• Revenue: $106 million for Q2 2024, a company record with a 71% year-on-year increase and 15% quarter-on-quarter increase.
• Launch Services Revenue: $29.4 million, slightly above guidance.
• Space Systems Revenue: $77 million, in line with guidance.
• Gross Margin: GAAP gross margin at 25.6%; Non-GAAP gross margin at 30.7%.
• Backlog: $1.07 billion total, with $294 million in launch backlog and $772.6 million in Space Systems backlog.
• Operating Expenses: GAAP operating expenses at $70.4 million; Non-GAAP operating expenses at $58.5 million.
• Cash Flow: Cash consumed from operations was $13 million; Non-GAAP free cash flow was a use of $28.3 million.
• Cash Balance: $546.8 million in cash, cash equivalents, restricted cash, and marketable securities.
• Adjusted EBITDA Loss: $21.2 million, slightly improved from Q1.
• Guidance for Q3 2024: Revenue expected between $100 million and $105 million; GAAP gross margin between 25% to 27%; Non-GAAP gross margin between 30% to 32%.

• Warning! GuruFocus has detected 3 Warning Sign with BRLT.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Rocket Lab USA Inc (NASDAQ:RKLB) achieved a record revenue of $106 million in Q2 2024, marking a 71% year-on-year increase.
• The company signed 17 new Electron launch contracts year-to-date, with a total contract value of $141 million.
• Electron is now the third most frequently launched rocket globally, highlighting its significance in the industry.
• The Neutron development is progressing well, with the design phase largely complete and production and qualification of flight hardware underway.
• Rocket Lab USA Inc (NASDAQ:RKLB) has a strong backlog of over $1 billion, indicating robust future demand for its services.

Negative Points

• The company faces challenges in predicting the exact number of launches per year due to customer readiness and scheduling flexibility.
• Operating expenses increased in Q2 2024, driven by growth in headcount and Neutron development costs.
• Cash consumed from operations increased to $13 million in Q2 2024, up from $2.6 million in Q1 2024.
• The company anticipates a pickup in cash consumption in the second half of the year due to increased Neutron CapEx.
• There is uncertainty regarding the exact timing of achieving cash flow breakeven, which is expected to occur two quarters after the first Neutron launch.

Q & A Highlights

Q: What are the next big milestones for Neutron as we approach the first launch next year? A: Peter Beck, CEO, explained that the focus is on infrastructure build, such as the launch pad readiness, and qualification tests like full-scale stage separation and fairing openings. The design phase is complete, and all components are either in production or undergoing qualification testing.

Q: How is Rocket Lab managing to develop Neutron at a lower cost compared to other programs? A: Peter Beck, CEO, attributed the cost efficiency to Rocket Lab's aircraft development approach and experience. They build flight-ready engines from the start, avoiding subscale tests, which accelerates development and reduces costs.

Q: Can you provide an update on the expected number of Electron launches for the full year? A: Peter Beck, CEO, mentioned that predicting the exact number of launches is challenging due to customer readiness. However, they expect to conduct between 15 and 18 launches this year, with no cancellations, just shifts in timing.

Q: What is the status of the SolAero business and its impact on Space Systems margins? A: Adam Spice, CFO, noted that SolAero is moving towards the target 30% gross margin, with new business being signed at this margin. The legacy contract that impacted margins is being phased out, and state and local incentives are expected to further improve margins.

Q: How does Rocket Lab plan to approach the data and services market, and what is the timeline for this initiative? A: Peter Beck, CEO, stated that while specific applications are not yet disclosed, Rocket Lab is building capabilities to enter the $320 billion TAM for space services. The focus is on leveraging their launch and spacecraft capabilities to provide competitive services.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.