Redwire at 37th Annual ROTH Conference: Strategic Growth in Space Economy

On Tuesday, 18 March 2025, Redwire Corp (NYSE: RDW) showcased its strategic initiatives at the 37th Annual ROTH Conference. The company highlighted its robust position in the space economy, driven by government contracts and innovative technologies. Despite facing challenges such as labor constraints, Redwire remains optimistic about its growth prospects, particularly with its ongoing acquisition of Edge Autonomy.

Key Takeaways

• Redwire derives approximately 85% of its revenue from government contracts.
• The company is bidding on over $4 billion worth of programs in 2024, indicating strong market demand.
• Redwire anticipates organic growth rates between 15% and 25%.
• The acquisition of Edge Autonomy is expected to enhance Redwire’s capabilities in space and defense sectors.
• Redwire is investing in digital engineering and software to strengthen its product offerings.

Financial Results

Redwire’s financial stability is underscored by its reliance on government contracts, which constitute about 85% of its revenue. The company reported a record bidding activity, with over $4 billion worth of projects in 2024. Organic growth has been strong, ranging from 15% to 25% in recent years. The pharmaceutical development segment, though a small part of the overall revenue, is already profitable from an EBITDA perspective.

Operational Updates

Redwire is on track to complete its acquisition of Edge Autonomy in the second quarter, which is expected to be transformative for its operations. The company continues to focus on national security projects, leveraging its facilities and personnel. Notable product offerings include power systems, avionics sensors, and radio antennas. Redwire is also conducting protein crystal experiments in space, with 27 planned for 2024.

Future Outlook

Looking ahead, Redwire plans to integrate Edge Autonomy’s technologies and expand its digital engineering and software capabilities. The company is poised for growth in the European market, driven by increased ESA budgets and initiatives like Artemis. Redwire also sees opportunities in the defense sector, particularly in VLEO and all-domain solutions.

Q&A Highlights

During the Q&A session, Redwire addressed its competition with prime contractors, emphasizing collaboration as a key strategy. The company attributes its growth to unique technologies and its ability to quickly mobilize resources. Although software revenue is not separately disclosed, it plays a critical role in Redwire’s offerings, especially in flight software and AI capabilities.

Readers are encouraged to refer to the full transcript for a detailed understanding of Redwire’s strategic direction and financial performance.

Full transcript - 37th Annual ROTH Conference:

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: morning, everybody. Next up, we have Redwire. My name is Suji Desilva.

I’m the semiconductor analyst at Roth and Intelligent Systems. I cover the space sector and a part of that Redwire, CFO, Jonathan Baliff, is here from Redwire. Jonathan, thanks for coming to the conference. We appreciate it.

Jonathan Baliff, CFO and Board Member, Redwire: Yes, Sujit.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: Yeah, of course. And we’re gonna do a Q and A format here. Start off with just talking maybe about the end market, Jonathan. The space economy, given there’s a new administration in place, it’s been a couple of months now. We can kind of see some, maybe patterns there.

Any thoughts on perhaps any changes or are things unchanged relative to previously?

Jonathan Baliff, CFO and Board Member, Redwire: So, you know, for Red so, just to introduce myself, Jonathan Bailiff. I am a chief financial officer and also a board member. And, you know, Redwire, in many ways, what how we say, we’re the picks and shovels of space. So we make, a lot of the components, equipment, infrastructure. Most of our programs, especially with the government government is roughly 85% of our revenue, either directly or through some of the larger primes.

We provide most of the critical components for space infrastructure. So what we’ve seen in the previous administration change in 2021 is usually, whether it be Republican, Democrat, Democrat, Democrat, there’s usually a bit of a delay, that happens as the administrations change, at least from what we saw in ’21. We are not a seasonal company. Right? Getting space infrastructure is not based on weather.

What we do see is that the sales cycles have a tendency to be longer. So we’ve seen, a lot of our sales more in the second half of the year than the front half of the year. And I think that’s what we’re going to see, and we said that on our fourth quarter call, that’s what we’re going to see this year also. That being said, our backlog is funded. Historically, we’ve never seen our backlog canceled even with government shutdowns threatened.

Obviously, we’re not on a continual resolution. And so for us, we’re fairly conservatively managed company financially. So we have lots of liquidity. We were able to get through these. And again, we bid on over $4,000,000,000 worth of projects last year.

So where it might have an impact is just a delay in awarding of those projects or the adjudication of those projects.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: Okay. Now it sounds fairly stable, which is good. Maybe on the national security side, maybe you can talk about how Rocket Lab is addressing that market. That’s very much in the in the news these days in terms of, you know, warfare and so forth. So maybe you can address Redwire’s opportunity there.

Jonathan Baliff, CFO and Board Member, Redwire: Okay. Good. So I mean, for Redwire, and the national security, that is, we say the national security defense is the fastest swim lane, or one of the fastest swim lanes in space because civil space, especially the NASA buzzards, you know, have been a little less, growth, but defense has been the growth engine of a lot of space infrastructure. And and, obviously, Redwire has a lot of national security clients. We also have infrastructure that allows us to do national security.

You have to have classified facilities, classified executives and team members who can work on the projects, and we have that for a size company of Redwire. I mean, we’re not a small company, but we actually have a sizable proportion of our square footage devoted to national security. But most importantly or as importantly, I would say, actually as importantly, when you look at the picture behind me and obviously this is being webcast, so this is the picture of our fourth quarter call. This in many way describes the acquisition that we announced. It hasn’t closed.

The acquisition of Edge Autonomy will close in the second quarter. But this picture kind of describes that national security customer base that we are serving. You have the warfighter in the center, and then you obviously have the UAS systems, airborne, which is part of the acquisition, and then obviously our orbital drones or satellites, including the Mako, the Thresher and the Hammerhead. Here, this is meant to show those seamlessly being a system of systems, which is where the national security defense customer, whether it be European or US or international or US, is really where we want this and we need this to go to a place where it’s a system of systems seamless, and Redwire will play a part in that with our new acquisition. And and even independently, we will help others with our picks and shovels serve this integrated warfighter model.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: I’ve read I’ve read more and more about this airborne to LEO to MEO geo coordination. I think there’s a term for it, but I’m wondering if you’ll

Jonathan Baliff, CFO and Board Member, Redwire: Nice to feed that one in there. It’s called JADC or BMC three, but JADC is joint all domain All domain. Command and control. So we Yeah. Talked about this when we announced the acquisition that this puts us at a scaled all domain space and defense tech company that’s very differentiated from the space only public companies, and it differentiates us from a number of the defense tech country companies that are not public yet or not public at all.

And so we we’re one of the few companies that has the differentiated technology, but we’re large enough to be trusted. And being a public company actually helps. We’re very transparent, and so that actually helps as as part of our growth strategy.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: I had the heritage and the clearance as well. No. So I think this term all domain is gonna come up more and more. Is there a software play for Redware on top of the

Jonathan Baliff, CFO and Board Member, Redwire: hardware or Absolutely. I mean, we already do software as part of our space space. We have digital engineering and obviously we’re looking to develop that capability more and also get it out to our clients. Here you see the warfighter using, in essence, the edge autonomy or a platform, which looks like basically a portable computer. That’s why it’s called Edge Autonomy.

The flight software is very bespoke, very unique to the UAS systems. UAS stands for uncrewed aerial systems because it’s a whole system, not just the aircraft and the sensor, but also what this warfighter is holding. And she is using this to, in essence, set the parameters for the UAS system, which is above her. But also, in the future, we’ll set the satellite or we’ll at least we’ll talk to a UAS that is talking to her strategic, in essence, command and control through the satellites. One of the problems, obviously, with UAS is, especially, this type of US is it does get into line of sight issues.

But if it’s talking, and communicating digitally with a satellite, it allows for seamless communication across the globe.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: Maybe you can talk about one of the, altitudes that’s lesser discussed, which is VELIO. You You seem to have a particularly differentiated offering there and some products as well. So maybe you can talk about that, kind of in between Airborne and LEO.

Jonathan Baliff, CFO and Board Member, Redwire: That’s right. So very low Earth orbit, which is close to the common line. So the common line is, a hundred kilometers, 70 miles, which, you know, it’s a bit artificial, but it kinda defines space or what is space and then, high altitude, ionosphere. And the bottom line is is that that area has not been, exploited as much and doesn’t have as many, airborne, or really orbital platforms. It operates in an orbital format, I.

E. Can it is in space, but we are now creating we have contracts. One is called Otter with our SabreSat, or we call it an orbital drone. It’s a maneuverable drone that’s meant to work in the VLEO format, I. E.

Be in orbit, but also dip down on maybe grab a little bit of fuel, I. E. Air, then get back up into orbit. We’re doing that with DARPA and have a current contract and will be flying, in the next few years. We actually have, another platform called Phantom in Europe.

Many of our platforms and missions are are divided between The US and Europe, but have similar capabilities. And again, we’re on a program with ESA called SKIMSAT, and that’s meant meant to work in very low Earth orbit. Why do you work in very low Earth orbit? You’ll I would just say simply and maybe over simply two reasons. One, if LEO, which is low Earth orbit, is denied either, due to an adversary or for other reasons, you can actually get the same capability in very low Earth orbit, observation, sensors, other things like that.

And then the other reason in very low Earth orbit is that you can do certain types of reconnaissance and EOIR and other things in a different format. It provides resiliency to your VELIO, MEO and GEO proliferated infrastructure.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: Yes. That’s going to become an increasingly important topic. Maybe we talk about your picks and shovels aspect of your business, your opponents, right? So, you’ve done maybe through acquisitions and organically some key components. I think ROSA Solar arrays is one of the most prominent ones.

Maybe talk about the power, the space based power aspect of your offering, which I think has gotten very strong traction.

Jonathan Baliff, CFO and Board Member, Redwire: That’s right. So important to note that the company is made up of now with the new acquisition, 11 acquisitions. Again, I have to emphasize we have not closed the eleventh, but the first ten acquisitions were space based, really middle market players who had great technologies, but space because of mostly launch costs coming down by orders of magnitude, Suji and I have talked about that, companies like Rocket Lab and others who are both clients of ours and and enabling technologies, we want that cost to go down as as low as it can get down because our six products or or what we call core offerings, are just that many more that can go into space. All of our core offerings have their equivalent on terrestrial Earth. So Suji is mentioning our power systems.

These are mostly solar assemblies that currently, for example, are powering the ISS. We have six wings. They look like big solar panels, but our technology, in essence, unfurls as opposed to folding out because a lot of times you need to fit it into the nose cone of of a rocket and and then it has to fold out. We roll out as opposed to fold out and and allows it has a lot of advantages, especially surface area. So our ROSA platform, which is our technology, currently powers the ISS, but it also powers large GEO satellites.

We just, put them on the ODSM satellite and then obviously we’ve announced contracts with Thales on their Inspire. For our products to be, spec’d in means that as those products grow, we grow. And that’s the whole idea of the picks and shovels. So that’s power. So think of that as like a generation plant on Earth.

Then we have avionics sensors. Those are like the toll roads, because those help satellites and spacecraft orient themselves and stay in space in a predictable way, like on a on a road. Then we have structures and mechanisms. Those are like buildings. And so we make structures and mechanisms like, robot arms and boarding and docking.

We make radio antennas. That’s like cell towers. Right? So everything we do in space has its equivalent terrestrial. We are doing missions and platforms, which means that we’re actually putting these together into various bespoke platforms.

And then finally, we have this really interesting technology that is pharmaceutical development, which is a small cassette that can actually produce protein crystals in space that has, for lack of a better word, taken flight. Right? We did we did one protein crystal demonstration in ’23, and in ’24, we’ve done ’27. I always have to make sure I get the right number on. And these are with, companies like Eli Lilly, Bristol Myers Squibb.

Why are they in essence paying to do this work in microgravity? Protein crystals are more difficult to create on Earth that are tuned to specific therapies. And so we think this business, which already makes revenue, we publicly said it’s less than 15% of our stand alone revenue, but it is already profitable from the standpoint of EBITDA, but it really can be a really interesting uncorrelated part of our business. And we’ve got it as part of one of our acquisitions, but it’s really done quite well in the last few years.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: Yeah. And people dig into Redwire, they’ll see there’s multiple interesting areas that can grow together. And you’ve kind of created a portfolio of these, which is a very nice sort of investment vehicle into the space.

Jonathan Baliff, CFO and Board Member, Redwire: But all of it has a terrestrial element to it. And that’s what you know, space isn’t just for space. Look, we do a lot in exploration in the moon. We were we had our cameras on both the Intuitive Machines’ successful lander and then also the lander from Firefly and our cameras are on both. So we’re very agnostic in that we want when space wins, Redwire wins.

And so we want our customers to be successful as part of the growing space economy. The terrestrial aspect with the acquisition is proving out

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: as well. So that’s a good set of end markets. Can you talk about maybe the kind of The U. S. Domestic demand versus Europe or international?

How those two vary? And are those two equally sized buckets? Is international far larger because of all the different sovereigns? How do we how should we think about

Jonathan Baliff, CFO and Board Member, Redwire: the two opportunities? So I would direct people to our website where we’ve had we publicly disclosed the different budgets, both for defense and civil space, both in The US and in Europe. Europe, you know, by their own admission, has a lot of catching up to do both in defense and in space. The ESA budgets were 17% growers. That was approved two years ago.

The next budget for ESA, which is the NASA equivalent in Europe, is about to be increased. They have a particular focus on Artemis and, lunar, you know, type exploration. The US NASA budgets, you know, continue, to provide revenue to, to Redwire, especially Gateway, which continues to show for us. But again, we have to see how the new administration wants to fund space. We were involved in Mars, and so we see that Mars exploration is something that Redwire has already been a part of and had equipment, and we expect to have that in the future too.

But it really is about the defense budgets that’s driving space. Space is the fastest swim lane in the defense budgets and we’re in the fastest part of those defense space swim lanes in many of the products I just talked about. But we’re particularly excited about VELEO. We’re particularly excited about the interaction between our orbital drones and our airborne UAS platforms. So for us, those appear to be funded and continuing to see some growth.

In Europe, I mean, when we announced the acquisition two, three months ago, we knew that the European budgets were going to be increasing. And we did tell people that in 2023, there was over 50% of Edge Autonomy, the company that we’re, we’re acquiring, had European based revenue. We expect that to continue to grow, but it’s very important to note that Edge Autonomy has also doubled their U. S. Based revenue in the last year.

And so for us, it’s super important that people understand that we announced some revenue numbers on a third quarter LTM basis. U. S. Has been a big part of their growth as ours also.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: Yes. No, it seems like a product

Jonathan Baliff, CFO and Board Member, Redwire: We have both. Yes. We’re one of the few companies of our size that actually can benefit from both markets.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: Makes sense. That’s great. Maybe you can talk a little bit about this trend that I caught up with the Rocket Lab CEO yesterday about nimble’s new space, space tech companies, as I call them, having a different posture than the traditional prime contractors and that you are now winning larger business and you’re winning prime contracting positions. Maybe you can talk about that trend and how that’s come about and made if that continues in some meaningful way.

Jonathan Baliff, CFO and Board Member, Redwire: I mean, again, I think some people have a tendency to denigrate the large primes and the clients. They have great technologies. They have great, you know, facilities and and management in many ways in space and have led the way for decades. One of the things that we are seeing that’s important to note, one, the space infrastructure to create, on Earth, construction of space equipment is very stressed right now. There just isn’t a lot of facility space to create space based infrastructure.

And so their facilities are at Fotilt and our facilities, although have some capacity, are maxing out to be able to serve the space economy. So everybody has a lot of the same issues, both in terms of space and in terms of labor. But the bottom line is, is we are winning and growing at 15% to 25 over the last number of years because of our technologies and our people, right? In the end, that’s what it comes down to. We have very unique technologies, that a lot of our clients, whether they be the primes or direct to our government customer, are demanding.

And the ROSAs are a good example of that. On the flip side or very similar, we have the people, right? We’re one of the few companies, we have almost 800 employees committed to space and space engineering and production. Obviously, Edge Autonomy has not quite that amount, but a sizable amount, especially in Europe. These are unique companies and are actually fairly large for what we do, in this very nascent industry.

And so I could put it to a lot of things, but it really is the innovation plus the heritage and combat proven nature of our equipment and our team members, that really make the differentiation.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: Yeah. Sounds like everybody’s getting pushed hard in this, which is a

Jonathan Baliff, CFO and Board Member, Redwire: But the innovation and technology is a really important piece to new tech, and that seems to be a big differentiator for us and a number of our competitors and peers, which we consider Rocket Lab One. Understood. Now that helps to understand that. Maybe two last topics

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: and we’ll throw open to the audience, for questions. The bookings patterns you have have lumpiness to them. Maybe you can help the audience to kind of understand where those ebbs and flows come from. Are they just timing of programs or what elements are behind that as you kind of talk about a smooth out April, ’8 quarter level that’s growing for you?

Jonathan Baliff, CFO and Board Member, Redwire: Yes. I mean, so for us, we’ve always said when we’ve had very large booking quarters, I mean, I think in ’twenty three, that quarterly booking to revenue book to bill is what we call it was 2.81. It was quite high. And in this quarter, fourth quarter, next year, it was lower, right? And so for us, we have a tendency to look at the trends over multi years because the individual quarters themselves are pretty lumpy.

And it just is the timing. When do you want to snap the chalk for a level of, for a level of bookings? We did bid on a record number of programs. Many of them are still in process. So last in 2023, we bid on almost $1,000,000,000 worth of programs $944,000,000 In 2024, we bid on more than $4,000,000,000 But a lot of it has been pushed and pushed to the right.

That being said, we look at the long term trends. We’re very conservatively capitalized. We have very good liquidity, and we’re in it for the long term. And again, our products and then the amount of bidding that we’re doing is also indicative. And again, the revenue and bookings have a tendency to be quarterly, lumpy, but over time, they smooth out to a nice level of growth.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: Yes. I know you’ve demonstrated growth over the long term. Last question for me, and then we’ll throw the audience. Can you give us an update on the Edge Autonomy acquisition? It’s been, I guess, about a month since you announced it.

So maybe any update there, kind of funding considerations, those elements will be helpful.

Jonathan Baliff, CFO and Board Member, Redwire: Sure. I mean, we announced our fourth quarter earnings last week and we said we’re very much on track. We did talk about the acquisition closing in the second quarter. We’re still on track for that. There are a number of approvals, including HSR, a few ministries of defense.

We view those as ministerial, but we’re on track to getting those approvals, on time. And then I would say that the other, is just being able to get our financials as a pro form a company out for the proxy, which is the shareholder vote, which should again be coming out, in measured in weeks. And then then one will be good disclosure to for everybody to see, but on top of it, it starts the process by which the proxy is put out, the shareholder vote happens. And like we said, we should close in the second quarter comfortably.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: Great. I’ll throw it up to the audience. Any questions from the audience?

Jonathan Baliff, CFO and Board Member, Redwire: Yes. So I’m going to repeat the question for the webcast. So basically, it’s a question of how do we beat the primes to achieve a level of growth. Just by the way, it’s been 15% to 25% organic growth over the past few years is what we’ve said really since we’ve gone public. And so then the question is, how do we beat them?

Is it sustainable to be able to continue this revenue growth? Look, I think the, the I’ll answer the question two ways. One, you know, for us with the primes in space, everybody is a collaborator, everybody is a client, and everybody is a competitor. Right? And one day, you’re competing against, a company and the next day you’re actually their sub and helping them win business.

So I think there needs to be a collaborative approach to space from Redwire. We don’t really throw rocks at anybody if somebody, you know, achieves their objectives, we’re we’re celebrating. And and so we we wanna be able to see when space wins, we win. That being said, I think we’ve been able to get, on on the second thing, a nice share of growth because of the technologies. Right?

I’m not saying that we’re any that we’re faster, but we definitely have a decision process that allows us to move quickly both in terms of human capital, financial capital and then obviously getting that married up with our technologies. But the technologies have been the differentiator. If you look at, for example, our ROSES, I’ll go back to the rollout solar rate, very unique technology that we, that we started with, AFRL, the Air Force Research Labs, to create. We actually then have now commercialized that technology, outside of just the military or defense use. That’s what the US government wants us to do because it brings down the cost of power and space for everybody.

And so I think that collaborative, unique innovation plus, and this is really important, it works. Our stuff works in space, right? All of the roses that are on the ISS unfurled correctly, appropriately, and then are now providing the power the ISS needs. So for us, Ron, it really is about a classic case of innovation. We’re a young company, but we’ve been around decades.

We’ve had equipment on Apollo. So this is not a company that just started. So we have great reputation for heritage and space, but we definitely combine it with that innovation, which both has innovation in terms of technologies for our customers, but also innovation internally where we can, apply capital, both human and financial, fairly quickly.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: Thanks. Another question,

Jonathan Baliff, CFO and Board Member, Redwire: Sure. So we don’t disclose that from a product standpoint. I would say to every single product that I talked about that’s infrastructure involves a certain level of software that, either we’re integrating with our customer software or we’re doing it ourselves. Our, obviously, our our newest acquisition or combination with Edge Autonomy, they have very unique flight software and AI enabled capabilities. But we don’t really divide between the revenues.

It’s really enabler. But I can’t leave this out either. We are looking to do more in that software computer design and other areas of digital engineering. We’re looking to do more of that, and it’s an area that we’re applying a lot of human resources to.

Suji Desilva, Semiconductor Analyst, Roth and Intelligent Systems: With that, I do think we’re out of time. I thank you, Jonathan, for your time. It’s a very exciting time for your company

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