SPCE Virgin Galactic

Michelle Kley Executive Vice President, General Counsel and Secretary
George Whitesides Chief Executive Officer
Jon Campagna Chief Financial Officer
Enrico Palermo Chief Operating Officer
Adam Jonas Morgan Stanley
Robert Spingarn Credit Suisse
Darryl Genovesi Vertical Research Partners
Call transcript
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Good afternoon. My name is Jason and I will be your conference operator today. At this time, I would like to welcome everyone to Virgin Galactic Fourth Quarter and Full-Year 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Instructions] [Operator

call Secretary Kley, at conference General Vice be and Counsel Virgin will today's Executive Michelle President, Hosting Galactic.

As being a recorded. is reminder, today's call

Ms. like conference I turn Kley. to now ahead. Please would go to over the

Michelle Kley

with will George and Campagna, and of is XXXX are Chief quarter George provide Jon Financial you, Galactic's Enrico me Executive with Chief call. full-year Palermo, be good prepared available to Officer Officer, earnings Welcome Thank Operating Virgin everyone. Officer; the fourth Whitesides, will With conference questions today along afternoon, who answer me and who and portion to during remarks. Chief Q&A Also the call. Jon

we the available our full-year overview today, a of a Investor fourth made XXXX. and provides and slide on highlights financial quarter an Earlier business presentation and for press Relations issued release our website, which

certain today’s statements forward-looking within will the we During of securities call, laws. make federal meaning

and are a expectations about could Forward-looking statements future the events predictions, are cause are actual subject that this result, assumptions projections and uncertainties. to in materially risks communication. future events Many statements forward-looking from differ and current factors other and, on to based statements as

on Exchange Commission. about Securities the statements, XX-K release as the Company's subsequent to actual may addition that differ from Form with that the Risk earnings with materially as well filings we in Securities file and and the forward-looking For cause Report we of to information please more Annual the Exchange factors to today will refer results press Commission issued the section Factors

to made. put are date statements. not only undue cautioned Forward-looking as forward-looking statements speak the are they of reliance on Readers

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George Whitesides

our be to first I with these a space Both make you, transaction listed am call everyone. completed York Social that everyone now delighted and afternoon, New the Exchange. to continue open steps as Thank we Stock we Hedosophia towards goal. reaching for Capital are our hosting have that and Good and major our mission to events public of great are company, earnings progress on Michelle. forward

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our we Our customer offering have highly sustained our seen interest founding. base since in is and engaged product

representing deposits, in X,XXX $XXX February XX, of to doubling last since revenue. a as of continue than and million XXXX. $XX Registrations in over our pace interest approximately at and at XXXX, stand of reservations XXX rapid over currently million have more We potential update grow

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Jon Campagna

Thanks, George.

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George Whitesides

Jon. Thanks,

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member. daily every hard and today each reflect the work of achievements Our team

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begin we of Instructions] will line At time, [Operator first comes this question our Stanley. from Q&A. Morgan Jonas Your the from Adam

line Your is open.

Adam Jonas

everybody. George, for Thanks And question you.

upfront, you Just share the of what do think kind here? of price

George Whitesides

the everybody. heads executing we're we're is engineering. going with engineers, team keep at what I and and Adam, and space to that's best our and be you. Hi, full And just keeping think hi, to down focused on of on, what we're our just really Nice focused run

So what think. that's I basically

Adam Jonas

I of there's it's could to on One you got items program appreciate items and and whether potentially the of balance the I established the S-X. a because moving lot then cash Step that related Okay. some kind that. asked continue Small sheet that you the up, clearly

even time But wonder, it. in that you really best referring enormity first-mover really the is related you specifically raising don't don't and an it, this why potential Can a market tell want to sometimes you opportunity exercise investors that need might opportunity need logic warrants the as capital need beyond when conditions established And don't given some capital presentation, more the volatile here? to raise what you've to use don't you potential is saying for more? the to I'm transaction. raise given the opportunity that advantage, I not excellent of to – But us

George Whitesides

But That what's strong mean highly and some we back phase this that is developing us and in I first is I Adam, phase can opportunity we that part California Mojave, more some right that ever subject of the are a in technology have that lead is that's a as that that future really thinking thing in we exciting that have transform in the that profitable. initial ways even something really of folks market. of is can hard believe met. smartest that think the is the front Galactic team global places. exciting other about about they're into now. an market And working I've And transportation we on

right about been we're take our think by forward and the process entire it this. process. I we move around that thinking roll we'll keep and I forward We're really to as a now, focused opportunity look in I go people look thinking we're think going I've to about excitement we going think so we information the that we're have I planet. market situation carefully more design and sharing And our felt to But approach But really how with monitoring. gratified out. share And price, the be transform on the the to engineering. like, how to really always, staged by this the as gratified at


comes line Credit of Spingarn] Your [Daryl from Suisse. next question the from

Your line is open.

Robert Spingarn

Rob It's Spingarn. afternoon. good Hi,

George Whitesides

Rob. Hey,

Robert Spingarn

couple questions I Hey, of got you. and both a of for George, Jon.

George Whitesides


Robert Spingarn

of the thinking One pricing to tranche what Step planning George Small you're how large seats that start to next wanted that I kind be about? ask and of and I would you're with you release

George Whitesides


focused sharing strategy of I the Step rollout very So Right that's over course both will mean, seats the year. program. pricing our the And I be Small premium we on a now, important the that of number of be question. on information think, we're more and the releasing very we will

and it of little X,XXX was you X by X,XXX roughly it surprise to today, was And sort top, hundred of a forward have now to the of then with what right? X by leaps bit $XX folks the mean it's up really and we've I And which who it exciting is, the who've a to because as to market our I over think, just by we're we've up a expressed way, a us, buy a we're than that that validation at trying that's a few bounds. to me looking trying do around I million what of – great folks the this funnel, million sharing – if sort just frankly of So have what to with desire to net build. a And folks ticking recently have started think worth. had going a you really and then been up approach ticket say less million, like

funnel, you go future people is to put either you $XXX business. folks then the or the who they this of want level if of representing group about of number group the that of of you deposit full if million next have who've that large okay, $XX think, to million, sort these is a the buy So substantial afford sort already said XXX down of $XXX of first people down it. bottom deposits well and And can million it,

through to But to to of think trying there. see in today help tremendous jump allows sales for what What eager next is basically we'll people, to too just we tomorrow, constraint most identify our going we what tranche we've tranche And the just we're ships, another forward, we're that may we announcing is because are is to much that and to do of five a these which it's the us market. and because build obviously go start while the capacity folks in think who it's amount adding be customers Step expressed open to as really a flights. that do, on a Small we a supply us our even chance for we even prospects funnel to and move our the we're not street, past if in business in

sure so really make folks. focused want And we're to we on

premium this do validated the market as back last that Moses is We phone the on the seeing of we're year. we'll be interest that great we a by Beth higher with on – well terms extreme justified offering as price in into the know, think of folks Now pricing, the that product point. going many that's the plan as and

Small connecting with out know the that thousands great said getting that that talking course really we're be right, buying have that in these And in more over a focused we'll Step rolling interest there's who of on ticket. it and introduction they're and Today, year. of So having about that. lot the interested of a that people of a we

Robert Spingarn

we to queue to… Okay. wanted And if I ask you back could here, if I'm still in go the

George Whitesides

Fairly, are. you

Robert Spingarn

more. Okay, good. I have a couple

George Whitesides


Robert Spingarn

go XX, talked the you we three back about the to Slide areas. If

George Whitesides


Robert Spingarn

influx you get updating this are flight the as still the those perfect everything vehicles, you the And it. test as you schedule what are to and and for like sounded readying on schedules the as a to customer the it you’re key get so that get to experience flight? three you before need commercial when gating items test through first program, need mid-summer, little And bit among

George Whitesides

as we number That's number is fly, one what in flight Well, Sir anybody program. our and employees our the organization fly fly pilots in XXXX. you one as the know, fly Richard That's that What know, Yes. our fly into but to really our we know just is not priority space or flight we're priority that safely, the were entire test that we late commercial priority. number one whether on Richard, it's top a affirming priority. today, – you that's is Branson they might to

don't detail a about of talk bit I these breaking bit in during remarks. terms it a three those out little more areas. mind little did I

we a really on hard lot on suits of be But going the terms the It's in you to the It's things. really experience, experience. are even – you're experience, those seats flights all before do spaceport those and experience just the of get obviously the on to rocket-powered In of some there's to all not finishing [indiscernible] it's experience. a glide to of the the obviously between some flights terms and of needing phases. the focus flight test program, – customer the the be ground end-to-end lot working in-flight also and the of cabin going and

vehicles comments. the for readying is high little thing my a third about that bit the then And in long-term I rate service. talked

we going to a we company big that make this thing not XXXX a really success. a ultimately focus revenue that great it market. going around of What's is we to a vehicle a and know into we turn of can a then that's make so in fleet So that generate the rapidly do and great make add having because to amount want success that really them, can the is on we capacity build that a more relatively basis, consistent

So on that focused those are going really go to forward. the we're we be things as

a Mexico able to way technical a deal the also go Spaceport New to-date, spaceship going moving great a in to that, points both program, had milestones. and through America down to one as thing, on down but have we program there. It first readiness. keep that big test key We're was hour. getting we've Mojave with the look our progress build We do because communicating Unity forward on say as I a big a to on operational three the We're down. some people down we the was will updated it And was basis, flight test deal. vehicle

deal think on building joining the soak but team folks the the I now also already have cold particularly Mexico XX up. way, around relocated, of a who have team, hours three New a there had – We in for big team had,

down we'll both New able milestone vehicles it's the Mexico. flight, next So above be to next free Mexico New really what big Spaceship I'm where glide Unity have And in a flying focused on see sky. to is,


Your next Vertical Genovesi Research. the from from Darryl line question comes of

Your open. line is

Darryl Genovesi

Hi guys. time. Thanks for the

George Whitesides

Hey, Darryl.

Jon Campagna

Darryl. Hey,

Darryl Genovesi

the the is at X% the I Steven in Hey. progression market you whether X%, make around can't how room, George of you test to of addressable plus and elasticity I how of price as sort or where think guess, million the sort from points I to if look chart you show proceed ultimately $XX or to decision when your of to but the to not initial want that plan help, down path? the you

but thinking just how any wondering give as you sort Do progress around going we you're specifically? some the us of forward said the how get pricing to thoughts to on you have more year, – progression through comments about you're

George Whitesides

Obviously, test it. Yes. on probably to very can I that focused ways pricing mean public you and use both a we're you're there's aware private and elasticity. market then variety that of

the some of the this on have We world stuff. advisers in best

so different few methods. using we're a And

is of a people what flying are things think with amount There to clear a desire flights, or on with – large, there's people want that. like huge but folks there fair Richard a to desire a a who flights, I other get be with themselves. They're that. however we people. to by see The that us. to there's will of is And who then charter is who fly like love is fly couples even number in special define fly early you

premium This for I think maybe there's will well. experiences. we be in good a to single won't for variety that layer ways experience add great of pricing be that a also where types as of like going of so company be thing, packages sort customers, really able different but to the And we the

cheaper for research to The than exciting is seeing is trying in market very orbital an that pricing to if we're great. facility. the that pricing obviously, still Even hugely up good other is the us, thing it's is something that send

progress good And on kind funding on some – they well. so talking And are of able we're that. document that. human-tended flights NASA I as course, going that human be about to – out tended put think on to of They is make considering

I a So premium think pricing. lot of opportunities for there's interesting


would conference this we XXXX concludes like At today's conference joining thank call. time, call. and Virgin for quarter everyone to earnings full-year Galactic's This fourth

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