Rocket Lab Corp Earnings - Q4 2025 Analysis & Highlights
Rocket Lab reported record financial results for Q4 2025 and full-year 2025, driven by strong execution across launch and space systems programs, significant government contract awards, and strategic acquisitions to enhance vertical integration. The company faces near-term challenges with Neutron development delays but maintains a robust backlog and positive long-term growth trajectory.
Key Financial Results
Full-year 2025 revenue reached $602 million, representing 38% year-over-year growth compared to 2024.
Q4 2025 revenue was a record $180 million, up 36% from Q4 2024, coming in at the high-end of prior guidance.
Q4 revenue increased 16% sequentially from Q3 2025.
Record backlog of $1.85 billion at the end of Q4, up 73% from the same period in 2024.
Q4 GAAP gross margin was 38%, at the center of prior guidance range of 37% to 39%, and increased 100 basis points quarter-over-quarter.
Q4 non-GAAP gross margin was 44.3%, in line with prior guidance range of 43% to 45%, and increased 240 basis points quarter-over-quarter.
Full-year 2025 GAAP gross margin was 34.4%, an increase of 780 basis points year-over-year.
Full-year 2025 non-GAAP gross margin was 39.7%, an increase of 770 basis points year-over-year.
Q4 GAAP EPS was a loss of $0.09 per share, compared to a loss of $0.03 per share in Q3 2025.
Revenue has grown nearly 10x since Nasdaq listing in 2021, achieving a compound annual growth rate exceeding 76%.
Gross margins have more than doubled the contribution from each dollar of revenue since listing.
Business Segment Results
Space systems segment delivered $103.8 million in revenue in Q4, reflecting a sequential decrease of 9.1%, primarily due to programmatic non-linearity in satellite platforms and solar businesses.
Launch services generated $75.9 million in revenue in Q4, representing an 85% quarter-over-quarter increase due to increase from four to seven launches during the period, including one HASTE mission.
Launch backlog accounts for approximately 26% of total backlog, while space systems represents approximately 74%.
Approximately 37% of current backlog is expected to convert into revenue within the next 12 months, including preliminary Tranche 3 revenue recognition estimates believed to be conservative.
Rocket Lab launched 21 missions across Electron and HASTE in 2025, a new company record.
Seven missions were launched in Q4, the highest number of launches in a single quarter to date.
More than 30 new launches were added to the manifest across Electron and HASTE in 2025 from a diversified customer base.
Three successful HASTE missions were conducted in 2025, with the next one on the pad in Virginia days away from launch.
Capital Allocation
Q4 2025 purchases of property, equipment and capitalized software licenses were $49.7 million, an increase of $3.8 million from Q3 2025.
Capital expenditures reflect ongoing investments in Neutron development, testing and integration at LC-3 in Wallops Virginia and Middle River Maryland, expanding capabilities at Engine Development Complex in Long Beach California, and build-out of recovery barge in Louisiana.
Capital expenditures are expected to remain elevated as the company progresses towards Neutron's first flight, with investments in testing, production scaling, and infrastructure expansion.
Q4 2025 GAAP operating cash flow was a use of $64.5 million, compared to $23.5 million in Q3 2025, with the sequential increase almost entirely due to timing of employee equity program related tax payments.
Non-GAAP free cash flow in Q4 2025 was a use of $114.2 million, compared to a use of $69.4 million in Q3 2025.
Cash consumption will remain elevated due to Neutron development, longer lead procurement for SDA, investments in subsequent Neutron tail production, and infrastructure expansion.
Ending cash, cash equivalents, restricted cash, and marketable securities was approximately $1.1 billion at the end of Q4 2025.
Proceeds from sales of common stock under aftermarket equity offering program generated $280.6 million during Q4 2025.
Funds from equity offerings are intended to support acquisitions including the announced pending Mynaric acquisition, recently consummated acquisitions of Optical Support Inc. and Precision Components Limited, and other M&A targets, along with general corporate expenditures and working capital.
Rocket Lab acquired Geost in 2025, marking entrance into payloads business.
Optical Support Inc. was acquired in Q1 2026 to strengthen optical systems offering.
Precision Components Limited acquisition closed in Q4 2025 to expand machining and manufacturing footprint and support scaling of components manufacturer for launch and space systems.
Mynaric acquisition remains pending German government regulatory review with no material update at this time.
Industry Trends and Dynamics
The satellite industry is rapidly expanding and projected to grow seven times by 2035.
Rocket Lab is the world leader in solar space power.
No successful orbital launches of a new U.S. or European small launch vehicle occurred in 2025.
The U.S. government has made clear that faster and more frequent hypersonic testing is an urgent need and a national priority.
Rocket Lab is the only credible provider that has demonstrated the ability to deliver hypersonic testing capability right now, not years into the future.
Space-based data centers represent an ambitious opportunity on the horizon as AI and compute demand soar and terrestrial data centers reach their limits.
Traditional solar cells have suffered from low radiation tolerance and poor performance in space, creating market opportunity for improved solutions.
European space nations have very little capability with giant aspirations and short time frames, creating opportunity for Rocket Lab to provide solutions at component, system, and launch levels.
Competitive Landscape
Rocket Lab remains the small launch leader globally as the only rocket delivering reliable and high cadence launch opportunities for smallsat.
When smallsat operators need a dedicated ride to orbit, they come to Rocket Lab.
Rocket Lab is the only commercial provider producing both spacecraft and payloads in-house for SDA Tracking Layer Tranche 3, supporting government goals for speed, resilience and affordability in space-based missile defense.
Rocket Lab is repeatedly winning large awards that have historically been exclusive to legacy aerospace primes, with the company unseating the old guard in space.
Rocket Lab has more hardware on and orbiting Mars than just about any other company today.
Rocket Lab is the strongest contender to deliver NASA's Mars Telecommunications Orbiter program based on proven spacecraft, deep space mission experience, reliable rockets, and end-to-end space systems capability.
Rocket Lab's hardware and software has enabled some of the most ambitious and successful Mars missions in history, including Mars InSight Lander, Perseverance rover, and Ingenuity helicopter.
Mynaric stands out as the absolute best optical terminal supplier with respect to technology among only three providers in the landscape.
Macroeconomic Environment
The U.S. government has made no secret of the fact that faster and more frequent hypersonic testing is an urgent need and a national priority.
There are literally billions and billions of dollars of well-funded government programs underway right now in Europe with time lines conducive to creating sovereign capability.
European nations are pragmatic and realistic that the capability they are looking to create takes a long time, making partnerships with companies like Rocket Lab a practical approach.
Growth Opportunities and Strategies
Space Development Agency awarded Rocket Lab an $816 million contract to build an advanced constellation of 18 spacecraft equipped with advanced missile warning, tracking and defense sensors.
This is the largest single contract in Rocket Lab's history.
As a leading merchant supplier into other Tranche 3 prime contractors, there are additional subsystem opportunities that could add total capture value to approximately $1 billion for supplying payloads, solar power reaction wheels, star trackers, software and other solutions.
Rocket Lab now has more than $1.3 billion in contracts signed with the SDA combining the Tracking Layer Tranche 3 program and previous Transport Layer Beta Tranche 2 program.
ESCAPADE mission successfully delivered twin satellites to NASA and UC Berkeley, proving it is possible to deliver decadal-class missions on drastically shortened time lines and for significantly smaller budgets than typical interplanetary missions.
Rocket Lab introduced space-optimized silicon solar arrays that deliver low cost per watt at industrial scale, enabling gigawatt-class power generation in space at kilometer-size scale.
Rocket Lab developed a hybrid solar array solution incorporating both high-efficiency cells and silicon cells, leveraging benefits of both technology.
Vertical integration of high-performance RF and optical payload technologies unlocks high-value opportunities for national security and commercial customers and is key to unlocking programs like Golden Dome.
Owning the payload chain enables discriminating performance plus greater control over schedule, cost, and especially for high-volume constellations.
Rocket Lab was selected by the MDA for SHIELD program, which has a contract value up to $151 billion, giving opportunity to compete for future launch and space systems contracts.
LOXSAT spacecraft, which is Rocket Lab's launch plus spacecraft mission to build and deploy an on-orbit cryogenic fuel depot for NASA, is now complete and will march towards launch later in 2026.
Rocket Lab is exploring space-based data center opportunities, with early discussions underway with potential customers interested in this application.
The company is developing solutions for space data centers including silicon arrays and power solutions, focusing on mega constellations and high-volume power applications.
Rocket Lab has been developing silicon solutions for space data centers that competitors do not have.
Until Neutron is online with multi-ton reusable launch capability, the company will not lean into deploying infrastructure for its own satellite constellation, but internal discussions about this opportunity occur daily.
Neutron Development Program
Neutron's Stage 1 tank ruptured during a hydrostatic pressure test at Space Systems Complex in Middle River in January 2026.
The tank met its anticipated flight loads, but failed when pressures and loads were pushed beyond this to understand margins in the structure.
Post-test review identified that a manufacturing defect introduced a reduction in strength at a critical joint in the structure, specifically around the tank closeout, an autoclave-produced part.
The first tank was hand-laid by a third-party contractor while the automated fiber placement machine was being commissioned.
The decision to work with a third-party contractor was driven by schedule to produce the first tank rapidly while simultaneously commissioning the AFP machine for future tank production.
The next tank is already in production on the AFP machine, completely eliminating the possibility of the hand defect reoccurring.
Neutron's second stage was produced entirely internally and passed qualification comfortably.
Minor design changes are being made to the first stage tank to introduce more margin and improve manufacturability.
Once completed, the new tank will undergo an extensive test and qualification campaign to verify flight readiness.
Neutron's first launch is now targeted for Q4 2026.
Neutron is still scheduled to come to market in an incredibly aggressive timeframe with a robust and thoroughly tested vehicle.
Hungry Hippo fairing successfully passed qualification in Q4 and made its way to Wallops in Q1.
Neutron's thrust structure, which must withstand 2.1 million pounds of thrust, is now officially onto final integration.
Neutron's interstage is undergoing its own qualification campaign before being shipped to LC-3.
Neutron's second stage is in final integration and getting ready for its debut on the test standard LC-3.
Archimedes engines are undergoing rigorous testing, with the company pushing them through edge cases, backing off inlet pressure, inducing cavitation, and generally doing nasty things to understand performance in a wide range of scenarios.
Rocket Lab is flying more than 800 Rutherford engines successfully to space, demonstrating the reliability approach being applied to Archimedes.
Major structures and subsystems are passing qualification, and for the first time, hardware is in final integration.
LC-3 has been stood up, production and test facilities are operational, and regulatory work is tracking as expected.
Financial Guidance and Outlook
Q1 2026 revenue is expected to range between $185 million and $200 million, representing 7% quarter-on-quarter revenue growth at the midpoint and growth of 57% from the year-ago quarter.
Q1 2026 GAAP gross margin is expected to range between 34% to 36%, with a modest sequential decline driven by greater mix of space systems versus higher margin launch and weaker margin mix within space systems segment.
Q1 2026 non-GAAP gross margin is expected to range between 39% to 41%.
Q1 2026 GAAP operating expenses are expected to range between $120 million and $126 million.
Q1 2026 non-GAAP operating expenses are expected to range between $106 million and $112 million.
Quarter-over-quarter increases in operating expenses are primarily driven by ongoing Neutron development spending related to Flight 1, including staff costs, prototyping, and materials.
A shift in spending from R&D into Flight 2 inventory is expected throughout 2026, an encouraging sign of progress as the company moves closer to Neutron's first flight and adjusted EBITDA positivity.
Q1 2026 is expected to mark peak Neutron R&D spending.
Q1 2026 GAAP and non-GAAP net interest income is expected to be $8 million, a function of higher cash balances and conversion of approximately $117 million of convertible notes since December 31.
Q1 2026 adjusted EBITDA loss is expected to range between $21 million and $27 million.
Basic weighted average common shares outstanding for Q1 2026 are expected to be approximately 605 million shares, including convertible preferred shares of approximately $46 million.
Approximately 23 million shares have been converted from outstanding convertible notes thus far in Q1 2026.
Only 7.5 million shares or 11% of the original $355 million convertible notes issuance remain outstanding.
The company has substantially eliminated indebtedness from the business with the retirement of the Trinity equipment line in Q4.
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