Eve Holding, Inc. (“Eve”) (NYSE: EVEX and EVEXW) reports its second quarter 2023 earnings results.

Financial highlights

Eve is a pre-operational company dedicated to the development of an eVTOL (electric Vertical Takeoff and Landing) aircraft and the Urban Air Mobility (UAM) ecosystem that includes the aircraft development, air traffic management systems as well as a Services & Support solutions. Eve is not yet producing revenue; we do not expect meaningful revenues during the development phase of our aircraft, and financial results should be mostly related to costs associated with the program development.

Eve reported a net loss of $31.4 million in 2Q23 versus $107.2 million in 2Q22.  Setting aside non-recurring warrant-related expenses connected to Eve’s PIPE investments and the merger with Zanite (SPAC transaction) of $87.4 million incurred in 2Q22, net loss was then $19.9 million. The higher recurring net losses in 2Q23 compared to the same period of 2022 were mostly driven by higher Research & Development (R&D) expenses, which are costs and activities necessary to advance the eVTOL design, including the Master Service Agreement (MSA) with Embraer, as well as higher recurring Selling, General & Administrative (SG&A) expenses. Higher R&D and recurring SG&A expenses during the quarter were partly offset by financial investment income and FX gains of $4.1 million in the 2Q23 versus a gain of $0.6 million in the 2Q22, on benefits from higher interest rates and cash position on Eve’s financial investments.

R&D expenses were $21.8 million in 2Q23, compared with $10.4 million in 2Q22. Our R&D efforts are primarily driven by the MSA with Embraer that performs several developmental activities for Eve. These efforts continue to intensify as the design of Eve’s eVTOL matures, including internal design, engineering, and program development and testing infrastructure.

SG&A expenses in 2Q22 were $15.7 million but included IPO and other non-recurring expenses. When excluding one-off items, which totaled approximately $9.6 million, SG&A expenses increased from approximately $6.1 million in the 2Q22 to $6.6 million in the 2Q23, reflecting mainly the higher number of direct employees at Eve – who perform critical corporate and administrative functions including, strategy, sales, legal, supply chain and finance activities. Lastly, R&D and SG&A labor expenses were also helped by the c.5% devaluation of the U.S. dollar versus the Brazilian Real as most of our costs were incurred in Brazil.

R&D expenses in the 1H2023 reached $43.3 million or more than double the amount spent in the 1H2022 of $19.5 million while SG&A expenses increased from $7.5 million in the 1H2022 (excluding non-recurring expenses) to $12.8 million in the 1H2023. Similar to the quarterly numbers, higher net losses in the 1H2023 compared to the same period of 2022 are driven by higher R&D activities necessary to progress the eVTOL design, including the MSA, and an increase on SG&A expenses.

Including employees contracted through the MSA with Embraer and its subsidiaries, Eve now has a headcount of approximately 630 people engaged in the development of its eVTOL and other elements of the UAM ecosystem, versus approximately 380 in 2Q22.

During the second quarter of 2023, Eve’s total cash consumption was $27.8 million, versus $20.0 million in 2Q22. R&D associated with Eve’s aircraft development and SG&A expenses mentioned above were the main contributors to the higher cash consumption during the quarter.

At the end of 2Q23, Eve’s liquidity position was $269.0 million – including cash, cash equivalents, financial investments, and related-party loan with Embraer, versus $294.6 million at the end of 1Q23. As of 2Q23, Eve did not have any debt on its balance sheet. The proceeds from the business combination with Zanite Acquisition Corp., and strategic PIPE investors raised in 2022, combined with potential advances from customers and current and future finance lines are the main sources of capital to fund Eve’s development and certification of its eVTOL.

Eve’s 2Q23 total liquidity – including still-undrawn BNDES credit lines of $101.7 million (to be disbursed throughout 2023 and 2024), was $370.7 million.

For additional information, please access the full 2Q23 Earnings release, available in the Investor Relations website at ir.eveairmobility.com

Webcast details

Management will discuss the results on a conference call on August 8, 2023 at 9:00 a.m. (Eastern Time). The webcast will be publicly available in the Upcoming Events section of the company website (www.eveairmobility.com).

To listen by phone, please dial 1-877-704-4453 or 1-201-389-0920. A replay of the call will be available until August 22, 2023, by dialing 1-844-512-2921 or 1-412-317-6671 and entering passcode 13739495.