Intuitive Machines, Inc.LUNR
Intuitive Machines, Inc. Revenue Disclosure
NOTE 3 - REVENUE
Disaggregated Revenue
We disaggregate our revenue from contracts with customers by contract type. The following table provides information about disaggregated revenue for the years ended December 31, 2024 and 2023 (in thousands):
| Year Ended December 31, | |||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| Revenue by Contract Type | |||||||||||||||||||||||
| Cost reimbursable | $ | 146,516 | 64 | % | $ | 13,920 | 17 | % | |||||||||||||||
| Fixed price | 74,681 | 33 | % | 58,743 | 74 | % | |||||||||||||||||
| Time and materials | 6,803 | 3 | % | 6,888 | 9 | % | |||||||||||||||||
| Total | $ | 228,000 | 100 | % | $ | 79,551 | 100 | % | |||||||||||||||
Contract Assets and Liabilities
Contract assets primarily relate to deferred contract costs for subcontracted launch services, as well as work completed not yet billed for performance obligations that are satisfied over time. Deferred contract costs and unbilled receivables are recorded contract assets on our consolidated balance sheets. Contract assets related to deferred contract costs are amortized straight-line across the life of the long-term service arrangement. Contract assets related to work completed for performance obligations that are satisfied over time are transferred to receivables when the right to consideration becomes unconditional. Contract liabilities relate to billings or consideration received in advance of performance (obligation to transfer goods or services to a customer) under the contract as well as provisions for loss contracts. Contract liabilities are recognized as revenue when the performance obligation has been performed. Current deferred revenue and provisions for loss contracts are recorded in current contract liabilities on our consolidated balance sheets. Long-term deferred revenue and provisions for loss contracts are recorded in long-term contract liabilities on our consolidated balance sheets.
The following table presents contract assets as of December 31, 2024 and 2023 (in thousands):
| December 31, 2024 | December 31, 2023 | ||||||||||
| Contract Assets | |||||||||||
| Unbilled receivables | $ | 18,113 | $ | 6,146 | |||||||
| Deferred contract costs | 16,479 | 980 | |||||||||
| Total | $ | 34,592 | $ | 7,126 | |||||||
Amortization expense associated with deferred contract costs for subcontracted launch services was recorded in cost of revenue and was $13.7 million and $31.2 million, respectively, for the years ended December 31, 2024 and 2023.
The following table presents contract liabilities as of December 31, 2024 and 2023 (in thousands):
| December 31, 2024 | December 31, 2023 | ||||||||||
| Contract liabilities – current | |||||||||||
| Deferred revenue | $ | 54,803 | $ | 22,896 | |||||||
| Contract loss provision | 7,890 | 5,457 | |||||||||
| Accrued launch costs | 2,491 | 13,018 | |||||||||
| Total contract liabilities – current | 65,184 | 41,371 | |||||||||
| Contract liabilities – long-term | |||||||||||
| Deferred revenue | 14,334 | — | |||||||||
| Total contract liabilities | $ | 79,518 | $ | 41,371 | |||||||
Revenue recognized from amounts included in contract liabilities at the beginning of the period was $13.6 million and $38.2 million during the years ended December 31, 2024 and 2023, respectively.
Loss Contracts
A contract loss occurs when the current estimate of the consideration that we expect to receive is less than the current estimate of total estimating costs to complete the contract. For purposes of determining the existence of or amount of a contract loss, we consider total contract consideration, including any variable consideration constrained for revenue recognition purposes. We may experience favorable or unfavorable changes to contract losses from time to time due to changes in estimated contract costs and modifications that result in changes to contract price. We recorded net losses related to contracts with customers of $28.1 million and $23.6 million, respectively, for the years ended December 31, 2024 and 2023.
As of December 31, 2024, the status of these loss contracts was as follows:
•The first contract, for lunar payload services, became a loss contract due to estimated contract costs exceeding the estimated amount of consideration that we expected to receive. The contract was successfully completed in February 2024. As a result of a successful mission, previously constrained variable consideration of $12.3 million as of December 31, 2023 was released and approximately $11.6 million was recognized as revenue during the first quarter of 2024. For the years ended December 31, 2024, and 2023, changes in estimated contract costs resulted in an additional $5.7 million and $9.0 million in contract loss, respectively.
•The second contract, for lunar payload services, became a loss contract in 2021 due to estimated contract costs exceeding the estimated amount of consideration that we expected to receive. For the years ended December 31, 2024 and 2023, changes in estimated contract costs resulted in an additional $12.5 million and $5.8 million in contract loss, respectively. As of December 31, 2024, and 2023, this contract was approximately 69% complete and 64% complete, respectively. The period of performance for this contract currently runs through June 2026 as a result of modification to the contract. As of December 31, 2024 and 2023, the contract loss provision recorded in contract liabilities, current was $7.0 million and $0.9 million, respectively, in our consolidated balance sheets.
•The third contract, for lunar payload services, became a loss contract in 2023 due to estimated contract costs exceeding the estimated amount of consideration that we expected to receive. For the years ended December 31, 2024 and 2023, changes in estimated contract costs resulted in an additional $9.9 million and $8.8 million in contract loss, respectively. As of December 31, 2024, this contract was approximately 95% complete. The period of performance for this contract currently runs through August 2025 as a result of modifications to the contract. As of December 31, 2024 and 2023, the contract loss provision recorded in contract liabilities, current in our consolidated balance sheets was $0.9 million and $4.6 million, respectively.
•The remaining loss contracts are individually and collectively immaterial.
Remaining Performance Obligations
Remaining performance obligations represent the remaining transaction price of firm orders for which work has not been performed and excludes unexercised contract options. As of December 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $168.7 million. The Company expects to recognize revenue on approximately 55-60% of the remaining performance obligations over the next 12 months, 20%-25% in 2026 and the remaining thereafter. Remaining performance obligations do not include variable consideration that was determined to be constrained as of December 31, 2024.
For time and materials contracts and cost reimbursable contracts, we have adopted the practical expedient that allows us to recognize revenue based on our right to invoice; therefore, we do not report unfulfilled performance obligations for time and materials agreements and cost reimbursable agreements.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.