RocketLab ($RKLB) – INVESTMENT FLASH UPDATE POST Q2 2024 EARNINGS CONFERENCE CALL
NEUTRON ENGINE IGNITES, BACKLOG TOPS $1B—TURNAROUND TO CASH‐BREAKEVEN NOW A 12-MONTH LINE OF SIGHT
WHAT’S NEW — CHANGE LOG
– First full-power (102 %) Archimedes hot-fire completed; moves Neutron from design to qual phase.
– Electron billing cadence, ASP and cash-flow cycle disclosed in detail, debunking revenue-lumpiness concerns.
KEY DELTAS BOX
∆ Launch cadence – 9 launches YTD; Q3 guide 3; Q4 potential 4-7 (call).
∆ Backlog – +$51 m seq to $1.07 bn; launch backlog +36 % q/q on 10-mission Sensepective deal.
∆ Pricing – Electron ASP confirmed $8.2 m vs $7.5 m prior guide; 60 % above 2019 (call).
∆ Margin – Q2 non-GAAP GM 30.7 % (+110 bp seq); reiterates 45-50 % target at 2/mo cadence, now “without re-use”.
∆ Cash runway – Op cash burn $13 m; FCF -$28 m (steady); liquidity $547 m vs $546 m Q1.
∆ Guide – Q3 rev $100-105 m (-3 % seq); adj. EBITDA -$31-33 m vs -$21 m in Q2.
QUICK MODEL REVISIONS (CY-24e)
Revenue: Old $505 m → New $515 m (Street $495 m)
Gross Margin: Old 29.5 % → 31.0 % (Street 29 %)
Adj. EBITDA: Old -$100 m → -$88 m (Street -$108 m)
Improved ASPs and mix outweigh higher Neutron OpEx.
TAPE CHECK
RKLB +5 % since print vs Space Tech peers +1 %; ARKX +0.3 %. 1-wk straddle implied ±7 %, stock through ~70 % of move.
SESSION QUICK-TAKES
COMPETITIVE EDGE ASSESSMENT
Neutron’s staged-combustion success shrinks technology gap to Falcon 9 while Rocket Lab’s composites/AFP line in Baltimore locks structural cost curve lower than legacy metal tanks. Electron’s ultra-precision 8 m orbit insertion (vs. 1.5 km norm) widens DoD appeal for responsive space and RPO missions. 10-launch Sensepective renewal shows switching costs rising; 72 % repeat-customer stat reiterated. SolAero CHIPS funding de-risks solar-cell cost base and adds 100 heads, enhancing vertical-integration moat. No peer offers launch + bus + components at this scale—barriers stiffen.
CATALYST MAP
🆕 Archimedes full-duration qual series — Aug & Sept.
🆕 AFP machine commissioning, Middle River — Oct-24.
Electron “Owl Night” launch — 17 Jun (margin prove-out).
Neutron stage-2 separation test — 4Q-24.
NSSL Phase 3 Lane-1 bid submission — 3Q-24.
Neutron orbital debut — mid-CY25 (no slip).
SDA T2-Beta PDR completion — 1Q-25.
BEAR COUNTERPOINTS & REBUTTAL
“Q3 revenue dips—growth stalling.” → Mix-driven; Q4 rebound to record launches guided; backlog up despite $106 m burn.
“Neutron capex will blow past $300 m.” → $200 m spent; pad & AFP funded; liquidity covers >24 mths even at elevated burn.
“Electron TAM tapped out at 20/yr.” → Licence 128/yr; factory for 50; demand constrained by Falcon slots, not market size.
ACTIONABLE TAKEAWAY
Add +10 bps exposure (total 70 bps) on heightened conviction Neutron schedule & unit economics; accumulate ≤$5. Stop-loss: slip in Archimedes qual past Feb-25 or FY-24 launches <15. Upside trigger: first Neutron customer contract >$100 m.
Disclaimer
This commentary is for informational purposes only and reflects the author’s opinions as of the publication date. It does not constitute investment advice, an offer, or a solicitation to buy or sell any security. The analysis relies on public information believed to be reliable, but accuracy is not guaranteed. Forward-looking statements involve risks, assumptions, and uncertainties that may change without notice. The author and affiliated accounts may hold positions in securities mentioned. Perform your own due diligence or consult a licensed professional before making investment decisions. The author assumes no liability for actions taken based on this report.