Q4 2025 Rocket Lab USA Inc Earnings Call

February 26, 2026

Mode.

a brief question and answer session will follow the formal, presentation, instructions will be, given at that time,

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Morgan conton, vice president, marketing and Communications at Rocket lab. Thank you. You may begin.

Thank you. Hello and welcome to today's conference. Call to discuss rocket lab's, fourth quarter and full year 2025 Financial results business highlights and other updates.

Before we begin the call, I'd like to remind you, that our remarks may contain forward-looking statements that relate to the Future performance of the company. And these statements are intended to qualify for the Safe Harbor protection from liability established by the private Securities. Litigation Reform, Act. Any such statements are not guarantees of future performance and factors that could influence our results are highlighted in today's press release and others are contained in our filings with the Security and Exchange Commission.

Such statements are based upon information available to the company as of the date Heroes and our subject to change for future developments.

Except as required by law. The company does not undertake any obligation to update these statements.

Our remarks and press release today. Uh, also contain non-gaap Financial measures within the meaning of Regulation, G enacted by the SEC.

Included in such release and are supplemental. Materials are reconciliations of these historical non-gaap Financial measures to the comparable Financial measures calculated in accordance with gaap.

This call is also being webcast with a supporting presentation and a replay and copy of the presentation will be available on our website.

Our speakers today are rocket, lab, founder, and chief executive, sir, Peter Beck as well as Chief Financial Officer, Adam spice.

They will be discussing key business highlights, including updates on our launch and Space Systems programs.

We will discuss financial highlights and outlook before we finish by taking questions. So with that, let me turn the call over to Sir Peter.

Thanks very much Morgan. Um, so I'm going to start today by stealing uh, some of Adam's Thunder and sharing some of their financial high-ups highlights up front. We had a new, a new annual revenue record in 2025, coming in at 62 million, which represents 38% growth year on year compared with 2024.

We also had a record quarter in Q4 with Revenue, coming up at 180 million, which was up 36% from Q4 last year.

At the end of Q4, our backlog, sat at a record 1.85 billion, which is up 73% from the same time in 2024. And finally we also achieved record gross margins in Q4 at 38% Gap and 44% non-gaap.

You tend to say and launch day, that's greens all across the board and a great result. Uh it comes down to 1 thing and it's simply Relentless execution from the rocket lab team across our launch and Space Systems programs.

Here are some highlights from that execution. I won't labor in these now as we'll go into more detail uh in the up and-coming slides. But ultimately we launched and signed a record number of electron missions. Uh and led the way on hypersonics testing with haste and achieved some significant qualification and development. Milestones on Neutron

On the Space Systems front, we were awarded the largest contract in rocket Labs history, uh, successfully delivered, the Escapade Mission to Mars for NASA. And we had uh, record growth across all of our Space Systems component, businesses,

On Acquisitions. We welcome to just in 2025 which officially marked their entrance into payloads and followed this up in q1 2026 with the acquisition of optical support Inc. Uh, which further strengthens our Optical systems offering we also expanded our machining and manufacturing footprint, with the acquisition of precision components limited, uh, which actually just closed today and uh, we'll ultimately support continued scaling of the components Manufacturing.

For both launch and Space Systems more on these in the slides ahead.

So on to some quick highlight highlights for electron and haste um rocket lab Remains the small launch leader globally and the only rocket delivering reliable and high Cadence launch opportunities for small sets.

Uh we launched 21 missions across electron and haste in 2025, which was a new company record. We also launched 7 missions in Q4, our highest number of launches in the single quarter today.

Meanwhile, there were no successful orbital launches of a new us or european small launch vehicle in 2025 at all.

And it's very clear when small set operators. Need a dedicated Ride Tool but they come to Rocket lab and we're proud to hold the title and look forward to expanding it again. Uh, the record again, even this further this year,

Lab is the only credible provider that has demonstrated the ability to deliver this capability right now not years into the future.

In 2025, we conducted 3 successful haste missions and the next 1 is on the pad and Virginia now just days away from launch.

This kind of cadence and reliability positions as well for programs like golden dome, uh, with more haste missions on the books. This year will be rapidly building that moat even further.

With a record year for launching missions. But also for signing them. Um we added more than 30 new launches to the Manifest across electron and haste, they came from a nice nicely, Diversified customer base spanning the US, uh, netsec and defense commercial constellations and international organizations.

we had many returning, customers sign, new contracts, often for bulk buyers and multiple launches, but also added new names, too, which demonstrates that our small launch customer base continues to expand

In Q4 alone, we signed a new multi launch deal with black sky for 4 new launches, which brings the total number of missions. They've booked with us to 17, we also signed a contract with a new confidential customer in support of National Security.

As always our pipeline for electron and haste remains strong, and we're excited to continue uh, signing new and novel missions, as well as uh, a standard repeat and Mission profiles in 2026.

Now, on to Space Systems, uh, rocket leader is not new to being a prime contractor, but in Q4 we made an announcement that highlights our substantial growth in Satellite, uh, and acetylate market. And further cement our position as a preferred disruptive Prime.

The space development agency or SDA, awarded us an 816 million contract to build an advanced constellation of 18 spacecraft equipped with Advanced missile warning tracking, uh, and defense sensors to provide Global and persistent detection in tracking of emerging, uh, emerging missile threats.

Peter Beck: a standard repeat in mission profiles in 2026. Now on to space systems. Rocket Lab is not new to being a prime contractor, but in Q4, we made an announcement that highlights their substantial growth in satellite, in the satellite market and further cements our position as a preferred disruptive prime. The Space Development Agency, or SDA, awarded us an $816 million contract to build an advanced constellation of 18 spacecraft, equipped with advanced missile warning, tracking, and defense sensors to provide global and persistent detection and tracking of emerging missile threats. It's the largest single contract in Rocket Lab's history.

Was uh, a standard repeat in Mission profiles in 2026.

It's the largest single contract in rocket Labs history. Uh, what's more as a leading Merchants supplier into the other trench 3 Prime contractors. Uh, there are additional subsystem opportunities that could, uh, total capture could add the total capture value to approximately 1 billion dollars for supplying payloads. Uh, solar power reaction wheels and star, trackers software and other solutions from our broad portfolio of capabilities.

It's important to point out that the acquisition of goes played a significant role in securing this award.

Now, on to Space Systems, uh, rocket ladder is not new to being a prime contractor, but in Q4 we made an announcement that highlights their substantial growth in Satellite, uh, the anesthetic market and further cement our position as a preferred disruptive Prime.

Rocket lab is the only commercial provider producing, both the spacecraft and payloads in-house for SDA. And for the tracking layer, tranche 3, uh supporting the government's goals for Speed resilience and affordability in space-based missile defense.

The space development agency or SDA, awarded us an 816 million dollar contract to build an advanced constellation of 18 spacecraft equipped with Advanced missile, warning tracking, uh, and defense sensors to provide Global and persistent detection, and tracking of emerging, uh, emerging missile threats.

Peter Beck: What's more, as a leading merchant supplier into the other Tranche 3 prime contractors, there are additional subsystem opportunities that could add a total capture value to approximately $1 billion for supplying payloads, solar power, reaction wheels, and star trackers, software, and other solutions from our broad portfolio of capabilities. It's important to point out that the acquisition of Geost played a significant role in securing this award. Rocket Lab is the only commercial provider producing both the spacecraft and payloads in-house for SDA and for the tracking layer Tranche 3, supporting the government's goals for speed, resilience, and affordability in space-based missile defense. This award follows on from our previous prime contract award for SDA's Transport Layer-Beta Tranche 2 program.

This award follows on from our previous Prime contract award for SDA, uh, sda's transport, layer beta tranche 2 program with the 2 Programs combined. We now have more than 1.3 billion in contract signs of, with SDA.

I think an important takeaway from this announcement is not just that we've won a significant contract. It's that rocket. Lab is repeatedly winning large awards. That have historically, been the exclusive Legacy exclusive to the the Legacy Aerospace Primes.

It's the largest single contract in rocket Labs history. Uh what's more as a leading Merchants supplier into the other trench 3 Prime contractors. Uh, there are additional subsystem opportunities that could, uh, total capture. It could add a total capture value to approximately 1 billion dollars for supplying payloads. Uh, solar power reaction wheels and star, trackers software and other solutions from our broad portfolio of capabilities.

It's important to point out that the acquisition of goes played a significant role in securing this award.

We're seeing a new world order established with defense in the defense world with the rise of companies like Andrew and palantir. Playing leading roles in disrupting, slow bloated traditional players rocket Labs clearly doing this in space and unseating the Old Guard.

Peter Beck: With the two programs combined, we now have more than $1.3 billion in contracts signed with the SDA. I think an important takeaway from this announcement is not just that we've won a significant contract, it's that Rocket Lab is repeatedly winning large awards that have historically been exclusive to the legacy aerospace primes. We're seeing a new world order established with defense, in the defense world, with the rise of companies like Anduril and Palantir, playing leading roles in disrupting slow, bloated, traditional players. Rocket Lab is clearly doing this in space and unseating the old guard. Okay, on to Mars. In Q4, the ESCAPADE mission launched, and the twin satellites we built for NASA and UC Berkeley are now well on their way to the Red Planet.

Okay. On to Mars, uh, in Q4 the Escapade Mission launched and, uh, the twin satellites, we built for Vanessa, and UC Berkeley are now well on their way to the red planet, uh, with Escapade. We've proved that it's possible to deliver a decade or class missions on a drastically. Shortened timelines, and for significantly smaller budgets than typical interplanetary missions.

We made this possible through vertical integration maintaining strict control over scheduling budget.

With both spacecraft now successfully commissioned and an ally to trajectory near L2. That's a l LR Point around 1.5 million km from Earth. Uh, rocket lab's, primary role, primary primary role in the mission will soon be complete when we hand it over to the team at UC Berkeley next month.

I think an important takeaway from this announcement is not just that we won a significant contract. It's that rocket lab has repeatedly winning large awards. That have historically, been the exclusive Legacy exclusive to the the Legacy Aerospace primes. We're seeing a new world order established with defense in the defense world with the rise of companies like Andrew and palantir. Playing leading roles in disrupting, slow bloated traditional players. Rocket lab is clearly doing this in space and unseating the Old Guard.

Even once control has been transferred, we'll be cheering blue and gold along as they arrive in Mars orbit, in September next year.

Peter Beck: With ESCAPADE, we've proved that it's possible to deliver decadal-class missions on a drastically shortened timelines and for significantly smaller budgets than typical interplanetary missions. We made this possible through vertical integration, maintaining strict control over schedule and budget. With both spacecraft now successfully commissioned and in a halo trajectory near L2, that's a Lagrange point, around 1.5 million kilometers from Earth, Rocket Lab's primary role in the mission will soon be complete when we hand it over to the team at UC Berkeley next month. Even once control has been transferred, we'll be cheering blue and gold along as they arrive in Mars' orbit in September 2025. Our role in ESCAPADE might have reached mission success, but we're not quite finished yet with Mars yet.

Our role in Escapade, might have reached Mission success but uh, we're not quite finished yet with Mars yet. Uh, We've made no secret of the fact that we think. Rocket lab is the strongest Contender to deliver NASA's Mars. Telecommunication orbiters, Pro Orbiter program.

Okay. On to Mars, uh, in Q4 the Escapade Mission launched and, uh, the twin satellites, we built for Vanessa, and UC Berkeley are now well on their way to the red planet, uh, with Escapade. We've proved that it's possible to deliver a decal class. Missions on a drastically. Shortened timelines and support significantly smaller budgets than typical interplanetary missions.

Uh, an MTO will be fundamental to everything else on Mars enabling science now and human exploration in the future. We'll make it possible with a rear combination of proven spacecraft, deep space mission experience, reliable rockets and end-to-end space systems capability as a vertically. Integrated Mission provider.

We made this possible through vertical integration, maintaining strict control over scheduling and budget, with both spacecraft now successfully commissioned and en route to a trajectory near L2. It's a Lagrange point around 1.5 million kilometers from Earth. Rocket Lab's primary role in the mission will soon be complete when we hand it over to the team at UC Berkeley next month.

Even once control has been transferred, we'll be sharing blue and gold along as they arrive in Mars orbit, in September next year.

And orbiting Mars than just about any other company today.

Peter Beck: We've made no secret of the fact that we think Rocket Lab is the strongest contender to deliver NASA's Mars Telecommunications Orbiters Orbiter program. An MTO will be fundamental to everything else on Mars, enabling science now and human exploration in the future. We'll make it possible with a rare combination of proven spacecraft, deep space mission experience, reliable rockets, and end-to-end space systems capability as a vertically integrated mission provider. Our hardware and our software has enabled some of the most ambitious and successful Mars missions in history, including the Mars InSight Lander, Perseverance Rover, Ingenuity Helicopter. Mars is in our DNA, and Rocket Lab has more hardware on and orbiting Mars than just about any other company today. Okay, onto programs.

Our role in Escapade might have reached mission success, but uh, we're not quite finished yet with Mars yet. Uh, we've made no secret of the fact that we think Rocket Lab is the strongest contender to deliver NASA's Mars telecommunication orbiters—Pro Orbiter program.

Okay, on to programs. Um, we had a key milestone for Locs set, which is uh, a launch plus spacecraft mission to build and deploy an on orbit. Cryogenic Fuel Depot for NASA. This spacecraft is now complete and will be marching steadily towards launch later this year.

Okay, we also have an exciting uh, development to share from our space uh, solar business. Um, it requires some background on, kind of the state-of-the-art space solar power, so bear with me, a little bit of on the 1.

Uh, an MTO will be fundamental to everything else on Mars, enabling science now and human exploration in the future. We'll make it possible with a rare combination of proven spacecraft, deep space mission experience, reliable rockets, and end-to-end space systems capability as a vertically integrated mission provider.

Uh the satellite industry is rapidly expanding and projected to grow 7 times by 2035.

Those satellites will all need solar power rocket lab is the world leader in solar space Power. Uh, so it should come as no surprise that we're the best position to serve this growing Market.

Our hardware and our software has enabled, some of the most ambitious, ambitious and successful, Mars missions in history, including the Mars Insight Lander press events Rover, Ingenuity helicopter. Mars is in their DNA and Rocket lab has more hardware and on on and orbiting Mars than just about any other company today.

Peter Beck: We hit a key milestone for LOXSAT, which is our launch plus spacecraft mission to build and deploy an on-orbit cryogenic fuel depot for NASA. This spacecraft is now complete and will be marching steadily towards launch later this year. Okay, we also have an exciting development to share from our space solar business. It requires some background on kind of the state of the art of space solar power, so bear with me a little bit of, on this one. The satellite industry is rapidly expanding and projected to grow 7 times by 2035. Those satellites will all need solar power. Rocket Lab is the world leader in solar space power, so it should come as no surprise that we're the best positioned to serve this growing market.

In an in addition, ambitious opportunities are on the horizon from space-based data centers as Ai and compute demand saw and data centers on Earth. Reach their limits. Companies are beginning to seriously, explore moving data centers to orbit, where they can take advantage of the cool conditions and infinite solar energy.

Okay, I want to programs. Um, we had a key milestone for Locs set, which is uh, a launch plus spacecraft mission to build and deploy an on orbit. Cryogenic Fuel Depot for NASA. This spacecraft is now complete and will be marching steadily towards launch later this year.

But, uh, rapid market growth of the size both uh for typical constellations and futuristic projects. Like space-based data centers will be hampered. If traditional solar cells are the only option

Okay, we also have an exciting uh, development to share from our space uh solar business. Um it requires some background on kind of the state-of-the-art of space solar power so bear with me a little bit on this 1. Uh the satellite industry is rapidly expanding and projected to grow 7 times by 2035.

So it's again, it's this backdrop that I'm proud to announce that rocket lab has introducing uh a space optimized silicon solar arrays. Uh well while silicon is not new in space it's always suffered from low radiation tolerance and very low life expectancy with poor performance.

Peter Beck: In addition, ambitious opportunities are on the horizon from space-based data centers. As AI and compute demands soar and data centers on Earth reach their limits, companies are beginning to seriously explore moving data centers to orbit, where they can take advantage of the cool conditions and infinite solar energy. Rapid market growth of this size, both for typical constellations and futuristic projects like space-based data centers, will be hampered if traditional solar cells are the only option. It's against this backdrop that I'm proud to announce that Rocket Lab is introducing a space-optimized silicon solar arrays. Well, while silicon is not new in space, it's always suffered from low radiation tolerance and very low life expectancy with poor performance.

Those satellites will all need solar power rocket lab is the world leader in solar space Power. Uh, so it should come as no surprise that we're the best position to serve this growing Market.

Our team of the experts in space solar having developed, some of the most complex cells for Flagship missions to the Sun and most of the missions on Mars today.

In in in addition, ambitious opportunities are on the horizon from space-based data centers as Ai and compute demand saw and data centers on Earth. Reach their limits. Companies are beginning to seriously, explore moving data centers to orbit, where they can take advantage of the cool conditions and infinite solar energy.

The team has produced a silicon array. That is a game-changer by harnessing silicon we're able to deliver a really low cost per watt at industrial scale enabling gigawatt class power generation in space at kilometer size scale using mass manufacturable lightweight and modular systems

Typical constellations and futuristic projects, like space-based data centers will be hampered. If traditional solar cells are the only option

We've also taken the additional step of developing a hybrid solar array solution that incorporates, both high efficiency cells and silicon cells.

an approach that levers, leverages the benefits of both technology, when size weight and power or performance are at a premium traditional high, efficiency, high efficiency, sales are enabling

So it's against this backdrop that I'm proud to announce that rocket lab is introducing uh a space optimized silicon solar arrays. Uh well while silicon is not new in space it's always suffered from low radiation tolerance and very low life expectancy with poor performance.

Peter Beck: Our team of experts in space solar, having developed some of the most complex cells for our flagship missions to the Sun and most of the missions on Mars today, the team has produced a silicon array that is a game changer. By harnessing silicon, we're able to deliver a really low cost per watt at industrial scale, enabling gigawatt-class power generation in space at kilometer size scale, using mass-manufacturable, lightweight, and modular systems. We've also taken the additional step of developing a hybrid solar array solution that incorporates both high-efficiency cells and silicon cells, an approach that leverages the benefits of both technologies. When size, weight, and power or performance are at a premium, traditional high-efficiency cells are enabling. When cost, schedule, or cost constellation scale are required, silicon cells can meet that demand.

When costs schedule or cost of constellation scale are required, silicon cells, can meet that demand.

Our team of experts in space solar has developed some of the most complex cells for flagship missions to the Sun and most of the missions on Mars today.

When these factors must be traded off and balanced hybrid arrays, enable a combination of the 2 to deliver an Optimal Performance at a compelling value.

The team has produced a silicon array. That is a game-changer by harnessing silicon. We're able to deliver a really low cost per watt at industrial scale enabling gigawatt class power generation and space at kilometer size scale using mass manufacturable lightweight and modular systems.

So, for new products, uh, we move into new acquisitions, um, on the top of the Acquisitions, no doubt, everybody is interested. In an update on Maric, uh, the German government is still working methodically through the regulatory view process. So there's not much to add at this stage while that sort of runs its course as expected, but we look forward to providing an update uh once that's concluded. Um there are a few stories floating around in the media with different theories on how the transaction is progressing. All as I'd say there is don't believe everything. You you read in the media and online.

we've also taken the additional step of developing a hybrid solar array solution that incorporates, both high efficiency cells and silicon cells, an app that levers leverages the benefits of both technology, when size weight and power or performance are at a premium traditional high, efficiency high efficiency cells are enabling

When costs schedule or cost of constellation scale are required, silicon cells, can meet that demand.

Peter Beck: When these factors must be traded off and balanced, hybrid arrays enable a combination of the two to deliver an optimal performance at a compelling value. For new products, we move into new acquisitions. On the top of the acquisitions, no doubt, everybody is interested in an update on Mynaric. The German government is still working methodically through the regulatory review process, so there's not much to add at this stage while that sort of runs its course as expected. We look forward to providing an update once that's concluded. There are a few stories floating around in the media with different theories on how the transaction is progressing. All as I'd say there is, don't believe everything you read in the media and online. Otherwise, this month, we have welcomed Optical Support, Inc.

Otherwise this month we have uh welcomed Optical support Inc to the rocket lab team. OSI is a Tucson based leader in the design and manufacturer of custom. High, Precision Optical and Electro. Optical mechanical instruments.

When these factors must be traded off and balanced hybrid arrays, enable a combination of the 2 to deliver an Optimal Performance at a compelling value.

Oversized. Technology is a key enabler for National Security. And Commercial satellites. They're a key subsystem in rocket labs payloads for space. Protection, space domain awareness, miss a warning and track and defense.

The vertical integration opportunities here are clear where we while we look forward to scaling production and capabilities to serve our customers and our own programs, as we've done with many of our other successful acquisitions.

And last but not least. Uh, We've also acquired Precision components Limited in New Zealand. Uh again a known and trusted Supply to us. That's now part of the family.

Peter Beck: to the Rocket Lab team. OSI is a Tucson-based leader in the design and manufacture of custom, high-precision, optical and electro-optical, mechanical instruments. OSI's technology is a key enabler for national security and commercial satellites. They're a key subsystem in Rocket Lab's payloads for space protection, space domain awareness, missile warning, and track and defense. The vertical integration opportunities here are clear, while we look forward to scaling production and capabilities to serve our customers and our own programs, as we've done with many of our other successful acquisitions. Last but not least, we've also acquired Precision Components Limited in New Zealand. Again, a known and trusted supplier to us that's now part of the family. With this acquisition, we've established a new precision machining complex that enables a huge increase in machining capacity.

With this acquisition, we've established a new uh, Precision Machining complex that enables uh a huge increase in in Machining capacity.

So I think it's worth spending, just a quick moment here on the Strategic importance of our recent Optical focused acquisitions.

Vertically, integrated high performance RF and Optical payload Technologies. Unlock high value opportunities for National Security and Commercial customers. They are key to unlocking programs, like gold and Dome and other proliferated mission architectures.

The vertical integration opportunities here are clear where we while we look forward to scaling production and capabilities to serve our customers and our own program, as we've done with many of our other successful acquisitions.

I went to the payload chain. Enables only the payload chain enables discriminating Performance Plus greater control over schedule cost for inspe for high volume constellations.

And last but not least. Uh, We've also acquired Precision components Limited in New Zealand. Uh again a known and trusted Supply to us. That's now part of the family.

We've already seen uh the strategy in the action with SDA trench 3 award and we expect to deliver more value and opportunities, uh, to us this year and Beyond.

With this acquisition, we've established a new Precision Machining complex that enables uh a huge increase in in Machining capacity.

Peter Beck: I think it's worth spending just a quick moment here on the strategic importance of our recent optical-focused acquisitions. Vertically integrated, high-performance RF and optical payload technologies unlock high-value opportunities for national security and commercial customers. They are key to unlocking programs like Golden Dome and other proliferated mission architectures. Owning the payload chain enables discriminating performance, plus greater control over schedule, cost for, and especially for high-volume constellations. We've already seen the strategy in action with SDA Tranche 3 award, and we expect to deliver more value and opportunities to us this year and beyond. We received another strong vote of confidence in our ability to deliver on critical national security and defense programs when we were recently selected by the NDA for Shield.

So I think it's worth spending, just a quick moment here on the Strategic importance of our recent Optical focused acquisitions.

National Security and defense programs. When we're a recently selected by the MDA uh for shield in short, we're now on boarded to the program, which has a contract values up to 151 billion, giving us the opportunity to compete for future launch and Space Systems. Contracts that are deliver these capabilities to the war fighter with increased agility.

Vertically, integrated high performance RF and Optical payload Technologies. Unlock high value opportunities for National Security and Commercial customers. They are key to unlocking programs, like golden dome, and the other proliferated mission architectures.

All of the above ultimately points to 1 Thing.

I went to the payload chain, enables only the payload chain enables discriminating Performance Plus greater control over scheduled cost for inspe for high volume constellations.

Rocket lab is a disrupt disruptive leader in building the future for space and defense. This was driven home by a recent visit to our facilities in Long Beach, by the Secretary of War Pete hesus during the re during the the Arsenal of Freedom tour

We've already seen uh the strategy in the action with SDA tranche 3 award and we expect to deliver more value and opportunities, uh, to us this year and Beyond.

The visit highlighted, the critical support, where we already delivered to the war fighter today and showcased our capability to meet ever, evolving needs in the future.

And last but not least uh before Adam digs into the financials. Uh, here's the latest on Neutron.

Peter Beck: In short, we're now onboarded to the program, which has a contract values up to $151 billion, giving us the opportunity to compete for future launch and space systems contracts that deliver these capabilities to the warfighter with increased agility. All of the above ultimately points to one thing: Rocket Lab is a disruptive leader in building the future for space and defense. This was driven home by a recent visit to our facilities in Long Beach by the Secretary of War, Pete Hegseth, during the Arsenal of Freedom tour. The visit highlighted the critical support we already deliver to the warfighter today and showcased our capability to meet ever-evolving needs in the future. Last but not least, before Adam digs into the financials, here's the latest on Neutron.

Uh, we've got lots of progress to share across Neutron but uh, I'll start with a topic on everyone's mind. I'm sure which is the stage 1 tank update.

In January, we shared that neutrons, uh, stage 1 tank had ruptured during a hydrostatic pressure test at, uh, Space Systems complex in Middle River.

Uh received another, we received another strong vote of confidence in our ability to deliver on on uh critical National Security and defense programs. When we're a recently selected by the MDA uh for shield in short, we're now on boarded to the program, which has a contract values up to 151 billion, giving us the opportunity to compete for future launch and space assistance. Contracts that are deliver these cases abilities to the war fighter with increased agility,

Now failures aren't uncommon during the qualification phase of any rocket development program. But I do want to point out, um, that this was unexpected and ultimately um, we had anticipated that this tank would Pass qualification.

All of the above ultimately points to 1 Thing. Rocket lab is a disrupt disruptive leader in building the future for space and defense. This was driven home by a recent visit to our facilities in Long Beach, by the secretary War Pete hesker during the during the the Arsenal of Freedom tour.

Now the tank did meet its anticipated flight loads, uh, but as we uh, prepared to open up uh, the test bounds and push the pressures, and loads Beyond this, to understand the margins and the structure, the tank, let go earlier than we expected.

Visit highlighted the critical support where we already delivered to the war fighter today and showcased our capability to meet ever, evolving needs in the future.

And last but not least before Adam digs into the financials. Uh, here's the latest on Neutron.

The post test review, process identified that a manufacturing defect introduced uh a reduction in the strength at a critical joint in the structure.

Peter Beck: We've got lots of progress to share across Neutron, but I'll start with a topic on everyone's mind, I'm sure, which is the stage one tank update. In January, we shared that Neutron's stage one tank had ruptured during a hydrostatic pressure test at Space Systems Complex in Middle River. Failures aren't uncommon during the qualification phase of any rocket development program, but I do wanna point out that this was unexpected, and ultimately, we had anticipated that this tank would pass qualification. The tank did meet its anticipated flight loads, but as we prepared to open up the test bounds and push the pressures and loads beyond this to understand the margins and the structure, the tank let go earlier than we expected.

Specifically around the, the tank close out, which is an autoclave produced part that interfaces with the bulk composite laminate of the tank and the Dome.

The review of the hardware and test data suggested that the tank otherwise performed as expected.

Uh, we've got lots of progress to share across Neutron but uh, I'll start with a topic on everyone's mind. I'm sure which is the stage 1 tank update in January, we shared that neutrons stage 1 tank had ruptured during a hydrostatic pressure test at uh, Space Systems complex in Middle River.

The first tank was hand laid by a third party contractor. While we're getting the automated fiber placement machine up and running. And uh it's in this hand, lay process that a defect was introduced.

Size of any rocket development program, but I do want to point out, um, that this was unexpected and ultimately, um, we had anticipated that this tank would Pass qualification.

Now, the decision to work with a third party, contractor was ultimately driven by schedule, as it would allow us to produce the first tank rapidly while simultaneously commissioning the AFP machine for future tank production.

Peter Beck: The post-test review process identified that a manufacturing defect introduced a reduction in the strength at a critical joint in the structure, specifically around the tank closeout, which is an autoclave-produced part that interfaces with the bulk composite laminate of the tank and the dome. The review of the hardware and test data suggested that the tank otherwise performed as expected. The first tank was hand-laid by a third-party contractor while we're getting the automated fiber placement machine up and running. It's in this hand-laid process that a defect was introduced. Now, the decision to work with a third-party contractor was ultimately driven by schedule, as it would allow us to produce the first tank rapidly while simultaneously commissioning the AFP machine for future tank production.

The post test review, process identified that a manufacturing defect introduced a reduction in the strength at a critical joint in the structure.

and now it's not uncommon for us to run parallel development paths like this to accelerate schedules and it can be a cost-effective way to iterate prototypes, and first articles, while also standing up long term production capability, uh, to enable fast scaling down the track,

Specifically around the, the tank close out, which is an autoclave produced part that interfaces with the bulk composite laminate of the tank and the Dome.

Now, the next tank is already in production. This time it's been built on the AFP machine. Uh, completely and eliminating the possibility of this hand defect reoccurring.

The review of the hardware and test data suggested that the tank otherwise performed as expected.

It's worth pointing out that Neutron. Second stage was largely. Uh, produced, uh, uh, was was entirely internally passed and qualification, sorry.

The first tank was Handmade by a third party contractor. While we're getting the automated fiber placement machine up and running. And uh it's in this hand, lay process that a defect was introduced.

Uh, it's worth pointing out that Neutron. Second stage was produced entirely and internally in past qualification comfortably.

Peter Beck: Now it's not uncommon for us to run parallel development paths like this to accelerate schedules, as it can be a cost-effective way to iterate prototypes and first articles, while also standing up long-term production capability to enable fast scaling down the track. Now, the next tank is already in production. This time, it's being built on the AFP machine, completely eliminating the possibility of this hand defect reoccurring. It's worth pointing out that Neutron's second stage was produced entirely and internally in passed qualification comfortably. Beyond changing the manufacturing process, we also are making some minor design changes to the first stage tank to introduce more margin and improve manufacturability.

Now, the decision to work for the third party contractor was ultimately driven by schedule, as it would allow us to produce the first tank rapidly while simultaneously commissioning the AFP machine for future tank production.

Beyond uh, changing the manufacturing process. We also uh, making some minor design changes to the first stage tank to introduce more margin and improved manufacturability.

To be clear. We're happy with the overall tank design. Uh, but since we're making a new 1, we thought we'd always take the opportunities to tweak things a little bit and optimize it.

And now it's not uncommon for us to run parallel development paths like this to accelerate schedules and that it can be a cost-effective way to iterate prototypes. And first articles while standing up long term production capability, uh, to enable fast scaling down the track,

Now the next tank is already in production. This time it's being built on the AFP machine. Uh, completely and eliminating the possibility of this hand defect recurring.

Once completed, uh, the new tank, uh, will undergo an extensive tests and qualification campaign to verify flight Readiness. And we're going to take your time with that process. Uh, the priority will always be to bringing a reliable rocket to Market, even if it means taking a few extra months,

It's worth pointing out that Neutron. Second stage was largely. Uh, produced, uh, uh, was was entirely internally passed and qualification, sorry.

Ultimately, the combination of the new tank and the production, uh, design tweaks. And, uh, the test and qualification qualification campaign, will adjust neutrons time, frame a little bit.

As such any neutrons first launch is now targeted for Q4 2026.

Uh, it's worth pointing out that Neutron. Second stage was produced entirely and internally in past qualification comfortably.

Neutron is still scheduled to come to Market in an incredibly aggressive time frame. And what's more? I will be bringing a robust and thoroughly tested vehicle to the pad.

Peter Beck: To be clear, we're happy with the overall tank design, but since we're making a new one, we thought we'd always take the opportunity to tweak things a little bit and optimize it. Once completed, the new tank will undergo an extensive test and qualification campaign to verify flight readiness. We're gonna take our time with that process. The priority will always be to bringing a reliable rocket to market, even if it means taking a few extra months. Ultimately, the combination of the new tank and the production, design tweaks and, the test and qualification campaign will adjust Neutron's timeframe a little bit. As such, Neutron's first launch is now targeted for Q4 2026. Neutron is still scheduled to come to market in an incredibly aggressive timeframe.

Beyond uh, changing the manufacturing process. We also uh, making some minor design changes to the first stage tank to introduce more margin and improved manufacturability.

Uh, we look forward to sharing more development progress as we run through the final development phases, this year.

Okay. So on to some milestones in the neutron program over the past quarter, you would have seen uh over the next few slides. Uh why I'm dubbing this the quarter of qualification

To be clear, we're happy with the overall tank design. Uh, but since we're making a new one, we thought we'd always take the opportunity to tweak things a little bit and optimize it. Once completed, uh, the new tank will undergo an extensive test application campaign to verify flight readiness, and we're going to take our time with that process. Uh, the priority will always be to bring a reliable rocket to market, even if it means taking a few extra months,

We've taken a massive strides in Q4, as well as q1, uh, so far successfully qualifying critical flight Hardware from large structures through to component level systems.

In Q4 the Hungry, Hippo fairing successfully passed qualification. And then on into q1 it made its way to wops.

Ultimately, the combination of the new tank and the production design tweaks. And, uh, the test and qualification qualification campaign, will adjust neutrons time, frame a little bit.

So, exciting time in Virginia, as Neutron flight, flight, Hardware starts arriving and we can get into the final assembly and integration and test phase.

As such any neutrons first launch is now targeted for Q4 2026.

Peter Beck: What's more, we'll be bringing a robust and thoroughly tested vehicle to the pad. We look forward to sharing more development progress as we run through the final development phases this year. Okay, on to some milestones in the Neutron program over the past quarter. You would have seen, over the next few slides, why I'm dubbing this the quarter of qualification. We've taken massive strides in Q4 as well as Q1 so far, successfully qualifying critical flight hardware from large structures through to component-level systems. In Q4, the Hungry Hippo fairing successfully passed qualification. Then on into Q1, it made its way to Wallops. It's an exciting time in Virginia as Neutron flight hardware starts arriving, and we can get into the final assembly and integration and test phase.

For the Hungry Hippos, specifically uh, that looks like fluid systems uh and installation of canards, and thermal Protection Systems. And then then of course, ending in testing,

Neutron is still scheduled to come to Market in an incredibly aggressive time frame. And what more will be bringing a robust and thoroughly tested vehicle to the pad.

We look forward to sharing more development progress as we run through the final development phases, this year.

For the next Neutron launch vehicle as well.

Okay. So on to some milestones in the neutron program over the past quarter, you would have seen uh over the next few slides. Why I'm dubbing this the quarter of qualification

Another 6 for Quality qualification on the board is Neutron thrust structure. This is a really complex part of neutron. It must be able to withstand 2.1 million pounds of thrust which is more than 44, electrons simultaneously lifting off to give everybody kind of a sense there.

We've taken a massive strides in Q4, as well as q1, uh, so far successfully, qualifying critical flight Hardware from large structures through the component level systems.

In Q4, the Hungry Hippo fairing successfully passed qualification, and then on into Q1 it made its way to Wallace.

The structure is now officially on to final integration, uh which is the final hurdle before we get into integrated system. Checkouts, cryogenic proof tests, uh, vehicle, hot fires, wet dress and then of course more.

So, exciting time in Virginia, as Neutron flight, flight, Hardware starts arriving and we can get into the final assembly and integration and test space.

Peter Beck: For the Hungry Hippo specifically, that looks like fluid systems, and installation of canards and thermal protection systems, and then, of course, end-to-end testing. While we work through that, in preparation for the first flight, we have the second Hungry Hippo in production for the next Neutron launch vehicle as well. Another successful qualification on the board is Neutron thrust structure. This is a really complex part of Neutron. It must be able to withstand 2.1 million pounds of thrust, which is more than 44 Electrons simultaneously lifting off, to give everybody kind of a sense there. The structure is now officially onto final integration, which is the final hurdle before we get into integrated system checkouts, cryogenic proof tests, vehicle hot fires, wet dress, and then, of course, launch.

Shipping at the lc3.

For the Hungry Hippos, specifically uh, that looks like fluid systems uh and installation of canards, and thermal Protection Systems. And then then of course, ending in testing,

While we work through that in preparation for the first flight, we have the second Hungry Hippo in production for the next Neutron launch vehicle as well.

Meanwhile, at MO River a Neutron's interstage is undergoing, its own qualification qualification campaign before being shipped to lc3. Neutron second stage is hung, uh, hung inside this during flight, it then passes through the mouth of the Hungry, Hippo, and carried to orbit.

Like the Hungry, Hippo, The interstage Remains attached to the first stage and reused. So it needs to undergo a robust testing and program. So it can we can ensure that it can withstand the forces of launch and Landing multiple times.

Another 6 is for Quality qualification on the board is Neutron thrust structure. This is a really complex part of neutron. It must be able to withstand 2.1 million pounds of thrust which is more than 44, electrons simultaneously lifting off to give everybody kind of a sense there.

The structure is now officially on to final integration, which is the final hurdle before we get into integrated system checkouts, cryogenic proof tests, vehicle hot fires, wet dress, and then of course, launch.

Peter Beck: It'll go through avionics and fluids and subcomponent integration before shipping out to LC3. Meanwhile, at Middle River, Neutron's interstage is undergoing its own qualification campaign before being shipped to LC3. Neutron's second stage is hung inside this during flight. It then passes through the mouth of the Hungry Hippo and carried to orbit. Like the Hungry Hippo, the interstage remains attached to the first stage and reused, so it needs to undergo a robust testing and program, so we can ensure that it can withstand the forces of launch and landing multiple times. Stage two is in its final integration and getting ready for its debut on the test stand at LC3.

And then stage 2 is in its final integration and getting ready for its debut on the test standard lc3. Uh, this is especially built rig on the top of the lc3 launch Mount where we'll go and conduct a barrage of integrated tests before, ultimately moving into hot fires on the stand.

Um, it'll go through avionics and fluids, uh, and subcomponent integration, uh, before shipping out, the LC3,

That will be our 3's first taste of what an Arkham energy of of an Archimedes engine and a huge milestone for the development program. So we look forward to testing that soon.

Meanwhile, in Middle River, a Neutron's interstage is undergoing, its own qualification qualification campaign before being shipped to lc3. Neutron's. Second stage is hung, uh, hung inside this during flight and then passes through the mouth of the Hungry, Hippo, and carried to orbit.

Like the Hungry, Hippo, The interstage Remains attached to the first stage and reused. So it needs to undergo a robust testing and program. So it can you can ensure that it can withstand the forces of launch and Landing multiple times.

Uh, which brings me to the last but not least Archimedes, uh, right now the engines are in boot camp. Um, we are not been nice to them at all. Um, it's all well and good with to test engine, to engines to expected bounds. Uh, but through experience, I've learned that spaceflight has a way of throwing things at you that aren't expected rocket engines. Don't tend to fail when everything's boring. Um, and you can, when you can rely on analysis and simulation to bound, uh, you know, and then truly understand performance, ultimately engine reliability is gained via testing.

Peter Beck: This is a specially built rig on the top of the LC3 launch mount, where we'll go and conduct a barrage of integrated tests before ultimately moving into hot fires on the stand. That will be LC3's first taste of what an Archimedes engine and a huge milestone for the development program. We look forward to testing that soon. Which brings me to the last but not least, Archimedes. Right now, the engines are in boot camp. We have not been nice to them at all. It's all well and good with, to test engines to expected bounds. Through experience, I've learned that spaceflight has a way of throwing things at you that aren't expected.

Uh, this is a specially built rig on the top of the RC3 launch mount, where we'll go and conduct a barrage of integrated tests before ultimately moving into hot fires on the stand.

There's just no substitute. So that's what uh, we're doing. And we're really pushing them through the edge cases. Uh, backing right off the inlet pressure inducing, cavitation and generally doing, really nasty stuff to them.

That will be our 3's first taste of what Anarchy of an Archimedes engine and a huge milestone for the development program. So we look forward to testing that soon.

Uh ultimately, you want to know how the engines are going to perform in a really wide range of scenarios on the ground before you put them in the air and find out in flight?

Peter Beck: Rocket engines don't tend to fail when everything's boring, when you can rely on analysis and simulation to bound, you know, and then truly understand performance. Ultimately, engine reliability is gained via testing. There's just no substitute. That's what we're doing, we're really pushing them through the edge cases, backing right off the inlet pressure, inducing cavitation, and generally doing really nasty stuff to them. Ultimately, you want to know how the engines are gonna perform in a really wide range of scenarios on the ground before you put them in the air and find out in flight. Too many rocket companies have not done this, and it typically doesn't end well.

Too many rocket companies have not done this and it typically doesn't end well. Um, this is the same kind of process we undertook When developing Rutherford the the engine on on electron and right now we're flying more than 800 of those engines successfully to space. So we'll be bringing the same level of reliability and rigger to Archimedes

Uh, which brings me to the last but not least Archimedes, uh, right now the engines are in boot camp. Um, we are not been nice to them at all. Um, it's all well and good with to test engines, to engines to expected bounds. Uh, but through experience, I've learned that space. Flight has a way of throwing things at you that aren't expected rocket engines. Don't tend to fail when everything's boring. Um, and you can, when you can rely on analysis and simulation to bound, uh, you know, and then truly understand performance, ultimately engine reliability is gained via testing.

There's just no substitute. So that's what we're doing and we're really pushing them through the edge cases. Uh, backing right off the inlet pressure inducing, cavitation and generally doing, really nasty stuff to them.

beyond the stage 1 tank. Uh, we've had a really positive quarter for Neutron, um, progress and this gives you a snapshot of just how much progress we've seen and made on the past to First launched, uh, major structures and subsystems are passing qualification. And for the first time we have hardware and final integration. These are the final steps before we go into integrated testing on the pad with hot fires stage tests and then wet dress. And then of course, launch

Ultimately, you want to know how the engines are going to perform in a really wide range of scenarios on the ground before you put them in the air and find out in flight?

Peter Beck: This is the same kind of process we undertook when developing Rutherford, the engine on Electron. Right now we've flown more than 800 of those engines successfully to space. We'll be bringing the same level of reliability and rigor to Archimedes. Beyond the stage one tank, we've had a really positive quarter for Neutron progress. This gives you a snapshot of just how much progress we've seen and made on the path to first launch. Major structures and subsystems are passing qualification. For the first time, we have hardware and final integration. These are the final steps before we go into integrated testing on the pad with hot fires, stage tests, and then wet dress, and then, of course, launch. Beyond the vehicle itself, we have established all the supporting infrastructure to enable first launch and beyond.

Beyond the vehicle itself, we've established uh all the supporting infrastructure to enable first launch and Beyond obviously 3 years officers, stood up plus production, and Test Facilities are all humming. Uh, while the regulatory work is all tracking along, as we expect

Too many rocket companies have not done this, and it typically doesn't end well. Um, this is the same kind of process we undertook when developing Rutherford, the engine on Electron. And right now, we've flown more than 800 of those engines successfully to space. So we'll be bringing the same level of reliability and rigor to our comedients.

Uh, the thing to look out for the next few months. Um, to know that we're marching steadily towards launch, including more Hardware, making its way to the launch site. Uh, we will be conducting, we will be conducting, uh, extensive, uh, testing of flight hardware and then obviously, that'll lead up to neutrons first flight.

So that wraps up the operational highlights. So I'll hand over to Adam for the financial overview and Outlook.

Thanks Pete.

Fourth quarter, 2025 Revenue was a record 180 million.

Beyond the Stage 1 tank, we've had a really positive quarter for Neutron progress, and this gives you a snapshot of just how much progress we've seen and made on the past. The first launch's major structures and subsystems are passing qualifications, and for the first time, we have hardware in final integration. These are the final steps before we go into integrated testing on the pad with hot fire stage tests, and then wet dress, and then, of course, launch.

Coming in at the high end of our prior guidance range and representing an impressive year-over-year. Growth of 36%

Peter Beck: LC-3 has obviously stood up, plus production and test facilities are all humming while the regulatory work is all tracking along as we expect. The things to look out for the next few months to know that we're marching steadily towards launch includes seeing more hardware making its way to the launch site. We will be conducting extensive testing of flight hardware, and then obviously that'll lead up to Neutron's first flight. That wraps up the operational highlights. I'll hand over to Adam for the financial overview and outlook.

This strong performance was driven by significant contributions from both of our business segments.

Sequentially Revenue increased by 16% underscoring. The continued momentum across the business.

Our space system segments delivered 103.8 million in Revenue in the quarter. Reflecting a sequential decrease of 9.1%.

beyond the vehicle itself, we've established uh all the supporting infrastructure to enable first launch and Beyond obviously 3 years officers, stood up plus production, and Test Facilities are all humming. Uh, while the regulatory work is all tracking along, as we expect, uh, the things to look out for the next few months. Um, to know that we're marching steadily towards launch, including more Hardware, making its way to the launch site. Uh, we will be conducting, we will be conducting, uh, extensive, uh, testing of flight hardware and then obviously, that'll lead up to neutrons first flight.

So that wraps up the operational highlights. So I'll hand over to Adam for the financial overview and Outlook.

Adam Spice: Thanks, Pete. Q4 2025 revenue was a record $180 million, coming in at the high end of our prior guidance range and representing an impressive year-over-year growth of 36%. This strong performance was driven by significant contributions from both of our business segments. Sequentially, revenue increased by 16%, underscoring the continued momentum across the business. Our space system segment delivered $103.8 million in revenue in the quarter, reflecting a sequential decrease of 9.1%. This decline was primarily stemmed from our satellite platforms business and our solar businesses, both of which continue to perform exceptionally well despite the time-to-time programmatic nonlinearity of revenue recognition under ASC 606 and related subcontractor progress.

Thanks Pete.

This decline was primarily stemmed from our satellite platforms business and our solar businesses, both of which continue to perform exceptionally. Well, despite the time to time, programmatic, nonlinearity of Revenue recognition under ASC, 606 and related some Co subcontractor progress,

Fourth quarter, 2025 Revenue was a record 180 million.

Coming in at the high end of our prior guidance range and representing an impressive year-over-year. Growth of 36%

We're fortunate that the growing diversification across space systems and launch can often provide more predictable Topline growth. Despite underlying volatility at the individual product line level.

This strong performance was driven by significant contributions from both of our business segments.

Sequentially Revenue increased by 16% underscoring. The continued momentum across the business.

This was 1 of those quarters where strength and launch Services more than offset. The declines in Space Systems, generating 75.9 million in Revenue. Representing an 85% quarter quarter increase due to the increase from 4 to 7, launches During the period, including 1 haste mission.

Our space system segments delivered 103.8 million in Revenue in the quarter. Reflecting a sequential decrease of 9.1%.

On a full year basis, 2025 Revenue was 600 and 602 million and impressive 38% growth year on year.

Now, turning to gross margin.

This decline was primarily stemmed from our satellite platforms business and our solar businesses, both of which continue to perform exceptionally well, despite the, from time to time, programmatic nonlinearity of revenue recognition under ASC 606 and related some subcontractor progress.

Adam Spice: We're fortunate that the growing diversification across space systems and launch can often provide more predictable top-line growth, despite underlying volatility at the individual product line level. This was one of those quarters where strength in launch services more than offset the declines in space systems, generating $75.9 million in revenue, representing an 85% quarter-over-quarter increase due to the increase from 4 to 7 launches during the period, including one HASTE mission. On a full year basis, 2025 revenue was $602 million, an impressive 38% growth year-over-year. Now turning to gross margin. GAAP gross margin for Q4 was 38%, at the center of our prior guidance range of 37% to 39%, and an increase of 100 basis points quarter-over-quarter.

Gaap gross margin for the fourth quarter was 38% at the center of our prior. Guidance range of 37 to 39% and an increase of 100 basis points, quarter per quarter,

We're fortunate that the growing diversification across space systems and launch can often provide more predictable Topline growth. Despite underlying volatility at the individual product line level.

was 44.3%, which was also in line with our prior guidance, range of 43 to 45% and an increase of 240 basis points quarter to quarter,

This was 1 of those quarters where strength and launch Services more than offset. The declines in Space Systems, generating 75.9 million in Revenue. Representing an 85% quarter increase due to the increase from 4 to 7, launches During the period, including 1 haste mission.

The sequential Improvement in Gross margins was primarily driven by an increase in electron fixed costs. Absorption due to the increased launch Cadence within the quarter paired with increased contribution from our our higher margin Space Systems components businesses.

On a full year basis, 2025 Revenue was 602 million and impressive 38% growth year on year.

Now, turning to gross margin.

On a full year basis. Gaap gross margin was 34.4% and increase of 7880 basis points year-over-year. While non-gaap gross margin was 39.7% and increase of 770 basis points year-over-year.

Gaap gross margin for the fourth quarter was 38% at the center of our prior. Guidance range of 37 to 39% and an increase of 100 basis points, quarter per quarter,

Adam Spice: Non-GAAP gross margin for Q4 was 44.3%, which was also in line with our prior guidance range of 43% to 45%, and an increase of 240 basis points quarter-over-quarter. The sequential improvement in gross margins was primarily driven by an increase in Electron fixed cost absorption due to the increased launch cadence within the quarter, paired with increased contribution from our higher margin space systems components businesses. On a full year basis, GAAP gross margin was 34.4%, an increase of 780 basis points year-over-year, while non-GAAP gross margin was 39.7%, an increase of 770 basis points year-over-year. Relatedly, we ended Q4 with production-related headcount of 1,244, up 46 from the prior quarter.

We ended Q4 with production related. Headcount of 1,244.

Up. 46 from the prior quarter.

Non-GAAP gross margin for the fourth quarter was 44.3%.

which was also in line with our prior guidance, range of 43% to 45%, and an increase of 240 basis points quarter over quarter,

Now, before moving on to backlog, I want to take a moment and zoom out and provide perspective on the progress. We've made towards our long-term financial model, since our NASDAQ listing in 2021,

Revenue has grown nearly 10x achieving a compound annual growth rate exceeding, 76%

Of course, margins have increased each year, more than doubling the contribution from each dollar of Revenue.

This expansion highlights, our strong and disruptive competitive position in the industry, as well as our highly valued, and differentiated products and services across the business.

39.7%, an increase of 770 basis points year over year.

The combination of this Revenue growth and margin expansion, has put the company on a solid foundation and path towards achieving meaningful, operating, leverage and long-term cash flow generation.

Relatedly, we ended Q4 with production-related headcount of 1,244.

Up. 46 from the prior quarter.

Adam Spice: Now, before moving on to backlog, I want to take a moment and zoom out and provide perspective on the progress we've made towards our long-term financial model since our Nasdaq listing in 2021. Revenue has grown nearly 10x, achieving a compound annual growth rate exceeding 76%. Gross margins have increased each year, more than doubling the contribution from each dollar of revenue. This expansion highlights our strong and disruptive competitive position in the industry, as well as our highly valued and differentiated products and services across the business. The combination of this revenue growth and margin expansion has put the company on a solid foundation and path towards achieving meaningful operating leverage and long-term cash flow generation.

Lastly I thought it important to call out our sgna spending as a percentage of Revenue as I'm encouraged to see this continue to Trend downward as we scale the business.

Now, before moving on to backlog, I want to take a moment and zoom out and provide perspective on the progress. We've made towards our long-term financial model, since our NASDAQ listing in 2021,

We are constantly driving the business to be fiercely efficient, and I believe that we're positioned to drive even more growth in efficiency in 2026 and Beyond.

Now, drink the backlog.

Revenue has grown nearly 10x achieving a compound annual growth rate exceeding, 76%

Gross, margins have increased each year, more than doubling the contribution from each dollar of Revenue.

This expansion highlights, our strong and disruptive competitive position in the industry.

We added Q4 2025 with approximately 1.85 billion dollars in total. Backlog and impressive, 69% growth sequentially primarily due to our recent SDA tranche 3, tracking their contract award which we announced last December.

As well as our highly valued and differentiated products and services across the business.

As we've mentioned before Space Systems, backlog, in particular can be lumpy given the timing of these increasingly larger needle moving program opportunities, but once awarded they can can sick can significantly de-risk Revenue growth for several years.

The combination of this Revenue growth and margin expansion, has put the company on a solid foundation and path towards achieving meaningful, operating, leverage and long-term cash flow generation.

Adam Spice: Lastly, I thought it important to call out our SG&A spending as a percentage of revenue, as I'm encouraged to see this continue to trend downward as we scale the business. We are constantly driving the business to be fiercely efficient, and I believe that we're positioned to drive even more growth and efficiency in 2026 and beyond. Now turning to backlog. We ended Q4 2025 with approximately $1.85 billion in total backlog, an impressive 69% growth sequentially, primarily due to our recent SDA Tranche 3 Tracking Layer contract award, which we announced last December. As we've mentioned before, space systems backlog, in particular, can be lumpy given the timing of these increasingly larger needle-moving program opportunities. Once awarded, they can significantly de-risk revenue growth for several years.

Lastly I thought it important to call out our sgna spending as a percentage of Revenue as I'm encouraged to see this continue to Trend downward as we scale the business.

We continue to cultivate a strong pipeline that includes multi, launch agreements across electron, haste, and neutron, as well as large satellite platform, contracts across government and Commercial programs.

We are constantly driving the business to be fiercely and I believe that we're positioned to drive even more growth in efficiency in 2026 and Beyond.

Currently launched backlog accounts for approximately 26% while Space Systems represents approximately 74%.

Now shrinked backlog. We added Q4 2025 with approximately 1.85 billion dollars in total backlog an impressive. 69% gross sequentially primarily due to our recent SDA tranche 3, tracking their contract award which we announced last December.

Looking ahead. We expect approximately 37% of our current backlog to convert into Revenue within the next 12 months which includes preliminary tranche 3 Revenue recognition estimates, which we believe will prove to be conservative which in addition to the healthy sales pipeline are expected to drive incremental Topline contribution beyond the current 12-month backlog conversion.

Turning to operation and operating expenses.

As we've mentioned before Space Systems, backlog, in particular can be lumpy given the timing of these increasingly larger needle moving program opportunities. But once awarded, they can can can significantly de-risk Revenue growth for several years.

Adam Spice: We continue to cultivate a strong pipeline that includes multi-launch agreements across Electron, HASTE, and Neutron, as well as large satellite platform contracts across government and commercial programs. Currently, launch backlog accounts for approximately 26%, while space systems represents approximately 74%. Looking ahead, we expect approximately 37% of our current backlog to convert into revenue within the next 12 months, which includes preliminary Tranche 3 revenue recognition estimates, which we believe will prove to be conservative. In addition to the healthy sales pipeline, are expected to drive incremental top-line contribution beyond the current 12-month backlog conversion. Turning to operation and operating expenses. GAAP operating expenses for Q4 2025 were $119.3 million, below our guidance range of $122 to 128 million.

Gap, operating expenses for the fourth quarter of 2025 or 119.3 million below our guidance range of 122 to 128 million

We continue to cultivate a strong pipeline that includes multiple launch agreements across electron haste, and neutron, as well as large satellite platform, contracts across government and Commercial programs.

Non-gaap operating expenses for the fourth quarter, were 104.5 million, which were also below our guidance range of 107 to 113 million.

Currently, Launched backlog accounts for approximately 26%, while Space Systems represents approximately 74%.

The sequential increase in both, gaap and non-gaap operating expenses were primarily driven by continued growth and prototype and headcount related spending to support our Neutron development program.

Specifically Investments ramped up in propulsion as we continue to test Archimedes engines as well as test and integration of mechanical and composite structures at our facility in Middle River. Maryland.

In R&D specifically gaap expenses, increased 8.1 million quarter of a quarter. While non-gaap expenses, Rose 7.7 million,

Turning to operating expenses, GAAP operating expenses for the fourth quarter of 2025 were $119.3 million, below our guidance range of $122 to $128 million.

Adam Spice: Non-GAAP operating expenses for Q4 were $104.5 million, which were also below our guidance range of $107 to $113 million. The sequential increase in both GAAP and Non-GAAP operating expenses were primarily driven by continued growth in prototype and headcount-related spending to support our Neutron development program. Specifically, investments ramped up in propulsion as we continue to test Archimedes engines, as well as test and integration of mechanical and composite structures at our facility in Middle River, Maryland. In R&D, specifically, GAAP expenses increased $8.1 million quarter-over-quarter, while Non-GAAP expenses rose $7.7 million. These increases were driven by the ramp-up of Archimedes production and testing, along with higher expenditures related to composite structures and fluids, as just mentioned.

these increases were driven by the ramp up of our committee's production and testing along with higher expenditures related to composite structures and fluids as just mentioned.

Non-gaap operating expenses for the fourth quarter, were 104.5 million, which were also below our guidance range of 107 to 113 million.

Q4 ending R&D. Headcount was 1,012. Representing a decrease of 7 from the prior quarter.

In sgna gap, expenses decreased, 5.1 million quarter over quarter while non-gaap expenses declined, 1.3 million quarter of a quarter.

The sequential increase in both, gaap and non-gaap operating expenses were primarily driven by continued growth in Prototype and headcount related. Spending to support our Neutron development program,

These decreases were primarily due to a reduction in transaction related legal and other Professional Services fees.

Related to m&a and capital markets, transactions, paired with a slight reduction in marketing expenses.

Specifically Investments ramped up in propulsion as we continue to test ours engines as well as test and integration of mechanical and composite structures at our facility in Middle River. Maryland.

Q4 ending sgna headcount was 389.

In R&D specifically Gap expenses, increased 8.1 million quarter of a quarter. While non-gaap expenses, Rose 7.7 million,

In summary total headcount at the end of the fourth quarter was 2,645 up 43 heads from the prior quarter.

Turning to cash.

these increases were driven by the ramp up of Archimedes production and testing along with higher expenditures related to composite structures and fluids as just mentioned.

Adam Spice: Q4 ending R&D headcount was 1,012, representing a decrease of 7 from the prior quarter. In SG&A, GAAP expenses decreased $5.1 million quarter-over-quarter, while non-GAAP expenses declined $1.3 million quarter-over-quarter. These decreases were primarily due to a reduction in transaction-related legal and other professional services fees related to M&A and capital markets transactions, paired with a slight reduction in marketing expenses. Q4 ending SG&A headcount was 389, representing an increase of 4 from the prior quarter. In summary, total headcount at the end of Q4 was 2,645, up 43 heads from the prior quarter. Turning to cash.

Q4 ending R&D. Headcount was 1,012. Representing a decrease of 7 from the prior quarter.

Purchase of property equipment and capitalized software licenses were 49.7 million in the fourth quarter of 2025, an increase of 3.8 million from the 4 5. 9 3

In sgna gap, expenses decreased, 5.1 million quarter over quarter while non-gaap expenses declined, 1.3 million quarter of a quarter.

These decreases were primarily due to a reduction in transaction related legal and other Professional Services fees related to m&a and capital markets. Transactions, paired with a slight reduction in marketing expenses.

This increase reflects ongoing investments in Neutron development as we can do, testing and integrating across the pad at lc3 and walls Virginia and Middle River. Maryland, expanding capabilities at our engine development complex in Long Beach, California and build out of the return on investment recovery. Barge in Louisiana,

Q4 ending sgna headcount was 389.

as we progressed towards Neutron's First Flight, we expect Capital expenditures to remain elevated, as we invest in testing production, scaling and infrastructure expansion.

Representing an increase of 4 from the prior quarter in summary total headcount at the end of the fourth quarter, was 2,645 up, 43 heads from the prior quarter.

Gaap EPS for the fourth quarter was a loss of 9 cents per share compared to a loss of 3 cents per share in the third quarter.

Adam Spice: Purchase of property, equipment, and capitalized software licenses were $49.7 million in Q4 2025, an increase of $3.8 million from the $45.9 million in Q3. This increase reflects ongoing investments in Neutron development as we continue testing and integrating across the pad at LC-3 in Wallops Island, Virginia and Middle River, Maryland, expanding capabilities at our engine development complex in Long Beach, California, and build out of the ROI recovery barge in Louisiana. As we progress towards Neutron's first flight, we expect CapEx to remain elevated as we invest in testing, production scaling, and infrastructure expansion. GAAP EPS for Q4 was a loss of $0.09 per share, compared to a loss of $0.03 per share in Q3.

Turning to cash.

Purchase of property, equipment, and capitalized software licenses were $49.7 million in the fourth quarter of 2025, an increase of $3.8 million from the $45.9 million in the third quarter.

The sequential increase to gaap EPS loss is mostly attributable to the 41 million tax benefit. We recorded during the third quarter, which was due to the partial release of the valuation allowance against our corporate deferred tax assets.

As a result of requiring, an equal amount of deferred tax liabilities emanating from the geost acquisition purchase price accounting.

Development complex in Long Beach, California, and build out of the return on investment recovery. Barge in Louisiana,

Gaap operating cash flow was a use of 64.5 million in the fourth quarter of 2025 compared to 23.5 million in the third quarter.

As we progress towards Neutron's First Flight, we expect Capital expenditures to remain elevated, as we invest in testing production, scaling and infrastructure expansion.

The sequential increased use of 41 million was almost entirely due to the timing of employee Equity program related tax payments.

Gaap EPS for the fourth quarter was a loss of 9 cents per share compared to a loss of 3 cents per share in the third quarter.

Adam Spice: The sequential increase to GAAP EPS loss is mostly attributable to the $41 million tax benefit we recorded during Q3, which was due to the partial release of the valuation allowance against our corporate deferred tax assets as a result of acquiring an equal amount of deferred tax liabilities emanating from the Geost acquisition purchase price accounting. GAAP operating cash flow was a use of $64.5 million in Q4 2025, compared to $23.5 million in Q3. The sequential increased use of $41 million was almost entirely due to the timing of employee equity program related tax payments.

Similar to the capital expenditure Dynamics mentioned earlier cash. Consumption will remain elevated due to Neutron development longer lead procurement for SDA investments in subsequent, Neutron tail production and infrastructure expansion to scale. The business beyond the initial test flight

The sequential increase to gaap EPS loss is mostly attributable to the 41 million dollar tax benefit. We recorded during the third quarter, which was due to the partial release of the valuation allowance against our corporate deferred tax assets. As a result of requiring, an equal amount of deferred tax liabilities emanating from the geost acquisition purchase price accounting.

Overall non-gaap free cash flow defined as gaap. Operating cash flow less purchases of property equipment and capitalized software in the fourth quarter of 2025 was a use of 114.2 million compared to a use of 69.4 million in the third quarter.

GAAP operating cash flow was a use of $64.5 million in the fourth quarter of 2025, compared to $23.5 million in the third quarter.

The ending balance of cash cash, equivalents restricted cash and marketable securities was approximately 1.1 billion dollars at the end of the fourth quarter.

The sequential increase in use of $41 million was almost entirely due to the timing of employee equity program-related tax payments.

Adam Spice: Similar to the capital expenditure dynamics mentioned earlier, cash consumption will remain elevated due to Neutron development, longer lead procurement for SDA, investments in subsequent Neutron tail production, and infrastructure expansion to scale the business beyond the initial test flight. Overall, non-GAAP free cash flow, defined as GAAP operating cash flow, less purchases of property, equipment, and capitalized software in the Q4 2025 was a use of $114.2 million, compared to a use of $69.4 million in the Q3. The ending balance of cash equivalents, restricted cash, and marketable securities was approximately $1.1 billion at the end of the Q4.

The sequential increase in liquidity was driven by proceeds from sales of our common stock under our at the market Equity offering program, which generated 280.6 million during the quarter.

Similar to the capital expenditure Dynamics mentioned earlier cash. Consumption will remain elevated due to Neutron development longer procurement for SDA investments in subsequent Neutron tail production and infrastructure expansion to scale the business beyond the initial test flight

These funds are primarily intended to support Acquisitions such as the announced pending Monarch acquisition, the real, the recently consummated Acquisitions of optical support Inc, and precision components limited as well as other Targets in our robust m&a pipeline along with General, Corporate expenditures and working capital.

We exited Q4 in a strong position to execute on both organic and inorganic. Growth initiatives in a further vertically integrated supply chain. Expands strategic capabilities and grow our addressable Market consistent with what we've done successfully in the past.

The ending balance of cash cash, equivalents restricted cash and marketable securities was approximately 1.1 billion dollars at the end of the fourth quarter.

Adam Spice: The sequential increase in liquidity was driven by proceeds from sales of our common stock under our at-the-market equity offering program, which generated $280.6 million during the quarter. These funds are primarily intended to support acquisitions such as the announced pending Mynaric acquisition, the recently consummated acquisitions of Optical Support, Inc. and Precision Components Limited, as well as other targets in our robust M&A pipeline, along with general corporate expenditures and working capital. We exited Q4 in a strong position to execute on both organic and inorganic growth initiatives and to further vertically integrate our supply chain, expand strategic capabilities, and grow our addressable market consistent with what we've done successfully in the past.

Adjusted Eva doll loss for the fourth quarter of 2025 was 17.4 Million, which was below our guidance range of 23 to 29 million loss.

The sequential increase in liquidity was driven by proceeds from sales of our common stock under our at the market Equity offering program, which generated 280.6 million during the quarter.

The sequential decrease of 8.9 million in adjusted evil to loss was driven by significant revenue and gross margin Improvement. Partially offset by increased operating expenses related to Neutron development.

With that. Let's turn our, let's turn to our guidance for the first quarter of 2026,

These funds are primarily intended to support Acquisitions such as the announced pending Monarch acquisition the roof, the recently consummated, Acquisitions of optical support Inc, and precision components limited as well as other Targets in our robust m&a pipeline along with General, Corporate expenditures and working capital.

We expect Revenue in the first quarter to range between 185 and 200 million representing 7%. Quarter-on-quarter Revenue growth at the midpoint and growth of 57% from the year ago quarter.

We exited Q4 in a strong position to execute on both organic and inorganic growth initiatives in a further vertically integrate. Our supply chain expands strategic capabilities and grow our addressable Market consistent with what we've done successfully in the past.

Adam Spice: Adjusted EBITDA loss for Q4 2025 was $17.4 million, which was below our guidance range of $23 to 29 million loss. The sequential decrease of $8.9 million in adjusted EBITDA loss was driven by significant revenue and gross margin improvement, partially offset by increased operating expenses related to Neutron development. With that, let's turn to our guidance for Q1 2026. We expect revenue in Q1 to range between $185 and 200 million, representing 7% quarter-over-quarter revenue growth at the midpoint and growth of 57% from the year-ago quarter. We anticipate slight slip down in both GAAP and non-GAAP gross margins in Q1, with GAAP gross margin to range between 34% to 36% and non-GAAP gross margin to range between 39% to 41%.With a modest sequential decline driven by a greater mix of space systems versus higher margin launch and a weaker margin mix within our space system segment.

Justin Bieber doll loss for the fourth quarter of 2025 was $17.4 million, which was below our guidance range of $23 to $29 million loss.

We anticipate slight slept down in both gaap and non-gaap gross margins in the first quarter with gaap, gross margin, deranged between 34% to 36% and non-gaap gross margin to range between 39% to 41%. With the modest, sequential decline driven by a greater mix of Space Systems versus higher margin launch and a weaker margin mix within our space system segments.

The sequential decrease of 8.9 million and adjusted even to loss was driven by significant revenue and gross margin Improvement. Partially offset by increased operating expenses related to Neutron development.

We expect first quarter Gap, operating expenses to range between 120 and 126 million and non-gaap operating expenses to range between 106 and 112 million.

With that. Let's turn our, let's turn to our guidance for the first quarter of 2026,

The quarter of a quarter increases are primarily driven by ongoing Neutron development and spending related to flight 1 including staff costs prototyping and materials.

We expect revenue in the first quarter to range between $185 million and $200 million, representing 7% quarter-on-quarter revenue growth at the midpoint and growth of 57% from the year-ago quarter.

Adam Spice: We anticipate slight slip down in both GAAP and non-GAAP gross margins in Q1, with GAAP gross margin to range between 34% to 36% and non-GAAP gross margin to range between 39% to 41%. With a modest sequential decline driven by a greater mix of space systems versus higher margin launch and a weaker margin mix within our space system segment. We expect Q1 GAAP operating expenses to range between $120 and $126 million and non-GAAP operating expenses to range between $106 and $112 million. The quarter-over-quarter increases are primarily driven by ongoing Neutron development and spending related to flight 1, including staff costs, prototyping, and materials.

However, we expect to see a shift in spending from R&D and into flight to inventory throughout 2026.

Which is an encouraging sign of progress. As we move closer toward neutrons, first flight,

And adjusted. EBA deposited as a result.

that with the impressive strides we've made towards this Milestone and currently expect q1 to Mark Peak Neutron R&D spending

Adam Spice: We expect Q1 GAAP operating expenses to range between $120 and $126 million and non-GAAP operating expenses to range between $106 and $112 million. The quarter-over-quarter increases are primarily driven by ongoing Neutron development and spending related to flight 1, including staff costs, prototyping, and materials. We expect to see a shift in spending from R&D and into flight to inventory throughout 2026, which is an encouraging sign of progress as we move closer toward Neutron's first flight and adjusted EBITDA positivity as a result. I'm optimistic that with the impressive strides we've made towards this milestone and currently expect Q1 to mark peak Neutron R&D spending. We expect Q1 GAAP and non-GAAP net interest income to be $8 million, which is a function of higher cash balances as well as conversion of approximately $117 million of convertible notes since 31 December.

We expect first quarter, gaap and non-gaap net interest income to be 8 million.

Which is a function of higher cash balances as well as conversion of approximately 117 million of convertible notes since December 31st.

We expect first quarter GAAP operating expenses to range between $120 million and $126 million, and non-GAAP operating expenses to range between $106 million and $112 million.

We expect first quarter adjusted, even a loss to range between 21 and 27 million. And basic weighted, average common shares outstanding to be a proximately 65 million shares.

The quarter over quarter increases are primarily driven by ongoing Neutron development and spending related to flight 1 including staff costs prototyping and materials.

Adam Spice: We expect to see a shift in spending from R&D and into flight to inventory throughout 2026, which is an encouraging sign of progress as we move closer toward Neutron's first flight and adjusted EBITDA positivity as a result. I'm optimistic that with the impressive strides we've made towards this milestone and currently expect Q1 to mark peak Neutron R&D spending. We expect Q1 GAAP and non-GAAP net interest income to be $8 million, which is a function of higher cash balances as well as conversion of approximately $117 million of convertible notes since 31 December.

However, we expect to see a shift in spending from R&D and into flight to inventory throughout 2026.

Which includes convertible preferred shares of approximately 46 million and reflects the conversion of approximately 23 million shares from our outstanding convertible notes, thus far in q1.

Which is an encouraging sign of progress. As we move closer toward neutrons, first flight,

And adjusted Eva deposit is a result.

The remains there remains only 7.5 million shares or 11% of the original 355 million issuance outstanding.

I'm optimistic that with the impressive strides we've made towards this Milestone and currently expect q1 to Mark Peak Neutron R&D spending

We expect first quarter GAAP and non-GAAP net interest income to be $8 million.

And When taking into the additional context of the retirement of the Trinity equipment line in queue and Q4 we have substantially eliminated in debt in. We have,

Eliminated in debt. In this from the business.

Which is a function of higher cash balances as well as conversion of approximately $117 million of convertible notes since December 31st.

Adam Spice: We expect Q1 adjusted EBITDA loss to range between $21 and $27 million and basic weighted average common shares outstanding to be approximately 605 million shares, which includes convertible preferred shares of approximately 46 million and reflects the conversion of approximately 23 million shares from our outstanding convertible notes thus far in Q1. There remains only 7.5 million shares or 11% of the original $355 million issuance outstanding. When taken into the additional context of the retirement of the Trinity equipment line on Q4, we have substantially eliminated debt, we have eliminated indebtedness from the business. Lastly, consistent with prior quarters, we expect negative non-GAAP free cash flow in Q1 to remain at elevated levels, driven by ongoing investments in Neutron development and scaling production.

Lastly, consistent with prior quarters. We expect negative. Non-gaap free cash flow in the first quarter to remain at elevated levels, driven by ongoing investments in Neutron development, and scaling production.

This excludes any potential offsetting effects from financing activities.

Uh, last but not least, here are some of the upcoming investor events that will be attending in the next few months. And with that, we'll hand the call over to the operator for questions.

46 million and reflects the conversion of approximately 23 million shares from our outstanding convertible notes, thus far in q1.

The remains there remains only 7.5 million shares or 11% of the original 355 million issuance outstanding.

Thank you, if you'd like to ask a question. Please press star 1, 1. If your question has been answered, and you'd like to remove yourself from the queue. Please press star 1 1 again.

Our first question comes from Andrea Shepard with cancer. Fitzgerald, your line is open.

And when taken into the additional context of the retirement of the Trinity equipment, line in queue, and Q4, we have substantially eliminated in debt. We have,

Eliminated this from the business.

Adam Spice: This excludes any potential offsetting effects from financing activities. Last but not least, here are some of the upcoming investor events that we'll be attending in the next few months. With that, we'll hand the call over to the operator for questions.

This excludes any potential offsetting effects from financing activities.

Uh, last but not least, here are some of the upcoming investor events that will be attending in the next few months. And with that, we'll hand the call over to the operator for questions.

Hey everyone, uh, good afternoon. Uh, thanks so much for taking our questions and congrats on all the great progress. And, and thanks for the update on, uh, on Neutron, um, Adam maybe want to start with the, uh, the backlog. Um, I'm wondering if you can maybe, um, help us. Um, build a drill, a bit deeper in it and maybe remind us, what is included in here. Does this include the 40% of revenue from SDA trunch to 10% of maybe the tranche 3 and what are you including from Neutron? And electron here. Thank you.

Operator: Thank you. If you'd like to ask a question, please press star one one. If your question has been answered and you'd like to remove yourself from the queue, please press star one one again. Our first question comes from Andres Sheppard with Cantor Fitzgerald. Your line is open.

Thank you. If you like to ask a question. Please press star 1, 1 1.

If your question has been answered and you like to remove yourself from the queue. Please press star 1 on again.

Our first question comes from Andrea Shepard with cancer. Fitzgerald, your line is open.

Hello.

Andres Sheppard: Hey, everyone. Good afternoon. Thanks so much for taking our questions, and congrats on all the great progress, and thanks for the update on Neutron. Adam, maybe want to start with the backlog. I'm wondering if you can maybe help us build, drill a bit deeper in it and maybe remind us what is included in here. Does this include the 40% of revenue from SDA Tranche 2, 10% of maybe the Tranche 3? What are you including from Neutron and Electron here? Thank you.

I'm sorry, Mike went off. Um,

I don't know how much you caught of that. So the all of the SDA contracts were added to backlog. So, what remains for SDA? Tranche 2 transport layer. Um, is still in the backlog. Obviously, what's been recognized as revenue is no longer there, uh, through the end of Q4, we hadn't recognized any of the tranche 3 contract Awards. So, all of that value is currently in backlog and that will start to convert into revenue and come out of backlog. Obviously, in that process,

Hey everyone, uh, good afternoon. Uh, thanks so much for taking our questions and congrats on all the great progress. And, and thanks for the update on, uh, on Neutron, um, Adam maybe want to start with the, uh, the backlog. Um, I'm wondering if you can maybe, um, help us. Um, build a drill, a bit deeper in it and maybe remind us, what is included in here. Does this include the 40% of revenue from SDA trench 2? 10% of, maybe the tranche 3 and what are you including from Neutron? And electron here. Thank you.

um, as far as neutrons concerned, I think we've spoken before that, um,

The the we we have several flights that are representative uh in our launch backlog. That's that's reflected in in our filings. So hopefully that uh that answers your question back, what composition

Adam Spice: Hello. I'm sorry, the mic went off. I don't know how much you caught of that. The, all of the SDA contracts were added to backlog. Still in the backlog. Obviously, what's been recognized as revenue is no longer there. Through the end of Q4, we hadn't recognized any of the Tranche 3 contract awards, all of that value is currently in backlog, that will start to convert into revenue and come out of backlog, obviously, in that process. As far as Neutron's concerned, I think we've spoken before that we have several flights that are representative in our launch backlog that's reflected in our filings. Hopefully that answers your question on backlog composition.

I'm sorry, Mike went off. Um,

Yeah, that's helpful. Thank you. Um, and maybe just as a follow-up. So, you know, on Neutron with the shift to Q4. Now, with the first launch, how should we think about Cadence? You know, will you still Target maybe 3 launches within the the first 12 months after the first 1? How confident are we in the development of the second tank and wondering, if maybe we should expect any Step Up in capex? Now, with the second tank in production. Thank you.

I don't know how much you caught of that. So the all of the SDA contracts were added to back while in the backlog. Obviously, what's been recognized as revenue is no longer there, uh, through the end of Q4, we hadn't recognized any of the tranche 3 contract Awards. So, all of that value is currently in backlog and that will start to convert into revenue and come out of backlog. After obviously, in that process,

Um, as far as Neutrons are concerned, I think we've spoken before that, um,

Then we we have several flights that are representative uh in our launch backlog. That's that's reflected in in our filings. So hopefully that uh that answers your question, backlog composition.

Andres Sheppard: Yeah, that's helpful. Thank you. Maybe just as a follow-up: so, you know, on Neutron, with the shift to Q4 now with the first launch, how should we think about cadence? You know, will you still target maybe three launches within the first 12 months after the first one? How confident are we in the development of the second tank? Wondering if maybe we should expect any step up in CapEx now with the second tank in production. Thank you.

Peter Beck: Adam, I can answer a couple of those and maybe you answer some as well. Andreas, you know, with respect to, you know, the tank, I think, you know, it's well understood, you know, what needs to be done there. You know, we had built a lot of the second stage tank on the AFP machine, you know, that really solves that problem. Yeah, the way to think about the sort of follow-on flights is, it's not quite, you know, as dire as, like, moving all of the follow-on flights 12 months, you know, or to the, you know, to the first flight.

Hey, Mark, I can answer a couple of those, and maybe you and some of it as well. Um,

Adam, I can answer a couple of those and, and, and maybe you, you and someone as well. Um, and, uh, so, um, you know, with, with, with respect to, uh, you know, the, the tank I think, you know, it's it's well, understood. Um, you know, what, what needs to be done there? And, um, you know, we're built, uh, a lot of the second stage tank on the FP machine. So, um, you know, that, that, that that really, um, that really solves that problem. And, um, yeah, the way to think about, just sort of follow on flights is it's, it's not, it's not quite, um, you know, is is dire is like moving all of the, the following flights 12 months. Um, you know, or to the, you know, to the first flight because as you've seen, in the presentation, we're already building flat out, um, additional Neutron tail numbers so, um, it'll probably be a b, a a slightly faster convergence um, into into subsequent flights. Um, because, you know, none of the other Hardware that's qualified as being halted. Obviously is just just that tank and the AFP machine enables

Way more rapidly than um, than than with a with a hand lay process. So you know, I think I think we'll be in better shape their

Peter Beck: Because as you've seen in the presentation, we're already building flat out, additional Neutron tail numbers. It'll probably be a slightly faster convergence into subsequent flights, because, you know, none of the other hardware that's qualified is being halted obviously, it's just that tank. The AFP machine enables us to build a tank just way more rapidly than with a hand-laid process. You know, I think we'll be in better shape there.

And rest. Uh, so, um, you know, with with, with, with respect to, uh, you know, the, the tank I think, you know, it's it's well, understood. Um, you know, what, what needs to be done there? And, um, you know, we built, uh, a lot of the second stage tank on the AFP machine. So, um, you know, that, that, that, that really, um, that really solves that problem. And, um, yeah, the way to think about, just sort of follow on flights is it's, it's not, it's not quite, um, you know, is is dire is like moving all of the, the following flights 12 months, um, you know, or to the, you know, to the first flight because as you've seen, in the presentation, we're already building flat out, um Edition

Yeah, and Andre I guess with regards to your question. Um what as far as capex and so forth related to the second tank? That's replacing the first 1 that ruptured, I mean the benefit. Now as Pete said of being on, the AFP is not only can we produce it faster but the actual cost to produce that second tank is quite low. The first tank was very expensive because, as Pete mentioned earlier, you know, was a hand laid up tank, it took a long time, this will be much quicker. And also, you know, since we've now commissioned the AFP, we're really just talking about variable costs for these, the tank materials more than anything else because the existing labor is already kind of in the model. So there won't be any increased capex. And, you know, the impact to R&D is a result of the tank failure is actually not.

That tank itself is actually not that significant.

Got it, that's super helpful. Thanks so much for all the detail and congrats again on the quarter. I'll pass it on.

Additional Neutron tile numbers. So, um, it'll probably be a a slightly faster convergence, um, into into subsequent flights. Um, because, you know, none of the other Hardware that's qualified is being halted. Obviously, it's just just that tank and the AFP machine enables us to build a tank just way more rapidly than um than than with a with a hand lay process. So, you know, I think I think we'll be in better shape their

Adam Spice: Yeah. Andre, I guess with regards to your question, as far as CapEx and so forth related to the second tank that's replacing the first one that ruptured. I mean, the benefit now, as Pete said, of being on the AFP is not only can we produce it faster, but the actual cost to produce that second tank is quite low. The first tank was very expensive because as Pete mentioned earlier, you know, it was a hand-laid-up tank. It took a long time. This will be much quicker, and also, you know, since we've now commissioned AFP, we're really just talking about variable costs related to the tank materials more than anything else, 'cause the existing labor is already kind of in the model.

Thank you. Our next question comes from Edison you with Deutsche Bank, your line is open.

Thank you. And, uh,

The great quarter. As as always I want to ask a a question on on Space data centers.

Adam Spice: There won't be any increased CapEx, and, you know, the impact to R&D as a result of the tank failure is actually not-- the tank itself is actually not that significant.

It’s the ways of the tank materials, more than anything else, because the existing labor is already kind of in the model. So, there won't be any increased CapEx. And, you know, the impact R&D is a result of the tank. Failure is actually not.

That tank itself is actually not that significant.

And I think you had alluded to, you know, a lot of interest I think it's obviously become Hot Topic in Industry. Can you give us a sense on how the, how these kind of early discussions are going with with potential customers interested in, in doing this. And is it realistic to see some type of Rocket lab content in a space data center? Let's say within the next 2 or 3 years,

Andres Sheppard: Got it. That's super helpful. Thanks so much for all the detail. Congrats again on the quarter. I'll pass it on.

Got it, that's super helpful. Thanks so much for all the detail, and congrats again on the quarter. I'll pass it on.

Operator: Thank you. Our next question comes from Edison Yu with Deutsche Bank. Your line is open.

Thank you. Our next question comes from Edison U with Deutsche Bank. Your line is open.

Edison Yu: Thank you, and great quarter, as always. I wanted to ask a question on space data centers, and I think you had alluded to, you know, a lot of interest. I think it's obviously become a hot topic in the industry. Can you give us a sense on how these kind of early discussions are going with potential customers interested in doing this? Is it realistic to see some type of Rocket Lab content in a space data center, let's say, within the next two or three years?

Thank you and uh great quarter as as always I want to ask a a question on on Space data centers.

And I think you had alluded to, you know, a lot of interest I think it's obviously become Hot Topic in the industry. Can you give us a sense on how the, how these kind of early discussions are going with with potential customers interested in, in doing this? And is it realistic to see some type of Rocket lab content in a space data center? Let's say within the next 2 or 3 years,

Peter Beck: Hey, Edison, thanks for the question. I think, look, we're early with data centers. If you, if you look at some of the models, there's a number of things that sort of have to come into focus before they become the logical choice versus terrestrial. You know, we never want to miss an opportunity. You know, we've been developing these silicon arrays and power solutions for a while now, focusing on mega constellations, and, you know, these, you know, high, high volume power applications. If you stand back objectively and you think about what are all the challenges with putting, you know, data centers in orbit, it boils down to really three things.

Hey, Edison, thanks for the question. Um, so I think look, we're, we're early with with data centers. Um, if you, if you look at some of the models, there's a number of things that sort of have to come into Focus before they become, uh, The Logical Choice versus, um, terrestrial. But, um, you know, we never want to miss an opportunity and, um, you know, we've been developing, uh, these silicon arrays and and Power Solutions for a while now, uh, focusing on Mega constellations. Um, and you know, these these, you know, hi, um, high volume, uh, Power applications. But, uh, if you stand back objectively and you think about what are all the challenges with with putting? Um, you know, data centers in orbit? Uh there's it boils down to to to Really 3 things. Um 1 is uh cost and Cadence of launch um to to be able to make the model close and then 2 is heat rejection. Um through various means and 3 is just sheer power. Like these are gigawatts of of electricity electrical.

Hey Edison. Uh, thanks for the question. Um, so I think, look, we're early with data centers. Um, if you look at some of the models, there's a number of things that sort of have to come into focus before they become, uh, the logical choice versus, um, terrestrial. But, um, you know, we never want to miss an opportunity. And, um, you know, we've been developing, uh, the silicon.

Power. So uh, you know, solar arrays of multi kilometers in in scale are are, um, what's needed? So, you know, we wanted to make sure that, um, that uh, you know, whether they they, they leave this earth or not. Um, there'll be rocket, lab logos all over that stuff. So, um, you know, as far as I'm aware there, there's nobody else. Has a has a silicon solution, quite like we've developed.

Peter Beck: One is cost and cadence of launch to be able to make the model close, and then two is heat rejection through various means, and three is just sheer power. Like, these are gigawatts of electrical power. You know, solar arrays of multi-kilometers in scale are what's needed. You know, we wanted to make sure that, you know, whether they leave this earth or not, there'll be Rocket Lab logos all over that stuff. You know, as far as I'm aware, there's nobody else has a silicon solution quite like we've developed.

Understood and to a point on on heat rejection, I, I guess the radiator. Is that a, a capability? You you have in house that you need to develop over time um, or or is that something, you know, an organic just just curious on on what needs to be kind of technically done there.

Yeah, I mean, look, all of our spacecraft have radiators, I mean, you, you you generate heat. Um, you have to, you have to reject it. So, um, you know, uh, there's various various kind of ways of doing that piping heat around the spacecraft radiate it. So, uh, I don't I don't see that as um, as, as a huge, uh, technical challenge. It's just um, you know, on the, on the scale.

Rise and and Power Solutions for a while now, uh, focusing on Mega constellations. Um, and you know, these these, you know, hi, um, high volume, uh, Power applications. But, uh, if you stand back objectively and you think about what are all the challenges with with putting? Um, you know, data centers in orbit? Uh there's it boils down to to to Really 3 things. Um 1 is uh cost and Cadence of launch um to to be able to make the model close and then 2 is heat rejection. Um, through various means and 3 is just sheer power. Like these are gigawatts of of electricity electrical power, so uh, you know, solar arrays of multi kilometers in in scale are are, um, are what's needed? So, you know, we wanted to make sure that, um, that, uh, you know, whether they, they, they leave this earth or not. Um, they'll be rocket lab logos all over that stuff. So, um, you know, as far as I'm aware there, there's nobody else. Has a has a silicon solution.

Quite like we've developed.

Edison Yu: Understood. To your point on heat rejection, I guess the radiator, is that a capability you have in-house that you need to develop over time, or is that something, you know, inorganic? Just curious on what needs to be kind of technically done there.

The scale that's required is is um, you know, hasn't hasn't been achieved before. So that's you know, that that's, that's the challenge there. But to be clear, I mean, I I don't, you know, I don't foresee us building massive AI data centers anytime soon, but, uh, those who are are at least experimenting with it and, um, and looking to go down that path. Uh, I think we have a lot of compelling Solutions,

Understood and to your point uh, heat rejection. I, I guess the radiator. Is that a, a capability? You, you have in house that you need to develop over time, um, or or is that something, you know, an organic just just curious on on what needs to be kind of technically done there.

Peter Beck: Yeah, I mean, look, all of our spacecraft have radiators. I mean, you generate heat, you have to reject it. You know, there's various kind of ways of doing that, piping heat around the spacecraft to radiate it. I don't see that as a huge technical challenge. It's just, you know, on the scale that's required is, you know, hasn't been achieved before. That's, you know, that's the challenge there. To be clear, I mean, I don't, you know, I don't foresee us building massive AI data centers anytime soon.

Gotcha. If I could just sneak 1 quick 1 in, um, in terms of just the the discussions can you can you give us a sense of like, the flavor of customers? Are these kind of new customers non-traditional customers? Kind of exploring this, this idea with you.

Yeah, I mean, we have to be a little bit careful here, but I would say that, um, the there is, uh, there's a there's, you know, certainly more non-traditional looking at at this kind of solution than traditional players.

Great, thank you so much.

Peter Beck: Those who are at least experimenting with it and looking to go down that path, I think we have a lot of compelling solutions.

Thank you. Our next question comes from Ronald Epstein with Bank of America, your line is open.

Hear me all right.

Yep, we can hear you.

Yeah, I mean, look, all of this spacecraft have radiators, I mean, you, you you generate heat. Um, you have to, you have to reject it. So, um, you know, uh, there's various various kind of ways of doing that piping heat around the spacecraft radiate it. So I don't, I don't see that as, um, as, as a huge, uh, technical challenge. It's just, um, you know, on the, on the scale, the scale that's required is is, um, you know, hasn't hasn't been achieved before. So that's you know, that that's, that's the challenge there. But to be clear, I mean, I I don't, you know, I don't foresee us building massive AI data centers anytime soon, but, uh, those who are are at least experimenting with it and, um, and looking to go down that path. Uh, I think we have a lot of compelling Solutions,

Edison Yu: Gotcha. If I could just sneak one quick one in. In terms of just the discussions, can you give us a sense of, like, the flavor of customers? Are these kind of new customers, nontraditional customers, kind of exploring this idea with you?

Perfect. Um,

so, I know you talked a little bit about

Progress on the Monarch acquisition but I was a little more interested, maybe broadly in the environment in Europe and more generally, right? It seems like there's a growing appetite for

call it indigenous launch and National Security space capabilities.

Peter Beck: I mean, we have to be a little bit careful here, but I would say that, there's, you know, certainly more nontraditionals looking at this kind of solution than traditional players.

and I'm interested if you sort of see this trend yourself or how you see this developing, I know, you know, people mentioned

Edison Yu: Great. Thank you so much.

No other small. Launch provider has really succeeded in the last year, but it's still a I think focused for a lot of people.

Great, thank you so much.

Operator: Thank you. Our next question comes from Ronald Epstein with Bank of America. Your line is open.

Thank you. Our next question comes from Ronald Epstein with Bank of America, your line is open.

Alex Preston: Hey, this is Alex Preston on for Ron. Can you guys hear me all right?

Uh, hey, this is Alex Preston on for Ron. Can you guys hear me all right?

Edison Yu: Yep, we can hear you.

Adam Spice: Yep, we can hear you.

Alex Preston: Perfect. I know you talked a little bit about progress on the Mynaric acquisition, but I was a little more interested, maybe broadly in the environment in Europe and more generally, right? It seems like there's a growing appetite for, call it, indigenous launch and national security space capabilities. I'm interested if you sort of see this trend yourselves or how you see this developing. I know, you know, Pete mentioned no other small launch provider has really succeeded in the last year, but it's still a, I think, focus for a lot of people.

Yep, we can hear you.

Perfect. Um,

So, I know you talked a little bit about

Progress on the Monarch acquisition but I was a little more interested, maybe broadly in the environment in Europe and more generally, right? It seems like there's a growing appetite for

call it indigenous launch and National Security space capabilities and I'm interested if you sort of see this trend yourselves or how you see this developing I know, you know, Pete mentioned

Peter Beck: Yeah. Hey, Alex, it's a great question. Look, one of the reasons why we like Mynaric and, you know, why we think it's important, Europe more in general, is exactly that point, is that there's a lot of space nations there that have very little capability with giant aspirations and really short time frames. I think it's always everybody's desire to build domestic capabilities. The reality is, if you want to stand up these kind of capabilities really, really quickly, you don't have the decades that it takes to build often these sovereign capabilities. They're very specialist, often like equipment and facilities and also intellectual property and knowledge.

Yeah, yeah, Alex, it's a great question. Um, look, 1 of the reasons why, uh, we like monarch and and you know, we why why we we think it's important, um, Europe and more Europe, more in general, is is exactly that point. Is that, um, there's a lot of space Nations there that have very little capability with giant aspirations and really short time frames. And uh, I think it's it's always everybody's desire to build um domestic capabilities. But the reality is um, if you want to stand up, these kind of capabilities really, really quickly. Um, you you don't have the decades that it takes to, to build often these, these Sovereign capabilities. Um, they're very specialist, uh, often like equipment and facilities and also intellectual property and knowledge. So we we see Europe as a as a, a great opportunity for us and a real, um, you know, expansion Beach here.

Peter Beck: We see Europe as a great opportunity for us and a real, you know, expansion beachhead where, you know, we can provide solutions at the component level. We can provide solutions at the complete system, with respect to a satellite. We can provide launch. You've seen even European space agencies procure launch from us now. Once we have, you know, a footprint in Europe proper, you know, being eligible for participating in European programs becomes possible. No, I think, I think it's a great opportunity. There's, you know, literally billions and billions of dollars of, you know, well-funded government programs underway right now.

Where, um, you know, we we can provide Solutions at the component level. We can provide Solutions at the complete system, um, with respect to a satellite, we can provide launch, um, and you've seen uh, even European space agencies, um, procure launch from us now. And, uh, you know, once we have, um, uh, you know, a footprint in Europe, uh, proper, uh, you know, being a analog being eligible for participating in in Europe, European programs becomes possible. So I think I think, uh, it is, um, it's a great opportunity. There's there's, you know, literally billions and billions of dollars of, uh, of, you know, well-funded government programs, um, underway right now and and, uh, you know, the, the timelines associated with those, uh, are conducive more. I would say, not conducive necessarily always to, you know, creating Sovereign capability.

Got it. And then I guess it would sound like

Yeah. Hey Alex, it's a great question. Um, look, 1 of the reasons why, uh, we like monarch and and you know why? Why we we think it's important, um, Europe and more Europe, more in general, is is exactly that point. Is that, um, there's a lot of space Nations there that have very little capability with giant aspirations and really short time frames. And uh, I think it's it's always everybody's desire to build um, domestic capabilities. But the reality is, um, if you want to stand up, these kind of capabilities really, really quickly. Um, you you don't have the decades that it takes to, to build often these, these Sovereign capabilities. Um, they're very specialist, uh, often like equipment and facilities and also intellectual property and knowledge. So we we see Europe as a as a, a great opportunity for us in a real, um, you know, expansion Beach head where, um, you know, we we can provide solutions that the component level we can provide Solutions at the complete system.

the attitude is still broadly constructive from what you said versus

Maybe Europe, starting to get a little more distant from us-based providers.

Um, with respect to a satellite, we can provide launch, um, and you've seen, uh, even European Space Agencies, um, uh, procure launch from us now. And, uh, you know, once we have, um, uh, you know, a footprint in Europe, uh, proper, uh, you know, being able and being eligible for, uh, participating in, in Europe, and European programs becomes possible. So, I think, I think, uh, it is, um, it's a great opportunity. There is, you know, literally billions and billions of dollars.

No, I think, I think it's very constructive. I, I think, you know, naturally that Europe is looking to create Sovereign capability, but um, I think that also, you know, the conversations we've had they're very pragmatic and realistic that um, you know, as the capability they're looking to create takes a long time. So um, you know, uh, working with, for example, a rocket lab Europe, um, is is a great way to, um, to move forward.

Peter Beck: You know, the timelines associated with those, are conducive or I would say not conducive necessarily always to, you know, creating sovereign capability.

And just real quick, would you characterize that the same on launch as you would on Space Systems? Where I think there's a bit more existing indigenous capability in Europe already.

Of, uh, of, you know, well-funded government programs, um, underway right now and and, uh, you know, the, the timelines associated with those, uh, are conducive. Well, I would say, not conducive necessarily, always to, you know, creating solving capability.

Alex Preston: Got it. I guess it would sound like the attitude is still broadly constructive from what you said, versus maybe Europe starting to get a little more distant from US-based providers.

Got it. And then I guess it would sound like

the attitude is still broadly constructive from what you said versus

Maybe Europe, starting to get a little more distant from us-based providers.

Peter Beck: No, I think it's very constructive. I think, you know, naturally, Europe is looking to create sovereign capability, but, I think also, you know, the conversations we've had, they're very pragmatic and realistic that, you know, the capability they're looking to create takes a long time. You know, working with, for example, a Rocket Lab Europe, is a great way to move forward.

No, I think it's very constructive us. I think, you know, naturally, Europe is looking to create Sovereign capability. But um, I think also, you know, the conversations we've had they're very pragmatic and realistic that, um, you know, the capability they're looking to create takes a long time. So um, you know, uh, working with, for example, a rocket lab Europe, um, is is a great way to, um, to move forward.

Alex Preston: Just real quick, would you characterize that the same on launch as you would on space systems, where I think there's a bit more existing indigenous capability in Europe already?

And just real quick, would you characterize that the same on launch as you would on Space Systems? Where I think there's a bit more existing indigenous capability in Europe already.

Yeah, there's certain giving it a good, a good college try. Um, but not having tremendous success. I would say. Um, but that is that is just how difficult launch, uh, launch is. Um, but uh, you know, I think launches is just so strategically important, you can build all the satellites you want, but if you can't put them in all, but it's kind of pointless. So, um, this is the reason why, uh, you know, you have, um, the European Union and and Esther's, uh, launch vehicles, um, that, you know, on the face of it aren't that commercially competitive, but they will never go away because, you know, the Nations need access to orbit. So, um, you know, I I would, I would expect to see that persist for some time, um, and you know, continued Investments made in, uh, in into into launch, um, for, for the, you know, for Europe. Um, but um, in saying that,

Peter Beck: Yeah, they're certainly giving it a good college try, but not having tremendous success, I would say. That is just how difficult launch is. You know, I think launch is just so strategically important. You can build all the satellites you want, but if you can't put them in orbit, it's kind of pointless. This is the reason why, you know, you have the European Union and ESA's launch vehicles that, you know, on the face of it aren't that commercially competitive, but they'll never go away because, you know, the nations need access to orbit.You know, I would expect to see that persist for some time, and, you know, continue investments made into launch, for the, you know, for Europe. In saying that, you know, everyone's pragmatic, and if you need to get stuff to orbit, then, you know, pick up the phone.

uh, you know, everyone's pragmatic and if you need to get stuff to all but then um,

You know, pick up the phone.

Got it. Thank you very much for the call.

Thank you. Our next question comes from Eric rasmusen with steal. Your line is open.

Yeah, they’re certainly giving it a good, a good college try. Um, but not having tremendous success, I would say. Um, but that is just how difficult launch, uh, launch is. Um, but uh, you know, I think launch is just so strategically important. You can build all the satellites you want, but if you can’t put them in, it’s kind of pointless. So, um, this is the reason why, uh, you know, you have, um, the European Union and, and ESA's, uh, launch,

Peter Beck: You know, I would expect to see that persist for some time, and, you know, continue investments made into launch, for the, you know, for Europe. In saying that, you know, everyone's pragmatic, and if you need to get stuff to orbit, then, you know, pick up the phone.

Vehicles, um, that, you know, on the face of it, aren't that commercially competitive, but they will never go away because, you know, the Nations need access to orbit. So, um, you know, I would, I would expect to see that persist for some time, um, and you know, continued Investments made in, uh, in into into launch, um, for, for the, you know, for Europe. Um, but um, in saying that,

uh, you know, everyone's pragmatic and if you need to get stuff to all but then um,

You know, pick up the phone.

Adam Spice: Got it. Thank you very much for the color.

Got it. Thank you very much for the call.

Operator: Thank you. Our next question comes from Erik Rasmussen with Stifel. Your line is open.

Has to be also, when considering that, you know, that probably needs to have a higher level of reliability. And then with that, are you still um, uh, targeting this as a recovery mission?

Thank you. Our next question comes from Eric rasmusen. With stifel your line is open.

Erik Rasmussen: Thank you for taking the questions. Maybe just back on Neutron. I appreciate the sort of the update on cadence, and it sounds like with the push-out, naturally, you continue to sort of build out some of those more capabilities and just Neutron, the infrastructure around Neutron. Post sort of test flight, and if we think that's sort of Q4, and if it's late Q4, I don't know the timing, what do you think then that first revenue flight, when do you think the timing around that could be? When considering that, you know, that probably needs to have a higher level of reliability. Then with that, are you still targeting this as a recovery mission?

Yeah. Hi Eric. Thanks for the question. Um, so you know, the timing of Flight 2 will always depend on the results of flight 1. Um, you know, if if uh, if if flight 1 goes swimmingly then um, you know, the time to to get the second vehicle on the pad. Um, you know, we'll we'll Endeavor to make sure as possible, uh, if there's, if there's things to fix this, this, this kind of things to fix.

Yeah, thank you for taking the questions. Um, maybe just back on Neutron. Um, I appreciate the so that the update on Cadence and it sounds like, uh, with the push out naturally. You, you continue to sort of build out, uh, some of those, uh, more capabilities and and just Neutron and the infrastructure around Neutron, um, but post sort of tests. Like and if we think that sort of Q4 and if it's late Q4, I don't know the timing. But um, what do you think then that first Revenue flight? Um, when you think the timing around that could be it. Also, when considering that, you know, that probably needs to have a higher level of reliability. And then with that, are you still um, uh

Targeting this as a recovery mission.

Peter Beck: Yeah. Hey, Erik, thanks for the question. You know, the timing of flight 2 will always depend on the result of flight 1. You know, if flight 1 goes swimmingly, then, you know, the time to get the 2nd vehicle on the pad, you know, we'll endeavor to make as short as possible. If there's things to fix, there's kind of things to fix. You know, nominally, the, you know, the timing is, it remains consistent to what we've, what we've kind of talked about. You know, the vehicle will be outfitted with, you know, all of its kind of requirements for, you know, flight 1, even for a downrange landing.

But you know normally the the you know, the timing is it remains consistent to what we've um, what what we've kind of talked about. And um, you know, the vehicle will be outfitted with um, uh, you know, all of its all of its kind of requirements for, you know, flight 1, even for, uh, a downrange landing, you know, we, we will attempt to do the re-entry and Landing burn and splash it down. Um, once again, uh, if all that goes, well, then the next 1 we would intend to slip a barge under, um, if we, if we poll drive it into the ocean, um, then you know, we'll probably, uh, you know, go to a flight to, um, and and get that soft Landing right before we we go and put infrastructure under that, that, um, could could be costly to, damn, you know, if we if we damaged

This, this kind of things to fix.

Great. And and maybe just on an electron, um, you had a, a nice large campaign in 2025 21, successful launches. Um, what does the Manifest? Uh, and internal planning suggests of this year? Uh, and then maybe just a mix between, you know, your standard electron missions and and haste.

Peter Beck: You know, we'll attempt to do the reentry and landing burn and spaceship down. Once again, if all that goes well, then the next one, we would intend to slip a barge under. If we pole drive it into the ocean, then, you know, we'll probably, you know, go to a flight 2, and get that soft landing right before we go and put infrastructure on. That could be costly to them, you know, if we damaged.

But you know normally the the you know, the timing is it remains consistent to what we've um, what what we've kind of talked about. And um, you know, the vehicle will be outfitted with um, uh, you know, all of its all of its kind of requirements for, you know, flight 1, even for, uh, a downrange landing, you know, we, we will attempt to do the re-entry and Landing burn and splash it down. Um, once again, uh, if all that goes, well, then the next 1 we would intend to slip a barge under, um, if we, if we poll drive it into the ocean, um, then you know, we'll probably, uh, you know, go to a flight to, um, and and get that soft Landing right before we go and put infrastructure around that, that, um, could could be costly to, damn, you know, if we, if we damaged

Yeah, I mean, uh, I'm not sure how much we have. Uh, We've disclosed about that. But I mean, um, certainly this year we're looking for, uh, you know, more launch than than, um, than than last year. Um, you know, as you as you saw, uh, the bookings and manifest a bulging. Um, and, you know, we're being an electrons out every sort of 11 or 13 days now. So, um, that's that's going, uh, extremely well. But, um, I'll pass over to, to, to Adam if he wants to comment on. Um,

Erik Rasmussen: Great. Maybe just on Electron, you had a nice launch campaign in 2025, 21 successful launches. What does the manifest and internal planning suggest for this year? Then maybe just the mix between, you know, your standard Electron missions and HASTE.

On uh, you know, launch schedule for the year.

great and and maybe just start an electron. Um, you had a, a nice large campaign in 2025, 21st, or launches, um, what does the Manifest uh, and internal planning suggests for this year? Uh, and then maybe just a mix between, you know, your standard electron missions and and Heat.

Peter Beck: Yeah, I mean, I'm not sure how much we've disclosed about that, but I mean, certainly this year we're looking for, you know, more launch than last year. You know, as you saw, the bookings and manifest are bulging, and, you know, we're banging Electrons out every sort of 11 or 13 days now. That's going extremely well. I'll pass over to Adam, if he wants to comment on, you know, launch schedule for the year.

Yeah, Eric. So I think consistent with prior discussions, you know, we see we see good growth opportunities in electronic and when I say electronic, I mean electronic and he so I think you'd expect, you know, increase in both standard electron launches plus growth in the haste side of the business, you know, we've normally Point people towards kind of 20% growth, you know, I think is, is, is a pretty

you know, kind of

On, uh, you know, launch schedule for the year.

Adam Spice: Yeah, Erik. I think consistent with prior discussions, you know, we see good growth opportunities in Electron. When I say Electron, I mean Electron and HASTE. I think you'd expect, you know, increase in both standard Electron launches plus growth in the HASTE side of the business. You know, we've nominally pointed people towards kind of 20% growth. You know, I think is a pretty, you know, kind of, I would say, reasonable estimate for where we see this business growing over the near and intermediate to maybe the long term. I would say, you know, we've certainly given the production team direction to produce, you know, significantly more rockets in 2026 and in 2025.

I would say, I would say, reasonable estimate for where we see this business growing over the near and intermediate to maybe long-term. Uh, so I would say, you know, we we certainly given the production team direction to produce. Um, you know, significantly more rockets in 2026 than in 2025. And, as Pete mentioned on the call earlier, we, we booked over 30 electron launches, uh, in 25 and we always get turns orders. So look, I, I think if you kind of nominally assume a 20% growth in income to launch business, excluding Neutron, of course, I, I think that's probably a pretty good place to be.

It's helpful, thanks.

Thank you. Our next question comes from Trevor Walsh with citizens. Your line is open.

Yeah, Eric. So I think consistent with prior discussions, you know, we see we see good growth opportunities in electron. And when I say electronic, I mean, electron in haste. So I think you'd expect, you know, increase in both standard electron launches plus growth in the haste side of the business, you know, we've normally played people towards kind of 20% growth, you know, I think is, is, is a pretty

you know, kind of

Adam Spice: As Pete mentioned on the call earlier, we booked over 30 Electron launches in 2025, and we always get turns orders. Look, I think if you kind of nominally assume a 20% growth in kind of the launch business, excluding Neutron, of course, I think that's probably a pretty good place to be.

I would say, I would say, reasonable estimate for where we see this business growing over the near and intermediate to maybe long term. Uh, so I would say, you know, we we certainly given the production team direction to produce, um, you know, significantly more rockets in 2026 and in 2025. And as Pete mentioned on the call earlier we we booked over 30 electron launches in 25 and we always get turns orders. So, look, I, I think, if you kind of nominally assume a 20% growth in, in kind of the launch business, excluding Neutron, of course, I, I think that's probably a pretty good place to be.

Erik Rasmussen: Sounds cool. Thanks.

It's helpful, thanks.

Great. Hey team. Thanks for taking the questions. Uh, Peter maybe first for you, uh, you some of your prepared remarks around the OSI acquisition made it made it sound like, that was even even further enabling you, um, with the customer as far as just attractiveness, um, for for your services or capabilities, even though it sounded like from the announcement, that OSI was actually already in the chain of suppliers with, with Geo. So, is, is the customer that focused really? Then can we assume on just the vertical integration aspect or is there also just capabilities, you know, functionality features of that acquisition from a systems perspective that are also attractive just trying to gauge kind of how you think customers are really looking at this, if that makes sense. Yes, yeah. No, that's a great question, Trevor. And and you know,

Operator: Thank you. Our next question comes from Trevor Walsh with Citizens. Your line is open.

Thank you. Our next question comes from Trevor Walsh with Citizens. Your line is open.

Trevor Walsh: Great. Hey, team. Thanks for taking the questions. Peter, maybe first for you. Some of your prepared remarks around the OSI acquisition made it sound like that was even further enabling you with the customer as far as just attractiveness for your services, your capabilities, even though it sounded like from the announcement that OSI was actually already in the chain of suppliers with Geost. Is the customer that focused really, then, can we assume on just the vertical integration aspect, or is there also just capabilities, you know, functionality features of that acquisition from a systems perspective that are also attractive? Just trying to gauge kind of how you think customers are really looking at this, if that makes sense?

Peter Beck: Yes. Yeah, no, that's a great question, Trevor. You know, to be fair, the customers probably don't care that much, other than the fact what they really care about is, does their sensor arrive on time at a cost and a performance capability that they've never seen before? That's what we're delivering. In order for us to be able to guarantee we deliver that, the most critical element of many of these optical systems are in fact, the optics. So, you know, bringing and owning that optics in-house, you know, really drives, you know, certainty for us around cost and schedule and innovation. Yeah, they were a supplier to Geost, that's for sure.

Great 18. Thanks for taking the questions. Uh, Peter maybe first for you, you some of your prepared remarks around the OSI acquisition made, it made it sound like, that was even further enabling you, um, with the customer as far as just attractiveness, um, for for your services or capabilities, even though it sound like from the announcement, that OSI was actually already in the chain of suppliers with, with Gio. So is, is the customer that focused really? Then can we assume on just the vertical integration aspect or is there also also just capabilities, you know, functionality features of that acquisition from a systems perspective that are also attractive. Just trying to gauge kind of how you think customers really looking at this. That makes sense. Yes. Yeah, yeah. No. That's a great question, Trevor. And, and, you know, to be fair the, the customers probably don't care that much. Um, other than the fact, what they really care about is, uh, does their sensor arrive on time at a cost and a and a performance capability that they've never seen before. And that's what we're that's what we're delivering.

Uh, business. The first thing we sat down with the leadership team there and said right, where, where are the, where are the the critical supply chain elements? That might trip us up and been able to deliver, you know, really disruptive, um, and um, and affordable, um, you know, parts and or programs for our customers. And, and this was a number number 1 thing. I think this makes us very unique amongst the other, the other suppliers of payloads, who are Outsourcing Optics and um, you know, it is, it is the most expensive, the most longest lead item uh in any of these explicit Optical payloads. So you know it was important to owner

Peter Beck: You know, when we acquired the Geost business, the first thing we sat down with the leadership team there and said, Right, where are the critical supply chain elements that might trip us up and being able to deliver, you know, really disruptive and affordable, you know, parts or programs for our customers? This was the number one thing. I think this makes us very unique amongst the other suppliers of payloads who are outsourcing optics. You know, it is the most expensive, the most longest lead item in any of these exquisite optical payloads. You know, it was important to own it.

Terrific. Thanks for your super super helpful. Um Adam maybe just a quick follow up for you. Um for your prepared remarks commentary around the backlog and how trunch 3 is going to, you know sounds like it's maybe conservative in terms of the the what's going to be recognized in that first 12-month period. Can you just maybe walk us through a little bit of the puts and takes of how what's what's I guess? Influencing that trunch 3 rev wreck, is it just customer timing of when they want deliverables. What what's the just give us? Maybe a 1 level deeper. That'd be terrific.

And in order for us to be able to guarantee we deliver that the most critical element of many of these. Um, these Optical systems are, in fact, the Optics. Um, so, you know, bringing and owning that Optics in-house, um, you know, really, really drives. Uh, you know, certainly for us around cost and schedule and Innovation. Um, and it's yep. That they, they were a supplier to, to Geoff, that's for sure. Um, and you know, when we acquired The Geoff, uh, business, the first thing we sat down with the leadership team there and said, right? We we are the, where are the, the the critical supply chain elements? That might trip us up and been able to deliver, you know, really disruptive, um, and um, and affordable, um, you know, parts and or programs for our customers. And, and this was a number number 1 thing. I think this makes us very unique amongst the other, the other suppliers of payloads, who are Outsourcing Optics and um, you know, it is it is the most expensive of the most longest lead item uh in any of these Exquisite Optical payloads. So you know,

Trevor Walsh: Terrific. Thank you. Super, super helpful. Adam, maybe just a quick follow-up for you. For your prepared remark commentary around the backlog and how Tranche 3 is gonna, you know, sounds like it's maybe conservative in terms of what's gonna be recognized in that first 12-month period. Can you just maybe walk us through a little bit of the puts and takes of how what's influencing that Tranche 3 rev rec? Is it just customer timing of when they want deliverables? What's the? Just give us maybe a one level deeper, that'd be terrific.

Yeah, so I I think we've articulated previously that typically when you win 1 of these programs you you can recognize Revenue kind of like you know 10% in the first 12 months after a ward then 40% in the second 12 months. 40% in the third, 12 months in the last 12 months. It's about another 10%. So you got a pretty kind of normal bell curve. Um, what I, what I would say is that, you know, with a

Adam Spice: I think we've articulated previously that typically when you win one of these programs, you can recognize revenue kind of like, you know, 10% in the first 12 months after award, then 40% in the second 12 months, 40% in the third 12 months. In the last 12 months, it's about another 10%. You got a pretty kind of normal bell curve. What I, what I would say is that, you know, what really gates our ability to kind of move faster is really our subcon deliveries, right? What really either kind of helps us accelerate and get through these gates and milestones and rev rec quicker is our subcon's ability to deliver on time.

Perfect. Thanks for your super super helpful. Um, Adam maybe just a quick follow-up for you. Um, for your preparator mark commentary around the backlog and how tan 3 is gonna, you know, sounds like it's maybe conservative in terms of the the what's going to be recognized in that first 12 month period? Can you just maybe walk us through a little bit of the puts and takes of how what's what's I guess? Influencing that trunch 3 rev wreck, is it just customer timing of when they want deliverables. What what's the just give us? Maybe a 1 level deeper. That'd be terrific.

Yeah, so I think we've articulated previously that typically when you win one of these programs, you can recognize revenue kind of like, you know, 10% in the first 12 months after award, then 40% in the second 12 months, 40% in the third 12 months, and in the last 12 months, it's about another 10%. So you've got a pretty kind of normal bell curve. Um, what I would say is that, you know, with a

What we would really Gates our ability to kind of move faster is really our subcon deliveries, right? So what really either kind of helps us accelerate and get through these Gates and Milestones and rev wreck quicker is our subconscious ability to deliver on time. And so I think that, you know, that's all goes back to Pete was talking about earlier in the importance of vertical integration. So to the extent that we can just own more of the platform, we have greater control, uh, and that allows us to have more predictability to, you know, how we how we kind of, you know, time Revenue recognition and so forth. So I would say that, you know, a big job for us in 2026 is to, you know, across our engineering and production, you know, teams is to really make sure we stay on top of of what parts are still coming from third parties. Make sure that we, they stay on their deliverables, so we can kind of, you know, again, get the program accelerated as much as possible and get more of, that Revenue recognized. So, again, we go into it, pretty conservative. I think, you know what, we've what's, uh, if you look at the pure conversion that 37% I think there was mentioned earlier of of backlog, converting, I mean, obviously a portion of that is launched but the portion that's related in space system.

Adam Spice: I think that, you know, that's all goes back to what Pete was talking about earlier, and the importance of vertical integration. To the extent that we can just own more of the platform, we have greater control. That allows us to have more predictability to, you know, how we kind of, you know, time revenue recognition and so forth. I would say that, you know, a big job for us in 2026 is to, you know, across our engineering and production, you know, teams, is to really make sure we stay on top of what parts are still coming from third parties, make sure that they stay on their deliverables, so we can kind of, you know, again, get the program accelerated as much as possible and get more of that revenue recognized.

Some of that is coming from the components and subsystems completely unrelated to SDA tranche 2 and T 3. But what is in there for tanch? 3 is again assuming some pretty conservative delivery dates from our subconscious that hopefully we can we can work with them to to to do better.

Great, thanks. Both. I'll leave it there. Thanks for the questions.

What we, what really Gates, our ability to kind of move faster is really our subcon deliveries, right? So what really either kind of helps us accelerate and get through these Gates and Milestones and rev wreck quicker is our subconscious ability to deliver on time. And so I think that, you know, that's all goes back to Pete was talking about earlier in the importance of vertical integration. So to the extent that we can just own more of the platform, we have greater control, uh, and that allows us to have more predictability to, you know, how we how we kind of, you know, time Revenue recognition and so forth. So I would say that, you know, a big job for us in 2026 is to, you know, across our engineering and production, you know.

Your line is open.

Hey, you actually got Andre on, I don't know what happened there, but all good.

Adam Spice: Again, we go into it pretty conservative. I think, you know, what's, if you look at the pure conversion, that 37% I think that was mentioned earlier of backlog converting, I mean, obviously a portion of that is launch. The portion that's related to space systems, some of that is coming from the components and subsystems completely unrelated to SDA Tranche 2 and Tranche III. What is in there for Tranche III is again, assuming some pretty conservative delivery dates from our subcons that hopefully we can work with them to do better.

Um,

I wanted to ask about Space Systems, seems like it came in a little bit weaker than what consensus might have expected at first. So just wanted to know the puts and takes their. I know you explained it, but why might have consensus gone a little bit ahead here in the quarter?

no, that

Teams is to really make sure we stay on top of of what parts are still coming from third parties. Make sure that we, they stay on their deliverables, so we can kind of, you know, again, get the program accelerated as much as possible and get more of, that Revenue recognized. So, again, we go into it, pretty conservative. I think, you know what we've we what's uh, if you look at the pure conversion that 37%, I think there was mentioned earlier of of backlog, converting, I mean, obviously a portion of that is launched but the portion that's related in Space Systems, some of that is coming from the components and subsystems completely unrelated to SDA charge to and tranche 3. But what is in there for? Tranche 3 is again assuming some pretty conservative delivery dates from our subconscious that hopefully we can we can work with them to to to do better.

Trevor Walsh: Great. Thanks, both. I'll leave it there. Thanks for the questions.

Great, thanks. Both. I'll leave it there. Thanks for the questions.

Operator: Thank you. Our next question comes from Ned Morgan with BTIG. Your line is open.

Thank you. Our next question. Comes from Ned Morgan with btig. Your line is open.

Andre: Hey, you actually got Andre on. I don't know what happened there, but all good. I wanted to ask about space systems. Seems like it came in a little bit weaker than what consensus might have expected at first. Just wanted to know the puts and takes there. I know you explained it, why might have consensus gotten a little bit ahead here in the quarter?

Andre Madrid: Hey, you actually got Andre on. I don't know what happened there, but all good. I wanted to ask about space systems. Seems like it came in a little bit weaker than what consensus might have expected at first. Just wanted to know the puts and takes there. I know you explained it, why might have consensus gotten a little bit ahead here in the quarter?

Hey, you actually got Andre on, I don't know what happened there, but all good.

Um,

I wanted to ask about Space Systems, seems like it came in a little bit weaker than what consensus might have expected at first. So just wanted to know the puts and takes their, I know you explained it, but why might have consensus gotten a little bit ahead here in the quarter?

Adam Spice: Yeah. I don't know that that consensus does a great job in breaking out the various pieces of the business, even differentiating much between launch and space systems. Certainly within space systems, I'm not sure they really look at between kind of our platforms business versus the subsystems business. One of the things I mentioned this in my prepared remarks, is that it is difficult to, I would say, I mean, to the extent that you can control the execution for your rev rec requirements under ASC 606, it just depends on how well your subs are executing, right? How tightly you're working with them to make sure they stay on track.

Yeah, I don't know that.

that consensus does a great job in in breaking out the various pieces of the business even differentiating much between launch and Space Systems. And then certainly within Space Systems. I'm not sure they really look at between kind of our platforms business versus the subsystems business. So 1 of the things I mentioned this in my, in my prepared remarks is that it is difficult to, I would say, um, I mean you can't you the extent that you can control the execution for your rev wreck requirements under ASC 606. It just depends on how well your subs are executing, right, and how, how, how, how tightly you're working with them, to make sure they stay on track and to your best efforts. You know, I think we've all seen in in some fairly um public venues customers, you know, of these programs talking about how there's been some snags and supply chain, you know, including you know, from those, for example, like from the optical terminal providers. And so

That consensus does a great job in in breaking out the various pieces of the business even differentiating much between launch and Space Systems. And then certainly within Space Systems. I'm not sure they really look at between kind of our platforms business versus the subsystems business.

Adam Spice: To your best efforts, you know, I think we've all seen in some fairly public venues, customers, you know, of these programs talking about how there's been some snags in supply chain, you know, including, you know, from those, for example, like from the optical terminal providers. If you look at what we do is we continually look for ways, as Pete mentioned, to just reduce any kind of dependency on third parties as much as we can. That's why if you look at Electron, how vertically integrated that vehicle is. Neutron will be very similar. We're getting that way more and more with our space systems platform offerings, where very little is still, I would say, outsourced to third parties.

Space Systems business because 1 of the benefits that we have now from being such having such a diversified businesses. We we really just look at the Top Line, how can we deliver that sequential growth of the business and sometimes more of its going to come from launch and sometimes or it's going to come from Space Systems and within Space Systems, you know, platforms can have a great quarter and components can be weak and vice versa and then you know it just gets that much better and we'll have that many more tools at our disposal when we have Neutron coming online which is why obviously getting that first flight office. So important why we're all looking. So forward to that,

Yeah, no, that's super helpful. Thanks Adam. Um I guess to stick with you. I mean,

Adam Spice: It's really just a function of, you know, again, you work with them and get them to deliver as aggressively as you, as you possibly can, while not sacrificing quality, or cost where you can. Yeah, I wouldn't read too much into the granularity that people may have expected from our space systems business, because one of the benefits we have now from being having such a diversified business is we really just look at the top line. How can we deliver that sequential growth of the business? Sometimes more of it's gonna come from launch, and sometimes awards gonna come from space systems. Within space systems, you know, platforms can have a great quarter and components can be weak and vice versa.

So 1 of the things I mentioned this in my, in my prepared remarks is that it is difficult to. I would say, um, I mean you can't you said that you could control uh, the execution for your revre requirements, under ASC 606. It just depends on how well your subs are executing, right, and how, how, how, how tightly you're working with them, to make sure they stay on track and to your best efforts. You know, I think we've all seen in in some fairly um public venues customers, you know, of these programs talking about how there's been some snags and supply chain you know, including you know from those for example like from the optical terminal providers. And so if you look at what we do is we continually look for ways as Pete mentioned to just reduce any kind of dependency on third parties as much as we can. That's why if you look at electron, how vertically integrated that that vehicle is Neutron will be very similar. We're getting that way more and more with our our Space Systems platform offerings. We're very little is is still, I would say outsourced um to third parties. So

Well, around the 2nd that we're just announced, are there any financials that you can give any kind of color as to what they were doing?

On a performance basis. And and and I guess just how much cost we might be able to see taken out as a result of them being brought in house.

Adam Spice: You know, it just gets that much better, and we'll have that many more tools at our disposal when we have Neutron coming online, which is why obviously getting that first flight off is so important, why we're all looking so forward to that.

It's really just a function of, you know, again you you work with them and get them to deliver as as aggressively as you as you possibly can will not sacrifice in quality, um, or cost where you can. So, yeah, I wouldn't read too much into the granularity that people may have expected from our Space Systems business because 1 of the benefits that we have now from being such having such a diversified businesses. We we really just look at the Top Line, how can we deliver that sequential growth of the business and sometimes more of its going to come from launch and sometimes or it's going to come from Space Systems and within Space Systems, you know, platforms can have a great quarter and components can be weak and vice versa and then you know it just gets that much better and we'll have that many more tools at our disposal when we have Neutron coming online, which is why obviously getting that first flight office is so important why we're all looking. So forward to that,

Andre: Yeah. No, that's super helpful. Thanks, Adam. I guess to stick with you, I mean, around the two acquisitions that were just announced, are there any financials that you can give, any kind of color as to what they were doing on a performance basis? I guess just how much cost we might be able to see taken out as a result of them being brought in-house?

Andre Madrid: Yeah. No, that's super helpful. Thanks, Adam. I guess to stick with you, I mean, around the two acquisitions that were just announced, are there any financials that you can give, any kind of color as to what they were doing on a performance basis? I guess just how much cost we might be able to see taken out as a result of them being brought in-house?

Yeah, no, that's super helpful. Thanks Adam. Um I guess to stick with you. I mean,

Well, around the 2 acquisition that were just announced. Are there any financials that you can give any kind of color as to what they were doing?

On a performance basis. And and I guess just how much cost we might be able to see taken out as a result of them being brought in house.

Adam Spice: You know, our pipeline is always kind of interesting. It's got a mix of kind of more needle-moving deals from a financial perspective as far as, you know, revenue contribution and so forth. These particular deals really much more strategically around, again, vertical integration, reducing risk versus, you know, I would say providing big access to large external third, you know, kind of TAMS, if you will, or adjacent markets. These are really more, I would say, reducing some margin stacking and also just taking greater control over the, over the programs. I wouldn't say there's not a, I would say, material amount of revenue contribution that's gonna move the needle from the deals that we just announced. Clearly, you know, Mynaric is, would be a different story if and when that deal gets approved, because that would come with significant backlog and revenue opportunity.

You know, manner is would be a different story if and when that deal gets approved because that would come with significant backlog and revenue opportunity. And again, our pipeline also has lots of other deals that have a mixture of just you know, again elimination of margin stacking and in some cases you know also more meaningful Revenue contribution but these 2 I don't think you need to change your models at all for the impact for these 2 relatively small deals.

Got it. Got it. That's helpful. I'll leave it there. Thanks. Adam. Mhm.

Thank you. Our next question comes from Guatemala with TD Cowen. Your line is open.

Yeah, thanks. Good afternoon, guys.

Well, I was wondering on the neutron tank failure. Um, have you guys, are you high high, high certainty? That it was that, uh, manual layup process and

Adam Spice: Again, our pipeline also has lots of other deals that have a mixture of just, you know, again, elimination of margin stacking and in some cases, you know, also more meaningful revenue contribution. These two, I don't think you need to change your models at all for the impact for these two relatively small deals.

And therefore the the new process is not going to have the same anomaly or is is the study still ongoing of what happened?

Yeah, you know our our pipeline is always kind of interesting. It's got a mix of kind of more needle, moving deals from a financial perspective. As far as, you know, Revenue contributions. So forth. These particular deals really much more strategically around again. Vertical integration reducing risk for, you know, I would say providing big access to large, external third, you know, kind of Tams if you will or adjacent markets. So, these are really more, I would say reducing some margin stacking and also just taking greater control over the over the programs. So I wouldn't think there's not a I would say a material amount of Revenue contribution that's going to move the needle from the deals that we just announced. Um clearly you know minarich is would be a different story if and when that deal gets approved because that would come with significant backlog and revenue opportunity. And again, our pipeline also has lots of other deals that have a mixture of just you know, again elimination of margin stacking and in some cases you know also more meaningful Revenue contribution but these 2 I don't think you need to change your models at all for the impact for these 2 relatively small deals.

Andre: Got it. That's helpful. I'll leave it there. Thanks, Adam.

Andre Madrid: Got it. That's helpful. I'll leave it there. Thanks, Adam.

Adam Spice: Mm-hmm.

Got it. Got it. That's helpful. I'll leave it there. Thanks. Adam. Mhm.

Operator: Thank you. Our next question comes from Gautam Khanna with TD Cowen. Your line is open.

Thank you. Our next question comes from Guatemala with TD Cowen. Your line is open.

Gautam Khanna (TD Cow: Yeah, thanks. Good afternoon, guys. I was wondering on the Neutron tank failure, have you guys, are you high certainty that it was that manual layup process and therefore, the new process is not gonna have the same anomalies? Or is the study still ongoing of what happened?

Gautam Khanna: Yeah, thanks. Good afternoon, guys. I was wondering on the Neutron tank failure, have you guys, are you high certainty that it was that manual layup process and therefore, the new process is not gonna have the same anomalies? Or is the study still ongoing of what happened?

Yeah, no we, um, we we undertook a, a in complete failure analysis and, um, we're able to, uh, find the piece of, um, of tank that, uh, could cause the initiation of the failure. Uh, we're able to reproduce the results, uh, through analysis and then also through uh, coupon testings as testing as well. So now we we're very, very confident. Um, we understand that failure extremely well.

Yeah, thanks. Good afternoon, guys.

Okay, that's great to hear. And then

Well, I was wondering on the neutron tank failure. Um,

Have you guys?

You mentioned some areas where you'd like to take more in-house vertical integration. Can you can you describe some of those product areas that?

Might be of interest.

Are you—do you have high certainty that it was that, uh, manual layup process? And—

And therefore, the new process is not going to have the same anomaly, or is the study still ongoing of what happened?

Peter Beck: Yeah, no, we undertook a complete failure tree analysis, and we're able to find the piece of tank that caused the initiation of the failure. We're able to reproduce the results through analysis and then also through coupon testing as well. No, we're very, very confident. We understand that failure extremely well.

Yeah, I think, I think, um, you know, if you look at the a spacecraft these days, um, you know, the areas that that we, we still don't have 100% control of, uh, are starting to to get smaller and smaller. Um, you know, we have a, a, um, a Great Raft team. Um, but I think that's an area that we, we'll, we'll look look to bolster. Um,

Yeah, no we, um, we we undertook a, a in complete failure analysis and, um, we're able to, uh, find the piece of, um, of tank that, uh, could cause the initiation of the failure. Uh, we're able to reproduce the results, uh, through analysis and then also through, uh, coupon testings as testing as well. So I know we we're very, very confident. Um, we understand that failure extremely well.

Gautam Khanna (TD Cow: Okay, that's great to hear. You mentioned some areas where you'd like to take more in-house vertical integration. Can you describe some of those product areas that might be of interest?

Gautam Khanna: Okay, that's great to hear. You mentioned some areas where you'd like to take more in-house vertical integration. Can you describe some of those product areas that might be of interest?

Okay, that's great to hear. And then you mentioned some areas where you'd like to take more in-house vertical integration. Can you describe some of those product areas?

Might be of interest.

Peter Beck: Yeah, I think, you know, if you look across a spacecraft these days, you know, the areas that we still don't have 100% control of are starting to get smaller and smaller. You know, we have a great RF team, but I think that's an area that we will look to bolster. And, you know, we'll seek opportunities, you know, to add scale where possible. I think, you know, this is just gonna be bread and butter for us to constantly make sure that, you know, we don't get stung with, you know, suppliers that aren't able to deliver for us and continue to vertically integrate.

And uh and you know, we'll seek opportunities. Um uh, you know, to to add scale where where where possible but I think um you know this is this is just going to be bread and butter for us to to, you know, to constantly make sure that um, you know, we don't we don't get stung with, you know, supplies that aren't able to, to deliver for us and, and continue to vertically integrate. But as Adam pointed out, you know, our m&a pipeline is, is is pretty full. And, um, you know, there's a range of opportunities there from from these kind of things that, you know, that imported out don't add huge Revenue, bottom lines, but they they kind of guarantee Revenue because um, we we we're not going to, you know, Miss milestones.

Yeah, I think, I think, um, you know, if you look across a spacecraft these days, um, you know, the areas that that we we still don't have 100% control of, uh, are starting to to get smaller and smaller. Um, you know, we have a, a, um, a great RAF team. Um, but I think that's an area that we, we'll, we'll look look to bolster. Um,

Uh, but there, you know, ranging through to some some real needle movers that are much more transformational. And, you know, as as and also pointed out. We're we're, we're always making sure that we have, um, uh, plenty of of capital reserves to go and do those more meaningful acquisitions.

Thank you.

Thank you. Our next question comes from Ryan Coons with needleman company. Your line is open.

Peter Beck: As Adam pointed out, you know, our M&A pipeline is pretty full. There's a range of opportunities there from these kind of things that, you know, Adam pointed out, don't add huge revenue bottom lines, but they kind of guarantee revenue because we're not gonna, you know, miss milestones. They're all, you know, ranging through to some real needle movers that are much more transformational. As Adam also pointed out, we're always making sure that we have plenty of capital reserves to go and do those more meaningful acquisitions.

And uh and you know, we'll seek opportunities. Um uh, you know, to to add scale where where where possible but I think um you know this is this is just going to be bread and butter for us to to, you know, to constantly make sure that um, you know, we don't we don't get stung with, you know, supplies that aren't able to, to deliver for us and, and continue to vertically integrate. But as Adam pointed out, you know, our m&a pipeline is, is, is pretty full. And, um, you know, there's a range of opportunities there from from these kind of things that, you know, that important out don't add huge Revenue, bottom lines. But they they kind of guarantee Revenue because um, we we we're not going to, you know, Miss milestones.

Clogged relative to, um, you know, uh, DOD versus versus commercial, just in terms of the next. Uh, next, you know, 128 months.

yeah, you know, I think

Uh but there are, you know, ranging through to some some real needle movers that are much more transformational and, you know, as as and also pointed out we we're we're we're always making sure that we have um, uh, plenty of of capital reserves to go and do those more meaningful acquisition.

Gautam Khanna (TD Cow: Thank you.

Gautam Khanna: Thank you.

Thank you.

Operator: Thank you. Our next question comes from Ryan Koontz with Needham and Company. Your line is open.

Thank you. Our next question comes from Ryan Kuhn with Native and Company. Your line is open.

Adam Spice: Great. Thanks for squeezing me in. I want to ask about backlog, Adam, your commentary there as you think about the opportunities ahead, over the next, say, 12, 18 months. Obviously, the SDAs are very active, and, you know, how you think about the composition of your backlog relative to, you know, DoD versus commercial, just in terms of the next, you know, 12 to 18 months. Yeah, you know, I think we're in a really fortunate spot where, you know, traditionally, government business has not really been ever viewed as a hockey stick.

Ryan Koontz: Great. Thanks for squeezing me in. I want to ask about backlog, Adam, your commentary there as you think about the opportunities ahead, over the next, say, 12, 18 months. Obviously, the SDAs are very active, and, you know, how you think about the composition of your backlog relative to, you know, DoD versus commercial, just in terms of the next, you know, 12 to 18 months.

Great, thanks for squeezing me in. Um, we also have backlog, Adam, uh, your commentary there. And you think about the opportunities ahead, um, over the next, say, 12 to 18 months. Obviously, the SDA has been very, very active and, you know, how you think about the composition of your backlog relative to, um, you know, DOD versus commercial just in terms of the next, uh, next, you know, 12 to 18 months.

Adam Spice: Yeah, you know, I think we're in a really fortunate spot where, you know, traditionally, government business has not really been ever viewed as a hockey stick. I think for us, since we're coming in in such a disruptive way and, you know, we're disruptive, but also the whole architecture where you've gone from GEO to LEO and the number of satellites that are required to support that architecture, you know, has just been so strong. You know, we've got so many things that are pushing us in the back as far as, you know, kind of where the opportunities are.

yeah, you look I think

Adam Spice: I think for us, since we're coming in in such a disruptive way and, you know, we're disruptive, but also the whole architecture where you've gone from GEO to LEO and the number of satellites that are required to support that architecture, you know, has just been so strong. You know, we've got so many things that are pushing us in the back as far as, you know, kind of where the opportunities are.

I think we're in a really fortunate spot where you know traditionally, um, government business has not really been ever viewed as a hockey stick. I think, for us, since we're coming in in such a disruptive way. And, you know, uh, we're disruptive but also that the, the whole architecture, where you've gone from Geo to Leo and the number of satellites that are required to support that architecture, you know, has just been so strong. Uh, you know, we've got so many things that are pushing Us in the back as far as, you know, kind of where the opportunities are. But I'd say I'd say overall we've got really big commercial opportunities that we continue to chase even though, for me, you know, if I was given the choice of chasing a government hockey stick or a commercial hockey stick, you know, I would take the government hockey stick because even though they may not be as Dynamic, uh, in some cases that a program level is commercial, you know, they they always pay their bills. Um, they're pretty clear-cut, how how you work with them. And, you know, in that government Market, we're just competing with, with people that seem to be fighting with their hands tied behind their backs, right? So we move much more quickly. We have a lot more tools at our dis

Disposal because of our vertical integration. So I love the mix as it's trending towards government. I do think, you know, it's, it's also very comforting to have this big commercial hockey, stick opportunity out there as well. Um,

Adam Spice: I'd say overall, we've got really big commercial opportunities that we continue to chase, even though, for me, you know, if I was given the choice of chasing a government hockey stick or a commercial hockey stick, you know, I would take the government hockey stick because even though they may not be as dynamic, in some cases at a program level as commercial, you know, they always pay their bills. They're pretty clear-cut how you work with them. You know, in that government market, we're just competing with people that seem to be fighting with their hands tied behind their backs, right? We move much more quickly. We have a lot more tools at our disposal because of our vertical integration. I love the mix as it's trending towards government.

But I I would say that, you know, it's the pipeline, when you look at the pipeline of kind of business opportunities. Forget the m&a side is it it's a pretty balanced set of opportunities between commercial and government, may all that Peak, kind of provide his his view but it seems like we're we don't just have a choice of kind of taking 1 fork or the other in the road, you know where we can. We can try to think about how do we take both of those things and I think we've done a pretty good job balancing but maybe people want to speak about that.

Nice. Thanks. You know, I think you've said it perfectly Adam. Um, yep. I I can't. I can't add anything better than that.

Adam Spice: I do think, you know, it's also very comforting to have this big commercial hockey stick opportunity out there as well. I would say that, you know, it's the pipeline. When you look at the pipeline of kind of business opportunities, forget the M&A side, it's a, it's a pretty balanced set of opportunities between commercial and government. We all let Pete kind of provide his view, but it seems like we don't just have a choice of kind of taking one fork or the other in the road, you know, where we can try to think about how do we take both of those things. I think we've done a pretty good job balancing, but maybe Pete want to speak about that. Nice. Thanks.

Wrong. Uh, you know, we've got so many things that are pushing Us in the back as far as, you know, kind of where the opportunities are. But I'd say I'd say overall we've got really big commercial opportunities that we continue to chase even though, for me, you know, if I was given the choice of chasing a government hockey stick or a commercial hockey stick, you know, I would take the government hockey stick because even though they may not be as Dynamic, uh, in some cases at a program level as commercial, you know, they, they always pay their bills, um, they're pretty clear-cut, how, how you work with them. And, you know, in that government Market, we're just competing with, with people that seem to be fighting with their hands tied behind their backs, right? So we move much more quickly. We have a lot more tools at our disposal because of our vertical integration. So I love the mix as it's trending towards government. I do think, you know, it's, it's also very comforting to have this big commercial hockey, stick opportunity out there as well. Um,

Great. Maybe just a quick follow-up. As you think about, you know, golden dome and timing and you know p p pwsa fitting into that architecture, you know, any updated thoughts on, You Know, Your Role there or opportunities when you think that emerges as a a truly viable um you know, business opportunity for you

but I, I would say that, you know, it's the pipeline, when you look at the pipeline of kind of business opportunities. Forget the m&a side is it it's a pretty balanced set of opportunities between commercial and government. They all that Pete, kind of provide his his view but it seems like we're we don't just have a choice of kind of taking 1 fork or the other in the road, you know where we can. We can try to think about how do we take both of those things and I think we've done a pretty good job balancing but maybe people want to speak about that.

Peter Beck: You know, I think you've said it perfectly, Adam. Yep, I can't add anything better than that.

Yeah, I think I think um, you know, golden domes are quite a complex 1, um, as obviously it's it's a huge program but it's um a lot of it is also a classified so it's very difficult to um, you know, to to discuss too much. Um, but, uh, you know, I would, I would say that in multiple fronts. Um, I think we're we're well positioned to, um, to to, you know, have a good chunk at this, whether it be launches

Nice. Thanks. You know, I think you've said it perfectly Adam. Um, yep. I I can't. I can't add anything better than that.

Adam Spice: Great. Maybe just a quick follow-up. As you think about, you know, Golden Dome and timing and, you know, PWSA fitting into that architecture, you know, any updated thoughts on, you know, your role there or opportunities when you think that emerges as a truly viable, you know, business opportunity for you?

Ryan Koontz: Great. Maybe just a quick follow-up. As you think about, you know, Golden Dome and timing and, you know, PWSA fitting into that architecture, you know, any updated thoughts on, you know, your role there or opportunities when you think that emerges as a truly viable, you know, business opportunity for you?

Great. Maybe just a quick follow-up as you think about, you know, Golden Dome and timing and, you know, PPWSA fitting into that architecture. You know, any updated thoughts on, you know, your role there or opportunities, when you think that emerges as a truly viable, you know, business opportunity for you?

Peter Beck: Yeah, I think, you know, Golden Dome's quite a complex one. is obviously it's a huge program, but it's a lot of it is also classified. It's very difficult to, you know, to discuss too much. I would say that in multiple fronts, I think we're well positioned to, you know, have a good chunk at this, whether it be launches, launch or satellites, optical terminals. You know, a lot of the optical payloads, the SDA, when, you know, the turnkey SDA win is a clear missile track payload, which is a very complicated payload obviously, and critical to the Golden Dome.

Launch or satellites Optical terminals. Um uh you know, a lot of the optical payloads, um, the SDA, uh when you know the the transfer SDA when is a is you know, is a is a clear missile track payload, which is very complicated. Um payload obviously and and critical for the golden dome. So you know, as as that program formulates and continues to to to grow. Um you know I think I think we're a you know pretty pretty key uh piece of that Foundation.

Couple Pete. Thank you. Cool.

Thank you. Our next question comes from Michael leeshock with keybanc capital markets. Your line is open.

Peter Beck: You know, as that program formulates and continues to grow, you know, I think we're a, you know, pretty key piece of that foundation.

Hey, good afternoon. I wanted to ask a longer term question on a potential future rocket lab, satellite constellation just giving some of the recent announcements around the industry. Um and as you mentioned in the presentation the significant growth in satellites that's expected over the next decade have there, been any changes to your approach on a future constellation of your own or what potential applications you may Target or is this still a longer term growth opportunity that that really won't be a priority until Neutron is launching consistently.

Yeah, I think I think um, you know, golden domes quite a complex 1 um is obviously it's a huge program but it's um a lot of it is also a classified so it's very difficult to um, you know, to to discuss too much. Um, but uh, you know I would, I would say that in multiple fronts. Um, I think we're we're well positioned to um, to to, you know, have a good chunk at this whether it be launches launch or satellites Optical terminals, um, uh, you know, a lot of the optical payloads, um, the SDA, uh, when you know the the transfer SDA when is a is you know, is a is a clear missile track payload, which is very complicated. Um payload obviously and and critical for the golden dome. So you know, as as that program formulates and continues to to to grow. Um you know I think I think we're a you know pretty pretty key uh piece of that Foundation.

Jan-Frans Engelbrecht: Copy, Pete. Thank you.

Ryan Koontz: Copy, Pete. Thank you.

Peter Beck: Cool.

Couple Pete. Thank you. Cool.

Operator: Thank you. Our next question comes from Michael Leshock with KeyBanc Capital Markets. Your line is open.

Thank you. Our next question comes from Michael leshock with keybanc capital markets. Your line is open.

Michael Leshock: Hey, good afternoon. I wanted to ask a longer-term question on a potential future Rocket Lab satellite constellation, just given some of the recent announcements across the industry. As you mentioned in the presentation, the significant growth in satellites that's expected over the next decade. Have there been any changes to your approach on a future constellation of your own, or what potential applications you may target? Is this still a longer-term growth opportunity that really won't be a priority until Neutron is launching consistently?

Yeah, thanks for the question. Michael, I think, um, what, what's kind of cool here is that, you, you know, you you've all heard me say that it's going to space is going to get blurry. It's going to be difficult to determine what is a space company and what is something else company? And, um, you know, that that continues that thesis really continues to firm now that, um, you look at, um, you know, data centers and all these other kind of, you know, opportunities that are go that are growing in space. It's, it's like it is that the large successful companies are going to be blurry. Are they going to be a space company? Are they telecommunications company are their data services company? Um, and um, it it your your point is really accurate and and you know, in in all kind of um,

Hey, good afternoon. I wanted to ask a longer term question on a potential future rocket lab satellite constellation just given some of the recent announcements across the industry. Um and as you mentioned in the presentation the significant growth in satellites that's expected over the next decade have there, been any changes to your approach on a future constellation of your own or what potential applications you may Target or is this still a longer term growth opportunity that that really won't be a priority until Neutron is launching consistently.

Peter Beck: Yeah, thanks for the question, Michael. I think what's kind of cool here is that you know, you've all heard me say that space is gonna get blurry. It's gonna be difficult to determine what is a space company and what is a something else company. You know, that continues. That thesis really continues to firm now that you look at, you know, data centers and all these other kind of, you know, opportunities that are growing in space. It's like it is. That the large, successful companies are gonna be blurry. Are they gonna be a space company? Are they a telecommunications company? Are they a data services company?

We're not sort of sitting back and, and sitting on a hands thinking about, um, you know, what we could do. I think you can see in in just about every Avenue. Um, you know, we, we, at least have knowledge or components or exposure. Um, when I say Revenue, every every kind of, you know, opportunity that that's potentially, um, you know, being thought about or used in space today so still still too early Michael. But, um, but you know, it is is not a day that doesn't go by where there's not internal discussion about it.

Peter Beck: It, your point is really accurate and, you know, until kind of, Neutron's online and we have multi-ton reusable launch capability, I think, you know, that's the time that we can really lean into, you know, deploying infrastructure. In saying that, we're not sort of sitting back and sitting on our hands thinking about, you know, what we could do. I think you can see in just about every avenue, you know, we at least have knowledge or components or exposure. When I say every avenue, every kind of, you know, opportunity that's potentially, you know, being thought about or used in space today.

Yeah, thanks for the question. Michael, I think, um, what, what's kind of cool here is that, you, you know, you you've all heard me say that it's going to space is going to get blurry. It's going to be difficult to determine what is the space company, and what is something else company. And, um, you know, that that continues that thesis really continues to confirm now that, um, you look at, um, you know, data centers and all these other kind of, you know, opportunities that are go that are growing in space. It's, it's like it is that the large successful companies are going to be blurry. Are they going to be a space company? Are they telecommunications company are their data services company? Um, and um, it it your your point is really accurate and and you know, until kind of um

Great. And then maybe on the stage 1 tank rupture. I don't know if I missed it, but how fast can you produce the second tank now with the new AFP machine? And then will that get even faster? As you repeat this process over time.

Peter Beck: It's still too early, Michael, but, you know, it is, there's not a day that doesn't go by where there's not an internal discussion about it.

Neutrons online and and we have multi-ton, reusable launch capability. I think you know that that's the time that that we can really Lean Into, You Know, deploying infrastructure. But in saying that um, we're not sort of sitting back and and sitting on a hands thinking about, um, you know, what we could do. I think you can see in in just about every Avenue. Um, you know, we, we, at least have knowledge or components or exposure. Um, when I say Revenue, every every kind of, you know, opportunity, that that potentially, um, you know, being thought about or used in space today so still still too early Michael, but, um, but it, you know, it is is not a day that doesn't go by where there's not an internal discussion about it.

Michael Leshock: Great. Maybe on the stage one tank rupture, I don't know if I missed it, but how fast can you produce the second tank now with the new AFP machine? Will that get even faster as you repeat this process over time?

Oh, God. Yeah, like it's ridiculous that the AFP machine is is, is is just it's, it's it's totally ridiculous. I can't remember the exact timeline to lay up a dome, but we measure we measure a dome manufacturer on the AFP and, and days actually the the, the, the, the, the the longer pole in the tent there for tank, manufacturer is not actually laying up, um, and curing the components. It's the, uh, it it's the joining of the, the various domes and tanks and, and, and barrels together. And, um, you know, all of the all of the, the tabs and details for baffles and all those kinds of things actually take the the time, but, um, you know, a new, a new tank, we're talking, you know, months here and not not uh, you know, for for a complete tank but from an actual, you know, manufacturing of the all components, it's it's ridiculous.

Ly fast.

Missed it. But how fast can you produce the second tank now with the new AFP machine? And then, will that get even faster as you repeat this process over time?

Peter Beck: Oh God, yeah. Like it's ridiculous. The AFP machine is just, it's totally ridiculous. I can't remember the exact timeline to lay up a dome, but we measure a dome manufacture on the AFP in days. Actually, the longer pole in the tent there for a tank manufacturer is not actually laying up and curing the components. It's the, it's the joining of the various domes and tanks and barrels together and, you know, all of the tabs and details for baffles and all those kinds of things actually take the time. You know, you know, a new tank, we're talking, you know, months here, not, you know, for a complete tank.

And also that's Adam's point. It's it's like now that it's all automated really, the only cost is the raw material that's going in there.

Great, appreciate all the detail.

Thank you. Our next question comes from Jan Le with beard. Your line is open.

Good afternoon. Peter Adam and Morgan. Thanks for taking our questions.

Peter Beck: From an actual, you know, manufacturing of the raw components, it's ridiculously fast. Also that's, to Adam's point, it's like now that it's all automated, really the only cost is the raw material that's going in there.

Um, I'd like to get your just go back on pwsa and just get your sort of your high level thoughts about that program. It does seem like your focus. Uh will shift more towards the tracking layer given that, that's really impressive when uh, that the go acquisition. Um, just how you're thinking about the future of that for Rocket lab and then also just

Oh, God. Yeah, like it's ridiculous that the AFP machine is is is just it's, it's totally ridiculous. I can't remember the exact timeline to lay up a dome, but we measure, we measure a dome manufacturer on the AFP in days. Actually the, the, the, the the longer pole. In the tent there for tank manufacturer is not actually laying up. Um, in curing the components. It's the, uh, it it's the joining of the, the various domes and tanks and, and, and barrels together. And, um, you know, all of the all of the, the tabs and details for baffles and all those kinds of things actually take the the time, but, um, you know, a new, a new tank, we're talking, you know, months here and not not uh, you know, for for a complete tank but from an actual, you know, manufacturing of the all components, it's, it's ridiculously fast.

And also, that's Adam's point. It's like, now that it's all automated, really the only cost is the raw material that's going in there.

Michael Leshock: Great. Appreciate all the detail.

We've heard a lot of you know government reports being issued on that on the transport layer piece. Like how difficult would it be for a commercial variant like like like Star shield with mnet to sort of act as the transport layer? It seems like there's a lot of things that would

Great, appreciate all the detail.

Operator: Thank you. Our next question comes from Jan-Frans Engelbrecht with Baird. Your line is open.

Thank you. Our next question comes from Jan Le with Beard. Your line is open.

Jan-Frans Engelbrecht: Good afternoon. Afternoon, Peter, Adam, and Morgan. Thanks for taking our questions. I'd like to just go back on PWSA and just get your sort of your high-level thoughts about that program. It does seem like your focus will shift more towards the Tracking Layer, given this really impressive win, the Geost acquisition. Just how you're thinking about the future of that for Rocket Lab. Also, we've heard a lot of, you know, government reports being issued on that, on the Transport Layer piece. Like, how difficult would it be for a commercial variant like Starshield with MOLN to sort of act as the Transport Layer?

Good afternoon, Peter, Adam, and Morgan. Thanks for taking our questions.

Stand in the way of that, um, because a commercial, uh, you know, star Shield orbits at much lower altitudes than the transports or tracking layers. There would be a lot of redesign work, um, but, but I'll stop there and just to get your your over overall thoughts. There

Um, I'd like to get your just go back on pwsa and just get your sort of your high level thoughts about that program. It does seem like your focus. Uh will shift more towards the tracking layer given that, that's really impressive when uh that the Gio's acquisition um just how you're thinking about the future of that for Rocket lab and then also just

Jan-Frans Engelbrecht: It seems like there's a lot of things that would stand in the way of that, because a commercial, you know, Starshield orbits at much lower altitudes than the Transport and Tracking Layers. There would be a lot of redesign work. I'll stop there and just to get your overall thoughts there.

We've heard a lot of you know government reports being issued on that on the transport layer piece. Like how difficult would it be for a commercial variant? Like like, like like Star shield with mullet to sort of act as the transport layer? It seems like there's a lot of things that would

Peter Beck: Oh, man, we could geek out about this for days, Jan. Yes, it was intentional for us to, you know, to move up the value chain, if you will. Not that the Transport Layer is elementary. By no means is it elementary, but it's an order of magnitude more difficult and more valuable to be able to doing the tracking stuff. The tracking stuff is critical for things, you know, as things develop for Golden Dome and other kind of programs. That's the high-value stuff where you want to be, that there's really only a few people in the nation that can successfully execute on.

Stand in the way of that, um, because a commercial, uh, you know, star Shield orbits at much lower altitudes than the transports and tracking layers. There would be a lot of redesign work, um, but, but I'll stop there and just to get your your over overall thoughts. There

Oh man, we could geek out about this for days. Jen. Um, so so yes. Um, uh, it was it was intentional for us to, um, you know, to, to move up the the value chain. If you will not that um, that transport layers Elementary by by no means, is it Elementary? But it's an order of magnitude more difficult and more valuable to, to be able to doing the tracking stuff and the tracking stuff is critical for things. Um, you know, uh, as as as things develop for golden dome and and other other other kind of programs. So that's that, that's the high value stuff where you want to be. That there's really only a few people, um, in the nation that can successfully execute on, um, with with respect to, you know, the transport layer, uh, going away. I mean, we haven't we haven't heard or seen any evidence to that obviously um, you know, there's there's a lot of discussion about um you know, other other providers. But um the whole point of you know the the SDA program is is kind of you know all of the spacecraft integrated very closely with each other.

Oh man, we could geek out about this for days. Jane. Um, so so yes. Um, uh, it was it was intentional for us to um, you know, to to move up the the value chain. If you will not that um, that transport layers Elementary by by no means is it down Elementary but it's the order of magnitude more difficult and more valuable to be able to doing the tracking stuff and the tracking stuff is critical for things. Um you know, uh, as as as things develop for golden dome and and other other other kind of programs. So that's that, that's the high value stuff where you want to

Peter Beck: With respect to, you know, the Transport Layer going away, I mean, we haven't, we haven't heard or seen any evidence to that. Obviously, you know, there's a lot of discussion about, you know, other providers. The whole point of, you know, the SDA program is, you know, all of the spacecraft are integrated very closely with each other, even though they're from other providers. There's a set of requirements that we all must meet for interoperability. So I think, I think your point is a good one, and it becomes more difficult to have interoperability when you have something that's quite different. You know, it'll be interesting to see how it all shapes out.

Even though they're from other providers, there's a set of requirements that we all must meet for inter interoperability. So I think, um, I think your point is a good 1. Um, it becomes more difficult to have interoperability when you have something that's that's quite different. Um, but uh, you know, it'll, it'll be interesting to see how it all shakes out, but I think for the tasks that that SDA is trying to achieve, um, to me at least, it makes more sense to have a dedicated, uh, transport layer. And and then the the other layers, of course, you know,

tracking, and then custody and so on, on top of it,

Thanks Peter. Very helpful and just a quick follow-up. If I may want to be respectful of the minor deal, you know, that that play out as it will. Um, but on on optical terminals at sort of at which point and again, hoping hoping that like, it works out well here. But at which point do you potentially look at not an altar? Maybe an alternative supplier of octs or does geost or or the new acquisition OSI have any capability that you could look towards uh developing these Optical terminals over time.

Peter Beck: I think for the tasks that SDA is trying to achieve, to me at least, it makes more sense to have a dedicated, Transport Layer and then the other layers, of course, you know, tracking and then custody and so on top of it.

Say that there's really only a few people, um, in the nation that can successfully execute on, um, with with respect to, you know, the transport layer, uh, going away. I mean, we haven't we haven't heard or seen any evidence to that obviously, um, you know, there's there's a lot of discussion about um, you know, other other providers. But um, you know, the whole point of, you know, the the SDA program is is kind of, you know, all of the spacecraft integrated very closely with each other even though they're from other providers, there's a set of requirements that we all must meet the inter interoperability. So I think, um, I think your point is a good 1. Um, it becomes more difficult to have interoperability when you have something that's that's quite different. Um, but uh, you know, it'll, it'll be interesting to see how it all shakes out, but I think for the tasks that that SDA is trying to achieve, um, to me at least, it makes more sense to have a dedicated, uh, transport layer and, and then the the other layers, of course, if you know tracking and then custody and so on, on top of it,

Jan-Frans Engelbrecht: Thanks, Peter. Very helpful. Then just a quick follow-up, if I may. Want to be respectful of the Mynaric deal, you know, let that play out as it will. But on optical terminals, sort of at which point and again, hoping that, like, it works out well here, but at which point do you potentially look at maybe an alternative supplier of OCTs, or does Geost or the new acquisition, OSI, have any capability that you could look towards, developing these optical terminals over time?

Uh, and um, obviously you know, we have the Optics now and house as well. Uh, but you know, there's, there's just it's, it's incredibly difficult to do. And um, as we look across, uh, as we we looked across, you know, the landscape of all of these Optical terminal suppliers of which there's really only 3, um, you know, minarich just stood out as, you know, the absolute best with respect to technology. Now, they suck at other things, um, uh, like running their business. But um, but they, they make the, the best terminals. Um, so, uh, you know, to go out and and develop your own terminal. Yep. Totally feasible. Um, it's just a time thing and, um, you know, that it it would just take a longer to, to do that than it would to, um, to acquire.

Peter Beck: Yeah. Geost has developed some optical terminals. Obviously, you know, we have the optics now in-house as well. You know, there's just it's incredibly difficult to do. As we look across, as we looked across, you know, the landscape of all of these optical terminal suppliers, of which there's really only three, you know, Mynaric just stood out as, you know, the absolute best with respect to technology. Now, they suck at other things, like running their business, but they make the best terminals. You know, to go out and develop your own terminal, yep, totally feasible. It's just a time thing, and, you know, the...

Thanks Peter very helpful and then just a quick follow up. If I met, um, 1 of you respectful of the minor deal, you know, that that play out as it will. Um, but on on optical terminals at sort of at which point and again, hoping hoping that like, it works out well here. But at which point do you potentially look at not an altar? Maybe an alternative supplier of octs or does geost or or the new acquisition OSI have any capability that you could look towards uh developing these Optical terminals over time.

Perfect. Thank you. Very helpful. I jumped back in the queue.

Thank you. Our next question comes from Jeff, Henry, with Craig, Howland Capital group, your line is open.

Peter Beck: It would just take longer to do that than it would to acquire it.

Hey, this is Daniel. Hibsman on for Jeff, fann Reed. Congrats on the quarter and the FDA win in, in particular. Um, on Mars, telecommunication, Orbiter the the 700 700 750 million there about wondering, you know, it looks like earlier this week and as to put out an RFP for a Mars, tele Community since Network. So a little bit of a name, change their sounds like that. Might be a multi-satellite architecture where previously, they were just looking at that 1 single Orbiter. But anyway, what, what can you tell us? Just about how the competition and Market Labs positioning for that.

Spin evolving.

It's just a time thing. And, um, you know, it would just take longer to do that than it would to, um, to acquire.

Jan-Frans Engelbrecht: Perfect. Thank you. Very helpful. I'll jump back in the queue.

Perfect. Thank you. Very helpful. I'll jump back in the queue.

Operator: Thank you. Our next question comes from Jeff Van Rhee with Craig-Hallum Capital Group. Your line is open.

Thank you. Our next question comes from Jeff Vry with Craig Howland, Capital Group. Your line is open.

Daniel Hibshman: Hey, this is Daniel Hibshman on for Jeff Van Rhee. Congrats on the quarter and the SDA win in particular. On Mars Telecommunications Orbiter, the $750 million there, about. Wondering, you know, it looks like earlier this week, NASA put out an RFP for a Mars telecommunications network, a little bit of a name change there. Sounds like that might be a multi-satellite architecture, where previously they were just looking at that one single orbiter. Anyway, what can you tell us just about how the competition and Mynaric's positioning for that's been evolving?

You know, thanks Jeff. Great question. Um, uh, yep. So, you know, the, the, the MTO as you point out, um, there's a slight change there to, to network. Um, and uh, you know, um, as more infrastructure is built on Mars, then of course the, you know, the a network will need to be created. Um, you know, the, the the MTO was always intended to be the first of of more to to come. Um, look, obviously, we think we're well positioned here. Um, you know, there's, there's we have the experience, we have a lot of the capabilities and a lot of the demonstrated capabilities. Um, but, uh, you know, I think, um, you know, we'll put our, our best, our best foot forward there and and, um, you know, of course, others, uh, think they can do the job, too. Um, that's, that's a great thing about competition and, you know, we'll uh, we'll see who wins.

Hey, this is Daniel. Hibsman on for Jeff, Fann Reed. Congrats on the quarter and the FDA win in particular. Um, on Mars Telecommunication Orbiter—the $700 to $750 million there—about wondering, you know, it looks like earlier this week NASA put out an RFP for a Mars Telecommunication Science Network. So a little bit of a name change there, sounds like that might be a multi-satellite architecture where previously, they were just looking at that one single orbiter. But anyway, what can you tell us just about how the competition and Market Lab's positioning for that has been evolving?

Peter Beck: You know, thanks, Jeff. Great question. You know, the MTO, as you pointed out, is a slight change there to network. You know, as more infrastructure is built on Mars, of course, you know, a network will need to be created. You know, the MTO was always intended to be the first of more to come. Look, obviously, we think we're well positioned here. You know, we have the experience, we have a lot of the capabilities and a lot of the demonstrated capabilities. You know, I think, you know, we'll put our best foot forward there and, you know, of course, others think they can do the job too.

You know, thanks you have great question. Um, uh, yep. So you know, the, the, the MTO as you point out, um, there's a slight change there to, to, to network. Um, and uh, you know, um, as more infrastructure is built on Mars, then of course the you know, the a network will need to be created. Um, you know, the the the MTO was always intended to be the first to of of more to to come. Um, look, obviously, we think we're well positioned here. Um, you know, there's there's we have the experience, we have a lot of the capabilities and a lot of the demonstrated capabilities.

And then Adam uh 1 for you just on the gross margins which you know obviously are growing tremendously. I think what 8 points up in 2025 and then the guy for 2126 has those stepping back down a few hundred bips and he called out the space system. Mix Chef, is there anything persistent about that makeshift either in, in terms of the new business coming online, potentially with the SDA transport layer that it's going to have some persistent margin pressure, or should we be assuming in our models that we'll be getting right back to that, you know, more normal Cadence of a few hundred bips of expansion. You know, as we get back into the later, half of the year,

Peter Beck: That's the great thing about competition, and, you know, we'll see who wins.

Um, but uh, you know, I think, um, you know, we'll put our best—our best foot forward there, and, and, um, you know, of course, others, uh, think they can do the job too. Um, that's—that's a great thing about competition, and, you know, we'll, uh, we'll see who wins.

Daniel Hibshman: Adam, one for you, just on the gross margins, which, you know, obviously are growing tremendously. I think, what, 8 points up in 2025, and then the guide for 2026 has those stepping back down a few hundred basis points, and you called out the space system mix shift. Is there anything persistent about that mix shift, either in terms of the new business coming online, potentially with the SDA Transport Layer, that it's gonna have some persistent margin pressure? Or should we be assuming in our models that we'll be getting right back to that, you know, more normal cadence of a few hundred basis points of expansion, you know, as we get back into the later half of the year?

And then Adam.

Margins which, you know?

Well, you know, I think gross margin is a, there's a lot of things that are that are going on underneath the surface there. So, you know, as we continue to grow, you know, there's a call question earlier from Eric about the, the, the electron launch Cadence. So I mentioned a 20% launch Cadence the growth in that.

Obviously, I think what?

The extent that we can do better than that, which I think there's opportunities to grow faster in 2026. Um,

In 2025, and then the guy for 2126 has those stepping back down a few bits and he called out the space system. Makeshift, is there anything persistent about that makeshift either in, in terms of the new business coming online? Potentially with the SDA transport layer that it's going to have some persistent margin pressure? Or should we be assuming in our models that we'll be getting right back to that, you know, more normal Cadence of a few hundred bips of expansion. You know, as we get back into the later, half of the year,

Adam Spice: Well, you know, I think gross margin is a. There's a lot of things that are going on underneath the surface there. You know, as we continue to grow, you know, there was a question earlier from Erik about the Electron launch cadence. I mentioned a 20% launch cadence, the growth in that. The extent that we can do better than that, which I think there's opportunities to grow faster in 2026, then that's gonna be a positive upward bias to margin. These larger, longer-term programs like SDA Tranche 2 and Tranche 3, you know, they typically come in at the low end of our gross margin mix, but they, you know, they have really good operating margin, kind of characteristics to them or contribution margin because of the fact that, you know, there isn't a tremendous amount of incremental R&D that's kind of outside of the programs.

Then that's going to be a positive upward bias to margin uh these larger longer term programs like SDA, tranche 2 and tranche 3. Uh you know they typically come in at relatively low at the low end of our gross margin mix but they you know they have really good operating margin um kind of characteristics to them or contribution margin because of the fact that you know there isn't a tremendous amount of incremental R&D that's kind of outside of the programs. So

Well, you know, I think gross margin is a—there's a lot of things that are going on underneath the surface there. So, you know, as we continue to grow, you know, there was a call question earlier from Eric about the Electron launch cadence. So I mentioned a 20% launch cadence, the growth in that.

I I I would say that you know in a quarter where you've got a lot more contribution from the big programs like tranche 2 and tranche 3, that'll put downward pressure offset hopefully by growth from you know, increase in in the the electron contributions.

The extent that we can do better than that—which I think there are opportunities to grow faster in 2026. Um,

Adam Spice: These larger, longer-term programs like SDA Tranche 2 and Tranche 3, you know, they typically come in at the low end of our gross margin mix, but they, you know, they have really good operating margin, kind of characteristics to them or contribution margin because of the fact that, you know, there isn't a tremendous amount of incremental R&D that's kind of outside of the programs. I, I would say that, you know, in a quarter where you've got a lot more contribution from the big programs like Tranche 2 and Tranche 3, that'll put downward pressure offset, hopefully by growth from, you know, increased in the Electron contributions. The components business has a quite interesting range of margins.

Uh, the components business has a quite interesting range of of margins. You know, you have some products in there that are, you know, more towards say, 30 points, in non-gaap gross margin. Other ones that are you know, kind of north of 70 points of of non-gaap gross margins. So there's a widespread and mix is hard to predict, you know, that far out in the year. I mean,

then that's going to be a positive upward bias to margin, uh, these larger longer-term programs like SDA, tranche 2 and tranche 3. Uh you know they typically come in at relatively low at the low end of our gross margin mix but they you know they have really good operating margin um kind of characteristics to them. We're contribution margin because of the fact that you know there isn't a tremendous amount of incremental R&D that's kind of outside of the programs. So

Adam Spice: I, I would say that, you know, in a quarter where you've got a lot more contribution from the big programs like Tranche 2 and Tranche 3, that'll put downward pressure offset, hopefully by growth from, you know, increased in the Electron contributions. The components business has a quite interesting range of margins. You have some products in there that are, you know, more towards, say, 30 points of non-GAAP gross margin, other ones that are, you know, kind of north of 70 points of non-GAAP gross margin. There's a widespread, and mix is hard to predict, you know, that far out in the year. I mean, I do think there will be a supportive trend towards gross margin, but I think it's difficult to really get a lot of granularity, kind of, you know, much more than, you know, I'd say maybe one or two quarters out.

I would say that, you know, in a quarter where you've got a lot more contribution from the big programs like Tranche 2 and Tranche 3, that'll put downward pressure, offset hopefully by growth from, you know, increase in the Electron contributions.

Adam Spice: You have some products in there that are, you know, more towards, say, 30 points of non-GAAP gross margin, other ones that are, you know, kind of north of 70 points of non-GAAP gross margin. There's a widespread, and mix is hard to predict, you know, that far out in the year. I mean, I do think there will be a supportive trend towards gross margin, but I think it's difficult to really get a lot of granularity, kind of, you know, much more than, you know, I'd say maybe one or two quarters out. Overall, I think, you know, as we continue to kind of grow that components mix of business, more Electron in the mix, it's all gonna be positive.

Curve, um, you know, probably not too dissimilar to what we've experienced on electron, uh, which has been incredibly. You know, it's been a great margin expansion story. But when you bring a new product like a rocket to Market, you do things like block upgrades and then you know that all helps, you know, bring down cost, increase performance. So you can sell out more capacity on the rocket which is helpful to ASP and so forth.

Adam Spice: Overall, I think, you know, as we continue to kind of grow that components mix of business, more Electron in the mix, it's all gonna be positive. Now, I think the one caveat to that is. As we bring Neutron into production, it'll have a margin expansion curve, you know, probably not too dissimilar to what we've experienced on Electron, which has been incredibly, you know, it's been a great margin expansion story. When you bring a new product like a rocket to market, you do things like block upgrades, and then, you know, that all helps, you know, bring down cost, increase performance, so you can sell a lot more capacity on the rocket, which is helpful to ASP and so forth.

Adam Spice: Now, I think the one caveat to that is. As we bring Neutron into production, it'll have a margin expansion curve, you know, probably not too dissimilar to what we've experienced on Electron, which has been incredibly, you know, it's been a great margin expansion story. When you bring a new product like a rocket to market, you do things like block upgrades, and then, you know, that all helps, you know, bring down cost, increase performance, so you can sell a lot more capacity on the rocket, which is helpful to ASP and so forth. I think the most important thing in the launch business is rate, right? It's all about absorbing your fixed, your fixed overhead or fixed costs related to that, to that program or product.

Uh, the components business has a quite interesting range of of margins. You know, you have some products in there that are, you know, more towards say, 30 points in on gaap gross, margin, other ones that are you know, kind of north of 70 points of of non-gaap gross margins. So there's a widespread and mix is hard to predict, you know, that far out in the year. I mean, I I do think there will be a a supportive Trend towards gross margin, but I think it's difficult to really get a lot of granularity kind of, you know, much more than, you know, I'd say maybe 1 or 2 quarters out. Um, but overall I I think you know, as we continue to kind of grow the components mix the business more electron in the mix. Um, it's all going to

Adam Spice: I think the most important thing in the launch business is rate, right? It's all about absorbing your fixed, your fixed overhead or fixed costs related to that, to that program or product. I think that, you know, what we'll start to do, our plan is to give you guys as much clarity as we can, or breakout between Electron, for example, and Neutron as that comes into production. You can see that continued expansion and kind of that Electron business operating at model, and then the trends as Neutron ramps, so that goes towards target model as well. Hopefully, it's a bit quicker to get to target model, or target margins on Neutron because it's a reasonable launch vehicle, but it will still take several years.

To be positive. Now, I think the one caveat,

Um, but I think the most important thing in in in the launch business is, uh, is rate, right? So it's all about absorbing your your fixed, uh, your fixed overhead or fixed costs related to that to that program or product. So I think that you're going to see, you know what, what we'll start to do. Our plan is to give you guys as much clarity as we can or break up between electron for example and neutron as that comes into production. So that you can see that continued expansion and kind of that that electron business operating at model and then the trends as a as Neutron ramps as that goes towards Target Model as well. Hopefully it's a bit quicker. Um to get to Target Model. Uh, a Target margins on Neutron because it's a reasonable launch vehicle, but it will still take several years. So you'll start off with, you know fairly you know kind of low to even maybe negative gross margin for some of the early flights but then again you'll see just like electronic pop back up and become pretty positive pretty quickly and get to Target Model. So it's a long-winded answer. I you know I do think again the the the trends are supportive of gross margin expansion um but it could be

Adam Spice: I think that, you know, what we'll start to do, our plan is to give you guys as much clarity as we can, or breakout between Electron, for example, and Neutron as that comes into production. You can see that continued expansion and kind of that Electron business operating at model, and then the trends as Neutron ramps, so that goes towards target model as well. Hopefully, it's a bit quicker to get to target model, or target margins on Neutron because it's a reasonable launch vehicle, but it will still take several years. You'll start off with, you know, fairly, you know, kind of low to even maybe negative gross margin for some of the early flights.

Be a little bit kind of volatile and hard to predict quarter to quarter when you get more than 1 or 2 quarters out.

Thanks Adam. Thanks Peter.

Thank you. Our next question comes from suji D Silva with Roth Capital. Your line is open.

Adam Spice: You'll start off with, you know, fairly, you know, kind of low to even maybe negative gross margin for some of the early flights. Again, you'll see, just like Electron, it pop back up and become pretty positive pretty quickly and get to target model. It's a long-winded answer. I, you know, I do think, again, the trends are supportive of gross margin expansion. It could be a little bit kind of volatile and hard to predict quarter-to-quarter when you get more than 1 or 2 quarters out.

All right, Pete. Hi Adam. Congratulations on the progress here. Um, just real quick on the electron launches. Um, are there any ASP Trends to note, Adam any Tailwind in the second half where they're fairly steady? Um, next couple of quarters.

Adam Spice: Again, you'll see, just like Electron, it pop back up and become pretty positive pretty quickly and get to target model. It's a long-winded answer. I, you know, I do think, again, the trends are supportive of gross margin expansion. It could be a little bit kind of volatile and hard to predict quarter-to-quarter when you get more than 1 or 2 quarters out.

Um you know I think the I think the we're going to continue to see, you know, a March towards. Uh, you know, I'd say

You know what, what we'll start to do. Our plan is to give you guys as much clarity as we can or break up between electron, for example and neutron as that comes into production. So you can see that continued expansion and kind of that that electron business operating at model and then the trends as a as Neutron ramps as that goes towards Target Model as well. Hopefully it's a bit quicker. Um to get to Target Model. Uh, a Target margins on Neutron because it's a reasonable launch vehicle, but it will still take several years. So you'll start off with, you know fairly you know kind of low to even maybe negative gross margin for some of the early flights but then again you'll see just like electronic pop back up and become pretty positive pretty quickly and get to Target Model. So it's a long-winded answer. I you know I do think again the the the trends are supportive of gross margin expansion, um but it could be a little bit kind of volatile and hard to predict quarter to quarter when you get more than 1 or 2 quarters out.

Justin: Thanks, Adam. Thanks, Peter.

Daniel Hibshman: Thanks, Adam. Thanks, Peter.

Thanks Adam. Thanks Peter.

Operator: Thank you. Our next question comes from Suji Desilva with Roth Capital. Your line is open.

Uh, I'd say you know, as we as we increase more of the mix towards haste, that's helpful to to the ASP. Um I think margins are relatively consistent because even though hastes are priced higher, there's a lot more um Mission assurance and other things go along with them. So absolute dollars are higher. The gross margin percentage is is relatively consistent across haste and electron um

and then, um,

Thank you. Our next question comes from Suji D. Silva with Roth Capital. Your line is open.

Suji Desilva: Hi, Pete. Hi, Adam. Congratulations on the progress here. Just real quick on the Electron launches. Are there any ASP trends to note, Adam, any tailwinds in the second half, or are they fairly steady, next couple of quarters?

All right, Pete. Hi, Adam. Congratulations on the progress here. Um, just real quick on the Electron launches, um, are there any ASP trends to note with them? Any tailwind in the second half, or are they fairly steady the next couple of quarters?

Adam Spice: You know, we're gonna continue to see, you know, a march towards, you know, as we increase more of the mix towards HASTE, that's helpful.

you know, so I would say, overall we've seen a very nice expansion in ASP, over the last several years because of the increased mix from pace. And I don't see that changing, uh, in fact, you know, we we continue to grow that, that sub segments of the business quite nice. And, and again, I, I just given the things that people was talking about earlier, there was a golden dome and the importance of, you know, the hypersonics test capabilities, you know, that's a really strong area of growth for us going forward.

Um, you know, I think—we're going to continue to see, you know, a march towards, uh, you know, I'd say—

Forward. So I think the overall positive bias towards higher ASP per launch uh just as we've seen over the last several years.

Suji Desilva: Mm-hmm

Adam Spice: to the ASP. I think margins are relatively consistent because even though HASTEs are priced higher, there's a lot more mission assurance and other things go along with them. Absolute dollars are higher. The gross margin percentage is relatively consistent across HASTE and Electron. You know, I would say overall, we've seen a very nice expansion in ASP over the last several years because of the increased mix from HASTE, and I don't see that changing. In fact, you know, we continue to grow that subsegment of the business quite nicely. Again, I given the things that Pete was talking about earlier regards to Golden Dome and the importance of, you know, the hypersonics test capabilities, you know, that's a really strong area of growth for us going forward.

Uh, I'd say, you know, as we increase more of the mix towards HASTE, that's helpful to the ASP. Um, I think margins are relatively consistent because even though HASTEs are priced higher, there's a lot more mission assurance and other things that go along with them. So absolute dollars are higher. The gross margin percentage is relatively consistent across PACE and Electrons. Um,

and then, um,

Okay, and a follow-up question, maybe it's repeat, you know, maybe you can reflect on versus a few years ago to get to the launch Cadence. The customers payload Readiness was something that was variable. Um, has that changed has the nature of the customers changed, where you can feel more comfortable that you can hit a 11 to 13 Day? Cadence. Is it just the higher number of customers coming in that you can kind of, um, load them off or what? Just any call it every helpful.

Adam Spice: I think overall, a positive bias towards higher ASP per launch, just as we've seen over the last several years.

You know, so I would say overall we've seen a very nice expansion in ASP over the last several years because of the increase in mix from haste and I don't see that changing. Uh, in fact, you know, we we continue to grow that, that sub segments of the business quite nicely. And again, I, I just given the things that people was talking about earlier where there was a golden dome and the importance of, you know, the hypersonics test capabilities, you know, that's a really strong area of growth for us going forward. So I think overall a positive bias towards higher ASP per launch uh just as we've seen over the last several years.

Suji Desilva: Okay. My follow-up question maybe is for Pete. You know, Pete, maybe you can reflect on versus a few years ago, to get to the launch cadence, the customer's payload readiness was something that was variable. Has that changed? Has the nature of the customers changed, where you can feel more comfortable that you can hit a 11 to 13-day cadence? Is it just a higher number of customers coming in that you can kind of load them off? Just any color that'd be helpful.

Yeah. Thanks, AJ. I I would just say that we're we've, we've we've probably got better at looking like a duck where it's just, you know, on a glassy Pond. And it looks normal when there's legs flat out underneath it, and, um, with a higher Cadence gives us, uh, the ability to move customers around. So, I would say that, you know, that's just the reality of the launch business, payloads are ready until they're not. Um, I think we've just got way better at managing. Um, those customers having more whip having more Rockets, integrated ready to go and um, and and, you know, managing that. So it's it's great to hear that it looks smoother but, um, you know, behind the scenes. There's, there's everyone's flat out mixing and matching and making sure that, um, you know, it it all looks looks smooth from the outside,

Helpful color. Thanks be thanks again.

Okay, and the follow-up question maybe is a repeat, you know. Maybe you can reflect on first, a few years ago, to get to the launch cadence. The customers' payload readiness was something that was variable. Has that changed? Has the nature of the customers changed, where you can feel more comfortable that you can hit an 11- to 13-day cadence? Is it just the higher number of customers coming in, that you can kind of, um, load them off, or what?

Any color that be helpful.

Peter Beck: Yeah, thanks, Sujit. I would just say that we've probably got better at looking like a duck, where it's just, you know, on a glassy pond, and it looks normal, and there's legs flat out underneath it. With a higher cadence, gives us the ability to move customers around. I would say that, you know, that's just the reality of the launch business. Payloads are ready until they're not. I think we've just got way better at managing those customers, having more whip, having more rockets integrated, ready to go, and, you know, managing that. It's great to hear that it looks smoother, but, you know, behind the scenes, there's everyone flat out, mixing and matching and making sure that, you know, it all looks smooth from the outside.

Thank you. Our next question comes from Christy Lee Christine. Lee. Wag with Morgan Stanley, your line is open.

Yeah, hi. This is uh, Justin Lange on for, for Christine. Thanks for taking the questions.

On the on.

On timeline.

Not run into the stage 1 tank issue with the program have met the earlier goal of of getting to the pad here in 1 Q. It sounded like from your earlier comments.

It was a good volume of qualification work completed in the quarter. So just trying to assess, you know, whether there are other factors that play in this new timeline or are really isolated to the stage 1 tank issue.

Yeah, thanks AJ. I, I would just say that we we've we've probably got better at looking like a duck where it's just, you know, on a glassy Pond and it looks normal and there's legs flat out underneath it and, um, with a higher Cadence gives us, uh, the ability to move customers around. So, I would say that, you know, that's just the reality of the launch business, payloads are ready until they're not. Um, I think we've just got way better at managing. Um, those customers having more whip having more Rockets, integrated ready to go and um, and and and, you know, managing that. So it's it's great to hear that it looks smoother. But, um, you know, behind the scenes is, is everyone's flat out mixing and matching and making sure that, um, you know it it all looks looks smooth in the outside,

Suji Desilva: Helpful color. Thanks, Pete. Thanks, guys.

Helpful. Thanks be thanks. Good.

Operator: Thank you. Our next question comes from Kristine Liwag with Morgan Stanley. Your line is open.

Thank you. Our next question comes from Christy Lee, Christine Lee with Morgan Stanley. Your line is open.

Justin: Yeah. Hi, this is Justin laying on for Kristine. Thanks for taking the questions. Peter, curious just back on the Neutron timeline. Had you not run into this stage one tank issue, would the program have met the earlier goal of getting to the pad here in Q1? It sounded like from your earlier comments, there's a good volume of qualification work completed in the quarter. Just trying to assess, you know, whether there are other factors at play in this new timeline or are really isolated to the stage one tank issue.

Justin Lang: Yeah. Hi, this is Justin laying on for Kristine. Thanks for taking the questions. Peter, curious just back on the Neutron timeline. Had you not run into this stage one tank issue, would the program have met the earlier goal of getting to the pad here in Q1? It sounded like from your earlier comments, there's a good volume of qualification work completed in the quarter. Just trying to assess, you know, whether there are other factors at play in this new timeline or are really isolated to the stage one tank issue.

Yeah, hi. This is, uh, Justin Lange on for Christine. Thanks for taking the questions.

Kind of hard to say because when the tank leak go, it it like, you know, the reverberation went through the test stand in the entire business. So, um, the moment that happened everybody just stopped what they were doing. And a lot of sense to get onto the tank to figure out what went wrong. So, you know, we moved a lot of resources around um, and from lots of parts of the business. So, um, I I'd have to go back and have a look and see if we, if we played everything forward, whether you know, what what, what that timeline would have looked like, but it's sort of hard at this point because um, you know, we we we had we had an anomaly.

Pete, curious just back on the on the neutron timeline. And how how do you not run into the stage 1 tank issue with the program have met the earlier goal of of getting to the pad here in 1 Q? It sounded like from your earlier comments. This is a good volume of qualification work completed in the quarter, so just trying to assess

You know, whether there are other factors that play in this new timeline, or if it’s really isolated to the Stage 1 tank issue.

Peter Beck: Yeah. Thanks, Justin. It's kind of hard to say because when the tank let go, it, like, you know, the reverberation went through the test stand and the entire business. The moment that happened, everybody just stopped what they were doing in a lot of sense to get onto the tank to figure out what went wrong. You know, we moved a lot of resources around and from lots of parts of the business. I'd have to go back and have a look and see if we, if we played everything forward, whether, you know, what that timeline would have looked like. It's sort of hard at this point because, you know, we had an anomaly.

Okay, that makes sense. I would add 1 more thing to that. I think the if there's a silver lining to the tank, anomaly is the fact that because of what happened, you know, it just has given the other kind of subsystem teams, the opportunity to really kind of fully exercised. All the demons if you will is much more than they, they could have under the compressed time schedule that we were working towards. So in some ways you know the the the tank Letting Go will create certainly a lower risk test flight. Um when that happens later this year, so I think yeah. It's it's it's a, you know, nobody's ever happy when you have an anomaly, it's something that wasn't planned and certainly wasn't anticipated, but I think it does help us bring down the overall kind of risk stance of of the program as we move towards, uh, that first test launch.

Yeah, thanks, Justin. It's kind of hard to say because when the tank leak go, it it like, you know, the reverberation went through the test stand in the entire business. So, um, the moment that happened everybody just stopped what they were doing. And a lot of sense to get onto the tank to figure out what went wrong. So, you know, we moved a lot of resources around um, and from lots of parts of the business. So, um, I I, I have to go back and have a look and see if we, if we played everything forward, whether you know, what what what that timeline would have looked like, but it's sort of hard at this point because um, you know, we we we had we had an anomaly.

Suji Desilva: That makes sense.

Justin Lang: That makes sense.

Adam Spice: I would add one more thing to that. I think if there's a silver lining to the tank anomaly, it's the fact that because of what happened, you know, it just has given the other kind of subsystem teams the opportunity to really kind of fully exercise all the demons, if you will, as much more than they could have under the compressed time schedule we were working towards. In some ways, you know, the tank letting go will create certainly a lower risk test flight when that happens later this year. I think, yeah, it's, it's, you know, nobody's ever happy when you have an anomaly.

Got it. That makes sense and helpful thanks um and Adam actually just 1 for you back on on the SDA award curious, if you could speak a little bit more to the cash profile in particular, and how that lines up against the revenue bell curve, the sketched out earlier, thanks.

Yeah. So actually kind of interesting with these types of programs because of the way that you do the accounting and the revx so under ASC 606 you know you you we model these things so you always have to be in a positive cash position.

Adam Spice: It's something that wasn't planned and certainly wasn't anticipated, but I think it does help us bring down the overall kind of risk stance of the program as we move towards that first test launch.

So you when you kind of work out your milestones and how you're flowing out dollars to your subs, and so forth, and spending money on the program internally, you always need to be in a position of positive cash in order to be able to recognize Revenue along the way. And so

I'd add 1 more thing to that. I think the if there's a silver lining to the tank, anomaly is the fact that because of what happened, you know, it just has given the other kind of subsystem teams, the opportunity to really kind of fully exercised. All the demons if you will is much more than they, they could have under the compressed time, schedule, we were working towards. So in some ways you know the the tank Letting Go will create certainly a lower risk test flight. Um when that happens later this year, so I think yeah. It's it's it's a, you know, nobody's ever happy when you have an anomaly, it's something that wasn't planned and certainly wasn't anticipated, but I think it does help us bring down the overall kind of risk stance of of the program as we move towards, uh, that first test launch.

Justin: Got it. That makes sense and helpful. Thanks. And Adam, actually, just one for you. Back on the SDA award, curious if you could speak a little bit more to the cash profile in particular and how that lines up against the revenue bell curve that you sketched out earlier? Thanks.

Justin Lang: Got it. That makes sense and helpful. Thanks. And Adam, actually, just one for you. Back on the SDA award, curious if you could speak a little bit more to the cash profile in particular and how that lines up against the revenue bell curve that you sketched out earlier? Thanks.

this program is consistent with that. Um, you know, we've gotten some questions as to whether or not the partial government shutdown is impacted our customer in this case, ability to pay and say No. In fact we had got a very large uh, payment earlier this week uh, from that customer. So the money's still flowing um and you know everything seems to be green lights right now.

Got it. That makes sense and is helpful, thanks. Um, and Adam, actually just one for you, back on the SDA award. Curious if you could speak a little bit more to the cash profile in particular, and how that lines up against the revenue bell curve you sketched out earlier. Thanks.

Adam Spice: Yeah. Actually, kind of interesting with these types of programs, because of the way that you do the accounting and the rev rec. Under ASC 606, you know, you, we model these things, so you always have to be in a positive cash position. When you kind of work out your milestones and how you're flowing out dollars to your subs and so forth, and spending money on the program internally, you always need to be in a position of positive cash in order to be able to recognize revenue along the way. This program is consistent with that. You know, we've gotten some questions as to whether or not the partial government shutdown has impacted our customer, in this case, ability to pay.

Thank you. There are no further questions at this time. This does include the program and you may now. Disconnect everyone enjoy the rest of your day.

Yeah, so actually it's kind of interesting with these types of programs because of the way that you do the accounting and the revenue. So under ASC 606, you know, we model these things so you always have to be in a positive cash position. So when you work out your milestones and how you're flowing out dollars to your subs and so forth, and spending money on the program internally, you always need to be in a position of positive cash in order to be able to recognize revenue along the way. And so—

Adam Spice: As they know, in fact, we had got a very large payment earlier this week from that customer. The money's still flowing, and, you know, everything seems to be green lights right now.

Adam Spice: The money's still flowing, and, you know, everything seems to be green lights right now.

This program is consistent with that. Um, you know, we've gotten some questions as to whether or not the partial government shutdown is impacting our customer, in this case, ability to pay. As of now, in fact, we got a very large payment earlier this week from that customer. So the money's still flowing, um, and, you know, everything seems to be green lights right now.

Justin: Okay. Thanks, both.

Justin Lang: Okay. Thanks, both.

Thanks both.

Operator: Thank you. There are no further questions at this time. This does conclude the program. You may now disconnect. Everyone, enjoy the rest of your day.

Thank you. There are no further questions at this time. This does conclude the program, and you may now disconnect. Everyone enjoy the rest of your day.

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