BETA Technologies, Inc. Q3 FY2025 earnings call

Company Mission and Background - Founder Kyle Clark introduced the company's mission to redefine aviation via electric aviation, starting as his college senior thesis over 20 years ago. - Team has experience in designing high-reliability power electronics for various organizations. - Partnerships with Martine Rothblatt of United Therapeutics started focus on cargo, medical, and logistics. ### Certification Progress - Strategic stepwise buildup approach to certification: propeller in partnership with Hartzell achieved full type certification last summer; electric aircraft engine H500A, CX-300 (Part 23 FAA airplane) in certification process; A250 vertical takeoff and landing aircraft has closed G1 certification basis. - Commonality between models streamlines certification, production, and training. ### Orders and Backlog - Deposit-backed commercial aircraft backlog is $3.5 billion, component backlog crossed $1 billion, mostly from Embraer Eve deal; total backlog about 4x higher including post-sale services. - CTOL aircraft in demand due to operational economics, with backlog growing in this segment. ### Production and Investment - Invested $13 million in capital expenditures in Q3, with $25.7 million year-to-date; 188,000 square foot production facility online since late 2023. ### Financials - Q3 operating expenses $86.8 million, including $56.4 million in R&D; adjusted EBITDA for Q3 negative $67.6 million; ended Q3 with $687.6 million in cash; IPO proceeds of ~$1.1 billion received post-quarter end.

In the third quarter, revenue was $8.9 million, a significant increase from the same period last year. Year-to-date revenue through Q3 was $24.5 million. The company generates revenue through sales of electric propulsion systems and products/services related to its charging network. The electric propulsion systems, including motors, have seen earlier commercialization contributing to Q3 sales, and the charging network has growth in priority access fees. The firm has positive contribution margin from mature propulsion and charging products.

2025 Full-Year - Expected revenue in range of $29 million to $33 million. - Adjusted EBITDA expected in range of negative $295 million to negative $325 million. ### Future Plans - Continue certification and industrialization efforts; focus on leveraging engineering data and financial insights for long-term enterprise profitability.

Potential Risks - Regulatory approval process uncertainty which may delay product certification and market entry. - Supply chain fluctuations could impact production timelines and costs. - Intense market competition may affect market share.

Q: Anthony Valentini with Goldman Sachs asked about the source of certification metrics, whether provided by FAA or self-generated.

A: Kyle Clark responded that metrics are directly aligned with FAA order 8110, tracking both BETA's and FAA's progress, with examples like in CX300, 13 of 20 compliance plans submitted, 6 accepted by FAA.

Q: Kristine Liwag with Morgan Stanley inquired about the EIPP pilot project, including what it could look like and types of operations.

A: Kyle Clark said it involves both CTOL and VTOL, CTOL goes first, applications for states go in next week, BETA in many state applications for chargers, and could have flights as early as summer 2026 focusing on cargo medical logistics initially.

Q: Ron Epstein with Bank of America asked about supply chain and labor in ramping up.

A: Kyle Clark replied on vertical integration to manage supply chain, prebuy of semiconductors, and focus on reducing labor touch time, with examples like redesigned bonded wing reducing parts, fasteners, and build time. Herman Cueto added on working capital setup with deposits upon firm orders.

Q: Sheila Kahyaoglu with Jefferies asked about Eve partnership and marine applications.

A: Kyle Clark said Eve partnership led to $1 billion+ backlog, with more partnerships to come, and discussed expansion into marine applications for undersea mission-critical work.

Q: John Godyn with Citigroup asked about orders and aftermarket backlog.

A: Kyle Clark mentioned increased orders expected, focusing on quality of orders including terms and operators, and Herman Cueto elaborated on aftermarket revenue being significant over aircraft lifespan.

Q: Christopher Pierce with Needham asked about early learnings from customer deployments.

A: Kyle Clark talked about learnings on reserves, maintenance requirements, flight planning from overseas deployments, and how customers are integrating the aircraft into existing and new routes.

Q: Andre Madrid with BTIG asked about mVTOL military variant and international defense opportunity.

A: Kyle Clark explained about the MV-250 military variant, autonomy, hybridization, and active engagement with foreign allies in defense opportunities.