Smartphone with a picture of VX4 aircraft with Vertical Aerospace logo in background. Key Points Vertical Aerospace's most critical flight test of the year is now underway, aiming to provide the definitive engineering proof point for its aircraft design. By focusing on selling aircraft to expert partners, the company's model avoids the substantial costs associated with operating its own airline. This OEM strategy could facilitate faster global scaling and provide a clearer path to profitability through ...

Vertical Aerospace Q3 2025 Business & Strategy Update Call Confidential. ©Vertical Aerospace Group Ltd 2025. All rights reserved. Disclaimer The following presentation, the information communicated during the delivery of the presentation, any question - and - answer sessio n and any other materials distributed at or in connection with the presentation (collectively, this "presentation") has been pre pared by Vertical Aerospace Ltd. ("Vertical," "Company," "we" or "our"). This presentation may not be reprodu ...

Core Insights - The primary uncertainty for the eVTOL industry has shifted from technology to regulatory pathways, with Vertical Aerospace benefiting from recent UK regulatory developments [1][2] - The UK Civil Aviation Authority's (CAA) eVTOL Delivery Model provides a clear framework that enhances Vertical Aerospace's competitive position [3] - Recent government funding for Vertical Aerospace's projects signals strong national support, further solidifying its market position [4][5] Regulatory Developments - The CAA's eVTOL Delivery Model establishes the highest safety standards, requiring a catastrophic failure probability of less than one in a billion flight hours, aligning with commercial airliner benchmarks [3] - The collaborative relationship between Vertical Aerospace and the CAA aims to mitigate risks associated with regulatory delays, enhancing the company's development timeline [3] - The framework allows for day-and-night and all-weather flights from the start of service in 2028, facilitating a scalable business model [3] Government Support - The UK government awarded funding through its Future Flight program, with Vertical Aerospace as a key partner in the OxCam AAM Corridor demonstrator project [4][5] - This initiative integrates various stakeholders in the advanced air mobility ecosystem, showcasing Vertical's role in a government-backed strategy [5] Financial Outlook - The recent regulatory clarity and government backing strengthen Vertical Aerospace's financial projections, making its targets more achievable [6][7] - The company aims for cash flow breakeven in Q4 2029 and over $100 million in positive free cash flow by 2030, with a net funding requirement of $700 million now appearing more realistic [7] - Vertical Aerospace's current market capitalization is approximately $533 million, trading at a discount to the consensus 12-month analyst price target of $10.43, indicating potential for valuation correction [8]

Core Insights - Archer Aviation Inc. (ACHR) is transitioning from urban air mobility to defense contracts, focusing on its Midnight eVTOL aircraft while pursuing opportunities in the defense sector [1][10] - The shift is driven by the need to diversify revenue streams amid a growing demand for advanced autonomous military systems and significant U.S. defense budget allocations [2][5] Company Developments - ACHR announced a partnership with Anduril Industries in December 2024 for the joint development of a hybrid VTOL aircraft, raising $430 million in equity capital to support this initiative [3] - In February 2025, the company raised an additional $301.8 million to accelerate the development of its hybrid aircraft platform for defense applications [3] - Key acquisitions in August 2025 included a patent portfolio and talent from Overair, as well as composite manufacturing assets from Mission Critical Composites, enhancing ACHR's prototyping capabilities [4] Market Context - The favorable U.S. defense budget environment, with a fiscal 2026 request of $13.4 billion for autonomous military systems, presents a lucrative opportunity for eVTOL companies like ACHR [5] - Other eVTOL companies, such as Joby Aviation and Vertical Aerospace, are also expanding into the defense sector, indicating a broader industry trend towards dual-use strategies [6][7][8] Financial Performance - ACHR shares have increased by 162% over the past year, significantly outperforming the industry average growth of 13.2% [9] - The company's trailing 12-month Price/Book ratio is 3.24X, compared to the industry's average of 6.29X, indicating a relative discount [11] - The Zacks Consensus Estimate for ACHR's 2025 loss has improved over the past 60 days, while estimates for 2026 have remained unchanged [12]

Group 1 - U.S. President Donald Trump's executive order on June 6, 2025, aims to enhance U.S. leadership in unmanned aircraft systems, particularly electric Vertical Takeoff and Landing (eVTOL) aircraft [1][7] - Archer Aviation Inc. (ACHR) experienced an 11.7% increase in share price following the announcement, significantly outperforming the industry's 0.4% return [1][7] - The eVTOL industry is gaining momentum due to urban congestion, the demand for sustainable transport, and advancements in electric aviation technology [3] Group 2 - Archer Aviation is advancing its Midnight eVTOL aircraft through FAA certification and has initiated the next phase of flight testing, demonstrating both vertical and conventional takeoff capabilities [4][7] - The executive order is expected to facilitate regulatory processes and accelerate the adoption of eVTOL aircraft, benefiting Archer's commercialization efforts [4] - Other eVTOL companies, such as Joby Aviation Inc. and Vertical Aerospace, have also seen significant share price increases following the executive order, with Joby rising 16.3% and Vertical Aerospace increasing 7.2% [9] Group 3 - Archer Aviation's current trading price is 6.6% below the average Zacks price target, indicating potential upside [5] - The company is trading at a trailing 12-month price-to-book (P/B) multiple of 6.18X, which is approximately 4% higher than the industry average of 5.94X [12] - The Zacks Consensus Estimate for Archer's losses for 2025 and 2026 has improved over the past 60 days, reflecting a positive trend in earnings revisions [13]