Virgin Galactic Announces Third Quarter 2022 Financial Results And Provides Business Update
Virgin Galactic (NYSE: SPCE) reported a net loss of $146 million for Q3 2022, up from $48 million in Q3 2021. The company's cash position remains robust, with $1.1 billion in cash and cash equivalents. Research and development expenses surged to $97 million, compared to $34 million in the previous year. The company announced Bell Textron and Qarbon Aerospace as primary suppliers for its new Delta Class spaceships, with the first expected to be completed by 2025. Virgin Galactic is on track to launch commercial services by Q2 2023.
- Strong cash position of $1.1 billion.
- Primary suppliers secured for Delta Class spaceships.
- Net loss increased to $146 million from $48 million year-over-year.
- Adjusted EBITDA worsened to $(129) million compared to $(68) million in Q3 2021.
- R&D expenses skyrocketed to $97 million, up from $34 million.
-
Contracted With
Bell Textron and Qarbon Aerospace as Primary Suppliers to Build Delta Class Spaceships - Commercial Launch Remains on Track for Q2 2023
Third Quarter 2022 Financial Highlights:
-
Cash position remains strong, with cash and cash equivalents and marketable securities of
$1.1 billion September 30, 2022 .
-
Net loss of
$146 million $48 million
-
GAAP selling, general, and administrative expenses of
$46 million $48 million $38 million $40 million
-
GAAP research and development expenses of
$97 million $34 million $94 million $31 million
-
Adjusted EBITDA totaled
$(129) million $(68) million
-
Net cash used in operating activities totaled
$(101) million $(52) million
-
Free cash flow totaled
$(107) million $(53) million
-
Cash paid for capital expenditures totaled
$6 million $1 million
-
Generated
$100 million August 4, 2022 .
Business Highlights and Recent Updates:
-
On
November 2, 2022 , we announcedBell Textron andQarbon Aerospace as primary suppliers to buildDelta Class spaceships. The firstDelta Class spaceship is expected to be completed in 2025.
- On track to launch commercial service in Q2 2023.
Financial Guidance:
The following forward-looking statements reflect our expectations for the fourth quarter of 2022 as of
-
Forecasted free cash flow for the fourth quarter of 2022 is expected to be in the range of
$(120) million $(130) million
Conference Call Information
About
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this press release other than statements of historical fact, including, without limitation, statements regarding our spaceflight systems, expected flight schedule, timing of commercial launch and payload flights, expected completion of the first Delta class spaceship, our objectives for future operations and the Company’s financial forecast, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “strategy,” “future,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to the factors, risks and uncertainties included in our Annual Report on Form 10-K for the fiscal year ended
USE OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
This press release references certain financial measures that are not prepared in accordance with generally accepted accounting principles in
The Company believes that presenting these non-GAAP financial measures provides useful supplemental information to investors about the Company in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making. However, there are a number of limitations related to the use of non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore any non-GAAP measures the Company uses may not be directly comparable to similarly titled measures of other companies.
Third Quarter 2022 Financial Results
|
||||||||||||||||
Condensed Consolidated Statements of Operations and Comprehensive Loss |
||||||||||||||||
(Unaudited and in thousands, except for per share data) |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue |
|
$ |
767 |
|
|
$ |
2,580 |
|
|
$ |
1,443 |
|
|
$ |
3,151 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Customer experience |
|
|
590 |
|
|
|
207 |
|
|
|
737 |
|
|
|
270 |
|
Selling, general, and administrative |
|
|
46,113 |
|
|
|
48,268 |
|
|
|
127,820 |
|
|
|
128,503 |
|
Research and development |
|
|
97,411 |
|
|
|
34,289 |
|
|
|
211,578 |
|
|
|
103,997 |
|
Depreciation and amortization |
|
|
2,214 |
|
|
|
2,895 |
|
|
|
7,981 |
|
|
|
8,635 |
|
Total operating expenses |
|
|
146,328 |
|
|
|
85,659 |
|
|
|
348,116 |
|
|
|
241,405 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating loss |
|
|
(145,561 |
) |
|
|
(83,079 |
) |
|
|
(346,673 |
) |
|
|
(238,254 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Interest income |
|
|
3,524 |
|
|
|
240 |
|
|
|
6,327 |
|
|
|
785 |
|
Interest expense |
|
|
(3,293 |
) |
|
|
(6 |
) |
|
|
(8,924 |
) |
|
|
(19 |
) |
Change in fair value of warrants |
|
|
— |
|
|
|
34,432 |
|
|
|
— |
|
|
|
(34,650 |
) |
Other income, net |
|
|
(203 |
) |
|
|
70 |
|
|
|
7 |
|
|
|
110 |
|
Loss before income taxes |
|
|
(145,533 |
) |
|
|
(48,343 |
) |
|
|
(349,263 |
) |
|
|
(272,028 |
) |
Income tax expense |
|
|
(21 |
) |
|
|
(25 |
) |
|
|
(69 |
) |
|
|
(74 |
) |
Net loss |
|
|
(145,554 |
) |
|
|
(48,368 |
) |
|
|
(349,332 |
) |
|
|
(272,102 |
) |
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment |
|
|
(180 |
) |
|
|
3 |
|
|
|
(313 |
) |
|
|
11 |
|
Unrealized loss on marketable securities |
|
|
(585 |
) |
|
|
(437 |
) |
|
|
(8,227 |
) |
|
|
(437 |
) |
Total comprehensive loss |
|
$ |
(146,319 |
) |
|
$ |
(48,802 |
) |
|
$ |
(357,872 |
) |
|
$ |
(272,528 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
(0.55 |
) |
|
$ |
(0.19 |
) |
|
$ |
(1.34 |
) |
|
$ |
(1.11 |
) |
Diluted |
|
$ |
(0.55 |
) |
|
$ |
(0.32 |
) |
|
$ |
(1.34 |
) |
|
$ |
(1.11 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
263,907,259 |
|
|
|
254,749,195 |
|
|
|
260,255,202 |
|
|
|
244,157,923 |
|
Diluted |
|
|
263,907,259 |
|
|
|
255,147,228 |
|
|
|
260,255,202 |
|
|
|
244,157,923 |
|
|
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(In thousands, except share data) |
||||||||
|
|
|
|
|
||||
|
|
(Unaudited) |
|
|
||||
Assets |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
394,032 |
|
|
$ |
524,481 |
|
Restricted cash |
|
|
40,328 |
|
|
|
25,549 |
|
Marketable securities, short-term |
|
|
606,713 |
|
|
|
79,418 |
|
Inventories |
|
|
22,851 |
|
|
|
29,668 |
|
Prepaid expenses and other current assets |
|
|
22,094 |
|
|
|
19,476 |
|
Total current assets |
|
|
1,086,018 |
|
|
|
678,592 |
|
Marketable securities, long-term |
|
|
69,072 |
|
|
|
301,463 |
|
Property, plant, and equipment, net |
|
|
48,874 |
|
|
|
47,498 |
|
Other non-current assets |
|
|
55,220 |
|
|
|
41,281 |
|
Total assets |
|
$ |
1,259,184 |
|
|
$ |
1,068,834 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
||||
Current liabilities |
|
|
|
|
||||
Accounts payable |
|
$ |
19,872 |
|
|
$ |
9,237 |
|
Accrued liabilities |
|
|
43,389 |
|
|
|
28,787 |
|
Customer deposits |
|
|
103,971 |
|
|
|
90,863 |
|
Other current liabilities |
|
|
3,336 |
|
|
|
2,636 |
|
Total current liabilities |
|
|
170,568 |
|
|
|
131,523 |
|
Non-current liabilities |
|
|
|
|
||||
Convertible senior notes, net |
|
|
415,188 |
|
|
|
— |
|
Other long-term liabilities |
|
|
59,885 |
|
|
|
43,047 |
|
Total liabilities |
|
|
645,641 |
|
|
|
174,570 |
|
Stockholders' equity |
|
|
|
|
||||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
27 |
|
|
|
26 |
|
Additional paid-in capital |
|
|
2,096,901 |
|
|
|
2,019,750 |
|
Accumulated deficit |
|
|
(1,472,975 |
) |
|
|
(1,123,643 |
) |
Accumulated other comprehensive income |
|
|
(10,410 |
) |
|
|
(1,869 |
) |
Total stockholders' equity |
|
|
613,543 |
|
|
|
894,264 |
|
Total liabilities and stockholders' equity |
|
$ |
1,259,184 |
|
|
$ |
1,068,834 |
|
|
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(Unaudited and in thousands) |
||||||||
|
|
Nine Months Ended
|
||||||
|
|
2022 |
|
2021 |
||||
Cash flows from operating activities |
|
|
|
|
||||
Net loss |
|
$ |
(349,332 |
) |
|
$ |
(272,102 |
) |
Stock-based compensation |
|
|
34,488 |
|
|
|
48,704 |
|
Depreciation, amortization and impairment |
|
|
12,174 |
|
|
|
8,635 |
|
Amortization of debt issuance costs |
|
|
1,466 |
|
|
|
— |
|
Change in fair value of warrants |
|
|
— |
|
|
|
34,650 |
|
Non-cash interest and other operating activities, net |
|
|
6,063 |
|
|
|
(42 |
) |
Change in assets and liabilities |
|
|
|
|
||||
Inventories |
|
|
6,817 |
|
|
|
1,178 |
|
Other current and non-current assets |
|
|
2,253 |
|
|
|
6,342 |
|
Accounts payable and accrued liabilities |
|
|
23,828 |
|
|
|
1,824 |
|
Customer deposits |
|
|
13,108 |
|
|
|
2,148 |
|
Other current and non-current liabilities |
|
|
136 |
|
|
|
3,026 |
|
Net cash used in operating activities |
|
|
(248,999 |
) |
|
|
(165,637 |
) |
Cash flows from investing activity |
|
|
|
|
||||
Capital expenditures |
|
|
(12,306 |
) |
|
|
(2,452 |
) |
Purchases of marketable securities |
|
|
(604,945 |
) |
|
|
(286,132 |
) |
Proceeds from maturities and calls of marketable securities |
|
|
294,612 |
|
|
|
— |
|
Cash used in investing activity |
|
|
(322,639 |
) |
|
|
(288,584 |
) |
Cash flows from financing activities |
|
|
|
|
||||
Payments of lease obligations |
|
|
(132 |
) |
|
|
(105 |
) |
Proceeds from convertible senior notes |
|
|
425,000 |
|
|
|
— |
|
Debt issuance costs |
|
|
(11,278 |
) |
|
|
— |
|
Capped call premium |
|
|
(52,318 |
) |
|
|
— |
|
Repayment of commercial loan |
|
|
(310 |
) |
|
|
(310 |
) |
Proceeds from issuance of common stock |
|
|
99,573 |
|
|
|
500,000 |
|
Proceeds from issuance of common stock pursuant to stock options exercised |
|
|
49 |
|
|
|
18,856 |
|
Transaction costs related to issuance of common stock |
|
|
(1,137 |
) |
|
|
(6,753 |
) |
Withholding taxes paid on behalf of employees on net settled stock-based awards |
|
|
(3,479 |
) |
|
|
(15,779 |
) |
Net cash provided by financing activities |
|
|
455,968 |
|
|
|
495,909 |
|
Net increase (decrease) in cash and cash equivalents |
|
|
(115,670 |
) |
|
|
41,688 |
|
Cash, cash equivalents and restricted cash at beginning of year |
|
|
550,030 |
|
|
|
678,955 |
|
Cash, cash equivalents and restricted cash ending balances |
|
$ |
434,360 |
|
|
$ |
720,643 |
|
|
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
394,032 |
|
|
$ |
702,565 |
|
Restricted cash |
|
|
40,328 |
|
|
|
18,078 |
|
Cash, cash equivalents and restricted cash |
|
$ |
434,360 |
|
|
$ |
720,643 |
|
Use of Non-GAAP Financial Measures (Unaudited)
This press release references certain financial measures that are not prepared in accordance with generally accepted accounting principles in
The Company believes that presenting these non-GAAP financial measures provides useful supplemental information to investors about the Company in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making. However, there are a number of limitations related to the use of non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore any non-GAAP measures the Company uses may not be directly comparable to similarly titled measures of other companies.
A reconciliation of Adjusted EBITDA to net loss for the three and nine months ended
Amounts in thousands ($) |
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net Loss |
|
$ |
(145,554 |
) |
|
$ |
(48,368 |
) |
|
$ |
(349,332 |
) |
|
$ |
(272,102 |
) |
Income tax expense |
|
|
21 |
|
|
|
25 |
|
|
|
69 |
|
|
|
74 |
|
Interest expense |
|
|
3,293 |
|
|
|
6 |
|
|
|
8,924 |
|
|
|
19 |
|
Depreciation & amortization |
|
|
2,214 |
|
|
|
2,895 |
|
|
|
7,981 |
|
|
|
8,635 |
|
Stock-based compensation |
|
|
11,510 |
|
|
|
12,169 |
|
|
|
34,488 |
|
|
|
48,704 |
|
Change in fair value of warrants |
|
|
— |
|
|
|
(34,432 |
) |
|
|
— |
|
|
|
34,650 |
|
Adjusted EBITDA |
|
$ |
(128,516 |
) |
|
$ |
(67,705 |
) |
|
$ |
(297,870 |
) |
|
$ |
(180,020 |
) |
A reconciliation of selling, general, and administrative expenses to non-GAAP selling, general, and administrative expenses for the three and six months ended
Amounts in thousands ($) |
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
|
|
|
|
|
|
|
||||
Selling, general, and administrative |
|
$ |
46,113 |
|
$ |
48,268 |
|
$ |
127,820 |
|
$ |
128,503 |
Stock-based compensation |
|
|
8,158 |
|
|
8,540 |
|
|
24,068 |
|
|
37,004 |
Non-GAAP selling, general, and administration expenses |
|
$ |
37,955 |
|
$ |
39,728 |
|
$ |
103,752 |
|
$ |
91,499 |
A reconciliation of research and development expenses to non-GAAP research and development expenses for the three and six months ended
Amounts in thousands ($) |
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
$ |
97,411 |
|
$ |
34,289 |
|
$ |
211,578 |
|
$ |
103,997 |
Stock-based compensation |
|
|
3,352 |
|
|
3,629 |
|
|
10,420 |
|
|
11,700 |
|
|
$ |
94,059 |
|
$ |
30,660 |
|
$ |
201,158 |
|
$ |
92,297 |
The following table reconciles forecasted net cash used in operating activities to forecasted free cash flow for the fourth quarter of 2022 (in thousands):
|
|
|
Net cash used in operating activities |
|
( |
Capital expenditures |
|
( |
Free cash flow |
|
( |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221103006312/en/
For media inquiries:
Aleanna Crane - Vice President Communications
Virgingalacticpress@virgingalactic.com
575-800-4422
For investor inquiries:
vg-ir@virgingalactic.com
949.774.7637
Source:
FAQ
What were Virgin Galactic's financial results for Q3 2022?
When is Virgin Galactic expected to launch commercial services?
Who are the primary suppliers for Virgin Galactic's Delta Class spaceships?
What were the research and development expenses for Virgin Galactic in Q3 2022?
How did the adjusted EBITDA change for Virgin Galactic in Q3 2022?
