How Virgin Galactic Makes Money

It offers spaceflights to private individuals and researchers, and training to future astronauts

Reviewed by Gordon ScottReviewed by Gordon Scott

Virgin Galactic Holdings Inc. is an aerospace and space travel company that offers individuals, researchers, and government agencies the opportunity to travel to space.

Using proprietary technology and processes, the company’s operations focus on the design, development, manufacturing, ground and flight testing, spaceflight operation, and post-flight maintenance of its complete spaceflight system.

Virgin Galactic’s mission is to fly private passengers safely on multi-day tourism flights that include views of Earth and short periods of weightlessness. Its plan also is to fly scientific payloads and researchers to space for educational and scientific purposes. Additionally, it will offer professional astronaut training through its sub-orbital flights.

Virgin Galactic conducted its sixth commercial space flight in January 2024.

Key Takeaways

• Virgin Galactic is an aerospace company that offers travelers space tourism adventures.
• The company’s main source of revenue is commercial flights and membership fees for its Future Astronaut community.
• As of December 31, 2023, Virgin Galactic had reservations for 750 spaceflight tickets and almost $100 million in deposits and membership fees.
• In June 2023, it conducted its first commercial spaceflight.
• Due to the nature of its business, it may not meet the expectations relating to the financial guidance it provides.

Virgin Galactic’s Industry

Virgin Galactic (SPCE) operates in the Aerospace and Defense industry within the Industrials sector. It is also part of the new and growing Consumer Space industry.

The company sees a future with great potential. According to its 2023 annual report, “rapidly advancing technologies, decreasing costs, open innovation models with improved access to technology and greater availability of capital have driven explosive growth in the commercial space market.”

Furthermore, the “growth in private investment in the commercial space industry has led to a wave of new companies reinventing parts of the traditional space industry, including human spaceflight, satellites, payload delivery and methods of launch, in addition to unlocking entirely new potential market segments.”

“Government agencies have taken note of the massive potential and growing import of space and are increasingly relying on the commercial space industry to spur innovation and advance national space objectives.”

Virgin Galactic uses the Gateway to Space facility at Spaceport America in New Mexico, which is the first commercial spaceport and the base of the company’s commercial space operations.

The company feels that Spaceport America gives it a competitive advantage due to its dry climate and desirable weather conditions for spaceflights, and airspace that restricts general commercial air traffic.

In June 2023, Virgin Galactic conducted its first commercial spaceflight. As of December 31, 2023, it had reservations for 750 spaceflight tickets. It had collected $99.7 million in deposits and membership fees from future astronauts.

The company is developing its next-gen spaceflight ships (including the Delta Class) and motherships. It plans to pause its Unity spaceflights in 2024, launch testing of its Delta Class spaceships in 2025, and begin commercial service in 2026.

Competition

The market for global sub-orbital transportation and space tourism reached over $700 million in 2023 and is projected to reach more than $2.7 billion by 2032. It is an emerging market and Virgin Galactic expects it to be extremely competitive.

The company considers Blue Origin LLC to be its main competitor. Other rivals include:

• SpaceX
• Axiom Space Inc.
• Boeing Co. (BA).

Note

Virgin Galactic is the 50th largest aerospace company in the world as measured by market cap.

Virgin Galactic’s Financials

As of June 2024, Virgin Galactic’s market capitalization was $350 million.

Virgin Galactic’s 2023 annual report reported the company’s financial results for the 2023 fiscal year (FY) ended Dec. 31, 2023. Additionally, on May 7, 2024, the company announced financial results for the quarter ended March 31, 2024.

Virgin Galactic operates as a single segment. Its greatest amount of revenue derives from commercial spaceflights and membership fees related to its Future Astronaut community. Its greatest expenses derive from the research and development it conducts to advance its goals.

Its operating results may fluctuate widely due to the nature and stage of its business. This can make financial projections difficult. It may not meet the expectations for the financial guidance it provides.

Revenue

For FY 2023, total revenue was $6.8 million, an increase of 194% over the previous year’s $2.3 million. For the first quarter of FY 2024, total revenue was $1.98 million, an increase over $0.39 million for the previous year’s first quarter.

Operating Income

For FY 2023, the operating loss was $(531) million, an increase from the previous year’s operating loss of $(499) million. For the first quarter of FY 2024, the operating loss was $(111) million, a smaller loss than the $(163) million in the previous year’s first quarter.

Net Income

For FY 2023, the net loss was $(502) million, an increase from the previous year’s net loss of $(500) million. For the first quarter of FY 2024, the net loss was $(102) million, a smaller loss than the net loss of $(159) million in the previous year’s first quarter.

History and Leadership

Virgin Galactic was founded in 2004 by entrepreneur Sir Richard Branson and is headquartered in Tustin, Calif. Branson had previously founded the Virgin Group and Virgin Atlantic airline.

Though the company began advertising spaceflights in 2004, it didn’t complete its first commercial trip until June of 2023.

As of December 2023, Branson had no plans to continue to invest in the company, believing that it had enough money to move ahead without his financial help.

Virgin Galactic’s president and CEO is Michael Colglazier. Before joining Virgin Galactic, he led Disney Parks International as president and managing director. Before that he served as president of The Disneyland Resort in Southern California.

Mike Moses is the president of the SpaceLine division, where he oversees the commercial spaceflight program. Prior to joining Virgin Galactic, he worked for NASA at the Kennedy Space Center and as a Flight Director at the Johnson Space Center.

The CFO of Virgin Galactic is Doug Ahrens.

Recent Developments

• In June 2024, Virgin Galactic announced it had completed its twelfth successful spaceflight, which involved carrying three private individuals, one researcher, and five research payloads. It was its second flight in 2024. The company is building its fourth-generation and most advanced spaceships, the Delta Class, which it plans to launch into commercial service in 2026.

• In May 2024, Virgin Galactic opened a new system integration, ground-based test facility for its Delta Class spaceships. It is using a testing rig known as an “Iron Bird” to test and verify the operation of Delta subsystems. These include avionics, feather actuation, pneumatics and hydraulics. The goal is to ensure the proper and efficient production of the spaceships, as well as their safe operation.

What’s the Value of a Share of Virgin Galactic?

On June 13, 2024, a share of Virgin Galactic was trading at $0.74.

Is Virgin Galactic Profitable?

Not as of the first quarter of 2024. Its revenue isn’t enough yet to outpace costs, which are substantial and significant for the company, given the nature of its business and the newness of its industry.

Doe Virgin Galactic Pay a Dividend?

Not at this time nor for the foreseeable future. It plans to invest all earnings back into the company so as to focus on the growth of its business.

The Bottom Line

Virgin Galactic is an aerospace and space travel company that offers flights to space for private individuals, researchers, and government agencies. In addition to flying passengers so that they can experience space beyond the Earth’s atmosphere directly, it transports scientific payloads and researchers so that they may conduct experiments for scientific and educational purposes.

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