Well, look, we're thrilled to have you guys come back in here. The company has gone through a large number of changes recently, at least externally. Internally the business, the culture, the values have been rock solid and consistent. And I think we attribute that to the way in which we did our IPO, which was the big external financing. We had done a series of private rounds. Our investors were extremely supportive of our business culture, our philosophy and our values.
One of them is keeping the team very tight and making sure engineering, production, facilities, maintenance, all these folks are right together and working on creating products together. And we've chosen to do that in Vermont. And that was actually celebrated by the investors who got behind us in the IPO, and that was like a really, I would say, surprising but positive reaction.
There was this initial idea that we would get a lot of questions: Why Vermont? What are you doing up there? Do you have access to people? How supportive is the government? Can you really build an aerospace company in Vermont? But the deeper the investors dug into the business and the people here, the more conviction they had. And the longer we stayed on the road in the IPO, the more conviction they had.
So the end result was an astronomical success. We ended up raising about $1.2 billion, and after fees we took home $1.1 billion, and we already had $700 million plus in the bank. So the numbers are not small. And I think it's important to note that a very large portion of that money, it's trust—we're trusted to take that money and grow the business.
But that means we pay people. Katie and the team here that focuses on the people specifically focus on buying all of our food locally, supporting people that are running local businesses, whether it be with Beta swag or the technical materials that we buy, from circuit boards to machinings to composites.
We really rely on as close to home supply chains as possible, both because we think it's the right thing to do, but also because it's strategically aligned with having a close connection between the end goal of our business—of building a sustainable aviation future—and the people who are doing that with us. So, we intend to continue to grow in Vermont, is the point.
So, we've added about 300 people here just recently, and we intend to more than double that addition coming up this coming year. Those people will be predominantly in Vermont. Naturally, as an aerospace company, we have to have some people that are out in the world as we start shipping these aircraft to support them. But the nucleus will stay here in Vermont and we will build those aircraft.
In fact, we are increasing our level of vertical integration locally. We're doing that on the composites, the metallics, we're doing it on our assemblies, and that's a winning strategy right now because it insulates us from a volatile supply chain. So we're investing in tooling, people, and facilities directly adjacent to this building right out the window over here and in the immediate region of this facility.
And we do it because we like that close collaboration. Keeps the quality of work extremely high and it's economically beneficial to minimize the waste of shipping. So that's one of the reasons that we're focused on vertical integration.
Oh, you lost the little mini— I lost the mini mic. Do I have to say that all again?
A couple other things on kind of the people here. This is something Blaine said to me very early on. He said we should never take any pride in underpaying people. And if you take the reciprocal of that, or excuse me, you say that in a different way, I should say, is we take a lot of pride in taking care of our people. So we pay people well here.
We have phenomenal benefits programs. Everybody gets fed a healthy lunch every single day. We have an on-site doctor, nurse, pharmacy. We organize to change people's snow tires here. We try to take the friction out of things that can be addressed as a company.
On top of that, people get paid well and every single person here is an equity holder in the business. And that is really, really unique for public companies. New people coming in get a meaningful equity slug. So part of growing good jobs is the pay. The other part is giving people an environment where they feel welcome, where they love their colleagues, they make people around them great.
You guys are in a facility right here that we're quite proud of. Katie and the architecture team here, they focused on making sure that we had a facility that people felt healthy in. And that's not just the food and the lighting, that is every part of the air flow, every part of the way people come to this facility, and it's a really important part of it.
Right across the way here, we hear some noise coming from it right now, is BTC—Burlington Technical College. It sounds like they're running up some engines, but we're working with the local schools, UVM, Champlain, the BTC Center for Technology, Essics, on developing curriculum, both on the technical side and the non-technical side, ironically, that better serve the community and our business.
So for example, BTC helping them with curriculum where aircraft maintainers coming out of that program will be better fit to work on electric aircraft, better fit to build composite parts, better fit to understand what systems engineering is, what configuration management is, and what very high quality product production is.
And so we have an entire team led by Sarah Desa back here focused on making sure we're growing that next wave of talent for Beta, and that means investing in the long term both at the schools and locally with a whole bunch of workforce development programs.
So I guess I'll stop there and I can talk specifically about the IPO, our growth plans here, the people here, our programs, but love to take a couple questions from you guys before you walk around and kind of get a visual update of the work we're doing.
I have a quick clarifier right off the bat. When you said you added 300 jobs recently, you attempt to double that this coming year. Does that mean you're going to add another 300 or are you going to add 600?
Oh, so I said we're going to more than double that, right? So it's close to a thousand that we are going to add over the next period of our business, which we measure in about 18 months. Yes, that is approximately what our forecast is. I will say, like any business, we'll do the right thing with the information we have at the time that we're going to do the thing. And if the demand continues to grow the way it does, that is likely the trajectory that we're on.
What kind of demand do you have?
So we have a backlog that is about $3.5 billion dollars of aircraft only presently and about a billion dollar backlog in propulsion. So that is—Blaine, help me with the numbers. I think that's 490 aircraft or something like that. A little more than that. Okay. So, 490 aircraft plus options for extensions on those contracts, and it doesn't include the aftermarket where there's a much larger opportunity.
So I'll tell you, Kad, if our business, if we make a low-cost, reliable, quiet, and sustainable aircraft that's also economic, it is not a demand-side constraint, it is a supply-side constraint. We have to grow responsibly, but everything we can produce will be consumed at this rate.
The question, perennial question I'm sure you get asked, is when will these planes be able to be sold—when is the FAA going to give them the green light?
Yeah. So it's absolutely fascinating right now. The new administration issued an executive order called American Drone Dominance. Contained within that executive order was something called the eVTOL integration pilot program, which basically kicked the door open for pre-type certification operations. And ourselves and many other people in the industry are pursuing a large number of state partnerships, including here in Vermont, New Hampshire, New York, to deploy these aircraft prior to type certification.
Now they are identical to type-certified aircraft, but they get to go out into the world sooner in controlled environments. In our case, it's for cargo, medical, and logistics applications prior to passenger applications. So we are building aircraft fit for that program presently, and we are actively applying to get the right paperwork in place to go and pursue this.
The rough timeline is the awards will come out next March and they will start to be deployed next summer, to answer your question directly.
So people will potentially start seeing more and more of these in the skies around the state starting like next summer.
That's right. Doing real things. You should see quite a few right now. I mean, we just crossed 100,000 nautical miles of flying in our aircraft now. That's a lot of flights around Vermont and Plattsburg and down to Rutland and over to New Hampshire. So people—it's just a great feeling actually when Katie and I get texts from our friends in high school and they're on the golf course taking pictures of the airplanes flying overhead. So people are seeing them right now. You may not hear them, but you'll see them.
Can you describe that program a little bit more, as it sounds like there's a state component as well?
Yeah, that's right. So the eVTOL integration pilot program—the state is the lead applicant in every case, and a state may compile multiple states and apply as a lead applicant. Within that is a 135 operator, which is somebody who operates the aircraft, maintains it, and provides the pilots, and then an OEM like us who makes the aircraft that they use, and of course there's a customer.
So let's say for example blood products are being moved between Dartmouth Hitchcock out to Saranac Lake. Right now they may use a helicopter to go do that. We would apply with the states, with New York for example, and say we want in a safe and logical way to start moving those blood products between Saranac Lake Airport and Lebanon Airport adjacent to Dartmouth Hitchcock.
The FAA receives those applications and say that is a good, sane, safe way to do that. So before type certification you can go do that, and that's what we hear in March. So, we have a whole bunch of charging systems, airplanes, and partners that we've applied for this program. And I'm actually going back down to Washington next week on Wednesday, and Secretary Duffy is elaborating on this and kind of announcing the details of this program, which is public, but they're going to provide some more color on it then.
And your applications are in at this point.
Very precisely, our portions of the applications are complete. They're formally due on the 19th of December when the states provide them. So, we provide the information to the states that then provide it to the federal government.
So then the state, when you say the state applies, is it the state of Vermont, or is it like a particular agency, like the commerce department or whatever?
Yeah, I guess I don't know that I should say exactly what Vermont is doing, but they are a part of the applications.
Who are your potential customers in Vermont? Who would—like UVM Medical Center wants to move medical products around, that sort of thing?
Yeah, I can't say exactly on the applications, but as you may know, UVM Medical Center is partnered with Dartmouth Hitchcock, who leases their helicopters from a company called Metro Aviation, which we have commercial agreements with. So, you can draw some lines in there. But ultimately there's a lot of goodness for those types of applications.
I was actually going to ask if you could expand a little bit more. We've been seeing a lot of young people not joining the manufacturing, particularly advanced manufacturing. You have a pretty unique niche here that I think a lot of people would be interested in, or at least from what we've been hearing. You mentioned working with colleges and the tech centers, but how are you going to funnel in young people from around this area if you're looking to expand some of those jobs in the coming year?
Yeah. So, we recognize that the 3Ds of manufacturing—dark, dirty, and dingy—it's not where people typically want to work coming out of college. So, we flip that on its head and we give people a great place to work in manufacturing, attached to a mission, and pay them well. It's not a hard, complicated formula.
But I think most importantly, within that framework, and Sean Donovan over here is our chief of operations, and he's created a culture here in manufacturing where people have phenomenal growth opportunity. People will come in and they will actually really enjoy doing what you would consider traditional manufacturing because they participate in the continuous improvement process. They also have opportunities for their own career development.
So, if we create the right environment, I think that stigma about manufacturing falls away quite quickly. We have a really high percentage of people that grow into leadership positions that started within the company. I mean, Sean came in as an engineer, he led our battery program, then he led manufacturing batteries, then our research and development, and then he went up to be the chief of operations. And that is not abnormal here at every level, including manufacturing.
So, we've flipped that paradigm, I think, on its head. And we have a really, really good engagement. We had a career day here the other day and we had to shut the doors at 600 people. It's a place that people want to work, and we want the best people. We want those people to apply who want to be connected to this mission, who want good career trajectory, want to get access to the equity programs and the benefits that we have.
Theo, I think you might have had a question.
Hi, thanks. I just wanted to quickly ask if you could talk a little bit about trends that you're seeing as you try and undergo this larger-scale recruitment. The extent to which you're able to recruit locally—I know you recently had a career fair to maybe kind of develop in that direction—but just wondered the extent to which that's possible so far. And also wondered if you could elaborate a little bit more on the extent of the equity holdings that sort of lower-level members of the company hold right now.
Yeah. So without quantifying the equity holdings, I think if we look at any one point in time at the business value, excluding myself and other people that would be out of that characterization, I think there's probably near 30% of the company that's owned by those employees. And multiply, you know, seven or eight billion by 30%, there's a tremendous amount of equity held by people at all levels within this business.
It was a philosophy from the very, very beginning to ensure everybody is participating in the success of the business. Now we hold people to a pretty high standard here. If they want to participate in that, then we expect them to work hard, develop themselves, make the people around them great, and they get access to that.
So that's really good. To the trends, I'd say there's one big trend which is really interesting. I had an interview with a gal from Middlebury who got a physics degree and she came here to our career day. And after Middlebury she took off to Japan to try and learn Japanese and she didn't think she was going to come back to Vermont. And she heard about Beta through our chairman Chuck Davis of all people, and she showed up here for an interview and immediately you realized a super smart person that had no idea they could get a job like this in Vermont and was ready to punch out and go to San Francisco or whatever.
And they come back. When I mean come back, the trend that I'm alluding to is when people have a connection to Vermont, it's generally positive. They either grew up here, they went to school here, they vacationed here. And when you couple that with the fact that they can get a good-paying, fun, interesting, and mission-driven job in Vermont, that's the theme we're seeing a lot.
Of course, we'd rather not have them go away at all, but there's a lot of really smart people that have a ton of experience working at Boeing, working at Embraer, working out at Tesla, working out west in San Francisco, and they realize Beta's here when they come back for Thanksgiving, and all of a sudden they're applying. So that's a trend that we're seeing, and I would say, 15 to 20%, maybe somebody has an exact number, Sarah, of the number of people that have come back to Vermont from out of state.
I don't know. I know sort of like in our intern retention stats, but not sure for our—
What is our intern retention stat? We have hired to date 89 interns into full-time roles, and that's about 40% of those are Vermonters, and then about I would say like 35 to 40%—the rest of that is UVM from out of state but had that connection to Vermont through their experience.
So yeah, 80% total either were Vermonters or came to Vermont for school, and we've hired 90 of those interns internally. So 10% of our work staff is interns that came through local schools. That's nice work. You're doing a great job.
I have two more. I was curious how the housing crisis in the state shows up in your business right now. Obviously, you're paying pretty well—that might be understating it, I think. So, it must affect you differently than some other businesses that we've seen that have, for instance, I think of the hospital that is building housing for employees. But how do you see this showing up in your business and what's your sort of strategy right now to deal with it?
Yeah, so our strategy is evolving and changing. Historically, we've been kind of working very proactively with developers to make sure they get awareness of our hiring trends and, basically, what those people look like, what stage of life are they at, is it going to be people that want to be downtown or people that want to be in the Charlotte, Shelburne, Milton areas, or if it's people that want to be out a little further. So, just real strong communication.
However, right now we're looking at it much more acutely because the trajectory and the rate of growth in the total quantum of people is going up greater, and we're having more and more dialogues of actually getting allocations of new housing developments and helping people here choose wisely about where they're going to live.
One of the cool things about Beta right now is we actually provide like interim housing for people with some places that we own. So people can kind of acclimate to the community and figure out, when they first get here, what town, what area, what community they want to permanently set their roots into. And that's worked really well. It's just less churn in the housing market, less waste, and more people are happy about where they end up.
Ultimately, I think in the kind of a free-market society, as long as we keep the communication very, very open, the right houses are going to be either built or overhauled or chosen by the employees, and we want to help facilitate that. So we have a lot of active dialogues with developers. We tend to kind of favor the housing developments that are done in a kind of sustainable, rational way. And I think the people that come here like to live in those types of places.
I was reading this great little snippet last night of our head of quality who was talking about his housing development which was run on renewable energy 100%. And that was of value to him. So making sure developers understand that what we do here in a net-zero campus extends to people's personal lives.
My other question was around the recent deal to provide some of your propulsion technology—I think it's the motor to Eve Air. I was hoping you could elaborate on why that's the right deal at the right time for you guys. It stuck out to me in the sense that the aircraft that they're building is quite similar in some ways it seems to yours. So I was intrigued that Beta is providing some technology to help them.
Yeah. So Eve, which is kind of a subsidiary mostly owned by Embraer. So when you see these Breeze jets and others come in here, those are all Embraer jets, right? Embraer is a great company. Eve is a spin-off, separately went public, underneath Embraer, still the majority shareholder. My point of saying that is that they are a very, very experienced and valid aerospace company. They're kind of—it's like Boeing, Airbus, Embraer.
We want to work with the best companies in the world. They're going to figure out how to do propulsion. We have the highest-performing electric motors in the world and the furthest along in certification. If we don't sell them those motors, somebody else is going to sell them those motors. So we want to be a part of their success, and we're doing it on multiple different programs. I think we have five programs like that for meaningful propulsion sales, and I hope that we win them all.
Now generally speaking in aerospace, the margins and free cash flow associated with the sale of components is higher than aircraft. Pratt & Whitney—I'm looking at a Pratt & Whitney building right now. GE, Rolls-Royce. Those are the names that supply propulsion right now. If we do this right and we build an aerospace company, we will own the flow of energy through our charging network, which is all over the country, into the future of aerospace clean energy. We will own the propulsion and we'll own the aircraft, and I think that's ultimately a good thing for Beta.
So, we didn't want to—we wanted to respect the good work that was done on that propulsion here, monetize it to the extent possible, and Eve was a great opportunity to do it.
