Blade Air Mobility : Q1 2025 Investor Update Letter

Published: 2025-05-12 07:05:12 ET BLDE

Published on 05/12/2025 at 07:05

We are pleased to report an excellent start to the year with revenue growth of 11% excluding Canada, and a $2.3 million year-over-year improvement in Adjusted EBITDA.

Our strength in the Passenger Segment this quarter was particularly notable with segment revenue growing 42.0% year-over-year, excluding Canada, which we exited in August 2024, and our first Passenger Segment Adjusted EBITDA profitable first quarter since going public. Our strong Passenger Segment results reflect several factors including our durable competitive positioning along with the important actions we've taken recently to improve profitability such as our exit from Canada and broad-based cost rationalization initiatives. I'm particularly encouraged by the results in Europe following our restructuring, which led to strong revenue growth and significantly improved profitability this quarter. Passenger Segment Adjusted EBITDA improved by $2.7 million in the current quarter versus the prior year and, on a trailing twelve month basis, rose to $6.3 million as of Q1 2025, up from $3.6 million in Q4 2024.

We're also happy to deliver Medical results ahead of our guidance this quarter, while we successfully launched service with two new large hospitals on April 1st, as expected, contributing to an all-time record for trip volumes in April. Our Medical business remains well positioned to prosper in the current environment given the strength of our logistics platform, strong underlying transplant volume growth, limited economic sensitivity and insulation from tariffs.

We continue to expect improving results throughout the rest of the year in both business lines. In Medical, we are onboarding additional new hospitals and expect continued growth with existing

hospitals, particularly given the strong industry transplant volume numbers we've been seeing. In Passenger, while the economic outlook may be uncertain, we still expect ongoing year-over-year benefits from cost and restructuring actions, as we will not anniversary our implementation of most items until the fourth quarter of this year. Passenger had a very strong start to the year as we've previously covered, exceeding our internal projections. While we are not changing our guidance for the Passenger Segment, we are very focused on the potential impact of economic uncertainty along with the impact of the recent helicopter tour incident.

I would like to take a moment to address this event. Blade does not offer tourist flights in the United States and this incident highlights the importance of our safety team and related parameters, restrictions, and audits they require of our dedicated operators. Beyond our regular audits, Blade requires our operators to maintain numerous standards that exceed the requirements of the FAA. For example, the minimum number of pilot flight hours for tours can be as little as 150 hours. To fly for Blade, our minimum pilot hours are 800 or 1,000 hours depending on the type of rotorcraft flown. We also have a minimum number of hours pilots must fly in the New York area airspace before flying for Blade. Our full-time five member safety team works with our operators in both our Passenger and Medical businesses every day.

Turning to the macro outlook, though we are mindful that several airlines have highlighted softening travel fundamentals, airlines have also reported continued growth in premium seat sales, which is particularly relevant for Blade's higher end flier base. Given the seasonal nature of the Passenger business, volumes are typically low in April and start to pick up in May so we'll have much greater visibility into underlying demand over the coming weeks and months. Regarding the helicopter tour

incident, past experience leads us to believe that this will have a transitory impact on demand for our New York area services. We have seen a moderate impact from the incident in April, but, as mentioned, this is on a seasonally low Short Distance revenue base and we are already seeing improvement. Lastly in Passenger, it's important to note the actions we've taken to improve profitability across the Passenger Segment. Our restructuring in Europe, our exit from Canada and cost efficiency initiatives remain a key driver of Passenger Segment Adjusted EBITDA results in 2025 as we will not anniversary our implementation of most of these items until the fourth quarter of this year.

Despite any potential short term variability, it's now more clear that our Passenger segment is very well positioned for the transition from helicopters to EVTOL over the mid term due to our scale, strong brand, technology stack and proprietary infrastructure in the key vertical transportation markets. We remain excited about the future for Blade Passenger and believe it serves a growing and economic resilient customer base.

We continue to focus on the disciplined allocation of our shareholder's capital, evaluating additional investments in aircraft and vehicles in the Medical business along with acquisitions in Medical that can strengthen our competitive position or expand our logistics platform. With $120.0 million in cash and short-term investments as of the end of Q1, we believe we are well positioned to capitalize on such opportunities.

Blade Airport - New York City

In Jet and Other, revenue increased 60% year-over-year driven by strength in both flight volume and revenue per flight.

We saw another quarter of significant Passenger segment profitability improvement in Q1 2025 as we achieved the segment's first Adjusted EBITDA profitable first quarter since going public. This was driven by a 840 basis point improvement in Flight Margin along with a 16% reduction in Passenger Segment Adjusted SG&A. The profitability improvement in Passenger was broad based, driven by improvements in Short Distance, the restructuring in Europe, growth in Jet & Other, our exit from Canada and SG&A cost efficiencies.

Turning to our Medical business, revenue was roughly flat year-over-year at $35.9 million. As we discussed on our Q4 2024 earnings call in March, there are several factors impacting air revenue in the first half of 2025. We saw heightened variability in monthly Medical revenue growth trends during Q1 with low single digit year-over-year growth in January followed by a year-over-year decline in February. Medical revenue growth resumed in March and we're happy to report that in April we set an all-time monthly volume record, partially driven by the launch of two new customers on April 1st, as expected. We expect to build on this momentum with additional customer onboarding in the back half of the year.

Blade Europe - French Alps

is a reduction in block hours per trip until we anniversary the increased dedicated fleet size in the second half of 2025, and we saw this impact in Q1 2025. It's important to note that while there is a modest revenue impact from this strategy, there is an improvement in average profitability per trip along with the competitive benefits referenced earlier. Finally, Ground and TOPS revenue continued their strong growth this quarter, compared to the prior year period.

Blade Activation with Le Chéile

Medical segment profitability declined on a year-over-year basis primarily due to elevated scheduled maintenance downtime on our owned fleet during the quarter, as expected and discussed on last quarter's call. Our owned fleet generally provides the best unit economics on both a P&L and cash basis. When we experience above average downtime, there are two primary negative impacts in the period: 1) though we continue to perform all trips for our customers, as contracted, we substitute higher-cost, non-dedicated aircraft from our network; 2) we are unable to amortize the fixed costs of our owned fleet, like pilots, on as many hours, resulting in a higher fully-loaded average cost per flight hour on the owned fleet during the period. As a result, Medical Segment Adjusted EBITDA margin fell 80 basis points year-over-year to 11.4%. The year-over-year increase in Medical Segment Adjusted SG&A is related to our owned fleet, which did not exist in the prior year period. As previously communicated, we expect reduced scheduled maintenance in the second half of 2025 and 2026 to result in reduced capital expenditures and improved Adjusted EBITDA margins.

Disclaimer

Blade Air Mobility Inc. published this content on May 12, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 12, 2025 at 11:04 UTC.