(C) Sputnik

US space startup Firefly Aerospace (NASDAQ:FLY) experienced a much-needed surge in its stock price, climbing over 20% in after-hours trading, following the release of surprisingly strong third-quarter earnings and a significant upward revision of its full-year revenue forecast. The results signal a potential turning point for the company, whose stock has struggled since its Nasdaq listing in August.

Firefly's financial performance for the third quarter proved far more robust than anticipated. The company reported $30.8 million in revenue, marking a substantial 38% jump year-over-year and nearly doubling the revenue from the preceding second quarter. This top-line figure comfortably exceeded analyst consensus estimates.

While the company posted a net loss of $140.4 million, translating to a loss of $1.50 per share, Firefly attributed the large loss primarily to one-off factors. These included significant expenses related to its Initial Public Offering (IPO), foreign exchange volatility, and costs associated with executive severance, suggesting that underlying operational performance is improving. Furthermore, the adjusted loss per share of -$0.33 significantly beat analyst expectations of around -$0.42.

In a clear demonstration of management confidence, Firefly raised its 2025 full-year revenue guidance to a range of $150 million to $158 million, up from the previous forecast of $133 million to $145 million. This revised outlook, which is well above analyst consensus, fueled much of the positive market reaction.

The company's positive trajectory is underpinned by key strategic contracts and acquisitions. In July, Firefly secured a significant contract with NASA, valued at approximately $177 million, to support future lunar missions, including the Blue Ghost Mission 4 lunar payload delivery. This comes as the US government and NASA, alongside partners like SpaceX, increasingly expand contracts with private companies for critical space and lunar exploration missions. Firefly has also bolstered its national security portfolio by completing the acquisition of SciTec, a defense technology company, strengthening its positioning for major defense programs.

The surge in after-hours trading, which saw the stock hit a high of $21.70, was a welcome change for investors. Since its August IPO, Firefly’s stock had plummeted by about 70% from its initial closing price, and the company's market capitalization had shrunk drastically from roughly $8.5 billion to $2.7 billion.

This decline was compounded by a rocket ground test anomaly at its Texas facility in September, which triggered a 35% drop in the stock that month, followed by an additional 24% slide in November leading up to the earnings report. Firefly’s management acknowledged the incident during the earnings call, assuring investors that corrective measures have since been implemented as the company prepares its Alpha launch vehicle for a return to flight.

The latest earnings report, with its strong revenue beat and optimistic guidance, suggests Firefly is successfully navigating its operational challenges and capitalizing on the growing demand within the burgeoning space and defense technology sector. Investors are now cautiously optimistic that the stock's stellar after-hours performance marks the start of a sustained recovery.