Being overvalued only affects share price and ability to borrow or raise more money by share sales. Doesn't affect their ability to make money by selling services and products.The only worry if bubble bursts is some of their customers may fall by wayside. RL is in good financial shape to weather such a situation, may have to scale back lot of their expansion plans and hold onto cash they have till sales can cover operating costs.Sent from my SM-G570Y using Tapatalk
Quote from: TrevorMonty on 09/18/2021 07:44 pmBeing overvalued only affects share price and ability to borrow or raise more money by share sales. Doesn't affect their ability to make money by selling services and products.The only worry if bubble bursts is some of their customers may fall by wayside. RL is in good financial shape to weather such a situation, may have to scale back lot of their expansion plans and hold onto cash they have till sales can cover operating costs.Sent from my SM-G570Y using TapatalkNo thoughts on the impact on the hopeful, hapless investors who bought shares at the inflated price?
Quote from: TrevorMonty on 09/18/2021 04:14 amQuote from: trimeta on 09/18/2021 03:48 amQuote from: Robotbeat on 09/17/2021 11:58 pmreusable electron has been seen. At least their first iterations.From M.E.T.'s perspective, if you're not currently building Starship you're going to go out of business. And not just "building a Starship competitor," if you don't have a factory in Boca Chica that is very specifically building the Starship/Super Heavy launch system, you're going to go out of business.Fortunately there are plenty that believe they can survive and thrive as SpaceX competitors. Sent from my SM-G570Y using TapatalkI like to believe I have an opinion based on each company’s individual business case. And in this case I happen to disagree with the assumptions on which the (very high) valuation is based.
Quote from: trimeta on 09/18/2021 03:48 amQuote from: Robotbeat on 09/17/2021 11:58 pmreusable electron has been seen. At least their first iterations.From M.E.T.'s perspective, if you're not currently building Starship you're going to go out of business. And not just "building a Starship competitor," if you don't have a factory in Boca Chica that is very specifically building the Starship/Super Heavy launch system, you're going to go out of business.Fortunately there are plenty that believe they can survive and thrive as SpaceX competitors. Sent from my SM-G570Y using Tapatalk
Quote from: Robotbeat on 09/17/2021 11:58 pmreusable electron has been seen. At least their first iterations.From M.E.T.'s perspective, if you're not currently building Starship you're going to go out of business. And not just "building a Starship competitor," if you don't have a factory in Boca Chica that is very specifically building the Starship/Super Heavy launch system, you're going to go out of business.
reusable electron has been seen. At least their first iterations.
Everyone in the industry, not just RL and posters in this forum, is putting on a brave face and ignoring the consequences of Starship.But once "rapidly and fully reusable" technology is here (and deployed), it's going to dominate, and nobody has anything remotely similar in the pipeline.
Quote from: M.E.T. on 09/18/2021 11:09 amQuote from: TrevorMonty on 09/18/2021 04:14 amQuote from: trimeta on 09/18/2021 03:48 amQuote from: Robotbeat on 09/17/2021 11:58 pmreusable electron has been seen. At least their first iterations.From M.E.T.'s perspective, if you're not currently building Starship you're going to go out of business. And not just "building a Starship competitor," if you don't have a factory in Boca Chica that is very specifically building the Starship/Super Heavy launch system, you're going to go out of business.Fortunately there are plenty that believe they can survive and thrive as SpaceX competitors. Sent from my SM-G570Y using TapatalkI like to believe I have an opinion based on each company’s individual business case. And in this case I happen to disagree with the assumptions on which the (very high) valuation is based.Right now SpaceX is singular among the launch companies.Everyone in the industry, not just RL and posters in this forum, is putting on a brave face and ignoring the inevitable consequences of Starship.But once "rapidly and fully reusable" technology is here (and deployed), it's going to dominate, and nobody has anything remotely similar in the pipeline.I don't expect the other companies to quit in despair, but the brave face (and associated valuations) will only last for so long.There's probably a couple of years till that point. In stock market terms, that's ten lifetimes...
Right now SpaceX is singular among the launch companies.Everyone in the industry, not just RL and posters in this forum, is putting on a brave face and ignoring the inevitable consequences of Starship.But once "rapidly and fully reusable" technology is here (and deployed), it's going to dominate, and nobody has anything remotely similar in the pipeline.
Quote from: meekGee on 09/19/2021 12:29 pmEveryone in the industry, not just RL and posters in this forum, is putting on a brave face and ignoring the consequences of Starship.But once "rapidly and fully reusable" technology is here (and deployed), it's going to dominate, and nobody has anything remotely similar in the pipeline.I don't think this is correct. Blue Origin sees the writing on the wall, and is building a re-usable first stage, and is devoting at least skunk-works development effort on a re-usable second stage. That's an architecture that can compete with Starship. If they can execute (and that's a big if) they'll only be few years behind, and with a potential sales advantage (a right-sized ship).Similarly, I'm sure (without evidence) that RL is thinking about a either a re-usable or extremely low cost second stage for Neutron. I don't believe they are simply ignoring Starship. And the first step (a re-usable first stage) is already being attempted.The Chinese seem both forward-looking and fairly nimble. If Starship works as planned, I suspect they can work out their own version fairly quickly.The other classic expendable providers (Russia, Ariane, India, Japan) are at high risk of being left behind technically, but their strategy may be to ignore Starship and survive on National Security business. I don't think this a good strategy, but it is at least a plan in the face of StarShip success.
Rocket Lab reports revenues of $40.7M for the first quarter of 2022, with a net loss of $26.7M.
Interesting note from the earnings call for Rocket Lab, a company best known for its Electron rocket: launch accounted for just $6.6M of its first quarter revenue. Space systems accounted for $34.1M in revenue for the quarter.
Rocket Lab Announces Second Quarter 2022 Financial Results and Guidance for Third Quarter 202208/11/2022Record revenue of $55.5 million, representing 36% sequential quarter-on-quarter growth and 392% Year-on-Year quarterly revenue growthThird quarter revenue expected to range between $60 million and $63 millionLONG BEACH, Calif.--(BUSINESS WIRE)-- 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 its fiscal second quarter of 2022, ended June 30, 2022.“In the second quarter of 2022 our team upheld our track record of relentless execution, delivering three successful launches, more than any other small launch provider for the entire year so far. Electron retains its position as the industry’s reliable small launch vehicle, delivering satellites to orbit for a range commercial constellation operators and NASA in the second quarter, quickly followed by back-to-back national security launches for the National Reconnaissance Office after the second quarter end,” said Rocket Lab founder and CEO, Peter Beck. “We continue to push the boundaries with our launch and spacecraft technology, a strategy that also saw us successfully launch the CAPSTONE mission to the Moon for NASA. The highly complex two-phase mission encompassed a flawless launch on Electron and successful deployment to ballistic lunar transfer orbit by our in-house designed and built Lunar Photon spacecraft, paving the way for future deep space missions to Mars and Venus.”“We are encouraged by broad-based momentum that continued across our space systems business which comprised 66% of our revenue in the second quarter. Space Systems continues to be a significant growth area, with construction of our satellite constellation production facility in Long Beach substantially complete. This production facility will support the manufacturing of contracted spacecraft builds in backlog for a range of customers including Varda Space Industries, Eta Space, the University of California, Berkeley and seventeen 500 kg spacecraft buses for Globalstar as part of a $143M subcontract awarded to Rocket Lab by MDA in the first quarter of this year.” Second Quarter 2022 Business Highlights:Launched three successful Electron missions in the second quarter, more than any other U.S. small launch provider for the entire year so far. The missions included the CAPSTONE mission to the Moon for NASA, as well missions that deployed satellites for four commercial constellation companies; BlackSky, Unseenlabs, E-Space, and Swarm, three of which are repeat Electron launch customers.Successfully launched the CAPSTONE mission to the Moon for NASA - the first mission of NASA’s historic Artemis program to return humans to the Moon. This highly complex two-phase mission encompassed a flawless launch on Electron and successful deployment to ballistic lunar transfer orbit by Rocket Lab’s in-house designed and built Lunar Photon spacecraft. The mission was an impressive display of capability across launch and space systems, paving the way for future deep space missions to Mars and Venus.Signed a multi-launch contract with HawkEye 360 to launch 15 satellites across three Electron missions between late 2022 and 2024. The first of the three missions is scheduled to be Rocket Lab’s inaugural mission from Launch Complex 2 in Virginia in December 2022.Completed the first mid-air capture of an Electron booster with a helicopter, advancing the company’s rocket reusability program.Selected to manufacture Solar Array Panel for NASA’s GLIDE spacecraft, the first mission dedicated to surveying changes in the exosphere, the outermost layer of Earth’s atmosphere.Commenced construction on the Neutron launch vehicle production complex in Virginia.Surpassed 50 missions with the company’s MAX Flight Software, a leading off-the-shelf software platform used by aerospace prime contractors, the U.S. Air Force, U.S. DOD organizations, NASA, and commercial spacecraft developers and operators.Since June 30, 2022 Rocket Lab also:Launched two successful back-to-back missions for the National Reconnaissance Office in just over three weeks, demonstrating responsive launch for the national security community.Introduced the Company’s Responsive Space Program to enable rapid call-up launch and spacecraft capabilities.Selected to supply solar power for the United States Space Force’s new missile warning satellitesThird Quarter 2022 GuidanceFor the third quarter of 2022, Rocket Lab expects:Revenue between $60 million and $63 millionLaunch Services revenue of approximately $23 millionSpace Systems revenue of between $37 million to $40 millionGAAP Gross Margins between 12% to 15%Non-GAAP Gross Margins between 22% to 25%GAAP Operating Expenses $41 million to $43 millionNon-GAAP Operating Expenses $27 million to $29 millionExpected Interest expenses (Income), net $2 million expenseAdjusted EBITDA loss of $8 million to $12 millionBasic Shares Outstanding 471 millionConference Call InformationRocket Lab will host a conference call for investors at 1:30 p.m. PT (4:30 p.m. ET) today to discuss these business highlights and financial results for our second quarter, to provide our outlook for the third quarter ending September 30, 2022 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
Note that Rocket Lab actually lost money on launches in Q2: according to their 10-Q filing, revenue was $19,109,000, while cost of revenue was $21,421,000. However, I've kind of been calling this exact outcome for months: I think CAPSTONE had atypically high cost of revenue, and importantly a lot of that was one-time costs associated with the development of Lunar Photon. So it's not really representative of a "typical" quarter with three launches, even a quarter with a Lunar Photon launch.Q3 should turn a profit, however. It will also have three launches (the forecast confirms there's exactly one more launch planned this quarter), and projected revenues are exactly $23 million (that is, they already know exactly how much they'll be making), up from the aforementioned $19.1 million in Q2. That probably reflects a premium paid by the NRO for responsive launch. Conversely, I doubt that this will increase cost of revenues in the way that Lunar Photon did (in fact, they explicitly said that responsive launch doesn't substantially increase their costs). Thus, compared to Q2, Q3 should have higher revenues and lower cost of revenues.Edit: There's a comment in the 10-Q saying "The increase in cost per launch in the three months ended June 30, 2022 was driven primarily by stock-based compensation charges," but I'm never entirely sure how to interpret statements like that. Does it boil down to "we had more employees to pay"? If someone's more familiar with finance, I'd be interested to hear their perspective.
Total production headcount ended Q2 2022 at 781
Quarter ending R&D headcount was 308,
In the Launch Services segment specifically, GAAP gross margin of negative 12% in the quarter compares to negative 3% in the second quarter of 2021. The decline in gross margin year-on-year was driven by less absorption of overhead, exacerbated by revised overhead rates that were impacted by a range of inflationary and other factors, including staff costs, but specifically stock-based compensation for production staff that factored in much less in the Q2 2021 period prior to Rocket Lab coming public.
In the Space Systems segment, GAAP gross margin of 20% in the quarter compares to 73% in the second quarter of 2021. These declines in gross margin year-on-year were driven largely by the mix impact of the addition of lower margin revenue from the SolAero acquisition, as well as previously referenced stock-based compensation for production staff stepped up relative to periods prior to Rocket Lab coming public in August 2021.
Ronald EpsteinGot it, got it. And then maybe on the M&A front, are you all looking at more potential M&A in the systems business?Peter BeckYes, I mean, we like to keep kind of half a dozen to a dozen companies in the [chute] [ph]. What I will say is that we haven't seen the valuation of those private companies come in line with probably the public market. It seems to be a bit of historical there. So, we're not seeing them in a – we're going to pay over the odds for anything there. But, you know, we continue a very active M&A strategy. There's a few things that we would like to add to the quiver, but we've been very disciplined about data in the current market.
Prices have been on average probably 15% to 30% higher than our sticker price. So, that kind of gives you a bit of an example of what the premium kind of looks like for this kind of responsive type of capability. And our sticker price again being call it $7.5 million is kind of what we advertise the baseline Electron launch to be.
or example, to secure an Electron launch, it's a 10% nonrefundable deposit down before we'll engage.
Peter BeckYes. So, there's been emerging competition coming for, as long as we've been flying Electron. And as of yet, it just hasn't materialized. I think it's easy to, kind of talk about disruptive technologies. It's actually super hard to do it and even harder to, you know, to do it reliably and consistently. Not being as arrogant to say that there's not going to be competition at some point arrive, it's just – it's been arriving for in the last decade, but it's not finally got there yet.And with respect to the 1.0 ton class, I mean, we were very, very deliberate in the size of launch vehicle for a small dedicated launch vehicle that we developed. And we really think we've hit the sweet spot. Now, with respect to the, kind of the 1.0 ton class launch vehicles, our view has always been and the fundamental reason why we didn't develop one is you're in a complete no man's land with a 1.0 ton vehicle.So, if you've got a dedicated small satellite that you need launched, Electron and Electrons price point is absolutely ideal. Nobody charges you less for half [indiscernible] rocket. Like if you want to buy a dedicated rocket, then you buy a dedicated rocket. And if you've only got 100 kg or 200 kg or 300 kg payload, then you've just bought a very – much more expensive rocket when you needed. And then on the flip side, from a larger perspective, you're competing directly with a [indiscernible] mine transport emissions. So, it's just the worst of all worlds.It's too small to be an effective rideshare vehicle and too big to be a cost competitive dedicated launch vehicle. And I think as Adam mentioned previously, there's a lot of new entrant pricing out there, a lot of folks really don't have the experience to know what it actually costs to build and operate a launch vehicle and a lot of captured pricing going on that will be completely unsustainable in the future.And so, if without the one-time sweet spot, then we would have built a vehicle, you know, through that and we could certainly, you know, pivot to building one very, very quickly, but we'd honestly think that is the rest of all worlds.
And we had a battery program, which is just about wrapped up, which will enable 10 recharges of the batteries, which is the largest single element that we were going to have to replace from the launch vehicle. So that program is just ramping up.
Very interesting comments from Beck on the folly of developing a 1-ton rocket. Clearly things are heating up between Rocketlab and Relativity. Both CEO’s are firing subtle broadsides at one another’s plans. RL has been the media darling as the “next, more palatable SpaceX” for some time now. Relativity is muscling in on that territory and RL clearly is not gonna take it lying down.Getting the popcorn ready.
Don't expect a profit until 2024-25 especially as Neutron development and other expansions in space systems is using lot of their cash reserves but not enough to worry about.