Beta Technologies, Inc. 2026 Q2 Earnings Call

Thank you for joining us for BETA Technologies second quarter 2026 earnings call. Joining me today are Kyle Clark, our Founder and Chief Executive Officer, and Herman Cueto, our Chief Financial Officer. Following their prepared remarks, we will open the call for Q&A, where Kristen Costello, Head of Government and Regulatory Affairs, will also be joining us. Earlier today, we issued a press release announcing our second quarter 2026 financial and operating results, as well as an investor presentation, which are both available on the investor relations section of our website. Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements. These statements are based on our current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially. Please refer to our filings with the SEC for a discussion of these risks.

We will also reference certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures can be found in our earnings materials. With that, I'll turn the call over to Kyle.

Thanks, Devon, and good morning, everyone. On our last call, we covered the growth of our commercial backlog, eIPP selections, and most importantly, continued certification progress. Today, we get to show you how our consistent focus has enabled us to execute on our plan. We'll go deeper on our key announcements from Farnborough, the MV-250, our hybrid flight demonstrations, and expanding partnerships with GE Aerospace, our charging partnership with Archer and Macquarie, and the order from Loganair. We'll also cover the launch of the eIPP operations, our flights in Japan and Hawaii, Under Secretary Duffy and the FAA Deputy Administrator Rochlow coming to Vermont, and our regular KPI update. These developments are connected. They come from the same plan: certify and produce aircraft designed around simplicity, develop the core propulsion technologies, aircraft systems, and components in-house, and carry those technologies across commercial and defense applications.

The work we complete on one program strengthens every other program, and the progress this quarter shows that strategy is working. The majority of our team is focused on certification. We have successfully worked through key policy interpretation issues of the FAA to enable solid progress in the certification of our H500A motor. On CX300, we reached a significant milestone that gives us a complete and agreed-upon foundation for the next phase of the certification program. Each of these milestones flow into certification of the ALIA-250 vertical takeoff and landing aircraft and continue to mature BETA's relationship with the FAA. In parallel, our manufacturing teams are developing the systems and procedures critical to achieving production certification immediately following the type certification of our motor and our aircraft.

At the same time, focus teams are expanding our charging component and defense businesses, all of which build on and contribute back to the same technological base. Switching gears to Farnborough, starting with a new order. Earlier this year, we flew across Scotland with Loganair and the Royal Mail, connecting Glasgow, Dundee, Aberdeen, Inverness, Wick, and Kirkwall, covering postal routes to some of the most remote communities in the U.K. Loganair watched our aircraft close through those missions and placed an order at Farnborough. This aircraft is positioned perfectly to provide low-cost, zero-emission access to the islands and highlands of Scotland and across the U.K. Cargo today, passengers in the future. Luke and the team at Loganair are world-class operators, and we're proud to see their tartan on our aircraft. Next, we unveiled the MV250.

The MV250 is the military variant of the civilian VTOL aircraft, combining hybrid propulsion and autonomous capabilities for contested logistics. Beyond its breakthrough capabilities, the important point is how we are building it. It is developed in the same core technologies already flying in our CTOL and VTOL aircraft, including batteries, motors, and flight control computers. This lets us move faster and at a lower cost compared to a clean sheet defense program. Our hybrid turbogenerator, developed in partnership with GE Aerospace, gives MV250 the range and onboard power required for the mission while proving its safety and reliability for future use in civilian applications. Our defense work is a powerful catalyst for cutting-edge technologies with applicability across our family of aircraft. This focus and portability has been a core part of our strategy since the early days here at BETA.

The MV250 carries a 2,000-pound payload over a 250-nautical-mile tactical range. It cruises at speeds above 170 knots, which is faster than any existing military rotorcraft, and has a projected repositioning range of over 1,300 nautical miles. It can self-deploy and operate from ships, austere locations, and forward positions that fixed-wing aircraft just can't reach. When it lands at a forward operating base, the turbogenerator keeps running to supply operational energy directly to the troops to recharge batteries, communications, and electronic warfare systems. It is a logistics platform and a power source in the same airframe. The MV250 is built on an open modular architecture that can integrate with a range of autonomous mission systems. That flexibility is important to military customers because it allows the aircraft to adapt as missions, operational requirements, and autonomy technologies evolve.

For military operations, we have integrated the Sikorsky MATRIX, a proven capability suite built for multi-mission applications. Alongside our commercial and defense developments, we hit a significant milestone with GE Aerospace, flying the Electrified Powertrain Flight Demonstration aircraft, or EPFD for short. Our partnership with GE Aerospace continues to expand. At Farnborough, we flew and jointly announced the successful test flights of the hybrid aircraft. BETA served as the integration partner on the EPFD, working alongside GE to successfully demonstrate the feasibility of hybrid propulsion on regional-scale passenger aircraft. BETA pilots flew the hybrid aircraft from our test facility in Plattsburgh, New York to Farnborough, England, and set a new altitude record for hybrid aircraft, over 30,000 feet. Flying at that altitude demonstrates the ability to operate where commercial flights do today. Hybrid electric propulsion has been part of our roadmap from the beginning.

Our partnership with GE Aerospace accelerated that development on two fronts. First, it advanced our joint work on the hybrid turbogenerator, and second, it opened up the door to integrate hybrid technology directly into regional passenger-scale aircraft. These economics open up regional and commuter routes that previously were not financially practical. EPFD proves that this path is viable, and it provides a wealth of data that flows into our continued partnership with GE. This milestone required regulatory approval from the FAA, regulators in Canada, Greenland, Iceland, and U.K.'s Civil Aviation Authority. BETA and GE's shared commitment to safety and working closely with the regulators made that possible. Next, I want to give you an update on a few other defense developments before we move on. In April, we received our first special airworthiness certificate for an optionally piloted aircraft, or OPA, for N709JL, an ALIA CTOL aircraft.

This aircraft has already completed its first autonomous flights, flying with both BETA's internal autonomy stack and Sikorsky's MATRIX stack. Autonomy is foundational to the MV250 program, and using our CX300 aircraft as a test bed for this technology is a testament to the flexibility of our architecture and our platform. Also, during the second quarter, at the invitation of the U.S. Army, we deployed our ALIA aircraft to a live-fire exercise, Aurora 2026, in Sweden, supporting NATO's eastern flank deterrence initiative. We flew alongside conventional and military assets, supporting logistics operations in a complex environment. We completed the deployment flying 30 sorties and using only about $300 of electricity. Beyond an excellent demonstration of our aircraft, the operational data we brought back is directly informing our development of the MV250.

On our work with General Dynamics, we have moved into phase 2 on our internal classified programs and entered phase 1 of a new and separate program providing critical hardware solutions. And those are just the two that I can mention. Undersea applications have become a meaningful and growing area for BETA, and our work continues to expand the aperture of where this platform can operate. Beyond classified work, our component sales business continues to grow. Shortly after the end of the quarter, we announced a sale of flight control computers and software licensing to Horizon for their Cavorite X7 aircraft. This technology has historically come from a short list of legacy aerospace suppliers. We developed ours in-house to the same standard designed for powered lift aircraft. Horizon chose our flight control computers because they met the high bar that aircraft certification demands.

This is the third major aircraft program flying on our flight control computers. We have talked on prior calls about what motor sales to Eve and hardware sales to General Dynamics meant to our component sales business. Flight control computers extend that further. We are now selling motors, batteries, and flight control computers. Other OEMs are looking to BETA to provide the same high-reliability flight critical systems for their aircraft, and the portfolio they are choosing from continues to grow. Every time we add a component to that list, our customer base expands, and our technology gets proven across more platforms. At their core, these are enabling technologies, built from the first principles of our own aircraft and valuable to the industry precisely because of that. We built the technology that now others have adopted.

Before we get into KPIs, I want to cover our work with the Department of Transportation and FAA on the launch of eIPP operations. On June 1st, Secretary Duffy came to BETA. He flew three sorties in our CTOL, in our VTOL, and alongside our hybrid aircraft. He is the first U.S. Secretary of Transportation in history to fly an electric aircraft. The administration came to Vermont, got in our aircraft, and went flying with us. This is the product of years of building trust and working alongside the people and agencies building this regulatory environment. On July 12th, United Therapeutics became the first to launch operations under the eIPP, flying two of our aircraft in Maryland and Virginia to transport an organ. We were the first company in the program to reach that milestone. BETA launched in 2017 with United Therapeutics as our first customer.