Thanks and good afternoon. Thank you for standing by and welcome to the Blade Air Mobility conference call and webcast for the quarter ended September 30, 2022. 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 non-GAAP financial measures, which we believe may be useful in evaluating our financial performance. A reconciliation of the most directly comparable GAAP financial measures to those non-GAAP financial measures is provided in our earnings release, which will also be available on our website. These non-GAAP measures should not be considered in isolation or a substitute for financial results prepared in accordance with GAAP. Hosting today's conference 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?
Thank you, Robbie. Good afternoon, everyone. I'd like to thank you for your interest in Blade and welcome you to our earnings call for the third quarter ended September 30, 2022. Our financial performance in the third quarter was once again well ahead of our expectations. Revenue in the September quarter increased 125% to $45.7 million, versus $20.3 million in the comparable 2021 period, contributing to another record quarter for both revenue and flight profit, and establishing year-to-date revenue of $108 million for just the first nine months of the year. Importantly, on a pro forma basis, assuming the acquisitions of Trinity Air Medical, Blade Canada, and Blade Europe had closed before the comparable period last year, our organic revenue growth would have been approximately 60%.
This figure demonstrates that our strategy of aggregating the world's best use cases for urban air mobility, solely focused on businesses and new regions that are profitable with existing aircraft technology, continues to serve our company and our shareholders well. To that end, we closed our three European acquisitions on September 1, 2022, giving us a leading position in the largest helicopter market on the continent. Adding this formidable presence in Europe to our existing operations in the U.S., Canada, and India is a very important step in our expansion, and it cements our position as the largest operating urban air mobility company across three continents. We look forward to deploying our brand, technology, and our renowned customer service across these geographies to further accelerate our growth and fortify our global presence.
In addition to geographic expansion, we have also continued to diversify Blade's business across end markets, with nearly half of our $133 million in trailing twelve-month revenue now coming from organ transportation, or what we call Blade MediMobility. This division delivered another record quarter of revenues, and for those who are new to the Blade story, I want to take a moment to shed light on this very important business. Air organ transport is a large and growing market that is uncorrelated with the economic environment, is entirely B2B with multiyear contracts, has minimal marketing expenses, and most importantly, provides critical life-saving logistics to transplant recipients. Before Blade entered the market, many hospitals called on smaller mom-and-pop operators who often did not have the right aircraft for a given mission and did not have a 24/7 logistics team and robust technology as Blade does.
This added time, cost, and logistical risk in some cases forced transplant centers to forgo opportunities to recover organs needed by their patients. Blade entered the organ transportation market because we saw an opportunity to leverage the combined buying power of our entire customer base across our vast network of highly vetted aircraft operators, as well as our logistics and technology platform built over seven years for our passenger business, providing hospitals with better speed, pricing, and reliability in a way that few others can match. We doubled down this business last year with our acquisition of Trinity in September 2021, and the proof is apparent in our results. Today, not only are we the largest dedicated air transporter of human organs for transplant in the United States, but we believe we are the most flexible, reliable, and low-cost provider.
This cost advantage, combined with our expertise in logistics, customer service, and trusted brand, gives us confidence in our ability to continue to grow our market share from the high teens level today to eventually becoming the majority of the market. MediMobility is also a great fit for our transition strategy to next generation aircraft, as all trips include a last mile component currently operated by helicopter or ambulance. Given the urgency of the mission, we believe these last mile trips, particularly those where the organ is unaccompanied, will be the very first Blade missions to transition to electric flight, either using electric vertical aircraft, or what we call EVA, or drones.
However, the industry is not waiting and neither are we, as we continue to successfully grow our business using conventional aircraft every day. We ended the third quarter with a total of 67 hospital and organ procurement organization clients, up from less than 30 at the start of the year, and we look forward to rolling out our excellent service to even more customers in the months ahead. In short distance this quarter, we delivered exceptional performance benefiting from higher seat pricing and utilization, which was further boosted by our acquisitions in Canada and Europe. BLADE Airport, which connects travelers between Manhattan and New York area airports, continues to make progress towards profitability, and we remain encouraged by the sequential growth in volume and pricing that we are now experiencing.
October was our highest revenue month ever for airport, and last week we set a new weekly revenue record as well as a record number of flying passengers. All of this has led to significant growth in flight profit, which was up 108% versus the prior year period. At the same time, we're driving efficiency from our operating expenses. Total corporate expenses continue to decrease as a percentage of revenue, down to 43% this quarter versus 70% in the prior year period. On an adjusted basis, excluding non-cash and non-recurring items, corporate expense declined to 30% of revenue, demonstrating the strong leverage of our operations platform and our clear path to profitability. In addition to our financial success, we're making great progress on other strategic initiatives. We continue to build on our fantastic partnership with JetBlue.
Those of you who have flown JetBlue to or from New York City will have already noticed the initial rollout of our joint marketing program, including the ability to book your BLADE Airport transfer in-flight by scanning the QR code displayed on all JetBlue's seat back screens, or by using your TrueBlue frequent flyer points for Blade benefits provided by JetBlue. We look forward to a continued expansion of this important partnership with additional Blade benefits for JetBlue flyers coming soon. We have also expanded our partnership with Eve Air Mobility, Embraer's electric vertical aircraft company, conducting urban air mobility simulations in both Chicago and India. As part of the Eve Chicago experience in September, Blade enabled flyers to seamlessly commute between downtown Chicago and the suburbs of Illinois.
In India, our joint venture partners have entered into a non-binding agreement to acquire up to 200 Eve aircraft once they are certified for passenger flight in India. In the meantime, they are preparing to launch a three-month co-branded urban air mobility simulation using helicopters between Bangalore Airport and the Bangalore city center this month, turning an hour-long drive into just a minute long flight. These demonstrations, funded solely by Eve, show the potential for urban air mobility to significantly reduce commute times in new locations around the world and demonstrates Blade's importance to OEMs in developing the ecosystem for urban air mobility. We're excited to continue supporting our partners as they get closer to commercialization. In the US, planning continues for our electric vertical aircraft demonstration flight in the Greater New York City area with our partner BETA Technologies.
While we are currently targeting the December, this date could slide into the new year as we ensure the test aligns with BETA's ongoing flight test program with the U.S. Air Force. We look forward to sharing more details about the timing and location of this test flight in the coming weeks. Lastly, our President, Melissa Tomkiel, was appointed by Secretary of Transportation Pete Buttigieg to the FAA Advanced Aviation Advisory Committee. Melissa will provide an important and practical perspective for the FAA as they formulate future air mobility policy. In summary, I could not be happier with how well we are positioned for air mobility both today and in the future. With that, I'll turn the call over to Will.
Thank you, Rob. I'll walk through a few highlights from our business lines this quarter. In short distance, revenues were up 52% to $20.4 million in the September 2022 quarter versus $13.4 million in the comparable 2021 period. Growth was driven by higher seat pricing and utilization in the U.S. against a backdrop of continued strong demand throughout Q3, which is seasonally the largest for a U.S. short distance business. We also benefited from a one-month contribution from Blade Europe, which closed on September 1, 2022, our acquisition of Helijet's passenger routes in Vancouver, which closed on December 1, 2021, and growth in our BLADE Airport service, which relaunched in June 2021. A few quick highlights from specific short distance products.
In the New York Airport business, we saw another quarter of sequential passenger growth and revenue per seat growth in Q3, and this has continued so far in the fourth quarter. As Rob noted, we recently had our best revenue month ever in October. We've achieved revenue per seat growth both through new dynamic pricing as well as through the introduction of enhanced cancellation and flexibility options for our flyers. We've seen a great adoption rate for our higher priced fare classes, which are currently available only on Blade Airport. Given the great response, we plan to roll out these new options across our short distance portfolio over the coming months. Canada continues to recover more slowly than the U.S., and was approximately break even this quarter given low utilization.
We see a significant opportunity in Canada, both in terms of the impact of an ultimate recovery, as well as the opportunity to roll out new products and deploy our technology to improve customer acquisition. Helicopter charter is a particular focus for us in Canada. Our experience in other markets tells us that charter demand could represent 50%-100% of by-the-seat demand on the same routes. In Canada, charter volume is currently a single-digit percengtage of by-the-seat volume. As a result, we are launching new rotorcraft and fixed wing charter options, which will be available for instant purchase in the Blade app this month. We've made significant investments in globalization of our technology that will benefit Canada and Europe alike. Both markets will be on sale on our app this month, with significant customer-facing enhancements available in the coming weeks and months.
Turning now to MediMobility. Revenue increased 801% to $20.2 million in the September 2022 quarter versus $2.2 million in the comparable 2021 period. Revenue increased 17% sequentially in Q3 2022 versus Q2 2022. Growth was driven by the acquisition of new transplant center clients, robust growth with existing clients, and our acquisition of Trinity Air Medical. On a pro forma basis, assuming we had owned Trinity for the entire prior year quarter, organic revenue growth would have been approximately 174%, with roughly 1/3 driven by new customer acquisition and 2/3 driven by growth with existing clients. This quarter marks the one-year anniversary of our acquisition of Trinity Air Medical.
Last year around this time, we spoke about the mission our senior leadership at Trinity set for themselves: increase the number of organs that are available for transplant. Let's just say that the team has been very busy. By offering transplant sitters and organ procurement organizations better pricing, shorter trips, and more flexibility, they are able to attempt more organ recoveries, plain and simple. We're honored to play our small role in improving patient outcomes every day. With respect to growth expectations going forward, we continue to see a near-term opportunity to grow our market share, which we currently estimate in the high teens, to become the majority of what is currently a highly fragmented market. Of course, as we increase our scale, we don't expect triple-digit growth to continue forever.
However, we continue to maintain a robust new business pipeline and look forward to continued growth with new and existing clients alike. Turning to flight profit. Flight profit increased 108% to $9.3 million in the current quarter versus $4.5 million in the prior year period. Our ability to take pricing in excess of inflation in our U.S. short distance business, coupled with accelerating growth in MediMobility, resulted in record flight profit this quarter. Q3 is seasonally the largest for our U.S. short distance business, and we were pleased to see steady demand despite higher pricing and an uncertain macro picture, further demonstrating the resilience of our customer base.
Though flight margin of 20.3% decreased versus 22% in the prior year period, we don't believe the year-over-year comparison is meaningful given the enormous growth in our MediMobility organ transport business, which saw revenues increase 801% year-over-year and now represents 44% of total revenue this quarter versus just 11% in the prior year period. MediMobility organ transport tends to have lower flight margin versus our company average, but benefits from multi-year customer contracts, no utilization risk, limited marketing costs, and demand that is uncorrelated with the overall economic environment. In BLADE Airport, though we're encouraged by recent profitable weeks on key routes, we continued to operate below breakeven this quarter.
Absent the Blade Airport ramp up, we estimate that flight margin would have been approximately 150-200 basis points higher in the current quarter. Looking ahead to the fourth quarter, we expect flight margin of approximately 14%-15% as MediMobility comprises an even higher percentage of revenues in what is typically a seasonally lower quarter for our short distance business. Let's turn now to corporate expenses, which include software development, general administrative, and selling and marketing expenses. Corporate expenses fell to 43% of revenue this quarter, down from 70% in the prior year comparable period. This reduction in corporate expenses as a percentage of revenue demonstrates the operating leverage of our platform.
When adjusting for non-cash and non-recurring items, our adjusted corporate expense as a percentage of revenues declined to 30% of revenue this quarter, down from 37% in the prior year period. We will continue to look for opportunities to optimize our cost structure to drive further operating expense leverage in the future. As we look to the fourth quarter, we expect corporate expenses in the $18 million range, excluding any potential one-time expenses, with the increase relative to our prior expectation primarily attributable to the full quarter impact of our Europe acquisitions and faster than expected growth in our other businesses.
Adjusted EBITDA in the quarter was a loss of $4.5 million, compared to a loss of $3.2 million in the prior year period, but improved as a percentage of revenues to -9.9% in the current quarter from -15.5% in the prior year period. The increased loss versus the prior year period is primarily attributable to additional corporate and recurring expenses related to Blade's recent growth and expected future growth, partially offset by increased flight profit. With respect to our balance sheet, we continue to have zero debt and over $200 million in cash and short-term securities. This uniquely strong position will enable us to continue to be opportunistic in acquisitions and strategic initiatives without the need for raising additional capital.
In closing, our focus remains on prudent capital allocation and expense management while continuing to grow flight profit, paving a path to profitability for what is now the largest operating urban air mobility platform in the world. With that, I'll turn it back over to Rob for a few closing remarks.
Thank you, Will. In summary, we are very encouraged by our strong results and operational execution this quarter. While we continue to monitor the broader economic landscape, we are encouraged by the leading indicators that we track regarding travel demand, such as aggregate TSA passenger throughput recently exceeding 2019 levels and air travel demand among large corporate customers only recovering to 75%-80% of pre-pandemic levels, leaving plenty of additional room for recovery.
Additionally, we believe the flexibility the post-COVID era of hybrid work offers has fundamentally increased the demand for air travel, with workers now having the ability to make every weekend a long weekend and make every business trip have a leisure component as well. This positive outlook, combined with our continued share gains in air mobility, gives us confidence in our ability to deliver significant and profitable growth irrespective of shifts in the economic environment. With that, I'll turn it over to Robbie for questions.
Thanks, Rob. As a reminder, we will take questions from analysts and investors on this call today. Reporters should send inquiries to me directly. Operator, we're now ready for questions.
Certainly. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question will come from Jason Helfstein of Oppenheimer. Your line is open.
Hey, thanks for taking the question. I'll ask too. You know, give us a sense. You know, obviously, you're not giving formal guidance for next year, and you know, we all have to make our own sense on, kind of, the economic impact on the business. But you know, how should we think about the drivers of gross margin for next year and kind of like the puts and takes, what's in your control, what's not in your control? And then the second question, Will, you guys moved Jet out of kind of what used to be kind of the MediMobility, you know, like, segment into other. Are you gonna restate the historical kind of other line, and the new MediMobility historically?
Hey, Jason, it's Rob speaking. Why don't I start out about on guidance, and I'll turn it over to Will more on the margin side. As you know, we don't give guidance. There's obviously a lot of unknowns in the macro environment right now. What I'll tell you is that all the signals that we track for our various businesses are positive. As you can imagine, when you have quarters where your largest division is up 140% or 175%, it's very difficult to give you precise expectations for full year 2023 at this point. I am very bullish about the growth prospects and hope to continue to beat, you know, our internal expectations and those, you know, of our investors.
You know, with respect to how to look at margins given our business mix, I'm gonna let Will take that on.
Yeah. I think, Jason, you just have to think about the relative contribution margins of the different businesses. You know, we've talked about how medical is in the 15%-20% range on the contribution margin front, whereas the short-distance business can get up to the 30s. You know, as you shift mix over to medical, you're gonna see the blended margin go down, but what we really care about, right, is growing that flight profit dollars. And that's what we're focused on, and that's what we saw this quarter. And then just to address your question on the old Jet. In the 8-K, and in the earnings press release from last quarter, we showed you for eight quarters what the old way and the new way would be historically.
Hopefully that gets you what you need. If it doesn't, we can figure out and get it to you.
One last thing, Jason. As you know, about half our business is MediMobility—Blade MediMobility, which is obviously, you know, extremely resistant to the macroeconomic environment. On the passenger side, between Blade Europe and certain aspects of our short-haul business here, you know, it's clear that our flyer is very resilient and elastic in terms of price. As you know, we exerted a fair amount of price increases this year, which were, you know, not met with resistance.
Thank you.
Thank you. One moment. Our next question will come from Hillary Cacanando of Deutsche Bank. Your line is open.
Hi. Thanks for taking my question. Just a quick question on pricing. I was wondering if you're getting any, you know, pushback from your customers, just, you know, just from the higher pricing across your route network. It doesn't look like it at all, you know, obviously based on your results from short distance and your, you know, in October being the highest revenue month for Blade Airport. Just wanted to find out what type of feedback you're getting from your customers since, you know, we're seeing, you know, retailers are out there saying that they're seeing their customers trading down. Obviously, your customers are, you know, more affluent, so, you know, the weakness in the economy probably doesn't impact them as much, but just kind of wanted to find out the feedback you're getting.
Sure. Not a problem, Hillary. Obviously, when you think about Blade Europe, being in the resort areas that they are in, it was a fair amount of price elasticity there and a very strong consumer. Also, frankly, the strength of the dollar with respect to Americans going over to Europe, that helps a lot. Here in the U.S., you know, there's no question that the price increases that we put in on our short-distance business, you know, were well taken. It really is just the question of the friction, which continues to be high in terms of traffic versus, you know, the convenience of flying.
What I will say is that, to your point, we do have a high audience, but we also have an audience that is very approachable. You know, our prices start at $195 per airport or $95 for the airport pass. What we've done is we've instituted through our technology three types of fare classes that allow you flexibility. Right now, we actually have an average airport flight cost to the consumer of about $245. You still can buy a seat for $195. This way we are getting both the kind of the lower end of the market in terms of, you know, amount of money they can spend and also the higher part of the market as well.
You know, our goal for airport is that can be open to everyone. The pricing power on the lower-end products has really been done through the advent of our technology of multiple fare classes. Hopefully that helps a bit.
Got it. Thank you very much. I saw that, regarding the East Hampton Airport, I saw that the judge blocked the move to close the airport. Is this just the end of the story and everyone could just move on? Is the town going to now conduct an environmental study and then, like, try again to close the airport? I know it's only like 6% of the revenue, but, you know, still there is a fair amount of customers going to that location. What's the-
Sure.
Next steps?
You know, the East Hampton saga has been going on for 30 years now. As you're probably well aware, it is clearly something people love to talk about, despite it being a very small part of our business. What I'll say is that, you know, we successfully got a temporary restraining order from the judge, and the judge then eventually without you know requesting any type of you know hearings or meetings ruled in our favor, that the town of East Hampton could not close East Hampton Airport or make any restrictions at that time because they had not done a lot of the environmental work and other things as well.
I think what this really does is open up the conversation to the types of changes that we think are in the best interest of all stakeholders, not only the people flying, but the people who live in the neighborhoods that we fly near and the airport itself. What we did do this past year is we substantially reduced the number of flights that we had to East Hampton Airport, both to expand the opportunities for people who live in other areas such as Sag Harbor or Montauk, but also to prove that to East Hampton that if they did in fact put in restrictions, those people are gonna still fly. They're just gonna fly to other areas. I think the proof is in the pudding. We're not reliant on the airport.
I think that, you know, because there's so many other places to land, you know, for instance, Sag Harbor is about 10 minutes away, and Montauk is actually in the town of East Hampton. I'm hoping that the town will be open to our overtures to come up with compromises, which I think will be great for everyone. It's never over, you know, we feel good about the East End of Long Island and our short distance business. Again, multiple places to land. Just like we said last year, we said it wasn't going to have a material impact on us, and it certainly did not.
Got it. Great. Thank you so much.
Thanks, Hillary.
One moment.
Again, ladies and gentlemen, if you do have a question, please press star then one on your touch-tone telephone. Our next question will come from Stephen Ju, Credit Suisse. Your line's open.
All right. Thanks, guys. Hi, Rob. You've now spent about, I guess, about two months with your new European footprint. What are some of the things that you learned with those operations now in-house? What's better? What needs more work? Where are there areas that you can optimize? I guess, looking a bit more longer term, I guess, you know, governments move along at different speeds. You know, where do you think the E.U. is in, you know, in terms of their thinking on EVAs versus here at home in the United States? Will, can we talk about the seasonality of the business in Europe?
I think it's probably more Southern Europe leisure-based, but is there any opportunity to have that show up as sort of a more constant thing throughout the course of the year, given different potential use cases? Thanks.
Sure. Look, like, I can't be more pleased with the acquisition. Now, this was three in one, three deals. We acquired the retail businesses of Héli Sécurité, Azur Hélicoptère, and Monacair. I think that what I'm pleased about is the work that we've done to really bring these three companies to the same level of technology that we have here. You know, we have a tremendous data exhaust here at Blade, knowing a lot about our flyers, being able to communicate with them, being able to come up with dynamic pricing and things of that nature. I would say they are probably behind. They were behind where they were before, and they really were operating as individual fiefdoms. Now we can harmonize pricing across these three companies. We have a technology platform that's now been deployed.
It is clear that the Blade brand resonates incredibly well in those markets everywhere from Monaco, Nice, Cannes, Saint-Tropez, you know, Courchevel, and other places in Italy because it really is a global traveler that tends to use that. Frankly, you know, this is not just a seasonal business. You know, Monaco is a tax haven, and it has a very strong year-round business. The dollar also definitely helped us in terms of getting Americans over there, and the fact that it was on our Blade app here, you know, also helped. We see a lot of opportunity, both in terms of pricing, marketing. I think was a little bit taken for granted. There really wasn't a lot of marketing, you know, done there, and a lot of packages on the leisure side.
We feel really good about it. It's a very high-end resilient customer, who you know, clearly wants to fly, and just again, when you think about the geographies there in terms of the mountainous terrain and traffic, just like here, we're reducing a lot of friction. Again, you know, the numbers we're seeing right now are very consistent with the internal expectations that we had before we made the acquisition. Will, is there something you wanna add?
Yeah. You know, just to hit the seasonality, you know, it has some similarities to the U.S. short business in that it's summer-weighted, but it is less seasonal. About historically, about 70% of the revenues come through in Q2 and Q3, weighted a little bit to Q3. Q4 is the weakest by far. Historically, it's been about 10% of the revenues. You do get a nice winter business traveling to ski destinations, so that ends up being close to 20% of the revenues in Europe. Of course, we're hard at work to increase the demand on all fronts here.
Thank you.
Thank you. I'm showing no further questions. I would now like to turn the call back to Rob Wiesenthal for closing remarks.
Thank you. I just wanna thank the team for another great quarter. It is obviously a very complicated environment between where we are in terms of election status right now here in the U.S., inflation, recession fears, the war in the Ukraine. We are happy that we got these acquisitions under our belt and that we're demonstrating a really strong growth trajectory. Again, I'll reiterate the signals that we have thus far. This quarter remains strong. Also, as important, we are very, very pleased to have an extremely clean balance sheet versus many of our peers. We have over $200 million of cash. Given you know our capital needs being an asset-light company, that's a lot of cash.
That will not only fund our growth organically, but it'll allow us to be opportunistic with acquisitions. Hopefully, with this call, you know, you can see the results that we posted, the building blocks that really show a tangible path of profitability, which we're completely focused on. We're looking forward to closing out the year on a strong note and speaking with you again next quarter. Thanks very much for your time, and we look forward to speaking with you soon.
Ladies and gentlemen.
Thank you, operator.
This concludes today's conference. You may now disconnect.