I'm here with the CEO Carsten Drachmann from GomSpace Fireside Chat Q&A live.
Yes.
I think this one has.
A bit different
a different, a lot of work. We are trying to look a little bit back on the half year in your industry. I think warp speed might be.
Yes
maybe I'm too old and-
I get it. I'm old as well.
I know a little bit about Star Trek, evolving with the speed you haven't seen in many years. Take a little bit look back how you are trying to adapt to this situation and, of course, questions from the audience. You can send in live. I will publish them and try and take them, but we already had a lot. Carsten, halfway through 2026
Yeah.
warp speed, industry evolving. What has been the most important milestones you have achieved and you have seen in your industry this half year?
Well, if you look externally, a couple of milestone that SpaceX has now launched their IPO. There's a couple of other space companies in the U.S., has really increased the interest for GomSpace. From an industry perspective, you say warp speed. There's a lot of progress, and we also see a lot of interest from many investors saying, hey, there's something about space here. This really works. If you look at the GomSpace, what have we achieved? Well, first of all, we kicked off with our new business unit structure. Remember, we have products where we are selling all the bits and pieces. We have satellite systems where we are really looking at the scaling, being able to competitively scale. We have our national and defense solutions where we are out doing complex things like Indonesia, like Ukraine, where it's much more solution-oriented.
We have our advanced missions. That's well into the making here. We can also see from advanced missions, we closed a couple of deals. There's RAMSES, which is also about deep space. We also have something called VLEO, very low Earth orbit. We are in a consortium there, I think that's really good. We closed several deals recently, just last week, just before we ended the quarter.
Yeah.
We got another contract from Unseenlabs, which was great. We also signed a big order for our kit sales. Remember the kit sales where we put everything in an IKEA bag, and the customer can take it?
Yeah.
This is really, really good, and we see a trend in that direction, that focus that we started last year to say, let's enable our customers to build themself. This is very much what they're looking for. Could we produce it ourselves? Of course, instead of you trying to, no, no, you can only do it here, we give them that. There's some good opportunities coming in there.
Yeah. If I looked at your first quarter, you really had a good profitability in this kit segment, in the product segment, I guess.
We did.
I guess that's why maybe it's also interesting for you to go that way.
No, for sure we need to go that way. The structure in the business units that we have set up follows our strategy, and we have this internal trading. Actually, our satellite systems, we are very competitive based on having all the products that are inside. We do an internal trading, so it's also to better reflect and say how important the product business is for us.
Yeah.
This is actually our core technology competence and differentiator. We can sell directly to competitors, to universities where we want it, and it also feeding the rest of our portfolio.
[audio distortion]
This is really strong.
That's helping you scale up.
It does. It does.
Yeah.
We have much more control of the supply chain. Yeah.
As an investor, you say this, and everybody can see it, everybody can see us in the defense. Have you actually started to see it in your pipeline yet? You have different business areas, especially the defense area. Have you started to see it in your pipeline? Of course, orders we will get to know when you publish them.
Yeah.
The pipeline, how is that developing in the different areas? I guess product is good, but what about the defense and advanced missions?
Yeah. No, we do see it in the pipeline. We had some orders, right? We closed an order for a Nordic, North European defense contractor. We can't disclose the name-
[audio distortion]
That's a traction there. Ukraine is actually, we'll talk a bit more about that, but it's also an example of this government-driven solution with a dual use purpose. I was just in Ankara for the NATO Summit earlier this week. It was great to come in and listen, and it is so clear that space is part of defense. You see that in everything that's done. Yes, our pipeline is growing, and we're starting to count month- by- month, also more opportunities coming in. It's a long game.
Yeah.
None of this is closing fast. I know people are saying, hey, why haven't you sold anything to Denmark yet? Well, we will, but it takes time, and it took two months for the politicians to just figure out to do a government. Just imagine how long it takes to figure out how to buy something. It will come, and we do see a growing pipeline. I would say it's globally. It's not a specific region. It's actually globally this year.
It is globally.
Yeah.
We have realized we can't control SpaceX. We can trust
Well, that's part of it.
the Starlink. European, you're saying under NATO, it is a talk down at the NATO meetings.
Absolutely.
Yes.
Perhaps also we get to the driving the pipeline. It's linked to our strategy because we created this national and defense solutions.
Yeah.
This is really where we add the value. It is a very different selling. It is not an RFQ or a technical sale.
No.
I want a satellite. Okay, here it is. Which color do you want it? It is really a lot of market-making. We do not actually spend a little time on technology. We spend a lot of understanding the solution. How do you do financing? What are the drivers in the end?
Is that what has changed with
Yes
speak with the customers?
Yes.
You are no longer speaking to universities. You're speaking to someone who just wants something to work and-
Yes
understand what it can do, the capabilities.
Absolutely. This is what we see. We also see with this government business also about financing, how do you get the financing? It's not enough to say, well, I'd really like to have this, but there has to be money coming in. We see that it's actually something that's important for us. We play in that. We have a very good working relationship with IFU as well-
Yeah
when then we go out in different countries. That's really helping engaging. In Indonesia, IFU is part of that. That's a good example that I like to tell is that when we started Indonesia, we'll get back to that in a second. It was sort of, do you want a satellite? Yeah, that's great, but I don't know what to do with it. They said, do you want a data stream telling you where the Chinese trawler is? Yes, that's what I want.
Yeah.
They were not interested in the satellite. This sort of shows a different kind of dialogue, and we are getting better and better at that. A lot of the scaling you've seen with more people is around getting people in that understand how to do that kind of selling because it's different.
On the scaling up, you have invested significantly in strengthening the organization this year. That we can see on numbers of
Yes
job posts there.
Yes.
I see that on LinkedIn and by the investors
It's a lot
and so on. How prepared is the company today to scale your production up? I have a very specific question afterwards
Okay
with a number, let's start with the general. How prepared are you to scale up now?
Yeah. We are preparing, as you can see, we are taking in a lot of people. There are different kinds of scaling. There's how do you scale by adding people? How do you stay efficient?
Yeah.
That's important. It's always difficult, anybody who's led a business where you know when you go from beyond 20, it gets harder. You go beyond 50, it gets harder. You go beyond 100, it gets harder. When you approach the 300, it's really hard. There's a focus on people scaling, and I'm very much focused on people. It is all about people.
Yeah.
That's one thing. The other side is, of course, how do you take your technology, where you're used to doing two, three, four maybe at a time in a period to now you need to build 100? This is, of course, what we are practicing. We have taken approach, though, that to say we want to keep the profitability that we have. It's still quite unique in the market.
Yeah.
Very few of our competitors are making money, including Elon Musk. We are competing with him.
Oh.
I have to say. It also means we are not just throwing a lot into, okay, let's build a big factory. There's a lot of factories around right now.
Right.
We are really trying to scale in a sensible way up.
Scaling through partnerships and by OEM partner.
Scaling through partnership, but also scaling through actually having business because what's the point of building a factory if I have no business?
Yeah.
We are planning ahead so that we are ready to act. When we see this really start to be traction, we can also quickly scale up.
Now we get very specific. I don't know.
Yeah.
If the SEK 650 million order lands within six, can your current setup absorb it alongside existing commercial work,
Yeah
without material extra cost? Meaning maybe you need to outsource a lot of things. I know you don't want to give me exact number what you are able of, but this order everybody's talking about, SEK 650 million and so on, could you absorb that together with all the other work with your current setup?
This is the KKP Indonesia, right?
Yeah.
That's what about here. Yeah.
Yeah.
The answer is yes, we can absorb it. There's a reason is this is still in this CubeSats space, the size, we have communicated that earlier, and our factory is built for that. We have more room in the factory to do this. It's pretty busy now. We are optimizing a lot. It looks more like a sort of a streamlined-
Yeah
you'll see it, assembly line kind of thing. There's room to do that. Where we need to look at scaling is that when we start having to build larger satellites, the microsats. We can handle what we're building now, but if you need to build 50 or 100 per year, it's just a different environment. 200 kls.
Yeah.
A 20-kl satellite, you can sort of flip it on the table by hand.
Yes.
If it's 200 kls, you can't.
No.
It's a different kind of environment. There's also different tests there.
Do you have the space around your factory to build the new production lines or?
There's lots of space in Aalborg. Trust me. They keep calling every day. That's not a problem.
You haven't put the spade to the ground.
No. Well, we're not going to do that.
Right.
We'll take an existing building. We also agnostic. I think one of the things that we see is that, especially in government business, there is always a desire to have local assembly. We are very wary about or making sure we understand should we build that factory, fully scale it ourself, or are we actually entering into a partnership with a government that says, but you know what? If you ship the technology, we will put it together, and then we focus on that.
Yeah.
This is a fine balance, and I think we're doing it quite well, but we meet it everywhere we go with government business. They really want to have their own production site, which is great for us.
Yeah.
Hence the kits.
It kind of makes sense, right?
Yes
The German orders will actually come with a German part of production, right?
It has to, right? It has to.
I guess that your product business making more and more sense, right?
It makes a lot of sense.
Yeah. A little bit about your confidence in your guidance. What gives you the confidence in delivering on that outlook? I have a little bit more specific questions.
Yeah.
You are in a business where large orders can come and move a little bit around, and so on, and you also need to execute on the production. What gives you confidence in your guidance?
Well, let's repeat the guidance. We're basically saying to the midpoint, 30% growth-
Yeah
on revenue, right? We are maintaining an EBITDA from, I believe it's 5%-12% guidance, and then the free cash flow is negative, but operational cash flow positive.
Positive.
Right. This, of course, is easy for me to commit to the free cash flow negative. Let's just spend more money.
Yeah.
I don't like to deliver on a promise.
Yeah.
The money we spend is for a good reason. We delivered okay on the first quarter. If you look at the order intake we have announced in the second quarter here, it is also quite okay. You can add it up to about SEK 100 million and I think we have announced around SEK 100 million-SEK 110 million, if not more, public. Then, of course, we have a lot of smaller orders
Orders
that we do not announce.
I get the product orders you do not announce everything.
Some of them are very small. Sometimes we do this accumulated when we think it makes sense. We have an okay order intake that we have already announced. That is okay. We are maintaining our guidance now. I do not want to change it now. What can impact the guidance, perhaps, is the question. Well, obviously, larger orders
Yeah
that kick in that we can start quickly will make a difference. I'm not going to change the guidance until I know that it's there, and I know all the terms and conditions. There can be many things.
There's a question here, how much have you covered? I don't think you want to give us that exact number, but you're pretty good covered. You are actually, if I listen to you, and don't take my word for it, you are more looking to large orders giving you upside than being afraid of something not coming in and need to look down, or am I a little bit too forward here?
You may be too forward, but I will narrow down the guidance when we get a little
Yeah
into the year, right? By the way, I think that's another parameter that I think our investors understand very well. If you think about the product business, it is very quarter by quarter. Remember, we talked about that. To be competitive, we have two to eight weeks delivery time.
Yeah.
We closed this great order for this kit sales that really also boosted our confidence. Okay, this was a good one. There will be more, but I don't have this long visibility because it's such a rolling thing.
Yeah.
That can impact up and, of course, also impact downwards. I just don't know yet. I don't know yet. I'm happy with the pipeline I have, but I cannot know for sure when it's closing. Of course, there are some uncertainties, but to give some kind of idea, of course, what people should look at is saying if we execute with average speed and taking in a reasonable amount of order intake every quarter, then we are okay, and you will see those orders. If then something big hits, okay, maybe that changes again.
Yeah. There's a question here, Indonesia, Indra, Ukraine, and Denmark. I guess by Denmark, it's meant here that you're going to cover the Arctic. If that comes in, that's upsides
That would be upside.
upsides to the guidance.
We never plan with something like Ukraine before we have a contract. That would be not very smart of me to do that. Of course, it's upside. Mind you, to be fair in terms of how to evaluate it, obviously the later in the year it comes, in terms of turning it into revenue and EBITDA, you have shorter and shorter time.
I guess in your industry right now, everybody is wanting to tomorrow.
They want it fast.
They want it fast.
Yeah. For sure.
I guess, in the old days at university, 2027 is fine if you
Yeah. It's changing
I guess more will turn into revenue fast, I guess, in the historic-
Yeah, it's about how fast also we execute, of course, right?
Yeah.
Ramp- up. Yeah.
Yeah. There's a question here. I mentioned these Indonesia, Indra, Ukraine, and Denmark. Which one are the most realistic in the short- to medium- term? I don't know whether I can get an answer for that.
No, they are all in. Let's start with Denmark. Well, you see, the new government is in place. I met with our new Minister of Defense, Jeppe Bruus, at the NATO Summit. That was nice. It was a handshake. He is a very busy man. A lot of respect for what he is trying to do now in a very short time. The whole Greenland discussion, it is so obvious. Of course, it is still there, but decisions are taking time.
Time.
They are still arguing about whether they should do ships or not. We stay in there. We are also working with the industry, which I think is important. There are different other players in the Danish market today. Of course, we are pushing. How fast? I do not know. We will stay in the game. Indonesia is still there. It is the same story as before. No news is good news.
Yeah.
It is still moving on. We are in regular dialogue with them. They are doing their process. I shared before, Indonesia understands that they need to have satellites, and I think they understand it even more now than before. That has also led to a big discussion to say, what is actually our strategy for satellites in Indonesia? This is also why it is dragging out a little bit, and we are right in the middle of that. It is not a bad thing. It is just for us, of course, annoying that it is taking longer.
Yeah.
Perhaps for a good reason, and we make sure that we are very close, so we always keep, let us say, our part flowing. I know that they will do a lot more than just what we are looking at right now, and we are engaging where we can.
Let's look at the Ukrainian.
Yeah. Let's talk to that.
I think that there's a lot of questions around that. This joint venture announcement.
Yeah.
I think there's someone saying you promised something in May, and I don't want to hang you up on that. The vision of 100 to 300 satellites, is it financed? How do you scale it up? Who are the partners in this project?
Yeah.
Is your partner stable enough to be able to scale up to this speed? If you can talk a little bit about this STETMAN Ukrainian joint venture.
First of all, very sad news, I know some of our investors picked it up that our partner, Dmytro, he was 45. He died 10 days ago. We just had dinner in Aalborg, he didn't speak English, we were having good fun with all kind of AI translation ordering sauce béarnaise, that was very sad that he was gone two days later. Simply had a blood clot. Of course, that has put their organization very upset. The company has stated, you can go read their LinkedIn, that they are committed. We are very committed to continue. His widow is taking over the company, I'm going to meet with her. We have met with her in Ukraine, some of our people, I will talk with her in the coming weeks. Of course, it's saddening and it's understandable.
That makes.
That messes things up a little bit. Maybe to answer, there's another thing that we have said we will launch a satellite in October, that's still the plan.
Okay.
That satellite is sort of a precursor for understanding how much coverage do we need, what are the critical areas if you fly in this orbit with this so-called inclination looking down, what do we need? This is a precursor, and that's still the plan, and we are working with STETMAN to set that up.
By precursor, you mean that's kind of the leverage to go out and negotiate how much you should scale up.
Yeah.
Get the financing, I guess.
That's one thing. Just to show that it's there, of course.
There, yeah.
It's also a technical study, if you like, to really understand what are the critical areas and what kind of coverage do we have so we make sure that when we go into launching the full network later down the road, then that's then going to be the right network, so to speak. Let's talk a bit about financing, what's happening. I think I said the requirements specification overall is clear. Get rid of Elon Musk and have an alternative means of communication. Okay, so that's where we are working from. There's a lot of support from EU, all that billions of euros being released. You read every week there's something more coming out. Yeah.
I read EUR 70 billion from NATO.
There's a lot. We are also working there. It's a good example of when we are in the solution business, one thing is the technology side, but we are actually working very closely with EU. It's called DG ENEST, which is a EU Commission development towards the east. We're working with IFU, we are working with the European Investment Bank. Part of our job is not just to, hey, buy the satellite, somebody else figure the rest out. We are creating this case by also having all
investors coming in.
There's a question here. Your balance sheet is actually maybe not that interesting. Whether STETMAN and your balance sheet, it's probably going to be financed in another way. It's the production capabilities and this joint venture.
Yes.
Are you confident in that part?
Of course we build that. We have practiced for 20 years to be good at this, and we will scale it up, and it will, in any case, the working assumption is that we'll start building in Aalborg when ready, then maybe we build in Ukraine. That is also open. That is why I'm a bit cagey about saying too much because there are many moving parts.
Yeah.
All I can say is things are moving forward.
Moving. This satellite is what we investors maybe should look out for. You're showing that up.
Yeah. That is absolutely the plan. Together with STETMAN and also to understand STETMAN a little bit more, who are they? Well, first of all, Dmytro, rest in peace, he was the visionary here driving that.
Yeah.
Having a lot of the relationship with the MOD, Ministry of Defense. We have now all of that relationship
Yeah
after his passing. His specialty is actually building terminals, satellite terminals. He's delivering a lot of the terminals for Starlink right now.
For Starlink.
His vision was, okay, they don't want Starlink. They want something else. Let me create that something else together with GomSpace.
They have technology capabilities down on the earth to communicate with the military.
Yeah.
They just need the signal from the
Well, they need the signal. Right. It's not going to be STETMAN per se that's going to produce the satellites. That's our job.
Yes.
We do the joint venture and we do whatever we do.
They have a very technology down on the ground.
Oh, yeah.
They are talking to militaries.
They understand satellite terminal. Oh, yeah. Absolutely.
Yeah.
They're selling a lot today to the military.
Yeah. Perfect.
They do these ruggedized terminals. A lot of them are used in the front, which means they have to be able to withstand a lot of rough environments.
Yeah.
That's their specialty and that's what they're looking for.
That part is actually, they are already doing that.
Yeah. That's well-covered.
A little bit about this UA set capabilities. I was talking to other European customers about that, I guess, IRIS² and so on. What are the talks here?
Yeah.
IRIS² and are you specifically with other governments who also understand that maybe we shouldn't trust Starlink?
IRIS² is a European initiative, right?
Yeah.
It's under sort of half under ESA, EU, now owned by Eutelsat, there are some more investments coming in. All of that is typically running via, I think ESA is covering a lot of it, so funding is going that way. We are receiving RFQs for bits and pieces. We are not going to take those full satellites. That's not our play. We don't have
The product business test that was going to
Yeah. For the product business, for bits and pieces, we are getting and evaluating what we want to do. I think you need to look at it a little bit different. This is the European answer, but for Ukraine right now, they have a different need. They don't want to wait for that. The other thing is that do they want to be dependent on I don't know, just open question. Even on an EU system, to be seen. If you look in Germany, the German government are also pouring, it's also in the news, money after saying, maybe we build our own communication network. We don't want to wait for the European initiative. We think it takes too long. There's a lot of these moving parts, and our job and what we do now with our business unit is following all of that.
The best thing we can do right now is to build our experience as well in Ukraine. We have all of this financing coming in here. There's private investors that needs to be lined up. We are developing the technology. We have different partners, and this is a truly end-to-end solution. We have to deliver everything, not just the satellite. Everything.
Yeah.
Ground segment, everything needs to be there. Terminal needs to be ready. It's a huge enterprise to set up, but we can see there's a need, and it all starts with the need. That's what we're driving. Then of course, we are monitoring all the other initiatives. For us, we can get Ukraine rolling. That's good.
Yeah.
That's in the bag. We can take that later on.
I guess what I heard from all defense companies, you need to prove it on the battlefield in Ukraine.
That's it.
Let's not hope that's correct, because we want a war to end.
Yes.
We don't need to prove it on the battlefield.
No.
I think that's what we're hearing from a lot of.
Yes
I guess that's kind of, if others go and see this works there, that could be a.
Yeah, that could be and it's a relatively, nothing is simple and easy, but it's a relatively fast way to your own sovereign network.
Yeah.
You may not be able to cover hundreds of millions of homes or users.
No
That's not the point, right?
It's the military usually.
It's the military, right?
Yeah.
The ambition level is a little bit different from, well, it could also be for civil use, right? Or.
Yeah
Responders, rescue, et cetera. It's a little bit different ambition than what Starlink has. It's really having something you control yourself, and you can always expand it later on.
Yeah.
Let's say, it's not going to be cheap, but let's say it's a cost-efficient solution for sovereign use. I think that there's a sweet spot for us if you can develop that can be replicated.
Yeah. Ukraine is going to be kind of a
That's going to be the test
showcase. Yeah.
Yeah. A showcase.
Yeah, you talked a little bit about it, and there's a lot of question coming in on this. Consolidation.
Yes.
We already seen Rocket Lab buying Mynaric and so on.
Yeah.
Are you best to do this yourself? Is this too capital intense industry joint ventures with defense industries, so you don't need to have the capabilities for the terminal, just the satellites? Any thoughts about the consolidation you are seeing out here? I also heard you were invited to Bernstein to an Investor meeting.
Yeah
Everybody's looking at space.
Yeah.
Everybody must also be looking at.
Yeah
which companies can we put together to make this.
Of course.
Defense. I know you're not going to tell me that's going to happen tomorrow, it must be.
Oh, no.
It must speak about a much bigger partnership with defense, maybe consolidation of these satellite companies.
Yeah. It's happening right now.
Yeah.
People are buying. Maybe if we wind back a little bit and say, where were we three years ago when I started with GomSpace? Well, it was a turnaround case. Everybody knows that. Market cap was all the way down. We were losing money. Thanks to Peter Hargreaves, we were sort of able to get in enough cash just when I started. Then we've been really spending two years just working off what we had and making sure that we could turn it profitable. I had to manage cash and show that we can be profitable.
Yeah.
This was very much focused on the investor source, I wanted to tell a story, say, we understand how to run a business, because I think this is a key. There are a lot of innovators, entrepreneurs out there, they don't know how to run a business.
Yeah.
They're pretty good at the technology, but they don't know how to. I wanted to show we can do that, and I hope investors acknowledge that we have shown that we can do that. Now, that's been taking two or three years, and now we are at a different stage, of course. When are we really starting to look at, okay, top- line is going up. I need to catch up on some technology and go ahead on certain technology, and of course, you're always in a make-buy situation, meaning should I do it myself?
Yeah.
Is it actually more attractive to me to take somebody who's already done it or almost done it and then say, well, we can integrate it? Of course, we are looking at things like that. I think how to look at it is that we have a business model now with the products. We have a very strong go-to-market model. We can do satellites in scale. We can do solutions. We are really well off. There are a lot of companies out there that do one or two pieces. We have 250 pieces in our product portfolio.
Yeah.
They do one or two. They might be competitors to us, but they will never be able to scale really. Really, truly scale because it's such a niche market many of them having. These are, of course, companies that are attractive for us, either on a partner, just on a supplier, on a partner basis.
Yeah
On a more integrated basis. We have a lot to offer, especially for companies that have strong technology but really needs to scale. It's expensive to go to market. It's expensive to take what you've been able to sell in a local market and take it to Asia. It's not so straightforward. We have a huge advantage there. I think we are super attractive for a range of, let's say, small and mid-sized companies.
companies
Yeah
to be consolidated in
Exactly, yeah.
To be in a profitable business model.
To come in and
Yeah
to benefit from the network we've built up. Now we have, actually, speaking about that, our Chief Commercial Officer, Thomas Pfister, is unfortunately moving on. Very sad personally.
Yeah
It happens in life. He's been there for quite a long time. When he's moving on, we actually, rather than replacing him one-to-one, we are now splitting up. We have already North America, U.S., Latin America there. We're going to have Asia, and we're going to have EMEA. Asia Pacific as a region.
Yeah.
Sales region and EMEA. We're going to hire two senior sales executives. Also as an illustration of how we want to accelerate, and have a Senior Executive presence in more and more places. I just can't travel anymore. There's just too much places to go, we need to up it.
To up that.
Yeah. Especially in Asia, there's a lot of opportunities.
opportunities.
We're investing in that, and this is to the benefit of others as well.
A little bit, going back, not the consolidation question, because I actually heard you being the one who wants to do it.
Oh, yes.
I think everybody's always as investor could someone also buy you. I know because there's a high interest. It's more talking into this profitability. You're still missing the cash flow. There are some discussions out there.
You need to scale up. If you need to scale up, it's probably going to be capital intensive. Then there has been this
Yeah
Euro investor commentator commentating.
Yeah.
Great idea, great company. Always not running. I guess you would like to be in studio there, maybe explaining him profitability and operational cash flow-
Yes
So on. I know someone can live a little bit in the-
Yes
in the past.
Yeah.
Any comments to that? Do you feel comfortable about it? Is that your product business with a very high profitability? I looked at this. I wrote that in our investment case. Everybody should look at that because that is your key to be able to scale up, that you are profitable, very profitable here.
Yeah.
Is that what is giving you a confidence that you can do this yourself and we don't end up with the old GomSpace history? You can grow, but at some point in time, profitability starts to go out. The cash flow starts not to be good enough to finance the growth.
Yeah.
Any comments to that? Is it the product business that is giving you this confidence that you will avoid this situation this time?
I think the confidence lies in the different go-to-market models. The products is one, satellite system for be able to scale, and then the solutions business that we have there. Let's look at what you need. First of all, we say we have positive operational cash flow.
Yeah.
Right. You will always have negative cash flow until you're profitable. GomSpace hasn't been profitable until last year.
No.
Of course, there has been a negative cash flow. Now we have turned that around, and I have said before, my goal is really to keep that EBITDA positive, whatever percentage that is.
That in basically would mean, minus the working capital, you are also cash flow positive.
Yes.
There can be some build-up and so on.
Yeah.
We can get into the depth of that.
Yeah.
Yeah.
No, exactly.
That is what you are
No, that's what I'm seeing.
That's the business model you're sure you can run.
We can run that, and then what you need to look at is and say, okay, do we want to just be at this size right now? Question to investors, do you want me to stay at this size? Do you want me to be bigger?
Yeah.
I think their answer is, please go bigger, because bigger creates more value. That's of course, the situation we are in. In order to be bigger, you also have to be able to move forward. At the right time, we will make the right moves. It is absolutely in the interest of GomSpace investors and customers that we do that. If you look around in the world, all the investments are going in. How do you think that we can compete with that if we say, oh, no. We're not going to do anything. We're going to stay at this level.
Yeah.
Of course not.
No.
There is a tremendous growth in this sector. Elon Musk is going out raising billions of dollars. There's a lot of acquisitions going on. The whole trend with space is defense. There is so much opportunity here. The last thing you want to do is sit on your ass and do nothing.
Yeah.
Right? That's the last thing you want to do.
It's not to run your business, it's to scale your business.
It's to scale our business.
Yeah.
Right? In the past, remember, for the most part in the past.
It was actually to run the business right.
It was simply not to go run out of money.
Yeah.
We are in a different stage. I can run the business for this, but I want to do much more than that. Actually, people shouldn't be so worried about it. It's really about being able to scale up, and I think we have all the right ingredients to say. When the time is right, we will see where we are and what we need. Right now, there's no ambition to not be EBITDA profitable, which means it's positive operational cash flow.
You say investors want that. Is the clear answer right now that the valuations are so good in this industry that of course you should? By valuation, I mean it's not expensive.
Yeah, the market
to get the capital to do this.
I'll let people speculate in that.
Yeah.
Of course, there is an element of, yes, there is a tremendous momentum, and if there's momentum in a business, you're either in or you're out.
Yeah.
You can choose to be out, but it's probably going to be a relatively conservative route to something that maybe you're not capturing the moment. How many other businesses, there are a few, there's maybe AI, but how many other industries in the world do you see today that will have these kind of growth rates? It's really not a lot. It's high tech and it's the future, and before we went on here, we talked about this TV show, For All Mankind, where they continue the lunar missions in the '60s. What if? This is what Elon Musk has described.
Yeah.
This is so exciting, how we feel like this is so exciting. There's so much opportunity here. Let's capture that moment that we are in now. We have stabilized the company. We have the competencies and skills. We have the market understanding. We have the brand. We have everything we need. Of course, we need to be on that train, and then we'll see exactly what that means. I have no ambition in driving this into another negative EBITDA business. That's not the plan.
No.
For sure. Yeah.
Around your business model, your commercial model, let's go a little bit into that.
Yeah.
I think there's question out here. Are you moving more to be a product-oriented company, or do we still go after this SaaS business or Subscription as a Service where you run the whole systems? Where are you seeing yourself going right now under different business models you can choose?
Yeah.
I know you still have them all three.
Yeah
At some point in time, you might want to, this is the direction I want to go in.
Yeah, I know people say that. First of all, let's kill the Software as a Service. That's an old strategy from eight years back.
Yeah.
People may remember, right? My strategy is very clear. The product business is very unique. It's very transactional. We are making good money there. We need to continue that. Satellite systems is about scaling and being able to build in volume. That's where you want to be. You want to capture the big growth, you have to be able to deliver in volume. There's National Defense and Solutions is capturing this whole momentum with the government business, the defense business.
Yeah, the delivering of the whole system including in the [audio distortion]
the whole system. This is the growth area, right? Advanced missions for capturing a lunar, which let's say 10 years from now, that the lunar and defense business could be super lucrative over time, but that's a long-term strategy. The solution, if you look at that, where do you make money? Well, we make good money on the product business. You can see that already. Satellite systems will probably be lower percentage contribution relative to others, but this is where you have high volume. The solutions business is good business. I've been there before also in my Nokia times. It's good business because it's value-based pricing. It's not the price of the satellite.
Oh, yeah.
It's the price of what you deliver. Yeah. Services on top, so far we've said, well, we're not really interested in competing with our customers, who are typically the ones that are providing one service or another, be it a SIGINT service or whatever. That's not where we are moving as it is right now. We are building this sort of one-stop shop.
Sure.
This is a very comfortable place to come when you want to realize your business case. That's our focus.
There's also a question here. If you built this in Ukraine, it starts to look a little bit like a communication company. I'm not sure only whether that's the STETMAN who you are a joint venture that will own the communication and the terminal, and you're just delivering the satellites. You're not going that way. Are you going to these incumbents and want to compete there, or is it purely the satellite business? Actually, if you look at the three business lines, what are your value proposition against, you might say, the incumbents in this business?
Yeah. Well, let's start with the service part. This is where it becomes solution business. I want to sell satellites to a network in Ukraine.
Yeah.
In order to sell satellites, somebody has, excuse me, has to provide a service.
Service.
Right?
Yeah.
Somebody has to provide a service and needs to be a service company. Similar to Starlink, as the best example that people know. There has to be a Ukrainian service operator in place. Otherwise, I have nothing to sell. A lot of the work that we are doing right now, we are deeply engaged into creating that. That doesn't mean that we are going to be the one running it, owning it, or anything like that, but I can't sell any satellites unless.
No, that's happening
Unless I do, right? This is part of where we are in and want the investors to understand. It's a unique opportunity. Of course, I also challenge this whole market making, but we can actually make a market. We can make that opportunity in Ukraine, but we can't do it by just saying, here, take our satellites. I have to work the whole EU network. We have to use the MOD. We have to have private investors potentially coming in, setting up a service company, and then we get the contract.
Yeah.
It's a very different business.
Nothing has really changed by this. You're not going up against the incumbents here, and you still want to run all the three business lines.
Yeah. That makes sense. Yeah.
Because always you say, I know for scaling up, it makes sense
Yeah
to have the systems.
Yeah.
Competing margin-wise, the product business is, letting everybody else build it and
Yeah
really run the product. Is that too dangerous a way to go?
I think it's too unambitious to stay there.
Yeah.
If you look at the logic-
Yeah
I know it's sort of engineering beauty inside, the product business is very lucrative in and of itself. The product business is driving our satellite business, the satellite systems. That's why we are competitive, because we have all of these pieces. In terms, the solution business requires that we have this ability to scale satellite production and that we have the products behind. It fits together beautifully. We have so much control of the supply chain, that really makes sense.
Yeah.
Now-
Staying competitive, I guess that's also development of your-
Of course.
Yeah.
Of course, a continuous development. If you look at, you said before, the consolidation, it's not ambitious enough to say, we need to focus on our satellite. Focus, focus. We're actually pretty focused on some pretty good strategies. That's also why we've set up the business units, because-
Yeah
they're very capable people. I don't run each business. There's a mini CEO running each business. It makes a difference, and we run it as a P&L. Look at Rocket Lab, we mentioned that before, and see people are writing about that. They're buying up. Go to them and say, oh, you're not focused. Oh, they're very focused. They're going to buy all of this stuff, and they've done it for years now, right? They're growing. They're not worried about being defocused. They have a very clear strategy saying, we want to be the leader in space as such. We want to be the leader in enabling anybody's business case and ambition in space. That's who we want to be. I think we need all the bits and pieces that we have right now to do that.
As you always say, the SpaceX and the Blue Origin and so on, they're totally integrated companies, can build everything.
Yes.
I guess you get this question, how much are you going to deliver to them? I guess you always.
To SpaceX?
Yeah.
Yeah. No, SpaceX is vertically integrated, right?
Yeah.
The same with Project Kuiper, which is sort of the Amazon answer to that. They have a different approach. They have so much money, and they're saying they're building only for volume, so they build one type of satellite.
Satellite.
They take everything very close to heart. I'm not really interested in that.
No.
Yeah
The second question would also be, if they are going to win the space data center space race.
Yeah
I am not saying they are, there must be someone else now being afraid and don't have access to an integrated satellite model. I am starting to speak to someone about your products and how we could build that, and how you could deliver some of that into something.
Yeah.
I'm only speculating right now, but if I were sitting and owning a data center, I would say, okay, I don't think space is working, but what if it does?
Yeah.
Any conversation there yet? You would have two competitors that would not sell anything to you, and they have the only way.
They wouldn't buy anything from me either, right?
Yeah
I'm sure it's good that we have SpaceX and Starlink and Amazon with so much cash to drive some innovation in that direction. That's fine for us. They don't do signal intelligence. They don't do imaging and earth observation.
Yeah.
We're looking at
Different
a number of other things. Remember when we talk about these satellite communication solutions for sovereign use, it's not about these huge networks they're building. We have a very different target market here. I'm not so worried about that.
You know what? I think we need to start ending this. I will give you the question I always give someone. When you look ahead the next three to five years.
Yeah
I guess it's impossible.
Yeah
In this industry, what excites you about the most in the market and about GomSpace? What excites you the most in the market, and what excites you the most about GomSpace?
Well, the market is the acceleration that we're looking at now. There is so much more opportunity. Space is being accepted as a true enabler of many solutions, be it space, be it defense, be it for dual use, civil use, illegal fishing in Indonesia. There are so many things coming now. Forest fires in L.A., right?
Yeah.
In California. All of these kind of things. We could do something about it from space. I think it's super exciting, and it's not boring for engineers, and that's why we have a lot of applicants coming in. People really want to work for us because this is not boring. This is pretty cool stuff.
Yeah.
As an engineer, this is cool stuff. The market is really, really there. For GomSpace as such, like I said, we've been practicing for 20 years, and I think now we reached a point where we have the capabilities here. It's for us to win and capture that market. If you were to look at, what should the investors be excited about? I think the same thing. They're investing in a market that's actually going to grow. It will go up and down, of course it does. That's just the nature of business. But what to look for is that we now have had a very big growth. We are forecasting 30% this year. Market is growing an average 14%-15% for this market of up to 500 kls of satellites.
Yeah.
You can find different research. You will see, and what you should be looking for is, I will try to stay on that track of this, whatever, well above market growth in average. We do that by closing a deal here. We got a new customer in Italy. We're working on a new customer from another country. We're adding customers. We have existing customers that keep ordering. Then we look for the Indonesians, we look for the Ukraine.
Yeah.
We look for the other ones that are going to give this boost. You can't try and factor that in and say, oh, we're going to go like this. When you say no, what I want to go is a steady growth with steady business Then we're going to hit the jackpot once in a while-
Oh, it's a matter-
that's going to catapult us into the next level. This is what you should be looking at. I think be comfortable looking at the order intake. As long as the order intake is in the range of quarterly revenue, you can look a year back-
Yeah
Say, well, worth it, right?
The big jackpot.
Even right. The jackpots will come.
The new areas that prove Ukraine, it can, yes.
The jackpots will come eventually, right? This is now what we need to look for. Yeah.
What gets me excited, maybe that's a little bit leading.
That's good.
No, in this industry is this, how much money Elon Musk have now gotten to his vision. I know that this isn't his space, they are going to be built on Earth, he's going to build a lot of money on building the rockets that can land and go up
Yes
meaning it will go down by a factor of-
Oh, yeah
many to send something up in space.
Yes.
You say we have the use cases for it right now.
Yes.
Now we just need the economy and
Yes
it's sending it up. Is that also exciting? Do you believe in that story.
Yeah
that he can actually succeed with not by his timeframe and sending 1,000 rockets a day, but it will go down heavily, the price of sending something to space.
I think you can say a lot about Elon Musk, he has proven that if you put your mind to it, and if you can find the money, which he had been able.
Right
You can do it. He is miles ahead. He's probably 10 years ahead of Europe in terms of space launch, right? It's embarrassing for Europe that we have not been able to get our act together. Absolutely, he will realize that. Of course he will. Why not?
That will give a boost to the whole industry.
It will give a boost.
Because the cost will go down on.
The cost will go down. You can launch something every two weeks. Right now we're talking something per quarter.
Yeah.
This year, that quarter, that quarter.
Yeah, actually on an hourly basis.
Whatever.
he has promised them.
Yeah.
Not on a whole year.
It will change. Right. There's a lot of other rocket launches coming.
Yeah.
The big ones, Ariane 6 or Arianespace in Europe. There are other launcher rockets. There are also a lot of smaller rocket companies now. It's called a dedicated rocket. You buy a rocket, you can launch eight satellites. It's more expensive, in principle, you control it. You're not beholden to anybody else's timeline. There's a lot of dynamic. There's some congestion now in that, it will ease up.
Ease.
It will be better in commercial.
I already said that the global trade is now 15% of global economy. Would never have happened if we didn't build the container ships, because in the old days, you were
Yeah
bringing sacks on board. No.
Yeah
just understand that how much bigger of an economy-
Yes
something will be is dependent on the enablers, I guess this rocket being caught and sent up like a plane again, I know it's not tomorrow. That must be a huge enabler. You're looking into the industry-
It-
Investors starting to understand that and asking you about that.
That is the thing. We get so much interest into GomSpace now.
Yeah
from other investors because of this. The momentum there is in space and the vision, and I really encourage our investors looking in, read the prospect from space, try to understand the vision for the industry, that this is moving and it's already in reach. It may not happen in six months, maybe it takes six years.
Yeah
If you look at the scale. We are strong in Luxembourg. I think it's a great story. This adventure we do with Blue Origin to invest this company.
Yeah
about mapping out a lunar mission. It's funded a lot of it from Luxembourg. Why? Because Luxembourg is traditionally a mining area. They have a lot of mines from the old. Guess what? Where do you think they want to mine next?
Moon.
Space, right. They're such a small country, why would they have this huge space program? They're much more active than we are in Denmark because they want to be mining in space, and that's their vision. Imagine, we will be mining on Earth, and we will be mining on Mars over time. GomSpace is part of that. If you take a little bit longer view, 10- 15 years on GomSpace and the investment you do now, it's pretty interesting. Look at the people that invested in Novo in the '60s and '70s. They're very wealthy today-
Yeah
if they kept their shares. It's a bit the same vision you need to have here on GomSpace.
Perfect. I think that was a perfect ending. I will also remind people that maybe we weren't that specific on the numbers. There's a reason. You first have to deliver your Q2 results. There's a link out there you can sign up for.
Yeah.
We will go more into the numbers. Maybe people hope for that, we would kind of break a lot of rules, we stayed in the-
We stay here. We stay here. Yeah
helicopter.
Yeah.
Thank you to everybody for listening in.
Thank you.
Thank you to you, Carsten, for giving us kind of a look at your industry right now.
Pleasure. Thank you, Mike