Geolocated radio frequency intelligence data provider Kleos Space (ASX: KSS) has had a strong Q2, delivering quarterly customer receipts of $1.3 million, securing a $10 million debt facility to expand its satellite constellation, and signing key industry partnerships.
In an update to the ASX, Kleos said it had received purchase orders and contracts of $1.95 million during the period and is targeting annualised revenue of US$18 million by Q1 2023 from its global pipeline of more than 260 government and commercial qualified deals, spanning defence departments, national security agencies and coast guards. The company significantly reduced its net operating cash outflows in Q2, and now expects to achieve monthly adjusted EBITDA positive status in the second half of 2022.
Commenting on the company’s quarterly performance, CEO Andy Bowyer said, “In Q2, we have delivered customer receipts of AUD 1.3 million, reducing net operating cashflows and marking a major step towards positive operating cash flow. Our new Mission-as-a-Service offering improves cash flow, although revenue recognition may be more backloaded as the service ramps up. Additionally, Mission-as-a-Service will ensure longer-term asset utilisation and return, focused on building long term customer relationships.”
Kleos currently has 12 satellites in low earth orbit with its fourth cluster, the Observer Mission, scheduled to launch later this calendar year. The company secured a $10 million debt facility with PURE Asset Management in July, which will fund its constellation expansion and allow Kleos to increase its team to support operational growth. Kleos’ satellites detect and geolocate radio frequency transmissions to improve the detection of illegal activity such as piracy, drug and people smuggling and border challenges.
During the quarter, Kleos signed a Cooperative Research and Development Agreement (CRADA) with the US Navy to test the capabilities of its geolocation data under maritime conditions. The agreement is the first phase of the SCOUT experimentation campaign, which includes discovery test exercises that will contribute to the development and integration of technologies by the US Navy that allow for quicker leadership decision-making.
Kleos also signed a non-exclusive channel partner agreement with Kongsberg Satellite Services, which will see the company’s data integrated within a larger dataset.
“Data is the foundation of all decision making, our recent agreement with the US Navy is a great example of a government user engaging early with unique data sets such as ours to rapidly innovate with solutions for military challenges that facilitate quicker decision making.
“Kleos’ radio frequency geospatial data provides this value, enabling users to speed up decision making in time-critical, high-risk areas of conflict. Our exceptional engineers use our proprietary software and algorithms to analyse, process and extract ‘needles in the haystack’ from the radio noise that our sensors collect. This intelligence assists in the detection of environmentally, economically, and societally damaging human activity and empowers the ability to act.
“As our market and business continues to mature, it is this decision-enabling value that we are monetising. Our ‘product’ is not a commodity, it is a value-add technology & service. We continue to increase the value of our data through innovation and industry leadership in world-class signal processing and RF technologies.
To prepare for growth, Kleos strengthened its global leadership team in Q2, appointed highly credentialled US-based space industry executive Dawn Harms to its Board as an Independent Non-Executive Director and international finance executive Alan Khalili to the role of Chief Financial Officer.