Rocket Lab, Rocket Lab, Rocket Lab. You know, we rang up Sinclair Interplanetary at that stage and said, 'Doug, we need some reaction wheels.' Doug said, 'That's great, Pete. That'll be nine months.' And I was like, 'Doug, I ain't got nine months for anything.' So, the way to solve that problem is we just went and bought Doug. You know, now we make over 2,000 reaction wheels a year. Recently did the launch with the Space Force, the rapid call up launch, and they gave us 24 hours to integrate a satellite into a rocket, push it out to the pad and launch. You know, we did it in 16 hours and 42 minutes. We go after those big prime contracts. Even if we lose, we still win. And when we win, we win twice. You know, we won an $800 million contract. There was two other primes that also won contracts, but actually that turned into over a billion dollar contract for us because the primes needed their stuff. The nose cone shape of Electron, it's not actually the optimum aerodynamic shape. The optimum aerodynamic shape looked inappropriate in my view.
Some people did the opposite of that and made it more appropriate.
All right, Sir Peter Beck, we are here yet again. We just completed a pretty comprehensive tour of your facility here in Long Beach, California.
Oh, super great pleasure. Awesome to be able to show you around.
And we're here just after a record earnings.
So, what happened this quarter? Well, I mean, we pretty much put nearly a billion dollars of backlog in the books. Had record revenue and a whole bunch of growth everywhere and acquisitions and yeah, so it's been a busy old quarter.
We're going to get into all of that, but what I think was really interesting and amazing as you continue to make more acquisitions, you're strategically placing yourself far out of what people used to brand you as a launch company, but into an entire space ecosystem company. So, what is your plan there?
Yeah, I mean when we kind of started that space systems team, the first thing we did was try and go and buy a reaction wheel and you know we rang up Sinclair Interplanetary at that stage and said Doug we need some reaction wheels. Doug said, 'That's great, Pete. It'll be nine months.' And I'm just like, 'Doug, I haven't got nine months for anything. Like, we need way way faster than that.' And so the way to solve that problem is we just went and bought Doug. And then, you know, now we make over 2,000 reaction wheels a year. And we just basically repeated that. If you took a satellite and you laid it out on the boardroom table, we just pointed all the things that were really painful and went out and acquired the very best companies or in some cases created the technology ourselves and then just scaled it. And that puts us in a really unique position because yes, we can build platforms that scale for other people but you know we can also do that for ourselves.
What do you think the moat is now?
Well launch is always a huge moat. So, you know, launch is like probably the biggest moat, but I would say the second biggest moat is those components to go into those spacecraft because you can have infinite capital. It doesn't make any difference. You still need some star trackers and some reaction wheels and they're just not available at scale.
What has it been like for you as you scale this company out moving into this more manufacturing components era of Rocket Lab?
Well, it doesn't feel like anything's changed because if you take our first real product being the Electron launch vehicle, everything in that launch vehicle we design and we make. So, every engine, every avionics box, every piece of software. So we kind of cut our teeth about how to be a manufacturing company during that process. And then, you know, we hired our COO, Frank Klein, who came from Mercedes and bought a whole bunch of that expertise as well. And now I'd say we're at a scale where you know we have all the ERP systems and the MRP systems and like you know the Rocket Lab system where you know even if we go and acquire a new company we literally just pick that system and people up and just plonk it in and it's like scale at a button sort of a thing.
What was the initial process for going and doing so many strategic acquisitions as a way to grow? What was your thinking behind that?
Well, it was as you say, they're strategic. You know, I've always viewed the large space companies are going to have the ability to build their own satellites and launch them. And if you're beholden to someone else providing you all the critical components, then your ability to scale is governed by their ability to scale and that's not a place where you want to be. So, for us it was just sensible. And you know at the time I remember a lot of folks were saying well why are you buying this company in Albuquerque and this company in Toronto and that makes these little widgets and then I think you know it's very obvious now that those widgets are the things that truly enable you to scale for some of the space infrastructure.
Let's talk about Iridium because that was a big recent acquisition. Why did you make that acquisition and how does that change the future state of the company?
Yeah, it's funny because I thought everybody would have picked that well early, right? And I was surprised that people were surprised that we would be doing that because if you just think about it logically and you stand back and you go, okay, what is the biggest TAM in the space industry? It's comms. Okay, if you ignore broadband because, you know, two really well-capitalized people are taking care of that. If you ignore broadband, what's the next logical thing to do in comms? And it's like, you know, safety critical, defense critical services that is Iridium. And you know, it's a super quintessential Rocket Lab deal. Like we don't come with hopes and dreams and bore a big hole in the P&L. Like Iridium adds profitability to the entity straight away. It also buys us time to put up a new constellation. So it's literally the quintessential Rocket Lab deal. Like we don't buy companies that are like startups that maybe they'll do something one day. It's like you have to be proven and successful and then you're the right kind of target for us.
What's really amazing is you're pretty much one of three companies now that is doing successful commercial launches and you're expanding out into new territories. What does this mean for you against Blue Origin and SpaceX?
Well, I think they've both got their own ambitions and are some further along than others. I think it would be very difficult to go and play in the broadband market. I think you see the amount of capital that's required to be successful there. And so you know like I said before where is a good place to play and you know in that L-band spectrum that you know penetrating through rain and weather and buildings you can just do stuff that the more broadband spectrum can't do. So you know acquiring that spectrum super important acquiring that business super important and it really gives us a great platform to go and scale and really provide a lot of applications but I think Rocket Lab is not the L-band safety critical comms company like that is number one and there'll be many many more after that.
You've I mean I think like not to hammer on this too much but you've made several what is it seven acquisitions at this point that have well integrated and been successful. So, what is your process with that? How do you create such like a seamless motion?
Well, I'm glad it looks like that. It's like the duck on the pond, you know, with the little feet flat out. It feels a little bit like that. No acquisition and integration is easy. Like there's no small one. But it does help in the fact that we're extremely picky. And we like to acquire companies that we've worked with. You know all of the component companies we've basically used them in the past in our own systems and you know so those relationships and the understanding of those teams if you look across all of those component acquisitions there's one thing that is like all written on the top of their boards and that is 100% mission success. There's no like you know let's be fast and they're enough it's always 100% mission success like you know SolAero never had a solar panel fail in orbit in 40 years. Doug Sinclair and reaction wheels. Same again PSC never had a failure, separation system failure. So you have to be of that mindset to be able to integrate with Rocket Lab. From a diligence perspective, I guess generally we know the team. There's been a couple of times we knew them less well, but typically it's like we've selected them for a program or we've worked with them for many years. So in that respect that diligence doesn't take a huge amount of time. We know sort of a little bit what we're getting. And then the integration playbook I would say has evolved over time. You know at the very beginning we were very very light touch and I would say now I think we have a much much more well-oiled machine where day one like there is literally a day one in the playbook and day one the walls are black the snack machines are in Rocket Lab t-shirts are on and we're go you know throttles wide open.
I mean we've been touring the building. We've been driving around in the golf cart. Everybody is wearing your merch. Is this required?
No. No. You have to like you get a set of merch when you come, but most of the team buy it. Yeah.
Yeah. And I think that's a great metric for a company. It's like how proud are your employees to work here? I think all the successful companies, in my opinion at least, their employees feel like they're really part of it and they're really really proud of it.
We talked about this in the tour, but this is one piece of many pieces of Rocket Lab globally. You're an international rocket sensation.
Yep. The lawyers hate me saying it, but global domination is definitely part of the plan.
We love global domination.
Yep. It's underrated. So we start off in New Zealand. So there's the Electron factory in New Zealand. There's the launch pad in New Zealand. Well, the launch site where there's two launch pads. And then we have a small team in Australia. And mainly in business development. And then we start off here in California. We have these two facilities in California. Then we have Rocket Lab Optical Systems in Tucson. And then Albuquerque we have our solar plant. And then Toronto we have our reaction wheels. Stennis we have our engine test facility. Middle River we have our Neutron facility. Maryland we have separation systems. Virginia we have launchpad. Germany we have our optical terminal business. And I'm sure I've forgotten one but yes.
Were these through acquisitions or like some somewhere?
Yeah. Most of those were acquisitions like Stennis obviously not and Middle River obviously not but somewhere yeah.
I want to go back to the beginning of how you built this all out because the top three countries for launch are the US, China and New Zealand and you created a monopoly on launch in New Zealand. So what was that process like for you? How did you write the laws there?
Well I mean at the end of the day if you have a small launch vehicle and you turn up to a large launchpad the reality is that the fees don't change and when you're trying to sell a rocket for like $8 million you can't have a million and a half dollars worth of launch fees on a $50 million rocket it doesn't make any difference right so we were really like we were very early on it's like in order for this to be financially viable we need our own launch site. And you know building your own launch site in the states was non-trivial. It was non-trivial in New Zealand as well. But you know ultimately we felt it was easier to do that in New Zealand. And to your point New Zealand had no space industry. So sometimes it's easier to start something from scratch and formulate it in a way that best makes sense than to try and integrate with a whole bunch of rules that don't fit.
Is this why you got knighted? One of the reasons, yeah, creating a space industry. And what was that like?
Well, I mean, look, I just like to build rockets and it's great for your mom and stuff like that, but you know, a lot of people do a lot of amazing things and you know, it's an amazing thing. The way I look at it, it's really for the whole team and entrepreneurs in New Zealand. But you know, great for restaurant reservations, but yeah, but no, I think yeah, it's a very humbling experience.
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Why is New Zealand geographically advantageous for launch?
So I mean the launch LC1 is a very unique position that we can launch sun-synchronous and also sort of out to mid-inclination out of the one site. So here in the states if you want to go sun-synchronous you generally have to go out of the west coast and if you want to go mid-inclination you have to go out of the east coast. So we get a huge swath of azimuth and there's one plane every 3 days that we have to worry about.
That's it. Whereas in the US here, of course, you're shutting down the tremendous airspace and it's a big deal and everyone, you know, it's a real thing. So, in New Zealand, there's just nothing there. So, it's very easy to launch. And we're able to do things like, you know, we recently did that launch with the Space Force, the rapid call up launch. And they gave us 24 hours to call, you know, integrate a satellite into a rocket, push it out to the pad and launch. We did it in 16 hours and 42 minutes.
That's insane. There's nothing below you but Antarctica.
No, there's nothing at all. Like Chile is the when we're out mid-inclination sun-synchronous like it's Antarctica or Chile. So yeah, it's miles away. Like it's halfway around the planet. So yes, there is nothing. There's absolutely nothing which is great, but also you know we had to build an entire industry from scratch in New Zealand. Like there was no suppliers, no infrastructure, nothing. We had to build absolutely everything.
Is it more expensive there because of that?
No. I would say we control our own destiny very very well. So, no.
No. Did you find the pyramids in Antarctica yet?
No. I haven't been haven't had a good look to be fair. So, might be under the snow. I don't know.
Amazing. Because you had such a big earnings. You had record earnings this quarter if you didn't know that.
Yeah. But we had the record last earnings as well and probably the one before that.
Well, I guess before we get there, you went public before other space companies. One of them that recently went public. I don't know if you know SpaceX.
But what was it like and why did you make the decision?
You want to do something before Elon for once, that's for sure.
Well, what was the process and why did you choose to go public when you did?
Yeah. So, for a number of reasons. One, you know if you can reach a certain level of maturity and go public the capital markets enable you to do things you couldn't do in private markets. Buying Iridium like we could have never have ever done that as a private company so you know it was the right time for us to become a public company and then the other part of it which is a little bit selfish is I didn't want to build a space company that just lives for the lifetime that I'm running it needed to be multigenerational and go on and on and on and on and being a public company really enforces that discipline of profitability and profitability is survival. You know, the rockets and satellites and it's all cool, but at the end of the day, it's all for nothing if your economics aren't there and you're not profitable.
So, for future founders that are thinking about going public and trying to time the markets, which I've learned from our partnership with the New York Stock Exchange is not something you can really do. Do you have any advice for founders?
