BETA

Business Context and Reporting Period

BETA Technologies, Inc. (BETA) is an emerging growth company specializing in the design, development, and manufacturing of electric aircraft, propulsion systems, and charging infrastructure. This Form 10-Q covers the quarterly period ended March 31, 2026. The company operates as a single reportable segment focused on the development and manufacturing of electric aircraft.

Key Financial Metrics

Note: Debt figures include current and non-current notes payable. The company holds significant cash reserves following its IPO and prior financing activities.

Material Changes vs. Prior Period

• Revenue Mix Shift: Product revenue decreased 61% to $0.96 million due to lower deliveries of propulsion motors and batteries compared to Q1 2025. Conversely, Service revenue increased 29% to $9.2 million, driven by engineering and consulting contracts with commercial customers.
• Expense Growth: Operating expenses surged 62% to $138.8 million. Research and Development (R&D) expenses rose 59% to $91.7 million, and General and Administrative (G&A) expenses increased 68% to $47.1 million. These increases were driven by higher labor costs, stock-based compensation, and a $5.6 million warrant expense related to a collaborative arrangement with GE Aerospace.
• Liquidity Position: Cash and cash equivalents increased significantly from $236.6 million in Q1 2025 to $1,589.4 million in Q1 2026, reflecting proceeds from the IPO and convertible preferred stock offerings completed in late 2025.
• Interest Income: Interest income jumped to $14.5 million (from $2.7 million) due to higher cash balances from recent capital raises.

Outlook, Risks, and Management Commentary

• Recent Developments: BETA was selected as a launch participant in the U.S. Department of Transportation's eVTOL Integration Pilot Program (eIPP), expected to operate in at least 10 states. Additionally, the company secured a firm order for 25 ALIA CTOL aircraft from Surf Air Mobility Inc., with an option for 75 more.
• Capital Requirements: Management expects to continue incurring net losses and negative operating cash flows for the foreseeable future until sustainable commercial operations commence. Future funding needs will depend on the pace of certification, manufacturing, and infrastructure expansion.
• Risk Factors: Key risks include the ability to obtain required governmental certifications, access to capital markets, dependence on suppliers, and the potential for accidents involving electric aircraft or battery solutions. The company also faces risks related to its defense programs and cybersecurity threats.
• Non-GAAP Measures: Adjusted EBITDA for Q1 2026 was $(97.2) million, compared to $(64.7) million in Q1 2025, reflecting the heavy investment phase.

Investor Verification Checklist

• Cash Burn Rate: Verify the sustainability of the $1.59 billion cash balance against the current quarterly operating cash burn of ~$95 million and planned capital expenditures.
• Revenue Concentration: Review Note 2 for customer concentration; 96% of accounts receivable were derived from customers exceeding 10% of total receivables as of March 31, 2026.
• Warrant Expense Impact: Confirm the non-cash nature of the $5.6 million warrant expense related to the GE Aerospace collaboration and its impact on future dilution.
• Certification Timeline: Assess the progress and risks associated with the eIPP program and the timeline for commercial certification of the ALIA aircraft.
• Related Party Transactions: Review Note 11 for details on transactions with United Therapeutics, GE Aerospace, and management, which accounted for a significant portion of service revenue.