Virgin Galactic Net Loss Increases to $63 Million in Q2

WhiteKnightTwo and SpaceShipTwo fly right overhead. (Credit: Kenneth Brown)

MOJAVE, Calif., August 3, 2020 (Virgin Galactic PR) — Virgin Galactic Holdings, Inc. (NYSE: SPCE) (“Virgin Galactic” or “the Company”), a vertically integrated aerospace and space travel company, today announced its financial results for the second quarter ended June 30, 2020.

Second Quarter 2020 Financial Highlights:

  • Cash position remains strong, with cash and cash equivalents of $360 million as of June 30, 2020.
  • Net loss of $63 million, compared to a $60 million net loss in first quarter of 2020.
  • GAAP selling, general, and administrative expenses of $26 million, compared to $27 million in first quarter of 2020. Non-GAAP selling, general and administrative expenses of $23 million in the second quarter of 2020, compared to $23 million in the first quarter of 2020.
  • GAAP research and development expenses of $37 million, compared to $34 million in first quarter of 2020. Non-GAAP research and development expenses of $35 million in second quarter of 2020, compared to $33 million in the first quarter of 2020.
  • Adjusted EBITDA totalled $(54) million, compared to $(53) million in first quarter of 2020.
  • Cash paid for capital expenditures totalled $6 million, compared to $4 million in first quarter of 2020.

“During the second quarter we continued to advance our test flight program, including conducting two successful glide flights from Spaceport America,” said George Whitesides, Chief Space Officer of Virgin Galactic. “We saw continued growth in customer demand, with increases in paid enrollments for our ‘One Small Step’ program, and entered into deposit agreements for orbital spaceflights with twelve customers. During the period, our operations were impacted by the COVID-19 pandemic, despite our efforts to minimize disruption. However, our preparations for commercial service are well underway under the leadership of our new CEO, Michael Colglazier. Going forward, I am excited to focus my efforts and expertise on important future business areas, including high speed travel, in my new role as Chief Space Officer. We believe that these new technologies represent the future of aviation and we look forward to working with respected parties like NASA, Boeing and Rolls Royce to explore how we can revolutionize the way we travel.”

Michael Colglazier, Chief Executive Officer, added: “I am thrilled to be leading Virgin Galactic at this exciting time. We are making substantial progress across many areas of the company as we continue to focus on our path to commercial launch and the steps we are taking to get there, including conducting our first powered spaceflight from Spaceport America this fall.”

Second Quarter 2020 Business Highlights:

  • Completed first glide flight of VSS Unity from Spaceport America, New Mexico.
  • Completed second glide flight of VSS Unity from Spaceport America, New Mexico, achieving a glide speed of Mach 0.85.
  • Cleared three new FAA Verification and Validation elements, bringing the total number of elements cleared to date to 27 out of 29.
  • Completed numerous structural and mechanical installations on second SpaceShipTwo vehicle.
  • Completed over 75% of parts fabrication for third SpaceShipTwo vehicle.
  • Entered into Space Act Agreement with NASA to facilitate the development of high speed technologies.
  • Entered into Space Act Agreement with NASA’s Johnson Space Center to facilitate commercial participation in human orbital spaceflight to the International Space Station.

Recent Updates:

  • Named Michael Colglazier as new Chief Executive Officer in preparation for commercial service.
  • Continued to demonstrate strong pre-sales demand in the ‘One Small Step’ initiative, with over 700 deposit payments received as of July 30, 2020.
  • Minimal customer refunds, with total Future Astronauts holding at approximately 600 as of July 30, 2020.
  • Entered into deposit agreements for orbital spaceflights with twelve customers.
  • Unveiled initial design concept for a high speed vehicle.
  • Revealed interior cabin design for SpaceShipTwo, accompanied by Augmented Reality mobile app, providing customer experience simulation of Virgin Galactic spaceflight and cabin interior.
  • Completed construction of the third floor of Spaceport America, where astronaut training and flight preparation activities will take place.

Flight Program Update

Along with its second quarter 2020 financial results, Virgin Galactic also provided an update regarding the ongoing impact of COVID-19 on its business and operations. The Company has implemented rigorous health and safety procedures and testing protocols for its employees, following guidelines from the CDC and state and local officials.

The protocols and procedures implemented by the Company in response to the pandemic have limited the number of employees who are able to work on-site in the Company’s facility in Mojave, California, and at Spaceport America, New Mexico, which has slowed the Company’s pace.

Virgin Galactic expects to advance to the next phase of its test flight program with its first powered spaceflight from Spaceport America this fall, with two test pilots in the cockpit. Virgin Galactic then expects to conduct a second powered space flight from Spaceport America, with a crew of two test pilots in the cockpit and four mission specialists in the cabin. Assuming both flights demonstrate the expected results, Virgin Galactic anticipates Sir Richard Branson’s flight to occur in the first quarter of 2021.

As always, safety remains the central focus, and the test flight program will progress with a step-by-step, diligent approach. Expected dates may adjust as the Company processes data from each of its test flights.

Support in the Community

Virgin Galactic continues to assist with COVID-19 relief efforts in its communities, including partnering with experts from the NASA Armstrong Flight Research Center, Antelope Valley College and the City of Lancaster, California on the COVID-19 task force to help hospitals in the region. In addition, the Company donated medical oxygen hoods to the Gallup Indian Health Care Center in New Mexico and made monetary donations to support the purchase of essential equipment and PPE for its local medical centers in Las Cruces.

The Company also announced a new scholarship, mentoring and fellowship program for Black scholars pursuing STEM education with a focus on aerospace, with an initial commitment of $100,000, which will be augmented by additional donations and support. In addition, Virgin Galactic continued to award STEM scholarships to students pursuing degrees in aerospace.