Hello, everyone. Thank you for joining us, and welcome to the BETA Technologies Fourth Quarter and Full Year 2025 Financial Results Conference Call. [Operator Instructions] I will now hand the call over to Devon Rothman, Head of Investor Relations. Please go ahead.

Thank you, Warren, and good morning, everyone. Thank you for joining us for BETA Technologies Fourth Quarter and Full Year 2025 Earnings Call. Joining me today are Kyle Clark, our Founder and Chief Executive Officer; and Herman Cueto, 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 fourth quarter and full year 2025 financial results as well as our outlook for 2026. We also published our investor presentation, which is 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, Devon, and good morning, everyone. The fourth quarter was a strong finish to a defining year for BETA. In 2025, we showed up in the air and with our customers and regulators and in the capital markets. And we did so in a way that reflects the discipline and pragmatism that defined this company. We achieved several milestones in 2025 that materially advanced certification, commercialization and defense. We made meaningful progress across our certification programs with 3 notable achievements. We earned a Part 35 type certification for our propeller in partnership with Hartzell. We closed our G1 certification basis on the A250 vertical takeoff and landing aircraft, and we began 4 credit testing on our Part 33 motor. We advanced our commercial efforts with successful customer deployments both domestically and internationally. We flew our aircraft across Europe, and we opened the Paris Air Show. We flew at Oshkosh. We set multiple world records, and we won the Pulitzer Air race. We flew the first all-electric passenger flight in and out of JFK Airport. We completed our Phase 1 contract with General Dynamics, and our defense programs continue to grow. We also launched our strategic partnership and joint technology development program with GE. In 2025 and continuing to 2026, we are seeing significant regulatory tailwinds. In December, Department of Transportation released the AAM National Strategy, which is very much aligned with BETA strategy. Congress continues to invest in our future recently through the introduction of the bipartisan legislation titled the Aviation Innovation and Global Competitiveness Act, which will bring increased transparency to the FAA's policy and guidance development and certification programs, which is most important for AAM technologies. This outlines a partnership between the FAA and industry that improves the predictability of their deliverables, helping with our planning while preserving…

Thanks, Kyle, and good morning, everyone. Before turning to our results, I want to begin with a broader industry perspective. We are operating in one of the most constructive policy and regulatory environments our sector has seen in decades. The current administration has placed significant emphasis on domestic manufacturing, advanced air mobility and next-generation defense technologies. That focus is accelerating regulatory engagement, unlocking public-private collaboration and reinforcing the strategic importance of advanced technologies manufactured in the U.S. Within advanced air mobility, in particular, we are seeing meaningful federal alignment around certification, infrastructure development and early deployment frameworks. eIPP is a tangible example of that momentum. Here at BETA, consistent execution remains our foundation, and we continue to deploy capital with discipline and focus. Throughout 2025, the team demonstrated its ability to capitalize on opportunities with some of the most defining players in aerospace and defense, including GE, General Dynamics and Embraer Eve. Each of these relationships carry significant long-term potential, and we are already realizing financial results. Eve is a great example of that. What began as the delivery of several motors to support their flight test campaign evolved into an order worth up to $1 billion. Some of the demand we saw for our defense propulsion technologies came in the form of our selection as a partner for next-generation undersea vehicle applications. Our consistent execution and performance have strengthened our credibility and positioned us for additional work with favorable margins and durable long-term revenue. I am pleased to report full year revenue of $35.6 million for 2025, exceeding expectations and driven by stronger-than-expected component sales. This represents more than double our 2024 revenue of $15.1 million. Operating expenses in 2025 totaled $398 million compared to $283 million in 2024. This included $260 million in research and development and $138…

Your first question comes from Kristine Liwag with Morgan Stanley.

Kyle, [ this is Liwag ] in San Francisco. I was wondering, with the IPO proceeds, you were able to raise more than double the capital you initially thought you would. Can you talk about how much the incremental capital changed your plan and your business model?

Sure. I mean, fundamentally, it did not change our business model at all. It allowed us to advance a few things, though. We've increased our investment in vertical integration, specifically around things that we did not previously call core enabling technologies, but have become clear that we need to be world-class at. So in the past, fully vertically integrated on the motors, the propulsion systems, the batteries, the controls, the software. And we've extended that outward to have full vertical integration on the structures and other big bone elements of the aircraft. So that's one big investment in vertical integration. And the second thing is really pulling in our MV250 -- with the proceeds were, I think, partially a product of these large engagements we've had with General Electric and General Dynamics and Embraer. And those not only created the proceeds, but they also created really, really clear and valuable partnerships. In the turbo generator with GE, having clarity and confidence of the propulsion systems for the MV250, coupled that with the structure and a large reuse of the A250 components allowed us to pull that in. So the financial investment in pulling in the MV250 fundamentally advances that portion of our business model as compared to what we outlined in the IPO, which is a direct result of the proceeds. Herman, do you have anything on that?

Yes. Kristine, just maybe 2 points I would want to emphasize. So when we were together in September of 2025, and we were going through the analyst model, we had CapEx in 2026 for about $70 million and in 2027, about $130 million. So the $200 million at the midpoint that we're talking about is really just a pull-in of the 2027. So none of this is new spend. It's all contemplated spend. It's just pulling it in by about a year. And as we had talked about, the strong balance sheet puts us in the perfect position to do this.

And following up, Kyle, in your prepared remarks, you mentioned that the eIPP program pretty much brings forward the business model 1 year. Can you talk about what would be the most desired outcome out of eIPP? I mean how many flights -- what could this look like this summer? And what could it look like in 3 years?

Sure. I mean just a couple of points on that. The eIPP program isn't just about aircraft for us. It starts with the revenue and the clarity that we're already getting on the charging system deployments and the engagement with our customers. Remember, BETA's model is to sell the airplane directly to customers. So that really accelerated the engagement of those customers on things that are maybe a little less obvious like service maintenance, training and all-weather operations and getting the cadence with the aircraft earlier than we expect. But on the business model itself, which was really interesting is that our baseline business model had completion of type certification and then all of those materials would go to our operator partners that would then apply for a 135 certificate or similar. And that would take ConOps development and a whole lot of other systems, and then there would be a ramp into operation or entry into service. The eIPP system allows us to pull all of that forward and concurrently develop with our partners in the 135s, all of the ConOps suspects while we ramp our production and ramping the production, anybody who's been in production for a long time knows you don't go from 0 to 100 on 1 day. That is an engineering effort as well. It's a development effort, supply chain maturity, quality systems, supplier quality, all of those things have to mature. And what eIPP does, it allows us to take that ramp and again, overlay it with the aircraft type certification program, the 135 development and the ramp into production. So it really has a very nonlinear effect of taking things out of series, but also overlapping things and advancing the time. So I think it's a conservative estimate to say it advances our business by a year. It could be more than that.

Your next question comes from Ronald Epstein with Bank of America.

How should we think about the potential investment that would be required if things end up being very successful with eIPP, just to give folks a sense of kind of maybe how to model that if indeed BETA is successful, which we all hope and expect.

Yes. Ron, I'm anxiously awaiting to see where the ultimate awards come in. But if we were very successful in the eIPP, you could see an investment somewhere between -- I'm going to give a wide range, $75 million to $125 million, something like that.

Yes. The -- and expanding on that, Herman said it earlier, that investment isn't a new investment. It's an advancing investment that we would have been making at a later point in time. And just like the ramping of production, the cost-out curve of early rate, low-rate initial production aircraft to full rate production aircraft will happen faster as well. So a lot of that investment, again, would have happened anyway. And now we get to advance that and build those aircraft while we're working through type certification.

Got it. Got it. Super clear. And Kyle, you mentioned this on the call that engineering effort needed to ramp. Can you maybe peel back that in on that a little bit just to give folks a feel for some of the you're working through to get production system where you need it to be sort of when you think it will need to be there?

Yes, for sure. So I think one of the insights that Sean Donovan, our Chief of Operations, brought to BETA from Tesla was that we needed to expose the issues in production early. So our strategy is to set up a production line, take, for example, our battery line or our wing line, run it at full rate for a period of time. So if we had the battery line running for 5 days at full rate, then stopped for 5 weeks, we allow ourselves to expose the pinch points in the line. And then you apply the engineering resources, typically production or manufacturing engineering resources, sometimes design, but mostly production and manufacturing, where we find those pinch points in the line, whether it's data processing, actual assembly time, inspection, robotics, any of those things, and we address them. And that takes engineering. So if we have a laser welder that needs a cool downtime, we expose that very early. And then we apply -- we apply automation in the right places. Just recently on our battery line, for example, a plasma surface preparation system was fully automated because it was found to be a pinch point unexpectedly. So that required manufacturing production engineering to balance that line. That also reaches way back to kitting and supply chain and inventory management, where we use a highly visual manufacturing system where we design tools so that when screws, bolts and nuts show up on the line, they are in a way that the assembly technician is going to use them. It helps with our quality, it helps with our speed. And then the last thing that has been a big focus of engineering and production, Ron, has been the automated -- the use of automated tools for inspection documentation. So utilizing Wi-Fi connected screw drivers effectively to map the angle, the torque and the position of every screw that we put in drastically minimizes the human check boxes that have to happen. So those are the types of engineering investments we're making in manufacturing.

Your next question comes from Sheila Kahyaoglu with Jefferies.

Maybe just on 2 questions. First, I'll start off with the backlog. You called out a backlog greater than $4 billion by the end of '26. Can you talk about some of the drivers of this and line of sight to that and how defense plays into it as well, please?

Sure. I mean, look, we -- like real time during this meeting are getting extreme line of sight. There's a series of docs on my desk right now of deals that are ready to be executed. But we are in the fortunate position to make sure the terms of those deals are favorable and aligned with BETA's rollout strategy. And I just saw as we were getting ready for this call this morning, that our counterparts executed an agreement that takes a good bite out of that backlog goal for this year for aircraft. So we have very good line of sight. When we're preparing the materials, we had a little less. Now it's even better. So that is with commercial operators that have found applications for the electric aircraft in places that we believe that are going to have very successful entry into service. High cadence, low cost, relatively short range, starting with cargo, medical and logistics. And that's the type of operators that we're partnering with.

Yes. Sheila, I just want to reemphasize Kyle's last point. We set a very high bar on what goes into our backlog. We're very selective with our customers. We want good launch partners, and we want partners who are going to come with large orders and deposits. So it's a very high bar. And as Kyle said, we were excited to see some documents get signed early this morning that, again, will take a big chunk towards that $4 billion backlog, and we'll be announcing that shortly.

Got it. And then can I ask on EBITDA, just a wide range from $305 million to $395 million, how do we think about that? What changes post Q1? Is it G&A, R&D? How do we think about the EBITDA range and the cadence?

Yes. What I would say is -- so in the first quarter, we're certainly going to be investing more just like we did in the fourth quarter, where we're buying long lead time materials. So you'll see that continue into Q1, and then it will settle out as we get into the second quarter and the back half of the year. The wide range is -- it's a fast-moving business, and we really do not want to ever be in a position where we have to slow things down. And there are always investments that come up, and we just put that wide range in there just to make sure we have the flexibility to run the business the way we want.

Your next question comes from Andre Madrid with BTIG.

Can you maybe just -- do you have a sense of what the revenue contribution per IPC bid could be? I mean what could it look like if you want on the charger side or the aircraft side or both? Just any color as to how material it will be?

Yes. Andre, it's Herman. I'll start and then maybe Kyle could jump in. I don't think we're in a position where we will talk about revenue numbers right now. The OTAs certainly need to be negotiated and we'll get more clarity. But the way to think about it is there could be potentially 3 revenue streams. One would be through charge. The second would be through training and maintenance. And then the third would be aircraft monetization. So whether the aircraft was rented or leased or ultimately bought, that's sort of how I would think about the revenue streams. And one important point is the operators who we partnered with for eIPP are actually our customers in the backlog. So I think that's an important call out. I don't know if...

That's a great point. I mean, look, if a customer has a 25 or 50-unit order and we're putting 3 or 5 aircraft into their eIPP program, if we get a lease payment over the course of the 36 months of the program, that's great. But the real objective here is much more than short-term revenue. Just like in the General Dynamics, the Textron, the GE, the Embraer jobs, we're planting the seeds that will germinate into much larger orders in the future. Herman mentioned it a few minutes ago. You have to think about the eIPP the same way. We'll make good revenue on that. And by the way, on a per unit basis, on a margin per unit basis, the propulsion systems that we've been selling, they're very profitable on a per unit basis. But that's not why we're doing it. We're doing it because they grow into something much bigger. Getting these aircraft out in the world, there's a lot more to operating aircraft than just the aircraft, of course. I think everybody knows that. And big ones are like the service, the training, the maintenance, the continuous high cadence operations and the trust we have to build with the industry and the market that electric aircraft do indeed achieve the economic benefits that we outlined. So yes, I think that we should look at the revenue because it's real money, but it is not the exclusive focus here.

Got it. Got it. That's really helpful. And then if I could pivot back to the backlog. From my understanding, that build that you're targeting for '26 is mainly focused on the aircraft. But can you maybe just talk about what growth you have earmarked for merchant supplier work and how that could -- what that backlog looks like and what it could grow to by the end of the year -- yes, go ahead.

No, your read of how we define the backlog is correct. We are reporting the KPI and aircraft backlog. That's the prime mover of the business, and we expect that to grow with high certainty now to $4 billion and beyond. On the merchant supply itself, one of the cool things about the way this has materialized, as Herman said, we developed a couple of prototypes. We delivered them to a customer. That resulted in a large order. That order is made up of a couple of parts. Between now and type certification, we, of course, deliver a bunch more propulsion systems and the research development documentation and other engineering assets and artifacts to support those programs. So that grows. And each of these things, one of them that is classified, we can't talk much about the details of it. But from a revenue perspective, each of the phases is about 10x bigger than the prior phase. And like we're not just -- we're not a job shop. We're not taking this work for the short-term revenue. We're taking it because it steps up in that order. Our revenue as a company has doubled year-over-year. The valuation of our company across the 4 rounds from 1 to 2 and all the way up to 8 effectively doubles in each round. And that's how we're thinking about the merchant supply as well. We're planting the seeds now. We're delivering a handful of motors, 8, 10 motors, whatever the customer needs and they select us for the subsequent phases on the merits of the technology, the reliability and the performance, first and foremost, and of course, on BETA's ability to deliver.

Your next question comes from Andres Sheppard with Cantor Fitzgerald.

Congratulations on all the great achievements last year and so far this year. I think a lot of our questions have been asked by now. But maybe coming back to the eIPP. Kyle, I'm just curious if you can maybe share how do you see the program unfolding? Once the programs have been announced, once the participants have been announced, you foresee all projects starting at the same time, maybe one at a time? Do you foresee multiple OEMs participating in each project simultaneously? Just curious how you're thinking about it as we get closer and closer to those projects being announced.

Yes. Great question. So I think it's really important to define the difference between a demonstration and an operation. So when we entered into this, we focused on operations. We did not want to go out with 1 aircraft and go to 5 different states. We wanted to provide 5 aircraft to 1 state and 3 aircraft to another state and 2 aircraft to another state and 5 aircraft to another state so that those aircraft can get into high cadence operations every single day in all weather. However, that doesn't happen on day 1. No, to answer your very specific questions, are all OEMs going at the same time? Of course, not. BETA right now has had more real-world flying experience with customers than any other company in this industry. I had to sign an attestation to the Department of Transportation that within 90 days of the negotiation of these OTA contracts, we could be in service. Now that's so that BETA can lead the deployment into these states and applications. This is because of the maturity of the aircraft, our charging network and the fact that we're starting with cargo and medical first and then moving to passenger. And we're engaged with customers that have safe and reliable operations. That's different than other folks who have applied for this application. So like the states selected this. The state selected the aircraft and we start with Part 91, we go and we do route validation, then we move to 135. And if everything goes well, we will then start revenue-producing applications for cargo, medical and logistics, then we'll move to the VTOL and then we'll move to passenger thereafter. BETA is fundamentally different than other folks because of the real-world opportunities that we've uncorked internationally and domestically, and we continue -- and we intend to continue to do that.

Wonderful. That's super helpful. I really appreciate all that color. Maybe the last one, one for Herman. Can you give us a sense perhaps on cash use for this year, how you're thinking about that? I realize you guided or are targeting a CapEx number for the year. Just wondering if you can maybe help us complete the picture, how should we think about cash use, particularly as you begin to ramp up production of your aircraft and get to 4.5 per month by year-end?

Yes. Thanks for the question, Andres. I would say right now, with this guide, excluding eIPP, the cash use will be about $500 million. So if you were to look at about $200 million for CapEx at the midpoint and if you take the EBITDA range at the midpoint of $350 million, we'll have some interest income that will kind of offset some of that. But when you put those 3 pieces together, you probably get to about $500 million before an eIPP investment.

Your next question comes from Chris Pierce with Needham.

If I look at the deck and the VTOL certification slide, I just want to get a sense of what that should look like over this year. I know that you sort of hit on in the remarks. We shouldn't expect -- I just want to confirm, we shouldn't expect movement here, but we should expect movement on the CTOL side. And that, in turn, allows the VTOL side to move faster when it begins to move. Is that the right way to think about it?

Yes. I'd say it a little bit differently, but conceptually, that is exactly the right way to think about it. Let me give you an example. On the CTOL, if we were tracking the progress of the propulsion system contained within those bars, then of course, the bars move much quicker because we built -- I believe we're the only company in the industry that's built conforming hardware that's gone into credit testing. We've done that pervasively across a large number of units in the motor. In fact, just this morning, I got a report out from the team that we've completed the durability test with over 1,300 flight cycles for credit in a bunch of different environments. That is not -- that is exclusively shown on the H500A engine certification test bars. It is not shown on the CTOL. And by way of extension, on the VTOL bars, there's a small delta, about 15% of requirements planning and a little bit larger delta on the implementation when we move from CTOL to VTOL. So those bars are separated to give absolute transparency to all of you on the things that need to happen for each of these certification programs. But the things that need to happen are contained to the deltas between the prior validation verification or certification activities and the subsequent ones. So you should see -- expect to see movement on the A250 certification program this year. We have done a ton of vertical flying, a lot of different experimentation. I believe we're the first company to actually get delegation for our lift props with a DER. We've gotten additional delegations across the CX300. I think we achieved somewhere near 80 delegations in the last month. So these are really important, I would say, nondirectly measured elements of progress that result in measured elements of progress as well. But fundamentally to your question, you will see movement on all fronts, and the movement is representing the delta required between the propulsion to the airplane, the airplane to the aircraft.

Okay. Perfect. And then did I hear you correctly that on eIPP, you might fly CTOL and VTOL aircrafts? Or I guess my thinking was it would mostly be CTOL, but is there a possibility for VTOL flying in this program as well this year?

Yes. In fact, every single one of the applications we put in have both CTOL and VTOL aircraft. I apologize if I focused on CTOL because that's what we're launching first with. We directly go into VTOL thereafter. It's how our entire business model is designed. And the beauty of that is that our customers get exposure to training an electric aircraft, charging, managing batteries, flying with a fly-by-wire system, which is, of course, universal to all our aircraft and then they step into VTOL. In fact, our training team, and I think I mentioned this to you or another analyst earlier, has developed the full training curriculum for the VTOL aircraft. It has 5 modules. The first 3 of 5 modules are the CTOL aircraft, where the systems, the fly-by-wire system, all of the things associated with flying the ALIA aircraft are learned in those 3 modules. And then there's 2 additional modules for vertical takeoff and landing variants. So for our customers, that gives them a very easy pathway. Of course, the charging is the same and the maintenance is about the same. So yes, we do -- we will be flying eVTOL aircraft should we be selected for the eVTOL integration pilot program.

And just to put a finer point on that, I think there's huge advantages with this program, especially for the VTOL market here where it's going to be advantageous for us for our customers to be able to do all the things that Kyle talked about there in one of the previous questions and pulling in those training time lines and whatnot ahead of full type certification to get these into service earlier. So it has tremendous benefits to us, to the customers and the industry as a whole.

Thank you for your questions. I will now turn the call over to Kyle Clark for closing remarks.

Yes. Thank you, everybody. I appreciate you guys sticking around on this call. I think just as kind of closing remarks, what is awesome to us here at BETA is that the pieces are falling into place. And our strategy of a stepwise approach into the market is being respected and mirrored with the ATC modernization efforts, the Department of Transportation, the FAA. I mean, we've got great leadership there with Duffy and Rocheleau and Bedford and Edwards, all stepping up, doing what they said they're going to do and giving us a platform and a canvas to deploy advanced air mobility. I think we've positioned ourselves to win on the eIPP. Our manufacturing is in place. Our training is there. Our service and support is ready to go, and we have a track record of safe and reliable flight operations. And that's all, of course, positioned us for cert, but it's positioned us to deploy these aircraft early. And I think the insight of our business model is becoming clear. There's an energy here at BETA that is like you can feel it. You can feel it when you walk into the facilities. We are focused on getting through this H500A certification, and it's not without challenges, but we are driving right through all of those challenges on a day-to-day basis. And the seeds that we planted over the last several years with customers are maturing right now, and these second phase and third phase programs are in our line of sight. And we're just excited about executing on them and seeing our revenue grow, seeing our products mature and, of course, getting through the certification. So I'm jazzed, and I really appreciate all you all are doing for us and with us and asking the questions and critiquing our business, because I think you all will come to the same realization as time goes by.

This concludes today's call. Thank you for attending...