10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                   to                  

Commission File No. 001-38202

Virgin Galactic Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	85-3608069
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1700 Flight Way Tustin California	92782
(Address of Principal Executive Offices)	(Zip Code)

(575) 424-2100

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.0001 par value per share	SPCE	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of July 30, 2022, there were 258,715,178 shares of the Company’s common stock, par value $0.0001, issued and outstanding.

VIRGIN GALACTIC HOLDINGS, INC.

TABLE OF CONTENTS

		Page
	Cautionary Note Regarding Forward-Looking Statements	2
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss	5
	Condensed Consolidated Statements of Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	41
Item 4.	Controls and Procedures	42
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
Signatures		46

1

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning us and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of management, as well as assumptions made by, and information currently available to management. Forward-looking statements may be accompanied by words such as “achieve,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “future,” “grow,” “increase,” “intend,” “may,” “opportunity,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or similar words, phrases, or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside our control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the following:

•any delay in completing the flight test program and final development of our spaceflight fleet, which is comprised of our SpaceShipTwo spaceships, VSS Unity and VSS Imagine, and our mothership carrier aircraft, VMS Eve;

•our ability to conduct test flights;

•our ability to operate our spaceflight system after commercial launch;

•the safety of our spaceflight systems;

•the development of the markets for commercial human spaceflight and commercial research and development payloads;

•our ability to effectively market and sell human spaceflights;

•our ability to convert our backlog or inbound inquiries into revenue;

•our anticipated full passenger capacity;

•our ability to achieve or maintain profitability;

•delay in development or the manufacture of spaceflight systems;

•our ability to successfully develop our next generation vehicles, and the time and costs associated with doing so;

•our ability to supply our technology to additional market opportunities;

•our expected capital requirements and the availability of additional financing;

•our ability to attract or retain highly qualified personnel;

•the impact of the COVID-19 pandemic on us, our operations, our future financial or operational results, and our access to additional financing;

•extensive and evolving government regulation that impact the way we operate;

•risks associated with international expansion;

•our ability to maintain effective internal control over financial reporting and disclosure and procedures; and

•our ability to continue to use, maintain, enforce, protect and defend our owned and licensed intellectual property, including the Virgin brand.

2

Additional factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in Part I, Item 1.“Business,” Part I, Item 1A. “Risk Factors,” and Part I, Item 2. “Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Annual Report on Form 10-K") and in Part I, Item 2. “Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q. Although we believe that the expectations reflected in the forward-looking statements are reasonable, our information may be incomplete or limited, and we cannot guarantee future results. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

Each of the terms the “Company,” “Virgin Galactic,” “we,” “our,” “us” and similar terms used herein refer collectively to Virgin Galactic Holdings, Inc., a Delaware corporation, and its consolidated subsidiaries, unless otherwise stated.

3

PART I. FINANCIAL INFORMATION

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

	June 30, 2022		December 31, 2021
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	329,857	$	524,481
Restricted cash	40,207		25,549
Marketable securities, short-term	587,716		79,418
Inventories	33,804		29,668
Prepaid expenses and other current assets	18,576		19,476
Total current assets	1,010,160		678,592
Marketable securities, long-term	164,777		301,463
Property, plant, and equipment, net	49,183		47,498
Other non-current assets	44,356		41,281
Total assets	$	1,268,476	$	1,068,834
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	12,768	$	9,237
Accrued liabilities	36,707		28,787
Customer deposits	104,596		90,863
Other current liabilities	2,803		2,636
Total current liabilities	156,874		131,523
Non-current liabilities
Convertible senior notes, net	414,563		—
Other long-term liabilities	46,464		43,047
Total liabilities	617,901		174,570
Commitments and contingencies (Note 17)
Stockholders' equity
Preferred stock, $0.0001 par value; 10,000,000 authorized; none issued and outstanding	—		—
Common stock, $0.0001 par value; 700,000,000 shares authorized; 258,690,646 and 258,166,417 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	26		26
Additional paid-in capital	1,987,614		2,019,750
Accumulated deficit	(1,327,421)		(1,123,643)
Accumulated other comprehensive income	(9,644)		(1,869)
Total stockholders' equity	650,575		894,264
Total liabilities and stockholders' equity	$	1,268,476	$	1,068,834

See accompanying notes to condensed consolidated financial statements.

4

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands except for per share data)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue	$	357	$	571	$	676	$	571
Operating expenses:
Customer experience	122		63		147		63
Selling, general, and administrative	44,700		36,916		81,707		80,235
Research and development	62,340		34,619		114,167		69,708
Depreciation and amortization	2,915		2,871		5,767		5,740
Total operating expenses	110,077		74,469		201,788		155,746
Operating loss	(109,720)		(73,898)		(201,112)		(155,175)
Interest income	1,985		220		2,803		545
Interest expense	(3,157)		(6)		(5,631)		(13)
Change in fair value of warrants	—		(20,363)		—		(69,082)
Other income, net	194		13		210		40
Loss before income taxes	(110,698)		(94,034)		(203,730)		(223,685)
Income tax expense	(23)		(6)		(48)		(49)
Net loss	(110,721)		(94,040)		(203,778)		(223,734)
Other comprehensive income (loss):
Foreign currency translation adjustment	(108)		(19)		(133)		8
Unrealized loss on marketable securities	(1,862)		—		(7,642)		—
Total comprehensive loss	$	(112,691)	$	(94,059)	$	(211,553)	$	(223,726)
Net loss per share:
Basic and diluted	$	(0.43)	$	(0.39)	$	(0.79)	$	(0.94)
Weighted-average shares outstanding:
Basic and diluted	258,589,270		240,733,497		258,439,051		238,774,515

See accompanying notes to condensed consolidated financial statements.

5

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Statements of Equity

(In thousands except for per unit and share data)

(Unaudited)

(For the period ended June 30, 2021)

	Preferred Stock			Common Stock
	# of Shares	Par Value		# of Shares	Par Value		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total
Balance as of December 31, 2020	—	$	—	236,123,659	$	23	$	1,297,794	$	(770,744)	$	5	$	527,078
Net loss	—	—		—	—		—		(129,694)		—		(129,694)
Other comprehensive income	—	—		—	—		—		—		26		26
Stock-based compensation	—	—			—		22,111		—		—		22,111
Issuance of common stock pursuant to stock-based compensation, net of withholding taxes	—	—		1,150,771	—		323		—		—		323
Balance as of March 31, 2021	—	—		237,274,430	23		1,320,228		(900,438)		31		419,844
Net loss	—	—		—	—		—		(94,040)		—		(94,040)
Other comprehensive loss	—	—		—	—		—		—		(20)		(20)
Stock-based compensation	—	—		—	—		14,423		—		—		14,423
Issuance of common stock pursuant to stock-based compensation, net of withholding taxes	—	—		275,283	—		840		—		—		840
Common stock issued related to warrants exercised	—	—		3,387,827	—		104,176		—		—		104,176
Balance as of June 30, 2021	—	$	—	240,937,540	$	23	$	1,439,667	$	(994,478)	$	11	$	445,223

See accompanying notes to condensed consolidated financial statements.

6

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Statements of Equity

(In thousands except for per unit and share data)

(Unaudited)

(For the period ended June 30, 2022)

	Preferred Stock			Common Stock
	# of Shares	Par Value		# of Shares	Par Value		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance as of December 31, 2021	—	$	—	258,166,417	$	26	$	2,019,750	$	(1,123,643)	$	(1,869)	$	894,264
Net loss	—	—		—	—				(93,057)		—		(93,057)
Other comprehensive loss	—	—		—	—				—		(5,805)		(5,805)
Stock-based compensation	—	—		—	—		10,895		—		—		10,895
Issuance of common stock pursuant to stock-based compensation, net of withholding taxes	—	—		307,471	—		(1,882)		—		—		(1,882)
Purchase of capped calls	—	—		—	—		(52,318)		—		—		(52,318)
Balance as of March 31, 2022	—	—		258,473,888	26		1,976,445		(1,216,700)		(7,674)		752,097
Net loss	—	—			—				(110,721)				(110,721)
Other comprehensive loss	—	—			—				—		(1,970)		(1,970)
Stock-based compensation	—	—			—		12,083		—				12,083
Issuance of common stock pursuant to stock-based compensation, net of withholding taxes	—	—		216,758	—		(914)		—				(914)
Balance as of June 30, 2022	—	$	—	258,690,646	$	26	$	1,987,614	$	(1,327,421)	$	(9,644)	$	650,575

See accompanying notes to condensed consolidated financial statements.

7

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities
Net loss	$	(203,778)	$	(223,734)
Stock-based compensation	22,978		36,535
Depreciation and amortization	5,767		5,740
Amortization of debt issuance costs	841		—
Change in fair value of warrants	—		69,082
Other operating activities, net	241		(17)
Change in assets and liabilities
Inventories	(4,136)		518
Other current and non-current assets	1,410		319
Accounts payable and accrued liabilities	10,109		(751)
Customer deposits	13,733		(1,252)
Other current and non-current liabilities	(125)		88
Net cash used in operating activities	(152,960)		(113,472)
Cash flows from investing activity
Capital expenditures	(6,293)		(1,647)
Purchases of marketable securities	(379,254)		—
Cash used in investing activity	(385,547)		(1,647)
Cash flows from financing activities
Payments of lease obligations	(66)		(69)
Proceeds from convertible senior notes	425,000		—
Debt issuance costs	(11,278)		—
Capped call premium	(52,318)		—
Proceeds from issuance of common stock pursuant to stock options exercised	49		12,965
Transaction costs	—		(274)
Withholding taxes paid on behalf of employees on net settled stock-based awards	(2,846)		(11,803)
Net cash provided by financing activities	358,541		819
Net decrease in cash and cash equivalents	(179,966)		(114,300)
Cash, cash equivalents and restricted cash at beginning of year	550,030		678,955
Cash, cash equivalents and restricted cash ending balances	$	370,064	$	564,655
Cash and cash equivalents	$	329,857	$	551,624
Restricted cash	40,207		13,031
Cash, cash equivalents and restricted cash	$	370,064	$	564,655

See accompanying notes to condensed consolidated financial statements.

8

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(1) Organization and its wholly owned subsidiaries ("VGH, Inc.")

Virgin Galactic Holdings, Inc. and its wholly owned subsidiaries ("VGH, Inc."), in this report as "we," "us," "our," the "Company" and similar terms, are focused on the development, manufacture and operations of spaceships and related technologies for the purpose of conducting commercial human spaceflight and flying commercial research and development payloads into space. The development and manufacturing activities are located in Tustin, California and Mojave, California, with plans to operate the commercial spaceflights out of Spaceport America located in New Mexico.

(2) Summary of Significant Accounting Policies

(a)    Basis of Presentation

These condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). All intercompany transactions and balances between the various legal entities comprising the Company have been eliminated in consolidation.

Certain reclassifications of the components of operating loss for the three and six month period ended June 30, 2021 have been made to the comparable prior period in the condensed consolidated statements of operations and comprehensive loss to conform to the same current period presentations. Specifically, cost of revenue has been reclassified to customer experience, and gross margin is no longer presented. Customer experience expenses related to spaceflight operations include the consumption of a rocket motor and fuel and other consumables, as well as payroll and benefits for our pilots and ground crew. Customer experience expenses related to the payload cargo services, as well as engineering services, consist of materials and human capital, such as payroll and benefits, to perform these services. Additionally, customer experience expenses include costs associated with maintaining and growing our Future Astronaut community, as well as hospitality, medical, safety, security, training, and facility costs that are for the benefit of our astronauts. Additionally, depreciation and amortization expense are presented separately instead of included in selling, general, and administrative or research and development expenses. These reclassifications had no impact on total loss as previously reported.

(b)     Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP required us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base these estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates. Significant estimates inherent in the preparation of the consolidated financial statements include, but are not limited to, accounting for revenue, contract assets, contract liabilities, useful lives of property, plant and equipment, fair value of investments, accrued liabilities, income taxes including deferred tax assets and liabilities and impairment valuation, warrants, stock-based awards and contingencies.

9

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(c)    Convertible Senior Notes

On January 1, 2022, the Company adopted ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which removes from GAAP the liability and equity separation model for convertible instruments with either cash or beneficial conversion features. As a result, convertible debt instruments would only be separated into multiple components if they were issued at a substantial premium or if embedded derivatives requiring bifurcation were identified. The convertible senior notes (the "2027 Notes") were not issued at a substantial premium, and the Company analyzed the provisions of the notes and did not identify any material embedded features which would require bifurcation from the host debt. As such, the notes are accounted for entirely as a liability net of unamortized issuance costs. The carrying amount of the liability is classified as long-term as the instrument does not mature within one year of the balance sheet date and the holder is not permitted to demand repayment of the principal within one year of the balance sheet date. However, if conditions to convertibility are met as described further in Note 11, the Company may be required to reclassify the carrying amount of the liability to current. The embedded conversion features are not remeasured as long as they do not meet the separation requirement of a derivative. Issuance costs are amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the term of the notes. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share, however there was no impact during the current quarter as the convertible instruments were anti-dilutive.

(d)    Capped Call Transactions

In connection with the pricing of our 2027 Notes, the Company entered into capped call transactions with respect to its common stock (the "2027 Capped Calls"). The 2027 Capped Calls are purchased call options that give the Company the option to purchase, subject to anti-dilution adjustments substantially identical to those in the 2027 Notes. The Company's capped call transactions are accounted for as separate transactions from the 2027 Notes and are classified as equity instruments as a reduction to additional paid-in capital in the condensed consolidated balance sheets. The instruments are initially recorded at fair value and not subsequently remeasured so long as they continue to qualify for equity classification. The capped call transactions have the effect of reducing the number of shares outstanding if exercised. Therefore, the capped call transactions are anti-dilutive and not included in the calculation of diluted shares outstanding for the purposes of diluted net loss per share. See Note 11 in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information on the 2027 Capped Calls.

(e)     Other Summary of Significant Accounting Policies

There have been no other significant changes from the significant accounting policies disclosed in Note 2 of the “Notes to Consolidated Financial Statements” included in the Company's Annual Report on Form 10-K.

The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K. Interim results are not necessarily indicative of the results for a full year.

(3)    Recent Accounting Pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASU”). See Note 2 in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information on recently adopted accounting pronouncements.

10

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(4)    Related Party Transactions

The Company licenses its brand name from certain entities affiliated with Virgin Enterprises Limited (“VEL”), a company incorporated in England. VEL is an affiliate of the Company. Under the trademark license, the Company has the exclusive right to operate under the brand name “Virgin Galactic” worldwide. Royalty payables, excluding sponsorship royalties, for the use of license are the greater of 1% of revenue or $40,000 per quarter, prior to the commercial launch date. Sponsorship royalties payable are 25% of sponsorship revenue. We paid license and royalty fees of $40,000 for each of the three months ended June 30, 2022 and 2021. We paid license and royalty fees of $80,000 for each of the six months ended June 30, 2022 and 2021.

The Company has a Transition Services Agreement ("TSA") with Virgin Orbit, LLC ("VO") based on an allocation methodology that considers our headcount, unless directly attributable to the business. The Company is allocated operating expense from VO Holdings, Inc. and its subsidiaries (“VOH”), a majority owned company of Galactic Ventures, LLC ("GV"), a wholly-owned subsidiary of Vieco 10, was the direct parent of the Virgin Galactic Companies. for operations-related functions based on an allocation methodology that considers our headcount, unless directly attributable to the business. Operating expense allocations include use of machinery and equipment, pilot services, and other general administrative expenses. We were allocated $34,000 and $31,000 operating expenses, net, from VOH for the three months ended June 30, 2022 and 2021, respectively. We were allocated $34,000 and $71,000 of operating expenses, net from VOH for the six months ended June 30, 2022 and 2021, respectively. The Company has a receivable from VOH of $47,000 and $43,000 as of June 30, 2022 and December 31, 2021, respectively.

(5)    Cash, Restricted Cash, Cash Equivalents and Marketable Securities

The amortized cost, unrealized loss and estimated fair value of the Company's cash equivalents and marketable securities as of June 30, 2022 and December 31, 2021 were as follows:

	As of June 30, 2022
	Amortized Cost		Gross Unrealized Losses		Fair Value
	(In thousands)
Cash, restricted cash and cash equivalents
Cash and restricted cash	$	71,797	$	—	$	71,797
Money market	206,870		—		206,870
Certificate of deposits	91,397		—		91,397
Marketable securities
US treasuries	209,596		(345)		209,251
Corporate debt securities	552,541		(9,299)		543,242
Total cash, cash equivalents and marketable securities	$	1,132,201	$	(9,644)	$	1,122,557

11

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

	As of December 31, 2021
	Amortized Cost		Gross Unrealized Losses		Fair Value
	(In thousands)
Cash, restricted cash and cash equivalents
Cash and restricted cash	$	55,592	$	—	$	55,592
Money market	402,889		—		402,889
Certificate of deposits	91,549		—		91,549
Marketable securities
Corporate debt securities	382,884		(2,003)		380,881
Total cash, cash equivalents and marketable securities	$	932,914	$	(2,003)	$	930,911

The Company included $3.6 million and $2.3 million of interest receivable in prepaid expenses and other current assets as of June 30, 2022 and December 31, 2021, respectively.

The Company recognized $1.8 million in amortization and accretion of purchase premiums and discounts on our marketable securities within interest income, net for the three months ended June 30, 2022. The Company did not recognize any amortization expense for the three months ended June 30, 2021. The Company recognized $4.0 million in amortization expense for marketable securities within interest income, net for the six months ended June 30, 2022. The Company did not recognize any amortization expense for the six months ended June 30, 2021.

We record gross realized gains and losses as a component of other income, net in the consolidated statements of operations. For the three months ended June 30, 2022 and June 2021, the Company did not recognize any material gross realized gains and losses. For the six months ended June 30, 2022, the Company recognized $0.1 million loss in other income, net. For the six months ended June 30, 2021, the Company did not recognize any material gross realized gains and losses.

The following table presents the contractual maturities of the Company's marketable securities as of June 30, 2022:

	As of June 30, 2022
	Amortized Cost		Estimated Fair Value
	(In thousands)
Matures within one year	$	592,992	$	587,716
Matures between one to two years	169,145		164,776
Total	$	762,137	$	752,492

(6)    Inventory

As of June 30, 2022 and December 31, 2021, inventory is comprised of the following:

12

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
Raw materials	$	24,651	$	21,127
Spare parts	9,153		8,541
Total inventory	$	33,804	$	29,668

For the three months and six months ended June 30, 2022 and 2021, we did not have any material write-offs of inventory due to excess and obsolescence.

(7)    Property, Plant, and Equipment, net

As of June 30, 2022 and December 31, 2021, property, plant, and equipment, net consisted of the following:

		As of
		June 30, 2022		December 31, 2021
		(Unaudited)
	(In thousands)
Land		$	401	$	—
Buildings		9,117		9,117
Leasehold improvements		29,306		29,155
Aircraft		195		195
Machinery and equipment		39,718		37,002
IT software and equipment		26,719		23,523
Construction in progress		3,816		2,901
		109,272		101,893
Less accumulated depreciation and amortization		(60,089)		(54,395)
Property, plant, and equipment, net		$	49,183	$	47,498

The following table sets forth the summary of depreciation and amortization expense for property, plant and equipment, net:

		Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021
		(Unaudited)
	(In thousands)
Customer experience		$	—	$	—	$	—	$	—
Selling, general, and administrative		1,667		1,284		3,266		2,558
Research and development		1,248		1,587		2,502		3,182
		$	2,915	$	2,871	$	5,767	$	5,740

13

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(8)     Leases

The Company's leases are more fully described in Note 8 of the "Notes to Consolidated Financial Statements" to its Annual Report on Form 10-K.

The components of lease expense related to leases for the periods presented below are as follows:

	Three Months Ended June 30,
	2022		2021
	(Unaudited and in thousands)
Lease Cost:
Operating lease expense	$	2,092	$	1,254
Short-term lease expense	—		8
Finance Lease Cost:
Amortization of right-of-use assets	29		35
Interest on lease liabilities	4		7
Total finance lease cost	33		42
Variable lease cost	2,106		1,372
Total lease cost	$	4,231	$	2,676

	Six Months Ended June 30,
	2022		2021
	(Unaudited and in thousands)
Lease Cost:
Operating lease expense	$	4,069	$	2,514
Short-term lease expense	—		20
Finance Lease Cost:
Amortization of right-of-use assets	58		69
Interest on lease liabilities	9		14
Total finance lease cost	67		83
Variable lease cost	3,316		2,710
Total lease cost	$	7,452	$	5,327

The components of supplemental cash flow information related to leases for the period are as follows:

14

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

	Six Months Ended June 30,
	2022			2021
	(In thousands, except term and rate data)
Cash flow information:
Operating cash flows for operating leases	$	5,087		$	2,712
Operating cash flows for finance leases	$	9		$	14
Financing cash flows for finance leases	$	66		$	69
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	4,924		$	501
Finance Leases	$	—		$	19
Other Information:
Weighted average remaining lease term:
Operating leases (in years)	11.18			12.37
Finance leases (in years)	1.71			2.49
Weighted average discount rates:
Operating leases	11.68		%	11.65		%
Finance leases	8.12		%	8.26		%

The supplemental balance sheet information related to leases for the period is as follows:

	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
Operating leases
Long-term right-of-use assets	$	38,776	$	35,486
Short-term operating lease liabilities	$	2,384	$	2,204
Long-term operating lease liabilities	43,509		39,965
Total operating lease liabilities	$	45,893	$	42,169

Commitments

The Company has certain non-cancelable operating leases primarily for its premises. These leases generally contain renewal options for periods ranging from 3 to 20 years and require the Company to pay all executory costs, such as maintenance and insurance. Certain lease arrangements have rent free periods or escalating payment provisions, and we recognize rent expense of such arrangements on a straight line basis.

15

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum finance lease payments as of June 30, 2022 are as follows:

	Operating Leases		Finance Leases
	(In thousands)
2022 (for the remaining period)	$	3,580	$	62
2023	7,079		106
2024	7,357		30
2025	7,282		—
2026	7,386		—
Thereafter	52,274		—
Total lease payments	$	84,958	$	198
Less:
Imputed interest/present value discount	$	(39,065)	$	(13)
Present value of lease liabilities	$	45,893	$	185

(9)    Accrued Expenses

A summary of the components of accrued liabilities are as follows:

	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
Accrued payroll	$	3,447	$	4,214
Accrued vacation	6,218		5,372
Accrued bonus	10,433		12,218
Accrued interest expense	4,781		—
Other accrued expenses	11,828		6,983
Total accrued expenses	$	36,707	$	28,787

16

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(10)    Commercial Loan

	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
Commercial loan	$	310	$	310
Less: Current portion	(310)		(310)
Non-current portion	$	—	$	—

On June 18, 2020, we financed the purchase of software licenses through a loan totaling approximately $0.9 million. The loan amortized in three equal annual installments of approximately $0.3 million with the final payment due on October 1, 2022 with 0% interest rate. The loan is secured by a standby letter of credit issued from our financial institution and restricted cash has been recorded for the corresponding outstanding balance. The outstanding balance is recorded in other current-liabilities on the condensed consolidated balance sheets.

The imputed interest of this loan was immaterial.

(11)    Convertible Senior Notes

2027 Convertible Senior Notes

On January 19, 2022, the Company completed an offering of $425 million aggregate principal amount of the 2027 Notes. The 2027 Notes are senior, unsecured obligations of the Company, and bear interest at a fixed rate of 2.50% per year. Interest is payable in cash semi-annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2022. The 2027 Notes mature on February 1, 2027 unless earlier repurchased, redeemed or converted.

The terms of the 2027 Notes are governed by an Indenture by and between the Company and U.S. Bank National Associations, as Trustee (the "2027 Indenture"). Upon conversion by the noteholders, the 2027 Notes may be settled in cash, shares of the Company's common stock or a combination of cash and shares of common stock, par value $0.0001 per share (the “common stock”), at our election, based on the conversion rate.

The 2027 Notes are convertible at an initial conversion rate of 78.1968 shares of common stock per $1,000 principal amount of the 2027 Notes, which is equal to an initial conversion price of approximately $12.79 per share of common stock, subject to adjustment upon the occurrence of certain events. Noteholders will have the right to convert their notes during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on June 30, 2022, under the following circumstances:

17

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

•during any calendar quarter after June 30, 2022 (and only during such calendar quarter) if the last reported sale price of the Company's common stock for each of at least 20 trading days in a period of 30 consecutive trading days ending on and including the last trading day of the preceding calendar quarter is more than 130% of the then applicable conversion price for the Notes per share of common stock;

•during the five consecutive business days immediately after any ten consecutive trading day period in which the trading price per $1,000 principal amount of 2027 Notes for each day of that period was less than 98% of the product of the last reported sale price of our common stock and the then applicable conversion rate;

•the Company calls any or all of the 2027 Notes for redemption, holders may convert all or any portion of their notes at any time prior to the close of business on the scheduled trading day prior to the redemption date, even if the 2027 Notes are not otherwise convertible at such time; or

•specified distributions to holders of our common stock are made or specified corporate events occur, as described in the 2027 Indenture.

On and after November 1, 2026, noteholders will have the right to convert their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will have the right to elect to settle conversions in cash, in shares of its common stock or in a combination of cash and shares of its common stock. During the three and six months ended June 30, 2022, the conditions allowing holders of the 2027 Notes to convert were not met, and as a result, the 2027 Notes were classified as noncurrent liabilities as of June 30, 2022.

The 2027 Notes will be redeemable, in whole or in part (subject to certain limitations), for cash at the Company's option at any time, and from time to time, on or after February 6, 2025 and on or before the 20th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the Company's common stock exceeds 130% of the conversion price for a specified period of time and certain liquidity conditions have been satisfied. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. During the three and six months ended June 30, 2022, the Company did not redeem any of the 2027 Notes.

Holders of the 2027 Notes who convert their 2027 Notes in connection with certain corporate events that constitute a make-whole fundamental change (as defined in the 2027 Indenture) or in connection with the Company's issuance of a redemption notice are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a corporate event that constitutes a fundamental change (as defined in the 2027 Indenture), holders of the 2027 Notes may require the Company to repurchase all or a portion of their 2027 Notes at a price equal to the principal amount of the 2027 Notes being repurchased, plus any accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

The 2027 Notes, net consisted of the following (in thousands):

	As of
	June 30, 2022
	(Unaudited)
Principal	$	425,000
Less: unamortized debt issuance costs	(10,437)
Net carrying amount	$	414,563

18

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

As of June 30, 2022, we recorded $4.8 million of accrued interest expense on our 2027 Notes within accrued expenses. For the three months ended June 30, 2022, we recognized $3.2 million of total interest expense on our 2027 Notes, including $0.4 million of amortized debt issuance costs. For the six months ended June 30, 2022, we recognized $5.6 million of total interest expense on our 2027 Notes, including $0.8 million of amortized debt issuance cost.

Capped Call Transactions

In connection with the pricing of the 2027 Notes, the Company entered into capped call transactions with respect to its common stock. The 2027 Capped Calls are purchased call options that give the Company the option to purchase, subject to anti-dilution adjustments substantially identical to those in the 2027 Notes, approximately 33 million shares of its common stock for approximately $12.79 per share (subject to adjustment), corresponding to the approximate initial conversion price of the 2027 Notes, exercisable upon conversion of the 2027 Notes. The 2027 Capped Calls have initial cap prices of $20.06 per share (subject to adjustment), which represents a premium of 100% over the closing price of the Company's common stock on January 13, 2022, and will expire in 2027, if not exercised earlier. The 2027 Capped Calls are intended to reduce potential dilution to the Company's common stock upon any conversion of the 2027 Notes and/or offset the potential cash payments that the Company could be required to make in excess of the principal amount upon any conversion of the 2027 Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the 2027 Capped Call transactions. The 2027 Capped Calls are separate transactions, each between the Company and the applicable option counterparty, and are not part of the terms of the 2027 Notes and will not affect any holder's rights under the 2027 Notes or the 2027 Indenture. Holders of the 2027 Notes will not have any rights with respect to the 2027 Capped Call transactions.

The Company paid an aggregate amount of $52.3 million for the 2027 Capped Calls. As these transactions meet certain accounting criteria, the amount paid for the 2027 Capped Calls was recorded as a reduction to additional paid-in capital in the condensed consolidated balance sheets. The fair value of the 2027 Capped Calls is not remeasured each reporting period so long as they continue to qualify for equity classification, which they did for the current period.

(12)    Income Taxes

Income tax expense was $23,000 and $6,000 for the three months ended June 30, 2022 and 2021, respectively. Income tax expense was $48,000 and $49,000 for the six months ended June 30, 2022 and 2021, respectively. The effective income tax rate was nil for three months ended June 30, 2022 and 2021. The effective income tax rate was nil for six months ended June 30, 2022 and 2021. Our effective tax rate differs from the U.S. statutory rate primarily due to a substantially full valuation allowance against our net deferred tax assets where it is more likely than not that some or all of the deferred tax assets will not be realized.

(13)    Stockholders' Equity

There have been no significant changes from the Stockholders' Equity disclosed in Note 12 of the “Stockholders Equity” included in our Annual Report on Form 10-K.

Stockholders' Agreement

In connection with the closing of the Virgin Galactic business combination in October 2019 (the "Business Combination"), the Company entered into a stockholders’ agreement with certain of the Company’s investors. Pursuant to the terms of the Stockholders’ Agreement, as long as Virgin Investments Limited ("VIL") is entitled to designate two directors to the Company’s Board of Directors, the Company must obtain VIL’s prior written consent to engage in certain corporate transactions and management functions such as business combinations, disposals, acquisitions, incurring indebtedness, and engagement of professional advisors, among others.

19

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Warrants and Warrant Redemption

Public and private placement warrants were initially issued as part of Social Capital Hedosophia Holdings Corp.'s ("SCH") initial public offering in 2017 and assumed upon the consumption of the Business Combination. As of June 30, 2022, and December 31, 2021, there were no public or private placement warrants outstanding.

The Company remeasured the fair value of the Warrants at each reporting date with changes recorded in earnings. In connection with the Company's remeasurement of the Warrants to fair value, the Company recorded expense of approximately $20.4 million for the three months ended June 30, 2021 and $69.1 million for the six months ended June 30, 2021.

At The Market Offering

On July 12, 2021, the Company entered into a distribution agency agreement with Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC (each, an “Agent” and collectively, the “Agents”) providing for the offer and sale of up to $500.0 million of shares of the Company’s common stock, par value $0.0001 per share, through an "at the market offering" program ("ATM"), from time to time by the Company through the Agents, acting as the Company’s sales agents, or directly to one or more of the Agents, acting as principal.

On July 16, 2021, we completed the ATM, generating $500.0 million in gross proceeds, before deducting $6.2 million in underwriting discounts and commissions, and other expenses payable by the Company, through the sale of 13,740,433 shares of common stock.

20

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(14)     Net Loss Per Share

The following table presents net loss per share and related information:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands, except for share and per share data)
Basic and diluted:
Net loss	$	(110,721)	$	(94,040)	$	(203,778)	$	(223,734)
Weighted average shares of common stock outstanding	258,589,270		240,733,497		258,439,051		238,774,515
Basic and diluted net loss per share	$	(0.43)	$	(0.39)	$	(0.79)	$	(0.94)

Basic and diluted loss per share is computed using the weighted-average number of common shares of common stock outstanding during the period. Basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive were as follows (in thousands):

	As of June 30,
	2022	2021
Issued and outstanding stock options	4,156	5,194
Issued and outstanding performance stock options	406	—
Unvested restricted stock units issued and outstanding	4,488	4,018
Unvested performance stock units issued and outstanding	367	85
Shares related to the 2027 Notes (1)	33,234	—
Warrants to purchase shares of common stock	—	8,000
	42,651	17,297

(1) The Company uses the if-converted method for calculating any potential dilutive effect of the conversion options embedded in the 2027 Notes on diluted net loss per share, if applicable.

21

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(15)    Stock-Based Compensation

The Company's 2019 Incentive Award Plan ("2019 Plan") is more fully described in Note 14 of the "Notes to Consolidated Financial Statements" on Form 10-K. Under the 2019 Plan, the Company has the ability to grant incentive stock options, non-qualified stock options and restricted stock units ("RSUs") to employees, directors and other service providers. Performance stock units ("PSUs") are RSUs that vest based on achievement of specified performance criteria. Performance stock options ("PSOs") are stock options that vest based on achievement of specified performance criteria.

Stock Options

Twenty five percent of such stock options cliff vest at the grant date first anniversary, with the remaining options vesting ratably over the following three years, subject to continued employment on each vesting date. Vested options will be exercisable at any time until ten years from the grant date, subject to earlier expiration under certain terminations of service and other conditions. The stock options granted have an exercise price equal to the closing stock price of our common stock on the grant date.

In 2022, we issued stock options as incentive compensation for certain key employees. The fair values of these stock options were estimated using a Black-Scholes model with the following assumptions:

	2022
Expected life (in years)(1)	6.11
Expected volatility(2)	69.0	%
Risk free interest rate(3)	2.19	%
Dividend yield(4)	—	%

(1) The expected life is the period of time that participants are expected to hold their options before exercised using the "simplified method" as described in Staff Accounting Bulletin No. 107.

(2) The expected volatility is a measure of the amount by which a stock price is expected to fluctuate based primarily on our and our peers' historical data.

(3) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(4) The Company does not currently pay dividends nor has announced plans to begin paying dividends.

22

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table sets forth the summary of options activity for the six month ended June 30, 2022 under the 2019 Plan (dollars in thousands except per share data):

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value(1)	Weighted Average Grant Date Fair Value ($)
Options outstanding at December 31, 2021	4,253,767	$	14.09	7.60	6,187	—
Granted	303,030	7.99				4.95
Exercised	(4,182)	11.79
Forfeited options	(396,160)	18.21
Options outstanding at June 30, 2022	4,156,455	$	13.26	7.06	—	—
Options exercisable at June 30, 2022	2,182,805	$	12.99	6.67	—	—

(1) Aggregate intrinsic value is calculated based on the difference between our closing stock price at period end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised all their options on the period end date.

Performance Stock Options

Compensation expense on the PSOs will be recognized over the period between the grant date and the estimated vest date. The number of PSOs that will vest depends on the attainment of certain stock price goals. Vested options will be exercisable at any time until ten years from the grant date, subject to earlier expiration under certain terminations of service and other conditions. The stock options granted have an exercise price equal to the closing stock price of our common stock on the grant date.

In 2022, we issued PSOs as incentive compensation for certain key employees. The fair values of these stock options were estimated using a Monte-Carlo simulation with the following assumptions:

	2022
Expected exercise behavior(1)	75.0	%
Expected Volatility(2)	58.0	%
Risk free interest rate(3)	2.19	%
Dividend yield(4)	—	%

(1) PSOs are expected to be exercised after 75% of the period between the vest date and the end of the contractual term has lapsed.

(2) The expected volatility is a measure of the amount by which a stock price is expected to fluctuate based primarily on our and our peers' historical data.

(3) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(4) The Company does not currently pay dividends nor has announced plans to begin paying dividends.

23

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table sets forth the summary of PSO activity under the 2019 Plan (dollars in thousands except per share data):

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value(1)	Weighted Average Grant Date Fair Value ($)
PSOs outstanding at December 31, 2021	—	$	—	0.00	—
Granted	405,680	8.99				4.93
Exercised	—	—
Forfeited options	—	—
PSOs outstanding at June 30, 2022	405,680	$	8.99	9.71	—
PSOs exercisable at s June 30, 2022	—	$	—	0.00	—

(1) Aggregate intrinsic value is calculated based on the difference between our closing stock price at period end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised all their options on the period end date.

Restricted Stock Units

The RSUs vest over four years with 25% cliff vest at the first year anniversary of the grant date, with the remaining vesting ratably over the next three years.

The following table sets forth the summary of RSUs activity during the six months ended June 30, 2022 under the 2019 Plan (dollars in thousands except per share data):

	Shares	Weighted Average Fair Value
Outstanding at December 31, 2021	2,396,732	$	27.89
Granted	3,215,868	8.75
Vested	(846,876)	21.36
Forfeited	(278,134)	18.59
Outstanding at June 30, 2022	4,487,590	$	21.91

Performance Stock Units

Between 25% and 200% of the PSUs are eligible to vest based on the achievement of certain performance-based goals or market-based goals by specified target dates, subject to continued service through the applicable vesting date. PSUs with performance-based goals are amortized over the requisite service period in which it is probable that the performance goal is achieved. PSUs with market-based goals will vest based on the Company's common stock performance following the end of the three year performance measurement period based on the highest closing price over twenty consecutive trading days during the performance measurement period. PSUs with market-based goals cannot vest before the end of the performance measurement period, thus the requisite service period is three years.

24

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

In 2022, we issued PSUs as incentive compensation for certain key employees. The fair values of these stock units were estimated using a Monte-Carlo simulation with the following assumptions:

	2022
Expected volatility(1)	95.0	%
Risk free interest rate(2)	2.13	%
Dividend yield(3)	—	%

(1) The expected volatility is a measure of the amount by which a stock price is expected to fluctuate based primarily on our and our peers' historical data.

(2) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(3) The Company does not currently pay dividends nor has announced plans to begin paying dividends.

The following table sets forth the summary of PSUs activity under the 2019 Plan (dollars in thousands except per share data):

	Shares	Weighted Average Fair Value
PSUs outstanding at December 31, 2021	89,839	$	26.47
Granted	277,552	14.62
Forfeited	—	—
PSUs outstanding at June 30, 2022	367,391	$	18.19

Stock-based compensation expense was recorded in the following expense categories in the condensed consolidated statements of operations and comprehensive loss:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Stock option and PSO expense
Selling, general and administrative	2,192		1,870		3,917		10,856
Research and development	731		825		1,416		1,668
Total stock option and PSO expense	2,923		2,695		5,333		12,524
RSU and PSU expense
Selling, general and administrative	6,458		8,556		12,025		17,609
Research and development	2,702		3,172		5,620		6,402
Total RSU and PSU expense	9,160		11,728		17,645		24,011
Total stock-based compensation expense	$	12,083	$	14,423	$	22,978	$	36,535

25

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

As of June 30, 2022, the unrecognized stock-based compensation related to stock options and PSOs was $20.3 million, and is expected to be recognized over a weighted-average period of 1.9 years. At June 30, 2022, the unrecognized stock-based compensation related to RSUs and PSUs was $93.8 million, and is expected to be recognized over a weighted-average period of 2.8 years.

(16)     Fair Value Measurements

We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. We estimate fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which is categorized in one of the following levels:

•Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the

reporting entity at the measurement date;

•Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability; and

•Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

The carrying amounts included in the Condensed Consolidated Balance Sheets under current assets and current liabilities approximate fair value because of the short maturity of these instruments.

The following tables summarize the fair value of assets that are recorded in the Company’s Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 at fair value on a recurring basis:

Fair Value Measurements as of June 30, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Money market	$	206,870	$	—	$	—	$	206,870
Certificate of deposit	91,397		—		—		91,397
US treasuries	209,251		—		—		209,251
Corporate debt securities	—		543,242		—		543,242
Total assets at fair value	$	507,518	$	543,242	$	—	$	1,050,760
Liabilities:
2027 Notes	$	—	$	—	$	271,201	$	271,201
Total liabilities at fair value	$	—	$	—	$	271,201	$	271,201

The estimated fair value of the 2027 Notes were determined based on the quoted bid prices of the 2027 Notes in an over-the-counter market on the last trading day of the reporting period.

26

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Fair Value Measurements as of December 31, 2021
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Money Market	$	402,889	$	—	$	—	$	402,889
Certificate of Deposit	91,549		—		—		91,549
Corporate debt securities	—		380,881		—		380,881
Total assets at fair value	$	494,438	$	380,881	$	—	$	875,319

(17)    Commitments and Contingencies

Legal Proceedings

From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. The Company applies accounting for contingencies to determine when and how much to accrue for and disclose related to legal and other contingencies. Accordingly, the Company discloses contingencies deemed to be reasonably possible and accrues loss contingencies when, in consultation with legal advisors, it is concluded that a loss is probable and reasonably estimable. Although the ultimate aggregate amount of monetary liability or financial impact with respect to these matters is subject to many uncertainties and is therefore not predictable with assurance, management believes that any monetary liability or financial impact to the Company from these matters, individually and in the aggregate, beyond that provided at June 30, 2022, would not be material to the Company’s financial position, results of operations or cash flows. However, there can be no assurance with respect to such result, and monetary liability or financial impact to the Company from legal proceedings, lawsuits and other claims could differ materially from those projected.

Lavin v. the Company

On May 28, 2021, a class action complaint was filed against us in the Eastern District of New York captioned Lavin v. Virgin Galactic Holdings, Inc., Case No. 1:21-cv-03070. In September 2021, the Court appointed Robert Scheele and Mark Kusnier as co-lead plaintiffs for the purported class. Co-lead plaintiffs amended the complaint in December 2021, asserting violations of Sections 10(b), 20(a) and 20A of the Exchange Act of 1934 against us and certain of our current and former officers and directors on behalf of a putative class of investors who purchased our common stock between July 10, 2019 and October 14, 2021. The amended complaint alleges, among other things, that we and certain of our current and former officers and directors made false and misleading statements and failed to disclose certain information regarding the safety of its ships and success of its commercial flight program. Co-lead plaintiffs seek damages, interest, costs, expenses, attorneys' fees, and other unspecified equitable relief. Defendants filed a motion to dismiss on April 4, 2022, and that motion is now fully briefed. The Company intends to vigorously defend against this matter.

Spiteri and Grenier, derivatively on behalf of the Company vs. Certain Current and Former Officers and Directors

On February 21, 2022 and March 1, 2022, two alleged shareholders filed separate derivative complaints purportedly on behalf of the Company against certain of our current and former officers and directors in the Eastern District of New York captioned Spiteri v. Branson et al., Case No. 1:22-cv-00933, and Grenier v. Branson et al., Case No. 1:22-cv-01100, respectively. The complaints assert violations of Sections 10(b), 14(a), and 21D of the Exchange Act of 1934 and claims of breach of fiduciary duty, aiding and abetting breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets, and unjust enrichment arising from substantially similar allegations as those contained in the securities class action described above. The complaints seek an unspecified sum of damages, interest, restitution, expenses, attorneys’ fees and other equitable relief. The cases are at a preliminary stage.

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VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Shareholder Litigation Demand

On April 4, 2022, the Company received a litigation demand from an alleged shareholder requesting that the Company take legal action against certain of our current and former officers and directors for breach of fiduciary duty and insider trading arising from substantially similar allegations as those contained in the securities class action described above. The Company is evaluating the litigation demand.

(18)    Employee Benefit Plan

The Company has defined contribution plans, under which the Company pays fixed contributions into a separate entity, and additional contributions to the plans are based upon a percentage of the employees’ elected contributions. The Company will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognized within selling, general, and administrative expenses and research and development in the Condensed Consolidated Statements of Operations and Comprehensive Loss, as incurred. Defined contributions were $1.1 million and $1.5 million for the three months ended June 30, 2022 and 2021, respectively. Defined contributions were $2.6 million and $2.6 million for the six months ended June 30, 2022 and 2021, respectively.

(19)    Supplemental Cash Flow Information

	Six Months Ended June 30,
	2022		2021
	(in thousands)
Supplemental disclosure
Cash payments and refunds for:
Income tax refund	$	10	$	—
Income tax paid	(53)		(58)
	$	(43)	$	(58)
Schedule for noncash investing activities:
Unpaid property, plant, and equipment received	$	1,343	$	270
	$	1,343	$	270
Schedule for noncash financing activities:
Issuance of common stock "cashless" warrants exercised	$	—	$	104,176
Issuance of common stock through restricted stock units vested	7,440		27,320
Unpaid deferred transaction costs	—		250
	$	7,440	$	131,746

28

VIRGIN GALACTIC HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(20)    Subsequent Events

As of July 30, 2022, we have one subsequent events as noted below.

Arizona Lease Agreement

On July 14, 2022, the Company entered into an agreement to lease 151,096 square feet of manufacturing and operations facilities in Mesa, Arizona consisting of two hangars ("Hangar C" and "Hangar B").

The lease has an initial term of approximately ten years and five months after the commencement date applicable to Hangar C or Hangar B, whichever is later, and is expected to commence ten months following the date of the agreement was entered into with respect to Hangar C and fifteen months following the date of the agreement was entered into for Hangar B. The average annual base rent under the lease is approximately $3.0 million. The Company has four options to extend the term of the lease, each for an additional five years.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context otherwise requires, all references in this section to the “Company,” "Virgin Galactic," “we,” “us,” or “our” refer to Virgin Galactic Holdings, Inc. and its subsidiaries.

You should read the following discussion and analysis of our financial condition and results of operations together with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as the audited financial statements and the related notes thereto, and the discussion under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” included in our Annual Report on Form 10-K. This discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks and uncertainties. As a result of many factors, such as those set forth under the “Risk Factors” section of our Annual Report on Form 10-K and under the "Cautionary Note Regarding Forward-Looking Statements" section and elsewhere in this Quarterly Report on Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements.

Overview

We are at the vanguard of a new industry, pioneering a consumer space experience using reusable spaceflight systems. We believe the commercial exploration of space represents one of the most exciting and important technological initiatives of our time. Approximately 630 humans have ever traveled above the Earth’s atmosphere into space. This industry is growing dramatically due to new products, new sources of private and government funding, and new technologies. Demand is emerging from new sectors and demographics, which we believe is broadening the total addressable market. As government space agencies have retired or reduced their capacity to send humans into space, private companies are beginning to make exciting inroads into the fields of human space exploration. We have embarked on this journey with a mission to put humans and research experiments into space and return them safely to Earth on a routine and consistent basis. We believe that opening access to space will connect the world to the wonder and awe created by space travel, offering customers a transformative experience, and providing the foundation for a myriad of exciting new industries.

We are an aerospace and space travel company offering access to space for private individuals, researchers and government agencies. Our missions include flying passengers to space as tourists, as well as flying scientific payloads and researchers to space in order to conduct experiments for scientific and educational purposes. Our operations include the design and development, manufacturing, ground and flight testing, and post-flight maintenance of our spaceflight system vehicles. Our spaceflight system is developed using our proprietary technology and processes and is focused on providing space experiences for private astronauts, researcher flights and professional astronaut training.

We intend to offer our customers a unique, multi-day experience culminating in a spaceflight that includes several minutes of weightlessness and views of Earth from space. Our elegant and distinctive spaceflight system – which takes off and lands on a runway – has been designed for optimal safety and comfort. As part of our commercial operations, we have exclusive access to the Gateway to Space facility at Spaceport America located in New Mexico. Spaceport America is the world’s first purpose-built commercial spaceport and will be the site of our initial commercial spaceflight operations. We believe the site provides us with a competitive advantage as it has a desert climate with relatively predictable weather conditions preferable to support our spaceflights and it also has airspace that is restricted for surrounding general air traffic which facilitates frequent and consistent flight scheduling.

Our near-term focus is to launch the commercial program for human spaceflight. In December 2018, we made history by flying our groundbreaking spaceship, VSS Unity, to space. This represented the first flight of a spaceflight system built for commercial service to take humans into space. In February 2019, we flew our second spaceflight with VSS Unity, which carried a crew member in the cabin in addition to the two pilots. After relocating our operations to Spaceport America, we have flown an additional two spaceflights in May and July of 2021. The May 2021 flight carried revenue-generating research experiments as part of NASA’s Flight Opportunities Program. This was the third time Virgin Galactic has flown technology experiments in the cabin on a spaceflight. This flight also completed the data submission to the FAA resulting in the approval for the expansion of our commercial space transportation operator license to allow for the carriage of space flight participants. This marked the first time the FAA licensed a spaceline to fly customers and was further validation of the inherent safety of our system.

Our flight in July 2021 was the 22nd flight of VSS Unity, the fourth rocket powered spaceflight and the first spaceflight with a full crew of four mission specialists in the cabin, including our Founder, Sir Richard Branson.

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We believe that the market for commercial human spaceflight is significant and untapped. As of June 30, 2022, we received reservations for approximately 800 spaceflight tickets and collected approximately $104.8 million in deposits from future astronauts. With each ticket purchased, future astronauts will experience a multi-day journey to prepare their mind and body for their upcoming flight, which includes a comprehensive spaceflight training preparation program and culminates with a trip to space on the final day. Each ticket purchased after our ticket sale reopening in 2021 also includes a membership in Virgin Galactic's Future Astronaut community. This membership provides access to events and experiences, including exclusive weeks 'at home' with Virgin Galactic Astronaut 001, Sir Richard Branson.

We have developed an extensive set of integrated aerospace development capabilities encompassing preliminary vehicle design and analysis, detail design, manufacturing, ground testing, flight testing, and maintenance of our spaceflight system. Our fully reusable spaceflight system consists of two primary components: our carrier aircraft, which is called the mothership, and our spaceship.

Our mothership is a twin-fuselage, custom-built aircraft designed to carry the spaceship up to an altitude of approximately 45,000 feet where it is released for its flight into space. Using the mothership’s air launch capability, rather than a standard ground-launch, reduces the energy requirements of our spaceflight system as the spaceship does not have to ascend through the higher density atmosphere closest to the Earth’s surface. It is also a fully reusable part of our spaceflight system. The spaceship is a vehicle with the capacity to carry pilots and private astronauts, research experiments, and researchers that travel with their experiments for human tended research flights into space and return them safely to Earth. It is powered by a hybrid rocket propulsion system, which propels the spaceship on a trajectory into space. The hybrid rocket motor utilizes liquid oxidizer and solid fuel and is designed to be a simple, safe, reliable propulsion system for the spaceship. The spaceship’s cabin has been designed to maximize the future astronaut’s safety, experience and comfort. A dozen windows line the sides and ceiling of the spaceship, offering customers the ability to view the blackness of space as well as stunning views of the Earth below.

Our team is currently in various stages of designing, testing and manufacturing additional spaceships, motherships, and rocket motors in order to meet the expected demand for human spaceflight experiences. Our next generation spaceships will include the various learnings from our flight test program so we are able to design and manufacture our future spaceships to allow for greater predictability, faster turnaround time and easier maintenance. Concurrently, we are also researching and developing new products and technologies to grow our company.

Our operations also include spaceflight opportunities for research and technology development. Researchers have historically utilized parabolic aircraft and drop towers to create moments of microgravity and conduct significant research activities related to the space environment. In most cases, these solutions offer only seconds of continuous microgravity time and do not offer access to the upper atmosphere or space itself. Researchers can also conduct experiments on sounding rockets or satellites. These opportunities are expensive, infrequent and may impose highly limiting operational constraints. Our spaceflight system is intended to provide the scientific research community access to space for affordable and repeatable access to microgravity. Our suborbital platform is an end-to-end offering, which includes not only our vehicles, but also the hardware such as middeck lockers that we provide to researchers that request them, along with the processes and facilities needed for a successful campaign. The platform offers a routine, reliable and responsive service allowing for experiments to be repeated rapidly and frequently and with the opportunity to be tended in-flight by one or more researchers. This capability will enable scientific experiments as well as educational and research programs to be carried out by a broader range of individuals, organizations and institutions than ever before. Our commitment to advancing research and science has been present in all of our spaceflights to date. Most recently, in May of 2021, we carried payloads into space for research purposes through NASA's Flight Opportunities Program, and our flight in July of 2021 included research payloads from the University of Florida.

We have also leveraged our knowledge and expertise in manufacturing spaceships to occasionally perform engineering services for third parties, such as research, design, development, manufacturing and integration of advanced technology systems.

Factors Affecting Our Performance

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in Part 1, Item 1A. of our Annual Report on Form 10-K titled “Risk Factors.”

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Impact of COVID-19

The COVID-19 pandemic and the protocols and procedures we implemented in response to the pandemic caused delays to our business and operations, which led to accumulated impacts to both schedule and cost efficiency and some delays in operational and maintenance activities, including delays in our test flight program. While we are no longer experiencing delays from these measures, the longevity and extent of the COVID-19 pandemic remain uncertain, including due to the emergence and impact of the COVID-19 variants. Measures we may need to take in the future and challenges that result from the pandemic could affect our operations necessary to complete the development of our spaceflight systems, our scheduled flight test programs and commencement of our commercial flights. See the section entitled Part II, Item 1A. "Risk Factors" for further discussion of the impacts of the COVID-19 pandemic on our business. We believe our cash and cash equivalents on hand at June 30, 2022, and management's operating plan, will provide sufficient liquidity to fund our operations for at least the next twelve months from the issuance of these financial statements included in this Quarterly Report on Form 10-Q.

Commercial Launch of Our Human Spaceflight Program

We are in the final phases of developing our commercial spaceflight program. Prior to launch of commercial service, we must complete a period of planned maintenance and enhancements to the vehicles, as well as subsequent vehicle flight testing. Commercial service is currently expected to commence in the second quarter of 2023. We continuously monitor our supply chain for potential risk associated with the delivery of materials from our suppliers, which in turn could impact the schedule for completion of the enhancement period and the start of commercial service. We have identified some areas of risk for timely delivery and continue to work on mitigating these identified risks. Any delays in successful completion of our test flight program, whether due to the supply chain, the impact of COVID-19 or otherwise, will impact our ability to generate revenue from human spaceflight.

Customer Demand

While not yet in commercial service for human spaceflight, we have already received significant interest from potential future astronauts. Going forward, we expect the size of our backlog and the number of future astronauts that have flown to space on our spaceflight system to be an important indicator of our future performance. As of June 30, 2022, we had reservations for space flights for approximately 800 future astronauts. In August 2021, following Sir Richard Branson's successful test flight, we reopened ticket sales to a select group and increased the pricing of our consumer offerings to a base price of $450,000 per seat. In February 2022, we opened ticket sales to the general public. We are reserving our first 100 ticket sales for research and scientific experiments. As of June 30, 2022, the tickets sold represent approximately $212.0 million in expected future revenue upon completion of space flights.

We are the first spaceline to receive FAA approval to carry commercial customers to space. This was through an update to our existing commercial spaceflight license which we have held since 2016.

Available Capacity and Annual Flight Rate

We expect to commence commercial operations with a single spaceship, VSS Unity, and a single mothership carrier aircraft, VMS Eve, which together comprise our only spaceflight system. As a result, our annual flight rate will be constrained by the availability and capacity of this spaceflight system. To reduce this constraint, we are currently developing our newest spaceship, VSS Imagine, which is expected to commence test flights in mid-2023, and private astronaut service as soon as the fourth quarter of 2023. However, given the variability inherent in-flight testing, it may be prudent for us to allow for appropriate schedule which could potentially extend Imagine's window for private astronaut service into early 2024. We intend to expand our fleet with our next generation vehicles, our Delta class spaceships and our next generation motherships, which will allow us to increase our annual flight rate. We believe that expanding the fleet will allow us to increase our annual flight rate once commercialization is achieved.

Safety Performance of Our Spaceflight Systems

Our spaceflight systems are highly specialized with sophisticated and complex technology. We have built operational processes to ensure that the design, manufacture, performance and servicing of our spaceflight systems meet rigorous quality standards. However, our spaceflight systems are still subject to operational and process risks, such as manufacturing and design issues, human errors, or cyber-attacks. Any actual or perceived safety issues may result in significant reputational harm to our business and our ability to generate human spaceflight revenue.

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Component of Results of Operations

Revenue

To date, we have primarily generated revenue by transporting scientific commercial research and development payloads using our spaceflight systems and by providing engineering services. We also have generated revenues from sponsorship arrangements and fees related to our Future Astronaut community.

Following the commercial launch of our human spaceflight services, we expect the significant majority of our revenue to be derived from ticket sales to fly to space and related services. We also expect that we will continue to receive a small portion of our revenue by providing services relating to the research, design, development, manufacture and integration of advanced technology systems.

Customer Experience

Customer experience expenses related to spaceflight operations include the consumption of a rocket motor and fuel and other consumables, as well as payroll and benefits for our pilots and ground crew. Customer experience expenses related to the payload cargo services, as well as engineering services, consist of materials and human capital, such as payroll and benefits, to perform these services. Additionally, customer experience expenses include costs associated with maintaining and growing our Future Astronaut community, as well as hospitality, medical, safety, security, training, and facility costs that are for the benefit of our astronauts.

Selling, General and Administrative

Selling, general and administrative expenses consist of human capital related expenses for employees involved in general corporate functions, including executive management and administration, accounting, finance, tax, legal, information technology, marketing and commercial, and human resources; rent relating to facilities, including a portion of the lease with Spaceport America, and equipment; professional fees; and other general corporate costs. Human capital expenses primarily include salaries, cash bonuses, stock-based compensation and benefits. As we continue to grow as a company, we expect that our selling, general and administrative costs will increase on an absolute dollar basis.

Research and Development

Research and development expense represents costs incurred to support activities that advance our human spaceflight system towards commercialization, including basic research, applied research, concept formulation studies, design, development, and related testing activities. Research and development costs consist primarily of the following costs for developing our spaceflight systems:

•flight testing programs, including rocket motors, fuel, and payroll and benefits for pilots and ground crew performing test flights;

•equipment, material, and labor hours (including from third party contractors) for developing the spaceflight system’s structure, spaceflight propulsion system, and flight profiles; and

•rent, maintenance, and other overhead expenses allocated to the research and development departments.

As of June 30, 2022, our current primary research and development objectives focus on the development of our mothership and spaceship vehicles for commercial spaceflights and developing our rocket motor, a hybrid rocket propulsion system that will be used to propel our spaceship vehicles into space. The successful development of mothership, spaceship and rocket motor involves many uncertainties, including:

•our ability to recruit and retain skilled engineering and manufacturing staff;

•timing in finalizing spaceflight systems design and specifications;

•successful completion of flight test programs, including flight safety tests;

•our ability to obtain additional applicable approvals, licenses or certifications from regulatory agencies, if required, and maintaining current approvals, licenses or certifications;

•performance of our manufacturing facilities despite risks that disrupt productions, such as natural disasters and hazardous materials;

33

•performance of a limited number of suppliers for certain raw materials and components;

•performance of our third-party contractors that support our manufacturing and research and development activities including the quality of components and subassemblies;

•our ability to maintain rights from third parties for intellectual properties critical to research and development activities;

•continued access to launch sites and airspace;

•our ability to continue funding and maintain our current research and development activities; and

•the impact of the ongoing global COVID-19 pandemic.

A change in the outcome of any of these variables could delay the development of our motherships, spaceships, or rocket motors, which in turn could impact when we are able to commence our human spaceflights.

As we are currently still in our final development and testing stage of our spaceflight system, we have expensed all research and development costs associated with developing and building our spaceflight system. We expect that our research and development expenses will decrease once technological feasibility is reached for our spaceflight systems as the costs incurred to manufacture additional spaceship vehicles, built by leveraging the invested research and development, will no longer qualify as research and development activities.

Depreciation and Amortization

Depreciation of property, plant, and equipment, net is calculated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter period of the estimated life or the lease term. Once we have completed our test flight program and commenced commercial operations, we will capitalize the cost to construct any unfinished and additional spaceships and motherships. As these additional spaceships and motherships are placed into service, the related depreciation will be included in the Depreciation and Amortization line item on the condensed consolidated statements of operations and comprehensive loss. We have not capitalized any spaceship development costs to date.

Change in Fair Value of Warrants

Change in fair value of warrants reflects the non-cash change in the fair value of warrants. Certain warrants issued as part of the Company's initial public offering in 2017 and assumed upon the consummation of the Virgin Galactic business combination in October 2019 (the "Business Combination") were recorded at their fair value on the date of the Business Combination and are remeasured as of any warrant exercise date and at the end of each reporting period. No warrants were outstanding during the three and six month period ended June 30, 2022.

Interest Income

Interest income primarily includes interest earned on our cash and cash equivalents and marketable securities.

Interest Expense

Interest expense consists of amortization of debt issuance costs and contractual interest expense for our 2027 Notes, as well as interest expense related to our finance lease obligations.

Other Income

Other income consists of miscellaneous non-operating items, such as gains on marketable securities and handling fees related to customer refunds.

Income Tax Provision

We are subject to income taxes in the United States and the United Kingdom. Our income tax provision consists of an estimate of federal, state, and foreign income taxes based on enacted federal, state, and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.

34

Results of Consolidated Operations

The following tables set forth our results of operations for the periods presented and expresses the relationship of certain line items as a percentage of revenue for those periods. The period-to-period comparisons of financial results is not necessarily indicative of future results.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Revenue	$	357	$	571	$	676	$	571
Operating expenses:
Customer experience	122		63		147		63
Selling, general and administrative	44,700		36,916		81,707		80,235
Research and development	62,340		34,619		114,167		69,708
Depreciation and amortization	2,915		2,871		5,767		5,740
Total operating expenses	110,077		74,469		201,788		155,746
Operating loss	(109,720)		(73,898)		(201,112)		(155,175)
Interest income	1,985		220		2,803		545
Interest expense	(3,157)		(6)		(5,631)		(13)
Change in fair value of warrants	—		(20,363)		—		(69,082)
Other income, net	194		13		210		40
Loss before income taxes	(110,698)		(94,034)		(203,730)		(223,685)
Income tax expense	(23)		(6)		(48)		(49)
Net loss	$	(110,721)	$	(94,040)	$	(203,778)	$	(223,734)

For the Three and Six Months Ended June 30, 2022 Compared to the Three and Six Months Ended June 30, 2021

Revenue

	Three Months Ended June 30,				$ Change		% Change		Six Months Ended June 30,				$ Change		% Change
	2022		2021						2022		2021
	(In thousands, except %)
Revenue	$	357	$	571	$	(214)	(37)	%	$	676	$	571	$	105	18	%

We recorded $0.4 million of revenue for the three months ended June 30, 2022, compared to $0.6 million for the three months ended June 30, 2021. Revenue recorded for the three months ended June 30, 2022 was primarily attributable to membership fees related to our Future Astronaut community. Revenue recorded for the three months ended June 30, 2021 was attributable to the spaceflight of two payloads in May 2021 and revenue earned from the completion of certain technical milestones related to payload services.

We recorded $0.7 million of revenue for the six months ended June 30, 2022, compared to $0.6 million revenue for the six months ended June 30, 2021. Revenue recorded for the six months ended June 30, 2022 was primarily attributable to membership fees related to our Future Astronaut community as well as the performance of engineering services. Revenue recorded for the six months ended June 30, 2021 was attributable to the spaceflight of two payloads in May 2021 and revenue earned from the completion of certain technical milestones related to payload services.

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Customer Experience

	Three Months Ended June 30,				$ Change		% Change		Six Months Ended June 30,				$ Change		% Change
	2022		2021						2022		2021
	(In thousands, except %)
Customer experience	$	122	$	63	$	59	94	%	$	147	$	63	$	84	133	%

We recorded $0.1 million of customer experience expenses for the three months ended June 30, 2022 and 2021. Customer experience expenses for the three months ended June 30, 2022 was primarily attributable to costs to maintain our Future Astronaut community. Customer experience expenses for the three months ended June 30, 2021 was primarily attributable to incremental costs related to the completion of payload services and labor costs provided for engineering services under long-term U.S. government contracts.

We recorded $0.1 million of customer experience expenses for the six months ended June 30, 2022 and 2021. Customer experience expenses for the six months ended June 30, 2022 was primarily attributable to costs to maintain our Future Astronaut community and labor costs provided for engineering services. Customer experience expenses for the six months ended June 30, 2021 was primarily attributable to incremental costs related to the completion of payload services and labor costs provided for engineering services under long-term U.S. government contracts.

Selling, General and Administrative

	Three Months Ended June 30,				$ Change		% Change		Six Months Ended June 30,				$ Change		% Change
	2022		2021						2022		2021
	(In thousands, except %)
Selling, general and administrative	$	44,700	$	36,916	$	7,784	21	%	$	81,707	$	80,235	$	1,472	2	%

Selling, general and administrative expenses increased by $7.8 million, or 21%, to $44.7 million for the three months ended June 30, 2022 from $36.9 million for the three months ended June 30, 2021. This increase was primarily due to a $6.0 million increase in salary, bonus, and other employee benefits. In addition, there was a $1.6 million increase in consulting and legal fees, and a $1.1 million increase in software licensing and IT expenses. These increases were offset by a $1.7 million decrease in stock-based compensation.

Selling, general and administrative expenses increased by $1.5 million, or 2%, to $81.7 million for the six months ended June 30, 2022 from $80.2 million for the six months ended June 30, 2021. This increase was primarily due to a $7.4 million increase in salary, bonus, and other employee benefits. In addition there was a $4.6 million increase in consulting and legal fees, and a $1.8 million increase in software licensing and IT expenses. These increases were offset by a $12.5 million decrease in stock-based compensation.

Research and Development

	Three Months Ended June 30,				$ Change		% Change		Six Months Ended June 30,				$ Change		% Change
	2022		2021						2022		2021
	(In thousands, except %)
Research and development	$	62,340	$	34,619	$	27,721	80	%	$	114,167	$	69,708	$	44,459	64	%

Research and development expenses increased by $27.7 million, or 80%, to $62.3 million for the three months ended June 30, 2022 from $34.6 million for the three months ended June 30, 2021. The increase was primarily due to costs associated with developing our spaceflight system, specifically a $21.2 million increase in contract labor and materials and a $1.3 million increase in facilities costs. In addition, there was a $4.8 million increase in salaries, bonus, and other employee benefits.

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Research and development expenses increased by $44.5 million, or 64%, to $114.2 million for the six months ended June 30, 2022 from $69.7 million for the six months ended June 30, 2021. The increase was primarily due to costs associated with developing our spaceflight system, specifically a $36.6 million increase in contract labor and materials and a $2.5 million increase in facilities costs. In addition, there was a $4.1 million increase in salaries, bonus and other employee benefits.

Depreciation and Amortization

	Three Months Ended June 30,		$ Change		% Change		Six Months Ended June 30,		$ Change		% Change
	2022	2021					2022	2021
	($ in thousands)						(In thousands, except %)
Depreciation and amortization	2,915	2,871	$	44	2	%	5,767	5,740	$	27	—	%

Depreciation and amortization expense was $2.9 million for the three months ended June 30, 2022, an increase of less than $0.1 million when compared to 2021.

Depreciation and amortization expense was $5.8 million for the six months ended June 30, 2022, an increase of less than $0.1 million when compared to 2021.

Change in the Fair Value of Warrants

	Three Months Ended June 30,				$ Change		% Change		Six Months Ended June 30,				$ Change		% Change
	2022		2021						2022		2021
	($ in thousands)								(In thousands, except %)
Change in fair value of warrants	$	—	$	(20,363)	$	20,363	(100)	%	$	—	$	(69,082)	$	69,082	(100)	%

Change in fair value of warrants reflects the non-cash change in the fair value of warrants. No warrants were outstanding during the three and six month period ended June 30, 2022.

Interest Income

	Three Months Ended June 30,				$ Change		% Change		Six Months Ended June 30,				$ Change		% Change
	2022		2021						2022		2021
	(In thousands, except %)
Interest income	$	1,985	$	220	$	1,765	802	%	$	2,803	$	545	$	2,258	414	%

Interest income increased by $1.8 million, or 802%, to $2.0 million for the three months ended June 30, 2022 from $0.2 million for the three months ended June 30, 2021.

Interest income increased by $2.3 million, or 414%, to $2.8 million for the six months ended June 30, 2022 from $0.5 million for the six months ended June 30, 2021.

These increases are primarily due to interest earned on marketable securities.

37

Interest Expense

	Three Months Ended June 30,				$ Change		% Change		Six Months Ended June 30,				$ Change		% Change
	2022		2021						2022		2021
	(In thousands, except %)
Interest expense	$	3,157	$	6	$	3,151	52,517	%	$	5,631	$	13	$	5,618	43,215	%

Interest expense increased by $3.2 million, or 52,517%, to $3.2 million for the three months ended June 30, 2022 from less than $0.1 million for the three months ended June 30, 2021.

Interest expense increased by $5.6 million, or 43,215%, to $5.6 million for the six months ended June 30, 2022 from less than $0.1 million for the six months ended June 30, 2021.

The increase was attributable to interest expense and amortization of debt issuance costs related to our senior convertible notes in January 2022.

Other Income, net

	Three Months Ended June 30,				$ Change		% Change		Six Months Ended June 30,				$ Change		% Change
	2022		2021						2022		2021
	($ in thousands)								(In thousands, except %)
Other income, net	$	194	$	13	$	181	1,392	%	$	210	$	40	$	170	425	%

Other income, net was $0.2 million for the three and six months ended June 30, 2022, an increase of less than $1.0 million when compared to 2021.

Income Tax Expense

	Three Months Ended June 30,				$ Change		% Change		Six Months Ended June 30,				$ Change		% Change
	2022		2021						2022		2021
	($ in thousands)								(In thousands, except %)
Income tax expense	$	23	$	6	$	17	283	%	$	48	$	49	$	(1)	(2)	%

Income tax expense was immaterial for the three and six months ended June 30, 2022 and 2021. We have accumulated net operating losses at the federal and state level as we have not yet started commercial operations. We maintain a substantially full valuation allowance against our net U.S. federal and state deferred tax assets. The income tax expenses shown above are primarily related to minimum state filing fees in the states where we have operations as well as corporate income taxes for our operations in the United Kingdom, which operates on a cost-plus arrangement.

Liquidity and Capital Resources

As of June 30, 2022, we had cash, cash equivalents and restricted cash of $370.1 million and $752.5 million in marketable securities. Since the consummation of our business combination transaction in 2019, our principal sources of liquidity have come from our sales of our common stock and offering of convertible senior notes ("2027 Notes").

In January 2022, we completed an offering of the 2027 Notes due on February 1, 2027, unless earlier repurchased, redeemed or converted, and received aggregate proceeds of $425 million, before deducting costs of issuance of $11.2 million. The 2027 Notes are senior, unsecured obligations of the Company, and bear interest at a fixed rate of 2.50% per year. Interest is payable in cash semi-annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2022. The 2027 Notes mature on February 1, 2027 unless earlier repurchased, redeemed or converted. In connection with the 2027 Notes, we entered into capped call transactions with respect to our common stock (the "2027 Capped Calls"). We paid an aggregate amount of $52.3 million for the 2027 Capped Calls. See Note 11 in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information on the 2027 Capped Calls.

38

Historical Cash Flows

	Six Months Ended June 30,
	2022		2021
	(In thousands)
Net cash (used in) provided by
Operating activities	$	(152,960)	$	(113,472)
Investing activities	(385,547)		(1,647)
Financing activities	358,541		819
Net change in cash and cash equivalents and restricted cash	$	(179,966)	$	(114,300)

Operating Activities

Net cash used in operating activities was $153.0 million for the six months ended June 30, 2022, which primarily consisted of $203.8 million of net losses, adjusted for non-cash items, which primarily included depreciation and amortization expense of $5.8 million, stock based compensation expense of $23.0 million, amortization of debt issuance costs of $0.8 million, as well as $21.0 million of cash consumed by working capital.

Net cash used in operating activities was $113.5 million for the six months ended June 30, 2021, which primarily consisted of $223.7 million of net losses, adjusted for non-cash items, which primarily included depreciation and amortization expense of $5.7 million, stock based compensation expense of $36.5 million, and change in fair value of warrants of $69.1 million, as well as a $1.1 million increase in cash consumed by working capital.

Investing Activities

Net cash used in investing activities was $385.5 million for the six months ended June 30, 2022, which primarily consisted of $379.3 million purchases of marketable securities, as well as $6.3 million in capital expenditures.

Net cash used in investing activities was $1.6 million for the six months ended June 30, 2021, which primarily consisted of capital expenditures.

Financing Activities

Net cash provided by financing activities was $358.5 million for the six months ended June 30, 2022, which primarily consisted of the issuance of the 2027 Notes for net proceeds of $413.7 million, offset by the purchase of the 2027 Capped Calls of $52.3 million and tax withholdings for net settled stock-based awards of $2.8 million.

Net cash provided by financing activities was $0.8 million for the six months ended June 30, 2021, which primarily consisted of net cash proceeds from issuance of common stock, offset by tax withholdings for stock options exercised.

Funding Requirements

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue to advance the development of our spaceflight system and the commercialization of our human spaceflight operations. In addition, we expect customer experience expenses to increase significantly as we commence commercial operations and add additional spaceships to our operating fleet.

Specifically, our operating expenses will increase as we:

•scale up our manufacturing processes and capabilities to support expanding our fleet with additional spaceships, carrier aircraft and rocket motors upon commercialization;

•pursue further research and development on our future human spaceflights, including those related to our research and education efforts on point-to-point travel;

39

•hire additional personnel in research and development, manufacturing operations, testing programs, maintenance operations and guest services as we increase the volume of our spaceflights upon commercialization;

•seek regulatory approval for any changes, upgrades or improvements to our spaceflight technologies and operations in the future, especially upon commercialization;

•maintain, expand and protect our intellectual property portfolio;

•establish our astronaut campus in New Mexico; and

•hire additional personnel in management to support the expansion of our operational, financial, information technology, and other areas to support our operations as a public company.

In some cases, we expect our arrangements with third-party providers, including under our Master Agreement with Aurora Flight Sciences Corporation (“Aurora), a wholly owned subsidiary of The Boeing Company, for the design and manufacture of our next generation of carrier aircraft, will require significant capital expenditures from us, but such amounts are subject to future negotiations and cannot be estimated with reasonable certainty. Although we believe that our current capital is adequate to sustain our operations for at least the next twelve months, changing circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control. Additionally, we are in the final phases of developing our commercial spaceflight program. While we anticipate initial commercial launch with a single spaceship, we currently have additional spaceship vehicles under construction. We anticipate the costs to manufacture additional vehicles will begin to decrease as we continue to scale up our manufacturing processes and capabilities. Until we achieve technological feasibility with our spaceflight systems, we will not capitalize expenditures incurred to construct any additional components of our spaceflight systems and we will continue to expense these costs as incurred to research and development.

Short-term Liquidity and Capital Resources

For at least the next twelve months, we expect our principal demand for funds will be for our ongoing activities described above. We expect to meet our short-term liquidity requirements primarily through our cash, cash equivalents and marketable securities on hand. We believe we will have sufficient liquidity available to fund our business needs, commitments and contractual obligations in a timely manner for the next twelve months.

Long-term Liquidity and Capital Resources

Beyond the next twelve months, our principal demand for funds will be to sustain our operations, including the construction of additional motherships under an agreement with a third-party contractor, and spaceship vehicles, construction of our astronaut campus, expansion of the New Mexico Spaceport, and for the payment of the principal amount of our convertible senior notes as it becomes due. We expect to begin generating revenue from our human spaceflight program, which is expected to launch in the second quarter of 2023. To the extent this source of capital as well as the sources of capital described above are insufficient to meet our needs, we may also conduct additional offerings of our securities or refinance debt. We expect these resources will be adequate to fund our ongoing operating activities.

The commercial launch of our human spaceflight program and the anticipated expansion of our fleet have unpredictable costs and are subject to significant risks, uncertainties and contingencies, many of which are beyond our control, that may affect the timing and magnitude of these anticipated expenditures. Some of these risk and uncertainties are described in more detail in our Annual Report on Form 10-K under the heading Item 1A. “Risk Factors—Risks Related to Our Business.”

Contractual Obligations and Commitments

Except as set forth in Note 17, Commitments and Contingencies, of the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there have been no material changes outside the ordinary course of business to our contractual obligations and commitments as described in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K. Additionally, in some cases, we have entered arrangements with third-party providers for services, such as the design and manufacture of our next generation of carrier aircraft. The amounts we would pay under those arrangements will be significant but are not contractually committed until we execute specific task orders with the applicable counterparty, are subject to future negotiations and cannot be estimated with reasonable certainty.

40

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. We believe that the estimates, assumptions and judgments involved in the accounting policies described below have the greatest potential impact on our financial statements and, therefore, we consider these to be our critical accounting policies. Accordingly, we evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions. Please refer to Note 2 in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for information about these critical accounting policies, as well as a description of our other significant accounting policies.

Recent Accounting Pronouncements

Please refer to Note 3 in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a description of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We have operations within the United States and the United Kingdom and as such we are exposed to market risks in the ordinary course of our business, including the effects of interest rate changes and fluctuations in foreign currency exchange rates. We are also exposed to market risk from changes in our stock prices, which impact the fair value of our 2027 Notes. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.

Interest Rate Risk

We had cash, cash equivalents and marketable securities totaling $1.1 billion as of June 30, 2022, of which $0.9 billion was invested in money market funds, certificate deposits, and corporate debt securities. Our cash and cash equivalents are held for working capital purposes. Our marketable securities are held for capital preservation purposes. We do not enter into investments for trading or speculative purposes.

Our cash equivalents and our investment portfolio are subject to market risk due to changes in interest rates. Fixed rate securities may have their market value adversely affected due to a rise in interest rates. Due in part to these factors, our future investment income may fall short of our expectations due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in interest rates. However, because we classify our marketable securities as “available for sale,” no gains are recognized due to changes in interest rates. As losses due to changes in interest rates are generally not considered to be credit related changes, no losses in such securities are recognized due to changes in interest rates unless we intend to sell, it is more likely than not that we will be required to sell, we sell prior to maturity or we otherwise determine that all or a portion of the decline in fair value are due to credit related factors.

In January 2022, we issued the 2027 Notes in an aggregate principal amount of $425.0 million. Concurrently with the issuance of the 2027 Notes, we entered into separate capped call transactions. The 2027 Capped Calls were completed to reduce the potential dilution from the conversion of the 2027 Notes. The 2027 Notes have a fixed annual interest rate of 2.50%. Accordingly, we do not have economic interest rate exposure on the 2027 Notes. However, changes in market interest rates impact the fair value of the 2027 Notes. In addition, the fair value of the 2027 Notes fluctuates when the market price of our common stock fluctuates. The fair value was determined based on the quoted bid price of the 2027 Notes in an over-the-counter market on the last trading day of the reporting period.

As of June 30, 2022, a hypothetical 100 basis point change in interest rates would not have had a material impact on the value of our cash equivalents or investment portfolio. Fluctuations in the value of our cash equivalents and investment portfolio caused by a change in interest rates (gains or losses on the carrying value) are recorded in other comprehensive income (loss), and are realized only if we sell the underlying securities prior to maturity.

Foreign Currency Risk

The functional currency of our operations in the United Kingdom is the local currency. We translate the financial statements of the operations in the United Kingdom to United States Dollars and as such we are exposed to foreign currency

41

risk. Currently, we do not use foreign currency forward contracts to manage exchange rate risk, as the amount subject to foreign currency risk is not material to our overall operations and results.

Item 4. Controls and Procedures

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2022, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

42

PART II - OTHER INFORMATION

Item 1.    Legal Proceedings

We are from time to time subject to various claims, lawsuits and other legal and administrative proceedings arising in the ordinary course of business. Some of these claims, lawsuits and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, non-monetary sanctions or relief. However, we do not consider any such claims, lawsuits or proceedings that are currently pending, individually or in the aggregate, to be material to our business or likely to result in a material adverse effect on our future operating results, financial condition or cash flows. See Note 17 in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

Item 1A. Risk Factors

Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described as risk factors, any one or more of which could, directly or indirectly, cause our actual operating results and financial condition to vary materially from past, or anticipated future, operating results and financial condition. For a discussion of our potential risks and uncertainties, see the risk factors previously disclosed in Part I, Item 1. “Business,” Part I, Item 1A. “Risk Factors,” and Part I, Item 2. “Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K and in Part I, Item 2. “Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q. There have been no material changes to the risk factors disclosed our Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

The following documents are filed as part of this report:

(1) Exhibits. The following exhibits are filed, furnished or incorporated by reference as part of this Quarterly Report on Form 10-Q.

		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/Furnished Herewith
2.1(1)	Agreement and Plan of Merger, dated July 9, 2019, by and among the Registrant, Vieco 10 Limited, Foundation Sub 1, Inc., Foundation Sub 2, Inc., Foundation Sub LLC, TSC Vehicle Holdings, Inc., Virgin Galactic Vehicle Holdings, Inc. and Virgin Galactic Holdings, LLC	8-K/A	001-38202	2.1	07/11/2019
2.1(a)(1)	Amendment No. 1 to Agreement and Plan of Merger, dated October 2, 2019, by and among the Registrant, Vieco 10 Limited, Foundation Sub 1, Inc., Foundation Sub 2, Inc., Foundation Sub LLC, TSC Vehicle Holdings, Inc., Virgin Galactic Vehicle Holdings, Inc., Virgin Galactic Holdings, LLC and Vieco USA, Inc.	S-4	333-233098	2.1(a)	10/03/2019
3.1	Certificate of Incorporation of the Registrant	8-K	001-38202	3.1	10/29/2019
3.2	By-Laws of the Registrant	8-K	001-38202	3.2	10/29/2019
10.1(2)(3)	Master Agreement, dated July 5, 2022, by and between the Registrant and Aurora Flight Sciences Corporation					*
31.1	Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					*
31.2	Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					*
32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					**
32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					**
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document					*
101.SCH	Inline XBRL Taxonomy Extension Schema Document					*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document					*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document					*
101.LAB	Inline XBRL Taxonomy Extension Labels Linkbase Document					*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document					*
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)					*

* Filed herewith.

** Furnished herewith.

44

(1) Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

(2) Portions of this exhibit (indicated by asterisks) have been omitted pursuant to Regulation S-K, Item 601(b)(10). Such omitted information is not material and the registrant customarily and actually treats such information as private or confidential. Additionally, schedules and attachments to this exhibit have been omitted pursuant to Regulation S-K, Items 601(a)(5).

(3) Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

45

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Virgin Galactic Holdings, Inc.
Date: August 4, 2022		/s/ Michael Colglazier
	Name:	Michael Colglazier
	Title:	Chief Executive Officer (Principal Executive Officer)
Date: August 4, 2022		/s/ Douglas Ahrens
	Name:	Douglas Ahrens
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

46

EX-10.1

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

Exhibit 10.1

MASTER AGREEMENT

This MASTER AGREEMENT (hereinafter referred to as “Master Agreement”) is made as of July 4, 2022 (“Effective Date”), between Aurora Flight Sciences Corporation (hereinafter “AFS”), a Delaware corporation and wholly owned subsidiary of The Boeing Company, having a place of business at 9950 Wakeman Drive, Manassas, VA 20110, and Virgin Galactic, LLC, a direct wholly-owned subsidiary of Virgin Galactic Holdings, Inc. (hereinafter “VG”), a Delaware limited liability company, having a place of business at 16555 Spaceship Landing Way, Mojave, CA, 93501. VG and AFS are collectively referred to as “Parties” and individually as the “Party”.

WHEREAS, VG is the designer and the manufacturer of mothership carrier/launch aircraft and space tourism vehicles;

WHEREAS, AFS is recognized as a leader in engineering services and manufacturing relating to aerospace systems;

WHEREAS, each Party possesses unique and complementary technical capabilities and know-how relating to aerospace hardware and controlsand wish to work together for the design and manufacture of VG’s “Mothership” carrier/launch aircraft (the “Program”);

WHEREAS, VG desires to license certain background intellectual property to AFS in connection with the Program, to exercise design authority over the Program, and to obtain the airworthiness certificate for each aircraft manufactured under the Program; and

WHEREAS, the Parties wish to enter into an agreement covering the terms and conditions under which VG will purchase, and AFS will sell, the goods and services in support of the Program.

IN CONSIDERATION OF the promises, mutual covenants, and agreements herein contained, the Parties hereby agree as follows:

1.DEFINITIONS

1.When used in this Agreement and any Task Order issued under it, terms shall have the meaning defined in Exhibit A (Definitions). Additional definitions may be provided in other Articles (such as, but not limited to, Article 4 (Payments), Article 5 (Incentives), Article 14 (Insurance), and Article 17 (Excusable Delay)). Additional definitions may also be provided in Task Orders, but such definitions provided in Task Orders shall only apply to that specific Task Order.

2.STRUCTURE OF AGREEMENT

1.AFS will perform the work set forth in multiple task orders (each a “Task Order”) to be mutually agreed by the Parties and issued subject to the terms of this Master Agreement and executed by the Parties. Each Task Order will become effective only upon written execution by both Parties. The Task Orders will each contain a Statement of Work setting forth the schedule and Deliverables for such Task Order and additional exhibits or attachments as applicable to the scope of such Task Order. The Task Orders will each also contain the criterion or criteria for Acceptance of Deliverables. The form of Task Order to be used by the Parties is set forth in Exhibit J (Task Order Form).

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

2.This Master Agreement contains the following exhibits, each of which is hereby incorporated by reference into the Master Agreement:

i.Exhibit A – Definitions: This Exhibit contains a list of the defined terms used in the Agreement.

ii.Exhibit B – Program Overview: This Exhibit contains an overview of the objectives and nominal schedule of the Program as of the Effective Date. The Parties acknowledge and agree that the Program Overview may be updated from time to time in accordance with Article 23 (Changes), but that in between such updates, aspects of the Program may be changed in accordance with the procedures set forth in Exhibit C (Governance), such that Exhibit B (Program Overview) may at times become out of date.

iii.Exhibit C – Governance: This Exhibit contains the plan for managing the Program as between the Parties, including roles, responsibilities, decision-making processes, and periodic reviews. This Exhibit also describes the process by which VG will exercise its Design Authority responsibilities (including but not limited to giving its approval (“Approval” or, where used a verb, “Approves”) of work subject to Design Authority) and the process by which VG will indicate in writing its acceptance (“Acceptance” or, where used a verb, “Accepts”) of Deliverables and of the Aircraft. Without limiting any other obligations of either Party under the Agreement, the Parties acknowledge and agree that the Program will be managed in accordance with Exhibit C (Governance).

iv.Exhibit C-1 – Governing Documents: This exhibit contains a list, brief description, associated lifecycle review (target draft and release), Deliverable status of the Governing Documents (both anticipated and Approved) that AFS creates and VG Approves as the Design Authority. These documents will be used to perform and govern the work as defined within Task Orders.

v.Exhibit D – Responsibility Matrix: This Exhibit contains a description of the respective financial and programmatic responsibilities of the Parties relating to their performance obligations under the Agreement, including without limitation a description of any Buyer-Furnished Equipment to be provided by VG.

vi.Exhibit E – Background IP Schedule: This Exhibit contains a list of Background Intellectual Property licensed to VG by AFS and its Affiliates, Subcontractors, and Suppliers in accordance with Article 7 (Intellectual Property Rights).

vii.Exhibit F –Property Management System Plan: This Exhibit identifies the policies and procedures that AFS will use to manage any equipment, non-consumable material, and/or tooling provided by VG for AFS’s use under the Agreement, or as a component to be incorporated into an Aircraft.

viii.Exhibit G – Inventory of Buyer-Furnished Equipment, Non-Consumable Material and Tooling: This Exhibit contains an inventory of any equipment, non-consumable material, and/or tooling provided by VG for AFS’s use under the Agreement, or as a component to be incorporated into an Aircraft.

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

ix.Exhibit H – Subcontract Management Plan: This Exhibit identifies the policies and procedures that AFS will use to manage the effort of any Subcontractor performing work in connection with the Agreement.

x.Exhibit I – List of Subcontractors: This Exhibit contains a list of Subcontractors for which AFS has provided notification and to which VG has approved pursuant to Article 12 (Suppliers and Subcontractors) of this Master Agreement.

xi.Exhibit J – Task Order Form: This Exhibit contains an example of an acceptable format to be used for each Task Order, including the relevant exhibits and attachments that should be included in each Task Order.

3.TERM

a.This Agreement will commence on the Effective Date, and unless earlier terminated in accordance with this Master Agreement or applicable law, will continue in effect until the later of (i) five (5) years or (ii) the completion of all work under any Task Order(s) entered into under this Master Agreement.

b.VG and AFS may terminate part or all of the Master Agreement or any Task Order by mutual agreement executed by both Parties.

4.PAYMENT

1.For Time and Material Task Orders Only:

i.AFS shall submit invoices monthly in arrears no later than the 15th of each month. Payment terms shall be net [***] to be measured from the date that AFS submits an invoice.

ii.AFS will invoice and be paid for actual hours charged at labor rates established in the Task Order. These labor rates will be established for the purpose of administering the Task Order and do not signify acceptance by either Party for any other purpose.

iii.AFS will invoice and be paid for actual non-labor costs, including, but not limited to Subcontractors, material, purchased services, rentals, and travel-related expenses, with a mark-up established in the Task Order. This mark-up will be established for the purpose of administering the Task Order and does not signify acceptance by either Party for any other purpose.

iv.Invoices will provide the level of visibility for VG to manage the Task Order. Labor hours will be provided by labor category at the Work Breakdown Structure level appropriate for the size and complexity of the Task Order such that VG may monitor actual hours expended relative to plan. Labor hours will not be made available by individual or at a level of detail where the hours of a specific individual are discernible. Material charges will be broken down into the following items: Subcontractors, material, purchased services, rentals, and travel. Upon request by VG, AFS will provide further detail so VG may monitor actual Charges relative to plan.

2.For Fixed Price Task Orders Only:

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

v.AFS shall submit invoices upon completion of milestones set forth in the Payment Milestone Schedules of Task Orders. These “Payment Milestone Schedules” will identify the planned completion date, amount, completion criteria which may be based upon Acceptance of Deliverables or other objective basis of work accomplished, and the amount to be paid. Payment terms shall be net [***] to be measured from the date AFS submits an invoice.

vi.The Parties will establish Payment Milestone Schedules for Task Orders that will enable AFS to invoice and be paid for work as it progresses during Task Order performance.

3.For All Task Orders

vii.Invoices will be sent electronically to: [***].

viii.VG will make payment to AFS within forty-five (45) calendar days from the date AFS submits an invoice. All payments shall be in United States Dollars, electronic, and routed to:

[***]

ix.Invoices and payments will make reference to or otherwise contain the purchase order or other contract reference number agreed to between the Parties to identify this Master Agreement and the Task Order.

x.VG will not be permitted to inspect, audit, examine, or otherwise have access to AFS’s financial records.

xi.In the event any invoiced amounts are not paid within [***] calendar days of submittal, AFS may, at its sole discretion, suspend performance under this Agreement until the past due amounts are made current under the terms of this Agreement.

xii.Unless otherwise stated in a Task Order, all payments, prices, fixed or otherwise, sums are exclusive of any and all sales and use taxes, value added taxes, goods and services taxes, taxes levied upon importation, such as customs duties, excises, or any other taxes (“Taxes”) levied in regard of any of the transactions covered by this Agreement.

xiii.The prices listed in Task Orders are in United States (U.S.) Dollars. Prices shall not be subject to economic price adjustment unless specifically permitted in a Task Order.

xiv.When invoicing, AFS shall, to the extent practical: (i) include amounts of Taxes or specific fees AFS is required by applicable law to add-on to the sales price and collect from VG or otherwise is legally due from VG and (ii) separately state each of the Taxes.

xv.AFS is solely responsible for invoicing and remitting Taxes as required by applicable law to collect from VG under the Agreement to the proper tax authority. Any penalties, fees, or interest charges imposed by a tax authority or other authority as the result of non-payment of Taxes collected by AFS from VG will be AFS’s responsibility. VG is responsible for informing and

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

providing supporting information of applicable exemptions. VG is not responsible for any Taxes based on AFS’s income, payroll, or gross receipts.

5.INCENTIVES

1.Each Task Order shall contain an incentive plan set forth in Attachment 5 (Incentive Plan) of the Task Order that will contain one or more of the following elements. Each of these elements is subject to change in accordance with Article 23 (Changes), or due to Excusable Delay in accordance with Article 17 (Excusable Delay).

2.Cost Incentive

a.For any T&M Task Order designated as containing a “Cost Incentive,” Attachment 5 (Incentive Plan) of the Task Order will establish the following factors:

i.“Target Price” is the dollar value established for a Task Order that is used in the computation of any Savings Incentive earned by AFS or discount to be applied to Charges invoiced by AFS to VG. An original Target Price is established at the time the Parties enter into a Task Order. The Target Price will be adjusted as appropriate due to Changes in accordance with Article 23 (Changes), including but not limited to the realization of risks not included in the original Target Price. The Target Price may be less than, equal to, or greater than the NTE for a T&M Task Order since the Target Price is used to compute the Savings Incentive or discount rather than the maximum Charges.

ii.“Initial Discount” is a percentage that represents the discount to be applied by AFS to any Charges invoiced by AFS to VG in excess of the Target Price.

iii.“Additional Discount Threshold” is the dollar amount above which the Additional Discount will apply.

iv.“Additional Discount” is a percentage that represents the discount to be applied by AFS to any Charges invoiced by AFS to VG in excess of the Additional Discount Threshold.

v.“Savings Incentive” is a percentage that represents the amount of any cost savings below the Target Price that AFS will be paid by VG.

a.Cost Incentives shall be applicable only to T&M Task Orders.

b.For any Task Order containing a Cost Incentive, if the Charges for such Task Order exceed the Target Price, AFS shall apply the Initial Discount to any invoiced amount in excess of the Target Price. For the avoidance of doubt, if the Target Price is exceeded in an invoice, then AFS will apply the Initial Discount only to the portion of that invoice that exceeds the Target Price and then to all subsequent invoices for that Task Order.

c.If further Charges on a Task Order containing a Cost Incentive exceed the Additional Discount Threshold, AFS shall apply both the Initial Discount and

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

the Additional Discount to any invoiced amount in excess of the Additional Discount Threshold. For the avoidance of doubt, (i) the Additional Discount is additive to the Initial Discount, such that the Initial Discount and the Additional Discount shall both apply to any Charges in excess of the Additional Threshold Discount, and (ii) if the Additional Discount Threshold is exceeded in an invoice, then AFS will apply the Additional Discount only to the portion of that invoice that exceed the Additional Discount Threshold and then to all subsequent invoices for that Task Order.

d.If the total Charges for all work completed on any Task Order containing a Cost Incentive are less than the Target Price, VG will pay to AFS the amount calculated by multiplying the Savings Incentive by the difference between the total Charges for all work completed under such Task Order and the Target Price. This amount will be payable by VG upon completion of the Task Order in accordance with Article 4 (Payments).

3.Schedule Incentive

a.For any Task Order designated as containing a “Schedule Incentive,” Attachment 5 (Incentive Plan) of the Task Order will establish the following factors:

i.“Completion Date” is the date that the Parties have agreed is the last date of the period of performance of a Task Order.

ii.“Target Date” is the date established for a Task Order that is used in the computation of any Schedule Incentive earned by AFS. An original Target Date is established at the time the Parties enter into a Task Order. The Target Date will be adjusted as appropriate due to Changes in accordance with Article 23 (Changes), including but not limited to the realization of risks not included in the original Target Price, and Excusable Delays in accordance with Article 17 (Excusable Delays). The Target Date may be earlier than, the same as, or later than the Completion Date since the Completion Date is used to determine whether the Schedule Incentive is earned. For the avoidance of doubt, the Target Date may the date for a significant Deliverable or milestone; the Target Date need not be completion of the Task Order.

iii.“AFS Contribution” is the dollar amount or percentage (as indicated in Attachment 5 (Incentive Plan) to Task Orders) that VG will withhold from each invoice payable for such Task Order as a contribution to the Schedule Incentive Pool (as defined below).

iv.“VG Contribution” means the dollar amount or percentage (as indicated in Attachment 5 (Incentive Plan) to Task Orders) that VG will contribute to the Schedule Incentive Pool (as defined below).

v.“Target Aircraft Acceptance Date” means the date anticipated for Acceptance of the first Accepted Aircraft and will be used to determine the eligibility of payment of the “Program Schedule Risk Pool” (as defined below).

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

e.For each invoice under a Task Order containing a Schedule Incentive, VG will withhold payment for such invoice in the amount of the AFS Contribution. VG will add each AFS Contribution and VG Contribution to a “Schedule Incentive Pool,” which is the sum of AFS Contributions and VG Contributions applicable to such Task Order.

f.If substantially all work under a Task Order containing a Schedule Incentive is completed on or before the Target Date, AFS shall be deemed to have earned the Schedule Incentive Pool applicable to such Task Order. For purposes of this Article 5 (Incentives), work on a Task Order is “substantially” complete when no Class 1 action items remain to be dispositioned pursuant to Section 1.2.1.3 (Conditions of Acceptance) of Exhibit C (Governance) under the final milestone listed in Attachment 6 (Milestone Schedule) of such Task Order, or in the case of Task Order 5, upon Acceptance of the first Accepted Aircraft. Any earned Schedule Incentive for completed Task Order(s) will be payable by VG in accordance with Article 4 (Payments).

g.If substantially all work under a Task Order containing a Schedule Incentive is completed between one (1) and [***] calendar days of the Target Date, AFS shall be deemed to have earned fifty percent (50%) of the Schedule Incentive Pool applicable to such Task Order. The amount of the Schedule Incentive Pool will be payable by VG in accordance with Article 4 (Payments). The unearned portion of the AFS Contributions under such Task Order will be added to the “Program Schedule Risk Pool.” VG shall be entitled to retain the unearned portion of the VG Contributions, and AFS hereby waives any claim to receive the unearned portion of the VG Contributions under such Task Order.

h.If substantially all work under a Task Order containing a Schedule Incentive is completed more than [***] calendar days after the Target Date, the Schedule Incentive Pool applicable to such Task Order will be added to a “Program Schedule Risk Pool.”

i.If Acceptance of the first Accepted Aircraft occurs on or before the date for such event set forth in Attachment 5 (Incentive Plan) of the Task Order most recently executed or modified by the Parties (“Target Aircraft Acceptance Date”), the full amount of the “Program Schedule Risk Pool” will be payable by VG upon Acceptance of the first Accepted Aircraft in accordance with Article 4 (Payments). The Target Aircraft Acceptance Date is subject to change in accordance with Article 23 (Changes), or due to Excusable Delay in accordance with Article 17 (Excusable Delay).

j.If Acceptance of the first Accepted Aircraft occurs on after the Target Aircraft Acceptance Date, VG shall be entitled to retain the entire Program Schedule Risk Pool, and AFS hereby waives any claim to receive any portion of the Program Schedule Risk Pool.

k.For any FP Task Order(s) relating to any Aircraft subsequent to the first Accepted Aircraft, the Schedule Incentive mechanism described above shall apply, except that no Program Schedule Risk Pool will be created, and AFS’s eligibility to receive the Schedule Incentive for each such Task Order shall be determined as of the completion of the work under such Task Order.

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

l.The Parties agree that each Task Order except Task Order 1 shall contain a Schedule Incentive and that no Schedule Incentive shall apply to Task Order 1.

4.Performance Incentive

b.For Task Orders 2 and 5, a “Performance Incentive” described in Attachment 5 (Incentive Plan) of the Task Order will establish the following factors:

i.“Measured Value” means the value of each of the Performance Criteria as derived using the Measurement Methodology.

ii.“Performance Criterion” or “Performance Criteria” is one or more technical performance parameters for the performance of the first Accepted Aircraft.

iii.“Measurement Methodology” is the methodology by which each Measured Value will be compared to the applicable Threshold Value and Objective Value. For the avoidance of doubt, the Measurement Methodology for Task Order 5 will be based on measurements taken during the mated flight test portion of the space flight system (SFS) flight test program to be performed by VG of the first Accepted Aircraft.

iv.“Threshold Value” is the minimum acceptable value for each of the Performance Criteria.

v.“Objective Value” is the desired value for each of the Performance Criteria.

vi.“Performance Incentive Amount” is the total dollar value that is potentially payable for the Performance Incentive under an applicable Task Order. The Performance Incentive Amount is in addition to any Charges due under such Task Order.

vii.“Weighting Factor” is the portion of the Performance Incentive Amount that is attributable each of the Performance Criteria to be used in the calculation of final amount of the Performance Incentive payable to AFS under an applicable Task Order.

m.For each of Task Orders 2 and 5, the Measurement Methodology will be applied to each of the Performance Criteria to determine the Measured Value.

n.For each of the Performance Criteria for which the Measured Value exceeds the Threshold Value, VG will calculate the portion of the Performance Incentive Amount payable to AFS by multiplying the Weighting Factor applicable to each of the Performance Criteria by the amount by which Measured Value exceeds the Threshold Value.

o.If the Measured Value for any of the Performance Criteria exceeds the applicable Objective Value, VG will calculate the portion of the Performance Incentive Amount payable to AFS in connection with that Performance Criterion by multiplying the Weighting Factor applicable to such Performance

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

Criterion by the Performance Incentive Amount. For the avoidance of doubt, in no event shall (i) the measurement of the Measured Value of any of the Performance Criteria in excess of the applicable Objective Value increase the amount that AFS is eligible to receive with respect to any other Performance Criterion, or (ii) the total amount payable under the Performance Incentive for a Task Order exceed the Performance Incentive Amount applicable to such Task Order.

p.If the Measured Value for any Performance Criterion as measured after Task Order 2 exceeds the Measured Value for such Performance Criterion as measured after Task Order 5, the Performance Incentive applicable to Task Order 2 shall be calculated using the Measured Value as measured after Task Order 5.

q.If one or more of the Performance Criteria do not meet or exceed the applicable Threshold Value, AFS will not be eligible for the portion of the Performance Incentive Amount attributable to such Performance Criterion, as determined by the applicable Weighting Factor.

r.Upon completion by VG of the Performance Incentive calculation described above, the portion of the Performance Incentive Amount earned by AFS will be payable by VG in accordance with Article 4 (Payments) after the first Accepted Aircraft Enters Commercial Revenue Service. If VG fails to take measurements within six (6) months after Acceptance of the first Accepted Aircraft, Aurora will be entitled to full payment for any Performance Incentive earned in connection with Task Order 2. VG shall be entitled to retain any portion of the Performance Incentive Amount not earned by AFS under a Task Order.

6.WARRANTIES

1.Design Data

1.AFS warrants Design Data Deliverables and mutually agreed changes thereto in accordance with Article 23 (Changes) at the time of Acceptance, [***].

2.The warranty period for Design Data begins upon [***].

3.VG’s remedy is limited to [***].

2.Hardware Items

1.AFS warrants Hardware Item Deliverables are manufactured [***].

2.The warranty period for Hardware Items and installation begins [***].

3.VG’s remedy is limited to [***].

4.The warranty period for a Hardware Item [***].

3.Additional Warranty Terms

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

1.The warranties set forth in Paragraphs A and B of this Article 6 (Warranties) do not apply to [***].

2.AFS will [***].

3.The warranties set forth in Paragraphs A, B, and C, Section 2 of this Article 6 (Warranties) are void if [***].

4.VG warrants that it is [***].

7.INTELLECTUAL PROPERTY RIGHTS

1.Each Party retains its existing rights in its own Background Intellectual Property.

2.Notwithstanding VG’s obligations [***].

3.AFS Background IP License

c.AFS shall identify [***].

d.Each grant will be recorded [***].

e.The Parties’ Program Directors shall [***].

f.AFS shall cause any Deliverable containing AFS Background IP or the Background Intellectual Property of any third party to [***].

4.Subcontractor Background Intellectual Property License

a.For any Background Intellectual Property belonging to a Subcontractor [***].

b.[***].

5.Supplier Background Intellectual Property License

a.To the extent applicable, AFS shall obtain from any Supplier [***].

b.[***].

6.During the course of the Agreement, AFS shall [***].

7.VG hereby grants to AFS [***].

8.[***].

8.PROPRIETARY INFORMATION

1.Unless the Receiving Party has received the Disclosing Party’s express written consent to the contrary, and except for rights granted under Article 7 (Intellectual Property Rights), the Receiving Party shall:

a.use the Proprietary Information solely for the purposes of performing its obligations under this Agreement (it being understood and agreed that either Party may not use the other Party’s Proprietary Information for other purposes

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

including, without limitation, designing, manufacturing, selling, servicing or repairing equipment for entities other than itself or its Affiliates; providing services to other entities; or obtaining any government or third-party approvals to do any of the foregoing);

b.safeguard the Proprietary Information to prevent its disclosure to or use by third parties;

c.except as provided in Paragraph B of this Article 8 (Proprietary Information), not disclose the Proprietary Information to any third party; and

d.not reverse engineer, disassemble, or decompile the Proprietary Information.

2.The Receiving Party may disclose the Disclosing Party’s Proprietary Information to the Receiving Party’s officers, directors, employees, contract workers, consultants, agents, Affiliates, Subcontractors, or Suppliers who have a need to know such Proprietary Information for the purposes of performing the Receiving Party’s obligations under this Agreement and who have a binding written or ethical obligation to treat such information in a manner consistent with the terms of this Article 8 (Proprietary Information).

3.This Article shall not restrict the Receiving Party from using or disclosing any information that, as proven by written contemporaneous records kept in the ordinary course of business: (i) is or may hereafter be in the public domain through no improper act or omission of the Receiving Party or a third party; (ii) is received by the Receiving Party without restriction as to disclosure from a third party having a right to disclose it; (iii) was known to the Receiving Party on a non-confidential basis prior to the disclosure by the Disclosing Party; or (iv) was independently developed by employees of the Receiving Party who did not have access to any of the Disclosing Party’s Proprietary Information.

4.If Proprietary Information is required to be disclosed pursuant to judicial process, the Receiving Party shall promptly provide notice of such process to the Disclosing Party and, upon request and at the Disclosing Party’s expense, shall fully cooperate with the Disclosing Party in seeking a protective order or otherwise contesting such a disclosure. Disclosure of such requested Proprietary Information shall not be deemed a breach of this Article 8 (Proprietary Information).

5.Obligations in this Article 8 (Proprietary Information) regarding Proprietary Information shall continue until such time as all Proprietary Information is publicly known and generally available through no improper act or omission of a Party or any third party. This Article 8 (Proprietary Information) shall survive termination or expiration of the Agreement.

6.Unless required otherwise by law, the Receiving Party shall promptly return, or otherwise destroy, Proprietary Information as the Disclosing Party may direct. Absent contrary instructions, the Receiving Party shall destroy all Proprietary Information one (1) year after termination or expiration of the Agreement. The Receiving Party may retain one copy for its archival records and dispute resolution purposes. Notwithstanding this Paragraph F of Article 8 (Proprietary Information), the Receiving Party shall not be obligated to return or destroy Proprietary Information of that is stored on the Receiving Party’s normal

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

computer backup system, provided that the Receiving Party does not have routine access to such Proprietary Information and that the restrictions under this Article 8 (Proprietary Information) shall continue to apply for so long as such Proprietary Information is retained by the Receiving Party.

7.Except for AFS Proprietary Information, Background Intellectual Property and third-party Intellectual Property, AFS agrees to cause any Deliverables delivered by AFS regardless of form (including, for example, electronic, magnetic and optical media), containing or derived in whole or in part from Proprietary Information to bear the following legend:

This document contains the property of Virgin Galactic, LLC. You may not possess, use, copy or disclose this document or any information in it for any purpose without express written permission from Virgin Galactic.

8.Without obtaining the owning party’s written consent, the other party shall make no further use, either directly or indirectly for any third parties, of any data or any information derived from any Proprietary Information.

9.If VG furnishes sample products, equipment, or other objects or material to AFS, the items so received shall be used and the information obtained from said items shall be treated as if they were VG’s Proprietary Information.

9.ON-SITE AND REMOTE SUPPORT

a.During the Term, AFS shall provide the following for a reasonable number (approximately [***]) of VG personnel designated by VG to perform work at AFS facilities, as well as VG personnel temporarily visiting AFS facilities from time to time:

1.space sufficient to permit the designated VG personnel to collaborate effectively with their counterparts at AFS;

2.access for the designated VG personnel to enter and exit any AFS facility during normal business hours where work is being performed under the Agreement;

3.permission and support for the designated VG personnel to use electronic equipment, including phones and laptops, required for them to perform necessary tasks; and

4.access to AFS information technology resources and applications necessary for VG to perform its Design Authority responsibilities, as defined in Exhibit C (Governance).

b.All of the above must be provided to VG’s reasonable satisfaction.

10.KEY PERSONNEL

a.Task Orders may designate Key Personnel of the Parties. Either Party may replace its Key Personnel after notifying the other Party of the change. The Parties will endeavor to minimize any adverse impact of replacement through communication and coordination. To the extent reasonably practicable, AFS shall

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

provide advance notice to VG of any transfer, replacement, or termination of Key Personnel and shall provide VG with a written mitigation plan describing the efforts AFS will take to reduce the impact of such action.

11.BUYER-FURNISHED PROPERTY

1.VG will provide “Buyer-Furnished Property” (as further described in this Article 11 (Buyer-Furnished Property)) identified in Task Orders to AFS for AFS’s use in the performance of Task Orders under this Agreement. VG’s failure to provide Buyer-Furnished Property in useable condition by the dates requested by AFS may adversely impact AFS’ performance of Task Orders. AFS shall only use Buyer-Furnished Property in the performance of work under this Agreement unless alternate use is authorized in writing by VG.

2.Buyer-Furnished Property may take various forms, including (i) data; (ii) material to be consumed in the manufacture of components, sub-assemblies, assemblies, or Aircraft; (iii) material or equipment incorporated in a component, sub-assembly, assembly, or Aircraft; (iv) tooling, equipment, and facilities used in the manufacture, assembly, integration, or test of a component, sub-assembly, assembly, or Aircraft; and (v) a Deliverable previously provided by AFS under the same or different Task Order.

3.AFS shall preserve any markings VG may have affixed identifying the Buyer-Furnished Property as owned by VG. AFS will ensure VG’s title to such property remains free and clear of encumbrances.

4.AFS shall manage all non-consumable material, equipment, and tooling furnished by VG, and such management shall be in accordance Exhibit F (Property Management System Plan).

5.AFS shall, at its sole discretion, be responsible for the cost of repairing, replacing, or reimbursing VG for the value of Buyer-Furnished Property lost or damaged due to AFS’ negligence or misconduct while in its custody and under its control excluding normal wear and tear. For purposes of calculating value in the preceding sentence, (i) for new Buyer-Furnished Property, the replacement value will be used, which is computed using the current cost of the item; and (ii) for used Buyer-Furnished Property, the net book value will be used, which is computed using the original cost of the item less accumulated depreciation. VG shall be responsible for the cost of scheduled maintenance, including calibration, of all Buyer-Furnished Property provided for AFS’ use.

6.VG shall be responsible for informing AFS of safety issues or concerns with normal use or operation of the Buyer-Furnished Property, including providing Material Safety Data Sheets for material and proper instruction for the use of equipment. AFS is responsible for ensuring its personnel using the Buyer-Furnished Property have the knowledge and skill to do so in a safe and professional manner. AFS is responsible for personal injuries and property damage which may arise from AFS’ use of the Buyer-Furnished Property to the extent such personal injury or property damage is the result of negligence or misconduct of AFS.

7.A list of non-consumable material, equipment, and tooling furnished by VG is previously provided to AFS and under AFS control is provided in Exhibit G

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

(Inventory of Buyer-Furnished Equipment, Non-Consumable Material and Tooling). AFS shall maintain an updated list reflecting any additions, deletions and change in location. AFS shall provide a copy upon request of the VG Authorized Representative.

12.SUPPLIERS AND SUBCONTRACTORS

1.AFS will manage Suppliers in accordance with AFS’s existing supplier management procedures that are generally applicable to AFS’s supplier base and as revised by AFS from time to time, which will be shared with VG per Exhibit C (Governance).

2.AFS will manage Subcontractors in accordance with Exhibit H (Subcontract Management Plan). AFS will ensure that its subcontracts incorporate VG’s requirements set forth in or incorporated by this Agreement and any Task Order. AFS is responsible for any failure of performance by its Subcontractors.

3.AFS will provide written notification in advance of engaging any Subcontractor to perform work under this Agreement. AFS must obtain written approval to enter into any Subcontract with an aggregate value, inclusive of work under all Task Orders, exceeding [***]. Separate advance notification and approval is not required for each Task Order. That is, once VG has been notified and, if required, approved, a Subcontractor may be used on any Task Order.

4.A list of Subcontractors for which AFS has provided notification and to which VG has approved is provided in Exhibit I (List of Subcontractors). AFS will maintain an updated list throughout the Term of this Agreement and provide a copy upon request by the VG Authorized Representative.

13.EXCLUSION OF LIABILITY; INDEMNIFICATION; LIMITATION OF LIABILITY

[***]

14.INSURANCE

1.Hull Insurance. To the extent VG maintains aircraft hull and hull war insurance covering any Mothership aircraft, VG shall cause its aircraft hull and hull war insurers to waive all rights of subrogation against AFS, and its divisions, subsidiaries, Affiliates, the assignees of each, suppliers, subcontractors, and their respective officers, employees and agents excluding in cases of reckless disregard or willful misconduct.

2.Liability Insurance. VG will, at its sole expense, maintain with a reputable insurer in a leading U.S. or European insurance market, or otherwise re-insured in a leading U.S. or European market, aircraft liability insurance in available limits of not less than [***], which must be in effect no later than the commencement of any flight operations (including but not limited to flight testing) for all aircraft incorporating Intellectual Property provided by AFS under this Agreement (whether or not such aircraft is manufactured by AFS, VG, or a third party). Such insurance shall include third party legal liability. VG covenants that any insurance policies carried in accordance with this Article 14 (Insurance) shall: (i) be endorsed to name AFS and its Affiliates, subsidiaries, successors, assigns of each,

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

suppliers, subcontractors, and their respective directors, officers, agents, and employees as additional insured (hereinafter each an “Additional Insured” and collectively the “Additional Insureds”); (ii) provide that in respect of the interests of any Additional Insured in such policies, the insurance shall not be invalidated by any act or omission (including misrepresentation and non-disclosure) of VG or any other person (other than, as to any Additional Insured, any misrepresentation or non-disclosure of such Additional Insured) which results in a breach of any term, condition or warranty of such policies; (iii) provide that none of the Additional Insureds shall have responsibility for the payment of premiums or any other amounts payable under such policies; (iv) provide that insurers waive all rights of subrogation against the Additional Insureds; (v) provide that, if such insurance is canceled or allowed to lapse for any reason whatsoever, or if any material change is made in such insurance that adversely affects the interest of any Additional Insured, such cancellation, lapse or change shall not be effective as to any Additional Insured for thirty (30) days (seven (7) days, or such other period as is then customarily obtainable in the industry, in the case of any war and allied perils liability coverage) after the giving of written notice from such insurers or VG’s appointed insurance broker to AFS; (vi) be primary without right of contribution from any other insurance maintained by any Additional Insured; (vii) provide a severability of interests provision applicable to each insured and Additional Insured under the policy such that all of the provisions of the insurance required hereunder, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured and Additional Insured; (viii) waive any right of the insurers to any setoff, counterclaim or other deduction against the Additional Insureds.

3.Insurance Certificates. On or before the commencement of any flight operations for any aircraft incorporating Intellectual Property provided by AFS under this Agreement , and from time to time during the Insurable Period upon AFS’s reasonable request, VG will provide an insurance certificate certifying that all insurance policies as required under this Article 14 (Insurance) are in effect with respect to the Aircraft.

4.Self-retentions, deductibles, and exclusions. Any self-retained layer, deductibles and exclusions in coverage in such policies shall be assumed by, for the account of and at the sole risk of VG. In no event shall the liability of VG be limited to the extent of any insurance available to or provided by VG.

5.CSLA Launch Phase:

c.VG shall or cause its launch provider/licensee to cause its insurer(s) providing aviation third party liability insurance to add AFS, its subsidiaries, Affiliates, subcontractors and assignees and their respective directors, officers, agents, servants, and employees as additional insureds under such insurance and waive all rights of subrogation against the additional insureds, excluding in cases of reckless disregard and willful misconduct.

d.VG and AFS each agree to waive and release claims it may have against the other Party (and cause their respective consultants and subcontractors at any tier that are present at the launch site and involved in the performance of this Agreement to accede to such waiver) for any loss or liability which a Party sustains as a result of injury to, or death of, its own employees and damage to its own property occurring while involved in launch operations at the

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

designated launch site, whether or not such damage arises through the negligence of a Party or otherwise. The Parties shall execute and deliver any instrument that may be reasonably required by the launch provider to further evidence their respective agreements to be bound by such waivers.

e.The Parties shall obtain from their respective insurers, and shall require their respective consultants and subcontractors at any tier (including suppliers of any kind) that are present at the launch site and involved in the performance of this Agreement, and the launch provider, to obtain from their respective insurers, an express waiver of such insurer’s rights of subrogation with respect to any and all claims that have been waived pursuant to this Article 14 (Insurance).

6.Informed Consent Waiver: VG shall cause each space flight participant to agree as follows (with capitalized terms used below to reflect the meaning assigned to them in applicable regulations):

a.Waiver and Release of Claims. Space Flight Participant hereby waives and releases claims it may have against the Licensee, each of its respective Contractors and Subcontractors, and other Space Flight Participants, for Bodily Injury, including Death, or Property Damage sustained by Space Flight Participant, resulting from Licensed Activities, regardless of fault.

b.Assumption of Responsibility. Space Flight Participant shall be responsible for Bodily Injury, including Death, or Property Damage sustained by the Space Flight Participant resulting from Licensed Activities, regardless of fault. Space Flight Participant shall hold harmless the Licensee, and each of its respective Contractors and Subcontractors, and each of the directors, officers, servants, agents, employees, insurers and assignees of the Licensee, its Contractors and Subcontractors, for Bodily Injury, including Death, or Property Damage sustained by Space Flight Participant from Licensed Activities, regardless of fault.

c.Indemnification. Space Flight Participant shall hold harmless and indemnify the Licensee, and each of its respective Contractors and Subcontractors, and each of the directors, officers, servants, agents, employees, insurers and assignees of the Licensee, its Contractors and Subcontractors, or any of them, from and against liability, loss or damage arising out of claims brought by anyone for Property Damage or Bodily Injury, including Death, sustained by Space Flight Participant, resulting from Licensed Activities.

15.SAFETY

1.AFS understands and represents that it is responsible for and is and shall remain compliant with any OSHA, federal, state, and/or municipal standards and/or requirements which may apply to the work to be performed under this Agreement.

2.COVID-19 Compliance

1.Prior to assigning personnel to perform services for VG on-site at a VG facility, AFS shall complete the COVID-19 survey to be provided by VG. AFS agrees to update, as necessary, the information provided in the COVID-19 survey each time any new AFS personnel will be working on-site at any of VG facilities.

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

2.While AFS personnel perform work on-site at a VG facility, they will be required to abide by VG’s safety policies and procedures, including those for COVID-19.

16.COMPLIANCE WITH LAWS; EXPORT

1.AFS shall comply with all applicable national, state, provincial, and local laws, ordinances, rules, and regulations applicable to the performance of work under this Agreement, including but not limited to, those pertaining to U.S. export controls.

2.Each Party shall, at the earliest practicable time, notify in writing to the other Party if it is suspended, debarred, or proposed for suspension or debarment from doing business with the U.S. Government. Without limiting the generality of Paragraph A of Article 16 (Compliance with Laws; Export), each Party shall comply with the most current export control and sanctions laws, regulations, and orders applicable at the time of the export, re-export, transfer, disclosure or provision of any goods, software, technology or services relating to the Agreement and any Statement of Work, including without limitation the (i) Export Administration Regulations (“EAR”) administered by the Bureau of Industry and Security, U.S. Department of Commerce, 15 C.F.R. parts 730-774; (ii) International Traffic in Arms Regulations (“ITAR”) administered by the Directorate of Defense Trade Controls, U.S. Department of State, 22 C.F.R. parts 120-130; (iii) Foreign Assets Control Regulations and associated Executive Orders administered by the Office of Foreign Assets Control, U.S. Department of the Treasury, 31 C.F.R. parts 500-598; and laws and regulations of other countries.

3.The Parties expressly acknowledge that information and/or documents disclosed hereunder, including but not limited to Deliverables or Proprietary Information, may be technical data subject to export control laws and regulations, and that compliance with the appropriate government regulations may be necessary to obtain required approvals before disclosing such information and/or documents to foreign persons, businesses, or governments.

4.UNLESS OTHERWISE PERMITTED UNDER U.S. EXPORT REGULATIONS, ONLY U.S. PERSONS AS DEFINED HEREIN SHALL BE PERMITTED TO RECEIVE CONFIDENTIAL OR EXPORT CONTROLLED INFORMATION. The term “U.S. Person” means any natural person who is a lawful permanent resident as defined by 8 U.S.C. § 1101(a)(20) or who is a protected individual (i.e., lawful permanent resident, refugee, or asylee) as defined by 8 U.S.C. § 1324b(a)(3). “U.S. Person” also means any corporation, business association, partnership, society, trust, or other entity or group that is incorporated to do business in the United States. “U.S. Person” also includes any United States governmental (federal, state, or local) entity.

5.NO PROPRIETARY INFORMATION OR EXPORT CONTROLLED INFORMATION SHALL BE TRANSFERRED OR RE-TRANSFERRED BY EITHER PARTY TO THE OTHER UNLESS IN FULL COMPLIANCE WITH THE EXPORT CONTROL LAWS AND REGULATIONS OF THE TRANSFERRING PARTY’S GOVERNMENT AND COUNTRY.

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

6.In the event AFS employs foreign persons and/or dual or third country nationals, AFS shall ensure all disclosures to such employees are in compliance with U.S. export laws and regulations, including but not limited to ITAR (22 C.F.R. § 120 et seq.) and EAR (15 C.F.R. §§ 730-774), including the requirement for obtaining any export license, if applicable. Without limiting the foregoing, AFS agrees that it will not transfer any export-controlled item, data, information, or services to foreign persons (including foreign persons employed by, associated with, or under contract to AFS) without the authority of an applicable export license or license exemption. AFS shall obtain the written consent of VG prior to submitting any request for authority to export such information.

7.In the event AFS is granted permission in writing to disclose VG’s Proprietary Information or Export Controlled Information to a third party in accordance with this Agreement, AFS shall ensure compliance with U.S. export control laws and regulations prior to said disclosure.

17.EXCUSEABLE DELAY

1.AFS will not be liable for any delays in providing Deliverables when that delay is not reasonably foreseeable and is caused by: (i) acts of God; (ii) war, armed hostilities, or civil unrest; (iii) government acts or priorities; (iv) fires, floods, or earthquakes; (v) strikes or labor troubles causing cessation, slowdown, or interruption of work; (vi) epidemics or pandemics; and (vii) any other cause to the extent such cause is beyond AFS’s or its first-tier suppliers’ control and not occasioned by AFS’s or its first-tier suppliers’ fault or negligence or failure to reasonably exercise prudent supply-chain management practices. A delay resulting from any such cause is defined as an Excusable Delay and the date for completion of AFS’s performance will be equitably extended, reduced, or terminated.

18.TERMINATION

1.Termination for Default

1.VG may invoke termination for default only for Fixed Price Task Orders. VG may only terminate Time and Material Task Orders in accordance with Paragraph B, Section 1 of this Article 18 (Termination).

2.VG may terminate any Fixed Price Task Order if:

a.AFS fails to make delivery, or fails to make progress such that delivery will not occur, of any specific Deliverables identified in Task Orders to which this paragraph applies as agreed upon in the Task Order; and

b.within sixty (60) calendar days (or such longer period as the Parties may mutually agree is reasonable under the circumstances) after receiving a written cure notice from VG, AFS has been unable to establish a remediation plan to remedy the failure that is acceptable to VG in its sole discretion; and

c.on or after the expiration of the cure period specified in Paragraph A, Section 2, Subsection b of this Article 18 (Termination), VG provides

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

to AFS written notice of termination, which will be effective as of the date such notice is sent to AFS.

3.VG’s right to terminate for default in accordance with Paragraph A, Section 2, Subsections a and b of this Article 18 (Termination) may be exercised during a period beginning immediately after fulfillment of the conditions cited therein and ending after Acceptance of the late Deliverable. For the sake of clarity, VG may extend the cure period before providing AFS written notice of termination in accordance with Paragraph A, Section 2, Subsection c of this Article 18 (Termination).

2.Termination for Convenience

1.VG may terminate any Time and Material Task Order by providing AFS with written notice at least ninety (90) days in advance of the effective date of termination specified in such notice.

2.AFS may agree to include a right for VG to terminate for convenience in any Fixed Price Task Orders. If agreed to by the Parties, such Task Orders will specify the timing and circumstances under which VG may exercise this right and the financial consideration VG will pay AFS for exercising it.

3.Other Termination Terms: Either Party may terminate this Master Agreement and any outstanding Task Orders (in whole and collectively only), effective upon written notice to the other Party, if the other Party:

a.becomes insolvent or admits its inability to pay its debts generally as they become due;

b.becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency law, which is not fully stayed within seven (7) business days or is not dismissed or vacated within forty-five (45) calendar days after filing;

c.is dissolved or liquidated or takes any corporate action for such purpose (other than a corporate reorganization in which the Party’s successor-in-interest remains under common control with the Party);

d.makes a general assignment for the benefit of creditors;

e.has a receiver, trustee, custodian, or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business; or

f.becomes subject to a change of control and the new owner of the subject Party either (i) is a direct competitor to the primary business of other Party, or (ii) fails, within sixty (60) days after the consummation of the transaction that results in the change of control, to provide reasonable assurances to the other Party that the new owner has the financial and technical capabilities to perform the subject Party’s obligations under the Agreement. For purposes of this Paragraph C, Section 6 of this Article 18 (Termination), a change in control is deemed to have occurred if there is a change in the beneficial

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

ownership, directly or indirectly, of fifty (50%) or more of the ownership interests in the subject Party.

4.Effects of Termination

1.Unless with respect to Paragraph C of this Article 18 (Termination), AFS shall continue work under Task Orders not terminated, if any. If the only Task Order then in effect is terminated, then the Master Agreement will be deemed terminated as of the effective date of termination of such Task Order.

2.Upon termination of a Task Order pursuant to Paragraphs A and B of this Article 18 (Termination) in accordance with VG’s written direction, AFS will immediately:

d.cease the terminated work and place no further subcontracts or orders for services, except as necessary to complete the continued portion of any unterminated Task Orders;

e.prepare and submit to VG an itemization of all completed and partially completed Deliverables;

f.transfer title and deliver to VG any and all Deliverables completed up to the date of termination;

g.if requested by VG, transfer title and deliver any work-in-process and any partially-completed Deliverables; and

h.provide VG with an invoice for work performed through the effective date of termination, which VG will pay in accordance with Article 4 (Payment).

3.If VG terminates a Task Order for AFS’s default in accordance with Paragraph A of this Article 18 (Termination) above:

a.the activities required in Paragraph D, Section 2, Subsections b through e will be at AFS’s expense. For the avoidance of doubt, these activities will be at VG’s expense for any other termination; and

b.AFS shall provide transition services to VG as requested to support the transfer of work on the Program from AFS to either VG or a third party. AFS shall provide these transition services at no charge to VG up to [***] total labor hours. For transition services requested by VG above the limit in the previous sentence, AFS may charge for these services at the time and materials rates most recently agreed to by the Parties in a Time and Material Task Order.

4.If VG terminates a Task Order for its convenience:

i.AFS shall promptly prepare a termination plan for the winding down of work on the terminated Task Order, including without limitation by rapidly reducing workers assigned to the Task Order and reducing labor costs and listing any costs (plus applicable mark-up) for non-

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

labor items, including without limitation any materials, purchased services, or Subcontracts, that AFS is unable to cancel.

j.The Parties shall negotiate in good faith to agree on the termination plan, and any disagreement shall constitute a dispute under Article 26 (Governing Law and Disputes).

k.VG shall compensate AFS for the actual, allowable, and reasonable charges, including direct and allocable indirect cost and profit, described in the mutually agreed termination plan.

5.VG shall not be liable to AFS for costs or damages other than as described above, and in no event for lost or anticipated profits, or unabsorbed indirect costs or overhead, or for any sum in excess of the price allocated to the portion of the work terminated.

19.PUBLICITY

1.Neither Party shall make or authorize any press release, advertisement, or other disclosure that relates to this Agreement or the relationship between the Parties or makes use of the other Party’s name or logo, without the prior written consent of the other Party.

20.NON-SOLICITATION

1.The Parties agree that during the term of this Agreement, neither a Party nor any of its Affiliates or representatives shall directly or indirectly, for itself or on behalf of another person or entity solicit for employment or otherwise induce, influence, or encourage to terminate employment with the other Party or any of its Affiliates or employ or engage as an independent contractor any of the other Party’s current employees who are performing on under this Agreement, or any of its Affiliates or subsidiaries (each, a "Covered Employee"), except pursuant to a general solicitation through the media that is not directed specifically to any Covered Employee, unless such general solicitation is undertaken as a means to circumvent the restrictions contained in, or conceal a violation of, this provision.

21.NOTICES

i.All notices, requests, demands and other communications shall be given in writing and shall be: (i) personally delivered; (ii) sent by telecopier, facsimile transmission or other electronic means of transmitting written documents; or (iii) sent to the Parties at their respective addresses indicated in the introductory paragraph of this Agreement by registered or certified U.S. mail, return receipt requested and postage prepaid, or by private overnight mail courier service. The respective electronic mail addresses to be used for all notices, demands or requests are as follows:

If to VG, to:

Attention:    Legal Department

Email:    [***]

or to any other person or address as VG shall furnish to AFS in writing; and

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

If to AFS, to:

Attention:    [***]

Email:    [***]

with a copy to:

Attention:    [***]

Email:    [***]

or to any other person or address as AFS shall designate.

ii.If personally delivered, the communication shall be deemed delivered upon actual receipt; if electronically transmitted pursuant to this Paragraph B of this Article 21 (Notices), the communication shall be deemed delivered the next business day after transmission (and sender shall bear the burden to prove delivery); if sent by overnight courier pursuant to this Paragraph B of this Article 21 (Notices), the communication shall be deemed delivered upon receipt; and if sent by U.S. mail pursuant to this Paragraph B of this Article 21 (Notices), the communication shall be deemed delivered as of the delivery date indicated on the receipt issued by the relevant postal service, or, if the addressee fails or refuses to accept delivery, as of the date of the failure or refusal. Any Party to this Agreement may change its address for Agreement purposes by giving notice in accordance with this Paragraph B to this Article 21 (Notices).

22.AUTHORIZED REPRESENTATIVES

1.Authorized Contractual Representatives (authorized to commit their respective companies contractually):

Virgin Galactic, LLC	Aurora Flight Sciences Corporation
[***]	[***]

Virgin Galactic, LLC	Aurora Flight Sciences Corporation
[***]	[***]

2.Authorized Technical Representatives (not authorized to commit their companies contractually):

Virgin Galactic, LLC	Aurora Flight Sciences Corporation
[***]	[***]

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

Virgin Galactic, LLC	Aurora Flight Sciences Corporation
[***]	[***]

3.Either Party may add or replace Authorized Representatives by providing written notification from one of its designated Authorized Contractual Representatives to a designated Authorized Contractual Representative of the other Party.

23.CHANGES

1.Changes to the terms and conditions of this Master Agreement, including any Attachment, may only be made by mutual agreement of Authorized Contractual Representatives of VG and AFS designated in Paragraph A of Article 22 (Authorized Representatives). Such Changes shall be reduced to writing in the form of and be referred to as an “Amendment” to this Agreement. Exceptions to this requirement are updates to the following Exhibits in accordance with other provisions of this Master Agreement:

1.Exhibit C-1 (Governing Documents)

2.Exhibit E (Background IP Schedule)

3.Exhibit G (Inventory of Buyer-Furnished Equipment, Non-Consumable Material and Tooling)

4.Exhibit I (List of Subcontractors)

2.Changes to the terms and conditions of any Task Order, including any change to the Statement of Work, may only be made by mutual agreement of Authorized Contractual Representatives of VG and AFS designated in Paragraph A of Article 22 (Authorized Representative). Such Changes shall be reduced to writing in the form of and be referred to as a “Modification” to that Task Order.

3.If any Change causes an increase or decrease in the cost of, or the time required for, performing a Task Order, an equitable adjustment to be mutually agreed between the Parties shall be made to the Task Order Attachment 1 (Statement of Work), Target Price (if T&M Task Order) or Fixed Price (if FP Task Order), schedule, and other terms. If the cost of property made obsolete or excess as a result of a Change is paid by VG, VG may prescribe the manner of disposition of the property. Notwithstanding any disagreement between the Parties regarding the impact of a Change, AFS will proceed diligently with its performance of the unchanged work pursuant to the pending resolution of the disagreement.

24.ASSIGNMENT

1.Either Party may assign this Agreement only with the prior written consent of the other Party, and any assignment of the Agreement, in whole or in part, without the other Party’s prior written consent shall be null and void and shall constitute a material breach of the Agreement. Notwithstanding the foregoing, either Party may assign this Agreement to an Affiliate without the other Party’s consent.

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

25.RELATIONSHIP OF THE PARTIES

iii.The relationship between AFS and VG will be that of independent contractors and not that of principal and agent, nor that of legal partners. Neither Party will represent itself as the agent or legal partner of the other Party nor perform any action that might result in other persons believing that it has authority to contract in any way to enter into commitments on behalf of the other.

26.GOVERNING LAW AND DISPUTES

1.This Agreement shall be interpreted in accordance with the plain English meaning of its terms and the construction thereof shall be governed by the laws in force in the State of Delaware, U.S., without regard to any conflicts of law or choice of law principles of any jurisdiction.

2.The provisions of the United Nations Convention on Contracts for the International Sale of Goods, Vienna, 11 April 1980, S.Treaty Document Number 98-9 (1984), UN Document Number A/CONF 97/19, 1489 UNTS 3, shall not apply.

3.The Parties shall attempt to settle any dispute arising out of this Agreement amicably through conciliation. If unsuccessful after good faith attempts, either Party may seek remedy or relief in a court of competent jurisdiction subject to governing law provision of Paragraph A of this Article 26 (Governing Law and Disputes).

4.Pending final resolution of any dispute, AFS shall proceed with performance of the Agreement according to VG's instructions so long as VG continues to pay amounts not in dispute.

27.INTERPRETATION AND CONSTRUCTION

1.This Agreement shall be interpreted as a unified contractual document with all provisions having equal effect.

2.If any provision of this Agreement shall be determined to be invalid or unenforceable under any applicable law, such provision shall be ineffective only to the extent of such prohibition or unenforceability. The remaining provisions shall be given effect in accordance with their terms.

28.SURVIVAL

1.All obligations, and duties hereunder, which by their nature or by their express terms extend beyond the expiration or termination of this Agreement, including but not limited to warranties, indemnifications, insurance, non-solicitation, publicity, and intellectual property (including rights to and protection of intellectual property and proprietary information) shall survive the expiration or termination of this Agreement.

29.REMEDIES; NO WAIVER

1.The rights and remedies set forth herein are cumulative and in addition to any other rights or remedies that the Parties may have at law or in equity. Neither VG’s or AFS’s failure to insist on performance of any of the terms or conditions herein, or to exercise any rights of privileges, or either VG’s or AFS’s waiver of any breach hereunder, shall not thereafter waive any such terms, conditions or

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

privileges or any other terms, conditions, or privileges whether of the same of similar type.

30.ORDER OF PRECEDENCE

1.All documents and provisions in this Agreement shall be read so as to be consistent to the fullest extent possible.  In the event of a conflict or inconsistency between the documents or provisions as incorporated into or attached to the Agreement, the documents or provisions shall prevail in the order listed below, with the first document or provision listed having the highest precedence:

a.Task Orders, in reverse chronological order, including Attachments other than the SOWs

b.Master Agreement

c.Master Agreement Exhibits in the following order:

i.Exhibit A (Definitions)

ii.Exhibit C (Governance)

iii.Exhibit D (Responsibility Matrix)

iv.Exhibit E (Background IP Schedule)

v.Exhibit F (Property Management System Plan)

vi.Exhibit H (Subcontract Management Plan)

vii.Exhibit C-1 (Governing Documents)

viii.Exhibit G (Inventory of Buyer-Furnished Equipment, Non-Consumable Material and Tooling)

ix.Exhibit I (List of Subcontractors)

x.Exhibit J (Task Order Form)

d.Task Order SOWs

e.Master Agreement Exhibit B (Program Overview)

f.Purchase order

31.ENTIRE AGREEMENT

1.The terms and conditions of this Agreement constitute the entire agreement between the Parties hereto and shall supersede all previous communications, representations, or agreements, either oral or written between the Parties hereto with respect to the subject matter hereof. Any terms and conditions proposed in VG’s Purchase Orders or AFS’s acceptance or acknowledgment of such, invoice, or other form in which VG or AFS adds to, varies from, or conflicts with the terms herein are hereby rejected.

[SIGNATURE PAGE TO FOLLOW]

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date.

AURORA FLIGHT SCIENCES CORPORATION
By:		/s/ Stephen G. Clark
Typed Name:			Stephen G. Clark
Title:	Contracts Manager

VIRGIN GALACTIC, LLC
By:	/s/ Michael Colglazier
Typed Name:			Michael Colglazier
Title:		Chief Executive Officer

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

EXHIBIT A

DEFINITIONS

The following terms will have the meanings described below.

1.“Acceptance” has the meaning set forth in Article 2 (Structure of Agreement) of the Master Agreement.

2.“Accepted Aircraft” means a Delivered Aircraft that has completed flight tests to AFS test procedures and test results as specified in the Test and Evaluation Master Plan.  Prior to Aircraft Acceptance VG and AFS may mutually agree to additional Deliverables in the Task Order under which Aircraft Acceptance will occur.

3.“Affiliate” means any entity other than the Parties that directly or indirectly controls, is controlled by, or under common control with such entity.

4.“AFS Background IP” means any Background Intellectual Property owned by either AFS or one of its Affiliates that is either incorporated into a Deliverable or that is necessary for VG to exploit its rights in the Foreground Intellectual Property.

5.“AFS” means Aurora Flight Sciences Corporation.

6.“Agreement” means this Master Agreement, including exhibits, attachments, change notices, supplements, amendments, or modifications thereto, except where the context indicates that a particular document is being referred. The definition of Agreement also includes all Task Orders, including exhibits, attachments, change notices, supplements, amendments, or modifications thereto.

7.“Aircraft” means a specific device that will be used or intended to be used by VG for flight in the air. An Aircraft is a unique, physical object. An Aircraft is based upon a design initially developed by VG, modified by AFS, and approved by VG. An Aircraft is assembled, integrated, and ground tested by AFS incorporating Hardware Items, tangible items acquired by AFS from Suppliers, and Buyer-Furnished Property.

8.“Approval” has the meaning set forth in Article 2 (Structure of Agreement) of the Master Agreement.

9.“Background Intellectual Property” means Intellectual Property, and any derivative works thereof, other than Foreground Intellectual Property.

10.“Buyer-Furnished Property” has the meaning set forth in Article 11 (Buyer-Furnished Property) of the Master Agreement.

11.“Change” has the meaning set forth in Article 23 (Changes) based upon the usage. A Change or Changes may be made to the Master Agreement and documented in the form of an Amendment. A Change or Changes may be made to a Task Order and documented in the form of a Modification.

12.“Charges” means any amount invoiceable by AFS to VG under a Task Order.

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

13.“Claims” and “Claim” has the meaning set forth in Article 13 (Exclusion of Liability; Indemnification; Limitation of Liability) of the Master Agreement.

14.“Covered Employee” has the meaning set forth in Article 20 (Non-Solicitation) of the Master Agreement.

15.“Customer” means Virgin Galactic, LLC or any Affiliate of Virgin Galactic and any successor or assignee of VG.

16.“Deliverable” means a tangible work product, including in electronic form, provided by AFS to VG specified in a Task Order. All Deliverables are explicitly identified in the applicable Task Order.

17.“Delivered Aircraft” means an Aircraft that has substantially completed specific ground test activities of a mutually agreed upon Test and Evaluation Master Plan and to which title has been transferred from AFS to VG.

18.“Design Authority” has the meaning set forth in Exhibit C (Governance) of the Master Agreement.

19.“Design Data” as used in Article 6 (Warranties) of the Master Agreement, means specifications, plans, drawings, details, graphs, sketches, models, calculations, and other specific documents relating to the design of an Aircraft prepared by AFS and AFS’s Subcontractors and submitted by AFS to VG as a Deliverable. Design Data excludes information provided by VG for AFS’s use and included in Deliverables, and Supplier specifications, plans, drawings, details, graphs, sketches, models, calculations, and other specific documents relating to the design of an Aircraft, except to the extent that such materials are incorporated into a Deliverable.

20.“Disclosing Party” means the Party that discloses Proprietary Information to the Receiving Party.

21.“Effective Date” has the meaning set forth in the first paragraph of the Master Agreement.

22.“Enters Commercial Revenue Service” means substantially completing the space flight system (SFS) flight test program to be conducted by VG as defined within the Test and Evaluation Master Plan.

23.“Fixed Price Task Order” or “FP Task Order” means any Task Order in which the Charges are based on a fixed price agreed to by the Parties.

24.“Foreground Intellectual Property” means Intellectual Property first developed, conceived, or generated by a Party or by a third party for the benefit of a Party under this Agreement, resulting from AFS’s performance and funded by VG under this Agreement, and any derivative works thereof. Foreground Intellectual Property shall include works of authorship created by AFS, Affiliates of AFS, Subcontractors of AFS, or any employees of any of them in the course of performing under this Agreement.

25.“Hardware Items” means a physical component, part, subassembly, or assembly made by AFS or AFS’s Subcontractors and incorporated into an Aircraft.

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

26.“Intellectual Property" means all patents, copyrights, trade secrets, and other rights and information of a similar nature worldwide. Such information includes tangible designs, processes, drawings, prints, specifications, reports, and data.

27.“Key Personnel” means the personnel designated as such in each Task Order.

28.“Master Agreement” means this agreement, including exhibits, attachments, change notices, supplements, amendments, or modifications thereto, except where the context indicates that a particular document is being referred, but not including any Task Orders.

29.“NTE” or “Not To Exceed” is the dollar amount established in each Task Order above which AFS is not permitted to invoice VG for Charges. The NTE amount may be adjusted by mutual agreement of the Parties.

30.“Parties” or “Party” has the meaning set forth in the first paragraph of the Master Agreement.

31.“Payment Milestone Schedules” has the meaning set forth in Article 4 (Payments) of the Master Agreement.

32.“Proprietary Information”means all information, knowledge or data (including without limitation financial, business, and product strategy information; product specifications; product designs; procedures; studies; tests; and reports) in written, electronic, tangible, oral, visual or other form, disclosed by, related to, or obtained from, VG or AFS or either of their Affiliates. For the avoidance of doubt, Foreground Intellectual Property and Background Intellectual Property shall be deemed Proprietary Information of the respective parties

33.“Receiving Party” means that Party that receives Proprietary Information from the Disclosing Party.

34.“Services” means the effort to be performed by AFS hereunder, as specifically described in a Task Order.

35.“Statement of Work” or “SOW” shall mean the requirements set forth in Attachment 1 of each Task Order.

36.“Subcontractor” means an entity, other than an Affiliate of AFS, with which AFS enters into an agreement to perform a portion of AFS’s obligations under this Agreement. Subcontractors typically accomplish a defined statement of work requiring the application of engineering capabilities to generate deliverables to AFS which AFS will use in preparing AFS’s Deliverables to VG. Subcontractors may also be engaged to design, manufacture, integrate, and/or test highly customized parts, subassemblies, or assemblies AFS will incorporate into the end item Aircraft.

37.“Supplier” means an entity, other than an Affiliate of AFS or Subcontractor, to which AFS issues a Purchase Order for the provision of defined products or services typically made available to other customers under commercial terms. Although some customization may be required, Suppliers are generally not required to extensively modify the material, purchased parts, purchased services,

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

equipment rentals, and other items they make commercially available to AFS and other customers.

38.“Task Order” has the meaning set forth in Article 2 (Structure of Agreement) of the Master Agreement

39.“Term” means the period of time the Agreement is in effect as defined by Article 3 (Term).

40.“Test and Evaluation Master Plan” or “TEMP” means the document prepared by AFS and approved by VG that identifies ground and flight test activities to be performed to verify that the Aircraft meets the specific technical requirements mutually agreed by the Parties. The TEMP does not include detailed test procedures or test cards. Rather the TEMP is a summary list of planned tests, the requirements these tests are associated with, and an approximate schedule. Detailed plans and / or procedures, including pass / fail criteria, for each test are not included in the TEMP. Once written by AFS and approved by VG, the TEMP becomes a Governing Document and may only be revised by mutual agreement of the Parties with the understanding the detailed procedures or test cards for each planned test is considered a revision (i.e., the detailed procedures and test cards for each test in the TEMP are subject to the mutual agreement of both Parties).

41.“Time and Material Task Order” or “T&M Task Order” means any Task Order in which the Charges are based on hourly-rate labor and non-labor, including but not limited to, materials (with an agreed mark-up) costs incurred by AFS. AFS is not obliged to perform work under any T&M Task Order beyond the point at which Charges (after the application of any properly computed Initial Discount or Additional Discount in accordance with Article 5 (Incentives) would exceed the NTE value of the Task Order unless VG has increased the NTE value of such Task Order. AFS is not obliged to perform work under any T&M Task Order after the Task Order Completion Date unless VG has extended the period of performance of such Task Order.

42.“VG” means Virgin Galactic, LLC or any Affiliate of Virgin Galactic and any successor or assignee of VG.

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Michael Colglazier, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Virgin Galactic Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 4, 2022	/s/ Michael Colglazier
	Michael Colglazier
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Douglas Ahrens, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Virgin Galactic Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 4, 2022	/s/ Douglas Ahrens
	Douglas Ahrens
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Virgin Galactic Holdings, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Colglazier, Chief Executive Officer (Principal Executive Officer), certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

August 4, 2022	/s/ Michael Colglazier
	Michael Colglazier
	Chief Executive Officer
	(Principal Executive Officer)

This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Virgin Galactic Holdings, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Douglas Ahrens, Chief Financial Officer (Principal Financial Officer), certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

August 4, 2022	/s/ Douglas Ahrens
	Douglas Ahrens
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

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Cover Page - shares	6 Months Ended
	Jun. 30, 2022	Jul. 30, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	001-38202
Entity Registrant Name	Virgin Galactic Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	85-3608069
Entity Address, Address Line One	1700 Flight Way
Entity Address, City or Town	Tustin
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92782
City Area Code	(575)
Local Phone Number	424-2100
Title of 12(b) Security	Common stock, $0.0001 par value per share
Trading Symbol	SPCE
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		258,715,178
Amendment Flag	false
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022
Entity Central Index Key	0001706946
Current Fiscal Year End Date	--12-31

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 329,857	$ 524,481
Restricted cash	40,207	25,549
Marketable securities, short-term	587,716	79,418
Inventories	33,804	29,668
Prepaid expenses and other current assets	18,576	19,476
Total current assets	1,010,160	678,592
Marketable securities, long-term	164,777	301,463
Property, plant, and equipment, net	49,183	47,498
Other non-current assets	44,356	41,281
Total assets	1,268,476	1,068,834
Current liabilities
Accounts payable	12,768	9,237
Accrued liabilities	36,707	28,787
Customer deposits	104,596	90,863
Other current liabilities	2,803	2,636
Total current liabilities	156,874	131,523
Non-current liabilities
Convertible senior notes, net	414,563	0
Other long-term liabilities	46,464	43,047
Total liabilities	617,901	174,570
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.0001 par value; 10,000,000 authorized; none issued and outstanding	0	0
Common stock, $0.0001 par value; 700,000,000 shares authorized; 258,598,438 and 258,166,417 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	26	26
Additional paid-in capital	1,987,614	2,019,750
Accumulated deficit	(1,327,421)	(1,123,643)
Accumulated other comprehensive income	(9,644)	(1,869)
Total stockholders' equity	650,575	894,264
Total liabilities and stockholders' equity	$ 1,268,476	$ 1,068,834

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	700,000,000	700,000,000
Common stock, shares issued (in shares)	258,690,646	258,166,417
Common stock, shares outstanding (in shares)	258,690,646	258,166,417

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Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Revenue	$ 357	$ 571	$ 676	$ 571
Operating expenses:
Customer experience	122	63	147	63
Selling, general, and administrative	44,700	36,916	81,707	80,235
Research and development	62,340	34,619	114,167	69,708
Depreciation and amortization	2,915	2,871	5,767	5,740
Total operating expenses	110,077	74,469	201,788	155,746
Operating loss	(109,720)	(73,898)	(201,112)	(155,175)
Interest income	1,985	220	2,803	545
Interest expense	(3,157)	(6)	(5,631)	(13)
Change in fair value of warrants	0	(20,363)	0	(69,082)
Other income, net	194	13	210	40
Loss before income taxes	(110,698)	(94,034)	(203,730)	(223,685)
Income tax expense	(23)	(6)	(48)	(49)
Net loss	(110,721)	(94,040)	(203,778)	(223,734)
Other comprehensive income (loss):
Foreign currency translation adjustment	(108)	(19)	(133)	8
Unrealized loss on marketable securities	(1,862)	0	(7,642)	0
Total comprehensive loss	$ (112,691)	$ (94,059)	$ (211,553)	$ (223,726)
Net loss per share:
Basic (in dollars per share)	$ (0.43)	$ (0.39)	$ (0.79)	$ (0.94)
Diluted (in dollars per share)	$ (0.43)	$ (0.39)	$ (0.79)	$ (0.94)
Weighted-average shares outstanding:
Basic (in shares)	258,589,270	240,733,497	258,439,051	238,774,515
Diluted (in shares)	258,589,270	240,733,497	258,439,051	238,774,515

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Condensed Consolidated Statements of Equity - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Dec. 31, 2020		0	236,123,659
Beginning balance at Dec. 31, 2020	$ 527,078	$ 0	$ 23	$ 1,297,794	$ (770,744)	$ 5
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(129,694)				(129,694)
Other comprehensive loss	26					26
Stock-based compensation	22,111			22,111
Issuance of common stock pursuant to stock-based compensation, net of withholding taxes (in shares)			1,150,771
Issuance of common stock pursuant to stock-based compensation, net of withholding taxes	323			323
Ending balance (in shares) at Mar. 31, 2021		0	237,274,430
Ending balance at Mar. 31, 2021	419,844	$ 0	$ 23	1,320,228	(900,438)	31
Beginning balance (in shares) at Dec. 31, 2020		0	236,123,659
Beginning balance at Dec. 31, 2020	527,078	$ 0	$ 23	1,297,794	(770,744)	5
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(223,734)
Ending balance (in shares) at Jun. 30, 2021		0	240,937,540
Ending balance at Jun. 30, 2021	445,223	$ 0	$ 23	1,439,667	(994,478)	11
Beginning balance (in shares) at Mar. 31, 2021		0	237,274,430
Beginning balance at Mar. 31, 2021	419,844	$ 0	$ 23	1,320,228	(900,438)	31
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(94,040)				(94,040)
Other comprehensive loss	(20)					(20)
Stock-based compensation	14,423			14,423
Issuance of common stock pursuant to stock-based compensation, net of withholding taxes (in shares)			275,283
Issuance of common stock pursuant to stock-based compensation, net of withholding taxes	840			840
Common stock issued related to warrants exercised (in shares)			3,387,827
Common stock issued related to warrants exercised	104,176			104,176
Ending balance (in shares) at Jun. 30, 2021		0	240,937,540
Ending balance at Jun. 30, 2021	445,223	$ 0	$ 23	1,439,667	(994,478)	11
Beginning balance (in shares) at Dec. 31, 2021		0	258,166,417
Beginning balance at Dec. 31, 2021	894,264	$ 0	$ 26	2,019,750	(1,123,643)	(1,869)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(93,057)				(93,057)
Other comprehensive loss	(5,805)					(5,805)
Stock-based compensation	10,895			10,895
Issuance of common stock pursuant to stock-based compensation, net of withholding taxes (in shares)			307,471
Issuance of common stock pursuant to stock-based compensation, net of withholding taxes	(1,882)			(1,882)
Purchase of capped calls	(52,318)			(52,318)
Ending balance (in shares) at Mar. 31, 2022		0	258,473,888
Ending balance at Mar. 31, 2022	752,097	$ 0	$ 26	1,976,445	(1,216,700)	(7,674)
Beginning balance (in shares) at Dec. 31, 2021		0	258,166,417
Beginning balance at Dec. 31, 2021	894,264	$ 0	$ 26	2,019,750	(1,123,643)	(1,869)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(203,778)
Ending balance (in shares) at Jun. 30, 2022		0	258,690,646
Ending balance at Jun. 30, 2022	650,575	$ 0	$ 26	1,987,614	(1,327,421)	(9,644)
Beginning balance (in shares) at Mar. 31, 2022		0	258,473,888
Beginning balance at Mar. 31, 2022	752,097	$ 0	$ 26	1,976,445	(1,216,700)	(7,674)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(110,721)				(110,721)
Other comprehensive loss	(1,970)					(1,970)
Stock-based compensation	12,083			12,083
Issuance of common stock pursuant to stock-based compensation, net of withholding taxes (in shares)			216,758
Issuance of common stock pursuant to stock-based compensation, net of withholding taxes	(914)			(914)
Ending balance (in shares) at Jun. 30, 2022		0	258,690,646
Ending balance at Jun. 30, 2022	$ 650,575	$ 0	$ 26	$ 1,987,614	$ (1,327,421)	$ (9,644)

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities
Net loss	$ (110,721)	$ (94,040)	$ (203,778)	$ (223,734)
Stock-based compensation			22,978	36,535
Depreciation and amortization	2,915	2,871	5,767	5,740
Amortization of debt issuance costs			841	0
Change in fair value of warrants	0	20,363	0	69,082
Other operating activities, net			241	(17)
Change in assets and liabilities
Inventories			(4,136)	518
Other current and non-current assets			1,410	319
Accounts payable and accrued liabilities			10,109	(751)
Customer deposits			13,733	(1,252)
Other current and non-current liabilities			(125)	88
Net cash used in operating activities			(152,960)	(113,472)
Cash flows from investing activity
Capital expenditures			(6,293)	(1,647)
Purchases of marketable securities			(379,254)	0
Cash used in investing activity			(385,547)	(1,647)
Cash flows from financing activities
Payments of lease obligations			(66)	(69)
Proceeds from convertible senior notes			425,000	0
Debt issuance costs			(11,278)	0
Capped call premium			(52,318)	0
Proceeds from issuance of common stock pursuant to stock options exercised			49	12,965
Transaction costs			0	(274)
Withholding taxes paid on behalf of employees on net settled stock-based awards			(2,846)	(11,803)
Net cash provided by financing activities			358,541	819
Net decrease in cash and cash equivalents			(179,966)	(114,300)
Cash, cash equivalents and restricted cash at beginning of year			550,030	678,955
Cash, cash equivalents and restricted cash ending balances	370,064	564,655	370,064	564,655
Cash and cash equivalents	329,857	551,624	329,857	551,624
Restricted cash	40,207	13,031	40,207	13,031
Cash, cash equivalents and restricted cash	$ 370,064	$ 564,655	$ 370,064	$ 564,655

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Organization and its wholly owned subsidiaries ("VGH, Inc.")	6 Months Ended
	Jun. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and its wholly owned subsidiaries ("VGH, Inc.")	Organization and its wholly owned subsidiaries ("VGH, Inc.")Virgin Galactic Holdings, Inc. and its wholly owned subsidiaries ("VGH, Inc."), in this report as "we," "us," "our," the "Company" and similar terms, are focused on the development, manufacture and operations of spaceships and related technologies for the purpose of conducting commercial human spaceflight and flying commercial research and development payloads into space. The development and manufacturing activities are located in Tustin, California and Mojave, California, with plans to operate the commercial spaceflights out of Spaceport America located in New Mexico.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting PoliciesBasis of Presentation

These condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). All intercompany transactions and balances between the various legal entities comprising the Company have been eliminated in consolidation.

Certain reclassifications of the components of operating loss for the three and six month period ended June 30, 2021 have been made to the comparable prior period in the condensed consolidated statements of operations and comprehensive loss to conform to the same current period presentations. Specifically, cost of revenue has been reclassified to customer experience, and gross margin is no longer presented. Customer experience expenses related to spaceflight operations include the consumption of a rocket motor and fuel and other consumables, as well as payroll and benefits for our pilots and ground crew. Customer experience expenses related to the payload cargo services, as well as engineering services, consist of materials and human capital, such as payroll and benefits, to perform these services. Additionally, customer experience expenses include costs associated with maintaining and growing our Future Astronaut community, as well as hospitality, medical, safety, security, training, and facility costs that are for the benefit of our astronauts. Additionally, depreciation and amortization expense are presented separately instead of included in selling, general, and administrative or research and development expenses. These reclassifications had no impact on total loss as previously reported.

Use of EstimatesThe preparation of the consolidated financial statements in conformity with GAAP required us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base these estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates. Significant estimates inherent in the preparation of the consolidated financial statements include, but are not limited to, accounting for revenue, contract assets, contract liabilities, useful lives of property, plant and equipment, fair value of investments, accrued liabilities, income taxes including deferred tax assets and liabilities and impairment valuation, warrants, stock-based awards and contingencies.Convertible Senior NotesOn January 1, 2022, the Company adopted ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which removes from GAAP the liability and equity separation model for convertible instruments with either cash or beneficial conversion features. As a result, convertible debt instruments would only be separated into multiple components if they were issued at a substantial premium or if embedded derivatives requiring bifurcation were identified. The convertible senior notes (the "2027 Notes") were not issued at a substantial premium, and the Company analyzed the provisions of the notes and did not identify any material embedded features which would require bifurcation from the host debt. As such, the notes are accounted for entirely as a liability net of unamortized issuance costs. The carrying amount of the liability is classified as long-term as the instrument does not mature within one year of the balance sheet date and the holder is not permitted to demand repayment of the principal within one year of the balance sheet date. However, if conditions to convertibility are met as described further in Note 11, the Company may be required to reclassify the carrying amount of the liability to current. The embedded conversion features are not remeasured as long as they do not meet the separation requirement of a derivative. Issuance costs are amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the term of the notes. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share, however there was no impact during the current quarter as the convertible instruments were anti-dilutive. Capped Call TransactionsIn connection with the pricing of our 2027 Notes, the Company entered into capped call transactions with respect to its common stock (the "2027 Capped Calls"). The 2027 Capped Calls are purchased call options that give the Company the option to purchase, subject to anti-dilution adjustments substantially identical to those in the 2027 Notes. The Company's capped call transactions are accounted for as separate transactions from the 2027 Notes and are classified as equity instruments as a reduction to additional paid-in capital in the condensed consolidated balance sheets. The instruments are initially recorded at fair value and not subsequently remeasured so long as they continue to qualify for equity classification. The capped call transactions have the effect of reducing the number of shares outstanding if exercised. Therefore, the capped call transactions are anti-dilutive and not included in the calculation of diluted shares outstanding for the purposes of diluted net loss per share. See Note 11 in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information on the 2027 Capped Calls.Other Summary of Significant Accounting PoliciesThere have been no other significant changes from the significant accounting policies disclosed in Note 2 of the “Notes to Consolidated Financial Statements” included in the Company's Annual Report on Form 10-K.The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K. Interim results are not necessarily indicative of the results for a full year.

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Recent Accounting Pronouncements	6 Months Ended
	Jun. 30, 2022
Accounting Changes and Error Corrections [Abstract]
Recent Accounting Pronouncements	Recent Accounting PronouncementsChanges to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASU”). See Note 2 in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information on recently adopted accounting pronouncements.

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Related Party Transactions	6 Months Ended
	Jun. 30, 2022
Related Party Transactions [Abstract]
Related Party Transactions	Related Party TransactionsThe Company licenses its brand name from certain entities affiliated with Virgin Enterprises Limited (“VEL”), a company incorporated in England. VEL is an affiliate of the Company. Under the trademark license, the Company has the exclusive right to operate under the brand name “Virgin Galactic” worldwide. Royalty payables, excluding sponsorship royalties, for the use of license are the greater of 1% of revenue or $40,000 per quarter, prior to the commercial launch date. Sponsorship royalties payable are 25% of sponsorship revenue. We paid license and royalty fees of $40,000 for each of the three months ended June 30, 2022 and 2021. We paid license and royalty fees of $80,000 for each of the six months ended June 30, 2022 and 2021.The Company has a Transition Services Agreement ("TSA") with Virgin Orbit, LLC ("VO") based on an allocation methodology that considers our headcount, unless directly attributable to the business. The Company is allocated operating expense from VO Holdings, Inc. and its subsidiaries (“VOH”), a majority owned company of Galactic Ventures, LLC ("GV"), a wholly-owned subsidiary of Vieco 10, was the direct parent of the Virgin Galactic Companies. for operations-related functions based on an allocation methodology that considers our headcount, unless directly attributable to the business. Operating expense allocations include use of machinery and equipment, pilot services, and other general administrative expenses. We were allocated $34,000 and $31,000 operating expenses, net, from VOH for the three months ended June 30, 2022 and 2021, respectively. We were allocated $34,000 and $71,000 of operating expenses, net from VOH for the six months ended June 30, 2022 and 2021, respectively. The Company has a receivable from VOH of $47,000 and $43,000 as of June 30, 2022 and December 31, 2021, respectively.

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Cash, Restricted Cash, Cash Equivalents and Marketable Securities

6 Months Ended

Jun. 30, 2022

Cash and Cash Equivalents [Abstract]

Cash, Restricted Cash, Cash Equivalents and Marketable Securities

Cash, Restricted Cash, Cash Equivalents and Marketable Securities

The amortized cost, unrealized loss and estimated fair value of the Company's cash equivalents and marketable securities as of June 30, 2022 and December 31, 2021 were as follows:

	As of June 30, 2022
	Amortized Cost		Gross Unrealized Losses		Fair Value
	(In thousands)
Cash, restricted cash and cash equivalents
Cash and restricted cash	$	71,797	$	—	$	71,797
Money market	206,870		—		206,870
Certificate of deposits	91,397		—		91,397
Marketable securities
US treasuries	209,596		(345)		209,251
Corporate debt securities	552,541		(9,299)		543,242
Total cash, cash equivalents and marketable securities	$	1,132,201	$	(9,644)	$	1,122,557

	As of December 31, 2021
	Amortized Cost		Gross Unrealized Losses		Fair Value
	(In thousands)
Cash, restricted cash and cash equivalents
Cash and restricted cash	$	55,592	$	—	$	55,592
Money market	402,889		—		402,889
Certificate of deposits	91,549		—		91,549
Marketable securities
Corporate debt securities	382,884		(2,003)		380,881
Total cash, cash equivalents and marketable securities	$	932,914	$	(2,003)	$	930,911

The Company included $3.6 million and $2.3 million of interest receivable in prepaid expenses and other current assets as of June 30, 2022 and December 31, 2021, respectively.

The Company recognized $1.8 million in amortization and accretion of purchase premiums and discounts on our marketable securities within interest income, net for the three months ended June 30, 2022. The Company did not recognize any amortization expense for the three months ended June 30, 2021. The Company recognized $4.0 million in amortization expense for marketable securities within interest income, net for the six months ended June 30, 2022. The Company did not recognize any amortization expense for the six months ended June 30, 2021.

We record gross realized gains and losses as a component of other income, net in the consolidated statements of operations. For the three months ended June 30, 2022 and June 2021, the Company did not recognize any material gross realized gains and losses. For the six months ended June 30, 2022, the Company recognized $0.1 million loss in other income, net. For the six months ended June 30, 2021, the Company did not recognize any material gross realized gains and losses.

The following table presents the contractual maturities of the Company's marketable securities as of June 30, 2022:

	As of June 30, 2022
	Amortized Cost		Estimated Fair Value
	(In thousands)
Matures within one year	$	592,992	$	587,716
Matures between one to two years	169,145		164,776
Total	$	762,137	$	752,492

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Inventory

6 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Inventory

InventoryAs of June 30, 2022 and December 31, 2021, inventory is comprised of the following:

	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
Raw materials	$	24,651	$	21,127
Spare parts	9,153		8,541
Total inventory	$	33,804	$	29,668

For the three months and six months ended June 30, 2022 and 2021, we did not have any material write-offs of inventory due to excess and obsolescence.

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Property, Plant, and Equipment, net

6 Months Ended

Jun. 30, 2022

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, net

Property, Plant, and Equipment, net

As of June 30, 2022 and December 31, 2021, property, plant, and equipment, net consisted of the following:

		As of
		June 30, 2022		December 31, 2021
		(Unaudited)
	(In thousands)
Land		$	401	$	—
Buildings		9,117		9,117
Leasehold improvements		29,306		29,155
Aircraft		195		195
Machinery and equipment		39,718		37,002
IT software and equipment		26,719		23,523
Construction in progress		3,816		2,901
		109,272		101,893
Less accumulated depreciation and amortization		(60,089)		(54,395)
Property, plant, and equipment, net		$	49,183	$	47,498

The following table sets forth the summary of depreciation and amortization expense for property, plant and equipment, net:

		Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021
		(Unaudited)
	(In thousands)
Customer experience		$	—	$	—	$	—	$	—
Selling, general, and administrative		1,667		1,284		3,266		2,558
Research and development		1,248		1,587		2,502		3,182
		$	2,915	$	2,871	$	5,767	$	5,740

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Leases

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

Leases

The Company's leases are more fully described in Note 8 of the "Notes to Consolidated Financial Statements" to its Annual Report on Form 10-K.

The components of lease expense related to leases for the periods presented below are as follows:

	Three Months Ended June 30,
	2022		2021
	(Unaudited and in thousands)
Lease Cost:
Operating lease expense	$	2,092	$	1,254
Short-term lease expense	—		8
Finance Lease Cost:
Amortization of right-of-use assets	29		35
Interest on lease liabilities	4		7
Total finance lease cost	33		42
Variable lease cost	2,106		1,372
Total lease cost	$	4,231	$	2,676

	Six Months Ended June 30,
	2022		2021
	(Unaudited and in thousands)
Lease Cost:
Operating lease expense	$	4,069	$	2,514
Short-term lease expense	—		20
Finance Lease Cost:
Amortization of right-of-use assets	58		69
Interest on lease liabilities	9		14
Total finance lease cost	67		83
Variable lease cost	3,316		2,710
Total lease cost	$	7,452	$	5,327

The components of supplemental cash flow information related to leases for the period are as follows:

	Six Months Ended June 30,
	2022			2021
	(In thousands, except term and rate data)
Cash flow information:
Operating cash flows for operating leases	$	5,087		$	2,712
Operating cash flows for finance leases	$	9		$	14
Financing cash flows for finance leases	$	66		$	69
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	4,924		$	501
Finance Leases	$	—		$	19
Other Information:
Weighted average remaining lease term:
Operating leases (in years)	11.18			12.37
Finance leases (in years)	1.71			2.49
Weighted average discount rates:
Operating leases	11.68		%	11.65		%
Finance leases	8.12		%	8.26		%

The supplemental balance sheet information related to leases for the period is as follows:

	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
Operating leases
Long-term right-of-use assets	$	38,776	$	35,486
Short-term operating lease liabilities	$	2,384	$	2,204
Long-term operating lease liabilities	43,509		39,965
Total operating lease liabilities	$	45,893	$	42,169

Commitments

The Company has certain non-cancelable operating leases primarily for its premises. These leases generally contain renewal options for periods ranging from 3 to 20 years and require the Company to pay all executory costs, such as maintenance and insurance. Certain lease arrangements have rent free periods or escalating payment provisions, and we recognize rent expense of such arrangements on a straight line basis.

Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum finance lease payments as of June 30, 2022 are as follows:

	Operating Leases		Finance Leases
	(In thousands)
2022 (for the remaining period)	$	3,580	$	62
2023	7,079		106
2024	7,357		30
2025	7,282		—
2026	7,386		—
Thereafter	52,274		—
Total lease payments	$	84,958	$	198
Less:
Imputed interest/present value discount	$	(39,065)	$	(13)
Present value of lease liabilities	$	45,893	$	185

Leases

Leases

The Company's leases are more fully described in Note 8 of the "Notes to Consolidated Financial Statements" to its Annual Report on Form 10-K.

The components of lease expense related to leases for the periods presented below are as follows:

	Three Months Ended June 30,
	2022		2021
	(Unaudited and in thousands)
Lease Cost:
Operating lease expense	$	2,092	$	1,254
Short-term lease expense	—		8
Finance Lease Cost:
Amortization of right-of-use assets	29		35
Interest on lease liabilities	4		7
Total finance lease cost	33		42
Variable lease cost	2,106		1,372
Total lease cost	$	4,231	$	2,676

	Six Months Ended June 30,
	2022		2021
	(Unaudited and in thousands)
Lease Cost:
Operating lease expense	$	4,069	$	2,514
Short-term lease expense	—		20
Finance Lease Cost:
Amortization of right-of-use assets	58		69
Interest on lease liabilities	9		14
Total finance lease cost	67		83
Variable lease cost	3,316		2,710
Total lease cost	$	7,452	$	5,327

The components of supplemental cash flow information related to leases for the period are as follows:

	Six Months Ended June 30,
	2022			2021
	(In thousands, except term and rate data)
Cash flow information:
Operating cash flows for operating leases	$	5,087		$	2,712
Operating cash flows for finance leases	$	9		$	14
Financing cash flows for finance leases	$	66		$	69
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	4,924		$	501
Finance Leases	$	—		$	19
Other Information:
Weighted average remaining lease term:
Operating leases (in years)	11.18			12.37
Finance leases (in years)	1.71			2.49
Weighted average discount rates:
Operating leases	11.68		%	11.65		%
Finance leases	8.12		%	8.26		%

The supplemental balance sheet information related to leases for the period is as follows:

	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
Operating leases
Long-term right-of-use assets	$	38,776	$	35,486
Short-term operating lease liabilities	$	2,384	$	2,204
Long-term operating lease liabilities	43,509		39,965
Total operating lease liabilities	$	45,893	$	42,169

Commitments

The Company has certain non-cancelable operating leases primarily for its premises. These leases generally contain renewal options for periods ranging from 3 to 20 years and require the Company to pay all executory costs, such as maintenance and insurance. Certain lease arrangements have rent free periods or escalating payment provisions, and we recognize rent expense of such arrangements on a straight line basis.

Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum finance lease payments as of June 30, 2022 are as follows:

	Operating Leases		Finance Leases
	(In thousands)
2022 (for the remaining period)	$	3,580	$	62
2023	7,079		106
2024	7,357		30
2025	7,282		—
2026	7,386		—
Thereafter	52,274		—
Total lease payments	$	84,958	$	198
Less:
Imputed interest/present value discount	$	(39,065)	$	(13)
Present value of lease liabilities	$	45,893	$	185

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Accrued Expenses

6 Months Ended

Jun. 30, 2022

Payables and Accruals [Abstract]

Accrued Expenses

Accrued Expenses

A summary of the components of accrued liabilities are as follows:

	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
Accrued payroll	$	3,447	$	4,214
Accrued vacation	6,218		5,372
Accrued bonus	10,433		12,218
Accrued interest expense	4,781		—
Other accrued expenses	11,828		6,983
Total accrued expenses	$	36,707	$	28,787

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Commercial Loan

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Commercial Loan

Commercial Loan

	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
Commercial loan	$	310	$	310
Less: Current portion	(310)		(310)
Non-current portion	$	—	$	—

On June 18, 2020, we financed the purchase of software licenses through a loan totaling approximately $0.9 million. The loan amortized in three equal annual installments of approximately $0.3 million with the final payment due on October 1, 2022 with 0% interest rate. The loan is secured by a standby letter of credit issued from our financial institution and restricted cash has been recorded for the corresponding outstanding balance. The outstanding balance is recorded in other current-liabilities on the condensed consolidated balance sheets.

The imputed interest of this loan was immaterial.

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Convertible Senior Notes

6 Months Ended

Jun. 30, 2022

Convertible Debt [Abstract]

Convertible Senior Notes

Convertible Senior Notes

2027 Convertible Senior Notes

On January 19, 2022, the Company completed an offering of $425 million aggregate principal amount of the 2027 Notes. The 2027 Notes are senior, unsecured obligations of the Company, and bear interest at a fixed rate of 2.50% per year. Interest is payable in cash semi-annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2022. The 2027 Notes mature on February 1, 2027 unless earlier repurchased, redeemed or converted.

The terms of the 2027 Notes are governed by an Indenture by and between the Company and U.S. Bank National Associations, as Trustee (the "2027 Indenture"). Upon conversion by the noteholders, the 2027 Notes may be settled in cash, shares of the Company's common stock or a combination of cash and shares of common stock, par value $0.0001 per share (the “common stock”), at our election, based on the conversion rate.

The 2027 Notes are convertible at an initial conversion rate of 78.1968 shares of common stock per $1,000 principal amount of the 2027 Notes, which is equal to an initial conversion price of approximately $12.79 per share of common stock, subject to adjustment upon the occurrence of certain events. Noteholders will have the right to convert their notes during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on June 30, 2022, under the following circumstances:

•during any calendar quarter after June 30, 2022 (and only during such calendar quarter) if the last reported sale price of the Company's common stock for each of at least 20 trading days in a period of 30 consecutive trading days ending on and including the last trading day of the preceding calendar quarter is more than 130% of the then applicable conversion price for the Notes per share of common stock;

•during the five consecutive business days immediately after any ten consecutive trading day period in which the trading price per $1,000 principal amount of 2027 Notes for each day of that period was less than 98% of the product of the last reported sale price of our common stock and the then applicable conversion rate;

•the Company calls any or all of the 2027 Notes for redemption, holders may convert all or any portion of their notes at any time prior to the close of business on the scheduled trading day prior to the redemption date, even if the 2027 Notes are not otherwise convertible at such time; or

•specified distributions to holders of our common stock are made or specified corporate events occur, as described in the 2027 Indenture.

On and after November 1, 2026, noteholders will have the right to convert their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will have the right to elect to settle conversions in cash, in shares of its common stock or in a combination of cash and shares of its common stock. During the three and six months ended June 30, 2022, the conditions allowing holders of the 2027 Notes to convert were not met, and as a result, the 2027 Notes were classified as noncurrent liabilities as of June 30, 2022.

The 2027 Notes will be redeemable, in whole or in part (subject to certain limitations), for cash at the Company's option at any time, and from time to time, on or after February 6, 2025 and on or before the 20th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the Company's common stock exceeds 130% of the conversion price for a specified period of time and certain liquidity conditions have been satisfied. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. During the three and six months ended June 30, 2022, the Company did not redeem any of the 2027 Notes.

Holders of the 2027 Notes who convert their 2027 Notes in connection with certain corporate events that constitute a make-whole fundamental change (as defined in the 2027 Indenture) or in connection with the Company's issuance of a redemption notice are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a corporate event that constitutes a fundamental change (as defined in the 2027 Indenture), holders of the 2027 Notes may require the Company to repurchase all or a portion of their 2027 Notes at a price equal to the principal amount of the 2027 Notes being repurchased, plus any accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

The 2027 Notes, net consisted of the following (in thousands):

	As of
	June 30, 2022
	(Unaudited)
Principal	$	425,000
Less: unamortized debt issuance costs	(10,437)
Net carrying amount	$	414,563

As of June 30, 2022, we recorded $4.8 million of accrued interest expense on our 2027 Notes within accrued expenses. For the three months ended June 30, 2022, we recognized $3.2 million of total interest expense on our 2027 Notes, including $0.4 million of amortized debt issuance costs. For the six months ended June 30, 2022, we recognized $5.6 million of total interest expense on our 2027 Notes, including $0.8 million of amortized debt issuance cost.

Capped Call Transactions

In connection with the pricing of the 2027 Notes, the Company entered into capped call transactions with respect to its common stock. The 2027 Capped Calls are purchased call options that give the Company the option to purchase, subject to anti-dilution adjustments substantially identical to those in the 2027 Notes, approximately 33 million shares of its common stock for approximately $12.79 per share (subject to adjustment), corresponding to the approximate initial conversion price of the 2027 Notes, exercisable upon conversion of the 2027 Notes. The 2027 Capped Calls have initial cap prices of $20.06 per share (subject to adjustment), which represents a premium of 100% over the closing price of the Company's common stock on January 13, 2022, and will expire in 2027, if not exercised earlier. The 2027 Capped Calls are intended to reduce potential dilution to the Company's common stock upon any conversion of the 2027 Notes and/or offset the potential cash payments that the Company could be required to make in excess of the principal amount upon any conversion of the 2027 Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the 2027 Capped Call transactions. The 2027 Capped Calls are separate transactions, each between the Company and the applicable option counterparty, and are not part of the terms of the 2027 Notes and will not affect any holder's rights under the 2027 Notes or the 2027 Indenture. Holders of the 2027 Notes will not have any rights with respect to the 2027 Capped Call transactions.

The Company paid an aggregate amount of $52.3 million for the 2027 Capped Calls. As these transactions meet certain accounting criteria, the amount paid for the 2027 Capped Calls was recorded as a reduction to additional paid-in capital in the condensed consolidated balance sheets. The fair value of the 2027 Capped Calls is not remeasured each reporting period so long as they continue to qualify for equity classification, which they did for the current period.

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Income Taxes	6 Months Ended
	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesIncome tax expense was $23,000 and $6,000 for the three months ended June 30, 2022 and 2021, respectively. Income tax expense was $48,000 and $49,000 for the six months ended June 30, 2022 and 2021, respectively. The effective income tax rate was nil for three months ended June 30, 2022 and 2021. The effective income tax rate was nil for six months ended June 30, 2022 and 2021. Our effective tax rate differs from the U.S. statutory rate primarily due to a substantially full valuation allowance against our net deferred tax assets where it is more likely than not that some or all of the deferred tax assets will not be realized.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Stockholders' Equity

Stockholders' Equity

There have been no significant changes from the Stockholders' Equity disclosed in Note 12 of the “Stockholders Equity” included in our Annual Report on Form 10-K.

Stockholders' Agreement

In connection with the closing of the Virgin Galactic business combination in October 2019 (the "Business Combination"), the Company entered into a stockholders’ agreement with certain of the Company’s investors. Pursuant to the terms of the Stockholders’ Agreement, as long as Virgin Investments Limited ("VIL") is entitled to designate two directors to the Company’s Board of Directors, the Company must obtain VIL’s prior written consent to engage in certain corporate transactions and management functions such as business combinations, disposals, acquisitions, incurring indebtedness, and engagement of professional advisors, among others.

Warrants and Warrant Redemption

Public and private placement warrants were initially issued as part of Social Capital Hedosophia Holdings Corp.'s ("SCH") initial public offering in 2017 and assumed upon the consumption of the Business Combination. As of June 30, 2022, and December 31, 2021, there were no public or private placement warrants outstanding.

The Company remeasured the fair value of the Warrants at each reporting date with changes recorded in earnings. In connection with the Company's remeasurement of the Warrants to fair value, the Company recorded expense of approximately $20.4 million for the three months ended June 30, 2021 and $69.1 million for the six months ended June 30, 2021.

At The Market Offering

On July 12, 2021, the Company entered into a distribution agency agreement with Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC (each, an “Agent” and collectively, the “Agents”) providing for the offer and sale of up to $500.0 million of shares of the Company’s common stock, par value $0.0001 per share, through an "at the market offering" program ("ATM"), from time to time by the Company through the Agents, acting as the Company’s sales agents, or directly to one or more of the Agents, acting as principal.

On July 16, 2021, we completed the ATM, generating $500.0 million in gross proceeds, before deducting $6.2 million in underwriting discounts and commissions, and other expenses payable by the Company, through the sale of 13,740,433 shares of common stock.

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Net Loss Per Share

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Net Loss Per Share

Net Loss Per Share

The following table presents net loss per share and related information:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands, except for share and per share data)
Basic and diluted:
Net loss	$	(110,721)	$	(94,040)	$	(203,778)	$	(223,734)
Weighted average shares of common stock outstanding	258,589,270		240,733,497		258,439,051		238,774,515
Basic and diluted net loss per share	$	(0.43)	$	(0.39)	$	(0.79)	$	(0.94)

Basic and diluted loss per share is computed using the weighted-average number of common shares of common stock outstanding during the period. Basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive were as follows (in thousands):

	As of June 30,
	2022	2021
Issued and outstanding stock options	4,156	5,194
Issued and outstanding performance stock options	406	—
Unvested restricted stock units issued and outstanding	4,488	4,018
Unvested performance stock units issued and outstanding	367	85
Shares related to the 2027 Notes (1)	33,234	—
Warrants to purchase shares of common stock	—	8,000
	42,651	17,297

(1) The Company uses the if-converted method for calculating any potential dilutive effect of the conversion options embedded in the 2027 Notes on diluted net loss per share, if applicable.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company's 2019 Incentive Award Plan ("2019 Plan") is more fully described in Note 14 of the "Notes to Consolidated Financial Statements" on Form 10-K. Under the 2019 Plan, the Company has the ability to grant incentive stock options, non-qualified stock options and restricted stock units ("RSUs") to employees, directors and other service providers. Performance stock units ("PSUs") are RSUs that vest based on achievement of specified performance criteria. Performance stock options ("PSOs") are stock options that vest based on achievement of specified performance criteria.

Stock Options

Twenty five percent of such stock options cliff vest at the grant date first anniversary, with the remaining options vesting ratably over the following three years, subject to continued employment on each vesting date. Vested options will be exercisable at any time until ten years from the grant date, subject to earlier expiration under certain terminations of service and other conditions. The stock options granted have an exercise price equal to the closing stock price of our common stock on the grant date.

In 2022, we issued stock options as incentive compensation for certain key employees. The fair values of these stock options were estimated using a Black-Scholes model with the following assumptions:

	2022
Expected life (in years)(1)	6.11
Expected volatility(2)	69.0	%
Risk free interest rate(3)	2.19	%
Dividend yield(4)	—	%

(1) The expected life is the period of time that participants are expected to hold their options before exercised using the "simplified method" as described in Staff Accounting Bulletin No. 107.

(2) The expected volatility is a measure of the amount by which a stock price is expected to fluctuate based primarily on our and our peers' historical data.

(3) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(4) The Company does not currently pay dividends nor has announced plans to begin paying dividends.

The following table sets forth the summary of options activity for the six month ended June 30, 2022 under the 2019 Plan (dollars in thousands except per share data):

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value(1)	Weighted Average Grant Date Fair Value ($)
Options outstanding at December 31, 2021	4,253,767	$	14.09	7.60	6,187	—
Granted	303,030	7.99				4.95
Exercised	(4,182)	11.79
Forfeited options	(396,160)	18.21
Options outstanding at June 30, 2022	4,156,455	$	13.26	7.06	—	—
Options exercisable at June 30, 2022	2,182,805	$	12.99	6.67	—	—

(1) Aggregate intrinsic value is calculated based on the difference between our closing stock price at period end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised all their options on the period end date.

Performance Stock Options

Compensation expense on the PSOs will be recognized over the period between the grant date and the estimated vest date. The number of PSOs that will vest depends on the attainment of certain stock price goals. Vested options will be exercisable at any time until ten years from the grant date, subject to earlier expiration under certain terminations of service and other conditions. The stock options granted have an exercise price equal to the closing stock price of our common stock on the grant date.

In 2022, we issued PSOs as incentive compensation for certain key employees. The fair values of these stock options were estimated using a Monte-Carlo simulation with the following assumptions:

	2022
Expected exercise behavior(1)	75.0	%
Expected Volatility(2)	58.0	%
Risk free interest rate(3)	2.19	%
Dividend yield(4)	—	%

(1) PSOs are expected to be exercised after 75% of the period between the vest date and the end of the contractual term has lapsed.

(2) The expected volatility is a measure of the amount by which a stock price is expected to fluctuate based primarily on our and our peers' historical data.

(3) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(4) The Company does not currently pay dividends nor has announced plans to begin paying dividends.

The following table sets forth the summary of PSO activity under the 2019 Plan (dollars in thousands except per share data):

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value(1)	Weighted Average Grant Date Fair Value ($)
PSOs outstanding at December 31, 2021	—	$	—	0.00	—
Granted	405,680	8.99				4.93
Exercised	—	—
Forfeited options	—	—
PSOs outstanding at June 30, 2022	405,680	$	8.99	9.71	—
PSOs exercisable at s June 30, 2022	—	$	—	0.00	—

(1) Aggregate intrinsic value is calculated based on the difference between our closing stock price at period end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised all their options on the period end date.

Restricted Stock Units

The RSUs vest over four years with 25% cliff vest at the first year anniversary of the grant date, with the remaining vesting ratably over the next three years.

The following table sets forth the summary of RSUs activity during the six months ended June 30, 2022 under the 2019 Plan (dollars in thousands except per share data):

	Shares	Weighted Average Fair Value
Outstanding at December 31, 2021	2,396,732	$	27.89
Granted	3,215,868	8.75
Vested	(846,876)	21.36
Forfeited	(278,134)	18.59
Outstanding at June 30, 2022	4,487,590	$	21.91

Performance Stock Units

Between 25% and 200% of the PSUs are eligible to vest based on the achievement of certain performance-based goals or market-based goals by specified target dates, subject to continued service through the applicable vesting date. PSUs with performance-based goals are amortized over the requisite service period in which it is probable that the performance goal is achieved. PSUs with market-based goals will vest based on the Company's common stock performance following the end of the three year performance measurement period based on the highest closing price over twenty consecutive trading days during the performance measurement period. PSUs with market-based goals cannot vest before the end of the performance measurement period, thus the requisite service period is three years.

In 2022, we issued PSUs as incentive compensation for certain key employees. The fair values of these stock units were estimated using a Monte-Carlo simulation with the following assumptions:

	2022
Expected volatility(1)	95.0	%
Risk free interest rate(2)	2.13	%
Dividend yield(3)	—	%

(1) The expected volatility is a measure of the amount by which a stock price is expected to fluctuate based primarily on our and our peers' historical data.

(2) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(3) The Company does not currently pay dividends nor has announced plans to begin paying dividends.

The following table sets forth the summary of PSUs activity under the 2019 Plan (dollars in thousands except per share data):

	Shares	Weighted Average Fair Value
PSUs outstanding at December 31, 2021	89,839	$	26.47
Granted	277,552	14.62
Forfeited	—	—
PSUs outstanding at June 30, 2022	367,391	$	18.19

Stock-based compensation expense was recorded in the following expense categories in the condensed consolidated statements of operations and comprehensive loss:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Stock option and PSO expense
Selling, general and administrative	2,192		1,870		3,917		10,856
Research and development	731		825		1,416		1,668
Total stock option and PSO expense	2,923		2,695		5,333		12,524
RSU and PSU expense
Selling, general and administrative	6,458		8,556		12,025		17,609
Research and development	2,702		3,172		5,620		6,402
Total RSU and PSU expense	9,160		11,728		17,645		24,011
Total stock-based compensation expense	$	12,083	$	14,423	$	22,978	$	36,535

As of June 30, 2022, the unrecognized stock-based compensation related to stock options and PSOs was $20.3 million, and is expected to be recognized over a weighted-average period of 1.9 years. At June 30, 2022, the unrecognized stock-based compensation related to RSUs and PSUs was $93.8 million, and is expected to be recognized over a weighted-average period of 2.8 years.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. We estimate fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which is categorized in one of the following levels:

•Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the

reporting entity at the measurement date;

•Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability; and

•Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

The carrying amounts included in the Condensed Consolidated Balance Sheets under current assets and current liabilities approximate fair value because of the short maturity of these instruments.

The following tables summarize the fair value of assets that are recorded in the Company’s Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 at fair value on a recurring basis:

Fair Value Measurements as of June 30, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Money market	$	206,870	$	—	$	—	$	206,870
Certificate of deposit	91,397		—		—		91,397
US treasuries	209,251		—		—		209,251
Corporate debt securities	—		543,242		—		543,242
Total assets at fair value	$	507,518	$	543,242	$	—	$	1,050,760
Liabilities:
2027 Notes	$	—	$	—	$	271,201	$	271,201
Total liabilities at fair value	$	—	$	—	$	271,201	$	271,201

The estimated fair value of the 2027 Notes were determined based on the quoted bid prices of the 2027 Notes in an over-the-counter market on the last trading day of the reporting period.

Fair Value Measurements as of December 31, 2021
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Money Market	$	402,889	$	—	$	—	$	402,889
Certificate of Deposit	91,549		—		—		91,549
Corporate debt securities	—		380,881		—		380,881
Total assets at fair value	$	494,438	$	380,881	$	—	$	875,319

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. The Company applies accounting for contingencies to determine when and how much to accrue for and disclose related to legal and other contingencies. Accordingly, the Company discloses contingencies deemed to be reasonably possible and accrues loss contingencies when, in consultation with legal advisors, it is concluded that a loss is probable and reasonably estimable. Although the ultimate aggregate amount of monetary liability or financial impact with respect to these matters is subject to many uncertainties and is therefore not predictable with assurance, management believes that any monetary liability or financial impact to the Company from these matters, individually and in the aggregate, beyond that provided at June 30, 2022, would not be material to the Company’s financial position, results of operations or cash flows. However, there can be no assurance with respect to such result, and monetary liability or financial impact to the Company from legal proceedings, lawsuits and other claims could differ materially from those projected.

Lavin v. the Company

On May 28, 2021, a class action complaint was filed against us in the Eastern District of New York captioned Lavin v. Virgin Galactic Holdings, Inc., Case No. 1:21-cv-03070. In September 2021, the Court appointed Robert Scheele and Mark Kusnier as co-lead plaintiffs for the purported class. Co-lead plaintiffs amended the complaint in December 2021, asserting violations of Sections 10(b), 20(a) and 20A of the Exchange Act of 1934 against us and certain of our current and former officers and directors on behalf of a putative class of investors who purchased our common stock between July 10, 2019 and October 14, 2021. The amended complaint alleges, among other things, that we and certain of our current and former officers and directors made false and misleading statements and failed to disclose certain information regarding the safety of its ships and success of its commercial flight program. Co-lead plaintiffs seek damages, interest, costs, expenses, attorneys' fees, and other unspecified equitable relief. Defendants filed a motion to dismiss on April 4, 2022, and that motion is now fully briefed. The Company intends to vigorously defend against this matter.

Spiteri and Grenier, derivatively on behalf of the Company vs. Certain Current and Former Officers and Directors

On February 21, 2022 and March 1, 2022, two alleged shareholders filed separate derivative complaints purportedly on behalf of the Company against certain of our current and former officers and directors in the Eastern District of New York captioned Spiteri v. Branson et al., Case No. 1:22-cv-00933, and Grenier v. Branson et al., Case No. 1:22-cv-01100, respectively. The complaints assert violations of Sections 10(b), 14(a), and 21D of the Exchange Act of 1934 and claims of breach of fiduciary duty, aiding and abetting breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets, and unjust enrichment arising from substantially similar allegations as those contained in the securities class action described above. The complaints seek an unspecified sum of damages, interest, restitution, expenses, attorneys’ fees and other equitable relief. The cases are at a preliminary stage.

Shareholder Litigation Demand

On April 4, 2022, the Company received a litigation demand from an alleged shareholder requesting that the Company take legal action against certain of our current and former officers and directors for breach of fiduciary duty and insider trading arising from substantially similar allegations as those contained in the securities class action described above. The Company is evaluating the litigation demand.

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Employee Benefit Plan	6 Months Ended
	Jun. 30, 2022
Retirement Benefits [Abstract]
Employee Benefit Plan	Employee Benefit PlanThe Company has defined contribution plans, under which the Company pays fixed contributions into a separate entity, and additional contributions to the plans are based upon a percentage of the employees’ elected contributions. The Company will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognized within selling, general, and administrative expenses and research and development in the Condensed Consolidated Statements of Operations and Comprehensive Loss, as incurred. Defined contributions were $1.1 million and $1.5 million for the three months ended June 30, 2022 and 2021, respectively. Defined contributions were $2.6 million and $2.6 million for the six months ended June 30, 2022 and 2021, respectively.

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Supplemental Cash Flow Information

6 Months Ended

Jun. 30, 2022

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

Supplemental Cash Flow Information

	Six Months Ended June 30,
	2022		2021
	(in thousands)
Supplemental disclosure
Cash payments and refunds for:
Income tax refund	$	10	$	—
Income tax paid	(53)		(58)
	$	(43)	$	(58)
Schedule for noncash investing activities:
Unpaid property, plant, and equipment received	$	1,343	$	270
	$	1,343	$	270
Schedule for noncash financing activities:
Issuance of common stock "cashless" warrants exercised	$	—	$	104,176
Issuance of common stock through restricted stock units vested	7,440		27,320
Unpaid deferred transaction costs	—		250
	$	7,440	$	131,746

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Subsequent Events

6 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

As of July 30, 2022, we have one subsequent events as noted below.

Arizona Lease Agreement

On July 14, 2022, the Company entered into an agreement to lease 151,096 square feet of manufacturing and operations facilities in Mesa, Arizona consisting of two hangars ("Hangar C" and "Hangar B").

The lease has an initial term of approximately ten years and five months after the commencement date applicable to Hangar C or Hangar B, whichever is later, and is expected to commence ten months following the date of the agreement was entered into with respect to Hangar C and fifteen months following the date of the agreement was entered into for Hangar B. The average annual base rent under the lease is approximately $3.0 million. The Company has four options to extend the term of the lease, each for an additional five years.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

These condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). All intercompany transactions and balances between the various legal entities comprising the Company have been eliminated in consolidation.

Certain reclassifications of the components of operating loss for the three and six month period ended June 30, 2021 have been made to the comparable prior period in the condensed consolidated statements of operations and comprehensive loss to conform to the same current period presentations. Specifically, cost of revenue has been reclassified to customer experience, and gross margin is no longer presented. Customer experience expenses related to spaceflight operations include the consumption of a rocket motor and fuel and other consumables, as well as payroll and benefits for our pilots and ground crew. Customer experience expenses related to the payload cargo services, as well as engineering services, consist of materials and human capital, such as payroll and benefits, to perform these services. Additionally, customer experience expenses include costs associated with maintaining and growing our Future Astronaut community, as well as hospitality, medical, safety, security, training, and facility costs that are for the benefit of our astronauts. Additionally, depreciation and amortization expense are presented separately instead of included in selling, general, and administrative or research and development expenses. These reclassifications had no impact on total loss as previously reported.

Use of Estimates

Use of EstimatesThe preparation of the consolidated financial statements in conformity with GAAP required us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base these estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates. Significant estimates inherent in the preparation of the consolidated financial statements include, but are not limited to, accounting for revenue, contract assets, contract liabilities, useful lives of property, plant and equipment, fair value of investments, accrued liabilities, income taxes including deferred tax assets and liabilities and impairment valuation, warrants, stock-based awards and contingencies.

Convertible Senior Notes

Convertible Senior NotesOn January 1, 2022, the Company adopted ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which removes from GAAP the liability and equity separation model for convertible instruments with either cash or beneficial conversion features. As a result, convertible debt instruments would only be separated into multiple components if they were issued at a substantial premium or if embedded derivatives requiring bifurcation were identified. The convertible senior notes (the "2027 Notes") were not issued at a substantial premium, and the Company analyzed the provisions of the notes and did not identify any material embedded features which would require bifurcation from the host debt. As such, the notes are accounted for entirely as a liability net of unamortized issuance costs. The carrying amount of the liability is classified as long-term as the instrument does not mature within one year of the balance sheet date and the holder is not permitted to demand repayment of the principal within one year of the balance sheet date. However, if conditions to convertibility are met as described further in Note 11, the Company may be required to reclassify the carrying amount of the liability to current. The embedded conversion features are not remeasured as long as they do not meet the separation requirement of a derivative. Issuance costs are amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the term of the notes. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share, however there was no impact during the current quarter as the convertible instruments were anti-dilutive.

Capped Call Transactions

Capped Call TransactionsIn connection with the pricing of our 2027 Notes, the Company entered into capped call transactions with respect to its common stock (the "2027 Capped Calls"). The 2027 Capped Calls are purchased call options that give the Company the option to purchase, subject to anti-dilution adjustments substantially identical to those in the 2027 Notes. The Company's capped call transactions are accounted for as separate transactions from the 2027 Notes and are classified as equity instruments as a reduction to additional paid-in capital in the condensed consolidated balance sheets. The instruments are initially recorded at fair value and not subsequently remeasured so long as they continue to qualify for equity classification. The capped call transactions have the effect of reducing the number of shares outstanding if exercised. Therefore, the capped call transactions are anti-dilutive and not included in the calculation of diluted shares outstanding for the purposes of diluted net loss per share. See Note 11 in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information on the 2027 Capped Calls.

Other Summary Of Significant Accounting Policies

Other Summary of Significant Accounting PoliciesThere have been no other significant changes from the significant accounting policies disclosed in Note 2 of the “Notes to Consolidated Financial Statements” included in the Company's Annual Report on Form 10-K.The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K. Interim results are not necessarily indicative of the results for a full year.

Recent Accounting Pronouncements

Recent Accounting PronouncementsChanges to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASU”). See Note 2 in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information on recently adopted accounting pronouncements.

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Cash, Restricted Cash, Cash Equivalents and Marketable Securities (Tables)

6 Months Ended

Jun. 30, 2022

Cash and Cash Equivalents [Abstract]

Schedule of Marketable Securities

The amortized cost, unrealized loss and estimated fair value of the Company's cash equivalents and marketable securities as of June 30, 2022 and December 31, 2021 were as follows:

	As of June 30, 2022
	Amortized Cost		Gross Unrealized Losses		Fair Value
	(In thousands)
Cash, restricted cash and cash equivalents
Cash and restricted cash	$	71,797	$	—	$	71,797
Money market	206,870		—		206,870
Certificate of deposits	91,397		—		91,397
Marketable securities
US treasuries	209,596		(345)		209,251
Corporate debt securities	552,541		(9,299)		543,242
Total cash, cash equivalents and marketable securities	$	1,132,201	$	(9,644)	$	1,122,557

	As of December 31, 2021
	Amortized Cost		Gross Unrealized Losses		Fair Value
	(In thousands)
Cash, restricted cash and cash equivalents
Cash and restricted cash	$	55,592	$	—	$	55,592
Money market	402,889		—		402,889
Certificate of deposits	91,549		—		91,549
Marketable securities
Corporate debt securities	382,884		(2,003)		380,881
Total cash, cash equivalents and marketable securities	$	932,914	$	(2,003)	$	930,911

Schedule of Contractual Maturities

The following table presents the contractual maturities of the Company's marketable securities as of June 30, 2022:

	As of June 30, 2022
	Amortized Cost		Estimated Fair Value
	(In thousands)
Matures within one year	$	592,992	$	587,716
Matures between one to two years	169,145		164,776
Total	$	762,137	$	752,492

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Inventory (Tables)

6 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Schedule of Inventory

As of June 30, 2022 and December 31, 2021, inventory is comprised of the following:

	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
Raw materials	$	24,651	$	21,127
Spare parts	9,153		8,541
Total inventory	$	33,804	$	29,668

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Property, Plant, and Equipment, net (Tables)

6 Months Ended

Jun. 30, 2022

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant, and Equipment

As of June 30, 2022 and December 31, 2021, property, plant, and equipment, net consisted of the following:

		As of
		June 30, 2022		December 31, 2021
		(Unaudited)
	(In thousands)
Land		$	401	$	—
Buildings		9,117		9,117
Leasehold improvements		29,306		29,155
Aircraft		195		195
Machinery and equipment		39,718		37,002
IT software and equipment		26,719		23,523
Construction in progress		3,816		2,901
		109,272		101,893
Less accumulated depreciation and amortization		(60,089)		(54,395)
Property, plant, and equipment, net		$	49,183	$	47,498

The following table sets forth the summary of depreciation and amortization expense for property, plant and equipment, net:

		Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021
		(Unaudited)
	(In thousands)
Customer experience		$	—	$	—	$	—	$	—
Selling, general, and administrative		1,667		1,284		3,266		2,558
Research and development		1,248		1,587		2,502		3,182
		$	2,915	$	2,871	$	5,767	$	5,740

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Leases (Tables)

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Summary of Lease Expense and Cash Flow Information

The components of lease expense related to leases for the periods presented below are as follows:

	Three Months Ended June 30,
	2022		2021
	(Unaudited and in thousands)
Lease Cost:
Operating lease expense	$	2,092	$	1,254
Short-term lease expense	—		8
Finance Lease Cost:
Amortization of right-of-use assets	29		35
Interest on lease liabilities	4		7
Total finance lease cost	33		42
Variable lease cost	2,106		1,372
Total lease cost	$	4,231	$	2,676

	Six Months Ended June 30,
	2022		2021
	(Unaudited and in thousands)
Lease Cost:
Operating lease expense	$	4,069	$	2,514
Short-term lease expense	—		20
Finance Lease Cost:
Amortization of right-of-use assets	58		69
Interest on lease liabilities	9		14
Total finance lease cost	67		83
Variable lease cost	3,316		2,710
Total lease cost	$	7,452	$	5,327

The components of supplemental cash flow information related to leases for the period are as follows:

	Six Months Ended June 30,
	2022			2021
	(In thousands, except term and rate data)
Cash flow information:
Operating cash flows for operating leases	$	5,087		$	2,712
Operating cash flows for finance leases	$	9		$	14
Financing cash flows for finance leases	$	66		$	69
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	4,924		$	501
Finance Leases	$	—		$	19
Other Information:
Weighted average remaining lease term:
Operating leases (in years)	11.18			12.37
Finance leases (in years)	1.71			2.49
Weighted average discount rates:
Operating leases	11.68		%	11.65		%
Finance leases	8.12		%	8.26		%

Summary of Balance Sheet Information

The supplemental balance sheet information related to leases for the period is as follows:

	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
Operating leases
Long-term right-of-use assets	$	38,776	$	35,486
Short-term operating lease liabilities	$	2,384	$	2,204
Long-term operating lease liabilities	43,509		39,965
Total operating lease liabilities	$	45,893	$	42,169

Summary of Operating Lease Maturities

Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum finance lease payments as of June 30, 2022 are as follows:

	Operating Leases		Finance Leases
	(In thousands)
2022 (for the remaining period)	$	3,580	$	62
2023	7,079		106
2024	7,357		30
2025	7,282		—
2026	7,386		—
Thereafter	52,274		—
Total lease payments	$	84,958	$	198
Less:
Imputed interest/present value discount	$	(39,065)	$	(13)
Present value of lease liabilities	$	45,893	$	185

Summary of Finance Lease Maturities

Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum finance lease payments as of June 30, 2022 are as follows:

	Operating Leases		Finance Leases
	(In thousands)
2022 (for the remaining period)	$	3,580	$	62
2023	7,079		106
2024	7,357		30
2025	7,282		—
2026	7,386		—
Thereafter	52,274		—
Total lease payments	$	84,958	$	198
Less:
Imputed interest/present value discount	$	(39,065)	$	(13)
Present value of lease liabilities	$	45,893	$	185

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Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2022

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

A summary of the components of accrued liabilities are as follows:

	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
Accrued payroll	$	3,447	$	4,214
Accrued vacation	6,218		5,372
Accrued bonus	10,433		12,218
Accrued interest expense	4,781		—
Other accrued expenses	11,828		6,983
Total accrued expenses	$	36,707	$	28,787

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Commercial Loan (Tables)

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
Commercial loan	$	310	$	310
Less: Current portion	(310)		(310)
Non-current portion	$	—	$	—

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Convertible Senior Notes (Tables)

6 Months Ended

Jun. 30, 2022

Convertible Debt [Abstract]

Convertible Debt

The 2027 Notes, net consisted of the following (in thousands):

	As of
	June 30, 2022
	(Unaudited)
Principal	$	425,000
Less: unamortized debt issuance costs	(10,437)
Net carrying amount	$	414,563

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Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Schedule of Earnings Per Share

The following table presents net loss per share and related information:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands, except for share and per share data)
Basic and diluted:
Net loss	$	(110,721)	$	(94,040)	$	(203,778)	$	(223,734)
Weighted average shares of common stock outstanding	258,589,270		240,733,497		258,439,051		238,774,515
Basic and diluted net loss per share	$	(0.43)	$	(0.39)	$	(0.79)	$	(0.94)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

Potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive were as follows (in thousands):

	As of June 30,
	2022	2021
Issued and outstanding stock options	4,156	5,194
Issued and outstanding performance stock options	406	—
Unvested restricted stock units issued and outstanding	4,488	4,018
Unvested performance stock units issued and outstanding	367	85
Shares related to the 2027 Notes (1)	33,234	—
Warrants to purchase shares of common stock	—	8,000
	42,651	17,297

(1) The Company uses the if-converted method for calculating any potential dilutive effect of the conversion options embedded in the 2027 Notes on diluted net loss per share, if applicable.

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of Weighted Average Assumptions

The fair values of these stock options were estimated using a Black-Scholes model with the following assumptions:

	2022
Expected life (in years)(1)	6.11
Expected volatility(2)	69.0	%
Risk free interest rate(3)	2.19	%
Dividend yield(4)	—	%

(1) The expected life is the period of time that participants are expected to hold their options before exercised using the "simplified method" as described in Staff Accounting Bulletin No. 107.

(2) The expected volatility is a measure of the amount by which a stock price is expected to fluctuate based primarily on our and our peers' historical data.

(3) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(4) The Company does not currently pay dividends nor has announced plans to begin paying dividendsThe fair values of these stock options were estimated using a Monte-Carlo simulation with the following assumptions:

	2022
Expected exercise behavior(1)	75.0	%
Expected Volatility(2)	58.0	%
Risk free interest rate(3)	2.19	%
Dividend yield(4)	—	%

(1) PSOs are expected to be exercised after 75% of the period between the vest date and the end of the contractual term has lapsed.

(2) The expected volatility is a measure of the amount by which a stock price is expected to fluctuate based primarily on our and our peers' historical data.

(3) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(4) The Company does not currently pay dividends nor has announced plans to begin paying dividends.

The fair values of these stock units were estimated using a Monte-Carlo simulation with the following assumptions:

	2022
Expected volatility(1)	95.0	%
Risk free interest rate(2)	2.13	%
Dividend yield(3)	—	%

(1) The expected volatility is a measure of the amount by which a stock price is expected to fluctuate based primarily on our and our peers' historical data.

(2) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(3) The Company does not currently pay dividends nor has announced plans to begin paying dividends.

Schedule of Options Outstanding

The following table sets forth the summary of options activity for the six month ended June 30, 2022 under the 2019 Plan (dollars in thousands except per share data):

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value(1)	Weighted Average Grant Date Fair Value ($)
Options outstanding at December 31, 2021	4,253,767	$	14.09	7.60	6,187	—
Granted	303,030	7.99				4.95
Exercised	(4,182)	11.79
Forfeited options	(396,160)	18.21
Options outstanding at June 30, 2022	4,156,455	$	13.26	7.06	—	—
Options exercisable at June 30, 2022	2,182,805	$	12.99	6.67	—	—

(1) Aggregate intrinsic value is calculated based on the difference between our closing stock price at period end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised all their options on the period end date.

The following table sets forth the summary of PSO activity under the 2019 Plan (dollars in thousands except per share data):

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value(1)	Weighted Average Grant Date Fair Value ($)
PSOs outstanding at December 31, 2021	—	$	—	0.00	—
Granted	405,680	8.99				4.93
Exercised	—	—
Forfeited options	—	—
PSOs outstanding at June 30, 2022	405,680	$	8.99	9.71	—
PSOs exercisable at s June 30, 2022	—	$	—	0.00	—

(1) Aggregate intrinsic value is calculated based on the difference between our closing stock price at period end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised all their options on the period end date.

Schedule of Restricted Stock Units Activity

The following table sets forth the summary of RSUs activity during the six months ended June 30, 2022 under the 2019 Plan (dollars in thousands except per share data):

	Shares	Weighted Average Fair Value
Outstanding at December 31, 2021	2,396,732	$	27.89
Granted	3,215,868	8.75
Vested	(846,876)	21.36
Forfeited	(278,134)	18.59
Outstanding at June 30, 2022	4,487,590	$	21.91

Schedule of Performance Stock Unit Activity

The following table sets forth the summary of PSUs activity under the 2019 Plan (dollars in thousands except per share data):

	Shares	Weighted Average Fair Value
PSUs outstanding at December 31, 2021	89,839	$	26.47
Granted	277,552	14.62
Forfeited	—	—
PSUs outstanding at June 30, 2022	367,391	$	18.19

Summary of Stock Option and RSU Expense

Stock-based compensation expense was recorded in the following expense categories in the condensed consolidated statements of operations and comprehensive loss:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Stock option and PSO expense
Selling, general and administrative	2,192		1,870		3,917		10,856
Research and development	731		825		1,416		1,668
Total stock option and PSO expense	2,923		2,695		5,333		12,524
RSU and PSU expense
Selling, general and administrative	6,458		8,556		12,025		17,609
Research and development	2,702		3,172		5,620		6,402
Total RSU and PSU expense	9,160		11,728		17,645		24,011
Total stock-based compensation expense	$	12,083	$	14,423	$	22,978	$	36,535

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Assets Measured on Recurring Basis

The following tables summarize the fair value of assets that are recorded in the Company’s Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 at fair value on a recurring basis:

Fair Value Measurements as of June 30, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Money market	$	206,870	$	—	$	—	$	206,870
Certificate of deposit	91,397		—		—		91,397
US treasuries	209,251		—		—		209,251
Corporate debt securities	—		543,242		—		543,242
Total assets at fair value	$	507,518	$	543,242	$	—	$	1,050,760
Liabilities:
2027 Notes	$	—	$	—	$	271,201	$	271,201
Total liabilities at fair value	$	—	$	—	$	271,201	$	271,201

The estimated fair value of the 2027 Notes were determined based on the quoted bid prices of the 2027 Notes in an over-the-counter market on the last trading day of the reporting period.

Fair Value Measurements as of December 31, 2021
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Money Market	$	402,889	$	—	$	—	$	402,889
Certificate of Deposit	91,549		—		—		91,549
Corporate debt securities	—		380,881		—		380,881
Total assets at fair value	$	494,438	$	380,881	$	—	$	875,319

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2022

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Cash Flow Information

	Six Months Ended June 30,
	2022		2021
	(in thousands)
Supplemental disclosure
Cash payments and refunds for:
Income tax refund	$	10	$	—
Income tax paid	(53)		(58)
	$	(43)	$	(58)
Schedule for noncash investing activities:
Unpaid property, plant, and equipment received	$	1,343	$	270
	$	1,343	$	270
Schedule for noncash financing activities:
Issuance of common stock "cashless" warrants exercised	$	—	$	104,176
Issuance of common stock through restricted stock units vested	7,440		27,320
Unpaid deferred transaction costs	—		250
	$	7,440	$	131,746

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Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Related Party Transaction [Line Items]
Royalty payable, as a percentage of revenue	1.00%		1.00%
Royalty payable, quarterly amount	$ 40		$ 40
Sponsorship royalties payable, as a percentage of revenue	25.00%		25.00%
Affiliated Entity | License and royalty fees
Related Party Transaction [Line Items]
Expenses from related party	$ 40	$ 40	$ 80	$ 80
Subsidiary of Common Parent
Related Party Transaction [Line Items]
Related party receivable	47		47		$ 43
Subsidiary of Common Parent | Allocation of corporate expenses
Related Party Transaction [Line Items]
Transaction amounts from related party	$ 34	$ 31	$ 34	$ 71

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Cash, Restricted Cash, Cash Equivalents and Marketable Securities (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Cash and cash equivalents, amortized cost	$ 370,064,000	$ 564,655,000	$ 370,064,000	$ 564,655,000	$ 550,030,000	$ 678,955,000
Marketable securities amortized cost	762,137,000		762,137,000
Total cash, cash equivalents and marketable securities, amortized cost	1,132,201,000		1,132,201,000
Gross Unrealized Losses	(9,644,000)		(9,644,000)
Marketable securities, fair value	752,492,000		752,492,000
Total assets at fair value	1,122,557,000		1,122,557,000
Interest receivable	3,600,000		3,600,000		2,300,000
Amortization expense for marketable securities	1,800,000	0	4,000,000	0
Material gross realized gains and losses	0	$ 0	100,000	$ 0
US treasuries
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Marketable securities amortized cost	209,596,000		209,596,000		382,884,000
Gross Unrealized Losses	(345,000)		(345,000)		(2,003,000)
Marketable securities, fair value	209,251,000		209,251,000		380,881,000
Corporate debt securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Marketable securities amortized cost	552,541,000		552,541,000
Total cash, cash equivalents and marketable securities, amortized cost					932,914,000
Gross Unrealized Losses	(9,299,000)		(9,299,000)		(2,003,000)
Marketable securities, fair value	543,242,000		543,242,000
Total assets at fair value					930,911,000
Cash and restricted cash
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Cash and cash equivalents, amortized cost	71,797,000		71,797,000		55,592,000
Cash and cash equivalents, fair value	71,797,000		71,797,000		55,592,000
Money market
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Cash and cash equivalents, amortized cost	206,870,000		206,870,000		402,889,000
Cash and cash equivalents, fair value	206,870,000		206,870,000		402,889,000
Certificate of deposits
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Cash and cash equivalents, amortized cost	91,397,000		91,397,000		91,549,000
Cash and cash equivalents, fair value	$ 91,397,000		$ 91,397,000		$ 91,549,000

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Cash, Restricted Cash, Cash Equivalents and Marketable Securities - Contractual Maturities (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Amortized Cost
Matures within one year	$ 592,992
Matures between one to two years	169,145
Total	762,137
Estimated Fair Value
Matures within one year	587,716
Matures between one to two years	164,776
Total	$ 752,492

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Inventory (Schedule of Inventory) (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 24,651	$ 21,127
Spare parts	9,153	8,541
Total inventory	$ 33,804	$ 29,668

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Inventory (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Inventory Disclosure [Abstract]
Inventory write-down	$ 0	$ 0	$ 0	$ 0

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Property, Plant, and Equipment, net (Schedule of Property, Plant, and Equipment) (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property, plant, and equipment	$ 109,272	$ 101,893
Less accumulated depreciation and amortization	(60,089)	(54,395)
Property, plant, and equipment, net	49,183	47,498
Land
Property, Plant and Equipment [Line Items]
Property, plant, and equipment	401	0
Buildings
Property, Plant and Equipment [Line Items]
Property, plant, and equipment	9,117	9,117
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, plant, and equipment	29,306	29,155
Aircraft
Property, Plant and Equipment [Line Items]
Property, plant, and equipment	195	195
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, plant, and equipment	39,718	37,002
IT software and equipment
Property, Plant and Equipment [Line Items]
Property, plant, and equipment	26,719	23,523
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant, and equipment	$ 3,816	$ 2,901

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Property, Plant, and Equipment, net (Depreciation and Amortization) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Property, Plant and Equipment [Line Items]
Depreciation and amortization	$ 2,915	$ 2,871	$ 5,767	$ 5,740
Customer experience
Property, Plant and Equipment [Line Items]
Depreciation and amortization	0	0	0	0
Selling, general, and administrative
Property, Plant and Equipment [Line Items]
Depreciation and amortization	1,667	1,284	3,266	2,558
Research and development
Property, Plant and Equipment [Line Items]
Depreciation and amortization	$ 1,248	$ 1,587	$ 2,502	$ 3,182

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Leases (Lease Cost) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Leases [Abstract]
Operating lease expense	$ 2,092	$ 1,254	$ 4,069	$ 2,514
Short-term lease expense	0	8	0	20
Finance Lease Cost:
Amortization of right-of-use assets	29	35	58	69
Interest on lease liabilities	4	7	9	14
Total finance lease cost	33	42	67	83
Variable lease cost	2,106	1,372	3,316	2,710
Total lease cost	$ 4,231	$ 2,676	$ 7,452	$ 5,327

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Leases (Cash Flow Information) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash Flow, Operating Activities, Lessee [Abstract]
Operating cash flows for operating leases	$ 5,087	$ 2,712
Operating cash flows for finance leases	9	14
Financing cash flows for finance leases	66	69
Right-of-use assets obtained in exchange for lease obligations
Operating leases	4,924	501
Finance Leases	$ 0	$ 19
Weighted average remaining lease term:
Operating leases (in years)	11 years 2 months 4 days	12 years 4 months 13 days
Finance leases (in years)	1 year 8 months 15 days	2 years 5 months 26 days
Weighted average discount rates:
Operating leases	11.68%	11.65%
Finance leases	8.12%	8.26%

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Leases (Supplemental Balance Sheet) (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Leases [Abstract]
Long-term right-of-use assets	$ 38,776	$ 35,486
Short-term operating lease liabilities	2,384	2,204
Long-term operating lease liabilities	43,509	39,965
Total operating lease liabilities	$ 45,893	$ 42,169

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Leases (Narrative) (Details)	Jun. 30, 2022
Minimum
Lessee, Lease, Description [Line Items]
Operating lease, renewal term	3 years
Maximum
Lessee, Lease, Description [Line Items]
Operating lease, renewal term	20 years

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Leases (Lease Maturities) (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Operating Leases
2022 (for the remaining period)	$ 3,580
2023	7,079
2024	7,357
2025	7,282
2026	7,386
Thereafter	52,274
Total lease payments	84,958
Imputed interest/present value discount	(39,065)
Present value of lease liabilities	45,893
Finance Leases
2022 (for the remaining period)	62
2023	106
2024	30
2025	0
2026	0
Thereafter	0
Total lease payments	198
Imputed interest/present value discount	(13)
Present value of lease liabilities	$ 185

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Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued payroll	$ 3,447	$ 4,214
Accrued vacation	6,218	5,372
Accrued bonus	10,433	12,218
Accrued interest expense	4,781	0
Other accrued expenses	11,828	6,983
Total accrued expenses	$ 36,707	$ 28,787

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Commercial Loan (Schedule of Debt) (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 18, 2020
Debt Instrument [Line Items]
Less: Current portion	$ (310)	$ (310)
Non-current portion	0	0
Commercial loan | Commercial loan
Debt Instrument [Line Items]
Total debt	$ 310	$ 310	$ 900

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Commercial Loan (Narrative) (Details) - Commercial loan - Commercial loan $ in Thousands	27 Months Ended
	Oct. 01, 2022 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)	Jun. 18, 2020 USD ($) installment
Debt Instrument [Line Items]
Commercial loan		$ 310	$ 310	$ 900
Number of installments | installment				3
Interest rate				0.00%
Forecast
Debt Instrument [Line Items]
Annual payment	$ 300

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Convertible Senior Notes - Narrative (Details) $ / shares in Units, shares in Millions		3 Months Ended		6 Months Ended
	Jan. 19, 2022 USD ($) day $ / shares shares	Jun. 30, 2022 USD ($) $ / shares	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($) $ / shares	Jun. 30, 2021 USD ($)	Dec. 31, 2021 $ / shares
Line of Credit Facility [Line Items]
Common stock, par value (in dollars per share) | $ / shares	$ 0.0001	$ 0.0001		$ 0.0001		$ 0.0001
Interest expense		$ 3,157,000	$ 6,000	$ 5,631,000	$ 13,000
Amortization of debt issuance costs				841,000	$ 0
Call Option
Line of Credit Facility [Line Items]
Capped call option to purchase common shares (in shares) | shares	33
Call option price per share (in dollars per share) | $ / shares	$ 12.79
Derivative, cap price (in dollars per share) | $ / shares	$ 20.06
Premium over share price, percentage	100.00%
Derivative, notional amount	$ 52,300,000
2027 Notes | Convertible Debt
Line of Credit Facility [Line Items]
Principal amount	$ 425,000,000
Interest rate	2.50%
Conversion ratio	0.0781968
Conversion price (in dollars per share) | $ / shares	$ 12.79
Debt instrument, convertible, threshold trading days | day	20
Threshold percentage of stock price trigger	130.00%
Accrued interest expense		4,800,000		4,800,000
Interest expense		3,200,000		5,600,000
Amortization of debt issuance costs		$ 400,000		$ 800,000
2027 Notes | Convertible Debt | Debt Conversion Option One
Line of Credit Facility [Line Items]
Debt instrument, convertible, threshold trading days | day	20
Debt instrument, convertible, threshold consecutive trading days | day	30
Threshold percentage of stock price trigger	130.00%
2027 Notes | Convertible Debt | Debt Conversion Option Two
Line of Credit Facility [Line Items]
Debt instrument, convertible, threshold trading days | day	5
Debt instrument, convertible, threshold consecutive trading days | day	10
Threshold percentage of stock price trigger	98.00%

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Convertible Senior Notes - 2027 Notes (Details) - 2027 Notes - Convertible Debt $ in Thousands	Jun. 30, 2022 USD ($)
Debt Instrument [Line Items]
Principal	$ 425,000
Less: unamortized debt issuance costs	(10,437)
Total debt	$ 414,563

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Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Tax Disclosure [Abstract]
Income tax expense	$ 23	$ 6	$ 48	$ 49
Effective income tax rate	0.00%	0.00%	0.00%	0.00%

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Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended		6 Months Ended
	Jul. 16, 2021	Jul. 12, 2021	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Jan. 19, 2022	Dec. 31, 2021
Class of Warrant or Right [Line Items]
Change in fair value of warrants			$ 0	$ 20,363	$ 0	$ 69,082
Common stock, par value (in dollars per share)			$ 0.0001		$ 0.0001		$ 0.0001	$ 0.0001
At The Market Offering
Class of Warrant or Right [Line Items]
Stock sold, aggregate consideration		$ 500,000
Common stock, par value (in dollars per share)		$ 0.0001
Sale of stock gross proceeds	$ 500,000
Stock issuance costs	$ 6,200
Stock sold (in shares)	13,740,433
Public Warrant
Class of Warrant or Right [Line Items]
Outstanding warrants (in shares)			0		0			0

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Net Loss Per Share (Schedule of Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Basic and diluted:
Net loss	$ (110,721)	$ (94,040)	$ (203,778)	$ (223,734)
Weighted average common shares outstanding - basic (in shares)	258,589,270	240,733,497	258,439,051	238,774,515
Weighted average common share outstanding - diluted (in shares)	258,589,270	240,733,497	258,439,051	238,774,515
Basic net loss per share (in dollars per share)	$ (0.43)	$ (0.39)	$ (0.79)	$ (0.94)
Diluted net loss per share (in dollars per share)	$ (0.43)	$ (0.39)	$ (0.79)	$ (0.94)

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Net Loss Per Share - Anti-dilutive (Details) - shares shares in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential effect of warrants to purchase stock (in shares)	42,651	17,297
Stock option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential effect of warrants to purchase stock (in shares)	4,156	5,194
Performance stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential effect of warrants to purchase stock (in shares)	406	0
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential effect of warrants to purchase stock (in shares)	4,488	4,018
Performance stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential effect of warrants to purchase stock (in shares)	367	85
Convertible Debt
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential effect of warrants to purchase stock (in shares)	33,234	0
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential effect of warrants to purchase stock (in shares)	0	8,000

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Stock-Based Compensation (Narrative) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2022 USD ($) day
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense	$ 20.3
Stock option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	25.00%
Unrecognized compensation cost, period for recognition	1 year 10 months 24 days
Stock option | 2019 Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Performance stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period	10 years
Vesting percentage	75.00%
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Unrecognized compensation cost, period for recognition	2 years 9 months 18 days
Unrecognized stock-based compensation expense, excluding options	$ 93.8
Restricted stock units | Tranche one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	25.00%
Restricted stock units | Tranche two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	25.00%
Restricted stock units | Tranche three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	25.00%
Restricted stock units | Tranche four
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	25.00%
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Consecutive trading days | day	20
Performance Shares | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	25.00%
Performance Shares | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	200.00%

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Stock-Based Compensation (Valuation Assumptions) (Details)	6 Months Ended
	Jun. 30, 2022
Stock option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (in years)	6 years 1 month 9 days
Expected volatility	69.00%
Risk free interest rate	2.19%
Dividend yield	0.00%
Vesting percentage	25.00%
Performance stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected exercise behavior	75.00%
Expected volatility	58.00%
Risk free interest rate	2.19%
Dividend yield	0.00%
Vesting percentage	75.00%
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	95.00%
Risk free interest rate	2.13%
Dividend yield	0.00%

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Stock-Based Compensation (2019 Stock Plan Activity) (Details) - 2019 Stock Plan - Stock option - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Number of Shares
Beginning balance (in shares)	4,253,767
Granted (in shares)	303,030
Exercised (in shares)	(4,182)
Forfeited options (in shares)	(396,160)
Ending balance (in shares)	4,156,455	4,253,767
Options exercisable (in shares)	2,182,805
Weighted Average Exercise Price
Weighted-average exercise price, beginning (in dollars per share)	$ 14.09
Granted (in dollars per share)	7.99
Exercised (in dollars per share)	11.79
Forfeited options (in dollars per share)	18.21
Weighted-average exercise price, ending (in dollars per share)	13.26	$ 14.09
Options exercisable (in dollars per share)	$ 12.99
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Options outstanding, weighted average contractual term	7 years 21 days	7 years 7 months 6 days
Options exercisable, weighted average contractual term	6 years 8 months 1 day
Options outstanding, aggregate intrinsic value	$ 0	$ 6,187
Options exercisable, aggregate intrinsic value	$ 0
Weighted Average Grant Date Fair Value
Granted (in dollars per share)	$ 4.95

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Stock-Based Compensation (PSO Activity) (Details) - Performance stock options - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Number of Shares
Beginning balance (in shares)	0
Granted (in shares)	405,680
Exercised (in shares)	0
Forfeited options (in shares)	0
Ending balance (in shares)	405,680	0
PSOs exercisable (in shares)	0
Weighted Average Exercise Price
Weighted-average exercise price, beginning (in dollars per share)	$ 0
Granted (in dollars per share)	8.99
Exercised (in dollars per share)	0
Forfeited options (in dollars per share)	0
Weighted-average exercise price, ending (in dollars per share)	8.99	$ 0
PSOs exercisable (in dollars per share)	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted average contractual term	9 years 8 months 15 days	0 years
PSOs exercisable, weighted average contractual term	0 years
PSOs outstanding, aggregate intrinsic value	$ 0	$ 0
PSOs exercisable, aggregate intrinsic value	$ 0
Weighted Average Grant Date Fair Value
Granted (in dollars per share)	$ 4.93

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Stock-Based Compensation (RSU Activity) (Details) - Restricted stock units	6 Months Ended
	Jun. 30, 2022 $ / shares shares
Shares
Outstanding, beginning balance (in shares) | shares	2,396,732
Granted (in shares) | shares	3,215,868
Vested (in shares) | shares	(846,876)
Forfeited (in shares) | shares	(278,134)
Outstanding, ending balance (in shares) | shares	4,487,590
Weighted Average Fair Value
Outstanding, beginning balance (in dollars per share) | $ / shares	$ 27.89
Granted (in dollars per share) | $ / shares	8.75
Vested (in dollars per share) | $ / shares	21.36
Forfeited (in dollars per share) | $ / shares	18.59
Outstanding, ending balance (in dollars per share) | $ / shares	$ 21.91

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Stock-Based Compensation (PSU Activity) (Details) - Performance Shares	6 Months Ended
	Jun. 30, 2022 $ / shares shares
Shares
Outstanding, beginning balance (in shares) | shares	89,839
Granted (in shares) | shares	277,552
Forfeited (in shares) | shares	0
Outstanding, ending balance (in shares) | shares	367,391
Weighted Average Fair Value
Outstanding, beginning balance (in dollars per share) | $ / shares	$ 26.47
Granted (in dollars per share) | $ / shares	14.62
Forfeited (in dollars per share) | $ / shares	0
Outstanding, ending balance (in dollars per share) | $ / shares	$ 18.19

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Stock-Based Compensation (Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 12,083	$ 14,423	$ 22,978	$ 36,535
Stock option
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	2,923	2,695	5,333	12,524
Stock option | Selling, general and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	2,192	1,870	3,917	10,856
Stock option | Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	731	825	1,416	1,668
RSU and PSU
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	9,160	11,728	17,645	24,011
RSU and PSU | Selling, general and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	6,458	8,556	12,025	17,609
RSU and PSU | Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 2,702	$ 3,172	$ 5,620	$ 6,402

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Fair Value Measurements (Fair Values) (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	$ 752,492
Total assets at fair value	1,122,557
US treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	209,251	$ 380,881
Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	543,242
Total assets at fair value		930,911
Money market
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	206,870	402,889
Certificate of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	91,397	91,549
Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	1,050,760	875,319
Total liabilities at fair value	271,201
Fair Value, Recurring | 2027 Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
2027 Notes	271,201
Fair Value, Recurring | US treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	209,251
Fair Value, Recurring | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	543,242
Fair Value, Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	507,518	494,438
Total liabilities at fair value	0
Fair Value, Recurring | Level 1 | 2027 Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
2027 Notes	0
Fair Value, Recurring | Level 1 | US treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	209,251
Fair Value, Recurring | Level 1 | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	0
Fair Value, Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	543,242	380,881
Total liabilities at fair value	0
Fair Value, Recurring | Level 2 | 2027 Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
2027 Notes	0
Fair Value, Recurring | Level 2 | US treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	0
Fair Value, Recurring | Level 2 | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	543,242
Fair Value, Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	0	0
Total liabilities at fair value	271,201
Fair Value, Recurring | Level 3 | 2027 Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
2027 Notes	271,201
Fair Value, Recurring | Level 3 | US treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	0
Fair Value, Recurring | Level 3 | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, fair value	0
Fair Value, Recurring | Money market
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	206,870	402,889
Fair Value, Recurring | Money market | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	206,870	402,889
Fair Value, Recurring | Money market | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	0	0
Fair Value, Recurring | Money market | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	0	0
Fair Value, Recurring | Certificate of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	91,397	91,549
Fair Value, Recurring | Certificate of deposit | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	91,397	91,549
Fair Value, Recurring | Certificate of deposit | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	0	0
Fair Value, Recurring | Certificate of deposit | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	$ 0	0
Fair Value, Recurring | Cash equivalents | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value		380,881
Fair Value, Recurring | Cash equivalents | Level 1 | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value		0
Fair Value, Recurring | Cash equivalents | Level 2 | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value		380,881
Fair Value, Recurring | Cash equivalents | Level 3 | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value		$ 0

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Commitments and Contingencies (Narrative) (Details) - shareholder	Mar. 01, 2022	Feb. 21, 2022
Commitments and Contingencies Disclosure [Abstract]
Number of shareholders	2	2

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Employee Benefit Plan (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Retirement Benefits [Abstract]
Defined contributions	$ 1.1	$ 1.5	$ 2.6	$ 2.6

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Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash payments and refunds for:
Income tax refund	$ 10	$ 0
Income tax paid	(53)	(58)
Income tax paid, net	(43)	(58)
Schedule for noncash investing activities:
Unpaid property, plant, and equipment received	1,343	270
Schedule for noncash financing activities:
Issuance of common stock "cashless" warrants exercised	0	104,176
Issuance of common stock through restricted stock units vested	7,440	27,320
Unpaid deferred transaction costs	0	250
Noncash financing activities	$ 7,440	$ 131,746

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Subsequent Event (Details) - Arizona - Subsequent Event $ in Millions	Jul. 14, 2022 USD ($) ft² lease_option building
Subsequent Event [Line Items]
Area of real estate property | ft²	151,096
Number of real estate property | building	2
Initial term (in years)	10 years
Operating lease expense, annual | $	$ 3.0
Number of lease option | lease_option	4
Operating lease, renewal term	5 years