Gone fishing (3/2/23)

Good morning. Crew 6 is en route to the space station, with docking expected to occur early tomorrow morning.

In today's edition...🚀 Rocket Lab reports steady revenue✈️ Virgin Galactic looks ahead💭 Reader poll: ULA’s buyer📝 The contract report

Was this email forwarded to you? Sign up here.

Rocket Lab Projects Busy 12 Months

Rocket Lab ($RKLB) fired off a number of key business updates on Tuesday’s earnings call. To start, the company reported robust Q4 revenue of $51.8M, an 88% YoY increase.

The business outlook

Rocket Lab’s backlog increased from $241M in Q4 ‘21 to $504M at the end of 2022.

Strong order volume is driven largely by the company’s Space Systems division, but two recent launch contract wins helped boost the order book:

• Capella signed a four-launch deal with Rocket Lab, scheduled to begin in mid-2023. Capella has already completed one mission with the company in 2020, and has a second flight scheduled for later this month.

• Spaceflight Inc. brokered the launch of two LeoStella-made, BlackSky-operated satellites on The Beat Goes On (Rocket Lab’s next mission).

Gone fishing: Rocket Lab says it may abandon the acrobatic attempt to recover boosters via helicopter. The alternative (and only proven) method—parachuting the booster into the ocean and fishing it out—has worked well, and hasn’t resulted in too much wear-and-tear on the first stage.

Neutron update

Rocket Lab is making headway on developing Neutron, its medium-lift, next-gen rocket. The company completed construction of its Neutron build and test site near NASA Wallops and broke ground on the rocket’s new pad to boot. Neutron’s maiden flight is penciled in for Q1 2024.

Taking a hit: Management estimates that Neutron’s all-in development costs will be in the neighborhood of $250M, leading to significant projected losses this year. Q1 Adjusted EBITDA losses are forecasted to top $28M, while the company indicated total losses for the year could surpass $100M.

+ What else? Rocket Lab is targeting 15 launches in 2023.

Virgin Galactic Prepares for Return-to-Flight

Virgin Galactic ($SPCE) released its Q4 and FY 2022 results Tuesday after the bell. The numbers show significant losses compared to 2021, but roughly in line with expectations.

Virgin Galactic’s Q4, by the numbers:

• Net loss of $151M

• $980M cash and cash equivalents as of Dec. 31, 2022

• Adj. EBITDA totaling -$133M

Virgin Galactic lost roughly half a billion dollars in 2022, up from 2021’s net loss of $353M. As of market close Wednesday, $SPCE shares are trading at $4.73, down ~17.7% from Tuesday’s close at $5.74 per share.

The RTF home stretch 

Virgin Galactic is ramping up to resume flights in Q2 this year, having been on a hiatus from the skies since 2021. The company’s mothership, VMS Eve, has been grounded since Oct. 2021 for repairs that “took longer than we originally planned,” CEO Michael Colglazier said on the earnings call.

• Eve needed extensive repairs to its horizontal stabilizers and the pylon connector for the mothership and spaceplane.

• Over the past two months, the craft has flown two test flights and relocated from Mojave to Spaceport America in New Mexico.

VSS Unity, the human-rated spaceplane, also has test flights on the docket for Q2. When Virgin Galactic is satisfied with its performance, “we see a path to be on a monthly cadence in reasonably short order,” Colglazier said.

Returning to flight: The company says that it’s making good progress toward a commercial flight carrying three mission specialists for the Italian Air Force.

About the next generation…Virgin Galactic has slowed development on VSS Imagine, its next-generation spaceplane, to focus on bringing VMS Eve and VSS Unity from zero to a regular commercial flight cadence.

Who Will Buy ULA?

United Launch Alliance, a joint venture formed in 2006, may soon have a new corporate home. That’s because co-owners Boeing ($BA) and Lockheed Martin ($LMT) are reportedly putting ULA up for sale, according to a blockbuster story Wednesday from Ars Technica’s Eric Berger.

Morgan Stanley and Bain were hired to facilitate the transaction, which is reportedly expected to close before the year is out.

ULA is eyeing May 4 for the maiden launch of its new rocket—which is an absolutely electric coincidence for Star Wars nerds everywhere. That rocket, the Vulcan Centaur, will fly Astrobotic’s Peregrine lander as its primary passenger, with Amazon’s Kuipersat-1 and -2 hitching a ride as well.

Here’s where you come in…

You’re a smart, space-savvy bunch. So, let’s hear from you: assuming ULA is sold, who will the mystery buyer end up being? Berger laid out a range of theoretical buyers in his story breaking the news, as did SSL’s Abhi Tripathi in a Twitter poll. We drew inspiration from both. And stay tuned for results of the poll—we’ll report back on Monday.

Sponsored

Your Future in Space Starts Here

a.i. solutions® doesn’t just dream of exploring space, they live it — and you can, too.

Turn your passion for space into your profession at a.i. solutions, where you’ll find a challenging work environment that delivers the best solution while maximizing employees’ potential.

a.i. solutions provides mission-critical engineering and operations services for NASA, the Missile Defense Agency, and the United States Space Force. With their Core4 values — Customer, Team, Company and Self — the a.i. solutions team strives for mission success *and* your success in every decision they make. Apply now at ai-solutions.com.

In Other News

• The UK provisionally cleared the proposed $7.3B tie-up of Viasat ($VSAT) and Inmarsat.

• Astra ($ASTR) received an FAA closure letter for the investigation into its TROPICS-1 launch failure, and shared its findings into what went wrong.

• NASA has deemed DART a success. The agency assesses that intercepting a half-mile-wide asteroid is achievable down the road with advanced detection.

• BlackSky ($BKSY) imagery helped identify construction of a secret Chinese naval base in Cambodia.

• Meanwhile, the UK’s military tapped Maxar ($MAXR) imagery to assess that an A-50 Russian spy plane was likely sabotaged by a Belarussian opposition group.

The View from Sea