Rocket Lab Reports Record Earnings In Second Quarter of 2024

Rocket Lab, the New Zealand-based small launch services provider, announced yesterday that it had record earnings in the second quarter of this year, resulting in a 71% year-over-year growth for the same quarter in 2023. Rocket Lab has extensive manufacturing and launch facilities in the United States. It current launches out of Wallops Island, Virginia and in its native New Zealand.

Rocket Lab founder and CEO, Sir Peter Beck, said: “This year’s second quarter was Rocket Lab’s highest revenue quarter in Company history at $106 million. This 71% year-on-year revenue increase demonstrates the strong and growing demand for our launch services and space systems products, and importantly, our team’s ability to execute against it. Meanwhile, we reached a critical milestone in the development of our new medium lift rocket Neutron, with the successful completion of the first hot fire for the Archimedes engine. Over the same period, we made significant progress in Neutron production and launch infrastructure with the scaling of engine production facilities, installation of the automated fiber placement machine that will produce Neutron’s largest carbon fiber structures, and we furthered development of Launch Complex 3 and the integration and assembly facility on site in Wallops, Virginia.”

Beck added, “On the small launch front, Electron remains the leading small rocket globally with successful launches in the quarter for government and commercial customers, and demand for it continues to grow with 17 new launches signed so far this year. We also continue to reach development and production milestones across our space systems programs, in which we have more than $720 million in spacecraft under contract. Some significant achievements on this front include the completion of twin Rocket Lab-designed and built satellites for a NASA mission to Mars, as well as completing successful development reviews for the government and commercial constellations we have in work.”

The company recently marked its fiftieth launch, and according to the company, it was the fastest to do so in the commercial space market. It plans to launch as many as twenty-two Electron missions this year, but due to payload constraints, the number would likely be lower. In their recent earnings call, Rocket Lab CFO Adam Spice said, “There is just no customer readiness to support a launch beyond 18 for this year.”

Spice was speaking on payload readiness, a factor that has limited not only Rocket Lab: United Launch Alliance was forced to pivot the second launch of its new Vulcan heavy-lift rocket to a “dummy” (inert) payload due to Sierra Space not having Dream Chaser ready in time to be the payload for ULA’s Vulcan CERT-2 Mission. That example aside, it is not unusual for launches to be delayed due to payload readiness.

Rocket Lab Q2 Highlights

In their press announcement of their second quarter earnings, Rocket Lab highlighted the following milestones and accomplishments:

• Achieved our highest revenue quarter in Company history at $106 million.
  
• Successful Electron launches for NASA, commercial constellation operators Synspective, Kineis, and the Korea Advanced Institute of Science and Technology (KAIST). Electron remains the most frequently launched small rocket globally and Electron launches have accounted for 64% of all non-SpaceX orbital U.S. launches in 2024 to date.
  
• Successfully launched our 50 ^th Electron mission, reaching 50 launches faster than any commercially developed rocket in history.
  
• Demonstrated pinpoint deployment accuracy by launching customer payload to within eight meters of target orbit (accepted industry tolerance is typically 15 kilometers).
  
• Signed 17 new launch contracts year-to-date, including multi-launch deals with commercial constellation operators, a HASTE (Hypersonic Accelerator Suborbital Test Electron) launch for a government customer, and two highly complex missions for the Department of Defense, including a responsive launch demonstration in which Rocket Lab will build a spacecraft, as well as launch and operate it as an end-to-end space service.
  
• Reached major development milestone with successful completion of first Archimedes engine hot fire. Now moving into full production for remaining flight engines.
• Significant progress made in development and flight hardware of Neutron structures, fairing, avionics, and flight software.
  
• Infrastructure development progressing to support first Neutron flight and operational launch cadence, including scaling Archimedes engine production line, arrival of long lead cryogenic systems at launch site, installation of automated fiber placement machine for Neutron production, and entering final construction phase of establishing final assembly facility at Wallops, Virginia.
  
• Completed production of two spacecraft for NASA’s ESCAPADE mission to Mars, scheduled to launch this year.
  
• Signed preliminary terms for $49.4m in state and federal funding, including a portion under the CHIPS Act, to expand production of solar cells in Albuquerque, New Mexico.
  
• Progressing development and production of spacecraft for Varda Space Industries, as well as constellations on contract for the Space Development Agency and MDA/Globalstar.
  
• Introduced a new satellite dispenser at the Small Satellite Conference in Utah to provide customers with more flexibility when designing spacecraft.

All considered, with growing revenue and anticipated earnings from when their new Neutron medium-lift rocket comes online, Rocket Lab is on a clear path towards profitability.

Market Reaction Is Positive

After the earnings announcement, Rocket Lab stocks took a positive turn:

Looking Ahead

Rocket Lab listed the following guidance for the current quarter (Q3 2024):

• Revenue between $100 million and $105 million.
• Space Systems revenue between $79 million and $84 million.
• Launch Services revenue of approximately $21 million.
• GAAP Gross Margins between 25% and 27%.
• Non-GAAP Gross Margins between 30% and 32%.
• GAAP Operating Expenses between $80 million and $82 million.
• Non-GAAP Operating Expenses between $69 million and $71 million.
• Expected Interest Expense (Income), net $1 million.
• Adjusted EBITDA loss of $31 million to $33 million.
• Basic Shares Outstanding of 498 million.

Note:

This article does not present financial advice, and the information contained herein is provided by the company mentioned.