Virgin Galactic Holdings, Inc. (NYSE: SPCE) is a pioneer in space tourism. Virgin stiock has plummeted below pandemic lows following the first space trip by its leader Richard Branson.
The Company's commercial astronaut service was delayed to Q4 2022, with ticket prices set at $450,000 per seat. However, Virgin is making strides behind the scenes in improving its infrastructure, technical innovation, and plans as it prepares to emerge more powerful during this time period. Virgin Galactic's stock is a good way for risk-tolerant investors to get exposure in the space tourism sector with a longer perspective.
Q3 FY 2021 Earnings Release
On Nov. 8, 2021, Virgin Galactic published its fiscal third-quarter 2021 results for the quarter ending September 2021. The firm posted a EPS loss of (-$0.32) versus a (-$0.28) loss predicted by analysts, missing badly, a (-$0.04) miss. Revenues were $2.58 million above expectations of $1.69 million, adjusted EBITDA was (-$68 million). The Company is on track to offer commercial flights by the end of 2022. Michael Colglazier, CEO of Virgin Galactic, commented:
“We are entering our fleet enhancement period with a clear roadmap for increasing the durability, reliability, and predictability of our vehicles in preparation for commercial service next year ... Demand for space travel is strong, and we've been selling seats ahead of the pace we had planned. This demonstrates the incredible market for our product and appreciation for the value of the unique experience we offer. It's a pivotal time for the Company as we transition from a prototyping space innovator to the global, scaled, commercial operation we are becoming."
Conference Call Takeaways
Chief Executive Officer, Colglazier set the tone:
“Given the newness of our product, we start by broadly showcasing the awe-inspiring, aspirational value of our experience. And we capture the top of the funnel interest with leading CRM tools. Unity 22 accomplished this in a brilliant fashion and brought tens of thousands of requests for information on our product. ... With regarding sales pace, we plan to onboard new future astronauts ahead of it in conjunction with the growth of our fleet. For the current sales cycle, we are targeting to have our first 1000 future astronauts confirmed by the startup commercial service."
"Since September, spaceport purchased approximately 100 seats at our new pricing of $450,000 per seat. Each contract includes a $150,000 deposit, $25,000 of which is non-refundable. We believe these results from a relatively small group that had little pre-qualification showed the incredible strength and appeal of our and our membership community... Beginning in early Q1, using a similar filtering process with the more than 60,000 people who originally inquired about flight information, we will offer the remaining slots to become 1 of our first 1,000 astronauts. The overflow demand from this group will be channeled into a new space fair program, whose members will be given first access to the next chance of spaceflights when they are made available. As we've said many times, we know that traveling to space is perhaps the most meaningful journey that can be experienced. ... This distinctly Virgin approach offers future astronauts a community with access to unique and exclusive experiences that started the moment of sale, continued during the buildup to the flight, and then extend long after."
He concluded, “As we've said, we are targeting a flight cadence of 400 flights per year per spaceport. To get there, we need to efficiently expand our fleet, and that means growing both our talent base and our footprint. To start, we're investing in a new engineering design and collaboration center ... It has been a great facility for us and we will continue to maintain our presence [in Mojave], but we also recognize that growing a business requires us to be in locations where we can access additional talent at scale.”