KULR Technology Group — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue from continuing operations reached $7.4 million, a 197% year-over-year increase compared to $2.49 million in Q3 2025.
• Product sales totaled $6.49 million, up 299% year-over-year from $1.62 million, representing 88% of total revenue.
• Gross margin was 4% in Q3 2026, down from 17% in the prior-year period, driven by low margins on initial production builds of KULR ONE Max configurations and gross losses on custom battery assembly programs where costs exceeded contract value.
• Research and Development (R&D) expenses increased to $5.02 million from $2.32 million year-over-year, including $0.69 million in reimbursed grant revenue; non-reimbursable R&D rose due to investments in new battery programs, NDAA-compliant chargers, and battery management systems.
• Selling, General and Administrative (SG&A) expenses decreased 3% to $5.91 million from $6.06 million, primarily due to lower professional fees and the conclusion of strategic investment activities, partially offset by higher personnel costs and new facility expenses.
• Operating loss widened to $11.00 million from $8.74 million year-over-year, primarily driven by increased R&D spending.
• Net income was $4.47 million ($0.10 per share) compared to a net loss of $6.97 million ($0.17 per share) in Q3 2025; this result included a $15.8 million non-recurring gain from the change in fair value of digital assets prior to their sale.
• The company served 22 product customers in Q3 2026, up from 18 in the same period last year.

Guidance and Future Outlook:

• R&D expenses are expected to decrease beginning in Q4 2026 and further in 2027 as production line bring-up and new pack development programs complete.
• SG&A expenses are projected to decline as the company scales product revenue.
• The company aims to grow revenue while reducing costs in 2027.
• A significant ramp-up of NDAA-compliant battery solutions for autonomous systems customers is expected in 2027.
• The battery management system and charger programs are scheduled for completion in early 2027.
• Management targets a cost structure that allows revenue scaling without a corresponding increase in overhead, aiming for a credible path toward profitability.

Business Segments and Product Lines:

• KULR ONE Platform: Growth was driven by the KULR ONE platform, specifically the KULR ONE Max battery energy storage systems deployed in Japan's power-as-a-service market.
• KULR ONE Air and Autonomous Systems: The company built an NDAA-compliant supply chain including cell manufacturer partnerships, proprietary battery management systems, and chargers, with final assembly at the "Forge 2" facility.
• KULR ONE Space: The heritage line serves private space exploration, satellite constellations, and space-based AI data centers, with cold-temperature lithium-ion development funded by a Texas Space Commission award.
• KULR ONE Studio Designer Pro: An AI-driven design platform that reduced design cycles from weeks to as little as four hours; shipments of battery packs designed with this tool began in October 2026.
• KULR Intelligent Operating System (KIOS): An internal enterprise management platform that reduced engineering record search time by up to 95% and consolidated five third-party software platforms.

Market and Competitive Landscape:

• The company is capitalizing on domestic-sourcing requirements of the National Defense Authorization Act (NDAA) for batteries, which restrict cells and components from foreign entities of concern.
• Japan's open power market is identified as a fast-growing opportunity for distributed battery storage delivered as power-as-a-service.
• KULR leverages over a decade of experience in battery safety engineering and monitoring to manage fleets of lithium-ion storage at customer sites.

Risks and Challenges:

• Gross margins remain below historical levels due to initial production inefficiencies and custom program losses.
• The company faces risks associated with the execution of its 2027 revenue growth and cost reduction goals.
• Forward-looking statements regarding the October 2026 Delaware Court of Chancery petition and the November 2026 workforce reduction are subject to uncertainty.
• Actual savings, costs, and timing of the restructuring may differ from current estimates.

Management Commentary and Tone:

• CEO Michael Mo stated the company delivered on three key measures for 2026: product revenue growth, gross margin improvement, and cost discipline.
• Management emphasized a strategic shift to "build more batteries, sell more batteries" and a concentration on fewer programs and strategic customers.
• CFO Mike Kimel noted that the operating expense base has been reset and that R&D and SG&A will decline as production volume increases and repeat orders replace initial builds.
• The tone reflects confidence in the execution of the strategy, highlighting the completion of the Bitcoin exit and the focus on the core battery business.

Other Key Points:

• The company completed its exit from Bitcoin, selling 1,099.09 BTC for net proceeds of approximately $80.1 million.
• Proceeds from the Bitcoin sale were used to repay in full the $20.0 million loan outstanding under the Coinbase credit facility.
• As of September 30, 2026, the company held $54.5 million in cash, had no outstanding debt, and held no digital assets.
• The ATM program is paused through December 31, 2026.
• A reduction in force implemented in November 2026 is expected to generate approximately $4 million in annualized cost savings.
• The company expects to incur severance and related costs of $0.35 million to $0.65 million in connection with the workforce reduction, substantially all recognized in Q4 2026.
• The company no longer holds, intends to acquire, or mine digital assets.