Virgin Galactic Holdings, Inc.

Good afternoon, my name is Francis and I will be your conference operator today at this time, I would like to welcome everyone to virgin galactic fourth quarter and full year 2022 earnings conference call. All lines have been placed on mute to prevent any background noise after the speakers remarks, there will be a question and answer session. If you would like to ask a question during this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star 2. Thank you. I will now turn the call over to Eric Cerny, Vice President of Investor Relations.

Thank you. Good afternoon, everyone. Welcome to Virgin Galactic's fourth quarter and full year 2022 earnings conference call. On the call with me today are Michael Colglazer, Chief Executive Officer, and Doug Ahrens, Chief Financial Officer. Following prepared remarks from Michael and Doug, we'll open the call for questions. Our press release and slide presentation that will accompany today's remarks are available on our investor relations website. Please see slide two of the presentation for our Skate Harbor disclaimer. During today's call, we may make certain forward-looking statements. These statements are based on current expectations and assumptions, and as a result are subject to risks and uncertainties. Many factors could cause actual events to differ materially from the forward-looking statements made on this call. For more information about these risks and uncertainties, please refer to the risk factors in the company's filings with the SEC filed by Virgin Galactic from time to time. Readers are cautioned not to put undue reliance on forward-looking statements, and the company specifically disclaims any obligation to update the forward-looking statements that may be discussed during the call. Please also note we will refer to certain non-GAAP financial information on today's call With that, I would like to turn the call over to Michael. Michael, go ahead. Good afternoon, everyone.

I'm pleased to host today's Q4 earnings call. And as we get started, I'd like to acknowledge how great it is to have our mothership, VMS Eve, back home in Spaceport America and on the path to bring our first spaceship, VSS Unity, back to space. Eve returned to the skies two weeks ago, and the ship flew back to New Mexico yesterday. We are making good progress on validating the enhancements made throughout 2022 and we remain on track for commercial service in Q2 of this year. Our agenda on slide three starts with a brief recap of 2022 before moving into our commercial readiness efforts. We will discuss progress on our future fleet development and I will then turn the call over to Doug to provide a financial review before opening the call to take questions. Turning to slide four. In 2022, we made important investments in the infrastructure and the partnerships that will lead us into the future. First, we invested in our near-term operations by improving the durability and capability of our current vehicles to support higher frequency flight rates as we enter commercial service. The largest effort in this area was enhancing our mothership, EMS Eve. We replaced and upgraded the launch pilot, which is the structure at the center of the cantilevered wing to which the spaceship attaches. The pylon not only gives the spaceship a secure ride to launch altitude, but it also regulates the cabin temperature, air quality, power, and data connections during mated flight. In addition to the work on the launch pylon, we fabricated and installed new horizontal stabilizers, and we made numerous enhancements to our avionics and mechanical systems. While this comprehensive work on EVE took longer than we originally planned, We have now completed our enhancements, and I am incredibly appreciative of our team for the long hours that they put in to return these ships to flight. The work we completed in 2022 will serve us well for many years ahead. Second, we invested in our supply chain and spaceship fabrication infrastructure to enable our business to scale profitably. 2022 saw us bring on experienced design and manufacturing partners to fabricate our major subassemblies. And we also broke ground on our spaceship final assembly factory in Phoenix. Also in 2022, we laid the foundation for an astronaut experience that will be unrivaled. We completed the conceptual design for our first-of-its-kind astronaut campus, and we acquired an incredible site for the campus close to Spaceport America that will be reserved exclusively for Virgin Galactic future astronauts and their guests as they prepare for their journey to space. On to slide five. As we enter 2023, our near-term focus is on commercial space line operations. This includes three areas of operation. First, safely flying our current ships, VMS Eve and VSS Unity, to space on a recurring basis. This is the role of our space line missions and safety team. Second, preparing, inspecting, and returning our ships in ready-for-flight condition on regular intervals. This is the role of our space line technical operations team. And third, hosting, training, preparing, and celebrating our future astronauts, which is the role of our customer operations team. All three of these groups are actively preparing to bring our customers to space, and we are rehearsing and making preparations for the launch of commercial service. In recent weeks, we conducted flights with Eve from Mojave, and yesterday, Eve reunited with Unity at Spaceport America. We are very pleased with the way the mothership has performed in each of these flights, which ensure the modifications that we have made perform as expected under real flight conditions. Our next steps in the validation process will include a series of flights, including a glide flight where VMS Eve carries VSS Unity to high altitude and releases the spaceship to perform an unpowered glide down to Spaceport America. Following successful completion of those steps, We'll look to conclude the validation process with a powered flight to space that will include a Virgin Galactic crew who will be assessing the in-flight experience and verifying components of our ground-based training program. Following successful completion and verification of the analysis for those missions, and consistent with our recent outlook regarding the flight schedule, we expect to commence commercial service in Q2, beginning with a research-focused flight with the Italian Air Force, followed by regular private astronaut and research missions thereafter. In between these validation flights, our space line teams are preparing for safe and repeatable flying by executing mission control simulations, training exercises, and other dress rehearsal activities with full integration of government agencies and partners at Spaceport America to ensure a seamless flight and astronaut experience. The customer operations team is preparing Spaceport America for the increased flight cadence and delivery of an unforgettable experience for our customers. and they are working through rehearsals and simulations to ensure the astronaut experience before, during, and after the flight is truly one of a kind. Turning to Flight 6, I'd like to share some insights into our future fleet development, specifically the Delta-class spaceships and our next generation motherships, as these production vehicles will be the key enablers of revenue growth and profitability for the company over the long term. At a high level, This is a multi-year fleet development program that is running concurrently with our near-term commercial operations, which utilize even Unity. Our future fleet development roadmap calls for the first of our Delta-class spaceships to come off the line at our Phoenix assembly facility in time for entering commercial service in 2026. Whereas 2022 was about establishing our design and manufacturing strategy, selecting our primary suppliers, and building up our internal teams. 2023 is now focused on completing designs for both the next generation motherships and Delta spaceships, building the required tooling, and beginning the parts fabrication for these ships. Moving into 2024, we anticipate parts fabrication will continue and the assembly phase for both the next generation motherships and Delta-class spaceships will also begin, utilizing the sub-assemblies from our suppliers. Ground testing and flight testing is expected to commence in 2025 in preparation for commercial service in 2026. In conjunction with that roadmap, we are making progress on our final assembly facility in Phoenix, Arizona. We are currently working through the interior design, production layout, and fit-out phases of the project to support initial assembly with parts expected to arrive in 2024. With our roadmap in place, the teams are working hard to achieve the various milestones that will lead to the scale needed to drive our business in the future. I'll now turn the call over to Doug for an update on our financials.