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Good afternoon. My name is Christina and I will be your conference operator today. At this time, I would like to welcome everyone to the Virgin Galactic’s Third Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I'll now turn the call over to Eric Cerny, Vice President of Investor Relations. Sir, the floor is now yours.

Thank you. Good afternoon, everyone. Welcome to Virgin Galactic’s third quarter 2024 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 two 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 risk and uncertainties. Many factors could cause actual events to differ materially from 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. With that, I would like to turn the call over to Michael now.

Thanks, Eric. We've had a powerful and productive quarter at Virgin Galactic. I'll leave with three main points to open the call. First, and as planned, we've moved into the build phase of our spaceship program. This is the phase when we are building tools, fabricating parts, and assembling the spaceships. I have to give a shout out to our engineering teams whose tireless work has successfully elevated our prototype spaceship to a true production model. We now have a spaceship design that can be manufactured efficiently and maintained effectively with enormous improvements in reusability and turn time while keeping safety above all. We are hyper-focused on the critical path of the build phase. Working in close coordination with our partners at Bell Textron and Qarbon Aerospace, our spaceship program remains on track to begin commercial operations in 2026. Second, we are directing our efforts towards the next phase of growth by expanding our fleet beyond our first two spaceships. We have an exciting opportunity to capture economies of scale from our existing investments. The non-recurring investments we have made in design engineering and manufacturing infrastructure allow additional spaceships to be built relatively quickly and cost effectively. This enables a straightforward path to add a third and a fourth spaceship at Spaceport America. Taking advantage of the flight capacity provided by a third and fourth spaceship requires the addition of a second mothership. With the strong progress made on the Delta program, we now have the engineering capacity to pick up the design work on a second mothership. This additional mothership and two additional spaceships are the keys to unlocking substantial economic expansion. Third, with confidence in our customer experience and clarity in our business model, we plan to accelerate this economic expansion through the targeted use of growth capital. While our existing capital on hand is projected to be sufficient to bring our first two spaceships into service and drive positive operating cash flow, a two-spaceship operation does not capture the full economic potential of a spaceport. The growth capital we plan to employ will allow Virgin Galactic to deliver a second mothership and two additional spaceships much earlier than if we were to fund these ships solely through organic growth. Our strong cash position gives us flexibility in timing and pace of acquiring this growth capital. And this allows us to make prudent progress on fleet expansion, while maintaining continuous strength in our balance sheet. Importantly, the expanded fleet enabled with this growth capital creates an economic engine for Virgin Galactic. While we may adjust our capital structure from time-to-time, we expect the cash generated by this economic engine will be sufficient to fund operations going forward, including further fleet buildup and expansion to additional spaceports. With that, let's get started on slide three with the agenda for today's call. I'll share visibility into the progress, challenges, and solutions that have shaped our spaceship program during the quarter. We'll then revisit our business model and growth strategy, which sets the stage for our fleet buildout and the launch of our second generation mothership program. Doug will then cover our financial results from the quarter, including how we're thinking about growth capital to optimize our revenue and profit growth. As I shared in the opening, we are well into the building phase of our spaceship program, with tools being completed and parts beginning to be produced. Our near and medium-term milestones remain the same as we shared last quarter. As a reminder, we expect part fabrication will continue ramping up in Q4. Assembly of the spaceships in Phoenix is expected to commence in Q1 of 2025, with the rollout and testing of our first ship expected in the second-half of 2025. Since our last call, we have refined our schedules to include day-by-day management of tool deliveries, parts fabrication, and the build assembly sequence. As I shared at the opening, we expect to launch commercial operations in 2026. We are well through the majority of the non-recurring engineering investment, also known as NRE, associated with our Delta spaceship program. Engineering design and manufacturing facilities comprise the largest part of NRE, but the tools used to make the parts for our spaceships are also a large non-recurring item. These high-quality tools will enable us to quickly fabricate the parts for future spaceships with the full cost of an incremental spaceship estimated at $50 million to $60 million per ship. Page four shows examples of completed tools that are being used to create carbon fiber parts for our spaceships. Our tools are made with a material known as INVAR, a nickel-iron alloy which provides the gold standard in delivering precision parts time-after-time. Moving to page five. Our testing work will continue throughout the duration of our spaceship program, and this effort is also well underway. The Learjet shown here is owned by CalSpan, a company well known in flight test circles for testing fly-by-wire configurations in advance of actual flight testing. Working with CalSpan, our engineers and spaceship pilots are able to assess flight control software on a flying test bed prior to the first flight of our Delta spaceship. This is one of many ways we are able to test critical parts of our system well in advance of our first spaceship flight test. Turning to page six, we are ramping our hiring in the Phoenix Mesa area this quarter in advance of the spaceship assembly work in early 2025. Hiring emphasis is on AMP mechanics, manufacturing engineers, quality inspectors, and other key personnel to augment our experienced teammates, who have relocated to Phoenix. Many of our highly experienced maintenance and technical operations teammates from New Mexico will also be joining the team in Phoenix for the building of our first two ships, after which they will return with the ships to Spaceport America to support flight tests and commercial operations. We are all excited as our spaceship factory comes alive. Moving to page seven. Earlier today, we released a short video to give a glimpse into the exciting work that is happening at our partner facilities as major tools continue to arrive and parts fabrication ramps up. As we expected in a project of this scale, complexity in the manufacturing of certain parts can often lead to design revisions and the overall design process can take longer to complete than originally expected. Working with Bell and Qarbon, who in turn are working with their suppliers, we have identified and implemented opportunities to reduce the impact of these design extensions. Together, we have been able to re-sequence elements within our build planning to maintain overall program momentum and delivery within our expected timelines. In summary, lots of great work underway with our spaceship program, moving as forward as planned and on track for commercial service in 2026. Turning to slide eight, I want to add more context around our strategy for growth. Last quarter we shared a video describing our business model, and page eight shows a copy of the economic slides that we highlighted in that presentation. Many of the costs required to operate a spaceport are fixed or semi-variable, and you can see this in the difference between the initial fleet and the expanded fleet columns. This provides an excellent opportunity to drive economies of scale as we expand the number of ships in our fleet. The non-recurring investments we have made in our Delta Spaceship Program allow us to cost-effectively deliver a third and fourth spaceship. Unlocking the profitability of those spaceships requires an additional mothership to support them. So turning to slide nine, with the strong progress we have made in our Delta program, we now have the engineering capacity to restart work on our second mothership. This second generation mothership will look and perform similarly to our current mothership eve, which has performed well for us following an extensive modification in 2022. The bar at the top of this slide provides an illustrative look at the schedule for our next mothership. Spending is expected to be limited through most of 2025 as we complete our design efforts, with commitments increasing as we approach the build phase of the mothership in 2026. We expect the pace of the second generation mothership to pick up as resources are released from the Delta Spaceship Program. I'll hand the call over to Dough to share the quarterly update and explain more about our growth plan.

Thanks, Michael. Turning to slide 10, revenue for the quarter was $402,000 driven by future astronaut membership fees. Total operating expenses were $82 million, compared to $116 million in the prior year period, primarily driven by lower R&D and SG&A expenses. Capital expenditures for the quarter were $39 million, compared to $13 million in the prior year period as we ramped up investment in property, plant, and equipment related to development of our Delta Class fleet. Free cash flow was negative $118 million in the third quarter, compared to negative $105 million in the same period last year. Turning to slide 11, our balance sheet remains strong with $744 million in cash, cash equivalents, and marketable securities. Moving to our projections, forecasted free cash flow for the fourth quarter of 2024 is expected to be in the range of negative $115 million to $125 million. While we typically have not provided a multi-quarter outlook for free cash flow, we think providing additional color on the free cash flow profile for 2025 is helpful. As we are now in the build phase of the Delta Spaceship Program, we project an uptick in spending in Q1 2025 as we reach the peak of payments for tools and parts. With these capital investments behind us, costs are expected to be meaningfully reduced through the remainder of 2025, so we progress through assembly and tests of our new spaceships. The lower spending trend contributes to the delivery of our initial fleet of two new Delta spaceships into service with the capital we currently have. These ships are expected to generate positive operating cash flow, which can be used to organically expand our fleet. While this is good, substantially greater returns can be achieved by accelerating the development of our expanded fleet. As Michael described, with the addition of another mothership plus Deltas 3 and 4, we expect to double our revenue, while quadrupling EBITDA by leveraging our fixed cost base at Spaceport America in New Mexico. Relative to the pace at which we can expand our fleet organically by utilizing future cash flow from operations, we see a tremendous opportunity to accelerate revenue and profit with an infusion of growth capital. With targeted investments in a new mothership and two more spaceships, we protect that the additional growth capital would enable us to achieve a fully utilized spaceport in 2028, at least two years earlier than we would otherwise. From there, our first fully utilized spaceport becomes the economic engine that generates more than enough cash flow to expand to other spaceports around the globe. We foresee that the right amount of growth capital to achieve the above goals while also maintaining appropriate cushion on the balance sheet at all times is $300 million. Our strong cash position gives us flexibility and timing and pace of acquiring this growth capital. And this allows us to make prudent progress on fleet expansion, while maintaining continuous strength in our balance sheet. Furthermore, the value that can be created with this remaining growth capital is expected to far outweigh the cost of that capital. We could go slower and not raise the growth capital, but that would delay EBITDA expansion and the significant value that EBITDA expansion represents. To wrap up, we are excited with the progress made on the Delta Spaceship Program. Building upon this foundation, we are now looking to capture the profit that can come from a fully utilized spaceport, paving the way for further self-sustaining global expansion. Back to you, Michael.

Thanks, Doug. We're pleased with our progress with our Delta Spaceship Program, as well as our plans to accelerate the growth of Virgin Galactic. Q4 will bring more milestones for the Delta program as we prepare to assemble the first two spaceships next year. We're excited to advance our growth strategy and start the design process of our second mothership. So, operator, let's open the call for questions.

Thank you. [Operator Instructions] Thank you and your first question comes from the line of Matt Akers of Wells Fargo. Your line is open.

Yes, hey, good afternoon, guys. Thanks for the question. I was wondering, what's your latest thinking on sort of reopening ticket sales, given, you know, Spaceship 3 and 4 sounds like we'll open up quite a bit of additional capacity? Just curious how you think about sort of the phasing of when you might sell tickets for those?

Thanks, Matt. I think you'll see us opening ticket sales when we are probably within a year or less of flying private citizens on our Delta ships. So somewhere towards the back half of 2025 is when that's most likely to be there. And the reason, as we shared before, we want to hold, right now we want to make sure we're taking advantage of yielding. We have a business that we expect is quite supply constrained relative to demand. And we think it's appropriate to have people generally with a two-year time window from the time they sign on board, building up the journey and then going ahead and letting them come to New Mexico for the week of training before flight. Once we get out in front of two years, it's not as beneficial. And so that's a good sense of timing for us.

Got it. Thank you. And then I guess just a question on any additional equity issuance for the as you pursue this mothership. I know you've talked about sort of the optionality of how fast you want to accelerate, but I guess do you foresee more equity issuance under that program given the current program, and is there sort of a minimum kind of cash balance we should think -- you guys think you need down the balance sheet kind of going forward here?

Yes, this is Doug. Thanks for the question. So we talked about growth capital. And to put that in perspective, we've described how we have enough cash on the balance sheet today to get the first two deltas into service and become cash flow positive, there's an opportunity to bring in growth capital along the way to accelerate the growth. And that would be really targeted at a second mothership and a couple more deltas to round out the fleet in Spaceport America. So we see this big opportunity to go forward with that because it brings in the economies of scale and we had an economic chart in here that shows the magnitude of that with the extra vehicles in our fleet, another mothership and two more spaceships, we can double our revenue and quadruple our EBITDA. So we're very interested in pursuing that and that's available, because we have a fixed cost base and the more volume we have and the more often we fly, the more leverage we get that goes to the bottom line. So we don't have an immediate need to bring in that growth capital, but we do see the opportunity to do that ahead of any vehicle investment. So we have mothership ready by 2028 is the timeline we're targeting and also to ensure we always have a strong balance sheet along the way. So there's no minimum cash balance that we're putting out there, but the growth capital we mentioned is more than enough to support all of our needs for growth and also keep the values strong.

Okay, great thank you.

Your next question comes from the line of Oliver Chen from TD Cowen. Your line is open. Q - Oliver Chen Hi Michael and Doug. We're in quite a dynamic environment. What are your thoughts around the potential for tariffs and anything we should know as you think about sourcing as that may add some risk to the production? And then as we think about your partners, how's everything going with your manufacturing partners, Bell Textron, and Qarbon, any thoughts there? And then on the marketing side and just keeping engagement up, it sounds like everything's going really well as planned? What's on your mind in terms of the consumer engagement and marketing during this period and key priorities you have there?

Thanks, Oliver. As far as I think tariffs or other things that may be going on possibly in the future, we are reasonably insulated in our supply chain, right? Most of our efforts are coming from the United States and we build everything here in the United States. Our suppliers are all here in the United States. So our supply chain, I think, is connected to the United States in that regard. Bell and Qarbon have been really good to work with. We are -- as we said, in the midst of the build phase, you probably haven't had a chance to see it. We put just a real brief video out showcasing what it's like at one of Qarbon’s factories. They have two that are working with us as the one in Georgia. And they've been bringing in the tools that they use to build the carbon parts that need to be made before, of course, we can assemble them into our spaceship. And we had a couple of really big ones coming in there. So that work has been going and continuing, and the parts fabrication will be ramping up. The teams at Qarbon and Bell, it's super important partnership because in a complex aerospace development program like this, all sorts of things can come up where we think we're on a path to finish a design, which will create a tool that will allow us to order that tool through the supply chain, get it built, and there's a whole schedule for this. And then as we evolve, we learn something needs to change in order to get that tool manufactured the right way or the part manufacture the right way, it ripples back through, we make a small change in the design that requires a change in the tool and so forth. So that's happening back and forth frequently. And to your question, Oliver, Bell and Qarbon have been outstanding to work with in this regard, because we all see these topics at the same time. We can all jump onto the issue. We can work to resolve it either right away or if certain things are going to take us longer, we can work together with them to resequence the order in which things come. So you heard me talk about really hyper-focused on the critical path of the program. We do that in day-to-day, hour-to-hour partnership with our friends at Bell and Qarbon, and that's how we're maintaining our schedule going forward. So you heard us talk about really no change in our milestone expectations from the last quarter, because we're making the progress that we need and expect. You asked about consumer marketing. Obviously, we've taken not a full hiatus, but a much more quiet approach to our marketing during this phase because we're really focused on building. That will change as we move through the back half of 2025. But what you will see from us is as these big tools are coming into Bell and Qarbon, as the big parts come out, as we really start to assemble things that start looking like a spaceship, that's when we think it's relevant for us to lean forward a little bit and start sharing those stories, not just like here on an investor call, but putting that out for our retail investors, putting that out for our customers and fans, so that the excitement starts to build that, oh, these are the ships that are going to carry me to space, they're coming along. And you'll see us ramp up both marketing and event strategies around that.

Okay, thank you. And the Delta class announcement regarding the third and fourth ships sounds encouraging. What's underlying that decision and what you're seeing and does it interrelate to your thoughts on demand? Thank you.

Dough -- I'll take it, Doug. Kick in here. On one hand, this is our strategy all along, has to been to build the economic engine of fully utilized spaceports, right? You've heard us talk about that for quite a while. I'd say over the prior year, we've really put our heads down to focus on the first two Delta ships and getting those out the door so that with our existing mothership that's already in New Mexico, we can reach a cash positive basis. And in the effort of doing less super well and on time, we've just kept our focus on that and that has progressed very well as we talked about in the prepared remarks. So now is the right time to get back to, okay, well, we want to add more spaceships, so that we can carry more customers, drive more profit. And as Doug said, there's a lot of fixed and semi-variable cost in running a spaceport. So as we add capacity at the top and drive revenue, it really flows down with a lot of leverage. So the goal is to take advantage of these economies of scale and capture the EBITDA growth earlier than we would if we just funded everything through kind of the organic cashflow generated from operations, because otherwise we'd wait a while. It's really timed well because as we've moved through design phase and into the build phase of the Delta ship, we'll start to be able to free up engineering capacity that have been our engineers, who've been working on the spaceship can now move over to the mothership and that works out really well in kind of load balancing our engineering workforce. So this is the right time to get that going and as Doug said, by starting these now, it allows us to bring not only the second mothership but also the third and fourth Delta ship in by 2028. That'll allow us to have a nice step up in capacity at Spaceport America. And then of course we've already now built the tools and the manufacturing infrastructure to keep going, which is how we will then be able to self-fund growth to the next Spaceport and where we go from there.

Thank you. Sounds encouraging. Best regards. Happy holidays as well.

Thanks, same to you, Oliver.

Your next question comes from the line of Greg Konrad from Jefferies. Your line is open.

Good evening.

Hi, Greg.

Maybe just -- you gave some helpful color around 2025 free cash flow and the uptick in Q1 and then kind of reduction through 2025. Just with the commentary around growth capital, does the multi-year free cash flow outlook in the past, I think you had talked about 2024 and 2025 relative to 2023, has there been any change to kind of expectations around 2025 free cash flow usage?

No change because we've been planning this all along. So we have a trend down in 2025 just because of where we are in the life cycle of Delta. We've got a -- the CapEx going into tooling and parts fabrication. And so then the next phase is just a lower cost base because we're focused on assembly and test. With the mothership coming in, it starts off with a lower spend profile, because it's the engineering work at the beginning and then the spending ramps up later when at a higher level when we get to tooling and parts fabrication just like we did with Delta. So yes, the overall profile for ‘23, ‘24, ‘25 is the same. So we're expecting a trend down in 2025. And we can also add a little more color that we expect to be exiting 2025 at a level below $100 million a quarter of spend. And just one more bit of information that's helpful is more than half of our spend will be in CapEx. So you'll see a shift from expense to capital expenditures, because there will be this ramp in tooling and parts fab that I talked about, and then throughout 2025 half or more of our overall spend will be capital expenditure. So it shows that we're maturing through the process here and getting that infrastructure in place and the parts coming in.

And then when you talk about growth capital and kind of bridging to that acceleration and that was really helpful, you talked about the $100 million burn or under exiting 2025. Does that reaccelerate on those growth initiatives or it just doesn't improve as quickly, because now you're filtering in those growth capital on top of the production of the first and second delta?

So I think the right way to look at this is just where we're at in 2026. By then you start to see cash coming in, right, from the flights that we're doing with the delta class. So the whole thing starts to change to a cash flow positive business as we enter a commercial service with the Delta and ramp that up, first two Deltas. So the -- you'll see the cash burn continue to improve over time because of that shift towards money coming in now with commercial operations. And then we become self-sustaining at that point and then as we continue to add to the fleet with this growth capital, we build up even more cash inflows from that which feeds additional expansion of the fleet and into other spaceports. So it sets us up for the future beyond that, but that's the way to look at that trend.

And then maybe one last one for me I mean it was helpful you kind of size growth capital at $300 million, you said recurring production of Delta is $50 million $60 million. Can we think about the delta between that $300 million and the two Deltas as kind of going towards the development of the second mothership, just thinking about NRE and maybe the production of that?

Yes, the main use of the growth capital is really to get going on the mothership, right? Because we're still working on Deltas 1 and 2 and, you know, the next thing to be focused on is the design and then the tooling and then starting parts fab on a mothership. So you'll see that as the real use for that growth capital. And then we already have the factory and the tooling and everything in place for the spaceships that we would add to pair with that mothership. And then it'd all be coming together about the same time. So we have the fully utilized spaceport with the mothership and the two new spaceships arriving.

Thank you.

Your next question comes from the line of Myles Walton of Wolfe Research. Your line is open.

Thanks, good evening. I was hoping to maybe just make sure I understand the mothership, second mothership timing for 2028. I think earlier this year you had also had a timing for 2028 for the second mothership, is that right? And if that's correct, then is there something in the schedule that's actually moving with the growth capital you're talking about or what within the schedule is being enabled by the growth capital?

What we've been trying to do very clearly is ensure first things first. Let's take the cash we have on hand and use that to build these first two Delta ships so that we get to, you know, operating cash positivity and, you know, can kind of manage our destiny from there. So that's where we've been truly focused. That's going well and as planned. So what we want to do is obviously bring in enough funds that stay ahead of the cost ramp that will come with building this mothership, so that we aren't dipping into funds that we would be using for those first two spaceships. That timing to your point, Miles, is the same as we've described before. We want the mothership to come in in the ‘28 timeframe, as well as the third and the fourth spaceship, which we probably haven't been as explicit about in the past. So not only the mothership but also those next two spaceships would be together coming in ’28, so that we can put them all to use together and start driving profits from it.

Okay, got it. So this is more of a green light exercise than a change of your plan that sounds like it's consistent with your plan and that's more of you're gating the capital investment?

That's correct. We're just managing that through and I guess be more explicit about the timing of Deltas 3 and 4.

Okay, cool. And then, Michael, you talked about the Delta design, the feedback loops, and it sounded like it was more on the tool design, that you're having the feedback loops at the moment. Is that indicative that you haven't got down to component-level feedback loop designs, or are you through much of the component level design of the actual Delta Class and you're more into the manufacturing process design and that's where you're having the feedback?

Yes, so it's a combination of, I'd say, tool manufacturing feedback loops, as we're really working through the details of the lofts, some. And then an example that maybe is relevant for a wider group. We're in this, you know, the drawings left are really assembly drawings and, you know, the manufacturing work instructions that will come for building. And so, yes, just as a fairly simple example, the interior of our cabin has a floor to it and it has side walls that go in there. And these are all built in 3DX and the modeling software we use. Different people are working on those different parts. And as they were brought together, there's, I'll call it a flange that we use to kind of, you know, bolt these back down. And when we brought these together for how we're going to assemble, we realized we had a conflict in those areas. And so it was a fairly easy conflict to resolve from a design standpoint. You're like, oh, we'll just adjust the flange and make that into a different place. But that one little simple thing on the design made a change to the tool that was already in process. And so therefore we have to now rethink through the tool dynamic and you know, it all works out and we had plenty of time to sequence that into how we build it so we don't lose time off the critical path for that, but that's what we're trying to share is just it's kind of the blocking and tackling of moving through assembly drawings and manufacturing work instructions. We continue to identify elements that need revision. Sometimes those are pretty straightforward. Sometimes it needs a tweak to the design. Sometimes that's it. Sometimes those designs ripple back through the toolpath, and then we have to start adjusting schedule sequencing to keep everything on track. So I was just trying to give a little bit of color into -- those are the things that our teams are just battling day by day as is typical of a program like this.

Makes sense. All right, thanks for the color.

You're welcome.

[Operator Instructions] Your next question comes from the line of Michael Leshock of KeyBanc Capital Markets. Your line is open.

Hey, good afternoon. I wanted to follow-up on cash flow. Previously, you had expected 2024 to be the largest cash burn year related to the Delta Class ships, but now it's looking like it could come in a bit lower. Was this due to the timing of some spending being pushed into 2025, or did you come in under budget in certain areas? And how is Delta Class progressing relative to your initial budget for the shift?

So overall we've been very actively managing our spending. So some of the lower numbers come from just our active control of what we spend our money on and trying to be as lean as possible. There's always a little bit of timing shift within quarters, but I think we were also trying to be conservative previously to highlight what 2024 could look like and paint that picture for the year-over-year profile was still stand, so 2024 is still the peak. 2025 will be lower. We gave that guidance a while ago. I think we came in pretty close to what we were expecting. And then second part of your question, could you remind me, Mike?

Just overall how the Delta Class is progressing relative to your initial budget for the program?

Yes, it's tracking very well. So we've been very diligent about tracking all the different elements of the program. And we've been very pleased with the aggregate spend for that program from NRE through the tooling development and what we project for the remainder of the program is on track with what we had projected.

Okay and then on the headcount additions at the Arizona facility, what are you seeing in terms of labor availability? Just trying to get a sense how fast you could add headcount and how much additional labor would you need to add at that facility? Thanks.

Thanks. It's Michael. Thanks, Mike. Just for context, if you think what's going to happen through Phoenix in the, let's call it over, of course, the next year, we'll be assembling these first two ships in a fairly intensive hands-on phase, and then we'll move those ships into ground testing, at which point in time we'll fly them after that to Spaceport America where they'll go through their flight test program. And then there'll probably be a little bit of a time period, while we're out working on flight testing and getting those Delta ships in before the mothership that we've been talking about is kind of rolling into Phoenix for assembly there. So what we're trying to be thoughtful about is not ramping up, I'll call it an excessively large permanent group at Phoenix at this time, the larger ramp will probably come when the mothership comes in because then we'll have a more consistent mothership build, spaceships build, do another spaceship, do another mothership, it will be consistent. So what we're handling that is we have a great and very talented team in New Mexico, heavy AMP mechanic group, they maintain all of our ships. A lot of those folks have agreed to come to Phoenix and, you know, kind of bring the lead and the expertise to help us go through the building phase. And then as we bring those first two Delta ships back to New Mexico, that team that's based in New Mexico will leave Phoenix and go back home to put them through the flight. So I give you all that context because it means the amount of hires that we need to do in Phoenix is relatively modest, because we'll be bringing in folks from New Mexico and a few from Mojave as well. With that said, this is a [Indiscernible] job. This is building spaceships. And the Phoenix market is very strong in what we're trying to do in general. And we believe we will compete and be an employer of choice there as we come in. So, yes, we have to go do that. That'll come later in the fourth quarter. So we'll be putting our energies to that. But I believe the market depth relative to the amount of people we need is quite deep.

That's helpful. Thank you, guys.

Thanks Mike.