15-May-2023 Source: Eve Air Mobility
Eve Holding, Inc. (“Eve”) (NYSE: EVEX and EVEXW) reports its first quarter 2023 earnings results.
Eve is a pre-operational company dedicated to the development of an eVTOL (electric Vertical Takeoff and Landing) aircraft and the Urban Air Mobility (UAM) ecosystem that includes the aircraft development, air traffic management systems and services and support. Eve is not yet producing revenues; we do not expect meaningful revenues during the development phase of our aircraft, and financial results should be mostly related to costs associated with the program development.
Eve reported a net loss of $25.8 million in 1Q23 versus $10.0 million in 1Q22. The higher net losses were driven by higher Research & Development (R&D) expenses, which are costs and activities necessary to progress the eVTOL design, including the Master Service Agreement (MSA) with Embraer, and an increase in Selling, General & Administrative (SG&A) expenses. Higher R&D and SG&A expenses during the quarter were partly offset by financial investment income and FX gains of $4.3 million in the 1Q23 versus a gain of $0.4 million in the 1Q22 as Eve benefits from higher interest rates on its cash investments.
R&D expenses were $21.5 million in 1Q23, compared with $9.1 million in 1Q22. Our R&D efforts are primarily driven by the MSA with Embraer that performs several development activities for Eve. These efforts continue to intensify as the design of Eve’s eVTOL advances, including internal design, engineering, and program development and testing infrastructure.
SG&A expenses increased from $1.3 million in the 1Q22 to $6.2 million in the 1Q23, mainly due to the growth in the number of direct employees at Eve, who perform critical corporate and administrative functions including, strategy, sales, legal, supply chain and finance activities.
Including employees contracted through the MSA with Embraer and its subsidiaries, Eve now has approximately 600 headcounts engaged in the development of its eVTOL and other elements of the UAM ecosystem, versus approximately 400 in 1Q22.
During the first quarter of 2023, Eve’s total cash consumption was $19.9 million, versus $1.9 million in 1Q22. R&D associated with Eve’s aircraft development and SG&A expenses mentioned above were the main contributors for the higher cash consumption during the quarter. This was partly offset by an increase in accounts payable, mostly related to the MSA agreement with Embraer and higher accrued expenses – these grew by $5.7 million in the quarter, totaling $28.1 million at the end of 1Q23.
At the end of 1Q23, Eve’s liquidity position was $294.6 million – including cash, cash equivalents, financial investments, and related-party loan receivables, versus $310.6 million at the end of 4Q22. As of 1Q23, Eve did not have any debt on its balance sheet. The proceeds from the business combination with Zanite Acquisition Corp., and strategic PIPE investors raised in 2022, combined with potential advances from customers and current and future finance lines are the main sources of capital to fund Eve’s development and certification of its eVTOL.
Eve’s 1Q23 total liquidity – including still-undrawn BNDES credit lines of $96.8 million (to be disbursed throughout 2023 and 2024), was approximately $390 million.
Eve’s program development milestones and financial estimates for 2023 remain unchanged. We expect to conclude the selection of main equipment suppliers in the first half of 2023 and start the assembly of our first full-scale eVTOL prototype during the second half of 2023, followed by the test campaign in 2024. Eve’s total cash consumption expected for 2023 remains in a range of $130 million to $150 million, and includes all expenses such as R&D, SG&A and capital expenditures.
For additional information, please access the full 1Q23 Earnings release, available in the Investor Relations website at ir.eveairmobility.com
Management will discuss the results on a conference call on May 9, 2023 at 8:00 a.m. (Eastern Time). The webcast will be publicly available in the Upcoming Events section of the company website (www.eveairmobility.com).
To listen by phone, please dial 1-800-954-0591 or 1-212-231-2936. A replay of the call will be available until midnight, May 23, 2023, by dialing 1-844-512-2921 or 1-412-317-6671 and entering passcode 22026780.