Rocket Lab USA, Inc. (NASDAQ:RKLB) Q4 2022 Earnings Call Transcript

Peter Beck: Yes, hi Suji. Yes, so of the 14, 15, it kind of depends a little bit on readiness with customers, but — and it could be ending up to sort of six launches out of that site this year like I said depending on readiness of customers. Yes.

Suji Desilva: Okay. And the incremental opportunity Peter? US government or other specific division?

Peter Beck: Yes, yes, yes sorry. Yes, an incremental opportunity the one thing that we built that pad for was kind of a rapid response for our US government customers. And we are seeing that capability really being valued. And more on that shortly I would say. But it certainly will be — it certainly opens up I would say much greater access to doing defense or national security, which is frankly why we intended to build that pad.

Adam Spice: Yes Suji. Real quick on the impact of having the Virginia launch site now operational, there’s some variable incremental costs that come along with launching from that range because we don’t own the range like we do in New Zealand. But at the same time, we are seeing a strong degree of acceptance or willingness for customers to pay a premium to launch out of that range for obvious reasons, right? We’re — it’s three, three and a half hours outside of D.C. and there’s a lot of benefits that come from a logistics perspective of having that in the backyard of some of our largest customers. So, I think it’s — for us it’s hugely enabling and it’s something that our customers are — seem to be very, very grateful that it’s come online now. So, I think it’s going to be long-term to be a very busy range for us. And I think we’re well set up to kind of leverage that into more and more US government business.

Suji Desilva: Okay, great. Thanks for that Adam. And then as my follow-up with the backlog growing here to $500 million should we expect additional direct sell related opportunities like GlobalSat MDA or maybe was that a one-off just to kind of set the expectations for what could be coming now that you successfully won that?

Peter Beck: Yes, I mean — and this kind of goes to the pace at which the backlog grows is we tend to be working on fewer larger deals now than perhaps — as Adam mentioned before the quality of our backlog is super important to us. So, we’re always working on some pretty significant deals. So, I would hope that we would continue to see those kind of larger lumps dropping as we close those out.

Adam Spice: Yes, I think Suji I mean maybe a little bit more on that as well. Like — so, obviously, we’re very happy with what we’ve been able to secure for this type of application and certainly we think that we’re at the earlier stages of what this ultimate application could look like for us. But we’re also very selective in who we work with and we’re not looking to basically go work with every kind of random opportunity out there looking to take advantage of this direct-to-mobile type of opportunity. So, we’re pretty focused on staying engaged with the absolute Tier 1 of customers on this type of opportunity. So, yes, we see more opportunities, but it’s probably going to be a very concentrated customer area if you will.

Suji Desilva: Okay, that’s helpful. Thanks guys.

Operator: The next question comes from Matt Akers with Wells Fargo. Please proceed.

Eric Yan: Hi, this is Eric Yan on for Matt. Just quickly wanted to ask about the margins at SolAero, if there’s any progress being made so far for getting to 30% by early 2024?