Virgin Galactic Holdings, Inc.

Virgin Galactic did not provide GAAP revenue or EPS figures on the call. Q2 operating expenses were $65 million, down from $70 million in the prior-year period, and capital expenditures were $41 million, down from $58 million. Free cash flow was negative $91 million, which management said was a 20% improvement versus the prior year. The company ended Q2 with $286 million of cash, cash equivalents, and marketable securities, up from $251 million in the prior quarter, after raising $134 million through its ATM program and reducing principal on its 2027 and 2028 notes by $93 million. For Q3 2026, revenue is expected to be approximately $400,000 from future astronaut access fees and events; free cash flow is expected to be negative $95 million to $100 million, with Q4 2026 free cash flow projected at negative $80 million to $90 million. Management reiterated that revenue recognition for spaceflights should begin with commercial service in February 2027, and it continues to target 10 or more spaceflights per month by the end of Q2 2027 and positive quarterly cash flow within 2027.

Michael Colglazier emphasized that demand is broadening and that the latest booking tranche sold out ahead of schedule at a higher price point. He framed the delay as a schedule-extension issue across many small build tasks rather than a scope change, saying the team is choosing thoroughness and precision before integrated ground testing. He also said the company has retired the $750,000 price point, plans to reopen bookings this fall at higher prices, and still expects the flight cadence and positive quarterly cash flow targets laid out previously.

Doug Ahrens focused on balance-sheet strengthening and near-term cash use. He said the company raised $134 million through its ATM in Q2, ended the quarter with $286 million in cash, cash equivalents, and marketable securities, and reduced principal on its 2027 and 2028 notes by $93 million, leaving just $17.9 million in 2027 principal payments and none due on the 2028 notes until March 2028. He also said Q3 CapEx should temporarily tick up because of first-ship systems installation, but should resume a downward trend in Q4 and fall further in 2027 as the business shifts from manufacturing to operations.

Analysts pressed management on whether the flight delay reflected added scope or just de-risking; Colglazier said it was the same scope, but hundreds of small installation items took longer than planned and pushed integrated vehicle ground testing by almost two months. Questions also focused on demand durability and pricing, and Colglazier said the recent tranche closed early, was oversubscribed, and that future tranches should be priced higher. On capital needs and cash conversion, Ahrens said the company does not need additional capital right now, cash inflows should start ahead of future flights once commercial service begins, and the cash conversion from EBITDA should be very high, with CapEx only becoming more meaningful later as fleet expansion continues.