Bloomberg Audio Studios, podcasts, radio news.

Bloomberg Audio Studios, podcasts, radio news.

We are live from Rocket Lab in Long Beach, and I.

We are live from Rocket Lab in Long Beach, and I.

Want to be honest with you guys. We're here because we've been on the road in Socow. But this is where the industries happened. What's started with a single name has boomed into thousands of startups, many here in Southern California and in commercial space.

Want to be honest with you guys. We're here because we've been on the road in Socow. But this is where the industries happened. What's started with a single name has boomed into thousands of startups, many here in Southern California and in commercial space.

This is how it started.

This is how it started.

SpaceX has become synonymous with commercial space. Elon Musk's company is a prolific launch provider, with around three hundred and eighty launches of the Falcon nine family of reusable rockets to date. The competition is starting to catch up, whether abroad or at home in Southern California.

SpaceX has become synonymous with commercial space. Elon Musk's company is a prolific launch provider, with around three hundred and eighty launches of the Falcon nine family of reusable rockets to date. The competition is starting to catch up, whether abroad or at home in Southern California.

When you look at sort of the companies that are coming out of this defense tech movement, a lot of them have been trained at places like SpaceX, or they got their start there, and then they're building new startups and deciding to build where there's a concentration of talent, which is in southern California.

When you look at sort of the companies that are coming out of this defense tech movement, a lot of them have been trained at places like SpaceX, or they got their start there, and then they're building new startups and deciding to build where there's a concentration of talent, which is in southern California.

Tam Mueller, one of the early founders at SpaceX, who actually brought rocket technology at Elion Musk because he likes to say you can't really throw a rock and also going to know I've hitting as SpaceX Alum working on another company.

Tam Mueller, one of the early founders at SpaceX, who actually brought rocket technology at Elion Musk because he likes to say you can't really throw a rock and also going to know I've hitting as SpaceX Alum working on another company.

Others have a home in SoCal take rocket Lab. It's an end to end space company providing launch services which designs and manufactures small and medium class rockets. It's had eleven launch missions so far this year. Elsewhere, another launch competitor is United Launch Alliance, which is transitioning from its previous rockets to the next generation Vulcan family. The Pentagon has brought several Vulcan launches to fly before the end of this year, but delays have put pressure on the company. It has launched two Vulcan rockets so far, neither has cracked reusability. Bezos's Blue Origin also has new Glen, a heavy lift orbital rocket, but it has yet to launch to space. Meanwhile, in Europe, delays and malfunctions left the continent unable to get to orbit with its own rockets for quite some time. The Arian six rocket, operated by the European consortium Arian Space, which lifted off early in July, was Europe's first Arian rocket launch in a year. Arian Space launched the final mission of its smaller Vega rocket on September fourth. In the age of commercial space, SpaceX is still the most reliable way to hitch a ride to Earth's orbit.

Others have a home in SoCal take rocket Lab. It's an end to end space company providing launch services which designs and manufactures small and medium class rockets. It's had eleven launch missions so far this year. Elsewhere, another launch competitor is United Launch Alliance, which is transitioning from its previous rockets to the next generation Vulcan family. The Pentagon has brought several Vulcan launches to fly before the end of this year, but delays have put pressure on the company. It has launched two Vulcan rockets so far, neither has cracked reusability. Bezos's Blue Origin also has new Glen, a heavy lift orbital rocket, but it has yet to launch to space. Meanwhile, in Europe, delays and malfunctions left the continent unable to get to orbit with its own rockets for quite some time. The Arian six rocket, operated by the European consortium Arian Space, which lifted off early in July, was Europe's first Arian rocket launch in a year. Arian Space launched the final mission of its smaller Vega rocket on September fourth. In the age of commercial space, SpaceX is still the most reliable way to hitch a ride to Earth's orbit.

And talking of SpaceX, a California state commission voted against a request by the US military to approve more SpaceX launches now. Commissioners expressed a concern about why SpaceX was not applying for a permit itself, and some also voice concern over working conditions at SpaceX. Elon Musk's increasing role in US politics as well a.

And talking of SpaceX, a California state commission voted against a request by the US military to approve more SpaceX launches now. Commissioners expressed a concern about why SpaceX was not applying for a permit itself, and some also voice concern over working conditions at SpaceX. Elon Musk's increasing role in US politics as well a.

New story that came out early this morning.

New story that came out early this morning.

We're going to dig deep into SpaceX throughout the show, but right now we're going to talk about one of SpaceX's competitors, rocket Lab, which is a rocket company and much more. It's a launch provider and it's where we're at. We're in the Long Beach headquarters. Also a focus on a company that has a home in southern California and in New Zealand. The company's CFO, Adam Spice, is with us. Thank you very much for hosting us, Thanks for coming. Let's start with the basics for the audience that might just be tuning in for the first time, wondering where we are. Rocket Lab is an end to end space provider, space launch services systems provider. Bring us up to speed on what that means.

We're going to dig deep into SpaceX throughout the show, but right now we're going to talk about one of SpaceX's competitors, rocket Lab, which is a rocket company and much more. It's a launch provider and it's where we're at. We're in the Long Beach headquarters. Also a focus on a company that has a home in southern California and in New Zealand. The company's CFO, Adam Spice, is with us. Thank you very much for hosting us, Thanks for coming. Let's start with the basics for the audience that might just be tuning in for the first time, wondering where we are. Rocket Lab is an end to end space provider, space launch services systems provider. Bring us up to speed on what that means.

Yeah, you know, we think that the space companies of the future are ones that aren't just a launch company or just a satellite company or just an operator of satellites. It's really all about providing an end d service. So what you're seeing here in Long Beach is really our headquarters. We make a lot of the rocket components here at rocket engines, the avionics.

Yeah, you know, we think that the space companies of the future are ones that aren't just a launch company or just a satellite company or just an operator of satellites. It's really all about providing an end d service. So what you're seeing here in Long Beach is really our headquarters. We make a lot of the rocket components here at rocket engines, the avionics.

And so forth.

And so forth.

So we have a pretty big footprint here in southern California, but we since expanded that and of course the company got started in New Zealand, but then expanded to the US and starting to expand further throughout the United States, including locations in places like Denver and Albuquerque and Stennis, Mississippi, and Silver Springs, Maryland, and of course a launch site in Wallaps Island, Virginia, and a facility in Toronto, Canada as well. So we've established ourselves a very broad footprint doing much more than just launch.

So we have a pretty big footprint here in southern California, but we since expanded that and of course the company got started in New Zealand, but then expanded to the US and starting to expand further throughout the United States, including locations in places like Denver and Albuquerque and Stennis, Mississippi, and Silver Springs, Maryland, and of course a launch site in Wallaps Island, Virginia, and a facility in Toronto, Canada as well. So we've established ourselves a very broad footprint doing much more than just launch.

An hqu here in Soco, which fits exactly what we're talking about.

An hqu here in Soco, which fits exactly what we're talking about.

Two launch systems. What are they and what are the differences?

Two launch systems. What are they and what are the differences?

Right?

Right?

So the vehicle you see behind you is Electron, and Electron is the second most frequently launched vehicle in the United States.

So the vehicle you see behind you is Electron, and Electron is the second most frequently launched vehicle in the United States.

It's launched fifty three times.

It's launched fifty three times.

So we've got a very, let's say significant lead in the small dedicated launch market, and we're developing a second vehicle, which is called Neutron, which will address the larger medium class launch market.

So we've got a very, let's say significant lead in the small dedicated launch market, and we're developing a second vehicle, which is called Neutron, which will address the larger medium class launch market.

Go, we dig into the practicalities and how difficult space engineering is. Where are we with Neutron, and what are some of the issues in the steps of getting it up and running.

Go, we dig into the practicalities and how difficult space engineering is. Where are we with Neutron, and what are some of the issues in the steps of getting it up and running.

Yeah, well, we're quite a ways along the path of Neutron, So we've been at it now for a little over three years. We announced the program when became public in August of twenty twenty one. You know, it's amazing to see a rocket program come together. You know, I hadn't come from a space background for joining the company about six and a half years ago. Just to see what it takes to pull together and pull off a rocket development program is absolutely staggering. The complexity, you know, not just from just the science, it is literally rocket science. I'm grateful every day that there's people who have dedicated their lives to developing these complex systems that are absolutely amazing.

Yeah, well, we're quite a ways along the path of Neutron, So we've been at it now for a little over three years. We announced the program when became public in August of twenty twenty one. You know, it's amazing to see a rocket program come together. You know, I hadn't come from a space background for joining the company about six and a half years ago. Just to see what it takes to pull together and pull off a rocket development program is absolutely staggering. The complexity, you know, not just from just the science, it is literally rocket science. I'm grateful every day that there's people who have dedicated their lives to developing these complex systems that are absolutely amazing.

So it's it's a very you know, it's a very detailed, very arduous task to get there.

So it's it's a very you know, it's a very detailed, very arduous task to get there.

And I think that's what's so exciting from a business perspective is the fact that if you can do it, you know, you're one of a few numbers of organizations in the history we've actually pulled it off. And so it creates a very defensible position because again space is very, very hard, and you know, we have the you know, the I would say, the challenge of wake it up every morning and doing battle with physics, but also doing battle with some of the most fierce competitors on the plan, including SpaceX. And so we look around our industry and we see we see bodies everywhere that we have to step over, and you know, it kind of makes you wake up every morning and kind of like, Okay, this is a serious business, Like we got to make sure that we make all the right decisions and be very efficient with our capital and very very focused on execution.

And I think that's what's so exciting from a business perspective is the fact that if you can do it, you know, you're one of a few numbers of organizations in the history we've actually pulled it off. And so it creates a very defensible position because again space is very, very hard, and you know, we have the you know, the I would say, the challenge of wake it up every morning and doing battle with physics, but also doing battle with some of the most fierce competitors on the plan, including SpaceX. And so we look around our industry and we see we see bodies everywhere that we have to step over, and you know, it kind of makes you wake up every morning and kind of like, Okay, this is a serious business, Like we got to make sure that we make all the right decisions and be very efficient with our capital and very very focused on execution.

I mean, you are the numbers guy. Let's just talk about capital efficiency. You have to spend in extraordinary amount of money. You took this company public, You're having to answer to a whole host of retail investors and more increasing the institution investors.

I mean, you are the numbers guy. Let's just talk about capital efficiency. You have to spend in extraordinary amount of money. You took this company public, You're having to answer to a whole host of retail investors and more increasing the institution investors.

What's it a.

What's it a.

Revenue run rate and where is the money coming from?

Revenue run rate and where is the money coming from?

Yeah, we're very fortunate that we've been able to get now to a scale. So Q two we generated over one hundred million dollars in revenue, so we really kind of now cross that threshold of scalability.

Yeah, we're very fortunate that we've been able to get now to a scale. So Q two we generated over one hundred million dollars in revenue, so we really kind of now cross that threshold of scalability.

We've shown that a model can scale.

We've shown that a model can scale.

I think it's very important that we've done it, not just on launch, because the launch represents about thirty percent of our revenues. Space systems actually represent seventy percent.

I think it's very important that we've done it, not just on launch, because the launch represents about thirty percent of our revenues. Space systems actually represent seventy percent.

And just on that when you say space systems is seventy percent of revenue, just in Layman's terms, what are you talking about.

And just on that when you say space systems is seventy percent of revenue, just in Layman's terms, what are you talking about.

So we sell a variety of solutions, So we sell subsystems that into the merchant market. So we sell things like you know, solar solutions for spacecraft. We sell radios and battery systems and composits and so forth. So we really are a very serious in materials merchant subsystem market. But then we also build full spacecraft solutions. So for example, we built full spacecraft for NASA than the action. In fact, we built a couple of spacecraft that are gonna be orbiting Mars and then not two distant view.

So we sell a variety of solutions, So we sell subsystems that into the merchant market. So we sell things like you know, solar solutions for spacecraft. We sell radios and battery systems and composits and so forth. So we really are a very serious in materials merchant subsystem market. But then we also build full spacecraft solutions. So for example, we built full spacecraft for NASA than the action. In fact, we built a couple of spacecraft that are gonna be orbiting Mars and then not two distant view.

Yes, this is big news for you recently, very big because you originally you weren't on that list and now you are.

Yes, this is big news for you recently, very big because you originally you weren't on that list and now you are.

Well, that's actually for the marge sample return, okay, so forwards sloper return. Yeah, that's and you're right, we were not included in the first but we were ultimately added to that program.

Well, that's actually for the marge sample return, okay, so forwards sloper return. Yeah, that's and you're right, we were not included in the first but we were ultimately added to that program.

So that's very exciting.

So that's very exciting.

But when you look at all the different programs that were across again not just subsystems, but we're actually making full satellites for including the Defense Department and their Space Development Agency. We want a contract to be the prime contractor for over five hundred million dollar contract. So it's actually the one thing that's most exciting for me is how quickly we've come from a very organic base to now building a very significant size revenue and getting again past that one hundred million dollars thresholder quarter.

But when you look at all the different programs that were across again not just subsystems, but we're actually making full satellites for including the Defense Department and their Space Development Agency. We want a contract to be the prime contractor for over five hundred million dollar contract. So it's actually the one thing that's most exciting for me is how quickly we've come from a very organic base to now building a very significant size revenue and getting again past that one hundred million dollars thresholder quarter.

And you talk about the electron behind us fifty three already put into space. How many launches are we looking at in terms of the next year, What sort of cadence you're trying to live up to.

And you talk about the electron behind us fifty three already put into space. How many launches are we looking at in terms of the next year, What sort of cadence you're trying to live up to.

Well, you know, we've indicated fifteen to eighteen launches this year. We've launched eleven times so far, so we've got a big Q four coming up. And then when you look at the kind of the rate going to next year, we see growth off of that and a lot of it's really not depending on how many rockets we can build.

Well, you know, we've indicated fifteen to eighteen launches this year. We've launched eleven times so far, so we've got a big Q four coming up. And then when you look at the kind of the rate going to next year, we see growth off of that and a lot of it's really not depending on how many rockets we can build.

We can build a lot of rockets we could build. You know, we've sized ourselves three D printing a whole on We're three D printing a lot of stuff here. We could build.

We can build a lot of rockets we could build. You know, we've sized ourselves three D printing a whole on We're three D printing a lot of stuff here. We could build.

What is the limiting factor?

What is the limiting factor?

It's really the market at this point. It's really the market. We can build as many rockets as the market demands. But it's a new market, it's a nascent market. I think, you know, it just takes time for these markets.

It's really the market at this point. It's really the market. We can build as many rockets as the market demands. But it's a new market, it's a nascent market. I think, you know, it just takes time for these markets.

I want to get into this the business of space and just bear with me.

I want to get into this the business of space and just bear with me.

Carry elon, musk, I'm bear with you.

Carry elon, musk, I'm bear with you.

A lot has a big gap right over you, a big sort of lead with SpaceX, and he talks about this idea that the business of sending payload to orbit tops out for them at three billion dollars. Now that's a scale that you're not near yet, but it makes it seem like there's a gap. There's a ceiling on how much money you can ever make in this business.

A lot has a big gap right over you, a big sort of lead with SpaceX, and he talks about this idea that the business of sending payload to orbit tops out for them at three billion dollars. Now that's a scale that you're not near yet, but it makes it seem like there's a gap. There's a ceiling on how much money you can ever make in this business.

What do you make of that?

What do you make of that?

I think it depends on how you define this business, right, I think, yeah, even as we've seen the space X, I don't think they stopped it just launch. So launch is a very critical part of the ecosystem, but it's not the biggest piece of the ecosystem. So the applications and creating that ongoing revenue stream from applications and having a constallation orbit that is really what people are shooting for. Is is where the real scale for this industry comes from. And that's exactly what we're oriented around. We're all about being an end to end space company where we can design the spacecraft, we can build the spacecraft in a very vertically integrated way with our own subsystems, we can launch them on a variety of rockets, then we can operate those on orbit. So it's a very very important thing to think about yourself as an end end player because again, if you're a bespoke kind of one solution provider, it's probably not the path to survive ability for.

I think it depends on how you define this business, right, I think, yeah, even as we've seen the space X, I don't think they stopped it just launch. So launch is a very critical part of the ecosystem, but it's not the biggest piece of the ecosystem. So the applications and creating that ongoing revenue stream from applications and having a constallation orbit that is really what people are shooting for. Is is where the real scale for this industry comes from. And that's exactly what we're oriented around. We're all about being an end to end space company where we can design the spacecraft, we can build the spacecraft in a very vertically integrated way with our own subsystems, we can launch them on a variety of rockets, then we can operate those on orbit. So it's a very very important thing to think about yourself as an end end player because again, if you're a bespoke kind of one solution provider, it's probably not the path to survive ability for.

Those institution investors sat watching and indeed retail investors who are excited about putting money into rocketing very excised. What tell us about how the market scales up? What is needed? You're saying you can get these, you can build these as quickly as the market wants. Well, what gets the market to the next iteration to the size that you want to be able to serve it?

Those institution investors sat watching and indeed retail investors who are excited about putting money into rocketing very excised. What tell us about how the market scales up? What is needed? You're saying you can get these, you can build these as quickly as the market wants. Well, what gets the market to the next iteration to the size that you want to be able to serve it?

That?

That?

I think the most exciting thing about what's going on in this market right now is that you think about what typically drives the hockey stick growth of characteristic of an industry, and it's usually commercial. But I think we're in a really interesting period where we're actually seeing the hockey stick being derived building from commercial opportunities. So everyone seeing what SpaceX is doing with startlinks, that's kind of old news to a certain extent. But then you see Amazon Kuiper, you see tallesid light Speed, you see the SDA constollation. So you're actually seeing a combination of government and commercial all presenting hockey stick opportunities. And that's really You're not a one bet kind of situation right now. There's lots of different cliers you can put your fired.

I think the most exciting thing about what's going on in this market right now is that you think about what typically drives the hockey stick growth of characteristic of an industry, and it's usually commercial. But I think we're in a really interesting period where we're actually seeing the hockey stick being derived building from commercial opportunities. So everyone seeing what SpaceX is doing with startlinks, that's kind of old news to a certain extent. But then you see Amazon Kuiper, you see tallesid light Speed, you see the SDA constollation. So you're actually seeing a combination of government and commercial all presenting hockey stick opportunities. And that's really You're not a one bet kind of situation right now. There's lots of different cliers you can put your fired.

Too, Adam.

Too, Adam.

There's so much more to come, as you know, in this hour. But before we let you go, a word for SpaceX. What they enabled your company to do, particularly here in California, Well.

There's so much more to come, as you know, in this hour. But before we let you go, a word for SpaceX. What they enabled your company to do, particularly here in California, Well.

I think you have to give them, you know, amazing credit for what they've accomplished.

I think you have to give them, you know, amazing credit for what they've accomplished.

They really kind of are a I would.

They really kind of are a I would.

Say, kind of a an inspiration and aspirational target as well.

Say, kind of a an inspiration and aspirational target as well.

Like we've we've seen that it could be done right.

Like we've we've seen that it could be done right.

I think that's the one thing is we don't We wake up every morning understanding the challenge that faces us, but we're not intimidated by it.

I think that's the one thing is we don't We wake up every morning understanding the challenge that faces us, but we're not intimidated by it.

Never.

Never.

That's one thing that this company does not ever get is intimidated by competition, whether it's SpaceX or anybody else.

That's one thing that this company does not ever get is intimidated by competition, whether it's SpaceX or anybody else.

So we're up for the challenge.

So we're up for the challenge.

It's exciting and there's a tremendous amount of opportunity, and I think we're in a great position to exploit it.

It's exciting and there's a tremendous amount of opportunity, and I think we're in a great position to exploit it.

You were up early for us. We give you great thanks for it, Adam. It's wonderful to have us here and you here with us. Adams by CFO of Rocket Lab

You were up early for us. We give you great thanks for it, Adam. It's wonderful to have us here and you here with us. Adams by CFO of Rocket Lab