Volato Reports Fourth Quarter and Full Year 2023 Results

Improved Demand Mix Drove Higher Blended Yield and Aircraft Usage Revenue

Increased Size of Floating Fleet in FY 2023 to 24 HondaJet IIs

Expect Delivery of 10-14 New Aircraft in FY 2024

Volato Group, Inc. (NYSE:SOAR) ("Volato" or the "Company"), a leading private aviation company and the largest HondaJet operator in the United States, today announced results for the fourth quarter and full year ended December 31, 2023.

Fourth Quarter 2023 Financial Highlights

• Total revenue was $31.5 million
  • Aircraft sales revenue was $15.7 million
  • Aircraft usage revenue was $11.6 million
  • Managed services revenue was $4.2 million
• Net loss was $23.6 million, including the impact of a $13.4 million non-cash charge
• Adjusted EBITDA¹ was a loss of $8.1 million

Full Year 2023 Financial Highlights

• Total revenue was $73.3 million
  • Aircraft sales revenue was $21.4 million
  • Aircraft usage revenue was $37.8 million
  • Managed services revenue was $14.1 million
• Net loss was $52.8 million, including the impact of a $13.4 million non-cash charge
• Adjusted EBITDA¹ was a loss of $32.1 million

Fourth Quarter and Full Year 2023 Operational Highlights

• Increased the size of our floating fleet to 24 HondaJet IIs with firm orders for 22 HondaJet IIs and 4 Gulfstream G280s to be delivered in 2024 and 2025
• Completed business combination resulting in public listing and raised over $40 million of total new capital in 2023
• Partnered with Banyan Air Services to expand maintenance capabilities in the Southeast for Volato's growing fleet of HondaJets
• Launched Partner Benefits Program to provide Volato members with elevated luxury experiences
• Launched Volato Insider Program to drive additional non-owner demand
• Launched Vaunt app in Q4 2023 to efficiently monetize empty repositioning flights

Company Commentary

Matt Liotta, Co-Founder and Chief Executive Officer of Volato, commented, "2023 marked a successful year of executing on our strategic priorities, scaling our fleet, expanding market share, and continuing to demonstrate Volato's exceptional value to customers. We expanded the size of our floating fleet to 24 HondaJets in 2023, increasing aircraft usage revenue by 162% year-over-year, and providing us with greater flexibility to meet growing customer demand. We are delivering higher and more efficient aircraft utilization through our suite of charter and jet card products, our new Partner Benefits Program, and our strategy for monetizing empty repositioning flights, all while diligently managing our cost base. These efforts helped improve Volato's overall demand mix in 2023, with 48% of flight hours attributable to higher margin, non-owner flights, thus increasing our blended yield by 12% versus the prior year.

"Industry factors beyond our control – specifically aircraft delivery delays – put downward pressure on topline revenue in 2023. We are in close contact with our suppliers and partners and understand that production and supply chain issues are easing, providing us with good visibility into our 2024 and 2025 delivery pipeline. We expect continued fleet expansion will propel revenue and margin in several ways, including increased fractional sales and operating revenue, and more efficient aircraft utilization. We remain focused on growth and our path to profitability."

Mark Heinen, Chief Financial Officer, commented, "Gross profit margins improved on a sequential basis through a disciplined approach to managing our cost base and pursuit of higher yielding non-owner flight hours over the course of 2023. The growth of our floating fleet delivered higher usage revenue, and we expect these trends to continue as we add new aircraft to the fleet throughout the year. We also anticipate an increase in plane sale revenues with the expected delivery of nine to eleven new jets in FY 2024, providing the business with momentum on our path to profitability."

Key Metrics

(financial metrics in thousands, except KPIs)

Fourth Quarter and Full Year Financial Summary

Total revenue for the fourth quarter decreased 12% primarily due to lower aircraft sales. Aircraft usage revenue for the fourth quarter increased 121% as a result of an increase in the number of aircraft in our floating fleet. Total revenue for the full year decreased 24% primarily due to lower aircraft sales. Aircraft usage revenue increased 162% as a result of an increase in the number of aircraft in our floating fleet.

Net Loss for the fourth quarter increased $20.5 million primarily due to a $13.4 million non-cash charge related to the change in fair value of our forward purchase agreement and higher operating selling, general and administrative expenses from the growth in our business. Net loss for the full year increased $43.5 million primarily due to lower gross profit from lower aircraft sales, a $13.4 million non-cash charge related to the change in fair value of our forward purchase agreement and higher operating selling, general and administrative expenses from the growth in our business.

Adjusted EBITDA loss for the fourth quarter increased $5.5 million primarily due to lower aircraft sales and higher selling, general and administrative expenses from the growth in our business. Adjusted EBITDA loss for the full year increased $23.2 million primarily due to lower aircraft sales and higher selling, general and administrative expenses from the growth in our business.

The growth in our floating fleet increased fourth quarter 2023 flight hours 105% over the prior year and increased full year 2023 flight hours 124% over the prior year.

Demand mix continues to improve with 48% of flight hours by higher yielding non-owner flights, increasing the fourth quarter 2023 blended yield to $5,348, 9% higher than the prior year.

Balance Sheet and Liquidity

The Company ended the fourth quarter 2023 with $14.5 million of cash, and cash equivalents. The Company believes that it has sufficient cash to achieve profitability based on its forecasted aircraft sales and flight operations.

Conference Call

Volato will host a conference call to discuss its Fourth Quarter and Full Year 2023 results at 8:00 AM ET on March 26, 2024.

Interested parties can access the conference call by dialing (866) 605-1830 for toll free access or +1(215) 268-9881. The live call will also be available via webcast on Volato's Investor Relations website: https://ir.flyvolato.com/.

A replay of the call will be available until April 25, 2024, and can be accessed by dialing (877) 660-6853 or (201) 612-7415 and using the Access ID: 13744837.

About Volato

Volato (NYSE:SOAR) is a leader in private aviation, redefining luxury air travel through modern, efficient, and customer-designed solutions. Volato provides a fresh approach to fractional ownership, aircraft management, jet card, deposit and charter programs, all powered by advanced, proprietary mission control technology. Volato's fractional programs uniquely offer flexible hours and a revenue share for owners across the world's largest fleet of HondaJets, which are optimized for missions of up to four passengers. For more information visit www.flyvolato.com.

All Volato Part 135 charter flights are operated by its DOT/FAA-authorized air carrier subsidiary (G C Aviation, Inc. d/b/a Volato) or by an approved vendor air carrier.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "goal," "could" or "may" or other similar expressions. Forward-looking statements provide management's or the Board's current expectations or predictions of future conditions, events, or results. All statements that address operating performance, events, or developments that may occur in the future are forward-looking statements, including statements regarding the challenges associated with executing our growth strategy, including expected deliveries of aircraft and related sales, and developing, marketing and consistently delivering high-quality services that meet customer expectations. All forward-looking statements speak only as of the date they are made and reflect the Company's good faith beliefs, assumptions, and expectations, but they are not guarantees of future performance or events. Furthermore, Volato disclaims any obligation to publicly update or revise any forward-looking statement, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to, a variety of economic, competitive, and regulatory factors, many of which are beyond Volato's control, that are described in Volato's periodic reports filed with the SEC including its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2023, and other factors that Volato may describe from time to time in other filings with the SEC. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

Adjusted EBITDA

We calculate Adjusted EBITDA as net loss adjusted for (i) interest expense, net, (ii) provision for income taxes (benefit) (iii) depreciation and amortization, (iv) equity-based compensation expense, (v) acquisition, integration, and capital raise related expenses, and (v) other items not indicative of our ongoing operating performance. We include Adjusted EBITDA as a supplemental measure for assessing operating performance.

The following tables reconcile Adjusted EBITDA to net loss, which is the most directly comparable GAAP measure (in thousands):

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