Eve Holding Inc Q2 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Unidentified Participant - Raymond James - Analyst : This is Matt filling in for Savi. First, congrats to Stein and Gerry alike in leaving the company thus far in their new roles. And Gerry, I believe this will be your last call, if my calendar is correct. So thank you for all the knowledge along the way, and we have really enjoyed speaking with you. That being said, for my questions, with the aircraft configuration now set, do you have any early thoughts on what the aircraft performance, specifications, and production or operating costs will look like or is that more of the event after you finalize more of the suppliers?

Question: Unidentified Participant - Raymond James - Analyst : Okay, great. That makes sense. And then maybe for Edu or whoever may want to take it. Now with more of the main suppliers selected, are you able to discuss at a high level on how those agreements are set up and when we could expect certain deliverables and payment timing to hit?

Question: Unidentified Participant - Raymond James - Analyst : Okay, that makes sense. So basically, no real non-recurring cost timing or lumpiness that we should really consider more as you progress?

Question: Cai von Rumohr - TD Cowen & Co. - Analyst : Gerry and Stein, great work. So as for suppliers in air transport programs, it is not unusual to have pay-to-play provisions so that the suppliers contribute to the development and that sometimes they get paid after the articles are actually delivered to end customers. I know you are not going to talk about individual agreements. But just philosophically, can you give us a little more color on how those agreements are structured and what they imply in terms of cash contributions from suppliers and cash flows?

Question: Cai von Rumohr - TD Cowen & Co. - Analyst : And I think you mentioned, Stein, you think you have an operating -- cash operating cost advantage versus the competitors. Can you expand on that a little bit why roughly what range of magnitude that might be?

Question: Cai von Rumohr - TD Cowen & Co. - Analyst : Terrific. And one other one. So with Johann joining, you get bring additional support expertise. And I think you are different than your competitors, and you have much more focus on offering support and service. I think your initial IPO plans called in 2030, roughly 45% of revenues would come from service and support. Can you give us any color in terms of -- because you are going to be slower to -- or after your competitors in terms of entry into service, how you intend on building up the support effort? And I assume that's going to be the earliest revenues that you will recognize.

Question: Jonathan Koutras - J.P. Morgan - Analyst : Now that we have primary suppliers named and the test campaign will begin early next year, when should we expect LOIs that compose of a significant backlog be converted into from motors? Is this something we can expect once the prototype is completed, so mid to late next year? Or am I thinking about it wrong?

Question: Sheila Kahyaoglu - Jefferies LLC - Analyst : Congratulations, guys. So I just wanted to talk about suppliers again and just the configuration of the eVTOL. As you point out on slide 3, you've made some finalizations and refinements. Maybe can you point out to us what was the most significant? And then what's left, if anything, on the configuration or this is final?

Question: Sheila Kahyaoglu - Jefferies LLC - Analyst : Got it. And then on the suppliers, were they all competitive wins that you guys put out RFPs for? So a little bit to Cai's question. And do they already have these products on any other eVTOL?

Question: Austin Moeller - Canaccord Genuity - Analyst : So just my first question here. What issues do you think other eVTOL OEMs will have in maintaining their aircraft once delivered to customers relative to Eve, which has access to Embraer's global MRO shops and supply chain?

Question: Austin Moeller - Canaccord Genuity - Analyst : Okay, that's helpful. And do you expect to be able to collect PDPs after the first test flights are complete or closer to ANAC and FAA certification?

Question: Austin Moeller - Canaccord Genuity - Analyst : Great. Thanks for all the details.

Question: Andres Sheppard - Cantor Fitzgerald - Analyst : Congrats to Gerry and Andre. And Andre, it's great seeing you in Paris at the air show. A lot of our questions have been asked, but maybe one qualitative and one quantitative. On the qualitative side, I was just curious to get your thoughts on the recent FAA implementation guide that was published in late July. There's a lot of information there. So just wondering, maybe at a high level, what your preliminary thoughts around that were.

Question: Andres Sheppard - Cantor Fitzgerald - Analyst : Got it. That's very helpful. And maybe just one last quick one. A question for -- maybe for Edu. With the $370 million in total liquidity, which includes the lines of credit, I'm just wondering, you are funded into 2025. You have said before that the certification process is expected to cost between $500 million and $600 million, which obviously you are well underway. I'm just wondering how you are thinking about capital raising opportunities. There's going to have to be a point where once you begin manufacturing and testing and as you go through all these three different certifications, I would expect some sort of capital raise at that point. So I'm just curious how you are thinking about that and anything you could say to that extent. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2023 / 1:00PM, EVEX.N - Q2 2023 Eve Holding Inc Earnings Call

Question: Andres Sheppard - Cantor Fitzgerald - Analyst : Got it. Congrats on the quarter again, and I'll pass it on.

Question: Marvin Fong - BTIG - Analyst : Congratulations and good luck on your next moves, Gerry and Stein. My question just kind of follow-up on what others have been asking about. Now that you have selected several of your suppliers and have visibility on some of the other ones, are you still confident on your earlier estimates on what it would cost to build the eVTOL? And could you comment on like what percentage now of like operating costs you have now secured now that you selected suppliers, like, for instance, I believe propulsion is your largest operating cost and now that you have selected the suppliers for it, it seems like you've locked that in. So maybe just kind of comment on how much of your operating costs you've nailed down, you have actually seen the product and made the orders?

Question: Marvin Fong - BTIG - Analyst : Okay, that's great. That's all I had.