Rocket Lab Boosts Revenue 7% Year-Over-Year in Q3
Rocket Lab reported a 7% year-over-year revenue increase in the third quarter of 2023, posting $67.7 million in revenue. Net loss was $40.6 million.
Revenue of $67.7 million was near the high-end of Rocket Lab’s prior revised guidance of $66 million to $68 million. Sequentially, revenue increased 9%, primarily due to revenue from Rocket Lab’s manufacturing contract with MDA to build satellite buses for the Globalstar.
Space Systems continues to lead Rocket Lab’s business with $46.3 million in revenue during the quarter. This was up 17% sequentially and modestly above the high-end of its revised guidance range.
The Launch business contributed $21.3 million during the quarter. Rocket Lab suffered a launch failure during the quarter, so Electron missions are on pause while the launcher solves the anomaly.
CEO Peter Beck told investors on a Nov. 8 call that the failure was a “highly complex issue” to figure out, with only 1.6 seconds of anomaly flight data to work with. He reported Rocket Lab’s analysis indicates there was an unexpected electrical arc within the power system.
Rocket Lab expects to formally close its anomaly investigation in the coming weeks. The launch window for our return to flight mission will open on November 28 and extend into December. It will be a dedicated mission will be for Japanese-based Earth imaging company iQPS.
Rocket Lab also gave a view into its launch manifest for 2024, and it is fully booked with 22 missions. Rocket Lab is targeting five launches in the first quarter and six in the second quarter.
“Dedicated missions for small satellites continue to experience strong demand, which we have seen in multiple buys by returning customers and constellation operators. We have booked out Electron launches next year completely,” Beck told investors on Wednesday. “We see the market for the Electron product being very strong and this manifest validates that. Frequent launch opportunities, flexibility over schedule and control over orbiter deployment are what our customers are looking for and that’s what Electron has been providing and will continue to provide in the new year.”
Rocket Lab expects revenue in the fourth quarter between $65 million and $69 million, which would mean full year 2023 revenue will be between $249.6 million and $253.6 million.
Rocket Lab ended the third quarter with $582.4 million of total backlog, with launch backlog of $260.7 million and Space Systems backlog of $331.7 million. Total backlog was up 9% sequentially due to strong launch bookings, partially offset by declines in Space Systems.
“Reflecting in the past four quarters, we have made meaningful progress towards our long-term financial model. We have delivered consistent revenue growth. And when adjusting for the one-time release of a loss reserve in Q2, gross margin expansion and shrinking adjusted EBITDA losses each quarter,” CFO Adam Spice told investors.
“With our strong launch manifest and greater contribution from Space Systems contract execution in 2024 we expect this trend to continue,” Spice added. “Overall, we expect gross margin trends will continue to improve over time, thanks to the same factors that have helped drive improvement we’ve seen this year.”