Rocket Lab Unveils Major Supplier Deal With Mysterious Mega Constellation Customer

by Ana Lopez

Rocket Lab has proven to be much more than a launch company. A look at the company’s most recent earnings presentation shows so much: its aerospace systems business, which designs, manufactures and sells satellite components and spacecraft, brought in more than 70% of the company’s revenue compared to its 2022 launch, at $150.3 million versus $60.7 million, respectively.

The aerospace systems — whose products include star trackers, reaction wheels, solar power systems, separation systems and more — also saw tremendous revenue growth, up 239% year-over-year. To meet this growing demand, the company further announced last year that it was developing new production capabilities for reaction wheels in particular.

The investment is paying off: It looks like Rocket Lab won a contract to supply reaction wheels to an unnamed mega-constellation customer. The company said the same thing in a February press release announcing a new 12Nms reaction wheel product, saying the wheel is “currently slated for flights with an undisclosed major mega constellation customer.”

More recently, Rocket Lab CFO Adam Spice added more color to this statement, revealing that the deal is worth “thousands” of reaction wheels per year.

“We’ve entered into an agreement with a mega-constellation of thousands of reaction wheels per year and much larger reaction wheels,” Spice said at Cowen’s 44th annual Aerospace/Defense and Industrials conference in February. “It allowed us to build a dedicated high-volume production facility in New Zealand and we reduced the costs for those wheels by almost an order of magnitude.”

Speaking at a Bank of America event this Tuesday, Spice reiterated the enormity of the deal: “We’ve signed a contract with a mega constellation customer where we’ll ship two or three thousand reaction wheels a year to one customer.”

While the company has not made this customer’s name public — and declined to comment on the matter to businessupdates.org, citing commercial sensitivity — there are only a handful of known possibilities. Amazon’s Project Cooper is a likely candidate, and OneWeb’s growing network could plausibly be another. However, SpaceX has shown that it wants to stay in-house as much as possible for its production stack, so Starlink isn’t likely.

In his data sheet on the 12Nms reaction wheel, Rocket Lab lists the base price at $100,000. Contracts of this size, of course, often discount the price per unit (which Spice acknowledged when he said at the Cowen conference that the ASP for the megaconstellation reaction wheels “came down quite a bit”), but it suggests a big win for revenue of Rocket Lab and a possible source for the company’s backlog doubling last year: from $241 million at the end of 2021 to $503 million.

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