Beta Technologies Inc.

05/12/2026 | Press release | Distributed by Public on 05/12/2026 07:37

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 should be read in conjunction with our condensed consolidated financial statements and related notes, and other financial information, included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report filed with the SEC on March 9, 2026. As discussed in the section titled "Special Note Regarding Forward-Looking Statements," the following discussion contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, including those discussed below and in the section titled "Risk Factors" included under Part II, Item 1A below, as well as in the Annual Report, all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We assume no obligation to update any of these forward-looking statements. Unless otherwise indicated or the context otherwise requires, all references in this section to the "Company," "BETA," "we," "us" or "our" refer to BETA Technologies, Inc. and its consolidated subsidiaries.
Overview
We are redefining the aerospace industry. We have developed an electric aircraft platform and propulsion systems that are positioned to transform the aviation industry; entering into a new phase of growth. We design, manufacture and sell high-performance electric aircraft, advanced electric propulsion systems, charging systems and components. Further, we have invested in the underlying infrastructure of this breakthrough technology, which is critical to bringing electric aviation to life. We believe we have developed a differentiated presence in North America and are well positioned to expand globally.
We are developing highly scalable technologies that can be tailored to and deployed for cost-effective and safe missions across cargo and logistics, medical, defense and passenger end markets. Our simplified approach to designing electric aircraft allows us to service a variety of end markets and mission types leveraging the same core technologies. The portability of our technologies and systems across various aircraft also unlocks flexibility to innovate on future generations of aircraft.
Since inception, the Company has devoted substantially all of its time and efforts to performing research and development activities, raising capital, recruiting management and technical staff to support these operations and designing manufacturing processes. During the three months ended March 31, 2026, the Company continued to make investments across facilities, equipment and tooling needed to move toward manufacturing of its aircraft and charging systems.
Recent Developments
On March 9, 2026, BETA was named in the selections made by the U.S. Department of Transportation and Federal Aviation Administration as a launch participant in its eVTOL Integration Pilot Program ("eIPP"). The program is designed to accelerate the safe deployment of electric and vertical flight in the U.S. The Company was selected to participate in seven of eight eIPP launch programs and is expecting to operate in at least 10 states across the U.S. and include flight operations with ALIA CTOL and VTOL aircraft, as well as ground support operations utilizing the Company's ground service equipment ("GSE").
On March 12, 2026, BETA and Surf Air Mobility Inc. entered into a purchase agreement for a firm order of 25 ALIA CTOL aircraft and the option to purchase up to 75 additional aircraft.
Results of Operations
Comparison of Results for the Three Months Ended March 31, 2026 and 2025
The following table presents selected financial information for the periods presented (dollars in thousands):
Three Months Ended March 31, Increase (Decrease)
($) 		Increase (Decrease)
(%)
2026 2025
Revenues:
Product
$ 963 $ 2,488 $ (1,525) (61 %)
Service
9,170 7,111 2,059 29 %
10,133 9,599 534 6 %
Cost of revenues:
Product
596 533 63 12 %
Service
3,705 1,205 2,500 *
4,301 1,738 2,563 *
Gross margin:
Product
367 1,955 (1,588) (81 %)
Service
5,465 5,906 (441) (7 %)
5,832 7,861 (2,029) (26 %)
Operating expenses:
Research and development
91,739 57,864 33,875 59 %
General and administrative
47,050 28,014 19,036 68 %
Total operating expenses
138,789 85,878 52,911 62 %
Loss from operations
(132,957) (78,017) 54,940 70 %
Other (income) expense:
Interest income
(14,481) (2,697) 11,784 *
Interest expense
3,617 2,860 757 26 %
Total other (income) expense
(10,864) 163 11,027 *
Loss before income taxes
(122,093) (78,180) 43,913 56 %
Provision for income taxes
216 98 118 *
Net loss
$ (122,309) $ (78,278) $ 44,031 56 %
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* Percentage increase (decrease) is not meaningful
Revenues
Our product revenue is primarily generated from the sale of tangible products such as our batteries, motors, flight control systems and an international network of electric charging and related equipment ("Enabling Technologies"). Our service revenue is primarily generated from engineering, consulting and other service arrangements for our customers. Service revenue also includes revenue associated with usage of and priority access to our charge stations.
Product revenues decreased by $1.5 million, or 61%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was attributable to the delivery of electric propulsion motors and batteries to commercial customers totaling $2.3 million during 2025, offset by a new contract with a commercial customer to deliver GSE of $0.8 million during 2026.
Service revenues increased by $2.1 million, or 29%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was attributable to contracts with commercial customers of $6.2 million related to engineering and consulting services to support our customers' research and development activities and $0.1 million related to priority access to the Company's charging stations, offset by $4.2 million related to completion of services for the U.S. government during 2025.
Cost of Revenues
Cost of product revenues and service revenues may include the direct cost of materials, labor, subcontractors and overhead costs (where allowable), depending on the nature of the agreement. Included within cost of product revenues are purchases made directly for contractual performance obligations primarily recognized over time and as such, no inventories are recorded in the condensed consolidated balance sheets.
Cost of product revenues increased by $0.1 million, or 12%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was attributable to labor and material costs to fulfill contracts with commercial customers.
Cost of service revenues increased by $2.5 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was attributable to an increase of $2.8 million in labor and material costs to fulfill contracts with commercial customers, partially offset by $0.3 million due to completion of services for the U.S. government during 2025.
Research and Development Expenses
We have invested in research and development for our electric aircraft and Enabling Technologies. We manage our expenses based on several factors, including industry conditions and expected demand for our products and services.
Research and development expenses increased $33.9 million, or 59%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was attributable to continued spend related to the development, testing, certification, and prototype production of our electric aircraft, electric propulsion systems, charging solutions and network. As part of these efforts, we incurred increased expenses for parts and materials of $7.5 million, labor costs including stock-based compensation expense of $14.1 million, warrant expense of $5.6 million resulting from the collaborative arrangement with GE Aerospace and other expenses of $6.7 million.
General and Administrative Expenses
General and administrative expenses increased $19.0 million, or 68%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was attributable to increased stock-based compensation expense of $10.3 million, salaries and benefits of $4.4 million due to increased headcount, $2.0 million of professional fees and $2.3 million of other administrative costs.
Other (Income) Expense
Interest income increased $11.8 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was attributable interest on the proceeds from convertible preferred stock offerings and the IPO.
Interest expense increased $0.8 million, or 26%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was attributable to a sale-leaseback transaction that occurred during 2025.
Provision for Income Taxes
Provision for income taxes increased by $0.1 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to an increase in tax on foreign earnings.
Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
We define EBITDA as net loss adjusted for interest income, interest expense, provision for income taxes and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for stock-based compensation expense, warrant expense, loss on disposal of property and equipment and IPO costs.
In addition to traditional financial metrics, we use EBITDA and Adjusted EBITDA to help us evaluate our business. We believe that these non-GAAP measures provide useful information to investors because they allow for greater transparency into what measures we use in operating our business and measuring our performance and enable comparison of financial trends and results between periods where items may vary independent of business performance. These non-GAAP measures are presented for supplemental informational purposes and should not be considered as substitutes for or superior to financial information presented in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude certain expenses that are required by GAAP to be recorded in our financial statements, and they are subject to inherent limitations as they reflect the exercise of judgment by our management about which expenses are excluded or included in determining these non-GAAP financial measures. Further, non-GAAP financial measures are not standardized. It may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. In addition, investors are encouraged to review our condensed consolidated financial statements and the notes thereto in their entirety and not to rely on any single financial measure.
A reconciliation between net loss, the most directly comparable GAAP financial measure, and the non-GAAP financial measures is as follows (in thousands):
Three Months Ended March 31,
2026 2025
Net loss $ (122,309) $ (78,278)
Increase (decrease) as adjusted for:
Interest income (14,481) (2,697)
Interest expense 3,617 2,860
Provision for income taxes 216 98
Depreciation and amortization expense 6,151 5,121
EBITDA $ (126,806) $ (72,896)
Stock-based compensation expense 23,416 7,307
Warrant expense
5,634 -
Loss on disposal of property and equipment
331 871
IPO costs(1)
179 -
Adjusted EBITDA $ (97,246) $ (64,718)
______________
(1)Represents accounting and advisory expenses incurred in connection with becoming and operating as a public company.
Liquidity and Capital Resources
We have incurred net losses and negative operating cash flows from operations since we were formed and began designing our electric aircraft in 2018 and we expect to continue to incur losses and negative operating cash flows for the foreseeable future until we successfully commence sustainable commercial operations. Historically, our primary sources of liquidity have been borrowings under our Ex-Im Credit Facility, equity financings, government funding and consideration from contracts with customers, as well as the proceeds from our IPO and the sale-leaseback transaction. To date, our primary use of capital has been for the development of our electric aircraft and Enabling Technologies. As of March 31, 2026, we had cash and cash equivalents of $1,589 million. Until we generate sufficient operating cash flow to fully cover our operating expenses, working capital needs and planned capital expenditures, or if circumstances evolve differently than anticipated, we expect to utilize a combination of equity and debt financings to fund any future remaining capital needs. If we raise funds by issuing equity securities, dilution to stockholders may result. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of common stock. If we raise funds by issuing debt securities, these debt securities may have rights, preferences and privileges senior to those of common stockholders. The terms of debt securities or borrowings could impose significant restrictions on our operations. The capital markets have, in the past, and may, in the future, experience periods of volatility that could impact the availability and cost of equity and debt financing. We can give no assurances that we will be able to secure such additional sources of funds to support our operations or, if such funds are available to us, that such additional financing will be sufficient to meet our needs. See the heading "Our business plan requires a significant amount of capital. We expect to require additional future funding to support our operations and implementation of our growth plans and we may be unable to access the capital and credit markets or borrow on affordable terms to obtain additional capital that we may require" in Part I, Item 1A. "Risk Factors" included in the Annual Report for the year ended December 31, 2025.
Our principal uses of cash in recent periods were to fund our research and development activities, personnel cost and support services, including our battery, motor and charging services. Near-term cash requirements will also include spending on research and development of emerging technologies, strategic growth initiatives, including obtaining certifications and manufacturing our aircraft, commercial and go-to-market infrastructure. We do not have material cash requirements related to current contractual obligations. As such, our cash requirements are highly dependent upon management's decisions about the pace and focus of both our short and long-term spending.
Cash requirements can fluctuate based on business decisions that could accelerate or defer spending, including the timing or pace of certification, investments, infrastructure and production of electric aircraft and Enabling Technologies. Our future capital requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash or grants received from our customers or governmental entities, respectively, the expansion of sales and marketing activities and the timing and extent of spending to support development efforts, including collaborative arrangements.
Capital Expenditures
During the three months ended March 31, 2026 and 2025, we used $24.2 million and $6.3 million in cash, respectively, to fund capital expenditures. We anticipate incurring additional capital expenditures during the remaining portion of the year ending December 31, 2026, primarily related to the investment in machinery and equipment, buildings and our charging network.
Sources of Cash
The following table sets forth our cash flows for the periods indicated (in thousands):
Three Months Ended March 31,
2026 2025
Net cash used in:
Operating activities $ (95,360) $ (58,262)
Investing activities (24,176) (6,250)
Financing activities (1,248) (310)
Effect of currency translation on cash, cash equivalents and restricted cash (41) (1)
Net decrease in cash, cash equivalents and restricted cash $ (120,825) $ (64,823)
Operating Activities
We continue to experience negative cash flows from operations as we develop our electric aircraft and Enabling Technologies and prepare for the future commercialization of our products and services. Our cash flows from operating activities are significantly affected by our expenditures in research and development and overhead manufacturing related to the scaling of our operations. Our operating cash flows are also affected by our working capital needs to support growth, personnel-related expenditures, accounts payable and other current assets and liabilities.
For the three months ended March 31, 2026, net cash used in operating activities was $95.4 million, primarily due to a net loss of $122.3 million and cash used by changes in operating assets and liabilities of $9.4 million, offset by non-cash charges including $6.2 million related to depreciation and amortization, $23.4 million related to stock-based compensation, $5.6 million of warrant expense and $1.1 million of other non-cash charges. For the three months ended March 31, 2026, cash used by changes in operating assets and liabilities of $9.4 million was primarily attributable to a decrease in accounts payable, accrued expenses and current liabilities of $7.1 million.
For the three months ended March 31, 2025, net cash used in operating activities was $58.3 million, primarily due to a net loss of $78.3 million, offset by non-cash charges including $5.1 million related to depreciation and amortization, $7.3 million related to stock-based compensation, $1.5 million of other non-cash charges and $6.1 million of cash provided by changes to operating assets and liabilities. For the three months ended March 31, 2025, cash provided by changes to operating assets and liabilities of $6.1 million was primarily attributable to an increase in accounts payable, accrued expenses and current liabilities of $4.5 million.
Investing Activities
We continue to experience negative cash flows from investing activities as we build our infrastructure and purchase equipment to support the development and commercialization of our electric aircraft and charging network. Cash flows used in investing activities primarily relate to capital expenditures to support our growth in operations, including expenditures related to the construction and expansion of our charging and production facilities, acquisitions of machinery and equipment and tooling and technology infrastructure, partially offset by proceeds from sales of property and equipment.
For the three months ended March 31, 2026, net cash used in investing activities was $24.2 million, due to net purchases of property and equipment.
For the three months ended March 31, 2025, net cash used in investing activities was $6.3 million, primarily due to net purchases of property and equipment of $6.7 million, offset by proceeds from the sale of property and equipment.
Financing Activities
For the three months ended March 31, 2026, net cash used in financing activities was $1.2 million, primarily due to repayment of borrowings of $1.4 million, offset by other financing activities.
For the three months ended March 31, 2025, net cash used in financing activities was $0.3 million, primarily due to proceeds from convertible Series C preferred stock issuances of $0.8 million, offset by payment of convertible Series C preferred stock issuance costs of $1.6 million and other financing activities.
Contractual Obligations and Commercial Commitments
As of March 31, 2026, there were no material changes to our contractual obligations and commercial commitments from those described in Note 5 "Notes Payable" and Note 6 "Leases" in the audited consolidated financial statements included within our Annual Report for the year ended December 31, 2025.
Critical Accounting Estimates
In connection with preparing our condensed consolidated financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expense and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time we prepare our consolidated financial statements. However, because future events and their effects cannot be determined with certainty, actual results could differ materially from our assumptions and estimates. During the three months ended March 31, 2026, there have been no material changes to our critical accounting estimates included in the Annual Report for the year ended December 31, 2025, other than as described below.
PSUs
We measure PSUs granted to employees and non-employees based on the fair value on the date of the grant. We recognize compensation expense over the requisite service period, which is adjusted at each reporting period based on the probability and timing of performance achievement. We estimate the probability and timing of achievement based on available information regarding progress made towards performance objectives at each reporting period. If we later determine that achievement of a performance objective is no longer probable, the associated expense previously recognized will be reversed.
Recently Issued Accounting Pronouncements
See Note 2 "Basis of Presentation and Accounting Policies" to our condensed consolidated financial statements for a discussion of recent accounting pronouncements.
Emerging Growth Company Status
See Note 2 "Basis of Presentation and Accounting Policies" to our condensed consolidated financial statements for a discussion of our status as an emerging growth company.
Off-Balance Sheet Arrangements
We have no material off-balance sheet arrangements.
Beta Technologies Inc. published this content on May 12, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 12, 2026 at 13:37 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]