Luis Gomes, chief executive, AAC Clyde. Credit: AAC Clyde

UPDATE June 10: AAC Clyde said its rights offering was 39% oversubscribed and that the company had raised 82.5 million Swedish krona ($8.75 million) before costs. “Proceeds from the rights issue will further accelerate ÅAC’s ability… to take a leading position in the emerging New Space market”, Chief Financial Officer Mats Thideman said. Erik Penser Bank AB was AAC’s financial advisor for the transaction.

WASHINGTON — Cubesat manufacturer AAC Clyde Space of Sweden and Scotland reported a 9% drop in revenue for the three months ending March 31 compared to a year earlier and said its U.S. president would be stepping down to better position the company in the world’s biggest smallsat market.

The move comes after AAC Clyde replaced its chief executive, hiring Surrey Satellite Technology Ltd. veteran Luis Gomes, effective earlier this month.

AAC Clyde Chairman Rolf Hallencreutz said the change in the United States is intended to better capture opportunities in the United States, which AAC Clyde has made a priority.

“We are now entering a new phase in North America and will require a different management structure to take full advantage of the changes we see in New Space,” Hallencreutz said. AAC Clyde Strategy Director Craig Clark, who is the founder of Clyde Space, will be acting head of AAC Clyde Space’s U.S. operations.

For the first three months of 2019, AAC Clyde reported revenue of 14.9 million Swedish krona, or $1.57 million, down 9% from the same period a year ago. Operating cash flow during the quarter was a negative 5 million krona.The company is raising 82.5 million krona via a share issue.

AAC Clyde shares are traded on the Nasdaq First North Stockholm market. The company has been selling itself as a growth story but has also said quarterly revenue could vary widely depending on the flow of orders for full satellites and satellite components.

Mats Thideman, the company’s acting chief executive and also its chief financial officer, said new orders during the quarter bode well for the financial outlook for the rest of the year.

“Order backlog, order intake and interest from the market [sets] the conditions for a profitable business,” Thideman said in a May 8 statement to shareholders. “Given the breadth of the orders we won at the beginning of the year from all over the world, we are well positioned to drive the development of the emerging New Space market.

“Success has meant that we are in an intensive recruitment period of new skills. The new recruits are a prerequisite for us to reach profitability.”

The standout contract during the quarter was to build two satellites for U.S.-based Orbcomm, an IoT hardware and service provider that has its own constellation of satellites but elected to contract with AAC Clyde for “Space as a Service.”

AAC Clyde will own the two satellites, to be used for Automatic Identification System maritime tracking, but Orbcomm will have exclusive use of the data: The contract is valued at 54 million krona.

York Space Systems’s first S-Class satellite was launched May 5 aboard a Rocket Lab Electron rocket and is reported healthy in orbit. Credit: York Space Systems

Another development that should be promising for AAC Clyde was the May 5 launch, aboard a Rocket Lab Electron rocket, of York Space Systems’s first S-Class satellite. The satellite is reported to be healthy and operating as planned in  low Earth orbit.

U.S.-based York licenses multiple AAC Clyde Sirius components.

Above is a comparison of York Space Systems’s X-Class platform, on the left, and the S-Class platform. Credit: York Space Systems

“York’s prompt operation of the S-CLASS showcases their skill in designing and operating cutting-edge commercial spacecraft,” Gomes said in a statement. “We are delighted to partner with them on the S-CLASS and also note that AAC Clyde Space have reached yet another milestone with the successful commissioning of Sirius systems.”

We believe that the contract model can attract many more customers who work with data from space but not see satellites as their core business,” Thideman said in his statement to shareholders.