Rocket Lab says $515m satellite contract makes it a prime supplier

The confirmation that Rocket Lab's largest-ever contract is a Pentagon purchase order signals the arrival of another major player in the military-satellite market.

The company announced Monday it nabbed a $515 million contract to build 18 data-transport satellites that will be launched into low-Earth orbit to fill out Tranche 2 of the Space Development Agency’s Proliferated Warfighter Space Architecture, a planned network of hundreds of military satellites and sensors.

In December, Rocket Lab said it won this contract but didn’t disclose the type of satellite or customer. 

The contract “establishes Rocket Lab’s position as a leading satellite prime contractor, providing supply chain diversity to the Department of Defense and commercial constellations alike,” the company’s CEO, Peter Beck, said during a call with investors on Monday.  

Rocket Lab will build the satellites and subsystems in its manufacturing complex in Long Beach, California, then integrate a payload supplied by a company that executives declined to identify. 

The bus on the SDA satellites will be a derivative of the ones Rocket Lab is building for Globalstar, a satellite communications company, Beck said.

Rocket Lab’s big contract arrived several months after Northrop Grumman and Lockheed Martin each received an order for 36 Tranche 2 satellites for launch in 2026. 

Rocket Lab’s Tranche 2 satellites, which will launch by July 2027, bring the number of “Beta” satellites up to 90. Eventually, Tranche 2 will have over 200 satellites across three variants, Beta, Alpha, and Gamma, that will provide different kinds of communication.

The company will continue to compete for other SDA tranches, said CFO Adam Spice. “We do see there are other opportunities where we can add value to SDA, so we're certainly not stopping [at] Beta,” Spice said. 

This contract is a “generational growth opportunity” for Rocket Lab and “firmly puts us in the same peer group as much larger, more established government primes,” Spice said.  

Rocket Lab is also growing in the space launch market. It’s been dominating the small-launch market with its Electron vehicle and is three years into developing a reusable medium-lift rocket called Neutron. The company, which hopes Neutron will fly this year, aims to pitch it for the Pentagon’s next launch competition.

Beck said they will “certainly” put Neutron forward as a potential launch provider for the SDA satellites.