NATIONAL HARBOR, Md. — Rocket Lab says lockdowns in New Zealand caused by the latest surge of the coronavirus pandemic will postpone launches to at least October and cut its projected revenues for the year.
In a Sept. 8 earnings call, the first since the company went public through a merger with a special-purpose acquisition company (SPAC), company executives said they did not anticipate performing their next Electron launch before the end of September because of restrictions in New Zealand caused by the delta variant of the pandemic.
“Operations have experienced disruptions due to some of the most restrictive COVID-19 measures globally, including current stay-at-home orders which prevent launch operations from taking place,” said Peter Beck, chief executive of Rocket Lab, of New Zealand’s current restrictions. “Indications are that the current lockdown restrictions may ease by the end of September with the delta cases dropping in New Zealand, but this, of course, is subject to change.”
Those restrictions have delayed plans by Rocket Lab to perform three dedicated Electron launches of BlackSky satellites that had been scheduled to begin in late August. It could also affect the launch of NASA’s CAPSTONE lunar cubesat, which had been scheduled for no earlier than late October on another Electron from Launch Complex 1 in New Zealand.
Adam Spice, chief financial officer, said that the company has five Electron launches manifested for the fourth quarter of the year, but is assuming only two launches in its financial projections. While those five launches would produce more than $40 million in revenue, the company is forecasting only $17-20 million in revenue for the fourth quarter.
“We’re certainly not throwing in the towel on Q4 and supporting as many of those five launches that we have on the manifest as we can,” he added. “It’s just a matter of being prudent and conservative with regards to forecasting for the financial community what we’re willing to sign up for.”
The pandemic, both added, is not affecting future sales. “The pipeline does continue to expand and we continue to see growth,” Beck said.
Rocket Lab, which recorded $29.5 million in revenue in the first half of 2021 and a net loss of $32.5 million, is forecasting full year revenue of $50-54 million. That includes just $4-5 million in the third quarter because of a lack of further launch activity.
Those revenue totals include a significant increase from its launch business, from $8.5 million in the first half of 2020 to $24.1 million in the first half of 2021. Beck and Spice both said they are not seeing pressure to lower launch prices even as new vehicles enter the market.
“Our customers value a couple of things more than anything else: they value reliability of the launch vehicle and the schedule, and a proven service,” Beck said. “We haven’t seen pricing eroded. Customers understand the value a reliable, dedicated small launch vehicle provides.”
Spice noted he joined the company in 2018. “The pricing that we were talking about in that point in time was considerably lower than it is today,” he said. “Pricing has actually gone up for us.”