• Adjusted EBITDA: Increased to $4.2 million, more than 5-fold from $0.8 million in the prior year period.
• Operating Cash Flow: Generated $6.4 million in the quarter.
• Free Cash Flow: $3.7 million before aircraft acquisitions.
• Short Distance Revenue: Increased 6.5% year-over-year, or 9.8% excluding discontinued Canadian operations.
• Passenger Segment Adjusted EBITDA Margin: Rose to 14.4% from 7.3% in the prior year period.
• Medical Revenue: Rose 7.8% year-over-year to $36.1 million.
• Medical Flight Margin: Expanded 240 basis points year-over-year to 20.8%.
• Medical Segment Adjusted EBITDA Margin: Increased by 70 basis points year-over-year to 10.7%.
• Cash and Short-term Investments: Ended the quarter with $136 million.
• Revenue Guidance for 2024: Between $240 million and $250 million.
• Medical Segment Adjusted EBITDA Margin Guidance for 2025: Approximately 15%.
• Passenger Revenue Guidance for 2025: Expected to be $85 million to $95 million.

• Warning! GuruFocus has detected 5 Warning Signs with ROIV.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Blade Air Mobility Inc (NASDAQ:BLDE) achieved positive segment adjusted EBITDA in its passenger business a year ahead of schedule, indicating strong financial performance.
• The company reported a 27.3% year-over-year increase in flight profit, with adjusted EBITDA increasing more than fivefold compared to the previous year.
• Blade Air Mobility Inc (NASDAQ:BLDE) generated $6.4 million in operating cash flow and $3.7 million in free cash flow before aircraft acquisitions, showcasing strong cash conversion.
• The company successfully restructured its European operations, expected to generate significant cost savings and improve profitability.
• Blade Air Mobility Inc (NASDAQ:BLDE) formed a strategic alliance with OrganOx to enhance access to liver preservation technology, potentially increasing the utilization of donor organs.

Negative Points

• The company experienced a sequential decline in medical revenue by 5.9% in Q3 2024, attributed to lower organ transplant volumes.
• Medical segment profitability metrics declined sequentially due to timing-related factors, including maintenance downtime and owned fleet expenses.
• Blade Air Mobility Inc (NASDAQ:BLDE) exited the Western Canada market, impacting passenger revenue and reflecting challenges in achieving growth and profitability in that region.
• The company faced industry-wide headwinds in the medical segment, including downtime of aircraft and variability in organ transplant volumes.
• Despite improvements, the passenger segment still faces challenges in achieving target margins, particularly in the New York Airport transfer service.

Q & A Highlights

Q: Can you elaborate on the headwinds faced by the medical segment in Q3 and why you expect these to abate? A: William Heyburn, CFO, explained that the medical segment experienced some volatility due to factors like vacation schedules for surgeons and donor availability. However, Blade continues to gain market share by winning new customers and not losing existing ones. The downtime of aircraft was attributed to unexpected maintenance, but the overall trend shows growth in flight profit per hour and per trip. October saw a rebound in volumes and fleet performance, indicating a return to expected levels.

Q: With the Republican sweep in the election, how do you see this impacting the expansion of the passenger business? A: Robert Wiesenthal, CEO, noted that the new administration is pro-urban air mobility, which could lead to a reprieve on issues like heliport access and fuel regulations. This support is expected to benefit both current helicopter operations and future electric vertical aircraft (eVTOL) operations, leveraging existing infrastructure.

Q: What are your thoughts on the passenger segment guidance for 2025, considering the Canada exit? A: William Heyburn, CFO, stated that the exit from Western Canada was part of a strategy to focus on profitability. The remaining short-distance business is expected to see single-digit revenue growth, with improvements in airport transfer products contributing to profitability.

Q: Can you elaborate on the partnership with OrganOx and its impact on the medical segment? A: Robert Wiesenthal, CEO, explained that the partnership with OrganOx aims to increase the utilization of their metra perfusion devices, which are in high demand. This strategic alliance is expected to enhance market penetration and provide economic benefits to transplant centers by extending liver preservation times and enabling longer-distance transportation.

Q: What is the path for flight margin expansion from here? A: William Heyburn, CFO, highlighted that passenger flight margins will benefit from restructuring in Europe and the exit from Canada. In the medical segment, owning more aircraft will provide fixed-cost leverage as flight hours increase, leading to higher adjusted EBITDA margins over time.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.