Rocket Lab USA(US:RKLB)2023-11-07 16:00Launch Services and Space Systems Performance - Rocket Lab's Electron launch vehicle has delivered 171 spacecraft to orbit and one suborbital launch across 37 successful missions through September 30, 2023[92] - The company's revenue for the three months ended September 30, 2023, was $67.7 million, a 7% year-on-year increase, driven by space systems growth of $6.3 million[104] - Revenue for the nine months ended September 30, 2023, was $184.6 million, a 16% year-on-year increase, primarily due to higher launch cadence and space systems growth[105] - Rocket Lab's backlog increased from $503.6 million as of December 31, 2022, to $582.4 million as of September 30, 2023, with $250.7 million related to Launch Services and $331.7 million related to Space Systems[109] - The company experienced an anomaly during its 41st Electron mission on September 19, 2023, resulting in a total loss of power and mission failure, which delayed scheduled launches and negatively impacted launch revenue[96][101] - Rocket Lab plans to resume Electron launches with a dedicated mission for Japan-based iQPS during a launch window opening on November 28, 2023[100] - The company's revenue value per launch for the three months ended September 30, 2023, was $7.1 million, compared to $7.7 million in the same period in 2022[107] - Rocket Lab's launch vehicle build rate increased from approximately 8 in 2021 to 12 in 2022, with an anticipated build of approximately 13 launch vehicles in 2023[103] - Revenue increased by $4.6 million, or 7%, for the three months ended September 30, 2023 compared to the same period in 2022, driven by a 16% growth in Space Systems revenue to $46.3 million[124] - Revenue for the nine months ended September 30, 2023 increased by $25.4 million, or 16%, to $184.6 million, with Launch Services revenue growing 30% to $63.4 million[134] Neutron Development and Future Plans - Rocket Lab's Neutron launch vehicle, currently in development, is expected to increase payload capacity to approximately 15,000 kg for expendable launches to low Earth orbit[93] - The company acquired assets from Virgin Orbit Holdings, Inc. in June 2023 to support the development of Neutron and expand its Electron and Space Systems businesses[94] - The company plans to continue significant investments in developing new products, including the Neutron launch vehicle, Electron's first stage recovery, and Photon spacecraft capabilities[118] Financial Performance and Expenses - Cost of revenues decreased by $1.9 million, or 3%, for the three months ended September 30, 2023, with Launch Services cost of revenues decreasing by 35% to $15.5 million[125] - Research and development expense increased by $9.1 million, or 52%, for the three months ended September 30, 2023, primarily due to Neutron development progress and increased staff costs[126] - Selling, general and administrative expense increased by $4.2 million, or 18%, for the three months ended September 30, 2023, driven by business development initiatives and professional services costs[127] - Net loss for the three months ended September 30, 2023 was $40.6 million, or 60.1% of revenue, compared to a net loss of $34.6 million, or 55.0% of revenue, in the same period in 2022[123] - Cost of revenues as a percentage of total revenue decreased to 78% for the three months ended September 30, 2023, compared to 87% in the same period in 2022[125] - Research and development expense as a percentage of total revenue increased to 39.4% for the three months ended September 30, 2023, compared to 27.8% in the same period in 2022[123] - The company expects cost of revenues to increase in absolute dollars but decrease as a percentage of revenue over time as it grows into current capacity and executes cost-reduction initiatives[115] - Cost of revenues increased by $6.6 million, or 5%, to $148.7 million for the nine months ended September 30, 2023, compared to $142.1 million in the same period in 2022[135] - Research and development expenses increased by $31.4 million, or 63%, to $81.6 million for the nine months ended September 30, 2023, driven by Neutron development and staff costs[136] - Selling, general and administrative expenses increased by $19.4 million, or 30%, to $84.4 million for the nine months ended September 30, 2023, due to business expansion and higher staff-related costs[137] - Interest expense, net of interest income, decreased by $4.1 million, or 59%, to $2.8 million for the nine months ended September 30, 2023, primarily due to increased interest income on marketable securities[138] - Loss on foreign exchange decreased by $3.9 million, or 98%, to $76,000 for the nine months ended September 30, 2023, due to the New Zealand intercompany loan[139] - Other income increased by $2.9 million, or 463%, to $3.5 million for the nine months ended September 30, 2023, primarily due to accretion of marketable securities[141] Cash Flow and Financial Position - The company had $140.9 million in cash and cash equivalents and $229.5 million in marketable securities as of September 30, 2023[143] - Net cash used in operating activities was $56.7 million for the nine months ended September 30, 2023, compared to $87.6 million in the same period in 2022[147] - Cash used in investing activities was $49.2 million for the nine months ended September 30, 2023, driven by capital equipment and infrastructure investments[149] - The company expects capital and operating expenditures to increase significantly due to ongoing activities, including product development and market expansion[146] - Cash and cash equivalents totaled $140.9 million, with $229.5 million invested in marketable securities as of September 30, 2023[155] Internal Controls and Risk Management - SolAero's internal control weaknesses impacted 14% of consolidated total assets and 38% of total revenues as of December 31, 2022[160] - Management implemented a remediation plan to address material weaknesses in internal controls, focusing on segregation of duties, privileged access, and IT system changes[161][162] - The company excluded SolAero from its assessment of disclosure controls and procedures during the first year post-acquisition[159] - The company maintains disclosure controls and procedures to ensure timely and accurate financial reporting[158] - No material changes in internal control over financial reporting occurred during the quarter, other than SolAero-related issues[162] - The company is not involved in any pending litigation that could materially impact its financial condition or operations[163] Inflation and Market Conditions - Inflation has not materially affected the company's business, but significant inflationary pressures could harm margins and profitability[156]