Beta Technologies, Inc. Class A

Hello, everyone. Thank you for joining us and welcome to the Beta Technologies first quarter 2026 financial and operating results. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. I will now hand the call over to Devin Rothman, head of investor relations. Please go ahead.

Thank you, operator. And good morning, everyone. Thank you for joining us for Beta Technologies' first quarter 2026 earnings call. Joining me today are Kyle Clark, our founder and chief executive officer, and Herman Kudo, our chief financial officer. Following their prepared remarks, we will open the call for Q&A, where Kristen Costello, our head of government and regulatory affairs, will also join us. Earlier today, we issued a press release announcing our first quarter 2026 financial results, as well as an investor presentation, which are both available on the investor relations section of our website. Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements. These statements are based on our current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially. Please refer to our filings with the SEC for a discussion of these risks. We will also reference certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures can be found in our earnings materials. With that, I'll turn the call over to Kyle.

Thanks, Devin, and good morning, everyone. Thanks for joining us. We're excited to share with you the progress we've made since our last earnings call. In two months, we progressed our commercial goals, adding $375 million to our aircraft backlog, advanced our long-term strategy, and continued to fly with our customers in New Zealand and Norway, and we recently added Japan to the list. Beta is demonstrating real-world operations and training operators and maintainers. We've continued to expand our charging network with new state partnerships and customer orderings, including a large expansion in Florida. We've advanced all of our certification programs. Our production facilities are running well with FAA-conforming engine and airframe builds directly supporting certification testing. We are on track to hit our year-end production capacity target. The most significant commercial update since we last spoke was beta selection for the eVTOL Integration Pilot Program, or EIPP for short. This program is led by the FAA and the US Department of Transportation to accelerate the safe deployment of electric and vertical flight in the US and will allow for early commercial operations of electric aircraft. Beta was awarded seven out of the eight possible EIPP selections by the DOT and the FAA, more than any other aircraft developer. This is an important achievement that reflects our leadership in the industry. Our EIPP selections outpaced all other OEMs, and we attribute this outperformance to the maturity and readiness of our aircraft to be deployed. Our selections span 26 states, and we plan to approach this effort in the same stepwise approach that we've taken to both our certification and our go-to-market strategies. That means beginning with cargo and medical operations, and then transitioning to passenger transport. It also will mean that we're starting with CTOL and following with VTOL missions. This strategy directly aligns with the safe integration of these new technologies into the national airspace and the objectives of our customers, who will be the primary operators of the beta aircraft during the EIPP. These selections are both a testament to beta's safe and reliable operations and an accelerator of our ability to show up in markets across the country. The awards will pull forward our commercialization efforts, advancing our commercial readiness by more than a year. In partnership with multiple states, we expect to deploy aircraft in communities nationwide, while also expanding the use of Beta's charging network. This requires some near-term investment in the business, which we believe will have a meaningful return in the long run. We made the decision to buy the materials and organize the labor to build the EIPP aircraft ahead of finalization of contracting through the OTA or other transactional authority. Herman will touch on this a little bit more. Alongside of that, we're also investing in service and support structure that will enable the successful deployment of our aircraft across these seven selections. Our recognition in the EIPP is a result of years of technical progress and the operational readiness we've built across aircraft, infrastructure, and training. In addition to the EIPP, we secured an aircraft order from Surf Air Mobility, and we continued our work alongside Logan Air and the Royal Mail in Scotland in coordination with the UK CAA. In Japan, we flew with SOGIS and Yamato. Finally, in partnership with Air New Zealand, we wrapped up a multi-month demonstration. I now want to move to our long-term product strategy by highlighting the work we've accomplished with some of our partners in recent months, as well as the progress we're making in defense. Since our last call, we entered into a contract for a new program with General Dynamics. This was after the successful completion of phase one in support of DARPA on a program focused on developing advanced propulsion technology for undersea vehicles. Our MV250 program, which we shared on the last call, was accelerated by six months due to growing demand signals for unmanned, attritable aircraft, continues to advance. The key element of this autonomous VTOL aircraft is the hybrid propulsion systems we're developing with GE Aerospace as a part of our strategic partnership and joint technology development program. Together, we recently completed our preliminary design review for the hybrid turbo generator, which further reinforced the concept and demonstrated how the combination of our technical expertise accelerates the program. The January 2026 executive order prioritizing the warfighter in defense contracting is an urgent directive to defense primes to identify and engage with advanced agile American companies with proven ability like Beta. The demand signal is clear. The military needs low cost, flexible unmanned assets that can be produced and scaled rapidly. The MV250 is purpose-built for that mission because all of our aircraft were designed from the beginning with acute self-awareness and fly-by-wire systems that can natively receive control inputs from a computer. Nothing needs to be redesigned or fundamentally altered to operate autonomously. That's a key differentiator. Combined with our partnership and advancement with GE Aerospace and the hybrid propulsion system and military-funded development of autonomy and hybridization technology through DEVCOM, we continue to believe we are well-positioned to meet the nation's defense needs. Now, I'd like to give you an update on our key performance indicators, which represent the measurement framework we established to hold ourselves accountable in a consistent and transparent way. This framework lets our stakeholders know how we're tracking against what we said we would do. In the first quarter, measurable progress has been made across every dimension of our enterprise. Starting with the backlog. On our fourth quarter call, we shared the target of reaching a $4 billion commercial aircraft backlog by year-end 2026. up from a $3.5 billion backlog at the end of last year. This backlog consisted of 891 aircraft in firm and option orders backed by financial commitments. Since then, we've announced a significant order from Surf Air Mobility, which helped grow our total commercial aircraft backlog to $3.9 billion and 991 aircraft. We are confident that Surf Air's operations in Hawaii and in California are a natural fit for Aaliyah. They have an existing network and high cadence routes where electric aircraft can be deployed efficiently and at a low cost. This partnership also expands our MRO footprint, which strengthens the long-term economics for both companies. Next, I want to highlight nautical miles flown. And through May 10th, we have now crossed over 139,000 nautical miles with a full year goal of 250,000. It's important to note that every one of those miles is intentional. It's flown with purpose and with a perfect safety record. Often, we're flying with current or prospective customers or as a part of our flight test programs. These flights generate meaningful data that we're delivering to regulators. As the fleet grows, as EIPP operations come online, and as more customer deployments ramp through the year, you're gonna see even more miles. Turning to our charging network, where we're also the leader in our industry. We've added 16 charging sites since our last call, bringing our total to 123. Since the beginning, we've followed a strategy of investing in beta-funded chargers between customer-funded sites, and this growth has enabled the early deployment of electric aircraft. The development of every site goes through a process which includes site selection, permitting, installation, and commissioning. This process has become an area of expertise for Beta, such that other OEMs come to us to identify priority charging locations for their own proposed missions, which only reinforces the value of what we've built. Additionally, our participation in the EIPP should accelerate the growth of our charging network, Last month, we added the Florida Department of Transportation to our list of charging customers. They signed a contract with Beta for 34 chargers plus thermal management systems to enable EIPP operations in their state. This is real network growth and infrastructure revenue being pulled forward by the program that's demonstrating to governments at every level that electric aviation needs charging infrastructure today. Something that may sound familiar when you look at Beta's early entrance into this space. We see more of these opportunities with states developing, and I'll expect this will be a growing theme in future calls. And now let's discuss MAC's demonstrated production rate. We are focused on building manufacturing capability and inventory of long-lead materials as we prepare our production areas for a higher rate than our current rate of a half an aircraft per month. Right now, the highest value work we can do on the production side is securing materials and staging these lines so that as we ramp, we can do it efficiently and without disruption. This is a great example of our deliberate, stepwise approach and action. Finally, we continue to make progress on our three certification programs. The 11 conforming electric engines we spoke about last call have proven instrumental in enabling multiple certification test activities to run in parallel. four credit lightning tests were completed and another key icing and ingestion test was completed. And this is being presented to the FAA. We've completed requirements based software testing on all 2100 engine software requirements. And we are now dispositioning for an end of the month target of a hundred percent completion of this major software milestone. This progress may sound routine, but it represents a tremendous amount of trail breaking engineering work. Each test requires engineering innovation and detailed technical negotiations with the FAA to figure out how to test an electric motor against requirements fundamentally developed for combustion engines, an entirely different technology. One of the reasons we chose to certify the electric engine first is that this new technology has the highest technical risk and the highest burden of new rulemaking and trail breaking work with the regulators. We are exposing and resolving technical and regulatory matters today, well ahead of our aircraft type certification. The H500A is the foundational technology from which future electric engine and hybrid variants will be derived and is a pathfinder at establishing the regulatory pathway to certify electric engines, a milestone that no one has ever hit with the FAA. As a first mover, We've had to take the regulations originally written for conventional propulsion systems and work with the FAA to address the areas that this advanced technology does not cleanly fit within. What this provides us with is the ability to be at the table as the path is being developed and have our voice heard. Since we first spoke with you, we've always said we value transparency. We have identified some areas that we believe will require more time than we originally expected to complete negotiations with the FAA on the test procedures. Specifically, we expect endurance and containment testing to extend past our original target of completing all certification activities and closing the type certification in the first half of this year. We also expect negotiations with the FAA on the compliance approach for continued rotation to extend past June. Rather than providing a new date today, we want to advance our conversations with the FAA to understand how our certification schedule will be impacted, but we are confident that we will arrive at a mutually beneficial resolution as we have in the past. When we started this certification program three years ago, the rules didn't exist. And as recently as two months ago, we were still attempting to agree on what containment meant in an electric motor versus a turbine blade. That is clear now. We know how to work through these types of issues. We're down to one issue around continued rotation. It stems from the fact we simply are having a hard time consistently creating the failure that we have to contain. We've tried all kinds of induced failures, but we simply can't reasonably induce the condition that we are being asked to create. This is likely a policy interpretation issue. I want to emphasize that the H500A is performing well in all the testing so far. It is normal in a Pathfinder project to learn things along the way that require adjustment and replanning, and we are trying to be transparent and proactive in making these adjustments. Importantly, we don't expect any of these schedule changes to impact our market entry strategy, which includes a type certification to the CX-300 aircraft or the launch of the aircraft into the EIPP program. We've also made measurable progress in our CTIL program. We've agreed with the FAA on all means of compliance and are in the final stage of updating our documentation to reflect these agreements. We are making excellent progress in the compliance planning phase, having submitted 17 of the 19 certification plans. eight of which the FAA has already accepted. In March, we completed the build of the first aircraft that will perform company flight testing, and we are in the process of building the airframes that we'll use for aircraft structural tests. Both of these builds are key gateways to entering type inspection authorization flight testing. We have four more flight test vehicles in various stages of the build process that will be used to complete the remainder of the company and TIA flight testing. We have and continue to host the FAA flight tests and human factors team for familiarization and TIA planning, which is also progressing our readiness for TIA. Our methodical, stepwise approach allows our VTOL program to benefit from our CTOL program. This transferability is enabled by the deep commonality in our family of aircraft, enabling streamlined manufacturing processes and operational efficiency in addition to certification progression. Every milestone achieved in our CTOL aircraft directly flows through to the VTOL. Our engineering flight test program for the VTOL continues in parallel, including recent breakthroughs in the blade efficiency, which our regular testing has demonstrated reduced noise and has reduced energy required for transition. As we close out the requirements definition phase for CX300, A250 will apply the FAA-accepted means of compliance from the CX300 on all of the common systems. The work we are doing is setting a course for this industry, and while it's thrilling, it requires persistence. Our focus on simplifying even the most complex matters helps us drive our commitment to safety and positions us to exceed expectations as we execute to the highest standards. Herman, over to you.