Volato Reports Fourth Quarter and Full Year 2023 Results
- Increased size of floating fleet to 24 HondaJet IIs with firm orders for new aircraft delivery in 2024 and 2025.
- Total revenue for FY 2023 was $73.3 million, with aircraft sales revenue at $21.4 million and aircraft usage revenue at $37.8 million.
- Net loss for FY 2023 was $52.8 million, including a $13.4 million non-cash charge.
- Adjusted EBITDA loss for FY 2023 was $32.1 million.
- Key operational highlights include a business combination leading to public listing and raising over $40 million in new capital.
- Partnership with Banyan Air Services to expand maintenance capabilities and launch of Partner Benefits and Volato Insider Programs.
- Expect delivery of 10-14 new aircraft in FY 2024.
- Launched Vaunt app in Q4 2023 to monetize empty repositioning flights efficiently.
- Improvement in gross profit margins through a disciplined cost management approach and pursuit of higher yielding non-owner flight hours.
- Fourth quarter flight hours increased by 105% over the prior year.
- Balance sheet shows $14.5 million in cash and cash equivalents at the end of Q4 2023.
- Conference call scheduled for March 26, 2024, to discuss financial results.
- Net loss of $52.8 million and adjusted EBITDA loss of $32.1 million for FY 2023.
- Lower aircraft sales impacting total revenue for the fourth quarter and full year.
- Increased net loss and adjusted EBITDA loss primarily due to higher operating expenses and non-cash charges.
- Continued downward pressure on revenue due to industry factors like aircraft delivery delays.
Insights
The financial report from Volato Group, Inc. indicates a complex scenario. While the company has managed to increase its aircraft usage revenue significantly, this has not translated into profitability, as evidenced by the substantial net loss reported for both the fourth quarter and the full year. This discrepancy suggests that while Volato is expanding its operational capacity, it is also facing challenges in cost management and possibly in the execution of its business model. The increase in aircraft usage revenue by 162% year-over-year is noteworthy, but investors should be wary of the high net loss figures and the non-cash charges that are affecting the bottom line.
It's also important to consider the future outlook provided by the company. The expectation of increased fleet size and the introduction of new revenue streams such as the Vaunt app and Partner Benefits Program could improve margins, but this is speculative and hinges on successful implementation and market acceptance. The mention of aircraft delivery delays due to industry-wide production and supply chain issues is a red flag that could continue to impact revenue and profitability in the short term, despite the positive outlook for easing of these issues in the coming years.
Volato's balance sheet and liquidity position are critical areas of focus. With $14.5 million in cash and cash equivalents at the end of the fourth quarter, the company's assertion of having sufficient cash to achieve profitability warrants scrutiny. This claim must be balanced against the reported net loss of $52.8 million for the full year, which includes a non-cash charge of $13.4 million. The non-cash charge, related to the change in fair value of a forward purchase agreement, is a significant factor in the net loss and reflects the volatility in financial instruments that the company is exposed to.
Investors should also consider the company's adjusted EBITDA loss, which has increased substantially year-over-year. While EBITDA is a commonly used metric to assess a company's operating performance, the wide gap between revenue and EBITDA loss suggests that the company's cost structure may not be sustainable without significant adjustments or a dramatic increase in revenue. The planned increase in aircraft deliveries for FY 2024 could provide additional revenue, but this is contingent on the resolution of supply chain issues and the successful sale of these aircraft.
Volato's operational highlights, such as the growth of its floating fleet and the increase in non-owner flight hours, demonstrate a strategic push towards capturing market share in the private aviation sector. The reported 162% increase in aircraft usage revenue reflects a positive trend in demand for private flights, which has been a broader industry trend since the pandemic. However, the light jet market is highly competitive and Volato's efforts to differentiate through technology, such as the Vaunt app for monetizing empty repositioning flights, will be key to its long-term success.
Another aspect to consider is the company's partnership with Banyan Air Services, which is aimed at expanding maintenance capabilities. This move could help reduce operating costs and improve aircraft availability, but the financial benefits of such partnerships are often realized over the long term. The increase in the company's net promoter score, an indicator of customer satisfaction, is a positive sign, but it must be weighed against financial performance when considering the company's overall health and potential for growth.
Improved Demand Mix Drove Higher Blended Yield and Aircraft Usage Revenue
Increased Size of Floating Fleet in FY 2023 to 24 HondaJet IIs
Expect Delivery of 10-14 New Aircraft in FY 2024
Fourth Quarter 2023 Financial Highlights
-
Total revenue was
$31.5 million -
Aircraft sales revenue was
$15.7 million -
Aircraft usage revenue was
$11.6 million -
Managed services revenue was
$4.2 million
-
Aircraft sales revenue was
-
Net loss was
$23.6 million $13.4 million -
Adjusted EBITDA1 was a loss of
$8.1 million
Full Year 2023 Financial Highlights
-
Total revenue was
$73.3 million -
Aircraft sales revenue was
$21.4 million -
Aircraft usage revenue was
$37.8 million -
Managed services revenue was
$14.1 million
-
Aircraft sales revenue was
-
Net loss was
$52.8 million $13.4 million -
Adjusted EBITDA1 was a loss of
$32.1 million
[1] Adjusted EBITDA is a non-GAAP measure. Please refer to the tables and related notes in this press release for a reconciliation and definition of non-GAAP financial measures. |
Fourth Quarter and Full Year 2023 Operational Highlights
- Increased the size of our floating fleet to 24 HondaJet IIs with firm orders for 22 HondaJet IIs and 4 Gulfstream G280s to be delivered in 2024 and 2025
-
Completed business combination resulting in public listing and raised over
$40 million - Partnered with Banyan Air Services to expand maintenance capabilities in the Southeast for Volato’s growing fleet of HondaJets
- Launched Partner Benefits Program to provide Volato members with elevated luxury experiences
- Launched Volato Insider Program to drive additional non-owner demand
- Launched Vaunt app in Q4 2023 to efficiently monetize empty repositioning flights
Company Commentary
Matt Liotta, Co-Founder and Chief Executive Officer of Volato, commented, “2023 marked a successful year of executing on our strategic priorities, scaling our fleet, expanding market share, and continuing to demonstrate Volato’s exceptional value to customers. We expanded the size of our floating fleet to 24 HondaJets in 2023, increasing aircraft usage revenue by
“Industry factors beyond our control – specifically aircraft delivery delays – put downward pressure on topline revenue in 2023. We are in close contact with our suppliers and partners and understand that production and supply chain issues are easing, providing us with good visibility into our 2024 and 2025 delivery pipeline. We expect continued fleet expansion will propel revenue and margin in several ways, including increased fractional sales and operating revenue, and more efficient aircraft utilization. We remain focused on growth and our path to profitability.”
Mark Heinen, Chief Financial Officer, commented, “Gross profit margins improved on a sequential basis through a disciplined approach to managing our cost base and pursuit of higher yielding non-owner flight hours over the course of 2023. The growth of our floating fleet delivered higher usage revenue, and we expect these trends to continue as we add new aircraft to the fleet throughout the year. We also anticipate an increase in plane sale revenues with the expected delivery of nine to eleven new jets in FY 2024, providing the business with momentum on our path to profitability.”
Key Metrics
(financial metrics in thousands, except KPIs)
|
Three Months Ended |
|
Twelve Months Ended |
|
||
|
December 31, 2023 |
December 31, 2022 |
Change YoY |
December 31, 2023 |
December 31, 2022 |
Change YoY |
Financial Metrics: |
|
|
|
|||
Revenue: |
|
|
|
|
|
|
Aircraft sales |
15,733 |
25,930 |
(10,197) |
21,443 |
67,695 |
(46,252) |
Aircraft Usage |
11,568 |
5,236 |
6,332 |
37,787 |
14,417 |
23,370 |
Managed aircraft |
4,160 |
4,749 |
(589) |
14,108 |
14,594 |
(486) |
Total Revenue |
31,461 |
35,915 |
(4,454) |
73,338 |
96,706 |
(23,368) |
Net Loss |
23,636 |
3,094 |
20,542 |
52,822 |
9,367 |
(43,455) |
Adjusted EBITDA |
(8,112) |
(2,588) |
(5,524) |
(32,142) |
(8,985) |
(23,157) |
|
|
|
|
|
|
|
Key Performance Indicators (KPIs): |
|
|
|
|
|
|
Total Flight Hours |
3,504 |
1,712 |
+1,792 |
11,273 |
5,031 |
+6,242 |
Empty Percentage |
|
|
( |
|
|
( |
Demand Mix |
|
|
|
|
|
|
Owner |
|
|
( |
|
|
( |
Non-Owner |
|
|
+ |
|
|
+ |
Blended Yield |
|
|
|
|
|
|
Floating Fleet |
24 |
11 |
+13 |
24 |
11 |
+13 |
Light Jet Market Share |
|
|
+ |
|
|
+ |
Net Promoter Score |
88 |
N/A |
N/A |
88 |
N/A |
N/A |
Fourth Quarter and Full Year Financial Summary
Total revenue for the fourth quarter decreased
Net Loss for the fourth quarter increased
Adjusted EBITDA loss for the fourth quarter increased
The growth in our floating fleet increased fourth quarter 2023 flight hours
Demand mix continues to improve with
Balance Sheet and Liquidity
The Company ended the fourth quarter 2023 with
Conference Call
Volato will host a conference call to discuss its Fourth Quarter and Full Year 2023 results at 8:00 AM ET on March 26, 2024.
Interested parties can access the conference call by dialing (866) 605-1830 for toll free access or +1(215) 268-9881. The live call will also be available via webcast on Volato’s Investor Relations website: https://ir.flyvolato.com/.
A replay of the call will be available until April 25, 2024, and can be accessed by dialing (877) 660-6853 or (201) 612-7415 and using the Access ID: 13744837.
About Volato
Volato (NYSE American: SOAR) is a leader in private aviation, redefining luxury air travel through modern, efficient, and customer-designed solutions. Volato provides a fresh approach to fractional ownership, aircraft management, jet card, deposit and charter programs, all powered by advanced, proprietary mission control technology. Volato's fractional programs uniquely offer flexible hours and a revenue share for owners across the world’s largest fleet of HondaJets, which are optimized for missions of up to four passengers. For more information visit www.flyvolato.com.
All Volato Part 135 charter flights are operated by its DOT/FAA-authorized air carrier subsidiary (G C Aviation, Inc. d/b/a Volato) or by an approved vendor air carrier.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "goal," "could" or "may" or other similar expressions. Forward-looking statements provide management's or the Board’s current expectations or predictions of future conditions, events, or results. All statements that address operating performance, events, or developments that may occur in the future are forward-looking statements, including statements regarding the challenges associated with executing our growth strategy, including expected deliveries of aircraft and related sales, and developing, marketing and consistently delivering high-quality services that meet customer expectations. All forward-looking statements speak only as of the date they are made and reflect the Company’s good faith beliefs, assumptions, and expectations, but they are not guarantees of future performance or events. Furthermore, Volato disclaims any obligation to publicly update or revise any forward-looking statement, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to, a variety of economic, competitive, and regulatory factors, many of which are beyond Volato’s control, that are described in Volato’s periodic reports filed with the SEC including its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2023, and other factors that Volato may describe from time to time in other filings with the SEC. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.
VOLATO GROUP, INC. CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except par value amounts) |
|||
|
December 31, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash |
|
|
|
Accounts receivable, net |
2,990 |
|
1,880 |
Deposits |
25,125 |
|
833 |
Prepaid expenses and other current assets |
3,897 |
|
2,211 |
Total current assets |
46,498 |
|
10,701 |
|
|
|
|
Property and equipment, net |
846 |
|
348 |
Operating lease, right-of-use assets |
1,278 |
|
1,574 |
Equity-method investment |
154 |
|
1,159 |
Deposits |
15,691 |
|
12,123 |
Forward purchase agreement |
2,982 |
|
— |
Restricted cash |
2,237 |
|
2,102 |
Intangibles, net |
1,391 |
|
1,615 |
Goodwill |
635 |
|
635 |
Total assets |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued liabilities |
|
|
|
Loan from related party |
1,000 |
|
5,150 |
Convertible notes, net |
— |
|
18,844 |
Operating lease liability |
326 |
|
283 |
Merger transaction costs payable in shares |
4,250 |
|
— |
Credit facility and other loans |
19,340 |
|
57 |
Customer deposits and deferred revenue |
12,857 |
|
2,163 |
Total current liabilities |
47,637 |
|
30,160 |
|
|
|
|
Deferred income tax liability |
305 |
|
305 |
Operating lease liability, non-current |
965 |
|
1,291 |
Credit facility, non-current |
8,054 |
|
4,170 |
Total liabilities |
56,961 |
|
35,926 |
|
|
|
|
Shareholders’ equity (deficit): |
|
|
|
Common Stock Class A, |
3 |
|
1 |
Additional paid-in capital |
78,410 |
|
5,185 |
Stock subscriptions receivable |
— |
|
(15) |
Accumulated deficit |
(63,662) |
|
(10,840) |
Total shareholders’ equity (deficit) attributable to Volato Group, Inc. |
14,751 |
|
(5,669) |
Total shareholders’ equity (deficit) |
14,751 |
|
(5,669) |
Total liabilities and shareholders’ equity (deficit) |
71,712 |
|
|
VOLATO GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share data) |
|||
|
For the Years Ended
|
||
|
2023 |
|
2022 |
Revenue |
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
Cost of revenue |
82,025 |
|
94,280 |
Selling, general and administrative |
28,822 |
|
11,611 |
Total costs and expenses |
110,847 |
|
105,891 |
|
|
|
|
Loss from operations |
(37,509) |
|
(9,185) |
|
|
|
|
Other income (expenses): |
|
|
|
Gain from deconsolidation of investments |
— |
|
581 |
Gain from sale of consolidated entity |
387 |
|
— |
Gain from sale of equity-method investment |
883 |
|
— |
Other income |
180 |
|
15 |
Loss from change in fair value forward purchase agreement |
(13,403) |
|
— |
Interest expense, net |
(3,358) |
|
(866) |
Other expenses |
(15,311) |
|
(270) |
|
|
|
|
Loss before provision for income taxes |
(52,820) |
|
(9,455) |
Provision for incomes taxes (benefit) |
2 |
|
(55) |
Net Loss before non-controlling interest |
(52,822) |
|
(9,400) |
Less: Net Loss attributable to non-controlling interest |
— |
|
(33) |
Net Loss attributable to Volato Group, Inc. |
|
|
|
|
|
|
|
Basic and Diluted net loss per share |
|
|
|
|
|
|
|
Weighted average common share outstanding: |
|
|
|
Basic and diluted |
15,245,004 |
|
11,268,879 |
VOLATO GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) |
|||
|
For the Years ended
|
||
|
2023 |
|
2022 |
Operating activities: |
|
|
|
Net Loss |
(52,822) |
|
(9,367) |
Adjustments to reconcile net loss to cash used in operating activities: |
|
|
|
Depreciation and amortization expense |
200 |
|
162 |
Stock compensation expense |
82 |
|
17 |
Fair value of common stock issued to employees |
94 |
|
— |
Gain from sale of equity-method investments |
(883) |
|
(581) |
Gain from sale of consolidated entity |
(387) |
|
— |
Gain (loss) from equity-method investments |
(22) |
|
45 |
Deferred income tax benefit |
|
|
(80) |
Amortization right-of-use asset |
296 |
|
— |
Amortization of debt discount |
183 |
|
42 |
Change in fair value forward purchase agreement |
13,403 |
|
— |
Changes in assets and liabilities: |
|
|
|
Accounts receivable |
(1,111) |
|
(2,223) |
Prepaid and other current assets |
(1,642) |
|
(1,586) |
Deposits |
(3,858) |
|
(11,399) |
Account payable and accrued liabilities |
5,662 |
|
2,217 |
Operating lease liability |
(283) |
|
— |
Customers’ deposits and deferred revenue |
10,694 |
|
1,321 |
Net cash used in operating activities |
(30,394) |
|
(21,432) |
Investing activities: |
|
|
|
Cash payment for property and equipment |
(637) |
|
(259) |
Proceeds from sale of interest in equity-method investment |
4,235 |
|
6,575 |
Payment for acquisition of GCA |
— |
|
(1,850) |
Payment for the purchase of equity-method investments |
(2,328) |
|
— |
Proceeds from the sale of consolidated entity |
506 |
|
— |
Cash obtained from acquisition of GCA |
— |
|
679 |
Net cash provided by investing activities |
1,776 |
|
5,145 |
Financing activities: |
|
|
|
Proceeds from lines of credit |
1,000 |
|
4,950 |
Repayments of lines of credit |
— |
|
(5,800) |
Collection on subscription receivable |
15 |
|
35 |
Proceeds from issuance of convertible notes |
12,670 |
|
18,879 |
Purchase of forward purchase agreement |
(18,911) |
|
— |
Proceeds from forward purchase agreement |
2,525 |
|
— |
Proceeds from other loans |
— |
|
4,500 |
Repayment on loans |
(787) |
|
(6) |
Proceeds from business combination |
19,081 |
|
— |
Business combination closing costs |
(2,359) |
|
— |
Proceeds from the sale of preferred stock |
24,204 |
|
— |
Proceeds from exercise of stock options |
23 |
|
— |
Net cash provided by financing activities |
37,461 |
|
22,558 |
Net increase in cash |
8,843 |
|
6,271 |
Cash and restricted cash, beginning of year |
7,879 |
|
1,608 |
Cash and restricted cash, end of period |
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
Cash paid for interest |
|
|
|
Cash paid for income taxes |
— |
|
— |
Non-Cash Investing and Financing Activities: |
|
|
|
Credit facility for the aircraft deposits |
24,000 |
|
— |
Conversion of line of credit to convertible note with related party |
6,001 |
|
— |
Original debt discount |
230 |
|
— |
Conversion of Preferred stock to common stock class A |
62,565 |
|
— |
Merger transaction cost payable in stock |
4,250 |
|
— |
Liabilities assumed in merger transaction unpaid at 12/31/2023 |
1,722 |
|
— |
Initial recognition of right-of-use asset |
— |
|
1,612 |
Fair value adjustment to equity-method investment upon deconsolidation |
— |
|
34 |
Acquisition of vehicle – direct finance |
— |
|
63 |
Adjusted EBITDA
We calculate Adjusted EBITDA as net loss adjusted for (i) interest expense, net, (ii) provision for income taxes (benefit) (iii) depreciation and amortization, (iv) equity-based compensation expense, (v) acquisition, integration, and capital raise related expenses, and (v) other items not indicative of our ongoing operating performance. We include Adjusted EBITDA as a supplemental measure for assessing operating performance.
The following tables reconcile Adjusted EBITDA to net loss, which is the most directly comparable GAAP measure (in thousands):
|
Year Ended December 31, |
||
Adjusted EBITDA |
2023 |
|
2022 |
Net loss |
|
|
|
Interest expense |
3,358 |
|
866 |
Provision for income tax benefit (benefit) |
2 |
|
(55) |
Loss from change in fair value of forward purchase agreement |
13,403 |
|
— |
Depreciation and amortization |
200 |
|
162 |
Equity-based compensation expense |
82 |
|
17 |
Net loss attributable to non-controlling interest |
— |
|
(33) |
Gain from deconsolidation of investments |
— |
|
(581) |
Gain from sale of consolidated entity |
(387) |
|
— |
Gain from sale of equity-method investment |
(883) |
|
— |
Other income |
(180) |
|
(15) |
Acquisition, integration, and capital raise related expenses(1) |
167 |
|
21 |
Other items not indicative of our ongoing operating performance(2) |
4,918 |
|
— |
Adjusted EBITDA |
|
|
|
(1) Represents non-capitalizable Business Combination expenses in 2023 and acquisition expenses associated with Gulf Coast Aviation in 2022. |
(2) Represents costs incurred related to business realignment. |
|
Fourth Quarter Ended
|
||
Adjusted EBITDA |
2023 |
|
2022 |
Net loss |
|
|
|
Interest expense |
931 |
|
413 |
Provision for income tax benefit (benefit) |
2 |
|
25 |
Loss from change in fair value of forward purchase agreement |
13,403 |
|
— |
Depreciation and amortization |
24 |
|
41 |
Equity-based compensation expense |
19 |
|
7 |
Net loss attributable to non-controlling interest |
— |
|
(33) |
Other income |
(22) |
|
53 |
Acquisition, integration, and capital raise related expenses(1) |
106 |
|
— |
Other items not indicative of our ongoing operating performance(2) |
1,061 |
|
— |
Adjusted EBITDA |
|
|
|
(1) Represents non-capitalizable Business Combination expenses in 2023. |
(2) Represents costs incurred related to business realignment. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240325873030/en/
For Media:
media@flyvolato.com
For Investors:
investors@flyvolato.com
Source: Volato Group, Inc.
FAQ
What was Volato Group, Inc.'s (SOAR) total revenue for FY 2023?
How many new aircraft does Volato expect to deliver in FY 2024?
What was the net loss for Volato Group, Inc. in FY 2023?
What new programs did Volato launch in 2023?
What was the key financial metric that improved in 2023 for Volato Group, Inc.?
How did the size of Volato's floating fleet change in 2023?
What was the balance of cash and cash equivalents for Volato at the end of Q4 2023?
