Virgin Galactic (NYSE: SPCE) flags going concern risk despite smaller loss

Rhea-AI Filing Summary

Virgin Galactic reported another quarterly loss and highlighted serious liquidity pressure. For the three months ended March 31, 2026, revenue was just $227,000, while net loss was $64.7 million, narrower than the $84.5 million loss a year earlier, mainly as research and development spending declined.

Cash, cash equivalents, restricted cash and marketable securities totaled about $250.5 million, and operating activities used $53.5 million of cash in the quarter. Management concluded that these resources may not fund planned operations for 12 months and stated there is substantial doubt about the company’s ability to continue as a going concern.

The company is targeting flight tests of its next-generation spaceships in the third quarter of 2026 and first commercial flights in the fourth quarter of 2026, supported by reservations from about 650 future astronauts representing roughly $186 million of potential revenue. To bridge its funding gap, Virgin Galactic is relying on additional debt or equity raises, including its at-the-market stock program, and has significant obligations under its 2027 and 2028 notes.

Positive

• None.

Negative

• Substantial doubt about going concern: Management determined existing cash and marketable securities may not cover planned operations and obligations for 12 months, explicitly stating substantial doubt about the company’s ability to continue as a going concern under ASC 205‑40.
• High cash burn with limited revenue: Operating cash outflow was $53.5 million in the quarter against revenue of only $227,000, while the company still must fund completion and testing of its next‑generation spaceships and meet required redemptions on its 2027 and 2028 notes.
• Heavy dependence on external financing and equity issuance: The firm is leaning on its at‑the‑market stock program, additional financings, and potential equity‑settled redemptions of debt, creating meaningful dilution risk to existing shareholders if capital markets support is needed at scale.

Insights

Equity and credit analyst

Losses are narrowing, but the going concern warning and funding gap are materially negative.

Virgin Galactic posted a smaller net loss of $64.7 million, helped by sharply lower research and development spending as its next-generation vehicles move from design toward manufacturing and testing. However, revenue remains minimal at $227,000, so the business is still essentially pre-commercial.

Liquidity is the central issue. The company held $250.5 million of cash, cash equivalents, restricted cash and marketable securities as of March 31 2026, but used $53.5 million of operating cash in the quarter and faces required redemptions and maturities on its 2027 and 2028 notes. Management explicitly concluded there is substantial doubt about its ability to continue as a going concern under accounting guidance.

Management’s mitigation plans—commercial flights targeted for the fourth quarter of 2026, drawing on a backlog of about 650 reservations worth roughly $186 million, premium pricing for early flights, more ATM equity issuance, additional financings, and potential equity-settled debt redemptions—depend heavily on market conditions and execution. Subsequent disclosures note an April 2026 stock sale and a planned stock-settled redemption of up to $10 million of 2028 notes, underscoring reliance on capital markets.

Key Figures

Quarterly revenue: $227,000 Net loss: $64.7 million Operating cash outflow: $53.5 million +5 more

8 metrics

Quarterly revenue $227,000 Three months ended March 31, 2026

Net loss $64.7 million Three months ended March 31, 2026

Operating cash outflow $53.5 million Net cash used in operating activities, Q1 2026

Cash and restricted cash $155.5 million As of March 31, 2026

Marketable securities $95.1 million As of March 31, 2026

Debt outstanding (principal) $282.9 million Total contractual principal of 2027 and 2028 notes, March 31, 2026

Future astronaut backlog 650 seats, $186 million Reservations and expected future spaceflight revenue as of March 31, 2026

ATM equity raised April 2026 $51.6 million Gross proceeds from 18.1 million shares sold under 2024 ATM Program in April 2026

Key Terms

going concern, at-the-market offering, First Lien Notes, Pre-Funded Warrants, +2 more

6 terms

going concern financial

"raise substantial doubt about the Company’s ability to continue as a going concern"

A going concern is a business that is expected to continue its operations and meet its obligations for the foreseeable future, rather than shutting down or selling off assets. This assumption matters to investors because it indicates stability and ongoing profitability, making the business a more reliable investment. Think of it as believing a restaurant will stay open and serve customers, rather than closing down suddenly.

at-the-market offering financial

"through an “at-the-market offering” program (the “2024 ATM Program”)"

An at-the-market offering is a method companies use to sell new shares of stock directly into the open market over time, rather than all at once. This allows them to raise money gradually, similar to selling small pieces of a product instead of a large batch. For investors, it means the company can access funding more flexibly, but it may also increase the supply of shares and influence the stock’s price.

First Lien Notes financial

"9.80% First Lien Notes due 2028 (“2028 Notes”)"

First lien notes are debt securities backed by specific assets that give their holders the top legal claim on those assets if the borrower can’t pay—think of them like a primary mortgage on a property: whoever holds the first lien gets paid off first from the sale. They matter to investors because that priority reduces the risk of losing principal compared with unsecured or lower-priority debt, usually meaning more protection but typically a lower yield.

Pre-Funded Warrants financial

"pre-funded warrants (the “Pre-Funded Warrants”) to purchase 8.4 million shares"

Pre-funded warrants are financial instruments that give investors the right to purchase a company's stock at a set price, but with most or all of the purchase price paid upfront. They function like a coupon or gift card for stock, allowing investors to buy shares later at a fixed price, which can be beneficial if they want to avoid future price increases. This makes them important for investors seeking flexibility and certainty in their investment plans.

High-Altitude, Long-Endurance (“HALE”) technical

"use a derivative model of our launch vehicle as a High-Altitude, Long-Endurance (“HALE”) aircraft"

stock-based compensation financial

"Total stock-based compensation expense | 4,121 | 4,769"

Stock-based compensation is when a company pays employees, directors or consultants with shares or the right to buy shares instead of or in addition to cash. It matters to investors because issuing stock or options spreads ownership thinner (like cutting a pie into more slices), which can reduce each existing share’s claim on profits and can also change reported earnings; investors watch it to assess true cost of running the business and how management is incentivized.

10-Q Quarterly Reports: What Changes Quarter to Quarter →

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-38202

Virgin Galactic Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware						85-3608069
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1700 Flight Way Tustin, California						92782
(Address of Principal Executive Offices)						(Zip Code)

(949) 774-7640

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $0.0001 par value per share

SPCE

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer			☐			Accelerated filer			☐
Non-accelerated filer			☒			Smaller reporting company			☒
						Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of May 7, 2026, there were 100,683,438 shares of the Company’s common stock outstanding.

Table of Contents

VIRGIN GALACTIC HOLDINGS, INC.

TABLE OF CONTENTS

						Page
			PART I - FINANCIAL INFORMATION
			Cautionary Note Regarding Forward-Looking Statements			2
Item 1.			Financial Statements (Unaudited)			4
			Condensed Consolidated Balance Sheets			4
			Condensed Consolidated Statements of Operations and Comprehensive Loss			5
			Condensed Consolidated Statements of Stockholders’ Equity			6
			Condensed Consolidated Statements of Cash Flows			7
			Notes to Condensed Consolidated Financial Statements			8
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3.			Quantitative and Qualitative Disclosures about Market Risk			29
Item 4.			Controls and Procedures			29
			PART II - OTHER INFORMATION
Item 1.			Legal Proceedings			30
Item 1A.			Risk Factors			30
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			30
Item 3.			Defaults Upon Senior Securities			30
Item 4.			Mine Safety Disclosures			30
Item 5.			Other Information			30
Item 6.			Exhibits			30
Signatures						32

1

Table of Contents

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning us and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of management, as well as assumptions made by, and information currently available to management.

Forward-looking statements may be accompanied by words such as “achieve,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “future,” “grow,” “increase,” “intend,” “may,” “opportunity,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or similar words, phrases, or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside our control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the following:

•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;

•the safety of our spaceflight systems;

•the development of the markets for commercial spaceflight and commercial research and development payloads;

•our ability to effectively market and sell spaceflights;

•our ability to convert our backlog or inbound inquiries into revenue;

•our anticipated full passenger capacity;

•our ability to achieve or maintain profitability;

•delay in development or the manufacture of spaceflight systems;

•our ability to supply our technology to additional market opportunities;

•our expected capital requirements, the availability of additional financing and our ability to continue as a going concern;

•our ability to attract or retain highly qualified personnel;

•the effect of terrorist activity, armed conflict, natural disasters or pandemic diseases on the economy generally, on our future financial or operational results, or our access to additional financing;

•consumer preferences and discretionary purchasing activity, which can be significantly adversely affected by unfavorable economic or market conditions;

•extensive and evolving government regulations that impact the way we operate, including the potential negative effects of changes in United States tariff and import/export regulations;

•risks associated with international expansion;

•our expectations regarding the resolution of certain legal proceedings, including anticipated settlement amounts and timing, which may be subject to change based on various factors, including court approvals and negotiations with involved parties;

2

Table of Contents

•our ability to maintain effective internal control over financial reporting and disclosure and procedures; and

•our ability to continue to use, maintain, enforce, protect and defend our owned and licensed intellectual property, including the Virgin brand.

Additional factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in Part I, Item 1.“Business,” Part I, Item 1A. “Risk Factors,” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Annual Report on Form 10-K”) and in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q. Although we believe that the expectations reflected in the forward-looking statements are reasonable, our information may be incomplete or limited, and we cannot guarantee future results. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

Each of the terms the “Company,” “Virgin Galactic,” “we,” “our,” “us” and similar terms used herein refer collectively to Virgin Galactic Holdings, Inc., a Delaware corporation, and its consolidated subsidiaries, unless otherwise stated.

3

Table of Contents

PART I. FINANCIAL INFORMATION

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(Unaudited; in thousands, except share and per share amounts)

									March 31, 2026												December 31, 2025
Assets
Current assets:
Cash and cash equivalents									$	124,837											$	144,727
Restricted cash									30,634												30,988
Marketable securities									95,054												162,313
Other current assets									32,931												34,870
Total current assets									283,456												372,898
Property, plant and equipment, net									426,713												388,730
Other non-current assets									40,060												41,551
Total assets									$	750,229											$	803,179
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable									$	17,041											$	15,163
Current portion of long-term debt									117,041												47,830
Customer deposits									77,954												78,535
Other current liabilities									70,578												67,795
Total current liabilities									282,614												209,323
Non-current liabilities:
Long-term debt									202,695												276,362
Other long-term liabilities									41,191												43,530
Total liabilities									526,500												529,215
Commitments and contingencies (Note 14)
Stockholders’ Equity
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding									—												—
Common stock, $0.0001 par value; 700,000,000 shares authorized; 81,409,340 and 73,326,504 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively									8												7
Additional paid-in capital									3,040,171												3,025,604
Accumulated deficit									(2,816,494)												(2,751,779)
Accumulated other comprehensive income									44												132
Total stockholders’ equity									223,729												273,964
Total liabilities and stockholders’ equity									$	750,229											$	803,179

See accompanying notes to condensed consolidated financial statements.

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VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited; in thousands, except per share amounts)

												Three Months Ended March 31,
																		2026						2025
Revenue																		$	227					$	461
Operating expenses:
Spaceline operations																		29,640						20,826
Research and development																		6,712						33,310
Selling, general and administrative																		25,551						30,550
Depreciation and amortization																		3,916						4,223
Total operating expenses																		65,819						88,909
Operating loss																		(65,592)						(88,448)
Interest income																		2,701						7,215
Interest expense																		(1,828)						(3,240)
Other income, net																		34						34
Loss before income taxes																		(64,685)						(84,439)
Income tax expense																		30						48
Net loss																		(64,715)						(84,487)
Other comprehensive loss:
Foreign currency translation adjustment																		(3)						(4)
Unrealized loss on marketable securities																		(85)						(176)
Total comprehensive loss																		$	(64,803)					$	(84,667)
Net loss per share:
Basic and diluted																		$	(0.81)					$	(2.38)
Weighted-average shares outstanding:
Basic and diluted																		79,482						35,440

See accompanying notes to condensed consolidated financial statements.

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VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Statements of Stockholders’ Equity    

(Unaudited; in thousands, except share amounts)

						Common Stock												Additional Paid-in Capital						Accumulated Deficit						Accumulated Other Comprehensive Income (Loss)						Total
						Shares						Amount
Balance at December 31, 2024						32,995,822						$	3					$	2,794,871					$	(2,472,872)					$	278					$	322,280
Net loss						—						—						—						(84,487)						—						(84,487)
Other comprehensive loss						—						—						—						—						(180)						(180)
Stock-based compensation for equity-classified awards						—						—						4,833						—						—						4,833
Issuance of common stock pursuant to stock-based awards, net of withholding taxes						49,040						—						(50)						—						—						(50)
Issuance of common stock pursuant to at-the-market offering						6,946,164						1						30,729						—						—						30,730
Transaction costs						—						—						(955)						—						—						(955)
Balance at March 31, 2025						39,991,026						4						2,829,428						(2,557,359)						98						272,171

						Common Stock												Additional Paid-in Capital						Accumulated Deficit						Accumulated Other Comprehensive Income (Loss)						Total
						Shares						Amount
Balance at December 31, 2025						73,326,504						$	7					$	3,025,604					$	(2,751,779)					$	132					$	273,964
Net loss						—						—						—						(64,715)						—						(64,715)
Other comprehensive loss						—						—						—						—						(88)						(88)
Stock-based compensation for equity-classified awards						—						—						3,928						—						—						3,928
Issuance of common stock pursuant to stock-based awards, net of withholding taxes						6,140						—						(8)						—						—						(8)
Issuance of common stock pursuant to at-the-market offering						3,970,640						—						10,961						—						—						10,961
Exercises of Pre-Funded Warrants						4,106,056						1						—						—						—						1
Transaction costs						—						—						(314)						—						—						(314)
Balance at March 31, 2026						81,409,340						8						3,040,171						(2,816,494)						44						223,729

See accompanying notes to condensed consolidated financial statements.

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VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited; in thousands)

									Three Months Ended March 31,
															2026						2025
Cash flows from operating activities:
Net loss															$	(64,715)					$	(84,487)
Stock-based compensation															4,121						4,769
Depreciation and amortization															3,916						4,223
Amortization of debt issuance costs															511						569
Accretion of marketable securities purchased at a discount															(406)						(2,193)
Other non-cash items															(11)						(14)
Change in operating assets and liabilities:
Other current and non-current assets															1,300						5,749
Accounts payable															840						(751)
Customer deposits															(581)						(2,296)
Other current and non-current liabilities															1,524						(1,487)
Net cash used in operating activities															(53,501)						(75,918)
Cash flows from investing activities:
Capital expenditures															(39,807)						(46,047)
Purchases of marketable securities															(33,516)						(104,607)
Proceeds from maturities and calls of marketable securities															101,099						158,121
Other investing activities															—						8
Net cash provided by investing activities															27,776						7,475
Cash flows from financing activities:
Payments of long-term debt															(4,967)						—
Payments of finance lease obligations															(59)						(46)
Proceeds from issuance of common stock pursuant to at-the-market offering															10,961						30,730
Transaction costs related to issuance of common stock pursuant to at-the-market offering															(301)						(922)
Transaction costs related to issuance of common stock and equity-classified warrants pursuant to registered offering															(145)						—
Withholding taxes paid on behalf of employees on net settled stock-based awards															(8)						(50)
Net cash provided by financing activities															5,481						29,712
Net decrease in cash, cash equivalents and restricted cash															(20,244)						(38,731)
Cash, cash equivalents and restricted cash at beginning of period															175,715						210,885
Cash, cash equivalents and restricted cash at end of period															$	155,471					$	172,154
Cash and cash equivalents															$	124,837					$	140,763
Restricted cash															30,634						31,391
Cash, cash equivalents and restricted cash															$	155,471					$	172,154

See accompanying notes to condensed consolidated financial statements.

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(1)    Description of Business and Basis of Presentation

Virgin Galactic Holdings, Inc., together with its consolidated subsidiaries (“Virgin Galactic” or the “Company”), is an aerospace and space travel company focused on the development, manufacture and operation of spaceships and related technologies. The Company provides access to space for private individuals, researchers and government agencies. The Company’s missions include flying passengers to space, as well as flying scientific payloads and researchers to space in order to conduct experiments for scientific and educational purposes.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Certain information and footnote disclosures, normally included in annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), have been condensed or omitted pursuant to such rules and regulations. However, in management’s opinion, the condensed consolidated financial statements reflect all adjustments, including those of a normal recurring nature, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods presented.

The operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the entire fiscal year. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no changes to the significant accounting policies presented in the audited consolidated financial statements contained in the Annual Report on Form 10-K that would have a material impact on the accompanying condensed consolidated financial statements.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

(2)    Liquidity and Financial Condition

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern and will be able to realize its assets and satisfy its liabilities in the normal course of business.

The Company is currently in the pre-commercial service phase and accordingly has no spaceflight revenue. The Company has recently used significant cash for operating activities and capital expenditures primarily related to the development of its next-generation spaceships and expects to continue to incur significant operating expenses and capital expenditures to complete the production of these spaceships and place them into commercial operation.

In preparation of the condensed consolidated financial statements, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from the date the condensed consolidated financial statements are issued, in accordance with the requirements of the Financial Accounting Standards Board's Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements - Going Concern (“ASC 205-40”).

Factors, among others, that are included in management’s evaluation are:

•cash, cash equivalents, and marketable securities on hand as of the date the condensed consolidated financial statements are issued;

•all company costs that are forecasted to be incurred over the upcoming twelve months from the date the condensed consolidated financial statements are issued, including costs expected to be incurred in completing fabrication and testing of the next-generation spaceships and costs expected to be incurred in the ramp-up to, and commercial operation of, spaceflights; and

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

•all contractual debt payments due within the next twelve months are assumed to be settled in cash.

Items that are planned or expected by management, but the execution of which may not be fully under management’s control, are not included in management’s evaluation in accordance with ASC 205-40. Factors, among others, excluded from management’s evaluation include:

•Revenues: any revenues or cash receipts, from spaceflights or otherwise, planned during the upcoming twelve months.

•Capital Market Transactions: any proceeds from capital market transactions, whether from debt issuance, equity issuance, or otherwise.

•Debt Repayment Terms: any change of contractual debt repayment schedules or settlement methods.

Management’s evaluation, which excluded the items that are not within its control (i.e., Revenues, Capital Market Transactions, and Debt Repayment Terms), resulted in the determination that the Company may not have sufficient cash and marketable securities to maintain its planned operations for the next twelve months following the issuance date of the condensed consolidated financial statements and has concluded that there are conditions present in the aggregate that raise substantial doubt about the Company’s ability to continue as a going concern pursuant to ASC 205-40.

Management’s plans that are intended to mitigate the conditions or events that raise substantial doubt include implementing some or all of the following initiatives:

•Commencing commercial service in the fourth quarter of 2026, as currently planned.

•Generating significant cash from the current backlog of future astronauts as their final payments become due in advance of their spaceflight.

•Offering the sale of a limited number of early spaceflights at a premium to historical prices.

•Increasing cash on hand through additional debt or equity financing, including use of the Company’s existing “at-the-market” equity offering program.

•Partnering with third parties to fund and accelerate the pace of future space vehicle development.

•Settling debt through the issuance of equity and/or extending maturities of certain debt payments that are due within the period.

The plans discussed above are subject to market conditions and, while management intends to apply its best efforts to the execution of these plans, they are not fully within the Company’s control and therefore cannot be deemed to be probable in accordance with ASC 205-40, and as a result, management has concluded that its plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern for twelve months after the date that the condensed consolidated financial statements are issued.

The accompanying condensed consolidated financial statements do not include any adjustments related to the carrying amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(3)    Cash, Cash Equivalents and Marketable Securities

The Company maintains certain cash balances restricted as to withdrawal or use. Restricted cash consists of cash deposits received from future astronauts that are contractually restricted for operational use until the condition of carriage is signed or the deposits are refunded.

The amortized cost, unrealized gain and estimated fair value of the Company’s cash, cash equivalents and marketable securities are as follows:

						March 31, 2026
						Amortized Cost						Gross Unrealized Loss						Fair Value
						(In thousands)
Cash and cash equivalents:
Cash and restricted cash						$	17,910					$	—					$	17,910
Money market						137,561						—						137,561
Marketable securities:
U.S. treasuries						59,610						(6)						59,604
Corporate bonds						35,472						(22)						35,450
						$	250,553					$	(28)					$	250,525

						December 31, 2025
						Amortized Cost						Gross Unrealized Gain						Fair Value
						(In thousands)
Cash and cash equivalents:
Cash and restricted cash						$	7,687					$	—					$	7,687
Money market						168,028						—						168,028
Marketable securities:
U.S. treasuries						9,884						14						9,898
Corporate bonds						152,372						43						152,415
						$	337,971					$	57					$	338,028

Interest receivable of $1.0 million and $2.0 million is included in other current assets in the accompanying condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025, respectively.

The Company recognizes amortization and accretion of purchase premiums and discounts on its marketable securities in interest income in the accompanying condensed consolidated statements of operations and comprehensive loss. The Company recognized $0.4 million and $2.2 million in accretion income for its marketable securities for the three months ended March 31, 2026 and 2025, respectively.

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(4)    Property, Plant and Equipment, Net

Property, plant and equipment consists of the following:

						March 31, 2026						December 31, 2025
			(In thousands)
Land						$	1,302					$	1,302
Buildings						10,111						10,111
Flight vehicles and rotables						5,177						4,331
Machinery and equipment						45,311						44,913
Information technology software and equipment						55,839						52,130
Leasehold improvements						78,118						77,853
Construction in progress						339,337						302,726
						535,195						493,366
Less: accumulated depreciation and amortization						108,482						104,636
						$	426,713					$	388,730

(5)    Leases

The components of expense related to leases are as follows:

												Three Months Ended March 31,
																		2026						2025
																		(In thousands)
Operating lease cost																		$	2,911					$	3,399
Variable lease cost																		693						707
Finance lease cost:
Amortization of assets under finance leases																		56						51
Interest on finance lease liabilities																		11						15
Total finance lease cost																		67						66
Total lease cost																		$	3,671					$	4,172

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

The components of supplemental cash flow information related to leases are as follows:

						Three Months Ended March 31,
						2026						2025
						(In thousands, except term and rate data)
Cash Flow Information:
Operating cash flows for operating leases						$	3,579					$	3,455
Operating cash flows for finance leases						$	11					$	15
Financing cash flows for finance leases						$	59					$	46
Non-cash Activity:
Assets acquired in exchange for lease obligations:
Operating leases						$	2					$	—
Finance leases						$	—					$	5
Other Information:
Weighted-average remaining lease term:
Operating leases (in years)						6.8						8.5
Finance leases (in years)						2.0						2.4
Weighted-average discount rates:
Operating leases						12.4		%				12.2		%
Finance leases						13.8		%				13.3		%

The supplemental balance sheet information related to leases is as follows:

						March 31, 2026						December 31, 2025
						(In thousands)
Operating Leases:
Long-term right-of-use assets						$	35,430					$	36,882
Short-term operating lease liabilities						$	8,726					$	8,475
Long-term operating lease liabilities						39,964						42,279
Total operating lease liabilities						$	48,690					$	50,754

Right-of-use assets are included in other non-current assets, and lease liabilities are included in other current liabilities and other long-term liabilities in the accompanying condensed consolidated balance sheets.

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(6)    Other Current Liabilities

The components of other current liabilities are as follows:

						March 31, 2026						December 31, 2025
						(In thousands)
Accrued compensation						$	33,969					$	31,951
Accrued manufacturing sub-contractor and contract labor costs						10,350						9,601
Other						26,259						26,243
						$	70,578					$	67,795

(7)    2025 Capital Realignment Transactions

In December 2025, the Company completed privately negotiated repurchase agreements (the “2027 Notes Repurchase Agreements”) with a limited number of holders of its 2.50% convertible senior notes due 2027 (“2027 Notes”), pursuant to which the Company repurchased $354.6 million in aggregate principal amount of its 2027 Notes (the “Repurchases”) with cash proceeds received from the Registered Offering (as defined below) and the Private Placement (as defined below).

Concurrently with the Repurchases, the Company completed the issuance and sale for cash in a registered direct offering, pursuant to separate, privately negotiated subscription agreements with certain investors, of (i) 2.2 million shares of its common stock, and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase 8.4 million shares of its common stock (collectively, the “Registered Offering”). In connection with the Registered Offering, the Company received cash proceeds of $45.6 million.

As of March 31, 2026, all Pre-Funded Warrants had been exercised and 8.4 million shares of common stock had been issued in connection with the exercise of the Pre-Funded Warrants.

Concurrently with the Registered Offering, the Company issued and sold for cash, in a private placement, (i) $212.5 million aggregate principal amount of a new series of its 9.80% First Lien Notes due 2028 (“2028 Notes”) and (ii) warrants to purchase 31.7 million shares of its common stock (the “Purchase Warrants”), with an exercise price equal to $6.696 per share. The Purchase Warrants are exercisable at any time on or after June 18, 2026 until December 18, 2030. The Purchase Warrants are exercisable only for cash and are subject to appropriate adjustment in the event of cash or share dividends, share splits, share repurchases, reorganizations or similar events affecting the Company’s common stock.

(8)    Long-Term Debt

A summary of the components of long-term debt is as follows:

																		March 31, 2026						December 31, 2025
																		( In thousands)
2028 Notes																		$	212,496					$	212,496
2027 Notes																		70,421						70,421
Total contractual debt outstanding																		282,917						282,917
Unamortized debt premium																		40,724						45,691
Unamortized debt issuance costs																		(3,905)						(4,416)
Long-term debt																		319,736						324,192
Less: current portion of long-term debt																		117,041						47,830
Non-current portion of long-term debt																		$	202,695					$	276,362

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

During the three months ended March 31, 2026 and 2025, the Company recognized $1.8 million and $3.2 million of interest expense related to long-term debt, respectively. Interest expense included $0.5 million and $0.6 million of amortized debt issuance costs during the three months ended March 31, 2026 and 2025, respectively.

During the three months ended March 31, 2026, the Company recognized $5.0 million of amortization of debt premium in connection with certain interest payments. This amount has been presented as a payment of long-term debt in the accompanying condensed consolidated statement of cash flows for the three months ended March 31, 2026.

2028 Notes

In connection with the Private Placement, the Company issued $212.5 million aggregate principal amount of the 2028 Notes. The 2028 Notes bear interest at a rate of 9.80% per year, payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year. The 2028 Notes mature on December 31, 2028, unless earlier redeemed or repurchased.

The Company is required to redeem $30.4 million of the 2028 Notes on or before September 30, 2026, and beginning on December 31, 2027 and at every calendar quarter end thereafter, the Company is required to redeem $10.1 million of the outstanding 2028 Notes. In addition, the Company is required to repurchase a portion of the 2028 Notes upon certain asset sales and capital raises. The Company may also redeem any or all of the 2028 Notes at par plus accrued and unpaid interest at any time. Any such mandatory or optional redemptions may be made using cash, or subject to certain conditions, shares of common stock or a combination thereof.

The 2028 Notes are secured on a first-priority basis by liens on substantially all of the assets of the Company and its domestic subsidiaries, subject to customary exceptions, including customer deposits, pursuant to a security agreement and related collateral documents.

2027 Notes

In January 2022, the Company completed an offering of $425 million aggregate principal amount of the 2027 Notes. The 2027 Notes are senior, unsecured obligations of the Company, and bear interest at a fixed rate of 2.50% per year. Interest is payable in cash semi-annually in arrears on February 1 and August 1 of each year. The 2027 Notes mature on February 1, 2027 unless earlier repurchased, redeemed or converted. Following the Repurchases, $70.4 million in aggregate principal amount of the 2027 Notes remained outstanding as of March 31, 2026.

(9)    Stockholders’ Equity

In November 2024, the Company entered into an open market sale agreement with Jefferies LLC (“Jefferies”) providing for the offer and sale of up to $300 million of shares of the Company’s common stock from time to time through Jefferies, acting as sales agent, or directly to Jefferies, acting as principal, through an “at-the-market offering” program (the “2024 ATM Program”).

During the three months ended March 31, 2026, the Company sold 4.0 million shares of common stock under the 2024 ATM Program and generated $11.0 million in gross proceeds, before deducting $0.3 million in commissions and other expenses.

As of March 31, 2026, the Company had sold a total of 41.6 million shares of common stock under the 2024 ATM Program, generating $161.7 million in gross proceeds since its inception, before deducting $4.7 million in commissions and other expenses.

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(10)    Stock-Based Compensation

Equity Incentive Plans

The Company maintains two equity incentive plans -- the Third Amended and Restated Virgin Galactic Holdings, Inc. 2019 Incentive Award Plan (the “Third A&R Plan”) and the Second Amended and Restated Virgin Galactic Holdings, Inc. 2023 Employment Inducement Incentive Award Plan (the “Second A&R Inducement Plan”).

The Second A&R Inducement Plan was adopted by the Company’s board of directors and became effective in March 2026. The Second A&R Inducement Plan increased the number of shares available by 555,000 shares to an aggregate of 1,695,000 shares reserved for issuance under the Second A&R Inducement Plan.

Pursuant to the Third A&R Plan and related predecessor plans, the Company has granted equity incentive awards, including time-based stock options, performance-based stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”). Pursuant to the Second A&R Inducement Plan and related predecessor plans, the Company has granted RSUs and PSUs.

Employee Stock Purchase Plan

The Virgin Galactic Holdings, Inc. 2025 Employee Stock Purchase Plan (the “ESPP”) was adopted by the Company’s board of directors in April 2025, subject to the approval of the Company’s stockholders, and became effective upon the approval of the Company’s stockholders in June 2025.

Stock-Based Compensation

A summary of stock-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss is as follows:

												Three Months Ended March 31,
																		2026						2025
																		(In thousands)
Spaceline operations																		$	958					$	435
Research and development																		121						402
Selling, general and administrative																		3,042						3,932
Total stock-based compensation expense																		4,121						4,769
Less: stock-based compensation expense for liability-classified awards																		193						(64)
Stock-based compensation expense for equity-classified awards																		$	3,928					$	4,833

As of March 31, 2026, the Company had unrecognized stock-based compensation expense of $32.6 million and $1.8 million for RSUs and PSUs, respectively, which are expected to be recognized over weighted-average periods of 1.8 years and 2.8 years, respectively.

(11)    Income Taxes

Income tax expense was $30,000 and $48,000 for the three months ended March 31, 2026 and 2025, respectively. The effective income tax rate was nil for each of the three months ended March 31, 2026 and 2025. The effective tax rate differs from the U.S. statutory rate primarily due to a full valuation allowance against net deferred tax assets where it is more likely than not that some or all of the deferred tax assets will not be realized.

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(12)    Earnings Per Share

The following table presents net loss per share and related information:

												Three Months Ended March 31,
																		2026						2025
																		(In thousands, except per share amounts)
Basic and diluted:
Net loss																		$	(64,715)					$	(84,487)
Weighted-average common shares outstanding																		79,482						35,440
Basic and diluted net loss per share																		$	(0.81)					$	(2.38)

Basic and diluted net loss per share is computed using the weighted-average number of shares of common stock outstanding during the period. The computation of diluted net loss per share excludes the effect of all potential common shares outstanding as their impact would have been anti-dilutive.

The Company has excluded stock-based awards and shares issuable upon conversion of the 2027 Notes from the diluted loss per share calculation because their effect was anti-dilutive. The total number of shares excluded for the three months ended March 31, 2026 and 2025 were 12.8 million and 7.0 million, respectively.

(13)    Fair Value Measurements

Assets and liabilities subject to fair value measurements are required to be disclosed within a fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair value. Accordingly, assets and liabilities carried at fair value are classified within the fair value hierarchy in one of the following categories:

• Level 1 inputs — Quoted prices in active markets for identical assets or liabilities.

• Level 2 inputs — Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

• Level 3 inputs — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability.

The following tables present the Company’s financial assets that are recorded at fair value on a recurring basis, segregated among the appropriate levels within the fair value hierarchy:

						March 31, 2026
						Level 1						Level 2						Level 3						Total
						(In thousands)
Assets:
Money market						$	137,561					$	—					$	—					$	137,561
U.S. treasuries						59,604						—						—						59,604
Corporate bonds						—						35,450						—						35,450
Total assets at fair value						$	197,165					$	35,450					$	—					$	232,615

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

						December 31, 2025
						Level 1						Level 2						Level 3						Total
						(In thousands)
Assets:
Money market						$	168,028					$	—					$	—					$	168,028
U.S. treasuries						9,898						—						—						9,898
Corporate bonds						—						152,415						—						152,415
Total assets at fair value						$	177,926					$	152,415					$	—					$	330,341

The following tables present the Company’s financial liabilities that are recorded at amortized cost, segregated among the appropriate levels within the fair value hierarchy:

						March 31, 2026
						Level 1						Level 2						Level 3						Total
						(In thousands)
Liabilities:
2028 Notes						$	—					$	170,687					$	—					$	170,687
2027 Notes						—						55,192						—						55,192
Total liabilities at fair value						$	—					$	225,879					$	—					$	225,879

						December 31, 2025
						Level 1						Level 2						Level 3						Total
						(In thousands)
Liabilities:
2028 Notes						$	—					$	173,184					$	—					$	173,184
2027 Notes						—						57,592						—						57,592
Total liabilities at fair value						$	—					$	230,776					$	—					$	230,776

The estimated fair values of the 2028 Notes and 2027 Notes, which are classified as Level 2 financial instruments, were determined based on the estimated or actual bid prices of the respective notes in an over-the-counter market on the last business day of the period, if available, or indicative pricing from market information.

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(14)    Commitments and Contingencies

Leases

Future minimum lease payments under noncancelable operating leases and future minimum finance lease payments as of March 31, 2026 are as follows:

						Operating Leases						Finance Leases
						(In thousands)
2026 (for the remaining period)						$	10,623					$	160
2027						13,951						115
2028						9,790						50
2029						7,265						15
2030						7,152						2
Thereafter						24,799						—
Total payments						73,580						342
Less: present value discount/imputed interest						24,890						43
Present value of lease liabilities						$	48,690					$	299

Legal Proceedings

From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. The Company applies accounting for contingencies to determine when and how much to accrue for and disclose related to legal and other contingencies. Accordingly, the Company discloses contingencies deemed to be reasonably possible and accrues loss contingencies when, in consultation with legal advisors, it is concluded that a loss is probable and reasonably estimable. Although the ultimate aggregate amount of monetary liability or financial impact with respect to these matters is subject to many uncertainties and is therefore not predictable with assurance, management believes that any monetary liability or financial impact to the Company from these matters, individually and in the aggregate, beyond that provided at March 31, 2026, would not be material to the Company’s consolidated financial position, results of operations or cash flows. However, there can be no assurance with respect to such result, and monetary liability or financial impact to the Company from legal proceedings, lawsuits and other claims could differ materially from those projected.

Lavin v. the Company

On May 28, 2021, a putative class action complaint was filed against the Company in the Eastern District of New York captioned Lavin v. Virgin Galactic Holdings, Inc., Case No. 1:21-cv-03070. In September 2021, the Court appointed Robert Scheele and Mark Kusnier as co-lead plaintiffs for the purported class. Co-lead plaintiffs amended the complaint in December 2021, asserting violations of Sections 10(b), 20(a) and 20A of the Exchange Act of 1934 against the Company and certain of its current and former officers and directors on behalf of a putative class of investors who purchased the Company’s common stock between July 10, 2019 and October 14, 2021.

The amended complaint alleged, among other things, that the Company and certain of its current and former officers and directors made false and misleading statements and failed to disclose certain information regarding the safety of the Company’s ships and success of its commercial flight program. Co-lead plaintiffs seek damages, interest, costs, expenses, attorneys’ fees, and other unspecified equitable relief. The defendants moved to dismiss the amended complaint and, on November 7, 2022, the Court granted in part and denied in part the defendants’ motion and gave the plaintiffs leave to file a further amended complaint.

Plaintiffs sought leave to file a second amended complaint on December 12, 2022, and subsequently filed that complaint on February 9, 2023. The second amended complaint contains many of the same allegations as in the first amended complaint. The defendants moved to dismiss the second amended complaint and, on August 8, 2023, the Court granted in part and denied in part the defendants’ motion and did not give plaintiffs leave to file a further

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

amended complaint. Plaintiffs moved for reconsideration of the Court’s dismissal order and, on December 19, 2023, the Court denied plaintiffs’ motion. On March 27, 2024, the defendants moved for judgment on the pleadings as to the remaining Section 10(b) insider trading claim alleged against Branson. On April 2, 2024, the Court stayed briefing on defendants’ motion for judgment on the pleadings pending resolution of plaintiffs’ anticipated motion for leave to add a new representative plaintiff, which plaintiffs’ subsequently filed on May 1, 2024. The Court granted plaintiffs’ motion on July 2, 2024. On July 8, 2024, defendants withdrew their motion for judgment on the pleadings.

On August 21, 2024, plaintiffs filed a third amended complaint in which Xinqiang Cui, Justin Carlough, Jennifer Ortiz, Richard O’Keefe-Jones, Vipul Gupta, Maria Josephine Rosales, and Hesham Ibrahim (previously named plaintiffs), were designated by plaintiffs as lead plaintiffs (in addition to Robert Scheele and Mark Kusnier), and an additional named plaintiff, Montgomery Brantley, was added. The third amended complaint contains substantively the same allegations as in the second amended complaint. On September 11, 2024, defendants filed an answer to plaintiffs’ third amended complaint.

On October 12, 2024, plaintiffs filed a motion to certify their proposed class. The defendants filed an opposition to plaintiffs’ motion on December 20, 2024, plaintiffs filed their reply on January 24, 2025, and defendants filed a sur-reply on March 21, 2025. On February 27, 2026, the Court entered an order denying the motion as moot in light of the parties’ settlement (see below).

On February 12, 2025, plaintiffs submitted a letter request to the Court seeking permission to file a motion for leave to file a Fourth Amended Complaint. On March 17, 2025, the Court granted plaintiffs’ request to file a motion for leave to amend, which plaintiffs did on March 26, 2025. Defendants filed their opposition on April 11, 2025, and plaintiffs filed their reply on April 23, 2025. On June 12, 2025, the Court issued an order allowing plaintiffs to file a fourth amended complaint. On June 26, 2025, plaintiffs filed their fourth amended complaint.

On July 18, 2025, plaintiffs and defendants (“Parties”) executed a Memorandum of Understanding (“MOU”) outlining the terms of a settlement to resolve all claims in the above-referenced action. In connection with the MOU, the Company recorded the expected net settlement of $2.25 million and included it in selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2025. Pursuant to the MOU, the Company agreed to pay $8.5 million, of which the Company expected $6.25 million to be covered and paid directly by the Company’s insurers pursuant to insurance policies. The Company accrued a liability for the gross settlement amount and also recorded a receivable for the portion of the settlement that was expected to be covered directly by insurance. On November 4, 2025, plaintiffs asked the Court to preliminarily approve the Parties’ settlement. On March 11, 2026, the Court entered an order granting preliminary approval of the settlement. On March 12, 2026, the Court set a hearing on final approval of the settlement for July 9, 2026. The Company made all payments related to the settlement in April 2026 and expects the Court to provide final approval of the settlement and judgment later in 2026.

Spiteri, Grenier, Laidlaw, St. Jean, and Gera derivatively on behalf of the Company vs. Certain Current and Former Officers and Directors

On February 21, 2022, March 1, 2022, September 21, 2022, December 13, 2022, and July 11, 2024, five alleged shareholders filed separate derivative complaints purportedly on behalf of the Company against certain of the Company’s current and former officers and directors in the Eastern District of New York captioned Spiteri v. Branson et al., Case No. 1:22-cv-00933 (“Spiteri Action”), Grenier v. Branson et al., Case No. 1:22-cv-01100 (“Grenier Action”), Laidlaw v. Branson et al., Case No. 1:22-cv-05634 (“Laidlaw Action”), St. Jean v. Branson et al., Case No. 1:22-cv-7551 (“St. Jean Action”), and Gera v. Branson et al., Case No. 1:24-cv-04795 (“Gera Action”), respectively. On May 4, 2022, the Spiteri and Grenier Actions were consolidated and recaptioned In re Virgin Galactic Holdings, Inc. Derivative Litigation, Case No. 1:22-cv-00933 (“Consolidated Derivative Action”). On September 30, 2023, the Laidlaw Action was consolidated into the Consolidated Derivative Action. On September 12, 2024, the Gera Action was consolidated into the Consolidated Derivative Action. Collectively, the complaints assert violations of Sections 10(b), 14(a), and 21D of the Exchange Act of 1934 and claims of breach of fiduciary duty, aiding and abetting breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets, contribution and indemnification, and unjust enrichment arising from substantially similar allegations as those contained in the securities class action

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

described above. The complaints seek an unspecified sum of damages, interest, restitution, expenses, attorneys’ fees and other equitable relief.

On March 20, 2026, the parties in the Consolidated Derivative Action and the St. Jean Action reached a settlement in principle to resolve both actions. On April 23, 2026, the Parties executed a stipulation of settlement, which, if approved, will resolve all claims pending in the Consolidated Derivative Action and the St. Jean Action, and will also release all claims that were or could have been asserted on behalf of the Company, derivatively, by plaintiffs or any of the Company’s stockholders that are related to or based upon any of the allegations in the Consolidated Derivative Action and the St. Jean Action.

The proposed settlement, if approved, will result in the adoption of certain corporate reforms and a monetary payment of $2.75 million by the Company’s insurers to the Company, half of which the Company will retain and the other half of which the Company shall pay to counsel for plaintiffs in the Consolidated Derivative Action and St. Jean Action, collectively, for their attorneys’ fees and costs. On April 23, 2026, Plaintiffs asked the Court to preliminarily approve the Parties’ settlement. The proposed settlement remains subject to approval by the Court.

Abughazaleh derivatively on behalf of the Company vs. Certain Current and Former Officers and Directors

On February 13, 2023, alleged shareholder Yousef Abughazaleh filed a derivative complaint purportedly on behalf of the Company against certain of the Company’s current and former officers and directors in the District of Delaware captioned Abughazaleh v. Branson et al., Case No. 23-156-MN (“Abughazaleh Action”). The complaint asserts violations of Section 14(a) of the Exchange Act of 1934 and SEC Rule 14a-9, and claims of breach of fiduciary duty, contribution and indemnification, and unjust enrichment arising from substantially similar allegations as those contained in the securities class action described above.

The complaint seeks an unspecified sum of damages, interest, restitution, expenses, attorneys’ fees and other equitable relief. The Abughazaleh Action is presently stayed.

Molnar and Tubbs derivatively on behalf of the Company vs. Certain Current and Former Officers and Directors

On April 9, 2024, alleged shareholders Crystal Molnar and Cleveland Tubbs filed a derivative complaint purportedly on behalf of the Company against certain of the Company’s current and former officers and directors in the Central District of California captioned Molnar v. Branson et al., Case No. 8:24-cv-775. The complaint asserts violations of Section 10(b) and 21D of the Exchange Act of 1934, and claims of breach of fiduciary duty and unjust enrichment arising from substantially similar allegations as those contained in the securities class action described above.

The complaint seeks an unspecified sum of damages, restitution, expenses, attorneys’ fees, and other equitable relief.

On July 11, 2025, the Court entered an order to show cause regarding dismissal for lack of prosecution. In response, on July 16, 2025, plaintiffs filed a joint stipulation of voluntary dismissal without prejudice indicating their intention to participate in the Espinosa action pending in Delaware Chancery Court. On July 17, 2025, the Court granted plaintiffs’ stipulation and entered an order of dismissal.

Espinosa derivatively on behalf of the Company vs. Certain Current and Former Officers and Directors

On September 3, 2024, alleged shareholder Kimberly Espinosa filed a derivative complaint purportedly on behalf of the Company against certain of the Company’s current and former officers and directors (the “Individual Defendants”) in the Delaware Court of Chancery captioned Espinosa v. Branson et al., Case No. 2024-0895-JTL. The complaint asserts claims of breach of fiduciary duty and unjust enrichment arising from substantially similar allegations as those contained in the securities class action described above.

The complaint seeks an unspecified sum of damages, interest, restitution, expenses, attorneys’ fees and other equitable relief. On August 12, 2025, the Court granted plaintiff Crystal Molnar’s unopposed motion to intervene in the Espinosa action. On August 14, 2025, the Company and the Individual Defendants filed a motion to dismiss the complaint. In response to the motion to dismiss, plaintiffs Espinosa and Molnar communicated their intent to file an

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

amended complaint. Per Court order adopting the parties’ stipulation, plaintiffs filed an amended complaint on October 29, 2025. On December 23, 2025, the Company and the Individual Defendants filed a motion to dismiss the amended complaint.

On February 3, 2026, in light of settlement discussions in the Consolidated Derivative and St. Jean Actions, the parties filed a stipulation seeking to stay the Espinosa Action, including remaining briefing on the Company’s and the Individual Defendants’ motion to dismiss the amended complaint, for 120 days following the Court’s entry of the stay. The Court entered the stipulated stay on February 4, 2026. On April 7, 2026, the parties filed a joint status report notifying the Court of the settlement in principle in the Consolidated Derivative and St. Jean Actions, and requested a continued stay of the Espinosa action pending settlement proceedings in the Consolidated Derivative and St. Jean Actions.

(15)    Related Party Transactions

The Company licenses its brand name from certain entities affiliated with Virgin Enterprises Limited (“VEL”), a company incorporated in England. VEL is an affiliate of the Company. Under the trademark license, the Company has the exclusive right to operate under the brand name “Virgin Galactic” worldwide. Royalties payable, excluding sponsorship royalties, are the greater of (a) a low single-digit percentage of gross sales and (b) (i) prior to the first spaceflight for paying astronauts, a mid-five figure amount in dollars and (ii) from the first spaceflight for paying astronauts, a low-six figure amount in dollars, which increases to a low-seven figure amount in dollars over a four-year ramp up and thereafter increases in correlation with the consumer price index. Royalties payable on sponsorships are based on a mid-double-digit percentage of the related gross sales. During the three months ended March 31, 2026 and 2025, the Company incurred royalty expenses of $0.8 million and $0.5 million, respectively.

(16)    Supplemental Cash Flow Information

						Three Months Ended March 31,
						2026						2025
						(In thousands)
Supplemental disclosure of cash flow information:
Cash payments for:
Income taxes						$	79					$	—
Interest						1,872						—
Supplemental disclosure of non-cash investing and financing activities:
Unpaid purchases of property, plant and equipment						$	10,380					$	9,276
Issuance of common stock through RSUs vested						19						173

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(17)     Subsequent Events

On April 30, 2026, the Company issued a notice of redemption to redeem up to $10 million of the 2028 Notes, plus accrued and unpaid interest thereon, on May 18, 2026. Pursuant to the indenture governing the 2028 Notes (as amended by the supplemental indenture), the redemption price will be paid by the Company by issuing shares of its common stock to the holders of the 2028 Notes. The amount of 2028 Notes redeemed and the number of shares issued will be determined based on the volume-weighted average price of the Company’s common stock over the ten-day observation period, as specified in the indenture. In the event the volume-weighted average price of the Company’s common stock on any day during the ten-day observation period is less than the floor price set forth in the indenture, the Company has elected to not redeem the related amount of 2028 Notes.

During April 2026, the Company sold 18.1 million shares of common stock under the 2024 ATM Program and generated $51.6 million in gross proceeds, before deducting $1.4 million in commissions and other expenses.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context otherwise requires, all references in this section to the “Company,” “Virgin Galactic,” “we,” “us,” or “our” refer to Virgin Galactic Holdings, Inc. and its subsidiaries.

You should read the following discussion and analysis of our financial condition and results of operations together with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as the audited financial statements and the related notes thereto, and the discussion under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Annual Report on Form 10-K”). This discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks and uncertainties. As a result of many factors, such as those set forth under the “Risk Factors” sections of our Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 and under the “Cautionary Note Regarding Forward-Looking Statements” section and elsewhere in this Quarterly Report on Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements.

Overview

We are an aerospace and space travel company offering access to space for private individuals, researchers and government agencies. Our missions include flying passengers to space, as well as flying scientific payloads and researchers to space in order to conduct experiments for scientific and educational purposes. Our operations include the design and development, manufacturing, ground and flight testing, spaceflight operation and post-flight maintenance of our spaceflight system. Our spaceflight system was developed using our proprietary technology and processes and is focused on providing space travel experiences for private astronauts, researcher flights and professional astronaut training. We have also leveraged our knowledge and expertise in manufacturing spaceships to occasionally perform engineering services for third parties. To expand capacity, we are currently developing our next-generation spaceflight vehicles. These spaceflight vehicles, which include our next-generation spaceships and launch vehicles, are expected to dramatically increase our annual flight rate. Following the completion of the non-recurring engineering work on our next-generation spaceships, we have redeployed engineering resources to the next phase of design for our next-generation launch vehicle. In addition, we are exploring the opportunity to use a derivative model of our launch vehicle as a High-Altitude, Long-Endurance (“HALE”) aircraft, which we believe could be utilized for several types of government and research purposes.

Recent Developments

We are continuing the production of our next-generation spaceships and are progressing through our build milestones. We currently expect our flight test program to commence in the third quarter of 2026 in advance of restarting commercial service, which is expected to begin in the fourth quarter of 2026 with a research flight. We currently expect private astronaut spaceflights to commence six to eight weeks after our first commercial spaceflight.

On April 23, 2026, the parties executed a stipulation of settlement to resolve the derivative matters captioned In re Virgin Galactic Holdings, Inc. Derivative Litigation (“Consolidated Derivative Action”) and St. Jean v. Branson et al. (“St. Jean Action”) that are pending against the Company. The settlement, if approved, will resolve all claims pending in the Consolidated Derivative Action and the St. Jean Action, and will also release all claims that were or could have been asserted on behalf of the Company, derivatively, by plaintiffs or any of the Company’s stockholders that are related to or based upon any of the allegations in the Consolidated Derivative Action and the St. Jean Action. If the settlement is approved by the court, it will result in the adoption of certain corporate reforms and a monetary payment of $2.75 million by the Company’s insurers to the Company, half of which the Company will retain. See Note 14 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

Factors Affecting Our Performance

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in Part I, Item 1A. of our Annual Report on Form 10-K titled “Risk Factors.”

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Customer Demand

As of March 31, 2026, we have reservations for spaceflights for approximately 650 future astronauts, which represent approximately $186 million in expected future spaceflight revenue upon completion of the spaceflights. We have recently opened ticket sales for a limited tranche of 50 spaceflight reservations at a higher price of $750,000 per seat.

Available Capacity and Annual Flight Rate

In 2023, we commenced our commercial operations with VSS Unity and VMS Eve, which together comprised our initial commercial spaceflight system. Our annual flight rate was constrained by the availability and capacity of this commercial spaceflight system. To expand capacity, we developed and are assembling our next-generation spaceships. These spaceships are expected to dramatically increase our annual flight rate. With our first two next-generation spaceships, we expect to ramp to a targeted rate of 125 commercial space missions per year.

Safety Performance of Our Spaceflight Systems

Our spaceflight systems are highly specialized with sophisticated and complex technology. We have built operational processes to ensure that the design, manufacture, performance and service of our spaceflight systems meet rigorous quality standards. However, our spaceflight systems are still subject to operational and process risks, such as manufacturing and design issues, human errors, or cyber-attacks. Any actual or perceived safety issues may result in significant reputational harm to our business and our ability to generate spaceflight revenue.

Results of Operations

The following tables set forth our results of operations for the periods presented. The period-to-period comparisons of financial results are not necessarily indicative of future results.

												Three Months Ended March 31,
																		2026						2025
																		(In thousands)
Revenue																		$	227					$	461
Operating expenses:
Spaceline operations																		29,640						20,826
Research and development																		6,712						33,310
Selling, general and administrative																		25,551						30,550
Depreciation and amortization																		3,916						4,223
Total operating expenses																		65,819						88,909
Operating loss																		(65,592)						(88,448)
Interest income																		2,701						7,215
Interest expense																		(1,828)						(3,240)
Other income, net																		34						34
Loss before income taxes																		(64,685)						(84,439)
Income tax expense																		30						48
Net loss																		$	(64,715)					$	(84,487)

For the Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

Revenue

Revenue for the three months ended March 31, 2026 and 2025 was primarily attributable to access fees related to our astronaut community.

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Spaceline Operations

																								Three Months Ended March 31,												$ Change						% Change
																								2026						2025
																														(In thousands, except %)
Spaceline operations																														$	29,640					$	20,826					$	8,814					42		%

Spaceline operations expense includes costs to maintain and operate our spaceflight system; non-capitalizable costs to build our new vehicles and manufacture items required to support the making of our vehicles, such as rocket motors and spare parts; the consumption of rocket motors, fuel and other consumables; costs to maintain and support our astronaut community; and costs to provide payload cargo and engineering services.

Spaceline operations expense increased from $20.8 million for the three months ended March 31, 2025 to $29.6 million for the three months ended March 31, 2026. The increase is attributable to the completion of the development phase of our next-generation spaceflight vehicles and moving primarily into manufacturing and testing operations, which resulted in a $6.9 million increase in cash compensation and other employee benefit costs and a $1.7 million increase in materials, sub-contractor and contract labor costs.

Research and Development

																								Three Months Ended March 31,												$ Change						% Change
																								2026						2025
																														(In thousands, except %)
Research and development																														$	6,712					$	33,310					$	(26,598)					(80)		%

Research and development expenses represent costs incurred to support activities that advance our future fleet towards commercialization, including basic research, applied research, concept formulation studies, design, development, and related testing activities. Research and development costs consist primarily of equipment, material, and labor costs (including from third-party contractors) for designing the spaceflight system’s structure, spaceflight propulsion system, and flight profiles for our next-generation spaceships and launch vehicles, as well as allocated facilities and other supporting overhead costs.

Research and development expenses decreased from $33.3 million for the three months ended March 31, 2025 to $6.7 million for the three months ended March 31, 2026. The decrease is attributable to the completion of the development phase of our next-generation spaceflight vehicles, which resulted in a $23.3 million decrease in materials, sub-contractor and contract labor costs and a $2.8 million decrease in cash compensation and other employee benefit costs.

Selling, General and Administrative

																								Three Months Ended March 31,												$ Change						% Change
																								2026						2025
																														(In thousands, except %)
Selling, general and administrative																														$	25,551					$	30,550					$	(4,999)					(16)		%

Selling, general and administrative expenses consist primarily of compensation and other employee benefit costs for employees involved in general corporate functions, including executive management and administration, accounting, finance, legal, information technology, sales and marketing, and human resources. Non-compensation components of selling, general and administrative expenses include accounting, legal and other professional fees, facilities expenses, and other corporate expenses.

Selling, general and administrative expenses decreased from $30.6 million for the three months ended March 31, 2025 to $25.6 million for the three months ended March 31, 2026. The decrease was primarily driven by a $3.3 million decrease in cash compensation and other employee benefit costs and a $1.4 million decrease in professional fees.

Depreciation and Amortization

Depreciation and amortization expense decreased from $4.2 million for the three months ended March 31, 2025 to $3.9 million for the three months ended March 31, 2026. The decrease was primarily due to older assets becoming fully depreciated.

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Interest Income

Interest income decreased from $7.2 million for the three months ended March 31, 2025 to $2.7 million for the three months ended March 31, 2026. This decrease was primarily driven by decreased average balances of marketable securities and deposits in interest-bearing accounts.

Interest Expense

Interest expense was $1.8 million and $3.2 million for the three months ended March 31, 2026 and 2025, respectively. Interest expense primarily consists of interest expense and amortization of debt issuance costs related to our 2.50% convertible senior notes due 2027 (“2027 Notes”) and 9.80% First Lien Notes due 2028 (“2028 Notes”).

Income Tax Expense

Income tax expense was immaterial for the three months ended March 31, 2026 and 2025. We have accumulated net operating losses at the U.S. federal and state levels. We maintain a full valuation allowance against our net U.S. federal and state deferred tax assets. The income tax expense is primarily related to corporate income taxes for our operations in the United Kingdom, which operates on a cost-plus arrangement.

Liquidity and Capital Resources

As of March 31, 2026, we had cash, cash equivalents and restricted cash of $155.5 million and marketable securities of $95.1 million. Our principal sources of liquidity have come from sales of our common stock and offering of our 2027 Notes.

Historical Cash Flows

						Three Months Ended March 31,
						2026						2025
						(In thousands)
Net cash provided by (used in):
Operating activities						$	(53,501)					$	(75,918)
Investing activities						27,776						7,475
Financing activities						5,481						29,712
Net decrease in cash, cash equivalents and restricted cash						$	(20,244)					$	(38,731)

Operating Activities

Net cash used in operating activities was $53.5 million for the three months ended March 31, 2026, and consisted primarily of $64.7 million of net losses, adjusted for non-cash items, which primarily included stock-based compensation expense of $4.1 million and depreciation and amortization expense of $3.9 million, partially offset by $3.1 million of net changes in operating assets and liabilities.

Net cash used in operating activities was $75.9 million for the three months ended March 31, 2025, and consisted primarily of $84.5 million of net losses, adjusted for non-cash items, which primarily included stock-based compensation expense of $4.8 million and depreciation and amortization expense of $4.2 million, partially offset by $2.2 million of accretion of marketable securities purchased at a discount and $1.2 million of net changes in operating assets and liabilities.

Investing Activities

Net cash provided by investing activities was $27.8 million for the three months ended March 31, 2026, and consisted primarily of $101.1 million in proceeds from maturities and calls of marketable securities, partially offset by $39.8 million in capital expenditures and $33.5 million in purchases of marketable securities.

Net cash provided by investing activities was $7.5 million for the three months ended March 31, 2025, and consisted primarily of $158.1 million in proceeds from maturities and calls of marketable securities, partially offset by $104.6 million in purchases of marketable securities and $46.0 million in capital expenditures.

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Financing Activities

Net cash provided by financing activities was $5.5 million for the three months ended March 31, 2026, and consisted primarily of $10.7 million in net cash proceeds from the sale and issuance of common stock pursuant to our at-the-market offering program, partially offset by $5.0 million of payments of long-term debt.

Net cash provided by financing activities was $29.7 million for the three months ended March 31, 2025, and consisted primarily of net cash proceeds from the sale and issuance of common stock pursuant to our at-the-market offering program.

Issuances of Common Stock

In November 2024, we entered into an open market sale agreement with Jefferies LLC (“Jefferies”) providing for the offer and sale of up to $300 million of shares of our common stock from time to time through Jefferies, acting as sales agent, or directly to Jefferies, acting as principal, through an “at-the-market offering” program (the “2024 ATM Program”).

During the three months ended March 31, 2026, we sold 4.0 million shares of common stock under the 2024 ATM Program and generated $11.0 million in gross proceeds, before deducting $0.3 million in commissions and other expenses.

As of March 31, 2026, we had sold a total of 41.6 million shares of common stock under the 2024 ATM Program, generating $161.7 million in gross proceeds since its inception, before deducting $4.7 million in commissions and other expenses.

During April 2026, we sold 18.1 million shares of common stock under the 2024 ATM Program and generated $51.6 million in gross proceeds, before deducting $1.4 million in commissions and other expenses.

2025 Capital Realignment Transactions

In December 2025, we completed privately negotiated repurchase agreements (the “2027 Notes Repurchase Agreements”) with a limited number of holders of our 2027 Notes, pursuant to which we repurchased $354.6 million in aggregate principal amount of our 2027 Notes (the “Repurchases”) with cash proceeds received from the Registered Offering (as defined below) and the Private Placement (as defined below).

Concurrently with the Repurchases, we completed the issuance and sale for cash in a registered direct offering, pursuant to separate, privately negotiated subscription agreements with certain investors, of (i) 2.2 million shares of our common stock, and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase 8.4 million shares of our common stock (collectively, the “Registered Offering”). In connection with the Registered Offering, we received cash proceeds of $45.6 million.

As of March 31, 2026, all Pre-Funded Warrants had been exercised and 8.4 million shares of common stock had been issued in connection with the exercise of the Pre-Funded Warrants.

Concurrently with the Registered Offering, we issued and sold for cash, in a private placement, (i) $212.5 million aggregate principal amount of our 2028 Notes and (ii) warrants to purchase 31.7 million shares of our common stock (the “Purchase Warrants”), with an exercise price equal to $6.696 per share. The Purchase Warrants are exercisable at any time on or after June 18, 2026 until December 18, 2030. The Purchase Warrants are exercisable only for cash and are subject to appropriate adjustment in the event of cash or share dividends, share splits, share repurchases, reorganizations or similar events affecting our common stock.

Liquidity Outlook

For at least the next twelve months, we expect our principal demand for funds will be for our ongoing operating activities described below and the repayment of (i) $30.4 million of contractual principal payments related to our 2028 Notes and (ii) $70.4 million of contractual principal payments related to our 2027 Notes. Beyond the next twelve months, our principal demand for funds will be to sustain our operations, operate our spaceline at Spaceport America in New Mexico, expand our fleet of spaceships, launch vehicles and supporting facilities, and repay outstanding debt.

We are currently in the pre-commercial service phase and accordingly have no spaceflight revenue. We expect to generate revenue from our spaceflight program once commercial service begins. We currently expect the flight test program of our next-generation spaceships to commence in the third quarter of 2026, followed by our first commercial spaceflight which is expected to occur in the fourth quarter of 2026. Before recognizing revenue for commercial spaceflights, we expect to receive cash payments in connection with spaceflights after we deliver the conditions of carriage to customers and receive customer executed informed consents.

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We have recently used significant cash for operating activities and capital expenditures primarily related to the development of our next-generation spaceships and expect to continue to incur significant operating expenses and capital expenditures to complete the production of these spaceships and place them into commercial operation. We expect our future expenditures to continue to decrease in connection with our ongoing activities in the near term, particularly since we have completed investments in tooling to produce our spaceships and expect to complete the assembly of our initial next-generation spaceship ahead of its flight test program, which is expected to commence in the third quarter of 2026. As we move into commercial operations with our first commercial spaceflight expected in the fourth quarter of 2026, we expect increases in cash receipts and expenditures as we ramp and operate our spaceline commercial business.

Our plans to fund our operations for the next twelve months include implementing some or all of the following initiatives:

•Commencing commercial service in the fourth quarter of 2026, as currently planned.

•Generating significant cash from the current backlog of future astronauts as their final payments become due in advance of their spaceflight.

•Offering the sale of a limited number of early spaceflights at a premium to historical prices.

•Increasing cash on hand through additional debt or equity financing, including use of our existing “at-the-market” equity offering program.

•Partnering with third parties to fund and accelerate the pace of future space vehicle development.

•Settling debt through the issuance of equity and/or extending maturities of certain debt payments that are due within the period.

The plans discussed above are subject to market conditions and, while we intend to apply our best efforts to the execution of these plans, they are not fully within our control. As a result, it is uncertain whether we will have sufficient cash and marketable securities to maintain our planned operations for the next twelve months following the issuance date of the condensed consolidated financial statements and we have concluded that there are conditions present in the aggregate that raise substantial doubt about our ability to continue as a going concern.

There are significant risks and uncertainties associated with our planned operations and there is no assurance that our future plans will be successful or, if successful, will be sufficient to fully fund our planned operations. For more information regarding our risks and uncertainties, see Part I, Item 1A. of our Annual Report on Form 10-K titled “Risk Factors.”

On April 30, 2026, we issued a notice of redemption to redeem up to $10 million of the 2028 Notes, plus accrued and unpaid interest thereon, on May 18, 2026. Pursuant to the indenture governing the 2028 Notes (as amended by the supplemental indenture), the redemption price will be paid by issuing shares of our common stock to the holders of the 2028 Notes. The amount of 2028 Notes redeemed and the number of shares issued will be determined based on the volume-weighted average price of our common stock over the ten-day observation period, as specified in the indenture. In the event the volume-weighted average price of our common stock on any day during the ten-day observation period is less than the floor price as set forth in the indenture, we have elected to not redeem the related amount of 2028 Notes.

Contractual Obligations and Commitments

Except as set forth in the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there have been no material changes outside the ordinary course of business to our contractual obligations and commitments as described in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K.

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Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. We believe that the estimates, assumptions and judgments involved in the accounting policies referred to below have the greatest potential impact on our condensed consolidated financial statements and, therefore, we consider these to be our critical accounting policies. Accordingly, we evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions.

During the fiscal quarter ended March 31, 2026, there were no significant changes to our critical accounting policies and estimates compared to those previously disclosed in “Critical Accounting Policies and Estimates” included in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Annual Report on Form 10-K.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable for smaller reporting companies.

Item 4. Controls and Procedures

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of March 31, 2026, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are from time to time subject to various claims, lawsuits and other legal and administrative proceedings arising in the ordinary course of business. Some of these claims, lawsuits and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, non-monetary sanctions or relief. However, we do not consider any such claims, lawsuits or proceedings that are currently pending, individually or in the aggregate, to be material to our business or likely to result in a material adverse effect on our future operating results, financial condition or cash flows. See Note 14 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

Item 1A. Risk Factors

Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described as risk factors, any one or more of which could, directly or indirectly, cause our actual operating results and financial condition to vary materially from past, or anticipated future, operating results and financial condition. For a discussion of our potential risks and uncertainties, see the risk factors previously disclosed in Part I, Item 1. “Business,” Part I, Item 1A. “Risk Factors,” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K and in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q. There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

10b5-1 Trading Plans

During the three months ended March 31, 2026, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non Rule 10b5-1 trading arrangement.”

Item 6. Exhibits

The following documents are filed as part of this report:

(1) Exhibits. The following exhibits are filed, furnished or incorporated by reference as part of this Quarterly Report on Form 10-Q.

Incorporated by Reference

Exhibit No.

Exhibit Description

Form

File No.

Exhibit

Filing Date

Filed/Furnished Herewith

3.1

Certificate of Incorporation of the Registrant

8-K

001-38202

3.1

10/29/2019

3.1(a)

Certificate of Amendment to Certificate of Incorporation of the Registrant

8-K

001-38202

3.1

06/14/2024

3.2

Amended and Restated By-Laws of Virgin Galactic Holdings, Inc. (effective as of August 28, 2025).

8-K

001-38202

3.1

08/29/2025

10.1+

Second Amended and Restated 2023 Employment Inducement Incentive Award Plan

10-K

001-38202

10.3

03/30/2026

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Incorporated by Reference

Exhibit No.

Exhibit Description

Form

File No.

Exhibit

Filing Date

Filed/Furnished Herewith

10.2+

Form of Executive Restricted Stock Unit Agreement under the Second Amended and Restated 2023 Employment Inducement Incentive Award Plan

10-K

001-38202

10.3(c)

03/30/2026

10.3+

Form of Non-Executive Restricted Stock Unit Agreement under the Second Amended and Restated 2023 Employment Inducement Incentive Award Plan

10-K

001-38202

10.3(d)

03/30/2026

10.4+

Form of Executive Performance-Vesting Restricted Stock Unit Agreement under the Second Amended and Restated 2023 Employment Inducement Incentive Award Plan

10-K

001-38202

10.3(e)

03/30/2026

10.5+

Form of Non-Executive Performance-Vesting Restricted Stock Unit Agreement under the Second Amended and Restated 2023 Employment Inducement Incentive Award Plan

10-K

001-38202

10.3(f)

03/30/2026

10.6+

Amendment to Employment Agreement, dated as of April 21, 2026, by and among Virgin Galactic Holdings, Inc., Galactic Co., LLC and Douglas Ahrens.

8-K

001-38202

10.1

04/21/2026

10.7+

Amendment to Employment Agreement, dated as of April 21, 2026, by and among Virgin Galactic Holdings, Inc., Galactic Co., LLC and Aparna Chitale.

8-K

001-38202

10.2

04/21/2026

31.1

Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*

31.2

Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*

32.1

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

**

32.2

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

**

101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

*

101.SCH

Inline XBRL Taxonomy Extension Schema Document

*

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

*

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

*

101.LAB

Inline XBRL Taxonomy Extension Labels Linkbase Document

*

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

*

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*

* Filed herewith.

** Furnished herewith.

+ Indicates management contract or compensatory plan.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			Virgin Galactic Holdings, Inc.
Date: May 14, 2026						/s/ Michael Colglazier
			Name:			Michael Colglazier
			Title:			Chief Executive Officer (Principal Executive Officer)
Date: May 14, 2026						/s/ Douglas Ahrens
			Name:			Douglas Ahrens
			Title:			Chief Financial Officer (Principal Financial and Accounting Officer)

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FAQ

How did Virgin Galactic (SPCE) perform financially in the first quarter of 2026?

Virgin Galactic reported a net loss of $64.7 million on revenue of $227,000 for the quarter ended March 31, 2026. The loss narrowed from $84.5 million a year earlier, mainly because research and development expenses declined as next-generation vehicles progressed beyond early development.

What is Virgin Galactic’s cash and liquidity position as of March 31, 2026?

As of March 31, 2026, Virgin Galactic held $155.5 million in cash, cash equivalents and restricted cash, plus $95.1 million in marketable securities. Operating activities used $53.5 million of cash during the quarter, and the company also faces scheduled principal payments on its 2027 and 2028 notes.

Why did Virgin Galactic disclose substantial doubt about its ability to continue as a going concern?

Management concluded there is substantial doubt about Virgin Galactic’s ability to continue as a going concern for 12 months. After excluding uncertain items like future revenues and capital market transactions, projected cash and marketable securities may not cover planned operating costs and required debt payments under accounting guidance.

When does Virgin Galactic expect to start commercial flights of its next-generation spaceships?

Virgin Galactic expects flight testing of its next-generation spaceships to begin in the third quarter of 2026, with commercial service restarting in the fourth quarter of 2026. The first flight is expected to be a research mission, followed six to eight weeks later by private astronaut spaceflights.

How many customer reservations does Virgin Galactic have and what revenue could they generate?

As of March 31, 2026, Virgin Galactic had reservations for spaceflights from approximately 650 future astronauts. These reservations represent about $186 million in expected future spaceflight revenue once flights are completed, providing a potential revenue backlog as commercial operations resume.

What recent financing actions has Virgin Galactic (SPCE) taken to bolster liquidity?

In the first quarter of 2026, Virgin Galactic raised $11.0 million in gross proceeds by selling 4.0 million shares through its 2024 at-the-market program. In April 2026, it sold an additional 18.1 million shares for $51.6 million and issued a notice to redeem up to $10 million of 2028 notes in stock.

What are Virgin Galactic’s key debt obligations as of early 2026?

Virgin Galactic has $212.5 million of 9.80% First Lien Notes due 2028 and $70.4 million of 2.50% convertible senior notes due 2027 outstanding. The company must redeem $30.4 million of 2028 notes by September 30, 2026 and repay $70.4 million of 2027 notes at maturity.