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  Title	Rocket Lab Announces Third Quarter 2024 Financial Results, Posts 55% Year-on-Year Growth and Guides to Record Revenue in Q4
  ID	4100376
  External ID	7296285280
  Author	Unknown
  Published Date	Nov. 12, 2024, 3:21 p.m.
  Summary	LONG BEACH, Calif.--( BUSINESS WIRE )--Rocket Lab USA, Inc. (Nasdaq: RKLB) (“Rocket Lab”, “the Company”, “we,” “us,” or “our”), a global leader in launch services and space systems, today shared the f
  Tags	press-release
  URL	https://www.businesswire.com/news/home/20241112640424/en
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  Content ID	2377856
  Key	6ccc438d-fdc1-4bef-bfbd-f1d2891bf55d
  Content	LONG BEACH, Calif.--( BUSINESS WIRE )--Rocket Lab USA, Inc. (Nasdaq: RKLB) (“Rocket Lab”, “the Company”, “we,” “us,” or “our”), a global leader in launch services and space systems, today shared the financial results for fiscal third quarter, ended September 30, 2024. Rocket Lab founder and CEO, Sir Peter Beck, said: “In the third quarter 2024 we once again executed against our end-to-end space strategy with successes and key achievements reached across small and medium launch, as well as space systems. Revenue grew 55% year-on-year to $105 million and we continue to see strong demand growth with our backlog at $1.05 billion. Significant achievements for the quarter included signing a launch service agreement for multiple launches on Neutron with a confidential commercial satellite constellation customer; successfully launching twelve Electron launches year-to-date, making 2024 a record year for launches with more still to come; signing $55 million in new Electron launches, further cementing Electron's position as a global launch leader; and being selected by NASA to complete a study contract for a proposal to retrieve samples from Mars and return them to Earth as part of a world-first mission. We expect to close out the year strongly with more Electron launches scheduled in November and December, alongside continued progress across Neutron and space systems, that is behind our guidance for a record $125-$135 million revenue quarter in Q4.” Business Highlights for the Third Quarter 2024, plus updates since September 30, 2024. Electron: Achieved a new annual launch record of 12 Electron launches to date, with more scheduled across November and December 2024. Electron is the world's third most-frequently launched rocket annually by vehicle type and remains the United States' second most-frequently launched rocket annually. Signed several new Electron launch contracts in Q3 2024 with a total value of $55m, demonstrating an increased average selling price of $8.4m and showcasing a 67% pricing increase since the rocket's debut launch. Successful Electron launches for three separate commercial satellite constellation operators in Q3, including two missions launched within just eight days. In addition to these, Electron's most recent mission, launched in the fourth quarter on November 5 th , 2024, included an expedited turnaround of just 10 weeks between contract signing and launch. Neutron: Signed a launch service agreement for multiple launches on Neutron with a confidential commercial satellite constellation operator that signifies the beginning of a productive collaboration that could see Neutron deploy the entire constellation. Announced a federal defense contract that supports Neutron and the development of its Archimedes engine with the U.S. Air Force's Research Laboratory. Doubled engine testing cadence for Archimedes over the quarter at Rocket Lab's engine test site in Mississippi, alongside strong production execution at the Company's Engine Development Complex in California which included multiple engines manufactured, assembled, and shipped for engine testing. Significant progress made across Neutron's structures and infrastructure, including the completion of construction on the rocket's Assembly, Integration, and Test (A.I.T.) facility in Virginia. Well-positioned to on-ramp to the U.S. Space Force's National Security Space Launch (NSSL) Lane 1 program, which began accepting proposals in November 2024 to on-ramp new launch providers to an indefinite delivery indefinite quantity (IDIQ) contract valued at $5.6 billion over a five-year period. Space Systems: Completed production and delivery of two spacecraft on time and on budget for NASA's ESCAPADE mission to Mars. Selected by NASA to complete a study contract for a proposal to retrieve samples from Mars and return them to Earth, a first-of-its-kind mission. Completed two new spacecraft for Varda Space Industries to conduct the 2 nd and 3 rd missions to return in-space manufacturing capsules to Earth. Executed on schedule against the Company's $515 million prime contract with the Space Development Agency to build 18 spacecraft for its Tranche 2 Transport Layer program. Fourth Quarter 2024 Guidance For the fourth quarter of 2024, Rocket Lab expects: Revenue between $125 million and $135 million. GAAP Gross Margins between 26% and 28%. Non-GAAP Gross Margins between 32% and 34%. GAAP Operating Expenses between $84 million and $86 million. Non-GAAP Operating Expenses between $75 million and $77 million. Expected Interest Expense (Income), net $1.5 million. Adjusted EBITDA loss of $27 million and $29 million. Basic Shares Outstanding of 501 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 2024 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 $12 million to $14 million in Q4 2024. 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, a family of spacecraft platforms, and the Company is developing the large Neutron launch vehicle for constellation deployment. Since its first orbital launch in January 2018, Rocket Lab's Electron launch vehicle has become the second most frequently launched U.S. rocket annually and has delivered 198 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 spacecraft platforms have 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 pad in Virginia. To learn more, visit www.rocketlabusa.com + Forward Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this press release other than statements of historical fact, including, without limitation, statements regarding our expectations of financial results for the fourth quarter of 2024, launch and space systems operations, launch schedule and window, safe and repeatable access to space, Neutron development, operational expansion and business strategy are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “strategy,” “future,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to the factors, risks and uncertainties included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as such factors may be updated from time to time in our other filings with the Securities and Exchange Commission (the “SEC”), accessible on the SEC's website at www.sec.gov and the Investor Relations section of our website at www.rocketlabusa.com , which could cause our actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. + 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 EBITDA 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 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (unaudited; in thousands, except share and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Revenues $ 104,808 $ 67,661 $ 303,826 $ 184,601 Cost of revenues 76,812 52,694 224,494 148,684 Gross profit 27,996 14,967 79,332 35,917 Operating expenses: Research and development, net 47,723 26,626 126,139 81,566 Selling, general and administrative 32,172 27,200 91,445 84,386 Total operating expenses 79,895 53,826 217,584 165,952 Operating loss (51,899 ) (38,859 ) (138,252 ) (130,035 ) Other income (expense): Interest expense, net (454 ) (1,413 ) (2,176 ) (2,843 ) Loss on foreign exchange (490 ) (120 ) (465 ) (76 ) Other income, net 1,848 1,176 3,152 3,519 Total other income (expense), net 904 (357 ) 511 600 Loss before income taxes (50,995 ) (39,216 ) (137,741 ) (129,435 ) Provision for income taxes (944 ) (1,352 ) (89 ) (2,639 ) Net loss $ (51,939 ) $ (40,568 ) $ (137,830 ) $ (132,074 ) Net loss per share attributable to Rocket Lab USA, Inc.: Basic and diluted $ (0.10 ) $ (0.08 ) $ (0.28 ) $ (0.28 ) Weighted-average common shares outstanding: Basic and diluted 497,701,715 484,034,071 493,976,025 480,018,578 ROCKET LAB U.S.A., INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2024 AND DECEMBER 31, 2023 (unaudited; in thousands, except share and per share data) September 30, 2024 December 31, (unaudited) 2023 Assets Current assets: Cash and cash equivalents $ 292,470 $ 162,518 Marketable securities, current 149,919 82,255 Accounts receivable, net 22,148 35,176 Contract assets 49,461 12,951 Inventories 114,435 107,857 Prepaids and other current assets 67,066 66,949 Assets held for sale — 9,016 Total current assets 695,499 476,722 Non-current assets: Property, plant and equipment, net 170,983 145,409 Intangible assets, net 61,582 68,094 Goodwill 71,020 71,020 Right-of-use assets - operating leases 53,985 59,401 Right-of-use assets - finance leases 14,518 14,987 Marketable securities, non-current 61,292 79,247 Restricted cash 4,322 3,916 Deferred income tax assets, net 1,419 3,501 Other non-current assets 18,409 18,914 Total assets $ 1,153,029 $ 941,211 Liabilities and Stockholders' Equity Current liabilities: Trade payables $ 42,434 $ 29,303 Accrued expenses 8,063 5,590 Employee benefits payable 19,335 16,342 Contract liabilities 167,129 139,338 Current installments of long-term borrowings 11,758 17,764 Other current liabilities 20,480 15,036 Total current liabilities 269,199 223,373 Non-current liabilities: Convertible senior notes, net 344,865 — Long-term borrowings, net, excluding current installments 46,915 87,587 Non-current operating lease liabilities 51,906 56,099 Non-current finance lease liabilities 15,042 15,238 Deferred tax liabilities 726 426 Other non-current liabilities 4,541 3,944 Total liabilities 733,194 386,667 COMMITMENTS AND CONTINGENCIES Stockholders' equity: Common stock, $0.0001 par value; authorized shares: 2,500,000,000; issued and outstanding shares: 499,700,976 and 488,923,055 at September 30, 2024 and December 31, 2023, respectively 50 49 Additional paid-in capital 1,178,828 1,176,484 Accumulated deficit (761,356 ) (623,526 ) Accumulated other comprehensive income 2,313 1,537 Total stockholders' equity 419,835 554,544 Total liabilities and stockholders' equity $ 1,153,029 $ 941,211 ROCKET LAB U.S.A., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (unaudited; in thousands) For the Nine Months Ended September 30, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (137,830 ) $ (132,074 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 24,516 21,577 Stock-based compensation expense 39,944 43,398 (Gain) loss on disposal of assets (2,356 ) 240 Loss on extinguishment of long-term debt 1,330 — Amortization of debt issuance costs and discount 2,272 2,166 Noncash lease expense 4,437 4,062 Change in the fair value of contingent consideration (218 ) 1,138 Accretion of marketable securities purchased at a discount (2,272 ) (3,399 ) Deferred income taxes 2,310 644 Changes in operating assets and liabilities: Accounts receivable, net 12,928 13,798 Contract assets (36,510 ) (3,592 ) Inventories (7,118 ) (10,933 ) Prepaids and other current assets 1,951 (15,819 ) Other non-current assets 544 (10,712 ) Trade payables 13,853 12,026 Accrued expenses 2,980 (2,187 ) Employee benefits payables 3,525 5,285 Contract liabilities 27,791 25,450 Other current liabilities 4,088 (4,632 ) Non-current lease liabilities (4,321 ) (3,316 ) Other non-current liabilities 1,653 230 Net cash used in operating activities (46,503 ) (56,650 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, equipment and software (45,539 ) (44,293 ) Proceeds on disposal of assets, net 11,756 — Cash paid for asset acquisition — (16,934 ) Purchases of marketable securities (149,548 ) (207,266 ) Maturities of marketable securities 102,930 219,340 Net cash used in investing activities (80,401 ) (49,153 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from the exercise of stock options 2,074 2,293 Proceeds from Employee Stock Purchase Plan 4,098 3,780 Proceeds from sale of employees restricted stock units to cover taxes 14,991 12,390 Minimum tax withholding paid on behalf of employees for restricted stock units (15,169 ) (12,352 ) Payment of contingent consideration — (1,000 ) Purchase of capped calls related to issuance of convertible senior notes (43,168 ) — Proceeds from issuance of convertible senior notes 355,000 — Repayments on Trinity Loan Agreement (48,853 ) — Payment of debt issuance costs (12,205 ) — Finance lease principal payments (269 ) (248 ) Net cash provided by financing activities 256,499 4,863 Effect of exchange rate changes on cash and cash equivalents 763 (439 ) Net increase (decrease) in cash and cash equivalents and restricted cash 130,358 (101,379 ) Cash and cash equivalents, and restricted cash, beginning of period 166,434 245,871 Cash and cash equivalents, and restricted cash, end of period $ 296,792 $ 144,492 ROCKET LAB U.S.A., INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (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, 2024 2023 2024 2023 NET LOSS $ (51,939 ) $ (40,568 ) $ (137,830 ) $ (132,074 ) Depreciation 4,793 4,237 14,513 11,463 Amortization 3,302 3,555 10,003 10,114 Stock-based compensation expense 12,896 14,098 39,944 43,398 Transaction costs 23 142 407 311 Interest expense, net 454 1,413 2,176 2,843 Change in fair value of contingent consideration — (462 ) (218 ) 1,138 Performance reserve escrow — 1,800 — 5,426 Provision for income taxes 944 1,352 89 2,639 Loss on foreign exchange 490 120 465 76 Accretion of marketable securities purchased at a discount (666 ) (1,447 ) (2,272 ) (3,601 ) (Gain) loss on disposal of assets (1,164 ) 213 (2,356 ) 240 Employee retention credit — — — (3,841 ) Loss on extinguishment of debt — — 1,330 — ADJUSTED EBITDA $ (30,867 ) $ (15,547 ) $ (73,749 ) $ (61,868 ) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 GAAP Gross profit $ 27,996 $ 14,967 $ 79,332 $ 35,917 Stock-based compensation 3,029 3,182 10,205 10,325 Amortization of purchased intangibles and favorable lease 1,763 1,710 5,247 5,129 Performance reserve escrow — 76 — 209 Employee retention credit — — — (2,130 ) Non-GAAP Gross profit $ 32,788 $ 19,935 $ 94,784 $ 49,450 Non-GAAP Gross margin 31.3 % 29.5 % 31.2 % 26.8 % GAAP Research and development, net $ 47,723 $ 26,626 $ 126,139 $ 81,566 Stock-based compensation (4,626 ) (6,219 ) (13,660 ) (17,893 ) Amortization of purchased intangibles and favorable lease (302 ) (315 ) (686 ) (333 ) Employee retention credit — — — 631 Non-GAAP Research and development, net $ 42,795 $ 20,092 $ 111,793 $ 63,971 GAAP Selling, general and administrative $ 32,172 $ 27,200 $ 91,445 $ 84,386 Stock-based compensation (5,241 ) (4,697 ) (16,079 ) (15,180 ) Amortization of purchased intangibles and favorable lease (960 ) (1,378 ) (3,274 ) (4,207 ) Transaction costs (23 ) (142 ) (407 ) (311 ) Performance reserve escrow — (1,724 ) — (5,217 ) Change in fair value of contingent consideration — 462 218 (1,138 ) Employee retention credit — — — 1,080 Non-GAAP Selling, general and administrative $ 25,948 $ 19,721 $ 71,903 $ 59,413 GAAP Operating expenses $ 79,895 $ 53,826 $ 217,584 $ 165,952 Stock-based compensation (9,867 ) (10,916 ) (29,739 ) (33,073 ) Amortization of purchased intangibles and favorable lease (1,262 ) (1,693 ) (3,960 ) (4,540 ) Transaction costs (23 ) (142 ) (407 ) (311 ) Performance reserve escrow — (1,724 ) — (5,217 ) Change in fair value of contingent consideration — 462 218 (1,138 ) Employee retention credit — — — 1,711 Non-GAAP Operating expenses $ 68,743 $ 39,813 $ 183,696 $ 123,384 GAAP Operating loss $ (51,899 ) $ (38,859 ) $ (138,252 ) $ (130,035 ) Total non-GAAP adjustments 15,944 18,981 49,340 56,101 Non-GAAP Operating loss $ (35,955 ) $ (19,878 ) $ (88,912 ) $ (73,934 ) GAAP Total other income (expense), net $ 904 $ (357 ) $ 511 $ 600 Loss on foreign exchange 490 120 465 76 (Gain) loss on disposal of assets (1,164 ) 213 (2,356 ) 240 Loss on extinguishment of debt — — 1,330 — Non-GAAP Total other income (expense), net $ 230 $ (24 ) $ (50 ) $ 916
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