Vertical Aerospace .(EVTL) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net cash used in operating activities for Q1 2025 was approximately $30 million, with guidance for the year unchanged at approximately $110 million to $125 million [43][50] - The company closed the quarter with approximately $90 million in cash and cash equivalents [44] Business Line Data and Key Metrics Changes - The hybrid aircraft program was announced, which has a range of over a thousand miles and opens up additional market opportunities in defense and commercial operations [6][22] - The battery systems are expected to generate a 50/50 revenue split with aircraft sales by the 2030s, with a gross margin of over 40% for batteries [23][80] Market Data and Key Metrics Changes - The company is positioned to serve the full global market by certifying to the highest aviation standards, with ongoing discussions for potential customers in various sectors [7][89] - The hybrid powertrain will allow for expansion into regional air mobility, with capabilities for airlines to use the aircraft for short regional flights [70] Company Strategy and Development Direction - The company launched its Flight Path 2030 business strategy, aiming to lead the eVTOL sector by the end of the decade with a clear roadmap and certification timetable [7][8] - Partnerships with Honeywell have been formalized to enhance flight controls and aircraft management systems, valued at approximately $1 billion over the next ten years [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving certification goals by 2028 and highlighted the importance of safety in their aircraft design [85][99] - The company is excited about the upcoming piloted wing-borne flight tests, which are expected to begin in Q2 2025, marking a significant milestone [68][107] Other Important Information - The company has appointed three new directors to strengthen governance and strategic leadership [21] - The hybrid aircraft will be integrated into existing airframes, with testing planned for Q2 2026 [60][61] Q&A Session Summary Question: What is the impact on cash spend and cash burn going forward given the hybrid announcement? - Management stated that the development of the hybrid powertrain was already included in previous cash spend guidance, with no changes to the projected cash spend for the year [49][50] Question: Is the hybrid product a supplemental type certification or a new certification with EASA? - The hybrid product will be certified as a separate aircraft, likely around the same time as the electric VX4, with a full-scale piloted hybrid aircraft expected to fly in Q2 next year [52][53] Question: Will the hybrid powertrain be integrated into existing airframes for testing? - The hybrid will be integrated into an existing airframe that is currently under construction, with plans to retrofit the hybrid powertrain after initial all-electric flights [60][61] Question: How does the introduction of a hybrid electric propulsion system expand capabilities? - The hybrid aircraft will have a range of over a thousand miles and a payload capability of over 1,100 kilograms, allowing for expanded opportunities in defense and regional air mobility [70][71] Question: What is the business model for the battery systems? - The battery business is expected to follow a razor-razor blade model, with significant margins and recurring revenue from battery sales alongside airframe sales [80][81]