Rocket Lab USA, Inc. (RKLB)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $122.6m, up 32% year-over-year and near the top of guidance; non-GAAP gross margin was 33.4% and GAAP EPS was $(0.12), with Adjusted EBITDA loss better than guidance at $(30.0)m .
• Versus consensus, revenue modestly beat, EPS beat, while EBITDA missed due to higher Neutron R&D and lumpy cash receipts; management guided Q2 revenue to $130–$140m with margin expansion, implying sequential growth and improving launch ASPs .
• Strategic wins: Neutron on-ramped to DoD’s $5.6B NSSL Phase 3 Lane 1 (with a $5m task order), AFRL point-to-point Neutron mission, and intent to acquire Mynaric to scale laser terminals and expand in Europe .
• Near-term stock catalysts: Q2 execution and margin expansion, Electron cadence and ASP improvement, Neutron program milestones (LC3 activation, Archimedes testing), and closure/progress on Mynaric acquisition process .

What Went Well and What Went Wrong

What Went Well

• Neutron on-ramped to NSSL Phase 3 Lane 1; received $5m task order for mission assurance, validating capability and opening medium-lift national security opportunities .
• Strong launch cadence: 5 Electron missions in Q1 with 100% success; demand for >20 launches in 2025; Q2 expected ASP and cadence improvement .
• Non-GAAP gross margin (33.4%) and Adjusted EBITDA loss ($(30.0)m) both better than guidance; revenue near top of range .

Management quote: “Rocket Lab has delivered a strong first quarter performance… near-record $123 million revenue – at the top end of our guidance…” — Peter Beck .

What Went Wrong

• Higher Neutron R&D and prototype spend drove sequentially higher operating expenses and elevated negative free cash flow (negative $82.9m non-GAAP FCF), with expectation of continued elevated FCF use until Neutron’s first launch .
• Launch margins dipped on lower ASP mix and fixed cost absorption; cadence and ASP variability impacted GAAP launch margin in Q1 .
• EBITDA tracked weaker than consensus due to increased Neutron investment and timing of cash receipts/disbursements .

Financial Results

Consolidated P&L and Profitability (GAAP and Non-GAAP)

Segment Breakdown (Q1 2025)

KPIs and Operating Metrics

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We continue to launch and book more and more Electron missions… As Neutron [moves] closer to the pad, we also get closer to having a [13-ton] reusable launch vehicle… while also generating revenue through missions we fly for our national security and commercial customers.” — Peter Beck .
• “GAAP gross margin for the first quarter was 28.8%, above our prior guidance… Non-GAAP gross margin… 33.4%… We ended Q1 with… backlog of $1.067 billion.” — Adam Spice .
• “Our selection to [NSSL] is a huge vote of confidence by the Pentagon and Neutron… Once we’re clear of Neutron’s first launch, we’ll be bidding for task orders under the Phase 3 [Lane 1] program…” — Peter Beck .
• “We intend to establish a holding company structure… Rocket Lab Corporation… to better manage risks and liabilities and support further growth… Trading is expected to continue uninterrupted.” — Press release .

Q&A Highlights

• Launch margins and ASP variability: fixed-cost absorption and ASP mix drove Q1 variability; expect ASP and cadence step-ups through Q4, targeting launch margins “in the 40s” at cadence ~2/month .
• Free cash flow cadence: elevated negative non-GAAP FCF expected in Q2 and second half until Neutron’s first flight; investments include recovery barge and long-lead Neutron items .
• Mynaric rationale: primary issue is production scale; Rocket Lab expects margin progression consistent with subsystems portfolio and aims to scale terminals for SDA and other programs; regulatory process ongoing in Germany .
• Electron reusability: paused to redeploy talent to Neutron given higher ROI; focus on Neutron reusability and cadence .
• Tariffs/macro: limited exposure due to NZ launch operations and high U.S. content in Space Systems components .

Estimates Context

Values with asterisks were retrieved from S&P Global.

Implications: Revenue and EPS beats reflect stronger Space Systems mix and cost absorption; EBITDA miss mirrors higher Neutron R&D and timing of receipts/disbursements discussed on the call .

Key Takeaways for Investors

• Q1 delivered revenue and margin outperformance vs guidance with a clean top-line beat vs consensus; EPS beat supports near-term sentiment .
• Q2 guide implies double-digit sequential growth and margin expansion on improving Electron ASPs and overhead absorption; monitor cadence and ASP realization — a key driver for stock .
• Strategic validation via NSSL on-ramp and AFRL point-to-point Neutron mission expands medium-lift national security optionality post first flight; backlog should inflect as task orders open .
• Near-term cash burn elevated by Neutron investments and long-lead procurement; liquidity strengthened by ATM proceeds; expect FCF moderation post first Neutron launch .
• Mynaric acquisition intent adds European footprint and laser terminal scale critical to SDA and future constellations; regulatory closure is a watch item and potential medium-term margin accretion .
• Corporate reorganization into Rocket Lab Corporation should improve ability to pursue classified programs and streamline growth via M&A — strategically positive .
• Trading setup: catalysts in Q2 print (ASP/margin), Electron cadence progression, Neutron milestones (LC3 activation, engine tests), and Mynaric process updates; risk is timing of Neutron first launch and continued FCF usage .

Appendix: Additional Relevant Q1 2025 Press Releases

• Intent to acquire Mynaric (laser communications) for ~$75m initial purchase price to scale production and establish EU footprint in Munich; supports SDA program and constellation ambitions .
• AFRL point-to-point Neutron mission selection (return-to-Earth, no earlier than 2026) .

Document Cross-References

• Q1 2025 8-K 2.02 and press release details (financials, guidance, corporate structure) .
• Q1 2025 earnings call transcript (segments, margins, backlog, cash flow, strategy) .
• Prior quarters: Q4 2024 press release (record revenue, Q1 2025 guidance) ; Q3 2024 press release (revenue, ASP commentary, NSSL positioning) .