BETA Technologies, Inc.BETA
BETA Technologies, Inc. Leases Disclosure
Leases
The Company determines if an arrangement is or contains a lease at inception. For leases with a term of 12 months or less, the Company does not recognize a right-of-use asset or lease liability. Lease expense for operating leases is recognized on a straight-line basis over the lease term and is included as a component of research and development and general and administrative expenses, based on the nature of the lease.
As the Company’s leases typically do not provide an implicit rate, the incremental borrowing rate is used in determining the present value of lease payments. The Company determines the incremental borrowing rate using our credit rating for secured borrowings and other current economic information available at the commencement date, including relevant industry rates. Operating lease right-of-use assets also include the effect of any lease payments made and lease incentives received. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Reassessment of the lease term occurs when there is a significant event or a significant change in circumstances that is within the control of the Company that directly affects whether the Company is reasonably certain to exercise or not exercise an option to extend or terminate the lease or to purchase the underlying asset.
The Company has elected, as a practical expedient, an accounting policy by class of underlying asset to not separate lease and non-lease components and instead, accounted for them as a single lease component. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments less applicable lease incentives over the lease term. Variable components of the lease payments such as fair market value adjustments, taxes, utilities and maintenance costs are expensed as incurred and not included in determining the present value. The Company’s lease arrangements consist of facility, vehicle, aircraft and equipment, as well as other short-term leases for storage and office space.
Certain information related to the lease costs was as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Operating lease cost (excluding short-term leases) | $ | 4,175 | $ | 3,948 | $ | 4,058 | |||||||||||
| Short-term lease cost | 768 | 977 | 815 | ||||||||||||||
Variable lease cost(1) | 3,283 | 1,008 | 866 | ||||||||||||||
| Total | $ | 8,226 | $ | 5,933 | $ | 5,739 | |||||||||||
(1)Consists primarily of common maintenance fees, insurance, utilities and airport landing fees.
Supplemental information related to operating leases was as follows:
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Weighted-average remaining lease term | 8.17 years | 8.76 years | |||||||||
| Weighted-average discount rate | 11.98 | % | 11.89 | % | |||||||
Minimum lease payments under operating leases as of December 31, 2025 were as follows (in thousands):
| 2026 | $ | 3,398 | |||
| 2027 | 3,790 | ||||
| 2028 | 3,878 | ||||
| 2029 | 3,829 | ||||
| 2030 | 3,478 | ||||
| Thereafter | 36,069 | ||||
| Total lease payments | $ | 54,442 | |||
| Less imputed interest | (36,053) | ||||
| Present value of future lease payments | $ | 18,389 | |||
Cash paid for amounts included in the measurement of operating lease liabilities was $3,671, $3,500 and $3,338 for the years ended December 31, 2025, 2024 and 2023, respectively.
Certain lease agreements contain provisions which could require restoration of real estate to its original condition at the end of the lease term. The Company has recorded asset retirement obligations for which the liability was initially measured at fair value and subsequently adjusted for accretion expense and changes in the amount or timing of the estimated cash flows. The corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. The Company included $1,601 and $444 of asset retirement obligations within other liabilities, which includes revisions of $633 and $201 and additions of $455 and $0 for the years ended December 31, 2025 and 2024, respectively. There were no settlements of asset retirement obligations during the years ended December 31, 2025 and 2024.
Sale-Leaseback Transaction
In July 2025, the Company entered into a sale-leaseback transaction with a related party for two of its buildings with an initial leaseback term of 29 years. Due to the Company obtaining the ability to direct the use of and derive substantially all the benefits from the underlying assets, the transaction was accounted for as a debt financing. As a result, the Company continues to reflect the buildings in property and equipment, net, as if it were the legal owner and continues to recognize depreciation expense over its estimated useful life. In July 2025, the Company recorded an initial financing liability of $32,658, net of transaction costs. The effective per annum interest rate of the financing liability is 10.04%. As of December 31, 2025, the Company recognized $32,626 in . The Company will not recognize rent expense related to the leased assets. Instead, monthly rent payments are recorded as interest expense and a reduction of the outstanding liability. For the year ended December 31, 2025, payments of $1,403 representing interest expense were made under the financing.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.