Episode Details

Firefly Aerospace (FLY) Q2 2026 — The 8-K cleared EDGAR at 4:08pm ET on August 11, AFTER the close, so Wednesday August 12 was the reaction session: the shares opened +1.33 pct at USD26.71, ran to USD27.74 (+5.24 pct), then gave it back and closed +0.68 pct at USD26.54 on 1.02x average volume. USD26.67 on August 14. Firefly Aerospace is a space and defense technology company that listed on the Nasdaq in August 2025. The June quarter set a revenue record: USD117.7M, up 657 pct, beating consensus by 33.4 pct, with non-GAAP loss per share of USD0.42 against a USD0.51 bar. But launch revenue inside that record was USD9.4M - 8.0 pct of the top line - and free cash burn was USD106.3M. THE CALL: AVOID (3/5, MEDIUM - A RECORD QUARTER THE ROCKETS BARELY JOINED) — base-case value ~$22.89 vs ~$26.67 today. KEY METRICS: - CALL: AVOID, 3/5. Fair value USD22.89 vs the USD26.67 close, -14.2 pct. Bear USD12.09 / base USD23.34 / bull USD44.27, weighted 50/30/20 across a scenario-weighted 2028 revenue multiple, 15x 2028 gross profit and 5.5x 2027 revenue, discounted at 13.0 pct to 180.0M shares. - THE PRINT: revenue USD117.7M vs USD88.2M expected, up 657 pct year on year and 45.5 pct sequentially - a 33.4 pct beat. Non-GAAP loss per share USD0.42 vs a USD0.51 bar, a USD0.09 beat. GAAP loss per share USD0.57. Adjusted EBITDA USD-61.2M against USD-47.9M a year earlier. - THE EPS BASIS, PROVEN BOTH WAYS: Q1 non-GAAP USD0.46 loss plus Q2 USD0.42 equals the filed six-month USD0.88, so the vendor epsActual series is non-GAAP. Q1 GAAP USD0.61 plus Q2 USD0.57 equals the filed USD1.18. The USD0.15 gap is the published bridge, USD24.6M exactly. - THE MIX, AND THE ANGLE: note 4 splits revenue two ways only. Launch revenue USD9.4M, up 48 pct - 8.0 pct of the record. Spacecraft Solutions USD108.3M, up 1,077 pct - and the 10-Q credits that to the inclusion of SciTec, acquired October 31 2025. Three customers are 72.1 pct of revenue. - THE MARGIN WENT BACKWARDS: gross margin 20.3 pct against 25.7 pct a year earlier, a fall of 541 basis points on revenue that grew more than sevenfold. Operating expense of USD119.1M is 101.2 pct of revenue. Stock compensation alone was USD17.0M, 14.5 pct of everything billed. - THE CASH CLOCK: free cash flow USD-106.3M in the quarter on the company's own reconciliation - USD81.6M operating burn plus USD24.7M capex. That is 90 cents out for every revenue dollar in. Cash and short-term investments USD635.3M, about 6.0 quarters, and liquidity still fell USD257.7M in the half after a USD181.6M June raise. - THE ORDER BOOK, AND WHAT IT IS WORTH: backlog USD1,468.1M at June 30, up 8.7 pct, book-to-bill 1.59x across the half. But remaining performance obligations are USD563.7M - only 38.4 pct of it - and USD403.1M is unscheduled multi-launch agreements. Enterprise value USD3,856M is 13.4x trailing revenue. What to watch: UP: a quarter where the launch line is a fifth of revenue rather than 8.0 pct, or gross margin recovering toward the 25.7 pct of a year ago, which is about USD6.4M a quarter of extra gross profit on this base. DOWN: free cash outflow holding above USD106.3M a quarter through Q4, which cuts runway under four quarters and forces a raise into weakness. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.