Rocket Lab USA, Inc. Q4 FY2025 earnings call

Archimedes engine development follows rigorous process like Rutherford. Neutron made progress with major structures and subsystems passing qualification, entering final integration. Infrastructure like LC3 established. Fourth quarter 2025 revenue was a record $180 million, up 36% year-on-year. Strong performance from both business segments. Gross margins improved sequentially. Ended Q4 with ~$1.85 billion backlog, 69% sequential growth. Operating expenses in Q4, GAAP and non-GAAP below guidance. Cash spent on property, equipment, etc. increased. GAAP EPS loss, but non-GAAP free cash flow use. Proceeds from equity offering for acquisitions and growth.

Fourth quarter space system segment delivered $103.8 million in revenue, a sequential decrease of 9.1%, mainly from satellite platforms and solar businesses. Launch services generated $75.9 million in revenue, an 85% quarter-by-quarter increase due to the increase in launches from 4 to 7 during the period. Full-year 2025 revenue was $602 million, up 38% year-on-year. Fourth quarter gap gross margin was 38%, non-gap was 44.3%. Full-year GAAP gross margin was 34.4%, non-GAAP was 39.7%.

First quarter 2026 revenue expected to range $185 - $200 million, up 7% QoQ, 57% YoY. GAAP gross margin 34%-36%, non-GAAP 39%-41%. Gap operating expenses $120 - $126 million, non-gap $106 - $112 million. Adjusted EBITDA loss $21 - $27 million. First quarter GAAP and non-GAAP net interest income $8 million. Basic weighted average common shares outstanding ~605 million shares.

Subcontractor progress affecting revenue recognition under ASC 606. Neutron development technical challenges like Stage 1 tank issue. SDA project subcontractor delivery delays possibly impacting revenue recognition timing. Uncertainties in international business and government programs.

Q: Andrea Shepherd asked about backlog composition.

A: All SDA contracts added to backlog, tranche three value in backlog, Neutron flights in launch backlog.

Q: Edison Yu asked about space data centers.

A: Early with data centers, non-traditional customers exploring, spacecraft have radiators but scale is challenge.

Q: Ronald Epstein asked about Europe.

A: Europe has opportunity, working with Rocket Lab Europe, launch is strategically important.

Q: eric rasmussen asked about Neutron timing and Electron launch plan.

A: Timing of flight two depends on flight one, Electron launch growth expected in 2026.

Q: Trevor Walsh asked about OSI acquisition.

A: Owning optics in-house drives certainty for customers.

Q: Ned Morgan asked about space systems and acquisitions.

A: Space systems revenue recognition depends on subcontractor execution, acquisitions for vertical integration.

Q: Guadamcana asked about Neutron tank failure and vertical integration.

A: Confident new process avoids anomaly, looking to vertically integrate in areas like RF.

Q: Ryan Kuntz asked about backlog and Golden Dome.

A: Mix of commercial and government opportunities, well positioned for Golden Dome.

Q: Michael Leshock asked about satellite constellation and tank production.

A: Satellite constellation still long-term, AFP machine makes tank production fast.

Q: Jan Engelbrecht asked about PWSA and optical terminals.

A: SDA tasks better with dedicated layers, Monarch best for optical terminals.

Q: Jeff Van Rie asked about Mars project and gross margin.

A: Mars project competitive, gross margin affected by program mix and launch rate.

Q: Suji De Silva asked about Electron ASP and Neutron timeline.

A: ASP increased with HAST mix, Neutron timeline affected by anomaly but lowers risk.

Q: Christine Leeweg asked about Neutron timeline and SDA cash.

A: Neutron anomaly led to reallocation of resources, SDA program cash flow green with large payment received.