Rocket Lab Corporation

Hello and thank you for standing by. My name is Jessica and I will be your conference operator today. At this time, I would like to welcome everyone to the Rocket Lab first quarter 2003 financial results update and conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. I would now like to turn the conference over to Colin Canfield, Investor Relations Manager. Please go ahead, sir.

Hey, thank you. Hello, everyone. We're glad to have you join us today for today's conference call to discuss Rocket Lab's first quarter 2023 financial results. Before we begin the call, I'd like to remind you that our remarks may contain forward-looking statements that relate to the future performance of the company. And these statements are intended to qualify for the safe harbor protection from liability established by the Private Securities Litigation Reform Act. Any such statements are not guarantees of future performance, and factors that could influence our results are highlighted in today's press release, and others are contained in our filings with the Security and Exchange Commission. Such statements are based upon information available to the company as of the date hereof, and are subject to change for future developments. Except as required by law, the company does not undertake any obligation to update these statements. Our remarks and press release today also contain non-GAAP financial measures within the meaning of Regulation G enacted by the SEC. Included in such release are supplemental materials or reconciliations of these historical non-GAAP financial measures to comparable financial measures calculated in accordance with GAAP. This call is also being webcast with a supporting presentation and a replay and copy of the presentation will be available on our website. Our presenters today are Rocket Lab founder and chief executive officer, Peter Beck, and chief financial officer, Adam Spice. After our prepared comments, we will take questions. And now let me turn the call over to Mr. Beck.

Thanks Colin and welcome everybody and thank you for joining us. Today's presentation will go over our key business accomplishments for the first quarter of 2023, as well as further achievements we've made since the end of the quarter. Adam will then take us through our financial results for the first quarter before covering the financial outlook for Q2 2023. After that, we'll take some questions and finish today's call with the near-term conferences we'll be attending. All right, on to what we achieved for the first quarter of the year. We started the year strong with three successful Electron launches, matching our expectations for the quarter. Each of these missions achieved an important company milestone. In January we launched our first mission from US soil. We quickly followed that up by a second US launch from NASA Wallops in March, and then just seven days later we had a successful launch from our LC1 launch site in New Zealand. Not only was this our fastest turnaround for launch to date, but by doing it from two different launch sites and countries really demonstrated the level of flexibility and responsiveness that we're delivering to customers now. Achieving this high launch cadence early in the year sets us up well to hit our 15 Electron missions for 2023 as planned. At a time when we're seeing many small launch companies fail to service the market, we're continuing to deliver successful missions for our customers. We're experiencing a correlated increase in launch bookings for Electron in 2023 and beyond from our new and returning customers across government and commercial sectors. Our progress with Neutron is strong as well. We started off the year with a payment from the US Space Force as part of a formal programme milestone we met. This was recognised revenue in the first quarter, which is great. Later in the presentation, I'll delve into some of the key launch vehicle and programme development updates for Neutron. Our space systems business also ticked some really big wins this quarter, with Rocket Lab satellite components, or software, featuring on 18 spacecraft across eight missions. We're seeing continued booking strength in our solar power division, and we also hit some major program milestones in two of the most significant satellite builds that I'll take you through as well. As mentioned, a strong first quarter for Electron launches. Two missions from Launch Complex 2 in Virginia and a third from Launch Complex 1 in New Zealand, including that rapid seven-day turnaround between the two launch sites. All of these missions were for commercial Constellation operators, all of whom have signed bulk dedicated launch contracts. Across more than 36 Electron launches, it has proven itself as a reliable workhorse for commercial and government providers alike. Commercial satellite operators need dependable rides to unique orbits, and Electron remains the only small launch vehicle delivering this consistently. In fact, even today, Electron is the only US small launch vehicle to successfully deliver satellites in orbit in all of 2023. One of the latest multi-launch deals was signed in February with Capella Space, The deal will see us fly four more dedicated Electron missions for Capella from Launch Complex 1. With Launch Complex now operational, we have the flexibility to move any of those missions to the US if we need to meet our customer or mission requirements. On to big rockets now. Development of Neutron continues at pace, with the team hitting some key development milestones in Q1. We're working steadily towards our first full-scale Neutron booster at our US facilities, while at the same time closing in on a full-scale neutron second stage, including all composite parts ahead of flight hardware tank test in Q2. These latest photos from the factory show the size of those tanks. In Q1, we also reached a US Space Force payment milestone for completing successful development phases of neutron. This payment is part of a $24 million contract awarded to us by the Space Force to develop neutrons up a stage to maximize mass to orbit capability, orbit insertion accuracy, and responsive dedicated launch. These are all capabilities that position Neutron well to launch the highest priority national defense and security missions awarded through Lane 1 of the National Security Space Launch Phase 3 Program, or NSSL Phase 3. Meanwhile, we're progressing well with Neutron's reusable engines, the Archimedes. Full-scale Archimedes engine components are coming off the 3D printers, including injectors, combustion chambers, This is a great progression in the Archimedes development and it proves out the advanced additive manufacturing techniques that we have planned for these engines. But as I've always said, a rocket is only one third of the puzzle when developing an orbital launch capability at scale. You also need advanced launch, test and manufacturing facilities and systems. So while the vehicle team advances Neutron's development, our ground systems and manufacturing teams have made significant progress developing test infrastructure progressing the construction of Launch Complex 3 for Neutron and commissioning several new large-scale 3D printing machines and vehicle assembly facilities to enable rapid production. Last but not least, we're well into flight software simulations now that the vehicle design is advanced and production is underway. Software has always been a key differentiator for Rocket Lab, whether it's Electron or a Photon spacecraft, We develop, test, and fly our own tailored software, enabling us to drive peak performance out of our vehicles. I'm pleased to report that we're flying successful orbital mission simulations to a range of orbits and mission profiles with our GNC, or Guidance Navigation Control, and flight codes to the current vehicle's design and configuration. We fly thousands of these flight simulations for every single Electron mission, and this has been a key factor in delivering reliable, successful missions for years. So it's important to be achieving this for Neutron this early. Onto our space systems now. This part of our business just keeps going from strength to strength. 2022 was the year that we cemented Rocket Lab's position as a leading spacecraft and spacecraft component manufacturer. And now we've truly moved into large-scale manufacturing and execution. There have been more milestones and achievements than we can probably, we won't have time to cover in this presentation, so I'll just hit some highlights. Eight launches in Q1 deployed more than 18 spacecraft featuring Rocket Lab software or hardware, including missions for commercial constellation customers like Black Sky, Capella and OneWeb. We have more than 25 spacecraft in development for various customers, including a NASA mission to Mars, a communications constellation for Global Star, in-space manufacturing satellites and an on-orbit fueling depot. To achieve this, we've scaled our space systems teams, expanded our manufacturing and development facilities, and of course vertically integrated all of our four space systems acquisitions into our photon spacecraft manufacturing programs. As part of that growth, we're seeing continued booking strength in our solar solutions division in particular, and several major production milestones hit for our up-and-coming missions. Production is now well underway for a twin spacecraft that we're building for the NASA Escapade mission to Mars. A 2024 launch date has now been set, allowing us to move forward with the assembly integration and testing at our satellite production facility in Long Beach. Now on to our key achievements since the end of Q1. Just two days ago, we successfully launched the first of two dedicated missions for NASA to deploy the Tropics Constellation. This is a really critical constellation that will monitor tropical storms with higher revisit times than typical weather satellites. providing forecasters with more accurate storm data and to provide advance warnings and ultimately to save lives. With this first mission now complete, we'll be following up with a second one in about 12 days, and that will complete the constellation in time for the North American hurricane season. Speaking of NASA, we've been awarded another mission by the agency. Electron will launch NASA's Starling mission, a multi-cubesat mission to test and demonstrate autonomous swarm technologies. We're set to deploy these four satellites to orbit within just three months of contract signing. They were previously manifested on a different launch vehicle, but due to long delays and continued uncertainty, they have been re-manifested on Electron for Q3 this year. We recently signed multiple dedicated and rideshare launch contracts on Electron, including many with new customers who were previously manifested on other small launch vehicles but have moved to Electron after facing lengthy delays and uncertainty with other providers. This migration is a testament to Electron's demonstrated position as the reliable, dependable ride to orbit for small SAS. Hypersonics. So hypersonic and suborbital test capabilities are key priorities for the nation. Despite how critical these capabilities are, the supply of sustainable and suitable vehicles and wind tunnels is severely constrained. and this has proven this is a problem that we can actually solve right now. This quarter we formally introduced HAST, the Hypersonic Accelerator Suborbital Test Electron. A suborbital test launch vehicle that is derived from the electron, HAST provides reliable, high-cadence flight test opportunities needed to advance hypersonic systems. This isn't the promise of a future capability. In fact, the first rocket is at LC2 Virginia, undergoing its final preparations for launch right now. HAST has been selected for a range of government programs, including the Navy Crane's Mark TB Project, DIU's HICAP Program, and Missile Defence Agency's Targets and Countermeasures Study. For more on HAST, I encourage you and refer you to the press release issued on April 17th, available on our website. This quarter, we also completed extensive final qualification and testing on the first Rutherford engine that will be flown into space for a second time. This is an engine that we launched last year as part of our reusability program and now we've brought it back to the factory, run it through a gauntlet of tests and have put it back into the production flow to join a rocket for launch in Q3 later this year. This is a big step forward in our reusability program and one of the few remaining milestones before moving into full stage reuse. Last week we shipped our first of four photon spacecraft for Varda Space Industries. an in-space manufacturing company planning to manufacture high-value products and pharmaceuticals in space. This is a big milestone for our space systems team and a great way to start a busy year of satellite production that will see us work on NASA and ETA space's LOCSAT, Photon, and also spacecraft bus to support fueling depots in space. Photon spacecraft mission for Mars also is in development and plus 17 spacecraft satellite buses for Global Star. And last but not least this quarter, we introduced a new star tracker designed specifically for constellations. The latest star tracker is a new version of our existing high-performance star tracker, but is evolved for mass manufacturing and can be used as a responsive small satellite solution. It joins a growing list of spacecraft components that we've recently developed and released, including reaction wheels, satellite radios, to make best-in-class, off-the-shelf space systems hardware available for commercially and also at scale. So with that, I'll hand over to Adam to present the financial highlights and outlook.