00:00SpaceX is set to report its first earnings after the bell with investors watching AI spending, Starship, and launch demand.
00:06Joining us now is Jim Cantrell, CEO of Phantom Space, a startup that builds launch vehicles and space infrastructure.
00:12Jim, can I just get the take from you? What's at stake for the entirety of your industry through these
00:18SpaceX earnings?
00:21Yeah, I mean, SpaceX is really sort of the leading indicator of the value of the space industry as it
00:27goes into the future.
00:27So a lot of our fortunes are, for better or for worse, tied to how well SpaceX does.
00:33So we all hope that they do very well.
00:35One of the things that people are watching is who survives in this industry.
00:40What's your niche and how are you trying to fill that compared to some of the competitors you have?
00:46Multiple launch companies out there.
00:50Yeah, so, you know, we're building, for terrestrial analogies, we're building the roads.
00:57And the infrastructure and space so that the next SpaceX's can thrive.
01:02So we're building the launch vehicles.
01:03We're building the satellites and the data capabilities for the next generation of SpaceX's.
01:09I just wonder, with all of this, investor willingness to continue to fund it.
01:14And, Jim, you know, you've been through these trials and understand this better than anyone.
01:18You, of course, had Vector Launch, which at the end of the day failed to continue to get financing.
01:22And that made it difficult to just exist.
01:25We are starting to see in bond markets, for example, SpaceX debt has been trading below par for some time.
01:31The shares of it itself has started to fall.
01:34Are you noticing any investor sort of pushback that might echo past times around just the amount of capital this
01:40takes
01:40and the amount of cash burn we typically see in this industry?
01:44Yeah, you know, for the last 25 years since we started SpaceX back then, you know, investor capital is always
01:52scarce,
01:52especially for more risky kinds of ventures of space.
01:56And so there's always pushback on how much capital is needed to do these things.
02:01And if you look at the companies that have succeeded, they've all done it very capital-wide, including SpaceX.
02:07In the early days, they got their first rocket up for $100 million.
02:11At Phantom, we're on par to match that kind of performance.
02:15So the ones like even Richard Branson's Virgin Orbit, they raised billions of dollars and went under.
02:20So there's always that issue.
02:22And you find that these markets are cyclical, that they go into a hype cycle, and then they go into
02:28this deep down cycle.
02:29So where are we today?
02:31Who knows, right?
02:32There's so many macro elements that affect that.
02:36But space is here to stay, and it's a long-term positive investment.
02:40It's like North America was 500 years ago.
02:43This is the new frontier, and it's going to have its ups and downs.
02:47Well, what are you going to do to survive and to continue attracting capital?
02:53Yeah, at Phantom Space, we're extremely frugal.
02:55We have very low burn.
02:57We have very experienced people that have done this before.
03:01And as we say, it's not our first rodeo.
03:04So we know what not to do and what to do.
03:06And we focus on profitability at Phantom.
03:09We focus on making a vehicle, for example, our Daytona, that actually creates a strong profit and contracts that generate
03:17the revenue.
03:18And so we've got some pretty big names lined up to announce later this year on some big contracts.
03:24And NASA just upped our contract with them at Vader for a billion dollars for launch services.
03:31So, you know, if you can perform and create value, then you'll be fine.
03:38How, as you look forward again, do you see competition in this space?
03:43Because SpaceX, obviously, especially post its IPO, got many excited.
03:47There are other competitors in this space.
03:49A lot of VCs funding various space companies.
03:51What does competition look like, Jim?
03:55So, SpaceX is truly not a competitor to anybody else.
03:58They're almost like a nation state.
04:00You know, as they've evolved, they resemble, you know, a lot of countries that have their own launch capabilities, their
04:06own satellites, their own communication systems.
04:08So, truly, they don't compete with anybody else.
04:11And in the end of the day, they're looking at planetary settlement, which nobody else is doing, not even nation
04:16states.
04:17So, the rest of us are filling in behind SpaceX to essentially what they're leaving behind, which is this entire
04:23space economy that SpaceX grew that is now underserved as SpaceX goes on to use launch more and more for
04:32their own internal purposes.
04:34So, there's room enough in this business in the United States, for example, for five other launch companies.
04:39And there's about that many that survived the last nuclear winter and launch.
04:44And they'll go forward and be profitable if they execute.
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