Virgin Galactic's quarterly loss increases, plans next spaceflight test for late November
- Virgin Galactic reported a third quarter adjusted EBITDA loss of $66 million on Thursday, notably higher than the $54 million loss in the prior quarter, although the company now has $742 million in cash on hand after completing a common stock offering in August.
- "During the quarter we made good progress completing the final steps to prepare for VSS Unity's first rocket-powered test flight from Spaceport America this November," Virgin Galactic CEO Michael Colglazier said in a press release.
- That next test flight is expected to occur between Nov. 19 and Nov. 23, the company said.
Space tourism company Virgin Galactic reported third quarter results on Thursday with an increased loss as the company looks to fly two more test spaceflights to finish its development program.
"During the quarter we made good progress completing the final steps to prepare for VSS Unity's first rocket powered test flight from Spaceport America this November," Virgin Galactic CEO Michael Colglazier said in a press release.
That next test flight is expected to occur between Nov. 19 and Nov. 23. It was previously planned for as early as Oct. 22.
Shares of Virgin Galactic rose about 2% in after hours trading. The stock closed up 6.3% at $19.17 a share ahead of the report.
The results
Virgin Galactic reported an adjusted EBITDA loss of $66 million, up from a loss of $54 million in the previous quarter. The company booked $0 of revenue in the quarter, but did receive about 200 additional refundable deposits toward tickets. That brings its total number of $1,000 deposits to about 900, from about 700 in the second quarter.
"The report's as unexciting as expected ... they spent a little bit more money than last quarter, but still are sitting on a strong cash reserves," Andrew Chanin, CEO of ProcureAM which holds Virgin Galactic in its Space ETF, told CNBC.
The company has about $742 million in cash on hand, after the company raised more than $440 million in a common stock offering in August.
Virgin Galactic said that it "is continuing to experience ongoing delays to its business and operations due to COVID-19, which has led to accumulated impacts to both schedule and cost efficiency."
"This is expected to continue through the fourth quarter and in 2021, though the Company has continued to stay on track for its planned upcoming flights," the company added.
What's coming next
Founded by Sir Richard Branson and taken public last year through a SPAC by Chamath Palihapitiya, the company is still in the development phase of its business. To date it's completed two federally-recognized spaceflights, with the company expecting to conduct two more test spaceflights before it flies Branson.
Virgin Galactic has about 600 reservations on its books, most of which were sold at price of $200,000 to $250,000 a ticket several years ago. While it has not been selling tickets as the company finishes development, Virgin Galactic earlier this yearbegan a deposit program called "One Small Step." Although it now has 900 of those deposits toward tickets, Virgin Galactic said it will end the "One Small Step" program at the end of this year and re-open ticket sales fully in 2021 after Branson's flight. The company has not said how much tickets will cost once sales reopen. However, company executives have previously said that the high demand for tickets means Virgin Galactic expects to increase its prices substantially for first commercial flights.
Its next test spaceflight will have just two test pilots on board, although Virgin Galactic will generate some revenue from the flight as it will carry microgravity research payloads for NASA. Then the company will fly a second test spaceflight, with four "mission specialists" inside the spacecraft's cabin.
Virgin Galactic stuck to the test flight schedule it gave in August, saying it still plans to fly Branson's mission in the first quarter of next year. The company also said that it expects to roll out its second spacecraft in the first quarter, which will help Virgin Galactic fly more flights more often.
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