Q4 2023 Blade Air Mobility Inc Earnings Call

Participants

Lee Gold; IR; Blade Air Mobility Inc

Rob Wiesenthal; CEO and Director; Blade Air Mobility Inc

Will Heyburn; CFO and Head of Corporate Development; Blade Air Mobility Inc

Jason Helfstein; Analyst; Oppenheimer & Co., Inc.

Bill Peterson; Analyst; JPMorgan Chase & Co.

Edison Yu; Analyst; Deutsche Bank

Presentation

Operator

Ladies and gentlemen, thank you for standing by. Welcome to Blade Air Mobility fiscal fourth-quarter 2023 earnings call. (Operator Instructions) As a reminder, this call is being recorded.
I would like now to turn the conference over to Mr. Lee Gold, Investor Relations. Please go ahead.

Lee Gold

Thanks and good morning. Thank you for standing by, and welcome to the Blade Air Mobility conference call and webcast for the quarter ended December 31, 2023. We appreciate everyone joining us today.
Before we get started, I would like to remind you of the company's forward-looking statement and Safe Harbor language. Statements made in this conference call that are not historical facts including statements about future time periods may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties, and actual future results may differ materially from those expressed or implied by the forward-looking statements. We refer you to our SEC filings including our annual report on Form 10-K filed with the SEC for a more detailed discussion of the risk factors that could cause these differences.
Any forward-looking statements provided during this conference call are made only as of the date of this call. As stated in our SEC filings, Blade disclaims any intent or obligation to update or revise these forward-looking statements except as required by law.
During today's call, we will also discuss certain non-GAAP financial measures, which we believe may be useful in evaluating our financial performance. A reconciliation of the most directly historical comparable consolidated GAAP financial measures to those historical non-GAAP financial measures is provided in our earnings press release and our investor presentation. Our press release, investor presentation, and our Form 10-Q and 10-K filings are available on the Investor Relations section of our website at ir.blade.com. These non-GAAP measures should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.
Hosting today's call are Rob Wiesenthal, Founder and Chief Executive Officer of Blade; and Will Heyburn, Chief Financial Officer. I will now turn the call over to Rob Wiesenthal. Rob?

Rob Wiesenthal

Thank you, Lee. Good morning, everyone. I am very pleased with our progress we made during 2023, another record year for Blade. Our financial trajectory is strong, sound, and now tangible. In 2023, our full-year revenue increased 54.1% versus the prior year to $225.2 million, while flight profit increased by 84%, as our intense focus on margin enhancement initiatives generated results yet again this quarter. This led to a $10.8 million improvement in adjusted EBITDA versus the prior-year period to negative $16.6 million for the full-year 2023.
I'm especially pleased to share that blade airport, our helicopter service between Manhattan and New York area airports, starting at one 95 per seat delivered positive flight profit, not just for Q3 and Q4, but also for the full year 2023, when we launched blade airport in 2021, we set up the unit economics to be profitable at just above two out of six seats sold per flight that we knew along the way that our growth and customer acquisition metrics were pointing in the right direction. The two year ramp-up process has required hard work from our operations team and patience from our investors.
I'd like to take a minute to thank our flyer experience, flyer relations operations and on the ground logistic teams and our ground transport partners at Mercedes-Benz USA for working so diligently to make this product a success. We look forward to continued growth this year and beyond. As we begin to transition to EVA electric vertical aircraft or a detail in the coming year.
On the operational front, we are excited to announce the acquisition of eight fixed-wing jet aircraft to support our continued rapid growth in medical, enabling lower cost service and improved availability for the hospitals we serve and improved unit economics for us. Our medical business has more than tripled since our acquisition of Trinity in 2021, presenting us with an opportunity to further leverage our scale through the purchase of a limited number of jet aircraft by purchasing aircraft that we already use exclusively and by maintaining the existing operator and crews, we are well positioned to capture incremental fixed cost leverage without the risk of building a new medical aircraft operation from the ground up.
We believe this change will further improve our competitive positioning without compromising the benefits of our asset-light model as the vast majority of our medical flights and nearly 100% of our passenger flights will continue to be serviced by our very select group of third party owned and operated aircraft in the U.S., Europe and Canada after this rewarding year of strong growth, slight profit margin expansion and cost structure improvements.
We are now confident to begin providing guidance to our investors for revenue and adjusted EBITDA for the year ending December 31st, 2024 and 2025. For the current year 2024, we expect to have positive adjusted EBITDA and for 2025 we expect adjusted EBITDA in the double digit millions. I'll let will provide additional details shortly. But first, I'd just like to emphasize that we do not take providing these public goals lightly, which is exactly why we waited to reach adequate scale in our medical and passenger businesses, which provided better forward visibility, enabling us to put a stake in the ground and achieving profitability.
Now I'll provide a few quick highlights from our fourth quarter ending December 31st, 2023, flight profit increased 65.7% to $9 million in the current quarter versus $5.4 million in the prior year period, well ahead of our expectations, driven by strong growth in our medical business and improved profitability across our US short distance, we're pleased to see fly profit growing significantly ahead of revenue, which increased 24.5% to 47.5 million in Q4 2023, I'll let will provide some additional details around our focus on flight profit maximization, but I'm happy to report that in medical, our increased use of dedicated aircraft and own ground vehicles have helped us lower cost for our hospital customers while increasing average flight profit per trip.
A win-win for this important business segment, starting a passenger short business delivered another quarter of significant growth with revenue in Q4 2023, up 14% versus the prior year period, driven by improvements in blade airport, Europe and Canada. As mentioned previously, we are especially pleased that blade airport alone delivered 40% plus year over year revenue growth in addition to positive flight contribution for the second quarter in a row, our growth across passenger coupled with continued improved profitability in blade airport contributed to a 1.1 million increase in passengers segment adjusted EBITDA to negative $2.6 million in Q4 2023.
In Medical revenue, Q4 2023 increased 48% versus the prior year period, driven by new hospital wins, business expansion with existing hospitals and strong end market growth as a reminder, this is 100% organic growth as we completed the Trinity acquisition in 2021. Medical segment adjusted EBITDA increased 57.8% to 2.5 million in Q4 2023, demonstrating the strong operating leverage of this business. As expected, our new tops organ placement service launch in December as planned, and I am very pleased with the initial progress our team has made with the Teamplate customer NYU Langone. We're staying focused on providing great service. It's early days of this exciting new business line but we'll have a lot more to share on our growth plans in the coming months.
These profitability improvements in both segments, coupled with a $0.7 million year-over-year decrease in our adjusted unallocated corporate expenses led to a $2.7 million improvement in adjusted EBITDA versus the prior year period to negative $5.2 million in Q4 2023. Adjusted EBITDA improved as a percentage of revenues to negative 11.1% in Q4 2023 from negative 20.9% in Q4 2022. This proves the operating leverage we have enabling us to dramatically grow blade without adding significant overhead. I'll let will provide more details around Q4, but I will say that despite this being a seasonally light quarter for Blade. I am very pleased with our success on continued cost structure improvements and significant expansion to our dedicated aircraft fleet, highlighted by our acquisition of a jet aircraft for Oregon transportation and with $166.1 million in cash and short-term investments available to us, we believe blade is in the best possible position to drive growth both organically and by acquisition.
With that, I'll turn the call over to Will.

Will Heyburn

Thank you, Rob. Before we dive in, I'd like to remind everyone that we manage our business primarily based on slight profit rather than revenue, which can be influenced by a number of factors like fuel costs and landing fees, which we largely pass through charter market pricing, aircraft repositioning and mix shifts between air and ground and our medical business.
Recently, we've made significant progress transitioning more and more of our medical flights to dedicated aircraft that provide us with fixed cost leverage as we grow and are strategically based near our hospital customers. This has enabled us to improve our flight profit dollars per trip while reducing costs for our hospital customers and more importantly, increasing availability with shorter call-out times, which can lead to better patient outcomes when paired with our growing fleet of medical vehicles and new organ placement offerings.
We believe we built the most cost effective and reliable end to end organ logistics platform in the United States. That's why even though we saw a slight sequential decrease in medical revenues from Q3 to Q4, medical flight profit increased sequentially over the same period. This shows us that our strategy is working. At the same time we improved our passenger flight profit margins by five percentage points in Q4 2024 versus the prior year, demonstrating our path of full year profitability in the passenger segment, which we expect in 2025.
I'll now walk through a few highlights from our business segments in the fourth quarter will start with medical, where revenue increased 48% to 32 million in the fourth quarter of 2023 versus 21.6 million in the comparable 2022 period. Approximately 45% of this quarter's growth was driven by the addition of new customers with the remainder driven by growth in existing clients as well as strong overall market growth industry-wide, we continue to see longer distance trips versus the prior year period as transplant centers fly farther to enable more transplants, resulting in more flight hours and increasing the revenue opportunities for Blade medical revenue was at the lower end of our expectations this quarter compared to Q3 2023.
We saw a slightly higher percentage of Oregon transports traveling ground only which we view as the typical ebb and flow while our increased use of dedicated aircraft helped reduce repositioning for our hospital customers. Use of dedicated aircraft generally will slightly decrease flight hours and revenue per air trip, while flight profit per aircraft will increase.
As discussed earlier, we're keenly focused on slight profit performance, which exceeded our expectations. On last quarter's call, we guided towards medical flight margins in the 18% to 19% range for Q4 2023, with continued steady improvement toward 20% plus in the future. I'm happy to report that Q4 2023 medical flight margin exceeded expectations at 20.1%, a four percentage point improvement year over year and a two percentage point sequential improvement versus Q3 2023. Our faster than planned adoption of dedicated aircraft and owned ground vehicles allowed us to achieve this important milestone, more swiftly than originally anticipated.
Medical segment profit was 6.4 million in the current quarter, an increase of 2.9 million or 81% versus 3.6 million in the comparable 2022 period. Medical segment adjusted EBITDA was up 58% to 2.5 million in the fourth quarter of 2023 versus 1.6 million in the comparable 2022 period.
Looking forward in medical, we continue to expect single digit percentage sequential revenue growth in the coming quarters with slight margins above 20% for the entirety of 2024 and gradual improvements towards 25% plus by the end of the year, driven by our new aircraft supply arrangements. Q4 2023 medical SG&A was a little heavier than we expected, given start-up costs associated with tops and some end-of-year commission catch-up driven by great performance.
We're expecting slightly lower medical SG&A in Q1 sequentially, followed by low single digit sequential growth as we ramp up TOPS and logistics staff. As Rob previously mentioned, we're excited to announce the acquisition of eight Hawker 800 aircraft to bolster our medical operations and our experienced the Hawker platform has longer range and lower cost with more cargo capacity than other aircraft utilized by our competitors. This new arrangement results in both lower cost for our customers and higher margins for Blade based on our average utilization of these aircraft in 2023, we should see a five to 10 percentage point flight profit margin uplift for Flex utilizing these owned aircraft, which will help us to achieve our goal of 25% plus flight profit margins in medical over the coming quarters.
We recently signed a purchase agreement and expect to start seeing improved margins during the month of March. I'd like to emphasize that these specific aircraft are, among our most highly utilized are under capacity purchase agreements today and are strategically positioned in areas with significant demand from overlapping customers. Going forward, we will continue to assess aircraft acquisitions only in areas where we are already servicing significant customer demand.
We remain committed to our asset-light model and expect the significant majority of our flying to remain with third party owned and operated aircraft. For example, the specific owned aircraft discussed today are expected to represent only about 10% of blades overall flying activity in 2024. The opportunity for further margin expansion is apparent. The 21 million acquisition cost will be funded through 11.7 million in cash and $9.3 million in existing deposits with the operator.
Turning to our passenger business in short distance, Q4 is always a seasonally light quarter, but we're pleased that revenue was up 14% to 10.7 million in the fourth quarter of 2023 versus 9.4 million in the comparable 2022 period, driven by an increase in seat volume and stronger pricing in our by the Cedar port product and increased revenue in Europe and Canada. Blade Europe continued to be a positive contributor, slight profit this quarter and was slight profit positive for the full year 2023, meaning it covered all costs related to air and for terminal ground transportation for our flyers and Jet and other revenues decreased 32.4% to 4.8 million in the current quarter versus 7.1 million in the prior year period, driven primarily by our decision to discontinue blade one, our seasonal bind to seat jet service between New York and South Florida, which was a $1.7 million impact and softness in jet charter fastener segment flight profit increased by 0.7 million or 37% to 2.6 million in the fourth quarter of 2023 from 1.9 million in the same period of 2022. This increase was attributable primarily to improved pricing and utilization and our by the seat blade airport product. All of this led to a 1.1 million improvement in passenger segment adjusted EBITDA to negative 2.6 million in the fourth quarter of 2023 versus negative 3.8 million in the prior year period. Despite the solid growth this quarter, Europe is performing below our original acquisition expectations. As such, we took a non-cash impairment charge on the intangible assets associated with our asset-light aircraft operator, agreement despite this write-down of 20.8 million.
Next to the U.S. Europe is the largest urban air mobility market globally and is poised to be an early adopter of electric vertical aircraft. This was a strategic acquisition that enjoys exclusive infrastructure exclusivity for flying between NICE and Monaco on a by the seat basis and a devoted customer base that secures our leading position as we transition to EBITDA. We're making great progress with our newly installed management team and expect improvement in both revenue and profitability in 2024.
On the corporate cost side, yet again, we were able to reduce our adjusted unallocated corporate expenses shrinking 11.3% in Q4 2023 versus the prior year period, which when coupled with our flight profit growth across medical and passenger led to a CAD2.7 million improvement in adjusted EBITDA versus the prior year period to negative 5.2 million in Q4 2023.
Turning to our guidance, we expect to be profitable on an adjusted EBITDA basis for the full year 2024 and to achieve double digit adjusted EBITDA in 2025. To get there, we'll continue to employ the tools that led to our significant adjusted EBITDA improvement over the past year. Adjusted unallocated corporate expenses sustain near the average of recent quarters, leading to low to mid single digit million of savings in the current year 2024 versus 2023. In passenger, we expect a two to three point improvement in flight profit margin as blade airport builds on its first flight profit positive year to become a more material contributor to overall slight profit at the same time, we built enough scale and brand awareness to reduce our US marketing. We've also realized cost savings from the finalization of our European integration.
Together, we expect these items to have a low to mid digit positive impact on adjusted EBITDA in 2024, with passenger segment EBITDA turning positive to low single digit millions in 2025 and medical flight profit margin should continue to expand towards 25% plus by the end of 2024, driven by increased use of dedicated aircraft and the increased fixed cost leverage. We're expecting from our recently acquired aircraft. This alone would result in mid to high single digit adjusted EBITDA improvement in 2024 based on just 2023 revenues. New customer growth could push that into the higher end of the range and would come with some additional SG&A, though improvements will come gradually throughout 2024. We expect 25% plus flight profit margins in Medical for the full year 2025. We expect that this margin expansion, when coupled with just moderate growth in medical and passenger, will get us to our adjusted EBITDA goal for 2025 and set us up for continued double digit adjusted EBITDA growth into the future.
With respect to our balance sheet, given our improving financial performance. We expect that the majority of our $166 million in cash and short-term securities as of the end of fourth quarter of 2023 will be utilized for tactical acquisitions in our Medical segment or further accretive investments in our aircraft supply base. The best is yet to come, and we're excited about the years ahead.
With that, I'll turn it back over to Rob.

Rob Wiesenthal

Thank you, Will. In short, we are proud of the accomplishments of our team to deliver outstanding fourth-quarter results, and we look forward to building on this momentum, achieving adjusted EBITDA profitability this year and significant growth in this important metric in 2025 and beyond.
I'll now turn it over to Lee for questions.

Lee Gold

Thanks, Rob. We'll start by taking questions from the analyst community, and we'll follow with a few questions from the Say Q&A platform. I'll now turn it over to the operator for the analyst questions.

Question and Answer Session

Operator

(Operator Instructions) Jason Helfstein, Oppenheimer.

Jason Helfstein

Hi, this is Steve on for Jason. So just two questions from us. Number one, we were just wondering if you could give some views on 1Q? And secondly, if you could just clarify what you mean when you say positive adjusted EBITDA in 24?

Will Heyburn

As you know, first quarter is seasonally light quarter as well. So it'll look a lot like Q4, I would expect kind of 10 ish percent growth year over year, which would put you in that in the high 40s on revenue and then EBITDA kind of in a similar area to what you see for Q4 when we say that we're going to be profitable on an adjusted EBITDA basis and 2024, we mean more than zero and we hope to exceed our own expectations there.

Operator

Bill Peterson, JP Morgan.

Bill Peterson

Good morning and thanks for taking the questions. And thanks for providing the 24 and 25 targets. On the on the targets, the 24 outlook implies kind of a high single digit revenue growth to mid point and with a fairly tight range. So I guess what's complicated what's contemplated between the low end and the high end on that? And then for 25, it actually implies an acceleration. So what's driving that? If you can kind of maybe break that out between passenger and meta mobility and provide some guideposts on that, that would be helpful.

Will Heyburn

Sure, Bill. So there's there's a little bit of noise in the year-over-year comp between 2023 and 2024. Because as you know, we discontinued the blade one seasonal jet product between New York and South Florida. So that was kind of mid to high single digit million dollars of revenue. So you're finding that a little bit, which is why on a year over year you see less in terms of the overall headline growth rate. That's probably the biggest factor, coupled with just generally, we're seeing slightly softer JEFF charter there.
And then remind me, the second half of your question was like the low end and the high end of the range.

Bill Peterson

It seems like a fairly tight range. But then I think you already answered the second part, about 25 implies acceleration. I think that's just, I guess, normalized growth.

Will Heyburn

But yes, the biggest the biggest drivers in the range, our new customer acquisition on the medical side, and I think where we are in the passenger business and what you're seeing in the numbers, especially this quarter is you're seeing slight profit grow really strongly, and that's a result of putting more people on the same number of flights, particularly in the blade airport product. So we get great incremental margins as we sell a seat on a flight that's already going as you're well aware. And so on the passenger side, the story is really about improving that flight profit on the medical side, we've got a big new customer pipeline, both on the top side and on the logistics side. And so the range really represents when do we think we'll win those new customers and how many of them what we get.

Rob Wiesenthal

It's Rob. I think I'd also add on the passenger side, we are seeing strong growth in terms of our European needs to Monaco route, which as you know, we have before blade started the largest part route in the world to provide the seat business for vertical transport for customers, competitor push ground. And as we restarted that line, what we call the lines of these countries, the growth has been we've been very pleased with the growth.
Yes.

Bill Peterson

Thanks, Rob. And well, and the second question of excuse me, I guess a few questions around the acquisition of the Hawker 800 aircraft. So it seems like these were used and are used for medical. So I guess what is buying these aircraft? How does that benefit blade versus just I guess it seems like they're used for medical anyway. So why do you need to buy them. What is the timing? It sounds like March of oh eight going to be acquired in March. And then I guess how much do these aircraft then address the current medical business, I guess just so we can kind of figure out the margin uplift you I know you had alluded to.

Rob Wiesenthal

Yeah. So a couple of things at play there, Bill. First, we've just grown so quickly in medical, we've actually kind of outgrown the balance sheets of some of our operators. And so we were supporting the growth at our operators with some deposits. You'll notice that almost half of the acquisition of these aircraft is funded by deposits. We already have down with the operator. So we kind of got to a point where if we're putting deposits down of this size, we might as well on the aircraft. And then the reason that we want to own the aircraft is because it helps us benefit from more pass through economics.
So what goes back to getting those economies of scale and that operating leverage as we fly more of our agreements right now do allow us to pay a little bit less once we meet that full year guarantee of flight hours, but you're not getting the continued cost leverage as you fly more above that now for these aircraft. And we're only focused on doing things like this in areas where we've got multiple contracts with overlapping centers, lots of demand more than we could possibly handle, but just suggest that we own. In those cases, we'll capture a lot more of the fixed cost leverage when we own the aircraft versus the capacity purchase agreement where you pay X for the first, why hours a year and then you pay X minus 15% afterwards, Bill just went live with a wave.
We looked at it here on the medical side. When you're using sweating the assets, so to speak, using 100% of the time you don't need kind of that middle man, even between, you know, chewing up that margin.
Okay.
And so as long as you're getting the hours right, and when we do asset light, we have other people that whether it's news, gathering tours on the helicopter side on the medical side, it's a 24 seven business. You're sweating the assets and the third point of leaving these kind of deposits, if you own it to capture that margin and also you have more flexibility for the customer. We can position aircraft right by these hospitals, which means greater flight margin profit dollars for us and faster accessibility for our customers and a better deal. Frankly, it's a it's a win-win as well set.

Bill Peterson

Just on the timing.

Will Heyburn

And I guess how much of the medical business you can address with us is still going to be a really small part of our business.

Rob Wiesenthal

We think that roughly 10% of our flying in 2024 should be on these aircraft. We're going to remain asset-light the vast majority of our flying is going to be with aircraft that are third party owned and operated. But if we see situations where it's extremely accretive on a cash flow basis to own aircraft. Tactically, we're economic animals and we'll do that.

Operator

(Operator Instructions) Edison Yu, Deutsche Bank.

Edison Yu

Yes, thanks for taking our questions and congrats on the quarter. You have quite a bit of cash. As you as you mentioned, it seems like a decent amount could be deployed on some type of acquisition did you mean that in terms of adding more aircraft or kind of companies or both?

Rob Wiesenthal

It's both Edison. I think, as Will said, no, when we the ability to strategically place assets in terms of aircraft or a hub with our hospitals and have had them have frankly, no, really good solid deals and us to enjoy better economics, something we'll continue to explore. But again, going to be opportunistic. We are extremely focused on tactical M&A in the medical area, but things that, you know, basically are along the chain in terms of what we see with our business and leverage the relationships we have with the hospitals. Obviously, what we've started organically from that site with the TOP program is a good example of that. But there are a lot of ancillary businesses that can leverage our relationships and our core competencies, both in working with hospitals and in transportation overall that so we still see a fair amount of opportunities to deploy that capital.

Edison Yu

Understood. And then separately, I know you mentioned Europe was was performing a bit below and you took that charge. I guess how are we feeling about that in 24, 25? Are we going to see quite a bit improvement? What went out? What do we sort of have I'm looking at it going going forward?
Yes.

Rob Wiesenthal

I think look, I know what you really saw here with Europe.
We do have delayed integration. We now have a brand-new management team in place, both the CEO and the Chief Operating Officer.
So that was a little bit late and going.
And right now, as I said, we're seeing really strong performance in terms of the B2C business between NICE and Monaco. And we expect growth in for this year and for next year in that business and improve profitability.
So I think we feel good about the business.
Obviously, we wish that it started earlier, but this remains again before blade is the number one market in the world. We had a dominant market share here. We continue to have a dominant market share in almost all of these routes. So I think we're I think we feel like we're in a pretty good place when it comes to Europe and that just took a little bit longer than we expected.
Great.
Thank you.

Operator

I show no further questions at this time. This concludes the analyst Q&A. I would now like to turn the call back over to Lee for additional comments.

Lee Gold

No, thank you. As mentioned, we'll be taking questions from our side Q&A platform. The first question is regarding the current lease agreements in New York City? And can we specify how many more years on these landing zone agreements? Also, what is stopping competition from taking these landing zones in place?

Rob Wiesenthal

Thanks, Lee. I'll take that question again, Rob Wiesenthal of New York City is without question the most important market in the US for vertical transportation, especially when you think about our blade airport products with 28 million people going by car between the New York City airports and then half a year is a big market opportunity. The west side, which is clearly our flagship, it's so large that we have both have a departures and arrivals lounge. And we're right next to Hudson Yards were 50,000 people live work and recreate every day. That is a deal that is booked exclusive on a by the sea basis and are up at least there is coterminous with the operator who's been there for over 40 years and has no expectations of I'm leaving on the east side, say almost the same situation where we are coterminous with the operator, who's been operating there for dozens of years. And before that, on a 60th Street house.
We have a terrific relationship with Atlantic.
And also in that specific location, there literally is actually no footprint left in order to build any kind of building as basically the blade facility and general aviation, it gives us a competitive moat because at the end of the day, if you want to do that be in this business, whether it be with helicopters or EVA or you may call it in detail, you have to have a place to process passengers, get them set and move those aircraft very, very quickly in two to five minute turns. You can't do it on the sidewalk. So we do believe that from our captive into infrastructure is critical to our strategy.

Lee Gold

The following question is another transplant company as Todd claimed 98 contracts with hospitals for these exclusive contracts and how many lost customers maybe half?

Will Heyburn

I'll take that one.
This is Will I we haven't lost any customer contracts?
I'm not not sure what the specific question is relating to. But and I will say there's a bunch of device companies out there that have the same customers as us, we both work with the same hospitals. And as far as we're concerned, they're doing a great thing that's increased the number of organs that are available for transplant. So it's great. And we're focused on our job that we do have long-term contracts with hospitals to perform, which is to handle all the air and ground logistics. And we think we do it better than anybody at the right price and but haven't lost any of those contract.

Lee Gold

An additional question about medical is how do you see competition in the middle mobility space like TransMedics, it's Rob's thinking.

Rob Wiesenthal

I'll let me take this one.
I think TransMedics has a terrific device in terms of herpes viruses. There are a lot of devices out there that can lengthen the time and an organ can be outside the body, both for our core business and heart liver and lung. And frankly, we recently did the work the longest trip ever from Boston to Alaska using a paragon X device. The ability to travel longer distance is a big part of why we're so excited and you're going to see so much growth in our Oregon trends in our Oregon transport business.
We are now the largest organ transfer transporter in the United States.
We continue to expect that we expect that to continue to happen and the more of the devices that are out there, the more excited we are and frankly, this is all we do. We don't make devices. So we are focused on logistics and service and servicing our customer and making sure we get our doctors in Oregon safely and quickly and cost effectively to where they need to be.
I think that ability to focus on. One thing is great, but we're excited about these device companies, you know, really supercharging our business.

Lee Gold

Our last question is what are the operating costs of EVA? And how does this compare with blades, traditional helicopters? Do you expect to see a complete replacement of helicopters by EVA in the future?

Rob Wiesenthal

So great question.
The common question, let me, let me take a stab at it. So look, at the end of the day, it's all about vertical transportation in a way that is cost competitive with ground right now. With since blade is one of ones and doesn't have competition really in the end of the by the seat market, we can you know, we're competitive at Ground and frankly, in New York, where we started when 95 for an airport cede $95 of the purchase of an airport pass, we are competitive when it comes to the operating costs in the early years, we do believe the operating costs of electric vertical aircraft will be pretty much about the same, maybe slightly less.
And it will take some time before those costs go down, but overall, the costs will go down. But the big opportunity for our investors is the fact that because they're quite an emission-free, there will be more places to land, not really so much happening. Cost focus on the fact that the great unlock is that they're more places like every pair of landing zones is a brand new business for Blade right now, our strategy is to capture as many preexisting landing zones as we thought that we can have our customers, the routes and as more of these landing zones open up what these new aircraft are available, the bigger business becomes it will be a cohabitation base. There's a lot of the aircraft can take six people like fly our aircraft can or can't take 12m pounds like ours can some don't even have air-conditioning. It can take a while, but expect the cohabitation basically, we have a portfolio of different vertically or transportation options, both including EVAs and conventional helicopters.

Lee Gold

This concludes our question and answer session. At this time, I'll turn the call back to Rob.

Rob Wiesenthal

Thank you, Lee. I can't overemphasize how proud I am of -- This has been a long road since we've gone public to be in the position that we now have the confidence to give guidance to our investors of our first year as a public company of profitability on adjusted EBITDA basis for this year and double-digit profitability in terms of millions of dollars for 2025. So we feel good about it. We cannot not take this lightly, as I said before, and we look forward to further encouraging news as we go forward. And I appreciate everyone on this call support.

Operator

Ladies and gentlemen, thank you for participating. This concludes today's program. You may now disconnect.