Vertical Aerospace Ltd. ((EVTL)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Vertical Aerospace Ltd. recently held its earnings call, revealing a mix of optimism and challenges. The company celebrated significant achievements in aircraft design and regulatory milestones, setting itself apart from most competitors. However, it also acknowledged the hurdles in bridging the valuation gap and securing necessary funding for future operations.
Industry-First Milestone Achieved
Vertical Aerospace marked a significant achievement by completing the critical piloted transition flight. This milestone positions the company as the first eVTOL OEM of its size to accomplish this under the U.K. CAA regulatory oversight, trailing only one competitor. This accomplishment underscores Vertical Aerospace’s innovative edge in the industry.
Strong Competitive Advantage in Aircraft Design
The VX4 aircraft design offers a distinct competitive advantage with the most spacious cabin in the industry. Boasting a 70% larger passenger cabin volume compared to competitors, the VX4 can scale from four to six passengers, significantly enhancing operator profitability.
Efficient Cost Structure
Vertical Aerospace has guided its cost to certification at $700 million, which is notably lower than its competitors. With 75% of non-recurring costs already quoted or contracted, the company demonstrates an efficient approach to managing expenses.
Strategic Order Book and Partnerships
The company maintains a large, globally diversified order book and is actively seeking partnerships with a global strategic player. These partnerships are crucial to support the transition from certification to commercialization, ensuring a smooth ramp-up.
Valuation Gap
Despite achieving or exceeding key metrics, Vertical Aerospace’s market cap is significantly lower than its peers. It trades at just 3% of company A and 6% of company B, highlighting a notable valuation gap that the company aims to address.
Cash Position and Future Spending Needs
Vertical Aerospace reported a current cash position of $117 million, with anticipated spending of $235 million over the next 12 months. This financial outlook necessitates strategic partnerships or additional capital to meet future operational needs.
Forward-Looking Guidance
Looking ahead, Vertical Aerospace provided guidance on several key metrics and milestones. The company is entering the final phase of its five-stage flight test program, with the critical piloted transition flight set to begin soon, pending final permits. They aim to complete certification by 2028, with a projected total cost of $1.1 billion. The company plans to unveil their certification aircraft in December and is focused on securing strategic partnerships and investments to support global production capabilities.
In summary, Vertical Aerospace’s earnings call highlighted a blend of achievements and challenges. The company is making significant strides in aircraft design and regulatory milestones, yet faces hurdles in valuation and funding. With strategic planning and partnerships, Vertical Aerospace aims to solidify its position in the competitive eVTOL market.