Rocket Lab USA, Inc. (Nasdaq: RKLB) (“Rocket Lab” or “the
Company”), a global leader in launch services and space systems,
today shared the financial results for fiscal third quarter, ended
September 30, 2023.
Rocket Lab founder and CEO, Peter Beck, said: “Rocket Lab’s
third quarter began strongly with two successful Electron missions
that accelerated our recovery program to make Electron the world’s
first reusable small orbital rocket. Following the subsequent
September 19th anomaly, we’ve been laser-focused this quarter on
the return to service of Electron. The cause of the anomaly is a
highly complex set of conditions that are extremely difficult to
replicate in testing. However, we believe the findings of the
Rocket Lab investigation team overwhelmingly indicate that an
electrical arc occurred within the power supply system that
provides high voltage to the Rutherford engine’s motor controllers,
shorting the battery packs which provide power to the launch
vehicle’s upper stage. With growing confidence in our determination
of the anomaly’s probable root cause and corrective measures in
place, we expect to formally close our investigation in the coming
weeks. Electron’s return to flight is scheduled during a launch
window that opens from November 28, 2023, and extends into
December.
“Over the same period, we’ve progressed the development of
Neutron with numerous achievements including a milestone stage two
tank test, the crucial validation of methane and LOX combustion in
Archimedes igniter testing, and infrastructure scaling for Neutron
launch development and engine testing across Virginia, California,
and Mississippi. We’ve also secured seven HASTE hypersonic missions
with prime defense customers in the past six months, demonstrating
the success of our market approach for hypersonic test development
for the nation. In Space Systems, the production of spacecraft in
our largest program, the $143m Globalstar contract with MDA, has
continued on schedule ahead of the first spacecraft delivery in Q1
2024. We also continue to ramp on a new spacecraft contract for a
confidential customer this current quarter, as Rocket Lab
demonstrates its ability to win and execute critical satellite
manufacturing contracts.”
Third Quarter 2023 Business Highlights:
- Launched two successful Electron missions in the third quarter.
The missions were back-to-back recovery launches as part of Rocket
Lab’s program to make Electron the world’s first reusable small
orbital rocket. The first mission of the quarter deployed seven
satellites for customers NASA, SFL, and Spire, before completing a
successful ocean splashdown and recovery of Electron’s first stage.
The second mission of the quarter deployed a satellite for Capella
Space and achieved several milestones for Rocket Lab’s reusability
program, including both another ocean splashdown of the first stage
and a successful flight of the previously-flown Rutherford engine
for the first time.
- Confirmed authorization from the Federal Aviation
Administration (FAA) to resume Electron launches from Launch
Complex 1 following an in-flight anomaly on September 19th during
the Company’s 41st Electron launch.
- Announced that Electron will return to the pad at Launch
Complex 1 for a dedicated commercial mission for Japan-based Earth
imaging customer iQPS during a launch window which opens on
November 28, 2023, and extends into December.
- Continued strong growth in Electron bookings for 2024, with the
Company’s launch manifest fully allocated for 2024 and into early
2025.
Business Highlights Since September 30, 2023:
- Acquired assets and production resources in Warkworth, New
Zealand, enabling further vertical integration of critical
composites production and design capabilities for both Electron and
Neutron rockets. More than 50 staff and accompanying advanced
manufacturing assets were retained with the acquisition.
- Officially opened the Company’s Engine Development Center in
Long Beach, California that will support the high-rate production
of the Electron launch vehicle’s Rutherford engine, as well as the
development and production of the Neutron launch vehicle’s
Archimedes engine.
- Numerous milestone achievements in the Neutron program,
including the conclusion of a crucial cryogenic test campaign for
the Neutron second stage; completed production of full-scale
Archimedes engine structures and components for upcoming
development tests; and significant site improvements at both Launch
Complex 3 at Wallops Island, Virginia and Archimedes Engine Test
Stand in Stennis, Mississippi ahead of Archimedes engine testing
and qualification phase.
- Continued strong growth in HASTE bookings for hypersonic test
launches from Rocket Lab Launch Complex 2 in Virginia.
Newly-announced HASTE mission for the Defense Innovation Unit (DIU)
to deploy a scramjet-powered suborbital payload by Australian
company Hypersonix is the seventh launch contract Rocket Lab has
secured with prime hypersonic defense customers in the past six
months.
- Secured a new Space Systems contract that includes spacecraft
build with key components supplied by Rocket Lab; two significant
milestones invoiced as part of the $143m contract with MDA for
Globalstar; and Rocket Lab satellite components put into operations
in the groundbreaking deep-space NASA Psyche mission deployed on
October 13, 2023.
Fourth Quarter 2023 Guidance
For the Fourth quarter of 2023, Rocket Lab expects:
- Revenue between $65 million and $69 million.
- Space Systems revenue between $48.5 million to $52.5
million.
- Launch Services revenue of approximately $16.5 million.
- GAAP Gross Margins between 24% to 26%.
- Non-GAAP Gross Margins between 30% to 32%.
- GAAP Operating Expenses between $61 million to $63
million.
- Non-GAAP Operating Expenses between $50 million to $52
million.
- Expected Interest Expense (Income), net $2 million.
- Adjusted EBITDA loss of $23 million to $27 million.
- Basic Shares Outstanding of 487 million.
For the First quarter 2024, Rocket Lab expects:
- Revenue between $95 million and $105 million.
- Space Systems revenue between $65 million to $68 million.
- Launch Services revenue between $30 million to $37
million.
See “Use of Non-GAAP Financial Measures” below for an
explanation of our use of Non-GAAP financial measures, and
the reconciliation of historical Non-GAAP measures to the
comparable GAAP measures in the tables attached to this press
release. We have not provided a reconciliation for the
forward-looking Non-GAAP Gross Margin, Non-GAAP Operating Expenses
or Adjusted EBITDA expectations for Q4 2023 described above
because, without unreasonable efforts, we are unable to predict
with reasonable certainty the amount and timing of adjustments that
are used to calculate these non-GAAP financial measures,
particularly related to stock-based compensation and its related
tax effects. Stock-based compensation is currently expected to
range from $11 million to $12 million in Q4 2023.
Conference Call Information
Rocket Lab will host a conference call for investors at 2 p.m.
PT (5 p.m. ET) today to discuss these business highlights and
financial results for our third quarter, to provide our outlook for
the fourth quarter, and other updates.
The live webcast and a replay of the webcast will be available
on Rocket Lab’s Investor Relations website:
https://investors.rocketlabusa.com/events-and-presentations/events
About Rocket Lab
Founded in 2006, Rocket Lab is an end-to-end space company with
an established track record of mission success. We deliver reliable
launch services, satellite manufacture, spacecraft components, and
on-orbit management solutions that make it faster, easier and more
affordable to access space. Headquartered in Long Beach,
California, Rocket Lab designs and manufactures the Electron small
orbital launch vehicle and the Photon satellite platform and is
developing the Neutron launch vehicle for large spacecraft and
constellation deployment. From its first orbital launch in January
2018 to date, Rocket Lab’s Electron launch vehicle has become the
second most frequently launched U.S. rocket annually and has
delivered 171 satellites to orbit for private and public sector
organizations, enabling operations in national security, scientific
research, space debris mitigation, Earth observation, climate
monitoring, and communications. Rocket Lab’s Photon spacecraft
platform has been selected to support NASA missions to the Moon and
Mars, as well as the first private commercial mission to Venus.
Rocket Lab has three launch pads at two launch sites, including two
launch pads at a private orbital launch site located in New Zealand
and a third launch site in Virginia, USA. To learn more, visit
www.rocketlabusa.com.
+ FORWARD LOOKING STATEMENTS
This press release may contain certain “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements, other than statements of historical facts,
contained in this press release, including statements regarding our
expectations of financial results for the fourth quarter of 2023
and first quarter of 2024, strategy, future operations, future
financial position, projected costs, prospects, plans and
objectives of management, are forward-looking statements. Words
such as, but not limited to, “anticipate,” “aim,” “believe,”
“contemplate,” “continue,” “could,” “design,” “estimate,” “expect,”
“intend,” “may,” “might,” “plan,” “possible,” “potential,”
“predict,” “project,” “seek,” “should,” “suggest,” “strategy,”
“target,” “will,” “would,” and similar expressions or phrases, or
the negative of those expressions or phrases, are intended to
identify forward-looking statements, although not all
forward-looking statements contain these identifying words. These
forward-looking statements are based on Rocket Lab’s current
expectations and beliefs concerning future developments and their
potential effects. These forward-looking statements involve a
number of risks, uncertainties (many of which are beyond Rocket
Lab’s control), or other assumptions that may cause actual results
or performance to be materially different from those expressed or
implied by these forward-looking statements. Many factors could
cause actual future events to differ materially from the
forward-looking statements in this release, including risks related
to delays and disruptions in expansion efforts; delays in the
development of our Neutron rocket; our dependence on a limited
number of customers; the harsh and unpredictable environment of
space in which our products operate which could adversely affect
our launch vehicle and spacecraft; increased competition in our
industry due in part to rapid technological development;
technological change in our industry which we may not be able to
keep up with or which may render our services uncompetitive;
average selling price trends; general economic uncertainty and
turbulence which could impact our customers’ ability to pay what we
are owed; failure of our launch vehicles, spacecraft and components
to operate as intended either due to our error in design in
production or through no fault of our own; launch schedule
disruptions; supply chain disruptions, product delays or failures;
design and engineering flaws; launch failures; natural disasters
and epidemics or pandemics; any inability to effectively integrate
recently acquired assets; a US government shutdown or delays in
government funding; changes in governmental regulations including
with respect to trade and export restrictions, or in the status of
our regulatory approvals or applications; or other events that
force us to cancel or reschedule launches, including customer
contractual rescheduling and termination rights; risks that
acquisitions may not be completed on the anticipated time frame or
at all or do not achieve the anticipated benefits and results; and
the other risks detailed from time to time in Rocket Lab’s filings
with the Securities and Exchange Commission (the “SEC”), including
under the heading “Risk Factors” in Rocket Lab’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2022, which was
filed with the SEC on March 7, 2023, and elsewhere. There can be no
assurance that the future developments affecting Rocket Lab will be
those that we have anticipated. Except as required by law, Rocket
Lab is not undertaking any obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise.
Notes to Editor: All dollar amounts in this press release
are expressed in U.S. dollars, unless otherwise stated.
+ USE OF NON-GAAP FINANCIAL MEASURES
We supplement the reporting of our financial information
determined under Generally Accepted Accounting Principles in the
United States of America (“GAAP”) with certain non-GAAP financial
information. The non-GAAP financial information presented excludes
certain significant items that may not be indicative of, or are
unrelated to, results from our ongoing business operations. We
believe that these non-GAAP measures provide investors with
additional insight into the company's ongoing business performance.
These non-GAAP measures should not be considered in isolation or as
a substitute for the related GAAP measures, and other companies may
define such measures differently. We encourage investors to review
our financial statements and publicly-filed reports in their
entirety and not to rely on any single financial measure.
Reconciliation of the non-GAAP financial information to the
corresponding GAAP measures for the historical periods disclosed
are included at the end of the tables in this press release. We
have not provided a reconciliation for forward-looking non-GAAP
financial measures because, without unreasonable efforts, we are
unable to predict with reasonable certainty the amount and timing
of adjustments that are used to calculate these non-GAAP financial
measures, particularly related to stock-based compensation and its
related tax effects. The following definitions are provided:
+ ADJUSTED EDITDA
EBITDA is defined as earnings before interest, taxes,
depreciation and amortization. Adjusted EBITDA further excludes
items of income or loss that we characterize as unrepresentative of
our ongoing operations. Such items are excluded from net income or
loss to determine Adjusted EBITDA. Management believes this measure
provides investors meaningful insight into results from ongoing
operations.
+ OTHER NON-GAAP FINANCIAL MEASURES
Non-GAAP gross profit, research and development, net, selling,
general and administrative, operating expenses, operating loss and
total other income (expense), net, further excludes items of income
or loss that we characterize as unrepresentative of our ongoing
operations. Such items are excluded from the applicable GAAP
financial measure. Management believes these non-GAAP measures
provide investors meaningful insight into results from ongoing
operations.
ROCKET LAB U.S.A., INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2023 AND 2022
(unaudited; in thousands,
except share and per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Revenues
$
67,661
$
63,057
$
184,601
$
159,234
Cost of revenues
52,694
54,590
148,684
142,074
Gross profit
14,967
8,467
35,917
17,160
Operating expenses:
Research and development, net
26,626
17,508
81,566
50,150
Selling, general and administrative
27,200
22,961
84,386
64,991
Total operating expenses
53,826
40,469
165,952
115,141
Operating loss
(38,859
)
(32,002
)
(130,035
)
(97,981
)
Other income (expense):
Interest income (expense), net
(1,413
)
(1,486
)
(2,843
)
(6,907
)
Loss on foreign exchange
(120
)
(51
)
(76
)
(3,947
)
Change in fair value of liability
classified warrants
—
—
—
13,482
Other income, net
1,176
622
3,519
625
Total other (expense) income, net
(357
)
(915
)
600
3,253
Loss before income taxes
(39,216
)
(32,917
)
(129,435
)
(94,728
)
Provision for income taxes
(1,352
)
(1,693
)
(2,639
)
(4,008
)
Net loss
$
(40,568
)
$
(34,610
)
$
(132,074
)
$
(98,736
)
Net loss per share attributable to Rocket
Lab USA, Inc.:
Basic and diluted
$
(0.08
)
$
(0.07
)
$
(0.28
)
$
(0.21
)
Weighted-average common shares
outstanding:
Basic and diluted
484,034,071
469,768,797
480,018,578
463,709,955
ROCKET LAB U.S.A., INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
AS OF SEPTEMBER 30, 2023 AND
DECEMBER 31, 2022
(unaudited; in thousands,
except share and per share values)
September 30, 2023
(unaudited)
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
140,904
$
242,515
Marketable securities, current
147,513
229,276
Accounts receivable, net
22,787
36,572
Contract assets
13,042
9,451
Inventories
102,394
92,279
Prepaids and other current assets
68,341
52,201
Assets held for sale
11,259
—
Total current assets
506,240
662,294
Non-current assets:
Property, plant and equipment, net
135,988
101,514
Intangible assets, net
70,404
79,692
Goodwill
71,020
71,020
Right-of-use assets - operating leases
44,900
35,239
Right-of-use assets - finance leases
15,145
15,614
Marketable securities, non-current
81,951
9,193
Restricted cash
3,588
3,356
Deferred income tax assets, net
3,282
3,898
Other non-current assets
17,975
7,303
Total assets
$
950,493
$
989,123
Liabilities and Stockholders’
Equity
Current liabilities:
Trade payables
$
24,980
$
12,084
Accrued expenses
5,998
8,723
Employee benefits payable
14,979
8,634
Contract liabilities
133,793
108,344
Current installments of long-term
borrowings
105,116
2,906
Other current liabilities
18,885
22,249
Total current liabilities
303,751
162,940
Non-current liabilities:
Long-term borrowings, excluding current
installments
—
100,043
Non-current operating lease
liabilities
41,695
34,266
Non-current finance lease liabilities
15,299
15,568
Deferred tax liabilities
308
95
Other non-current liabilities
3,638
3,005
Total liabilities
364,691
315,917
COMMITMENTS AND CONTINGENCIES
Stockholders’ equity:
Common stock, $0.0001 par value;
authorized shares: 2,500,000,000; issued and outstanding shares:
485,857,768 and 475,356,517 at September 30, 2023 and December 31,
2022, respectively
49
48
Additional paid-in capital
1,161,165
1,112,977
Accumulated deficit
(573,029
)
(440,955
)
Accumulated other comprehensive (loss)
income
(2,383
)
1,136
Total stockholders’ equity
585,802
673,206
Total liabilities and stockholders’
equity
$
950,493
$
989,123
ROCKET LAB U.S.A., INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2023 AND 2022
(unaudited; in
thousands)
For the Nine Months Ended
September 30,
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss
$
(132,074
)
$
(98,736
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
21,577
21,590
Stock-based compensation expense
43,398
43,312
Loss on disposal of assets
240
32
Amortization of debt issuance costs and
discount
2,166
2,107
Noncash lease expense
4,062
2,312
Noncash income associated with
liability-classified warrants
—
(13,482
)
Change in the fair value of contingent
consideration
1,138
200
Accretion of marketable securities
purchased at a discount
(3,399
)
(421
)
Deferred income taxes
644
1,167
Changes in operating assets and
liabilities:
Accounts receivable, net
13,798
(30,752
)
Contract assets
(3,592
)
(6,960
)
Inventories
(10,933
)
(17,635
)
Prepaids and other current assets
(15,819
)
(17,173
)
Other non-current assets
(10,712
)
3,281
Trade payables
12,026
(1,625
)
Accrued expenses
(2,187
)
(3,530
)
Employee benefits payables
5,285
2,519
Contract liabilities
25,450
26,404
Other current liabilities
(4,632
)
2,310
Non-current lease liabilities
(3,316
)
(2,551
)
Other non-current liabilities
230
39
Net cash used in operating activities
(56,650
)
(87,592
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property, equipment and
software
(44,293
)
(27,419
)
Cash paid for business combinations and
asset acquisitions, net of acquired cash and restricted cash
(16,934
)
(65,824
)
Purchases of marketable securities
(207,266
)
(179,853
)
Maturities of marketable securities
219,340
240
Net cash used in investing activities
(49,153
)
(272,856
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from the exercise of stock
options and public warrants
2,293
4,278
Proceeds from Employee Stock Purchase
Plan
3,780
3,149
Proceeds from sale of employees restricted
stock units to cover taxes
12,390
28,587
Minimum tax withholding paid on behalf of
employees for restricted stock units
(12,352
)
(28,308
)
Tax payment for net settled option
shares
—
(444
)
Payment of contingent consideration
(1,000
)
(5,500
)
Finance lease principal payments
(248
)
(193
)
Net cash provided by financing
activities
4,863
1,569
Effect of exchange rate changes on cash
and cash equivalents
(439
)
3,091
Net decrease in cash and cash equivalents
and restricted cash
(101,379
)
(355,788
)
Cash and cash equivalents, and restricted
cash, beginning of period
245,871
692,075
Cash and cash equivalents, and restricted
cash, end of period
$
144,492
$
336,287
ROCKET LAB U.S.A., INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
FOR THE THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2023 AND 2022
(unaudited; in
thousands)
The tables provided below reconcile the
non-GAAP financial measures Adjusted EBITDA, Non-GAAP gross profit,
Non-GAAP research and development, net, Non-GAAP selling, general
and administrative, Non-GAAP operating expenses, Non-GAAP operating
loss and Non-GAAP total other income (expense), net with the most
directly comparable GAAP financial measures. See above for
additional information on the use of these non-GAAP financial
measures.
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
NET LOSS
$
(40,568
)
$
(34,610
)
$
(132,074
)
$
(98,736
)
Depreciation
4,237
4,400
11,463
11,911
Amortization
3,555
3,453
10,114
9,679
Stock-based compensation expense
14,098
14,485
43,398
43,312
Transaction costs
142
34
311
505
Interest (income) expense, net
1,413
1,486
2,843
6,907
Change in fair value of liability
classified warrants
—
—
—
(13,482
)
Change in fair value of contingent
consideration
(462
)
200
1,138
200
Performance reserve escrow
1,800
1,894
5,426
5,684
Amortization of inventory step-up
—
—
—
2,618
Provision for income taxes
1,352
1,693
2,639
4,008
Loss on foreign exchange
120
51
76
3,947
Accretion of marketable securities
purchased at a discount
(1,447
)
—
(3,601
)
—
Loss on disposal of assets
213
7
240
32
Employee retention credit
—
—
(3,841
)
—
ADJUSTED EBITDA
$
(15,547
)
$
(6,907
)
$
(61,868
)
$
(23,415
)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
GAAP Gross profit
$
14,967
$
8,467
$
35,917
$
17,160
Stock-based compensation
3,182
4,964
10,325
14,091
Amortization of purchased intangibles
1,710
1,756
5,129
3,072
Amortization of inventory step-up
—
—
—
2,618
Performance reserve escrow
76
114
209
342
Employee retention credit
—
—
(2,130
)
—
Non-GAAP Gross profit
$
19,935
$
15,301
$
49,450
$
37,283
Non-GAAP Gross margin
29.5
%
24.3
%
26.8
%
23.4
%
GAAP Research and development,
net
$
26,626
$
17,508
$
81,566
$
50,150
Stock-based compensation
(6,219
)
(5,309
)
(17,893
)
(16,685
)
Amortization of purchased intangibles and
favorable lease
(315
)
(9
)
(333
)
(3,333
)
Employee retention credit
—
—
631
—
Non-GAAP Research and development,
net
$
20,092
$
12,190
$
63,971
$
30,132
GAAP Selling, general and
administrative
$
27,200
$
22,961
$
84,386
$
64,991
Stock-based compensation
(4,697
)
(4,212
)
(15,180
)
(12,536
)
Amortization of purchased intangibles
(1,378
)
(1,529
)
(4,207
)
(2,907
)
Transaction costs
(142
)
(34
)
(311
)
(505
)
Performance reserve escrow
(1,724
)
(1,781
)
(5,217
)
(5,343
)
Change in fair value of contingent
consideration
462
(200
)
(1,138
)
(200
)
Employee retention credit
—
—
1,080
—
Non-GAAP Selling, general and
administrative
$
19,721
$
15,205
$
59,413
$
43,500
GAAP Operating expenses
$
53,826
$
40,469
$
165,952
$
115,141
Stock-based compensation
(10,916
)
(9,521
)
(33,073
)
(29,221
)
Amortization of purchased intangibles and
favorable lease
(1,693
)
(1,538
)
(4,540
)
(6,240
)
Transaction costs
(142
)
(34
)
(311
)
(505
)
Performance reserve escrow
(1,724
)
(1,781
)
(5,217
)
(5,343
)
Change in fair value of contingent
consideration
462
(200
)
(1,138
)
(200
)
Employee retention credit
—
—
1,711
—
Non-GAAP Operating expenses
$
39,813
$
27,395
$
123,384
$
73,632
GAAP Operating loss
$
(38,859
)
$
(32,002
)
$
(130,035
)
$
(97,981
)
Total non-GAAP adjustments
18,981
19,908
56,101
61,632
Non-GAAP Operating loss
$
(19,878
)
$
(12,094
)
$
(73,934
)
$
(36,349
)
GAAP Total other income (expense),
net
$
(357
)
$
(915
)
$
600
$
3,253
Change in fair value of liability
classified warrants
—
—
—
(13,482
)
Loss on foreign exchange
120
51
76
3,947
Non-GAAP Total other income (expense),
net
$
(237
)
$
(864
)
$
676
$
(6,282
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231108450544/en/
+ Rocket Lab Investor Relations Contact Colin Canfield
investors@rocketlabusa.com
+ Rocket Lab Media Contact Murielle Baker
media@rocketlabusa.com
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