Full Interview with Rocket Lab’s Sir Peter Beck and Adam Spice (Q1 2025)

Today we have a new interview with Sir Peter Beck and Adam Spice of Rocket Lab. We're going to ask you guys some questions about the Q1 earnings and some questions that the retail investors might want to have answers for. We want to congratulate you on a fantastic quarter which we felt it was and yeah, let's shoot away with the questions. So the first question that I wanted to ask, it feels like on the Neutron you guys have sold the next three slots. Two was for a confidential customer and one is to the US Air Force. And do you know when you're going to be flying your own satellite on Neutron and what goes into the, you know, prioritizing customers versus your own constellation?

Yeah. No. Hey, Vince. So, it's really, you know, the priority is to, you know, flesh out Neutron as a commercial launcher first, before we start flying our own stuff. Now, we'll be opportunistic. If we have spare capacity, you know, just not that dissimilar that we do with Electron. If we want to develop new hardware or get some flight heritage on some new hardware, we'll take that opportunity. But you know, we're not really at the point yet where, you know, we are assigning tails to our own stuff. Like I say, we'll always take, you know, opportunities when they come, but we're not there yet.

All right. Yeah, maybe I'll just hop in with a Neutron question then. I was going through the payload guide and I don't claim to understand the majority of it, but I did think it was pretty interesting how you had the two modules there, the upper module and the lower module, and how you could transport them separately. And just curious, I don't think I've seen that before. So, what was the decision-making on that? And like what benefits does it give you?

Yeah, so there's kind of two ways to integrate Neutron. One is that kind of horizontal module approach and, you know, we developed that for that approach. What that does is it negates the necessity for a vertical stacking tower. And really that's just a capex decision. So in the ideal kind of full flow, high cadence rate, we always said that we never want to break over the rocket. So literally the rocket will come off the barge, get transported back to the launch site and then there's a kind of a gantry tower building that rolls over the rocket and can integrate and, you know, the second stage, you know, satellites and stack the second stage and satellite stack all in one unit and drop it into the hungry hippo and close it and then go. So the rocket never ever, you know, never ever ceases from being vertical. But obviously a big rollover tower integration building is a fairly, you know, fairly expensive capital item and for the, you know, for the initial launches we just do that by breaking off the module and shipping the module. And, you know, this kind of follows a similar approach we did with Electron, right? So we didn't go out and build two launch pads and three clean rooms and a whole bunch of facilities. We started off with, you know, one hangar, one clean room, and then, you know, as the vehicle started flying and the cadence increases, then we make those investments. Well, investments are largely paid for by the operation of the vehicle anyway. So, it's just more of a phased approach than anything else. There are some reasons why you might want to, you know, to operate to integrate in that horizontal module one configuration as well. So it just gives us also the extra flexibility to do that.

So I can chime in on that. So with the success in testing so far on the Neutron campaign, you know, the videos that you guys put out, a stage one qualification and everything, I feel like we're getting very close. You're starting to see the milestones get closer and closer to launch and I feel like we're getting to a place where a lot of these milestones are clumping up at the end. We're going to move very quickly once we get there. So, how far do you feel like we are from seeing a fully integrated Neutron at Wallops? And then how quickly would we see a wet dress rehearsal after that? Would it be imminent? And then obviously what kind of timeline once we kind of get a wet dress rehearsal, if everything goes successfully, of course. How long would it be from a wet dress to launch? Fully recognizing that obviously not everything can be successful, but I'm very optimistic of a successful.

Yeah. Yeah. Well, you just laid out, you know, the dream run, right? So, you know, if you look at all the milestones, you know, that we put up and we kind of at pains to reiterate that they're all happening concurrently. Some of them, as you point out, are very, very close to completion. Some of them are dependent on each other, a lot of them are independent on each other. And it's kind of really hard to kind of show graphically. And also, you know, we in some areas we're right at the, you know, the nitty-gritty, the end test where the big all up test. Like take stage one module for example. You know, every element, every piece of software is kind of in that and we're in this kind of, you know, all up, you know, big testing phase. So, you know, it's very tempting to say, 'Well, I'll call that done because it's like 98% done.' But, you know, until it's 100% done, it's not 100% done in our world. And then, you're right. So, as those components get integrated, you know, providing that we don't find any issues, then you move pretty quickly into a wet dress. And then if you do a wet dress and you find no issues, then you move very quickly into a launch. Now I think we should all be kind of realistic about that. I mean, you're building an integrated complex machine for the first time. You know, we all hope that there's going to be no issues, but, you know, there could easily be things that crop along the way. So, you know, we always, you know, you've heard me say many times, everything's great until it's not. And but at the moment, you know, we haven't had any kind of major project setbacks or, you know, things that have just gone super pear-shaped and we continue to track. If you look at an Electron wet dress for example, we'll wet dress the day before and then go fly. But if you look at, you know, the very first Electron, we wet dressed and it was quite some time before we actually flew because we were trying to understand the rocket and all the new systems that you stand up. So I think we're certainly better than we were when we did the Electron, but we'll, I think, you know, you can measure how good we are when we actually get to that point.

Yeah, that's good feedback and I'm sure we'll see milestones quickly. You guys have been doing a phenomenal job. A follow-up to that, I know when you guys were building the Archimedes, that first one that got onto the at Stennis, I was very surprised to see that number two and number three came out very quickly to join it and obviously now you guys are doubling capacity. I'm curious before I hand it over to somebody else, are you guys already in works to create another stage two, stage one with the Neutron? Are you waiting to get a kind of a fully integrated dynamic test before you kind of roll out the model number TWS for or serial number TWS rather for Neutron?

No, I mean, you know, we intend to try and fly three times next year. You know, that's our ramp rate. So we're building multiple flights worth of hardware now. And, you know, that's part of the scaling efforts that, you know, we've talked about. We've kind of moved slightly past the minimum viable product to investing in like the barge return on investment and in multiple serial numbers. So, you know, that's, we, you know, in the components and areas we have super confidence in where we're plowing straight forward.

Perfect. Thank you. Since Electron was brought up, if you guys don't mind me pivoting, during Q1, we saw the eight new Electron signings, four of which were the second batch of IQPS. And then if we look at the other four that were signed during the quarter, it looks like the ASP lines up nicely with what could be assumed to be four Haste launches. Is a 50/50 split between Electron and Haste a fair assumption? And if so, is the Kratos mission that was announced in April, is that one of these presumed Haste signings?

Yeah, I'd have to go back and have a look at that information. I mean, it's true that the Haste ASPs are generally higher because the mission requirements are a lot more complex, ironically, than going to orbit. So, you know, it's... Yeah. No, I have to... Yeah, I think only one of those is the Haste.

Cool. Cool. And then as a follow-up kind of on the topic of Haste as well, Rocket Lab was recently selected by the UK's Ministry of Defense to help develop hypersonic capabilities. What are the limitations of Haste at an international level given the defense nature? Like for example, if the UK were to require a Haste launch from you guys, could that go off on American soil or is that going to be kind of particular for each government? It has to be from their own soil?

Yeah. And it's a good question. So, you know, typically those launches are from US soil. In order to launch off, you know, foreign soil, you have to have technology safeguard agreements in place and a whole bunch of those kind of regulatory, you know, or cross-government and cross-regulatory approvals. Not saying that that's not possible. But, you know, that is required and of course, you know, we have to establish a launch site whether it be mobile or fixed in that nation which is no trivial kind of thing. But typically they are kind of joint research programs as well.

All right, I'll pass it on to one of you gentlemen. Maybe I'll just jump in on Haste. Pretty excited about the growth prospects there. Just kind of curious, can you give us an idea just how big that TAM is? Like could we ever see a day maybe long in the future where there's more suborbital launches to orbital launches for Electron?

Yeah. Yeah. Potentially. I mean, you know, the head of the hypersonic suborbital program, you know, was publicly stated as he wants to fly every day. So, you know, now I'm sure not a Haste mission every day, but kind of gives you a sense of where that program's going. And, you know, we maintain in a pretty unstable environment and the US really needs to get its stuff sorted with a whole bunch of these hypersonic systems. So, you know, we certainly see strong growth in that area. And, you know, we provide a really important service. So, you know, we expect, you know, Haste to be a pretty significant part of Electron going forward.

Great. Thanks. And I wanted to follow up a little bit on what Scott was talking about. So there was the AUKUS Pillar 2 announcement in November 2024 and how it pertains specifically to expansion of the United Kingdom, Australia, and I think part of what we saw with the UK deal was it was like one of five potential launch providers to be able to kind of win a contract. So as we seen that UK contract kind of come through, how competitive do we think Rocket Lab is? Obviously, I know what your answer probably is for that one, but what can you say with that with respect to the rest of hypersonic expansion opportunities in the rest of the EU? And the reason why I ask is because I know the United Kingdom and several four or five other countries have kind of a consortium for hypersonic with like high flight and things like that. Like where do we see the potential for that UK to eventually maybe spill over? And I know you're going to say one country at a time, but just wanted to get your thoughts.

Yeah. No, no, I think, and I think you teed it up nicely. It's like, you know, the Five Eye allies or the AUKUS pillars group of countries that are, you know, very deeply sharing in some of this defense technology and things like that. So, you know, that's where the core focus of this will lie. Which one of which New Zealand is a partner in the Five Eyes group. So, that enables us to engage very deeply there as well from a New Zealand side. So, yeah, no, I think and with respect to your question of how competitive we think we're going to be. I mean, you know, as far as I know, there's not too many vehicles that can provide, you know, anything up to, you know, sort of Mach 25 with a high frequency and high cadence ability. So, we think we're very uniquely placed and just, you know, the ability to produce vehicles at rate and fly them at rate and fly them out of different launch sites. I don't know anybody else in the world who has that capability right now.

Brilliant. Thank you. All right. All right. I just want to circle back to Neutron for two last questions. One of them I feel like you kind of answered it, but I still just want to ask it. So, I'm the guy who's like, 'Okay, you know, you did a hot fire test on the engine, you see it run once, why can't it be just strapped onto a rocket and then you fly?' So, for non-rocket engineers, like when you're doing the qualifications of, you know, like stage one, stage two, like what does that go? Because in my mind, it's like, you know, you flip on the switch, okay, the lights come on, okay, the canards are moving, okay, it's good to go. Like that's how I would do it. And that's why I probably don't work at Rocket Lab. But what is it that goes into these qualifications?

Well, to be fair, Vince, that's how some others do it. And we all know where that ends, right? So, you know, the way we roll here is we'll test and probe every, you know, operation, nominal and off-nominal. And, you know, we don't put anything on the pad or any spacecraft in orbit unless we've thoroughly, thoroughly tested. I think that's part of the magic of Rocket Lab is, you know, we have very good simulation tools, very good hardware in the loop tools and then when we actually build the hardware there is no shortcut taken. So with respect to, you know, propulsion, you know, we are exploring every kind of part of the run box and the challenge with the run box in the Archimedes engine is it's not just a simple ascent burn where you've got very well conditioned propellants and, you know, 200 seconds later they're extinguished. You have the added complexity of coasting the first stage for a while, mixing the propellants with the ullage and all the gases in the tank so the propellants get warm. And then when you go to relight for your landing burns and things like that, then you've got totally different conditioned propellants, totally different pressures and temperatures which all really, really matter. And, you know, we've gone to pains to make sure the Archimedes is the simplest engine you can build but at the end of the day it's still a staged combustion cycle engine. And it's still, you know, a really complex piece of machinery that, you know, when you change the inlet temperatures and pressures of propellants, things move around. So, you know, right now we've just been doing, I would say, pretty abusive things to the engine. And really trying to, you know, understand those startup and shutdown transients. And then, you know, all of the things that we need to do. And then of course on stage two we have a couple of relights depending on the mission. So once again it can be 45 minutes before you do the relight. So what is the condition of propellants after that period of time and how do you define what the run box looks like? So the crude thing to do would be, yep, just do a first stage profile, run a few tests, call it good. But that's just not the way we roll.

All right. Thank you. Thank you for that. And the last question I have on Neutron is the retail group for some reason I quite understand quite understandably would really like to have a launch party with you present at Neutron and I understand that it's very challenging because you don't, you cannot set a launch date and, you know, you're a very busy person and we don't want to hold you up from the production. So I was thinking that maybe a middle way could be to have like when Neutron is ready enough to have like a retail meetup with maybe someone like Adam or you present and where the retail could get like a tour of, you know, the facilities or the rocket if this is possible. And obviously for us the important thing is we have a smooth launch and we know that you guys are very busy. So, yeah.

Yeah, that's a fact. I mean, to Adam's point, I can barely make my own birthday party, let alone like a launch party. And the reality is that if it's launch day, any of us are not going to be interesting people to be around. It is all consuming. I'll most likely have, you know, spewing up in the corner with nervousness that's not untypical of a, especially a new launch. So, and also just kind of the reality of the logistics, right? I mean, you know, we'll put a vehicle on the pad. It's going to be a first vehicle. We'll be working issues. And we'll be working things that we haven't seen before because we'll be doing a lot of stuff for the first time. And, look, if it's not right, we'll scrub. So, you know, everything has to be lined up and perfect. And I think one interesting thing would be like to you guys, one of you guys to come and watch a Neutron launch and sit in a mission control, sorry, an Electron launch and sit in mission control and Electron launch because I think very few people understand like the kind of ballet of stuff that needs to happen in order to be able to even launch anytime whether it's, you know, all the weather and the space radiation concerns and then, you know, the vehicle and your payload readiness. It's like it's amazing that anything ever launches if we're honest. And I know that, you know, us and others have got a good launch cadence and it looks easy, but, you know, every single launch is, you could literally write a book on every single launch about, you know, various dramas and bits and pieces and things that kind of got in your way. So, and give you kind of a sense of just what it takes to, you know, to launch. But I think a Neutron launch, you want us, you don't want us partying. You want us, you know, deep in mission control and on the job.

Thank you and totally understand your answer and I really had to ask it because I get put into all kinds of groups in Twitter and the whole group is about, you know, like being Neutrons.

I, for the reason, nothing stopping you. Nothing's stopping you putting a party together, Vince. Warren, you put the big party together.

Yeah. Yeah. That'd be a much easier thing to do would be to, as you say, and we could do like an investor day or something like that and then there's a vehicle on the pad and you can wander around the pad and stuff. That would be pretty cool.

All right. Yeah. Thank you guys. I think we can go over to space systems if we are done with Electron and sure if we still have time maybe I'll circle back but yeah let's go on. Kind of up to this point I had viewed like over the past year Lightning as kind of the big growth driver for space systems. And now that Flatalite is in the picture I'm just kind of curious as to how this all shapes up. Is Flatalite just kind of a superior form factor or is there kind of cases where Lightning would be a better option? And how do you see those two playing out in your spacecraft family?

Yeah, no, they're two totally different things. So, Lightning is actually a fantastic national security platform. So, you know, it has all of the kind of redundancies and equipment on board that national security missions really, really require. So, that's kind of our go-to platform for a lot of those missions. If we're doing, for example, you know, a high volume large constellation, then every kind of gram of the satellite matters because it equates to how many you can get into a launch vehicle. And that's where Flatalite really excels is its ability to, you know, dispense with the dispenser and of course maximize every gram on the satellite to add as many of those in a launch vehicle as you possibly can. So it's kind of different products for different things in that respect. Yeah.

Great. So then we won't see a decrease in Lightning because of Flat coming online?

No, no. I mean, like I say, it's no dissimilar to like some of the Pioneers and those other, you know, platforms. You know, they all do kind of different things.

Sure. I actually also have a question about Flat, if you don't mind, Dave, that I jump in.

Yeah, go ahead. Yeah.

So, on Flatalite, my question is, how did you come up with that idea and was it something that customers were organically asking for? Meaning are you in talks with customers about deploying Flatalites and if not then what considerations went into the design?

Yeah, I mean, if you kind of devolve the engineering down to I need to put the maximum number of spacecraft possible per rocket, then you kind of naturally end up at that shape, right? And it's just like a bicycle, like if you derive the most efficient frame of a bicycle to carry the loads of a human, you end up with what looks like a bicycle. So that's pretty much how we kind of arrived at that. And look, there's other examples in the industry where other people had arrived at the same conclusion. So, you know, I'm not going to proclaim certainly any visionary moments here. It's just kind of pretty, you know, matter of fact and functional that that's what you optimize down to.

All right. And are you currently in talks with the customers on selling Flatalites to them?

Yeah, look, I mean, we don't do stuff of dreams. We were obviously, you know, customers approach us and a number of them have requirements for large constellations. So, you know, this is a kind of response to those inquiries.

Thank you very much. So I can jump in really quick with a follow-up on that particularly. So, I noticed that obviously Minaric and the laser obviously has a big component on Flat and I was just kind of curious. I know there's pros and cons of using radio. There's pros and cons of using laser for communications. Will Flatalite have both? And what do you see the pros and cons of really utilizing lasers for Flat rather than potentially radio if radio isn't available on Flat?

Yeah, I mean, you make a good point, mate. I mean, you know, radio links are, you know, have been done in the past. Laser links are actually pretty new. And look, it just comes down to bandwidth, right? Like you can just move so much more data at such a scale of antenna and boxes, right? So it basically just comes down to that. So, you know, if you're not meshing your satellites up and you're not needing to hand off data between them, then you can have a pretty, you know, low bandwidth radio link and that's super easy. But if you're looking to be providing, you know, a mesh network and handing off lots and lots of data, then you really, really need the laser links. And, you know, even government programs have gone to laser as we know with SDA. So, it's kind of the next evolution for satellite communication and then you have to worry about RF spectrum and all of that kind of stuff.

Like it's, yeah, it was always kind of my thought is like it's easier to kind of, I don't want to say hack, but I'll use the word hack, but it's less security in my opinion from what I've read. And then also it just seems like the interference with so many different people already utilizing it seems like it'd be a pretty big issue.

Yeah. Well, it's true. You have focused laser and you've got to be in pretty close proximity and I mean there's not really any scatter of information. You have to directly couple the laser up and, you know, so certainly you can't just sit on the ground with a big antenna and listen in. That's for sure.