Virgin Galactic plans to pause spaceflight operations next year to focus resources on developing its next-generation Delta-class spacecraft, the company announced Wednesday.
Shares of Virgin Galactic surged 19.2% in heavy trading volume on Thursday to close at $1.86 a share, with the stock down 47% year-to-date.
Although Virgin Galactic has been flying commercial missions at a monthly rate since June, the space tourism company will reduce the rate its VSS Unity spacecraft is flying to a quarter rate, before pausing "in mid-2024" to focus resources on final assembly of new Delta ships, the company said in its third-quarter results.
Virgin Galactic laid off about 185 employees on Tuesday, or about 18% of its workforce, in order "to decrease its costs and strategically realign its resources." The reduction brings Virgin Galactic's total headcount to 840 employees and is expected to generate about $25 million in annual cost savings.
The space tourism company posted a net loss of $104.6 million, or 28 cents a share, compared with a loss of 43 cents a share expected, according to analysts surveyed by LSEG, formerly known as Refinitiv.
Virgin Galactic generated $1.7 million in revenue during the quarter – up from $767,000 a year prior. Earlier this month Virgin Galactic completed its fifth commercial spaceflight.
The company has been spending heavily to expand its fleet beyond the current sole VSS Unity spacecraft. Virgin Galactic is developing its Delta-class spacecraft to fly at an improved weekly rate. The company aims to open a new factory by mid-2024 in Phoenix for Delta production.
"We forecast having sufficient capital to bring our first two Delta ships into service and achieve positive cash flow in 2026," Virgin Galactic CEO Michael Colglazier said in a statement.
Virgin Galactic had cash and securities totaling $1.1 billion at the end of the quarter.