Rocket Lab Corp: Form 10-Q for the period ended Jun 30, 2025

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. You should read this discussion and analysis in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. For additional context with which to understand our financial condition and results of operations, see the audited consolidated financial statements and accompanying notes contained therein as of December 31, 2024 and 2023 and related notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on February 27, 2025, as amended by Form 10-K/A filed April 30, 2025 (our “Form 10-K”). Certain amounts may not foot due to rounding. Certain information in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q contains forward-looking statements that involve numerous risks and uncertainties, including, but not limited to, those described under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and Part II, Item 1A. “Risk Factors” included in this Quarterly Report on Form 10-Q and under the heading “Risk Factors” in our Form 10-K. We assume no obligation to update any of these forward-looking statements. Actual results may differ materially from those contained in any forward-looking statements.

Overview

Rocket Lab is an end-to-end space company with an established track record of mission success. We deliver reliable launch services, spacecraft design services, spacecraft components, spacecraft manufacturing and other spacecraft and on-orbit management solutions that make it faster, easier and more affordable to access space.

While our business has historically been centered on the development of small-class launch vehicles and the related sale of launch services, we are currently innovating in the areas of medium-class launch vehicles and launch services, space systems design and manufacturing, on-orbit management solutions, and space data applications. Each of these initiatives addresses a critical component of the end-to-end solution and our value proposition for the space economy:

• Launch Services is the design, manufacture, and launch of orbital rockets to deploy payloads to various Earth orbits and interplanetary destinations.
• Space Systems is the design and manufacture of spacecraft components and spacecraft program management services, space data applications and mission operations.

Electron is our orbital small launch vehicle that was designed from the ground up to accommodate a high launch rate business model to meet the growing and dynamic needs of our customers for small launch services. Since its maiden launch in 2017, Electron has become the leading small spacecraft launch vehicle delivering over 200 spacecraft to orbit for government and commercial customers across 64 successful missions through June 30, 2025. In 2024, Electron was the second most frequently orbital launched rocket by companies operating in the United States and the second most frequent orbital launcher globally. Our launch services program has seen us develop many industry-leading innovations, including 3D printed electric turbo-pump rocket engines, fully carbon composite first stage fuel tanks, a private orbital launch complex, a rocket stage that can be configured to convert into a highly capable spacecraft on orbit, and the potential ability to successfully recover a stage from space, providing a path to reusability.

In March 2021, we announced plans to develop our reusable-ready medium-capacity Neutron launch vehicle that will increase the payload capacity of our space launch vehicles to approximately 15,000 kg for expendable launches to low Earth orbit and lighter payloads for reusable configurations and into higher orbits. Neutron will be tailored for commercial and U.S. government constellation launches and ultimately configurable for and capable of human space flight, enabling us to provide crew and cargo resupply to space stations. Neutron will also provide a dedicated service to orbit for larger civil, defense and commercial payloads that need a high level of schedule control and high-flight cadence. We expect to be able to leverage Electron’s flight heritage across various vehicle subsystems designs, launch complexes and ground station infrastructure.

Our space systems initiatives are supported by the design and manufacture of our spacecraft family along with a range of components, software and services for spacecraft, including reaction wheels, star trackers, radios, separation systems, solar solutions, command and control spacecraft software, high voltage space grade battery solutions, and additional products in development to serve a wide variety of sub-system functions. We entered this market with our acquisition of leading spacecraft components manufacturer Sinclair Interplanetary, and have since expanded our market participation with the acquisitions of Planetary Systems Corporation, SolAero Technologies Corp. and aerospace software firm Advanced Solutions, Incorporated. Each of these strategic acquisitions brought incremental vertically-integrated capabilities for our own spacecraft family and also enabled Rocket Lab to deliver high-volume manufacturing of critical spacecraft components and software solutions at scale prices to the broader spacecraft merchant market. Our spacecraft family, which are configurable for a range of low Earth orbit, medium Earth orbit, geosynchronous orbit and interplanetary missions enable us to offer an end-to-end mission solution encompassing launch, full spacecraft manufacturing, ground services and mission operations to provide customers with streamlined access to orbit with Rocket Lab as a single mission partner.

Recent Developments

GEOST

On May 22, 2025, Rocket Lab USA Inc., a Delaware corporation (“Rocket Lab USA”) entered into a Stock Purchase Agreement (the “GEOST Purchase Agreement”), by and among the Rocket Lab USA, LightRidge Solutions Holdings LP (“LightRigde Solutions”), and LightRidge Interco Solutions Holdings, Inc. (“LightRidge Interco”), which provides for, among other things, Rocket Lab USA’s purchase and acquisition of all of the issued and outstanding shares of common stock of LightRidge Interco, the owner of GEOST LLC ( “GEOST”). On May 23, 2025, pursuant to the Purchase Agreement, the Company executed a joinder to become party thereto.

Pursuant to the terms of the Purchase Agreement, all of the issued and outstanding shares of LightRidge Interco will be purchased in exchange for aggregate consideration of $275.0 million, consisting of up to approximately $125.0 million in cash and up to approximately $150.0 million in shares of our common stock, $0.0001 par value, subject in each case to customary adjustments at closing, including for cash, working capital, transaction expenses and indebtedness (the “Transaction”). Additionally, the Purchase Agreement provides for up to $50.0 million in potential additional post-closing cash earnout payments to LightRidge Solutions tied to revenue targets of the GEOST business for 2026 and 2027. Our common stock issuable as stock consideration in the Transaction will be valued based on the closing trading price reported on the Nasdaq Capital Market on the trading day immediately prior to the closing date, subject to a base price floor closing condition of each party.

The Purchase Agreement contains representations, warranties, covenants and closing conditions from and for the benefit of each of us and LightRidge Solutions that are customary for transactions of this kind. We have also agreed to file a resale registration statement with respect to our common stock issued in the Transaction on the closing date of the transaction, subject to certain customary exceptions and requirements. We have also agreed to customary selling securityholder indemnities with respect to such registration rights. The Transaction is expected to close in the second half of 2025.

Impact of Tariffs

Beginning in early April 2025, there has been a significant shift in United States (“U.S.”) trade policy, characterized by increased tariffs and the introduction of new tariffs that could affect our supply chain and business operations. While much of our production is completed in the U.S. and many of our suppliers are located within and source their supply from within the U.S., we obtain some of our supplies from sources outside of the U.S. and certain of our consolidated subsidiaries are headquartered outside of the U.S. as well. Although some of these tariffs have been temporarily suspended or reduced, certain tariffs remain in effect, and some may be reinstated following the temporary suspension period currently articulated by the U.S., and as such tariffs could have a material adverse impact on our business, our results of operations and our cash flow. The extent of the impact of these tariffs will depend on various factors, including the specific products affected, the duration and amount of the tariffs the rates imposed by the U.S. and any reciprocal tariffs implemented by countries in which we operate or source goods, and our ability to manage increased costs. While we plan to implement measures to mitigate the effects of tariffs and other trade policy changes, such as negotiating with suppliers, adjusting our supply chain, and exploring cost-saving initiatives, our capacity to do so may be constrained by operational and supply chain limitations, particularly in the short term. To date, our business has not been materially impacted by this shift in U.S. trade policy and, to the extent we are able, we plan to continue to implement strategies to mitigate any potential impact of any new or ongoing tariffs or further shifts in U.S. trade policy.

Key Factors Affecting Our Performance

Ability to timely develop and successfully deploy Neutron launch vehicle

Our future results will depend on the success of the development and commercial acceptance of our Neutron medium-capacity launch vehicle. While we have made significant progress across Neutron’s structures and infrastructure to date, including engine testing and initial production execution, the commercial development of a new launch vehicle is inherently time consuming and involves numerous risks throughout the engineering and manufacturing development cycle, any of which could create delays in reaching the initial launch and future launches of the completed vehicle. In addition, even if we succeed in developing Neutron consistent with our targeted timeline, we could be unsuccessful in developing the ability to produce these launch vehicles in quantities and with the necessary quality manufacturing system that ensures each vehicle and engines perform as required. Any delay in the production of the Neutron launch vehicle or in our ability to produce these launch vehicles at our expected rate of production and with a reliable quality management system could have a material impact on customer acceptance as well as our future revenue, financial condition and results of operations. Additionally, delays or setbacks in Neutron development may require more research, development and capital expenditures than we currently anticipate, which could adversely affect our liquidity and capital resources in future periods.

Ability to sell additional launch services, space systems service and spacecraft components to new and existing customers

Our results will be impacted by our ability to sell our launch services, space systems services, and spacecraft components to new and existing customers. We have successfully launched Electron 64 times delivering over 200 spacecraft to orbit, including one suborbital launch, through June 30, 2025. We have flight hardware and spacecraft that have flown on over 1,800 missions, including legacy missions enabled by Sinclair Interplanetary (acquired April 2020), Advanced Solutions, Incorporated (acquired October 2021), Planetary Systems Corporation (acquired November 2021) and SolAero Technologies Corp. (acquired January 2022). Our growth opportunity is dependent on our ability to expand our addressable launch services market with larger volumetric and higher mass payload capabilities of our in-development medium-capacity Neutron launch vehicle, which will address large commercial and government constellation launch opportunities. Our growth opportunity is also dependent on our ability to win spacecraft constellation missions and expand our portfolio of strategic spacecraft components. Our ability to sell additional products to existing customers is a key part of our success, as follow-on purchases indicate customer satisfaction and decrease the likelihood of competitive substitution. To sell additional products and services to new and existing customers, we will need to continue to invest significant resources in our products and services.

Ability to improve profit margins and scale our business

We intend to continue to invest in initiatives to improve our operating leverage and significantly ramp production. We believe continued reduction in costs and an increase in production volumes will enable the cost of launch vehicles to decline and improve our gross margins. Our ability to achieve our production-efficiency objectives could be negatively impacted by a variety of factors including, among other things, lower-than-expected facility utilization rates, manufacturing and production cost overruns, increased purchased material costs and unexpected supply-chain quality issues or interruptions.

Government expenditures and private enterprise investment into the space economy

Government expenditures and private enterprise investment has fueled the growth in our target markets. We expect the continued availability of government expenditures and private investment for our customers to help fund purchases of our products and services will remain. This is an important factor in our company’s growth prospects.

Key Metrics and Select Financial Data

We monitor the following key financial and operational metrics that assist us in evaluating our business, measuring our performance, identifying trends and making strategic decisions.

Launch Vehicle Build-Rate and Launch Cadence

We built approximately 12 Electron launch vehicles in 2022, approximately 11 Electron launch vehicles in 2023 and approximately 14 Electron launch vehicles in 2024. We built approximately 12 Electron launch vehicles through the six months ended June 30, 2025. We launched nine Electron vehicles in 2022, ten Electron vehicles in 2023 and 16 Electron vehicles in 2024. We have launched ten Electron vehicles through the six months ended June 30, 2025. Growth rates between launches and total launch service revenue are not perfectly correlated because our total revenue is affected by other variables, such as the revenue per launch, which can vary considerably based on factors such as unique orbit and insertion requirements, payload handling needs, launch location, time sensitivity of mission completion and other factors.

Revenue Growth

Three Months Ended June 30, 2025 and 2024

We generated $144.5 million and $106.3 million in revenue for the three months ended June 30, 2025 and 2024, respectively, representing a year-on-year increase in revenue of approximately 36%. This year-on-year increase resulted from space systems revenue growth of $21.0 million, primarily driven by satellite manufacturing, and an increase in launch revenue of $17.3 million. Launch revenue growth was due to a higher launch cadence with five Electron launch missions completed in the three months ended June 30, 2025, versus four launch missions completed in the three months ended June 30, 2024, revenue recognized on over-time Electron launch missions and a higher revenue per launch on point-in-time Electron launch missions.

Six Months Ended June 30, 2025 and 2024

We generated $267.1 million and $199.0 million in revenue for the six months ended June 30, 2025 and 2024, respectively, representing a year-on-year increase in revenue of approximately 34%. This year-on-year increase resulted from space systems revenue growth of $47.9 million, primarily driven by satellite manufacturing, and an increase in launch revenue of $20.2 million. Launch revenue growth was due to a higher launch cadence with ten Electron launch missions completed in the six months ended June 30, 2025, versus eight launch missions completed in the six months ended June 30, 2024 and revenue recognized on over-time Electron launch missions, partially offset by a lower revenue per launch on point-in-time Electron launch missions.

Revenue and Cost Value Per Launch

Revenue value per launch represents the average revenue per launch contract attributable to point-in-time launches that occurred during a period. Revenue value per launch can be a useful metric to provide insight into general competitiveness and price sensitivity in the marketplace. Revenue value per launch can vary considerably, based on factors such as unique orbit and insertion requirements, payload handling needs, launch location, time sensitivity of mission completion and other factors, and as such may not provide absolute clarity with regards to pricing and competitive dynamics in the marketplace.

Three Months Ended June 30, 2025 and 2024

In the three months ended June 30, 2025 and 2024, our revenue value per launch was $7.9 million and $7.1 million, respectively. Meanwhile, cost per launch for the three months ended June 30, 2025 and 2024 was $5.0 million and $5.4 million, respectively. Revenue and cost per launch can fluctuate depending on customer mix and mission type.

Six Months Ended June 30, 2025 and 2024

In the six months ended June 30, 2025 and 2024, our revenue value per launch was $7.5 million and $7.7 million, respectively. Meanwhile, cost per launch for the six months ended June 30, 2025 and 2024 was $5.3 million and $5.7 million, respectively. Revenue and cost per launch can fluctuate depending on customer mix and mission type.

Backlog

Backlog represents future revenues that we would recognize in connection with the completion of all contracts and purchase orders that have been entered into by our customers but have not yet been fulfilled, excluding any customer options for future products or services that have not yet been exercised. Contracts for launch services and spacecraft builds typically include termination rights that may be exercised by customers upon advanced notice and payment of a specified termination fee. Our backlog decreased from $1,067.0 million as of December 31, 2024 to $995.4 million as of June 30, 2025, of which $585.8 million is related to space systems and $409.6 million is related to launch services. The decrease was primarily a result of recognizing revenue on contracts during the period, partially offset by continued bookings during the period.

Components of Results of Operations

Revenue

Our revenues are derived from a combination of long-term fixed price contracts for launch services and spacecraft builds, and purchase order based spacecraft components sales. Revenues from long-term contracts are recognized using either the “point-in-time” or “over-time” method of revenue recognition. Point-in-time revenue recognition results in cash payments being initially accrued to the balance sheet as deferred revenue as contractual milestones are accomplished and then recognized as revenue once the final contractual obligation is completed. Over-time revenue recognition is generally based on an input measure of progress based on costs incurred compared to estimated total costs at completion. Each project has a contractual revenue value and an estimated cost. The over-time revenue is recognized based on the percentage of the total project cost that has been realized.

Estimating future revenues and associated costs and profit is a process requiring a high degree of management judgment, including management’s assumptions regarding our future operational performance as well as general economic conditions. Frequently, the period of performance of a contract extends over a long period of time and, as such, revenue recognition and our profitability from a particular contract may be affected to the extent that estimated costs to complete are revised, delivery schedules are delayed, performance-based milestones are not achieved or progress under a contract is otherwise impeded. Accordingly, our recorded revenues and operating profit from period to period can fluctuate significantly depending on when the point-in-time or over-time contractual obligations are achieved. In the event cost estimates indicate a loss on a contract, the total amount of such loss is recorded in the period in which the loss is first estimated.

Cost of Revenues

Cost of revenues consists primarily of direct material and labor costs, manufacturing overhead, freight expense, depreciation and amortization and other personnel-related expenses, which include salaries, bonuses, benefits and stock-based compensation expense, directly associated with generating revenues. We expect our cost of revenues to increase in absolute dollars in future periods as we sell more launch services and space systems. As we grow into our current capacity and execute on cost-reduction initiatives, we expect our cost of revenues as a percentage of revenue to decrease over time.

Because direct labor costs and manufacturing overhead comprise a significant portion of cost of revenues, increasing our production rate resulting in greater absorption of these costs is our most critical cost reduction initiative. Increasing our production rate is a cross-functional effort involving sales and business development, manufacturing, engineering, supply chain and finance.

Operating Expenses

Our operating expenses consist of research and development and selling, general and administrative expenses.

Research and Development, net

Research and development, net expense consists primarily include labor, prototype, professional services, materials, facilities and depreciation expense. We intend to continue to make significant investments in developing new products and enhancing existing products, including but not limited to our medium capacity Neutron launch vehicle, Electron’s first stage recovery, and spacecraft features and capabilities, as well as expanding our portfolio of spacecraft components and subsystems. Research and development expense will be variable relative to the number of products that are in development, validation or testing. However, we expect it to decline as a percentage of total revenue over time.

Selling, General and Administrative

Selling, general and administrative expenses consist primarily of personnel-related expenses for our sales, marketing, supply chain, finance, legal, human resources and administrative personnel, as well as the costs of customer service, information technology, risk management and related insurance, travel, allocated overhead and other marketing, communications and administrative expenses. We also expect to further invest in our corporate infrastructure and incur additional expenses associated with operating as a public company, including increased legal and accounting costs, investor relations and compliance costs. As a result, we expect that selling, general and administrative expenses will increase in absolute dollars in future periods but decline as a percentage of total revenue over time.

Interest Income (Expense), Net

Interest income (expense), net consists primarily of interest expense incurred on debt and interest income earned on our cash and cash equivalents, short-term investments balances and marketable securities.

Gain (Loss) on Foreign Exchange

Gain (loss) on foreign exchange relates to currency fluctuations that generate foreign exchange gains or losses on invoices denominated in currencies other than the United States Dollar.

Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024

The following table sets forth our consolidated statements of operations information and data as a percentage of revenue for the three months ended June 30, 2025 and 2024 (in thousands, except percentages):

Revenues

(in thousands, except percentages)

Revenue increased by $38.2 million, or 36%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Space systems revenue was $97.9 million for the three months ended June 30, 2025, an increase of $21.0 million, or 27%, primarily due to spacecraft manufacturing growth. Launch Services revenue was $46.6 million for the three months ended June 30, 2025, an increase of $17.3 million, or 59%, primarily due to a higher launch cadence with five Electron launch missions completed in the three months ended June 30, 2025, versus four launch missions completed in the three months ended June 30, 2024, revenue recognized on over-time Electron launch missions and a higher revenue on point-in-time Electron launch missions in the three months ended June 30, 2025.

Cost of Revenues

(in thousands, except percentages)

Cost of revenues increased by $19.0 million, or 24%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Space systems cost of revenue was $65.7 million for the three months ended June 30, 2025, an increase of $8.2 million, or 14%, primarily due to spacecraft manufacturing growth. Launch Services cost of revenues was $32.4 million in the three months ended June 30, 2025, an increase of $10.8 million, or 50%, primarily due to cost of revenues recognized on over-time Electron launch missions and a higher launch cadence.

Research and Development, Net

(in thousands, except percentages)

Research and development expense increased by $26.2 million, or 66%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to Neutron development progress, increased staff and staff related expenses as a result of hiring and prototype spend focused on expanding our spacecraft and spacecraft components product portfolio.

Selling, General and Administrative

(in thousands, except percentages)

Selling, general and administrative expense increased by $9.4 million, or 31%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to increased staff and staff related expenses to support revenue growth and increased transaction expenses related to managing an active acquisition pipeline.

Interest Expense, Net

(in thousands, except percentages)

Interest expense, net of interest income increased by $1.5 million, or 188%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to an increase of interest expense from our convertible senior notes and a reduced balance in interest-bearing accounts.

Loss on Foreign Exchange

(in thousands, except percentages)

Loss on foreign exchange increased by $0.2 million, or 71%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to fluctuations on the foreign exchange rates of the New Zealand Dollar and Canadian Dollar as compared to the U.S. Dollar.

Other (Expense) Income, Net

(in thousands, except percentages)

Other expense increased by $2.9 million, or 152%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to a loss on disposal of assets for the three months ended June 30, 2025.

(Provision) benefit for Income Taxes

(in thousands, except percentages)

We recorded income tax expense of $2.9 million for the three months ended June 30, 2025 and income tax benefit of $0.9 million for the three months ended June 30, 2024. The effective tax rate was (4.6)% for the three months ended June 30, 2025, compared to 2.0% for the three months ended June 30, 2024. The effective tax rate differs from the federal statutory rate due primarily to a full valuation allowance against our U.S. deferred tax assets.

Comparison of the Six Months Ended June 30, 2025 and 2024

The following table sets forth our consolidated statements of operations information and data as a percentage of revenue for the six months ended June 30, 2025 and 2024 (in thousands, except percentages):

Revenues

(in thousands, except percentages)

Revenue increased by $68.0 million, or 34%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. Space systems revenue was $184.8 million for the six months ended June 30, 2025, an increase of $47.9 million, or 35%, primarily due to spacecraft manufacturing growth. Launch Services revenue was $82.2 million for the six months ended June 30, 2025, an increase of $20.2 million, or 32%, primarily due to a higher launch cadence with ten Electron launch missions completed in the six months ended June 30, 2025, versus eight launch missions completed in the six months ended June 30, 2024 and revenue recognized on over-time Electron launch missions, partially offset by a lower revenue on point-in-time Electron launch missions in the six months ended June 30, 2025.

Cost of Revenues

(in thousands, except percentages)

Cost of revenues increased by $37.8 million, or 26%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. Space systems cost of revenue was $124.6 million for the six months ended June 30, 2025, an increase of $22.8 million, or 22%, primarily due to spacecraft manufacturing growth. Launch Services cost of revenues was $60.8 million in the six months ended June 30, 2025, an increase of $14.9 million, or 32%, primarily due to a higher launch cadence and cost of revenues recognized on over-time Electron launch missions.

Research and Development, Net

(in thousands, except percentages)

Research and development expense increased by $42.8 million, or 55%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to Neutron development progress, increased staff and staff related expenses as a result of hiring and prototype spend focused on expanding our spacecraft and spacecraft components product portfolio.

Selling, General and Administrative

(in thousands, except percentages)

Selling, general and administrative expense increased by $19.9 million, or 34%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to increased staff and staff related expenses to support revenue growth and increased transaction expenses related to managing an active acquisition pipeline.

Interest Expense, Net

(in thousands, except percentages)

Interest expense, net of interest income increased by $3.2 million, or 188%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to an increase of interest expense from our convertible senior notes and a reduced balance in interest-bearing accounts.

(Loss) Gain on Foreign Exchange

(in thousands, except percentages)

Loss on foreign exchange increased by $0.6 million, or 2,592%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to fluctuations on the foreign exchange rates of the New Zealand Dollar and Canadian Dollar as compared to the U.S. Dollar.

Other (Expense) Income, Net

(in thousands, except percentages)

Other expense increased by $1.8 million, or 138%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to a loss on disposal of assets for the six months ended June 30, 2025.

(Provision) benefit for Income Taxes

(in thousands, except percentages)

We recorded income tax expense of $2.1 million for the six months ended June 30, 2025 and income tax benefit of $0.9 million for the six months ended June 30, 2024. The effective tax rate was (1.7)% for the six months ended June 30, 2025, compared to 1.0% for the six months ended June 30, 2024. The effective tax rate differs from the federal statutory rate due primarily to a full valuation allowance against our U.S. deferred tax assets.

Liquidity and Capital Resources

Since inception, we have funded our operations with proceeds from sales of our capital stock, convertible senior notes, term note debt, equipment financing, research and development grant proceeds, and cash flows from the sale of our products and services. As of June 30, 2025, we had $564.1 million of cash and cash equivalents and $185.2 million of marketable securities. Our primary requirements for liquidity and capital are for investment in new products and technologies, the expansion of existing manufacturing facilities, working capital, debt service, acquisitions of complementary businesses, products or technologies and general corporate needs. Historically, these cash requirements have been met through the net proceeds we received through private sales of equity securities and convertible senior notes, borrowings under our credit and equipment financing facilities, net proceeds received in our business combination, net proceeds received from our ATM Equity Offering and payments received from customers.

We believe that our existing cash and cash equivalents and payments from customers will be sufficient to meet our working capital and capital expenditure needs for at least the next twelve months, although we may choose to take advantage of opportunistic capital raising or refinancing transactions at any time primarily for the purposes noted above. We will continue to invest in increasing production and expanding our product offerings through acquisitions.

Material Cash Requirements

As of June 30, 2025, we had outstanding $427.1 million in aggregate principal amount of indebtedness under our convertible senior notes and equipment financing agreement, of which $16.5 million was scheduled to become due in the following twelve months. As of June 30, 2025, our total minimum lease payments was $124.0 million, of which $15.3 million is due in the following twelve months. For details regarding our indebtedness and lease obligations at June 30, 2025, refer to Note 10, Loan Agreements, and Note 13, Leases, to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Our capital expenditures for the six months ended June 30, 2025 were $60.7 million. Our future capital requirements will depend on many factors, including our launch cadence, traction in the market with our space systems offerings, the expansion of sales and marketing activities, the timing and extent of spending to support product development efforts, the introduction of new and enhanced products, the continuing market adoption of our products, the timing and extent of additional capital expenditures to invest in existing and new office spaces and the number of acquisitions of complementary businesses, products or technologies we pursue, if any. We may be required to seek additional equity or debt financing or we may choose to take advantage of opportunistic capital raising or financing transactions primarily for the purposes noted above. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued product innovation, we may not be able to compete successfully, which would harm our business, operations and financial condition.

Additionally, we expect our capital and operating expenditures will increase significantly in connection with ongoing activities as we:

• increase our investment in marketing, advertising, sales and distribution infrastructure for our existing and future products and services;
• develop additional new products and enhancements to existing products;
• obtain, maintain and improve our operational, financial and management performance;
• hire additional personnel;
• obtain, maintain, expand and protect our intellectual property portfolio; and
• continue to operate as a public company.

Indebtedness

As of June 30, 2025, there was $355.0 million outstanding under our 4.250% Convertible Senior Notes due 2029 (the “Convertible Notes”), before unamortized discount and debt issuance costs of $8.5 million. In addition, as of June 30, 2025, there was $72.1 million outstanding under the Trinity Loan Agreement, before unamortized discount and debt issuance and end of term costs of $1.9 million.

See Note 10 of Item 1 for additional information on our outstanding loan agreements.

Cash Flows

The following table summarizes our cash flows for the periods presented:

(in thousands)

Cash Flows from Operating Activities

Net cash used in operating activities was $77.5 million for the six months ended June 30, 2025 and consisted of $127.0 million in net loss, $61.7 million in non-cash activities and $12.2 million in cash used by operating assets and liabilities. Included in the non-cash activities are $37.2 million in stock-based compensation expense and $17.5 million in depreciation and amortization. Included in the cash used by operating assets and liabilities are $25.3 million in accounts receivable, net, $18.0 million in prepaids and other current assets, $11.5 million in inventories, offset by cash provided in operating assets and liabilities including $11.9 million in other non-current assets, $11.2 million in contract assets, $11.1 million in trade payables and $7.2 million in contract liabilities.

Cash Flows from Investing Activities

Cash used in investing activities for the six months ended June 30, 2025 of $36.0 million was primarily driven by $60.7 million of capital equipment and infrastructure investments, partially offset by net cash provided by maturities, purchases and sales of marketable securities of $24.6 million.

Cash Flows from Financing Activities

Cash provided by financing activities for the six months ended June 30, 2025 of $406.0 million was primarily related to $387.2 million of net proceeds from the issuance of common stock under the ATM Equity Offering and $24.7 million of net proceeds from a draw under the Trinity Loan Agreement, partially offset by $11.2 million of repayments under the Trinity Loan Agreement.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates as disclosed in our audited financial statements included in our Form 10-K.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.

Guarantor Information

In connection with the Reorganization, on May 23, 2025, the Company, Rocket Lab USA and U.S. Bank Trust Company, National Association (the “Trustee”) entered a first supplemental indenture (the “Supplemental Indenture”) to the indenture, dated as of February 6, 2024, between Rocket Lab USA and the Trustee (the “Indenture”), governing the Convertible Notes in order to (i) provide for subsequent conversions of the Convertible Notes in the manner set forth in Section 5.09 of the Indenture, (ii) provide for subsequent adjustments to the Conversion Rate pursuant to Section 5.05(A) of the Indenture in a manner consistent with Section 5.09 of the Indenture, (iii) provide for the full and unconditional guarantee of the obligations of Rocket Lab USA under the Convertible Notes and the Indenture and (iv) make such other changes as are appropriate to preserve the economic interests of the holders and to give effect to the provisions of Section 5.09(A) of the Indenture.

As of June 30, 2025, there was $355.0 million aggregate principal amount of issued and outstanding convertible senior notes of Rocket Lab USA that are fully and unconditionally guaranteed by the Company. Accordingly, pursuant to Rule 3-10 of Regulation S-X, separate consolidated financial statements of Rocket Lab USA have not been presented. As permitted under Rule 13-01(a)(4)(vi) of Regulation S-X, we have excluded summarized financial information for Rocket Lab USA because the assets, liabilities and results of operations of Rocket Lab USA are not materially different than the corresponding amounts in the Company’s consolidated financial statements.

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in foreign currency exchange rates and interest rates and inflation. In addition, we are subject to broader market risk that is created by the global market disruptions and uncertainties resulting from macroeconomic challenges, geopolitical events, tariffs, trade and other international disputes.

Foreign Currency Exchange Risk

Our reporting currency is the U.S. dollar, and the functional currency of each of our subsidiaries is either its local currency or the U.S. dollar. The assets and liabilities of each of our subsidiaries are translated into U.S. dollars at exchange rates in effect at each balance sheet date and operations accounts are translated using the average exchange rate for the relevant period. Increases or decreases in the relative value of the U.S. dollar to other currencies may positively or negatively affect revenue and other operating results as expressed in U.S. dollars. Foreign currency translation adjustments are accounted for as a component of accumulated other comprehensive income (loss) within stockholders’ equity. Gains or losses due to transactions in foreign currencies are reflected in the condensed consolidated statements of operations under the line item “Loss on foreign exchange.” Materially all of our revenues are denominated in U.S. dollars and we have not engaged in the hedging of foreign currency risk to date, although we may choose to do so in the future. As such, a 10% or greater move in exchange rates versus the U.S. dollar could have a material impact on our financial results and position.

Interest Rate Risk

As of June 30, 2025, we had cash and cash equivalents of $564.1 million, comprised primarily of operating accounts and money market instruments and $185.2 million invested in marketable securities, comprised of commercial paper, corporate debt securities, bank certificates of deposit, U.S. Treasury bills and notes and asset backed securities. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.

Impact of Inflation

We do not believe that inflation has had a material effect on our business, results of operations, or financial condition. Nonetheless, if our costs were to become subject to significant inflationary pressures it could diminish our margin thereby limiting our profits, especially if we are not able to fully offset such higher costs. Our inability or failure to do so could harm our business, financial condition, and results of operations.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

As required by paragraph (b) of Rules 13a-15 and 15d-15 under the Exchange Act, our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of June 30, 2025.

Changes in Internal Control over Financial Reporting

During the period covered by this Quarterly Report on Form 10-Q, there were no changes in the our internal control over financial reporting (“ICFR”) identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of the Exchange Act that has materially affected, or is reasonably likely to materially affect, the Company’s ICFR.

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K and Part II, Item 1A of our Quarterly Report on Form 10-Q for the period ended March 31, 2025, as filed with the SEC on May 8, 2025.