Virgin Galactic’s carrier aircraft releases its spacecraft Unity during a glide flight test.
Virgin Galactic delivered first quarter results after the market closed on Monday, announcing that it is evaluated the target date for its next spaceflight test, which the company previously planned for this month.
Mike Moses, Virgin Galactic’s president of space missions and safety, said on the company’s conference call with investors that the uncertainty stems from “a potential wear-and-tear issue” identified last week on VMS Eve, the aircraft that carries its spacecraft before launch. The part in question was scheduled for maintenance in the fall, Moses said, but Virgin Galactic is now studying VMS Eve “to determine whether we need to take action now.”
“We will report back to the market next week with an update on schedule implications to our next flight,” Moses said.
The space tourism company reported an adjusted EBITDA loss of $55.9 million, down slightly from a loss of $59.5 million in the previous quarter and below the adjusted EBITDA loss of $63.6 million expected by analysts surveyed by FactSet.
The company booked zero dollars of revenue in the quarter, as it did in the prior quarter. Virgin Galactic had about $617 million in cash on hand at the end of the first quarter, down from about $666 million in the fourth quarter.
Shares of Virgin Galactic fell more than 7% in after hours trading, having closed down 8% at $17.95 a share on Monday.
The stock has fallen 24% year to date – having dropped more than 70% from highs above $60 a share hit in February.
Virgin Galactic’s stock losses accelerated over the past two months after delays to its test program, as well as share sales by chairman Chamath Palihapitiya, founder Richard Branson, and Cathie Wood’s new space ETF. The stock also fell after Jeff Bezos’ venture Blue Origin announced plans to launch the first crewed flight of its space tourism rocket on July 20, a move which UBS warned likely removes Virgin Galactic’s first-mover advantage.
Andrew Chanin, CEO of ProcureAM which holds Virgin Galactic in its Space ETF, told CNBC that the lack of certainty or timeline around the upcoming test flights means investors are starting to have “less and less patience.”
“It was okay [that was] the case a couple months or even a year ago, but now with Blue Origin kind of right on their heels … it puts some competition right in [Virgin Galactic’s] immediate way – and it now seems like it’s very likely that they may not be first to market,” Chanin said.
The company is working to complete development of its SpaceShipTwo system, with four test flights remaining before Virgin Galactic begins commercial service in 2022.
Virgin Galactic attempted the first of those four spaceflight tests in December, but the mission was cut short by an engine anomaly. The company scheduled a repeat of the flight attempt for February, but then delayed to May to give more time to address an electromagnetic interference issue with the spacecraft’s flight computer. Virgin Galactic said in its first quarter report that it completed corrective work on the issue, saying VSS Unity “is ready to start pre-flight procedures for flight.”
The fourth spaceflight test, expected later this year, will carry members of the Italian Air Force for professional astronaut training. It will be Virgin Galactic’s first “full revenue flight,” with the company disclosing it will generate $2 million – or the equivalent of $500,000 per seat.
In the meantime, Virgin Galactic in March unveiled the next spacecraft addition to its fleet, VSS Imagine, which is the first of its next-generation SpaceShip III class.