AIRO — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue increased 179% year-over-year to $17.5 million for the quarter ended September 30, 2026, compared to $6.3 million in Q3 2025.
• Gross profit was $9.9 million, representing a 57% gross margin, an improvement from 44% in the prior-year period.
• Operating loss widened to $13.1 million from $12.0 million in Q3 2025.
• Net loss was $12.0 million, compared to a net loss of $8.0 million in Q3 2025.
• Adjusted EBITDA was $(7.5) million, an improvement from $(8.0) million in Q3 2025.
• Cash and cash equivalents were $37.8 million as of September 30, 2026, down from $74.4 million at December 31, 2025.
• Total debt was $1.2 million as of September 30, 2026, down from $1.7 million at December 31, 2025.
• Accounts receivable decreased by $29.6 million during the quarter.
• Deferred revenue increased to $6.1 million from $4.5 million at the end of 2025.

Guidance and Future Outlook:

• The Company reiterates full-year 2026 revenue growth guidance of 15% to 25% year-over-year, now expecting growth at the lower end of this range.
• Full-year 2026 Adjusted EBITDA guidance remains in the negative mid-to-high teens million-dollar range.
• Drone backlog totaled approximately $200 million as of November 5, 2026, with the majority expected to convert to revenue over the next 12 months.
• Total opportunity pipeline reached approximately $1.5 billion as of November 5, 2026.
• Revenue recognition timing may vary across quarters due to contract timing, production schedules, and delivery milestones typical of government and defense customers.

Business Segments and Product Lines:

• Revenue growth was driven by stronger-than-expected performance in the Drones segment.
• Growth was partially offset by continued softness in the Avionics and Training businesses.
• The Company secured its first U.S. order during the quarter.
• Progress was made advancing the RQ-70 drone toward production.
• The Company is building a more integrated and diversified unmanned systems platform.
• Beginning with Q3 2026, reported Drones segment backlog includes U.S. backlog to reflect the ramp-up of U.S. manufacturing efforts.

Market and Competitive Landscape:

• Demand for reliable, mission-critical drone capabilities continues to accelerate.
• Customer engagement is increasing across U.S. and allied defense markets.
• The Company is well-positioned to capture opportunities in the defense sector.
• The total opportunity pipeline reflects strong demand and expanding opportunities in U.S. and allied defense markets.

Risks and Challenges:

• Profitability was impacted by higher operating expenses associated with investments to scale the business and support long-term growth objectives.
• Third quarter 2025 results were adversely impacted by lower drone shipment volumes, creating a favorable comparison against the prior-year period.
• Actual results may vary materially from guidance due to factors including contract timing, production schedules, and delivery milestones.
• Forward-looking statements are subject to risks, uncertainties, and assumptions described in the Company's Form 10-K.

Management Commentary and Tone:

• CEO Joe Burns stated that demand for drone capabilities is accelerating and AIRO is well-positioned to capture this opportunity.
• Executive Chairman Dr. Chirinjeev Kathuria stated the Company is entering its next phase of growth from a position of strength.
• Management expressed confidence in AIRO's long-term growth strategy, citing operational synergies and strategic growth initiatives.

Other Key Points:

• The Company held $37.8 million in cash and only $1.2 million in debt as of September 30, 2026.
• A conference call and webcast regarding the results and outlook were scheduled for November 12, 2026, at 8:00 am ET.
• The Company is unable to provide a reconciliation of forward-looking Adjusted EBITDA to net loss without unreasonable effort due to high variability in depreciation, amortization, and stock-based compensation.
• Strategic workforce transition costs of $635,000 were incurred in the first nine months of 2026.
• The Company operates with a vertically integrated model combining drone platforms, advanced avionics, integrated training capabilities, and embedded autonomy.