Rocket Lab at Emerging Technology Summit: Strategic Plans Unveiled

On Wednesday, March 5, 2025, Rocket Lab USA (NASDAQ: RKLB) participated in the 18th Annual Emerging Technology Summit. The conference provided insights into Rocket Lab’s strategic plans, highlighting both opportunities and challenges. CFO Adam Spice discussed the company’s robust operational segments and future growth strategies, while acknowledging the competitive landscape and financial commitments.

Key Takeaways

• Rocket Lab’s revenue is largely driven by its Space Systems segment, accounting for 70% of total revenue.
• The Electron launch vehicle has achieved profitability with margins in the low 30s, with a target of mid-40s to 50 points.
• The company is developing the Neutron launch vehicle, aiming for a launch in the second half of the year.
• VAST Space, founded in 2021, aims to replace the ISS with its Haven space station and is fully funded by Jed McCaleb.

Financial Results

• Rocket Lab’s Space Systems generated approximately $300 million last year.
• Electron launch margins are in the low 30s, with a target of 45 points with increased launch frequency.
• The company holds around $500 million in cash and marketable securities.
• Neutron development has cost $200 million so far, within a budget of $250 million to $300 million.
• VAST Space is funded by hundreds of millions of dollars from Jed McCaleb, with significant cost advantages due to vertical integration.

Operational Updates

• Rocket Lab’s Electron is the second most launched U.S. vehicle, with 60 launches completed.
• The Neutron vehicle is scheduled for launch in the latter half of the year, with dual recovery paths planned.
• Rocket Lab introduced Flatelite, a new satellite designed for large constellations.
• VAST Space is developing Haven 1, targeting a Falcon Nine launch next summer, and Haven Demo, planned for this summer.

Future Outlook

• Rocket Lab aims for full turnkey solutions and potential orbital infrastructure in three to five years.
• VAST Space envisions replacing the ISS and exploring applications for the Department of Defense and independent nations.

Q&A Highlights

• Rocket Lab differentiates between small satellite launches and dedicated rocket launches, emphasizing unique orbital placements.
• VAST Space views NASA as a critical partner and expects a streamlined approach under new leadership.

For more detailed insights, please refer to the full transcript below.

Full transcript - 18th Annual Emerging Technology Summit:

Mike LeChac, Aerospace and Defense Analyst, KeyBake: My name is Mike LeChac, and I cover aerospace and defense at KeyBake with a focus on space technologies. And we’re very excited to have with us today Adam Spice, Chief Financial Officer of RocketLab to kick off the space tech portion of the conference. So Adam, thank you so much for being here.

Adam Spice, Chief Financial Officer, RocketLab: Yeah. Thanks for having me.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: So before we get into the details, I was hoping you could start off with a brief overview of the two segments, Launch Services and Space Systems. And then ultimately, what’s the long term vision for Rocket Lab?

Adam Spice, Chief Financial Officer, RocketLab: Sure. So a lot of people understand that Rocket Lab is a launch company, kind of goes with the name. But a lot of people don’t realize that 70% of our revenue comes from non launch related activity, so the space systems side of our business. And so to kind of think about the two portions or two segments, launch again represents about 30%. It’s been entirely driven by our Electron launch vehicle, which is the most frequently launched U.

S. Vehicle behind the Falcon nine. We’ve had 60 launches. We’ve got our sixty first scheduled for, I believe, the tenth. That’ll be the third for the quarter so far.

And we have, of course, the most exciting for us going on this year, I think, is bringing our Neutron launch vehicle to market, which is our medium lift launcher to compete directly with the Falcon nine. That can deliver 13 tonne to low earth orbit. It’s a reusable launch vehicle, so very much designed to meet the constellation deployment needs of current operators. The 70% of our revenue that comes from Space Systems, you can think of it as roughly two equal portions, which the total Space Systems revenue last year was about $300,000,000 Half of that came from selling satellite subsystems into the merchant market. So think about things like attitude, direction and control components, which are things like reaction wheels, star trackers, sun sensors, radio systems, solar panels, software, satellite dispensers and so forth.

And we sell those into other manufacturers of spacecraft including people like Lockheed, Airbus, Northrop, Raytheon, York, you name it kind of go in the list of satellite manufacturers. And then the other half of our space systems business is selling platforms. And so we sell two different kinds of platforms. We sell basically satellite buses, which are the satellites independent of what particular payload is on those. So we build buses for people like Globalstar to deploy their constellation needs.

We build satellite buses for NASA. We build satellite buses for a range of other customers, including Varda Space that you might have seen. It’s an in space manufacturing startup that’s doing on orbit pharmaceutical development. So we built the bus for that. They developed the actual centrifuge that creates the crystal proteins on orbit and we reentered that two days ago actually back into the Australian Desert.

So kind of very interesting set of applications that we sell satellite buses and then we also sell full turnkey solutions. Probably the best example of that is we won a large $515,000,000 contract with the DoD to provide their tranche to beta satellites for that deployment. And that’s where we do the whole thing. We provide the whole satellite bus and we also provide the payload, which today we source from third parties, but kind of longer term with consistent with our kind of vision to have full turnkey solutions and end to end space capabilities is to have those payload capabilities as well. So today, we stop at the bus.

In the future, we’re we’re gonna add onto those capabilities and add the payload to our our quiver.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Yeah. That’s that’s great. And I wanted to start with Electron, the fastest launch vehicle, two fifty orbital launches ever. And this was done on a budget of only $100,000,000 So how were you able to be so successful with that launch vehicle on a much smaller budget than most peers and much faster than most peers?

Adam Spice, Chief Financial Officer, RocketLab: I think a lot of it just comes down to the fact that, Peter Beck, our founder CEO, I mean, he’s an engineer’s engineer, right? So he’s involved in everything and he was key to the development of Electron. And as he’s obviously key to the development of Neutron, which is this larger vehicle. But I think part of it because I think we knew or Pete knew that we that he couldn’t compete with SpaceX for capital. Right?

So we had to do things very differently. So he took a very different approach to addressing the market. In fact, if you look at SpaceX’s history, they started with Falcon one, which is essentially the same size as Electron. And then through a series of misadventures, they kind of moved on from Falcon one, which never was really put into service to the Falcon nine. I think it was also a function of fact that back if you look at when when Falcon one was brought to market, this this proliferated LEO architecture and small satellite kind of revolution hadn’t really gotten a lot of traction.

And, of course, it did about a decade later. So I think he also saw the fact that he didn’t wanna be kind of drifting around for ten years without any revenue, any satellites to launch, so he moved to the where the market was. So I think we just we looked at things very, very differently. I think we also have an advantage where about a third of our workforce is located in New Zealand where the company was started. And a lot of people don’t realize the cost effectiveness of doing things in New Zealand is much, much cheaper.

You can get, you know, two or three engineers for the cost of one U. S. Based engineer. So it’s a very cost effective place to operate. And we could also do it we could also scale that in a way because in New Zealand, you’re not bound by the same ITAR restrictions as you are in The United States.

So we could recruit engineers from Europe, Canada, Australia, lots of other places and again taking advantage of the low cost plus access to a pretty broad workforce.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Yeah. And how do you think about profitability for Electron as you did 16 launches in ’24 and then you look to the 2025 manifest of over 20 launches? And most importantly, how meaningfully can reusability of the rocket increase margins as you scale? So just how are you thinking about margins as you launch Electron more?

Adam Spice, Chief Financial Officer, RocketLab: Yes. So when we started with Electron, it was a low to negative gross margin proposition that over time got the point where in the last quarter our margins for Electron were in the low 30s. So they’ve expanded pretty dramatically and we think there’s a path to get to mid 40s. It may be to push 50 points on the gross margin as we get to a higher cadence. So one thing that a lot of people don’t appreciate about the rocket business, it’s a very high fixed cost business.

So the actual cost to build the rocket from a raw materials and direct labor perspective isn’t all that high. Where the majority of the cost for the rocket come into play is basically all the fixed costs that maintain the factories, the launch pads. It’s kind of a somewhat of a standing army. So it’s all about how many launches you can get off and how you can absorb those fixed costs over a greater number of units. So that’s really the path.

The margin expansion is going from 16 launches this year to north of 20 launches this year. That kind of gets us into towards our sweet spot. And we’ve said that, look, we get to our target margin model of roughly 45 points of margin when we can launch twice a month or 24 times a year. So we’ve got a shot at that doing that. If all the customers were to show up and we had no breakage between kind of manifest commitments and actual launches, then we’d certainly have an opportunity to do that this year.

But I think last year we came into 2024 with 22 launches on the manifest. We launched 16 and we didn’t leave any customers payloads on the launch pad. So basically, that means that we had we had rockets ready. Customers weren’t always ready with their payloads. And so we have to factor in kind of what the breakage is going to be based on their committed manifest.

And, you know, at at some point, we’ll get to where we have enough satellites kind of waiting in the wings to be launched that if a customer shifts, you know, we can just pull forward something else, but we’re really not there yet. The market’s really not that predictable yet. It’s still very much an emerging market. Ultimately, I think we’ll get there, but it probably takes a few more years to get there. Yeah.

Go ahead. No. I guess, sorry to take it the last part of your question.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: You did. And that kind of leads into my next question as well with the supply demand environment. Rocket Lab with Electron is the clear leader in small sat, small lift launch. How do you see the launch supply demand environment over the next few years as you continue to ramp the cadence of Electron? And, you know, do you see any competitors coming online that could ramp as fast as you did?

Adam Spice, Chief Financial Officer, RocketLab: I’ll clarify something a little bit. So, you know, if you look at the sheer number of small satellites that get launched, we don’t launch most of those. So most of the satellites actually get launched on SpaceX transport emissions. So I think you have to differentiate between small satellite, you know, launch versus small dedicated rocket launch. Right.

So if you look at a transporter mission of which there’s, you know, four to six of those per year, they’ll put hundreds of small satellites on one of those platforms because the Falcon nine can take 16 ton to orbit. Electron is 300 kilograms to orbit. So we typically take, you know, I’d say our typical mission will have a dedicated small sat that weighs about 200 kilograms s and needs to go to a very unique orbital location at a very unique time. So they really can’t go on one of these generic kind of transport emissions. So you can think about transporter as being like the city bus and Electron is really more like the Uber.

Right? It’ll take you exactly where you need to go, where you need to go. It’s gonna cost you more to do that. But people often ask, well, why are people willing to pay a premium? And it’s really because they have to pay a premium because again, the bus isn’t going to where they need to go.

Right. So as far as growth in the market, we’ve seen pretty consistent growth. I mean, our we’ve benefited from the fact that the number of launches in our backlog continues to increase. The pricing of that backlog continues to increase. And so we see those trends continuing.

I think one of the more notable factors right now for our kind of a growth in our backlog and also just the increase in pricing is we’re getting increased mix of government missions in there, including like the hypersonics platform that we introduced a couple of years ago. So that’s probably the fastest growing piece of our business. And again, given where The U. S. Is positioned relative to Russia and China and the need to catch up and really kind of have a capability there that’s necessary for national security, we see demand for that continue to increase and we’re in a unique place to take advantage of that because we bring the cost down dramatically.

If you look historically, there might have been a, you know, less than a handful of hypersonics missions per year. They’re very expensive, and they were typically, you know, launched on, you know, a Northrop Grumman Minotaur or Pegasus vehicle or Minitar at a much higher price point, maybe three to five times the price point that we charge. And they just couldn’t make enough of them. It was never built to be a really high volume cadence vehicle. And so we come into the market and we basically tell the government customer how many of these do you need a year and we’ll we can deliver them.

And we’ll deliver them at a very attractive price point, which allows, again, the nation to kind of catch up on its needs of hypersonic development. As far as on the commercial side of small dedicated launch, it’s a market where lots of people have tried. They’ve broken their pick in this market. People like Virgin Orbit that tried and failed went into bankruptcy, and we bought their primary production facility a couple blocks down the road from us in Long Beach. You’ve had people like Astra that failed.

You have people ABL kind of failed and now pivoting to missiles and so forth. So it’s actually much more people think that a small rocket must be easier to do than a big rocket and it’s actually kind of the opposite. What’s hard about a big rocket is the scale of the infrastructure and the production, but the technology that goes into both platforms are pretty similar. In fact, it’s in some ways it’s harder to build a small rocket that’s reliable than to build a big rocket because you typically have more payload margin forgiveness on a big rocket. Because if you take a typical call it a Falcon nine or other large launch vehicle and you look what percentage of its mass throw capabilities being used on a launch, it’s typically call it half or less.

And on a small launcher, you’re using a lot of that capacity, almost all of us. You leave very little fuel margin. I think the average fuel margin for a Rocket Lab launch in Electron is about 3%.

Sid Harry Heron, Chief Financial Officer, VAST Space: Wow.

Adam Spice, Chief Financial Officer, RocketLab: So it’s pretty tight. Wow. And on a Falcon nine, you’ve got lots of fuel margins, so you can actually have more forgiveness built into your platform.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: And shifting gears to Neutron now, your larger launch vehicle with, the first launch targeted for the second half of ’twenty five, There’s a lot of milestones right now that are ongoing that you’re working on. What gives you confidence in a launch for Neutron this year?

Adam Spice, Chief Financial Officer, RocketLab: Well, we originally when we came public in August of twenty twenty one, we set a goal of launching it before by the end of twenty twenty four. We put a spend target for minimum viable product and minimum viable infrastructure. So we’ve got $250,000,000 to $300,000,000 budget and roughly three to four years. And I think that was informed by our experience with Electron, which has been hugely valuable. As you progress through any rock development program, you learn things and you kind of have to make adjustments.

We changed that schedule from initially from end of twenty twenty four to middle of twenty twenty five. And then recently we said, look, there’s some items that still need to be worked aggressively that kind of have fallen out of our time our kind of target timeline. And so we’ve kind of given ourselves a little bit more room to get that off in the second half of the year. But we say this every time we get asked the question, like rocket development programs are notoriously fraught with delays because you don’t have a bad day till you have a bad day. You can’t plan for a bad day.

I mean, theoretically, you could say, look, the average rock development program blows up a tank and every and they blow up a test stand for the engines. And so if you did all that, you’d put a deadline out there that was just way far out of time that wouldn’t really necessarily track to reality is kind of just a guesstimate. And so I don’t think you’d ever be totally right. I think we’re far enough now on the program where we know what the long poles are and we’re aggressively working those and we think we have paths to close those to a launch in the second half of the year. But again, you could have you could blow up an engine next week and take the test down that with it and you could be pushed back three to six months.

But fortunately, we’ve never had that happen on our programs before. We haven’t blown anything up on Neutron. We didn’t blow anything up on Electron. So hopefully, that continues to be the case.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Yeah. And I think the learnings from Electron give you a lot of confidence as well in how you’re doing things and expectations for timelines too.

Adam Spice, Chief Financial Officer, RocketLab: Absolutely.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Now let’s talk about the newly announced barge appropriately called return on investment. Could you briefly briefly talk about what that is? And has that always been the plan to land Neutron on a barge in the water versus a traditional splashdown landing?

Adam Spice, Chief Financial Officer, RocketLab: So we actually have two different kind of recovery paths for Neutron. The first one is downrange landing on a barge. And so that looks very much like what SpaceX is doing that they’ve had over I think it’s probably now close to 300 ocean marine recoveries. So we’ve learned a lot from what they’ve done. We’ve actually got a few of the team members from that team that we’ve brought on board.

So the barge is as you can see, it’s a massive vehicle that gets basically towed out to its location several hundred kilometers downrange. You land the vehicle on there and that’s where you can use we estimate 300 sorry, 13 ton of capacity in a downrange land configuration. But we’ve also talked about doing a return to launch pad kind of like you watch what Starship is doing, it’s kind of getting caught by the chopsticks, if you will. That’s actually you in that configuration, we’re estimating around eight ton. And the reason why you get less mass throw capability is because to basically use the propulsion to bring you back up range, it consumes a lot of fuel.

So it’s basically leaves less capacity to put on orbit. But for some missions, if you’re only flying three, four, five, six tons, then that makes a lot of sense because you save the cost and the time of doing the ocean recovery element of it. That’s a longer term plan. I mean, that requires further regulatory work and further R and D, but that’s always been kind of in scope from the beginning of the program. Now our first test launch of Neutron targeted for later this year, I mean, that’s we’ve designed that to be a soft splashdown in the ocean.

So think about the goal the kind of a measurement of success for that launch will be you get to you successfully get to orbit, you reenter the rocket and you basically bring it down. And then instead of laying it on the barge, you basically fire you refire your engines, which is gonna be probably the hardest part of of the of the the reentry and landing process. And you basically soft splash out over the water. And you at that point, we should be able to tell whether we could have landed it on the barge. But you don’t want to land it on the barge.

Try to land on the barge until you’re pretty comfortable you could do it because you don’t want to damage a $50,000,000 asset and you don’t also don’t want to trigger an FAA anomaly investigation. So the plan is to drop it in the water, pick it up, put on the barge, bring it back, understand kind of what went well and what didn’t go well. And then hopefully, you know, we’d have a relatively short path to getting to a successful barge landing in in subsequent launches.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Great. Well, shifting to Space Systems, which you, you know, you had alluded to it kind of gets overshadowed sometimes by the launch side of the business. And you recently announced Flatelite, a new satellite offering, and that’s designed for high volume production for large satellite constellations. Could you talk through the strategy behind releasing that new product? And, you know, do you have visibility into potential future constellations where, that would work best?

Or is it something where it solves the problem of the constellations that are already being deployed today?

Adam Spice, Chief Financial Officer, RocketLab: Well, the purpose of of Flatelite is to if you if you ever looked at a at a Falcon nine Starlink launch, they’ve got these, you know, this this pancake of pancaking of these Starlink satellites, which is a very, very, ergonomically efficient way to do to utilize all the capability of the rocket. Because oftentimes the rocket can be volume constrained versus mass constrained. And so you’re trying to optimize for mass if you can, right? So it’d be much better to get 25 or 30 satellites on a rocket than obviously 15 just on a cost per satellite basis. So this is really targeted at the bigger volume applications.

If you’re only having to deploy a half dozen satellites, it probably doesn’t make sense necessarily to use that configuration. You’ll go to more traditional hex box kind of design of your satellite. But this is for when you need a lot of capacity, you need to put these large antenna arrays on orbit, right. So if you look at the diameter of the fairing and you give a pretty capable set of antennas if you can utilize most of that space. So it’s really targeted at the comms market because if you look at Earth observation, those are typically smaller satellites.

You don’t necessarily need the same size of arrays and so forth. So you could say and if you think about, like, Earth observation, some of the form factors there around, you know, optoelectronics. So it’s basically a big telescope or camera and that doesn’t really you know, those are kind of limited by the optics like the actual lenses and stuff. So you want something that just requires a big antenna, which is flat and wide. And so this really does target itself to communications applications.

And for those, we see those across government opportunities, commercial opportunities. Because if you look at people that are going after whether it’s the direct to mobile market, whether it’s going after certain government comms platforms, those all actually are well suited for this flat light design.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Do you have an estimate of how many of those could fit on a new trend?

Adam Spice, Chief Financial Officer, RocketLab: It really depends. Each one’s going to be a little bit different. I mean, flat light is really it’s a design, but there’ll be the iterations around that depending on the payload requirements and stuff and how much the platform you know, power requirements are will dictate how much solar you need and so forth. So it’s going to vary. But it’s certainly going to be a very, very efficient way.

And I think, of course, you know, we’ve also designed FlatAlight to work best with Neutron, right? FlatAlight certainly will be able to fly on other launch vehicles. But we’re not kind of passing up the opportunity to optimize our satellite platform with our launch platform, which really goes to the longer kind of strategic view of creating an end to end space company where you can do everything in house with the ultimate goal is, yes, you know, you’ll first very likely see flat light, be deployed for third parties, you know, customers whether commercial or government. But then ultimately, we hope to see these flying, you know, Rocket Lab logos providing our own services to customers.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Absolutely. And that kind of leads into the longer term satellite constellation potential for RocketLab. And I know it’s pretty clear that the focus right now is on ramping Neutron and Electron and then further vertically integrating space systems. But as you look out five plus years and a lot of people consider SpaceX as the closest competitor for Rocket Lab. And I think recently their Starlink revenue surpassed their launch revenue in the past year or two.

So how important is it to have a scaled end to end space company to be able to build your constellation versus a company spending a large amount of money to a third party provider for either launch or satellite manufacturing and design?

Adam Spice, Chief Financial Officer, RocketLab: I think the way to look at that is if you it’s not surprising at all actually now that the applications part of SpaceX will be bigger than launch because if you look at the TAMs, it launches about a $10,000,000,000 TAM, of which today we play in a release relatively small part of that with small dedicated launch. That’s measured in, you know, essentially our revenue because there’s not a lot of other players in that space, and they make up the majority of the remainder of the revenue. So launch is, call it, $10,000,000,000 TAM. The making of satellites and all the substances that go into that is about a $30,000,000,000 TAM. And then if you look at the applications, it’s like a $300,000,000,000 TAM.

So, you know, I think that, you know, we all see what the what what the brass ring or apprises at the end of this. It’s not launching more rockets to deliver other people’s stuff. It’s not necessarily making focus on making satellites for other people. It’s getting a piece of that 300,000,000,000 pie, which hopefully is going to grow pretty dramatically if you look at some of the third party estimates of how big the TAM is going to be for applications. So for us, I would hope that three to five years from now, again, you’re seeing that we’ve got our own infrastructure in orbit.

We’ve developed kind of those end customer relationships. I think that given how long it takes to develop some of those technologies and some of those customers and also acquire spectrum, it’s very likely going to be through some forms of partnerships or inorganic kind of growth through acquisition or mergers. I think what we’re what we think we bring to the market is right now, there is no real competitor to SpaceX in the medium class launch category. It’s just not, right. So Neutron is developed to it really is a position to be the number two behind the Falcon nine.

But we actually think it’s going to be longer term a better vehicle because it’s more modern. It’s got more composite construction versus stainless. You’ve got we brought a lot of things into that vehicle, the fairing designs and so forth to make it ultimately very reusable in a timely and cost effective way. So when you bring that capability to the market, you’re enabling other people to compete where they really can’t right now. Like if you’re a traditional satellite operator and you’re staring down the barrel of competing with SpaceX, who is now the world’s largest satellite manufacturer, They’re by far and away the world’s most dominant launch provider with the best vehicle that has the lowest cost per launch because of the reusability.

I mean, it’s very daunting to try to compete with that. So, you know, we’re we’re bringing those capabilities to the market, you know, in a way that we don’t think any other people can. Because if you look at the hard part of space, satellites are are hard. Like, don’t get me wrong. Satellites are very difficult to do.

Everything in space is hard. But the complexity of launch is so much harder, which is why you see a lot more satellite companies and satellite operators than you see launch companies that are successful. If you look across the history of the launch market, there’s been maybe at most two handfuls of successfully scaled rocket programs and most of those are governments, right? And so having that, that’s really the moat. That’s really what gives you the ability to go in and determine how you want to play in certain markets or even gives you kind of, I’d say, the credibility to go in.

And you got to pick your markets carefully. Like, if you’re going into a market that that doesn’t require a lot of launch intensity because of it’s you only need a few exquisite satellites, your launch isn’t that important neither is building cost effective satellites. But if you’re going after a market segment that requires global coverage, thousands hundreds or thousands or tens of thousands of satellites, you have I have to squint really hard to see how you actually do that without owning the vehicle, the launch vehicle. And as we and as I said before, very, very few people in history have been able to pull off the launch piece. So it’s much more logical to be able to take your launch position and extend into everybody else’s business than for it to go the other way.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Right. No, that’s great. And I guess we’re coming up on time here, but I had one question before we see if there’s any questions in the room. Just on financials and your cash position, about $500,000,000 of cash and marketable securities. How good do you feel about that balance to fully fund Neutron?

You’ve spent $200,000,000 to date on a $250,000,000 to $300,000,000 budget. Just what’s your confidence in that budget and your cash position?

Adam Spice, Chief Financial Officer, RocketLab: I kind of mentioned before like the launch business has been unpredictable both when you’re actually in production launching but also developing a vehicle. If you have a bad day on the stand, it could set you back a couple of quarters and cost you lots of money. Like we saw late last year when ULA was bringing their Vulcan vehicle to market, they blew an upper stage Centaur stage up and it you had to rebuild, you know, their their test stand and set them back about six months or so. So I think in some ways you can never have enough cash to run a rocket company. But I think we don’t plan for those kind of days, but we do say Pete and I always kind of looked at like if you get much below $300,000,000 of liquidity, it starts to make us pretty uncomfortable because these are long cycled projects and prospects and customers tend not to ask us a lot of questions when we have that much liquidity or more.

Once you get below that, these are going okay, well, a couple of bad quarters then you could be in a tough cash position therefore, are you going to be here four years from now when the project is supposed to culminate? So we never want to be in that position. And then we’ve also been relatively acquisitive. We’ve acquired four companies and we continue to work a pipeline that could consume capital. So I think we kind of watch what the demand signal for the customer is, because there are certain situations where we want to pre invest scaling capabilities.

So we don’t leave anything on the table as far as launches. And so we’re there’s the barge is a great example, right? I mean, that is not part of the $250,000,000 to $300,000,000 investment because that’s not required for the first minimum viable product, right? It’s about putting the asset into a fleet mode and doing recovery. So it’s a combination of demand signal combined with how much confidence we have in our deal funnel and some of that coming to fruition.

And then also just being practical about, well, you could have a bad day. And if you have a bad day, that’s not when you want to be going to the market, right, to make sure that

Mike LeChac, Aerospace and Defense Analyst, KeyBake: you can continue the development. Right. Any questions in the room? Alright, Adam. Thank you so much for being here.

Appreciate the time.

Adam Spice, Chief Financial Officer, RocketLab: Right. Thank you.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Alright. We’re gonna continue the space spotlight tonight with another very exciting space company, privately held vast Space and very excited to have Sid Harry Harry Heron. Is that correct? Harry Heron? That’s a b plus.

Okay. I’ll take that. Chief Financial Officer of VAST Space. Sid, thank you so much for being here. Pleasure.

So maybe if you could start by giving a brief overview of the company for some of those that might not be familiar with VAST and kind of tying into that, what’s the longer term future vision for VAST Space?

Sid Harry Heron, Chief Financial Officer, VAST Space: Yeah. Absolutely. So thanks for having me. So VAST was created in 2021 by a guy called Jed McCaleb. Jed is a crypto and a software, multi billionaire.

And his choice to use his capital was not to buy fancy yachts, but he actually wanted to do something for humanity. And his vision ultimately is for us to be a multi planetary species. And so his vision was, can we actually create a global space habitation company that enables human beings to live and thrive and prosper in space over longer durations of time? The issue, as you all know, with space is that microgravity degrades the human body, and so can we actually fund research to make it a viable alternative. So that was a motivation for JET in creating VAST.

And, you know, in the near term, our goal is to to replace the ISS because our view is we need to take an incremental approach to a much, much bigger vision, and that is a near term price for us to go after. But ultimately, the vision is multiple habitations, multiple planets, and to be a multiplanetary species.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Yeah. Yeah. Replacing the ISS is certainly a big goal, and it’s something that NASA’s kind of been been expecting and planning for, and that kind of leads into the CLD program. And that’s commercial low earth orbit destinations and, a potential award from NASA for this to build a space station. It would it would be a major milestone for the company.

So maybe you could take a few minutes to explain that program and then how the bidding process works. And if you ultimately get the bid, you know, how meaningful is that for the company?

Sid Harry Heron, Chief Financial Officer, VAST Space: Yeah. Absolutely. So in in 2020, NASA basically decided that they did not want to own and operate the ISS longer term. It was too expensive. There was a partnership with Russia, of course, to be mindful of from a geopolitical standpoint, and their view was we actually they wanted to redeploy some of that capital and some of the budget that they use for the ISS to Artemis.

Right? So they focus on the moon and the missions that they have. And so they created this program, as Mike mentioned, called CLD, where they, you know, had a competition, you know, different players bid. NASA handed out, you know, between 140 to 160,000,000 to three different players to say, can you guys come up with a solution to replace the ISS? We were not around at the time when when the program was created.

We were created after the fact. So we do not have any funding from NASA today. However, we are part of a program called CCSC two where we have the same rights as everyone in CLD. So NASA shares requirements with us. We’re part of all the conversations.

We have quarterly programmatic reviews of NASA. They come on-site. In fact, we have a big meeting with NASA on Thursday on the commercial side as well. So I’d say apart from having their cold, hard cash, which obviously would be nice as a CFO, we have the same rights as all the other players in the category.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Okay. Great. And, you know, what gives you confidence with where you’re at in the design process today, that you could win a contract versus some of your peers that are competing for the same CLD program?

Sid Harry Heron, Chief Financial Officer, VAST Space: Absolutely. So, I think to answer, it’s helpful to frame a timeline for CLD. So phase one was what I mentioned earlier where we didn’t get any funding. Phase two, assuming that things proceed on schedule, a draft RFP is gonna come out this summer. The final RFP will come out this fall, and our submissions are due in December.

At that point, NASA goes into blackout mode, and they will pick what we believe is two winners in the summer of ’twenty six. The reason we think they’re gonna pick two is just to have some redundancy to make sure that it’s a really monumental decision for them to bring down the ISS and have a replacement. So they obviously wanna make sure that there is a viable solution to still maintain, you know, NASA presence in in orbit. We have taken a very different approach to our competition to doing this, and I will say to start off, it is by virtue of JED’s funding. So we are 100% funded by JED today.

There’s no external capital. That’s gonna change. We can certainly talk about that. But today, by virtue of having Jed’s capital, we took a very different approach, which is we’re just gonna go and build hardware, right, instead of focusing on design. And so we have a our MVP called Haven 1, which is a smaller space station.

It’s designed to have four astronauts on orbit at any point. We’re gonna fly four missions, ten day durations over a three year useful life. We’ve publicly stated that we plan to launch Haven one on a Falcon nine next summer, and we also intend to fly our first crewed mission next summer as well. The reason for doing that is, you know, one, to prove to NASA that we can actually do it and we actually build hardware and hopefully, you know, fly and return a crew back back onto Earth. And at the same time, we will also then prove out the commercial model and the commercial market for this offering.

And so I think by virtue of actually building hardware even before the contract is awarded, it just proves NASA that we will be the quickest to get to market when it’s time for them to decommission the ISS.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Great. And I wanted to talk about Haven one as well, the time line for launch there. Where are you at in the production process, And what gives you some confidence in that time line as well?

Sid Harry Heron, Chief Financial Officer, VAST Space: Absolutely. So with BaaS, I think one of the things that really sets us apart is that everything we do is very, very methodical, and everything’s done to sort of derisk the next stage of the evolution. One gigantic step back, we are vertically integrated. So apart from two components that we outsource, everything else that you see at VAST is built, manufactured, sourced in The US. So we really view ourselves as America’s next base station.

What that vertical integration enables us to do is, a, be super low cost, b, is highly iterative where we have our engineers sitting next to our machine shop, iterating our designs constantly. We don’t outsource any of it. And so we can actually pivot and make sure we’re using the newest technology as it becomes available. What we have done in phase one, if you look at our social sites, you’ll see it. We have built a primary structure, which is the outside of Haven 1, and that’s currently being pressure and load tested at our test site in Mojave.

At the same time, we just posted it today on on LinkedIn and all our social as well, is we’ve also started to build our flight units. The one that’s being tested in Mojave is a qualification unit. The one that’s, you know, in in house right now is our flight unit that will actually fly up. So first step is primary structure. Second, this summer, we intend to launch a small satellite called Haven Demo.

The purpose of Haven Demo is to test all of our avionics and our software technology. That will go on orbit in maybe maybe three to four months to make sure everything works. And then our goal is by the December year to have a fully integrated spacecraft. We then have signed up with NASA, and they’re already paying for testing at that Lundbrook facility early next year. And then the goal is to ship it off to SpaceX and be ready to launch next summer.

So our point is test everything at each stage of its evolution, make sure it works, not just

Mike LeChac, Aerospace and Defense Analyst, KeyBake: completely swing for the fences so we can fix things as we go along, which again, by being vertically integrated, we have the ability to do so. Great. And with Haven one, you’re building on it with Haven two in 2028, I believe, is when it’s expected. What kind of enhancements are you gonna make over the legacy design with Haven two?

Sid Harry Heron, Chief Financial Officer, VAST Space: Yeah. It’s a good question. So I think that just goes back to the whole philosophy of incremental change and incremental benefits and improvements. So Haven two and our renders that we’ve shared publicly is basically a supersized version of Haven one. So it’s taking a very similar architecture, expanding it, and given NASA’s limitations on budget, so for example, the ISS cost between $100,000,000,000 to $150,000,000,000 to to get up in orbit, we’re not gonna get that kind of funding from NASA.

And so our view is that we intend to launch Haven two module one up in the end of twenty twenty eight. And then every eight to twelve months after, we’ll have subsequent modules going up. They will attach in space. And ultimately, with each module we add, we’ll have more power, more cradle, capacity, more crew capacity. And then over time, we’ll also close a lot of the life support systems.

So ultimately, we’ll be fully closed loop and fully self sustaining similar to the ISS at a fraction of the cost.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: And could you talk a bit about the competitive landscape, within commercial space stations? Are there some there are some other companies that are aspiring to build space stations of their own. What sets VAST apart? Is it the design that you have or the progress that you’ve made to date? Anything you could talk about the competitive landscape?

Sid Harry Heron, Chief Financial Officer, VAST Space: Yeah. So we obviously have great respect for our competitors. I think to to really just slow it down as simply as possible, number one is vertical integration, right? So the fact that we actually control our own destiny, we’re not reliant on third parties to manufacture big elements of our space station, it really comes down to execution. And again, by being vertically integrated, we are much, much more low cost.

And one of the key requirements for NASA for CLD is, is this company commercially viable, right, and does this company actually have the potential to make money and not be completely dependent on NASA for its funding? Our models and our projections show that we will actually be highly cash generative, and we think that’s totally appealing. The second is our team. So we’re about seven fifty strong right now. A lot of our talent, including our CTO and lead engineers, all come from SpaceX.

So it’s a very SpaceX oriented culture at VAST in terms of, you know, going fast, being low cost, being efficient, being creative. I think that gives us a lot of credibility with SpaceX as our partner as well as with NASA. And so we think the quality of our team is is incredible. And I think the last thing I’ll mention if you put those two things together is unlike our competition where each one of our key competitors has multiple lines of business they’re focused on right now, we’re monotony focused on space habitations. That’s our reason for existence, and we have all seven fifty people trained on one solution and one vision.

So that’s a true nonstop.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Well, that leads me into my next question with SpaceX and wanted to ask about your relationship there with the company. Obviously, you use them on the launch side. How do you how do you view them? Is it a competitor or is it a partnership with SpaceX?

Sid Harry Heron, Chief Financial Officer, VAST Space: Yeah. I think as everyone in this industry knows, Elon can decide to do what he wants to do when he decides what he wants to do, and that can change at any point in time. I think our assumption today is that SpaceX will unlikely bid for CLD. It’s a non zero probability, of course. But we picked them as our launch partner, a, because, again, it’s a very similar ethos in terms of the approach to the industry.

A lot of our talent came from SpaceX, as I mentioned. And for us, we think about the longer term view, which is with Haven one, we plan to launch it on on a Falcon nine. We have already, you know, made, you know, several payments for our first mission to fly up on a Crew Dragon. We have a deposit for a second Crew Dragon. And then the goal is for Haven two module one to launch up on Falcon Heavy.

And then ultimately, we are designing for Starship as well. So we do believe Starship is going to be commercially viable in the near term. And once that does come online, that just completely unlocks the potential of what we can do as well. So our view is that we’re a partner to SpaceX, and we think that we add a lot of value to them as well, not that they need us, but I do think it’s helpful as they think about their ambitions to Mars and other longer duration missions by having Haven two up in orbit and functioning, it actually provides a good trading ground for NASA and other global astronauts to get flight experience before they take a longer longer journeys. Plus, we provide revenue to them for

Mike LeChac, Aerospace and Defense Analyst, KeyBake: the Crew Dragons. So Absolutely. And, you know, your plan to launch with, on a Falcon nine. Can you describe the process of picking a launch provider? Is it simply launch availability?

Because I know it’s kind of supply constrained today. But any other considerations that you take into account?

Sid Harry Heron, Chief Financial Officer, VAST Space: I think for us is we want to be a low cost provider. SpaceX is a low cost provider. It comes to launch. But ultimately, you know, it’s not just hardware we’re launching. It’s human beings.

Right? And so we had to pick someone that actually had the most reliable and most cost effective crew transportation platform as well. And so that made it really easy for us to pick SpaceX.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Okay. And, you know, VAST was founded back in 2021. And since then, the space sector has made some significant progress and achievements. Has that kind of cadence of secular growth surprised you at all versus, you know, your initial expectations in the company’s early days, whether that be on the demand side for for research or space applications, the feasibility to actually have a vehicle to launch on, anything you’re thinking about there that’s changed in the past five years?

Sid Harry Heron, Chief Financial Officer, VAST Space: Yes. It’s really interesting, right, because I think capital is another big constraint out there. So if you think about when we were created in ’twenty one, we were in SPAC mania and SPAC boom, right? And so capital was plentiful. And a lot of companies obviously went public through the SPACs, some successfully, some not so much.

Rocklat is a great example of a company that made it through the trough and is striving right now. And so we saw a boom. We then saw a buzz with a lot of SPACs you know, not performing as well. Capital went out of the sector. I think right now, we’re seeing a lot more momentum coming back into it driven by, I think, an administration that people feel will be a lot more space leading and space forward, within the global governments and not just The US, but other government agencies that we’re in active discussions with really have very ambitious space programs, including for human spaceflight.

So we feel really good about that. And then I think as we go along, having SpaceX, RocketLab and others that have brought launch costs down, it just creates that much more of a conducive environment for the unit economics traditionally makes sense. And then our belief is ultimately, you know, Starship unlocks so much. So there’s a lot of momentum right now. We’re really excited, and, you know, we’re very fortunate that with this pivotal point right now where the momentum coincides with when NASA’s hopefully gonna pick a winner, and we get to benefit from that.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Great. And looking at the three primary objectives of the missions, you have the government and private astronauts, and then you also have payload missions that you’re planning to launch in the future. Could you break down those three buckets and what ones you see the most growth in? And, just, yeah, long term going forward, what one are you targeting?

Sid Harry Heron, Chief Financial Officer, VAST Space: Absolutely. So I’d say step one is the beauty of our market and our industry is that we’re replacing something that already exists. Right? So it has been a proven demand from not just NASA, but other global space agencies and private astronauts to fly to the ISS. And so our goal is to replace something that already exists in a more cost efficient manner.

And so I’d say initially, a lot of our focus is obviously on NASA being our anchor tenant, Right? That is absolutely critical. But then having whether it’s JAXA, CSA, ESA, UAE, Saudi Arabia, all these other countries, you know, being part of our our customer base. When it comes to payload, we certainly you know, everything we do on Haven is all about science, it’s all about research, that’s what the governments care about. The one area that we feel really bullish on long term, but we have not modeled into our projections is in space R and D and manufacturing, right?

Because right now, the ISS provides multiple constraints, whether it’s launch cost, infrequency of cadence to fly, NASA co owning some of your IPs. Right? So our goal and our belief is that by having Haven to up in orbit over a prolonged period of time, running some of our own research and experiments, we will create an environment that’s conducive for folks to actually conduct more experiments on orbit. Similar to what BARDA is doing, right, BARDA is a lot more autonomous and focused on one vertical. Our belief is it’s gonna be more human tended and across multiple verticals over time.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: And shifting to the financials, in terms of, you know, what you’re comfortable sharing, can you share, your your cash position or maybe the funding that you’ve received to date? Anything that you’re that you’re comfortable sharing there.

Sid Harry Heron, Chief Financial Officer, VAST Space: Yeah. So, simple simple answer is we’re % funded by Jed, to the tunes of hundreds of millions of dollars. I’m not gonna disclose the amount of funding, but it’s it’s very, very significant, and that’s what’s helped us obviously achieve our plans. For us, it’s not a question of maintaining cash in the balance sheet. It’s more a question of JED funds as we progress and as we hit certain milestones.

So it’s an ongoing source of funding for us. It’s obviously gonna change, you know, once we raise outside capital. But today, we don’t actually manage for sort of cash on the balance sheet.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: And I think you’re able to do things a lot cheaper than some peers because of your vertical integration. Could you talk to that in in where your facilities are laid out and what advantages that gives you over the competition?

Sid Harry Heron, Chief Financial Officer, VAST Space: Yeah. So so everything’s being built in in our facilities in Long Beach. We have three three buildings in Long Beach. We in source everything. So I’ll give you one example.

One of our key competitors is building has outsourced their primary structure. So same thing that we have being tested in Mojave. They’re paying, you know, hundred and €10,000,000 for two of those modules. We are able to manufacture that fully loaded in house at five to 10 x cheaper than them. Okay.

Right? So that that that is a massive competitive advantage because, again, we’re just building everything in house.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Great. And I wanted to get your take on future profitability. So if we look out ten years, Haven two is is up in orbit. How how much can margins be? I’ll leave it open ended.

Sid Harry Heron, Chief Financial Officer, VAST Space: Yes. So I won’t comment on margins. And what we’ve tried to do as we think about our future and our funding needs and such is build a model that I think is actually very, very conservative where we’ve used NASA as our anchor tenant. We have used other space agencies for, you know, other inter independent missions, a little bit of revenue from payload, a little bit of revenue from brand partnerships and sponsorships because we

Adam Spice, Chief Financial Officer, RocketLab: we have

Sid Harry Heron, Chief Financial Officer, VAST Space: a lot of brands that wanna work with us right now, lot of media companies that wanna work with us, which I think is really, really exciting. And we’ve actually tried to be as conservative as possible and assume that, you know, we don’t get all of NASA’s budget. NASA’s budget does not improve or increase over time, which we think that model does need to get, you know, changed on NASA front. We’ve also modeled in node decreases in launch costs to be very, very conservative. And our belief is that at full utilization, this is a highly cash generative business.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Great. And I wanted to get your take as well on the Doge and the new administration. How does that impact the the business, the space sector in general, the supply chain, and how does it impact VAST?

Sid Harry Heron, Chief Financial Officer, VAST Space: It’s hard to tell. Right? Because, I mean, things are changing so rapidly, I think, every day. You know? Our our hope is that Jared Isaacman does get confirmed, and, you know, his confirmation hearing hasn’t been set yet.

But our belief is that he is going to come with a very SpaceX VAS like approach, which is low bureaucracy, moving quicker while maintaining safety. And I think the way we are built, we are less Boeing and NASA like in how we’re built, and we’re more SpaceX oriented. And so we actually think it’ll it’ll favor our our approach.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Great. And if if we look forward again, when there’s multiple space stations that are being operated by different companies, what’s kind of the what will set people apart? You know, why would they choose VAST over company x, y, z? What are the the key differentiators as you think about the design process that, that you’ll be competing for in the future?

Sid Harry Heron, Chief Financial Officer, VAST Space: Yeah. So it’s an it’s an interesting question. I don’t believe that and VAST does not believe that if you’re purely replacing the ISS, that there’s room for multiple providers for that one use case simply because NASA is such a big source of of funding in terms of being a revenue partner that they’re not gonna be able to ultimately support multiple stations over time. They don’t have the budget to support it. They’re on the budget to fly, you know, crew and cargo to it.

And so we think, ultimately, there’ll be one winner. We expect to to be that winner because of our approach. And we we also think we’ll be the quickest ones to get to market to to replace the ISS. That doesn’t mean that over the longer term and that’s something we’re really excited about because, again, our view is winning CLD, replacing the ISS is not a end all and be all. It’s just phase one of a much, much larger vision.

And so longer term, could we have applications for the DOD? Could we have applications for, you know, independent nations and maybe wanna have their own modules? Could we have applications for in space r and d manufacturing, You know, multiple planets, multiple, you know, orbits. And so we think it’s a much, much bigger prize ultimately. And our goal is to be the first mover, plant our flag, and then because of our nimble approach, kind of evolve with the market in many ways shape the way the market grows as well.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: We’ve got a few minutes left here. Any questions from the audience?

Sid Harry Heron, Chief Financial Officer, VAST Space: I’m holding a moment between before cocktails, so I don’t think we’re gonna get there.

Mike LeChac, Aerospace and Defense Analyst, KeyBake: Alright. Well, Sid, thank you so much for being here. This concludes the space tech session, and thank you all for attending. Thank

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