Erik Rasmussen

Erik Rasmussen questioned the impact of Neutron's latest push-out on the timing for NSSL contracts and other potential programs. He also asked about the traction and expansion in national security defense following the GEOS acquisition.

Answer

Peter Beck, Founder and CEO, Rocket Lab, stated that the Neutron push-out is largely irrelevant for NSSL awards, as they require a successful flight first and have not yet been made. He highlighted that the GEOS acquisition has significantly elevated Rocket Lab's standing in national security defense, providing new access and visibility within the intelligence community and positioning them as a payload provider for detailed mission discussions.

Erik Rasmussen inquired about the timing and competitive positioning for the SDA Tranche 3 opportunity, the inclusion of Neutron in the backlog, the expected mix of Electron and Haste missions for the rest of the year, and whether the Neutron launch cadence could be accelerated.

Answer

CEO Sir Peter Beck noted the SDA Tranche 3 award is expected around September/October and that Rocket Lab is in a strong position. CFO Adam Spice added that three Neutron missions are already in backlog, with more expected after its first flight. He also projected about three Haste missions in the second half of the year. Beck confirmed they are sticking to the 1-3-5 launch cadence for Neutron, viewing it as an aggressive but proven scale-up plan based on past experience.

Erik Rasmussen asked for an update on the Mynaric deal closing, interest in the 'Photon Lite' spacecraft, the timeline for booking NSSL backlog, and the expected trend for Electron's average selling price (ASP).

Answer

CEO Peter Beck and CFO Adam Spice confirmed the Mynaric deal is progressing well, with the main remaining step being the German regulatory and bankruptcy court process. Beck noted strong interest in Photon Lite from constellation providers. For NSSL, task orders can be bid on after Neutron's first flight. Spice projected that Electron's ASP and cadence will progressively increase through 2025, hitting a high watermark in Q4, which is key to achieving target margins.

Erik Rasmussen from Stifel inquired about the production throughput for Flatellite, the achievability of the new Neutron timeline, Electron demand, and whether the Neutron schedule impacts NSSL eligibility.

Answer

CEO Sir Peter Beck stated Flatellite is designed for a throughput of several satellites per week and that existing facilities can support this scale. He described the Neutron timeline as aggressive but achievable and confirmed it does not affect NSSL on-ramp eligibility. CFO Adam Spice added that Electron demand remains strong, with diversification from HASTE missions.

Erik Rasmussen asked if the Neutron contract was a replacement for a competitor, sought confirmation on pricing and timing, and inquired about the full-year Electron launch forecast, NSSL on-ramp eligibility, and whether the new contract was in Q3 backlog.

Answer

CEO Peter Beck clarified that for commercial contracts they sometimes replace providers, while for NSSL they are a new alternative. He confirmed the Neutron contract pricing is in line with standard ASP and the 2026 timing was customer-driven. He also expressed confidence in meeting the 15-18 launch target for the year. CFO Adam Spice added that the new Neutron contract was signed after quarter-end and is therefore not included in the Q3 backlog.

Erik Rasmussen inquired about the expected sequential growth rates for the second half of 2025, the company's timeline for achieving positive adjusted EBITDA, and Spire's confidence in securing higher-value awards from NOAA. He also requested an update on the Thales opportunity.

Answer

CEO Theresa Condor expressed strong confidence in H2 growth, driven by government demand and recently launched satellites. CFO Ali Engel projected mid-to-high teen sequential growth rates for H2 and guided for breakeven adjusted EBITDA entering 2026. Regarding NOAA, Condor stated confidence in increased commercial data procurement, citing the agency's goal of 20,000 RO profiles daily. She also confirmed the Thales relationship is progressing well post-litigation.

Erik Rasmussen followed up on the weak Q4 forecast, asking if Q4 would represent the revenue low point and whether the company's long-term framework of 20%+ growth and 70%+ gross margins remains valid after the restatement.

Answer

Chairman Peter Platzer affirmed that a 20%+ growth trajectory is the correct long-term expectation. He suggested the business low point should be viewed in the context of the pending maritime transaction close. While the restatement reclassifies certain R&D costs to COGS, impacting the gross margin percentage, he stated the underlying trajectory for growth and margin improvement remains intact. He added that growth could even accelerate post-sale, as the divested maritime business had a slower growth profile.

Erik Rasmussen asked for clarity on the significant guidance change since the prior earnings call, questioned if 30%+ long-term revenue growth is still achievable, and inquired about the near-term and long-term gross margin outlook.

Answer

CEO Peter Platzer explained that the full impact of dynamic issues like solar activity and the propulsion underperformance became clearer over the quarter. He reaffirmed that 30%+ long-term growth is achievable due to strong secular trends. CFO Leo Basola added that the recent gross margin dip is a short-term effect of accelerated depreciation and that the long-term target remains 65-70% GAAP gross profit.

Erik Rasmussen asked for a breakdown of the headwinds affecting the 2025 growth guidance, the timeline for returning to positive adjusted EBITDA, and the performance of the recently launched satellites for OroraTech.

Answer

CEO Theresa Condor acknowledged that significant disruption from the restatement and the pending Maritime sale impacted H2 2024 and H1 2025 but expects a return to focused execution in the second half. Interim CFO Thomas Krywe declined to provide a specific timeline for positive adjusted EBITDA until the Maritime transaction closes but affirmed the underlying business fundamentals support a path to profitability. Regarding the OroraTech satellites, Condor stated they are proceeding through the normal and expected checkout and commissioning process.

Erik Rasmussen from Stifel asked about potential factors or risks that could derail the thesis of accelerating core FFO growth beyond 2025, despite the current business momentum.

Answer

CEO Andrew Power outlined that near-term execution hinges on continuing success in the 0-1 megawatt and interconnection segments, filling existing vacancy, and ensuring commercial terms are rewarding. He emphasized the need to effectively use the various funding tools to support the accelerating $4.5 billion gross CapEx plan, ensuring it flows to the bottom line as guided for 2025 and improves in 2026.

Inquired about Terran's performance on Space Development Agency (SDA) contracts, why they seem to be under-indexing on awards compared to peers, and their expectations for future awards. Also asked for clarification on the backlog conversion timeline, particularly the Rivada portion, and the revenue split between 2024 and 2025.

Answer

Management stated they were not surprised by the recent Alpha award outcome, as the SDA desires a diverse manufacturing base and Terran can't win everything. They are now bidding on other SDA programs and with other primes. Regarding the backlog, revenue recognition is pushed out as program timelines shift, with 2025 being more heavily weighted for assembly revenue. The Rivada delivery timeline is fixed by ITU regulations, so any delays will increase costs for Rivada, not change the ultimate deadline.