Virgin Orbit cuts launch forecast while increasing revenue per launch
WASHINGTON — Virgin Orbit now expects four launches this year, at the low of previous projections, but with higher revenue per launch.
The company, in its August 12 second-quarter earnings release, reported no revenue in the quarter and a net loss of $33.3 million. The company, however, said it recorded more than $12 million in revenue in its second launch of the year on July 2, just after the quarter ended. The company recognizes revenue at launch.
The $12 million is significantly higher than previous launches, which averaged $2.5 million per launch. Future launches, according to the company’s forecast, will produce between $6 million and $12 million in revenue per launch.
“You’re seeing a market reaction as we’ve been steadily proving the technology and then going into operation and demonstrating the reliability of the system,” said Dan Hart, chief executive of Virgin Orbit. “You also find that some customers have additional requirements and needs, often government payloads require additional aspects of mission assurance or managing their payloads.”
As Virgin Orbit’s LauncherOne system has transitioned from development to operations, with four consecutive successful launches dating back to early 2021, the company is making improvements to launch operations. Hart said that on the most recent launch, the company cut rocket manufacturing labor hours by 25 percent and time spent on launch operations by 9 percent.
“Fewer days in launch operations significantly reduce our overall launch costs and improve overhead efficiency, while increasing our launch responsiveness,” Hart said, adding that the company was “ahead of the curve.” ‘expected learning’ with these reductions.
However, its forecast for the number of launches in the year has dropped. The company now expects only four launches this year, down from the company’s forecast of six at the start of the year and a range of four to six launches expected in June.
The next launch remains Virgin Orbit’s first launch from outside the United States, at Spaceport Cornwall in England. The company, which previously expected the launch to take place in September, did not give a date in its earnings call, instead calling it its “next launch.”
Hart said the LauncherOne rocket for this mission will leave the company’s factory in Long Beach, Calif., within the next two weeks and head to Mojave Air and Space Port for launch rehearsal. He said Virgin Orbit was also working closely with the Civil Aviation Authority (CAA), the UK agency responsible for license launches. The CAA announced a public consultation on the proposed launch license on July 22, which is scheduled to close on August 22.
“It’s the first launch they’ve ever done, so we’re working very closely with them. It’s a new process and it takes a bit of time to work through it,” Hart said of the company’s interactions with the CAA. Other factors for launch timing include preparing the payloads for the mission as well as the infrastructure required at the launch site, a commercial airport.
Following the Cornwall launch, Virgin Orbit plans to conduct another launch in the fourth quarter from Mojave, the site of its previous launches. The company did not disclose the client for this launch.
Virgin Orbit ended the quarter with $122 million in cash. This included raising $50 million by exercising part of a reserve stock purchase agreement announced in March with a hedge fund, Yorkville Advisors, to sell up to $250 million worth of shares in three year.
Brita O’Rear, Virgin Orbit’s chief financial officer, said cash should “provide sufficient short-term liquidity” for the company. “We will continue to be opportunistic in the capital markets.”