Virgin Galactic (NYSE:SPCE) stock surged 26% on Thursday morning after announcing quarterly revenues that exceeded expectations. Management revealed that revenues hit $1.72 million, exceeding Wall Street predictions of $1.07 million by 60.7%. This reflects a substantial year-over-year increase of 125.3% from last year’s Q3 revenue of $767,000.
Michael Colglazier, CEO of Virgin Galactic, attributed the success to the six spaceflights successfully executed within a six-month period. Membership fees from future customers also drove the higher-than-expected revenues. The firm also issued positive revenue guidance, which is expected to hit $3 million in Q4.
Headquartered in Tustin, California, Virgin Galactic is a pioneering player in the emerging commercial space travel industry. The company offers privatized space access to individuals, researchers, and government bodies. Utilizing proprietary technology, the firm has developed and maintains a suite of spaceflight system vehicles including a mothership, spaceship, and a hybrid rocket motor.
Despite the favorable Q3 results, however, Virgin Galactic’s shares have lagged by a wide margin. Shares are down 44% year to date, compared to a 15.7% rise in the S&P 500.
The company also cautioned about its cash flows. Virgin Galactic expects free cash flow for the fourth quarter to fall between -$125 million and -$135 million, significantly worse than the -$105 million outflow seen in Q3.
Nevertheless, Virgin Galactic appears promising. With a Q3 cash position of approximately $1.1 billion, the company anticipates having sufficient capital to continue the operations and development of its first two Delta class spaceships. Management expects to achieve a positive cash flow by 2026.
The company also provided updates on its business. Its Galactic 06 mission is scheduled for January 2024, and its spaceship factory in Phoenix, Arizona, is set to open mid-2024. Additionally, the production schedule for the Delta Class spaceships remains on track for revenue service in 2026.
Thomas Yeung produced this article using data from Thomson Reuters and unique generative AI prompts. These prompts help distill real-time quarterly earnings data and combine it with InvestorPlace.com’s best-in-class analysis. Our readers get a deep dive into financial results at lightning speed. These articles have been reviewed by a human editor prior to publication. To report any concerns or inaccuracies, please contact us at editor@investorplace.com.
