Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive has bureaus and studios in key finance and investing hubs including London, New York, Toronto, Vancouver, Sydney, and Perth [2] Group 2 - The company is committed to using technology to enhance workflows and improve content production [4] - Proactive employs automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Core Insights - Virgin Galactic reported a quarterly loss of $2.38 per share, which was worse than the Zacks Consensus Estimate of a loss of $2.23, but an improvement from a loss of $5 per share a year ago [1] - The company posted revenues of $0.46 million for the quarter, exceeding the Zacks Consensus Estimate by 15.25%, but down from $1.99 million year-over-year [2] - Virgin Galactic shares have declined approximately 39.6% year-to-date, contrasting with a 0.2% gain in the S&P 500 [3] Financial Performance - The earnings surprise for the latest quarter was -6.73%, while the previous quarter saw a positive surprise of 29.72% with an actual loss of $2.53 against an expected loss of $3.60 [1][2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times and topped revenue estimates twice [2] Future Outlook - The current consensus EPS estimate for the upcoming quarter is -$2.10 on revenues of $0.4 million, and for the current fiscal year, it is -$8.72 on revenues of $2.3 million [7] - The estimate revisions trend for Virgin Galactic is currently favorable, leading to a Zacks Rank 2 (Buy), indicating expected outperformance in the near future [6] Industry Context - The Aerospace - Defense industry, to which Virgin Galactic belongs, is currently ranked in the top 28% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8]

Financial Performance - Revenue was $0.5 million, a decrease compared to $2.0 million in the prior year period, due to the pause in commercial spaceflights[34] - Total operating expenses were $89 million, down from $113 million in the prior year period, reflecting a shift from R&D to capital investments[34] - Net loss was $84 million, an improvement from $102 million in the prior year period, primarily driven by lower operating expenses[34] - Adjusted EBITDA was $(72) million, compared to $(87) million in the prior year period[34] - Free cash flow was $(122) million, compared to $(126) million in the prior year period[34] - The company raised $31 million in gross proceeds through an at-the-market equity offering program[34] - Cash, cash equivalents, and marketable securities totaled $567 million, including $31 million of restricted cash[39, 38] Future Outlook - Q2 2025 free cash flow is expected to be in the range of $(105) million to $(115) million[35] - Upcoming key milestones include first glide test flight in Spring 2026, first research spaceflight in Summer 2026, and first private astronaut flight in Fall 2026[40] Non-GAAP Reconciliations - Non-GAAP total operating expenses were $79.917 million, compared to $101.200 million in the prior year period[42]

Financial Data and Key Metrics Changes - Revenue for the first quarter was approximately $500 million from future astronaut access fees and event fees [26] - Total operating expenses decreased by 21% to $89 million compared to $113 million in the prior year period [26] - Adjusted EBITDA improved to negative $72 million in the first quarter compared to negative $87 million in the prior year period [27] - Free cash flow was negative $122 million in the first quarter, within the range of guidance [28] - Cash, cash equivalents, and marketable securities at the end of the first quarter totaled $567 million [28] Business Line Data and Key Metrics Changes - The company is focused on transitioning spending from research and development to capital investments in manufacturing assets [27] - Capital expenditures for the first quarter grew to $46 million compared to $13 million in the prior year period [27] - The production of the first two spaceships is underway, with significant capital investments being made [27] Market Data and Key Metrics Changes - The company expects to open the first wave of spaceflight reservations in Q1 of 2026, with pricing expected to increase from the last price of $600,000 [21] - The company anticipates a strong referral and repeat business from the approximately 675 customers already on the manifest [21] Company Strategy and Development Direction - The company is focused on bringing new spaceships into service in a safe, timely, and cost-efficient manner [20] - Plans for a second spaceport in Southern Italy are underway, with feasibility assessments ongoing [22] - The company is exploring additional revenue opportunities through its carrier ship platform, which could support government and research missions [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming sales process and the potential for repeat business from previous customers [39] - The company is confident in its ability to manage expenses and expects a declining spending trend through 2025 [44] - Management highlighted the importance of customer experience and referrals in driving future sales [62] Other Important Information - The company plans to publish an in-depth series showcasing spaceship construction starting in June [19] - The company has established a strong cash position to support ongoing operations and capital investments [28] Q&A Session Summary Question: Thoughts on total addressable market and free cash flow - Management believes the analysis of the total addressable market remains solid and anticipates strong sales activity [39] - Free cash flow is expected to decline below $100 million by Q4 2025, with a positive cash flow business model anticipated in 2026 [45] Question: Size of the first wave of sales and ideal backlog - Management considers a one to two-year backlog appropriate and expects to target 125 flights per year with new ships [51] Question: Feasibility study for the second spaceport - Key factors include establishing necessary airspace and government support, with economic considerations focused on facilities and hangars [55]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was approximately $0.5 million from future astronaut access fees and event fees [26] - Total operating expenses decreased by 21% to $89 million compared to $113 million in the prior year period [27] - Adjusted EBITDA improved to negative $72 million in Q1 2025 from negative $87 million in the prior year [28] - Free cash flow was negative $122 million in Q1 2025, within the guidance range [29] - Cash, cash equivalents, and marketable securities at the end of Q1 2025 totaled $567 million [30] Business Line Data and Key Metrics Changes - The company is focused on transitioning spending from research and development to capital investments in manufacturing assets [28] - Capital expenditures for Q1 2025 grew to $46 million compared to $13 million in the prior year [28] - The production of the first two spaceships is underway, with significant progress in various systems including propulsion, avionics, and mechanical systems [9][12][15] Market Data and Key Metrics Changes - The company plans to reopen sales for spaceflights in Q1 2026, with expectations of a bespoke education sales process for new customers [21] - The first wave of spaceflight reservations is anticipated to attract new customers, including scientists and private individuals, with pricing expected to increase from the previous $600,000 [21] Company Strategy and Development Direction - The company aims to bring new spaceships into commercial service by 2026, focusing on cost control and efficient manufacturing processes [7][20] - There is ongoing development work for a new spaceport in Southern Italy, with feasibility assessments underway [22] - The company is exploring additional revenue streams beyond suborbital spaceflight, particularly through its carrier ship platform [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming sales process and the potential for repeat business from previous customers [39] - The company is confident in its ability to manage expenses and expects a declining trend in cash spending through 2025 [30][31] - The long-term outlook includes a projected revenue level of $450 million annually with positive cash flow expected in 2026 [46] Other Important Information - The company plans to publish a series showcasing spaceship construction starting in June 2025 [19] - Management highlighted the importance of customer experience and referrals in driving future sales [64] Q&A Session Summary Question: Thoughts on total addressable market and free cash flow - Management believes the analysis of the $300,000 total addressable market remains solid and anticipates strong sales activity [39] - Free cash flow is expected to decline below $100 million by Q4 2025, with a positive cash flow business model anticipated in 2026 [46] Question: Size of the first wave of sales and ideal backlog - Management indicated that a backlog of one to two years is appropriate, targeting 125 flights per year with six people per flight [53] Question: Feasibility study for the second spaceport - Key factors include establishing necessary airspace and government support, with economic considerations focused on facilities and hangars [57]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section outlines forward-looking statements concerning the company's goals, intentions, and expectations, warning investors not to place undue reliance due to various risks and uncertainties - The report contains forward-looking statements based on current management beliefs and assumptions, which are subject to significant risks and uncertainties[8](index=8&type=chunk) - Key factors that could cause actual results to differ materially from forward-looking statements include: delays in future commercial flights, safety of spaceflight systems, ability to market flights and achieve profitability, and the effect of geopolitical conflicts, economic conditions, and government regulations[9](index=9&type=chunk) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company presents its unaudited condensed consolidated financial statements for Q1 2025, showing decreased revenue, a narrowed net loss, and a 1-for-20 reverse stock split [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to $903.9 million, total liabilities slightly decreased, and total stockholders' equity declined to $272.2 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $547,567 | $627,936 | | **Total Assets** | **$903,933** | **$961,225** | | **Total Current Liabilities** | $143,824 | $150,010 | | **Total Liabilities** | **$631,762** | **$638,945** | | **Total Stockholders' Equity** | **$272,171** | **$322,280** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For Q1 2025, revenue decreased to $0.46 million, while the net loss narrowed to $84.5 million, primarily due to lower operating expenses Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share amounts) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $461 | $1,985 | | Total Operating Expenses | $88,909 | $113,143 | | Operating Loss | $(88,448) | $(111,158) | | Net Loss | $(84,487) | $(102,012) | | Net Loss Per Share (Basic & Diluted) | $(2.38) | $(5.10) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash used in operating activities improved to $75.9 million, with overall cash decreasing by $38.7 million, supported by financing activities Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(75,918) | $(113,229) | | Net cash provided by investing activities | $7,475 | $83,097 | | Net cash provided by financing activities | $29,712 | $6,891 | | **Net decrease in cash, cash equivalents and restricted cash** | **$(38,731)** | **$(23,241)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail a 1-for-20 reverse stock split, $30.7 million raised from ATM offerings in Q1 2025, and ongoing legal proceedings - On June 14, 2024, the company effected a **1-for-20 reverse stock split** of its common stock, with all share and per-share data retroactively adjusted[27](index=27&type=chunk) - In Q1 2025, the company sold **6.9 million shares** of common stock under its 2024 ATM Program, generating **$30.7 million** in gross proceeds[45](index=45&type=chunk) - The company is a party to various lawsuits, including the Lavin v. Virgin Galactic Holdings, Inc. class action and several derivative actions, which it intends to vigorously defend[62](index=62&type=chunk)[63](index=63&type=chunk)[71](index=71&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports Delta Class spaceship development is on track for 2026 commercial service, Q1 2025 revenue decreased, net loss narrowed due to reduced R&D, and liquidity is sufficient for the next twelve months - Development of the new Delta Class spaceships is progressing, with the first research flight anticipated in **summer 2026** and the first private astronaut flight in **fall 2026**[84](index=84&type=chunk) - As of March 31, 2025, the company holds reservations for approximately **675 future astronauts**, representing about **$189 million** in expected future revenue[85](index=85&type=chunk) - The company believes its current capital, including cash, cash equivalents, and marketable securities, is adequate to sustain operations for at least the next twelve months[109](index=109&type=chunk)[114](index=114&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Q1 2025 revenue was $0.5 million, down from Q1 2024, while total operating expenses decreased by 21% to $88.9 million, resulting in a smaller operating loss Operating Expense Changes (Q1 2025 vs Q1 2024, in thousands) | Expense Category | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Spaceline operations | $20,826 | $22,591 | $(1,765) | (8)% | | Research and development | $33,310 | $58,969 | $(25,659) | (44)% | | Selling, general and administrative | $30,550 | $27,884 | $2,666 | 10% | - The decrease in R&D expenses was primarily driven by a **$17.6 million** decrease in sub-contractor costs and an **$8.6 million** decrease in employee compensation related to next-generation spaceflight vehicle development[93](index=93&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company had $172.2 million in cash and $394.4 million in marketable securities, with liquidity sufficient for at least the next 12 months Liquidity Position as of March 31, 2025 (in millions) | Category | Amount | | :--- | :--- | | Cash, cash equivalents and restricted cash | $172.2 | | Marketable securities | $394.4 | - Net cash provided by financing activities was **$29.7 million** for Q1 2025, primarily from the at-the-market offering program[106](index=106&type=chunk) - Future expenditures are expected to increase as the company scales manufacturing for its expanding fleet, including additional spaceships, carrier aircraft, and rocket motors[107](index=107&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable as the company qualifies as a smaller reporting company - Not applicable for smaller reporting companies[121](index=121&type=chunk) [Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[123](index=123&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2025 that have materially affected, or are reasonably likely to materially affect, internal controls[124](index=124&type=chunk) [PART II - OTHER INFORMATION](index=26&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various lawsuits, but management does not believe any pending proceedings will have a material adverse effect on its financial condition - The company does not consider any currently pending claims, lawsuits, or proceedings to be material to its business or likely to result in a material adverse effect[125](index=125&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2024 Annual Report, except for an update on potential negative effects of changes to U.S. tariff and import/export regulations - An updated risk factor highlights that changes to U.S. tariff and import/export regulations could have a material adverse effect on global economic conditions, supply chains, and financial markets[127](index=127&type=chunk) [Other Information](index=27&type=section&id=Item%205.%20Other%20Information) The Board ratified the issuance of 351,313 shares sold via the ATM Program to correct a defective corporate act, and no Rule 10b5-1 trading plans were adopted or terminated - The Board ratified the issuance of **351,313 shares** sold via the ATM program to correct a "failure of authorization" after they were sold below a previously established floor price[131](index=131&type=chunk) - During Q1 2025, no officers or directors adopted or terminated a Rule 10b5-1 trading plan for the purchase or sale of company securities[132](index=132&type=chunk) [Signatures](index=29&type=section&id=Signatures) [Signatures](index=29&type=section&id=Signatures) The Quarterly Report on Form 10-Q was signed on May 15, 2025, by CEO Michael Colglazier and CFO Douglas Ahrens - The report was signed on **May 15, 2025**, by CEO Michael Colglazier and CFO Douglas Ahrens[139](index=139&type=chunk)

[First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) The company reported Q1 2025 revenue of $0.5 million, a decrease from $2.0 million in Q1 2024, due to a pause in commercial flights to focus on Delta Class spaceship production, with net loss improving to $84 million from $102 million year-over-year, driven by lower operating expenses, and a strong cash position of $567 million Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | Change Driver | | :--- | :--- | :--- | :--- | | Revenue | $0.5 million | $2.0 million | Pause in commercial spaceflights for Delta Class production. | | GAAP Total Operating Expenses | $89 million | $113 million | Lower operating expenses. | | Net Loss | $84 million | $102 million | Primarily driven by lower operating expenses. | | Adjusted EBITDA | $(72) million | $(87) million | Primarily driven by lower operating expenses. | | Free Cash Flow | $(122) million | $(126) million | - | | Net Cash Used in Operating Activities | $76 million | $113 million | - | - Cash position remains strong, with cash, cash equivalents, and marketable securities totaling **$567 million** as of March 31, 2025[5](index=5&type=chunk) - The company generated **$31 million** in gross proceeds by issuing **6.9 million shares** of common stock through its at-the-market (ATM) offering program[5](index=5&type=chunk) [Business Updates and Future Outlook](index=1&type=section&id=Business%20Updates%20and%20Future%20Outlook) Virgin Galactic is progressing with the build of its Delta Class spaceships, targeting the first research mission in summer 2026 and private astronaut flights in fall 2026, with future astronaut ticket sales expected to open in Q1 2026, and exploration of a second spaceport in Italy, while Q2 2025 free cash flow is projected between $(105) million and $(115) million - The company is advancing the build of its new Delta Class SpaceShips, with progress across rocket systems, avionics, flight controls, and structures[2](index=2&type=chunk)[4](index=4&type=chunk) - Key operational milestones are planned for 2026: Future Astronaut Sales are expected to open in **Q1 2026**; The first commercial spaceflight with a new SpaceShip, carrying research payloads, is planned for **summer 2026**; Private astronaut spaceflights are planned for **fall 2026**[4](index=4&type=chunk)[5](index=5&type=chunk) - A feasibility study is midway to potentially develop a second spaceport in Italy[5](index=5&type=chunk) - Financial guidance for the second quarter of 2025 projects free cash flow to be in the range of **$(105) million** to **$(115) million**[6](index=6&type=chunk) [Detailed Financial Statements](index=3&type=section&id=Detailed%20Financial%20Statements) This section provides the unaudited condensed consolidated financial statements for the first quarter ended March 31, 2025, including the Statement of Operations, Balance Sheet, and Statement of Cash Flows, with comparative data for the same period in 2024 [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, revenue was $0.5 million, down from $2.0 million in Q1 2024, total operating expenses decreased to $88.9 million from $113.1 million, leading to an improved operating loss of $88.4 million, and the net loss for the quarter was $84.5 million, or $(2.38) per share, compared to a net loss of $102.0 million, or $(5.10) per share, in the prior-year period Condensed Consolidated Statements of Operations (In thousands, except per share amounts) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | **2025** | **2024** | | **Revenue** | **$461** | **$1,985** | | Total operating expenses | $88,909 | $113,143 | | **Operating loss** | **$(88,448)** | **$(111,158)** | | Interest income | $7,215 | $12,308 | | Interest expense | $(3,240) | $(3,227) | | **Net loss** | **$(84,487)** | **$(102,012)** | | **Net loss per share (Basic and diluted)** | **$(2.38)** | **$(5.10)** | | Weighted-average shares outstanding | 35,440 | 20,019 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, the company held $567 million in cash, cash equivalents, and marketable securities, with total assets of $903.9 million and total liabilities of $631.8 million, compared to total assets of $961.2 million and total liabilities of $638.9 million at the end of 2024 Condensed Consolidated Balance Sheets (In thousands) | | **March 31, 2025** | **December 31, 2024** | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $140,763 | $178,605 | | Marketable securities (short & long-term) | $394,359 | $445,901 | | **Total current assets** | **$547,567** | **$627,936** | | **Total assets** | **$903,933** | **$961,225** | | **Liabilities and Stockholders' Equity** | | | | Customer deposits | $82,197 | $84,493 | | **Total current liabilities** | **$143,824** | **$150,010** | | Convertible senior notes, net | $420,689 | $420,120 | | **Total liabilities** | **$631,762** | **$638,945** | | **Total stockholders' equity** | **$272,171** | **$322,280** | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash used in operating activities was $75.9 million, a significant improvement from $113.2 million in Q1 2024, with cash paid for capital expenditures increasing to $46.0 million, $29.7 million generated from financing activities primarily through stock issuance, and free cash flow for the quarter at $(122.0) million Condensed Consolidated Statements of Cash Flows (In thousands) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | **2025** | **2024** | | **Net cash used in operating activities** | **$(75,918)** | **$(113,229)** | | **Net cash provided by investing activities** | **$7,475** | **$83,097** | | Capital expenditures | $(46,047) | $(13,072) | | **Net cash provided by financing activities** | **$29,712** | **$6,891** | | Proceeds from issuance of common stock | $30,730 | $7,272 | | **Net decrease in cash, cash equivalents and restricted cash** | **$(38,731)** | **$(23,241)** | [Non-GAAP Financial Measures and Reconciliations](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) The company utilizes non-GAAP measures such as non-GAAP total operating expenses, Adjusted EBITDA, and free cash flow to provide investors with supplemental information on its performance, with this section defining these measures and reconciling them to the most directly comparable GAAP figures, showing Q1 2025 Adjusted EBITDA at $(72.2) million and free cash flow at $(122.0) million - The company uses non-GAAP financial measures, including non-GAAP total operating expenses, Adjusted EBITDA, and free cash flow, to supplement its GAAP results and help investors evaluate operating performance[17](index=17&type=chunk)[18](index=18&type=chunk) Reconciliation of GAAP to Non-GAAP Total Operating Expenses (In thousands) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | **2025** | **2024** | | Total operating expenses (GAAP) | $88,909 | $113,143 | | Stock-based compensation | $4,769 | $8,244 | | Depreciation and amortization | $4,223 | $3,699 | | **Non-GAAP total operating expenses** | **$79,917** | **$101,200** | Reconciliation of Net Loss to Adjusted EBITDA (In thousands) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | **2025** | **2024** | | Net loss (GAAP) | $(84,487) | $(102,012) | | Interest expense | $3,240 | $3,227 | | Income tax expense | $48 | $80 | | Depreciation and amortization | $4,223 | $3,699 | | Stock-based compensation | $4,769 | $8,244 | | **Adjusted EBITDA** | **$(72,207)** | **$(86,762)** | Reconciliation of Net Cash Used in Operating Activities to Free Cash Flow (In thousands) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | **2025** | **2024** | | Net cash used in operating activities (GAAP) | $(75,918) | $(113,229) | | Capital expenditures | $(46,047) | $(13,072) | | **Free cash flow** | **$(121,965)** | **$(126,301)** |

Core Viewpoint - Virgin Galactic (SPCE) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook driven by rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, particularly influenced by institutional investors who adjust their valuations based on these estimates [4][6]. - For Virgin Galactic, the increase in earnings estimates suggests an improvement in the company's underlying business, likely leading to higher stock prices as investor sentiment shifts positively [5][8]. Zacks Rating System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7][9]. - Virgin Galactic's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10]. Earnings Estimate Revisions - For the fiscal year ending December 2025, Virgin Galactic is projected to earn -$8.72 per share, reflecting a 37.2% change from the previous year, with a 12.9% increase in the Zacks Consensus Estimate over the past three months [8].

Financial Data and Key Metrics Changes - In Q4 2024, the company generated revenue of $400,000 from future astronaut membership fees, with total operating expenses decreasing to $82 million from $117 million year-over-year, reflecting a shift from R&D to capital investments [47] - For the full fiscal year 2024, revenue reached $7 million, driven by two commercial spaceflights and membership fees, with average ticket prices increasing to $800,000 per seat from just over $300,000 in the prior year [48][49] - The GAAP net loss improved to $347 million, a 31% reduction from $502 million in the previous year, while adjusted EBITDA showed a favorable trend, improving to negative $289 million from negative $427 million [50][51] Business Line Data and Key Metrics Changes - The company is transitioning from an R&D-focused entity to one that builds real assets, with significant investments in manufacturing capabilities for new SpaceShips [11][20] - The new SpaceShips are designed for longer life, faster turnaround times, and lower costs per flight, with a target of flying twice a week and a lifespan of over 500 flights [12][10] Market Data and Key Metrics Changes - The company anticipates a significant increase in demand for its services, with plans to ramp up operations to meet the expected volume of commercial spaceflights starting in 2027 [66][67] - The commercial suborbital market is expected to grow, with opportunities for human-tended research and frequent payload flights [90][91] Company Strategy and Development Direction - The company aims to achieve EBITDA-positive operations by putting two new SpaceShips into service, with a focus on building a fully functioning spaceport in New Mexico before expanding to other locations [102][104] - Future plans include exploring partnerships for the mothership's capabilities, potentially expanding into government and research missions [108] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the production and launch timeline for new SpaceShips, with the first commercial research flight expected in summer 2026 and the first private astronaut flight in fall 2026 [10][31] - The company is focused on maintaining fiscal discipline and managing spending as it transitions to commercial operations, with expectations of cash inflows beginning in 2026 [120] Other Important Information - The company has made significant progress in building manufacturing assets, with a book value of property, plant, and equipment exceeding $200 million [52][116] - The company is exploring opportunities for a second spaceport in Italy, which could enhance its market presence and operational capacity [104][125] Q&A Session Summary Question: How quickly can the company ramp up from the initial flight schedule? - Management indicated that they will have confidence in the vehicles and maintenance strategies to enable a rapid ramp-up to the planned flight frequency by 2027 [66][67] Question: Will there be multiple research spaceflights before the first private astronaut flight? - Management confirmed that there will be a mix of research payloads and test flights, estimating around six to ten spaceflights in that timeframe [71][72] Question: What is the current thinking around reopening the order book? - Management suggested that the order book may reopen towards the end of 2025, with a cautious approach to ensure demand aligns with capacity [74] Question: Are there any changes to the propulsion system for Delta compared to Unity? - Management confirmed that there are no changes to the rocket motor itself, but improvements have been made to the oxidizer tank design for increased lifespan [80] Question: How does the company view the commercial research market evolving? - Management highlighted a surge in commercialization opportunities in spaceflight, emphasizing the potential for human-tended research and the unique capabilities of their platform [90][91] Question: What updates are there on the customer experience side, especially with the potential second spaceport? - Management noted progress in adapting the pilot simulator for geographical accuracy and expressed optimism about deeper market penetration with additional spaceports [122][125]

Virgin Galactic Holdings, Inc. (NYSE:SPCE) Q4 2024 Earnings Conference Call February 26, 2025 5:00 PM ET Company Participants Eric Cerny - Vice President, Investor Relations. Michael Colglazier - Chief Executive Officer Mike Moses - President, Spaceline Doug Ahrens - Chief Financial Officer Conference Call Participants Greg Konrad - Jefferies Michael Leshock - KeyBanc Capital Markets Myles Walton - Wolfe Research Tom Nass - TD Cowen Operator Good afternoon. My name is Louella, and I will be your conference ...