Full Interview: Anduril CEO Brian Schimpf on $1B+ Revenue & Still Doubling

Recent funding valuing the company at more than $30 billion. And it is helping to build the military of the future. So we're 8 years in. We're at about 7,000 employees. We have consistently doubled revenue every year, over a billion. We're still doubling revenue. Nearly everything we're doing is around this future of a more disconnected, more autonomous battlefield. That's a core part of the thesis we have. We've been able to build up a software platform, all the components you would need from sensors, from compute, from networking systems, like communications. All this stuff enables us to go really fast. Worldwide, we're in a period where things are just geopolitically more unstable. People like to talk about this that we're in this time of peace, but it doesn't seem all that peaceful to me. We set up this company to have an impact on the world, to change deterrence, to change the trajectory of where defense was going. It feels like it is really happening now. It feels like we're at the scale and size that this is really moving the needle.

Yeah, the fake SPVs are great. Everyone is flinging stock that they don't have. There are just a handful of these growth stage companies that are doing very well in an outrageously large market with incredible momentum and track record of success. We are one of those few companies. If the world is going to need more of what we're doing, we are undervalued.

Thank you. Thanks for having me.

I am probably most excited about the autonomous fighter jet because it is pretty wild, pretty first of its class and it's just like a big plane. Airplanes are cool. But my opinion will probably change in about four weeks because we have a lot of really cool stuff going on.

Yeah. So we're eight years in. We're at about 7,000 employees. We have consistently doubled revenue every year. So even over a billion, we're still doubling revenue. And so we have just massively ramped on the top line, number of employees, and then the number of products we've been able to field is just pretty unsurpassed. I think we're in dozens of different fielded products, depending on how you count it, configurations, whatever else. But we've just been able to show the ability to rapidly get new capability out to the field quickly and that there's demand for it and we can make it go quick. And so it's just really grown a lot faster than I anticipated. I thought we'd be five, six years from now at this point, but just the pace that the customers have been excited about what we're doing, the uptake, all of that has gone a lot faster than I would have thought. I think there are macro reasons for that. There are execution reasons, a huge part of it. I think we build the right things at the right time. But somehow it continues to accelerate even beyond where we're at today.

Yeah, we have electronic warfare. So all the jamming, all of those pieces. We're thinking about cyber things. It's all sorts of crazy stuff. The way we think about it is a couple different things. One, just natural progression of the company. We're going to move up in the complexity and scale of what we can work on. So if early on we were working on smaller drones, it made sense for where we were at, the capital to actually get there, the expertise you need to have, it's a solvable problem quite quickly. We've moved up into just much more sophisticated capabilities. We're making low-cost cruise missiles that fly hundreds of miles. We're making autonomous fighter jets. Three years ago, we weren't believable to make autonomous fighter jets. Now we're doing it and we're going to have them be produced in a production facility in months from now. So just the physical scale, the complexity, everything we're doing, we're able to mount harder and harder things. It reminds me of the Tesla progression through a handbuilt Roadster that was limited edition, through to increasing sophistication on production design, all these pieces. So you kind of have that angle. Then the other piece of this is what is believably going to be a good big enough business to justify us being into it. That bar has raised over time. The scale of the business we need to go after has gone up. But the parts that have held true are we've got to be able to see real adoption within three to five years. We're not working on things that are 10 years out. That's just not where we're at. We've got to see the ability to get real traction in the next few years. We've got to have a technical edge of why would we be able to do this better on production, on software, on hardware. What is the insight we have? And the government's got to want to buy it. At the end of the day, we don't have that many customers and they've got to be at a point in their life cycle where they're investing in this type of capability now. So you could have made small drones 10 years ago and tried to sell them to the government. A lot of people did. Not that many of those businesses are around anymore because the government was not ready to move out at any meaningful scale at that time. And so really getting that market timing right is probably the most important part for us where we have conviction this can actually go because we've got the business intuition, the technology, the customers ready that this is going to pay out in the next three to five years. So that's how we always assess it. The other through line with this is we're not going to work on stuff that we don't believe is relevant for the future of where the military is going. You can chase nonsensical products that don't have longevity, that aren't actually fit for purpose. Maybe you can make some money off of it for a few years, but if you're not actually aligned to where the government's going to be, where the military is going to be 10 years from now, it's not going to work out. So everything we're doing, we are constantly validating this is something that would actually be dominant in the long term. This actually makes sense to integrate into the military. And if you're right on that, it tends to work out in the long run. It may not work out immediately, but over the long run, you will be successful.

Yeah. I often think, are we as good as we would like to be in terms of beating the best commercial companies and getting things out to market? Not always, but defense is a very unique world where you're going to build a lot of different products at relatively low volumes. That's actually a very strange world to live in. Compare it with a Tesla or an Apple where they're going to build an outrageously high rate of these products and saving two seconds off your production time can mean significant amounts of savings or you can get out much more of the system. We're in a very different world when we've thought about manufacturing with production with all these things. This idea of how do we have the ability to sustain very high mix of products, relatively low rate, and be extremely flexible crosscuts everything we're thinking about. And then the other side of this is we've had this through line of nearly everything we're doing is around this future of a more disconnected, more autonomous battlefield. That's a core part of the thesis we have. So we've been able to build up a software platform, all the components you would need from sensors, from compute, from networking systems like communications, all this stuff that enables us to go really fast when we get on to a new capability. So we're not inventing all the software from scratch. We're not inventing all the hardware from scratch. We've got this toolkit and baseline that we refine and build on over time. So this enables us, if you live in this world where you're going to have a lot of products and you're going to have to field them fast and you're going to have to mature them fast, it's the only strategy that's going to work. You've got to keep this recipe, this toolkit of components that you can bring to bear very, very fast. And then you need the software to tie them all together. And that's Lattice for us, that core software that makes everything smart and work together. So we've taken a strategy that's quite different from what a lot of the traditional players have done. That's expensive. That's hard. It takes a lot of conviction that you're building the right things. You've got to get it right. There's no short-term feedback on it. You just have to have belief of where this is going to go and invest in it.

Yeah. So, highest level, our view should be these should be cheaper. If we're working on something, we should be coming in at a fraction of the cost of the alternative approaches. We can get there through the fact that we're using commercial off-the-shelf components or things we've invested in cheaper production processes and really just designed it with cost in mind. So that's a baseline we start with. But pricing with the government is a mess. It's incredibly complicated. There's a huge art to it. Sometimes they want to see your cost and your price as well. Sometimes they'll just use other price justification. It really is all over the place how you're allowed to price these things intelligently. But our view of this is it should get to a rational place that every other industry has gotten to, which is we would prefer to work on things where we charge a fixed price and there's a sustaining fee to this. I'm paying year-over-year for upgrades and everything else, and that's how the software gets better. That's how your systems get better. It's a very rational win-win outcome. And we also like models where if it doesn't work, we don't get paid. It's a controversial position in the government, but we really prefer models that hold us accountable to delivery. It just makes us a better company and the government gets a better outcome. So we always try to find these ways to take more of the risk, to be more accountable. That works really well for us and I think it's a win-win scenario versus the traditional approach where the government took all the risk and you get a fixed profit fee. That's a disaster. Everything just gets more complex and more expensive. It doesn't work out.

The main change he's driving at is when you look at the industrial base, the ability to produce and the ability to get new capabilities out quickly is one of the most determinative aspects you can have as a defense department, as a war department. And that's not where we're at. We've had a strategy for generations which has been the decades-long technological edge is how we win. The US invested more, had better engineers, and capitalized it more efficiently to get to that massive technological edge. There is still a dimension of that for sure, but increasingly the ability to produce at scale in a way you can afford, the ability to innovate fast on the software to rapidly adapt these capabilities, that's going to be the determinative characteristic. We see this in Ukraine. We see this across the board. So everything he's trying to align around is this idea of how do we get capabilities out faster to the force in a way that is affordable and effective. Companies that can work in that world, great. Companies that can't, you're going to die. And I think that's a healthy view. What he's not saying, and I think because the reality is there is a mix, is some of the stuff is going to look like autonomous systems but it's not all going to be that. There's still going to be a place for aircraft carriers and all these things, but the balance is going to shift. There are these new class of capabilities that are really relevant that can be more cost effective, that you can produce at scale, and that's going to be a key aspect of what we do in the future. So the focus is really on industry that can perform, setting up incentives for performance, and setting up the whole acquisition system around speed where prior it was entirely set up around we just need the most expensive capabilities at any time at any cost. And that's not the world we're in anymore.