Rocket Lab lands multi-launch deal with satellite company Kinéis

Peter Beck, Rocket Lab CEO, joined Yahoo Finance Live to discuss the company's deal with satellite company Kinéis and the company's latest earnings report.

Video transcript

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ADAM SHAPIRO: You heard Seana talking about Rocket Lab not too long ago. Those stocks, those shares up about 37% today. And this is a company that you and I have only been able to start buying recently because they went public via SPAC not too long ago. But let's talk about some of the big things that are coming with Rocket Lab with Peter Beck. He is the CEO, and we invite him back into the stream. It's good to have you here once again. It seems like we were just talking to you about, what, five, six weeks ago.

But I want to, just from the earnings-- I don't want to say earnings report, but when you shared with what had happened in the first six months of the year, the key that I think helped you today-- and it's not me, it's what the analysts are saying-- that your backlog grew to $141.4 million. Plus, you had the announcement of the $25-- is it $25-- million deal to launch satellites for Kinéis into orbit. So it seems that you're just-- you have launched and there's nothing that's going to be able to stop you. Or is there a cloud ahead of you?

PETER BECK: No, no, I mean, we're just doing as we've always done, and that's just execute, you know, the deal that you mentioned [CLEARS THROAT], excuse me, as the Kinéis deal. It's a bulk buy of five launch vehicles, 25 satellites in total and, you know, that we're launching their entire constellation. And this comes on the back of another bulk buy from BlackSky, which is, you know, another five rockets launching their entire constellation.

So what you're seeing is just, you know, us moving-- moving on out and, you know, delivering against what we said we're going to do with launch. And also, you know, pretty significant growth in our space systems division. And I think you know, most people know us well for our rockets, but, you know, our satellites and space systems division has grown very strongly as well.

SEANA SMITH: Peter, I know one of the sites of your key launch facilities is located in New Zealand. And New Zealand, of course, have seen COVID-19 restrictions put back into place. I guess, how significantly do you see that at least affecting your company in the short term?

PETER BECK: Yeah, in the short term, it's-- you know, it's a little bit painful. New Zealand has a very, very strict COVID approach, where it's basically, you know, an approach of elimination, which, you know, for the last year, has been very good for us because, you know, it's just like life is normal because there is not a single COVID case in the country, certainly in the community.

But with the recent Delta outbreak, the country has gone back into kind of a lockdown state, which makes it very, very difficult to operate. However, the good news is, the numbers are easing back quickly, and, you know, we should be back on the pad here very quickly. But, I mean, we do have an additional pad in Wallops Island, Virginia, in the United States. We run three pads in two different countries. So, you know, we're well diversified from this in the future.

ADAM SHAPIRO: Those of us who are not rocket scientists might look at your business and think, OK, there are a bunch of companies now, private companies, that are launching things into space. But the competition, it doesn't quite work that way. For instance, one of the deals you just got, it's because you're-- it's called the Electron, is it, the launch vehicle actually is more efficient and cheaper for the weight, I guess, of the satellites that you've got to put up there than if they had gone to someone else. Does this then focus potential future clients that you're going to have one part of the market whereas a different rocket launch company would have a different part of the market?

PETER BECK: Yeah, I mean, I think it's an important distinguishment to make, because within the industry, there is-- there's a lot of people talking about, you know, delivery to orbit, and there's really only a couple that are actually doing it. You know, behind SpaceX, we are the second most frequently launched US rocket. And I think that's that's-- there's obviously a big difference.

Also, you know, not all orbits are the same. So take the Kinéis deal, for example. These are very, very high-precision insertions into orbit. This isn't-- you know, this is not throwing up some-- you know, lobbing up some rocks. This is really, really, you know, high-accuracy stuff that we've proven over and over again. And, you know, we've put over 100 satellites in orbit now, and, you know, that level of accuracy and mission assurance is what's actually required within this industry.

SEANA SMITH: And, Peter, investors, when they're looking at your company, an opportunity here to invest in space, which I think a lot of people are viewing as a very exciting opportunity at this point, what do you think is the most important part of your business that they should focus on? Or what do you think is going to drive the growth here over the next several quarters?

PETER BECK: Yeah, I think if investors are looking to invest in space companies, the first thing to be looking at is execution. Because the space industry is a fantastic industry, but there is, you know, there's a lot of promises made. So that would be-- that would be the first thing I would say to investors is look at-- look at who is actually executing, deploying stuff, and building stuff.

I think my view on the space industry is that-- and what we set Rocket Lab up to do-- is that it's more going to be-- you know, the larger companies are going to end up being end-to-end companies. So, you know, whereas with Rocket Lab, yep, we build rockets, and we have-- we have a large launch vehicle that's under development as well. But, you know, the satellite part of our business is very strong as well.

And when you combine, you know, satellites and launch vehicles together under one roof, and, you know, under one roof that's very vertically integrated, the efficiencies and the scale you can get there are enormous. And I think if you look at the space industry, it's really defined by a number of really small-scale, you know, operators, very niche. And if the space industry is going to grow to this $1.4, $2 trillion industry, you know, scale needs to be, you know, front and center. And that's what we're really focusing on right now.

ADAM SHAPIRO: Peter, what I hear you saying is that actions speak louder than words and the 100-plus satellites that you've delivered. I mean, when you look at your competitors, you got Bezos. He hasn't put satellites up yet, but you've got Bezos. He's flamboyant. You got Elon Musk, another flamboyant, tweeting all the time. And then there's you-- you've been on with us before-- very rock solid. And is it a detriment that you've got these very flamboyant people running those rocket companies, getting a lot of attention, and here you are just doing your business and you keep launching into space?

PETER BECK: Well, I mean, it's just the way we operate. You know, we're all about execution and just going out doing what-- you know, what we do. So I apologize for being too boring, but--

ADAM SHAPIRO: You are not boring.

PETER BECK: I do-- look, I have a-- I do have a cowboy hat, if that makes me more flamboyant. But-- but no, yeah, we're just focused on delivering for our customers and growing the business. We're trying to build, you know, a very large, long-term sustainable space company here.

SEANA SMITH: What you're doing, you're doing extremely well. Peter Beck, Rocket Lab's CEO, thanks so much for taking the time to join us again. Rocket Lab shares up over 30% today.