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Aug 13, 2026, 4:09 PM ETIndustrials

Merlin, Inc. — Second Quarter 2026 Earnings Summary

MRLNMERLIN INC
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Financial Performance

  • Total revenue for the second quarter of 2026 was $2.2 million, compared to $1.0 million in the first quarter of 2026.
  • GAAP net loss for the second quarter of 2026 was $(58.4) million, an improvement from $(90.4) million in the first quarter of 2026.
  • Adjusted EBITDA loss for the second quarter of 2026 was $(27.8) million, compared to a loss of $(23.3) million in the first quarter of 2026.
  • Cash, cash equivalents, and short-term investments totaled $183.9 million as of June 30, 2026, increasing from $123.1 million as of March 31, 2026.
  • The company reported no debt as of June 30, 2026, having eliminated long-term debt and convertible promissory notes present at December 31, 2025.
  • Deferred revenue was $42,000 as of June 30, 2026, compared to $0 at December 31, 2025.
  • Stockholders' deficit was $(99.9) million as of June 30, 2026, compared to $(73.6) million at December 31, 2025.
  • Net loss attributable to common stockholders for the six months ended June 30, 2026, was $(219.3) million.

Business Segments and Product Lines

  • Completed the Critical Design Review (CDR) for the C-130J autonomy program with USSOCOM on June 4, 2026, moving toward system integration and ground testing.
  • Executed the first fully autonomous landing at the EAA AirVenture Oshkosh airport on July 17, 2026, using a Cessna 208B Grand Caravan.
  • Signed a non-binding Memorandum of Understanding with Israel Aerospace Industries (IAI) to advance AI-powered autonomy for Part 25 commercial cargo aircraft.
  • Achieved Stage of Involvement 3 (SOI 3) milestone with the New Zealand Civil Aviation Authority (CAANZ) and concluded a certification issue paper regarding AI/ML-based natural language processing within Merlin Pilot.
  • Merlin Pilot system has been proven through hundreds of autonomous flights from test facilities globally.
  • The C-130J autonomy program with USSOCOM has a total IDIQ contract ceiling value exceeding $100 million.

Market and Competitive Landscape

  • The IAI partnership targets the approximately 2,400-aircraft global civil cargo market (excluding China and Russia) identified in Airbus's 2025 Cargo Global Market Forecast.
  • Long-term objectives include addressing a global commercial aviation market of more than 22,000 aircraft as reported in the August 2025 IATA Global Commercial Aircraft Fleet Report.
  • The company positions itself as building the "operating system of record for autonomous flight" for any aircraft, military or civilian.

Risks and Challenges

  • Risks include the ability to execute defense program obligations, specifically under the USSOCOM C-130J prime contract.
  • Uncertainty exists regarding the outcome and timing of civil certification proceedings with the FAA and CAANZ, particularly for novel AI/ML-based functionality.
  • Dependence on U.S. government contracts poses risks related to changes in budget priorities, procurement decisions, or contract terminations.
  • The non-binding MOU with IAI may not result in definitive agreements or generate revenue.
  • The company faces risks related to its history of net losses and the ability to achieve and sustain profitability.
  • Potential competition exists from established aerospace and defense companies and other autonomous systems developers.

Management Commentary and Tone

  • CEO Matt George stated that the milestones represent meaningful evidence of progress toward building a certifiable autonomous core capable of safely and reliably flying any aircraft for any use case.
  • Management expressed confidence in building the operating system of record for the next century of aviation.
  • The tone highlights the diversity of challenges tackled across commercial, technology, and certification domains.

Other Key Points

  • The company has no debt as of the end of the second quarter.
  • Series A Preferred Stock dividends and accretion were $(8.2) million for the quarter, and a deemed dividend on a down round was $(60.8) million for the quarter.
  • A live webcast to discuss results was scheduled for August 13, 2026, at 4:30 pm ET.
  • The company reported a change in fair value of warrant liabilities of $(26.1) million for the quarter.
  • Accounts receivable increased to $1.8 million from $0.4 million at the end of the previous year.