Intuitive Machines Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
March 21, 2024

There are 9 speakers on the call.

Operator

Welcome to the Intuitive Machines 4th Quarter 2023 Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. As a reminder, this conference is being recorded. Now, I would like to hand the conference over to your host, Stephen Zhang, Head of Investor Relations.

Operator

Thank you. Please go ahead.

Speaker 1

Good morning. Welcome to the Intuitive Machines' 4th quarter 2023 earnings call. Chief Executive Officer, Steve Altomis and Interim Chief Financial Officer, Steve Bontour are leading the call today. Before we begin, please note that some of the information discussed during today's call will consist of forward looking statements setting forth our current expectations with respect to the future of our business, the economy and other events. The company's actual results could differ materially from those indicated in any forward looking statements due to many factors.

Speaker 1

These factors are described under forward looking statements in the company's earnings press release and the company's most recent 10 Q filed with the SEC. We do not undertake any obligation to update forward looking statements. We also expect to discuss certain financial measures and information that are non GAAP measures as defined in the applicable SEC rules and regulations. Reconciliations to the company's GAAP measures are included in the earnings release filed on Form 8 ks. Finally, we posted an earnings call presentation on our website, which provides additional context on our operational and financial performance.

Speaker 1

You can find this presentation on our Investor Relations page at www.intuitivemachine.com/investors. I'll now turn the call over to Steve Altomis.

Speaker 2

Thanks, Stephen. Welcome everyone and thank you for joining us. Today, we'll delve into Intuitive Machines 4th quarter financials covering our fiscal performance and strategic initiatives. Moreover, we'll share updated information reflecting our recent successes, underscoring our current standing as the only U. S.

Speaker 2

Company to ever land on the surface of the moon. Intuitive Machines' decision to go public last year was driven by a vision to democratize access to the moon and catalyze the emergence of a lunar economy. This historic move paved the way for groundbreaking lunar exploration and a unique opportunity to broaden access to the moon for the general commercial population. I've been looking forward to the day when we could join this call and say we accomplished that mission. Exactly 1 year after going public, Intuitive Machines launched its I Am 1 mission and 1 week later on February 22, we successfully landed marking the United States' 1st lunar landing in over 50 years.

Speaker 2

The successful landing recognized by the White House, by NASA and our commercial customers fundamentally disrupted the economics of landing on the moon, while substantially retiring the cost of developing a lunar program, including our NovaSe class lunar lander. This same core lander class is currently scheduled for at least 2 more missions under NASA's Commercial Lunar Payload Services Initiative or CLIFS program, which secured its budget under NASA's new appropriations bill. Enacted fiscal year 2024 NASA budget continues to support CLIFS along with several other e Artemis initiatives. And up next, we expect the announcement of the agency's first lunar terrain vehicle services contract in early April, responding to the company's first bid as a prime contractor in the agency's Artemis campaign. The final spending bill appropriated $24,900,000,000 which was approximately $2,000,000,000 less than the NASA request.

Speaker 2

The majority of the $2,000,000,000 shortfall was in the Mars Sample Return Program, a program Intuitive Machines has not submitted proposals into. While MAPPA has openly discussed the cost overruns and program delays for its on orbit servicing assembly and manufacturing program or OSAM, there is language in the bill that preserves funding through fiscal year 2024. This preserved funding continues the planned revenue of the company's OMS III contract. Despite these political adjustments, NASA's budget continues to bolster the company's roadmap as we leverage the success of I'm 1 to diversify revenue streams and provide a reliable cadence of lunar missions and services. For example, NASA's Near Space Network Services award is still scheduled for May.

Speaker 2

As a company, we recognize that returning the United States to the moon for the first time since Apollo 17 was truly an integrated global effort. We worked with government agencies, multiple departments within NASA, the FAA, the FCC and a series of domestic and international partners through our Lunar Data Network and supply chain. Additionally, there is geopolitical and policy alignment with the return to the move. As recently described in Defense Intelligence Agency report titled Challenges to Security and Space, China and Russia Value Superiority in Space. The efforts of countries such as China, India, Russia and Japan highlight the values placed on superiority in space by other countries.

Speaker 2

This has ignited a 21st century space race that is well underway. Amid the surge in geopolitical lunar activity that has recently seen nation states succumb to the challenges of spaceflight. We believe the success of IM1 mission puts the commercial industry firmly into the space race. Our cooperation with agencies and other countries positions I'm as a first mover in this race. The I'm 1 mission delivered over 100 kilograms of payloads and shuttled numerous technology demonstrations to the lunar surface.

Speaker 2

It operated more than 144 hours on the lunar surface, transmitting more than 1.7 gigabytes of science and engineering data across all commercial and NASA payloads. The landing and data delivery from the lunar surface resulted in more than $12,000,000 in success milestone payments in 2024 across NASA and commercial customers. The mission landed further south than any vehicle in the world has ever landed on the moon, establishing a foundation marked by numerous pioneering achievements, including validating the company's scalable liquid methane and liquid oxygen propulsion system, a future facing technology we believe is the next step in propulsion innovation required to travel further into our solar system. Our first of its kind vision processing and autonomous landing technology landed within 9.9 degrees from the moon's south pole. Massive craters, steep slopes and difficult lighting conditions marked this ominous region of the moon.

Speaker 2

Proving our autonomous landing technology on our first mission sets the stage for IM2, which is intended to land on the moon's South Pole at the Shackleton Connecting Ridge to search for water ice that may be processed for propulsion and life support in the future. The commercial and NASA payloads on IM2 complements the pursuit of water on the moon and the effort to establish a foothold on the South Pole, where NASA's $93,000,000,000 Artemis campaign is targeting human missions this decade. IM2's propulsion and structural components are being assembled in house and we completed integration of the NASA's ice mining drill in the 4th quarter. In addition, Intuita Machines' Micronova Hopper designed to search for water ice in permanently shaded regions of the moon completed thermal vacuum chamber testing before the end of the year. Since concluding the IM-one mission in February on February 29, our team transitioned into assembling and integrating the IM-two mission lunar lander.

Speaker 2

It uses the same core Nova C Class vehicle as IM1 allowing us to capitalize on schedule and cost efficiencies. The team assessing IM1 data identified just a handful of adjustments will carry over into the IM2 mission to optimize and refine performance. We will complete the assembly and integration process with only these minor adjustments to the flight proven Nova C design. Intuitive Machines has been working with NASA to finalize engineering and landing site selection on IM2, which may marginally impact our targeted 2024 launch time. The IM1 mission success extends beyond our Lunar Access Services business unit.

Speaker 2

At the start of the call, I touched on global integration. Intuitive Machines has achieved remarkable success in globally integrating radio astronomy dishes from over a dozen countries, positioning ourselves as the sole commercial provider to validate a lunar distance data service from the moon's surface. This feat underscores the company's leadership in lunar data services further demonstrated by its successful augmentation and interoperability with NASA's Deep Space Network. We believe this creates a clear advantage in our pursuit of NASA's Near Space Network Services contract award in the Q2. In 1 year's time, the Orbital Services business unit has moved from an incubated idea to a mature revenue and profit center for Intuitive Machines.

Speaker 2

The Orbital Services business unit secured and is executing on the omnibus multidisciplinary Engineering Services Contract OR OMS3. With $12,500,000 in revenue recognized in December 2023, OMS3 has been instrumental in driving the unit's success. Moreover, the connection between OMS3 and NASA's OSAM project is notable as Congress has appropriated funds for OSAM ensuring continued revenue for that project within the OMS contract through the fiscal year. As Congress pushes for OSAM project performance improvements, Intuitive Machines remains committed working with NASA through the completion of the OSAM mission under the OMS contract. As Intuitive Machines eagerly anticipates NASA's announcement for the agency's Lunar Terrain Vehicle Services contract, the company is diligently preparing for potential award.

Speaker 2

NASA's LTVS contract holds a total program value of more than $4,000,000,000 structured across 2 phases of award with multiple potential awardees. The first phase expected shortly after Q1 of 2024 entails a feasibility assessment. The award amounting to approximately $30,000,000 over 1 year. If awarded, this phase aims to mitigate risks associated with developing the company's Nova D cargo class lunar lander and advancing the lunar terrain vehicle design. The Intuit machines led Moonracer team is comprised of aerospace and automotive leaders such as ABL, Boeing, Michelin and Northrop Grumman and is poised to leverage this opportunity to propel the next generation of lunar surface mobility.

Speaker 2

Following the successful completion of the Phase 1 feasibility assessment, Intuitive Machines anticipates bidding on the second LTVS award. This award is earmarked for developing and delivering the lunar terrain vehicle to the moon. As the company continues demonstrating its capability and reliability in lunar operations, the LTVS award is anticipated to focus on continuously delivering infrastructure supporting both NASA's Artemis campaign and commercial interest. We believe this groundbreaking endeavor positions Intuitive Machines as a key player in advancing lunar infrastructure. Furthermore, Intuitive Machines' IM-one mission served as a platform for validating ground based breaking space products and infrastructure with notable achievements including validating the company's proprietary and scalable VR900 liquid methane liquid oxygen engine.

Speaker 2

This engine was validated through the first ever deep space ignition followed by multiple restarts, demonstrating reliability and providing successful spacecraft maneuvers to the lunar surface. Positioned as a future facing technology, we believe liquid methane and liquid oxygen propulsion are the next evolutionary steps in propulsion technology, which are essential for enabling travel further into the solar system using the resources we know are already available on other celestial bodies. Other mission elements such as software integration for vision processing and creator recognition for autonomous landing technology were also successfully validated. With these achievements, Intune Machines is fielding inquiries and exploring potential opportunities to enter the market with these validated space products. Building on this momentum, the company has submitted its past performance data to NASA for consideration in their next CLPS mission award.

Speaker 2

We've also attracted a surge of interest from commercial and international partners, including space agencies. We are forging a new relationship with a world leading cancer research team interested in leveraging the 0 gravity environment for science and medicine. Our Lunar Data Services team is exploring interest in data relay satellite tasking using our flight proven network and Mission Operations Center. We're reengaging commercial brand partnerships to push traditional earthbound retail technology innovation, while extending new Columbia sportswear innovations to our second mission. Finally, at the start of the call, I mentioned the global landscape of space exploration witnessing a remarkable increase in geopolitical activity with nations worldwide intensifying their efforts to return to the moon and explore beyond.

Speaker 2

Last week, South Korea unveiled ambitious plans to establish a new space industry cluster backed by over $1,000,000,000 in funding through 2027. The cluster will foster spacecraft development and astronaut training. We view investments in exploration like this with admiration and appreciation, recognizing its positive impact on the global pursuit of scientific advancement. And recall at the end of the Q4 of 2023, Intuitive Machines formed a strategic partnership with Boryeong Corporation, South Korea's premier healthcare investment company, focusing on bolstering critical infrastructure and fostering new research and development ventures in space. This strategic collaboration exemplifies Intuitive Machines' commitment to aligning itself with the evolving global landscape of space exploration.

Speaker 2

As Intuitive Machines continues to forge partnerships to diversify revenue, the company remains dedicated to staying at the forefront of the shifting dynamics in space exploration. Aligning with this global momentum, we believe Intuitive Machines is strategically positioned to capitalize on the growing interest in space and the moon, and we're making tangible progress in that pursuit. With that, I'll turn the call over to Intuita Machines' Interim Chief Financial Officer, Steve Montour.

Speaker 3

Thank you, Steve, and thanks to everyone joining us today. I'll begin by going through our Q4 2023 results and a few key highlights. We ended the 4th quarter with a contract backlog of $268,600,000 an increase of $133,400,000 and nearly doubled versus the prior quarter. This backlog includes the first half quarters from the OMS-three contract along with $17,600,000 for an International Space Agency payload to be delivered on a future mission and $9,500,000 for the Department of Defense, Air Force Research Laboratory Jetson award. As Steve mentioned earlier, we expect more opportunities to expand backlog this year as we respond to a steady flow of RFP and RFI requests since our successful lunar landing, as well as the award decisions coming on key programs such as LTVS, TP22 and NSMS.

Speaker 3

Revenue in the quarter was driven primarily by NASA's CLPS contracts and related mission payloads, along with 1 month of OMS III revenue totaling approximately $12,500,000 The company concluded the 4th quarter with $30,600,000 in revenue compared to 38 $1,000,000 in the Q4 of 2022. Gross margin improved versus prior quarters and was a positive $1,500,000 in the current quarter, driven primarily by the OMS revenue in December. Operating loss was a negative $5,900,000 versus 13,000,000 dollars in profit for the same quarter of the prior year. Note that the prior year included a one time NASA change order to move our IM1 landing location, with incremental revenue and high drop through down to income. In addition, Q4 2023 saw higher cost of revenue as well as public company costs since the leaseback in February of 2023.

Speaker 3

On the cash side, we ended 2023 with a cash balance of $4,500,000 which is after a debt pay down of $12,000,000 in the quarter. We have only $8,000,000 of debt remaining on our balance sheet. Note that as of March 1, 2024, our cash balance increased to $60,600,000 of warrant exercises from an institutional investor along with a $10,000,000 equity strategic investment. In addition, we have invoiced NASA along with other commercial payload customers the mission completion payments for I'm 1, totaling approximately $12,500,000 as a result of our successful landing. This will further strengthen our cash position for the year.

Speaker 3

It's worth noting that our March 1 cash position is the largest balance since any quarter end position last year and we believe provides us with sufficient capital for the near term given our continued capital and cost discipline. Going forward, we will continue to be opportunistic in the capital markets for defensive capital to further strengthen the balance sheet. We became shelf eligible on March 1, and as a good housekeeping measure, we plan to file an S-three self registration statement following our 10 ks. Operating cash used during the quarter was 22,300,000 dollars with CapEx of $2,200,000 resulting in free cash flow in the quarter of an outflow of $24,600,000 As previously discussed, with the completion of our new lunar production and operations center, CapEx was normalized in the 4th quarter compared to recent quarters. Going forward, CapEx is expected to be significantly lower relative to the prior year, excluding the impact of any new awards and associated CapEx requirements.

Speaker 3

Looking ahead, we expect 2024 to be a transformational year for us, both operationally and financially, building off our recent mission execution success. On the revenue side, we expect sales to expand significantly this year based on the current backlog. Our revenue outlook in 2024 could be further favorably impacted if we are successful in winning our existing pursuits such as LTDS, CP22 and NSNS. We expect gross margin will continue to improve as we execute on homes as well as drive cost efficiencies for IM2 and IM3 given the prior development and learnings from our successful IM1 mission. Q1 in particular is expected to be favorable given the full quarter of OMS execution along with the final NASA and commercial payload payments for IM-one.

Speaker 3

As I mentioned earlier on backlog, we expect continued backlog growth this year driven by key program awards. LTVS is expected to be awarded in the coming weeks with NSNS and the next clips award CP22 expected sometime in Q2, 2024. Additionally, we have seen a significant uptick in request for proposals and information our successful lunar landing and we hope to capitalize on our momentum. On the cash side, with $54,600,000 as of March 1 and the final I'm 1 success payments to be collected, we will remain well capitalized to execute on existing contracts and to fund future growth. Overall, we come into 2024 from a position of financial strength.

Speaker 3

We've expanded our cash position with lower debt, we've grown backlog, our margins are improving and our future opportunities are brighter than ever. We look forward to another successful year of execution. With that, operator, we are now ready for questions.

Operator

Thank you. Today's first question is coming from Austin Moller of Canaccord Genuity. Please go ahead.

Speaker 4

Hi, good morning, Steve and Steve. With IM2, the revisions that you have to make, I guess, they're relatively minor. Does that still put you in a position to launch that mission in 2024?

Speaker 2

Austin, good morning. Steve Altimus here. We have been through a review of reconstructing the mission and identified the areas that needed adjustments in terms of antennas and cameras and software changes. Certainly, laser rangefinder enable switch harnessing improvements, those have all been made. So we really don't see any impacts to the schedule based on the changes from IM-one.

Speaker 2

They're fairly straightforward. We are working with NASA closely as NASA is repositioning our landing site. They want to get to an area where they have some confidence that there might be water ice on the South Pole. And so we are adjusting the landing site to the Shackleton connecting Ridge. And what that does is that might have a marginal impact generally, but we are still planning for a 2024 mission for IM2.

Speaker 4

That's great. And just a follow-up on NSNS. Do you expect to be able to collect more revenues from program once the first Khan satellite is positioned in lunar orbit?

Speaker 2

Well, actually there is what they call when we anticipate an award notification in the May timeframe, as I indicated in my opening remarks. And that contract is structured in a way where NASA funds what they call a verification task order. And that verification task order is to put in place that basic initial operating capability that gives you the data relay from around the moon back to earth. And so it's not necessarily singular to a satellite that we put around, but it's getting through that verification phase of the data relay satellites over a period of, I think it's 24 months 24 to 36 months to get that verification done. So after that's accomplished, the service revenue would kick in.

Speaker 4

Great. Thanks for the details there.

Operator

Thank you. The next question is coming from Josh Sullivan of The Benchmark Company. Please go ahead.

Speaker 2

Hey, good morning. Good morning, Josh. Hey, Josh.

Speaker 5

Just as far as the near space network service contract, what weight is put on past performance and now that Intuitive has validated lunar data service from the moon is, can you just provide us any detail in kind of the contract structure waiting?

Speaker 2

Well, let's see. I might not be able to correlate it directly to a waiting number. However, we know that contract procurement process is moving forward as several of the vendors including Intuit Machines of course have made the competitive range and NASA has opened up oral discussions and talked to us about clarifications and asked for a final proposal for that. So we know the procurements moving forward. We know also that relevant experience and past performance is was they requested updates to that and specifically updates based on our mission success from Mission 1.

Speaker 2

So that gives us some confidence that we're moving forward in the process and closer to an award hopefully in the May timeframe, Josh.

Speaker 5

Got it. And then just on the changes, potential changes in the landing site for IM2, are you expecting any change payments as you received for IM1 when that happened?

Speaker 2

Yes, in fact, we are. NASA sent us yesterday request for tax order modification to impact from a cost and schedule standpoint and technically what it would take to move to this particular landing site on the Shackleton Ridge. It's just very close to an original landing site, but there's been back and forth and analysis that's been done. And all that will be costed and submitted back to the government here in the 1st week of April. And then we'll expect that modification and certainly we'll cover our costs that we would anticipate based on that movement in the schedule.

Speaker 5

Got it. And then just one last one, as far as the lunar terrain vehicle contract, are you still bidding as a prime there?

Speaker 2

Yes, Josh. Really proud as Intuitive Machines enters human spaceflight as a prime contractor on the Artemis program's LTV. That's a developed lunar terrain vehicle or moon buggy with Intuit Machines as a prime. The Moonracer team includes ABL, an automotive company, includes Boeing, Northrop Grumman and Michelin to name a few. And so that's a we have a really powerful team.

Speaker 2

We're very confident in our capability and our design and we're looking forward to hearing about that next week or in the coming weeks. So it represents a significant entrance for us as a essentially system integrator for Artemis program element. What's interesting about that, I don't know if folks know is that that's really a blend of a NASA element that is owned and operated by the commercial entity, which is doing the machines in this case. So that while NASA is operating the rover with their astronauts, when they're not there, Intuitive Machines can operate that rover autonomously and provide services for commercial customers and international governments for mobility on the surface and to collect science and engineering data. So it really becomes an asset of intuitive machines on the moon that's operating for up to 10 years.

Operator

The next question is coming from Andre Sheppard of Cantor Fitzgerald. Please go ahead.

Speaker 6

Good morning, Steve, Steve and Steve. Thanks for taking

Speaker 2

our questions.

Speaker 6

Congratulations on the quarter. And let me just once more share my congratulations on our first successful mission.

Speaker 1

I wanted to maybe just touch on

Speaker 6

the backlog. So the 2 $68,000,000 can you just remind us over what time period you might expect to recognize that into revenue? And then additionally, with now $12,500,000 in revenue collected from the OMS contract, should we expect that kind of similar run rate on a monthly basis over the next 5 years? Is that the best way to think about it? Thank you.

Speaker 3

Yes. This is Steve on for Andres, and thanks for the comments. The majority of the increase in backlog that we see at year end came from the owned task orders. And so and that's a 1 year set of task orders that we were awarded. So we will expect to burn that off in 2024.

Speaker 3

As far as the run rate, we expect the 12.5 $1,000,000 in December is right on par with what we expect monthly throughout the rest of the past quarter term.

Speaker 6

Got it. Okay, that's super helpful. Appreciate that. I guess just on liquidity, you mentioned your cash balance as of end of March. I'm curious, what kind of margins are you expecting throughout the year?

Speaker 6

And how are you thinking about that capital needs? Obviously, you're going to have the owned contract kicking in every month, every quarter. Do you foresee a need to have to raise additional capital? Or do you feel like you're in a good place now where given where you are? Thank you.

Speaker 3

So overall on margins, we expect margins to improve. Homes is a big factor there since it is a positive margin contract in our outlook. The rest of the cash balance that we currently have, we believe will be sufficient to get us through the remainder of the year without any further awards that we're currently pursuing. So I think that's the best way to look at our current cash balance as of March 1 and how it burns through the rest of the year. So then anything we get awarded would hopefully be positive to that cash flow forecast.

Speaker 3

And does that answer your question?

Speaker 2

I would add one other piece, Andre, is that we will continue to remain opportunistic about capital raise in the future to keep looking at ways to accelerate the growth of the company. Like Steve said, we are confident that the cash balance carries us through the year. That's with no additional wins. But we are in a fantastic position for awards on LTV in CP22, that next clips award, we can't forget about that one that's moving forward and the NSNS contract. And so with the existing contract backlog we have this year, which will burn off nearly 80% of that this year And those additional contract awards that puts us in a great position moving forward even beyond 2024.

Speaker 2

And then should we have delays like we experienced last year, we're still sufficient capital on the balance sheet to get us through 2024.

Speaker 6

Got it. That's wonderful. Super helpful. Appreciate it. Maybe if I could just squeeze one last one regarding the LTV contract.

Speaker 6

I just want to make sure I'm understanding this correctly. So I think you said you expect this contract to be decided over the next few weeks, if I heard correctly? And then the Phase 1, you expect that to be awarded to multiple teams, if I understand correctly. So I guess what would be the contract work that you are targeting for that Phase 1 or what's the best way to think about that? Thank you.

Speaker 2

Yes. The Phase 1 work, we believe there'll be essentially 2 phased awards and each one is a gate to move to the next phase. We think this is a multiple award where 2 or more teams might win an award in Phase 1. And what that will be, will be the preliminary design and assessment of the delivery system, in this case is our Nova D cargo lunar lander, that takes about a 1.5 metric tons to the lunar surface. And it is also the preliminary design and assessment of the LTV itself.

Speaker 2

That's a 12 month period, priced at roughly $30,000,000 We expect 2 or 3 awards, like I said. The follow on then will be a result of that to take the design to a full maturation. And then we think the full value of that contract is on the order of $4,500,000,000 over a 10 year period and that'll be divided under multiple awardees we believe.

Speaker 6

Got it. Super helpful. Thanks again. Congratulations on the quarter and I'll pass it on. Thank you.

Speaker 2

Thanks, Thanjali.

Operator

Thank you. The next question is coming from Suji Desilva of ROTH MKM. Please go ahead.

Speaker 7

Good morning to the team and obviously these calls are easier now that you've made it to the moon. I'm sure you agree. So congratulations guys. The LTV award, sorry, I have a bad word. The LTV award for Phase 2, isn't there significant synergy if you're providing the Nova D and the Lander that would derisk that, that would make that a fairly significant consideration in that award?

Speaker 2

Absolutely, Suji. That was our intent and our strategy going into the bid was to put a team together that can provide the complete service with demonstrated ability to deliver such a high value piece of cargo for the Artemis program to the surface of the moon. And with our first mission success, it really just puts us standing tall in terms of our competitiveness to that procurement.

Speaker 7

Okay, great. My other question is on the staffing you're at now and the Houston the operations center you opened up. In supporting these incremental pipeline awards, are you at a staff where you

Speaker 6

could support those? Would that need

Speaker 7

to be incrementally added? Just any thoughts there would be helpful.

Speaker 2

Yes. Currently, we're staffed both here in Houston at our Luna Production Operations Center and up in Maryland based on that OMS contract for satellite servicing and the NOAA work we're doing on OMS 3. We have adequate staff. As we look at these awards, it's a 1st world problem to add incremental staff to organize and manage the work as it comes in. We anticipate that we'll remain fairly flat in terms of staff needs and burn rate this year, even with these significant awards because number 1, we've rolled off Mission 1, so that if we do receive a CP22 award, that workforce will roll into CP22, which is the next CLPS award.

Speaker 2

And then the LTV and NSNS contracts, as I've talked about, have other team members that will also provide workforce. And so we're not necessarily looking for a large ramp up this year in workforce associated with these contracts that we're talking about, just the minor adjustments as we go forward.

Speaker 8

Okay. Thanks guys. Congratulations to you.

Speaker 2

Thanks Suji.

Operator

Thank you. The next question is coming from Mike Crawford of B. Riley Securities. Please go ahead.

Speaker 8

Thank you. I guess this is for Steve Buntour. Did you say that of the $269,000,000 of backlog that you expect to recognize 80% or $215,000,000 of that as revenue in 2024?

Speaker 3

Approximately. That would be primarily the owned contract. As I said earlier, we're burning at about $12,500,000 in revenue on that. And then the rest would be CLPS contracts, IM2 and 3.

Speaker 8

Okay, great. And then of the $12,500,000,000 of success payments you expect to receive from I'm 1. Is that out of possible how much of success payments were you eligible potentially receive?

Speaker 2

Well, we can all answer that one, Mike. That's the way we broke it down with the milestones, the only payload that we did not receive data back from was the SCALPS payload, which studied the engine plume interaction with the dust on the surface of the moon. And so we held back 5% based on that payload not activating, not collecting that data. However, we were able to get data for to replace that through our own cameras that give us good understanding of the regular behavior and we're going to offer that back to NASA. So we expect the combination of about 90.5% of the NASA payment to be received and then an augmentation for equitable adjustments for the additional data that we can deliver to NASA that puts us well over 100% of the planned payment.

Speaker 8

Excellent. And then just finally one kind of broader question. While we're waiting for department final NDAA, besides just continuing resolution, we do have a NASA budget, although it's flattish. Is there anything that you like or don't like about the NASA budget

Speaker 2

that's received? Well, like I said in my comments, the budget is probably 2,000,000,000 dollars less than requested by NASA. And when we first looked at it, it looks like the road map that we've put together as a company for commercializing cislunar space and providing infrastructure to the moon is fully supported, and we like that. That puts us that means we're on the right track and it shows that the government is still committed to returning humans to the moon in a sustainable way. And so that's a really fantastic outcome to have such strong bipartisan support for the Artemis campaign.

Speaker 2

We did see, I did mention the OSAM project, which is on orbit satellite servicing and manufacturing, that's under the OMS contract. When we took over that contract, that project had some cost challenges and schedule challenges. And so we're working very closely with NASA to kind of put that project back in the box and get it launched and under the cost bogey that NASA was looking to meet. We received notice from the spending bill or the appropriations that that funding is in place for the task order in 2024. But the future is not set there.

Speaker 2

Should we NASA and us as the prime contractor not be able to put that back in the box, there's a chance that the will to fly that one won't be there. And so there's a little uncertainty there in the OMS contract after 2024. That's the only piece that you asked that would give us some pause and that's the one that I mentioned in my opening remarks. But we're confident, we have a plan for that one and we're at full funding. These past quarters run year by year.

Speaker 2

So there is a considerable amount of alternative work that fits that OMS contract. It's omnibus multidisciplinary engineering contract. So a number of projects and programs within Goddard fall under that contract. And so if we see the OSAM project under a threat, we'll have additional work, I'm sure provided by the center and NASA to protect those jobs up in Maryland. So other than that, I think I'm very pleased with where the NASA budget is.

Speaker 8

Excellent. Thank you very much.

Operator

Thank you. There are no further questions. I'd like to turn the floor back over to Intuitive Machine's CEO, Steve Altomis, for closing comments.

Speaker 2

Well, thank you, everyone, for joining today's call. I appreciate thanks for our successful landing on February 22. It was truly a monumental event. Intuitive Machines made history with that soft landing on the moon. And we look forward to representing the United States and our stakeholders as we make more historic achievements in the months and years to come.

Speaker 2

So thank you very much.

Speaker 3

Thank you, guys.

Operator

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

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