Rocket Lab earnings foretell a future with more satellites in orbit

Rocket Lab released its Q1 2023 earnings, posting higher revenue and losses following a series of successful launches.
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Hannah Minn

· 4 min read

Despite recent high-profile launch failures from companies including SpaceX, Relativity Space, and Virgin Orbit, the space business is booming.

Rocket Lab, a Long Beach, California-based satellite launch service specializing in delivering satellites to space through its Electron rockets, released its Q1 2023 earnings, offering a window into the satellite launch market.

Rocket Lab’s current focus is on bringing satellites into precise orbits through dedicated or rideshare launches, which lends itself to more specialized operations. The company operates out of spaceports in New Zealand and Virginia.

Revenue grew about 35% to $54.9 million in Q1 2023 from $40.7 million at the same time last year due to a faster launch cadence and higher average launch price, Rocket Lab CFO Adam Spice said on the company’s earnings call. However, losses also increased to $45.6 million this quarter from $26.7 million in Q1 2022, which the company said was due to increases in R&D costs for its upcoming Neutron rocket and Photon spacecraft.

Rocket Lab’s launch services business brought in $19.6 million in revenue in Q1 2023, off the back of three successful launches with BlackSky, HawkEye 360, and Capella Space. Capella Space entered into an agreement with Rocket Lab in February for four launches of its synthetic aperture radar Acadia satellite.

Rocket Lab’s space systems business, which manufactures components in spacecraft for defense, civil, and commercial customers, brought in $35.3 million in Q1 2023 revenue, slightly exceeding expectations.

“At a time when we’re starting to see a contraction of available small rockets, we’re also seeing an increase in launch bookings for Electron launches in 2023 and beyond from new and returning customers across government and commercial sectors,” Rocket Lab founder and CEO Peter Beck said in a statement.

Rocket Lab continues to invest in its medium-sized Neutron rocket, which is scheduled to launch in 2024 and is “designed for mega constellation deployment, deep-space missions, and human spaceflight.”

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Beck said on the earnings call that small launches are a “nice little niche market, and Electron will probably continue to do well there,” but called the medium and large launch market “a very different environment.”

In January, the company completed its first launch from Virginia Space’s Mid-Atlantic Regional Spaceport, deploying three satellites for HawkEye 360. In May, Rocket Lab launched the first batch of satellites that will monitor and track tropical storms for NASA.

In conjunction with its earnings, Rocket Lab announced it completed the first of four custom-built Photon spacecraft for Varda Space Industries to manufacture pharmaceutical products in space for use on Earth.

“Opening access to space is about much more than launch for Rocket Lab. It’s about making it easier to put the ideas of tomorrow in orbit today, enabling innovation, rapid iteration, and new capabilities that will improve lives back on Earth,” Beck said in a statement on the Varda launch.

Rocket Lab also announced it secured a launch deal with NASA’s multi-CubeSat Starling mission, which will test autonomous coordination of multiple satellites for operations like “in-space network communications, onboard relative navigation between spacecraft, autonomous maneuver planning and execution, and distributed science autonomy.”

Rocket Lab’s increased cadence in 2023 is just one part of a larger industry trend toward more rockets and more satellites. As constellations expand their presence in space, more rockets will be launched to keep up with demand.

Deloitte predicts 2023 will end with more than 5,000 broadband satellites in low-Earth orbit. If every constellation currently in planning works out, that number could skyrocket to as many as 50,000 satellites by 2030, per Deloitte.

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