So here's the thing about space tourism: it's expensive, it's complicated, and it takes a while to get off the ground. Virgin Galactic Holdings Inc (SPCE) just gave investors an update on how that whole "getting off the ground" part is going, and the market seemed to like what it heard—at least a little.
The company reported its fourth-quarter results after the bell on Monday. The headline numbers were a bit of a mixed bag, which is pretty standard for a company that's still building its core product. Revenue came in at $312,000, which missed analyst estimates of $495,000. That revenue, by the way, wasn't from actually flying people to space; it was from access fees related to future astronauts. Think of it as a deposit on a very, very expensive ticket.
On the bottom line, the loss was 98 cents per share. That's still a loss, obviously, but it was better than the $1.05 per share loss that analysts were expecting. So, a smaller-than-expected loss is a win, right? In the world of pre-revenue, capital-intensive ventures, sometimes that's how you keep score.
The company burned through $52 million in cash from operations and had negative free cash flow of $95 million for the quarter. It ended the period with $338 million in total cash, cash equivalents, and marketable securities. That's the war chest it's using to build its fleet.
And speaking of building, that's where the real news is. CEO Michael Colglazier said the company has completed "pivotal milestones" and that assembly of the first new SpaceShip is nearly complete. Ground testing is set to begin in April. With that progress, the company has released a limited number of new flight packages, dubbed "Virgin Galactic Spaceflight Expeditions," each priced at $750,000.
"With production of SpaceShips well underway, we are gearing up for rocket motor assembly at our Phoenix factory, with manufacturing planned to begin in Q4 2026," Colglazier said. "We continue to strategically manage our capital to support our planned ramp in cash flow from commercial spaceline operations."
The company is also working on its second SpaceShip, which is in support testing and is expected to enter service late in the fourth quarter or early in the first quarter of next year.
Looking ahead, Virgin Galactic expects its free cash flow in the first quarter to be in the range of negative $90 million to negative $95 million. The good news, according to the company, is that free cash flow should show sequential improvement throughout the rest of the year. Translation: the cash burn should start to slow down as operations (hopefully) start generating some real revenue.
Investors gave a tentative thumbs-up to the report. Shares were up 2.30% in after-hours trading Monday, changing hands at $2.22. It's not a moonshot rally, but in a market that's often skeptical of long-term, cash-burning stories, any positive move is noteworthy.
The company's executives were scheduled to discuss the results further on an earnings call at 5 p.m. ET. For now, the story remains the same: Virgin Galactic is spending a lot of money to build something incredible. The quarterly numbers show the cost; the operational updates hint at the potential payoff. The market, for the moment, is willing to wait and see.
