CA Keshav

nani mere bulls ko bears legaye, baki jo bacha tha modi ji legaye (pls don't block my handle) 🤡 - CA with an unbroken sense of nonhumour 💹

[大表哥 | 链上金狗 @holdonyourrope]

看马斯克和黄仁勋聊天，真的太tm舒服了，恨不得边喝点酒边看，再吃点花生米，堪称完美

[ℏεsam @Hesamation]

Jensen Huang, during the 2020 pandemic, casually pulling out an NVIDIA HGX A100 motherboard out of his kitchen oven.

[kwo @raresoil]

@GS_VCactivist wrong kind of chips

[Elon Musk @elonmusk]

Jensen drove supply chain brilliantly at Nvidia, but many of those deals were a handshake with Jensen, not a written contract.

Without Jensen, at least some of those critical deals will be lost.

[VanquishTrader @VanquishTrader]

WHY I THINK THE MARKET IS WRONG ABOUT $RKLB

My initial take through the Rocket Lab earnings call is that the market is mistakenly viewing the Neutron delay in isolation and missing the very significant progress that has already been achieved prior to the launch of Neutron. Revenue for the quarter more than doubled to a record $267.8M with Space Systems revenue of approximately $215M or 80% of total revenue for the quarter. GAAP gross margin of 33.6% exceeded the company’s guidance of 29% to 31% for the quarter and the company reaffirmed guidance for Q4 revenue of $270M to $290M.

The company is already manufacturing satellites, optical communications equipment, propulsion systems and other key spacecraft components for commercial and governmental customers. In short, Rocket Lab is participating in the growth of the space economy.

I’d also note that a lot of people are looking at the Neutron delay through the lens of how long it will take to turn the $3.57B backlog of 117 launches and over 55 spacecraft in development and production into actual dollars. As noted above, only about a third of that total is expected to turn into revenue over the course of the next 12 months.

So it is frustrating but what really sticks out to me is that the contracts to add 8 more launches to the Neutron manifest of 16 at greater than $515M per launch were signed at a higher price ($70M per launch versus $55M) – and that Rocket Lab could have signed on for even more launches at that higher price. This is a company with increasing demand and improving pricing – and it has a significant delay in the launch of its next major product. That is very different from a company whose customers are losing confidence.

The even greater opportunity that Rocket Lab is developing is to become a space-based manufacturing company and launch service provider that can build spacecraft, launch them, and then operate the associated space-based infrastructure and services to generate recurring revenue.

The pending acquisition of Iridium will add a large established satellite communications network with more than 2.5M subscribers to the Space Systems segment, creating a large and growing source of recurring revenue from the associated communications services in addition to the Space Systems manufacturing and launch services.

The Company’s existing relationships with Defense customers are also gaining traction, with customers seeking to implement their own space-based infrastructure and services, where they can have greater control over the associated systems and services.

Rocket Lab’s financing situation is also stronger than it was earlier this year, with the Company holding approximately $4.7B in cash and securities and the acquisition bridge loan having been retired. Importantly, however, the flexibility that has been created has come via a significant equity raise, with the Company’s share count increasing by approximately 23% over the past year, and Iridium has substantial existing debt that will remain on the Company’s balance sheet following the close of the acquisition.

Operating cash flow even turned positive in the quarter for $7.2M, although free cash flow remained decidedly negative. In summary, I don’t think that Rocket Lab’s earnings are suddenly going to become profitable, but rather the Company is in the process of building out a large and much more diversified business, with improving future economics as the Company’s existing production programs scale, and the Neutron launch vehicle enters into commercial service.

The disappointment with Neutron is obvious as the first stage composite tank will require a refurbishment which will now push the inaugural flight to 2027 with no fixed launch date for the time being.

While the management reiterated that increased spend will be required until Neutron is flying regularly, production is advancing towards the recurrent production phase, adjusted EBITDA is expected to turn positive within six months post first flight, while sustainable free cash flow will take longer as it will depend on the rate of Rocket Lab’s reusable launch vehicles expansion.

Moreover, Rocket Lab’s stock price trades at a significant premium to its conventional aerospace peers. While I don’t think for a second that RKLB is cheap as it is trading at a significant premium to its peers’ stock prices and while there is plenty of competition from SpaceX alone and very Integration Challenges with Iridium’s satellite comms business, the market is definitely fixingate on the wrong things here (i.e. the timeline for Neutron’s launch) and missing the wood for the trees as the current Space Systems business is expanding very rapidly and commands large commitments from customers already while launch prices are moving up!

My only conviction here is that Peter Beck will translate all of this into very successful launches, ever-improving margins and, importantly, sustainable cash generation without too much further dilution for new investors. I remain very bullish on long-term potential of this company to become one of the space economy’s defining companies and today’s earnings actually strengthened that long-term thesis of mine even further than the corresponding drop in the stock price would suggest.

[CA Keshav @CAasheww_runuts]

@patdarsh09 Sighting at BLR airport?

[Chris Perruna @cperruna]

The stock market doesn't care

[Rahul Kumar @RahulTechX]

Don't watch Netflix tonight.

Spend 2 hours checking out this complete Stanford AI course

that teaches you how to build and automate anything with AI.

Anyone who watches this tonight will wake up tomorrow with a new skill under their belt.

Watch now, save for later.

[Dhruv kumar @Dhruvkumar16797]

A billionaire literally explained how the entire economy works in 42 minutes better than most $200,000 MBA programs ever cloud.

[CA Keshav @CAasheww_runuts]

It'd be an amazing feature to have @lkeshre where you could sort your holdings on the @_groww app on an absolute return basis ~ rupee value. Rn, it just provides sorting options on %terms. Could be a value added on your next UI update (Ind money has all these crazy features)

[CA Keshav @CAasheww_runuts]

It'd be an amazing feature to have @lkeshre where you could sort your holdings on the @_groww app on an absolute return basis ~ rupee value. Rn, it just provides sorting options on %terms. Could be a value added on your next UI update (Ind money has all these crazy features)