New Zealand space company Rocket Lab is emerging as a serious contender in the satellite launch space, pitting it against Elon Musk’s SpaceX, and is making steady progress at a time when almost every other rocket startup is struggling with technical and financial challenges.
Rocket Lab yesterday (August 8) reported $62 million in revenue for the quarter ending in June, up 12 percent from a year ago. Though the company has yet to turn a profit—quarterly net loss came at $45.9 million, or $0.10 per share, up from last year’s $0.08 per share—its orbital launch and satellite manufacturing businesses are booming.
During the April-June quarter, the company’s launch business brought in $22.5 million in revenue from three missions, and its space systems unit, which produces satellites and spacecraft components, generated $39.6 million in sales. For the third quarter, Rocket Lab expects revenue to grow by double-digits to between $73 million and $77 million.
“Rocket Lab’s revenue and cash positions are trending in the right direction. I’m less concerned with quarter-to-quarter performance,” Justus Parmar, CEO of Fortuna Investments, a venture capital firm investing in renewable energy and space startups, told Observer.
Rocket Lab shares jumped 5 percent in yesterday’s after-hours trading. The company is valued at $3.2 billion and operates a small, reusable rocket called Electron that launches satellites into Earth orbit. The company charges $7.5 million per Electron launch, which is significantly cheaper than heavy-lift rockets such as SpaceX’s Falcon 9 ($67 million per launch). In the second quarter, Rocket Lab signed 10 Electron launch contracts that will keep it busy through 2024, the company said.
Rocket Lab CEO Peter Beck has said in the past his company serves a different market than SpaceX due to the size difference of their launch vehicles. However, their markets might converge at some point, as SpaceX now offers ride-share services (that allow satellite operators to buy a portion of space on a Falcon 9 instead of the entire launch) and Rocket Lab develops larger vehicles.
Rocket Lab has been working on a mid-size reusable rocket called Neutron. Beck said on yesterday’s earnings call that the company recently passed “significant milestones” on the Neutron project and expects to begin building a launch site for Neutron rockets in Virginia this quarter.
Elsewhere in the commercial space industry, progress has stalled. Jeff Bezos’s Blue Origin is struggling to get its Falcon 9 rival, New Glenn, off the ground. (Its suborbital space tourism program has also paused since an uncrewed mission failed in September 2022.) Astra Space, which is developing a small rocket, said last week it has to lay off 25 percent of staff amid a cash crunch. Virgin Orbit, a satellite launch startup owned by Richard Branson, went bankrupt in May and eventually sold its satellite facility in Long Beach, California to Rocket Lab for $16 million.
SpaceX currently owns about two-thirds of the U.S. launch market and has no clear competitors. The nascent commercial space industry has ample room for new players, investors believe.
“There is insatiable demand for getting things into space. The problem is there are not enough carriers that can execute these missions,” said Fortuna Investments’s Parmar. “Rocket Lab has done a tremendous job getting where it is today. The question is whether it can continue to grow and maybe claim 20 percent of the global launch market someday.”
