Eve Holding, Inc. (EVEX) Earnings Call Transcript & Summary

Thank you. Greetings and welcome to the EAP Holdings second quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Lucio Aldworth. Please go ahead.

Thank you, Operator. Good morning, everyone. This is Lucio Waldorf, the Director of Investor Relations at EVE. And I want to welcome everyone to our second quarter of 2026 earnings conference call. Our CEO, Johan Bourdais, and CFO, Eduardo Couto, are joining me on the call today. After their prepared remarks, we're going to open the call for questions, at which point Marcelo Basile, our chief flight prototype engineer, will also join us to address more technical questions. We'll have a deck with a few slides and additional pictures that showcase our achievements in the quarter, including, of course, the more recent stages of the test flight of our full-scale prototype. The deck is available on our site at ir.eaveairmobility.com. Please feel free to download and follow along. And in fact, we just published on our investor relations website a video of our most recent transition flight, and we encourage all investors and analysts to watch it. Let me first mention that today's conference call includes statements about events or circumstances that have not yet occurred. These are primarily based on our current expectations and projections regarding future events and financial trends that will affect our business and future economic performance. These forward-looking statements are based on current expectations and involve risks and uncertainties that could cause financial results to differ substantially from those expressed or implied in this conference call. We undertake no obligation to update publicly or revise any forward-looking statements because of new information, future events, or other factors. For a more detailed list of these risks and uncertainties, please refer to our SEC filings, which are available on our website.

Now I'll turn over to our CEO, Johan Bourdais. Thank you, Lucio. Good morning, everyone, and welcome to our second quarter 2026 conference call. We had a good quarter with several milestones demonstrating steady progress. After the inaugural flight of our engineering prototype last December, we went through a series of hover flights. concluded a planned ground test period of three months of software upgrade, and which led to us to resume our flight campaign towards full transition by the end of this year. These three major phases validate not only our building block concept by extensively testing every part, but also the integration of critical systems such as fly-by-wire and fixed pitch lifter rotors. In parallel, we continue our rigged testing of different components for our commercial aircraft and interact with certification authorities and partners. Lastly, we will go through the new LOI agreements announced at the Farnborough Airshow. Slide 3 details some of the tests we performed between May and July in preparation for transition. As I mentioned previously, we uploaded new software to optimize the synchronization between the lifters and the pusher to sustain lift during all the phase of flight. We also made sure that pusher, avionics, actuators, flight control, and other systems were tested again on the ground, this time with motors powered on and the aircraft on. aircraft anchored on the ground. On slide 4, we wanted to show you some additional details of the vibration test we perform on the ground. Because of wing-borne flights bring to the aircraft different pressure points, vibration, or aerodynamic loads, we attach a shaker device to the lifters to simulate and assess resulting oscillation in the entire aircraft. Slide 5 shows the progress of our accumulated flights. successful completion of our ground test, we cleared the prototype to get back in the air and start transition flights. In total, our prototype flew 66 times and logged 2 hours 46 minutes of airtime. Importantly, the prototype now enters a new phase with partial transition. This is when we gradually accelerate the aircraft by engaging the pusher, but still maintain the lifters powered on for the lift. The pusher was engaged at first with low RPMs and then powered up to around 1200 RPMs, allowing the aircraft to fly forward at 30 knots speed, which is about 35 miles per hour. In the coming weeks, speed will progressively increase to 60 knots and then to 80-90 knots to complete the full transition. At that moment, lifters will be powered off and all lift will come from air passing through the wing, flying like an airplane. This is the aircraft's ultimate mission. Take off vertically, transition to wing-borne flight, and then transition back to vertical flight for landing procedures. Slide 6 shows some pictures and has a link of a video of one of the latest transition flights. The video is also on our website and social media platform. Now, more than quantity, our flight campaign also demonstrates quality. Every flight is digitally planned to test and validate specific aircraft components or flight metrics, and in total, we have validated 150 test points. Precisely these validations that allow us to move ahead with confidence. Moving to slide seven, we can see here part of our physical infrastructure that supports our entire program development with more than 15,000 accumulated hours of testing. We continue testing different components separately in specific rigs to continue optimizing their individual performance and have now we now deploy the second Ironbird dedicated to flight control system integration. As a reminder, our first iron bird is a deconstructed eVTOL in which we integrate all the different actual components of an eVTOL into a physical system to make sure all the systems work properly together. This is part of our testing process that should expedite the testing and the certification efforts, which also reduce the program cost. In parallel, on slide 8, we continue to advance our certification process with Brazilian certification authority ENAC. means of compliance are almost completed with INAC. These are the tests that needs to be successfully performed on different components to certify the aircraft. Interestingly, few suppliers have already started testing some of the components that have means of compliance aligned already with INAC. Separately, ENAC opened a new consultation with either three stakeholders on updated airworthiness certification base, reflecting the requirements alignment with FAA. This is another important step in the E-100 certification process and contributes to the development of a robust regulatory framework for eVTOLs. Following the consultation period, which ends on August 18th, ENAC will review the comments received and assess the potential refinements on the criteria. In addition, ANAC published a proposed noise certification criteria for the EVE-100, which is the result of an extensive engagement between EVE and ANAC drawing on existing aviation noise regulations. Lastly, we applied through ANAC for TAP certification validation by YASA. and it is expected to certify our aircraft for European markets 12 to 15 months after ENAC and FAA. On slide 9, we continue to prepare readiness of necessary infrastructure for safe operation and EV talks. We have partnered with Hitachi, a global technology leaders in electrification, to ensure the VertiPorts can be reliably connected to a power grid and equipped to handle the high-demand, high-frequency operations. This includes enabling sufficient power capacity, managing fast charging cycle, and integrating new demand in existing energy systems. In Florida, we also partnered with Florida Department of Transportation focused on delivering insight in the infrastructure, operational procedures, and airspace navigation procedures needed to enable the safe and efficient integration of UAM into Florida's transportation network. On slide 10, you can see the timeline to certification. As I mentioned previously, we are now in the transition phase. We are around 30 flights away to full transition. Meanwhile, we are conducting a critical design review with our suppliers for each system and component that will be featured in our coming conforming prototype. This will allow us to release drawings and continue manufacturing components within the required specs to produce and test our conforming vehicle in 2021. 2027. Without certification, an entry to service is expected for 2028. You've got considering that we will need to fly our conforming prototype for around 12 months after the first crewed conforming prototype flight planned for the second half of 2027. On slide 11, we had a successful outcome at the Fambaro Airshow. We met with several industry leaders, customers, and partners, and we met several investors at the show. We also announced two new LOIs for a total of 46 aircraft from MOVE for operations in Capo Verde and Cheerwaters of Bayport. Point Capital Company a new lesser-in-hour backlog. This is a good segue into slide 12, which shows a total pre-order backlog of approximately 2,700 aircraft valued at about $13.5 billion at the list price, including the two new LOIs signed this quarter and announced at the Farnborough Air Show. And now, I hand it over to our CFO, Edu, for the second quarter of 2026 Financial Review.

Thanks, Johan. On slide 13, EVE ended second quarter 2026 with $403 million in cash and total liquidity of $531 million, which includes $128 million in non-draw credit facilities. believe the current level of liquidity is enough to support operations through 2028 without new funding. Importantly, we have already started to capture some of the synergies and cost avoidance we had identified and announced in the first quarter. Again, we have worked at extensive with Embraer to find new ways to reduce our cash burn until certification and our initial review indicates we can achieve 100 to 150 million in potential synergies in the next three years supporting our cash runaway. In the The first semester of 2026, total cash burn was $118 million and our total consumption for the year should remain close to the midpoint of our guidance between $225 and $275 million. Now moving to slide 14, just to highlight some of our numbers, research and development in the second quarter 26 was 29 million. This is lower than around 55 million in previous quarters and it reflects better than initially expected agreements with some of our suppliers and development updates. Going forward, we expect R&D levels to return to around 50 million per quarter. SG&A has been mostly stable at 8 million as we continue to capture synergies and control costs on general and administrative expenses. including R&D and SG&A, net loss was 34 million in the second quarter 2026. Finally, as mentioned previously, we ended the quarter with $403 million in cash and $531 million in total liquidity. Cash consumption in the second quarter was $49 million and in the first six months of the year was $118 million. This shows some of the early benefits of synergies with Embraer. and reinforces our confidence that our current financial position is sufficient to fund our operations until 2028. With that, we conclude our remarks and I would like to open the call for questions. Operator, please proceed.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question will come from Savi Sith with Raymond James.

Hey, good morning everyone. Maybe it was really helpful to get some of the forward color on R&D. I was curious if you could share how we should think about CapEx into the second half as well and how much, if any, of the 100-150 million synergies have been realized or are in the.

overrun rate for this year. Yes. Hi, Savi. Good talk to you. So the synergies we're implementing, right, we did a lot of workshops to make sure we are as efficient as possible in terms of cash burn until certification and make sure we keep our cash burn not only this year but until certification in 2027 and 2028 as efficient as possible. identified is 100 to 150 million in synergies for these three years we are already capturing that So, I think that is when we say we are confident to stay in the mid-range of our guidance, it's already capturing part of those synergies. I believe one little. less than one-third of those synergies come this year and the rest comes in 2027 and 2028. Regarding CAPEX, for the manufacturing, that's another area that we have been doing a lot of studies how to be more efficient. We... we are going to be able or we are studying to use the existing Embraer facilities as much as possible so that we can only invest in manufacturing facilities as later as possible. probably this year we're talking about 20 million dollars in capex investments next year this number should go higher something around 50 million and probably another 30, 40 million in 2028. So, you know, overall, we're going to be investing around 100 million. to have, I would say, a modular production capacity, and we can grow this capacity, of course, as demand grows. So that's kind of what we're planning.

That's helpful, colour and grade capacity discipline there. If I might, just on the Flight timing, it looks like maybe full transition flights have flipped a bit into 4Q from 3Q. And kind of thinking when those will be done. Just wondering if that impacts the timing of when you start building certification-conforming aircraft or if those two things aren't really connected.

Yes, Savi, this is Johan. Yes, both are connected, obviously, but the full transition flight is planned by the end of this year, right? We'll see exactly, you know, we've resumed the flight campaign. We're thrilled about it. We just made, as we announced yesterday also, the transition with turning on the pusher. So it should be 30 to 40 flights until we really complete the, you know, the full transition. This is when we'll go to the 90 knots, and then we'll turn off the lifters. So yes, by the end of this year, we'll see how it goes. Obviously we'll have some more information in the next quarter. And then it really triggers also the conforming product of the first one. We'll be debuting the assembly. We already have parts of suppliers that are ready. and then shipping out to us. And then we'll start the assembly, and then the assembly will be finalized next year. And then second half will be the first flight of the conforming prototype.

helpful thank you thank you our next our next question comes from Andres Shepard with Cantor Fitzgerald.

Hey everyone, good morning. Thank you for taking our questions and congratulations on the quarter. Johan, I wanted to start with maybe the transition flight. Congratulations to the team on the beginning of the transition flight campaign, as you mentioned. My question there is just can you remind us, you talked about it a little bit already, but how do you expect this program to ramp up going forward? What do you see as the major validation from the slides? And then can you remind us kind of where we are on the design and build out of the six conforming aircraft, which you'll also be using as part of your flight campaign? Thank you.

Thank you, Andres. Thank you for your question. This is important. Obviously, since the very beginning, we elected to have the lift and cruise configuration, which we understand is better for certification purpose, but also for the aftermarket operation for the operator customers. And this is exactly what we're doing with the engineering prototype, separating. the vertical flight from the horizontal flight is what has led us to have this blood building, what we call it, a methodology that Embraer has been doing for the last 56 years and has been proving efficient. As we go, we test each component, and this is what we've been doing, right, since the last flight and even prior to that. prior to this, the first flight that we had on 19th of December, and then we've been having the first phase, which is the hover phase, and then we had the three months of upgrading and software integrating also with a pusher that we will turn on, we did turn it on, on the ground first, but now in flight. So this is part of the plan, flight comes, And, yes, it's going to take us to the end of the year. So, you know, we like to progress, like I like to say, progress with purpose, right? I mean, we don't want to cut any corners. We know all those tests are important. We've tested more than 150 points of testing, which is very important in our process, and expanding the envelope of flight. And then we're learning as we're doing this. With this, we're transferring this to the conforming prototype as much as possible. And this is exactly what we're doing We're going to be freezing and the design of the aircraft by the end of this year. We call the CDR phase with all the suppliers. The 21 suppliers also will be done by the end of this year. And then, like I said, just assembling. Some of them, by the way, the CDRs are done with the suppliers. Some others are not yet. And then we're going to be doing the and we'll transfer this knowledge to the conforming prototype. We'll have six conforming prototypes built up next year First slide, as I said, it's going to be crewed with a pilot. It's going to be the second half of next year. six prototype to go until the certification for 2028. It takes about 12 months from the first slide. This is a rule of thumb that we have an embryo that has been proven also for certification within ACT.

Excellent. Thank you, Johan. And maybe just as a quick follow-up. So, you know, at the Farm Borough Airshow, you added two LOIs to the backlog. So, I guess the question, how significant are these orders? How are you thinking about converting those to binding orders going forward?.

And what do you see as maybe the main differentiator of the backlog? Thank you. Thanks, Andres. It is important for us, right? I mean, whether it's a new LOI or it's an order conversion, I think it's just important to move on and also prepare the age of the service. And we do sign those contracts when they make sense. It's just not adding up aircraft numbers to the 20. 700 aircraft under LOI and the firm orders, 100 airplanes under the firm orders with REVO and AIREX that we announced early on. But it is to make sense. It's exactly when we have the right mission to fit what the aircraft is meant for. And if you look at MOVE, which is the Cabo Verde aircraft, network and operation, that's exactly what we want, right? It's really to start with the ecotourism going and the whole country is also investing massively in the tourism. And we feel that the eVTOL is definitely needed so they can grow together with the country. And then we also have another one which is important to us is the leasing community with Shearwaters, right, recently purchased by the Bay Pond Capital Company. And it also shows, you know, and adds up to the other leasing company that we have, those different models that's going to be sold. You know, we sell to a leasing company and then they… They lease the aircraft to operators or we sell directly to the operators, very similar to what we see in the aeronautical business, which is a rotary aircraft or the fixed-wing aircraft. So as you can see, it's getting interesting from the leasing community, which I think is super important for us.

Wonderful. Thanks, Johan. Congrats again. We'll pass it on.

Thanks, Andres. And we'll go next to Amit Dayal with H.C. Wainwright.

Thank you, good morning everyone, thank you for taking my questions. With respect to the synergies, Edu, maybe can you elaborate a little bit on what the components of those synergies are? These, you know, mostly from engineering or is there any IP or infrastructure? Like, can you maybe just give us some color on what the different aspects of these cost synergies and where you are going to capitalize on are? Yes.

When we talk about the synergies, we break that in three pockets. One pocket is the EVE structure, where we look at everything that we do at EVE and see things that Embraer already does on the parent level. And we analyze what we have to do at EVE. but and also what could have been done by Embraer right so this is more on the on the administrative side right general expenses and we have been able to find you know things that embrace doing they can do for us so we don't have to have a dedicated team at Eve doing that so This is one type of synergy we do on the EVE structural level, what could be done by Embraer, what needs to be done by EVE. The second thing is the master service agreement with Embraer. Embraer has this big pool of engineers that has been working for us. They do a lot of activities for us. We are the whole time, taking a look on that, how we can be more efficient, what transactions we can pay. Sometimes we can pay things directly to the suppliers of Embraer, so it doesn't need to go through Embraer so that we can save some money so you know a big work on this service agreement with Embraer and the third pocket is industrialization right as I said we want to be as efficient as possible Embraer has a lot of existing assets and a lot of investments that were already done that we don't need to do it again. So we were discussing what is the most efficient way to produce our EVTOL so that we don't need to duplicate. infrastructure investments that Embraer has already done. So those are the three pockets. EV structure, the Embraer service agreement and the industrialization.

I will give two concrete examples of exactly what Edu has mentioned here on those three pillars of synergies. The first one is on the organization, as you mentioned. This is something that we have at EVE, 176 employees, EVERs, that's how we call ourselves, And then we'll also have the MSA with Amber Air that involves about 800 people. So if you think about it, that's 1,000 people, you know, organized. But the way it was organized before, we would have some mirror organization, right, like program, for example. And then we figured, you know, we could get more synergy by having one program on one side, which comes with the responsibility. right, and ownership which belongs to EVE. But on the other part, as Edu did mention, some other team would go to Embraer because of the volume of people that they have, they could get some of the some work with maybe less people and then direct some workforce to other projects within Ambrator. So we've seen those gains. That's the first tangible example. The second one, which I think also is important, is on the certification program. As you remember, last year we did announce that we would put the landing gears and wheels on our on our vehicle well the conforming prototype will have those landing gear and it allows us to move around the prototype in gavin fashoto faster and with that in mind what we could come up with the van brier is use the existing facilities and hangers that they have instead and maybe add up you know a couple of containers in the kind of startup style, let's say, and then it will allow us, we have the FADO and VertiPort and it will avoid some cost avoidance on the building of a brand new hangar that we had original plan. So those are substantial savings that, you know, it's a reflection of a direct synergy with Embraer.

And then going forward, can this continue to add up for you guys? I know the range is 100 to 150 now, but in the future can you potentially find more areas of cost synergies?.