November 27, 2024
Publicly traded Volato is expecting to have its first EBITDA positive quarter in Q4 after an increased Q1 loss.
Volato, on its Q1 2024 earnings call this morning, said it expects a positive EBITDA quarter in Q4 of this year.
It reported revenue for the first quarter of 2024 dropped 16% from $15.7 to $13.2 million.
While Aircraft Usage Revenue jumped 72% from $6.7 million to $11.5 million, revenue from Aircraft Sales and Managed Aircraft both declined.
Aircraft Sales Revenue fell from $5.7 million to $0, indicating that the fractional did not receive any deliveries from OEMs during Q1.
Managed Aircraft Revenue dropped from $3.3 million to $1.7 million.
The result was Net Loss increased to $17.4 million from $7.5 million.
Adjusted EBITDA loss grew from $6.7 million to $13.1 million.
Deferred Revenue, which includes share deposits from fractional customers and prepaid jet cards, increased from $12.9 million to $19.0 million.
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Cash dropped from $14.5 million to $6.4 million at the end of Q1 2024.
Since then, Volato signed a term sheet for $14.5 million in financing.
The financing includes $13 million “to unlock deposits made to Gulfstream for its G280 orders and a $1.5 million equity commitment.”
According to its earnings call this morning, it expects to close the financing in the next several weeks.
“While OEM aircraft delivery delays put pressure on our revenue in the first quarter, we achieved strong year-over-year growth across our key metrics as we executed on our strategy to drive more favorable demand mix and higher yield per flight hour,” said Chairman and CEO Matt Liotta.
He added, “We had a strong April for blended yield, and we expect to deliver year-over-year growth again in Q2.”
Liotta noted, “Secular trends in private aviation, along with Volato’s unparalleled flying experience and value proposition for owners, provide us with good forward visibility into demand for both fractional sales and jet card program as well as ad hoc. Given the well-known OEM supply chain challenges which have pushed back delivery dates, we continue to expect the delivery of eight to 10 HondaJets but now expect delivery of two Gulfstream G280s in 2024.”
Liotta said the two to three HondaJet deliveries scheduled for Q2 “provide us with an immediate cash benefit as we execute on our backlog of fractional sales.”
|
Financials (financial metrics in thousands, except KPIs) |
Q1 2024 |
Q1 2023 |
Change |
|
Aircraft Sales Revenue |
– |
5,710 |
(100)% |
|
Aircraft Usage Revenue |
11,516 |
6,704 |
72% |
|
Managed Aircraft Revenue |
1,695 |
3,271 |
(48)% |
|
Total Revenue |
13,211 |
15,685 |
(16)% |
|
Net Loss |
(17,390) |
(7,515) |
131% |
|
Adjusted EBITDA |
(13,095) |
(6,683) |
96% |
|
Key Performance Indicators (KPIs): |
Q1 2024 |
Q1 2023 |
Change |
|
Total Flight Hours |
2,926 |
2,103 |
+39% |
|
Empty Percentage |
35.1% |
41.2% |
-6.1 pp |
|
Demand Mix |
Q1 2024 |
Q1 2023 |
Change |
|
Owner |
50% |
55% |
-5 pp |
|
Non-Owner |
50% |
45% |
+5 pp |
|
Blended Yield |
$5,313 |
$4,927 |
+8% |
|
Floating Fleet |
26 |
15 |
+11 |
|
Light Jet Market Share |
2.5% |
1.7% |
+0.8 pp |
|
Net Promoter Score |
82 |
86 |
-4 |
Source: Volato
CFO Mark Heinen added, “Following another quarter of strong operating results, we took steps to strengthen our balance sheet with a modestly sized financing to provide us with additional liquidity for working capital and to accelerate our fleet growth as we await the delivery of our HondaJets and Gulfstream G280s this year. Our aircraft deliveries in 2024 will provide additional cash as well as more capacity to grow our network and better leverage our cost base. With an expected revenue of over $120 million this year from fractional sales alone, continued revenue growth from aircraft usage, and our cost-savings measures, we expect that we can achieve positive gross margin and EBITDA in the fourth quarter of 2024.”
Volato said it had implemented cost-saving measures to reduce SG&A expenses by approximately $3 million per quarter.
The savings will come partly from a less than 5% headcount reduction.
Additionally, it plans to renegotiate some leases for additional savings.
Fifteen of its 26 HondaJets are on leases, with the remaining part of its fractional program.
In announcing the results, Volato said, “With the anticipated closing of the financing, forecasted aircraft sales, and cost-saving measures, the company believes that it will have sufficient cash to achieve profitability.”
On the call, Liotta said he expects the 2021 start-up to be EBITDA positive in Q4 of this year.
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Volato also announced a new head of sales.
Luis Garcia joins from Wheels Up, where he has been since 2015 and was most recently a senior vice president.
Garcia replaces Norm Katz, who left late last year.
Volato was one of several private jet flight providers that went public via a SPAC IPO in 2023.
Last year, it ranked as the 16th-largest fractional/charter private jet operator in the U.S.
Its full 10-Q filed with the SEC is here.
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