Rocket Lab Corporation
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Item 1. Business
Who We Are
Our Mission: We Open Access to Space to Improve Life on Earth.
Rocket Lab is an end-to-end space company with an established track record of mission success. We deliver reliable launch services, spacecraft design services, spacecraft components, spacecraft manufacturing, optical systems and other spacecraft and on-orbit management solutions that make it faster, easier and more affordable to access space. We believe that space has defined some of humanity’s greatest achievements and it continues to shape our future. We are motivated by the impact we can have on Earth by making it easier to get to space and using it as a platform for innovation, exploration and infrastructure.
As one of select few commercial companies delivering regular access to orbit, our proven launch vehicle, spacecraft technology and global infrastructure uniquely position us to grow in this dynamic market. Advances in technologies, materials and components have led to miniaturization of spacecraft and a significant reduction in cost and time-to-market, concurrent with the increase in demand for space applications such as communications, remote sensing, Earth observation, meteorology and navigation. We provide customers with frequent, reliable and cost-effective access to orbit with Electron, a fully carbon composite launch vehicle powered by Rutherford, our electric turbopump 3D printed engines. Since our first Electron launch in 2017 through December 31, 2025, we have delivered over 200 spacecraft to orbit across 75 successful missions for commercial and government customers, including the United States (“U.S.”) Department of War (“DoW”), the National Aeronautics and Space Administration (“NASA”), the Defense Advanced Research Projects Agency (“DARPA”), the National Reconnaissance Office (“NRO”), and a number of domestic and international commercial spacecraft operators including Blacksky Holdings, Canon, Kinéis, Capella Space, Planet, OHB Group and Synspective. In 2025, Electron was the second most frequently launched orbital rocket.
Rocket Lab’s frequent launch cadence has been enabled through innovative manufacturing techniques for Electron, including 3D printing and automation, but production is only part of the formula for frequent and reliable launch. We believe our launch infrastructure is a key part of our success. We currently operate a private launch complex located in Mahia, New Zealand, which we refer to as Launch Complex 1 (“LC-1”). This launch complex is supported by a bi-lateral treaty between the United States and New Zealand governments that enables us to use U.S. launch and spacecraft technology for launches at LC-1 that otherwise would not be permitted for launches from foreign soil. This treaty provides us with a competitive advantage over other companies launching rockets from outside the U.S. that do not have the benefit of such a treaty. Additionally, by operating our own private launch complex, we do not have to share the launch complex with other launch providers and, subject to obtaining required regulatory clearances for launches, we have complete control over launch schedule and availability. LC-1 serves as our high-volume launch complex, with two launch pads capable of supporting up to 120 missions every year. We also operate a dedicated launch pad at NASA’s Wallops Flight Facility, at Wallops Island, Virginia, which we refer to as Launch Complex 2 (“LC-2”). LC-2 can support 24-hour rapid call-up capability for defense needs and urgent constellation replenishment and is currently licensed to launch 8 missions per year. We are currently constructing a dedicated launch pad located at the Mid-Atlantic Regional Spaceport within the NASA Wallops Flight Facility in Wallops Island, Virginia as a third launch complex, which we refer to as Launch Complex 3 (“LC-3”). LC-3 is being developed to receive and integrate Neutron launch vehicles.
Building on our strong foundation with Electron, we are now developing our Neutron launch vehicle. We anticipate Neutron will have a payload capacity of approximately 13,000 kg for reusable configuration launches to low Earth orbit and support lighter payloads for higher orbits. Neutron is tailored for large constellation deployments, interplanetary missions and potentially for human spaceflight. We expect constellation missions to make up an increasing percentage of small spacecraft launched, versus bespoke or one-off missions. As such, Neutron will be an important part of our end-to-end space solution as it is tailored to meet demand from this growing market.
Consistent with our endeavor to provide end-to-end space solutions for our customers, Rocket Lab has expanded beyond launch services into space systems, delivering spacecraft design services, spacecraft components, spacecraft manufacturing, optical systems and other spacecraft and on-orbit management solutions that make it faster, easier and more affordable to access space. Our space systems business utilizes our launch services, merchant spacecraft components, spacecraft design services, our family of spacecraft products, partnerships with global ground network service providers, as well as our own ground station network, and on-orbit constellation management capabilities to provide customers complete solutions that encompass design, build, launch and on-orbit operations.
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Our Competitive Strengths
•Flight Heritage – First Mover Advantage: Electron is the first small launch vehicle to establish frequent and reliable access to space with 75 successful missions and over 200 spacecraft deployed through December 31, 2025, and 77 successful missions as of February 26, 2026. Successfully reaching orbit repeatedly and delivering mission success across more than eight years of launches demonstrates Electron as a mature launch vehicle, and showcases Rocket Lab’s sophisticated team and robust manufacturing infrastructure and processes. We believe this gives us a significant competitive advantage over new and less-established market entrants to secure Rocket Lab both higher volume and market share and increasingly higher-value missions.
•Unique Technologies: We have innovated around key launch vehicle and spacecraft features and capabilities, including:
◦Carbon composite tanks and structures, delivering substantial mass-savings while maintaining high structural integrity;
◦An electric, turbo-pump-fed rocket engine that delivers high-performance while removing the complexity associated with traditional gas generator cycle engines;
◦We believe we were the first company to 3D print an orbital rocket engine, and as of December 31, 2025, have flight heritage with over 800 engines launched to space. We leverage our unique 3D printing capabilities beyond engines to enable ultra-rapid design and testing of new flight hardware and dramatically shorten our time-to-market; and
◦A unique kick stage that delivers spacecraft to precise and individual orbits increasing deployment flexibility and cost effectiveness for our customers. The kick stage can also be utilized as a fully-featured spacecraft, enabling hosted payload opportunities for our customers and for our own constellation applications.
•Deep Vertical Integration: We have vertically integrated design and manufacturing capabilities and developed world-class engineering and manufacturing teams across the United States, New Zealand and Canada. This allows us to manage and control almost every aspect of design, manufacturing and launch operations, enabling rapid prototyping and streamlined production to deliver products and solutions to orbit faster.
•Integrated Design and Test Capabilities: We own or lease our own propulsion test infrastructure, allowing us the capacity and flexibility to accelerate time-to-market while ensuring quality and a high rate of mission success.
•Multiple Launch Complexes: Rocket Lab operates two launch pads at its private orbital launch complex, LC-1, in Mahia, New Zealand. This launch complex can support up to 120 launches every year. By operating our own private launch complex, we have eliminated the availability issues commonly faced by other launch providers competing for a limited number of slots at shared launch complexes that they do not control. Rocket Lab also has access to two launch pads at the Mid-Atlantic Regional Spaceport within NASA Wallops Flight Facility in Wallops Island, Virginia: LC-2, which is operational, and LC-3, which is expected to be in service in 2026.
•A complete end-to-end space solution: Providing services and data from space has traditionally meant relying on multiple suppliers and mission partners. By providing launch services, spacecraft design and manufacturing services, including the vertically integrated supply of key spacecraft components, and on-orbit constellation management services, Rocket Lab provides strategic access to space.
Customers
Launch Services. As of December 31, 2025, we have launched and deployed over 200 spacecraft for our customers, which includes government customers, such as the United States Department of War (“DoW”), NASA and other U.S. government agencies. We also provide launch services to major domestic and international commercial and government spacecraft operators. Our launch services have been used by more than 20 organizations.
Space Systems. As of December 31, 2025, we have flight hardware on over 1,800 missions, including legacy missions enabled by Sinclair Interplanetary (acquired April 2020), Advanced Solutions, Incorporated (acquired October 2021), Planetary Systems Corporation (acquired November 2021), SolAero Technologies Corp. (acquired January 2022) and GEOST LLC (“GEOST”) (acquired August 2025). Our space systems have been used by a diverse mix of commercial, aerospace prime contractors and government customers.
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Our Growth Strategy
•Leverage our market position as the U.S.’ first commercially operational, dedicated small, orbital launch provider with NASA Category 1 certification, 75 successful launches and over 200 spacecraft deployed as of December 31, 2025 to win increasing numbers of launch services contracts, be entrusted with higher value payloads, and drive an increasing average selling price of our launch services.
•Continue to expand into new launch service verticals, such as Hypersonic Accelerator Suborbital Test Electron (HASTE).
•Expand our addressable launch market with the development of the medium-lift Neutron launch vehicle, where the additional lift capacity will enable significantly higher revenue per launch.
•Apply manufacturing scaling and cost-reduction strategies to the production of our launch vehicles, spacecraft components and subsystems, and satellites to capture large constellation opportunities and increasing market share.
•Expand our portfolio of spacecraft components by commercializing solutions developed for our launch vehicles and various spacecraft product lines, including avionics subsystems, radios and batteries.
•Leverage our proven spacecraft product lines to provide streamlined hosted payload and technology demonstration capabilities in low Earth orbit to commercial and government customers without the need for customers to procure separately designed and built third-party spacecraft buses.
•Build upon ongoing interplanetary spacecraft development efforts, as well as our announced Neutron launch vehicle development, to expand our addressable market for interplanetary scientific and commercial missions.
•Leverage our cost and frequency advantaged “access to space,” enabled by our established launch assets and proven capabilities, to further penetrate the available market for on-orbit constellation management and ultimately address the space applications market, representing the largest addressable market in the space economy.
Product & Services Overview
We design and manufacture small and medium-class rockets, spacecraft, spacecraft components, and flight and ground software to support the space economy. Our launch services are used to place spacecraft into Earth orbit, and escape trajectories. Our space systems are the building blocks for spacecraft, which includes composite structures, reaction wheels, star trackers, solar power solutions, radios, separation systems, command and control spacecraft software and optical systems. Our family of spacecraft product lines is configurable for a range of low Earth orbit, medium Earth orbit, geosynchronous orbit and interplanetary missions.
•Launch Services: We currently provide reliable and responsive launch services into low earth orbit on Electron for spacecraft up to 300 kg. We are also currently developing Neutron, a medium-lift launch vehicle, which we expect will provide efficient constellation launch services for payloads up to 13,000 kg for reusable configuration launches to low Earth orbit and support lighter payloads for higher orbits. Our operational launch facilities can support Electron and HASTE for up to 120 launch opportunities every year from LC-1, which is our private launch complex in Mahia, New Zealand, and up to 8 launch opportunities every year from LC-2 at NASA’s Wallops Flight Facility, at Wallops Island, Virginia.
•Space Systems: We provide spacecraft solutions for government and commercial customers ranging from selling individual spacecraft components for use by customers in constructing their own spacecraft to complete spacecraft design, manufacture and on-orbit operations. With our end-to-end space systems, customers can procure launch services, spacecraft, ground services and on-orbit management from one source, significantly streamlining their access to space.
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Launch Services
We design, manufacture and launch orbital and suborbital rockets to deploy payloads across a range of government and commercial missions from low Earth orbit to interplanetary destinations.
Electron is our orbital small launch vehicle that was designed to accommodate a high launch cadence business model to meet the growing and dynamic needs of our customers for small spacecraft launch services. Combining the use of innovative manufacturing technologies, including 3D printing and automation, Electron is optimized for rapid and frequent launch and has established itself as one of the most prolific and reliable orbital launch vehicles in the market. Since its maiden launch in 2017, Electron has become the leading small spacecraft launch vehicle, delivering over 200 spacecraft to orbit for government and commercial customers across 75 successful missions through December 31, 2025. In 2025, Electron was the second most frequently launched orbital rocket. Our launch services program has seen us develop many industry-leading innovations, including 3D printed electric turbo-pump rocket engines, fully carbon composite fuel tanks, a private orbital launch complex, a kick stage that can be configured to convert into a highly capable spacecraft on orbit.
Electron provides tailored access to orbit for the high-growth small spacecraft market across dedicated and rideshare missions. It is capable of deploying spacecraft of up to 300 kg to low Earth orbit across a wide range of orbital inclinations from 38 to 120 degrees from our operational LC-1 in Mahia New Zealand and a wide range of orbital inclinations from 38 to 60 degrees from our operational LC-2 in Wallops Island, Virginia. Electron is also capable of delivering spacecraft to deep space and interplanetary destinations, a capability which we successfully demonstrated with the launch of a NASA mission to the Moon in support of the agency’s Artemis program, Cislunar Autonomous Positioning System Technology Operations and Navigation Experiment (CAPSTONE). Electron has two primary stages and an innovative third kick stage, standing at 18 meters tall, with a diameter of 1.2 meters and a lift-off mass of approximately 14,000 kg, Electron’s design includes innovative use of avionics, electrical systems, and advanced carbon-composites for its structures and propellant tanks. Carbon-composite construction decreases mass by as much as 40 percent relative to other materials, contributing to Electron’s mass-to-orbit performance. Our in-house assembly of Electron’s composite tanks and structures improves cost efficiency and supports high rates of production. Electron’s kick stage enables the spacecraft to be placed in circular orbits, which is necessary to maintain consistent altitude, and is capable of engine restarts to deliver multiple payloads to a range of orbits, meeting precise orbit insertion requirements and deorbiting to avoid contributing to orbital debris.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. You should read this discussion and analysis in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. For additional context with which to understand our financial condition and results of operations, see the audited consolidated financial statements and accompanying notes contained therein as of December 31, 2025 and 2024 and related notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on February 26, 2026 (our “Form 10-K”). Certain amounts may not foot due to rounding. Certain information in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q contains forward-looking statements that involve numerous risks and uncertainties, including, but not limited to, those described under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and Part II, Item 1A. “Risk Factors” included in this Quarterly Report on Form 10-Q and under the heading “Risk Factors” in our Form 10-K. We assume no obligation to update any of these forward-looking statements. Actual results may differ materially from those contained in any forward-looking statements.
Overview
Rocket Lab is an end-to-end space company with an established track record of mission success. We deliver reliable launch services, spacecraft design services, spacecraft components, spacecraft manufacturing and other spacecraft and on-orbit management solutions that make it faster, easier and more affordable to access space.
While our business has historically been centered on the manufacture of small-class launch vehicles and the related sale of launch services, we are currently innovating in the areas of medium-class launch vehicle and launch services, space systems design and manufacturing, on-orbit management solutions and space data applications. Each of these initiatives addresses a critical component of the end-to-end solution and our value proposition for the space economy:
•Launch Services is the design, manufacture, and launch of orbital rockets to deploy payloads to various Earth orbits and interplanetary destinations.
•Space Systems is the design and manufacture of components and spacecraft program management services, space data applications, mission operations and optical systems.
Electron is our orbital small launch vehicle that was designed from the ground up to accommodate a high launch rate business model to meet the growing and dynamic needs of our customers for small launch services. Since its maiden launch in 2017, Electron has become the leading small spacecraft launch vehicle delivering over 200 spacecraft to orbit for government and commercial customers across 81 successful missions through March 31, 2026. In 2025, Electron was the second most frequently launched orbital rocket. Our launch services program has seen us develop many industry-leading innovations, including 3D printed electric turbo-pump rocket engines, fully carbon composite first stage fuel tanks, a private orbital launch complex, a rocket stage that can be configured to convert into a highly capable spacecraft on orbit, and the potential ability to successfully recover a stage from space, providing a path to reusability.
In March 2021, we announced plans to develop our reusable-ready medium-capacity Neutron launch vehicle that will increase the payload capacity of our space launch vehicles to approximately 13,000 kg for reusable configuration launches to low Earth orbit and support lighter payloads for higher orbits. Neutron will be tailored for commercial and U.S. government constellation launches and ultimately configurable for and capable of human space flight, enabling us to provide crew and cargo resupply to space stations. Neutron will also provide a dedicated service to orbit for larger civil, defense and commercial payloads that need a high level of schedule control and high-flight cadence. We expect to be able to leverage Electron’s flight heritage across various vehicle subsystems designs, launch complexes and ground station infrastructure.
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Our space systems initiatives are supported by the design and manufacture of our spacecraft family along with a range of components, software and services for spacecraft, including reaction wheels, star trackers, radios, separation systems, solar solutions, command and control spacecraft software, high voltage space grade battery solutions, optical systems and additional products in development to serve a wide variety of sub-system functions. We entered this market with our acquisition of leading spacecraft components manufacturer Sinclair Interplanetary, and have since expanded our market participation with the acquisitions of Planetary Systems Corporation, SolAero Technologies Corp., Advanced Solutions, Incorporated and GEOST LLC (“GEOST”). Each of these strategic acquisitions brought incremental vertically-integrated capabilities for our own spacecraft family and also enabled Rocket Lab to deliver high-volume manufacturing of critical spacecraft components and software solutions at scale prices to the broader spacecraft merchant market. Our spacecraft family, which are configurable for a range of low Earth orbit, medium Earth orbit, geosynchronous orbit and interplanetary missions enable us to offer an end-to-end mission solution encompassing launch, full spacecraft manufacturing, ground services, mission operations and optical systems to provide customers with streamlined access to orbit with Rocket Lab as a single mission partner.
Recent Developments
Neutron Update
We continue to make significant progress in the development of the Neutron launch vehicle. Neutron qualification testing of flight hardware from large structures through to component level systems is ongoing. During Q1, we achieved significant milestones across the Neutron program with ongoing integration and readiness of first-flight hardware, continued progress on Archimedes engine qualification, and advancement of the second stage and reusable fairing systems, positioning the medium-lift launch vehicle on track for its debut launch later this year. However, risk and uncertainty remains in the complex development cycle of a new launch vehicle which could impact our current best estimate of a targeted timeline for first launch.
Key Factors Affecting Our Performance
Ability to timely develop and successfully deploy Neutron launch vehicle
Our future results will depend on the success of the development and commercial acceptance of our Neutron medium-capacity launch vehicle. While we have made significant progress across Neutron’s structures and infrastructure to date, including engine testing and initial production execution, the commercial development of a new launch vehicle is inherently time consuming and involves numerous risks throughout the engineering and manufacturing development cycle, hardware and systems testing, and infrastructure readiness, any of which could create further delays in reaching the initial launch and future launches of the completed vehicle. In addition, even if we succeed in developing Neutron to a successful initial launch, we could be unsuccessful in developing the ability to produce these launch vehicles in quantities and with the necessary quality manufacturing system that ensures each vehicle and engines perform as required or meet our expectations for future launch cadence. Any delay in the production of the Neutron launch vehicle or in our ability to produce these launch vehicles at our expected rate of production and with a reliable quality management system could have a material impact on customer acceptance as well as our future revenue, financial condition and results of operations. Additional delays or setbacks in Neutron development may require more research, development and capital expenditures than we currently anticipate, which could adversely affect our liquidity and capital resources in future periods.
Ability to sell additional launch services, space systems service and spacecraft components to new and existing customers
Our results will be impacted by our ability to sell our launch services, space systems services, and spacecraft components to new and existing customers. We have successfully launched Electron 81 times delivering over 200 spacecraft to orbit, including suborbital launches, through March 31, 2026. We have flight hardware and spacecraft that have flown on over 1,800 missions, including legacy missions enabled by Sinclair Interplanetary (acquired April 2020), Advanced Solutions, Incorporated (acquired October 2021), Planetary Systems Corporation (acquired November 2021), SolAero Technologies Corp. (acquired January 2022) and GEOST (acquired August 2025). Our growth opportunity is dependent on our ability to expand our addressable launch services market with larger volumetric and higher mass payload capabilities of our in-development medium-capacity Neutron launch vehicle, which will address large commercial and government constellation launch opportunities. Our growth opportunity is also dependent on our ability to win spacecraft constellation missions and expand our portfolio of strategic spacecraft components. Our ability to sell additional products to existing customers is a key part of our success, as follow-on purchases indicate customer satisfaction and decrease the likelihood of competitive substitution. To sell additional products and services to new and existing customers, we will need to continue to invest significant resources in our products and services.
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Ability to improve profit margins and scale our business
We intend to continue to invest in initiatives to improve our operating leverage and significantly ramp production. We believe continued reduction in costs and an increase in production volumes will enable the cost of launch vehicles to decline and improve our gross margins. Our ability to achieve our production-efficiency objectives could be negatively impacted by a variety of factors including, among other things, lower-than-expected facility utilization rates, manufacturing and production cost overruns, increased purchased material costs and unexpected supply-chain quality issues or interruptions.
Government expenditures and private enterprise investment into the space economy
Government expenditures and private enterprise investment has fueled the growth in our target markets. We expect the continued availability of government expenditures and private investment for our customers to help fund purchases of our products and services will remain. This is an important factor in our company’s growth prospects.
Key Metrics and Select Financial Data
We monitor the following key financial and operational metrics that assist us in evaluating our business, measuring our performance, identifying trends and making strategic decisions.
Launch Vehicle Build-Rate and Launch Cadence
We built approximately 14 Electron launch vehicles in 2024 and approximately 24 Electron launch vehicles in 2025. We built approximately five Electron launch vehicles during the three months ended March 31, 2026. We launched 16 Electron vehicles in 2024 and 21 Electron vehicles in 2025. We launched six Electron vehicles during the three months ended March 31, 2026. Growth rates between launches and total launch service revenue are not perfectly correlated because our total revenue is affected by other variables, such as the revenue per launch, which can vary considerably based on factors such as unique orbit and insertion requirements, payload handling needs, launch location, time sensitivity of mission completion, method of revenue recognition and other factors.
Revenue Growth
Three Months Ended March 31, 2026 and 2025
We generated $200.3 million and $122.6 million in revenue for the three months ended March 31, 2026 and 2025, respectively, representing a year-on-year increase in revenue of approximately 63%. This year-on-year increase resulted from space systems revenue growth of $49.7 million, primarily driven by satellite manufacturing, and an increase in launch revenue of $28.1 million. Launch revenue growth was due to a higher launch cadence with six Electron launch missions completed for the three months ended March 31, 2026, versus five launch missions completed for the three months ended March 31, 2025, revenue recognized on over-time Hypersonic Accelerator Suborbital Test Electron (“HASTE”) launch missions, an increase in other launch revenue, which includes study revenue and a higher revenue per launch on point-in-time Electron launch missions.
Revenue and Cost Per Launch
Revenue per launch represents the average transaction price attributable to launch contract performance obligations during the period in which the launch occurs, regardless of whether the revenue is recognized using the point-in-time or over-time method of revenue recognition. This metric provides insight into general competitiveness and price sensitivity in the marketplace. Revenue per launch can vary considerably, based on factors such as unique orbit and insertion requirements, payload handling needs, launch location, time sensitivity of mission completion and other factors, and as such may not provide absolute clarity with regards to pricing and competitive dynamics in the marketplace. Cost per launch is calculated by taking actual costs of the launch vehicles that occur in the period, regardless of whether the costs were recognized using the point-in-time or over-time method and all period costs in the period of launch.
Three Months Ended March 31, 2026 and 2025
For the three months ended March 31, 2026 and 2025, revenue per launch was $9.3 million and $7.1 million, respectively. Meanwhile, cost per launch for the three months ended March 31, 2026 and 2025 was $5.4 million and $5.7 million, respectively. The increase in revenue per launch reflects changes in customer mix and mission complexity during the period in which the launches occurred.
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Backlog
Backlog represents future revenues that we would recognize in connection with the completion of all contracts and purchase orders that have been entered into by our customers but have not yet been fulfilled, excluding any customer options for future products or services that have not yet been exercised. Contracts for launch services and spacecraft builds typically include termination rights that may be exercised by customers upon advanced notice and payment of a specified termination fee. Backlog increased from $1,847.3 million as of December 31, 2025 to $2,219.8 million as of March 31, 2026, of which $1,298.3 million is related to space systems and $921.4 million is related to launch services. The increase was primarily a result of continued bookings during the period, partially offset by recognizing revenue on contracts during the period.
Components of Results of Operations
Revenue
Our revenues are derived from a combination of long-term fixed price contracts for launch services and spacecraft builds, and purchase order based spacecraft components sales. Revenues from long-term contracts are recognized using either the “point-in-time” or “over-time” method of revenue recognition. Point-in-time revenue recognition results in cash payments being initially accrued to the balance sheet as deferred revenue as contractual milestones are accomplished and then recognized as revenue once the final contractual obligation is completed. Over-time revenue recognition is generally based on an input measure of progress based on costs incurred compared to estimated total costs at completion. Each project has a contractual revenue value and an estimated cost. The over-time revenue is recognized based on the percentage of the total project cost that has been realized.
Estimating future revenues and associated costs and profit is a process requiring a high degree of management judgment, including management’s assumptions regarding our future operational performance as well as general economic conditions. Frequently, the period of performance of a contract extends over a long period of time and, as such, revenue recognition and our profitability from a particular contract may be affected to the extent that estimated costs to complete are revised, delivery schedules are delayed, performance-based milestones are not achieved or progress under a contract is otherwise impeded. Accordingly, our recorded revenues and operating profit from period to period can fluctuate significantly depending on when the point-in-time or over-time contractual obligations are achieved. In the event cost estimates indicate a loss on a contract, the total amount of such loss is recorded in the period in which the loss is first estimated.
Cost of Revenues
Cost of revenues consists primarily of direct material and labor costs, manufacturing overhead, freight expense, depreciation and amortization and other personnel-related expenses, which include salaries, bonuses, benefits and stock-based compensation expense, directly associated with generating revenues. We expect our cost of revenues to increase in absolute dollars in future periods as we sell more launch services and space systems. As we grow into our current capacity and execute on cost-reduction initiatives, we expect our cost of revenues as a percentage of revenue to decrease over time.
Because direct labor costs and manufacturing overhead comprise a significant portion of cost of revenues, increasing our production rate resulting in greater absorption of these costs is our most critical cost reduction initiative. Increasing our production rate is a cross-functional effort involving sales and business development, manufacturing, engineering, supply chain and finance.
Operating Expenses
Our operating expenses consist of research and development and selling, general and administrative expenses.
Research and Development, Net
Research and development expenses consist primarily of labor, prototype, professional services, materials, facilities and depreciation expense. We intend to continue to make significant investments in developing new products and enhancing existing products, including but not limited to our medium capacity Neutron launch vehicle and spacecraft features and capabilities, as well as expanding our portfolio of spacecraft components and subsystems. Research and development expenses will be variable relative to the number of products that are in development, validation or testing. However, we expect it to decline as a percentage of total revenue over time.
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Selling, General and Administrative
Selling, general and administrative expenses consist primarily of personnel-related expenses for our sales, marketing, supply chain, finance, legal, human resources and administrative personnel, as well as the costs of customer service, information technology, risk management and related insurance, travel, allocated overhead, other marketing, communications, administrative and transaction expenses. We also expect to further invest in our corporate infrastructure and incur additional expenses associated with operating as a public company, including increased legal and accounting costs, investor relations and compliance costs. As a result, we expect that selling, general and administrative expenses will increase in absolute dollars in future periods but decline as a percentage of total revenue over time.
Interest Expense
Interest expense consists primarily of interest expense on our loan agreements, amortization of debt issuance costs and finance lease interest.
Interest Income
Interest income consists primarily of interest income on our cash and cash equivalents, marketable securities and customer financing.
Gain (Loss) on Foreign Exchange
Gain (loss) on foreign exchange relates to currency fluctuations that generate foreign exchange gains or losses on invoices denominated in currencies other than the U.S. Dollar.
Other Income (Expense), Net
Other income (expense) consists primarily of changes in the fair value of contingent consideration, loss on extinguishment of debt, gain or loss on disposal of assets and accretion of marketable securities purchased at a discount.
Results of Operations
Comparison of the Three Months Ended March 31, 2026 and 2025
The following table sets forth our consolidated statements of operations and comprehensive loss information and data as a percentage of revenue for the three months ended March 31, 2026 and 2025 (in thousands, except percentages):
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| $ | % | $ | % | ||||||||||||||||||||
| Revenues | $ | 200,348 | 100.0 | % | $ | 122,569 | 100.0 | % | |||||||||||||||
| Cost of revenues | 123,855 | 61.8 | % | 87,322 | 71.2 | % | |||||||||||||||||
| Gross profit | 76,493 | 38.2 | % | 35,247 | 28.8 | % | |||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development, net | 80,513 | 40.2 | % | 55,109 | 45.0 | % | |||||||||||||||||
| Selling, general and administrative | 51,949 | 25.9 | % | 39,326 | 32.1 | % | |||||||||||||||||
| Total operating expenses | 132,462 | 66.1 | % | 94,435 | 77.1 | % | |||||||||||||||||
| Operating loss | (55,969) | (27.9) | % | (59,188) | (48.3) | % | |||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest expense | (1,274) | (0.6) | % | (6,795) | (5.5) | % | |||||||||||||||||
Interest income | 10,149 | 5.1 | % | 4,209 | 3.4 | % | |||||||||||||||||
| Gain (loss) on foreign exchange | 156 | 0.1 | % | (134) | (0.1) | % | |||||||||||||||||
| Other income, net | 124 | 0.1 | % | 479 | 0.4 | % | |||||||||||||||||
| Total other income (expense), net | 9,155 | 4.7 | % | (2,241) | (1.8 | %) | |||||||||||||||||
| Loss before income taxes | (46,814) | (23.2) | % | (61,429) | (50.1) | % | |||||||||||||||||
| Benefit for income taxes | 1,792 | 0.9 | % | 813 | 0.7 | % | |||||||||||||||||
| Net loss | $ | (45,022) | (22.3) | % | $ | (60,616) | (49.4) | % | |||||||||||||||
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Revenues
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Revenues | $ | 200,348 | $ | 122,569 | $ | 77,779 | 63 | % | |||||||||||||||
Revenue increased by $77.8 million, or 63%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. Space systems revenue was $136.7 million for the three months ended March 31, 2026, an increase of $49.7 million, or 57%, primarily due to spacecraft manufacturing growth and acquisitions. Launch services revenue was $63.7 million for the three months ended March 31, 2026, an increase of $28.1 million, or 79%, primarily due to a higher launch cadence with six Electron launch missions completed for the three months ended March 31, 2026, versus five launch missions completed in the three months ended March 31, 2025, higher revenue per launch, revenue recognized on over-time HASTE launch missions, and an increase in other launch revenue, which includes study revenue.
Cost of Revenues
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Cost of revenues | $ | 123,855 | $ | 87,322 | $ | 36,533 | 42 | % | |||||||||||||||
Cost of revenues increased by $36.5 million, or 42%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. Space systems cost of revenue was $88.4 million for the three months ended March 31, 2026, an increase of $29.5 million, or 50%, primarily due to spacecraft manufacturing growth and acquisitions. Launch services cost of revenues was $35.4 million for the three months ended March 31, 2026, an increase of $7.1 million, or 25%, primarily due to a higher launch cadence.
Research and Development, Net
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Research and development, net | $ | 80,513 | $ | 55,109 | $ | 25,404 | 46 | % | |||||||||||||||
Research and development expenses increased by $25.4 million, or 46%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to Neutron development progress, increased staff and staff-related expenses as a result of hiring and prototype spend focused on expanding our spacecraft and spacecraft components product portfolio.
Selling, General and Administrative
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Selling, general and administrative | $ | 51,949 | $ | 39,326 | $ | 12,623 | 32 | % | |||||||||||||||
Selling, general and administrative expenses increased by $12.6 million, or 32%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to cancellations of RSUs resulting in a one-time stock-based compensation expense of $11.2 million, increased staff and staff-related expenses to support revenue growth and increased transaction expenses related to managing an active acquisition pipeline.
Interest Expense
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Interest expense | $ | (1,274) | $ | (6,795) | $ | 5,521 | (81) | % | |||||||||||||||
Interest expense decreased by $5.5 million, or 81%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to conversions of the Convertible Senior Notes and the extinguishment of the Trinity Loan Agreement.
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Interest Income
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
Interest income | $ | 10,149 | $ | 4,209 | $ | 5,940 | 141 | % | |||||||||||||||
Interest income increased by $5.9 million, or 141%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to higher cash and cash equivalents balances held in interest bearing accounts.
Gain (Loss) on Foreign Exchange
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Gain (loss) on foreign exchange | $ | 156 | $ | (134) | $ | 290 | (216 | %) | |||||||||||||||
Gain on foreign exchange increased by $0.3 million, or 216%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to fluctuations on the foreign exchange rates of the New Zealand Dollar and Canadian Dollar as compared to the U.S. Dollar.
Other Income (Expense), Net
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Other income, net | $ | 124 | $ | 479 | $ | (355) | (74 | %) | |||||||||||||||
Other income decreased by $0.4 million, or 74%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to an increase in changes to fair value of contingent consideration for the three months ended March 31, 2026.
Benefit (Provision) for Income Taxes
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Benefit for income taxes | $ | 1,792 | $ | 813 | $ | 979 | 120 | % | |||||||||||||||
Benefit for income taxes increased by $1.0 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The effective tax rate was 3.8% for the three months ended March 31, 2026, compared to 1.3% for the three months ended March 31, 2025. The effective tax rate differs from the federal statutory rate due primarily to a full valuation allowance against U.S. deferred tax assets, as well as the impact of discrete items that may occur in any given year but which are not consistent from year-to-year.
Liquidity and Capital Resources
Since inception, we have funded our operations with proceeds from sales of our capital stock, convertible senior notes, term note debt, equipment financing, research and development grant proceeds, and cash flows from the sale of our products and services. As of March 31, 2026, we had $1.2 billion of cash and cash equivalents and $271.3 million of marketable securities. Our primary requirements for liquidity and capital are for investment in new products and technologies, the expansion of existing manufacturing facilities, working capital, debt service, acquisitions of complementary businesses, products or technologies and general corporate needs. Historically, these cash requirements have been met through the net proceeds we received through private sales of equity securities and convertible senior notes, borrowings under our credit and equipment financing facilities, net proceeds received in our business combination, net proceeds received from our ATM Equity Offerings and payments received from customers.
We believe that our existing cash and cash equivalents and marketable securities and payments from customers will be sufficient to meet our working capital and capital expenditure needs for at least the next twelve months, although we may choose to take advantage of opportunistic capital raising or refinancing transactions at any time primarily for the purposes noted above. We will continue to invest in increasing production and expanding our product offerings through acquisitions.
35
Material Cash Requirements
As of March 31, 2026, our total minimum lease payments was $152.3 million, of which $18.7 million is due in the following twelve months. For details regarding our indebtedness and lease obligations as of March 31, 2026, refer to Note 11 and Note 14, respectively, to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Our capital expenditures for the three months ended March 31, 2026 were $27.1 million. Our future capital requirements will depend on many factors, including our launch cadence, traction in the market with our space systems offerings, the expansion of sales and marketing activities, the timing and extent of spending to support product development efforts, the introduction of new and enhanced products, the continuing market adoption of our products, the timing and extent of additional capital expenditures to invest in existing and new office spaces and the number of acquisitions of complementary businesses, products or technologies we pursue, if any. We may be required to seek additional equity or debt financing or we may choose to take advantage of opportunistic capital raising or financing transactions primarily for the purposes noted above. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued product innovation, we may not be able to compete successfully, which would harm our business, operations and financial condition.
Additionally, we expect our capital and operating expenditures will increase significantly in connection with ongoing activities as we:
•increase our investment in marketing, advertising, sales and distribution infrastructure for our existing and future products and services;
•develop additional new products and enhancements to existing products;
•obtain, maintain and improve our operational, financial and management performance;
•hire additional personnel;
•obtain, maintain, expand and protect our intellectual property portfolio; and
•continue to operate as a public company.
Indebtedness
As of March 31, 2026, there was $37.6 million outstanding under our 4.250% Convertible Senior Notes due 2029 (the “Convertible Notes”), before unamortized discount and debt issuance costs of $0.7 million. For details regarding our outstanding loan agreements, refer to Note 11 of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
In connection with the pricing of the Convertible Notes, on February 1, 2024 and February 2, 2024, we entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain financial institutions. These transactions are designed to offset potential dilution from the Convertible Notes and provide a non-dilutive source of liquidity under certain conditions. The Capped Call Transactions have a strike price of $5.1255 per share with a cap price of $8.04 per share, covering approximately 69.3 million shares of common stock.
The Capped Call Transactions are scheduled to expire in tranches over a series of dates, beginning on December 1, 2028, and ending on January 30, 2029. If our stock price equals or exceeds the strike price on any given expiration date, we would be entitled to receive payments for the corresponding tranche without issuing additional shares, up to a maximum aggregate payment of approximately $201.9 million across all tranches on the settlement date. However, if the stock price is below the cap price (but is above the strike price) on any expiration date, the payment received for that tranche would be reduced, and the Company may receive less than the maximum potential payment.
If the Capped Call Transactions are unwound prior to the maturity dates, the settlement terms would depend on the prevailing market conditions, including our stock price at the time of the unwind, the time remaining until maturity on the date of the unwind, and the expiration schedule of the tranches.
36
Cash Flows
The following table summarizes our cash flows for the periods presented:
| Three Months Ended March 31, | |||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| Net cash provided by (used in): | |||||||||||
| Operating activities | $ | (50,332) | $ | (54,225) | |||||||
| Investing activities | (35,720) | (28,601) | |||||||||
| Financing activities | 463,293 | 115,503 | |||||||||
| Effect of exchange rate changes | 237 | 272 | |||||||||
| Net increase in cash, cash equivalents, and restricted cash | $ | 377,478 | $ | 32,949 | |||||||
Cash Flows from Operating Activities
For the three months ended March 31, 2026, net cash used in operating activities of $50.3 million consisted of $45.0 million in net loss, $46.5 million in non-cash activities and $51.8 million in cash used in operating assets and liabilities. Included in the non-cash activities are $28.1 million in stock-based compensation expense and $15.0 million in depreciation and amortization. Included in the cash used in operating assets and liabilities are $35.7 million in accounts receivable, $26.1 million in other non-current assets, $24.6 million in inventories, $13.4 million in contract assets and $8.2 million in trade payables, partially offset by cash provided by operating assets and liabilities of $45.8 million in contract liabilities, $10.8 million in accrued expenses and $4.1 million in prepaids and other current assets.
Cash Flows from Investing Activities
For the three months ended March 31, 2026, net cash used in investing activities of $35.7 million consisted of $27.1 million of capital equipment and infrastructure investments, $8.0 million of cash paid for business combinations and net purchases and maturities of marketable securities of $1.3 million.
Cash Flows from Financing Activities
For the three months ended March 31, 2026, net cash provided by financing activities of $463.3 million consisted of $445.6 million of net proceeds from the issuance of common stock under the ATM Equity Offerings and $12.5 million of net restricted stock units tax withholding.
Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting policies and estimates as disclosed in our audited financial statements included in our Form 10-K.
Off-Balance Sheet Arrangements
During the periods presented, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.
Guarantor Information
In connection with the Reorganization, on May 23, 2025, the Company, Rocket Lab USA and U.S. Bank Trust Company, National Association (the “Trustee”) entered a first supplemental indenture (the “Supplemental Indenture”) to the indenture, dated as of February 6, 2024, between Rocket Lab USA and the Trustee (the “Indenture”), governing the Convertible Notes in order to (i) provide for subsequent conversions of the Convertible Notes in the manner set forth in Section 5.09 of the Indenture, (ii) provide for subsequent adjustments to the Conversion Rate pursuant to Section 5.05(A) of the Indenture in a manner consistent with Section 5.09 of the Indenture, (iii) provide for the full and unconditional guarantee of the obligations of Rocket Lab USA under the Convertible Notes and the Indenture and (iv) make such other changes as are appropriate to preserve the economic interests of the holders and to give effect to the provisions of Section 5.09(A) of the Indenture.
As of March 31, 2026, there was $37.6 million aggregate principal amount of issued and outstanding convertible senior notes of Rocket Lab USA that are fully and unconditionally guaranteed by the Company. Accordingly, pursuant to Rule 3-10 of Regulation S-X, separate condensed consolidated financial statements of Rocket Lab USA have not been presented. As permitted under Rule 13-01(a)(4)(vi) of Regulation S-X, we have excluded summarized financial information for Rocket Lab USA because the assets, liabilities and results of operations of Rocket Lab USA are not materially different than the corresponding amounts in the Company’s condensed consolidated financial statements.
37
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-06-18 | Kampani Arjun | SVP & General Counsel | Sell | -88,000 | $107.98 | -$9,502,240 |
| 2026-06-02 | Slusky Alexander R indirect | Director | Sell | -40,000 | $123.60 | -$4,944,000 |
| 2026-05-28 | Slusky Alexander R indirect | Director | Sell | -60,000 ×2 | $149.40 | -$8,964,092 |
| 2026-05-28 | Kampani Arjun | SVP & General Counsel | Sell | -23,804 ×8 | $147.43 | -$3,509,511 |
| 2026-05-28 | Clevenger Marvin Bradford | President, Rocket Lab USA, Inc | Sell | -3,500 | $146.67 | -$513,356 |
| 2026-05-28 | Klein Frank | Chief Operations Officer | Sell | -36,860 ×8 | $147.42 | -$5,433,998 |
| 2026-05-26 | Spice Adam C. | Chief Financial Officer | Sell | -62,744 ×6 | $142.57 | -$8,945,631 |
| 2026-05-26 | Klein Frank | Chief Operations Officer | Sell | -44,390 ×6 | $142.57 | -$6,328,838 |
| 2026-05-26 | Clevenger Marvin Bradford | President, Rocket Lab USA, Inc | Sell | -15,549 ×6 | $142.57 | -$2,216,875 |
| 2026-05-27 | Kampani Arjun | SVP & General Counsel | Sell | -70,000 ×2 | $145.13 | -$10,158,783 |
| 2026-05-26 | Kampani Arjun | SVP & General Counsel | Sell | -28,668 ×6 | $142.57 | -$4,087,297 |
| 2026-05-12 | Slusky Alexander R indirect | Director | Sell | -100,000 ×4 | $118.08 | -$11,807,634 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-08-06 10-Q expected by 2026-08-07 (in 38 days)
- ~2026-11-09 10-Q expected by 2026-11-10 (in 133 days)
- ~2027-02-19 10-K expected by 2027-03-04 (in 235 days)
- ~2027-05-06 10-Q expected by 2027-05-07 (in 311 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-06-29 8-K Material Agreement Entered; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-06-05 8-K Officer/Director Change
- 2026-05-20 8-K Other Events; Financial Statements and Exhibits
- 2026-05-20 424B5 Prospectus Supplement
- 2026-05-08 8-K Other Events; Financial Statements and Exhibits
- 2026-05-08 424B7 424B7
- 2026-05-07 8-K Earnings Release; Financial Statements and Exhibits
- 2026-05-07 10-Q Quarterly Report
- 2026-04-14 8-K Unregistered Equity Sale; Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
- 2026-04-06 DEF 14A Proxy Statement
- 2026-03-30 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-03-17 8-K Other Events; Financial Statements and Exhibits
- 2026-03-12 8-K Shareholder Director Nominations; Other Events
- 2026-02-26 10-K Annual Report
- 2026-02-26 8-K Earnings Release; Financial Statements and Exhibits