Merlin, Inc.

Good morning and welcome to Merlin's first quarter 2026 earnings conference call. At this time, all participants are in a listen only mode. Following management's prepared remarks, we will conduct a question and answer session. Today's call is being recorded and a replay will be available on Merlin Investor Relations website following the call. I will now turn the call over to Brian Alger, SVP Corporate Development and Investor Relations. Please go ahead.

Thank you, Andrew, and good morning, everyone, and welcome to Merlin's first earnings call as a public company. Joining me on the call today are Matt George, Merlin's founder and chief executive officer, and Ryan Carruthers, our chief finance officer. I'd like to direct your attention to the presentation intended to accompany today's conference call. A link to the presentation can be found on the investor section of our website. Momentarily, Matt will kick things off with a brief overview of Merlin and the opportunities we are trying to address. We will also discuss our first product launch and its significance under our platform architecture. Ryan will then take you through the financial results, our liquidity, and our financial expectations. We will then close with a Q&A session. Before we begin, a reminder that today's discussion is being recorded and will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties, and other factors that could cause actual results, performance, or achievements to differ materially from what is expressed or implied. Those factors include, among others, regulatory approval timelines, competitive dynamics, capital availability, technology developments, and broader market conditions. For a complete discussion of risk, please see our most recent filings with the SEC. We undertake no obligation to update any forward-looking statement except as required by law. Today's discussion will also reference adjusted EBITDA, which is a non-GAAP financial measure. The reconciliation of adjusted EBITDA to net loss, the most directly comparable gap measure, is included in the appendix of our earnings presentation, available on the investor section of our website at investors.merlinlabs.com. A replay of today's call will also be available on the same website shortly after we conclude the Q&A session. And with that, I'll hand the call over to Matt. Matt?

Thanks, Brian. To everyone joining us today, thank you. I'm excited to be speaking with all of you on Merlin's first earnings call as a public company. To kick us off ahead of reviewing our Q1 2026 financials, I want to talk at a high level about our business and our markets. For 100 years, aviation has been built around human crews. At Merlin, we believe that aviation's next 100 years will be built around autonomy. For us, autonomous flight means one certifiable AI system, adaptable to any airframe and any mission, which becomes more capable with each adaptation. We see this as physical AI for the sky and we believe it has the potential to expand airframe use cases, grow aviation productivity, improve safety, lower operating costs, and build data and operating flywheels that could advantage every existing aircraft. Finally, We think autonomous flight has the potential to radically change how aviation's future is built and deployed, creating significant market opportunities for systems like ours to pioneer it. Turning to Merlin itself, our HQ and engineering center are located in the great city of Boston, Massachusetts. Beyond Boston, we have flight test facilities in Quonset, Rhode Island, and in Kerikeri, New Zealand. Our now almost 200-person team has spent the past eight years on a single technical agenda, aiming to build certifiable autonomy that can fly any aircraft in any mission and for any operator. If you're new to Merlin, here are four key highlights about our company that you should know. The first is that we are the prime on the US SOCOM IDIQ contract on the C-130J with $105 million contract ceiling. The second is that we have executed our first fully automated takeoffs on certification candidate aircraft this year. We did this on April 11th. and April 21st in both the US and New Zealand on two aircraft on two different continents. The third is that we work supporting those takeoffs inside an active certification program with multiple regulators in two countries on the same software stack. I will come back to certification later because it is an important component of the competitive mode that makes Merlin so special. And the fourth highlight is the financing we closed on May 1st. Following that close, Merlin's cash cash equivalents, and short-term investments were approximately $183 million. We believe this provides us the runway intended to support our near-term priorities. Now, let's talk about the technology at the heart of our business. If you started with a clean sheet of paper and you set out to build a generational aerospace and defense business, you would not begin with metal and rivets. You'd begin with a brain. You'd build an intelligent system that could fly any aircraft, anywhere, and on any mission. And because you build that brain, not an airframe, you would design your system to be smarter, faster, and more capable with every flight. That brain is what we are building with the Merlin pilot. The Merlin pilot is the same core software across every aircraft we equip. Every aircraft we integrate is another spin of the Merlin flywheel because we think the data collected from each flight will make the core smarter and more capable. Our strategy is to scale the software platform across multiple aircraft in multiple markets, while focusing our engineering investment where we can quickly build structural advantage. If you're following along in the deck, right now you should be looking at what we call the spaghetti slide. The slide is the visual I use with investors who ask, what would the platform actually look like at scale? The answer, it would look like one core across many programs and many airframes. This includes both military and civil aircraft. We believe leveraging the same core should compound our advantage over time in three mutually reinforcing ways. The first is engineering. To reiterate, with each new aircraft we integrate builds on the same core Merlin pilot software. We think the engineering cost of each subsequent program should significantly decline over time. The second is regulatory. Prior regulatory alignment, accepted compliance methods, and reusable certification artifacts should create significant leverage for subsequent platforms. The third is data. Information we capture from every flight will make the core itself more capable over time. We do not think these compounding dynamics can be replicated quickly, and all three of them get more valuable to us with every aircraft we add. That's why we believe that this is a platform business designed to benefit from real network effects across our fleet and across our customers. With the strategy behind the technology defined, I want to double-click on certifications. It is important to realize that we're not only writing code that can fly an airplane. We're also building processes, policy, a team, and a data lake, all focused on turning code into safe, reliable, human, or better performance. We are aiming to be the first in the world to achieve civil certified, fully automated takeoff to touchdown flight on a fixed wing aircraft. The gap between can fly and is certified to fly is where most autonomy programs end. It's also where Merlin's moat begins. Certification is a demanding process and a complex topic. Today, I want to frame out our high-level progress. We've cleared the first two major certification milestones with the New Zealand Civil Aviation Authority in a concurrent validation program with the United States Federal Aviation Administration. Those milestones are SOI 1 and SOI 2. Think of those as the planning and development review gates. We're currently working on SOI 3, which is where we demonstrate that our software verification holds up under the regulator's scrutiny. SOI 4 is the final software compliance gate. A successful outcome with the CAA would potentially create direct pathways for U.S. operational approval. As we noted earlier, if we achieve certification, we believe downstream progress would become easier and more efficient from both a technical and regulatory perspective. Now, I want to turn to how Merlin defines a product. For us, a product is a combination of four things. It is the Merlin Pilot Core integrated onto an airframe, oriented at a mission, and targeted at a customer. So, software plus airframe plus mission plus customer equals a product. Now, let's look at how we execute against our product definition. When we launch a product, we think an aviation vertical has the following opportunity set. First, we want the Merlin Pilot Core to be technically mature on the relevant aircraft category. Second, we assess whether our software will add significant value to operating that aircraft, either in terms of fleet productivity or in terms of missions it otherwise couldn't fly. The third is there should be a clear basis for understanding the relevant regulatory airworthiness requirements with target regulators. And finally, we look for an external indication of interest from potential customers or collaborators. But discipline is important. If we cannot clearly apply these four criteria to a given opportunity, We won't do it. We are early in this commercialization effort. Longer term, our goal is to build a portfolio of product verticals on top of the Merlin pilot software platform. But right now, let's turn to the first major step towards that goal. We announced it right ahead of this call. Our first product launch is called Condor. Condor is a Merlin product designed to bring certified autonomy into multi-crew large aircraft, sitting alongside the human pilots already in the flight deck. Our goal is to make every flight safer and more productive. As a product, it applies both to the civil and defense markets. On the civil side, we think Condor has compelling tailwinds given the growth of demand across the narrow body and wide body freighter markets and the structural challenge related to pilot shortages around the world. In particular, we believe the combination of those two dynamics creates a real opportunity for single pilot and augmented operations in this space. Let me explain by putting the scale of what those airframes carry in context. According to the International Air Transport Association, air cargo moves roughly a third of the world's trade by value, more than $8 trillion of goods per year. That includes around 77% of the world's smartphones, 60% of laptops, and more than 99% of the world's memory chips. At the same time, aviation is overall experiencing pilot shortfall. The National Air Carrier Association forecast projects a cumulative shortfall of nearly 30,000 pilots in the U.S. alone, with an even larger shortfall globally. To bring autonomy to that network, we need allies. Autonomous cargo aviation is a network of operators, lessors, integrators, and, of course, regulators. Merlin is already collaborating with WorldStar Aviation, a leading freight lessor, and is developing additional relationships with key players in the commercial cargo conversion market. We believe these kinds of collaborations will give Merlin and Condor the technical and commercial framework to help us scale. We expect to collaborate with more key operators in this ecosystem over time. With Condor's applicability to the private sector hopefully clear, let me now underscore Condor's defense applications. Here too, we believe Condor will allow for the eventual transition to single pilot and augmented operations. I referenced the USOCOM IDIQ contract on the C-130J earlier. From an operating certification and technical capabilities perspective, the C-130J is, of course, a significant deployment. It is a serious aircraft. Four engines, high gross weight, tactical missions, contested environments. The work we do on this airframe should translate to a meaningful set of additional defense aircraft. Further, if our autonomy stack works on the C-130J, the technical case for it is also meaningful on our civil airframe. Finally, let me reiterate that Condor is just the first named product of an expected portfolio. Now, with that, let me turn it over to Ryan to walk you through the first quarter financial numbers.