BETA Technologies, Inc. Q1 FY2026 earnings call

Commercial Progress and EIPP Award

• Beta Technologies was awarded 7 out of 8 possible selections for the FAA/US DOT eVTOL Integration Pilot Program (EIPP), more than any other aircraft developer, covering 26 states. This award accelerates commercialization efforts by over 1 year, aligns with the company's stepwise go-to-market strategy starting with cargo/medical operations then passenger transport, and starting with CTOL then VTOL missions. • Added $375 million to the commercial aircraft backlog, growing total backlog to $3.9 billion (991 firm and option aircraft), nearing the 2026 full-year target of $4 billion. • Secured a new aircraft order from Surf Air Mobility, completed a multi-month demonstration with Air New Zealand, and continued operational trials with Logan Air/Royal Mail in the UK and SOGIS/Yamato in Japan.

Infrastructure and Charging Network

• Added 16 new charging sites since the last earnings call, bringing the total network to 123 sites. The Florida Department of Transportation signed a contract for 34 chargers plus thermal management systems to support EIPP operations, pulling forward infrastructure revenue. • Beta's expertise in charging permitting and deployment has led other OEMs to partner with Beta for site selection, increasing the strategic value of the network.

Certification Progress

• Completed 4 credited lightning tests, a key icing and ingestion test, and requirements-based software testing for 2100 engine software requirements, targeting 100% completion by the end of Q1. The H500A electric engine program, the first-ever electric engine certification pathway with the FAA, has resolved most regulatory and technical issues, with only continued rotation policy negotiations remaining that have extended the original timeline beyond H1 2026. • For the CX-300 CTOL program, all means of compliance have been agreed with the FAA, 17 of 19 certification plans have been submitted (8 accepted by the FAA), the first company flight test aircraft has been built, and structural test airframes are in production, progressing toward Type Inspection Authorization. • The VTOL program benefits from deep commonality with the CTOL program, and recent flight testing achieved a 6% reduction in transition power requirement through improved blade design, reducing noise and energy use. Hundreds of piloted bidirectional transition tests have been completed across multiple VTOL vehicle designs.

Defense and Strategic Partnerships

• Entered a new phase 2 program with General Dynamics following successful completion of a DARPA phase 1 program for advanced undersea vehicle propulsion technology. • The MV250 autonomous hybrid VTOL defense program, developed in partnership with GE Aerospace, has completed the preliminary design review for the hybrid turbo generator and been accelerated by 6 months due to growing demand for low-cost, rapidly scalable unmanned attritable aircraft. • Completed the tuck-in acquisition of an AI firm specializing in software validation for highly regulated applications, which is already driving efficiency gains in engineering work.

Production and Operational Metrics

• As of May 10, 2026, the company has logged over 139,000 nautical miles of flight testing and customer demonstration flights with a perfect safety record, against a full-year target of 250,000 nautical miles. • Production facilities are producing FAA-conforming engines and airframes to support certification, and the company remains on track to hit its year-end 2026 production capacity target. Long-lead materials are being secured in advance to support smooth production ramp. • The company's predominantly domestic supply chain and manufacturing base in Burlington, Vermont creates a structural advantage amid current trade and tariff uncertainty, with domestic supply increasingly a requirement for both commercial and defense customers.

Beta Technologies does not break out separate product segment financial results in this call. Total company Q1 2026 revenue was $10.1 million, 6% year-over-year growth. Operating expenses totaled $138.8 million, with R&D expenses of $91.7 million (66% of total operating expenses) and general & administrative expenses of $47.1 million (34% of total operating expenses). Adjusted EBITDA for Q1 2026 was negative $97.2 million. Capital expenditures for the quarter were $24.2 million. Ending cash and short-term investments were $1.59 billion.

• Full-year 2026 revenue guidance is maintained at $39 million to $43 million, with revenue expected to remain back half-weighted, supported by Q1 2026 performance that exceeded the top end of the prior Q1 guidance range. • Full-year 2026 adjusted EBITDA guidance has been updated to negative $355 million to negative $445 billion, a downward revision that adds $50 million of incremental expected EIPP-related investment at the guidance midpoint (the prior guidance range of negative $305 million to negative $395 million did not include EIPP investment, as awards had not been finalized at the time of the last call). • Full-year 2026 capital expenditure guidance has been revised upward to $150 million to $200 million, from the prior range of $175 million to $225 million. The change reflects updated timing expectations for long-lead tooling and facilities investments, partially offset by cost savings from the recent AI acquisition that reduced forecasted labor and facilities spending. • Q2 2026 guidance calls for revenue of $8 million to $11 million and adjusted EBITDA of negative $100 million to negative $120 million, inclusive of EIPP investments.

• Negotiations with the FAA on test procedures for the H500A electric engine certification are taking longer than originally expected, with endurance, containment, and continued rotation testing extending past the original H1 2026 target for completing all certification activities. The core open issue is a policy interpretation dispute over applying legacy turbine engine rules to electric motors, which do not have the same flammability or failure characteristics of conventional engines. • The company is investing $50 million in EIPP aircraft and operations before OTA contracts are finalized, creating uncertainty about the timing and ultimate value of revenue recoupment for these investments. • Broader industry-wide production ramp across aerospace could create supply chain tightness, though Beta's vertical integration and advance material procurement have mitigated most near-term risk to date.

Q: The H500A engine certification timeline has slipped; can you explain the issues and how they will be resolved? / A: For containment testing, legacy turbine rules were written for high-energy rotor blade failures, which have different physics than electric motor rotor magnets. After extended discussions, the company and FAA reached agreement on this issue. The remaining open issue is the continued rotation requirement, which mandates demonstrating that the engine can rotate after shutdown without hazardous fire. The company has struggled to consistently induce fire in an electric motor, which has no flammable oil or fuel like a turbine, making the test requirement hard to meet. This is a policy interpretation issue, not a fundamental safety or technical flaw in the design, and the company is working with the FAA at multiple levels to reach a mutually acceptable resolution.

Q: How will Beta ramp EIPP projects across 26 states, and what is the charging opportunity from the program? / A: Beta is already pre-positioning aircraft, securing supply chain and labor, and pre-completing permitting and interconnection for charging sites across states. The company plans to deploy aircraft to all selected projects immediately after OTA contracts are signed, leveraging existing fleet and operational readiness. Multiple states including Florida have already issued active procurement contracts for Beta charging infrastructure to support EIPP, with more states expected to follow. Revenue recognition for these charging projects will be delayed until permitting and installation are complete, so the full revenue benefit has not been included in 2026 guidance.

Q: How does the company navigate cultural and process differences when working with the FAA on rules for a fundamentally new technology? / A: The company works collaboratively at all levels of the FAA: frontline specialists understand the policy requirements they must enforce, while senior FAA leadership recognizes the national policy priority of advancing advanced air mobility. Beta resolves disagreements through in-person engagement, providing extensive data, and building shared understanding of the unique physics of electric aircraft, rather than opposing regulatory requirements. This collaborative approach has already resolved past issues like lightning testing requirements, and the company expects it will work for the current open issue.

Q: What is the long-term economic model for Beta's charging network? / A: The charging network is strategically critical to enabling electric aviation adoption, and has three primary revenue streams: 1) priority access fees paid by customers to reserve capacity on Beta-owned chargers, 2) direct sales of chargers to customers for on-site use, and 3) public sector procurement of chargers by state transportation departments to support statewide electric aviation deployment. All chargers, even those purchased by third parties, remain part of the Beta network, creating value for Beta aircraft customers and supporting long-term commercial aircraft adoption. Low-volume use today means revenue is not yet material, but this is expected to grow as operations ramp.