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Virgin Galactic Announces First Quarter 2024 Financial Results and Provides Business Update

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Virgin Galactic announced its first quarter 2024 financial results, highlighting revenue of $2 million, a net loss of $102 million, and a cash position of $867 million. The company remains focused on the Delta Class program, targeting commercial service in 2026. 'Galactic 07' mission is planned for June 8, 2024, with VMS Eve expected to support up to 125 flights per year.

Positive
  • Strong cash position of $867 million, cash, cash equivalents, and marketable securities as of March 31, 2024.

  • Revenue increased to $2 million compared to $0.4 million in the first quarter of 2023, driven by commercial spaceflight and membership fees.

  • Lower net loss of $102 million compared to $159 million in the first quarter of 2023, due to lower operating expenses and increased interest income.

  • Adjusted EBITDA improved to $(87) million compared to $(140) million in the first quarter of 2023, driven by lower operating expenses and increased interest income.

  • Production schedule for Delta Class spaceships on track for revenue service in 2026.

Negative
  • High total operating expenses of $113 million compared to $164 million in the first quarter of 2023.

  • Net cash used in operating activities increased to $113 million compared to $136 million in the first quarter of 2023.

  • Free cash flow decreased to $(126) million compared to $(139) million in the first quarter of 2023.

Reviewing the financial results of Virgin Galactic for Q1 2024, we see that the company is transitioning from heavy development costs to a more operational phase. The cash position is robust, with $867 million in reserves, reflecting financial stability in the short-term. This supports their stated goal of commercial spaceflight services by 2026. The increase in revenue to $2 million from $0.4 million suggests early commercial activities are beginning to generate income, albeit these figures are still nominal compared to operating costs. A reduction in net loss and operating expenses indicates improved cost management, but the company's model remains unprofitable with a substantial net loss of $102 million. The capital raise through equity issuance suggests a dilutive effect on current shareholders but provides essential liquidity. The projected annualized revenue run-rate of $450 million with the Delta Class spaceships shows potential for substantial income growth, yet this is still several years away and execution risk remains high. From an investor's perspective, this report provides a mixed picture: positive trends in expense management and initial revenue growth, but continued reliance on capital markets and a long path to profitability.

Virgin Galactic's progress on the 'Galactic 07' mission and the Delta Class spaceships are significant milestones within the aerospace industry. The company's update on their VMS Eve's potential to support up to 125 flights per year demonstrates a commitment to scale operations. The opening of a spaceship final assembly facility in Arizona marks an expansion in infrastructure that is critical for scaling production. The 2026 timeline for commercial service is ambitious and it shows alignment with the broader industry's momentum towards commercial space tourism. However, it's important to scrutinize the production schedule and flight rate targets against industry norms, noting that such forecasts are prone to slippage due to the complex nature of space technology development. The increase in flight capacity implies a potential surge in customer experience opportunities, which can be a substantial market differentiator. However, investors should be aware that these projections are based on successful execution of unproven technologies and a market that is still in its infancy.
  • 'Galactic 07' Mission Planned for June 8, 2024
  • Delta Class Spaceships on Track for Commercial Service in 2026
  • VMS Eve Expected to Support Increased Flight Rate of up to 125 Flights per Year

ORANGE COUNTY, Calif.--(BUSINESS WIRE)-- Virgin Galactic Holdings, Inc. (NYSE: SPCE) (“Virgin Galactic” or the "Company”) today announced its financial results for the first quarter ended March 31, 2024 and provided a business update.

Michael Colglazier, Chief Executive Officer of Virgin Galactic said, “It’s an exciting time for Virgin Galactic as we celebrate the success of VSS Unity with its upcoming 'Galactic 07' mission and remain laser focused on executing our Delta Class program. Tool delivery and parts fabrication are beginning to accelerate as we work to complete the bulk of the Delta design phase this summer and move more fully into the build phase. We remain on track for commercial service in 2026.”

First Quarter 2024 Financial Highlights

  • Cash position remains strong, with cash, cash equivalents and marketable securities of $867 million as of March 31, 2024.
  • Revenue of $2 million, compared to $0.4 million in the first quarter of 2023, driven by commercial spaceflight and membership fees related to future astronauts.
  • GAAP total operating expenses of $113 million, compared to $164 million in the first quarter of 2023. Non-GAAP total operating expenses of $101 million in the first quarter of 2024, compared to $148 million in the first quarter of 2023.
  • Net loss of $102 million, compared to a $159 million net loss in the first quarter of 2023, with the improvement primarily driven by lower operating expenses and an increase in interest income.
  • Adjusted EBITDA totaled $(87) million, compared to $(140) million in the first quarter of 2023, primarily driven by lower operating expenses and an increase in interest income.
  • Net cash used in operating activities totaled $113 million, compared to $136 million in the first quarter of 2023.
  • Cash paid for capital expenditures totaled $13 million, compared to $3 million in the first quarter of 2023.
  • Free cash flow totaled $(126) million, compared to $(139) million in the first quarter of 2023.
  • Generated $7.3 million in gross proceeds through the issuance of 5.1 million shares of common stock as part of the Company's at-the-market offering program.

Business Updates

  • Spaceship final assembly facility in Arizona on track to open in summer 2024.
  • Production schedule for the Delta Class spaceships remains on track for revenue service in 2026.
  • VMS Eve expected to support increased flight rate of up to 125 flights per year and an annualized run-rate of $450 million in revenue with the first two Delta Class spaceships.

Financial Guidance
The following forward-looking statements reflect our expectations for the second quarter of 2024 as of May 7, 2024 and are subject to substantial uncertainty. Our results are based on assumptions that we believe to be reasonable as of this date, but may be materially affected by many factors, as discussed below in “Forward-Looking Statements.”

  • Revenue for the second quarter of 2024 is expected to be approximately $3.5 million.
  • Free cash flow for the second quarter of 2024 is expected to be in the range of $(110) million to $(120) million.

Non-GAAP Financial Measures
In addition to the Company's results prepared in accordance with generally accepted accounting principles in the United States (GAAP), the Company is also providing certain non-GAAP financial measures. A discussion regarding the use of non-GAAP financial measures and a reconciliation of such measures to the most directly comparable GAAP information is presented later in this press release.

Conference Call Information
Virgin Galactic will host a conference call to discuss the results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) today. To access the conference call, parties should dial +1 888-660-6431 or +1 929-203-2118 and enter the conference ID number 4014201. The live audio webcast along with supplemental information will be accessible on the Company’s Investor Relations website at https://investors.virgingalactic.com/events-and-presentations/. A recording of the webcast will also be available following the conference call.

About Virgin Galactic
Virgin Galactic is an aerospace and space travel company, pioneering human spaceflight for private individuals and researchers with its advanced air and space vehicles. Scale and profitability are driven by next generation vehicles capable of bringing humans to space at an unprecedented frequency with an industry-leading cost structure. You can find more information at https://www.virgingalactic.com/.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this press release other than statements of historical fact, including, without limitation, statements regarding our spaceflight systems, next commercial space mission and proposed timing thereof, scaling of our future fleet, increasing our flight rate, providing repeatable and reliable access to space, development of our Delta Class spaceships and proposed timeline for testing and commercial service using such spaceships, development of our next generation motherships and proposed timing of delivery thereof, the timing of the opening of our spaceship factory in Arizona, the timing of the design process of our Delta Class spaceships and the delivery of parts ahead of assembling the initial Delta Class spaceships, expansion plans for spaceports around the world, and our objectives for future operations, growth plans and the Company’s financial forecasts, including second quarter 2024 expected revenue and free cash flow, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “strategy,” “future,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to any delay in future commercial flights of our spaceflight fleet, our ability to successfully develop and test our next generation vehicles, and the time and costs associated with doing so, our expected capital requirements and the availability of additional financing, and the other factors, risks and uncertainties included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as such factors may be updated from time to time in our other filings with the Securities and Exchange Commission (the "SEC"), accessible on the SEC’s website at www.sec.gov and the Investor Relations section of our website at www.virgingalactic.com, which could cause our actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

First Quarter 2024 Financial Results

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except per share amounts)

 

 

 

Three Months Ended March 31,

 

 

2024

 

2023

 

 

 

 

 

Revenue

 

$

1,985

 

 

$

392

 

 

 

 

 

 

Operating expenses:

 

 

 

 

Spaceline operations

 

 

22,591

 

 

 

318

 

Research and development

 

 

58,969

 

 

 

109,870

 

Selling, general and administrative

 

 

27,884

 

 

 

50,365

 

Depreciation and amortization

 

 

3,699

 

 

 

3,245

 

Total operating expenses

 

 

113,143

 

 

 

163,798

 

 

 

 

 

 

Operating loss

 

 

(111,158

)

 

 

(163,406

)

 

 

 

 

 

Interest income

 

 

12,308

 

 

 

7,330

 

Interest expense

 

 

(3,227

)

 

 

(3,211

)

Other income, net

 

 

145

 

 

 

30

 

Loss before income taxes

 

 

(101,932

)

 

 

(159,257

)

Income tax expense

 

 

80

 

 

 

128

 

Net loss

 

 

(102,012

)

 

 

(159,385

)

Other comprehensive income (loss):

 

 

 

 

Foreign currency translation adjustment

 

 

(8

)

 

 

35

 

Unrealized gain (loss) on marketable securities

 

 

(864

)

 

 

3,101

 

Total comprehensive loss

 

$

(102,884

)

 

$

(156,249

)

 

 

 

 

 

Net loss per share:

 

 

 

 

Basic and diluted

 

$

(0.25

)

 

$

(0.57

)

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

Basic and diluted

 

 

400,387

 

 

 

278,450

 

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

March 31, 2024

 

December 31, 2023

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

195,433

 

 

$

216,799

 

Restricted cash

 

 

34,918

 

 

 

36,793

 

Marketable securities, short-term

 

 

569,778

 

 

 

657,238

 

Other current assets

 

 

37,324

 

 

 

39,999

 

Total current assets

 

 

837,453

 

 

 

950,829

 

Marketable securities, long-term

 

 

67,105

 

 

 

71,596

 

Property, plant and equipment, net

 

 

110,610

 

 

 

93,806

 

Other non-current assets

 

 

63,093

 

 

 

63,286

 

Total assets

 

$

1,078,261

 

 

$

1,179,517

 

Liabilities and Stockholders' Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

32,886

 

 

$

32,415

 

Customer deposits

 

 

92,334

 

 

 

97,841

 

Other current liabilities

 

 

46,534

 

 

 

55,404

 

Total current liabilities

 

 

171,754

 

 

 

185,660

 

Non-current liabilities:

 

 

 

 

Convertible senior notes, net

 

 

418,438

 

 

 

417,886

 

Other non-current liabilities

 

 

70,487

 

 

 

70,495

 

Total liabilities

 

 

660,679

 

 

 

674,041

 

Stockholders' Equity

 

 

 

 

Common stock

 

 

41

 

 

 

40

 

Additional paid-in capital

 

 

2,646,186

 

 

 

2,631,197

 

Accumulated deficit

 

 

(2,228,144

)

 

 

(2,126,132

)

Accumulated other comprehensive income (loss)

 

 

(501

)

 

 

371

 

Total stockholders' equity

 

 

417,582

 

 

 

505,476

 

Total liabilities and stockholders' equity

 

$

1,078,261

 

 

$

1,179,517

 

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

 

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(102,012

)

 

$

(159,385

)

Stock-based compensation

 

 

8,244

 

 

 

12,976

 

Depreciation and amortization

 

 

3,699

 

 

 

3,245

 

Amortization of debt issuance costs

 

 

552

 

 

 

535

 

Other non-cash items

 

 

(5,328

)

 

 

(236

)

Change in operating assets and liabilities:

 

 

 

 

Other current and non-current assets

 

 

3,835

 

 

 

7,594

 

Accounts payable

 

 

(7,480

)

 

 

2,146

 

Customer deposits

 

 

(5,507

)

 

 

(569

)

Other current and non-current liabilities

 

 

(9,232

)

 

 

(2,375

)

Net cash used in operating activities

 

 

(113,229

)

 

 

(136,069

)

Cash flows from investing activities:

 

 

 

 

Capital expenditures

 

 

(13,072

)

 

 

(2,767

)

Purchases of marketable securities

 

 

(161,843

)

 

 

(83,287

)

Proceeds from maturities and calls of marketable securities

 

 

257,414

 

 

 

305,791

 

Other investing activities

 

 

598

 

 

 

 

Net cash provided by investing activities

 

 

83,097

 

 

 

219,737

 

Cash flows from financing activities:

 

 

 

 

Payments of finance lease obligations

 

 

(60

)

 

 

(59

)

Proceeds from issuance of common stock

 

 

7,272

 

 

 

32,044

 

Withholding taxes paid on behalf of employees on net settled stock-based awards

 

 

(269

)

 

 

(1,870

)

Transaction costs related to issuance of common stock

 

 

(52

)

 

 

(320

)

Net cash provided by financing activities

 

 

6,891

 

 

 

29,795

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

(23,241

)

 

 

113,463

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

253,592

 

 

 

342,627

 

Cash, cash equivalents and restricted cash at end of period

 

$

230,351

 

 

$

456,090

 

 

 

 

 

 

Cash and cash equivalents

 

$

195,433

 

 

$

415,682

 

Restricted cash

 

 

34,918

 

 

 

40,408

 

Cash, cash equivalents and restricted cash

 

$

230,351

 

 

$

456,090

 

Use of Non-GAAP Financial Measures

This press release references certain financial measures that are not prepared in accordance with generally accepted accounting principles in the United States (GAAP), including total non-GAAP operating expenses, Adjusted EBITDA and free cash flow. The Company defines total non-GAAP operating expenses as total operating expenses other than stock-based compensation and depreciation and amortization. The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation and amortization and stock-based compensation. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. None of these non-GAAP financial measures is a substitute for or superior to measures prepared in accordance with GAAP and should not be considered as an alternative to any other measures derived in accordance with GAAP.

The Company believes that presenting these non-GAAP financial measures provides useful supplemental information to investors about the Company in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making. However, there are a number of limitations related to the use of non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore any non-GAAP measures the Company uses may not be directly comparable to similarly titled measures of other companies.

A reconciliation of total operating expenses to total non-GAAP operating expenses for the three months ended March 31, 2024 and 2023, respectively, is set forth below (in thousands):

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Total operating expenses

 

$

113,143

 

$

163,798

Stock-based compensation

 

 

8,244

 

 

12,976

Depreciation and amortization

 

 

3,699

 

 

3,245

Total non-GAAP operating expenses

 

$

101,200

 

$

147,577

A reconciliation of net loss to Adjusted EBITDA for the three months ended March 31, 2024 and 2023, respectively, is set forth below (in thousands):

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Net loss

 

$

(102,012

)

 

$

(159,385

)

Interest expense

 

 

3,227

 

 

 

3,211

 

Income tax expense

 

 

80

 

 

 

128

 

Depreciation and amortization

 

 

3,699

 

 

 

3,245

 

Stock-based compensation

 

 

8,244

 

 

 

12,976

 

Adjusted EBITDA

 

$

(86,762

)

 

$

(139,825

)

The following table reconciles net cash used in operating activities to free cash flow for the three months ended March 31, 2024 and 2023, respectively (in thousands):

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Net cash used in operating activities

 

$

(113,229

)

 

$

(136,069

)

Capital expenditures

 

 

(13,072

)

 

 

(2,767

)

Free cash flow

 

$

(126,301

)

 

$

(138,836

)

 

For media inquiries:

Aleanna Crane - Vice President, Communications

news@virgingalactic.com

575.800.4422

For investor inquiries:

Eric Cerny - Vice President, Investor Relations

vg-ir@virgingalactic.com

949.774.7637

Source: Virgin Galactic Holdings, Inc.

FAQ

When is the 'Galactic 07' mission planned?

The 'Galactic 07' mission is planned for June 8, 2024.

What is the cash position of Virgin Galactic as of March 31, 2024?

Virgin Galactic had a cash position of $867 million as of March 31, 2024.

What is the expected revenue service year for the Delta Class spaceships?

The production schedule for the Delta Class spaceships is on track for revenue service in 2026.

Virgin Galactic Holdings, Inc.

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virgin galactic is the world’s first commercial spaceline. we are developing vehicles to fly private astronauts, research experiments, and satellites to space—democratizing access to space for the benefit of life on earth. the virgin galactic astronaut experience will include out-of-seat weightlessness and stunning views of earth from space onboard spaceshiptwo, our reusable spaceplane designed for us by aerospace pioneer scaled composites. spaceshiptwo has been designed to carry two pilots and as many as six astronauts (or more than 1,000 pounds of experiments) to space and back on commercial flights from new mexico’s spaceport america, the world’s first purpose-built commercial spaceport. we are also developing launcherone, a dedicated launch vehicle for small satellites. launcherone is designed to carry smaller satellites (typically 200-300 kilograms)) into earth orbit for historically low prices. together with our wholly-owned manufacturing arm, the spaceship company, virgin galact