Beta Technologies Inc.

11/03/2026 | Press release | Distributed by Public on 11/03/2026 08:27

Quarterly Report for Quarter Ending September 30, 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 on Form 10-K for the year ended December 31, 2025 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 on Form 10-K for the year ended December 31, 2025, 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
BETA is an aerospace and defense company designing, manufacturing, and selling high-performance electric aircraft, advanced electric propulsion systems, components, and charging systems to top operators worldwide. 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 continuing to develop highly scalable technologies that can be tailored to and deployed for cost-effective and safe missions across cargo and logistics, defense, passenger, and medical end markets. Our intentional approach to designing electric aircraft allows us to service a variety of end markets and mission types while 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, we have devoted substantially all of our time and efforts to performing research and development activities, raising capital, recruiting management and technical staff to support these operations, and designing manufacturing processes.
Recent Developments
The Federal Aviation Administration ("FAA") has awarded BETA's ALIA VTOL ("A250") aircraft, N250XT, a Special Airworthiness Certificate for market surveys, marking the first such authorization granted to an electric VTOL aircraft. BETA's A250 completed its first flight under the new market survey authorization on October 20, 2026. The FAA authorization enables BETA to conduct flights with operators and key stakeholders and expands the geographic scope of BETA's VTOL operations, providing greater flexibility to demonstrate the capabilities of electric vertical flight across a wider range of operating conditions, subject to applicable FAA limitations.
Results of Operations
Comparison of Results for the Three and Nine Months Ended September 30, 2026 and 2025
The following table presents selected financial information for the periods presented (dollars in thousands):
Three Months Ended
September 30, 		Increase (Decrease)
($) 		Increase (Decrease)
(%) 		Nine Months Ended
September 30, 		Increase (Decrease)
($) 		Increase (Decrease)
(%)
2026 2025 2026 2025
Revenues:
Product
$ 5,184 $ 2,917 $ 2,267 78 % $ 9,427 $ 7,993 $ 1,434 18 %
Service
12,488 6,001 6,487 * 33,036 16,490 16,546 *
17,672 8,918 8,754 98 % 42,463 24,483 17,980 73 %
Cost of revenues:
Product
2,516 1,660 856 52 % 4,773 2,255 2,518 *
Service
2,417 1,081 1,336 * 11,098 3,415 7,683 *
4,933 2,741 2,192 80 % 15,871 5,670 10,201 *
Gross margin:
Product
2,668 1,257 1,411 * 4,654 5,738 (1,084) (19 %)
Service
10,071 4,920 5,151 * 21,938 13,075 8,863 68 %
12,739 6,177 6,562 * 26,592 18,813 7,779 41 %
Operating expenses:
Research and development
90,536 56,371 34,165 61 % 304,640 170,484 134,156 79 %
General and administrative
50,007 30,380 19,627 65 % 140,831 86,241 54,590 63 %
Total operating expenses
140,543 86,751 53,792 62 % 445,471 256,725 188,746 74 %
Loss from operations
(127,804) (80,574) 47,230 59 % (418,879) (237,912) 180,967 76 %
Other (income) expense:
Interest income
(12,515) (2,628) 9,887 * (40,289) (7,348) 32,941 *
Interest expense
3,678 3,464 214 6 % 10,956 9,214 1,742 19 %
Loss on issuance of convertible preferred stock - 355,551 (355,551) * - 355,551 (355,551) *
Total other (income) expense
(8,837) 356,387 365,224 * (29,333) 357,417 386,750 *
Loss before income taxes
(118,967) (436,961) (317,994) (73 %) (389,546) (595,329) (205,783) (35 %)
Provision for income taxes
152 253 (101) (40 %) 635 580 55 9 %
Net loss
$ (119,119) $ (437,214) $ (318,095) (73 %) $ (390,181) $ (595,909) $ (205,728) (35 %)
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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, engines, 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 charging stations.
Product revenues increased by $2.3 million, or 78%, during the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was attributable to the delivery of ground service equipment ("GSE") to commercial and government customers of $4.3 million during 2026, offset by the delivery of electric propulsion engines to commercial customers totaling $2.0 million during 2025.
Product revenues increased by $1.4 million, or 18%, during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was attributable to the delivery of GSE to commercial and government customers of $7.8 million during 2026, offset by the delivery of electric propulsion engines and batteries to commercial customers totaling $6.4 million during 2025.
Service revenues increased by $6.5 million during the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily attributable to contracts with commercial customers of $9.1 million related to engineering and consulting services to support our customers' research and development activities, offset by $2.6 million related to completion of services for the U.S. government during 2025.
Service revenues increased by $16.5 million during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily attributable to contracts with commercial customers of $22.5 million related to engineering and consulting services to support our customers' research and development activities, offset by $6.0 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 $0.9 million, or 52%, and by $2.5 million during the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025, respectively. The increases were attributable to labor and material costs to fulfill contracts with commercial and government customers.
Cost of service revenues increased by $1.3 million and $7.7 million during the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025, respectively. The increases were attributable to labor and material costs to fulfill contracts with commercial customers.
Research and Development Expenses
Research and development expenses are attributable to continued spend related to the development of our electric aircraft and Enabling Technologies. The increases to research and development expenses were attributable to the following (in millions):
Three Months Ended
September 30, 2026 		Nine Months Ended
September 30, 2026
Parts and materials $ 2.8 $ 21.8
Labor costs, including stock-based compensation 17.2 48.7
Warrant expense 5.5 16.8
Acquisition-related expense - 16.1
Asset disposal and other related costs 5.1 10.4
Professional fees 1.2 10.9
Other 2.4 9.5
$ 34.2 $ 134.2
General and Administrative Expenses
General and administrative expenses increased $19.6 million, or 65%, during the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was attributable to increased stock-based compensation expense of $3.2 million, salaries and benefits of $8.6 million due to increased headcount, $4.6 million of professional fees, and $3.2 million of other administrative costs.
General and administrative expenses increased $54.6 million, or 63%, during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was attributable to increased stock-based compensation expense of $19.5 million, salaries and benefits of $20.7 million due to increased headcount, $7.0 million of professional fees, and $7.4 million of other administrative costs.
Other (Income) Expense
Interest income increased $9.9 million and $32.9 million during the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025, respectively. The increases were attributable to interest on the proceeds from convertible preferred stock offerings and the IPO.
Interest expense increased $0.2 million, or 6%, and $1.7 million, or 19%, during the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025, respectively. The increases were attributable to a sale-leaseback transaction that occurred during 2025.
Provision for Income Taxes
The changes in the provision for income taxes during the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025 were primarily due to changes 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 loss on issuance of convertible preferred stock, stock-based compensation, warrant expense, acquisition-related expense, asset disposal and other related costs, 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
September 30, 		Nine Months Ended
September 30,
2026 2025 2026 2025
Net loss $ (119,119) $ (437,214) $ (390,181) $ (595,909)
Increase (decrease) as adjusted for:
Interest income (12,515) (2,628) (40,289) (7,348)
Interest expense 3,678 3,464 10,956 9,214
Provision for income taxes 152 253 635 580
Depreciation and amortization 6,896 5,794 19,369 16,314
EBITDA $ (120,908) $ (430,331) $ (399,510) $ (577,149)
Loss on issuance of convertible preferred stock - 355,551 - 355,551
Stock-based compensation 11,055 5,205 49,145 16,819
Warrant expense
5,760 308 17,091 308
Acquisition-related expense(1)
- - 16,147 -
Asset disposal and other related costs 6,411 932 12,153 2,473
IPO costs(2)
233 760 469 1,310
Adjusted EBITDA $ (97,449) $ (67,575) $ (304,505) $ (200,688)
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(1)Includes acquired IPR&D expense of $15,003 and direct transaction costs of $1,144.
(2)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 September 30, 2026, we had cash and cash equivalents of $1,343 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 on Form 10-K for the year ended December 31, 2025.
Our principal uses of cash in recent periods were to fund our research and development activities, personnel costs, and support services, including our battery, engine, 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 to support our growth in operations, and production of electric aircraft and Enabling Technologies. 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 leasehold improvements, our charging network, and aircraft components.
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.
Sources of Cash
The following table sets forth our cash flows for the periods indicated (in thousands):
Nine Months Ended
September 30,
2026 2025
Net cash (used in) provided by:
Operating activities $ (271,378) $ (183,386)
Investing activities (103,772) (24,367)
Financing activities 8,099 598,380
Effect of currency translation on cash, cash equivalents, and restricted cash (119) (20)
Net (decrease) increase in cash, cash equivalents, and restricted cash $ (367,170) $ 390,607
Operating Activities
For the nine months ended September 30, 2026, net cash used in operating activities was $271.4 million, primarily due to a net loss of $390.2 million, offset by non-cash charges of $106.3 million, and adjusted by a change in operating assets and liabilities that provided a net source of cash of $12.5 million. This source of cash primarily reflected a decrease in prepaid expenses and other current assets.
For the nine months ended September 30, 2025, net cash used in operating activities was $183.4 million, primarily due to a net loss of $595.9 million, offset by non-cash charges of $393.1 million, and adjusted by a change in operating assets and liabilities that provided a net source of cash of $19.4 million. This source of cash primarily reflected an increase in accounts payable, accrued expenses, and current liabilities.
Investing Activities
For the nine months ended September 30, 2026 and 2025, we used $103.8 million and $24.4 million in cash, respectively, to fund capital expenditures, including investment in machinery and equipment, buildings, leasehold improvements, and purchases of aircraft components to support our growth in operations. For the nine months ended September 30, 2025, net cash used to purchase property and equipment was partially offset by proceeds from the sale of property and equipment.
Financing Activities
For the nine months ended September 30, 2026, net cash provided by financing activities was $8.1 million, primarily from the exercise of stock options, offset by repayment of borrowings and other financing activities. For the nine months ended September 30, 2025, net cash provided by financing activities was $598.4 million, primarily due to the proceeds received from issuances of our convertible preferred stock.
Contractual Obligations and Commercial Commitments
As of September 30, 2026, there were no material changes to our contractual obligations and commercial commitments in the audited consolidated financial statements included within our Annual Report on Form 10-K for the year ended December 31, 2025, other than those described in Note 6 "Leases" of our condensed consolidated financial statements.
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 nine months ended September 30, 2026, there have been no material changes to our critical accounting estimates included in the Company's Annual Report on Form 10-K 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 toward 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 November 03, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 03, 2026 at 14:28 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]