The share price of Rocket Lab ($RKLB (-6,35%) ) has risen by over 300% (!) over the course of the year. The latest analyst conference provided exciting insights into whether this hype is justified or not.
Peter Beck, founder and CEO, started with a bang: 2024 was Rocket Lab's strongest year in terms of revenue, with record sales of record turnover of 436 million dollarswhich corresponds to an increase of 78% compared to the previous year. This success underlines the effectiveness of the strategy to offer comprehensive space services. Particularly impressive was the Q4 growth of 121% year-on-year. Beck emphasized that Rocket Lab is delivering on its promises and has achieved 382% revenue growth since going public in 2021.
In the "Startups" area, these figures were boosted by an increased number of Electron launches and the introduction of suborbital hypersonic test launch capabilities. In the "Space" segment, the continued strong execution in the construction and operation of spacecraft and constellations as well as the satellite components business contributed to this.
Key achievements in 2024 included:
- A record 16 launches with Electron and HASTE, all with 100% mission success.
- The position as the leading provider of small launches worldwide and the second most launched US rocket
- New orders worth over 450 million dollars, increasing the order backlog to over 1 billion dollars.
- Significant progress in the construction of over 40 spacecraft, in particular the manufacture and testing of the twin spacecraft for NASA's ESCAPADE mission to Mars.
The strategic focus for 2025 is on building a complete space company. This means owning the entire value chain, from launching and operating satellites in orbit to providing data and services from space with its own constellation. 2025 is set to be the year of the Neutron in order to eliminate the bottleneck in medium-sized launches. It is expected that more than an estimated 10,000 constellation spacecraft will need to be deployed over the next ten years. Rocket Lab plans to increase its cadence of small launches with over 20 missions in 2025. It was highlighted that Rocket Lab is the only provider with planned missions in the small, medium and hypersonic launch sectors.
In the area of space systems, there are over 40 spacecraft in various stages of production. By the end of the summer, there should be four times as many Rocket Lab spacecraft in orbit, ready for launch or having completed their missions. Flatellite, a new low-cost, mass-produced satellite for large constellations, was also unveiled.
One analyst asked about the schedule for Neutronas there was previously talk of mid-2025, but now the second half of the year. Peter Beck explained that they are taking a little more time, but it is only a matter of months. When asked what would be defined as success for the first launch, Beck replied that reaching orbit is the goal.
Another analyst asked about the confidence in relation to the launch this year and how the sales mix between Space Systems and Launch Systems will shift in 2026. Peter Beck replied that there are currently no major events that would cause concern. Adam Spice added that growth in the Electron business will continue, but Neutron will have a significant impact. He expects remixing, with launches increasing as a proportion of the overall mix, but aiming for a ratio of 2/3 Space Systems to 1/3 launches in the long term.
One analyst asked about the Neutron costs and whether these would fall with the first launch. Adam Spice explained that the first test launch is an R&D activity and reusability is the key to reducing costs. Peter Beck added that Neutron is designed so that most of the cost is in the first stage as this is reused.
Regarding the new Flatellite product was asked about the cost benefits. Peter Beck emphasized that speed and cost are key and that Rocket Lab's vertical integration offers a major advantage.
One analyst asked about the limitations of the payload of Flatellite, particularly in the field of earth observation. Peter Beck explained that the flat structure is not suitable for large optical apertures, but there is flexibility in extending the payload through depth and array sizes.
In terms of R&D expenditure and the number of employees associated with Neutron, it was asked whether these could be reduced after the initial launch. Adam Spice explained that R&D spend will reduce but many employees will move into production. Prototyping costs will also decrease significantly.
With regard to Electron's long-term launch prospects was asked if the goal is to maximize launch capacity with over 100 launches per year. Peter Beck replied that as many as possible is the goal, but market demand is the deciding factor. More Electrons are being sold every year.
When asked about tariffs and the potential impact on fixed-price contracts, Adam Spice replied that Rocket Lab does not expect a significant impact as most of the activity is between the US and New Zealand.
To summarize, Rocket Lab has had an impressive year and has ambitious plans for the future. The focus is on expanding launch capabilities with Neutron, expanding the range of space systems and building capabilities for space applications.
The company appears to be well positioned to capitalize on the growing opportunities in the space industry.
