Virgin Galactic Holdings, Inc. Q3 FY2025 earnings call

• SpaceShip Program Progress: Wing subassembly fitment ongoing, feather subassembly parts delivered, fuselage critical path with oxidizer tank qualification (qualified for 500+ flights), forward fuselage lower skin received. Remaining parts expected in December. - Commercial Readiness: Pivot to commercial operations, hiring Chief Growth Officer, preparing customer operations, rebuilding digital presence, planning Q1 2026 sales tranche. - Avionics and Launch Vehicle Eve: Avionics team with potential commercial opportunities, Eve upgraded to fly successive days, ramping to 3-4 flights per week, supporting 125 space missions per year with first 2 SpaceShips. - Production Progress: Outstanding items on production checklist decreasing, ~90% of first SpaceShip parts expected in hand by mid-December.

In the third quarter, revenue was approximately $400,000 attributable to future astronaut access fees. Total operating expenses decreased 19% to $67 million compared to the prior year period. Net loss improved by 15% to $64 million. Adjusted EBITDA improved by 11% to negative $53 million. Free cash flow was negative $108 million. The balance sheet ended the quarter with $424 million in cash, cash equivalents, and marketable securities, and property, plant, and equipment (PP&E) was $350 million, up 67% from the prior year.

• Fourth quarter 2025 revenue expected ~$300,000 from astronaut access fees. - Forecasted free cash flow for Q4 2025 in range of negative $90M to $100M. - Cash spending to continue decreasing through Q3 2026, then rise with commercial service start in Q4 2026. - Economic model: Initial 2 SpaceShips expected $450M annual revenue at high margins, $100M adjusted EBITDA; expanded fleet to $1B annual revenue, $500M adjusted EBITDA.

• Potential variability in delivery of remaining fuselage parts. - Weather impacting flight cadence. - Uncertainties in meeting flight test and commercial launch timelines due to remaining production items.

Q: Greg Konrad asked about sales tranche size and flight price.

A: Michael Colglazier said price likely higher than $600,000, sales in tranches with stair-stepping prices.

Q: Oliver Chen asked about flight test risks, oxidizer tank impact, and avionics.

A: Michael Colglazier discussed remaining fuselage parts, oxidizer tank's reusability benefit, and avionics team's commercial potential.

Q: Michael Leshock asked about weather limiting flight cadence.

A: Michael Colglazier noted Southern New Mexico is sunny 85% of the year, with flexibility in flight times, and weather is factored into projections.

Q: Louis Raffetto asked about cash flow positivity.

A: Douglas Ahrens said cash flow positivity will depend on flight rate and ticket pricing, expected within 2-3 months of commercial service start.