Stock-Based Compensation

12 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plans

The Company maintains two equity incentive plans -- the Third Amended and Restated Virgin Galactic Holdings, Inc. 2019 Incentive Award Plan (the “Third A&R Plan”) and the Second Amended and Restated Virgin Galactic Holdings, Inc. 2023 Employment Inducement Incentive Award Plan (the “Second A&R Inducement Plan”).

The Third A&R Plan was adopted by the Company’s board of directors in April 2025, subject to the approval of the Company’s stockholders, and became effective upon the approval of the Company’s stockholders in June 2025. The Third A&R Plan amended and restated the Second Amended and Restated Virgin Galactic Holdings, Inc. 2019 Incentive Plan (the “Second A&R Plan”) and made the following material changes to the Second A&R Plan: (i) increased the number of shares available by 5.5 million shares to an aggregate of 7,670,437 shares reserved for issuance under the Third A&R Plan, (ii) increased the number of shares which may be granted as incentive stock options (“ISOs”) under the Third A&R Plan, such that an aggregate of 7,670,437 shares may be granted as ISOs under the Third A&R Plan, and (iii) extended the right to grant awards under the Third A&R Plan through June 5, 2035, provided that ISOs may not be granted under the Third A&R Plan after April 10, 2035.

The Second A&R Inducement Plan was adopted by the Company’s board of directors and became effective in March 2026. The Second A&R Inducement Plan increased the number of shares available by 555,000 shares to an aggregate of 1,695,000 shares reserved for issuance under the Second A&R Inducement Plan.

Pursuant to the Third A&R Plan and related predecessor plans, the Company has granted equity incentive awards, including time-based stock options, performance-based stock options (“PSOs”), restricted stock units (“RSUs”), and performance stock units (“PSUs”). Pursuant to the Second A&R Inducement Plan, and its predecessor plan, the Company has granted RSUs.

Common Stock Reserved for Future Issuance

As of December 31, 2025, 2.5 million shares remained available for issuance under the Third A&R Plan and the Inducement Plan.

Time-Based Stock Options

Stock options (other than PSOs) typically vest over four years, with 25% cliff vest at the grant date first anniversary and ratably over the next three years, subject to continued employment on the applicable vesting date. Vested options will be exercisable at any time until ten years from the grant date, subject to earlier expiration under certain terminations of service and other conditions. The stock options granted have an exercise price equal to the closing stock price of the Company’s common stock on the grant date.

A summary of activity for time-based stock options is as follows:


	Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value









Outstanding at December 31, 2023	145,649	$	280.60	6.0	$	—
Granted	—	—
Exercised	—	—
Forfeited	(19,104)	235.80
Outstanding at December 31, 2024	126,545	287.43		5.2	—
Granted	—	—
Exercised	—	—
Forfeited	(6,511)	239.21
Outstanding at December 31, 2025	120,034	$	290.05	4.2	$	—

Exercisable at December 31, 2025	119,403	$	290.74	4.2	$	—

The aggregate intrinsic value is calculated based on the difference between the Company’s closing stock price at year end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised all their options on the fiscal year end date.

Performance-Based Stock Options

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

A summary of activity for PSOs is as follows:


	Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value

Outstanding at December 31, 2023	20,284	$	179.80	8.2	$	—
Granted	—	—
Exercised	—	—
Forfeited	—	—
Outstanding at December 31, 2024	20,284	179.80		7.2	—
Granted	—	—
Exercised	—	—
Forfeited	—	—
Outstanding at December 31, 2025	20,284	$	179.80	6.2	$	—

Exercisable at December 31, 2025	—	$	—	0.0	$	—

Restricted Stock Units -- Equity-Classified

RSUs typically vest over three to four years commencing on the first-year anniversary of the grant date and ratably over the remaining vesting period. The fair value of the Company’s RSUs is based on the closing stock price on the date of grant.

A summary of activity for equity-classified RSUs is as follows:


	Shares	Weighted-Average Grant Date Fair Value




Outstanding at December 31, 2023	319,627	$	146.60
Granted	578,075	21.27
Vested	(152,019)	179.55
Forfeited	(103,182)	56.71
Outstanding at December 31, 2024	642,501	40.96
Granted	5,180,567	3.15
Vested	(253,542)	51.18
Forfeited	(325,153)	9.24
Outstanding at December 31, 2025	5,244,373	$	4.99

Restricted Stock Units -- Liability-Classified

During the year ended December 31, 2024, the Company granted RSUs that are expected to be settled in cash. The liability-classified RSUs vest annually in equal installments over two years.

A summary of activity for liability-classified RSUs is as follows:


						Shares




Outstanding at December 31, 2023						—
Granted						272,626
Vested						—
Forfeited						—
Outstanding at December 31, 2024						272,626
Granted						—
Vested						(136,312)
Forfeited						—
Outstanding at December 31, 2025						136,314

Performance Stock Units

Between 25% and 200% of outstanding PSUs are eligible to vest based on the achievement of certain market-based conditions by specified target dates, subject to continued service through the applicable vesting dates. PSUs with market-based conditions vest based on the Company’s common stock performance following the end of the three-year performance measurement period, based on the highest closing price over twenty consecutive trading days during that period. PSUs with market-based conditions cannot vest before the end of the performance measurement period, thus the requisite service period is three years. All PSUs outstanding as of December 31, 2025 and 2024 vest based on market-based conditions following the end of the three-year performance measurement period.

A summary of activity for PSUs is as follows:


	Shares	Weighted-Average Grant Date Fair Value




Outstanding at December 31, 2023	49,176	$	208.40
Granted	—	—
Vested	—	—
Forfeited	—	—
Outstanding at December 31, 2024	49,176	208.40
Granted	—	—
Vested	—	—
Forfeited	(20,506)	279.98
Outstanding at December 31, 2025	28,670	$	157.20

Employee Stock Purchase Plan

The Virgin Galactic Holdings, Inc. 2025 Employee Stock Purchase Plan (the “ESPP”) was adopted by the Company’s board of directors in April 2025, subject to the approval of the Company’s stockholders, and became effective upon the approval of the Company’s stockholders in June 2025. The aggregate number of shares of common stock authorized for issuance under the ESPP is 2.5 million. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423(b) of the Internal Revenue Code. Under the ESPP, eligible employees of the Company and its designated subsidiaries who elect to participate are granted an option to purchase common stock at 85% of the lower of the fair market value of the common stock on either the first day of the six-month offering period or on the applicable purchase date, unless otherwise determined by the plan administrator. The ESPP permits participating employees to make contributions to purchase shares of common stock, in an amount between 1% and 15% of eligible compensation (unless otherwise determined by the plan administrator), subject to limits specified in the plan document and the Internal Revenue Code.

The initial six-month offering period of the ESPP commenced on July 1, 2025 and on December 31, 2025, 0.2 million shares were purchased under the ESPP at $2.40 per share, resulting in cash proceeds of $0.5 million. As of December 31, 2025, 2.3 million shares remained available for issuance under the ESPP.

Stock-Based Compensation

A summary of stock-based compensation expense resulting from stock options, RSUs, PSUs, and the ESPP purchase rights included in the consolidated statements of operations and comprehensive loss is as follows:


	Year Ended December 31,
	2025		2024
	(In thousands)
Spaceline operations	$	2,191	$	4,023
Research and development	1,926		3,817
Selling, general and administrative	14,581		21,912
Total stock-based compensation expense	18,698		29,752
Less: stock-based compensation expense for liability-classified awards	267		643
Stock-based compensation expense for equity-classified awards	$	18,431	$	29,109

As of December 31, 2025, the Company had unrecognized stock-based compensation expense of $0.1 million for stock options, which is expected to be recognized over a weighted-average period of 0.3 years. There was no unrecognized stock-based compensation expense for PSOs. Unrecognized stock-based compensation expense as of December 31, 2025 for RSUs and PSUs totaled $20.6 million and $0.3 million, respectively, which are expected to be recognized over a weighted-average period of 1.9 years and 0.3 years, respectively.

Virgin Galactic Holdings, Inc 10-K