Vertical Aerospace Ltd. Annual Report - How They Did This Year

I’m putting together a guide to help you understand how Vertical Aerospace performed this year. Instead of digging through dense financial filings, we’ll break down their progress and what you should watch as an investor.

1. What does this company do?

Vertical Aerospace is building electric vertical take-off and landing aircraft, now branded as the "Valo." Designed for city travel, the Valo carries four passengers, travels up to 100 miles, and reaches speeds of 150 mph. They are currently in the "heavy lifting" phase of engineering and testing. They must earn official certification from aviation regulators in the UK and Europe. As a startup, they are not yet selling products or generating sales.

2. Financial performance: Still in the "spending" phase

Because they have no certified product, the company reported zero sales this year. They are spending cash rapidly to fund research and operations. For the 2024 fiscal year, they reported a loss of about $110 million. You aren't looking for profit right now; you are looking at their "cash burn." They spent roughly $8–$9 million per month. Investors should watch how much cash they have left before they must either start selling aircraft or raise more money.

3. Major wins and challenges: Survival mode

The big story this year has been survival. The company has worked hard to ensure it has enough cash to reach its certification goals.

To stay afloat, they have:

• Raised Cash: They raised $90 million in January 2025 and another $69 million in July 2025.
• Created Flexible Funding: They set up a program to sell up to $100 million in additional stock as needed to fund operations.
• Restructured Debt: They renegotiated terms with lenders, including Mudrick Capital. They pushed the due date for $100 million in debt to 2028. In exchange, they agreed to a 13% interest rate, which shows how risky the company’s current financial position is.

4. Financial health: The dilution trap

This is the most important section for you. Because the company isn't profitable and carries debt, they rely on issuing new shares to pay the bills. Every time they issue new shares, your "slice of the pie" gets smaller. This is called dilution. Recent stock sales have increased the total share count, which reduces the potential value of your shares. Additionally, partners like American Airlines hold warrants. If they use these, the company will issue millions more shares, further diluting your ownership.

5. Key risks

• Dilution: The constant need for cash means your ownership stake will likely shrink as the company issues more stock to cover its $100M+ annual expenses.
• Certification Risk: They cannot earn money until regulators approve the aircraft. If testing goes poorly, their 2026/2027 launch date could be delayed for years, potentially draining their remaining cash.
• Debt Pressure: High-interest debt consumes cash that could be used for research. If they miss loan requirements, lenders could demand immediate repayment.
• Supply Chain Risk: As a hardware company, they are vulnerable to delays in sourcing parts like batteries and motors.

6. Future outlook

The company is focused on earning "Type Certification" for the Valo. They are racing competitors like Joby and Archer to reach the market first. They have pre-orders for over 1,400 aircraft, representing a potential $5 billion pipeline. However, they must first successfully build and certify the aircraft. Until then, this remains a high-risk, high-reward bet on the future of flight.

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Investor Takeaway: If you are considering an investment, ask yourself if you are comfortable with the "dilution trap." Because the company has no revenue, they will likely continue to trade your ownership percentage for the cash they need to survive. Only invest if you believe the long-term potential of the Valo outweighs the high probability of further share dilution and the significant technical hurdles ahead.