February 28, 2024
An illustration of Rocket Lab’s Neutron rocket.
Credit: Rocket Lab
WASHINGTON — Rocket Lab says it could launch its first Neutron rocket before the end of the year as it outlines a long-term vision for the company that involves its own satellite constellation.
In a Feb. 27 earnings call to discuss the company’s fourth quarter and 2023 financial results, Rocket Lab executives said development of its Neutron medium-lift reusable rocket was on schedule and budget, with a goal of a first launch before the end of the year.
“Right now, we have a schedule that closes for a launch by the end of the year,” Peter Beck, chief executive of Rocket Lab, said of Neutron. “But, we’ve got a lot of testing to get through.”
In the call, he outlined the progress the company was making on various components of Neutron, such as avionics and structures, as well as construction of Neutron’s launch pad, Launch Complex 3 on Wallops Island, Virginia. However, the company has yet to start hot-fire tests of the Archimedes engine that will power Neutron.
Beck said Rocket Lab was completing a test stand for Archimedes at NASA’s Stennis Space Center in Mississippi, allowing it “to support an engine by the end of March,” but did not disclose when the company expected to start firing the engine on the stand.
Those tests, when they do begin, will provide some clarity on the schedule for Neutron. “We’ll know more about how close to the schedule and timeline we are once Archimedes breathes fire and we complete a couple of other major tests,” Beck said.
An industry source, speaking on background, described a schedule of less than nine months from first engine hot-fire to first launch as “exceedingly optimistic,” citing development timelines for other vehicle programs where it can take years from first engine test to first launch. Later in the call, Adam Spice, Rocket Lab’s chief financial officer, acknowledged a Neutron launch by the end of the year was a “green-light schedule” where there are no problems in the vehicle’s development.
One reason the company is pushing to get Neutron launched before the end of the year is to ensure that it can be eligible for the first Lane 1 awards under the U.S. Space Force’s National Security Space Launch Phase 3 contracts.
“Why we’re pushing so hard to get a vehicle launched this year is that that is a gating onramp to Lane 1,” he said, adding there will be additional onramps in subsequent years. “This is the reason why so many engineers are sleeping under their desks at the moment, to just push so hard to try to get that vehicle to the pad.”
Completing Neutron will also allow the company to reduce its capital expenditures and move towards profitability. Spice said the company estimated in 2021 spending $250 million to $300 million on Neutron and having it ready in 2024. “We are remarkably intact on the estimates we put in place at the time,” he said.
The company reported an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss of $29 million for the fourth quarter and nearly $91 million for 2023, but capital expenditures will drop off once Neutron is compete, he said. “Not too long after that, we really should be in the phase of where we could be looking down the line of sight to adjusted EBITDA positivity,” Spice said.
Constellation vision
The company used the earnings report to also announce a new lineup of spacecraft buses. The company had previously developed several different kinds, all under the Photon name, but is now offering four distinct vehicles:Photon, the original bus designed for small spacecraft missions in low Earth orbit;
Lightning, a larger bus based on the ones it is developing for Globalstar and the Space Development Agency;
WASHINGTON — Rocket Lab says it could launch its first Neutron rocket before the end of the year as it outlines a long-term vision for the company that involves its own satellite constellation.
In a Feb. 27 earnings call to discuss the company’s fourth quarter and 2023 financial results, Rocket Lab executives said development of its Neutron medium-lift reusable rocket was on schedule and budget, with a goal of a first launch before the end of the year.
“Right now, we have a schedule that closes for a launch by the end of the year,” Peter Beck, chief executive of Rocket Lab, said of Neutron. “But, we’ve got a lot of testing to get through.”
In the call, he outlined the progress the company was making on various components of Neutron, such as avionics and structures, as well as construction of Neutron’s launch pad, Launch Complex 3 on Wallops Island, Virginia. However, the company has yet to start hot-fire tests of the Archimedes engine that will power Neutron.
Beck said Rocket Lab was completing a test stand for Archimedes at NASA’s Stennis Space Center in Mississippi, allowing it “to support an engine by the end of March,” but did not disclose when the company expected to start firing the engine on the stand.
Those tests, when they do begin, will provide some clarity on the schedule for Neutron. “We’ll know more about how close to the schedule and timeline we are once Archimedes breathes fire and we complete a couple of other major tests,” Beck said.
An industry source, speaking on background, described a schedule of less than nine months from first engine hot-fire to first launch as “exceedingly optimistic,” citing development timelines for other vehicle programs where it can take years from first engine test to first launch. Later in the call, Adam Spice, Rocket Lab’s chief financial officer, acknowledged a Neutron launch by the end of the year was a “green-light schedule” where there are no problems in the vehicle’s development.
One reason the company is pushing to get Neutron launched before the end of the year is to ensure that it can be eligible for the first Lane 1 awards under the U.S. Space Force’s National Security Space Launch Phase 3 contracts.
“Why we’re pushing so hard to get a vehicle launched this year is that that is a gating onramp to Lane 1,” he said, adding there will be additional onramps in subsequent years. “This is the reason why so many engineers are sleeping under their desks at the moment, to just push so hard to try to get that vehicle to the pad.”
Completing Neutron will also allow the company to reduce its capital expenditures and move towards profitability. Spice said the company estimated in 2021 spending $250 million to $300 million on Neutron and having it ready in 2024. “We are remarkably intact on the estimates we put in place at the time,” he said.
The company reported an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss of $29 million for the fourth quarter and nearly $91 million for 2023, but capital expenditures will drop off once Neutron is compete, he said. “Not too long after that, we really should be in the phase of where we could be looking down the line of sight to adjusted EBITDA positivity,” Spice said.
Constellation vision
The company used the earnings report to also announce a new lineup of spacecraft buses. The company had previously developed several different kinds, all under the Photon name, but is now offering four distinct vehicles:Photon, the original bus designed for small spacecraft missions in low Earth orbit;
Lightning, a larger bus based on the ones it is developing for Globalstar and the Space Development Agency;
Pioneer, a spacecraft with greater performance for “unique mission profiles,” like the recent Varda Space Industries space manufacturing mission; and
Explorer, a spacecraft with high delta-V for interplanetary missions, like the ESCAPADE Mars spacecraft Rocket Lab is development for NASA.
Beck said in the earnings call that the company has orders for all four classes of buses, with a backlog of more than 40 spacecraft overall.
However, in the call Beck took pains to emphasize a long-term vision for the company that goes beyond simply building and launching spacecraft to ultimately operating its own.
“The end goal here is not just to be a bus provider or even a prime, it’s to ultimately have our own constellation in orbit, providing services, because that’s where we ultimately think this all goes,” he said. “Everything we do is within that kind of vision.”
That is driven by the much larger total addressable market, or TAM, for space services. While launch has a TAM of $10 billion to $15 billion, he said, and satellites $20 billion to $30 billion, “services in space is a $320 billion TAM.”
That approach, he said, is driving the company’s investments in space systems and Neutron. “In part, the reason why we’re developing Neutron is so we have our own keys to space” for a future constellation, he said. “If you want to be competitive in there, then you have to own your own rocket and build your own satellites.”
He cited as an example SpaceX, which builds its own Starlink satellites and launches them on its own rockets. “It’s very difficult to compete with that unless you have your own ability to mass-manufacture satellites using your own components, and your own ability to launch those said satellites,” he said. “We’re just marching very methodically towards that, step after step.”
Beck declined to offer a timeline for Rocket Lab’s own constellation or even what services it would offer. “When we look to jump into that larger TAM, we’ll have a very disruptive way of going in there and executing and providing that service.”
First, though, was building the “foundations” of that future constellation, particularly Neutron. “Really, all focus is on Neutron. All efforts are on Neutron because Neutron is critical to execute that business model, but it’s also critical for other parts of the business,” he said. “Our strong focus is getting Neutron to the pad because, without Neutron on the pad, it makes it difficult to be hugely disruptive in the services market.”
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