Rocket Lab (RKLB) will attempt to launch its first ‘Neutron’ rocket by the end of 2024. NASA, along with fourteen other companies, recently tapped Rocket Lab to help the space agency with payload integration services on suborbital rockets and high-altitude balloons. and orbital spacecraft and satellites.
Rocket Lab CEO Peter Beck joins Yahoo Finance to discuss the feasibility of the Neutron rocket launch timeline, as well as the profitable intersection of the space sector 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’re seeing companies that normally have nothing to do with space becoming quite dependent on it. And our view [is] that the big, successful space companies of the future won’t be just a launch company or just a satellite manufacturing company, because space travel, when you combine those two elements, is a gigantic technical compromise, if you will. So if you can put both launch and space systems together, you can provide services that are much better than if you do it in a more traditional sense. And we’ve seen more and more companies come to us and they don’t have any knowledge of the space industry and they don’t want to, they just want a service.”
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Editor’s note: This article was written by Nicholas Jacobino
Video transcription
AKIKO FUJITA: Shares of Rocket Lab have had a bit of a rough 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, for which it originally unveiled plans in 2021. Let’s bring in Peter Beck. He is the CEO of Rocket Lab.
And Peter, it’s good to talk to you today. There’s so much focus on this Neutron launch, which is of course the mid-range rocket that you want 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 also owned by our parent company Apollo, which is a little bit suggestive: they quote an internal conference memo saying that Rocket Lab has essentially overstated its business. ability to be able to achieve this launch by the end of this year, essentially setting a target date of December 15th so that you could qualify for these lucrative contracts coming from the Space Force. I would like to get your response to that. How much credence do we give to that and how credible is that launch target, December 15?
PETER BECK: Yes. Well, thank you very much. Look, I think we clearly have the attention of our competitors. And you know, I consider it a feather in our cap that people start throwing mud at you.
So look, we’re working super hard to try to get the vehicle to market by the end of the year. I think everyone knows that. But we’re also realistic that it’s a launch vehicle and it’s a launch vehicle program.
And if all goes well, we take it to the trail. And if we have any problems along the way, we won’t do that. But right now we have a schedule that says we can take it to the trail. So until that changes, we’re not waving the white flag.
AKIKO FUJITA: So let’s talk about some of those challenges to getting there. You highlighted this new engine that will be used in Neutron in the most recent earnings call. That is actually the next step: allowing the test to continue.
What does that timeline look like? You mentioned possibly the end of March. Is that schedule still on track?
PETER BECK: Yes. Yes. You know, engines are usually the long stick in the tent when developing new launch vehicles. We have done everything we can to take the stress out of the engine and the engine program. So we will hope that something will be on the test bench by the end of March.
And then the rubber hits the road as we’ll see how the engine performs. And we’re kind of in the honeymoon phase now where a lot of the hardware is all coming to fruition, you know. We have completed all of our avionics and hardware as well as much of the software and testing. So now is the time when all that hardware comes together and we can see what we really have.
AKIKO FUJITA: It has been quite incredible to see the increase in commercial activity within the space sector. Rocket Lab itself is trying to own some sort of full stack, from satellite to launch. You already have Electron humming a bit.
Neutron, this mid-range rocket, is next. Other offers are also in the works. What does the future of Rocket Lab look like?
PETER BECK: Yeah, no, it’s funny because everyone knows us for our Electron launch vehicle. You know, it’s the second most launched rocket, after SpaceX. In fact, the fourth most launched rocket in the world. So it’s no surprise that everyone knows us for our rocket programs.
But actually 2/3 of our revenue comes from our space systems department. And we have over 40 satellites and we’re building some for very important national security missions like the SDA, you know, and some for commercial constellations. Then we have a trader that supplies aerospace components that are far-reaching for the entire sector. You know, 37% of everything launched last year had a Rocket Lab logo on it somewhere.
So like I said, we’re known for our rockets, but we pride ourselves on being a one-stop space shop. So we do everything, from the initial design and delivery of components to the actual building of the satellites, all the way to the launch of the satellites. And yesterday we had an event for the Methane SAT, where we actually operate that satellite for customers. So really an end-to-end space company.
AKIKO FUJITA: Peter, you said you have the most launches after SpaceX. Last I saw, SpaceX is launching rockets once every three days or something like that. If you break down the annual number, what’s the goal for Rocket Lab or how long will it take to get to that kind of frequency?
PETER BECK: Yeah, so Electron will launch about 22 times this year. So that’s a clear step up from last year, which is about ten times bigger. So we have a rocket on the trail every few weeks.
AKIKO FUJITA: If you look at the collapse of the space industry, so far it has largely been about rockets and satellite communications. We recently saw the successful return of the Varda space capsule, which was of course designed by Rocket Lab. This is a capsule for those who haven’t followed yet and it allows for space production.
This is also often the case in the pharmaceutical sector. And I wonder, as you think about the future of this industry, is it going to get to a point where it’s not just about being a rocket company, some kind of aerospace company? That, in other words, in the areas of pharmaceuticals, healthcare and wellness, everyone is going to have to participate in it in some way, because it’s going to be at that intersection.
PETER BECK: Yes absolutely. And look, we see that companies that usually have nothing to do with space become quite dependent on it. And our vision that the big, successful space companies of the future will not be just a launch company or just a satellite manufacturing company. Because the sheer power of when you combine these two elements, I mean space is a gigantic technical compromise, if you will.
So if you can put both launch and space systems together, you can provide services that are much better than if you do it in a more traditional sense. And we see more and more companies coming to us who have no knowledge of the space industry, and they don’t want to. But they just want to serve us and I think it all comes down to that. So the reason why we’re pushing so hard on Neutron is that 50% of it is because we absolutely think there needs to be a little more competition in the market in mid-range launches. And secondly, we want to provide services and having your own ride to the space or having the keys to the space is critical to that.
AKIKO FUJITA: Peter Beck, CEO of Rocket Lab, always good to talk to you. I really appreciate you joining us today.
PETER BECK: Don’t mention it. Thank you.