Virgin Galactic (SPCE) 28 Feb 232022 Q4 Earnings call transcript

Good afternoon. My name is Francis, and I will be your conference operator today. At this time, I would like to welcome everyone to Virgin Galactic’s Fourth Quarter and Full Year 2022 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. you. Thank Instructions] [Operator

like President the of now Eric over Cerny, Vice Investor to would call turn to I Relations.

conference third Thank to you. XXXX year Virgin Welcome earnings quarter Galactic’s fourth Good quarter and afternoon, call. everyone. full

On the Michael Executive and Officer; Officer. today Ahrens, Financial Colglazier, Chief Chief Doug with call me are

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

will website. Our press Investor are Relations available remarks release and accompany slide on today’s presentation that our

Safe see Slide the of disclaimer. Please presentation for Harbor our X

make certain on may statements. These assumptions During as based we today’s are uncertainties. forward-looking statements are risks current and call, and and expectations subject a result to

cause could factors forward-looking statements differ on actual Many materially from the events to call. this made

filings about uncertainties, by risks and filed information to the Virgin please Galactic more from Risk these the the with time SEC to For Company’s time. refer Factors in

cautioned and statements non-GAAP that update be on Readers call. also call. on put obligation the today’s financial forward-looking Please Company to discussed statements are reliance to to disclaims certain that will may refer any this the undue forward-looking information not during we specifically note

to would over With to now go like turn the that, Michael. I Michael call ahead.

everyone. I'm and we acknowledge host our spaceship Spaceport in started, the to today's please QX on path as our to is VSS earnings bring space. how first MSC I'd call, like to it to home back to get great Unity have afternoon, the Good mothership America back and

Mexico weeks skies to returned the flew to two the and yesterday. Eve ship back ago, New

of making XXXX, in made track commercial throughout and year. good we the QX on are progress for enhancements We remain service validating on this

with a X Slide recap brief on starts of agenda XXXX. Our

progress efforts, future readiness commercial development. our our on fleet into we will moving discuss Before

a before to to the Doug the Now to over call then financial call review provide take questions. opening turn

in and the the to X, partnerships investments will lead made into in XXXX, the future. us that infrastructure Slide important Turning we

as we near-term of to higher enter capability rates in our operations the commercial improving invested support we frequency current vehicles our service. flight First, by durability and

not launch is the effort spaceship secure We this structure which which altitude, connections cantilevered the and pylon regulates temperature, at our was gives VMS only to upgraded area in the largest the air enhancing mothership the The during spaceship wing Eve. of The ride the attaches. replaced and power quality, cabin to also it maiden data pylon a but flight. launch the center

originally and pylon, In new took and launch comprehensive horizontal Eve addition numerous the and All on we this made the we we avionics to installed on mechanical work work stabilizers, planned. enhancements to fabricated systems. than longer our

and The well us the in to of We shifts we am now that for ahead. completed these to they years many team appreciative work enhancements, I our incredibly for XXXX will completed in our have long play. hours return put serve

our XXXX to and major and in Second, enable we chain infrastructure bring fabrication partners factory our we invested design to ground experienced spaceship broke scale profitably. Phoenix. assembly our fabricate in spaceship and our subassemblies, on final also manufacturing on supply business to

of for Also will will We their prepare to the its their site the for Virgin journey as an for reserved incredible to kind for astronaut completed future design that XXXX, be the first exclusively Galactic astronauts unrivaled. campus, that be laid America acquired conceptual space. they foundation and our close we in Spaceport we astronaut and an campus experience for guests

operations. recurring operation This on our VMS of Unity Eve a three XXXX, term safety near This commercial areas first, of is current On space X, Slide as spaceflight and to safely basis. and ships, flying our includes the missions focus role our is VSS on we spaceflight enter team.

of astronauts, the regular third, role This team. spaceflight our hosting, preparing future celebrating for team. flight is ready customer in intervals. is on ships operations And and our training, role the technical our returning and inspecting our preparing, of Second, condition operations which

All yesterday, groups Eve space, commercial and In preparations Unity actively Eve at from Spaceport we the are with bring and flights making recent Mojave, preparing America. with service. launch to to reunited for three of customers these and rehearsing of weeks, are our we conducted

each way We modifications the made are ensure the have very mothership performance under with has pleased flights, performed these of conditions. flight expected real in we that which the

unpowered Our and flights, carries the Eve, high glide will glide releases America. include Spaceport perform in next of to the steps where the the spaceship series validation altitude Unity VMS a process VSS including to flight, an down

of successful validation who and of include the the Virgin process crew, completion based will to will experience training with program. that powered Galactic be we'll assessing components conclude those ground to Following a implied space our look a steps, flight verifying

missions Following thereafter. of the Italian flight Air and those regarding beginning research missions to with and the consistent commence the a service verification in with and outlook focus recent successful followed we QX, for astronaut schedule, commercial analysis regular flight with private research expect by our completion Force,

for these space dress full of flight and experience. astronaut repeatable by preparing seamless teams simulations, at agencies other with line control and government between partners safe and America and mission exercises, Spaceport our a validation activities ensure training flights, are In executing integration rehearsal flying to

after our operations customer team of working through a and experience astronaut simulations of customers. truly and the to And unforgettable delivery the The increased the an one flight preparing cadence experience is flight for rehearsals they America Spaceport is during kind. and before ensure for are

to share generation Delta development, X, and the insights next spaceships our Turning our fleet specifically Slide some Class to I motherships. like future into

program multiyear this with concurrently and the utilize revenue profitability Unity. key fleet long-term. is commercial As Eve the vehicles the development be for and these near-term operations growth which running our a Company is over will enablers production a that of At high-level,

internal spaceships Phoenix for time our up selecting our to roadmap and and in first teams. of our service design the at calls come in Class commercial XXXX fleet Delta future the about entering Our for suppliers XXXX establishing facility development was manufacturing our whereas off line our primary building assembly strategy,

building delta completing for now next tooling fabrication both parts ships. focused the for the the and beginning is XXXX on the motherships designs required generation spaceships, and

into and the will fabrication preparation Delta ships will in to is continue. next for commercial Moving sub testing begin expected in spaceships service suppliers. assemblies commence generation utilizing anticipate we XXXX motor our Ground from phase the XXXX in assembly Class for flight XXXX. the parts And and testing both also

conjunction that roadmap, progress In final assembly facility with we are Arizona. making Phoenix, on in our

XXXX. are assembly, and support currently arrive We layout the expected project the to working with design, production phases to through interior fiddle in initial of parts

drive our future. With will lead in are in business various to hard needed the teams that working the the scale achieve place, roadmap our the to milestones to

financials. an turn our update call now the I'll Doug over to for on

Good Thanks, afternoon, everyone. Michael.

and and financial for fourth quarter million, by results and $XXX we these. Slide expenses our are the the $XX of prior in astronaut to membership year period. quarter, with revenue the year, compared full to future Operating events driven Turning generated the $XXX,XXX, starting X fourth million

is tied of $XX GAAP R&D reported to and million in costs million work million $XXX future $XX our development year attributable fleet. the primarily increase prior in a net We enhancement costs. increase fleet higher by to R&D driven to activity loss compared a The for our period the

fourth prior negative year $XXX negative Adjusted EBITDA $XX in was the million period. the quarter, to in compared million

million, for $X.X and and fiscal revenue event For activities. of recognized future generated fees research we driven astronaut primarily revenue year XXXX, by membership

increase enhancement in were R&D in $XXX is our fleet and million fleet million costs primarily development year. support our due primarily $X growth. to $XXX $XXX to compared higher million The increase to Operating to an attributable work expenses increase in future to million, activity. our a costs tied the The for employee prior SG&A,

costs. year. million $XXX of loss net year $XXX to prior in driven GAAP EBITDA million million, Adjusted year, to was prior the a $XXX higher reported R&D million by negative the compared compared We the in for $XXX negative primarily

Free was negative in million $XXX compared Moving to the to the fourth $XX period in million quarter, last Slide year. negative flow X. same cash

in million For the flow negative the $XXX was negative year, to prior cash compared million year. free $XXX

but in business. XX.X Our million strength of cash, shares cash remains $XXX XXXX, ATM aftermarket, proceeds to program. in notes, generated We intend of million million we In the $XXX balance equivalents in part $XXX million as marketable securities. issuance proceeds equity and that capital gross an to gross issuance the in and prudently investing of strong, maintain while sheet convertible offering our

we outstanding million shares XXX gross ATM. XXXX, of utilizing fourth fiscal issued end proceeds At end compared the Specific the share to in count and was XXXX. quarter, fiscal to $X.X shares, million the at approximately our the raised of million XXX

to million For flow negative the first free $XXX quarter of XXXX, be we forecast of in range million. to negative cash the $XXX

to equivalent of each anticipate trainers, our any our flights As experience include programs will we mind revenue who cabin in recommending adjustments and training approximately in assessments service, flight first person six we that as $XXX,XXX. the necessary. astronaut making one of the the we'll are Keep of so ground be commercial based will recognize begin

research these one will last flights, equivalents. Unity carry first after passengers during This which in or will seat result see revenue four

As you profile and would the will the ticket of change through revenue later flight prices the reservations flights. that working carry expect manifest higher

that, some to comments. hand With I'll back Michael call closing for

training manufacturing the commercial that mobilizing XXXX a build focused future the line astronaut for unmatched year support in investing supporting astronaut setting is to world, stage to goals. campus. preparing our our fleet, in Thanks, space for for was service, conclusion, fleet partnerships our our commercial Doug. on anywhere experience In including our the We future unique current an

our that product. to to necessary are medium will deliver sheet fleet current investments we And the fleet our power to regular experiential long-term demonstrate support enter the focused progressing growth. our we our business flights diligently by strengthened drive plan Concurrently, XXXX spaceflight our capital on of balance repeated over in we business the We raising the development Near-term, future of long-term. operations. commercial scale with the and

Q&A call. operator are the portion for turn to ready we'll that, With the of questions

[Operator go Instructions] Greg of Greg. with Our Please ahead, line comes from Konrad Jefferies. the first question

you it The plan. granularity just accelerators Maybe good and thinking free level a in peak? is there QX and you've guidance kind Or similar about the peak usage million start, is flow XXXX XXX free kind some rate? of QX. QX there How Delta is I appreciate are the QX a for general of on to that of and the tasks is in just that run cash burned

This is Doug. Greg. Thanks

QX. $XXX cash flow So, yes, we of guided $XXX negative million to million in free

period. slightly on so, can seeing you of enhancement now just we're from QX. up that's is effort the ramp the the down see right And What

at there that while fleet reduced are area, development we're on spending some up spending picking same time the So the activities. the in

Class in the is work this So and out mothership so the generation the Delta design particular. next building

ramp. So because But that what thing have go is some be is, in we you'll we going the fleet increases, along infrastructure forward, there will we some to how the development, starts do that as pace flexibility in now ourselves have that. this to well as see and efforts ramp on with some

either down can all we increases, continue to it investments. very returns slow attractive while see see fit, accelerate we we these So do or as on of

can, pace those to into generate like to think put exact opportunity a number economic to infrastructure, because expect. fleet the With there So the have do of do invest shareholders. much I guidance the slow attractive you that. give for opportunities between need little But or directional the we in it'll as we see on it's on if all a to parts what the want spend. the want to we preserve and benefits a peak but something wanted great you we these to lean cash But kind moving to we returns we hard the as things,

away? intervals. that the in there that one you flight I to kind advance that reach kind regular of prepared And that. curve think you learning mentioned can of I guess slight or when about And you how Or missions? in interval? a do in far remarks, commercial first regular QX, appreciate plan is generating right out a of month kind you ramp

Hey, Greg, it's Michael.

teams would capable. to kind there. monthly the path on flights a group, in kind We to and baseline I short our kinks be reasonable a get a is them of think couple just their under to work speaking very see out But belt cadence of order. operations to technical I be that let with

learning of kind at being monthly of turn there's to how of just our three ship of to that way nothing out, the out or but specifically kind shaking consistent in two the basis. I think work on yourselves give and So kind operation, a it's cadence, a

now, that plans actually, rehearsing got So ships we're we them in together. our we have those now place,

to kind and we on out, flights check few target. a it be So should that of

mean, kind I the mentioned And then one last script, in I one me. update you for imagine all that think of or about spaceship? any there, how don't thinking that you're

last Yes, same call. as where we were

for First members of leveraging just team is work, two all get do this very create space, to America the power think our to on hitting world incredible with do right? people, and to So and product. so and exquisitely just the flights of unity, be start I've primary experiences I so specifically let's showcasing back groups that's Eve safely directed powerful to going mothership to regular Spaceport of

that's one. So priority

that's Company. that the in the to Delta is going relatively That's the And so that to and bottom vehicle a we line. production And that's drivers in create priorities. getting bring money support onto those the the mothership. I've generation work two Priority costs moved for variable next can teams value Class, spaceship low organization everybody the has

that in sure it's But at when have we well right and see leaves we idle both now, we'll that we're an and imagine pick idle scopes go. capacity. work imagine hand, to aforementioned dialed I'll in make there. now. And capacity happens, and those for up So going call of to where it come want it leaving and okay an We're of

from next go Please Chen Our with question Oliver. comes ahead, Oliver Cowen.

You as commercial have engagement advance, as Also, look flight, term per really as longer have flights marketing still well? then permit customer in contemplating And XXX thinking great how and Spaceport think, about love would and operations are international you're you the consumer right we thoughts how that? strategies you post on talent, forward as scale. you further as parameters pre

Thanks Oliver.

we not sure, in off long-term? astronaut what more you customer So, experience be will more or the as I'm interested our are topic, on start

membership experienced it, customer great. once both the Customer the but and are optimizing value topics lifetime

what passionate know, about value, be the lifetime many we for be we very they're in what bringing you flight incredible starting and of that will that folks, to many, memory call will we can we're anchor those future the customer years. some bring of year interesting we more we of As specifically of have astronauts to In a do. moment plan anyone group an will the people two people, journey, the more journey and people very very space three our these But in with building notion in. so

be in product, be but a to would back who's of become to and to us for on with come going strongest person paying folks And by minute I to not come think flights. up with the gone foreign and and to delivering effort in again to a jump only in far that think fly to notion I so then recommending experience said, to other off places. flying, The advocates, other is the I'll are go again, come just that international I of us. like to addition kind come, wanting everybody gone will compelling and the these that's people back has

continue that same bring think family want I to I the along way. to location. is So that And think the going happen friends in people and can

will from be earth it think of I other to powerful parts the also space. very see

be other it'd the of over the boot places. to Sea or Italy or about of us look talk heard when Japan often amazing over You've down

Spaceport to is building in important that to it a strong international that Spaceport which can spaceships, populate for Spaceport. not Phoenix factory why and produce is can additional but only very America, we're us, continue So continue for concept

thought to we always And closer Spaceport, going probably would we've flight. interested that's, be reaching to in to probably into the to we're a five guess back So back we that coming year regard. said exercise new and my know, a five. four to be time Around out you countries

our around XXX still I different flights our a We're for planning holds business important parts objective. parameter per has of Spaceport across building existing today. per us. strategy that all think So the capacity that year The very that

more generally California. mothership do didn't out the due week. on cooperate out could right, to it few could daily we with flights, a always go let's to won't less or We do realizing in with our saying weather just Mojave we're and took get us It weather that last days of as us

We at to spaceport. a more day once also a want particular than the ability fly

Spaceport, have think XXX other we I chose. capacity flexibility go to world. But probably So a locations than the in so flights leverage multiple but that first to specific parts could we'll conceivably we do that at of more if once in mind, we higher we have do look

should are Thank or the important production, growth Okay. and Class regards. milestones years? you on is next Last things critical question points Delta best for very be of? should which spend the think there about scaling. R&D What we the we over Are the aware few

Oliver. Thanks

little on So more example. a just bit the classes the around color milestones Delta

and So starting designs parts actually this be and year, will completing ship, tooling be building parts the we the after the for we'll fabrication.

be parts parts. big, of longer kind line, is are the already the XXXX, which lead we'll Now, outer doing mold in consistent

the be molded the the parts wing, would that fuselage, foundation, of our the the itself, the feather skins of So in assembly. parts for spaceship

will that in we're actually putting we still later going. the designs locking those parts start tooling, back get the then after those the So build and will those and start actually But this down. year, year, because

but fabrication on then In XXXX. in see get assembly XXXX, wraps up And you'll first continue testing flight of grounded parts in chips we're XXXX, doing so that vehicle. into then the when the start that we'll the we

as are that already and details in Those that sure are fabrication checkpoints still on continuing tail right? tooling kind to the making on to of be you the this end chain part the working signed with back in path for right, at going you'll commercial it's will we're milestones quarter are 'XX. how 'XX. after will that When those supply looking starting of partners that, progressing, service be those all us got we there. But regard. on quarter, keep our want through to, designs coming We've So

you. Thank

to And that we correct the time? on expense operating for know lastly, over CapEx, goes from if modeling? it should is Anything an Just also, R&D that question.

Hi, we the Yes, Oliver, in this design is phase Doug. are now. so

over we the developed we'll the parts So do the and change see a up be over there. see the in costs certain applications, the accounting engineering as finalization we'll CapEx, CapEx then there. then article, you'll you'll shift stage non once tooling a spending first the to recurring we'll reach of the ramp we design, investing and It and of to switch does see adjustment to

it, In suppliers with main us the Class. we've of magnitude helping got terms two, the Delta of two

of set aircraft under rapid parallel. program a And it's the are these we orders people And way do up set development to we've would what we're of in a as refer a that is contracts task where steps doing lot development.

So we're doing things concurrently.

we So for suppliers. the model cost as out there our because wouldn't with those orders interest under estimates still of be develop major put of task each now the these it go. course, subsequent And but best we right in our negotiation we they're numbers to have

So hopefully understand you that. can

The next question Please Wolfe Emily comes go Dutchman from with Research. ahead.

quick a question. Just

arrive at you headcount first, are hiring So the headcount. in the and the next end thinking all of the secondly, year? on with Major how about that, of year pace

a last have bases growth for headcount up so year we X,XXX right. I didn't Doug was team. headcount on I on ramped year And one definitely to quick the that's year a my a check talking or and us think Headcount for double about that our adding here, I But do of one. we fingers. X,XXX, thought that last And as ended we'll Company.

continue to few a build. left to have places We

mode. need engineering path we of a and majority ships. and of carry growth programs the the on of So these to operations, in new that both and hired But in developing development our us commercial the the in roles somewhat kind still we've we're people

work occupied up into companies or helping, Eve, our with in Phoenix. technical and is our into been in larger some operating But operations also program, folks do into happen. into also we're of to as the starts efforts will to be teams, the to on both areas kind redeploy now we're enhancement them reallocating, able right, Mexico, that on final building Now, our will from and get particular spaceflight be that talent those to as so what finished in but New flow the their reallocating of our we we're partners, assembly our as able there'll work had

and particular few but growth So modest assembly the there, 'XX for really XXXX I'd say engineering. further start that in When up areas, our period in site a get mostly targeted will we we modest Phoenix, as go, ramp into we processes growth.

there, as during add, the here can have period. I with of lot contractors a the we thing other headcount, did One enhancement

completed, has we've that that ramped as So down headcount.

it's so will you're add down now gave here headcount more net add of time while permanent the with the we phase, you. heads be ramp seeing And not equivalents But full we us for are a those numbers next that the contractors. the

future Thank if you. more, astronaut customer And fund the then pipeline, pipeline. may one the I

the as Sorry, moment? size you may that And this missed of spread have able do at the are if in I customer granular commentary, the the you all as pipeline? but pipeline to geographical get

couple a that. ways Well, on

that on, counterparts on obviously works is So, stand But think kind their good the your A those research as own. this building associate TAM, this go. obviously of one if built. will the industry couple we're into industry of on you up to leave we because built, and being have is done that's been market I some

customers, XX, countries XX You across we world. the different or our countries I mentioned international think maybe have astronauts XX different from on over

existing our track lesser momentum. know now have there. we And where we and obviously we of So, base greater kind

international the we Middle So East brings for is for logical that logical as a spaceports. a Europe to place is end us us. us. consider place

good about America and for Spaceport place logical right right pretty markets America of a think you I are know, where feel the we kind aggregated. for the North there big is now us. gives Asia you

that we're the in different obviously, And to of do travel to the bringing parts and are travel groups world. willing

to proximity individual as to audience but markets think eventually that it's helpful will have, of I global large sites be in to a bring can any we think do I So, well. our located

KeyBanc comes ahead. Please with question next from Michael Markets. go Leshock The Capital

do of laid I year idea wanted or I burn Delta rate question, of appreciate the be moving expect you most to the duration lot So, are first and I or require milestone So outlays? you the ask out, parts, a whatever know is, there which would the just milestones you trying to steps Class. capital an that peak cash the I'm for to intensive? which for laid what but get larger on that that rate, out

going you'll be at not 'XX, for within major Phoenix see continuation assembly, fabrication, on Sure, subassembly. going parts to only for our our is the partners assembly plant of their chain the final but supply

So then that's initial of that kind expect. where the non-recurring as of And into you're peak to and assembly ships. the move those would getting we engineering testing, down, would peak we start ground come and flight

would mentioned, money to, Doug have the kind our pace or As I that we're to keep feel some up return about feel as we or need capability, of on in. accelerator of good on the we good say, the putting back really accelerate we investment hedge we down

be But I go And specifically fleet up your need the and in if to likely to. XXXX ahead get peak. that so, we we question, experience. and like we flexibility have start to would to think built this our on But delivering is

how in the for that testing You advance on you of XXXX, for those part already do of of needed completed is how for that Legacy you've few Legacy can the Unity fleet? testing compare the far lot length amount that or And testing that months of the just a to In or begin you given ships? Delta of to check Is boxes the same off is for of said that example Delta, but the first better the year? revenue testing does plan that flight a you Delta's ships?

fundamentally test to to every our and Yes, last material Unity profiles very some similar was the an flight we handling And flight are because to that's outer new expensive line be flight tests very going inside. flight. expect flying similar different Delta's different don't it same of mold ship. almost properties was with breaking with on see but the a ground some characteristics

is flight new you less than what it So is but unity, scope the vehicle. would of the in see testing a

the just of how with our be. that in with months I We'll always as that flights this team to is many go our do much that on off learn, right measured I by of a help. know focus exactly I'd we're the also arrow that make test, can. analyze nice probably Sciences a up dynamic parameter will Flight lot it group we and knowledge, early our think a under and forward belt I also more deeper efficient expand and an many that built have the months. envelope sequential do have that a our base put But that. is time that process models It's we have knowledge. say also modeling, able And as

embedded The other thing engineering we ship can by the than can more having the into we with tooling non-recurring do and getting done flight virtue test a of built one have tooling is program.

there us on do the on assembly So, long ship. multiple ships a with now final that's take doesn't something relatively in to different work that process it of the we're because evaluating is kind being to points able not

a So color bit hopefully that gives little into of that you process.

the given remaining? shares of aftermarket XXX any the the for so through your program move issuance issuance lastly, we in the How you cadence me, as the XXXX or through million XQ. XXX quarter of And relative minimal viewing to further are million was

do to XXX and that million, and the share have watching conditions we based for to as says it Well, with always has it that optimize. it's utilize. there like trying sort to we're and us thing. things volume on And And always of market price

So, it when do so. we'll to opportunities there's appropriately use

with Truist. ahead. go Michael The Ciarmoli next from comes Please question

of that on kind to stay capital CapEx. of just in spending Maybe sort

that that the should way So 'XX basically should billion equate burn we right to I think mean, 'XX, think cash broadly about is to dollars? about a this?

question. for thanks So the

to want it's spend. moving of because just number of we both timing put the mentioned, the and of something on, I total in the not the magnitude As a between parts number

to So growing And most likely be I you did XXXX. into tried we expect. it'll that here what to directionally give highlight

the there's in there the moving have and a to you've as guidance well for as out number there motherships total a that just little for factory campus. plus plus put Class got on enough parts spaceport asset the a expansion multiyear the the Delta we want it on basis But we manufacturing put it's that difficult to the because

enough a all two being in lining for I of to So, up point. think there movement be in there's reaching in it's there specific spent at years terms out service. this for there, that things ready a are little number put There's

think is of to into what those goes flexibility I concurrently there have or how many things part back Yes, run on not. we of Doug choose we

with shift going I have of to guys and risk one that just standpoint, from kind it's XXXX? if with imagine deemphasizing and mean, comfortable of that having to is mean, going you you guys operational model? are an mean, sort operation you're comfortable I just are And then through a we're

we're, one, excited and we with have to get so can Well, very the back that there going. and excited comfortable mothership Unity I'm

that's good news. So all

get Second go what really this to require we're we're all company for that thousands. in is, in and then and where hundreds a the volume and we thing people model. trying want take spaces production tens is to this hundreds to of up. to of That's Eventually,

to help of it's but production learn really Unity, get power So can normalize out the model. continue to and we showcase the you're do, that's that of showcase course, we seeing us to marketplace I think prove technically, we focused the why and to needing really first going so to on experience. focus the We'll but are just what regularly

turn middle. back to, option we that hand want everything to imagine when it in along as So we in else and humming and to can we've value as come an And well the imagine. then got puts

that's, to But that ahead we a testing out on beginning Unity. well of I we're But get on now, to moving delta flight look learning years think ships, we'll in XXXX. our of still have our all And it's come. here couple

So, to it's want to when option to we're to go that in let's imagine, first our variable the with unity. that as And make helpful to once cost but sure building it, unit Delta. low experience production have deliver go out we things first

to there guess made two the I Last this required any validation? the or needed FAA of one maybe or that modifications for ones. were certification Eve that part Is quick

I that, July license, commercial think we last on the have operator's things, Right, that's XXXX. about two call talked different and a good of we through

then, does Eve each renewed go an to on I airworthiness airworthy, ship has hers. year that think certificate our experimental of And renewals. it just

that's so Unity's year. this basis. and We'll renew a go yearly later And

sheet last you ticketed bit customer a there? Can to and any one, trends down talk on the backlog the And little maybe or sequentially, deposits passengers I think balance

research allotment I'll just we're we our are we X,XXX right so in on of have astronaut we've, the use we've for future board the before where we general of trends, so same people first been or off category, pulled XXX kind around that seats in to a XXX to place working feather research an given then, seeing the we a it by we've way. that have commercial we're the you'll the first group manifest to going And along Italians in that service. And to. call of in start virtuoso inventory step flight, on a with

I virtuoso So as is efforts my move their space. think we probably to back on guess will up pick

base referrals XXX a the year some saw you So the existing and I drop as our as higher have world. with in and seats, no some, people bit that wasn't to than we in with same. what future on kind disruption basically backfill from and astronauts overall they imagine of It numbers off, of off house was friends changes the real that family the kept year economy XXXX, largest in generally category our referred might last everything dropping that going our on we

with Thanks, question next guys. Morgan you. Kristine Thank you. proceed. Thank is Please Stanley. The from Liwag

your we Mike's $XXX could million Following four cash of so questions leave flow that you the you And million you XX can on that preserve per only cash have guide you Doug, guys two if with to maybe or balance, accelerate year, is got cash I've investments ups a million usage on stop would that one analyze year-end. be there follow earlier up of on down that. in the cash. quantify and you of Can slow XXX a free a hundreds few millions flexibility mentioned millions? or by that I'll tens cash,

and producing copy millions Doug. very work attractive invest chips actually rather that engineering the not the ability because is in It's the do of more on We'd is expansion up investments, and the these compared because hundreds range great Yes, returns because our to do more the versus that, to we tens. This and to Kristine. in is flex inexpensive, we significant. we spending the pretty see is economics want each of Thanks, relatively front. vehicles

to to So economics running. those make able we be get copies want these

slow we'd fleet the down, not rather and to and So but if as needed. we we needed infrastructure could on spend less development the

have what pretty necessary. some could significant if will We we of in there do, terms leverage

you're can to ships, you to without or of that? balance And our maybe solutions for that about secured these there those Are financing a minimum accelerate compromising there cash production also, spaceships Are look position, is like available? ramp too then when you so are comfortable continue that think other two cash those anything creative with? your can are you still niche like asset that? And financing

Sure.

a like So number strong having on we sheet. out but the we there, not there's a main balance specific do put cash, so

we in I we reasons the have, opportunities flexibility. see For have mentioned, the that we investments to great want

let maintain preference not that to shrink. it So our strength and clearly is

strive that. a specific So, wouldn't out we I number there. will to put do But

of In debt, mentioned some there's there's and terms financing secured equity, alternative you methodologies. others, other

the debt markets We Because that the have creative get have flexibility potential about look we we can have haven't sticking kind more an we if to again to But this we talked stage the equity XXX in alternative. alternatives, explore able of that We at and the want the would we future and were been this stage. have to raise before pursued we that we basics. to other supportive. as million, at

mean, surprises? How's what XXX still two squeeze Eve, you've next tracking? there any major where test could operating And is overhaul the had the Are before successful flights. flights And on data I one you it's comparing maintenance now to if anticipated? I

question, great So Kristine.

Just because new here trying Eve regression flights. it's we're or word a to What broad not with These and testing call validation flights. break reducing the fundamentally listing and people is are doing ground. in verification

our gather made some correlate in So where and beefier the within that to actual use specifically we data. pylon. to center We launch flight them right heavier plane made we use wing, Flight we Sciences a shifts models structural the because

part kind of profile actual changed in There's and small the the slightly of some some of structural that have difference there's that wing. wing elements strength

we In slides, fact, and the our one launch slide was, if horizontal where kind in of you stabilizers. of look pylon showed whatever the number

that, back. the approach we wing. pylon attach you way add of you'll be the If that closely a an wing. look would see use couple in the the onto We same the exoskeleton leading what There's them the we of to small edge call protrusions on on

created little material that in bit And a more areas. those

you're so seeing And what very are those protrusions fairings, on fairings. small

to an expect don't those to we impact. not impact aerodynamic that any And there's tests example, So these that. material, have we're confirm to using any as

sequentially. if continue testing gone flight So them well, kind regression to will very we've The gather to have those do use tests data. of to to we we next done far, so continue expand,

ensure We're any an also that flutter area, looking this that. we opportunity introduce to we to that create did that to way nothing our into up characteristics would so work

just that in of very We're it to ship. speed correlating that flight continue and pleased that's flights we've expected. two have the regard. these max first to the It's So, carry on process. out performance another We'll But going do been what with as done.

to had say, Now which good was nice to pilots things hear.

with Austin Moeller Canaccord. next comes go from Please The question ahead.

Hi, good evening.

Just have that sheet to suborbital next first one with you Do to Class expect mothership? the generation yield do you should able that the produce for you one here, production expect cash that Or have space the just be you given additional on my balance and hand? units what and XXXX. you on plane plans question through Delta

building can that let's work, invest to and parts and at you the basis Doug, in us continue variable to of to this the on with see infrastructure kind build relatively low is allows ships engineering production and assemble start tag of strategy in I copies engineering in this yes, to that model, team framed allows design both models assembly this the of ongoing production it of both Well, of we an cost. us Austin our final one, relatively can tooling these quite non-recurring

the value standpoint. where the in economics. get That's margins flow where through we're we'll we'll going shareholder That's the a from business. drive where to That's

on that approach even both our of able other locations spaceports internally, same and tooling America, motherships. both Delta that world. the on into the next those, ahead being we doing our such is that generation the both these replicas same ships, go with both supply create can further continue partners, In and chain tooling, wear that's out Class kind long as to populate ahead we of and well as creating we're So the to the of and look build as then to and in continue Spaceport and

strategy So, that's along. manufacturing all been our

into then more we those So as we'll get and be also income flying obviously, coming shifts, years you in. have ramp-up

on And so that basis. cash you of that internal can kind balance generation an

economics, So going forward, Doug have you on don't anything you else add. shared lot to if a know I want you

what getting I of close to cost at regarding a I ongoing. we the and given are this that quantifying too negotiations cost Just stage spaceship the of then mothership the a cash think vehicles, and mentioned have it's the about

helpful is think hopefully this we've description got you. the So, to gave Michael's I calories

then in to XXXX. training guys is astronaut city revenue you And New the rose actual add doing Company, built help style But being have Mexico cosmos like a service question about campus addition the by just star revenue generation another thinking incremental Okay. opportunities for the spaceflight? astronaut just to to just considered

just Virgin and our think up. so you focused with to I in gen getting Class that to thing next first fine I say I'm saying Unity same motherships on stay the everybody Eve going We're to to second on Galactic. Delta space our team

we efficient we're very our do clearly our putting spend right with attention being it. is as where super now that and that's So

to you space. I around week think get to to to I a because leverage start additional ships to enabled seen there, of closer excitement, a as multi-times cadence go our and closer a a really a emotional as you're out weekly, excitement, our not So about, heaviest we get at streams start with But there's huge just lot ones do of least just if being have revenue talking like opportunity think, the for that potential widening regular said, space. revenue lot a to to getting there's of flights the get bulk

focused But we future the opportunities envision right motherships on Delta a our job think We can, Eve points, the that would XXXX I for stay Unity gen Class smaller just in getting little that and and can price you course. getting materially be to with And around going. next that's now. want done of bit

then more, on pricing you Have I Origin's have suborbital that to one process customers yours? flight the Blue marketing relative high to may. you And the if about come just through complained had any

Our amazing people. are customers

choices in their observing are the Some world. people multiple

I on relative as different you think comment note points we're excited into there price space. won't for as everybody to out. point you are I pricing, but do going that be I

thank Thank your Austin. you you question, for for

further in queue. no There are the questions

Galactic So quarter earnings call. that today's Virgin fourth and will conclude XXXX full year

you Thank for participation. your

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