Eve Holding Inc (EVEX) Reports Increased R&D Expenses and Net Loss in Q3 2023
Eve Holding Inc (NYSE:EVEX) reports a net loss of $31.2 million in Q3 2023, compared to $36.7 million in Q3 2022.
Research and Development (R&D) expenses doubled year-over-year to $28.6 million in Q3 2023.
Total liquidity, including undrawn credit lines, stands at $342.5 million as of Q3 2023.
Eve continues to advance its eVTOL development program, with key supplier selections and prototype assembly underway.
On November 7, 2023, Eve Holding Inc (NYSE:EVEX), a pre-operational company dedicated to the development of an electric Vertical Takeoff and Landing (eVTOL) aircraft, released its financial results for the third quarter of 2023. The company reported a net loss of $31.2 million for the quarter, which is an improvement from the $36.7 million loss reported in the same period last year. However, when excluding non-recurring warrant-related expenses from the previous year, the net loss increased from $19.3 million in Q3 2022 to $31.2 million in Q3 2023, driven by higher R&D and Selling, General & Administrative (SG&A) expenses.
Income Statement and Cash Flow Analysis
R&D expenses for the quarter reached $28.6 million, a significant increase from $14.3 million in Q3 2022, primarily due to the Master Service Agreement (MSA) with Embraer for the eVTOL design development. SG&A expenses saw a slight increase from $4.9 million in Q3 2022 to $5.0 million in Q3 2023, attributed to the growth in direct employees performing critical corporate functions. Financial investment income and FX gains partially offset these expenses, contributing $4.4 million to the financials.
For the nine months ending September 30, 2023, R&D expenses totaled $72.0 million compared to $33.8 million in the same period of 2022, while SG&A expenses increased to $17.8 million from $12.4 million, excluding non-recurring expenses. Total cash consumption for Q3 2023 was $22.4 million, up from $17.3 million in Q3 2022, with the nine-month cash consumption reaching $70.2 million, compared to $39.1 million in the previous year.
Balance Sheet and Liquidity Position
As of the end of Q3 2023, Eve's cash, cash equivalents, financial investments, and related-party loan with Embraer totaled $256.4 million, a decrease of $12.7 million over the quarter. This reflects the withdrawal of the first tranche of credit lines from Brazils National Development Bank (BNDES), which provided $11.7 million of the total available funds of $97.9 million. The company's total liquidity, including undrawn portions of the BNDES credit lines, is now at $342.5 million.
Strategic Developments and Outlook
Eve continues to make progress in its eVTOL development program, with the selection of primary suppliers for flight-critical components and the initiation of the first prototype assembly. The company maintains its plan to have the first full-scale prototype ready for a test campaign in 2024, with commercial deliveries expected to commence in 2026.
Partnerships and agreements, such as the Memorandum of Understanding (MOU) with DHL Supply Chain and the Letter of Intent with Moviation for Urban Air Traffic Management (Urban ATM) solutions in South Korea, highlight Eve's commitment to advancing the UAM ecosystem. The company's order pipeline totals 2,850 units with a backlog value of approximately $8.6 billion, demonstrating strong market interest in its eVTOL aircraft.
Eve anticipates a total cash consumption between $130 and $150 million in 2023, primarily for the eVTOL development program and SG&A expenses, with expectations leaning towards the lower end of the range. The company remains focused on cost control and capital efficiency as it progresses through the development phase.
In conclusion, while Eve Holding Inc (NYSE:EVEX) faces increased expenses associated with its ambitious eVTOL development program, the company's strategic partnerships, solid liquidity position, and advancing prototype development signal a steadfast commitment to becoming a key player in the emerging Urban Air Mobility market.
For more detailed information, investors and interested parties are encouraged to visit Eve's Investor Relations website.
Explore the complete 8-K earnings release (here) from Eve Holding Inc for further details.
This article first appeared on GuruFocus.
