Q1 2024 Blade Air Mobility Inc Earnings Call
Operator: Good morning, ladies and gentlemen, and welcome to the Blade Air Mobility fiscal first quarter 2024 earnings release conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, this call is being recorded. I would now like to turn the conference over to Matt Schneider, Vice President of Investor Relations and Strategic Finance. Matthew, you may begin.
Good morning, ladies and gentlemen, and welcome to the Blade Air Mobility fiscal first quarter 2024 earnings release Conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time as a reminder, this call is being recorded.
I'd now like to turn the conference call for true Matte Schneider, Vice President of Investor Relations and strategic finance.
Matte Schneider: May begin.
Matt Schneider: Thank you for standing by, and welcome to the Blade Air Mobility conference call and webcast for the quarter ended March 31st, 2024. We appreciate everyone joining us today.
Matte Schneider: Thanks, and good morning. Thank.
Speaker Change: Thank you for standing by and welcome to the Bleed Air Mobility Conference call and webcast for the quarter ended March 31 2024.
Matte Schneider: We appreciate everyone joining us today.
Matt Schneider: Before we get started, I would like to remind you of the company's forward-looking statement and safe harbor language. Statements made in this conference call that are not historical facts, including statements about future time periods, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These 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 statement.
Matte Schneider: Before we get started I would like to remind you of the company's forward looking statements and safe Harbor language.
Matte Schneider: Statements made in this conference call that are not historical facts, including statements about future time periods may be deemed to constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Matte Schneider: These forward looking statements are subject to risks and uncertainties.
Matte Schneider: Actual future results may differ materially from those expressed or implied by the forward looking statements.
Matt Schneider: We refer you to our SEC filings, including our annual report on Form 10-K, filed with the SEC, for a more detailed discussion of the risk factors that could cause these differences. Any forward-looking statements provided during the conference call are made only as of the date of this call. As stated in its SEC filings, Blade 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 certain non-GAAP financial measures, which we believe may be useful in evaluating our financial performance.
Matte Schneider: We refer you to our SEC filings, including our annual report on Form 10-K filed with the U S. P. C for a more detailed discussion of the risk factors that could cause these differences.
Matte Schneider: Any forward looking statements provided during the conference call are made only as of the date of this call.
Matte Schneider: As stated in our SEC filings blade disclaims any intent or obligation to update or revise these forward looking statements except as required by law.
Matte Schneider: During today's call. We will also discuss certain non-GAAP financial measures, which we believe may be useful in evaluating our financial performance.
Matt Schneider: A reconciliation of the most directly historical, comparable, consolidated GAAP financial measures to those historical non-GAAP financial measures is provided in our earnings press release and investor presentation. Our press release, investor presentation, and our Form 10-Q and 10-K filings are available on the Investor Relations section of our website at ir.blade.com. These non-GAAP measures should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP
Matte Schneider: A reconciliation of the most directly historical comparable consolidated GAAP financial measures to those historical non-GAAP financial measures is provided in our earnings press release and Investor presentation.
Matte Schneider: Our press release Investor presentation, and our Form 10-Q, and 10-K filings are available on the Investor Relations section of our website at IR <unk> com.
Matte Schneider: These non-GAAP measures should not be considered in isolation or a substitute for financial results prepared in accordance with GAAP.
Robert S. Wiesenthal: Hosting today's call are Rob Wiesenthal, Founder and Chief Executive Officer of Blade, and Will Heyburn, Chief Financial Officer of Blade. I will now turn the call over to Rob. Okay?
Matte Schneider: Hosting todays call are Rob Wiesenthal, founder and Chief Executive Officer of Blade and will Haber, Chief Financial Officer, I will now turn the call over to Rob Rob.
Robert S. Wiesenthal: Thank you, Matt, and good morning, everyone. I'm very pleased to report a strong start to 2024 that represents an early but important first step in achieving the 2024 and 2025 financial guidance that we provided last quarter and reaffirmed today. Most notably, this was the best quarter in company history. For our medical business, we achieved record revenue segment adjusted EBITDA, building upon our dramatic growth driven by increased trip volumes and trip distances, both from existing and newly added hospital clients. This should address issues that have been raised about the impact of competition.
Robert S. Wiesenthal: Thank you, Matt and good morning, everyone I'm very pleased to report a strong start to 2024 that represents an early but important first step in achieving the 2024 and 2025 financial guidance that we provided last quarter and reaffirmed today most notably this was the best quarter in company.
Robert S. Wiesenthal: History for our medical business, we achieved a record revenue and segment adjusted EBITDA building upon our dramatic growth driven by increased trip volumes and trip distances.
Robert S. Wiesenthal: From existing and newly added hospital clients.
Robert S. Wiesenthal: This should address issues that have been raised on the impact of competition. We are America's largest dedicated air transport or a human organs for transplant and we are confident we are the most cost effective as well.
Robert S. Wiesenthal: We are America's largest dedicated air transporter of human organs for transplant, and we are confident we are the most cost-effective as well. Total revenue in the first quarter ending March 31, 2024 increased 13.8% to $51.5 million versus the comparable period in 2023. Excluding the impact of last year's discontinuation of Blade I, our scheduled jet service between New York and South Florida, total revenue increased 21.5% year over year. Profitability continues to improve across the business, driven by several initiatives, including a shift to dedicated aircraft and vehicles in our medical business, meaningful profitability improvements in our New York by-the-seat airport service, and a continuation of cost rationalization programs across the company, including the elimination of unprofitable services such as BladeOne.
Robert S. Wiesenthal: Total revenue in the first quarter ending March 31, 2024 increased 13, 8% to $51 5 million versus the comparable period in 2023, excluding the impact of last year's discontinuation of blade one our schedule jet service between New York and South, Florida total revenue increased <unk>.
Robert S. Wiesenthal: One 5% year over year profitability continues to improve across the business driven by several initiatives, including a shift to dedicated aircraft and vehicles in our medical business meaningful profitability improvements in our New York by the seed Airport service and a continuation of cost rationalization programs across the.
Robert S. Wiesenthal: Including the elimination of unprofitable services, such as blade one while total revenue increased 13, 8% year over year total flight profit increased by 41, 5% year over year as slight margins rose to 19, 7% in Q1 2024 as compared.
Robert S. Wiesenthal: While total revenue increased 13.8% year-over-year, total flight profit increased by 41.5% year-over-year, as flight margins rose to 19.7% in Q1 2024, as compared to 15.8% for the comparable period last year. We achieved significant year-over-year improvement in both the medical and passenger segment adjusted EBITDA, which, when coupled with a 19% year-over-year decline in our adjusted unallocated corporate expenses, drove a strong $4.2 million improvement in adjusted EBITDA in Q1 2024 versus the comparable period last year.
Robert S. Wiesenthal: 258% for the comparable period last year, we achieved significant year over year improvement in both medical and passenger segment, adjusted EBITDA, which when coupled with a 19% year over year decline in our adjusted unallocated corporate expenses drove a strong $4 $2 million improve.
Robert S. Wiesenthal: And adjusted EBITDA in Q1, 2024 versus the comparable period last year.
Robert S. Wiesenthal: Medical revenue increased 34.6% in Q1 2024 year-over-year, and importantly, we saw the resumption of sequential revenue growth in the quarter with revenues increasing 12.6% versus the fourth quarter of 2023. Medical segment adjusted EBITDA increased 134.5% year-over-year as adjusted EBITDA margins rose over 500 basis points versus the comparable period last year. Additionally, our clients' use of perfusion and other organ preservation devices continues to grow the overall market beyond industry expectations, given the ability to move organs over much longer distances and accept organs that just a few years ago would not have been suitable for transplant. When our contracted clients utilize these devices, they continue to use Blade's logistics service. We have now closed on seven of the eight jet aircraft acquisitions that we announced last quarter.
Robert S. Wiesenthal: Medical revenue increased 34, 6% in Q1 2024 year over year and importantly, we saw the resumption of sequential revenue growth in the quarter with revenues, increasing 12, 6% versus the fourth quarter of 2023.
Robert S. Wiesenthal: Medical segment, adjusted EBITDA increased 134, 5% year over year as adjusted EBITDA margins rose over 500 basis points versus the comparable period last year. Additionally, our clients' use of perfusion other organ preservation devices continues to grow the overall <unk>.
Robert S. Wiesenthal: Beyond industry expectations, given the ability to move oregon's over much longer distances and accept organs that just a few years ago would not have been suitable for transplant, what our contracted clients utilize these devices. They continue to use blades logistics services, we have now closed on <unk>.
Robert S. Wiesenthal: Seven of the eight jet aircraft acquisitions that we announced last quarter. This is a win win as it enables lower costs and improve service delivery for our clients and improved flight margins per trip for blade.
Robert S. Wiesenthal: This is a win-win as it enables lower costs and improved service delivery for our clients and improved flight margins per trip for Blade. The vast majority of our flying will remain with third-party-owned and operated aircraft as part of our layered, acid-light approach, enabling maximum flexibility and availability for the hospitals we serve. In our passenger business, despite inconsistent year-over-year revenue comparisons due to the discontinuation of our Blade One scheduled jet service, poor flying weather for the ski season in Europe, and lower passenger volume in Canada, the passenger segment still reported a 0.4 million year-over-year improvement in adjusted EBITDA.
Robert S. Wiesenthal: The vast majority of our flying will remain with third party owned and operated aircraft as part of our layered asset light approach, enabling maximum flexibility and availability for the hospitals, we serve and.
Robert S. Wiesenthal: And our passenger business despite inconsistent year over year revenue comparisons due to the discontinuation of our blade one schedule jet service.
Robert S. Wiesenthal: Our flying whether our ski season in Europe, and lower passenger volume in Canada.
Robert S. Wiesenthal: Singer segments still reported.
Robert S. Wiesenthal: 4 million year over year improvement in adjusted EBITDA.
Robert S. Wiesenthal: Importantly, we continue to see improvement in our New York by-the-seat airport service, with revenues increasing 26% year-over-year in our third consecutive quarter of positive flight margins. The airport business remains our most strategic route, given the combination of the large addressable market of 27 million annual flyers and our proprietary passenger infrastructure in New York City. We have also seen continued growth in revenue per seat, while the total number of airport passes outstanding, which allow flyers to travel between Manhattan and JFK or Newark Airport for as low as $95 per seat, rose more than 30% year-over-year.
Robert S. Wiesenthal: <unk>, we continue to see improvement in our New York by the seat airports service with revenues, increasing 26% year over year and our third consecutive quarter of positive flight margin. The airport business remains our most strategic route given the combination of the large addressable market of $27 million annual Flyers.
Robert S. Wiesenthal: And our proprietary passenger infrastructure in New York City.
Robert S. Wiesenthal: We are also seeing continued growth in revenue per seat, while the total number of airport passengers outstanding which allow flyers to travel between Manhattan, and JFK or Newark Airport for as low as $95 proceed rose more than 30% year over year, given the annual cost of our passes of $795 per pass.
Robert S. Wiesenthal: Given the annual cost of our passes of $795 per pass, purchasers are signaling that they expect to fly Blade Airport more than eight times during the course of the year. As a reminder, Q1 is the seasonally lightest quarter for our short-distance business.
Robert S. Wiesenthal: Purchasers are signaling that they expect to fly blade airport more than eight times during the course of the year.
Robert S. Wiesenthal: As a reminder, Q1 is the seasonally lightest quarter for our short business business, regardless I'm pleased to see that we are delivering on the cost savings and profitability improvements we promise both in the passenger segment and on the corporate level before I turn the call over to will I'd like to address our long planned management transition.
Robert S. Wiesenthal: Regardless, I'm pleased to see that we're delivering on the cost savings and profitability improvements we promised both in the passenger segment and on the corporate level. Before I turn the call over to Will, I would like to address our long-planned management transition in the medical division. Seth Bacon, founder of Trinity Air Medical, which we acquired in September 2021, will assume the role of executive chairman of Blade Medical. He will continue to be involved in all strategic matters, key client relationships, and high-value sales processes.
Robert S. Wiesenthal: Our current medical COO, Scott Wunsch, will assume the role of Chief Executive Officer of Blade Medical. Scott has been with Trinity since 2018 and previously spent 13 years at one of the largest organ procurement organizations in the country. Scott has served as Trinity's COO for the past four years, where he's been responsible for day-to-day oversight of Trinity and, following our acquisition, Blade Medical Operations. Seth has built an incredible team in Phoenix. He is a large shareholder, and from his new position, he will continue to foster the culture of excellence that has led to our incredible success. With that, I'll turn it over to Will.
Robert S. Wiesenthal: <unk> in the medical Division.
Robert S. Wiesenthal: Bacon founder of Trinity Air Medical, which we acquired in September 2021 will assume the role of executive Chairman of <unk> medical.
We will continue to be involved in all strategic manners key client relationships and high value sales processes. Our current medical COO, Scott <unk> will assume the role of Chief Executive Officer of laid medical Scott has been with Trinity Since 2018, and previously spent 13 years at one of the largest organ procurement.
Robert S. Wiesenthal: Stations in the country. Scott has served as Trinity's CFO for the past four years, where he has been responsible for day to day oversight of Trinity and following our acquisition blade medical operations.
Robert S. Wiesenthal: Seth has built an incredible team in Phoenix, he as a large shareholder and from his new position. He will continue to foster the culture of excellence that has led to our incredible success with that I'll turn it over to will.
William A. Heyburn: Thank you, Rob. I'll now walk through a few financial highlights from the quarter. Starting with medical, we're benefiting both from solid industry fundamentals and our strategy to establish and refine the most cost-effective and reliable end-to-end organ logistics platform in the United States. Nationwide, heart, liver, and lung organ transplants rose approximately 9% year-over-year in the first quarter of 2024.
William Chapman Peterson: Thank you Rob I'll now walk through a few financial highlights from the quarter, starting with medical we're benefiting both from solid industry fundamentals and our strategy to establish and refine the most cost effective and reliable end to end organ logistics platform in the United States nationwide heart liver and lung organ transplants Rosa.
William Chapman Peterson: Approximately 9% year over year in the first quarter of 2024 blades growth. Both in terms of trip volumes and in terms of revenues continues to exceed that market growth given new client additions and strong trip growth within our existing client base.
William A. Heyburn: Blade's growth, both in terms of trip volumes and in terms of revenues, continues to exceed that of the market, given new client additions and strong trip growth within our existing client base. We continue to see growth related to our clients' use of multiple new perfusion and organ preservation technologies, which have expanded the transport market by enabling organs to travel over longer distances and by increasing the pool of viable organs for transplantation. Market growth and company initiatives are evident in the commercial momentum we're seeing in the business.
William Chapman Peterson: We continue to see growth related to our clients' use of multiple new profusion of organ preservation technologies, which have expanded the transport market by enabling oregon's travel over longer distances and by increasing the pool of viable organs for transplantation.
William Chapman Peterson: Market growth and company initiatives are evidenced in the commercial momentum we're seeing in the business.
William A. Heyburn: Medical segment revenue rose 34.6% year over year in the first quarter to $36 million, and it rose 12.6% sequentially versus Q4 2023. New clients represented approximately half of the growth in the quarter, and we continue to drive strong revenue growth with our existing clients. We're pleased with the sales pipeline and expect to onboard several new clients both for logistics and for TOPS, our organ matching service, over the coming quarter. We also wanted to highlight how our ground strategy is allowing us to build a deeper, more integrated, and more cost-effective relationship with our clients.
William Chapman Peterson: Medical segment revenue Rose 34, 6% year over year in the first quarter to $36 million and rose 12, 6% sequentially versus Q4 2023.
William Chapman Peterson: New clients represented approximately half of the growth in the quarter and we continue to drive strong revenue growth with our existing clients. We're pleased with the sales pipeline and expect to onboard several new clients, both for logistics and four tops, our Oregon matching service over the coming quarters.
William Chapman Peterson: We also wanted to highlight how our ground strategy is allowing us to build a deeper more integrated and more cost effective relationship with our clients.
William A. Heyburn: Blade now directly operates more than 30 medical vehicles, with many more available through our growing network of third-party drivers, all deployed in our dentist market. Gross revenue represented more than 10% of medical revenue this quarter at above average margins, and it grew more than 70% versus the prior year. Several factors are contributing to improved profitability in the medical segment. Our increased use of dedicated aircraft and ground vehicles provides a mutual benefit to our clients and Blade. We also continue to see an increase in average trip distance, which all translates into improved profitability metrics within our medical business. Medical flight profit rose 84.5% year-over-year to $8 million in Q1 2024.
William Chapman Peterson: Now directly operates more than 30 medical vehicles with many more available through our growing network of third party drivers all deployed in our densest markets.
William Chapman Peterson: Round represented more than 10% the medical revenue this quarter at above average margins and it grew more than 70% versus the prior year.
William Chapman Peterson: Several factors are contributing to improved profitability in the medical segment, our increased use of dedicated aircraft to ground vehicles provides a mutual benefit to our clients and blade. We also continue to see an increase in average trip distance, which all translates into improved profitability metrics within our medical business medical.
William Chapman Peterson: Light profit rose 84, 5% year over year to $8 million in Q1, 2024 medical flight margin increased six points to 22, 3% in the quarter versus the comparable period last year and two points versus Q4 2023.
William A. Heyburn: Medical flight margin increased 6 points to 22.3% in the quarter versus the comparable period last year and 2 points versus Q4 2023. Medical segment adjusted EBITDA rose 134.5% year over year to $4.4 million in Q1 2024 as margins rose over 500 basis points to 12.2%. Going forward in medical, we expect to average single-digit sequential quarterly-over-quarter revenue growth for the remainder of the year. However, as always, the timing of new client onboarding and other factors influences the sequential growth rate in any quarter and can result in some quarter-to-quarter lumpiness.
William Chapman Peterson: Medical segment, adjusted EBITDA Rose 134, 5% year over year to $4 4 million in Q1 2024 as margins rose over 500 basis points to 12, 2%.
William Chapman Peterson: Going forward in medical we expect to average single digit sequential quarter over quarter revenue growth for the remainder of the year as always the timing of new client Onboarding and other factors influencing sequential growth growth rate in any quarter and can result in some quarter to quarter Lumpiness or next quarter ending June 32024 is a particularly.
William A. Heyburn: Our next quarter, ending June 30, 2024, is a particularly tough year-over-year comp given our support of a large hospital on a temporary basis during the 2023 period, which we discussed on our prior earnings call. For medical SG&A, we continue to expect single-digit sequential quarterly-over-quarter growth for the remainder of the year as we ramp up our organ placement and ground offerings. As Rob mentioned, we closed on seven of the eight previously announced aircraft acquisitions.
William Chapman Peterson: Tough year over year comp given our support of a large hospital on a temporary basis. During the 2023 period, which we have discussed on our prior earnings calls for.
William Chapman Peterson: For medical SG&A, we continue to expect single digit sequential quarter over quarter growth for the remainder of the year as we ramp up our Oregon placement and ground offerings as Rob mentioned, we closed on seven of the eight previously announced aircraft acquisitions, while these closings happened after quarter and we're pleased with the free cash.
William A. Heyburn: While these closings happened after quarter end, we're pleased with the free cash flow benefits we've seen in these early days, and we look forward to providing a more thorough update once we've closed on all the aircraft and have accumulated more operating data. Turning to the past, In short distance, 26% growth in airport traffic this quarter was more than offset by poor flying weather for European ski routes and lower passenger volume in Canada, leading to a 5.9% revenue decrease year over year. In Europe, where travel to and from the Alps is the primary driver in the first quarter, weather-related cancellations approximately doubled compared with last year.
William Chapman Peterson: Low benefits we've seen in these early days and we look forward to providing a more thorough update once we close on all the aircraft and have accumulated more operating data.
William Chapman Peterson: Turning to the passenger business and short distance, 26% growth in airport. This quarter was more than offset by poor flying whether for European ski routes and lower passenger volume at Canada, leading to a five 9% revenue decrease year over year.
William Chapman Peterson: In Europe, where travel to and from the apps as the primary driver in the first quarter weather related cancellations approximately doubled compared with last year.
William A. Heyburn: And yet another revenue decreased 29.7% year over year driven by our decision to discontinue Blade 1 at the end of the 2023 winter season, which generated losses and 2.9 million in revenue in Q1 2023. Excluding Blade 1, Jet & Other revenue rose 9.4% year-over-year, driven by increased jet charter activity and growing brand partner revenue. Q2 will be our last quarter for this Blade 1 revenue headwind, expected to be in the range of $1.
William Chapman Peterson: And yet in other revenues decreased 29, 7% year over year, driven by our decision to discontinue blade one at the end of the 2023 winter season, which had generated losses and $2 9 million of revenue in Q1 2023 <unk>.
William Chapman Peterson: Excluding blade, one jet and other revenue rose nine 4% year over year, driven by increased charter activity and growing brand partner revenues Q2 will be our last quarter for display one revenue headwind expected to be in the range of $1 million.
William A. Heyburn: We are delivering on the profitability improvements we promised in Passenger, cutting loss-making products like Blade 1 and optimizing the cost structure. Importantly, Passenger Segment Adjusted EBITDA improved by $0.4 million year-over-year, even in the face of disappointing weather in Europe.
William Chapman Peterson: We are delivering on the profitability improvements we've promised in passenger cutting loss, making products like blade, one and optimizing the cost structure importantly passenger segment adjusted EBITDA improved by <unk> 4 million year over year, even in the face of disappointing weather in Europe going forward and passenger we expect continued year over year improvement in passenger segment adjusted EBITDA.
William A. Heyburn: Going forward in Passenger, we expect continued year-over-year improvement in Passenger Segment Adjusted EBITDA driven by SG&A Cost Efficiency. On the corporate cost side, we once again reduced our adjusted unallocated corporate expenses with a 19 percent decline in Q1 2024 versus the prior year period. This, combined with our improvement in both passenger and medical segment adjusted EBITDA, led to a 4.2 million improvement in adjusted EBITDA versus the prior year period to negative 3.5 million in Q1 2024.
William Chapman Peterson: Driven by SG&A cost efficiencies on the corporate cost side, we once again reduced our adjusted unallocated corporate expenses with a 19% decline in Q1 2024 versus the prior year period. This combined with our improvement in both passenger and medical segment adjusted EBITDA led to a $4 $2 million.
William Chapman Peterson: <unk> and adjusted EBITDA versus the prior year period, the negative $3 5 million in Q1 2024 for the remainder of the year, we expect adjusted unallocated corporate expenses to be flat to down.
William A. Heyburn: For the remainder of the year, we expect adjusted unallocated corporate expenses to be flat to down. On the cash flow front, cash from operations was a $15.6 million usage in the past year. The difference between adjusted EBITDA and cash from operations in the quarter was primarily driven by a $2.6 million increase in accounts receivable and a $10.2 million reduction in accounts payable and accrued expenses, which was driven by cash payments for the Trinity contingent consideration resulting from our acquisition and by our 2023 short-term incentive. Please note that this will be the last Trinity contingent consideration payment. Capital expenditures of $1.1 million were driven primarily by leasehold improvements related to the build-out of larger office space in Tempe, Arizona for our growing medical business, along with investments in software development.
William Chapman Peterson: On the cash flow front cash from operations was $15 6 million usage in the quarter. The difference between adjusted EBITDA and cash from operations in the quarter was primarily driven by a $2 6 million increase in accounts receivable and a $10 2 million reduction in accounts payable and accrued expenses, which was driven by cash payments for the Trinity contingent consider.
William Chapman Peterson: Asian, resulting from our acquisition and by our 2023 short term incentive plans.
William Chapman Peterson: Please note that this will be the last Trinity contingent consideration payments.
William Chapman Peterson: Capital expenditures of $1 1 million were driven primarily by leasehold improvements related to the build out of larger office space in Tempe, Arizona for our growing medical business along with investments in software development.
William A. Heyburn: We ended the quarter with no debt and $151 million of cash in short-term investments, providing flexibility for strategic investments, acquisitions, and opportunistic share repurchase. On the guidance front, we are reiterating the 2024 and 2025 guidance we introduced last quarter, most notably for positive-adjusted EBITDA in 2024 and double-digit-adjusted EBITDA in 2025. And we believe this quarter's results represent an important first step in achieving those goals. Last but not least, I'd like to take this opportunity to welcome Matt Schneider to the team as VP of investor relations and strategic finance.
William Chapman Peterson: We ended the quarter with no debt and $151 million of cash and short term investments, providing flexibility for strategic investments acquisitions and opportunistic share repurchases on the guidance front. We are reiterating the 2024 and 2025 guidance, we introduced last quarter, most notably for positive adjusted EBITDA in 2024 and double digits.
William Chapman Peterson: Adjusted EBITDA in 2025, and we believe this quarter's results represent an important first step in achieving those goals.
Speaker Change: Last but not least I'd like to take this opportunity to welcome Matt Schneider to the team as VP of Investor Relations and strategic Finance, Matt has had a long career spanning sell side research and public equity investing with a focus on aerospace we're lucky to have him on board and I look forward to introducing many of you to him in the coming weeks with that I'll turn it back over to Rob.
William A. Heyburn: Matt has had a long career spanning sell-side research and public equity investing with a focus on aerospace. We're lucky to have him on board, and I look forward to introducing many of you to him in the coming weeks. With that, I'll turn it back over to Rob. Thank you, Will. I just have a few catch-up items to review. From time to time, we receive questions regarding quarterly stock sales by senior executives.
William A. Heyburn: Please note that these sales represent a sell-to-cover mechanism whereby the company transfers vested RCUs to executives net of shares sold to pay taxes owed and due at the time of vesting. This program is clearly noted in our form for filing. With respect to our corporate SEC disclosure and investor materials, given the intense interest in a rapidly growing medical business, Blade Metamobility, we are refocusing these materials to provide greater clarity and insight into this business, which is now the largest in our company. In closing, we are off to a great start to the year, and we're increasingly confident in the improving profitability outlook for our businesses. And now I'll turn it over to Matt for questions.
Robert S. Wiesenthal: Well I just have a few catch up items to review from.
Robert S. Wiesenthal: From time to time, we received questions regarding quarterly stock sales by senior executives. Please note that these sales represent a sell to cover mechanism whereby the company transfers vested <unk> two executives net of shares sold to pay taxes owed in view at the time of investing as program is clearly noted in our form four filings.
Robert S. Wiesenthal: With respect to our corporate SEC disclosure and investor materials, given the intense interest in our rapidly growing medical business blade men in mobility. We are refocusing these materials to provide greater clarity and insight into this business, which is now the largest in our company in closing we are off to a great start to the year.
Robert S. Wiesenthal: And we're increasingly confident in the improving profitability outlook for our businesses.
Robert S. Wiesenthal: And now I'll turn it over to Matt for questions.
Matt Schneider: Thanks, Rob. We'll start by taking questions from the analyst community, and we'll follow with a few questions from the SAY Q&A platform. I'll now turn it over to the operator for questions from the analysts.
Matt Schneider: Thanks, Rob we will start by taking questions from the analyst community and will follow with a few questions from the Se Q&A platform.
Operator: Now I'll turn it over to the operator for analysts' questions.
Operator: Thank you. As a reminder, to ask a question at this time, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment while we compile our Q&A roster. And our first question is going to come from the line of Jason Helfstein with Oppenheimer. Your line is open. Please go ahead.
Speaker Change: Thank you as a reminder to ask a question at this time. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment, while we compile our Q&A roster.
Speaker Change: And our first question is going to come from the line of Jason <unk> with.
Jason: Oppenheimer. Your line is open. Please go ahead.
Jason Stuart Helfstein: Thanks. I have two questions. First on medical mobility and the second on passengers. So you've kind of given us pretty much details, kind of growth guidance for the rest of the year. As we think about next year, do you think about, kind of, can you still grow faster than the industry next year or just kind of, you know, you just start to look more like the industry next year and maybe just talk about the factors around the growth of that as we're thinking about maybe a year or two?
Jason: Thanks, two questions first on medical mobility in the second.
Jason: Passenger so you've kind of given us pretty much detail, what kind of growth guidance for the rest of the year.
Jason: As we think about next year do you think about kind of can you still grow faster than the industry next year.
Jason: You start to look more like the industry next year and maybe you can talk about.
Jason: The factors around the growth of that as we're thinking maybe a year or two and then second and passenger I think gross margin.
Jason Stuart Helfstein: And then second, in passenger, I think gross margin came in a little bit weaker than we expected. Maybe just talk about the dynamics there and how you're thinking about passenger gross margin or gross profitability for the rest of the year and just, you know, whatever initiatives you have that might factor into that. Thank you.
Jason: Came in a little bit weaker than we expected maybe just talk about the dynamic there and how youre thinking about passenger growth.
Jason: Our general gross profitability for the rest of the year.
Speaker Change: Whatever initiatives you have that might factor into that thank you.
William A. Heyburn: Thanks for the questions, Jason. I will speak now.
William A. Heyburn: On the medical side, yes, I do believe we can continue to outpace the market growth in medical. Because remember, when you think about the unit of an organ, our unit is a flight block hour, and then we have a lot of ancillary revenues that we can make on a trip as well, particularly the growth in our ground business and the introduction of the top service. So if you still see that high single-digit growth in the number of organs that are being transplanted in America because of some of the new technology and centers getting more aggressive, that incremental organ is often coming from farther away.
Speaker Change: Thanks for the questions Jason will speaking on the medical side, Yes, do believe we continue can continue to outpace the market growth and medical because remember when you think about the unit as Evan Oregon, Our unit as a flight block hour and then we have a lot of ancillary revenues that we can make on a trip as well.
Speaker Change: The growth in our ground business and the introduction of the top service. So if you still see that high single digit growth in the number of organs that are being transplanted in America because of some of the new technology and center is getting more aggressive that incremental Oregon is often coming from farther away. So there's a multiplier on the growth for us and then we hope to be able to.
William A. Heyburn: So there's a multiplier effect on growth for us, and then we hope to be able to continue to go deeper with all of our customers, help them on the ground, and help them with organ matching as well.
Speaker Change: To go deeper with all of our customers help them on the ground and help them with Oregon matching as well. So I think there's multiple ways to exceed that market growth in medical.
William A. Heyburn: So I think there's multiple ways to exceed that market growth in medical. Let me talk about passengers for a second. I think in terms of the margins, obviously Q1 is historically the lightest quarter, and it's very easy to have noise in those numbers. As I mentioned previously, Europe had a really difficult ski season in terms of cancellations of flights due to weather, and the best way we can look at that is to take a look at bookings versus revenue.
Speaker Change: Let me talk about past there for a second.
Speaker Change: I think in terms of the margins. Obviously Q1 is historically the lightest quarter and it's very easy to have noise in those numbers as I mentioned.
Speaker Change: Previously.
Speaker Change: Europe had a really.
Speaker Change: Difficult ski season in terms of cancellations of flights due to weather and the best way. We look at that is to take a look at bookings versus revenue and when you look at bookings versus revenue you see a much stronger picture in terms of flight that would have happened if were not for weather and so overall and then on the U S side, we saw really.
William A. Heyburn: When you look at bookings versus revenue, you see a much stronger picture in terms of flights that would have happened if it were not for weather. Then, on the U.S. side, we saw a really solid improvement in the performance there. I think we remain confident on the passenger side. I'd really look at this as an enlargement of any kind of performance that you notice for Q1, just because it's such a small quarter historically and just for the business in general.
Speaker Change: Solid improvement.
Speaker Change: And the performance there. So I think I think we remain confident on the passenger side I would really look at this as.
Speaker Change: Kind of the.
Speaker Change: It's really just kind of an enlargement of the performance of any kind of performance that you noticed for Q1, just because it's such a small quarter.
Speaker Change: Historically and just.
Speaker Change: For the business in general.
Speaker Change: Yes.
Speaker Change: Anything else Jason.
William A. Heyburn: I mean, do you have any thoughts about how you think passenger margins will trend the rest of the year?
Speaker Change: Alright.
Speaker Change: Any thoughts about how you think passenger margin trend there for the year.
William A. Heyburn: You know, you're always going to see better margins once you get into our summer season. Those are our highest gross margin products. And it's also our opportunity for growing products like Blade Airport to get the highest load factor in terms of the number of seats that are full on the aircraft.
Speaker Change: Youre always going to see better margins once you get into our summer season.
Those are our highest gross margin products.
Speaker Change: And it's also our opportunity on growing products like blade airport to get the highest load factor in terms of number of seats that are full on the aircraft. So you should see improvement, particularly going into Q2 and Q3 and of course, when you think about something like Europe almost half of the revenue comes through in Q3, So thats really.
William A. Heyburn: So you should see improvement, particularly going into Q2 and Q3. And, of course, when you think about something like Europe, almost half of the revenue comes through in Q3. So that's really the most important quarter.
William A. Heyburn: And we do expect to see pretty significant year-over-year segment adjusted EBITDA improvement in passenger this year. And if you take a look at the market also taking on the U.S. side, increases in per seat prices, you know, that's something that's held really well. We expect that to continue. And I think now that we have a new management team in place in Europe, you're not going to see lower prices in terms of per seat basis because we're starting to introduce fare classes like we have in the U.S., which has been a huge driver of incremental pricing for passengers.
Speaker Change: The most important quarter and we do expect to see a pretty significant year over year segment adjusted EBITDA improvement in passenger this year and if you take a look at the market also taking on the U S side.
Speaker Change: Increases in per see prices.
Speaker Change: That's something that's held really well, we expect that to continue and I think now that we have a new management team in.
Speaker Change: In place in Europe, Youre, not youre going to see strong.
Speaker Change: Stronger pricing in terms of per seat basis, because we're starting to introduce fare classes like we have in the U S, which has been a huge driver of incremental pricing for passengers. So they have the choice to get.
William A. Heyburn: So they have the choice to, you know, get a kind of low-cost opportunity to fly Blade safely between East and Monaco, but then they can also pay for flexibility that can add 20, 30% to the price of its seat. So that's starting to be adopted in Europe. So a lot of the strategies in the U.S. are starting to move to Europe with this new management team that we have in place. So I'm pretty confident about that flowing over the Atlantic and enjoying, you know, continued improvement, especially, as Will said, in our most important quarter, which is Q3.
Speaker Change: Kind of low low cost opportunity to fly blade safeguard between eastern Monaco, but then also can pay for flexibility that can add 2030% to the price of its seats. So that's starting to be.
Speaker Change: Adopted in Europe, So a lot of the strategy in the U S are starting to move to Europe with this new.
Speaker Change: With this new management team that we have in place so I'm pretty confident about.
Speaker Change: That flowing over the Atlantic and going up continued improvement, especially as well said and our most important quarter, which is Q3.
Speaker Change: Thank you.
Speaker Change: Thank you and one moment as we move on to our next question.
Xin Yu: Thank you, and one moment as we move on to our next question. Our next question is going to come from the line of Edison Yu with Deutsche Bank. Your line is open. Please go ahead.
Our next question is going to come from the line of Edison <unk> with Deutsche Bank. Your line is open. Please go ahead.
William A. Heyburn: Great, thanks for taking our questions. One, maybe get your thoughts on the buyback. Obviously, you do have a lot of cash, and you launched it out, which is, which I think is very encouraging. What were your thoughts on the quantity and the timing, potential timing of it going forward?
Edison: Great. Thanks for taking our questions.
Edison: Once they get maybe get your thoughts on the on the buyback.
Edison: You do have a lot of cash in the launch.
Edison: I think it's very encouraging what were the.
Edison: I guess thoughts into.
Edison: The quantity and the timing and potential timing of that going for us.
William A. Heyburn: I'll take that. We have not purchased any stock yet. We did authorize a repurchase program, so we have that tool in our toolbox to further enhance shareholder value when we see major disconnects between the trading value of our company and its intrinsic value. But at the same time, we need to evaluate that option in the context of organic growth investments and accretive acquisitions that we're focusing on finding and analyzing, and considering almost every day.
Speaker Change: Sure I'll take that.
Speaker Change: <unk> not purchased any stock yet we did authorized a repurchase program. So we have that tool in our toolbox to further enhance shareholder value when we see major disconnects between the trading value of our company and the intrinsic value, but at the same time, we need to evaluate that option in the context of organic growth investments and.
Speaker Change: And accretive acquisitions that were focusing on finding and analyzing considering almost every day and that's the right way to supercharge the growth of the company and to create the most value for shareholders in the long term and clearly right now when you take a look where interest rates right now being so high we are at a huge competitive advantage versus our competition in terms of evaluating.
William A. Heyburn: And that's the right way to supercharge the growth of the company and to create the most value for shareholders in the long term. And clearly right now, when you take a look at interest rates right now being so high, we're at a huge competitive advantage versus our competition in terms of evaluating acquisitions because we don't have that need to lever up any kind of deal given our cash balance makes a lot more competitive versus private equity or any kind of management LBO. So again, it's another tool in our toolbox, and whatever number we would ever use in terms of buying back stock, it would be prudent in the context of our overall capital structure.
Operator: Understood. And a separate, separate follow up.
Speaker Change: Acquisitions with because we don't have that need.
Speaker Change: To lever up any kind of deal given our cash balance makes a lot more competitive versus private equity or any kind of match from an LBO. So again it has to have another tool in our toolbox.
Speaker Change: And whatever number we would ever use in terms of buying back.
Speaker Change: Backstop, it would be prudent and in the context of our overall capital structure.
William A. Heyburn: I'm curious if you looked at some other areas of expansion on the ground side. I saw you recently had this partnership with the jet. Just curious if there's more kind of niche opportunities there you maybe could tap into. Sure.
Speaker Change: Okay.
Speaker Change: Understood.
Speaker Change: So quick follow up.
Speaker Change: If you looked at.
Speaker Change: Some other areas of the expansion and the ground side ground side I saw you recently.
Speaker Change: And this partnership with the jet just curious if there's more kind of.
Speaker Change: Niche opportunities there, maybe actually could could tap into.
Robert S. Wiesenthal: Sure. Look, I think there are two things.
Robert S. Wiesenthal: Just to mention the partnership with the jet. That really was driven by marketing. As you saw, I think we even announced that we had a strong performance in our brand partnership revenues. Tons of brands on a global basis want to get in front of our passengers and are willing to pay for that privilege. So that product, while not incredibly meaningful in terms of scale, gives what our brand partners want, which is another canvas to get in front of passengers, this time for a longer period of time than on air.
Speaker Change: Sure.
Look I think there are two things you just mentioned that the partnership with the jet that really was driven by marketing as you saw I think we even announced that we had strong performance in our brand partnership.
Speaker Change: Revenues tons of brands on a global basis. Once you get in front of our passengers and are willing to pay for that privilege privilege to that product.
Speaker Change: While not incredibly meaningful in terms of scale.
Speaker Change: Is.
Speaker Change: What the our brand partners want which is a another.
Speaker Change: Canvas to get in front of our passengers.
Robert S. Wiesenthal: It's something they want, and it's something they're willing to pay for, and we're happy to oblige. But in terms of what you said, a kind of expansion in terms of movements and such, we view ourselves as a company that moves critical cargo, whether passengers or surgeons, with organs. So we are hard at work looking at everything from moving blood samples, tissue samples, other types of critical cargo, AOG parts for aircraft, and anything that needs to get someplace quickly. We have a good chain, a kind of very visible chain of custody, and a really strong logistics background.
Speaker Change: Time for a longer period of time than by air.
Speaker Change: And it's something they want and if somebody willing to pay for and we're happy to oblige, but in terms of kind of.
Speaker Change: What you said it kind of expansion in terms of movements and as such we view ourselves as a company that views that moves critical cargo with their passengers or or surgeons with.
Speaker Change: With Oregon's so we are hard hard at work looking at everything from moving blood samples tissue samples.
Speaker Change: Other types of critical cargo.
Speaker Change: G parts for.
Four aircrafts.
Speaker Change: And anything that needs to get someplace quickly I have a good chain.
Speaker Change: Very physical chain of custody.
Robert S. Wiesenthal: And I think we're really well equipped because of our logistics strength on the passenger and especially on the medical side to move a lot of other critical cargo besides organs. And I think you'll hopefully see more to come in the coming year.
Speaker Change: And a really strong logistics background and I think we're really well equipped.
Speaker Change: Because of our logistics strength on the passenger and especially on the medical side to move a lot of other critical cargo besides.
Speaker Change: Oregon, and I think youll, hopefully see more to come in the coming year.
Speaker Change: Great. Thank you.
Jon Robert Hickman: Thank you, and one moment for our next question. Our next question is going to come from the line of Jon Hickman with Ledenberg-Solomon. Your line is open, please go ahead.
Speaker Change: Thank you and one moment for our next question.
Speaker Change: Our next question is going to come from the line of Jon Hickman with Ladenburg Thalmann. Your line is open. Please go ahead.
Jon Robert Hickman: Hi, I just have two questions. Could you just talk about why Canada was weak for a minute? And also, what are we supposed to expect from depreciation as you now own seven? Well, potentially eight aircraft.
Speaker Change: Hi.
Jon Robert Hickman: I just have two questions.
Jon Robert Hickman: Could you just talk about why Canada was weak for them and also what are we supposed to expect from depreciation as you now own seven well potentially eight aircraft.
William A. Heyburn: Thanks for the question, Sean. You know, Canada, we're still seeing some weakness in terms of overall seats flown, that we believe is driven by a shift towards still more remote meetings with government officials and the provincial capital of British Columbia versus what we saw in the pre-COVID period. And we still expect to see, on a free cash flow margin basis, a 5 to 10 point increase in the performance of those owned aircraft versus aircraft that we use under a capacity purchase agreement.
Speaker Change: Thanks for the questions John.
Jon Robert Hickman: Canada, we're still seeing some weakness in terms of overall seats flown that we believe is driven by <unk>.
Jon Robert Hickman: Shifting towards still more remote meetings with government officials in the provincial capital in British Columbia versus what we saw in the pre Covid period.
Jon Robert Hickman: So we think that's the major driver there in terms of what we expect to see on the new aircraft that we own.
Jon Robert Hickman: It's early days, we closed on 78 aircraft after the quarter end, but we're already seeing in overall free cash flow benefits and we still expect to see on a free cash flow margin basis a five.
Jon Robert Hickman: Five to 10 point increase in their performance for those owned aircraft versus aircrafts that would use under our capacity purchase agreement.
William A. Heyburn: Irrespective of the depreciation, you know, you'll be trading some expense that was an hourly rate paid to a third party for some depreciation, but what we care about is the free cash flow, and that's where we expect to see five to 10 point expansion. And once we have a little more data, a quarter or so, we'll come back to you with some more specific details about all the different line items. But we're definitely seeing the performance benefit we expected so far in these early days.
Jon Robert Hickman: So.
Jon Robert Hickman: Irrespective of the depreciation you'll be trading some expense. It was an hourly rate paid to a third party for some depreciation but what we care about is the free cash flow and that's where we expect to see.
Jon Robert Hickman: Five to 10 point expansion once we have a little more data a quarter or so we'll come back to you with some more specific details about all the different line items.
Jon Robert Hickman: We're definitely seeing the performance benefit we expected so far in this early days.
William A. Heyburn: So, from a model point of view, the expense that would have been kind of a cost of goods sold should go down a little bit, and then... on the STN on your operating there'll be more higher depreciation from those, and you'll have to pay for your own gas and stuff like that.
Jon Robert Hickman: So.
Jon Robert Hickman: So from a model point of view.
Jon Robert Hickman: The expense that would have been kind of cost of goods sold.
That should go down a little bit and then.
Jon Robert Hickman: On the SG&A on your operating.
Jon Robert Hickman: There'll be higher depreciation.
Jon Robert Hickman: From those.
Jon Robert Hickman: And you'll have to pay for your.
Jon Robert Hickman: Your own gas and stuff like that.
William A. Heyburn: It's sort of just moving into different buckets, but the overall bucket of the cash that we pay to get the lift that we need for our medical customers, we're going to spend less, we believe, on a per hour basis. And you'll see that benefit in the cost of revenue line, correct? Just one thing I'd add, I mean, we're still looking at a very small percentage of the overall fleet being owned. But I have to admit that, you know, I believe that you're going to see a very meaningful increase in margins that more than make up for any concern you might have on free cash flow in terms of, you know, depreciation and, you know, looking at depreciation or capex.
Jon Robert Hickman: Yes.
Jon Robert Hickman: Just moving into different buckets, but the overall bucket of the cash that we pay to get the lift that we need for our medical customers.
Jon Robert Hickman: We're going to spend less we believe on a per hour basis, and you'll see that benefit in the cost of revenue line correct. Just one thing I would add I mean, we're looking still at a very small percentage of overall fleet being phones, but I have to admit that.
Speaker Change: I believe that youre going to see.
Speaker Change: Very meaningful increase in margins that more than.
Speaker Change: Then more than make up for any concern you might have on the free cash flow.
Speaker Change: In terms of.
Speaker Change: Depreciation and.
Speaker Change: Looking at depreciation or Capex, so it really is.
William A. Heyburn: So it really is a balancing act where we believe we're, you know, we're still in the dark. But we were trying to do is just make sure that we have all, you know, 24-7 access for all our customers and are able to accommodate them when needed. And when we see something opportunistic, like these acquisitions, these planes, and have them well placed, we can just enjoy so much better margins than we could if we were not owning them.
Speaker Change: Balancing act, where we believe we are still asset light.
Speaker Change: But we were trying to do is just make sure that we have.
Speaker Change: 27 access for all our customers and are able to accommodate them when needed and when we see something opportunistic.
Speaker Change: Like its acquisition of these planes and to have them wait well placed within just enjoy so.
William A. Heyburn: And essentially, what it works out to is when you're operating a plane 24-7, you're pretty much just giving money away if you're not owning them. But again, we just have to be very careful, and we are being prudent in making sure that the vast majority of our lift is on and at.
Speaker Change: So much better margins than we could if we were not owning them and essentially what it works out to use when youre out when you're operating a planed 24, seven you are pretty much just giving money away if youre not owning them, but again, we just got to be very careful and we are being prudent and making sure that the vast majority of our lift is.
Speaker Change: On an asset light basis.
William A. Heyburn: And just one more question there. On the pilot side, do you think that is still a constant good soul? I mean, Payne the Pilot.
Speaker Change: Okay.
And just one more question there on.
Speaker Change: On the pilot side.
Speaker Change: Do you.
Speaker Change: Is that still the consequent sold.
William A. Heyburn: Remember, we're not operating. Remember, we don't own we don't operate these aircraft; we just own them. So we're going to be benefiting from pass-through billing. But you'll still see that come through on the COGS line for something like pilot.
Speaker Change: I mean, the pilot remember we're not operating.
Speaker Change: Remember, we don't own we don't operate these aircraft we just on them. So we're going to be benefiting from pass through billing.
Speaker Change: But you'll still see that come through on the Cogs line for something like pilots.
Speaker Change: Okay.
William A. Heyburn: But it will now get the fixed cost leverage of that. Instead of paying a fixed hourly rate per hour that we fly, now you're going to have the fixed cost leverage of the pilot's salaries, which are what they are. And as we fly more, of course, we're only acquiring aircraft in areas where we have multiple overlapping contracts with different hospitals, and we highly utilize the aircraft in terms of hours flown per month. So you'll be able to get that incremental fixed cost leverage through pass-through economics that we couldn't get before when we were just paying X rate flat rate per hour, and
Speaker Change: Okay.
Speaker Change: So we'll now get the fixed cost leverage of that instead of paying us.
Speaker Change: Fixed hourly rate per hour that we fly now youre going to have the fixed cost leverage of the pilot salaries are what they are and as we fly more of course, we were only acquiring aircraft in areas, where we have multiple overlapping contracts with different hospitals and we're highly utilizing the aircraft in terms of hours flown per month. So.
Speaker Change: Youll be able to get that incremental fixed cost leverage through the pass through economics that we couldnt get before when we were just paying X rate flat per hour flown.
Robert S. Wiesenthal: And then, can I just ask? So I noticed you've started this, like, Luxury Bus Service from Manhattan to the Hamptons.
Speaker Change: And then can I shift.
Speaker Change: I noticed you've started this.
Speaker Change: <unk>.
Speaker Change: Luxury bus service.
Speaker Change: From Manhattan to the.
Speaker Change: Hamptons.
Robert S. Wiesenthal: Yeah, I think we just covered that real quick. That's not going to be any type of meaningful driver revenues in the short term, but it's not going to be any kind of drag on profit whatsoever. Again, this was really driven by our brand partnerships, where our brand partners wanted an additional canvas to market their products. But also, when you think about the weather in the New York area in the summer, this gives us an opportunity to keep people within our ecosystem.
Speaker Change: This is actually I think we just covered that.
Speaker Change: Real quick that's not going to be any type of.
Speaker Change: In the short term any kind of meaningful.
Speaker Change: Driver revenues, but it's not going to be any kind of drag on profit whatsoever.
Speaker Change: This was really driven by our brand partnerships.
Speaker Change: Our brand partners wanted an additional canvas.
Speaker Change: So you kind of to market their products, but also when you think about whether in.
Speaker Change: And the New York area in the summer this gives us an opportunity to kind of keep people within an ecosystem. So if theres a flight is canceled or whether they can go onto streamliner, if people have excess luggage, which sometimes they do we can easily move it to their destination.
Robert S. Wiesenthal: So if there's a flight that's canceled for weather, they can go on a Streamliner. If people have excess luggage, which sometimes they do, we can easily move it to their destination on the Streamliner and charge them for that. So it does fit in nicely with our core leisure business as well. So I think it's a good thing to have on two prongs.
Speaker Change: The streamliner and charge them for that so it does fit in nicely with our core.
Speaker Change: Leisure business.
Speaker Change: Well so we've got I think it's a good it's a good thing to have in two products.
Speaker Change: Okay.
Bill Peterson: Thank you, and one moment for our next question. And our next question comes from the line of Bill Peterson with J.P. Morgan. Your line is open. Please go ahead.
Speaker Change: Yes.
Speaker Change: Thank you and one moment for our next question.
Speaker Change: And our next question comes from the line of Bill Peterson with Jpmorgan. Your line is open. Please go ahead.
Bill Peterson: Hi, good morning, and thanks for taking the questions. I wanted to start with medical and then talk about the competition.
Bill Peterson: Yes, hi, good.
Bill Peterson: Thanks for taking the questions I wanted to first start with medical and about the competition.
Bill Peterson: So, I guess, first of all, are you seeing any shifts in terms of transplantation for our customers as a result of competition? For example, are most choosing a dual source for these services if they weren't doing this prior? Are any new customers changing their contract lengths or sizes versus historical norms? And I guess, you know, the context is, I guess, there are about 250 transplant centers; one competitor now is talking about 105.
Bill Peterson: So I guess first of all are you seeing any shifts.
Bill Peterson: In terms of the transplant center customers as well as a result of competition for example.
Bill Peterson: Our most choosing a dual source.
Bill Peterson: For these services if they werent doing this prior.
Bill Peterson: Are there any customers changing their contract lengths or sizes versus historical norms.
Bill Peterson: And I guess.
Bill Peterson: I guess it was about 250 transplant centers.
Bill Peterson: Peter and I was talking about 105.
Bill Peterson: So, I guess, trying to get a sense of how to think about the growth of this business and how, you know, how to think about it in the context of potential dual sourcing for these transplant centers.
Bill Peterson: So I guess I'm trying to get a sense of how to think about the growth of this business and how.
Bill Peterson: How to think about it in the context of a potential dual sourcing for these transplant centers.
William A. Heyburn: Thanks for the question, Bill. You know, we've seen nothing but really positive momentum in the medical business, both in terms of new customer acquisition. We've got a great pipeline for the rest of the year. You saw that half of our growth was from new customers. But we've also seen incredible growth within all of our existing customers. That's any way you slice it.
Speaker Change: Thanks for the question Bill.
Peter: We've seen nothing but really positive momentum in the medical business. Both in terms of new customer acquisition, we've got a great pipeline for the rest of the year you saw about half of our growth was from new customers, but we've also seen incredible growth within all of our existing customers.
Peter: Any way you slice it that's the number of trips that we're doing with them. That's trip distances. That's overall revenue from our existing customer base. So if theres a shift what we're seeing is that our customers are getting more aggressive in terms of how far they are willing to fly to pick up in Oregon.
Robert S. Wiesenthal: That's the number of trips that we're doing with them. That's the trip distance. That's overall revenue from our existing customer base. So if there's a shift, what we're seeing is that our customers are becoming more aggressive in terms of how far they're willing to fly to pick up an organ. And they're taking advantage of a bunch of new technologies, both perfusion and other organ preservation technologies that are enabling some of those efforts. And it's been a benefit to us across the board. Bill, Bill, I just want to add here because I'm glad you asked the question. And I think that the quarter speaks for itself.
Peter: And they're taking advantage of a bunch of new technologies, both perfusion and other organ preservation technologies that are enabling some of those efforts and our model remains a contracted first call model.
Peter: That's how we're able to position aircraft strategically to lower cost for our customers and eliminate repositioning.
Peter: And so that's what we've continued and.
Peter: We've seen great progress from folks in the industry that are making perfusion equipment that is growing the market.
Peter: And it's been a benefit to us is.
Peter: Across the board.
Speaker Change: Bill I just wanted to add in here because I'm glad you asked the question.
Robert S. Wiesenthal: We had a record high revenue, 36 million in medical, and we grew 135% in EBITDA, and we've gotten this question before. We continue to see growth. We think our competitive stature is strong. We are the largest in the industry, and with respect to any competition, not only are contracts, you know, people, you know, people obviously abide by all their contracts, and we're getting new customers every day. But, you know, the perfusion devices that are out there have only supercharged our business with the ability to move these organs longer distances. So, you know, I cannot be more confident about our competitive stature. I'm not; I'm someone who's not prone to hyperbole.
Speaker Change: And I think that the quarter speaks for itself, we had record high revenue of $36 million in medical and we grew 135%.
Speaker Change: And EBITDA.
Speaker Change: And we've gotten this question before we can we continue to see growth, we think our competitive stature is strong.
Speaker Change: We are the largest in the industry.
Speaker Change: With respect to any competition not only our contracts people people, obviously abide by all of their contracts and we're getting new customers every day, but the perfusion devices that are out there have only supercharged our business by the ability to move these oregon's longer distances. So.
Speaker Change: I cannot be more confident about our competitive stature I'm not someone who is not prone to hyperbole.
William A. Heyburn: And, you know, Bill, if it's helpful, you know, we're still seeing kind of a teens percentage of trips that use some kind of perfusion or organ preservation equipment. The vast majority of the flying that we do for our customers is still using traditional cold storage. And, you know, it's, it's, it's really been a positive on all fronts. And we move moving organs with perfusion devices every day
Speaker Change: And Bill if it's helpful. We're still seeing kind of a teens percentage of trips that use some kind of profusion organ preservation equipment.
Speaker Change: The vast majority of the flying that we're doing for our customers.
Speaker Change: Still using traditional cold storage and.
Speaker Change: It's really been a positive on all fronts, and we're and we're moving moving Oregon's with perfusion devices every day.
Bill Peterson: Okay, thanks for that. Now, I want to pivot over to the passenger business. So especially, you know, against the context of revenue growth for medical and your reiteration of the guidance and focus on profitability. I want to kind of talk about the seasonality of the business, how to think about it from here, in terms of passenger volume. But then I guess there's the other component of revenue and profitability about pricing. I believe your airport was around maybe 300 leaving 4Q on an average sort of average seat basis.
Bill Peterson: Okay. Thanks for that I want to pivot over to the passenger business.
Speaker Change: Yeah.
Speaker Change: I guess the context of the revenue growth in medical and your reiteration of the guidance and focus on profitability.
Speaker Change: Kind of talk about the seasonality of the business how to think about it from here from a passenger volume, but then I guess is the other component of revenue and profitability about pricing I believe we do airport.
Speaker Change: Maybe 300 exiting <unk>.
Bill Peterson: Kind of wondering how the trends were in the first quarter and then how we should think about trends and pricing for the second quarter and back half of the year. And then, I think you alluded to earlier, maybe some potential for an uplift in European pricing. Is there any benefit there this year, or is that more maybe beyond this year? So components about the passenger.
Speaker Change: On an average sort of average seat basis.
Speaker Change: Kind of wondering how the trends were in the first quarter and then how we should think about trends in pricing for the second quarter and back half of the year and then I think you alluded to earlier, maybe some potential for uplift in European pricing should we is there any benefit there this year or is that more.
Speaker Change: Maybe beyond this year, so components about that.
Speaker Change: The passenger business please.
William A. Heyburn: Yeah, so Bill, I think the seasonality is going to remain pretty consistent with what you've seen in short distance historically. Just looking at kind of the general distribution of revenues last year in short distance should still be a really good guide as to what we expect for this year. In terms of pricing, we continue to see benefits. We're above that $300 per seat price on average for the airport product here in the U.S. today.
Speaker Change: Yes, So bill I think the seasonality is going to remain pretty consistent with what you've seen in short distance. Historically, just just looking at kind of the general distribution of revenues last year and short distance should still be a really good guide as to what we expect for this year in terms of pricing we continue to see.
Speaker Change: Benefits.
Speaker Change: We're above that $300 per seat pricing on average in the airport product here in the U S. Today.
William A. Heyburn: We're seeing the ability to take some price in some of our seasonal products here in the Northeast. We're also seeing the ability to pass through some expenses like credit card fees on the much more expensive charter products, which is something that we hadn't done in the past. So I think there's a bunch of different ways that we can benefit from those mature routes. And that's really our focus kind of doubling down on profitability in places where we have great scale, and we have customers that love the experience, love the brand, and love to come back.
Speaker Change: We're seeing the ability to take some price and some of our seasonal products here in the northeast.
Speaker Change: Also seeing the ability to pass through some expenses like credit card fees on the much more expensive charter products.
Speaker Change: It's something that we hadn't done in the past. So I think there is a bunch of different ways that we can benefit on those mature routes.
Speaker Change: And.
Speaker Change: And that's really our focus kind of doubling down on the profitability in places, where we have great scale and we have customers that love the experience left the brand and love to come back.
Bill Peterson: Okay, thanks. If I can speak one more time about this kind of housekeeping,
Speaker Change: Okay. Thanks, if I can sneak one more in just kind of housekeeping. So thanks for the guidance on the medical SG&A and I guess with pass through SG&A.
Speaker Change: To remain flat or to down medical SG&A growing how should we think about SG&A in aggregate through the course of the year, maybe trajectory wise and aggregate sort of kind of flattish to low single digits as a whole.
William A. Heyburn: So thanks for the guidance on the medical SG&A. And I guess with past SG&A, it seems to remain flat or to go down, and medical SG&A is growing. How should we think about SG&A in aggregate through the course of the year, maybe trajectory wise, and then in aggregate sort of kind of flattest to low single digits as a whole?
Speaker Change: <unk>.
Speaker Change: Yes, I would say overall and unallocated corporate expense, we guided flat to down you should see the same thing in passenger flat to down overall I think if you were to look we call. It our adjusted SG&A, which is just kind of all the SG&A items added together.
William A. Heyburn: Yeah, I mean, overall, in the unallocated corporate expense, we got it flat to down. You should see the same thing in passenger flat to down. Overall, I think if you were to look, you know, we call it our adjusted SG&A, which is just kind of all the SG&A items added together. Same thing there. You blend it together, and it's probably flat to down for the year.
Speaker Change: Same thing there you blend it together and it's probably flat to down for the year I mean every day, we're learning how to do more with less and that's just.
William A. Heyburn: I mean, every day we're learning how to do more with less. And that just, you know, as we get into new businesses, SG&A can sometimes start a little heavy to make sure that you have a good product. But every single day, you know, as we get more mature in a specific business and know and have a better knowledge of what we're doing, you know, it's just that, you know, kind of job one. And it's working so far.
Speaker Change: As we get into new businesses, the SG&A, sometimes going to start a little heavy to make sure that you have a good product, but every single day as we get more mature and a specific business I know and have a better knowledge of what we're doing.
Speaker Change: It's just that kind of job one and it's working so far.
Bill Peterson: Okay, thanks a lot, gentlemen, for sharing the insights.
Speaker Change: Okay. Thanks, a lot Joe.
Joe: For sure and the insights.
Speaker Change: Thank you.
Operator: Thank you, and I'm showing no further phone questions at this time.
Speaker Change: Okay.
Speaker Change: Thank you and I'm showing no further phone questions at this time.
Matt Schneider: Great. We will now take a few questions, investor questions from the Say Q&A platform. The first question is about the biggest challenges for the transition to eVTOLs from traditional aircraft. Rob, why don't you take that one? Okay.
Speaker Change: Great.
Speaker Change: We will now take a few questions investor questions from the say Q&A platform.
Speaker Change: The first question is about the biggest challenge is to transition to EV tools from traditional aircraft.
Speaker Change: Rob why don't you take that one.
Robert S. Wiesenthal: I think that the timelines for eVTOL manufacturers, or what we call EVA, or Electro-Vertical Aircraft, have consistently been delayed. I think that both Jobin and Archer have announced really strong programs in the Middle East, which I think will be a very good forum to show that these aircraft are actually viable. But that's where I would expect to see them, put a number out there in terms of the year, kind of a second half, 26.
Speaker Change: Okay.
Robert S. Wiesenthal: I think that the.
Robert S. Wiesenthal: Timelines for EV manufacturers, or we call EMEA electric vertical aircrafts.
Robert S. Wiesenthal: Have consistently been delayed.
Robert S. Wiesenthal: I think that.
Speaker Change: Both Toby and Archer have announced really strong programs.
Speaker Change: In the Middle East, which I think will be a very good forum to show that these aircraft are actually viable.
Speaker Change: But that's where I would expect to see them.
Speaker Change: First in the World and then kind of coming to the U S probably in the 26.
Speaker Change: Range may be called second half potentially 27.
Robert S. Wiesenthal: But again, they're closer to this than we are. And in terms of adoption, all these manufacturers, in order to be profitable, need to get to the automotive scale. They will need someone of our scale, which is, you know, we are the largest air transporter kind of people for, you know, for commuting or transportation and basically not counting tourism or B2B for, you know, oilfield services and such. So, we believe that they're going to be in a situation where they're going to want to sell to our operators. We are not going to be buying them.
Speaker Change: Bill.
Speaker Change: <unk>.
Speaker Change: Put a number out there in terms of year kind of second half 'twenty six but again they are closer to this than we are and in terms of adoption. All these manufacturers in order to be profitable and need to get to automotive scale. They will need someone of our scale, which is we are the largest air transporter.
Speaker Change: What kind of people for for commuting or transportation.
Speaker Change: Just basically not counting tourism or b to B for oilfield services and such so.
Speaker Change: We believe that theyre going to be in a situation, where theyre going to want to.
Speaker Change: Sell through our operators, we are not going to be buying them. They will be asset light and we're expecting them to offer very strong financing packages for our operators. So the transition I think will be fairly simple we already have deals in place with.
Robert S. Wiesenthal: They will be asset-based, and we're expecting them to offer very strong financing packages for our operators. So, the transition, I think, will be fairly simple.
Robert S. Wiesenthal: We already have deals in place with Beta. Beta, as you may know, also just announced their first successful public transition of their aircraft. We have deals in place with other manufacturers as well, and we expect that to continue. And so, one of the great opportunities that we have here is that not only do we have the entire ecosystem, kind of from passenger technology to the cockpit, but we also have all this captive infrastructure. We recently, you know, announced that we're going to be having terminals in Terminal 1, 2, and Nice behind the tarmac security to get people straight to their planes and bypassing airport security, the strength of our airport business here in New York, our leisure market. There's no one bigger that can accommodate these aircraft, and we have all the parts that they need in order to make sure that these things are flying, flying safely, and taking a lot of passes.
Speaker Change: Beta beta as you May know also just.
Speaker Change: Announced their first successful public transitioning of their aircrafts, we have deals in place with other manufacturers as well and we expect that to continue and so one of the great opportunities that we have here is that not only do we have the entire ecosystem kind of from.
William A. Heyburn: Passenger technology to the cockpit have all this captive infrastructure, we recently announced that we're going to have been having terminals in terminal one two and nice behind the tarmac security to get people straight to their planes and bypassing airport security the strength of our airport business.
Speaker Change: Here in New York, our leisure market.
Robert S. Wiesenthal: No one bigger that can accommodate these aircraft and we have all the parts that they need in order to make sure that these things are flying flying safely and taken a lot of passengers.
Matt Schneider: Great. The next question is on TOPS. Will, can you provide just an update on TOPS?
Robert S. Wiesenthal: Okay.
Robert S. Wiesenthal: Great.
Speaker Change: Next question is on tops will can you provide us just an update on tops.
William A. Heyburn: Yeah, overall, we're getting great customer feedback, and that's really our number one focus right now. We're not going to be providing a quarterly update on new customer acquisition, but we've got a great pipeline. We do expect to onboard several incremental new customers throughout the balance of the year. It's not going to be a huge contributor for the fiscal year 2024, as we've talked about previously, but we think it sets us up in a really advantageous position strategically, moving us up the value chain with organ transportation and enabling us to have an open door to expand into some of those other critical cargo markets and ground transportation markets for our customers like specimen transfers, eventually being So we really think it's an important plank of the strategy and we're happy with the results so far.
Speaker Change: Yes, overall, we're getting great customer feedback and Thats really our number one focus right now, we're not going to be providing quarter to quarter update on new customer acquisition, but we've got a great pipeline, we do expect to onboard several incremental new customers throughout the balance of the year.
William A. Heyburn: Thank you. The next question is about the strategic value of Nora, the medical competitor.
William A. Heyburn: It's not going to be a huge contributor for the fiscal year 2024, as we've talked about previously, but we think it sets us up in a really advantaged position strategically moving us up the value chain with Oregon transportation and enabling us to have an open door to expand in some of those other critical cargo markets and ground transportation.
William A. Heyburn: <unk> markets for our customers like specimen transfers.
William A. Heyburn: Eventually being able to help out with things like kidney. So we really think it's an important plank of the strategy and we're happy with the results so far.
Speaker Change: Thank you. The next question is about the strategic value in Euro the medical competitor.
William A. Heyburn: Sure. You know, we think it's a fantastic business. We're always evaluating all growth opportunities, both organic and inorganic. Nor has built a great company.
William A. Heyburn: Can you address that.
Speaker Change: Sure. We think it's a it's a fantastic business, we're always evaluating all growth opportunities both organic and inorganic.
Speaker Change: Nor has built a great company, we are particularly impressed with their ground business. It has inspired us to offer some of those same services to the customers that we have across the country and we think we're already seeing the benefits of that in this particular case. It seems like it went for a great multiple and we've determined that our best path forward for growth.
Robert S. Wiesenthal: We're particularly impressed with their ground business. It's inspired us to offer some of those same services to the customers that we have across the country, and we think we're already seeing the benefits of that. And this particular case seems like it went for a great multiple.
Robert S. Wiesenthal: And, you know, we've determined that our best path forward for growth was to continue the organic strategy. But it's a great business, and we're impressed by what they've built. And I think it's a good company. I think, let me just go a little deeper on that, just to make it clear to the people on the call. Nor was sold, I guess, about how long ago? I think probably in the past year. We were always thinking about build versus buy, and frankly, I think this was one where we felt more comfortable continuing to build our business, which turned out to be a good outcome for us, especially looking at our recent performance. And frankly, after passing on this opportunity, when it was sold to private equity for kind of 14 to 15 times forward multiples, which is what I believe That makes me feel very comfortable with the kind of value we've created on our own medical side.
Robert S. Wiesenthal: Was to continue the organic strategy, but it's a great Britain and were impressed by what they built and I think it's a good company I think let me just go a little deeper on that just to make it clear to the people on the call nor it was sold I guess about.
Robert S. Wiesenthal: How long ago.
Robert S. Wiesenthal: I think probably it probably in that I think in the past year.
Robert S. Wiesenthal: It is something that we did evaluate and we're always thinking about build versus buy.
Robert S. Wiesenthal: And frankly I think this is one where we felt more comfortable continuing to build this are.
Robert S. Wiesenthal: <unk> business, which turned out to be good.
Robert S. Wiesenthal: Good.
Robert S. Wiesenthal: Good outcome for us if you take especially looking at our recent.
Robert S. Wiesenthal: Our recent performance and frankly when.
Robert S. Wiesenthal: After passing on this opportunity when it sell it to private equity for kind of 14% to 15 times forward multiples, which is what I believe it sells for that's obviously not something that is not confirmed.
Robert S. Wiesenthal: That makes me feel very comfortable with the kind of value we've created our own medical side.
Robert S. Wiesenthal: Great. Well, that was the last question we're going to take from the platform. Rob, do you have any closing remarks?
Speaker Change: Great well that was the last question, we're going to take from the platform.
Robert S. Wiesenthal: I just want to thank everybody on the Blade team for really putting together a terrific quarter. Obviously, the performance on the medical side speaks for itself. This is historically a slow quarter for passenger, and I think we're really in strong shape on passenger as we come into the high season here, and we look forward to answering any questions. You can obviously email us at investors at blade.com if you have any further questions, and we look forward to working with you guys in the future and continuing to perform. Thanks for your time.
Robert S. Wiesenthal: Rob do you have any closing remarks, just want to thank everybody.
Robert S. Wiesenthal: On the blade team for really putting together a terrific building towards a terrific quarter obviously.
Robert S. Wiesenthal: The performance on the medical side speaks for itself. This is historically a slow quarter for passenger and I think we're really in strong shape on passenger as we come into the.
Robert S. Wiesenthal: The high season here and we look forward to answering any questions you can obviously E mail us at.
Robert S. Wiesenthal: Investors Appalachia comments has any further questions and we look forward to.
Robert S. Wiesenthal: Working with you guys in the future and continuing to perform thanks for your time.
Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.
Speaker Change: This concludes today's conference call. Thank you for participating and you may now disconnect.
Operator: Okay.
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Operator: Yeah.