When a company isn't profitable yet, the question is how long they can keep going.
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✦ The bottom line
Rocket Lab is losing $45M per quarter. But they have $1.2B in the bank — and just raised $450M more.
↓ the brief below
✦ Teach me
How long the cash lasts at the current burn
Take how much cash a company has. Divide by how fast they're spending it. That's the runway — how many months until they need more money. The longer the runway, the calmer everyone is.
Wall Street calls this
Cash runway / months of runway
For unprofitable growth companies, runway is the *single most important* number. Run out, and the story ends — no matter how good everything else looks.
What Rocket Lab owns vs. owes
Cash + investments
~$1.2B
Total debt
~$150M
Cash far outweighs debt — the risk isn't leverage, it's the burn rate eating the pile.
$1.2 billion sitting in the bank is the cushion — but a cushion is only as good as how fast you're spending through it. Cash a year from now isn't the same number as cash today; whatever rate the company is burning chips away at that pile every quarter. The translator above gave you the formula: cash divided by burn rate equals months of runway. We just saw the cash. So what's the burn?
Cash *used* in the latest quarter
$50
M
Cash burned running the business this quarter. Add another $27M building new factories and pads. They're spending faster than they earn — for now.
Proceeds from ATM Equity Offerings: $450M. ("ATM" = an At-The-Market offering — the company quietly sold $450M worth of new shares into the open market.)
↳ Cash up, share count up too. is the price of staying solvent before profitability hits.