Hello, and welcome to the Rocket Lab discussion of Government Constellation Award. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session, and if you would like to ask a question during this time, simply press star one on your telephone keypad. I will now turn the conference over to Colin Canfield, Head of Investor Relations. Please go ahead. Thank you. Hello, everyone. We're glad to have you join us for today's conference call. Before we begin the call, I'd like to remind you that our remarks may contain forward-looking statements that relate to the future performance of the company, and these statements are intended to qualify for the safe harbor protection from liability established by the Private Securities Litigation Reform Act. Any such statements are not guarantees of future performance, and factors that could influence our results are highlighted in today's press release, and others are contained in our filings with the Securities and Exchange Commission. Such statements are based upon information available to the company at the date hereof and are subject to change or future developments. Except as required by law, the company does not undertake any obligations to update these statements. I'd also like to note that due to quiet period dynamics, we ask that analysts and members of the media limit their questions to today's announcement, as we will not be able to provide any views or updates related to our Q4 2023 results or Q1 2024 financial guidance at this time. This call is also being webcast with a supporting presentation and a replay and copy of the presentation available on our website. I'll now turn the call over to our Chief Executive Officer, Peter Beck. Thanks very much, Colin. So, I'm very pleased to confirm that we've been selected by the Space Development Agency to be the prime contractor to develop and operate 18 spacecraft in support of SDA's Tranche 2 Transport Layer. At over $500 million in contract value, the award is our largest contract in the company's history. It affirms our vertical integration strategy across space systems and establishes Rocket Lab's position as a leading satellite prime contractor, providing supply chain diversity to the Department of Defense and commercial constellation alike. Turning to the award specifics, the contract comprises $489 million base, plus $26 million of incentives and options. The bulk of the work is expected to be carried out through the next three years, with the satellites due to launch in 2027. Rocket Lab will then handle operations of the constellation on orbit through to 2030, with potential operations work carrying us through to 2033. As prime contractor, Rocket Lab will lead the design, development, production, test, and operations of the satellites, including procurement and integration of the payload subsystems. In a demonstration of a vertical integration strategy at work, all 18 spacecraft will feature subsystems and components built in-house by Rocket Lab, including solar panels, structures, star trackers, reaction wheels, radios, flight software, avionics, and launch dispensers. The constellation will be built at our Advanced Spacecraft Development and Manufacturing complex in Long Beach, California. With the addition of the T2 Beta contract, we now have more than 40 spacecraft in backlog. We view the T2 Beta as a foundational win for Rocket Lab for several reasons. One, it confirms Rocket Lab's ability to capture high quality, high value work, thanks to our previous investments in the space systems business, both organic and or inorganic. Two, it significantly de-risks the growth and earnings outlook of our space systems businesses, as well as the overall company. And three, the work scope confirms Rocket Lab's role as a disruptive, commercially developed new government prime. We will look forward to cement our position as a prime with this win and ongoing new opportunities. So Rocket Lab solves hard problems, and shedding a little bit more color on the mission itself, SDA's Beta constellation will serve as the backbone for the Joint All-Domain Command and Control infrastructure, providing low latency data transport, encryption, and connectivity for a range of government mission sets, including beyond line of sight targeting, missile warning, and missile tracking, and advanced missile threats. These are the type of missions that Rocket Lab is extremely good at, developing reliable technology that customers know they can rely on to deliver mission success for the nation. From leading humanity's push back to the Moon with the CAPSTONE mission for NASA, to powering James Webb Telescope, to designing and delivering fast and affordable hypersonic launch capabilities, right through to building Globalstar's communication constellation, Rocket Lab's launch and spacecraft solutions are key enablers for the global space market. We're honored that SDA has placed their trust in us to deliver a highly capable spacecraft for such a critically important constellation, and we look forward to working with the SDA team in the coming weeks, months, and years as we bring this spacecraft to life. For that, I'd like to turn over the call to Adam Spice, who can discuss our space system strategy and some of the dynamics to consider with respect to the budget outlook. Thanks, Peter. This contract is the culmination of our thoughtful and deliberate investment in our space systems business, whereby we either acquired key space technologies or invested in them organically as a means to deliver industry-leading quality, performance, and schedule. In terms of these 18 satellites specifically, our constellation award includes all of the subcomponents we've previously acquired or developed internally, including solar, star trackers, reaction wheels, radios, launch dispensers, and other critical technologies. We view this as a fundamental proof point of our investment strategy, as well as the government's pivot to commercially developed space programs that are able to deliver best value for the customer and for taxpayers. Now, turning to some of the related budget dynamics to consider, we view not just this award, but SDA's program portfolio as a whole, as a generational growth opportunity for Rocket Lab. As you can see from U.S. budget, U.S. government budget forecasts that can be found in the Space Force's program acquisition materials, it's clear that government budgets cannot just grow quickly with billions of dollars of opportunities, but that the outlook is increasing year on year as U.S. government continues to pivot to commercially developed satellite architectures. In addition to Beta, we view Rocket Lab as uniquely positioned to compete for and support other key programs beyond transport. While we prefer to take on the role of prime contractor as a means to have more control over cost and schedule certainty, we'll also continue to be a critical partner to the broader space ecosystem as we alleviate key supply chain constraints, such as currently the case for space-grade solar capacity. And with that, I'd like to turn over the call over to the operator for Q&A. Thank you. Ladies and gentlemen, if you have a question, please press star one on your telephone keypad. If you wish to withdraw your question, simply press star one again. Your first question comes from the line of Erik Rasmussen of Stifel. Your line is open. Yeah, thanks, and congrats on the award. You may have, Adam, sort of alluded to this, but how should we think about this award and the business with SDA in the context of your Space Systems business? I mean, are you planning on targeting all the other remaining SDA tranches, or how selective are you planning on being for that? Yeah, Erik, you know, I, you know, we're always selective in the programs that we pursue. I think it's no different in the case of SDA. I think we believe that we, you know, we've got some unique capabilities that can execute on specific elements of their overall program. And we do see there are other opportunities where we can add value to SDA, so we're certainly not stopping at Beta. You know, we'll be continuing to make proposals on other elements of their initiatives. And we also think there are, you know, similar opportunities, you know, outside of SDA within US government programs, that we can bring similar kind of innovation and, and performance to. So, yeah, we're definitely not stopping at Beta, but I think this is a huge validation of the fact that these opportunities are real for Rocket Lab, and we can, we can do meaningful capture against those. Got you. And, and, and so Gamma, the Gamma portion just went out, so solicitation, and, and I think responses are due in a couple of weeks. Can you, can you confirm that you had been, had put in a bid for that as well? It's not our practice to comment on things that we've kinda not proactively announced, so we're not going to respond to Gamma at this point, but just, you know, there'll be more to come on that in the future. Can you comment on how big the satellites are? And you, you're obviously providing the buses, and there's a lot of integration of all the components and subsystems that you've built and acquired. But are you also then supplying any of the payload? Thanks. Yeah, I'll let Pete take that one. Yeah, yeah. So, hey, Erik, as prime contractor, you know, we are getting a number of, you know, suppliers, and, you know, to support the mission. So, as I think everybody's aware that, you know, Rocket Lab currently doesn't, you know, provide necessarily, payloads. So, you know, we have a good, you know, supplier for those, as the prime contractor. And, you know, the spacecraft in kind of scale, it's not dissimilar in size to the SDA Globalstar platform. So, sort of, you know, a few hundred kgs of multi-meter wingspan for solar array. Got you. And maybe my last one, Adam, just for you. What sort of gross margins are you targeting for this program? And then maybe as it relates to future business with SDA, what are the thresholds you need to preserve your sort of your internal targets? Yeah, you know, so we, we've set out what our, what our longer term non-GAAP gross margin targets are for, you know, for launch and for space systems. And I would say that this contract kind of fits within the overall, you know, modeling that we've done. I mean, there are—if you look at the, at across our portfolio of space systems offerings, you know, we've got some, you know, materially, I would say, higher gross margin parts of our business, which are more, I would say, related to the, the merchant components that we sell into the market. Again, those usually come at pretty attractive gross margins. And then when we go to, you know, these larger total platform solution sales, we typically kind of model a lower gross margin profile than the merchant component sales. But overall, they come to a kind of that blended gross margin target that we've long talked about, which is, you know, north of 40 points. But again, I think on, you know, the overall model for space systems doesn't get changed by this. It's actually supportive of this. Again, I think, but the overall gross margin is gonna be highly dependent upon the mix of merchant component sales versus these more strategic large platform opportunities, which do come at a lower gross margin. Great. Thanks. Congrats. Thank you. Your next question comes from the line of Suji Desilva with Roth MKM. Your line is open. Hi, Peter. Hi, Adam. Congratulations on the win here. Maybe first on the revenue, the $49 for the deal size, how is that gonna flow through, Adam? Is that, you know, leaning toward when the satellites are delivered, or is it relatively even throughout the three-year lifespan of the work? ... I wouldn't say it's even, but it will be recognized over the life of the work. So it's basically gonna be modeled on and recognized on a kind of cost of completion. So yes, there are milestones. Milestones, for the most part, drive kind of cash collection and invoicing. Revenue recognition is driven by the amount of effort expended towards completing the program. So it'll be, you know, more linear, we suspect, than what we've experienced to date on the Globalstar MDA contract, but not entirely dissimilar. And this contract, like almost any other program like it, is more back-end loaded. So again, more linear than the Globalstar MDA, but still back-end loaded. We do expect some revenue recognition from the program in 2024. We'll speak more to that, you know, likely on our upcoming Q4 results call in February. Okay. Then the other question I have is on the capacity for satellite manufacturing. I'm just thinking, you have 2 programs now, more in the pipeline, potentially. How should we think about the kind of capacity you have for building, you know, X number of satellites per year? Or is that not the right way to think about it, it's more program specific? How should we think about your capacity build-out? I can take that one, Adam. Yeah. Okay, you know, we've made pretty significant investments in our manufacturing capabilities. So, you know, we recently moved all of the engine manufacturing over to the Engine Development Center, a Virgin Orbit building, and freed up that whole facility for the satellite manufacturing. So there's some small CapEx investments required, but you know, largely that's all in place. And, you know, we have two Mars missions, four Varda missions, and of course, you know, all of the Globalstar MDA. So we've really been scaling that over the last couple of years, as it is. Okay. All right. Thanks, guys. Your next question comes from the line of Edison Yu with Deutsche Bank. Your line is open. Hey, congrats on the win. Just a follow-up on the last question. Are we expecting, I guess, the investment or expenses to have to ramp up a little bit before the rev rec picks up? Or how do we think about that aspect? Yeah, Edison, I think, you know, they're largely gonna be in concert with each other. So we're not expecting, like, a large upfront, you know, preloaded R&D element of this contract. It's pretty much gonna go, you know, pretty much in tandem with the rev rec. So yeah, it's... From that perspective, it should be, you know, pretty coupled and linear. Gotcha. And then maybe can you provide a little color on the bidding process? What kind of key factors do you think gave you the win? I know you highlighted vertical integration. And maybe were there any learnings that you took away from Globalstar that you sort of applied to this that gave you a better position, a better edge? Yeah, I can tell you the perfect that one, Adam. So I think there's a couple of key, key kind of things there. One is, supply chain diversity. You know, SDA and the U.S. government in general is looking for more and more supply chain diversity, especially in, you know, non-traditional commercial providers. Our execution history, of course, the type of spacecraft that we build are not trivial, simple spacecraft. They're very all of it, if you look across all of the spacecraft we build, whether it's going to Mars or the, you know, Globalstar MDA work, they're all very, very difficult spacecraft. So that's where we kind of excel. And then our ability to partner with really, you know, discriminating payloads and bring bring payload partners along, that that provide solutions that, at the end of the day, you know, that that's that's where the rubber hits the road. Great. Thank you. Your next question comes from the line of Jason Gursky with Citi. Your line is open. Hey, good afternoon, guys. Hey, just really quickly, can you talk a little bit about the scope of development that will need to be done on this relative to the overall program? And then maybe comment a little bit about where that development work has to happen. Is it software, hardware? Kind of just describe the problem that you're all gonna be solving as you go through this work. Yeah, I mean, Jason, I'd probably describe it in the fact that this is kind of a an iteration on a semi-standard bus platform for us. So from the bus perspective, you know, we're able to leverage a lot of the learnings from you know, similar kind of complexity programs like you know, the SDA Globalstar program. So for us, the... You know, we're starting to get good at combining these elements and to kind of-- there's no such thing as a truly standardized bus, but in as close as you can to a standardized platform. So the, you know, as far as that kind of scope, diversity or difference, that that's not tremendous. Obviously, you know, integrating the, you know, the payload and, that, that's where all of the, like, the kind of the magic sauce is, and, making sure all those payload elements, do as they should, and the spacecraft operates as a complete system. As you notice from the award, we're not just building a bus, we're providing the entire solution and even operating it. So, that's where the scope's a little bit different for us in the past. I think, Jason, it's also- And then- Sorry. It's probably important to notice that we're also exercising a lot of similar elements of the supply chain for this, as with other programs. So there's a lot of, you know, I'd say synergies across kind of what we've done on other programs, so we're not having to reinvent the wheel. So a lot of, a lot of kind of standing IP that's been developed, not only for our internal, well, supplied subsystems, but also from our subsystem vendors. And so I think that helps de-risk the program and really kind of minimize the amount of kind of upfront R&D that I think was kind of alluded to by maybe a question from Suji earlier. Right. Right. Okay, great. And then, on the payload itself, have you named the supplier? Apologies if I missed that. And, have you worked with this particular payload or this provider in the past? Yeah, look, we haven't named the payload provider yet, Jason. I'm sure that will come out in the fullness of time. And I think that is one of the key fundamental elements of being a good prime, is building those good relationships with those payload providers. And so that, I guess, out of all of this, this program, that's the thing that I think is probably significant and important here, is Rocket Lab has moved into a prime position rather than, you know, typically a more typically at least a bus provider or elements of the spacecraft. This is Rocket Lab from the very beginning to the very last bit of data that comes down from the spacecraft in many years' time. Right. Okay, great. That's, that's helpful. And then, maybe, Adam, last one from you since, or two, you, since you, you brought it up, but, or maybe it was in response to a question, but the, the pipeline. Can you just talk a little bit more about, maybe the size of the backlog that you guys—I mean, the pipeline, that you're all chasing? And, you know, you emphasized in your prepared remarks a little bit more emphasis on, on government work, and we all look at the same budgets that you do, and it's, it's pretty clear the SDA budgets are going up and to the right. So maybe, yeah, what is that, what is addressable to you all, I guess, in those government budgets that you're talking about? So how big is the pipeline there? Then on the commercial side, maybe just, you know, kind of give us an update on what you're seeing in the commercial market, and are there opportunities there, as well, in addition to the government work? I'll drop the line. Thank you. Yeah. Yeah, Jason. So as far as the pipeline, yeah, we normally don't talk too much about kind of size of pipeline because that, we kind of leave that to folks that, you know, haven't quite established the ability to kind of close on programs, but just speak to size of opportunities. So, you know, I would say that it is fair to say that we have, you know, proposals out on sizable programs that, you know, span the different agencies within the U.S. government and also some commercial opportunities as well. So our pipeline is large. You know, we're chasing, you know, even larger opportunities than are represented by this specific contract. So I, you know, I think as far as what's actionable as we're, you know, kind of within that overall U.S. government budget, I would say it just got a lot larger, right? So I think, you know, this was our first, you know, time that we could close on a as a prime, as Pete mentioned. And so, you know, I think at this point, you know, we believe that we're able to address the most complex, largest contracts that are available for bid. I think this firmly puts us in the same peer group as much larger, more established government primes. And again, just highlights our, you know, that the government believes we have the capabilities to execute on these very strategic programs. And on the commercial side, we are absolutely going after similarly sized, in some cases, you know, larger opportunities, to be prime for very complex missions. I would say that, you know, the government programs are a little bit easier to... I would say nothing's easy to predict, but kind of have a little bit more confidence in, because, you know, all these commercial programs, for the most part, there's kind of financing risk involved with those. So I think that, you know, one of the reasons why we focused a lot on landing this particular SDA program and other government programs is, you know, even though there's never 100% budget certainty, even within those U.S. government programs, there's a lot more certainty. We really want to focus on building a high-quality backlog and pipeline that basically isn't as subject to the financing volatilities that have been experienced in this market over the last couple of years. So we do have a diversity of opportunities we're chasing. They're large in scale. I think this is just kind of a validation of kind of the types of things that we can go pursue and actually close on. Absolutely. Thank you, guys. Your next question comes from the line of Garrett Reim with Aviation Week. Your line is open. Hi, yes, this is Garrett with Aviation Week. I just wanted some clarification. This satellite bus, it, perhaps you said it, but excuse me. This is the same one as the Globalstar satellite bus? And what's the satellite bus's name? I'm just trying to get some understanding of, you know, what product this is. Yeah. Hey, Garrett. It's a derivative of the Globalstar bus. It's not the same. You know, it's a derivative of... I think your confusion is with our naming scheme is well understood, and I think we'll be able to resolve some of that shortly. ... So just to clarify, there's no name as of now for this product, no public name, publicly announced name? There's no publicly announced name for this product. It's good. Okay, thanks. Your next question comes from the line of Andre Madrid with Bank of America. Your line is open. Hey, everyone. Thanks for taking my question. You talked a lot about the importance of vertical integration in winning the award, and with that thought in mind, how should we think about the prospect of Neutron potentially winning work on the launch side of this SDA work? Yeah. Hey, Andre. Well, I mean, obviously, launch is yet to be bid, but it's certainly within the timeframe that we hope that Neutron would be available and certified for such launches. So, we certainly will be. We'll be putting Neutron forward as a potential launch provider for this program. Gotcha, gotcha. I'll leave it at one. I think everyone took care of everything else. So thanks, guys. Thank you. Your next question comes from the line of Micah Maidenberg with WSJ. Your line is open. Hey, thank you very much. Hey, Peter, just to step back a little, you know, this is the biggest ever contract for Rocket Lab, this deal. It's in space systems. You've already got a bigger backlog as of, you know, the Q3 than launch there. Could you just explain a little bit, having landed this, how you're thinking about balancing the space systems business, with launch? You know, just given the work ahead for SDA and, you know, the other space systems opportunities you guys have talked about on the call. Thanks. Yeah. No, thanks, Micah. That's a great question. So, I mean, the two kind of elements of the business run relatively independent to each other, although we do have some fungibility of resources that we'll kind of push and pull across different programs. But, you know, Space Systems is almost, you know, like I say, it runs as a different people, different facilities in general. So, not really, you know, affecting, you know, for example, the Neutron development program. And the use different facilities as well. But I think your question is actually important on a couple of other factors. You know, we always said that the goal here is to ultimately provide, you know, services from space. You know, in order to do that, you need launch, you need to be able to build spacecraft at scale, and you need to be able to deploy and operate those. I think this win is, you know, it's great for a number of reasons, but one, I think it really proves the model as well. Not only does it prove the vertical integration model, it proves that, you know, if you have all these supply chain elements internally, you can have supply chain certainty and diversity. But it also, it also proves that, you know, ultimately, if you have, if you, you can build spacecraft at scale, complete spacecraft at scale, and you have your own launch vehicle, then, you know, you, you can, you can play in, in, in a much bigger pie. And the fact that we're not just building the spacecraft, but we're gonna be operating them, kind of further goes to, you know, what we've been saying all along, which is ultimately, you know, we, we're gonna provide service infrastructure from orbit. And this is just, you know, the next methodical step along that journey. But just one quick follow-up, Peter. I mean, do you think having Neutron in development helped you win this contract? I know you're gonna put it forward, as you just said a moment ago, because that's not part of this deal right now- No ... Neutron. No, I don't know. I don't think that had a meaningful element to this contract win. I mean, we're evaluated on, you know, the spacecraft elements, not launch craft, not launch elements. Mm-hmm. Okay. Okay, thanks a lot. Once again, ladies and gentlemen, if you have a question, it is star one on your telephone keypad. Your next question comes from the line of Aria Alamalhodaei with TechCrunch. Your line is open. Hi, congratulations on this contract. There's been much talk on the call about vertical integration. I'm curious, Peter, are there any other subsystem components that you think are sort of ripe for acquisition or that remain the biggest bottlenecks to, building spacecraft at scale? Thanks. Yes, and to answer your question, Aria, yes, I think there are. And, you know, we'll continue to, you know, be opportunistic in those potential acquisitions. But also, you know, we continue to invest heavily in developing, you know, some of our own capabilities in those areas. So I think, you know, the large successful space companies in the future are going to be able to do a lot of that stuff in-house at scale. And, you know, we continue to invest in those things. I guess the, you know, the follow-on question that people ask, "Well, what are they?" and I'm kind of hesitant to go into too many details, you know, on this call, but, you know, there are some obvious elements that if you pull apart a spacecraft are still, you know, Rocket Lab purchases from other folks and that are, you know, supply chain constraints. So we'll look to, you know, further de-risk those, either through acquisitions or, you know, or organic development in coming years. ... And your next question is a follow-up from Andre Madrid of Bank of America. Your line is open. Hey. Yes, one follow-up, if I may. If you look at the contract value per sat relative to the other awardees for tranche two, it looks like it's actually higher on a per sat basis. Is there something unique to the platform or to what you're offering that's driving that discrepancy? I think I did the math, and it's about, like, $28 million per sat for you guys versus the others, which are probably high teens, low twenties. Yeah, Andre, I mean, the kind of way to think about this is what the best value for the government. You know, it's a very complex payload in the spacecraft, and of course, you have some economies of scale. We're talking, you know, not dozens and dozens of satellites. So, there is some economies of scale that kick in when you sort of get a 25+ spacecraft. So, down at, you know, the number that we're building, you lose some economies of scale. But I would say it's a cross between that and also, you know, a deeply capable spacecraft. I think, Andre, it also... You know, I think each bidder and each person that goes after this has different things they bring to the table. I think the fact that, you know, clearly, you know, the government customer here, in this case, valued some of the uniquenesses that we brought to the table. Again, you know, what we strive for is, you know, not just, you know, to be cost competitive, but also to de-risk kind of program timelines and deliverables. So, you know, I think, you know, everyone's in a different position to kind of realize value based on what they bring to the table. And I think in this case, you know, we brought sufficient value to the table in areas that the customer really valued in order for us to win the award. So, you know, we're always looking at ways to bring down cost, and I think, as Pete mentioned, you know, scale is one of those things. And as we continue to kind of go after, you know, larger and more awards from these types of customers, you know, I think we'll be able to bring more of those synergies to our bids. And, you know, again, hopefully, you know, let the customer realize kind of the lowest total cost and highest quality platform. Got you. Got you. That's, that's all very helpful. Thanks, guys. There are no further questions at this time. This will conclude today's conference call. We thank you for joining. You may now disconnect your-