Revenue shortfall causes layoffs and delays at Satellogic

WASHINGTON — As Satellogic prepares to launch its latest imaging satellites, the company has slashed revenue projections, resulting in layoffs and delays in construction of a new factory.

Four NewSat satellites, built by Satellogic, are among the 114 payloads to be launched on SpaceX’s Transporter-6 dedicated smallsat rideshare mission. That mission is scheduled to launch Jan. 3 at 9:56 a.m. Eastern on a Falcon 9 from Cape Canaveral Space Force Station in Florida. Satellogic signed a contract with SpaceX in May 2022 to launch 68 satellites on an unspecified number of launches.

The four satellites will join 26 currently in operation by Satellogic that provide high-resolution imagery. The company, in a business update Dec. 15, said it expected to launch 18 to 21 satellites in 2023, giving it enough satellites to map the Earth every two weeks.

That business update, which included the company’s financial results from the first half of 2022, showed revenue lagging earlier projections. The company recorded $2.4 million in revenue in the first half of the year, primarily from two unnamed customers, according to filings with the Securities and Exchange Commission.

Satellogic said in its business update it was projecting revenues of $6-8 million for all of 2022, and an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss of $55-60 million. By contrast, in an analyst day presentation in November 2021, part of going public through a SPAC merger, Satellogic projected revenue of $47 million for 2022 and an adjusted EBITDA loss of $2 million.

Emiliano Kargieman, chief executive of Satellogic, acknowledged he was “disappointed” with the revenue from the first half of the year, but remained optimistic about the company’s long-term trajectory, citing an increase in demand for its imagery seen in the second half of the year. “Our bookings and current pipeline support continued strong growth into 2023,” he said in a Dec. 15 earnings call.

The company, which in November 2021 projected revenues of $132 million in 2023, growing to $787 million in 2025, now projects $30-50 million in revenues in 2023, increasing to $140-200 million in 2025. Satellogic projects an adjusted EDBITA loss of $20-35 million in 2023, reaching breakeven in 2024 and growing to positive $35-90 million in 2025.

Kargieman said the company now has a better idea of the sales cycle for its imagery and other products. “After another year of talking to customers, we’re extremely confident in the numbers that we’re guiding for next year,” he said.

The diminished revenues have forced the company to cut costs. That included laying off 18% of its workforce in the third quarter, reducing its staff to about 380 people. Rick Dunn, Satellogic’s chief financial officer, said the number of employees would remain “more or less flat” in 2023.

The company has also scaled back the growth of its constellation. In that November 2021 presentation, Satellogic projected having 111 satellites in orbit in 2023. The company will instead end 2023 with no more than 47 satellites, although Kargieman said in the call that some of the 10 satellites it launched in October 2020 could be retired by the end of 2023 as they reach the end of their three-year design life.

With those reduced projections, Satellogic has delayed completion of a new high-throughput satellite manufacturing facility it planned to open in 2022 in the Netherlands. That factory, which Satellogic said in late 2021 would be fully operational by the start of 2023, was designed to produce 25 satellites a quarter.

Kargieman said the company’s existing factory in Uruguay can produce 24 satellites a year, sufficient for its near-term needs. “Going forward, we can continue to grow that capacity,” he said, increasing it potentially by a factor of two or three. The Dutch factory will go into service when the company is ready to scale up the constellation to the 300 satellites needed for daily remapping of the Earth. “The exact timing is yet to be defined.”

Satellogic is now offering to sell satellites, rather than just imagery, to customers. Dunn projected that at least 25% of the company’s revenues in 2023 would come from this new “space systems” business line, although weighted towards the second half of the year.

The rest of the company’s revenues will continue to come from imagery sales as well as its “constellation as a service” or dedicated satellite constellation business line, where governments and other organizations pay to gain priority access to Satellogic’s constellation over a designated area. One example Kargieman cited was an agreement with the government of Albania announced in September to provide imagery over its territory. The three-year deal is worth $6 million and includes naming two NewSat satellites launching on Transporter-6 Albania-1 and -2.

Satellogic announced Dec. 13 a letter of intent with the Mexican space agency AEM for a similar constellation-as-a-service agreement, but the company did not disclose when the contract would be finalized or its anticipated value. However, the Indian space agency ISRO announced Dec. 30 that it met with AEM officials, who asked ISRO for assistance in building and launching a remote sensing satellite.

Satellogic, which raised $168 million when its SPAC merger closed in January 2022, projected having $78-82 million of cash on hand at the end of 2022. That is enough, Kargieman said, to get the company to breakeven in 2024. “We don’t require additional financing,” he said. “We’re really in control of how much we spend and how much we invest into our future business, so we don’t expect to be raising additional financing.”

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This New Year, check out 10 ways America is different from 50 years ago

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FROM HAIRCUTS TO HOUSING COSTS – Now that 2023 is here, take a look back at how America has changed over the last 50 years. Continue reading…

CHILLING OUT! – An orphaned polar bear who was found roaming in Prudhoe Bay, Alaska, rolls around with glee after being brought to the Alaska Zoo. See the video…

‘PLENTY WE CAN CONTROL’ – Tony Robbins recently joined “Tucker Carlson Tonight” to discuss smart self-improvement tips and insights for 2023. Continue reading…

‘BE KIND TO ONE ANOTHER’ – This New Year, here are 10 messages of advice and inspiration — including a few surprises. Continue reading…

‘WE LOVE OUR COUNTRY’ – Kirk Cameron delivers a powerful message to an overflow crowd who arrived for a reading of his children’s book at a New York-based library. Earlier, Cameron had been denied or ignored by over 50 public libraries in America for a story-time reading. Continue reading…

‘R-E-S-P-E-C-T’ – On Jan. 3, 1987, this singer was the first woman inducted into the Rock & Roll Hall of Fame. Continue reading…

‘FANTASTIC CONDITION’ – Theodore Roosevelt’s Smith & Wesson revolver, which is well over a century old, has sold at auction. Check out the winning bid … Continue reading…

NEW YEAR BRAIN TEASER – Can you find three empty Champagne flutes in this seek-and-find puzzle? Test your mind…

WHAT’S COOKING? – Whip up these sour cherry BBQ wings from well-known chef Tom Colicchio for a tasty game day appetizer. Try the recipe…

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Damar Hamlin family ‘deeply moved’ by support after Bills player’s collapse

Just In | The Hill 

The family of Buffalo Bills safety Damar Hamlin said on Tuesday that they are “deeply moved” by the support they received from many after Hamlin suffered a cardiac arrest during the Bills’ Monday Night Football game against the Cincinnati Bengals. 

“On behalf of our family, we want to express our sincere gratitude for the love and support shown to Damar during this challenging time,” the Hamlin family said in a statement through representative and close friend, Jordon Rooney. “We are deeply moved by the prayers, kind words, and donations from fans around the country.” 

The family also thanked the first responders and medical professionals at the University of Cincinnati Medical Center for their “exceptional care” for the athlete, noting their pleasure with the Bills and Bengals organization and Cincinnati’s head football coach Zac Taylor support during this trying time. 

“Your generosity and compassion mean the world to us,” the family added. “Please keep Damar in your prayers. We will release updates as soon as we have them.” 

The family’s statement comes after Hamlin, who was drafted in the sixth round of the 2021 NFL Draft, suffered a cardiac arrest after collapsing after tackling Bengals wide receiver Tee Higgins during the first quarter of Monday’s game.

The 24-year-old safety stood up after the play was over, only to fall to the ground a few seconds later. The game was postponed and medical authorities administrated CPR on the field before he was taken to a local medical facility by ambulance. 

In a tweet, the Bills tweeted that Hamlin, a former University of Pittsburgh product, is “currently sedated and listed in critical condition” at the UC Medical Center after being taken to the facility to undergo further testing and treatment. 

The Bills-Benglas MNF contest has been postponed due to Hamlin’s injury, as players and coaches on both teams were visibly shaken by the incident. 

In response to the incident, fans have raised more than $4.1 million for Hamlin’s charitable foundation and its current initiative, the Chasing M’s Foundation Community Toy Drive, through the foundation’s GoFundMe page. 

In a separate statement, Cincinnati Bengals owner Mike Brown expressed his thoughts and prayers to Hamlin and his family, saying that “humanity and love rose to the forefront” during the incident. 

“As medical personnel undertook extraordinary measures, both teams demonstrated respect and compassion while fans in the stadium and people around the country bolstered the support for Damar and love for each other,” Brown said in his statement on Tuesday. “The Bengals are thankful for the love and compassion shown by all. Praying for Damar.”

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In search of America’s next ‘grand strategy’

Just In | The Hill 

Since the end of World War II, there have been three occasions when American policymakers have had the motive, means and opportunity to forge a new “grand strategy.”

The first was in the late 1940s, when American policymakers were forced to confront the new reality of an ideologically inflected bipolar competition with the Soviet Union. In this case, U.S. policymakers adopted a grand strategy of “containment,” defined broadly as the use of American power to check the expansion of Soviet influence and prevent the spread of communism more generally.

The second occasion was in the early 1990s, when American policymakers seized the opportunity presented by the end of the Cold War and the onset of the so-called Unipolar Moment. On this occasion, as the structural conditions of American geopolitical primacy and ideological hegemony became clear, U.S. policymakers settled on a grand strategy of liberal internationalism — that is, a strategy of U.S. military primacy in the service of creating and upholding a truly global liberal international order.

The third occasion, still ongoing, began in the mid-2010s, when unipolarity decisively gave way to the current era of multipolar great-power competition. A decade or so into this new era, the debate over how best to adapt to this new geopolitical reality has yet to be settled, with at least five competing visions of what the United States’s next grand strategy ought to look like remaining in contention.

The first of these is liberal internationalism. This strategy represents a continuation of the U.S. strategy of the post-Cold War years, but adapted to the realities of the new international order. It focuses on using American power to uphold what is now called the rules-based international order (RBIO). In its contemporary form, liberal internationalism envisions a worldwide U.S. military presence in support of an international order built on open and free trade, democracy and human rights.

While conceding that the unipolar moment has passed and that the rise of rival great powers is inevitable, liberal internationalism envisions enmeshing those powers in a dense web of U.S.-led institutions that will limit rivalry, facilitate cooperation and dissuade potentially revisionist powers from attempting to overthrow the existing international order. It also holds that, as U.S. primacy underpins the RBIO, Washington must maintain unrivaled military forces capable of deterring or defending against any potential threat to that order.

The second grand strategy currently in contention is that of deep engagement, which is similar in some respects to liberal internationalism but differs from it in important ways. It is similar in that it advocates U.S. primacy and a robust forward presence of U.S. forces.

But deep engagement differs from liberal internationalism in that it focuses more tightly on those regions of the world – Asia, Europe and the Middle East – that its advocates hold to be of particular importance to the United States. It further holds that Washington should maintain military forces in those regions not only to prevent hostile regional hegemons from emerging but generally to dampen any potential regional rivalries that could erupt absent the reassuring presence of U.S. forces. While one of its objectives is a stable, U.S.-led international order, unlike liberal internationalism, deep engagement tends to downplay the promotion of democracy and human rights as strategic goals.

A third contending grand strategic vision is that of strategic competition. This is a grand strategy that fully embraces the idea that the current international order is one of multipolar great power competition and recommends that the United States compete more purposefully and effectively. It comes in both minimalist and maximalist versions.

The minimalist version – managed strategic competition – emphasizes that the goal of strategic competition with the United States’s only real rival, China, is a stable form of competition in which the adversary is neither demonized nor treated as an existential threat, and the objective of which is not total victory. Another, more maximalist, variant frames the new strategic context as “Cold War II” and calls for adopting an updated version of the Cold War grand strategy of containment, with China as its new object.

Restraint, the fourth contending vision, is a grand strategy premised on the assumption that the United States should not use its national power resources to uphold and defend the rules-based international order, but instead use that power to pursue the more limited objectives of defending the U.S. homeland, securing the global commons and otherwise maintaining a stable balance of power in the world’s key regions.

While this overlaps somewhat with deep engagement, it differs from that grand strategy in that it rejects the argument that maintaining such a stable balance requires a robust forward military presence with its associated extensive web of alliance and basing agreements. Realist-restraint grand strategy favors instead securing the United States’s home region (North America or the Western Hemisphere) and deploying forces abroad only to prevent the emergence of a hegemon in the key regions of Europe, Northeast Asia or the Persian Gulf, or to prevent a state from dominating the global commons. Instead of policing the world, the United States would encourage other countries to take the lead in checking potential regional hegemons, intervening itself only when necessary.

The final contender goes by the label of “progressive” grand strategy. This vision (currently on the margins of the debate, but an intellectually serious contender nonetheless) bears a superficial resemblance to restraint in that both advocate reducing defense spending, shrinking the United States’s military footprint abroad and abjuring wars of choice and other forms of military adventurism.

The two grand strategies differ fundamentally, however, in terms of their underlying theoretical logic. Whereas restraint grand strategy proper is grounded in realism, progressive grand strategy is anchored in a more progressive social theory — one that sees both domestic and international society as shot through with structural inequalities and that sees the point of grand strategy as working to end these inequalities on a global level. As a result, progressive grand strategy tends to prioritize objectives such as environmental justice, countering authoritarianism and in general addressing the world’s social ills in ways that realist-restrainers do not.   

Precisely how this debate will play out remains uncertain. That the future course of U.S. grand strategy will be shaped by a degree of continuity seems unquestionable — the liberal internationalist and deep engagement instincts of the U.S. foreign policy establishment remain as strong as ever. But there are powerful systemic pressures (most emanating from the return of multipolar great-power competition) that are pushing in the direction of change. 

If the past is any guide, these new systemic pressures are likely to result in a major shift in U.S. grand strategy — one akin to the shift to containment as the bipolarity of the Cold War era set in, and the shift to liberal internationalism as that bipolarity gave way to the unipolarity of the post-Cold War era.

While the precise outcome of this process of strategic reorientation is impossible to predict, I for one am rooting for restraint.

Andrew Latham is a professor of international relations at Macalester College in Saint Paul, Minn., a non-resident fellow at Defense Priorities in Washington, D.C., and a Senior Fellow with the Institute for Peace and Diplomacy in Ottawa, Canada. Follow him on Twitter @aalatham.

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Mega Millions jackpot surges to $785 million. If there’s a winner, this is the tax bill

US Top News and Analysis 

Anadolu Agency | Anadolu Agency | Getty Images

Mega Millions players may be daydreaming about what they’d do with an extra $785 million, the game’s current jackpot amount.

One way they should count on using it if they win? Sharing a slice with the IRS.

After no tickets matched all six numbers drawn Friday night, the jackpot climbed again, marking the fourth time in the game’s history that the top prize has gone above $700 million, according to Mega Millions officials. In the previous three instances, those jackpots ended up being worth more than $1 billion when they were won.

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The jackpot has been rolling higher through twice-weekly drawings since mid-October with no winner. If someone nabs it in the next drawing — set for Tuesday night — this $785 million prize would rank as the sixth-largest lottery prize ever won and the fourth-largest Mega Millions prize.

Of course, the advertised amount is only what you’d get if you were to choose to take your winnings as an annuity spread over three decades. The lump-sum cash option — which most winners choose — for this jackpot is $403.8 million, as of mid day Tuesday.

Regardless of how you’d decide to receive your windfall, taxes would take a bite out of it.

$96.9 million in taxes would be shaved off cash option

Assuming you’re like most winners and were to choose the cash option, a mandatory 24% federal tax withholding would reduce the $403.8 million by $96.9 million. That would reduce your take to $306.9 million.

However, you could expect to owe more to the IRS at tax time. The top federal income tax rate is 37% and applies to income above $578,125 for individual tax filers and $693,750 for married couples who file a joint tax return.

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This means that unless you were able to reduce your taxable income by, say, making large tax-deductible charitable contributions, you would owe another 13% — or about $52.5 million — at tax time. That would bring your winnings down to $254.4 million. 

There also could be state or local taxes depending on where the ticket was purchased and where you live. Those levies range from zero to more than 10%.

Most Mega Millions players, though, won’t have to worry about paying millions of dollars to the IRS or state coffers: The odds of a single ticket matching all six numbers to land the jackpot is about 1 in 302.6 million.

Meanwhile, the Powerball jackpot is $291 million (with a cash option of $147.9 million) for Wednesday night’s drawing. The chance of hitting the motherlode in that game is slightly better: 1 in 292 million.

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Home price increases weakened sharply in November, posting the smallest annual gain in 2 years

US Top News and Analysis 

A sign is posted in front of a home that is for sale on December 19, 2022 in Los Angeles, California.
Mario Tama | Getty Images

Home prices are falling into a deep winter chill, as higher mortgage rates push more buyers to the sidelines.

Prices in November were still 8.6% higher than during the same month in 2021, but it was the first year-over-year reading in single digits in 21 months, according to CoreLogic. It is also the lowest rate of appreciation since November 2020.

Prices are now 2.5% below the spring 2022 peak and are expected to continue to move lower this year. CoreLogic’s forecast has price movement falling into negative territory by spring before rebounding to about 2% to 3% growth in the fall.

“Although home price growth has been slowing rapidly and will continue to do so in 2023, strong gains in the first half of last year suggest that total 2022 appreciation was only slightly lower than that recorded in 2021,” said Selma Hepp, deputy chief economist at CoreLogic. “However, 2023 will present its own challenges, as consumers remain wary of both the housing market and the overall economic outlook.”

Mortgage rates are back on the rise again after a brief reprieve in November and early December. Rates had more than doubled over the summer, with the average rate on the popular 30-year fixed loan exceeding 7%. It hit a high of 7.37% at the end of October, according to Mortgage News Daily. In November and December it fell back, hitting a low of 6.13% in mid-December, but is now back up over 6.5%.

“Potential homebuyers are grappling with the idea of buying amid possible further price declines and a continued inventory shortage. Nevertheless, with slowly improving affordability and a more optimistic economic outlook than previously believed, the housing market could show resilience in 2023,” added Hepp.

Florida, South Carolina and Georgia saw the highest home price gains in the nation, as buyers continue to flock to the Sun Belt. Washington, D.C., ranked last, with prices up just 1.2% year over year.

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U.S. housing market faces tough winter as 2022 comes to a close

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Risk advisory firm unveils top threats of 2023

Just In | The Hill 

Some of this year’s top global risks include inflation, higher energy prices and water stress, according to a top political risk consulting firm. 

However, “rogue Russia” is the number one risk facing nations, industries, and institutions in 2023, according to the Eurasia Group’s annual risk report released on Tuesday.

“A humiliated Russia will turn from global player into the world’s most dangerous rogue state,” wrote co-authors of the report, Eurasia Group President Ian Bremmer and Chairman Cliff Kupchan.  

Moscow has been careful to keep its war confined to Ukraine since launching an invasion in February 2022. But Bremmer and Kupchan predict that will change this year.  

“In 2023, Putin can’t afford to be that cautious,” the report states. “Nuclear saber-rattling by Moscow will intensify. Putin’s threats will become more explicit; he’s likely to move tactical nuclear weapons closer to Ukraine—and publicize it—and we could see an increase in the alert status of Russia’s nuclear arsenal.”

Direct use of nuclear weapons remains unlikely, the report adds, but the potential for destruction due to accidents or miscalculations will be greater this year “than at any time since the Cuban missile crisis.”  

The number two risk for this year is “Maximum Xi,” according to the report, referring to Chinese President Xi Jinping.

China’s leader has control over the country’s political system that has not been seen since the reign of Mao Zedong. Bremmer and Kupchan describe Xi as being “virtually unfettered” in his ability to pursue his nationalist policy agenda, in a system with few checks and balances to work against him.  

Xi’s ability to make long-term mistakes is also unmatched. “That’s a massive and underappreciated global challenge, given the unprecedented reality of a state capitalist dictatorship having such an outsized role in the global economy,” Bremmer and Kupchan wrote.

Number three on the list is “weapons of mass disruption,” as technological advances in Artificial Intelligence garner new potential for manipulating the masses and creating political chaos.  

“Political actors will use AI breakthroughs to create low-cost armies of human-like bots tasked with elevating fringe candidates, peddling conspiracy theories and ‘fake news,’ stoking polarization and exacerbating extremism and even violence — all of it amplified by social media’s echo chambers,” the report states.  

The powerful ripple effect of rising global inflation is the next biggest threat, according to the report.  

Inflation experienced across the globe in 2022 had multiple causes, including the COVID-19 pandemic, Russia’s invasion of Ukraine, and China doubling down on its zero-COVID policy. And the historically high inflation will most likely cause a global recession and as result prompt social instability in some emerging economies, per the report.

Number five on the report’s list of biggest global risks this year are the possible confrontations between Iran and the West as protests against the government in Tehran continue. Amid the protests, Iran has also escalated its nuclear program and become a key backer of Russia in the Ukraine war.  

“Facing convulsions at home while lashing out abroad, this year will feature new confrontations between the Islamic Republic and the West,” the report states.  

Other risks mentioned in the report include higher oil prices, rollbacks to gender equality, risk of political violence in the United States, Generation Z further changing work culture, and increased water scarcity.  

​News, 2023, Eurasia Group, russia, Russia-Ukraine war Read More 

Apple’s market cap falls under $2 trillion as sell-off continues

US Top News and Analysis 

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Tim Cook walks in the Paddock prior to the F1 Grand Prix of USA at Circuit of The Americas on October 23, 2022 in Austin, Texas.
Jared C. Tilton | Getty Images

Apple shares fell more than 3% during intraday trading on Tuesday, giving the iPhone maker a market capitalization under $2 trillion for the first time since May.

Apple first hit a $2 trillion valuation in August 2020, as the pandemic boosted its sales of computers and phones for remote work and school. It briefly hit a market value over $3 trillion during trading in January 2022.

Apple struggled with iPhone 14 Pro shipments during the holiday season because of Covid restrictions on its primary factory in China. Investors are also wary of rising interest rates and declining consumer confidence, which could hurt demand for Apple’s premium-priced products.

A recent report from supply chain analyst Trendforce said it saw Apple’s iPhone shipments declining 22% in the December quarter. Apple has told suppliers to make fewer components for products including AirPods, Apple Watch and MacBook laptops, according to Nikkei.

Apple is the last big company to give up its $2 trillion valuation. Previously, Microsoft hit the $2 trillion mark but retreated from it in 2022.

The broader market is down Tuesday, with the S&P 500 index falling nearly 1% during trading. At just over $124 per share, Apple would hit its latest 52-week low if it closes at the current price.

In 2022, Apple underperformed the S&P 500 index, which declined more than 18%. Apple’s share price fell nearly 27% in 2020.

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