Q4 2024 Joby Aviation Inc Earnings Call
© transcript Emily Beynon
Speaker Change: These forward looking statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied.
Speaker Change: For a more detailed discussion of these risks and uncertainties. Please refer to our filings with the SEC and the safe Harbor disclaimer contained in today's shareholder letter.
Speaker Change: The forward looking statements included in this call are made only as of the date of this call and the company does not assume any obligation to update or revise them.
Speaker Change: Also during the call we will refer both to GAAP and non-GAAP financial measures a reconciliation of non-GAAP to GAAP measures is included in our Q4 'twenty 'twenty four shareholder letter, which you can find on our Investor Relations website, along with a replay of this call.
Speaker Change: And with all of that said I'll now turn the call over to Joe Ben.
Speaker Change: Thank you Teresa and thanks to everyone for joining us today as we discuss our full year 2024 results.
Joe Ben: Over the last 12 months, we have delivered sector, leading progress across each area that is core to our business certification manufacturing and commercialization.
Joe Ben: In the last quarter alone we've made record progress on stage for a type certification.
Joe Ben: We delivered our second aircrafts to Edwards Airforce base with Florida in Korea.
Joe Ben: Our partners have broken ground on the first part of Port in our Dubai network.
Joe Ben: And investors, new and old have committed more than $1 billion of additional funding and commitments and putting the recently announced $500 million from Toyota.
Joe Ben: Looking ahead, we see the coming year as an inflection point for Joey and for our industry.
Joe Ben: We're moving from leadership on aircraft development and testing the leadership on the delivery of service.
Joe Ben: By the middle of this year, we plan to have an aircraft in Dubai, where it will be used to demonstrate our readiness to begin carrying our first passengers, which we target for later this year or early next year.
Joe Ben: This will mark one of the most important milestones in our sectors history I'm. So proud that jobin continues to lead the way.
Joe Ben: We are also leading the way on scale manufacturing.
Joe Ben: Joe Music only air taxi company that has delivered multiple E VTOL aircrafts from our production line.
Joe Ben: With four aircraft delivered from our Marina facilitated to date, including one this past quarter.
Joe Ben: At the end of last year, we hit our target of delivering parts equivalent to one aircraft per month, and we continue to ramp up that capacity.
Joe Ben: That means we have the parts and the aircraft to complete unprecedented levels of component and sub component test alongside an increasing cadence of flights.
Joe Ben: In a very significant moment for Xiaomi, we used these parts to complete for credit testing on a major aerostructures for the first time this quarter.
Joe Ben: And we completed our first ground based T I, a testing using a conforming flight deck.
Joe Ben: This was the first time that either of those achievements have been made in our sector. Once again, demonstrating <unk> leadership.
Joe Ben: In terms of aircrafts, we now have five in a test fleet with a second aircraft delivered to the D. O D. At Edwards Airforce base this quarter.
Joe Ben: We also deployed one of our aircraft to Korea to become the first EV toll to fly as part of their <unk> Grand Challenge building on our recent demonstration in Japan.
Joe Ben: The progress we have made with testing both on the ground and in the air means that we're now able to confirm that we expect to begin T. I a flight testing in the U S.
Joe Ben: The final step of the FAA certification process within the next 12 months.
Joe Ben: And we laid the groundwork for that effort by welcoming FAA pilots and technical staff assigned to a certification program to Marina this quarter.
Speaker Change: Thanks. Louis series of tests that are simulator that are exactly the same as those we intend to complete as part of our T. A flight testing.
Speaker Change: They also witnessed our pilots performed those same tests as part of our ongoing inhabited flight testing campaign.
Speaker Change: Turning to our work with the D O D.
Speaker Change: There's been a lot of talk in recent weeks from other companies about how much opportunity there is for VTOL aircrafts in the defense space.
Speaker Change: And I want to be clear then we share that view.
Speaker Change: But it's nothing new for Joey.
Joe Ben: We have been talking about defense tech for more than eight years and not just talking about it but actually delivering on it.
Speaker Change: We have already trained U S Air Force pilots to fly our aircraft.
Speaker Change: We've already trained EOD mechanics to maintain them.
Speaker Change: And we're the only electric air taxi company to have delivered an aircraft to a government customer on base, which we've now done twice.
Speaker Change: We also understand the opportunity presented by hybrid VTOL aircrafts.
Speaker Change: And as we demonstrated in 2024, our vertically integrated approach enables us to rapidly adopt our platform with a hybrid powertrain to suit and expanded mission set.
Speaker Change: In July last year, we flew a hybrid hydrogen electric VTOL aircrafts 561 miles and we remain the only air taxi company to have demonstrated that capability completing multiple 500 plus mile all transition vertical takeoff and landing flights.
Speaker Change: The leading progress we have made on our core program continues to ensure that Joey is in the best possible position to capitalize on wider opportunities.
Speaker Change: And with the renewed interest in U S leadership on innovation, we're excited about the opportunities ahead.
Speaker Change: The next 12 months are going to be incredibly exciting for Jeremy as we look to bring our service to life and I am pleased that our partners and our investors share that excitement.
Speaker Change: Over the last quarter, we've worked closely with Delta and Amber to showcase our products and we continue to make important inroads across key U S markets, such as New York and L. A.
Speaker Change: We also continued to have one of the strongest balance sheets in the sector and I believe it's a very significant signal that our existing investors and partners like Toyota and Bally defer those who know us best keep deepening their investments and partnership and Xiaomi.
In the case of Toyota their previous investments and the additional commitments made recently far exceed the amount invested by any other strategic investor in the industry and we're excited to be working together to form a strategic manufacturing alliance as we look towards scale production.
Speaker Change: Well it is backed by stable management, and a deep balance sheet and they have a track record of long term commitments to solving tough challenges something that cannot be said for all auto manufacturers. These days.
Speaker Change: We have an incredible 12 months ahead of us with goals that will really bring our technology to life.
Speaker Change: We have the team to deliver on those goals, we have the balance sheet to support them, we have the best possible partners alongside us and.
Speaker Change: And we have support of ecosystem here in the U S and overseas.
Speaker Change: This is our moment as an industry and I'm proud that jobin continues to lead the way Paul over to you.
Paul: Thanks, Kevin turning to our results, you'll find detailed financials and our fourth quarter and full year 2024 shareholder letter on our website.
Speaker Change: But I'll briefly summarize and share additional comments here.
Speaker Change: For the period ending December 31, 2024, we had cash and short term investments totaling $933 million. This.
Speaker Change: This includes net proceeds from an underwritten equity offering of $222 million in October.
Speaker Change: As well as 128 million in net proceeds from the at the market offering we announced in December.
Speaker Change: We are working through the final steps of our agreement with Toyota in order to access the first of two $250 million investment tranches expected this year and.
Speaker Change: And I'm pleased to say all regulatory approvals are now in place for that first tranche.
Speaker Change: When added to the $933 million in cash and short term investments on our balance sheet at year end that would exceed $1.4 billion.
Speaker Change: Looking back at the fourth quarter of 'twenty 'twenty, four we incurred a net loss of $246 million, reflecting a loss from operations of about $150 million and other losses of $97 million.
Speaker Change: The other loss largely reflected the noncash loss on the revaluation of derivative liabilities of 107 million related to our warrants and earn out shares partially offset by interest and other income of $10 million.
Speaker Change: Our net loss increased by approximately $102 million compared to the third quarter with the difference primarily due to the noncash loss, we recorded on revaluation of warrants and earn out shares reflecting the increase in our share price over the quarter.
Speaker Change: Adjusted EBITDA and <unk>.
Speaker Change: non-GAAP metric that we reconcile to our net income in our shareholder letter was a loss of $119 million in the recently completed fourth quarter.
Speaker Change: Our adjusted EBITDA loss was approximately $23 million higher compared to the same period last year, reflecting the growth in our organization and expenses necessary to support manufacturing and certification.
Speaker Change: Change in cash cash equivalents and short term investments during 2024, excluding the net proceeds from public offering was $450 million coming in as expected at the lower end of our guidance of $440 million to $470 million.
Speaker Change: As we look to the year ahead, we continue to focus on advancing our testing and certification program as well as laying the groundwork for first passenger operations.
Speaker Change: We expect our 2025 use of cash cash equivalents and short term investments to be between 500 and $540 million.
Speaker Change: This reflects our assumptions for hiring in areas such as certification and manufacturing.
Speaker Change: Higher R&D expenditures, which include building more parts to support certification and manufacturing as well as higher capital expenditures.
Speaker Change: As a reminder, with the support of the Cal competes grant we are expanding our manufacturing facility in Marina, California more than doubling our footprint there to support expanded manufacturing and flight training.
Speaker Change: This is expected to provide sufficient space for more than double our annual production capacity overtime at the site.
Speaker Change: Additionally, we will begin to have our Ohio facility start building aircraft components to support production and aircraft Assembly in California.
Speaker Change: With these investments you can expect our capital expenditure to increase from the 41 million we spent in 2024.
Speaker Change: As we build out our facilities in both Marina and Ohio.
Speaker Change: As Joe been stated at the top of the call. The next 12 months will Mark a pivotal year for JB and our broader industry.
Speaker Change: We'll be delivering our first aircraft to Dubai in the middle of the year and we have clear line of sight to beginning flight T I, a testing and carrying our first passengers.
Speaker Change: We believe we continue to lead our sector on FAA certification standing up scalable manufacturing and preparing markets around the world for commercial operations.
Speaker Change: Adobe, we've always prioritized delivery and building long term value over short term hype the.
Speaker Change: The coming year will be no different.
Speaker Change: This concludes our prepared remarks, operator, please begin the Q&A.
Speaker Change: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two to remove yourself from the queue for participants using speaker equipment. It may be necessary to pick up the handset before pressing the star keys.
Speaker Change: One moment, while we poll for questions.
Speaker Change: Our first question comes from the line of Andre Shepard with Cantor Fitzgerald. Please proceed with your question.
Andre Shepard: Hey, everyone. Good afternoon, congratulations on the quarter and thanks for taking our questions.
Speaker Change: Joe and I'm wondering if you could maybe flush out a bit further the opportunities that you see with the military both in the near term and longer term I know you alluded to it on your prepared remarks, just wondering if you could maybe elaborate a bit further on what kind of opportunities you see expanding with your relationship.
Andre Shepard: With the military.
Speaker Change: Yeah. Thanks, Thank you Andreas.
Andre Shepard: I had a few.
Speaker Change: <unk> comments, there and then also invite Paul to share his thoughts.
Andre Shepard: I.
Andre Shepard: As I.
Andre Shepard: Spoke about we've been working with the Doj for eight years now and.
Andre Shepard: The <unk>.
Andre Shepard: Those opportunities have really expanded.
Andre Shepard: Expanded significantly and I think the Vod fees as we do.
Andre Shepard: The incredible potential of the.
Andre Shepard: The technology stack that we're building and the vertical integration that we've embraced.
Andre Shepard: And we think we can do.
Andre Shepard: A number of very important things.
Andre Shepard: As we look to the future.
Andre Shepard: Both with our.
Andre Shepard: Current technology, and our future technology and would that also hand it over to Paul.
Paul: Yep. Thanks, Andreas I mean, I think what when it comes to our broader government strategy, it's really a sort of continuation of the work as Jamie mentioned that we've been doing for eight years.
Paul: We always knew that the work with agility prime would be an important steppingstone for broader opportunities across the D. O D. And we are really pleased to have delivered on important milestones without customer set that includes as mentioned the delivery of now a second aircraft Edwards and an opportunity to trained pilot.
Paul: To give them a training on maintenance really all of the building blocks that will set us up for success. When we think about broadening the opportunity to other government customers overtime.
Paul: We've.
Paul: As we've mentioned in prior calls we've already brought other groups like the Marines into a lot of that testing and I think that sets us up well both to have really great visibility across the different opportunities within government and now have demonstrated.
Paul: Record of execution.
Paul:
Paul: To try to capture those opportunities.
Paul: One of the things that I think was mentioned was the hybrid work longer range is certainly a priority for government customers and we're really pleased to have shown that this is a platform that can be readily extensible to those longer range missions, but the 550 mile flight of the hydrogen hybrid aircrafts that we demonstrated last summer.
Paul: Got it that's super helpful. I appreciate all that color.
Paul: Just as a quick follow up switching to Dubai. So you mentioned, you're playing through deliberate aircraft there.
Paul: Each year and to begin.
Paul: Flights with passengers either later this year or early next year I guess I'm curious if you could maybe.
Paul: Share with US your vision in terms of what commercial life. They shouldn't in Dubai might look like in and kind of how quickly you see that market ramping up thank you.
Speaker Change: Thank you Andre So Dubai is an incredible opportunity for us we're so excited about.
Paul: Taking our first aircraft there and beginning in market testing.
Speaker Change: We also were very pleased I was with.
Speaker Change: The Crown Prince a.
Paul: When.
Paul: When we did the the groundbreaking for the.
Paul: The first board of board over there and to see the excitement in the lean in.
Speaker Change: From all lever levels of the Dubai government in this.
Paul: New age of of mobility is really fantastic.
Paul: The momentum is building and as as we get aircraft in market and begin testing, we think that that's going to continue to be the case and then.
Paul: As we look to scaling that.
Paul: We're building out not just diverted ports, but also the op and all of the pieces of the ecosystem as we bring more aircraft to the market and progressively grow that and build a.
Paul: A really valuable.
Paul: Service for for customers not just in in Dubai, but across the read across the region.
Paul: Wonderful. Thank you very much again, that's super helpful. Congrats on the quarter and I'll pass it on.
Paul: Thank you.
Speaker Change: Our next question comes from the line of Chris appears with Needham <unk> Company. Please proceed with your question.
Speaker Change: Hey, good afternoon, everyone. Just looking at the certification flight you know the delta between the Blue line in the Gray line should we read anything into that given headlines out of D. C. About staffing government agencies and are you seeing anything on the FAA side, that's maybe slowing things down on the certification front or is it.
Speaker Change: Normal kind of ebb and flow.
Paul: Thanks, a lot Chris this is Paul.
Speaker Change:
Speaker Change: Contrary to what.
Speaker Change: What it might look like we actually had record progress in terms of FAA certification of documentation last quarter.
Speaker Change: So every indication that we have at this point is that the FAA is sort of fully engaged with our program and doing the work that they need to do as we do the work that we need to do.
Speaker Change: That was also on demonstration as I think was mentioned in the sort of earlier prepared remarks in a large FAA delegation that was down to see the very same flight testing that the FAA themselves will do for T. I E.
Speaker Change: So both in terms of documentation both in terms of the level of engagement with the agency.
Speaker Change: We've seen really accelerating support in progress in terms of the work that they have to do.
Speaker Change:
Speaker Change: So in the in the data in the actions of the agency on a day to day basis things seem great.
Speaker Change: Okay, Perfect and then you talked about the five aircrafts me a test flight test fleet.
Speaker Change: It's just helping you sort of get towards like a production cadence maybe you could share guidance on the reason I ask because I know that your fleet is going to be leveraged.
Speaker Change: Taxi operations versus OEM, and Theres, a lot of in precision around modeling what that might look like but if we could sort of like if there was a production guidance cadence of a sort of certification aircrafts that sort of might help kind of lower the uncertainty there I'd just.
Speaker Change: Be curious around any sort of guidance you can give on production.
Paul: Hey, Chris This is Paul again.
Speaker Change: Hi.
Speaker Change: I'll answer a little bit of it and then I might ask Didier to sort of comment on the manufacturing progress.
Speaker Change: But in terms of your comment on you know OEM versus fully vertically integrated look it's important to note that we have really both models that we've been actively supporting we think that there are going to be some markets and some opportunity sets were more fully vertically integrated model as appropriate like for example here in the U S.
Speaker Change: However in other markets outside of the U S with other customer bases, we expect that the business model is going to look a little bit more like a sale and support or a lease model. So I think that we actually have an opportunity to blend both of those models, both now and in turn over time.
Speaker Change: Regarding the manufacturing side of things, we felt really good about where we stood with respect to overall volume from the facilities last year. As was mentioned we were at one aircrafts worth of parts per month, which was the goal for the overall year.
Speaker Change: Thing that we are focused on this year is ensuring that an increasing number of those manufacturing lines and parts to come off those manufacturing lines are confirming that is built to sort of S. FAA specifications. So this year is not so much about volume, but really ensuring that the parts that we built are appropriate for the stage and certification that we're at.
Speaker Change: And.
Speaker Change: The progress there has been quite good at least on the composite side, we're already doing more than 95% of the composites on a conforming basis. So that's really good progress against that important goal this year.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Well.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Savi <unk> with Raymond James. Please proceed with your question.
Savi: Hey, good afternoon.
Speaker Change: Can you provide.
Speaker Change: Little bit along those lines just how many aircraft sales are you contemplating in that 2025 by joking and how many of those will be kind of more production prototype, Russia certification couponing aircrafts and I'm guessing the aircraft that you plan to fund Dubai is the <unk>.
Speaker Change: Production prototyping that certification confirmed one that just wanted to clarify that as well.
Speaker Change: Yeah. Thanks for the question I'll jump in this is a detailed answer this by building a bit more on what Paul said key between last year and this year is last year was highly focused on the manufacturing side on.
Speaker Change: Building that manufacturing muscle and the cadence and are ramping up the airplanes and which we've demonstrated by achieving a capacity of one aircraft sorts of part by the end of last year. This year is going to be a highly focus on a mix of a.
Speaker Change: Building parts go towards FAA conformable airplanes, so compete airplanes as well as a lot of parts that theyre going to go towards building FAA conforming test assets or parts of airplanes alright.
Speaker Change: Alright, So we demonstrated last year for example, though we built a fully conforming tail. We went through that test and finished out there we're going to be doing quite a bit more of these things. This year. So this year. The manufacturing is going to be focused on our mix. That's the key thing while at the same time, we continue to increase the ramp up in one of the key things about the ramp up is we're not stop.
Being there as can be seen by the expansion, we're having in Marina, where we are growing our footprint as well as the expansion that we're seeing here in Ohio, where we're also growing our footprint and we'll start there.
Speaker Change: Delivering parts. This year. So the airplanes that we're gonna be producing or are going to be a progression towards increased conformity one after the other.
Speaker Change: And the aircraft that you're sending to Dubai.
Speaker Change: The aircraft that we're sending to Dubai is one of the airplanes that we have in our fleet today, that's been demonstrated flies on a regular basis honestly most weeks and that's a progression of those airplanes that we've been building.
Speaker Change: We will continue to build throughout this year.
Speaker Change: I appreciate that detail.
Speaker Change: Maybe Paul just a clarification on your 10-K, you that investment comment are there any milestones or commitments that you need to kind of finalize to unlock that first tranche and and also is it fair to assume that the second tranche that will not be in 2025.
Speaker Change: Yeah.
Paul: Hey, Savi. This is Paul I want to make sure I understand the question. So the question was are there any.
Paul: Commitments or deliverables that we need to do the first and second tranche.
Paul: Exactly.
Paul: So.
Paul: The short answer is yes, there are a number of sort of regulatory and in turn business.
Paul: Things that we need to sort of make sure that our done those have been moving.
Paul: Forward well on the first tranche and we certainly feel like Theyre going to move well on the second tranche is for so to kind of get everything done this year.
Paul: So does that I guess I'm not putting you. They just didn't there's a high probability that those tranches kind of show up in 2025 is that fair.
Paul: Yes extremely high probability.
Paul: I appreciate it thank you.
Paul: Sure.
Speaker Change: Thank you and as a reminder, if anyone has any questions. You May press star one on your telephone keypad in order to join the queue.
Speaker Change: Our next question comes from the line of Bill Peterson with Jpmorgan. Please proceed with your question.
Bill Peterson: Yeah, Hi, good afternoon. Thanks for all the details on the call.
Speaker Change: Wanted to come back to the defense applications.
Speaker Change: Acknowledging the second airplane and some of the work you're doing there I guess first what do you think of this opportunity is this including combat missions or are these more logistics and other things are you able to expand your market opportunity and if so how do you view the market opportunity longer term and I guess with the changes in agility Prime what does it mean for your existing.
Speaker Change: Programs that would we expect that this would shift more towards hybrid potentially hydrogen hybrid or some other applications just trying to get a sense for what the market opportunity opportunity looks like and how we should think about it over the next few years.
Speaker Change: Hi, Bill this is Paul I'm happy to sort of pick that one up.
Speaker Change: So with respect to the.
Speaker Change: The sort of broader government opportunity look it is the case that the army. For example operates the largest number of existing rotorcraft and many of those are sort of state of the art technology circa 20, or 30 years ago. So there are opportunities for lots of important modernization across a very large fleet fleet and that's just one.
Speaker Change: Customer of quite a few branches not to mention sort of other opportunities in government writ large.
Speaker Change: <unk>.
Speaker Change: With respect to agility Prime look that's has served the purpose that we always expected it to serve which is an important steppingstone in an opportunity to demonstrate capabilities that would definitely applicable to other programs and other customers in government and on that count we feel really good about the progress.
Speaker Change: I won't obviously repeat that work.
Speaker Change: But we're really pleased that we got all of that done and I think it sets us up for success in terms of both our visibility too and our capability to execute against other programs down the line.
Speaker Change: Regarding hybrid.
Speaker Change: Certainly for government customers longer range is a priority.
And we.
Speaker Change: We feel really good that we already had an opportunity to demonstrate that this aircraft can have other energy sources plugged in to get that longer range.
Speaker Change: So I think that the changes in agility prime are very much in line with the technical trajectory that we've already demonstrated both the hybrid longer range N pieces like autonomy that we obviously had an opportunity to acquire.
Speaker Change: Acquire with our acquisition of <unk>.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes, thanks for that and then I wanted to follow up on the commentary around the Ti flight testing in the next 12 months.
Speaker Change: And what does that mean I guess in terms of the ramifications for when that can mean entry into service.
Speaker Change: If this happens over the next 12 months should we assume the entry into service is kind of more of a 2027 timeframe in the U S is because there's some kind of lag.
Speaker Change: After that process, maybe just need to understand a bit more what the flight testing.
Speaker Change: Flight testing really means.
Speaker Change: Yeah. Thank you so Ah.
Speaker Change: We're really excited about the momentum we're seeing.
Speaker Change: As we take the five aircraft that we're flying today and then we are.
Speaker Change: Anticipated and run all of the internal flight test.
Speaker Change: Against the the FAA flight test.
Speaker Change: I think as as we mentioned earlier the having the FAA pilots, who will be doing these G. I a flight test here.
Speaker Change: Here with us are.
Speaker Change: Running these.
Speaker Change: These flight profiles in this emulator watching our pilots fly many of those.
Speaker Change: Inhabited.
Speaker Change: <unk> was fantastic and laid the groundwork for it so we're seeing a ton of momentum really looking forward to beginning the T. I a flight test and I think as you can think about.
Speaker Change: Yes that I think about this as we're in the homestretch.
Speaker Change: And.
Speaker Change: Once we have.
Speaker Change: What you know what once we've gotten into the GI a flight test were.
Speaker Change: <unk>.
Speaker Change: We've got the finish line of of type certification in our sites and so I'm very pleased with the momentum we're seeing in engage more seeing from the FAA.
Speaker Change: Across all the different levels.
Speaker Change: And.
Speaker Change: Yeah excited about.
Speaker Change: The launch of <unk>.
Speaker Change: Operations in Dubai as well.
Speaker Change: Thanks, Joe and Paul.
Speaker Change: Thank you. Our next question comes from the line of David Zulu with Barclays. Please proceed with your question.
David Zulu: Hey, Thanks for taking my question.
Didier Jobin: Didier Jobin.
Didier Jobin: Follow up a little bit on that wanted to be sure I understand that the change in language you guys used regarding passenger operations I think.
Didier Jobin: Last year, you said something like.
Didier Jobin: As early as the end of 2025.
Didier Jobin: And this quarter I think you said targeting later this year or early next year.
Just maybe unpack a little bit that the change in language that was there something that drove that or are you expecting something different or is this a finer point and what you're trying to say.
Didier Jobin: We are seeing fantastic momentum and a great leader and from the GTA, but we.
Didier Jobin: We get there is there is still work to do and.
Didier Jobin: Once we get the aircraft, there and and begin in market testing.
Didier Jobin: We will have better fidelity on that timeline.
Speaker Change: Great. Thanks, and then if I could just follow up a little on Sotheby's question.
Speaker Change: What do you have right now I know you've mentioned the tail in a couple of sub systems, what do you have for conforming systems.
Speaker Change: What's the plan on building producing conforming systems, yeah, as you ramp up towards the T. I a test phase.
Speaker Change: Yeah. Thanks for the question.
Speaker Change: We talked about the the sort of the perimeter of the airplane in the past few times, where the bottom you've got some of the smaller components electronics and such and then he moved into the sub system the system in the airplane.
And we kind of were driving with Pathfinders on many of these you may recall, we talked about flight control computer and the tailings alone. This year, you'll see expansion and acceleration on all of these layers of that pyramid. So we have multiples of our electronics components now already built in.
Speaker Change: Informing stage and will be going through.
Speaker Change: Environmental quality things in so long on the airframe side, we're moving into the fewest testing in some of the sub components of the fuel for example.
Speaker Change: And then we're also moving into some of the lower level aspects of software electronics and so on so it's really across all of the aircraft and that's exactly where we want to be at this point in preparation for Tru.
Speaker Change: And I'm sorry. This is Paul I, just wanted to sort of jump in on one thing. There's question of conformity is one that I know lots of folks in the industry are talking about and we've certainly worried that there's been a little bit of confusion about what we mean by conformity.
Speaker Change: Relative to some others.
Speaker Change: For us conformity means something really very specific that's like an aircrafts made up of parts and subsystems for which the FAA has already approved the design requirements the manufacturing processes and in some cases the test plants. So that means you can't be FAA conforming until you receive approval from the FAA on these documents.
Speaker Change: That's part of the reason why we've been so focused and had been trying to focus you on the certification chart and sort of where we stand on that with respect to certification.
Speaker Change: Because look without agreement between the OEM job in this case and the regulator on exactly how the testing will be confirmed at the component level. The system level and then all the way up to the aircraft model Theres still a lot of remaining uncertainty.
Speaker Change: And.
Speaker Change: The progress on the chart is therefore highly coupled to what you can conform and when you can conform it so.
Speaker Change: That's obviously a little bit different than I think other people are talking about with respect to conformity, maybe it's a might be conforming or will be conforming or they think it's gonna be conforming for us when we say conforming. We mean that it has all these very specific pieces of documentation already in place and approved by the FAA.
Speaker Change: That's very helpful.
Paul I: Thank you Paul Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Edison Chu with Deutsche Bank. Please proceed with language.
Edison Chu: Hi, thank.
Edison Chu: Thank you for taking my question and congrats on the progress you've made during the quarter.
Edison Chu: So my first question.
Edison Chu: We know that one of your competitors is competing for a program of record with deal with E. Using the hybrid EV. So is there anything that would technically stop EU or competing for those.
Edison Chu:
Paul I: Hi, This is Paul.
Paul I: As we mentioned a number of times I think our footprint and visibility inside of the D. O. D is one of the best in the industry largely owing to the deliveries that we've already done on the sort of existing agility Prime program.
Paul I: With respect to visibility on programs I think we've got a lot of that and there's certainly nothing that prohibits us from ensuring that we find the right opportunities and can execute against them.
Paul I: Okay Gotcha.
Paul I: Oh and the second question was about like what's your latest thinking.
Paul I: Hum pylons in them they get some portion of the aircrafts flying into high altitude.
Paul I: So would you need to do this work in the U S before attempting in UAE.
Laura: Thanks, Laura so.
Paul I: And as I mentioned, we have five aircraft.
Aircraft.
Paul I: Our flight test fleet, and we're flying knows both remotely at inhabitant.
Speaker Change: You mentioned high altitude I think we're the only company in the industry.
Speaker Change: That has flown to high altitude that has flown to high speed that has.
Speaker Change: It really validated the a significant portion of the performance envelope and the capabilities of our aircraft.
Speaker Change: And.
Speaker Change: We're we're very pleased with.
Speaker Change: The performance.
Speaker Change: We've been able to achieve and.
Speaker Change: Really looking forward to.
Speaker Change: Expanding.
Speaker Change: Continuing to expand the envelope and and also prove that out inhabited.
Speaker Change: Yeah.
Speaker Change: Gotcha, Yeah I appreciate it.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Austin, whether with Canaccord Genuity. Please proceed with your question.
Speaker Change: Sure.
Speaker Change: Hi, Good afternoon. So just my first question here, if we just lay out the fact pattern so Dubai expects passenger flights.
Speaker Change: Each year or early next year.
Speaker Change: But they expect to have established a U haul routes within 20 months.
Speaker Change: But the FAA T I, a flight testing of the typed in pouring plane.
I used to happen within the next 12 months and you're.
Speaker Change: Thing to build a fully type conforming full sized aircraft in 2025 so.
Speaker Change: With the aircraft that you're shipping to Dubai, Dubai be waiting for FAA approval to fly passengers or what they may be.
Speaker Change: I saw him on a demonstration or waiver basis.
Speaker Change: And in between cities or within Dubai.
Speaker Change: Ah Thanks, Austin, Yeah, as you mentioned.
Speaker Change: We're very excited about getting one of the aircrafts that were currently flying to Dubai to begin.
Speaker Change: Doing in market testing.
Speaker Change: And excited to be.
Speaker Change: We have the opportunity to begin carrying.
Speaker Change: Passengers either.
Speaker Change: Late this year early next year.
Speaker Change: And we're also extremely pleased with the rate of progress we're making in the the multiple aircraft that we have currently are.
Paul I: Going through our manufacturing process in Marina and as Paul mentioned.
Paul I: And 95% of the composite parts that were currently building our conformable, it's indicative of the really strong momentum and as.
Paul I: Paul mentioned the.
Paul I: The huge mountain of work that we've done that has laid the foundation.
Paul I: To allow us to be building these FAA conforming.
Paul I: Aircrafts and FAA conforming test articles, which is so vital to being able to now have line of sight to the TIAA.
Paul I: Yeah.
Paul I: Okay. That's helpful and just a follow up.
Paul I: Do you have any commentary around the effect of rotor wash on the vertical port infrastructure.
Paul I: Yeah. Thank you very much.
Paul I: A critical element and something that is foundational to the design of our of our.
Paul I: Crop.
Paul I: We have one of the lightest desk loadings.
Paul I: In the industry may be the lightest disclosing in the industry.
Paul I: Which.
Paul I: Which results in substantially.
Paul I: Lower outwash speeds.
Paul I: And this has been validated by work that we've done with NASA and I think one of our huge.
Paul I: Unappreciated value of our aircraft design and.
Paul I: Something that we think is going to be crucial as we moved to market.
Paul I: And that would mean that the chip speed on the props is lower than competitors correct.
Paul I: We are very low tip speeds and large rotor diameters and the combination results in a slower outwash and less.
Paul I: Particular in that sort of thing so we're very very pleased with.
Paul I: With the results.
Paul I: From.
Paul I: Both the announced the studies.
Paul I: From our years of flight testing.
Paul I: Yes.
Paul I: That's great color. Thank you.
Paul I: Yeah.
Paul I: Yes.
Paul I: Thank you.
Paul I: Our next question comes from the line of Amit.
Speaker Change: And with H C. Wainwright. Please proceed with your question.
Amit: Hey, good afternoon, everyone and thank you for taking my questions.
Speaker Change: With respect to the theater investment is that straight equity or is some of that is gonna be ingrained.
Amit: Okay.
Paul I.: Hi, Amit its Paul so all of the the two a $250 million tranches on that investment are straight equity.
Paul I.: And importantly, not this investment none of the other Toyota investments had warrants or sort of other kickers.
Paul I.: Sort of as part of the deal.
Paul I.: Mr. Thank you and then sort of Dubai operations. These are just going to be easy to do cross sales too.
Paul I.: That operation or are we also expecting to generate.
Paul I.: Does it prevent any revenues.
From those operations in the future.
Paul I.: Yeah. Thank you for that question and allowing us to clarify these are Joe be owned and operated aircraft.
Paul I.: And we'll be.
Paul I.: <unk> operated by the.
Paul I.: The JV team based in Dubai.
Paul I.: Okay.
Paul I.: Color on the unit economics of the operations or is that a little early for us to.
Paul I.: Yeah.
Paul I.: A little bit early yet.
Paul I.: Okay.
Paul I.: Okay. That's all I have guys I'll take my questions offline. Thank you.
Paul I.: Thank you so much.
Paul I.: Thank you.
Paul I.: And we have reached the end of the question and answer session and this also concludes today's conference you may disconnect. Your lines at this time.
Paul I.: Thank you for your participation.
Paul I.: Okay.
Paul I.: Yeah.
Paul I.: [music].