Eve Holding, Inc. Q1 FY2026 earnings call

Key managerial messages include: Discussion on a binding agreement with 500 million involved, PDPs and milestones related to product development. Vector is part of the ecosystem for customers, with initial module delivered to Revo and tested successfully. Mention of production schedule for certification prototypes, aiming to finish assembling a prototype by end of the year, first flight mid-next year, and producing/delivering around one prototype per month up to six. Regarding the 21 million deferral payment to Embraer, 11 million was paid in the quarter with 10 million slipping to the right in first quarter invoices. The test campaign for the engineering prototype is still considering 300 flights as a reference but is flexible. Emphasizes synergies from being part of Embraer, including using existing assets better, allocating work more efficiently, covering R&D and SG&A, and leveraging the lean philosophy like Kaizens. Also discusses the cost of the aircraft, with lease price at $5 million, working to keep costs within range for profitability and leveraging supply chain.

No specific forward-looking guidance statements on upward/downward revision or maintenance mentioned beyond the ongoing progress and milestones like prototype assembly, first flight, and test campaign reference.

Q: Hi. Good morning, Johan, Edu, and Lucio. Just my first question on vector. Is that being actively evaluated by ANAC for approval? And can that be integrated immediately into Brazil's national airspace system once your aircraft are delivered to customers for the first time?

A: Yeah, thank you Austin for your question. Yeah, Vector is definitely part of the ecosystem that, you know, and the solution that we're providing for customers. Obviously, it comes with module just like, you know, for the air traffic management and we can start today the urban air mobility operation. using the current air traffic management system in place. The idea is as we're going to be scaling up, then we will need to have a really robust solution eventually. And when we say we, it's not necessarily we, but we're talking about the aerospace industry. It's going to be, you know, we're talking about thousands, hundreds and thousands of vehicles, whether it's drone, whether it's low altitude, you know, space, airspace. uh so that's something it's a journey it goes along with the scale of the uam and the first module is really focused on how to manage your um your your your protocol right or alipad still because our strategy is to start today as more in fact we delivered the first module to uh uh revo and they uh already tested it uh at the grand prix of uh san paulo uh end of last year and it was successful and then we're gonna go at that fleet level And then, you know, we go for a certifiable software together with ANAC and DCF, as a matter of fact, who takes care of the flying of the air traffic management in Brazil, right? Our experience on Vector, we have a strong DNA and a strong right to play as, you know, I'd like to remind everyone that The software company that actually developed the air traffic management that is used in Brazil to control the whole airspace in Brazil has actually come from ATEC. It's a fully owned company from Embraer, and we're developing Vector together with them.

Q: And if we think about the production schedule for the certification prototypes, I understand there will be one finished by the end of the year. but how should we think about the cadence of how many will be produced between now and 2028?

A: So I think as you say, we'll finish the prototypes. No, we'll start assembling the prototype, and then we'll finish probably the first semester next year, and then we're looking at the first flight, which I think is a very important milestone for conforming prototype certification. It's the first flight with the pilot on board. And so we're looking at – mid-next year for the early second semester for the first flight of that prototype. And then we will be producing and delivering more or less once a month afterwards up to six prototypes.

Q: Hi, everyone. Just two follow-ups here. The first, when we look at the release in the fourth quarter, you were talking about like a 21 million deferral payment to Embraer. And this quarter, this was converting to 11 million. So just wondering if this 10 million difference, you know, is for next quarter or if, you know, there was some readjustment on the amount. And the second question is regarding the test campaign. You mentioned to try to get to 300 testing flights this year. Just wondering if this is still the level or, you know, what are you expecting in terms of maybe number of testing or hours in the air, you know, whatever you can share with us.

A: Hi, Mota. How are you? Edu here. In terms of the accounts payable, you're correct, right? We closed last year with 21 million that were supposed to be paid in fourth quarter. We paid 11. Actually, we paid the whole 21 million. But then on the invoices of the first quarter, there was 10 that slipped to the right. So we pretty much recovered more than half of what was, you know, a carryover from last year. But your math is correct. Hey, Marta, this is Luis Valentini. With respect to the number of flights, yes, we are... still considering the 300 flights as a reference for the test campaign of the engineering prototype. Of course, this is flexible as we may decide to test more things. So maybe we have modifications on the vehicle. For example, we want to test, for example, different propellers or different lifters, things like that. So the vehicle allows us to do that. So there's a lot of flexibility on the campaign, but the 300 flights we are considering That is the number of flights that allows us to bring the knowledge that we need for the development of the E100 and also to progress with the expansion of the envelope, as we have mentioned. So we believe that with that campaign, we can demonstrate the vehicle and its characteristics, and also we can bring the knowledge to the development of the E100 in time as we've been mentioning, for the production of the production prototypes, for the manufacturing of the production prototypes, right? But keep in mind that this number is a reference, and we may change it as we progress with the test campaign and decide to test more things if we'd like to.

Q: Thank you. Good morning, everyone. Just going back to the Embraer synergies, can you clarify whether this includes technology or personnel? Where are these synergies coming from? If you could just maybe clarify that.

A: Yeah. No, that's a good question, Amit. It's a broad range, right? We're looking at a bunch of different things, but we're looking at how we can use Existing assets better, existing facilities, how we can allocate the work between the different teams in a more efficient way. So, you know, there are different, also getting into more details of the flight test campaign, the CAPEX and OPEX associated with all of that. You know, it was a very big work. As I mentioned, there was more than 200 people involved. It came with hundreds of actions and we're starting to implement that. That's the beauty, right, of being part of a big group as Embraer. When you start to look things in more details and we bring everybody together, you are able to identify gains and synergies that, you know, you're not seeing before. So that's pretty much what we're doing. We mapped these 100 to 150 to capture in three years. And we are now moving forward with the plan.

Q: Just to follow up on that, Edu, will this impact more on the SG&A side or more on the R&D side, do you think, the cost synergies?

A: It's both. There are synergies in terms of... being more efficient in the way that we are going to be assembling the vehicles, in the way that we're doing the development, being more efficient on the general expenses, more efficient with third-party consultants, third-party service. There's a lot of things. I would say it includes both pockets, R&D and SG&A, general expenses. And as I mentioned, also industrialization, right? How we can be more efficient, not only assembling the conforming prototypes that are coming, but also on the production going forward. So there are different areas, pockets, and it includes both.

Q: On the cost of the aircraft side, roughly it's translating around $5 million per aircraft right now with the numbers you shared. Have any inflationary factors been built into this, given these trends all over the world where prices have been rising? I'm just wondering, curious about how this may end up in the next few years in terms of prices.

A: Johan, but feel free to chime in. The lease price is 5 million. As we are progressing on the development of our vehicle, we're gaining not only confidence on the specs of the vehicle in terms of range, noise, payload, and everything, but we are also getting more visibility on the cogs of the vehicle. We believe our vehicle, given the simplicity and the design, the Lift Plus Cruise design and the focus on the urban missions, we believe our vehicle is going to be extremely competitive in terms of cogs. We have been working also with our suppliers of the critical components to make sure that our cogs are stay within the range that will allow us to sell the vehicle at the $5 million list price and be highly profitable. Things are going in this direction, but we are the whole time challenging not only internally ourselves, but our suppliers to make sure we have a lower cost vehicle and how we can leverage the supply chain of Embraer and the supply chain that our big suppliers also have to have a competitive vehicle. Nice. Thanks, Edu. This is something how we build our program. We have the major systems covered by the suppliers. And this is also what we worked on very beginning. I mean, those contracts are lifetime contracts. So we don't look only just to develop the prototype or the production, but also make sure that the operation is covered to guarantee to our customers that they have a competitive aircraft. We do have also on those long-term and lifetime, the lifecycle aircraft contracts, sorry, the inflation, also formulas that allows us to control all this and including the aftermarket. So this is something that we have a good visibility. We brought from Embraer also experience, and then we're comfortable with what we have in our $5 million vehicles