Eve Holding, Inc. Q4 FY2023 Earnings Call

Greetings and welcome to the Eve Holding, Inc., Fourth Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Lucio Aldworth, Director of Investor Relations for Eve Holding. Thank you. You may begin.

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 2023 and full-year earnings conference call. I have here with me our CEO, Johann Bordais; CFO, Eduardo Couto; and our Chief Technology Officer, Luiz Valentini. After their initial remarks, we're going to open the call for questions. We have a deck with a few slides and additional information on our website at ir.eveairmobility.com, so please feel free to download it and tag along. Let me first start this presentation by saying that it 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 our 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 these forward-looking statements and we undertake no obligation to update publicly or revise any forward-looking statement 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 wanted to turn the presentation over to Johann. Johann?

Thank you, Lucio. Good morning all, and thank you for joining us for this call today. We had a very busy 2023 year with several important achievements. Among the milestones last year, I would like to highlight the one that most directly influenced our program. Starting with the selection of our suppliers and the signing of the binding contracts, which define technically all the specifications for each of the components as well as all commercial aspects with volume and unit price, including, by the way, aftermarket support conditions. We defined the architecture of our eVTOL in June of last year with the definition of the flight-critical components like the electric motors, the energy management system, the propellers, especially when it comes to the dimension and requirements for the subsystem of each of these parts. This enabled us to start the building process of our first full-scale non-conforming prototype. As a reminder, I would like to say that we have a unique approach that was developed by Embraer's proven methodology. We test the system and the components independently and only then we incorporate them into the design once we find an optimal configuration. This allows us to be quicker and more efficient in our design and reduce the program development schedule, but also the cost. Up until the initial assembly of the prototype, we already had tested individual systems with the rigs under different conditions and configurations. We also started in September the Joint Definition Phase, what we also call internally the JDP. This is when our engineers interact closely with their counterparts of the suppliers we have selected to go over all the details and how each component will work and interact with each other for a seamless and integrated system. I'm going to give you an example here, I think it's a little bit more concrete. During the JDP, where the team will define the multiple sensors that will feed the airspeed data, temperature, and relative humidity into the avionics and how the flight control system will interpret the data in order to control the flight surfaces after the pilot's commands. This, of course, will be supported by the fly-by-wire system that we are putting in place. As you can see, it is a very complex task that involves several different processes impacting each other with a lot of moving parts and interactions. So the focus here is to design the systems to work seamlessly and safely. Now moving to Slide 3. It shows us the latest development and includes the five-day exercise that we conducted in the UK to test the Urban Air Traffic Management, the ATM software with the partner FlexJet and Halo. It was used to validate and refine the software. We deployed it in parallel with the incumbent software they already have in operation to simulate all typical functions in the Air Traffic Management operation. We successfully ran some tests under normal conditions, but also under different conditions, such as delays and bad weather, and it was a very concrete operation. We could learn from it and, obviously, just make the software better afterwards, so we're quite excited about this. Now moving to the next slide, a couple of slides. We have several pictures that we just took from the test facility in Gaviao Peixoto in Brazil, in Sao Paulo State, where you can see the process of our full-scale prototype. You can see the harness, which are all the electrical and electronic connectors that we will place soon inside the wings and the empennage. These also carry all the information and the communications back and forth between the flight computers, sensors, and actuators. You can also see the early stage of the structure, the fuselage, the wing, and the detail of the vertical stabilizer of the empennage. If you go to the next slide here, it shows that the prototype is getting really close to the final stage. We have positioned the wing and the empennage in the fuselage. We call it internally the junction, but also, even in a nice way, we call it a marriage, just the marriage between the fuselage and the wing. We still have to install the actuators and the control surfaces on the wings and the empennage, along with the composite skin of the eVTOL, which we expect to be concluded in the next few weeks. Once we receive the electric motors, also in the second semester, we’ll perform the necessary ground tests and we plan to start the test flight campaign later this year. Moving on to Slide number 6. Now this is showing you the latest additions to our component suppliers list, which we will start to use for the first of our five conforming prototypes. Since the third quarter 2023, we have announced several suppliers. We have selected FACC to provide the control surface and empennage; Aciturri, a Spanish provider for the wings; Crouzet for the pilot control, which we also call a joystick; we also have signed a deal with Thales for the sensors and Honeywell for guidance and navigation; and lastly, Recaro for the seats. These new suppliers are actually joining the select group of industry leaders of our eVTOL. It's important to highlight here that we have a best-of-breed approach to bring suppliers with their experience in aviation and certification, and importantly, will support us in the certification campaign and throughout the eVTOL lifecycle, not only for certification and delivery but also in the lifecycle process. Lastly, these contracts will have defined the price and quantity schedule with a scale function that will reduce the unit price as we reach higher eVTOL volumes out of our production site, which will reduce the unit price of production, as we call it economies of scale. These latest suppliers join Nidec to supply the electric motors, BAE that we already informed early on in 2023 for energy management and DUC Helices for the propellers. We had also signed with Embraer for the Eve's flight control computer, the FCC and systems, and with these fly-by-wire capabilities. Embraer will also assist us in designing, developing, and manufacturing all flight control hardware systems and providing support for certification. Garmin will supply the fly deck with a high-resolution display of the flight deck and integrate the aircraft management with the flight control system. We also selected Liebherr for the flight control actuators and Intergalactic to provide us the thermal management system for the equipment. We still have a few suppliers to select, but as they're not that critical for aircraft performance, like transparencies or cabin interiors, we expect to conclude the selection process very soon. Looking at the list, which is obviously increasing, we're now up to 90%. I'm very confident in the level of safety, certifiability, and performance of our eVTOL. Moving on to Slide 7, it shows that we are in an entire master development phase. As I mentioned before, we're currently in a joint definition phase to detail all the interfaces to link the different systems and make sure that they integrate altogether. This phase also includes the system of our manufacturing process. As a reminder, we have already selected our manufacturing site a few months ago. The site is currently being used by Embraer, but we will start soon to customize it to our own needs later this year. At the current pace and judging by the progress of the assembly of our prototype, we're in really good shape to receive the Type certification and make the first delivery still in 2026. Moving on to Slide number 8, it shows that currently we believe that we have the largest and most diversified backlog by number of customers, but also by region and diversity in the whole industry today. In total, we have announced LOIs for 2,850 aircraft from 29 different customers spread over 13 countries and different businesses. From the main lines to regional airlines to helicopter operators to ride-sharing platforms to leasing companies, as you can see, it's very complete. We'll also have LOIs to offer our Urban Air Traffic Management system for 14 different customers, and we believe that this reflects the market-leading value proposition that we bring to our customers and our partners. Beyond this, we're developing a strong network of partners in the area, such as infrastructure and energy, to address one of the main challenges that we have in the industry and in air mobility, which is to create the whole new ecosystem beyond the simple development of aircraft. And importantly, and this is really dear to me, we're also securing contracts with 10 different customers for maintenance, repair, overhaul, service, and support. This will bring about up to $660 million in revenues for Eve over the course of the next five years from the first delivery in 2026. Importantly, these customers have placed LOIs, representing 985 aircraft, which is about 35% of our order book. This also means that we can potentially expand this business within this customer base that I didn't mention about the 2,850 aircraft. Because those are agnostic also, that means that we potentially can service the eVTOLs of our competitors, and service revenues could exceed aircraft sales. We believe that our pipeline and services for the vehicle, as well as service and support contracts, offer strong long-term revenue visibility and will help Eve to smooth cash flow consumption in the years to come as we start converting the existing letters of intent into orders and collect the pre-delivery payments known as PDPs. Now I'd like to invite Edu to go over our financials and the next milestones.

Thanks, Johann. Now moving to Slide 9. Eve is a pre-operational company developing its eVTOL and the ecosystem around it. Currently, our financials reflect mostly the costs associated with our program development. With that in mind, I want to highlight some of our 2023 financials. Eve had invested $34 million during the fourth quarter 2023 in our program development and $106 million in the full year. The majority was invested to develop our eVTOL, while a smaller portion went to our service and support solutions and the Urban Air Traffic Management system. We are the only eVTOL company with a complete solution that includes design, development, manufacturing, and sale of an aircraft, as well as maintenance services and air traffic control software. We also deployed $5 million in SG&A during the quarter and $23 million in the year. Including R&D and SG&A, we reported a net loss of $39 million in the quarter, and $127 million in the year. Now moving to cash flow, our operations consumed $25 million in the quarter and a total of $95 million in the year. We ended the fourth quarter with $241 million in cash, down just $15 million from the third quarter 2023. We also drew around $15 million from the preapproved credit line with the Brazilian Development Bank. We still have around $75 million available from this line that we expect to access in 2024. Eve is highly comfortable with its total liquidity of $316 million as of the end of 2023, and we believe our current liquidity would be enough to sustain our operations into the end of 2025. It's important to say that we anticipate an increase in our cash consumption in 2024 as we intensify our development with different rigs to test systems and components, wind tunnel tests to validate our models, and now we're assembling our first full-scale prototype and have selected most of our suppliers, which involves higher payments going forward. Now moving to Slide 10 with a checklist of our previously announced milestones. I'm happy to say that we have either met or exceeded our milestones for 2023. We selected the primary suppliers for critical components of our aircraft and froze the configuration of our eVTOL during the first semester of last year. As Johann showed a few slides ago, we are advanced in the assembly of our first prototype. We have also successfully conducted a trial run of our UATM software under real-life conditions in the UK late last year. Lastly, we invested $95 million in our program during 2023, which is lower than our anticipated guidance of $130 million to $150 million, given three main factors: First, our continuous discipline in cost control as a pre-operational company; second, we managed to extract savings from synergies with Embraer; and third, we moved some supplier payments from 2023 to the following years. The last slide lays out the upcoming milestones for 2024, which include the conclusion of our full-scale prototype and initial tests. In parallel, we expect to conclude the basis of certification and means of compliance with the Brazilian certification authorities. It's important to remind that we have Brazil as our primary certification authority that we work in alignment with the FAA to achieve the dual-type certificate in Brazil and in the US in 2026. We also plan to start working in preparation for our first eVTOL manufacturing plant in an existing site of Embraer in Brazil. We are also working to secure the necessary funding through long-term financing for this site. Finally, for 2024, we expect all our efforts to consume between $130 million and $170 million in cash this year. With that, we conclude our remarks, and I would like to open the call for questions. Operator, please proceed.

Thank you. Our first question comes from Savi Syth with Raymond James. Please go ahead with your question.

Good morning, everyone. I would like to ask about the cash burn outlook. Can you provide some details about the timing throughout the year, whether that is expected to increase, and what portion of that might be CapEx?

Hey. Hi, Savi. How are you? It's Edu here. So basically, this cash consumption will be mostly on the development, right, which includes payments to suppliers as well. There is a component for the manufacturing of our facility. We have selected an existing Embraer facility in Sao Paulo. We're going to start to buy some machinery and tooling for our first site. But I would say maybe around $20 million will go to this first facility; the remaining cash consumption will really be focused on the development, which is moving at full speed.

And that steps up through the year, Edu, or is it fairly steady?

Generally, we burn more in the second half than in the first, but I believe probably it will be like 35% to 40% in the first half and 60% to 65% in the second.

That's helpful. And if I might just mind on the BNDES loan, thoughts on how much of the $75 million you might tap into in 2024? And just to clarify, that's not in the cash burn guidance, right? That should lower the cash burn?

That's correct. When we say that we're going to burn $130 million to $170 million, around $150 million for the full year, that means our cash will only decrease by half of that amount. The other half, $75 million, will be accessed from the BNDES line, which is a significant advantage. We have been utilizing this line since last year. We already withdrew $25 million, which helped maintain our cash position quite well in the fourth quarter, and this will continue in all the upcoming quarters this year. Therefore, our cash will decrease very little, approximately $75 million, if you do the simple math. So, $150 million minus $75 million from BNDES leaves another $75 million coming from our current cash. That's how it should work.

Perfect. Thank you.

Thank you. Our next question comes from the line of Cai von Rumohr with TD Cowen. Please proceed with your question.

Yeah. Thank you so much. Could you maybe update us on the certification environment? What I mean by that is, you probably read that the FAA basically has harmonized with EASA regarding what they're going to require from Joby, which looks like good news. And yet, if you look at some of the major aircraft, G700, everything seems to take longer and longer. So maybe tell us about the environment, particularly with respect to ANAC and the fact that you will be certifying there? Thank you.

Hello, Cai. Johann speaking. Thank you for your question. This is obviously an important topic that we are following closely, and also Valentini will be responding in more detail. But as you remember well, our primary certification will be with ANAC, and this is really with the authority that we are discussing. They very recently, end of last year, opened for public consultation to see exactly. They actually extended that period to the end of this month, and we expect to have a lot of feedback, but also alignment, as we're going to have input, including probably from the FAA and the other airline associations. So we're quite confident that we're going in the right direction and we'll know more by then. Valentini?

Sure. Thank you. Hi, Cai, good to talk to you again. So complementing what Johann said, we feel that we have good traction with ANAC, with the publication of our certification basis for public comment, both in the sense that it gives maturity to the requirements that we have set with them, but also that it allows us to go, as Johann mentioned, in this direction of aligning. We're not saying harmonization in the sense that they would not necessarily be exactly the same, but that it helps us align both with the FAA basis and also with the EASA basis, with which we have more visibility. The publication of Joby's basis yesterday, still not final, but another publication helps us ensure that we are indeed following this alignment path and makes us confident, as we have mentioned before, that with the availability of ANAC to work on this project, we will be able to maintain the timelines as we have established.

Terrific. And then my last one. So talking recently with one of your competitors, they were discussing a potential retail market by which they mean, an individual flies to a regional airport, maybe has their home 40 miles away, but takes their eVTOL from the regional airport to their home and back, or to their business, suggesting there might be a shorter-range bizjet type of application. Have you put any thought into that kind of use or have any of your customers looking at that as a potential market?

Thanks, Cai. Just a question there. When you say their own eVTOL, you mean that they will buy their own eVTOL and fly their own eVTOL, just like you're doing with cars, is that what you're referring to?

Yes, exactly.

No, we don't see this. We do see the air taxi or what we commonly call the first mile, last mile type of service that maybe an airline would offer. And it's exactly the model that we're working on with a public partner for Orlando, where the premium customer will be able to go to their house or very close to their house, where there will be a vertical port, but at the very beginning, we don't see this happening anytime soon unless you have the autonomous functionality. We don't want to be putting people just driving cars and flying eVTOL.

Yeah. Just one more point. I think it's important to understand that, from what the authorities have published so far, that wouldn't change significantly the certification basis in terms of safety level and things like that, Cai. Because it would still be considered, at least if it's around urban mobility areas and urban centers, a flight over densely populated areas, which is being considered by the authorities as one of the triggers to meet higher safety levels. I think it's just important to understand that in terms of certification and consequently the design, I don't see that changing the vehicles so much, which wouldn’t have so much of an effect on the certification path.

Okay, great. Thanks so much.

Thanks, Cai.

Thank you. Our next question comes from the line of Sheila Kahyaoglu with Jefferies. Please proceed with your question.

Hi. Good morning, guys. Just to follow up on one of Savi's questions, you mentioned five additional prototypes this year, with testing to begin in the second half. So just how do we think about the build-out and what’s the CapEx need to support that? Hello, can you hear me?

Yes, Valentini, please start with details about the first prototype and the others to follow, then I will discuss the capital expenditures.

Yes.

Sure. The first prototype, the one we will start testing this year is the one that Johann described as being a non-conforming prototype, which means that it doesn't have exactly the final configuration that the commercial vehicle will have. It will allow us to bring technical knowledge to validate some of the solutions we are currently developing with some anticipation concerning the time when we have to make commitments for the commercial vehicle. The tests of the prototypes of the commercial vehicle will not start until next year, and so for those prototypes, we have a different set of specifications, which connect to the suppliers that Johann described in the presentation. Those will be the ones that will be used for the certification campaign and then to reach the type certificates. The investment in these prototypes will come later on, then I think Edu can mention that.

Yes. Regarding our investment, the $150 million we anticipate for this year encompasses development costs, including engineers and the entire development program, as well as the prototypes. We have already begun assembling this year and will complete assembly and initiate testing of the first prototype. We may also start receiving parts for additional prototypes, all of which are factored into the $150 million guidance. It's important to note that we still have $75 million available from BNDES long-term financing, meaning our actual cash burn will only be half of the $150 million.

Okay, great. Thank you. And then maybe if I could ask about the suppliers that you guys brought on. How is that relationship working with the suppliers?

Well, thanks, Sheila, for the question. Yes, the relationship is great. As you can see, most of them are actually suppliers that we've known from the Embraer time. They are partners of Embraer; some of them are not, but we do have a well-proven methodology to engage. And like I said, the negotiation is not only about the conforming prototype and the production; it's also about customer support and services. These are detailed discussions and negotiations that we do for the entire lifecycle. We automatically engage in a JDP which we started on the last 20th of September, and we engage in all the engineering. So it's a physical presence in San Francisco between the engineering of Eve with Embraer, but also the engineering of the suppliers. We can really and I explained this in my presentation, how one system impacts the other. I think it's really good, and it's been proving quite efficient.

If I may add, Johan, regarding the suppliers, Sheila. Just to reinforce how they believe in our program, we have long-term contracts, right? We're talking about more than 10-year, 15-year contracts with those suppliers. It's not only for the development, but the contracts we sign go throughout the whole series of deliveries. This is one big difference that we have. Also, in terms of payments, we're going to have payments that will happen really down the road. I would say pretty much all suppliers accepted that we spread the payments to them over several years. I think it shows the confidence they have in Eve, in Embraer, and our ability to succeed in this program. The contracts we sign with them fully reflect that, which is different from some other contracts we have seen out there.

Okay. Thank you.

Thank you, Sheila.

Thank you. Our next question comes from the line of Austin Moeller with Canaccord Genuity. Please proceed with your question.

Hi, good morning, Johann and Edu. Just my first question here, do you have any plans right now to thermally condition the battery either using coolant or cooling the charging system itself to enable high volume, high throughput flight activity during the day?

Thanks, Austin. Thank you for the question. This is going deep there, and I'm glad we have our CTO with us so he can really walk you through the answer. Go ahead, Valentini.

Sure. Thank you, Austin, for the question. So, the cooling of the battery, the thermal management in general is a very big part of how the eVTOLs work, right? We are considering that we will need cooling, especially in cases where we're seeking shorter turnaround times on the ground between flights and faster charging. For those cases, we're definitely considering having a cooling system that will allow us to condition the battery before starting to charge it because that makes a big difference in the lifecycle of the battery. It postpones the degradation or slows the degradation of the battery as we charge it and discharge it, which in turn results in a reduction of our operational cost. So we do have both inside the vehicle a cooling system that will enable us to do that. We're also working with the charging infrastructure and the charging equipment to provide that coolant and thermal exchange for us to keep the battery temperature regulated while we charge it.

Great. And then should we expect manned flight testing of the first prototype or would that be on the follow-ons? Should we think about manned flight testing being more of a 2025 action item?

Yes. We will start the testing with an uncrewed vehicle, piloting it remotely from a ground station in the Embraer test facility in Gaviao Peixoto here in Sao Paulo in Brazil. The whole testing of this first prototype that we described will be made without a person on board. So only an uncrewed vehicle. The prototypes that we mentioned that will be used for certification, then those will be piloted. The test campaign with those will have a pilot on board, but this first prototype is only an uncrewed vehicle.

Great. Thanks for all the color.

You're welcome.

Thanks, Austin.

Thank you. Our next question comes from the line of Andres Sheppard with Cantor Fitzgerald. Please proceed with your question.

Hi. Good morning, everyone. Congratulations on the quarter, and thanks for taking our questions. I wanted to touch on your service and support revenue stream. This is obviously an area that you're placing a large emphasis on or at least have mentioned it in the past. I'm curious, what are the kind of developments there, particularly as some of your peers might be targeting entering into service in 2025? So what might we expect from the service and support revenue stream maybe next year and onwards? And what are the latest developments there? Thank you.

Thanks, Andres. Great question. Obviously, it's dear to my heart when it comes to service and support, so I will take this one. As you could see, we're up to $660 million worth of service and support that we pre-sold. It's really linked to the operation, and we need to have the certified aircraft to enter into service so we can really kick in with those services. There's one revenue stream that could happen before, which is with the ATM software that we are developing and it is agnostic. That is part of the same concept where we want to ensure that we have the vehicle, but also the operation very smooth. We believe there is one way to do it, and that's to be with our customers on the ground with boots on the ground, and to ensure they have all the support to operate and guarantee availability. That's the ultimate goal, availability. We will demonstrate the segments, the aircraft operation reliability, and then, obviously, the customer can make money with the vehicle. This is very important. We are really looking at the full spectrum, exactly what has been done. Another heritage we have from Embraer is in engineering and manufacturing, but also service and support. We've learned all those years, and we're going to apply all those lessons learned right away with a full total package, a very much à la carte service. There are operators that have their own MRO, and they want to train their mechanics and perform the maintenance independently, and that's fine. Then, they want to go for a fly-by-hour program, having the engineering support and the spare parts support, including the whole package. I think what differs a little bit from the traditional market of service and support is the battery. This is something we're currently studying; how we're going to manage the support and charging with recycling as we're going to be changing batteries every year, getting to the 80% power remaining. We need to look closely at what we're going to do with this. Right now, we're really focusing on this, while the rest is very traditional, and it depends on the customer's choice. Some might prefer a more executive jet-type of support, a turnkey solution while others are way more independent and will support them the way they want us to offer our services.

Got it. That's super helpful. I appreciate all that context. Maybe one quick follow-up question for Edu. Within your cash consumption guidance of $130 million to $170 million, I'm wondering if we can get a little more color on how much of that you expect will translate into CapEx, particularly as you're building some of these units now? How should we think about CapEx for this year and also what's the best way to think about OpEx for this year as well? Thank you.

The majority of the development includes, as I said, engineers and the prototype may spend around $20 million to $30 million on the prototype. I would say the majority of the cash is really focused on the development of the upcoming vehicles. This is important to mention. Of course, we are focused on the first prototype that's coming, but we are also at full speed on the development of the additional five that will come in 2025 to start the full flight test campaign. A lot of money is being put into the program this year, along with some on the manufacturing facility, our first plant in Brazil, but it shouldn't be that much in 2024. Most of that should be more in 2025, but there will be CapEx on the facility as well. The majority of the investments are still on engineering development for the multiple vehicles we need for the flight test campaign.

Okay. Great. That's helpful. Thank you very much. Congrats again, and I'll pass it on. Thank you.

Thank you, Andres.

Thank you.

Our next question is a follow-up from the line of Savi Syth with Raymond James. Please proceed with your question.

Hi. Just a clarification on the PDPs. Is there a certain milestone? Is it when the first prototype is kind of flying or perhaps next year when you're flying the other five prototypes that you'll be able to kind of go and solidify those LOIs or even what might contribute to kind of first PDP flow?

Thanks. Savi.

Yes, we have multiple campaigns in discussion. We have multiple customers, as you can see by the largest backlog in the industry. The focus is to start to convert those LOIs into firm orders, which also translates into deposits and pre-delivery payments, as you referred to. This is going to start to come this year, next in '26. We're going to receive a lot of down payments and pre-delivery payments. I would say Johann can add, but I think the most important thing is to engage with those customers. Make sure they're comfortable with the number of eVTOLs, these lots, they're going to be taking and where they're going to be deploying them. The cash is going to come with the PDPs, and the deferred orders will start this year and in the upcoming years.

Absolutely, Edu. I think this is really important in what we want to have and convert some of those LOIs into the first purchase agreements. Ensuring our customers are engaged is essential. The whole ecosystem takes time, manpower, and resources, and it's not so much because of the customer, but due to the entire ecosystem. It's not a traditional aircraft you're adding to your fleet; it's really more than this. We have been discussing a lot with the customers on this. We need to get everyone involved and we need engagement from all the stakeholders. This is what the purchase agreement is about, and they're the ones asking for it. It's not like we need to sign those agreements this year from a cash need perspective, but definitely from an engagement standpoint.

Very helpful. Thank you.

Thank you.

Thank you, Savi.

Thank you. Our next question comes from the line of Cai von Rumohr with TD Cowen. Please proceed with your question.

Yes, thanks so much. So of the $660 million in service contracts, how much of that is with your competitors or customers of your competitors?

None, Cai. None. It's all on the eVTOL. What we're offering is agnostic, but it's really all the LOIs based on the current aircraft LOIs.

But given that Joby and Archer indicate they hope to be certified ahead of you. How are you doing in your efforts to sell services either to them or to their ultimate customer, given that you have a long history of service capability and they don't?

Yes, we do have common operators or customers that have been asking, and I'm sure you know it makes sense from an operator's standpoint of view when it comes to customer support and services. You want to have one point of contact. You don't want to multiply your contracts of the same nature. If you go for MRO, you might as well just have one provider for the different vehicles. That's a concept that does exist today where there are independent MRO or when you have agnostic MRO that can offer this type of service. So we're open. We've had a few conversations through United, for instance, where they've been asking us to sit down with other eVTOL OEMs and start discussing how it will look like for services and support. You're right; we have expertise in service and support, so it will be natural for us to take the lead on this, but nothing more concrete at this stage.

Great. Thank you.

Thank you, Cai.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Aldworth for any final comments.

Thank you, Melissa. I want to thank everyone who joined the call today. As you can see, we accomplished several important milestones this past year. We're fully engaged and, of course, there is much more to come. We look forward to updating you on our progress throughout the next few quarters and, of course, to meeting all of you at the upcoming events we're going to attend. As always, if you have any questions, don't hesitate to reach out. Thanks and have a good day.

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