SPCE earnings call transcript, November 12, 2026

Thank you for joining the call today. We are the lead spaceship of our Delta-class fleet, Aperon, to Spaceport America in late October, and this milestone marked an exciting handoff from our manufacturing organization to our Spaceline operations team. The new spaceship is magnificent. And we're thrilled to have Aperon relocated to its permanent home. I'll start today's call by describing what's next for Aperon on the way to launching commercial space flights in early Q2, 2027, as well as... ...an update on the build of our second spaceship, which is expected to begin commercial space flight in late Q2 or early Q3, 2027. I'll share details of new growth initiatives, which we expect to drive substantial revenue and... ...profit growth, including a specific investment targeted to increase spaceflight capacity to 150 spaceflights per year from our initial two spaceships. I'll share some of the excitement we are hearing from our astronaut community, as we have advanced over 100... ...individuals into the readiness phase of their upcoming spaceflights. After that, I'll turn the call over to Doug for a financial review, which will include a discussion on our planned use of the new $250 million at-the-market equity...

Our partners at Bell have been making excellent progress on the feather assembly, and we've already received over 95% of the carbon. composite parts for the wing and fuselage from Carbon Aerospace. We expect the last two major parts for the wing and fuselage to arrive in early December. This is great news. Our manufacturing team has already applied learnings from the build of our first spaceship to the build of our structural test articles to improve efficiency. These learnings are being applied to the second spaceship that is now moving to the factory. We expect this second spaceship will enter commercial service along outside Aperon in late Q2 or early Q3 2027, at which point we will begin to ramp our flight cadence towards 125 spaceflights per year. On that note, I'd like to move to page six to discuss some of our underlying assumptions around flight cadence. and capacity from our initial two spaceships. As we shared in the past, Aperon and the Delta-class spaceships that will follow have been designed for maintainability with a targeted flight cadence of two flights per week. per spaceship. With a two-ship initial fleet, this provides theoretical capacity for approximately 200 space flights per year. Our launch aircraft, EVE, has gone through multiple enhancement programs. to prepare for this flight cadence, and our teams are targeting EVE spaceflight launch capacity at approximately 175 flights per year. Thus, our theoretical baseline capacity, with two spaceships and EVE, is approximately 175 flights per year.

We expect three factors will reduce this theoretical capacity to a lower actual spaceflight rate. The first two factors are flight day weather and unplanned maintenance activity. While weather in southern New Mexico is generally excellent for spaceflights, we do expect some flights to be scrubbed for rain or very high crosswind conditions. Although we can often recover intermittent scrub flights over the following week, we expect an efficiency reduction of approximately 25 flights per year from the combination of flight day weather and unplanned maintenance. The third factor impacting flight capacity is exposure to overnight weather conditions. We have traditionally conducted our fueling operations outdoors, which exposes our operation to overnight squalls that can also cause flights to be canceled. We have estimated an efficiency loss of approximately 25 flights per year from exposure to these overnight weather conditions. In combination, these three factors are expected to reduce our two spaceship operational capacity to 125 flights per year, which is the annualized rate we have been projecting for some time. I am pleased to share our teams have identified a way to structurally eliminate the overnight weather impacts and increase our operational capacity by 20% from 125 to 150. space flights per year. Moving to page seven, we've included a rendering of the high cadence launch hangar and fueling infrastructure, which will move fueling and preflight operations indoors and eliminate cancellations caused by overnight weather. When complete, we expect this growth investment to deliver 20%

more annual space flights from our initial two spaceships. Because our cost base is largely fixed, a substantial portion of this revenue should flow through to the bottom line. On to page eight. This image shows our rocket production line coming to together as planned. This line will produce rocket motors for space flights in New Mexico, and it has expansion capacity to support additional spaceports. As many of you are aware, there is currently high demand for rocket systems within the government. and defense sectors. We believe our expertise in rocket design and production can be adapted to support these needs, and we plan to expand our rocket production capabilities with targeted growth investments as we pursue these opportunities. Before I hand the call over to Doug, I'd like to share a bit about the mobilization of our astronaut community and an update on the reopening of bookings for spaceflight expeditions. Please turn to page nine. As previously announced, we've advanced over 100.

astronauts into the first phase of readiness preparation ahead of their spaceflight. And the image on this page shows the change in their astronaut portal that designates the countdown process has begun. As you can imagine. It has been a joy to make these calls and our astronauts have been overjoyed to receive them. As we ready the initial astronauts for their journey, we have once again opened a limited number of bookings for Virgin Galactic. Space flight expeditions. One of the most powerful drivers of our business is the love people have for this experience and the possibilities it embodies. When we reopen bookings at the end of Q3. We built on the success of our $750,000 tranche by opening an additional limited tranche at $850,000 per expedition. We continue to see meaningful demand at this price. And, like the last time, I expect the price of a spaceflight expedition will increase following the close of this current tranche. Our astronaut expeditions team is building a bookings model that can expand without compromising exclusivity. At its heart are referrals, which reflect the deep enthusiasm people have for our experience, and these referrals will be further supported with curated events, hosted experiences, and brand partnerships. I'll now hand the call over to Doug for a financial update.

and insight into how we plan to deploy our capital.

Turning to page 13. Aperon's arrival at Spaceport America has shifted the company's focus to operations. As we now prepare for flight tests and ready ourselves to host astronauts and their friends and family as we commence commercial spaceflight. Doug outlined our capital plans. We are being purposeful and efficient with. our use of funds to achieve positive free cash flow, expand our profitability, and manage our debt in a balanced fashion. Our next step is to bring Aperon into the skies for its flight test program as we continue to build our. Second spaceship, expand our bookings and prepare to welcome our astronauts to space in 2027.

...device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press star 1 to join the queue. And our first question comes from the line of... It's Cheryl with TD Common. Your line is open.

The position of our feather systems. And as we put the software hardware together, we realized those channels were swapped. And so they needed to be reprogrammed to display in the right positions on the pilot display. So that is a reasonably good point. It's clear. It's understandable. It's a straightforward software piece. I'll give another one. I'll call it important, but straightforward in what to do. As we've shared in the past, we have great redundancy build. Throughout our systems. And we don't just put the redundancy in. We test edge cases to ensure that the redundancy, if ever called upon, would work as planned. So we use these edge cases in both our simulations and in actual efforts. So I'll give you one example here. We have actuators. So when pilots are moving the control sticks, they move the flight control surfaces that are being pushed by actuators. And they're little computers. We call them controllers. That control the pace at which those actuators are moving. And we have redundant actuator controllers, right? It's one of the fall over places. So if there's ever a need to not use the primary actuator controller, and roll over to its backup in the software, is a reset time that we established in milliseconds. And that's a software piece. But when we actually got to test that on the ship, where you're actually moving it, and rolling over from one controller to the next, the timing that the hardware really needed was a little different in milliseconds. So okay, now that we've learned that, we need to redo the software. And then just to give a sense of why this is taking its time.

While we're redoing the software, we also then write a very thorough test script that we will put that software through. When the test script is done, we then do a lot of checking on the test script. So that's done. The software is done. We then test it again, and we run regression testing to make sure that our changes didn't create any other changes. And all that takes time. And then when we get it done, like we did with this case, great, done. That one is subtle. And we move on to the next piece. But that process I described for the important things is the exact same process we follow for all the little things like I talked at the beginning. And so that's where a manageable number of these things is still. taking the time that we gave ourselves when we moved our schedule back. So hopefully that gives you a bit of sense of color. And as you ask at the front, we have allowed ourselves additional time in our projected dates beyond. What our software and hardware teams are targeting. Okay, great. That's really helpful. And if I could just take a quick follow up. How should investors think about the right blended rate for as you work through this backlog of earlier book. Reservations and then kind of get to a get to the you know 2028 and beyond just kind of curious just on the current timeline what the cadence could look like as you move through 27 and and into early 28 is how that blended rate kind of shifts over time.

Thanks again for the time everyone. Sure I'll get a start and Doug feel free to come in and with it. So the pricing has stepped up from its origination at you know $200,000 for a space flight expedition to $250,000. to $450,000 to $600,000 to now then $750,000 and now $850,000. And by and large we plan to move through that in a sequential nature. As I said in the past, there are going to be a limited number of spaceflight expeditions where the person on that will end up being part of the first thousand people to space and we've shared in the past we have a very limited number of those. that we've put out at a substantially higher price point and we will blend some of those in by default because they'll need to be part of the first thousand people to space. you'll also see us blending in some. research flights that are priced usually up $750,000, $800,000 or so for a seat equivalent on the research that we do. so you'll see us mix. but as I said we will work to follow sequential order as best we can. so as you heard Doug mentioned we'll start our blended rate lower and then ramp that up so by the time we're at 28. and especially as that launch hanger comes in you'll start seeing things in the $600,000 to $800,000 range obviously that makes a big difference in flow through. Doug anything you'd like to add to that that you covered at all that was accurate.

Thank you all for joining you may now disconnect.