Good day, and thank you for standing by. Welcome to the Blade Air Mobility Inc. Fiscal Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Mr. Ravi Jani, Vice President of Investor Relations. Please go ahead.

Thanks, and good afternoon. Thank you for standing by, and welcome to the Blade Air Mobility conference call and webcast for the quarter ended September 30, 2022. We appreciate everyone joining us today. Before we get started, I would like to remind you of the company's forward-looking statement and safe harbor language. Statements made in this conference call that are not historical facts, including statements about future time periods may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties, and actual future results may differ materially from those expressed or implied by the forward-looking statements. We refer you to our SEC filings, including our annual report on Form 10-K filed with the SEC for a more detailed discussion of the risk factors that could cause these differences. Any forward-looking statements provided during this conference call are made only as of the date of this call. As stated in our SEC filings, Blade disclaims any intent or obligation to update or revise these forward-looking statements except as required by law. During today's call, we will also discuss non-GAAP financial measures, which we believe may be useful in evaluating our financial performance. Reconciliation of the most directly comparable GAAP financial measures to these non-GAAP financial measures is provided in our earnings press release, which will also be available on our website. These non-GAAP measures should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Hosting today's conference call are Rob Wiesenthal, Founder and Chief Executive Officer of Blade; and Will Heyburn, Chief Financial Officer. I will now turn the call over to Rob Wiesenthal, Rob?

Thank you, Ravi. Good afternoon, everyone. I'd like to thank you for your interest in Blade and welcome you to our earnings call for the third quarter ended September 30, 2022. Our financial performance in the third quarter was once again well ahead of our expectations. Revenue in the September quarter increased 125% to $45.7 million versus $20.3 million in the comparable 2021 period, contributing to another record quarter for both revenue and flight profit and establishing year-to-date revenue of $108 million for just the first 9 months of the year. Importantly, on a pro forma basis, assuming the acquisitions of Trinity Air Medical, Blade Canada and Blade Europe closed for the comparable period last year, our organic revenue growth would have been approximately 60%. This figure demonstrates that our strategy of aggregating the world's best use cases for urban and mobility solely focused on businesses and new regions that are profitable, with existing aircraft technology continues to serve our company and our shareholders well. To that end, we closed our three European acquisitions on September 1, 2022, giving us a leading position in the largest helicopter market on the continent. Adding this formidable presence in Europe to our existing operations in the U.S., Canada and India is a very important step in our expansion and it cements our position as the largest operating urban and mobility company across three continents. We look forward to deploying our brand, technology and the renowned customer service across these geographies to further accelerate our growth and fortify our global presence. In addition to geographic expansion, we have also continued to diversify Blade's business across end markets with nearly half of our $133 million in trailing 12-month revenue now coming from Organ Transportation or what we call like MediMobility. This division delivered another record…

Thank you, Rob. I'll walk through a few highlights from our business lines this quarter. In short distance, revenues were up 52% to $20.4 million in the September 2020 quarter versus $13.4 million in the comparable 2021 period. Growth was driven by higher seat pricing and utilization in the U.S. against the backdrop of continued strong demand throughout Q3, which is seasonally the largest for our U.S. short distance business. We also benefited from a one-month contribution from Blade Europe, which closed on September 1, 2022, our acquisition of Helijet's passenger routes in Vancouver, which closed on December 1, 2021, and growth in our blade airport service, which we launched in June 2021. A few quick highlights from specific short distance products. In the New York Airport business, we saw another quarter of sequential passenger growth and revenue per seat growth in Q3, and this has continued so far in the fourth quarter. As Rob noted, we recently had our best revenue month ever in October. We've achieved revenue per seat growth, both through new dynamic pricing, as well as through the introduction of enhanced cancellation and flexibility options for our flyers. We've seen a great adoption rate for our higher-priced fare classes, which are currently available only on Blade Airport. And given the great response, we plan to roll-out these new options across our short distance portfolio over the coming months. Canada continues to recover more slowly than the U.S. and with approximately breakeven this quarter given low utilization. We see a significant opportunity in Canada, both in terms of the impact of an ultimate recovery, as well as the opportunity to roll-out new products and deploy our technology to improve customer acquisition. Helicopter charter is a particular focus for us in Canada. Our experience in other markets tells…

Thank you, Will. In summary, we are very encouraged by our strong results and operational execution this quarter. While we continue to monitor the broader economic landscape, we are encouraged by the leading indicators that we track regarding travel demand, such as aggregate TSA passenger throughput recently exceeding 2019 levels; and air travel demand amongst large corporate customers only recovering to 75% to 80% of pre-pandemic levels, leaving plenty of additional room for recovery. Additionally, we believe the flexibility the post-COVID era of hybrid work offers has fundamentally increased the demand for air travel, with workers now having the ability to make every weekend a long weekend and make every business trip have a leisure component as well. This positive outlook, combined with our continued share gains in MediMobility, gives us confidence in our ability to deliver significant and profitable growth, irrespective of shifts in the economic environment. With that, I'll turn it over to Ravi for questions.

Thanks, Rob. As a reminder, we will take questions from analysts and investors on this call today. Reporters should send inquiries to me directly. Operator, we're now ready for questions.

[Operator Instructions] And our first question will come from Jason Helfstein of Oppenheimer. Your line is open.

Hi, thanks for taking the question. I'll ask two. Give us a sense in -- obviously, you're not giving formal guidance for next year, and we all have to make our own sense on kind of the economic impact on the business. But how should we think about the drivers of gross margin for next year and kind of like the puts and takes what's in your control, what's not in your control? And then the second question, Will, you guys moved yet out of kind of what used to be kind of the MediMobility-like segment into other. Are you going to restate the historical kind of other line and the new MediMobility historically?

Hi Jason, it's Rob speaking. So why don't I start out about - on guidance, and I'll turn it over to Will more on the margin side. As you know, we don't give guidance. There's obviously a lot of unknowns in the macro environment right now. But what I'll tell you is that all the signals that we track for our various businesses are positive. And as you can imagine, you have quarters where your largest division are up 140% or 175%. Very difficult to give you a precise expectations for full year 2023 at this point. But I am very bullish about the growth prospects and hope to continue to beat our internal expectations and those of our investors. And with respect to how to look at margins, given our business mix, I'm going to let Will take that on.

Yes, I think, Jason, you just have to think about the relative contribution margins of the different businesses. We've talked about how medical is in the 15% to 20% range on the contribution margin front. Where is the short distance business can get up to the 30s. So as you shift mix over to medical, you're going to see the blended margin go down, but what we really care about, right, is growing that slight profit dollars. And that's what we're focused on, and that's what we saw this quarter. And then just to address your question on the old jet. In the 8-K and in the earnings press release from last quarter, we showed you for eight quarters what the old way and the new way would be historically. So hopefully, that gets you what you need. But if it doesn't, we can figure out.

One last thing, Jason. As you know, about half of our business is MediMobility, which is obviously extremely resistant to the macroeconomic environment. And on the passenger side between Blade Europe and certain aspects of our short business, business here, it's clear that our flyer is very resilient and elastic in terms of price. As you know, we exited a fair amount of price increases this year, which were not met with resistance.

Thank you.

Thank you. One moment. And our next question will come from Hillary Cacanando of Deutsche Bank. Your line is open.

Hi, thanks for taking my questions. So just a quick question on pricing. I was wondering if you're getting any pushback from your customers just from the higher pricing across your route network. It doesn't look like it at all, obviously, based on your results from short distance and your -- in October being the highest revenue month for Blade Airport. But just wanted to find out what type of feedback you're getting from your customers since we're seeing -- retailers are out there saying that they're seeing their customers trading down. Obviously, your customers are more affluent. So, the weakness in the economy probably doesn't impact them as much, but just kind of wanted to find that the feedback you're getting?

Sure. Not a problem, Hillary. Obviously, when you think about Blade Europe being in the resort areas that they are in, it was a fair amount of price elasticity there and a very strong consumer. And also, frankly, the strength of the dollar for respect to Americans going over to Europe that helped a lot. And here in the U.S., there's no question that the price increases that we put in on our short distance business, we're well taken, and it really is just a question of the friction, which continues to be high in terms of traffic versus the convenience of flying. What I will say is that, to your point, we really are not -- we do have a high in eye, but we also have a very -- an audience that is very approachable. Our prices start at $195 for airport or $95 of the Air forecast. But what we've done is we've instituted through our technology three types of fare classes that allow you flexibility. So right now, we actually have an average airport flight cost to the consumer of about $245 but you still can buy a seat for $195. So this way, we are getting both the kind of the lower end of the market in terms of amount of money they can spend and also the higher part of the market as well. So our goal for airport is that can be open to everyone. So the pricing power in the lower-end products has really been done through the advent of our technology of multiple fare classes. So hopefully, that helps a bit.

Got it. Got it. Thank you very much. And then I saw that regarding the East Hampton Airport, I thought that a judge block move to close the airport. So is this just the end of the story and everyone could just move on? Or is the town going to now conduct an environmental study and then try again for the open, I know it's only like 6% of the revenue, but still there is a fair amount of customers going to that location.

Sure. So the East Hampton Saga has been going on for 30 years now. As you're probably well aware, it is clearly something we love to talk about, despite it being a very small part of our business. What I'll say is we successfully got a temporary straining order from the judge and the judge then eventually without requesting any type of hearings or meetings, ruled in our favor that the [indiscernible] could not close East Hampton Airport or make any restrictions at that time because they had not done a lot of the environmental work and other things as well. I think what this really does is open up the conversation to the types of changes that we think are in the best interest of all stakeholders, not only the people flying, but the people who live in the neighborhoods that we fly near and the airport itself. But what we did do this past year is we substantially reduced the number of flights that we had East Hampton report both to expand our -- the opportunities for people who live in other areas of Sag Harbor or Montauk, but also to prove that do you intend that if they did in fact put in restrictions, those people are going to still fly. They're just going to fly to other areas. So I think the proof is in the pudding. We're not reliant on the airport. And I think that, because there's some other places to land, you know, for instance, Sag Harbor is about ten minutes away. And Montauk is actually in the town of East Hampton. So I think that -- I'm hoping that the channel will be open to our overtures that come up with compromises, which I think will be great for everyone. It's never over, but we feel good about the East and Long Island in our short business-business and again multiple place to land like we said last year. We said it wasn't going to have a material impact on us and it certainly did not.

Got it. Great. Thank you so much.

[Operator Instructions] Our next question will come from Stephen Ju of Credit Suisse. Your line is open.

Thanks, guys. Hi, Rob. So you've now spent about, I guess, about two months with your new European footprint. So what are some of the things that you learn with those operations now in-house? What's better? What needs for work, where are these areas that you can optimize? And I guess looking a bit more longer term, I guess governments move along at different speeds. So where do you think the EU is in terms of our thinking on EDAs versus here at home of the United States? And Will, can we talk about the seasonality of the business in Europe? I think it's probably more Southern Europe leisure base, but is there any opportunity to have that show up as sort of a more constant gain throughout the course of the year given different potential use cases? Thanks.

Sure. I can't be more pleased with the acquisition. Now this was three in one, three deals we acquired, the retail businesses at Hélicoptère, Azur and Monacair. And I think that what I'm pleased about is the work that we've done to really bring these three companies to the same level of technology that we have here. We have a tremendous data exhaust here at Blade, knowing a lot about our flyers being able to communicate with them, being able to come up with dynamic pricing and things of that nature. And I would say they are probably behind -- they were behind where they were before and they really were operating as individual feedups. So now we can harmonize pricing across these three companies. We have a technology platform that's now been deployed. It is clear that the Blade brand resonates incredibly well in those markets that were from Monaco, Nice, Cannes, Saint Tropez, Courchevel and other places in Italy because it really is a global traveler that tends to use that. And frankly, this is not just a seasonal business. Monaco is a tax haven and has a very strong year round business. The dollar definitely helped us in terms of getting Americans over there and the fact that it was on our Blade app here also helped. We see a lot of opportunity both in terms of pricing. Marketing, I think was a little bit taken for granted. There really wasn't a lot of marketing done there and a lot of packages on the leisure side. So we feel really good about it. And it's a very high end resilient customer who clearly wants to fly. And just again, when you think about the geographies there in terms of an amount of this terrain and traffic. Just like here, we're reducing a lot of friction. And again, the numbers we're seeing right now are very consistent with the internal expectations that we had before we made the acquisition. Will, you want to add?

Yes. And Stephen, just to hit the seasonality, it has some similarities to the U.S. short business and that it's some are weighted, but it is less seasonal. So about -- historically about 70% of the revenues come through in Q2 and Q3 weighted a little bit to Q3. Q4 is the weakest by far. Historically, it's been about 10% of the revenues. But then you do get a nice winter business traveling to ski destinations. So that ends up being close to 20% of the revenues in Europe. And of course, we're hard at work to increase the demand on all fronts here.

Thank you. And I'm showing no further questions. I would now like to turn the call back to Rob Wiesenthal for closing remarks.

Thank you. I just want to thank the team for another great quarter. It is obviously a very complicated environment between where we are in terms of election status right now here in the U.S., inflation, recession fears, the war in the Ukraine but we are happy that we got these acquisitions under our belt and that we're demonstrating a really strong growth trajectory. And again, I'll reiterate the signals that we have thus far this quarter remains strong. And also, as important, we are very, very pleased to have an extremely clean balance sheet versus many of our peers. We have over $200 million of cash and given our capital needs being an asset light company, that's a lot of cash. And that will not only fund our growth organically, but will allow to be opportunistic with acquisitions. And hopefully with this call, you can see -- and the results that we posted, the building blocks that really show a tangible path to profitability, which we're completely focused on. We're looking forward to closing out the year on a strong note and speaking with you again next quarter. So thanks very much for your time and we look forward to speaking with you soon. Thank you, Operator.

Ladies and gentlemen, this concludes today's conference. You may now disconnect.