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Virgin Galactic Announces First Quarter 2024 Financial Results and Provides Business Update
Michael Colglazier, Chief Executive Officer of Virgin Galactic said, "It's an exciting time for Virgin Galactic as we celebrate the success of VSS Unity with its upcoming 'Galactic 07' mission and remain laser focused on executing our Delta Class program. Tool delivery and parts fabrication are beginning to accelerate as we work to complete the bulk of the Delta design phase this summer and move more fully into the build phase. We remain on track for commercial service in 2026."
First Quarter 2024 Financial Highlights
Cash position remains strong, with cash, cash equivalents and marketable securities of $867 million as of March 31, 2024. Revenue of $2 million, compared to $0.4 million in the first quarter of 2023, driven by commercial spaceflight and membership fees related to future astronauts. GAAP total operating expenses of $113 million, compared to $164 million in the first quarter of 2023. Non-GAAP total operating expenses of $101 million in the first quarter of 2024, compared to $148 million in the first quarter of 2023. Net loss of $102 million, compared to a $159 million net loss in the first quarter of 2023, with the improvement primarily driven by lower operating expenses and an increase in interest income. Adjusted EBITDA totaled $(87) million, compared to $(140) million in the first quarter of 2023, primarily driven by lower operating expenses and an increase in interest income. Net cash used in operating activities totaled $113 million, compared to $136 million in the first quarter of 2023. Cash paid for capital expenditures totaled $13 million, compared to $3 million in the first quarter of 2023. Free cash flow totaled $(126) million, compared to $(139) million in the first quarter of 2023. Generated $7.3 million in gross proceeds through the issuance of 5.1 million shares of common stock as part of the Company's at-the-market offering program.
Business Updates
Spaceship final assembly facility in Arizona on track to open in summer 2024. Production schedule for the Delta Class spaceships remains on track for revenue service in 2026. VMS Eve expected to support increased flight rate of up to 125 flights per year and an annualized run-rate of $450 million in revenue with the first two Delta Class spaceships.
Financial Guidance The following forward-looking statements reflect our expectations for the second quarter of 2024 as of May 7, 2024 and are subject to substantial uncertainty. Our results are based on assumptions that we believe to be reasonable as of this date, but may be materially affected by many factors, as discussed below in "Forward-Looking Statements."
Revenue for the second quarter of 2024 is expected to be approximately $3.5 million. Free cash flow for the second quarter of 2024 is expected to be in the range of $(110) million to $(120) million.
Non-GAAP Financial Measures In addition to the Company's results prepared in accordance with generally accepted accounting principles in the United States (GAAP), the Company is also providing certain non-GAAP financial measures. A discussion regarding the use of non-GAAP financial measures and a reconciliation of such measures to the most directly comparable GAAP information is presented later in this press release.
Conference Call Information Virgin Galactic will host a conference call to discuss the results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) today. To access the conference call, parties should dial +1 888-660-6431 or +1 929-203-2118 and enter the conference ID number 4014201. The live audio webcast along with supplemental information will be accessible on the Company's Investor Relations website at https://investors.virgingalactic.com/events-and-presentations/. A recording of the webcast will also be available following the conference call.
About Virgin Galactic Virgin Galactic is an aerospace and space travel company, pioneering human spaceflight for private individuals and researchers with its advanced air and space vehicles. Scale and profitability are driven by next generation vehicles capable of bringing humans to space at an unprecedented frequency with an industry-leading cost structure. You can find more information at https://www.virgingalactic.com/.
Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements contained in this press release other than statements of historical fact, including, without limitation, statements regarding our spaceflight systems, next commercial space mission and proposed timing thereof, scaling of our future fleet, increasing our flight rate, providing repeatable and reliable access to space, development of our Delta Class spaceships and proposed timeline for testing and commercial service using such spaceships, development of our next generation motherships and proposed timing of delivery thereof, the timing of the opening of our spaceship factory in Arizona, the timing of the design process of our Delta Class spaceships and the delivery of parts ahead of assembling the initial Delta Class spaceships, expansion plans for spaceports around the world, and our objectives for future operations, growth plans and the Company's financial forecasts, including second quarter 2024 expected revenue and free cash flow, are forward-looking statements. The words "believe," "may," "will," "estimate," "potential," "continue," "anticipate," "intend," "expect," "strategy," "future," "could," "would," "project," "plan," "target," and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to 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, our expected capital requirements and the availability of additional financing, and the other factors, risks and uncertainties included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as such factors may be updated from time to time in our other filings with the Securities and Exchange Commission (the "SEC"), accessible on the SEC's website at www.sec.gov and the Investor Relations section of our website at www.virgingalactic.com, which could cause our actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.
First Quarter 2024 Financial Results
VIRGIN GALACTIC HOLDINGS, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except per share amounts)
Three Months Ended March 31,
--------------------------------------------------------------------------------------------------------------------
2024 2023
------------------------------------------------ ------------------------------------------------
Revenue $ 1,985 $ 392
Operating expenses:
22,591 318
Spaceline operations
58,969 109,870
Research and development
27,884 50,365
Selling, general and administrative
3,699 3,245
Depreciation and amortization
-------------------- -------- -------------------- -------------------- -------- --------------------
113,143 163,798
Total operating expenses
-------------------- -------- -------------------- -------------------- -------- --------------------
Operating loss (111,158 ) (163,406 )
Interest income 12,308 7,330
Interest expense (3,227 ) (3,211 )
Other income, net 145 30
-------------------- -------- -------------------- -------------------- -------- --------------------
(101,932 ) (159,257 )
Loss before income taxes
Income tax expense 80 128
-------------------- -------- -------------------- -------------------- -------- --------------------
(102,012 ) (159,385 )
Net loss
Other comprehensive income (loss):
(8 ) 35
Foreign currency translation adjustment
(864 ) 3,101
Unrealized gain (loss) on marketable securities
-------------------- -------- -------------------- -------------------- -------- --------------------
$ (102,884 ) $ (156,249 )
Total comprehensive loss
==================== ======== ==================== ==================== ======== ====================
Net loss per share:
$ (0.25 ) $ (0.57 )
Basic and diluted
==================== ======== ==================== ==================== ======== ====================
Weighted-average shares outstanding:
VIRGIN GALACTIC HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(In thousands)
March 31, 2024 December 31, 2023
-------------------------------------------------- --------------------------------------------------
Assets
Current assets:
$ 195,433 $ 216,799
Cash and cash equivalents
34,918 36,793
Restricted cash
569,778 657,238
Marketable securities, short-term
37,324 39,999
Other current assets
-------------------- ---------- -------------------- -------------------- ---------- --------------------
837,453 950,829
Total current assets
Marketable securities, long-term 67,105 71,596
Property, plant and equipment, net 110,610 93,806
Other non-current assets 63,093 63,286
-------------------- ---------- -------------------- -------------------- ---------- --------------------
$ 1,078,261 $ 1,179,517
Total assets
==================== ========== ==================== ==================== ========== ====================
Liabilities and Stockholders' Equity
Current liabilities:
$ 32,886 $ 32,415
Accounts payable
92,334 97,841
Customer deposits
46,534 55,404
Other current liabilities
-------------------- ---------- -------------------- -------------------- ---------- --------------------
171,754 185,660
Total current liabilities
Non-current liabilities:
418,438 417,886
Convertible senior notes, net
70,487 70,495
Other non-current liabilities
-------------------- ---------- -------------------- -------------------- ---------- --------------------
660,679 674,041
Total liabilities
-------------------- ---------- -------------------- -------------------- ---------- --------------------
Stockholders' Equity
Common stock 41 40
Additional paid-in capital 2,646,186 2,631,197
Accumulated deficit (2,228,144 ) (2,126,132 )
Accumulated other comprehensive income (loss) (501 ) 371
-------------------- ---------- -------------------- -------------------- ---------- --------------------
417,582 505,476
Total stockholders' equity
-------------------- ---------- -------------------- -------------------- ---------- --------------------
VIRGIN GALACTIC HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
Three Months Ended March 31,
--------------------------------------------------------------------------------------------------------------------------
2024 2023
------------------------------------------------ ------------------------------------------------------
Cash flows from operating activities:
$ (102,012 ) $ (159,385 )
Net loss
8,244 12,976
Stock-based compensation
3,699 3,245
Depreciation and amortization
552 535
Amortization of debt issuance costs
(5,328 ) (236 )
Other non-cash items
Change in operating assets and liabilities:
3,835 7,594
Other current and non-current assets
(7,480 ) 2,146
Accounts payable
(5,507 ) (569 )
Customer deposits
(9,232 ) (2,375 )
Other current and non-current liabilities
-------------------- -------- -------------------- -------------------- -------------- --------------------
(113,229 ) (136,069 )
Net cash used in operating activities
-------------------- -------- -------------------- -------------------- -------------- --------------------
Cash flows from investing activities:
(13,072 ) (2,767 )
Capital expenditures
(161,843 ) (83,287 )
Purchases of marketable securities
257,414 305,791
Proceeds from maturities and calls of marketable securities
598 --
Other investing activities
-------------------- -------- -------------------- -------------------- -------------- --------------------
83,097 219,737
Net cash provided by investing activities
-------------------- -------- -------------------- -------------------- -------------- --------------------
Cash flows from financing activities:
(60 ) (59 )
Payments of finance lease obligations
7,272 32,044
Proceeds from issuance of common stock
(269 ) (1,870 )
Withholding taxes paid on behalf of employees on net settled stock-based awards
(52 ) (320 )
Transaction costs related to issuance of common stock
-------------------- -------- -------------------- -------------------- -------------- --------------------
6,891 29,795
Net cash provided by financing activities
-------------------- -------- -------------------- -------------------- -------------- --------------------
(23,241 ) 113,463
Net increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of period 253,592 342,627
-------------------- -------- -------------------- -------------------- -------------- --------------------
Cash, cash equivalents and restricted cash at end of period $ 230,351 $ 456,090
==================== ======== ==================== ==================== ============== ====================
Cash and cash equivalents $ 195,433 $ 415,682
Restricted cash 34,918 40,408
-------------------- -------- -------------------- -------------------- -------------- --------------------
Use of Non-GAAP Financial Measures
This press release references certain financial measures that are not prepared in accordance with generally accepted accounting principles in the United States (GAAP), including total non-GAAP operating expenses, Adjusted EBITDA and free cash flow. The Company defines total non-GAAP operating expenses as total operating expenses other than stock-based compensation and depreciation and amortization. The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation and amortization and stock-based compensation. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. None of these non-GAAP financial measures is a substitute for or superior to measures prepared in accordance with GAAP and should not be considered as an alternative to any other measures derived in accordance with GAAP.
The Company believes that presenting these non-GAAP financial measures provides useful supplemental information to investors about the Company in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making. However, there are a number of limitations related to the use of non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore any non-GAAP measures the Company uses may not be directly comparable to similarly titled measures of other companies.
A reconciliation of total operating expenses to total non-GAAP operating expenses for the three months ended March 31, 2024 and 2023, respectively, is set forth below (in thousands):
Three Months Ended March 31,
--------------------------------------------------------------------------
2024 2023
--------------------------- ---------------------------
Total operating expenses $ 113,143 $ 163,798
Stock-based compensation 8,244 12,976
Depreciation and amortization 3,699 3,245
-------------------- ------- -------------------- -------
A reconciliation of net loss to Adjusted EBITDA for the three months ended March 31, 2024 and 2023, respectively, is set forth below (in thousands):
Three Months Ended March 31,
--------------------------------------------------------------------------------------------------------------------
2024 2023
------------------------------------------------ ------------------------------------------------
Net loss $ (102,012 ) $ (159,385 )
Interest expense 3,227 3,211
Income tax expense 80 128
Depreciation and amortization 3,699 3,245
Stock-based compensation 8,244 12,976
-------------------- -------- -------------------- -------------------- -------- --------------------
The following table reconciles net cash used in operating activities to free cash flow for the three months ended March 31, 2024 and 2023, respectively (in thousands):
Three Months Ended March 31,
------------------------------------------------------------------------------------
2024 2023
-------------------------------- --------------------------------
Net cash used in operating activities $ (113,229 ) $ (136,069 )
Capital expenditures (13,072 ) (2,767 )
-------------------- -------- ---- -------------------- -------- ----
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507384831/en/
SOURCE: Virgin Galactic Holdings, Inc.
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For media inquiries: Aleanna Crane - Vice President, Communications news@virgingalactic.com 575.800.4422 For investor inquiries: Eric Cerny - Vice President, Investor Relations vg-ir@virgingalactic.com 949.774.7637
COMTEX_452026041/1006/2024-05-07T16:05:19