
The amounts presented in the tables above represent the preliminary valuation analyses completed to assess the fair values of the assets acquired and liabilities assumed and the amount of goodwill to be recognized as of the acquisition date. These fair values were based on management’s estimates and assumptions but are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the acquisition date. All values remain preliminary including, but not limited to, intangible assets, including the preliminary assumptions used in their estimates of fair values and their respective estimated useful lives, the valuation of certain tangible and financial assets, working capital accounts, income taxes, and residual goodwill. The final determination of the fair values, purchase consideration, related income tax impacts and residual goodwill will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date as permitted under GAAP. Any adjustments to provisional amounts that are identified during the measurement period will be recorded in the reporting period in which the adjustment is determined.
The following unaudited supplemental pro forma results of operations have been prepared based on the historical information of the Company and Lanteris, and reflects the combined results of operations as if the acquisition had been consummated on January 1, 2025.
The unaudited supplemental pro forma financial information does not give effect to the potential impact of current financial conditions, any anticipated synergies, operating efficiencies or cost savings that we may expect to result from the acquisitions. The unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of what the actual results of operations would have been had these business combinations occurred on January 1, 2025.
| | | | | | | | | | | | | | | |
| | | | | Unaudited |
| | | Three Months Ended March 31, |
| (in thousands) | | | | | 2026 | | 2025 |
| Total revenues | | | | | $ | 199,846 | | | $ | 218,156 | |
| Net loss | | | | | $ | (54,361) | | | $ | (47,639) | |
| Net loss attributable to the Company | | | | | $ | (39,220) | | | $ | (60,010) | |
| Net loss attributable to Class A common shareholders | | | | | $ | (39,382) | | | $ | (60,157) | |
The result of operations of Lanteris has been included in the Company’s condensed consolidated statement of operations since the date of acquisition, January 13, 2026, and includes revenues of $141.6 million and operating income of $0.2 million for the three months ended March 31, 2026.
KinetX Acquisition
On October 1, 2025, the Company completed the stock purchase agreement to acquire 100% of the issued and outstanding capital stock of KinetX. KinetX is a privately-held, Arizona-based aerospace company with more than 30 years of experience delivering flight-proven, deep-space navigation, systems engineering, ground software, and constellation mission design to the U.S. government and international customers. The consideration for the acquisition totaled approximately $31.3 million, consisting of cash consideration of $15.0 million, seller payable adjustments of $1.1 million treated as consideration transferred, and the issuance of 1,104,178 shares of the Company’s Class A Common Stock valued at $11.7 million based on the acquisition date closing stock price of $10.61. Approximately 329,827 shares of Class A Common Stock valued at $3.5 million, were held back in escrow to settle any post-closing adjustments and/or potential claims. The holdback was accounted for as contingent consideration and recorded as a liability based on its estimated fair value as of the acquisition date. The Company funded the cash consideration using cash on hand. Goodwill primarily represents expected synergies, assembled workforce, and future growth opportunities. The goodwill is not fully deductible for income tax purposes.
The following table presents the purchase consideration and the preliminary estimated fair values of the assets acquired and liabilities assumed by the Company as of the acquisition date (in thousands):
| | | | | | | | |
| | October 1, 2025 |
| Cash consideration | | $ | 15,000 | |
| Fair value of Class A Common Stock issued | | 11,715 | |
| Equity holdback in escrow | | 3,500 | |
| Transaction costs and other adjustments payable to the seller | | 1,130 | |
| Purchase consideration | | $ | 31,345 | |
| | |
| Assets: | | |
| Cash and cash equivalents | | $ | 1,247 | |
| Trade accounts receivable | | 1,232 | |
| Contract assets | | 34 | |
| Prepaid and other current assets | | 306 | |
Property and equipment | | 134 | |
| Intangible assets | | 13,300 | |
Operating lease right-of-use assets | | 495 | |
| Total assets | | 16,748 | |
| Liabilities: | | |
Accounts payable and accrued expenses | | 232 | |
Operating lease liabilities, current | | 114 | |
Deferred tax liability, current | | 2,847 | |
Other current liabilities | | 584 | |
Operating lease liabilities, non-current | | 381 | |
| Total liabilities | | 4,159 | |
| Fair value of net identifiable assets acquired | | 12,589 | |
| Goodwill | | $ | 18,756 | |
The following table summarizes the preliminary estimated fair values of intangible assets acquired by class and the related estimated lives (in thousands, except useful life in years):
| | | | | | | | | | | | | | |
| Intangible Asset | | Estimated Life in Years | | October 1, 2025 |
| Customer relationships | | 10 | | $ | 1,900 | |
| Developed technology | | 10 | | 11,400 | |
| Total intangible assets | | | | $ | 13,300 | |
The amounts presented in the tables above represent preliminary valuation analyses completed to assess the fair values of the assets acquired and liabilities assumed and the amount of goodwill to be recognized as of the acquisition date. These fair values were based on management’s estimates and assumptions but are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the acquisition date. All values remain preliminary including, but not limited to, intangible assets, including the preliminary assumptions used in their estimates of fair values and their respective estimated useful lives, the valuation of certain tangible assets, working capital accounts, income taxes, and residual goodwill. The final determination of the fair values, purchase consideration, related income tax impacts and residual goodwill will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date as permitted under GAAP. Any adjustments to provisional amounts that are identified during the measurement period will be recorded in the reporting period in which the adjustment is determined.
The result of operations of KinetX has been included in the Company’s condensed consolidated statement of operations since the date of acquisition, October 1, 2025, and includes revenues of $1.5 million and the operating loss was nil for the three months ended March 31, 2026.
NOTE 4 - REVENUE
Disaggregated Revenue
The following table disaggregates our revenue by contract type for the three months ended March 31, 2026 and 2025 (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, |
| | | | | 2026 | | 2025 |
| Revenue by contract type | | | | | | | | | | | | | | | |
| Fixed price | | | | | | | | | $ | 162,087 | | | 87 | % | | $ | 38,183 | | | 61 | % |
| Cost reimbursable | | | | | | | | | 19,304 | | | 10 | % | | 22,597 | | | 36 | % |
| Time and materials | | | | | | | | | 2,239 | | | 1 | % | | 1,744 | | | 3 | % |
| Revenue from contracts with customers | | | | | | | | | 183,630 | | | 98 | % | | 62,524 | | | 100 | % |
Grant revenue | | | | | | | | | 3,100 | | | 2 | % | | — | | | — | % |
Total revenue | | | | | | | | | $ | 186,730 | | | 100 | % | | $ | 62,524 | | | 100 | % |
The following table disaggregates our revenue by customer type for the three months ended March 31, 2026 and 2025 (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, |
| | | | | 2026 | | 2025 |
Revenue by customer type | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | $ | 61,089 | | | 33 | % | | $ | 10,078 | | | 16 | % |
| Civil | | | | | | | | | 71,673 | | | 38 | % | | 52,091 | | | 83 | % |
National security | | | | | | | | | 50,868 | | | 27 | % | | 355 | | | 1 | % |
| | | | | | | | | | | | | | | |
Revenue from contracts with customers | | | | | | | | | 183,630 | | | 98 | % | | 62,524 | | | 100 | % |
Grant revenue | | | | | | | | | 3,100 | | | 2 | % | | — | | | — | % |
Total revenue | | | | | | | | | $ | 186,730 | | | 100 | % | | $ | 62,524 | | | 100 | % |
We geographically disaggregate our revenues based on the customer’s country of domicile. Most of our revenues are derived from customers in the U.S., and our revenues from foreign customers were nil and 8% of total revenues for the three months ended March 31, 2026 and 2025, respectively.
Contract Assets and Liabilities
Contract assets primarily relate to deferred contract costs for subcontracted launch services, as well as work completed not yet billed for performance obligations that are satisfied over time. Deferred contract costs and unbilled receivables are recorded contract assets on our condensed consolidated balance sheets. Contract assets related to deferred contract costs are
amortized straight-line across the life of the long-term service arrangement. Contract assets related to work completed for performance obligations that are satisfied over time are transferred to receivables when the right to consideration becomes unconditional. Contract liabilities relate to billings or consideration received in advance of performance (obligation to transfer goods or services to a customer) under the contract as well as provisions for loss contracts. Contract liabilities are recognized as revenue when the performance obligation has been performed. Current deferred revenue and provisions for loss contracts are recorded in current contract liabilities on our condensed consolidated balance sheets. Long-term deferred revenue and provisions for loss contracts are recorded in long-term contract liabilities on our condensed consolidated balance sheets.
The following table presents contract assets as of March 31, 2026 and December 31, 2025 (in thousands):
| | | | | | | | | | | |
| March 31,
2026 | | December 31,
2025 |
| Contract assets | | | |
Unbilled receivables(1) | $ | 41,320 | | | $ | 12,228 | |
| Deferred contract costs | 6,702 | | | 8 | |
| Total | $ | 48,022 | | | $ | 12,236 | |
(1) The balance as of March 31, 2026 includes approximately $23.5 million related to Lanteris, which was recently acquired on January 13, 2026. See Note 3 for additional information on the Lanteris acquisition.
Amortization expense associated with deferred contract costs for subcontracted launch services was recorded in cost of revenue and was $7.2 million and $8.0 million for the three months ended March 31, 2026 and 2025, respectively. Launch delay fees are recorded directly to the cost of revenue and was $1.4 million for the three months ended March 31, 2025 and no launch delay fees were incurred for the three months ended March 31, 2026.
The following table presents contract liabilities as of March 31, 2026 and December 31, 2025 (in thousands):
| | | | | | | | | | | |
| March 31,
2026 | | December 31,
2025 |
| | | |
| Contract liabilities – current | | | |
Deferred revenue(1) | $ | 198,329 | | | $ | 45,712 | |
| Contract loss provision | 5,701 | | | 6,996 | |
| Accrued launch costs | 1,545 | | | 4,660 | |
| Total contract liabilities – current | 205,575 | | | 57,368 | |
| Contract liabilities – long-term | | | |
| Deferred revenue | 2,434 | | | 5,900 | |
| Contract loss provision | 297 | | | 441 | |
| Total contract liabilities – long-term | 2,731 | | | 6,341 | |
| Total contract liabilities | $ | 208,306 | | | $ | 63,709 | |
(1) The balance as of March 31, 2026 includes approximately $160.2 million in contract liabilities, current, related to Lanteris, which was recently acquired on January 13, 2026. See Note 3 for additional information on the Lanteris acquisition.
Revenue recognized from amounts included in contract liabilities at the beginning of the period was $11.2 million and $14.9 million during the three months ended March 31, 2026 and 2025, respectively.
Loss Contracts
A contract loss occurs when the current estimate of the consideration that we expect to receive is less than the current estimate of total estimating costs to complete the contract. For purposes of determining the existence of or amount of a contract loss, we consider total contract consideration, including any variable consideration constrained for revenue recognition purposes. We may experience favorable or unfavorable changes to contract losses from time to time due to changes in estimated contract costs and modifications that result in changes to contract price. We recorded net losses related to contracts with customers of and $2.7 million and $1.3 million for the three months ended March 31, 2026 and 2025, respectively.
The status of these loss contracts was as follows:
•Our IM-2 mission contract for lunar payload services, became a loss contract in 2023 due to estimated contract costs exceeding the estimated amount of consideration that we expected to receive. The IM-2 mission associated with this contract was completed in March 2025. For the three months ended March 31, 2025, changes in estimated contract costs resulted in an $1.0 million in contract loss. During the third quarter of 2025, the IM-2 mission contract was closed-out and we recognized revenue of approximately $5.5 million was recognized in revenue. As of December 31, 2025, there were no contract loss provisions remaining recorded in contract liabilities, current in our condensed consolidated balance sheets.
•Our IM-3 mission contract for lunar payload services became a loss contract in 2021 due to estimated contract costs exceeding the estimated amount of consideration that we expected to receive. For the three months ended March 31, 2026 and 2025, changes in estimated contract costs resulted in an additional $2.8 million and $0.2 million in contract loss, respectively. The period of performance for this contract currently runs through March 2027. As of March 31, 2026, this contract was approximately 89% complete. As of March 31, 2026 and December 31, 2025, the contract loss provision recorded in contract liabilities, current was $5.2 million and $6.5 million, respectively in our condensed consolidated balance sheets.
•Our IM-4 mission contract for lunar payload services, became a loss contract during the second quarter of 2025 due to estimated contract costs exceeding the estimated amount of consideration that we expect to receive. For the three months ended March 31, 2026, changes in estimated contract costs resulted in a favorable change in contract loss of $51 thousand. As of March 31, 2026 this contract was approximately 42% complete. The period of performance for this contract currently runs through August 2028. As of March 31, 2026 and December 31, 2025, the contract loss provision recorded in contract liabilities, current was $0.5 million for both periods. The contract loss provision recorded in contract liabilities, non-current was $0.3 million and $0.4 million, respectively, in our condensed consolidated balance sheets.
•The remaining loss contracts are individually and collectively immaterial.
Remaining Performance Obligations
Remaining performance obligations represent the remaining transaction price of firm orders for which work has not been performed and excludes unexercised contract options. As of March 31, 2026, the aggregate amount of the transaction price allocated to remaining fixed price performance obligations was $792.3 million. The Company expects to recognize revenue on approximately 60-65% of the remaining performance obligations over the remaining 9 months, 25-30% in 2027 and the remaining thereafter over the next 3 years. Remaining performance obligations do not include variable consideration that was determined to be constrained as of March 31, 2026 due to the uncertainty of achieving performance milestones or other factors not yet resolved.
For time and materials contracts and cost reimbursable contracts, we have adopted the practical expedient that allows us to recognize revenue based on our right to invoice; therefore, we do not report unfulfilled performance obligations for time and materials and cost reimbursable agreements.
Grant Revenue and Related Matters
In April 2025, the Texas Space Commission (“TSC”) selected Intuitive Machines for a grant up to $10.0 million from the Space Exploration and Research Fund. This funding supports the development of an Earth reentry vehicle and orbital fabrication lab designed to enable microgravity biomanufacturing and is intended to serve as a critical risk-reduction platform for the Company’s future lunar sample return missions. Under the TSC grant, the Company will apply up to $10.0 million in funds pursuant to budget periods defined in the TSC award through June 30, 2026 as reimbursement for costs incurred in completing the tasks, specified by the Company, to complete the design of the Earth reentry vehicle. The TSC can terminate the TSC award for convenience. Under such a termination, the Company will be permitted to seek reimbursement of valid costs incurred through the date of termination. During the three months ended March 31, 2026, the Company recognized grant revenue of $3.1 million and corresponding cost of grant revenue on the condensed consolidated statement of operations.
NOTE 5 - TRADE AND OTHER RECEIVABLES, NET
| | | | | | | | | | | | | |
| March 31,
2026 | | December 31,
2025 | | |
| Trade receivables | $ | 64,611 | | | $ | 12,637 | | | |
| Orbital receivables, current | 39,256 | | | — | | | |
| Grant receivables | 5,573 | | | 2,851 | | | |
| Allowance for doubtful accounts | (3,652) | | | (3,295) | | | |
| Trade and other receivables, net | $ | 105,788 | | | $ | 12,193 | | | |
Orbital Receivables
In connection with our acquisition of Lanteris in January 2026, the Company acquired orbital receivables. As of March 31, 2026, non-current orbital receivables, net of allowances was $217.5 million.
The Company has orbital receivables from 12 customers of which there were two major customers that respectively accounted for 33% and 30% of the aggregate total of the orbital receivables, current and non-current, net of allowances as of March 31, 2026. During the three months ended March 31, 2026, the Company did not sell orbital receivables.
The expected timing of total contractual cash flows, including principal and interest payments for orbital receivables is as follows (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | 2026 | | 2027 | | 2028 | | 2029 | | 2030 | | Thereafter |
| Contractual cash flows from orbital receivables | $ | 293,753 | | | $ | 37,453 | | | $ | 49,032 | | | $ | 38,423 | | | $ | 33,569 | | | $ | 30,200 | | | $ | 105,076 | |
Securitization liabilities current and non-current are included in other current liabilities, and other non-current liabilities, respectively, in our condensed consolidated balance sheet are as follows (in thousands):
| | | | | | | | |
| | March 31,
2026 |
| Current portion | | $ | 24,869 | |
| Non-current portion | | 35,423 | |
| Total securitization liabilities | | $ | 60,292 | |
Allowance for credit losses
The following table provides a roll-forward of the Company’s allowance for credit losses related to our trade receivables (in thousands):
| | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, |
| | | | | 2026 | | 2025 |
| Beginning balance | | | | | $ | 3,295 | | | $ | — | |
| Provision for credit losses | | | | | 357 | | | — | |
| | | | | | | |
| Ending balance | | | | | $ | 3,652 | | | $ | — | |
NOTE 6 - INVENTORY
The Company acquired inventory in connection with its acquisition of Lanteris in January 2026, as further discussed in Note 3. As of March 31, 2026, inventories consisted of the following (in thousands):
| | | | | | | | |
| | March 31,
2026 |
| Raw materials | | $ | 41,877 | |
| | |
| | |
| | |
| Work in progress | | 15,996 | |
| Total Inventory | | $ | 57,873 | |
| | |
| | |
NOTE 7 - PROPERTY AND EQUIPMENT, NET
As of March 31, 2026 and December 31, 2025, property and equipment, net consisted of the following (in thousands):
| | | | | | | | | | | |
| March 31, 2026 (1) | | December 31,
2025 |
| Leasehold improvements | $ | 32,380 | | | $ | 336 | |
| Vehicles and trailers | 188 | | | 146 | |
| Computers and software | 11,589 | | | 7,931 | |
| Furniture and fixtures | 4,158 | | | 3,097 | |
| Machinery and equipment | 96,788 | | | 9,632 | |
| Construction in progress | 113,906 | | | 54,964 | |
| Property and equipment, gross | 259,009 | | | 76,106 | |
| Less: accumulated depreciation and amortization | (14,789) | | | (7,556) | |
| Property and equipment, net | $ | 244,220 | | | $ | 68,550 | |
(1) The balance as of March 31, 2026 includes approximately $158.6 million of property and equipment, net (of which $43.3 million is for construction in progress) related to Lanteris which was recently acquired on January 13, 2026. See Note 3 for additional information on the Lanteris acquisition.
Total depreciation expense related to property and equipment for the three months ended March 31, 2026 and 2025 was $7.2 million and $0.6 million, respectively.
As of March 31, 2026, construction in progress includes $66.7 million in capitalized costs associated with the fabrication and development of communications satellites and ground network assets, primarily in support of the NASA Near Space Network (“NSN”) contract
NOTE 8 - GOODWILL AND INTANGIBLE ASSETS, NET
Goodwill
The following table presents the changes in the Company’s goodwill balance as of March 31, 2026 (in thousands):
| | | | | | | | | | | | | | | | | |
| Gross Carrying Amount | | Impairment | | Net Carrying Amount |
| Balance, December 31, 2025 | $ | 18,697 | | | $ | — | | | $ | 18,697 | |
| Acquisition of Lanteris (Note 3) | 361,085 | | | — | | | 361,085 | |
| Adjustment related to KinetX acquisition | 58 | | | — | | | 58 | |
| Balance, March 31, 2026 | $ | 379,840 | | | $ | — | | | $ | 379,840 | |
Intangible Assets, Net
Intangible assets, net consist of the following as of March 31, 2026 and December 31, 2025 (in thousands, except useful life in years): | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | March 31, 2026 |
| | Weighted average useful life | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount |
| Acquired intangible assets | | | | | | | | |
| Trademark / trade name | | 1 | | $ | 5,000 | | | $ | (1,250) | | | $ | 3,750 | |
| Customer relationships | | 15 | | 139,900 | | | (2,017) | | | 137,883 | |
| Developed technology | | 14 | | 165,400 | | | (2,903) | | | 162,497 | |
| Total intangible assets, net | | | | $ | 310,300 | | | $ | (6,170) | | | $ | 304,130 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | December 31, 2025 |
| | Weighted average useful life | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount |
| Acquired intangible assets | | | | | | | | |
| Customer relationships | | 10 | | $ | 1,900 | | | $ | (47) | | | $ | 1,853 | |
| Developed technology | | 10 | | 11,400 | | | (285) | | | 11,115 | |
| Total intangible assets, net | | | | $ | 13,300 | | | $ | (332) | | | $ | 12,968 | |
Our acquired intangible assets are amortized to expense on a straight-line basis over their estimated useful lives. Amortization expense was $5.8 million and zero for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026 and 2025, the Company did not recognize any impairment losses related to intangible assets. As of March 31, 2026, estimated future amortization expense for acquired intangible assets is approximately $17.5 million for the remainder of 2026 and $18.3 million per year for each of the years from 2027 through 2030.
For additional information on our acquired intangible assets, see Note 3.
NOTE 9 - LEASES
The Company leases real estate for administrative office space, research, marketing and light manufacturing operations of the lessee’s aerospace related research and development business under operating leases.
The Company has operating and finance leases for real estate and equipment with remaining lease terms ranging from 7 months to 271 months, some of which contain options to extend and some of which contain options to terminate the lease without cause at the option of lessee.
The Company’s real estate leasing agreements include terms requiring the Company to reimburse the lessor for its share of real estate taxes, insurance, operating costs and utilities which the Company accounts for as variable lease costs when incurred since the Company has elected to not separate lease and non-lease components, and hence are not included in the measurement of lease liability. There are no restrictions or covenants imposed by any of the leases, and none of the Company’s leases contain material residual value guarantees.
The components of total lease expense recorded in cost of product revenue (excluding depreciation and amortization) and general and administrative expense (excluding depreciation and amortization) are as follows (in thousands):
| | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, |
| | | | | 2026 | | 2025 |
| Operating lease cost | | | | | $ | 3,344 | | | $ | 1,193 | |
| Finance lease cost | | | | | 9 | | | 11 | |
| Variable lease cost | | | | | 688 | | | — | |
| Short-term lease cost | | | | | 125 | | | 4 | |
| Total lease cost | | | | | $ | 4,166 | | | $ | 1,208 | |
The components of supplemental cash flow information are as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, |
| 2026 | | 2025 |
| Operating Leases | | Finance Leases | | Operating Leases | | Finance Leases |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | | | |
| Cash flows from operating activities | $ | 10,463 | | | $ | 1 | | | $ | 601 | | | $ | 2 | |
| | | | | | | |
| Cash flows from financing activities | $ | — | | | $ | 11 | | | $ | — | | | $ | 12 | |
| | | | | | | |
| | | | | | | |
Weighted average remaining lease term (months) | 106 | | 21 | | 202 | | 27 |
Weighted average discount rate | 7.2 | % | | 8.0 | % | | 6.5 | % | | 8.0 | % |
The operating and finance lease ROU assets, current operating lease liabilities, current finance lease liabilities, non-current operating lease liabilities, and non-current finance lease liabilities are disclosed in our condensed consolidated balance sheets.
The table below includes the estimated future undiscounted cash flows for operating and finance leases as of March 31, 2026 (in thousands):
| | | | | | | | | | | |
| Operating Leases | | Finance
Leases |
| Remainder of 2026 | $ | 22,825 | | | $ | 32 | |
| 2027 | 21,071 | | | 21 | |
| 2028 | 18,088 | | | 8 | |
| 2029 | 17,766 | | | — | |
| 2030 | 3,941 | | | — | |
| Thereafter | 60,897 | | | — | |
| Total undiscounted lease payments | $ | 144,588 | | | $ | 61 | |
| Less: imputed interest | 54,097 | | | 4 | |
| Present value of lease liabilities | $ | 90,491 | | | $ | 57 | |
NOTE 10 - DEBT
The following table summarizes our outstanding debt (in thousands):
| | | | | | | | | | | |
| March 31,
2026 | | December 31,
2025 |
Convertible Notes | $ | 345,000 | | | $ | 345,000 | |
| | | |
| | | |
Less: unamortized debt discount | (8,340) | | | (8,803) | |
Less: unamortized debt issuance costs | (816) | | | (862) | |
| | | |
Total long-term debt | $ | 335,844 | | | $ | 335,335 | |
Convertible Notes
On August 18, 2025, the Company issued $345.0 million aggregate principal amount of 2.500% convertible senior notes due 2030 (the “Convertible Notes”). The Convertible Notes are general, unsecured obligations of the Company and bear interest at a fixed rate of 2.500% per year, payable semiannually in arrears on April 1 and October 1 of each year, beginning on April 1, 2026. The Convertible Notes will mature on October 1, 2030, unless earlier converted, redeemed, or repurchased.
The Convertible Notes are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding July 1, 2030 only under the following conditions: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2025 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “Measurement Period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of the Class A Common Stock and the conversion rate on each such trading day; (3) if the Company issues a notice of redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after July 1, 2030 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time, in integral multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing conditions. Upon conversion, the Company may satisfy its conversion obligation by paying or delivering, as the case may be, cash, shares of Class A Common Stock or a combination of cash and shares of Class A Common Stock, at the Company’s election.
The Company may not redeem the notes prior to October 6, 2028. The Company may redeem for cash all or any portion of the notes, at the Company’s option, on or after October 6, 2028 and prior to the 26th scheduled trading day immediately
preceding the maturity date, but only if the “liquidity condition” (as defined below) is satisfied and the last reported sale price of the Class A Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The “liquidity condition” is satisfied if the Company has filed all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months, after giving effect to all applicable grace periods thereunder and other than current reports on Form 8-K; or if the Company has elected to settle all conversions by cash settlement. If the Company redeems less than all the outstanding Convertible Notes, at least $75.0 million aggregate principal amount must be outstanding and not subject to redemption as of, and after giving effect to, delivery of the relevant notice of redemption (unless the Company makes an “all notes election” with respect to such partial redemption, in which case such partial redemption limitation shall not apply). No sinking fund is provided for the notes.
The initial conversion rate for the Convertible Notes is 76.2631 shares of Class A Common Stock per $1,000 principal amount of the notes, which represents an initial conversion price of approximately $13.1125 per share of Class A Common Stock. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events. In addition, holders who convert their notes in connection with a make-whole fundamental change or a notice of redemption may be entitled to an increase in the conversion rate. For the potential dilutive impact of the Convertible Notes if-converted, refer to Note 17 - Net Loss per Share.
The Convertible Notes include customary covenants and certain events of default after which the notes may be declared immediately due and payable and set forth certain types of bankruptcy or insolvency events of default involving the Company after which the notes become automatically due and payable. As of March 31, 2026, the Company was in compliance with all debt covenant requirements related to the Convertible Notes.
As of March 31, 2026, the aggregate fair value of the Convertible Notes was $607.6 million based on an observable market quote in an active market (Level 2 inputs). Debt discount and issuance costs are comprised of costs incurred in connection with debt issuance and are presented in the accompanying condensed consolidated balance sheet as a deduction to the carrying amount of the debt and amortized using the effective interest method to interest expense over the term of the debt. The conversion feature was evaluated under ASC 815, “Derivatives and Hedging” and ASC 470-20 “Debt with Conversion and Other Options” and was not separated as a derivative because it met the equity scope exception; therefore, the Convertible Notes are accounted for entirely as a liability. During the three months ended March 31, 2026, the effective interest rate on the Convertible Notes, including the impact of the debt discount and issuance costs, was approximately 3.09% and the Company recognized $2.7 million of interest expense related to the Convertible Notes which included the amortization of the debt discount and issuance costs of $0.5 million.
Capped Calls
On August 18, 2025, in connection with the issuance of the Convertible Notes (as described above), the Company entered into capped call transactions (the “Capped Calls”) with certain financial institutions at an aggregate cost of approximately $36.8 million. The Capped Calls cover, subject to anti-dilution adjustments, the number of Class A Common Stock underlying the Convertible Notes. The Capped Calls can be settled in cash or shares at the Company’s option and are expected generally to reduce the potential dilution to the Class A Common Stock upon any conversion of the Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the Convertible Notes. The Capped Calls have an initial strike price of $13.1125 and an initial cap price of $20.9800 per share, which are subject to certain adjustments under the terms of the Capped Calls. The Capped Calls meet the criteria for equity classification under ASC 815-40 as they are indexed to the Company’s own stock and require settlement in shares or cash at the Company’s option. The Capped Calls cover approximately 26,310,770 of Class A Common Stock. These instruments are excluded from diluted earnings per share calculations as they are currently anti-dilutive.
Stifel Loan Agreement
On March 4, 2025, we entered into a loan and security agreement (the “Loan Agreement”) with Stifel Bank. The Loan Agreement provides for a secured revolving credit facility in an aggregate principal amount of up to $40.0 million (the “Revolving Facility”). The proceeds of the loans (and any letters of credit issued thereunder) may be used for the funding of growth initiatives, including working capital needs and general corporate purposes as the Company continues to focus on minimizing its cost of capital while maximizing available funding alternatives. Amounts outstanding under the Revolving Facility bear interest at a rate per annum equal to the greater of (a) Term SOFR (secured overnight financing rate) plus 2.75% and (b) 6.00% and requires the Company to meet certain financial and other covenants. The Loan
Agreement matures on April 30, 2027 (the “Maturity Date”). Subject to certain conditions in the Loan Agreement, amounts borrowed thereunder may be repaid and reborrowed at any time prior to the Maturity Date.
On January 12, 2026, the Company and Stifel Bank entered into a waiver, in respect to the Loan Agreement pursuant to which Stifel Bank consented to the acquisition of Lanteris (as discussed in Note 3) and halted any borrowing and covenant obligations by the Company under the Revolving Facility. As of March 31, 2026, there was no outstanding debt under the Stifel Loan Agreement.
NOTE 11 - INCOME TAXES
The Company is a corporation and thus is subject to United States (“U.S.”) federal, state and local income taxes. Intuitive Machines, LLC is a partnership for U.S. federal income tax purposes and therefore does not pay U.S. federal income tax on its taxable income. Instead, the Intuitive Machines, LLC unitholders, including the Company, are liable for U.S. federal income tax on their respective shares of Intuitive Machines, LLC’s taxable income. Intuitive Machines, LLC is liable for income taxes in those states which tax entities classified as partnerships for U.S. federal income tax purposes.
For the three months ended March 31, 2026, we recognized $2 thousand U.S. federal and state expense for income taxes. For the three months ended March 31, 2025, we recognized no U.S. federal and state expense for income taxes. Our effective combined U.S. federal and state income tax rates were 0.00% for both periods.
In conjunction with the consummation of the Transactions, Intuitive Machines, Inc. entered into a tax receivable agreement (the “TRA”). Pursuant to the TRA, the Company is required to pay the TRA Holders (certain Intuitive Machines, LLC members and related parties to the Company) 85% of the amount of the cash tax savings, if any, in U.S. federal, state, and local taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that the Company realizes, or is deemed to realize, as a result of certain tax attributes, including:
•existing tax basis in certain assets of Intuitive Machines, LLC and its subsidiaries;
•tax basis adjustments resulting from taxable exchanges of Intuitive Machines, LLC Common Units acquired by the Company;
•certain tax benefits realized by the Company as a result of the Business Combination; and
•tax deductions in respect of portions of certain payments made under the TRA.
All such payments to the TRA Holders are the obligations of the Company, and not that of Intuitive Machines, LLC. As of March 31, 2026, based primarily on historical losses of the Company, management has determined it is more-likely-than-not that the Company will be unable to utilize its deferred tax assets subject to the TRA; therefore, management applies a full valuation allowance to deferred tax asset for a corresponding liability under the TRA related to the tax savings the Company may realize from the utilization of tax deductions related to basis adjustments created by the transactions in the Business Combination Agreement. As of March 31, 2026, management does not expect a TRA liability to be recorded.
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. We have assessed the impact of the OBBBA and determined that the impact on our condensed consolidated financial statements is not material.
NOTE 12 - MEZZANINE EQUITY AND EQUITY
Capital Stock
The table below reflects share information about the Company’s capital stock as of March 31, 2026.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Par Value | | Authorized | | Issued | | Treasury Stock | | Outstanding |
| Class A Common Stock | $ | 0.0001 | | | 500,000,000 | | 162,010,801 | | (2,191,080) | | 159,819,721 |
| Class B Common Stock | $ | 0.0001 | | | 100,000,000 | | — | | — | | — |
| Class C Common Stock | $ | 0.0001 | | | 100,000,000 | | 56,994,367 | | — | | 56,994,367 |
| Series A Preferred Stock | $ | 0.0001 | | | 25,000,000 | | 5,000 | | — | | 5,000 |
| Total shares | | | 725,000,000 | | 219,010,168 | | (2,191,080) | | 216,819,088 |
Securities Purchase Agreement
On February 27, 2026, the Company completed the issuance and sale to the Investors of 11,574,069 shares of Class A Common Stock at a price of $15.12 per share for an aggregate purchase price of $175.0 million pursuant to the terms of the Securities Purchase Agreement.
Series A Preferred Stock (Mezzanine Equity)
As a result of the Private Placement Transaction on September 5, 2023 (as discussed below) and in accordance with the terms of the Certificate of Designation, the Series A Preferred Stock conversion price was reduced from $12.00 per share to $5.10 per share. Additionally, as a result of the Warrant Exercise Agreement on January 10, 2024 in conjunction with the warrant transactions discussed in Note 13, the Series A Preferred Stock conversion price was further reduced from $5.10 per share to $3.00 per share.
Redeemable Noncontrolling Interests (Mezzanine Equity)
As of March 31, 2026, the prior investors of Intuitive Machines, LLC own 26.3% of the outstanding common units of Intuitive Machines, LLC. The prior investors of Intuitive Machines, LLC have the right to exchange their common units in Intuitive Machines, LLC (along with the cancellation of the paired shares of Class B Common Stock or Class C Common Stock in Intuitive Machines, Inc.) for shares of Class A Common Stock on a one-to-one basis or cash proceeds for an equivalent amount. The option to redeem Intuitive Machines, LLC’s common units for cash proceeds must be approved by the Board. The ability to put common units is solely within the control of the holder of the redeemable noncontrolling interests. If the prior investors elect the redemption to be settled in cash, the cash used to settle the redemption must be funded through a private or public offering of Class A Common Stock and subject to the Company’s Board approval.
The financial results of Intuitive Machines, LLC and its subsidiaries are consolidated with Intuitive Machines, Inc. with the redeemable noncontrolling interests' share of our net loss separately allocated.
NOTE 13 - WARRANTS
Preferred Investor Warrants
In conjunction with the issuance of Series A Preferred Stock at closing of the Business Combination, the Company issued 541,667 Preferred Investor Warrants (of which, 104,157 are owned by a related party, Ghaffarian Enterprises, LLC) to purchase one share of the Company’s Class A Common Stock with an exercise price of $15.00, subject to adjustment. The Company evaluated the terms of the Preferred Investor Warrants and determined they meet the criteria to be classified in shareholders’ equity upon issuance.
The Preferred Investor Warrants were immediately exercisable upon issuance and expire five years from the closing of the Business Combination. The Preferred Investor Warrants include customary cash and cashless exercise provisions and may be exercised on a cashless basis if, at any time after the six month anniversary of the Closing Date, there is not an effective registration statement with respect to the Class A Common Stock. The Preferred Investor Warrants have the same terms
and conditions as the Public Warrants. The Preferred Investor Warrants do not entitle the holder to any voting rights, dividends or other rights as a shareholder of the Company prior to exercise.
As result of the Private Placement Transaction on September 5, 2023 discussed in Note 12 and in accordance with the terms of the Certificate of Designation, the Preferred Investor Warrants exercise price was reduced from $15.00 to $11.50 per share and the aggregate number of shares of Class A Common Stock issuable upon exercise of the Preferred Investor Warrants was proportionally increased to 706,522.
As of March 31, 2026, there have been no exercises of the Preferred Investor Warrants.
Conversion Warrants
In connection with the January 2024 Bridge Loan Conversion, the Company agreed to issue to the Guarantor, pursuant to Section 4(a)(2) of the Securities Act of 1933, (i) a new unregistered Series A Common Stock Purchase Warrant to purchase up to an aggregate of 4,150,780 shares of, at the Guarantor’s election, Class A Common Stock (at an exercise price per share equal to $2.57 per share), Class C Common Stock (at an exercise price per share equal to $0.0001 per share), or a combination thereof, and a term of 5 years, (the “Conversion Series A Warrant”) and (ii) a new unregistered Series B Common Stock Purchase Warrant to purchase up to an aggregate of 4,150,780 shares of, at the guarantor’s election, Class A Common Stock (at an exercise price per share equal to $2.57 per share), Class C Common Stock (at an exercise price per share equal to $0.0001 per share), or a combination thereof, and a term of 18 months (the “Conversion Series B Warrant”), collectively (the “Conversion Warrants”). On May 31, 2024, the guarantor assigned the Conversion Warrants to a third party investor in a private transaction. Pursuant to the assignment to a third party investor, the Conversion Warrants are no longer exercisable for Class C Common Stock. All other terms related to the Conversion Warrants remain the same as previously discussed. Pursuant to the guidance under ASC 480 “Distinguishing Liabilities from Equity,” the Company determined that the Conversion Warrants should be recorded as liabilities as of the issuance date and March 31, 2024 and subsequently determined that they meet the criteria in ASC 815, “Derivatives and Hedging”, to be classified as a derivative liability as of May 31, 2024 and June 30, 2024, initially measured at fair value with changes in fair value recognized in earnings in other income (expense) on the condensed consolidated statement of operations.
During the period from June 5, 2024 to June 7, 2024, the investor exercised 300,000 Conversion Series B Warrants, resulting in the issuance of an equal number of shares of Class A Common Stock. During the period from November 21, 2024 to November 29, 2024, the investor exercised the remaining 3,850,780 Conversion Series B Warrants, resulting in the issuance of an equal number of Class A Common Stock. As of March 31, 2026, there have been no exercises of the Conversion Series A Warrants.
During the three months ended March 31, 2026 and 2025, the Company recognized a loss of $9.4 million and a gain of $43.0 million, respectively, from the change in fair value of the Conversion Series A Warrant liability in our condensed consolidated statement of operations. See Note 16 for additional information on the fair value measurement of the Conversion Series A Warrants.
NOTE 14 - SHARE-BASED COMPENSATION
2021 Unit Option Plan
On May 25, 2021, the Intuitive Machines, LLC’s board of directors adopted, and its members approved the 2021 Unit Option Plan (the “2021 Plan”). The 2021 Plan allowed Intuitive Machines, LLC to grant incentive unit options (“Incentive Unit Options”) to purchase Class B unit interests. Pursuant to the 2021 Plan, up to 6,125,000 shares of Class B units were reserved for issuance, upon exercise of the aforementioned Incentive Unit Options made to employees, directors and consultants.
As a result of the Business Combination discussed in Note 1 and per the terms of the Second Amended and Restated Intuitive Machines, LLC Operating Agreement, the unexpired and unexercised outstanding Incentive Unit Options at the closing of the Business Combination, whether vested or unvested, were proportionately adjusted using a conversion ratio of 0.5562 (rounded down to the nearest whole number of options). The exercise price of each option was adjusted accordingly. Each Incentive Unit Option continues to be subject to the terms and conditions of the 2021 Plan and will be exercisable for Class B common units of Intuitive Machines, LLC (the “Class B Common Units”). When an option is exercised, the participant will receive Class A Common Stock. As a result of the conversions, there was no incremental compensation cost and the terms of the outstanding options, including fair value, vesting conditions and classification, were unchanged.
As of March 31, 2026, Intuitive Machines, LLC was authorized to issue a total of 748,357 Class B Common Units upon exercise of the Incentive Unit Options under the 2021 Plan. The following table provides a summary of the option activity under the 2021 Plan for the three months ended March 31, 2026:
| | | | | | | | | | | | | | | | | | | | | | | |
| Number of
Options | | Weighted
Average
Exercise
Price | | Weighted
Average
Remaining
Contractual
Term
(Years) | | Aggregate
Intrinsic Value
(000’s) |
| Outstanding as of December 31, 2025 | 748,357 | | $ | 4.09 | | | 5.84 | | |
| Granted | — | | — | | | | | |
| Exercised | — | | — | | | | | |
| Forfeited | — | | — | | | | | |
Balance as of March 31, 2026 | 748,357 | | $ | 4.09 | | | 5.59 | | $ | 10,825,350 | |
Exercisable as of March 31, 2026 | 557,883 | | $ | 3.65 | | | 5.51 | | $ | 8,319,026 | |
Aggregate intrinsic value represents the difference between the exercise price of the options and the market price of our Class A Common Stock.
The following table provides a summary of weighted-average grant-date fair value of unit options under the 2021 Plan:
| | | | | |
| Weighted-
Average
Grant Date
Fair Value |
| Non-vested as of December 31, 2025 | $ | 3.17 | |
| Granted | — | |
| Vested | 0.56 | |
| Forfeited | — | |
Non-vested as of March 31, 2026 | $ | 3.17 | |
Share-based compensation expense related to options was $33 thousand and $47 thousand for the three months ended March 31, 2026 and 2025, respectively, and was classified in the condensed consolidated statement of operations under general and administrative expense. As of March 31, 2026, the Company had $100 thousand in estimated unrecognized share-based compensation costs related to outstanding unit options that is expected to be recognized over a weighted average period of 1.33 years.
Following the consummation of the Business Combination, no new awards will be granted under the 2021 Plan.
Intuitive Machines, Inc. 2023 Long Term Omnibus Incentive Plan (the “2023 Plan”)
The 2023 Plan, which became effective in conjunction with closing of the Business Combination, provides for the award to certain directors, officers, employees, consultants and advisors of the Company of incentive and nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, other stock-based awards as well as cash-based awards and dividend equivalents, as determined, and subject to the terms and conditions established, by the Company’s Compensation Committee. Under the 2023 Plan, a maximum of 12,706,811 shares of Class A Common Stock are authorized to be issued. As of March 31, 2026, the Company has issued restricted stock units (“RSUs”), restricted stock shares (“RSSs”), and performance stock units (“PSUs”). No other awards have been granted under the 2023 Plan. As of March 31, 2026, approximately 4,872,615 shares were available for future grants under the 2023 Plan.
Pursuant to the 2023 Plan, the Company grants RSUs and RSSs with time-based vesting requirements which typically vest over one to four years and PSUs with target performance-based vesting requirements based on continuous service. The fair value of these awards are based on the Company’s closing stock price on the date of grant. As of April 2025, all PSU grants were fully vested.
The following table provides a summary of the Company’s 2023 Plan activity:
| | | | | | | | | | | |
| Number of Units(1) | | Weighted Average Grant Date Fair Value |
| Outstanding as of December 31, 2025 | 2,752,419 | | $ | 7.58 | |
| Granted | 2,784,668 | | 17.50 | |
| Vested | (662,901) | | 7.03 | |
| Forfeited | (3,111) | | 14.79 | |
| Balance as of March 31, 2026 | 4,871,075 | | $ | 13.32 | |
(1) Includes the Company’s issuance of 1,518,163 RSSs associated with the Lanteris acquisition in January 2026. The fair value of the RSSs granted was $19.76 per share based on the grant date of when all terms and conditions were approved and communicated to employees. The RSSs have service-only vesting conditions and vest in one year. See Note 3 for more information on the Lanteris acquisition.
For the three months ended March 31, 2026 and 2025, the Company recognized share-based compensation expense related to the 2023 Plan awards of $8.8 million and $2.8 million, respectively, within general and administrative expense on our condensed consolidated statement of operations. As of March 31, 2026, the estimated unrecognized share-based compensation costs related to unvested RSUs and RSSs was $31.3 million and $23.7 million, respectively, that is expected to be recognized over a weighted average period of 3.22 years and 0.79 years, respectively.
NOTE 15 - EMPLOYEE BENEFIT PLANS
On January 13, 2026, we acquired Lanteris, and assumed its company-sponsored defined benefit pension and other postretirement plans covering certain employees, for which we recorded net liabilities of approximately $56.7 million (consisting of $1.9 million included in other current liabilities and $54.8 million in non-current liabilities), reflecting an approximate fair value of plan assets of $336.1 million and a projected benefit obligation of $392.8 million. The pension and other postretirement plan benefits were frozen on December 31, 2013. The defined benefit plan provides pension benefits based on various factors including prior earnings and length of service. The defined benefit plan is funded, and the Company’s funding requirements are based on the plans’ actuarial measurement framework as established by the plan agreements or applicable laws. The funded plans’ assets are legally separated from the Company and are held by an independent trustee. The trustee is responsible for ensuring that the funds are protected as per applicable laws. The other postretirement benefits, comprised of life insurance is primarily funded out of operating income (loss).
As of March 31, 2026, the Company recorded net pension liabilities of $53.9 million on our condensed consolidated balance sheet, consisting of $1.9 million recorded in other current liabilities and the non-current portion of $52.0 million recorded in pension and other post-retirement benefits.
The service cost component of net periodic benefit cost is recorded in operating expenses, and the other components are recorded in other income (expense), net, in our condensed consolidated statements of operations. The following table summarizes the components of net periodic benefit cost for the Company’s pension plans (in thousands):
| | | | | | | | | | | |
| | | January 13, 2026 - |
| | | | | March 31, 2026 | | |
| Service cost | | | | | $ | 700 | | | |
| Interest cost | | | | | 5,008 | | | |
| Expected return on plans assets | | | | | (5,754) | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Net periodic benefit | | | | | $ | (47) | | | |
The funding policy for the Company’s pension and postretirement benefit plans is to contribute at least the minimum required by applicable laws and regulations. During the period from January 13, 2026 to March 31, 2026, the Company contributed approximately $2.7 million to the pension and other postretirement benefit plans.
NOTE 16 - FAIR VALUE MEASUREMENTS
The following tables summarize the fair value of assets and liabilities that are recorded in the Company’s condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025 at fair value on a recurring basis.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2026 |
| Frequency of
Measurement | | Total | | Level 1 | | Level 2 | | Level 3 |
| Liabilities | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Warrant liabilities - Conversion Series A | Recurring | | 69,816 | | | — | | | — | | | 69,816 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Contingent consideration liabilities | Recurring | | 5,874 | | | 5,874 | | | $ | — | | | — | |
| | | | | | | | | |
| Total liabilities measured at fair value | | | $ | 75,690 | | | $ | 5,874 | | | $ | — | | | $ | 69,816 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2025 |
| Frequency of
Measurement | | Total | | Level 1 | | Level 2 | | Level 3 |
| Liabilities | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Warrant liabilities - Conversion Series A | Recurring | | $ | 60,394 | | | $ | — | | | $ | — | | | $ | 60,394 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Contingent consideration liabilities | Recurring | | 5,353 | | | 5,353 | | | — | | | — | |
| | | | | | | | | |
| Total liabilities measured at fair value | | | $ | 65,747 | | | $ | 5,353 | | | $ | — | | | $ | 60,394 | |
Cash and cash equivalents consist of cash in bank, time deposits and other highly liquid investments purchased with original maturities of less than 90 days. Because of the short-term nature of these instruments, the carrying amounts approximate fair value and therefore are considered Level 1 measurements under the fair value hierarchy.
The following tables provide roll-forwards of the Company’s Level 3 liabilities (in thousands):
| | | | | | | | | | | |
| | | Warrant liabilities - Series A | | | | |
| Balance, December 31, 2025 | | | $ | 60,394 | | | | | |
| Additions | | | — | | | | | |
| Change in fair value | | | 9,422 | | | | | |
| Converted to equity | | | — | | | | | |
| Balance, March 31, 2026 | | | $ | 69,816 | | | | | |
| | | | | | | | | | | | | | | |
| Earn-out liabilities | | Warrant liabilities - Series A | | | | |
| Balance, December 31, 2024 | $ | 134,156 | | | $ | 68,778 | | | | | |
| Additions | — | | | — | | | | | |
| Change in fair value | 33,369 | | | (43,002) | | | | | |
| Converted to equity | (167,525) | | | — | | | | | |
| Balance, March 31, 2025 | $ | — | | | $ | 25,776 | | | | | |
Earn-out Liabilities
As a result of the Business Combination, certain Intuitive Machines, LLC members received 10,000,000 earn out units of Intuitive Machines, LLC (“Earn Out Units”) subject to certain triggering events. Upon the vesting of any Earn Out Units, each of the certain Intuitive Machines, LLC members will be issued (i) by Intuitive Machines, LLC an equal number of Intuitive Machines, LLC Common Units and (ii) by Intuitive Machines, an equal number of shares of Class C Common Stock, in exchange for surrender of the applicable Earn Out Units and the payment to Intuitive Machines, Inc. of a per-share price equal to the par value per share of the Class C Common Stock. Under the earn out agreement, Earn Out Units of
2,500,000 vested during the year ended December 31, 2023, and the remaining 7,500,000 Earn Out Units vested during three months ended March 31, 2025.
Conversion Series A Warrant Liabilities
The fair value of the Conversion Series A Warrant liabilities as of March 31, 2026 was estimated using a Black-Scholes-Merton model. The significant assumptions utilized in estimating the fair value of the Conversion Series A Warrant liabilities include: (i) a per share price of the Class A Common Stock of $18.56, (ii) a dividend yield of 0.0%; (iii) a risk-free rate of 3.81%; and (iv) expected volatility of 108%.
Contingent Consideration Liability
On October 1, 2025 and in connection with the purchase consideration related to our acquisition of KinetX, approximately 329,827 shares of Class A Common Stock were held back in escrow to fund post-closing adjustments, in the amount of $3.5 million, based on the acquisition date closing stock price of $10.61, and recorded as a contingent consideration liability in our condensed consolidated balance sheets. During the three months ended March 31, 2026, 13,336 shares of Class A Common Stock were released from escrow and issued. The fair value of the contingent consideration liability of the remaining 316,491 shares of Class A Common Stock held in escrow as of March 31, 2026 was estimated based on our Class A Common Stock closing stock price of $18.56. See Note 3 - Acquisitions for additional information on the acquisition of KinetX.
NOTE 17 - NET LOSS PER SHARE
Basic net income (loss) per share of Class A common stock is computed by dividing net income (loss) attributable to Class A common shareholders for the three months ended March 31, 2026 and 2025 by the weighted-average number of shares of Class A common stock outstanding for the same periods.
Diluted net income (loss) per share of Class A common stock includes additional weighted average common shares that would have been outstanding if potential common shares with a dilutive effect had been issued using the if-converted method for the Series A Preferred Stock and Convertible Notes, and the treasury method for our RSUs, PSUs, options, and warrants. During loss periods, diluted net loss per share for all periods presented is the same as basic net loss per share as the inclusion of the potentially issuable shares would be anti-dilutive. The Capped Call transactions entered into in connection with the Convertible Notes (as discussed in Note 10) are excluded from diluted net income (loss) per share calculations as they are designed to reduce potential dilution and are currently anti-dilutive
The following table presents the computation of the basic and diluted loss per share of Class A Common Stock (in thousands, except share data):
| | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, |
| | | | | 2026 | | 2025 |
| Numerator | | | | | | | |
| Net income (loss) | | | | | $ | (52,528) | | | $ | 975 | |
| Less: Net income (loss) attributable to redeemable noncontrolling interest | | | | | (15,484) | | | 11,909 | |
| Less: Net income attributable to noncontrolling interest | | | | | 343 | | | 462 | |
| Net loss attributable to the Company | | | | | (37,387) | | | (11,396) | |
| Less: Cumulative preferred dividends | | | | | (162) | | | (147) | |
| Net loss attributable to Class A common shareholders | | | | | $ | (37,549) | | | $ | (11,543) | |
| Denominator | | | | | | | |
| Basic and diluted weighted-average shares of Class A common stock outstanding | | | | | 147,878,006 | | 107,081,918 |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Net loss per share of Class A common stock - basic and diluted | | | | | $ | (0.25) | | | $ | (0.11) | |
| | | | | | | |
The following table presents potentially dilutive securities, as of the end of the periods, excluded from the computation of diluted net loss per share of Class A Common Stock as their effect would be anti-dilutive, their exercise price was out-of-the-money, or because of unsatisfied contingent issuance conditions.
| | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, |
| | | | | 2026 | | 2025 |
RSU and RSS awards(1) | | | | | 5,060,387 | | 3,214,513 |
Options(1) | | | | | 748,357 | | 923,173 |
Series A Preferred Stock(2) | | | | | 2,224,832 | | 2,014,443 |
Warrants (Conversion Warrants and Preferred Investor Warrants)(1) | | | | | 4,857,302 | | 4,857,302 |
| | | | | | | |
Escrow Shares(3) | | | | | 316,491 | | — |
Convertible Notes(2) | | | | | 26,310,770 | | — |
(1) Represents number of instruments outstanding at the end of the period that were evaluated under the treasury stock method for potentially dilutive effects and were determined to be anti-dilutive. The number of 2023 Plan awards outstanding at the three months ended March 31, 2026 consists of 4,871,075 unvested RSU and RSS awards and 189,312 vested RSUs with elected deferrals of the issuance of Class A common stock.
(2) Represents number of instruments outstanding as converted at the end of the period that were evaluated under the if-converted method for potentially dilutive effects and were determined to be anti-dilutive.
(3) Represents the number of escrow shares outstanding at the end of the period due to unsatisfied contingent issuance conditions and were determined to be anti-dilutive.
NOTE 18 - COMMITMENTS AND CONTINGENCIES
Legal Proceedings
We are subject to legal proceedings, claims and liabilities that arise in the ordinary course of business. We accrue for losses associated with legal claims when such losses are considered probable and the amounts can be reasonably estimated. The Company bases any accrual for losses on a variety of factors, including informal settlement discussions. As of March 31, 2026 and December 31, 2025, the aggregate amount accrued on our condensed consolidated balance sheet is approximately $2.1 million and represents management’s best estimate of probable losses. For matters for which no accrual has currently been made or for potential losses in excess of amounts accrued, the Company currently believes, based on management’s assessment, that any losses that are reasonably possible and estimable will not, in the aggregate, have a material adverse effect on its financial position, results of operations, or cash flows. However, the ultimate outcome of legal proceedings involves judgments, estimates, and inherent uncertainties and cannot be predicted with certainty. Should the ultimate outcome of any legal matter be unfavorable, it could have a material adverse effect on our business, financial condition and results of operations. The Company may also incur substantial legal fees, which are expensed as incurred, in defending against legal claims.
On November 22, 2024, Starlight Strategies IV LLC (“Plaintiff”), an alleged successor in interest to a purported former holder of shares of the Company’s 10% Series A Cumulative Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) filed a breach of contract action in Delaware Chancery Court. The complaint alleges that the Plaintiff’s predecessor received fewer shares of common stock upon conversion of its shares of Series A Preferred Stock than it was allegedly entitled to receive under the terms of the applicable certificate of designation. The Plaintiff is seeking unspecified contractual damages and equitable relief. The Company has filed its answer to the complaint and asserted counterclaims against the Plaintiff and third-party claims against certain entities affiliated with the Plaintiff. Also, on January 24, 2025, Kingstown 1740 Fund L.P. and Kingstown Capital Partners LLC (together, “Kingstown”) moved to intervene, seeking to file a complaint in intervention against Starlight. The court granted Kingstown leave to intervene. In connection with the intervention, the Company has agreed to pay Kingstown’s legal fees. In February 2026, the Court granted leave for the parties to file motions for summary judgment and pending the Motions, it removed deadlines for Expert reports and trial date. The Company and Kingstown filed its Motions in April and Plaintiff’s Motions will be filed in May 2026. The Company has not recorded an accrual related to this matter because a loss is not considered probable or reasonably estimable at this time.
In October 2023, the Civil Division of the U.S. Department of Justice issued a Civil Investigative Demand as part of an investigation into allegations that Lanteris submitted, or caused to be submitted, false claims to the federal government by failing to meet cybersecurity requirements in federal regulations and government contracts issued to Lanteris and made or used false records or statements material to these false claims. In late 2025, the Department of Justice presented its initial civil investigation review to Lanteris that it alleged constitute False Claims Act violations related to certain federal government contracts awarded to it. Lanteris is cooperating with the investigation. In connection with the Company’s
acquisition of Lanteris, the Seller Parent, Vantor Holdings Inc., agreed to indemnify Intuitive Machines and its affiliates for the liability of Lanteris related to this investigation. At the request of the Department of Justice, a response and counter arguments to dispute the department’s assertions against Lanteris of False Claims Act violations will be made in the coming months.
Purchase Commitments
From time-to-time, we enter into long-term commitments with vendors to purchase launch services and for the development of certain components in conjunction with our obligations under revenue contracts with our customers. Our aggregate purchases under these commitments totaled approximately $26.1 million and $15.6 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had remaining purchase obligations under non-cancelable commitments with various vendors totaling $122.7 million of which approximately $47.1 million is due during the remaining of 2026, $73.1 million due in 2027, and the remaining $2.5 million due in 2028.
NOTE 19 - RELATED PARTY TRANSACTIONS
Intuitive Machines, IX LLC and Space Network Solutions, LLC have entered into recurring transaction agreements with certain related parties, including sales agreements and loan agreements.
KBR, Inc.
KBR, Inc. (“KBR”), a U.S.-based firm operating in the science, technology and engineering industries holds approximately 10% of the equity of Space Network Solutions, LLC (“SNS”), one of our operating subsidiaries. The Company recognized affiliate revenue from KBR related to engineering services of $0.4 million and $0.6 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026 and December 31, 2025, there was $0.4 million and $0.3 million, respectively, of affiliate accounts receivable related to KBR revenue.
In addition, SNS incurred cost of revenue with KBR related to the OMES III contract of $5.4 million and $6.3 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026 and December 31, 2025, there was $2.1 million and $1.6 million, respectively, of affiliate accounts payable related to cost of revenue with KBR. See Note 20 - Variable Interest Entities for more information on the OMES III contract with KBR.
Revenue and expenses related to KBR are incurred in the normal course of business and amounts are settled under normal business terms.
ASES
The Company recognized revenue from ASES related to engineering services of $0.2 million and $0.3 million for the three months ended March 31, 2026 and 2025, respectively. There was $0.2 million and $0.2 million of affiliate accounts receivable related to ASES revenue as of March 31, 2026 and December 31, 2025, respectively. ASES is a joint venture between Aerodyne and KBR. Kamal Ghaffarian, the Chairman of the Board and one of the co-founders of Intuitive Machines, LLC is a current member of management of Aerodyne Industries, LLC.
In addition, SNS incurred cost of revenue with Aerodyne related to the OMES III contract of $0.5 million and $0.7 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026 and December 31, 2025, there was $0.3 million and $0.1 million, respectively, of affiliate accounts payable related to cost of revenue with Aerodyne. See Note 20 - Variable Interest Entities for more information on the OMES III contract.
Revenue and expenses related to ASES are incurred in the normal course of business and amounts are settled under normal business terms.
X-energy, LLC
The Company incurred expenses with X-energy, LLC (“X-energy”) of zero and $0.3 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026 and December 31, 2025, there was no affiliate accounts payable related to X-energy expenses. Expenses related to X-energy are incurred in the normal course of business and amounts are settled under normal business terms. Kamal Ghaffarian, the Chairman of the Board and one of the co-founders of Intuitive Machines, LLC is the Executive Chairman of X-Energy Reactor Company, LLC, which is the parent company of X-Energy.
IBX, LLC and PTX, LLC
From time to time, the Company may incur expenses with IBX, LLC and PTX, LLC (“IBX/PTX”) for the provision of management and professional services in the day-to-day operation of our business. These expenses include, among others, fees for the provision of administrative, accounting and legal services. As such, expenses incurred in relation to IBX/PTX are incurred in the normal course of business and amounts are settled under normal business terms. IBX/PTX is an innovation and investment firm committed to advancing the state of humanity and human knowledge. Kamal Ghaffarian, the Chairman of the Board and one of the co-founders of Intuitive Machines, is a co-founder and current member of management of IBX/PTX. For the three months ended March 31, 2026 and 2025, the Company incurred no expenses. As of March 31, 2026 and December 31, 2025, there was zero and $26 thousand, respectively, of affiliate accounts payable related to IBX/PTX expenses.
NOTE 20 - VARIABLE INTEREST ENTITIES
The Company determines whether joint ventures in which it has invested meet the criteria of a variable interest entity or “VIE” at the start of each new venture and when a reconsideration event has occurred. A VIE is a legal entity that satisfies any of the following characteristics: (a) the legal entity does not have sufficient equity investment at risk; (b) the equity investors at risk as a group, lack the characteristics of a controlling financial interest; or ( the legal entity is structured with disproportionate voting rights.
The Company consolidates a VIE if it is determined to be the primary beneficiary of the VIE. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.
Space Network Solutions, LLC
The Company participates in the Space Network Solutions joint venture with KBR, a leading provider of specialized engineering, and professional, scientific and technical services primarily to the U.S. federal government. Under the terms of the Amended Space Network Solutions limited liability company agreement, we hold a 90% interest in the Space Network Solutions and KBR hold a 10% interest. Space Network Solutions is a VIE and Intuitive Machines is the primary beneficiary.
Space Network Solutions was formed to provide cyber security as well as communication & tracking services using its expertise in developing secure ground system architecture for lunar space missions. In the second quarter of 2023, NASA awarded Space Network Solutions a cost-plus-fixed-fee indefinite-delivery, indefinite quantity contract to support work related to the Joint Polar Satellite System, NASA’s Exploration and In-space Services. Intuitive Machines and KBR entered into a separate joint venture agreement (the “OMES III JV Agreement”) within Space Network Solutions to execute the OMES III contract with a profits interest of 47% for Intuitive Machines and 53% for KBR. We have determined that the OMES III JV Agreement represents a silo within Space Network Solutions and is a standalone VIE. Intuitive Machines is the primary beneficiary of this silo based on the governance structure of the OMES III JV Agreement. As of March 31, 2026, SNS LLC had total assets of $11.6 million and total liabilities of $8.6 million. As of December 31, 2025, SNS LLC had total assets of $7.8 million and total liabilities of $5.5 million.
NOTE 21 - SEGMENT INFORMATION
The Company operates in one operating segment and one reportable segment underpinned by three core pillars (delivery services, data transmission services, and infrastructure as a service) that have similar capabilities, customers, and economic characteristics. The Company’s chief operating decision-maker (“CODM”) is our chief executive officer. Our CODM reviews and evaluates consolidated Net income (loss), a U.S. GAAP measure, and Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”), a non-GAAP measure, and Total assets for purposes of evaluating financial performance, making operating decisions, allocating resources, and planning and forecasting for future periods. Although we utilize a non-GAAP measure of Adjusted EBITDA to evaluate our ability to generate cash and as an alternative measure of profitability, our primary profitability measure is the GAAP measure of Net income (loss).
All of the Company’s long-lived assets are maintained in the U.S. We geographically disaggregate our revenues based on the customer’s country of domicile and most of our revenues are derived from customers in the U.S. Refer to Note 2 for information regarding our major customers and Note 4 for further information on revenues.
The following presents the significant financial information with respect to the Company’s reportable segment for the three months ended March 31, 2026 and 2025 (in thousands):
| | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, |
| | | | | 2026 | | 2025 |
| Revenues | | | | | $ | 186,730 | | | $ | 62,524 | |
| Less: | | | | | | | |
Cost of revenue (excluding depreciation and amortization)(1) | | | | | 153,522 | | | 55,847 | |
| Depreciation and amortization | | | | | 13,048 | | | 623 | |
| | | | | | | |
| Research and development | | | | | 5,589 | | | 911 | |
General and administrative expense (excluding depreciation and amortization)(2)(3) | | | | | 50,671 | | | 15,220 | |
| Operating loss | | | | | (36,100) | | | (10,077) | |
| | | | | | | |
| Interest income | | | | | 1,431 | | | 1,419 | |
| Interest expense | | | | | (4,885) | | | (26) | |
| Change in fair value of earn-out liabilities | | | | | — | | | (33,369) | |
| Change in fair value of warrant liabilities | | | | | (9,422) | | | 43,002 | |
| Change in fair value of contingent consideration liabilities | | | | | (521) | | | — | |
| | | | | | | |
| | | | | | | |
| Other income, net | | | | | 72 | | | 26 | |
| Income tax expense | | | | | (2) | | | — | |
| Net income (loss) | | | | | $ | (49,427) | | | $ | 975 | |
(1) Cost of revenue consists primarily of direct material and labor costs, launch costs, manufacturing overhead, freight expense, and other personnel-related expenses, which include employee compensation and benefits and stock-based compensation.
(2) General and administrative expense includes sales and marketing expense primarily related to business development expenses such as, expenses such as, employee compensation and benefits, subcontract costs, marketing, and materials and supplies costs. Costs incurred for business development were $1.2 million and $0.5 million, for the three months ended March 31, 2026 and 2025, respectively.
(3) Other general and administrative expense primarily includes all other employee compensation and benefits, stock-based compensation, facilities costs, professional services, software licenses, and other administrative costs.
NOTE 22 - SUBSEQUENT EVENTS
On May 14, 2026, the Company entered into a Share Purchase Agreement (the “SPA”) with Goonhilly Holdings Limited (“Seller”), pursuant to which we agreed to acquire all of the issued and outstanding shares of Goonhilly Earth Station Limited (“Goonhilly Earth Station”), a ground station and satellite communications company incorporated in England and Wales (the “UK Acquisition”). The Company is a party to the SPA solely with respect to certain obligations relating to the issuance, transfer, lock-up and registration of shares of its Class A Class A Common Stock, and related securities-law matters.
The SPA is part of the contemplated acquisition of the Goonhilly group’s UK and U.S. operations. The SPA governs the UK Acquisition and also requires Seller to procure Goonhilly Holdings USA Inc. (“GHUI”) to enter into a separate Membership Interest Purchase Agreement (the “MIPA” or “U.S. Agreement”) with Buyer for the acquisition of Goonhilly Inc. (the “U.S. Target”), which is to be converted into a Delaware limited liability company (“Goonhilly LLC”). The U.S. Agreement is a Transaction Document under the SPA, and certain SPA conditions relate to the U.S. operations, including FCC approval, completion of the U.S. reorganization and specified U.S. property, tax, employee-benefit and environmental matters. The MIPA has not been executed as of the date of this Quarterly Report.
The aggregate consideration for the UK Acquisition (the “UK Consideration”) is £37,000,000, split equally between stock and cash. The stock portion consists of: 960,649 shares of Class A Common Stock (the “Consideration Shares”) using the volume weighted average price of the Common Stock for the twenty consecutive trading day period ending May 8, 2026, to be issued by the Company to Buyer in exchange for units of Buyer and immediately transferred by Buyer to Seller at Completion in an offshore transaction to a non-U.S. person pursuant to Regulation S under the Securities Act of 1933, as amended, In addition, the cash consideration includes a cash escrow deposit of £592,621.50. The UK Consideration is subject to post-closing adjustment for working capital, cash, debt, intra-company debt and, to the extent applicable, business-interruption insurance proceeds.
