Rocket Lab USA, Inc. (RKLB.US) reported historic financial results for 2025, with total annual revenue reaching $602 million, a 38% year-over-year increase. The fourth quarter alone set a new record with revenue of $180 million. The company's backlog surged to $1.85 billion by the end of the fourth quarter, representing a 73% increase compared to the previous year.
Profitability improved significantly, with GAAP and non-GAAP gross margins for the fourth quarter reaching 38% and 44.3%, respectively. For the first quarter of 2026, Chief Financial Officer Adam Spice projected revenue between $185 million and $200 million. GAAP operating expenses are expected to be in the range of $120 million to $126 million, while adjusted EBITDA is forecasted to show a loss of $21 million to $27 million.
The company strengthened its financial position by raising $280.6 million through a secondary stock offering, bringing its cash and cash equivalents to $1.1 billion at the end of the fourth quarter. This provides ample liquidity for future acquisitions and working capital needs.
In its launch business, Rocket Lab achieved unprecedented operational efficiency in 2025, completing 21 launch missions throughout the year, including three HASTE hypersonic missions. The fourth quarter saw a record seven launches. CEO Peter Beck noted that the company secured over 30 new launch orders during the year, including a renewed multi-launch agreement with BlackSky for four additional missions, bringing the total number of contracted launches with BlackSky to 17.
To meet growing market demand and maintain a launch cadence of approximately 11 to 13 days, management has directed a significant increase in Electron rocket production capacity for 2026. Conventional launch business is expected to maintain a growth rate of around 20%. Furthermore, the increasing proportion of higher-value HASTE missions is expected to provide ongoing positive support for average selling prices and profitability within the launch segment.
The Space Systems business achieved a milestone by winning an $816 million prime contract from the U.S. Space Development Agency (SDA) for the Tracking Layer Tranche 2 program, involving the construction of an advanced constellation of 18 satellites. Including potential subsystem supply, the total value of this project could reach approximately $1 billion. Additionally, the ESCAPADE dual-satellite Mars exploration mission, developed for NASA, has been successfully launched, is currently at the Sun-Earth L2 Lagrange point, and is scheduled for handover to the University of California, Berkeley next month, with Mars orbit insertion expected in September of next year.
In product development, the company introduced a silicon-based solar array optimized for space applications, designed to provide gigawatt-level power support for future space-based data centers and mega-constellations. The LOXSAT in-orbit refueling mission, which integrates launch and spacecraft capabilities, is also progressing on schedule and is expected to launch later this year.
To deepen its vertical integration strategy and strengthen supply chain control, Rocket Lab has completed several acquisitions targeting high-value components. Following the 2025 acquisition of payload provider Geost, the company formally acquired optical components leader Optical Support Inc. (OSI) and machining specialist Precision Components Limited in the first quarter of 2026. These acquisitions aim to eliminate third-party supply chain delivery risks and margin stacking, ensuring self-sufficiency in core optical components and precision machining. The acquisition of laser communication terminal supplier Mynaric is still pending routine regulatory approval from the German government, with the process meeting management expectations.
Regarding the highly anticipated Neutron medium-lift rocket, management confirmed that the target date for its first launch has been adjusted to the fourth quarter of 2026. This adjustment follows an unexpected rupture during a hydrostatic pressure test on a first-stage tank in January, which technical analysis attributed to a manufacturing defect introduced by a third-party contractor's manual layup process. To eliminate this risk, subsequent tanks are being manufactured entirely in-house using automated fiber placement (AFP) technology. This process reduces dome layup time to a few days, cuts the overall production cycle to months, and significantly lowers manufacturing costs without additional capital expenditure. Despite this setback, progress on other core Neutron components remains on track, including the 'hungry hippo' fairing, second stage, and thrust structure, which have passed qualification and are in final integration. The Archimedes engine is undergoing intensive testing in preparation for integrated hot-fire testing on the launch pad.
During the Q&A session, management addressed several key points. The $1.85 billion backlog includes the full contract value of the SDA Tracking Layer Tranche 2 program, unrecognized revenue from the Transport Layer Tranche 1 program, and all signed multi-launch agreements for launch vehicles. Revenue recognition for large system projects like the SDA contract follows a bell curve under ASC 606, with approximately 10% recognized in the first year, 40% in each of the next two years, and the remaining 10% in the final year. Conservatively, about 37% of the total backlog is expected to convert to revenue within the next 12 months. The company maintains positive cash flow for major projects and has recently received a substantial upfront payment from the SDA, with government business unaffected by budget standstill risks.
For the Neutron rocket, the root cause of the tank failure has been fully confirmed. The switch to in-house AFP manufacturing drastically reduces production time and cost. The schedule adjustment has provided additional testing windows for other subsystems, reducing overall first-flight risk. The first launch will include full recovery hardware, initially attempting an ocean splashdown. If re-entry and landing ignition are successful, the second mission will utilize a sea-going recovery barge.
Launch frequency for Electron and HASTE missions is planned to increase in 2026, with total launches expected to exceed the 2025 record of 21. Strong demand for hypersonic testing is driving an increase in the proportion of higher-value HASTE missions, supporting a long-term upward trend in average selling prices. Operational teams manage launch schedules flexibly to maintain the rapid launch cadence.
Recent acquisitions like OSI are aimed at internalizing long-lead-time, high-cost components to ensure project delivery certainty and eliminate supply chain margin stacking. The potential acquisition of Mynaric is intended to rapidly acquire leading laser communication technology. With full in-house capabilities, Rocket Lab is actively pursuing opportunities in the European market, offering end-to-end solutions from components to complete satellite systems and dedicated launch services.
Regarding opportunities like NASA's Mars Telecommunications Orbiter (MTO) project and space-based data centers, the company is leveraging its deep-space platform technology and vertical integration to prepare competitive bids. The proprietary radiation-tolerant silicon solar array addresses power needs for mega-constellations. However, management has no plans for large-scale proprietary constellation infrastructure spending until the Neutron rocket achieves stable, mass production.
While initial毛利率 on large prime contracts like the SDA programs may be at the lower end of the financial range, leading to periodic fluctuations, the long-term profitability trend remains positive. This is driven by the expansion of higher-margin Space Systems components business, fixed cost dilution from increased launch frequency, and price premiums from HASTE missions. Upon achieving mass production, the Neutron rocket's毛利率 evolution is expected to follow the Electron's proven model, turning positive quickly after initial test launches.
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