Rocket Lab (RKLB) will attempt to launch its first "Neutron" rocket by the end of 2024. NASA recently tapped Rocket Lab, along with 14 other companies, to aid the space agency with payload integration services on suborbital rockets, high-altitude balloons, and orbital spacecrafts and satellites.
Peter Beck, Rocket Lab CEO, joins Yahoo Finance to discuss the feasibility of the Neutron rocket launch timeline as well as the space sector's profitable intersection with other industries.
Beck elaborates on the growth of the space industry and how companies like Rocket Lab are positioned to deliver far-reaching services: "We see that businesses that typically haven't had anything to do with space becoming quite reliant on it. And our view [is] that the large, successful space companies of the future are not going to be solely a launch company or solely a satellite manufacturing company because the sheer power when you combine these two elements together, space is a giant engineering compromise, if you will. So if you can both add launch and space systems together, then you can provide services that are far superior than if you're doing it in a more traditional sense. And we've seen more and more companies come to us and they have no knowledge of the space industry nor do they want to, but they just want a service."
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AKIKO FUJITA: Rocket Lab shares have had a bit of a difficult start to 2024, down more than 20% so far this year. The space company is looking to make its mark on the industry with the launch of its first Neutron rocket, which it originally unveiled plans of back in 2021. Let's bring in Peter Beck. He is the Rocket Lab CEO.
And Peter, it's good to talk to you today. There's so much attention on this Neutron launch, which is, of course, the medium-lift rocket that you're looking to launch by the end of the year. But I want to get your reaction to a report that came out from TechCrunch, which, by the way, is owned by our parent company Apollo as well, sort of suggesting-- they cite an internal congressional memo that said Rocket Lab essentially overstated its ability to be able to deliver on this launch by the end of this year, saying, essentially, December 15 was put as the target date, so you could be eligible for these lucrative contracts that come through from the Space Force. Want to get your reaction to that. How much credence do we put in that and how credible is that launch target, December 15?
PETER BECK: Yeah. Well, thanks very much. Look, I think, clearly, we've got the attention of our competitors. And you know, I take that as a feather in our cap that people start throwing mud at you.
So look, we're working super hard to try and get the vehicle to the pad by the end of the year. I think everybody knows that. But we're also being realistic that it is a launch vehicle and it's a launch vehicle program.
And if everything goes well, we'll get it to the pad. And if we have issues along the way, then we won't. But at the moment we have a schedule that says we can get it to the pad. So until that changes, we're not waving the white flag.
AKIKO FUJITA: So let's talk about some of those challenges in getting there. You've highlighted in the most recent earnings call about this new engine that will be used in Neutron. That's, kind of, the next step, getting the test going on that.
What does that timeline look like? You mentioned potentially end of March. Is that schedule still on track?
PETER BECK: Yeah. Yeah. So you know, engines are typically the long pole in the tent on any new launch vehicle development. We've done everything we can to try and remove the stress out of the engine and the engine program. So we'll look to have something on the test stand hopefully by the end of March.
And then that's when the rubber hits the road as we'll see how the engine performs. And we're kind of at that honeymoon phase right now where we have a lot of hardware all coming to fruition, you know. We've completed all our avionics and hardware in the loop and a lot of the software and testing. So now is that time when all that hardware comes together and we get to see what we've really got.
AKIKO FUJITA: It's been pretty incredible to see the ramp up in just commercial activity within the space sector. Rocket Lab itself trying to own sort of that full stack from satellite to launch. You've got Electron already really sort of humming along.
Neutron, this medium-lift rocket, is next. Other offerings in the works as well. What does the future of Rocket Lab look like?
PETER BECK: Yeah, no, it's funny because everybody knows us for our Electron launch vehicle. You know, it's the second most frequently launched rocket behind SpaceX. Fourth most frequently launched rocket in the entire world, in fact. So not surprisingly, everybody knows us for our rocket programs.
But actually, 2/3 of our revenue come from our space systems division. And we have over 40 satellites and build some for very important national security missions like the SDA, you know, and some for commercial constellations. Then we have a merchant supply business of space components that is far reaching across the entire industry. In fact, you know, 37% of everything that was launched last year had a Rocket Lab logo on it somewhere.
So like I say, we're well known for our rockets, but we pride ourselves on being a one-stop space shop. So we do everything from the initial design and supply of components through to actually building the satellites, through the launching the satellites. And then just yesterday, we had an event for the MethaneSAT where we actually operate that satellite for customers as well. So really an end-to-end space company.
AKIKO FUJITA: Peter, you mentioned you have the second most launches behind SpaceX. Last I saw-- I mean SpaceX is launching rockets, what, once every three days or something. If you, kind of, break down the annual number, what's the target for Rocket Lab or how long until you get to that kind of frequency?
PETER BECK: Yeah, so Electron this year will launch around about 22 times. So that's a marked step up from last year, which is about 10 times. So we have a rocket on the pad, sort of, every couple of weeks.
AKIKO FUJITA: So far, when you look at, sort of, the breakdown of the space industry so much of it has been about rockets and satellite communications. We recently saw the successful re-entry of Varda space capsule, which, of course, Rocket Lab designed. This is a capsule for those who haven't been following that allows for space manufacturing.
A lot of that in pharmaceuticals as well. And I wonder, when you think about the future of this industry, does it get to a point where it's not just about being a rocket company, sort of, an aerospace company? That, in other words, pharmaceuticals, health and wellness, everybody will have to somehow participate in it because it is going to be at that intersection.
PETER BECK: Yeah, absolutely. And look, we see businesses that typically haven't had anything to do with space becoming quite reliant on it. And our view that the large, successful space companies of the future are not going to be solely a launch company or solely a satellite manufacturing company. Because the sheer power of when you combine those two elements together, I mean space is a giant engineering compromise, if you will.
So if you can both add launch and space systems together, then you can provide services that are far superior than if you're doing it in a more traditional sense. And we see more and more companies come to us and they have no knowledge of the space industry nor do they want to. But they just want to serve us and I think that's where it all boils down to. So the reason why we're pushing so hard on Neutron is 50% of it is that, look, we absolutely think there needs to be some more competition in the market in the medium launch area. And secondly, we want to provide services and having your own ride to space or having the keys to space is critical to that.
AKIKO FUJITA: Peter Beck, Rocket Lab's CEO, always good to talk to you. Really appreciate you joining us today.
