On August 11, Rocket Lab USA, Inc. fell over 7% in after-hours trading, with turnover of $180 million, following the release of its Q2 fiscal results.

The sell-off was triggered by the company's Q3 GAAP gross margin guidance of 29%-31%, which fell substantially short of the analyst consensus of 37.6%. Management attributed the margin compression to a shift in product sales mix. Additionally, Q2 EPS came in at a loss of $0.08 per share, missing the Street estimate of a $0.06-$0.07 loss.

Despite the margin disappointment, the quarter showed notable strengths. Revenue reached a record $234.1 million, up 62% year-over-year and beating estimates. Backlog surged to a record $2.36 billion, bolstered by recent defense wins including a $397 million US Space Force Flatellites contract and a $266 million missile defense multi-launch contract. Q3 revenue guidance of $250-$265 million also exceeded the $238.5 million consensus. However, the margin outlook overshadowed these positives, prompting investors to take profits after the stock's strong run-up ahead of earnings.

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