Rocket Lab Corporation

Thank you for standing by. My name is Adam and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Rocket Lab Q2 2023 earnings 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 the star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. Thank you. I'd now like to turn the call over to Colin Canfield, Investor Relations Manager. Please go ahead.

Thank you, Adam. Hello, everyone. We're glad to have you join us today for today's conference call to discuss Rocket Lab second 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 guaranteed 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 may also contain non-GAAP financial measures with the meaning of Regulation G enacted by the SEC. Included in such release and our supplemented materials are reconciliations of these historical non-GAAP financial measures to the comparable financial measures calculated in accordance with GAAP. This call is also being webcast, although due to technical difficulties with our conference call provider, we will post a copy of the presentation on our website at a later time. Our presenters today our 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 very much, Colin, and welcome, everybody, and thank you for joining us. Today's presentation will go over our key business accomplishments for the second 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 second quarter before covering the financial outlook for Q3 2023. After that, we'll take questions and finish today's call with the nearer-term conferences we'll be attending. All right, on to what we achieved in the second quarter for the year. Starting with our launch business, in May, we successfully launched both NASA Tropics missions, and in June, we launched our inaugural hypersonics mission from NASA Wallops. NASA selected us to launch Tropics in November late last year after the initial launch provider was unable to meet the mission and schedule requirements. Within six months of contract award, we had successfully launched both missions, enabling these critical storm monitoring satellites to get onto orbit in time for the hurricane season. We're incredibly proud to deliver mission success for NASA once again and further demonstrate the reliability and proven capability that Electron delivers to our civil and defense customers. We also followed up the two tropics missions with a successful HAST mission. HAST is a hypersonic suborbital testbed variant electron, and it fills a very real and urgent need for our government customers. The acceleration of hypersonic system technology development is a significant national priority, but testing opportunities remain limited, particularly in real flight scenarios beyond wind tunnels. With the HAST launch completed in June from LC2 in Wallops, Virginia, we unlocked a new critical national capability, enabling rapid and cost-effective hypersonic testing. We're incredibly excited about what that brings for our customers, as well as additional total addressable market that looks to grow rapidly ahead of strategic and civil needs. All this while leveraging our existing Electron architecture and continued R&D investment in our kick-stage capabilities. Expanded propulsion manufacturing capability. So we're also excited about our acquisition of Virgin Orbit's 144,000 square foot Long Beach facility lease and production equipment, which we're already hard at work configuring for our Archimedes and Rutherford production. Overall, we estimate that the $16.1 million price paid for this would have represented around $100 million of value versus having to purchase new. while approximately 80 million derived from acquired machinery and equipment and the remaining 20 million from the tenant leasehold improvements. We believe this asset purchase enables significant savings for Neutron and supports future scaling as we work towards first launch. Neutron testing. Speaking of Neutron, we want to highlight some of the major development testing and construction milestones we've reached for Neutron and its infrastructure. You may have noticed we recently released some updated renders for Neutron, which created some online buzz around design changes. These include adapted landing legs for optimized for barge landings to increase launch availability, as well as the adaption of Neutron's Hungry Hippo fairing from four sections to two, allowing for simpler mechanisms. These design changes were actually made some months ago as part of our iterative testing analysis program. and some direct customer feedback, but the artwork really just hadn't kept up with pace with the real vehicle. So we've recently updated these for everybody to see. We've hit some significant milestones in neutron production and testing in this quarter, including completion of the second stage qualification tank and test stand in preparation for the cryogenic test campaign in the third quarter. This work is progressing at pace. thanks to our extensive experience with carbon composites throughout the Electron program, so we have a strong head start on structures. In parallel, Earthworks at Launch Complex 3 in Wallops, Virginia, have commenced, enabling pad construction to commence in Q3. Once complete, Neutron should enjoy all the benefits that come with launching from a pad that benefits from a clear line of sight to future launches, has significantly less congestion relative to the Cape, and close proximity to key government customers. The propulsion team is also on schedule to deliver the first full-scale print of Archimedes' thrust chamber, and we're running a successful campaign of pre-burner tests at Purdue University. These milestones keep us on track for delivering the first complete qualification engine by the end of this year. In parallel, we're building avionics hardware and successfully testing it in hardware-in-the-loop simulations. All of these achievements puts us in a good position to meet some key milestones by the second half of this year, including completion of the second stage qualification test campaign. We're also targeting the completion of the first stage qualification tank and test stand, as well as the first Archimedes development engine and test campaign at our propulsion complex within NASA Stennis. We're still working towards getting something on the pad by 2024, and we'll continue to provide updates as we progress through the year and the next. Our space systems team also recently delivered a really significant milestone in the second quarter in the form of successfully operating the latest rocket lab design and built spacecraft on orbit. This is one of our newest spacecraft platforms, a high payload volume spacecraft designed for short to mid-duration missions in low Earth orbit. This was the first of four spacecraft that we're on contract to build and operate for VataSpace. to enable in-space manufacturing, a highly bespoke and complex spacecraft designed for reentry, which is a rare capability and something we're really proud to bring to market. The spacecraft hosts a mini pharmaceutical lab that successfully grew crystals commonly used in drug treatments for HIV. With the in-space manufacturing now complete, the capsule is anticipated to return to Earth in the coming weeks. Meanwhile, the next two spacecraft of VADA are in advanced production and test ready for the follow-up mission soon. All of these spacecraft feature components and software from across our space system businesses, including solar panels, star trackers, radios, enabling us to produce them affordably at pace. It's also a demonstration of our business model as an end-to-end space company to both build and operate satellites on orbit. And finally, development is progressing well for our twin spacecraft mission to Mars for NASA. The ESCAPADE mission, we're developing two bespoke spacecraft to study Mars' magnetosphere next year, and this quarter we completed the qualification spacecraft ahead of an extensive test and qualification campaign. We now want to take the time to highlight some of our accomplishments so far in Q3. Successful launch for NASA, Telesat, and Spire. We've started the quarter strong with successful rideshare mission from Launch Complex 1, deploying satellites for NASA, Spire, and Telesat. We're on the brink now of our 40th electron launch and on track to complete three more this quarter and 15 overall this year. Now, regarding our Capella launch, we love the nightlife. We continue to take an abundance of caution as we continue our track record of the most reliable small rocket. At present, the team is working through some unusual data from one of the engine sensors for that mission. But of course, these things happen with launch vehicles from time to time. We have a very straightforward path to resolution, and we'll reschedule the launch later this month. So no big deal there. One of those missions, of course, was a recovery mission. This launch was an important one as we used it to prove out a new waterproofing technologies and a new marine retrieval system for extracting electrons from the ocean. I'm pleased to report that the new system works exceptionally well and electrons splashed down in the best condition we've seen it yet. We continue to operationalize electron reusability with the first reflight of a recovered engine scheduled for the second half of this year. from where we'll schedule the first reflight of a full-stage booster. Signed 10 new Electron launches. So Electron continues to be the preferred dedicated small launch option, demonstrated by continued and growing demand for launches. Since we reported earnings in May, we've signed deals for a total of 10 new dedicated launches, including block buys from returned government and commercial customers. This really is a testament to Electron's reliability, frequent launch cadence, and in particular, the high degree of control over orbit that we can give to constellation operators, which is something they just cannot get on a large rideshare mission. And with that, I'd like to turn the call over to our Chief Financial Officer, Adam Spice. Adam.