Merlin, Inc. Reports Second Quarter 2026 Results
Rhea-AI Summary
Merlin (Nasdaq: MRLN) reported second quarter 2026 revenue of $2.2 million, up from $1.0 million in the first quarter of 2026. GAAP net loss was $58.4 million, while Adjusted EBITDA loss was $27.8 million. The company ended June 30, 2026 with $183.9 million in cash, cash equivalents, and short-term investments and reported no debt, up from $123.1 million at March 31, 2026.
Operationally, Merlin completed Critical Design Review for the USSOCOM C-130J autonomy program, executed what it describes as the first fully autonomous landing at EAA AirVenture Oshkosh using a Cessna 208B, signed a non-binding MoU with Israel Aerospace Industries for Part 25 cargo autonomy, and reached SOI 3 with New Zealand’s CAANZ while resolving an AI/ML certification issue paper for its Merlin Pilot system.
Positive
- Revenue growth to $2.2 million in Q2 2026 from $1.0 million in Q1 2026
- Cash and investments of $183.9 million at June 30, 2026, with no debt
- Completed Critical Design Review for USSOCOM C-130J autonomy program
- Executed fully autonomous landing at Oshkosh using a Cessna 208B Grand Caravan
- Signed non-binding MoU with Israel Aerospace Industries for Part 25 cargo aircraft autonomy
- Achieved SOI 3 with CAANZ and resolved AI/ML certification issue paper for Merlin Pilot
Negative
- GAAP net loss of $58.4 million for Q2 2026
- Adjusted EBITDA loss of $27.8 million in Q2 2026, larger than Q1 2026 loss of $23.3 million
- Gross loss of $0.1 million in Q2 2026 versus gross profit of $41 thousand in Q2 2025
- Total operating expenses of $33.4 million in Q2 2026 versus $11.0 million in Q2 2025
- Large warrant liabilities of $130.1 million at June 30, 2026
- Net loss attributable to common stockholders of $127.5 million in Q2 2026, including preferred stock dividends and deemed dividend
Market reaction after 2Q26 earnings report: MRLN -7.92%
Following this news, MRLN has declined 7.92%, reflecting a notable negative market reaction. Our momentum scanner has triggered 32 alerts so far, indicating elevated trading interest and price volatility. The stock is currently trading at $4.07.
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Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 14 | earnings report | Negative | -9.4% | Quarterly results reported revenue alongside a substantial GAAP net loss and ongoing operating expenses. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
The tag-specific earnings history showed a negative 24-hour reaction of -9.37% for the prior comparable report.
Key Terms
critical design review technical
memorandum of understanding regulatory
bilateral aviation safety agreement regulatory
adjusted ebitda financial
gaap financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Ended Second Quarter 2026 With
BOSTON, Aug. 13, 2026 (GLOBE NEWSWIRE) -- Merlin, Inc. (Nasdaq: MRLN), an aerospace and defense technology company building the operating system of record for autonomous flight, today announced operating and financial results for its second quarter ended June 30, 2026.
Business Highlights
- USSOCOM C-130J contract progress. On June 4, 2026, Merlin announced the completion of the Critical Design Review (CDR) for the C-130J autonomy program. The next phase is to integrate the system onto an aircraft and then begin ground testing, moving Merlin closer to deployment across USSOCOM’s C-130J fleet.
- Autonomous landing milestone at Oshkosh. On July 17, 2026, Merlin executed the first fully autonomous landing at the EAA AirVenture Oshkosh airport using a conventional fixed wing aircraft (Cessna 208B Grand Caravan).
- Strategic industry partnership expansion. Merlin and Israel Aerospace Industries (IAI) signed a non-binding Memorandum of Understanding to advance AI-powered autonomy for Part 25 commercial cargo aircraft. The collaboration establishes a phased path toward platform integration, civil certification, and commercialization, expanding Merlin’s partner ecosystem and positioning its technology to address the approximately 2,400-aircraft global civil cargo market (excluding China and Russia) identified in Airbus's 2025 Cargo Global Market Forecast.
- Civil certification progress. Merlin has achieved the Stage of Involvement 3 (SOI 3) milestone with the New Zealand Civil Aviation Authority (CAANZ), in coordination with the FAA under a Bilateral Aviation Safety Agreement. Separately, Merlin successfully concluded an important certification issue paper with the CAANZ addressing the use of AI/ML-based natural language processing within Merlin Pilot, which enables voice-based interaction with air traffic control. This technical progress advances Merlin’s civil certification strategy and long-term objective of addressing a global commercial aviation market of more than 22,000 aircraft as reported in the August 2025 IATA Global Commercial Aircraft Fleet Report.
“Each of these milestones tackles an independent challenge across commercial, technology, and certification, and that diversity is what makes them so important. We believe these milestones represent meaningful evidence of progress toward our mission to build a certifiable autonomous core that is capable of safely and reliably flying any aircraft for any use case. In other words, we are building what we believe will be the operating system of record for the next century of aviation” said Matt George, CEO of Merlin.
Second Quarter 2026 Financial Results
- Second quarter 2026 total revenue of
$2.2 million , compared to$1.0 million in the first quarter of 2026 - Second quarter 2026 GAAP net loss of
$(58.4) million , compared to$(90.4) million in the first quarter of 2026 - Second quarter 2026 Adjusted EBITDA* loss of
$(27.8) million , compared to an Adjusted EBITDA loss of$(23.3) million in the first quarter of 2026 - Cash, cash equivalents, and short-term investments of
$183.9 million at June 30, 2026, compared to$123.1 million at March 31, 2026
* For all Non-GAAP financial measures, see the reconciliation table at the end of this earnings release for further discussion
Conference Call Details
Merlin will host a live webcast on August 13, 2026 beginning at 4:30 pm ET to discuss its second quarter 2026 financial results. A registration link as well as the live webcast will be accessible on the Company’s investor relations website at investors.merlinlabs.com. A replay will be available for a limited period following the call.
About Merlin
Merlin is an aerospace and defense technology company building the operating system of record for autonomous flight. Through a first-principles approach, Merlin is redefining what’s possible across aviation, aerospace, and defense with the goal of delivering full-stack autonomy for any aircraft, military or civilian, from takeoff to touchdown. The Merlin Pilot system powers a growing range of aircraft and mission profiles, proven through hundreds of autonomous flights from test facilities across the globe. With
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding Merlin’s expected financial performance, expected reductions in engineering costs and regulatory timelines for future programs, expected improvements in platform performance and adaptability from operational data, expected compounding advantages across engineering, regulatory, and data dimensions, Merlin’s competitive position relative to other developers of autonomous flight technology, program milestones and execution timelines, including automated flight targets, the commercial launch and scaling of Condor, including anticipated revenue from platform adaptation, integration, and recurring software licensing arrangements, civil certification progression, including for novel AI/ML-based functionality within Merlin Pilot, commercial pipeline conversion, anticipated market demand for autonomous aviation and Merlin’s estimates of the total addressable market for autonomous flight, platform portability and expansion to additional aircraft types, reduced-crew and single pilot operations, the development and performance of commercial partnerships, the deployment of capital resources, including recently completed equity financing, the sufficiency of capital resources to fund operations and milestones, anticipated operating investment and R&D spending levels, and the anticipated contributions of recently joined executive personnel. Forward-looking statements can be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “project,” “target,” “will,” and similar terms. These statements reflect management’s current expectations based on information available at the date of this release and involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied. Important factors that could cause actual results to differ materially include, but are not limited to: Merlin’s ability to execute on its defense program obligations, including under the USSOCOM C-130J prime contract; the outcome and timing of civil certification proceedings with the FAA and New Zealand Civil Aviation Authority; including uncertainty regarding regulatory acceptance of novel AI/ML-based functionality within Merlin Pilot; the commercial launch, customer adoption, and revenue generation from Condor; the performance, reliability, and scalability of Merlin Pilot across current and future aircraft platforms; Merlin’s dependence on U.S. government contracts and the risk of changes in government budget priorities, procurement decisions, or contract modifications or terminations for convenience; Merlin’s ability to develop, maintain, and scale commercial partnerships; including whether non-binding memoranda of understanding, such as the MOU with Israel Aerospace Industries, result in definitive agreements or generate revenue; Merlin’s ability to convert its identified pipeline into contracted and awarded revenue; competition from established aerospace and defense companies and other autonomous systems developers; Merlin’s ability to attract and retain key technical, operational, and commercial personnel; the accuracy of Merlin’s estimates of the size of its addressable markets; Merlin’s history of net losses and its ability to achieve and sustain profitability; and the other risks and uncertainties described under “Risk Factors” in our final prospectus, dated May 13, 2026, filed with the SEC on May 13, 2026, and in our Quarterly Report on Form 10-Q filed with the SEC on May 15, 2026, and in other documents we will file with the SEC. Merlin does not undertake any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
Contacts
Investor Relations: investor.relations@merlinlabs.com
Media: media@merlinlabs.com
| MERLIN, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (UNAUDITED) (in thousands, except share amounts) | |||||||
| As of: | |||||||
| June 30, | December 31, | ||||||
| 2026 | 2025 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 183,550 | $ | 59,343 | |||
| Short-term investments | 321 | 330 | |||||
| Accounts receivable, net | 1,755 | 368 | |||||
| Prepaid expenses and other current assets | 5,391 | 3,328 | |||||
| Capitalized transaction costs | — | 7,562 | |||||
| Total current assets | 191,017 | 70,931 | |||||
| Property and equipment, net | 11,226 | 7,108 | |||||
| Operating lease right-of-use assets, net | 2,058 | 979 | |||||
| Restricted cash | 2,570 | — | |||||
| Deposits | 107 | 1,564 | |||||
| Total assets | $ | 206,978 | $ | 80,582 | |||
| LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS' DEFICIT | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 5,882 | $ | 3,154 | |||
| Accrued expenses | 6,004 | 7,937 | |||||
| Deferred revenue | 42 | — | |||||
| Contract loss provision | 155 | 4,173 | |||||
| Operating lease liabilities, current | 940 | 657 | |||||
| Long-term debt, current portion, net ( | — | 19,271 | |||||
| Convertible promissory notes | — | 29,107 | |||||
| Total current liabilities | 13,023 | 64,299 | |||||
| Operating lease liabilities, non-current | 1,250 | 331 | |||||
| Warrant liabilities | 130,137 | 76,766 | |||||
| Long-term debt, non-current portion, net ( | — | 12,784 | |||||
| Total liabilities | 144,410 | 154,180 | |||||
| Commitments and contingencies | |||||||
| Series A Preferred Stock: | 162,497 | — | |||||
| Redeemable convertible preferred stock | — | — | |||||
| Stockholders' deficit: | |||||||
| Common stock: | 10 | 7 | |||||
| Additional paid-in capital | 599,960 | 477,448 | |||||
| Accumulated deficit | (699,899 | ) | (551,053 | ) | |||
| Total stockholders' deficit | (99,929 | ) | (73,598 | ) | |||
| Total liabilities, mezzanine equity, and stockholders' deficit | $ | 206,978 | $ | 80,582 | |||
| MERLIN, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenue | $ | 2,194 | $ | 3,107 | $ | 3,195 | $ | 3,975 | |||||||
| Cost of revenue | 2,090 | 3,066 | 3,729 | 3,780 | |||||||||||
| Contract loss adjustments | 223 | — | (2,229 | ) | — | ||||||||||
| Gross profit (loss) | (119 | ) | 41 | 1,695 | 195 | ||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 16,387 | 6,856 | 30,477 | 13,534 | |||||||||||
| General and administrative | 15,576 | 3,804 | 29,668 | 8,326 | |||||||||||
| Selling and marketing | 1,455 | 389 | 2,098 | 748 | |||||||||||
| Total operating expenses | 33,418 | 11,049 | 62,243 | 22,608 | |||||||||||
| Loss from operations | (33,537 | ) | (11,008 | ) | (60,548 | ) | (22,413 | ) | |||||||
| Other (expense) income: | |||||||||||||||
| Interest income | 1,447 | 131 | 1,964 | 432 | |||||||||||
| Interest expense | — | (1,342 | ) | (9 | ) | (2,957 | ) | ||||||||
| Other expense | (68 | ) | (151 | ) | (196 | ) | (211 | ) | |||||||
| Change in fair value of warrant liabilities | (26,144 | ) | (3,925 | ) | 410 | (3,879 | ) | ||||||||
| Change in fair value of convertible promissory notes | — | — | (87,824 | ) | — | ||||||||||
| Change in fair value of long-term debt | — | — | (2,470 | ) | — | ||||||||||
| Total other expense | (24,765 | ) | (5,287 | ) | (88,125 | ) | (6,615 | ) | |||||||
| Loss before provision for income taxes | (58,302 | ) | (16,295 | ) | (148,673 | ) | (29,028 | ) | |||||||
| Provision for income taxes | 125 | 1 | 173 | 1 | |||||||||||
| Net loss | $ | (58,427 | ) | $ | (16,296 | ) | $ | (148,846 | ) | $ | (29,029 | ) | |||
| Series A Preferred Stock dividends and accretion | (8,224 | ) | — | (9,641 | ) | — | |||||||||
| Series A Preferred Stock deemed dividend on down round | (60,848 | ) | — | (60,848 | ) | — | |||||||||
| Net loss attributable to common stockholders | $ | (127,499 | ) | $ | (16,296 | ) | $ | (219,335 | ) | $ | (29,029 | ) | |||
| Net loss per share: | |||||||||||||||
| Basic and diluted | $ | (1.40 | ) | $ | (0.23 | ) | $ | (2.68 | ) | $ | (0.41 | ) | |||
| Weighted-average shares outstanding: | |||||||||||||||
| Basic and diluted | 91,309,267 | 70,965,177 | 81,915,507 | 70,956,489 | |||||||||||
Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S. GAAP, we believe that EBITDA and Adjusted EBITDA, non-GAAP financial measures, provide investors with additional useful information in evaluating our performance. We define EBITDA as net loss before interest expense or income, income tax expense or benefit, and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for stock-based compensation, equity-based compensation to non-employees, changes in fair value of warrant liabilities, changes in fair value of financial instruments accounted for at fair value, transaction and merger-related costs, and other non-cash items. Changes in fair value of warrant liabilities reflect periodic mark-to-market adjustments that will recur each reporting period as long as warrants remain outstanding and are excluded because they are non-cash and not reflective of our core operating performance. Changes in fair value of convertible promissory notes and long-term debt relate to instruments settled in connection with the Merger and are excluded because they are not expected to recur in future periods. Transaction and merger-related costs are excluded because they relate to specific non-recurring corporate events and are not indicative of our ongoing operating performance.
We believe that each of these non-GAAP financial measures provide additional metrics to evaluate our operations and, when considered with both our U.S. GAAP results and the reconciliation to the closest comparable U.S. GAAP measures, provide a more complete understanding of our business than could be obtained absent this disclosure. We use the non-GAAP financial measures, together with U.S. GAAP financial measures, such as net revenue, gross profit margins and cash flow from operations, to assess our historical and prospective operating performance, to provide meaningful comparisons of operating performance across periods, to enhance our understanding of our operating performance, and to compare our performance to that of our peers and competitors.
The non-GAAP financial measures are presented here because we believe they are useful to investors in assessing the operating performance of our business without the effect of non-cash items, and other items as detailed below. The non-GAAP financial measures should not be considered in isolation or as alternatives to net income (loss), income (loss) from operations or any other measure of financial performance calculated and prescribed in accordance with U.S. GAAP. Our non-GAAP financial measures may not be comparable to similarly titled measures in other organizations because other organizations may not calculate non-GAAP financial measures in the same manner as we do.
The following tables provides a reconciliation of EBITDA and Adjusted EBITDA to net loss, the most directly comparable financial measure presented in accordance with U.S. GAAP.
| Three Months Ended March 31, | ||||||||
| ($ in thousands) | 2026 | 2025 | ||||||
| Net loss | $ | (90,419 | ) | $ | (12,733 | ) | ||
| Depreciation | 417 | 381 | ||||||
| Amortization of right-of-use assets | 209 | 183 | ||||||
| Interest income | (517 | ) | (301 | ) | ||||
| Interest expense | 9 | 1,614 | ||||||
| Provision for income taxes | 48 | 1 | ||||||
| EBITDA | (90,253 | ) | (10,855 | ) | ||||
| Stock-based compensation | 1,295 | 513 | ||||||
| Equity-based payments to non-employees | 643 | — | ||||||
| Change in fair value of warrant liabilities | (26,555 | ) | (46 | ) | ||||
| Change in fair value of convertible promissory notes | 87,824 | — | ||||||
| Change in fair value of long-term debt | 2,470 | — | ||||||
| Transaction costs | 1,236 | — | ||||||
| Adjusted EBITDA | $ | (23,340 | ) | $ | (10,388 | ) | ||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||
| Net loss | $ | (58,427 | ) | $ | (16,296 | ) | $ | (148,846 | ) | $ | (29,029 | ) | |||
| Depreciation | 712 | 389 | 1,129 | 770 | |||||||||||
| Amortization of right-of-use assets | 342 | 183 | 551 | 366 | |||||||||||
| Interest income | (1,447 | ) | (131 | ) | (1,964 | ) | (432 | ) | |||||||
| Interest expense | — | 1,342 | 9 | 2,957 | |||||||||||
| Provision for income taxes | 125 | 1 | 173 | 1 | |||||||||||
| EBITDA | (58,695 | ) | (14,512 | ) | (148,948 | ) | (25,367 | ) | |||||||
| Stock-based compensation | 4,608 | 433 | 5,903 | 946 | |||||||||||
| Equity-based payments to non-employees | 109 | — | 752 | — | |||||||||||
| Change in fair value of warrant liabilities | 26,144 | 3,925 | (410 | ) | 3,879 | ||||||||||
| Change in fair value of convertible promissory notes | — | — | 87,824 | — | |||||||||||
| Change in fair value of long-term debt | — | — | 2,470 | — | |||||||||||
| Transaction costs | — | — | 1,236 | — | |||||||||||
| Adjusted EBITDA | $ | (27,834 | ) | $ | (10,154 | ) | $ | (51,173 | ) | $ | (20,542 | ) | |||
