SIDU

Please note this event is being recorded. I would now like to turn the conference over to Adarsh Parekh, Chief Financial Officer. Please go ahead.

Good evening, everyone, thank you for joining us for Sidus Space's First Quarter 2026 Earnings Conference call. Joining us today from the company is Carol Craig, Chairwoman and Chief Executive Officer, and myself, Adarsh Parekh, Chief Financial Officer. During today's call, we may make certain forward-looking statements. These statements are based on our current expectations with respect to the future of our business, the economy, and other events, and as a result, are subject to risks and uncertainties. Many factors could cause actual results to differ materially from the forward-looking statements made on this call. These factors include our ability to estimate operational expenses and liquidity needs, customer demand, supply chain delays, including launch providers and extended sales cycles. We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in the applicable SEC rules and regulations.

Reconciliations to the company's GAAP measures are included in the management's discussion and analysis of financial conditions and results of operations within Sidus's quarterly report on Form 10-Q for the period ended March 31st, 2026. For more information about these risks and uncertainties, please refer to the risk factors in the company's filings with the Securities and Exchange Commission, each of which can be found on our website, www.sidusspace.com. Listeners are cautioned not to put undue reliance on forward-looking statements. The company specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call. At this time, I would like to turn the call over to Carol. Carol, please go ahead.

Good evening, thank you for joining us. I want to start by saying that the first quarter of 2026 reflects continued progress as we translate several years of development into operational capabilities supporting both space and defense missions across multiple domains. Our team has remained focused on disciplined execution, advancing our next-generation satellite builds, expanding our technology platforms, and delivering on customer commitments. For those who may be new to our story, Sidus was founded as an agile and vertically integrated company to deliver high-quality, cost-effective end-to-end space and defense solutions for multi-domain operations, integrating satellite design, manufacturing, and on-orbit operations with advanced computing and data capabilities. Over the past several years, we have made disciplined investments in our technology stack, operating infrastructure, and workforce to support our mission and strengthen our position as a provider of scaled space and defense technology capabilities and data-driven solutions.

We are now seeing those efforts materialize into tangible mission-ready capabilities. Today, Sidus is a proven U.S.-based vertically integrated space and defense technology company delivering end-to-end satellite infrastructure, space and defense-grade hardware, and AI-enabled data platforms. From quarter to quarter, our progress has been supported by continued momentum and expanding activity across the commercial space sector. Most recently, the successful Artemis II mission was splashed down in April, marks the first crewed flight beyond Low Earth Orbit in more than 50 years and reinforced the viability of the cislunar economy, where Sidus is well-positioned. More broadly, there is sustained investment across commercial space, expanding national security priorities and a growing demand for space-based data and resilient compute architectures, which all align with the capabilities we have built.

The market is seeing meaningful investor attention return to the commercial space sector, including a much-anticipated public listing of a major peer, which could be the largest IPO in history. As a nimble small-cap player, we benefit from this rising tide while focusing on specialized opportunities that complement larger players. The first quarter of 2026 saw record investment in the commercial space industry. This strategy is not theoretical. The strongest validation of our technology is not what we say, but what our systems are doing operationally. With multiple satellites on orbit, Sidus is progressing into a new phase, where focus shifts from proving technical capabilities to executing and operating mission-ready platforms for our customers. We successfully launched LizzieSat satellites between March 2024 and March 2025, each one building upon the last and demonstrating increased capability across design, operations, and mission performance.

Together, these missions validate our platform, strengthen our credibility, and support our transition to commercialization and, most importantly, revenue. Turning to our on-orbit fleet, LizzieSat-2, operating an equatorial inclination, remained in commissioning during the quarter with continued system checks and communication passes supporting readiness activities. LizzieSat-3 successfully completed full bus level commissioning and progressed through payload-level commissioning activities during the quarter. The satellite continued to collect AIS data and advanced on-orbit testing of customer payloads, including HEO USA's non-Earth imaging camera. In March, we achieved a meaningful technical milestone with the receipt of initial imagery from the HEO camera aboard LS-3, demonstrating sub 5-meter resolution. This represented an important step in the commissioning process and along the path toward initiating subscription-based data service delivery following completion of commissioning.

Our mission control center, now in its third year of full 24/7 operations, continues to support satellite operations, collection management, and data distribution for our own fleet, with capacity to support additional customer satellite constellations. Throughout the first quarter, we continued to advance Sidus Space's Fortis VPX platform, our modular computing system for challenging and constrained environments. Fortis includes a SOSA-aligned single board computer and a precision navigation and timing module designed for GPS-denied environments. We're currently engaged with multiple commercial customers and defense prime contractors who are evaluating Fortis VPX for satellite payload processing, unmanned systems, and ground-based computing. Converting these evaluations into commercial revenue is a near-term priority for our business development team. These capabilities position us across both commercial and defense markets. Our award under the Missile Defense Agency 10-year SHIELD IDIQ contract remains an important pathway for our satellite, onboard processing, and modular compute capabilities.

SHIELD is part of the broader Golden Dome missile defense strategy, designed to deliver capabilities faster through digital engineering, open systems architectures, and AI where appropriate. National security is a growing priority, with substantial funding with an increased DoD investment in space defense. We are preparing to pursue task orders on this contract, and our strengthened balance sheet positions us competitively for these high-value national security programs. We also expanded our existing agreement with Lonestar Data Holdings to build and deliver an additional StarVault orbital data storage payload. This expansion reflects Lonestar's continued progress towards scaling its orbital data storage architecture. Leidos is currently building the first StarVault payload, which is scheduled to launch no earlier than spring 2027 aboard LS-4. Looking at the year ahead, our strategic priorities in the near term are focused on two of our four areas: compute hardware and satellites.

Our operational execution remains focused on continuous improvement, disciplined resource alignment, and scaling capabilities with a structured and intentional go-to-market approach to drive customer adoption and revenue generation. While we have been intentional and disciplined in how we deploy capital, we have built a full technology stack spanning hardware, software, and data, primarily through internal development, complemented by a small, highly targeted acquisition of Exo-Space in 2023, which formed the foundation of our Orlaith AI ecosystem. Unlike some competitors that pursued multi-domain capability through large debt finance acquisitions, we built these capabilities with a disciplined approach, leveraging a decade and a half of heritage experience while maintaining a clean balance sheet and retaining full control over our intellectual property. With regard to our satellite platform, one of the key advantages of our LizzieSat architecture is that it is software-defined, meaning capabilities are not fixed at launch.

Over the past year, we've demonstrated this advantage by deploying autonomous navigation software and commissioning FeatherEdge 100i entirely on orbit, delivering capability upgrades to an operational asset without additional hardware or launch costs. This model allows us to extend mission utility and adapt to changing requirements over time while maintaining a more efficient approach to capability upgrades. In parallel, we continued to advance our next-generation satellite builds, including LS-4 and LS-5, which are being developed as software-defined platforms, incorporating enhanced capabilities such as laser communications and software-defined hyperspectral imaging. This architecture is designed to provide customers, including international partners such as the Netherlands Organisation, or TNO, with the ability to adapt mission requirements on orbit. During the first quarter, we achieved an integration milestone with Maris-Tech, whose advanced edge computing and video processing payload is scheduled to fly on LS-4.

We also formalized our strategic collaboration with Simera Sense during the quarter through a memorandum of understanding to advance AI-enabled hyperspectral imaging focused on enabling near real-time intelligence-driven Earth observation capabilities. During the quarter, we also strengthened our governance with the appointment of Kelle Wendling to our board of directors. Kelle brings more than three decades of executive leadership and government contracting experience across space systems, ISR, and FAA markets. Her perspective will be valuable as we scale our space and defense offerings. Building on the capital raises completed during 2025, we continue to invest in key technology development, especially related to compute hardware, including our dual-use Fortis VPX product line, while maintaining a disciplined approach to operating expenses as we scale.

Subsequent to quarter end, we announced continued advancements to our Fortis through a strategic collaboration with Microchip Technology Inc. Microchip's space-grade flight-proven semiconductor technologies allow us to develop systems faster. They reduce integration complexity and shorten the path from design to mission-ready hardware. As we move forward, this operational transition informs how we think about scalability, margin durability, and capital efficiency. With that, I'll turn the call over to Adarsh for our financial review.

Thank you, Carol. At Sidus, we continue to build a scalable, vertically integrated company across space technology and artificial intelligence. Our focus remains on operational excellence, rapid innovation, and delivering cost-effective, high-impact solutions for our customers. Our investments to date have centered on expanding our satellite fleet, advancing innovation, and implementing a robust ERP system to support scale and profitability. Momentum from full year 2025 carried into the first quarter of 2026, which continues to reflect both our transition to commercialization of dual-use multi-domain products and the near-term financial impacts of scaling a deep tech space-based enterprise. Our rich space and defense heritage positions us to take advantage of opportunities across multiple sectors with a combined focus on commercial space innovations and national defense priorities. Let's review our results for the three months ended March 31st, 2026.

Total revenue for the first quarter of 2026 was approximately $359,000 compared to $238,000 in the first quarter of 2025. This reflects an increase of 51% and was primarily driven by the addition of new customer contracts, including Lonestar Data Holdings and Teledyne Marine. The impact of milestone-based revenue recognitions also influenced year-over-year performance and comparison. Cost of revenue for the first quarter of 2026 was $1.4 million, a decrease of 25% from $1.9 million in the first quarter of 2025. The decrease was primarily driven by lower satellite and related software depreciation expense and improved cost discipline in the manufacturing side of our business.

Gross loss for the first quarter of 2026 was $1.1 million compared to a gross loss of $1.6 million in the first quarter of 2025, an improvement of 36%. The improvement was driven primarily by higher revenue and lower satellite and related software depreciation costs. When adding back depreciation included in cost of revenue, gross loss for the quarter was $531,000 compared to $792,000 in the first quarter of 2025. Selling general and administrative expenses for the first quarter of 2026 were $4.4 million, essentially flat compared to $4.4 million in the first quarter of 2025. We view this as a meaningful indicator of cost discipline.

We have held operating expense effectively constant while continuing to support a broader scope of programs, mature on-orbit operations, and an expanded sales and business development effort. To provide a broader view of our performance, we also report adjusted EBITDA, a non-GAAP measure we use internally to guide strategic decision-making. Adjusted EBITDA loss for the first quarter of 2026 was $4.6 million compared to $4.7 million in the first quarter of 2025, essentially flat period-over-period. The reconciliation, including interest, depreciation, and amortization, fundraising costs, severance, and equity-based compensation, is included in our quarterly report on Form 10-Q. Net loss for the first quarter of 2026 was $5.2 million compared to net loss of $6.4 million in the first quarter of 2025, an improvement of $1.2 million or 19%.

The improvement also reflects a swing in other income and expense to net income this quarter, primarily driven by the elimination of asset-based loan expense following the payoff of the loan in January and by increased interest income from cash holdings. Turning to the balance sheet, we entered 2026 with $43.2 million in cash and no outstanding term debt, a meaningful distinction in an industry where many peers continue to carry substantial debt obligations and the associated interest burden. As of March 31st, 2026, we had $27.3 million in cash. During the first quarter, we used cash to support operations, ongoing satellite production, and the full repayment of our asset-backed line of credit in January, which has eliminated the associated interest expense going forward and further simplified our capital structure.

Subsequent to quarter-end, on April 21st, 2026, we closed a best efforts registered direct offering generating gross proceeds of $58.5 million. The company intends to use the net proceeds for working capital and general corporate purposes. This offering materially strengthens our liquidity position and gives us the financial flexibility to deploy capital toward optimizing growth, mitigating risk to critical milestones, and driving operating efficiencies as we scale. Taken together, we believe the capital we have raised, combined with the operating discipline reflected in this quarter's results, materially strengthens our balance sheet and reduces our near-term financing risk. This gives us the financial flexibility to execute on our growth strategy and continue investing in platforms and product lines we expect to drive re-recurring revenue in the periods ahead.

As we move forward, we continue to manage cash conservatively while making strategic investments in our next-generation satellite builds and high-growth product lines. We have implemented meaningful cost reduction activities and operating efficiencies to support long-term profitability, and we remain focused on driving sustainable growth in the periods ahead. With that, I'll hand the call back to Carol for closing remarks.

Thank you, Adarsh Parekh. Each capital raise we've undertaken has been guided by a clear purpose, to strengthen the balance sheet, fund the technology and development required to support our growth, and position the company to compete for the larger commercial and defense programs that we believe represent the most meaningful long-term opportunities. Sidus has raised materially less capital than many public peers while achieving milestones that include satellite launches, on-orbit operations, vertically integrated manufacturing, proprietary computing and AI architectures, and a growing patent portfolio. Importantly, we achieved these milestones through organic development alone, building, proving, and retaining ownership of every capability in our portfolio. Following the recent successful raise of significant capital, we are now positioned to evaluate and potentially pursue strategic investments that could strengthen our core capabilities, expand our technology stack, and accelerate market access across key defense and commercial segments.

Any such effort will be guided by a disciplined focus on economic and merits and clear pathways to revenue growth and margin expansion. The capital we've raised also enables accelerated product development and expanded customer pipeline and the pursuit of larger contracts aligned with our growth strategy. As Sidus continues to strengthen its balance sheet, expand its operational footprint, and execute against a growing number of strategic opportunities across the space and defense sectors, the financial and operational complexity of the business has increased significantly. The company is entering its next phase of growth with greater emphasis on scalable financial operations, capital market strategy, long-term planning, government contracting infrastructure, and support for a multifaceted commercial and defense business model. Looking ahead, our focus is on translating the platforms and capabilities we have built into recurring revenue and durable margins. We remain committed to disciplined capital allocation, cost discipline, and execution.

I wanna personally thank our team, our partners, and our investors for your continued support and confidence. Thank you again for joining us on the call today. We look forward to updating you on our progress as the year continues. Thank you.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Please note this event is being recorded. I would now like to turn the conference over to Adarsh Parekh, Chief Financial Officer. Please go ahead.

Good evening, everyone, and thank you for joining us for Sidus Space's fourth quarter and full year 2025 earnings conference call. Joining us today from the company is Carol Craig, Chairwoman and Chief Executive Officer, and myself, Adarsh Parekh, Chief Financial Officer. During today's call, we may make certain forward-looking statements. These statements are based on our current expectations with respect to the future of our business, the economy, and other events, and as a result, are subject to risks and uncertainties. Many factors could cause actual results to differ materially from the forward-looking statements made on this call. These factors include our ability to estimate operational expenses and liquidity needs, customer demand, supply chain delays, including launch providers, and extended sales cycles. We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in the applicable SEC rules and regulations.

Reconciliations to the company's GAAP measures are included in the MD&A of financial conditions and results of operations within Sidus's full year 2025 10-K. For more information about these risks and uncertainties, please refer to the risk factors in the company's filings with the Securities and Exchange Commission, each of which can be found on our website, www.sidusspace.com. Listeners are cautioned not to put any undue reliance on forward-looking statements, and the company specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call. At this time, I would like to turn the call over to Carol. Carol, please go ahead.

Thank you, Adarsh. Good evening, everyone, and thank you for joining us. I wanna start by saying that 2025 was a productive year for Sidus, and I'm proud of the progress our team has made as we translate several years of development into operational capabilities supporting both space and defense missions across multiple domains. For those who may be new to our story, Sidus was built with a clear mission to deliver end-to-end space and defense solutions, integrating satellite design, manufacturing, and operations with advanced computing and data capabilities. Over the past several years, we've made deliberate investments in our technology, infrastructure, and talent to support that mission, and we're now seeing those efforts materialize into tangible mission-ready capabilities. As a result, today Sidus is a proven U.S.-based, vertically integrated space and defense technology company delivering end-to-end satellite infrastructure, space- and defense-grade hardware, and AI-enabled data platforms.

Over the past four years, since we became a public company through a traditional IPO rather than a SPAC, the landscape has evolved considerably. At that time, our objective was clear, to transition from a predominantly government-focused contract manufacturing business into a diversified space and defense technology company positioned to capitalize on the rapidly expanding commercial space ecosystem while developing capabilities that support both commercial and defense missions. Since then, the geopolitical environment has shifted meaningfully, underscoring the growing importance of space as a national security domain. At the same time, as a smaller company operating with disciplined resources, we have remained focused on advancing differentiated high-performance technologies and integrated capabilities that few others are able to deliver.

Our vision is to be a leading innovator and provider of space and defense technologies, infrastructure, and actionable insights, and our mission is to deliver cost-effective solutions that enable multi-domain operations through agility and vertically integrated capabilities. This strategy is not theoretical. The strongest validation of our technology is not what we say, but what our systems are doing operationally. With multiple satellites on orbit, Sidus is moving into a new phase where the focus shifts from proving technical capability to executing and operating mission-ready platforms for customers. We launched three LizzieSat satellites between March 2024 and March 2025, each building upon the last and demonstrating increasing capability across design, operations, and mission performance. Together, these missions validate our platform, strengthen our credibility, and support our transition into the next phase of commercialization.

An important part of our strategy is that our satellites are company-owned and company-funded, with multiple customers contributing revenue before and after launch. Unlike others that may depend primarily on government contracts to finance and build their satellites, we made a deliberate decision to create a Sidus-owned platform, including the underlying intellectual property that can support commercial, civil space, and defense customers on a single satellite. This dual-use multi-mission model creates diversified revenue streams, broadens customer opportunities, and supports a more resilient business model in an increasingly dynamic geopolitical environment. Another important differentiator is that we intentionally designed our satellites to serve as both development and production platforms. From the beginning, our goal was to build a robust, redundant satellite architecture capable of testing and maturing technologies while simultaneously supporting customer missions, beginning with the very first spacecraft.

LizzieSat-1 successfully launched and established communications, enabling us to test our bus structure, radios, and other internal payloads. We also successfully executed the requirements for a NASA mission, which led to a follow-on contract for additional support on LizzieSat-1. Equally important, LizzieSat-1 enabled full commissioning of our mission control center, marking a shift from development infrastructure to active mission operations. LizzieSat-1 completed its mission, and we are therefore beginning the process of dispositioning. However, we will continue to track her location for situational awareness and orbital monitoring. LizzieSat-2 was launched in equatorial inclination and remains in the commissioning phase. We continue to receive signals from the satellite while working toward establishing consistent and regular communication passes as part of the normal commissioning process. The equatorial inclination was intentional, with the goal to test and strengthen our ability to operate satellites across very different orbital environments.

Equatorial satellite commissioning is more challenging than polar due to the limited ground station access, resulting in fewer communication windows and longer timelines. The reason we chose an equatorial orbit was for its long-term advantages, enabling repeated coverage of high-value regions near the equator with fewer satellites. Lastly, LizzieSat-3 has completed full bus level commissioning, including successful validation of a new autonomous guidance navigation and control software, achieving pointing accuracy of less than 30 arc seconds. With commissioning complete, LizzieSat-3 is now supporting recurring customer payload operations, including near real-time maritime data through its AIS sensor and on-orbit imaging through HEO USA's non-Earth imaging camera payload. Taken together, these capabilities reflect a deliberate evolution in Sidus's role. We are increasingly expanding from discrete mission delivery toward operating integrated platforms that support sustained multi-domain operations for customers.

Building on this operational foundation, we continue to advance our onboard computing and AI capabilities through our Fortis VPX platform, including a SOSA-aligned single board computer and a PNT card designed for GPS-denied environments. Fortis is a ruggedized modular computing system developed to perform data processing in challenging and constrained environments from seafloor to space. By integrating Fortis with our software-defined satellite architecture and flight-proven AI capabilities, Sidus is enabling more data to be processed closer to where it's collected. This reduces reliance on centralized ground infrastructure, improves responsiveness, and supports mission execution in environments where bandwidth, latency, and connectivity may be limited. This effort reflects our broader focus on developing practical, deployable technologies that align with both defense and commercial needs.

In parallel, we're working with commercial customers and defense prime contractors, along with systems integrators, to evaluate Fortis VPX for operational use cases, including satellite payload processing, unmanned systems, and ground-based computing deployed at operational sites. Our focus is converting these evaluations into long-term programs and support agreements that can drive scalable and predictable revenue as mission needs expand. The continued growth in government spending across defense and space supports demand for our capabilities, and a key focus area for us is our recent award under the MDA's 10-year SHIELD IDIQ contract. Our work over the past several years has positioned us to participate in programs of this scale and complexity. The SHIELD program is part of the broader Golden Dome missile defense strategy, which is focused on developing more resilient layered protection across air, missile, space, cyber, and other operational domains.

The contract vehicle is designed to enable faster delivery of capabilities by incorporating approaches such as digital engineering, open systems architectures, and, where appropriate, AI and machine learning. For Sidus, this award provides it access to a flexible procurement pathway aligned with evolving defense requirements, and it reflects the increasing emphasis on collaboration across primes, emerging companies, and research institutions. Our defense strategy is aligned with these types of large-scale programs. We're focused on areas where our capabilities and satellite platforms, onboard processing, and modular compute systems can contribute to applications such as persistent sensing and real-time data processing. Our vertically integrated model allows us to move from design through deployment in a more streamlined manner, which is increasingly important as timelines continue to compress. Another strategic area of focus for us is lunar.

We view the lunar economy as an emerging ecosystem rather than a single program, requiring scalable technologies and partners capable of moving quickly. Our approach is to align our capabilities with that direction, supporting both government and commercial missions as activity beyond low Earth orbit continues to expand. Expanding beyond LEO, we made progress across our lunar and GEO initiatives. We signed an agreement to integrate the Lonestar commercial pathfinder mission onto LizzieSat-5, completed a systems requirement review and mission kickoff with an initial milestone payment received, introduced LunarLizzie, our next generation lunar spacecraft concept, and executed an MOU with a partner to support development of a GEO platform. Our lunar strategy is aligned with broader national space priorities that emphasize speed, commercial partnership, and operational capability beyond LEO.

Recent leadership perspectives, including those advanced by NASA Administrator Jared Isaacman, reflect a shift toward a more commercially enabled and execution-focused approach to lunar and deep space missions. This direction closely aligns with our approach to building scalable, commercially driven space and defense capabilities. Our focus on vertically integrated satellite platforms, onboard computing, and adaptable software-defined systems positions us to support elements of the broader cislunar architecture, including communications, data relay, and mission-enabling infrastructure. This approach prioritizes leveraging commercial innovation, shortening development timelines, and building sustainable infrastructure through public-private partnerships while maintaining a focus on operational readiness, repeatability, and cost efficiency over time. As we move into 2026, our strategy and focus are on accelerating commercialization and expanding in defense markets through our technology platforms while reducing reliance on lower-margin contract manufacturing and prioritizing scalable higher-margin products.

Diversification remains central to our approach, and our company remains agile in a rapidly evolving industry. While we have been intentional and disciplined in how we deploy capital, we have built a full technology stack spanning hardware, software, and data entirely through organic development, not acquisition. Unlike others that pursued multi-domain capabilities through large debt-financed acquisitions, we built these capabilities from the ground up, leveraging a decade and a half of heritage experience while maintaining a clean balance sheet and retaining full control over our intellectual property. As defense priorities continue to shift toward integrated multi-domain operations, we intend to aggressively pursue programs aligned with these needs, including missile defense, space-based sensing, and resilient communications architectures. By combining our satellite platforms, onboard AI, and modular compute capabilities, Sidus is well-positioned to support next-generation defense missions and capture a larger share of this evolving market.

One of the key advantages of the LizzieSat architecture is that it is software-defined, meaning capabilities are not fixed at launch. This allows the satellite to be updated, reconfigured, and enhanced through software while in orbit. Over the past year, we've demonstrated this by deploying autonomous navigation software and commissioning FeatherEdge 100i entirely on orbit, delivering capability upgrades to an operational asset without additional hardware or launch costs. This model allows us to extend mission utility and adapt to changing requirements over time while maintaining a more efficient approach to capability upgrades. As we look toward the next evolution of AI infrastructure, including orbital and distributed data architectures, we see a logical extension of capabilities that we've already demonstrated. Our on-orbit experience with software-defined satellites, combined with proven onboard AI processing and edge computing hardware, provides a foundation for supporting data processing closer to where it's generated.

Recent announcements from Nvidia and others point to a broader shift toward deploying high-performance compute beyond traditional data centers, including in space. This direction is consistent with how we've designed our systems, integrating software-defined platforms, reconfigurable payloads, and onboard processing to enable real-time data handling. This reduces reliance on ground infrastructure and increases operational flexibility. Our VPX-based computing systems, along with our flight-proven AI hardware and software, position us to support elements of this distributed model across both space and terrestrial environments. These systems are designed to operate in constrained and contested environments, which is increasingly relevant as data processing moves closer to the edge. From a broader perspective, our vertically integrated approach, spanning satellite platforms, onboard compute, and mission operations, allows us to participate in multiple layers of this emerging ecosystem.

As investment in the next-generation AI infrastructure continues to grow, particularly in defense and national security applications, we are aligning our technology roadmap with areas where that resilience, autonomy, and real-time decision-making are required. We've strengthened and refocused our sales organization to prioritize high-value opportunities across both commercial and defense markets, with an emphasis on programs that align with our core technology platforms and offer the potential for longer-term repeatable revenue. As a result, we're actively engaged with both commercial and Department of Defense customers to address growing demand for cost-efficient, rapidly deployable satellite platforms supporting communications, imagery, and intelligence missions. In parallel, we continue to advance our next-generation satellite builds, including LizzieSat-4 and LizzieSat-5. LizzieSat-4 and LizzieSat-5 are being developed as a software-defined platform incorporating capabilities such as laser comm and software-defined hyperspectral imaging.

This architecture is designed to provide customers, including international partners such as the Netherlands Organisation, or TNO, with the ability to adapt mission requirements on orbit. This flexibility allows for adjustments to sensing, data collection, and processing priorities over time, supporting both commercial and defense use cases as needs evolve. LizzieSat-4 also includes integration of the Lonestar payload, further expanding its mission profile. Our Mission Control Center, now in its third year of full 24/7 operations, continues to support satellite operations, collection management, and data distribution from both our own fleet and third-party customers, reinforcing our ability to deliver end-to-end mission support. We also entered into a strategic collaboration with Simera Sense to advance AI-enabled hyperspectral imaging focused on enabling near real-time, intelligence-driven Earth observation and situational awareness capabilities.

To support these initiatives, we executed capital raises to fund key technology development, including our dual-use Fortis VPX product line, while also identifying operational efficiencies to reduce SG&A and maintain cost discipline as we scale. As we move forward, this operational transition informs how we think about scalability, margin durability, and capital efficiency. Now others will walk through how this shift toward owned and operated platforms is reflected in our financial results and outlook.

Thank you, Carol. At Sidus, we continue to build a scalable, vertically integrated company across space technology and artificial intelligence. Our focus remains on operational excellence, rapid innovation and delivering cost-effective, high-impact solutions for our customers. Our investments to date have centered on expanding our satellite fleet, advancing innovation, and implementing a robust ERP system to support scale and profitability. Momentum from 2024 carried through full year 2025, which reflects both our transition to commercialization of dual-use multi-domain products and the near-term financial impacts of scaling a deep tech space-based enterprise. During 2025, we continued our progress in establishing Sidus Space as an innovative space and defense technology company. Our rich space and defense heritage positions us to take advantage of opportunities across multiple sectors with a combined focus on commercial space innovation and national defense priorities.

Let's review our results for the year ended December 31, 2025. Total revenue for the full year 2025 was approximately $3.4 million compared to $4.7 million in full year 2024. While this reflects a decrease of about $1.3 million or 28%, the change aligns with our strategic shift away from legacy contract work toward higher value commercial space-based and AI-driven solutions. This repositioning is intentional and expected to generate more sustainable recurring revenue in future periods. The impact of milestone-based revenue recognition also influenced year-over-year performance and comparison. Cost of revenue was approximately $9.1 million, a 48% increase from $6.1 million in full year 2024.

Key contributors included a $2.1 million increase in depreciation tied to satellite and software investments, reflecting the first full year of LizzieSat operations, a changing contract mix requiring greater material and labor inputs, ongoing global supply chain pressures impacting manufacturing operations. Gross loss for the year was approximately $5.7 million compared to a loss of about $1.5 million in full year 2024. This increased gross loss reflects increased depreciation, which is non-cash and directly tied to recent investments that position us for future revenue generation, the transition away from legacy high-margin contracts as we focus on long-term value-added offerings, a shift in contract structure, which is expected to yield greater returns in future periods.

When adding back depreciation, including in cost of revenue, gross loss for the year was approximately $1.7 million compared to a profit of approximately $453,000 in full year 2024. Selling, general, and administrative expenses totaled $22.3 million compared to $14.2 million in the prior year. This $8.1 million increase supported key growth initiatives, including strategic headcount additions to support scale and expanded employee benefits to remain competitive, equity-based compensation and performance-based bonuses initiated during 2025, increased mission operations expenses to support our growing satellite fleet, infrastructure investments in software tools, and it also included a $4.5 million impairment of LS-1 and related assets, as well as depreciation expenses and severance costs, as described further in the notes to the consolidated financial statements.

To provide a broader view of our performance, we also report adjusted EBITDA, a non-GAAP measure we use internally to guide strategic decision-making. Adjusted EBITDA loss for the full year 2025 was $17.3 million compared to $12.9 million in full year 2024, reflecting ongoing investment in scaling our platform. The reconciliation table, including interest depreciation, fundraising, severance, equity-related expenses and impairments, is included in our annual report on Form 10-K. Net loss for the year was $29.5 million compared to $17.5 million in full year 2024. This increase is primarily tied to strategic investments in infrastructure, personnel and operational capacity. The $4.5 million LS-1 impairment charge and non-cash depreciation related to our expanding satellite fleet.

Turning to the balance sheet, as of December 31, 2025, Sidus had $43.2 million in cash compared to $15.7 million as of December 31, 2024. During 2025, we completed multiple capital raises totaling approximately $53.3 million in net proceeds from the issuance of approximately 47.1 million shares of Class A common stock. Notably, we enter 2026 with no outstanding term debt, a meaningful distinction in an industry where many peers continue to carry substantial debt obligations and the associated interest burden. As we move forward, we continue to manage cash conservatively while making strategic investments in our next-generation satellite builds and high-growth product lines. During 2025, we implemented meaningful cost reduction activities and operating efficiencies to support long-term profitability, and we remain focused on driving sustainable growth in the year ahead.

With that financial context, I'll hand the call back to Carol for closing remarks.

Thank you, Adarsh. Before I close, I wanna address a couple of questions we've received from investors and analysts, particularly related to our stock performance. We recognize the concern, and we view recent movement as the result of broader market conditions, volatility across small cap and space technology sectors, and the timing of revenue as we transition the business. We've seen similar patterns across our peer group, particularly among companies moving from development into commercialization. From our perspective, the priority remains execution. We are focused on advancing a more scalable product and platform-driven model anchored by our LizzieSat satellite fleet, software-defined capabilities, and Fortis VPX command and data handling systems. At the same time, we have strengthened our sales organization and are prioritizing opportunities that align with larger programs, including defense initiatives like MDA SHIELD, as well as commercial applications.

We're also maintaining a disciplined approach to capital allocation and cost structure as we move through this transition. Ultimately, our objective is to build a more durable business with higher margin, repeatable revenue streams. As we continue to execute, demonstrate capability in orbit, and convert pipeline into contracted programs, we believe that progress will be reflected over time. As we move forward, we remain focused on execution, cost discipline, and innovation, and we are advancing with greater confidence than at any point in our history. Revenue in the period was impacted by the timing of legacy program completions and our transition toward product and platform-driven revenue streams, while maintaining a disciplined focus on the programs that offer the greatest long-term value. Operating in a highly competitive industry while using significantly less capital than many peer companies presents both constraints and advantages.

Remaining lean requires disciplined prioritization and difficult trade-offs, but it also drives technical focus, speed of execution, and operational accountability. Sidus has intentionally avoided the excesses that characterize many space SPAC-era entrants, choosing instead a staged capital approach tied to milestone completion rather than speculative scaling. At the end of 2025, to ensure uninterrupted execution and reduce structural risk, we took proactive steps to strengthen our balance sheet. The approximately $41 million raised at the end of December was not intended to fund indefinite operating losses, but to improve liquidity, reduce financing friction, evaluate more favorable debt structures, and lower our overall cost of capital as we enter the commercialization phase. This capital provides runway stability and optionality, allowing management to focus on execution rather than survival. We fully acknowledge that equity financing creates dilution. That impact is real, and it is not dismissed.

However, dilution must be evaluated relative to what it enables. Our objective is not continued reliance on equity markets, but the conversion of validated technology into repeatable revenue streams, margin expansion, and operating leverage. Per share value is ultimately restored through execution, not commentary. Sidus has raised material less capital than many public peers while achieving milestones that include satellite launches, on-orbit operations, vertically integrated manufacturing, proprietary computing and AI architectures, and a growing patent portfolio. Importantly, we achieve these milestones through organic development alone, building, proving, and retaining ownership of every capability in our portfolio. Looking ahead, management is focused on improving capital efficiency with each successive deployment and product cycle, reducing incremental capital required per platform, and accelerating the transition from build to revenue as commercialization scales. These capabilities are now moving from demonstration into deployable products and services.

Here are key areas to watch over the next 12 to 18 months. LS-4 and LS-5 are in production as software-defined satellites with advanced onboard AI processing and Fortis VPX, enabling on-orbit data processing, autonomy, and mission adaptability. The Fortis VPX platform is beginning customer deployment, marking a key step in commercializing ruggedized multi-domain compute solutions. We're increasing our focus on defense opportunities as demand grows and the convergence between commercial space and national security accelerates. Our collaboration with Simera Sense and other international agencies and partners is advancing AI-enabled software-defined hyperspectral imaging to support more responsive and intelligence-driven earth observation. Together, all these efforts reflect our continued focus on scaling advanced, adaptable technologies across both commercial and defense markets. I wanna personally thank our team, our partners, and our investors for your continued support and confidence. We appreciate you taking the time to join us today.

We remain laser-focused on execution, cost discipline, and innovation, and look forward to the next phase of growth for both Sidus and the broader space industry. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.