Executive Summary / Key Takeaways

• Pioneering In-Space Infrastructure: Momentus is establishing itself as a leader in the nascent yet rapidly growing in-space transportation and servicing market, leveraging its proprietary water plasma propulsion (MET) and innovative technologies like TASSA and RPO to offer differentiated, cost-effective solutions for satellite delivery, hosted payloads, and future orbital services.
• Strategic Pivot to Government & Satellite Buses: The company is aggressively pursuing the substantial U.S. government and defense markets with its M-1000 satellite bus and specialized services, alongside expanding commercial contracts, aiming to secure larger, more stable revenue streams and capitalize on regulatory tailwinds like de-orbiting mandates.
• Acute Liquidity Challenges: Despite recent capital raises totaling over $20 million since Q3 2023, Momentus faces significant financial pressure, evidenced by a "going concern" warning, an accumulated deficit of $420.6 million, and minimal cash reserves as of June 30, 2025, necessitating continuous capital infusion for operational continuity and scaling.
• Operational Efficiencies & Technological Maturation: Momentus demonstrates improving operational execution, with Vigoride vehicle assembly times and non-conformance rates significantly decreasing, and its core MET thruster achieving high Technology Readiness Levels, validating its in-space capabilities and laying the groundwork for future reusable vehicle economics.
• High-Stakes Competitive Environment: While Momentus possesses unique technological advantages in in-orbit flexibility and power, it contends with larger, more financially stable competitors like Rocket Lab (RKLB) and Maxar Technologies (MAXR), requiring sustained innovation and successful contract execution to convert its technical prowess into market share and profitability.

The New Frontier of Space Infrastructure

Momentus Inc. (NASDAQ:MNTS) stands at the forefront of a transformative era in space, positioning itself as a critical enabler of the burgeoning commercial space economy. The company's core business revolves around providing satellites, satellite buses, and in-space infrastructure services, including transportation, hosted payloads, and advanced orbital services. At the heart of its offering is an innovative, space-proven water plasma-based propulsion system, designed to make space operations more efficient, safe, and environmentally friendly. This strategic focus places Momentus squarely within a global space economy that grew 8% to $546 billion in 2022, with the commercial segment alone reaching over $427 billion. The demand for in-space transportation is projected to double from $2 billion to $4 billion by 2025, underscoring the vast market opportunity Momentus aims to capture.

The company's journey began in 2017, culminating in its public debut in August 2021 through a merger with Stable Road Acquisition Corp. This pivotal event injected $247.3 million in gross proceeds, providing the initial capital for its ambitious plans. Early on, Momentus faced the challenge of a strained relationship with the U.S. Defense Department, a hurdle it has diligently worked to overcome. Its operational history is marked by a series of Vigoride Orbital Service Vehicle (OSV) missions, starting with Vigoride 3 in May 2022, followed by Vigoride 5 in January 2023, and Vigoride 6 in April 2023. These missions have been instrumental in deploying customer satellites and demonstrating the company's core technologies in the harsh environment of space.

Momentus's overarching strategy is to leverage this growing flight heritage to expand its product offerings, particularly targeting the lucrative U.S. government and defense sectors, and to develop advanced reusable in-space technologies. The company aims to reduce operational costs, enhance mission capabilities, and ultimately achieve profitability by scaling its services in a market increasingly driven by the proliferation of satellites and new regulatory mandates, such as the FCC's requirement for de-orbiting satellites within five years of mission conclusion. This regulatory shift alone is expected to create a multi-billion dollar market for de-orbiting services, with thousands of satellites needing removal annually by the end of the decade.

Technological Edge: Powering In-Orbit Innovation

Momentus's competitive differentiation is deeply rooted in its innovative technological stack, which promises to redefine efficiency and capability in space. The cornerstone of its propulsion system is the Microwave Electrothermal Thruster (MET), a water plasma-based engine for which Momentus holds two patents. Unlike conventional chemical rockets, the MET uses microwave energy to heat water propellant, generating thrust. This environmentally friendly approach offers significant advantages in safety and handling.

The MET has demonstrated remarkable performance in space. It has successfully operated at full power across the range of durations required for operational missions, achieving dual thruster firings that enable greater efficiency and quicker orbit transfer times. Cumulatively, the MET has logged approximately 230 minutes of firing time, contributing to orbital raises of the Vigoride OSV by about 6.5 kilometers. This in-space validation has elevated the MET to Technology Readiness Level 9, the U.S. Department of Defense's highest TRL, signaling its readiness for full operational deployment. For investors, this means a proven, differentiated propulsion system that can deliver satellites to precise, custom orbits and support power-intensive hosted payloads, potentially commanding premium pricing and expanding market opportunities, particularly with government clients seeking reliable, advanced solutions.

Beyond propulsion, Momentus is developing other critical technologies. The Tape Spring Solar Array (TASSA), a prototype of which was launched on Vigoride 6 in April 2023, represents a significant step towards cost reduction and improved power generation. This flexible solar cell technology is designed for multiple deployments and retractions, is configurable to varying lengths, and utilizes radiation-resistant, self-annealing thin-film cells. Initial testing has demonstrated most major performance requirements. Momentus has secured a patent for TASSA and projects it could reduce Vigoride's recurring production cost by up to 10% and lead times by several months. The ambitious goal is to generate power at 50% the cost per watt of leading solar arrays. This innovation directly translates to enhanced profitability and a stronger competitive position by lowering the cost basis of its vehicles and services.

A crucial future capability is Rendezvous and Proximity Operations (RPO), with a demonstration planned for the Vigoride 7 mission (targeted for March 2024). This involves maneuvering a spacecraft within two meters of a target satellite. RPO is not merely a technical feat; it is the gateway to a suite of high-value in-orbit services, including inspection, maintenance, refueling, life extension, and de-orbiting of satellites. The RPO mission is a "big step" towards the vision of a reusable Vigoride OSV. A reusable Vigoride, estimated to be reused six or seven times, would remain in space after its initial mission, to be refueled and re-tasked with new payloads. This paradigm shift promises a "discreet margin boost" by deeply reducing manufacturing and launch costs per mission, offering a compelling return on investment and unlocking entirely new revenue streams in the burgeoning space servicing market.

Operational Momentum and Strategic Expansion

Momentus has demonstrated a consistent ability to execute its mission objectives and enhance its operational efficiency. To date, the company has launched four missions, successfully deploying 17 customer satellites and providing hosted payload services. The Vigoride OSV has accumulated significant flight heritage across three missions, validating its operational capabilities. This track record is crucial for building trust with customers in a risk-averse industry.

Operational improvements are evident in the production cycle of its Vigoride vehicles. The assembly, integration, and test process for Vigoride 6 was 36% faster than for Vigoride 5, accompanied by a 51% decline in non-conformances. These metrics highlight a maturing engineering and operations capability, leading to increased productivity, higher quality, and lower unit costs—essential steps towards achieving profitability at scale.

The company is strategically expanding its product offerings beyond in-space transportation. The M-1000 satellite bus, leveraging the flight-proven Vigoride core technologies, is a key initiative. This bus is designed for high power, flexible configuration, greater payload capacity, and rapid, scalable manufacturing, making it highly competitive in a global satellite bus market projected to reach $20.8 billion by 2030. Momentus is actively seeing strong interest in the M-1000, including its use in a bid to the Space Development Agency (SDA) for the Tranche 2 Tracking Layer program.

Momentus is making significant inroads into the U.S. government and defense sectors, a strategic pivot aimed at securing larger, more stable contracts. The company has been awarded a NASA contract to study robotic technologies for future space exploration and received milestone payments for executing Phase 3 of a DARPA contract for on-orbit assembly of large structures. It also secured a $1.86 million SpaceWERX SBIR contract for an RPO sensor suite demonstration and an SBIR contract from the SDA for tailored modifications to the M-1000/Vigoride system for DoD payloads, with an initial phase of $746,000 and an expected option for an additional $1.2 million. These engagements underscore Momentus's growing credibility and capabilities within critical government programs.

Commercial customer engagement remains robust, with six new contracts signed since mid-August 2023, including repeat customers like C3S, Aarhus University, and FOSSA Systems, and new clients such as RIDE! Space, SatRev, and AVS. These contracts span transportation and hosted payload services for missions extending into 2024-2025. Furthermore, Momentus has secured a five-year, $15 million Master Services Agreement with Velo3D (VLD) for 3D printing services, providing priority access to advanced manufacturing. The company also maintains a strategic advantage in launch aggregation, having reserved ports on all SpaceX Transporter missions through the end of 2024, offering customers dedicated space and reduced schedule risk.

Financial Performance: A Critical Juncture

Momentus's financial performance reflects a company in a high-growth, high-investment phase, grappling with the significant capital demands of space technology development and commercialization. For the three months ended June 30, 2025, service revenue stood at $191,000, a substantial decrease from $1.209 million in the same period of 2024. Similarly, for the six months ended June 30, 2025, revenue was $513,000, down from $1.722 million in the prior year. This revenue was primarily derived from engineering project services for the Space Development Agency and, to a lesser extent, forfeited customer deposits. While Q2 2023 marked Momentus's first million-dollar revenue quarter ($1.7 million), the recent decline highlights the lumpy nature of early-stage contract fulfillment and the critical need to scale commercial operations.

Profitability metrics underscore the company's developmental stage. While the TTM Gross Profit Margin is a healthy 92.49%, reflecting the high-value nature of its services, operating, net, and EBITDA margins remain deeply negative (TTM Operating Profit Margin: -2930.50%; TTM Net Profit Margin: -3562.32%; TTM EBITDA Margin: -3341.33%). This is largely due to significant operating expenses, particularly in Research and Development (R&D) and Selling, General, and Administrative (SG&A). For the six months ended June 30, 2025, R&D expenses were $4.108 million (down from $5.526 million in 2024), and SG&A expenses were $8.532 million (down from $11.487 million in 2024). These reductions were driven by headcount adjustments, lower stock-based compensation, and reduced legal fees, partially offset by increased consulting services. The company also recognized a gain on debt extinguishment and increased other income from an employee retention credit.

Liquidity remains an acute challenge. As of June 30, 2025, Momentus reported cash and cash equivalents of only $0.10 million. The company incurred a net loss of $12.60 million for the six months ended June 30, 2025, and an accumulated deficit of $420.60 million. Net cash used in operating activities for the same period was $7.40 million. These figures collectively raise "substantial doubt about the Company's ability to continue as a going concern" for the next twelve months, as explicitly stated in its 10-Q filing. Management acknowledges that current cash levels are insufficient to fund regular operations and commercial production scaling, necessitating "substantial additional capital" through equity or debt financings.

To address this, Momentus has been actively raising capital. Since the Q3 2023 earnings call, the company secured approximately $16.9 million in gross proceeds through various offerings and warrant exercises. Further financings include $6.0 million net from the February 2025 Offering, $2.1 million from the March 2025 Warrant Inducement Agreement, and $0.2 million from the May 2025 Loan. Subsequent to Q2 2025, a July 2025 Public Offering raised $3.6 million net, and an August 2025 Warrant Inducement brought in approximately $2.7 million gross. These continuous capital raises are critical for sustaining operations and funding the company's ambitious technology roadmap.

Competitive Arena: Differentiating in a Crowded Cosmos

Momentus operates in a highly competitive and capital-intensive space industry, facing both direct and indirect rivals. While its specialized in-orbit servicing capabilities offer a unique value proposition, the company's smaller scale and financial vulnerabilities present significant challenges against more established players.

Direct Competitors:

• Rocket Lab: Rocket Lab is a formidable competitor, known for its frequent, cost-effective small satellite launch services and reusable rocket technology. Rocket Lab demonstrates stronger revenue growth and a more established operational cadence. While Momentus leads in specialized in-orbit expertise and the promise of its water plasma propulsion, it lags Rocket Lab in overall execution speed and financial stability. Rocket Lab's broader launch portfolio provides more stable cash flow, whereas Momentus's focus on emerging in-orbit technologies requires higher R&D investment, potentially leading to weaker operating margins.
• Virgin Galactic (SPCE): Primarily focused on suborbital space tourism, Virgin Galactic also has aspirations in space transportation. Momentus's utility-focused approach to in-space infrastructure for commercial and government clients contrasts with Virgin Galactic's experiential flights. Momentus may lead in technological adaptability for servicing missions, but Virgin Galactic benefits from stronger branding and broader consumer appeal, potentially leading to faster revenue growth. Momentus's financial health, with its high R&D expenditure and niche focus, may align with Virgin Galactic's in terms of high innovation costs but could lag in revenue generation.
• Maxar Technologies: Maxar Technologies is a well-established player in satellite imagery, Earth observation, and space infrastructure. It benefits from predictable revenue from long-term government and commercial contracts, leading to stronger cash flow and profitability. Momentus's in-space servicing offerings could complement Maxar's operations, particularly in providing greater flexibility for on-orbit maneuvers. However, Momentus lags Maxar in overall financial stability and efficiency, as Maxar's established infrastructure and contracts provide a more robust financial foundation.

Competitive Advantages (Moats) for Momentus:

• Proprietary In-Orbit Technology: Momentus's MET thruster, TASSA, and developing RPO capabilities provide tangible benefits like enhanced mission flexibility, superior power generation, and potential for significant cost reductions. The MET's TRL 9 status and TASSA's projected 50% cost-per-watt advantage over leading solar arrays are strong differentiators. This technology helps Momentus counter Rocket Lab's launch speed by offering ongoing value in servicing and could exploit Maxar's gaps in real-time in-orbit operations.
• Speed to Market for Government: Momentus's ability to move rapidly from initial customer requirements to in-space operation is a "major discriminator" against traditional defense contractors. Its experienced team, with decades of national security background, gives it an edge in meeting the complex needs of the DoD.
• Flexible Payload Capacity and Power: The Vigoride OSV and M-1000 satellite bus offer high power and flexible configurations, accommodating diverse and power-intensive payloads. This is crucial for national security missions like space situational awareness and surveillance, distinguishing Momentus from competitors with more rigid systems.

Competitive Disadvantages/Vulnerabilities:

• Scale and Financial Stability: Momentus's smaller operational scale and ongoing "going concern" status make it financially vulnerable. This could lead to higher costs, lower margins, and reduced competitiveness in pricing compared to larger, more stable rivals.
• Market Share Capture: Despite technological prowess, Momentus faces challenges in rapidly capturing significant market share against competitors with more established revenue streams and operational track records. The unsuccessful bid for the SDA Tranche 2 Transport Layer Alpha program, while a learning experience, highlights the difficulty of breaking into large government contracts.

Momentus's strategic response involves leveraging its technological differentiation to carve out niche leadership in in-orbit services and the satellite bus market, particularly with government customers. Its strong relationship with SpaceX for launch aggregation also provides a competitive edge by offering dedicated launch capacity and reducing schedule risk for customers.

Outlook and Path Forward: A High-Stakes Trajectory

Momentus is on a high-stakes trajectory, with its future heavily dependent on successfully executing its strategic plan and securing sufficient capital. Management's outlook is cautiously optimistic, grounded in the belief that its differentiated technology and strategic focus will eventually lead to profitability.

A key near-term catalyst is the Vigoride 7 mission, targeted for launch no earlier than March 2024 on SpaceX Transporter 10. This mission is planned for a "fuller payload," which is expected to "improve mission economics" and "generate more revenue than Vigoride 6." Vigoride 7 will also host the critical Rendezvous and Proximity Operations (RPO) demonstration, a foundational step towards the long-term vision of a reusable Vigoride OSV. The ability to reuse a Vigoride six or seven times would dramatically improve unit economics by deeply reducing manufacturing and launch costs, offering a "discreet margin boost."

Momentus continues to pursue significant government contracts. The company submitted a bid for the SDA Tranche 2 Tracking Layer program (18 satellites, expected to exceed $700 million), with an award projected for mid-January 2024. While the company was not selected for the Tranche 2 Transport Layer Alpha program, it views this as a valuable learning experience, implementing "lessons learned" to strengthen its position for future bids. The company's reserved ports on all SpaceX Transporter missions through the end of 2024 (Transporter 10, 11, 12) provide a crucial operational backbone for planned customer deliveries and future revenue generation.

Management anticipates continued cash consumption in connection with its ongoing activities, including corporate infrastructure, R&D, sales, and regulatory compliance. The 30% headcount reduction implemented in Q2 2023 is expected to fully impact the burn rate in Q3 2023, contributing to efforts to extend the cash runway. The company's plan is to drive bookings and revenue growth, further reduce operating expenses, and resolve legal matters to "improve our liquidity and strengthen our balance sheet to allow the company to operate well into 2024." The long-term goal is to achieve profitability "once we get scale" and "expand margins in the future," with reusable Vigoride being a significant driver. The recent signing of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, is also being evaluated for its potential impact on the company's financial statements.

Key Risks to the Investment Thesis

The investment thesis for Momentus is underpinned by substantial risks that warrant careful consideration:

• Going Concern Risk: The most immediate and critical risk is the "substantial doubt" about the company's ability to continue as a going concern. With only $0.10 million in cash as of June 30, 2025, and ongoing operating losses, Momentus's survival is contingent on its ability to raise "substantial additional capital." Failure to do so could lead to operations being "scaled back or halted altogether."
• Capital Availability and Dilution: The company's reliance on continuous equity or debt financings means that capital may not be available on favorable terms or at all. Frequent capital raises, while necessary, have led to significant shareholder dilution, as evidenced by the increase in weighted average shares outstanding from 1.04 million in 6M 2024 to 4.50 million in 6M 2025.
• Material Weakness in Internal Controls: Management identified a material weakness in internal control over financial reporting as of June 30, 2025, due to misclassification errors. While remediation efforts are underway, this poses a risk to the accuracy and reliability of financial reporting.
• Litigation Uncertainty: Despite settling a securities class action and founder litigation, the inherent unpredictability of legal proceedings means that future claims or appeals could still have a material adverse effect on financial condition and divert management resources.
• Launch and Operational Failures: The space industry is inherently risky. While Momentus has demonstrated operational improvements, launch vehicle failures (as seen with other industry players) or in-space anomalies (like the NASA LLITED deployment error) can cause delays, reputational damage, and financial losses.
• Revenue Volatility and Scaling Challenges: Current revenue streams are modest and subject to significant period-over-period fluctuations, highlighting the challenge of scaling commercial production and achieving consistent revenue growth to offset high R&D and operating costs.

Conclusion

Momentus Inc. is a company at a pivotal juncture, striving to transform its pioneering in-space technology into a commercially viable and profitable enterprise within the rapidly expanding space infrastructure market. Its core investment thesis rests on the strength of its differentiated water plasma propulsion, the strategic expansion into the government and satellite bus markets, and the long-term vision of reusable in-orbit service vehicles. The company's operational achievements, including successful missions, improving production efficiencies, and the maturation of its MET thruster to TRL 9, demonstrate a credible path to technological leadership.

However, the journey is fraught with significant financial challenges, most notably the explicit "going concern" warning and the continuous need for capital. While Momentus has shown a consistent ability to raise funds and implement cost-reduction measures, the path to sustainable profitability requires substantial scaling of its revenue streams and successful conversion of its technological advantages into market share. Investors must weigh the immense long-term potential of Momentus's innovative capabilities against the immediate and acute liquidity risks, recognizing that the company's trajectory hinges on its ability to secure further financing and accelerate commercial adoption in a highly competitive and capital-intensive industry. The coming quarters, with planned Vigoride 7 missions and critical government contract awards, will be crucial in determining if Momentus can successfully transition from a promising innovator to a financially robust leader in the new space economy.