Blade Air Mobility, Inc. Price & Performance (BLDE)

Any forward looking statements provided during the conference call are made only as of the date of this call. As stated in our SEC filings, Blade disclaims any intent or obligation to update or revise these forward looking statements except as required by law. During today's call, we will also discuss certain non GAAP financial measures, which we believe may be useful in evaluating our financial performance. A reconciliation of the most directly historical comparable consolidated GAAP financial measures to those historical non GAAP financial measures is provided in our earnings press release and investor presentation. Our press release, investor presentation and Form 10 Q and 10 ks filings are available on the InvestorRelationssectionofourwebsite@ir.blade.com. These non GAAP measures should not be considered in isolation or a substitute for financial results prepared in accordance with GAAP. Hosting today's call are Rob Wiesenthal, Founder and Chief Executive Officer of Blade and Will Haber, Chief Financial Officer. I will now turn the call over to Rob. Thanks, Matt, and good morning, everyone. As promised, we are pleased to deliver our first full year of adjusted EBITDA profitability as significant revenue growth and margin expansion in both medical and passenger drove a $17,800,000 year over year improvement in our adjusted EBITDA in 2024.

This important profitability milestone comes as we continued our rapid growth with revenue increasing 22.1% in Q4 twenty twenty four versus the prior year period while Q4 flight profit increased 40% year over year and Q4 adjusted EBITDA rose $4,900,000 year over year. Looking back, it's important to note how much progress we've made with adjusted EBITDA improving over $28,000,000 over the last two years.

This is only the first step in our plan to generate multiyear compounding growth in free cash flow and adjusted EBITDA as we onboard new medical customers, benefit from underlying growth and transplant volumes and realize continued benefits from passenger growth flight economics optimization and our expected midterm transition to electric vertical aircraft what you might refer to as a VTOL. As we continue to drive to further cost efficiencies in our passenger business, we remain laser focused on maximizing growth in urban air mobility products such as our New York City Airport Transfer Service which saw high teens year over year revenue expansion in Q4. Services like Blade Airport are key to accelerating and derisking our planned transition to the next generation aircraft I mentioned. Overall, this combination of revenue growth, and cost efficiencies enabled us to improve on our achievement of positive trailing twelve month passenger segment adjusted EBITDA last quarter, more than one year ahead of our target by posting $3,600,000 of passenger segment adjusted EBITDA for the full year 2024, an $8,600,000 increase versus the prior year. We have successfully positioned both the medical and passenger business to benefit from improved economics of scale driven by our aircraft investments and additional capacity purchase agreements that enable us to use our increasing volumes to drive margin expansion.

Our 119.6% year over year improvement in Medical segment adjusted EBITDA this quarter, 13.7% in revenue growth highlights the benefits of this strategy. We're also pleased to report that Q4 was our our first quarter with Medical segment adjusted EBITDA margins above our 15% near term target. Though this metric will show lumpiness quarter to quarter, driven by aircraft maintenance schedules and overall trip volumes and will back below target in the first half of twenty twenty five we're happy to be able to demonstrate the obtainability of this goal earlier than expected. I'll let Will provide a more detailed outlook later in the call. The improved performance is driven in large part by our aircraft strategy. Our own fleet continues to provide much more than just financial benefits. As illustrated by our expected launch with two new transplant centers in April, following competitive processes that required direct aircraft ownership. Early results following our European restructuring have been very encouraging with strong year over year revenue growth and solid profitability improvement in the winter ski season in the Alps to date. In addition to our excellent results, we made continued progress on strategic initiatives. This week, we announced a strategic partnership with Skyports Infrastructure.

A leading provider of ground infrastructure for advanced air mobility launching a pilot program that will expand Blade's existing vis the seat helicopter and John F. Kennedy International Airport. This will now be an addition to our pre existing airport routes to and from the West And East Side Of Manhattan and JFK and Newark Airports. The new service will fly passengers transferring to and from flights at JFK in addition to Long Island and Queens residents commuting to or from Manhattan for business or leisure on weekdays. The facility located at the Southern Tip Of Manhattan close to Wall Street is an important New York City hub for short distance aviation and follows Skyport's recent appointment as the operator of the Downtown Manhattan Heliport supporting the mandate from New York City officials to transition to Helliport from accommodating just helicopters to also supporting next generation Evitol. As such, this program aims to gather data on consumer demands flyer experience and logistics specific to the Downtown Manhattan Heliport and provide insights to help accelerate and de risk the launch of Aetal operations at facility. In March, Blade introduced a new mobile app that offers an enhanced user experience, easy flight booking, flexible payment options, trip management functionality and many more features.

We're getting a great response from our customers and if you haven't yet updated to the latest app, we can encourage you to give a try today. In medical, our organ placement service offering tops ended the year with six contracted customers and a strong sales pipeline. TOPS has continued to drive additional benefits for our and ultimately accept more organs for those in need. Program also gives us the opportunity to build trust and demonstrate our high level of service to new customers who may choose to utilize our logistics in addition to tops. Working alongside our friends at Organox, we are preparing for an April launch of the first phase of our multifaceted strategic partnership. This initial phase will enable transplant centers and organ procurement organizations to utilize Organox's Metro machine perfusion device on a case by case basis. Metro is a perfusion device for the liver, which represents the majority of the heart, liver and lung transplants that typically require dedicated air logistics. Perfusion technology allows transplant centers to accept more organs for transplant recipients and increase the amount of time organs remain viable outside the body. We are pre positioning Metro devices at key Blade Aviation hubs enabling rapid transport to Organox customer locations.

In this first phase, the Metro device will be used for perfusion only at a customer [indiscernible] we are working closely with the Organix team to prepare for potential future in flight for fusion completing aircraft testing and modifications now so that we'll be ready to hit the ground running assuming Metro is approved to With respect to our balance sheet, we remain careful stewards of our shareholders' capital focusing recent investments on aircraft and vehicles that generate great returns for our medical business, while continuing our evaluation of With $127,000,000 in cash and short term investments at the end of twenty twenty four, we believe we are well positioned to capitalize on such opportunities With that, I will turn it over to Will. Thank you, Rob.

I'll now walk through the financial highlights from the quarter, starting with Passenger. Excluding Canada, which we exited in August 2024, short distance revenue increased 18% year over year driven primarily by growth in New York Airport, leisure and other U. S. Short distance.

And Jet and Other revenue increased 85% year over year driven by strong flight volume combined with a relatively easy comp versus 2024. Continue to see significant profitability improvement in passenger this quarter as passenger segment adjusted EBITDA margin expanded by over six percentage points year over year to approach breakeven. This was driven by a six thirty basis point improvement in flight margin along with an 18% reduction in passenger segment adjusted SG and A. The profitability improvement in passenger was broad based driven by improvements in short distance, jet and other, our exit from Canada, and SG and A cost efficiencies. Turning to our Medical business. Medical revenue rose 13.7% year over year to 36,400,000.0 increase in air revenue was driven primarily by trip volume, partially offset by a reduction in block hours per trip a natural result of our strategy to increase the size of our dedicated fleet and position those aircraft closer to our customers. We continue to believe that this strategy is a win win And importantly, the right one for our customers, enabling lower costs and shorter call out times and this ultimately gives us a pricing advantage versus our competition. Rounding out medical revenue, ground and tops also contributed to revenue growth compared to the prior year period.

About 1% in Q4 Heart liver lung transplant volumes fell approximately 2% sequentially in Q4 twenty twenty four versus Q3 twenty twenty four compared to our expectation of a low single digit increase sequentially.

Medical segment profitability improved on a year over year basis and rebounded relative to Q3 twenty twenty four results. Medical segment adjusted EBITDA margin improved by over 700 basis points year over year to fifteen point one percent four. We The profitability improvement in medical was driven primarily by improved performance of our own fleet and dedicated aircraft along with lower adjusted SG and A relative to the year ago period which had an elevated expense level. Moving to unallocated corporate expense and software development, For the full year 2024, expenses fell 3% year over year, but we saw an increase of 12% year over year in Q4 twenty twenty four, partially due to the timing of incentive compensation associated with financial over performance for the year along with higher legal and professional fees in the quarter.

On the cash flow front, the difference between our Q4 adjusted EBITDA of negative $400,000 and cash from operations of negative $1,800,000 in the quarter, was primarily driven by non recurring items including legal and restructuring expenses. Our capital expenditures inclusive of capitalized software development costs, were $5,000,000 in the quarter and driven primarily by $3,200,000 of aircraft acquisition payments, while capitalized aircraft maintenance was approximately $1,100,000 We currently have 10 aircraft in operation and we're focused on optimizing the financial Given the significant strategic and financial benefits of our owned aircraft, we expect to add a low single digit number of similarly priced aircraft to the fleet over the next year or two.

We ended the quarter with no debt and $127,100,000 of cash and short term investments providing flexibility for strategic investments in aircraft, and acquisitions in medical. Turning to the 2025 outlook. We expect revenue in the range of $2.45 $265,000,000 dollars and double digit adjusted EBITDA. And Vassanger, we expect revenue of $90,000,000 to $100,000,000 in 2025, an increase from our previous expectation of $85,000,000 to $95,000,000 This represents low single digit revenue growth in short distance excluding Canada, and an approximate 5% to 10% decline in jet and other That's given the exceptional result in 2024 combined with low future visibility into this product. Jet charter volumes have remained strong year to date but this business line is particularly exposed to macro impacts on both demand and pricing hence our caution in terms of guidance at this early point in the year. As we realize the full year impact of recent cost reduction programs, continue our growth plans, we expect a low to mid single digit million dollars increase in passenger segment adjusted EBITDA for 2025 versus 2024. In Medical, we continue to expect double digit revenue growth in 2025, Though as I will shortly explain, we now see some uncertainty around meeting this target.

There are several data points driving our outlook in medical. First, industry transplant volume growth moderated throughout the year in 2024 with high single digit growth in the first half of the year followed by mid single digit growth in the second half of the year. While industry transplant growth has rebounded in the first two months 2025, in light of the second half twenty twenty four slowdown we're taking a slightly more conservative view of industry volume growth given the volatility we see as we kick off the year. Second, while it's a very small sample size, we've seen heightened variability in our own revenue for Q1 twenty twenty five to date despite the industry recovery. After low single digit year over year growth in January, we saw year over year decline in February while March to date is trending well above 2024. As such, we're a bit more cautious on Q1 expecting top line could be flat or slightly down versus the prior year. There are a few factors that play in Q1 twenty twenty five including a particularly tough comp in the first half of twenty twenty four relative to the second half In the first half of twenty twenty four, Medical segment revenue grew approximately 22% year over year compared with just 11% growth in the second half of twenty twenty four.

Lastly, as we've discussed previously, our strategy has been focused on utilizing owned and dedicated aircraft that are positioned closer to our customers reducing repositioning costs for our customers. While we see higher profit per trip on these aircraft, there was a modest revenue headwind from lower repositioning hours. And as mentioned earlier, this strategy helps us save money for our customers and creates a pricing advantage versus competitors. Given all the dynamics discussed above, we expect medical revenue to be flat to up year over year in the first half twenty twenty five before returning to double digit growth in the second half. Twenty twenty five. As mentioned, the comparison base eases in the second half of twenty twenty five and several new customer contracts will ramp up throughout Q2 and Q3 twenty twenty five. All of this means that we will have much improved visibility the time we report first quarter earnings in May and we expect to provide an update on our outlook at that time. Our medical business is always a bit lumpy, can be unpredictable at times. As has been our practice, we'll call out when we see unusually low or high activity in the short term but I want to stress that we remain incredibly positive on the opportunity for continued growth market share expansion increased operating leverage and business line extensions.

Turning to margins, we're pleased this quarter to have delivered Medical segment adjusted EBITDA margins above our 15% target for 2025. Demonstrating the obtainability of this target. However, margins will be somewhat volatile driven primarily by regularly scheduled maintenance required on our owned aircraft. In 2025, the cadence of time based scheduled maintenance on our own fleet is expected to be above normal. Resulting in additional maintenance downtime and lower aircraft utilization for the owned The heaviest maintenance period will be in the first half of the year before improving in the second half. In 2026, we expect less scheduled maintenance and associated downtime relative to 2025 and 2024. Given the revenue improvement we're expecting for the year along with the timing of maintenance downtime for our own fleet, we we expect Medical segment adjusted EBITDA margins to start the year slightly above 10% in Q1 and improve throughout 2025 with the second half of the year averaging above our 15% target. We still expect an approximately 15% Medical segment adjusted EBITDA margin for the year in 2025, this could slip below our full year 2025 target depending on the timing of completion of scheduled maintenance during the year. Moving on, we remain focused on costs and adjusted unallocated corporate expenses and software development is expected to decline slightly year over year in 2025.

Lastly, barring any large unforeseen non recurring items, we continue to before aircraft acquisitions. Cash flow will be burdened by elevated maintenance spending on our own fleet, and we expect capital expenditures before aircraft acquisitions of approximately $8,000,000 in 2025, of which $5,000,000 relates to aircraft maintenance that will be weighted which is expected to moderate in 2026. Capitalized software development is expected to be in the range of one to two million dollars in 2025, with the remainder of capital expenditures driven by vehicle purchases and leasehold improvements. Despite the near term variability in medical, the underlying factors contributing to our positive medium and long term view of the business remains sound. We continue to expect attractive organ transplant industry growth rates driven primarily by regulatory change increased perfusion technology adoption and lower cost of the same. And we remain confident in our ability to continue market share gains by winning new accounts, and converting TOPS customers to add logistics all while leveraging our experienced sales team and reliable service. We have several adjacent growth opportunities in medical, including grounds, organ placement service offering, along with the opportunity to expand into new time critical logistics verticals, where we have recently made key sales hires.

Lastly, we expect to continue to see significant margin as Medical segment adjusted EBITDA margins rise towards our high teens midterm target. Given our increased scale, and solidification of our owned aircraft strategy. With that, I'll turn it back over to Matt for Q and A. Thanks, Will. We'll start by taking analyst questions and we'll follow-up with questions from the SEC Q and A platform. I'll now turn it over to the operator for analyst questions.

Our first question comes from Jason Helfstein with Oppenheimer. Your line is open. Hey, good morning, everyone. Thanks for taking the question. So really nice to see the movement to positive EBITDA and the improvement there.

So I guess how are you thinking about it? We've obviously kind of seen kind of moderated SG and A. The What is the catalyst, I guess, in each of the two businesses that would make you want to lean more into growth? And I guess as you think about medical, how much of it has to do with kind of some of the kind of new partnerships and new technology you want to deploy. Question one. And then number two, Rob, I mean, what's your latest kind of timing on when you could see passengers in an eVTOL if you had to guess? Thank you.

We start with Will? Sure. On the SG and A front, expect to see continued savings in the passenger business in particular.

As you know, some of the actions we took towards the end of twenty twenty four, specifically exiting the Canadian market and restructuring our European operations. You haven't yet seen the full year impact of that. So the combination of that and our expectation of continued growth is what's going to lead to that low to mid single digit million dollar improvement in passenger segment adjusted EBITDA in 2025. We don't think that we're making a trade off in terms of growth. We think we're optimizing the business and focusing on the areas that have the biggest growth potential. So that's really our focus there and passenger. And in medical, we talked about how we have a number of new customers that are coming online and Q2 and in Q3. And so those are what will drive kind of the larger step function change in growth in medical. As the revenue base gets bigger, obviously winning a big new contract, doesn't move the needle as much So you see a little bit of that, but we're very excited and optimistic about our ability to continue winning those big new customers. And the fact that the onboarding we have line of sight to right now is more Q2, Q3.

Is why we've guided for more of that double digit growth in the back half of of 2025. But there's no trade off in medical of of cost savings that are reducing growth there.

And then I think your last question was around the partnerships Very excited, particularly about the Organox partnership. This first phase will be a little smaller than future phase where if they get the approval to fly the device while it's perfusing in flight, We expect that to have a larger overall impact. So we're preparing to be able to do that with the expectation that will happen later in the year. But the timing of that is uncertain. So for now, we're really helping out customers that don't yet have an device, get one for a case by case usage. And the back to base model will there be perfusing at the OPO or at the hospital. So would expect that to ramp up a little more. Once the device is approved to perfuse and FLYSE and we'll keep giving updates we have more information. [indiscernible] Okay, Jason. Yes, I think what you might be alluding to is recently some of the leading OEMs have kind of in a way pushed back the deployment schedules at least for The U. S. And I think so what we're kind of looking at is I think you'll be seeing these aircraft, these Lucht vertical aircraft, EVA or Evital, in The Middle East probably first quarter twenty twenty six, maybe a little bit at the very end of 2025 just because they've really fast tracked everything.

Think that will be a little bit more exhibition oriented, but people will be able to see the technology, get excited about it. And then I would assume probably late twenty twenty seven for The U. S. Being here and maybe like full commercialization could even be twenty eighth first quarter. But that being said, what I'm really enthusiastic about is that now that we're fully profitable in passenger, we have this engine that is growing and acquiring passengers The brand keeps getting better. We got more routes.

We have more ways to people have experienced urban air mobility. So I think our view is that we're just going to be coming that much stronger as a platform for urban air mobility with enhanced infrastructure, routes, revenues associated with that international exposure and just flying more and more people. So at that point when that transition begins, I think that we just become that much more fortified and we're kind of in a way reducing the kind of onboarding risk to shifting people from helicopters to EBA or EBITDA. I hope that is that a answer your question?

Yes, I appreciate that. That's helpful color. Thanks, guys.

Our next question comes from Edison Yoo with Deutsche Bank. Your line is open.

Hey, good morning. Thanks for taking our questions. First question, follow-up on the EV toll one. Just now. How do you think about the the time it takes to ramp? And it's mainly in the context of obviously these are new novel aircraft You just put out kind of late twenty seven, '28. How much time does that factor into kind of get acquainted with the aircraft, the performance? And then also, in the beginning, would you envision you taking on ownership the aircraft or leveraging that through some other type of financial partner? Can you just repeat the first part of your question? I got the last part, but it's your very first part. [indiscernible] yes, the time it takes to get acquainted the aircraft or just to get familiar enough to operate it? Or certainly testing time? Yes. Yes.

Got it. Okay. So I think what you'll see in the beginning is that the OEMs will be doing very limited flights don't want to call them exhibition. I don't know what they'll call them. Really testing out these aircraft in the wild, so to speak. We're looking at two miles in terms of our using these aircraft. One would be enabling our current operators to purchase them. And as you know, a lot of the leading are in the business of selling those aircraft. And we today facilitate our our partners, our operating partners to help them buy aircraft by giving them capacity usage agreements. So they'll act [indiscernible] work with Airbus or work with Dell and say, I have a commitment from Blade for number of hours, I'd like to buy an aircraft and they can finance against that. The same thing is going to happen in Evita. So and then that is one model. And the other model is I there have been a number of OEM manufacturers who said, we would like to give to own these and let you decide where they go and what they do and we'll even operate them for you. So those are kind of the two models that we'll see.

I think it's important to mention to understand that in the beginning, there will be a cohabitation phase, which makes Blade even more important in the development of the Vitale ecosystem.

That is because not all these aircraft are going to be able to go to all the different routes we have. Take all the different types of missions, all the same types of missions, whether it be medical or short to airport, or longer to leisure markets, or in weather. So you're going to need the portfolio of different type of vertical aircraft, including helicopters in the beginning. It will take some time. And so anybody until our fleet is 100% electric.

Understood.

Understood. Second question, different topic, Europe, it seems you're getting quite a bit of good traction there. Can you just remind us I know you mentioned the growth, but in terms of the profitability maybe how much the magnitude of improvement has been since you turned that around?

Hey, Edison, Will here. We pulled out several million dollars of hard cost from Europe. So I think that we feel really good about. The growth as you remember, close to 50% of the revenue comes through in Q3. So we're happy that the ski season is going well. But the big chunk is in that summer season. And so we'll have to wait and see how that goes before we can give you a view on the top line growth.

But we did really pull out hard costs. So that's a significant driver And low to mid single digit million dollar improvement and Passenger segment adjusted EBITDA we're talking about for 2025. This has been a big part of prior year some of the drag we had on passenger. And I think that the improvements in Europe really accelerated us into profitability. They played a big role here. As Will said, Win, it's been a great ski season. And I think that we're kind of we're up half our sea legs. It took some time, but they the business is really working over there. Preorders on Monaco Grand Prix look good. It My expectations for the summer in terms of international travel remain unabated despite what you may have heard from certain airlines and such. Obviously, a lot of can be weather dependent in the summer also, so it can get a little bit choppy. But we feel really good about where we are with Europe.

Awesome. Thank you. Our next question comes from Bill Peterson with JPMorgan. Your line is open.

Yes.

Hi. Good morning and thanks for taking the questions. It looks like even excluding Canada, loans were slightly down year on year.

Can you touch on what how that impacted? I understand you're driving higher pricing, so that's a positive. And I guess when we think about passenger margins more broadly, surprisingly upside, how should we think about the trajectory through 2025?

Bill, you were asking about seat count, did I hear you right?

Yes.

Yes. I think that's function of us optimizing the business in 2024. In Europe, trying to offer the right schedule. For our scheduled group between Nissan Monaco give people seats when they want them, but also not offer as many seats when there's not as much demand. Same approach our New York airport service. And so you're seeing great revenue growth there. And we're just trying to optimize, actually give people more seats during the time that they want them. But put less inventory on the shelves when there's less traffic. And there's more of an opportunity for us to lose money during those times. We don't have the load factor on each flight and actually ties right into question on margins. We do expect to see continued increases our margins both because of those actions that we've taken on pricing in the passenger business, on optimizing the schedule. And then also once you get to the point that we're at now, where we have a profitable business and we have a profitable scheduled product, flying people between Manhattan and the airport, for example, that incremental seat that we sell on a flight that already has several paying passengers, that seat is going to drop down at close to 100% margin contribution.

And so the gearing really in a great place and that's another important contributor this inflection we're seeing in passenger profitability right now.

Well, I'll just add to that, Bill. I mean, this has been a what you're seeing has been conscious.

A conscious effort in our part to accelerate to profitability. I think that we made the assessment that within the New York area where we have 100% market share in the buy seat business, which is really an urban and mobility product that is most geared toward what electric will be in a couple of years. And in Europe, where we have leading market share, number one market share, that it didn't make sense for us to kind of like chase our tail and just get as many, butts and seats as possible if it was going to sacrifice profitability. So the idea is to optimize that schedule taking as much price as we can kind of have prudent growth with profitability coming first. If we got into different type of environment and we wanted it was competitive and we wanted really open up schedule or be more aggressive on price. We could do that.

And then at that point, there's obviously a lot more awareness of the product. There's a lot more going on. It should be good for everybody. But at this point, as one of one, felt this is the right way to do our business. And especially when you think about the timeline for eVTOL being stretched out [indiscernible] Keep growing that Blade. So we're that much stronger when it arrives.

Yes. That's a good lean into my second question recognizing that's probably going be a few years before we see electric aircraft. But think several companies nonetheless are trying to have service between the Downtown Manhattan, Helleford and JFK and You're going to be, I guess, an early beneficiary of that. But if we think more longer term, what would be a differentiator for your offering? And think in the past you've talked about barriers entries in some cases. By having exclusivity, which doesn't appear to be the case here, in other cases just by having sort of infrastructure how should we think about your New York longer period of time given probably New York wouldn't really want to have exclusive landing zones?

You kind of broke over the last part of what you were at, Could you just repeat the second part of your question?

Long term durability of your New York business given it's probably appears unlikely that New York would want to have exclusivity in terms of landing zones? I guess it's life difference, but I think that you'll see in the beginning that we very well may have exclusivity in terms of passenger terminals. If you can't aggregate your passengers, you can't have your own distinct terminal space to do that. You're working at a general aviation and we're processing tons of passengers turning them around every five minutes in cases So I think in the beginning until their new landing zones, that's kind of the benefit of our company is that we have this incumbent infrastructure both in here and in Europe. It is true that anybody can land at any of these public use heliports, but whether it be by contract where we have exclusivity or by just pure geography in terms of where you would put another facility. We feel that we are fully entrenched in New York City and that'd be really difficult to compete with us on that. Bill, I would just add from a financial perspective that because we've aggregated so much demand over so many years, including folks that have annual passes that they're renewing every year.

We've solved that difficult problem of both having enough people on every flight to have money to make money and having enough flights order to utilize the aircraft enough that it's economical to fly the aircraft on the route. So there's two layers of utilization that you have to accomplish. And so it puts us in a position to have a much broader schedule and have an actual profitable product that we're offering our customers versus the ramp could be very expensive if you don't already have that demand aggregated.

The last thing I would add Bill is that when we look at and we've done a lot of work on this, the first people who will be flying E V saw the most likely people are going to be higher income and have flown in helicopters. That's your first thing. Everybody is going to be a lot of other people are going to wait and see. So I in the beginning, you should really see very strong kind of pull from the Blade customers switching to this new type of aircraft whereas other people may be a little bit more wait and see on it. So I feel really good in terms of when this arrives. A hell lot more optimistic about the opportunity than I am worried about competition in this market, especially in New York.

Okay. Thanks for the comments. Sir. Maybe my last one and sorry for cutting out. And I might have missed it, but on some of this maintenance you're undertaking in your medical segment in the first half of the year, I might have missed it, but is this something that we should think of as somewhat of a future seasonality meaning you're going to be doing a certain times of year or you're just taking advantage of it now? I'm just trying to get a sense for to think about if we need to think about modeling this type of maintenance on a go forward basis for example, next year and beyond? Yes. Bill, is this time based maintenance So it's required scheduled maintenance that happens for example, engines every two thousand five hundred hours And what we're calling out is this the cadence in the first half is well above what would you what you would expect to be the average. So for example, we've got 10 aircraft based on the amount of flying that we do would expect to need to do two sets of engines every year. Just to put it in perspective, we have four sets of engines that we need to do in 2025.

So it's just elevated relative to the average cadence that you would expect. And so as we called out 2026, we have far fewer that we need to do than you would expect. On average. So we'll keep giving guidance. It's a bit of a moving target. Because the more you fly, the earlier that maintenance event comes up. But we'll continue to keep you appraised whenever there's a situation where it's it's above average. And remember, that's not just the CapEx situation for us. It also means the downtime of the planes is going to be elevated And so that will impact our ability to get operating leverage on the planes during that time period. Which is why we gave a note of caution for the first half on our Medical segment adjusted EBITDA margins. I think I just want to add to that. This is new for a lot of Blade investors in terms of obviously owning this portion of the fleet albeit purely for medical. Depending on the timing of when you buy these specific aircraft, of where they are in their life cycle ends up being when you end up having these kind of major maintenance overhauls that are accounted into our RI and then accounted into the kind of margins and to the announced we do that to make sure that we know this was a smart deal and it has been a smart deal both on an increase in margins and an increase of return on capital basis.

But you can't pick when these when the schedule happens, it depends on the year, the plane and when you bought it. It just happens to be that the timing is that we're going to have a fair amount of the scheduled maintenance this year We want to get investors comfortable with some of this lumpiness, but of however, over time and over any given certain amount of full year, we are seeing and we expect to continue to see the benefits of having this ownership. So I want to make sure everybody understands that this is not on foreseen maintenance and not has anything to do with something that was not planned when we originally purchased these aircraft.

Okay. Yes, that's clear and we look forward to catching up very soon.

Great.

See you shortly.

Our next question comes from [indiscernible] Lake Street Capital Markets. Your line is open.

Thanks for taking my questions. Congratulations on a nice end to a good year here. First question on the passenger segment. I'm wondering if you can elaborate a bit on pilot program at the Downtown Heliport and can you talk about really what your targets what your objectives are from a data analysis perspective? And then also comment on if you think this could evolve to be to go from a pilot project to to some kind of more notable revenue contributor before Sure. Thanks and great to hear you on the call.

So yes, I'm very excited about this about this alliance with Sky Ports. As you probably know, Sky Ports has been a leader working with both Joby and Archer and other companies in terms of around the world building verticals that are kind of EV tile first. And I think that what you're seeing is what we alluded to before their timeline has been stretched a bit. And I think in terms of the deployment of Avital, and they see the that they have a desire and and the willingness and need to work with us on the rotorcraft side really provide that transition because it's really going to help de risk and accelerate that transition over time. We've come up with a structure where we do not take economic risk and we have are using this teleoper as you would imagine, we probably know more about vertical transportation in New York area than anybody.

Typically, Wall Street has not been the strongest of HeliForce for our customers.

But they are putting a lot of money in terms of capital to make this a kind of world class facility. So I think the information we're trying to get, a lot of it has to be about really the flow of passengers and where people are living, where people are working as to whether or not there is a viable group of flyers where this becomes highly valuable. And I think it actually will over time.

So I think that we have kind of the best of both worlds. We get to try this out not have downside risk. And if it works for us in Skyports, clearly, we're going to continue it. This is now our third place in Manhattan, which is kind of amazing if you think about most major cities that you can actually pick if you want to fly into the Eastside, into the Westside or into Wall Street from any airport or depart from any of those zones. At this point, we pretty much have it a bit from my perspective locked up. There are no other landing zones right now in New York City.

And in the beginning, as we all know, once this eVTOL is deployed, you are going to be using incumbent infrastructure. And we have terminals in both the Eastside and Westside and we will be recommissioning allowance that we've had in the past in Wall Street. And in terms of the data, but we really want to get out of this and this is really helpful to Sky Sports is kind of how what is the right what are our best practices to get people on and off aircraft as quickly as we can What are best practices to make sure this harmonization between people's vehicles at that terminal, whether it be ride sharing cars or any other type of transportation and make sure that works as smoothly as possible. And they can we can take that knowledge then kind of really get that through the DNA of the employees of Wall Street. So they can run the best service possible today and continue that until we be tall tomorrow.

Very good. That's helpful. And really exciting development. On the medical side for my follow-up here, the two new transplants centers you have coming online here that were announced back in November, it's great to see the visibility that gives you here in the second half of the year. Can you talk about the kind of how robust the pipeline is for additional centers to potentially come into you that would give further visibility here in the second half or maybe into '26?

Yes, we got a great pipeline and we're really we're kind of seeing two funnels for the pipeline. You have the traditional logistics funnel that has driven a lot of growth over the last several years. And then we also have the tops funnel. And we recently had our first customer that was a tops customer and over the course of several months, we impressed them with our service. Our attention to detail, helped them to be able to evaluate more organs. And then they asked us to help them with their logistics needs as well. So we really feel like we're well positioned to have more of those shots on goal to show people why we're different, why we're better, why we can help their their hospital become more economical as they go recover organs folks that need them.

Very good. I appreciate that color. Thanks for taking my queue. Thanks a lot, Ben. Great to have you on the call.

Thank you. I'm showing no further questions over the phone at this time. I would now like to turn it back to Matt Schneider.

Great. So we're going to take a few press First one is for Rob. So with Blade infrastructure in place on the passenger side, how are we thinking about or considering additional strategic partnerships or alliances?

Sure. In terms of our infrastructure, there are [indiscernible] a bunch of things that are going on. We continue find new dormant landing zones as we did in New Jersey. Where we can kind of, well, I'd say, relight them. And those can be very interesting interesting for corporate and also potential individual travelers but that's something that we kind of we want to control them. We want to be able to in a profitable way introduce products when they make sense, but they'll really kind of [indiscernible] Again, New Jersey is an example of that, Atlantic City, the Oceans Casino, is that as well. In terms of the the existing infrastructure there are a lot of brand partnerships where we are paid to partner with brands, where they actually either bring in their products or somehow get some type of exposure.

Those are things that are kind of at 90%, 100% margins. So that can be while the revenue numbers are small, they're really strong in terms of what falls to the bottom line. And I think that in Europe, we're really starting to bring the power we have at the brands over there and we're looking at bringing market ships more on a global level than we have done on a local level in the past. And we're getting much more involved in events We are the official helicopter company for the Ryder Cup, which is probably one of the largest or if not the largest sporting event, specifically with golf. Next fall in Vest Stage Long Island where we'll have action eight helipads operating every day for over a week. Formula One is probably the largest movement of non military helicopter in one day. Across the world where we are number one in market share and we act actually have our own lounge almost within the track of the Monaco Grand Prix and we're taking three hour drives plus and moving them to seven minute flights. We're already seeing presales for that. So I think it's about taking the existing infrastructure looking, talking to corporates that are nearby, making sure communicating with the community, who would be interested in using that.

Brand and also really thinking about how this fits into the network of events as sports and entertainment just kind of that much more important across the world as we grow this business. Great. The second question is relates to the first question. How are we thinking about balancing capital allocation within passenger as we approach eVTOL given our desire to invest also in the medical business. I think as I've said before, when it comes to large large scale M and A, which we're looking at in a on a daily basis, and we really feel like there are a number of The best deployment of our capital on our ROI base with respect to companies and large scale transactions right now is on the medical side. I think given the fact that passengers profitable, we've been working at it for ten years, I think we are in a really good Blade. That being said, we'll be opportunistic, but it will do it would be nothing that would either cause any kind of meaningful impact to our cash flows on the passenger side nor deferred capital that would be needed to medical.

Great. Well, that concludes our Q and A portion of the call. I wanted to thank everyone for joining call today. Please reach out if you have any questions and we look forward to updating you we report Q1 earnings in men. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.