Virgin Galactic (SPCE) 5 Nov 202020 Q3 Earnings call transcript

Thank you, and good afternoon, everyone. Welcome to Virgin Galactic's Third Quarter 2020 Earnings Conference Call.

On the call with me today are Michael Colglazier, Chief Executive Officer; Mike Moses, President, Space Missions and Safety; and Jon Campagna, Chief Financial Officer, who will provide prepared remarks. Earlier today, we issued a press release and made a slide presentation available on our Investor Relations website, which provides an overview of our business and financial highlights for the third quarter 2020.

During today's call, we will make certain forward-looking statements within the meaning of the federal securities laws.

risks projections on statements and current result, subject predictions, that future as are are based are expectations to statements and about other events a Forward-looking uncertainties. and and assumptions, forward-looking cause could to from communication. future Many statements factors this actual in differ events materially the

materially and the other For more earnings we today time Exchange and to risk of press filed factors including forward-looking section by statements, cause for to actual that release and information time included from from of XX-Q may Securities uncertainties please the Galactic risks documents Virgin Commission, about results the with differ Form refer XXXX. quarter to issued the in factor the the third our

Readers statements. not on certain Forward-looking call. undue reliance also are Please non-GAAP put today's statements will only are cautioned financial of speak to refer forward-looking as that the note we date on to information made. they

financial our earlier comparable reconciliations www.virgingalactic.com. most to measures Colglazier. With website of the can at is which that, section today, press You earnings Investor of available on our like call turn these over find the Relations to Michael to the in release I'd measures GAAP issued

brand, afternoon, I've are immersed Thanks was myself team in members. I months, everyone. and you and and company's loved into incredibly areas, hope commercial the operations, getting ones financial well talented weeks know two underway good our Michelle, spoke with your the to over keeping three last and safe. and and I healthy I last you job. I'm engineering, And the

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Michael. Thanks

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the increase to for QX grant R&D additional back were scheduled due and R&D the policy Social transaction of equity for $XX not million million our technological expenses forward which expenses closing Capital inventory in compensation $XX certain related a achieving the capitalization increase of reflects to determined the meet relate second The our identification $X of expenses we compared expect of primarily the before non-cash quarter items awards, stock-based for later, to GAAP to Hedosophia. Looking of charge to quarter million in feasibility. one-time non-cash XXXX.

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Michael. I not premium call timing to Although primarily XXXX of flow coverage's, quarter insurance to to certain annual would free the in back providing of in are specific cash now the we our turn for increase to expect which typical over the guidance, due QX. are payments negative concentrated like fourth we

Thanks, operator hand the to for now I'll Q&A. Jon. over

ahead. the first Adam question Jonas Please with line of from go Instructions] Stanley. [Operator Morgan is Your

everybody. Thanks

them QX Just highlighted, first the track a into first COVID issues the Is on expect the couple is that delays Branson the this quarters? that in differences as these delays? questions, Or the operation already part because flight significant your conditions Branson just on working QX. flight that close factors is persist to you in for to aren't in you for yet quarter of it due

Adam. Thanks,

…first question, thanks.

Thanks, is This Adams. Michael.

seeing impacts COVID. are We from

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Thanks, that be thinking on question how payload the mag? the should highlighted A that test modest revenue the quarter, about on Michael. revenue order of we you payloads, the for for

earlier, NASA look Michael have mean, on at will best as be flight $XXX,XXX there's sure, of payloads payloads, the is Yes, we Jon. is Adam. mentioned way think, planned, three probably for sort in later this that I but I that the to that range it's this month. Yes, that Yes, for

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down we focus think, on Michael at going still the R&D here production how to those as of reductions to an a cost driving in we not coming we're we're those second you. costs mentioned are over able look an onward. to that we what in we'll those that we're and as to position as give so Yes, Adam, that reductions for and we're to from I point, are, third particular estimate At future shifts will a have from share as but evaluating months this to point, continue with moved sort focus certainly

Thanks, Jon.

with line from question the is Please of Suisse. next ahead. Your Spingarn Robert Credit go

good Hi, a afternoon. of wanted Michael, I to a question. sort longer-term ask you

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question Please is line ahead. UBS. with Myles the next from Your go Walton of

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America. go is Ron question of Please Epstein from the next with ahead. Your Bank of line

guys. afternoon good Hi,

picture you. just a Michael, for big So, question

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excellent really to So see. that was

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Please of next is line Cowen. go Chen from ahead. Your Oliver the question with

of in and look opportunity as is XXX we you. you And just accretive how assumed perspective, spaceship, bigger you you. Our we your a on Thank flights are will value that also spaceport. from also a and as scaling ahead? leverage that indicate Michael or think challenging thinking pricing more and modeling lower. lifetime of out mentioned Hi. and both that the for the customer year, would of you scale Thank what the the as well to as seek longer about be number experience spaceports like remarks opportunities lot The about the opportunity surveys what as equation? part per and up-raising

Thanks, Oliver.

don't part part take the first, of me On the let you mind. second well, that; first if

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plans a value maximization and Just with thinking about not lifetime there for customer experiential, mean, I pricing. intersect and scaling and likely as as creative well

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flight focused imagine the fully getting near this test, operations proven, really Spaceport. get at you our starting feasibility and utilized we're then going technological a in as into our stage, think would growing commercial on completing term I to

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of the with from Sachs. Your next Please go is Noah ahead. Goldman question line Poponak

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of We data as flights down there. from and decision that And ships these at our look comes is all each make the they we analyze it. back what do the so we after we come

will But dates. I feel today, it's tests retest they engineers like. we knowledge So upcoming our they would that want with always to the possible our something us that good about flight or find sit as additional

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the Please for Skibitski final your Alembic Global. question line at with And Pete is ahead. go

evening, good Yes, guys.

flights. higher Just math a of the And on the is one discussion designed couple getting back rates. getting to the XXX quick ones; of second for slides to your mentioned ship

my How can that the this each are able I do they to point, Can about model you ships and talk at you follow-on second going do ship think rate have I the month. being to ship per five do? guys about six, seven. flights thinking these

XXX about return more that target hit where themselves; Obviously year ships high flights the ships. reasonably to the less model, them, ships I can And for overall turn factors a specific rate. how think cost we're to as main the think we'll of the at focus of quickly move today probably the we into need a and our going manufacturing I that. the we're build going Well, about we

And have part so will we the learning forward. that's that of going

modular easy a lets ship quick it's think turnaround get regard. second to time, know give in do in is I will we us it's it that fashion. and better early probably a a designed maintain guidance the to little that But in more we and have a designed fashion

here, As those you view thing to with will be do own things closer your we be committing that about inform so committing can modeling. we learning's to that of be will get clarity is the we one as

speak reach to for mentioned. guys Okay. Can ship? smoothness horizontal technical, higher But to altitude or just the on for maybe or maybe? the me, control do That's Mike ride? mentioned, that improve safety does And great. anybody I'm Does last one just that you the a the that little what system, curious of the to a allow but I appreciate you flight the particularly it. upgrades stabilizer maybe

is that this Yes. Pete, Mike Moses. I one. answer can

actually primary stabilizers use. are one controls we of horizontal our that flight the So

kind of its us allow turn flying we're the boost vehicle, the drop straight then in and ship turn we up up. bite and tail level horizontal and on to stabilizers and when the So straight

So they are very critical system for us.

can it of have, they anything So the does to kind that of control really if because you us sort that performance, reliability, us with profile. fine we curve, boost speak improve help tuning to of do allows their net the want to

even this. to importantly, about, system. more the, what improvement again, it Michael it upgrade we more And has gives talked and us some little that with room So talking robust allows were electronic software really to an just us in capability more system developing a maybe

in to in For ahead go we to got run expansion some but decided look on to get as it's flight us future and future future, we higher time and the ships it, now put great of capability for a it some Unity rates.

you. this will time the remarks. at to I turn call And Thank closing back for Michael

brief be I'll here. Hey,

your you hard at on say thank I taking for First, of entire been to you going for upcoming to wait I speak for and I cannot call, preparing flight want take our I space the at interest us of all been in thank incredible. but and Mojave, we a to this we New has just in flight appreciate know election continued people support support when for people news, all do our Mexico, progress Mexico, forward working of a have earnings day. appreciate first want team good everybody spaceflight powered after so of in Virgin time. and during next the for call the joining quarter's updating our as a well. company. call. People and you everybody moment the and Thanks the New There's weeks to lot We this I each few a on look on Galactic. this I have

thank And call. participation. conclude conference today's does you for We this your

disconnect. now may You