Executive Summary

Q2 2025 showed continued expense discipline and cash preservation amid a deliberate pause in commercial flights: revenue $0.4M (down sharply YoY), GAAP operating expenses $70M (down 34% YoY), net loss $(67)M (improved YoY), and Adjusted EBITDA $(52)M (improved YoY) .
Results vs S&P Global consensus: EPS beat (actual −$1.41 vs −$2.22*), revenue slight miss ($0.406M vs $0.450M*). Declines reflect suspended flight operations while building Delta-class fleet; expense improvements reflect shift from R&D to capex and workforce scaling .
Guidance/trajectory: Q3 free cash flow burn guided to $(100)M–$(110)M; management reiterated Q4 quarterly cash spending below $100M and ongoing declines into 2026 as Delta ships enter service .
Strategic updates: Commercial service remains planned for 2026 with both research and private astronaut flights now expected in fall 2026; fuselage skin issue modestly pushed the research flight from summer to fall, while private astronaut flights remain targeted for fall 2026 .
Potential stock catalysts: Cost-down execution (opex/FCF trajectory), reaffirmed 2026 service timing, progress milestones (wing/feather assemblies in Q4’25), government collaboration prospects (LLNL feasibility study), and debate around dilution vs liquidity from ATM usage .

What Went Well and What Went Wrong

What Went Well

Expense control and cash discipline: GAAP opex fell to $70M (−34% YoY) and Adjusted EBITDA improved to $(52)M (from $(79)M), with cash used in operations down to $(55)M; management flagged continued declines as programs shift from design to build .
Strong liquidity preserved: Cash, cash equivalents and marketable securities totaled $508M at June 30; company raised $56M gross via 15.7M ATM shares to support growth and maintain balance sheet strength .
Program execution milestones: Wing and feather assemblies expected to complete in Q4’25; oxidizer tank qualified, flight control testing expanded; LVX launch vehicle design progressing prudently alongside potential government use cases (LLNL feasibility) .

Quotes:

CEO: “Commercial service remains planned for 2026, with both research and private astronaut flights expected in the fall next year.”
CFO: “Adjusted EBITDA…improved 34%…Free cash flow was negative $114M…representing a 7% improvement from…Q1.”
CEO on LVX/government: “Virgin Galactic and Lawrence Livermore National Laboratory…are collaborating on a feasibility study.”

What Went Wrong

Revenue sharply lower given flight pause: $0.4M vs $4.2M last year; sequential decline from $0.5M in Q1 as revenue is primarily access fees during the build phase .
Schedule friction: Fuselage skin first-article deficiency required rework and pushed the research flight from summer to fall 2026 (private astronaut flights still targeted for fall 2026) .
Dilution concerns: Company issued 15.7M shares ($56M gross) via ATM; analysts pressed on balancing dilution vs growth/liquidity—management emphasized prudence and growth returns from expanded capacity .

Financial Results

Quarterly Trend (Q4 2024 → Q1 2025 → Q2 2025)

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$0.429	$0.461	$0.406
Net Loss ($USD Millions)	$(76.413)	$(84.487)	$(67.280)
Basic & Diluted EPS ($)	$(2.53)	$(2.38)	$(1.47)
GAAP Total Operating Expenses ($USD Millions)	$82.382	$88.909	$70.348
Non-GAAP Total Operating Expenses ($USD Millions)	$72.499	$79.917	$58.470
Adjusted EBITDA ($USD Millions)	$(63.438)	$(72.207)	$(52.192)
Net Cash Used in Operating Activities ($USD Millions)	$(81.035)	$(75.918)	$(55.446)
Capital Expenditures ($USD Millions)	$35.709	$46.047	$58.361
Free Cash Flow ($USD Millions)	$(116.744)	$(121.965)	$(113.807)
Cash, Cash Equivalents & Marketable Securities (period-end, $USD Millions)	$657	$567	$508

Notes: Non-GAAP opex excludes stock-based comp, D&A, and accrued legal settlement expense ($2.875M in Q2), per reconciliations .

Year-over-Year (Q2 2024 → Q2 2025)

Metric	Q2 2024	Q2 2025
Revenue ($USD Millions)	$4.220	$0.406
Net Loss ($USD Millions)	$(93.775)	$(67.280)
Basic & Diluted EPS ($)	$(4.36)	$(1.47)
GAAP Total Operating Expenses ($USD Millions)	$106.010	$70.348
Non-GAAP Total Operating Expenses ($USD Millions)	$94.518	$58.470
Adjusted EBITDA ($USD Millions)	$(79.019)	$(52.192)
Net Cash Used in Operating Activities ($USD Millions)	$(79.132)	$(55.446)
Capital Expenditures ($USD Millions)	$34.415	$58.361
Free Cash Flow ($USD Millions)	$(113.547)	$(113.807)

Drivers: Revenue down due to paused commercial flights to prioritize Delta-class production; opex and Adjusted EBITDA improved with shift from R&D into capex and cost actions .

Results vs S&P Global Consensus (Q2 2025)

Metric	Actual	Consensus	Surprise
Revenue ($USD Millions)	$0.406	$0.450*	Miss (−$0.044M)
EPS (Primary) ($)	−$1.411*	−$2.216*	Beat (+$0.805)

*Values retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Free Cash Flow ($USD Millions)	Q3 2025	N/A	$(100) to $(110)	New
Quarterly Cash Spending	Q4 2025	“Below $100M in Q4 2025” (reiterated from Q1 call)	“Q4 will be under $100M”	Maintained
Revenue ($USD)	FY 2025	N/A	~ $400,000 (access fees)	New
Cash Spending Trend	2025→2026	“Declining spend trend”	“Cash spending will continue to decline through 2025 and into 2026”	Maintained
Commercial Timeline	2026	Research: Summer ’26; Private Astronaut: Fall ’26	Both Research and Private Astronaut in Fall ’26	Research flight pushed; private maintained

Earnings Call Themes & Trends

Topic	Q4 2024 (Q-2)	Q1 2025 (Q-1)	Q2 2025 (Current)	Trend
Commercial timeline	Target: Research summer ’26; Private fall ’26	Reiterated; ticket sales planned Q1 ’26	Research pushed to fall ’26; Private still fall ’26	Slight delay on research; overall 2026 intact
Cost discipline & cash	Opex down; FCF $(117)M; $657M liquidity	Opex $89M; FCF $(122)M; $567M liquidity; Q4’25 spend < $100M	Opex $70M; FCF $(114)M; $508M liquidity; Q4 < $100M reiterated	Continued progress
Capex shift	Tooling/PP&E rising	Capex $46M; build-phase spend rising	Capex $58M; ~half of 2025 spend one-time capex	Accelerating to build
LVX launch vehicle	Announced intent to progress	Highlighted HAL-heavy aircraft use cases	LVX design continues; LLNL feasibility study collaboration	Building optionality
Second spaceport (Italy)	Feasibility underway	Midway through feasibility; airspace studies	Study continues; authorities engaged; timing assessments	Advancing
Workforce & contractors	Prior restructuring noted	—	−~150 contractors YoY; headcount −~7% to match workload	Leaning costs
Legal/regulatory	—	—	Preliminary securities class action settlement (~$2.9M net impact)	One-time item

Management Commentary

Strategy and timeline: “We continue to track for launch of our commercial spaceflight business in 2026…Our fuselage schedule has slipped a bit…we still expect private astronaut flights to begin later that fall.”
Cost and capital: “We ended the second quarter with $508M in cash, cash equivalents and marketable securities…We have reached a preliminary settlement from the securities class action lawsuit…the net financial impact…~$2.9M.”
Growth optionality: “We…direct more of our engineering talent towards the design of our next spaceship launch vehicle…collaborating on a feasibility study with Lawrence Livermore National Laboratory.”
Customer and pricing: “We still plan to [reopen ticket sales] in ’26…our last stated price was $600,000 a ticket. I don’t expect that to go down when we reopen sales.”

Q&A Highlights

Schedule/technical: Management detailed the fuselage skin issue (BMI carbon composite core/thermal expansion across densities), with rework underway and a limited critical-path impact; research flight shifts to fall ’26, private astronaut flights still fall ’26 .
Liquidity vs dilution: ATM usage framed as growth capital for LVX/fleet expansion while maintaining balance sheet flexibility; no minimum cash balance target, but prudence emphasized amidst dilution concerns .
Spend trajectory: Q3 FCF guided $(100)–$(110)M; Q4 quarterly spend below $100M; declines to continue into 2026 with positive cash flow around the start of commercial service .
Capacity and future operations: Initial fleet (two Delta ships + existing carrier) targeted to 125 flights/year, ~$450M revenue and ~$100M Adjusted EBITDA at steady state; expanded fleet could reach ~~$1B revenue/~~$500M Adjusted EBITDA .
Italy spaceport & customer experience: Feasibility and airspace work ongoing; focus on scaling high-touch luxury training/hosting for higher flight cadence in 2026 .

Estimates Context

S&P Global consensus (Q2 2025): Revenue $0.450M*, Primary EPS −$2.216* (n=6 and n=5, respectively). Actuals: Revenue $0.406M (miss), Primary EPS −$1.411* (beat). The EPS beat was driven by lower opex and improved Adjusted EBITDA, while revenue fell with flight pause .
Implications: Continued expense discipline likely drives upward EPS estimate revisions for out-quarters; revenue remains minimal until flights resume in 2026, so near-term top-line estimates should remain muted.
*Values retrieved from S&P Global.

Key Takeaways for Investors

Cost-down execution remains on track: GAAP opex fell to $70M and Adjusted EBITDA improved to $(52)M; management targets Q4 quarterly spend below $100M and continued declines into 2026 .
Liquidity solid at $508M with incremental ATM usage; management balancing dilution vs accelerating growth options (LVX, expanded fleet) .
2026 is still the operative year: Research and private astronaut flights both targeted for fall ’26; expect 2025 milestones (wing/feather assemblies) and 2026 glide test program to serve as narrative catalysts .
EPS beat vs consensus* underscores operating leverage from cost actions despite de minimis revenue during build phase; revenue miss immaterial given suspended flight operations .
Watch non-GAAP adjustments: Q2 included ~$2.9M preliminary legal settlement accrual in GAAP results; Adjusted EBITDA and non-GAAP opex exclude this item .
Strategic optionality: LVX/government platform interest (LLNL feasibility) and potential second spaceport in Italy expand the medium-term TAM and utilization potential .
Trading lens: Near-term stock moves likely tied to cost trajectory, cash runway, dilution cadence, and tangible build milestones; consensus EPS revisions may drift higher on opex discipline while top-line remains nominal until 2026.

KPIs and Operating Metrics

KPI	Q1 2025	Q2 2025
Cash, Cash Equivalents & Marketable Securities (period-end, $USD Millions)	$567	$508
Net Cash Used in Operating Activities ($USD Millions)	$(75.918)	$(55.446)
Capital Expenditures ($USD Millions)	$46.047	$58.361
Free Cash Flow ($USD Millions)	$(121.965)	$(113.807)
GAAP Total Operating Expenses ($USD Millions)	$88.909	$70.348
Non-GAAP Total Operating Expenses ($USD Millions)	$79.917	$58.470
Weighted Avg Shares (Basic & Diluted, 000s)	35,440	45,641

Segment/Revenue Breakdown

No meaningful segment revenue during the build phase; Q2 revenue (~$0.4M) primarily from future astronaut access fees .

Sources: Q2 2025 8‑K/press release and exhibits ; Q2 2025 earnings call transcript ; Q1 2025 press release/8‑K ; Q4 2024 press release . Estimates from S&P Global (via GetEstimates)*.

Virgin Galactic Holdings, Inc (SPCE)·Q2 2025 Earnings Summary