Vertical Aerospace Ltd. (NYSE:EVTL) Q4 2025 Earnings Call Transcript

Vertical Aerospace Ltd. (NYSE:EVTL) Q4 2025 Earnings Call Transcript March 24, 2026

Vertical Aerospace Ltd. misses on earnings expectations. Reported EPS is $-2.70787 EPS, expectations were $-0.42572.

Operator: Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Vertical Aerospace Full Year 2025 Business and Strategy Update Call. [Operator Instructions] I would now like to turn the call over to Samuel Emden, Head of Investor Affairs. Please go ahead.

Samuel Emden: Good morning. I’m delighted to welcome you to Vertical Aerospace’s Full Year Business and Strategy Update Call. Before we get started, I’d like to remind you that during today’s call, we’ll be making forward-looking statements. These statements involve risks and uncertainties that may cause actual results to differ materially. Any forward-looking statements we make are based on assumptions as of today. We undertake no obligation to update these statements as a result of new information or future events. We’ve posted an accompanying slide deck to our Investor Relations website at investor.vertical-aerospace.com, which contains detailed information on forward-looking statements. For a more complete discussion about these risks and uncertainties, we have filed our 2025 annual report with the SEC earlier today. Please now let me hand over to our Chairman, Domhnal Slattery.

Domhnal Slattery: Good morning, and thank you, Samuel, and thank you all for joining us this morning. So over the past several weeks, we’ve had the privilege of hosting a series of Valo showcase events here in the U.K. and London, New York, Miami and most recently in Atlanta. These events brought together our airline partners, our investors, regulators, our suppliers and the broader advanced air mobility ecosystem. And what has stood out most was the energy and the enthusiasm around the opportunity ahead. And before getting in today’s earnings call, we wanted to give you a taste of it. [Presentation]

Domhnal Slattery: So at each step, the message was consistent. The market is ready for safe, quiet, zero emissions urban air mobility. And the response to our aircraft, Valo has just been extraordinary. This is a product that is redefining the eVTOL market globally. Now before we dive into the detailed content of today’s call, let me take a step back just to address some key top-of-mind issues. First, on our flight test progress. I’m delighted that our Chief Engineer, David King, will go into this in further detail later. But to sum it up, we are in the final innings of completing full pilot transition under the regulatory oversight of the CAA. We are close to being complete with the 5 profiles and expect to have this finalized soon.

On capital, as Stuart will speak to later in this call, cash is critical through certification. And despite annual spend being a fraction of our peers, we will need to continue to raise capital. We are exploring all of the options that are available to us right now across the capital markets, strategics and with government support. And we will execute that when it is the right moment for the business. Stuart will take you through the detail of that later. Today, our call will be broken into 4 sections to address some of the key issues and questions we hear from our stakeholders. First, we’ll talk you through the aircraft. We’ll talk you through Valo, the size, the modularity and safety that makes Valo the industry Valo the industry-leading electric eVTOL.

Following that, our Chief Engineer, David King, will walk you through our pilot transition flight test progress, and he will provide a detailed breakdown of where we are today and the remaining elements to be completed. Then our CEO, Stuart Simpson, will do a deep dive on our battery technology. And we believe this technology underpins both Valo and our hybrid aircraft and gives Vertical Aerospace a differentiated power platform. Finally, we will discuss our current financial snapshot and our plans for capital raising. So first, Valo. The excitement around Valo is not just about the promise of the category, it’s about the product itself. Unquestionably, Valo is the highest quality eVTOL aircraft in development globally today. It combines the safety architecture of a modern commercial aircraft with the performance and efficiency required for real-world commercial airline operations.

Our design philosophy has always been clear: build an aircraft that meets the standards of the best airlines in the world today. We have developed Valo together and working in collaboration with our customers for well over 5 years. And that is why it has some key differentiators other eVTOLs in the market simply do not have and cannot have because of their designs. Why Valo has a seat next to the pilot for training, separation between the pilot and the passengers and why we have, without doubt, the roomiest cabin and the largest luggage bay. And critically, the aircraft sizing to accommodate 4, then 5 and then 6 passengers. This is the first truly upgradable aircraft, improving economics for our operators. With our largest cabin and the modular architecture, Valo is without doubt the perfect fit for multiple applications across the emergency, medical services, cargo and beyond.

And we plan to be the leader in the hybrid electric defense space. And we look forward to deepening our discussions already underway with militaries around the world but particularly here in Europe in the run-up to the Farnborough Air Show later this year in July. As we’ve spoken about several times, we are deliberately a pure-play OEM, relying and collaborating on Tier 1 aerospace partnerships who allocate the best talent in the world, the absolute best resources and IP to the development and the certification of our aircraft. And we have now contracted the vast majority of those partners. And we look forward to bringing the final partners on board later this year as we progress towards critical design review this summer. And with that, I’m delighted to hand over to David King, our Chief Engineer.

David?

David King: Good morning, all, and thank you, Domhnal. Let’s talk about flight testing. We’ve been flight testing a full-scale piloted prototype of Valo for 20 months now. In November, we began piloted transition. The phase where the aircraft moves between hovering over a spot as needed for vertical takeoff and landing and wing-borne flight, Valo’s cruise condition. This flight testing is progressing steadily under disciplined U.K. CAA oversight. And here’s a short video to give you a flavor. [Presentation]

David King: We are nearing completion of the transition flight test phase, and the data we are collecting each flight is directly informing certification of our final commercial design. By doing the disciplined engineering and regulatory work upfront in close collaboration with the CAA, we reduced certification risk and avoid redesign later. As Simon Davis, our Chief Test Pilot, explained in the video, we’ve approached full transition incrementally from both ends, validating performance and building an evidence base before moving to the next test point. We’ve accelerated from a hopper, tilting the propellers forward from vertical orientation of 90 degrees. We’ve decelerated from wing-borne flight, tilting the propellers from horizontal.

We are methodically and incrementally closing the gap, studying the wealth of valuable data at each step while working side-by-side with our certification authority. For example, we recently took advantage of a break in the U.K. weather to complete a piloted profile with a conventional runway takeoff, a deceleration from wing-borne cruise condition, a controlled deployment of the stowed rear props, 40 degrees of upward prop tilt while slowing down towards thrustborn and then accelerating back to wingborne and restowing the rear crops before landing. This test demonstrated smooth transitions with optimized software with the propellers deploying and reparking exactly as designed. By working closely with the CAA upfront, we now have a clear, well-defined, tried and tested path to certification.

The standards, the criteria and the means of compliance are published, approved and have been dry run on the prototype program. This upfront work puts us on track to certify Valo to globally portable airliner safety standards. Then after certification comes entry into service. So I want to briefly touch on initiatives to accelerate deployment of an eVTOL operational ecosystem across the globe, including the eVTOL, Integration Pilot Program known as eIPP, recently announced in the United States. We applaud the eIPP program as a means to accelerate the introduction of eVTOL into United States National Airspace. As a non-U.S. eVTOL manufacturer, we were not eligible to participate directly in the United States eIPP program. However, we are participating in similarly focused European initiatives to advance the introduction of eVTOL in Europe.

In the U.K. and in the European Union, flight demonstrations are planned and supported by government-backed programs, including the U.K. government’s Future Flight Challenge and in due course, SESAR in Europe. These are taxpayer-supported initiatives designed to develop infrastructure, air traffic management technologies and operational procedures for optimized eVTOL operations. These programs will also build public and stakeholder confidence through structured and visible demonstrations. In the U.K., we’ve been a long-standing participant in the Future Flight Challenge, a GBP 150 million government-backed program focused on demonstrating operational readiness and accelerating safe integration of eVTOL technologies. Through this program, we’re supporting funded flight demonstrations, including upcoming flights at Skyports Vista VertiPort and related work to demonstrate the feasibility of eVTOL operations between Oxford and Cambridge.

By combining learnings from eIPP in the United States and similar European initiatives, we expect to see accelerated deployment of a safe and effective eVTOL ecosystem across the globe. At Vertical, we are laser-focused on executing to our clear pathway from prototype to preproduction to certification and then to full-scale production. Our final prototype aircraft # 3 has completed its commissioning tests and last week was the first time we had both of our prototype aircraft running at the same time. By the middle of this year, we will complete critical design review for Valo, the gate which freezes design and enables full throttle on building 7 preproduction aircraft to be conformed to type design and used for certification credit. And now I’ll hand the microphone to our CEO, Stuart Simpson.

Stuart Simpson: Thanks, David. It’s great to hear about Valo and our testing progress. We heard Domhnal speak earlier on what makes Valo a differentiated eVTOL aircraft. But let me touch on Vertical’s true secret sauce, which is our battery technology. While our core strategy is to operate as an OEM, utilizing partnerships across Tier 1 aerospace suppliers to minimize certification risk, the battery system is our core in-house technology and a key value driver for the business. We source cells and then manufacture the batteries at our world-class facilities. As cell technology evolves, our battery packs will provide increased payload and range to our customers. Vertical’s proprietary battery system will support both the electric Valo eVTOL and our hybrid aircraft.

The testing we have done to date confirms our current batteries capabilities to deliver power such that at launch, the Valo will be able to provide lift for 1 pilot, 4 passengers and 70 pounds of luggage per person. We are already testing the next generation of batteries that will further improve payload range, ensuring this aircraft will only get better over time. And as announced last week, our battery pilot production line is now operational. In fact, I had the pleasure of undertaking many of the process steps yesterday. In addition, we are expanding our battery manufacturing capability and capacity through the development of a new 30,000 square feet vertical energy center adjacent to our existing facilities. This new facility will open later this year.

And in July, just before the Farnborough Air Show, we will be hosting an Investor Day at the Vertical Energy Center to allow our shareholders, prospective investors and analysts to see the progress we are making. More details to come, and we look forward to seeing many of you there. Here is where the true value proposition comes in, our Battery-as-a-Service business line. We expect batteries to be replaced approximately one time per year over the circa 20-year operational life of the aircraft. What this means is a long-term, predictable, high-margin revenue stream. As we have said before, we anticipate margin for this to be circa 40% Note that our published Flight Path 2030 figures don’t include wide-ranging second life opportunities for our batteries.

Given European aerospace standards, once the battery degrades below a particular level, circa 93%, the battery will be removed from the Valo but will be perfect for other applications. Our lightweight and high-power batteries have multiple second life opportunities, including CTOL aircraft, surface transport, marine and storage. This drives significant additional revenue and margin opportunities for Vertical. We have had multiple inbound requests from third parties wishing to understand our technology and see if and how it is for sale above and beyond us using it in the Valo and our hybrid aircraft. As mentioned in our prior earnings calls, we have shifted from dream to reality. And as David mentioned, laser-focused on execution. As seen in 2025, we completed almost 100% of our stated milestones, the final one being transition, which will be closed out imminently.

We have made a tremendous start to 2026 across product, customers and ecosystem. We kicked off the Valo roadshow in key U.S. hubs, signed a critical supplier partnership with Evolito for the development and supply of EPUs for the Valo and made strides on further integration and partnerships in artificial intelligence. We launched new customer partnerships with the Kingdom of Saudi Arabia, Heli Air Monaco, JetSetGo and launched customer networks in and around London, New York, Miami and Atlanta. Now looking ahead to the balance of 2026. We categorized our operational goals into 3 buckets: aircraft, industrialization and commercialization. I’d just like to draw your attention to a couple of things. First, we’ll be flying at Farnborough Air Show, and we look forward to seeing many of you there.

Second, this year, we will open 2 new manufacturing facilities. Third, we will complete the CDR for Valo, locking in the final 25% of suppliers. And finally, we will begin assembly of the first preproduction Valo. This next slide shows that through fiscal year 2025, our spend was in line with our guidance of $110 million to $125 million. As stated, this is a fraction of what our main competitors spent but our progress, particularly in full-scale piloted and regulated test flight remains industry-leading. Our cash and cash equivalent position was $93 million as at the 31st of December 2025. As of today, our short-term liquidity is estimated at approximately $85 million, comprising cash on hand and anticipated near-term receipts. Our ATM facility, which was put in place in September 2025, has a remaining capacity of approximately $78 million.

Over the next 12 months, we anticipate spending circa $190 million to $200 million as we ramp up our manufacturing footprint and move into the assembly of the first Valo. With that, I’ll hand back to Domhnal for closing remarks.

Domhnal Slattery: Thank you, Stuart, and thank you, David. We would like everyone on this call to walk away with just 3 key messages. First, our approach to flight testing is intentional, it’s disciplined and certification focused. We are deliberately expanding the flight test envelope systematically to extract maximum value to derisk the ultimate Valo certification program. Secondly, we have optionality when it comes to capital raising, and we will execute when it is the right time for the business and our shareholders. And three, as Stuart illuminated, our battery technology is a key differentiator in our business model. With its high power and lightweight, use cases support our eVTOL and hybrid aircraft, along with multiple other applications in adjacent industries that we intend to pursue. So with that, we will hand over to Samuel to open up the line for questions. Thank you, Samuel.

Samuel Emden: Yes, we asked our social media community for some questions. I’m just going to kick off the Q&A with one of them. So the question was, with EU delegation and British government representation at the Valo event in London, is there a credible likelihood of meaningful state financial support from the U.K.

Domhnal Slattery: Stuart, maybe you could take that one, please.

Stuart Simpson: Thank you. It’s a good question. We have had tremendous support from the U.K. government. If you look at it over the prior years, this is up to around $100 million, and it shows the U.K.’s commitment to aerospace. And it’s why we’re based here in the U.K. in the heart of the European aerospace industry. Now the government knows we’ve had approaches from several other European countries as we move from the R&D phase to the industrialization phase of doing a business. We have had incoming requests for us to relocate to several European countries in many U.S. states. However, we remain committed to being anchored in the U.K. and are working closely with government to find a way to make sure that happens.

Samuel Emden: Great. Thank you. And over to you, operator.

Operator: [Operator Instructions] Your first question comes from Edison Yu with Deutsche Bank.

Q&A Session

Xin Yu: First, I just want to check in on your comment you said about the pilot to full transition. You said it’s very, very soon. Are there any regulatory hurdles that you’re waiting for? I know weather has been an issue at times. Perhaps just elaborate on what’s left to do.

David King: Yes. Thanks, Edison. This is David. Thanks so much for the question. The short answer is the S curve. So if you were to — and this is normal for envelope expansion. If you were to plot up test pass on the Y-axis versus time on the X-axis, this type of testing, you typically see a curve that looks like an S-leaning to the right in that it’s the last few tests that have this tail end with this low slope, and that’s where we are right now. So over the last couple of months, we did have a difficult winter, as you said, Records were broke in Bristol. I think there were 22 straight days without any sun and 45 straight days with rain. So we did have some weather difficulties. But with the spring time now, we’re starting to see the forecast starting on Thursday to start to get a little bit better.

So yes, we just have these last few tests to pass. And as we go through it, what we have done, and we tried to highlight this in the messaging is that we are doing these tests side-by side with the certification authority, the U.K. CAA. We are using our approved design organization, our DOA procedures, which are the same procedures we’re going to use for certification to conduct the flight testing. So just to give you an example, as we conduct a test, we take the thousands of data points and then we compare it against our predictions that come from physics-based models. Where we see a slight deviation, we flagged that and we said, hey, we need to understand what that is before we move on. And when we have to go update and tweak our performance predictions in our models, then we go back to our airworthiness data package and update the appropriate sections to ensure that we still comply with the full airworthiness with this modification to the models before we move on to the next point.

So it’s using a certification process on the prototype, which is dry-running it to reduce the risk of certification later.

Xin Yu: Understood. Appreciate the color. Separate topic on the strategic but from my understanding, there’s been discussions going on. Any update on when we could maybe get something? And is the — should we think about the full transition that I just asked about as a precursor for some type of strategic to come in?

Domhnal Slattery: Edison, it’s Domhnal. So the conversations that we are having with strategics are ongoing, and they’ve been ongoing now for a number of months. I’ll refer back to our last earnings call. I think it’s clear that the successful transition is a catalyst to moving to deepening those conversations into something tangible occurring, okay? So the focus right now from the entire organization is to complete that transition successfully and as quickly as possible from where we stand today. And the reality is it’s taken us longer than we anticipated. On our last earnings call, I specifically said it’s weeks, not months. Well, actually, as I was thinking about it this morning, it’s months, not weeks. But we are very, very close at this juncture.

Xin Yu: Understood. And just lastly for me, on the hybrid military side, I know you sort of alluded to some things earlier. Is that something that could happen as we get closer to Farnborough where you maybe announce some efforts or some programs? That’s obviously a very hot topic or hot area given what’s going on in the world. So curious your thoughts there.

Domhnal Slattery: Yes. So maybe I’ll bring in David just to give you some flavor from VERTICON, and we can supplement that. David?

David King: Yes, yes. Thanks. Just to give you the perspective that I heard from the Vertical lift community at the Vertical Aviation International Trade Show in Atlanta 1.5 weeks ago, where people looked at the Valo and the differentiators resonated and one of those was the size of the aircraft and the ability to upgrade it to a hybrid configuration without changing the airframe, essentially just taking the spacious baggage bay and inserting a turbo generator system, and we are demonstrating that on our prototype aircraft #3. So the feedback that I heard was with the size of Valo and the versatility, what we were forecasting for the defense market we’re not forecasting high enough is what I was hearing from the people. And as you mentioned, with the geopolitical situation as it is today, there are different opportunities.

One that was talked about was distributed contested logistics where they said, if you look at the defense opportunities that are coming, they’re based on vertical takeoff and landing in a configuration that can be turned into an autonomous platform quickly. And that’s part of the value proposition of Valo and the Honeywell flight control system is it’s one small step from fully autonomous and then to be able to have the room and the payload and the capacity in the baggage bay for the logistics to be able to turn it into that mission and open up a large set of demand.

Domhnal Slattery: And maybe just to supplement that, Edison, we believe we are the only eVTOL manufacturer in the world that can basically create a hybrid from the current airframe, as David touched on. But from a time frame perspective, we’ll have that aircraft certified in 2029. Our competitors are multiple years behind in that regard. Now in terms of commercializing that and actually generating sales, we’re now dedicating a significant amount of internal resources to defense sales. And I hope during the course of this year, maybe as soon as the Farnborough Air Show, we’ll be able to share some progress in that regard. But unquestionably, we’ve got the best product. We now need to make sure we can sell it.

Operator: Your next question comes from Amit Dayal with H.C. Wainwright.

Amit Dayal: So with respect to the timing for the fully — the piloted transition flight, should we expect timing on that to be sort of mid-2026 or maybe later in the second half of 2026?

Stuart Simpson: Thank you for the question. As David alluded to, we’re really down to the very last little bit of this. Now we don’t want to commit to a timing because, as David said, each time we put the aircraft in the air, we learn a little bit more. But with the weather improving, we actually flew yesterday, which was fantastic. We got some more learnings, nothing hindered us. We have literally a handful of flights to do to accomplish full transition as we sit here today. Now the timing of that very difficult to commit to because, as David said, we have the weather to contend with. We have new learnings. So it’s something we anticipate over the coming weeks, I would say. Hopefully, that gives you a bit of color commentary.

Amit Dayal: No, that’s understandable. Just wanted to see if there was sort of a concrete time line to that but I can take that offline. The other question was the battery efforts, the $190 million to $200 million spend for the next 12 months, does that include your battery needs as well?

Stuart Simpson: Yes, absolutely. The $190 million to $200 million is a rolling 12 months from end of March. It covers everything we need to do to remain on track with FlightPath 2030, delivering our new battery facility and new aircraft manufacturing facility, the conversion of Aircraft 3 into a hybrid and the build of the first Valo. So that financial number I mentioned covers all of the things we said we’d be doing in ’26.

Amit Dayal: Got it. And then just last one, the strategic investor you are sort of quoting and the other financial options that you are sort of looking at, how urgent are these needs given where the balance sheet is? Or are you comfortable at least for the remainder of 2026 to execute according to plan?

Stuart Simpson: We’re pretty comfortable as we sit here today. We’ve got line of sight to circa $150 million, $160 million as we sit here today. We’re in constant discussions amongst a range of options for financing, and we’ll execute as and when the time is right for the company. So we don’t feel under pressure to do it. We’ll do it as and when it’s right for the company and the current shareholders.

Operator: Your next question comes from Louie DiPalma with William Blair.

Louie Dipalma: Stuart, Domhnal, and David congrats on the development of Valo and the demonstrations in London, New York City and Miami. For my first question, I was wondering, following these demonstrations and your test thus far, how do you feel that your Valo aircraft stacks up with peers in the market? Is the main difference between vertical and peers the balance sheet right now?

Domhnal Slattery: Yes. Louie, great to hear from you. So I mean, we fundamentally believe, I mean, fundamentally that we’ve got the best product in terms of the size, shape and scale and its capabilities. We’ve believed that for a very long time. We’ve now shown the physical embodiment of that to our stakeholders, particularly in the United States over the last couple of months. So people have sat in the aircraft. People have seen the quantum of baggage that the aircraft actually takes. They’ve seen the cockpit and the segregation, which provides a very safe environment for the pilot. And so people are now getting really convinced that Valo as designed is the category killer in this space. It is not a minimum viable product that we believe some of our other competitors are developing.

So our balance sheet, we think we’ve got the best product. We also think we’ve got the best supply chain collaboration globally, particularly with some of the major partners we have like Honeywell, Aciturri. But finally, we’ve got the best customer base. And at the end of the day, it’s the customer base determines the success or failure of an aircraft. And if you look at our customers, they’re globally diversified, Tier 1 airlines, many of them, and all of them are fully engaged in the constant development of the aircraft. And today, we’re actually speaking from our battery facility here in the U.K., where I’ve just been brought through some of the unique proprietary battery systems that we’ve developed. We’ve basically collaborated on almost everything else with the aircraft because we think almost everything else is going to get commoditized.

The battery, as Stuart said, is the special sauce. And our team is the best in the world in the development of our battery technology. So it’s no surprise that we’re convinced that we’ve got the best product but all of our stakeholders are telling us that now.

Operator: Your next question comes from Austin Moeller with Canaccord Genuity.

Austin Moeller: So just my first question here. Can you talk a little bit about the R&D and CapEx plans over the next 12 months that fits into the $195 million in cash you expect to burn? Like how many aircraft do you expect to build as part of that?

Stuart Simpson: Austin, thanks for the question. Thanks for the continued support. The $190 million to $200 million is a rolling 12 months from the end of March. As I mentioned earlier, it covers everything we have laid out in FlightPath 2030 and today that we are going to achieve over the coming 12 months. So that is the public flight displays of the current prototype. It is the conversion of one of those into a hybrid. It is the expansion of the battery center where we are today, as Domhnal mentioned, it’s the build of our aircraft manufacturing facility. And really importantly, it is the start of the build of the first Valo. So everything we said we’d be doing over this 12 months, that is funded within that $190 million to $200 million.

Austin Moeller: Okay. And then is there an active program of record or the equivalent in the U.K. Ministry of Defense right now to procure a hybrid eVTOL aircraft? And are there other similar programs in the works with some of the allied NATO militaries?

Stuart Simpson: So we’ve had multiple conversations across many different defense customers and defense partners in Europe and the U.S. There is no official program of record that we’re attached to. However, we’re in deep discussions with the U.K. government about this hybrid product. As David alluded to from his feedback from VERTICON, we are totally unique in this space in that we will be certifying a hybrid product in 2029 in an airframe that is sized and capable and perfectly usable by the military now. We do not have to go and redesign and defer this. So that is generating significant interest across the whole world for our product. We anticipate being able to close out something in that space over the coming months, the rest of this year because we definitively have the best product for the military.

As Domhnal said, it’s been widely recognized now we’ve showcased Valo, and that reads right across into the hybrid space as well. And David also touched importantly on autonomy. We are perfectly placed to jump quickly into autonomy because of our deep strategic partnership with Honeywell. So we are the first choice for military.

Austin Moeller: Okay. And just my last question. Have you narrowed down any of the — on the market or available hybrid powertrains to like 1 or 2 options yet?

Stuart Simpson: We have. Actually, we’ve got a short list. I don’t think we’ve announced who we are going with yet but we’ve had wide-ranging discussions. And interestingly, everyone wants to work with us because they’ve seen we have an airframe that is going to be highly, highly successful. So we have had inbounds for us for people that are absolutely desperate to be our partners on this because we are leading the way in the military and dual use space.

Domhnal Slattery: Yes. And in that regard, Austin, we have European and U.S. alternatives from Tier 1 suppliers who are — have gone from being, I would say, mildly interested in Vertical and our hybrid to being intensely focused because they can see the applicability. And to David’s point, they also can see the absolute scale of the market opportunity, which I believe right now, we are currently underestimating. And we’re going to have to take a good look at the scale of that defense opportunity globally, not just in Europe, but globally to ensure that our internal forecasts are really accurately reflecting the depth of that market opportunity, which is getting literally deeper by the month and quarter, given the scale of the budgets particularly in Europe that the European governments are allocating to defense.

Operator: Your next question comes from Chris Pierce with Needham.

Christopher Pierce: I was hoping to go a little bit deeper on the transition delays. Maybe delays harsh word. But either way, I’d just love to hear sort of if we think about a pie or 100%, however you want to bucket it, like what’s within your control and what’s been that you haven’t been able to control from November until now. And in the U.S., we have like flight aware, we can sort of track and see flights that people are kind of flying, have there been weeks where you haven’t been able to fly and that significantly pushed things out? Or I guess, kind of just let us know sort of what’s — kind of what’s been going on in Cotswold?

Stuart Simpson: Let me just — I’ll give you a little bit of color commentary, then I’ll hand to David. You said were the weeks, we couldn’t fly. I mean there were months, we couldn’t — it rained for 46 days in a row, as David said. We need a permit to fly every time we put the aircraft in the air, and we can’t do it when it’s raining. So there were 46 days in a row we could not fly just to orientate you. It isn’t all in our control. Now David, if you want to give maybe a little bit more technical color.

Domhnal Slattery: Well, certainly around the pie chart, David, I mean, how close are we? I mean, if you were to give a sense in a pie chart basis.

David King: Yes. And so in terms of the number of tests that we have to do, it’s less than 10% in a pie chart. It’s in the tail end of the S-curve. So we’re on that tail end of the S-curve. And as Stuart said, if you were then to create another pie chart that said, okay, what were the sources of not flying when you initially planned to fly, the biggest one was weather. And it was a really rough January and February. But on top of that, we also are doing envelope expansion testing. And as we do envelope expansion testing, each test point brings a database of data that gets compared with our predictions. So the wind conditions, we have a tight tolerance as well because we don’t want to have that noise associated with the atmospheric disturbance.

So in terms of the weather, the clouds, the wind conditions, that was the first one. And then the second one was as we conduct the test, and as we find that we have to make some adjustments to our predictive models to update our database, then we update the database and go through our full design organization procedures to get that new airworthiness document approved side-by-side with the CAA before we go to the next test.

Domhnal Slattery: And maybe, Chris, just to bring that a little bit more to life because the environment that we’re here in Europe is different to the United States. We are testing under a regulatory oversight. In the United States, it’s an experimental — the regulatory oversight effectively means that every time we fly, we have to receive a permit to fly, which means we sit with the CAA, we walk them through the learnings from the previous flight, any observations, any amendments, any changes. And that process is because it’s the safest in the world, it is sequential. And unfortunately, it’s slow. But slow is good because it means it’s intentional and it ensures that we’re flying in the safest manner possible. We all wish this was faster, but we’re very comfortable about where we stand. And to David’s pie chart picture there, we’re into the last 10%.

Christopher Pierce: Can you sort of help us with how slow is slow on those 2 sort of buckets that you just talked about, you fly, you compare the data, you have to tweak versus what you saw versus what you expected and then you need to take that to the CAA and then get approval to fly the next time. Are we talking days, weeks? Like what is the time frame between when you fly and when you’re ready to fly the next time? And what’s in your control and out of your control as far as that goes as well?

Domhnal Slattery: Yes. It depends on the issue. We’ve had some issues that we get resolved in days. We’ve had a couple of issues over the last few months. They’ve taken several weeks actually. The good news in that scenario is we weren’t able to fly anyway because of the weather. That’s just the nature of the regulatory framework that we find ourselves in. It is the nature of 10 to the minus 9. But when we get through it, we will have the safest, commercially safest aircraft in the world. So the pain will be worth the gain.

Stuart Simpson: Chris, just to give a final little comment on that. When we’ve taken learnings and made little tweaks, the joy of this is this aircraft we’re flying now directly reads over to the Valo. So if you look at a top-down view of the Valo and the prototype, the rotors are the same size, the wing is of the same size and shape, the rears are almost exactly the same. So a lot of this stuff where we’ve had a few days delay or weeks delay, for example, this is stuff that we don’t have to revisit because it goes directly into the Valo design. So we may have lost a little bit of time here, but we’ve actually derisked certification. This is one of the key things you’ve got to remember here. This derisks certification. Every single time we go back to CAA, we sit with them, with their experts, with our experts, we agree a way forward, and that is baked in knowledge learning and technical results and technical solutions that will be baked into the Valo.

So it actually accelerates the whole program, which is why [ we are ] extremely confident.

Christopher Pierce: Okay. I appreciate the details. And then just one other one. You guided to a 12-month cash burn of $200 million or $195 million. Is there any reason to think the next 12 months prior to that will be meaningfully different from that? As you ramp, like if I’m looking at Slide 17, you’ve got the 7 certification aircraft you’re going to build. Like as we think about burn going forward before you have entry into service and revenue, how should we think about burn beyond the next 12 months, just…

Stuart Simpson: Yes. We’ve actually put that out, I think FlightPath 2030. We’ve talked about the cash certification. It might be a little bit up on the $200 million, but it’s in that ballpark. That’s the way to think about it.

Operator: Your next question comes from David Zazula with Barclays.

David Zazula: First question is with respect to the selection of Evolito the EPU supplier. How has that been received by CAA and EASA? And I guess, do you perceive any risk with respect to certification with them relative to kind of the prior established Tier 1 supplier you had on the EPU side?

Stuart Simpson: So actually, we didn’t have an established Tier 1 supplier for certification. We’re very proud to have been working with MAGicALL on that. But Evolito, we believe from a certification perspective, they’re already up and running. They already have a DOA in place. They’re working on a POA. They’re highly, highly respected and it’s proven, proven technology. So this is something from a certification perspective and support from regulatory bodies, we’re very positive about. And David, if there’s anything you want to add?

David King: No. I mean it’s a great question. And there are a couple of attributes of Evolito that are really a good fit for Valo. The first is, as Stuart said, is they have excellent certification processes in place, and they’ve really leaned forward on that. And they’re not too far away, right? They’re near Vista. And as we mentioned earlier, that Vista near Oxford is in the Oxford Cambridge Arc, which is one of the prime use cases for eVTOL in the United Kingdom. And so being here in the United Kingdom, it gives us advantage to work together on the U.K. CAA certification, and we have very complementary certification processes in place.

David Zazula: Super helpful. I mean maybe can you frame how do you think they’ll fit into the broader supplier strategy? How you think the supplier coordination is going to go? And I guess, broadly, how the suppliers will support your ability to ramp up production over the next couple of years?

Stuart Simpson: David, thanks. We have been working with most of our supply chain for many, many years. They’re deeply embedded in our process. Our whole Flightpath 2030 and certification date of 2028 has been done hand-in-hand with our supply chain. So they are there, ready, willing, committed. And as David alluded to, our CDR, a critical design review, where we’ll have done the full design envelope of every single component. We’re around 75% to 80% through that. Every single complex, long-term, difficult high-value component we’ve done. So EPUs, batteries, avionics, flight control systems, the airframe is locked in already, and they are there, ready and willing to make a certification aircraft in 2028.

Operator: And there are no further questions at this time. I’ll now turn the call back over to CEO, Stuart Simpson, for closing remarks.

Stuart Simpson: I’d just like to thank everyone for listening into this call and all of the analysts for the questions. Really, really appreciate it. We are on the cusp of great things at Vertical. David and Domhnal said, we genuinely believe we have the industry-defining aircraft. The feedback we’ve had from everyone in this space has been outstanding, way above and beyond what we were expecting. We are going to bring the Valo to life. We will start building it at the end of this year, we’ll be flying early next year. It’s going to be an amazing 12 months. So thank you very much.

Operator: This concludes today’s conference. Thank you for participating. You may now disconnect.