Q2 2021 Blade Air Mobility Inc Earnings Call

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Greetings and welcome to blade urban Air mobility of fiscal second quarter 2021 of financial results Conference call. At this time, all participants are in a listen only mode.

A brief of brief question answer session will follow the formal presentation.

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As a reminder, this conference is being recorded Monday may 17th 2021, I would now like to turn the conference over to your host Mr. Tom Cook Investor Relations. Please go ahead.

Thank you Katrina good afternoon, ladies and gentlemen, welcome to the blade Urban Air mobility fiscal second quarter 2021 conference call and webcast. We appreciate everyone. Joining us today before we get started I would like to remind you of the company's safe Harbor language. The statements contained in this conference call and webcast, which are not historical facts.

<unk> may be deemed to constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties any statement that refers to expectations projections or other characterizations of future events, including financial projections or future market conditions is of forward looking statements.

Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties, including those described in the company's filings with the SEC the pump.

<unk> assumes no obligation to update any forward looking statements.

He's also note the past performance or market information is not a guarantee of future results. During this conference call. The company May discuss non-GAAP financial measures as defined by SEC regulation G. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP financial measure can be found in the earnings press release, which is available on the investor relation.

The website IR Dot blade dotcom, a recorded replay of this call together with related materials will also be available on the Investor Relations website.

Hosting todays call are Rob Wiesenthal, founder and Chief Executive Officer of Blade, and well Heyward Chief Financial Officer, I will now turn the call over the rock Rob.

Yeah.

Thank you Tom and thanks to everyone on the line for their interest in blade I am very pleased to welcome each of our first earnings call of the public company I am pleased to inform you of our 44% of revenue growth, even amidst the pandemic as well as reaching a number of important milestones we held out for investors such as securing a letter.

Drink vertically aircrafts or what we call EMEA from multiple manufacturers before we dive into the results I'd like to take a few minutes to recap the Genesis of our company is well describe our powerful air mobility platform.

Prior to blade urban air mobility, with a cumbersome inefficient and expensive proposition.

Copies of on average had utilization of 1.4 passengers for every six to eight states. The booking process often required wire transfers signed contracts and sometimes even 24 hour notice blade changed everything.

By leveraging mobile technology and opt in Geo, we can aggregate numerous commuters who need the travel between the same points, it's still hard times and the large high congestion metropolitan areas, our consumer to cockpit technology stack all built in house facilitates real time of flight status passenger manifest and share.

The data that is shared with our group of integrated operators, where we often represent over 70% of their commuter volume.

It has also enabled us the service up to hundreds of passengers per hour across multiple locations. Additionally, our network of private and dedicated blade terminals located in the U S and in India allows us for the processing of passengers prior to the flights, enabling rapid check in security baggage assessment.

Health and safety screening electrostatic decontamination of aircraft between flights among other important items to ensure safety for our passengers are highly trained terminal employees provide real time communications of passengers to enable the recovery in the event of flight is delayed or cancelled for any reason such as air.

And whether I'm moving Flyers until later flights or by providing ground transportation.

All of this layered with our strong brand has the reduced both the intimidation and indulgence factors our Flyers based prior to the blade simply put blade is the verb in the markets. We operate people blade to the airport blade, the Palm Springs, or even India. The.

Blade to Mumbai, given our scale passing passenger aggregation capabilities and strong data exhaust we have managed to make our products much more affordable and 2019, we shattered Uber black ground transportation pricing with our 195 dollar per seat flights between three Blade New York City.

And the all three New York area of airports with the purchase of an annual airport pass that price is reduced to $95 per seat, providing a strong catalyst into the enterprise market for us at these prices we've ensured blade it not only for the wealthy but it is competitive with multiple forms of ground transport.

The value proposition, it's crystal clear Blade Airport, we turned up to two hour drive between the airport and the city into five minute flight and with the American Airlines partnership we can even pick of passengers at the side of their commercial flight and expedite them to their helicopter avoiding the long walk through the airport terminal and the growth and scale.

As real as evidenced when we started blade airport in 2019, we achieved a run rate of approximately 20000 passengers annually from New York City alone prior to pausing the entire service for the pandemic lockdown as compared to about 40000 passengers in total per blade for the entire calendar year of two.

The 19th.

Most importantly, we can provide the tremendous value to our fliers, while maintaining attractive unit economics using conventional aircraft in service today in the future, we expect electric vertical aircrafts or EBITDA to allow us the lower price of fliers improve our margins and overtime catalyze the development of additional.

Verdict port infrastructure in our existing and new markets.

Day Blade is the global urban Air mobility platform that is created.

Enormous pool of new Flyers since inception in fact, we estimate that over 70% of all blade Flyers have never Florida and of helicopter prior to flying with the way our growth and flexibility are accomplished by leveraging our asset light business model blade, neither one nor operate any aircrafts.

Islands maintenance insurance and fuel are all cost borne by our network of operators, which provide us with dedicated blade branded aircrafts at fixed hourly rates all subject to regular audits by our in house head of safety. This.

This enables the operator partners to focus on what they do best.

Training pilots, maintaining aircrafts and flying we can then focus on what we do best aggregating Flyers and reducing travel friction by providing cost effective reliable and enjoyable air transportation alternatives to some of the most congested ground roots in the U S and abroad. This model also.

Serves to maximize the return on assets optimize free cash flow and enable our substantial cash balance to be earmarked for the acquisition of strategic infrastructure, an operating company.

Other than the acquisition of expensive depreciating aircrafts.

Now that we completed our business combination with experienced investment Corp, which yielded blade approximately $365 million in gross proceeds we look forward to deploying our capital to supercharge our growth plans, both through organic expansion and acquisitions.

You mentioned that the minimum cash requirement for ideal was only $125 million and more than enough to thunder of long term business plan.

On the organic growth front, we are pleased to resume our New York airports service. This June one beginning with JFK airport seats.

These are already available on the blade App and site and by fall, we expect to once again service all three New York area airports and add commuter service between Manhattan, and the Westchester, Connecticut area with connections to the local area of airports. Additionally, before the end of calendar of the calendar year, we expect to share details around there.

New routes for 2022 on the acquisition front, we continue to make progress with our pipeline of actionable acquisitions and partnerships and we expect to announce additional transactions and alliances before calendar year end that will both for the fire of strategic mode and accelerate our growth. We look forward to sharing additional development on these and other.

Important milestones in future calls with data like the turn it over to will who will discuss recent developments and financial results.

Thank you Rob Blade is already making great progress towards our strategy of providing cost effective air mobility alternatives to ground transportation today, while preparing for the transitions of quiet emission free electric flight Tomorrow.

In recent months, we have achieved several important milestones related to both of these metrics supported by our new partnership with kayak. The division of booking holdings, one of the largest online travel agencies in the world, We will be reintroducing, our New York City airports service on June one we.

We expect kind of to dramatically expand our customer acquisition funnel as users booking flights to or from New York City airports will be prompted to add blade Airport connections. In addition in order to support its loyalty program kind of full purchase blade airports seats directly from blade towards customers on the EBITDA front, our recent announcements with better technology.

And with Arrow will help facilitate of rapid transition from conventional aircrafts through electric vertical aircraft as they become available and do this in a way that is consistent with our aircraft agnostic asset light model.

Our agreement with the data includes the commitment for our operators or third party financing sources, who will enter leasing agreements with our operators the purchase up to 20 of betas first passenger configured <unk> scheduled for delivery beginning in late 2020 for blade intends to deploy these initial beta epa's on routes between our network of.

<unk> terminals in the northeast, where beta has agreed to provide an install charging infrastructure of certainty locations. Our partnership with arrow of joint venture between Boeing and Larry page back of Kitty Hawk is an arrangement, whereby which will provide for the blade with up to 30 EBITDA to be owned operated and maintained by wisc.

We look forward to continuing to add to our network of EBITDA manufacturers to ensure that just as we do with traditional aircraft. Today, we are always able to use the most appropriate equipment for each particular mission.

Given our proven asset light model, we are fortunate that we were able to leverage our existing scalable platform and team to support future growth. However, we are actively building out the organization and functional areas specific to our public company transition and we've engaged Oliver Wyman to insight to assist us in this effort.

Moving on to the financials.

For the three months ended March 31, 2021, and 2020 revenue increased from $6 5 million in 2020, the $9 3 million in 2021, we were pleased with fleets of 44% year over year revenue growth amidst the pandemic this quarter, particularly given the comparison to the previous period it was largely unaffected.

At the COVID-19.

<unk> performance in our med and mobility, Oregon transport jet and northeast commuter short distance businesses in the three months ended March 31, 2021 more than offset the absence of blade airport, which was paused due to the pandemic.

Men and mobility organ transport and jet revenue increased by 68% from $4 6 million in the three months ended March 31, 2020 to $7 7 million from 2021.

In may the mobility growth was driven by our successful efforts to add additional hospital customers and the continued need for organ transplant during the pandemic.

Short distance revenues were negatively impacted by a significant reduction in demand for commercial airline travel and by extension, our Newark Airport transfer service, which continued to be paused in the three months ended March 31 2021.

As a result short distance revenues decreased 41% from $1 8 million in 2000 $21 million in 2021. However, we did see growth in our northeast commuter business within this category.

As expected our flight operator costs and other cost of revenue increased 32% year over year correlated with our 44% increase in revenue. Most importantly cost of revenue decreased as a percentage of revenues driven by higher passenger utilization on our short distance flight services.

Our increased contribution from revenues drove an improved adjusted EBITDA of negative $2 2 million versus negative $3 1 million in the prior year period.

With the merger completed we have a strong debt free balance sheet with more than ample liquidity to support our growth strategy. We expect the blade will benefit from significant pent up demand for travel. This summer we are already seeing a meaningful spike in forward bookings the past purchases and customer inquiries in fact April 2020.

<unk> revenues were well in excess of both the April 2020, and April 2019 of period with zero pandemic impact. This is a great signal heading into our June and September quarters, which are historically, our second and first largest revenue quarters, respectively, given the significant seasonal demand for our leisure markets.

Looking ahead believes expansion strategy is focused on new routes with significantly less seasonality such as the inner city connections airport transfers and year round daily commute of routes demand for our existing commuter products in the three months ended March 31, 2021 was greater than the demand for those products in the three months ended March 31st line.

24 2019.

Additionally, commuter demand has become more dispersed throughout the week versus what has historically been more weakened focused travel. We expect this trend, which we believe is driven by new hybrid remote office work patterns to help drive our operations to be more efficient and enable us to provide more schedule options for our flyers with that I'll turn it back over to <unk>.

Rob for a few closing remarks thanks.

Thanks Bill.

Blade is well positioned to leverage its 200000 registered users current in the forthcoming routes network of proprietary air mobility terminals strong brand and at the life business model to enable a smooth rapid and largely derisked transition from conventional aircrafts are quiet an emission free electric vertical aircrafts.

While the booking journey in terminal experience the cost in flight time will be nearly identical in the initial years of EPA deployment as it is today with conventional aircrafts, we believe the quiet in the emission free attribute the BBA eventually will enable us to deploy EBITDA only landing zone with the opportunity to.

Exponentially increase our addressable market by offering our fliers more convenient locations to depart from and arrive at almost every aspect of the service we provide our flyers today as well as the mindset. Our team requires will remain the same Anthony the a world outside of the forthcoming of equipment.

GAAP to quieting of emission free aircrafts.

It's the only serves to help to Derisk, our transition to E V E, especially when compared to companies that would like to start similar businesses from scratch for the sake of simplicity and clarification EIA must not thought of being as flying cars, nor air taxis there'll be quiet and zero emission Pelican.

Copter substitutes operating on a shared basis as blade does today, but with more of landing zone options for our fliers.

Given the growing and strong business that we have today, we are in the enviable position of being able to one.

Can you to control the can grow our business customer base route network and brand using conventional aircraft with profitable unit economics without waiting for the deployment of EBITDA or being materially impacted by the potential for shifting manufacturing or set of <unk>.

<unk> timelines secondly, we can avoid betting on one single EBITDA airframe as evidenced by our recent alliances with beta technologies and whisk aerospace manufacturers understand the value of the blade platform at the same time, given the significant work involved with building testing and manufacturing.

Factoring any new generation of aircraft, we will continue to increase and optimize the mix of our forthcoming accessible EBITDA fleet to help ensure that we are protected from specific OEM delays and then we of the access to the most appropriate EBITDA for our roots in services and most importantly for our passengers in the communities we serve.

Before we move to Q&A, let me take a few moments to discuss the current capital markets environment.

The past few months have been extremely volatile with respect to emerging growth companies like blade. However.

However, unlike many of our peers, we have a strong existing business with a very experienced management team and have enjoyed growing revenues with profitable unit economics for over six years with approximately $4 and 25 of.

Of cash per share and our debt free balance sheet post merger. It is both management and our board of the view that the current share price does not adequately reflect the long term prospects of our company.

We commit to you that we will not only continue to execute against our plan but.

If needed and appropriate use other tools in our toolbox without hesitation to maximize shareholder value.

And with that we will turn it over for questions.

Yes.

Thank you.

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There are no questions over the phone lines at this time of I'll now turn the call back to you.

Yeah.

Okay. One of the thank you all for joining our call today.

And if you have any questions that you would prefer.

Not to ask on this call, but to do would be email feel free to E mail will at blade Dot com.

Or you represent of from ICR and we'd be happy to get back to you as soon as we can thanks for your interest in blade and we look forward to speaking to you next quarter.

That does conclude the conference call for today, we thank you for your participation and ask that you. Please disconnect your line.

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