WhiteHorse Finance, Inc.

Good day, everyone, and welcome to the EVE Air Mobility Second Quarter 2025 Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask questions by pressing the star and 1 on your telephone keypad. You may withdraw your question by pressing star 2. Please note this call is being recorded and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Lucio Aldworth, Director of Investor Relations at EVE. Please go ahead.

Thank you, operator. Good morning, everyone. This is Lucio Aldworth, the Director of Investor Relations at EVE, and I wanted to welcome everyone to our second quarter 2025 earnings conference call. Our CEO, Johan Bordet, and CFO, Eduardo Couto, are joining me on the call today. And after their prepared remarks, we will open the call for questions, at which point, with Valentini, our Chief Technical Officer, will join us for more technical questions. We have a deck with a few slides and additional pictures that show our achievements in the quarter, as well as the testing phase of our full-scale prototypes. The deck is on our site at ir.evairmobility.com, so please feel free to download and follow it along. Let me first mention that today's conference call includes statements about events or circumstances that have not yet occurred. These are largely based on our current expectations and projections about future events and financial trends affecting our business and our future financial performance. These forward-looking statements are based on our current expectations and involve risks and uncertainties that could cause financial results to differ substantially from those expressed or implied in this conference call, and we undertake no obligation to update publicly or revise any forward-looking statements because of new information, future events, or other factors. For a more detailed list of these risks and uncertainties, please refer to our SEC filings available on our website. With that, I will now turn the presentation over to our CEO, Johan.

Thanks, Lucio. Good morning to all, and welcome to our second quarter 2025 conference call. We had a very exciting second quarter with several important developments, and we continue to advance our program development. In a nutshell, and we will talk about it in more details in the call, we unveiled our full-scale mock-up at the Perisher show in June with a new propeller configuration. We also announced our first firm order and signed additional LOIs. Last but not least, we are announcing today that we are bringing Beta Company to complement our suppliers list. Beta comes in with a proven and mature solution to the distributed supply propulsion of the eVTOL with the same lift and cruise aircraft configuration and this will give EVE operating flexibility and optionality in our program. Our schedule remains unchanged with expected TAP certification and entering the service in 2027. Starting with slide two, our eVTOL continues to advance and we redesigned the wing with a more aerodynamic profile for a more efficient cruise. We are now offering a taxi-wheeled version of the aircraft to facilitate ground operation and taxiing in congested landing sites. The DNA of our EV tells and change with eight lifters and a pusher designed for short routes and a pilot and four passengers. Flying should be very simple with a single pilot control side stick supported by Embraer's fifth generation of the fly-by-wire. This is a proven technology that improves passenger comfort and safety. Now, slide three and four shows a few pictures of our full-scale mock-up that was unveiled at the Paris Airshow last June. This is a true representation of our commercial aircraft and features comfortable full-flex configuration seatings for four passengers with a 32-inch pitch and external baggage compartment. This makes it the ideal for short urban flight up to 60 miles, including trips to and from airports. The reception from customers, partners, government officials, and also stakeholders was extremely positive, reflecting the strong interest and the support to our vehicle design and attributes, which clearly demonstrate our aviation and certification DNA. Now, moving to slide five. I am very happy to bring here our first LOI conversion of the letter of intent into a firm order from REVO. This is a helicopter operator with active helicopter airport shuttle and point-to-point operations in Sao Paulo region. As a reminder, Sao Paulo is the largest and busiest helicopter market in the world with over 400 aircraft and more than 2,000 daily flights. The city offers a great potential market for eVTOLs and REVO will launch operations in Sao Paulo region with our aircraft. We're very proud of this partnership. Besides that, REVO also signed a contract for our tech care aftermarket services. So in total, the contract for 50 aircraft and services has a total potential value of $250 million. We expect that to start producing revenues in 2027 now this firm order means that we'll begin to collect pre-delivery payment this will bring cash in the door and help to fund the assembly of the aircraft we are going to collect a substantial amount of pdps until delivery date very much in line with market practices but for competitive reasons we are not disclosing other specific terms of this contract Slide 6 shows two additional LOIs we signed during the quarter for a total of 104 EV tolls. These are two new customers with services in Brazil, the United States, and Costa Rica. We're also subscribing to the tech care services, so they do appreciate the value proposition of our product and aftermarket offering. This is actually a great way to introduce the next slide. On slide seven, it shows the total pre-order backlog that now stands at approximately 2,800 aircraft for a total value close to $14 billion based on the list price. This now includes non-binding letters of intent from 28 different customers as well as the firm order from RAVO. These orders are from over nine countries and different businesses, from mainlines to regional airline, helicopter operators, ride-sharing platform, and leasing companies. And because maintenance and support guarantees the proper aircraft operation, we are highly focused on providing the best-in-class services and support to eVTOL's operators. Therefore, we have also secured contracts with 14 different customers for our eVTEC care suite of aftermarket products, which could bring up to $1.6 billion in revenue to EVE over the first few years of operations. Importantly, EVE TechCare customers have placed LOIs to service around 1,100 aircraft, or about 40% of our pre-order book. As you can see, we also have 21 different customers for our air traffic management solution called Vector. And I believe this reflects the market leading value proposition we bring to our customers. Beyond that, together with our customers and authorities, we're also developing a strong network of partners in different areas such as infrastructure and energy to address one of the many challenges ahead for the urban air mobility, which is to create a whole new ecosystem besides simply developing an aircraft. Now, going to slide 8 and 9, you can see our more recent program advancement. Our full-scale engineering prototype is undergoing the last set of ground tests before it initiates its flight campaign. You may remember that we have already tested and installed the pusher motor a few months back. And after extensive tests on the lifters at the facilities of our suppliers, we have now started installing the first units. In fact, The top picture here shows the propeller spinning on its first test on the prototype. We are scheduled to receive the remaining motors shortly. In parallel, we signed with Beta an agreement to test their propulsion electrical motors on our prototype. Nidec continues committed and involved with our eVTOL and they bring engineering and production expertise. Well, Beta comes in with a startup mindset and adds agility to our program with a proven and tested track record of lift and cruise EV toll flights, along with their strong relationship with FAA. As always, we're looking for the most optimal possible design when it comes to safety, performance, reliability, and cost-effectiveness to deliver most competitive aircraft to our customers. In that sense, NEDEC and Beta are complementary to our AVTOL design. With that, we expect to start flying our prototype in the next few months. Lastly, as I mentioned earlier, we unveiled at the Paris Airshow our full-scale mock-up with a new rotor configuration. The rotor now features four blades. This is a design that generates less vibration and is quieter than the previous configuration. The blades have a fixed pitch and a mechanism to align the blades to line reduce aerodynamic drag during the cruise phase of the flight. We also have a few pictures of our truck mounted rig testing in real condition the aerodynamic drag of this new rotor setup. As you can see, the blades are all aligned and this rig helps us to define our load analysis on the entire motor propellers rig and validate the new blade configuration. Now, on slide 10, you can see the progress of the final stage of testing the motors for our engineering prototype. As a reminder, the lifters were tested at the NIDEC facilities for power output, energy consumption, vibration, noise emission, among other metrics. And upon satisfactory results, they were installed into their respective nacelle, integrated into the system that controlled them, and finally spun on the eVTOL for the first time. We are going to follow the similar protocol with the Beta motors that will still arriving and should be ready to fly in the next few months. And finally, on slide 11, we updated our list of primary system and component suppliers currently engaged, including Beta. We follow a best-of-breed approach and select partners with aviation experience and that can support our certification efforts. We are very proud of all members of this list, and I'm confident that we will have the best eVTOL in the market available to the operators with a great design, high dispatchability, and industry-low operating cost. Now, I would like to invite our CFO, Edu, to go over our financials along with a checklist for our 2025 milestones.

Thanks, Johan.

Now moving to slide 13. EVE is a pre-operational company, and our financials reflect mostly the costs associated with our program development. That said, I would like to highlight some of our numbers. EVE invested $55 million during the second quarter in our program development, including our EVTOL, the Tech Care Service and Support Solutions, and Vector, our urban air traffic management software. We continue to accelerate our program development with more engineers from EVE and Embraer, as well as higher engagement with suppliers. That explains the higher R&D expenses in the quarter. We also deployed around 8 million in SG&A during the second quarter. Including R&D and SG&A, EVE reported a net loss of 64 million in the second quarter 2025. We also recognized a charge related to the fair value of our outstanding warrants as the value of our shares increased in the quarter. Importantly, this is a non-cash expense and does not impact our cash flow or liquidity position. Now, moving to cash flow, our operations consumed $57 million in the quarter. This is almost twice the cash consumed in the first quarter, which had a temporary working capital gain, as one of our invoices of around $15 million from Embraer slipped to the second quarter. Still, the $83 million consumed in the first six months of the year can be considered as a normalized level for our current development stage. We continue comfortable with our guidance for the full year of $200 to $250 million, which reflects our financial discipline, advantages of using Embraer's engineering team, as well as our increased efforts in the program development. Finally, on liquidity, we ended the second quarter with $242 million in cash, including an additional disbursement of the credit line with the Brazilian Development Bank of $11 million. These standby facilities continue to help EVE to preserve a solid cash position throughout the year. The total liquidity of $375 million at the end of the quarter includes our cash, all undrawn standby facilities, as well as a $50 million grant we announced during the quarter. We view our liquidity as sufficient to sustain our operations through 2026. Now, going to slide 13, we remain on track to deliver our milestones this year. As Johan detailed earlier, our first full-scale prototype is concluding the final tests and installations to start to perform its initial flights in the next few months. We now expect the first flight towards the end of the year. As similar to NIDAC, we also perform tests with the beta motors in our engineering prototype in the upcoming months before the first flight. In parallel, we continue in talks with ANAC to detail the means of compliance, which are the specific tasks that need to be conducted during the certification campaign. We expect those to be published by the end of the year, at which point we'll be able to begin our certification campaign. Also, we continue highly engaged with suppliers, working on the initial parts of our conforming prototypes. And in parallel, The site to assemble these aircraft is starting to receive the necessary equipment and tooling. Lastly, our cash consumption in the year, despite the better first semester, should stay in the guidance of $200 to $250 million, probably closer to the low end of the range. With that, we conclude our remarks, and I would like to open the call for questions. Operator, please proceed.

Thank you. And at this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may withdraw your question by pressing star two. Once again, to ask a question, please press the star and one on your telephone keypad. And we'll take our first question from Savvy Sith with Raymond James. Please go ahead. Your line is open.

Hey, good morning, everyone. Maybe a question for Edu just on a kind of housekeeping side, just on the cash consumption, you're progressing well right now, especially maybe tracking below that 200, 250. And you also do have the grants that you got recently. Is it fair to assume that it would be close to the lower end and maybe below and you can consider the grants as well?

Hey, hi, Savi. We continue to monitor our expenses very closely. We are very diligent where we spend our money and we make sure we leverage all the resources that we have from Embraer so that we don't need to duplicate costs. With that, we have been able to optimize our expenses. In the first half, we burned around 85 million, a little less than 85 million. Second half should be a little more. So that's the reason we are guiding towards the low end of the range, right? Maybe 200, maybe slightly below. But, you know, there's a lot of investments on the development. We're going to continue to advance. We're going to be doing a lot of tests. So we're excited. But, yeah, I believe we are leveraging more from Embraer. And because of that, we have been able to optimize our cash consumption.

Very helpful. Thank you, Adu. And then maybe if I can ask on the engineering flight testing, looks like maybe it's slipping a little bit, you know, now late 25, early 26, which is not surprising. But you also mentioned kind of moving forward with building certification conforming aircraft, but I'm guessing those are just building the kind of the long range components. How long do you think you need to fly the engineering prototype before you finalize the design and can really start assembling the certification aircraft?

This is Luis Valentini.

With respect to the flight of the conforming prototypes, we are still planning that for next year. Towards the end of next year also, so we still have time to perform the conforming flight test prototype campaign, which is composed of a development phase and also a certification phase, leading us to certification still in 2027. So this engineering prototype plan and development is parallel to this path of developing the conforming prototypes. with this schedule I mentioned then leading to the certification in 27.

Can I ask how the kind of the design changes reflected in this engineering prototype or that will kind of go directly onto the certification aircraft that you're building?

Yeah, so at this point, we don't have any significant changes with respect to this testing that Edu and Johan mentioned in the beginning of the call. The other modifications, such as optimization on the wings and things like that, those are already part of the engineering prototype configuration. They're not on the, I'm sorry, on the conforming prototype configuration. They're not on the engineering prototype because this is a vehicle that is already assembled. So these most recent changes are not on them, which for us is not significant because, as we mentioned before, this engineering prototype helps us to calibrate our models and helps us in estimates. So, it doesn't have the same configuration as the conforming prototypes.

Understood. Thank you.

Thank you. Our next question comes from Andres Shepherd with Kantor. Please go ahead. Your line is open.

Hey, everyone. Good morning. Congrats on the quarter. Thanks for taking our questions. Hi, Johan. Hi, Edu. And hi, Lucio. And congrats on the unveiling of the aircraft and on the first binding order. So certainly exciting there. Quick question, just maybe following up on Savi's question, regarding the test flight campaign, maybe a different way of asking is, can you just maybe give us a sense of kind of how you're envisioning this ramping up? you know, starting with hover flights and then kind of what are the plans to kind of ramp up the test flight campaign? And is the plan still to deploy five prototypes for conforming test flights? And if so, kind of what's the timeline for that? Thanks.

Yeah, thanks, Andreas. the plan is still the same. So starting from the end of your question, we're still planning the five prototypes. There's still some discussion on the amount of the test points that will be on each one and if we should bring in another six prototypes. So that's still something that may change in the future, but we're still planning to go with the five prototypes and the timeline we had Previously, with respect to the steps on the flight test campaign, we are still very much in line with the concept of building maturity on the building blocks we have for the vehicle. So we will definitely spend some time focusing on the hover flight of the vehicle since this is one of the building blocks on which we don't have as much previous experience in comparison to others. such as cruise flight, where we bring the experience of Embraer in previous projects. So we will spend some time focusing on hover flight, and that relates to the controllability of the vehicle, the power needed, the management of the systems, temperatures, power, things like that. And then transition between hover and cruise is also an important phase. It's a very short one for the vehicle, very important that is executed smoothly, both in terms of the technical aspects, but also for the comfort and the user experience of the passengers. And then finally, after that move to cruise, where again, we believe we have more maturity based on previous experience of other projects.

Got it. Super, super helpful. I appreciate that color.

And maybe just as a quick follow-up, if I may, just regarding the order book, I'm curious on kind of how you're thinking about it. You know, is the plan to continue to build up the order book? Is it to begin converting some of those LOIs into binding orders? Should we expect any PDPs from the order book? Just any granularity there or thoughts would be helpful. Thanks.

Yeah, Johan speaking here. Andre, thank you. Thank you for your comment and about the unveiling of the book up at the Parish Hair Show. Well, the order book is definitely what we've been working in the beginning. We work on this order book with the LOI because we wanted to put the customer, the operator, the center of what we do. And I've been saying this before. I mean, this really, it proves, you know, the solution that we're giving to the operators, not only the aircraft, but also the service and support, make sure they can operate reliably. They can also, you know, make sure that they fly, they keep flying on a regular basis and have the most optimal operating costs. And also, you know, UATM, Is around the corner we'll have to we can begin with the with what we have today in the traffic management, but eventually putting thousands of vehicle in the air and the low altitude. Airspace will need this. So I think customers understand this and they want to engage. That's why it starts with LOI. Basically, it says that, you know, we're working together. We're defining the solution together. They participate in SteerCo with us where we give them regular feedback and how the product development and also the service support solutions that we're developing for them. And naturally, you know, as you go forward and you get closer to the certification date, then we start converting. It's exactly what happened with Revo. I think this is important for them to prepare the internet service. And this is, you know, while we're two years away from the internet service, the ecosystem needs to be ready. And with this contract, they can go back to the different stakeholders and say, okay, now, this is real. This is happening. You know, my first PDPs. And Eve is developing this vehicle, and we need to be ready. So we're not looking to add necessarily. We add only when it makes sense, when we have the right partner with the right mission. Okay? And this is what we've been working on. And then, of course, Once we start converting the first one, we also have, and if you pay attention to the press release we did at the Paris Airshow, it says, you know, Sao Paulo area, right? Just a lounge customer for Sao Paulo. You can imagine that we're already working with other customers in Brazil, but also United States to convert other airline.

Excellent. Thanks, Johan. Very, very clear. Appreciate that. And congrats on all the recent momentum. I'll pass it on.

Thank you, Anand.

Thank you. Our next question comes from Ellen Page with Jefferies. Please go ahead. Your line is open.

Hi, guys. Thanks for the question. I just wanted to touch on some of the changes in the competitive landscape. Joby and Blade announced that Joby would acquire Blade's passenger business earlier this week. How do you think about how that impacts your competitive dynamic and your positioning in especially given Blades had been part of your 2.8 thousand LOIs, and that combined with your partnership with Beta, how do you envision the ecosystem developing from here?

Hello, Ellen. We welcome very much this news about, you know, Adobe investing in Blade. I think this is exactly proving our point, what we've been saying since the beginning. There's this transition happening and the electrification of the vertical flights from the helicopter to eVTOL, and this is a proof of it. So we're excited. We think it's good news because this is what we've been preaching. It's just getting together. There's room for everyone. to be going and getting a platform, a ride-sharing platform as positive for all the EV toll manufacturers. We don't see, and there's a special point, I mean, we don't see that, you know, it's going to take, it's going to take out, you know, our backlog with the 200 vehicles that we have. We have a good relationship with Blade. And it's a ride-sharing platform, remember? I mean, it's like, and I'm going to make a joke a little bit here, but it's like, you know, Uber asking their drivers to drive only Toyotas, right? I mean, it's just that you need all the OEMs. You need various OEMs for the right mission. Each of the EVs is its mission. And same thing for the helicopter. They're multi-OEM. Blade is a multi-OEM today. And so we don't see it as an issue today for us.

Great, thank you. I'll pass it on. Thank you. We will move next with Austin Moeller with Canaccord.

Please go ahead, your line is open.

Hello, good morning. Just my first question here. What is the difference in performance between the motor that's being acquired from Beta and the one that you were using and testing previously? And are you still sourcing a battery pack from BAE, or is that going to change?

Hi, Austin. So with respect to the battery, nothing changes there. We're still developing with BAE and still in the same requirements, same products, same line we were before. On the differences between the motors from NEDEC and from Beta, there are mainly differences with respect to cooling system. For example, there's a little bit on the architecture of the motor, so the size of the motor is a little bit different between the two solutions. um the control is different and there's some differences on the way that it integrates into the vehicle and so how it communicates and how some of the protections are made basically the these are differences That we believe that weren't us a phase of testing. So we can with these differences, find what is best for the vehicle as a whole. So we optimize the global solution based on these differences that the systems bring to us. And so by doing this step. We are looking for a solution that is best for the vehicle overall, and that's why we believe this phase of testing will increase our maturity moving forward for the flight test campaign.

Okay. And are you able to comment on the tip speed of the new rotor blades, and do you expect additional design changes to the aircraft before building the conforming units for ANAC to evaluate?

Yeah, so that's a very good point because the blade tip speed is one of the main parameters that dictates the noise that is emitted by the vehicle, which again is one of the important characteristics of the vehicle when we think of bringing them into urban areas and the way we relate to the communities where the vehicles will be operated, right? So this change of... motors that we are testing, they don't affect the tip speed. And so we are maintaining the requirement for tip speed so that we maintain the level of noise of the vehicle and keep that at a level that is low enough not to significantly impact the areas where we'll be operating. And so in that sense, there is no change. And then just completing your question with respect to changes that will be brought to the conforming prototypes. Of course, we will bring any learnings that we believe are relevant through this phase of testing with the engineering prototype. to the certification vehicle and to the vehicle that will go into service. So that's one of the objectives is to bring these solutions that we optimize into this vehicle as much as we can to the vehicle that will be certified and go into service.

Great. Thank you for filling me in.

You're welcome. Thank you. Our next question comes from Marcelo Mota with JP Morgan. Please go ahead. Your line is open.

hi everyone thanks for taking the question it's just one is regarding you know capital needs you mentioned that you feel very comfortable until the end of 26 and as you mentioned in previous calls you know you have been exploring the options for 27 you guys have this shelf registration that was filed during the quarter you know to raise money the sector has been doing pretty well, so just wondering if you can comment anything about that or how you see the current state of the sector and what else do you think could improve or what are the current risks and what type of risks would you be expecting to be more optimistic about the outlook for Devito? That's it. Thank you.

Thanks, Mato, for the question. It's Edu here. We continue to feel very good in terms of cash. Only the cash we have in hands gives us more than around 18 months, right? So we have plenty of cash to get at the end of 2026. If you add the standby facilities we have already signed, the recent grant that we raised, that gives us probably, you know, we're talking about almost 400 million, which gives us two full years, right? So probably until, I would say, mid-2027. So the position is good. We still need some resources to get the certification. We have different options. You mentioned the S3, the shelf registration we have, but we also have interesting discussions in terms of long-term loans, similar facilities to what we already have been drawing from BANDES and also from Citibank. Different from some other players, given the strength of the group, being part of the Embraer group, we have, I would say, more options in terms of funding. And we are analyzing. We are not in a hurry, but we need to assess the best option and execute at the right time.

Thank you, Edu.

Thank you.

Our next question comes from Andrea Madrid with BTIG. Please go ahead. Your line is open.

Hey, good morning. Thanks for taking my question. Quick one on the eVTOL landscape. I mean, we've seen a number of partnerships between eVTOL names and defense contractors emerge for the development of, you know, defense use cases. Could we see Eve pursuing similar partnerships?

Andre, yeah, this is Hans.

I'm sorry, got mixed up with the microphone here. Well, you know, since the beginning of EVE, it's a matter of focus, and we're really working on the UAM. It's the 150-kilometer market we see. And then, by the way, we released our market outlook at the Parasite Show, and we were the first OEM to put our experience out there and all the discussion that we've been having with all the stakeholders. And we do confirm that we believe that the UAM will go for urban, dense, This is also Revo is confirming what we're saying. It's a matter of focus. At the same time, we always look, and this is also one of the advantages of having Embraer, you know, that can bring the technology development analysis and all the bandwidth to look at different technologies. And we're looking at the possibility of, you know, getting into a hybrid solution for the vehicle, not changing the core structure of the vehicle. And for specific markets, defense could be one of them. But to remind you that we do have an LOI with BAE system, which also look in a different market as defense, whether it's in the U.S. or UK. And so, yes, we are looking into this, but the focus is still to be certifying the vehicle that we're offering, the fully electrical.

Got it, got it. Very helpful. I'll leave it to Juan. Thanks so much.

Thank you.

And this will conclude our Q&A session. I will now turn the call over to Lucio Alworth for closing remarks.

Thank you, Nikki, and thanks everyone who joined the call today. As you can see, we accomplished several important milestones in the past quarter. We're fully engaged, moving fast, and there's a whole lot more to come in the next few quarters. So we're going to keep updating you guys on our progress throughout the next few quarters, and we look forward to meeting you in the upcoming events we're going to attend. As always, if you have any questions, please don't hesitate to reach out to me or to my team. Thanks, and have a great day. Thank you.

Thank you. And these thoughts conclude today's program. Thank you for your participation. You may disconnect at any time.