Rocket Lab's Momentum to Accelerate the New Space Race, What Are the Prospects for the Satellite Launch Industry?

Rocket Lab USA Inc. announced two new launch agreements in January 2025, both involving U.S. government agencies. The first is a subcontractor agreement with Kratos Defense & Security Solutions Inc., a San Diego-based defense and security firm. The second, announced on January 9, is a mutual agreement with the National Aeronautics and Space Administration (NASA) to add Neutron launch services to the agency’s portfolio under Rocket Lab’s existing Venture-Class Acquisition of Dedicated and Rideshare (VADR) launch services contract. Rocket Lab will collaborate as part of the Kratos-led team of subcontractors to deliver systems engineering, assembly, integration, testing, mission planning, execution, and launch services for the Multi-Service Advanced Capability Hypersonic Test Bed (MACH-TB) 2.0 program. According to a company release on January 7, Rocket Lab will participate in a 5-year, US$1.45 billion contract awarded to Kratos this month, contingent on the exercise of all options.

Rocket Lab capped off a stellar year in 2024, achieving a company record-breaking 16 successful missions and marking a 60% increase in launch cadence compared to the previous year. The company has also demonstrated its versatility by executing missions for various high-profile clients, including NASA, the National Reconnaissance Office (NRO), and commercial constellation operators like Synspective. Notably, Rocket Lab accomplished a world’s first by launching two missions from different hemispheres within a 24-hour period. The company maintained a flawless 100% mission success rate throughout the year, further solidifying its position as a leading small rocket provider. As Rocket Lab looks ahead to 2025, it aims to continue increasing its launch frequency, while also preparing to enter the medium launch market (capable of lifting 2,000 Kilograms (kg) to 20,000 kg into Low Earth Orbit (LEO)) with the debut of its Neutron rocket.

These developments collectively strengthen Rocket Lab's competitive position in the space launch market and underscore its growing importance in national defense and space exploration initiatives.

Rocket Lab's recent contracts with Kratos Defense & Security Solutions Inc. and NASA mark a significant milestone in its trajectory as a leading aerospace company. The partnership with Kratos on the MACH-TB 2.0 program will enable Rocket Lab to play a pivotal role in advancing the U.S. Department of Defense's hypersonic testing capabilities. By contributing to systems engineering, integration, mission planning, and launch services, Rocket Lab reinforces its position as a critical partner in cutting-edge defense initiatives, demonstrating its expertise in hypersonic technology and its ability to meet the demands of national security projects.

The inclusion of Neutron launch services under NASA’s VADR contract further cements Rocket Lab’s position in the commercial and government space launch market. This agreement not only expands Rocket Lab’s collaboration with NASA, but also showcases its ability to deliver cost-effective and reliable launch solutions for diverse missions.

Rocket Lab's Neutron rocket will significantly expand the company's capabilities across various orbits and payload sizes, positioning it to serve a wide range of commercial and government space launch sectors. With Neutron's ability to deploy up to 13,000 kg to LEO, and its suitability for interplanetary missions, Rocket Lab can now also possibly target Medium Earth Orbit (MEO) and Geosynchronous Earth Orbit (GEO) missions, in addition to its existing LEO capabilities. This expanded reach will allow Rocket Lab to cater to diverse sectors, including defense and national security missions, Satellite Communications (SatCom) constellations, Earth Observation (EO), and scientific payloads. The company's versatility is further demonstrated by its potential to support human spaceflight missions in the future. Neutron's design for constellation deployment, coupled with Rocket Lab's existing small satellite launch expertise, positions the company well to serve both government clients like NASA and the U.S. Space Force, as well as commercial satellite operators across various orbits and payload classes.

The global orbital space launch services industry is on a trajectory of substantial growth, with ABI Research’s projections indicating it will surpass US$29 billion by 2032. This remarkable expansion is fueled by an increasing demand for reliable and cost-effective access to space, resulting in a robust Compound Annual Growth Rate (CAGR) of 8%. Key drivers of this growth include the increasing deployment of satellite constellations for applications such as broadband Internet, EO, navigation, and national defense. Additionally, the rapid advancements in reusable launch technologies and miniaturization of satellite components also contribute to the affordability and frequency of launches. For more in-depth analysis and market forecasts, refer to ABI Research's Satellite Constellations and Launch 2024 market data (MD-SATCC-103).

Rocket Lab faces stiff competition from established players like SpaceX, the United Launch Alliance (ULA), the China Aerospace Science and Technology Corporation (CASC), and Roscosmos, as well as emerging contenders such as Blue Origin. SpaceX continues to dominate the launch market with its reusable Falcon 9 and Falcon Heavy rockets, while also pushing boundaries with Starship development. Blue Origin, with its New Glenn rocket, is poised to enter the heavy-lift market and has already made strides in suborbital tourism with New Shepard. Additionally, international players like Arianespace and emerging Chinese companies, such as Galactic Energy and Space Pioneer, are also intensifying global competition. To stay ahead, emerging rocket launch systems providers like Rocket Lab must not only expand their launch capabilities, but also differentiate themselves through technological innovation and efficient, reliable services across various payload classes and orbits.