Greetings, and welcome to the flyExclusive Fourth Quarter and Full Year 2024 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Sloan Bohlen, Investor Relations. Thank you, Sloan. You may begin.

Thank you, Matt. Good afternoon, and thank you for joining flyExclusive's Fourth Quarter 2024 Earnings Conference Call. Joining me on the call today is Jim Segrave, flyExclusive's Founder and Chief Executive Officer; and Brad Garner, our Chief Financial Officer. We announced 4Q and year-end financial results after the market closed today, along with the filing of our Form 10-K for the year ended December 31, 2024. We'll be providing certain non-GAAP information during today's discussion. Important disclosures about this information and a reconciliation of the non-GAAP information to comparable GAAP information is included in our Form 10-K filed with the SEC and is available on our Investor Relations website. In addition, this discussion might include forward-looking statements. Actual results might differ materially from any number of -- for any number of reasons, including risk factors described in our annual report on Form 10-K, in our quarterly reports on Form 10-Q and in the press release covering forward-looking statements. Rather than rereading this information, we're going to incorporate it by reference in our prepared remarks. And with that, let me turn the call over to Jim.

Thank you, Sloan, and thank you all for joining us today. It's a great way to kick off 2025 by reflecting on a year that fundamentally reshaped our business. 2024 was a year of bold decisions, hard execution and clear results. We set out with an ambitious plan, and we delivered. When we entered the year, we had just completed our transition to a public company. We were still carrying the weight of 37 nonperforming aircraft that had been a drag on margins and operations. We lacked experience, expertise and leadership in certain areas needed to execute our plan as a public company. SG&A was elevated, driven by the typical growing pains of going public with outside consulting services peaking at over $1.3 million per month. And while our vertically integrated platform was in place, it was not being leveraged. 12 months later, the picture is dramatically different. Let's begin with the fleet refresh because that was the backbone of our strategy. We started 2024 with over 100 aircraft on our certificate, but 37 of those were nonperforming aircraft. That's a polite way of saying most of them were losing money. They had a dispatch availability as low as 30%, which made them costly and inefficient to operate. These aircraft were down for maintenance more than twice the time that they were available to generate revenue, creating more operational friction than value. These nonperforming aircraft represented roughly $30 million in annual EBITDA drag. By the end of the year, we have sold or eliminated 20 of those aircraft. That number continues to improve in early 2025, and we expect fewer than 8 to remain by midyear. At the same time, we began onboarding Challenger 300s and 350 modern, fuel-efficient, high-performance, super-midsized jets. Their dispatch availability has exceeded expectations, delivering better…

Thank you, Jim. I want to echo your gratitude to our incredible team. Their dedication continues to set the pace in our industry for growth, safety, customer experience and service. Although I've only been with flyExclusive for just over 2 quarters, I'm incredibly proud of our collective accomplishments in such a short time. As Jim mentioned, we closed 2024 with strong momentum, reinforcing our confidence in achieving progressive margin expansion and cash flow improvement in 2025. Based on our current trajectory, that confidence has only grown. Let's start with our fourth quarter financial highlights. FlyExclusive reported Q4 revenues of approximately $91 million, as Jim referenced earlier, reflecting a 20% year-over-year increase despite a 17% reduction in fleet size. This growth underscores the strength of our operational execution and strategic initiatives. Both our fractional and Jet Club programs were standout performers, driving strong cash flow in the quarter. As Jim highlighted, at year-end, we had 1,195 Jet Club members, a 26% year-over-year increase with 190 new members added in Q4 alone, a 19% growth over the third quarter. Importantly, we continue to maintain an industry-leading member-to-aircraft ratio of approximately 10.5 members per aircraft, significantly lower than competitors operating at more than triple that level. It is this disciplined approach that ensures superior service quality and operational efficiency to all of our members. Similarly, fractional ownership contributed roughly $9 million in revenue in the fourth quarter of 2024, an increase of 73% quarter-over-quarter and 275% increase year-over-year. This growth highlights a significant shift in our revenue mix to recurring and sticky revenue through our fractional and Jet Club partner programs. Beyond membership growth, our flight activity reached unprecedented levels. We flew just short of 18,000 hours in fourth quarter 2024, a 20% increase over the prior year, demonstrating continued demand for our…

[Operator Instructions] First question is from Marvin Fong from BTIG.

A couple for me. Maybe to kind of start with very much understandable what you said about fractional and there's some uncertainty out there. Just to kind of zero in on that topic, I mean, are there any particular items with respect to like tax policy that you're focusing on, that your potential customers are focusing on? Is it like bonus depreciation or something like that, that we should be kind of looking for? And maybe a second question, just on the macro environment, it looks like flight activity is actually pretty healthy to start the year. Just would love your characterization about how demand is shaping up as well as pricing, how does pricing feel as we stand currently?

Sure, Marvin. Thanks for the question. From a tax standpoint, 100% the bonus depreciation is what is on everyone's mind. Everyone expects that to be in the new tax law that they hope is passed sometime in the next few months. Most everyone believes that the President referenced that in his state of the union speech, and everyone is very much so anticipating that to be put back in place. So that's the tax uncertainty part of what drove a lot of the people to think, hey, let's wait until this year before we make a decision and hoping that, that tax policy comes in place. From a demand standpoint, we still get more requests every day than we can possibly fly. So the issue for us is to deliver dispatch availability, to improve that dispatch availability so we can take more of that demand. We don't have any issues still with the amount of trip requests and quotes that we send out. It's more a function of can we -- do we have enough airplanes to deliver that demand. As you said, the flight hours have held up extremely nicely in the first quarter, and we anticipate that being the same going forward. From a pricing standpoint, we have been able to increase our pricing, certainly on the light and the mid sections of the business to offset some of the additional cost drivers that come in every year from engine programs and parts programs, but we've had some pricing power, which has been fairly nice as well. And I think I got all 3 of them there, didn't I, Marvin?

Yes. No, you did a great job. In your prepared remarks, you're very clear about what we should expect to see in 2025. So very much appreciate those remarks. Maybe just the last one for me. Just -- I think you highlighted you have 5 Challengers now, hoping for 15 by the end of the year. Should we kind of expect that to be kind of spread evenly? I think you mentioned working on a new financing facility. Do you kind of want that in place before you get potentially a little more aggressive with the Challenger acquisition? Just kind of how we should think about the...

I think it will be fairly smooth over the year. There are multiple options, the financing facility that we are -- we expect to put in place next month will be part of that. But I think we're really planning on that to support Q3 initiatives. We have structures in place that will support the acquisition of Challengers over the next few months. And the next multiple airplanes have already been identified and are being evaluated in prepurchase inspections now. So I think the simple answer is I expect a fairly smooth addition throughout the rest of the year.

This concludes the question-and-answer session. I'd like to turn the floor back to Jim Segrave for any closing comments.

That's all I've got for today, guys. Thanks so much for joining the call.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.