Virgin Galactic earnings Q1 2020

Virgin Galactic’s spacecraft Unity comes into land during a glide test flight on May 1, 2020.

Virgin Galactic

Virgin Galactic reported first quarter results after the market closed on Tuesday, including more than 400 customer deposits the company hopes to turn into space tourists.

The company logged an adjusted EBITDA loss of $53 million for the quarter, just below last quarter’s $55 million loss. 

Shares of Virgin Galactic rose as much as 9% in after-hour trading from its close of $16.62

“The COVID-19 outbreak led to an unprecedented situation for companies and individuals across the world, but I am encouraged by the commitment displayed by our team in helping to support relief efforts while making program progress. We remain focused on our strategic goals and our path to commercial launch,” Virgin Galactic CEO George Whitesides said in a statement.

While Virgin Galactic said it temporarily suspended its operations in March, it “resumed limited operations in April.” The company said that, currently, “over 90% of employees whose work requires them to be in the facilities are now working back on-site.” Whitesides said that the company had tested 579 of its employees for coronavirus as of May 1.

Virgin Galactic will hold its first annual shareholders meeting on June 2, 2020.

Customer deposits rise

The company said it logged more than 400 customer deposits in the past quarter, representing over $100 million in future business. Virgin Galactic took its first step toward reopening ticket sales on March 26, when it unveiled that prospective space tourists could pay fully-refundable $1,000 deposits. Those who make a deposit will be the first offered reservations for spaceflights once Virgin Galactic begins selling tickets again.

The company has not said how much tickets will be priced for once sales reopen. Virgin Galactic has 603 reservations on its books, with the majority of tickets sold for between $200,000 and $250,000 per person. But Whitesides has said that premium pricing for new ticket sales will come later this year, noting that “certain types of special flights may be priced higher,” from $300,000 to $500,000 or even $1 million per ticket.

Virgin Galactic founder Richard Branson models the company’s new line of spacewear made by Under Armour.

CNBC | Michael Sheetz

Virgin Galactic’s business model falls in the realm of luxury experiences given the high prices of its space tourism offering. The company is in the final stages of developing its reusable spacecraft, which can carry six passengers on a 90-minute trip to the edge of space.

Testing continues toward first commercial flight

Virgin Galactic has conducted an extensive series of test flights with spacecraft Unity since 2016, from unpowered glide flights all the way to two spaceflights in December 2018 and February 2019. After a year-long hiatus, the company in March relocated its Unity spacecraft from its testing facility in California’s Mojave Desert to its operating base in New Mexico. On May 1, Virgin Galactic’s Unity performed its first glide test at the new location. 

The company previously said it expects to begin commercial operations this summer and aims to be profitable by 2021.

NASA partnership on high speed travel

Virgin Galactic also announced Tuesday that it signed a “Space Act Agreement” with NASA, to help the company’s development of long-distance hypersonic travel.

“This Space Act Agreement will enable NASA to collaborate with Virgin Galactic and The Spaceship Company to allow our organizations to take advantage of new tools, techniques, and technologies developed over the last 50 years and to explore potential new solutions for the commercial aviation industry,” Dr. James Kenyon, NASA’s director of Aeronautics Advanced Air Vehicles Program, said in a statement.

Virgin Galactic and NASA will initially focus on “vehicle thermal management and propulsion system options in the Mach 3 -5 regime,” the company said.

Analysts have noted that it will likely take several years for Virgin Galactic’s high speed travel plans will come to fruition. The company’s long-term plan is to leverage its space tourism technology into developing a vehicle that can travel around the world at many times the speed of an airplane.

Boeing’s venture arm HorizonX took a $20 million stake in Virgin Galactic last year, in a similar partnership to help Branson’s company develop commercial hypseronic travel.

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