Overview
Since the Report − 27.0%
Revenue grew 62.0% year over year, EPS missed the estimate by 4.6%; the stock fell 6.8% in its first reaction.
- RevenueQ2
- $234.1M
- ▲ 62% YoY
- Gross ProfitGAAP
- $84.6M
- ▲ 82% YoY
Verdict
BUYRocket Lab grew Q2 revenue 62% to a record $234.1 million; backlog rose 137% to $2.36 billion, and the Iridium deal turns it into a vertically integrated space power. The stock still fell roughly 7% after hours: acquisition costs pushed EPS below expectations, alongside $110 million of cash burn and soft gross-margin guidance. From here, the focus shifts to Neutron reaching the launch pad in the fourth quarter and the timeline for turning profitable.
Close on Report DayAug 10
$80.04▼ 6.8%Report-Day Move
- Market Cap(Today)
- ≈ $35.0 B
- 1Y Return(At Report)
- + 79%
- Net Margin(Trailing 12M)
- − 21.5%
Earnings Summary
In 30 Seconds- Revenue grew 62% year-over-year to $234.1 million, and backlog rose 137% to a record $2.36 billion.
- Space Systems drove the growth, with segment revenue up 94% year-over-year while Launch Services slipped 4%.
- The stock fell about 7% after hours as acquisition costs widened the loss and the company guided to lower margins.
The Numbers
GAAP EPS
−$0.08
~5% Below Estimate
Backlog
$2.36B
▲ 137% YoY
Cash & Equivalents
$2.13B
Strong Liquidity
Stock Reaction
▼ ~7%
After Hours
Quarterly Revenue ($ Million)
145
Q2 25 · $145 M
155
Q3 25 · $155 M · QoQ + 7.3%
180
Q4 25 · $180 M · QoQ + 16.1%
200
Q1 26 · $200 M · QoQ + 11.2%
234
Q2 26 · $234 M · QoQ + 17.0% · YoY + 62.0%
250–265
Q3 26E · 250–265 · QoQ + 10.0% · YoY + 66.1%
- Q2 25
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26E
Q3 2026 Company Guidance
- Revenue250 – 265 million250 million265 million
Midpoint $257.5MRecord Guidance ▲
- Gross Margin (GAAP)29% – 31%29%31%
Q2 Actual 36.1%Sequential Decline ▼
- Operating Expenses (GAAP)143 – 149 million143 million149 million
Neutron-WeightedInvestment Continues
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±3.8% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Space Systems$189 MShare 81.0%▲ 93.6% YoY
- Launch Services$44.6 MShare 19.0%▼ 4.4% YoY
Key Metrics
Adjusted EBITDA
− $8.83 M
Press Release
Non-GAAP Gross Margin
41.5%
Press Release
Operating Cash Flow (First Half)
− $134 M
10-Q
Shares are computed over the segment total: $234 M. Source: 10-Q.
Metrics come only from the company's own filings; each one names the document it was taken from.
“Q2 was another fantastic quarter for Rocket Lab, highlighted by record results and massive momentum that has continued well after the close.”
- Record Quarterly Revenue
- Strong Post-Close Momentum
- Vertical Integration with Iridium
Summary and Review
Summary
Rocket Lab reported $234.1 million in revenue for the second quarter. That is a 62% jump year-over-year and another quarterly record. The main growth engine was product revenue. That line nearly doubled — up roughly 96% — to $181.3 million, covering launch and space-systems hardware. GAAP gross profit rose to $84.6 million and gross margin reached 36.1%. Backlog hit a record $2.36 billion, up 137% year-over-year. The company closed the quarter with a strong cash position of $2.13 billion.
Despite the record revenue, the stock fell about 7% after hours to around $74.5. Investor focus shifted from growth to profitability. The GAAP loss of $0.08 per share landed slightly below expectations. The cause was $8.6 million in transaction costs from the Mynaric and Motiv acquisitions and the pending Iridium deal. Free cash flow was negative $110.1 million. Third-quarter gross margin is guided down to 29–31%. A pullback from its recent peak over the past three months sharpened the reaction.
Our read is that the quarter was operationally strong but cautious on profitability. Revenue momentum, an exploding backlog and the vertical integration from Iridium feed the long-term story. The Neutron rocket, targeted to reach the launch pad in Q4, is the major development ahead. On the other hand, deep cash burn, dilutive issuance and near-term margin pressure demand patience. We score it 'good but with a caveat'. The story is intact; the path to profitability is not yet clear.
Full Review
Product revenue is the growth engine.
The strongest part of the quarter was product revenue. That line nearly doubled — up about 96% year-over-year — to $181.3 million. It covers both launch services and the fast-growing space-systems business: satellite platforms, components and subsystems. Service revenue held at $52.7 million, roughly a quarter of the total. Growth therefore came overwhelmingly from products. Total revenue of $234.1 million edged past the ~$232 million the market expected. It also landed near the high end of the company's own guidance. On profitability, GAAP gross profit rose to $84.6 million from $46.4 million a year earlier, and gross margin reached 36.1%. Scaling the space-systems business is transforming Rocket Lab from a small-launch provider into an end-to-end space company. That shift diversifies the revenue base and increases recurring business.
Backlog hit a record.
The company's backlog surged 137% year-over-year to a record $2.36 billion. That gives strong visibility into future revenue. More than 90 missions are queued on the launch side alone. New launch contracts signed during and after the quarter reached $437 million. The company also noted more than $1 billion in additional orders booked early in the third quarter. This order momentum reflects two things: sustained demand for the Electron small launch vehicle and growth on the space-systems side. How quickly the backlog converts into revenue will be the key gauge of how sustainable growth is over the coming quarters. The record backlog is an important counterweight to near-term profitability concerns.
Profitability and cash burn are the main caveat.
Despite the record revenue, the weak spot was the bottom line. The GAAP loss of $0.08 per share came in slightly below expectations. The cause was $8.6 million in transaction costs tied to the Mynaric and Motiv acquisitions and the pending Iridium deal. More critically, free cash flow was negative $110.1 million in the quarter. The company is in a heavy investment phase and is allocating capital largely to the Neutron program. Third-quarter GAAP gross margin is guided to 29–31%, below the 36.1% posted in the second quarter. The cash need was met largely through ATM share issuance; those raises reached $1.53 billion and took the share count to roughly 598 million. The quarter still closed with $2.13 billion of cash. Faced with that picture, the market repriced the timeline for the shift from growth to profitability.
Neutron and Iridium will define the future.
Rocket Lab's medium-lift Neutron rocket remains the biggest driver in the story. The company said it has completed more than 400 engine hotfire tests. It is targeting delivery of the first-stage tank to the launch pad in the fourth quarter. Neutron offers a payload capacity that could compete with SpaceX's Falcon 9, opening the company to a far larger market. The decision to acquire Iridium Communications is a strategic inflection point. The combined entity aims to create a self-launching, vertically integrated tier-1 space power. Voice, data and positioning services would sit under one roof. Both developments expand the long-term potential. In the near term, possible delays in Neutron's first flight and integration of the acquisition are the risks. Watch two lines next quarter: Neutron's first-flight timeline and whether GAAP gross margin recovers from the 29–31% band.
Looking Ahead
Strengths and Risks
5 Strengths · 5 RisksStrengths
5- Another record quarterly revenue at $234.1 million, up 62% year-over-year
- Backlog up 137% to $2.36 billion, with more than 90 launch missions queued
- Strong $2.13 billion cash position funds the Neutron investment
- The Iridium acquisition turns the company into a vertically integrated, self-launching space power
- Product revenue nearly doubled, up roughly 96% year-over-year
Risks
5- Free cash flow was negative $110.1 million in the quarterCash burn continues
- Q3 GAAP gross-margin guidance of 29–31% is below the 36.1% posted in Q2
- ATM share issuance dilutes existing shareholders (share count ~598 million)
- EPS came in below expectations on acquisition costsThe path to profitability is unclear
- Neutron's first launch has yet to happenA possible delay could strain the story
What to Watch
4- Neutron first-stage tank targeted for delivery to the launch pad in Q4
- Q3 earnings expected around November 2026
- Closing of the Iridium acquisition and integration steps
- Neutron first-flight preparations after 400+ hotfire tests
Upcoming Earnings
To Understand This