Rocket Lab USA(RKLB) - 2025 Q2 - Quarterly Report

FORM 10-Q Filing Information This section provides key administrative details regarding the company's quarterly report filing Filing Details This document is a Quarterly Report on Form 10-Q for Rocket Lab Corporation, covering the period ended June 30, 2025 - Filing Type: Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934[2] - Period Ended: June 30, 2025[2] Title of each class | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock, par value $0.0001 per share | RKLB | The Nasdaq Stock Market LLC | - Filer Status: Large accelerated filer[4] - Common Stock Outstanding (as of August 4, 2025): 479.36 million shares[4] Cautionary Note Regarding Forward-Looking Statements This section outlines the inherent risks and uncertainties associated with forward-looking statements in the report Forward-Looking Statements and Risks This section highlights forward-looking statements, subject to risks and uncertainties that could materially alter actual results - Forward-looking statements are based on current expectations and beliefs, and actual results may vary materially due to risks and uncertainties[6] - Key risks include: ability to manage future growth and operational efficiencies, Electron launch rate, Neutron development delays, launch pad utilization, spacecraft component failures, competitive and regulatory changes, governmental policy shifts, customer defaults, compliance with U.S. government contract regulations, retaining key personnel, product defects/launch failures, intellectual property protection, supply chain disruptions, integration of acquisitions, global inflation/interest rates, geopolitical conflicts, and cybersecurity[6][11] - The Company does not undertake to update or revise any forward-looking statements, except as required by applicable securities laws[7] PART I. FINANCIAL INFORMATION This part presents the company's unaudited condensed consolidated financial statements and management's analysis Item 1. Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, offering a detailed financial overview Condensed Consolidated Balance Sheets This section presents the company's financial position, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (in thousands) | Asset/Liability/Equity | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------- | :--------------------------- | :------------------------------- | | Assets | | | | Cash and cash equivalents | $564.1 million | $271.0 million | | Total current assets | $1.0 billion | $692.6 million | | Property, plant and equipment, net | $249.8 million | $194.8 million | | Total assets | $1.6 billion | $1.2 billion | | Liabilities | | | | Total current liabilities | $376.5 million | $339.5 million | | Convertible senior notes, net | $346.5 million | $345.4 million | | Total liabilities | $864.7 million | $801.9 million | | Stockholders' Equity | | | | Total stockholders' equity | $688.5 million | $382.5 million | - Total assets increased by $368.9 million from December 31, 2024, to June 30, 2025, primarily driven by an increase in cash and cash equivalents[16] - Total stockholders' equity increased by $306.0 million, largely due to additional paid-in capital from the ATM Equity Offering and preferred stock transactions[16][19] Condensed Consolidated Statements of Operations and Comprehensive Loss This section details the company's financial performance, including revenues, expenses, and net loss Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total revenues | $144.5 million | $106.3 million | $267.1 million | $199.0 million | | Gross profit | $46.4 million | $27.2 million | $81.6 million | $51.3 million | | Operating loss | $(59.6) million | $(43.3) million | $(118.8) million | $(86.4) million | | Net loss | $(66.4) million | $(41.6) million | $(127.0) million | $(85.9) million | | Basic and diluted net loss per share | $(0.1) | $(0.1) | $(0.2) | $(0.2) | - Total revenues increased by 36% for the three months ended June 30, 2025, and by 34% for the six months ended June 30, 2025, compared to the respective prior periods, driven by growth in both Space Systems and Launch Services[17][123][124] - Net loss increased for both the three-month and six-month periods, primarily due to higher operating expenses, particularly in Research and Development for Neutron vehicle development, and increased interest expense[17][141][143][150][152] Condensed Consolidated Statements of Changes in Stockholders' Equity This section outlines changes in the company's equity, including stock issuances and net loss - Total stockholders' equity increased from $382.5 million at December 31, 2024, to $688.5 million at June 30, 2025[19] - Significant increases in Additional Paid-In Capital were due to the issuance of common stock under the ATM Equity Offering ($90.1 million for Q1 2025 and $297.0 million for Q2 2025) and stock-based compensation[19] - The Company issued 50.95 million shares of Series A Convertible Participating Preferred Stock in January 2025, with 5.0 million shares converted to common stock in June 2025[19][67] Condensed Consolidated Statements of Cash Flows This section summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(77.5) million | $(15.6) million | | Net cash used in investing activities | $(36.0) million | $(63.1) million | | Net cash provided by financing activities | $406.0 million | $256.9 million | | Net increase in cash and cash equivalents and restricted cash | $293.7 million | $178.1 million | - Net cash used in operating activities significantly increased to $77.5 million in H1 2025 from $15.6 million in H1 2024, primarily due to a higher net loss and changes in operating assets and liabilities[21][164] - Net cash provided by financing activities increased to $406.0 million in H1 2025, mainly driven by $387.2 million in net proceeds from the ATM Equity Offering and $24.7 million from a draw under the Trinity Loan Agreement[21][166] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the financial statements - Rocket Lab Corporation is an end-to-end space company providing launch services, spacecraft design, components, manufacturing, and on-orbit management solutions. It operates one of the only private orbital launch ranges globally in Mahia, New Zealand[24] - A holding company reorganization was implemented on May 23, 2025, with Rocket Lab Corporation becoming the successor issuer to Rocket Lab USA, Inc[25][26] - Revenue recognition policy was updated; launch services revenue is generally recognized point-in-time upon intentional ignition or successful delivery, but over-time if there's no alternative use for the vehicle and an enforceable right to payment exists[29][30] Total Revenue by Recognition Model (in thousands) | Recognition Model | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :---------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Point-in-time | $70.3 million | $45.9 million | $125.1 million | $89.9 million | | Over-time | $74.2 million | $60.4 million | $142.0 million | $109.1 million | | Total Revenue | $144.5 million | $106.3 million | $267.1 million | $199.0 million | - Backlog totaled $995.4 million as of June 30, 2025, with approximately 58% expected to be recognized within 12 months. This represents a decrease from $1,067.0 million as of December 31, 2024[38][128] - The Company issued $355.0 million in 4.250% Convertible Senior Notes due 2029 in February 2024. Noteholders gained the right to convert between July 1, 2025, and September 30, 2025, due to the common stock price exceeding 130% of the conversion price[55][57][59] - In January 2025, the Company issued 50.95 million shares of Series A Convertible Participating Preferred Stock to The Equatorial Trust, with 5.0 million shares converted to common stock in June 2025[67] - Through June 30, 2025, the Company sold 15.14 million shares of common stock via an ATM Equity Offering, generating $396.6 million in gross proceeds[75] Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cost of revenues | $4.9 million | $3.7 million | $8.8 million | $7.2 million | | R&D, net | $5.6 million | $5.0 million | $10.5 million | $9.0 million | | SG&A | $7.5 million | $5.2 million | $17.9 million | $10.8 million | | Total | $17.9 million | $14.0 million | $37.2 million | $27.0 million | Segment Revenues and Gross Profit (in thousands) Three Months Ended June 30, 2025: | Segment | Revenues (in thousands) | Cost of Revenues (in thousands) | Gross Profit (in thousands) | | :------------ | :---------------------- | :------------------------------ | :-------------------------- | | Launch Services | $46.6 million | $32.4 million | $14.2 million | | Space Systems | $97.9 million | $65.7 million | $32.2 million | Six Months Ended June 30, 2025: | Segment | Revenues (in thousands) | Cost of Revenues (in thousands) | Gross Profit (in thousands) | | :------------ | :---------------------- | :------------------------------ | :-------------------------- | | Launch Services | $82.2 million | $60.8 million | $21.4 million | | Space Systems | $184.8 million | $124.6 million | $60.2 million | - On July 4, 2025, the One Big Beautiful Bill Act (OBBB) was enacted, which includes the repeal of mandatory capitalization of domestic R&D expenditures (reinstating full expensing beginning in 2025). The Company is evaluating its impact[105] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Rocket Lab's financial condition and operational results Overview This section provides a high-level description of Rocket Lab's business, including its launch services and space systems - Rocket Lab is an end-to-end space company providing launch services (Electron, in-development Neutron) and space systems (design, manufacturing, components, on-orbit management)[108][109][110][111] - Electron has successfully delivered over 200 spacecraft to orbit across 64 missions through June 30, 2025, and was the second most frequently orbital launched rocket globally in 2024[109] - Neutron, a reusable medium-capacity launch vehicle, is under development to increase payload capacity to approximately 15,000 kg for low Earth orbit and support commercial, U.S. government constellation launches, and potentially human space flight[110] Recent Developments This section highlights significant recent events and strategic initiatives impacting the company - Rocket Lab USA Inc. entered into a Stock Purchase Agreement on May 22, 2025, to acquire GEOST LLC for an aggregate consideration of $275.0 million, consisting of up to $125.0 million in cash and up to $150.0 million in common stock, plus potential earnout payments of up to $50.0 million[113][114] - The Company is assessing the impact of significant shifts in U.S. trade policy, including increased tariffs, which could affect its supply chain and business operations, though no material impact has been observed to date[116] Key Factors Affecting Our Performance This section discusses the primary internal and external factors influencing the company's financial and operational results - Future results depend on the timely development and successful deployment of the Neutron launch vehicle, which involves inherent risks and potential delays in engineering, manufacturing, and production rates[117] - Growth is dependent on the ability to sell additional launch services, space systems services, and spacecraft components to new and existing customers, expanding the addressable market with Neutron and winning spacecraft constellation missions[118] - Improving profit margins and scaling the business through cost reduction initiatives and increased production volumes are critical, with potential negative impacts from lower facility utilization, cost overruns, and supply chain issues[119] - Continued government expenditures and private enterprise investment in the space economy are important factors for the Company's growth prospects[120] Key Metrics and Select Financial Data This section presents crucial performance indicators and summarized financial figures for analysis Electron Launch Vehicle Build-Rate and Launch Cadence | Metric | 2022 (in thousands) | 2023 (in thousands) | 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | | :-------------------- | :------------------ | :------------------ | :------------------ | :-------------------------------------------- | | Electron vehicles built | ~12 | ~11 | ~14 | ~12 | | Electron vehicles launched | 9 | 10 | 16 | 10 | - Total revenue increased by 36% to $144.5 million for Q2 2025 (vs. $106.3 million in Q2 2024) and by 34% to $267.1 million for H1 2025 (vs. $199.0 million in H1 2024), driven by growth in both Space Systems (satellite manufacturing) and Launch Services (higher launch cadence and revenue per launch)[123][124] Revenue and Cost Value Per Launch (Point-in-Time Launches) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue value per launch | $7.9 million | $7.1 million | $7.5 million | $7.7 million | | Cost per launch | $5.0 million | $5.4 million | $5.3 million | $5.7 million | - Backlog decreased from $1,067.0 million as of December 31, 2024, to $995.4 million as of June 30, 2025, with $585.8 million related to space systems and $409.6 million to launch services[128] Components of Results of Operations This section breaks down the various revenue and expense categories contributing to the company's operational outcomes - Revenues are derived from long-term fixed-price contracts for launch services and spacecraft builds, and purchase order-based spacecraft components sales, recognized either 'point-in-time' or 'over-time'[129] - Cost of revenues includes direct material, labor, manufacturing overhead, freight, depreciation, and personnel expenses. The Company expects cost of revenues to increase in absolute dollars but decrease as a percentage of revenue over time by increasing production rates[131][132] - Research and development expenses are primarily for Neutron launch vehicle development, Electron first stage recovery, and expanding spacecraft product portfolios, expected to decline as a percentage of total revenue over time[134] - Selling, general and administrative expenses are expected to increase in absolute dollars due to corporate infrastructure investments and public company operating costs, but decline as a percentage of total revenue over time[135] Comparison of the Three Months Ended June 30, 2025 and 2024 This section analyzes the financial performance for the three-month period, comparing current and prior year results Key Financials (Three Months Ended June 30, in thousands) | Metric | 2025 ($) (in thousands) | 2025 (%) | 2024 ($) (in thousands) | 2024 (%) | $ Change (in thousands) | % Change | | :-------------------------- | :---------------------- | :------- | :---------------------- | :------- | :---------------------- | :------- | | Revenues | $144.5 million | 100.0% | $106.3 million | 100.0% | $38.2 million | 36% | | Cost of revenues | $98.1 million | 67.9% | $79.1 million | 74.4% | $19.0 million | 24% | | Gross profit | $46.4 million | 32.1% | $27.2 million | 25.6% | $19.2 million | 71% | | Research and development, net | $66.1 million | 45.8% | $39.9 million | 37.6% | $26.2 million | 66% | | Selling, general and administrative | $39.9 million | 27.6% | $30.5 million | 28.7% | $9.4 million | 31% | | Operating loss | $(59.6) million | (41.3)% | $(43.3) million | (40.7)% | $(16.4) million | 38% | | Net loss | $(66.4) million | (45.9)% | $(41.6) million | (39.2)% | $(24.8) million | 60% | - Revenue growth was primarily driven by a $21.0 million (27%) increase in Space Systems revenue due to spacecraft manufacturing, and a $17.3 million (59%) increase in Launch Services revenue due to higher launch cadence (5 vs. 4 missions) and higher revenue per point-in-time launch[139] - Gross profit increased by 71% to $46.4 million, and gross margin improved from 25.6% to 32.1%[138] - Research and development expense increased by 66% to $66.1 million, mainly due to Neutron development progress, increased staff, and prototype spending for spacecraft products[141] - Interest expense, net, increased by 188% to $(2.4) million, primarily due to convertible senior notes and reduced interest-bearing account balances[143] Comparison of the Six Months Ended June 30, 2025 and 2024 This section analyzes the financial performance for the six-month period, comparing current and prior year results Key Financials (Six Months Ended June 30, in thousands) | Metric | 2025 ($) (in thousands) | 2025 (%) | 2024 ($) (in thousands) | 2024 (%) | $ Change (in thousands) | % Change | | :-------------------------- | :---------------------- | :------- | :---------------------- | :------- | :---------------------- | :------- | | Revenues | $267.1 million | 100.0% | $199.0 million | 100.0% | $68.0 million | 34% | | Cost of revenues | $185.4 million | 69.4% | $147.7 million | 74.2% | $37.8 million | 26% | | Gross profit | $81.6 million | 30.6% | $51.3 million | 25.8% | $30.3 million | 59% | | Research and development, net | $121.2 million | 45.4% | $78.4 million | 39.4% | $42.8 million | 55% | | Selling, general and administrative | $79.2 million | 29.7% | $59.3 million | 29.8% | $19.9 million | 34% | | Operating loss | $(118.8) million | (44.5)% | $(86.4) million | (43.4)% | $(32.5) million | 38% | | Net loss | $(127.0) million | (47.6)% | $(85.9) million | (43.2)% | $(41.1) million | 48% | - Revenue growth was primarily driven by a $47.9 million (35%) increase in Space Systems revenue due to spacecraft manufacturing, and a $20.2 million (32%) increase in Launch Services revenue due to higher launch cadence (10 vs. 8 missions) and over-time revenue recognition, partially offset by lower revenue per point-in-time launch[148] - Gross profit increased by 59% to $81.6 million, and gross margin improved from 25.8% to 30.6%[147] - Research and development expense increased by 55% to $121.2 million, mainly due to Neutron development progress, increased staff, and prototype spending for spacecraft products[150] - Interest expense, net, increased by 188% to $(5.0) million, primarily due to convertible senior notes and reduced interest-bearing account balances[152] - Loss on foreign exchange increased significantly by 2,592% to $(0.6) million, primarily due to fluctuations in the New Zealand Dollar and Canadian Dollar against the U.S. Dollar[153] Liquidity and Capital Resources This section assesses the company's ability to meet short-term obligations and fund long-term growth initiatives - As of June 30, 2025, the Company had $564.1 million in cash and cash equivalents and $185.2 million in marketable securities[156] - The Company believes existing cash, cash equivalents, and customer payments will be sufficient to meet working capital and capital expenditure needs for at least the next twelve months[157] - Total outstanding indebtedness was $427.1 million as of June 30, 2025, including $355.0 million in convertible senior notes and $72.1 million under the Trinity Loan Agreement[158][160] - Capital expenditures for the six months ended June 30, 2025, were $60.7 million[159] - Future capital requirements are expected to increase significantly due to investments in new products/technologies, facility expansion, sales/marketing, and operating as a public company[159][162] Cash Flows This section details the movement of cash through operating, investing, and financing activities Summary of Cash Flows (in thousands) | Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------- | :-------------------------------------------- | :-------------------------------------------- | | Operating activities | $(77.5) million | $(15.6) million | | Investing activities | $(36.0) million | $(63.1) million | | Financing activities | $406.0 million | $256.9 million | - Net cash used in operating activities increased to $77.5 million in H1 2025, primarily due to a net loss of $127.0 million, partially offset by non-cash adjustments like stock-based compensation ($37.2 million) and depreciation/amortization ($17.5 million)[164] - Net cash used in investing activities decreased to $36.0 million in H1 2025, mainly due to $60.7 million in capital equipment purchases, partially offset by $24.6 million net cash from marketable securities[165] - Net cash provided by financing activities increased to $406.0 million in H1 2025, driven by $387.2 million from the ATM Equity Offering and $24.7 million from the Trinity Loan Agreement draw[166] Critical Accounting Policies and Estimates This section discusses the significant accounting policies and judgments that impact the financial statements - No material changes to the Company's critical accounting policies and estimates as disclosed in its Annual Report on Form 10-K[167] Off-Balance Sheet Arrangements This section discloses any material off-balance sheet transactions or obligations of the company - The Company did not have any off-balance sheet arrangements during the periods presented[168] Guarantor Information This section provides details regarding the company's guarantees on outstanding indebtedness - Rocket Lab Corporation fully and unconditionally guarantees the $355.0 million aggregate principal amount of convertible senior notes issued by Rocket Lab USA, Inc. following the holding company reorganization[169][170] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the Company's exposure to market risks, primarily from foreign currency, interest rates, and inflation Foreign Currency Exchange Risk This section describes the company's exposure to fluctuations in foreign currency exchange rates - The Company's reporting currency is the U.S. dollar, and it is exposed to foreign currency exchange risk from operations in New Zealand, Canada, and Australia[172] - Materially all revenues are U.S. dollar-denominated, and the Company has not engaged in hedging foreign currency risk to date, making it susceptible to significant exchange rate movements[172] Interest Rate Risk This section outlines the company's exposure to changes in interest rates on its financial instruments - As of June 30, 2025, the Company held $564.1 million in cash and cash equivalents and $185.2 million in marketable securities, primarily in operating accounts, money market instruments, commercial paper, corporate debt, certificates of deposit, U.S. Treasury bills, and asset-backed securities[173] - The Company does not use derivative financial instruments to manage interest rate risk[173] Impact of Inflation This section assesses the potential effects of inflation on the company's operations and financial condition - Inflation has not had a material effect on the Company's business, results of operations, or financial condition to date[174] - Significant inflationary pressures on costs could diminish margins if not offset, potentially harming the business[174] Item 4. Controls and Procedures This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes Evaluation of Disclosure Controls and Procedures This section reports on the effectiveness of the company's controls for financial reporting and disclosure - Management, with the participation of the principal executive and financial officers, concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[176] Changes in Internal Control over Financial Reporting This section details any material changes in the company's internal control over financial reporting - No material changes in the Company's internal control over financial reporting occurred during the period[177] PART II. OTHER INFORMATION This part covers legal proceedings, risk factors, equity sales, and other miscellaneous disclosures Item 1. Legal Proceedings This section confirms the absence of material legal proceedings against the company - Management believes no current claims or actions pending could have a material adverse effect on the Company's financial position, results of operations, or cash flows[178] Item 1A. Risk Factors This section states that there have been no material changes to the risk factors previously disclosed - No material changes from previously disclosed risk factors[179] Item 2. Unregistered Sales of Equity Securities This section reports on any unregistered sales of the company's equity securities - No unregistered sales of equity securities occurred[180] Item 3. Defaults Upon Senior Securities This section confirms whether any defaults occurred on the company's senior securities - No defaults upon senior securities occurred[181] Item 4. Mine Safety Disclosures This section addresses any required disclosures related to mine safety - No mine safety disclosures are applicable[182] Item 5. Other Information This section provides additional material information not covered elsewhere in the report - Sir Peter Beck, CEO, entered into a Rule 10b5-1 trading plan on June 13, 2025, to sell up to 5.0 million shares of common stock, with a selling start date of September 15, 2025, and an expiration date of December 17, 2025[183][184] Item 6. Exhibits This section lists all documents filed as exhibits to the quarterly report - Key exhibits include the Amended and Restated Certificate of Incorporation, Bylaws, Certificate of Designations of Series A Preferred Stock, First Supplemental Indenture, Stock Purchase Agreement for GEOST, and certifications of principal executive and financial officers[186] Signatures This section contains the official signatures certifying the accuracy and completeness of the report Report Signatures This section contains the official signatures certifying the accuracy and completeness of the report - The report was signed on August 7, 2025, by Peter Beck, President, Chief Executive Officer and Chairman, and Adam Spice, Chief Financial Officer[193]