22 February 2022

Virgin Galactic Announces Fourth Quarter and Full Year 2021 Financial Results

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  • Commercial Service Remains on Track for Q4 2022

  • Current Fleet Enhancement Program On Schedule to be Completed in Q3 2022

  • Opened Ticket Sales to the General Public

TUSTIN, CALIFORNIA. – February 22, 2022 – Virgin Galactic Holdings, Inc. (NYSE: SPCE) (“Virgin Galactic” or the "Company”) today announced its financial results for the fourth quarter and full year ended December 31, 2021 and provided a business update. “We remain on track and on schedule to complete our enhancement program and launch commercial service later this year,” said Michael Colglazier, Chief Executive Officer of Virgin Galactic. “We achieved many important milestones in 2021 that laid an essential foundation towards becoming a scaled, commercial operation. In recent weeks, we opened sales to the general public and launched our new global consumer brand. Demand for our one-of- a-kind experience remains strong, and we are currently building our operations to accommodate our growing customer base.”

Fourth Quarter and Full Year 2021 Business Highlights:

  • Opened sales at new price point of USD $450,000 for private astronauts in Q3 2022.

  • Opened a new Engineering, Design and Corporate headquarters, which will serve as the primary hub for R&D and the development of both the Delta class spaceship and the next generation motherships.

  • In July 2021, successfully completed first fully crewed spaceflight, Unity 22, which fulfilled test objectives including evaluating the cabin and customer experience.

  • In June 2021, received approval from the Federal Aviation Administration for full commercial launch license, marking the first time that the agency licensed a company to fly customers to space.

  • In May 2021, successfully completed first spaceflight from Spaceport America, New Mexico, Unity 21, which fulfilled various test objectives and carried revenue-generating scientific research experiments.

  • Rolled out Spaceship III, VSS Imagine, the second spaceship in the current fleet.

Fourth Quarter 2021 Financial Highlights:

  • Cash position remains strong, with cash, cash equivalents, restricted cash and marketable securities of approximately $931 million as of December 31, 2021. This does not reflect our recent fundraise.

  • GAAP selling, general, and administrative expenses of $40 million, compared to $33 million in the fourth quarter of 2020. Non‐GAAP selling, general and administrative expenses of $29 million in the fourth quarter of 2021, compared to $21 million in the fourth quarter of 2020.

  • GAAP research and development expenses of $42 million, compared to $41 million in the fourth quarter of 2020. Non‐GAAP research and development expenses of $36 million in the fourth quarter of 2021, compared to $38 million in the fourth quarter of 2020.

  • Adjusted EBITDA totaled $(65) million, compared to $(60) million in the fourth quarter of 2020.

  • Net loss of $81 million, compared to a $104 million net loss in the fourth quarter of 2020.

Recent Updates:

  • Expected launch of private astronaut commercial service remains on track for Q4 2022.

  • Fleet enhancement program for mothership Eve and spaceship Unity remains on track to be completed in Q3 2022. This enhancement program is designed to improve the vehicles’ durability, reliability, and flight rate frequency leading into commercial service.

  • On February 15, 2022, announced the opening of tickets sales to the general public and launched new consumer brand.

  • On February 8, 2022, announced the appointment of Blair Rich as President and Chief Business Officer, Commercial and Consumer Operations.

  • Progressed plans for the design and location of new final assembly manufacturing facility for the Delta class spaceships.

  • In final stages of negotiations with preferred suppliers to manufacture the next generation of our motherships.

  • In January 2022, we consummated a convertible debt offering that resulted in $425 million in gross proceeds to us. The proceeds of the offering are expected to be used to fund working capital, general and administrative matters and capital expenditures to accelerate the development of the Delta class spaceship fleet and next generation motherships.

Financial Guidance:

The following forward-looking statements reflect our expectations for the first quarter of 2022 as of February 22, 2022, and are subject to substantial uncertainty. Our results are based on assumptions that we believe to be reasonable as of this date, but may be materially affected by many factors, as discussed below in “Forward-Looking Statements.”

  • Forecasted free cash flow for the first quarter of 2022 is expected to be in the range of $(75) to $(85) million.

Conference Call Information Virgin Galactic will host a conference call to discuss the results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) today. To access the conference call, parties should dial +1 844 200 6205 or +1 646 904 5544 and enter the conference ID number 022958. The live audio webcast along with supplemental information will be accessible on the Company’s Investor Relations website at www.investors.virgingalactic.com. A recording of the webcast will also be available following the conference call.

About Virgin Galactic Holdings Virgin Galactic is an aerospace and space travel company, pioneering human spaceflight for private individuals and researchers with its advanced air and space vehicles. It is developing a spaceflight system designed to connect the world to the love, wonder and awe created by space travel and to offer customers a transformative experience. You can find more information at https://www.virgingalactic.com/.

Forward-Looking Statements This press release contains certain forward-looking statements within the meaning of federal securities laws with respect to Virgin Galactic Holdings, Inc. (the "Company"), including statements regarding the Company’s spaceflight systems, markets and expected flight schedule. These forward-looking statements generally are identified by words such as “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to the factors, risks and uncertainties included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as such factors may be updated from time to time in our other filings with the Securities and Exchange Commission (the "SEC"), accessible on the SEC’s website at www.sec.gov and the Investor Relations section of our website at www.virgingalactic.com. These filings identify and address other important risks and uncertainties that could cause the Company’s actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

USE OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) This presentation references certain financial measures that are not prepared in accordance with generally accepted accounting principles in the United States (GAAP), including Adjusted EBITDA, non-GAAP selling, general, and administrative expense, non-GAAP research and development expense and free cash flow. The Company defines Adjusted EBITDA as earnings before interest expense, taxes, depreciation and amortization, stock-based compensation, and certain other items the Company believes are not indicative of its core operating performance. It defines non-GAAP selling, general, and administrative expenses as selling, general, and administrative expenses other than stock-based compensation and non-capitalized transaction costs, and non-GAAP research and development expenses as research and development expenses other than stock-based compensation. It defines free cash flow as net cash used by operating activities less capital expenditures. None of these non-GAAP financial measures is a substitute for or superior to measures prepared in accordance with GAAP and should not be considered as an alternative to any other measures derived in accordance with GAAP.

The Company believes that presenting these non-GAAP financial measures provides useful supplemental information to investors about the Company in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making. However, there are a number of limitations related to the use of non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore any non-GAAP measures the Company uses may not be directly comparable to similarly titled measures of other companies.

Use of Non-GAAP Financial Measures (Unaudited) This press release references certain financial measures that are not prepared in accordance with generally accepted accounting principles in the United States (GAAP), including Adjusted EBITDA, non-GAAP selling, general, and administrative expense and non-GAAP research and development expense. The Company defines Adjusted EBITDA as earnings before interest expense, taxes, depreciation and amortization, stock-based compensation, and certain other items the Company believes are not indicative of its core operating performance. It defines non-GAAP selling, general, and administrative expenses as selling, general, and administrative expenses other than stock-based compensation and non-capitalized transaction costs, and non-GAAP research and development expenses as research and development expenses other than stock-based compensation. None of these non-GAAP financial measures is a substitute for or superior to measures of financial performance prepared in accordance with GAAP and should not be considered as an alternative to any other performance measures derived in accordance with GAAP.

The Company believes that presenting these non-GAAP financial measures provides useful supplemental information to investors about the Company in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making. However, there are a number of limitations related to the use of non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore any non-GAAP measures the Company uses may not be directly comparable to similarly titled measures of other companies. A reconciliation of Adjusted EBITDA to net loss for the three months ended December 31, 2021 and 2020 and years ended December 31, 2021 and 2020, respectively, are set forth below (in thousands):

A reconciliation of selling, general, and administrative expenses to non-GAAP selling, general, and administrative expenses for the three months ended December 31, 2021 and 2020 and years ended December 31, 2021 and 2020, respectively, are set forth below (in thousands):

A reconciliation of research and development expenses to non-GAAP research and development expenses for the three months ended December 31, 2021 and 2020 and years ended December 31, 2021 and 2020, respectively, are set forth below (in thousands):

* Non-capitalized transaction costs include non-recurring expenses related to preparation and filing of an S-1 registration statement in the first quarter of 2020.

The following table reconciles forecasted net cash used in operating activities to forecasted free cash flow for the three months ended March 31, 2022 (in thousands):

For media inquiries: Aleanna Crane - Vice President Communications Virgingalacticpress@virgingalactic.com 575.800.4422

For investor inquiries: vg-ir@virgingalactic.com

GEORGE WHITESIDES

GEORGE WHITESIDES

SPACE ADVISORY BOARD CHAIR

George T. Whitesides is the Chair of the Space Advisory Board, where he is responsible for bringing together aerospace leaders to advise the Virgin Galactic senior management team on the journey towards regular commercial spaceflight, developing the next generation vehicles and exploring new opportunities. Previously, George served as the Chief Space Officer of Virgin Galactic, spearheading the development of future technologies, including high speed, point-to-point travel and orbital flight, after stepping down as CEO in 2020.

George joined Virgin Galactic in 2010 as Chief Executive Officer. During George’s 10 years with the Company, he built the company from 30 people to a workforce of over 900, successfully guiding Virgin Galactic through its human space flight R&D and flight test program, culminating in two space flights. These historic flights saw the first humans launched into space from US soil since the retirement of the Space Shuttle, as well as the first woman to fly on a commercial space vehicle. George led the transition of operations from Mojave, California to Spaceport America, New Mexico, and oversaw the company’s successful public listing making it a multi-billion dollar company and creating the world’s first publicly traded human spaceflight venture.

Prior to Virgin Galactic, George served as Chief of Staff for NASA. Upon departure from the American space agency, he received the Distinguished Service Medal, the highest award the agency confers.

George’s volunteer service includes Caltech’s Space Innovation Council, Princeton University’s Advisory Council for Mechanical and Aerospace Engineering, and the Antelope Valley Economic Development & Growth Enterprise. He is a fellow of the UK Royal Aeronautical Society and an associate fellow of the American Institute of Aeronautics and Astronautics.

He previously served as Vice Chair of the Commercial Spaceflight Federation, chair of the Reusable Launch Vehicle Working Group for the FAA’s Commercial Space Transportation Advisory Committee, a member of the Board of Directors of Virgin Galactic, a member of the Board of Trustees of Princeton University, co-chair of the World Economic Forum’s Global Future Council on Space Technologies, and the Board of Virgin Unite USA. George has testified on American space policy before the United States Senate, the United States House of Representatives, and the President’s Commission on Implementation of United States Space Exploration Policy. An honors graduate of Princeton University’s School of Public and International Affairs, George later earned a master’s degree in geographic information systems and remote sensing from the University of Cambridge, and a Fulbright Scholarship to Tunisia. George is a licensed private pilot and certified parabolic flight coach.

He resides in California with his wife Loretta and two children.

CHRIS HADFIELD

CHRIS HADFIELD

SPACE ADVISORY BOARD MEMBER

Colonel Chris Hadfield is a heavily decorated astronaut, engineer, and test pilot who has commanded the International Space Station. Formerly NASA’s Director of Operations in Russia and veteran of three spaceflights, Hadfield’s many awards include the Order of Canada, the Meritorious Service Cross and the NASA Exceptional Service Medal. Hadfield is a three-time NYT bestselling author, a renowned musician, an adjunct professor at the University of Waterloo, chair of the board of the Open Lunar Foundation, and host of several internationally acclaimed television series. In addition, Hadfield leads the space stream at the Creative Destruction Lab, one of the world’s top tech incubators.

DR SANDRA MAGNUS

DR SANDRA MAGNUS

SPACE ADVISORY BOARD MEMBER

Dr. Sandra H. “Sandy” Magnus is the Principal at AstroPlanetview, LLC. Most recently she served as the Deputy Director of Engineering in the Office of the Secretary of Defense for the Undersecretary of Research and Engineering. In that role she served as the “Chief Engineer” for the Department of Defense establishing engineering policy, propagating best practices and working to connect the engineering community across the department.

Dr. Magnus is the former Executive Director of the American Institute of Aeronautics and Astronautics (AIAA). Prior to leading AIAA, she was a member of the NASA Astronaut Corps for 16 years. During her time at NASA she flew in space on the STS-112 shuttle mission in 2002, and on the final shuttle flight, STS-135, in 2011. In addition, she flew to the International Space Station on STS-126 in November 2008, served as flight engineer and science officer on Expedition 18, and returned home on STS-119 after four and a half months on board.

Following her assignment on Station, she served at NASA Headquarters in the Exploration Systems Mission Directorate. Her last duty at NASA, after STS-135, was as the deputy chief of the Astronaut Office.

While at NASA, Dr. Magnus worked extensively with the international community, including the European Space Agency (ESA) and the Japan Aerospace Exploration Agency (JAXA), as well as with Brazil on facility-type payloads. She also spent time in Russia developing and integrating operational products and procedures for the International Space Station.

Before joining NASA, Dr. Magnus worked for McDonnell Douglas Aircraft Company as a stealth engineer. While at McDonnell Douglas, she worked on internal R&D and on the Navy’s A-12 Attack Aircraft program.

Dr. Magnus has received numerous awards, including the NASA Space Flight Medal, the NASA Distinguished Service Medal, the NASA Exceptional Service Medal, and the 40 at 40 Award (given to former collegiate women athletes to recognize the impact of Title IX).

DAVID A. WHELAN

DAVID A. WHELAN

SPACE ADVISORY BOARD MEMBER

Dr. David A. Whelan is the SVP Chief-Scientist of Cubic Corporation. Dr. Whelan retired from Boeing in 2017, as the Vice President, Engineering (BDS) and Board of Directors for HRL Laboratories. Whelan served as Director of the Tactical Technology Office of the Defense Advanced Research Projects Agency (DARPA) and began his career at Northrop as designer of the B-2 Stealth Bomber. Whelan is a member of the National Academy of Engineering, a fellow of the American Physical Society and IEEE. He earned his Ph.D. Physics from UCLA; He holds over 75 US patents.