Rocket Lab pushes Neutron's first launch into 2027 after finding flaws in a carbon-composite tank dome

Rocket Lab has pushed the first flight of its Neutron rocket into 2027, giving up on flying it this year after finding voids in a carbon-composite dome for the rocket's first-stage propellant tank and deciding to build a new one.

A year-end goal slips

Rocket Lab said after the market closed on Wednesday that the first launch of Neutron, its reusable medium-lift rocket, is now expected in 2027. In a Form 8-K filed the same afternoon, the company said the first launch "is now anticipated to shift into next year" as the team continues development and incorporates process improvements.

The company had been aiming for the fourth quarter of 2026. It set that target in its February results release, after a Neutron first-stage tank ruptured during a hydrostatic pressure trial in January. By August the language had already softened: the second-quarter release said Stage 1 tank production was aligned with delivering Neutron to the launch pad in the fourth quarter, rather than launching it then.

The flaw in the dome

The filing and press release say little about the cause. The detail came from Chief Executive Peter Beck in a video update tied to the "Rocket Lab Neutron Update" that the company listed on its investor presentations page on Wednesday.

According to published accounts of that video, Beck said an inspection turned up voids, tiny air pockets between layers of carbon fiber, in a newly cured forward propellant dome for the rocket's first stage. He said the voids formed in sections that had been made thicker under a design change after an earlier qualification test, that the team reproduced the problem in testing and that it has changed the manufacturing process to prevent it.

"They don’t necessarily mean that the dome would fail on flight, but our practice is to proceed only when we believe the system has the appropriate margins," Beck said in the video. "Possible success isn’t our standard."

Building a replacement dome, on top of the time spent investigating, is what pushed the launch into next year, he said. Rocket Lab plans to use the extra time to bring forward upgrades to other parts of the vehicle that had been planned for later flights.

What has to happen before a new date

Beck described the remaining work in stages. The new forward dome is being built now; it then has to be cured and inspected to confirm there are no further voids. After that, the forward and aft domes and other components are assembled into a complete first stage, which goes through hydrostatic and then cryogenic testing.

He said building and inspecting the dome should be finished before the first quarter, with assembly of the full first stage expected within that quarter. Only then, he said, would the company be in a position to announce a launch date. The company has not given one.

Why investors care

Neutron is the part of Rocket Lab's business that is supposed to move it beyond small launches. The company's Electron and HASTE rockets are small-lift vehicles; it describes Neutron as the rocket that will open up medium-lift launches for constellations, national security and exploration.

Some of that business is already booked. In August the company said it had won a $397 million contract, including options, to deliver multiple Flatellite spacecraft that will launch on Neutron for the U.S. Space Force's Space-Based Airborne Moving Target Indicator program. Beck said in the video that demand remains strong and that new contracts will be announced soon. The company has not said whether any customer launch dates will move.

The rest of the business has been growing quickly. Second-quarter revenue rose 62% to a record $234 million, backlog reached $2.36 billion, and the company guided to third-quarter revenue of $250 million to $265 million. It is also working toward closing its pending acquisition of Iridium Communications.

The share reaction

The shares were already under pressure before the announcement. RKLB closed Wednesday's regular session at $59.18, down 7.85% from Tuesday's $64.22, and was at $53.30 late in after-hours trading, according to StockAnalysis market data.

Neutron was unveiled in 2021 with a 2024 debut target, which later moved to mid-2025 and then into 2026. Wednesday's change pushes the first flight into a fourth calendar year, and this time without a quarter attached.