Vertical Aerospace Ltd. Q1 FY2024 earnings call

Key Points

• Stuart Simpson highlighted significant progress at Vertical Aerospace, including the relaunch in November with Flightpath 2030 strategy, aiming to lead the eVTOL sector by 2030. They have a full-scale piloted prototype, targeting piloted wing-borne flight in 3-6 months, and are developing a proprietary battery. The VX4 aircraft is designed for high safety (10 to the minus nine safety standard), industry-leading passenger and luggage capacity, and a focused business model with battery-as-a-service.
• Si Davies discussed the flight test campaign, emphasizing the importance of full-scale piloted tests to avoid surprises, completion of thrust-borne flight tests, upcoming wing-borne flight (conventional takeoff/landing), and the aircraft's stability, simplicity to fly, and human readiness for passengers.

Forward-Looking Statements

• Plan to initiate production of certification aircraft in 2025. Targeting piloted wing-borne flight in 3-6 months. Clear route to certification by 2028 and cash breakeven by 2030. Funded through 2025 with a ramp-up in spending towards certification.

Risks

• Forward-looking statements involve risks and uncertainties, detailed in the 20-F filed with the SEC. Concerns around downwash and outwash in the eVTOL industry, but Vertical Aerospace is not overly worried based on real-world testing of their prototype.

Question and Answer

• Q: About spend to certification and timing of spend steps.

A: Spend for 2025 is between $110M and $125M, with a ramp-up in the second half of the year. No detailed timing of spend steps provided now, but will be discussed later in the year.

• Q: Thoughts on U.S. FAA concerns about downwash/outwash.

A: Vertical Aerospace is not overly worried based on real-world testing, and customers are the primary interface for discussions around such concerns.

• Q: Cash burn projection and timeline for customer deposits.

A: Cash burn for 2025 is at the midpoint around $95M. Deposits from customers exist, but formal contracts with customers will start when the certification aircraft is ready and tested.

• Q: First routes and sales to high-net-worth individuals.

A: First routes likely to be airport to central business district (e.g., JFK to Manhattan). Sales to high-net-worth individuals are possible after certification with no additional regulatory hurdles required.

• Q: Geographic concentration of order book and FAA certification alignment.

A: Order book is geographically diversified across Americas, Europe, and Asia. CAA/EASA alignment streamlines FAA certification through concurrent testing and provision of evidence when certified in Europe/UK.