Rocket Lab USA, Inc. will release its Q3 FY2025 earnings report after the U.S. stock market closes on November 10. Investors are focused on the progress in revenue expansion and narrowing losses, as well as the continuity of the dual engines of space systems and launch services. According to data sourced from the Tiger Brokers App, Rocket Lab's third-quarter revenue is projected to be $152 million, a year-over-year increase of nearly 45%; the adjusted loss per share is expected to be $0.10, a year-over-year decline of over 4%.
Review of Last Quarter
Last quarter, the company achieved a revenue of $144.5 million, an approximate 36% year-over-year increase; the gross margin was 32.10%, with a GAAP net loss attributable to the parent of about $66.41 million, showing limited year-over-year and quarter-over-quarter improvement, with a net profit margin of -45.96%. Adjusted earnings per share were -$0.13, a year-over-year decline of approximately 62.5%. The pace of launches and space system deliveries was the key driver. By segment, space systems revenue was about $97.85 million, accounting for approximately 68% of total revenue, while launch services revenue was about $46.65 million, accounting for approximately 32%, reflecting a stable structure showcasing the synergy of "systems + launches."
Outlook for This Quarter
Electron and Medium-High Density Mission Windows
This quarter is expected to see a launch pace primarily driven by Electron. If medium-high density windows are maintained, the company’s order confirmation and milestone acceptance in launch services will drive an increase in the proportion of launch revenue. Due to the significant variability in pricing and mission complexity for launch services, the gross margin per mission is highly elastic. Once missions are concentrated, the gross margin could benefit from economies of scale and the sharing of fixed costs in ground systems.
To enhance the stability of performance, the company typically confirms part of the systems and services revenue before and after launches, which coordinates with modular deliveries of space systems to smooth out quarterly fluctuations. Yet, an increase in launch density still hinges on the mission mix and the scale of non-cash expenses for net profit margin improvement. Combined with expectations of narrowing losses (EBIT is expected to improve year-over-year), the market believes the launch segment will not be a drag.
Pay attention to technical and mission risk management; any schedule changes could affect the timing of revenue recognition in the launch segment for the quarter. However, in the past few quarters, the company has improved task turnover efficiency by strengthening ground operation processes, thereby enhancing short-term performance certainty.
Space Systems Delivery Pace and Gross Margin Repair
Space systems remain the main revenue engine, contributing about $97.85 million last quarter, accounting for approximately 68%. If this quarter maintains a high delivery pace, based on the market's forecast of approximately $152 million in total revenue, space systems could continue contributing the bulk of the increment. This segment's order structure includes satellites platforms, components, and subsystems related to deep space/near-Earth missions. Enhanced product standardization helps stabilize gross margins.
The comprehensive gross margin was 32.10% last quarter, and if the product mix in space systems further shifts toward higher-value-added subsystems, gross margin is expected to gradually recover. Market expectations for narrowing losses this quarter are partly based on bulk deliveries in space systems and cost structure optimization, including upstream supply chain and manufacturing process improvements.
While pressure on net profit remains, marginal improvement is visible. Last quarter's net profit margin was -45.96%; if revenue growth and cost control are achieved this quarter, the net profit margin could improve significantly. Investors should focus on the structure of capitalized R&D and execution costs. If R&D enters the results transformation stage, improved cost efficiency will further support the rebound in profit margins.
Neutron and the Current Quarter's Impact on Medium to Long-term Opportunities
Although Neutron belongs to the medium to the long-term product line, relevant engineering milestones and the advancement of pre-contracts could impact current quarter expenses and capitalized R&D, thus indirectly affecting the income statement. Market expectations for EBIT improvement this quarter imply more controllable expense pacing on large-capacity projects.
Should key design or production milestones be achieved this quarter, they could lead to partner funding or phased revenue recognition, but overall, input still dominates; this requires stable cash flow from space systems and order execution in launch services to hedge short-term losses.
The impact on the stock price is more from investors' changing confidence in Neutron's commercialization timeline. Any positive engineering progress and client intent updates could enhance repricing for medium- to long-term revenue and gross margin structures.
Analyst Opinions
Based on recent market research on sell-side opinions, the bullish sentiment is high. Many institutions focus their core arguments on dual expectations of high revenue growth and narrowing losses: consensus expectations show total revenue this quarter at about $152 million, with a year-over-year growth rate of approximately 48%, EPS expected to improve to -$0.104, and EBIT loss projected to narrow to about $46.86 million. Research reports generally emphasize that space systems are the main growth driver, with launch services supporting the gross margin through mission density and delivery pacing. A representative viewpoint suggests, "Space systems maintain a high delivery pace and capture an advantage in the revenue structure, with improved execution stability in the launch segment aiding in profit margin improvement for the quarter." The basis for the bullish view lies in the certainty of revenue growth and gradual efficiency in cost management. Overall, the bullish proportion is higher than the bearish, with "high revenue growth + loss reduction" as the market's main theme, but still focusing on the impact of mission schedules and cost structures on short-term fluctuations.
This content is generated based on Tiger AI data and is for reference only.