Eve Holding, Inc.

Good day, and welcome to the Eve Holding, Inc. Third Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please sit in while conference specialists are pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To throw out your question, please press star then two. Please note, this event is being recorded. Now I'll 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 third quarter 2025 earnings conference call. Our CEO, Johan Borde, 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, Luis Valentini, our chief technology officer, will also 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 prototype. The deck is on our site at ir.eaveairmobility.com, so please feel free to download it and follow 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 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 obligations 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.

Thank you, Lucio. Good morning, everyone, and welcome to the 2025 third quarter conference call. We had a strong third quarter marked by several key achievements, and we continue to advance the program's development at a steady pace. We are in the final stages of testing our engineering prototype before its flight campaign starts. We announced an additional supplier for our commercial aircraft, the E-100, with a contract with Embraer for their landing gear. Additionally, the Ironbird has begun to operate and is already contributing to the testing of the actual hardware that will equip our aircraft. Our schedule remained unchanged with an expected type certification and entry to service in 2027. Starting with slide three, we have now received from Beta Technology Company all of the electrical motors for our engineering prototype. They have been previously tested and specially designed equipment and installed in their respective nacelles. As mentioned previously, we had already performed integration tests between the prototype and the remote pilot station that we also call the RPS to make sure that there is a successful communication via the dedicated radio link. As a reminder, this prototype will be remotely controlled with a pilot sitting in the RPS, and this is the white truck at the far end of the right picture. We are running the last set of tests to make sure that electrical power units were properly integrated with the inverters, battery, and other systems and subsystems in the vehicle. Therefore, we're confident in starting soon our flight campaign with our first flight by the end of this year or early next year. Slide four is about the selection of our 22nd primary system supplier. Embraer will produce landing gear for our aircraft. Embraer comes with a strong landing gear manufacturing heritage for their commercial and executive jets, as well as military aircraft. The landing gear was introduced as a result of a constant interaction between Eve and its customers, understanding how the aircraft will be operated. Now, The wheels on our EVTOL will be used for taxiing and repositioning the aircraft. This means greater energy efficiency when compared to the hovering. The landing gears also provide the capability of maneuvering the aircraft on the ground, eliminating the use of ground support equipment for the purpose, facilitating operation, and reducing time on ground. The next slide, number five, shows what is now our functional Ironbird cockpit. As a reminder, the Iron Bird is a deconstructed eVTOL in which we integrate all the different actual components on our eVTOL into a physical system to make sure that all systems work together properly. This is the interface through which the pilot will control the entire system. As you can see, the simulator has approximately 270 degrees view. and is connected with all the different rigs of the vehicle system and components. For instance, the joystick is connected to actuators and motors in another adjacent room, and they react physically to all pilots' command. All of these are connected to the avionics and the flight control computers with our fifth generation fly-by-wire control laws. The motors are connected to the battery with its own thermal management system. As much as possible, All wires and cables replicate the composition, width, and length of the actual harness that will be on our AVTOL. This assures a representative result of the simulation, allowing the Ironbird to be used as a tool for vehicle development, flight test clearance of a new feature, and product evolution, as well as optimize the test campaign. Through this strategy, we maximize the number of prototypes team lining the flight test campaign, and making the most efficient use of these assets. So not only does the Ironbird help us to better integrate and understand how all the systems work together and troubleshoot potential problems on the ground, but it also has an important role for the aftermarket benefit. The Ironbird will help us improve the system and component maturity, and these are important inputs for successful entry into service and an efficient maintenance program. In total, we have logged more than 10,000 hours of tests in this REAPS. Another advantage is that the Ironbird has also helped us to expedite and reduce the costs related to our certification campaign. Keep in mind that some tests can be performed on the ground 24 by 7, such as electrical systems, circuit breakers, et cetera, and the Ironbird becomes a very valuable development and certification tool. Moving on to slide number six, together with our customers and authorities, we are also developing a strong network of partners in different areas such as infrastructure and energy to address one of the many challenges ahead of the urban air mobility, which is to create a whole new ecosystem besides simply developing an aircraft. On the certification side, we participated in ICAO assembly in Canada. along with ENAC, the Brazilian Air Force, and other government officials, along with representatives of several other certifying authorities throughout the world. This reinforces our confidence level that we have the right approach to certify our aircraft with ENAC as a primary certifying authority. Besides that, we are increasing our presence in the Middle East with an agreement to support the adoption and growth of eVTOLs in the region with the Kingdom of Bahrain. The agreement positions Bahrain as a regional hub for electrical aviation and will accelerate its regulatory, operational, and infrastructure ecosystem for eVTOLs. The agreement also calls for EVE to possibly conduct test flight in the region in 2027. Slide 7 shows our total pre-order backlog that stands around 2,800 aircraft for a total value close to $14 billion based on the list price of 2025. This includes non-binding letters of intent from 28 different customers as well as revos per motor. Out of 28 customers, we also have secure contract with 14 different customers for EVE TechCare's suite of up-to-market product and services. which could bring up to 1.6 billion USD in revenue to EVE over the first few years of operation. As you can see, we also have 21 different customers for our air traffic management solution, Vector. And I believe this reflects the market's leading value proposition we bring to our customers. Now, I would like to invite our CFO, Edu, to review the financial results and the 2025 milestone checklist.

Thanks, Johan. EVE has successfully concluded a new funding race of 230 million through a registered direct offering in August. This equity placement has not only improved our cash position to its highest level ever, but also extended our cash runway to about two and a half years. We're very comfortable with our current liquidity and estimate it is sufficient to fund our operations and R&D expenses through 2027. The offering was anchored by two strategic and longstanding investors, the Brazilian Development Bank, BNDES, and our controller, Embraer, showing strong investor support and commitment to our project. Also, we had more than 30 US and Brazilian institutional investors participating in this round. The strong institutional participation expanded our public floating, and Embraer now has 72% of our total equity, down from 82%, and Eve's daily trading volume in the New York Stock Exchange is averaging 7 million per day. Now moving to slide 10, 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 $45 million during the third quarter 25 in our program development. We continue to accelerate our program development with more engineers from EV and Embraer, as well as high engagement with suppliers. We also deployed about 7 million in SG&A during the third quarter, in line with previous quarters. Including R&D and SG&A, EV reported a net loss of 47 million in the third quarter 2025. We also recognized, again, related to the fair value of our outstanding warrants, which is a non-cash gain. Moving to cash flow, our operations consumed around 60 million in the quarter, reflecting higher program activity and overall engagement with engineering and other R&D functions to progress our eVTOL development. With 143 million in cash consumed in the first nine months of the year, we are on track to hit the low end of our guidance of total cash consumption between 200 to 250 million for the full year of 2025, reflecting our cost discipline, simple business model, and advantages of leveraging Embraer's capabilities. Finally, on liquidity, we ended the quarter with 412 million in cash, again, the highest ever cash level for EVE, including an awarded grant and an undraw BNDES credit lines Total liquidity is now at $534 million. These stand-by facilities continue to help EVE to preserve a solid cash position. Now going to slide 10, we remain on track to deliver our milestones this year. As Johan detailed earlier, our first full-scale prototype is concluding final tests and installations to start to perform its initial flights in the upcoming month. In parallel, we continue talks with ANAC, Brazil's certification authority, to detail the certification plans. We expect it to be published by the end of the year to begin certification tests. We continue engage with suppliers working on the initial parts of our conforming prototypes. And in parallel, we have started to receive the necessary equipment and tooling to produce the certification vehicles. Lastly, our cash consumption for the year is in good shape. and in line to reach the lower end of our guidance of 200 to 250 million. With that, we conclude our remarks, and I would like to open the call for questions. Operator, please proceed.

Yes, thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press star and then two. At this time, we will pause momentarily to assemble the roster. And the first question.

This meeting is being recorded. This meeting is being transcribed.

Currently, the first question comes from Sabi Saif with M&J.

Hey, good morning, everyone. Yeah, just, you know, congrats on the progress and financing deals. But I'm kind of curious about the Bahrain updates yesterday. Could you talk a little bit more about how that would work? You know, it looks like 2027 you'll be doing work there. Is that flight testing using the engineering prototype or maybe the certification aircraft that you're building? And is that part of that agreement?

Great, Savi. Thank you. Yeah, we're thrilled about this announcement that we did with Bahrain, with the Ministry of Transportation and Telecommunication. It was also on Sunday, right, where it was talked about at the Getaway Gulf Investment Forum. Very important. We've been in talks with the Middle East and the UAE, you know, for some time now, and I think this really proves that, you know, we're bringing the solution that they're looking for. This is a sandbox that will work, you know, to accelerate the readiness of the regulatory aspect, the operational, the infrastructure also, the ecosystem. We're going to be starting different fronts. Like I mentioned, you know, looking at the vertiports, looking at the operation, and when it comes to the testing, we're looking at the possibility of maybe starting some test flights, right, in 2027. It's not defined yet. But this is, you know, what we're definitely working on. Maybe using a prototype, this is something that we're thinking about. But definitely, you know, for the operation in 28 in the region.

And does that come with any revenue stream, or it's just kind of more of a demonstration?

Well, no, it will have, you know, revenue stream, but definitely on the demonstration, we haven't defined exactly the scope and how it's going to be, right, at this stage.

Yeah, we expect to get orders, right, Xavier? As we start to fly and go to the region, we expect for more. There's PDPs, also the traditional type of sale with other customers.

That makes sense. I appreciate that. And then just on the cash flow side, just wanted to clarify, again, congrats on getting that deal across last month or a couple of months ago. But is this current spend still the thought process that this is kind of the level of spend for 2026 as well?

Yeah, we're consuming around $60 million, right? We consumed that in the third quarter, $60 million. Probably fourth quarter should be around 6 million as well, and we may close the year around 200. For next year, we should keep that pace, which I think is, say, reasonable. We may consume a little bit more, right, than 200, so something maybe around 250. We're still working on the details for 2026, and we still don't have a guidance. We may provide something by, by the fourth quarter results, but I think it's reasonable to expect to keep that pace.

Thank you. Thank you. And the next question comes from Andre Sheppard with Cantor Fitzgerald.

Hey, guys. Good morning. Congratulations on the quarter and all the great progress, and thanks for taking our questions. I wanted to maybe follow up from Sabi's first call just on the expansion to the Middle East. Hoping maybe you can give us a bit more detail there. So, you know, you're targeting commercial services in 2028 and then further expansion in 2029. But I'm curious, you know, just given the region's maybe more leniency towards the certification process, is there an opportunity here perhaps to commercialize ahead of FAA certification? Is that something that being explored or what's overall the strategy here in the region? Thank you.

Thanks, Andre. That's a good question. Obviously, you know, our primary authority is ANAC and this is will start for us with ANAC and then with the bilateral agreement that they have will be FAA. ANAC has been also in contact and have agreements, you know, with all other authorities in the world, and it wouldn't be different, look like, you know, we've done at the Embraer for many, many years, where they would accept the ANAC certification. So, it's actually independent of what would, you know, will happen at the FAA, right? But I'll let also Valentino give you a little bit more insight.

Yeah, and thank you, Johan, and good call. Good question, Andres. This doesn't change the path that we have of certifying first with ANAC and then validating with other authorities. As Johan mentioned, we work to expedite this process by aligning or promoting alignment of not only vehicle characteristics and understanding by all of the authorities, but also supporting ANAC and all that we can in their arrangements and agreements for their certification basis to be accepted by other authorities. So we support the process of having these authorities accept the ANAC certification basis, And that is done in a way to shorten the time that we have their validation once we have the ENAC-type certificate.

Got it. Okay, that's super helpful. Appreciate it. And maybe just as a quick follow-up, just on your test flight program, just to make sure I have it right, so we are targeting first test flight, I think, before year-end, and then to kind of ramp up the program all throughout next year, starting with and then heading towards a transition. Can you break that down for us, just what does that flight path look like, just the timing again, and just confirm what that looks like for this year and next year? Thank you.

Sure. Yeah, so we'll start the engineering prototype flights, as we had mentioned, in the end of this year or at the beginning of next year. So that will start. First with, let's say, simpler flights with hovering only, and then that will gradually expand what we call the flight test envelope. So increasing speeds, making maneuvers that cover, let's say, a more extended range of capabilities of the vehicle, and then from there expand also to transition flight, which is what we call, you know, the phase of flight between hover and cruise flight, the fixed wing part of the flight, right? So that's made in a way for us to validate parameters of our analysis today. So we still have some calibration, some knowledge that we expect to gain from the hover flights themselves. So for example, we believe that we'll be able to gain more insight on the noise of the vehicle once we start flying the hover. So even, you know, the hover test phase has significant information for us. But then evolving towards the transition is also important for us because even though it's a short phase of flight, it has a significant, let's say, physical phenomena happening. So it's important that we get that very well, not only for engineering and certification, but also for the comfort and for the user experience inside the vehicle, right? And then in the end, we'll also perform cruise flights or fixed wing airplane flights with this engineering prototype. But that's the, let's say, the working of the vehicle in which we have more confidence from the background that we bring from previous Embraer programs. So that's the progress that we are expecting to make, all that to happen next year.

Wonderful. Very helpful. Thanks again. I'll pass it on.

Thank you. And the next question comes from Egan McDermott with Jefferies.

Hi, guys. Good morning, and thanks for taking my question. Maybe on the supplier, with Embraer signing on to provide the landing gear, could you remind us of what other suppliers or component agreements you still need to secure? And maybe at a higher level, what kind of advantages does your extensive supplier network provide compared to peers who have a more vertically integrated approach?

So, thank you for the question. Really the last main system that we have introduced to the vehicle with respect to bringing new suppliers in. So we don't expect to have any other supplier for any major aspect of the vehicle coming in from now on the program. And then we've been working with, on the second part of your questions, with suppliers that we believe bring a differential to our program given their background on aviation product. and their knowledge on certification of these products. So, for example, the fact that we are working on the battery supply with BAE, we believe that puts us on a good path for certifying this system, which is one of the critical systems of the vehicle, right? So, as we mentioned previously, we believe that the list of suppliers that we assembled was a list that for our program optimized not only the maturity that they bring to our project and the background that they have on the vehicle, but then optimizes what we have in terms of integration of these systems on the vehicle from the previous experience of Embraer projects. Thank you. Does that answer your question?

It does. Yeah, thank you. And maybe one follow-up or slightly related question, but In terms of the motor, when it comes to performance tests, can you provide an update of, you know, what you're monitoring there in terms of performance testing? And are you going to continue to dual source motors from NIDAC and VEDA? Or is there any intention to source both the lifter and pusher from one supplier? And what would be your priorities in making such a decision if so, whether it's cost performance scale

Yeah, so as we mentioned last time, the flight test of the engineering prototype is part of a process for us to optimize the vehicle characteristics, and that goes through choosing what are the right systems and components to compose the vehicle, right? So we are still on that path that we mentioned on the last call to understand the opportunities that we have for supply of the motors, both lifters and pusher, and then based on the choices that we have and the fit that we get from the tests, then choose the final configuration. We choose these components on a number of parameters. I'd say most importantly, parameters related to performance, so such as weight and the controllability that they provide to the vehicle. But also cost, of course, is an important one. And what we believe is the capability of these companies to provide a good product for the life of the vehicle, right? So for production, for support, for spare parts and all of that. So it's really a complete set of parameters that we analyze to, you know, that will eventually lead to the choice of the supplier for these components.

Very helpful. Thank you. Thank you. And the next question comes from Samir Joshi with HC RainRide.

Hey, good morning. Thanks for taking my questions. I just had a couple questions. First, on the cash burn expectations for this year, I think I heard that you were expecting to be closer to the lower end of the $200 to $250 million. Is there a reason for that? Were there some programs that were slowed down, or what were you more efficient than you expected to be?

In terms of the cash for this year, you're right. We believe we're going to be closer to the low end of the guidance range of 200 to 250 million, pretty much because we're trying to optimize our cash consumption the whole time, right? We control expenses. We make sure we're spending money the right way. We try to increase payment terms and have some working capital gains. We're always discussing with suppliers payment terms. There is a lot of work that is done by Embraer as well that we have on the service agreement. So there are different pockets, right, of cash consumption that we're always trying to optimize. We leverage a lot existing infrastructure, existing capabilities, things that the Embraer group already has in order to have this, you know, more optimized cash burn, and we're going to continue to do this way, okay?

Okay. Thank you. And then just a broader question. Of course, you have like a 14 billion sort of backlog of orders, including from the EU tech care and vector offerings. How are you continuing to engage with these customers? Because the flights are, I mean, the commercial flights are not until 2027. What kind of, what level of interaction do you have with them? Do you have feedback from them on design, interior design and stuff like that?

Yeah, thanks for this question, Johan speaking. This is the essence of how EVE was built on is really based on workshop with our customers that we have, those workshop whether it's on the HMI like a human machine interface workshop that tells you how the pilots interact and what we need to have or whether it's all the con ops that we've been doing since the very beginning whether it's in Rio or Chicago or in London. This is really building together like what will be the urban air mobility environment and type of operation and that it shapes not only the vehicle and this is why you can see over the last five years you know, how the vehicle has evolved outside but also inside. And, you know, with a cabin and those full flex cabin concept where you can, you know, you can in one day you can change, you know, within a couple of hours you can change your configuration, whether it's a full cargo or, you know, removing the first row, putting in the club configuration for the operation. So this is something that we've been doing since the very beginning and that's what led us to have the 28 customers and you know the largest uh pre-order backlog because we bring not only the vehicle but the whole solution which is the full suite uh strong from the amber air heritage uh you know where the 4 000 people that are around the world the customers understand that we have the dna and what it takes to support an operation not only to certify and deliver the first airplane but but make sure that you guarantee a dispatch reliability rate or, you know, a schedule reliability rate, which is exactly what the customers want to make sure. The asset is available, and it has the most competitive operating cost. And this is the two pillars that we have. And the third one is eventually not at the beginning because we can start the operation, you know, with the existing asset, infrastructure and airspace management system. But eventually, if we're going to be putting, and we will be putting 1,000, not only us, but the others, putting 1,000 of those vehicles in the air, then we need to make sure that we have urban traffic management software, you know, adequate. And I think this is all this DNA that we're bringing, aviation DNA, that really pushes the customer to elect EVE.

Understood. Thanks for that, Caledon. Thanks for taking my questions. Thank you.

Thank you. And the next question comes from Andrea Madrid with BTIG.

Good morning, Johan. I do appreciate the question. When you think about scale production moving forward, where might you anticipate the largest bottlenecks forming? Or I guess maybe put more broadly, are there any risks that you see throughout your supply chain currently?

We believe the way we are going to be doing the manufacturing, right, the industrialization of the eVTOL is going to be modular, right? We start with we're going to have basically three modules, right? The first one, 120 eVTOLs per year, 120 doing in the Brazilian factory. Then we can go from 120 to 240. just with an extra shift, right? The first one has two shifts. Together, the 240 will go to the third shift. Then we can double the 240 to 480 with some additional tooling and equipment. Nothing major. For the 240, probably going to be investing around $100 million. For the 480, $150. So we have all of that mapped. The suppliers, as Valentini mentioned, right, we have very good suppliers. They have production capabilities, a lot of production capabilities as well. And we keep them informed of our production plans. As we ramp up production, we believe suppliers will be ready also to ramp up their supply. So we're not envisioning any major challenge to get this 500 eVTOLs per year. Of course, you know, to deploy all those eVTOLs in the markets and so on, we may need some local assembly. But in terms of the production of the eVTOL itself, we're confident on this initial 500 eVTOLs per year capability.

Got it. Got it. Yeah, go ahead. Yeah.

No, sorry. Yeah, I just want to compliment another aspect of the, you know, what we've done with our 22 primary suppliers is those contracts. It took us a year, but each of them, you know, it's based on the strong experience of supply chain management that Embraer is bringing. And we know on the conventional aviation, I mean, it is a challenge that, you know, we've got to cope with and that we've been really learning from. And all the contracts that were negotiated or left on agreement, right, not only for the prototype, not only for the production, but also for the aftermarket. So, giving all this, you know, we've taken the best breed of, you know, negotiation and learning from Embraer, and then we've negotiated this contract where one example, I mean, it's not single source program, right? Those are conditions that we had with the suppliers, and it allows us also to de-risk, you know, the ramp-up or the production. different flows that we can have. And also another one that we've taken to the next level is also we are the face of the customer on the aftermarket. That's another angle just to make sure that, you know, we are in touch with our customers on a constant basis and guarantee what I told you, you know, from the suppliers, and then it goes through us, and then we support the customers on the dispatcher availability or operating costs, right? So those are really – advantages and uh strong learning that we've had from the past that you know that for someone from a company that's done it for 56 years not incredibly helpful caller thank you so much thank you andre thank you and the next question comes from austin waller with canaccord hi good morning johan and edu um so

Based on what you said about Bahrain, is ANAC looking to form similar dual cert partnerships with, for eVTOLs with other countries similar to the relationship that they have with the FAA once the means of compliance are published?

The work we've done we're doing with Bahrain with respect to certification is very similar to how we're working with other authorities. So we've been trying to as much as we can work on the certification basis so that if we don't have full harmonization, we have good alignment of the requirements. So that means from early on engaging with these authorities to understand their expectation in terms of the requirements for the vehicle and then developing the vehicle in a way that we will be able to show compliance with those requirements, right? So we start talking to these authorities following what we believe will be important markets for our eVTOL, and then start building this alignment on the certification basis. That's something that EVE does. In parallel, as I mentioned earlier, we promote and we try to support as much as we can, a work that is done directly between authorities, so from AMAC to other authorities in the world. and bilateral agreements that they have within the authorities and also agreements that they have with respect to validation of type certificates, for example. And so, we support that and we try to steer that and we do that by giving information to the authorities and steer that to where we believe we should focus with respect to what markets are most important for our vehicles. So, it's a very similar process to what we're doing. with the Bahrain certification authority is to connect with these authorities in the world, build early engagement, and then also promote the connection between the authorities to, again, shorten the time that we have for validation once the TC from ANAC is issued.

Great. And can we talk about what stage we're at on assembly for each of the conforming prototypes right now and how close any of them might be to finishing assembly?

Yeah. So for now, we are still on the definition of much of the design of these prototypes. There are some more long lead parts that are already being manufactured by the suppliers. So those have already have... drawings released and are also already in production by the suppliers. We will receive, start to receive those parts next year and then assemble the prototypes next year. So, so far, we are not assembling. We are still working with the manufacturing of the more long lead items and also designing the ones that are, let's say, shorter to manufacture, which then we expect to start manufacturing next year.

Great. Thanks for all the details.

Thank you. And this concludes our question and answer session. I would like to turn the conference to Lucia Odworth for any closing comments.

This meeting is no longer being transcribed. This meeting is no longer being recorded.

milestones this past quarter. We're fully engaged and moving fast, and there's much more to come. So we're going to continue updating you on our progress through the next few quarters, which will be very exciting, 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 our team. Thanks, and have a good day.

Thank you. The conference is now concluded. Thank you for attending today's presentation. May now disconnect your lines.