Thank you for standing by. My name is Carli and I will be your conference operator today. At this time, I would like to welcome everyone to the Vertical Aerospace Q1 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I would now like to turn the call over to Charlotte. Please go ahead.

Hello, everybody. Good morning. I am Charlotte Cowley, Director of Strategic Finance at Vertical Aerospace, and I'm delighted to welcome you to our Q1 2025 earnings call today. Before we get started, I would like to remind you that during today's call, we will be making forward-looking statements. These statements involve risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Any forward-looking statements we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. We've posted an accompanying slide deck to the Investor Relations section of our website at investors.verticalaerospace.com, which contains information and cautionary warnings on forward-looking statements. For a more complete discussion about these risks and uncertainties, we have also filed a 6-K with the SEC this morning. Now, I would like to hand you over to Stuart.

Good morning, good afternoon, good evening everyone. Thank you for joining us. Welcome to our Q1 call. I'm Stuart Simpson, the CEO of Vertical Aerospace. I'm going to cover three things; firstly, to remind you why we believe we are set to succeed. Secondly, I'll update you on our progress during the quarter. And thirdly, to give you some color around the big announcement provided yesterday, our hybrid program; a hybrid aircraft with a range of 1000 miles. This represents a huge additional market opportunity for us across defense and wider commercial operations; all incremental to our base Flightpath 2030 that has already been communicated. Given it is all about having the right capacity for moving people and things, this hybrid gives us an incredible opportunity because we have the largest dimensions of our tilt rotor pairs, and this puts us in a brilliant position to be able to dominate this space. Then Dr. Limhi Somerville, our Director of Engineering, will discuss our battery and technical details and progress made on the hybrid state. I'll then touch on where we closed the quarter in terms of financials before we open the call for questions. In November, we launched our Flightpath 2030 business strategy, assessing a clear roadmap to lead the eVTOL sector by the end of the decade. We established transparent financial and operating metrics for 2025, 2028, 2030, and beyond, including a credible timetable for certification. As you will hear today, we've already made meaningful progress towards achieving these targets; further strengthening our belief that Vertical is going to be a winner in the sector. We have a best-in-class aircraft in terms of safety, capacity for both people and luggage, and comfort. We are the only eVTOL player positioned to serve the full global market by certifying to the highest aviation standards. We are moving at pace through the certification process with all phases, piloted flight tests on track to be completed in 2025. We have a highly capital efficient approach with a clear path for profitability, spending approximately 75% less than our peers for a superior product, and we have a lean and highly experienced team that has certified over thirty aircraft and propulsion systems. Turning to our progress since the start of the year, it's been a quarter of significant momentum, and I'm pleased to share several key developments as we advance our mission to bring electric flight to customers. Starting with our test program, where we have achieved a number of important technical milestones; building on our completion of thrustborne testing earlier this year. Most notably, we delivered record-breaking piloted high-speed taxi tests with the VX4 demonstrator. These tests validated key systems under real-world conditions and are a major step towards our next piloted wingborne flight, which we anticipate starting in Q2. Completing piloted wingborne will be an incredibly significant moment for us. Not only will this make us one of the top two OEMs in the industry for piloted flight tests, but as a UK-based aerospace business, where unlike other jurisdictions, the burden of safety is shared with the regulator, having joint liability with the company. As such, each phase of testing can only occur with specific approvals from the UK Civil Aviation Authority. As you can imagine, we are working incredibly closely with them to achieve this next step. To this end, we have submitted around 20,000 pages of documentation to the CAA to extend our permit to fly to encompass pilots in wingborne flight. The CAA’s approval of this test will serve as a strong signal of their confidence in the safety, design, and ability of VX4 aircraft to operate in public airspace. We expect to advance to this stage over the next few months. I would like to address one topic that has arisen in recent days. We are aware a claim was made that the UK CAA will be aligning their certification standards to those at the FAA. As you would expect, we have very frequent interaction with the CAA as our home regulator, both at the working level and with most senior levels of its executive management team. Since that claim was made, the CAA’s management have confirmed following to us in writing; the CAA’s position on certification of eVTOL aircraft is set out transparently in its certification of eVTOL aircraft publication available on its website. This document confirms the CAA will use SC-VTOL as the certification basis for eVTOL aircraft in the UK. SC-VTOL includes the safety requirement that these aircraft demonstrate a catastrophic failure rate of 10 to the -9. There has been no change to this published certification standard for eVTOLs. The CAA is working with other authorities, including both the FAA and the ARTA, toward international harmonization of eVTOL certification. Based on this written confirmation, it is clear to us that the UK safety objectives remain unchanged. Any such change would require due process, which includes a public consultation. As we have said for several years, we welcome attempts between global regulators to harmonize certification standards, but we do not believe this should or will be at the expense of passenger safety. We firmly believe that passengers will expect these aircraft to be as safe as commercial airliners, and we know our customers share that view. Safety is non-negotiable. We remain confident that by certifying our aircraft to the highest commercial aircraft safety standards globally, we will be uniquely positioned in the industry with the only offering capable of serving all jurisdictions around the world. This brings me to another important point. These aircraft are being designed to carry passengers and will be certified as such, which is why we maintain it is absolutely critical to conduct a piloted test with one of our experienced test pilots in the cockpit under real-world conditions. All the data we have from previous flight tests, hours of modeling, and numerous simulations give us total confidence in the capability of our aircraft and the success of our upcoming piloted virtual wingborne flight tests. In terms of our operational goals for 2025, we're on track to complete all phases of our piloted flight test program by the end of the year, including transition flight, the final stage of testing, giving us even more confidence in our certification timeline. The team's discipline and execution continue to prove that we have the right approach to certification and development, and that the VX4 is one of the most advanced eVTOL aircraft under development today. And as you know, we do all our development with a pilot on board to ensure that we get not just digital feedback and data, but information from our test pilot, real-world insight from some of the world's most experienced test pilots. This ensures the final aircraft will meet our customer expectations for safety, comfort, and quality. Importantly, as we continue to progress on our priorities, we are on track to double our airborne test fleet capabilities this year. As we complete the assembly of the identical twin prototype aircraft, which has already been moved to our flight test center, Cotswold’s Airport, for finalization of the assembly. This will also unlock further learnings as we install the hybrid powertrain that we referred to earlier in the quarter. Moving on to partnerships; we have made significant progress, both commercially and strategically. Just last week, we finalized the key decision to advance our production plans. Specifically, we formalized and expanded our partnership with Honeywell to deliver flight controls and aircraft management systems for our certification and production aircraft. In addition, we've chosen Honeywell for inceptors to make VX4 easier and safer for pilots to fly. This partnership and the use of Honeywell's leading systems will unlock the efficiencies and speed necessary for Vertical to lead the industry and bring the safest and most scalable product to market. It is a contract of significant value, worth approximately $1 billion over the next 10 years. Honeywell has been and will continue to be a fantastic partner. I'm delighted we've got such a close working relationship over the last six years, and can see this lasting long into the future. We are also supporting the acceleration of the global-wide industry charging infrastructure by adopting the combined charging standard, CCS, with the VX4; the same as BETA and Archer. We believe a unified approach to charging is essential for the industry to be successfully global. It will help ensure seamless integration for OEMs, operators, and infrastructure providers, while reducing costs and accelerating the adoption of electric aviation. Using the CCS fast charging standard will allow Vertical’s VX4 to achieve quick turnaround times, including rapid battery charging and conditioning for shuttle operations. Ultimately, our adoption of CCS will enable immediate interoperability with all CCS chargers of this standard, including BETA’s growing network. Finally, we've announced the addition of three new Directors to our Board building on the steps we talked about earlier in the year with Dómhnal Slattery rejoining as Chair, and Eamonn Brennan joining as a Board Advisor. Three new Directors are Kris Haber, JK Brown, and Carsten Stendevad. With these appointments, we continue to strengthen our governance and strategic leadership with deep complementary experiences, particularly in industrial scale-up, and all three have phenomenal capital markets expertise. Chris, among other roles, has been the COO of Investcorp and Advent International. JK was a Founding Partner at Och-Ziff Capital Management. And Carsten is currently Co-Chief Investment Officer for sustainable investing at Bridgewater Associates and a Board Advisor to GIC. Their combined insights and expertise will be invaluable as we enter our next phase of development. I will hand over to Dr. Limhi Somerville, our Director of Engineering, to provide some detail on our success in battery development; the team he has been leading for the last six years. It is the strength of the innovation and capability within this team that has enabled us to unveil details of our well-advanced hybrid program yesterday. It is tremendously exciting and unlocks new additional multi-billion dollar market opportunities for us. This aircraft will have a range of over 1000 miles, opening up additional use cases, most specifically within defense, cargo, emergency services, and long-range commercial missions; where it is all about moving people and things. As I said before, our airframe is of a greater scale than peers; so we feel we are well placed to dominate in this space or represent upside opportunities to the targets we shared in Flightpath 2030. The hybrid powertrain will be integrated into our next-generation VX4 variant with flight testing planned to start next year. Within Flightpath 2030, it is worth remembering that our battery systems will be replaced more frequently than the airframe itself; one to two times a year depending on how our customers fly and use the aircraft, something akin to the razor-razorblade model. This means into the 2030s, Vertical’s revenues will reach a 50-50 split of aircraft battery with a very healthy gross margin of greater than 40% for the battery. In addition, there are most likely second-life applications such as marine or CTO, for example, which will provide an additional source of revenue for the business, again, not included in the base case Flightplan 2030. I'm incredibly proud to say that Limhi is due to present to the Royal Society of London later this month. The Royal Society is the UK's National Academy of Sciences, and Limhi has been invited to give a presentation to this prestigious institution on Vertical’s battery capability and how Vertical is set to lead the industry. That presentation will highlight the incredible promise of our proprietary battery technology. Over to you, Limhi.

Thanks, Stuart. Hello. My name is Dr. Limhi Somerville. I've been at Vertical Aerospace for six years, and last year became Director of Engineering. I used to lead our powertrain, before that battery teams; which is why I will speak to you today. Some information about me before I start. I previously worked on battery systems at Jaguar Land Rover and at Argonne National Laboratory in Chicago before that. I also spent five years chairing the EUROKAI Electrical Subgroup 1 of Working Group 112, leading on many of the existing certification standards accepted by EASA as part of the SC-VTOL means of compliance for battery and electrical system certification. So what I will share with you today; first, our battery system team capabilities and manufacturing approach are world-class. Second, we have evidence of this, having now achieved significant milestones related to a category enhanced certification. And third, we're open for business, ready to sell our advanced battery systems to the world. Finally, I will touch on the last 18 months of development on our hybrid program and give you insight into our quiet confidence in this area. Let’s fly through it now. One, world-class battery team, systems, capabilities, and manufacturing. Our lithium-ion battery systems are the cornerstone of our aircraft, backed by more than six years of development. Here is what sets our battery apart. The team is comprised of a perfect blend of aerospace, automotive, and control electronics experience. This has not happened by chance; it gives us the right blend of performance, focus, and certification rigor. Energy, power, density, and performance; our battery packs achieve a 4:1 cell-to-pack ratio, delivering more than 200 watt-hours per kilogram depending on cell choice, including electronics, controls, sensors, and wiring. Cycle life and durability; our cells deliver more than 800 full cycle equivalents with approximately 90% capacity retention, ensuring lower maintenance costs and reliable performance over the aircraft’s life. Cost efficiency for the life of the vehicle; our battery systems will be replaced much more frequently than the airframe. This means overtime, battery costs drive a much higher proportion of the long-term high margin revenue. Our battery systems have been designed to allow replacement of the cells with minimal cost, fast charging, and cooling through millions of cell module and full pack cycle hours in proprietary testing rigs; our system can be optimized to charge fast, getting the balance between turnaround time, lifetime, and performance precisely how the customer wants it. Highest certification standards; we have designed our systems from the very beginning to comply with the EASA and the CAA stringent SC-VTOL regulations, which is the highest level of safety in aviation. Software integration; we utilized a proprietary battery management and control system that is designed for the highest assurance level, achieving sensor redundancy, software optimization, and excellent prediction of remaining power. Manufacturing; our business uses a capital light and efficient operating model pre-certification, while ensuring we have the intellectual know-how and capability to scale up and we’re ready. I've seen firsthand the risks associated with early industrialization; not only does it often consume millions in the purchase of equipment that is unsuitable, but ultimately it can also force poor decisions on the designs that now legacy manufacturing equipment is considered non-negotiable design hardbots. Two; developments derisking the SC-VTOL certification. Our advancements significantly derisk our path to the CAA and EASA SC-VTOL certification targeted for 2028. The SC-VTOL framework sets rigorous and clear safety and performance standards that we can show compliance against with our technology. The key developments include, we're on our 8th iteration of battery design since Vertical Aerospace began focusing on this capability in-house. We have been using our own batteries to power the VX4 prototype flight test for years, and we're on the 11th battery. Our latest design is the safest, lightest, and most capable yet, and we haven't finished. With two more development cycles in the next 12 months before locking down the final battery for our production aircraft. Let me give you an example of the benefits coming from each iteration. Between aircraft 1 and our current prototype, we saved more than 100 kilograms; that's 10% of our battery system mass, whilst also improving mechanical and thermal design and power performance. We've been developing the technology in our battery systems for years. Our first propagation and drop tested battery was conducted back in 2020 with both EASA and the CAA in attendance. On April 9, 2025, we passed the 15.2-meter full pack drop test which is comparable to the fuel tank drop test on a traditional rotorcraft. To be clear, we passed this same drop test on our battery system in 2020, five years ago. According to the requirements designed by EASA within SC-VTOL, we continue to optimize the design to reduce mass significantly; and then pass this test again this year. Passing that test is comparatively easy. Passing that test with all functionality present at the energy and power density we have is tough, and we've done it. Battery system propagation testing; we've completed nearly 200 propagation tests to date across multiple different battery iterations; aiming to not only meet the EASA SC-VTOL means of compliance but also understand our performance against them. On April 29, 2025, we passed our latest full-scale thermal one-way propagation on the sub-pack from our VX4 aircraft. We have two further optimization milestones to go as we continue to test and optimize the battery systems further and ensure we understand it can pass all of the nuanced edge conditions that are possible. What this means is that in line with the EASA SC-VTOL requirements, if a battery fire were to occur on one of our vehicles in flight, we’d be able to continue safe flight and landing either to the destination or to an alternative landing port with full maneuverability of the aircraft, and all of this whilst ensuring the complete safety of the occupants and the aircraft itself. Whilst there cannot be any guarantees on timeline to certify, we've taken industry-leading certification standards, applied them rigorously, and iterated multiple times until we pass them using a battery that is exceptionally high in energy and power for the mass at a cost that makes the business profitable in the future. Three; we're open for business. We're selling our battery systems in newer opportunities. One of our most significant investments of Vertical has been on the development of our hardware, software, and mechanical battery systems. We believe we have one of if not the best battery teams in the world, and we're now ready to tell the world about what they've achieved because they've achieved it. We've used this exact same approach to technology development in batteries as we have on a hybrid program; iterate quietly, make progress on the difficult technological work to show it works, and at a performance point we think is commercially viable in the shadow of the world. For the last 18 months, we've been working on a hybrid powertrain system. Our aircraft has a segregated electrical architecture for redundancy and to comply with the category enhanced requirement; that means we can continue safe flight and landing after any single failure. This capability allows us to take off and land in an all-electric configuration, cruise with the turbine operating when noise is less impactful, and charge all batteries if needed; and then land again in an all-electric configuration. Obviously, this significantly impacts the range capability of our vehicle as Stuart has just made clear. The first type of generation uses a combustion engine, and the second generation will be a gas turbine. We are so far developed in this that we're planning to incorporate it into our third prototype aircraft, and we will start flight testing in 2026. I really want to be clear on the technical significance of what we've done so far. We have proven the capability of a single engine to provide power for multiple electrically independent systems, including under edge case failure conditions. This is one of the most technically complex parts of development, and critical to being able to operate under category enhanced type certification. Now we've done that, we will incorporate it onto the prototype aircraft for flight testing, coupled with our best-in-class battery systems and start testing in 2026. This is also where our large aircraft and cabin is beneficial because the volumetric limitations on a smaller airframe would stop us from making such a change without consuming the available cabin space, thus invalidating its value or requiring a completely new or significant change to the types of certificate. In our case, the range and payload benefits of hybrid can be gained by consuming the luggage compartment and a minor encroachment on available cabin space which is very spacious in an all-electric configuration. Of course, in unpiloted configurations, there would be no need to encroach on that available volume at all. I hope you found that informative. I’ll now hand back to Stuart.

Thank you, Limhi. As you've heard, we're adventuring across every dimension, technology, commercial traction, and strategic positioning. We remain focused on achieving our certification goals, progressing towards production, and building long-term value for our shareholders. In terms of our finances, we continue to demonstrate sector-leading capital efficiency while investing appropriately for the continuing successful execution of our plans. Net cash used in operating activities for Q1 2025 was approximately $30 million. And our guidance for spend for the year as a whole is unchanged at approximately $110 million to $125 million. We closed the quarter with approximately $90 million cash and cash equivalents on hand. As I highlighted on the full year call in March, each time we report, there will be a non-cash financing movement relating to our outstanding convertible low notes. This is highly volatile, driven by a calculation relative to the prevailing stock price. For Q1, this was a £396 million credit to the P&L; and just to be clear, it is non-cash. Just starting to wrap-up. To remind you again of what we've set out to achieve operationally this year, you can see the points on the slide and we're on track to achieve. And in addition, we have announced our new hybrid aircraft. Before turning over to Q&A, I would like to remind you why we believe we are set to become one of the winners in the sector. Incredible progress today, a clear plan for 2025 and beyond, with a clear route to certification in 2028. We have a best-in-class aircraft set to be certified at the highest safety standards to support our customers across all geographies with unmatched capacity for both luggage and passengers in the sector. We have announced our advanced hybrid program, creating an aircraft with over 1,000 miles capability and opening up further multi-billion dollar opportunities. And we have an incredibly focused and highly capital efficient business model. We focus on where we, as Vertical, can make a real difference, and then work with world-class partners for efficiency and effectiveness. Thank you again for joining us today. We'll now open the line for questions.

At this time, I will now turn the call over to Charlotte for questions.

Thank you. So we just thought we would raise one question that we got quite a few people asking us yesterday regarding the hybrid. So this is to ask Stuart, what is the impact on our cash spend, and our cash burn going forward given the hybrid announcement yesterday?

Thank you for the question. I think the first point to note is, we’ve been working on this hybrid powertrain for some 18 months. So all of that development that Limhi and the team have done was within the cash spend that we talked about over the prior years. So we've done a huge amount of hard work in terms of getting battery to talk to the motor to talk to our EPUs. All of that was in the cash envelope we’ve already had, demonstrating incredible capital efficiency by being really, really focused on what we're doing. So as of today, there's no change to our guidance for this year. The cash spend for this year remains projected to be in the range of $110 million to $125 million.

Thanks, Stuart. So back over to you operator for polling for the Q&A, but we just wanted to address that as we’ve had a lot of incoming yesterday.

First question comes from Savi Syth with Raymond James.

I was wondering if I could ask a little bit more on the certification sample that SC-VTOL. And just, is that a supplemental type certification or would you have to start from scratch with EASA? And just along that, if you go towards the path of revenue generation before EASA certification?

Good morning, Savi. Thank you for the question. In terms of the hybrid product, it goes within our current airframe. So everything that we're doing there, we're on track with. And to be clear, nothing that we've announced on our hybrid distracts us from the core underlying electric VX4 aircraft, which is well on track for certification in 2028. The hybrid will be certified as a separate aircraft, likely in and around the same time as the electric VX4, maybe slightly delayed because we haven't fitted it into an aircraft yet. That being said, we will have a full-scale piloted hybrid aircraft flying in Q2 next year. It's an incredibly exciting moment for us. In terms of earlier revenue opportunities; we've been in deep discussions for several months with various potential customers. We can't really say any more than that in terms of short-term changes to cash flow guidance, etc. So I'm sorry I can't go into detail on that but thank you for the questions, Savi.

Just to clarify, does defense have different certification requirements? Is that a fair assumption?

It does depending on what these cases are, yes. So there are potentially ways that this could be certified earlier, but we don't want to get into that at this minute. Let’s just say we're just incredibly excited to put this aircraft out there, having been working on it for 18 months.

Makes sense. I realized I have a bit more one part question. So I will get back in the queue. Thanks.

Your next question comes from Austin Moeller with Canaccord.

Hi, good morning. Just my first question here. Will the hybrid powertrain be integrated into one of the two existing airframes that you have to conduct testing next year or would there be a third airframe that you would be integrating that into?

The hybrid will be going into the airframe that is well under construction at the minute. We've done a huge amount of the build work on that. We'll be tidying that up over the next three to four months. First of all, we'll be flying it as an all-electric aircraft. As I've mentioned before, we continue to drive the VX4 program to completion and certification in 2028. We will then retrofit the hybrid powertrain to that aircraft, and we'll have that flying in Q2 next year; Q2 2026. Hopefully, that clarifies it, Austin.

Okay, that’s helpful. And just to follow up. So on the EASA certification process, I think it mentions in the shareholder letter that you expect to complete the flight test program this year, but presumably, there would be additional flight testing with additional aircraft units in the out years here as you work towards your type certificate or how should we be thinking about that?

Yes. Good question, Austin. What we're referring to there is going through four phases of flight test expansion. We're going into wingborne over the next couple of months, an incredible moment for us as a company. As you know, there's joint liability with our regulator, and when we do wingborne, we will be into public airspace. So it's a huge vote of confidence in us that our aircraft will be flying in public airspace. It's basically a huge sign from the regulator that they believe we're on the right track and are happy to say the aircraft is safe to fly in public airspace. Later this year, we'll then do the full transition; so incredibly excited about that. That completes the four phases. We will have two aircraft capable of repeating that multiple times to generate more and more test information that we feed into our models and continue to develop our understanding of the VX4. So hopefully that explains it. We will definitely be doing a lot more flying.

Excellent. Looking forward to it. Thank you for the clarification.

Your next question comes from Jesse Sobelson with Boral Capital.

The first one I have is just a little bit of a detail-oriented item here. With testing of the play Electric aircraft, I just want to make sure we're 100% fully understanding expectations for wingborne testing. And you say it’s in 2Q 2025; is this phase beginning in this quarter or is it expected to be completed in this quarter?

It will be beginning in this quarter. And as I just said, this is an incredible moment for us because we have a huge high bar to climb to be able to fly in public airspace. So it really does set it apart. It's an incredible moment for the company when that happens, and we are absolutely targeting that in Q2 2025.

Great, great. Thank you very much for the clarification there. And then, I did want to touch upon the hybrid announcement. I think it’s very interesting. With respect to commercial opportunities, how does the introduction of a hybrid electric propulsion system expand Vertical’s capabilities from focusing just on urban air mobility to expanding to regional air mobility? Is it possible that airlines could be pursuing this for use for short regional flights in the future?

Yes. Great question, Jesse. The capability of this aircraft is utterly transformational. It'll have a range of over 1,000 miles; it will have a payload capability of over 1,100 kilograms. And this is all because we have the best airframe in the industry. We always knew from day one that defense and longer-range commercial opportunities would be opened up by a hybrid powertrain. So we've had this working for a long time in the knowledge that this will come along and be an opportunity. And of course, having the biggest airframe means we will be the most capable in the sector, able to carry more people and more things over a long distance.

Our next question comes from Laura Lee with Deutsche Bank.

Thank you for taking my question. And congrats on all the progress. So my question is about the battery business that you talked about. How will that business model look like? Is that like it’s direct sales or like as a service? And also, any color on the timeline. Like, when do you expect it to start generating revenue?

Laura, thank you. That's a great question. I'll do a short intro and then hand it over to Limhi. The battery and battery capability led by Limhi and now by the wider team is incredible. I am so proud to work with these people; what they've done is exceptional. We see huge opportunity here as we move forward, both selling our battery powertrain capabilities, but also the second life. So we take the batteries off the aircraft, off of the VX4, opening up a new opportunity to sell those again for different applications, whether that's marine or CTO, etc. With that, Limhi maybe if you want to add a little bit of color or commentary around that.

So really, it's predominantly been about making progress against the battery system and trying to prove that we could technically do all the things that we've both said and what we were required in terms of the technology itself. So that's kind of the bit that we've hit. We've been contacted for years now with respect to battery systems by individuals interested, and we've rejected a number of them because of the focus we’ve put in both on that and on opportunities that were not coming along. I suppose this is us informing everyone that we will start accepting those opportunities, we will start looking into some of those now, and certainly in the coming weeks and months ahead I'd expect to hear more about that. Precisely because we're getting really good values, we're seeing great performance and kind of hitting lots of points that are quite difficult and problematic to achieve at a really good energy and power density. So, I hope that answers your question or at least gives some color to what Stuart was referring to.

Yes. Thanks, Limhi. And Laura, just to remind you, every airframe that we sell corresponds to an underlying amazing battery business here for us. Every airframe we sell will have one to two batteries a year at greater than 40% margin. So, after launch, it will be 50% revenue from batteries and 50% from the airframe. And it's a fantastic ongoing business, the razor-razorblade model. So this part is really exciting for us.

Your next question comes from Amit Dayal with H.C. Wainwright.

With respect to certification in other jurisdictions, how should we think about what is taking place for the U.S. market, the EU, and other opportunities or other jurisdictions you are pursuing?

In terms of certification, as you know, our home regulator is the CAA; they are linked to EASA regarding the standards they’ve set, which are both clear. They're using the SC-VTOL certification basis at 10 to -9; the same as a large passenger-carrying jet. We believe this is what the market wants. We believe this is what customers want, and safety should be non-negotiable. Now, that is the most challenging standard in the industry. We know how to hit it. We can hit it. Because it's a little bit higher than others, we are working with all the regulators around the world to passport the aircraft into those markets. We're extremely excited about getting to the U.S., getting to the Middle East, and getting to Asia; huge opportunities for us there. But in terms of certification, we will do it in the UK, working hand-in-hand with them as our home regulator, at the same standard as EASA, who we are also working incredibly closely with. Hopefully that gives a bit of a feel for it, Amit?

Yes, no. I appreciate that. Thank you. Just one more from me. How are you building customer relationships at this point? I know it's really testing given that you’re testing and going through all the certification stuff. But in terms of facing customers and showing as a product, etc. What kind of feedback are you getting? Any color on that side of the process would be helpful? Thank you.

Yes, that's a great question. This is a key differentiator for our business. We have an impressive order book and are proud to count American Airlines, Bristol, Bangkok, Japan, and Cacao among our exceptional global customer base. This is supported by our certification standard at 10 to -9. We have been actively listening to our customers from the start to understand their needs regarding aircraft capabilities, which is why we offer the best airframe. We begin with a configuration for six full-scale business class passengers, which can also accommodate luggage. We initially launched with a setup for four passengers plus 120/130 kilograms of luggage capacity, which is something no one else can match. We can easily scale up to six passengers within the same airframe without facing significant certification challenges. To maintain these relationships, we invite our customers to our Bristol facility twice a year for two to four days. During their visit, we discuss the aircraft's evolution, introduce them to our team, and, most importantly, gain insights into their use cases and deployment strategies. This collaboration helps us model how to successfully and profitably bring the aircraft to market, ensuring we meet their needs. We take great pride in our customers.

Your next question comes from David with Barclays.

Can I just follow-up on that? I think there had been an announcement from a significant UK airline that they were considering looking at other platforms. Is that something you're hearing from any of your other customers that they're looking around? Like, do you have the whole market pretty well under control?

David, great question. I think one of the things I inherited when I took over as CEO was an order book that had been closed for a couple of years. Now, it's one of the things; we are going to open up that order book this year as we deepen and expand our customer base over the coming months and year. So we will absolutely be having conversations, not just in the UK but all across the world as we look to further bolster that order book as we are getting closer to certification. And we've got a confirmed date in terms of when we get certified. We know we can hit it. Now is a great time to really start opening up that order book again across the world. So hopefully that gives you a bit of color commentary without going into specifics, David.

That is helpful. Limhi, we've heard that the approach to battery design often involves a choice between prioritizing safety and aiming for enhanced performance. With a target of 200 watt-hours per kilogram, it seems you are leaning towards better performance. Would you say that's an accurate description of the decisions suppliers are making in battery technology? If so, where do you position yourself on that spectrum in your battery design?

David, I'll just take that and then later hand to Limhi. Just to be clear, safety is paramount for us, non-negotiable; so we are doing everything right, and I think what Limhi and the team have done is remarkable, and we will have a battery certified to 10 to the -9; absolutely the best in the industry. So, we must put that up front. I think with that, Limhi, if you want to comment on David's other point about power density, etc.

Yes, thanks, Stuart. And thanks for the question, David. Fundamentally, to come back to Stuart's point, that really is the goal always; we have to be able to show that we're safe. And if you take EASA as an example, they gave an excellent talk a couple of years ago. It’s basically like a battery onion; they went through the different layers of safety that they expect in order to be able to clarify that, that rode this confidence. And that's essentially the same goal that we've gone for. But to give you an example, when we went from aircraft one to aircraft two, the primary thing that saved us mass was an optimization of the plastics that we were using. It was pretty good before, but not great, and then we optimized the plastics that we were using; both in the selection of materials and essentially how it's structured mechanically. And so that's where the unit comes from. It doesn't impact safety in that respect; in fact, the safety got better because we moved more towards self-extinction materials and plastics. And so from that perspective, to come back to Stuart’s point, that really is the baseline. There's no way around that; you’ve got to achieve that. Everything that we’re doing is achieving that whilst optimizing to make us better in terms of performance. I hope that answers your question.

Super helpful. If I can just squeeze one more in, Stuart. And I think you announced there or any preview you can give us on how you’re thinking about the EPM?

So nothing we can announce other than the current ones we have are doing an incredible job; they are outperforming on every dimension. We've got a handful of options as we look to move forward through the certification and put in place a certification contract and production contract. So nothing to announce as yet, but we're really confident in that space that we've got incredible views on our current aircraft.

There are no further questions at this time. I'll now turn the call back over to Stuart for closing remarks.

Thank you. First of all, thanks everyone for joining. Really, really appreciate you taking the time. This has been an incredible past few months for Vertical, absolutely transformational for the business, starting in December with the restructuring of the balance sheet. From that point on, raising $90 million in January, the flight test progress this year has been incredible, and we are so close to wingborne flying. As we said, we'll be doing that within the next couple of months, and certainly in Q2; absolutely fantastic. It will really set us apart versus other people because we are doing this under the guidance of a regulator that is validating our aircraft to be safe to fly in public airspace. We've signed our certification production contract with Honeywell. We have strengthened our Board, and really importantly, the announcement of the hybrid. We've been working on this for some time, and we are so proud to be able to bring it to the market today: a range of 1,000 miles, a capacity of 1,100 kilograms, low noise signature; it really does open tremendous, tremendous opportunities for us across defense and those commercial markets. So, I don't think we've ever been better placed for success. So, thanks again for joining. We really appreciate all the questions. I look forward to updating you, hopefully, pretty quickly on some further news. So, thank you very much.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.