Thank you, and good afternoon, everyone. Welcome to Virgin Galactic's Third Quarter 2020 Earnings Conference Call. On the call with me today are Michael Colglazier, Chief Executive Officer; Mike Moses, President, Space Missions and Safety; and Jon Campagna, Chief Financial Officer, who will provide prepared remarks. Earlier today, we issued a press release and made a slide presentation available on our Investor Relations website, which provides an overview of our business and financial highlights for the third quarter 2020. During today's call, we will make certain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication.

Thanks Michelle, and good afternoon, everyone. I hope you and your loved ones are keeping healthy and safe. I last spoke with you I was two weeks into the job. And over the last three months, I've immersed myself in the company's engineering, operations, brand, commercial and financial areas, and I'm well underway and getting to know our incredibly talented team members. Let me start this call by saying that the exposure I've gained in just three short months has caused my excitement to far exceed my expectations for when I'm joined. I'll start today with a brief recap of our Q3 accomplishments and an update of how we are working within the constraints of the COVID-19 pandemic. And then I'd like to give you a glimpse into some of the key insights and observations that I've had in my first hundred days. I'll then ask Mike Moses to share an update on our upcoming flights and a review of our flight test program, which I know many of you are eager to hear about. We'll talk about progress with our second spaceship, and then I'll share initial thoughts on our commercial plans and provide an update on the reopening sales. After that Jon will provide detail regarding our Q3 financial performance. With that let's get started with a summary of our Q3 accomplishments beginning on Slide 4. Despite the challenges brought on by the pandemic, we accomplished many milestones this quarter across the company. We've made good progress, preparing our spaceflight system for our fall flight, including completion of data analysis that follows the June 25th glide flight and installing the cabin camera system and the hardware needed to provide live video downlink.

Thanks, Michael. Since our last powered flight to space, we've relocated our teams to New Mexico and we have integrated our operations with the local agencies here; New Mexico Spaceport Authority, White Sands Missile Range, FAA Albuquerque Center and several other New Mexico State Agencies. We have also flown two successful glide flights as part of our testing program. During this time, we have made several planned upgrades to our spaceship: VSS Unity. And our current development and test phase a big part of what we do on these flights is assess any modifications and changes that may be required to optimize the vehicles for operations, customer experience, and of course safety. One of the upgrades we made is in the passenger cabin. As you saw with our cabin reveal in quarter three, we've put significant work into the interior design. We've installed the crucial elements of that cabin in preparation for the full testing of the customer experience and our upcoming quarter one flights. On our upcoming November flight, we will test the new cabin hardware, including our reclining seats with test mannequins strapped in the seats. We will also test the full complement of cabin cameras and downlink hardware, which will allow us to assess our capacity to live stream future flights. This upcoming November flight will also include test points to continue evaluation of our upgraded horizontal stabilizers and flight control system. The horizontal stabilizers also known as H-Stabs are the flight control surfaces on the outboard of the feather booms. We've made improvements to these surfaces as well as upgrading the flight control system that drives them. This system was already in development for future spaceships and is now installed in unity. These changes will increase performance during the boost phase of flight; both the H-Stabs and the flight control system have been extensively tested on the ground as well as in previous two glide flights here from Spaceport America. And now we plan to verify their performance during this next rocket powered flight. Another key feature of our November flight is that the cabin will be outfitted with four payload racks. Three of these will carry NASA payloads as part of NASA's flight opportunities program, making this a revenue generating flight. Carrying payloads means our pilots will be flying the vehicle slightly differently to how they would fly the vehicle with future astronauts onboard. Once in space, we will pitch the vehicle 270 degrees following boost to get into the re-entry attitude as soon as possible. This maneuver will maximize time for payloads to remain in zero gravity data collection mode.

Thanks Mike. Upon successful completion of this November flight, including a satisfactory review of the post-flight data and check-out of the vehicles, our flight test program will move to the next phase. This will begin with our second rocket powered flight for New Mexico, which we expect to launch in Q1, when our spaceflight specialists will test them verify cabin interior hardware, the weightless experience in space and our live stream camera systems. We expect the third rocket powered test flight also planned for Q1 will include our Founders to Richard Branson. I've been speaking to Richard frequently about his flight and needless to say, he is incredibly excited and we are all looking forward to seeing this wonderful milestone arrived. Turning to Slide 11 and our second spaceship. Our next spaceship is planned to roll out for ground and flight testing in Q1. We had originally planned to have this vehicle ready for rollout by the end of the calendar year, and this is one of the areas where the inefficiencies and operating with pandemic protocols have contributed to some delays. We have an exciting virtual event planned for the unveiling of this second spaceship and I don't want to spoil that, but there are some important things to note about this rollout. For context, rollout means the vehicle is ready to commence its comprehensive Integrated Vehicle Ground Testing program or IVGT for short. One of the many acronyms I've been learning in my first hundred days, I might add. During IVGT, we will test the functionality of all the installed vehicle systems. This rollout will be a huge accomplishment for the company. We were able to take lessons learned from the builders SpaceShipTwo Unity to enhance the fabrication and assembly processes, to deliver the vehicle in a more…

Thanks Michael. Looking at Slide 14, our third quarter results reflect the progress we have made completing the final steps in preparation for VSS Unity's first powered flight from Spaceport America and our ongoing work ahead of commercial launch. We remain in a strong cash position and ended the quarter with cash and cash equivalents of $742 million as of September 30, 2020. In the period, we completed a public offering of $23.6 million shares of common stock at a public offering price of $19.50 per share generating over $440 million in net proceeds. Net loss for the quarter was $77 million compared to a $63 million net loss in the second quarter of 2020. The increase in net loss primarily reflects certain non-cash expenses, which I will cover shortly. Non-GAAP SG&A expenses and non-GAAP R&D expenses have been adjusted to exclude stock based compensation and non-capitalized transaction cost is applicable. GAAP SG&A expenses for the quarter for $31 million compared to $26 million in the second quarter of 2020 due primarily to additional cash charges and non-cash stock-based compensation costs including those incurred in connection with the hiring of our new CEO and the appointment of our Chief Space Officer, as well as increased costs incurred to ensure proper COVID related safety standards. Non-GAAP SG&A expenses for the quarter were $26 million compared to $23 million in the second quarter of 2020. Looking forward for Q4 and later, we expect non-cash stock-based compensation expenses to increase due to the scheduled grant of additional equity awards, which relate back to the closing of our transaction of Social Capital Hedosophia. GAAP R&D expenses for the quarter were $46 million compared to $37 million in the second quarter of 2020. The increase in R&D expenses primarily reflects a one-time $5 million non-cash…

Thanks, Jon. I'll now hand over to the operator for Q&A.

Your first question is from the line of Adam Jonas with Morgan Stanley. Please go ahead.

Thanks everybody. Just a couple questions, first on the COVID issues that you highlighted, you expect them to persist into the first quarter yet the Branson flight is on track for Q1. Is this because the Q1 Branson flight already factors in these delays? Or is it that the delays just aren't as significant for that part of your operation due to differences in working conditions in close quarters?

Thanks, Adam.

…first question, thanks.

Thanks, Adams. This is Michael. We are seeing impacts from COVID. As I said, there's a lot of close quarters work that is just delayed as we spread out and follow our protocols. What we've been doing though is really focusing our talent and the resources that we can get into the shifts on our flights, the upcoming flights, that's one of the reasons why you see a bit of a delay coming in our second spaceship coming off. So, today, we do believe we have in the schedule the ability to successfully do this flight like I said November 19th to 23rd. We expect the second one to go off in Q1 and it'll probably be the end of Q1, but we do expect our third rocket powered flight to go still within that quarter. Of course, we're going to assess the date after each one of these flights and there's always things that we may learn, but that is our expectation.

Thanks, Michael. A question on the on the modest revenue that you highlighted for the payloads, how should we be thinking about that test payload revenue for the quarter, order of mag?

Yes, sure, Adam. Yes, this is Jon. Yes, I mean, I think, best way to look at that is it's probably in the sort of $400,000 range for the payloads, but there's three NASA payloads that will be on that flight that we have planned, as Michael mentioned earlier, for later this month.

Okay, that's great. And just finally if I can flip one more in, your price per ship, can you remind us of the kind of telemetry of cost reductions, obviously your spaceship manufacturing capabilities are proprietary and something that gives you that that edge that moat. If you could tell us kind of from first to second now that you're getting really close to final testing for the second ship of getting to that phase what the price is. And then as you start seeing line of sight to the third spaceship; just give us an order of magnitude of how much the cost per ship are declining. Thanks very much.

Yes, Adam, so on that point, I think, we're still evaluating those reductions that we're going to have as Michael mentioned as we moved from an R&D focus to a production focus over the coming months here in particular we'll continue to look at how we're driving down those costs for future shifts from second and third and onward. At this point, we're not in a position to sort of give an estimate as to what those cost reductions are, but as we are able to we will certainly share that with you.

Thanks, Jon.

Your next question is from the line of Robert Spingarn with Credit Suisse. Please go ahead.

Hi, good afternoon. Michael, I wanted to ask you a sort of a longer-term question. You mentioned $1 billion per year per Spaceport I guess that's a mature revenue number. And I wanted to understand that a little bit better just what the flight portion of that is relative to the ancillary because that number is about double where we would get with 300 flights, but you mentioned 400. So it sounds like you're going to perhaps utilize the spaceships a little bit more and I was hoping you could elaborate on that maybe talk about if pricing bridges some of that gap between our number and yours and maybe talk a little more about the ancillaries.

Thanks, Rob. One thing I am really, really bullish on is the nature and truly transformative experience that we're going to be providing. I spent time talking to those in our company that have made this journey and it will be incredible. I am also looking forward to expanding what we'll do, I think we focus so far on the space flight itself, which of course is going to be the peak emotional part, but this transformative journey really starts from the moment people sign on with us. And when they come to New Mexico, we will build an experience kind of booking being around the flight itself. That's one where I believe there will be a lot of opportunity for friends and family to join in and participate in parts of that. And then we think, of course, the experience will carry on. We're going to be adding into what that the value that that experience will deliver. And I think when we add value in there, we will not have so much of a demand problem, it's more about supply. So I do think that will help support pricing over the experience as we go. And we will continue to look to ways to expand and widen the revenue footprint beyond the ticket, I'll call it on the space flight itself and we're looking forward to that. So I think that $1 billion does reflect those things.

Is it too soon for me to ask you to quantify that in terms of ancillaries relative to ticket price? It sounds like it could be as much as 50%.

Yes, I think, our pricing strategy is going to evolve off the experience, but one of the things that I am excited about is when you have a truly incredible product and one that will be supply constrained as opposed to demand constrained, it gives a lot of flexibility into our pricing model. So I am looking forward to being able to share in future calls what our experience looks to be and will bring pricing strategies around that experience at that time.

Okay. And then just to finish just on the timeline, I wanted to clarify is the Branson flight a third test flight, a third powered test flight or is it build as a first commercial flight? How should we think about that?

Sure, we, as you know, are continuing our flight test program. The first one coming up November 19th to 23rd, the second flight test program we think will be in Q1 and that's where we'll bring for the first time a full cabin with four passengers to go, those who all be employees. The flight with Richard will be part of the flight test program and I think who better to assess the experience of what we're doing here. Our flight test is so far mostly focused on the technology and how we're getting up there. We also want to make sure that we are testing the weightless experience, how the cabinet environment will go and we think Richard as not only our founder, but kind of adventurer in chief person to join on that flight.

Your next question is from the line of Myles Walton with UBS. Please go ahead.

Thanks, good evening. I was wondering if Michael you could comment on the transition here from retiring the one small step to initiating the ticket sales. And in particular the retirement of the one small step is that because you want to maintain scarcity in the funnel. And how much of the one small step population do you expect to create to the astronaut deposits? Thanks.

So we're looking forward Myles, hi, by the way, to opening up sales following the flight we do with Richard Branson. One thing I have learned in speaking to some of our future astronauts is how important and incredible being part of this community has been to them. And so we're going to be thoughtful how we open those up. But the one small step program has been very helpful. It's we are a little uh shy of 900 people so far that have registered interest. And as we look to really opening sales up, we are going to do what we promised and we will start with calling each one of those people and assessing their interest in joining this future astronaut community. But once we've decided it's time to reopen sales I think that's where people are going to shift and the focus there. And so, it's not really much more complicated than that. I think the space fair program has been really helpful in letting people sign up and register a degree of interest, but we're looking forward to now fully reopening sales following Richard's fight.

Okay. And maybe one other question in terms of after the Branson flight, is that when you'll go into significant uptake in pace of flights or should we think of that as something that happens much later in 2021?

I think as we've probably heard from us before as we close our flight test to achieve technological feasibility and then push into commercial service, we do plan to take that in a slow and measured way. We're going to focus on safety first as we always do, but we also really want to focus and ensure we get the experience just right. The objective of all the people that we have signed up and who will come in the future is to truly have this transformative life experience. We want to make sure that is really dialed in. So, you'll see us do a slow and measured start and then we will be increasing that also as we increased our fleet size.

Your next question is from the line of Ron Epstein with Bank of America. Please go ahead.

Hi, good afternoon guys. So, Michael, just a big picture question for you. You've been at the company now about maybe a hundred days, a little longer, but what's been the surprises, what's been the challenges and if you can kind of give us your 100 day perspective.

Sure, a couple surprises. I was really pleasantly surprised with the depth of talent that we have, really going up and down across all levels of the company. And for a company doing what we're doing, it is grounded in talent. So that was really excellent to see. As I mentioned earlier in the call, the quality of the assets that we have is really incredible between the space flight system itself, but also what we've developed in our learning’s have been gone through 15 years of flying and designing these things is really important. What I am also excited about is the ability now to monetize and scale this business. And I think this is what's come to date has really been an incredible first chapter. We're on the cusp of technological feasibility of this. And now as we move into the second chapter, it is going to be about growing the business and that will require a shift in footing for us as we move away from prototype and R&D focus and into manufacturing for scale. And I'm really excited, yes surprised that we have such great talent that we can already put into some of those key roles as we now look to build a business.

And maybe a little bit of a different question. It seems like maybe we're on the cusp of a change in presidential administration and the Trump administration was very, very friendly on commercial space, right. If nothing else, the administration was a big believer in space, Secretary Ross, Department of Commerce, was pushing commercial space in very positive ways. If we were to see a change in administration, do you think we'll see a change in how they feel about commercial space and not just the investments in commercial space, but Department of Commerce is a real cheerleader for commercial space. What do you expect to see happen if we see a change?

Well like – I'm sure everybody on the call have been following the elections closely. I appreciate your time breaking away from that to join us today. One thing I will say is really regardless of where the next administration plays out. Over our 15 years we've got a really great history of working with administrators and leaders and government on both sides of the aisle. And I fully expect that will continue. We have excellent relationships with government teams, and I think we're going down the good path forward regardless where the election plays out.

Your next question is from the line of Oliver Chen with Cowen. Please go ahead.

Hi. Thank you. Michael in your remarks you mentioned customer lifetime value and how are you thinking about that opportunity and also scaling accretive and experience like what will be more challenging or the bigger opportunities as you seek to scale that part of the equation? Our surveys indicate a lot of pricing leverage on both the up-raising as well as lower. And would also just from a modeling perspective, as we think about spaceport. The 400 flights per year, what is that assumed for spaceship, and as we look longer out the number of spaceports and the opportunity ahead? Thank you.

Thanks, Oliver. On the first part of that; well, let me take the second part first, if you don't mind. So when I think about 400 flights per year we obviously are going to need several motherships to accomplish that in a spaceport. Many spaceships and obviously lots and lots of rocket motors, in our current footing we've been focused on flight test and in order to now pivot to be able to supply the demand that we expect here, we are going to have to ramp up manufacturing in that regard. But I think it will be on the order of a few motherships, many spaceships and like I said, a rocket motor for every flight as we go. When we reached that, and I think 400 is a good approximation something that we're now going to see as a target for a fully utilized spaceport. I think that will be an incredible economic engine. It will drive economics for our company, but as well as the communities in which we operate. Our first focus of course is New Mexico, and I think as that comes together this will be a really powerful product if you will that will be of interest in other parts of the world. How many parts, I think we'll see in the future, but I'm very, very excited about that. And I'm sorry, Oliver would you mind just restating the first part of your, your first question for me one more time?

Just thinking about customer lifetime value and maximization there and not likely intersect with scaling a creative and experiential, I mean, as well as plans for pricing. So…

Right…

…and what you see that's being the hypothesis…

Right, thank you. Thank you. Obviously, I'm coming from a background where a relationship with a customer is not a one-and-done experience. And while we believe this is truly going to be a transformative experience, I don't think it's a once in a lifetime experience. I think the opportunity to fly and get this perspective from space is going to be so compelling that people will want to bring others with them if they come back and do that. And I think as we look over time to scale to different markets, it will be a different experience from different spaceports. So the fact that right now as I talked to our 600 future astronauts here, the commitment to the community that they have joined and the kind of shared journey that they're on has been really powerful. I think there's a lot of opportunity in that, but we'll focus on delivering value for our customers and I think a lot of ways that will play out over time.

Okay. And on Spaceport, the number of Spaceports globally and how will you approach Spaceport unit expansion and thinking about the capital required there and/or partnerships to make it more capital light possibly globally? Thanks.

Thanks. I think at this stage, as you would imagine we're really focused in the near term on completing our flight test, getting our technological feasibility proven, starting to get commercial operations going and then growing into a fully utilized Spaceport. So I think it's probably a little premature for me to put forth thoughts on how and how we'll fund future spaceports. But I do believe the economic engine that will be generated here will provide a lot of opportunity. And I think it will be good partnerships with as we expand around the world with that.

Your next question is from the line of Noah Poponak with Goldman Sachs. Please go ahead.

Hi, evening everyone. Hey, how's it going? Just want to make sure I have it clear that the move from October to November for Unity first powered flight is 100% completely COVID restriction related as opposed to anything technical or otherwise. And then, how aggressive or not do you feel about the spacing have between powered flight 1, 2 and 3 with community?

On the first part of your question, Noah; not actually COVID at all on that, we have always said we will be flying our first powered flight from New Mexico in the fall. What I think you may be referring to is as part of an FCC license request for spectrum that we'll use as we're transmitting our downlinks. We had to open up a flight window and that flight window was put out on October 22nd. That was never planned to be part, when we'd be flying units here. So we're feeling good on our flight window there. As to spacing, well I'll say this, at this stage today we feel good about the second flight in Q1. We feel good about our third rocket powered flight; it'll be at the end of Q1. But with that said, as we always do, we take each of these flight by flight and that's very purposeful. We are going to go forward prudently with safety, absolutely; it's the first thing in mind. And so what we do after each of these flights is we analyze all the data that comes from it. We look at the ships as they come back down and we make our decision there. So it's always possible that our engineers will find something that they want us to retest or additional tests they would like. But as we sit with our knowledge today, I feel good about the upcoming flight dates.

Okay. With regard to the second vehicle, can you tell us more about the milestones that will be in the schedule after you've rolled that out? I mean all that, how much of a full test program will that have? What kind of timing will you we be looking at with that vehicle?

Sure. So our second spaceship, we will have come off and for rollout in Q1, and when we bring this out into rollout in that fun acronym, I learned of IVGT. What we'll start with is ground testing. As we finished ground testing, then we will move into flight testing, and we will carry through the same type of data analysis that we had here. So right now we won't be giving guidance on the timing of all of those pieces. But we are excited because this ship I do think will give us a ship that provides higher rate, higher service, shorter turnaround time, and that will be a model for our shifts going forward

And your final question is for the line at Pete Skibitski with Alembic Global. Please go ahead.

Yes, good evening, guys. Just a couple quick ones; getting back to the discussion on the math of getting to 400 flights. And one of your slides mentioned the second ship is designed for higher rates. I think I have my model each ship being able to do five flights per month. Can you talk about at this point, the second ship going to do six, seven. How are you guys thinking about these follow-on ships and the rate that they can do?

Well, I think for today we're going to focus more about the target of where we're going and to hit 400 flights a year as we build our manufacturing into that. Obviously we'll need ships that move at a reasonably high return rate. And the overall model, I think the ships themselves; the main factors how quickly we can turn them, less about probably the specific cost of the ships. And so that's part of the learning that we will have going forward. I think it's probably a little early to give guidance in that regard. But we do know the second ship is designed to have a better turnaround time, it's designed in a modular fashion that lets us get and we will maintain it in a more quick and easy fashion. As one thing that we will be committing to is as we do get the clarity of learning's here, we will be committing to inform view about those things so that you can be closer with your own modeling.

Okay. That's great. I appreciate it. And just last one for me, a little technical, but I'm curious on the upgrades to the flight control system, particularly the horizontal stabilizer you guys mentioned, maybe Mike mentioned. But what does that do for the ship? Does that allow you to reach a higher altitude or just maybe improve the safety or smoothness of the ride? Can anybody speak to that maybe?

Yes. Pete, this is Mike Moses. I can answer that one. So the horizontal stabilizers are actually one of our primary flight controls that we use. So when we drop the vehicle, we're flying kind of straight level and then the horizontal stabilizers turn and allow us to bite in and turn the ship up on its tail and boost straight up. So they are very critical system for us. So anything we can do to kind of improve their reliability, the control that they have, the fine tuning really does help us with performance, because it allows us to net curve, if you want to sort of speak of that boost profile. So it really gives us a little more robust system. And maybe more importantly, talking to what Michael just talked about, it allows us some room to improvement in the, even more with an electronic system that has software upgrade capability and again, we were developing this. For future ships and we decided to go ahead and put it in Unity now to get some run time on it, but it's got some great expansion capability for us in the future, as we look to a future of higher flight rates.

Thank you. And at this time I will turn the call back to Michael for closing remarks.

Hey, I'll be brief here. First, I just want to thank everybody for joining this call. There's a lot going on at the election news, and I appreciate you taking the time. I do want to take a moment to thank our entire team at Virgin Galactic. People have been working so hard preparing for this first powered flight for New Mexico, but people in New Mexico, people in Mojave, and the support has been incredible. I know I speak for all of us when I say we cannot wait for this upcoming space flight and to all of you on the call, we appreciate your continued interest and support of our company. We look forward updating each of you on our progress after the spaceflight in a few weeks and during next quarter's earnings call as well. Thanks everybody have a good day.

And this does conclude today's conference call. We thank you for your participation. You may now disconnect.