flyExclusive (FLYX) 14 Nov 242024 Q3 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the flyExclusive Third Quarter 2024 Earnings Call.

Our host for today's call is Sloan Bohlen, Investor Relations. [Operator Instructions] I would like to now turn the call over to your host. Mr. Bohlen, you may begin.

Morgan. you, Thank thank Earnings and joining Third flyExclusive's Good Call. you XXXX Conference Quarter afternoon, for

Joining call Garner, on Chief Officer. me the Executive Founder Segrave, Officer; and flyExclusive's and Brad our Financial today Chief is Jim

announced the of ended with September We today, XXXX. the XX-Q filing results market our after closed QX along for XX, Form quarter the

included of Investor will in available GAAP this information about be Important discussion. disclosures comparable filed XX-Q providing We Form on to a our certain the reconciliation with today's information and information non-GAAP is Relations information during SEC non-GAAP and the website. our

addition, and number statements. Actual of our Form XX-Q quarterly In report the described results any the include including annual from factors reports release risk on materially discussion statements. this in covering forward-looking reasons, in and might XX-K might press Form forward-looking our differ on

going to information, into call let rereading over this our Rather remarks. we me And prepared reference than incorporate that, Jim. with are it by the turn to

Thank traditionally thanks to the joining followed preview expectations providing as begin our for you, and update Sloan, I'll it QX, season. on of an of landscape aviation a an private for operations, and to us our by flyExclusive overview busiest by today. relates our everyone

refresh, cover will flyExclusive our success. has I positions Next, immediate ongoing which improvements long-term shown and fleet margin already for greater even

and busy been take very with their recognize agreement to work dedication. it Lastly, to entire a strategic productive I announced This discuss Volato team and the how I has recently for moment our will complements our quarter, hard a vision. flyExclusive want and and

model private be already the the aviation. had At best what I year, of believe we the to in operating start

most I to many reflected over this importantly performance. transformational significant am is in quarters, X we have progress challenges progress rapidly our financial during that However, improving proud faced the first report period.

early over attain we XXXX. the adjusted EBITDA continue we trajectory we in will quarters profit same positive as XXXX X expected, the have first If of

on services and We have our restructuring half our base and fractional support internal consulting outside public management of made optimizing including Volato's taking fleet, eliminating company operations enhancing team, flight nonperforming eliminating over our and to club substantial strides, expanding customers, customer operations. aircraft, reliance over our nearly reporting,

quarter of for revenue large million, which period our the $XX base, third year. well the was in by compared totaled This up membership approximately a Our over same XX% growth expansion XX% part now members. last driven X,XXX boasts to

fleet XXX on has by total As aircraft, selling ago. planes certificate of we number a our year our from XX to continue refreshing the nonperforming declined

still Volato's since around effectively operating their are aircraft are XXX we on managing certificate. we However, fleet currently

of and transferred part Challengers, These CJX and go-forward Volato remain coming will been certificate CJXs in strong XLS months, also adding performers the aircraft will and and be XLSs. we flyExclusive have the The to fleets strategy. continue our

million of certificate, the in and given per activity in revenue increase saw flyExclusive year-to-date. over on XX% and revenue impressive we we by guaranteed hours more accounted half. excluding This Volato of $XX aircraft, aircraft for the program, respectively, which half is aircraft, even total flight achievement the XXXX, XXXX GRP For the and eliminated first that second in hours XX%, X

face continuing our in I and challenge. hours replacing business for our of proud total to am grow flight team incredibly this the of that

Flexjet top growth to sector the X by marks flyExclusive was Year-over-year, recent increase aviation report second the since Jefferies. X% the over growth by according XXXX. just operators achieved highest company XXX% This private hours flyExclusive past trailing in fastest-growing in a a flight XX the remarkable published in the months. among

that fractional we in future. continue demand lines business this strong All by driven our of in been of and has to stable expect and club the

the quarters third of improvement, margins X XX% in in the significant shown to first quarter. increasing approximately Our X% have from over gross XXXX

and We to the been with by in profitable aircraft. removal operating this continue nonperforming and of and costs economical, therefore, expect The aircraft replaced trend driver high margin primary this has improvement downtime XXXX. quarter more of reliable

-- EBITDA for this now, how and debt margin has margin will flow. Brad SG&A, focus But our and ongoing cash impacted fleet trend free this I our on the refresh. detail trend overall will

trade progress term We to reduction in have the from reduced made XX% in third as quarter, by was a SG&A the Total $XX a expenses of notable first revenue of improving $X efficiency. our million. of in quarter revenue XX% third decreased and SG&A debt, long million quarter. percentage over the

expect we As continued we complete in XXXX, early improvements. our refresh fleet

during with Challenger year a XX replacing transition eliminate older to We nonperforming XXXX aircraft, view XXXs. which we aim mainly as them

remaining have of have to by sold year-end. fewer aircraft XX already XX than expect these We and

The and should be drag eliminated been aircraft, XXXX, to $X.X month these peaked million in over complete we EBITDA today million which refresh. at early reduced $X on from per our XXXX per under has month the as in

arrive delivery to set QX. X with Challengers taken of the a Through have quarter, new third in we fourth

We will expect additions accelerate with aircraft XXXX to a of each bringing pace profitability. boost in our Challenger substantial

leverage XXXX, and improvements excited in drive further our to profitability to ahead are Looking we momentum and scale.

positive generate adjusted flow achieve in cash XXXX QX EBITDA and early in positive to expect XXXX. We

at in each projected Each the aircraft average EBITDA XX generate annual of annual million our to XXXX. from the attractive drag nonperforming is Challenger over margins compared $X added million $X fleet to revenue in to

planning to the activity The budgeting. our sales. year transactions, tax end by the for of period calendar is typically and fractional share year-end driven highest Turning

QX sales expect and pipeline and we a of business, in have quarter our We In a XXXX, XX the fractional year first quarter. robust strong sold shares.

customers. grow program of In our agreement members we rest services announced September, and share their early fractional QX. to management our XXX aircraft provide Volato to the and nearly have to expect over we that significantly Today, in

by the was To not to flyExclusive's have managed now their added Jet fractional To opportunity our and and Volato members certificate. All Club strategic clarify, date, being but these to a flyExclusive, Insider customer this of company. aircraft acquisition XXX an are the purchasing acquire added Volato, base without aircraft are program. to we members

agreements Volato shareholders, our signed value The in direct of and adding Customers has first to high approximately platform of becoming $XXX,XXX coupled and line new integration, our clients. with customers the flyExclusive benefited our month operations. have bottom service standards our both

this our Volato's advantages and XX reliability. the Under consisting larger flyExclusive integrated customers Volato's significantly of aircraft fleet, now and fractional leased enjoy of X fleet, enhanced agreement, now manages model aircraft. our service vertically

have seamlessly This staffing their in we to XXX Furthermore, employees flight reduction Volato with fewer infrastructure. needed our XX% efficient required, added thanks an the meet handled the to impressive volume demand. previously represents than

agreement aviation The ability our and in private the high-value for specifically solutions highlights customers, Volato club fractional provide to markets. customized, member

we of Despite model. by strength over significant nonperforming to including public, the flyExclusive after we XX have taking have refreshing months, leadership In fleet replacing company the closing, our month. demonstrated team the I our operating improve and month continued enhancing grow challenges the and think past aircraft, clearly business the

we in has and sustained hard and for success positioned am for benefiting I made our employees. have progress XXXX dedication. team's shareholders, us our in XXXX, customers work The deeply grateful

hand With Officer, over things Brad Chief Financial Garner. to that, our I will

welcome. he public fortunate are as him and Brad public with Hale Partnership Management. We Brad, accounting Most in have Capital equity. at to private both join as company CFO served recently, bringing extensive well as flyExclusive, experience

thrilled to are have We you onboard.

a organization that, achieve. a such honored in a X this I'm you, tremendous just set what relative team. the join confirmed Thank about great CFO increasingly of I months unique first am platform Jim. to leadership with excited industry have excited we role advantages to can competitive and know My and and the

laid by the With a year as to out that highlighting for said, I'll business flyExclusive. context we transition let quarter-over-quarter characterization around start made provide the we've Jim's some me against XXXX. of that begin XXXX plan progress

the We across we footprint results headwinds identified and took began immediate of actions from an both year and public, cost company the fleet. We had in been the overruns oversized our parts with have SG&A concrete bringing durable. and

QX, loss loss quarter reported million first million. in execution declined adjusted our function $XX EBITDA an just $XX we roughly the in reported now EBITDA to to resulted In over And continued quarter. of loss reductions on our this further step In adjusted XXXX, plan our $XX million.

fleet we've to effective initiative costs. made quarter-over-quarter on progress the SG&A improvement This testament of is consistent and a that refresh the management

As driving and adjusted progress XXXX, make cash into flow. on believe we to delivering that importantly, free EBITDA we're head positive positive path we increasingly most continued on

foundation, all achieve in that fleet about model, a refresh and plan the additional we in leverage expect There's especially excited lot is with paired operating to best-in-industry believe onboard complete XXXs. ahead. the the what Challenger From we we XXXX, be quarters to as

MRO the third a in that, largely a our let quarter revenues third results. With increase overview year-over-year. our a of an $XX generated non-GRP revenue increase XX% XX% was flight and reported XX% hours, flyExclusive roughly increase in in of increase a XX% driven million, provide me by from That quarter growth members brief of operation.

was the was from when the a was agreement, bottom of were approximately to announced leverage relatively $XXX,XXX which positive in line the provide our mentioned generated did Jim third what entered But our beginning we the consistent quarter. expectation to our of platform as agreement. Revenue minimal impact we previously, with at able into as Volato it September

growth, constant to access and This has discipline provide committed at remains us quality with our customers. number in service, the level what to Even X. of consistency allows which highest year-over-year unchanged that flyExclusive's remained members is our aircraft, per in

we our fleet. XX time to If that the as many our on you'll over without we've as aircraft important, nearly directly believe service recall, our continue of to And XXX% operate customer sacrificing got just capacity excellence. as we serve per members flights

healthy noted for the were relatively remain rates making and strong. up both and stable the today, have I as utilization was As revenue trends variables Jim demand

expectation and and noise in costs to results our and XXXX in of first quarter into As our fourth is year. I headwinds to our next move for profitability, ease the the quarter

to fleet, the efficient aircraft improve from Challenger are XXXs. we we will expect removed underperforming and in Specifically, gross we as continue the saw quarter margins add third as more

and towards continued SG&A from progress approximately we During quarter, third down a to make in quarter, costs. from X% $XX quarter XXXX. was of XX% the SG&A first million our second quarter decrease reducing

our savings stabilize largely quarters significant do services. we footprint. to expect was while we've we as continued coming closer And some the SG&A degree in thus in cost far our achieved reducing SG&A SG&A by in decrease The XXXX, in appropriately third-party will effort rightsizing that driven to SG&A get

with both cost been and executive actions at are other efforts were XXXX. that of driving when support side-by-side efficiency cost Jim, team Lesmeister and But X, improved our operations our role. senior day Guina from CFO Matt I've on Mike rate members working assumed ensure and to accelerated profitability Many the the in extending underway we across in I an

call some Lastly, commentary to back on the like flow. operator, balance cash our sheet turning I'd the and to before provide

our $XX.X aided trade business plan. our fleet of of completed expansion supported During a Challengers, and preferred third supported quarter, both and million long-term of debt the paydown issuance that we further stock the

quarter aviation, As fourth Jim and period expect program. busy in conjunction to we our sale generate noted earlier, in the inflows private a is fractional with cash particularly substantial

primarily with expect accelerate needs. to in to growth but aircraft, We capital profitable also business' the our this working fleet support capital the utilize

close, to I'm our Mike fractional and customers To for Matt Jim, a alongside our members, investors, part grateful our be employees. owners, our leadership our opportunity of and to the team our and serve

results all our Our third meeting in term for flow cash soon. beyond look XXXX all you I that extend and that underway evident to well forward are and the to plans the durable. very are you profitability is Operator? quarter Thank potential near to and joining, drive momentum ramping

Thank Third Quarter there flyExclusive this no a concludes for XXXX it attending, of you At are and your rest appears time day. Instructions] questions. [Operator Call. have the Earnings wonderful This

you. Thank