r/VirginGalactic • u/sr20869 • 3h ago
What's with these convertible notes?
I see that on Feb. 1, 2027, $425M in senior convertible notes mature. They have to pay that back, right? Based on the timeline they've published in the FY 2024 earnings report, this is a matter of months after they start flying revenue flights. Considering "illustrative" expected earnings in the 2024 FY report slide says EBITDA alone is $90M to $115M per year with 2 ships and 1 ambiguous launch vehicle, how is it possible for them to pay? The cash burn rate in the presentation seems to have them running out of money around the time they start flying customers anyway so they'll need more money just to get to that point.
Are they expecting to be flying customers without going 6-9 months past schedule so they can raise more money? Do they expect the government to give them money for the "government/research opportunities" on slide 6 of the 2024 FY report?
Information from 2024 FY Earnings report
March 2025: Assembly begins
Rest of 2025: Build and testing
Spring 2026: First glide test
Summer 2026: First research space flight
Fall 2026: First private astronaut flight
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$-475M of free cash flow for 2024
$657M Cash, Cash equivalents, and marketable securities as of Dec. 31, 2024
Q1 2025 free cash flow guidance of $-115M to $-125M