Rocket Lab (RKLB +1.60%) keeps breaking its own records. The space company’s revenue rose 62% year over year to a record $234 million in the second quarter of 2026. Its backlog grew to a record $2.36 billion, up 137%.
And management’s guidance for third-quarter revenue of $250 million to $265 million calls for yet another record.
There’s a complication ahead, though. In June, Rocket Lab agreed to buy satellite operator Iridium Communications (IRDM +2.30%) in an $8 billion deal expected to close in mid-2027.
Iridium produced about $872 million of revenue in 2025. So when the deal closes, Rocket Lab’s reported totals will fold in a large business it bought.
That’s why my prediction draws a hard line. I think Rocket Lab’s own operations (not counting a dollar from Iridium) top $1.5 billion of revenue in 2027.
Image source: The Motley Fool.
What does $1.5 billion take?
This year’s total isn’t complete yet. Rocket Lab reported a little over $200 million of revenue in the first quarter and $234 million in the second, for about $434 million through June.
The midpoint of third-quarter guidance would bring the company to about $692 million with a quarter left. A fourth quarter around $280 million (my estimate, in line with this year’s sequential gains) would put 2026 at about $970 million, up about 61% from the $602 million Rocket Lab reported in 2025. That 2025 total was itself up 38%.
From there, my prediction asks for less than it might seem. Hitting $1.5 billion in 2027 from about $970 million takes growth of about 55%. Put another way, it asks Rocket Lab to slow down.
After all, revenue rose about 63% year over year in the first quarter and 62% in the second. Those rates benefited from acquisitions that now sit in the base, so next year’s growth must come largely from the business as it stands. Even if fourth-quarter revenue only equals the third quarter’s guided midpoint, putting 2026 near $950 million, the requirement is about 58% — still below today’s pace.
Nearly half the backlog is expected to convert within a year
A surprising amount of next year’s revenue is already under contract. In its second-quarter filing, the company reported about 45% of its $2.36 billion backlog (around $1.1 billion) is expected to be recognized as revenue within 12 months. Some of that arrives in late 2026. But the window extends through mid-2027, and the other 55% sits behind it.
The backlog is still growing, too. It was $2.2 billion at the end of March and $2.36 billion at the end of June — and that increase came even as Rocket Lab recognized $234 million of revenue during that period. Behind those totals sits the largest single contract the company has ever announced: an $816 million Space Development Agency award for 18 satellites.
Granted, acquisitions added backlog too, and a backlog isn’t a schedule. Contracts can shift, and programs can slip.
Still, the mix is encouraging. Space systems, the segment that builds satellites and components, accounts for about $1.4 billion of the backlog and generated $189.5 million of second-quarter revenue, up 94% year over year (a rate helped by recent acquisitions).
Neutron is upside, not a requirement
Notably, I haven’t counted Neutron, the bigger rocket Rocket Lab is building to compete with SpaceX, anywhere in this forecast. The company targets delivering it to the launch pad in the fourth quarter of 2026, and a launch date hasn’t been announced.
The forecast is built that way on purpose. If Neutron debuts in 2027 and starts working through the launch contracts waiting on it, that revenue arrives on top of my numbers. If the rocket slips, the forecast doesn’t change much, because the revenue it counts comes from satellite work and Electron, the company’s smaller rocket that is already flying.
Will Rocket Lab top $1.5 billion in 2027 without Iridium? I think so.
Today’s Change
(1.60%) $1.00
Current Price
$63.55
Key Data Points
Market Cap
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$62.02 – $65.72
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Gross Margin
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The growth needed is slower than what the company is already delivering, and nearly half of a record backlog is expected to convert. What could change my mind is a stall in space systems deliveries or a stretch where bookings stop outrunning revenue. Neither has shown up yet.
The prediction ends at the revenue line, though. Rocket Lab still expects an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $17 million to $23 million in the third quarter, larger than the second quarter’s $8.8 million loss.
The valuation is the other concern. At roughly $63 per share as of this writing, shares already price in years of growth like this.
So even with that revenue on the way, this growth stock isn’t one I’d buy today.
