Third-quarter 2026 earnings call, November 9, 2026
Rocket Lab used its third-quarter call to make a pricing argument more than a schedule argument. Management said it signed 8 Neutron missions worth roughly $515 million in the quarter, several at a new base price of $70 million per launch, and that it deliberately left volume on the table to hold that price. The first 16 Neutron launches are now booked, and the next available slots fall in the 2030s. The backdrop is less comfortable. First flight has moved into 2027 after voids were found in a propellant tank dome, and management declined to give a more specific date.
Neutron pricing power is the central new data point
CFO Adam Spice stressed that $70 million is not a target. "The Neutron pricing isn't going to 70, it's at 70," he said, adding that some of those contracts are already in backlog. He also said he does not think the company is "at the end of the pricing curve for Neutron."
Spice described how the company is rationing capacity. "We could have actually booked more launches in Q3 for Neutron than we did, but we actually chose to go for higher ASP and lower volumes," he said. Some customers wanted more launches at a slightly lower price, and Rocket Lab declined. CEO Peter Beck framed it as a strategy set years ago: "Rather than provide early discounted launches, we set out to deliver a rocket into an environment with extreme demand at full price or higher."
Beck said the company will keep reserving roughly half of long-term Neutron capacity for its own services, including replenishing Iridium's constellation, with the remainder going to outside customers. He cautioned that the mix will skew heavily to customers for some time as contracted launches burn down. Spice said management is still testing the market's price elasticity and wants to keep "dry powder" for further increases.
On backlog quality, Spice was pointed about the industry. He said some competitors have presented options as backlog, and that Rocket Lab's Neutron contracts resemble its Electron launch service agreements, with real deposits and cancellation fees. Beck added that customers inspect the factory and pad themselves, because "nobody buys the rocket off a brochure."
First flight slips to 2027, and Flight II carries a loss reserve
Beck said the Neutron first-launch timeline moved to 2027 after voids were found in the forward dome of the Stage 1 propellant tank. A replacement dome has been manufactured and has completed its cure cycle, and the mid assembly of the Stage 1 tank is already stacked. The forward and aft assemblies remain before hydrostatic testing at the Neutron factory, shipment to Launch Complex 3 and a cryogenic campaign. Stage 2 has been delivered to the pad and is heading into cryogenic proof tests. The thrust module is also at the pad for early interface testing without engines.
Asked which quarter of 2027 the company is targeting, Beck declined to say. "If I provide a date, clearly, I've been wrong," he said, and he would rather give frequent updates on the tank. The company also did not revise its previously stated cadence to the tenth Neutron launch, though Beck said the pressure to increase it is "overwhelming" and that engine production, composite structures and acceptance testing have been accelerated in parallel during the delay.
On the financial side, Spice disclosed that Rocket Lab booked a forward loss reserve against Neutron Flight II, reflecting the nascent state of the vehicle and the likely effect on that flight's profitability, or lack of it. Production-related headcount rose 40% sequentially to 1,728. Management expects Neutron spending to stay elevated through first launch, with a gradual shift from R&D toward Flight II and subsequent production inventory.
Cash flow breakeven is later than the EBITDA inflection
Spice clarified the profitability path. Adjusted EBITDA should turn positive within about 6 months of a successful first flight. Cash flow positivity will come later, because it depends on how aggressively Rocket Lab builds out the Neutron fleet. He noted that the largest number of vehicles is built at the start of the program, before reuse begins to lift margins. He also said that accelerating the cadence "might be some things in there that are capital intensive."
Asked about long-term economics, Spice reiterated conviction in a gross margin above 50% on a non-GAAP basis. He argued that bill-of-materials reductions of 6% to 10% a year matter less than fixed-cost absorption as cadence moves from 3 to 5 to 10 launches a year. Beck agreed, saying facilities, headcount and overhead, not materials, drive most of a launch vehicle's cost.
Separately, Rocket Lab disclosed a $150 million loan commitment from the Office of Strategic Capital, announced shortly before the call, at SOFR plus 100 basis points. Spice called it non-dilutive financing on attractive terms and a sign that the administration is putting funding behind launch capacity.
Electron and HASTE: demand and price both rising
Electron is about a week from its 100th launch. Beck said the company has a 96% reliability rate across 99 launches and is producing a vehicle every 8 work days. Spice said Electron and HASTE pricing will rise, and that this is already showing up in backlog. He sees a new leg of demand as customers realize the rideshare alternatives are going away. "The next best alternative is electron," he said, adding that Rocket Lab may be seeing only "the very early canaries in the coal mine."
Spice said there is no reason to think 20% launch growth is at risk in 2027, and that growth could exceed this year's. HASTE could represent about 25% of total small dedicated launches next year. He warned that customer payload readiness, not rocket availability, has historically been the main source of cadence slips. Beck said HASTE faces little reconciliation risk because the programs are bipartisan and long-standing. The two Alaska pads remain on track for 2027 launches.
Quarter and guidance
Third-quarter revenue was a record $267.8 million, up 73% year over year and 14.4% sequentially, above the $250 million to $265 million guidance range. Space Systems contributed $214.8 million and Launch $53.1 million, with Space Systems now approaching 80% of revenue. GAAP gross margin was 33.6% and non-GAAP gross margin was 38.4%, both above guidance despite the first full quarter of Mynaric dilution and the absence of tariff refunds that helped the second quarter. Adjusted EBITDA was a loss of $18 million, and GAAP EPS was a loss of $0.12.
Backlog rose 52% sequentially to about $3.6 billion, split 52% launch and 48% Space Systems. Roughly 32.9% of it, or about $1.2 billion, is expected to convert within 12 months. Spice noted that the quarter did not include a large Space Systems platform award, and that such awards are lumpy but bring longer-term derisking.
For the fourth quarter, Rocket Lab guided revenue to $270 million to $290 million, or 4.5% sequential growth at the midpoint. Launch is expected to grow strongly while solar and satellite platforms decline after a strong third quarter. It guided non-GAAP gross margin to 39% to 41%, non-GAAP operating expenses to $136 million to $142 million and an adjusted EBITDA loss of $14 million to $20 million. Free cash flow was negative $23.9 million in the third quarter, helped by milestone payments, and management expects it to remain negative at elevated levels.
Iridium is fully funded, with regulatory approval the remaining gate
Rocket Lab completed its at-the-market program in September, raising about $2.4 billion gross through 36.8 million shares. Together with Iridium's amended term loan, that fully funds the cash consideration, and the company terminated its $3.6 billion bridge commitment. Iridium shareholders have approved the deal, and the company ended the quarter with about $4.7 billion in liquidity. Regulatory approvals remain, and Beck said the process is advancing well.
The deal brings recurring revenue and cash flow that Spice said will change the company's cash profile once it closes. Beck said Iridium's direct-to-device and PNT initiatives could move faster under Rocket Lab. Asked about spectrum, he said L-band is sufficient for now and that there are no imminent acquisitions of additional spectrum.
Orbital data centers: still skeptical, still hedged
Beck reiterated that he sees orbital data centers as an economics problem rather than an engineering one. "There needs to be some major technological advances to unlock the economics," he said. Small-scale orbital compute for secure communications or defense is "completely doable," but moving data centers broadly off Earth involves unsolved challenges. Rocket Lab has developed a silicon solar cell for the application and has a data center customer for Neutron, but Beck described the effort as keeping options open rather than conviction.
On AST SpaceMobile's announcement that it will build its own rocket, Beck said, "I was hoping someone wasn't going to ask that question." He said launch capacity is so constrained that Rocket Lab is "rooting for everybody," since even Neutron will not satisfy demand. He called the move consistent with his thesis that large space companies will want to launch their own hardware. He also said he does not plan a rocket larger than Neutron, which was sized at 13 tonnes in part to enable human spaceflight, though he conceded, "Never say never."