Rocket Lab (RKLB) The Stifel 2024 Cross Sector Insight Conference summary

Business performance and segment overview

• Achieved strong year-over-year growth in Q1 with steady gross margins, driven by a diversified model split between launch (about one-third of revenue) and space systems (about two-thirds).

• Electron rocket remains the most frequently launched small, dedicated rocket, with 48 launches and a deep backlog of $200 million out of a $1 billion total.

• Space systems backlog is more predictable, with $800 million at Q1 end, including a $515 million Pentagon contract as prime contractor.

• Demand is robust across both segments, with launch business being lumpy and space systems offering larger, more stable opportunities.

• SolAero acquisition has improved margins from high single digits to mid-teens, with new business targeting 30%+ gross margins.

Major programs and contract milestones

• Neutron rocket development is on track for a first test launch in mid-next year, with first paying customer expected within six months after.

• MDA Globalstar program expected to contribute $100 million in revenue this year, with most hardware delivered by early 2025.

• SDA Pentagon contract will see satellite deliveries by late 2026 or early 2027, with revenue recognition ramping up in 2025-2027.

• Backlog has more than doubled year-over-year for several years, with ongoing pursuit of large government and commercial constellation opportunities.

• Classified and commercial opportunities are expanding as a result of prime contractor status.

Launch operations and pricing

• 2024 launch manifest started at 22 missions, but actual launches expected to be below 20 due to customer payload delays.

• Electron launches average $7.5 million, with some missions exceeding $12 million depending on requirements.

• Neutron launches anticipated to command $50–$55 million per launch, significantly increasing revenue potential.

• Launch pricing has firmed, with less discounting on multi-launch deals and new products like HASTE supporting higher prices.

• Multiple launch pads enable rapid turnaround, with as little as eight days between launches.