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On Wednesday, BTIG analyst Marvin Fong maintained a Neutral rating on flyExclusive (NYSE:FLYX), acknowledging the company’s robust member growth and jet charter revenue performance. Despite facing challenges with soft fractional sales due to policy uncertainty affecting share sales, flyExclusive reported a strong fourth-quarter revenue of $91.4 million, surpassing BTIG’s estimate of $87.6 million. The company’s annual revenue reached $327.27 million, showing a modest growth of 3.78% year-over-year, according to InvestingPro data. The company also experienced a solid gross margin of 17.9%, higher than the anticipated 15.8%, benefiting from increased utilization with hours flown per plane rising an estimated 30% year-over-year.
flyExclusive’s gross profit gains, however, were balanced out by higher-than-expected selling, general, and administrative expenses (SG&A), resulting in adjusted EBITDA that met BTIG’s forecasted loss of $6.1 million. For 2024, flyExclusive highlighted that out of the 100+ planes it started the year with, 37 were not profitable due to excessive downtime, contributing to an approximate $30 million drag on EBITDA. The company has since removed 20 of these underperforming aircraft from its fleet and expects to retain fewer than 8 by mid-2025.
The company’s strategic addition of modern Challenger super mid-size jets is showing promising results. flyExclusive aims to increase its Challenger fleet to 15 by the end of the year, with these jets already operating at over 2.5 times the dispatch availability of the less efficient aircraft. This has contributed to a 20% year-over-year increase in total flight hours. Additionally, jet club membership has seen a 19% sequential rise, and December saw a notable 29% increase in departures, leading the industry.
Despite the fractional sales softness, Fong sees encouraging signs of progress for flyExclusive, with a clear path toward solid EBITDA generation. The analyst noted that the potential addition of 12 more Challenger jets could add $10-$12 million in quarterly EBITDA, and the impact of underperforming jets on EBITDA is expected to be significantly reduced by the end of the year. With a current market capitalization of $96.62 million and several financial health challenges identified by InvestingPro, including a concerning current ratio of 0.49, investors should closely monitor the company’s execution of these strategic initiatives. InvestingPro subscribers have access to over 10 additional key financial metrics and insights that could help evaluate the company’s turnaround potential. This could result in an EBITDA improvement of $13-$15 million. These positive developments, alongside potential improvements in jet card pricing and SG&A savings, present a favorable outlook, yet BTIG is awaiting the effects of tax policy and the final terms of the anticipated credit facility referenced by flyExclusive during their call before reevaluating their stance.
In other recent news, flyExclusive, Inc. announced the launch of its new Jet Club membership, aiming to enhance the private flying experience with simplified and transparent options. The membership offers locked-in rates for 24 months and ensures guaranteed access to the company’s fleet, which includes the Challenger 300 and 350 aircraft. The initiative, as stated by Chief Commercial Officer Mike Guina, seeks to set a new industry standard with its straightforward pricing model and flexibility. Membership benefits include no blackout dates, no fuel surcharges, and exclusive discounts on specific "Deal Days." The Jet Club is tailored for both business and leisure travelers, providing integrated funding bonuses and a capped number of high-demand days to maintain predictable pricing. flyExclusive operates a fleet of approximately 100 jets, managing all customer experience aspects from its Kinston, North Carolina headquarters. This development is based on a press release and contains forward-looking statements subject to risks and uncertainties. Interested parties can visit flyExclusive’s website for more details on the Jet Club membership and other services.
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