Aerospace and defense company Rocket Lab (NASDAQ: RKLB) announced better-than-expected revenue in Q2 CY2026, with sales up 62% year on year to $234.1 million. On top of that, next quarter’s revenue guidance ($257.5 million at the midpoint) was surprisingly good and 7% above what analysts were expecting. Its GAAP loss of $0.08 per share was in line with analysts’ consensus estimates.
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Rocket Lab (RKLB) Q2 CY2026 Highlights:
- Revenue: $234.1 million vs analyst estimates of $231.9 million (62% year-on-year growth, 0.9% beat)
- EPS (GAAP): -$0.08 vs analyst estimates of -$0.08 (in line)
- Adjusted EBITDA: -$8.83 million (-3.8% margin, 68% year-on-year growth)
- Revenue Guidance for Q3 CY2026 is $257.5 million at the midpoint, above analyst estimates of $240.6 million
- EBITDA guidance for Q3 CY2026 is $20 million at the midpoint, above analyst estimates of -$10.23 million
- Adjusted EBITDA Margin: -3.8%, up from -19.1% in the same quarter last year
- Free Cash Flow was -$110.1 million compared to -$55.28 million in the same quarter last year
- Market Capitalization: $49.55 billion
Company Overview
Becoming the first private company in the Southern Hemisphere to reach space, Rocket Lab (NASDAQ: RKLB) offers rockets designed for launching small satellites.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Rocket Lab grew its sales at an incredible 68.9% compounded annual growth rate. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Rocket Lab’s annualized revenue growth of 53.4% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, Rocket Lab reported magnificent year-on-year revenue growth of 62%, and its $234.1 million of revenue beat Wall Street’s estimates by 0.9%. Company management is currently guiding for a 66% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 41.1% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is noteworthy and implies the market is forecasting success for its products and services.
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Operating Margin
Rocket Lab’s high expenses have contributed to an average operating margin of negative 47% over the last five years. Unprofitable industrials companies require extra attention because they could get caught swimming naked when the tide goes out.
On the plus side, Rocket Lab’s operating margin rose by 81.5 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to reach long-term profitability.
In Q2, Rocket Lab generated a negative 24.6% operating margin.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
Although Rocket Lab’s full-year earnings are still negative, it reduced its losses and improved its EPS by 19.2% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability. We hope to see an inflection point soon.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Rocket Lab, its two-year annual EPS growth of 11.9% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.
In Q2, Rocket Lab reported EPS of negative $0.08, up from negative $0.13 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates. Over the next 12 months, Wall Street expects Rocket Lab to improve its earnings losses. Analysts forecast its full-year EPS will improve from negative $0.28 to negative $0.13.
Key Takeaways from Rocket Lab’s Q2 Results
We were impressed by Rocket Lab’s optimistic EBITDA guidance for next quarter, which blew past analysts’ expectations. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. On the other hand, its EPS was in line. Overall, we think this was a solid quarter with some key areas of upside. Investors were likely hoping for more, and shares traded down 1.8% to $78.87 immediately following the results.
Should you buy the stock or not? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
