New Horizon Aircraft Ltd. Q1 FY2027 earnings call

• Aircraft Development: Progressing the full-scale Cavarite X-7 demonstrator through detailed design and production of major systems (propulsion, flight controls, avionics, structures). Team size grew from 30 to over 65 employees and 85 FTEs including contractors.
• Strategic Partnerships: Selected Beta Technologies for flight control computers and fly-by-wire software, leveraging their experience with modern VTOL platforms. Collaborating with Marshall Aerospace for flight dynamics modeling.
• All-Weather Capability: Pursuing Instrument Flight Rules (IFR) and certification for flight into known icing conditions. Wind tunnel testing for ice protection technologies began in July under a $10.4 million INSAT project.
• Certification Strategy: Working with Transport Canada to complete certification basis and means of compliance. Designing the aircraft with certification efficiency in mind to shorten the regulatory timeline.
• Commercial Interest: Signed a non-binding LOI with V-Star Power Lift Aviation (Australia) for up to 100 aircraft (~$600 million potential value). Total signed LOIs cover up to 200 X-7s with >$1 billion indicated sales value. Also signed an LOI with Great Lakes Helicopters for MRO and training services.
• Industry Context: Highlighting the FAA’s eVTOL Integrated Pilot Program as a positive signal for regulatory engagement. Emphasizing the X-7’s unique hybrid-electric capabilities (no ground charging needed, high speed/range) for civil and military missions.

The company operates as a single development-stage segment focused on the X-7 aircraft. Financially, Research and Development (R&D) expenses were $7.4 million CAD, up from $2.7 million CAD in the prior year period, representing the primary cost driver due to full-scale prototype manufacturing and engineering. General and Administrative (G&A) expenses decreased to $1.7 million CAD from $3.2 million CAD, primarily due to lower stock-based compensation. The company reported a net loss of $4.1 million CAD ($0.06 per share), compared to a net loss of $10.9 million CAD ($0.29 per share) in the prior year; this improvement included a $3.8 million non-cash gain from warrant liability fair value changes. Liquidity remained strong with over $70 million CAD in cash.

• Development Timeline: Targeting formal test program commencement by spring of calendar 2027.
• Financial Run Rate: Expect R&D spending to remain elevated at current levels ($7.4M/quarter range) as design and testing activities continue. G&A expected to remain low relative to peers.
• Capital Position: Maintaining a patient capital strategy with >$70 million CAD in cash. No urgent need for dilutive financing; prioritizing non-dilutive sources like INSAT and SHRED grants.
• Certification Goal: Aiming for first aircraft certification by early 2030, though no fixed date is promised.
• Production Scale: Planning for initial production rates of 200–300 units per year, not high-volume automotive-style manufacturing.

• Regulatory Delays: Certification timelines are subject to regulatory approval processes; while aiming for 2030, no guarantees are made.
• Industry Headwinds: Potential negative market sentiment or technical failures by other eVTOL competitors could impact investor perception or regulatory scrutiny, despite Horizon's differentiated product.
• Operational Complexity: Managing integration of multiple suppliers and complex hybrid-electric systems poses engineering risks.
• Governance Challenges: As the company grows, maintaining strict governance and safety standards is cited as a critical operational challenge.
• Market Adoption: While LOIs exist, conversion to binding orders depends on successful flight testing and demonstration of all-weather capabilities.

Q: Josh Sullivan asked about the pilot training ecosystem and customer demand drivers for the X-7.

A: CEO Brandon Robinson explained that they are building an MRO and training ecosystem with partners like Great Lakes Helicopters. He noted the X-7’s fly-by-wire system makes it exceptionally easy to fly, potentially allowing commercial fixed-wing pilots to be type-rated quickly. Key demand drivers include superior speed, range, all-weather (cloud/icing) capability, lack of charging infrastructure needs, and operating costs 60-75% lower than traditional helicopters.

Q: Sam Dufault inquired about international MRO requirements and US market demand signals.

A: Robinson stated they are selectively partnering globally for MRO and training but focus on deep geographic understanding. For the US, he highlighted huge demand across civilian EMS, critical cargo, and disaster response (e.g., hurricane recovery) where the X-7 can operate without power grids. Militarily, defense primes are interested due to the aircraft’s speed and robustness for troop transport and logistics.

Q: Brian Lanthier asked about supplier integration progress and feedback from the Farnborough airshow.

A: Robinson reported smooth integration, citing Beta Technologies’ flight control system as a key advantage over developing such tech in-house. He noted that Farnborough feedback was positive, with some industry peers surprised by Horizon’s rapid progress on the full-scale X-7 and in-house propulsion testing.

Q: Scott Buck questioned the timeline for LOI-to-order conversion and potential non-dilutive defense funding.

A: Robinson indicated that binding orders will likely follow successful flight testing, as customers want to see the aircraft perform. He emphasized Horizon’s modest initial production scale (200-300/year) creates urgency for early buyers. Regarding funding, he confirmed active pursuit of Canadian initiatives like INSAT ($350M bucket) and US defense grants, noting precedent for winning US grants previously.

Q: Matt Chesler relayed questions about manufacturing partnerships, prototype count, and certification hurdles.

A: Robinson clarified that prototype rollout is independent of manufacturing partner decisions; they build prototypes in-house using traditional aerospace methods. They plan two initial prototypes (one CTAL, one VTOL variant) for efficient testing. On certification, he cited favorable existing regulations (FAA Part 21N, EASA SC-VTOL) as an advantage, with the main hurdle being developing means of compliance and gathering flight test data.