So onto a huge milestone for Neutron that I’m really excited to share. We’ve completed our first Archimedes engine. The engine you see here is already shipped out the door of our engine development complex in Long Beach, and is fitted to the test stand at NASA Stennis. What we’re taking to the stand is very close to a flight-like engine, and with all of the production infrastructure stood up alongside the engine’s development. We believe the team is in the optimal position to be able to make quick iterations to Archimedes based on what we learn through testing. Archimedes is a really unique engine, given its trust class engine cycle and propellant combination. It’s an oxidizer-rich stage combustion cycle powered by liquid oxygen and methane.
One of these engines equals the same amount of thrust as roughly three Electron rockets. On top of that, we’ve designed Archimedes to stand up to a target maximum reusability of 20 flights per engine. Each Archimedes is designed for 165,000 pounds of Thrust for a combined lift-off on the first stage of 1,450,000 pounds thrust. The turbo pump has an 18,000 shaft horsepower, and we picked an operating point that is optimized for reusability over maximum performance, which will allow us to operate this engine at a much lower stress level as compared to others. And like I said, it positions us well for rapid development and qualify — for a rapid development and qualification testing campaign. Integrated within Archimedes 2 all 3D — all-new 3D printed parts that come off their factory floors at Long Beach.
Like its turbo pump, pre-burner and main combustion chamber components, valve housings, and engine structural components, all of these the same parts that continue to be printed as we build out more engines to this one in parallel. We’ve got about four sets of engines on the go right now. Perhaps the biggest point I want to make here too is that we haven’t taken any huge concessions just to make fire for the sake of it. We’ve been very intentional and methodical with Archimedes making sure to refine its design so that now we’re at a point that we’ve got an engine that can be readily productionized long term. A test-ready Archimedes is really the inflection point for Neutron’s development. Now that Archimedes is on the stand, the real fun begins, and we’ve started the test campaign in earnest.
Having a complete engine, we’ve gone through some of the biggest unknowns in the development program and can update the schedule for its first flight accordingly, which we’ve adjusted to first launch no earlier than mid-’25. We run highly aggressive schedules at Rocket Lab. We always have and all of our programs – we are looking at all our programs and that’s why we’ve been able to deliver new capability to the market like HASTE, Electron, CAPSTONE, and more industry-leading timeframes. Getting Neutron to the pad this year was an ambitious green light schedule that we had a path to closing if every single aspect went exactly according to plan. But as we’ve always said, this is a rocket development program and this is always filled with gremlins, some in new control and some not.
In this case, we’ve made the call to take additional time, not only to just bring a minimum viable product engine to the stand but to be very intentional and methodical about setting Archimedes up for success in the long term. This means rigorous component level testing before the first hot fire and refining a design that can be productionized long term. We’ve also taken the time to scale up the manufacturing and test facilities to support full scale production, and built a knowledgeable and experienced team ready to build, test, and fly Archimedes at the pace that customers are demanding once we bring Neutron to market. All of this takes time to get ultimately right. So that drove a schedule which now closes mid-next year. We have a proven track record of delivering technology and capabilities to market on rapid and often record breaking timelines.
And Neutron still coming to market faster than just about any other rocket program that I know. We believe Neutron will be a category defining launch vehicle serving critical market needs, and we’re excited to move into the final phase of development. While the propulsion team has made leaps and downs on Archimedes, the structural team — our test team is also putting together big wins on the board as well. We’ve got some of the Rocket’s largest composite panels and tech sections collecting across all of our composite facilities. We’ve completed the first Neutron’s pairing panels with a set of full panels coming off the composite’s — coming out of composite’s securing and expected to be assembled together in the coming weeks. These are large almost 8 meter-long sections that mount Neutron’s canards and house the payloads inside the rocket.
So they’re really significant pieces of Neutron’s build. The internal tank structures on Neutron’s second stage also come together, having completed an assembly test run earlier in the quarter. This is the second Stage 2 that we built for Neutron after the development stage we built and tested last year. Putting the pieces together — putting all the pieces of Neutron’s together is not the same as assembling Electron, which the team obviously, regularly does by hand. So completing the assembly test run for Neutron, and now moving on to final assembly, lamination and integration of the pieces into flight configuration marks a major progress in the vehicle’s development. The size and the scale of the structure and the pieces we’re working with here is important to show.
So here are some more images of the carbon composite tank builds taking place across our various facilities. And it’s fair to say some amazing work from the team here pushing hard to get this all together. Speaking of launch, Launch Complex 3 up in Virginia is really starting to take shape. Concrete works for Neutron’s launch mount have been completed and the concrete foundations for the site’s liquid propellant and gas storage tanks have gone in. Long lead propellant tanks are soon to be delivered to site, and we’ll see our propellant farm stood up in the coming months. We also installed the 278 foot water tower. Visually, we’ve changed the skyline of Wallops waterfront forever. So it’s an exciting new feature for LC3. We’ve made good progress on all other Neutron facilities in the area as well, including Neutron’s Assembly & Integration Test Complex just outside the Wallops gate, another set of concrete foundations have gone down and we’ve got the skeleton structure up for our next building on the site.
Construction is really moving nicely along in Virginia, which is great to see. So that wraps up the business highlights for 2024 so far. So from here, I’ll hand it over to Adam to take us through the financial updates.
Adam Spice: Great. Thanks, Pete. First quarter 2024 revenue was $92.8 million, which was towards the low end of our prior guidance range, reflecting significant year-on-year growth of 69%, and sequential growth of 55%, driven by strong contribution from both business segments. Our launch services segment delivered revenue of $32.7 million in the quarter from four launches, in line with guidance of $32 million to $33 million, representing sequential growth of 287%, driven by a return to normal launch operations after Q4 (ph) was impacted by our September anomaly. The average selling price per launch was $8.2 million, well above our target average selling price of $7.5 million, the result of a favorable mix of government and complex commercial missions.
Our current backlog continues to support our target average revenue per launch with some variability tied to volume purchase commitments, launch location and mission assurance requirements. Our Space Systems segment delivered just over $60 million in the quarter, which was towards the low end of our prior guidance range of $60 million to $65 million, but reflecting sequential growth of 17%, driven primarily by growth in our MDA contract revenue, albeit slightly less than was expected. Now turning to gross margin. GAAP gross margin for the first quarter was 26.1%, slightly above the high end of our prior guidance range of 24% to 26%. Non-GAAP gross margin for the first quarter was 31.7%, which was also above our prior guidance range of 29% to 31%.
GAAP and non-GAAP gross margin improvements relative to our guidance reflects continued efficiencies in both our launch and satellite manufacturing businesses. We ended Q1 with production production-related headcount of 872, up 20 from the prior quarter. Turning to backlog. We ended Q1 2024 with $1.02 billion of total backlog with Launch backlog of $215.6 million, and Space Systems backlog of $799.7 million. Relative to Q4 2023, total backlog was down only 3% sequentially, or $31 million, despite a $93 million quarter of revenue. Strong bookings continued in our Space Systems business, highlighted by initial orders related to the long-term supply agreement with a tier-one prime contractor that Pete alluded to earlier, and a follow-up booking for reaction wheels supporting a mega constellation.
For Launch, backlog was down 13% sequentially, or $32.7 million as we drew backlog down against a record number of launches in the quarter. We continue to cultivate a healthy pipeline, including multi-launch deals that can be lumpy given the size and complexities of these opportunities. We expect approximately 42% of current backlog to be recognized as revenue within 12 months. Turning to operating expenses. GAAP operating expenses for the first quarter of 2024 were $67.3 million, below the low end of our guidance range of $73 million to $75 million. Non-GAAP operating expenses for the first quarter were $56.4 million, which was below the low end of our guidance range of $62 million to $64 million. The increases in both GAAP and non-GAAP operating expenses versus the fourth quarter of 2023 were primarily driven by continued growth in headcount and prototype spending to support our Neutron development program and related infrastructure to support Neutron and our 18 satellite SDA contract, partially offset by shifting R&D resource to production support for space systems.
In SG&A, GAAP expenses increased $2.9 million quarter-on-quarter, largely due to a $1.6 million increase in stock-based compensation along with an increase in outside services, partially offset by a decrease in the change in contingent consideration related to our PSC acquisition due to a lower average stock price in the quarter. Non-GAAP SG&A expenses increased by $1.9 million, primarily due to the increase in outside services included in year-end audit expenses, legal fees, and corporate IT and security spending that further enabled efficient scaling of the business. Q1 ending SG&A headcount was 263, representing an increase of 16 from the prior quarter. In R&D specifically, GAAP expenses were up $1 million quarter-on-quarter due to Neutron prototyping, materials and headcount increases.
