Rocket Lab eyes big defense opportunities with new acquisition

Rocket Lab is signaling to investors, yet again, that it’s more than “just” a rocket company.

Rocket Lab’s second-quarter results, which were posted Thursday, show revenues continue to be driven by its space systems business rather than launch. The results also highlighted the company’s acquisition strategy and how its purchase of a new optical payloads company will make it more competitive for lucrative government contracts.

The company’s space systems brought in $97.9 million of the $144.5 million in total revenues for the second quarter. Rocket Labs’ total revenue, its highest quarterly revenue in the company’s history, jumped 36% from a year ago. The company’s net loss widened to $66.4 million.

Rocket Lab founder and CEO Peter Beck highlighted the “busy quarter of M&A activity” as the company is gets close to closing its deal to buy Geost, a company that builds optical payloads. Through that acquisition, which will close at $275 million in cash and equity, Rocket Lab is opening a new business unit called Optical Systems to scale electro-optical and infrared sensor manufacturing.

Those sensors are used in missile warning, tracking, and space domain awareness. The acquisition is also one part of a larger play from Rocket Lab – spelled out quite explicitly in the company’s earnings presentation – to bid for multi-billion-dollar DOD initiatives like Golden Dome.

Rocket Lab has already won some major defense contracts, including a $515 million, 18-satellite build contract to support the Space Development Agency’s constellation of missile tracking satellites. The company has moved into production on those satellites, following confirmation that they meet the DOD’s mission requirements, Rocket Lab said.

Down on Earth, Rocket Lab says its progressing well toward the first launch of its larger Neutron rocket. The rocket’s launch complex in Virginia is expected to be complete in the third quarter of this year, with hardware en route and the new rocket engine, called Archimedes, undergoing multiple tests per day.

The company is staying vague about the exact launch date, saying only in the presentation that it is pushing an “all-out effort to get Neutron to the launch pad before the end of 2025.”

Rocket Lab ended the quarter with $564 million in cash and cash equivalents and estimates revenues will hit between $145 to $155 million next quarter.