Strata Critical Medical Inc.
05/06/2026 | Press release | Distributed by Public on 05/06/2026 09:54
Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)
Management's discussion and analysis of financial condition and results of operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs.
Forward-Looking Statements
This Quarterly Report on Form 10-Q may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified using forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "seeks", "projects", "intends", "plans", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in several places throughout this report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, results of operations, financial condition, liquidity, prospects, growth, strategies and the markets in which we operate. Such forward-looking statements are based on available current market material and management's expectations, beliefs, and forecasts concerning future events impacting us and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.
Our operations and financial results are subject to various risks and uncertainties. The following are among those factors, but are not the only factors, that could adversely affect us and/or that may cause actual results to differ materially from such forward-looking statements:
Risks Related to Our Business and Growth Strategy
•continued net losses or failure to achieve or maintain profitability;
•our ability to realize the anticipated benefits of strategic transactions, including the recently completed divestiture of the Passenger business, the acquisition and integration of Keystone (as defined below), and any future acquisitions or partnerships;
•harm to our reputation or brand arising from operational issues, public perception, clinical outcomes or actions of third parties;
•negative publicity, litigation, claims or regulatory scrutiny relating to our clinical services, perfusion staffing or organ recovery activities;
•our ability to provide high-quality customer support and maintain trusted relationships with Medical Customers;
•our reliance on contractual relationships with transplant centers, hospitals, Organ Procurement Organizations and strategic partners;
•adoption and effective utilization of our integrated clinical and logistics offerings by Medical Customers;
•competition within the transplant logistics, clinical services and organ preservation ecosystem;
•our dependence on the availability and utilization of donor organs and transplant volumes;
•insufficient reimbursement or funding for organ transport and related services;
•risks inherent in organ transportation operations, including delivery failures, operational disruptions or liability exposure;
•risks associated with ground transportation operations;
•advancements in preservation technology or alternative transport methods that could reduce demand for our services;
•aviation safety risks, including accidents, incidents or adverse publicity involving aircraft used in our operations;
•climate change, extreme weather events or environmental developments affecting our operations;
•terrorist attacks, geopolitical conflict or security events affecting aviation or healthcare infrastructure;
•volatility in aircraft fuel availability or cost;
•our ability to obtain additional capital or financing;
•restrictions under our Credit Agreement that may limit operational or strategic flexibility;
•our ability to manage growth, operational expansion and integration activities effectively;
•insurance market conditions, including increased premiums, reduced coverage availability or changes in underwriting standards;
•our dependence on key personnel and our ability to attract and retain qualified professionals;
•employment-related claims, workforce litigation or labor market challenges;
•our ability to maintain our company culture as we grow;
•fluctuations in financial results and the non-comparability of historical financial statements following discontinued operations;
•risks associated with purchasing aircraft or evolving from an asset-light model;
•risks associated with directly operating aircraft, including increased regulatory oversight, operational complexity or liability exposure;
•our reliance on maintaining efficient aircraft utilization to manage costs, operating efficiency and margins;
•changes in regulatory frameworks; and
•comparability of historical financial results due to the effects of discontinued operations for the Passenger business.
Risks Related to Our Dependence on Third-Party Providers
•our reliance on third-party aircraft operators to provide and operate aircraft used in our services;
•the availability of sufficient third-party aircraft capacity and our ability to add or retain operators to meet demand;
•workforce disruptions, operational interruptions or financial difficulties affecting third-party operators or service providers;
•reputational or operational risks arising from the illegal, improper or otherwise inappropriate operation of Strata-owned or Strata-branded aircraft by third-party operators; and
•our reliance on third-party cloud infrastructure, hosting providers and other technology vendors to support our systems and operations.
Risks Related to Intellectual Property, Cybersecurity, Information Technology and Data Management Practices
•interruptions, defects, failures or vulnerabilities in our technology systems or those of third-party providers;
•cybersecurity incidents, data breaches or misuse of artificial intelligence technologies that could disrupt operations or expose sensitive information;
•our ability to protect and enforce intellectual property rights; and
•risks associated with our use of open-source software.
Legal and Regulatory Risks Related to Our Business
•our operations within highly regulated aviation, healthcare and transplant environments, including evolving federal, state and local laws and regulations;
•the impact of any litigation or regulatory investigations that we may be subject to;
•our ability to comply with privacy, data protection, consumer protection and security laws; and
•the expansion of environmental regulations.
Other Risks
•our ability to remediate any material weaknesses or maintain effective internal controls over financial reporting;
•our ability to maintain effective disclosure controls and procedures; and
•the other factors described elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025, included under the headings "Risk Factors," "Management's Discussion and Analysis of Financial Condition" or as described in the other documents and reports we file with the SEC.
Actual results, performance or achievements may differ materially, and potentially adversely, from any forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. All information set forth herein speaks only as of the date hereof and we disclaim any intention or obligation to update any forward-looking statements, whether as a result of new information, changes in expectations, future events or otherwise.
Overview
Strata Critical Medical, Inc. (f/k/a Blade Air Mobility, Inc.) ("Strata" or the "Company") is a time-critical logistics and medical services provider to the United States healthcare industry. The Company operates one of the nation's largest air transport and surgical services networks for transplant hospitals and Organ Procurement Organizations ("OPOs"), offering an integrated "one call" solution for donor organ recovery. Strata's core services include air and ground logistics, surgical organ recovery, organ placement and normothermic regional perfusion and preservation for the transplant industry, as well as perfusion staffing and equipment solutions for cardiovascular surgery centers, offered under the Trinity Medical Solutions ("Trinity") and Keystone brands.
Strata's mission is to increase the number of organs that are successfully transplanted while leveraging the Company's expertise and resources to provide other medical and logistics services to a broader customer base. Strata's goals are
closely aligned with those of all participants in the transplant ecosystem, including transplant centers, regulators, OPOs, and other service providers. We believe that, by working with Strata, industry participants can save money, save more lives and operate more efficiently.
Beginning with the fourth quarter of 2025, following the integration of Keystone, Strata operates across two segments: Logistics and Clinical, both offering services related to organ transplant and the broader healthcare industry. All of Strata's services are provided to transplant centers, OPOs, hospitals, or other businesses that pay the Company directly.
Logistics Segment
Strata's Logistics segment is marketed under the Trinity brand name and includes the following:
•Air Logistics - Air transportation of human organs for transplant as well as related staff, equipment, blood samples, and tissue samples. Service is typically provided on fixed wing aircraft operating specifically for each individual organ. Strata also offers on-board couriers for commercial flights and "next flight out" shipping coordination.
•Ground Logistics - Ground transportation of human organs for transplant as well as related staff, equipment, blood samples, and tissue samples.
•Organ Placement - Administrative services related to the acceptance of potential donor organs for recipients and support coordinating with the transplant process.
Clinical Segment
Strata's Clinical segment is marketed under the Keystone brand name and includes the following:
Transplant Clinical
•Organ Recovery - Surgical procurement of donor organs.
•Normothermic Regional Perfusion ("NRP") - In situ perfusion of donor organs with oxygenated blood to improve clinical outcomes and enable functional assessment prior to recovery.
•Preservation - Operation of devices utilized to preserve organs prior to being transplanted into a recipient.
Other Clinical Services
•Cardiac Care - Cardiac perfusion, blood management & autotransfusion and disposables. Services are typically provided under contract with hospitals to support open-heart surgery procedures.
•Other - Extracorporeal Membrane Oxygenation ("ECMO") services, perfusion temporary staffing and equipment rental offered to healthcare providers.
Sale of Passenger Business
On August 29, 2025, the Company completed the previously disclosed sale of its Passenger business to Joby Aero, Inc. ("Joby Buyer"), pursuant to an Equity Purchase Agreement, dated August 1, 2025 (the "Joby Purchase Agreement"). The Passenger business acquired by Joby Buyer consisted of the Company's business of offering, selling, promoting, marketing, planning, booking, brokering, coordinating and arranging the transportation of passengers on aircraft operated by other entities and related ground transportation services. The purchase price received by the Company upon the consummation of the transactions contemplated by the Joby Purchase Agreement was approximately $76.0 million based on the closing price per share of $14.27 of Joby Aviation Inc's ("Joby Aviation") common stock as of August 28, 2025, after giving effect to certain pre-closing adjustments and indemnity holdbacks pursuant to the terms of the Joby Purchase Agreement, consisting of 5,325,585 shares of Joby Aviation's common stock, par value $0.0001 per share (the "Buyer Shares"). The Company subsequently sold the Buyer Shares received in connection with closing for net proceeds of $70.2 million. The Company may receive up to an additional $35.0 million in consideration upon the satisfaction of certain financial performance and employee retention targets described in the Joby Purchase Agreement during the 12 and 18 months, respectively, following the closing of this transaction, payable in cash or Buyer Shares at Joby Buyer's election, as well as the release of up to $10.0 million in indemnity holdbacks. The number of Buyer Shares issued to the Company, if any, shall be based on the average of the daily volume-weighted average sales price per Buyer Share on the New York Stock Exchange for each of the ten consecutive trading days ending on and including the first trading day preceding the applicable measurement dates described in the Joby Purchase Agreement.
The sale qualified as a discontinued operation under ASC 205-20. The Passenger business acquired by Joby Buyer included all operations previously reported within the Passenger segment, as well as certain assets and activities previously
reported within unallocated corporate expenses and software development, including certain costs related to software development personnel, the Company's former CEO and headquarter lease.
The results of operations through August 29, 2025, the transaction date, reflect the financial results of the Passenger business as discontinued operations. The cash flows and comprehensive income of the Passenger business have not been separately presented and are included in the unaudited interim condensed consolidated statements of cash flows and unaudited interim condensed consolidated statements of comprehensive loss, respectively, for the prior year period. Unless otherwise indicated, the information in the notes to the consolidated financial statements refer only to Strata's continuing operations and do not include discussion of balances or activity of the Passenger business.
Acquisition of Keystone Perfusion Services, LLC
On September 16, 2025, the Company completed the acquisition of Keystone Perfusion Services, LLC ("Keystone"), an organ recovery and normothermic regional perfusion service provider to the transplant industry, pursuant to a Purchase and Sale Agreement, dated September 16, 2025 (the "Keystone Purchase Agreement"), for the following upfront payments: cash $111.3 million (comprised of $67.0 million paid directly to the seller and $44.3 million directed by the seller to other parties on the close date) and 3,434,609 shares of the Company's common stock (where 1,717,303 were held in escrow at closing). The purchase consideration was subject to adjustment based on Keystone's actual 2025 Adjusted EBITDA performance. Based on that performance, 675,334 shares were returned from escrow and retired during the three months ended March 31, 2026, reducing the shares remaining in escrow to 1,041,969, the remainder of which is held to cover potential indemnification obligations under the Keystone Purchase Agreement. In addition, total potential earn-out payments of up to $23.0 million in the aggregate for the three-year period from 2026 through 2028 may be made contingent upon Keystone's achievement of gross profit targets (as defined in the Keystone Purchase Agreement).
Our Business Model
Logistics Services
We typically provide logistics services to transplant centers, OPOs, and other businesses on a contractual basis including provisions stipulating that Strata will be the "first call" for any transportation needs.
Pricing is based on a fixed price per flight hour flown with a fuel cost surcharge above a set benchmark. Ancillary costs such as landing fees and de-icing are passed through to the end customer.
Strata leverages an asset-light air logistics business model: we primarily utilize aircraft that are owned and/or operated by third parties on Strata's behalf. In these arrangements, pilots, maintenance, hangar, insurance, and fuel are all costs borne by our network of operators, which provide aircraft flight time to Strata at fixed hourly rates. This enables our operator partners to focus on training pilots, maintaining aircraft, and flying, while we maintain the relationship with our customer from booking through flight arrival.
When utilizing third-party aircraft and/or aircraft operators, we typically pre-negotiate fixed hourly rates and flight times, paying only for flights actually flown, creating a predictable and flexible cost structure. Strata provides guaranteed flight commitments to some of our third-party operators through capacity purchase agreements ("CPAs"), which enable Strata to ensure dedicated access to such aircraft with enhanced crew availability, lower costs and, in many cases, the ability to unlock more favorable rates when flying more than the minimum number of hours we guarantee to the operator. Additionally, a significant portion of trips are flown by safety-vetted operators to whom we make no commitments, providing us with additional flexible capacity for high demand periods.
We own ten fixed wing aircraft that are dedicated to the Logistics segment. We have invested in a limited number of owned aircraft based in high-volume geographies as we believe direct asset ownership will enable (i) improved economies of scale; (ii) increased uptime, enabling more reliable service and higher asset utilization; and (iii) the ability to compete for certain contracts where asset ownership is preferred or required. All of these aircraft are operated and maintained by third-party service providers under Strata's oversight. We prioritize the use of owned aircraft and dedicated aircraft under CPAs, which provide better economies of scale. We size our owned fleet and our commitments under CPAs significantly below our expected demand, enabling us to maximize utilization on those aircraft while fulfilling incremental demand through our network of non-dedicated operators.
We provide ground logistics using a combination of owned vehicles, which are allocated to hubs positioned near our customers across the United States, and third-party providers.
We utilize a combination of Company employees and contractors as couriers to facilitate the transportation of organs, typically kidneys, aboard scheduled commercial flights. For next flight out ("NFO") services, where kidneys are placed in the cargo hold of a commercial flight, we coordinate with third-party providers on behalf of our customer.
Organ placement services are provided on a contractual basis with a fixed monthly fee based on the size of the customer's program.
Clinical Services
We employ perfusionists and transplant surgeons that are primarily dedicated to a specific customer in a particular geography. We own perfusion equipment which is often provided as part of our services or offered through a traditional leasing arrangement.
Our clinical work for OPOs typically consists of surgical recovery, NRP services, and related equipment provided on a contractual basis with a combination of retainer and per case fees.
For transplant centers, surgical recovery and NRP services are typically provided on an ad hoc basis with pricing on a per case basis. We leverage surgeons, perfusionists, and equipment in place to support our OPO customers to provide more efficient options to transplant centers, utilizing locally available resources wherever possible to avoid incremental logistics costs.
For cardiac care hospitals, we typically provide perfusion staffing, often combined with perfusion equipment, on a contractual basis with a combination of retainer and per case fees.
Technology
We also utilize proprietary technology to manage staffing, training, and chain of custody, as well as help customers streamline organ evaluation, procurement, and logistics. Our technology enhances the efficiency and cost-effectiveness of our service offerings, further strengthening our position in the organ transportation industry.
Factors Affecting our Performance
Availability of Donor Organs
The majority of our business is directly tied to the volume of heart, liver, and lung transplants performed in the United States, which is driven primarily by the supply of donor organs that become available.
In recent years, the supply of donor organs has increased consistently, driven primarily by (i) increased utilization of Donation after Circulatory Death, which has expanded the pool of eligible donors; (ii) advancements in technology, including machine and regional perfusion; and (iii) regulatory changes enabling more efficient allocation of organs to recipients with higher need. However, there is no guarantee that this growth will continue, for example, recent months have shown a flattening in the number of deceased organ donors in America.
The supply of donor organs is subject to numerous factors outside our control, including changes in organ donation rates, advancements in medical technology, legislative, regulatory or policy changes affecting organ procurement and allocation, and shifts in public attitudes toward organ donation. Additionally, unforeseen events such as pandemics, public health crises, or changes in accident rates may impact the availability of donor organs. If the supply of viable organs declines or if legislative, regulatory or policy changes limit our ability to efficiently transport them, our medical transport business could be adversely affected, which could negatively impact our financial condition and growth prospects.
Ability to Attract and Retain Customers
We primarily serve transplant centers, OPOs, and hospitals. Logistics support for the hearts, lungs, and livers transplantations that make up the vast majority of our business is typically requested only hours before the required departure time. Our ability to successfully fulfill these requests with consistent pricing on the requested aircraft type is the primary metric by which our customers evaluate our logistics performance.
The organ logistics marketplace is highly competitive and we compete primarily on our ability to provide reliable, end-to-end air and ground transportation at competitive pricing. Increasingly, we compete directly with manufacturers of organ preservation equipment that also offer transportation or with providers that offer additional services, such as surgical organ recovery, that our customers find valuable.
We have responded to customer demand by introducing new services through our acquisition of Keystone, which launched our Clinical segment and enabled us to provide surgical recovery, NRP, and other related services as part of an end-to-end offering. We have also added new offerings organically, such as our TOPS organ placement offering, whereby we assist customers in evaluating the suitability of potential donor organs for transplant. However, customers may still demand services or technology that we cannot provide, which could have a material adverse effect on our business, results of operations, and financial condition.
The market for our clinical service offerings, including surgical organ recovery, organ placement, and perfusion, both for transplant and for cardiac care hospitals, is also highly competitive. We compete in our Clinical segment primarily on our ability to provide high-quality, reliable service integrating electronic recordkeeping to demonstrate compliance with best practices.
Specifically for our transplant-related services, we also compete on our ability to integrate offerings from our Logistics and Clinical segments, resulting in more streamlined communication and efficient transportation, saving time and money for our customers. Some of our competitors offer many of the same services we provide in an integrated "one call" offering, but we believe that our offering is more comprehensive in terms of both the variety of services we provide and the breadth of third-party devices that we support.
Ability to Secure Aircraft Capacity
Historically, our ability to aggregate significant demand for flights has been enough to incentivize operators to provide aircraft and crews for our use. However, there is no guarantee that we will continue to be able to secure dedicated aircraft at favorable rates, particularly given significant increases in demand for private jet aircraft in the United States in recent years. Periods of increased demand for private jets have historically led to increased charter costs and more limited availability in the spot jet charter market. Although this has not limited our ability to maintain or increase our access to dedicated jet aircraft at fixed prices in recent periods, there is no guarantee this will continue in the future.
To manage this risk, we enter into long-term capacity purchase agreements with aircraft owners and operators and have purchased a number of jet aircraft, all of which are 100% dedicated to Strata's needs.
Ability to Hire, Train, and Retain Clinicians
Our surgical recovery, NRP, organ placement, and cardiac care offerings depend on our ability to hire, train, and retain clinicians, particularly perfusionists and organ recovery surgeons.
Historically, our ability to aggregate demand across transplant centers and cardiac care hospitals has made us an attractive employer for clinicians and enabled us to optimize our staffing model to offer both competitive pricing to customers and attractive pay to our employees. However, given the significant growth in these fields as well as increasing competition, there is no guarantee this will continue.
Impact of Inflation to our Business
We generally pay a fixed hourly rate to our third-party operators based on flight hours flown. These rates are susceptible to inflation and are typically renegotiated on a yearly basis, though some multi-year contracts have fixed rate increases. Some contracts with operators allow for pass-through of fuel price increases above a set threshold. For our owned aircraft, we are more directly exposed to inflation of aircraft operating expenses, including pilot salaries, fuel, insurance, parts, and maintenance.
Given significant growth in organ transplant volumes and an increasing percentage of organs that are recovered by commercial surgeons and undergo NRP, demand for clinicians skilled in these procedures is high resulting in inflation in salaries and fees paid to these practitioners.
We have historically passed through cost inflation to customers and most logistics contracts with customers automatically pass through any fuel surcharges, but there is no guarantee this will continue in the future.
Seasonality
Our Logistics trip volumes and Clinical case volumes are correlated with the overall supply of donor hearts, livers, and lungs in the United States, which can be volatile due to a variety of factors. Over the last several years, industry transplant volumes exhibited modest seasonal softness in the calendar third quarter, though our own case and flight volumes have not always followed this industry trend.
Key Components of the Company's Results of Operations
Revenue
Services are typically purchased through our coordinators and are paid for principally via checks and wires. Logistics services are typically provided and billed on a fee-for-service basis, while Clinical services are provided and billed on both a fee-for-service and retainer basis. Payments are generally collected after the performance of the related service in accordance with the client's payment terms. Fee-for-service revenue is recognized when the service is completed, while retainer revenue is recognized over the retainer contractual term.
Cost of Revenue
Cost of revenue consists of costs of operating our aircraft fleet, including pilots' salaries, flight costs paid to operators of aircraft and vehicles, depreciation of aircraft, vehicles and medical devices, staff costs directly supporting Logistics and Clinical services, and costs of disposable medical products.
Selling, General and Administrative
Selling, general and administrative ("SG&A") expenses consist primarily of: staff costs for employees in the commercial, technology, executive, marketing and administrative functions; sales commissions; stock-based compensation; professional and consulting fees; insurance; facilities; information technology and software development costs; promotional expenses; pilot training costs; impairment of assets; and other general corporate overhead costs. SG&A expenses are expensed as incurred.
Amortization of Intangible Assets
Amortization of intangible assets consists of amortization of customer lists, trademarks, technology acquired in business combinations and capitalized software development costs. Amortization expense is recognized on a straight-line basis over their estimated useful lives.
Discontinued Operations
On August 29, 2025, we completed the sale of our Passenger business to Joby Buyer pursuant to the Joby Purchase Agreement. We determined that the sale of the Passenger business represented a strategic shift that will have a major effect on our operations and financial results. Accordingly, the sale was classified as discontinued operations.
The results of operations for the three months ended March 31, 2025 reflect the financial results of the Passenger business as discontinued operations. There were no assets or liabilities of the Passenger business remaining as of March 31, 2026 or December 31, 2025. See Note 4 to the unaudited interim condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.
Results of Operations
The following table presents our unaudited interim condensed consolidated statements of operations for the periods indicated:
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| (in thousands) | |||||||||||||||||
| Revenue | $ | 67,384 | $ | 35,948 | |||||||||||||
|
Cost of revenue
|
53,267 | 28,895 | |||||||||||||||
| Gross profit | 14,117 | 7,053 | |||||||||||||||
| Operating expenses | |||||||||||||||||
|
Selling, general and administrative
|
15,605 | 12,330 | |||||||||||||||
|
Amortization of intangible assets
|
1,486 | 408 | |||||||||||||||
| Total operating expenses | 17,091 | 12,738 | |||||||||||||||
| Operating loss from continuing operations | (2,974) | (5,685) | |||||||||||||||
| Other non-operating income | |||||||||||||||||
| Interest income, net | 473 | 1,321 | |||||||||||||||
| Change in fair value of warrant liabilities | 1,459 | 2,752 | |||||||||||||||
| Change in fair value of assets and other liabilities | 3,444 | - | |||||||||||||||
| Total other non-operating income | 5,376 | 4,073 | |||||||||||||||
| Income (loss) from continuing operations before income taxes | 2,402 | (1,612) | |||||||||||||||
| Income tax expense from continuing operations | - | - | |||||||||||||||
| Net income (loss) from continuing operations | $ | 2,402 | $ | (1,612) | |||||||||||||
| Net loss from discontinued operations | (248) | (1,881) | |||||||||||||||
|
Net income (loss)
|
$ | 2,154 | $ | (3,493) | |||||||||||||
Comparison of the Three Months Ended March 31, 2026 and 2025
Revenue
Disaggregated revenue by segment was as follows:
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | % Change | ||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||
| Logistics: | ||||||||||||||||||||
| Logistics | $ | 47,599 | $ | 35,948 | 32.4 | % | ||||||||||||||
| Clinical: | ||||||||||||||||||||
| Transplant Clinical | $ | 9,839 | $ | - | NM(1) | |||||||||||||||
| Other Clinical | 9,946 | - | NM(1) | |||||||||||||||||
| Total Clinical | $ | 19,785 | $ | - | NM(1) | |||||||||||||||
| Total Revenue | $ | 67,384 | $ | 35,948 | 87.4 | % | ||||||||||||||
(1) Percentage not meaningful.
For the three months ended March 31, 2026 and 2025, revenue increased by $31.4 million, or 87.4%, from $35.9 million in 2025 to $67.4 million in 2026.
Logistics revenue increased by $11.7 million, or 32.4%, from $35.9 million in 2025 to $47.6 million in 2026, driven by growth in flight hours with increased revenue per flight hour and ground transportation. The increase in flight hours is attributable to both existing and new clients, with several major new contracted clients commencing operations in the second quarter of the year 2025.
Clinical revenue was $19.8 million in the current year period, reflecting the acquisition of Keystone in mid-September 2025. There was no clinical revenue in the prior year period. Current-year clinical revenue consisted of transplant clinical revenue of $9.8 million and other clinical revenue of $9.9 million.
Gross Profit and Gross Margin
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||
| Gross profit: | |||||||||||||||||
| Logistics | $ | 9,165 | $ | 7,053 | 29.9 | % | |||||||||||
| Clinical | 4,952 | - | NM(1) | ||||||||||||||
| Total gross profit | $ | 14,117 | $ | 7,053 | 100.2 | % | |||||||||||
| Gross margin: | |||||||||||||||||
| Logistics | 19.3 | % | 19.6 | % | |||||||||||||
| Clinical | 25.0 | % | - | ||||||||||||||
| Total gross margin | 21.0 | % | 19.6 | % | |||||||||||||
(1) Percentage not meaningful.
For the three months ended March 31, 2026 and 2025, Logistics gross profit increased by $2.1 million, or 29.9%, from $7.1 million in 2025 to $9.2 million in 2026, attributable to the 32.4% increase in revenue, partially offset by a small decline in gross margin from 19.6% in 2025 to 19.3% in 2026. For the three months ended March 31, 2026, Clinical gross profit was $5.0 million with a gross margin of 25.0%, attributable to the acquisition of Keystone in mid-September 2025.
Total gross margin increased from 19.6% in 2025 to 21.0% in 2026, attributable primarily to the acquisition of Keystone in mid-September 2025, which operates at a higher average gross margin.
Selling, General and Administrative
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||
| General and administrative staff and related costs | $ | 5,761 | $ | 5,209 | 10.6 | % | |||||||||||
| Selling and marketing including staff costs | 584 | 223 | 161.9 | % | |||||||||||||
| Software development including staff costs | 1,118 | 719 | 55.5 | % | |||||||||||||
| Professional fees | 1,828 | 1,201 | 52.2 | % | |||||||||||||
| Facilities and insurance | 1,212 | 1,108 | 9.4 | % | |||||||||||||
| Stock-based compensation | 5,035 | 3,809 | 32.2 | % | |||||||||||||
| Depreciation and impairment of property and equipment | 67 | 61 | 9.8 | % | |||||||||||||
| Total selling, general and administrative | $ | 15,605 | $ | 12,330 | 26.6 | % | |||||||||||
| Percentage of revenue | 23 | % | 34 | % | |||||||||||||
For the three months ended March 31, 2026 and 2025, total selling, general and administrative expense increased by $3.3 million, or 26.6%, from $12.3 million in 2025 to $15.6 million in 2026.
The primary drivers of the increase were: (i) a $0.6 million increase in general and administrative staff and related costs attributable to the acquisition of Keystone in mid-September contributing $0.7 million, partially offset by the transfer of certain headquarters employees in connection with the sale of the Passenger business in the third quarter of 2025; (ii) a $0.4 million increase in selling and marketing attributable to the acquisition of Keystone and higher sales commissions; (iii) a $0.4 million increase in software development including staff costs driven by the integration of Keystone's software as well as software application costs incurred to separate our software from the Passenger platform; (iv) a $0.6 million increase in professional fees, driven by M&A-related transaction costs associated with potential acquisitions, as well as reorganization and restructuring costs following the sale of the Passenger business, including integration costs related to Keystone; and (v) a $1.2 million increase in stock-based compensation, driven by new PSUs granted in the past 12 months.
Amortization of intangible assets
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||
|
Amortization of intangible assets
|
$ | 1,486 | $ | 408 | 264.2 | % | |||||||||||
| Percentage of revenue | 2 | % | 1 | % | |||||||||||||
For the three months ended March 31, 2026 and 2025, amortization of intangible assets increased by $1.1 million, or 264.2%, from $0.4 million in 2025 to $1.5 million in 2026, attributable to amortization of intangibles generated from the acquisition of Keystone in mid-September 2025.
Other Non-Operating Income
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||
| Interest income, net | $ | 473 | $ | 1,321 | |||||||||||||
| Change in fair value of warrant liabilities | 1,459 | 2,752 | |||||||||||||||
| Change in fair value of assets and other liabilities | 3,444 | - | |||||||||||||||
|
Total other non-operating income
|
$ | 5,376 | $ | 4,073 | 32.0% | ||||||||||||
For the three months ended March 31, 2026, total other non-operating income consisted of: (i) $0.5 million interest income, net primarily attributable to our short-term investments and our money market funds in the current year period (lower interest income is attributable to lower invested balances compared to the prior year period); (ii) $1.5 million non-cash income due to fair value revaluation of warrant liabilities as the value of the warrant liabilities fluctuates with the warrants' market price; and (iii) $3.4
million of non-cash income from the remeasurement of assets and liabilities carried at fair value each reporting period, primarily driven by changes in the Company's share price affecting a financial liability settled in equity.
For the three months ended March 31, 2025, total other non-operating income consisted of: (i) $1.3 million interest income, attributable to short-term investments and money market funds; and a (ii) $2.8 million non-cash income due to fair value revaluation of warrant liabilities as the value of the warrant liabilities fluctuates with the warrants' market price.
Loss from discontinued operations, net of tax
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | % Change | ||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||
| Net loss from discontinued operations | $ | (248) | $ | (1,881) | (87) | % | ||||||||||||||
For the three months ended March 31, 2026, net loss from discontinued operations was $(0.2) million, consisting of a post-closing net working capital adjustment on the sale of the Passenger business of $0.3 million, net of tax benefit of $(0.1) million.
For the three months ended March 31, 2025, net loss from discontinued operations was $(1.9) million, consisting of operating loss before tax of $(1.9) million attributable to the Passenger business operations in the United States and Europe.
Adjusted EBITDA
The following table presents our consolidated results on a continuing operations basis for Adjusted EBITDA:
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||
| Adjusted EBITDA (1) | $ | 6,410 | $ | 416 | 1441 | % | |||||||||||
(1) See section below "Reconciliations of Non-GAAP Financial Measures" for more information and a reconciliation to the most directly comparable GAAP financial measure.
Comparison of the Three Months Ended March 31, 2026 and 2025
Adjusted EBITDA from continuing operations improved by $6.0 million for the three months ended March 31, 2026 from $0.4 million in 2025 to $6.4 million in 2026. The improvement is attributable to a $7.1 million increase in gross profit, partially offset by a $1.8 million increase in fixed costs, primarily driven by the addition of Keystone, acquired in mid-September 2025.
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP measure that has been derived from amounts calculated in accordance with GAAP, although it is not itself a GAAP measure. Strata believes that Adjusted EBITDA viewed in addition to and not in lieu of our reported U.S. GAAP results, provide useful information to investors by providing a more focused measure of operating results, enhancing the overall understanding of past financial performance and future prospects, and allowing for greater transparency with respect to a key metric used by management in its financial and operational decision making. The non-GAAP measure presented herein may not be comparable to similarly titled measures presented by other companies. Adjusted EBITDA is defined and reconciled to the nearest GAAP financial measure below.
Adjusted EBITDA
Defined as net income (loss) from continuing operations adjusted to exclude: (1) depreciation and amortization; (2) stock-based compensation; (3) change in fair value of warrant liabilities and other assets and liabilities; (4) interest income and expense; (5) income tax; and (6) certain other non-recurring items (shown below) that management does not believe are indicative of the Company's ongoing operating performance and would impact the comparability of results between periods.
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands, except percentages) | ||||||||||||||
| Net income (loss) from continuing operations | $ | 2,402 | $ | (1,612) | ||||||||||
| Add (deduct): | ||||||||||||||
| Depreciation and amortization | 3,060 | 1,224 | ||||||||||||
| Stock-based compensation | 5,035 | 3,809 | ||||||||||||
| Change in fair value of warrant liabilities | (1,459) | (2,752) | ||||||||||||
| Change in fair value of assets and other liabilities | (3,444) | - | ||||||||||||
| Interest income, net | (473) | (1,321) | ||||||||||||
| Legal expenses and regulatory advocacy fees (1) | 209 | 358 | ||||||||||||
| M&A transaction costs and integration of the acquired company (2) | 650 | 17 | ||||||||||||
| Reorganization and rebranding costs related to the sale of the Passenger business (3) | 419 | - | ||||||||||||
| Corporate staff costs included in the sold Passenger business (4) | - | 693 | ||||||||||||
| Other | 11 | - | ||||||||||||
| Adjusted EBITDA | $ | 6,410 | $ | 416 | ||||||||||
| Revenue | $ | 67,384 | $ | 35,948 | ||||||||||
| Adjusted EBITDA as a percentage of revenue | 9.5 | % | 1.2 | % | ||||||||||
(1) For the three months ended March 31, 2026, mainly includes settlement fees related to one specific legal matter. For the three months ended March 31, 2025, comprised of legal fees related to the Drulias class action lawsuit which the parties entered into a Stipulation of Settlement to fully resolve the matter in December 2025. We consider those matters to be non-recurring and not representative of the legal and regulatory advocacy costs typically incurred in the ordinary course of business.
(2) For the three months ended March 31, 2026, consists of M&A transaction costs (including legal fees and professional fees related to financial, legal, and tax due diligence) for potential acquisitions; and costs of integrating Keystone into a public company environment, including enterprise resource planning migration and software development costs to enhance its internally developed software to meet internal control standards.
(3) For the three months ended March 31, 2026, consists of rebranding costs related to the decommissioning of the Blade brand and the introduction of the Strata brand; one-time reorganization costs related to the restructuring of Strata headquarters following the transfer of certain positions to Joby Aviation; and software application costs incurred to separate our software from the Passenger platform.
(4) Represents corporate staff costs related to employees who transferred to Joby Aviation following the sale of the Passenger business on August 29, 2025. This adjustment is intended to enhance period-to-period comparability by excluding from all periods, costs associated with transferred employees whose corporate functions were not replaced. Under U.S. GAAP (ASC 205-20), these costs were required to remain in continuing operations prior to the divestiture because they were not directly attributable to discontinued operations.
Liquidity and Capital Resources
Sources of Liquidity
As of March 31, 2026 and December 31, 2025, we had total liquidity of $58.8 million and $61.2 million, respectively, consisting of cash and cash equivalents of $58.7 million and $31.0 million, respectively, and short-term investments of $0.1 million and $30.3 million, respectively. In addition, as of March 31, 2026 and December 31, 2025, we had restricted cash of $0.3 million and $0.3 million, respectively. The Company had net income of $2.2 million for the three months ended March 31, 2026.
With $58.8 million of total liquid funds as of March 31, 2026, we anticipate that we have sufficient funds to meet our current operational needs for at least the next 12 months from the date this Quarterly Report is filed. Although we have not historically relied on external sources of financing to help fund our operational needs, in January 2026 we entered into a revolving credit facility (the "ABL Facility") backed by our accounts receivable, that provides additional liquidity and financial flexibility. This facility provides for borrowings of up to $30.0 million and includes an accordion feature permitting increases of up to an additional $20.0 million, subject to lender consent and other conditions. The ABL Facility matures on January 30, 2029.
Borrowings under the ABL Facility bear interest, at the Company's election, at either (i) an adjusted term Secured Overnight Financing Rate ("SOFR") plus an applicable margin of 2.00% or (ii) a floating SOFR-based rate plus an applicable margin of 2.00%. The Company is also required to pay a commitment fee of 0.25% per annum on the unused portion of the facility. For further information on the ABL Facility, refer to Note 16 to the unaudited interim condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Liquidity Requirements
As of March 31, 2026, the Company had net working capital of $103.2 million, cash and cash equivalents of $58.7 million, and short-term investments of $0.1 million.
In the course of our business, we have certain contractual relationships with third-party aircraft operators pursuant to which we may be contingently required to make payments in the future. As of March 31, 2026, we had commitments to purchase flights from various aircraft operators with aggregate minimum flight purchase guarantees under CPAs of $2.3 million for the year ending December 31, 2026. See "-Capacity Purchase Agreements" within Note 12 to the unaudited interim condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information. Additionally, the Company has operating lease obligations related to real estate and vehicles with expected annual minimum lease payments of $0.7 million and $1.1 million for the years ending December 31, 2026 and 2027, respectively.
We may be required to make earn-out payments in connection with the acquisition of Keystone Perfusion Services, LLC, and may be entitled to receive earn-out proceeds in connection with the Passenger business divestiture. The fair value of the related contingent consideration assets and liabilities is included in the unaudited interim condensed consolidated balance sheets.
Based on our current liquidity, we believe that no additional capital will be needed to execute our current business plan over the next 12 months. Our longer-term liquidity requirement will depend on many factors including the pace of our expansion into new markets, our ability to attract and retain customers for our existing services, capital expenditures, and acquisitions.
Cash Flows
The cash flows of the discontinued Passenger business have not been separately presented and are included in the unaudited interim condensed consolidated statements of cash flows and the discussions below for all periods presented.
For 2025, Passenger cash flows are reflected from January 1 through the August 29, 2025 divestiture date, after which the related assets and liabilities were derecognized. Cash flows of Keystone are included beginning on the September 16, 2025 acquisition date. As a result, period-over-period changes may not be directly comparable.
The following table summarizes our cash flows for the periods indicated:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Net cash provided by / (used in) operating activities | $ | 3,885 | $ | (246) | |||||||
| Net cash provided by investing activities | 24,729 | 20,407 | |||||||||
| Net cash used in financing activities | (859) | (4,246) | |||||||||
| Effect of foreign exchange rate changes on cash balances | - | 126 | |||||||||
|
Net increase in cash and cash equivalents and restricted cash
|
$ | 27,755 | $ | 16,041 | |||||||
Cash Provided by / (Used In) Operating Activities
For the three months ended March 31, 2026, net cash provided by operating activities was $3.9 million, driven by net income of $2.2 million, adjusted for net non-cash items of $3.2 million and $1.5 million net cash used by changes in working capital assets and liabilities. The $1.5 million net cash used by changes in working capital assets and liabilities was primarily driven by: a decrease of $2.2 million in accounts payable and accrued liabilities driven by the payment of the 2025 short term incentive plan; partially offset by a decrease of $0.1 million in accounts receivable and a decrease of $0.4 million in prepaid and other current assets driven by timing of operator prepayments.
For the three months ended March 31, 2025, net cash used in operating activities was $0.2 million, driven by a net loss of $3.5 million and $0.7 million of net cash provided by changes in working capital assets and liabilities, adjusted for net non-cash items of $2.5 million. The $0.7 million of net cash provided by changes in working capital assets and liabilities was primarily driven by a decrease in prepaid expenses and other current assets of $2.3 million driven by timing of prepayments to Passenger business operators and an increase in deferred revenue of $1.3 million attributable to Passenger business retail customers prepayments, partially offset by a decrease in accounts payable and accrued expenses of $2.3 million, driven by the payment of the 2024 short term incentive plan and an increase in accounts receivable of $0.5 million.
Cash Provided by Investing Activities
For the three months ended March 31, 2026, net cash provided by investing activities was $24.7 million, driven by $30.5 million of proceeds from maturities of held-to-maturity investments; offset by $5.2 million in purchases of property and equipment, driven primarily by $3.7 million for the acquisition of an aircraft and $0.8 million of capitalized maintenance costs of the existing fleet; $0.3 million in capitalized software development costs; and $0.3 million in cash transferred with the sale of the Passenger business, driven by the final net working capital adjustment payment to the buyer.
For the three months ended March 31, 2025, net cash provided by investing activities was $20.4 million, driven by $107.8 million of proceeds from maturities of held-to-maturity investments; offset by $84.2 million in purchases of held-to-maturity investments, $2.6 million in purchases of property and equipment, consisting primarily of a spare engine and aircraft related capitalized maintenance costs for our fleet; and $0.5 million in capitalized software development costs, primarily for the Passenger app.
Cash Used In Financing Activities
For the three months ended March 31, 2026, net cash used in financing activities was $0.9 million, driven by $0.6 million in cash paid for payroll tax payments on behalf of employees in exchange for shares withheld by the Company and $0.3 million of debt issuance costs incurred with establishing the ABL Facility.
For the three months ended March 31, 2025, net cash used in financing activities was $4.2 million, reflecting $4.3 million in cash paid for payroll tax payments on behalf of employees in exchange for shares withheld by the Company.
Critical Accounting Policies and Significant Judgments and Estimates
This discussion and analysis of the Company's financial condition and results of operations is based on the Company's unaudited interim condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP. The preparation of these unaudited interim condensed financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. In accordance with U.S. GAAP, the Company bases its estimates on historical experience and on various other assumptions the Company believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
For information on the Company's significant accounting policies and estimates refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to these policies and estimates as of March 31, 2026.
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