Bridger Aerospace Group Holdings, Inc. Warrant Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Record Performance: Fourth quarter and full year 2024 results exceeded revenue guidance and were within adjusted EBITDA guidance range. Full year 2024 revenue was a record $98.6 million, up 48%.
• Cash Flow: Achieved positive cash flow from operations in 2024, with over $9 million generated.
• Scooper Deployments: Scoopers remained in the field later and had longest deployment in history; early deployments in 2025 to Oklahoma, Texas, etc.
• Acquisition: SMS Aerospace acquisition in June 2024 contributed $3 million in revenue over first six months.
• Spanish Scoopers: First Spanish scooper received EASA certificate of airworthiness, second expected in 60 days; two others scheduled for 2025.
• Regulatory and Appropriations: Over 30 bills in Washington, optimism for regulatory change and increased appropriations for wildfire fighting.

Segment Performance

• Wildfire Fighting Operations: Fourth quarter 2024 revenue was $15.6 million, a $14.5 million increase from Q4 2023 ($1.1 million). Full year 2024 revenue was a record $98.6 million, up 48% from 2023 ($66.7 million). Cost of revenues in Q4 2024 was $15.4 million, and full year 2024 was $57.5 million. Adjusted EBITDA in Q4 2024 was -$2.9 million, and full year 2024 was $37.3 million.
• SMS Aerospace: Acquired in June 2024, contributed $3 million in revenue over the first six months of ownership. Partnering with Bridger on aircraft modifications for competitive edge and sensor tech integration.
• Ignis Technologies: Launched mobile platform for firefighters, moving to subscription-based model for 2025, with focus on linking Bridger real-time sensor imagery.

Guidance

• 2025 revenue guidance: $105 million to $111 million, predominantly organic based on 6 Super Scoopers and 8 MMA/aerial surveillance aircraft.
• Adjusted EBITDA guidance: $42 million to $48 million, before impact of Spanish Super Scoopers.
• Expect to generate positive cash flow from operations in 2025, with conservative guidance due to early season but potential upside from additional contracts and cost rationalization.
• Return to service revenue from Spanish scoopers projected to be ~50% of 2024 amount in 2025.

Risks

• Wildfire Season Variability: Seasonality and variability in wildfire occurrence could impact revenue and operational performance.
• Regulatory and Budget Delays: Government agency contracting lags and budgeting delays could affect opportunities.
• Fuel and Cost Fluctuations: Uncertainties in fuel prices and other operating costs could impact margins, though potential upside if fuel prices decrease.

Question and Answer

Q: What can you tell us about the delivery and operational cadence of the Spanish Scoopers in Europe for the fire season relative to your most recent expectation?

A: The first Spanish scooper received a certificate of airworthiness from EASA in the second week of February, the second is on track to receive it within 60 days. Expect those two to be ready for the fire season, with negotiations for a contract in Europe. The other two are expected to be ready within the season.

Q: How do you feel about your cash balance and do you expect it to be sufficient to support working capital and operations in the US and upgrade of the Spanish scoopers and their initial operations in Europe?

A: Ended 2024 with over $39 million in cash. Comfortable with cash to fund US operations. Funding for Spanish scooper upgrades comes from the partnership with Mab Group, not from available cash.

Q: Does the revenue guide for 2025 reflect the fact that we are looking at a full year continuing resolution before the fiscal year 2025-2026 budgets are passed? And how have the California fires impacted your conversations with congressional lawmakers and state governments?

A: Revenue guidance for 2025 envisions funding at prior year levels, with additional appropriations being upside. California fires have increased interest and contracting opportunities at state and federal levels.

Q: How would you expect lower fuel prices and travel costs to affect open and flight operations costs and is this reflected in your guidance?

A: Did not reflect lower fuel prices in guidance. Perceive potential upside if fuel prices reduce, with most fuel costs for scooper operations borne by customers.