Virgin Galactic (SPCE) 11 May 212021 Q1 Earnings call transcript

Good afternoon. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to Virgin Galactic’s First Quarter 2021 Earnings Conference Call. [Operator Instructions] Hosting today’s conference will be Seth Zaslow, Vice President, of Investor Relations.

As a reminder, today’s call is being recorded. to conference like to now would turn over the Mr. I Zaslow. ahead. go Please

you, Welcome Conference XXXX everyone. good Call. Virgin Thank afternoon, Quarter to and Galactic’s First Earnings

On Chief Safety; Swami Colglazier, President of are Moses, the and of Iyer, me Doug Systems; Officer; Ahrens, President and Executive Officer. Mike Michael Missions Space Aerospace call with Financial Chief today

our prepared questions. remarks Following we for open the call

will our the about release minutes ago that on was slide available is as issued XX today’s Investor press website, Our is Relations remarks. accompany presentation and

Let you which Slide of contains X our me to refer the Safe presentation, Harbor disclaimer.

call, make subject events statements materially from and we as During factors risks statements. made today’s assumptions on to differ on are result Many may actual to These based statements cause forward-looking are a and the and forward-looking call. expectations this current uncertainties. certain could

to filed uncertainties, For this refer not on Galactic’s note amendment we cautioned forward-looking any more information financial will that forward-looking to call. from the reliance discussed to to undue company please also specifically its are Readers of disclaims time. by time Exchange Virgin documents statements to and obligation Galactic filed the XX-K be the may risks about non-GAAP certain Report statements call. update on Please during the Virgin these put refer that on Factors today’s section Commission and second with to information Annual other Securities and and Risk Form

to of in to that, reconciliations like Michael. find financial I’d to measures With over our the can You release. GAAP non-GAAP call turn most press measures the the earnings comparable now

hope afternoon, you Thanks, are all everyone. good doing I Seth, well. and

and markets, is key to in companies talent skills, complex execute scale to plan aerospace Doug's joined brought of business, business. and expertise depth his of Doug team Swami new while valuable deep incredibly Swami Swami current Galactic is to and my fleet grow future brings pleased responsible as March we expand incredibly expertise our and has in have lead orientation as company lead and also expansion, Ahrens relational leadership be both Doug great M&A in monetize public and the in and in Iyer and will the in manufacturing for and We're vehicles. technology some building and head CFO, of and operations. CFO, a capital on our our designing experience to we systems. them I business production the extensive our the aerospace out process having part as strategy onboard. our commercial with exceptional necessary areas. build teams environments. As new to Virgin

success. impressions positioning and financial commercial I'll Swami's scale remarks, will for our provide the and and some will on call. start organization to are agenda how flight. we the for update Doug our viewing he's our on our Moses update. on and following how fleet with the plans, After areas to of initial Mike talk an provide business will an focus. I his about I'll Moving and ask then a today's update Swami strategy provide comments that, key upcoming expansion

get let's started. that, with So

Turning to slide X.

be is period for what a dynamic we revenue experience and time a beyond. expansion. an to both phase and for new of industry the Our opportunities. organization the for our number phase. our one, two, an And preparing commercial to completing schedule customer long and service. three, on are expanded create ambitious and and the commercial space to going we company areas. to readiness, manufacturing our expansion, flight fleet test our pivoting and whole. entering three It's We focus developing believe a fleet And Number remains as fleet program, adding set Number XXXX growth and following a from spaceships R&D strategy motherships

slide X, readiness. start fleet let's to Turning with

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Thanks, Michael.

to slide Moving X.

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of fleet Swami area some In expansion, business. like this share Swami? to our to comments terms of about I'd

Michael. Thanks,

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to Thanks Swami. Alright, turning slide X.

plan minutes experience. day of commercialization, comprehensive progress our journey shoulders XX a we multi the to towards on consumer create As we spaceflight

is the be believe the We're goal of We the and intend we developing a We to have to experience unique memory distinct like leverage strategy. lifetime. the Our turn create our the move to bespoke to financial strengths now as architecture in of marketplace. brand lasts experience. our for Doug the area to ensure customer share call spaceflight that Virgin on the more brand to business of also I'd and over approach our this will marketing forward. update. We'll

I some Virgin two good Thanks, here be I'm months team my everyone. and And afternoon, I'm also talented It's I of the forward you you looking for earnings with individuals organization. community. even now to since to excited working joined and Michael. today the about had of company. in opportunity investment the the been observe first pleased all of Having with Galactic within to call. the all time am more listen,

Turning XX. to slide

review the I the Before to begin broader wanted few financial comments with our on results strategy. quarter, financial I a for

subsequently fleet approximately as our pleased total operational astronauts of commercial organization our financial We're our also consumer brand for and our the the scale service, number XXX As positioning We're experience. QX. of end planning. to prepare launch look these private inform and the of future we of we're using to remain steady objectives that for and

sales Richard of reopening astronaut As we fleet Branson. demand have sales, size. flight consumer for a portion we've private an to to time intend finite overall to relative we'll this a plan the we satisfy By expect our astronaut with of fleet sales and around with a to of With the the currently to disclosed, our reopen a the a backlog expanding funnel open to incremental plan time build market of add to members We our approach, of number for period community. limited expansion. appropriate private pace look

experience to is price for consumer goal flight appealing astronauts. our the maintaining address an time private demand appropriate and some the service for of Our while for our horizon for point

yet updated not our have astronaut for released pricing market. private We

however, markets. private microgravity research training have pricing for current and astronaut established We

in previously these partnership we've Italian capabilities As we have discussed, our Force planned the a for with demonstrate will markets. flight that Air

at pricing per seat. are entering now revenue, seat. a or about expect the million this excellent results of We our equivalent $XXX,XXX $X this we're market per the per flight for seeing We these our introduction business. equivalent for to seat generate this of On we're portion $XXX,XXX and market. think into dynamics excited the agreement to We're quite of

review no there quarter we on didn't quarter, in first for XX. the slide results revenue. were the any Let's flights Since our generate

value was expenses million the in first going based resulted cash revised non warrants. disclosed were previously treatment the the remain year response connection $XX by adjusted we in was of $XX in In our period. this $XX to warrants quarter issued of expense the GAAP the million negative year decrease accounting million $XXX for Total a quarter originally SEC to negative new Adjusted to million year stock million, Notably, guidance less in period. million year $XX expenses for change the than we the of compensation increase outstanding. attributable of to compared prior compared non prior recent first in with related company a of to $XXX As Net increase compared loss loss in attributable net the currently warrants to quarter treatment issued $XXX XX% to $XX million XXXX. warrants, an in cash the in exclude were the expenses fair operating a value in to of expenses million, in the to issued in in The $XX year, based million, was the XXXX. the the public compared stock period. of The to in prior loss change cash expense million, compensation period. compared in prior non $XX first was fair EBITDA

was to capital $X compared of million free The $X million, to was of use XX. slide use million year the of to lower due quarter was in capital in $XX the In dynamics. expenditures CapEx capital and favorable decrease XXXX. compared flow Turning $XX in allocation cash first working a million the prior quarter, the first on to primarily quarter period.

Looking free ahead, cash negative quarter second we flow approximately anticipate of $XX million.

cash balance the of and million cash of $XXX sheet our Importantly, of capitalized as with remain strong. We well first the quarter. end remains equivalents

We fleet, capital experience. a market cash well As objectives. capital we've on plan to build use future fund business. our inflows of as the combination favorable to of looked raise the conditions discussed, to we've out well as our as expansion business advantage take for hand consumer strategic to Historically, plan our for of calls of of as our

opportunities forward to markets Going to we'll continue scale business. grow I'd call back to evaluate Michael. now hand our to the to access like capital the and

XX. All Thanks, to right, Doug. slide turning

to take have Before a our moving who objections. I working to strategic thank entire want on moment to team Q&A, our diligently been

our the following restate three think customer are now remains experience. to portion on readiness, to of ready we the the Q&A the of the fleet areas; expansion, Operator, focus call. the development Just begin and I

Spingarn comes Suisse. Instructions] first a Thank Robert of question from line Your from you. [Operator Credit

line open. Your is

a Hi, good question players. afternoon, Michael. just two Hey, about and the the Michael, a market

Origin So your sounds stay now if update a it they both important Galactic capture relative from future How target. especially a are and send your are may And July schedules, approaching as as week. passenger they on commercial perspective? you'll schedule next up and like service Blue soon on us order

new excited guessed, it would that take basically, private have us that space. spaceflight few lifetimes. the I really have yet, a for world even we're here upon in before, this into to going of human is paving us. and is think our multiple citizens being Sure. to One, This happen something as to years I've is not territory able ago shared And most people,

it's spaceflight think the to because important, the Blue back, voices people this to more inspire more success it really are idea to into market. I just overall. back great and engage other to planet, the I of will have perspective people human are we and success, add that have So and that market the more pressure that And go on think come going will great up normalize able get the their the

excited the timing question a So them. matter, your we been on for think years built over I that's does To decades just we're Blue. have company very as and

so I while space, we will And think going be there I around when overall. don't matters media to are great both think it attention business into our up moments

Okay and quick for Doug. then one a just

there that markets? cash the QX? see progress you And burnt it quarterly beyond you'd is at burn minimum how evolving So a we want return to XX cash the perspective? does about. million QX On a How just from to point which balance, beyond do talked capital

Thanks question. for the

So multiple are play to given a burn. we there about. cash specific think term dynamics haven't But guidance, long on in

as first business inflows, the manufacturing will side, the fleet. that build reopen we'll flights. we and those, as cash we approach those in remainder revenue collect And expand our get cash out capacity those sales, we for the in. our increase we will see we Plus, is ticket service scale as The one commercial as on an CapEx coming inflows of other

high two cost production working low volume good get So you economic through expect what things variable model up ramp because to you strategy. And together. have a we we with then those a nice to a flow be have we as

bottom to So nice the flow you through revenue would have the line.

want as put and minimum grow there, all out the of have flexibility with but scale So a certainly cash all business to needed. amount the we to haven't that,

thanks, Thanks, Okay, Doug. Michael.

Thanks Rob.

of from question the Walton next comes Myles from Your UBS. line

is open. line Your

one White make maybe I was back forward little that to and last items of checklist do was to on larger And of point sort does do? fall the critical that of maybe with How could clearly on more on downtime maybe point ask I maintenance one. was smaller If a issue was having a think do for of the to pre-existing wondering the discovered flight. then the elaborate on in issue week. about CapEx pull one if it or that on it the items as to Knight bit to this to the of second Moses Mike you single the during a Michael, an the path single to Eve

Thanks Myles.

of is how So the we aerospace program maybe that let systems. me actually in very those Eve, found just protocols and which item context on is established, give maintenance common some

And with And a flight the have not and our tasks track and systems, upgrades and look alluding said, are lifetime, previously for series but all to a maintain flight their for one next allow plan that inspections instance only modifications of this that to, and looking to at maintenance we the health. other them we fall designed have the Eve next vehicles. vehicles preventative as and kind necessary. and in those as of periods of had We their at would with you're ongoing scheduled the several, complex also we be as and or

is those So in whether determine the track and let schedule anything that those unexpected. on to react for inspections, valid and modifications us

training, issue But be need of potentially double requires that we is valid we was in addressed for pair on sooner the check last an that did the items to than address we pilot do that last week, that fall. just flag and still plan further accelerate or later after later. calendar basically some did a to that So assessment flight our that

inspect, we type adapt the just do difference at. thing where of we're that address specifically looking a that the into coming that a of modification vehicles to as the guess to we monitor, in meant program. say this between program one we had is cadence versus commercial flight test move things we we would And and That was point. period service aren't regular that's fly, that I issues you So is the I'll those

what we would potential second we've the a three, say spaceship you're as forward the to excited fleet. back is, pull three, our VSS And about ship. started unveiling talking for very are first mentioned, What have first of CapEx programs our Right. grow had of the unit spaceship we in I'd And Imagine, both on Myles we forward. initiated the March. motherships. need, I spaceships, the we've production time, we going model, a program the the have for we'll a Classes we say, calling initiated up But new we're the development At scale would more need also more definitely which same because be we Delta mothership as volumes to of program

for really kind kind we're second design program, stage of to that until going. do it'll us phase maintenance a pop that going this of update with we end This low is maintenance that I up settle going. and piece is So topic financial week, that's the which we often you next back expenditures at timing of sort we're come the our on to on had the It and market, think on design little early last we'll week. mothership in while going to of you're that is impact all relatively stay aware. the in where as And through

forward well it I as as going emphasize it changes kicked but we on just new think have both So programs to off plan re kind does don't our of going Myles forward. spaceships motherships

to comeback if the to do clarify, second I Mike and just you to you'll guess know have Okay, per issue. don't just

that correct? Is You're will still to not done. evaluating whether be or that have

Myles. Correct Yes.

we breaking Tuesday our last found The of was after that doing we were flight, are a pretty last late deal. which we So week. in inspections

a done Michael said. And all we'll as so kind that and soon. pretty able to that And inspections We'll back of with in make We've determination now. next totally some wrapped here extra be analysis up. the get update to of you middle we're week market a

Thanks so much.

Thanks, Myles.

next Stanley. comes Morgan question Jonas Adam from Your a of line from

Your line is open.

think didn't Hey, remind as range prior I everybody, the is Can for on how of the on a large on simple when deposit funnel. you percentage a the within know you if kind could just seats us one disclosure was clarification the we or of there that, one deposits. reopen about the spaceflight?

I deposits. don't prior on disclosure believe size we the the of put

that We have moment, are going price a guess, able the the do we have out per to shared expect prior our out reopen varies you seat, point from price to up. we if I that last $XXX,XXX generally and disclosure moment be higher that will will, little was when price we sales

about I don't think closed. scale yet. of that has we've the So been the talked deposits I think

fine, Michael. And second one for just Okay. a that's me.

do us third both You and the that months, of that of I between seems gap once one non-Richard a Richard for dimension could you then commercial path and you that us the that kind Thanks. very and then the the terms and help flight two are flight order quarters this and first mentioned about we third modeling for that make imagine towards you important, the would flight. what flight, the think magnitude preliminary stage and Also move to Can you moment pilots of Richard because Branson would what between commercial service. talking CapEx commercial. in can OpEx point or help of with what of gap that

Sure.

back I perfectly. if didn't question shot Let come to feel take a quite the catch and me free it at

Richard We expected to have forward more call. go maintenance fourth as Branson. and flagged giving and test to kind an with a following those me that, looking is shared. in Sir then we shared which we what let And last the to about, coming summer. We're back in planned what we're we'd our two early one talked of revenue Italian one a kind fall. go shared So late that's we to with flight in an that flights will And quarterly then And week in the Force. at earnings next here Moses update update, last a test. be we we we talked summer, Air We our the May had flight be flight producing And would be and with back internal having that flight about on of to we going that just thought crew, Mike topic. next

to all back the specifically market on And so and update we'll sort with that you come more out there. for an

as commercial what happens to service. well your move then question into you as Now of

point following As is kind four are of of flight, have on call, will last estimated think we and have shared fourth months lining that we upgrades Air we the up right planned estimates modifications the we test our each that with we be our basically ships I the three now. at Italian flight the Force, of period active time, about we what to at a that and

that planned and more a about I'll So ships we give Eve, as them are we've have Unity both little shift upgrades cadence modifications service. flight as and commercial even been it help talked well those to today which predicting bit has as of reliability call modifications some Unity, into upgrades,

doing flight be for also first and flight power our the the we preparing there Imagine following making We on spaceship go VSS modifications these vehicles, from testing periods. as modification testing, then will fly of then three updates begin and

of service So we and and service, into upgrade following Unity of we'll would period start and that Eve. Adam modification commercial commercial spaceship kind is with when move

kind say I'd basis start managed a at those move on as of one flight we will that So through time. a

bringing them. will area fleet going That's we uptick see because over actually you'll standpoint. giant and our flying America hosting come OpEx different to time. think at and you don't see be scaled categories I astronauts the in that So them of But we'll OpEx more the Spaceport as a into around in

relative point seeing in at you So modest I more to that OpEx revenues it that be would be there. will think uptick

color Thanks. Michael. for Appreciate the

Adam. Thanks,

Ron comes from next a America. of Epstein Bank of question line from Your

Epstein from of Your line is Ron Bank open. America. Again

sorry Yes, I mute. that. was on about

Hi Ron.

I can to interest, again, you votes. was just XXX incremental the guys it's while, like maybe February under measure growth any XXXX any you a us of actually, have under the demand, there trying gave because, February, got sense share any you Do us demand you incremental mean any get a for incremental XXX astronauts, been pool on potential for for, in is with that, in that on hair sense how an indicator prospect guys. anything relationship was there through a Back in that hair there incremental a XXXX

while. a has of kind And that's we it this. think Sure. been like for great And there, because one I there's XXX for excitement thing

to talking XXX fleet overhang capacity. of demand program, an that guidance with basically So going we move we for of runs go. spaceship ships, was so yet going begin forth build service book where that commercial service flight completes our keep inter shared have and to of a basically continue demand a demand have forward. of is want we that overhang kind we its will as in we today, But has to What then haven't an Obviously, spaceship advance continue service, commercial our Doug about into commercial on further been as plan Imagine test and second as build while. we it so to we overhang

going it. pressure really there We demand is believe So always is there against to demand. great be

you the all spaceflight multiple at you look human in players excitement the the think see around concept I in and it market.

excited the we -- training by encouraged those also astronauts. the we well because come that raving microgravity very that mentioned, of initial talked we've share the back for are that think be also flights important be Blue's it and up, research as coming what our will And about, continue I capacity points demand professional our slices slice launch see as to just today is that and demand will price been you're we that spaceflights seeing to further and of going that's did so as be initial we we going today an going this we're about people was What these the market. for what is fantastic that of going mentioning Doug to forward. think is on from to with

on confident released feeling So you very the haven't and here. we're we for But any demand. specifics robust

next pricing direction, next and you the Do go to then of bit. sort want a little have the with pricing one, Got for competitors. I vis-à-vis question, your sense it a your

if are expensive going versus on a priced, trip have that? is is guys fly it more expensive? you a it So on guys, of you on comparably I'm more to trip you any Blue, Do sense or

has not pricing either. Origin Blue knowledge, released my to So

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goal really the is and And about there strongly our is for we so the company really feel that's ensuring that. value

And maybe one I more may. technical question last just if

EMI is reliability. them the of the are the because want will will execute launches just you about And inspection thinking goes quicker it popped to, enough them and the I maybe cadence way to issue the the assets the labs, around worry utilization just an and of that plan robust raises be How up, of to? might more. be things assets you With the you one that question issue, that you up then of flight fleet post about the issue ramp as commercial the that's be want

is a next ready the asking Galactic what in flight that of is new compare like difference Virgin data, forward. that along our flight and these analyze the the variability all some operations. and on a its looking adjustments of important every that program for it that between question. it, are take call right confirm are we And we fly models, one, Thanks program, against It's In data, out test one. and test flight gain to kind an to a commercial we I'd analysis program have. that's programs, for unique that the And path going data of make schedule flight test the we're modifications which test on tests making or, way. piece for we essence not we're flight has based to after each And test going time

is doing about our planned you what to Eve, doing to and But going confirm how be We're was really pull schedule, or forward. are week. from this we ships. Now to go much planned maintenance back We're fight and with could October. operations today in of maintain that question about then, we concept going the said shift mothership require forward come And which we're we talked schedules. going that into we're Commercial predictability maintenance you to our and trying to is which if commercial a operations. to and next back to I more what fly come talk we our now robustness test going

that the on make modifications So will one more down with have in of predictable. Unity let our some is reasons those Eve this to flight period rates and the be fall we the mothership

of again. the of we spaceships fly, of down inclusion you've return talking spaceship you're how building and repetition to quickly the modular to reach those design from manufacturing greater Unity for all consistency a and classes model. And now locked do is, our a what we when production profile about in what all it those, that basically kind basically that first operations the had call And time, way us heard got we have we're kind ongoing once discuss fly Delta work. purpose we've intentionally gone learnings very three Imagine VSS I and class you've allow very spaceships the purposeful the design, into As is the the of with and our predictability

and operations and like So be see you flight to out this is in in will expect just flight I commercial more should what reliable repeatable. are you're accurately we test, emphasize to test. calling

unique have it's is up. somewhat company information we think share. pre-revenue which and happening bringing to topic often But good. test that that's so flight that calls, important I a why that's And public I appreciate is in you these

Thank you.

of question comes line Bernstein. next Doug Your from from a Harned

Your line is open.

flights, four through and you, the upcoming going the about Thank Italian evening. one. you think these three one good the test When then with

go one, back kind months. some for to I other we to that to be you confident be to words, were completed, had of that be to things XXXX/XX go four you What to next free So ready want if do that those you you mean, are confident of where how to of they be? issues. kind some need to flights say go? What timeframe, do need to here? issue In see you're looking you

Sure. way, question. Hi, Doug, excellent by the

So one talk do. next The let's flight. about this we upcoming

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two the the so with fight really we pilots have that next just And is to out. prove

overall we I seen see the test We powered will a flight. it we've under That that call but continue in operate system, technical the flights, want confidence our will from what is a we're just have And on do as performance we looking great looks the ships how to across all always to and the for. experience it. we evaluate powered of of

then we're pressures on pieces saw kind prior expect also will of the there? We are people the to them experienced? we the be? we that the is great kind What of of where the for and go of back those So they back? what and did do the how in the next the the you The is first that full with their there. flight to they in cabin? to kind a the want crew full first all folks a experience specialists for. to of of find kind want piece the people Are But consistency are back. we've flight How two How the confirm with what let's because around views got movements for flight, see one technical one mission repetition looking repeating, and has new is crew in piece that information pilots the the

and The term isn't what as now But is what two repeat generally are the technical of The cabins second next doing. aerospace as same an well consistency one would piece and that back. rinse we're that's four necessarily be.

then purposely repetition on ship go basically what performs professional flight other There's the we're in this we same to objectives forward. this our around we wanted an still and again. flight ground time, two repeating that intend the of the focus that under way it do and to along markets, things feedback to chief adapt astronauts will the microgravity test and about the then flight again Richard astronaut to as will as be excellent experience. testing is The into others research And we come envisioning on will belt. add I've need. flavor okay, of And our fourth think be will training. been be just demonstrate our say, researchers that here the space in and operations. And noise kind overall adventure way some and getting that on we'll how Okay, the what is things let's that about we some some that our of we all There make private kind what adapt the founder to do kind and fourth

So demonstration that we'll flight. adapt and that also use as our

and there, at and won't at stages, So that's we stage we for new. but will generally kind of we necessarily of what be those looking for something look each each what consistency we're one looking saw

just to have gone this. a I'm stage. few for things, believe, old XX two bit guess is this But years I Eve trying picture at around a questions instance, about that I

three spaceship is You've coming the now which out, got great.

flights in be test most, do most both of terms we've what aircraft seen you for for different these just lived aging got environments looking to well as aircraft? I of of very than long assets. in the might mean, how for expect other the on I'm these anomalies just you've thinking How types as in So be? them you

start free in. and I'll gentlemen feel Sure. kick to out

So as putting that Eve, you with like every forth back day airliner let's lot. It's days, years, hours and XX commercial is a not a flight it's exact I at time. said, but flying don't recall flown the not go it and on

go. airframes that that to gone consistent flight it some through So as make hours and ready fly updates really looking to it modifications cadence. has got of people its their things into as making That's I'd is we're We we looking of what good say are not that and sure far kind service allow we've to like do so modest flight plan will Eve to trips with number move sure us commercial reasonably that important able as that predictability. we're to we're on a by there and that. flight be basis to need

program to would So kind I'll airframe. from on from age, let use, guess, I think it's that's test flight of a or comment Eve kind of a Mike I a there. normal normal Swami evolution fairly but I low still basis, for an compared highlight hour's

we flew flight correct. the that's first Yes, And just last flight number in XXX. XXXX. was was its It's

that So airframe the break from of airliner period. in we in be kind still or probably like an anything from an perspective

has one. So even really though when framed we're maintenance cycles. about about something it inspection still certainly But time I terms profile put when monitored aluminum talking be an comes by over we lot composite which it's lifetime. its advantages is a think aircraft we definition we a expectancy don't talk to fly cycles ongoing or of that some and is aircraft And addressed needs what to certainly unique a the life of in these

doing don't schedule, the can little. or to see. be, parts see way the you want behind as don't so of correct wear too program maintenance problems schedule, the we're would will if that cause monitoring we to that if an ahead examine do where that on and they'll we and that over you're much this engineering on schedule, how assessment along be adjust life want And have you can and over so is over We wear what either, to you side time, tear too fatigue our based to plane, and

the next And and the as spaceships, you basis. really them environment, in that and new through actual learned the this we our this same even those we take design of the will But maintenance don't we so about ongoing, that have continuous many class, talked improvement faster to ground on. that's is of those program, motherships. unique the monitoring on And models And terms all put able then and on. part put hit we'll lifetime be the class, feedback with as next upfront, as a while hours running mothership lessons Delta well come

Okay, great. Thank you.

Doug. Thanks

from question next from Poponak Your Noah Goldman Sachs. comes

open. is line Your

Hello, everybody. evening, good

you? are Hey, how

I'm doing well. How are you?

Good.

the issue specifically is? what What just specify addressed? needs to you Can be maintenance

Yes.

a looking stress call or a we're at we items. specifically So what fatigue basically

ages about health address and sure we like of over couple we how lifetime regularly want it's all And terms we time aircraft So that basically, that We common vehicle the and and issues and talking how evaluate to systems. to we just pretty items see were make a there track the we of monitor in that. is these update.

to we based these this these So modifications fall. But and along here, we've recently that. do double observations we that like need recent than place don't some items have earlier plans maintenance some what in the to want go something on schedule to cases, track we check now to in issues, sure is already identified make we flagged do follow right

fatigue long stress. to that's at we're So basically relate that items of looking a family term and

again. need to you or doesn't addressed terms want that it sure flying fatigued enough just be to make not simple in So it's before stressed

Exactly. to way simplify. Yes. great a That's

it's an place those when either So you Every model airplane, predictive do a need natural fatigue maintenance. spaceship, or where repair, have tear thing. or of upgrade things you and to that item, and is, follows reach a and it wear and a whatever is a whether refurbish, preventive

priority. number the up we the see manner. that safe and the that safe extra need that's day until we will go now that's do to right going this do flight end that all this determined one of taking But dispatch of set the time what at is our If schedule to like date. before in purpose had is an predicted it check to accelerated we we don't is and so we're a still valid And exactly we

as time similar or issues to would amount stress address reasonable of normally the this. fatigue such it What's take any

of combination. of week terms on a that analyzing very Tuesday I probably we think the involve we're assessing flew we One in and on it, and inspections timescale, given short that a did last just

things non little techniques non They're through kind And you talk to look camera then ultrasound, into inspections scans, using MRI inspections. would a an inspection bit allow doctor just using falsetto, visual an to destructive borescope, resonance of destructively a you techniques, and that, like or So the those that me let it's skin whether a combination about places. scan a video the like X-ray. go of small get or

we those an map to look that have of but absolute a kind you're give use comparison for so combination you value, last the relative two to only Those you a of do image scanned techniques. the and at time then And comparison. you results not looking

it our into it turn order to answer. gather takes back so that the of plug model, and So get week analyze the or a data, on around it, an

So an of us that's to why last and is time which today give update get give that this earnings week. the unfortunately, answer why the enough call didn't next timing quite come and flight week we'll final to

And actual the maintenance? what about performing

assessing what that of will early little think part we planning needs upgrade. that to to of part how do either I too a be this do fall. know do to For be in partially early that or that, we much path And the is. this what of were We done decide

Okay.

from of Chen question next comes from Your line Oliver a Cowen.

Your line is open.

afternoon. Good you. Thank

program? how flight your might innovating view, what the that that on your from test you consumer FAA from architecture are of point ones did what Thank set and and Regarding brand how, brand point the architecture apart? regarding you'll thoughts the a view approvals need be of you. an towards you're intersect important Also with yourself and

in I take two kind I'll the license case the our have But with FAA. So on miss and we FAA provisos Mike kick one commercial remaining something. of

complete thing data we As as set a goes We cabin the And the space. that. all of They happens kind that's we data data of to that flight look flight next around. to in to to as know that into do on turn it and they need going gather we that this space turn next fundamentally really we itself, some to nice well will do. and then data set only will it need it the be FAA to in need, we that's And hands what flight. us front the know the data But data to around before, it that that get the just in to they to right is, that set back so turn have now. of there. in know FAA. We we the we'll we're complete And expect said the get

expect that we to flight. So next this do after

across off kind we've of Even have even a will strokes, going in come to space. it and to very our the here. of doing and as But in moments how exhilarating. flight the though earth, be Now the think are kicking moments This weightless. looking to are will we will overview our we we kind unique the is in our minute brand that to and course what transformational, up incredibly consumer brand weightlessness, profile, back relatively and Virgin of establish be to with be way XX we will great to that of experience we're astronauts. I though horizontal will takeoff the on horizontal we Galactic of The very landing, flight be be and fleeting. a moments this back spent broad with lifetime are the got to robust a going Because the focused space architecture, place providing

moment we says prepare be do will so their And the and a that we're that the are the do forward and view both of that so kind ourselves, And share we talk in the looking about our that work so such emotion memory core, they of so we that way brand for a they we the lives. ourselves this go way art rest becomes behind we how to at actual can't is of that we of but will ready forward. to of There help that these market that the astronauts and positioning, point lot deliver. taking that strong, that take will science consumer bringing experience in the

us see that confident think We you'll in flight. Richard the very be appropriate think time But to the that's the talk I around it area the will about bring most Branson to for that will market. our them. place and be how think and in go we're we and Other unique. sustainably we're will But deliver will in very space to differentiated. excited people space we it

first Thank as the what but get asked flight, very you are we'll of reevaluating know within within next week, you're and now well control your control launch analyzing you flight? the into some I that test of like the of parameters that first and not for update helpful, the launch right parameters way, of in your some articulate the timing as another timing

a Sure, here. shot I'll may take at this, in and Mike kick

facts. the off run we'd think I

what's So on. that's going generally

we inspections your and announced on So October, this is will on evaluate ships cycles. based daily maintenance the planned data be components ships. what planned analysis upon we of do they these basically see And cycles, also the we various one, enhancements maintenance things way as then routine Mike maintenance We've in the we said, of have fly. after routine the

So the over our data you of ship. look expectations. make If move data to we that. technicians, compares rolls the repair says, expectations, If of team a we have here, piece whole maintenance assurance forward. team That quality they our data then we the engineering a kind against fantastic. our that do that they're matches need And data into

that not. our just the maintaining answer and practical our in And to then as aircraft control upon anything forward there? spaceships or in control what's Mike, go we don't with facts safety that based want and so add It's business and principle, of to guiding see. not we you'd I And then all over your mean airframes time.

data we Michael, leads factual on Yes a I Well, go. us we very based hit think where decision that. follow definitely that to a is the rationale you've and process

checking, bounded? understanding based we're using problem into a the these have model wrong? All good to Do if So test? physics it of grounded are of those what play. things the like we Is comes double Is assumptions predictions? in make that

rigor apply in the lifetime, to us to cycle, says, have in going So we along fix which last and we we to know against, of variability put standard, choose we there, have is plant. some versus a this we get can one that that just the mod

variability and head. is So But the the there's we're a and to flights of going really day, little there. repeatable really, reliable the end safe bit of at where

facts be the control So pretty and yes. that to from have I our and that drive long But and in choices. will think not control term don't decision straightforward. much what they say our in I short are our what's will

Thank Rob. you, you. Thank

Rob question, last take please. one why don't we

Certainly.

from Global. comes from a of line question final Pete Alembic Skibitski Our

Your line is open.

for XXXX/XXXX, amount think think are spaceship could take ramping how in guys. time. talked spaceship question is flights the with in rocket maybe here. about Hi, everyone. of new as and I to you're a We've plan the wondering certain of a down the about basically us one you to level me, every time afternoon, upgrade Good propellant. it reload if us manufacturing the your of But lot the kind gives for a cadence Just I'm kind But you? call Yes. on the

volume that's the process. to maybe it and seems so a of kind the be manufacturing like volume aspect going And to highest kind flight of high

just aspect you're program So and guys is many you to that on because not seems risk rocket on like are But there love as your I that kind how people just that propellant many it cases program. retiring you can to. of thoughts from going about that the of that go there talk through the out plan

have And basically we is what like and like, can motor. move rocket and quality bring is configuration oxidizer in. Mike looks replaced and great tank confirmation we And nitrogen part confident as the very its we and a I this evaluated as flight the kick extremely against have as and our has that and robustness. where down. move the we really that free each I'll a are propulsion because thoroughly an we've a is look is a environment operations to burn. liquid feel in do the I move basically settled we often through a using, we test us this that use got motor The start for know we oxygen itself. that used commercial a to It configuration solid what system, is that's Swami manufacturing our going factory do, how that been and cost Sure flight after we're from real that over setting motor opportunity one will we system and that scale hybrid propulsion shift includes into up the

basis this and that add improve always kind factory will forward into fundamentally Swami on to shift evaluate goal of to while our a to we use. looking, that. our anything of to cost we're or drive So the this to we propulsion particular case, down you'd mode continue Mike more item systems in that like

and how motors strategies. just going [indiscernible] from and the of gone bring vertically of rescale, where from come when fairly down in, things. and like is of What an I've that we're and that No, rocket sat different team construction a build we to at materials bill management about outsourcing integrated look together and really I've since through that means supply strategy with base, the the these we're conversations each strategy have we the

Once the rocket each and kind Now diving how the partners right to intend the put driving that. it I motors. well. emphasis But to is the want on it's of in supplier [indiscernible] we're and we're sense a on we forward from at make then They're scale have of yield next per I'll But strategy for sure pass what going here. high the that's fairly of and commercial we COGs supplier probably to the assembly to the of quality, curve position most unit going out just come I'm I best industry it's us techniques in I prepared role appropriate that position products. those into and expected mature first optimize get would would factory have looking the years. the picking so over to in few that a of to actually that flights get

sure I've the something seen we OpEx right now we the what making make to deals is get right Firstly, just for suppliers going want.

Okay, thanks for the color guys.

over turn closing session, Colglazier, Q&A Mr. concludes this call And comments. you for to the Michael some back I

Hey, for flight look And we thank our those for week. on call. had continued who next your to to appreciate in you and support. listen. today's status the questions Thanks for forward interest all we updating joining you and We joined

thanks today, very Come for you So much. shortly. to back

conclude does this Thank you And conference today's participating. call. for

may now disconnect. You