Sidus Space (SIDU 0.88%) reported Q2 2025 earnings on August 14, 2025, with revenue rising 36% year over year to $1.3 million and a GAAP net loss of $5.6 million as the company continued to invest in scaling its satellite constellation and technology platform. Management highlighted key milestones in satellite commissioning, capital raising, and a strategic shift toward recurring, technology-driven revenue streams. The following insights detail the most significant developments and implications from the earnings call.
Sidus Space achieves satellite commissioning milestone
LIDSYSAT-3, the company’s third satellite, achieved full autonomous pointing using advanced onboard guidance, navigation, and control (GNC) software after its March 2025 launch. This milestone enables Sidus Space to begin activating sensors and launching subscription-based data services, leveraging machine learning for in-orbit upgrades and real-time data delivery.
"We completed commissioning of the ADCS system on LIDSYSAT-3. Cutting-edge autonomous machine learning-powered onboard GNC software enabled full autonomous pointing and set the stage for solar array deployment and payload activation. This demonstrates the ability of our satellites to accept technological software advancements while on orbit. This also represents a major step toward converting our satellite infrastructure into recurring revenue-generating assets. We're now moving to activate our sensors, which will initiate subscriptions under customer agreements. The activation of these technologies will also support government and commercial contracts where on-orbit experience and performance are key differentiators."
— Carol Craig, Chairman and Chief Executive Officer
This operational progress marks Sidus Space’s transition from hardware deployment to monetizing Earth observation and data-as-a-service models, increasing the visibility of future recurring revenues.
Sidus Space deploys capital to accelerate dual-use growth
Following a public offering that raised approximately $6.7 million in net proceeds, Sidus Space ended the quarter with $3.6 million in cash as of June 30, 2025. Management is allocating these funds to commercialize multi-domain hardware (Fortis VPX), expand the LIDSYSAT constellation, and develop proprietary artificial intelligence infrastructure, supporting entry into defense and civil markets.
"As part of our growth strategy, we successfully executed a capital raise this quarter to fund key technology initiatives that we expect will drive long-term value. The proceeds are being deployed toward the accelerated commercialization of our dual-use multi-domain products, scaling our LIDSYSAT constellation, and expanding development of our proprietary Orlaith AI ecosystem, which I'll share more about a little later. These investments are critical to expanding our recurring revenue base, increasing operational efficiency, and solidifying our position as a secure US-based technology provider in a rapidly evolving space and defense landscape. We remain disciplined in how we allocate capital with a clear focus on measurable outcomes and shareholder return."
— Carol Craig, Chairman and Chief Executive Officer
By strategically investing new capital, Sidus Space is positioned to pursue higher-value commercial and defense contracts and accelerate its shift toward higher-margin, software-enabled recurring revenue streams.
Sidus Space shifts to technology-driven recurring revenue
GAAP revenue reached $1.3 million in Q2 2025, up 36% year over year, but the company reported a GAAP net loss of $5.6 million, compared to a $4.1 million loss in Q2 2024, as non-cash depreciation and operating expenses increased with satellite deployments and mission operations. Management emphasized a deliberate move away from legacy contract work, focusing on higher-value, recurring models across space-based hardware and artificial intelligence services.
"Total revenue for 2025 was approximately $1.5 million compared to $2 million in the same period in 2024. While this reflects a decrease of $478,000 or 24%, the change aligns with our strategic shift away from legacy contract work toward higher value commercial space-based and AI-driven solutions. This repositioning is intentional and expected to generate more sustainable, recurring revenue in future periods. The impact of milestone-based revenue recognition also influenced the year-over-year comparison. Cost of revenue rose to approximately $4.2 million, a 52% increase from $2.7 million in 2024. Key contributors included a $1.1 million increase in depreciation tied to satellite and software investments, a changing contract mix requiring greater material and labor inputs, ongoing supply chain pressures impacting manufacturing operations. Gross profit for the period was a loss of $2.7 million compared to a loss of $757,000 in the same period last year. This reflects increased depreciation, which is non-cash and directly tied to recent investments that position us for future revenue generation."
— Adarsh Parekh, Chief Financial Officer
While near-term losses and higher cash burn are expected, management’s strategy aims to build a recurring, innovation-driven revenue model that supports long-term margin expansion as commercialization advances and new technology channels are realized.
Looking Ahead
Management expects commercialization of LIDSYSAT-enabled services, customer onboarding for VPX SOSA line systems, and expansion of the satellite constellation to drive material revenue growth in the second half of 2025. No specific revenue or earnings guidance was provided, but leadership reiterated that profitability is not expected in 2025, with the focus remaining on foundation-building and scaling recurring revenue sources. Contract pipeline visibility is supported by a $120 million potential agreement with Lone Star Holdings, as disclosed in the earnings call.
