Q4 2023 Intuitive Machines Inc Earnings Call

Participants

Stephen Zhang; Investor Relations; Intuitive Machines Inc

Stephen Altemus; Chief Executive Officer, Director; Intuitive Machines Inc

Steven Vontur; Interim Chief Financial Officer; Intuitive Machines Inc

Austin Moeller; Analyst; Canaccord Genuity

Josh Sullivan; Analyst; The Benchmark Company LLC

Andres Sheppard; Analyst; Cantor Fitzgerald

Suji DeSilva; Analyst; Roth MKM

Mike Crawford; Analyst; B. Riley Securities

Presentation

Operator

Welcome to the Intuitive machines Fourth Quarter 2023 conference call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. If you would like to ask a question, please press star then one on your telephone keypad. A confirmation tone will indicate that you're in the question queue. You may press star, then two, if you would like to move your question from the queue. If anyone should require operator assistance during the conference, please press star then zero to signal an operator. As a reminder, this conference is being recorded.
Now I would like to hand the conference over to your host, Stephen Zeng, Head of Investor Relations. Thank you. Please go ahead.

Stephen Zhang

Good morning, and welcome to the Intuitive machines Fourth Quarter 2023 earnings call, Chief Executive Officer, Steve Artemis, and Interim Chief Financial Officer, Steve Cantor are leading the call today.
Before we begin, please note that some of the information discussed during today's call will consist of forward-looking statements setting forth our current expectations with respect to the future of our business, the economy and other events. The Company's actual results could differ materially from those indicated in any forward-looking statements due to many factors These factors are described under forward-looking statements in the company's earnings press release and the Company's most recent 10-Q filed with the SEC. We do not undertake any obligation to update forward-looking statements, and 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 earnings release filed on Form-8K.
Finally, we posted an earnings call presentation on our website, which provides additional context on our operational and financial performance. You can find this presentation on our Investor Relations page at w. w. w. dot intuitive machines.com/investors.
I'll now turn the call over to Steve Altman.

Stephen Altemus

Thanks, Steve, and welcome, everyone, and thank you for joining us today, we'll delve into two machines fourth quarter financials covering our fiscal performance and strategic initiatives. Moreover, will share updated information reflecting our recent successes, underscoring our current standing as the only US company to ever land on the surface of the moon intuitive machines decision to go public last year was driven by a vision to democratize access to the moon and catalyze the emergence of a lunar economy. This historic move paved the way for ground-breaking lunar exploration and a unique opportunity to broaden access to the moon for the general commercial population. I've been looking forward to the day when we could join this call and say we accomplished that mission exactly. One year after going public intuitive machines launched it. I am one mission and one week later on February 22, we successfully landed marketing the United States first, lunar landing in over 50 years, successful landing recognized by the White House by NASA and our commercial customers fundamentally disrupted the economics of landing on the moon while substantially retiring the cost of developing a new LUNAR program, including our Nova C class lunar lander, let's say, Emcore lander class is currently scheduled for at least two more missions under NASA's commercial lunar payload services initiative, or Cliffs program, which secured its budget under NASA's new appropriations bill. The recently enacted fiscal year 2024 NASA budget continues to support Cliffs, along with several other key Artemis initiatives. And up next, we expect the announcement of the agency first, leaner terrain vehicle services contract in early April, responding to the company's first bid as a prime contractor in the agency's Artemis campaign, final spending bill appropriated $24.9 billion, which was approximately $2 billion less than the NASA request. The majority of the $2 billion shortfall all within the Mars sample return program. A program into the machines has not submitted proposals into while NASA has openly discussed the cost overruns and program delays for its on-orbit servicing assembly and manufacturing program or OCM. There is language in the bill that preserves funding through fiscal year 2024. This preserve funding continues the planned revenue of the company's own three contract. Despite the political adjustments, NASA's budget continues to bolster the Company's roadmap as we leverage the success of IM. one to diversify revenue streams and provide a reliable cadence of Lunar missions and services. For example, Nassib near Space Network Services award is still scheduled for May as a company. We recognize that returning the United States to the moon for the first time since Apollo 17 was truly an integrated global effort. We worked with government agencies, multiple departments within NASA, the FACFCC., and a series of domestic and international partners through our LUNAR data network and supply chain. Additionally, there is geopolitical and policy alignment with the return to the moon. As recently described in Defense Intelligence Agency report titled challenges to security and space, China and Russia, value superiority and space the efforts of countries such as China, India, Russia and Japan highlight the values placed on superiority in space by other countries. This has ignited a 21st century space race that is well underway amid the surge in geopolitical lunar activity that has recently seen nations space that come to the challenges of spaceflight. We believe the success of IM. one mission puts the commercial industry firmly into the space race. Our cooperation with agencies in other countries positions IBM as a first mover in this race, the IM. one mission delivered over 100 kilograms of payloads and shuttled numerous technology demonstrations to the lunar surface. It operated more than 144 hours on the lunar surface, transmitting more than 1.7 gigabytes of science and engineering data across all commercial and NASA payloads, landing and data delivery from the lunar surface resulted in more than $12 million in success milestone payments in 2024 across the NASA and commercial customers. Submission landed that further south than any vehicle in the world has ever landed on the moon, establishing a foundation marked by numerous pioneering achievements, including validating the company's scalable liquid methane and liquid oxygen propulsion system of future facing technology, we believe is the next step of propulsion innovation required to travel further into our solar park. First of its kind vision, processing and autonomous landing technology landed within 9.9 degrees from the moves South Pole, massive creators, steep slopes and difficult lighting conditions market. So ominous region of the moon, proving our autonomous landing technology on our first mission sets the stage for IM. two, which is intended to land on the moon South Pole at the Shackleton connecting Ridge search for water ice that may be process for propulsion and life support in the future. The commercial and NASA payloads, and I have to compliment the pursuit of water on the moon and the effort to establish a foothold on the South Pole for NASA's $93 billion Artemis campaign targeting human missions this decade I am whose propulsion and structural components are being assembled in house, and we completed integration of the NASA's ice mining drill in the fourth quarter. In addition to the machines micro Nova hopper designed to search for water ice and permanently shaded regions have the move completed thermal vacuum chamber testing before the end of the year. Since concluding the IM. one mission in February. On February 29, our team transitioned into assembling and integrating the IM. two mission lunar lander that uses the same core Nova C class vehicle. As I am one, allowing us to capitalize on schedule and cost efficiencies. The team assessing IM. one data identified just a handful of adjustments will carry over into the IM. two mission to optimize and refine performance. We will complete the assembly and integration process with only these minor adjustments. The flight proven oversee design in 2D machines is they're working with NASA to finalize engineering and landing site selection on item two, which may marginally impact our targeted 2024 the launch of the IM. on mission success extends beyond our LUNAR Access Services business unit. At the start of the call, I touched on a global integration into the machines has achieved remarkable success in globally integrating radio astronomy additions from over a dozen countries, positioning ourselves as the sole commercial provider to validate a leaner distance data service from the moon surface. This fee underscores the company's leadership in LUNAR data services further demonstrated by a successful augmentation and interoperability with NASA's Deep Space Network. We believe this creates a clear advantage in our pursuit of NASA's near Space Network Services contract award in the second quarter in one year's time. The Orbital services business unit has moved from an incubated idea to a mature revenue and profit center for Intuitive, achieve the overall services business units secured it is executing on the Omni bus, multidisciplinary engineering services contract or homes three, with $12.5 million in revenue recognized in December 2023. Homes three has been instrumental in driving the unit's success. Moreover, the connection between oh three and that his own both Sam project is notable as Congress has appropriated funds for owes them ensuring continued revenue for that project within the homes contract through the fiscal year as Congress pushes for O. sand project performance, improvements in student machines remains committed to working with NASA through the completion of the OCM mission under the Holmes contract as intuitive machines eagerly anticipate NASA's announcement for the agency lunar terrain vehicle services contract. The Company is diligently preparing for potential award. Nasa's LTVS. contract holds a total program value of more than $4 billion, structured across two phases of award with multiple potential awardees. That first phase expected shortly after first quarter of 2024 entails a feasibility assessment, the award amounting to approximately $30 million over one year. If awarded this phase aims to mitigate risks associated with developing the company's known good die cargo class, lunar lander and advancing the lunar terrain vehicle design. The intuitive machines, lead move-in rates or team is comprised of aerospace and automotive leaders such as ABL, Boeing Michelin and Northrop Grumman and is poised to leverage this opportunity to propel the next generation of leaders of surface mobility. Following the successful completion of the Phase one feasibility assessments into the machines anticipate fitting on the second LTBS. award. This award is earmarked for developing and delivering the lunar terrain vehicles to them as the company continues demonstrating its capability and reliability of our operations. The LTVS. award is anticipated to focus on continuously delivering infrastructure supporting both NASA's Artemis campaign and commercial interests. We believe this groundbreaking endeavor positions in two machines as a key player in advancing LUNAR infrastructure. Furthermore, in 2D machines, ION one mission served as a platform for validating ground-based breaking space products and infrastructure with notable achievements, including validating the Company's proprietary and scalable ER. 900 liquid methane liquid oxygen engine engine was validated through the first ever Deep Space ignition, followed by multiple restarts, demonstrating reliability and providing successful spacecraft maneuvers through the lunar surface positioned as a future facing technology. We believe liquid methane and liquid oxygen propulsion are the next evolutionary steps in propulsion technology, which are essential for enabling travel further into the solar system using the resources we know are already available on other Celestial bodies, how their mission elements such as software integration for vision processing and creator recognition for autonomous landing technology for also successfully validated with these achievements in two new machines is fielding inquiries and exploring potential opportunities to enter the market with these validated space products. Building on this momentum, the company has submitted its past performance data to NASA for consideration in their next clips mission award. We've also attracted a surge of interest from commercial and international partners, including face agencies. We are forging a new relationship with Hill with a world leading cancer research team interested in leveraging the zero gravity environment for science and medicine. Our LUNAR data services team is exploring interest in data relay satellite testing using our flight proven network and mission operations center. We are in reengaging commercial brand partnerships to push traditional Earthbound retail technology innovation while extending new Columbia Sportswear innovations through our second mission.
Finally, at the start of the call, I mentioned the global landscape of space exploration witnessing a remarkable increase in geopolitical activity with nations worldwide intensifying their efforts to return to the moon and explore. Beyond last week, South Korea, Korea's unveiled ambitious plans to establish a new space industry cluster backed by over $1 billion in funding through 2027. The cluster will foster spacecraft development and astronaut training. We view investments in exploration likeness with admiration and appreciation, recognizing its positive impact on the global pursuit of scientific advancement. And recall at the end of the fourth quarter of 2023, intuitive machines formed a strategic partnership with Auryon Corporation, South Korea's premier health care investment company focused on focusing on bolstering critical infrastructure and fostering new research and development ventures in space. This strategic collaboration exemplifies into the machines commitment. So aligning itself with the evolving global landscape of Space Exploration has and to the machines continues to forge partnerships to diversify revenue. The Company remains dedicated to staying at the forefront of the shifting dynamics in space exploration, aligning with this global momentum, we believe intuitive machines is strategically positioned to capitalize on the growing interest in space and the moon, and we're making tangible progress in that pursuit.
With that, I'll turn the call over to to the machines, Interim Chief Financial Officer.

Steven Vontur

Steve, onto our Thank you, Steve. And thanks to everyone joining us today. I'll begin by going through our fourth quarter 2023 results and a few key highlights. We ended the fourth quarter with a contract backlog of $268.6 million, an increase of $133.4 million and nearly double versus the prior quarter. Backlog includes the first task orders from the oh three contract along with $17.6 million for an international space agency pay load to be delivered on a future mission and $9.5 million for the Department of Defense Air Force Research, laboratory tests and award. As Steve mentioned earlier, we expect more opportunities to expand backlog this year as we respond to a steady flow of RFP and RFI requests since our successful lunar landing as well as the award decisions coming on key programs such as LTVSCP. 22 and in S&S. Revenue in the quarter was driven primarily by NASA's clips contracts and related mission payloads, along with one month of owned three revenue totaling approximately $12.5 million the company concluded the fourth quarter were $30.6 million in revenue compared to $38 million in the fourth quarter of 2022. Gross margin improved versus prior quarters and was a positive $1.5 million in the current quarter, driven primarily by the owned revenue in December operating loss with a negative $5.9 million versus $13.0 million in profit for the same quarter of the prior year. Note that the prior year included a one-time asset change order to move our IM. one landing location, which came which came with incremental revenue and high drop-through down to income. In addition, Q4 2023 saw higher cost of revenue as well as public company costs since the deal back in February 2023.
On the cash side, we ended 2023 with a cash balance of $4.5 million, which is after a debt paydown of $12 million in the quarter, we have only $8 million of debt remaining on our balance sheet. Note that as of March first, 2024, our cash balance increased to $54.6 million, driven by $50.6 million of warrant exercises from an institutional investor, along with a $10 million equity strategic investments. In addition, we have invoiced NASA, along with other commercial payload customers. The mission completion payments for IM. one totaling approximately $12.5 million as a result of our successful landing this will further strengthen our cash position for the year. It's worth noting that our March first cash position is the largest balance since any quarter-end position last year and we believe provides us with sufficient capital for the near term. Given our continued capital and cost discipline going forward, we will continue to be opportunistic in the capital markets for defensive capital to further strengthen the balance sheet. We became shelf eligible on March first. And as a good housekeeping measure, we plan to file an S3 rich self self-registration statement following our 10 K operating cash used during the quarter was $22.3 million with CapEx of $2.2 million, resulting in free cash flow in the quarter of an outflow of $24.6 million. As previously discussed, with the completion of our new lunar production and operations center CapEx was normalized in the fourth quarter compared to recent quarters going forward, CapEx is expected to be significantly lower relative to the prior year, excluding the impact of any new awards and associated CapEx requirements.
Looking ahead, we expect 2024 to be a transformational year for us, both operationally and financially.
Building off our recent mission execution success.
On the revenue side, we expect sales to expand significantly this year based on the current backlog, our revenue outlook and outlook in 2024 could be further favorably impacted if we are successful in winning our existing pursuits such as LTDSCP. 22 and NS. and S. We expect gross margin will continue to improve as we execute on homes as well as drive cost efficiencies for ION two and ION three given the prior development and learnings from our successful, I am one mission. One in particular, is expected to be favorable given the full quarter owns execution along with the final NASA and commercial payload payments.
Brian one, as I mentioned earlier, on backlog, we expect continued backlog growth this year driven by key program awards. LTDS. is expected to be awarded in the coming weeks with NS. and S. and the next clips award TP. 22 expected some time in Q2 2024. Additionally, we have seen a significant uptick in requests for proposals and information following our successful web lunar landing. And we hope to capitalize on our momentum on the cash side with $54.6 million as of March first and the final item one success payments to be collected, we will remain well capitalized to execute on existing contracts and to fund future growth. Overall, we come into 2024 from a position of financial strength. We've expanded our cash position with lower debt. We've grown backlog. Our margins are improving and our future opportunities are brighter than ever, and we look forward to another successful year of execution.
With that, operator, we are now ready for questions.

Question and Answer Session

Operator

Thank you. Ladies and gentlemen, just as a reminder, if you would like to ask a question, please press star then one now on your touchtone phone. Today's first question is coming from Austin Moeller of Canaccord Genuity. Please go ahead.

Austin Moeller

Hi, good morning. Stephen, Steve with I am to the revisions we have to make, I guess the relatively minor. Does that still put you in a position to launch that mission in 2024 Boston.

Stephen Altemus

Good morning, Steve. Ultimate's here, we have been through a review of reconstructing the mission and identify the areas that needed adjustments in terms of antennas and cameras and software changes. Certainly a laser rangefinder enables switch harnessing improvements.
Those have all been made. So we really don't see any impact to the schedule based on the changes from IM. one they're fairly straightforward from. We are working with NASA closely. If an asset is repositioning our landing site, they want to get to an area where they have some confidence that there might be water rights on the South Pole. And so we are adjusting the landing site to the Shackleton connecting Ridge.
And what that does is that might have a marginal impact generally, but we are still planning for a 2024 mission. Brian, too.

Austin Moeller

That's great. And just a follow-up on SNFs. Do you expect to be able to collect more revenues from that program once the first CON satellite positioned in the lunar orbit?

Stephen Altemus

Well, actually there are some what they call when we we anticipate an award notification in the May timeframe. As I indicated in my opening remarks, and that contract is structured in a way where NASA funds what they call a verification task order. And that verification task order is to put in place that basic initial operating capability that that gives you the data relay from around the moon back to earth. And so it's not necessarily senior little singular to a a satellite that we put around, but it's getting through that verification phase of the data relay satellite over a period of time. I think it's a 24 months, a 24 to 36 months to get that verification done. So after that accomplished service revenue kick ticket.

Austin Moeller

Great. Thanks for the details there.

Stephen Altemus

Thank you.

Operator

The next question is coming from Josh Sullivan of The Benchmark Company. Please go ahead, sir.

Josh Sullivan

Your voice, Morgan Keegan. Just as far as the near space that were service contract weight is put on past performance and now that intuitive, it's validated literally data service from that from the moon. Can you just provide us any detail and kind of the contract structure weighting?

Stephen Altemus

Well, let's see. I might not be able to correlate it directly to the two awaiting number. However, we know the contract procurement process is moving forward as several of the vendors, including into the machines of course, have made the competitive range. And NASA has opened up oral discussions and talk to us about clarifications and asked for a final proposal for that. So we know the procurements moving forward. We know also that the relevant experience impact performance it is, was they requested updates to that and specifically updates based on our mission success for Mission One. So that gives us some confidence that we're moving forward in the process and and closer to an award hopefully in the May timeframe. Josh,

Josh Sullivan

and then just on the changes or potential changes in the lending side for item two, are you expecting any change payments as you received for item one when that happens?

Stephen Altemus

Yes. In fact, we are a massive center yesterday a refresh to request for tax or the modification to impacts from a cost and schedule standpoint and technically what it would take to move to this particular landing site on the Shackleton Reg. It's just the very close to the original landing site, but there's been back and forth and analysis that's been done. And all that will be costed and submitted back to the government here in the first week of April, and then we'll expect that modification it and certainly will cover our costs that we're we would anticipate based on that movement in the schedule.

Josh Sullivan

Got it. And then just one last one. Even as far as the lunar terrain vehicle contract, are you still bidding as a prime?

Stephen Altemus

Oh, yeah, it just shows really proud as intuitive as she enters human space flight as a prime contractor on the Artemis programs, LTV that's developed monitoring vehicle or Moon buggy with two machines is a prime. The immune racer team includes AVL, an automotive company includes Boeing, Northrup Grumman and Michelin to name a few. And so that's a we have a really powerful team. We're very confident in our capability and our design, and we're looking forward to hearing about that next week or then in the coming weeks. So it represents a significant entrance for us as a does a essentially system integrator for for a Artemis program element. What's interesting about that, I don't know, folks know is that that's really a blend of a NASA element that is owned and operated by the commercial entity with two the machines in this case. So that while NASA is operating the Rover with their astronauts, when they're not, they're intuitive, machines can operate that Rover are autonomously and provide services for commercial customers and international governments, the need for mobility on the surface and to collect science and engineering data. So that really becomes an asset of Intuitive machines on the moon that's operating for, it's up to 10 years.

Josh Sullivan

Great. Thanks for the update. Thank you.

Operator

The next question is coming from Andrea Shepard of Cantor Fitzgerald. Please go ahead.

Andres Sheppard

Good morning, Steve. Steve and Steve. Thanks for taking our. I wanted to morning since turning on data and congratulations on the quarter and let me just once more share.
My congratulations on a first a successful our mission, and I wanted to maybe just touch on the on the backlog. So the $268 million can you just remind us over what time period you might expect to recognize that into revenue? And then additionally, with now $12.5 million in revenue collected from the old contract should we expect that kind of similar run rate on a on a monthly basis over the next five years? Is it the best way to think about it? Thank you.

Steven Vontur

Yes, this is Steve on for Andreas, and thanks for the comments. The majority of the increase in backlog that we see at year end came from the homes past quarters. And so and that's a one-year set of past quarters that we were awarded. So we will expect to burn that off in 2024. And as far as the run rate, we expect the $12.5 million in December is the right ballpark what we expect monthly throughout the rest of the past quarter term.

Andres Sheppard

Got it. Okay. That's super helpful. Appreciate that. And I guess just on liquidity, you mentioned your cash balance as of end of March. I'm curious what kind of margins are you expecting throughout the year? And how are you thinking about that, that capital needs obviously going to have both owned contract kicking in every month every quarter. Do you foresee a need to have to raise additional capital or do you feel like you're in a good place now where given where you are incentive?

Steven Vontur

So overall on margins, we expect margins to improve. Now owns is a big factor there since it is a positive working contract in our outlook. The rest of the cash balance that we currently have, we believe will be sufficient to get us through the remainder of the year without any further awards that we're currently pursuing. So I think that's the best way to look at our current cash balance as of March first and how it flows through the rest of the year. So then anything we get awarded would hopefully be positive for that cash flow forecast. And does that answer your question?

Stephen Altemus

But I would add one other piece, Andre, is that we will continue to remain up opportunistic about capital raise in the future to keep looking at ways to accelerate the growth of the company like Steve said, we are confident that the cash balance carries us through the year. That's with no additional wins, but we are in a fantastic position for it for awards on LTVCP. 22, that next clips award. We can't forget about that one that's moving forward and the NSS. contract and so on. With the existing contract backlog we have this year, which will burn off of nearly 80% of that this year and those additional contract awards that puts us in a great position moving forward even beyond 2024. And then should we have delays like we experienced last year, we're still sufficient capital on the balance sheet to get us through 2024 data.

Andres Sheppard

That's wonderful. Super helpful. Appreciate. And maybe if I could just squeeze one last one regarding the IT outsourcing contract. I just want make sure I'm understanding this correctly. So I think you said you expect this contract to be decided over the next few weeks, if I heard correctly? And then Phase one, you expect that to be awarded to multiple 10s. If I understand correctly. So I guess what would be the contract work, what you are targeting for that Phase one? Or what's the best way to think about that? Thank you.

Stephen Altemus

Yes, the Phase one work. A lot of them, we believe will be essentially to face awards and each once again to move to the next phase. We think this is a multiple award where two or more teams might win an award in Phase one. And what that will be will be the preliminary design and assessment of the delivery system and the cases are now with the cargo lunar lander. That takes about a 1.5 metric tons to the lunar surface.
And that's also the preliminary design and assessment of the LTV. itself at the 12 month period from price that roughly $30 million, we expect two or three awards, like I said, the follow on then will be a result of of that to take the design to a full maturation. And then we think the full value of that contract is on the order of $4.5 billion over a 10-year period and that will be divided under multiple awardees we believe.

Andres Sheppard

Got it. Super helpful. Thanks again, congratulations on the quarter and I'll pass it on. Thank you.

Stephen Altemus

Thanks, Andreas.

Operator

Thank you. The next question is coming from Suji Desilva of Roth MKM. Please go ahead.

Suji DeSilva

Good morning. I'm going to zoom and obviously these calls are easier now that you've made to the moon and three. Great. So congratulations, guys. On the me. The LTV awards, I have been through the LTV CLTV award for Phase two. Is there a significant synergy if you're providing the nobody and the lender that would derisk that, that would make that a fairly significant consideration in that award.

Stephen Altemus

Absolutely see our that was our intent and our strategy going into the bid was to put a team together that can provide the complete service with demonstrated ability to deliver such a high value piece of cargo for the Artemis program for the surface of the moon and with our first mission success on it really just puts us standing tall in terms of our competitiveness to that procurement.

Suji DeSilva

Okay, great questions on the staffing you're at now and that used the operation center, you opened up in supporting these incremental pipeline awards. Are you adding staff where you could support those, but that need to be incrementally added? Just any thoughts there would be helpful.

Stephen Altemus

Yes. Currently, we're staffs of both here in Houston that are leading production operations center and up in Maryland. You know, based on that on contract for the first satellite servicing in the and I know what we're doing on owns three, we have adequate staff as we look at these awards. That's a first world problem to add incremental staff to organize and manage the work as it comes in. We're fairly we anticipate that will remain fairly flat in terms of SaaS needs and burn rate this year, even with these significant awards, because number one, we rolled off Mission One so that if we do receive a CP. 22 award, that workforce will roll into CP. 22, which is the next clips award. And then the LTV. and anesthetics contracts, as I've talked about, have other team members that will also provide workforce. And so we're not necessarily looking for a large ramp-up this year in workforce associated with these contracts that we're talking about, just the minor adjustments as we go for decades.

Suji DeSilva

Thanks, guys. Could address vaccines.

Stephen Altemus

Thank you.

Operator

The next question is coming from Mike Crawford of B. Riley Securities. Please go ahead.

Mike Crawford

Thank you. I guess this is for Steve Budorick did you say that $269 million of backlog that you expect to recognize 80% or $215 million of that as revenue in 2024 approximately.

Steven Vontur

That would be primarily the owned contract. As I said earlier, we're burning at about $12.5 million in revenue on that. And then the rest would be clips contracts, I am two and three.

Mike Crawford

Okay, great. And then the $12.5 billion of success payments you expect to receive from I am born. What is that out of possible. How much of success payments were you eligible to potentially receive from what we outlined for that one might have?

Stephen Altemus

That's what the way we broke it down with the milestones the only payload that we did not receive data back off from was the scouts payload, which studied the engine plume interaction with the dust on the surface of the moon and so we held back some 5% based on that payload, not not activating not collecting that data. However, we were able to get data on for to replace that through our own cameras that give us good understanding of the regular behavior, and we're going to offer that back to an asset. So we expect the combination of about 95% of the NASA payment to be received and then on augmentation for equitable adjustments for the additional data that we can, Al, we can deliver to math that puts us well over 100% of the planned payments.

Mike Crawford

Excellent. And then just finally at one kind of broader question that while we're waiting for Department of final NDA with besides just a continuing resolution we do have a massive budget, although it's flattish. Is there anything you like or don't like about the NASA budget you see?

Stephen Altemus

Well, we are all like I said in my comments, the budget is probably $2 billion less than requested by NASA. And when we first looked at it, it looks like the road map that we've put together as it as a company for commercializing six liter space and providing infrastructure to the Moon is fully supported. And we like that. That puts us. That means we're on the right track and it shows that the government is still committed to returning to humans to the moon and sustainable way. And so that's really a fantastic outcome to have such strong bipartisan support for the Artemis campaign. And we did see I did mention the O sand project, which is on-orbit, satellite servicing and manufacturing. That's under the owner's contract when we took over that contract that project had some cost challenges and schedule challenges. And so we're working very closely with NASA to kind of put that project back in the box and get it launched and under the cost bogey that that data was looking to meet. We received. We know that from the from the spending below the appropriations that that funding is in place for the past quarter in 2024. But the future is not set there. Should we NASA and us as a prime contractor, not be able to put that back in the box. There's a chance that the we'll apply that one won't be there. And so there's a little uncertainty there in the owner's contract after 2024. That's the only piece that you asked is that would give us some pause, and that's the one that I mentioned in my opening remarks.
But we're confident we have a plan for that one and we're at full funding these task orders run year by year. So there is a considerable amount of alternative work that fits that own contract. It's an omni bus, multidisciplinary engineering contract. So a number of projects and programs within Goddard fall under that contract. And so if we see the O sand project in under threat will will have a different additional work. I'm sure provided by the center and NASA can protect those jobs up in Maryland. So other than that, I think we're very pleased with where the NASA budget is.

Mike Crawford

Excellent. Thank you very much.

Stephen Altemus

Thank you.

Operator

There are no further questions. I'd like to hand the floor back over to the perceived TEL., Steve ultimate for closing comment.

Stephen Altemus

Well, thank you, everyone, for joining today's call. I appreciate your thanks for our successful landing on February 22 is truly a monumental event. Intuitive machines made history with that soft landing on the moon and we look forward to representing the United States and our stakeholders as we make more historic achievements in the months and years to come. So thank you very much. Thank you, guys.

Operator

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.