Q1 2025 flyExclusive Inc Earnings Call
Greetings and welcome to the fly exclusive first quarter 2025 earnings call.
Operator: Greetings, and welcome to the flyExclusive first quarter 2025 earnings call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone. As a reminder, this conference is being recorded.
At this time all participants are in a listen only mode.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
Kyle Nagarkar: I would now like to turn the conference over to your host, Mr. Kyle Nagarkar, Investor Relations. Thank you. You may begin. Thank you, operator. Good afternoon, and thank you for joining flyExclusive's first quarter 2025 earnings conference call. Joining me on the call today is Jim Segrave, flyExclusive's founder and chief executive officer, and Brad Garner, our chief financial officer. We announced first quarter financial results yesterday after the market closed, along with the filing of our Form 10-Q for the quarter ended March 31st, 2025. Today, we'll be providing certain non-GAAP information during today's discussion. Important disclosures about this information and a reconciliation of the non-GAAP information to comparable GAAP information is included in our Form 10-Q filed with the SEC and is available on our Investor Relations website.
Speaker Change: I would now like to turn the conference over to your host Mr. Kai on the Gar car Investor Relations. Thank you you may begin.
Speaker Change: Thank you operator, good afternoon, and thank you for joining fly exclusive first quarter 2025 earnings conference call. Joining me on the call today is Jim Seagraves fly Exclusives, founder and Chief Executive Officer, and Bryan Garner, our Chief Financial Officer, We announced first quarter financial results yesterday after the market close.
Speaker Change: <unk> along with the filing of our Form 10-Q for the quarter ended March 31st 2025.
Speaker Change: Today, we will be providing certain non-GAAP information during today's discussion important disclosures about this information and a reconciliation of the non-GAAP information to comparable GAAP information is included in our Form 10-Q filed with the SEC and is available on our Investor Relations website. In addition, this discussion might include forward.
Kyle Nagarkar: In addition, this discussion might include forward-looking statements. Actual results might differ materially for any number of reasons, including risk factors described in our annual report on Form 10-K, in our quarterly reports on Form 10-Q, and in the press release covering forward-looking statements.
Speaker Change: Statements.
Actual results might differ materially for any number of reasons, including risk factors described in our annual report on Form 10-K, and our quarterly reports on Form 10-Q and in the press release covering forward looking statements rather than rereading misinformation, we're going to incorporate it by reference in our prepared remarks with that let me turn the call over to Jim.
Kyle Nagarkar: Rather than re-reading this information, we're going to incorporate it by reference in our prepared remarks.
Jim Segrave: With that, let me turn the call over to Jim. Thank you, Kyle, and thanks to everyone for joining us today. Last quarter, I spoke about the transformation of flyExclusive throughout 2024. That transformation continues, and the benefits are now showing up across our operations, our customer experience, and most importantly, our financial results. We've modernized our fleet, strengthened our team, and streamlined our cost structure. Our partners, along with Jet Club and fractional members, are seeing the results in better aircraft, better service, and more reliability. And our shareholders should now be seeing the value this platform can deliver over time.
Jim Seagraves: Thank you Kyle and thanks to everyone for joining us today.
Speaker Change: Last quarter I spoke about the transformation of fly exclusive throughout 2024.
Speaker Change: That transformation continues and the benefits are now showing that across our operations, our customer experience and most importantly, our financial results.
Speaker Change: We've modernized our fleet strengthened our team and streamlined our cost structure.
Speaker Change: Our partners along with jet club and fractional members are seeing the results and better aircraft better service and more reliability.
Speaker Change: And our shareholders should now be seeing the value this platform can deliver overtime.
Jim Segrave: Let's start with the fleet, because that's where so much of our turnaround began. At the start of 2024, as we've discussed in the past, we had 37 non-performing aircraft in the fleet. The older Gulfstreams were the biggest drag, followed by the Citation Encore and X-Fleets. Today, We only have one of the non-performing Gulfstreams left in the fleet, down from 7, and just two of the Encores remain down from 11. We've eliminated half of the Citation X fleet, and we'll wind down the remaining aircraft over the next 12 months as new challengers come online. The negative impact from these non-performing aircraft has been reduced by approximately 80 percent, from a peak of over $3 million per month to less than $600,000 today.
Speaker Change: Let's start with the fleet.
Speaker Change: That's where so much of our turnaround again.
Speaker Change: At the start of 2024 as we've discussed in the past we had 37 nonperforming aircrafts in our fleet.
Speaker Change: The older older Gulfstream or the biggest drag followed by the citation Encore and X fleets today.
We only have one of the nonperforming Gulfstream is left in the fleet down from seven and just to be on course remained down from 11.
Speaker Change: We've eliminated half of the Citation X fleet and will wind down the remaining aircraft over the next 12 months as new challenges come online.
The negative impacts from these nonperforming aircraft has been reduced by approximately 80% from a peak of over $3 million per month to less than 600000 today.
Speaker Change: Over the next few quarters, we will fully eliminate the drag on our performance.
Jim Segrave: Over the next few quarters, we will fully eliminate this drag on our performance. From an operational standpoint, these non-performing aircraft had dispatch availability of around 30 percent. As we eliminated 23 of them, we improved our overall maintenance dispatch availability by nearly 100%, now reaching in the low 60% range. As we finish removing the remaining aircraft, we expect continued gain. This is how we've delivered sustained growth in flight hours and revenue with approximately 17 fewer aircraft. We estimate the old fleet structure at its peak was costing us as much as $36 million per year. The addition of challengers to the fleet, alongside our profitable CJ3s and XLs, has had a major positive impact on performance.
Speaker Change: From an operational standpoint, these nonperforming aircrafts had dispatch availability of around 30%.
Speaker Change: As we eliminated 23 of them, we improved our overall maintenance dispatch availability by nearly 100% now reaching in the low 60% range as we finish removing the remaining aircraft we expect continued gains.
Speaker Change: This is how we've delivered sustained growth in flight hours and revenues with approximately 17 fewer aircrafts, we estimate the old fleet structure at its peak was costing us as much as $36 million per year.
Speaker Change: The addition of challengers to the fleet alongside our profitable C. J threes and itself has had a major positive impact on performance. We now have five challengers and operation with a sixth onsite preparing to enter service this month.
Jim Segrave: We now have five challengers in operation, with a sixth on-site preparing to enter service this month. We expect to accelerate Challenger editions over the remainder of 2025. We anticipate the Challenger fleet will grow to 12 to 15 aircraft and represent as much as 30% of overall revenue by year-end, just over a year after introducing the first Challenger 350. Again, speaking to how fast we are transforming the landscape. These aircraft are delivering dispatch availability in the 80% range as projected. And with the sixth arriving this month, we've extended super mid-size access to our Jet Club members.
Speaker Change: We expect to accelerate channel challenger additions over the remainder of 2025.
Speaker Change: We intend anticipate the challenger fleet will grow to 12 to 15 aircrafts and represent as much as 30% of overall revenue by year end just over a year after introducing the first challenge or $3 50.
Speaker Change: Again speaking to how fast we are transforming the landscape.
Speaker Change: These aircraft are delivering dispatch availability in the 80% range as projected.
Speaker Change: And with the sixth of riding this month, we've extended Super midsize access to our jet club members.
Jim Segrave: Each challenger should generate $8 to $10 million in annual revenue. and deliver stronger margins than any other aircraft in our fleet. When paired with the high-performing CJ3s and XLSs in our fleet, the story is clear. Our fleet is more reliable, more profitable, and better aligned to deliver what our customers want and expect.
Speaker Change: Each challenger should generate eight to 10 million in annual revenue.
Speaker Change: And deliver stronger margins than any other aircraft in our fleet.
Speaker Change: When paired with a high performing C J threes and X L. S is in our fleet. The story is clear our fleet its more reliable more profitable and better aligned to deliver what our customers want and expect.
Jim Segrave: Two new XLS Gen 2s are scheduled for delivery from Textron in the second half of 2025, and we continue to add CJ3s to our fleet as the customer base grows.
Speaker Change: Two new X L. S. Gen twos are scheduled for delivery from Textron and the second half of 2025, and we continue to add P. J three east to our fleet as the customer base grows.
Jim Segrave: Now let's talk about how that's translated into our performance in Q1. We flew 17,333 hours in the quarter, a 6% increase from a year ago, and we did that with nearly 20% fewer aircraft. What's even more impressive is that this performance essentially matched Q4, which is always our busiest quarter due to the very high demand over the holidays. We are extremely pleased with this performance. Revenue tells the story even better. We generated $88 million in Q1, up 10% year over year, again with nearly 20% fewer aircraft. Nothing speaks more clearly to our transformation than delivering more flight hours and revenue with far fewer aircraft.
Speaker Change: Now, let's talk about how that's translated into our performance in Q1.
Speaker Change: We flew 17333 hours in the quarter.
Speaker Change: A 6% increase from a year ago, and we did that with nearly 20% fewer aircrafts well.
Speaker Change: What's even more impressive is that this performance essentially.
Speaker Change: Matched Q4, which is always our busiest quarter due to the very high demand over the holidays.
Speaker Change: We are extremely pleased with this performance.
Speaker Change: Revenue tells the story, even better we generated $88 million in Q1 up 10% year over year again with nearly 20% fewer aircrafts.
Speaker Change: Nothing speaks more clearly to our transformation and delivering more flight hours and revenue with far fewer aircrafts. This performance has been driven by strong customer demand better fleet utilization and much higher aircraft availability.
Jim Segrave: This performance has been driven by strong customer demand, better fleet utilization, and much higher aircraft availability. To add more color, although we removed more than 20 revenue-generating aircraft over the past year, our active membership grew by 38 percent. This kind of leverage is exactly what our vertically integrated model is designed to capture. Our member-to-aircraft ratio is now 12.8, still the lowest in the industry among the major players, giving us ample runway to grow while continuing to deliver the service our customers expect. We're up nearly 4% with some benefit from favorable aircraft mix. As we add more challengers.
Speaker Change: To add more color, although we removed more than 20 revenue generating aircraft over the past year, our active membership grew by 38%.
This kind of Leverages exactly what our vertically integrated model is designed to capture.
Speaker Change: Our member to aircraft ratio is now 12.8 still the lowest in the industry among the major players, giving us ample runway to grow while continuing to deliver the service our customers expect.
Right.
Speaker Change: We're up nearly 4% with some benefit from favorable aircraft mix.
Speaker Change: As we add more challengers.
Jim Segrave: We expect this trend to continue throughout 2025 and beyond. Non-program charter revenue per aircraft, while now a smaller share of total revenue due to rapid growth in our direct-to-customer recurring programs, still increased 9% year-over-year. Utilization per member increased by 13 percent. That's a healthy trend, and when combined with improving flight margins and rising dispatch availability, it makes the foundation even stronger. I also want to remind everyone again, at our current scale, each 1% improvement in dispatch availability adds roughly $3 million to our bottom line annually. So this isn't just about service quality, it's a major driver of profitability.
Speaker Change: We expect this trend to continue throughout 2025 and beyond.
Speaker Change: Non program charter revenue per aircraft, while now now a smaller share of total revenue due to rapid growth in our direct to customer recurring programs still increased 9% year every year.
Speaker Change: Utilization per member increased by 13% that's.
Speaker Change: That's a healthy trend and when combined with improved improving flight margins and rising dispatch availability. It makes the foundation even stronger.
Speaker Change: I also want to remind everyone again at our current scale each 1% improvement in dispatch availability adds roughly 3 million to our bottomline annually. So this isn't just about service quality, it's a major driver of profitability and.
Jim Segrave: And we fully expect to continue improving our dispatch availability through operational enhancement.
Speaker Change: And we fully expect to continue improving our dispatch availability through operational enhancements.
Speaker Change: We have been asked how financial market volatility or trade developments might affect our business, let me speak to what we're actually see.
Jim Segrave: We have been asked how financial market volatility or trade developments might affect our business. Let me speak to what we're actually seeing. Contrary to reports of weakening demand in both leisure and business travel, our Q1 2025 revenue by retail charter activity was up 10% and April was up 15% year over year. Engagement from new and existing members continues to grow. Utilization trends remain strong. While formal market share data has not been published yet, based on Q1 and April, we are confident we're continuing to take share, both from competitors and new entrants. Our improved fleet, reliability, and service are accelerating this growth.
Speaker Change: Contrary to reports of weakening demand in both leisure and business travel.
Speaker Change: Our Q1 2025 revenue retail charter activity.
Speaker Change: It's up 10% and April was up 15% year every year.
Speaker Change: Engagement from new and existing members continues to grow.
Speaker Change: Utilization trends remained strong.
Speaker Change: Wow formal market share data has not been published yet based on Q1 in April we are confident we're continuing to take share from competitors and new entrants.
Speaker Change: Our improved fleet reliability and service are accelerating this growth.
Jim Segrave: While our customer base isn't overly sensitive to interest rates or currency fluctuation, what we are seeing is a modest shift from international to domestic travel, which plays to our strengths given our U.S.-based fleet. On the cost side, there's been a lot of speculation around tariffs and trade policy. We believe the uncertainty has slowed some whole aircraft and fractional purchases. but customer confidence continues to rise each day. I will not attempt to predict global trade negotiations, but if policies make it harder to build aircraft outside the U.S., it is likely this will only increase the value of our fleet.
Speaker Change: While our customer base isn't overly sensitive to interest rates our currency fluctuation. What we are seeing is a modest shift from international to domestic travel which plays to our strengths given our U S based fleet.
Speaker Change: Yeah.
Speaker Change: On the cost side, there's been a lot of speculation around tariffs and trade policy.
Speaker Change: We believe the uncertainty has slowed some whole aircraft and fractional purchases.
Speaker Change: Customer confidence continues to rise each day.
Speaker Change: Will not predict I will not attempt to predict global trade negotiations, but if policies make it harder to build aircraft outside the U S. It is likely this will only increase the value of our fleet.
Jim Segrave: This is where we could have a real advantage.
Speaker Change: This is where we can have a real advantage, we built fly exclusive to be vertically integrated we manage fly maintain refurbish and repair our own aircrafts.
Jim Segrave: We built flyExclusive to be vertically integrated. We manage, fly, maintain, refurbish, and repair our own aircraft. That gives us control over quality, cost, and uptime. If the industry faces bottlenecks, we believe we'll be in a stronger position than most, ready to capture market share and serve our customers without disruption.
Speaker Change: That gives us control over quality cost and uptime.
Speaker Change: Industry faces bottlenecks, we believe we'll be in a stronger position than most ready to capture market share and serve our customers without disruption.
Speaker Change: Let's turn to customer programs jet club had another strong quarter sales were up 25% compared to Q1 last year and active members grew about 192 over the same period of the.
Jim Segrave: Let's turn to customer programs. Jet Club had another strong quarter. Sales were up 25% compared to Q1 last year, and active members grew by 192 over the same period. On the fractional side, Q1 is typically slower for new purchases. But in Q1, we recorded $16.2 million in fractional program activity, including $7.6 million in new fractional share sales and $8.6 million in fractional flight revenue. That's up 100% year-to-date versus Q1 2024. And that's with many customers still waiting for clarity around the new tax bill and whether it includes 100% bonus depreciation. Interest remains strong, especially as more challenges enter service and our new XOS Gen 2s near delivery.
Speaker Change: The fractional side Q1 is typically slower for new purchases, but in Q1, we recorded $16 $2 million in fractional program activity, including $7 6 million in new fractional share sales and $8 6 million in fractional flight revenue.
Speaker Change: That's up 100% year to date versus Q1 2024.
Speaker Change: And that's with many customers still waiting for clarity around the new tax bill and whether it includes 100% bonus depreciation.
Speaker Change: Interest remains strong, especially as more challenges enter service and our new X L. S. Gen Twos near delivered these assets are in high demand and we expect conversations to accelerate as the year progresses.
Jim Segrave: These assets are in high demand, and we expect conversations to accelerate as the year progresses.
Speaker Change: I also want to highlight the continued growth of our MRO paint and interior business, we generated $1.8 million and external MRO revenue in Q1 up 18% over Q1 2024.
Jim Segrave: I also want to highlight the continued growth of our MRO, paint, and interior business. We generated $1.8 million in external MRO revenue in Q1, up 18% over Q1 2024. While a small portion of our total revenue, we see very strong long-term growth potential for this division. And as I've said before, it's a clear competitive advantage. Few operators do what we do in-house. If supply chains tighten from trade issues, our MRO business becomes even more valuable as a revenue stream, a profit center, and a driver of fleet up.
Speaker Change: While a small portion of our total revenue, we see very strong long term growth potential for this division and as I've said before it's a clear competitive advantage few operators do what we do in house.
Speaker Change: Its supply chain tightened from trade issues, our MRO business becomes even more valuable as a revenue stream a profit center and a driver asleep Uptown.
Jim Segrave: Turning to Profitability. We reduced our adjusted EBITDA loss to $6.3 million in Q1. That's a $13 million improvement over Q1 2024, nearly a 70% year-over-year improvement. We made that progress by expanding flight margins and continuing to improve SG&A. Compared to last year, SG&A was down 17%, and SG&A as a percent of revenue declined over 7 points to roughly 24%. That 7-point improvement saved us over $6 million this quarter alone, or $24 million on an annualized basis.
Speaker Change: Turning to profitability.
Speaker Change: We reduced it.
Speaker Change: Our adjusted EBITDA loss of $6 3 million in Q1, that's a $13 million improvement over Q1 2020 for nearly a 70% year over year improvement, we've made that progress by expanding flight margins and continuing to improve SG&A compared to last year SG&A was.
Speaker Change: 17% and SG&A as a percent of revenue declined over seven points to roughly 24%.
Speaker Change: That seven point improvement saved us over $6 million this quarter alone or 24 million on an annualized basis.
Jim Segrave: We've built a more efficient and scalable public company infrastructure, and we expect SG&A to continue declining as a percentage of revenue. SG&A revenue per employee increased more than 40% in 2024 and continues to rise in 2025.
Speaker Change: He's built a more efficient and scalable public company infrastructure, and we expect SG&A to continue declining as a percent percentage of revenue.
Speaker Change: SG&A revenue per employee increased more than 40% in 2024 and continues to rise in 2025.
Jim Segrave: moving to capital markets and our 2025 financing plans. first quarter. We believe this transaction will create operational efficiencies and support continued growth. As an update, we filed the S-store a few weeks ago and anticipate closing in the next 60 days as planned. JetAI has already met the minimum cash condition, and we expect that cash position to increase further before close, further strengthening our balance sheet. Over the last few quarters, we've developed multiple financing options to support our challenger acquisitions and incoming XLS deliveries in the second half of the year. This puts us in a strong position to execute our growth plan in 2025.
Speaker Change: Moving to capital markets, and our 2025 financing plan.
Speaker Change: We are now.
Speaker Change: The first quarter. We believe this transaction will create operational efficiencies and support continued threat as an update we filed the S. Four a few weeks ago and anticipate closing in the next 60 days and claims.
Speaker Change: Hey, I have already met the minimum cash condition.
Speaker Change: We expect that cash position to increase further before close further strengthening our balance sheet.
Speaker Change: Over the last few quarters, we've developed multiple financing options to support our challenger acquisitions and incoming X L. S deliveries in the second half of the year.
Speaker Change: This puts us in a strong position to execute our growth plan in 2025.
Jim Segrave: We are optimistic that we'll be included in the Russell 2000 in the coming weeks. We now meet all qualification criteria. While inclusion is never guaranteed, we've checked every box to reach that milestone.
Speaker Change: We are optimistic.
Speaker Change: That will be included in the Russell 2000 in the coming weeks, we now meet all cloud qualification criteria.
Speaker Change: While inclusion is never guaranteed we checked every box to reach that milestone.
Jim Segrave: Lastly, with the filing of our Q1 2025 financials, we are now shelf-eligible and plan to file an S3 shelf registration on or around June 2. This will provide access to additional funds to accelerate aircraft acquisition. And just as important, the funds we expect to raise will further solidify our liquidity, reduce leverage, improve cash flow, and eliminate our warrant overhang.
Speaker Change: Lastly, with the filing of our Q1 'twenty 'twenty five financials, we're now shelf eligible and plan to file an S. Three shelf registration on or around June 2nd.
Speaker Change: This will provide access to additional funds to accelerate aircraft acquisition and just as important the funds. We expect to raise will further solidify our liquidity reduce leverage improve cash flow and eliminate our warrant overhang.
Jim Segrave: To wrap up, we believe 2025 will be the year we establish a clear, sustained record of EBITDA growth and positive free cash flow. Q1 started strong with meaningful improvements across the board. We are more confident than ever in our strategy.
Speaker Change: To wrap up we believe 2025 will be the year, we established a clear sustained a record of EBITDA growth and positive free cash flow.
Speaker Change: Q1 started strong with meaningful improvements across the board, we are more confident than ever in our strategy I couldn't be more proud of our team and I'm grateful to our shareholders analysts and partners for their continued support to our employees from our administrative and accounting staff to our pilots and technicians our.
Jim Segrave: I couldn't be more proud of our team, and I'm grateful to our shareholders, analysts, and partners for their continued support. To our employees, from our administrative and accounting staff, to our pilots and technicians, our dispatchers, customer service teams, and our sales and marketing organization, thank you. Your hard work and dedication to our company, our shareholders, our members, and our customers is what makes this all possible.
Speaker Change: Dispatchers customer service teams and our sales and marketing organization. Thank you your hard work and dedication to our company our shareholders our members.
Speaker Change: Our customers is what makes this all possible.
Speaker Change: With that I'll turn it over to Brad to walk through the financials.
Brad Garner: With that, I'll turn it over to Brad to walk through the finale. Thank you, Jim. I'll say again, as one of the newer members of the flyExclusive... that the energy and excitement at the company is real. Our improvement year-over-year is a testament to the continued execution against our strategic initiatives.
Brad: Thank you Jim.
Speaker Change: I'll say again is one of the newer members of the fly exclusive team.
Speaker Change: The energy and excitement at the company is real.
Speaker Change: Our improvement year over year is a testament to the continued execution against our strategic initiatives.
Brad Garner: Modernizing Our Fleet Through Disposing Non-Performing Aircraft adding challenge rightsizing the cost structure to an appropriate and scalable level, and institutionalizing the operation. I'll begin with the first quarter's financial highlights. As Jim mentioned, flyExclusive reported Q1 2025 revenues of $88 million. which again is up roughly 10% year over year. Strong result given a roughly 20% reduction in the fleet due to the disposals of non-performing aircraft over the past year. The growth was broad-based and reflects strength in the demand for our charter, jet club and fractional business. Total fractional and Jet Club membership increased nearly 30% over the last year, and we ended the quarter with over 1,000 customers contributing to revenue.
Speaker Change: Modern Isaac our fleet disposing nonperforming aircrafts.
Speaker Change: Adding challengers right sizing the cost structure to an appropriate and scalable level.
Speaker Change: And institutionalizing the operation.
Speaker Change: I'll begin with the first quarter's financial highlights.
Speaker Change: As Jim mentioned fly exclusive reported Q1, 2025 revenues of $88 million, which again is up roughly 10% year over year.
Speaker Change: A strong result, given a roughly 20% reduction in the fleet due to the disposals of nonperforming aircraft over the past year.
Speaker Change: The growth was broad based and reflects strength in the demand for our charter jet club and fractional businesses.
Speaker Change: Total fractional and jet club membership increased nearly 30% over last year and we ended the quarter with over 1000 customers contributing to revenue.
Brad Garner: during the last three Additionally, in what's typically a slower quarter for fractional sales, we saw strength driven by the onboarding of new jets in the fleet. Fractional program activity generated $16.2 million of sales in Q1, up 100% year-over-year. And as Jim mentioned, our pipeline remains strong. Flight revenues generated from our fractional members more than doubled over last year to $8.6 million during the pandemic. And as we've seen in prior quarters, we continue to see a positive shift in our revenue mix to contractually committed demand through our fractional and Jet Club membership program. We also continued the momentum from Q4 2024 in our MRO business, which continues to scale and has high inbound inquiry and a growing backlog.
Speaker Change: During the last three months.
Speaker Change: Additionally, in what's typically a slower quarter for fractional sales, we saw strength driven by the Onboarding of new jets in the fleet.
Speaker Change: Fractional program activity generated $16 $2 million of sales in Q1 up 100% year over year.
Jim Seagraves: Jim mentioned, our pipeline remains strong.
Jim Seagraves: Flight revenues generated from our fractional members more than doubled over last year to $8 $6 million during the quarter.
Jim Seagraves: And as we've seen in prior quarters, we continue to see a positive shift in our revenue mix to contractually committed demand through a fractional and jet club membership programs.
Jim Seagraves: We also continued the momentum from Q4 2024.
Jim Seagraves: Our MRO business, which continues to scale and has high inbound inquiry and a growing backlog.
Brad Garner: MRO revenues of $1.8 million in the quarter were 18% higher than a year ago, and we have ample capacity to continue growing this. With strong demand and increased revenue, we continue to realize improvement in our operating margins. Gross margin for Q1 2025 was roughly 13%. 600 Basis Point Improvement Year-Over-Year. This step function improvement is a testament to the successfully execution on our fleet refresh initiative. are improved dispatch availability and effective cost management. in a seasonally slower quarter are operating efficiently. and improved fleet utilization and uptime drove strong results. We believe there's further potential for operating margin expansion through the busier seasons and with the ongoing progress of our fleet modernization initiative coupled with ever greater operational efficiency.
Jim Seagraves: Tomorrow revenues of $1.8 million in the quarter were 18% higher than a year ago, and we have ample capacity to continue growing this business.
Jim Seagraves: With strong demand and increased revenue, we continue to realize improvement in our operating margins.
Jim Seagraves: Gross margin for Q1, 2025 was roughly 13% a 600 basis point improvement year over year.
Jim Seagraves: This step function improvement is a testament to the successfully execution on our fleet refresh initiative.
Jim Seagraves: Our improved dispatch availability and effective cost management.
In a seasonally slower quarter, our operating efficiency and improved fleet utilization and upturn uptime drove strong results.
Jim Seagraves: We believe there's further potential for operating margin expansion through the busier seasons and with the ongoing progress of our fleet modernization initiatives, coupled with ever greater operational efficiencies.
Brad Garner: In summary, I'd reemphasize Jim's statement earlier that our operating model in 2025 is transformed and will only improve. The operating leverage potential we see ahead is significant. And with continued demand for both our jet club and fractional programs paired with substantial improvement in fleet utilization, we expect 2025 to be a leapfrog year for the company.
Jim Seagraves: In summary, I'd reemphasize Jim's statement earlier that our operating model in 2025 has transformed and will only improve.
Jim Seagraves: The operating leverage potential we see ahead as significant.
Jim Seagraves: And with continued demand for both our jet club in fractional programs paired with substantial improvement in fleet utilization, we expect 2025 to be a leapfrog year for the company.
Brad Garner: Moving to our cost structure. We continued to drive improved operating leverage as our SG&A costs declined to 24% of revenue, an improvement of nearly 700 basis points year-over-year. These savings were the result of decisive actions taken over the past year to reduce SG&A headcount by 23%. improve processes to realize operational efficiencies and scale, and exit from a number of expensive outside consulting and professionalism. This work culminated in a 43% increase in our revenue per SG&A. culminating at $147,000 at the end of the quarter. We expect to continue to see significant scale realized over the balance of 2025, resulting in SG&A relative to our sales to continue to decline.
Moving to our cost structure.
Jim Seagraves: We continued to drive improved operating leverage as our SG&A cost declined 24% of revenue an improvement of nearly 700 basis points year over year.
Jim Seagraves: These savings were the result of decisive actions taken over the past year to reduce SG&A head count by 23% improved processes to realize operational efficiencies and scale and exit from a number of expensive outside consulting and professional fees.
Jim Seagraves: This work culminated in a 43% increase in our revenue per SG&A head count co.
Jim Seagraves: Culminating at $147000 at the end of the quarter.
Jim Seagraves: We expect to continue to see significant scale realized over the balance of 2025, resulting in SG&A relative to our sales to continue to decline.
Jim Seagraves: As a result of these margin enhancements and cost management actions, our adjusted EBITDA loss narrowed to $6 $3 million during the quarter, a $13 million and 67% improvement year over year.
Brad Garner: as a result of these margin enhancements and cost management actions. Our adjusted EBITDA loss narrowed to $6.3 million during the quarter, a $13 million and 67% improvement year-over-year. As we exit Q1, we're encouraged by the demand in April and fully expect to continue to take steps forward to generating positive adjusted EBITDA in 2025 by capitalizing on that increasing demand. adding significantly to the five challengers online currently. Additional Aircraft Acquisitions in the Pipeline. Improved operational efficiencies and dispatch availability. and additional actions on cost management.
Jim Seagraves: As we exit Q1, we're encouraged by the demand in April and fully expect to continue to take steps forward to generating positive adjusted EBITDA in 2025 by capitalizing on that increasing demand.
Jim Seagraves: Adding significantly to the five challengers online currently.
Jim Seagraves: Additional aircraft acquisitions in the pipeline improved operational efficiencies and dispatch availability.
Jim Seagraves: And additional actions on cost management.
Jim Seagraves: Beyond EBITDA, we continue to strengthen our liquidity and balance sheet flexibility.
Brad Garner: Beyond EBITDA, we continue to strengthen our liquidity and balance sheet flexibility. and believe there's opportunity in the future to add value to reducing our cost of capital. In Q1, we repaid the $59 million line of credit, resulting in annual savings of roughly $3.6 million. Additionally, in late March, we amended our Senior Secure Note to extend our maturity until 2027. and also converted a sponsor loan to equity. in addition to these actions, which improved our liquidity. We continued our positive momentum in our Jet Club and Fractional Retail sales. Jet Club new and renewal business increased $34 million during the quarter, a 32% increase year-over-year.
Jim Seagraves: And believe there's opportunity in the future to add value to reducing our cost of capital in.
Jim Seagraves: In Q1, we repaid the $59 million line of credit, resulting in annual savings of roughly $3.6 million.
Jim Seagraves: Additionally in late March we amended our senior secured note to extend our maturity until 2027.
Jim Seagraves: And also converted a sponsor loan to equity.
Jim Seagraves: In addition to these actions, which improved our liquidity.
Jim Seagraves: We continued our positive momentum in our jet club in fractional retail sales.
Jim Seagraves: Jet club, new and renewal business increased $34 million during the quarter, a 32% increase year over year.
Jim Seagraves: Retail sales of fractional shares increased 91% year over year to seven and a half million dollars during Q1.
Brad Garner: Retail sales of fractional shares increased 91% year over year to $7.5 million during with the Simplified JC-25 Jet Club Contract, a robust fractional pipeline.
Jim Seagraves: With the simplified JC twenty-five jet club contract a robust fractional pipeline.
Brad Garner: and the breaking news just yesterday that the return of 100% bonus depreciation is expected in an upcoming tax bill. The outlook for the balance of 2025 remains strong.
Jim Seagraves: And the breaking news just yesterday that the return of 100% bonus depreciation is expected in an upcoming tax bill.
Jim Seagraves: The outlook for the balance of 2025 remains strong.
Brad Garner: Lastly, as Jim mentioned, we filed an amended S-IV related to the JET-AI merger agreement. and anticipate closing that transaction in the near future. As we've highlighted previously, we expect the JetAI merger to realize operational efficiency. with their fleet and to provide additional capital to accelerate our 2025 growth. Each of these developments allows us to capitalize on and accelerate the value generation drivers We've spent this call highlighting.
Jim Seagraves: Lastly, as Jim mentioned, we filed an amended S. Four related to the jet a merger agreement.
Jim Seagraves: And anticipate closing that transaction in the near future.
Jim Seagraves: As we've highlighted previously we expect the jetty a merger to realize operational efficiencies with their fleet and to provide additional capital to accelerate our 2025 growth plans.
Jim Seagraves: Each of these developments allows us to capitalize on and accelerate the value generation drivers.
Jim Seagraves: We've spent this call highlighting.
Brad Garner: A strong and improving balance sheet is an important priority for flyExclusive. especially given the differentiated competitive advantage our model and refresh fleet have in today's market.
Jim Seagraves: A strong and improving balance sheet is an important priority for fly exclusive, especially given the differentiated competitive advantage our model and refreshed fleet have in today's market.
Brad Garner: To close, the execution by our team, from our pilots and technicians to our sales, finance, and support teams against our initiatives have resulted in a remarkable transformation in our business. of modernizing. expanding market share, improving utilization and availability resulting in expanded margins. a more scalable and efficient cost structure, and most importantly, an intense focus on customer service and experience. We still have work ahead of us, but the momentum is real. We are more streamlined, more capable, and better aligned than at any point in our history. I'm proud of what we've accomplished and even more excited about where we're headed.
Jim Seagraves: To close the execution by our team from our pilots and technicians to our sales finance and support teams against our initiatives have resulted in a remarkable transformation in our business.
Jim Seagraves: Modernizing fleet.
Jim Seagraves: [noise] spanning market share improving utilization and availability, resulting in expanded margins a more scalable and efficient cost structure and most importantly, an intense focus on customer service and experience.
Jim Seagraves: We still have work ahead of us, but the momentum is real.
Jim Seagraves: We are more streamlined more capable and better aligned than at any point in our history.
Jim Seagraves: I'm proud of what we've accomplished and even more excited about where we're headed.
Brad Garner: Thank you all for joining, and now I'll turn it back to the Thank you, ladies and gentlemen. Thank you for your participation.
Jim Seagraves: Thank you all for joining and now I'll turn it back to the operator.
Speaker Change: Thank you ladies and gentlemen, thank you for your participation. This now concludes our conference.
Operator: This now concludes our conference.
Jim Seagraves: Yeah.
Jim Seagraves: Yeah.