Blade Air Mobility, Inc.

Good morning, ladies and gentlemen, and welcome to the Blade Air Mobility Fiscal Second Quarter 2023 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone, and you will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. As a reminder, this call is being recorded. I would now like to turn the conference over to Mr. Robby Johnny, Vice President of Investor Relations. You may begin.

Thanks and good morning. Thank you for standing by and welcome to the Blade Air Mobility conference call and webcast for the quarter ended June 30th, 2023. We appreciate everyone joining us today. Before we get started, I would like to remind you of the company's forward-looking statement in safe harbor language. Statements made in this conference call that are not historical facts, including statements about future time periods, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties, and actual future results may materially differ from those expressed or implied by the forward-looking statements. We refer you to our SEC filings, including our annual report on Form 10-K filed with the SEC, for a more detailed discussion of the risk factors that could cause these differences. Any forward-looking statements provided during this conference call are made only as of the date of this call. As stated in our SEC filings, Blade disclaims any intent or obligation to update or revise these forward-looking statements, except as required by law. During today's call, we will also discuss certain non-GAAP financial measures which we believe may be useful in evaluating our financial performance. A reconciliation of the most directly comparable consolidated GAAP financial measures to those non-GAAP financial measures is provided in our earnings press release and investor presentation. Our press release, investor presentation, and our Form 10-Q are available on the investor relations section of our website at ir.blade.com. These non-GAAP measures should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Hosting today's call are Rob Wiesenthal, founder and chief executive officer of Blade, and Will Haburn, chief financial officer. I will now turn the call over to Rob Wiesenthal. Rob?

Thank you, Robbie. Good morning, everyone. This morning, we reported record second quarter results with revenue in the June 2023 quarter increasing 71% to $61 million versus $35.6 million in the comparable 2022 period. We saw very strong growth across both our passenger and medical segments, a testament to the resilience of our diversified business model and the enduring value we provide to our customers. I'm pleased that this is now our eighth consecutive quarter with results ahead of our internal forecasts on all team metrics. Flight profit increased 103% to $10.4 million in the June 2023 quarter versus $5.1 million in the comparable 2022 period representing a roughly three percentage point increase in our flight margin to 17% versus 14.3% in the comparable 2022 period. Adjusted EBITDA improved by 1.7 million to negative 4.4 million in Q2 2023 versus a negative 6.1 million in the comparable 2022 period and demonstrates continued progress on our path to profitability. As a percentage of revenue, Adjusted EBITDA margin improved by 10 percentage points to negative 7% in the June 2023 quarter versus negative 17% in the comparable 2022 period. This was driven by a significant increase in fly profit that outpaced growth both on our adjusted corporate expense and revenue. As evidenced by the quarter's results, we remain on track with our commitment to deliver a meaningful improvement in full-year adjusted EBITDA in 2023 versus 2022, and we also expect further year-over-year adjusted EBITDA improvement in the second half of 2023. Turning to some highlights from the quarter, in our metamobility organ transport business, we delivered another record quarter with 99% organic growth, Driven by hospital wins, continued expansion with existing hospitals, and strong end market growth, we remain very bullish on the outlook for metamobility, particularly as advances in organ preservation and perfusion technology continue to increase the size of our addressable market, both in terms of the number of organs being transplanted, as well as the distance organs can travel in order to get from the organ donor to the transplant recipient. We believe this is a mega trend that is in the early innings and could support multiple years of above-trend market growth, which is consistent with what we are seeing both in public data and amongst our own customers. To give a recent example, during the quarter, we were proud to provide air transport and logistics services to our partners at Mass General Hospital and Paragonics Technologies, a leader in organ preservation technology. This supported a record-breaking transplant case in which a donor heart traveled over 2,506 nautical miles from Juneau, Alaska to Boston, Massachusetts. This mission set the record for the longest distance a donor heart has ever traveled to a recipient. With more than 20 aircraft, 100% dedicated to Blade with 24 hours, seven day a week coverage, and many more available through our asset life platform, We believe we have built the most reliable and cost-effective national network for organ transportation in the United States, helping to deliver thousands of organs every year. Moving on to our passenger business, short-distance delivered another quarter of significant growth, with revenue up 75% driven by our acquisitions in Europe and growth across our short-distance route network. In our Blade Airport service, which provides passengers with the ability to book individual seats on five minute flights between Manhattan and New York area airports, revenue grew by approximately 65% compared to the same period last year, making it the fastest growing product in our passenger portfolio. This growth was fueled by a 40% increase in seats flown in the second quarter of 2023 versus the comparable prior year period combined with double-digit improvement in average revenue per seat. A notable highlight is that over half our unique airport passengers this quarter were first-time Blade flyers, highlighting the strength and efficiency of our marketing and customer acquisition efforts. Furthermore, during this past quarter, our longest-running Blade airport route connecting the west side of Manhattan and JFK was profitable for the first time. giving us confidence that the investments we're making in the service and schedule continue to pay off while building our loyal urban air mobility flyer base. With respect to recent trends in Blade Airport, we are very encouraged by the continued strong passenger growth and pricing trends we have seen thus far in the third quarter. Our customers see the value in this product as evidenced by our continued growth in average revenue per seat, which has been above $300 in recent weeks as more of our flyers choose from upgraded options, and fare classes, which we continue to optimize within our on-demand-based pricing model. Meanwhile, our partnership with JetBlue continues to gain traction. Nearly one year after launch, we were pleased to see the benefits in full force. In recent weeks, we've consistently seen JetBlue drive more than 100 flyers to Blade Airport per week. This success highlights the importance of building strong relationships with corporate and air travel partners, to enhance product awareness, and we look forward to bringing on many more corporate partners in the coming quarters. Moving to Blade Europe, during the second quarter, we introduced thousands of European and international passengers to the Blade brand and welcomed them to our new terminals in Monaco, Nice, and Cannes. From a market standpoint, we did notice that travel patterns in our specific regions normalized relative to record levels experienced last year. Additionally, our integration of the three acquired European businesses is moving slower than we had planned, which combined with lower fleet availability due to aircraft maintenance delays has added to our integration and operating costs in the region. We will discuss the financials in more detail, but we remain committed to the long-term opportunity to grow our business in Europe. In the short term, we are adapting to this market environment by focusing on what we can control, dynamically adjusting our pricing model and coordinating our integration work to enjoy the cost efficiencies that were a key tenant of our acquisition with the goal of delivering sustained profitability in the region. Moreover, we are encouraged by the positive feedback and reception from European passengers who have experienced the Blade brand. Their response reinforces our dedication to providing exceptional service for every Blade passenger worldwide. Now, on the topic of electric vertical aircraft, or EVA, or what is also known as EVTOL, it has been an eventful few months for the industry. with perhaps the most notable development being the release of the FAA's Advanced Air Mobility, or AAM, implementation plan in July, which provides for the gradual introduction of EVA into our airspace with the goal of reaching scale operations in one or more cities by 2028. We believe this timeline is both credible and achievable, and most importantly, believe this approach is perfectly aligned with Blade's strategy focused on establishing exclusive passenger terminals at existing heliports and airports in the most active air mobility corridors operating around the world today. Today, we have 16 exclusive passenger terminals around the world that service existing rotorcraft today, as well as EVA, in the future. We believe this presence creates a significant competitive mode for Blade, and even once EVA is certified in the future, as new EVA infrastructure will take considerable time for local and regulatory approvals, and frankly, on a timeline the market has not yet considered. To that end, our recently announced agreement in May to operate and revitalize the new Port Hellestop in Jersey City, New Jersey, gives access to one of the largest and most successful mixed-use communities on the Hudson River waterfront. As part of the agreement, we launched a pilot program for charter flights and are analyzing the viability of the first-ever scheduled by-the-seat service between this New Jersey helistop and New York area airports and heliports. Meanwhile, on the international front, we were excited to announce the significant extension of our partnership with EVE Air Mobility as unveiled at the 54th International Paris Air Show in June. We are taking the first steps to transform air transportation in Europe, starting with France. Our collaboration with EVE aims to integrate their state-of-the-art electric vertical aircraft into Blade's expansive European route network, subject to the necessary regulatory approvals and certifications. This alliance with EVE is a testament to Blade's commitment to being equipment agnostic. By working together with our industry partners, we intend to usher in a new era of safe, quiet, and sustainable air travel, enhancing connectivity and mobility in all of our major regions. With that, I'll turn the call over to Will.