$18b Rocket Lab reveals biggest financial year on record – and delivers Neutron launch update

That was an update from earlier guidance to have the rocket on the US launchpad by mid-2025.

“We’re giving ourselves a little more time.” CEO Sir Peter Beck said on an earnings call to investors on Friday.

“But, we’re talking months here, it’s not very material.

“We look forward to unlocking the medium-launch bottleneck.”

The company also revealed new details about Neutron’s related infrastructure, with images of an ocean barge named “Return On Investment” for part of the rocket to land on when it became fully reusable and could return to earth – similar to SpaceX’s Starship rocket.

It was expected to be used in 2026 – the first Neutron rocket would splashdown in the ocean off Virginia’s coast.

“This is the year of Neutron,” Beck said.

“Neutron is coming to market in a record time.”

Civil works on Neutron’s launch site were almost fully complete – only electrical systems were left to be finalised.

“Yes, we even have water,” Beck said, a jibe to a short-seller report released earlier this week that cast doubt over Neutron’s launch and the preparedness of its launch site. (More on that below).

“I’m very happy with the progress.”

In an unexpected development, Rocket Lab also revealed a new constellation-class satellite platform called Flatellite.

“Applicable to national security, defence and commercial services, the new satellite also signals a bold, strategic step toward potential paths for operating our own future constellation,” the company wrote in an announcement.

The space company postponed the launch of its Neutron rocket last year, pushing what was a 2024 launch target to having a rocket on the launchpad in mid-2025.

“It was an ambitious target and that’s the way we roll,” Beck told the Herald’s Markets with Madison in October last year.

Despite the delay, Rocket Lab’s share price has risen 339% in the year to February 27, to a market capitalisation of US$10.25 billion (NZ$18.2b), as it progressed development of the Neutron rocket and the construction of its dedicated launchpad in Virginia’s Wallops Island.

By the numbers

The company’s net loss for the quarter of US$52.3m was slightly larger than the previous quarter’s US$50.4m net loss.

Operating expenses for the fourth quarter were US$88.3m, above its forecast range of US$84m-US$86m.

US$48.2m of that was spent on research and development (R&D), including building and testing Neutron parts.

In the previous quarter, it spent US$37.4m on R&D.

In its Q3 announcement last year, Rocket Lab revealed a US$1b backlog of revenue due to strong Electron launch bookings and rising space systems sales. It expected half of that revenue to materialise within 12 months, and all of it within two years.

In the first quarter of this financial year, it was targeting revenue between US$117m and US$123m.

Short-sellers spark selloff

Rocket Lab’s share price fell 20% this week after a report from New York-based short-seller Bleecker Street Research cast some investor doubt over the timing and cost of a Neutron rocket launch, and therefore the timing of revenue earned from it.

Funds managed by the firm were betting against the stock, meaning it would make financial gains if the share price fell, the report’s disclosure read.

Bleecker Street’s report titled Rocket Lab: We Think It’s Gonna Be a Long, Long Time, cited dozens of federal, state and local filings, technical documents and conversations with 23 industry experts, including an unnamed “Nasa engineer” and “former Rocket Lab executive”, in its research that began last September.

Its report suggested the company would delay Neutron’s launch by years and need to raise capital or debt – an allegation overriden by Friday’s confirmation of a 2025 launch.

Beck told the Herald extra financing was not necessary in October, and the Neutron programme was on time and on budget, forecast to cost between US$250m and US$300m.

He added the caveat: “It’s a rocket programme.”

However, on Friday Rocket Lab chief financial officer Adam Spice told investors its quarterly cash consumption would double from its current average of between US$20m and US$40m, before eventually moderating.

The total percentage of short interest in Rocket Lab’s share float had reduced from December to January, by 4.85% to 13.69%, according to MarketBeat.

Markets with Madison asked Beck about an increase in short interest, to as high as 20% of his company’s share float, last year.

“It’s not surprising at all. In fact, it’s probably surprising it’s that low given the amount of failure in the space industry,” he said in October.

“You don’t need to look far to see a large number of space companies, especially launch companies, that really had no chance, promised the earth and then just absolutely ran into a wall.

“So, I think there’s a lot of suspicion within our industry.

“My CFO always reminds me that we have the best house on the worst street, and along with that comes these types of things.”

Beck said the increase in short selling last year was partially a result of its upsized US$355m (NZ$593m) convertible note offering to institutional investors earlier this year, to help fund potential acquisitions and pay down debt and associated interest costs.

But Beck added: “I don’t wake up every morning and look at the short interest and think ‘Oh my goodness’. I wake up every morning and think ‘Right, we’ve got milestones to hit, how do we get here?’”

Madison Reidy is the host and executive producer of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.