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Item 7. Management’s Discussion and Analysis

2026-02-27 compared with 2025-02-27 · 125 added, 88 removed, 198 unchanged (52% of the section changed)

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Please see the section of this Annual Report titled “Special Note Regarding Forward-Looking Statements.”

We have spent more than a decade designing and testing a piloted all-electric, vertical take-off and landing (“eVTOL”) aircraft that we intend to operate as part of a fast, quiet and convenient service in cities around the world.

The aircraft is quiet when taking off, near silent when flying overhead and is being designed to transport a pilot and up to four passengers - or an expected payload of up to 1,000 pounds - at speeds of up to 200 mph.

We have spent more than a decade designing and testing a piloted all-electric, vertical take-off and landing (“eVTOL”) air taxi that we intend to operate as part of a fast, quiet and convenient service in cities around the world.

The aircraft is quiet when taking off, near silent when flying overhead and is being designed to transport a pilot and up to four passengers - or a targeted payload of up to 1,000 pounds - at speeds of up to 200 mph.

The aircraft is optimized for urban routes, with a target range of up to 100 miles on a single charge.

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The low noise enabled by the all-electric powertrain will allow the aircraft to operate around dense, urban areas while blending into the background noise of cities.

With thousands of successful test flights already completed, and as the first eVTOL aircraft developer to receive a signed, stage 4 G-1 certification basis which was subsequently published in final form in the Federal Register, we believe we are well positioned to be the first eVTOL manufacturer to earn airworthiness certification from the Federal Aviation Administration (“FAA”).

We do not currently intend to sell these aircraft to independent third parties or individual consumers as a primary business model.

Instead, we plan to manufacture, own and operate our aircraft, building a vertically integrated transportation company that will deliver transportation services to our customers, including government agencies such as the U.S.

Air Force (“USAF”) through sales or contracted operations, and to individual end-users through a convenient app-based aerial ridesharing service.

We are targeting initial passenger operations in 2025 or 2026.

We believe this vertically-integrated business model will generate the greatest economic returns over time, while providing us with end-to-end control over the customer experience to optimize for customer safety, comfort and value.

There may be circumstances in which it is either required (for example, due to operating restrictions on foreign ownership in other countries) or otherwise desirable to sell aircraft in the future.

We do not expect this would change our core focus on building a vertically integrated transportation company.

In August 2025, we added another milestone flight to thousands of successful test flights, with our piloted eVTOL flight between two public airports in FAA-controlled airspace, demonstrating operational maturity and integration with existing air traffic.

As the first eVTOL aircraft developer to receive a signed, stage 4 G-1 certification basis which was subsequently published in final form in the Federal Register, we believe we are well positioned to be the first eVTOL manufacturer to earn standard airworthiness certification from the Federal Aviation Administration (“FAA”).

We have multiple special airworthiness certificates already issued by the FAA for our fleet of pre-type certification aircraft.

We have identified three potential routes to market:

(1) Joby owned and operated air taxi service (2) affiliate owned and operated service and (3) direct sales and defense.

We plan to manufacture, operate and sell our aircraft, and are building a vertically integrated transportation company to maximize the value of our investments.

In addition to building a novel aircraft, we are also building a proprietary operating system that integrates data across aircraft build, operations and maintenance.

At the front end, we are developing a convenient app to deliver the first on-demand, aerial ridesharing service.

We are targeting carrying our first passengers in 2026.

We believe this vertically-integrated business model will generate the greatest economic returns over time, while providing us with end-to-end control and information regarding customer experience to optimize for customer safety, comfort and value.

In August 2025, we acquired Blade Urban Air Mobility, Inc.

and its subsidiaries (“Blade”), a technology-powered, global urban air mobility platform.

Following the acquisition, Blade continues to operate its air charter broker service as our wholly owned subsidiary.

The transaction is expected to unlock immediate market access, including an established customer base, operational expertise, airport relationships and infrastructure across key urban corridors in New York City and Southern Europe and allow us to combine our best-in-class technology with Blade’s experience in delivering premium customer transportation at scale.

Since our inception in 2009, we have been primarily engaged in research and development of eVTOL aircraft.

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While we believe the global market for UAM will be large, it remains undeveloped and there is no guarantee of future demand.

We delivered our first aircraft for initial service operations with the DOD in September 2023 and are targeting initial passenger operations in 2025 or 2026.

We delivered our first aircraft for initial service operations with the DOD in September 2023 and are targeting carrying our first passengers in 2026.

Our business will require significant investment leading up to launching these services, including, but not limited to, final engineering designs, prototyping and testing, manufacturing, software development, certification, pilot training, infrastructure and commercialization.

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and increases in fuel efficiency, autonomy, or electrification of cars.

In addition, macroeconomic factors could impact demand for UAM services, particularly if end-user pricing is at a premium to ground-based transportation alternatives or more permanent work-from-home behaviors persist.

We anticipate initial operations with our U.S.

government customers to be followed by operations in selected high-density metropolitan areas where traffic congestion is particularly acute and operating conditions are suitable for early eVTOL operations.

In addition, macroeconomic factors could impact demand for UAM services, particularly if end-user pricing is at a premium to ground-based transportation alternatives.

We anticipate initial operations in the U.S.

under the eIPP to be followed by operations in selected high-density metropolitan areas where traffic congestion is particularly acute and operating conditions are suitable for early eVTOL operations.

We believe that the primary sources of competition for our service are ground-based mobility solutions, other eVTOL developers/operators and local/regional incumbent aircraft charter services.

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Even if we are first to market, we may not receive any competitive advantage or may be overtaken by other competitors.

If new or existing aerospace companies launch competing solutions in the markets in which we intend to operate or obtain large-scale capital investment, we may face increased competition.

If new or existing companies launch competing solutions in the markets in which we intend to operate or obtain large-scale capital investment, we may face increased competition.

Additionally, our competitors may benefit from our efforts in developing consumer and community acceptance for eVTOL aircraft and aerial ridesharing, making it easier for them to obtain the permits and authorizations required to operate an aerial ridesharing service in the markets in which we intend to launch or in other markets.

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We think of the FAA type certification process in five stages and have made significant progress towards certification.

We have completed or substantially completed three of these five stages.

We have completed or substantially completed three of these five stages and are more than halfway through the fourth stage.

In 2022, we received our Part 135 operating certificate, which is required for us to operate an on-demand air service and allows us to operate the service with conventional aircraft.

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If the FAA requires further modifications to our existing G-1 certification basis, makes subsequent modifications to the SFARs, or if there are other regulatory changes or revisions, this could delay our ability to obtain type certification, and could delay our ability to launch our commercial passenger service.

We expect the FAA type certificate will be reciprocated in certain international markets pursuant to bilateral agreements between the FAA and its counterpart civil aviation authorities.

We expect the FAA type certificate will be validated in certain international markets pursuant to bilateral agreements between the FAA and its counterpart civil aviation authorities in other countries.

In 2022, we applied for aircraft certification in the United Kingdom and Japan.

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Government Contracts

In December 2020, we became the first company to receive airworthiness approval for an eVTOL aircraft for a flight clearance from the USAF to conduct a government test, and in the first quarter of 2021 we officially began on-base

operations under contract pursuant to the USAF’s Agility Prime program.

In December 2020, we became, to our knowledge, the first company to receive airworthiness approval for an eVTOL aircraft for a flight clearance from the USAF to conduct a government test.

Our multi-year relationship with the DOD and other U.S.

government agencies has provided us with a compelling opportunity to more thoroughly understand the operational capabilities and maintenance profiles of our aircraft in advance of commercial launch.

We believe that the DOD is potentially shifting its priorities under the Agility Prime program towards hybrid aircraft and autonomous flight technologies and as a result our existing contracts may be reduced or modified.

With growing USAF interest in hybrid powertrains and autonomy in aviation, we leveraged our existing aircraft platform to address these areas.

In the summer of 2025, we participated in the USAF’s Resolute Force Pacific (“REFORPAC”) exercise, successfully demonstrating our Superpilot (TM) autonomous flight technology.

We continue to work on autonomy programs with the USAF.

Additionally, we are working with L3Harris on leveraging our platform to address opportunities to sell aircraft for defense applications.

We are actively pursuing additional contracts with the DOD and other government agencies in these areas and believe that our investments in hydrogen-electric and autonomous technology will position us well to capitalize on these opportunities, but we may be unable to secure additional contracts or continue to grow our relationship with the U.S.

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Vertically-Integrated Business Model

Our business model is to serve as a vertically-integrated eVTOL transportation service provider.

Our primary business model is to serve as a vertically-integrated eVTOL transportation service provider.

Present projections indicate that payback periods on aircraft will result in a viable business model over the long-term as production volumes scale and unit economics improve to support sufficient market adoption.

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If we are unable to add sufficient headcount it could impact our ability to meet our expected timelines for certification and entry into service.

The global economy has recently seen a significant rise in tariffs and other protective trade measures that have applied to a wide range of finished goods and raw materials.

While tariffs have not had a material impact on our business, financial condition or results of operations to date due to the limited scale of our prototype manufacturing and focus on certification efforts, over time new tariffs or other restrictions imposed in connection with trade wars or political instability could increase the costs of raw materials and other goods, both for us and our suppliers, particularly as we begin to scale our manufacturing operations and produce aircraft for commercial use.

We believe that our high level of vertical integration, coupled with our investments in U.S.

manufacturing facilities, give us a competitive advantage with increased flexibility to adapt to future trade policy changes and are actively working to minimize the potential impact of any such tariffs or other restrictions.

The success of our business is also dependent, in part, on the utilization rate of our aircraft, which is the amount of time our aircraft spend in the air carrying passengers.

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Components of Results of Operations

Flight services

Flight services revenue primarily includes consideration received for our performance of customer-directed flights and on-base operations for various DOD agencies.

We recognize revenue as we fulfill our performance obligations in an amount that reflects the consideration we expect to receive.

Revenue consists of passenger revenue and other revenue.

Passenger revenue primarily includes revenue generated from the transportation of passengers via helicopter or fixed wing aircraft, booked through Blade.

Flights are typically booked through Blade associates, the Blade app, or third-party channels and paid for principally via credit card transactions, wire transfers, checks, customer credits, and gift cards.

Flight payments are typically collected at the time of booking before the performance of the related service, and revenue is recognized when the service is completed.

Other revenue primarily includes revenue from government flight services, customer demonstration and exhibition activities, and engineering services.

Government flight services revenue primarily includes consideration for our performance of customer-directed flights and on-base operations for various U.S.

Department of Defense (DOD) agencies.

The other revenue is recognized (i) over time, as the performance obligations are satisfied, in an amount that reflects the consideration we expect to be entitled to in exchange for those services, typically measured based on flight hours, service hours, milestones, or other relevant metrics;

or (ii) at a point in time, upon termination of a contract, if applicable, when we have fulfilled our obligations and no further performance is required.

Operating expenses

Flight services

Flight services expenses consist primarily of costs related to flight, flight support, and maintenance personnel, expenses associated with support aircraft such as rent and fuel, depreciation of capitalized ground support equipment, and our aircraft electricity cost, as directly attributed to our performance of the flight services.

Cost of Revenue

Cost of Revenue consist primarily of costs related to operators of aircraft and vehicles, flight support, maintenance personnel, expenses associated with support aircraft such as rent and fuel, depreciation of capitalized ground support equipment, and our aircraft fuel or electricity cost, landing fees, pilot salaries, as directly attributed to our performance of the flight services and customer demonstration and exhibition activities, and costs of providing engineering services.

Flight services expenses do not include the costs of manufacturing our aircraft and aircraft parts as such costs are expensed when incurred as Research and Development Expenses (see below).

Research and Development Expenses

Research and development expenses consist primarily of personnel expenses, including salaries, benefits, and stock-based compensation, costs of consulting, equipment and materials, depreciation and amortization and allocations of overhead,

including rent, information technology costs and utilities.

Research and development expenses are partially offset by payments we received in the form of government grants, including those received under the Agility Prime program.

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Other costs include business development, contractor and professional services fees, audit and compliance expenses, insurance costs and general corporate expenses, including allocated depreciation, rent, information technology costs and utilities.

We expect our selling, general and administrative expenses to increase as we hire additional personnel and consultants to support our operations and comply with applicable regulations, including the Sarbanes-Oxley Act (“SOX”) and other SEC rules and regulations.

Gain (Loss) from changes in Fair Value of Warrants and Earnout Shares Liabilities

Publicly-traded warrants (“Public Warrants”), private placement warrants issued to Sponsor (“Private Placement Warrants”) and warrants issued to Delta Air Lines, Inc.

(“Delta Warrants”) and shares of common stock owned by Sponsor subject to certain terms on vesting, lock-up and transfer (“Earnout Shares”) are recorded as liabilities and subject to remeasurement to fair value at each balance sheet date.

We expect to incur an incremental income (expense) in the consolidated statements of operations for the fair value adjustments for these outstanding liabilities at the end of each reporting period.

2024 Acquisitions

On May 31, 2024, we completed the acquisition of certain assets of an aerospace company that develops modular autonomy technology for aviation in exchange for 1,944,990 shares of our common stock with an aggregate acquisition date fair value of $9.5 million.

The transaction is expected to contribute to development of autonomous capabilities of our aircraft and to accelerate the execution of our contract deliverables with the U.S.

Department of Defense.

The acquisition was accounted for as a business combination as the assets acquired constituted a business in accordance with ASC 805 Business Combinations .

As part of the acquisition, we also issued 1,375,245 shares of the Company common stock subject to lock-up period of twelve month following the acquisition date (“Holdback Equity”).

The number of shares of Holdback Equity to be released at the end of the lock-up period depends on the continuing employment of selected employees of the aerospace company, whose employment transitioned to us as a result of the acquisition, and the weighted volume average price of our common stock at the end of the lock-up period.

The number of shares of Holdback Equity to be released may additionally be reduced to satisfy certain indemnification obligations, if any, of the seller.

We accounted for the Holdback Equity under ASC 718 Compensation — Stock Compensation as a compensation arrangement separate from the business combination and will recognize $8.7 million as stock-based compensation expense over the lock-up period, commencing on the acquisition date.

The purchase consideration of $9.5 million was preliminarily allocated to $7.4 million of total intangible assets comprising of $6.9 million of acquired developed technology and $0.5 million of contract assets, $1.6 million of acquired fixed assets comprising of aircraft, related equipment and other long lived assets, $0.3 million of acquired goodwill, and $0.2 million of acquired current assets.

The acquired goodwill is not tax deductible.

It represents the excess of the acquisition price over the preliminary fair value of identifiable assets acquired at the acquisition date and is primarily attributable to the assembled workforce and expected synergies at the time of the acquisition.

The fair values of the acquired assets are still provisional and subject to change within the measurement period.

The final determination of the fair values of the acquired assets is expected to be completed as soon as practicable, but no later than one year from the acquisition date.

We expect our selling, general and administrative expenses to increase as we hire additional personnel and consultants to support the growth of our operations and comply with applicable regulations.

Loss from changes in Fair Value of Warrants, Earnout Shares and Contingent Consideration

Publicly-traded warrants (“Public Warrants”), private placement warrants issued to Sponsor (“Private Placement Warrants”), warrants issued to Delta Air Lines, Inc.

(“Delta Warrants”), shares of common stock owned by Sponsor subject to certain terms on vesting, lock-up and transfer (“Earnout Shares”) and contingent consideration related to Blade acquisition EBITDA Earnout are recorded as liabilities and subject to remeasurement to fair value at each balance sheet date.

We expect to incur incremental income (expense) in the consolidated statements of operations for the fair value adjustments for these outstanding liabilities at the end of each reporting period, except for the Private Placement Warrants, which were fully exercised on August 11, 2025 as described in Note 8 of our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

2025 Acquisition

On August 29, 2025, the Company completed the acquisition of 100% of the outstanding equity of Blade Urban Air Mobility, Inc., a wholly owned subsidiary of Strata Critical Medical, Inc, f/k/a Blade Air Mobility, Inc.

Blade Urban Air Mobility, Inc.

and its subsidiaries (“Blade”) operate a technology-powered, global urban air mobility platform through which they provide air charter broker and other services.

The transaction is expected to unlock immediate market access and infrastructure across key urban corridors in New York City and Southern Europe and allow the Company to combine its best-in-class technology with Blade’s experience of delivering premium customer transportation at scale.

The Company acquired all assets and assumed liabilities of Blade for total purchase consideration of approximately $92.4 million, consisting of (i) 5,325,585 shares of the Company’s common stock with an aggregate fair value of $74.5 million, calculated net of $1.5 million attributed to the Company’s post-combination compensation expense, (ii) payments contingent upon the achievement of future Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) targets with a fair value of approximately $7.6 million (“EBITDA Earnout”), (iii) indemnity holdback amount of $10.0 million (“Indemnity Holdback”), and (iv) pre-combination-attributed fair value of substitution RSUs of approximately $0.3 million.

The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations , which requires that the assets acquired and liabilities assumed in a business combination be recognized at their estimated acquisition-date fair values (see Note 4).

Interest and Other Income, Net

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2025 2024 ($) (%)

Flight services

$ 136 $ 1,032 $ (896) (87) %

Revenue $ 53,425 $ 136 $ 53,289 n.m *

Operating expenses:

Flight services

67 200 (133) (67) %

Cost of Revenue 29,328 67 29,261 n.m *

Research and development 581,101 477,156 103,945 22 %

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Interest and other income, net 43,164 42,822 342 1 %

Loss from change in fair value of warrants and earnout shares

Loss on common stock issuance in private placement (40,258) — (40,258) 100 %

Loss from change in fair value of warrants, earnout shares and contingent consideration

(211,850) (53,973) (157,877) 293 %

Total other loss, net

(11,151) (40,817) 29,666 (73) %

(208,944) (11,151) (197,793) n.m *

Loss before income taxes (928,535) (607,905) (320,630) 53 %

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Net loss $ (929,842) $ (608,034) $ (321,808) 53 %

Flight Services

Flight services revenue primarily includes consideration for our performance of customer-directed flights and on-base operations for various DOD agencies.

We recognize revenue as we fulfill our performance obligations in an amount that reflects the consideration we expect to receive.

Operating expenses

Flight services

Flight services expenses do not include the costs of manufacturing our aircraft and aircraft parts as such costs are expensed when incurred as Research and Development Expenses.

n.m* marks changes that are not meaningful.

Revenue increased by $53.3 million to $53.4 million during the year ended December 31, 2025 from $0.1 million during the year ended December 31, 2024.

The increase was primarily due to the passenger service revenue from our Blade offering after Blade acquisition and higher revenue from on-base operations for a DOD agency, demonstration flights, and engineering services provided to third parties.

Cost of Revenue

Cost of Revenue increased by $29.3 million to $29.3 million during the year ended December 31, 2025 from $0.1 million during the year ended December 31, 2024.

The increase was primarily due to the passenger service costs from our Blade offering after Blade acquisition and cost of performing demonstration flights and providing engineering services.

Research and Development Expenses

Research and development expenses increased by $103.9 million, or 22%, to $581.1 million during the year ended December 31, 2025 from $477.2 million during the year ended December 31, 2024.

The increase was primarily attributable to increases in personnel to support aircraft engineering, software development, prototype manufacturing, and certification,

as well as increased quantity of materials used in prototype development and testing, partially offset by increase in expense reduction due to higher grants earned as part of our government contracts.

The increase was primarily attributable to increases in personnel to support aircraft engineering, software development, prototype manufacturing, and certification and a decrease in expense reduction due to lower grants earned as part of our government contracts.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $42.9 million, or 36%, to $162.6 million during the year ended December 31, 2025 from $119.7 million during the year ended December 31, 2024.

The increase was primarily attributable to increased headcount to support operations growth, including IT, legal, facilities, HR, and finance, as well as an increase in professional services cost related to legal, accounting and recruiting support.

The increase was primarily attributable to Blade acquisition costs and payroll and other indirect operating expenses after the Blade acquisition and increases in legal and marketing spend.

Total Other Loss, Net

Total other loss, net decreased by $29.7 million, or 73%, to a loss of $11.2 million during the year ended December 31, 2024 from a loss of $40.8 million during the year ended December 31, 2023.

The decrease was primarily driven by a $32.4 million reduction in loss from changes in fair value of warrants and earnout shares, partially offset by $2.7 million decrease in interest and other income due to decreased interest rates on lower invested funds.

Total other loss, net increased by $197.8 million to a loss of $208.9 million during the year ended December 31, 2025 from a loss of $11.2 million during the year ended December 31, 2024.

The increase was primarily driven by a $157.9 million increase in loss from changes in fair value of warrants, earnout shares and contingent consideration, and loss on common stock issuance in private placement of $40.3 million.

Liquidity and Capital Resources

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In June 2023, we raised net proceeds of $99.9 million from our issuance and sale of 15,037,594 shares of our common stock to SKT.

In October 2024, we raised $221.8 million in net proceeds from an underwritten public offering (the “Public Offering”) of 46,000,000 shares of our common stock.

In October 2024, we raised $221.8 million in net proceeds from an underwritten public offering of 46,000,000 shares of our common stock.

In December 2024, we entered into an Equity Distribution Agreement with Morgan Stanley & Co.

LLC and Allen & Company LLC, as sales agents (the “Equity Distribution Agreement”), through which we may offer and sell, from time to time at our sole discretion, up to an aggregate of $300,000,000 of our common stock in an “at-the-market” offering (the “ATM Offering”).

As of December 31, 2024, 16,158,784 shares of our common stock have been sold pursuant to the Equity Distribution Agreement for net proceeds of $128.8 million .

As of December 31, 2024, $167.0 million remain available for sale under the Equity Distribution Agreement.

In addition, on October 1, 2024, we entered a stock purchase agreement with Toyota Motor Corporation pursuant to which Toyota has committed to invest up to $500.0 million, subject to certain closing conditions, as described in Note 9.

Stockholders' Equity (the “Toyota Investment”).

LLC and Allen & Company LLC, as sales agents (“Equity Distribution Agreement”), through which we may offer and sell, from time to time at our sole discretion, up to an aggregate of $300.0 million of our common stock in an “at-the-market” offering (“ATM Offering”).

As of December 31, 2025, 29,950,799 shares of our common stock have been sold pursuant to the Equity

Distribution Agreement for net proceeds of $282.4 million .

As of December 31, 2025, $8.1 million remains available for sale under the Equity Distribution Agreement.

In May 2025, we issued 49,701,790 shares at a price per share of $5.03 for net proceeds of $249.9 million pursuant to a stock purchase agreement with Toyota Motor Corporation (“Toyota”) that we entered in October 2024.

Pursuant to the agreement, Toyota has committed to invest an additional $250.0 million, subject to certain closing conditions (“Toyota Investment”).

In October 2025, we raised $575.9 million in net proceeds from an underwritten public offering of 35,075,000 shares of our common stock.

As of December 31, 2025, we have received $34.6 million from the exercise of our Public Warrants.

As of December 31, 2025, we had cash, cash equivalents and restricted cash of $241.7 million and short-term investment in marketable securities of $1,167.1 million.

Restricted cash, totaling $0.8 million, reflects cash temporarily retained for security deposit on leased facilities.

Restricted cash, totaling $0.9 million, primarily reflects cash temporarily retained for security deposit on leased facilities.

We believe that our cash, cash equivalent and short-term investments will satisfy our working capital and capital requirements for at least the next twelve months.

In January 2026, we have received $70.0 million from the exercise of the first tranche of Delta Warrant (Note 8 ).

In February 2026, we raised net proceeds of approximately $576.0 million from an underwritten public offering of 52,863,437 shares of our common stock (the “February 2026 Equity Offering”), and net proceeds of approximately $670.4 million from an underwritten public offering of $690.0 million principal amount of 0.75% Convertible Senior Notes due 2032 (the “Notes”).

Long-Term Liquidity Requirements

We expect our cash and cash equivalents on hand together with the proceeds of future sales under the ATM Offering, the expected proceeds from the Toyota Investment and cash we expect to generate from future operations will provide sufficient funding to support us beyond the initial launch of our commercial operations.

Until we generate sufficient operating cash flow to fully cover our operating expenses, working capital needs and planned capital expenditures, or if

circumstances evolve differently than anticipated, we expect to utilize a combination of equity and debt financing to fund any future remaining capital needs.

We expect our cash and cash equivalents on hand together with the proceeds of future sales under the ATM Offering, additional proceeds from the Toyota Investment, the proceeds of the February 2026 Equity Offering, the issuance of the Notes, the Overallotment Option, if exercised, and cash we expect to generate from future operations will provide sufficient funding to support us beyond the initial launch of our commercial operations.

Until we generate sufficient operating cash flow to fully cover our operating expenses, working capital needs and planned capital expenditures, or if circumstances evolve differently than anticipated, we expect to utilize a combination of equity and debt financing to fund any future remaining capital needs.

If we raise funds by issuing equity securities, dilution to stockholders may result.

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Our principal uses of cash in recent periods were to fund our research and development activities, personnel cost and support services.

Near-term cash requirements will also include spending on manufacturing facilities, ramping up production and supporting production certification, scaled manufacturing operations for commercialization, infrastructure and vertiport development, pilot training facilities, software development and production of aircraft.

Near-term cash requirements will also include spending on manufacturing facilities, ramping up production and supporting production certification, scaled manufacturing operations for commercialization, infrastructure and vertiports development, pilot training facilities, software development and production of aircraft.

We do not have material cash requirements related to current contractual obligations.

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Financing activities 1,026,643 361,114 665,529 184 %

Net increase (decrease) in cash, cash equivalents, and restricted cash $ (4,390) $ 54,712 $ (59,102) (108) %

Net increase (decrease) in cash, cash equivalents, and restricted cash $ 41,334 $ (4,390) $ 45,724 n.m.

Net Cash Used in Operating Activities

Net cash used in operating activities for the year ended December 31, 2024 was $436.3 million, consisting primarily of a net loss of $608.0 million, adjusted for non-cash items and statement of operations impact from investing and financing activities which includes $104.4 million in stock-based compensation expense, a $54.0 million loss from change in the fair value of warrants and earnout shares, $35.6 million in depreciation and amortization expense, partially offset by $15.8 million net accretion of our investments in marketable securities and $6.4 million net increase in our net working capital.

Net cash used in operating activities for the year ended December 31, 2023 was $313.8 million, consisting primarily of a net loss of $513.1 million, adjusted for non-cash items and statement of operations impact from investing and financing activities which includes $93.6 million in stock-based compensation expense, $86.4 million loss from change in the fair value of warrants and earnout shares, $30.5 million in depreciation and amortization expense and a net decrease in our net working capital of $8.9 million, partially offset by $20.2 million net accretion of our investments in marketable securities.

Net Cash Provided by Investing Activities

Net cash used in operating activities for the year ended December 31, 2025 was $509.9 million, consisting primarily of a net loss of $929.8 million, adjusted for non-cash items and statement of operations impact from investing and financing activities which includes $127.9 million in stock-based compensation expense, a $211.9 million loss from change in the fair value of warrants, earnout shares and contingent consideration, $40.2 million in depreciation and amortization expense, $40.3 million loss on common stock issuance in private placement and $7.6 million net decrease in our net working capital, partially offset by $7.8 million net accretion of our investments in marketable securities.

Net cash used in operating activities for the year ended December 31, 2024 was $436.3 million, consisting primarily of a net loss of $608.0 million, adjusted for non-cash items and statement of operations impact from investing and financing activities which includes $104.4 million in stock-based compensation expense, $54.0 million loss from change in the fair value of warrants and earnout shares, $35.6 million in depreciation and amortization expense, partially offset by $15.8 million net accretion of our investments in marketable securities and $6.4 million net increase in our net working capital.

Net Cash Provided by (Used in) Investing Activities

Net cash used in investing activities for the year ended December 31, 2025 of $475.4 million was primarily due to purchases of marketable securities of $1,170.4 million and purchases of property and equipment of $53.9 million, partially offset by proceeds from the sales and maturities of marketable securities of $745.4 million and $3.5 million net cash from the Blade acquisition.

Net cash provided by investing activities for the year ended December 31, 2024 of $70.8 million was primarily due to proceeds from the sales and maturities of marketable securities of $715.2 million, partially offset by purchases of marketable securities of $603.8 million and purchases of property and equipment of $40.6 million.

Net cash provided by investing activities for the year ended December 31, 2023 of $80.3 million was primarily due to proceeds from the sales and maturities of marketable securities of $920.9 million, partially offset by purchases marketable securities of $810.0 million and purchases of property and equipment of $30.6 million.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the year ended December 31, 2024 of $361.1 million was primarily due to net proceeds of $221.8 million from issuance of common stock in underwritten public offering and net proceeds of $128.8 million from issuance of common stock in at-the-market public offering, proceeds from the issuance of common stock under the employee stock purchase plan of $11.2 million and $1.7 million proceeds from exercise of stock options and issuance of common stock warrants, partially offset by $2.4 million repayments of obligation under finance leases and tenant improvement loan.

Net cash provided by financing activities for the year ended December 31, 2023 of $288.2 million was primarily due to net proceeds of $180.2 million from our registered direct offering to certain institutional investors and net proceeds of $99.9 million from our issuance of common shares to SKT, proceeds from the issuance of common stock under the employee stock purchase plan of $6.9 million and $2.1 million, proceeds from exercise of stock options and issuance of common stock warrants, partially offset by repayments for finance lease obligations and tenant improvement loan totaling $0.8 million.

Net cash provided by financing activities for the year ended December 31, 2025 of $1,026.6 million was primarily due to net proceeds of $575.9 million from issuance of common stock in underwritten public offering, net proceeds of $249.9 million from issuance of common stock in private placement with Toyota, net proceeds of $153.6 million from issuance of common stock in at-the-market public offering, $36.8 million proceeds from exercise of stock options and issuance of common stock warrants and proceeds from the issuance of common stock under the employee stock purchase plan of $12.1 million, partially offset by $1.6 million repayments of obligation under finance leases and tenant improvement loan.

Critical Accounting Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on our Consolidated Financial Statements, which have been prepared in accordance with U.S.

The preparation of these Consolidated Financial Statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures.

The preparation of these Consolidated Financial Statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue,

expenses and related disclosures.

Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

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We recognize stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period and use the straight-line method to recognize stock-based compensation, and account for forfeitures as they occur.

Some of our awards contain service-based vesting condition as well as performance-based vesting condition.

Some of our awards contain service-based vesting conditions as well as performance-based vesting conditions.

We consider the probability of achieving each of the performance goals at the end of each reporting period and recognize expense over the requisite period when achievement of the goal is determined to be probable, and adjust the expense if the probability of achieving the goal later changes.

The Company estimates the probabilities based on available information about the progress made towards performance goals at each reporting period.

Our performance based awards issued under annual Bonus Plans are classified as an equity or, initially, as a liability, depending on the terms of the plan.

Our performance based awards issued under annual Bonus Plans are classified as equity or, initially, as a liability, depending on the terms of the plan.

For liability classified awards, the liability is reclassified to equity when the respective milestones have been met.

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Indicators include operating or cash flow losses, significant decreases in market value, or changes in technology.

If we conclude that events and circumstances indicate the assets may be impaired, to determine if impairment exists for our property and equipment used in operations, we group our property and equipment by type (the lowest level for which there are identifiable cash flows) and then estimate their future cash flows based on projections of capacity, asset age, maintenance requirements, and other relevant conditions.

maintenance requirements, and other relevant conditions.

An impairment occurs when the sum of the estimated undiscounted future cash flows are less than the aggregate carrying value of the assets.

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Accordingly, we have not recorded any impairment charge to our existing property and equipment during the twelve months ended December 31, 2025.

Fair value measurements involving significant estimation uncertainty

We apply fair value measurement guidance in a number of areas of our consolidated financial statements.

Some of our fair value measurements involve a significant level of estimation uncertainty, generally because they require valuation models and inputs that are not directly observable in the market or otherwise require significant judgment.

These estimates are critical because changes in key assumptions can materially affect the recorded amounts of the related assets and liabilities and, in certain cases, our results of operations.

These estimates have had, or are reasonably likely to have, a material impact on our financial condition or results of operations.

Fair value of warrant, earnout, and contingent consideration liabilities

Certain of our financial instruments, including our Earnout Shares Liability, Delta warrant liability, and contingent consideration liabilities such as the EBITDA Earnout, are measured at fair value on a recurring basis and remeasured each reporting period until exercised, settled, or otherwise extinguished.

Changes in the fair value of these liabilities are recognized in other income (loss), net, and can cause variability in our results of operations.

Valuation of these liabilities requires significant judgment because certain inputs are not directly observable in the market (“Level 3”).

We estimate fair value using valuation techniques that may include quoted market prices for similar instruments and, for Level 3 instruments, option-pricing and Monte Carlo simulation models.

Key assumptions can include our common stock price (and the sensitivity of the instruments’ value to changes in our stock price), expected volatility, expected term, and for instruments with milestone or other contingent settlement features, the probability and timing of achieving such milestones.

For contingent consideration arrangements such as the EBITDA Earnout, significant unobservable inputs may also include projected adjusted EBITDA, achievement probabilities, and the discount rate used to present value expected payments.

Changes in these assumptions, particularly expected volatility, our stock price, the probability and timing of milestone achievement, forecasted operating results, and discount rates, can have a significant impact on the fair value of these liabilities and the resulting gains or losses recognized in other income (loss), net.

Changes in our stock price, volatility assumptions, and milestone or earnout expectations from period to period can drive significant remeasurement gains or losses.

Business combinations and valuation of acquired intangible assets (including the Blade acquisition)

Our accounting for business combinations requires us to estimate the fair value of acquired assets and liabilities, including identifiable intangible assets and contingent consideration, and to recognize goodwill for the excess of purchase consideration over the estimated fair value of net identifiable assets acquired.

Determining the fair value of acquired intangible assets requires significant judgment and the use of valuation techniques such as discounted cash flow models and other income and cost approaches.

These valuation techniques rely on assumptions including forecasted revenues and EBITDA, customer demand, expected margins, attrition and royalty rates (as applicable), contributory asset charges, the expected useful lives of the assets, and the selection of an appropriate discount rate.

Changes in these assumptions could materially affect the recorded amounts of acquired intangible assets and goodwill, future amortization expense, and, if indicators of impairment arise, the timing and amount of impairment charges.

Accounting for Leases

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Right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

Due to significant volume of contractual arrangements we enter, we may not be able to identify all embedded leases arrangements, resulting in understatement of our right-of-use assets and liabilities.

Due to significant volume of contractual arrangements we enter, we may not be able to identify all embedded leases arrangements, resulting in understatement of our right-of-use

assets and liabilities.

This assessment also includes evaluating whether certain passenger transportation arrangements and service contracts contain embedded leases (including aircraft leases embedded within agreements with third-party aircraft operators).

As most of our leases do not provide an implicit rate, we use incremental borrowing rate (“IBR”) to calculate present value of future minimum lease payments, which is the estimated rate we would be required to pay for fully collateralized borrowing over the period similar to lease terms.

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If we are not able to correctly estimate IBR, our right-of-use assets and liabilities may be incorrect.

Our incremental borrowing rate is an estimate based on an analysis of available market data for debt instruments of companies with credit and financial profiles similar to ours and may be impacted by changes in market conditions.

Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

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Incorrect assumptions may result in our lease term being incorrect, impacting our right-of-use assets and liabilities.

Certain arrangements may include renewal or termination options, and judgment is required in determining whether such options are reasonably certain to be exercised, which affects the measurement of right-of-use assets and lease liabilities.

Assumptions made by us at the commencement date are re-evaluated upon occurrence of certain events, including a lease modification.

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If we are not able to re-evaluate lease changes and modifications appropriately, our right-of-use assets and liabilities may be incorrect.

In addition, for embedded leases within passenger transportation agreements, we may be required to estimate and allocate the portion of consideration that represents lease components versus non-lease components, which can impact the measurement of the related right-of-use assets and lease liabilities.

Recent Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis