Virgin Galactic completed the development phase of its next-generation spaceflight vehicles and transitioned into manufacturing and testing; the flight test program is expected to commence in October 2026, with first commercial spaceflight and resumption of commercial service targeted for February 2027. The company targets a rate of 125 commercial space missions per year once its first two next-generation spaceships are in operation. Construction in progress grew from $302.7M at year-end to $376.3M by June 30, 2026.
In May-June 2026 the company redeemed $40.5M principal of its 9.80% First Lien Notes due 2028 by issuing 10.5M shares of common stock, eliminating mandatory principal payments on those notes until March 2028, and in June 2026 exchanged $52.5M of its 2.50% convertible senior notes due 2027 for 7.0M shares plus pre-funded warrants to purchase 10.3M shares, reducing 2027 Note balances by 75% to $17.9M. These transactions produced an $8.6M gain on extinguishment of debt in the quarter.
Customer demand strengthened: as of June 30, 2026 the company held reservations for approximately 675 future astronauts representing roughly $203M in expected future spaceflight revenue. In April 2026 it opened a limited tranche of 50 spaceflight seats at a premium price of $750,000 per astronaut; by August 12, 2026 (after quarter-end) the tranche was oversubscribed and bookings closed, adding over $50M and bringing total expected future spaceflight revenue above $240M.
The operating expense profile shifted markedly from prior year as the company moved from development to production: Q2 Spaceline operations expense rose 98% YoY to $28.2M (driven by +$10.1M in compensation and +$3.4M in materials/subcontractor costs), while R&D expense fell 78% YoY to $4.3M. H1 2026 capital expenditures were $80.4M versus $104.4M in the prior-year period, reflecting completed tooling investments for spaceship production.
Management disclosed substantial doubt about the company's ability to continue as a going concern for twelve months from the filing date. Cash, cash equivalents, restricted cash, and marketable securities totaled approximately $286M at June 30, 2026. Mitigation plans rely on commencing commercial service in February 2027, collecting final payments from the astronaut backlog, the existing at-the-market equity program (which generated $145M in H1 2026 from 45M shares sold), potential third-party partnerships to fund vehicle development, and additional debt or equity financing.
In the Lavin securities class action, the company made all settlement payments in April 2026 (gross settlement $8.5M, with $6.25M covered by insurance and $2.25M net to the company); final court approval remains pending. In the Consolidated Derivative Action and St. Jean Action, parties executed a stipulation of settlement on April 23, 2026 providing for corporate governance reforms and a $2.75M insurer payment (half retained by the company); the court granted preliminary approval on May 19, 2026, and plaintiffs filed a motion for final approval on June 30, 2026.
(Filed on May 14, 2026)
-50.8%
-12,957.3%
$124.8M
Virgin Galactic completed the development phase of its next-generation spaceflight vehicles during the quarter and transitioned into manufacturing and testing operations. Engineering resources have been redeployed to the next phase of design for the next-generation launch vehicle. The company expects the flight test program for next-generation spaceships to commence in Q3 2026, followed by a first commercial spaceflight (a research flight) in Q4 2026, with private astronaut flights beginning six to eight weeks thereafter. With the first two next-generation spaceships, the company targets a ramp to 125 commercial space missions per year. The company is also exploring a derivative model of the launch vehicle as a High-Altitude, Long-Endurance (HALE) aircraft for government and research use.
The shift from R&D to manufacturing was reflected in the quarter's expense profile: research and development fell 80% to $6.7M (from $33.3M a year earlier), while Spaceline operations rose 42% to $29.6M (from $20.8M), driven by increased cash compensation and materials/sub-contractor costs for building new vehicles. Construction in progress on the balance sheet grew from $302.7M at year-end to $339.3M, consistent with ongoing spaceship assembly. Capital expenditures for the quarter were $39.8M.
Management concluded that conditions raise substantial doubt about the company's ability to continue as a going concern for twelve months from the filing date. As of March 31, 2026, the company held $155.5M in cash, cash equivalents, and restricted cash plus $95.1M in marketable securities. The company reported approximately 650 future astronaut reservations representing roughly $186M in expected future spaceflight revenue and opened sales for a limited 50-seat tranche at $750,000 per seat. The company remains in the pre-commercial-service phase with no spaceflight revenue; Q1 2026 revenue of $0.2M consisted of access fees related to the astronaut community.
In December 2025 (prior quarter), the company completed a capital realignment: it repurchased $354.6M of 2.50% 2027 convertible notes, issued $212.5M of 9.80% First Lien Notes due 2028 secured by liens on substantially all company assets, and conducted a registered direct offering generating $45.6M in cash. By March 31, 2026, all 8.4M Pre-Funded Warrants from the registered offering had been exercised. The 2028 Notes carry a mandatory redemption of $30.4M by September 30, 2026, and $10.1M per quarter beginning December 31, 2027. In April 2026 (subsequent event), the company issued a notice of redemption for up to $10M of the 2028 Notes, payable in common stock on May 18, 2026.
Two significant legal matters progressed during the quarter. In the Lavin securities class action, the court granted preliminary approval of the parties' settlement on March 11, 2026; the company made all settlement payments in April 2026, with a gross amount of $8.5M (approximately $6.25M expected to be covered by insurers) and a final-approval hearing set for July 9, 2026. In the consolidated derivative litigation (Spiteri/Grenier/Laidlaw/Gera/St. Jean), the parties reached a settlement in principle on March 20, 2026 and executed a stipulation on April 23, 2026, which if approved will result in corporate governance reforms and a $2.75M payment by the company's insurers, half of which the company will retain. The related Espinosa action in Delaware remains stayed pending the outcome of those proceedings.
During Q1 2026 the company sold 4.0M shares under its 2024 at-the-market offering program for $11.0M in gross proceeds. In April 2026 (subsequent event), it sold an additional 18.1M shares for $51.6M in gross proceeds. The Second Amended and Restated 2023 Employment Inducement Incentive Award Plan became effective in March 2026, increasing shares available to 1.695M. As of March 31, 2026, the company had 81.4M shares of common stock outstanding.
(Filed on March 30, 2026)
-27.3%
-5,746.2%
$144.7M
Q4 2025: In December 2025, Virgin Galactic completed a set of 'Capital Transactions' accounting for as a troubled debt restructuring under ASC 470-60: (i) repurchased $354.6M of its 2.50% convertible senior notes due 2027 (reducing that balance to $70.4M); (ii) issued $212.5M of 9.80% First Lien Notes due December 2028, secured on substantially all assets; (iii) completed a registered direct offering of 2.2M common shares and 8.4M pre-funded warrants for $45.6M in cash; and (iv) issued warrants with a fair value of $62.5M to purchase 31.7M shares at $6.696. Total contractual debt outstanding was reduced from $425M to $282.9M, with the majority of maturities extended to 2028. A $45.7M premium was recorded on the 2028 Notes. Mandatory redemption of $30.4M of the 2028 Notes is due by September 30, 2026.
Annual context (FY2025): The company continues assembly of its first two next-generation spaceships at its ~150,000 sq. ft. Arizona facility (opened July 2024) and reports progressing through build milestones. In the second half of 2025, extended parts-delivery lead times caused subassembly completion dates to shift modestly out. The company expects next-gen spaceship test flights to begin in Q3 2026, a first commercial research flight in Q4 2026, and private astronaut spaceflights 6-8 weeks thereafter. The next-gen ships feature six passenger seats (50% more than VSS Unity) and are designed for twice-weekly steady-state operations, targeting 125 missions per year with the first two ships. FY2025 capital expenditures were $198M (vs. $122M in FY2024), with construction-in-progress rising to $302.7M from $117.8M.
Annual context (FY2025): Virgin Galactic remains in its pre-commercial service phase with no spaceflight revenue; FY2025 revenue was $1.5M (down 78% from $7.0M in FY2024), driven primarily by astronaut community access fees. VSS Unity spaceflights have been paused since mid-2024. As of December 31, 2025, the company holds reservations for approximately 675 future astronauts representing ~$188M in expected future spaceflight revenue, and has recently reopened ticket sales at a base price of $750,000 per seat. Management concluded that conditions raise substantial doubt about the company's ability to continue as a going concern for twelve months from the filing date. The company had 694 employees as of year-end and $175.7M in cash, equivalents, and restricted cash plus $162.3M in marketable securities.
Annual context (FY2025): The company states it recently completed an upgrade program on its current launch vehicle (VMS Eve, ~360 flights to date) making it capable of flying on successive days, supporting a planned 2027 ramp to an average of three flights per week. Engineering resources previously dedicated to next-gen spaceship non-recurring work have been redeployed to the design phase of a next-generation launch vehicle, with a separate government/defense variant also planned. The company is also exploring a derivative HALE (High-Altitude, Long-Endurance) aircraft application. FAA 14 CFR Part 431 licenses expired for all operators on March 10, 2026; Virgin Galactic expects to file a consolidated 14 CFR Part 450 application no later than Q2 2026, with the FAA's 180-day review anticipated to conclude before the Q4 2026 first commercial flight.
Annual context (FY2025): In September 2025, the company announced a continuation of its research partnership with Purdue University in the form of a charter flight scheduled for 2027, expected to carry a five-person crew of faculty, students, and alumni along with a rack of research experiments. The company remains under a five-year NASA Flight Opportunities Program contract (renewed September 2024) to provide spaceflights for research payloads and human-tended missions. The Boeing trade-secret and contract dispute that had been pending since 2024 was fully settled and dismissed in November 2024. A securities class action (Lavin) was preliminily approved for settlement in March 2026, with a $2.25M net expense recorded in FY2025; related derivative suits remain pending with a 120-day stay entered in February 2026.
(Filed on November 13, 2025)
-9.2%
-5,241.6%
$128.8M
Delta Class spaceship build milestones are progressing; the company has completed non-recurring engineering on the Delta Class and redeployed engineering resources to the next design phase of its next-generation launch vehicle. The flight test program is expected to commence in Q3 2026, the first commercial spaceflight (a research flight) in Q4 2026, and private astronaut spaceflights six to eight weeks after the first commercial flight. The company is also exploring a derivative launch-vehicle model as a High-Altitude, Long-Endurance (HALE) aircraft for government and research use (exploratory, not a committed program).
As of September 30, 2025, the company had reservations for approximately 675 future astronauts, representing roughly $189 million in expected future spaceflight revenue. New sales remain paused; tranches of sales reservations are expected to open in Q1 2026 in advance of the start of commercial service.
Construction in progress nearly doubled from $117.8 million at year-end 2024 to $262.2 million at September 30, 2025, and nine-month capital expenditures rose to $155.9 million (versus $86.1 million in the prior-year period), reflecting the ramp-up of next-generation vehicle manufacturing and facility build-out.
On July 18, 2025, the company and plaintiffs executed a Memorandum of Understanding settling the Lavin securities class action: the company agreed to pay $8.5 million, of which approximately $6.1 million is expected to be covered directly by insurers (net charge of $2.4 million recognized in SG&A for the nine-month period). On November 4, 2025 (after quarter-end), plaintiffs requested preliminary court approval; the company expects final approval and all payments in early 2026.
Q3 research and development expense decreased 38% year-over-year to $15.0 million (from $23.9 million), driven primarily by a $7.2 million reduction in sub-contractor and contract labor costs tied to next-generation vehicle development, consistent with the completion of the non-recurring engineering phase. Nine-month R&D fell 45% to $68.4 million (from $124.4 million), with a $45.8 million decline in sub-contractor costs.
