Rocket Lab's shares slid in after-hours trading on Monday even as the company posted record quarterly revenue and a record backlog. A wider-than-expected loss per share and third-quarter margin guidance below Street forecasts came alongside a batch of expansion announcements, including a new German subsidiary and a planned Iridium Communications acquisition.
Rocket Lab shares fell 7% in after-hours trading, extending a 3% decline during Monday's regular session. The drop came after the company released second-quarter results that beat on revenue but missed on profitability and third-quarter margin guidance.
Revenue beats, margins disappoint
The company posted sales of $234 million, a 62% jump from a year earlier and slightly above expectations. Yet the company posted a per-share loss of 8 cents, steeper than the 6 cents analysts had expected.
Guidance delivered the bigger blow. Management projected an adjusted loss before interest, taxes, depreciation and amortization of between $17 million and $23 million, versus Wall Street's expected $10 million loss.
According to Investing.com, the company's forward gross margin guidance of 29%-31% for the third quarter came in well below the Street's average expectation of around 37.6%, as a growing mix of lower-margin satellite platform sales weighed on the outlook. Still, the company guided to year-over-year revenue growth of as much as 83% for the current quarter.
That pullback also followed a sharp run-up: shares had gained roughly 29% over the prior two weeks, fueled by Space Force contract wins and an analyst upgrade from KGI Securities, leaving the stock stretched heading into the print.
European expansion and an Iridium deal
Rocket Lab detailed plans to expand its reach in Europe through a newly established German subsidiary that aims to provide sovereign space capabilities to the region. The subsidiary builds on the company's recent acquisition of Munich-based laser optical-communications provider Mynaric. Rocket Lab also plans to buy Iridium Communications to bolster its space-systems business, in a deal announced in June.
According to MarketWatch: "The demand for sovereign space capability has never been more urgent", Rocket Lab CEO Peter Beck said in a statement.
Rocket Lab also said it now has a deal to operate a mission for Kepler Communications using its Neutron rocket, adding to what the company called a record backlog of $2.36 billion at the end of June. Beck said the company had added more than $1 billion in new deals since then, assuming options on some contracts are fully executed.
Neutron timeline holds steady
The company gave an update on Neutron, its long-awaited and delayed rocket, which it said remains on target to be delivered to the launch pad in the fourth quarter of 2026. During a call with investors, Beck noted that the window for a launch before the year ends is narrowing and emphasized the company's focus on caution over rushing the rocket's maiden test.
Sources: MarketWatch, Investing.com
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