Closing Bell - Manifest Space: Firefly’s Breakout Year with CEO Bill Weber 5/2/24

Episode Date: May 2, 2024

From leadership upheaval to a lunar launch on deck – 2024 is poised to be a breakout year for space startup Firefly Aerospace. CEO Bill Weber joins Morgan Brennan to discuss the slew of projects at the end-to-end space transportation company from this year’s Space Symposium.

2024 is poised to be a breakout year for a space startup that's been working on a plethora of projects. I think going to the moon and touching down softly and completing that mission 100%, that's going to sweep the entire world into what we're doing. It's going to bring the world to Firefly's doorstep, and we're mindful of that. So it is, you know, there's a quickening pace of the heart and we're feeling it. Firefly Aerospace has a small rocket called Alpha that's expected to launch as many as four times this year. On board one of those missions will be a new vehicle as well. Firefly's Eletra, an orbiting space tug that will provide in-space transportation and servicing to other spacecraft.

The quote unquote star of the show, though, according to CEO Bill Weber, will be Blue Ghost, the company's lunar lander, which is contracted with NASA to carry cargo to the surface of the moon just as 2024 comes to a close. As if it wasn't enough, Firefly Aerospace is also developing a medium-lift rocket with Northrop Grumman, the first article of which is expected to be delivered in early 2025. It's a major turnaround for a company that just two years ago, prior to Weber's arrival and an ownership stake taken by private equity firm AE Industrial Partners, was navigating leadership upheaval and an uncertain future. There's a lot of companies that had great technology. And as I said, they lost runway. They just they weren't funded. They weren't capitalized. Firefly won't be one of those. We will be one of the providers for launch

land in orbit. And there will be others. We're not going to operate exclusively on any of those domains, but we're excited. I think our future is really solid. I sat down recently from the Space Symposium in Colorado Springs with Weber to discuss how Firefly is realizing its vision as an end-to-end space transportation company. I'm Morgan Brennan, and this is Manifest Space. Joining me now here at the Space Symposium, Bill Weber, CEO of Firefly Aerospace. It's so great to speak with you again. Always a pleasure, Morgan. Thanks for having me back. You have so much going on since the last time you and I sat down.

It's kind of like where to start. So maybe where we start with is, you know, what the news is or, you know, sort of what the highlights or headlines are for Firefly at this symposium specifically. Yeah, so 2024 for Firefly is a huge year for operational capabilities. So we will launch Alpha four times. It's more than we've ever launched before. That gets us into the every other month cadence that we need to be going into 2025. They're paying customers for those flights and for more backlog. So that's huge. Actually getting to that demonstrated capability. Eletra, which is our orbiting spacecraft, that will fly its first mission on Alpha Flight 7, which will go in the September-October

timeframe. So we will have an orbiting high-Delta-B spacecraft, as we've said we were building. It'll go on its first mission this year. And then Blue Ghost, which is kind of the star of the show here at Space Symposium, it will launch sometime. We're in the window of November, December. And then we're going to orbit for about a month and then touch down softly in the Mare Chryseum region of the moon, which is kind of center mass between North and South Pole. Conduct science for about 14 days and yeah all of that's happening this year and as if that wasn't enough the medium

launch vehicle is being built right now as we speak we will deliver the first article of that in the early first quarter of 25. so we have a few things going on a few things going on is there one that you're most excited about? Listen, I think if you can't get excited about the possibility of going back to the moon, and that doesn't captivate your thoughts, there's something. They're all important. They're all important. And we've got similarly passionate people working on all of them. But I think going to the moon and touching down softly and completing that mission 100%,

that's going to sweep the entire world into what we're doing. It's going to bring the world to Firefly's doorstep, and we're mindful of that. So it is, you know, there's a quickening pace of the heart, and we're feeling it. So it's, yeah, it's good stuff. I mean, you look at these different pieces of the portfolio. What's the biggest business opportunity near term, medium term, longer term? Well, so getting Alpha flying regularly. When you look at the launch sector, it has not been a technology problem. It's been a rate problem. So there's good technology out there that just ran out of runway.

They couldn't raise capital because they couldn't get to rate. It is important for Alpha to fly, And we're doing that. We're executing on that. So that's near-term revenue. All of those are paid for. The lunar missions, interestingly enough, they come with them as a development project. They come with them a significant amount of forward capital. But we don't do those missions necessarily for the high profitability rate right now. But ultimately, when the commercial lunar economy comes out of these programs, that's when you commercial lunar economy comes out of these programs, that's when you'll see that be a significant revenue stream for Firefly at the

end of the decade. But the medium launch vehicle, that's the workhorse. As that's flying, that changes the complexity of Firefly's business plan dramatically. So that would be your near-term alpha, the mid-term is MLV, and then longer-term is the lander capability. So just to go back to lander for a minute, how many missions are you already contracted for? And when we do talk about this lunar economy, what is it going to take for it to really meaningfully materialize? Yeah, it's going to take some time. So we are contracted on three NASA CLPS missions on two different lander opportunities. So Blue Ghost 1, that's CLPS-19D, that flies at the end of this year.

And then CS3, CLPS-CS3, that is the mission to the far side of the moon or the dark side. And that goes about a year later at the end of December. That will be a two-stacked, it'll actually be an Eletra and a Blue Ghost lander as a transfer vehicle that will get us into lunar orbit. We'll leave a comms relay up and then we'll put the lander on the far side. All of that's important in the early stages right now to get down to the surface of the moon,

test the composition out ahead of human travel so that the commercial lunar economy can light up. That's going to take a little bit of time. And we think like the end of the decade is when things like, you know, Interlune has just announced helium-3 harvesting and the great opportunity there. Well, we work closely with them and will going forward. Those type opportunities start to come into focus when companies have proven they can actually get there. It's really hard to build a commercial business plan and deploy capital on it

when everything is theoretical about the return. So that's why the near-term CLPS missions are super important. The commercial economy will not generate unless they know they can get there. So that's what's at stake here, to demonstrate we can do it now. And then, again, just like launch, then you increase your pace. You increase your cadence. Okay.

So going back to the launch piece of this, and you just mentioned how much medium lift is going to, I guess, change the equation for Firefly. To dig a little deeper on that, walk me through why and what that market opportunity looks like at a time where we know launch services is a busy market in general. It is, but it still remains right now. There is capacity constraints. There is not enough lift to carry the things in the near term that

need to get to orbit. We do a lot of things theoretically about well what happens when this vehicle is flying at you know X rate and all of that but we've got to get there for all that to be realized. In the near term customers are telling us and they're telling the market that one size does not fit all. Things that should fly in a large vehicle should. Things that are sized to fly in an extremely small vehicle, economically, they should go there. Well, Alpha at one metric ton serves a particular customer,

just like the Victor's Knox mission. A certain weight payload that needs to go exactly where it needs to go and it needs to do that immediate, with some immediacy. Then when you move up market where you're not talking about the largest of large lifters, but you're talking about medium class, 16 to 17 metric tons, to populate a plane for satellite deployers and constellation deployers, that is a very real market. We have multi-year, multi-launch agreements

that are on the table right now with customers to sign up for that capacity. That should fly at a rate of somewhere between 6 to 12 through the 28, 29 timeframe. And then we think it's going to ramp. We don't have headlights that far out, but we think it's going to ramp significantly after that. We do believe that as launch settles out, there will not be, you know, one vehicle does everything for everybody all the time. It's not practical. There's no other modality of transportation where that's happened. None. Wheel, you know, ocean, water-based, rail, it just doesn't happen that way. And space will be simple. I think I've said that to you before. That's,

yeah, that we continue to test that theory to make sure we got that right and our customers are telling us we do so um you did mention evictus knox evictus knox that was that was a major moment basically turn around 24-hour turnaround for the government for the dod right to launch a payload to space um what did it take to pull that off, A, and B, on a day where I just heard from General Saltzman of the Space Force and Secretary Kendall of the Air Force that they are focused on space resiliency. They're focused on working with the commercial market to continue to acquire more launch capability, et cetera, over the coming years. How does this set the stage for that for Firefly? Yeah, not to steal a space phrase, but it was one small step. But it's going to lead into that capability as a function of

launch, period, end of story. Again, going back to other modalities of transportation, there's nothing else, no other mechanism to get where you want to go that you have to plan 12 months out or nine months out and then wait and then possibly scrub. And so Victus Knox represented the first call-up type mission where the provider knew very little, knew some. It would be wrong to say we were just sitting there with a rocket and Space Force said, "'Go, can you take this there?' We certainly had some predetermined possibilities, but we didn't know what they were going to tell us

the exact mission was at the time of the call-up. So being able to demonstrate, not just from a technology standpoint, the processes that we had to just break down, and as I've said before, not do things in serial, but do those in parallel. Not do things with 10-person teams when a five-person team can do step A, B, and C concurrently at the same time to really cram that time down. That's what happened on the launch side of things.

Same thing happened for Millennium and the payload preparation side of things. But administratively, paperwork that took, historically, three months to complete being done in 48 hours. Things that required five binders all being done electronically for the reviews. That is all about policy and regulatory change that is going to be required. It doesn't matter if you've got a vehicle on the pad, but you can't launch it for 30 days because regulatory red tape, well, you're done. Now, obviously, when national security is involved, General Saltzman has an ability that Bill Weber doesn't to say, we're flying that anyway. But ultimately, clearing that out and proving that we can do things faster, I think is probably the biggest victory for Victus Knox.

So huge. And in terms of the Alpha rocket specifically, I know there was some issues with the payload not reaching the proper orbit on a launch back in December. Some more details coming out about that, I think, in February. Are you feeling good about the performance and the technical capabilities of Alpha? Yeah, extremely so. So I think organizations in the similar life cycle as Firefly, where we are in the maturity curve, we are judged not just on how we do when things go extremely well, 100% mission

success like Victus Knox. We certainly were evaluated and validated there, but we're also judged by what happens when there's an anomaly. So we thought it was the right thing to do, to be very transparent, to bring outside resources in, bring our customers in, to sit alongside us during that review process. And so we took the time to do that. We had an internal review board and an external independent review board, shared those findings with all of our customers that will be flying on Alpha. And what that netted out, I think, is not just a technical validation that we know exactly what happened,

exactly what happened. We've now replicated it and tested it numerous times. We have solved that problem. And our customers know that as well. So I think we took a, you know, not, look, we always want to succeed 100%, but we took that circumstance and I think we've turned it into a positive. It was a moment for us to prove, how do we handle adversity and anomalies? And I think we did well there. Well, now we have to talk about Elytra. Am I saying it right? Elytra? Well, that's the thing. You can say it any way you want. It's Elytra, Elytra, Elytra. Elytra. Elytra. Okay. Let's talk a little bit about that because as you mentioned, you're going

to be deploying your first one to the first mission this year. I mean, this has become a sort of a key area of focus in the next emerging market and so many of the conversations I'm having with so many companies, be them established players or startups, space tugs and on-orbit mobility and activity. What are you bringing to the table? What does this look like? What does this first mission entail? Yeah, so it is a utility vehicle. It's high delta V. It is intended and designed just to be a stable platform that could have

a mechanical arm on it. It could have a welder on it. It certainly could have camera or surveillance type capability on it. It could have edge computing on it. And it will have all those things. It could be configured to be a refuelable gas station in space. The point is, if you build the structure the right way and you partner with those who do those things, when a customer says, here's what I need Eletro to do, it's rapidly configurable

that way. They'll either be bespoke missions that customers say, with these 10 things that I fly up there, put an Eletro to move around and service it. Or we will take any available capacity on Alpha or MLB and fly an Eletro and just leave it on station. So there will be a constellation of these as a service vehicles by the end of the decade that if you need work done, move over into a zone, pull something out of orbit, go check a collision event or a loss of service, a coverage loss, Eletro will be on call to do that. If it needs to be a third stage, grab something and boost it somewhere else.

It'll have DeltaV and capability. The reason why we like that, it flies on our platform, so we've solved that problem of launch cost. It's made by the same engineers in the same manufacturing facility using the same technologies that Alpha, Medium Launch, and Blue Ghost use. So it's vertically integrated. It makes sense for us. And as you said, the same customers that want to get there want to move around there. So they want all of that with one provider.

So it is a business case issue for us. It makes a ton of sense. So I remember sitting down with you, I don't know, a while ago now, and Firefly, you had joined the company. It was a turnaround story. You're obviously on a growth trajectory. 2024 is a major year with a lot of potential milestones. What's next? So execute this year and then bring MLV. So 2025 will be all about bring MLV to the launch pad, get it flying and get it qualified on NSSL Phase 3. And then I think it's wise for a company like Firefly to leave the what's possible. The headlights for that for us is a six to nine month

window there's a lot of different things that we would consider in terms of there's gonna be some great pieces out there for consolidation M&A is is for well capitalized and well funded organizations has to be part of how we think of things there will be you know as I said there will be some with great technology that paired with Firefly make a lot of sense. So we've got more than enough to do in that time frame. What I know for sure is we will not, there's a lot of companies that had great technology, and as I said, they lost runway. They just, they weren't funded. They weren't capitalized.

Firefly won't be one of those. We will be one of the providers for launch land in orbit. And there will be others. We're not going to operate exclusively on any of those domains. But we're excited. I think our future is really solid. All right. Final question for you. So you're acquisitive. We've just established that. And you said you're well capitalized. Plans to go public or do any more raises in the private markets, bring on any other investors, et cetera? Yeah.

Again, I think wisdom says, my experience says, trying to time that really gets the company focused in something that is right now beyond our control. So the macroeconomic markets have a lot to say about whether we would go public or not. There's a lot of reasons why I would say that would be the worst thing for Firefly right now to be subjected to that scrutiny four times per year where there is still volatility in cost and revenue. Having said that, that's going to change over the next 12 to 18 months. And if the macroeconomic conditions change, I mean, I've run a public company before.

I know what that entails. Then Firefly will be ready. If we go do the things that would make us ready to do that, and there's an acquisition out there either for us to go do or someone looks at us strategically, then we'll be ready for that too. I think the way to handle that question is let's go execute, do all the things I just said, you know, on record that we're going to go do. And then we're going to be interesting to a lot of different people out there, public and private. So don't exactly know where that's going to go. Okay. Bill Weber of Firefly Aerospace. Thanks for joining me. Thank you very much, Morgan. That does it for this episode of Manifest Space. Make sure you

never miss a launch by following us wherever you get your podcasts and by watching our coverage on Closing Bell Overtime. I'm Morgan Brennan.