Q2 2024 Volato Group Inc Earnings Call

i

Operator: before the earnings conference call. If anyone today should require operator assistance during the call, please press star zero from your telephone keypad.

Good morning and welcome to the Volato Group's second quarter 2024 earnings conference call. If anyone today should require operator assistance during the call, please press star zero from your telephone keypad. I would now like to turn the call over to Jonathan Yohannan, Director of Communications.

Jonathan Yohannan: I would now like to turn the call over to Jonathan Yohannan, Director of Communications. Thank you, operator. Good morning, everyone, and welcome to the Volato conference call. Our press release was issued this morning and can be found in the investors section of our corporate website, FlyValato.com. Joining me on the call today is Matt Liotta, our Chief Executive Officer, and Mark Heinen, our Chief Financial Officer. During today's call, we will provide a business update and a financial overview of the second quarter of 2024. Q&A session.

Jonathan: Good morning, everyone, and welcome to the Volato conference call. Our press release was issued this morning and can be found in the Investors section of our corporate website, flyvolato.com. Joining me on the call today is Matliota, our Chief Executive Officer, and Mark Heinen, our Chief Financial Officer. During today's call, we will provide a business update and a financial overview of the second quarter, 2024.

Jonathan Johannon: Thank you operator, morning everyone, and welcome to the Volato Conference call. Our press release was issued this morning and can be found in the investor section of our corporate website, flyvilato.com.

Speaker Change: Joining me on the call today is Matt Liotta, our Chief Executive Officer, and Mark Heinen, our Chief Financial Officer. During today's call, we will provide a business update and a financial overview of the second quarter 2024. A Q&A session will follow our prepared remarks.

Jonathan: A Q&A session will follow our prepared remarks.

Jonathan: Before we begin, I would like to remind everyone that any statements we make or information presented on this call that are not historical facts are forward-looking statements that are based on our current beliefs, plans, expectations, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from those indicated or implied by such statements. Such risks and other factors are set forth in the company's most recently filed periodic report on Form 10-K and subsequent filings.

Jonathan Yohannan: We'll follow our prepared remarks. Before we begin, I would like to remind everyone that any statements we make or information presented on this call that are not historical facts are forward-looking statements that are based on our current beliefs, plans, and expectations and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from those indicated or implied by such statements. Such risks and other factors are set forth in the company's most recently filed periodic report on Form 10-K and subsequent filings. The company does not undertake any duty to update such forward-looking statements.

Speaker Change: Before we begin, I would like to remind everyone that any statements we make or information presented on this call that are not historical facts are forward-looking statements.

Speaker Change: that are based on our current beliefs, plans, expectations, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Speaker Change: Such statements are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from those indicated or implied by such statements.

Speaker Change: Such risks and other factors are set forth in the company's most recently filed periodic report on Form 10-K and subsequent filings.

Jonathan: The company does not undertake any duty to update such forward-looking statements.

Jonathan Yohannan: Additionally, during today's call, management will discuss non-GAAP measures which it believes can be useful in evaluating the company's performance. However, the presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with US GAAP. The reconciliation of these non-GAAP measures made to the most comparable GAAP measure can be found in the company's earnings release. I'd now like to turn the call over to our Chief Executive Officer, Matt Liotta. Thank you, Jonathan, and good morning, everyone.

Jonathan: Additionally, during today's call, management will discuss non-GAAP measures, which it believes can be useful in evaluating the company's performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with U.S. GAP. The reconciliation of these non-GAAP measures made to the most comparable GAAP measure can be found in the company's earnings release.

Speaker Change: The company does not undertake any duty to update such forward-looking statements.

Speaker Change: Additionally, during today's call, management will discuss non-GAAP measures which it believes can be useful in evaluating the company's performance.

Speaker Change: The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with the U.S. GAAP.

Speaker Change: The reconciliation of these non-GAAP measures made to the most comparable GAAP measure can be found in the company's earnings release. I'd now like to turn the call over to our Chief Executive Officer, Matt Liotta.

Matt Lyota: I'd now like to turn the call over to our Chief Executive Officer, Matt Lyota. Thank you, Jonathan, and good morning, everyone. I'll start with some updates on our business before going over our first quarter results. Later, our CFO, Martinine, will provide more details on our financials.

Matt Liotta: I'll start with some updates on our business before going over our first quarter results. Later, our CFO, Mark Conant, will provide more details on our finances. We are excited to announce the delivery of our first GallStream G280 last week and start a multi-city tour where potential buyers will be able to get a first-hand look at the aircraft and purchase fractional shares. We've had great traction so far and are looking forward to finishing up the tour later this week.

Matt Liotta: Thank you Jonathan and good morning everyone. I'll start with some updates on our business before going over our first quarter results. Later our CFO Mark Hannon will provide more details on our financials.

Matt Lyota: We are excited to announce the delivery of our first call stream G280 last week. We started a multi-city tour where potential buyers will be able to get a firsthand look at the aircraft and purchase fractional shares. We've had great traction so far and are looking forward to finishing up the tour later this week.

Speaker Change: We are excited to announce the delivery of our first Gulfstream G280 last week. We started a multi-city tour where potential buyers will be able to get a first-hand look at the aircraft and purchase fractional shares.

Speaker Change: We've had great traction so far and are looking forward to finishing up the tour later this week.

Matt Lyota: During the second quarter, OEM supply chain delays continue to impact the timing of our previously announced aircraft deliveries, but we have taken steps to reduce costs and increase liquidity. In early Q3, we closed a $4 million term loan, and we continue to evaluate additional sources of liquidity to support working capital and growth ahead of our remaining aircraft deliveries in 2024 and beyond. While we did not take delivery of any aircraft in the second quarter as supply chain issues waned, so far in Q3, we have taken the delivery of one Honda jet in addition to the one G280 I mentioned previously.

Matt Liotta: During the second quarter, OEM supply chain delays continued to impact the timing of our previously announced aircraft deliveries, but we have taken steps to reduce costs and increase liquidity. In early Q3, we closed a $4 million term loan, and we continue to evaluate additional sources of liquidity to support working capital and growth ahead of our remaining aircraft deliveries in 2024 and beyond. While we did not take delivery of any aircraft in the second quarter as supply chain issues waned, so far in Q3, we have taken delivery of one HondaJet in addition to the one G280 I mentioned previously. Based upon this progress in deliveries, we still expect to take delivery of 8 to 10 HondaJets and 2 G280s total in 2024.

Speaker Change: During the second quarter, OEM supply chain delays continue to impact the timing of our previously announced aircraft deliveries, but we have taken steps to reduce costs and increase liquidity.

Speaker Change: In early Q3, we closed a $4 million term loan, and we continue to evaluate additional sources of liquidity to support working capital and growth ahead of our remaining aircraft deliveries in 2024 and beyond.

Speaker Change: While we did not take delivery of any aircraft in the second quarter, as supply chain issues waned, so far in Q3, we have taken delivery of one HondaJet in addition to the one G280 I mentioned previously.

Matt Lyota: Based on this progress in deliveries, we still expect to take delivery of 8-10 Honda Jet and two G280s total in 2024. Despite challenges in the timing of deliveries, we saw strong growth in key performance indicators, including total flight hours, blended yields, and a year-over-year improvement in our empty percentage. Total flight hours grew 5% year-over-year, and blended yields improved 6% as non-owner demand increased to 56%. As a reminder, we are on a higher rate on non-owner flights, so as non-owner mixed increases, it helps support our possibility. As we expand our floating fleet, we are able to better serve owner demand while also driving non-owner usage through increased availability, and we achieve these results while maintaining world-class net promoters for 86.

Speaker Change: Based upon this progress in deliveries, we still expect to take delivery of 8 to 10 HondaJets and 2 G280s total in 2024.

Matt Liotta: Despite challenges in the timing of deliveries, we saw strong growth in key performance indicators, including total flight hours, blended yield, and a year-over-year improvement in our empty percentage. Total flight hours grew 5% year-over-year, and blended yield increased 6% as non-owner demand increased to 56%. As a reminder, we earn a higher rate on non-owner flights, so as non-owner mix increases, it helps support our profitability. As we expand our floating fleet, we are able to better serve owner demand while also driving non-owner usage through increased availability, and we achieve these results while maintaining a world-class Net Promoter Score of 86.

Speaker Change: Despite challenges in the timing of deliveries, we saw strong growth in key performance indicators including total flight hours, blended yields, and a year-over-year improvement in our empty percentage.

Speaker Change: Total flight hours grew 5% year-over-year and blended yield increased 6% as non-owner demand increased to 56%.

Speaker Change: As a reminder, we earn a higher rate on non-over flights, so as non-over mix increases, it helps support our profitability.

Speaker Change: As we expand our floating fleet, we are able to better serve owner demand while also driving non-owner usage through increased availability, and we achieve these results while maintaining a world-class Net Promoter Score of 86.

Matt Lyota: I also want to look at our empty percentage increase of 3.5% year-over-year. Our floating fleet flexibility enables us to have an empty percentage of 36.1% in line with industry leaders.

Matt Liotta: I also want to look at our empty percentage, which improved 3.5% year over year. Our floating fleet's flexibility enables us to have an empty percentage of 36.1%, in line with industry leaders. Our product offering that enables us to monetize entry-level flights is seeing great progress and reached an ARR of $1 million for the first time during the quarter. Vaunt is a subscription-based mobile app that allows users to subscribe for $1,000 per year and access unlimited empty leg flights at no additional cost.

Speaker Change: I also want to look at our empty percentage, which improved 3.5% year over year. Our floating fleets flexibility enables us to have an empty percentage of 36.1% in line with industry leaders.

Matt Lyota: Bounce, our product offering that enables us to monetize into the flight, is seeing great progress and reach an ARR of 1 million for the first time during the quarter. Bounce is a subscription-based mobile app that allows users to subscribe for a thousand dollars per year and access unlimited empty lake flights at no additional cost. The program is a great way to drive the current revenue and monetizing 16 flights that would not be able to otherwise, while reaching an expanded set of customers who may not otherwise consider flying private.

Speaker Change: Our product offering that enables us to monetize our dual leg flights is seeing great progress and reached an ARR of $1 million for the first time during the quarter.

Speaker Change: Vaunt is a subscription-based mobile app that allows users to subscribe for $1,000 per year and access unlimited empty leg flights at no additional cost.

Mark Heinen: The program is a great way to drive recurring revenue and monetize existing flights that would not be able to otherwise, while reaching an expanded set of customers who may not otherwise consider flying private. Overall, I'm satisfied with our achievements in the second quarter and the strides we've made in strengthening our cash position and expanding our fleet since the quarter ended. I'd also like to welcome two new members of our leadership team who joined during the quarter and are great assets to our company.

Speaker Change: The program is a great way to drive the current revenue and monetize the existing flights that would not be able to otherwise, while reaching an expanded set of customers who may not otherwise consider flying private.

Matt Lyota: Overall, I'm satisfied with our achievements in the second quarter and the strides we've made in strengthening our cast position and expanding our fleet since the quarter ended. I'd also like to welcome two new members of our leadership team who joined during the quarter and are great assets to our company. Mark Oznick, who is the head of our aircraft management company division, and Luis Garcia are new EVP-assailed. They are an excellent addition to the team and are already adding value to the business.

Operator: Thank you, Operator.

Speaker Change: Overall, I'm satisfied with our achievements in the second quarter and the strides we've made in strengthening our cast position and expanding our fleet since the quarter ended.

Operator: Good morning, everyone, and welcome to the Volato conference call. Our press release was issued this morning and can be found in the Investors section of our corporate website, flyvolato.com.

Mark Heinen: Mark Osnick, who is the head of our Aircraft Management Division, and Luis Garcia, our new EVP of sales. They are an excellent additions to the team and are already adding value to the business. Looking ahead, Volato is positioned for success and future growth as we move towards profitability by executing on our strategy and taking advantage of the significant market opportunity that private aviation represents. I will now turn it over to Mark for you to sign.

Speaker Change: I'd also like to welcome two new members of our leadership team who joined during the quarter and are great assets to our company. Mark Osnick, who is the head of our aircraft management division, and Luis Garcia, our new EVP of sales.

Operator: Joining me on the call today is Matliota, our chief executive officer and Mark Heinen, our chief financial officer. During today's call, we will provide a business update and a financial overview of the second quarter, 2024.

Operator: A Q&A session will follow our prepared remarks. Before we begin, I would like to remind everyone that any statements we make or information presented on this call that are not historical facts are forward-looking statements that are based on our current beliefs, plans, expectations, and are made pursuant to the safe harbor provisions of the Private Security's litigation reform act of 1995. Such statements are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from those indicated or implied by such statements. Such risks and other factors are set forth in the company's most recently filed periodic report on form 10K and subsequent filings. The company does not undertake any duty to update such forward-looking statements.

Matt Lyota: Looking ahead, a lot of its position for success and future growth as we move towards profitability by executing on our strategy and taking advantage of the significant market opportunity that private aviation represents.

Speaker Change: They are an excellent addition to the team and are already adding value to the business. Looking ahead, Volato is positioned for success and future growth as we move towards profitability by executing an unarmed strategy and taking advantage of the significant market opportunity that private aviation represents.

Mark Heinen: I will now turn it over to Mark for review of our finances.

Mark Heinen: Thank you, Matt. Good morning, everyone. As Matt mentioned, Q2 was a strong quarter for Volato with improvements across our key performance indicators. These results, combined with the funding received from the term loan we signed in early Q3, position for continued growth while progressing toward EBITDA profitability, which we expect by the fourth quarter of this year. Looking at our Q2 results, revenue was 15.1 million, a 16% year-over-year increase. Aircraft usage revenue grew 28% to 12.5 million as we grew the higher margin non-owner-demand mix. Enabled by the expansion of our floating plea from 18 to 25-hoget since Q2 of 2023.

Mark Heinen: Thank you, Matt, and good morning, everyone. As Matt mentioned, Q2 was a strong quarter for Volato with improvements across our key performance indicators. These results, combined with the funding received from the term loan we signed in early Q3, position us for continued growth while progressing toward EBITDA profitability, which we expect by the fourth quarter of this year. Looking at our Q2 results, revenue was $15.1 million, a 16% year-over-year increase. Aircraft usage revenue grew 28% to $12.5 million as we grew the higher-margin, non-owner-demand mix, enabled by the expansion of our floating fleet from 18 to 25 Holland jets since Q2 of 2023.

Speaker Change: I will now turn it over to Mark for a review of our financials.

Mark Hannon: Thank you, Matt, and good morning, everyone.

Mark Hannon: As Matt mentioned, Q2 was a strong quarter for Volato with improvements across our key performance indicators.

Mark Hannon: These results, combined with the funding received from the term loan we signed in early Q3, position us for continued growth while progressing toward EBITDA profitability, which we expect by the fourth quarter of this year.

Speaker Change: Looking at our Q2 results, revenue was $15.1 million, a 16% year-over-year increase.

Operator: Additionally, during today's call, management will discuss non-GAP measures, which it believes can be useful in evaluating the company's performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with U.S. GAP. The reconciliation of these non-GAP measures made to the most comparable GAP measure can be found in the company's earnings release.

Speaker Change: Aircraft usage revenue grew 28% to 12.5 million as we grew the higher margin non-owner demand mix enabled by the expansion of our floating fleet from 18 to 25 our heart of jet since Q2 of 2023.

Mark Heinen: Growth in flight hours and non-owner demand has also driven a 6% improvement in our blended yield to 5,330 this quarter, compared with 5,042 in Q2 of 2023. Looking at expenses, SG&A for the second quarter was 9.7 million compared to 6.1 million in the second quarter of 2023. The increase in expenses was driven by the cost of being a publicly traded company. Sequentially, SGNA declined to 9.7 million in the current quarter from 11.7 million in the first quarter of 2024, or 17%. As a result of these cost saving measures introduced in the second quarter. Net loss for the quarter was 16.9 million compared to a net loss of 9.9 million in Q2 of 2023.

Speaker Change: Growth in flight hours and non-owner demand has also driven a 6% improvement in our 1-Egeal to 5,330 this quarter, compared with 5,042 in Q2 of 2023.

Mark Heinen: Growth in flight hours and non-owner demand has also driven a 6% improvement in our blended yield to 5,330 this quarter, compared with 5,042 in Q2 of 2023. Looking at expenses, SG&A for the second quarter was $9.7 million, compared to $6.1 million in the second quarter of 2023. The increase in expenses was driven by the cost of being a publicly traded company.

Matt Lyota: I'd now like to turn the call over to our chief executive officer, Matt Lyota. Thank you, Jonathan, and good morning, everyone. I'll start with some updates on our business before going over our first quarter results.

Speaker Change: Looking at expenses, SG&A for the second quarter was $9.7 million, compared to $6.1 million in the second quarter of 2023.

Mark Heinen: Later, our CFO, Martinine will provide more details on our financials.

Speaker Change: The increase in expenses was driven by the cost of being a publicly traded company.

Mark Heinen: sequentially, SG&A declined to $9.7 billion in the current quarter from $11.7 billion in the first quarter of 2024, or 17%, as a result of these cost-saving measures introduced in the second quarter. The net loss for the quarter was $16.9 million compared to a net loss of $9.9 million in Q2 of 2023. This quarter, the net loss included a $2.8 million non-cash charge related to the valuation of our foreign purchase. On a sequential basis, second quarter net loss declined 2.7% when compared with first quarter net loss as a result of the cost-saving measures implemented during the quarter, offset by the $2.8 million non-cash charge previously mentioned.

Speaker Change: Sequentially, SUNA declined to 9.7 million in the current quarter from 11.7 million in the first quarter of 2024, or 17%. As a result of these cost-aven measures, introduced in the second quarter.

Matt Lyota: We are excited to announce the delivery of our first call stream G280 last week. We started a multi-city tour where potential buyers will be able to get a firsthand look at the aircraft and purchase fractional shares. We've had great traction so far and are looking forward to finishing up the tour later this week.

Speaker Change: Net loss for the quarter was $16.9 million compared to a net loss of $9.9 million in Q2 of 2023.

Mark Heinen: This quarter net loss included a 2.8 million non-cash charge related to the valuation of our forward purchase agreements. On a sequential basis, second quarter net loss declined 2.7% when compared with first quarter net loss as a result of the cost saving measures implemented during the quarter, offset by the 2.8 million non-cash charge previously mentioned. Excluding the impacts of the non-cash charge, second quarter net loss declined sequentially by 17.5% when compared to the first quarter net loss. Adjusted EBITDA loss in the quarter was 11.4 million compared to 7.6 million in Q2 of 2023. The increase was driven by the cost of being a publicly traded company, offset by revenue growth.

Matt Lyota: During the second quarter, OEM supply chain delays continue to impact the timing of our previously announced aircraft deliveries, but we have taken steps to reduce costs and increase liquidity. In early Q3, we closed a $4 million term loan and we continue to evaluate additional sources of liquidity to support working capital and growth ahead of our remaining aircraft deliveries in 2024 and beyond. While we did not take delivery of any aircraft in the second quarter as supply chain issues waned, so far in Q3, we have taken the delivery of one Honda jet in addition to the one G280 I mentioned previously. Based on this progress in deliveries, we still expect to take delivery of 8-10 Honda jet and two G280s total in 2024.

Speaker Change: This quarter net loss included a 2.8 million non-cast charge relating to the valuation of our forward purchase agreements.

Speaker Change: On a sequential basis, second quarter net loss declined 2.7% when compared with first quarter net loss as a result of the cost-saving measures implemented during the quarter, offset by the 2.8 million non-cash charge previously mentioned.

Mark Heinen: Excluding the impact of the non-cash charge, second quarter net loss declined sequentially by 17.5% when compared to the first quarter net loss. Adjusted EBITDA loss in the quarter was $11.4 million compared to $7.6 million in Q2 2023. The increase was driven by the cost of being a publicly traded company offset by revenue growth. Adjusted EBITDA loss declined sequentially 12.7% when compared to the first quarter as a result of these cost saving measures.

Speaker Change: Excluding the impact of the non-cash charge, the second quarter of that loss declined sequentially by 17.5% when compared to the first quarter of that loss.

Speaker Change: Adjusted EBITDA loss in the quarter was $11.4 million compared to $7.6 million in Q2 2023. The increase was driven by the cost of being a publicly traded company offset by revenue growth.

Mark Heinen: Adjusted EBITDA loss declined sequentially 12.7% when compared to first quarter, as a result of these cost saving measures. Looking forward, we still expect to take delivery of 8.10 Hygids and 2 Gulf Stream G280s this year. Based on these forecasts, we expect to generate between 72 and 90 million in revenue and 16 to 20 million in margin from fractional Honda Jeff sales and approximately 50 million in revenue and 10 million in margin from fractional G280 sales this year. We also added contribution per flight hour as a new metric in our Q2 KPI press release to show progress in achieving positive growth margin for flight operations.

Matt Lyota: Despite challenges in the timing of deliveries, we saw strong growth in key performance indicators, including total flight hours, blended yields, and a year-over-year improvement in our empty percentage. Total flight hours grew 5% year-over-year, and blended yields improved 6% as non-owner demand increased to 56%. As a reminder, we are on a higher rate on non-owner flights, so as non-owner mixed increases, it helps support our possibility. As we expand our floating fleet, we are able to better serve owner demand while also driving non-owner usage through increased availability, and we achieve these results while maintaining world-class net promoters for 86. I also want to look at our empty percentage increase 3.5% year-over-year. Our floating fleet flexibility enables us to have an empty percentage of 36.1% in line with industry leaders.

Speaker Change: Adjusted EBITDA loss declined sequentially 12.7% when compared to first quarter as a result of these cost-saving measures.

Operator: Looking forward, we still expect to take delivery of H-10 Haunted Jets and two Gulfstream G-280s this year. Based on these forecasts, we expect to generate between $72 and $90 million in revenue and $16 to $20 million in margin from fractional HondaJet sales and approximately $50 million in revenue and $10 million in margin from fractional G-280 sales this year. We also added contribution per flight hour as a new metric in our Q2 KPI press release to show progress in achieving positive gross margin for flight operations.

Speaker Change: Looking forward, we still expect to take delivery of 810 Honda Jets in two gallstream G-280s this year.

Speaker Change: Based on these forecasts, we expect to generate between $72 and $90 million in revenue and $16 to $20 million in margin from fractional HondaJet sales and approximately $50 million in revenue and $10 million in margin from fractional G280 sales this year.

Speaker Change: We also added contribution per flight hour as a new metric in our Q2 KPI press release to show progress in achieving positive gross margin for flight operations.

Mark Heinen: As additional aircraft contribute to higher revenue usage, we expect gross mark from flight operations to continue improving through the rest of 2024 and turn positive in 2025. With the forecast delivery of aircraft and the improvements in adjusted EBITDA, we expect to be EBITDA positive by the fourth quarter of 2024.

Operator: As additional aircraft contribute to higher revenue usage, we expect gross march from flight operations to continue improving through the rest of 2024 and turn positive in 2025. With the forecasted delivery of aircraft and the improvements in adjusted EVDOT, we expect to be EVDOT positive by the fourth quarter of 2024. Overall, we are pleased with the quarter's financial results and look forward to continuing to progress towards profitability in the coming months.

Speaker Change: As additional aircraft contribute to higher revenue usage, we expect gross margin from flight operations to continue improving through the rest of 2024 and turn positive in 2025.

Speaker Change: With the forecasted delivery of aircraft and the improvements in adjusted EVDOT, we expect to be EVDOT positive by the fourth quarter of 2024.

Matt Lyota: Bounce, our product offering that enables us to monetize into the flight, is seeing great progress and reach an ARR of 1 million for the first time during the quarter. Bounce is a subscription-based mobile app that allows users to subscribe for a thousand dollars per year and access unlimited empty lake flights at no additional cost. The program is a great way to drive the current revenue and monetizing 16 flights that would not be able to otherwise, while reaching an expanded set of customers who may not otherwise consider flying private.

Mark Heinen: Overall, we are pleased with the quarter's final results and look forward to continuing to progress towards profitability in the coming months.

Speaker Change: Overall, we are pleased with the quarter's financial results and look forward to continuing to progress towards profitability in the coming months.

Jonathan: We can now open the call for questions. Thank you. Well, now we can definitely have a question and answer session. If you'd like to ask a question today, you may press star 1 from your telephone keypad, and a confirmation tone will indicate your line in the question Q. Let me press star 2 if you'd like to withdraw your question from the Q. For participating speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, we'll be poll for questions.

Operator: We can now open the call for questions. Thank you. Well, now we can definitely have a question and answer session. If you'd like to ask a question today, you may press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Speaker Change: We can now open the call for questions.

Operator: One moment, please, while we poll for questions. At this time, we will conclude today's conference. We thank you for your participation. You may now disconnect your lines. And have a wonderful day.

Speaker Change: Thank you. We'll now be conducting a question and answer session.

Speaker Change: If you'd like to ask a question today, you may press star 1 from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Matt Lyota: Overall, I'm satisfied with our achievements in the second quarter and the strides we've made in strengthening our cast position and expanding our fleet since the quarter ended.

Speaker Change: One moment, please, while we poll for questions.

Jonathan: Thank you.

Jonathan: At this time, we will conclude today's conference. Thank you for your participation.

Matt Lyota: I'd also like to welcome two new members of our leadership team who joined during the quarter and are great assets to our company. Mark Oznick, who is the head of our aircraft management company division and Luis Garcia are new EVP-assailed. They are an excellent addition to the team and are already adding value to the business. Looking ahead, a lot of its position for success and future growth as we move towards profitability by executing on our strategy and taking advantage of the significant market opportunity that private aviation represents.

Speaker Change: Thank you.

Speaker Change: At this time, we will conclude today's conference. We thank you for your participation. You may now disconnect your lines at this time and have a wonderful day.

Jonathan: You may now disconnect your lines at this time and have a wonderful day.

Mark Heinen: I will now turn it over to Mark for review of our finances. Thank you, Matt.

Mark Heinen: Good morning, everyone. As Matt mentioned, Q2 was a strong quarter for Volato with improvements across our key performance indicators. These results combined with the funding received from the term loan we signed in early Q3 position for continued growth while progressing toward EBITDA profitability, which we expect by the fourth quarter of this year. Looking at our Q2 results, revenue was 15.1 million, a 16% year-over-year increase. Aircraft usage revenue grew 28% to 12.5 million as we grew the higher margin non-owner-demand mix.

Mark Heinen: Enabled by the expansion of our floating plea from 18 to 25-hoget since Q2 of 2023. Growth in flight hours and non-owner demand has also driven a 6% improvement in our blended yield to 5,330 this quarter, compared with 5,042 and Q2 of 2023. Looking at expenses, SGNA for the second quarter was 9.7 million compared to 6.1 million in the second quarter of 2023. The increase in expenses was driven by the cost of being a publicly traded company.

Mark Heinen: Sequentially, SGNA declined to 9.7 million in the current quarter from 11.7 million in the first quarter of 2024 or 17%. As a result of these cost saving measures introduced in the second quarter. Net loss for the quarter was 16.9 million compared to a net loss of 9.9 million in Q2 of 2023. This quarter net loss included a 2.8 million non-cash charge related to the valuation of our forward purchase agreements. On a sequential basis, second quarter net loss declined 2.7% when compared with first quarter net loss as a result of the cost saving measures implemented during the quarter offset by the 2.8 million non-cash charge previously mentioned.

Mark Heinen: Excluding the impacts of the non-cash charge, second quarter net loss declined sequentially by 17.5% when compared to the first quarter net loss. Adjusted EBITDA loss in the quarter was 11.4 million compared to 7.6 million in Q2 of 2023. The increase was driven by the cost of being a publicly traded company offset by revenue growth. Adjusted EBITDA loss declined sequentially 12.7% when compared to first quarter as a result of these cost saving measures.

Mark Heinen: Looking forward, we still expect to take delivery of 8.10 hygids and 2 Gulf Stream G280s this year. Based on these forecasts, we expect to generate between 72 and 90 million in revenue and 16 to 20 million in margin from fractional Honda Jeff sales and approximately 50 million in revenue and 10 million in margin from fractional G280 sales this year. We also added contribution per flight hour as a new metric in our Q2 KPI press release to show progress in achieving positive growth margin for flight operations.

Mark Heinen: As additional aircraft contribute to higher revenue usage, we expect gross mark from flight operations to continue improving through the rest of 2024 and turn positive in 2025. With the forecast delivery of aircraft and the improvements in adjusted EBITDA, we expect to be EBITDA positive by the fourth quarter of 2024.

Mark Heinen: Overall, we are pleased with the quarter's final results and look forward to continuing to progress towards profitability in the coming months.

Mark Heinen: We can now open the call for questions. Thank you.

Operator: Well, now we can definitely have a question and answer session. If you'd like to ask a question today, you may press star 1 from your telephone keypad and a confirmation tone indicate your line in the question Q. Let me press star 2 if you'd like to withdraw your question from the Q. For participating speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, we'll be poll for questions.

Operator: Thank you.

Operator: At this time, we will conclude today's conference. Thank you for your participation. You may now disconnect your lines at this time and have a wonderful day.