Blade Air Mobility, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to Blade Air Mobility Fiscal Fourth Quarter 2023 Earnings Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session, and instructions will follow at that time. As a reminder, this call is being recorded. I would like now to turn the conference over to Mr. Lee Gold, Investor Relations. Please go ahead.

Thanks and good morning. Thank you for standing by and welcome to the Blade Air Mobility conference call and webcast for the quarter-ended December 31st, 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 meeting of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties, and actual future results may differ materially from those expressed or implied by the forward-looking statements. We refer you to our SEC filings, including our annual report on Form 10-K filed with the SEC, for 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 historical comparable consolidated GAAP financial measures to those historical non-GAAP financial measures is provided in our earnings press release and our investor presentation. Our press release, investor presentation, and our Form 10-Q and 10-K filings are available on the investor relations section of our website at ir.blade.com. These non-GAAP measures should not be considered in isolation or as 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 Habern, chief financial officer. I will now turn the call over to Rob Wiesenthal. Rob?

Thank you, Lee. Good morning, everyone. I am very pleased with our progress we made during 2023, another record year for Blade. Our financial trajectory is strong, sound, and now tangible. In 2023, our full-year revenue increased 54.1% versus the prior year to $225.2 million, while flight profit increased by 84% as our intense focus on margin enhancement initiatives generated results yet again this quarter. This led to a $10.8 million improvement in adjusted EBITDA versus the prior year period to negative $16.6 million for the full year 2023. I'm especially pleased to share that Blade Airport, our helicopter service between Manhattan and New York area airports, starting at 195 per seat, delivered positive flight profit, not just for Q3 and Q4, but also for the full year 2023. When we launched Blade Airport in 2021, we set up the unit economics to be profitable at just above two out of six seats sold per flight. Though we knew along the way that our growth and customer acquisition metrics were pointing in the right direction, the two-year ramp-up process has required hard work from our operations team and patience from our investors. I'd like to take a minute to thank our flyer experience, flyer relations, operations, and on-the-ground logistics teams, and our ground transport partners at Mercedes-Benz USA for working so diligently to make this product a success. We look forward to continued growth this year and beyond, as we begin to transition to EVA electric vertical aircraft or EVTOL in the coming years. On the operational front, we are excited to announce the acquisition of eight fixed-wing jet aircraft to support our continued rapid growth in medical, enabling lower cost service and improved availability for the hospitals we serve and improved unit economics for us. Our medical business has more than tripled since our acquisition of Trinity in 2021, presenting us with an opportunity to further leverage our scale through the purchase of a limited number of jet aircraft. By purchasing aircraft that we already use exclusively and by maintaining the existing operator and crews, we are well positioned to capture incremental fixed cost leverage without the risk of building a new medical aircraft operation from the ground up. We believe this change will further improve our competitive positioning without compromising the benefits of our asset-light model as a vast majority of our medical flights and nearly 100% of our passenger flights will continue to be serviced by our very select group of third-party owned and operated aircraft in the U.S., Europe, and Canada. After this rewarding year of strong growth, flight profit margin expansion, and cost structure improvements, we are now confident to begin providing guidance to our investors for revenue and adjusted EBITDA for the year ending December 31, 2024, and 2025. For the current year, 2024, we expect to have positive adjusted EBITDA, and for 2025, we expect adjusted EBITDA in the double-digit millions. I'll let Will provide additional details shortly, but first, I'd just like to emphasize that we do not take providing these public goals lightly, which is exactly why we waited to reach adequate scale in our medical and passenger businesses, which provided better forward visibility, enabling us to put a stake in the ground on achieving profitability. Now, I'll provide a few quick highlights from our fourth quarter ending December 31st, 2023. Flight profit increased 65.7% to $9 million in the current quarter versus $5.4 million in the prior year period, well ahead of our expectations, driven by strong growth in our medical business and improved profitability across our U.S. short-distance business. We're pleased to see flight profit growing significantly ahead of revenue which increased 24.5% to $47.5 million in Q4 2023. I'll let Will provide some additional details around our focus on flight profit maximization, but I'm happy to report that in medical, our increased use of dedicated aircraft and owned ground vehicles have helped us lower costs for our hospital customers while increasing average flight profit per trip, a win-win for this important business segment. Starting in passenger, short distance delivered another quarter of significant growth with revenue in Q4 2023 up 14% versus the prior year period, driven by improvements in Blade Airport, Europe, and Canada. As mentioned previously, we are especially pleased that Blade Airport alone delivered 40% plus year-over-year revenue growth in addition to positive flight contribution for the second quarter in a row. Our growth across passenger, coupled with continued improved profitability in Blade Airport, contributed to a $1.1 million increase in passenger segment adjusted EBITDA to negative $2.6 million in Q4 2023. In medical, revenue in Q4 2023 increased 48% versus the prior year period, driven by new hospital wins, business expansion with existing hospitals, and strong end market growth. As a reminder, this is 100% organic growth as we completed the Trinity acquisition in 2021. Medical segment adjusted EBITDA increased 57.8% to 2.5 million in Q4 2023, demonstrating the strong operating leverage of this business. As expected, our new TOPS organ placement service launched in December as planned. And I am very pleased with the initial progress our team has made with the Keyblade customer NYU Langone. We're staying focused and providing great service. It's early days of this exciting new business line, but we'll have a lot more to share on our growth plans in the coming months. These profitability improvements in both segments, coupled with a $0.7 million year-over-year decrease in our adjusted unallocated corporate expenses, led to a $2.7 million improvement in adjusted EBITDA versus the prior year period to negative $5.2 million in Q4 2023. Adjusted EBITDA improved as a percentage of revenues to negative 11.1% in Q4 2023 from negative 20.9% in Q4 2022. This proves the operating leverage we have enabling us to dramatically grow Blade without adding significant overhead. I'll let Will provide more details around Q4. But I will say that despite this being a seasonally light quarter for Blade, I am very pleased with our success on continued cost structure improvements and significant expansion to our dedicated aircraft fleet, highlighted by our acquisition of eight jet aircraft for our Oregon transportation business. And with $166.1 million in cash and short-term investments available to us, we believe Blade is in the best possible position to drive growth, both organically and by acquisition. With that, I'll turn the call over to Will. Thank you, Rob.