Overview of the Company’s Financial Performance

Bridger Aerospace Group Holdings, Inc. (Bridger) is a provider of aerial wildfire surveillance, relief and suppression services, as well as airframe modification and integration solutions for governmental and commercial customers. The company’s operations are organized across three core offerings: Fire Suppression, Aerial Surveillance, and Maintenance, Repair and Overhaul (MRO).

Bridger’s financial performance in the year ended December 31, 2024 showed strong growth compared to the prior year. Revenues increased by 48% to $98.6 million, driven by higher demand for the company’s fire suppression and aerial surveillance services, as well as the addition of MRO revenue from the acquisition of Flight Test & Mechanical Solutions, Inc. (FMS) in June 2024.

The increase in revenues, combined with disciplined cost management, led to a 62% improvement in gross income to $41.1 million. However, Bridger’s operating income was impacted by a decrease in selling, general and administrative (SG&A) expenses, which declined by 57% year-over-year. This was primarily due to a significant reduction in stock-based compensation expense compared to 2023, when the company incurred one-time costs related to the reverse recapitalization transaction.

Despite the improvement in operating performance, Bridger reported a net loss of $15.6 million for the year ended December 31, 2024, compared to a net loss of $77.4 million in the prior year. This was largely due to higher interest expense associated with the company’s debt obligations.

Revenue and Profit Trends

Bridger’s revenue growth was driven by the following key factors:

• Fire suppression revenue increased by 19% to $66.8 million, reflecting higher flight hours for the company’s Super Scooper aircraft due to a more intense U.S. wildfire season in 2024 compared to 2023.
• Aerial surveillance revenue grew by 34% to $13.1 million, primarily due to the higher utilization rate of the company’s Pilatus PC-12 aircraft compared to the Twin Commander aircraft used in the prior year.
• MRO revenue was $13.9 million in 2024, compared to just $48,000 in 2023, driven by the return-to-service work performed on the Spanish Scooper aircraft and the acquisition of FMS.
• Other services revenue, which includes third-party training and flight operations, increased by 436% to $4.9 million.

The company’s gross margin improved from 38% in 2023 to 42% in 2024, reflecting the higher revenue and the company’s ability to manage costs. However, Bridger’s net loss margin improved from -116% in 2023 to -16% in 2024, primarily due to the decrease in SG&A expenses.

Strengths and Weaknesses

Bridger’s key strengths include:

• Specialized fleet of aircraft and expertise in aerial firefighting operations
• Diversified revenue streams across fire suppression, aerial surveillance, and MRO services
• Increasing demand for the company’s services due to the growing threat of wildfires
• Disciplined cost management and operational efficiency

Weaknesses include:

• Reliance on a limited number of suppliers for specialized aircraft and parts
• Exposure to macroeconomic factors such as inflation, supply chain disruptions, and volatile fuel prices
• Seasonality of the business, with the majority of revenue generated in the second and third quarters

Outlook

Bridger’s long-term outlook remains positive, driven by the increasing demand for its services and the company’s ability to meet those demands consistently. However, the company may continue to face operational challenges in the near term due to the impact of macroeconomic factors and industry-specific trends.

The company believes that its existing cash and cash equivalents, as well as cash generated from operations, will be sufficient to meet its current working capital and capital expenditure requirements for at least the next 12 months. Bridger may seek additional financing, such as equity or debt offerings, to fund future growth initiatives or significant acquisition opportunities.

Overall, Bridger’s financial performance in 2024 demonstrated its ability to navigate a challenging operating environment and capitalize on the growing demand for its specialized aerial firefighting services. The company’s focus on operational efficiency, diversification, and strategic investments positions it well for continued growth and success in the years ahead.