New industries are emerging as space becomes more open for business. Rocket Lab’s CEO reveals what opportunities it’s chasing in the space economy as it competes with Elon Musk’s SpaceX.
Video / NZ Herald / Cameron Pitney / Getty
Rocket Lab’s Electron launch anomaly that forced it to ground spacecraft for three months last year has proved costly for the New Zealand-founded, Nasdaq-listed company, but didn’t stop it from signing its biggest contract yet with the United States military.
Its preliminary fourth quarter result released to the market onThursday showed launch revenue was down 29 per cent compared with last year, to US$8.5 million ($13.8m).
The drop was due to a launch hiatus after one of its rockets failed during a launch in September, caused by a complex power supply system issue.
Its profitability sank deeper into the red, with an expected net loss between US$49m and US$52.5m, compared with a loss of US$37.2m in the same period last year.
Expenses blew out by at least 59 per cent to between US$62.5 and US$64.5m as it progressed with its build of a reusable rocket called Neutron, set to be sold for around US$55m per launch later this year.
Founder and chief executive Peter Beck wrote in the market update that progress had been made against Neutron’s key development milestones - but offered little else.
“[We] look forward to introducing new medium-lift launch technical capabilities and much-needed incremental capacity to the market.”
Rocket Lab's 43rd Electron rocket launch lifted off from the Māhia Peninsula near Gisborne this week.
Beck pointed to its growing space systems business as a sign of success - an increase in revenue in that line of business offset the launch division decline, taking total revenue higher by at least 29 per cent to between US$59m and US$61m.
Rocket Lab’s share price fell by as much as 14 per cent to US$4.17 after the announcement.
It closed out the quarter being awarded its largest-ever contract signed with the US military’s Space Development Agency worth US$515m.
The US contract, signed in December, required it to design, build and operate 18 space vehicles for the US Government, according to an SEC filing.
The SDA’s explanation of what Rocket Lab would be doing for it was jargon-heavy, but it was part of its broader role as the operator of the Pentagon’s network of military satellites, titled Proliferated Warfighter Space Architecture.
Rocket Lab also announced on Thursday that it was raising US$275m with an optional extra US$41m from institutional investors to help pay down debt and fund potential acquisitions.
About US$40m worth of the money raised would be used to repay some of borrowings and interest related to a loan it took in late December with Trinity Capital to finance the purchase of equipment.
Repayments on the six-year loan were due to begin in January this year, according to an SEC filing.
It would use the rest of the funds as working capital, including to potentially buy new businesses or technology.
It successfully launched its 43rd Electron rocket from the Mahia Peninsula near Gisborne this week, collecting a piece of the rocket from the Pacific Ocean which parachuted back to earth 17 minutes after lift-off as part of its reusability efforts.
It planned to launch a record number of rockets this year from New Zealand and the US.
Splashdown! Rocket Lab collected the first stage of a rocket from the Pacific Ocean this week as it moves towards reusing launched rockets.
Madison Reidy is the host 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.
