WEBVTT - Rocket Lab Founder and CEO Peter Beck Talks 'Neutron' Rocket Launch

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Shares of rocket Lab lower the company is signaling its

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<v Speaker 2>Neutron rocket could face yet another delay, pushing its bid

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<v Speaker 2>to challenge SpaceX's Falcon nine potentially into twenty twenty seven.

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<v Speaker 2>It's not all doom and gloom, though, shares still up

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<v Speaker 2>more than twelve percent year to date seventy four percent

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<v Speaker 2>year over year. Joining us now is rocket Lab founder,

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<v Speaker 2>president and CEO Peter Beck. Peter, thank you so much

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<v Speaker 2>for joining. Can you clarify any confusion about neutrons? So

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<v Speaker 2>yesterday it seemed like you were pushing back the date

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<v Speaker 2>of the launch a little bit. Is neutrons still on

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<v Speaker 2>track to actually launch off its launchpad this year twenty

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<v Speaker 2>twenty six?

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<v Speaker 3>Yeah, I think I think probably head lines I have

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<v Speaker 3>a blondet a little bit.

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<v Speaker 4>You know.

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<v Speaker 3>What I did did say is that you know, it's

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<v Speaker 3>getting a little bit tighted to get a launch away

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<v Speaker 3>this year, which is you know, just being consistant, transparent,

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<v Speaker 3>but you know, it's a rocket program. They're very very

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<v Speaker 3>difficult and complex and large programs. But our intention here

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<v Speaker 3>is to still definitely push hard to try and get

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<v Speaker 3>a first flight away this year. But I think The

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<v Speaker 3>real question that should be asking is is what about

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<v Speaker 3>the tenth flight? Because you know these programs and obviously

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<v Speaker 3>first flight is important, but flight number ten is actually

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<v Speaker 3>really really important because you know, that shows that you've

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<v Speaker 3>got into into a full sense of you know, scale

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<v Speaker 3>and cadence and reusability, which is which is really, you know,

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<v Speaker 3>the most important thing for the whole program.

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<v Speaker 5>I see some of the word they're cadence. Tell us

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<v Speaker 5>a bit about that, how you're thinking about the cadence

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<v Speaker 5>going forward and the vile, the vible path to getting

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<v Speaker 5>there to a regular cadence.

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<v Speaker 4>Yeah.

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<v Speaker 3>Well, I mean if you look at our current a

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<v Speaker 3>current vehicle electron, you know, we actually scaled that faster

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<v Speaker 3>than any other rocket and history. So we went from

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<v Speaker 3>you know to zero to fifty flights in the shortest

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<v Speaker 3>time in history, and we're on track to get to

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<v Speaker 3>one hundred flights in the shortest time in history with

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<v Speaker 3>that vehicle too. So we know a thing or two

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<v Speaker 3>about you know, taking a rocket, putting it on the pad,

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<v Speaker 3>and then flying it over and over again. But you know,

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<v Speaker 3>neutrons really important for a few reasons. I think a

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<v Speaker 3>lot of people focus on, you know, plugging a hole

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<v Speaker 3>from and providing competition for a Falcon nine, which which

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<v Speaker 3>is an important important part of its job. But you know,

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<v Speaker 3>rocket Lab is an end to end space company, meaning

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<v Speaker 3>that we build satellites both for ourselves.

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<v Speaker 4>And for other people.

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<v Speaker 3>And you know, with our penning acquisition of Iridium, you know,

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<v Speaker 3>we really need our rocket to launch our own satellites.

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<v Speaker 3>And so you know, at least fifty percent of electrons

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<v Speaker 3>or sorry, neutrons capacity is going to be consumed by ourselves.

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<v Speaker 2>Obviously, SpaceX was able to raise a humongous amount of

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<v Speaker 2>cash recently. Peter, how do you intend to continue to

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<v Speaker 2>raise cash in order to fund some of these expensive endeavors.

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<v Speaker 4>Well, I think we're a little bit different than SpaceX.

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<v Speaker 3>You know, Elon has has very very grand aspirations that

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<v Speaker 3>require a lot of cash.

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<v Speaker 4>You know. For us, you know, we're we're.

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<v Speaker 3>In the business of getting into into cash flow positivity

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<v Speaker 3>as quickly as we can. And if you look at

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<v Speaker 3>you know, some of the some of the acquisitions that

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<v Speaker 3>we've done in the past and about to.

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<v Speaker 4>Do, you know, that puts us in that in that

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<v Speaker 4>realm very very quickly. So I think we have we

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<v Speaker 4>have a very different.

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<v Speaker 3>Sort of profile to to to the you know, the

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<v Speaker 3>other two big rocket guys you know, start off where

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<v Speaker 3>you know, I'm certainly not the richest to the richest

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<v Speaker 3>people in the world are competitors, so they have a

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<v Speaker 3>totally different you know, cost of capital and sense of capital.

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<v Speaker 4>We've always where has been that.

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<v Speaker 3>Rocket company that has had to be very commercial from

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<v Speaker 3>day one, and you know, we're we're about we're about building,

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<v Speaker 3>building a good solid book and you know, a commercial

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<v Speaker 3>enterprise that's enduring and making money.

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<v Speaker 5>I look at the report backlog two point three six

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<v Speaker 5>billion dollars with ninety plus launches here, How should we

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<v Speaker 5>look at that? How should investors look at that backlog?

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<v Speaker 5>And at what point does it become something that should

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<v Speaker 5>maybe raise some concern with investors if it gets to

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<v Speaker 5>be a certain size or you know, it gets to

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<v Speaker 5>grow bigger and bigger.

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<v Speaker 3>Gain Yeah, well, I mean, you know, I think everybody

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<v Speaker 3>loves a great, big backlog, and I think you know,

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<v Speaker 3>between you know, the last quarter and now, we added

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<v Speaker 3>nearly a billion dollars of backlog, you know, to the company. So,

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<v Speaker 3>but backlog is a great metric, but execution is the

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<v Speaker 3>true measure.

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<v Speaker 4>And you know, if you look at the company.

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<v Speaker 3>I think we've established ourselves, as you know, as a

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<v Speaker 3>very strong executors, you know, previously and throughout history.

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<v Speaker 4>We you know, we do what we say we're going

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<v Speaker 4>to do.

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<v Speaker 2>You know, the Iridium deal, as you say, that's pending

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<v Speaker 2>complete completion. It potentially opens the door for directed device

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<v Speaker 2>products on that market. How do you see that fairing

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<v Speaker 2>and particularly against some of your competitors such as SpaceX.

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<v Speaker 4>Yeah.

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<v Speaker 3>So look, I've obviously saying this for many many years,

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<v Speaker 3>and I think it's been proven out with evidence from

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<v Speaker 3>from other companies. But you know, the really large space

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<v Speaker 3>companies in the future are going to look at all

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<v Speaker 3>a little bit the same. They're going to have the

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<v Speaker 3>ability to build satellites at scale, their ability to launch

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<v Speaker 3>their own satellites with their own rocket and have a

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<v Speaker 3>bit of a communications.

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<v Speaker 4>Or a commsplay.

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<v Speaker 3>And you know, Iridium is the entry point for us,

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<v Speaker 3>it's by no means the end point. And you know,

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<v Speaker 3>one of the reasons why we like the Areadium platform

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<v Speaker 3>so much is that it has a very unique spectrum,

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<v Speaker 3>being in our band spectrum that it now allows you

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<v Speaker 3>to do very unique things. And you know, Iridium has

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<v Speaker 3>built an amazing business on the back of safety, critical, defense,

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<v Speaker 3>critical infrastructure, and you know that's something that will continue

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<v Speaker 3>to you know, to grow and push. You know, I

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<v Speaker 3>don't think you're going to see us going head to

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<v Speaker 3>head in the broadband market. I think that's very well

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<v Speaker 3>served in a tough place to be. But I think

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<v Speaker 3>there's a tremendous opportunity in some of these more discrete

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<v Speaker 3>and unique areas of the comms market.

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<v Speaker 5>Peter, talk to us about the Caplar deal with you

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<v Speaker 5>announced yesterday, this deal with Capitloar Communications purchasing a dedicated

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<v Speaker 5>launch of Neutron for no earlier than twenty twenty eight.

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<v Speaker 4>How important is that to you?

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<v Speaker 3>And the is this Well, it's funny because you know,

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<v Speaker 3>I think I think naturally, a lot of people would

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<v Speaker 3>expect that we just should, you know, sell all of

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<v Speaker 3>the rockets that we have for for for eternity, and

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<v Speaker 3>if we were just a rocket company, that would be

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<v Speaker 3>that would be a great assumption. But you know, we

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<v Speaker 3>we have to assure that we have rockets left in

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<v Speaker 3>you know, in production and available to launch for our

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<v Speaker 3>own aspirations, also for you know, some of our defense

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<v Speaker 3>customers who you know, who need a short access of

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<v Speaker 3>space and you know, right now, I've never seen the

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<v Speaker 3>rocket industry and launch so constrained. So for us, you know,

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<v Speaker 3>we are extremely selective about who we we we give

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<v Speaker 3>up this very valuable capacity to on the Neutron rockets.

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<v Speaker 3>So you know, it was great, great to have to

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<v Speaker 3>keep the guys on, you know, on contract. You know,

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<v Speaker 3>we've known that team for a very long time. And

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<v Speaker 3>but you know, it is it is a it is

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<v Speaker 3>a very very kind of constrained environment right now.

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<v Speaker 4>Then we have to navigate.

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<v Speaker 2>Care Peter, what's the detail plan for getting to cash

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<v Speaker 2>flow positive? Is it just a matter of time?

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<v Speaker 4>Yeah?

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<v Speaker 3>Absolutely, I mean Neutron, you know, after we have the

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<v Speaker 3>first flight flight of Neutron and we flick into commercial flights,

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<v Speaker 3>that that's that is a that is a huge point

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<v Speaker 3>inflection point for the company. And then you know, of

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<v Speaker 3>course any acquisition like a Ridium does that immediately. So

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<v Speaker 3>so yeah, we have a fairly short time horizon to that.

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<v Speaker 5>I look at that pantheon of Bineric and Motive and

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<v Speaker 5>a Readium which we've talked about.

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<v Speaker 4>Are you are you hungry for more deals yet.

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<v Speaker 5>Or are we going as a pause here in terms

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<v Speaker 5>of the company's inquisitive, acquisitive stats.

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<v Speaker 4>Yeah, never done, never done.

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<v Speaker 3>I mean, look, all of those acquisitions have been very strategic,

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<v Speaker 3>and I think, you know, launches a tremendous moat and

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<v Speaker 3>everybody can see that, you know, it's the big, the

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<v Speaker 3>big show in the sky. But actually, you know, we

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<v Speaker 3>acquired a whole bunch of component companies and scale those

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<v Speaker 3>and components are just as much of a moat.

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<v Speaker 4>So you know, no matter how much capital you had,

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<v Speaker 4>if you.

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<v Speaker 3>Just turn up and say I want to build a

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<v Speaker 3>thousand satellites, you just can't because you know, there's just

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<v Speaker 3>not the supply chain there to go and provide all

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<v Speaker 3>of the components for the spacecraft. So for us, I

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<v Speaker 3>mean that's not a constraint for us, of course, but

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<v Speaker 3>for for other people entering the market, it's a huge constraint.

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<v Speaker 3>So you'll continue to see us, you know, tucking those

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<v Speaker 3>little deals in the in the side. But you know,

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<v Speaker 3>deals like Iridium certainly aren't going to be the last.

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<v Speaker 3>And you know you shouldn't think of it as the

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<v Speaker 3>you know, the the l Bancom's company.

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<v Speaker 4>This is the first of first of many.

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<v Speaker 2>I would say, all right, well, stock as Rochel's decession

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<v Speaker 2>highs down as one point eight percent. Now, Peter, thank

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<v Speaker 2>you so much for joining us. Peter back of rocket

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<v Speaker 2>Lab