How Intuitive Machines 'totally disrupted' the economics of flying to the moon

Intuitive Machines (LUNR) made history in February when it became the first private space company to touch down on the surface of the moon.

Now, it’s looking to accelerate the development of the lunar economy.

Speaking to Yahoo Finance, Intuitive Machines CEO and co-founder Steve Altemus said the company’s cost structure and ability to streamline lunar missions ultimately place it in the driver’s seat in a global race to develop the moon.

“We designed and developed a mission to the moon at a price point that was roughly $118 million and did it in about four years,” Altemus said. “We have totally disrupted the industry in terms of the economics of flying to the moon.”

In its inaugural IM-1 mission, Intuitive Machines' Odysseus moon lander successfully reached the lunar surface in February, but its weeklong mission faced serious challenges after the vehicle tipped on its side when landing. That cut short Intuitive Machines' full mission, although the NASA research equipment on board successfully sent back data from its experiments.

Intuitive Machines is now looking ahead to its second lunar mission, IM-2, which is scheduled for November. Altemus said the company conducted a 30-day review of its first mission to improve its technology for the second round.

“We can improve our ability to land 20 times with precision,” Altemus said. “The south pole [of the moon] is going to require that. That's what we do continually — refine for that pinpoint accuracy.”

Intuitive Machines is among a handful of private startups developing a low-cost transportation system to the moon with funding from NASA. The agency’s Commercial Lunar Payload Services program set aside $2.6 billion for more than a dozen companies to carry NASA’s research to the lunar surface along with payloads for commercial customers.

The missions are laying the groundwork for NASA's Artemis program, which aims to return astronauts to the moon. The first crewed mission under Artemis has been delayed to 2025 as Lockheed Martin (LMT), the lead contractor, develops the Orion spacecraft that will carry the astronauts.

Intuitive Machines, meanwhile, is positioning itself to own end-to-end operations between the Earth and the moon, strategically placing bets on the critical infrastructure needed to enable longer stays on the lunar surface.

The company recently won a $30 million contract from NASA to develop a lunar terrain vehicle that will shuttle Artemis astronauts around on the moon. Intuitive Machines has also developed a Lunar Data Network that enables communication and data relay services for spacecraft.

“As a company, our vision is to deliver space systems to the surface with our family of landers to do command and control and navigation in and around the moon so that it enables surface operations,” Altemus said. “I believe Intuitive Machines is the only company that's got all three pieces.”

NASA estimates human activity in the region of space between the Earth and the moon will exceed all activity since 1957 in the next decade alone. That potential prompted the White House to develop its first science and technology strategy to “support responsible, peaceful, and sustainable exploration.”

The relative success of its first mission has provided a lift to Intuitive Machines. The company saw its cash balance increase to $54.6 million in the first three months of the year after an institutional investor exercised warrants. The company also raised $10 million through equity and said it had “sufficient capital for the near term.”

Intuitive Machines stock is up roughly 138% year to date. But the company, which came to the public markets through a SPAC, has been more vulnerable to big swings on any perceived risks compared to competitors that have opted to remain private.

“When you go de-SPAC, there's quite a bit of volatility in your stock as you move from maybe retail investors to more institutional investors,” Altemus said. “So as the company matures, I see a greater contribution of investment from institutional investors, which should provide some stability to the stock in the long term.”

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