Meanwhile, we have shifted certain non-Neutron R&D resources to support the execution of our MDA contract production ramp. Non-GAAP expenses were up $900,000 quarter-on-quarter driven similarly to GAAP expenses. Q1 ending R&D headcount was 625, representing an increase of 40 from the prior quarter. In summary, total first quarter headcount was 1,760, up 76 heads from the prior quarter. Turning to cash. Purchases of property, equipment and capitalized software licenses was $19.2 million in the first quarter of 2024, an increase of $8.8 million from $10.4 million in the fourth quarter of 2023. This sequential increase was due to our continued investment in Neutron research, testing, and production infrastructure projects along with the expansion of our satellite production and space solar solutions capacity.
Cash consumed from operations was $2.6 million in the first quarter of 2024, compared to $42.2 million in the fourth quarter of 2023. The sequential improvement of almost $40 million was driven by a lesser net income loss and working capital improvements owing to the ramp-up of production in our MDA Globalstar program and a step up in launch cadence, as well as strong cash collections, including initial milestone payments related to our space systems programs. Overall, non-GAAP free cash flow defined as GAAP operating cash flow reduced by purchases of property, equipment and capitalized software in the first quarter of 2024 was a use of $21.8 million, compared to $52.6 million in the fourth quarter of 2023. The ending balance of cash, cash equivalents, restricted cash, and marketable securities was $564.9 million as of the end of the first quarter of 2024.
As discussed on our February earnings call, we generated $355 million in a convertible senior notes offering, which was coupled with two deployments of $43.2 million supporting our convertible capped call and equipment facility loan repayments, as well as $11.2 million in debt issuance cost, yielding $257.4 million of net financing. We exit Q1 with a strong position to exercise inorganic options to further vertically integrate our supply chain with the critical capabilities consistent with what we’ve done successfully in the past. Our full quarter profitability trend demonstrates progress towards adjusted EBITDA breakeven and attaining our long-term financial model. We expect Electron’s gross margins to continue to improve over time due to increased scale and production efficiencies, and satellite manufacturing contributions to improve due to increased scale and leverage of growing IP capabilities and infrastructure.
With our strong launch manifest and increasing scale driven by space systems contract execution in 2024, we are well positioned to continue our progression to adjusted EBITDA breakeven following our Neutron investment cycle. And with that, let’s turn to our guidance for the second quarter of 2024. We expect revenue in the second quarter to range between $105 million and $110 million. This range reflects $77 million to $81 million of contribution from Space Systems, and $28 million to $29 million from Launch Services, which assumes four launches. As Pete noted, we do have a fifth launch slated for late June but are taking a cautious approach in terms of guidance setting given the end-of-quarter timing risk. We expect second quarter GAAP gross margins to range between 24% to 26%, and non-GAAP gross margin to range between 30% to 32%.
These forecasted GAAP and non-GAAP gross margins reflect mix shifts in our Space Systems segment towards the larger and lower margin satellite manufacturing program revenue contribution versus certain of our higher gross margin component offerings, as well as a weaker mix within our components businesses. We expect second quarter GAAP operating expenses to range between $74 million and $76 million, and non-GAAP operating expenses to range between $62 million and $64 million. The quarter-on-quarter increases are driven primarily by increased Neutron investment, including staff costs, prototyping and materials, as well as our annual merit increases effective April 1. We expect second quarter GAAP and non-GAAP net interest expense to be $1 million.
We expect second quarter adjusted EBITDA loss to range between $23 million and $25 million, and basic shares outstanding to be approximately 494 million shares. And with that, we’ll hand the call over to the operator for questions.
Operator: Thank you. [Operator Instructions] And we’ll go first to Erik Rasmussen, Stifel.
Erik Rasmussen: Yeah. Thanks for taking the questions. Maybe just on Neutron. You obviously made a lot of significant progress and passed the number of milestones in the Archimedes being the latest, I guess, major one. But you are pushing that out by at least six months. Is it mostly on the engine side sort of the conservatism there and sort of what can pull that timeline in, or even push that out further?
Peter Beck: Yeah. Hi, Eric. So the engine is always a long pole in the tent, with any launch vehicle development. So, and look, we learned a lot building that engine and getting it to the stand, and we’ll continue to learn more, as we go through the engine qualification and hot fire programs. But that engine is really the primary driver for the move. And rocket programs are notoriously difficult to kind of plan because I think a lot of people see the rocket, but they don’t see all of the tremendous amount of infrastructure around it that it takes to bring a rocket to fruition. So there’s a lot going on in the program, as you saw in some of the materials there. But really the engine is always, and certainly for us, the driver for the program.
Erik Rasmussen: Okay. And then what would you say then this was the first, we call it — still we’ll call it a test mission, right, or an R&D mission. Could there be — if you do get it in the middle of the year, could you actually then, what do you think the timeline would be for you to start to? And assuming that’s a successful launch, what do you think the timeline could be sort of matching what you previously said of maybe three following that R&D the following year, and then five the other year? Is that still the right way of thinking about it?
Peter Beck: Yeah, totally it is. We’ve played this game before and sort of the one, three, five is the right way to think about it. And I think that certainly — as we’re building capability and in some cases stock, that’s exactly how we’re planning it still.
Erik Rasmussen: Okay. And staying with launch, but going back to Electron, you had 22. It sounds like there’s some changes in customers in the manifest, and that obviously, is maybe impacting even this quarter. But we would have thought that if you’d hit that 22, you would have had to do six in Q2 for each quarter for the remainder of the year given you did four. Where do you think that number could wind up and could you actually even hit 22 for the year still?
Peter Beck: Yeah. Look, I mean, we had the solid 22 missions booked this year. And as I mentioned on the call, it’s literally a game of manifest, whack a mole, and people move out. Very rarely people move to the left, but that does occasionally happen. We have a bunch of folks that come in at the last minute. The biggest challenge for launch timelines is not so much vehicles. It’s often licensing and sometimes mission design and payload structure development. So although, we’re in May, certainly not waving the white flag, but we — as more time goes on, it gets more and more difficult to be able to do that and bring those missions in or add new missions to the manifest. So we’re just making sure that we’re being transparent here that it’s going to be difficult to get those 22 missions off purely for some of those reasons.
So where we actually end up at the end of the year is kind of in the hands of our customers in a lot of respects. But I’ll make the point that, this is just the reality of launch, and none of these missions go away. They just sort of move around and some will move into other quarters and some will move into next year.
Erik Rasmussen: Okay. Great. Well, and then maybe just last on the MBA contract, it seems like this program and revenue recognition is kicking in. Maybe just help us understand the revenue trajectory and contribution or maybe the weighting as we sort of progress through this year.
Adam Spice: Yeah. I can take that one, Pete. So, Erik, to your point, we are in now the meat of the rev rec underneath this program, and we expect to recognize the majority of the remaining contract value in 2024. And it will be, I would say, kind of, you think about it, kind of peaking probably in the — kind of in the Q3 period, maybe shifts to Q4, and then we’ll also start to see more meaningful contribution from the SDA contract that we announced earlier this year. So I think we’ve kind of managed to have things land in such a way where you don’t have kind of a risk of a big drop off as the MDA contract kind of comes to a conclusion because we’ve got a contract that’s more than 3 times larger, kind of following it in the wings, if you will.
So I think that, again, our plan is to still see almost all of the remaining contract value recognized in the 2024 time period. And there is an operating contract, the SOC, that goes along with this MDA Globalstar agreement, but that’s relatively small in the grand scheme of things with regards to the total contract value of roughly $150 million.
