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SPCE Virgin Galactic

Participants
Seth Zaslow VP, IR
Michael Colglazier CEO, President & Director
Douglas Ahrens EVP, CFO & Treasurer
Robert Spingarn Crédit Suisse
Douglas Harned Sanford C. Bernstein & Co.
Myles Walton UBS
Oliver Chen Cowen and Company
Kristine Liwag Morgan Stanley
Noah Poponak Goldman Sachs Group
Michael Ciarmoli Truist Securities
Peter Skibitski Alembic Global Advisors
Call transcript
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Operator

Good afternoon. My name is Nadia, and I will be your conference operator today. At this time, I would like to welcome everyone to the Virgin Galactic's Second Quarter 2021 Earnings Conference Call. [Operator Instructions]. Thank you. will Zaslow, call Investor President conference Relations. today's be Vice Seth of Hosting

today's recorded. Zaslow is like a call As reminder, being go the over Please to conference I to begin. Mr. to ahead. turn now would

Seth Zaslow

you, Galactic Quarter Virgin XXXX Welcome Second Call. good everyone. Conference Thank and to afternoon, Earnings

are with Executive Colglazier, Officer; Officer. and the call Michael Financial On Doug me today Chief Ahrens, Chief

will Following call the we open prepared remarks, questions. for

as about issued our press hour the and is that was on accompany website. Our available remarks. Investor Relations will ago an is presentation slide release today's

presentation, Let contains to me refer Slide you safe X of disclaimer. the which harbor our

uncertainties. we During factors events actual differ assumptions, call, are as could based materially forward-looking current to forward-looking statements from may call. today's and statements. this and These subject statements made Many make certain are on a cause and expectations result, the on risks to

with section cautioned Commission Virgin Risk time information company's Form more to refer time. Galactic For the filed Securities these please about of are filed Readers by the uncertainties, to other documents and the and Factors not from risks XX-K may we and put discussed Please non-GAAP on forward-looking statements, that any obligation today's this and during to financial will that call. to refer update on undue to also forward-looking information statements company note specifically call. the the reliance disclaims be certain Exchange

would With to I to comparable over GAAP most that, financial like measures the the find earnings can measures the our press of You release. non-GAAP reconciliations to Michael. in call now turn

Michael Colglazier

we've tangible our launch. readiness technical Since successful the confidence commercial our which in We've operational everyone. achieved been approach. our consumer call, interest and extraordinarily of our has service, an for reaffirms also company. It months Thanks, good earnings on and X gathered deep path milestones our in significant afternoon, evidence Seth, and towards active last for

Moses the perfect gave arc of we crew was engineering a in share and viewing spaceflight viewers with Bandola, untapped incredible experience around the the achievement. to years innovation, as a created, validation flight full through the Our design in in America, broadcast. After the and global spaceflight this of a we successful brand as XX stream further customer our we've Serica gracefully attract Unity Unity power a center landmark demonstrated of above XX us human executed us readiness, able position of excitement the them. Branson return we XX feather feedback proof our July and Beth from over The were streaked, and the back flight market cabin. our the enthusiasts to of of for event the confident research, Earth again towards more world experience significant the extraordinary VSS once to makes Richard to Watching with the television and live into got space inherent and safety Unity system. globe validated and the global wonder and even Spaceport our atmosphere, Bennett, enjoy XX Colin live million and response technical

XX will our goal, results to we commercial to we Unity place 'XX. their in service we flight opportunity as are of to list excited passenger we test hand spaceflight successful promised our to sales early who announce be significant Unity Spacefarer open the as to first Community today given will from our prioritizing July, towards May immediately that ticket launching space. the and and raisers, reserve With completing XX advance And program closer that in in stepped

want to share have the purposeful people range We of satisfy experience. offerings product different ways in a order to this will

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Seth Zaslow

everyone. and Thanks, Michael, afternoon, good

few quarter, with broader the like on for results our a financial to strategy. Before I review I'd the comments financial begin

Turning to Slide XX.

interest incredible our and daily the XX from to objective from just enormous around heard the flight Mexico, cadence but for a reinforced address spaceflights, globally. world. locations near To and that offering New there from long-term Michael, to is to demand response demand, our you begin the is operate Unity As not of multiple

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share call. expect more the We in to future plans these on details

common Slide $XX.XX. month, price million announced approximately XX.X the at at-the-market connection an shares capital average of to raise intent we million issued through equity of or Turning to offering. In ATM with our we our $XXX XX. Last via this offering, an of stock sale

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quarter of as took costs spaceflight investors cash adjusted to balance us, the an another remains with and as an for associated and billion, with remain we has a We been human they and for $X the topic offering. are represents of end step I position. provides of our further our incurred. development capitalized our the cash strength the our growth spaceflight last balance month strengthens over future system also well equivalents moment -- discuss date, sheet system. expressed second for proceeds Our that the area of policy have from capitalization interest some which our the and to expense take in, July of To to want the

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cash $XX results Let's flights the second as to the working capital review our due prior million was Free of million, flow of $XX quarter. well a primarily to the as for XX changes. acceleration compared marketing approximately for expenses use of Unity guidance

Looking approximately dollars. anticipate million of quarter cash third we few negative $XX minus ahead, plus or flow free million, a

expenses quarter plus the loss in of the in period. like change fair in million second the and prior million for compared million in income flown compensation completion negative to well XXXX. million quarter attributable to services. the earned $XX increases statement. loss Total net Unity the May value million Total million to back stock-based were EBITDA primarily to to in the net compensation operating stock-based was technical million XX period. of $XXX,XXX negative compared the compared increase to to other the in I'd certain GAAP quarter increase attributable related as operating prior in year generated We expenses non-GAAP the expenses were was for to payloads, of now to of $XX the Turning Michael. payload loss operating in revenue a $XX prior The the The from to the second Slide compared quarter $XX and period. related higher expenses. warrants, year of milestones $XX to was GAAP million $XX were $XX in year as call was hand XX Adjusted revenue in $XX expense. which on noncash

Michael Colglazier

Doug. Thanks,

XX. Slide to Turning

experience. operations, technology. scaling want We to customers new adding power demonstrated the and expanding a the to X success now And consumer We've brand on to months. our world reinforce of take of our intensely focused moment footprint the of to last our our the Before moving community. showcased emotional our outstanding we're to future I the astronaut success safety Q&A, and

continue As experience. on and our focused out flight we fleet deliver expanding facilities production move an to our test areas: stay ahead, consumer demand programs, and we as completing and capturing and enhancement through expanding customer scaled we'll operations build X and incomparable key

the is an awe and greater in humanity opening global wonder made travel bringing to and human are access an exciting for the we to that the consumer it's time at This and this response. space level incredible goal. an sector door We moment unprecedented and quarter, space progress to And enormous There's towards for exploration. company, tremendous also momentum of innovation this and large. a

are not history We watching just made. being

We clear to of a The sleeves towards begin part question-and-answer are achieved portion Operator, are it future, exciting am ready and the rolled to have it. we've milestones we're of be and I the recently an making we our thrilled happen. progress now up, call.

Operator

Instructions]. [Operator

question Spingarn Crédit first today Our comes Suisse. from from Robert

Robert Spingarn

especially and at Doug, this date in to and progress July. the Galactic congratulations to everybody earlier Michael

What the questions. about What you of the talked in for capital couple out that? a what's experience Just campus. building -- the expense

Michael Colglazier

the in that of design right We're now. phase

As really that. experts team you in a of for we've know, world-class brought

on that So we scope landed haven't the of program. full

disclose that. So nothing to on today

place first use will up take for Rob, Spaceport play into we the people that I and that as this a into basically of volume at every to mentioned, rate as its I What spaceport. we that frequency America talking rate, And used port. lodging. we spaceport model, fill we that with short campus spaceports be higher want future own America up more that The that with we're the the will in the while in with program line and for we'll start we is the Spaceport run housing itself. But around in our about place, to reason, training When a the into combines is the to off that think, prepares need think training as one in the and much we real run, short journey. it base for campus forward for space to higher -- run short broadly we departures. the well. campus people be move that's moving why get build will world in have And

I that going the come not about mentioned, memory away down. for people and life, and up this product our just is real is As with

we the That so we want we're about thought thoughtful preparing for so sharing together. campus more sure forward make will and the it about, of to go look as that into about we're And to it people that. design comes talking

Robert Spingarn

then Okay. couple Delta the for commercial ships the on be And to today, that just think I ready should a things And XXX When of have you about XXX when these all be were little could guess a flights I out timing. if plan accommodated which based on fulfilled? if that roughly be deposits Class then XXX flights while by those expect full, we laid you service? the on tickets ago, might

Michael Colglazier

And that sharing those and XXX phase you initial will frequency that by that, Unity why Unity our future the really have leaning ships through Imagine as carried that flight on of of heavily flying on getting demonstrated that's the strongly will today talking up that's Eve. astronauts kind for you our and Eve. ramp-up, we're in Class and of well been the using it. Delta into But flying us and other the run, Unity all and and short for has those carry really spaceships. the is the will sales be so opening be around mothership, the clearly on which demand think long-term Imagine to hitting are Well, Eve we're key we going why big heard XX, lift We as to

late and scope. as with And first also a XXX quickly to will so well. that's let improve path side from the why quickly. Delta in we're facilities to production taking you the those as time move Getting some raising on see the of to out forward the need possible, was our engineering manufacturing big team more those us there. That the people an win where ready us capital be those coming get house, Class to enhancement with period in rates move rates for of funds a up to for but will we're that going to extended the go we into expect us the this for us came as that July And that's

Robert Spingarn

sounds like more that? it time So you put can't beyond really that specifics any frame around

Michael Colglazier

for that share think, be strategy good ships, the for tried what to that out the bringing are look What I I Delta Today, new specific be Delta the I forward one for Yes, production we think towards Class to that to the the sharing and the us we new Delta but the we our today. that churn on is use won't class. all, laid for Class as existing mothership some we we'll expect we also aligning say be. day want energies share rates and a on important it what we programs can do company, and won't be our we'll clearly them. programs that specifics kind program to you We have today, of

Operator

comes Our question next of from Doug Harned Bernstein.

Douglas Harned

capital this the thinking talked and part when need Doug, -- is and of $XXX million of the mentioned future expansion. you the you for about about raise, spaceports

space the factors when this as is white some you about location my a guess you've a opening decision? into So thinking frame do look that of what's to time next sand been when a what up? number financial forward, you're reasons. that for But go thinking place about And would for

Michael Colglazier

I that kick in Doug, do on you one? if mind

Douglas Ahrens

Go ahead, Michael.

Michael Colglazier

of in ships initial to Class per America. be ships facility going following Spaceport coming of building out other. towards to clearly multiple through, ships going production and building our each that year move will out first we're a sequence Doug, production we're But a the kind a focus Delta quick right, facility the

the out fill So the heavy then so against out to will behind ships as on be kind for next that, of spaceport. of America, be should that, downpayment able go year first Spaceport one put kind we a able we we finish After forward. to and as that we

to directly, Mexico, to indirect looking What bring year, we as move 'XX. high of reasonably not value we period. the that for a time this are in next the that New both for also in but but research So a I benefits accrue demonstrate These some think be will where the doing our long is business flight lead spaceport will lots in rate I really will community cadence early be through expect important is rate that flight will to items. to that go, would we will market spending we

I to jobs. that other That think will bring think businesses. can for of high the interest will ancillary that we bring communities kind move additional will additional fully functioning And that product, that. I spaceport world have with around

of a standpoint. kind research we know go we from about to that and So how negotiating want

interesting. You asked places be are what that would

of unique. very back of a different having at So in spaceports each be around think up from and the they seeing upon a and out parts very of would our places call to space, different world, bring when look I we people think right? different also the the the campus varied I from future, create will be look I Earth different that we each will Earth other.

do a the And multiple what we year us we the our assets is would part we the someplace has could Southern very so great let's of feel one able take Middle south -- places. of what from motherships the different weather get than What see would not we might can the speak, Europe. to Europe Asia to year, be part the of for fly we where of So be potential East. interesting best spaceships would even weather the do but and might if the the utilization that other great going system and do to we Southern winter, of from great we out or allow are what from do

I will but would while the incredibly -- each the will that at wide function be of unique. the the locales, and we put will of way open I interesting we've spaceports, got path emphasize spaceship really same So be us a them to each experience around think different, those

Douglas Harned

of are surface, about And And experiments, for total? the the microgravity being then the of the fit time. sense seeing, sort look What experiments tickets when in you at of experience? seems do microgravity a me the see to when the interest this does to how number what experiments, not of you you're that that it weightlessness, fraction minutes you with of types a talk X on long X

Michael Colglazier

has in experiments. very are just, bit what research the go sounding little about both the research, places, goes market think, a which X talk up that high traditionally Let's from G-force that can right, microgravity I impact been a rockets, to

in So more you that not limited very limited before every research experiment get can do like airplane or flights X-G duration.

cost. Now multiple magnitude right, of higher on lots go orders that's to in up the of time space and and far side in have of can that, station, microgravity, you

so the open ability outside with that is have themselves to a that's than you're you'd the spaceflight a And see first what space of suborbital station ability X-G the piece, significantly the calmer the seeing that's the And system we has to be a new on market breakthrough. longer a for that big time human-tended. up system and significantly in what experiments

the And oftentimes, size be part, often can microgravity call experiments experiments actually coming cabin. is in So put for the payload flight? the a are for Unity research seat which for flying handheld. There racks as researchers when a of you fit like rack, take tested Serica space will be there's we us how known one human-tended These I'll in seat X Kelly industry do most the the then a within basically on will forward. that have. other in seat capacity And it, use standard Gerard that what's human-tended every their of the payload folks Band will XX. a that we that

of experiments. see when running subpricing. little a So talk about we microgravity $XXX,XXX of that for you where That's it can kind bit, seat that's on those types and subdivide a research you equivalent per

priority have There's fly our lot bit. astronaut many seats, that think, some vary definitely in waiting how of to a markets. of do I future of to been want a each We for will to our our people So communities. space

most science halo community, platform the it to into will and benefit the think I community. we're important it that astronaut But appropriate as scientific it's also the is benefit research think well. research to will private doing I market we'll that market. the So our do It on really brand what for clearly priority give brings a

a So balance. we'll keep

Operator

of next Our Myles Walton UBS. comes question from

Myles Walton

color pace the flights of time on sort lead the Inspire. or time between on operations the separation for thanks and Michael, of

whole update maybe walk limited So the up. takeaway for of I if maximum sort schedule, should also, in Delta XX flights XX you the Is year, that your implied a the flights I the guess, of to a back can But revenue then until I Class you're there. have? an XX of talking give shows guess in XX. And

Michael Colglazier

-- through to numbers go the you give I Well, happy again.

Allowing Eve is out modification material period this flights targeting as step and a effectively to and we got step. what fly will out as single schedules and probably these a you Imagine and than go the XXx down big the them be moment. as more because, there, period mothership durations Eve, You maintenance inspection flight enhancement come we have know, think able Unity win come is of longer forward-looking for through us, before what we'll today rate what that goes being this the for we to we have pretty for at be

this hear at and ships benefits need Imagine we're Flight market, kind such the as really as That's will why the where going mentioned, actually be manufacturability. the we've of towards demands beginning. the following confidence of manufacturing to shift for The possible. us So total and historical to prototype of built to Delta and fleet we we're move program. addressable pleased the in putting platform quickly that get energy one tied off, out we for to we Class a you wave engineer Unity XX, Unity as to production with design

So you mentioned Inspire.

paused Eve have Delta impacted to ready. But attention be we're Imagine. I when Inspire yours clearly COVID. towards now, would putting prioritized take and forward Inspire pull as We've Unity, has everyone's Class energy our by the and we is where resources will deploy Right capital. our and been the We we still those going against

Myles Walton

question one then And Okay. on pricing.

is You I will price. both the dynamic to guess, pricing do as said be? relates And Spacefarers? starting it the you pricing How being $XXX,XXX how the beyond that, curated the then anticipate

Michael Colglazier

Sure.

vehicles. and buy consistent out for all starting astronaut goes experience. on flight. against for price that full $XXX,XXX be for the will flight, premium example, the is of the each will purchase modest that. we kind be, that the of And I'll wants put part, tranche will beginning on seats it, through There carry point that out. We of be of our that kind as right? call we'll a But specific someone reasonably an most said pricing private where the I if tickets You a tranche a to

proposition, I've I while product. is think this think expensive as people said that to don't understand The allows this -- I an before, price. is our about

glimpse of that is that's XX into to experience, the looks someone question really the we are think does really why the Galactic with emotion will able value, at Virgin into the the start taking And signs and us. mentioned of and the about up at I what that thrilled the get be to always itself. world value share Unity it we and customer as like for spaceflight moment broader be a view,

we so life our to the to the your astronaut membership, of Earth. And about up list is will bring you behind journey there. our starts that the are of priority for for future come their that be will that continue because so the that, that them Spacefarers for emotions the make convert, it people that on fleeting looking this effort you'll will who sure moments relatively there So into that and full powerful lasts share life, strong that's the is memory right and

energy the think So come like be an that, and from against incomparable. is approach our that will this will I value

very looking where value want confident point price there. we in We really for regard. that is price we'll at the feel relationship be what having this factor so And

Operator

of comes Oliver from question next Chen Our Cowen.

Oliver Chen

potential on your tickets well What's and think relationship should what experiential customer your and you about may The demand the Also, in mind very may about what revenues so right our thinking and long-term surveys that of Congratulations pricing in experience, thinking pricing, given terms in constrained, also, sell? as on? as are about was we more terms constraint. focus and well? in that framework you're community indicated a that customers supply it's given how value of as much beyond And -- broadly tie first the driving of a well. we as there's and lot number What as of the leverage that you supply the pricing? lifetime

Michael Colglazier

Thanks, Oliver.

Let's see.

value it So the value creates obviously value shareholders, appropriate as it want this the experience drive people again of us. for that and price for but understandable a and to a want our dynamic journey who again, self-perpetuate a machine demand-making to such bring family that's and can't the do we that very that and to kind drives repeat and want do help have want for friends great recommend referral We company and becomes price is that a delivers it, itself, and price with to us important. their

came up that a we the this that involved of in through blue excess for books to The from that focused degree, value, tranche Obviously, that's in of coming away, capture see there's don't we have you keep So And on the people. is priority call of moment going They're we're been to about all of once-in-a-lifetime while. call and very and it, I'll new that. volume concept room keep out response be open tranche advantage information goals. building the for mentioned putting that X,XXX that the up I Oliver, It's shortly a of ahead it we'll we're we a But the more lifetime it's tickets our group, flights we us that we've handraisers being a to list achieves communities. and we'll will those price pleased seen and ongoing a allow so are to and we're in really a to to will clearly, think use supply, And so really it, a next and aware this priority us moment. priority to list then to I ramping demand then beyond our offered take and that wanting demand, as have. supply a of set list thoughtful purposeful, create ticket Unity asking a place part point this just be spacefarers move you'll a XX. or we early also of starts for up that, that. This be on good incredible ramped for want lifetime we're is think of think by of. always

a lifetime it's be that to think will I moment wanting be shared.

lifetime think value think so several in ways. about you I can And

how come will of the will normalcy One future of community, not just successful think share will is people I agents it sales, sales natural will through bring back, us, experience. sharing far, outspoken human to it as was, only move how I it I to them very spaceflight. the it the in and people them into think people experience concept being And the right? I astronaut be think and a the be, wonderful graduate for let they're say and going won't they astronaut most will by call

bring So after as all and demand out addressable what they've are them in, community I go spaceflight future this the as that we they total the value around spaceports. think also group to there that share market people continuing through lifetime With as to said, the people increase the is of in addition extend off this we will spaceflight and come done. of derivatives there and future

interesting really that about this community talked haven't that, is a but people. probably we today yet So not for day the is of

database talk us about heard that You we're building. the

purposeful relationship forward. and very this experience So the marketing we curating world-class for brought customer will kind we be management about community of tools, in going

of, that bring a And think the part the not to community, to value a to be us just part we more as of. will bring but I to inspirational value more a again, be is the So that company. community aspirational

Oliver Chen

dynamic variables And enhancement And question in will a There environment aspects be now? are What living the scaling all that out the right and very for period we're control. sounds factors? last period our very of the your is a of of enhancement important what be tougher are as efficiency. risk lot may

Michael Colglazier

life this is a Sure. kind on Functionally, program Eve. extension of

well known think, that. And to how very so about go of industry I that's, in the aerospace

leave So that. at I'll it

that on pandemic. together. not allow to teams the it's and keeping As that everyone on -- say an risk at I'm you proposed probably one we're thing to is eyes the eye bring that biggest do the and will July. a eye This profile. work one to an That keeping we're hoping We're what I'd our risk like was end is on. efficiently us that is our on brought it's our mentioned, I system, in keeping We're that an focusing the That's of still clearly designs. idea but forth finishing a from

want but months our was wanted we be process confident an forward. to close going So today design fully at in share scope, additional to adding and definitely we best four the the look that

Operator

Our next of question Morgan comes from Stanley. Liwag Kristine

Kristine Liwag

it's still while fly and are On or you completely? going able Eve, I to clarify, enhancements will be through want it modifications, grounded to

Michael Colglazier

reasonably to Eve. robust are modifications These

ensure modifications use that So We'll astronaut will the of and XX we've where not And cabin to flight time. out, open its test of It us it back mid- coming do be Eve fully to moving experience. one to Unity basically functioning Unity. then more through Unity want the make then all our comes do flight fly allow up Imagine to it way we will facility the one just as that period And Eve be to bring we Mojave got Unity we'll when we start start extended in right. to We'll able private which on in, and XX, be will back kind our crew during really estimate to this. to this all there primary and both going in through efforts Imagine that we bringing period. back for

expecting of end September our in after be bring the and right this following So that in then XX will is mid-'XX We'll with come we're back Force. expectation. Eve Italian Air Unity

Kristine Liwag

see. I

to mothership a also mothership ability you the terms in these prioritize Delta? is the versus how ability building idea investing being the what to keep priority terms an of projects? of With give more you limiting your build enhance of do flying, spaceships in factor in Can and your us

Michael Colglazier

and to the will important flight all doing ability an that up to as this rate be but time scope equation, what of the that's also and starting advocates future are signing fly from the we we're the us we've we to and linked today the to going inspections XXx additional in because greater to initial they are much they guess, been you they major many as for more people out. Eve and want reason enhancement people to frequently, see our taking that this is go bringing the of And we period factors effect. will us Eve enhancement missionaries additional we movement, because is plan group That we to period derive give back build really following for as It's almost Eve now. between and well as that as astronauts as to want be be can Sure.

of comes scaling the big from very get Delta from the business modification what period. vehicle So then critical Class that. excited priority that's we'll the really of production And company. of this Eve by around at ship able to match X-week really, the Eve We're an a those fly the targeting function we're those with level, be more even the are robust can and fly on will pairing and programs that that to like but similarly of motherships major interval pairing

facilities have see the funds can on as build as possible. priorities. us and so are we that using to big capabilities that production the will quick a those rate raised new You manufacturing we develop Those

Operator

of Noah Poponak Sachs. from comes question next Our Goldman

Noah Poponak

us doing better it is more on massive, give because pace Just physically you would specifically with that. Could in how little detail a Eve? you increase achieving help what really you're understand you're just a XXx

Michael Colglazier

and getting do, we for that, test make specific way the do But XXx, as amount along that before way if clarity, in major to reason a we're that we has up Sure. this in that's and to the enhancement what is XXX inspection windows, flights Unity, back, prototype fixed they're enable of to we're built with this And process fashion was flights. build to that And just build we durability. them was used we're built, inspection every meant been prototype fly fly factor. in do Eve to for sure going Eve looking a you after maintenance to and up what facilities. go a facilities, And is we'll in to to building do the they've that a Currently, XX process. up

have tolerate that adding of is really are the And processes. built will in to longer so with time that This here that's portions ships why allow fashion ship. into the it the What we're of inspection doing very frequent durability components. periods

components, enhancement the period, And be place and us before And structural let it might. us will to expect give strengthening a so specifically, the spaceships periods. longer ship us That's of enhancing structural doing major then we'll the that inspection will what support of up way is a want. itself. lets had we do this next And inspection. for go than time, times, Eve inspection, sequentially XXX the that to more And of will powerful that what an come out originally will on flights we confirm will between components be thought it flight really do we fly as we then, ability an many working we everything period

Noah Poponak

gap? you to of That's supply it. of then, to algorithm clarify And imagine about Can in. Okay. Michael, demand very versus getting manage price you're you thinking I talk wanting to you timing versus ramp want how Because supply. that through, you the you sort versus that's trying triangulate folks just demand helpful. above maintain about supply as of That spoke have how helps

to by, know but that in handle if you near be helpful. So want that to big the how how and least maybe medium term, you it that changes to time could would at intend as goes -- gap to, you be, I speak

Michael Colglazier

Sure.

feedback not group of of that these is than community. probably office. from is of weapons they're is the the our our And people the that together future met envisioning a one astronaut, thing journey, far known brought on shockingly astronaut comes this astronaut into one Virgin true is well many consistent the have part people a secret valuable future flight. journey and Galactic outside is more XXX of of them This think as I've I effectively who a being this of existing

incredibly customers that we'll bring community us, the And more too. to what derive. because people, far bringing and where But it's those from when And a going powerful. is in say they journey. valuable, to flight is they that Right So I well they of it's sign I the life-transitional think existing communities. understood that existing not starts very valuable mind that up moment up to it's of they're the and people. the these XXX be new into these value top expect here that's even than with top, going outside talk find you But XXX because to this the bring

headroom and growth above people so think quite our want of got we we then is forward, a And into what there. will of how and supply to the kind our carry gate bit we how community absorb want to we've that

from been in total kind addressable XX. an We amount of enormous the the shown to market Unity of that's confidence have response

think I'll won't can but we So appropriate once against make keep our major it, excess a And can absorbing say, do grow be then proportionate also call we then from all here. it, absorbed then, demand that's, there. demand the community, a -- supply. of in we step We'll we forward I'd

So community. on, bring its Imagine will right the ships more as I'm Eve Inspire even comes as adding people the bring period. as in, us opportunity as Class that sorry, and and into we We'll we more out now, give modification be to XXX That to bring of -- on start adding our we supply people. more is have very low, Delta we

see Mexico, it. spaceport. America and of get moving New to point you'll Spaceport And stay for So a we'll proportionally the ahead we'll next always steady-state and finally, us then to

Noah Poponak

helpful. the really it given correct That's sits this and where at Is to reopening short-lived the be demand where moment? to current expect of sit window fairly sales supply

Michael Colglazier

promised, to been go do We want really, this go. what reason haven't you the is shared is can long want how response we people do chance. they the we're X,XXX to are in to that saying who first we to deposits to which Spacefarer give Community. they signed down moved These them what has up, really the and going we we tell But I will be is put strong. wanted think line, What and

will to through meaningful a got we Community we've get number that Spacefarer But we'll the the once it beyond I Spacefarer think so And itself. be do Community, will number.

around We have, it it to will there we I We'll with how I the But a reporting be process, a be way go be good on think, think and will sales along plenty get that. lot done. of time of energy it. out

Operator

next of Truist Our Ciarmoli comes question from Michael Securities.

Michael Ciarmoli

that -- mean this should there? we into thinking to model should price your on that offset laid contribution line? model guys be know of specifically layered the thinking to an being going mean, all does XX% possibly financial we a I on might the be had that bottom the I costs I How is the out drop $XXX,XXX, can to you what you the or pricing, maybe talk the and margin be based overall right margin? $XXX,XXX. other Just contribution about

Michael Colglazier

believe on in levels some is margins. documents So I I think company price potential. a given maybe we've Obviously, before price what of perhaps public quite don't bit has these and know, don't referring at raising early specific the to. you're I went of guidance -- the flow-through

quite do expect we flow see through. to bit of a So

investing experience value add be certain. will the to We for to

be will So money that that through. taking not just all we

the the of be is and a see fleet. be investing efficiency. that's we'll us come getting have versus on that campus generation where business, for And the with about. Class campus for really But that really us down we're is would of what that's will you'll the road. cost We where trade what for get we on so for real flight. imagine, in next that the Delta to focused communicate per That's small the mothership, basis cost of going, easy the flow-through why platform get scale. to the the as from from of because as where will passenger, you we fixed contribute will That's prices come efficiency easy the the cost a part ramp-up basis sense are The astronaut relatively relative per the

So flow be I'm the it expect I to do through, your other delivered a will heavy value think specific you one than the say to answer don't giving to of on only a after we we've customer. amount question but this

Michael Ciarmoli

Got it. Got it.

I Was equipment on current just guys I flights a planned mean enhancements, maybe counterintuitive the and about? burn kind Just another with the and you mothership mean but Eve my focus through supply constrained of this maybe create current did Delta more a demand discussion new on part, you maybe going talked momentum have keeping about one. that and keep even and and is building? XXX demand passenger list while and that pent-up

Michael Colglazier

Yes.

proposal came to basis do in very thing have July, up a the this So fly the clearly is opportunity frequent much and to right at on powerful, and late Eve the it's more business.

be with evolution And the X our ships. in over So Unity. are now, discussion, now was Imagine. fine we're one company, we that with ship if more of look question -- our And flying time, then you We'll we versus flying to right with be where we're ships in with later. with going

So available, enhancement period newest we over have of right? is impact least the That's extended ships time. the take of the a kind when an time to

now to that harder right? And of us and for time because take to make We as once out. business the sense. people, intended much up know period this don't the down up, private an time and to astronaut kind get first started I'm ramp then okay, want the of really got like, later was of at back is X the They number probably think factor that's were do I So didn't come started Eve biggest our start. to we've done is I

and do not in Delta on able Class on are of things that we get moving also keeping so So generation waiting also now, this during though, to motherships what parallel the next those the on too. focused are we period and down get people, is focused

Seth Zaslow

have last please. question, one we Nadia, for time

Operator

Okay.

question Our comes of today Pete final Global. Alembic from Skibizzi

Peter Skibitski

I step-up could take it flights I roughly guys wondering more will we end kind to rate that an of have and reasonable that XXXX tranche starting Spacefarer And if kind this customers, to I'm of to internal tranche, let's to just then is be if guess now annual need questioning say, pretty income it hit we to statement. much but get I'm of of gross a flow margin through know bit XXXX, directionally. of you the just in through view you the a I the talk free positive. a assume to what as pronounced the we'll then to or Michael's takes to of line hit so get of of get cash too about regard little don't about if want curious yet, follow-on first with XXX

Michael Colglazier

So bit free section would person. last the that in little and do a to first XXX maybe, around kick I'll say our I Doug, had priced astronauts, last we $XXX,XXX those the at here. of with flight feel per were future

with very investing it's think, the bit are little they're time very I happy, phases the very, now. And some though were customers in of taken a those early who for of less early even

be through. So greater revenue, through new as then as we coming flights those those will which through we will in, pricing, prices. recognize with come will the obviously revenue on And prior at people revenue who customers come those sales we new our our the that earlier flow fly fly will of a and recognized degree have

will anything think Doug, I an you'd recognizing that? So That add the as to like start probably astronauts. we to point next is tranche to be accurate. fly future you're inflection of there

Douglas Ahrens

in about and flight the and which estimate information Unity Imagine number gave you We 'XX. the of 'XX Yes. on rates therefore, can, flights

rate with how future then then fleet expanded the flying right, and points see with in growth, next -- now. of can which the faster of the we're to that the to really times, board number we you of flight so the that the expand taking rate and is Delta stage able expansion passengers astronauts on have And Class, our the fleet. we with to we're our of And turn

important. what and we're why that's really working towards that's so So

Peter Skibitski

as become to half? Do could frame? time little flying up kind a a follow Just think. in be of year last that maybe starts tranche cash the think that -- more that on ballpark because you that back flow it the to level, that, Is less CapEx Just XXXX, that. one reasonable the we're time bit free Is recent in positive? I

Douglas Ahrens

Yes.

talked manufacturing we fleet CapEx, the to expand need the about So capacity. our

in the got kick in, depend kicking point crosses kicking original in. price of right, But it's interim where going new customers cross, time readiness Class with things that the the that again, see you'll and in the Delta we in these So ones the we've where period. at fleet the on have and where to, over XXX the and

is, when of more But towards. online, timing what a that. time say when early future little but say the and it's that in the it's exactly we're on again, have to point comes we'll So that working that's in to

Seth Zaslow

and So point the well, everyone we our can -- Thank point, this thank call this Galactic. for your Nadia, at to call you. you at want now. joining conclude in for interest Virgin

Operator

Thank and This today's ladies for joining. gentlemen. all call. you, you concludes Thank

You disconnect now lines. may your