EVE Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 9, 2023

There are 10 speakers on the call.

Operator

Good morning, and welcome to the Evair Mobility First Quarter 2023 Earnings Call. During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct a question and answer session. As a reminder, today's conference is being recorded. I will now turn the call over to Lucille Aldworth, Head of Investor Relations.

Operator

Please go ahead, sir.

Speaker 1

Thank you, operator. Good morning, everyone. This is Lucio Aldworth, the Director of Investor Relations at Yves. And I wanted to welcome everyone to our Q1 2023 earnings conference call. I have here with me Co CEOs, Jerry Demuro Andres Stein as well as our CFO, Eduardo Cotto.

Speaker 1

After their initial remarks, we're going to open the call for questions. We have prepared the deck with a few slides and additional information. This is available at our Investor Relations website at Let me first start by mentioning that this presentation includes forward looking statements or statements about events or circumstances that have not yet occurred. We have based these forward looking statements largely on our current expectations and projections about future events and financial trends affecting our business and our future financial performance. The forward looking 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.

Speaker 1

The words believe, may, will, estimates, continues, anticipates, intends, expects and similar words I intended to identify forward looking statements. We undertake no obligation to update publicly or revise Any forward looking statements because of new information, future events or other factors. In light of these risks And as Erdis, the forward looking statements and circumstances discussed in this presentation might not occur. Our actual results could differ substantially from those anticipated in our forward looking statements. With that, I will now turn the presentation over to Jerry.

Speaker 2

Jerry? Thanks, Lucille. Good morning and thank you to those joining the call today. Today is actually a special day for us. It's the 1st anniversary of our listing on the New York Stock Exchange.

Speaker 2

We've come a long way in the past year And are progressing well with our business plan, but we know there's quite a bit more to do. And I'm certain we have the right group of people to achieve our goals and become a major player in the UAM market. Over the last quarter, we've made significant progress on the development of our aircraft as well as in other areas of our business plan related to the UAM ecosystem. As you can see on Slide 2 here, We advanced to the next step in the certification process by proposing our basis of certification to ANAC and we expect approval by the end of the year. We progressed negotiations with our suppliers on both technical and commercial terms, and our expectation is to close with suppliers of critical subsystems By the end of this quarter, we continued the extensive testing program with wind tunnel tests of different configurations and components.

Speaker 2

And in our design, we are now incorporating a best in class baggage compartment that Stein will talk a bit more about a little later, as well as how user feedback is enhancing and influencing our design. Moving to Slide 3, This illustrates our progress on the technical aspects of the program. I mentioned our wind tunnel testing, which was a 3 week long We are also testing different motor and propeller configurations through dedicated rigs that allow us to test under different load and weather conditions. Interestingly, we have developed a truck mounted rig to validate our modeling of rotor performance during transition and forward flight. In addition, we're also employing a series of additional rigs for battery and motor as well as thermal management tests.

Speaker 2

All of these will permit extensive independent testing of discrete subsystems, and this is an important aspect of our flexible approach, which allows us to test systems separately and incorporate refinements into the design once we have reached a target solution. In essence, it allows for quick and efficient product development. In short, we continue to mature the aircraft Within the milestones we established and forecasted earlier this year, and Itu will have a little more to say on the topic later. Now, I would like to ask Dain to talk about several features of our aircraft that we're very excited about.

Speaker 3

Thanks, Jerry. We are very proud about our focus on user experience, and the result of that is to have been shortlisted For the Crystal Kevin Award this year, being the shortlist for such prestigious award, it's a major achievement in itself And reflects all the hard work from our user experience and design teams. And it's a continuous effort. We had many events and conversations with users, customers and partners to have a more human centric, Accessible and cost effective cabin, improving at the same time the user experience and the economics for the operator. On that note, I'd like to highlight a few points about our cabin.

Speaker 3

And several of you might have been able to see it for yourselves either in Melbourne last month at South by Southwest or in the last air show. One of them is an extra wide passenger door and specially designed seats for enhanced accessibility in and out of the cabin. We also focus on multiple sensory involvement, including different solutions to address different user needs. Besides that, we are using sustainable yet certifiable Materials extensively in our cabin, like cork, natural wool and recyclable materials to minimize our impact on the environment. As a reminder, sustainability is one of the pillars of our company and that extends to cabin materials.

Speaker 3

Not only you will have a 0 emission aircraft, but you are minimizing carbon emissions throughout the entire cycle of the aircraft, So our material choices are critical. Last but not least, we have the best in class Baggage capacity. Our eVTOL can fit 1 carry on suitcase per passenger, and you can even fit larger check-in luggage or even a wheelchair. We believe this adds to our passenger experience and accessibility drivers, provide capacity for ancillary revenue, As operators can charge for additional baggage items or cargo and since our offer, particularly for the airport shuttle market. On to Slide 5 now.

Speaker 3

We also hosted An infrastructure summit in our Melbourne offices in April with 25 partners from operators to infrastructure and technology providers To see the representatives, this was one of the many events we sponsored throughout the last few years to integrate partners in the entire Uberner Mobility Ecosystem and help develop and scale its many components. We had 4 tracks on that event, sound implications for community, energy, ground service And passenger flow for a seamless experience. This type of event help us and our partners Diagnose potential pain points and yields findings for us to come up with solutions. In this experience specifically, Among other discussions, we've simulated passenger flow from boarding to de boarding using our cabin mock up. This gave participants a glimpse of what is necessary to use passenger flow and improve the overall experience.

Speaker 3

This is unique to Yves, as we do believe that beyond developing and manufacturing our aircraft, it is necessary to look at all pieces in the entire ecosystem and engage with partners to co create it. In that sense, EVE is uniquely positioned in the Uber and Mobility market. Now moving to Slide 6. I'd like to mention that right after our Infrastructure Summit, we also hosted an Investor Day in our Melbourne office We hosted around 50 participants from partners to analysts and investors. We had a full afternoon of presentations by our team leaders.

Speaker 3

These are the people in charge of every aspect of the development of our program, Design, Engineering and Uber and Aircraft Management, Business Development and Customer Experience. They offer some insights into the specific areas. We also opened in our U. S. Ops at that event.

Speaker 3

At the end of the day, We unveil our cabin mock up to the investment community over a more informal setting with our entire team. Slide 7 shows that you currently have what we believe to be the largest and most diversified backlog by number of customers and regions in the industry today. In total, we have announced LOIs for 2,770 aircraft From 26 different customers spread over to other countries and different business, from main lines to regional airlines, To helicopter operators, ride sharing platforms and leasing companies. We also have LOIs to offer our Uber air traffic management system In 8 different markets, we believe this reflects the state of the art value proposition we bring to our partners and their clients. And there is more to come on that front.

Speaker 3

We believe this pipeline offers strong term revenue visibility and will help EVE to smooth cash flow consumption in the years to come as we start to convert existing letters of intention into firm orders and collect pre delivery payments known as PDPs. Beyond that, we are developing a strong network of partners in areas such as infrastructure and energy To address one of the largest challenge ahead of Urban Air Mobility, which is to create a whole new ecosystem besides simply developing an aircraft. Now I would like to invite Edu to talk about our financials and next milestones.

Speaker 4

Thanks, Lestein. Now moving to Slide 8. Eve is a pre operational company and our financial results for now reflect mostly the costs associated with the development of our eVTOL program. I would like to start with the income statement highlights. We invested almost $22,000,000 During the Q1 of 2023 in our program development versus $9,000,000 a year ago, the majority was invested to develop Our eVTOL and a portion for our service and support solutions and the development of our urban air traffic management system.

Speaker 4

In addition to the development expenses, we also deployed $6,000,000 in SG and A during the quarter versus $1,000,000 last year. Keep in mind that the Yves and Embraer teams dedicated to the EBITDA development have been growing as the program evolves. Yves also reported around $4,000,000 in financial revenues during the Q1, mostly due to the return of our cash investments. We have a very conservative financial policy, keeping our money invested in short term deposits with big banks. With that, we reported a net loss of $26,000,000 in the Q1 of 2023.

Speaker 4

Now Moving to cash flow. Our operations consumed $20,000,000 in the quarter, driven by higher R and D expenses And an increase in direct and indirect headcount through our master service agreement with Embraer. We had a positive impact on our cash flow Coming from accounts payable that increased $6,000,000 during the quarter, most of this is related to the service agreement with Aimbriar, which is typically paid after 45 days of service being rendered. With that, we ended the Q1 We have around $295,000,000 in cash, but when we consider the standby credit line from the Brazilian Development Bank Of almost $100,000,000 that we will start to access this year, our total liquidity exceeds $390,000,000 And it's enough to fund our operations into 2025. Finally, Slide 9 summarizes our milestones for 2023, And I wanted to reaffirm our commitments to this year's goals.

Speaker 4

We plan on defining the primary suppliers Of some of the most critical components like motors, batteries and propellers, once we define these suppliers In detail, the specifications of each component like weight, power, size, required subsystems, We can freeze the design details. We also will start building our 1st full scale prototype, which we plan to start testing next year. We also plan on launching a trial software on our urban air traffic management system by the end of the year, and we With that, we conclude our remarks and I would like to open the call for questions. Operator?

Speaker 5

Thank You will hear a 3 tone prompt to acknowledge your request. One moment please for our first question. Your first question comes from Savi Syth of Raymond James. Please go ahead.

Speaker 6

Hey, good morning, everyone. Yes. As you kind of work through the supplier selection here, I was wondering if you're able to share any kind of early indications on And how some of these agreements might be structured in terms of kind of guaranteed supply or escalators or just kind of any early indications as you've had these conversations?

Speaker 2

Good morning, Savi, and thanks for joining the call. Good question. As we mentioned, we're working through both the technical aspects, Obviously, as we look to refine the final design of the aircraft, as well as the terms and conditions and all of the topics that you mentioned Are relevant, right? And it really depends on the particular product offering, combined with how unique that offering is for Our application, if you look on a spectrum of things, motors will be very unique and require quite a bit of development To evolve electric motors for aviation applications versus something maybe a little more mature on the spectrum, which would be avionics. So Each of those conditions kind of varies depending on the product offering.

Speaker 2

Stein, you want to add anything to that?

Speaker 3

Not much. I think that's the point. As you said, Savy, we are in the final stage, so much you can actually disclose at this point. But I think we're on a good track. And as Jerry said, there are different challenges throughout the selection process.

Speaker 3

And as we've learned in further programs, We go by the big blocks first and the primer suppliers first, the ones that really move the needle And you move along throughout the year with the whole selection process.

Speaker 6

That makes sense and helpful. If I might, Along those lines, just any kind of early thoughts on kind of how many of the full scale prototypes you plan on building in 2020 3 and 24. And just curious, I'm guessing there's going to be some non recurring engineering costs related to that. I was guessing that probably picks up in the second half and then kind of maybe builds into 2024, but any color on that would be appreciated.

Speaker 2

Yes, Savi, I'll turn it over to Stein, but you're exactly right. Our cash consumption On the non recurring side, we'll increase as we go through the year. And it's not just for the development of the full scale Prototypes or the build of those, it also will have to do with really launching now with the supplier side. Both of those things will accelerate. Stein, you want to talk a little bit about Plans for the prototype?

Speaker 3

Yes. As I said, it increased. That actually, it's the very reason why we focus on the building blocks And really define and mature the solution, the overall engineering project before moving to full scale prototypes. So we don't go back. This the further we go down the program, more expensive it becomes, not only because of the prototypes, But the amount of labor becomes more intensive as we move along the project.

Speaker 3

So We are planning like a handful of prototypes throughout the development as we've done with other programs. That means that we expect to increase The expander in the years to come, but we've seen our business plan. So far, we have been able to keep a good track of expander in the development, And we do plan to increase that, following on the maturing of the project.

Speaker 4

Just to add one point here, it's fine. It's Edu here, Savi. I think that's already reflected in our projections for the year, right? We burned $20,000,000 in the Q1. If you look at the full year, we expect $130,000,000 to $150,000,000 So there will be a pickup I mean, expenses throughout the year and part of that comes from this now returns as well.

Speaker 6

Makes sense. All right. Thank you.

Speaker 5

Thank you. The next question comes from Hi, Von Rumohr of Cowen. Please go ahead.

Speaker 7

Good morning and excuse me for the cold I've got. So Jerry, as you know, Billy Nolan of the FAA is about to retire and sometimes It takes a while to get another administrator into the seat. And while you're basically going to certify first with ANAC, What impact do you think that might have in terms of coordination with the FAA?

Speaker 2

So the Biden administration has already floated some names as potential Replacements, we haven't seen any indication at the level that we're working with FAA through the bilateral agreement with ANAC. We haven't seen any indication That they're going to slow the emphasis on moving forward with EBITOL certification. So Government Organizations are government organizations and the tops, The administration nominees change from time to time. That's kind of routine, but the working population He stays in place and continues to do the work that we ask them to do as civil servants. So I think that case will be the same here.

Speaker 2

And in terms of The FAA's stated objective to move forward with EBITDA certification as a priority. We haven't seen any change yet, but stay tuned. It will affect all of us equally. Us maybe a little bit less as you mentioned, Because we're going through ANAC, but we certainly do hope to continue the dialogue with FAA and do the concurrent certification process. Steyn, in the detailed discussions, have we seen any change at all?

Speaker 2

I'm not aware of any.

Speaker 3

No, not really. I think the concept and the push Towards Advanced Dair Mobility remains there. We, through Embraer, have a long standing relation with FAA that goes beyond Because we need to realign within FAA affects us a bit less as our primary certification organization, Zainac.

Speaker 7

Got it. And, excuse me, last one. The What still has to be defined in terms of operating requirements? I know that the FAA basically is, I think it's getting closer in terms of what they're going to require for Type CERT. But what for operating, What are the key issues that you think they still have to define to kind of get the operating requirements set?

Speaker 3

You are absolutely correct on that assumption. It's something that we've been working very closely as well with Airplanes for the highest standards of operations of not only Part 25 aircraft, but Part 121 operators, That helps. That helps understanding what where it could go. The other aspect that helps is that the focus We have on safety requirements. That applies for operations as much as for the development aircraft itself.

Speaker 3

So we are planning for the highest standards. That definitely helps for future requirements, and you have been following that very closely as are our operators.

Speaker 5

Thank you.

Speaker 7

Thank you.

Speaker 5

The next question comes from Sheila Kahyaoglu of Jefferies. Please go ahead.

Operator

Thank you and good morning everyone. So just on the supplier point, as you guys start picking your suppliers, Can you give us sort of an update on your prototype build later this year? Have there been findings from wind tunnel or truck mount testing? How is the design progressing as we think about Firstbite in 2024?

Speaker 2

Yes. As we've talked about, we are refining the final details of the design based on the technical information from suppliers On size, weight, volume, that sort of thing, so we're making minor refinements there. We expect after the Major supplier selections are done to return to the wind tunnel testing again later this year at least once To validate any refinements that we put in there, Stein, you want to talk about The next few steps, few months?

Speaker 3

Yes. When you're talking about the next development phase, things like joint definition phase, where we go together Select suppliers and really refine it's really about refinement. We have been engaged with the suppliers for years by now. That's exactly why we believe you are mature enough to select not only the right supplier, but with The right specs, and that helps the next stage. So going back to the whole philosophy of building blocks, we don't Expect to find new surprise as you are developing the details and the integration Between systems mainly, right, things like the motors of the batteries, the flight control computer.

Speaker 3

We have a good understanding already on where the options are and how we're going to be able to integrate that. It's really about detailing and fine tuning the product.

Operator

And then how are you working with your suppliers in terms of Just the development funding, is that some of your cash usage and how do those agreements work out?

Speaker 3

Well, we as I'm sure you are aware, we cannot disclose the commercial conditions of Different suppliers, we are in the final process of selecting suppliers right now. What I can say though is that we We've worked on both ways in previous programs of receiving fundings from the suppliers at Lhasa. It is something that we are used to. So it's in the table as well. It's all about what is the best combination between funding And recurring costs and the actual costs of the product later on.

Speaker 3

So It's a balance. It will be a different balance with different suppliers, but I think it's progressing well at this point.

Operator

Okay, great.

Speaker 4

Thank you so much. Just a moment, Tanya. The suppliers, they are excited, right, about urban air mobility. Similar to the OEMs, the suppliers, they also want to be in that business, and they understand that there are some needs The only the OEMs have, and I think they are going to be willing to put skin in the game as well.

Speaker 2

Yes. Just to reinforce that point that Itu makes, You'll note that we have a number of technology partners who are already investors in the business and that will color perhaps The contractual arrangements that we have, we have unique products now being added, such as the energy source being the battery. That provides an opportunity for different business models as you look forward. So again, as Steiner said, each of these is It's kind of a unique situation, including the aftermarket arrangements, which again, because we have new products like batteries that may have a second life. Each of these has to be negotiated uniquely and that's taking a little bit of time and we're investing that with each of the major suppliers.

Operator

Great. Thank you, guys.

Speaker 3

Yes.

Speaker 5

Thank you. Our next question comes from Andreas Sheppard of Cantor Fitzgerald. Please go ahead.

Speaker 8

Hey, good morning, everyone. Congratulations on quarter and thanks for taking our questions. A lot of our questions have been answered, but maybe a quick question on the backlog. I recall from the cabin mock up events that a lot of the emphasis this year was going to be placed on Converting that order pipeline of the 2,770 LOIs into firm orders. So I'm just wondering, maybe can you comment on that?

Speaker 8

Any progress there? When do you anticipate maybe making some announcements there? Just Wanted to maybe better understand what that timeline might look like. Thank you.

Speaker 2

Sure, Andreas. Stein In some cases, rideshare providers looking at The optimum locations and a holistic plan for launch before we announce the initial conversion. Stein, you want to talk about that team process?

Speaker 3

Sure. So the whole focus right now, it's moved beyond any hype and really nail down Where the cities will be, where the operators want to start bringing the partners, events like this infrastructure summit that you just came out of Last month, it's exactly about that. What the network that makes sense, what is the origin destination from passengers even, So we can build up the network, understand the number of aircraft of EBITDAUs that are necessary to comply with networks, so we can plan that, Align that with our industrialization strategy as well, so we can assure that you have slots with the certification strategy, what goes After a NACA, FAA, what's the sequence where you're going to be deploying the aircraft. So we have been through this process since the beginning of the year. And to your point, there are quite a bit of progress.

Speaker 3

We don't expect an announcement of converting that necessarily Soon, exactly because we want to like we are doing with the aircraft development actually, we are to mature The decision we're going to work together to figure out even the support we need to starting the plan for investment and support Where you can leverage Embraer infrastructure as well and put all that together. So that's the development that's happening this year And quite a bit of progress. We do have good visibility on quite a few potential on cities, all of the respective network, On respective combination of potential partners in terms of infrastructure, energy and so on, and also what the solution For service and support, it might be for that particular location.

Speaker 8

Got it. That's great. Thanks, Jerry and Andres, thanks so much. Maybe one last question for Edu. I know this was covered previously, but just To help me better understand, so the cash spend

Speaker 2

for the quarter was below $20,000,000

Speaker 8

And you're reaffirming $130,000,000 to $150,000,000 So just again, sorry if I know this was covered before, but just help me to better understand that Higher cash spend in the later quarters, what is the primary reason for that? Thanks.

Speaker 4

Yes. So as we're discussing, right, Andres, so we continue to ramp up our engagement. We Concluding now the supplier selection on the second half, we're going to start the works related to the assemble of the first prototype. So The level of activity will continue to go up throughout the year. In the Q1, we consumed 20,000,000 a little bit less than 20,000,000.

Speaker 4

So but definitely, even if you look at some of the accrued expenses, If you look at the master service agreement we have with Embraer now, we're going to have $60,000,000 to pay now in the mid of May. So there will be Higher payments in the upcoming quarters, and that's the reason we are anticipating this 20, which would annualize 80, really to grow Throughout the year and be between $130,000,000 $150,000,000

Speaker 8

Got it. Okay. Thanks very much, everyone. Congrats again on the quarter and I'll pass it on. Thank you.

Speaker 5

Thank you. The next question is a follow-up from Savi Syth of Raymond James. Please go ahead.

Speaker 6

Hey, thanks for the follow-up. Just actually 2. First, just following up on Andre's question. I realize that you kind of have good ideas on kind of partners and needs and things like that, when do you think some of those would be kind of formalized and maybe announced Kind of in conjunction with your certification, is that more like a second half twenty twenty four type timing? Or just curious as to when some of those get more finalized.

Speaker 6

I'm guessing you had to wait until some of your specs are finalized with the prototype.

Speaker 2

Yes. Savi, good question. We've said all along this year, that the first tranche of major suppliers, so if you recall, that's propellers, Electric motors, both the rotor and the pusher, pushers and the battery, really the energy solution, We consider them G0. That should be announced at the end of this quarter. Right behind that, you'll have the flight control computer.

Speaker 2

Stein will help me out here, Avianis, etcetera, which will follow shortly thereafter. So we really expect here Within the next 30 to 45 days to nail down most of those and we'll be prepared to announce who they are. Stein, anything you want to

Speaker 8

add to that?

Speaker 3

Yes. No, it's pretty much vast majority, the main ones we are Getting to the final stage of the selection process, like, as I said, batteries and so on. But you do expect pretty much everything to be select Throughout this year, for next year, just some smaller items, things like interiors as well, cabins, Airframes and so on. So we have the vast majority of our aircraft covered and selected this year.

Speaker 2

And Savi, again, getting back to Andre's question and yours earlier, once we get those selections done and we launch into what Stein Talk about this final joint development working out the systems and systems issues. That's why we really anticipate along with The accrued expenses and the prototypes and the supplier costs, that's why we expect the expenditures to ramp up As we go through the last two quarters of this year.

Speaker 6

Makes sense. That was actually a super helpful answer. I was kind of curious more on the kind of the first

Speaker 3

Okay. Now this I think, as I said, we are in good shape. We do have a few cities That are likely to be the early ones. So and when I say that, it's Because both the operator, by the end of the day, we are not the operator. So it is our customers.

Speaker 3

It's up to our customers to select in which market they will start, But we are able to bring together the customer, the community representatives of the city, the Energy providers and infrastructure providers that we will be looking at divert ports, for example, to the same discussion. And we do have a few cities in the pipeline. Stay tuned. That probably will be able to disclose before The final agreement with customers.

Speaker 6

Okay. Interesting. And then just one last question. I was curious regarding the Urban ATM solution. The evolution of EFA's initial blueprint for Aerosaxi operations, how does that compare to your expectations on the kind of the timing and need for that Urban ATM kind of solution that you're providing?

Speaker 3

I think it's pretty in line. When you're talking about the Open Air Traffic Management software, it applies for both our navigation service providers, The PSUs, but also the vertical boards, the operators, so

Speaker 4

all of

Speaker 3

them have applications. Some of them need to be certified. Some of them, There are more optimization software solutions really that do not require certification necessarily. So that ones, we do expect to have earlier on, we one of the things we mentioned that we will have Some deployment this year, right, that in terms of trials, we are In the second half of this year, we're going to deploy and have trials with parts of the software that will be in conditions for that already. We've done that last year in CAGO as well had trials there, used our manufacturing management software to for trials and so on.

Speaker 3

So some The blocks, the building blocks and the functionalities of the software might come even before what's going to be a final certified solution. But to your point, yes, it's we are not seeing anything different either on that side. There was a question, an early question on operations. Same with operations, actually FAA is supposed to issue the start up, The conditions end of this summer, just to clarify a bit more on my last comments, they have already published the con ops last week. So, so far, it has been in line with the discussions we had before.

Speaker 3

That's not by coincidence. It's exactly this early engagement process that we Keep track of everything that's going to keep discussing, so when it comes, it doesn't come as a surprise.

Speaker 6

Excellent. Thank you very much.

Speaker 5

Thank you. The next question comes from the line of Marcella Mata of JPMorgan. Please go ahead.

Speaker 9

Hi, everyone. Thank you very much for taking My question, a couple of follow ups in a sense. I mean, first, if there is anything that you guys would like to comment About sales campaign, I mean, I know that the focus is more on getting the prototype up and running, select the suppliers, but just wondering If there is a possibility of seeing new orders or new partners maybe on the supply selection that will come up with To be added to the backlog? And the second question is regarding liquidity. I mean, as Edu mentioned, the company You're in a very comfortable position until 2025.

Speaker 9

There is a BMDS standby line, but just wondering if you guys have been looking for maybe Another source of cheap funding, funds related to renewables to EV. So if we could expect you guys to continue To add more standby lines, just to take advantage of the ramp up of the company. Thank you.

Speaker 3

On the first one, let me get the first one and then pass to Jerry and Edu. The short answer is yes. We even though the big focus, It is on getting the backlog we have and really streamlined operation, how it will be and so on. We might expect to see a few more orders that are strategic customers that we are working Throughout this year, we don't expect but a lot of focus on just purely increasing the backlog. So it's more about strategic orders, strategic partners That can come along.

Speaker 2

Yes. With regard to funding, as we've talked about before, and Edu can talk in detail, This year, we put ourselves in a very comfortable position. We can be, as you suggest, opportunistic. And frankly, if you have a source of cheap funding, as you're suggesting, we're certainly always open to brilliant ideas there. But Our plan really is to consolidate where we're going with Launch Cities and Launch customers and examine the pre delivery Payments that we talked about before, PDPs and looking at the timing and the value of that cash flow, which can be fairly substantial.

Speaker 2

And when we get a good handle on that after the end of this year, we have a number of very significant options open to us with A pretty clean balance sheet and the ability with a $2,000,000,000 market cap to also leverage the capital markets if we'd like to. So, Itau, you want to

Speaker 8

talk about that a little bit?

Speaker 4

No, just to add one thing, Jerry, the short term focus is really the standby facility with the Brazilian Development Bank, right? We still need To access that, we have $100,000,000 there available for us. We are working to make sure we start to withdraw There's money now in the beginning of the second half. So the big focus is to make sure we access the Brazilian Development Bank money that we already have available.

Speaker 9

Perfect. Super clear. Thank you very much.

Speaker 5

Thank you. Our next question comes from Marvin Fong of BTIG. Please go ahead.

Speaker 8

Thank you. All my questions were answered actually. Thank you.

Speaker 5

Thank you. That would make a final question. I'll turn the call back over to our speakers for any closing remarks.

Speaker 2

All right. Well, thank you all for attending. And as always, you can reach out to Lucio, Aldsworth, he'll be available for any follow-up questions you may have or any detailed information you may require. And we look forward to talking to you again in the not too distant future.

Speaker 5

Thank you. This does conclude the conference.

Speaker 3

Okay. That's all right. Thank you. Just to just say goodbye then. But thanks for joining us today.

Speaker 5

Thank you. This does conclude the conference for today. We thank you for your participation and ask that you please disconnect your lines. Thank you and have a good

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