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    SPCE
    Earnings call· Jun 2026(Q2 FY26)

    Virgin Galactic Holdings Q2 FY26 earnings call SPCE

    Aug 12, 2026 Source

    Executive summary

    Virgin Galactic Q2 FY26 — Commercial Flight Shifted to Feb 2027, Strong Demand for Spaceflights

    The company has adjusted its first commercial spaceflight to February 2027 due to minor installation delays on its new spaceship, while maintaining its 2027 positive cash flow target. Strong demand for spaceflights at higher price points has led to an oversubscribed booking tranche, and the company continues to build out its fleet with favorable unit economics. Management is focused on scaling operations and achieving significant adjusted EBITDA from multiple spaceships and spaceports.

    Highlights

    5

    • Allotment of spaceflights at $750,000 price point was oversubscribed, adding over $50 million to expected future spaceflight revenue.

    • Ended Q2 FY26 with $286 million of cash, cash equivalents, and marketable securities, up from $251 million in the prior quarter.

    • Reduced principal balance on 2027 and 2028 notes by $93 million, with only $17.9 million remaining for 2027 notes.

    • Forecast to achieve a flight rate of 10 or more spaceflights per month by the end of Q2 2027.

    • Each new spaceship is projected to cost approximately $60 million to produce and generate over $1.4 billion of lifetime contribution margin.

    Concerns

    3

    • First commercial spaceflight moved to February 2027 from previous expectations due to modest time duration extensions across hundreds of small installation tasks for the first new spaceship.

    • Q3 FY26 free cash flow expected to be negative $95 million to $100 million, a temporary increase in CapEx due to increased time and labor for systems installations.

    • Added investments will show up as incremental spending in Q3 and to a lesser degree in Q4 to maintain expected flight cadence.

    Guidance & targets

    9
    CategoryTargetConfidence
    Q3 FY26 Revenue
    $400,000
    medium materiality
    High
    Q3 FY26 Free Cash Flow
    negative $95 million to $100 million
    high materiality
    High
    Q4 FY26 Free Cash Flow
    negative $80 million to $90 million
    high materiality
    High
    First Commercial Spaceflight Start Date
    February 2027
    high materiality
    High
    Monthly Flight Rate
    10 or more spaceflights per month
    high materiality
    High
    Quarterly Positive Cash Flow
    within 2027
    high materiality
    High
    Annualized Adjusted EBITDA
    $100 million
    high materiality
    High
    Annualized Adjusted EBITDA (4 spaceships, 1 spaceport)
    over $450 million per year
    high materiality
    High
    Annualized Adjusted EBITDA (2 fully utilized spaceports)
    over $1 billion annually
    high materiality
    High

    Operational metrics

    17
    Cash, cash equivalents, and marketable securities
    $286 millionup from $251 million at the end of the prior quarter
    Q2 FY26 end

    Ended the second quarter with $286 million of cash, cash equivalents, and marketable securities, up from $251 million at the end of the prior quarter.

    ATM equity offering program proceeds
    $134 million
    Q2 FY26

    during the second quarter, we raised $134 million through our current ATM or at-the-market equity offering program, which is now substantially complete.

    Debt principal reduction
    $93 million
    Q2 FY26

    Also, during the second quarter, we reduced the principal balance on our 2027 and 2028 notes by $93 million and further aligned the timing of future payments with the expected ramp in our spaceflight operations.

    2027 notes remaining principal
    $17.9 million
    Q2 FY26 end

    Specifically, we now have just $17.9 million in principal payments remaining for the 2027 notes.

    Operating expenses
    $65 millioncompared to $70 million in the prior year period
    Q2 FY26

    Operating expenses were $65 million compared to $70 million in the prior year period.

    Capital expenditures
    $41 milliondown from $58 million in the prior year period
    Q2 FY26

    Capital expenditures were $41 million, down from $58 million in the prior year period, reflecting lower capital requirements overall as we progress through manufacturing our spaceships.

    Future spaceflight revenue added
    over $50 million
    Q2 FY26

    The allotment we had held at the $750,000 price point was oversubscribed, and we have added over $50 million to our expected future spaceflight revenue.

    Astronaut community members
    over 700
    Q2 FY26

    We now have over 700 members within the Virgin Galactic astronaut community

    Multi-seat bookings
    Approximately 60%
    new cohort

    Approximately 60% of this new cohort is part of a group of some form or another

    Spaceship production cost
    approximately $60 million
    per new spaceship

    Our projections have stayed consistent, and we expect each new spaceship to cost approximately $60 million to produce.

    Spaceship lifetime flights
    500 flights
    lifetime

    With a conservative lifetime estimate of 500 flights per spaceship

    Astronauts per spaceflight
    6 astronauts
    per spaceflight

    with 6 astronauts per spaceflight

    Average pricing per spaceflight expedition
    $600,000
    average

    average pricing of $600,000 per spaceflight expedition

    Contribution margin per spaceflight
    over 80%
    per spaceflight

    and a contribution margin over 80% per spaceflight

    Lifetime contribution margin per spaceship
    over $1.4 billion
    lifetime

    each new spaceship has the potential to generate over $1.4 billion of lifetime contribution margin.

    Rocket motor production capability
    3-motor-a-week
    initial ramp-up

    We will be testing out and ramping initially up to about a 3-motor-a-week capability, just to kind of keep up with the flight rate of our first 2 ships.

    Rocket motor production capability
    closer to 15 motors a week
    expanded fleet

    So probably closer to 15 motors a week when we're ready to go.

    Industry KPIs

    2
    MetricValueDetails
    Total company backlogover $50 millionUSD
    Production rates by program10 or morespaceflights/month

    Risks & headwinds

    2
    Delay in first commercial spaceflightQ1 FY27

    Moved to February 2027

    Mitigation: Added resources, improved process management, working 2 shifts/7 days a week, incorporating learnings into second ship schedule.

    Incremental spending due to schedule adjustmentsQ3 FY26, Q4 FY26

    Added expense in Q3 and to a lesser degree in Q4

    Mitigation: These added investments will show up as incremental spending in Q3 and to a lesser degree in Q4. These added expenses bring high return by helping us maintain our expected flight cadence in 2027.

    What to watch in Q3 FY26

    5

    Integrated Vehicle Ground Testing

    next quarter
    CurrentWork wrapping up in next couple of weeks
    TargetBegin later this month (August 2026)

    Why it matters

    This is a critical step before the spaceship moves to New Mexico for flight testing and commercial service.

    This work is wrapping up in the next couple of weeks, and we expect to begin integrated vehicle ground testing later this month.

    Q&A highlights

    5

    Is the commercial launch delay due to new work or de-risking? What is the natural ceiling for demand, and how will pricing evolve?

    The delay is due to cumulative small installation tasks taking longer than estimated, not new scope. The company is the only provider of human spaceflight at this price point, and demand is strong. New tranches will be at higher price points, but not as high as anecdotal Blue Origin prices ($1M-$2M).

    “Generally same scope, same work, same expectations in finishing the installation of all of our avionics and mechanical systems. And the work, which is hundreds, literally hundreds of reasonably short tasks, and a lot of those tasks have taken us longer to complete than we had allotted in our estimates and schedule forecast.”

    asked by Julia Shulansky · answered by Michael Colglazier

    2 min read5 chapters

    Detailed Narrative

    01

    Spaceship Build Progress and Schedule Adjustment

    The first new spaceship's commercial flight has been moved to February 2027 due to minor, cumulative delays in hundreds of installation tasks, not a single issue. This includes detailed wiring and mechanical system installations. The company is adding resources and working 2 shifts, 7 days a week, to complete the work, which will result in incremental spending in Q3 and Q4. Integrated vehicle ground testing is expected to begin later this month, with the ship moving to New Mexico in October for flight testing.

    02

    Astronaut Community Growth and Demand

    Virgin Galactic's astronaut community now exceeds 700 members, with a recent tranche of bookings at the $750,000 price point being oversubscribed. A new trend shows an increase in multi-seat bookings, with approximately 60% of the new cohort booking as groups for multi-generation expeditions, research missions, corporate charters, and nonprofit endeavors. The company has closed active bookings at this price point and plans to open a new tranche at higher price points this fall, citing strong demand and the unique offering in the market.

    03

    Static Test Ship and Second Spaceship Production

    Progress continues on the static test ship, with the feather assembly already at Southwest Research Institute for testing starting in early September. The wing and fuselage assemblies will be joined and shipped for structural testing. Once the static test ship is complete, the manufacturing team will pivot to assembling the second spaceship, which is expected to join the fleet in New Mexico in March, supporting the planned flight cadence.

    04

    Unit Economics and Scaling

    Each new spaceship is projected to cost approximately $60 million to produce and has the potential to generate over $1.4 billion in lifetime contribution margin, based on 500 flights, 6 astronauts per flight, and an average price of $600,000 per expedition with over 80% contribution margin. The company expects to achieve $100 million in annualized adjusted EBITDA by a quarter in 2028 with its first two spaceships and aims for over $450 million with four spaceships and one launch vehicle at a single spaceport, and over $1 billion with two fully utilized spaceports.

    05

    Capital Management and Future Growth

    The company raised $134 million through an ATM program in Q2, ending the quarter with $286 million in cash and equivalents. It also reduced debt by $93 million, aligning future payments with the expected ramp-up of spaceflight operations. Management does not foresee an immediate need for additional capital but notes that future capital raises could accelerate vehicle production and fleet expansion, leveraging the strong unit economics.

    AI-generated summary of the company’s earnings call. Not investment advice.