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Kleos Space Accelerates towards EBITDA

Kleos Space

Highlights:

  • Fully funded to forecasted EBITDA positive status in mid ‘22
  • Kleos processing system delivering exceptionally accurate geolocation capability, locating low power transmitter to within 300 metres
  • Converting the global pipeline & growing by 30% to over 220 qualified deals including:
    • 52 Guardian LOCATE data evaluation contracts in place representing U$4.7m ARR opportunity post trial periods at lowest subscription level
    • 5 contract proposals in negotiation representing U$2.9m ARR
  • Second satellite cluster, progressing through in-orbit commissioning
  • Third satellite cluster, on track to launch January 2022 on SpaceX Falcon 9
  • Build and launch contracts signed for fourth cluster, Observer Mission (KSF3), targeting mid-2022 launch
    • Adding up to a further 119 million km2 collect capacity per day over key areas across multiple payloads.

Kleos Space (ASX: KSS, Frankfurt: KS1), a space-powered Radio Frequency Reconnaissance data-as-a-service company, provides the following update for the quarter ending 30 September 2021 (Q3 2021).

Commenting on the Company’s September quarter progress, Kleos Space CEO Andy Bowyer said:

Kleos continues to commercialise its geolocation data while preparing for future growth, rapidly building its satellite constellation to increase data volume and value and scaling its data-as-a-service operations to meet growing customer demand.

Successful testing of our data collection and processing systems with early adopter customers has validated and de-risked our technology. Evaluation of our first data products by subscribers is converting to repeating subscription revenues.

We are the first company in the World to fly clusters of four satellites, with data from our Scouting Mission satellites delivering unprecedented, proven, precision geolocation capability of very low power transmitters to within 300 metres

The team has built and proven a World leading technology producing unique and valuable data and a large, growing customer base ready to buy it. Increased data volumes are converting the customer pipeline from evaluation to revenue generation, bringing exceptional revenue opportunities in the coming quarters.

COMMERCIAL PROGRESS

Kleos’ precision geolocation data is sold as a service (DaaS) to government and commercial entities around the Globe on a volume basis i.e. million km2/month collected

In Q3 the Company has grown the customer base, with the geographically diverse pipeline comprising:

  • 223 qualified deals (30% growth from Q2)
    • 74 Defence and security entities
    • 12 Resellers
    • 137 Integrators
  • 71 signed agreements with resellers, integrators, and end users
  • 52 signed evaluation contracts for Guardian LOCATE data in place representing U$4.7m ARR opportunity post trial periods (2 months) at lowest subscription level (US$7500/month)
  • 15 customers currently reviewing data
  • 5 contract proposals in negotiation representing U$2.9m ARR

Kleos is moving toward repeating revenues from Q3 to Q4 2021, and is now onboarding subscribers with its initial Scouting Mission data, increasing revenue contribution from existing subscribers and over time as higher-value datasets from additional and more capable satellites become available. Subscribers will be able to access data collected by the Scouting Mission and Vigilance Mission satellites in Q4, with each new satellite launch increasing not just the volume but also the value of Kleos’ data. Kleos’ business model has a low operational cost base, enabling the Company to generate scalable recurring revenue and achieve EBITDA positive status before the end of H2 2022.

Scouting Mission (KSM1):

Kleos was proud to release a white paper that described our geolocation capabilities during the GEOINT 2021 conference. The whitepaper included descriptions of the algorithms Kleos uses to geolocate transmitters along with information about the cluster formation and an example of geolocation data captured during the commissioning of the KSM1 payloads. Full production level, processed data from the cluster is available via the Kleos API in Q4 fulfilling customer orders and starting contractual revenue booking in 2021.

Vigilance Mission (KSF1):

Commissioning activity on KSF1 is progressing, with satellite hardware check out proceeding successfully. The improvements being made to flight software used on KSF1 satellites is applicable to KSF2 & KSF3 missions, therefore the work currently being performed reduces commissioning times for those future missions.

Patrol Mission (KSF2):

The assembly, integration, and test of the four satellites of the KSF2 cluster continues as planned. The satellites will be ready to launch on the Transporter-3 SpaceX mission scheduled to launch in January 2022.

Observer Mission (KSF3):

Contracts for the construction and launch of the next cluster of satellites have been signed. The satellites are targeting a mid-2022 launch.

OUTLOOK

Kleos remains focused on continuing to grow subscribers by the end of the year and delivering recurring revenue.

Kleos has a large addressable market, providing a cost-effective intelligence, surveillance, and reconnaissance (ISR) solution for global economic, societal and security challenges. Its global activity-based data improves the detection of illegal activity, including drug and people smuggling, illegal fishing, border challenges and piracy.