Rocket Lab: “We must match SpaceX’s business model”
March 13, 2024
Rocket Lab launches rockets from either its dedicated site in New Zealand (44 launches) or Virginia’s Wallops Island. Founded 17 years ago in Auckland, New Zealand by Peter Beck it now has its HQ in Long Beach, and is publicly traded on the NASDAQ exchange. The company says it is targeting SpaceX and wants to replicate the Elon Musk business model.
CEO Peter Beck, in his company’s post-results earnings discussion with analysts, said it was not possible to compete with SpaceX if rockets and satellites were outsourced to other sub-contractors. Rocket Lab needed to become a totally integrated in-house manufacturer of rockets and satellites, as Musk had done.
“The large companies of the future are not going to be just a satellite manufacturer or just a launch-vehicle provider. If you can do everything end to end, then you can optimise not only the launch, but also the spacecraft for the service and all the other elements that go into the compromises you have o make. That’s what we’re setting ourselves up to be. The real-life example of that is Starlink. It’s very difficult to compete with that unless you have your own ability to manufacture satellites, using your own components, and your own ability to launch those satellites,” said Beck.
Beck said that rocket launching was a relatively small business, with satellite and space-related manufacturing businesses about twice as valuable, while the services side was ten-times larger.
He told analysts that the company was in a transition period and would need several years to make the changes necessary. Step One was to get its part-reusable Neutron rocket aloft in a planned debut flight later this year.
Rocket Lab went public in 2021 and achieved a value of $4.1 billion. At that time it had already launched 105 satellites into orbit. The company has various NASA contracts under its belt.
“What we have been doing is building all the infrastructure we need to provide a service,” said Beck. “What services? We are not ready to talk about that yet. But when we jump into that market, we will have a disruptive way of going in there and providing that service. We will be able to build whatever spacecraft we require using all our own components, and it will fly on our own rocket.”
Rocket Lab grew its contracted backlog by 108 per cent last year to $1.04 billion, which comprised 76 per cent space systems and the balance launch activity. It is a major sub-contractor to MDA Space which is building 17 new satellites for Globalstar.
Rocket Lab is also building reaction wheels, a key component of satellites, and has a factory in New Zealand turning them out. CFO Adam Spice told analysts that it had a major order for reaction wheels from a “mega-constellation”. He did not specify the client but it is widely believed to be for Jeff Bezos’s Project Kuiper.
As to Rocket Lab’s current prospects Beck said that 2023 was a record year with 25 overall launch contracts and 18 for its Electron reusable launcher. It managed 10 launches last year. Revenue last year was $244.6 million (up 16 per cent).
On March 12th it successfully launched a radar-imaging satellite for a Japanese client and marking its 45th launch.
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