Prepared remarks
Good afternoon. My name is Desire, and I will be your conference operator today. At this time, I would like to welcome everyone to Virgin Galactic's First Quarter 2026 Earnings Conference Call. I will now turn the call over to Eric Cerny, Vice President of Investor Relations.
Thank you. Good afternoon, everyone. Welcome to Virgin Galactic's First Quarter 2026 Earnings Conference Call. On the call with me today are Michael Colglazier, Chief Executive Officer; and Doug Ahrens, Chief Financial Officer. Following our prepared remarks, we will open the call for questions. Our press release and slide presentation that will accompany today's remarks are available on our Investor Relations website. Please see Slide 2 of the presentation for our safe harbor disclaimer. During today's call, we may make certain forward-looking statements. These statements are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties. Many factors could cause actual events to differ materially from the forward-looking statements made on this call. For more information about these risks and uncertainties, please refer to the risk factors in the company's SEC filings made from time to time. You are cautioned not to put undue reliance on forward-looking statements, and the company specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call, whether as a result of new information, future events or otherwise. Please also note that we will refer to certain non-GAAP financial information on today's call; please refer to our earnings release for a reconciliation of these non-GAAP financial metrics. I would now like to turn the call over to our CEO, Michael Colglazier, who will begin on Page 3 of our presentation.
Thanks, Eric, and good afternoon, everyone. It's been a quick one and a half months since our last earnings call. I'm happy to share we've been advancing the many efforts across the company in line with our plans and prior guidance. We've delivered the first of our new spaceships from our assembly hangar to our test and launch hangar. Ground testing of that spaceship is underway, and we remain on track to commence flight testing in Q3 and spaceflight in Q4. With commercial spaceflight operations continuing to draw closer on the horizon, we've accelerated efforts across the company to prepare for the ramp of activity. We're hiring our next group of world-class spaceship pilots as we prepare for flight test and ongoing spaceflight operations. We provided our roughly 650 founding astronauts, who make up roughly a year's worth of advanced bookings, with expected flight windows in 2027 and early 2028. We've received excellent reception and early booking response to the newly priced spaceflight expeditions we released to the market in April. And we began construction of our rocket motor assembly line in Phoenix, which is expected to be operational in Q4. In addition, we've also managed the financial strength of the company. Spending continues to decline quarter-by-quarter, debt retirements are being made on or ahead of schedule, and cash balances are being maintained at appropriate levels as we work through the final quarters of our pre-revenue phase. Our agenda today will be relatively light, reflecting both the short time since our Q4 earnings call and the consistency of progress against our prior statements and objectives. Turning to Page 4. Since our last call, we finished the major structural task with our first spaceship, and we were all pleased to reach the weight-on-wheels milestone in April as we moved the ship from our assembly hangar to our test and launch hangar, which is co-located on the grounds of our Phoenix campus. Outstanding work by our entire team. Structural assembly continues to progress as planned for both our static test article and our second spaceship, and the images on Page 5 showcase some of the larger parts of our static test article coming together. As you saw during the build of our first spaceship, the final assembly process moved quite rapidly. This rapid assembly process continues with the static test article, which, as a reminder, is built for extensive use in our testing program but will not be flying. Our second operational spaceship will follow the static test article, and this ship has begun fabrication. We will again leverage the same rapid assembly process for the second spaceship, and we expect the second ship will enter service between late Q4 2026 and early Q1 2027. This timing keeps us on track with our plans to substantially increase the number of spaceflights per month during the first two quarters of 2027. Turning to Page 6 to talk about our ground test efforts. At a technical level, our ground test approach is comprehensive and takes advantage of industry best practices with testing progressing in parallel across multiple locations. We've made purposeful changes in our approach to ground testing versus the process that was used with our original spaceship Unity, and the upfront investments we made in this area are now paying off. We purposely invested in off-ship testing infrastructure to significantly increase the number of systems tests that can be accomplished prior to and during the final spaceship assembly. Our Safety and Test Center in Irvine, California has been running parts of our ground test campaign for many months. The image on this page showcases our Iron Bird test platform, one of the many off-ship infrastructure investments we've made. These investments have enabled us to complete large amounts of the ground test program and dedicate facilities with purpose-built test rigs and equipment. This parallel off-ship testing activity reduces expected time spans for the on-ship ground test elements with much of the on-ship testing focused on verification of systems installations rather than first-time checkouts of hardware. At a practical level, this means we can now advance our new spaceships from structural assembly through on-ship ground testing and into flight test in much less time than what was required with our Unity spaceship while having a more robust ground test program overall. Moving to Page 7. We hope you've all seen our recently released episode of We Build Spaceships, which provides a great overview of our ground testing efforts. The link to the video is on this page. I'll summarize by highlighting the various facilities where this important work is taking place. First, at our Safety and Test Center in Irvine, we continue to conduct key qualification tests of our hardware. Qualification testing puts the hardware components through the paces of the conditions they see in flight, including temperature and vibration as well as extreme conditions they could be subject to. This past quarter, we completed dozens of component qualifications, including our central computer. This computer is the heart of the digital flight control system, which translates pilot inputs into commands to move the flight control surfaces at the back of the spaceship. We are also testing systems on our Iron Bird, a test platform that allows full system-level testing of how hardware responds in flight. Second, at the Southwest Research Institute in San Antonio, Texas, we have completed testing of our flight control surfaces under loaded flight conditions and we're now preparing to structurally test our wing, fuselage and feather subassemblies. These tests are part of our overall structural testing effort, which is conducted to verify that our as-built configurations meet or exceed the design standards we have set out to achieve. These tests also allow detailed correlation of the various analytical models that we use to predict behaviors in flight test and commercial service. Third, our team continues to qualify various software and avionics systems at our engineering headquarters in Orange County, California, and at vendor facilities across the country. Software plays a vital role in our spaceship, especially in our new flight control architecture, and we are using industry best practices to ensure our code is ready and safe. And fourth, in the test and launch hangar in Phoenix, our team is now completing installation of many electrical and mechanical systems that are embedded inside the ship while also conducting a range of on-ship production acceptance tests on systems that have been put in place, verifying the quality of each system as it's installed. In June, the team will begin integrated vehicle ground testing, which is used to check out complete end-to-end performance of the vehicle. Turning to Page 8. I'd like to talk briefly about our flight test program. When our ground testing in Phoenix is complete, we'll carry the new spaceship to Spaceport America using our launch vehicle, Eve. Once we are in New Mexico, we will start the glide flight phase of testing. This will be akin to the glide testing we did with our Unity ship. However, the duration will be substantially shorter given the faster turn times of our new delta class vehicles. We continue to expect the flight test phase to commence with glide test in Q3, progressing to rocket-powered flights in Q4. As I mentioned on our last call, one of the many ways we are preparing for the first flight test of our new spaceship is by bringing our prototype spaceship Unity back for an encore performance. Unity's glide characteristics and energy management profile provide an outstanding real-world proxy, which, in addition to extensive simulator training, will prepare our pilots to put our new spaceships through the required flight test points. This image from earlier this week shows Unity in its preflight configuration with our launch vehicle, Eve. We are expecting Unity to be back in the skies later this month for the first of several glide flights above Spaceport America. Moving to Page 9. Our key scheduled milestone dates remain consistent with the expectations we shared during our last earnings call, which is great news. As those who track the aerospace industry know, keeping forward momentum in line with expectations is notoriously challenging with these complex programs. Our ability to maintain consistent progress against our schedule is due to the massive effort, ingenuity and nimble adaptations from our Virgin Galactic team. Great job to all of you at VG who are listening in. Page 10 highlights some of our preparations for commercial spaceflight operations. Talent is key to our business. Most of our hiring needed for commercial spaceflight operations will come in the third and fourth quarters as we continue to manage our costs prudently. A few key roles will be needed earlier, including the expansion of our truly world-class pilot core. The licensing process for our new spaceships is well underway, and we are working closely with the FAA to ensure all elements are submitted according to plan and the licensing process moves ahead accordingly. We anticipate the various elements associated with the new Part 450 licensing regime will continue throughout the year, and we expect to receive our license prior to our first powered flight in Q4. We have approximately 650 founding astronauts booked for Virgin Galactic spaceflight expeditions. They are an amazing group of people, and collectively, they represent around a year of advanced bookings for the business, which is a tremendous asset as we begin operations. With clarity on flight windows growing substantially as we near the start of commercial spaceflight operations, we have given each of our founding astronauts a rough expectation of their flight window via a newly introduced Astronaut Portal. We expect the majority of our founding astronauts will complete their spaceflight expedition during 2027 with the remainder flying in the first half of 2028. We recently opened a limited number of bookings for Virgin Galactic spaceflight expeditions, each priced at $750,000, with flight dates expected in mid-2028. The response has been strong and global in nature, and we've received qualified inquiries from customers across more than 20 countries. We're now actively progressing through the booking process with individuals, research organizations and government agencies. As a reminder, booking of a spaceflight expedition is a deliberate process that typically unfolds across several months, as customers move from initial engagement to in-depth conversations continuing through a detailed review of terms and conditions and ultimately to the booking of their expedition. This process is consistent with other high-consideration, high-value experiences. With that said, many of the conversations we are having are moving to the contracting phase more quickly than we would typically expect. We are very encouraged by the pace we see. We secured deposits for a meaningful portion of the available seats at this price point, and I expect we will close this limited tranche of spaceflight expeditions at the $750,000 price during our glide flight program in Q3. As we shared previously, once this tranche is allocated, we will pause new bookings and begin onboarding this next cohort of astronauts. Following that, we plan to open a subsequent tranche likely at a higher price point. And finally, before I hand the call over to Doug, I am happy to share that construction has begun on our new rocket motor assembly line located adjacent to our spaceship assembly hangars at our Phoenix campus. We have a substantial number of motors already in inventory that will carry us through flight test and into the start of commercial spaceflight operations, but we plan to ensure a steady ongoing supply to support our growing spaceflight cadence. In this regard, we plan to have the new rocket motor assembly line operational in Q4. This timing aligns with the completion of our second spaceship, allowing us to shift our talented team in Phoenix from spaceship assembly to rocket motor assembly without missing a beat. Doug, let me pass the call over to you for the financial update.
Thanks, Michael. I'll start with our financial results for the quarter just ended and follow with a few details about our recent capital market activities. Then I'll provide more color on our projected cash flows and the P&L as we move into commercial spaceflight operations and scale the business. With regard to our recent financial results and our projections, you'll notice the trend of continuous improvement in free cash flow because the peak spending for spaceship development is behind us. We've been moving through spaceship assembly and into testing, which results in a progressively smaller cost footprint. Moving to Page 11. In the first quarter of 2026, we generated revenue of $200,000 from access fees related to future astronauts. Total operating expenses for the first quarter were $66 million, a 26% reduction from $89 million in the prior year period. This change reflects a continued shift from R&D to capital investments in production of our spaceships and lower overall spend as we move through the assembly phase of the first spaceships. Our first quarter net loss improved by 23% to $65 million compared to $84 million in the prior year period. Adjusted EBITDA improved by 24% to negative $55 million in the first quarter compared to negative $72 million in the prior year period. Capital expenditures were $40 million, down from $46 million in the prior year period. Free cash flow was negative $93 million in the first quarter, a 23% improvement compared to the prior year period. Moving to Page 12. We ended the first quarter with $251 million in cash, cash equivalents and marketable securities, which includes $11 million in gross proceeds raised through our at-the-market, or ATM, equity offering program. Not included in that cash balance is $52 million in gross proceeds from the ATM during the month of April. On April 30, we announced the potential redemption of $10 million of 2028 first lien notes due in exchange for shares of common stock. This redemption is being made ahead of schedule and reduces the debt payments due in September of this year. This is a great example of the flexibility built into our capital realignment transactions that we completed last December, and which we discussed during our last earnings call. We recognize that there's dilution caused by the ATM program and debt redemption I just described. However, we expect the dilutive impact will be far outweighed by the value created from assets being built with this capital. These assets are recorded in our property, plant and equipment on the balance sheet, which totals $427 million at the end of the first quarter. Moving to our projections. Revenue for the second quarter of 2026 is expected to be approximately $100,000 for future astronaut fees. Free cash flow for the second quarter of 2026 is expected to be in the range of negative $87 million to $92 million, with slightly less than half being for capital expenditures as we continue to prepare our spaceships for commercial service. We anticipate that free cash flow will continue to improve modestly in the third quarter of 2026. We will be growing various functions within spaceflight operations during flight test and in preparation for the start of commercial service, but we expect this to be more than offset by larger reductions in capital expenditures as spaceship development progresses. During the fourth quarter of 2026, we expect to see continued improvement in spending and also the beginning of revenue for spaceflight operations. We have been presenting the annualized business model shown on Page 13 during several of our recent earnings calls. By the fourth quarter of this year, we expect operating expense, including variable spaceflight costs, to be in the quarterly range of $70 million to $80 million. Notably, this level of quarterly spending aligns with the annualized view of the model as shown in the first column on this page. Our cost footprint is expected to be reduced to this level by the fourth quarter because we are progressing from spaceship manufacturing to the launch of commercial spaceflight operations. Next, I want to highlight the powerful unit economics, by which I mean the economics of a single flight that are now possible given the dramatic reductions in the cost of human spaceflight driven by our highly reusable system. Most importantly, reusability drives the cost of each flight down dramatically. This, combined with the high value of our spaceflight experience, which supports our pricing model, results in a high contribution margin per flight. In other words, the revenue from each flight can far exceed the variable cost for that flight. Given the low unit cost structure, even at historical $200,000 price points, each flight is expected to generate a positive contribution margin. For illustrative purposes in the economic model on Page 13, at an average price of $600,000 per astronaut, we're expecting a very healthy contribution margin of over 80%. As we scale operations and given the baseline cost structure shown on this model, we begin to see the tremendous flow-through of profit to the bottom line. Now let's circle back to expectations for early commercial operations. In January of 2027, we expect to fly four flights per month and reach eight flights per month by Q2. Ahead of this, our cadence of spaceflights in Q4 of this year will be intentionally constrained to allow time for learning between flights. As we get closer to the launch of commercial spaceflight operations, we'll provide more information on the expected dates for the first flight. Additionally, we are modeling the majority of our early flights with average revenue per astronaut at $200,000. In the fourth quarter, cash receipts are expected to exceed revenue as we begin to collect customer payments ahead of flights planned for early 2027. Given the strength in our balance sheet, our declining spending and our unit economics, our liquidity supports our transition to commercial spaceflight operations. Moving beyond 2026, we expect to achieve modest quarterly positive cash flow within 2027 as we fly a large percentage of astronauts with the reservations that were historically sold at lower prices. We forecast that we will achieve the adjusted EBITDA shown in the first column of the business model on Page 13 on an annualized basis sometime during 2028 as the average ticket price improves. With that, I'll turn it back over to Michael.
Thanks, Doug. Finishing up on Page 14 for the picture of our first production spaceship in the test and launch hangar. Every time I view our spaceships, I marvel at both the engineering and artistry that underpin everything about the Virgin Galactic spaceflight system. Like all spacecraft built to handle the rigors of leaving and returning to the Earth's atmosphere, our spaceships are powerful, incredibly strong, durable and robust. Distinctively, our spaceships are stunning achievements of industrial design with a grace, elegance and flat-out cool factor that is unique to Virgin Galactic. Just wait until you see this ship with its new livery. We're proud of our progress, and we've opened up tours of the spaceship factory for founding astronauts, prospective customers and invited guests. We expect to christen this first ship and send it out to Spaceport America around the time of our next earnings call. We're moving with momentum, and it's awesome to see. Let's open the call for questions.
Questions and answers
And our first question comes from the line of Oliver Chen with TD Cowen.
Michael and Doug, nice to see all the progress. Regarding the early booking responses that you spoke to and the encouragement there, what's the nature of what you've seen and also the implication for decisions on pricing? Also, the second ship is pretty exciting as well. What have you learned from the first ship that will bode well for the process and the second ship and then future ships perhaps? And Doug, on the ATM program, which helps fund the ROIC-accretive actions, what should we know about your use of that program going forward and/or the framework?
Thanks, Oliver. I'll start it out. It's Michael here. I think the nature of who we're talking to is really interesting and encouraging. Among our founding astronauts, many are people who have always thought about going to space, always had the dream of going to space and wanting to get there. We see some of those customers. We see people who want to fly with their family members, parents or children. We're seeing people coming and saying, 'I want to do this with my friends. I want to do this as a buddy trip. I want to do this as a girls' trip.' We're seeing people who are coming in and saying, 'I have research that I've been wanting to do; how do I connect with your research program?' We have governments that are not countries with large independent human space programs, but governments who have an interest in access to space reaching out to us. And we have corporate charters wanting to book for a variety of corporate reasons. The diversity is fantastic, and I'm very heartened by that. The general shift in tone from about six years ago when I started—of, 'Why would you think about going to space?'—we aren't seeing that anymore. I've been in London and New York connecting with potential customers, and the tone is, 'This is amazing. I'm so excited by this.' You see a range of people: some say they want to do this in a couple of years for a milestone birthday, and some say 'I just want to go do this right now,' and we send them over to our sales team. So hopefully that gives you a little bit of sense of the nature of the people we're talking to. On pricing, we will continue to have the same purposeful pricing strategy. The value has to massively exceed the price we charge. That's our first premise. We believe it's doing that and more. So we expect we'll retire this first tranche at $750,000 and open up the next tranche at a higher price. I don't think we're ready to say exactly where higher at this stage, but I do expect it will be higher. We'll probably continue that for a couple more increments and then study it out further. There's a sizable shift between the first ship and the second. The second structural parts are going into our static test article, and then the second spaceship is essentially the third item through our production line. One of the big things I'm noticing is the consistency with which the carbon parts that we're manufacturing are coming out. As we get to our second spaceship, we've kind of figured out the recipe, as we used to describe it. We've solved the manufacturing issues there. That means parts are coming out clean and they're easy for us to take in and move forward. The first assembly we went through was super smooth because we had determined an assembly process all the way through. At the same time, the first time through you find the little things—small issues where two things clash when you try to put them together and you didn't quite expect something that is in the way and you have to move it. That's all cleaned up now. The net of all that is, going to the second ship, we expect it to come in functionally more cheaply in its set of parts because we won't have to redo a carbon part; they're coming out more consistently. The process will be more swift in assembly and the net of that means it's quicker and less costly to build. We expect that will continue more so as we expand our fleet over time. Doug?
Thanks for the question, Oliver. Regarding the ATM and our plans going forward: we've used the majority of it. It was a $300 million program; we have $87 million left on it. It's been a successful program and it has built up our cash balance to help us get through this transition phase to the start of commercial service. Going forward, it provides additional growth capital for us. For example, we've expanded our rocket motor factory capacity so we can have a larger volume of motors running through for growth, and it also provides capital for us to continue work on a launch vehicle program. Those are good opportunities for additional growth capital. So it's there for us if we need it. But I want to point you back to the unit economics we were talking about earlier and where we're headed. We're getting into a phase now where we've become stabilized and self-sufficient with the operations of the company. That will drive less reliance on things like ATMs going forward, which is positive as we get to commercial service.
Yes. Okay. And there's been a lot of general enthusiasm with SpaceX and space at large. You have a lot of partnerships or institutional ideas around governments and spaceports as well. What are your thoughts on the evolution of more recurring revenue and also the nature of how you're different from SpaceX and what this may mean for your strategies or the industry at large with space being a big idea?
I'll start at the end, Oliver. Space is a big idea, has been and is getting a lot of momentum. You're seeing more innovation and investor interest across the sector, and I think that's positive and well merited. There's a lot of energy around SpaceX, and I think that will continue to generate more innovation within commercial space. I think we will benefit from that. You asked about recurring revenue and how we're different. One thing is we are clearly focused in this first business model on human spaceflight. That is a part of what SpaceX offers at much higher price points. Our price points start around $750,000 for the new tranche and historically at lower levels like $200,000; those are orders of magnitude less than some other offerings. Our focus is on the experiential benefits. We will take that model to multiple spaceports. We've built substantial infrastructure now—those fixed costs are largely behind us and the nonrecurring engineering is behind us—so now we're looking to scale. We continue to work with partners in Italy on how and when we bring that spaceport forward, and we continue discussions with additional countries. I'm very excited about the potential to bring spaceports to additional countries. That leverages the infrastructure we've put in place and you start to see the flow-through economics that Doug talked about. There's also interesting opportunities with governments that want access to space for research, Earth observation or other purposes. One thing we'll explore are potential ride-along opportunities or other government-related payloads. We are qualified under certain government procurement vehicles and we'll continue to explore ways to be supportive of government customers while building our commercial business. I think you'll see expansion in the types of people and markets that can use these space vehicles going forward. That gives us more recurring and diverse revenue opportunities.
Our next question comes from the line of Greg Konrad with Jefferies.
Maybe just start with one clarification question. I think you mentioned $200,000—was that per passenger? And how long do you expect that to be at that price level given that in the past you talked about potentially filtering in some shorter-cycle customers at higher price points? And then in terms of the new sales at $750,000, I think you talked about maybe that coming in mid-2028 if I heard correctly. Assuming the target base model you've laid out and the $600,000 per ticket average, as you get to that higher price point, does anything change on the cost side? Or should we think of that as largely incremental to the base margin you laid out on the initial fleet?
Thanks, Greg. We do have a lot of early reservations that were priced at $200,000 to $250,000. These were sold years ago, and we are, of course, prioritizing those customers who have been with us for a long time, so you'll see those at the front end on a FIFO basis. But we do have opportunities to mix in other prices. We specifically talked about an opportunity for some customers to come in earlier to be one of the first thousand astronauts to space, and so that comes at a premium price. That program is an example of how people can be mixed in at earlier flights or higher price points. You'll see other ticket prices come in: we've had other tickets at $450,000 and then $600,000 and now $750,000. How those plan and sequence is TBD, but to set expectations: at the very beginning you'll see the lower-ticket reservations. Some customers moving up in line for the first thousand will have to be in the first two quarters of the year based on our flight rate. That gives you a sense of when you'd see higher price points start mixing in and begin to elevate our average price.
I'll leave it at two.
Next question comes from the line of Myles Walton with Wolfe Research.
Michael, I think you talked about the Part 450 licensing regime, and I know that just went effective. How different is the license regime going forward? How much more effort do you have to obtain that license? And then as you ramp flights, could you remind us of the ongoing recurring licensing? Is there any reason to think that would be an obstacle to getting up to speed?
Myles, great question. The Part 450 work is good news. We've been working with the FAA for quite a while on this. We have turned in our application for our space operator's license, and it has been accepted—the FAA has received our application and provided acknowledgment. That creates a fairly structured process and understood timeline going forward. We expect that process to conclude before we perform our first powered flight. We have a very focused team working closely with the FAA on this, and Mike Moses is our point on all of that and very well engaged. As you know, each of our ships are experimental in nature and must have experimental airworthiness certificates. Eve, our launch vehicle, has that. Our first delta ship will need an experimental airworthiness certificate, which happens after we finish construction and testing. We expect our first delta ship will receive its experimental airworthiness certificate just ahead of taking it to Spaceport America before doing captive carry and glide flights. Those experimental airworthiness certificates are on recurring renewals; we've been doing that with Unity and Eve all along and expect that to continue. So on balance, we feel confident about the licensing piece.
No, that's great. Go ahead.
Yes. No, please go ahead and remind me on the ramp question.
Yes. I was just wondering, from a regulatory perspective, as you ramp, is there any ongoing recurring approvals you're going to need that in any way risk the recurring nature of flight? Obviously, flying four flights in January is not as quick as you want to be, but it's much quicker than historically. Any regulatory constraints as you ramp?
I don't see licensing as a constraint on the ramp. We expect to continue close partnership with the FAA, as we did with all of our Unity flights. Our ability to turn the ships historically wasn't constrained by the FAA or licensing; it was our own inspections and maintenance processes. That's what is different with these new ships. So I don't anticipate licensing complications that would impede the ramp, and we will be partnering with the FAA on every flight as we go.
Okay. Great. And just one last one, if I could. Have you reached out to the administration from a perspective of investments? I know they've expressed interest in many areas. I'm curious whether your emerging area might be an area of interest for them as well—especially from an investment or partnership perspective?
We are definitely in connection with the administration, especially some of the relevant departments, as you'd expect—both in civil space and defense-related areas. I think there's interest in a number of areas. When I say investment, that can mean sponsoring activities that help us add capabilities or expand capacity versus a direct equity investment in the company. There are also conversations with other groups that may be interested in partnering with us for commercial business or providing growth capital to support expansion. Nothing to announce right now, but as we become more practical and the assets are visible and tangible, the opportunity to discuss partnerships and potential investment expands. We recently added Megan Prichard as our Chief Growth Officer. Part of Megan's remit will be focused on sales of spaceflight expeditions, but also on broader growth initiatives that include new business and government opportunities.
And we do have our last question coming from the line of Kristine Liwag with Morgan Stanley.
This is Gaby on for Kristine. Last quarter, you shared encouraging progress on the Italy-based spaceport opportunity, including airspace workaround, potential flight path and infrastructure requirements. Could you provide an update on where that study stands today and what the key next steps are?
Thanks, Gaby. I'll talk about Italy and then more broadly about second spaceports. The work continues. The main part of the effort we had done with ENAC—the Italian equivalent of the FAA—has been completed. We understand how and where the flight path would be, how to deconflict airspace, the approach we would take and all that structural work. Our next steps are focused on the business model with our Italian partners and the timing in which we want to proceed. We'll be working through what a public-private partnership might look like. We remain incredibly excited about that opportunity, and the same excitement is shared by our Italian partners. In parallel, we continue to talk with other potential spaceport locations globally. We've said before we think there are probably three to four permanent spaceports and potential for additional seasonal or partial-year spaceports. Those conversations are continuing in a very positive way. There's clear understanding of the economic engine a fully functioning spaceport brings, the opportunity for a government to have an onshore commercial space presence, and the ability to bring tourists and customers to those countries. We're looking forward to continuing those dialogues.
Ladies and gentlemen, that concludes the question-and-answer session. Thank you all for joining. You may now disconnect.