It was a busy first half of the year for U.S.-New Zealand company Rocket Lab, which posted earnings for the first six months of 2021 on Wednesday -- the first such reporting since the company went public last month.
Rocket Lab reported revenues of $29.5 million for the six-month period. Its order backlog also grew to $141.4 million as of June 30, up 136% from $59.9 million compared to the same period last year.
While the general trend seems to be positive, executives emphasized the continued impact of COVID-19 restrictions in New Zealand, the site of one of the company’s key launch facilities. CFO Adam Spice said the third quarter has already been impacted by the pandemic, after New Zealand introduced strict lockdown restrictions in response to an 855-person outbreak of the Delta variant. Those restrictions resulted in “no further launch activity planned” for the quarter, Spice said, and will likely result in a $10-15 million impact on revenues for the year.
Despite these setbacks, executives said they anticipated a yearly revenue of $50-54 million. GAAP operating expenses, meanwhile, hit $29.3 million for the six-month period, up from $11.9 million for the first half of last year. The majority of that increase was from R&D spending, including the development of an automated flight termination system and the Neutron launch vehicle, Spice added.
Rocket Lab, which started as a launch company, has significantly branched out since its founding in 2006. The company now fashions itself as an end-to-end space company, providing launch services, as well as the design, manufacturing and operation of spacecraft.
It is this latter business area that Rocket Lab has aggressively grown over the past 18 months; some recent milestones include an agreement to develop three of Rocket Lab's Photon spacecraft for space manufacturing company Varda Space Industries and plans to send two Photons to Mars on an upcoming space mission. The growth of its space systems division reflects these developments; for the six-month period, space systems made up a $5.4 million share of revenue, up from just $300,000 in the same quarter last year.
Rocket Lab also said it would start manufacturing satellite components at scale by the end of this year, starting with reaction wheels, a critical attitude and stability control system. Rocket Lab will be opening a new facility that will be capable of producing up to 2,000 reaction wheels annually, a massive increase in volumes compared to what’s ever been available to the space industry before.
“Satellite components typically have been produced in small numbers which has really limited the speed and scale of constellation development,” CEO Peter Beck said during an investor call Wednesday. “The [reaction wheel production] line has been built to solve that, enabling production at scale to meet the growing needs of customers in the industry at large.”
Rocket Lab’s space systems division was given a huge boost by the acquisition of major satellite hardware manufacturer Sinclair Interplanetary last year, and it likely won’t be the company’s last purchase. Rocket Lab has around a half dozen deals it’s actively investigating, Spice told investors Wednesday. “The Sinclair acquisition has really emboldened us to lean forward and look at opportunities.”
“What's interesting about this market right now is it does really feel like it's ripe for consolidation,” he said. “Not consolidation in the sense of large companies necessarily getting together but the fact [that] the invest-ability of space is a relatively new phenomenon,” he said.
Company executives stayed largely mum on the Neutron rocket, with Beck simply noting that it “continues to develop really well” and that the company will provide a more detailed development in the coming months.
“Neutron is a vehicle that is not an increment on Electron,” he said. “It is something that really sets a new standard within the space industry.”
Rocket Lab also announced today that it has inked a multi-launch contract with Kinéis, a French connectivity provider for Internet of Things devices, to deploy its satellite constellation across five Electron missions. Kinéis’ investors include the French space agency Centre National d’Études Spatiales and French space company Collecte Localisation Satellites.
The constellation will consist of 25 satellites in total, adding to the over 100 satellites Rocket Lab has launched on its Electron rocket to date. The launches are scheduled for the second quarter 2023.
— Rocket Lab (@RocketLab) September 8, 2021
This is just the latest multi-launch deal Rocket Lab has inked in recent months, including a contract with satellite analytics company BlackSky for five launches.
Rocket Lab has continued to rise, closing Wednesday at $15.09. That represents a nearly 50% increase since the company’s public debut at the end of August.