Merlin (MRLN) Q2 2026 earnings summary

Executive summary

• Ended Q2 2026 with $183.9 million in cash equivalents and short-term investments, with no debt, providing a strong financial foundation for ongoing operations and growth.

• Achieved major milestones: completed critical design review (CDR) for the C-130J program, signed a non-binding MOU with Israel Aerospace Industries for commercial cargo autonomy, reached SOI 3 certification milestone with the Civil Aviation Authority of New Zealand, and completed the first fully autonomous landing at a major airshow.

• Progressed on both defense and civil aviation fronts, positioning for a multi-billion dollar total addressable market (TAM) annually, with a recurring revenue model based on licensing the Merlin Pilot autonomy platform.

• Completed a business combination and public listing, raising significant capital through PIPE transactions and warrant issuances.

• Building a go-to-market network with partners like World Star Aviation and IAI, targeting over 29,000 addressable aircraft globally.

Financial highlights

• Q2 2026 revenue was $2.2 million, up from $1.0 million in Q1 2026, but down 29% year-over-year due to contract phase transitions.

• GAAP net loss for Q2 was $58.4 million, an improvement from $90.4 million in Q1 2026, but higher than $16.3 million in Q2 2025, mainly due to increased R&D and G&A expenses.

• Adjusted EBITDA loss was $27.8 million in Q2, compared to a $23.3 million loss in Q1, reflecting increased investment in engineering and certification.

• Cash, cash equivalents, and short-term investments totaled $183.9 million at June 30, 2026, up from $123.1 million at March 31, 2026.

• No debt reported as of Q2 2026.

Outlook and guidance

• Existing resources are expected to fund growth into fiscal 2028 based on current operating plans, with cash runway projected for at least the next twelve months.

• Revenue in the near term will be driven by progress on the C-130J IDIQ contract, with meaningful revenue expected in 2027 from the next phase.

• Anticipated Q3 and Q4 2026 revenue between $4 million and $6 million if milestones are met.

• Management expects continued net losses as investments in R&D and commercialization persist, with anticipated reductions in engineering costs and improved platform performance.

• Ongoing focus on civil certification, commercial launch, and scaling of new platforms, including Condor.