Synspective Inc., the Tokyo satellite-radar startup, told regulators in its half-year filing that its order backlog reached ¥121.7bn at the end of June, built mostly on one big defense contract and a run of government space grants. The same document carries a footnote worth reading closely: the ¥3.92bn of "total revenue" the company treats as its main internal yardstick is not mostly sales. Subsidies, not customers, supplied more than half of it.
Net sales for the six months to June rose 27.4% year-on-year to ¥1.69bn, up from ¥1.33bn a year earlier, as Synspective began delivering radar imagery under a Ministry of Defense satellite-constellation program. Subsidy income, mainly a grant recognized from Japan's decade-long, roughly ¥1tn Space Strategy Fund, jumped 5,413% year-on-year to ¥2.23bn. Add the two together and "total revenue" grew 186.5% to ¥3.92bn, a headline figure that flatters the underlying commercial business.
Losses tell a mixed story depending on where you look. Operating loss widened to ¥3.35bn from ¥2.11bn a year earlier, weighed down by higher satellite depreciation, including a ¥477.5mn charge from shortening the service life of two observation satellites, and by the cost of running the new defense-data service. Further down the income statement, the subsidy booking flattered results: ordinary loss narrowed to ¥1.37bn from ¥2.49bn, and the net loss attributable to shareholders fell to ¥1.42bn from ¥2.48bn.
Where the ¥121.7bn backlog comes from
| Program or Contract | Value | Status |
|---|---|---|
| METI SBIR (continuing project) | ¥4.1bn | Grant decided |
| Space Strategy Fund Phase 1 (commercial satellite constellation acceleration) | ¥23.79bn ceiling / ¥16.46bn decided | Partially decided |
| Defense Ministry satellite-constellation program | ¥96.1bn | Contracted this half |
| Space Strategy Fund Phase 2 (next-generation earth observation) | ¥3.77bn ceiling | Selected |
| Cabinet Office SAR-constellation demonstration project | ¥370mn | Winning bid |
| METI Global South co-creation subsidy | ¥222.9mn | Applied, not yet decided |
The defense contract, worth ¥96.1bn, was signed by a satellite-operations joint venture backed by Mitsubishi Electric, Mitsui & Co. and a satellite-broadcasting partner; Synspective holds a subcontract with that venture and with Mitsubishi Electric to supply small-satellite radar imagery. The remainder comes from two rounds of JAXA's Space Strategy Fund awards, a Cabinet Office demonstration contract and smaller trade-ministry grants, some of which are still only applications rather than confirmed money.
Building the satellites to fill that backlog is expensive. Cash and deposits fell to ¥16.2bn at the half-year mark from ¥24.5bn six months earlier, largely spent on satellite parts and launch prepayments, with capital spending on satellite manufacturing alone reaching ¥9.97bn. Synspective has six satellites in orbit and is verifying a tenth, launched June 27, before bringing it into service; it is also building a production line meant eventually to turn out up to twelve small radar satellites a year, and holds launch agreements covering 24 more satellites with Rocket Lab, SpaceX and launch broker Exolaunch.
The stakes attached to that subsidy-inclusive total revenue figure are not just rhetorical. Performance-linked stock options granted to directors and employees in March only begin vesting once full-year total revenue, sales plus subsidies combined, clears ¥27bn, with full vesting reserved for ¥33bn.
Management flagged the company's continuing operating losses as a formal going-concern event but concluded there is no material doubt about funding the next twelve months, citing cash on hand, undrawn credit facilities and the new defense and subsidy contracts. The chief executive and finance chief certified the filing's accuracy in a separate document lodged the same day, August 14, when the semiannual report itself was submitted to the Kanto Local Finance Bureau.