Virgin Galactic (SPCE) 9 Nov 212021 Q3 Earnings call transcript

Good afternoon. My name is Tania [ph] and I will be your Conference Operator today. At this time, I would like to welcome everyone to the Virgin Galactic's Third Quarter 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions]. [Operator you. Thank call Investor conference Seth Vice Zaslow, Hosting will of Relations. President today's be

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

Thank you. to third XXXX quarter everyone. Conference Virgin Call. Galactic's Earnings good And afternoon, Welcome

Chief Officer. the On Colglazier, with Douglas And today me Officer. call Ahrens, Michael are Executive Chief Financial

questions. and remarks we will for from call Michael Doug, prepared Following the open

Investor Relations Our was our is about available hour an and press ago website. release issued on

As slide acCompany remarks. this that presentation today's will

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

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

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

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

in our world. and crew July, important moment the with This August, with has everyone. the reserve predictability to In an cultural group has community. millions cabinet. vehicles spaceflights this and that early in our first in commercial meaningfully Galactic of high global line. Response quarter threw fleet October, first cadence began In a our a from and in There's service. achievement of space enhancement the phase tuning durability, hand-raisers, right our exclusively us. to for fantastic. full great to for flight reliability of fair and we Good busy tens selling incredibly around group And a we A the from be began Seth. afternoon, Virgin we enable Thanks, improve been been period,

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our reservations current made $XXXX, to It's similar from we the before recognize sales filtering with also they our value community. price. our our holidays, been the results early is fair indicate a updated group hand to using modest, membership out and As the We become pricing channeled strong. fair early placed the offered whose will Each information, non-refundable. noting the spaceflights from first chance XXX and a when of includes made when Beginning process available. reminder, risers of announced this that with a ticket deposit, a overflow from before indicators access a refundable first of plan September, is are small that efforts remaining spaceport that they our who to slots XXXX will significant space initial in price will appeal to little at space be other this be of [Indiscernible] $XXX,XXX space -qualification sales into incredible QX, which deposit seats at seat. The Since reserve showed fully these believe the group a our The points. early in group of became in the originally approximately product $XXX,XXX XX,XXX had deposits than flight close and of fair program, to who the have were They astronauts. available. inquired purchased hand-raisers pre early demand people per more members worth group next this our first about new given be people right offer of group a contract new strength $XX,XXX these X we We relatively X,XXX

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original in to long they us X slide as will changes to our modifications backlog space of work for the We unlock of to These Unity. has These value here just to our routine where picture the years, the for the already part impact designed shifts. and Eve. begun. enhancements fan beautiful real is demand work Mojave. side, in On rate Mothership, each our primarily on The of our and in set moment modifications you recently through to back Company made aspirational flew our shot by our facility proposition recent to a space business New model. Mexico on a Mexico Moving Eve elegant a New as 's meaningfully lens vehicle. X is. performed that to in was the from favorably enhancements taken of to be reminder And and America with watching a business our It's from Mojave flight access through plan just to even allow Eve the majority take Spaceport a talk flight of will increase system are Slide flight capability being how manufacturing see

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to the exploring In We've facilities, in we've to design from space conceptual been our states. contact is more at Delta Mojave available our house Class will X least about municipalities locations we at spaceship addition interest have need factory. been received options and multiple as work, than with

more interest be that creating will community to are and estimate XXXX We bring. new the opportunities expect expanded as footprint our jobs to than grow, relationships we'll we new forward and looking

without new standard. to for need negotiations cost on relies realize industry relationship we allow third-party is of to beyond. next-gen additional our And for will production We're updates will increase strategic majority mothership's speed-to-market the add parts sacrificing memberships. mothership's will the quality on expertise we primarily As mothership spaceships, and performance. airplane efficiencies fabrication. both benefit and the us provide which calls. or technology, opportunity meaningful This Since our progress the There's from for in us our Delta future from and advanced on of new Class on we

second Regarding most VSS Inspire. our We're vehicle, X continuing path to spaceship evaluate the over. efficient

term, immediate now commercial scale, Our on for is of the towards directing our and calls. and next-gen I the engineering and priority simultaneously in expanding the while Class We'll Inspire earnings Imagine, update. service over membership. are update turn Doug resources we financial Delta development will and our future Eve, to in for you Unity, the team call

everyone. And Michael. afternoon, good Thanks,

Turning slide to XX.

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

come. strategy. benefits the continue current enormous demand, demand period expand and life is In fleet years Increasing flight As to meaningful provide efficiently. extending you rates the our to is objective that critical Michael, our heard element short-term, to enhancement our that fleet, of spaceflight for the our from for a To to will services. of service begin see address we

it work to phase us the year. this We of commercial of closer start embarking next service essential are pleased to be on as brings

phase, In expenditures period, noticeable we a quarter. completing In thereby are VSS to Imagine, fleet. increase enhancement second next the adding addition, Company's of this in a you'll see connection our with the preparation spaceship during the

namely is further XXXX our mothership. our we of enhancements. engineering second that development We spending half these be in activity extend focus of plan as the supply our out, As Class scale tooling develop the actively the complete An shifts for looking level chain, expansion also in Delta the planned working expect fleet, into and we to teams, continue will on concurrently, level multiple on next-generation we expected new elevated of and will elevated XXXX of to we as vehicles. engage

be our overall Company's capacity meet transitioning important We flight are demand our to in to services. for our scale the to excited journey this phase to space tremendous up

these We share on expect to on programs details future more calls.

Our Balance remains strength for us. of an Sheet area

and We $X are the quarter. marketable well of approximately third billion as capitalized equivalents, with of end of the cash cash, securities

forward, to flights, as our a use opportunities business. Going scale to and we as capital as future of continue to evaluate space our We from capital combination of strategic raise we will cash-on-hand, well inflows plan revenue grow commercial to objectives. fund

was cash million which the The the $XX variance our negative to third Both Unity of lower guidance our in results shift prior to period. third due of $XX spending And year program. was negative as review in the compared Let's flight the XX for forecast. Free for timing flow of the to guidance previously $XX quarter. the approximately the million in negative a million of well than primarily enhancement start resulted as quarter.

higher-than-expected reopening private We also of astronaut following the reservations cash sales. of ticket from received the sale inflows

we related the $XX primarily to expected programmes. expect the in Company quarter years, million. the The period, range to activity spending relative as the of by in -$XX quarter. increase cash well with on public driven Looking to ahead, we're work incur free as also I the mentioned fourth Consistent to be to Mothership we prior increased in flow quarter in is performing the anticipate certain enhancement the Class costs Delta third

our quarter of contract XXXX. compensation GAAP from was offset system. to an to to offset net Unity to space activity The marketing-related costs million, of change contracts in I'd progress well million Adjusted due Total reopening by partially value to $X.X completion services. the a in XX government labor hand the were to warrants, an and was loss on in related decrease $XX and XX year to for related back revenue the million, Unity Total the compared the with expenses milestones $XX EBITDA attributable like decrease sales, the in in expenses million, $XX spaceflight as the of $XX to period. as These of prior-year million an spaceflight the XX compared operating in stock-based $XX year period. was technical of compensation statement. the to call compared million non-GAAP generated negative $XX by now quarter as earned period. a well in of expenses. loss $XX loss under partially July, third $XX associated the in Turning to material increases development ticket costs, flight net The increase the million the employee quarter were revenue as The slide increase fair million, in prior increase certain to GAAP income quarter in the third to and expenses in payload the of expense. million attributable from compared the operating costs Michael. non-cash sponsorship negative in for primarily stock-based prior was third were

Doug. Thanks,

moving our so I'm confident industry Before our a that you Q&A, want about observations future. I leave reinforce few why with on to to

First, foreseeable supply outstrip travel future. for demand will for space the

finally, to is sale. the a space flight, What good But of entire in space. overall. a helpful, to are Second, experience, we to truly doing sector. right And their industry moment from for we're the hear not selling different but differentiated the is the just from we chance consumer approach, much than more success others are have

a our that It's desire join For convert this followers remarkable. future strong Company, exciting the alone an there's continue and We've long-term strong. evidenced our astronaut. Our and meaningful ability continuing, to is community into to as created is find for by we vision that time to

Operator, making progress. begin turn are With the Our of portion to to clear, call. questions. goals that, question-and-answer we're ready let's are meaningful the

Certainly.

your before begin [Operator [Operator pick now We a to handset question-and-answer you're the Instructions] As session. using asking reminder, [Operator remember your a question. up speakerphone, please if will Instructions] Instructions]

We questions to will pause in here briefly allow queue. generate to

The first with line of is Chen question Oliver from the Cowen.

You may proceed.

ticket we look as formulate What the the Michael, you construct have aspects challenges priorities flash key as capabilities there. you. supply-chain terms really balance in some there a Thank the some magic be bigger the And and and important. of you robust are the will side the and What very and opportunities were supply and of thoughts as more consumer the sounds pricing as your think and the like well-received. about the as it thinking experience, Thank going and logic how you the sales very experience magic consumer broadly friends chain Hi, more here, incorporate well are on family of on forward and broad you will you. about opportunities? ahead,

of components supply Thanks -- heavily organizations different But mother on aerospace the the one flight the supply space integrate within chain, each chain chain. X the spaceship, first I Oliver. supply aerospace To our will think There's and ship, to system. ways. those the there's system. of our propulsion in And approach our

as engineering that the tooling to we in So advance strategic for well both development mothership, a pursuing kind and of and of the relationship, manufacturing accelerate assembly the piece. then are actively as

of standard aircraft a unique, are It's more are well very there. but clearly, supply-chain we can you as mothership's leverage aware, piece. Our

the into with very go some way supply scale So sub-assemblies that chain opportunity heavy more will we're supply advantage aerospace now, to making we, on have taking the With be as spaceships, the there and very our system of that. that progress been for along be -- pleased do sub-assemblies we've can the those with and large more the for parts leveraging it chain, And to greater supply and us goes. both as for of allows volume. we

brought really our And supply and our advantage chain subcomponents base she's take business, leader supply of chain in propulsion, through efforts here. then gone thing. same also heavy So spaceships There's quite -up deep started time there. a will system. in material new a and propulsion She's our experience, aerospace fantastic, with Honeywell for ramped and jump-started has Lisa. and some great We

with As wonderful they logic, just bit. us -qualifications community. part been fair group. I our our very work on magic the of little space encouraged the do along from and response to are people, Like were reasonably, with to a pre But said, we for that little the who

And the so of group price really to be that showed thought value points, around we the just what XXX spaceflight at from doing. reservations new we're

expect to to the the and Now, do been preparing this number today, the the of that. along flights family stronger, we the as of will only you're saying is friends start happening for in experience talk price passing of strategy what's bringing multiple the next we -- up kind as friends and we're we work, day didn't having consumer family. incorporated work We'll be Oliver it experienced seem will embedded their a we where do astronaut quick is to kind word earnings arms that campus. very people going way astronauts of going where the includes And in the and is be some and where future come a smart like are scale bring we flight. a astronauts of first That is so I raising -- as having up forward talking generally after looking We place well, make and most to to expect about close to for with their I'd parallel as days be parallel That to business point at bring We think and developing just the in calls price not is succession, but through go family. the experience. the much bring ability as exciting. about on the within be they that to tracks $XXX,XXX come the that the that before that will in. that people is in friends into we point think

on that good in and future more come to progress one So calls.

Best regards. Thank you.

Thanks, Oliver.

Thank you, line from The Mr. of question next with Chen. comes the Doug Bernstein. Harned

You may proceed.

Hi, Doug.

I Hi. I the -- understood wanted wanted to sure side. demand first I make

of out last about you slots that, pretty had seems of expressions then the you of the added It you So seems, you work? and XXX XXXK. XXX that XX,XXX But that. higher have not that said could does XXX perhaps case? you've point How got price went well, is it filled up naively, easily since interest. to Why originally those you've

agree them. of And how each with about to generally, And you. then think I

positive are be will which service. on versus our optimistic thousand last first filling the We very and thousand,

reservations first is?XXX? And this. as that, beta CRM that space, community,this a did And audience our back effectively fairly Fools the population we on They have brought test. we we we used a was So, as discussed. small -- test use bear quite right? against to we We process, to fair not go qualifications sales to qualified are thing conversion of promised, it those with flight space efficient leads. test we've path. would sales the the committed use The take in reasonably highly group a move rates that customer strong. leads we still lengthy journey invested And actually the from for very very into time -- was able where fairly to calls is kind but to to

going that to how conversion great we Another CRM the thing pleased so did we like are And that that along we level about from saw filtering. the mechanisms forward. way, our right of

of XX, interest Now, following kind just Unity separate that we from opened that. spacefare up group, list, our

spaceflight, to that involved. products, flying probably them, bring Just with now interested effort as apply interested learning [Indiscernible]. the XX,XXX kind of make of what's the in all about mechanism, candidates customer We through we CRM at back and the of they the learn to effectively the the high-quality information, [Indiscernible] in actually be journey the of our individual put space. of want can you're trip hand those I'm your your But think about some raise people if many to will

have we converse enhancement program That's We time be So one that's spend and will into And to and where for future we time know people purposeful quarter. this spaceflight each on know in X up emotionally in the astronaut this of front because do reason we it. starting what are how people to being to we to pace, us. fly will fourth onboard that's or we're the preparing expecting. we service important the we're community, expansion is X mentally and of our months got the is we've very, very doing that. the these The

do So the people going with we this are your say what that's point. time we is this. Well, to fairs. we XX the of why likely I do have versus much demand thousand space first This expect to will to have started more take space which and to give that's so, And XX,XXX we or first have access of overflow ticket. will XXX group into first a then the that our remaining demand in funnel new we left fare the we thousand. will tranche And group. next group the

to sales in the always against can the always But funnel. tickets put and the this at released tranches dedicated going stay we pace. that so top effort ahead of we're So of stay then active

XXXX intent for if do next as the flights before, for before have then And the about XXXX. mothership on Delta about XX schedule, Class can I been in the talked the it ready understood you've and then Delta I Class, Now, the has to

change you've you've schedule to has development of about here. that in default. got talked things you a the How the lot center, seems the do and also like Given some changed new that schedule it

which be go really the [Indiscernible] that over way to with we've prototyping last of is this, in able the move the up of Here in building milestone now the Company Company it's spent [Indiscernible] work, the a done maybe all long-term. positioning to both off which the phase months the teams that X we're to focus focus, handle can a done value a, after is of we during prioritizing

the for ready we're So work is of that coming. amount

the onboard of what 'XX, in which to As expect is, commercial will we service we've end coming to give Unity, for tried 'XX. be

flight as into with in it over -- get what its We a research then second of using test program expect. Imagine flip is will those flights. basically and the we expect be with research 'XX. will monthly flights 'XX, from then into first half But fly That basis. it quarter will on And Imagine, start astronaut will of private we be we revenue-generating the to

So expect twice basis. every to -- a of a and Imagine, we month, on think kind two-week we run

providing to you is what program on Class. But par there. same that the other with flight you the some development Delta So rate I aircraft would rapid timing ability tell with to on mothership in?'XX? the on be some do guidance Delta on calculating programs, gives we expect the

why see new up design out at you us So why the will supply what's pulling it's Southern see us down in off in relationships chain engineering right you the down we're moving with center strategic expanding our some pace. basin us That's la resources. you ramping Why our see bat.

All of these are and to in order. get going this strong done work

very Thank Okay, good. you.

Doug. you, Thank

Thank Liwag comes Stanley. you, next Mr. from question Harned. the line Morgan with of The Kristine

You may proceed.

if back we to the you we the question can Kristine, mute. comes Kristine. into are why to you're on queue, go and next don't Maybe back Operator, Hi, Kristine her. there? come

Certainly. The is now on line open. question has next so the again, the joined your Kristine is queue line. Kristine,

Kristine. Hi,

can guys hear Hi, me? you

can. we Yes,

for the with Unity cash planned timeline and you can requirements discuss investment that of Michael, the and Hello? cost? the the enhancement cash enhancement, just expansion, fleet the Eve

itself So a enhancement amount that Doug enhancement carry I'll manufacturing it. to our going facility We're we're tick That what and program's of program. this half the quarter up multiple specifics And in any spend the next year. a shifts larger seeing But on first go into kind out give doing all to of right? going fourth way the makes working the maybe in the just let sense, note of behind as to we kind on we're your giving. guidance is

also in and you concept the moving where to we're our and Mothership up tooling, that's the 'XX that's efforts, those design continue into that and heard as sharing to moving expect and level ways happening, we're of spend Doug design into then beyond later into paces. So Delta elevated that into building have which early programs, we of gut the accelerated going course

let So a that anything from specific you'd talk was Doug. Doug standpoint, structural want maybe I'll share, the piece. further to

investment excited into initial chapter yes, the then be fleet get it's Mothership see forward. and now with really part, investment that make the artifact in our of fleet expansion of That's this Class. and we towards as the average go front next is which the forward in time moving then design think copies because there new have important the that invested roll I first at think phasing this you the basically, geared with as we the we in the you've it's about here to end Delta we work that to and But, and that NRE. got we're we

you've assembly. front-end dividends So into got base. The development tooling pays and of as NRE start you mentioned but going parts supply-chain into that got Michael for and then you engineering gets get and phase the years, sort the investments leading fabrication that to

reentry. but be in end order, on the that front traditional focused So phase will mostly

you building up the in VSS build of maybe going understood, terms What what -- And make you guys Delta? here that already. have Inspire. to see. maybe or decision was spaceship on I From parts the would following straight from that to what I Imagine tree

Sure.

get So with and been which And have we have XX% areas: about program, capacity of have to the for will Imagine enhancement now. first, clear Mothership priority commercial, of with the parts through Eve, the two this our getting it priority greater Inspire us that's to completed. is in

our while we're then here, mentioned, That's production one [Indiscernible] focus. now. it, space. right a to Mothership right. of new be on as that's that the the And to priorities going Will that [Indiscernible] we model be, copies, those are an So Doug at a clear rate period [Indiscernible] much begun our go will that carry making main was higher with Along in through

And so then allows Inspire us an optionality.

assess taking putting we're go our when right as clearly we forward the our time ships, now those to and so Inspire. And fleet. and X well But into legacy where to efforts as how with future are

Thank Great. you very much.

Kristine. Thanks,

next line the Ms. with you, of Liwag. comes Bank Thank America. The Ron question Epstein from of

proceed. may You

prepared to of a -- just the remarks. So some a maybe follow-on

I thinking thinking How finance you that? all about? capital You mean, guys are you about potential mentioned inflows those. Convert? what future are help like to

the Ron, I'll so take question. that, for thanks

the for on, So catalyst us think some into we're phase going to program commercial going got And Which enhancement provide our an service. great for headed activity. important is, we've of I getting Company. ready

our next-gen got also work Delta going Mothership expand and to on fleet. You've

we move so So do now, our to Like cash a of Company forward. Balance for and dollars on good you we those catalyst be have keeping expect billion equivalents in on, the Sheet. and mind, as

spaceflight already, got revenue we we that, it's have know a you've this for those deposits I runway get to gives at that. that to But need look to work. starting and before about multiple do we those kick There's equity whether the that as all great are go to us options. point. available or So ways closely debt, to us more in we'll

be a just didn't then manage? chain. guys your hands up are to ramping dibs the Manufacturers production with typically get the trying How that. does ramping. on that in where How And trough. your are the In business the managing big phase will at you you all maybe business, supply ramping basis be follow first of any gonna chip. like the probably be will or a similars we're --

you do how that that think risk? you about and manage how do So

as you're of things well of But chain to that I air. forward commercial needs somebody think that with a we're doing who it's [Indiscernible] And volume really aware But business supply that just versus a to wide and goes ecosystem category. their your diversify partners supply with to partners what lot of are excited on looking thoughtfully. selecting focus giant there's in chain

the the and extremely those partnership most management of with really critical. chain the with active. really, is And efforts, intend we as partners quality supply be in ensuring to that Now ecosystem,

for on you're So we and the see quality we things front more. do well supply economy's looking response do efforts be not be and raising which there. we're we're the still in and in us. supply supply but we to no capacity coming think back. working to present, We the just team aerospace to plenty do what chain supply Is volumes as to interested when just us of in be are have we concerned who enough pieces, different that question aerospace it building We've our back, We see the suppliers I options thoughtful think the area. with great chain the in be seen or they're we'll we're are intensive large both going major for But will as of that partners doing coming very they're in

just then maybe it. And one. last Got one

in programmatics do changes cash expect going when you flow what's be the the all Given positive? to on, and

the really our be real significant key the to in the the point which of think in about. ramp will to that that's the cash inflows, [Indiscernible] So kind increase of time Delta Class

Got it.

from next Scott The of question comes Forbes Jefferies. line with the

proceed. may You

Thank Hi. you.

circle of to to side. demand kind -- the Just back to

but the any You around and or any talked in impact about have seen of pricing, there been from flight change some demographics positive conversion has updated meaningful the feedback delay customers? you your

see. Let's

shift -- individual we're flight, in just while I future delay, in our not for will base impact schedule. our the to clarity, call really from movement is astronauts of it Unity that First flight, seen the of have multi-month on or any we deminimis. existing XX overall our the even one program move to And shift. Unity XX, just The we actual shift demand

we So -- Unity will when the by Imagine come XX The is. isn't this impacted [Indiscernible] onboard. Delta Class

future flight impacted all. building the up this capacity much at by real So our isn't actual of and movement of astronauts

next impact was an group XXX was, had say even We've hand part question space our come the from your haven't from that was one We in we're the fair outreach. standpoint. of a what there? raising people before that Scott, seen and I'd so I'm XX early. are Unity and -- -- So on second was And this board and we group, then, sorry,

the in we'll of future but enough more close So go to think and is this back and I first relevant that of the people. start can I data will some XXXXX we of front data to we kind XXXX sort where it have bring on as have calls. probably through next it, to demographics That's through go then out

question. think good it's a I So

towards you've quick I kind where from a unlocking well they through of And mean, pretty the and to development arise potential. learning been do overarching risk see these navigate issues as curve full-flight able largely follow-up. phase. as you perspective, then you on yourself But move one this

focused at here, bit requirements put, going been. along innovator, a commercial a [Indiscernible] this space as for the where [Indiscernible] important a with And the I slide scale really and is, fashion. enterprise, think, is This us. this talked as with prototyping global which beginning Company to a it really more deliver is predictable has of comes from in more And [Indiscernible] we period a even on I about front the

we've months. You over X see the done the work last

it's So this. towards building on scale. been Company commercial the We focused down

So, Those period be good long-term [Indiscernible] are We're very up, ships that really or [Indiscernible] Company's basis. decisions. the inspections our where a multi-month these example. as a off And to taking [Indiscernible] take prototype to moves -- whereas a here can just organized both they right? flight-by-flight

our focus, long trying to And in. create the the All of really that coming is added taken to on strong then term. for move leadership we've Company decision-making value focus to

we're have -- now adding that. We to

And that get this periods time cash those underpinnings on to where feel that basically period to technical we that's business. commercial was at moving phase. that feel how we now confident the cost the of the flow-through risk in can happen kind the time is the to in big so that that allow basis moving getting effective on is this was periods side baseline can of design worked deliver very through. longer system really Delta forward We to Class our we now we're chapter technical grow what So, because that first we're of very confident

you. Thank

Thanks, Scott.

Thank you, Mr.

Truist. Ciarmoli with line next The of from the Forbes. Michael comes question

You proceed. may

line Hey, good evening, taking the Thanks for Maybe questioning. just Ron's a guys. question. of follow-up on

I you NRE costs earlier commercial on these all NRE are potential Are you some and think risk? mean, contracts potentially chain some mentioned just out guys you suppliers? and negotiating supply to the of basically I bearing you these some of how are On farming securing take with maybe partners, costs.

some a options unique supply accelerate we it our unique around some property that it is the core of our part, our is there some choices does intellectual It So I spaceflight design. less have is there, Mothership. the help and that of approach think in -- can system. But and there's functionality. chain In

can parts advantage so all tooling as we on that's so, take manufacturers, assembly well partners, and And fabrication, as of that, engineering one. manufacturers, that

the around will with then, around of core that to you the the have that and we there that -- we are and carry we that But design ends engineering towards we spaceships, is that, really to the explore, options that sub-assemblies love and wings-based sorts technology ourselves. have. are fact all planes assembly We On parts of and there's really final program. the opportunity of even as will pleased we the maintain fly

in propulsion itself, and those us the [Indiscernible] that spaceship say X lot of we between that, I hold system, see around the of So the a kind have, choices to think in but designed IP I'd In things. probably on you'll through core

helpful. That's it. And Got just think XXX per then Mike, -- I you'd mentioned flights year.

over the -- like of frame next to ships. a Assuming per dozen in how time mind you you need a class get XXX It there. we mean, flights to of Do have year? many seems when get ships I

in And the We've still need, the the cabin. seats is, be obviously reach double-digits. like that to think single-digit, Class of I the been said, low I've generally, to those using level But upon pilots to turn we're words X going Delta high that's expect depending X plus we ships.

Okay.

we when need Delta we the number the program. that's are building So Class

We are into planning multiple to that, line create parallel. supply eating production have ships a if will, where in line, large of chain the that with you moving we

so, And

Got it.

to moving some time. looks started we [Indiscernible] scale point, multiple what will allow reasonably like. do up shifts we And apart as be at a parallel But that one opposed quickly. ship through at That know to as the you us starts. that Getting or -- in that will months

Thanks a guys. Okay. lot,

Moeller The Canaccord. Thank is you, next Mr. question Ciarmoli. the with of line from Austin

proceed. may You

Austin. Hi,

RocketMotor actually Considering line there upgrading series intended the the the into to raise customers? Class Karman is the or amount time everyone. production to Good be any apogee going that the planning is the of evening, that you're for the to Delta spacecraft, increase microgravity in that above regarding

we with you that, along to when each program some And design there's us. have ship move up It going exactly components our we some flew to we get Unity in didn't place expanded adjustments the structural for the to strength from XB, and fun be think was watch didn't originally. trailblazers not of you original the doing And flights time necessarily -- typical the you end over the spaceflights the start it. the way. I that would in end spaceship want things flight getting areas the flight up make that of areas the as through envelope, it some as bolstering you right that so is test like in ship

in places as And up we And a interesting will then, in the apogee, test. think too, from question time so kicks take as all around only to there. that pretty weight will knew get strength better Imagine little we taking to was Unity over Imagine knowledge able where goes. it the watch be of I needed

glide warning, glide That's cone and on [Indiscernible] propellant the before in to just decision, the the Okay. the part very did it proceed interest Was unpowered XX. [Indiscernible] vehicle warning in question glide of burning to essentially engine the [Indiscernible]? all in as engaging you was try reentry cone the in Unity propellant how given burn during the up an with into with even ascent late descent,

you and perfectly as a flew XX again path on Unity our to So working space safely acceptable, all flight back saw.

states day provide response the here, less a flight that very flight the went I at cone -- went The expecting, rocket and variety particular train vertical that X so. signals As the variety The their last would within the the the need The seconds end come monitoring and visual way act. towards of of pass. on the the that glide all time be pilots, was up at visual a systems you're is, through, talking avionics work angle signals of as about provide a that on further edge back. energy way mentioned burn on coming conditions are of ship basically or for up who you came the earlier our light of lights it ascended to almost the to our that pilots so

and it above trajectory astronaut wanted the apogee was and that had space, already modifications they safely. the back to it the -- energy to up and pilots took line so at its the that time successfully And hit made make conditions came

respond we area not cleared airspace tried to that through the out As glide came or in the with slide FAA, of in as willing to to the again an ship have had with at -- that we the section that the which we down, FAA, call up And came that But we end. happy the trajectory, fly the needed were we was we'd now done. the that something with be trajectory if we needed.

guys. you, Thank great. Okay,

please? question, take one Operator, why don't last we

Certainly.

of Peter comes the line Skibitski Our with last from Alembic question Global.

proceed. may You

you Thanks. hear Can you hear Can everyone. Okay. me, afternoon, me? Good guys? Great.

We can hear you.

everyone. thanks, No,

that. about Sorry

the are back given on spend focus XXXX CapEx the the head me Let normalized spend question for R&D through to $XX or pick the quarter more decline up Quick year, even head spend The quarter, as going the SG&A to next we handset. million Doug. in into and type a can elevated you enhancement a period?

we some quarter, flight. recent did some have in reoccur, most the at things look like XX did there we necessarily Unity that If don't we around have marketing costs that

some as not into we but wouldn't some be think things rate. dramatically the But you again. of change [Indiscernible] of of not profile. booked there [Indiscernible] saw reoccur it's also G&A But a to some growth see same couple the those future rest I the the and in the so don't business, at going you certainly would We scale that

Okay. I appreciate in. color. one sneak the could If last I one

so don't pretty Just booking to should too get or flattish like customer are XXXX so on the in kind get it we XXXX? we Is $XX,XXX the of remain that skis non-refundable backlog basically to expect guys we expectation? until deposit, our late deposits, out far looked quarter just the late of ahead you

me Let clarify just the deposit. about

But $XXX,XXX the first of space those about then in been XXX the quarter. we And part for. those. this come flights QX talked sold approximately then or deposits reservations over for the and seats have we at So

Balance seeing reflects September, just you're from came and contract a there in as on Sheet the somebody what so with little what when -- lag you appears So of have is we when a just cash bit our of

should So jump we expect fourth the bigger quarter? in a

to per we flight. keep keep It'll because take these we're going in spaceflights selling and going $XXX,XXX Yeah.

Okay. Great. Thank you.

Thank you, Skibitski. Mr.

we'd point, Galactic Virgin and your interest to for joining today's this call. everyone for thank in At like

I quarter call. rest hope third your Conference XXXX you all day. the Earnings [Indiscernible] enjoy of

now your may disconnect You lines.