Q2 2024 Blade Air Mobility Inc Earnings Call

August 7, 2024

Operator: Good afternoon, ladies and gentlemen, and welcome to the Blade Air Mobility Fiscal Second Quarter 2024 Earnings Relief Conference. As a reminder, this call is being recorded. I would like to turn the conference call over to Mat Schneider, Vice President of Investor Relations and Strategic Finance. Matthew, you may now begin.

Operator: Good afternoon, ladies and gentlemen, and welcome to Blade Air Mobility fiscal 2nd quarter 2024 earnings release conference call. At this time, all participants earn a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. Anyone who should require operator assistance, please press star, then zero key on your touch telephone.

Operator: Good afternoon, ladies and gentlemen, and welcome to the Blade Air Mobility Fiscal Second Quarter 2024 Earnings Release Conference. 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. If anyone should require operator assistance, please press the star, then the zero key on your touch telephone. As a reminder, this call is being recorded. I would like to turn the conference call over to Mat Schneider, Vice President of Investor Relations and Strategic Finance. Mathew, you may now begin.

Speaker Change: Good afternoon, ladies and gentlemen, and welcome to the Blade Air Mobility Fiscal Second Quarter 2024 Earnings Relief Conference Call.

Speaker Change: 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. If anyone should require operator assistance, please press star, then zero key on your touch telephone.

Operator: As a reminder, this call is being recorded. I would like to turn the conference call over to Mat Schneider, Vice President of Investor Relations and Strategic Finance.

Speaker Change: As a reminder, this call is being recorded. I would like to turn the conference call over to Mat Schneider, Vice President of Investor Relations and Strategic Finance. Matthew, you may now begin.

Mathew Schneider: Mathew, you may now begin. Thank you for standing by, and welcome to the Blade Air Mobility conference call and webcast for the quarter ended June 30th, 2024. We appreciate everyone joining us today.

Mat Schneider: Thank you for standing by, and welcome to the Blade Air Mobility conference call and webcast for the quarter ended June 30th, 2024. We appreciate everyone joining us today.

Speaker Change: Thank you for standing by and welcome to the Blade Air Mobility conference call and webcast for the quarter-ended June 30th.

Mat Schneider: Before we get started, I would like to remind you of the company's forward-looking statements in 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 statements.

Mathew Schneider: Before we get started, I would like to remind you of the company's forward-looking statement in 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 statements. 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.

Speaker Change: 2024. We appreciate everyone joining us today. Before we get started, I would like to remind you of the company's forward-looking statement in Safe Harbor language.

Mat 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. 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.

Speaker Change: Statements made in this conference call that are not historical facts.

Speaker Change: including statements about future time periods may be deemed to constitute forward-looking statements.

Speaker Change: but then 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 statements.

Mat 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 this conference call are only made as of the date of this call. 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. During today's call, we will also discuss certain non-GAAP financial measures, which we believe may be useful in evaluating our financial performance.

Speaker Change: 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.

Mathew Schneider: Any forward-looking statements provided during this conference call are only made as of the date of this call. As stated in our SEC filings, Blade this claims any intended obligation to update or revise these forward-looking statements, except as required by law.

Blade: Any forward-looking statements provided during this conference call are only made as of the date of this call. 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.

Mathew 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. 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 presentations. Our press release, investor presentation, and our Form 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 a substitute for financial results prepared in accordance with GAAP.

Blade: During today's call, we will also discuss certain non-GAAP financial measures.

Mat Schneider: Our 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

Blade: which we believe may be useful in evaluating our financial performance. 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 investor presentation.

Blade: Our press release, investor presentation, and our Form 10-Q and 10-K filings

Speaker Change: 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 a substitute for financial results prepared in accordance with GAAP.

Mat Schneider: Hosting today's call are Rob Wiesenthal, Founder and Chief Executive Officer of Blade, and Will Heyburn, Chief Financial Officer. I will now turn the call over to Rob.

Mathew Schneider: Hosting today's call are Rob Wiesenthal, Founder, Chief Executive Officer of Blade, and Will Haver, Chief Financial Officer.

Blade: Hosting today's call are Rob Wiesenthal, Founder and Chief Executive Officer of Blade, and Will Heyburn, Chief Financial Officer.

Rob Wiesenthal: I will now turn the call over to Rob.

Rob Wiesenthal: Thank you, Matt. In good afternoon, everyone. Let me make myself clear. We had a great quarter. Our strong Q2 2024 results mark Lay's first positive-adjusted EBITDA second quarter as a public company, with both our medical and passenger segments enjoying strong performance and contributing positive-segment-adjusted EBITDA on the quarter. And as a guidepost for those listening, we have beaten every key metric of our cell side investment banking consensus estimates of the five banks that cover us. In Q2 2024, revenue increased 11.4% in year-over-year, flight profit increased 57.7% in year-over-year, and adjusted EBITDA, a positive 1 million, improved by 5.4 million versus negative 4.4 million in the prior year period.

Rob Wiesenthal: Thank you, Matt, and good afternoon, everyone. Let me make myself clear.

Speaker Change: I will now turn the call over to Rob.

Rob Wiesenthal: We had a great quarter. Our strong Q2 2024 results marked Blade's first positive adjusted EBITDA in the second quarter as a public company, with both our medical and passenger segments enjoying strong performance and contributing positive segment adjusted EBITDA in the quarter. And as a guidepost for those listening, we have beaten every key metric of our sell-side investment banking consensus estimates of the five banks that cover us. In Q2 2024, revenue increased 11.4% year-over-year, flight profit increased 57.7% year-over-year, and adjusted EBITDA of positive $1 million improved by $5.4 million versus negative $4.4 million in the prior year period.

Rob Wiesenthal: Thank you, Matt, and good afternoon, everyone. Let me make myself clear. We had a great quarter. Our strong Q2 2024 results marked Belait's first positive adjusted EBITDA second quarter as a public company, with both our medical and passenger segments enjoying strong performance and contributing positive segment adjusted EBITDA in the quarter. And as a guidepost for those listening, we have beaten every key metric of our sell-side investment banking consensus estimates of the five banks that cover us. In Q2 2024, revenue increased 11.4% year-over-year, flight profit increased 57.7% year-over-year, and adjusted EBITDA of positive $1 million improved by 5.4%.

Rob Wiesenthal: I will now review our key business, operational, and strategic highlights, starting with Medical. Medical achieved a record high revenue of $38.3 million in the quarter, up 6.4% sequentially versus Q1 2024 and up 11.5% versus the prior year period, excluding the impact of our non-recurring support of a large hospital in the prior year period. Medical revenue increased 19% year-over-year. Medical segment adjusted EBITDA increased by 82.7% to $5.5 million in Q2 2024 versus the prior year period, with margins expanding over 550 basis points year-over-year, also a record for the company. We closed on seven of the eight previously announced and committed jet aircraft acquisitions this quarter.

Rob Wiesenthal: I will now review our key business operational and strategic highlights, starting with medical. Medical achieved record high revenue of 38.3 million in the quarter, up 6.4% sequentially versus Q1 2024, and up 11.5% versus the prior year period, excluding the impact of non-recurring support of a large hospital in the prior year period. Medical revenue increased 19% year-over-year. Medical segment adjusted EBITDA increased by 82.7% to 5.5 million in Q2 2024 versus the prior year period, with margins expanding over 550 basis points year-over-year, also a record for the company. We close on seven of the eight previously announced and committed jet aircraft acquisitions this quarter.

Rob Wiesenthal: Thank you.

Rob Wiesenthal: I will now review our key business, operational, and strategic highlights.

Rob Wiesenthal: starting with medical.

Rob Wiesenthal: Medical achieved record high revenue of $38.3 million in the quarter, up 6.4% sequentially versus Q1 2024, and up 11.5% versus the prior year period. Excluding the impact of our non-recurring support of a large hospital in the prior year period, medical revenue increased 19% year-over-year. Medical segment adjusted EBITDA increased by 82.7% of $5.5 million in Q2 2024 versus the prior year period, with margins expanding over 550 basis points year-over-year, also a record for the company. We closed on seven of the eight previously announced and committed jet aircraft acquisitions this quarter. While it's still early days, we're encouraging

Rob Wiesenthal: While it's still early days, we're encouraged by both the value the aircraft provides for our customers and the initial financial performance of the fleet. While we continue to believe that the vast majority of our flying will remain with third-party owned and operated aircraft as part of our layered asset life approach, we believe there is an opportunity to expand our fleet of owned aircraft given both the customer benefits and strong returns that we're seeing. In simple terms, these aircraft are already delivering 30% plus returns on domestic capital. We expect to close on the eight aircraft during Q3 2024.

Rob Wiesenthal: While it's still early days, we're encouraged by both the value these aircraft provide to our customers and the initial financial performance of the fleet. While we continue to believe that the vast majority of our flying will remain with third-party owned and operated aircraft as part of our layered asset life approach, we believe there is an opportunity to expand our fleet of owned aircraft, given both the customer benefits and strong returns that we're seeing. In simple terms, these aircraft are already delivering 30% plus returns on invested capital. We expect to close on the eighth aircraft during Q3 2024.

Rob Wiesenthal: We are encouraged by both the value these aircraft provide to our customers and the initial financial performance of the fleet. While we continue to believe that the vast majority of our flying will remain with third-party owned and operated aircraft as part of our layered asset life approach, we believe there is an opportunity to expand our fleet of owned aircraft given both the customer benefits and strong returns that we're seeing.

Rob Wiesenthal: In simple terms, these aircraft are already delivering.

Rob Wiesenthal: 30% plus returns on invested capital. We expect to close on the eighth aircraft during Q3 2024. We made additional progress expanding our medical ground logistics business and recently opened two new ground hubs bringing our total to eight.

Rob Wiesenthal: We made additional progress expanding our medical ground logistics business and recently opened two new ground hubs, bringing our total to eight. Medical ground revenue increased more than 50% year-over-year during the quarter and represented 12% of medical revenue in the quarter. Will is going to provide more details on the financial performance and returns of our own aircraft and ground vehicles. Moving to passenger revenue, revenue grew 11.3% versus the 2023 period, despite our discontinuation of the Blade One seasonal jet service this year.

Will Heyburn: Medical ground revenue increased more than 50% year-over-year during the quarter and represented 12% of medical revenue in the quarter. Will is going to provide more details on the financial performance and returns of our own aircraft and ground vehicles. Moving to passenger, revenue grew 11.3% versus the 2023 period, despite our discontinuation of the Blade I seasonal jet service this year. We saw strong growth in our New York airport transfer business, benefiting from increased average checkup prices, which averaged approximately $325 per seat during the quarter. We also saw strong growth in the airport charter. Additionally, we were pleased to see the number of airport passes outstanding, up more than 30% year-over-year. Airport passes renew annually.

Rob Wiesenthal: Will is going to provide more details on the financial performance and returns of our own aircraft and ground vehicles. Moving to passenger revenue grew 11.3% versus the 2023 period, despite our discontinuation of the Blade One seasonal jet service this year. We saw strong growth in our New York airport transfer business, benefiting from increased average check-up prices, which average approximately $325 per seat during the quarter. We also saw strong growth in the airport charter. Additionally, we were pleased to see the number of airport passes outstanding up more than 30% year-over-year. Airport passes renew annually and are typically held by our most active and loyal flyers by purchasing a pass.

Rob Wiesenthal: We saw strong growth in our New York airport transfer business, benefiting from increased average checkup prices, which averaged approximately $325 per seat during the quarter. We also saw strong growth in airport charter. Additionally, we were pleased to see the number of airport passes outstanding, up more than 30% year-over-year. Airport passes renew annually and are typically held by our most active and loyal flyers.

Rob Wiesenthal: By purchasing a pass, customers are signaling that they expect to fly more than eight times per year. The significant improvement in the passenger segment adjusted EBITDA this quarter and year-to-date, along with the decisive actions we're taking to drive further profitability improvements that we'll discuss shortly, underscore our commitment to achieving positive trailing 12-month passenger segment adjusted EBITDA in 2025 or earlier. In Q2, passenger segment flight profit increased 57.6% year-over-year, and passenger segment adjusted EBITDA increased to a positive $0.8 million versus a loss of $2.1 million in the year-ago period.

Rob Wiesenthal: Customers are signaling that they expect to fly more than eight times per year. The significant improvement in the passenger segment adjusted EBITDA this quarter and year-to-date, along with the decisive actions we're taking to drive further profitability improvements that we'll discuss shortly. Underscore commitment to achieving positive trailing 12 months passenger segment adjusted EBITDA in 2025 or earlier. In Q2, passenger segment flight profit increased 57.6% year-over-year, and passenger segment adjusted EBITDA increased to a positive 0.8 million versus a loss of 2.1 million in the year-go period.

Will Heyburn: and are typically held by our most active and loyal flyers. By purchasing a pass, customers are signaling that they expect to fly more than eight times per year. The significant improvement in the passenger segment adjusted EBITDA this quarter and year to date, along with the decisive actions we're taking to drive further profitability improvements that we'll discuss shortly, underscore our commitment to achieving positive trailing 12 months passenger segment adjusted EBITDA in 2025 or earlier. In Q2, passenger segment flight profit increased 57.6% year over year and passenger segment adjusted EBITDA increased to a positive 0.8 million versus a loss of 2.1 million in the year ago period. This quarter, we restructure a Canadian operation.

Rob Wiesenthal: This quarter we restructured our Canadian operations to eliminate further losses and lay the groundwork for our ultimate exit from the Canadian market. This will happen in the next year and could be completed as early as this month. We simply did not see a near-term path to profitability using conventional road aircraft. Opportunity for Electric Vertical Aircraft in Western Canada, and have structured our exit to maintain multiple paths to relaunch Canadian operations when the business can take economic advantage of the shift from conventional road of craft to electric vertical aircraft. Similar toward decision to discontinue the Blade One seasonal by the seat service between near and south Florida, we're making the prudent choice to exit an unprofitable business line and to focus our resources on the core roots in our passenger segment with limited or no competition and pricing last capacity, enabling a path to sustainable profitability.

Rob Wiesenthal: This quarter, we restructured our Canadian operations to eliminate further losses and lay the groundwork for our ultimate exit from the Canadian market. This will happen within the next year and could be completed as early as this month.

Will Heyburn: to eliminate further losses and lay the groundwork for our ultimate exit in the Canadian market. This will happen within the next year and could be completed as early as this month. We simply did not see a near-term path to profitability using conventional rotorcraft. We remain enthusiastic about the long-term opportunity for electric vertical aircraft in Western Canada and have structured our exit to maintain multiple paths to relaunch Canadian operations when the business can take economic advantage of the shift from conventional rotorcraft to electric vertical aircraft. Similar to our decision to discontinue the BladeOne seasonal buy-to-seat service between New York and South Florida, we're making the prudent choice to exit an unprofitable business line and to focus our resources on the core routes in our passenger segment with limited or no competition.

Rob Wiesenthal: We simply did not see a near-term path to profitability using conventional rotorcraft. However, we remain enthusiastic about the long-term opportunity for electric vertical aircraft in Western Canada and have structured our exit to maintain multiple paths to relaunch Canadian operations when the business can take economic advantage of the shift from conventional rotorcraft to electric vertical aircraft. Similar to our decision to discontinue the BladeOne seasonal buy-the-seat service between New York and South Florida, we're making the prudent choice to exit an unprofitable business line and to focus our resources on the core roots of our passenger segment with limited or no competition and pricing elasticity, enabling a path to sustainable profitability. In Europe, we're encouraged by the early results of the steps we've taken to streamline our commercial organization and cost structure. Europe resumed year-over-year revenue growth during the quarter.

Rob Wiesenthal: In Europe, we're encouraged by the early results of the steps we've taken to streamline our commercial organization and cost structure. Europe resumes, Europe a year revenue growth during the quarter. We look forward to providing regular updates on our progress here.

Speaker Change: In Europe , we're encouraged by the early results of the steps we've taken to streamline our commercial organization and cost structure. Europe resumed year-over-year revenue growth during the quarter. We look forward to providing regular updates on our progress here. Back in March, our board authorized a $20 million share repurchase program, and we executed our first share repurchase under the authorization this quarter, eliminating approximately 80,000 shares. In addition, we changed our restricted stock unit tax withholding method to withhold-to-cover from sell-to-cover during the quarter, deploying approximately $1 million of balance sheet cash to retire an additional 332,212 shares at approximately $1 million.

Rob Wiesenthal: We look forward to providing regular updates on our progress here. Back in March, our board authorized a $20 million share repurchase program, and we executed our first share repurchase under the authorization this quarter, eliminating approximately 80,000 shares. In addition, we changed our restricted stock unit tax withholding method to withhold to cover from sell to cover during the quarter, deploying approximately $1 million of balance sheet cash to retire an additional 332,212 shares at approximately $2.94 a share. We will continue to evaluate the optimal RSU tax withholding method in future periods.

Rob Wiesenthal: Back in March, our board authorized a $20 million share repurchase program, and we executed our first share repurchase under the authorization of this quarter, eliminating approximately 80,000 shares. In addition, we changed our restricted stock unit tax withholding method to withholds cover from self-cover during the quarter, deploying approximately $1 million of balance sheet cash to retire an additional $332,212 shares at approximately $2.94 a share. We will continue to evaluate the optimal RSU tax withholding method in future periods. We're focused on maintaining a strong balance sheet, and our capital allocation priorities are focused on low risk, high return investments and medical aircraft and ground vehicles.

Will Heyburn: We will continue to evaluate the optimal RSU tax withholding method in future periods. We're focused on maintaining a strong balance sheet and our capital allocation priorities are focused on low-risk, high-return investments in medical aircraft and ground vehicles, as well as bolt-on acquisitions in medical that enhance our competitive position or enable the expansion into other time-critical logistics verticals. It is imperative to us that we are convinced these investments are accretive on day one. We will continue to weigh these priorities relative to further opportunistic share repurchases as well. With that, I'll turn it over to Will. Thank you, Rob. I'll now walk through the financial highlights from the quarter, starting with medical. Medical segment revenue rose 11.5% year-over-year in the past year.

Rob Wiesenthal: We're focused on maintaining a strong balance sheet, and our capital allocation priorities are focused on low-risk, high-return investments in medical aircraft and ground vehicles, as well as bolt-on acquisitions in medical that enhance our competitive position or enable the expansion into other time-critical logistics verticals. It is imperative to us that we are convinced these investments are accretive on day one. We will continue to weigh these priorities relative to further opportunistic share repurchases as well. With that, I'll turn it over to Will.

Rob Wiesenthal: As well as bolt-on acquisitions in medical that enhance our competitive position or enable the expansion into other time-critical logistics verticals. It is imperative to us that we are convinced these investments are accrued on day one. We will continue to weigh these priorities relative to further opportunistic share repurchases as well with that alternative or to will.

Will Haver: Thank you, Rob. I'll now walk through the financial highlights from the quarter, starting with medical. Medical segment revenue rose 11.5% year over year in the first quarter to $38.3 million and rose 6.4% sequential labor versus Q1 2024.

Will Heyburn: Thank you, Rob. I'll now walk through the financial highlights from the quarter, starting with medical. Medical segment revenue rose 11.5% year-over-year in the first quarter to $38.3 million. As discussed on prior calls, we provided temporary support to a large hospital customer last year, which generated $2.2 million of revenue in Q2 2023. Excluding the impact of this temporary customer, medical revenue would have increased 19% year-over-year.

Will Heyburn: first quarter to $38.3 million and rose 6.4% sequentially versus Q1 2024. As discussed on prior calls, we provided temporary support to a large hospital customer last year, which generated $2.2 million of revenue in Q2 2023.

Will Haver: As discussed on prior calls, we provided temporary support to a large hospital customer last year, which generated 2.2 million of revenue in Q2 2023. Excluding the impact of the temporary customer, medical revenue would have increased 19% year over year. Medical continued to see improvement and profitability as segment adjusted EBITDA rose 82.7% year over year to 5.5 million in Q2 2024. Medical flight margin increased 700 basis points year over year to 23.6% versus 16.6% in the year-ago period and increased 130 basis points sequentially versus 22.3% in Q1 2024. This margin expansion was driven primarily by our aircraft acquisitions, growth in our ground logistics business, and an increase in average revenue per trip.

Will Heyburn: Excluding the impact of this temporary customer, medical revenue would have increased 19% year-over-year. Medical continued to see improvement and profitability as segment adjusted EBITDA rose 82.7% year-over-year to 5.5 million in Q2 2024.

Will Heyburn: Medical continued to see improvement and profitability as segment adjusted EBITDA rose 82.7% year-over-year to $5.5 million in Q2 2024. The medical flight margin increased 700 basis points year-over-year to 23.6% versus 16.6% in the year-ago period and increased 130 basis points sequentially versus 22.3% in Q1 2024. This margin expansion was driven primarily by our aircraft acquisitions, growth in our ground logistics business, and an increase in average revenue per trip. Our medical customer value proposition has never been stronger, and we're committed to further enhancing our offering by investing in our own dedicated aircraft fleet, expanding our ground logistics business, and scaling our organ placement service offering.

Will Heyburn: Medical flight margin increased 700 basis points year-over-year to 23.6% vs. 16.6% in the year-ago period and increased 130 basis points sequentially vs. 22.3% in Q1 2024. This margin expansion was driven primarily by our aircraft acquisitions, growth in our ground logistics business.

Will Haver: Our medical customer value proposition has never been stronger, and we're committed to further enhancing our offering by investing in our own dedicated aircraft fleet, expanding our ground logistics business, and scaling our organ placement service offering. Now we have several months of ownership under our belt. We've updated our aircraft profitability and return models with real world data, and we're happy with the performance we're seeing. The results provide strong support for increased aircraft ownership in areas of high medical customer density. Compared with non-dedicated third-party aircraft, we are targeting a 10-to-20 percentage point flight profit margin increase, meaning that 10-to-20 additional percentage points of revenue will drop down to the bottom line net of depreciation when utilizing our own aircraft.

Will Heyburn: and an increase in average revenue per trip.

Will Heyburn: Our medical customer value proposition has never been stronger, and we're committed to further enhancing our offering by investing in our own dedicated aircraft fleet, expanding our ground logistics business, and scaling our organ placement service offering. Now that we have several months of ownership under our belt, we've updated our aircraft profitability and return models with real-world data, and we're happy with the performance we're seeing. The results provide strong support for increased aircraft ownership in areas of high medical customer density. Compared with non-dedicated third-party aircraft, we are targeting a 10 to 20 percentage point flight profit margin increase.

Will Heyburn: Now that we have several months of ownership under our belts, we've updated our aircraft profitability and return models with real-world data, and we're happy with the performance we're seeing. The results provide strong support for increased aircraft ownership in areas of high medical customer density. Compared with non-dedicated third-party aircraft, we are targeting a 10 to 20 percentage point flight profit margin increase, meaning that 10 to 20 additional percentage points of revenue will drop down to the bottom line net of depreciation when utilizing our owned aircraft. This represents a 30% plus return on invested capital and an average payback period of approximately three years.

Will Heyburn: meaning that 10 to 20 additional percentage points of revenue will drop down to the bottom line net of depreciation when utilizing our owned aircraft. This represents a 30% plus return on invested capital and an average payback period of approximately three years. Note that this analysis only considers the incremental profit relative to non-dedicated third-party aircraft.

Will Haver: This represents a 30% plus return on indebt to capital, and an average payback period of approximately three years. Note that this analysis only considers the incremental profit relative to non-dedicated third-party aircraft. The profitability and return profile would be substantially higher if one were to consider 100% of the profit generated by customers using the aircraft. We also analyze the return on investment in ground vehicles. We currently operate a fleet of over 30 ground vehicles across eight hubs, and we're seeing a payback period of less than one year, creating a great opportunity for continued investment in this area with excellent returns.

Will Heyburn: Note that this analysis only considers the incremental profit relative to non-dedicated third-party aircraft. The profitability and return profile would be substantially higher if one were to consider 100% of the profit generated by customers using the air. We also analyzed the return on investment in ground vehicles.

Will Heyburn: The profitability and return profile would be substantially higher if one were to consider 100% of the profit generated by customers using the aircraft.

Will Heyburn: We currently operate a fleet of over 30 ground vehicles across eight hubs, and we're seeing a payback period of less than one year, creating a great opportunity for continued investment in this area with excellent returns. In summary, the aircraft and vehicle investments we're making in our medical segment represent an attractive risk-adjusted return profile, and future investments in these areas are high on our capital allocation priority list. Looking at the transplant industry broadly, fundamentals remain strong with United States heart, liver, and lung organ transplant volume growth persisting in the high single-digit range during Q2 2024. In short, we're very happy with the growth in the industry and our positioning within it. We're honored to play our small role in helping more Americans than ever receive the organs that they need.

Will Heyburn: We also analyzed the return on investment in ground vehicles. We currently operate a fleet of over 30 ground vehicles across 8 hubs, and we're seeing a payback period of less than one year, creating a great opportunity for continued investment in this area with excellent returns.

Will Haver: In summary, the aircraft and vehicle investments we're making in our medical segment represent an attractive risk of gestive return profile, and future investments in these areas are high on our capital allocation priority list. Looking at the transplant industry broadly, fundamentals remain strong, with United States heart, liver, and lung organ transplant volume growth persisting in the high single digital range during Q2-2020-24. In short, we're very happy with the growth in the industry and our positioning within it. We're honored to play our small role in helping more Americans than ever receive the organs that they need. Turning to our passenger business, short distance revenue increased 9% year-over-year, driven primarily by approximately 20% growth in airport and mid-teens growth in Europe.

Will Heyburn: In summary, the aircraft and vehicle investments we're making in our medical segment represent an attractive risk-adjusted return profile, and future investments in these areas are high on our capital allocation priority list. Looking at the transplant industry broadly, the fundamentals remain strong, with United States heart, liver, and lung organ transplant volume growth persisting in the high single-digit range during Q2 2024. In short, we're very happy with the growth in the industry and our positioning within it. We're honored to play our small role in helping more Americans than ever receive the organs that they need. Turning to our passenger business, short-distance revenue increased 9% year-over-year, driven primarily by approximately 20% growth in airport and mid-teens growth in Europe .

Will Heyburn: Turning to our passenger business, short-distance revenue increased 9% year-over-year, driven primarily by approximately 20% growth in airport revenue and mid-teens growth in Europe. In jet and other, revenues increased 17.4% year-over-year, driven primarily by strength in jet charter and other non-flight revenue, partially offset by our discontinuation of the Blade One seasonal jet service. Our focus on profitability improvements in passenger continues to bear fruit, with the flight profit margin expanding more than 700 basis points year over year, and segment-adjusted EBITDA improving 2.9 million year over year to a positive 0.8 million.

Will Haver: And yet another, revenue increased 17.4% year-over-year, driven primarily by spring to jet charter and other non-flight revenue, partially offset by a discontinuation of the played one seasonal jet service. Our focus on profitability improvements in passenger continues to bear fruit, with flight profit margin expanding more than 700 basis points year-over-year, and segment adjusted EBITDA improving 2.9 million year-over-year to positive 0.8 million. The profitability improvement in passenger was driven by several factors, including pricing and efficiencies in our New York airport transfer product, growth in Europe, and improvements in jet charter.

Will Heyburn: And yet another, revenues increased 17.4% year-over-year, driven primarily by strength of jet charter and other non-flight revenue, partially offset by our discontinuation of the Blade I seasonal jet service.

Rob Wiesenthal: Our focus on profitability improvements in passenger continues to bear fruit, with flight profit margin expanding more than 700 basis points year over year, and segment-adjusted EBITDA improving 2.9 million year over year to positive 0.8 million. The profitability improvement in passenger was driven by several factors, including pricing and efficiencies in our New York airport transfer product, growth in Europe, and improvements in jet charter. As Rob mentioned earlier, we made the decision to exit the Canadian market, which had been consistently unprofitable for us.

Will Heyburn: Our focus on profitability improvements in passenger continues to bear fruit, with flight profit margin expanding more than 700 basis points year-over-year, and segment-adjusted EBITDA improving 2.9 million year-over-year to positive 0.8 million.

Will Heyburn: The profitability improvement in passenger traffic was driven by several factors, including pricing and efficiencies in our New York airport transfer product, growth in Europe, and improvements in jet charter. As Rob mentioned earlier, we made the decision to exit the Canadian market, which had been consistently unprofitable for us.

Will Heyburn: The profitability improvement in passenger was driven by several factors including pricing and efficiencies in our New York Airport transfer products, growth in Europe , and improvements in jet charter. As Rob mentioned earlier, we made the decision to exit the Canadian market, which had been consistently unprofitable for us.

Will Haver: As Rob mentioned earlier, we made the decision to exit the Canadian market, which had been consistently unprofitable for us. We expect to finalize our exit as early as this month, but have already completed a restructuring that will ensure we do not incur additional losses this year. Given this decision, we are writing off the remaining and tangible assets held on the balance sheet related to Canada, a 5.8 million. Finally, we continued our focus on scrolling overhead costs, with adjusted, unallocated corporate expenses shrinking about a percentage point year-over-year this quarter. On the cash flow front, the difference between our adjusted EBITDA 1 million and cash from operations of 8.4 million in the quarter was primarily driven by the structure of our aircraft purchases, which were all acquired from owners and operators with whom we had pre-existing capacity purchase agreements.

Will Heyburn: We expect to finalize our exit as early as this month but have already completed a restructuring that will ensure we do not incur additional losses this year. Given this decision, we are writing off the remaining intangible assets held on the balance sheet related to Canada for 5.8 million. Finally, we continued our focus on controlling overhead costs, with adjusted unallocated corporate expenses shrinking about a percentage point year over year this quarter. On the cash flow front, the difference between our adjusted EBITDA of 1 million and cash from operations of 8.4 million in the quarter was primarily driven by the structure of our aircraft purchases, which were all acquired from owners and operators with whom we had pre-existing capacity purchase agreements.

Rob Wiesenthal: We expect to finalize our exit as early as this month, but have already completed a restructuring that will ensure we do not incur additional losses this year.

Speaker Change: Given this decision, we are writing off the remaining intangible assets held on the balance sheet related to Canada of $5.8 million. Finally, we've continued our focus on controlling overhead costs, with adjusted unallocated corporate expenses shrinking about a percentage point year-over-year this quarter. On the cash flow front, the difference between our adjusted EBITDA of $1 million and cash from operations of $8.4 million in the quarter was primarily driven by the structure of our aircraft purchases, which were all acquired from owners and operators with whom we had pre-existing capacity purchase agreements. As a part of those capacity purchase agreements, we made deposits, $9.3 million of which we applied towards the purchase of seven aircraft in the quarter.

Will Heyburn: On the cash flow front, the difference between our adjusted EBITDA of 1 million and cash from operations of 8.4 million in the quarter was primarily driven by the structure of our aircraft purchases, which were all acquired from owners and operators with whom we had pre-existing capacity purchase agreements. As a part of those capacity purchase agreements, we made deposits, 9.3 million of which we applied towards the purchase of seven aircraft in the quarter. The deposits had been booked as prepaid expenses, and thus they were a source of cash in Q2 as we unloaned the pre-existing agreements and purchased seven of the aircraft outright.

Will Haver: As a part of those capacity purchase agreements, we made deposits, 9.3 million of which we applied towards the purchase of seven aircraft in the quarter. The deposits had been booked in prepaid expenses; thus, they were a source of cash, and Q2, as we unlawned the pre-existing agreements and purchased seven of the aircraft outright. Excluding aircraft acquisitions in Q2 2024, cash of operations would have been a use of less than 1 million, with the delta versus the adjusted EBITDA being driven primarily by working capital related to medicine. and Michael Grove. Our capital expenditures, which includes the capitalized software development costs, were 16.9 million in the quarter, were driven primarily by 14.6 million and total payments towards the first seven aircraft acquisitions.

Will Heyburn: As a part of those capacity purchase agreements, we made deposits, 9.3 million of which we applied towards the purchase of seven aircraft in the quarter. The deposits had been booked as prepaid expenses, and thus they were a source of cash in Q2 as we unloaned the pre-existing agreements and purchased seven of the aircraft outright. Excluding aircraft acquisitions in Q2 2024, cash of operations would have been a use of less than 1 million, with the delta versus adjusted EBITDA being driven primarily by working capital related to medical growth.

Will Heyburn: The deposits had been booked in prepaid expenses, thus they were a source of cash in Q2 as we unlounged the pre-existing agreements and purchased 7 of the aircraft outright. Excluding aircraft acquisitions in Q2 2024, cash of operations would have been a use of less than $1 million, with the Delta vs. adjusted EBITDA being driven primarily by working capital related to medical growth.

Rob Wiesenthal: Excluding aircraft acquisitions in Q2 2024, cash of operations would have been a use of less than 1 million, with the delta versus adjusted EBITDA being driven primarily by working capital related to medical growth. Looking ahead into the balance of the year, Q3 is off to a great start with solid growth in our seasonal short-distance businesses, while medical remains strong. As such, we are reiterating our 2024 and 2025 financial guidance, and we believe our first half 2024 results put us on a very solid footing to achieve these targets.

Will Heyburn: Our capital expenditures, which inclusive of capitalized software development costs, were $16.9 million in the quarter. These were driven primarily by $14.6 million in total payments towards the first seven aircraft acquisitions, $9.3 million applied from our deposits, a $5.5 million cash payment, and a small non-cash adjustment.

Will Heyburn: Our capital expenditures, which, inclusive of capitalized software development costs, were $16.9 million in the quarter, were driven primarily by $14.6 million in total payments towards the first seven aircraft acquisitions, $9.3 million applied from our deposits, a $5.5 million cash payment, and a small non-cash adjustment.

Will Haver: 9.3 million applied from our deposits, a 5.5 million cash payment, and a small non-cash adjustment. We ended the quarter with no debt and 142 million of cash and short-term investments, providing flexibility for strategic investments in aircraft, acquisitions in medical, and opportunistic share repurchases. Looking ahead into the balance of the year, Q3 is up to a great start with solid growth in our seasonal short-distance businesses, while medical remains strong. As such, we are reiterating our 2024 and 2025 financial guidance, and we believe our first half, 2024 results puts us on very solid footing to achieve these targets.

Will Heyburn: We ended the quarter with no debt and $142 million of cash in short-term investments, providing flexibility for strategic investments in aircraft, acquisitions in medical, and opportunistic share repurchases. Looking ahead into the balance of the year, Q3 is off to a great start with solid growth in our seasonal short-distance businesses, while medical remains strong. As such, we are reiterating our 2024 and 2025 financial guidance, and we believe our first half 2024 results put us on a very solid footing to achieve these targets.

Will Heyburn: Looking ahead into the balance of the year, Q3 is off to a great start with solid growth in our seasonal short-distance businesses while medical remains strong.

Speaker Change: As such, we are reiterating our 2024 and 2025 financial guidance, and we believe our first half 2024 results puts us on very solid footing to achieve these targets. In medical, our first half 2024 results

Rob Wiesenthal: In medical, our first half 2024 results, both in terms of revenue and segment adjusted EBITDA, came in above our expectations, with sequential revenue growth averaging over 9% in the first two quarters of the year. Most of the growth was driven by volumes that were well above the norm at the majority of our contracted transplant centers. In our experience, transplant volumes tend to be lumpy, and periods of above-average volumes often mean that our hospital customers need to rebuild their organ transplant recipient pipelines.

Will Heyburn: In medical, our first half 2024 results, both in terms of revenue and segment adjusted EBITDA, came in above our expectations, with sequential revenue growth averaging over 9% in the first two quarters of the year. Most of the growth was driven by volumes that were well above the norm at the majority of our contracted transplant centers.

Will Haver: In medical, our first half, 2024 results, both in terms of revenue and segment agenda that we've got, came in above our expectations, with sequential revenue growth averaging over 9 percent in the first two quarters of the year. Most of the beat was driven by volumes that were well above the norm at the majority of our contracted transplant centers. In our experience, transplant volumes tend to be lumpy, and periods of above average volumes often mean that our hospital customers need to rebuild their organ transplant recipient pipelines. Given this very strong performance in the first half of the year, we expect medical revenue and adjusted EBITDA to be flatish in Q3, relative to Q2, before resuming low single-digit sequential revenue growth.

Speaker Change: Both in terms of revenue and segment adjusted EBITDA came in above our expectations with sequential revenue growth averaging over 9% in the first two quarters of the year. Most of the beat was driven by volumes that were well above the norm at the majority of our contracted transplant centers.

Will Heyburn: In our experience, transplant volumes tend to be lumpy, and periods of above-average volumes often mean that our hospital customers need to rebuild their organ transplant recipient pipelines. Given this very strong performance in the first half of the year, we expect medical revenue and adjusted EBITDA to be flattish in Q3 relative to Q2 before resuming low single-digit sequential revenue growth. In terms of year-over-year growth expectations, medical revenue grew 22% year-over-year in the first half of the year, and we expect similar revenue growth in the second half of the year.

Speaker Change: In our experience, transplant volumes tend to be lumpy, and periods of above-average volumes often mean that our hospital customers need to rebuild their organ transplant recipient pipelines.

Rob Wiesenthal: Given this very strong performance in the first half of the year, we expect medical revenue and adjusted EBITDA to be flattish in Q3 relative to Q2 before resuming low single-digit sequential revenue growth. In terms of year-over-year growth expectations, medical revenue grew 22% year-over-year in the first half of the year, and we expect similar revenue growth in the second half of the year. In the short term, we expect single-digit year-over-year revenue growth in the back half of the year, excluding the impact of our Canada exit.

Speaker Change: Given this very strong performance in the first half of the year, we expect medical revenue and adjusted EBITDA to be flattish in Q3 relative to Q2 before resuming low single-digit sequential revenue growth. In terms of year-over-year growth expectations, medical revenue grew 22 percent year-over-year in the first half of the year, and we expect similar revenue growth in the second half of the year. In short distance, we expect single-digit year-over-year revenue growth in the back half of the year, excluding the impact of our Canada exit.

Will Haver: In terms of year-to-year growth expectations, medical revenue grew 22 percent year-to-year in the first half of the year, and we expect similar revenue growth in the second half of the year. In short-distance, we expect single-digit year-to-year revenue growth in the back half of the year, excluding the impact of our Canada exit. Note that Canada contribute approximately 2 million and 3 million in revenue during Q3 and Q4 2023, respectively, which, depending on the exact time of our exit, may not reoccur. Yet another had a very strong Q2 2024, but the results are inherently volatile in this product line, and we expect quarterly revenue to be in the $5 million range in the second half of the year.

Will Heyburn: In the short term, we expect single-digit year-over-year revenue growth in the back half of the year, excluding the impact of our Canada exit. Note that Canada contributed approximately $2 million and $3 million in revenue during Q3 and Q4 2023, respectively, which, depending on the exact time of our exit, may not reoccur.

Rob Wiesenthal: Note that Canada contributed approximately $2 million and $3 million in revenue during Q3 and Q4 2023, respectively, which, depending on the exact time of our exit, may not reoccur. Chet and others had a very strong Q2 2024, but the results are inherently volatile in this product line, and we expect quarterly revenue to be in the $5 million range in the second half of the year. Passenger segment adjusted EBITDA should see further year-over-year improvements in both Q3 and Q4 2024.

Speaker Change: Note that Canada contributed approximately $2 million and $3 million in revenue during Q3 and Q4 2023, respectively, which, depending on the exact time of our exit, may not reoccur.

Will Heyburn: Chet and others had a very strong Q2 2024, but the results are inherently volatile in this product line, and we expect quarterly revenue to be in the $5 million range in the second half of the year. Passenger segment adjusted EBITDA should see further year-over-year improvements in both Q3 and Q4 2024. We expect adjusted unallocated corporate expenses to be flat to down sequentially for the remainder of the year relative to Q2 20

Speaker Change: Chet and other had a very strong Q2 2024, but the results are inherently volatile on this product line, and we expect quarterly revenues to be in the $5 million range in the second half of the year. Passenger segment adjusted EBITDA should see further year-over-year improvements in both Q3 and Q4 2024.

Will Haver: Paths under segment adjusted EBITDA should see further year-to-year improvements in both Q3 and Q4 2024. We expect adjusted unallocated corporate expenses to be flat down sequentially for the remainder of the year relative to Q2 2024.

Speaker Change: We expect Adjusted Unallocated Corporate Expenses to be flat to down sequentially for the remainder of the year relative to Q2 2024.

Will Heyburn: I would also like to quickly highlight the updated and comprehensive investor presentation we published this afternoon. We've added detail around our growth and value creation strategy in both medical and passenger, including the return profiles of our recent aircraft investments. We hope you find it useful. With that, I'll turn it back over to Rob for a few closing remarks. Thanks, Will.

Will Haver: I would also like to quickly highlight the updated and comprehensive investor presentation we published this afternoon. We've added detail around our growth and value creation strategy in both medical and passenger, including the return profiles of our recent aircraft investments. We hope you find it useful.

Speaker Change: I would also like to quickly highlight the updated and comprehensive investor presentation we published this afternoon. We've added detail around our growth and value creation strategy in both medical and passenger, including the return profiles of our recent aircraft investments.

Rob Wiesenthal: With that, I'll turn it back over to Ron for a few closing remarks. Thanks, Will. Before we turn it over for questions, I'd like to make a few brief comments regarding the current economic environment. Our company was designed specifically not just to weather an economic storm, but to thrive in one. The majority of our revenue and nearly all of our profit is generated by our organ transportation business, where we provide an essential service supporting the life-saving activities of host. A key priority of the U.S. healthcare system that has historically been recession-proof. This contractual business is the only area in which we have invested in aircraft ownership.

Rob Wiesenthal: Before we turn it over to questions, I'd like to make a few brief comments regarding the current economic environment. Our company was designed specifically not just to weather an economic storm but to thrive in it. The majority of our revenue and nearly all of our profit is generated by our organ transportation business, where we provide an essential service supporting the life-saving activities of hospitals, a key priority of the U.S. healthcare system that has historically been recession-proof.

Speaker Change: We hope you find it useful.

Speaker Change: With that, I'll turn it back over to Ram for a few closing remarks.

Speaker Change: Thanks Will. Before we turn it over for questions, I'd like to make a few brief comments regarding the current economic environment. Our company was designed specifically not just to weather an economic storm, but to thrive in one.

Speaker Change: The majority of our revenue and nearly all of our profit is generated by our organ transportation business where we provide an essential service supporting the life-saving activities of hospitals.

Rob Wiesenthal: This contractual business is the only area in which we have invested in aircraft ownership. Our passenger business serves a predominantly top-tier affluent consumer who has proven to be much more resilient in a recessionary environment and operates with zero aircraft ownership, making the cost structure highly flexible, as evidenced by our consistent passenger flight profit performance during the pandemic. Regardless of the recent market dislocation, we're halfway through the summer high season for our short-distance business, and we have seen no weakness.

Speaker Change: a key priority of the U.S. healthcare system that has historically been recession-proof. This contractual business is the only area in which we have invested in aircraft ownership. Our passenger business serves a predominantly top-tier affluent consumer who has proven to be much more resilient in a recessionary environment and operates with zero aircraft ownership, making the cost structure highly flexible, as evidenced by our consistent passenger flight profit performance during the pandemic. Irrespective of the recent market dislocation, we're halfway through the summer high season for our short-distance business, and we have seen no weakness.

Rob Wiesenthal: Our passenger business serves a predominantly top-tier affluent consumer who has proven to be much more resilient in a recessionary environment and operates with zero aircraft ownership, making the cost structure highly flexible, as evidenced by our consistent passenger flight profit performance during the pandemic. Irrespective of the recent market dislocation, we're halfway through the summer high season for our short business business, and we have seen no weakness. In fact, we've seen growth in Q3 today.

Rob Wiesenthal: In short, we believe we are extremely well-positioned for varying economic environments, and, in fact, any market dislocation should create attractive opportunities for us to deploy our strong balance sheet for bolt-on acquisitions, investments in aircraft, and opportunistic share repurchases.

Rob Wiesenthal: In short, we believe we are extremely well positioned for varying economic environments, and, in fact, any market dislocation should create attractive opportunities for us to deploy our strong balance sheet for bolt-on acquisitions, investments in aircraft, and opportunistic share repurchases. With that, I'll turn it back over to Matt for Q&A. Thanks, Rob.

Rob Wiesenthal: In fact, we've seen growth in Q3 to date. In short, we believe we are extremely well positioned for varying economic environments, and, in fact, any market dislocation should create attractive opportunities for us to deploy our strong balance sheet for bolt-on acquisitions, investments in aircraft, and opportunistic share repurchases. With that, I'll turn it back over to Matt for Q&A. Thanks Rob.

Speaker Change: In fact, we've seen growth in Q3 to date.

Speaker Change: In short, we believe we are extremely well positioned for varying economic environments and in fact, any market dislocation should create attractive opportunities for us to deploy our strong balance sheet for bolt-on acquisitions, investments in aircraft and opportunistic share repurchases. With that, I'll turn it back over to Matt for Q&A. Thanks, Rob. We'll start by taking questions from the analyst community and we'll follow up with a few questions from the Say Q&A platform. I'll now turn it over to the operator for analyst questions.

Mathew Schneider: With that, I'll turn it back over to Matt for Q&A. Thanks, Rob. We'll start by taking questions from the analyst community, and we'll follow up with a few questions from the SAE Q&A platform.

Operator: Good afternoon ladies and gentlemen and welcome to Blade Air Mobility Fiscal 2nd quarter, 2024 earnings release conference call. At this time all participants earn a listen only mode. Later we will conduct a question, answer session, and instructions will follow at that time.

Mat Schneider: Thanks Rob. We'll start by taking questions from the analyst community, and we'll follow up with a few questions from the Say Q&A platform. I'll now turn it over to the operator for questions from the analysts.

Operator: I'll now turn it over to the operator for analyst questions.

Operator: Thank you.

Operator: Anyone should require operator assistance, please press star, then zero key on your touch telephone. As a reminder this call is being recorded, I would like to turn the conference call over to Mat Schneider, Vice President of Investor Relations and Strategic Finance.

Operator: At this time, we will conduct the question and session. As a reminder to ask a question, you'll need to press star 1-1 on your telephone. And wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster.

Operator: At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A list. Our first question comes from Jason Helfstein of Oppenheimer & Co., Inc. Your line is now open.

Operator: At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1 1 on your telephone. Our first question comes from Jason Helfstein of Oppenheimer & Co., Inc. Your line is now open.

Speaker Change: Thank you.

Speaker Change: At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1 1 on your telephone.

Speaker Change: and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster.

Mathew Schneider: Mathew you may now begin. Thank you for standing by and welcome to the Blade Air Mobility conference call and webcast for the quarter ended June 30th, 2024. We appreciate everyone joining us today.

Jason Helfstein: Our first question comes from Jason Helstein of Oppenheimer & Co. Inc. Your line is now open.

Mat Schneider: Thanks, Jason. I'll take them.

Speaker Change: Our first question comes from Jason Helstein of Oppenheimer & Co, Inc. Your line is now open.

Mathew Schneider: Before we get started, I would like to remind you of the company's forward-looking statement in 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 security's 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 statements.

Jason Helfstein: Hey everybody, so a few questions. Now that you've exited Canada, I mean, basically, while there's still seasonality in it, like the passenger gross margin, 25% we saw, that should, generally, that should be, give or take the run rate going forward. So that's just kind of question number one. I guess there's probably still some seasonality, maybe what, in the first quarter, but just maybe talk about that. And then I guess the second question on just like further initiatives to try to, you know, kind of how you're thinking about growth in the airport and, you know, other partnerships or other initiatives to kind of boost that, and then housekeeping will The 5.8 million impairment, that was in GNA, I think.

Jason Helfstein: Hey, everybody. So a few questions. So now that you've edited Canada, I mean, basically, while there's no seasonality in it, like the passenger grows margin 25%, we saw that should generally, that should be like give or take the run rate going forward. So that's just going to question one.

Speaker Change: Hi everybody. So a few questions. So now that you've exited Canada, I mean basically...

Jason Helfstein: Is that right? And is there anything else just to strip out of that? Because I think if you take that out, it would have been up like, who million? So just double checking that. Thanks, Jason.

Speaker Change: While there's still seasonality in it, like the passenger gross margin, 25% we saw, that should generally, that should...

Speaker Change: be like give or take the run rate going forward. So that's just kind of question one. I guess there's probably still some seasonality, maybe what in...

Jason Helfstein: I guess there's probably still some seasonality, maybe what in first quarter, but you just maybe talk to that.

Mathew Schneider: We refer you to our SEC filings, including our annual report on Form 10K filed with the SEC for a more detailed discussion of the risk factors that could cause these differences. Any forward-looking statements provided during this conference call are only made as of the date of this call. As stated in our SEC filings, blade this claims any intended obligation to update or revise these forward-looking statements, except as required by law.

Jason Helfstein: And then I guess second question on just like earlier initiatives to try to, you know, kind of, how you're thinking about growth and airport and, you know, other partnerships or other initiatives to kind of boost that. And then, housekeeping will, the 5.8 million impairment, that was in G&A, I think. Is that right? Just, and is there anything else just to strip out of that? Because I think we take that out. It would have been up like two million. So just, just double checking that.

Speaker Change: First quarter, but you just made me talk to that

Speaker Change: And then, I guess, second question on just like further initiatives to try to, you know, kind of how you're thinking about growth and airport and, you know, other partnerships or other initiatives to kind of boost that.

Speaker Change: and then housekeeping will...

Speaker Change: The 5.8 million impairment, that was in GNA, I think. Is that right? And is there anything else just to strip out of that? Because I think if you take that out, it would have been up like...

Mathew Schneider: During today's call we will also discuss certain non-gap financial measures, which we believe may be useful in evaluating our financial performance. A reconciliation of the most directly historical, comparable, consolidated gap financial measures to those historical non-gap financial measures is provided in our earnings press release and investor presentations. Our press release investor presentation and our Form 10K fileings are available on the Investor Relations section of our website at ir.blade.com. These non-gap measures should not be considered in isolation or a substitute for financial results prepared in accordance with gap.

Jason Helfstein: Thank you.

Speaker Change: Two millionists, so just double-checking that. Thank you.

Rob Wiesenthal: Thanks, Jason.

Will Heyburn: Thanks, Jason. I'll take one and three there. You're correct about the 5.8 million that flowed through T&A on the passenger side. On Canada, you know, as we mentioned, it was a loss-making business, and it was pretty small, so don't think it'll have a particularly material impact, but if anything, flight profit margins could be a touch better. From a seasonality perspective, it was counter-seasonal to the rest of our passenger businesses, so the bulk of that revenue flowed through in Q1 and Q4, so we told you in the prepared remarks that we expected it to be about 2 million in revenue in Q3 and 3 million in Q4 and could end before the end of the year, but that's sort of rough seasonality there, and then Rob. This is an airport.

Will Haver: I'll take one and three there. You're correct on the 5.8 million that flow through TNA on the passenger side.

Speaker Change: Hey Jason, I'll take one and three there. You're correct on the 5.8 million that flow through TNA on the passenger side.

Will Haver: On Canada, you know, as we mentioned, it was a loss-making business and it was pretty small. So don't think it'll have a particularly material impact, but if anything, flight profit margins could be a touch better. From a seasonality perspective, it was counter seasonal to the rest of our passenger businesses. So the bulk of that revenue flow through NQ1 and Q4.

Speaker Change: On Canada, as we mentioned, it was a loss-making business, and it was pretty small, so don't think it will have a particularly material impact, but if anything, flight profit margins could be a touch better.

Speaker Change: From a seasonality perspective, it was counter-seasonal to the rest of our passenger businesses, so the bulk of that revenue flowed through in Q1 and Q4.

Mathew Schneider: Hosting today's call are Rob Wiesenthal, Founder Chief Executive Officer of Blade, and Will Haver, Chief Financial Officer. I will now turn the call over to Rob. Thank you, Matt, in good afternoon everyone.

Will Haver: So we told you on the prepared remarks that expected it to be about 3 million of revenue in Q3 and 3 million in Q4, and could end before the end of the year, but that sort of rough seasonality there.

Speaker Change: So we told you on the prepared remarks that expected it to be about $2 million of revenue in Q3 and $3 million in Q4 and could end before the end of the year, but that's sort of rough seasonality there.

Rob Wiesenthal: Let me make myself clear. We had a great quarter. Our strong Q2 2024 results mark the lay's first positive-adjusted EBITDA second quarter as a public company, with both our medical and passenger segments enjoying strong performance and contributing positive-segment-adjusted EBITDA on the quarter. And as a guidepost for those listening, we have beaten every key metric of our cell side investment banking consensus estimates of the five banks that cover us. In Q2 2024, revenue increased 11.4% in year-over-year, flight profit increased 57.7% in year-over-year, and adjusted EBITDA a positive 1 million improved by 5.4 million versus negative 4.4 million in the prior year period.

Rob Wiesenthal: and then Roba, just on the airport. Well, yeah, just in short distance in general, Jason, and also on the airport with respect to growth. You know, you've seen the Jeff Loo deal we did, which really drove a lot of passengers to us. The fair classes continue to outperform our expectations. We've taken in pricing. You know, you saw our average price, and I kind of think that $330 range, which is obviously very strong, but not a type of price that's going to scare people because you can't do that. These are basically based on add-ons and also fair classes.

Rob Wiesenthal: Well, yeah, just in the short distance in general, Jason, and also at the airport with respect to growth, you know, you've seen the JetBlue deal we did, which really drove a lot of passengers to us. The fare classes continue to outperform our expectations. We've taken in pricing, you know; you saw our average price. And I kind of think that $330 range, which is obviously very high, but not a type of price that's going to scare people because you can't.

Rob Wiesenthal: Well, yeah, just in the short distance in general, Jason, and also at the airport with respect to growth, you know, you've seen the JetBlue deal we did, which really drove a lot of passengers to us. The fare classes continue to outperform our expectations. We've taken in pricing, you know, you saw our average price, and I kind of think that $330 range, which is obviously very high, but not the type of price that's going to scare people because you can't, these are basically based on add-ons and also fare classes. So if you want to kind of travel on a budget, you know, you have ways of going for $195.

Speaker Change: And then Rob.

Speaker Change: Tasson Airport,

Speaker Change: Well, yeah, just in short distance in general, Jason, and also on the airport with respect to growth.

Speaker Change: You've seen the JetBlue deal we did, which really drove a lot of passengers to us. The fare classes continue to outperform our expectations. We've taken in pricings. You know, you saw our average price.

Speaker Change: And I kind of think the $330 range, which is obviously...

Rob Wiesenthal: These are basically based on add-ons and also fare classes. So if you want to kind of travel on a budget, you know, you have ways of going for $195. Also, you saw an interline deal with Emirates. That's terrific, because now on a GDS system, and when you're booking, if you want to fly anywhere in the world, from where Emirates flies to Monaco, your last leg will automatically be a Blade Helicopter, if you so choose.

Rob Wiesenthal: Also, you saw an interline deal with Emirates. That's terrific, because now on a GDS system, and when you're booking, if you want to fly anywhere in the world, from where Emirates flies to Monaco, your last leg will automatically be a Blade helicopter, if you so choose.

Rob Wiesenthal: I will now review our key business operational and strategic highlights starting with medical. Medical achieved record high revenue of 38.3 million in the quarter, up 6.4% sequentially versus Q1 2024, and up 11.5% versus the prior year period, excluding the impact of non-recurring support of a large hospital in the prior year period. Medical revenue increased 19% year-over-year. Medical segment adjusted EBITDA increased by 82.7% of 5.5 million in Q2 2024 versus the prior year period with margins expanding over 550 basis points year-of-year, also a record for the company.

Speaker Change: Very strong, but not a type of price that's going to scare people because you can't do that These are basically based on add-ons and also their classes So if you want to kind of travel on a budget, you know, you have ways of

Rob Wiesenthal: So if you want to kind of travel on a budget, you know, you have ways of going for 195. Also, you saw an internal ideal with Emirates. That's terrific because now I'm in the GDS system and when you're booking, if you want to fly anywhere in the world where Emirates flies to Monaco, your last leg will automatically be a blade helicopter if you so choose. So we're hoping for more of these types of interline deals. We have two more kinds of hopefully coming. We also did a deal with the built credit card, which has been driving a lot of traffic in the New York area where people who pay rent, you know, get to use a flight bank, purchase five builds.

Speaker Change: going for $195,000. Also you saw an interline deal with Emirates. That's terrific because now on a GDS system and when you're booking if you want to fly anywhere in the world

Rob Wiesenthal: So we're hoping for more of these types of interline deals. We have two more hopefully coming. We also did a deal with the Bilt credit card, which has been driving a lot of traffic in the New York area where people who pay rent get to use a flight bank and purchase five Bilts. Again, these are all paid for. And then also, we've had hotel deals with Marriott.

Speaker Change: From where Emirates flies to Monaco, your last leg will automatically be a Blade helicopter if you so choose.

Rob Wiesenthal: So we're hoping for more of these types of interline deals. We have two more hopefully coming soon. We also did a deal with the Bilt credit card, which has been driving a lot of traffic in the New York area, where people who pay rent get to use a flight bank and purchase five Bilts. Again, these are all paid for. And also, you know, we had hotel deals with Marriott. We're on your confirmations for the St. Regis. The addition, it's called everybody getting an opportunity to fly an airport. And then also on our leisure routes, specifically.

Speaker Change: So we're hoping for more of these type of interline deals. We have two more kind of hopefully coming. We also did a deal with the built credit card.

Speaker Change: which has been driving a lot of traffic in the New York area, where people who pay rent get to use a flight bank, purchase flight bills, again these are all paid for, and then also we've had hotel deals.

Rob Wiesenthal: We close on seven of the eight previously announced and committed jet aircraft acquisitions this quarter. While it's still early days, we're encouraged by both the value, the aircraft provides for our customers and the initial financial performance of the fleet. While we continue to believe that the vast majority of our flying will remain with third-party owned and operated aircraft as part of our layered asset life approach, we believe there is an opportunity to expand our fleet of owned aircraft given both the customer benefits and strong returns that we're seeing.

Rob Wiesenthal: Again, these are all paid for. And then also, you know, we had hotel deals with Marriott. We're on your conformations for the same region. The addition, which is called Everybody getting an opportunity to fly your report. And then also, on our leisure routes, specifically in Long Island, you know, we push really hard on things outside of East Hampton, Jason, where we're seeing good growth from places like South Hampton and Stag Harbor. So I think, you know, overall, I feel good about it, both in terms of pricing, both in terms of customer acquisition, and also on the growth of new routes.

Rob Wiesenthal: We're on your confirmations for the St. Regis, the addition. It's called Everybody Getting an Opportunity to Fly Airport. And then also, on our leisure routes, you know, specifically, on Long Island, Jason, we push really hard on things outside of East Hampton, where we're seeing good growth from places like South Hampton and Sag Harbor. So I think, you know, overall, I feel good about it, both in terms of pricing, both in terms of customer acquisition, and also in terms of growth.

Speaker Change: with Marriott, we're on your confirmations for the St. Regis, the addition, Ritz Carlton, everybody getting an opportunity to fly to the airport, and then also on our leisure routes, specifically

Speaker Change: In Long Island, you know, we push really hard on things outside of East Hampton, Jason, where we're seeing good growth from places like Southampton and Sag Harbor. So I think, you know, overall, I feel good about it, both in terms of pricing, both in terms of customer acquisition, and also on the growth of new routes.

Rob Wiesenthal: In simple terms, these aircraft are already delivering 30% plus returns on domestic capital. We expect to close on the eight aircraft during Q3 2024. We made additional progress expanding our medical ground logistics business and recently opened two new ground hubs bringing our total to eight. Medical ground revenue increased more than 50% year-over-year during the quarter and represented 12% of medical revenue in the quarter.

Rob Wiesenthal: And just one follow-up, just any comment, just broadly, people are a little more..., a little more concerned about the outlook for the consumer. Obviously, you know, on your consumer side, it's a more affluent consumer, but anything to tell you that your customers are pulling back or Uh, I would say, you know, July was...

Rob Wiesenthal: And just one follow-up, just any comment, just broadly, people are a little more, I think, a little more concerned about the olive for the consumer. Obviously, you know, on your consumer side, it's a more Apple consumer, but anything to tell you that like your customers are pulling back or kind of no change. I would say, you know, July was very sexually strong for us on the short-distance side. So we have not seen anything yet. I would say on the leisure side, I really view us as kind of, if you look to the luxury brands, the ones that did not see, kind of any kind of, you know, deterioration. I kind of put our leisure market on in that category, you know, but when you think about airport, you know, obviously, you know, we're competing with Uber.

Jason Helstein: And just one follow-up, just any comment, just broadly, people are a little more, I think...

Rob Wiesenthal: a little more concerned about the outlook for the consumer. Obviously, on your consumer side, it's a more affluent consumer, but anything to tell you that, like, your customers are pulling back or not.

Speaker Change: I'm a little more concerned about the outlook for the consumer, obviously, you know, on your consumer side, it's a more affluent consumer, but anything to tell you that, like, your customers are pulling back or kind of no change.

Rob Wiesenthal: I would say July was very exceptionally strong for us on the short-distance side, so we have not seen anything yet. I would say on the leisure side, I really view us as, if you looked at the luxury brands, the ones that did not see any kind of deterioration, I kind of put our leisure market in that category. But when you think about the airport, obviously, we're competing with Uber. Uber Blacks are very expensive right now. I haven't seen it yet, but we're still seeing decent growth, but we're keeping our eyes open like everybody else.

Rob Wiesenthal: I would say, you know, July was very exceptionally strong for us on the short-distance side. So we have not seen anything yet. I would say on the leisure side, I really view us as kind of if you look at the luxury brands, the ones that did not see any kind of, you know, deterioration, I kind of put our leisure market in that category. You know, but when you think about airports, you know, obviously, you know, we're competing with Uber. Uber Blacks are very expensive right now.

Speaker Change: I would say, you know, July was very exceptionally strong for us.

Speaker Change: on the short distance side.

Speaker Change: So we have not seen anything yet. I would say on the leisure side, I really view us as, kind of, if you looked at the luxury brands, the ones that did not see

Speaker Change: Any kind of...

Speaker Change: you know

Speaker Change: deterioration, I kind of put our leisure market on in that category, you know, but when you think about airport, you know, obviously, you know, we're competing with Uber, Uber Blacks are very expensive right now, haven't seen it yet, still seeing, you know, decent growth, but, you know, we're keeping our eyes open like everybody else. Thank you.

Rob Wiesenthal: Uber Blacks are very expensive right now. Haven't seen it yet. Still seeing, you know, decent growth. But, you know, we're keeping our eyes open like everybody else.

Rob Wiesenthal: Additionally, we were pleased to see the number of airport passes outstanding up more than 30% year-over-year. Airport passes renew annually and are typically held by our most active and loyal flyers by purchasing a pass. Customers are signaling that they expect to fly more than eight times per year. The significant improvement in the passenger segment adjusted EBITDA this quarter and year-to-date along with the decisive actions we're taking to drive further profitability improvements that we'll discuss shortly.

Rob Wiesenthal: I haven't seen it yet. We're still seeing, you know, decent growth. But you know, we're keeping our eyes open like everybody else.

Jason Helfstein: Thank you.

Edison U: Our next question is coming from Edison U of Doishbank. Your line is now open.

Operator: Our next question is coming from Edison Yu of Deutsche Bank. Your line is now open.

Speaker Change: Thank you.

Speaker Change: Our next question is coming from Edison Yu of Deutsche Bank. Your line is now open.

Edison U: Hey, thank you for taking our questions, and congratulations on the strong quarter. First one is, it sounded as if, you know, the return profiles are quite strong for the aircraft you're buying, and even on the ground. You have some sense of how much more you would consider kind of bringing on board until where that maybe doesn't make sense anymore. Just curious, you know, how much more leverage we can probably, we can potentially get out of it. You're right, Edison. We're seeing great returns from the aircraft, and we do see an opportunity to expand that program.

Analyst: Hey, thank you for taking our questions and congratulations on the strong, strong quarter. The first one is that it sounded as if, you know, the return profiles are quite strong for the aircraft you're buying and even on the ground. Do you have some sense of how much more you would consider kind of bringing on board until, or maybe that maybe doesn't make sense anymore? Just curious, you know, how much more leverage we can potentially get out of this.

Edison Yu: Hey, thank you for taking our questions and congratulations on the strong, strong quarter. The first one is that it sounded as if, you know, the return profiles are quite strong for the aircraft you're buying and even on the ground. Do you have some sense of how much more you would consider kind of bringing on board until, or maybe that maybe doesn't make sense anymore? Just curious, you know, how much more leverage we can potentially get out of this.

Edison Yu: Hey, thank you for taking our questions and congratulations on the strong, strong quarter.

Rob Wiesenthal: Underscore commitment to achieving positive trailing 12 months passenger segment adjusted EBITDA in 2025 or earlier. In Q2, passenger segment flight profit increased 57.6% year-over-year and passenger segment adjusted EBITDA increased to a positive 0.8 million versus a loss of 2.1 million in the year-go period.

Speaker Change: First one is, it sounded as if...

Speaker Change: You know, the return profiles are quite strong for the aircraft you're buying and even on the ground.

Speaker Change: You have some sense...

Speaker Change: how much more you would consider.

Speaker Change: kind of bringing on board until, or that maybe doesn't make sense anymore. Just curious, you know, how much more leverage we can potentially get out of this.

Rob Wiesenthal: Sure. You're right, Edison.

Will Heyburn: We're seeing great returns from the aircraft, and we do see an opportunity to continue to expand that program. We're always going to be an asset-light business, but as you saw on our new investor deck, only about 10% of our total flying in the 2024 period is expected to be using those new aircraft that we own. So, we think we have a fair amount of room to continue to expand that program, and you're paying back the aircraft in three years or less.

Will Heyburn: Sure. You're right, Edison.

Speaker Change: Sure. You're right, Edison. You know, we're seeing great returns from the aircraft.

Will Heyburn: We're seeing great returns from the aircraft, and we do see an opportunity to continue to expand that program. We're always going to be an asset-light business, but if you saw on our new investor deck, only about 10% of our total flying in the 2024 period is expected to be using those new aircraft that we own. So we think we have a fair amount of room to continue to expand that program.

Will Haver: We're always going to be an asset of life business, but if you saw on our new investor debt, only about 10% of our total flying in the 2024 period is expected to be using those new aircraft that we own. So we think we have a fair amount of room to continue to expand that program, and you're paying back the aircraft in three years or less. On the ground side, we're proceeding with a hub model. So we're looking at areas where we have the right amount of density to own our own vehicles, and then we're paying them back in less than a year.

Speaker Change: And we do see an opportunity to continue to expand that program. We're always going to be an asset-light business, but if you saw on our new investor deck, only about 10% of our total...

Speaker Change: flying in the two thousand and twenty four

Will Heyburn: And you're paying back the aircraft in three years or less. On the ground side, we're proceeding with a hub model. So we're looking at areas where we have the right amount of density to own our own vehicles, and then we're paying them back in less than a year. So you'll see us continue to add those vehicles, obviously, at a smaller ticket price, so you're not going to see as much of an impact on the P&L, but still very creative investments on both fronts. So, you know, I think a low single-digit number of aircraft is something you could expect as incremental ads coming up over the next, you know, 6 to 12 months is probably what I would think about.

Speaker Change: period is expected to be using those new aircraft that we own. So we think we have a fair amount of room to continue to expand that program, and you're paying back the aircraft in three years or less.

Rob Wiesenthal: Similar toward decision to discontinue the blade one seasonal by the seat service between near and south Florida, we're making the prudent choice to exit an unprofitable business line and to focus our resources on the core roots in our passenger segment with limited or no competition and pricing last capacity, enabling a path to sustainable profitability. In Europe, we're encouraged by the early results of the steps we've taken to streamline our commercial organization and cost structure. Europe resumes, Europe a year revenue growth during the quarter. We look forward to providing regular updates on our progress here.

Will Heyburn: On the ground side, we're proceeding with a hub model. So, we're looking at areas where we have the right amount of density to own our own vehicles, and then we pay them back in less than a year. So, you'll see us continue to add those vehicles. Obviously, they have a smaller ticket price, so you're not going to see as much of an impact on the P&L, but still very accretive investments on both fronts. So, you know, I think

Speaker Change: On the ground side, we're proceeding with a hub model, so we're looking at areas where we have the right amount of density.

Will Haver: So you'll see it's continued to add those vehicles; obviously, smaller ticket price, so you're not going to see as much of an impact to the P&L, but still very accretive investments on both fronts.

Speaker Change: to own our own vehicles, and then we're paying them back in less than a year. So you'll see us continue to add those vehicles. Obviously, smaller ticket price, so you're not going to see as much of an impact to the P&L, but still very accretive investments on both fronts.

Will Haver: So I think low single digit number of aircraft is something you could expect as incremental ads coming up over the next six to 12 months, is probably what I would think about there.

Rob Wiesenthal: Back in March, our board authorized a $20 million share repurchase program and we executed our first share repurchase under the authorization of this quarter, eliminating approximately 80,000 shares. In addition, we changed our restricted stock unit tax withholding method to withholds cover from self-cover during the quarter, deploying approximately $1 million of balance sheet cash to retire an additional $332,212 shares at approximately $2.94 a share. We will continue to evaluate the optimal RSU tax withholding method in future periods.

Speaker Change: Low single-digit number of aircraft is something you could expect as incremental ads coming up over the next, you know, 6 to 12 months is probably what I would think about there.

Will Haver: And I said also, I think in your remarks, you said Europe was actually pretty, pretty strong, maybe I heard wrong, like in the teens growth. Do you expect that to be strong in the second half to continue to do well in the second half? What Europe is, we're pleased with how it went in Q2. As you know, about 50% of that business happens in Q3. So we got to see how the summer goes, but we're happy with the operational turnaround that we've done.

Rob Wiesenthal: Also, I think in your remarks, you said Europe was actually pretty, pretty strong. Maybe I heard wrong, like mid-teens growth. Do you expect that to be strong in the second half and continue to do well in the second half?

Speaker Change: Understood. Also, I think in your remarks you said Europe was actually pretty, pretty strong. Maybe I heard wrong, like mid-teens growth. Do you expect that to be strong in the second half, to continue to do well in the second half?

Rob Wiesenthal: Look, Europe, we're pleased with how it went in Q2. As you know, about 50% of that business happens in Q3.

Speaker Change: Look, Europe is, we're pleased with how it went in Q2. As you know, about 50% of that business happens in Q3. So, we've got to see how the summer goes, but we're happy with the operational turnaround that we've done. We're happy with the growth that we've seen both in Q2 and the growth that we've seen for the parts of the year that have come through. But there's a big part of the season that's left to come, so we'll reserve comment until we get through that seasonally busiest period.

Rob Wiesenthal: We're focused on maintaining a strong balance sheet and our capital allocation priorities are focused on low risk, high return investments and medical aircraft and ground vehicles. As well as bolt-on acquisitions in medical that enhance our competitive position or enable the expansion into other time critical logistics verticals. It is imperative to us that we are convinced these investments are accrued on day one. We will continue to weigh these priorities relative to further opportunistic share repurchases as well with that alternative or to will.

Will Haver: We're happy with the growth that we've seen both in Q2 and the growth that we've seen for the parts of the year that have come through, but there's a big part of the season that's left to come, so we'll reserve come until we get through that season like this is period. Gotcha.

Rob Wiesenthal: So we'll see how the summer goes, but we're happy with the operational turnaround that we've done. We're happy with the growth that we've seen both in Q2 and the growth that we've seen for the parts of the year that have come through. But there's a big part of the season that's left to come. So we'll reserve comment until we get through that season like this.

Will Heyburn: Gotcha. And just last one on the buyback. I sort of missed the second part you had mentioned you bought, I think, 80,000 shares back, but you also changed something with the RIC. You can just go over that again. I didn't quite catch all of it.

Analyst: Gotcha. And just last one on the buyback. I sort of missed the second part you had mentioned you bought, I think, 80,000 shares back, but you also changed something with the RIC. You can just go over that again. I didn't quite catch all of it.

Will Haver: And just last one on the buyback, I sort of missed. I think the second part you had mentioned, you bought, I think 80,000 shares back, but you also changed something with the RS. You can just go over that again, I didn't quite catch all of it. Yes, so we had two ways to kind of remove shares from the float. We have the $20 million buyback authorization, which we did use during the period to refer to about 80,000 shares.

Will Haver: Thank you, Rob.

Will Haver: I'll now walk through the financial highlights from the quarter starting with medical. Medical segment revenue rose 11.5% year over year in the first quarter to $38.3 million and rose 6.4% sequential labor versus Q1 2024. As discussed on prior calls, we provided temporary support to a large hospital customer last year which generated 2.2 million of revenue in Q2 2023. Excluding the impact of the temporary customer, medical revenue would have increased 19% year over year.

Speaker Change: Gotcha. And just last one on the buyback, I sort of missed, I think, the second part you had mentioned you bought, I think, 80,000 shares back, but you also changed something with the RIC. Can you just go over that again? I didn't quite catch all of it.

Will Heyburn: Yes, so we had two ways to kind of remove shares from the float. We had the $20 million buyback authorization, which we did use during the period to repurchase about 80,000 shares. But separately from that, we changed our tax withholding method for employee stock units to withhold for cover. So essentially, what happens there is when employees have stock that vests, instead of selling those shares to cover the taxes, we take them from the employees, and we pay the taxes directly off the balance sheet. So it's essentially the same kind of mechanism, and we use that to eliminate another 332,000 shares for about $1 million during this quarter. Does that make sense? Yeah, okay, gotcha, gotcha.

Edison Yu: Yeah, okay, gotcha, gotcha, great. Thanks a lot for the insights.

Speaker Change: Yes, so we had two ways to kind of remove shares from the float. We had the $20 million buyback authorization, which we did use during the period to repurchase about 80,000 shares. But separately from that, we changed our tax withholding method for employee stock units.

Will Haver: But separately from that, we changed our tax withholding method for employee stock units to withhold for cover. So essentially what happens there is when employees have stocked that that's instead of selling those shares to cover the taxes, we take them from the employees and we pay the taxes directly off the balance sheet. So it's essentially the same kind of mechanism, and we use that to eliminate another 332,000 shares for about a million dollars during this quarter. Does that make sense? Yeah, okay, gotcha, gotcha.

Will Haver: Medical continued to see improvement and profitability as segment adjusted EBITDA rose 82.7% year over year to 5.5 million in Q2 2024. Medical flight margin increased 700 basis points year over year to 23.6% versus 16.6% in the year ago period and increased 130 basis points sequentially versus 22.3% in Q1 2024. This margin expansion was driven primarily by our aircraft acquisitions, growth in our ground logistics business and an increase in average revenue per trip.

Speaker Change: to withhold for cover. So essentially what happens there is when employees have stocked their vests.

Speaker Change: Instead of selling those shares to cover the taxes, we take them from the employees and we pay the taxes directly off the balance sheet. So it's essentially the same kind of mechanism and we use that to eliminate another 332,000 shares for about a million dollars during the quarter. Does that make sense?

Edison U: Great, thanks a lot for the insights. Yep, thanks, that's it. Thank you.

Speaker Change: Yeah, okay, gotcha, gotcha, great. Thanks a lot for the for the insights.

Will Haver: Our medical customer value proposition has never been stronger and we're committed to further enhancing our offering by investing in our own dedicated aircraft fleet, expanding our ground logistics business and scaling our organ placement service offering. Now we have several months of ownership under our belt. We've updated our aircraft profitability and return models with real world data and we're happy with the performance we're seeing. The results provide strong support for increased aircraft ownership in areas of high medical customer density.

Speaker Change: Yup.

Bill Peterson: Our next question comes from Bill Peterson of JP Morgan; your line is now open. Yeah, I get up your name and thanks for taking the questions and a nice job on the quarterly execution. On the Canada exit, I think it's understandable, but I guess what would you say your learnings are from this? You know, clearly there was this excitement about acquiring this a few years ago. How would you apply this to potentially, you know, future acquisitions in North America or globally? And maybe to that point, do you see any attractive markets? Would you consider earning any markets?

Operator: Our next question comes from Bill Peterson of J.P. Morgan. Your line is now open.

Speaker Change: thinks that 's it

Speaker Change: Thank you.

Bill Peterson: Our next question comes from Bill Peterson of J.P. Morgan. Your line is now open.

Bill Peterson: Hi, good afternoon, and thanks for taking the questions and a nice job on the quarterly execution. On the Canada exit, I think it's understandable, but I guess what would you say your learnings are from this? Clearly, there was some excitement about acquiring this a few years ago. How would you apply this to potential future acquisitions in North America or globally? And maybe to that point, do you see any attractive markets? Would you consider entering any markets, ahead of EDA, in order to fend off competition?

Bill Peterson: Yeah, hi, good afternoon and thanks for taking the questions and nice job on the quarterly execution.

Bill Peterson: On the Canada exit, I think it's understandable, but I guess, what would you say your learnings are from this, you know, clearly there was some excitement about acquiring this a few years ago.

Will Haver: Compaired with non-dedicated third-party aircraft, we are targeting a 10-to-20 percentage point flight profit margin increase, meaning that 10-to-20 additional percentage points of revenue will drop down to the bottom line net of depreciation when utilizing our own aircraft. This represents a 30% plus return on indebt to capital, and an average payback period of approximately three years. Note that this analysis only considers the incremental profit relative to non-dedicated third-party aircraft. The profitability and return profile would be substantially higher if one were to consider 100% of the profit generated by customers using the aircraft.

Speaker Change: How would you apply this to potentially, you know, future acquisitions in North America or globally, and maybe to that point, do you see any attractive markets? Would you consider entering any markets, I guess, ahead of EVA in order to sort of fend off competition?

Rob Wiesenthal: So I guess the head of EVA, in order to sort of send off competition. Sure, Rob speaking. I think this was a unique situation in the sense that when we did this deal, it was during COVID, and we do that the bulk of the flyers were essentially government workers going between Vancouver and Victoria, Victoria being kind of almost like the Washington DC of the province.

Rob Wiesenthal: Sure, it's Rob speaking. I think this was a unique situation in the sense that when we did this deal, it was during COVID. And we knew that the bulk of the flyers were essentially government workers going between Vancouver and Victoria, Victoria being kind of like the Washington, D.C. of the province. And we were confident at the time that there would be a recovery to kind of back to work. And what actually happened was they didn't go back to work; all the meetings largely became on zoom.

Speaker Change: Sure, it's Rob speaking. I think this was a unique situation in the sense that

Speaker Change: When we did this deal, it was during COVID.

Bill Peterson: And we knew that the bulk of the flyers were essentially government workers going between Vancouver and Victoria. Victoria being kind of almost like the Washington, D.C. of the province.

Rob Wiesenthal: And we were confident at the time that there would be a recovery to kind of back to work, and what actually happened was they didn't go back to work. The meetings largely became unzoom. This business did not have a tourist business, tourism business in terms of people who were called leisure travelers, but the business traveler, and they were unduly hurt by this.

Speaker Change: And we were confident at the time that there would be a recovery to kind of back to work. And what actually happened was they didn't go back to work. The meetings largely became on Zoom.

Will Haver: We also analyze the return on investment in ground vehicles. We currently operate a fleet of over 30 ground vehicles across eight hubs, and we're seeing a payback period of less than one year, creating a great opportunity for continued investment in this area with excellent returns.

Rob Wiesenthal: This business did not have a tourist tourism business in terms of people more called leisure travelers but business travelers, and they were unduly hurt by this. We gave it some time to recover, and frankly, we don't have any confidence that those meetings which were previously in person by the governor are coming back. It's been a long slog in Canada in terms of getting back to work. You don't see the same kind of reaction post-pandemic there that you do here.

Bill Peterson: This business did not have a tourist business.

Speaker Change: Tourism business in terms of people more called leisure travelers but as a business traveler and they were unduly hurt by this.

Speaker Change: We gave it some time for it to recover, and frankly, we don't have any confidence that those...

Will Haver: Looking at the transplant industry broadly, fundamental remains strong, with United States heart, liver, and lung organ transplant volume growth persisting in the high single digital range during Q2-2020-24. In short, we're very happy with the growth in the industry and our positioning within it, we're honored to play our small role in helping more Americans than ever receive the organs that they need. Turning to our passenger business, short distance revenue increased 9% year-over-year, driven primarily by approximately 20% growth in airport and mid-teens growth in Europe.

Speaker Change: Meetings which were previously in person by the governor coming back. They just it's been a long slog in Canada in terms of Back to work. You don't see the same

Rob Wiesenthal: So, we acted quickly, and we made a really tough decision and said, "You know, this is not profitable. We got to focus on our core markets, this is tertiary, but let's structure this in a way that when EVA is here and it becomes economically viable to return to this market, possibly for leisure, and having more landing zones, we retain that option to get back in the market." Our focus is on profitability, and right now, we're not going to sit and wait for the unknown. Frankly, we have so much capability here in North America and Europe, which are the premier markets for us to operate in, that I think that's where we're best served, both accelerating our path to profitability and also retaining our ability to really focus on these key markets. And to your final part of the question, which is, where else can you do this?

Rob Wiesenthal: So what we did was we acted quick, and we made a really tough decision and said, this is not profitable, we got to focus on our core markets, this is tertiary, but let's structure this in a way that when EVA is here, and it becomes economically viable to return to this market possibly for leisure, and having more landing zones, we retain that option to get back in the market. Our focus is on profitability, and right now we're not going to sit and wait for the unknown, and frankly, we have so much capability here in North America and Europe, which are the premier markets for us to operate in, that I think that's where we're best served.

Speaker Change: kind of reaction post pandemic.

Speaker Change: There that you do see here. So what we did was, you know, we acted quick and we made a really tough decision and said, you know what, this is not profitable. We got to focus on our core markets.

Speaker Change: This is tertiary, but let's structure this in a way that when EVA is here, when it becomes economically viable to return to this market, possibly for leisure, and having more landing zones, we retain that option to get back in the market. Our focus is on profitability.

Speaker Change: All right, and right now we're, you know, not going to sit and wait for the unknown. And frankly, you know, we have so much capability here in North America and Europe , which are the premier markets for us to operate in.

Rob Wiesenthal: that I think that that's where we're best served, both accelerating our path to profitability but also retaining our ability to really focus on these key markets. And to your final part of the question, which is, you know, where else can you do this?

Rob Wiesenthal: Both accelerating our path to profitability, but also maintaining our ability to really focus on these key markets, and to your final part of the question, which is where else can you do this. We've been steadfast in saying to all people, I mean to all investors, that these are the markets that make sense; you need markets that are either congested or geographically contested, and those markets aren't New York and Southern New York. I think the idea of flying between cities and places like for the time being like Dallas or Orlando between the airport downtown where you just don't have the friction that you have in places like New York and Europe.

Speaker Change: that I think that that's where we're best served.

Speaker Change: both accelerating our path to profitability, but also retaining our ability to really focus on these key markets. And to your final part of the question, which is, you know, where else can you do this?

Rob Wiesenthal: You know, we've been steadfast in saying to all people, I mean, to all investors, that these are the markets that make sense. You need markets that are either congested or geographically contested, and those markets are New York and Southern Europe.

Rob Wiesenthal: We've been steadfast in saying to all people, I mean, to all investors, that these are the markets that make sense. You need markets that are either congested or geographically contested, and those markets are New York and Southern Europe.

Speaker Change: You know, we've been steadfast in saying to all people, I mean, to all investors,

Speaker Change: that these are the markets that make sense. You need markets that are either congested or geographically contested. And those markets are New York and Southern Europe. I think the idea of flying between cities and places like, for the time being, like Dallas or...

Rob Wiesenthal: I think the idea of flying between cities and places like, for the time being, like Dallas or Orlando between the airport downtown, where you just don't have the friction that you have in places like New York and Europe, it's just gonna be ways off. You're gonna require new landing zones. And so that's really where it is. I think when EVA is here, Electronic Vertical Aircraft, and the second phase of that will be new landing zones.

Rob Wiesenthal: I think the idea of flying between cities and, you know, places like, for the time being, like Dallas or Orlando between the airport downtown, where you just don't have the friction that you have in places like New York and Europe is just gonna be ways off. You're gonna require new landing zones. And so that's really where it is. I think when EVA is here, Electronic Vertical Aircraft, you know, and then the second phase of that will be new landing zones.

Speaker Change: and Orlando between the airport downtown where you just don't have the friction that you have in places like New York and Europe . It's just going to be ways off. You're going to require new landing zones and so that that's really where it is. I think when EVA is here, Electronic Vertical Aircraft,

Will Haver: On the cash flow front, the difference between our adjusted EBITDA 1 million and cash from operations of 8.4 million in the quarter was primarily driven by the structure of our aircraft purchases, which were all acquired from owners and operators with whom we had pre-existing capacity purchase agreements. As a part of those capacity purchase agreements, we made deposits, 9.3 million of which we applied towards the purchase of seven aircraft in the quarter.

Rob Wiesenthal: It's going to be ways off; you're going to require new landing zones. That's really where it is.

Rob Wiesenthal: I think when EVA is here, electronic repair aircraft, and the second phase of that will be new landing zones. Clearly, cities like Paris and London, Los Angeles, those are going to dig in the hit list, but those are ways off. Our focus is on the today, but Anna tomorrow, going to the point where not only EVA is certified and deployed, but when governments allow new landing zones for the time being, we believe we're in the right place.

Rob Wiesenthal: Clearly, cities like Paris and London, and Los Angeles, those are gonna be big on the hit list, but those are ways off. Our focus is on today and the tomorrow, but going to the point where not only EVA is certified and deployed, but when governments allow new landing zones. For the time being, we believe we're in the right place.

Rob Wiesenthal: Clearly, cities like Paris and London, and Los Angeles, those are gonna be big on the hit list, but those are ways off. You know, our focus is on today and tomorrow, but, you know, going to the point where not only EVA is certified and deployed but when governments allow new landing zones. For the time being, we believe we're in the right place.

Speaker Change: and the second phase of that will be new landing zones.

Speaker Change: Clearly cities like Paris and

Will Haver: The deposits had been booked in prepaid expenses, thus they were a source of cash and Q2 as we unlawned the pre-existing agreements and purchased seven of the aircraft outright. Excluding aircraft acquisitions in Q2 2024, cash of operations would have been a use of less than 1 million, with the Delta versus the adjusted EBITDA being driven primarily by working capital related to medicine, and Michael Grove. Our capital expenditures, which includes the capitalized software development costs, were 16.9 million in the quarter, were driven primarily by 14.6 million and total payments towards the first seven aircraft acquisitions.

Speaker Change: man

Speaker Change: Los Angeles, those are going to be big in the hit list, but those are a ways off. Our focus is on the today and the tomorrow, but going to the point where not only EBA is certified and deployed, but when governments allow new landings, for the time being, we believe we're in the right place.

Bill Peterson: Yeah, no, understood. The slide you have on the various forms of medical financial drivers and the margin, targeted margins, kind of applies. You see some, you know, pretty significant further upside in slight margins. But I guess, and you recognize there, this can be lumpy. You know, some maybe some quarters ground as heavier versus, you know, other parts.

Will Heyburn: Yeah, no, understood. The slide you have on the various forms of the medical financial drivers and the margin target margins kind of implies you see some pretty significant further upside and slight margins. But I guess, and you recognize this could be lumpy, you know, some maybe some quarters ground is heavier versus, you know, other parts. But how should we think about the trajectory of slight margins over the next sort of twelve, eighteen months, at least how you see the various parts of the market forming amongst their own ground, you know, urban placement and so forth.

Speaker Change: Yeah, no, understood. The slide you have on the various forms of the medical financial drivers and the margin, targeted margins,

Speaker Change: It kind of implies you see some pretty significant further upside and slight margins.

Speaker Change: But I guess, and I recognize this could be lumpy, you know, maybe some quarters ground is heavier versus, you know, other parts, but how should we think about the trajectory of flight margins over the, let's call it the next sort of 12 to 18 months, at least how you see the various

Rob Wiesenthal: But how should we think about the trajectory of slight margins over the, let's call it the next sort of 12, 18 months, at least how you see the various, you know, parts of the market forming amongst own ground, you know, urban places and so forth. Yeah, I mean, so most recently we set a goal for ourselves that were, you know, essentially about there to get to 25% slight margin in medical by the end of this year. So we're continuing to march towards that goal. But I think you see from the new slide that we added to the deck that a lot of the ways that we move this critical cargo, we're doing a much better flight margin than that.

Speaker Change: You know, parts of the market forming amongst own ground, you know, urban placement and so forth.

Will Heyburn: Yeah, I mean, we recently set a goal for ourselves that we're, you know, essentially about there to get to 25% flight margin in medical by the end of this year. So we're continuing to march towards that goal, but I think you can see from the new slide that we added to the deck that a lot of the ways that we move this critical cargo, we're doing a much better flight margin than that.

Analyst: Yeah, I mean, we recently set a goal for ourselves that we're, you know, essentially about there to get to 25% flight margin in medical by the end of this year. So, we're continuing to march towards that goal, but I think you can see from the new slide that we added to the deck that a lot of the ways that we move this critical cargo, we're doing a much better flight margin than that.

Will Haver: Looking ahead into the balance of the year, Q3 is up to a great start with solid growth in our seasonal short-distance businesses while medical remains strong. As such, we are reiterating our 2024 and 2025 financial guidance and we believe our first half, 2024 results puts us on very solid footing to achieve these targets. In medical, our first half, 2024 results, both in terms of revenue and segment agenda that we've got, came in above our expectations with sequential revenue growth averaging over 9 percent in the first two quarters of the year.

Speaker Change: Yeah, I mean, so most recently we set a goal for ourselves that we're...

Speaker Change: you know, essentially about there to get to 25% flight margin and medical by the end of this year. So we're continuing to march towards that goal. But I think you see from from the new slide that we added to the deck that a lot of the ways that we move this critical cargo

Analyst: So, I think you nailed it, Bill, to the extent that we can shift our mix a little bit more towards owned aircraft, continue to build that organ placement business, and then continue to see ground growing faster than the rest of the business. As we roll it out to more of our existing customers, revenue grew about 50% year over year, and this Q2, there's opportunities to go over time beyond the goal we set for this year.

Rob Wiesenthal: So I think you nailed it to build, to the extent we can shift our mix a little bit more towards owned aircraft, continue to build that urban placement business, and then continue to see ground growing faster than the rest of the business as we roll it out some more of our existing customers. Ground grew about 50% year over year, and this Q2, there's opportunities to go over time beyond the goal we set for this year.

Will Heyburn: So I think you nailed it, Bill, to the extent that we can shift our mix a little bit more towards owned aircraft, continue to build that organ placement business, and then continue to see ground growing faster than the rest of the business. As we roll it out to more of our existing customers, ground grew about 50% year over year in this Q2. There are opportunities to go over time beyond the goal we set for this year. Okay, yeah, thank you.

Speaker Change: We're doing a much better flight margin than that. So I think you nailed it, Bill, to the extent we can shift our mix a little bit more towards...

Speaker Change: owned aircraft, continued to build that organ placement business.

Will Haver: Most of the beat was driven by volumes that were well above the norm at the majority of our contracted transplant centers. In our experience, transplant volumes tend to be lumpy and periods of above average volumes often mean that our hospital customers need to rebuild their organ transplant recipient pipelines. Given this very strong performance in the first half of the year, we expect medical revenue and adjusted EBITDA to be flatish in Q3, relative to Q2, before resuming low single-digit sequential revenue growth.

Speaker Change: and then continue to see ground growing faster than the rest of the business as we roll it out some more of our existing customers ground group at fifty percent year over year and this q two there's opportunities to go over time beyond the goal we set for this year

Bill Peterson: Okay, yeah, thank you.

Analyst: Okay, yeah, thank you, and I'll get back into queue. Thanks.

Bill Peterson: Okay, yeah, thank you, and I'll get back in queue. Thanks.

Bill Peterson: And I'll get back into you.

Bill Peterson: Thanks.

Speaker Change: Okay, yeah, thank you, and I'll get back into queue. Thanks.

Operator: Thank you.

Jon Hickman: Our next question comes from John R. Hickman of Leidenburg Solman. Your line is now open.

Operator: Our next question comes from John R. Hickman of Leidenberg-Solomon. Your line is now open.

Speaker Change: Thank you.

Will Haver: In terms of year-to-year growth expectations, medical revenue grew 22 percent year-to-year in the first half of the year and we expect similar revenue growth in the second half of the year. In short-distance, we expect single-digit year-to-year revenue growth in the back half of the year excluding the impact of our Canada exit. Note that Canada contribute approximately 2 million and 3 million in revenue during Q3 and Q4 2023, respectively, which, depending on the exact time of our exit, may not reoccur.

Speaker Change: Our next question comes from John R. Hickman of Leidenberg-Solomon. Your line is now open.

Jon Hickman: Hi, can you hear me okay? Yeah. Okay.

Operator: Hi.

Speaker Change: Hi.

John R. Hickman: Okay, Will, could you elaborate a little more on the GNA cause? If you take out the write-offs for Canada, that puts your GNA at about 19 million. Is that the number you want us to go flat with for the rest of the year?

Analyst: Okay, Will, could you elaborate a little more on the GNA cause? If you take out the write-offs for Canada.

Will Haver: Will, could you elaborate a little more on the GNA? Because if you take out the bright off for Canada, that puts your GNA at about 19 million. Is that the number you want us to go flat with for the rest of the year? Which GNA or you, I would look on our earnings press release and you see we give you the non-GAAP financial results there in that second table. And so your total adjusted SGNA on that page 15 page for the quarter. So I would, if you're looking for a clean cash number, that's the number that I would go with, John.

Speaker Change: Can you hear me okay?

Speaker Change: Yeah.

Speaker Change: Okay. Will, could you elaborate a little more on the GNA cause?

Speaker Change: If you take out the write-off for Canada...

Speaker Change: So that puts your GNA at about 19 million. Is that the number you want us to go flat with for the rest of the year?

Will Haver: Yet another had a very strong Q2 2024, but the results are inherently volatile in this product line and we expect quarterly revenue to be in the $5 million range in the second half of the year. Paths under segment adjusted EBITDA should see further year-to-year improvements in both Q3 and Q4 2024. We expect adjusted unallocated corporate expenses to be flat down sequentially for the remainder of the year relative to Q2 2024.

Will Heyburn: Which, which DNA are you?

John R. Hickman: Which CNA are you? I would look at our earnings press release, and you see we give you the non-GAAP financial results there in that second table. And so your total adjusted SG&A on that page is $15.8 for the quarter. So if you're looking for a clean cash number, that's the number that I would go with, Jon.

Speaker Change: Which GNA are you, I would look on our earnings press release and you see we give you the non-GAAP financial results there in that second table and so your total adjusted SG&A on that page 15.8 for the quarter.

Speaker Change: So if you're looking for a clean cash number, that's the number that I would go with, Jon.

Jon Hickman: Okay.

Will Haver: I would also like to quickly highlight the updated and comprehensive investor presentation we published this afternoon. We've added detail around our growth and value creation strategy in both medical and passenger including the return profiles of our recent aircraft investments. We hope you find it useful.

Jon Hickman: And then could you guys elaborate a little bit on, I know you keep pretty close tabs on what's happening with EVAs. Could you, are you still thinking maybe those arrive sometime next year?

Jon: Okay, and then could you guys elaborate a little bit on, I know you keep pretty close tabs on what's happening with EVAs.

Speaker Change: Could you, are you still thinking maybe those arrive?

Rob Wiesenthal: With that, I'll turn it back over to Ron for a few closing remarks. Thanks, Will.

Rob Wiesenthal: Hi, it's Rob speaking.

Rob Wiesenthal: Hi, it's Rob speaking. Nice to hear from you, Jon.

Speaker Change: sometime next year.

Rob Wiesenthal: Before we turn it over for questions, I'd like to make a few brief comments regarding the current economic environment. Our company was designed specifically not just to weather an economic storm, but to thrive in one. The majority of our revenue and nearly all of our profit is generated by our organ transportation business where we provide an essential service supporting the life-saving activities of host. A key priority of the U.S, healthcare system that has historically been recession-proof.

Rob Wiesenthal: Nice to hear from you, John. The, with respect to the EVA, I mean, obviously, you know, we, while we speak to everybody, and I think we have good visibility into it, you know, you got to speak to the developers to their craft to get, you know, their best sense. But what we're seeing is, you know, a focus by the leaders, such as Joby and Archer, to focus on the Middle East.

Rob Wiesenthal: Hi, it's Rob speaking.

Rob Wiesenthal: With respect to the VA, I mean, obviously, you know, while we speak to everybody, and I think we have good visibility into it, you've got to speak to the..., developers of the aircraft to get their best sense. But what we're seeing is a focus by leaders such as Joby and Archer to focus on the Middle East. And so clearly, their first deployment will be there. That feels like 25, 26.

Rob Wiesenthal: Nice to hear from you, Jon. With respect to the VA, I mean, obviously, you know, while we speak to everybody, and I think we have a good visibility into it, you know, you've got to speak to the...

Rob Wiesenthal: developers of the aircraft to get, you know, their best sense.

Speaker Change: But what we're seeing is, you know, a focus by the leaders such as Joby and Archer.

Rob Wiesenthal: And so clearly, that, you know, their first deployment will be there that feels like 25, 26, you know, with respect to the US. I still think there's, there's hope for 26 in the US.

Rob Wiesenthal: This contractual business is the only area in which we have invested in aircraft ownership. Our passenger business serves a predominantly top-tier affluent consumer who has proven to be much more resilient in a recessionary environment and operates with zero aircraft ownership, making the cost structure highly flexible as evidenced by our consistent passenger flight profit performance during the pandemic. Irrespective of the recent market dislocation, we're halfway through the summer high season for our short business business, and we have seen no weakness.

Rob Wiesenthal: to focus on the Middle East.

Speaker Change: And so clearly their first deployment will be there, that feels like 25, 26, you know, with respect to the U.S., I still think there's hope for 26.

Rob Wiesenthal: With respect to the U.S., I still think there's hope for 26 in the U.S., and that will probably be a little bit more, call it exhibition style in terms of, you know, not the kind of missions, not the kind of volumes that you see us doing with conventional aircraft here in the U.S. and in Europe. And, most importantly, I think you're going to see a lag between when these aircraft are certified and available for commercial use and when new landing zones are available.

Rob Wiesenthal: And that will probably be a little bit more, call it exhibition style in terms of, you know, not the kind of missions, not the kind of violence that you see, you know, us doing with conventional aircraft here in the US and in Europe. And then, most importantly, I think you're going to see a lag, John, between when these aircraft are certified and available for commercial use and when new landing zones are available. And really to unlock electrical aircraft, you need to create those new landing zones. You know, the big markets with lots of traffic, where you really need that urban and mobility, are a bit locked out in terms of existing landing zones.

Speaker Change: in the U.S. and that will probably be a little bit more call it exhibition style in terms of, you know, not the kind of missions, not the kind of volumes that you see, you know, us doing with conventional aircraft here in the U.S. and in Europe .

Rob Wiesenthal: In fact, we've seen growth in Q3 today. In short, we believe we are extremely well-positioned for varying economic environments, and in fact, any market dislocation should create attractive opportunities for us to deploy our strong balance sheet for bolt-on acquisitions, investments in aircraft, and opportunistic share repurchases.

Speaker Change: And then most importantly, I think you're going to see a lag, John, between...

John: when these aircraft are certified.

Speaker Change: and available for commercial use and when new landing zones.

Rob Wiesenthal: And really, to unlock electric vertical aircraft, you need to create those new landing zones. You know, the big markets with lots of traffic where you really need that urban air mobility are a bit locked out in terms of existing landing zones. And it takes time, even in the EVA world, to get those kinds of permissions from all the various states.

Speaker Change: are available. And really to unlock electric vertical aircraft you need to create those new landing zones. You know the big markets with lots of traffic where you really need that urban air mobility are a bit locked out in terms of existing landing zones.

Jon Hickman: and it takes time, even an EVA world, to get those kinds of permissions from all the various stakeholders. Okay.

Speaker Change: And it takes time, even in the EVA world, to get those kind of permissions from all the various stakeholders.

Operator: I'll now turn it over to the operator for analyst questions. Thank you.

John R. Hickman: Okay, thanks. One last question.

Jon Hickman: One last question. Do you have a presence in the medical side of things in Canada, or just the US? It's just a US business. Okay. Thank you.

Speaker Change: Okay, thanks. One last question. Do you have a presence in the medical side of things in Canada?

Analyst: Okay, thanks. One last question. Do you have a presence on the medical side of things in Canada?

John R. Hickman: Do you have a presence on the medical side of things in Canada? For Just the U.S. It's just a U.S. business. Okay.

Rob Wiesenthal: It's just a U.S. business.

Speaker Change: or just the U.S.? It's just the U.S. business.

Jon Hickman: Thanks, Jon.

Analyst: Okay.

Speaker Change: Okay, thank you.

Operator: Thank you.

Mathew Schneider: This can be a long question session. I would like to turn it back to Mathew Schneider. Great. Now we'll take a few questions from the SAQ&A platform.

Operator: This concludes today's question session. I would like to turn it back to Mat Schneider.

Speaker Change: Thank you.

Jason Helfstein: Our first question comes from Jason Helstein of Oppenheimer & Co. Inc. Your line is now open. Hey, everybody. So a few questions. So now that you've edited Canada, I mean, basically, while there's no seasonality in it, like the passenger grows margin 25% we saw, that should generally, that should be like give or take the run rate going forward. So that's just going to question one. I guess there's probably still some seasonality, maybe what in first quarter, but you just maybe talk to that.

Mat Schneider: Great. Now we'll take a few questions from the Say Q&A platform. The first question is on the Marriott partnership, and will there be more partnerships like this? Rob, why don't you take that one?

Analyst: This concludes the Q&A session. I would like to turn it back to Mat Schneider.

Mat Schneider: Great, now we'll take a few questions

Mathew Schneider: The first question is on the Married Partnership, and will there be more partnerships like this?

Rob Wiesenthal: The first question is on the Marriott partnership, and will there be more partnerships like this? Rob, why don't you take that one?

Rob Wiesenthal: Rob, why don't you take that one? Sure. Very excited about the Married, actually the Married Luxury Group which includes hotels such as St. Regis, the Editions, the Risk Carlton. And so the ability, you know, we've talked about this before. You want to get, especially for airport, you want to get to your potential passengers at the moment of truth. And that moment of truth is booking. So the ability for someone to get a confirmation in the mail, once they've booked their hotel room, to say, hey, why don't you fly Blade and we'll help you take care of it and give you a special rate.

Rob Wiesenthal: I'm very excited about the Marriott Luxury Group, which includes hotels such as the St. Regis, the Edition, and the Ritz-Carlton. And so the ability, we've talked about this before, you want to get, especially for airports, you want to get to your potential passengers at the moment of truth. And that moment of truth is booking. So the ability for someone to get a confirmation in the mail once they've booked their hotel room to say, hey, why don't you fly Blade and we'll help you take care of it, we'll give you a special rate, what have you, and we'll make it easy for you, that's just a great catalyst for conversion because the next thing someone does after they've booked their hotel room is usually book their flight.

Speaker Change: Sure. Very excited about the Marriott. It's actually the Marriott Luxury Group, which includes hotels such as the St. Regis, the Edition, the Ritz-Carlton.

Speaker Change: And so the ability, you know, we've talked about this before, you want to get, especially for airport, you want to get to your potential passengers at the moment of truth. And that moment of truth is booking.

Rob Wiesenthal: So the ability for someone to get a confirmation in the mail once they've booked their hotel room to say, hey, why don't you fly Blade and we'll help you take care of it, we'll give you a special rate, what have you, and we'll make it easy for you. That's just a great catalyst for conversion because the next thing someone does after they've booked their hotel room is usually book their flight. So we're top of mind; we think we're gonna see great conversion there. And these are some of the best hotels in New York City.

Rob Wiesenthal: So the ability for someone to get a confirmation in the mail, once they've booked their hotel room to say, hey, why don't you...

Rob Wiesenthal: What have you? We'll make it easy for you. That's just a great catalyst for conversion because the next thing someone does after they've booked their hotel room is usually book their flight. So we're top of mind. We think we're going to see a great conversion there. And these are some of the best hotels in New York City. And, you know, it's a great rifle shot for our kind of, our high-end consumer for, you know, for airport, the same kind of consumer that would be a traveler that would be taking in over black.

Rob Wiesenthal: fly blade and help yyou take care of it give you a special rate what have you

Rob Wiesenthal: And we'll make it easy for you, that's just a great catalyst for conversion.

Rob Wiesenthal: So we're top of mind, we think we're gonna see great conversion there, and these are some of the best hotels in New York City, and it's a great rifle shot for our high-end consumer for the airport, the same kind of consumer that would be a traveler that would be taking an Uber Black. And I do think we'll see more partnerships like this in the future, both in travel and hospitality. I mentioned the Jeff Loo deal, I mentioned the interline agreement with Emirates, I mentioned Build Credit Card. I think we'll see other credit card deals. The more we can get in front of the customer, the more we can reach them when they're thinking about their travel, the more conversion we'll have, and then that's how we're gonna enjoy growth here.

Rob Wiesenthal: because the next thing someone does after they book their hoteler usually put their flights so we' top of mind we think 're going to see great conversion there and these are some of the best hotels

Rob Wiesenthal: And it's a great rifle shot for our high-end consumer for airports, the same kind of consumer that would be a traveler that would be taking an Uber Black. And I do think we'll see more partnerships like this in the future, both in travel and hospitality. I mentioned the JetBlue deal, I mentioned the Interline agreement with Emirates, I mentioned Build Credit Card. I think we'll see other credit card deals. The more we can get in front of the customer, the more we can get them when they're thinking about their travel, the more conversion we'll have. And then that's how we're gonna enjoy growth. Great.

Rob Wiesenthal: in New York City and you know it's a great rifle shot for a kind of our high end consumer for you know for airport the same kind of consumer that would be a traveler that would be taking

Will Haver: I'll take one and three there. You're correct on the 5.8 million that flow through TNA on the passenger side. On Canada, you know, as we mentioned, it was a loss-making business and it was pretty small. So don't think it'll have a particularly material impact, but if anything, flight profit margins could be a touch better. From a seasonality perspective, it was counter seasonal to the rest of our passenger businesses. So the bulk of that revenue flow through NQ1 and Q4.

Rob Wiesenthal: And I do think we'll see more partnerships like the future, both in travel and hospitality. I mentioned the Jeff Luzio. I mentioned the interline agreement with Ember. I mentioned Bill Credit Card. I think you'll see other credit card deals. The more we can get in front of the customer, the more we can get them when they're thinking about the travel, the more conversion we'll have. And then that's how we're going to enjoy growth here. Great.

Rob Wiesenthal: and Uber Black. And I do think we'll see more partnerships like the future, both in travel and hospitality. I mentioned the JetBlue deal. I mentioned the Interline agreement with Emirates. I mentioned Build Credit Card. I think you'll see other credit card deals.

Rob Wiesenthal: The more we can get in front of the customer, the more we can get them when they're thinking about their travel, the more conversion we'll have. And that's how we're going to enjoy growth here.

Mat Schneider: Great. I'm just going to take one more question from the platform because we addressed most of the questions on the call today already. The next question is on profitability. Will, why don't you take this one? The question is, what's the plan for achieving profitability, and what is the expected timeline?

Operator: We're just going to take one more question from the platform because we addressed most of the questions on the call today already. The next question is on profitability. Will, why don't you take this one? The question is, what's the plan for achieving profitability, and what is the expected timeline?

Will Haver: We're just going to take one more question from the platform because we addressed most of the questions on the call today already. The next question is on profitability.

Will Heyburn: greatwejust going to take a one more question from the platform because we addressed most of the questions on the call today already the next question is on profitabilities well one you take this one the question is what's the plan for achieving profitability and what is the expected timeline

Will Haver: Will, why don't you take this one? The question is, what's the plan for achieving profitability, and what is the expected timeline? Thanks, Matt. Well, we reaffirmed our guidance for a positive adjusted EBITDA year this year in 2024 and double-digit adjusted EBITDA next year in 2025. So that's the expected timeline. And the good news is we have a lot of different ways to get there, and we're firing on all cylinders across the board. And the medical business, you're seeing our flight profit margins expand as we continue to roll out the owned aircraft fleet and expand the size of our dedicated aircraft fleet.

Will Heyburn: Thanks, Matt. Well, we reaffirmed our guidance for a positive adjusted EBITDA year this year, in 2024, and double-digit adjusted EBITDA next year, in 2025. So that's the expected timeline, and the good news is we have a lot of different ways to get there, and we're firing on all cylinders across the board. And in the medical business, you're seeing our flight profit margins expand as we continue to roll out the owned aircraft fleet and expand the size of our dedicated aircraft fleet.

Will Heyburn: Thanks, Matt. Well, we reaffirmed our guidance for a positive adjusted EBITDA year this year in 2024 and double digit adjusted EBITDA next year in 2025. So that's the expected timeline.

Will Heyburn: and the good news is we have a lot of different ways to get there and we're firing on on all cylinders across the bookard

Will Heyburn: In the medical business, you're seeing our flight profit margins expand as we continue to roll out the owned aircraft fleet and expand the size of our dedicated aircraft fleet. And also, we're growing some of these high-margin ancillary services like ground and like our organ placement services that'll also help us add to the overall revenue base and the overall profitability of that business. And then, as Rob mentioned earlier, we're focused on profitability in the passenger business.

Will Heyburn: And also, we're growing some of these high-margin ancillary services like ground handling and like our organ placement services that will also help us add to the overall revenue base and the overall profitability of that business. And then, as Rob mentioned earlier, we're focused on profitability in the passenger business. For example, take something like Airport. We've continually optimized both in terms of our pricing and add-on options and the number of people that flow through that product to take it from last year when it was a negative flight profit business to this year when it's contributing positively to the flight profit line.

Will Haver: And also we're growing some of these high-margin and silvery services like ground and like our organ placement services that will also help us add to the overall revenue base and the overall profitability of that business.

Rob Wiesenthal: These are basically based on add-ons and also fair classes. So if you want to kind of travel on a budget, you know, you have ways of going for 195. Also, you saw an internal ideal with Emirates. That's terrific because now I'm in the GDS system and when you're booking, if you want to fly anywhere in the world, where Emirates flies to Monaco, your last leg will automatically be a blade helicopter if you so choose.

Will Haver: And then, as Rob mentioned earlier, we're focused on profitability in the passenger business. Take something like airport. We've continually optimized both in terms of our pricing and add-on options and the number of people that flow through that product to take it from last year when it was a negative flight profit business to this year when it's contributing positively to the flight profit line. Europe improved in Q2 year over year, and you're seeing our discipline as we exit unprofitable routes and focus on our core where we see long-term path to sustainable profits. Global growth.

Will Heyburn: take something like Airport. We've continually optimized both in terms of our pricing and add-on options and the number of people that flow through that product to take it from last year when it was a negative flight profit business to this year when it's contributing positively to the flight profit line. Europe improved in Q2 year over year. And you're seeing our discipline as we exit unprofitable routes and focus on our core where we see long-term paths to sustainable profitable.

Rob Wiesenthal: So we're hoping for more of these types of interline deals. We have two more kind of hopefully coming. We also did a deal with the built credit card, which has been driving a lot of traffic in the New York area where people who pay rent, you know, get to use a flight bank, purchase five builds. Again, these are all paid for. And then also, you know, we had hotel deals with Marriott.

Will Heyburn: Europe improved in Q2 year over year, and you're seeing our discipline as we exit unprofitable routes and focus on our core, where we see long-term paths to sustainable profit. I think the one thing I would just like to add to Will's comments: the fastest way to profitability is not only growth, but making tough decisions quickly. And not only are we doing that with Canada, we're doing that with SG&A, we're focusing on our core markets, and really just making sure that we're focusing on where we are most competitive in certain areas where we have zero competition, where we have pricing power, and expanding on the base that we have where we know we're as bulletproof as possible. That's how we're going to get to profitability quickly, and I'm really pleased not only with this quarter but with the trajectory that we're on.

Rob Wiesenthal: I think the one thing I just would like to add to Will's comments: the fastest way to profitability is not only growth, but it's making tough decisions quickly. And not only did we do that with Canada, we're doing that with SGNA, we're focusing on our core markets, and really just making sure that we're focusing on where we are most competitive in certain areas where we have zero competition, where we're pricing power, and expanding on the base that we have, where we know where as bullet proof is possible. That's how we're going to get to profitability quickly, and I'm really pleased not only with this quarter but on the trajectory that we're at.

Operator: Roach.

Speaker Change: I think the one thing I just would like to add to Will's comments...

Rob Wiesenthal: We're on your conformations for the same region. The addition, which is called everybody getting an opportunity to fly your report. And then also, on our leisure routes, specifically in Long Island, you know, we push really hard on things outside of East Hampton, Jason, where we're seeing good growth from places like South Hampton and Stag Harbor.

Will Heyburn: The fastest way to profitability is not only growth, but it's making tough decisions quickly.

Will Heyburn: And not only did we do that with Ocana, we're doing that with SG&A, we're focusing on our core markets.

Will Heyburn: and really just making sure that we're doing, we're focusing on where we are most competitive in certain areas where we have zero competition, where we have pricing power and expanding on the base that we have, where we know where as bulletproof as possible. That's how we're going to get to profitability quickly and I'm really pleased not only with this quarter but on the trajectory that we're at.

Rob Wiesenthal: So I think, you know, overall, I feel good about it, both in terms of pricing, both in terms of customer acquisition, and also on the growth of new routes. And just one follow-up, just any comment, just broadly, people are a little more, I think, a little more concerned about the olive for the consumer. Obviously, you know, on your consumer side, it's a more Apple consumer, but anything to tell you that like your customers are pulling back or kind of no change.

Rob Wiesenthal: I think it's a great way to end the call. Rob, I'll just turn it over to you for any closing remarks.

Rob Wiesenthal: I think it's a great way to end the call.

Mat Schneider: I think it's a great way to end the call. Rob, I'll just turn it over to you for any closing remarks. No, I think that those...

Mathew Schneider: Rob will just turn over to you for any closing remarks. No, I think that those are my closing remarks. I would just say we appreciate the time. We also encourage all investors, large and small, to reach out to us if you want to have calls. You want to have questions via email. So we had investors at Blade.com. We really do look forward to working with you and helping you understand our company because we're, and hopefully getting you as excited better as we are as excited about our future. So thank you for your time, and we'll speak to you next quarter.

Rob Wiesenthal: Now, I think that those are my new...

Mat Schneider: I think it's a great way to end the call. Rob, I'll just turn it over to you for any closing remarks. No, I think that those are my closing remarks. I would just say we appreciate the time. We also encourage all investors, large and small, to reach out to us if you want to have calls, you want to...

Rob Wiesenthal: I would say, you know, July was very sexually strong for us on the short-distance side. So we have not seen anything yet. I would say on the leisure side, I really view us as kind of, if you look to the luxury brands, the ones that did not see, kind of any kind of, you know, deterioration, I kind of put our leisure market on in that category, you know, but when you think about airport, you know, obviously, you know, we're competing with Uber. Uber blacks are very expensive right now. Haven't seen it yet. Still seeing, you know, decent growth. But, you know, we're keeping our eyes open like everybody else. Thank you.

Speaker Change: If you have questions via email, email us at investorsatblade.com, we really do look forward to working with you and helping you understand our company and hopefully getting you as excited about it as we are as excited about our future. So thank you for your time and we'll speak to you next quarter.

Operator: Thank you for your presentation and space conference. This does improve the program.

Operator: You may now be back.

Speaker Change: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Will Haver: Our next question is coming from Edison U of Doishbank. Your line is now open. Hey, thank you for taking our questions and congratulations on the strong quarter. First one is, it sounded as if, you know, the return profiles are quite strong for the aircraft you're buying and even on the ground. You have some sense of how much more you would consider kind of bringing on board until where that maybe doesn't make sense anymore.

Will Haver: Just curious, you know, how much more leverage we can probably, we can potentially get out of it. You're right, Edison. We're seeing great returns from the aircraft, and we do see an opportunity to expand that program. We're always going to be an asset of life business, but if you saw on our new investor debt, only about 10% of our total flying in the 2024 period is expected to be using those new aircraft that we own.

Will Haver: So we think we have a fair amount of room to continue to expand that program, and you're paying back the aircraft in three years or less. On the ground side, we're proceeding with a hub model. So we're looking at areas where we have the right amount of density to own our own vehicles, and then we're paying them back and less than a year. So you'll see it's continued to add those vehicles, obviously smaller ticket price, so you're not going to see as much of an impact to the P&L, but still very accretive investments on both fronts.

Will Haver: So I think low single digit number of aircraft is something you could expect as incremental ads coming up over the next six to 12 months, is probably what I would think about there. And I said also, I think in your remarks, you said Europe was actually pretty, pretty strong, maybe I heard wrong, like in the teens growth. Do you expect that to be strong in the second half to continue to do well in the second half?

Will Haver: What Europe is, we're pleased with how it went in Q2, as you know, about 50% of that business happens in Q3. So we got to see how the summer goes, but we're happy with the operational turnaround that we've done. We're happy with the growth that we've seen both in Q2 and the growth that we've seen for the parts of the year that have come through, but there's a big part of the season that's left to come, so we'll reserve come until we get through that season like this is period. Gotcha.

Will Haver: And just last one on the buyback, I sort of missed, I think the second part you had mentioned, you bought, I think 80,000 shares back, but you also changed something with the RS, you can just go over that again, I didn't quite catch all of it. Yes, so we had two ways to kind of remove shares from the float. We have the $20 million buyback authorization, which we did use during the period to refer to about 80,000 shares.

Will Haver: But separately from that, we changed our tax withholding method for employee stock units to withhold for cover. So essentially what happens there is when employees have stocked that that's instead of selling those shares to cover the taxes, we take them from the employees and we pay the taxes directly off the balance sheet. So it's essentially the same kind of mechanism and we use that to eliminate another 332,000 shares for about a million dollars during this quarter. Does that make sense? Yeah, okay, gotcha, gotcha. Great, thanks a lot for the insights. Yep, thanks, that's it.

Bill Peterson: Thank you. Our next question comes from Bill Peterson of JP Morgan, your line is now open. Yeah, I get up your name and thanks to taking the questions and a nice job on the quarterly execution.

Rob Wiesenthal: On the Canada exit, I think it's understandable, but I guess what would you say your learnings are from this, you know, clearly there was this excitement about acquiring this a few years ago, how would you apply this to potentially, you know, future acquisitions in North America or globally, and maybe to that point, do you see any attractive markets, would you consider earning any markets? So I guess the head of EVA in order to sort of send off competition.

Rob Wiesenthal: Sure, Rob speaking, I think this was a unique situation in the sense that when we did this deal, it was during COVID, and we do that the bulk of the flyers were essentially government workers going between Vancouver and Victoria Victoria being kind of almost like the Washington DC of the province. And we were confident at the time that there would be a recovery to kind of back to work, and what actually happened was they didn't go back to work, the meetings largely became unzoom, this business did not have a tourist business, tourism business in terms of people who were called leisure travelers, but the business traveler, and they were unduly hurt by this.

Rob Wiesenthal: We gave it some time and for to recover, and frankly, we don't have any confidence that those meetings which were previously in person by the governor coming back, they just it's been a long slog in Canada in terms of back to work, you don't see the same kind of reaction post pandemic there that you do see here. So what we did was we acted quick, and we made a really tough decision and said, this is not profitable, we got to focus on our core markets, this is tertiary, but let's structure this in a way that when EVA is here, and it becomes economically viable to return to this market possibly for leisure, and having more landing zones, we retain that option to get back in the market.

Rob Wiesenthal: Our focus is on profitability, and right now we're not going to sit and wait for the unknown, and frankly, we have so much capability here in North America and Europe which are the premier markets for us to operate in, that I think that's where we're best served. Both accelerating our path to profitability, but also maintaining our ability to really focus on these key markets, and to your final part of the question, which is where else can you do this.

Rob Wiesenthal: We've been steadfast in saying to all people, I mean to all investors, that these are the markets that make sense, you need markets that are either congested or geographically contested, and those markets aren't New York and Southern New York. I think the idea of flying between cities and places like for the time being like Dallas or Orlando between the airport downtown where you just don't have the friction that you have in places like New York and Europe.

Rob Wiesenthal: It's going to be ways off, you're going to require new landing zones. That's really where it is. I think when EVA is here, electronic repair aircraft, and the second phase of that will be new landing zones, clearly cities like Paris and London, Los Angeles, those are going to dig in the hit list, but those are ways off. Our focus is on the today, but Anna tomorrow, going to the point where not only EVA is certified and deployed, but when governments allow new landing zones for the time being, we believe we're in the right place. Yeah, no, understood.

Rob Wiesenthal: The slide you have on the various forms of medical financial drivers and the margin, targeted margins, kind of applies you see some, you know, pretty significant further upside in slight margins. But I guess, and you recognize there, this can be lumpy, you know, some, maybe some quarters ground as heavier versus, you know, other parts. But how should we think about the trajectory of slight margins over the, let's call it the next sort of 12, 18 months, at least how you see the various, you know, parts of the market forming amongst own ground, you know, urban places and so forth.

Rob Wiesenthal: Yeah, I mean, so most recently we set a goal for ourselves that were, you know, essentially about there to get to 25% slight margin in medical by the end of this year. So we're continuing to march towards that goal. But I think you see from the new slide that we added to the deck that a lot of the ways that we move this critical cargo, we're doing a much better flight margin than that.

Rob Wiesenthal: So I think you nailed it to build, to the extent we can shift our mix a little bit more towards owned aircraft, continue to build that urban placement business and then continue to see ground growing faster than the rest of the business as we roll it out some more of our existing customers. Ground grew about 50% year over year and this Q2, there's opportunities to go over time beyond the goal we set for this year. Okay, yeah, thank you. And I'll get back into you. Thanks.

Jon Hickman: Thank you. Our next question comes from John R. Hickman of Leidenburg Solman. Your line is now open. Hi, can you hear me okay? Yeah. Okay.

Rob Wiesenthal: Will, could you elaborate a little more on the the GNA because if you take out the bright off for Canada, that puts your GNA at about 19 million. Is that the number you want us to go flat with for the rest of the year? Which GNA or you, I would look on our earnings press release and you see we give you the non-gap financial results there in that second table. And so your total adjusted SGNA on that page 15 page for the quarter.

Rob Wiesenthal: So I would, if you're looking for a clean cash number, that's the number that I would go with, John. Okay. And then could you guys elaborate a little bit on, I know you keep pretty close tabs on what's happening with EVAs. Could you, are you still thinking maybe those arrive sometime next year? Hi, it's Rob speaking. Nice to hear from you, John. The, with respect to the EVA, I mean, obviously, you know, we, while we speak to everybody, and I think we have good visibility into it, you know, you got to speak to the developers to their craft to get, you know, their best sense.

Rob Wiesenthal: But what we're seeing is, you know, a focus by the leaders, such as Joby and Archer, to focus on the Middle East. And so clearly, that, you know, their first deployment will be there that feels like 25, 26, you know, with respect to the US. I still think there's, there's hope for 26 in the US. And that will probably be a little bit more, call it exhibition style in terms of, you know, not the kind of missions, not the kind of violence that you see, you know, us doing with conventional aircraft here in the US and in Europe.

Rob Wiesenthal: And then most importantly, I think you're going to see a lag, John, between when these aircraft are certified and available for commercial use and when new landing zones are available. And really to unlock electrical aircraft, you need to create those new landing zones. You know, the big markets with lots of traffic, where you really need that urban and mobility are a bit locked out in terms of existing landing zones, and it takes time, even an EVA world, to get those kind of permissions from all the various stakeholders. Okay.

Rob Wiesenthal: One last question. Do you have a presence in the medical side of things in Canada or just the US? It's just a US business. Okay. Thank you. Thanks, Jon. Thank you.

Rob Wiesenthal: This can be a long question session. I would like to turn it back to Mathew Schneider. Great. Now we'll take a few questions from the SAQ&A platform. The first question is on the Married Partnership and will there be more partnerships like this? Rob, why don't you take that one? Sure. Very excited about the Married, actually the Married Luxury Group which includes hotels such as St. Regis, the Editions, the Risk Carlton. And so the ability, you know, we've talked about this before, you want to get, especially for airport, you want to get to your potential passengers at the moment of truth.

Rob Wiesenthal: And that moment of truth is booking. So the ability for someone to get a confirmation in the mail, once they've booked their hotel room to say, hey, why don't you fly Blade and we'll help you take care of it and give you a special rate. What have you? We'll make it easy for you. That's just a great catalyst for conversion because the next thing someone does after they've booked their hotel room is usually booked their flight.

Rob Wiesenthal: So we're top of mind. We think we're going to see a great conversion there. And these are some of the best hotels in New York City. And, you know, it's a great rifle shot for our kind of, our high-end consumer for, you know, for airport, the same kind of consumer that would be a traveler that would be taking in over black. And I do think we'll see more partnerships like the future, both in travel and hospitality.

Rob Wiesenthal: I mentioned the Jeff Luzio. I mentioned the interline agreement with Ember. I mentioned Bill credit card. I think you'll see other credit card deals. The more we can get in front of the customer, the more we can get them when they're thinking about the travel, the more conversion we'll have. And then that's how we're going to enjoy growth here.

Rob Wiesenthal: Great.

Will Haver: We're just going to take one more question from the platform because we addressed most of the questions on the call today already. The next question is on profitability. Will, why don't you take this one? The question is, what's the plan for achieving profitability and what is the expected timeline? Thanks, Matt. Well, we reaffirmed our guidance for a positive adjusted EBITDA year this year in 2024 and double digit adjusted EBITDA next year in 2025.

Will Haver: So that's the expected timeline. And the good news is we have a lot of different ways to get there and we're firing on all cylinders across the board. And the medical business, you're seeing our flight profit margins expand as we continue to roll out the owned aircraft fleet and expand the size of our dedicated aircraft fleet. And also we're growing some of these high margin and silvery services like ground and like our organ placement services that will also help us add to the overall revenue base and the overall profitability of that business.

Will Haver: And then as Rob mentioned earlier, we're focused on profitability in the passenger business. Take something like airport. We've continually optimize both in terms of our pricing and add-on options and the number of people that flow through that product to take it from last year when it was a negative flight profit business to this year when it's contributing positively to the flight profit line. Europe improved in Q2 year over year and you're seeing our discipline as we exit unprofitable routes and focus on our core where we see long-term pass to sustainable profits.

Will Haver: Global Growth. I think the one thing I just would like to add to Will's comments, the fastest way to profitability is not only growth but it's making tough decisions quickly. And not only did we do that with Canada, we're doing that with SGNA, we're focusing on our core markets, and really just making sure that we're focusing on where we are most competitive in certain areas where we have zero competition, where we're pricing power, and expanding on the base that we have, where we know where as bullet proof is possible. That's how we're going to get to profitability quickly and I'm really pleased not only with this quarter but on the trajectory that we're at.

Rob Wiesenthal: I think it's a great way to end the call. Rob will just turn over to you for any closing remarks. No, I think that those are my closing remarks. I would just say we appreciate the time. We also encourage all investors large and small to reach out to us if you want to have calls. You want to have questions via email. So we had investors at blade.com. We really do look forward to working with you and helping you understand our company because we're, and hopefully getting you as excited better as we are as excited about our future. So thank you for your time and we'll speak to you next quarter. Thank you for your presentation and space conference. This does improve the program.

Operator: You may now be back.

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