Q1 2022 Blade Air Mobility Inc Earnings Call
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Hello, and welcome to the Blade Air mobility, three months and calendar year ended December 31, 2021 financial results conference call and webcast. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded its now my pleasure to turn the call over to Tom Cook Investor Relations. Please go ahead.
Thanks, operator, and good afternoon, ladies and gentlemen, thank you for standing by and welcome to the Blade Air Mobility Conference call and webcast for the quarter and calendar year ended December 31 2021, we.
We appreciate everyone joining us today before we get started I would like to remind you of the company's forward looking statement Safe Harbor language statements made in this conference call that are not historical facts, including statements.
Future time periods may be deemed to constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Forward looking statements are subject to risks and uncertainties and actual future results may differ materially from those expressed or implied by the forward looking statements.
For you to our SEC filings, including our annual report on Form 10-K filed with the SEC on December 22021 for a more detailed discussion of the risk factors that could cause these differences.
Any forward looking statements provided during this conference call are made only as of the date on this call as stated in our SEC filings <unk> disclaims any intent or obligation to update or revise these forward looking statements except as required by law.
During today's call. We will also discuss non-GAAP financial measures, which we believe may be useful in evaluating our financial performance. A reconciliation of the most directly comparable GAAP financial measures to those non-GAAP financial measures is provided in our earnings press release, which will also be available on our website.
non-GAAP measures should not be considered in isolation or a substitute for financial results prepared in accordance with GAAP hosting todays call are Rob Wiesenthal, founder and Chief Executive Officer of flight and we'll Hey, Burns Chief Financial Officer, I will now turn the call over to Rob Wiesenthal Rob.
Thank you Tom Good morning, everyone I'd like to thank you for your interest in blade and welcome you to our earnings call for the quarter and calendar year ended December 31, 2021 <unk>.
Let's start with a short overview of our outstanding results followed by an update on the progress we have made towards achieving our strategic goals before handing the call over to will to cover our financials in more detail.
Before we begin just a quick reminder, that blade recently changed its fiscal year ending on September 30th two ending on December 31.
As a result, the quarter ending December 31, 2021 was a transition period and blades financial results for the period were filed on a Form 10-Q T. Transition report latest current full fiscal year began on January one 2022 and will end on December 31 2022.
Going forward, our fiscal quarters, well matched calendar quarters with that housekeeping out of the way. We are extremely pleased to report that the quarter ended December 31, 2021 significantly exceeded our expectations revenues mid December 2021 quarter increased 208% to 24.
$6 million versus $8 million into 2020 comparable period increased 371% versus the pre Covid 2019 comparable period results of $5 2 million or flight profit in the December 2021 quarter increased to 146% to $4 million versus one.
$6 million in the 2020 comparable period and negative $6 million in the pre Covid 2019 comparable period.
This superior performance is reflected in blades calendar year 2021 results as well.
Full calendar year revenues up $67 2 million significantly exceeding our expectations and were up 156% versus calendar year, 2020, and up 106% versus pre Covid calendar year 2019 flight profit grew 193% to $13 2 million.
From a $4 5 million in the calendar year 2020.
271% from $3 6 million in pre Covid calendar year 2019.
Our ability to accelerate revenue in flight profit growth in the face of an ever changing pandemic landscape is a testament to the diversity of our business lines and the flexibility of our asset light model as businesses in New York have been forced to balance remote and office work late has been able to rapidly adapt our commuter services serving our flyer.
On more days of the week and more weeks of the year.
By optimizing our blade airport business, we were able to successfully navigate rapidly changing travel restrictions, while still achieving flyer run rates in the December quarter that matched pre pandemic levels and with improved utilization all the while we have continued to invest in areas of our business that are unaffected by the pandemic, particularly.
<unk> are many mobility, Oregon transport Ingest Division. These business lines have helped to offset the volatility in short distance and performed extremely well throughout the pandemic contributing to our strong growth in revenues, while delivering consistent flat margins.
Beginning in early January 2022, we saw a slowdown in our blade airport in Vancouver businesses, However, given positive trends and return to office as well as commercial airline bookings, we are already seeing improvement and believe this impact will be short lived we do not expect a material impact to revenue.
In the current March 2022 quarter, I'll, let will discuss our outlook in more detail.
While the omicron outbreak in the New York area with a short term challenge. We are fortunate that it came during the March quarter, which is seasonally the slowest for our short business business with New York, eliminating it's masked mandate on this very day, we expect a measurable pickup in travel to New York City, which should benefit blade airports.
Performance.
We continue to expand and diversify both in terms of services and geographies, whether we are transporting a hard from a hospital helipad or enabling a business person to catch a flight out of JFK latest aggregating the best use cases in the world for future electric vertical aircrafts or what we call EBITDA.
Most importantly, these routes and services have profitable unit economics today, using existing aircraft and our exclusive infrastructure. As a result blade has already built the world's largest urban air mobility company and we're working everyday to improve our technology strengthen our brand add to our exclusive infrastructure.
And grow our customer base, placing blade in the best possible position to transition to EMEA, enabling lower cost and mobility to the public that is both quiet an emission free.
At the same time, our EBITDA partners continue to make incredible strides towards bringing the aircraft to market. For example, our partner Beta technologies has obtained a supplemental experimental type certificate from the FAA, enabling them to double their flight test capacity. They are now flying regularly between <unk>.
<unk>, New York, and Burlington, Vermont, often breaking records for electric fleets.
Together blade in beta technologies are working towards conducting a joined flight test of betas piloted Alere $2 50 electric vertical aircrafts in the greater New York area as early as Q2, two exhibit not only the progress that has been made but also the near silent nature of this next generation air.
Kraft in play.
I could not be more happy with our progress and with that I'll turn the call over to well.
Thank you Rob before we dive in I'd like to reemphasize, our great progress in both growing and diversifying our business where blade was once highly concentrated in New York City. We now have an even larger passenger urban air mobility business in Vancouver are many mobility, Oregon transporting jet businesses operate coast to coast.
And believe it is now the largest dedicated transporter of human organs for transplant in the United States.
This diversification served us incredibly well during a volatile time for the consumer travel industry. Additionally, given common aircraft usage across all of our business lines, we have significantly strengthened the bleed value proposition with our third party operators the combined volumes of our growing retail and medical businesses are all <unk>.
Already leading to improved aircraft availability and pricing paving the way for improved economics.
As Rob mentioned earlier, our 208% revenue growth in the December 2021 quarter versus the comparable 2020 period was well ahead of our expectations I'll walk through a few highlights and short distance revenues were up 191% to $6 2 million in the December 2021 quarter versus $2 one.
In the comparable 2020 period or.
Our commuter business continued to benefit from strong off season demand in what is seasonally the second slowest quarter for short distance.
Our reintroduction of late Airport service and acquisition of <unk> passenger routes, which we completed on November 30th also contributed to the positive year over year comparison.
Turning to minimum mobility organ transport and yet revenues increased 227% this quarter to $18 million versus $5 $5 million in the comparable 2020 period.
Growth was driven by our acquisition of Trinity. The addition of new hospital and jet charter clients as well as growth in trip volume within blades legacy accounts.
Quickly to integrate Trinity and have already won several new accounts with a combined Trinity blade team.
Particularly pleased to be supporting our long standing partner Mount Sinai Hospital as they expand their transplant Institute and a lung program this year.
Turning to our flight costs slight margin decreased this quarter to 16% versus 20% in the comparable 2020 period. The decline was driven primarily by the recent relaunch of late Airport service, which as expected during any new service ramp was operating below breakeven during the 2021 period.
Blade airport slight margin would've been approximately 18% in the period.
Let's turn now to our general and administrative expenses G&A increased $9 million in December 2021 quarter to $12 3 million from $3 $4 million in the comparable 2020 period. The increase was primarily driven by an increase in corporate overhead costs of $2 6 million to support continued business growth and increase in.
Noncash stock based compensation of $1 3 million, one time transaction related expenses of <unk> 9 million as well as recurring costs paid to third party auditors and consultants related to our new status as a public company of $2 2 million $1 6 million of which represents premiums for our directors and officers insurance.
Yes.
Excluding these one time non cash and recurring public company costs G&A expense increased approximately $4 5 million to $6 6 million in the December 2021 quarter versus $2 $1 million in the comparable 2020 period, primarily reflecting the continued expansion and enhancement of our corporate team as we execute.
On our growth plan, both organically and through acquisition.
G&A remained roughly consistent on a percentage of revenue basis.
Our software development expenses increased <unk> 5 million to $1 6 million in the December 2021 quarter, driven primarily by noncash stock based compensation of <unk> 3 million and increased head count to $1 2 million.
Selling and marketing expenses increased $1 1 million to $1 5 million in the December 2021 quarter, driven by our expansion of our short distance business lines and associated marketing activities.
Compared to the pre Covid comparable 2019 period, selling and marketing expenses increased <unk> 5 million or <unk>, 49%, which primarily reflects increased marketing activities associated with our growth and business line expansion.
Adjusted EBITDA in the December 2021 quarter decreased to negative $5 9 million from negative $1 million in the comparable 2020 period and negative $4 $6 million in the comparable 2019 period.
The decrease was primarily attributable to increased head count and new recurring expenses related to blade status as a public company consisting of incremental D&O insurance of $1 6 million and other fees paid to third party auditors and consultants <unk> 6 million.
Excluding the new recurring public company expenses above comparable adjusted EBITDA of negative $3 7 million decreased versus negative $1 million in the comparable 2020 period, but improved from negative $4 6 million in the pre COVID-19 comparable 2019 period, driven by increased revenues and higher slight margin.
Looking into the future, we're seeing an excellent start to the year, even as we emerge from omicron restrictions implemented late last year.
As Rob mentioned earlier, we've seen unlimited omicron impact to our Blade Airport and then coover businesses in the March 2022 quarter to date.
Importantly, we are already seeing improvement across both businesses and do not expect a material negative impact to revenues in the quarter.
However, we do expense lower overall slight margins in the March 2022 quarter likely in the low teens, given our analysis to the impact of OMA Kron will be short lived we did not reduce service in order to maintain a consistent product offering for our customers. This led to lower utilization for blade airport and in Vancouver.
Fortunately as we speak masked mandates are being eliminated travelers are booking more commercial flights and workers are returning to the office in greater numbers. This bodes well for our performance in the immediate future.
Looking more closely at blade airport, while our annualized passenger run rate dropped to a low of approximately 5000 in early January from approximately 20000 in December it has since doubled to approximately 10000 in recent weeks note that January and February are seasonally weak months for commercial airline travel in general.
Also within short distance as the talent of East Hampton, New York considered new flight restrictions at their airport, we expect a rebalancing a flyer destinations to neighboring landing zones, including Montana, South Hampton Sag Harbor in Westhampton.
As these locations or as little as 10 minutes by car from the airport, we do not expect a meaningful impact however, even if the airports closed entirely which we deem highly unlikely we would expect only a low to mid single digit million dollar revenue impact in calendar year 2022.
As conservatively assumes that only half of our east Hampton Airport fires would use one of the many other neighboring landing locations at a slightly increased price.
In closing I want to reiterate that despite these isolated issues our growth remains incredibly strong in fact, our January 2022 revenues were roughly double the prior year period with that ill turn it back over to Rob for a few closing remarks, thanks, well, we continue to make incredible progress.
<unk> growing and diversifying the world's largest urban air mobility ecosystem and there is no better Testament to our success and our exceptional financial results over the past year.
We're very proud of what we've built here at blade, we commit to you that we will continue to execute on our promise to aggregate. The most important urban air mobility opportunities across the world securing both customers and infrastructure to deliver unmatched services at attractive prices today, while preparing for the future of quiet emission free electric vertical.
Aircraft Tomorrow in EMEA is the way, we grow stronger with even more operating geographies routes Flyers and revenues are strategic moat becomes even stronger if <unk> are available in our projected timeframe, we expect to save quiet an emission free attribute of these aircrafts to unlock our ability to open even more.
Ablate landing zone and more locations that are more convenient to our buyers exponentially grown the size of our overall business with that I'll turn it over to Tom for questions.
Thanks, Rob as a reminder, we will take questions from analysts and investors on this call today.
Order should send enquiries to meet directly operator, we're now ready for questions.
Certainly we will now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing.
Star one one moment. Please when we pull for questions. Our first question today is coming from Hillary <unk> from Deutsche Bank. Your line is now live.
Hi, Thanks for taking my question.
Last quarter, you mentioned that your target all of 2022 lines for <unk>.
One of them, we're just not sure if this persists.
So from that and if you have any update on your planned well can be glad yesterday.
Thank you.
Thanks for the question Hilary.
We continue to see a huge market opportunity connecting the northeast cities and there is no one better equipped to do it and blade.
And particularly with the asset light model, we can move really quickly on that when the time is right at the same time, we built this really diverse business and we do have great growing product lines that are not correlated to business travel or return to office. So we kind of have to weigh the best investments to make in terms of risk adjusted return right now and we.
No. We can move very quickly when the environment is right to start leaning more into business travel.
With respect to the Laguardia Airport, we're monitoring our utilization for Kennedy.
Newark airports Laguardia is definitely in the pipeline as you know theres a lot of construction there we'd like a lot of that construction to be dissipated to make for a better experience, but we do expect to restart Laguardia and I'd say, we still want to do both of these things this year.
It just if we're in a situation where only 30% of people are back in their offices and they're not allowed to travel because of their corporate travel policies.
We're not going to force it.
Okay got it and then I guess.
It seems like you're embedding mobility business is doing really well I guess in terms of could you provide any guidance in terms of I guess modeling or maybe like breakout of your business. You know became that in mobility and like the airport personal choices.
Are you expecting low growth in the mobility business this year versus your airport and like how should we think about that in terms of breakout breakout of what percentage.
<unk> medical devices.
Yes.
Look what I can tell you is the majority of what we're reporting for that meta mobility jet business and <unk>.
Look at the growth has significantly exceeded our expectations here, we've seen incredible synergies from combining the retail business and the medical business is giving us more access to aircraft at better pricing and hospitals across the U S are really responding to our ability to uniquely service them more quickly.
And at better prices one of the things we see in terms of benefiting margins.
How many mobility fit so well.
The organ Transplantations tends to happen in the evening.
Between midnight and six am whereas most of our passenger business happens obviously during the day so.
So now essentially our operators were able to amortize the cost of their aircrafts.
In our pilot time.
Over a 24 hour period, which which allows them to actually.
Have better economics, and thus lower our costs in terms of what we pay on an hourly basis. So we get really strong economies of scale improving margins as men mobility grows.
Our costs can come down in terms of our <unk>.
To fly passengers.
Gotcha, Okay. Thank you very helpful.
Thanks.
Our next question today is coming from Stephen Ju from Credit Suisse. Your line is now live.
Okay, great. Thank you so Rob your recent announcement for doing a helicopter flights.
Where are the big game. This weekend. So should we think about this as a first step in rolling out our presence in the U S West coast or if not how has your thinking evolved in terms of.
Expanding your service footprint. Thank you.
Sure.
As Bill said, we're being very opportunistic I think in terms of the west coast.
It's great to be back in la even for the Super Bowl.
There is an incredible amount of demand.
Los Angeles, but we're being very careful you need places to land they have to be convenient we have people hard at work.
Making sure that we can get to the point, where we have active landing zones.
So with the acquisition of <unk>, we see a very strong opportunity to reintroduce.
Seattle to Vancouver, as you know, both Seattle and Vancouver, our tech hubs.
And are starting to enjoy a lot of travel back and forth.
With high value Flyers, and that would be pretty much. The very first cross border urban air mobility program in the U S. So we're excited about that as well so west coast has.
More than on the radar as you can see it's already underway.
Okay.
Perhaps your phone is on mute Steven.
Our next question today is coming from Bill Peterson from Jpmorgan. Your line is now live.
Yes, hi.
Quarterly results.
Let me ask a few questions here.
Does it come back to it has as I think you define the impact is small which is good to hear that.
It looks like you're still offering flights even past the closure date, if I read the website correctly I mean, you have permission to land their past March or another sponsor in early March.
I guess I'm wondering if this.
Is there a possibility that this type of.
I guess limitation could happen at other airports.
And just kind of curious what you are planning to do in terms of working with the local jurisdictions are on flights to the hamptons.
Sure.
Well first of all the the plan that the town came announced with two closed and reopened in four days.
As a private.
Airport with restrictions.
That will help reduce noise, we have produced two the town.
List.
Proposal its comprehensive that can help balance the needs of the community in terms of noise.
The needs of our Flyers that includes noise abatement altitudes in all water routes.
Two east Hampton over the Ocean, where literally you're buying maybe potentially at 35 over 3700 feet over 10 homes. So we've given are a list of all the things we can do to help mitigate noise I think the jury's still out in terms of exactly what those restrictions would be but the clan of these cancer is not to close it.
But as to put in new.
New types of.
Restrictions, maybe curfews and such.
Our polling through our serving two are fliers.
That's the driver Flyers are going to continue flying as you heard.
By will earlier in the call Sag Harbor, which is only 10 minutes away from East Hampton, South Hampton, Montoc, which is already in the town of East Hampton.
Westhampton Theres. So many alternative landing zones, and remember Easthampton was really a point of aggregation because it was a very big airport. So we really don't see.
<unk> impact to our ability for our customers supply.
And so it will gave you was a worst case scenario if it indeed close but please understand the plan of the town is to close it only for three days to reopen as a private airport.
Okay good to hear.
Going about airport and I guess sort of some more commentary on northeast. It sounds like you are somewhat of a wait and see mode to see how business travel returns.
We've kind of been monitoring some data you see.
The emergence of I guess, you said leisure travel our business plus leisure.
I guess, how does it play to see that development sort of a hybrid business leisure segment.
<unk> seen this despite changed long term travel patterns as well as helicopter demand.
Just kind of a temporary thing until our PTO return to the office becomes more and more certainty.
As Bill we definitely see it in the airport business and I think Thats how in December we were able to actually get to pre pandemic levels. When as you know business travel have not recovered and that's worth a lot less inventory on the shelves with only two routes running so there's definitely parts of our business, where we are we have the potential to benefit from that.
There's areas like connecting to business hubs for day trips, which is kind of what the northeast quarter would be where they are probably a little more levered to business travel and so we're watching that closely for those kind of things, but definitely in the blade Airport product you see that hybrid benefit.
I also think that no.
I did not expect to see the amount of leisure travel travelers using blade airport.
I think we're now learning that a lot of people that enjoy the experience they enjoy.
The lack of stress you happen to know that when youre going to get to the airport, which is five minutes.
Lack of panic when youre sitting in traffic.
And also we can kind of judge by the size of bags and that see the mix of leisure versus business travelers that are happy to see a lot of leisure craft near 100% right.
Lot of this kind of leisure traveler happening after a business or leisure travel happening after a business trip that we're seeing more and more of and Thats.
That is.
Proven by our surveys and by interviews that we have with our actual buyers.
Sure.
If I can sneak one more on margins you talked about flat margins potentially in the low teens range for the March quarter I'm curious.
Do you see any impact on rising fuel costs or is that your operators. Yes. I mean these are fixed for you you don't they don't have any pass throughs of such cost I'm just curious if there's any impact of.
Well, we don't have pass throughs.
Sure, we don't have any pass throughs.
Paying hourly rates should know that the kind of helicopters would be flyer essentially using 40 gallons.
Fuel per hour.
Helicopters are not like big giant jets. So when you think about the overall cost of fuel for an overall for our trip.
It is not a very large portion of the trip. So we don't expect the rising fuel costs, having to pay a large impact.
Martin <unk> for any actually any material impact I should say.
Yes.
Okay. Thanks ill go back in the queue.
Nice job on execution.
Thank you Sir Thanks Bill.
Thank you as a reminder, Thats star one to be placed in the question queue. Our next question is coming from <unk> Kalia from Citi. Your line is in Hawaii.
Great. Thank you good afternoon, everybody I've just got two questions for me first just with the ABA.
<unk>.
Strong revenue growth Youre experiencing.
You touched upon earlier curious, Rob maybe what youre thinking about Miami, alright potential growth there given the momentum you're seeing in the northeast and then maybe for will on the flight margin.
What's the impact from kind of minimum mobility going forward I'm, just trying to a sense of where margins can get to some kind of at the peak spring and summer months. After a short distance flight business kind of how the interplay there might work in the next couple of quarters.
Let me take the Florida question.
Couple of things as you probably know that our seasonal mtvs <unk> business, which is part of our favorability is our biggest do you plan to do land.
Alright here in city centers here in New York and elsewhere go down to Florida, and they are working there during the winter and they service a lot of the Bahamas and go between Palm Beach Miami.
Adult Southern Florida.
I would say that <unk> had spent some time with its extremely open to not only urban your ability but helicopters today.
We've seen a very big migration of.
People, especially at the New York area, who are very familiar with the blade brands moving down to Florida.
And our operations down there, which are on the <unk> side has aided in that awareness and I think that there are opportunities down there, especially between Palm Beach, and Miami and elsewhere. So it's on the radar. If there are no immediate plans right this moment, but.
As I said, we are actively servicing the area on a charter basis with our activities see planned helicopter service to come.
And on your question on the minimum ability side.
Great margin potential in that business when you compare it side by side to the short distance business as we said before youll, probably slightly lower average flight margin, but you don't take any of the utilization risk and you also don't need to spend on things like marketing.
So it's a great business and one of the incredible things that we added to our portfolio with the Trinity acquisition is really capturing all of the last mile revenue. So one of the things. We're constantly amazed at is just how much people, sometimes charge hospitals for a 15 minute trip in a car and so we're able to.
Really save the hospital's money and make a nice margin, adding in the last mile as we replace that with either an ambulance or even a helicopter for less than they might have been paying for a car before so that's an opportunity to improve those margins a little bit and I think what you see in the men and mobility businesses more of that sequential quarter over quarter growth that we have.
Been seeing.
Not as much variability in terms of the seasonality, so really smoothed out our reporting and we're incredibly excited we're getting the benefits of the scale being the largest in the United States for dedicated Oregon Transportation already and we're excited to continue to show new hospitals, how we can help save them money.
And get that Oregon, where it needs to go much more quickly. So I think the proof is in the performance in that business and we're really able to offer a better product in terms of those things the transplant centers care about.
That's all very helpful. Thank you.
Thank you we reached end of our question and answer session I would like to turn the floor back over to Rob for any further or closing comments.
Sure. Thank you I just wanted to take a quick moment to reiterate how pleased we are with our financial performance as well as the overall strategic trajectory of our company.
Simply put we have built the most formidable urban air mobility ecosystem in the world.
And our transition from helicopters to electric vertical aircraft or EBITDA truly is in sight as evidenced we look forward to our forthcoming joined tests with beta technologies that we at $2 50 electric vertical aircrafts in the Greater New York area.
In Q2.
And if you have any further questions feel free to contact Tom Cook of ICR. His contact info is on the bottom of our press release. Thank you very much for dial again, and we look forward to speaking to you all soon.
Thank you that does conclude today's teleconference and webcast you may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation today.
Yeah.