Earnings call transcript Q1 2023

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Operator

Hello and thank you for standing by. My name is Jessica and I'll be your conference operator today. At this time, I would like to welcome everyone to the Rocket Lab First Quarter 2023 Financial Results Update and Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session [Operator Instructions]

to Manager. conference like Canfield, to now Relations, Investor would turn over the Colin I ahead go Please sir.

Colin Canfield

call Labs' you. to us conference have thank you discuss Hey Hello, join today everyone. for financial quarter XXXX first We're glad to results. Rocket today's

the the begin to like established statements qualify Act. intended company, may and I'd our to the for remind that to Harbor liability forward-looking these by statements call, Securities relate that protection the future remarks Litigation we Before you contain Private performance from Safe of the are Reform

and are that highlighted Any guarantees and our Exchange such statements not press the today's influence of others are future results with performance contained in and filings factors our are release could Securities in Commission.

information the as upon any not to the statements obligation required Except subject are does update are date and for law, these available of future change developments. undertake to by as based company, to company hereof the Such statements.

release non-GAAP supplemental materials, the of remarks such our SEC. and today by Our historical non-GAAP release these also Included enacted within press financial the comparable the a of G This contain is and in supporting Regulation calculated our on being meaning in financial accordance call of a replay financial with presentation will webcast measures GAAP. with and a available be measures also and copy to presentation measures the website. reconciliation

and Chief take Adam are today will Executive Officer, Lab's Peter Founder Financial presenters Rocket Beck; After Chief Our comments, our and Spice. questions. we prepared Officer,

call And now, Mr. me over Beck. to the turn let

Peter Beck

well further quarter. of accomplishments of go the since thank presentation for achievements over business we've you key the Thanks for as Collin made as joining will and quarter and the XXXX first Today's welcome our everybody end us.

today's outlook our financial finish Adam will first some with financial we'll quarter be After for results before the QX attending. take questions conferences XXXX. that, and the take call near-term covering us we'll for the then through

of Each the quarter company launches, started year the achieved to for achieved important missions the successful on these we what the All strong quarter. year. with of for first expectations right, Electron our milestone. an three We matching

our Wallops seven soil. We by NASA successful and from In quickly in then January, from a mission LC-X followed later, up March, launch US second we launch had worksite just we launched New that our days from in a Zealand. US first

Achieving only cadence XXXX as but by it delivering from Not and for we're us -- early to-date, Electron different launch the sites flexibility now. to that of fastest two the demonstrated launch our our high was this year well in countries missions in responsiveness launch this turnaround launch really sets XX for country level customers to doing hit planned. up

fail our when launch experiencing At a in our beyond small service We're new from and deliver the for bookings successful market, to customers. launch to continuing we're increase customers we're missions and sectors. seeing commercial many for across in government correlated a Electron time companies and returning XXXX

milestone with of quarter, delve the and development we the was Neutron with revenue key great. payment Force as program of a US Later presentation, the into the the We which launch some progress part Space well. met. Neutron. a year in off is program Our as I'll vehicle is from in first formal started strong updates This for recognized

through components milestones major wins two our take that also across in strength Our program seeing as continued some eight Rocket had I'll or spacecraft this featuring We're quarter really satellite big power division, missions. Space Systems XX the also business most and significant satellite some of on with and builds software took solar well. Lab you we booking

launch rapid from for Complex in that from the X-day X third in Zealand, quarter two Launch launches, Electron two Launch first New X missions strong including a Complex Virginia sites. turnaround a mentioned, between As and

All were contracts. all commercial for operators, of them missions have bulk whom these launch dedicated of constellation signed

the workforce and consistently. XX reliable Electron Electron only government and spawn as launch remains delivering commercial the itself Commercial need orbits than more vehicle proven a has launches Across providers and this pennies unique operators alike. the for to satellite

In fact, U.S. in deliver Electron vehicle even only of orbit today, small is all launch in satellites the successfully to XXXX.

requirements. have mission the to was With to for latest the see any One Capella more U.S. of Complex of move X. from Capella operational, to those signed we multi-launch our fly in Electron launch deal customer with or X February now The missions meet and X us Launch with the deals we flexibility Space. if need missions Complex dedicated

On team continues at development time, second closing a test stage, the latest booster including composite tanks. milestones work show with hardware parts to them all Neutron photos our of the same in full-scale at Neutron ahead full-scale first These from those the our size in on of tank in We QX. QX. flight key while Neutron facilities, Lab. towards Development the at the pace U.S. of Rocket hitting some steadily factory

QX, a of to neutrons Force Space payment Force phases launch X accuracy the awarded part national space defense a or to to stage awarded upper national million for maximize NSSL This orbit is completing missions program $XX of development insertion Phase X security X. In successful launch. capability, Phase to reached Lane we the capabilities milestone through of security all contract by us These that dedicated highest responsive develop position also well and are master payment Space launch U.S. orbit and Neutron. Neutron the priority

progression have is Neutron planned and development, techniques these for additive chambers. well engine we that Archimedes, a we're injectors, out reusable manufacturing components Archimedes great Meanwhile, engines, are engines. full-scale proves the XD Archimedes advanced the it to coming the off combustion the including in progressing This printers,

is always at I've an Rocket developing said, puzzle capability when launch But one-third of as only scale. the orbital

test manufacturing facilities and You also advanced systems. and need launch

for large-scale to machines enable Launch vehicle production. and advances So while made construction printing our X Neutron test assembly Neutrons and several the team teams facilities systems Complex have new developing rapid significant ground development, progressing and manufacturing the vehicle commissioning progress infrastructure of XD

not underway. is advanced Last simulations -- vehicle into software but we're least, the design flight and well that production flight simulation now is

for been Rocket always a us out Lab, we fly has develop, vehicles. peak differentiator spacecraft, test a it's Electron of to and enabling our software, Photon drive Software tailored or performance our own whether key

every configuration. like single and we and to profiles are delivering successful report a of key in range GNC, simulation pleased mission fit vehicles We current missions or mission, successful years. this in these the I'm to Electron has codes orbital mission simulations our that with for and control flight the to orbited flying for to guidance a navigation factor of flight been thousands reliable,

important this early. this Neutron achieving So for to be it's

have as space of going leading business spacecraft XXXX year air part strength. systems component probably This truly that Rocket just we've now. won't -- achievements was cemented the And we Onto in and keeps and we Lab's to position our large-scale from to manufacturer. this into we manufacturing spacecraft moved the and now milestones presentation. can more cover There execution. that been strength time have

some BlackSky, hit launches Lab software XX Eight more highlights. like just for OneWeb. in including constellation and than deployed QX or customers spacecraft commercial missions Capella I'll So hardware, featuring Rocket

constellation of scaled Systems XX including for a programs. an Photon our depot. We integrated acquisitions spacecrafts customers, To in communications to X achieve teams, various our for a course, on-orbit manufacturing and all vertically Mars, submission have Systems spacecraft satellites space development fueling Space manufacturing manufacturing facilities expanded global this, than staff we've our in into and Space of development our and more

twin up for As seeing major our that to Escape and spacecraft particular, part production of we're well Solutions hit for our several mission our growth, that Solar building milestones Production strength now missions. the mars. in and booking continued is division, for we're in underway NASA coming

the date at our Long integration and forward Beach. satellite set, been now us Our XXXX to production facility launch testing move has allowing assembly with in

Now, our the key of end on achievements to QX. since

to we'll constellation North of with days With successfully two the critical following providing tropical mission to and is to the hurricane time be second deploy and storm weather the really season. provide first lives. that launched accurate the missions we dedicated in with forecasters time days up American the one about that data warnings Constellation. and complete more save first a revisit now Just advanced constellation XX monitor two this This complete, satellites, for will ultimately in storms with than typical NASA Tropic ago, higher will for

Speaking different months orbit multi cube another on a They within launch vehicle, were styling manifested to we've contract mission they to mission awarded QX that deploy been continued launch will of delays by to been remanifested a test uncertainty, demonstrate on due mission, NASA, NASA's the and autonomous satellites but year. this electron long three just for these and have agency. We're to previously Electron of set four technologies. warm signing.

with uncertainty many other signed multiple dependable other after moved on vehicles as launch small to were and new manifested who testament reliable, ride have demonstrated rideshare with This including dedicated on small. previously a launch lengthy Albert facing We customers Electron, to delays to the is and position for Electron's migration that contracts electron providers. `recently

-- supply wind has priorities vehicles a critical the and how constrained. is now. that and nation, sustainable facilities for solve proven problem Hypersonic suburb are, are capabilities this right despite can key this of and these severely the And tunnels suitable we actually is

isn't needed reliable, the vehicle accelerator test Haste Suborbital formally high to hypersonic the quarter, provides derived launch is we electron. This introduced of promise hypersonic flight from a that systems. capability. test advance test the opportunities This haste, orbital electron, future cadence,

for right first fact, its now. rocket the is at Virginia undergoing final launch In LX preparations

and range been Mark study. TV program high-CAT of has and government Defense Navy project, the selected including DRU's targets Agency's for Cranes countermeasures Haste a programs,

and release haste, module. on you XX you weighing refer on I on more press to available our April For encourage the issued

This space final to of brought engine it engine back we is be have into that factory, program back the qualification we full and and stage the QX as we remaining production program Rutherford it quarter, forward now big This step put a launched flow our for that completed last This in will first tests a our on a extensive reuse. an year testing moving run second part flowing to before reusability join and year. later the gourmet of into through usability and into Rocket milestones, a also this it launch in few of is one the time.

space. that of work to pharmaceuticals on is also for our big for frozen week, Space spacecraft the support year and shipped and NASA This our great and to fuel products [ph]. of a four us a a planning milestone spacecraft LOXSAT high-value manufacture company photon at team and space see deep and way Space in Eta’s in-space photon Last Eta, space satellite busy start manufacturing and production NASA’s we Varda will to first Systems industries,

tracker tracker star constellations. star development star existing staff. least, tracker for buses has new satellite small this of but Photon can spacecraft designed spacecraft satellite be evolved but as XX we responsive for plus high-performance global mission for our specifically not for Mars new The last also and and introduced quarter, is in latest And version is solution. a used manufacturing a mass a

a off-the-shelf space that best-in-class components including joins we've sellout radios of scale. systems also hardware commercially reaction and wells, growing and make at It released, list for recently to spacecraft developed available

that, and I'll financial outlook. with to over highlights the hand So to Adam present

Adam Spice

Pete. Thanks,

the First revenue $XX.X million, to guidance of million. above of high end our $XX quarter XXXX million $XX was prior which was

First revenue strong of growth result and our sequential business. three successful Space and from Systems of launches contribution quarter X% the XXXX reflects continued

below first up our LC-X capacity. the getting resulting of partially we $XX.X The business average launch above the came to three $XX to rideshare prioritize in was off standard per filled services prior quarter, launch of guidance delay in revenue remaining versus where modestly our launch fill opting of off the delivered rideshare pricing revenue launch our mission due which to million. launches, Our million a

As discussed towards we what current missions. embedded to year, progress priced later, through our indicates the guide higher the in be the manifest is including QX trend

Photon which commercial $XX.X revenue end vertically in delayed delivered satellite impacts Our quarter, prior the customers supply $XX high components key business of programs. Space from of despite programs our $XX with defense, of the exceeded build million, civil and guidance Systems million integrated for range million and strength recognition to across in

for gross our margin. was to the margin end range quarter to turning XX.X%, above guidance was our above first well margin of X% negative high of GAAP X% quarter gross also of XX.X%, negative first well range to which Now guidance X%. X%. gross for was the the Non-GAAP

launch to QX GAAP relative SolAero combination launch between improved mix reflect and in level. improvements our our a average an gross the non-GAAP increased a as XXXX and favorable of margin PSD cadence, well and businesses, results as within and components at segment increase services price mix

redirect or QX the efficiency, XXX, production electron greater down of to resources and production Photon moderating us from ended incremental allowed headcount XX programs, benefited Relatedly, which R&D we margins with production-related gross has hiring. R&D to Additionally, shift prior quarter. headcount Neutron support thereby from

of high million. expenses. operating was for $XX were the $XX million of first to range Turning XXXX end to range were for our million, to GAAP $XX operating quarter which Non-GAAP our first million. of quarter $XX $XX.X expenses million the above guidance operating guidance also above the of $XX.X million, expenses

increase quarter the XXXX Photon by million employee driven recorded total supporting fourth expenses credit The cost operating $X.X versus primarily Neutron retention material in GAAP QX. both step-up non-GAAP a and staff was by and offset and purchases a in development, partially of in

R&D redeployment and non-GAAP ending existing the prior ramp $X.X increase of in GAAP to neutron count up R&D In $XXX, development expenses XX% an resources. quarter-on-quarter up from aggressively production quarter. and both our efforts were head QX specifically, representing hires continue through million was we of new XXX as

excluding XXX, In an stock-based outside million, XXXX, staff was in audit from representing stock-related from the of our count $X.X million items headcount was ending X,XXX by In the quarter-on-quarter, particular, the by summary, SG&A increased driven total costs. costs, and quarter. as primarily prior XX% quarter. and same expenses head of year-end compensation, increased expenses XX, heads driven SG&A, prior by GAAP $X.X QX compensation. March XX Non-GAAP up stock-based services, SG&A increase including

and was of property, primarily operations Cash by was compared as flattish The of to million increase quarter increase goods driven Neutron in continue software was capital in in fourth payment of the QX and we equipment in as production $X.X consumed sequential of million in facilities is during from million loss decreased million quarter and from an QX GAAP $XX.X XXXX investments first the Purchases QX. to and of working This in sequential of licenses received related $XX.X timing capitalized XXXX. million equipment $XX of decline XXXX to XXXX. largely enhancements. $XX.X our terms Photon the

Overall, cash software capitalized defined equivalents, non-GAAP first of million of purchases XXXX was and $XXX reduced GAAP cash in million XXXX. quarter first $XX.X of the to ending as compared of quarter as flow, in XXXX. balance million securities cash by $XX.X equipment restricted the free was cash fourth operating of of The property, and quarter market and flow the cash,

which expect three we and contribution million the for second of with to quarter. Space quarter and range reflects $XX to services, $XX million from $XX revenue $XX And Systems launches from million that, in -- between launch $XX million, million assumes which two

launches atopics forecasted One QX was three New successful of of Sunday's Zealand. the out in mission mass in LCX

As in XX earlier, continue selling price progress remainder our standard average XXXX. and launch backlog, through of to we the manifested our based to launches as pricing trend our on XXXX expect referenced we to

improvements, continued mix to average non-GAAP launch GAAP Systems improvements quarter between gross our XX%. XX% to a range second in to gross XX%, margin These expect within improvement efficiency and margin improvement Space GAAP We modest reflect between non-GAAP range segment. price and gross to and XX% forecasted margin selling

GAAP $XX million quarter operating to continued driven material and supporting programs. costs operating and $XX million prototyping range quarter-on-quarter range and Photon step-up The and and staff spend $XX expenses non-GAAP development $XX million second primarily in expenses are million. expect increases between We between by Neutron to and

million. non-GAAP We be net to and expense expect $X GAAP second interest quarter

loss shares and $XX to XXX outstanding EBITDA adjusted million quarter second shares. expect approximately million million and $XX basic We range be between to

that, questions. we'll to operator over with call hand And the the for

Operator

Instructions] Erik. question from of first Your Rasmussen line comes [Operator the

Erik Rasmussen

you quarter. having about will, in a good some that players out, there's with a looks smaller talk wanted the some It Thanks. there I wash the And obviously, Yes. of lot if is were other challenges. of launch. obviously Congratulations on positives to like

launch be a You an would bookings, achieving factor the increase mentioned limiting the to strong in currently in cadence that XX the launch given demand you're not what targeting? higher maybe

Peter Beck

it readiness customer as Erik, Yes, will usual. be

the we're the that's determining to booked be produce rockets year, the rate Like fully continues around We continue moving customers usual factory and said, for that will factor. required. to that's and the factor, I see to the

Erik Rasmussen

that opportunity, of progressing -- opportunity Lab? launch, could maybe with RFP updates staying on Rocket an things this be for the NSSL just your can and maybe process And share big are any Great. with how on you how

Peter Beck

the constraints the and have very naturally for extra with the the CNS suited and advocating program access provide is the the a with lane We're opportunity taken the we're balance ensures overall us two-lane is that good happened what's happy really of nation the happy approach to high, clearly mass through ensuring Yes. has onboard gives assured the folks to We're keep Neutron. bar space class approach of which incumbent, but the X to additional services.

So on will be of Neutron ready in play to is amongst vehicles time to lane a we in think do very that group positioned so. small that very well

Erik Rasmussen

question. then Great. And maybe just last my

talked, and should guided You and about how launches? you XXXX of context of sort the what of sort rocket in -- for XX haste introduced you've overall we the and think launch the these total

Peter Beck

Yes.

be flights hypersonic will XX that the So number included in

Erik Rasmussen

good. Very

Operator

next your the comes line Capital. of Roth And question from

Suji Desilva

It's Hi, so on Desilva, you progress Suji Peter congrats just pretty impressive. So Adam. was X-day had the the turnaround

kind turn some Just all, curious, were the but I around trouble quickly are of at will you allows having that use quickly. further elements what that? generally, allow know, just what around to launching turn to competitors your that proprietary be that you improve of able to

Peter Beck

the to teams a only and one-third that. do equation Yes. I the cross-train mean Suji. Having that good the here. is also of rocket facilities can order both do that It's of question, part the in

a coming frequency. off rockets kind we and out that the having different production of launch support multiple can -- launch that at line enables the rate also So of sites

planning where -- requires well very in. and are trivial very, do. of built teams in kind a now bid not It the that's very tuned production and a And vehicle got cadence, to. the factory we've is that's capable really coordination but it's of launch honed that was to We lot well a high So of launch delivering. and

are enable that things to that. will those achieve So us

Adam Spice

operational that, in add have too, to right? piece. the would control that and We it I entirely. one that where Suji, talked is The Yes. those locations key really Pete it's really two control, mean, fact we a private about I of infrastructure. manifest the launch

flexibility. So trend it kind us a give of

be probably flexibility I you ranges, I nobody impossible could really the think that of that level think right? really this of if else us to do own two do would allows it one do. So didn't really to could things

Suji Desilva

then would Is Great. Okay. on my Space other expected. And that Globalstar -- I initial upcoming is it's the calendar imagine half start aggressively MDA in when XXXX. program, on timing unchanged? And the ramping contribution more question the revenue is the and second Systems still the Thanks the which there

Peter Beck

Yes.

we'll revenue from So meaningful to that see start QX. in contribution

significant fairly that a be from first step will up half obviously QX. QX XXXX. into QX in of And it So then on and continue the from into

So that articulated everything Everything looks is the with yes, good, of we've schedule. consistent in on past. everything kind

Suji Desilva

guys. Okay. Great. Thanks,

Operator

the Stanley comes of Your from question line next Morgan

Unidentified Analyst

everyone. afternoon, good Hey,

payload having kilogram. of we up was full margin? you Haste looking are year. terms Are think paid right, per same your the payload, How same it? about in and with now versus price about was economics launches you that revenue do on XXX guidance Following price, economics kilograms XXX you for Electron and total the the overall kilograms launches included about of of at at these previous Haste -- getting can they have for so the or Electron of talk some per of the with payload Haste XX having for But Electron,

Peter Beck

Yes, sure.

buy vehicle dedicated comes when someone rocket. when the you mean buy whole to they I us, the launch rocket, buy you a So entire

a priced out cost per it's So not kilogram. as

cost where to whole metric fact, applicable In cost actually kilogram you is the missions may of ride pay kilogram. kind really per only share per

Electron a launch mission extra assurance, will Haste like And higher coming obviously, that the or a orbital So more mission. than – demand element ASP mission, very standard the missions fixed vehicle. someone's us trajectories buying an mission and have and whether orbital of it's typically mission to an complete suborbital assurance a

Adam Spice

a out because New a And again, range versus LC-X there's there's also by Yes. premium launches NASA -- for Kristy, our operated that's also in in Virginia range of that's launch a Zealand.

that the a there's drive be right all going -- out all hypersonics of So opportunities variety to now, of things flying are LC-X.

drives ASP. the upward of premium an Pete around the all reasons mentioned locational assurance, bias So also mission but for kind to

Unidentified Analyst

see. I

In margin the between terms versus HASTE launch, how two? a between of economics do launch Electron differentiate an we

Adam Spice

Well, again, probably would I out the biggest launching NASA. to range of pay largely, again the those -- fees are be LC-X. difference in. We would But factored I mean, say

a So to contribution from launch? perspective, margin rocket lab equal should ordinary they be your

Unidentified Analyst

the you up idea the Do around for on how can times I down also, the engine And Rutherford third many turn engine in reuse used? see. an you following line? can of re-flight And then quarter. be how a these quickly engines have single of

Peter Beck

a it's question. great Yeah,

So a to answering in the number on engine performance XX in through going your like degradation question the them times all. backwards. The XX recovered qualification test duration at of a put hot or the no that's we buys, we've and full orbit total engines, did of

the Ratherford very engine engine is good So margins. nugget and mighty with the

reuse And taken our to we're noticed way being need probably So to would step slowly the we through here and have But reflying we've puzzle the times. and difficult you new the stage most to limit engines, caveat this. that a very first, piece that be in is once that XX in excess kind the the conservative we of of then the complete. the independently built because flying are of whole confidence element we we hardest that's whole critical believe of

Unidentified Analyst

color. the for you Thank Great.

Peter Beck

Okay.

Operator

line And from question comes the your [indiscernible] of next

Unidentified Analyst

Hello?

Peter Beck

We can hear you.

Unidentified Analyst

color. Hey, Sorry provide little bit Could are hey, that. how you? you just a about of

is could headcount why production that little you happened? like reasoning give to down, a looks as it So

Peter Beck

Yeah.

I to repurpose been Photon able our been that we've initiatives. we've convey to to neutron earlier was the resources support production trying again, R&D that So fortunate and

that where we building case a have really it's gotten efficient, these So to electrons more we've be resources. much

basically resources support than now R&D move R&D. those production just So those to reclass from we programs, can or higher to support rather heads incremental

types folks R&D that of speaks performing of capable to be flexibility kind fungibility resources really able as helpful have we that and fungible need the us of those equally the where, have, again, move and production to super So to we tasks, for can are that our around a workforce be. just very complex

that's So it. really what's driving

earlier, just increased, the change production it's on quite mix bit stride again, within Electron. in that headcount kind total As of a we as efficiency hit mentioned I new

Unidentified Analyst

you, if got just that are where systems Yeah, some Got of to then you maybe -- the burning SolAero you. that And give backlog want on the sense. just guys quantify on makes could I space little and touch that you update maybe order a momentum low-margin at down? at

Peter Beck

Yeah.

So, opportunities way Xz side full is lot high-value not that spacecraft constructed Space kind Xz, kind the things. opportunities. is getting the on but the Systems that component the on of small of going increased side the not Space we side, we've are only we're of This of after on also a for -- Systems business

to backlog. programs then movers going chunky after be overall close, they large when do We're will meaningful

a So say longer we kind sense. bit close, taken continue kind smaller that, I deals deals, I than would see progress which towards, momentum of makes those would to say, have and of but little to

supports last couple margin of Pete the that SolAero business you can over the margin transition with north what profile with Business, be deal get and of all acquisition than the came closing when the have and way new then, backlog it business. look business to I of gross I to a higher And kind and of incredibly we're been and tell of quarters, putting XX-point significantly the at this into gross impressed the you, margin really is

probably lower time, margin on anticipated there's prior longer it's the that placed. all we and replaced be And internal business originally backlog year at new about us to It's -- a with too, a burn-through a this programs. of dynamic call, being we for talked take fulfilling same about it going demand is to have this than

build. into sell, merchant higher So Solutions vertically obviously, we're our down continue, at Solar we're margins. But only to integrated market obviously to the the

So goodness as we have well. there

want If you to anything, add

Peter Beck

we're point, on a been selective moving we as little on and to to needle which mentioned, Adam we're Just looking there, take we've Adam's a here orders pretty serious do not close take a been things they very solar say we've longer naturally, And constrained for while to on now And I that harping constrained then environment things. as that, a as more than supply. would things. looking solar

And that to crunch are the it's that those more if only across solar need fairly but spacecraft or now, in some has margins. right manufacture and obviously, solar we're occur. look capacity, to you a helping investing started is of to development drive clear in all constraint And

Unidentified Analyst

helpful. very guys. Thanks That’s

Operator

the Instructions] of next line Jason question comes [Operator from Your Gursky.

Jason Gursky

to are And Peter, opportunity today talk Hey four, next it give Hello, five competitive see everybody. I an wanted the landscape about you maybe and maybe things to you as the about years. how talk evolving?

shaking you the next over years? so And you landscape out get competitive the a sense from several on how you here see

chewing the on you Adam, upward you're that beginning you're environment seeing to and the through? been see particular building maybe, some backlog backlog new that of and the can that -- to just here pricing relative to tied orders this I've kind question. of you're kind the in that whether we're And on lift

Peter Beck

Jason. to just arrogant view that, reliability that, service certainly, good it personal say Thanks, you. demonstrated enter and harder is be for but difficult. into think nobody my that out to break that becomes that, and pretty crystal ball great can't do being I not will such its mean, harder a market has that think as my But small on get I Yeah. I would at tough Electron here to this I'll point. launch,

we've deliver and years more lots -- ways. a over of a I'm lot So, even recently, the -- more in seen of failure more to failure launch or vehicles dramatic

a in the great small really probably if little future. niche Electron the small will well And vehicles side, launch it's too there. market I many I'm launch on online nice think to I and So, not sure It's market. do coming continue see a

XX Now, think launch on sort crunch fact there's XX, to kind that that's maybe I but of the up a -- the in different large, to timeframe. to of coming that very medium XX a environment. And

that at manifest, of spacecraft bought the kind figure to all launch other out, available look as look look at scientist and of are rocket a of most you be to like need launch up vehicles development, in the the you globally, I don't at delayed Kuiper who the well. You and delayed that X of if Ariane likes

the our to going to Neutron here really, And of course, online right that peak bring approach time. and interesting is crunch. at whole of be a philosophy That's really

that we well. So, think do vehicle

at play is look a X Phase and provide you Neutron a program, to like situated If -- things NSSLP good there. good in the ideally role

environment, businesses a real So, of have survive. new and products to capital-constrained kind we're I in think real

think to wood executors whittling I over that strong of and going somewhat there's a it's going are ones to to -- left supplier. of be the are be really the

really market. That's of And the the creation a that's then of market than market. heavy think an on more a of servicing the I rather the stuff, interesting

interesting will years. five be I that think super to the over next four

to Adam. over you, So,

Adam Spice

seeing surprising. Yes. regards missions pricing to say, supportive other with I Jason, dynamics, things being with has you're certainly, like would very been to us -- from re-manifested providers

I to so. do think to continue it's going

there's others. just of Pete lack been from delivering a execution as on think I mentioned, payloads

so Program on to have basically -- delays going really a I the to thing orbit this degree a satellite people do. that difficult realize to are to of is starting to you're their costly confidence incredibly are customers high think and So, that there on deliver time. ability

-- see very And then kind Again, to it's we -- all it's are I of side, to significant customers a launch towards in think that very pricing. premium really supportive the some starting put willing we're again, on Systems strategy to that the end-to-end that's Space so seeing pay for place. benefits we're something

the do many who multiple margin turn. We within a different that control manufacturers programs. we margin can key and good, we satellite platforms really of subsystems -- that can issue And deliver of have have attractive the of so other our of we in kind knobs lot can some ways levels degrees have that for oftentimes, we unlike very of that So, stacking. profiles the very

without that that And together doable the again, pulled think level integration be I don't we've would here. vertical of

front. direction right the I'm we change and Systems kind in on in -- moving pricing I on We don't I've and Space both to So, right just as now, optimistic see that trend as all think launch of continue the pieces for see any been.

Jason Gursky

Okay, great.

Okay. If more? speak one I

Adam Spice

Yes.

Jason Gursky

Yes.

Okay. Great.

back begins here you'll and on second the that doesn't risk? planned? And get that risk to half to the maybe either aware that going ramp of retirement your you technical kind bit extent expectations retirement like of as on Can kind as there we you be So the year. program revenue of sounds margins just are it or to working for the that risk now a about as the of risk any should retire just be talk the appreciate that going you go Globalstar, milestone in little and

Peter Beck

arising course, I can a I of And talk just briefly It's I'm difficult Rocket to uptime. chain continues the But work technical the operates everything continue very -- to spacecraft. supply make magic with the environment. difficult continue on to the team. milestones. that major Lab very It is have team knock and incredible to that's it incredibly produced impressed needs in And say like a down team not the milestones time. PDRs sure their to

way Adam my project of -- more happy to issues. think it I to horizon, likely the super that the we're can But together. talk on nothing causing there's working I big a that's coming certainly, hard let all is But with got does. So issues. technical We've less can sure I that foresee we're to team very make cause very

Adam Spice

Yes.

of on on to margin lot lead we procured I items -- in that hand. a So aggressive the the would to say do were program this profile, very long early get in

ago. lead long that purchase done were year contracts so or a So like

are we as we are we market this of have kind a absolutely costs years. because on platform, vertical for tremendous our integration input very good obviously, selling the there particular, of elements. to what source in the costs program, what know And solutions the So have in and merchant the amount for third-party then the large part into been same we've many visibility

come lot behind starting bite up that in right risk Ruby rocket we're much But quite program, satellite. more a closer and the you low. risk on we're seeing I So we get we a and as as a mirror. deliver time to starting -- these as us be to to retired of gets platforms, the now, a get say would is or There's margin it's things the that actually the whether on always program actually

a good cause and as, yes, program would So I of feel from of again, as at huge surfaced the program we derisking kind have kind think pretty perspective about far margin we're that technical no where obstacles either. pay to

So we're good shape on in I think on margin. time both line and

Jason Gursky

the appreciate time I Okay. guys.

Operator

question And Yu. the of Ed comes line from your final

Edison Yu

Hey, it's Edison from Yu Bank. Deutsche

little a guggle name bit. the think I

think the on relative the more back space a Was yet, it to margin. do upside the wanted out where it broke you or you question, don't in gross expectations First but more see I systems? launch come to quarter? to

Adam Spice

that quarter kind into we was a much, on optimism gross But go of around. from there with the into things the bunch R&D. guidance production I the resources being on margin. of be again, former as to say, Well, would moving were exceeding that really able reposition Obviously,

marine into came we a lot that of realized. as the were bunch late of stage in a focus [ph] kind So of that quarter, of kind get a

certainly, you that I absorption. going improvement, things, now, if we have look would the of think the right be fact dealing driving is cadence we've got biggest I if dynamic area say a we're with you at still on margin -- side the the there's upside look kind for overhead at fact that's to of launch because --

we now So that launch we to have have we of two own. obviously support. ranges kind One,

bit with fixed that along And plus so cost fixed in a New Virginia, have little site. that look cadence a the we of relatively out if that costs range in at upon of high it's it. drive cost, you with So Zealand, go dependent LC-X that, of kind very variable a NASA

the leveraged So the per side are where really, on even our really, to again, very, quarter, launch in. number those coming is now and launches of very launches increasingly business

in like where of Virginia. So QX theoretically, you three out had launches came two our of

that out in unallocated the be of over Zealand. to absorbed did a those that cost -- one lot of LC-X I New over come left mission think

out going coming in launches to the different are is Now where be mix the QX, of.

You'll have two out of LC, one in New Zealand, one LC-X. out of

able be coming intensive Wallops. the New costs absorb those variable of coming and fixed Zealand, two of you'll cost to have out of So mission launches you'll one over more out

XXXX think scale with quarter, launches past, to as six as next this get to and of do kind of to for we're to at target to to an we've in going our out exit where fourth go overwhelming targets. the right model tremendous of that shooting the again, we rate from getting get now we're And for talked of margin really a those out in margin, there's of year to. to Cadence I XX room XX where amount the driver establishing So year launches is

stage the then piece, of And course, other booster. the of is recovery first

Space this on that a progress very the making with been later little to mentioned Pete the that engine But that there business pockets is, are -- have it's got fly we've So going that's year. particularly gross bit of nice margins. Systems that

biggest you talked at scaling like it gross a about others backlog. margins the really of where that kind historical increase the kind as little really, of lower bit from recovery. and suffered rock There's the if through we've past, come upgraded can lower through electron from turn are look that that from, in cadence being come we can But

Edison Yu

color. it I product I also Systems lines the I specific on, you outperformed And you would know the one And Space just more SolAero. specifically. win guess, new in a think announced on follow-up Any call quarter. out? Appreciate

forward So, that outperforming? products just some sort curious of kind of the trajectory is there going

Peter Beck

Yes.

really manufacturing has grower been right? business, the So from piece. I So percentage big satellite -- photon really mean, perspective the the a

mentioned as recognition and start ship revenue MDA it's a in we the QX, And able on Varda first the Pete Globalstar uptick were really, see to to you're so going satellites. very meaningful spacecraft, earlier, to

the year, previously. So again, of second of programs the percentage continued the that to biggest kind that from identified is again, of going half kind we've by far be grower in

Edison Yu

Okay. Great. you. Thank

Operator

have question And final we a [ph] from Nadir the line of do

Unidentified Analyst

Yes. Yes.

Okay. follow up. more to Yes, one just

Given of guys start mean, targets see through pretty long-term that are outlined? the can manifest you being we XXXX. some I to certain going when more

Peter Beck

on to XX launches. been this think we've the clear I pretty Well, manifest, growing year,

to pretty to consistent with for year, to strong. that's, of exiting drive up in Next opportunity. model, small -- that kind remains of opportunities that's to and at I pretty would revisit had. We what that again, long-term But us launch volume XX of -- set the that's be neutrons that and distinct XX consistent rate there's there's year. we've electron. And a for opportunity very there's model nothing caused say had the kind we year per continues think XX, I course, -- dedicated from The market but launches and market over our think target enough separate the we've

relative to group. be continue outperforming We peer our to

going XXXX, basically to which through anybody's we've of what kind beyond kind of of the we're I think kind already you for point. far longer-term you're of don't I of telling what kind it's next launches Yes, is out So Once articulated, guess think kind year. for kind pretty expect give going outlook to this – of launches we of into end get at

then see where pretty from exiting little rate what of high also in market where some the some some But percentage months, visibility say, pattern year, I that. obviously, question We the and -- on kind than just longer XX a out a we're more share do at to what even XX high that XX, and to going a out get starts to into and kind to here have XX we've where XXXX, maintain We it share. of there. obviously, you recognized great Once right XX bookings But all we'll bit market got goes we're visibility, have would track we'll unclear. We our is now, in market we've capture this market be. there. it of believe year the able do cases, that kind share. within a next to And track have opportunities or on again, we months. are becomes be get we tremendously of of And

Unidentified Analyst

Got you. Thanks.

Operator

And there time. are this no further at questions

Peter Beck

exciting us then, of wraps thank will and and for today's up about forward progress and and you speaking everyone, presentation at be look these joining more the opportunity speaking made call. seeing up and in. to Rocket share Adam exciting Thanks to we to I you forward is again, that you, being on coming updates the conferences, to Lab. look news the and and which Well,

Operator

call. conference today's conclude does This

now may disconnect. You

Rocket Lab USA (RKLB) 9 May 232023 Q1 Earnings call transcript