Voyager Technologies Inc.
11/04/2025 | Press release | Distributed by Public on 11/04/2025 12:55
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion of our financial condition and results of operations should be read together with the unaudited interim condensed consolidated financial statements and related notes that are included within Item 1 of this Quarterly Report, as well as the audited financial statements and the related notes thereto and the discussion under "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Prospectus. This discussion contains forward-looking statements based upon our current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" and "Forward-Looking Statements" elsewhere in this Quarterly Report.
Overview
We are an innovation-driven defense technology and space solutions company committed to advancing and delivering an array of transformative, mission-critical solutions that include defense systems, communications and surveillance systems, advanced space technology, infrastructure and mission services. We address complex challenges to fortify national security, protect critical assets and unlock new frontiers for human progress. Our founding was rooted in our goal of building a company that would address challenges at the forefront of the defense, national security and space industries. Since 2019, we have accomplished significant achievements, including the successful deployment of first-of-its-kind missile defense maneuvering capabilities, the development of groundbreaking space technology and the selection by NASA to develop a replacement for the ISS.
We have grown both organically and through acquisitions, including Nanoracks, Valley Tech Systems, Space Micro, and Zin Technologies. We serve as a "prime" contractor and "subcontractor" to various government and private enterprise customers through our defense, national security, and space product offerings. Since 2019, we have executed and successfully vertically and horizontally integrated nine acquisitions, and have grown our revenue to $39.6 million and $119.8 million for the three and nine months ended September 30, 2025, respectively. In addition, we received cash proceeds of $4.0 million and $46.5 million during the three and nine months ended September 30, 2025, respectively, (with $43.8 million of eligible proceeds remaining as of September 30, 2025) from our $217.5 million development grant with NASA to design Starlab, the commercial space station replacement for the ISS which is set to be decommissioned in 2030. We intend to operate Starlab through the Starlab JV, a Voyager-led and majority-owned global joint venture, with international equity partners that include Airbus, Mitsubishi, MDA Space, and Palantir. Our growth and increased size and scale are the result of investment and focus on our key technology offerings, as well as our ability to attract, cultivate and integrate accretive acquisitions.
Unless otherwise indicated, our significant accounting policies and estimates, material cash requirements, commitments, contingencies and business risks and uncertainties as described in our Management's Discussion and Analysis ("MD&A") are substantially unchanged from what is disclosed in our Prospectus.
Key Factors Affecting Our Performance
Our results have been affected, and are expected to be affected in the future, by a variety of factors. A discussion of key factors that have had, or may have, an effect on our results is set forth below.
Government Expenditures and Private Enterprise Investment
Government expenditure and private enterprise investment have fueled the growth in our target markets and we expect the continued availability of government expenditures and private investment for our customers to help fund purchases of our products and services. However, changes in the volume and relative mix of government expenditures and private investment, as well as in areas of spending growth, may impact our results of operations. In particular, our results can be affected by shifts in strategies and priorities on defense-related programs, commercial space exploration, and space infrastructure. Cost-cutting and efficiency initiatives, current and future budget restrictions, spending cuts, and other efforts to reduce government expenditures and private enterprise investment, as well as shifts in overall priorities, could cause our government and private enterprise customers to reduce or delay funding or invest appropriated funds on a less consistent basis or not at all, and demand for our solutions or services could diminish. Furthermore, any disruption in the functioning of government agencies, including as a result of government closures and shutdowns, could have a negative impact on our operations and cause us to lose revenue or incur additional costs due to, among other things, our inability to maintain access and schedules for government testing or deploy our staff to customer locations or facilities as a result of such disruptions.
There is also uncertainty around the timing, extent, nature, and effect of Congressional and other U.S. government actions to address budgetary constraints and caps on the discretionary budget for defense and non-defense departments and agencies. In addition, there is uncertainty around the ability of Congress to determine how to allocate the available budget authority and pass appropriations bills to fund both U.S. government departments and agencies that are, and those that are not, subject to the caps. Additionally, budget deficits and the growing U.S. national debt may increase pressure on the U.S. government to continue to reduce federal spending across all federal agencies, with uncertainty about the size and timing of those reductions. Furthermore, delays in the completion of future U.S. government budgets could delay procurement of the federal government services that we provide. A reduction in the amount of, or reductions, delays, or cancellations of funding for, services that we are contracted to provide to the U.S. government due to any of these impacts or related initiatives, legislation or otherwise could have a material adverse effect on our business and results of operations.
Backlog
Our total backlog is comprised of funded and unfunded backlog. Our funded backlog represents the portion of definitized contracts with customers that contain remaining performance obligations. Unfunded backlog includes unexercised contract options and potential bookings under indefinite delivery/indefinite quantity ("IDIQ") contracts. In order to effectively manage our resources and develop our financial budgets, we continuously monitor our backlog.
Our backlog may also include, as of any date of estimation, change orders that have been confirmed for any project, either in writing or verbally, or formally contracted. Change orders may increase or decrease the amount we ultimately bill for a particular project, causing us to realize more or less revenue from a project than was reflected in our backlog as of the date of estimation. Additionally, prior to categorizing a project as part of our backlog, we maintain a running list of projects that are in an advanced stage of active bidding and discussion, including potential change orders for current projects, but for which the customer has not yet confirmed the commercial terms, the value of the contract, and/or the scope of our work. These projects are tracked for project planning and budgeting of the business. Once the terms of these projects are further progressed in line with our backlog criteria, they are recorded in our funded backlog.
Backlog in all of our segments includes both single and multi-year awards. Fluctuations in backlog are driven primarily by the timing of large program wins. Total backlog as of September 30, 2025 was $188.6 million, of which $88.2 million was funded. We expect to convert approximately 42.9% of the total $88.2 million of funded backlog as of September 30, 2025 into revenue in the remaining periods of 2025.
In addition, our backlog is subject to meaningful customer concentration risk. As of September 30, 2025, approximately 62.6% of the total dollar value of our funded backlog related to three customers. The top ten customers in our backlog represent approximately 90.4% of the total dollar value of our funded backlog. For purposes of evaluating our backlog, we consider all U.S. government entities to be one customer. Additionally, backlog that is originally funded through U.S. government efforts is considered to be U.S. government backlog even if the program is directly contracted through an intermediary.
In general, our customers have the right to cancel their contracts under termination for convenience clauses. If a customer cancels a contract before full performance of such contract, we may not receive the full revenue from such booking. Instead, we would recognize revenue under the contract on a cost basis with reasonable margin to the extent of the progress performed under such contract. In addition, our backlog is typically subject to large variations from quarter to quarter and comparisons of backlog from period to period are not necessarily indicative of future revenues. Some contracts comprising the backlog are for programs scheduled many years in the future and the economic viability of contractual counterparties is not guaranteed over time. As a result, the contracts comprising our backlog may not result in actual revenue in any particular period, or at all, and the actual revenue from such contracts may differ from our backlog estimates. The timing of recognition of revenues, if any, on projects included in the backlog could change. We review these projects regularly and increase or decrease backlog accordingly. The failure to realize some portion of our backlog could adversely affect our financial performance.
Project Revenue Mix and Impact on Margins
We may experience future variability in the profitability of our contracts and such variability may occur at levels and frequencies different from historical experience. Such variability in profitability may be due to strategic decisions, cost overruns, or other circumstances within or outside of our control. Accordingly, our historical experience with profitability of our contracts is not indicative or predictive of future experience.
Our financial success is based on our ability to deliver high quality products on a timely basis and at a cost-effective price for our customers. When agreeing to contractual terms, our management team makes assumptions and projections about future conditions and events. The accounting for our contracts and programs involves assumptions and estimates about these conditions and events. These projections and estimates assess:
•the productivity and availability of labor;
•the allocation of indirect costs to labor and material costs incurred;
•the complexity of the work to be performed;
•the cost and availability of materials and components; and
•schedule requirements.
If there is a significant change in one or more of these circumstances, estimates or assumptions, or if the risks under our contracts are not managed adequately, the profitability of contracts could be adversely affected. This could materially affect earnings and margins.
In particular, profitability can fluctuate depending on the type of contract award. Contracts with certain customers reflect firm fixed pricing structures. As a result, our gross profit is dependent on the efficient and effective execution of our contracts. Our ability to maximize gross profit may be impacted by, but not limited to, unanticipated cost overruns, disruptions in our supply chains, learning curve, and non-recurring engineering costs related to our contracts with customers. If our fixed price development efforts create a larger portion of our revenue output, we may have a higher risk profile, which may result in reduced margins.
From time to time, we may strategically enter into contracts with low or negative margins relative to other contracts or that are at risk of cost overruns. This may occur due to strategic decisions built around positioning ourselves for future contracts or to enhance our product and service offerings. However, in some instances, loss contracts may occur from unforeseen cost overruns that are not recoverable from the customer. We establish loss reserves on contracts in which the cost estimate-at-completion ("EAC") exceeds the estimated revenue. The loss reserves are recorded in the period in which a loss is determined. Our reference to adjustments to EAC in the context of describing our results of operations includes net changes during the period in our aggregate program contract values, EAC and other program estimates, and includes the impact of cost overruns and recognition of loss reserves.
Additionally, the timing of our cash flows is impacted by the timing of achievement of billable milestones on contracts. Historically, this has resulted and could continue to result in fluctuations in working capital levels and quarterly free cash flow. As a result of such quarterly fluctuations in free cash flow, we believe that quarter-to-quarter comparisons of our results of operations may not necessarily be meaningful and should not be relied upon as indicators of future performance.
Ability to Improve Profit Margins and Scale our Business
We intend to continue to invest in initiatives to improve our operating leverage and significantly ramp up production. We believe continued reductions in costs and increases in production volumes will cause the cost of production to decline and improve our profit margins. Our ability to achieve our production-efficiency objectives could be negatively impacted by a variety of factors including, but not limited to, lower-than-expected facility utilization rates, manufacturing and production cost overruns, increased purchased material costs, and unexpected supply-chain quality issues or interruptions.
Basis of Presentation
The accompanying condensed consolidated financial statements include the accounts of Voyager Technologies, Inc. and our consolidated subsidiaries and have been prepared in conformity with GAAP. All intercompany amounts have been eliminated in consolidation.
Components of Results of Operations
Net Sales
Net sales in the consolidated statements of operations consists entirely of revenue from contracts with customers, net of sales discounts. Our sales are derived from a combination of cost-plus contracts, firm fixed price contracts, and time and materials contracts for both U.S. government and commercial and international deliverables. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We recognize revenue upon satisfying the performance obligations identified in the contract, which is achieved as services are rendered, upon completion of a service, or through the transfer of control of the promised good or service to the customer either at a point-in-time or over time. Our contracts can range from short-term periods of less than 12 months to multi-year obligations.
We generate net sales in our Defense and National Security segment, which represented approximately 70.9% and 71.3% of our total net sales for the three and nine months ended September 30, 2025, respectively, and 52.4% and 49.4% for the three and nine months ended September 30, 2024, respectively, by providing leading technology capabilities that support marquee programs with expertise in defense systems, signals intelligence, communication technologies, guidance, navigation systems and control systems.
We generate net sales in our Space Solutions segment, which represented approximately 29.1% and 28.7% of our total net sales for the three and nine months ended September 30, 2025, respectively, and 47.6% and 50.6% for the three and nine months ended September 30, 2024, respectively, by providing technology solutions, operating at the forefront of space technology and specializing in mission enabling, reliable hardware, software and engineering services for space missions. Our portfolio offering includes advanced space technology systems, space infrastructure and space science.
The following tables set forth our net sales by contract type for the periods indicated:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| Net sales by contract type (dollars in thousands) | September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||||||||||||||||
| Cost-plus fee and time and materials | $ | 21,496 | $ | 22,713 | $ | 69,641 | $ | 62,467 | |||||||||||||||
| Firm fixed price | 18,091 | 16,886 | 50,127 | 44,001 | |||||||||||||||||||
| Total net sales | $ | 39,587 | $ | 39,599 | $ | 119,768 | $ | 106,468 | |||||||||||||||
The following tables set forth our net sales by customer for the periods indicated:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| Net sales by customer (dollars in thousands) | September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||||||||||||||||
| U.S. Government | $ | 36,024 | $ | 31,619 | $ | 106,979 | $ | 89,876 | |||||||||||||||
| Commercial and international | 3,563 | 7,980 | 12,789 | 16,592 | |||||||||||||||||||
| Total net sales | $ | 39,587 | $ | 39,599 | $ | 119,768 | $ | 106,468 | |||||||||||||||
Starlab Space Stations does not and is not expected to generate revenue from customers in the near term. However, Starlab has received significant funding from NASA under our SAA. The Starlab program is partially funded through government grants. These grants are not considered revenue. We expect to continue to receive funding from NASA in the near term and before we begin to generate revenue (See "-Research and Development Costs-Government Grants" for additional details).
Cost of Sales
Cost of sales represent the costs required to fulfill performance obligations on a direct or indirect basis. Our cost of sales are primarily driven by labor, materials, subcontractors necessary to fulfill our contractual obligations along with program application indirect costs.
Selling, General and Administrative
Selling, general and administrative expenses consist primarily of personnel-related expenses for our sales, marketing, supply chain, finance, legal, human resources and administrative personnel, as well as the costs of customer service, information technology, risk management and related insurance, travel, allocated overhead and other marketing, communications and administrative expenses. We also expect to further invest in our corporate infrastructure and incur additional expenses associated with operating as a public company, including increased legal and accounting costs, investor relations and compliance costs. As a result, we expect that selling, general and administrative expenses will increase in absolute dollars in future periods but decline as a percentage of total revenue over time. In addition, as a public company, we anticipate that we may incur significant additional annual expenses including, among other things, additional directors' and officers' liability insurance, costs to administer a public company stock compensation plan, director fees, costs to comply with reporting requirements of the SEC, transfer agent fees, costs for additional accounting, legal and administrative personnel, increased auditing, tax and legal fees, stock exchange listing fees, additional stock-based compensation expense and similar expenses.
Research and Development Costs
Research and development costs are expensed as incurred. Research and development costs include employee compensation, contractor fees, materials and supplies, software and facility costs. For the three and nine months ended September 30, 2025, gross research and development costs were $3.5 million and $12.3 million, respectively. For the three and nine months ended September 30, 2024, gross research and development costs were $1.3 million and $9.9 million, respectively.
Government Grants
We recognize government assistance when there is reasonable assurance that we will comply with the conditions of the assistance and that the assistance will be received.
NASA established the LEO Development program, or the SAA to help facilitate two objectives:
•Develop a robust commercial space economy in LEO, including supporting the development of commercially owned and operated LEO destinations from which various customers, including private entities, public institutions, NASA and foreign governments, can purchase services; and
•Stimulate the growth of commercial activities in LEO.
On December 1, 2021, Nanoracks LLC, a subsidiary of Voyager, entered into an agreement under the SAA with NASA (the "Nanoracks Agreement"), pertaining to the LEO Development program, to design, build and maintain a commercial space station, known as "Starlab". The Nanoracks Agreement and its subsequent amendments signed through 2023 provides $217.5 million in funding for the design and manufacture of Starlab, which is earned upon completion of defined milestones. Once a milestone is earned, we are under no further obligation to continue work on Starlab. Milestone payments are expected to be earned through December 2025. As of September 30, 2025, we have cumulatively earned $173.7 million in milestones under the program, with $127.2 million in milestones earned as of December 31, 2024. All milestones earned as of September 30, 2025 and December 31, 2024 were received in cash.
When the government grant assistance is related to an asset, the assistance will be deducted from the carrying value of the asset. When the government grant assistance is related to costs incurred, the assistance is deducted from the related expense. The following table sets forth the government grant assistance offset against research and development and construction in progress, respectively, for the three and nine months ended September 30, 2025 and 2024:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||||||||||||||||
| Government grant assistance offset against research and development | $ | 428 | $ | 1,720 | $ | 4,678 | $ | 2,620 | |||||||||||||||
| Government grant assistance offset against construction in progress | $ | 3,600 | $ | 15,480 | $ | 41,850 | $ | 29,730 | |||||||||||||||
For the nine months ended September 30, 2024, the assistance offset against construction in progress assets included grant funding for capital expenditures not yet incurred of $6.0 million in accrued expenses and other current liabilities on the consolidated balance sheets.
Amortization of Acquired Intangible Assets
Amortization of acquired intangibles includes amortization of intangibles acquired in acquisitions.
Finance and Interest Expense
Finance and interest expense consists primarily of finance gains and charges on debt extinguishments and issuances, along with interest expense incurred on debt.
Other Income, Net
Other income, net consists primarily of interest income on our cash and cash equivalents along with gain (loss) on foreign exchanges, which relates to currency fluctuations that generate foreign exchange gains or losses on invoices denominated in currencies other than the U.S. dollar.
Income Tax (Benefit) Expense
Income tax (benefit) expense includes the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amount and the tax basis of assets and liabilities, along with net operating loss carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all the deferred tax assets will not be realized. When uncertain tax positions exist, we recognize the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. We recognize any interest and penalties accrued related to unrecognized tax benefits as income tax expense.
Results of Operations
The following table sets forth our results of operations for the periods indicated:
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 39,587 | $ | 39,599 | $ | (12) | - | % | $ | 119,768 | $ | 106,468 | $ | 13,300 | 12.5 | % | |||||||||||||||||||||||||||||||
| Cost of sales | 33,497 | 30,276 | 3,221 | 10.6 | % | 99,883 | 81,701 | 18,182 | 22.3 | % | |||||||||||||||||||||||||||||||||||||
| Selling, general, and administrative | 25,106 | 15,173 | 9,933 | 65.5 | % | 81,633 | 44,058 | 37,575 | 85.3 | % | |||||||||||||||||||||||||||||||||||||
| Research and development | 3,038 | (397) | 3,435 | * | 7,580 | 7,240 | 340 | 4.7 | % | ||||||||||||||||||||||||||||||||||||||
| Impairment losses | - | 3,594 | (3,594) | * | - | 3,594 | (3,594) | * | |||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangibles | 1,989 | 3,046 | (1,057) | (34.7) | % | 5,141 | 6,535 | (1,394) | (21.3) | % | |||||||||||||||||||||||||||||||||||||
| Loss from operations | $ | (24,043) | $ | (12,093) | $ | (11,950) | 98.8 | % | $ | (74,469) | $ | (36,660) | $ | (37,809) | 103.1 | % | |||||||||||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss on debt extinguishment | $ | - | $ | (584) | $ | 584 | (100.0) | % | $ | (7,804) | $ | (11,297) | $ | 3,493 | (30.9) | % | |||||||||||||||||||||||||||||||
| Finance and interest expense, net | (200) | (2,940) | 2,740 | (93.2) | % | (5,452) | (9,029) | 3,577 | (39.6) | % | |||||||||||||||||||||||||||||||||||||
| Other income, net | 4,145 | 462 | 3,683 | * | 6,762 | 954 | 5,808 | * | |||||||||||||||||||||||||||||||||||||||
| Loss before income taxes | (20,098) | (15,155) | (4,943) | 32.6 | % | (80,963) | (56,032) | (24,931) | 44.5 | % | |||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | (1,762) | 92 | (1,854) | * | (1,633) | 218 | (1,851) | * | |||||||||||||||||||||||||||||||||||||||
| Net loss | (18,336) | (15,247) | (3,089) | 20.3 | % | (79,330) | (56,250) | (23,080) | 41.0 | % | |||||||||||||||||||||||||||||||||||||
| Net loss attributable to noncontrolling interests | (2,063) | (280) | (1,783) | * | (4,737) | (3,138) | (1,599) | 51.0 | % | ||||||||||||||||||||||||||||||||||||||
| Net loss attributable to Voyager Technologies, Inc. | $ | (16,273) | $ | (14,967) | $ | (1,306) | 8.7 | % | $ | (74,593) | $ | (53,112) | $ | (21,481) | 40.4 | % | |||||||||||||||||||||||||||||||
__________________
*% Change not meaningful; non-meaningful changes are defined as greater than absolute value of 200% change or a change from 0%
Net sales
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 39,587 | $ | 39,599 | $ | (12) | - | % | $ | 119,768 | $ | 106,468 | $ | 13,300 | 12.5 | % | |||||||||||||||||||||||||||||||
For the three months ended September 30, 2025, the increase in net sales was primarily due to an increase in sales in the Defense and National Security segment, which experienced growth of $8.0 million in external sales driven by significant programs won during 2024, offset by a decrease of $8.0 million in net sales in the Space Solutions segment, driven by lower volumes in U.S. Government sales. For a further discussion of the drivers behind the change in revenues, see "-Results by Segment."
For the nine months ended September 30, 2025, the increase in net sales was primarily due to an increase in sales in the Defense and National Security segment, which experienced growth of $34.5 million in external sales driven by significant increases in U.S. Government revenue volume, offset by a decrease of $21.2 million in net sales in the Space Solutions segment, driven primarily by lower volumes in U.S. Government sales. For a further discussion of the drivers behind the change in revenues, see "-Results by Segment."
Cost of sales
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Cost of sales | $ | 33,497 | $ | 30,276 | $ | 3,221 | 10.6 | % | $ | 99,883 | $ | 81,701 | $ | 18,182 | 22.3 | % | |||||||||||||||||||||||||||||||
For the three months ended September 30, 2025, the increase in costs of sales was primarily due to an increase in sales volumes and program input costs in the Defense and National Security segment, driving a $7.0 million cost increase in the quarter ended September 30, 2025. The increase was primarily offset by lower volumes and program input costs in the Space Solutions segment, which drove a decrease in costs of sales year over year of $4.8 million.
For the nine months ended September 30, 2025, the increase in costs of sales was primarily due to an increase in sales volumes and program input costs in the Defense and National Security segment, driving a $29.1 million cost increase in the quarter ended September 30, 2025. The increase was primarily offset by lower volumes and program input costs in the Space Solutions segment, which drove a decrease in costs of sales year over year of $11.0 million.
Selling, general, and administrative
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Selling, general, and administrative | $ | 25,106 | $ | 15,173 | $ | 9,933 | 65.5 | % | $ | 81,633 | $ | 44,058 | $ | 37,575 | 85.3 | % | |||||||||||||||||||||||||||||||
For the three months ended September 30, 2025, the increase in selling, general, and administrative costs was primarily due to a $5.2 million increase in employee compensation expenses associated with headcount and benefit growth, along with a $4.5 million increase in administrative, marketing, and legal expense increases during the quarter ended September 30, 2025.
For the nine months ended September 30, 2025, the increase in selling, general, and administrative costs was primarily due to a $12.7 million increase in stock compensation costs mostly associated with the Company's initial public offering during the nine months ended September 30, 2025, a $6.0 million recovery during the nine months ended September 30, 2024 that did not occur during the same period in 2025, along with a $18.7 million increase in employee compensation expenses associated with internal commissions for fundraising efforts, salaries, accounting, IT, marketing and legal expense increases during the period ended September 30, 2025.
Research and development
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Research and development | $ | 3,038 | $ | (397) | $ | 3,435 | * | $ | 7,580 | $ | 7,240 | $ | 340 | 4.7 | % | ||||||||||||||||||||||||||||||||
For the three months ended September 30, 2025, the increase in research and development, net was primarily due to $0.6 million and $1.5 million in additional research and development efforts at both Voyager and Starlab Space LLC, respectively, that occurred during the three months ended September 30, 2025, that did not recur in the same period during 2024. During the three months ended September 30, 2025 the Company also had a decrease in government grants attributable to contra expense of $1.2 million compared to the same period in 2024.
For the nine months ended September 30, 2025, the immaterial increase in research and development, net was primarily due to an increase in corporate research and development efforts of $3.0 million during the nine month period ended September 30, 2025 compared to the same period in 2024 mostly offset by an increase of $2.1 million of government grants attributable to contra expense compared to the same period in 2024.
Impairment losses
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Impairment losses | $ | - | $ | 3,594 | $ | (3,594) | * | $ | - | $ | 3,594 | $ | (3,594) | * | |||||||||||||||||||||||||||||||||
For the three and nine months ended September 30, 2025, the decrease in impairment losses was due to a $3.6 million impairment for the Company's Atomos investment that occurred during the three and nine months ended September 30, 2024, that did not recur in the same period during 2025.
Amortization of acquired intangibles
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangibles | $ | 1,989 | $ | 3,046 | $ | (1,057) | (34.7) | % | $ | 5,141 | $ | 6,535 | $ | (1,394) | (21.3) | % | |||||||||||||||||||||||||||||||
For the three and nine months ended September 30, 2025, the decrease in amortization of acquired intangibles to the three and nine months ended September 30, 2024 was driven primarily by amortization completion on intangibles from previous acquisition that occurred during 2024.
Finance and interest expense, net
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Finance and interest expense, net | $ | (200) | $ | (2,940) | $ | 2,740 | (93.2) | % | $ | (5,452) | $ | (9,029) | $ | 3,577 | (39.6) | % | |||||||||||||||||||||||||||||||
For the three and nine months ended September 30, 2025, the decrease in finance and interest expense as compared to the three and nine months ended September 30, 2024 was driven primarily by lower interest expenses associated with the Company's debt extinguishment in 2025.
Loss on debt extinguishment
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Loss on debt extinguishment | $ | - | $ | (584) | $ | 584 | (100.0) | % | $ | (7,804) | $ | (11,297) | $ | 3,493 | (30.9) | % | |||||||||||||||||||||||||||||||
For the three and nine months ended September 30, 2025, the decreases in losses on debt extinguishments was driven by extinguishments of our Term Loan and Convertible Debt in the nine month period ended September 30, 2025 in comparison with the losses incurred related to debt extinguishment costs incurred during the three and nine months ended September 30, 2024 for the replacement of a prior term loan in exchange for the Term Loan.
Other income, net
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Other income, net | $ | 4,145 | $ | 462 | $ | 3,683 | * | $ | 6,762 | $ | 954 | $ | 5,808 | * | |||||||||||||||||||||||||||||||||
For the three and nine months ended September 30, 2025, the increase in other income, net was associated with increased interest income associated with increased cash holdings during the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024.
Income tax expense (benefit)
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | $ | (1,762) | $ | 92 | $ | (1,854) | * | $ | (1,633) | $ | 218 | $ | (1,851) | * | |||||||||||||||||||||||||||||||||
For the three and nine months ended September 30, 2025, the increase in income tax benefit was associated with a benefit in deferred tax expense during the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024.
Results by Segment
Our Chief Operating Decision Maker measures the performance of our reportable segments based on net sales and Adjusted EBITDA. Our operating and reportable segments are: Defense and National Security, Space Solutions and Starlab Space Stations. During the second quarter of 2025, the Adjusted EBITDA metric was modified to remove non-cash services as an add back, and the prior periods have been have recast to present Adjusted EBITDA to align with the new composition of the metric. These costs were historically only prevalent within the Starlab Space Stations segment and at the Corporate level. See Note 12, "Segment Reporting" to our condensed consolidated financial statements included elsewhere in this Quarterly Report.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||||||||||||||||
| Net Sales: | |||||||||||||||||||||||
| Defense and National Security | $ | 28,508 | $ | 21,772 | $ | 87,244 | $ | 55,501 | |||||||||||||||
| Space Solutions | 11,691 | 19,786 | 35,119 | 56,928 | |||||||||||||||||||
| Starlab Space Stations | - | - | - | - | |||||||||||||||||||
| Total Net Sales, reportable segments | 40,199 | 41,558 | 122,363 | 112,429 | |||||||||||||||||||
| Intersegment eliminations | (612) | (1,959) | (2,595) | (5,961) | |||||||||||||||||||
| Total Net Sales | $ | 39,587 | $ | 39,599 | $ | 119,768 | $ | 106,468 | |||||||||||||||
| Adjusted EBITDA: | |||||||||||||||||||||||
| Defense and National Security | $ | (1,956) | $ | 876 | $ | - | $ | 1,631 | |||||||||||||||
| Space Solutions | (626) | 1,618 | (3,153) | 1,564 | |||||||||||||||||||
| Starlab Space Stations | (6,150) | 3,997 | (10,932) | (6,537) | |||||||||||||||||||
| Total Adjusted EBITDA, reportable segments | (8,732) | 6,491 | (14,085) | (3,342) | |||||||||||||||||||
| Intersegment eliminations | - | - | - | (24) | |||||||||||||||||||
| Corporate and other expenses | $ | (8,961) | $ | (15,320) | $ | (34,030) | $ | (20,336) | |||||||||||||||
Defense and National Security
The following table provides selected financial information for the Defense and National Security segment.
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 28,508 | $ | 21,772 | $ | 6,736 | 30.9 | % | $ | 87,244 | $ | 55,501 | $ | 31,743 | 57.2 | % | |||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | (1,956) | $ | 876 | $ | (2,832) | * | $ | - | $ | 1,631 | $ | (1,631) | * | |||||||||||||||||||||||||||||||||
| Adjusted EBITDA margin percentage | (6.9) | % | 4.0 | % | - | % | 2.9 | % | |||||||||||||||||||||||||||||||||||||||
For the three months ended September 30, 2025, the increase in net sales was driven primarily by a $12.9 million increase in U.S. government revenue compared to the three months ended September 30, 2024. The increase in net sales was driven by volume increases on programs including revenues derived significant program material purchases during the period, and was partially offset by a $6.1 million decrease in commercial sales based on completion of commercial programs. The decrease in Adjusted EBITDA was driven by the increase in program cost growth period over period.
For the nine months ended September 30, 2025, the increase in net sales was driven primarily by a $36.5 million increase in U.S. government revenue compared to the nine months ended September 30, 2024, partially offset by a $4.8 million decrease in commercial net sales due to lower commercial program volumes and program completion during the same comparable period. The increase in net sales was derived from program expansion, volume increases on existing programs and revenues derived significant program material purchases during the period. The decrease in Adjusted EBITDA was driven by the increase in program costs year over year.
Space Solutions
The following table provides selected financial information for the Space Solutions segment.
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 11,691 | $ | 19,786 | $ | (8,095) | (40.9) | % | $ | 35,119 | $ | 56,928 | $ | (21,809) | (38.3) | % | |||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | (626) | $ | 1,618 | $ | (2,244) | (138.7) | % | $ | (3,153) | $ | 1,564 | $ | (4,717) | * | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA margin percentage | (5.4) | % | 8.2 | % | (9.0) | % | 2.7 | % | |||||||||||||||||||||||||||||||||||||||
For the three months ended September 30, 2025, the decrease in net sales was driven primarily by a $8.4 million decrease in U.S. government revenue due to decreased volumes primarily related to programs that concluded before the three months period ended September 30, 2025 that were still ongoing during the three months ended September 30, 2024. The decrease in Adjusted EBITDA was driven by the lower program volume contributions during the three months ended September 30, 2025 compared to the three months ended September 30, 2024, related to the lower volume on programs and increases in program costs that drove margin reduction.
For the nine months ended September 30, 2025, the decrease in net sales was driven primarily by a $19.4 million decrease in U.S. government revenue due to decreased volumes related to programs that concluded during the nine months period ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease in Adjusted EBITDA was driven by the lower program contributions during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, related to the lower volume on programs and increases in program costs that drove margin reduction.
Starlab Space Stations
The following table provides selected financial information for the Starlab Space Stations segment.
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Year over Year | % | September 30, 2025 | September 30, 2024 | Year over Year | % | |||||||||||||||||||||||||||||||||||||||
| Net sales | $ | - | $ | - | $ | - | * | $ | - | $ | - | $ | - | * | |||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | (6,150) | $ | 3,997 | $ | (10,147) | * | $ | (10,932) | $ | (6,537) | $ | (4,395) | 67.2 | % | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA margin percentage | * | * | * | * | |||||||||||||||||||||||||||||||||||||||||||
________________
*Not meaningful
For the three months ended September 30, 2025, the decrease in Adjusted EBITDA was driven primarily by an increase in Starlab operating expenses and research and development expenses of $5 million along with a decrease of $1.3 million of grant funding attributable to contra expenses, which were received in the quarter ended September 30, 2025 compared to the three months ended September 30, 2024.
For the nine months ended September 30, 2025, the decrease in Adjusted EBITDA was driven primarily by an increase of $6.3 million of salary, fundraising and administrative expenses, offset by an increase $2.1 million in grant funding attributable to contra expenses for the nine months ended September 30, 2025 compared to the same period ended September 30, 2024.
Intersegment Eliminations
Intersegment eliminations are related to projects between our segments, including the construction of our Starlab program. Intersegment eliminations decreased to $0.6 million from $2.0 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, and decreased to $2.6 million from $6.0 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease in intersegment eliminations in both periods was primarily related to a decrease in Starlab driven programs.
Key Performance Indicators and Non-GAAP Financial Measures
In assessing the performance of our business, in addition to considering a variety of measures in accordance with GAAP, our management team also monitors key operational metrics and non-GAAP financial measures that assist us in evaluating our business, measuring our performance, identifying trends, formulating financial projects and making strategic decisions.
We believe that these operational metrics and non-GAAP financial measures provide useful information to users of our financial statements in understanding and evaluating our results of operations in the same manner as our management team. The presentation of operational metrics and non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
The following tables set forth our key performance metrics, which are further discussed below:
| (dollars in thousands) | September 30, 2025 | December 31, 2024 | |||||||||
|
Funded backlog(1)
|
|||||||||||
| Defense and National Security | $ | 46,807 | $ | 59,234 | |||||||
| Space Solutions | 41,379 | 42,499 | |||||||||
| Starlab Space Stations | - | - | |||||||||
| Total funded backlog | 88,186 | 101,733 | |||||||||
|
Unfunded contract options(2)
|
100,417 | 98,349 | |||||||||
|
Total backlog
|
$ | 188,603 | $ | 200,082 | |||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (dollars in thousands, except per share amounts) | September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||||||||||||||||
| Net sales | $ | 39,587 | $ | 39,599 | $ | 119,768 | $ | 106,468 | |||||||||||||||
| Gross profit | 6,090 | 9,323 | 19,885 | 24,767 | |||||||||||||||||||
| Net loss attributable to Voyager Technologies, Inc. | (16,273) | (14,967) | (74,593) | (53,112) | |||||||||||||||||||
|
Adjusted EBITDA(3)
|
(17,693) | (8,829) | (48,115) | (23,702) | |||||||||||||||||||
|
Adjusted loss per share
|
(0.22) | (1.56) | (1.73) | (4.29) | |||||||||||||||||||
| Net cash used in operating activities | (15,061) | (948) | (45,964) | (20,003) | |||||||||||||||||||
|
Free cash flow(4)
|
$ | (49,896) | $ | (5,903) | $ | (100,676) | $ | (43,033) | |||||||||||||||
________________
(1)Funded backlog is comprised of projects for which we have received a written contract or purchase order, either executed or awaiting execution, excluding any unfunded contract options. Our backlog may also include, as of any date of estimation, change orders for any project that have been confirmed, either in writing or verbally, or formally contracted.
(2)Unfunded contract options represent unfunded portions of contract value and customer options for future products or services that have not yet been exercised and potential bookings under IDIQ contracts. As of September 30, 2025, unfunded contract options were primarily comprised of customer options for future products or services that have not yet been exercised in the Defense and National Security segment.
(3)See "Non-GAAP Financial Measures" below for a discussion of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net loss attributable to Voyager Technologies, Inc., the most directly comparable GAAP measure to Adjusted EBITDA.
(4)See "Non-GAAP Financial Measures" below for a discussion of free cash flow and a reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable GAAP measure to free cash flow.
Non-GAAP Financial Measures
Non-GAAP financial measures are not calculated or presented in accordance with GAAP and other companies in our industry may calculate them differently than we do. As a result, non-GAAP financial measures have limitations as analytical and comparative tools and you should not consider them in isolation, or as a substitute, for analysis of our results as reported under GAAP. In addition, in evaluating Adjusted EBITDA, adjusted loss per share and free cash flow, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation. Our presentation of Adjusted EBITDA, adjusted loss per share and free cash flow should not be construed as an inference that our future results will be unaffected by unusual items. Management compensates for these limitations by primarily relying on our GAAP results in addition to using Adjusted EBITDA, adjusted loss per share and free cash flow supplementally.
Adjusted EBITDA
We consider Adjusted EBITDA to be a useful, supplemental, measure of our operating performance. We use Adjusted EBITDA to supplement GAAP measures in evaluating the performance of our business and the effectiveness of our strategies, to make budgeting decisions, make certain compensation decisions, and to compare our performance against that of our peer companies, many of which present similar non-GAAP financial measures.
In addition, we believe Adjusted EBITDA provides a useful measure for period-to-period comparisons of our business, as it removes the impact of our capital structure and other items not indicative of our core operating performance from operating results.
We define EBITDA as net loss attributable to Voyager Technologies, Inc. plus (less) finance and interest expense, provision for income tax expense (benefit), and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for stock-based compensation, business acquisition costs, restructuring charges, impairment losses, income (loss) attributable to noncontrolling interests, and other items we do not believe are indicative of our core operating performance, including incremental organizational costs attributable to our initial public offering, changes in the fair value of earnout liabilities, and foreign exchange gain/loss. The reconciliation between EBITDA, Adjusted EBITDA, and net loss attributable to Voyager Technologies, Inc. (the most comparable GAAP measure) is shown below:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||||||||||||||||
| Net loss attributable to Voyager Technologies, Inc. | $ | (16,273) | $ | (14,967) | $ | (74,593) | $ | (53,112) | |||||||||||||||
| Finance and interest expense, net | 200 | 2,940 | 5,452 | 9,029 | |||||||||||||||||||
| Depreciation and amortization | 3,130 | 4,124 | 8,440 | 9,595 | |||||||||||||||||||
| Income tax expense (benefit) | (1,762) | 92 | (1,633) | 218 | |||||||||||||||||||
| EBITDA | (14,705) | (7,811) | (62,334) | (34,270) | |||||||||||||||||||
| Stock-based compensation | 2,120 | 845 | 15,390 | 2,688 | |||||||||||||||||||
|
Business acquisition costs(1)
|
482 | 25 | 922 | 255 | |||||||||||||||||||
|
Restructuring(2)
|
613 | 313 | 1,560 | 1,975 | |||||||||||||||||||
| Impairment losses | - | 3,594 | - | 3,594 | |||||||||||||||||||
| Net loss attributable to noncontrolling interests | (2,063) | (280) | (4,737) | (3,138) | |||||||||||||||||||
| Interest income | (4,313) | (1,386) | (7,826) | (1,386) | |||||||||||||||||||
|
Other(3)
|
173 | (4,129) | 8,910 | 6,580 | |||||||||||||||||||
| Adjusted EBITDA | $ | (17,693) | $ | (8,829) | $ | (48,115) | $ | (23,702) | |||||||||||||||
________________
(1)Business acquisition costs include legal costs and incremental transaction costs associated with an acquisition.
(2)Restructuring includes costs for retention and severance payments related to management's decision to undertake certain actions to realign our cost structure through workforce reductions and the closure of certain facilities, businesses and product lines.
(3)Other includes capital market and advisory fees related to advisors assisting with transitional activities associated with becoming a public company, changes in fair value of earn out liabilities, and foreign exchange gain/loss that are all individually insignificant for the period. Other also contains debt extinguishment costs of $7.8 million for the nine months ended September 30, 2025, $0.6 million for the three months ended September 30, 2024, and $11.3 million for the nine months ended September 30, 2024. There were no debt extinguishment costs for the three months ended September 30, 2025.
Adjusted Earnings Per Share
We consider adjusted earnings per share to be a useful, supplemental measure of our operations on a per share basis adjusting for items that are considered either non-operational, significant infrequent expenses, or sources of income that are not recurring to the business on a frequent basis. We define adjusted earnings per share as the net income or loss attributable to common shareholders adjusted for stock-based compensation, business acquisition costs, restructuring, and other items mainly related to financing expenses and other individually immaterial items divided by our diluted basis number of weighted average shares outstanding during the period. Since the adjustments made for presentational purposes do not impact the tax basis of the Company, the adjustments have been presented on a tax free basis.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | ||||||||||||||||||||
| Net loss attributable to common shareholders | $ | (16,273) | $ | (20,558) | $ | (85,852) | $ | (69,191) | |||||||||||||||
|
Stock-based compensation
|
2,120 | 845 | 15,390 | 2,688 | |||||||||||||||||||
|
Business acquisition costs(1)
|
482 | 25 | 922 | 255 | |||||||||||||||||||
|
Restructuring(2)
|
613 | 313 | 1,560 | 1,975 | |||||||||||||||||||
| Impairment losses | - | 3,594 | - | 3,594 | |||||||||||||||||||
|
Other(3)
|
173 | (4,129) | 8,910 | 6,580 | |||||||||||||||||||
| Adjusted net loss attributable to common shareholders | (12,885) | (19,910) | (59,070) | (54,099) | |||||||||||||||||||
| Adjusted net loss per common share | $ | (0.22) | $ | (1.56) | $ | (1.73) | $ | (4.29) | |||||||||||||||
________________
(1)Business acquisition costs include legal costs and incremental transaction costs associated with an acquisition.
(2)Restructuring includes costs for retention and severance payments related to management's decision to undertake certain actions to realign our cost structure through workforce reductions and the closure of certain facilities, businesses and product lines.
(3)Other includes capital market and advisory fees related to advisors assisting with transitional activities associated with becoming a public company, changes in fair value of earn out liabilities, and foreign exchange gain/loss that are all individually insignificant for the period. Other also contains debt extinguishment costs of $7.8 million for the nine months ended September 30, 2025, $0.6 million for the three months ended September 30, 2024, and $11.3 million for the nine months ended September 30, 2024. There were no debt extinguishment costs for the three months ended September 30, 2025.
Free Cash Flow
We consider free cash flow to be a useful, supplemental measure of our ability to generate cash on a normalized basis. We use free cash flow to supplement GAAP measures in evaluating our flexibility to allocate capital and pursue opportunities that may enhance shareholder value and the effectiveness of our strategies, to make budgeting decisions and to compare our performance against that of our peer companies, many of which present similar non-GAAP financial measures.
We believe that while expenditures and dispositions of property, plant and equipment will fluctuate on a period-to-period basis, we seek to ensure that we have adequate capital on hand to maintain ongoing operations and enable growth of the business. Additionally, free cash flow is of limited usefulness in that it does not represent residual cash flows available for discretionary expenditures due to the fact the measure does not deduct the payments required for debt service and other contractual obligations or payments.
We define free cash flow as the sum of our cash (used in) provided by operating activities less our net capital expenditures. The net capital expenditures of the Company are defined as the gross capital expenditures for the purchase of property and equipment less the grant funding we received in order to make such purchases. Based on the nature of government grants for purposes of funding capital expenditures on our Starlab program, these grants are pass through for purposes of making capital expenditures as they are directly used to source funding on capital expenditures. Our calculation of free cash flow may not be comparable to the calculation of similarly titled measures reported by other companies. The reconciliation between free cash flow and net cash (used in) provided by operating activities (the most comparable GAAP measure) is shown below:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||||||||||||||||
| Net cash used in operating activities | $ | (15,061) | $ | (948) | $ | (45,964) | $ | (20,003) | |||||||||||||||
| Purchases of property and equipment | (38,435) | (20,435) | (96,562) | (52,760) | |||||||||||||||||||
| Grant funding for property and equipment | 3,600 | 15,480 | 41,850 | 29,730 | |||||||||||||||||||
| Free cash flow | $ | (49,896) | $ | (5,903) | $ | (100,676) | $ | (43,033) | |||||||||||||||
The reconciliation between total Voyager capital expenditures, Starlab Space Stations capital expenditures and capital expenditures excluding Starlab Space Stations is shown below:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||||||||||||||||
| Total Voyager capital expenditures | $ | 39,035 | $ | 20,433 | $ | 96,300 | $ | 52,758 | |||||||||||||||
| Less: Starlab Space Stations capital expenditures | 37,184 | 19,692 | 92,434 | 50,299 | |||||||||||||||||||
| Capital expenditures excluding Starlab Space Stations | $ | 1,851 | $ | 741 | $ | 3,866 | $ | 2,459 | |||||||||||||||
Innovation Spend
We are focused on delivering innovative solutions to the defense, national security, and space end markets, and research and development is at the core of our business. We believe innovation spend and innovation spend excluding Starlab provide our management and investors useful measures of our aggregate spend on research and development type activities in support of our customers' needs and our future growth. However, innovation spend is an operating metric, not a financial measure calculated or presented in accordance with GAAP, and companies in our industry may calculate innovation spend or similar operating metrics differently than we do. We define innovation spend as research and development costs associated with IRS Section 174 categorization, as well as spend on designated development programs. Development programs are defined as initiatives that, when developed, will expand the Company's product offerings under a customer funded arrangement. Innovation spend is comprised of various costs recognized in cost of sales and research and development costs within the consolidated statements of operations, as well as certain costs capitalized within property and equipment, net on our consolidated balance sheets. We define innovation spend excluding Starlab as innovation spend, minus the portion of innovation spend attributable to Starlab Space Stations. The table below sets forth the components of our innovation spend and innovation spend excluding Starlab for the three and nine months ended September 30, 2025 and September 30, 2024:
| Three Months Ended | Years Ended December 31, | ||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2025 | June 30, 2025 | March 31, 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Capitalized research and development under section 174 | $ | 44,080 | $ | 32,658 | $ | 33,599 | $ | 105,206 | $ | 46,222 | |||||||||||||||||||
|
Development program innovation spend(1)
|
5,277 | 5,989 | 5,513 | 22,024 | 20,330 | ||||||||||||||||||||||||
| Innovation spend | 49,357 | 38,647 | 39,112 | 127,230 | 66,552 | ||||||||||||||||||||||||
| Less: Starlab Space Stations innovation spend | 41,865 | 30,538 | 29,378 | 101,678 | 42,556 | ||||||||||||||||||||||||
| Innovation spend excluding Starlab Space Stations | $ | 7,492 | $ | 8,109 | $ | 9,734 | $ | 25,552 | $ | 23,996 | |||||||||||||||||||
| Innovation spend as a percentage of net sales | 124.7 | % | 84.6 | % | 113.3 | % | 88.2 | % | 48.9 | % | |||||||||||||||||||
| Innovation spend excluding Starlab Space Stations as a percentage of net sales | 18.9 | % | 17.8 | % | 28.2 | % | 17.7 | % | 17.6 | % | |||||||||||||||||||
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(1)Development program innovation spend represents program spend on designated innovation programs within the business that is necessary for fulfillment of performance obligations on revenue generating programs.
Liquidity and Capital Resources
As of September 30, 2025, we had cash and cash equivalents of approximately $413.3 million, which primarily consisted of net proceeds from our IPO, demand deposits, and money market mutual funds substantially all held within U.S. bank accounts. We currently expect that our principal sources of funding will include our current cash balances and ability to draw on our Credit Facility. We are focused on maintaining flexibility in the future evolution of our capital structure and seeking to access the lowest cost of capital while also remaining opportunistic as organic and external opportunities arise. Targeted external growth opportunities would be funded primarily with a mix of equity, cash, and debt. In addition to NASA funding, we expect to consider all financing options for Starlab, including funding through a combination of customer prebuys, the largest examples being other international space agencies, where prospective customers pay us in advance for usage of Starlab, as well as capital markets financing, including equity and project-based financing.
On June 12, 2025 we closed our initial public offering of 14,200,645 shares of our Class A common stock at a price of $31.00 per share, which included the exercise in full by the underwriters of their option to purchase from us an additional 1,852,258 shares of Class A common stock. The net proceeds to us from the IPO were approximately $409.4 million.
Our primary operating cash requirements include the payment of compensation and related costs, financing acquisitions, ongoing investment in Starlab and costs for our facilities, and information technology infrastructure. As of September 30, 2025, we believe our existing cash and cash equivalents and funds received from the capital and equity markets will be sufficient to meet our working capital and capital expenditure needs over the next twelve months and the foreseeable future.
We expect our cost of sales, operating expenses, and capital expenditures to increase in connection with our ongoing activities, particularly as we grow with our customers and win new business, expand our portfolio offering with new technologies, and continue to develop the next generation of space infrastructure.
Specifically, our costs, operating expenses and capital expenditures will increase as we:
•grow our revenue base;
•scale up our manufacturing processes and capabilities;
•maintain, expand, and protect our intellectual property portfolio; and
•hire additional personnel in management to support the expansion of our operational, financial, information technology, and other areas to support our operations as a public company.
Although we believe that our current capital is adequate to sustain our operations for a period of time, changing circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control.
Summary of Cash Flows
The following table presents the major components of our cash used in operating activities, cash used in investing activities and cash provided by financing activities for the periods presented:
| Nine Months Ended | |||||||||||||||||
| (dollars in thousands) | September 30, 2025 | September 30, 2024 | Change | ||||||||||||||
| Net cash used in operating activities | $ | (45,964) | $ | (20,003) | $ | (25,961) | |||||||||||
| Net cash used in investing activities | (89,809) | (23,030) | (66,779) | ||||||||||||||
| Net cash provided by financing activities | 493,038 | 54,929 | 438,109 | ||||||||||||||
| Effect of foreign exchange on cash and cash equivalents | 125 | 23 | 102 | ||||||||||||||
| Net increase in cash and cash equivalents | $ | 357,390 | $ | 11,919 | $ | 345,471 | |||||||||||
Operating Activities
Cash flows from operating activities can vary significantly from period to period as a result of our working capital requirements, given our portfolio of programs and the timing of milestone receipts and payments with customer and suppliers in the ordinary course of business. Investment in working capital is also necessary to build our business and manage supplier activities within program arrangements. We expect working capital balances to continue to vary from period to period. We efficiently fund our working capital requirements with financing activities.
The increase in cash used in operating activities was driven by a $22.8 million decrease in cash from working capital related to increases in prepaid expenses and reductions from contract liabilities related to more work performed on programs during the nine months ended September 30, 2025 than cash milestones collected on programs.
Investing Activities
The primary driver for the increase in cash used in investing activities relates to cash used for acquisitions of $32.6 million, cash used for investments of $2.5 million, and an increase in capital investment of $43.8 million, primarily at Starlab, offset by a $12.1 million increase in government grant funding received.
Financing Activities
The increase in cash provided by financing activities was driven by our IPO cash raised, net of underwriting and commissions of $409.4 million, and a $45.9 million and $69.6 million increase in Common stock and Series C fundraising, respectively, during the nine months ended September 30, 2025 as compared to the period ended September 30, 2024. These increases were offset by the repayment of our 2024 Term Loan of $64.4 million and repayment of our Preferred B dividends of $27.6 million along with the increase in financing inflows of $6.5 million mostly related to other financing raises during the nine months ended September 30, 2025.
Outstanding Indebtedness
The following table summarizes our long-term debt:
| (dollars in thousands) | September 30, 2025 | December 31, 2024 | |||||||||
| Term loan | $ | - | $ | 65,972 | |||||||
| 2024 Convertible Notes | - | 10,274 | |||||||||
| SMI Promissory Notes | - | 24,593 | |||||||||
| Less: debt issuance costs | - | (11,820) | |||||||||
| Net carrying amount | - | 89,019 | |||||||||
| Less: current portion | - | 665 | |||||||||
| Total long-term debt, net | $ | - | $ | 88,354 | |||||||
On May 30, 2025, we entered into a new senior secured revolving credit facility (the "Credit Facility") with a syndicate of lenders, led by JP Morgan Chase Bank, N.A., providing for aggregate commitments of $200 million. The Credit Facility is intended to be used for working capital and other general corporate purposes. The Credit Facility has an initial maturity of four years from the closing date and includes an uncommitted accordion feature that permits the Company, subject to certain conditions, to request an increase in the aggregate commitments by up to an additional $150 million, for a total potential facility size of $350 million. Borrowings under the Credit Facility bear interest at a variable rate based on Adjusted Term SOFR plus an applicable margin. The applicable margin for borrowings ranges from 2.25% to 2.75%, depending on the Company's consolidated liquidity levels, as defined in the agreement. In addition, the Company is required to pay an undrawn commitment fee ranging from 0.25% to 0.30% on the unused portion of the Credit Facility, also based on liquidity levels. The Credit Facility contains customary covenants, representations and warranties, and events of default, including, among others, restrictions on the incurrence of additional indebtedness, the creation of liens, certain fundamental changes, and certain restricted payments. Covenants include financial covenants, such as a minimum liquidity amount as of the last day of each fiscal quarter and minimum consolidated revenue amounts over a trailing four quarter period. The obligations under the Credit Facility are secured by substantially all of the Company's and its domestic subsidiaries' assets, with the exception of Starlab, subject to certain customary exceptions.
As of September 30, 2025, we had no drawn amounts on the Credit Facility. During the quarter ended September 30, 2025, the Company did not withdraw funds under the Credit Facility. We currently have no indebtedness outstanding under the Credit Facility.
Contractual Commitments
We enter into contractual obligations in the normal course of business. Our contractual commitments primarily consist of operating lease commitments for our office lease rentals and a commitment for future launch services. For additional information, refer to Note 16, "Commitments and Contingencies". Except as already disclosed in Note 16, "Commitments and Contingencies", there has been no material change in our contractual commitments other than in the ordinary course of business since our fiscal year ended December 31, 2024.
Critical Accounting Policies and Estimates
There were no material changes to our critical accounting policies, estimates or judgments, that occurred in the period covered by this report from those discussed in our Prospectus.
Voyager Technologies Inc. published this content on November 04, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 04, 2025 at 18:55 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]