Virgin Galactic Holdings, Inc. ($SPCE)

Good afternoon. My name is Desire, and I will be your conference operator today. At this time, I would like to welcome everyone to Virgin Galactic's First Quarter 2026 Earnings Conference Call. [Operator Instructions] 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 First Quarter 2026 Earnings Conference Call. On the call with me today are Michael Colglazier, Chief Executive Officer; and Doug Ahrens, Chief Financial Officer. Following our prepared remarks, we will 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 2 of the presentation for our safe 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 SEC filings made from time to time. You 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 this call, whether as a result of new information, future events or otherwise. Please also note that we will refer to certain non-GAAP financial information on today's call, please refer to our earnings release for a reconciliation of these non-GAAP financial metrics. I would now like to turn the call over to our CEO, Michael Colglazier, who will begin on Page 3 of our presentation.

Thanks, Eric, and good afternoon, everyone. It's been a quick 1.5 months since our last earnings call. And I'm happy to share, we've been advancing the many efforts across the company in line with our plans and prior guidance. We've delivered the first of our new spaceships from our assembly hanger to our test and launch hanger. Ground testing of that spaceship is underway, and we remain on track to commence flight testing in Q3 and spaceflight in Q4. With commercial spaceflight operations continuing to draw closer on the horizon, we've accelerated efforts across the company to prepare for the ramp of activity. We're hiring our next group of world-class spaceship pilots as we prepare for flight test and ongoing spaceflight operations. We provided our roughly 650 founding astronauts who make up roughly a year's worth of advanced bookings with expected flight windows in 2027 and early 2028. We've received excellent reception and early booking response to the newly priced spaceflight expeditions we released to the market in April. And we began construction of our Rocket motor assembly line in Phoenix, which is expected to be operational in Q4. In addition, we've also managed the financial strength of the company. Spending continues to decline quarter-by-quarter, debt retirements are being made on or ahead of schedule, and cash balances are being maintained at appropriate levels as we work through the final quarters of our pre-revenue phase. Our agenda today will be relatively light, reflecting both the short term since our Q4 earnings call and the consistency of progress against our prior statements and objectives. Turning to Page 4. Since our last call, we finished the major structural task with our first spaceship, and we were all pleased to reach the weight on wheels milestone in April as we move the ship from our assembly hanger to our test and launch hanger, which is co-located on the grounds of our Phoenix campus. Outstanding work by our entire team. Structural assembly continues to progress as planned for both our static test article and our second spaceship, and the images on Page 5 showcase some of the larger parts of our static test article coming together. As you saw during the build of our first spaceship, the final assembly process moved quite rapidly. This rapid assembly process continues with the static test article, which, as a reminder, is built for extensive use in our testing program, but which will not be flying. Our second operational spaceship will we'll follow the static test article, and this ship has begun fabrication. We will again leverage the same rapid assembly process for the second spaceship, and we expect the second ship will enter service between late Q4 2026 and early Q1 2027. This timing keeps us on track with our plans to substantially increase the number of spaceflights per month during the first 2 quarters of 2027. Turning to Page 6 to talk about our ground test efforts. At a technical level, our ground test approach is comprehensive and takes advantage of industry best practices with testing progressing in parallel across multiple locations. We've made purposeful changes in our approach to ground testing versus the process that was used with our original spaceship Unity and the upfront investments we made in this area are now paying off. We purposely invested in off ship testing infrastructure to significantly increase the number of systems test that can be accomplished prior to and during the final spaceship assembly. Our Safety and Test Center in Irvine, California has been running parts of our ground test campaign for many months. The image on this page showcases our Iron Bird test platform, 1 of the many off ship infrastructure investments we've made. These investments have enabled us to complete large amounts of the ground test program and dedicated facilities with purpose-built test rigs and equipment. This parallel off ship testing activity reduces expected time spans for the on-ship ground test elements with much of the on-ship testing focused on verification of systems installations rather than first-time checkouts of hardware. At a practical level, this means we can now advance our new spaceships from structural assembly through on-ship ground testing and into flight test in much less time than what was required with our Unity spaceship while having a more robust ground test program overall. Moving to Page 7. We I hope you've all seen our recently released episode of We Build Spaceships, which provides a great overview of our ground testing efforts. The link to the video is on this page. And I'll summarize by highlighting the various facilities where this important work is taking place. First, at our Safety and Test Center in Irvine, we continue to conduct key qualification test of our hardware. Qualification testing puts the hardware components through the paces of the conditions they see in flight, including temperature and vibration as well as extreme conditions they could be subject to. This past quarter, we completed dozens of component qualifications, including our central computer. This computer is the heart of the digital flight control system which translates pilot inputs into command to move the flight control surfaces at the back of the space. We are also testing systems on our Iron Bird, a test platform that allows full system-level testing of how hardware responds in flight. Second, at the Southwest Research Institute in San Antonio, Texas, we have completed testing of our flight control surfaces under loaded flight conditions and we're now preparing to structurally test our wing, fuselage and feather subassemblies. These tests are part of our overall structural testing effort, which is conducted to verify that our as-built configurations meet or exceed the design standards we have set out to achieve. These tests also allow detailed correlation of the various analytical models that we use to predict behaviors in flight test and commercial service. Third, our team continues to qualify various software and avionics systems at our engineering headquarters in Orange County, California and at vendor facilities across the country. Software plays a vital role in our spaceship, especially in our new flight control architecture, and we are using industry best practices to ensure our code is ready and safe. And fourth, in the test and launch here in Phoenix, our team is now completing installation of many electrical and mechanical systems that are embedded inside the ship while also conducting a range of on-ship production acceptance test on systems that have been put in place, verifying the quality of each system as it's installed. In June, the team will begin integrated vehicle ground testing, which is used to check out complete end-to-end performance of this patient. Turning to Page 8. I'd like to talk briefly about our flight test program. When our ground test in Phoenix are complete, we'll carry the new spaceship to Spaceport America using our launch vehicle, Eve. Once we are in New Mexico, we will start the glide flight phase of testing. This will be akin to the glide testing we did with our Unity ship. However, the duration will be substantially shorter given the faster turn times of our new delta class vehicles. We continue to expect the flight test phase to commence with glide test in Q3, progressing to rocket-powered flights in Q4. As I mentioned on our last call, 1 of the many ways we are preparing for the first flight test of our new spaceship is by bringing our prototype spaceship Unity back for an encore performance. Unity's glide characteristics and energy management profile provide an outstanding real-world proxy, which, in addition to extensive simulator training, will prepare our pilots to put our new space shifts through the required flight test points. This image from earlier this week shows Unity in its preflight configuration with our launch vehicle, Eve. We are expecting Unity to be back in the skies later this month for the first of several glide flights above Spaceport America. Moving to Page 9. Our key scheduled milestone dates remain consistent with the expectations we shared during our last earnings call, which is great news. As those who track the aerospace industry know, keeping forward momentum in line with expectations is notoriously challenging with these complex programs. And our ability to maintain consistent progress against our schedule is due to the massive effort, ingenuity and nimble adaptations from our Virgin Galactic team. Great job to all of you at VG who are listening in. Page 10 highlights some of our preparations for commercial space flight operations. Talent is key to our business. And most of our hiring needed for commercial spaceflight operations will come in the third and fourth quarters as we continue to manage our costs prudently. A few key roles will be needed earlier, including the expansion of our truly world-class pilot core. The licensing process for our new spaceships is well underway, and we are working closely with the FAA to ensure all elements are submitted according to plan and the licensing process moves ahead accordingly. We anticipate the various elements associated with the new Part 450 licensing regime will continue throughout the year, and we expect to receive our license prior to our first powered flight in Q4. We have approximately 650 founding astronauts booked for Virgin Galactic spaceflight expeditions. They are an amazing group of people, and collectively, they represent around a year of advanced bookings for the business, which is a tremendous asset as we begin operations. With clarity on flight windows growing substantially as we near the start of commercial spaceflight operations, we have given each of our founding astronauts a rough expectation of their flight window via a newly introduced Astronaut portal. We expect the majority of our founding astronauts will complete their spaceflight expedition during 2027 with the remainder flying space in the first half of 2028. We recently opened a limited number of bookings for Virgin Galactic spaceflight expeditions, each priced at $750,000, with flight dates expected in mid-2028. The response has been strong and global in nature, and we've received qualified inquiries from customers across more than 20 countries. We're now actively progressing through the booking process with individuals, research organizations and government agencies. As a reminder, booking of spaceflight expedition is a deliberate process that typically unfolds across several months, as customers move from initial engagement to in-depth conversations continuing through a detailed review of terms and conditions and ultimately to the booking of their expedition. This process is consistent with other high consideration high-value experiences. With that said, many of the conversations we are having are moving to the contracting phase more quickly than we would typically expect. And we are very encouraged by the pace we see. We secured deposits for a meaningful portion of the available seats at this price point, and I expect we will close this limited tranche of space white expeditions at the $750,000 price during our glide flight program in Q3. As we shared previously, once this tranche is allocated, we will pause new bookings and begin onboarding this next cohort of astronauts. Following that, we plan to open a subsequent tranche likely at a higher price point. And finally, before I hand the call over to Doug, I am happy to share that construction has begun on our new rocket motor assembly line located adjacent to our spaceship assembly hangars at our Phoenix campus. We have a substantial number of motors already in inventory that will carry us through flight test and into the start of commercial spaceflight operations, but we plan to ensure a steady ongoing supply to support our growing spaceflight cadence. In this regard, we plan to have the new rocket motor assembly line operational in Q4. This timing aligns with the completion of our second spaceship, allowing us to shift our talented team in Phoenix from spaceship assembly to rocket motor assembly without missing a beat. Doug, let me pass the call over to you for the financial update.

Thanks, Michael. I'll start with our financial results for the quarter just ended and follow with a few details about our recent capital market activities. Then I'll provide more color on our projected cash flows and the P&L as we move into commercial space line operations and scale the business. With regard to our recent financial results and our projections, you'll notice the trend of continuous improvement in free cash flow because the peak spending for spaceship development is behind us. We've been moving through spaceship assembly and into testing, which results in a progressively smaller cost footprint. Moving to Page 11. In the first quarter of 2026, we generated revenue of $200,000 from access fees related to future astronauts. Total operating expenses for the first quarter were $66 million, a 26% reduction from $89 million in the prior year period. This change reflects a continued shift from R&D to capital investments in production of our spaceships and lower overall spend as we move through the assembly phase of the first spaceships. Our first quarter net loss improved by 23% to $65 million compared to $84 million in the prior year period. Adjusted EBITDA improved by 24% to negative $55 million in the first quarter compared to negative $72 million in the prior year period. Capital expenditures were $40 million, down from $46 million in the prior year period. Free cash flow was negative $93 million in the first quarter, a 23% improvement compared to the prior year period. Moving to Page 12. We ended the first quarter with $251 million in cash, cash equivalents and marketable securities, which includes $11 million in gross proceeds raised through our at-the-market or ATM equity offering program. Not included in that cash balance is $52 million in gross proceeds from the ATM during the month of April. On April 30, we announced the potential redemption of $10 million of 2028 1st lien notes due in exchange for shares of common stock. This redemption is being made ahead of schedule and reduces the debt payments due in September of this year. This is a great example of the flexibility built into our capital realignment transactions that we completed last December, and which we discussed during our last earnings call. We recognize that there's dilution caused by the ATM program and debt redemption I just described. However, we expect the dilutive impact will be far outweighed by the value created from assets being built with this capital. These assets are recorded in our property, plant and equipment on the balance sheet, which totals $427 million at the end of the first quarter. Moving to our projections. Revenue for the second quarter of 2026 is expected to be approximately $100,000 for future astronaut fees. Free cash flow for the second quarter of 2026 is expected to be in the range of negative $87 million to $92 million, with slightly less than half being for capital expenditures as we continue to prepare our spaceships for commercial service. We anticipate that free cash flow will continue to improve modestly in the third quarter of 2026. We will be growing various functions within space line operations during flight test and in preparation for the start of commercial service, but we expect this to be more than offset by larger reductions in capital expenditures as spaceship development progresses. During the fourth quarter of 2026, we expect to see continued improvement in spending and also the beginning of revenue for space flight operations. We have been presenting the annualized business model shown on Page 13 during several of our recent earnings calls. By the fourth quarter of this year, we expect operating expense, including variable spaceflight costs to be in the quarterly range of $70 million to $80 million. Notably, this level of quarterly spending aligns with the annualized view of the model as shown in the first column on this page. Our cost footprint is expected to be reduced to this level by the fourth quarter because we are progressing from spaceship manufacturing to the launch of commercial space line operations. Next, I want to highlight the powerful unit economics, by which I mean the economics of a single flight that are now possible given the dramatic reductions in the cost of human spaceflight driven by our highly reusable system. Most importantly, reusability drives the cost of each flight down dramatically. This, combined with the high value of our spaceflight experience, which supports our pricing model results in a high contribution margin per flight. In other words, the revenue from each flight can far exceed the variable cost for that flight. Given the low unit cost structure, even at historical $200,000 price points, each flight is expected to generate a positive contribution margin. For illustrative purposes in the economic model on Page 13, at an average price of $600,000 per astronaut, we're expecting a very healthy contribution margin of over 80%. As we scale operations and given the baseline cost structure shown on this model, we begin to see the tremendous flow-through of profit to the bottom line. Now let's circle back to expectations for early commercial operations. In January of 2027, we expect to fly 4 flights per month and reach 8 flights per month by Q2. Ahead of this, our cadence of spaceflights in Q4 of this year will be intentionally constrained to allow time for learning between flights. As we get closer to the launch of commercial space line operations, we'll provide more information on the expected dates for the first flight. Additionally, we are modeling the majority of our early flights with average revenue per astronaut at $200,000. In the fourth quarter, cash receipts are expected to exceed revenue as we begin to collect customer payments ahead of flights planned for early 2027. Given the strength in our balance sheet, our declining spending and our unit economics, our liquidity supports our transition to commercial space line operations. Moving beyond 2026, we expect to achieve modest quarterly positive cash flow within 2027 as we fly a large percentage of astronauts with the reservations that were historically sold at lower prices. We forecast that we will achieve the adjusted EBITDA shown in the first column of the business model on Page 13 on an annualized basis sometime during 2028 as the average ticket price improves. With that, I'll turn it back over to Michael.

Thanks, Doug. Finishing up on Page 14 for the picture of our first production spaceship in the test and launch hanger. Every time I view our spaceships, I marvel at both the engineering and artistry that underpin everything about Virgin Galactic spaceflight system. Like all spacecraft built to handle the rigors of leaving and returning to the earth atmosphere, our spaceships are powerful, incredibly strong, durable and robust. Distinctively our spaceships are stunning achievements of industrial design with a grace, elegance and flat out cool factor that is unique to Virgin Galactic. Just wait until you see this ship with its new livery. We're proud of our progress, and we've opened up tours of the spaceship factory for founding astronauts, prospective customers and invited guests. We expect to christen this first ship and send it out to Spaceport America around the time of our next earnings call. We're moving with momentum, and it's awesome to see. Let's open the call for questions.

[Operator Instructions] And our first question comes from the line of Oliver Chen with TD Cowen.

Michael and Doug, nice to see all the progress. Regarding the early booking responses, Michael, that you spoke to and the encouragement there, what's the nature of what you've seen and also the implication for decisions on pricing? Also, the second ship is pretty exciting as well. What have you learned from the first ship that will bode well for the process and the second ship and then future ships perhaps? And Doug, on the ATM program, which helps fund the ROIC accretive actions. What should we know about your use of that program going forward and/or the framework?

Thanks, Oliver. I'll start it out. It's Michael here. I think the nature of who we're talking to is really interesting and encouraging. We have -- I'd say some of the people that are more prevalent in our founding astronauts as early 650 who are heavily people who have always thought about going to space, always had the dream of going to space and wanting to get there. So we see some of those. We see people who want to fly with their family members, parents or children. We're seeing people coming and saying, "I want to do this with my friends. I want to do this as a buddy trip. I want to do this as a girls trip." We're seeing people who are coming in and saying, "I have research that I've been wanting to do, how do I connect with your research program." We have governments that are -- not governments like the U.S. or China and Russia that are doing their own space programs, but governments who probably can't do that, but have an interest in their own space program reaching out to us. And it's just -- we have people who are more like corporate charters and wanting to book for a variety of corporate reasons. So the diversity, I think, is fantastic, and I'm very heartened by that. And the general shift, I'd say, in tone from 6 years ago when I started, of, oh, why would you think about going to space? We aren't seeing that. I've been off in London and New York for, I'll call it, connecting with potential customer trips. And the tone is, this is amazing. I'm so excited by this. And then you see a range of people, right? Some people are like, I want to do this in a couple of years. I want to do this on my x milestone birthday. And some are like, "I just want to go do this right now," and we send them over to our sales team. So hopefully, that gives you a little bit of sense of the nature of the people we're talking to. And so pricing, we will continue to just have the same purposeful pricing strategy. The value has to massively exceed the pricing which we charge. So that's our first premise. And we believe it's doing that and more so. So we expect we'll retire this first tranche at 750 and open up the next 1 higher. I don't think we're ready to kind of say where higher at this stage. But I do expect that it will be higher. And we'll probably continue that for a couple more clicks and then study out somewhere. So hopefully, that gives you some sense on the pricing. I'll talk a bit on, Doug, on the first shift to the second and on and then hand it to you. There's a sizable shift between the first ship. The second structural parts are going into our static test article. And then the second spaceship is kind of the third 1 through our production line. One of the big things I'm noticing is the consistency in which the carbon parts that we're manufacturing are coming out as we get to our second spaceship, we've kind of figured out the recipe as we used to describe it, right? We've looked the manufacturing problems there. And that means they kind of come out clean and they're easy for us to take in and move forward. That's the primary piece. The first assembly we went through was super smooth because we had used to determine an assembly process all the way through everything we've done. At the same time, the first time through you find the little things, small things that kind of clash when you try to put 2 things together and you didn't quite expect something that kind of is in the way and you had to kind of move it around. That's all cleaned up now. So the net of all that is, going to the second ship, we expect it to come in functionally more cheaply and its set of parts because we won't have to redo a carbon part, they're coming out more consistently. The process will be more swift in the assembly and the net of that means it's quicker and less costly to build. And we expect that will continue probably more so as we expand our fleet over time. Doug?

Thanks for the question, Oliver. Regarding the ATM and our plans going forward. So we've used the majority of it, right? It was a $300 million program. We have $87 million left on it. So it's been a successful program. And that's built up our cash balance that really helps us get through this transition phase to the start of commercial service. And really going forward, what we're looking for is it provides additional growth capital for us. The example was we just expanded our rocket motor -- are expanding our rocket motor factory capacity so we can have a larger volume of motors running through for growth, and it also provides capital for us to continue working on a launch vehicle program. So those are good opportunities for additional growth capital. So it's there for us if we need it. But I just want to point you back to these unit economics we were talking about earlier and what we're headed for. We're getting into a phase now where we've become stabilized and self-sufficient with the operations of the company. So that drives less reliance on things like ATMs going forward, that's positive as we get to commercial service.

Yes. Okay. And there's been a lot of general enthusiasm with SpaceX and space is at large. And you have a lot of partnerships or institutional ideas around governments and space ports as well. What are your thoughts on the evolution of more recurring revenue and also the nature of how you're different from SpaceX and what this may mean for your strategies or the industry at large with space being a big idea?

I'll start at the end, Oliver. Space is a big idea, has been and is getting a lot of momentum. You're seeing more of the ETFs coming out around space. And I think that's positive and well merited. Obviously, a lot of energy around the SpaceX IPO as that seems to be coming forward. And I think that will continue as you see a lot of articles to just generate more innovation within commercial space. So a lot of good things coming as SpaceX continues to mature goes forward. And I think we will benefit from that. You talked about recurring revenue. I assume you're talking like things for us and where are we different. Well, 1 thing is we are clearly focused in this first business model on human spaceflight. That's part of SpaceX's offering. There's starts at $50 million up. Ours is starting at $750,000. So close to a couple of orders of magnitude less in cost. And that's obviously a focus and all of our focus on the experiential benefits are there. But -- and then we'll take that as we talk to multiple space ports. We've built all the infrastructure now, those fixed costs are behind us, the nonrecurring engineering is behind us. And so now we're looking to scale that out. We continue -- we've talked publicly about Italy. We continue to be working with our Italian partners on how and when we want to bring that space port forward. And we continue with additional countries, and I'd say very excited about the potential to bring space ports in additional countries. That all just leverages all the infrastructure we've put in and you start to see the flow-through economics that Doug talked about with that. There's also a lot of other interesting things as governments, U.S. government, in particular, but other governments look at what can be done with space. I think people are starting to recognize the frequency with which we will be going through the atmosphere and the ways we do has a lot of potential. So 1 of the things we're going to be exploring are what things we can do as almost ride-along efforts going forward. So that is intriguing to us. I think we shared in the past that we are qualified under the Golden Dome IDIQ. And so we continue to look at ways in which we can be supportive of the government in that regard. And -- but I really think you're going to see expansion in the types of people and markets that can use these space vehicles going forward. So hopefully, that gives you a little bit of context on that.

Our next question comes from the line of Greg Konrad with Jefferies.

Maybe just start with 1 clarification question. I mean I think you mentioned $200,000. Was that per passenger? And how long do you expect that to be at that price level given, I think in the past, you talked about potentially filtering in some shorter cycle customers at a higher price point?

Thanks, Greg. This is Doug. So we do have a lot of early reservations that were priced at $200,000 to $250,000. These were sold years ago. And so we're, of course, prioritizing that for these customers that have been with us for a long time. So you'll see those at the front end of this because that's kind of on a FIFO basis. That's how that lands. But we do have opportunities to mix in other prices. We did specifically talk about an opportunity for some customers to come in earlier to be 1 of the first thousand astronauts to space. And so that comes at a premium price. And so that is a program as an example of how people can be mixed in at earlier price points or earlier flights. So that's something that would tend to filter in. But then you start to see other ticket prices come in. We had other tickets at $450,000 and then $600,000 and now $750,000. So you'll start to see those plan in as the year goes on. But it's as those planned and the sequencing, and that's TBD about how that will happen. But we just want to kind of set expectations at the very beginning. You'll see the lower tickets. And then some of those ones that are moving up in the line, those -- to be in the first 1,000, they've got to be in the first 2 quarters of the year, if you look at our flight rate. So that kind of tells you about when you'd see those start mixing in, and that will start elevating our price points.

And then I think in terms of like the new sales at $750,000, I think you talked about maybe that coming in mid-2028, if I heard correctly. And I mean, if we think about that target base model that you've laid out, assuming $600,000 per ticket. As you kind of get to that higher price point, I mean, does anything change on the cost side? Or should we think of that as largely incremental to that base margin that you laid out on the initial fleet?

Right. So that's all going to be incremental because the cost here would not change. So this -- as you pointed out, this model reflects average ticket price of $600,000. We put that in there a while ago. But as prices go above that level, that's all incremental and flows right through to the bottom line and adds to the EBITDA.

I'll leave it at 2.

Next question comes from the line of Myles Walton with Wolfe Research.

Michael, I think you talked about the Part 450 licensing regime, and I know that just went effective. How different is the license regime going forward? How much more effort you have to obtain that license. And then as you ramp flights, could you remind us of the -- basically the ongoing the recurring licensing? And is there any reason to think that, that will be an obstacle to getting up to space?

Myles, I think great news with the 450 work, we've obviously been working with the FAA for quite a while with this. We have turned in our application for our space operators license, and that's been accepted. So the FAA's received our application. We've got a letter back that's been accepted. And so that has a fairly structured process and understood time line going forward. And that process and time line we all expect to conclude before we go to space. So that's -- I think we're feeling very confident in our approach to getting our space with operators license in that regard. And we have a very focused team that's been working closely with the FAA all along. And of course, Mike Moses is our point on all of that as very well engaged. You are well aware as we talk, each of our ships are experimental in nature. They must have experimental airworthiness certificates. Eve, our launch vehicle has that. Our first delta ship has to be airworthy to get that certificate, and that happens after we finish the construction and testing. So we expect our first delta ship will get its airworthiness -- experimental airworthiness certificate just ahead of us taking it over to Spaceport America before we kind of do a captive carry flight in the glide flights. And then those experimental airworthiness certificates are on recurring renewals. We've been doing that with Unity and Eve all along. We expect that will continue. And hopefully, that answers your question on the licensing piece.

No, that's great. Go ahead.

Yes. No, no, please, if you could remind me on the ramp question.

Yes. I was just wondering, from a regulatory perspective, as you ramp, is there any ongoing recurring approvals you're going to need that in any way or risk to the recurring nature of flight. Obviously, for a month in January is not as quick as you want to be, but it's a heck a lot quicker than what you've ever done.

Yes. I don't see something in the licensing effort, of course. We expect to be completely close with the FAA, just like we did with all of our Unity flights throughout here. But nothing I would expect to see that would change in the basis. Our ability to turn the ships wasn't constrained by the FAA or licensing, it was our own inspections and maintenance process. And that's what's different with these new ships. So I don't think there's a licensing complication that we're expecting there. But we will be partnering with them on every flight as we go.

Okay. Great. And just 1 last one, if I could. Have you reached out to the administration from a perspective of investments. Obviously, they have expressed interest in lots of different areas. Your emerging area might be an interest of them as well. And just curious more from the investment side, if there's any conversation?

We are definitely in connection with the administration, especially some of the DOW departments as you'd expect, both in space, Air Force, FRL, things like that. And I think there's interest in lots of areas. You used the word investment, sometimes investment can come from sponsoring things that can help us add capabilities or help us expand capacity versus, say, a direct investment in the company. But there's also conversations with, I'll call it, other groups that would also be interested in partnering with us that we could always look to both for commercial business, but also investment to help us expand and grow more from a growth capital standpoint. So nothing to share or announce here. But I do think as we are now getting very practical and real, the assets themselves are visible tangible. You can see them. The dates are closed in on the horizon. It gives us a wider opportunity to talk about what else might we be able to do with these assets, who might we be able to do them for and I think exciting to find value. We -- I think we shared last time, we have a new member of our executive team, Megan Prichard came in as our Chief Growth Officer. So a part of Megan's team obviously will be focused on the sales of spaceflight expeditions, but a part of it is broader growth profile that would include new business and government growth like you're referring to.

[Operator Instructions] And we do have our last question comes from the line of Kristine Liwag with Morgan Stanley.

This is Gaby on for Kristine. Last quarter, you shared encouraging progress on the Italy based part opportunity, including workaround airspace, potential flight path and infrastructure requirements. Could you provide an update on where that study stands today and what the key next steps are?

Thanks, Gaby. So I'll talk about Italy and then more -- a bit more broadly about second space ports. So the work continues. The main part of the effort we had done with ENAC, I'll call it similarly the FAA version for Italy, that structurally has been completed. We understand how and where the flight pass, the way we deconflict air space, the approach we would take and everything around that. So that's pretty solid. Our next steps are really going to be both on the business model to work with our Italian partners there and the timing in which we want to do that. And kind of what's the kind of public private partnership is likely to look like. So those will be the next steps that are there with Italy, but we remain incredibly excited about that opportunity in Spaceport. And I think the same is true for the Italians. Kind of in parallel, I'd say, we continue to talk about other locations for space ports in other parts of the world. You've always heard us say we think there's probably 3 to 4 permanent spaceports and then potential for more partial year spaceports. And those conversations have been continuing and I think in a very, very positive way. So nothing to share, announce, on this other than I think the understanding of both the economic engine that is brought with a kind of fully functioning spaceport, the opportunity that spaceport brings to a government for its own potential interest to get into commercial space and the ability to bring lots of people to those countries. All those elements are meaningful. And we're looking forward to continuing those dialogues with the countries that we've been talking to.

Ladies and gentlemen, that concludes the question-and-answer session. Thank you all for joining. You may now disconnect.