Vertical Aerospace’s Hybrid Flight Test Delays, Transition Flight Timeline Shifts Mark Q4 2025 Earnings Call Contradictions

Date of Call: Mar 24, 2026

Guidance:

• Full transition flight test expected imminently, with final tests anticipated over coming weeks.
• Critical Design Review (CDR) for Valo to be completed by mid-2026.
• First pre-production Valo assembly to begin in 2026.
• Battery pilot production line operational; new 30,000 sq ft Vertical Energy Centre 2 to open later in 2026.
• Anticipated cash spend of $190M-$200M over the next 12 months (rolling 12 months from end of March).
• Cash and cash equivalents were $93M as of December 31, 2025; short-term liquidity estimated at $85M.
• Will explore capital raising options across capital markets, strategics, and government support when the right moment arises.

Business Commentary:

Flight Test Progress and Certification:

• Vertical Aerospace is in the final stages of completing full pilot transition for its Valo aircraft under the regulatory oversight of the UK CAA. They are close to finalizing five flight profiles and anticipate completion imminently.
• The progress was driven by a disciplined approach to flight testing, working closely with the CAA to reduce certification risk, and incremental testing to ensure safety and compliance.

Battery Technology and Manufacturing:

• The company has operational battery pilot production lines and is expanding its battery manufacturing capacity with a new 30,000 sq ft facility, expected to open later in the year.
• This expansion is supported by the growing demand for battery technology, not only for their Valo eVTOL but also for potential applications in other industries, providing a long-term revenue stream.

Financial Position and Capital Raising:

• Vertical Aerospace reported a cash and cash equivalents position of $93 million as of December 31, 2025, with short-term liquidity estimated at approximately $85 million.
• The company anticipates spending $190 million-$200 million over the next 12 months and is exploring capital raising options across capital markets, strategics, and government support to fund its operations and growth plans.

Strategic Partnerships and Market Position:

• Vertical Aerospace has signed a critical supplier partnership with Evolito for the development and supply of EPUs and has launched new customer partnerships with entities in Saudi Arabia, Monaco, and the United States.
• The strategic partnerships are part of a broader effort to solidify its market position and expand its ecosystem, leveraging its unique aircraft design and technology.

Military and Hybrid Aircraft Opportunities:

• Vertical Aerospace is positioning its Valo aircraft for the defense market, leveraging its ability to convert the airframe into a hybrid configuration quickly, which is expected to be certified in 2029.
• The company is engaging in deep discussions with militaries around the world, particularly in Europe, and sees significant potential for its product in areas such as contested logistics and autonomous platforms.

Sentiment Analysis:

Overall Tone: Positive

• Executives expressed strong confidence in the product and progress, stating 'Valo is the highest quality EVTOL aircraft in development globally today' and 'the feedback we’ve had from everyone in this space has been outstanding, way above and beyond what we were expecting.' They highlighted being 'on the cusp of great things' and 'genuinely believe we have the industry-defining aircraft.'

Q&A:

• Question from Louie DiPalma (William Blair): First, I just want to check in on your comment. You said about the pilot of full transition. You know, you said it’s very soon. Are there any regulatory hurdles that you’re waiting for? I know weather has been an issue at times. Perhaps just elaborate on what’s left to do.
  Response: The remaining work is the 'tail end' of an S-curve test profile, involving a few more flight tests; weather was a significant factor but is improving.

• Question from Louie DiPalma (William Blair): Understood. Appreciate the color. Separate topic on the strategic. From my understanding, there’s been discussion going on. Any update on when we could maybe get something? Should we think about the full transition I just asked about as a precursor for some type of strategic to come in?
  Response: Strategic discussions are ongoing; successful transition is a catalyst, but focus is on completing transition first, which is now months, not weeks, away.

• Question from Louie DiPalma (William Blair): Understood. Just lastly for me, on the hybrid military side, I know you sort of alluded to some things earlier. Is that something that could, you know, happen as we get closer and farther where you know where you announce some efforts or some programs? That’s obviously very, you know, hot topic or hot area given, you know, what’s going on in the world. Just curious your thoughts there.
  Response: Defense discussions are active; Valo's hybrid configuration (certified in 2029) is generating significant interest, and progress is expected to be shared by year-end, possibly at Farnborough Airshow.

• Question from Amit Dayal (H.C. Wainwright): With respect to the timing for the fully, you know, the piloted transition flight, should we expect timing on that to be sort of mid-2026 or maybe later in the second half of 2026?
  Response: Timing is uncertain due to weather and learnings, but it is anticipated over the coming weeks.

• Question from Amit Dayal (H.C. Wainwright): The other question was the battery efforts. Does the GBP 190 million-GBP 200 million spend for the next twelve months include your battery needs as well?
  Response: Yes, the $190M-$200M rolling 12-month spend covers battery facility expansion and related efforts.

• Question from Amit Dayal (H.C. Wainwright): Got it. Thank you, Stuart. This last one, the strategic investor you are sort of courting and the other financial options that you are sort of, you know, looking at, how urgent are these, you know, needs given where the balance sheet is? Or are you comfortable, at least for the remainder of 2026, you know, to execute according to plan?
  Response: The company is comfortable, with line of sight to $150M-$160M; capital raising will be executed when it is the right time, not under pressure.

• Question from Louie DiPalma (William Blair): I was wondering, following these demonstrations and your tests thus far, how do you feel that your Valo aircraft stacks up with peers in the market? Is the main difference between Vertical and peers the balance sheet right now?
  Response: Believe Valo is the category killer with superior design and capabilities; the main difference is the product, not just the balance sheet.

• Question from Austin Moeller (Canaccord Genuity): Can you talk a little bit about the R&D and CapEx plans over the next 12 months that fits into the GBP 995 million in cash you expect to burn? Like, how many aircraft do you expect to build as part of that?
  Response: The $190M-$200M rolling 12-month spend covers public flights, hybrid prototype conversion, battery facility expansion, aircraft manufacturing facility build, and start of first Valo build.

• Question from Austin Moeller (Canaccord Genuity): Is there an active program of record or the equivalent in the U.K. of Ministry of Defence right now to procure a hybrid VTOL aircraft? Are there other similar programs in the works with some of the allied NATO militaries?
  Response: No official program of record, but deep discussions are underway with U.K. government and other defense partners; Valo's unique hybrid capability is generating significant interest.

• Question from Austin Moeller (Canaccord Genuity): Okay. Just my last question, have you narrowed down any of the on the market or available hybrid powertrains to like one or two options yet?
  Response: A short list exists, but no announcement yet; multiple tier one suppliers are interested in partnering due to Valo's airframe potential.

• Question from Chris Pierce (Needham): I was hoping to go a little bit deeper on the transition delays. Maybe delay is too harsh a word, but either way, I’d just love to hear sorta if we think about a pie or a hundred percent, however you wanna bucket it, like, what’s within your control and what’s been that you haven’t been able to control from November till now?
  Response: Less than 10% of tests remain (tail end of S-curve); major delays were due to weather (e.g., 46 consecutive rainy days) and regulatory process, which ensures safety but slows progress.

• Question from Chris Pierce (Needham): Can you sort of help us with how slow is slow on those two sort of guidance, you know, buckets that you just talked about? You fly, you compare the data, you have to tweak to, you know, versus what you saw versus what you expected, and then you need to take that to the CAA and then get approval to fly the next time. Are we talking days, weeks? Like, what is the timeframe between when you fly and when you’re ready to fly the next time? And what’s in your control and out of your control as far as that goes as well?
  Response: Resolution times vary from days to weeks; delays are due to weather or model updates requiring CAA approval, but this process de-risks certification for the Valo.

• Question from Chris Pierce (Needham): Okay. I appreciate all the detail. Very much appreciated. Okay, just one other one. You guided to a 12-month cash burn of $200 million-$195 million. Is there any reason to think the next 12 months prior to that will be meaningfully different from that? As you ramp, like if I’m looking at slide 17, you’ve got the seven certification aircraft you’re gonna build. Like, as we think about burn going forward before you have entry into service and revenue, how should we think about burn beyond the next 12 months? Just conceptually.
  Response: Cash burn to certification is expected to be in the same ballpark as the next 12 months, around GBP 200M.

• Question from David Zazula (Barclays): First question is, with respect to the selection of Evolito as the EPU supplier, how has that been received by CAA and EASA? You know, I guess do you perceive any risk with respect to, you know, certification with them relative to kind of the prior, you know, established tier one supplier you had on the EPU side?
  Response: Evolito has strong certification processes in place; they are already working with the CAA, and there is no perceived certification risk.

• Question from David Zazula (Barclays): Super helpful. I mean, maybe can you frame how do you think they’ll fit into the broader supplier strategy, how you think the supplier coordination is gonna go, and I guess broadly, how the suppliers will support your ability to ramp up production over the next couple years?
  Response: Suppliers are deeply embedded, ready, and committed; Critical Design Review is ~75%-80% complete, ensuring they can produce certification aircraft in 2028.

Contradiction Point 1

Hybrid Aircraft Development and Testing Timeline

Contradiction on when hybrid flight testing will begin.

Louie DiPalma (William Blair) - Louie DiPalma (William Blair)

2025Q4: The hybrid Valo is unique... The company is dedicated significant internal resources to defense sales and anticipates sharing progress, potentially as early as the Farnborough Airshow in July. - Dónal Slattery(Chairman), David King(Chief Engineer)

Are there any upcoming announcements or program developments for hybrid/military aircraft? - Austin Moeller (Canaccord Genuity Corp.)

2025Q3: The hybrid flight test campaign is expected to begin in the middle of 2026. - Stuart Simpson(CEO), Domhnal Slattery(Chair)

Contradiction Point 2

Timeline for Full Piloted Transition Flight

Contradiction on when the critical transition flight will occur.

Amit Dayal (H.C. Wainwright) - Amit Dayal (H.C. Wainwright)

2025Q4: The timing is difficult to commit to because each flight yields new learnings, but it is anticipated to be completed over the coming weeks. - Stuart Simpson(CEO)

What is the expected timing for the full piloted transition flight (Mid-2026 or later)? - Xin Yu (Deutsche Bank AG)

2025Q2: On track for Q4 2025. The truck-based ground test is gathering critical data for the 30-70 knot wing-borne flight phase. - Stuart Simpson(CEO)

Contradiction Point 3

Status and Timeline for Hybrid Aircraft Certification

Contradiction on the readiness and certification timeline for the hybrid variant.

Louie DiPalma (William Blair) - Louie DiPalma (William Blair)

2025Q4: The hybrid Valo is unique—it can be certified in 2029 without redesigning the airframe, making it immediately usable by militaries. - Dónal Slattery(Chairman)

Are there any upcoming announcements or program developments related to hybrid or military aircraft in the near future? - Austin Nathan Moeller (Canaccord Genuity Corp.)

2025Q2: The hybrid variant is a modification... it is expected to be a 'fast follower' into service in 2029. - Stuart Simpson(CEO)