Pretty much every rocket company in the United States, save one, has embraced two fundamental tenets: reusability and diversification.
Most famously, SpaceX branched out from reusable rockets to pursue and dominate a growing spectrum of space services: cargo delivery, human spaceflight, satellite production, broadband, and, perhaps soon, orbital data centers and in-space manufacturing. Blue Origin is evolving from a pure rocket company into a satellite manufacturer, robotics developer, and, most recently, a potential competitor for SpaceX’s Starlink network.
Rocket Lab used a different approach to diversify after achieving success with its small Electron launch vehicle. The company relocated its headquarters from New Zealand to Southern California, started building spacecraft and payloads, and then went on a spree of corporate acquisitions to expand into satellite communications and take on a new role as a merchant supplier of satellite components and sensors. It’s now in a stage of advanced development of its partially reusable next-generation Neutron launch vehicle.
The list goes on. Firefly Aerospace started as a launch company and now builds Moon landers and space tugs. Relativity Space is already looking beyond rockets before ever putting anything into orbit.
They all realize an enduring truth in the space business. Launch is a low-margin business. SpaceX’s financial statements, now open to inspection after the company went public earlier this year, shine a light on this fact. Just 8 percent of the company’s $12.5 billion in revenue during the first half of this year came from launch services. Another 5 percent came from “launch and development” activities, which include SpaceX’s work on things like NASA’s lunar lander program.
SpaceX attributes the rest of its revenue to Starlink and AI. The potential of the latter is almost solely responsible for SpaceX’s post-IPO valuation of approximately $1.8 trillion.
Rocket Lab’s financials paint a similar picture. It reported $434 million in revenue for the first half of 2026 and credited a quarter of it to launch services.
Given all this, what are we to make of the company that SpaceX supplanted as the country’s leading launch provider?
United Launch Alliance, founded in 2006, was born in an era when the US government was the dominant force in the domestic launch market. Commercial launch demand was on the wane, and what demand there was often went to launch providers in Europe or Russia. Executives at the two leading US launch companies—Boeing and Lockheed Martin—knew they were in trouble. Boeing’s Delta IV rocket program, in particular, was in danger of going out of business.
The situation jeopardized the US government’s policy of ensuring two separate rocket types are available to launch national security payloads into orbit. With the government’s blessing, Boeing and Lockheed entered into a 50-50 joint venture, merging their Delta and Atlas rocket programs under one roof. The merger all but erased competition from the US launch market. However, the sole-source paradigm proved lucrative for ULA’s corporate parents, which each reported hundreds of millions of dollars in earnings from ULA per year in the first decade of the company’s existence.
SpaceX sued the US Air Force in 2014 for the right to compete for military launch contracts, and the Pentagon relented the following year, making SpaceX eligible to bid against ULA. SpaceX won its first high-priority military launch contract in 2016, a few months after the company landed its reusable Falcon 9 booster for the first time.
This moment was a turning point for ULA and the start of a long slide from dominance for the Boeing-Lockheed venture. Around the same time, ULA kicked off development of a new rocket, the Vulcan, to replace the legacy Atlas V and Delta IV rockets. But officials did not prioritize reusability in Vulcan’s design, with no plans to reuse the rocket’s booster stage and only tentative plans to eventually recover and reuse Vulcan’s main engines. A decade later, ULA’s half-hearted stab at reusability hasn’t gone anywhere.
Aside from ULA’s initial design decisions, the company faltered in its execution of the Vulcan rocket’s development, which was co-funded by the Pentagon. Vulcan’s first launch was delayed more than four years from ULA’s original target of 2019. Boeing and Lockheed Martin at first provided only tentative funding for Vulcan’s development, then ULA waited until 2018 to select an engine for Vulcan, deciding on Blue Origin’s BE-4 over Aerojet Rocketdyne’s AR1. Until then, engineers pursued two different designs for the Vulcan rocket—one with a methane-fueled first stage and another, narrower rocket for kerosene.
In the meantime, ULA shelved plans for an advanced, long-duration upper stage, a feature that, at least on paper, appeared to be one of the Vulcan rocket’s advantages over SpaceX’s Falcon rocket family. Delays in testing and qualifying Blue Origin’s BE-4 engine and an explosion of the rocket’s Centaur upper stage during a ground test in 2023 eventually pushed Vulcan’s first test flight into early 2024.
Still, ULA’s stellar track record for reliability proved a key selling point for the Pentagon, which awarded the company more than half of the military’s next batch of launch contracts in 2020, 27 missions worth some $4.5 billion. SpaceX got the rest of the contracts, with 22 launches booked on Falcon 9 and Falcon Heavy rockets for a total value of $4 billion. The situation flipped with the Pentagon’s next round of launch procurement in 2025, when SpaceX won the lion’s share.
ULA’s streak of reliability continued with a near-flawless debut launch of the Vulcan rocket. But ULA ran into trouble on the rocket’s second flight in October 2024 when the exhaust nozzle on one of its Northrop Grumman-built solid rocket boosters shattered moments after liftoff. The rocket kept flying after the anomaly and still reached orbit. An investigation concluded that the nozzle failed due to a “manufacturing defect” in an insulator, leading to the melting and burn-through of the booster nozzle.
But the nozzle problem wasn’t actually fixed. A similar failure on the fourth Vulcan launch last February has grounded the rocket for more than six months. ULA aims to return to flight with the Vulcan rocket soon, perhaps by the end of this month, on a commercial flight with a batch of Amazon Leo broadband satellites. The US Space Force has not cleared Vulcan to resume launches with military payloads, and the program’s cumulative delays have forced military officials to reassign several missions from ULA to SpaceX. Military officials aren’t happy, and they’ve let Boeing and Lockheed know.
A ULA spokesperson said the investigation into the solid rocket booster anomaly is “ongoing” and did not confirm a target launch date for the next Vulcan flight. “We will share the Vulcan Leo 1 mission launch date upon the completion of the investigation and coordination with our customer,” the representative said.
Vulcan’s technical issues are cropping up as launch prices rise at United Launch Alliance. It’s not surprising that the Vulcan rocket, with a fully expendable design, is on average more expensive than SpaceX’s mostly reusable Falcon rocket. But ULA’s launch prices have increased significantly over the last few years—from $112 million to more than $200 million per Vulcan mission—while SpaceX’s prices have remained relatively stable.
At the same time, the financial situation at ULA is not great. Lockheed Martin said its earnings “primarily” attributable to ULA dipped from $325 million in 2016 ($436 million in 2025 dollars) to $100 million in 2022 ($109 million in 2025 dollars). Double that to get an idea of ULA’s net income. Last year, Lockheed reported its share of earnings from ULA was “not significant.” ULA was responsible for a quarter of the operating profit in Lockheed’s space business a decade ago. It dropped to less than 10 percent over the last five years, then to virtually nothing in 2025.
It isn’t as easy to parse ULA’s financial situation from Boeing’s financial statements, which lump ULA’s earnings with several other Boeing joint ventures. But the overall trajectory at Boeing has also trended down.
Boeing and Lockheed’s shareholder equity in United Launch Alliance in 2025 was half of what it was 10 years ago, adjusted for inflation. Shareholder equity, or book value, is a measure of a company’s assets minus liabilities. It’s the amount of money a company’s shareholders would receive after liquidation. The chart below shows the change in how Boeing and Lockheed have valued their equity stakes in ULA since 2016.
Book value isn’t the same as market value, an unknowable figure for an equity-based joint venture like ULA. Market value is typically higher than book value for profitable companies, but Boeing and Lockheed’s earnings suggest that ULA’s finances are, to put it delicately, fragile.
The concerns from ULA’s corporate owners became public in July, when Boeing and Lockheed Martin revealed they guaranteed a loan to sustain ULA through the grounding of the Vulcan rocket. In SEC filings, Boeing and Lockheed wrote that the suspension of Vulcan launches is “negatively affecting ULA’s financial condition and results of operations.”
Lockheed revised down this year’s profitability forecast for its space division by $45 million in July, citing “lower ULA equity earnings.” United Launch Alliance opened 2026 with a forecast of 18 to 22 launches this year. Eight months later, the company has launched five times, and just once with the Vulcan rocket. The lull in launches means fewer customer payments and lower revenue.
ULA’s owners “each agreed to guarantee $500 (million) of certain ULA credit facilities” in May, Boeing said. “We and Lockheed expect to provide additional financial support and could incur losses if ULA is unable to resume Vulcan launches consistent with ULA’s assumptions.” In a footnote, Boeing added that it “generally” issues such credit guarantees on behalf of “parties with less than investment-grade credit.”
Bloomberg reported last month that ULA was looking to raise $1.5 billion, three times the original amount. It’s a remarkable turnabout for Boeing and Lockheed Martin, which have long tapped ULA for a steady flow of revenue.
“ULA’s financial position has been impacted due to the performance challenges associated with the anomaly with the solid rocket booster nozzle experienced on two of the Vulcan launches,” a ULA spokesperson told Ars. “While this is a challenging time bringing our Vulcan rocket up to its optimal launch rate, ULA is well positioned for the future and continues to be laser-focused on our customers’ needs and achieving a reliable and sustainable manifest.”
