BETA Technologies, Inc. (BETA) Q3 2025 Earnings Call Transcript

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Overview

The earnings call highlights strong financial management, strategic partnerships, and promising project timelines. The Q&A section reveals confidence in FAA compliance, supply chain management, and backlog conversion. The partnership with Eve and DB, along with the IPO proceeds, strengthen the financial outlook. Despite the motor timeline shift, the overall sentiment is optimistic, driven by strategic partnerships and robust backlog management.

Key Financial Performance

Revenue $8.9 million in Q3 2025, a significant increase compared to Q3 2024. The increase was driven by earlier-than-expected commercialization of propulsion technology and strong growth in engineering services revenue.

Year-to-date Revenue $24.5 million through Q3 2025, a significant increase over the first 9 months of 2024. This reflects strength in both product and service revenues.

Operating Expenses $86.8 million in Q3 2025, including $56.4 million in R&D and $30.4 million in SG&A. Year-to-date operating expenses totaled $256.7 million, with $170.5 million in R&D and $86.2 million in SG&A. The increase is attributed to investments in aircraft design, certification, and supporting functions.

Adjusted EBITDA Negative $67.6 million in Q3 2025, better than expectations due to closely managed expenses. Year-to-date adjusted EBITDA was negative $200.7 million.

Cash Position $687.6 million at the end of Q3 2025, reflecting proceeds from private financings, including a $300 million investment from GE. Subsequent to Q3, approximately $1.1 billion of net proceeds were received from the IPO.

Capital Expenditures $13 million in Q3 2025 and $25.7 million year-to-date. This supports manufacturing capacity expansion and aircraft development. Capital expenditures in 2023 were $153 million, highlighting early investments in industrialization.

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Operating Highlights

Electric Aircraft: BETA is certifying electric aircraft that are safer, less expensive to operate, quieter, more sustainable, and have higher reliability and dispatch rates than traditional aircraft. The company has logged over 100,000 nautical miles across 3 continents and 10 countries.

Charging Infrastructure: BETA manufactures, sells, and installs thermal management and charging infrastructure. It is the only OEM with a certified charger and a nationwide interoperable and multimodal charging network, which is now expanding internationally.

Propulsion Systems: BETA sells high-performance systems, including motors, batteries, flight computers, and sensor systems. The propulsion systems are producing positive contribution margins and are sought after by aerospace and defense companies.

Market Expansion: BETA is expanding its charging network internationally, including a contract to electrify Abu Dhabi airports and the installation of chargers in the UAE. The company is also conducting demos with Republic Airways in the Midwest and other operators in the Pacific Northwest.

New Orders: BETA secured a $1 billion production contract for motors and aftermarket services with Embraer Eve Air Mobility, representing a transformative upside to its backlog.

Certification Progress: BETA is in the final stages of certifying its H500A electric engine and has begun for-credit testing with the FAA. The CX-300 and ALIA A250 aircraft are also progressing in their certification phases.

Production Readiness: BETA has a 188,000 square foot production facility capable of producing up to 300 aircraft per year. The company is intermittently testing production lines at maximum rate to ensure readiness.

Vertical Integration: BETA owns and controls enabling technologies for electric aviation, including batteries, motors, flight controllers, and chargers. This vertical integration supports both aircraft sales and high-margin recurring revenue from battery and aftermarket sales.

Regulatory Engagement: BETA is actively working with the FAA and international authorities to develop policies for electric aviation. The company is also participating in the eVTOL integration pilot program, which will allow commercial operations to launch next summer.

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Risk or Challenges

Regulatory Hurdles: The company is navigating complex FAA certification processes for its electric aircraft and engines, which could delay product launches and operations.

Economic Uncertainties: The company is investing heavily in R&D and industrialization, with significant negative EBITDA and high operating expenses, which could strain financial resources if revenue growth does not meet expectations.

Supply Chain Disruptions: The company relies on timely delivery of components for its aircraft and charging infrastructure, and any disruptions could impact production schedules and financial performance.

Market Conditions: The success of electric aviation depends on market adoption and demand, which could be influenced by economic conditions, customer acceptance, and competition.

Strategic Execution Risks: The company is pursuing a vertically integrated model and international expansion, which requires flawless execution to avoid operational inefficiencies and financial losses.

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Guidance & Outlook

Revenue Guidance for 2025: BETA Technologies expects full-year 2025 revenue to be in the range of $29 million to $33 million.

Adjusted EBITDA Guidance for 2025: Adjusted EBITDA is projected to be in the range of negative $295 million to negative $325 million.

Certification and Industrialization Targets: The company is well-funded to continue pursuing certification and industrialization targets, supported by a strong cash position and recent IPO proceeds.

Production Capacity: The 188,000 square foot production facility is designed to support up to 300 aircraft per year, with most capital expenditures for industrialization already completed.

Charging Network Expansion: BETA is expanding its charging network internationally, including a contract to electrify Abu Dhabi airports and the installation of chargers in the UAE.

Aircraft Backlog: The combined number of deposit-backed orders stands at 891 aircraft, with hundreds more in active negotiation.

Recurring Revenue Model: BETA's business model includes high-margin recurring revenue from battery and aftermarket sales, in addition to aircraft sales.

Market Entry Strategy: The company plans to launch commercial operations next summer through the eVTOL integration pilot program, supported by regulatory and political tailwinds.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:Are the certification metrics provided by the FAA or developed by the company?

A:The company decided to track metrics directly aligned with FAA order 8110 instead of creating their own stages. These metrics measure both BETA's and the FAA's progress. For example, 13 of 20 compliance plans have been submitted, and the FAA has accepted 6 of them.

Q:Why was the motor timeline shifted to early 2026?

A:The timeline shifted to early 2026 due to the time required for durability endurance testing, which involves thousands of hours of testing. The company has completed the production of 11 FAA-conformed articles and is currently performing tests, including those witnessed by the FAA.

Q:What details were provided about the EIPP pilot project?

A:The EIPP project will involve both CTOL and VTOL aircraft, starting with CTOL. Applications for the project are submitted by states, and BETA is part of at least 10 applications. Aircraft delivery is planned within 90 days of selection, with a focus on cargo medical logistics initially. The project is expected to start as early as June 2026.

Q:How quickly could the VTOL aircraft follow the CTOL in the EIPP program?

A:The VTOL aircraft is expected to follow the CTOL with a lag of just under 12 months. The company is focusing on cargo medical logistics initially, which aligns with the FAA's safety-first approach.

Q:What is the company's strategy for managing supply chain and labor challenges?

A:The company focuses on vertical integration, pre-buying critical components, and reducing labor requirements. For example, they redesigned a wing to reduce parts and labor time significantly. They also had a strong turnout at a recent Career Day, indicating no shortage of talent.

Q:Why does the company refer to 'deposited backlog' instead of just 'backlog'?

A:Deposited backlog refers to orders backed by financial commitments, such as deposits. This ensures high-level surety for production planning. The company also tracks the conversion of these deposits into firm delivery schedules and progress payments.

Q:What is the timing and scope of the partnership with DB for undersea propulsion systems?

A:The partnership started with a $3-5 million program, with subsequent phases expected to grow 10x in size over the next 2.5 years. The company is expanding into more marine applications, particularly safety-critical and mission-critical undersea work.

Q:What is the scope of the partnership with Eve, and are more such partnerships expected?

A:The partnership with Eve involves a $1 billion backlog for propulsion systems, including initial motor sales and in-service fees. The company expects more such partnerships, as their propulsion systems are chosen for their certification path, performance, and production reliability.

Q:What is the status of the backlog and future order expectations?

A:The company has hundreds of aircraft in active negotiation, with a focus on CTOL orders due to existing infrastructure and pilot licensing. They expect increased orders every quarter, with a focus on high-quality operators and terms.

Q:What are the early learnings from customer deployments?

A:Key learnings include the importance of reserves in high-traffic regions, minimal maintenance requirements, and the need for efficient flight planning. The aircraft has proven reliable, requiring only minor adjustments like sealing leaks.

Q:What is the company's approach to the military variant (mVTOL)?

A:The mVTOL is an autonomous, hybrid aircraft with performance exceeding existing vertical takeoff and landing aircraft. It uses the same components as the civil aircraft but with a different fuselage. Removing the pilot and related systems doubles the aircraft's performance.

Q:What is the company's view on international defense opportunities?

A:The company is actively engaging with foreign allies, responding to RFIs and RFPs, and sees significant opportunities in Europe and Asia due to increased defense spending and the need for advanced drones and troop support systems.

Q:Review of Unclear Management Responses

A:No questions were identified where management avoided giving a direct answer or provided unclear responses.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

BETA Transcript

BETA Technologies, Inc. (BETA) Q3 2025 Earnings Call Transcript

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