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Good day, and welcome to the Eve Holding, Inc. Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Lucio Aldworth, Head of IR. Please go ahead.

Thank you. Operator. Good morning everyone. This is Lucio Aldworth, the Director of Investor Relations at Eve. And I wanted to welcome everyone to our fourth quarter 2024 earnings conference call. Our CEO, Johann Bordais; and CFO, Eduardo Couto are joining me on the call today, and after their prepared remarks, we will open the call for questions, at which point Luiz Valentini, our Chief Technical Officer, will also join us for more technical questions. We have a deck with a few slides and additional pictures that show our achievements in the quarter as well as the testing phase of our full scale prototype. The deck is on our site at ir.eveairmobility.com. So please feel free to download and follow along. Let me first say, that this presentation includes forward-looking statements or statements about events or circumstances that have not yet occurred. These are largely based on our current expectations and projections about future events and financial trends affecting our business and future financial performance. These statements are subject to risks, uncertainties and assumptions including among other things, general economic, political and business conditions both in Brazil and in our market. The words believe, may, will, estimates, continues, anticipates, intends, expects and similar words are intended to identify forward-looking statements. We undertake no obligation to update publicly or revise any forward-looking statements because of new information, future events or other factors. With that, the future events and circumstances discussed in this presentation may not occur and actual results could differ substantially from those anticipated in our forward-looking statements. With that, I will now turn the presentation over to our CEO, Johann.

Thanks, Lucio. Good morning to all and thank you for joining the call today. We had a very eventful year 2024. We continue a steady progress in the development of our eVTOL and have reached important milestones. I would like to highlight today a few of those most important achievements that we had last year. The first one, early in the year, we presented Vector, our air traffic management solution, and we ran the five-day simulation in Sao Paulo with a very positive feedback from our partner and customer Revo. This exercise followed simulation we already had made in Rio de Janeiro and London to help us validate and fine-tune the software for the customers to eventually allow increased air traffic density and keep higher safety standards for the UAM globally. Last year also late we launched the Eve TechCare, a fully integrated aftermarket service portfolio that will include technical support, maintenance activities, parts and battery solutions, flight operation support, as well as pilot and mechanic training. In partnership with the Embraer CAE Training Services, commonly called ECTS. We did raise $270 million of fresh capital and mix of credit and equity instruments. This allows the company to have a solid liquidity position to continue funding our general expenses, research and development efforts as well as our necessary investment in our first eVTOL manufacturing facility in Taubate, Brazil. Another important milestone was the publishing of the Basis of Certification by ANAC, the Brazilian Civil Aviation Agency, which establishes the standards eVTOL to fly commercially. The Basis of Certification establishes the first set of airworthiness criteria’s for eVTOL in Brazil and follows Eve's application for type certification back in 2022. This is obviously a critical milestone in the project. We are now focused on defining with ANAC the means of compliance. These are specific tests, analyses, and simulation that need to be successfully performed for the type certification to be eventually granted. These tests are performed to prove the aircraft design and that it meets the safety standards laid out in the basis of certification. And lastly, we completed the assembly of our prototype and rolled it out of the hangar for the first time in early July '24, followed by a series of ground tests before its first flight. As a reminder, it is a full scale engineering prototype with no cabin or cockpit. It is made of composite material that will be piloted remotely in the command and control truck. This prototype will be used to validate and improve the accuracy in previous subscale and computer models. It also has an important contribution for the setup of several rigs we are using for different individual components. We have installed the batteries and already performed several tests. We will cover this later on this call and we're now prepping up for the flight campaign. We will initially perform hover flights tied up to the ground and gradually increase the power and height. Then we will move to the partial transition. This is when we engage the pusher without fully disengaging the lifters to continue controlling the aircraft originally and only then we will move to the full transition flight. For the next slide, I think it's a good summary of what I've just been mentioning so far and it shows, how we met all the milestones that we committed last year, thanks to the great dedication of all Eve's, Embraer and our partners employees. At the end of this presentation, Edu will go through the new 2025 ambitious milestones and we're already working hard to meet all of them also. Going to the next slide now I would like to highlight some of the tests that we have performed with our engineering prototype. We announced last year the first step of the pusher, a motor after installation. We published a video with a full test so you can find it and watch it online where our engineering not only tested successfully the dedicated radio link between the command and control truck and the vehicle, but also the proper installation of the inverters and several performance related metrics of the motors including thrust, vibration, sound and energy consumption. In parallel, we're also testing the lifter motors separately in dynamometers to make sure that we deliver the expected performance before its installation. We also concluded and conducted another set of wind tests and wind tunnel tests in the Netherlands to validate the aerodynamic load and noise level for the lifters turned on. We expect to fly our full-scale engineering prototype for the first time by mid-2025. On the certification front, we continue to be highly engaged with certification agencies and we are keeping a good and constant dialogue with ANAC in Brazil to define the certification plan. At the same time, we received a team of specialists from the FAA in our offices in Sao Jose dos Campos in Brazil and we met representative from Japan, JCAB in Tokyo. Now on the next few slides, I mean we will illustrate what I just talked about. You can see images of our pusher test where we have the five blades propeller spinning on the Slide 6. This assured our engineer that all equipment was properly installed and that the radio link with the command and control truck gives our team the instant control of the aircraft with no delay in the signal. On the Slide 7, it shows our team meeting regularly with ANAC and FAA. And lastly, Slide 8 shows a picture of our latest wind tunnel test. This is a representative subscale model, but here you can also see the propellers spinning in the picture. They gave more accurate readings as the aerodynamic forces that will be present on the aircraft during all phases of the flight, including also the important transition between takeoff, landing, and cruising. Moving to Slide 9, our total pre-order backlog stands as approximately 2,800 aircraft for a total value close to $14 billion based on the list price. There are non-binding letters of intent from 28 different customers spread over nine countries and different businesses from the mainline to regional airline helicopter operators, ride sharing platform, and also leasing companies. And because the management support guarantees to proper aircraft operation, we are highly focused on providing the best-in-class services and support to eVTOL operators. Therefore, we have also secured contracts with 14 different customers for our Eve TechCare suite of aftermarket products which could bring up to $1.6 billion in revenues to Eve over the first few years of operation. Importantly, Eve TechCare customers have placed LOI for covering about 1,100 aircraft, which is about 40% of the pre-order book. As you can see, we also have 21 different customers for our air traffic management solution, we call Vector and I believe this reflects the market leading value proposition that we bring to our customers. Beyond that, together with our customers and authorities, we also developing a strong network of partners in different areas such as the infrastructure and energy to address one of the many challenges ahead of the Urban Air Mobility, which is to create a whole new ecosystem besides simply the development of an aircraft. So now I would like to invite our CFO, Edu to go over our financials along with the milestone checklist for 2025.

Thanks, Johann. Now moving to Slide 10, I want to start with our most recent liquidity events. We have been very successful in attracting new capital to Eve to continue to fund our eVTOL development. In total we raised $270 million in 2024 in a mix of debt around $170 million and equity instruments around $100 million. We believe, that this balanced capital structure is an important key to maximize value for our shareholders as we continue to enjoy strong liquidity, now standing at $429 million including funding for our industrialization as well as continue R&D expenses. Our liquidity is equivalent to three times our 2024 cash consumption. It's above our peers and gives us confidence to advance the program to certification. Now moving to Slide 11. Eve is a pre-operational company and our financials reflect mostly the costs associated with our program development. That said, I want to highlight some of our numbers. Eve invested $34 million during the fourth quarter in our program development and $130 million in the full year. The majority was invested in developing our eVTOL and a smaller portion went to service and support solutions and the Urban Air Traffic management software. We are the only eVTOL company with a complete solution that includes design, development, manufacturing, sales of an eVTOL as well as maintenance services and air traffic control. We also deployed $6 million in SG&A during the quarter and $27 million in the year. Including R&D and SG&A, we reported a net loss of $40 million in the quarter and $138 million in the year. Now moving to cash flow. Our operations consumed $40 million in the quarter and a total of $141 million in the year, staying in our guidance range of $130 to $170 million showing Eve's financial discipline as well as our advantages of using Embraer's engineering team. We also had a positive impact of the U.S. dollar appreciation versus the Brazilian real as the majority of our costs are incurred in Brazil. We ended 2024 with $303 million in cash. This is up from the end of 2023, a cash position of $241 and reflects our continuous focus on liquidity. We also continue to draw from the pre-approved credit line with the Brazilian Development Bank helping to preserve our cash. Our total liquidity of $430 million as of the end of 2024 is very comfortable and it's enough to sustain our operations at least for 2025 and 2026. As we look into 2025, we plan to conclude the ground test phases of our engineering prototype and have its first flight and initiate its flight test campaign in the mid of 2025. In parallel, we continue our high level engagement with the Brazilian and U.S. Certification authorities to define our certification plan which includes the definition of all certification tests to be performed during the flight test campaign. At the same time, we will begin the production of our first prototype that will be used in our certification campaign. We expect to use five certification conforming prototypes for our certification. And now, with funding secured, we will start to prepare our site in Brazil for the manufacturing of our eVTOLs. Finally, we expect to consume between $200 and $250 million of cash this year as we continue to accelerate our eVTOL development. With that, we conclude our remarks and I would like to open the call for questions. Operator, please proceed.

[Operator Instructions] The first question comes from Savi Syth from Raymond James. Please go ahead.

Hi, good morning everyone. I curious Edu, if I might start with you just on the kind of the cash burn for this year. Could you provide a little bit more color on [technical difficulty]…

Sorry, Savi, you broke up. Can you repeat, please?

Yes. Could you provide a little color on, the cash burn for this year? Kind of how that progresses with. I'm guessing it's increasing just given the work being done on the production side and kind of the bills that come later in the year. But could you give a little bit of color on kind of the trend there as we kind of go through the year and, and maybe early thoughts into kind of next year, given that you have enough liquidity to kind of last through 2026?

Yes, sure. In 2024, we consume $140 million, right, as I mentioned in the presentation, the majority of the expenses last year were focused on the development, the eVTOL development. This year, it's not going to be too different in terms of the focus remains on the eVTOL development. We're going up to something between 200 to 250, depending on the currency, right. We see how this is going to be, heavily focused on the eVTOL development. We continue to accelerate the eVTOL development. We're going to start to fly the eVTOL, do several flight tests in parallel. We are working on the conforming vehicles to start the official flight test campaign in 2026. So basically it's still more heavily loaded on the R&D on the development of the eVTOL. Of course, this year we may start to invest on the facility, on the production facility. We may spend around $30 million on that. But overall it is still, as I said, more eVTOL development as we are bringing even more engineers from Embraer. Now I think we are around 800 engineers at Embraer, another 200 people at Eve. We have around 1,000 people working in the program. And for the following years, as you mentioned, I believe we may keep this range around 200, 250. So that's the reason, the liquidity we have, the almost $450 million give us enough resources for 2025 and 2026 at least. Okay?

That's super helpful. And just if I might follow up on that production facility is that you're going to use that facility to build a third aircraft. I'm just kind of wondering on just how you think about whether you start kind of building out that facility or not, like the timing around that.

The facility already exists, right? It's an existing site from Embraer that we are leasing. So the investment is really on tooling machines, right? This tooling machine. It starts in one side, then we transfer to this final site more towards the, I would say probably 2026. I would say, there is investments on tooling machining. That's the majority of the 2025 investments. We are also doing IT investments on the site itself. So that's pretty much what we're doing this year.

Very helpful. Thank you.

Thank you. The next question is from Ellen Page with Jefferies. Please go ahead.

Hi guys. Thanks for the question. On the order book, I think you had a couple more customers last quarter than this quarter. Can you talk about how you're thinking about those LOIs converting and the progress you've made in your marketing campaign? I know you're still the most - the largest order book of your peer set.

Thanks, Ellen. Johann speaking. Thank you for the question. As a matter of fact you probably saw that it went from 2,900 to 2,800. The reduction is still not relevant in terms of dollar amount, $14 billion. But it's really fluid. I mean what we've done since we created Eve is to go and visit prospective customers and show them actually more a solution than the actual product, the final product. So they bought in the solution that we're offering, which is not only the vehicle but also the customer support and also vector inventory, which is our air traffic management, which is also and more ground operation, first module for ground operation software, and given that approach that we have, they signed up for, for those LOI and this is why the number has been at the highest level because they trust that we have the capabilities, the know-how and the expertise to ensure not only the vehicle but also the operation afterwards. It is fluid because it takes time. It's obviously tied up also to certification progress. You can understand that if you're going to be buying a vehicle of list price of $5 million, you want to see, make sure that the aircraft also is flying. So we really work together with our customers to first develop the vehicle but also to make sure that they're starting to work on the ecosystem. There are a couple of customers that just - that left the backlog at totally independent from Eve whether they're going bankrupt or it's big decision. It was Wideroe

Great, that makes sense. And can you talk about the differences between the full scale prototype for flight testing - and for certification, relative to the prototype you have today? Are there any significant changes in the form or is just that finalization you've made in the past year?

Yes. Good morning, Allen. This is Luiz Valentini. The differences are most significant in the sense that this is a simplified vehicle that does not have all of the redundancies and the safety level and the refinement that the conforming prototypes need to have in order to show compliance with certification requirements. So the idea was that by doing these simplifications we could advance the development of this engineering prototype, which is a full scale prototype, very representative of what the conforming prototypes will be. But then it's available earlier on in the development program for us to test solution and like Johann mentioned, to advance the modeling - to advance the maturity of the technical aspects of the vehicle. So in a nutshell, really the differences are that it's a simplified vehicle, therefore it's an unmanned vehicle, it's remotely piloted, and so the it's not going to be used to show compliance with certification requirements.

That's helpful. I'll hop back in the queue.

Thank you.

The next question is from the line of Austin Moeller from Canaccord. Please go ahead.

Hi, good morning. So my first question, has ANAC started to establish a framework of how it will harmonize certification with the other non FAA regulators like EASA and CAA? And could you go into detail on that effort?

Sure. Good morning, Austin. So this is something that we work a lot with ANAC. It's very important for us that the certification basis are as similar as possible, if not completely harmonized. And ANAC has been very active in influencing other authorities, both in what they call the CMT, which is a group between ANAC, FAA, EASA, and the Certification in Canada, TCCA, but also doing individual agreements - bilateral agreements with other certification authorities in the world to discuss eVTOL certification requirements. So we are very confident that through this tight connection between the authorities, we will advance to more, I don't want to say harmonized, but at least similar certification basis that do not require significant differences between the vehicles that we will certify at each country.

Okay, and just a follow-up. If we think about 2025 and 2026, how many prototypes do you expect to build with existing capital beyond the prototype you have right now?

So for the certification campaign, we expect to have five prototypes. This is very similar to what Embraer has used in previous development programs and certification programs. It's a mix of prototypes that are used for different purposes. So some of them are more used for, let's say system certification, others more focused on interiors, for example, others more focused on aerodynamic flights. But this number allows us to have not only representation in all of the vehicle characteristics, but also a good pace for the flight test campaign, still being a manageable fleet. So it's a balance of having enough resources to perform the flights and being able to conclude all the flight tests needed, flight and ground tests, but also not having too much investment and too much of a fleet to manage of these test vehicles.

Okay, great. I'll pass it back there. Thank you.

Thank you.

The next question is from Amit Dayal with H.C. Wainwright. Please go ahead.

Thank you. Good morning everyone. The CapEx that you mentioned, $30 million, will that cover the full build or will you need additional investments for that manufacturing facility further down the road as well?

Yes, in terms of CapEx for our manufacturing plant, we're going to spend around $100 million. We already have this money secured. We signed last year, a 16-year, right a long-term facility from the Brazilian Development Bank as we advanced on the works right of the facility. We're going to draw this money, but yes, we're going to spend more than the 30. We're going to spend 100. The majority will be spent, I would say in 2026. But we already have all the money secured from the long term finance.

That's amazing. Thank you. And then just the question on the TechCare offering that was launched, I think sometime last year, are you actively marketing that offering to customers right now? Like what is happening with the launch that has taken place already, for that.

Thanks Amit. Johann speaking. Yes, indeed. The Eve TechCare was launched last year. This is something that we discussed with our customers. This is something that they want from Eve where they face to the customer and I think this is important for them to make sure that we guarantee the availability of the operation but also the optimized operating cost and they understand that, it needs to be done through Eve. This is also the contracts that we have with our suppliers. Basically this is about the spare parts, flight hour program, mechanics training, also the pilot maintenance, the whole complete portfolio that an operator will need to get from the OEM to make sure that we have a good operating experience.

Understood. Last one from me. Are you seeing some evidence of investments being made by potential customers, other partners in the supply chain or the value chain for eVTOLs from the infrastructure point of view? I know you are getting into various stages of testing. Some of the other competitors are also planning to maybe launch initial flights by the end of this year or early next year. So I'm just trying to get a sense of whether you are seeing investments by other players to build the infrastructure and bring these eVTOLs to market.

Yes. Thanks, Amit. Just like you asked about the Eve TechCare here, which is the support from the OEM. Also the other challenge that we have is we're creating a new segment. Obviously, the ecosystem is very important and this is what we need to do. Not only the design, the delivery certification, but or the operation support, but also make sure that we have the ecosystem ready. That means that, first we're going to be using as much as possible the - heliport and the infrastructure, existing infrastructure. But as we go and we want to deliver dozens and hundreds of vehicles per year, we want to make sure that the vertiports and the corridors and everything can just basically ramp up. Right. So we're working with authorities and private companies. We have partners, they're usually the same also partners that the other OEM are using because as you can understand, those investment were quite substantial when they need to be made and we are really pushing to make sure that every infrastructure will be allowing not only the Eve with 100 operation, but also the other eVTOL operation. I think, we're creating this segment and this is why those investment will bring return if operators and infrastructure companies can be - operating more than one eVTOL type.

Understood. That's all I have. Thank you so much.

Thanks, Amit.

Thank you.

The next question is from Marvin Fong from BTIG. Please go ahead.

Good morning. Thanks for taking my questions. Just one, maybe for Edu. Just looking at the $200 to $250 million in cash burned for next year. And if I just kind of look at the moving parts, $100 million in CapEx and assume relatively flat G&A. Seems to imply that R&D may be down next year. I just wanted to make sure I had that right. How should we kind of think about the composition of the cash burn at the OpEx level would be great. That's all I had. Thank you.

Okay, thanks, Marvin. No, no, no. The CapEx for this year is around $30 million. The $100 million that I mentioned is the full CapEx for the facility and the majority will be spent in 2026. For 2025, it's something around $30 million. Of these $200, $250. The majority of the expenses this year are really on the eVTOL development. As I mentioned, we have around 1,000 people engaged in the program between Eve and Embraer. So we're going to be spending $150 million, $160 million on development, right. Mostly engineering works. Then there is the $20 to $30 million on CapEx. And of course we have also a small SG&A around 2030. So that's how we get at the full $200 million, $250 million. The majorities by far are indeed the eVTOL development.

Okay, I misunderstood that. Okay, thanks for clarifying. Thank you.

Thank you. [Operator Instructions] We have no further questions. This concludes our question-and-answer session. I would like to turn the conference back over to Lucio Aldworth for any closing remarks.

Thank you, Dorwin, and thanks everyone who joined the call today. As you can see, we accomplished several important milestones this past quarter. And in 2024, we're fully engaged and moving forward, moving fast. And there's much more [technical difficulty] throughout the next few quarters and look forward to meeting all of you in the upcoming events we're going to attend. And as always, if you have any questions, please don't hesitate to reach out to me or to my team. Thanks and have a good day. Bye.