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VG

Virgin Galactic Holdings, Inc (SPCE)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $0.365M and diluted EPS was $(1.09), both better than S&P Global consensus; revenue beat by ~$0.05M and EPS beat by ~$0.39, driven by lower operating expenses and continued access-fee revenue while commercial flights remain paused . The S&P Global consensus for Q3 was revenue $0.315M* and EPS $(1.48)*.
  • GAAP total operating expenses fell 19% YoY to $66.5M and net loss improved 14% YoY to $(64.4)M, reflecting disciplined cost control and the shift from R&D to capitalized production investment .
  • Management reaffirmed timing: flight test program to commence in Q3 2026 and first commercial spaceflight in Q4 2026; first sales tranche to open in Q1 2026 with pricing expected to be above the last published $600k per seat .
  • Q4 2025 free cash flow guidance tightened to $(90)M–$(100)M (vs prior “below $100M”), and CFO guided Q4 revenue to ~$0.3M, maintaining the sequential downtrend in spending ahead of commercial operations .

What Went Well and What Went Wrong

What Went Well

  • Lower costs drove improved profitability metrics: GAAP opex down to $66.5M (from $82.1M YoY), net loss improved to $(64.4)M (from $(74.5)M), and adjusted EBITDA improved to $(52.8)M (from $(59.3)M) . “Adjusted EBITDA totaled $(53) million, ... driven by lower operating expenses.” — CFO Doug Ahrens .
  • Program milestones: oxidizer tank qualified for the life of Delta ships (tested to 4,000 cycles), supporting reusability and the economic model; Eve launch vehicle upgrades enable successive-day launches and a targeted 125 missions/year with the first two ships .
  • Commercial readiness: first sales tranche in Q1 2026 with staircase pricing; customer engagement building, repeat and referral dynamics expected to be strong .

What Went Wrong

  • Schedule friction within sub-assemblies: wing and feather completion dates shifted “modestly to the right,” and the feather delivery pushed from late Q4’25 to H1 Q1’26, though not on the critical path (fuselage still drives) .
  • Revenue remains de minimis as commercial flights are paused; Q3 revenue was $0.365M (access fees) (flat YoY), underscoring dependence on future commercial timelines .
  • Free cash outflows remain significant: Q3 free cash flow was $(107.8)M and capex $51.5M, with Q4 FCF guided to $(90)M–$(100)M before the inflection to positive cash flow post-commercial start .

Financial Results

YoY comparison (Q3 2024 → Q3 2025)

MetricQ3 2024Q3 2025
Revenue ($USD Millions)$0.402 $0.365
GAAP Total Operating Expenses ($USD Millions)$82.130 $66.531
Operating Loss ($USD Millions)$(81.728) $(66.166)
Net Loss ($USD Millions)$(74.540) $(64.417)
Diluted EPS ($USD)$(2.66) $(1.09)
Adjusted EBITDA ($USD Millions)$(59.301) $(52.831)
Cash from Operations ($USD Millions)$(79.307) $(56.303)
Capital Expenditures ($USD Millions)$38.659 $51.484
Free Cash Flow ($USD Millions)$(117.966) $(107.787)

Sequential trend (Q1 2025 → Q2 2025 → Q3 2025)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$0.461 $0.406 $0.365
GAAP Total Operating Expenses ($USD Millions)$88.909 $70.348 $66.531
Operating Loss ($USD Millions)$(88.448) $(69.942) $(66.166)
Net Loss ($USD Millions)$(84.487) $(67.280) $(64.417)
Diluted EPS ($USD)$(2.38) $(1.47) $(1.09)
Adjusted EBITDA ($USD Millions)$(72.207) $(52.192) $(52.831)
Cash from Operations ($USD Millions)$(75.918) $(55.446) $(56.303)
Capital Expenditures ($USD Millions)$46.047 $58.361 $51.484
Free Cash Flow ($USD Millions)$(121.965) $(113.807) $(107.787)

Q3 2025 actuals vs S&P Global consensus

MetricConsensusActualBeat/Miss
Revenue ($USD Millions)$0.315*$0.365 Beat
Diluted EPS ($USD)$(1.48)*$(1.09) Beat
# of EPS Estimates4*——
# of Revenue Estimates5*——
Values retrieved from S&P Global.*

Non-GAAP (Q3 2025)

MetricQ3 2025
Non-GAAP Total Operating Expenses ($USD Millions)$58.195
Adjusted EBITDA ($USD Millions)$(52.831)
Free Cash Flow ($USD Millions)$(107.787)

Segment breakdown

SegmentQ3 2025 Revenue
Access fees/future astronaut related$0.365M (no segments disclosed)

KPIs and balance sheet highlights

KPIQ1 2025Q2 2025Q3 2025
Cash, Cash Equivalents & Marketable Securities ($USD Millions)$567 $508 $424
Cash & Cash Equivalents ($USD Millions)$140.763 $163.547 $128.789
Customer Deposits ($USD Millions)$82.197 $80.871 $80.198
PP&E ($USD Millions)$249 $305.878 $350.151
ATM Program Gross Proceeds ($USD Millions, quarter)$31 $56 $23

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Free Cash Flow ($USD Millions)Q3 2025$(100) to $(110) Actual: $(107.787) Met range
Free Cash Flow ($USD Millions)Q4 2025“Below $100” $(90) to $(100) Tightened/maintained
Revenue ($USD Millions)Q4 2025N/A~$0.300 New
Commercial timeline2026Research “summer 2026”; Private “fall 2026” Flight test Q3 2026; First commercial flight Q4 2026 Reaffirmed with quarter nomenclature

No guidance provided on margins, OI&E, tax rate, dividends in Q3 materials .

Earnings Call Themes & Trends

TopicQ1 2025 (5/15)Q2 2025 (8/6)Q3 2025 (11/13)Trend
Flight test & first commercial timingSummer 2026 (research), Fall 2026 (private) Adjusted: research into 2026; private Fall 2026 still expected Flight test Q3 2026; first spaceflight Q4 2026 (clarified by quarter) Stable with clearer timing
Production milestonesAvionics/flight controls testing; tooling installed; flexible build Wing/feather/fuselage progress; managing defects; supplier coordination 90% of structural parts for first ship by mid-Dec; fuselage pace setter; feather pushed to Q1 Progressing; manageable slips
Oxidizer tank & reusabilityTank production/testing underway Tank prep and installation; system qualification Tank qualified for life (4,000 cycles), supporting 500+ flights Strengthening durability economics
Launch vehicle Eve capability—LVX program introduced; feasibility with LLNL Eve upgraded; successive-day launches; 3–4 flights/week availability Operations flexibility ↑
Sales & pricingFirst tranche Q1 2026; price > $600k expected Reopen Q1 2026; price not lower than $600k Q1 2026 tranche; “likely stair-step upward” pricing Building yield mgmt strategy
Italy spaceport feasibilityMidway through study Continued assessment; government partnerships Ongoing; timeline considerations for LVX and fleet expansion Longer-term expansion planning
Cost discipline & cash flowPeak tooling spend behind; spend declines through 2025 Capex rising as assets built; opex down; headcount optimized Q4 FCF $(90)–$(100)M; per-quarter spend reductions continue Sequential spend ↓ pre-ops

Management Commentary

  • “We’ve reached an exciting stage in our SpaceShip program… first commercial spaceflight continuing to track for Q4 2026.” — CEO Michael Colglazier .
  • “Flight test program expected to begin in Q3 and our first spaceflight in Q4 of 2026… we are currently forecasting the first fuselage to wrap up just a bit earlier than we expected last quarter.” .
  • “Our launch vehicle is now capable of flying spaceships on successive days… targeted rate of 125 space missions per year with our first two SpaceShips.” .
  • “We remain on track to open in Q1 of 2026 our first tranche of sales… price likely higher than $600,000.” .
  • “We cycled this tank 4,000x and it passed with flying colors… qualified for the life of our Delta class spaceships.” .

Q&A Highlights

  • Pricing and tranche strategy: management expects pricing above $600k, and to staircase tranche pricing based on demand/yield; tranches sized to manage onboarding and pricing discovery .
  • Operational ramp: prudent ramp to 1–2–3 flights/week in first 2–3 months; machine and maintenance readiness aligned with a 125 flights/year steady-state target .
  • Schedule risks: remaining fuselage skins and aft skins expected in December; feather delivery into Q1’26 but not on critical path; focus on ground testing, verification (vs learning) for flight test .
  • Weather flexibility: chosen site (southern New Mexico) has ~85% sunny days; Eve can fly back-to-back days to recover weather losses and maintain cadence .
  • Cash flow inflection: positive free cash flow expected within 2–3 months after start of commercial service, depending on flight rate and blended ticket pricing across legacy ($250k) and newer ($600k) tickets .

Estimates Context

  • Q3 2025: Actual revenue $0.365M vs consensus $0.315M*; Actual diluted EPS $(1.09) vs consensus $(1.48); 4 EPS estimates, 5 revenue estimates*. Target price consensus mean: $4.16* (6 estimates*) [GetEstimates].
  • Q2 2025: Actual revenue $0.406M vs consensus $0.450M* (miss); Actual diluted EPS $(1.47) vs $(2.22)* (beat) [GetEstimates] .
  • Q1 2025: Actual revenue $0.461M vs $0.286M* (beat); Actual diluted EPS $(2.38) vs $(2.55)* (beat) [GetEstimates] .

Values retrieved from S&P Global.*

Where estimates may adjust:

  • Continued opex discipline and tangible program milestones may support higher confidence in 2026 commercialization and EBITDA ramp, while near-term revenue remains nominal until flights start .

Key Takeaways for Investors

  • Cost execution is working: steady sequential declines in opex and improved adjusted EBITDA, with Q4 FCF guided to $(90)–$(100)M; watch per-quarter cash burn trajectory and capex mix as PP&E builds .
  • Timeline reaffirmed with greater precision: flight test Q3 2026, first commercial flight Q4 2026; feather sub-assembly slip is non-critical path, fuselage remains key pacing item .
  • Operations flexibility improved: Eve’s successive-day launch ability is a catalyst for achieving the 125-flight/year target and smoothing weather-related disruptions .
  • Pricing power likely on reopening: Q1 2026 tranche with upward stair-step pricing; EPS sensitivity post-commercial start depends on flight rate and blended ticket mix ($250k legacy vs $600k newer) .
  • Economic model intact: initial two-ship fleet targets ~$450M revenue and ~$100M adjusted EBITDA at steady state; expansion with LVX and two more ships targets ~$1B revenue and ~$500M adjusted EBITDA .
  • Near-term catalysts: confirmed parts deliveries in December/January, unveiling of new digital presence and astronaut portal, Q4 spending discipline vs guidance, and Purdue 2027 research mission marketing visibility .
  • Risk monitor: composite part fabrication/assembly variability, supply-chain timing, and capital markets (ATM usage) as the company balances growth capital with dilution; spending control remains central pre-ops .