Rocket Lab (RKLB) investor relations material

Neutron program development and strategy

• Neutron's first launch vehicle is targeted for the pad in Q1, with launch soon after final checkouts and regulatory approvals.

• The program will total about $400 million in spend over five years, exceeding initial estimates but still far below industry norms.

• Emphasis is placed on reliability, leveraging Electron's lessons and prioritizing mission success over schedule.

• Neutron is designed for reusability, aiming for 20 uses per rocket and rapid turnaround, with margin expansion expected from the third launch onward.

• Only about 10 launches per year are needed to reach target margins, with significant market opportunity from both government and commercial sectors.

Market demand and competitive landscape

• Medium-lift launch demand is strong, with Falcon 9 as the main peer, and government programs like NSSL offering $5.4 billion in opportunities through 2029.

• Commercial demand is driven by large constellations such as Project Leo and Telesat Lightspeed, with satellite launch slots currently facing two-year wait times.

• The market needs more than one player, and Neutron is positioned to capture both government and commercial demand.

Financials and margin outlook

• Electron reaches optimal gross margins (45-50%) at 24 launches per year, with current production capacity able to support double that volume.

• Neutron's standing costs are about $80 million per year, but reusability is expected to accelerate margin expansion compared to Electron.

• Early Neutron launches will be negative margin, but profitability is expected as reusability is proven and cadence increases.