Rocket Lab Corp Q1 FY2025 earnings call

• Launch Services: Electron had five missions in Q1 with 100% success, booked eight new Electron and HASTE missions, and demand for launches is high with over 20 launches expected this year. Neutron was selected for the DOD's High Value Launch contract NSSL program. • Space Systems: Acquiring Mynaric, a German laser-based satellite communications company, with potential to expand European footprint and improve spacecraft supply chain. Varda missions continued with the third spacecraft launched. Introduced new products like STARRAY modular solar arrays and Frontier Satellite Radios. • Neutron: Significant progress made, including second stage qualification campaign, stage 1 upper module nearing completion, launch pad at Launch Complex 3 in Virginia on schedule, and Archimedes engine testing ramping up.

In Q1 2025, Rocket Lab's Launch Services segment generated $35.6 million in revenue, while the Space Systems segment brought in $87 million. The Launch Services segment contributed approximately 29% to total revenue, and the Space Systems segment contributed around 71%.

• Revenue for Q2 2025 is expected to range between $130 million and $140 million. • GAAP gross margins for Q2 are projected to be between 30% and 32%, non-GAAP gross margins between 34% and 36%. • GAAP operating expenses for Q2 are expected to be between $96 million and $98 million, non-GAAP operating expenses between $82 million and $84 million. • Adjusted EBITDA loss for Q2 is expected to range between $28 million and $30 million. • Negative non-GAAP free cash flow in Q2 is expected to be in the range of $40 million to $80 million.

• Supply chain risks, particularly with the acquisition of Mynaric and potential issues with component shortages. • Regulatory processes related to acquisitions, such as the approval process for the Mynaric acquisition in Germany. • Volatility in tariff environments and their potential impact on the business.

Q: About Mynaric, what are the biggest issues and plans to address them?

A: The biggest issue is production. Rocket Lab plans to address it by leveraging its strong production capabilities.

Q: Elaborate on launch margins variability and free cash flow expectations?

A: Launch margins are affected by cadence and ASP. Cadence and better ASP in the back half of the year will improve margins. Free cash flow is expected to remain elevated until Neutron's first launch.

Q: Impact of international space budgets growing on Rocket Lab?

A: Europe is a key area with opportunities in launch, satellites, and components.

Q: Update on Electron reusability?

A: Electron reusability is paused to focus on Neutron development as it offers a bigger impact per engineer.