Virgin Galactic Holdings (SPCE -2.16%), which is pioneering space tourism, reported fourth-quarter and full-year 2019 results after the market closed on Tuesday. Shares are down 15.3% as of 3:52 p.m. EST on Wednesday, while the S&P 500 is flat. We can probably attribute the market's negative reaction at least in part to the company's revenue and adjusted earnings before interest, taxes, and depreciation (EBITDA) results falling short of Wall Street's expectations.

However, there are two key things to note on this topic. First, this is a "story stock," so current results matter extremely little. Second, the novel coronavirus' effect on the stock market since Monday doesn't allow for a clear picture of how the market is reacting to other specific events, such as earnings releases. 

Where the stock's price ends up on Wednesday will probably be of little relevance in the bigger picture. Since the company went public in October at $11.79 per share (via a reverse merger, not a traditional initial public offering, or IPO), the stock has rocketed 189% higher through Tuesday.

Here's how the quarter and year worked out for Virgin Galactic and its investors.

Spaceport America in New Mexico - showing facility and two spacecraft parked just outside it.

Spaceport America in New Mexico. Image source: Virgin Galactic.

Virgin Galactic's key Q4 numbers


Q4 2019

Q4 2018



$529,000 $1.29 million (59%)

Operating Income

($74 million) ($46 million) Loss widened 61%

Net income

($72.7 million) ($45.8 million) Loss widened 59%

Cash and cash equivalents at end of period

$480 million -- --

Data source: Virgin Galactic.

Adjusted EBITDA came in at a loss of $54.8 million. 

Wall Street was looking for revenue of $1.78 million and adjusted EBITDA of negative $46.9 million. So Virgin Galactic missed both expectations.

Virgin Galactic's key full-year 2019 numbers






$3.78 million $2.85 million 33%

Operating income

($213. 3 million) ($167.2 million) Loss widened 28%

Net Income

($211 million) ($138.2 million) Loss widened 53%
Cash and cash equivalents at end of period $480 million -- --

Data source: Virgin Galactic.

What happened with Virgin Galactic since the quarter ended?

  • As of Feb. 23, registrations of interest in flight reservations were 7,957, up 124% from 3,557 at the end of the third quarter.
  • On Feb. 25, the company announced its "One Small Step" initiative, which is part of its strategy for the reopening of spaceflight sales. (As I recently wrote in my overview of Virgin Galactic and its operations, in 2014, the company "halted ticket sales after a crash killed a pilot during a test flight.") Under this program, folks will be able to pay a refundable $1,000 deposit "to secure a front-of-line position for future ticket reservations."
  • The company continues to make progress on the the U.S. Federal Aviation Administration's (FAA) verification and validation provisos. So far, it has cleared 20 of 29 elements.
  • In January, it "achieved critical design and build milestones on the second spaceship and achieved 50% completion of the third spaceship's structure," according to the earnings release.

What happened with Virgin Galactic during the quarter?

  • It went public on the New York Stock Exchange.
  • It "achieved key operational milestones at Spaceport America, including exercising our new mission control, ground operational elements and external agreements/communications that were required for flights of VMS Eve [a carrier aircraft -- "VMS" stands for "Virgin Mother Ship"] and other aircraft types."
  • It announced a strategic partnership with Boeing and a $20-million investment by Boeing's HorizonX Ventures. The aerospace giant will work with Virgin Galactic to "broaden space access" and "transform global travel" by developing aircraft that can travel at hypersonic speeds.
  • The company entered into a contract with the Italian Air Force.
  • It launched its Astronaut Readiness Program at athletic shoe and apparel manufacturer Under Armour's headquarters in Baltimore, and unveiled "Future Astronaut spacesuits."

What management had to say

Here's what CEO George Whitesides had to say in the earnings release:

Throughout 2019, we continued to achieve key milestones in our mission to open access to space in a safe, innovative and affordable way. During the fourth quarter, we took major steps toward reaching that goal by completing our transaction with Social Capital Hedosophia and becoming publicly listed on the NYSE [a reverse merger], as well as building operational readiness at Spaceport America in New Mexico. The progress we made in 2019, combined with the high level of interest from potential customers, underpin the steps we are taking toward reopening ticket sales. We are continuing to build on our strong momentum as we enter the most exciting chapter of our story to date and prepare for commercial launch.

Wrapping it up

For a company like Virgin Galactic, which has extremely little revenue because it hasn't yet started its core commercial operations, quarterly revenue and profitability metrics don't mean much. Cold hard cash is what matters the most at this point.

Thanks to going public in October, the company has a ton of cash -- $480 million at the end of 2019. Moreover, it has no debt, so it's in great shape to continue to invest in its business. In addition, there's a lot of interest in the stock, as evidenced by its big run-up this year, so the company could always raise money by issuing new shares. That's not preferable, of course, because it dilutes current investors' ownership, but it's good to have options.  

Virgin Galactic aims to launch the world's first commercial spacecraft into suborbital space with paying passengers on board sometime this year. Assuming the launch doesn't get pushed back (which I think is a good possibility, but better safe than sorry), the company has projected that it will reach profitability in 2021.