Merlin, Inc. Common Stock Q2 Earnings Call Highlights

Second-quarter revenue rose to approximately $2.2 million , up $1.2 million sequentially, while Merlin ended the quarter with $183.9 million in cash and short-term investments and no debt. The company expects second-half 2026 revenue of $4 million to $6 million if planned milestones are achieved. Merlin completed the critical design review for its C-130J autonomy program, moving the project toward integration and flight testing. The company expects meaningful C-130J revenue from the next phase in 2027. Merlin advanced its commercial and regulatory efforts by signing a non-binding cargo-aircraft partnership with Israel Aerospace Industries and reaching SOI 3 certification progress with New Zealand’s aviation regulator, including validation of key autonomy components. Merlin, Inc. Common Stock NASDAQ: MRLN reported second-quarter revenue of approximately $2.2 million as the aviation-autonomy company advanced its C-130J program, expanded its commercial cargo partnerships and reached a certification milestone with New Zealand’s aviation regulator. Revenue for the quarter ended June 30, 2026 increased by $1.2 million from the first quarter, with the substantial majority recognized under the company’s defense indefinite-delivery, indefinite-quantity, or IDIQ, contract structure as task orders were funded and work was completed, Chief Financial Officer Ryan Carrithers said. Merlin ended the quarter with $183.9 million in cash equivalents and short-term investments and no debt, up $60.8 million from the prior quarter. The company said it believes its available resources are sufficient to fund its growth plans into fiscal 2028 based on its current operating assumptions. Founder and Chief Executive Officer Matt George said Merlin completed the critical design review, or CDR, for its C-130J program with its lead customer during the quarter. The milestone moves the program toward integration, ground testing and flight testing on an initial aircraft. The company is working with its customer and subcontractors to define the scope and timeline for future integration work. Carrithers said Merlin expects “meaningful revenue” from the next phase of the C-130J program in 2027, though the company did not provide revenue guidance for that year. For the second half of 2026, Carrithers said Merlin expects revenue of between $4 million and $6 million if it achieves its planned milestones. George said the initial integration of the Merlin Pilot autonomy system onto a C-130J will require substantial work and capital, as it represents the move from an initial capability to deployment on a large U.S. Air Force aircraft. He said the company expects the lessons learned from integrating on the C-130J to support work on other large, multi-engine turbine aircraft. Merlin’s revenue model consists of three phases: adapting its Merlin Pilot software to a customer’s airframe and requirements, integrating the system onto an aircraft, and collecting recurring licensing fees over the remaining operational life of the airframe. Carrithers said pricing in each phase depends on the complexity of the work and the value delivered to the customer. At the Farnborough air show, Merlin and Israel Aerospace Industries signed a non-binding memorandum of understanding to pursue the development, integration and certification of AI-powered autonomy for commercial cargo aircraft. The planned engagement includes engineering collaboration, market exploration, regulatory preparation and selection of an initial aircraft platform, according to George. Merlin said the relationship with IAI, along with its previously...