00:00Joining us now is Peter Beck, Rocket Lab's founder and CEO, live from Auckland, New Zealand.
00:05Let's start there, Peter. Why BioIridium and why now?
00:09Yeah, it's great to talk to you. But look, I think it's become pretty obvious and we've talked about it
00:15for quite some time
00:16that the really large space companies of the future are going to be a little bit blurry about what a
00:22space company even is.
00:23And, you know, Rocket Lab today, we're the second most frequently launched rocket and we have a large spacecraft business
00:29and components business. But really, the third leg of the stool was always an application.
00:34And by combining Rocket Lab and Iridium together, we really make that complete picture.
00:39And what that essentially means is we are a self-launching company.
00:43And I think if you look at other companies that have their own rockets and can build their own satellites,
00:48it's a pretty powerful combination.
00:51I think, you know, very early this morning, people got very quickly to this deeper level of vertical integration.
00:56The basics of it, there's also the idea of spectrum, right?
01:00So Iridium has valuable but a limited source of spectrum.
01:05Can you just quantify that for us, how much spectrum you get access to and kind of like how you
01:11leverage that to Rocket Lab's advantage?
01:15Yeah, you're exactly right.
01:17I mean, you can have all the spacecraft and all the rockets and the hangars you want, but if you
01:21don't have the spectrum to actually utilise them,
01:23especially for communications, then it's all for nothing.
01:26And the very unique thing about Iridium's spectrum is it's L-band spectrum.
01:31So, you know, L-band is particularly effective in those very difficult and harsh conditions.
01:37So not surprisingly, you know, Iridium has built a very, very strong business for, you know, servicing safety-critical things
01:45and the defence, you know, the defence network.
01:50And so, you know, this obviously enables us to build on this.
01:54You know, it's a very established and profitable business to date.
01:59But, you know, the spectrum is an incredibly valuable asset for sure.
02:04Peter, going forward, does Rocket Lab just more generally become a buyer of spectrum and an acquirer of assets that
02:11give you access to more spectrum?
02:13No, no, not at all.
02:15I think, I mean, this spectrum gives us, you know, a fantastic, you know, baseline and head start.
02:21If you think about the opposite, you know, we've always said we want to do an application that would take
02:26years and years and years to first, you know, build the constellations of satellites,
02:30deploy them and then, of course, you know, that's before you even see your first dollar of revenue.
02:35So this really supercharges, you know, our kind of interest into applications and, you know, it's a wonderful business to
02:43build upon.
02:43But our intention here is to, you know, leverage the spectrum and what Iridium have built to, you know, provide
02:49a whole bunch of new services.
02:51OK, so we have launch, we have satellite manufacturing and now communications.
02:56One of the questions I got from the audience is for you, Peter, is how do you take Iridium's technology
03:02and improve it?
03:04You know, they themselves have been very focused on chips, right, and their own custom electronics.
03:09What can you do to kind of make best use of it, but also make them better?
03:13Yeah, sure. So, I mean, I think, you know, just the economics alone and the synergies alone when you have,
03:20you know, control over the most expensive
03:23and the most longest lead time items being launch and spacecraft manufacture, I think that just puts, you know,
03:29that level of vertical integration just puts everybody into a totally different league.
03:33So, you know, instead of scratching out business plans on a whiteboard where you have to spend billions of dollars
03:39on launch and spacecraft manufacturing,
03:40when all of a sudden that those costs evaporate, you know, your ability to innovate and execute different business plans
03:48becomes, you know, vastly superior.
03:51Let's talk about the economics real quick. Is debt going to play a role in financing this?
03:57Yeah, initially for sure. You know, Rocket Lab is a very strong balance sheet and, you know, Iridium historically has
04:04had some debt.
04:06But, of course, you know, it's throwing off a lot of cash to service it.
04:09But, you know, we have a debt bridge that we intend to take out.
04:16I get a lot of questions for you about Neutron, next gen launch system that you're working on.
04:23I think one reason we get a lot of questions from the audience now about Neutron is that people want
04:28you to kind of explain
04:29how dependent this future business line is on Neutron, constellation-based connectivity.
04:37Look, I mean, the Achilles heel in space applications and space infrastructure right now is launch.
04:44You know, launch is an incredibly valuable and rare asset.
04:47And, you know, as I mentioned before, we launched the Electron rocket,
04:51which is the second most frequently launched rocket in the world.
04:53And Neutron's coming online by the end of the year.
04:57And, you know, luckily, also, you know, the Iridium constellation, it's a relatively fresh constellation,
05:02so it doesn't require immediate launch.
05:04There's a number of years left in that constellation, over a decade.
05:09So we've got a little bit of time to refresh the constellation.
05:11But, I mean, you know, we can throw stuff up with either Electron or Neutron
05:16to experiment and develop new technologies almost immediately.
05:21OK, the big question, is Rocket Lab developing the sort of mega-scale constellation
05:27specifically to take on SpaceX, Amazon, AST, not just direct-to-cell,
05:35satellite-based internet connectivity, et cetera?
05:39Well, certainly, you know, Iridium has a, you know, direct-to-device, you know, system
05:44and plan that they're rolling out later on this year.
05:47And, look, this is the very beginning for us.
05:50This is our first foray into applications.
05:52We've talked about it for a long time.
05:54And I think this is a very smart deal where, you know, we're not, you know, acquiring a field of
06:02dreams
06:02and starting from scratch.
06:04We are, you know, acquiring a very valuable spectrum, a profitable business.
06:08And, you know, it's a very typical smart Rocket Lab deal.
06:11But, you know, our clear intention here is to not stop at this acquisition and continue to grow for sure.
06:19A lot of folks this morning kind of pointed at the idea that, you know, Starlink has a lead in
06:24terms of bandwidth, speed, latency.
06:27So I think people would love to just hear you be very granular and specific about the niches that you
06:32can go after,
06:33what you see as the total addressable market, but also, like, definition of that total addressable market
06:39that Rocket Lab is, like, zeroed in on as opposed to, like, going after all of it.
06:44Yeah, look, I mean, to your point before, you know, spectrum is key.
06:48And this spectrum, the L-band spectrum, is very, very unique in the fact that it's ineffective by weather and
06:54harsh conditions.
06:54And as a result, you know, this L-band spectrum is widely used in all the safety-critical stuff you
07:00would imagine,
07:01whether it be mariners, pilots, defence forces.
07:04I mean, I'm myself personally, you know, a user of the Iridium network.
07:09I'm a helicopter pilot when I get, like, 10 minutes of my own time.
07:13And, you know, there's a little thing on the top of my dash with an Iridium logo that I push
07:17the button
07:18that I know if I have a super bad day and end up in the bushes, someone's going to come
07:22and get me, for sure.
07:24So, you know, our focus, you know, initially is on maintaining, you know, that super important constellation.
07:33I mean, it is completely global.
07:35So no matter where you are on the planet, air, sea, land, wherever you are connected.
07:42And that's something that really only Iridium has.
07:46Two final quick questions.
07:48I guess that given the landscape, the regulatory risk on this, you guys feel confident that this deal will close
07:54and that it will get done?
07:56Yeah, no, I think from a regulatory standpoint, this is pretty straightforward.
08:00I mean, it's, you know, a very, very strong, you know, deal and, you know, not controversial at all.
08:08And then just for 2026, the balance of this year, next year, has Rocket Lab got a refreshed launch target
08:16for what we could see on Electron and then Neutron in aggregate?
08:20Yeah, look, you know, certainly Electron is launching crazy flat out.
08:25You know, we just broke the world record for the fastest time that someone calls up a rocket and launches.
08:30So we did that in 16 hours, 42 minutes for the Space Force and Neutron comes online by the end
08:36of the year.
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