Key Highlights

  • Rocket Lab (RKLB) reported record second-quarter Revenue of $234.07 million, up 62% year over year, with a record Backlog of $2.36 billion, up 137%.
  • Shares fell roughly 7% to 9% after the report, as the company said the window for an end-of-year first launch of its new Neutron rocket is narrowing.
  • Space Systems, the satellite Manufacturing segment, delivered $189.5 million of revenue against just $44.6 million from Launch Services, a shift in mix away from the company's original launch business.
  • Third-quarter guidance of $250 million to $265 million in revenue beat consensus, but gross Margin is guided lower as lower-margin satellite platform work scales.

A Record Quarter With an Awkward Shape

Rocket Lab's (NASDAQ:RKLB) second quarter produced $234.07 million of revenue, up 62% on the $144.5 million of a year earlier and 16.8% ahead of the previous quarter's own record. Analysts had estimated about $231.4 million. Gross Profit almost doubled to $84.6 million, GAAP gross margin of 36.1% beat the company's 33% to 35% guidance, and the adjusted EBITDA loss of $8.8 million was far smaller than the $20 million to $26 million guided. The net loss was $49.3 million, or $0.08 a share, a penny worse than consensus.

Underneath, the mix looked odd. Space Systems delivered $189.5 million, up from $105.1 million in the first quarter, on the back of satellite manufacturing. Launch Services contributed just $44.6 million, down roughly 30% sequentially, which chief financial officer Adam Spice attributed to revenue-recognition timing rather than lost business. Rocket Lab has flown 13 Electron and HASTE missions so far in 2026 with a clean record, and management said Electron pricing has more room to rise than fall. But for a company still thought of as a launch business, four-fifths of the Top Line now comes from building things rather than flying them.

Backlog is the number the company wanted the market to look at, and it is genuinely striking: $2.36 billion, up 137% year over year, with more than 90 launches on the books, the highest in Rocket Lab's history. Roughly 45.5% of that backlog is expected to convert into revenue within twelve months. The customer mix has tilted sharply toward government work, at 57% against 43% commercial, from 51/49 three months earlier.

Neutron Is the Number That Actually Moves the Stock

Which brings us to the reason the shares fell. Rocket Lab said production of Neutron's first-stage tank remains aligned with delivering the vehicle to Launch Complex 3 at Wallops Island in the fourth quarter. That is delivery to the pad, not launch. Ahead of a first flight sit integrated checkout, a wet dress rehearsal and a full static fire of all nine Archimedes engines, and the company conceded that the window for an end-of-year launch date is narrowing.

Founder and chief executive Sir Peter Beck framed the caution as deliberate. The goal, he said, is not just to get to the pad quickly for flight one, but really about how to get to flight ten in the shortest time possible, the logic being that the Archimedes engine is designed for at least 20 reuses, and qualifying it properly before the debut avoids grounding the vehicle for requalification afterward. More than 400 Archimedes hot fires have been completed.

That is a coherent engineering argument. It is also, for shareholders, the third time the first Neutron flight has drifted, and the financial consequences are explicit: management expects adjusted EBITDA profitability in the quarter following a successful Neutron test flight, and free Cash Flow to turn positive only 18 to 24 months after that on a standalone basis. Push the flight into 2027 and the whole profitability calendar moves with it.

Defense Work Is Arriving Faster Than the Rocket

The commercial momentum, meanwhile, is real and mostly wearing a uniform. In late July Rocket Lab won a $266 million award from Space Systems Command under a defense launch program, covering 12 suborbital missions with Options for up to six more, its largest launch contract ever. A week later came a $397 million U.S. Space Force contract to build and launch satellites for a missile-tracking program, plus more than $160 million across two contracts for three geostationary satellites. In and shortly after the quarter the company booked over $437 million of new launch work, and management said new bookings across the Business have since passed $1 billion.

A national missile-defense initiative sits behind much of this, though Rocket Lab's role is narrower than the enthusiasm suggests. In May it was named a supplier to a prime contractor, one of 12 companies sharing awards worth up to $3.2 billion, for prototype work on a satellite constellation carrying kinetic interceptors, with an initial capability demonstration due in 2028. Rocket Lab is not a prime contractor itself. The Pentagon has requested $17.5 billion for the program in fiscal 2027, and the payload expertise Rocket Lab acquired with a $275 million purchase in August 2025 is aimed squarely at that money.

The Iridium Bet, and a Balance Sheet Doing Heavy Lifting

June's announcement that Rocket Lab will buy Iridium Communications remains the biggest thing the company has ever attempted: $54 a share, an $8.0 billion enterprise value, split between $27 in cash and stock issued within a collar of $67.50 to $112.50. Two banks have committed a $3.6 billion bridge loan. Iridium brings 66 satellites, more than 2.5 million subscribers and $871.7 million of 2025 revenue at a 57% operational EBITDA margin, but not until mid-2027, which is when the deal is expected to close.

Cash stood at $2.13 billion at 30 June, or about $2.4 billion including marketable securities, swollen by a $1 billion at-the-market share programme completed in April. It is being spent. Operating Cash Flow was negative $84.1 million in the quarter and free cash flow negative $110.1 million, against a $77.4 million outflow in the first, and management expects consumption to stay elevated. Two smaller acquisitions closed during the period, and a German Subsidiary was set up to build constellations in Europe.

Priced for a Rocket That Has Not Flown

Third-quarter guidance of $250 million to $265 million of revenue sails past the $238.5 million consensus, but gross margin is guided down to 29% to 31% on a GAAP basis and the adjusted EBITDA loss widens to $17 million to $23 million as lower-margin satellite platform work scales. Growth, in other words, is currently buying dilution of margin.

The share reaction says the rest. Rocket Lab closed Monday at $80.04, slid roughly 7% in after-hours trading, and at one point in Tuesday's pre-market was down more than 9% before recovering much of the fall. Even after a near-50% retreat from May's $150.23 peak, the stock trades at roughly 53 times this year's sales against a consensus target near $111.

Conclusion

That multiple is not really a bet on backlog. It is a bet on Neutron working, and working repeatedly, on something close to the schedule Beck has described. The static fire at Wallops later this year is now the test that will settle it, and any further slippage would push the company's entire path to profitability further into 2027 and beyond.