Rocket Lab (Nasdaq: RKLB) is seeing a marked uptick in interest in Neutron, the reusable rocket it is building to carry up to 13,000 kilograms to low Earth orbit. It has now filled up its Neutron rocket‘s schedule into the 2030s, selling eight more launches in the third quarter for more than $US 515 million and at a higher price. This after it delayed the first flight into 2027. All figures are in U.S. dollars, Rocket Lab’s reporting currency.
Rocket Lab reported third-quarter results on Monday, with record revenue of $268 million, up 73 per cent from a year earlier. Most of the revenue came from building satellites. Its backlog grew 52 per cent in three months to $3.57 billion.
Iridium would make Rocket Lab also a satellite operator
Rocket Lab made its name with Electron, a small rocket it has launched 99 times, but its Space Systems unit, which builds spacecraft and their parts, now brings in about 80 per cent of revenue. It has more than 55 spacecraft in development and build, with 12 it built have this past year launched.
Rocket Lab is buying Iridium Communications, a deal chief executive Sir Peter Beck said on Monday’s call will make it “a true end-to-end space company that not only builds and launches spacecraft, but also owns and operates its own constellation.” The company now calls that business space services. Iridium’s shareholders have approved the deal, which leaves the regulators. Rocket Lab sold about $2.4 billion of new shares in the quarter to pay for it.
Launch customers are booking years ahead
As the market factors in the expected retirement of SpaceX’s Falcon 9, Beck said customers are turning to Electron as other rideshare options go away. Rocket Lab signed more than $1 billion of launch contracts in the quarter, covering 54 launches. The two largest were 18 flights of HASTE, the suborbital version of Electron used for hypersonic testing, for the U.S. Space Force, and 20 Electron launches for Japan’s Synspective.
ICEYE, the European radar satellite maker and operator, signed for three of the eight Neutron launches, starting in late 2028. Muon Space took two. Starcloud, which plans data centres in orbit, and the Space Force took one each. Neutron’s base price rose to $70 million from $55 million. Chief financial officer Adam Spice said Rocket Lab “could have actually booked more launches in Q3 for Neutron than we did,” but passed on customers who wanted more launches at a slightly lower price.
Bank of America’s Andrew Stein asked about AST SpaceMobile‘s plan, announced the week before, to build its own rocket. “I was hoping someone was not going to ask that question,” Beck said. Launch capacity is so tight that even Neutron will not meet demand, he said, and half of Neutron’s capacity is set aside for Rocket Lab’s own missions. “The large space companies of the future are going to have their ability to launch their own stuff.”
Neutron’s first flight waits on its first-stage tank
A first-stage tank for Neutron failed qualification testing early in the year. In August, Rocket Lab still expected Neutron on the launch pad in the fourth quarter. Then on Oct. 14, Beck said in a recorded update that inspectors had found voids, tiny air pockets between the carbon fibre layers, in the forward dome that caps the first-stage propellant tank. The dome would not necessarily have failed in flight, he said, but “possible success isn’t our standard.” It moved the first flight to 2027.
On Monday, Beck said the replacement dome has been laid up and cured, and that the results show a clean part. “It’s nice to have that problem behind us now,” he said. The company’s presentation lists inspection of the dome as the next step. After that, the finished tank goes through pressure tests with water at the Neutron factory, then cryogenic tests at Launch Complex 3 on Wallops Island, Va. In October, Beck expected that work to wrap up in the first quarter of 2027, with a new launch date to follow.
Spice said Rocket Lab set aside a reserve against an expected loss on Neutron’s second flight, given how new the vehicle will be. During the call, the Pentagon’s Office of Strategic Capital announced a $150 million conditional loan commitment to help Rocket Lab fly Neutron more often after its first launch. Spice expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to turn positive within six months of Neutron’s first successful flight.
Rocket Lab’s Canadian ties
Toronto’s Kepler Communications has booked one of the eight new Neutron flights, its first dedicated launch, for a 2028 mission to expand its optical data relay network. Rocket Lab also built the satellite buses for the Globalstar replacement satellites MDA Space delivers as prime contractor.
Rocket Lab also owns Toronto’s Sinclair Interplanetary, which it bought in 2020 and folded into its operations. Sinclair builds reaction wheels and star trackers.
Rocket Lab beat its August forecast
In August, Rocket Lab told investors to expect third-quarter revenue of $250 million to $265 million and a gross margin, what is left of each sales dollar after the direct cost of the work, of 29 to 31 per cent. It came in at $267.8 million and 33.6 per cent. Space Systems revenue rose 88 per cent from a year earlier to $214.8 million, and launch revenue rose 30 per cent to $53.1 million. Gross margin was still down from 37 per cent a year earlier, which Rocket Lab attributes to more lower-margin satellite platform work and one-time benefits in the year-ago quarter.
Rocket Lab lost $79.7 million, up from $49.3 million in the second quarter. The Iridium deal accounts for much of the increase, with $21.3 million in transaction costs and a $27.3 million charge for ending a $3.6-billion bridge loan commitment it no longer needed. Operating cash flow turned positive at $7.2 million on milestone payments for satellite contracts, which Spice said are “lumpy and increasing in magnitude.” He expects free cash flow to stay negative at elevated levels in the fourth quarter as Neutron spending continues.
Key metrics
| $US millions | Q3 2026 | Q2 2026 | Q3 2025 | YoY change |
|---|---|---|---|---|
| Revenue | $267.8 | $234.1 | $155.1 | +72.7% |
| — Space Systems | $214.8 | $189.5 | $114.2 | +88.1% |
| — Launch Services | $53.1 | $44.6 | $40.9 | +29.8% |
| Gross profit | $90.1 | $84.6 | $57.3 | +57.2% |
| Gross margin | 33.6% | 36.1% | 37.0% | -3.4 pts |
| Non-GAAP gross margin | 38.4% | 41.5% | 41.9% | -3.5 pts |
| Adjusted EBITDA | $(18.0) | $(8.8) | $(26.3) | n/m |
| Net loss | $(79.7) | $(49.3) | $(18.3) | n/m |
| Loss per share (basic and diluted) | $(0.12) | $(0.08) | $(0.03) | n/m |
| Operating cash flow | $7.2 | $(84.1) | $(23.5) | n/m |
| Free cash flow | $(23.9) | $(110.1) | $(69.4) | n/m |
| Backlog (period end) | $3,570 | $2,360 | n/a | n/m |
| Cash and cash equivalents (period end) | $4,447.7 | $2,129.5 | n/a | n/m |
Next for Neutron and Iridium
For the fourth quarter, Rocket Lab expects revenue of $270 million to $290 million, which would put 2026 revenue near $1 billion. Electron’s 100th launch was expected within about a week of this weeks call. Before either Neutron or Iridium moves, Rocket Lab needs the tank to pass its cryogenic tests and regulators to approve the deal.
Shares closed Monday at $58.86, before the results were released, about 61 per cent below their May 27 closing high.