Q3 2025 Rocket Lab USA Inc Earnings Call

Speaker #1: Good day, and welcome to the Rocket Lab Corporation third-quarter earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone.

Speaker #1: To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Murielle Baker.

Speaker #1: Director of Corporate and Launch Communications. Please go ahead.

Speaker #2: Thank you. Hello and welcome to today's conference call to discuss Rocket Lab's third-quarter 2025 financial results. Business highlights and other updates. Before we begin the call, I'd like to remind you that our remarks may contain forward-looking statements that relate to the future performance of the company.

Speaker #2: And these statements are intended to qualify for the SAFE Harbor Protection from liability established by the Private Securities Litigation Reform Act. Any such statements are not guarantees of future performance, and factors that could influence our results are highlighted in today's press release.

Speaker #2: And others are contained in our filings with the Security and Exchange Commission. Such statements are based upon information available to the company as of the date hereof and are subject to change for future developments.

Speaker #2: Except as required by law, the company does not undertake any obligation to update these statements. Our remarks and press release today also contain non-GAAP financial measures within the meaning of regulation G enacted by the SEC.

Speaker #2: Included in such release and our supplemental materials are reconciliations of these historical non-GAAP financial measures to the comparable financial measures calculated in accordance with GAAP.

Speaker #2: This call is also being webcast with a supporting presentation and a replay and copy of the presentation will be available on our website. Our speakers today are Rocket Lab founder and chief executive officer Sir Peter Beck, as well as chief financial officer Adam highlights, including updates on our launch and space systems programs.

Speaker #2: And we will discuss financial highlights and outlook before we finish by taking questions. So with that, let me turn the call over to Sir Peter.

Speaker #3: Thanks, Murielle and Murielle. And thanks, everybody, for joining us today. It was another record-breaking quarter for Rocket Lab. We're up 48% year on year with 155 million in revenue and strong gross margins as well.

Speaker #3: This is the second time in a row we've delivered record-breaking growth quarter by quarter. Once again, demonstrating our relentless execution. Electron demand is accelerating faster than ever before.

Speaker #3: And the momentum continues to build with our largest launch contract backlog yet with 49 launches on contract. We've just launched our 16th mission for this year, equaling last year's launch record.

Speaker #3: And we've got another launch scheduled in the coming days that will take us to 17 with more to come and a new precedent set for electron annual launch cadence and we see this precedent continue in 2026 as well.

Speaker #3: Amazing performance is also the theme across our space systems groups. Our twin spacecraft for NASA Mars mission are integrated onto its launch vehicle. And are ready for liftoff in Cape Canaveral in the coming days.

Speaker #3: And for Neutron, we've got a full update to share on our progress to the pad following the official opening of the launch complex three in August.

Speaker #3: Ticking off a critical milestone in the program. We'll share more detail about that in the upcoming slides. So before we get into it, I want to zoom out and talk about our performance over the last five years.

Speaker #3: Given this is sort of a little bit of a wrap-up for the year in some respects. Execution and reliability are critical in the space industry.

Speaker #3: But even more so in the public markets. And our ability to consistently deliver results for our customers, expand our capabilities, and grow our revenue and gross margins really sets us apart in the sector as we set new benchmarks for operational and financial success.

Speaker #3: From 35 million in revenue just five years ago, to our implied four-year guidance of roughly 600 million at the midpoint, and approximately 1,600% increase over that time period.

Speaker #3: And our gross margins are looking great too, from negative 34% GAAP gross margin in 2020 to the midpoint of our implied four-year guidance of slightly over 34% positive in 2025.

Those who have failed to deliver are numerous basically every new space company except rocket lab and SpaceX has failed to build an orbital rocket that has scaled to any kind of launch Cadence and is reliable. Now, this is the rocket lab process in action and I've been Resolute about sticking to this approach.

Now with all the hardware in front of us now, and significant testing programs underway across all parts of the vehicle. We can see we need a little bit more time to retire. The risks and stick to the rocket lab process. Yep, it might mean things will take a little bit longer but I want to give some context here. I mean the labor cost for the program is about 15 dollars a quarter which we make back 4 times you know, over a single launch anyway so it makes zero sense to change what we know um and what is proven to work.

So we're aiming to get to Neutron to the pad and q1 next year. If all goes well, um, with the first launch thereafter,

Uh, once again though, uh, that's provided that myself and the team are confident. We have completed, neutrons coil, testing, and acceptance testing program to the rocket lab standard as always, this is a rocket program. So uh, that's been that's been completed at a pace and a cost that nobody has achieved before and the financial and long-term impacts are insignificant uh to take a little bit more time to get it, right?

Now, we've seen it: high expectations for Neutron's first flight. Our aim is to make it to orbit on the first try. You won't see us minimizing some qualifier about us just clearing the pad and claiming success and whatnot. And that means that we don't want to learn something during Neutron's first flight that could be learned on the ground during the testing phase.

Excuse me at the end of the day uh Neutron will fly when we're when we're very confident, it's ready. And we're not going to break the the mold of the rocket lab Magic.

Now, um, over the next few slides, um, I want to take you through some of the testing campaigns we've been running to paint a bit of a pitcher of what it takes to deliver a reliable rocket to the launch pad.

Uh, as you've seen for some time. Uh, we're very Hardware Rich across the entire vehicle now. Um, now it's all in sort of assembly and qualification and acceptance testing, uh, before it's all brought together under the East Coast site.

Okay, so these pictures are just a snapshot of, uh, of many of those activities. Um, we're we're deep diving into the qualification tests and acceptance of every major assembly sub assembly and system before we get into launch operations, in fact, I'd say we're putting Neutron through an even more extensive barrage of testing than we did electron. Um because it's it's not your kind of conventional rocket that we're developing. Uh we have a couple of Novel things. Uh being you know, the world first architecture, like the Hungry Hippo fairing suspended, second stage and the vehicle itself is is let's not forget, is the, you know, the world's largest flying carbon composite structure ever built.

So uh, we're making tremendous progress in these structures uh testing across all levels of the vehicle.

Pushing them all to their limits to ensure they meet the demands of launch and reusability.

Before we can call this qualified, we go through a full run of load, cases like axial, lateral, torsional, transient and combined, loads the main, and primary structures must withstand a left off of 1.5 million pounds of thrust. From the Archimedes engines. The worst cases of aerodynamic loading on the way up as the vehicle goes through, Max q and all the separation loads. And then for the structures that come back on stage 1, they have to survive, all the thermal and aerodynamic re-entry, loads too.

now we test secondary and auxiliary systems to the same level of scrutiny as well, this involves pulling and pushing across the same load cases even down to the smallest fixtures and the the, you know, the smallest bracket that holds every device in neutrons primary structure

A test across, both stage 1 and 2 structures have yield or wealth of valuable data and by anchoring and validating our engineering models through this test. We're able to uncover and retire technical risks on the ground. Well, before we fly,

With neutrons, reusable fixed, uh, fairing design, and our suspended second stage that passes through it. We're working, uh, with the unique architecture. That's never been seen on a rocket before and we've been taking, and we've been taking through its Paces, we've been taking it through its Paces, um, to really the entire system, for its first flight,

This is included, testing the Hungry Hippos, aerodynamic control, surfaces as well as turning the electromechanical actuators um and the control systems in all all the entire mechanisms.

The Hungry Hippos open and closed systems. Have passed performance testing.

And uh and so as a staging system systems, pneumatic locks and pushes and guides and all of the stuff that's inside of second stage, uh, that passes through the Hungry Hippos mouth.

Well, it's been 1 thing to to build these huge assemblies for flight 1. The team is also set up the infrastructure for this testing that allows us to get this close as, um, to to a flight test as we could possibly can on the ground. And this is important because it also lays a foundation is not just for the first launched, but flights to and Beyond. Uh, you can see um, some of the giant Towers in these, uh, staging tests on the right hand side of the slide there.

In fact, some people thought we were building a launch site, it was so big.

Uh, in the neutron, flight software in GNC team. Um, we've been flying to Orbitz, uh, virtually almost. Now, for 2 years, leveraging, our proven approach from the electron program where their own flight software, and Hardware in the loop testing that integrates physical components with simulated, flight environments, to, to validate, uh, system level function, functionability and performance.

In preparation for Neutron's First Flight our operators and Engineers have been running virtual test and launch operations weekend week out. Um we've been exercising our operations team on Console going through, static fire operations and launch day operations so that we can hit the ground running when the vehicle arrives at launch complex 3.

Our world-class simulation tools, built in-house, allow us to exercise our avionics GNC and software tools well in advance of conducting operations with the fully integrated vehicle.

This not only allows us to reduce risk but also serves as a training platform for operations team.

Combine that with a full suite of vehicle avionics in the loop and we, uh, bring tests, like you fly, to a whole new level. It's all part of the smart, rigorous approach, um, that we apply to every program in Mission.

On to Archimedes. Uh, since the last engine update, the propulsion team has continued to validate its performance across the entire runbox. Uh, the upstage engine is on the, on the test stand too. And um, you know, we continue to work for all the qualifications, uh, testings on on these engines and a test as you fly configurations as you. Well, as, you know,

Uh, the test sellers is operating uh, at a 27 rate uh meaning 20 hours a day, 7 days a week. Um, the only way you can get through years of qualification, you know, always expected uh for an engine program is to squeeze years of hours into months.

Now on to our ocean recovery platform for Neutron, uh, while we return on investment badge, won't be used for the first flight. Um, the recovery team is making great progress on having it ready for Flight 2.

The 3 main propulsion uh generating sets for the 400 ft length. Barge recently passed Factory acceptance testing and have been cleared to be sent to the ship that your ship beard in Louisiana.

Each of return on investments 3, uh, diesel electric gen sets a capable of more than 3 megawatts of electrical power combined. That's more than 2.5 times. The total electricity capacity for all of launch complex 3. So, these things are big. Uh, all in all return on investment is looking good, uh, to enter service next year for the second launch.

To the Mid-Atlantic Regional Spaceport has ever seen. So opening, it was an important Milestone, uh, not only for the path of first launched, but for the assured access to space, that the nation needs, uh, as a launch as launch, congestion continues to build up across the country.

Um, we've designed the site to be able to turn missions within 24 hours. That was the design requirement. Now that's important for responsive space and uh, and the launch Cadence we expect for the vehicle. But equally so we can get Neutron straight um, into back and back uh, back to back testing during uh, during the launch and and reading this uh, campaigns as well.

So you can see, there's been lots of neutron activity this quarter. Uh, the team has made significant progress towards Neutron's first launched, um, while continuing to prioritize our very rigorous testing and qualification processes over rushing to the pad. Uh, we've seen what happens when others rush to the pad with an unproven product, and we would just refuse to do that. Um, and methodical and deep approach to qualification is what's Driven our reputation for success in real liability, in the industry, it's been a Cornerstone, uh, of our success with electron, and it's the same philosophy that will be applying to Neutron.

Okay, uh, here, then, with the financial highlights for the quarter and outlook ahead for Q4.

Great. Thanks. Pete.

Third quarter 2025 revenue was a record $155 million, coming in at the high end of our prior guidance range and representing an impressive year-over-year growth of 48%.

The strong performance was driven by significant contributions from both our business segments.

Sequentially revenue revenue increased by 7.3% underscoring, the continued momentum on the business.

Our space system segments, delivered 114.2 million in Revenue in the quarter, reflecting a sequential increase of 16.7%.

This growth was primarily driven by increased contributions from our satellite manufacturing business, which continues to perform exceptionally well and provides comforting diversification alongside our robust but at times lumpy launch business.

Meanwhile, I launched Services segment generated 40.9 million in Revenue. Representing a 12.3% quarter of a quarter decline due to fewer launches, During the period driven primarily by customer spacecraft delivery delays,

we have a busy Q4 manifest and as a result we expect a strong return, sequential Revenue growth and our launch business in the fourth quarter.

Now, turn to gross margin.

gaap gross margin to the third quarter was 37% at the high end of a prior guidance range of 35 to 37%

Non-GAAP gross margin for the third quarter was 41.9%, which was above our prior guidance range of 39% to 41%.

The sequential Improvement in Gross margins was primarily driven by a 1-time benefit from the transition to overtime Revenue recognition for certain haste missions paired with Revenue. Recognition of an electron Mission, cancellation due to a customer's internal program cancellation, which was recognized at 100% margin.

We added Q3 with production related, headcount of 1,198 up 48 in front of the order.

Turning to backlog.

We added Q3 2025 with approximately 1.1 billion dollars in total backlog.

With launch backlog accounting for approximately 47% and Space Systems representing 53%.

During the quarter launch backlog, contributed to game share, supported by strong, underlying Trends, as we convert a robust pipeline of opportunities to cross, electronic and haste.

This includes the 17 electron bookings signed within the quarter, that Pete mentioned earlier.

While Space Systems bookings remain inherently bumpy due to the timing of increasingly larger and high-impact program opportunities.

Space Systems. Backlog continues to hold a healthy levels. Despite the Step Up in Revenue, run rate recognized over the last few quarters.

We're actively cultivating strong pipeline, that includes multi launch agreements, large family, manufacturing, contracts across government and Commercial programs.

As noted earlier, these larger needle moving opportunities can increase lumpiness in backlog growth, but the architect will drivers of long-term value and scale for business.

Looking ahead, we expect approximately 57% of our current backlogged converted revenue within the next 12 months.

Additionally, we continue to benefit from relatively quick turns business, across launch and Space Systems, component businesses, that drive incremental Topline contribution beyond the current 12 months, backlog conversion,

Gaap operating expenses for the third quarter of 2025 or 116.3 million.

Above our guidance range of 104 to 109 million.

Non-gaap operating expenses for the third quarter were 98.1 million which was also above our guidance range of 86 to 91 million.

The sequential increases in both GAAP and non-GAAP operating expenses were primarily driven by continued growth in prototype development and headcount-related spending to support our Neutron development program.

Specifically Investments ramped up and propulsion as we continue to qualify our committees as well as in test and integration of mechanical and composite structures and our facility in Middle River. Maryland.

In R&D specifically Gap expenses, increased 4.6 million quarter of a quarter. While non-gaap expenses grows, 4.8 million

These increases were driven by the ramp up of Archimedes production along with higher expenditures related to mechanical systems and deposits as just mentioned.

Q3 R&D headcount was 1,019, representing an increase of 84 from the prior quarter.

In sgna gap, expenses increased 5.7 million dollars for a quarter. While non-gaap expenses Rose, 6.4 million quarter of a quarter.

These increases were primarily due to the acquisition of GEOS during the quarter, paired with higher legal expenditures, insurance renewals, and fees associated with our annual proxy statement and related filings.

Q3 ending sgna headcount was 385 representing an increase of 42 from the prior quarter with the majority of those coming from the closing of the GEOS acquisition.

In summary total heads count at the top. At the end of the third quarter, was 262 top 1074 heads from the park quarter.

Turning to cash.

Purchase of property equipment and capitalized, software licenses or 45.9 million for the third quarter of 2025.

An increase of 13.9 million from the 32 million dollars in a second quarter.

This increase reflects ongoing investments in Neutron development as we continue testing and integrating large structures that our facility in the Middle River.

Expanding capacity capabilities at the engine test stand and sending us a Mississippi, and scaling additive manufacturing at our Engine Development Center in Long Beach.

As we progressed towards neutrons, First Flight, we expect capital expenditures to remain elevated as we invest in testing, production scaling, and infrastructure expansion.

GAAP EPS for the third quarter was a loss of 3 cents per share, compared to a loss of 13 cents per share in the second quarter.

The sequential improvement to GAAP EPS is mostly attributable to the $41 million tax benefit we've recorded during the third quarter, which is due to the partial release of the valuation allowance against our corporate deferred tax assets.

as a result of acquiring an equal amount of deferred tax liabilities emanating from the Geo Acquisitions, purchase, price accounting,

GAAP operating cash flows were a use of $23.5 million in the third quarter of 2025.

Compared to 2 3. 2 2.

Similar to the capital expenditure Dynamics mentioned earlier cash. Consumption will remain elevated with a neutral development longer lease production for SDA investments in subsequent Neutron tail production and infrastructure expansion to scale the business beyond the initial test flight

Overall non-gaap free cash flow defined as Gap. Marketing. Cash flow less purchases of property equipment and capital software, and the third quarter of 2025 was the use of 69.4 million compared to a use of 55.3 million in the second quarter.

The ending balance of cash, cash equivalents, restricted cash, and marketable securities was just over $1 billion at the end of the third quarter.

The sequential increase in liquidity was driven by proceeds from the sale of our common stock, under our at the market Equity, officially program, which generated 468.8 million in the quarter.

These funds are intended to support Acquisitions such as the announcement, our acquisition, as well as other Targets in our robust, m&a pipeline alongside General, Corporate expenditures and working capital.

We execute 3 in a strong position to execute on both organic and inorganic growth in issues. And further further vertically integrated supply chain expansion, strategic capabilities and grow, addressable marketing consistent with what we have done successfully in the past.

Adjusted deep with the loss for the third quarter of 2025 was 26.3 Million which was below our guidance range of 21 to 23 million dollar loss.

Is driven by higher revenue and improved gross margin. Which was more than offset by increased operating expenses related to Neutron development.

With that, let's turn to our guidance for the fourth quarter of 2025.

We expect revenue in the fourth quarter to range between $170 million and $180 million, representing a 12.8% quarter-over-quarter revenue growth at the midpoint.

We anticipate further Improvement in both gaap and non-gaap gross margins. In the fourth quarter with gap growth margins to range between 37 to 39%.

And non-GAAP gross margin is expected to range between 43% to 45%.

These forecasted gaps and non-graphic metrics are benefited by a higher mix of launch contribution in the quarter, as well as underlying improvements in launch ASPs in greater launch overhead. Absorption is due to higher forecasted launch cases in the quarter.

We expect fourth quarter Gap, operating expenses to range between 122 and 128 million,

And non-GAAP operating expenses are expected to range between $107 million and $103 million.

The quarter over quarter increases are primarily driven by ongoing Neutron development spending related to flight 1 including staff costs prototyping and materials.

However, we expect to see a shift in spending, from R&D to flight to inventory.

Which is an encouraging sign of progress. As we move closer to neutrons first wife,

I'm optimistic with the impressive strides. We've made towards this Milestone. We're approaching Peak, Neutron R&D spending and are on the path towards meaningful. Operating leverage deposit, cash flow in the future.

We expect fourth quarter, gaap and non-gaap managed to income to be 3.5 million, which is a function of higher cash balances as well as the conversion of approximately 192 million of convertible notes since September 30th.

We expect fourth quarter, adjusted, even the loss to range between 23 million and 29 million. And basic weighted average, common shares outstanding to be approximately 571 million shares, which includes convertible preferred shares on a proxy. 46 million.

And reflects the conversion of approximately 37 million shares from convertible notes thus far into 4.

Lastly, consistent with prior quarters, we expect negative $9 million in free cash flow for the fourth quarter to remain at elevated levels, driven by ongoing investments in Neutron development and scaling production.

This excludes any potential off offsetting effects from financing under our ETF facility.

And with that, we'll hand the call over to the operator for questions.

We will now begin the question and answer session.

to ask a question, you may press star then 1 on your touchtone phone,

If you are using a speaker-phone, please pick up your handset before pressing the keys.

if it anytime your question has been addressed and you would like to withdraw your question, please press star then 2

At this time, we will pause momentarily to assemble our roster.

The first question today comes from Ryan Coons with Needham & Co. Please go ahead.

Great. Thank you. Um, really nice to see the, the strong bookings and backlog. Uh, jump there for launch. Uh, really impressive. Um, sounds like a lot of that was International any particular color you can share on, you know. Um, you know, the use cases defense versus government. Anything you can share as far as what's really driving that pickup and and backlog and how you feel about it, you know, going forward over the next few quarters.

Yeah, hi everyone. Thanks very much. Um, yeah, so it's a bit of both so, uh, strong commercial bookings, but also, you know, for the first time we see, um, you know, space agencies um, who are who typically, um,

You know, uh, use use the, you know, go to the first stop is to go and use their own Sovereign capabilities, but, um, you know, electron is really the only only vehicle of its, you know, of its of its of its kind in the operating in the world right now. So, um, you know, it was, it was very, very promising to see space agencies now, um, you know, kind of standardizing on on the the, you know, the electron as a platform.

For sure, that's great. And how you feeling about supply chain relative to to meeting that kind of demand for electron at this point?

I electrons like 90% plus built-in house. So um, uh so you know we don't we don't see too many challenges there. Um, you know, the factory that we built here was ultimately designed to build 52 Rockets a year. Um, and uh so um, you know, I think I think we'll be fine.

That's great. Maybe 1. Last 1 just to wrap up just to clarify what what Adam said about uh launch gross margins, there was a couple of 1-time events there and he called you can share with us on that atom.

And you know, you're going to have customers that have changing priorities, uh, you know, programs get canceled. Uh, fortunately. You know, that we have very strong contract terms, which allow us to, you know, to to make sure that we're protecting the event that people programs get canceled or changed. The priorities um,

You know, I think on the haste, uh, change. That was really kind of, again, a, a pivot on some of the haste missions where the contractual terms are such where it's really more appropriate under ASC 606 to recognize Revenue over time and use EAC accounting to measure in the cost that you're incurring and you recognize revenue and margin accordingly. So we now have a great in that in that business where you have point in time and over time and it really is just a function of contract terms and haste is evolving into an important meaningful part of our business. Uh, a lot of good things come from that the fact that you've got typically higher, uh, asps, uh, you you've got, you know, I would say along with that. Now you've got a little bit more stability, I would say or predictability to the revenue contribution from that. Given the fact that again, some are going to be point in time, but some are going to be over time and that over time allows a little bit. More of a I would say like a little bit more predictability and and uh I think it's it's a healthy place to be.

That's great. Appreciate the questions. Thank you.

The next question.

Andre Shepard with Cantor Fitzgerald, please go ahead.

Hey everyone. Uh, good afternoon and, uh, thanks for taking our questions and, um, Pete. It's really is great to hear all the great progress over the last, uh, few years to see everything, uh, up until this point

Um, 2 quick questions for US, 1 on Space Systems and 1 on launch, uh, business. Um, on the Space Systems, maybe for, um, Adam can you remind us the, uh, Revenue recognition associated with the SDA tranche 2 award? I think, in the past, you had targeted, 40% Revenue, recognition, uh, in 2026. Just wondering if that's on track or, or or on change and then also on the SDA tranche 3 award. Now obviously, the government shutdown has maybe delayed the decision there, slightly, but do we still feel confident in in that award? Uh, and in that decision, you know, if awarded that would be the largest contract, the thing awarded in company history. So, curious on your thoughts there. Thank you.

Yeah, I'll take the first piece of rev rack. I'll give you my thoughts on T3 and I'll hand it back over to P. Um, but on the revre. Yeah, I mean, we're still very much in that path to recognize the revenue over that pattern where it was, you know, kind of think about these these larger Long Live government. Programs is kind of 10% in the in, you know, kind of in the first year after you achieve award and then it's 404010. So okay, think about that.

Has the shape of the curve and sda's. Got a trunch to transport layer shaping up to be similar to that. Um, so yeah, everything is consistent there. And as you know, similar to the other overtime, rev wreck you basically estimate your cost to complete the mission. As you incur costs, uh proportionately, you recognize Revenue at the program margin. Um, and so yeah, this has been this so far. We that that program has been going very well. As Pete mentioned of that, that part of the business is, is performing very, very well. Um, on T3, you know, um, yeah, that would be the largest contract company would have won to date, uh, and you write the timing has been a little bit delayed due to, to the government shutdown. I think we've all seen recently that there's signs that, you know, perhaps we could be coming to an end of that shutdown, which I think would be great to get that. Get that momentum back in the, in the awarding of those types of contracts. But I'll turn over to Pete, in regards to confidence in that. In that, in that win.

Yeah, I think you've said it. Well, I mean, I mean, I, I think, um, you know, we we put ourselves in a really strong position as a prime contractor, uh, on those those Awards, especially with, um, uh, some of our Acquisitions. So, uh, we're feeling good and, um, uh, you know, we just, we just need, um, the government to come back and, uh, and, and, um, you know, finish off that that last little piece. But no, I think I think we're feeling good. Andre.

Wonderful, that that's great to hear and maybe just as a quick follow-up on uh, Neutron um, you know, with the the first launched. Now uh targeted for for early next year, should we still be assuming kind of 3 launches for next year 5 the following year and 7 or or is there perhaps a change to to that Cadence as well? Thank you.

Yeah, the way the way we think about that Cadence is um, is it, is it, you know, the clock starts for the next 1 from the first 1. Um, so uh, depending on the, you know, the first flight um think of it as like a, you know, a 12 month, um, a 12-month kind of rate from there, but um, maybe Adam if you

Yeah, any any any different views?

Wonderful, very helpful and uh, congrats again. I'll pass it on.

The next question comes from Edison you from Deutsche Bank, please go ahead.

Hey, good afternoon want to ask, uh, about the future constellation. I know it's quite a long-term question, but there's been a lot of activity in in some operators around spectrum and I'm, and I'm curious what your thinking about the the value of spectrum in your kind of calculus for any type of future constellation.

Well, I mean, um, that would be making an assumption that you, I guess, you, you were settling on a a comms application, um, as well. But, um, you know, clearly spectrum is an important element. Um, to any kind of scaled, uh, coms business. Although we have been seeing some interesting approaches where that that becomes less. So, um, but uh, I think you're just seeing some kind of natural consolidation. Uh,

In in the industry right now, around some of those um Spectrum assets and that you know I suspect that will that will continue but um you know, look rocket lab's not going to go out and buy billions of dollars worth of spectrum. Uh speculatively that's for sure.

This is Adam. Sorry I got dropped some. Unfortunately, the conference call dropped me. So I don't know if the did I did I answer your question fully Andre on the on the launch? Cadence.

Hey, it's actually Edison on now. Yeah, we did. Okay, thank you.

It's nice to see that you got dropped Adam this time and not me.

For sure. Yep.

So totally separate topic wanted to to ask about. I'm sure everyone has seen, you know, NASA we got, we got Isaac man, you know seemingly back.

Do you see increased opportunities in this type of change over around, whether it's Moon or Mars space? And what do you think those incremental opportunities could potentially come from?

Uh, short answer is yes, I think. Um, if you, if you know, if Jared is cemented as the NASA Administrator, I think if you look at Jared's approach to how he believes NASA should be run, um, and the role that commercial entities like Rocket Lab play, uh, I think that both bode very well for the way that we, um, you know, the way that we operate.

The value that we can bring bring the agency.

So, uh, I would view that as a very positive um uh very positive thing for for Rocket lab.

Great. Thank you.

The next question comes from Gotam Cana with TD Cowen. Please go ahead.

Yeah, thanks. Good afternoon, guys.

Was wondering if, um, you could elaborate on how soon.

After Neutron arrives at the complex, realistically, can it launch? Does it? Is there a minimum?

Interval of time. Uh,

And then, you know what? What sort of explains

That whatever that range might be.

Uh, like a little bit difficult to to answer because the it really depends on what you find. Um, if uh, if we put the vehicle on the pad and and we go through all of its fueling and detangling and um all the operational tests and static hot fires and all of that sort of stuff and it all flies through then it's a fairly straightforward path. Um but um if you if we go there and we we find some stuff that that we don't like then you know, we're going to fix it and I think you know as I tried to explain during the call, there's there's the way that we develop these kinds of things is. Um you know I'm I'm suspicious if everything just flies through because um

Understand how they occurred and then also go 1 step further and feed that back into all of our engineering models. To make sure that you know next time around we're doing a similar thing that the the I guess the um the ability to predict and the you know, the Finesse of that become better and better and better. So um look uh we know we know a lot more than we have a vehicle on the pad. We know even more new hot fire at um, you know, after hot fire. If that's a, a, a successful, um, campaign. We're happy with what we see. Then the turnaround to launch after that point is pretty quick.

Okay. And I was curious; also, maybe I missed it, but the, uh,

The cumulative catch-up adjustment, or the one-time adjustment, how large was it?

Uh, in the quarter.

Sorry, Gotham, what are you talking about? The—are you referring to the...

The the haste, I'm not sure if you can maybe sorry, I got dropped again from the call from that provider, but no, I apologize. I

Yeah, I think you mentioned, um, in in the remarks that there was a well, I know in the queue, it says there's a revenue adjustment of Net, 10 million favorable in the quarter. Wanted to know. I think you described, uh, the ebitda margins were lifted by a contract. Closeout of some sort. I was just curious if you could quantify, how large that was.

Uh yeah. So there there was 1 contract closed up. That was about I think this is a little under 5 million dollars. That was the was the value that we received um, when that cancel, then that cancellation occurred. Um,

And, yeah, then there were some other things moving around with regards to the, well, there was a benefit to the gross margins as well because in Q3 we recognized revenue with higher gross margin associated because when we made the change in Q2, we ended up actually taking a margin hit because we recognized revenue without having associated basically at zero margin. Because at that time, we didn't have the ability to estimate what the costs were going to be to complete the mission as we did this transition. So, the path was essentially revenue in Q2 at no margin. In Q3, we got again the normal amount of revenue from that overtime contract, but that was now at margin, right? So, I think those are really kind of the two priorities going into Q4 given the guidance that we've provided. You know, even with those things not recurring in Q4, you still see our gross margins improving. So, you can just see that, you know, yes, that was kind of a unique dynamic in the transition from Q2 to Q3 but from Q2.

34 without those those unique events. Uh, we still show gross margin strength and growth potential.

Thanks very much, guys. Appreciate it.

The next question comes from Eric Rosen with Stifel. Please go ahead.

Yeah, thanks for taking the questions. Um,

I wanted to just on Neutron. I I totally understand, uh,

Peter in in the team how you guys operate uh you're not looking at an iterative process and having things blow up. Um, so uh, that that's great and that you've always operated that way but I wanted to see though with this latest push out. Um you know, what does that do? From a um a a timing perspective for things like the nssl and some other things that you might have been looking at that that Neutron would obviously be is is geared towards

Ya know. Hey Eric, great question. Uh, so look, the NSSL team, uh, work shoulder-to-shoulder with us. Um, you know, they're on every review, uh, in the program and, you know, um, you know, obviously, I can't speak for them, but I think they take, um, at least the feedback we've had from them as they very much appreciate our approach of both transparency, but also, um, the diligence of the way we build, uh, vehicles. Um, so, uh, you know, the awards are for the, for the, um, uh, the the

Tricks. Um, have not been a made made yet in the sometime away for them to be made. We need to have a a flight under our belt, successful flight under our belt before they'll make those Awards anyway. Um, so you know, largely speaking, it's it's, it's it's pretty irrelevant and, you know, we've been very careful and I think there's been a lot of conversation previously about, um, you know, booking, uh, Neutron and making sure that we can deliver for our customers. Um, so, you know, long, long story short, we're not letting anybody down here, Eric, um, where, um, you know, we'll, we'll, we're, we're, we're in a good spot.

Great. And maybe just my, um,

Um, are you seeing, you know, traction and expanding the footprint in National Security defense? I mean, that was part of the reason, but what are you seeing now that you've closed the deal?

Yeah, it's it's look, it's just, it's not indeed to to, you know, before. So, you know, obviously we had a good relationship with SDA and um, uh, through the intelligence Community obviously for launch and things like that. But I would just say we're in a totally different League now and and working with totally different folks, um, and uh, you know, there's long long relationships that have been built, uh, with the goes team and um, now that they have the support of Rocket lab, um, you know, we're really able to expand and supercharge those and and also um, you know, those relationships expose them to the to the larger offering of of of Rocket lab because it always surprises me. Um, you know, sometimes, you know, people just think we're, uh, just this little launch company, um, and don't have all this other capabilities. So, uh, um, so I know it's it's been, it's been, um, incredibly, uh, incredibly important. And also just now being a payload provider um, is is, uh, you know, it just brings you up.

Up to a whole another level because you, you’re having really detailed mission discussions rather than just talking about how you can provide a bus or a component or something. We, you know, we're really in mission formulation territory.

Great, thanks, and good luck with the neutron development.

Question comes from Michael Lischalk with KeyBanc Capital Markets. Please go ahead.

Hey, good afternoon everyone. Uh I wanted to ask on Archimedes say I know you're constantly testing and and iterating the engine. Uh but how how close are you to having a finalized design that meets all the performance requirements in ready for First Flight? Um, and then secondly, given your production Cadence, I think you previously said a new engine was coming off the line every 11 days or so, um, how quickly can you ramp production of the engine to have 9 in our comedies, for the first stage of of Neutron's debut launch?

Yeah so thanks Michael. The the engine designs are pretty stable at this point. Um and you know we've met all the performance criterias uh what we're doing um is you know obviously with with a scent, um there's 1 set of environments and with dissent, there's an entirely new set of environments. Um, and uh, much more challenging environments because your propellants are warm and and low pressures. And you've had a large mixing and all kinds of stuff. Um, so you know, going through all of those things is, is is

Is being really important and, um, you know, I think the team I got a, you know, check on the exact number. But I mean, the vast vast, majority of all of the components for flight 1 engines are, um, you know, either complete or in some kind of uh, some kind of form of build. So um, you know, we we iterating on the engine for sure. But um, you know, the, the production machine is is stood up and and and ready to support, but um, you know, with with the end with Archimedes, um, we want to make sure we're we, you know, as we are sending um on First Flight like nobody is worried about an engine, um, and it's obviously, it's the most complicated, you know, part of the vehicle. So um, you know, there's there's just no substitute for putting, you know, hours and hours and hours on on test on test articles and hence the reasons why, you know, we have 2 2 cells running. Now, it's Dennis not just the 1 as we think we talked about that last earnings and, uh, it's just, it's just switching between engine and engine and some of the more interesting tests, you know.

I just extra long durations to try and promote some fatigue in the engine, because obviously, we want to reuse this engine over and over again. So just doing really extended burns to try and promote fatigue and items. As you know, some of those kind of things just take time. Like there's just no substitute for just.

just, you know,

Burning.

Okay, great. And then sticking with Neutron um is that original budget for Neutron of 250 to 300 million? Is that still intact given the updating time timing of neutrons first launch. And, you know, you'd said you're near Peak Neutron spending, just any way to frame, you know, how much you've spent so far or what's, what's left to go? Thanks,

Yeah, I I can take a swag at that. So yeah, I mean the program, as Pete mentioned, I mean we've continued to to make a lot of progress, the the 250 million to 300 million dollar, kind of original estimate. I mean, we we kind of that got a little bit. I would say behind us with the, with the kind of with the push, uh, from the launching middle of 25 to the end of 25. And so, now as we get into, kind of an a 2026 scenario,

You know, we're estimating that we will have spent approximately 3060 million dollars exiting in cumulative across R&D and capex through the end of 2025. So, you know, we're above that as Pete mentioned, you know, it's about a 15 million dollar impact on the, on the human capital side of things per quarter. Uh, just by extending obviously prototyping, you're going to spend. We're going to spend, it's really not impacted by the time frame, but when the program kind of delays, you end up uh, obviously incurring a

extension of that.

Staffing related expenses after the program. So right now, again, we're looking at around 3602, uh, so again, as I mentioned, I do think we're approaching Peak. Uh,

Hopefully Q4 is is is the peak and it all depends on kind of when the timing of that first launch occurs.

And of course, the result of that launch as well.

Yep, thank you. I appreciate it.

The next question comes from.

Please go ahead.

Hi Pete. I, Adam, uh, congrats on the strong backlog build here, um, on the Electron launches.

You gave some sense of pricing, but um, any any any.

Hosting on the trend in the size of the number of launches, maybe if not now into 2026, or if you're trying to extend those, or is that fairly stable?

Hey, did you? I don't know if Adam, if you, if you got that one, but I struggled to hear you on that one. Yeah, so you broke up.

Oh, sorry. I'll repeat it. Um, just any observations on the Electron launches, the deals and terms of a number of launches, the length of the launches? Are people trying to extend their visibility in the next few quarters, or is it pretty stable?

You know, I think, um, uh,

We when we talk to customers as you can see in the last quarter, it it's generally not to sort of 1 launch. Um, you know, we see uh folks locking in their their launch um capacity. Uh and and buying lots of launches in 1 1 hit. Um, you know what, we're we're, you know, we, we, we never try and let a a customer down or leave a customer on the pad. So, we, we, we met production with, um, with launch demand, uh, very well but um, you know, and that that isn't been a problem to date but um, no. We we just continue to see

Just growth in in um, in in, in the demand for the product.

Yeah, and I I would I would add to that that suji. So we've seen these larger bulk buys over long periods of time, occur more in the commercial side and as we've talked about in the past, you know, our it's kind of hard to differentiate sometimes commercial versus government because a lot of our commercial customers actually end up fulfilling government demand. So, it's a quasi commercial government but also we, we, you know, we've been growing our haste business pretty significantly over the last couple of years. Um, and those have come, I would say, more like electron originally did were kind of, you know, the onesie 2z kind of size contracts. And I think that's hopefully the next kind of, um,

Shoot a drop for us, is the ability to start lining and start signing larger Pace deals that cover long period of time and a greater number of launches. Because that would give an even more, you know, certainty to the, to the, to the revenue ramp in that part of the business. And I think that's, you know, again, that's something that we're looking forward to. Um, so I think, you know, that would be a very helpful indicator that to the longevity of that, haste business and and the ultimate scaling of it,

Okay. Now, helpful phones are Adam, and my other questions on the M&A environment and with targets: is there a sense, maybe among the targets, that consolidation and being part of larger companies is increasingly important? Maybe more willingness to come to the table? Are you seeing any of that trend now among M&A discussions?

Yeah, I think I think you're seeing it in a few different places, um, both on the larger scale. But also I think we're seeing it also on the on, on some of the smaller scale stuff as well is is, um, uh, I think it's, you know, it's a, it's a difficult environment to scale in. Um, and you know, there hasn't really been uh, too many great companies that other companies want to join. Um, and as I think I mentioned on, on the call where we we've sort of becoming the defacto um go-to guys if you want to, you know, really um scale you you know your products and and um and you know the opportunities that you have in front of you.

Okay, thanks. Thanks. No worries. Thanks, AJ.

The next question comes from Andre Madrid with BTIG. Please go ahead.

Good afternoon. Thanks for the questions.

Um, you know, I think earlier today, it was announced that the S SDA was moving some, uh.

Some funding earmarked for.

Some of their programs related to troop payments, um, this was at more of a D level, but seeing that and then you called it out, you know, decreased cash receipts and the slide deck related to SDA, SAT work, I mean,

If?

Things don't get resolved this evening, which hopefully, they do. I mean, when does the shutdown pose significant risks to your internal, 26 Outlook and Beyond?

What can I do? Yeah, go ahead.

Oh, you go ahead.

No, I was going to say, I think that there's, you know, um,

So far, the government shutdown I wouldn't say has really dramatically affected us. Yes, there have been slightly slower cash receipts, but, for example, we got a very large cash payment on...

Friday um from from SDA. So I would say that, you know, the this this ticket has not been shut off. I think it's just kind of it's just been a little bit slower and flowing. Um so that and to me that's very helpful that even before the the line of sight to the end of the government shutdown. You know we were still getting we received again a very large payment at the end of last week um

So right now, it doesn't really. I, I don't think there's going to be any, obviously, we factored in everything, we believe is to be the most likely case in our Q4 guide that we that we described earlier. So it's hard, you know, no 1's got a crystal ball for kind of what happens, you know, with this when they bring the government back and kind of where they 3 prioritize their dollars. But again, I think we've been very fortunate so far that we've really not felt any significant impact from from the shutdown today.

Got it. Got it. That's helpful. Oh, go ahead. Sorry, I didn't mean to cut you off. Sorry, sorry. Sorry, the only thing I'd add is like the requirement for. What is the SDA is doing is is not diminishing, its expanding. So um, you know it's it's an important um, important program. So as far as like the the need for the program, it's that that's not getting smaller.

Got it, got it. That's fair. Uh, I'll leave it for 1. Thanks, guys.

Thanks, Andre.

The next question comes from Jeff Van Reed.

Uh, great. Thanks for speaking in here. The, um, Andy, on the uh, on the margins of the gross margins for Q4 and the guide. Uh, not, you looks like maybe a couple hundred basis points of sequential improvement. Is that just kind of break it down maybe a little more, which side of the business you're expecting that sequential increase? And then, uh, any sort of even includes us to maybe revisions on what you think target gross margins might be for either of those two segments.

Yeah, so, you know the gross margin trend, you know, in the improvement sequentially Q3 to Q4. Again, this is driven really by a mix, where as we get more scale into our electron business. And we've always talked about Cadence being super important for the margin profile for that business because there's so much fixed cost related to it. So, as you scale Cadence and, you know, Pete kind of mentioned earlier in his comments that we're expecting, um, you know, to hit a new record for launches in the year. So, obviously that's all good for overhead absorption. So think of it as there's a lot of good underlying dynamics going on within the launch business as far as, you know, the size of the backlog, the ASP increasing within that backlog. We're getting greater overhead absorption benefits. So that's really kind of what's driving the strength in the launch business and as it becomes a bigger piece of the mix in Q4, that's really the biggest factor.

Um and I would say that within our our our Space Systems business, the trend of of of margins actually between quite solid in that as well. You know, we've talked in Prior calls about how we've made very, very significant improvements in our gross margins from our, our solero solar business. Um, you know, we've kind of talked about a long-term Target there of, you know, we get to 30 points of gross margin. That was kind of a aspirational Target and I think we're very comfortable that we're, you know, we're very close to that I think. We think about revisiting that 1 upwards, I think. Um, but overall, you know, we, we say, we still believe that we that our launch business on electron first, you know, has the potential to be a 45 to 50 point. Uh,

Non-GAAP first margin business. We think long-term Neutron has the ability to be at least as good as that, helped by the reusability nature of that vehicle.

And then on the space system side, you know, it's really ...

Margin and I think overall that kind of brings the gross margin profile so that's subsystems business around. Call it the load and mid 40s uh the satellite manufacturing business because of the nature of those programs. You know we're able to take what for many people is either High single digit or low, double digit, gross margins. And have those more in the call it, the, I'd say 25 to 35 points, depending on the programs, um, because of the level of vertical integration that we bring because those same components that we sell into the merchants Market are very high margins. We basically also designed into our platforms. So I think longer term, I think we still see. Can again a gross margin business for launch? That is in the colleague, if you want to call them the 50% range and for Space Systems, you know, probably in the, I'd say the, the, the 40, maybe low, 40% gross margin range. So it puts us in a nice spot overall. But I think it's, it's also also helpful to note that, you know, in Space Systems it's it's not as R&D intensive as the launch businesses when you're getting a new

Vehicle established. So, the operating margins or contribution margins. For this basis is businesses, even the ones that aren't kind of in those high. Gross, margin, ranges is still quite healthy, um, and then, I think I'm again, I think the margins for, uh, for for launch speed for themselves.

Got it, got it. Very helpful. Um, last one then on space systems. Can you talk about the pipeline? Obviously, Tranche 2 and Tranche 3 are big needle movers, but what's the next layer beneath that look like? Like how many, you know, eight-figure, nine-figure deals? Just some semblance of what the distribution of deal sizes that are later stage in the pipeline looks like would be helpful. Thanks.

Yeah. So there's um, you know, we we always chasing a variety of stuff. So I think, um, the, you know, the the intelligence Community, um, and the, the the dod uh, is is obviously big opportunities for us. Um, and you know, things like goes really provide us new new kind of excess and, and, um, visibility to some things that that aren't very visible at all. So, on that, that side of the equation, I think. Um, there's there's big there's really good opportunities for us there. But I would say, also, like, if, if we think about the, you know, the bids that we've got in play, um, uh, there's also some extremely, um, meaty commercial bids as well. So, um, I would say it's fairly well distributed across. The opportunity is fairly well distributed across both commercial, um, and, uh, and and defense, but

You know, there's always the big meaty programs, but I mean, um, you know, all of the business units, we kind of run the business units like little startup companies as well. And um, you know, they're expected to to grow really healthy, uh, every year and, you know, you see new products coming on all the time because, you know, as they as they, um, you know, reach the saturation, with their, with their customers. They these business units have to develop new products to continue continue that growth. So, you know, this year alone, I think it's been a really, really great year. There's, you know, we set we set goals for those units. And then, then there's kind of the Pete, stretch goal. And, um, you know, they've all all met or exceeded the, the the, you know, the Pete stretch goals as this year. So, um,

You know, it's not, it's not just about, I guess what I'm saying. It's not just about these big, big projects. Um, you know, they're obviously important needle-movers, but, you know, just the underlying business and just continuing to drive that growth in all the business units in the underlying business is equally as important.

Got it. Got it. Congrats on the great performance. Thanks.

The next question comes from Anthony Valentini with Goldman Sachs. Please go ahead.

Hey guys, thanks for getting me on. Um, just a quick clarification. Question on the backlog and Neutron. Is there anything in the backlog today for Neutron, or is it zero?

Yeah, Anthony. We do have. Uh, we have a, a, we have launches and backlog for Neutron. Um, there are, there are 2 uh, 2 fully priced, uh, missions in the backlog right now for Neutron. There's a third contracted Mission which is right now anticipate to be a ride share. Um, and we don't have that in backlog because we don't, we don't do that until we've actually added the payloads into into the Manifest. And again, we've got a primary customer but not, uh, on that third C. On that third launch, we've not put a in the back on yet.

Okay, that's helpful. And is there a way to Think Through um you know how that backlog for Neutron specifically ramps up? Like does that happen once you guys do that first R&D launch or is it a certain number of successful launches um just historically and like what you guys know about the industry? Like how how does that start to flow through?

You know, people when they're looking to buy neutrons, aren't typically looking for 1, they're looking for, for, for many. So, um, you know, they're, you know, a number of customers are looking to see that the vehicle does work and it scales. So, um, and you know, we work very closely with those customers, uh, as as we go along and these are both commercial and government customers. So, you know, I think, um, the, the unlock the unlocking point is, is certainly, um, you know, a successful flight, um, in in a number of these contracts. Um, but uh, but but also, um, you know, that that, that, that that

You know, we we we want to make sure we don't let customers down. And the last thing we want to do and we've talked about this previously is is, you know, uh, customers will be happy to to book a bunch of neutral on it, like half price. Um and we're just not going to do that.

Right? Okay, that makes a ton of sense and then last 1 for you Peter. Um as I'm thinking through the opportunity side on the on the tranche 3 transport layer and just looking back at, you know, the previous tranches. Um you know there's competition from the defense primes and some of these new space tech companies including yourself. I'm curious how you think through um the differentiators for Rocket lab. Um, and when you guys are presenting to, you know, the customer. Um what you think really separates you from uh, from the rest of the group.

Yeah, so I think, I think 1 of the 1 of the big uh, separators and 1 of the reasons why we, you know, we we won a prime spot on our first SDA contract is that, you know, we're so vertically integrated that, um, if we look across all of these programs, they're they're typically plagued by delays. Um, you know, not so much cost overruns because, you know, it's a firm fixed price, but certainly delays. And, um, you know, when you, uh, when you control so much of your own supply chain, um, then, uh, you know, if if there's a delay in the component, you get to choose what resources you, you you swell or push around to solve that problem.

So I think that that's a, that's a big element is is just schedule certainty. Um, obviously Adam talked about, um, some of the margin and margin stacking, so prices is a big element as well, but at the end of the day, all the stuff's got to work and um, this is where, you know, your reputation in this industry is just so critical and why we just never ever deviate from putting ourselves in a position where that can get compromised

Um, you know, when people buy a piece of Rocket Lab hardware, you know, firstly it turns up and it looks great and it works. Um, and, uh, you know, in an industry where that, that, um,

You know, that that seems to be challenging. Um, I think you know that that's an important element. And also finally, um, you know, there's there's there's, there's a set of requirements and then there's how you go about solving those set of requirements like uh, you know, with the technologies that you can bring to bear and we just have such a war chest of technologies that we can bring to bear to provide you know, solutions to meet everybody's requirements. And then some that I think uh you know it it puts us in a really strong position.

Great. Thank you so much for the, uh, the thoughtful response.

No worries.

The next question comes from Christine Luwag with Morgan Stanley. Please go ahead.

Okay, good evening everyone. Um you know Peter Adam you know from your commentary uh from our previous question and it sounds like you're not going to go out there and go buy a spectrum. It's the first question is that a fair um assessment of your statement earlier? And also a second to that, you know, with over a billion dollars in liquidity and you know, with the broader and deeper

Uh, capability set and the Space Systems. Oh, what's your priority for M&A?

Yeah, so we look at a number of things, Christine. So, um, you know, uh, I would say that there's always opportunities for tuck-in, and you've seen that, um, with things like minor where, um, you know, that gives us a capability that we didn't have. So, we'll always do those. But I think, um, the GS acquisition is a really good example of,

About, um, you know, acquiring a company that just brings us into a totally different, uh, customer set and a totally different capability and also puts us at a, you know, at a totally different level. Um, you know, if you think of the big traditional primes, the 1 thing that sets them apart from lots of little space companies is they own the payload? Um, so, you know, we'll continue to, um, to to look at for opportunities there where we can own the payload and, um, and, you know, really, really Drive, uh, drive drive the missions. And look, we're always looking at big needle moving stuff as well. Um, and, um, you know, we're, we're always look for for things that we think are, you know, have a, have a, have a step change in either the scale or or, you know, other elements of the company. So, um, you know, that that's the way we we we look about, you know, this is a way we think about it.

To see what SpaceX is doing and in terms of their path towards that end-to-end, you know, space and refunds. So when you look at your portfolio today, I mean, it looks like you're you're kind of marketing in a similar Direction with your flat light, uh, product sets too. And now you've got, you know, these additional payloads. Um, where do you see your your role in terms of that industry, you know, do you at some point want to own your own constellation and be able to sell more of that as a service? Um how do we think about where you are in this journey? And you know, what does the answer look like

Yeah, we we've just sort of quietly and methodically going about um, making sure we amass. All of the, the kind of the Strategic elements, we need to ultimately deploy things at scale. So, um, Neutron is is really important element of that. Um, if you look at, uh, look at others, um, uh, you know, um, access to space and low cost rapid and reliable access to space is kind of the place you start and neutron gives us that multi-time capability and then um, you know, if you, as you point out, you look at the Space Systems, uh, growth then really at this stage, I don't think there's any satellite, we can't go and build. Um, I mean, we've got 2 going to Mars here shortly. So if you, you know, want to talk about complexity of spacecraft,

So, uh, so I think from an engineering perspective and a component perspective. All all of those, all of those kind of bases are loaded. Um, and you know, when we will be very strategic about how we think about the next step which uh, which, you know, would would be building our own constellation and whether we're providing services or infrastructure, I think is yet to be determined

Great, thank you very much.

The next question comes from Peter. Armen with beard. Please go ahead.

Yeah. Hey thanks. Um, uh, nice results. Um, Pete and Adam. Um, just a quick 1, I guess. Uh, on on, on electron, more of the demand environment. Um, I think you've previously talked about, uh, the demand for around 30 electron flights a year. I was wondering if that's still kind of holds just given the uplift that we've seen tied to kind of all the National Security launches and kind of what's going to be expected with golden dome and additional testing. If if there's upward bias to that and see certainly seems like it thanks.

Yeah. Hey Peter. I mean uh look um I think I think that's fair um, if if uh, depending on how quickly and and at what scale gold and Dome grows to, I think we're in a very strong position, um, to provide critical Services there and um, you know, we see nothing but upward trajectory in both government taste and Commercial launches for that product.

Appreciate that, and just a quick follow-up. Um, thanks for the comments on the Archimedes, you know, the, the testing that you've been doing is, could you give us a little context is, is that much different in terms of the rate that you did originally with the rutherfords around electron, thanks.

Yeah, it is it it is at a much much higher intensity, and and rate, um, because for the raford we only had to do half the job, meaning that we only had to go up, um, for our committees, we have to go up and down, so it's like twice, the amount of of environments twice the amount of run box, um, and twice the amount of qualification.

I appreciate the call. Thanks, guys.

Includes our question and answer session. I would like to turn the conference back over to Peter Beck for any closing remarks.

Great. Thanks. Very much and thanks for the thoughtful questions. Um, so, uh, before we close out today, I would like to share that Moko, um, is finishing up this time on the rocket lab board of directors, uh, Matt's tenure as a member of the board, uh, will end November 30th. Um, Matt is a co-founder and managing partner at a deep Tech Venture Capital firm dcvc and was run a rocket Labs earliest investors, um, serving as a member of the board since August 2021. Um, and as a member of the Legacy rocket lab board, uh, since uh, January 2017. Um, so uh, you know, since since then we've been incredibly grateful for his leadership,

And his guidance um as we grew rocket lab together from a small startup to a publicly listed company. Uh now the the world uh 1 of the world's leading Global space firms. And uh look I just personally also want to thank Matt for for backing us from the beginning and uh wish him all the best. And it's continued to work in in deep Tech has a trans uh transitions out uh a rocket lab.

Otherwise, uh, here are some upcoming events and conferences that the team will be attending. Um, we look forward to sharing more exciting news and updates with you there. And, uh, thanks for joining us. Um, that wraps up today's call, and we look forward to speaking with you again soon and, uh, sharing some more progress at Rocket Lab.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.