BETA Technologies, Inc.: Form 10-Q for the period ended Jun 30, 2026

The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes, and other financial information, included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 9, 2026. As discussed in the section titled “Special Note Regarding Forward-Looking Statements,” the following discussion contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, including those discussed below and in the section titled “Risk Factors” included under Part II, Item 1A below, as well as in the Annual Report on Form 10-K for the year ended December 31, 2025, all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We assume no obligation to update any of these forward-looking statements. Unless otherwise indicated or the context otherwise requires, all references in this section to the “Company,” “BETA,” “we,” “us,” or “our” refer to BETA Technologies, Inc. and its consolidated subsidiaries.

Overview

We are continuing to redefine the aerospace industry. We design, manufacture, and sell high-performance electric aircraft, advanced electric propulsion systems, charging systems, and components that are positioned to transform the aviation industry. Further, we have invested in the underlying infrastructure of this breakthrough technology, which is critical to bringing electric aviation to life. We believe we have developed a differentiated presence in North America and are well positioned to expand globally.

We are continuing to develop highly scalable technologies that can be tailored to and deployed for cost-effective and safe missions across cargo and logistics, medical, defense, and passenger end markets. Our simplified approach to designing electric aircraft allows us to service a variety of end markets and mission types while leveraging the same core technologies. The portability of our technologies and systems across various aircraft also unlocks flexibility to innovate on future generations of aircraft.

Since inception, the Company has devoted substantially all of its time and efforts to performing research and development activities, raising capital, recruiting management and technical staff to support these operations, and designing manufacturing processes. During the three and six months ended June 30, 2026, the Company continued to make investments across facilities, equipment, and tooling needed to manufacture its aircraft and charging systems.

Recent Developments

BETA served as the systems integrator, supported flight tests in the U.S., and ferried GE Aerospace’s hybrid-electric aircraft to the UK for the Farnborough International Airshow (“Farnborough”). In collaboration with BETA, NASA and Boeing, GE Aerospace conducted the first hybrid electric flight above 30,000 feet, reaching the same altitude levels of passenger commercial aircraft. On July 20, 2026 at Farnborough, the Company unveiled the MV250, an autonomous hybrid-electric VTOL aircraft giving military operators greater range, higher speed, increased payload capability, and lower operating costs for contested on- and off-airport logistics.

Results of Operations

Comparison of Results for the Three and Six Months Ended June 30, 2026 and 2025

The following table presents selected financial information for the periods presented (dollars in thousands):

* Percentage increase (decrease) is not meaningful

Revenues

Our product revenue is primarily generated from the sale of tangible products such as our batteries, engines, flight control systems, and an international network of electric charging and related equipment (“Enabling Technologies”). Our service revenue is primarily generated from engineering, consulting, and other service arrangements for our customers. Service revenue also includes revenue associated with usage of and priority access to our charging stations.

Product revenues increased by $0.7 million, or 29%, during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was attributable to the delivery of ground service equipment (“GSE”) to commercial and foreign government customers of $2.7 million during 2026, offset by the delivery of electric propulsion engines and batteries to commercial customers totaling $2.0 million during 2025.

Product revenues decreased by $0.8 million, or 16%, during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was attributable to the delivery of electric propulsion engines and batteries to commercial customers totaling $4.3 million during 2025, offset by the delivery of GSE to commercial and foreign government customers of $3.5 million during 2026.

Service revenues increased by $8.0 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was attributable to contracts with commercial customers of $6.9 million related to engineering and consulting services to support our customers’ research and development activities, $1.0 million related to completion of services for the U.S. government, and $0.1 million related to priority access to the Company’s charging stations.

Service revenues increased by $10.0 million, or 95%, during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was attributable to contracts with commercial customers of $13.1 million related to engineering and consulting services to support our customers’ research and development activities and $0.3 million related to priority access to the Company’s charging stations, offset by $3.4 million related to completion of services for the U.S. government during 2025.

Cost of Revenues

Cost of product revenues and service revenues may include the direct cost of materials, labor, subcontractors, and overhead costs (where allowable), depending on the nature of the agreement. Included within cost of product revenues are purchases made directly for contractual performance obligations primarily recognized over time and as such, no inventories are recorded in the condensed consolidated balance sheets.

Cost of product revenues increased by $1.6 million and $1.7 million during the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025, respectively. The increase was attributable to labor and material costs to fulfill contracts with commercial and foreign government customers.

Cost of service revenues increased by $3.8 million and $6.3 million during the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025, respectively. The increase was attributable to labor and material costs to fulfill contracts with commercial and U.S. government customers.

Research and Development Expenses

Research and development expenses are attributable to continued spend related to the development, testing, certification, and prototype production of our electric aircraft, electric propulsion systems, charging solutions, and network. The increases to research and development expenses were attributable to the following (in millions):

General and Administrative Expenses

General and administrative expenses increased $17.7 million, or 68%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was attributable to increased stock-based compensation expense of $5.9 million, salaries and benefits of $7.7 million due to increased headcount, and $4.1 million of other administrative costs.

General and administrative expenses increased $36.7 million, or 68%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was attributable to increased stock-based compensation expense of $16.3 million, salaries and benefits of $12.1 million due to increased headcount, $2.5 million of professional fees, and $5.8 million of other administrative costs.

Other (Income) Expense

Interest income increased $11.3 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 and $23.1 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was attributable to interest on the proceeds from convertible preferred stock offerings and the IPO.

Interest expense increased $0.8 million, or 27%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 and $1.5 million, or 27%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was attributable to a sale-leaseback transaction that occurred during 2025.

Provision for Income Taxes

Provision for income taxes increased by less than $0.1 million, or 17%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Provision for income taxes increased by $0.2 million, or 48%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to an increase in tax on foreign earnings.

Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA

We define EBITDA as net loss adjusted for interest income, interest expense, provision for income taxes, and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for stock-based compensation, warrant expense, acquisition-related expense, loss on disposal of property and equipment, and IPO costs.

In addition to traditional financial metrics, we use EBITDA and Adjusted EBITDA to help us evaluate our business. We believe that these non-GAAP measures provide useful information to investors because they allow for greater transparency into what measures we use in operating our business and measuring our performance and enable comparison of financial trends and results between periods where items may vary independent of business performance. These non-GAAP measures are presented for supplemental informational purposes and should not be considered as substitutes for or superior to financial information presented in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude certain expenses that are required by GAAP to be recorded in our financial statements, and they are subject to inherent limitations as they reflect the exercise of judgment by our management about which expenses are excluded or included in determining these non-GAAP financial measures. Further, non-GAAP financial measures are not standardized. It may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. In addition, investors are encouraged to review our condensed consolidated financial statements and the notes thereto in their entirety and not to rely on any single financial measure.

A reconciliation between net loss, the most directly comparable GAAP financial measure, and the non-GAAP financial measures is as follows (in thousands):

(1) Includes acquired IPR&D expense of $15,003 and direct transaction costs of $1,144.

(2) Represents accounting and advisory expenses incurred in connection with becoming and operating as a public company.

Liquidity and Capital Resources

We have incurred net losses and negative operating cash flows from operations since we were formed and began designing our electric aircraft in 2018, and we expect to continue to incur losses and negative operating cash flows for the foreseeable future until we successfully commence sustainable commercial operations. Historically, our primary sources of liquidity have been borrowings under our Ex-Im Credit Facility, equity financings, government funding, and consideration from contracts with customers, as well as the proceeds from our IPO and the sale-leaseback transaction. To date, our primary use of capital has been for the development of our electric aircraft and Enabling Technologies. As of June 30, 2026, we had cash and cash equivalents of $1,479 million. Until we generate sufficient operating cash flow to fully cover our operating expenses, working capital needs, and planned capital expenditures, or if circumstances evolve differently than anticipated, we expect to utilize a combination of equity and debt financings to fund any future remaining capital needs. If we raise funds by issuing equity securities, dilution to stockholders may result. Any equity securities issued may also provide for rights, preferences, or privileges senior to those of holders of common stock. If we raise funds by issuing debt securities, these debt securities may have rights, preferences, and privileges senior to those of common stockholders. The terms of debt securities or borrowings could impose significant restrictions on our operations. The capital markets have, in the past, and may, in the future, experience periods of volatility that could impact the availability and cost of equity and debt financing. We can give no assurances that we will be able to secure such additional sources of funds to support our operations or, if such funds are available to us, that such additional financing will be sufficient to meet our needs. See the heading “Our business plan requires a significant amount of capital. We expect to require additional future funding to support our operations and implementation of our growth plans and we may be unable to access the capital and credit markets or borrow on affordable terms to obtain additional capital that we may require” in Part I, Item 1A. “Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2025.

Our principal uses of cash in recent periods were to fund our research and development activities, personnel cost, and support services, including our battery, engine, and charging services. Near-term cash requirements will also include spending on research and development of emerging technologies, strategic growth initiatives, including obtaining certifications and manufacturing our aircraft, commercial and go-to-market infrastructure. We do not have material cash requirements related to current contractual obligations. As such, our cash requirements are highly dependent upon management’s decisions about the pace and focus of both our short and long-term spending.

Cash requirements can fluctuate based on business decisions that could accelerate or defer spending, including the timing or pace of certification, investments, infrastructure, and production of electric aircraft and Enabling Technologies. Our future capital requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash or grants received from our customers or governmental entities, respectively, the expansion of sales and marketing activities, and the timing and extent of spending to support development efforts, including collaborative arrangements.

Capital Expenditures

During the six months ended June 30, 2026 and 2025, we used $65.3 million and $11.8 million in cash, respectively, to fund capital expenditures. We anticipate incurring additional capital expenditures during the remaining portion of the year ending December 31, 2026, primarily related to the investment in machinery and equipment, buildings, and our charging network.

Sources of Cash

The following table sets forth our cash flows for the periods indicated (in thousands):

20

Operating Activities

For the six months ended June 30, 2026, net cash used in operating activities was $170.2 million, primarily due to a net loss of $271.1 million, offset by non-cash charges of $80.2 million, and adjusted by a change in operating assets and liabilities that provided a net source of cash of $20.7 million. This source of cash primarily reflected an increase in accounts payable, accrued expenses and current liabilities, an increase in deferred revenue, and a decrease in prepaid expenses and other current assets.

For the six months ended June 30, 2025, net cash used in operating activities was $114.5 million, primarily due to a net loss of $158.7 million, offset by non-cash charges of $25.2 million, and adjusted by a change in operating assets and liabilities that provided a net source of cash of $18.9 million. This source of cash primarily reflected an increase in accounts payable, accrued expenses and current liabilities, and a decrease in prepaid expenses and other current assets.

Investing Activities

For the six months ended June 30, 2026 and 2025, net cash used in investing activities was related to purchases of property and equipment to support our growth in operations, including the construction and expansion of our production and charging facilities, and investment in machinery, equipment, tooling, and technology infrastructure. For the six months ended June 30, 2025, net cash used to purchase property and equipment was partially offset by proceeds from the sale of property and equipment.

Financing Activities

For the six months ended June 30, 2026 and 2025, net cash provided by financing activities was primarily from the exercise of stock options, offset by repayment of borrowings and other financing activities.

Contractual Obligations and Commercial Commitments

As of June 30, 2026, there were no material changes to our contractual obligations and commercial commitments from those described in Note 5 “Notes Payable” and Note 6 “Leases” in the audited consolidated financial statements included within our Annual Report on Form 10-K for the year ended December 31, 2025.

Critical Accounting Estimates

In connection with preparing our condensed consolidated financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expense, and the related disclosures. We base our assumptions, estimates, and judgments on historical experience, current trends, and other factors that management believes to be relevant at the time we prepare our consolidated financial statements. However, because future events and their effects cannot be determined with certainty, actual results could differ materially from our assumptions and estimates. During the six months ended June 30, 2026, there have been no material changes to our critical accounting estimates included in the Annual Report on Form 10-K for the year ended December 31, 2025, other than as described below.

PSUs

We measure PSUs granted to employees and non-employees based on the fair value on the date of the grant. We recognize compensation expense over the requisite service period, which is adjusted at each reporting period based on the probability and timing of performance achievement. We estimate the probability and timing of achievement based on available information regarding progress made towards performance objectives at each reporting period. If we later determine that achievement of a performance objective is no longer probable, the associated expense previously recognized will be reversed.

Recently Issued Accounting Pronouncements

See Note 2 “Basis of Presentation and Accounting Policies” to our condensed consolidated financial statements for a discussion of recent accounting pronouncements.

Emerging Growth Company Status

See Note 2 “Basis of Presentation and Accounting Policies” to our condensed consolidated financial statements for a discussion of our status as an emerging growth company.

Off-Balance Sheet Arrangements

We have no material off-balance sheet arrangements.

Market risk is the risk of loss arising from adverse changes in market rates and prices. Currently, our market risks relate to potential changes in the fair value of our long-term debt due to fluctuations in applicable market interest rates and inflation. Going forward, our market risk exposure will generally be limited to those risks that arise in the normal course of business, as we do not engage in speculative, non-operating transactions, nor do we utilize financial instruments or derivative instruments for trading purposes.

Interest Rate Risk

Our cash and cash equivalents are invested in demand deposit accounts and money market funds and are held for working capital purposes. We do not enter into investments for trading or speculative purposes. We believe that we do not have any material exposure to changes in the fair value as a result of changes in interest rates due to the short-term nature of our cash equivalents. Declines in interest rates, however, would reduce future interest income.

Credit Risk

Financial instruments that subject us to significant concentrations of credit risk consist primarily of cash and money-market cash equivalents. Our cash is held in accounts with multiple financial institutions that we believe are creditworthy. These amounts at times may exceed federally-insured limits. We have not experienced any credit losses in such accounts and do not believe we are exposed to any significant credit risk on these funds.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2026, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and Rules 15d-15(f) under the Exchange Act) during the three months ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes to the risk factors disclosed in “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2025.