Virgin Orbit Holdings, Inc.

Virgin Orbit reported Q3 2022 revenue of $30.9 million. Adjusted EBITDA was a loss of $42.9 million, and free cash flow was an outflow of $52.5 million, which management said was a 6% improvement versus the prior quarter. The company finished the quarter with just over $71 million of cash and cash equivalents, excluding the recent $25 million convertible investment from Virgin Investments. For 2022, management expects 3 launches, revenue at the top end of the prior range of $40 million, and free cash flow outflow of $220 million to $230 million. The company also said it is targeting more than double its launch rate next year and still expects to reach free cash flow breakeven in 2024.

Dan Hart framed the quarter around mission success, international expansion, and the growing strategic value of air launch. He highlighted the fourth successful launch, 100% mission success across the first four launches, and the Cornwall campaign as a blueprint for opening sovereign launch capability in other countries. His tone was confident but practical: he repeatedly stressed execution, regulatory approvals, mission assurance, and ramp discipline as the main priorities.

Brita O’Rear said Q3 revenue of $30.9 million was driven by the latest launch, other proprietary mission services, and funded studies. She noted adjusted EBITDA of negative $42.9 million and free cash flow outflow of $52.5 million, with the cash burn improving 6% sequentially due to higher collections and cost reductions. She also said gross margins were improving with higher revenues and learning-curve efficiencies, and that the quarter ended with just over $71 million of cash and cash equivalents. On capital allocation, she pointed to the $25 million convertible investment from Virgin Investments and said the company will be opportunistic in the capital markets to fund growth.

Analysts focused on the pace of scaling, pricing, UK regulatory timing, the Spire multi-launch deal, the TacRS award loss, and the L3Harris mothership upgrades. Management said growth is currently supply-limited and tied to operational ramp, with no major UK showstopper but more time and effort needed on first-time regulatory approvals. On TacRS, Dan Hart said Virgin Orbit does not anticipate a protest and is working closely with the customer on a solution. On the L3Harris aircraft, he said the mothership effort will likely be deferred because Cosmic Girl can support operations for another 1.5 to 2 years.