SpaceX's second wave of lock-up expirations is here; how should investors position themselves in spa
Rocket Lab 2026Q2业绩直播
Key Takeaways (AI-Generated)
Financial Performance
- Record Q2 2026 revenue of $234 million, up 62% year-over-year and 16.8% sequentially
- Space Systems segment delivered $189.5 million, Launch Services segment generated $44.6 million
- GAAP gross margin of 36.1% and non-GAAP gross margin of 41.5%, both above guidance
- Backlog of $2.36 billion with 45.5% expected to convert within 12 months
Business Highlights
- Signed over $1 billion in new contracts across Q2 and post-quarter period
- Closed Minarek and Motive acquisitions, announced pending Iridium acquisition for mid-2027
- Won record $266 million Space Force contract for up to 18 suborbital missions
- Established Rocket Lab Germany as regional hub for constellation manufacturing
Financial Guidance
- Q3 2026 revenue guidance: $250-265 million representing 10% quarter-over-quarter growth at midpoint
- Q3 GAAP gross margin: 29-31%, non-GAAP gross margin: 35-37%
- Q3 adjusted EBITDA loss: $17-23 million
- Neutron production timeline aligned with Q4 2026 pad delivery target
Opportunities
- Iridium acquisition provides entry into space applications market with 2.5 million subscribers
- Neutron development progressing with over 400 engine hot fires completed
- Ghost deployable launch technology enabling rapid global deployment capabilities
- Vertical integration strategy reducing margin stacking and improving competitiveness
Risks
- Neutron first launch window narrowing, requiring risk trading between timing and scalability
- Extremely constrained launch market with limited capacity availability post-2029
Full Transcript (AI-Generated)
Operator
Good day and thank you for standing by. Welcome to the Rocket Lab Corporation Q2 Earnings call. At this time, all participants are in a listen only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw a question, please press *11 again.
I would now like to hand the conference over to your speaker today, Muriel Baker.
Muriel Baker
Hello and welcome to today's conference call to discuss Rocket Labs second quarter 2026 financial results, business highlights and other updates. 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 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 and included in such release and our supplemental 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 with a supporting presentation and a replay and copy of the presentation will be available on our website.
Our speakers today are Rocket Lab Founder and Chief Executive Officer, Sir Peter Beck as well as Chief Financial Officer Adam Spice. They will be discussing key business highlights including updates on our launch space systems programs as well as our pending acquisition of Iridium Communications. We will discuss financial highlights and outlook before we finish by taking questions. So with that, let me turn the call over to Sir Peter.
Sir Peter Beck
It's been another exceptional quarter for Rocket Lab with some great wins. We achieved a record $234 million in Q2 revenue up almost $90,000,000 or 62% versus the same quarter last year. That's a $34 million increase over last quarter's record revenue. The launch demand is extreme in Q2 and since the end of the quarter closed, we've signed more than 437 million in bookings for Electron, Haste and Neutron.
This includes a record $266 million contract for up to 18 suborbital missions for the Space Force, our largest launch contract ever. Also, we've seen a massive surge in Space systems contracts with more than 581,000,000 signed in Q2 and post quarter. We ended the quarter with a $2.36 billion in backlog and across launch in Space Systems, we've signed more than a billion dollars in new contracts across Q2 and the period since the quarter closed.
It was also a milestone quarter for strategic acquisitions, having closed Minarek and Motive and of course, announcing our intentions to acquire Iridium, which will accelerate our future in space applications and involve Rocket Lab into a fully integrated space powerhouse. So with that, welcome to the beginning of our new space applications era.
Appending Iridium acquisition is a strategic move that will combine Rocket Lab's launch capability and satellite manufacturing with Iridium's global satellite communications network and rear spectrum. In short, Rocket Lab will become a self launching Tier 1 space power, delivering critical communications capability to millions of users worldwide.
For years we've talked about the space value chain in three key verticals. The first is access to space, and we have that with launch. The second is the hard way to do things in space. Once you're there, that's the satellites and their components, and we have this too. The 3rd and final vertical is space applications, the entire reason for going to space in the first place.
This is part of the space economy that provides data services to millions of people on Earth and delivers strong reoccurring revenue. With Iridium, Rocket Lab will have all three of these verticals. I've long since said that the most successful space companies will be the ones that have the keys to space, IE can build and launch their own satellites. Rocket Lab is one of only two companies capable of this now.
By acquiring Iridium, we will accelerate our entrance into the space applications market. It will take a decade or more to build out a constellation from scratch. With Iridium, we are starting with a constellation of 66 satellites relied upon by more than 2.5 million subscribers and delivering more than $870 million in annual revenue this past year. That's an incredibly strong foundation on which we intend to build.
We won't simply continue Iridium's network, we will expand upon it and scale it into untapped markets and pioneer new space based services. Since the transaction is not yet closed, we are still only on the integration and growth planning stages. There are however some obvious areas to focus on and these are aligned with the growth plans that already and is already shared.
That includes expanding capabilities in IoT direct to device and advanced PNT defense and national security as well as aviation and marine safety. We can also introduce efficiencies and streamline the deployment of new infrastructure by building and launching our own spacecraft, limiting the costs and risks associated with third parties. We will fast track your ability to deliver new and advanced capabilities.
It's these growth areas at Rocket Lab will put Iridium spectrum to more effective use, extracting substantially greater capacity and throughput from the same finite spectrum allocation. We are immensely excited at what the future holds once Iridium is part of the Rocket Lab family. For now, we're steadily working through the customary closing conditions including approval of Iridium stockholders and all the regulatory review processes. The transaction is expected to be completed in mid 2027.
To the extent that we are able, we look forward to sharing updates throughout that process. OK, on to some space Systems updates. Q2 and the weeks after saw us awarded significant contracts across space systems including a $397 million contract to build and launch multiple flatellite spacecraft for the Space Force Space based Airborne Moving Target indicator program.
This program is a high priority for the Department of War and it seeks to establish a satellite network to track aircraft missiles and airborne threats globally. And another example of our end to end space strategy bearing fruit, Neutron will be launching this mission. Flatellite is a high performance, low profile spacecraft designed for rapid production and optimized for launch, enabling us to deploy large volumes from Neutron and from other launch vehicles.
There has been significant interest in flat alight from commercial and government customers since we first announced it last year, so it's exciting for it to make its debut with such an important program. On to the next contract when we signed 2 deals totaling more than $160 million to build 3 Geo stationary satellites, including a prime contract with a Space Systems command to build 2 Geo satellites for space domain awareness.
What's more, they will incorporate our ham Dole payload from our recently acquired company, Geost, once again highlighting the success of a vertical integration strategy. Rocket Lab is no stranger to building satellites for low Earth orbit and interplanetary missions, but these contracts are a first step into the government geostationary satellite market. It's an exciting expansion.
We don't just win contracts, we execute on them. There's no better mission that demonstrates that than our record-breaking results for the Victor's Hayes mission in Q2. The mission from Space Force was clear launch an electron to orbit in just 24 hours. We did this in 16 hours and 42 minutes, a new record. We also designed and built the satellite that it launched.
The Space Force gave us 72 hours to Commission that spacecraft on orbit. We did it in 38. Then we had 84 hours to track, chase and photograph a non cooperative satellite. We did it in less than 59. Victor Hayes was the first time that the Space Force had ever seen a single prime contractor deliver the rocket, the spacecraft and the orbit operations for the same technically responsive space mission.
For Rocket Lab to deliver all three and with record-breaking results demonstrates the advanced capabilities that we're delivering to the Pentagon at a time when space is a key strategic priority. And finally, Rocket Lab is very clearly a space leader in the US but recently we deepened our roots in Europe with the acquisition of Monarch.
Whenever Rocket Lab makes an acquisition, we don't just carry on running it. We streamline it, introduce efficiencies, scale production and in many cases introduce new capabilities. We're planning to do just that with the official establishment of Rocket Lab Germany. There's a real opportunity here for us to establish a regional hub for Constellation class manufacturing as well as full scale spacecraft assembly, integration and test.
This will enable Rocket Lab to serve commercial civil and defense space programs as a domestic European provider. A growing presence there also represents an opportunity to address Europe's launch deficit by bringing a domestic mission tested launch partner to the region to eliminate space access bottlenecks. Europe faces glaring gaps across both launch and spacecraft manufacturing. Rocket Lab Germany aims to address these directly, providing the region with new domestic strength in a rapidly evolving new space era.
That wraps up the space systems for the quarter. Let's move on to launch. There's been huge demand, driving record numbers across new contracts and launch backlog more than $437,000,000 in Q2 in post quarter and 26 new launches that grew our backlog to 90 plus launches after the quarter, the highest in history.
Operationally, Electron and haste continue to lead the industry on small launch. We're at 13 launches this year with 100% mission success and on track to beat last year's launch tally. NASA has signed on for three Electron launches across 2 missions next year. Commercial Constellation customer QPS has signed on for another 3 launches. This is the third time they've done a bulk buy in less than a year, taking the total number of launches with us to 18.
And we've had a confidential defense Prime sign up for a pair of Heist launches in 2027. Heist rapid repeatable flight cadence was the clincher for that deal. A sub over launch capability anchor their largest launch contracts to date, a $266 million contract from the force for up to 18 missile defense launches. We bid out legacy defense primes for this contract and it's a second multi year multi launch Department of War deal for suborbital missions in five months.
These launches will mostly fly out of our new launch location in Codiac, Alaska, which opens up specific access for missile defense testing for a government partner. There's now 6 Rocket Lab launch pads across three launch sites, giving us unmatched geographical flexibility for all mission types. Speaking of our new launch location, it's time to introduce Ghost.
We've mastered the art of building launch sites. Now we're making them deployable worldwide. 2 new pairs in Alaska will be deployed using a Ghost containerized deployable launch site technology. Electron and Haste revolutionize small orbital launch and hypersonic testing. Now we're making it easier to deploy them wherever they're needed most, whether that's a per missile defense testing or sovereign orbital launch capability.
With Ghost, we'll deliver the rocket launch infrastructure, ground support and range control systems and shipping containers, establishing launch capability in new locations on rapid timelines. It's easy to promise mobile or deployed launch systems. It's quite another to have the proven rockets, launch sites and contracts to back them up. Once again, Rocket Lab is not just talking about it. We're delivering the real capability for real missions.
Now on to Neutron. It's been another really big quarter of testing and integration for Neutron. Every part of the vehicle has now seen significant testing. As with any complex development program, we've had to tweak a few things along the way, but we're moving now into final check out and assembly of all of our flight hardware before integrating them at the pad.
First up stage one, we pulled the new barrels and domes of the AFP for the Stage 1 tank and are moving those into assembly for the interstage. New panels are also into the flight assembly after qualification load tests were completed recently. Production currently lines up with their target delivery of Neutron to the pad in Q42026.
While the window for an India launch is narrowing, the work we're doing now is about risk trading, balancing the timing of our first launch against how quickly and seamlessly we can scale our tenths launch. Our focus is on the bigger picture and making sure that when Neutron flies it into service as a system ready for full scale production and high cadence launch the Stage 2.
The team is completing the install of flight avionics and fluid systems before it's out the door to launch Complex 3. Once it arrives in Virginia, we'll be doing the integrated fluids testing and running the flight avionics suite to validate Stage 2's end to end performance before we add the Archimedes vacuum engine. That way we do risk some of the elements early and avoided added time to the schedule.
The next section of the rocket at LC3 will be Neutrons thrust module. The auxiliary tanks have been installed and the fluid systems and avionics integration is finishing up now. Similar story here as well. After the install of the fluids in the avionics will be taking the thrust module through the integrated systems test on the pad because the module is the only physical interface between the launch vehicle and the launch mount.
Running these tests before we integrate the thrust module with Stage 1, let's just de risk how the full vehicle will interact with the pad once everything else arrives. Down at Stennis, we're heading off into the final stretch of Archimedes engine testing. We've completed more than 400 hot fires across both stage 1 engines and stage 2 vacuum engines.
Where early testing was all about the fundamentals like power level, mixture ratio, control and achieving duration, now it's about durability and the stuff that really matters for a reusable engine. We've been intentionally running engines for extended time to prove its margins beyond what they need for a successful flight, as well as repeated cycles to understand how durable the engines are after multiple restarts and uses.
With confidence in the engine, we're already into production with the full engine set for neutrons first launch. Once we formally complete qualification, those flight engines will go straight into an acceptance test program at Stennis before they're sent up to LC3 for integration with the thrust module.
And now to Hungry Hippo. The team has been busy integrating control surfaces, avionics and fluid systems and it's thermal protection system, and soon we'll be getting into preflight testing with the most innovative part of Neutron. Once that's done, Hungry Hippo is essentially finished and ready for launch. The next step will be to mate it to the end of stage when it arrives. And then that will bring us one step closer to having a full vehicle at the launchpad out of development and into new contracts.
As we race closer to first launch, we're seeing huge demand for neutrons, early flights. Like I've mentioned earlier, we've been newly awarded a dedicated Neutron launch contract for the Space Force for their space based airborne moving targets program. This mission is a strong indicator of the trust that the government has a Neutron to support the most critical national security programs.
And then on the commercial side, today we announced A dedicated launch for Kepler Communications to deliver their next set of satellites to low Earth orbit. That mission will expand the capacity of their network with on orbit compute, optical comms and hosted payloads. And it's the first time Kepler has booked an entire rocket for their constellation rather than rideshare. Again, another strong signal of the expectation for Neutron to become the industry's alternate ride to space for medium lift missions.
To understand the momentum behind Neutron, you have to look at the broader launch landscape. Today, launch has never been so constrained. The Pentagon is accelerating procurement for its top priority programs like we've seen with the NSSL Lane 1 tripling its ceiling from 5.6 billion to 17 billion. Military spending in Europe has increased, and sovereign launch remains a hot topic globally too.
The truth is that if you want to book a launch now or especially after 2029, the options are extremely limited. Rocket Lab is uniquely positioned in this sense. We have a proven track record with Electron and Heights, and customers know we develop and scale reliable launch vehicles, which is why they're coming to us now and locking in Neutron slots early. Neutron is going to help unblock the industry's bottleneck, giving operators a reliable capacity that they need for years to come.
That wraps up the operational highlights. Now over to Adam for the financial overview and outlook.
Adam Spice
Thanks, Pete. Second quarter 2026 revenue was a record $234 million, which was within our prior guidance range and reflects significant year over year growth of 62% and 16.8% sequentially, driven by strong contribution from both business segments. Our Space System segment delivered $189.5 million in the quarter, reflecting A sequential increase of 38.6%.
This growth was primarily driven by increased contribution from our satellite manufacturing business along with initial contribution from our minoric acquisition, which closes in the quarter. Our Space Systems business continues to perform exceptionally well and provides comforting diversification alongside our robust, but at times lumpy launch business.
Meanwhile, our Launch Services segment generated revenue of $44.6 million this quarter, representing a 30% decrease compared to the previous quarter despite completing a similar number of launches. This decline is primarily attributable to a shift in the revenue mix between our point in time electron business and our overtime haste business.
This quarter was somewhat atypical for a launch operations as we launched haste missions for which a significant portion of revenue had already been recognized in prior periods under the overtime accounting method. In contrast, revenue from Electron emissions is recognized at the point of time of launch.
Now turning to gross margin gap gross margin for the second quarter was 36.1% above our prior guidance range of 33 to 35%. Non gap gross margin for the second quarter was 41.5% which was also above our prior guidance range of 38 to 40%. Key drivers to gross margin this quarter include a shift mix within our Space Systems business to our slightly lower gross margin satellite platforms business and initial contributions from our Minoric acquisition.
Which similar to prior acquisitions will need some time to benefit from integration synergies and applying the Rocket Lab operating system and it's related scale advantages. Additionally, we recorded a non recurring benefit from tariff refunds which was largely offset by an inventory reserve against our Neutron flight to launch vehicle. Relatedly, we added Q2 with productionally rated related headcount of 1688, up 240 from the prior quarter.
Turning to backlog, we ended Q 2/20/26 with approximately $2.36 billion in total backlog with launch backlog accounting for approximately 40% and space systems representing 60%. While bookings cross space systems of launch can be inherently lumpy due to the timing of increasingly larger high impact program opportunities, backlog continues to hold and healthy levels.
Despite the step up in revenue run rate recognition over the past few quarters, we continue to see a strong pipeline that includes a multi launch agreements and large satellite manufacturing contracts across government and commercial programs. Notably, subsequent to the quarter end, we signed a significant volume of contracts within Space Systems and Launch. Across all vehicles which will be reflected in our Q3 backlog and further strengthen our momentum across the business.
Looking ahead, we expect approximately 45.5% of our current backlog to convert into revenue within the next 12 months. Additionally, we continue to benefit from relatively quick turns business across launch and space systems components businesses that Dr. incremental top line contribution beyond the current 12 month backlog conversion.
Turning to operating expenses, Gap operating expenses for the second quarter of 2026 were $142.1 million within our guidance range of 138 to $144 million. Non GAAP operating expenses for the second quarter were $115.7 million which was below our guidance range of 120 to $126 million.
In R&D specifically, GAAP expenses increased $1.9 million quarter over quarter, while non GAAP expenses rose $830,000. These increases were primarily due to incorporating minority expenses as that acquisition closes in the quarter. Q2 ending R&D headcount was 1087 representing an increase of 138 for the prior quarter.
In SG and A, GAAP expenses increased $7.7 million quarter over quarter, while non GAAP expenses increased $9.8 million quarter over quarter. The increase in SG and A was primarily due to incorporating Menarche expenses again as that acquisition closed in the quarter. Q2 ending SG and A headcount was 442 representing an increase of 61 from the prior quarter. In summary, total headcount at the end of the second quarter was 3217, up 439 heads from the prior quarter.
Turning to cash, purchases of property, equipment and capitalized software licenses were $26 million in the second quarter of 2026, a decrease of $1 million from the $27.1 million in the first quarter. We continue to invest in Neutron, particularly for the return on investment recovery barge as well as launch and test infrastructure investments as we progress towards Neutrons first flight.
We expect capital expenditures to remain elevated as we invest in testing, production scaling and infrastructure expansion. Gap EPS for the second quarter was a loss of $0.08 per share compared to a loss of $0.07 per share in the first quarter. The sequential decline in GAP EPS primarily reflects the inclusion of Minarcs results after the acquisition closed, including amortization of intangible assets. Acquired
GAP operating cash flow was a use of $84.1 million in the second quarter of 2026 compared to a use of $50.3 million in the first quarter. Similar to the capital expenditure dynamics mentioned earlier, cash consumption will remain elevated due to neutron development and neutron tail production as we scale the business beyond the initial test flight and as we procure longer lead items for SDA programs.
Overall, non GAAP free cash flow defined as gap operating cash flow less purchase of property, equipment and capitalized software in the second quarter of 2026 was a use of $110.1 million compared to a use of $77.4 million in the first quarter. The ending balance of Cash, Cash equivalents, restricted cash and market marketable securities was roughly $2.4 billion at the end of the second quarter.
The sequential increase in liquidity was driven by proceeds from sales of our common stock under our at the market equity offering program, which generated one point O $8 billion during the quarter before it was subsequently terminated. These funds are intended to support acquisitions such as the recently announced Iridium acquisition as well as other targets in a robust M and A pipeline alongside general corporate expenditures and working capital.
We exited Q2 in a strong position to execute on both organic and inorganic growth initiatives and a further vertically integrate our supply chain, expand strategic capabilities and grow our addressable market consistent with what we have done successfully in the past. Adjusted EBITDA loss for the second quarter of 2026 was $8.8 million, which was well below our guidance range of 20 to $26 million loss.
The sequential improvement of $2.9 million in Adjusted EBITDA loss was largely driven by higher revenue and strong gross margin. With that, let's turn to our guidance for the third quarter of 2026. We expect revenue in the second quarter to range between 250 and $265,000,000, representing 10% quarter over quarter revenue growth. At the midpoint, we anticipate gap gross margin to range between 29 to 31%. And non GAAP gross margin to range between 35 to 37%.
These forecasts and GAAP and non GAAP gross margins are accounting for a shift in mix within our Space Systems business and and we expect a beneficial remixing impact on gross margins. As we look beyond Q3. We expect third quarter GAAP operating expenses to range between 143 and $149,000,000 and non GAAP operating expenses to range between 121 and $127 million.
The quarter over quarter increases are primarily driven by ongoing neutron development and spending related to Flight 1 including staff costs, prototyping and materials. However, we expect to see a shift in spending from R&D to Flight 2 inventory which is an encouraging sign of progress as we move closer to neutrons first flight. We expect third quarter net interest income to be $21 million, which is generally a function of higher cash balances.
We expect third quarter Adjusted EBITDA loss to range between 17 and $23 million and basic weighted average common shares outstanding to be approximately 641 million shares. Lastly, consistent with prior quarters, we expect negative non GAAP free cash flow in the third quarter to remain at elevated levels driven by ongoing investments in Neutron development and scaling production. This excludes any potential offsetting effects from any financing activities in the quarter.
In summary, Q2 was another quarter of strong execution. We continue to see exceptional revenue growth across the business, all while maintaining robust liquidity to fund future growth initiatives. We expect this momentum to continue guiding to strong revenue growth as our satellite platforms business scales exceptionally and Neutron progresses towards first flight. And last but not least, here are some of the upcoming investor events that we'll be attending in the next few months.
And with that, we'll hand the call over to the operator for questions.
Operator
Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11. Again, one moment for questions. Our first question comes from Andre Shepherd with Cantor Fitzgerald. You may proceed.
Andre Shepherd
Hey everyone, good afternoon. Congratulations on the quarter and all the great progress and and thanks for taking our questions. Maybe one on neutron and and one on Iridium. So on Neutron, it's great to see all the recent progress. I guess I want to maybe move past the first launch and talk about scale. You know, in the past you've given us some cadence on Neutron first launches.
But I guess my question there is how quickly do we think we could potentially get to 10 launches and an additional scale? Is there a possibility to perhaps accelerate the rampant process? And then finally, you know, with the space industry still significantly constrained on the launch side, how are you thinking about ASP going forward? Is there an opportunity perhaps to increase ASPs both of Neutron and maybe Electron and haste as well? Thank you.
Sir Peter Beck
Yeah, Andrew, it's good. Good to chat to you. So thanks for the question. So with with respect to Neutron, you know, I guess one, one of the questions that I think people should be asking is, is, you know, obviously the first flight is extremely important, but what about flight 10? Because you know that, that that's probably the in my, you know, apart from flight, the the second most important thing and how quickly we can scale into into into cadence is, is absolutely critical.
So I think as, as we're kind of working forward with the the vehicle right now and, and, you know, the way we're thinking about things is it's not just to get to the to the pad quickly for flight 1. Of course we all want that one that no one more than I, but it's really about how do we get to to flight 10 in the in the shortest time possible.
So for us, that that's really all about reusability and we're constantly trading, you know, the, the, the timelines and the qualification criteria for the various systems and subsystems, you know, to, to get to the pad on for flight 1. But also making sure that when it comes to flight 10 that we'd have to go back and, and re qualify things.
So you know, the a constant, constant kind of assessment along that that that that way. And I think, you know, a ramp that we've we've sort of explained to everyone is A135 ramp. And that's been kind of, you know, educated from what we did with electron. But for neutron, it really is all about reusability. And you know, the the the more robust we can fall into reusability, then the faster we can scale it.
And you know, clearly you've seen the the strain in the launch industry right now and the need not just the new vehicles, but new vehicles at. So I guess that's, you know, that's how we're sort of balancing all those things. And you know, I'll let Adam comment on the ASP.
Adam Spice
Yeah, no, look, I think on the ASP, that's really a function of what's going on in the broader kind of launch market. You know, we brought electric, sorry, Neutron to market, you know, with a 50 to $55 million ASP with a commitment really not to do any significant discounting for early launches. We've stuck to that. We feel very good though about where the market is from, you know, supply versus demand perspective.
And you know, I think right now the, you know, the view is that we see more upside to, to ASPs and certainly anything sit down or sideways. So I think we feel good. I think it's left us room to to move pricing as as demand continues to firm up. And again, I think there's there's probably more upside in that mix than the downside.
Andre Shepherd
Excellent, Thank you both. Really appreciate all that color. And maybe just a quick one on Iridium. So you know, Peter, you, you touched on it a little bit in our prepared remarks, but just wondering if you can maybe elaborate a bit further on on the overall combined strategy. You know, what, what new opportunities does Iridium unlock both through vertical integration and with their 60 plus constellation?
What, what new awards and opportunities can you now pursue and, and maybe separately, how will you ultimately think about assigning Neutron launches to Iridium's new constellation and new customers? Thank you.
Sir Peter Beck
Yeah, thanks. So I mean, obviously we're very excited about it. I think there's there's a lot of obvious synergies. I think, you know, I've always been very clear that the large space companies of the future are going to have the ability to launch their own satellites that they've built themselves on their own rocket. I think that that's very clearly demonstrated as being superior. So, so that that's obviously really exciting.
We've got a, a lot of areas that we think we can, we can grow that business. And you know, if you look at the cost of what it costs Iridium to put up the initial calculate, you know, initial constellation and we sit here with a on the back of an envelope and what we could do it for now. It's it's pretty, it's pretty stark. So, you know, and obviously a good way.
So we think there's, there's, there's, there's lots of opportunities there. And then no, I think your, your point is right. We also, you know, as as we're thinking about neutrons capacity in, in this environment where we are, you know, demand is extreme. We need to we need to obviously serve the commercial market. We need to make sure that we have some launches left for a government customer as we've been on boarded onto the NSSL program.
And we also need to make sure we have capacity for ourselves because you know, ultimately and tension here will be to to improve that constellation. So it's all a bit of a bit of a juggling act for sure.
Andre Shepherd
Wonderful. Thank you so much. Congrats again on the quarter. Looking forward to Neutron. We'll pass it on.
Operator
Thank you. Our next question goes from Jeff Henry with Craig Allen Capital Group. You may proceed.
Jeff Henry
Great, thanks. Thanks for taking the question. So Peter on on Iridium for a second, just you know, obviously they come in, they bring some real nice profitability and a presence in the applications market which you want. They bring slower growth and I know you've been, you know, pretty impressive with previous acquisitions, particularly on margins.
But here you're going to have to really try to re accelerate or accelerate that top line. Like what are the lowest hanging fruits, so to speak, in terms of things that you can do over the shorter to intermediate term to accelerate their top line?
Sir Peter Beck
Yeah, it's a great question. So, you know, firstly, you know, it's a quintessential Rocket Lab deal and the fact that we're not buying, you know, a big hole in their PNL as you point out, right. So, so they bring some nice profitability and the constellation itself is good into 2035. And there's, there's, and you also point out correctly that it's a relatively, you know, slow growing business.
But for us, as we think about some of the initiatives that they, they've already embarked on to grow, I think we can supercharge those, you know, especially in the area of, of PNT and with a, you're right, relatively modest tweak to a constellation, add a whole bunch more capability.
But also I think it, it puts us in a totally different position from the perspective of, of some of their government customers. Because you know, previously we, we can go along to a government customer and they give us full credit that we can design and build launch vehicles and, and you know, you, you jump on a Rocket Lab launch vehicle and you have no concern about getting to orbit.
Also, the same goes for building spacecraft. I think, you know, we've demonstrated we can build anything from a low Earth orbit comms bird through to something that goes to Mars. But where it gets a little bit tricky for us is to put a hand in our heart and say, well, we can do a mission critical. Life critical constellation and provide services and manage all that credibly before you know before an Iridium acquisition we we couldn't do that.
So I think we turn up to a government customer and commercial customers to that sense with just a whole new set of of toolkits and capabilities that you know, really set this out from everybody else really apart from one other provider in the market. So I think, I think you know that that that in itself, you know, provides a lot of opportunity, but you know, the our our focus is rightly so with with the acquisition from day one will be growth, growth, growth.
Jeff Henry
Yeah, makes sense. 11 last for me on on ghost, very interesting, you know, talk, talk a bit more about that what what infrastructure is needed at the site. It sounds like you bring a lot. There's clearly going to be some things that have to be there, but I'm particularly interested in kind of what what business can or will this capture that you couldn't otherwise capture And really what was the genesis of the idea?
Sir Peter Beck
Yeah, it was really a request from a customer. They have, you know, very important needs for, for the haste program and to be able to service those needs, we need to be able to be a little bit more mobile than we are. So it's, it's not a, it's not a, you know, maybe we'll build it and someone will be interested in, in, in that capability. We're we're definitely directed to that capability.
And you know, we don't we don't need a lot that we've built three pads for, for Electron to date. And with the one thing I'll say that with with Neutron that, you know, what used to feel like big pieces of steel feels, you know, on an Electron scale feels like very small species pieces of steel now. So to, to move launchpad infrastructure around on, on Electron scale is, is is really quite arbitrary for us at this at this point.
Jeff Henry
Yeah, fair enough. I'll leave it there. Thanks so much.
Operator
Thank you. Our next question comes from Trevor Walsh with Citizens. You may proceed.
Trevor Walsh
Great. Hey Peter and and Adam, thanks for taking the questions. Maybe just a follow up or pay you back on the Ghost question. Could we, is there a way we should think about the price per launch or the revenue per launch and then maybe the cost structure around those now Ghost enabled launches as compared to a Electron launch or even a haste launch? I know I think haste you're able to charge more. So just curious if as we as you do more of these Ghost capability launches, if that's going to kind of change the financial profile a little bit of those.
Adam Spice
Yeah. Look, I, I think obviously these are, these are haste missions there's happening out of the West Coast. So I think you should look at pricing to be pretty consistent with what we've been showing on haste. You know, I think overall, again, as as this type of mission becomes, you know, more, you know, strategic and important, particularly if certain elements of Golden Dome continue to proliferate the way many think that they will, you know, there'll be more demand for these types of things.
So it feels like we could be in the early phases of haste demand. I think we certainly we've seen great demand and great backlog building the last few quarters. But as that continues, you know, again, we think we're in a very enviable spot with, with regard to unique capabilities to deliver these kind of missions for the government customer. And we also think there's international opportunities as well.
So you know, if if if haste kind of behaves like other parts of the Electron portfolio where ASPs have gone up pretty significantly over the years. You know, we could be looking at the same kind of opportunity for for haste across both our our Virginia pad, the new pads in in in Alaska and then of course you know, even opportunities from New Zealand.
Trevor Walsh
Great, thanks. Perfect Adam. And then maybe one quick follow up semi related for the new Kodiak site, is there going to be a step up in CapEx kind of associated with that that's maybe not already accounted for? How should we think about that in terms of the comments you've made around CapEx kind of for the balance of the year? Thanks.
Adam Spice
Yeah, no, there's there's some CapEx required for that. But again, as Pete was mentioning, you know in the context of what we've been dealing with the Neutron, it's relatively in the noise and the contracts that we that we engage with have some CapEx funding in them. So yes, they'll show up in a CapEx increase, but they're funded under under that under that agreement to a large part.
Trevor Walsh
Got it. Great. Thanks Paul. Appreciate the questions.
Operator
Thank you. Our next question comes from Edison Yu with Deutsche Bank. You may proceed.
Edison Yu
Hi, good afternoon. Thanks for for taking our questions. Want to come back on on Iridium and I'm curious, I know you mentioned it, it technically it can run until you know, mid mid twenty 30s. But how are you thinking about the timing and sort of the, the potential synergies you might have with the next Gen. constellation? And and then obviously the landscape is going to change a lot by by 2035. So is is the idea to to actually deploy the next Gen. consolation sooner?
Sir Peter Beck
Yeah, Hey Edison. So you're right in the fact that the landscape for direct to mobile and to, you know, services from Internet from space is going to change a lot. But one of the really nice things that we liked about. About the, the Iridium kind of business model is, you know, these are L bands. So you know, rain and weather penetrating indoors penetrating spectrum because not all spectrum is, is the same as as I'm sure you're aware and just the, the, the safety critical and stickiness of the, the current applications.
So, so I guess I'm, I'm less concerned about, you know, I'm happy to let the larger players fight over, you know, some, some of those, you know, Internet space type markets. Meanwhile, we think what Iridium has with in particular with the Alban spectrum is, is very important today, but actually going to be more important in the future. So I, I guess I'm, you know, the, the landscape for me doesn't look, doesn't look vastly different.
And I think it's it's also too early to to pontificate about, you know, a new constellation. Now clearly the whole point of of this is that, you know, we are a self launching machine now. So there will be a constellation, but I don't think we're ready to talk about exactly what that's going to be, right just this early.
Edison Yu
I understand. I understand separate topic you obviously. Won several pretty big satellite wars, you know, satellite you have the, you know the the Geo award maybe it's for Adam. Any, any sense on the, the timing of the of the ramp of these contracts? Are these fairly linear or, or are these going to be a bit more lumpy? Thank you.
Adam Spice
Yeah, No, I think our contracts, again on the government side are pretty typical. I mean, these programs are ones that last for called four years and the kind of 10404010 kind of curve is still looking to be approximately right. Each program is a little bit different, but I think that's a good way to model it going forward.
Edison Yu
Great, Thank you.
Operator
Thank you. Our next question comes from Jan Engelbrecht with Baird. You may proceed.
Jan Engelbrecht
Good afternoon, Peter, Adam, Congrats. Another set of great results. I think I'll start with the spacecraft component supply chain as a whole. Just obviously you guys benefit internally just given your vertical integration, but as other, other, other companies and, and customers of yours start to try and ramp up their their satellite constellations And you just look at some of these components, reaction wheels, laser terminals, solar panels, thrusters.
Where do you guys sort of see the biggest opportunity across those components? And what's the capacity like looking at your factories today versus over the next couple of years as loans cadence picks up and as more satellites go into orbit? Thank you.
Sir Peter Beck
You know, thanks to the question because I think, I think people think of launch is a, is a big Moat and launch, yes, launch is a really, really big Moat, but equally well spacecraft components is a big Moat. Because if, if you, if you just turn up in the industry and say, I want 1000 reaction wheels, then your chances of getting them are almost 0. And, you know, unless you come to perhaps us.
So I think we've built a, you know, a decent sense of scale within, you know, all of the components businesses. But I've, I very much look at it as a motion. I think probably when you know, some of the analysts that have been on with us here for a long time, when we first announced like a, you know, an old, you know, solar company in Albuquerque, you were thinking what, what on earth has peed on?
But but you can see now that we've, you know, we've scaled that to being the largest space grade solar manufacturer in the world and every single satellite needs solar and tremendous amounts of it. So I think, you know, I think the, the, the components, you know, element continues to grow year after year and you know, as more constellations and more spacecraft coming to production that only continues to grow for us.
Adam Spice
Yeah. And I would add to that, that being a components, you know, provider on a merchant level is interesting. It's a growing business for us that you know that most of those products have very nice margins associated with them. It's more strategic than that for us because really what we do is, you know, we're looking to, you know, as as you look at the strong backlog growth that we had on the program side of things, that's really enabled to a large part because we're able to eliminate margin stacking and just be that much more competitive and going after these large strategic programs.
So, you know, the ability to basically take advantage of the scale as a merchant provider and then further use that internally to be more competitive on on these large, you know, bigger programs as you've seen us be successful in closing on. That's really kind of where the magic all comes together. It's more than just kind of playing in a, in a healthy merchant component markets really about kind of feeding and enabling this much more strategic capability building part of our platforms business.
Jan Engelbrecht
Perfect. Thanks, Peter. Thanks. A quick follow up if I may. Just returning to the haste contract, the $266 million contract. Are you guys sort of going to break out the cost between sort of launch and you know actually building, building the pad? Because I think if you just look at the 18 launches, then it implies sort of a $50 million sort of ASP, which I don't think is potentially correct maybe.
Some launch infrastructure that's being funded as part of the contract, but maybe just on haste as a whole. On ASPs and then just sort of how we what's the negotiations looking with commercial customers because I think in in May you guys booked your your first contract with with Andrew, but what's sort of the follow on what's that look like on haste for commercial customers specifically? Thank you.
Adam Spice
Yeah, so on, you're absolutely right. There is a bunch of stuff that's mixed into that. The overall $266 million contract value I mentioned earlier, I think the question was asked, there is some funding in there for infrastructure. So I mean obviously this these, these, these launches will come through, you know, when we recognize the revenue based on you know, the standalone price for those launches, they'll be separate revenue with regards to continuing operations and so forth.
And of course the the infrastructure build out will show up in incremental CapEx spend and then depreciation amortization. So I would say overall, nothing that you see in that contract will change the way that the, the margin profile of that haste business, which is actually coming along, you know, quite nicely if you look in the overall scheme of kind of electron and haste. So, yeah, I don't, I don't see any, any difference there.
And on the commercial side of haste, you know, maybe Pete, you want to speak to that, you know, certainly seeing more interest and you know, as as some of the, the, you know, these large defense programs come to fruition. You know, haste has really proven itself as the as the, the go to solution there. So, yeah, plenty, plenty of interest in conversations and, and, and stuff going on there.
Jan Engelbrecht
Perfect. Thank you. I appreciate it.
Operator
Thank you. Our next question goes from Eric Rasmussen with Stifel. You may proceed.
Eric Rasmussen
Yeah, thanks. Maybe my first on Iridium. I know still early days. You outlined a few targeted markets. Initially they're looking to go after the narrow band IO T services, but at what point or would would there be an opportunity maybe to look at the broadband layer? And if so, what would what would that entail if if that's a route that you wanted to go down?
Sir Peter Beck
Yeah. Hey, Eric. I mean it's the wrong kind of spectrum for a broadband. I mean, the, the L band spectrum has, has very unique advantages to it than some of the more broadband spectrum. And you know, I've learned to never say never, but I think, you know, the, the, the two most wealthiest people in the world are going after that. And that's, that's quite a challenge to go and compete.
But, but you know, we, we see, we see value in, in other places. You know, we're, you know, you, you could have the most amount of S band spectrum you want and the most amount of satellites you want, But if you don't have an L band spectrum, there's going to be certain things that you just can't do.
Eric Rasmussen
Got you. OK. And then maybe just, Adam, you talked about Monarch gross margins being pressured initially. Where are the margins today in that business and, and what's the target margin profile And, and when you think you might get to that framework, you know, that time frame to get to that target profile?
Adam Spice
Yeah, look, I think the the gross margins for for Menard coming out of the gate, they're always going to be a little bit lower. I mean, I think that as, as people know, you know, that asset had some challenges, had some supply chain issues, you know, went through an insolvency process. And so we're in the process of building that back up.
I would say that, you know, if you if you think about where I can't really comic because it's been less than really 1/4 that we've owned the business. So I don't want to go into too many details on where gross margins are falling out. We're still doing some, some, some work there. But going forward, you know, we think this business, you know, will really kind of look in line with the rest of our space systems kind of merchant business may take us a few quarters to get there.
I think you may recall because you've been along on this journey for quite some time, when we acquired Salero, the margins were quite challenged, called high single digits and we were able to get that in line with our, with our overall target for the business. This won't take nearly that long. This, this is, this is 1 where, you know, we've been able to take, you know, relatively decisive action on understanding what needs to be done to get, get the margins up.
We're also facing increased volumes that business over the next several quarters. So we have a combination of revenue growth and some some cost efficiencies that are really going to get the business into into fighting shape relatively quickly.
Eric Rasmussen
Thank you.
Operator
Thank you. Our next question comes from Alex Potter with Piper Sandler. You may proceed.
Ben Johnson
Hi there. This is Ben Johnson online for Alex Potter. I guess first question is, can you guys just kind of walk through the big milestones that you view as the highest risk to getting Neutron to the pad in four? Q
Sir Peter Beck
Yeah, Hi Ben. Probably the stage testing is always the thing that that gets your adrenaline running because you have fully. Vehicles on the pad and, and you know, you're, you're igniting the engines for the first time. And I think you, you can also see for another space company that when it doesn't go well, it it really doesn't go well. So I think that that's always, you know, the last big milestone before flight.
And then, you know, depending on, on how much granular detail you want to go into, then there's, there's a, you know, even decreasing series of of kind of important milestones. But you know, once you see some stuff rolling outside that looks completely finished and and in doing tests, I think those are those are good pointers.
Ben Johnson
Great, thank you. And then my second question is on. So you previously talked about the benefits of establishing a footprint in Europe with the minority deal. What are some of the initial like green shoots you've seen? Can you elaborate on the interest you've seen from customers in Europe and is that primarily on the satellite or launch side?
Sir Peter Beck
Yeah, Europe is a really interesting market. It's typically been extremely kind of sheltered, but you know, with the kind of the, the recent geopolitical tensions, you know, the, the, all of the European nations are looking for sovereignty. And you know, a good example of more recently is Germany had had put over $40 billion in place for, for a satellite missile warning system along with other things.
And you know, typically that that would have been outsourced to other nations. So even even in that alone, you know, that's, that's an area that Rocket Lab has tremendous experience and now in capabilities. So the the challenge of of course being that, you know, Europe generally hasn't got a lot of these capabilities, so they, they sort of need a lot of help to get there.
And then, you know, on, on launch itself, you know, we'll, we'll, we'll see. But I mean, you know, clearly Europe really only has a couple of launch vehicles that are launching relatively infrequently. And you know, if you're trying to build whole constellations of, of systems, then you might need some help with launches also.
Ben Johnson
Great. Thank you.
Operator
Thank you. Our next question comes from Christine Leeway with Morgan Stanley. You may proceed.
Christine Leeway
Hey, good afternoon, everyone. I just wanted to follow up on free cash flow. Can you provide more color on the higher expected cash burn in the quarter? How much of this was driven by higher than expected Neutron development cost versus acceleration of inventory to support feature launches?
Adam Spice
Yeah, well, you've pretty much hit the nail on the head, Christine. So you know, a, a significant amount of the spend, you know, cash flow consumption, the quarter was driven by building out the subsequent tails for Neutron, right. So we're, you know, you can imagine if Pete talked earlier about the importance of getting to to rate quickly.
And so for the parts of the rocket that we think are at low risk to needing some kind of a, a change as a result of the, as the result of the, the, the result of the first Test launch later this year, hopefully that that really is kind of informing what we're building ahead on. And then I would say also in the Menarek acquisition, you know, I mentioned earlier it had some, you know, supply chain challenges and so forth.
And so we basically had to, to replenish that supply chain. And that was, that was part of the step up in the quarter as well. But we think we have that well in hand now. So that should be in a much more normal place. So it's really a combination of the Neutron tail build out plus getting Menarek kind of tucked back into shape and, and, and, and firing on all cylinders.
Christine Leeway
Great. And I'm just just following up on Neutron then with the order that you're able to receive with the ASP that you are targeting, does this seem that we should expect more acceleration of Neutron orders, especially as you get closer to the test flight? And also I just wanted to follow up on my free cash flow question earlier. How should we think about the cadence of free cash flow through the rest of the year and when you know is this 2 Q that the peak and free cash flow, free cash outflow?
Sir Peter Beck
Yeah, I'll let Pete talk to the Neutron question. Yeah, Hi Christine. I would say with Neutron we are we are being very strategic and very thoughtful about our sales there. You know we have you know as as we've we've discussed we have a 135 cadence. Hopefully we'll do a lot, lot better than that. But you know, we have commercial customers already signed, we have government customers, you know, saw, you saw NSSL nearly tripling their budget for, for NSSL launch.
So we need to make sure that we've got capacity for that customer. And as I talked before, we have got our own aspirations and needs. So, you know, I've, I've personally never seen launch so constrained in, in, in pretty much ever, you know, other launch providers are backing off and focusing on their, their own needs as well. So the you know. The, the amount of launch that's left in the in, in the industry is, is really, really tight.
So you know, for us it's, it's, it's being very thoughtful about which which customers we sign up to at this point on going forward.
Adam Spice
And then coming back to the free cash flow question, you know, it's, it's, it's still a very much a function of the timing of the, of the, the first successful test launch of Neutron, right. We've been pretty consistent in pointing towards, you know, that will be the real turning point where we go to just give it a positivity in the quarter after that that event happens.
But then we've also been pretty clear that, you know, it's going to probably be 18 to 24 months after that pivot that we get to cash flow positivity because we'll have to continue to invest in a fleet of tails to build out for, for Neutron. So I think that's really I'd say those are kind of the the two most driving factors.
Now, of course, you know, pending the closing of the Iridium acquisition, you know, the table gets reset pretty significantly, right. So as we've talked about that, that that business generates pretty significant free cash flow. So I think, you know, we'll we'll have a lot of things to update folks on once we get closer to the timing of that of closing that deal. But on a stand alone kind of rocket LED basis, it really is driven by by the Neutron test timing.
Christine Leeway
Great. Thank you guys.
Operator
Thank you. Our next question comes from Ryan Koontz with Needham and company. You may proceed.
Ryan Koontz
Great, thanks. Question for you, Adam, on Space Systems in terms of any kind of color on product mix you have for us there in the June quarter as well as kind of how we think about you know, tranche 2 and tranche 3 timing in the in the second-half? And then maybe reflect on the gross margin mix up apart from my narc, that'd be great. Thank you.
Adam Spice
Yeah, Jeff. So you know, mixes is always difficult to kind of predict too far in advance. We have, you know, turns businesses plus we have these programmatics, you know, satellite platform businesses. You know, I would say that, you know, there was a little bit less of the, I would say the more mature merchant products within the mix in in kind of I would say a little bit in Q2 and actually point towards some of the weakness in margin in Q3.
You know, we have a pretty wide range of margins in our space systems business. We have, you know, some components solutions such as solar that are always going to be more towards the lower end call that in the, you know, kind of the 30s. And then if you look towards some of the product areas, they can be more kind of north of 70 points of gross margin. So they're pretty big spread there within the portfolio.
And then again towards the lower end in the mix, but greater in the magnitude of the composition is really the the satellite platforms business. And you mentioned you know the biggest pieces of our backlog today are for STA Tranche 2 and Tranche 3. And again those are more and you kind of been in the in the mid 30s, right. So I think right now it's that each quarter is going to be driven really by kind of the mix of how much of that higher end component portfolio ships versus how much we have in these programmatic programs which you know those are relatively straightforward to model.
But what you can't model as much as again is the components part of the business. Really helpful. Thank you.
Operator
Thank you. Our next question comes from Gautam Khanna with TD Securities. You may proceed.
Gautam Khanna
Yes, good afternoon. Thanks for taking my question. I was curious on the demand side for Neutron. Do you still expect kind of a surge of orders once the first step might go successfully? And I was curious also just given your large competitor is, you know, launching a much larger vehicle, does that give you any concern on industry capacity maybe 3 or 4 years from now and the demand for Nephron if you just comment on that? Thank you.
Sir Peter Beck
Yeah, sure. Thanks very much. Good question. So I think pre test flight, post test flight, you know, I, I would say that Neutron demand is, is just not concern. Now naturally I think everybody will, will be more comfortable with, with buying neutrons post test flight. But we've had absolutely 0 issues in selling, you know, full price neutrons pretest flights. So I don't, I don't, I don't see that that making a huge, you know, a huge difference
now with respect to, you know, launch capacity going forward. I don't want to sound too negative here, but I don't see that changing anytime soon either. Because even as you know, new capacity comes on on market from some competitors, you know, a lot of that capacity is already spoken for for their own internal programs, whether it be internets or, you know, AI data centers or whatever. Like it's, you know, fair chunk of that capacity is, is already spoken for.
So. I see this constrained launch market persisting for quite some time.
Gautam Khanna
Thank you.
Operator
Thank you. Our next question. Comes from Andre Madrid with BTIG. You may proceed.
Ned Morgan
Hey, thanks for taking the question. This is Ned Morgan on for Andre. I was just wondering could we get an update on the Mars telecommunications orbiter program? You know, just wondering how well you guys are positioned to win there and, and how we should think about timing and contribution.
Sir Peter Beck
Yeah, thanks, Ned. I'd like an update too. So we're, we're we're waiting for, you know, Vanessa to go through their procurement process. So, you know, hopefully, you know, it'd be great to hear this month or thereabouts, but I think I think we're positioned well. You know, there's, there's very few folks that can demonstrate the the level of capability and, and experience that we have. So we we feel strongly positioned. But yeah, we just have to unfortunately wait for for NASA to work through the procurement process.
Ned Morgan
Got it. Thank you. And a follow up, you know, after the successful launch of Neutron, how soon should we expect to see the NSSL task orders come through? I saw the upsized contract,
Sir Peter Beck
yeah, that that's, that's sort of out of out of control as well. You know, I would say that you've seen them add a whole bunch more, you know resources into that that contract vehicle. So they have sort of set periods where they release those contracts. But I think, you know, the government along with others are hotly anticipating neutrons arrival for sure.
Ned Morgan
Thank you.
Operator
Thank you. Our next question comes from Michael Schott with Key Banc Capital Markets E Maple Market.
Michael Schott
Hey, good afternoon. I wanted to ask maybe bigger picture are are you in in conversation with customers about potential orbital data center opportunities, you know whether that's as emergent merchant supplier or something else? I know higher efficiency solar panels are an important part of of generating enough power for some of these plans that are out there and you have that capacity already. Is, is data centers in space a real opportunity for for Rocket Lab or is it too early to?
Sir Peter Beck
No, I think it's a real opportunity. I guess I'm still a little bit cautious on the scale in which they may be a thing. You've certainly seen us release new solar cells that are specifically targeted to, to that kind of application. So we're, we're taking in the opportunity seriously. And you know, there's obviously we're, there's a, there's a lot of folks that are looking at that fairly deeply.
So I think, you know, if they turn out to be a real thing, I think we'll be pretty deeply entrenched and, and you know, well positioned to to capitalize it. Is Rocket Lab going out and, and going to build a whole lot of all data centers? Well, I think not, not yet, that's for sure.
Michael Schott
OK, great. And then just on M&A, do you still expect to be pretty active there going forward post Iridium? And if so, are there any specific parts of the business you're targeting? Is that still Space Systems primarily or any updated thoughts on the M&A pipeline? Thank you.
Sir Peter Beck
Yeah, I mean, I think it's likely that you'll see some some tuck insurance from us. I think is they is is you know, the right things come along will always be active. But I would encourage everybody to think of Iridium is not the end point from applications play. I think it's it's really the starting point. We don't want to be known as like the, the, you know, the L band tricky communications company.
We, you know, we, we, our intentions are much more grander than that. But what it does do is it shows an ability for us to go and, and, you know, bite off a big piece and, and also use, you know, in time we'll be able to demonstrate using the full machine where we can build our own satellites and launch them and, and be a, you know, s s licking ice cream. So, so I think so I think, yeah, people should not assume that that Iridium is is A1 and done.
Michael Schott
Great, thanks so much.
Operator
Thank you. Our next question comes from Suji De Silva with Roth Capital. You may proceed.
Suji De Silva
Hi Pete, Hi Adam, Congrats on the progress. Sorry for bringing it back Windows here just you know out of this point or Pete, the Electron order customer base is very, very comfortable ordering. I'm wondering when in the 135 Neutron sequence do you think customers get to that? I mean, I don't know if it's just with the first launch, but any clearly I have customers that are ahead of that pre ordering, but you know, when in the sequence it doesn't start to feel more normal in terms of ordering and comfort.
Sir Peter Beck
Hey, Sergi. It, it almost feels like that now to be honest with you. As I mentioned before, we, we, we have a very limited supply of neutrons coming out the gate and we have to be very, very careful with where we put those. Yep. So, so I think, I think you know the demand. For the vehicle is is is already you know very high so I don't know they might feel differently, but it doesn't it doesn't it doesn't feel like we're million miles away from there already
Adam Spice
Yeah, actually I'm I'm I'm actually pleasantly surprised kind of where we are in the cycle right now. I mean to have the kind of backlog that we have on Neutron for a vehicle that's not flown yet, I think that shows a pretty strong endorsement. It's certainly I think the market is saying it's from the customer perspective is is not saying if it's more when.
And I think, you know, Pete's been pretty clear. I think, you know, through the communications today and earlier that, you know, a significant portion of Neutron down the road is going to be used to service our own our own demand, right. So I think we also being very mindful that we don't want to sell all of the capacity out for many, many years forward, you know, kind of without taking into consideration what we what we need to do, not only for, you know, radiums needs, but as Pete said, this is the first step of many for us in the applications vein.
So we need to make sure that we were really leveraging Neutron to its greatest strategic extent, which you know, it's it's going to be a great vehicle for the market. It's going to be great for adding more capacity and in a capacity constrained market. But this is going to be an incredible strategic enabler for us. And so we want to make sure we don't squander that opportunity and give too much of that capacity way too early to other people.
Suji De Silva
Got it, great. No, it makes sense customers have confidence in your execution given your history then. And then the other question, Pete is on flat Alight. I'm just curious, can you remind us the unique features of flat Alight and where and Congrats on that government win is, you know, opportunities there outside of government commercial or just how to think about flat Alight as a market opportunity for you? Thanks, Ajit for asking that question because it's, it's actually,
Sir Peter Beck
I mean this this last quarter, I think there's 22 kind of really big takeaways. One, when we now also build Geo satellites. And I know that the Geo market is, is, you know, not particularly an exciting market as it compared to what it used to be, but actually it's a very, very unique capability. So to be able to build low earth orbit satellites, Mars satellites, Geo satellites and then, you know, have our first flat alight order.
I think is shows a a real breadth of skill and ability and capability. But you know, the flat light is is designed as a high cadence, you know, large number of satellites per launch vehicle constellation builder. And I'm just, I'm just so thrilled that, you know, their first customer for that is, is actually a really important U.S. government program.
It really speaks to the, you know, the confidence that the customer has after doing the due diligence of of everybody in in, you know, in that flat alike product. And you know that flat alike product, you know, once once we start building them for that customer, you know, that is a is a huge advantage for, you know, for commercial customers as well who want that kind of thing.
But you know, candidly for us as well, I mean, most of the stuff that I see in the future that Rocket Lab will do for itself will be built on the back of a flat alight platform.
Suji De Silva
Thanks, That's helpful Pete. Thanks.
Operator
Thank you. And this concludes the conference. Thank you for your participation. You may now disconnect.
Details at Rocket Lab IR
Tips: The content presented above were generated by AI language model with publicly available information and auto-generated subtitles from third-party. The above material does not represent the position of Futu and shall not constitute any investment advice. Futu makes no express or implied warranties or representations regarding the accuracy, timeliness, or completeness of the information shown in the above content.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
Comments (362)
to post a comment
76
12