Surf Air Mobility Reports First Quarter Revenue Growth Above Guidance and Announces CEO Transition
Q1 2024 Revenue of
CEO Transition:
Deanna is a seasoned industry leader with a track record of success in the C-Suite of multiple innovative companies across the air mobility sector. Previously, Deanna was CEO of
“We are thrilled that Deanna has agreed to assume the role of Chief Operating Officer and interim CEO as the company turns its focus to profitability and efficiency across its flight operations,” said
First Quarter Financial Highlights:
Surf Air Mobility is providing unaudited results for the period ended
-
Revenue
-
Revenue of
$30.6 million for first quarter 2024 compared to$27.9 million for the same period of the prior year on a pro-forma basis, beating first quarter 2024 guidance.
-
Revenue of
-
Net Loss
-
Net loss of
$(37.0) million for first quarter 2024, compared to$(15.5) million for the same period of the prior year on a pro-forma basis, which includes investment in R&D for electrification and software technology, stock-based compensation, transaction costs and other non-recurring items.
-
Net loss of
-
Adjusted EBITDA
-
Adjusted EBITDA of
$(16.5) million for the first quarter 2024, compared to$(11.7) million for the same period of the prior year on a pro-forma basis, meeting our first quarter 2024 guidance. Adjusted EBITDA includes investment in R&D for electrification and software technology. - See the Adjusted EBITDA table for the reconciliation from Net Loss to Adjusted EBITDA.
-
Adjusted EBITDA of
As of
Developments on Key Initiatives:
-
Mobility
-
Congress is expected to imminently pass theFAA Reauthorization Act, which, in its current form, would positively impact the Essential Air Service (“EAS”) program by raising the subsidy cap from a maximum of$200 per passenger to a maximum of at least$650 per passenger. -
As of
March 31, 2024 , Surf Air Mobility supported 19 communities under the EAS program. TheFAA Reauthorization Act requires the total cost of an air carriers proposal to be equally weighted with other factors such as local recommendations, including frequency of service, and interline agreements. This focus on cost favors Surf Air Mobility’s low-cost Caravan fleet. -
Textron Aviation aircraft deliveries are on track for the third and fourth quarter of 2024. -
Surf Air Mobility entered into an MOU to supply electric powertrains to Tanzanian
Cessna Caravan operatorAuric Air , bringing total penetration into Africa’s Caravan footprint to ~13%.
-
-
Electrification
- Aircraft electrification program is on track to complete the conceptual design phase by the fourth quarter of 2024.
-
Software
- Continuing development of B2C and B2B software platform to enable the regional aviation ecosystem, from passengers to air operators, with a suite of software tools powered by AIP, Palantir’s AI engine.
“Once again, Surf Air Mobility achieved many of our goals in the first quarter, while also meeting or beating guidance. We worked with Congressional leaders on both sides of the aisle to help reform and expand the Essential Air Service program in a way that benefits passengers, commuter air carriers, and taxpayers, while continuing our drive toward electrification, which benefits everyone,” said
Strategic Update:
To underpin the company’s ongoing efforts to balance growth with profitability, Surf Air Mobility is undertaking a strategic review that will ultimately result in cost reduction and other expense control measures aimed at returning airline operations to profitability.
Surf Air Mobility is also actively pursuing other strategic initiatives with partners and affiliates, including the creation of one or more joint ventures, to separately capitalize the company’s electrification and software efforts and maximize shareholder value creation from these substantial investments.
The company intends to provide a more comprehensive strategic update on these, and other, initiatives at its investor day that will now, in light of the CEO transition, be held in the third quarter of 2024.
Capital Structure Update:
Surf Air Mobility has retained a leading investment bank to more fully represent the company in its efforts to secure additional, non-dilutive or less-dilutive capital in the form of a credit facility.
“Management is continuously searching for ways to optimize our capital structure and reduce dilution to our shareholders,” said
Second Quarter 2024 Financial Outlook:
-
Revenue, in the range of
$28.0 million to$31.0 million . -
Pro forma adjusted EBITDA, in the range of
$(18.0) million to$(16.0) million , which excludes the expected impact of stock-based compensation, changes in fair value of financial instruments, and other non-recurring items.
Surf Air Mobility will provide full-year 2024 guidance at its Investor Day to be held in the third quarter of 2024.
About Surf Air Mobility
Surf Air Mobility, headquartered in
Forward-Looking Statements
This Press Release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, including statements regarding the anticipated benefits of the transaction; Surf Air Mobility’s ability to anticipate the future needs of the air mobility market; future trends in the aviation industry, generally; Surf Air Mobility’s future growth strategy and growth rate and its ability to access its financings and expand its business. Readers of this release should be aware of the speculative nature of forward-looking statements. These statements are based on the beliefs of Surf Air Mobility’s management as well as assumptions made by and information currently available to Surf Air Mobility and reflect Surf Air Mobility’s current views concerning future events. As such, they are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, among many others: Surf Air Mobility’s future ability to pay contractual obligations and liquidity will depend on operating performance, cash flow and ability to secure adequate financing; Surf Air Mobility’s limited operating history and that Surf Air Mobility has not yet manufactured any hybrid-electric or fully-electric aircraft; the powertrain technology Surf Air Mobility plans to develop does not yet exist; any accidents or incidents involving hybrid-electric or fully-electric aircraft; the inability to accurately forecast demand for products and manage product inventory in an effective and efficient manner; the dependence on third-party partners and suppliers for the components and collaboration in Surf Air Mobility’s development of hybrid-electric and fully-electric powertrains and its advanced air mobility software platform, and any interruptions, disagreements or delays with those partners and suppliers; the inability to execute business objectives and growth strategies successfully or sustain Surf Air Mobility’s growth; the inability of Surf Air Mobility’s customers to pay for Surf Air Mobility’s services; the inability of Surf Air Mobility to obtain additional financing or access the capital markets to fund its ongoing operations on acceptable terms and conditions; the outcome of any legal proceedings that might be instituted against
Footnotes
Use of Non-GAAP Financial Measures: Surf Air Mobility uses Adjusted EBITDA to identify and target operational results which is beneficial to management and investors in evaluating operational effectiveness. Pro Forma Adjusted EBITDA is a supplemental measure of Surf Air Mobility’s performance that is not required by, or presented in accordance with,
Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.
Surf Air Mobility presents Pro Forma Adjusted EBITDA because it considers this measure to be an important supplemental measure of its performance and believes it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in its industry. Management believes that investors’ understanding of Surf Air Mobility’s performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing its ongoing results of operations.
Consolidated Balance Sheets as of
|
|
|
|
|
||||
Assets: |
|
|||||||
Current assets: |
|
|||||||
Cash |
$ |
1,278 |
|
$ |
1,720 |
|
||
Accounts receivable, net |
|
4,710 |
|
|
4,965 |
|
||
Prepaid expenses and other current assets |
|
10,725 |
|
|
11,051 |
|
||
Total current assets |
|
16,713 |
|
|
17,736 |
|
||
Restricted cash |
|
713 |
|
|
711 |
|
||
Property and equipment, net |
|
46,706 |
|
|
45,991 |
|
||
Intangible assets, net |
|
25,777 |
|
|
26,663 |
|
||
Operating lease right-of-use assets |
|
12,263 |
|
|
12,818 |
|
||
Finance lease right-of-use assets |
|
1,352 |
|
|
1,343 |
|
||
Other assets |
|
5,262 |
|
|
5,727 |
|
||
Total assets |
$ |
108,786 |
|
$ |
110,989 |
|
||
Liabilities, Redeemable Convertible Preferred Shares and Shareholders’ Deficit: |
|
|||||||
Current liabilities: |
|
|||||||
Accounts payable |
$ |
20,575 |
|
$ |
18,854 |
|
||
Accrued expenses and other current liabilities |
|
72,233 |
|
|
59,582 |
|
||
Deferred revenue |
|
18,122 |
|
|
19,011 |
|
||
Current maturities of long-term debt |
|
5,080 |
|
|
5,177 |
|
||
Operating lease liabilities, current |
|
4,837 |
|
|
4,104 |
|
||
Finance lease liabilities, current |
|
249 |
|
|
215 |
|
||
SAFE notes at fair value, current |
|
14 |
|
|
25 |
|
||
Convertible notes at fair value, current |
|
7,852 |
|
|
7,715 |
|
||
Due to related parties, current |
|
36,508 |
|
|
25,431 |
|
||
Total current liabilities |
|
165,470 |
|
|
140,114 |
|
||
Long-term debt, net of current maturities |
|
19,985 |
|
|
20,617 |
|
||
Operating lease liabilities, long term |
|
4,666 |
|
|
5,507 |
|
||
Finance lease liabilities, long term |
|
1,143 |
|
|
1,137 |
|
||
Due to related parties, long term |
|
1,288 |
|
|
1,673 |
|
||
Other long-term liabilities |
|
22,535 |
|
|
19,426 |
|
||
Total liabilities |
$ |
215,087 |
|
$ |
188,474 |
|
||
Shareholders’ equity (deficit): |
|
|||||||
Common shares, |
$ |
8 |
|
$ |
8 |
|
||
Additional paid-in capital |
|
533,191 |
|
|
525,042 |
|
||
Accumulated deficit |
|
(639,500 |
) |
|
(602,535 |
) |
||
Total shareholders’ deficit |
$ |
(106,301 |
) |
$ |
(77,485 |
) |
||
Total liabilities, redeemable convertible preferred shares and shareholders’ deficit |
$ |
108,786 |
|
|
$ |
110,989 |
|
Consolidated Statements of Operations for the Three Months Ended
|
|
Three Months Ended
|
||||||
|
|
2024 |
|
|
2023 |
|
||
Revenue |
$ |
30,624 |
|
$ |
5,507 |
|
||
Operating expenses: |
|
|||||||
Cost of revenue, exclusive of depreciation and amortization |
|
28,489 |
|
|
6,650 |
|
||
Technology and development |
|
7,009 |
|
|
812 |
|
||
Sales and marketing |
|
3,009 |
|
|
1,394 |
|
||
General and administrative |
|
24,609 |
|
|
8,441 |
|
||
Depreciation and amortization |
|
1,978 |
|
|
258 |
|
||
Total operating expenses |
|
65,094 |
|
|
17,555 |
|
||
Operating loss |
$ |
(34,470 |
) |
$ |
(12,048 |
) |
||
Other income (expense): |
|
|||||||
Changes in fair value of financial instruments carried at fair value, net |
$ |
(515 |
) |
$ |
(8,096 |
) |
||
Interest expense |
|
(1,671 |
) |
|
(171 |
) |
||
Other expense |
|
(355 |
) |
|
(258 |
) |
||
Total other income (expense), net |
$ |
(2,541 |
) |
$ |
(8,525 |
) |
||
Loss before income taxes |
|
(37,011 |
) |
|
(20,573 |
) |
||
Income tax benefit |
|
46 |
|
|
— |
|
||
Net loss |
$ |
(36,965 |
) |
$ |
(20,573 |
) |
||
Net loss per share applicable to common shareholders, basic and diluted |
$ |
(0.48 |
) |
$ |
(1.46 |
) |
||
Weighted-average number of common shares used in net loss per share applicable to common shareholders, basic and diluted |
|
|
77,309,329 |
|
|
|
14,100,926 |
|
Unaudited Pro Forma Financial Measures; Reconciliation of Net Loss to Adjusted EBITDA for the Three Months Ended March 31, 2024 and Pro forma Net Loss to Pro forma Adjusted EBITDA for the Three Months Ended
|
|
Three-Months Ended |
||||
|
|
2024 |
|
2023 (Pro forma) |
||
Net Loss |
(36,965 |
) |
(15,511 |
) |
||
Addback: |
|
|
||||
Depreciation and amortization |
1,978 |
|
1,801 |
|
||
Interest expense |
1,671 |
|
1,055 |
|
||
Income tax expense (benefit) |
|
(46 |
) |
|
(152 |
) |
Stock-based compensation expense |
12,643 |
|
1,145 |
|
||
Changes in fair value of financial instruments |
|
515 |
|
|
- |
|
Transaction costs |
|
588 |
|
|
- |
|
Data license fees |
3,125 |
|
- |
|
||
Adjusted EBITDA |
|
(16,491 |
) |
|
(11,662 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240514442980/en/
Media
Press: press@surfair.com
Investors: investors@surfair.com
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