New Horizon Aircraft (NASDAQ:HOVR) used its fiscal second-quarter 2026 earnings call—its first as a public company—to outline its strategy for developing the hybrid-electric Cavorite X7 eVTOL aircraft, provide updates on technical milestones and partnerships, and discuss its liquidity position and spending trajectory as it moves toward a full-scale prototype.
Strategic focus: hybrid-electric eVTOL and OEM-only model
CEO Brandon Robinson said the company is developing the Cavorite X7 as a hybrid-electric aircraft, emphasizing that the onboard fuel source has “more than 40 times the energy density” of aerospace batteries. Robinson said the hybrid approach is intended to enable operations without relying on ground charging infrastructure and to support “all-weather IFR operations.”
Both Robinson and CFO Brian Merker reiterated that New Horizon does not plan to operate an air taxi service. Merker said the company “consciously decided to be a pure-play OEM,” aiming to provide an aircraft to existing operators rather than build out operating infrastructure.
Technical progress and roadmap toward a full-scale prototype
Robinson said the company completed a “successful full-wing transition flight” of a large-scale prototype in May, describing it as a milestone achieved by only a small number of eVTOL developers globally. He said the data from that work is being applied to the full-scale X7 program and that the milestone “significantly de-risked” the technical roadmap.
Management said the engineering team has been expanded over the last two quarters with additions across aerodynamics, aerostructures, propulsion, and systems integration. The near-term goal, Robinson said, is to complete the design and manufacture of the full-scale X7 prototype by the end of 2026, with initial testing targeted for early 2027.
In response to an analyst question about 2026 technical hurdles, Robinson said the company is building the full-scale aircraft now and expects major aerostructure components—fuselage, wings, empennage, and tail—to come in “in the summer, going into the fall,” with assembly following. He also said subsystem testing is underway in parallel, noting that vertical propulsion is already being tested and that the company’s PT6 turbine engine work would begin “very shortly.” Robinson also highlighted flight controls as a major effort because the X7 is planned to be a fly-by-wire aircraft.
Partnerships and non-dilutive funding
Robinson pointed to multiple partnerships as validation of the company’s approach. He said a collaboration with Pratt & Whitney provides access to propulsion expertise as the company advances the X7 propulsion architecture. He also said the company partnered with McLaren Applied to strengthen capabilities in power electronics, systems integration, testing, and analysis.
Robinson highlighted an INSAT program grant awarded to the company and two collaborative partners for an estimated $10.5 million “all-weather eVTOL project.” He described the grant as “particularly meaningful” because it supports development work without shareholder dilution and said the company expects to continue pursuing non-dilutive funding.
In Q&A, Robinson said the company’s all-weather focus has been part of the design from the beginning and resonates with operators seeking an aircraft that is not limited to “fair-weather” conditions. He described the planned all-weather capability—including IFR operations—as important to the aircraft’s operational mission set.
Liquidity, capital raising, and spending outlook
Robinson and Merker both cited a cash balance of more than $24 million, which management said represents the company’s strongest liquidity position to date. Robinson said the cash position is expected to be sufficient to fund completion of the full-scale aircraft within the next 12 months and begin initial ground testing in early 2027.
Merker said liquidity was improved during the quarter through a combination of an at-the-market program, non-dilutive funding, and warrant exercises. He said the company raised more than $11 million during the quarter at an average price of $281 per share.
On expenses, Merker said total operating expenses were $5.1 million for the quarter, up from $3.3 million in the prior-year period. He said administrative costs were slightly reduced year over year, while R&D and aircraft development spending increased from $0.4 million to $2.6 million. On a year-to-date basis, Merker said operating costs increased from $6 million to $11 million, with development costs rising from $0.7 million to $5.3 million.
Merker also reported cash used in operations of $5 million for the six-month period ended Nov. 30, slightly higher than the prior-year period. He noted working capital management and referenced non-cash costs that can be influenced by stock price appreciation.
Looking ahead, Merker said operating costs are expected to “gradually scale up” as the company adds people, tooling, components, and expands certification work. He said that by “this time next year,” total operating costs could be “in the range of 2X.”
Market positioning, certification path, and economics
Robinson positioned the X7 as a hybrid-electric aircraft designed for a range of missions beyond air taxi operations, including cargo, medical evacuation, and defense and government use cases. He cited expected performance targets for the aircraft of “almost 250 mph” cruising speed, an estimated 500-mile range with fuel reserves, and a 1,500-pound useful load.
On certification, Robinson said the company is already doing certification work, including functional hazard analysis and work on a certification basis, with discussions with Transport Canada underway. He also referenced a partnership with Certification Center Canada and said the company has board-level expertise in certification through Dr. John Maris.
In a later Q&A exchange, Robinson said pursuing certification with Transport Canada could be an advantage because the organization is smaller and “not inundated” with the volume of applicants seen elsewhere, describing the environment as “a much quieter place.”
Merker addressed unit economics in response to a question about cost per seat mile. He said peers often reference $3 to $5 per seat mile, while the company is projecting “around $1,” attributing the estimate to both aircraft performance and operating cost factors such as maintenance and fuel.
Management also discussed future partnerships, saying it is engaged in strategic discussions and would prioritize aerospace industry partners, including globally recognized organizations in manufacturing and defense, though it noted it had nothing to announce at the time of the call.
About New Horizon Aircraft (NASDAQ:HOVR)
New Horizon Aircraft Ltd., an aerospace original equipment manufacturer company, focuses on designing and developing hybrid electric vertical takeoff and landing (eVTOL) aircraft for the regional air mobility market in the Uinted States. The company is developing Cavorite X7, a hybrid electric 7-seat aircraft that can take off and land vertically like and helicopter. New Horizon Aircraft Ltd. was founded in 2013 and is headquartered in Lindsay, Canada.
