Rocket Lab (NASDAQ:RKLB) reported fourth quarter and full-year 2025 results that management said reflected “relentless execution” across both launch services and space systems. The company posted record annual revenue of $602 million, up 38% year over year, and a record fourth quarter with revenue of $180 million, up 36% from the prior-year period.
Founder and CEO Sir Peter Beck highlighted record backlog of $1.85 billion at the end of Q4, up 73% from the same time in 2024. Rocket Lab also delivered record gross margins in the quarter, with GAAP gross margin of 38% and non-GAAP gross margin of 44%.
Launch performance: Electron and HASTE
In hypersonics, Rocket Lab conducted three successful HASTE missions in 2025 and said another mission was “on the pad in Virginia” and days away from launch. Beck said cadence and reliability position the company for programs such as “Golden Dome,” while noting additional HASTE missions are scheduled this year.
On demand, management said Rocket Lab added more than 30 new launches to its manifest across Electron and HASTE during 2025 from a “diversified customer base” including U.S. national security and defense, commercial constellations, and international organizations. In Q4, the company signed a multi-launch agreement with BlackSky for four launches, bringing BlackSky’s total booked missions with Rocket Lab to 17, and also signed with a new confidential national security customer.
Space systems: SDA contract, Mars mission progress, and new solar offering
Rocket Lab’s space systems update was led by a major contract win. In Q4, the Space Development Agency awarded Rocket Lab an $816 million contract to build 18 spacecraft for Tranche 3 of the Tracking Layer, equipped with missile warning, tracking, and defense sensors. Beck called it the largest single contract in Rocket Lab’s history and said the Geost acquisition played a “significant role” in securing the award, emphasizing Rocket Lab’s in-house ability to produce both spacecraft and payloads for the program.
Management also discussed potential additional subsystem opportunities tied to Tranche 3, estimating an incremental “total capture value” that could bring the opportunity to approximately $1 billion if Rocket Lab supplies items such as payloads, solar power, reaction wheels, star trackers, and software. With this Tracking Layer award and its earlier SDA Transport Layer Beta Tranche 2 prime contract, Rocket Lab said it now has more than $1.3 billion in signed SDA contracts.
On deep-space work, Rocket Lab said the ESCAPADE mission launched in Q4, with two satellites built for NASA and UC Berkeley now commissioned and in a loiter trajectory near L2. Beck said Rocket Lab expects to hand over its primary role to UC Berkeley “next month,” with spacecraft arrival in Mars orbit targeted for September next year. He also reiterated Rocket Lab’s interest in NASA’s Mars Telecommunications Orbiter program, describing the company as a “strongest contender” based on vertically integrated mission capability and Mars mission experience.
Rocket Lab also said LOXSAT—described as a “launch plus spacecraft” mission to build and deploy an on-orbit cryogenic fuel depot for NASA—has a completed spacecraft and is progressing toward launch later this year.
In product development, Beck announced a “space-optimized silicon solar” array offering, along with a hybrid array approach combining high-efficiency cells and silicon cells. He framed the development as addressing growing satellite demand and potential future applications such as space-based data centers, where large-scale power generation could be required.
Acquisitions and vertical integration
Rocket Lab discussed multiple acquisitions and pending M&A. The company said it welcomed Geost in 2025 and, in Q1 2026, acquired Optical Support Inc. (OSI), a Tucson-based manufacturer of precision optical and electro-optical mechanical instruments. Beck said bringing optics in-house improves certainty around cost, schedule, and innovation for optical payloads, describing optics as “the most expensive” and “longest lead” item in “exquisite optical payloads.” Rocket Lab also announced it acquired Precision Components Limited in New Zealand, which Beck said expands machining capacity and supports scaling across launch and space systems.
On the pending Mynaric acquisition, Beck said the German government is continuing its regulatory review and Rocket Lab would provide an update when it concludes. He cautioned listeners not to “believe everything you read” in media reports about the transaction.
Neutron update: tank failure analysis and timeline shift
Rocket Lab provided detailed commentary on Neutron development, including an update on a stage one tank rupture during hydrostatic pressure testing in January. Beck said the failure occurred while pushing beyond anticipated flight loads to understand structural margins. A post-test review identified a manufacturing defect at a critical joint around the tank closeout, and Beck said the first tank had been hand-laid by a third-party contractor while Rocket Lab commissioned an automated fiber placement (AFP) machine.
Beck said the next tank is already in production on the AFP machine, “completely eliminating” the possibility of the same hand-lay defect recurring, and the company is also making minor design changes to add margin and improve manufacturability. Management said it would conduct an extensive test and qualification campaign and prioritize reliability, even if it “means taking a few extra months.” As a result, Rocket Lab moved Neutron’s first launch target to Q4 2026.
Beck also cited qualification progress on Neutron’s fairing (“Hungry Hippo”), thrust structure, and interstage, and said stage two has passed qualification and is entering final integration. Archimedes engine testing, Beck said, is focused on rigorous “edge case” scenarios to build reliability.
Financial results, cash, and Q1 2026 guidance
CFO Adam Spice said Q4 revenue came in at the high end of prior guidance and rose 16% sequentially. Space Systems revenue was $103.8 million in Q4, down 9.1% sequentially, which Spice attributed primarily to satellite platforms and solar business revenue recognition timing under ASC 606 and subcontractor progress. Launch Services revenue was $75.9 million, up 85% sequentially, driven by the increase from four to seven launches in the quarter, including one HASTE mission.
Spice said sequential gross margin improvement reflected higher Electron fixed cost absorption from increased launch cadence and increased contribution from higher-margin space systems component businesses. For the full year, GAAP gross margin was 34.4% and non-GAAP gross margin was 39.7%.
Backlog totaled approximately $1.85 billion, up 69% sequentially, driven primarily by the Tranche 3 award. Spice said launch backlog represents about 26% and space systems about 74%, and Rocket Lab expects about 37% of backlog to convert into revenue within the next 12 months, including “preliminary” Tranche 3 conversion estimates that he said may prove conservative.
Operating expenses in Q4 were below guidance ranges, with GAAP operating expenses of $119.3 million and non-GAAP operating expenses of $104.5 million. Spice said sequential expense increases were primarily tied to Neutron prototype and headcount-related spending, including Archimedes testing and mechanical/composite structure test and integration work. Total headcount ended Q4 at 2,645.
Rocket Lab reported GAAP EPS of a loss of $0.09 per share for Q4, compared with a loss of $0.03 per share in Q3, with Spice attributing the sequential change largely to a $41 million tax benefit recorded in Q3 tied to deferred tax accounting from the Geost acquisition. Operating cash flow was a use of $64.5 million in Q4, compared to $23.5 million in Q3, driven largely by timing of employee equity program-related tax payments. Non-GAAP free cash flow was a use of $114.2 million.
Liquidity totaled approximately $1.1 billion at quarter end. Spice said the company generated $280.6 million in Q4 via its at-the-market equity program, intended to support acquisitions (including Mynaric, OSI, and Precision Components) and general corporate needs. Adjusted EBITDA loss for Q4 was $17.4 million, better than the company’s guided loss range of $23 million to $29 million.
For Q1 2026, Rocket Lab guided revenue of $185 million to $200 million, GAAP gross margin of 34% to 36%, and non-GAAP gross margin of 39% to 41%, with Spice citing a shift toward space systems mix and weaker margin mix within the segment. The company guided GAAP operating expenses of $120 million to $126 million and non-GAAP operating expenses of $106 million to $112 million, reflecting continued Neutron development spending. Spice said he expects Q1 to mark “peak Neutron R&D spending,” with a shift later in 2026 toward Flight Two inventory. Rocket Lab guided adjusted EBITDA loss of $21 million to $27 million and said it expects negative non-GAAP free cash flow to remain elevated due to investment in Neutron development and scaling production.
About Rocket Lab (NASDAQ:RKLB)
Rocket Lab is an aerospace company that provides launch services, spacecraft, and space systems for commercial and government customers. The company’s primary launch vehicle is Electron, a small-lift orbital rocket designed to deploy small satellites and rideshare payloads to low Earth orbit. Rocket Lab also develops and manufactures the Rutherford engine, noted for its electric-pump-fed design and additive-manufactured components, which powers Electron and supports the company’s propulsion capabilities.
