Q4 2022 Eve Holding Inc Earnings Call
Speaker 1: The se.
Speaker 2: Greetings. Welcome to the Eve Air Mobility Fourth Quarter 2022 Pernius Call. At this time, all participants are in a listen-only mode.
Speaker 2: A question and answer session will follow the formal presentation.
Speaker 2: If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Lucille Aldworth. You may begin.
Speaker 3: Thank you, operator. Good morning, everyone. This is Lucio Alders, the Director of Investor Relations at ETH. And I wanted to welcome everyone to our fourth quarter 2022 earnings conference call.
Speaker 3: I have here with me co-CEOs Jared DeMuro and Andre Stein as well as our CFO Eduardo Cotto. After their initial remarks,
Speaker 3: We're going to open the call for questions. We have prepared a deck with a few slides and additional information, and this is available at our Investor Relations website at car.eavesairmobility.com, so feel free to download it.
Speaker 3: Let me first start by mentioning that this presentation includes forward-looking statements or statements about events and circumstances that have not yet occurred. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting our business.
Speaker 3: and our future financial performance. These forward-looking statements are subject to risks, uncertainties, and assumptions, including, among other things, general economic, political, and business conditions, both in Brazil and in our market.
Speaker 3: The words believe, may, will, estimate, continues, anticipates, intends, expects, and similar words are intended to identify these four lucky statements. When the technology obligations were paid publicly or revised any statement because of new information.
Speaker 3: future events or other factors.
Speaker 3: In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur. Our actual results could differ substantially from those anticipated in our forward-looking statements. With that, I will now turn the presentation over to Geri. Geri?
Speaker 4: Thanks Lucio.
Speaker 5: Good morning and thank you to those joining the call today as well. We had a very eventful 2022, accomplishing a number of milestones for the program and for the company. We, as many of you know, are actually a product of Embraer's technology accelerator, Embraer X.
Speaker 5: and the first eVTOL concept was actually introduced in and being developed in Embraer X in 2018. And we were then spun out and eventually we merged with Xanite and went public in May of last year.
Speaker 5: Going public, Eve now has the autonomy and agility of a startup, yet the resources and experience and the backing of Embraer so that we feel we can be a major player in the UAM market.
Speaker 5: We listed on the New York Stock Exchange under the symbol EVEX last May.
Speaker 5: And we listed with net proceeds of about 355 million from the D-SPAC that included investments from our height investors as well as United, which came along later in September . Later in the year, we secured almost another $100 million worth of credit lines.
Speaker 5: that operating with our critical mass, mostly in Brazil, gives us tremendous OpEx and CapEx advantages. Thus, we think we'll be well set through the R&D program again through 2025.
Speaker 5: And our EBTOL program has matured significantly over the last year. We have been testing systems and subsystems to validate our design through sophisticated model-based engineering and very high fidelity simulations. We're refining the final design, not only through the use of these advanced engineering tools.
Speaker 5: but we're also using sub-scale models and advancing the full-scale commercially representative prototypes eventually in 2024.
Speaker 5: This flexible approach allows us to thoroughly test the vality components separately, who are following an effective and efficient process proven over many years by EmbryArea, which has certified more aircraft than last 25 years than any other aviation OEM.
Speaker 5: Our goal, of course, is a safe and reliable EV call with the lowest total cost of ownership. And that's what drove us to a lift-less cruise configuration that is truly optimized for the urban air mission.
Speaker 5: 2022 also saw us introduce our Cadomockup at our customer advisory board, last spring.
Speaker 5: We had great reviews and it will also be available at our investor event this April in Melbourne, Florida.
Speaker 5: We also initiated our type certification process in 2022, which will be done through ANAG, the Brazilian Aviation Authority.
Speaker 5: While the type certification will be done through ANAC in Brazil, it will also be followed by FAA to a bilateral agreement that ANAC and FAA have had for many years. Typically, this allows a much more efficient process with only limited additional testing.
Speaker 5: And final endorsement of the certification process by FAA. We also began dialogue with IAFA, and we intend to follow a similar approach there. But we think we have a significant advantage by being first in line with A-NAC, and using A-NAC is our primary certification authority.
Speaker 5: versus, for instance, multiple applicants at the FAA, all with unique configuration.
Speaker 5: Our plan remains to enter into service sometime in 2026.
Speaker 5: In 2022, we also ran a number of simulations with helicopters in Rio and Chicago and most recently in India. The goal of these simulations was to gather critical intelligence to help us scale the global UAM ecosystem.
Speaker 5: We also tested use cases of the eVTOL in actual congested urban areas.
Speaker 5: Now, for the next slide, I'd like to call my co-CEO, Andre Stein, to talk a little bit more about the program advancements in the last quarter.
Speaker 5: For the next slide, I'd like to call my co-CEO, Andre Stein, to talk a little bit more about the program advancements in the last quarter. Thanks, Jerry.
Speaker 6: We made some real progress this quarter and intense fire supplier engagement. We shortly said potential suppliers of critical systems such as mortars and batteries and now have more detail visibility as to the citrications of these components.
Speaker 6: With that, we can fine tune our development. Refine our flight on for laws, performs envelope, fly by our systems and so on.
Speaker 6: It also gives us a much better sense of controllability of our aircraft and expected performance under different conditions.
Speaker 6: In parallel, we have been employing dedicated motor propeller rigs to test under different conditions and other rigs for batteries and other component systems.
Speaker 6: This part of our approach to our task systems and components indefinitely and incorporate them in our design, optimizing the configuration.
Speaker 6: It allows us to quickly and efficiently evolve the design and reduce program development costs.
Speaker 6: All the steps mean that you are reaching a critical point in the maturity of our craft.
Speaker 6: I'm going to talk about this in a few moments.
Speaker 6: But besides having defined that the first production site to be in Brazil, which you announced late last year, we have concluded our manufacturing strategy with the support of Porsche to define model size, flow management, and other logistics related specifically to the manufacturing process.
Speaker 6: Lastly, we defined the system requirement for the Urban Air Traffic Management software and successfully deployed an earlier version in our Chicago simulation last September .
Speaker 6: Our goal is to enable the safe management of aircraft flow within controlled aerospace and improve efficiency in operations and in birdports.
Speaker 6: by reducing waiting times and that wraps over all energy consumption.
Speaker 6: We can achieve these by optimizing flight plans and integrating flight paths of different aircraft for a cohesive system.
Speaker 6: Now, onto slide 4. In the end, our strengths translated into the largest and most diversified backlog by a number of customers and regions in the industry today.
Speaker 6: In total, we have non-binding LOIs, these are letters of intent, for 2,770 aircraft from 26 different customers spread over 12 countries and different businesses from main lines to regional airlines to helicopter operators, riding-sharing platforms and leading companies.
Speaker 6: We believe this pipeline offers strong long-term revenue visibility and will help Eve to smooth cash flow consumption in the years to come, as we start to convert existing letters of intention into firm orders and collect pre-delivered payments.
Speaker 6: known as PDPs. Beyond that, we are developing a strong network of partners in areas such as infrastructure and energy, addressing one of the largest challenges ahead of urban air mobility.
Speaker 6: which is creating a whole new ecosystem beyond simply developing aircraft.
Speaker 6: Now let me call Edu to talk about our financials. Edu?
Speaker 3: Thanks this time. That slide five, Eve is a pre-operational company formed to develop its EVTOL in the Urban Air Mobility ecosystem. We expect you start to generate material revenues outside of pre-delivered payments once we start to deliver our EVTOLs.
Speaker 3: Thanks this time. That slide five, Eve is a pre-operational company formed to develop its EVTOL in the Urban Air Mobility ecosystem. We expect you start to generate material revenues outside of pre-deliver payments once we start to deliver our EVTOLs. Currently estimated for 2026.
Speaker 3: So, our financial results for now reflect mostly the costs associated with our program development.
Speaker 3: I would like to start with the income statement highlights.
Speaker 3: We invested 18 million during the fourth quarter 2022 in our program development and 52 million in the full year. The majority was invested to develop our EVTOL and a portion for our service and support solutions in the development of our Urban Air Traffic Management System.
Speaker 3: We are the only EVTOL company with a complete solution including the aircraft, maintenance and air traffic control.
Speaker 3: In addition to R&D, we also deployed 9 million in SG&A during the quarter and 33 million in the year.
Speaker 3: Keep in mind that the EAS and Embroidery teams dedicated to the EASYTOL development have been growing as the program maturers.
Speaker 3: Including R&D and SG&E, we reported a net loss of $20 million in the quarter and $174 million in the year. It's important to highlight that our 2022 results include non-cash and no recurring costs related to warrants issued to partners, and the
Speaker 3: as well as some listing expenses of our IPO in 2022.
Speaker 3: These non-recurring non-cash expenses were 111 million, so recurring loss for the full year of 2022 was 63 million. Now moving to cash flow, our operations consumed 21 million in the quarter.
Speaker 3: and a total of 60 million in the year. We ended the fourth quarter with 311 million in total liquidity, down from 330 in the third quarter of 2022, without considering the recent long-term funding from the Brazilian Development Bank.
Speaker 3: Now moving to slide 6, considering our current cash position, investments including with Embraer, and the credit lines from the Brazilian Development Bank currently signed, we have total liquidity of more than 400 million.
Speaker 3: Again, we feel comfortable that this is enough to carry our operations development and certification efforts through 2025.
Speaker 3: I also want to call your attention to some of our cost competitive advantages.
Speaker 3: We have full access to 1,500 identified and skilled engineers from Embraer on a first priority and as needed basis.
Speaker 3: This means we don't need to bring hundreds of engineers into our P&L, which helps reduce our development costs. On top of that, most of our team is located in Brazil, where we have specialized engineers and a more favorable cost rate. In the end, our R&D dollars are up to $2.99.
Speaker 3: last longer in Brazil compared to US and Europe , where our competitors are located. Lastly, we also have access to embrace facilities, reducing investments related to infrastructure and capex in general.
Speaker 3: As I mentioned, our R&D efforts are intensifying. This will require an increase in our structure to support the expected development growth in the years ahead.
Speaker 3: For 2023, we expect if total cash consumption to be between 130 and 150 million, which considering our total liquidity above 400 million, gives us good comfort to keep our easy thought development in the years to come.
Speaker 3: With that, I conclude our financial highlights and I would like to call it time to talk about our development milestones.
Speaker 3: I conclude our financial highlights and I would like to call its time to talk about our development milestones. Thanks, Ado.
Speaker 6: During 2022, one of our forces was to put the necessary structures in place, engage the right people, and fund the development and certification program of our aircraft, as well as other products for the urban air mobility market.
Speaker 6: With funding now secured, we are accelerating our program as planned with the milestones you see on slide 7.
Speaker 6: The first, as I alluded to earlier, is the selection of the primary suppliers of the most critical components of our aircraft.
Speaker 6: such as propulsion systems and batteries, which will be completed in the first half of 2023.
Speaker 6: Also, the fine suppliers will continue to refine and validate our estimates for aircraft production, performance envelope and operating costs.
Speaker 6: The selection will also result in much more detailed specifications of these components, such as dimensions, weight, power output, and the system's interface.
Speaker 6: This is critical for us to define the final aircraft architecture at a complete system arrival, which we plan to also accomplish in the first semester of this year.
Speaker 6: With the final design established, we expect to begin fabrication of our prototype as planned in 2023.
Speaker 6: Last but not least, we plan to deploy the most recent version of our urban air traffic management in the second half to start testing in field trials with potential customers.
Speaker 6: With that, we conclude our prepared remarks and would like to open the call for questions. ID, operator…
Speaker 2: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
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Speaker 2: And one moment please while we pull for questions.
Speaker 2: Our first question comes from the line of 100 is shepherd with cantifist geral. Please proceed with your question.
Speaker 7: Hi, good morning everyone. Congratulations on the quarter and thanks for taking our questions.
Speaker 7: I was wondering if maybe you can give us a little bit more color in terms of the test flight and particularly at the
Speaker 7: prototype is expected in the second half of this year, can you give us a sense of how and when you expect to begin ramping up test flights? Thank you. Yes, Stein, you want to take that one? Sure, sure. As you know, we came from a strong aviation background.
Speaker 6: Any aviation company, we do not disclose beforehand dates for first flights.
Speaker 6: There are a few reasons for that. One is to ensure that safety is the ultimate goal. So we don't want to put additional pressure through the...
disclosure to the market. And the second is that our goal is and it will continue to be the end goal to certify, develop and deliver the aircraft. So we are not closing first dates or first flights but what I can say that we are on track according to the plan. We will start...
assure our final goal. We believe a lot and haven't been done that in several previous programs.
to develop the things in right order, not necessarily bring forward some of the most visible aspects of development, but really assure that we are always maturing, moving ahead with the...
the parts of the problem, the different parts of the problem.
Yeah, Andre, if I could add 1 thing, this is Jerry or a couple of thoughts to that. Um, our goal, we are using the term, or you've heard the term commercially representative prototype. We're flying sub scale models. Doing a lot of bottles simulation proof of concepts.
And as we select, as Stein had said, as we select our vendors here, we can refine our models and actually when we fly quote, what you're defining as a prototype. It will be as close to representative of the vehicle we intend to take into certification as we can possibly make it. That's kind of our process.
as Stein had said, as we select our vendors here, we can refine our models and actually when we fly, quote, what you're defining as a prototype, it will be as close to representative of the vehicle we intend to take into certification as we can possibly make it. That's kind of our process. Subscale models.
Proof of concept vehicles and then something that we think is is fairly representative of of what we're going to take forward. So that's why the progression through the 2nd, half of this year after we define our critical suppliers as Stein alluded to. We'll make we'll refine that design and and that's what we intend to fly.
begin assembling at the end of the year at Flynext. Understood, thank you. That is very helpful and very comprehensive. Appreciate that. Maybe one last quick follow-up. On the liquidity side, so now $310.6 million as of Q4 including the lines of credit total liquidity north of $400 million.
certification with ANAC, DFA, and ESSA. Thank you.
Sure, I'll turn over the liquidity question in total to to do, but the last part of your question, I think I can answer. We expect ANAC and FAA to be virtually simultaneous with through the process that we described.
F. A validating essentially the program that we're working with a neck, because they will have a significant input into that program will follow sometime subsequent to that. So, I would expect that might be after the 2025 timeframe, but the R and D efforts through 2025, we should have sufficient funding to get through that.
Edo, do you want to add anything?
Just to say that in terms of liquidity we're feeling very good, right? We have more than 400 million in liquidity and as we mentioned we expect to consume this year between 130 to 150 so that gives us multiple years of...
Of development, right? We already have the cash, so we are not concerned at all. I'll give it to you. We feel very good.
Yeah, Andre, one thing I would add to that, we have not yet begun to calculate into those liquidity figures.
Pre-delivery payments or progress payments, if you will, as we work through the defenitization of the LOIs that Stein referred to, that will add to the cash balance. And So, again, we feel pretty good about getting through the first steps of certification. EASA will probably follow the first two.
Thank you so much. Congrats again on the quarter and all the accomplishments in 2022. I look forward to speaking again soon. Thanks. I'll pass it on.
Thank you. Our next question comes from the line of Sahib. He sits with Raymond James. Please proceed with your question. Please proceed with your question.
Hey, good morning, everyone. Just a bit of more of a follow-up to the earlier question that Andres had. How long do you think the testing campaign with the close to commercial prototype will last before you're ready to assemble the certification compliant model? I'm just curious what… How long do you think the testing campaign will last before you're ready to assemble the certification compliant model?
Given that you've done so much kind of testing ahead of time with the sub scale prototypes, if that might be faster than what we've seen at other competitors.
Morning, Saby. Stein, you want to get that one? Sure. If you look in our previous programs, typically it's around 18 months for certification flight test campaign.
Okay, that's with this kind of prototype and then also then creating the final version that qualifies for certification, is that right? Or is this kind of prototype that you're building will be qualified for certification testing?
So, I was referring to our previous experience, right? So, from previous problems, that's typically what you see. In this case, as Jerry mentioned, we are doing more. So, we have been applying proof of concept, we have been doing sub-scale models, and we brought the flight controllers, flight simulator earlier on in the process.
So there are different steps there, but that's what we've seen in other programs.
There are some additional steps here. Okay, and then just on the PDP collection front or even kind of, you know, where do you need to be in the testing campaign before you can start firming Bill O'Wies and then how long after that do you think you can start collecting PDPs?
relation in relation to all your milestones I'm trying to figure out when the when we can see some of the firming and the actual PDP is coming in. Sure so on that I think one of one very expressive milestone is actually the selection of the suppliers that intend to do this year.
That's when we'll have a more clear view on the actual costs of the aircraft, and that will put us in a much better position to start firming orders. That is the big milestone. That's very helpful. Thank you.
So, just to compliment what Stein has said, as we move through this year, we will be identifying not only and refining the final configuration now that we have supplier data, the final supplier data. But we will also be working with some of our partners.
and identifying the launch customers. So we would expect some of that revenue to start to flow in the 24 timeframe. And then naturally as you progress the certification milestones, there would be additional payments prior to delivery. Yes, thank you. And one point just to compliment.
alarm cities and so on. So that allows us to be very assertive on that future deployment.
Can I clarify in terms of headcount?
How does that progress through that 2025 timeframe? Are we at like peak headcount because you have that flexibility in the MSA to kind of switch out the type of engineering, kind of know how and knowledge you need to get you through this? How does that progress through that?
I will give a first answer on that. We are not expecting to see a big increase in headcount with Finif as we are, as you know, using Embraer for the majority of the development. So that's where we are increasing the headcount. Typically we would expect to have around 800 people altogether at peaks.
Perfect, I appreciate it. Thank you very much. Thank you, Sebi.
Our next question comes from the line of Sheila Tyaglu with Jefferies, 3-4C with your question. Hi, good morning, guys, and thank you for the time. I wanted to ask about your cash usage. You know, you've targeted $130 to $150 million of cash use in 2023. I'm not sure if you've been using this for a long time, but I'm not sure if you've been using this for a long time. I'm not sure if you've been using this for a long time.
following $60 million and $22 million. How much of that is related to R&D? And should we still think about past usage being in the $100 to $150 million on a per annum basis?
Yeah, I can't take that. The big the big jump is really on on R&D, right? Or it increases, uh, majority in R&D. We from the one thirty to one fifth that is here.
around 100 million should be fully dedicated to R&D. Of course we have the EV structure and the development team and some other areas that consume the remaining 30 to 40 million, but the big jump and the big jump by far is R&D and the problem developed. Okay, and then I wanted to talk about R&D.
All right, well, I'll turn it over to Stein in a moment. I'm not sure what you're I would ask a little clarification about the overlap with Embraer. This is a unique vehicle. Our major suppliers will be unique. Given that you're dealing with aviation, you may have typical suppliers, as you've seen in our partner list, partners like Technology.
and Stein has been intricately involved in that on a daily basis. And that includes things like the power management, battery systems, the motors, the propellers, and then moving to avionics. Stein, you want to expand on that?
No, I think you mentioned it. There is no direct overlap. That said, of course, you can leverage a lot existing Embraer relations. Also there are newcomers to the market when you are talking about electrification and so on. There are new players in this aerospace market, which is great, but creates more of a
of a level field. Throughout the year we are selecting the majors as Jerry said but also we are moving on with the selection of other aspects like flight controls, like even interiors, everything that needs to be in place these years so we can have
a very, very significant portion of both the cost of the product as well as all the technical aspects covered.
Okay, no, that's helpful. I just wanted to get an understanding of who some of the suppliers are and how comfortable you are with them and where you are in the process with them. Okay, thank you. You're welcome.
Our next question comes from the line of Marcelo Amada with JP Morgan. Please proceed with your question.
Hi everyone, good morning, thank you for taking my question. First question is related to the sales campaign, so just wondering, you know, you guys already have a very, you know, sizable book of orders, intention of purchase, so just wondering, you know, if there is still more to come, if you guys are like actively marketing the product, you know.
just to think about the run-pop that you have forecasted on your IPO. Could this be anticipated if there is more demand? This is related to supply chain bottlenecks or what will need to happen for us to maybe see a faster delivery or faster run-pop of production. Those are the two questions. Thank you. Sure. I found that.
So to your point, yes, we are continuing with our sales campaign. Also, we are strongly engaged with the existing customers we have on our backlog to really deep dive on understanding how the concept of operations will be. All these exercises will be done related to concept of operations, simulations, and so on to help us to understand the needs.
So we can bring not only the customers but the infrastructure partners and energy providers to the table and to the discussion to assure that we, from the market perspective, we can have that deployment. So the market is being ready to receive these airplanes.
So we have these two tracks. Yes, we're continuing to talk of a diverse portfolio of the customers beyond the ones we already acquire, but there is also a strong focus on the
on engaging with existing customers and developing this plan. On top of that, as you know, last year we've worked together with Porsche to understand the requirements for manufacturing, how we can ramp up the production, how we can do that in a rational way as well.
So I think it's fair to say that we are in good shape for that to ramp up, that we are
that you saw there on our IPO. There is an optimum there, how much you want to ramp up and still be able to support and service these aircrafts in a very professional, very complete way. We leverage the existing infrastructure for an aircraft so we don't need to...
reinvest from scratch on existing infrastructure and bringing presence in over 80 countries around the globe. That helps a lot for that early operation, but you don't want to overly ramp up or over promise that ramp up beyond what you believe will be sensible.
from scratch on existing infrastructure and bringing presence in over 80 countries around the globe. That helps a lot for that earlier operation. But we don't want to overly ramp up or over promise that ramp up beyond what you believe will be sensible. Perfect. Thank you very much.
Our next question comes from the line of David. Please proceed with your question. Thanks for taking my question. A clarification on some of the questions we've had earlier on testing.
For those of us less familiar with the ANF process, the prototype you're building now and the components, are you planning to do any for-credit testing for that, or is that going to come from the prototypes that you'll be building?
Stein, the short answer is no. That Stein can expand on the process. I'm not sure if I get the whole question if you wouldn't mind to repeat it.
Just about the amount of, I guess when do you expect to be able to start for credit testing that ANAC will give you credit for certification? Okay. The risk, as I said before, in terms of dates for...
flight task campaign. We don't disclose that ahead of time for all the reasons I've explained. What I can tell you that you have already engaged with ANAC to start the formal process.
Earlier this year. Okay. So, I'm saying that to read.
Sorry, okay. So, I'm saying that too. Right? Well, go ahead.
Oh!
And then could I just ask about the urban air traffic management development, how that's progressing and if there's any expenses going to be related to that in 2023?
Oh, yeah, that's a good question. Yes, the development expenses are included on the
on the cost that, on the guidance that Eduardo said, I do want to comment a bit more on that. But as we said as well, we are planning to deploy earlier versions this year with potential customers and we actually have around six customers already today.
for the software so we can have this series of interactions to keep it on the software development. We've deployed an earlier version last year in Stanford during our trials in Chicago, again to fine-tune the software development, but it's going as planned. We, like we were doing with the aircraft where we are using a lot of software, we are using a lot of software to keep it on the
other countries. So it's going to explain and yes it is including our predicted expense for this year. I do not sure if you want to comment on the last bit.
I think that's it, it's part of the 100 million we have on R&D. It's a small portion, the focus, the big enchant, it's big but it's there.
Great, thanks very much. Appreciate the question.
Our next question comes from the line of Josh Milberg with Morgan Stanley . Please proceed with your question.
Thank you very much. Good morning, everyone. Thanks for the question. You guys made the comfortable nature of your liquidity position crystal clear. But in spite of that and the PDP collection, I just wanted to ask if you are contemplating at all the possibility of additional equity investments by either your...
existing shareholders like United or new ones. And then my second question is just on the broader EVTOL environment. You talked about the advantage, your advantage on the certification process relative to the multiple applicants at the FAA. And I wondered if you could elaborate on that point and also just provide some insight into
manufacturing strategies. Obviously, in terms of higher interest rates and some other respects, the environment has gotten somewhat more challenging. Not sure how much you can say on your competitors individually. Thank you very much.
All right, let me kick it off and then we'll turn it over to the team. On the first question about, do we contemplate additional equity investments? That's certainly an option that we have available to us. We have a number of strategic partners, as you know. That's pretty much all that was included in the pipe.
There are potentials there. We will wait and see what is the most advantageous course of action for us. As you know, when we came out of our listing, we had a very, very clean balance sheet. We were able to be opportunistic and look at the most cost effective ways to...
really is that whether it's ANAC or FAA, they have to develop or combine existing requirements from different parts of the regulations today and that will take some time. The comment that we make about being really the singular focus of
of ANAC is a bit advantageous because we're all resource limited, right? There's only a certain number of experts in these areas, whether they be in FAA or ANAC. And as you have multiple applicants, they may find that there's a resource constraint in processing. That's...
really what we were alluding to there. You know in terms of the industry maturing, you have early phases.
as you do in any industry where some are better capitalized than others, some designs will be more effective than others, and I think you're just seeing a natural evolution in that regard. I'll turn it over to Ido and Stein to see if they want to pick up on any of those topics any further.
Just one comment on that industrial, I think we are passing beyond the stage of hype and realistically there was a point in this industry there was a lot of hype. We are beyond that or passing through that point of the curve already. So now it's when you are really seeing the potential.
future consolidations and so on. We are seeing a smaller number of places like this way. At a certain point you were talking about 200 different projects for EVTOLs and so on. Now it's all but a handful already and that's tried a few times.
when we are starting to see the final results, right? But I do believe we are moving beyond the hype curve already.
On the liquidity side, we're not anticipating any new equity. Okay, thank you very much for those detailed responses. Have a nice day.
Thank you. And our next question comes from the line of Marvin Fong with BTIG. Beautiful to see you with your question.
Good morning. Thanks for taking my questions. Just a couple for me kind of building on previous questions. First one, just...
Thanks for taking my questions. Just a couple for me kind of building on previous questions. The last one.
Just, Ido, if you could discuss, you know, in terms of PDT payments, do we have any more visibility? Do you think that that might come in in 2024 or is that more of a 2025 or even 2026 event? And then a question just on the overall environment, I think you added about 700 orders to your book in a while.
kind of slowing down. Thanks a lot. Okay thanks Marvin. In terms of the PDPs, of course we are highly engaged with all our customers rights to define LAMPS CDs, to find the potential skyline of the leaders and refine all these orders.
We believe it's difficult to know exactly when we're going to start to collect the higher PDPs. We may start to see something 2024. We're definitely going higher in 2025 and 2026, but we are fully engaged with our...
partners, right, our customers, and we believe that could be an interesting cash flow to the company that today we are not considering.
On the second piece Marvin, yes, we expect to add some strategic customers, but if you look at our backlog and our business plan, we really have enough coverage there in the LOIs for the first several years of production. Okay, great.
The issue isn't so much for us in building backlog at this particular time. It's what are the right regions and strategic customers to add. And as Stein talked about, we want to be able to support and service not only the aircraft, but support operations on a global basis. And we're recognizing again that there's likely to be dispersed implementation and adoption.
And that has to be resourced properly. So simply adding backlog is not our focus right now. It's about strategy and now defining as Stein talked about launch customers, launch cities. And what is the total plan to support launch in those cities? Stein, you want to add anything to that?
I think a corporate guests might expect to see additional customers, but our main focus is we are in a comfortable position in terms of pipeline and backlog.
that you can put a lot of focus on you
that you can put a lot of focus on assuring how the deployment will be. That's very helpful. Thanks guys.
And so to start the next question we have is coming from the line of Savvy Sith with Raymond James. Please proceed with your question.
Thanks for the follow-up. Just a quick clarification on the UATM side of things. As that develops, when do you expect that that could start generating revenue? When can that segment get stood up?
Don, you want to talk about the six customers we have and the plan for implementation?
Yes, there are a few points there. One that we are already doing actually, it is even on consulting about air traffic management and the concentration. So we are actually generating some revenue already on that. Even before the actual software development, that's already an outcome on all the
it's small really still at this point really small revenue but it's already there. But that's already an outcome of the work done in developing and creating these blueprints in terms of concept of operations.
We can expect that to increase in the years to come, to have continuous to do that work together with partners in terms of developing that track management ecosystem as a whole. And with the software itself, we can make it a lot easier to do that.
a few years down the road before, but even before the entrance service of the aircraft. Keep in mind that the software is agnostic, so we don't need to wait for our entrance service necessarily or to start having revenue from the software.
It's not at the same scale as the particular aircraft service and aircraft sales, but it is very strategic and that's how you're seeing it. It's more about being a strategic part of the puzzle that would allow the VTOLs to fly more efficiently and at scale.
When do you think that that could be meaningful in terms of revenue? Does that depend on when the industry gets some certified EVTOLs? Yeah, yeah, it is again, it is agnostic, it's applicable even before EVTOLs are in place because there's a red, some form of urban airmobiles going on.
And we have reached the end of the question and answer session. And I'll now turn the call back over to Lucille Altworth for close remarks.
Thank you, Shimali, and thanks to everyone who joined the call today. We look forward to updating you on our continued progress throughout the next few quarters as we achieve the operating milestones we just talked about. And we also look forward to meeting you in the upcoming events we're going to attend. If you have any questions, as always, please don't hesitate to reach out to us.
And thanks and have a good day. And this concludes today's conference and you may disconnect your line at this time. Thank you for your participation. Thank you. Thank you for your participation.
So So all.
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