Exhibit 99.1
AIRO
Reports Third Quarter 2026 Results
MCLEAN,
Va. - AIRO Group Holdings, Inc. (NASDAQ: AIRO) (“AIRO” or the “Company”), a global leader in advanced aerospace
and defense technologies, today announced financial results for the third quarter ended September 30, 2026.
(All
results compared to prior-year comparative period, unless otherwise noted)
Third
Quarter 2026 Financial Highlights
| ● | Revenue
of $17.5 million increased 179% compared to revenue of $6.3 million |
| | | |
| ● | Gross
margin of 57% improved versus 44% |
| | | |
| ● | Operating
loss of ($13.1) million versus operating loss of ($12.0) million |
| | | |
| ● | Net
loss of ($12.0) million versus net loss of ($8.0) million |
| | | |
| ● | Adjusted
EBITDA of $(7.5) million compared to $(8.0) million(1) |
| | | |
| ● | Drone
backlog of $200 million, which includes U.S. opportunities, as of November 5, 2026 |
| | | |
| ● | Total
opportunity pipeline of $1.5 billion as of November 5, 2026 |
(1)
Adjusted EBITDA is a non-GAAP financial measure. See “Non-GAAP Financial Measures and Backlog” below.
“Demand
for reliable, mission-critical drone capabilities continues to accelerate, and AIRO is well positioned to capture this opportunity,”
said Joe Burns, Chief Executive Officer of AIRO. “During the quarter, we secured our first U.S. order, advanced the RQ-70 toward
production, and continued building a more integrated and diversified unmanned systems platform. These accomplishments, together with
the operational synergies we are realizing across the business, reinforce our confidence in AIRO’s long-term growth strategy.”
“With
a growing Drone backlog, increasing customer engagement across U.S. and allied defense markets, and continued progress across our strategic
growth initiatives, we believe AIRO is entering its next phase of growth from a position of strength,” stated Dr. Chirinjeev Kathuria,
Executive Chairman.
Key
Financial Summary
| | |
Q3 2026 | |
Q3 2025 | |
Y/Y |
| (in millions) | |
| | | |
| | | |
| | |
| Revenue | |
$ | 17.5 | | |
$ | 6.3 | | |
| 179 | % |
| Gross profit | |
| 9.9 | | |
| 2.8 | | |
| 255 | % |
| Loss from operations | |
| (13.1 | ) | |
| (12.0 | ) | |
| NM | |
| Net loss | |
| (12.0 | ) | |
| (8.0 | ) | |
| NM | |
| Adjusted EBITDA | |
| (7.5 | ) | |
| (8.0 | ) | |
| NM | |
| | |
| | | |
| | | |
| | |
| Margin Analysis | |
| | | |
| | | |
| | |
| As % of revenue | |
| | | |
| | | |
| | |
| Gross profit margin | |
| 57 | % | |
| 44 | % | |
| | |
| Loss from operations | |
| (75 | %) | |
| (191 | %) | |
| | |
| Net loss | |
| (69 | %) | |
| (127 | %) | |
| | |
| Adjusted EBITDA | |
| (43 | %) | |
| (128 | %) | |
| | |
*Note:
NM = not meaningful
| ● | Revenue
increased 179% to $17.5 million, driven by stronger-than-expected growth in the Drones segment,
partially offset by continued softness in the Avionics and Training businesses. Third quarter
2025 results were adversely impacted by lower drone shipment volumes, creating a favorable
comparison against the prior-year period. |
| | | |
| ● | Gross
profit was $9.9 million, or 57% of revenue. Gross margin expanded significantly year over
year, reflecting a favorable mix shift toward higher-volume drone sales and improved operating
efficiencies. |
| | | |
| ● | Loss
from operations and net loss were $(13.1) million and $(12.0) million, respectively. Profitability
was impacted by higher operating expenses associated with investments to scale the business
and support the Company’s long-term growth objectives. |
| | | |
| ● | Adjusted
EBITDA was $(7.5) million, compared to $(8.0) million in the third quarter of 2025. Adjusted
EBITDA improved year over year, driven by improved revenue performance partially offset
by higher operating expenses related to investment to scale the business. |
Balance
Sheet, Cash Flow, and Capital Allocation
As
of September 30, 2026, the Company held $37.8 million of cash and only $1.2 million of debt, positioning it to fund ongoing strategic
and growth initiatives. Accounts receivable decreased by $29.6 million during the quarter, primarily driven by the receipt of customer
payments associated with Drone deliveries completed in prior periods.
Outlook
| ● | The
Company reiterates its expectation for full-year 2026 revenue growth of 15% to 25% year over
year and now expects growth to be at the lower end of the stated range. |
| | | |
| ● | The
Company also reiterates its full-year 2026 Adjusted EBITDA guidance in the negative mid-
to high-teens million-dollar range. |
| | | |
| ● | Drone
backlog, including U.S. opportunities, totaled approximately $200 million as of November
5, 2026. The Company expects the majority of this backlog to convert to revenue over the
next 12 months, providing strong visibility into future growth. As is typical for businesses
serving government and defense customers, revenue recognition may vary meaningfully across
quarters depending on contract timing, production schedules and delivery milestones. |
| | | |
| ● | As
of November 5, 2026, the Company’s total opportunity pipeline totaled approximately
$1.5 billion, reflecting strong customer demand and expanding opportunities across U.S. and
allied defense markets. |
Our
financial outlook is based on assumptions that we believe to be reasonable as of the date of this release, but may be materially affected
by many factors, as discussed below under “Forward Looking Statements.” Actual results may vary from the guidance and the
variations may be material. We undertake no intent or obligation to publicly update or revise this outlook, whether as a result of new
information, future events or otherwise, except as required by law.
AIRO
is unable to include a reconciliation of forward-looking Adjusted EBITDA to net loss, the most directly comparable GAAP measure, without
unreasonable effort due to the high variability with respect to the impact of items such as depreciation and amortization, stock-based
compensation expense and other items that are excluded from Adjusted EBITDA.
Conference
Call and Webcast
AIRO
will host a conference call to discuss its third quarter 2026 results and business outlook on November 12, 2026, at 8:00 am ET. Participants
can join the call by dialing 1-833-461-5787 (US) or 1-585-542-9983 (international) and entering meeting ID 940 929 505. To avoid delays,
it is recommended that participants dial into the conference call 15 minutes ahead of the scheduled start time.
To
listen to the live audio webcast and Q&A, visit the Event & Presentations section of AIRO’s investor relations website
at AIRO Group Holdings, Inc. - Events & Presentations.
A
replay of the webcast will be available on the website within 24 hours after the call. The earnings press release and related materials
will also be available on AIRO’s investor relations website at https://investor.theairogroup.com/.
About
AIRO
AIRO
Group Holdings is a next-generation aerospace and defense platform driving innovation across defense and commercial markets. Headquartered
in McLean, VA, with operations in the U.S., Canada, and Denmark, AIRO combines a global reach with deep technical expertise.
Through
a vertically integrated model, AIRO delivers mission-critical solutions centered on its drone platforms, leveraging advanced avionics,
integrated training capabilities, and embedded autonomy across systems.
Forward-Looking
Statements
The
statements contained in this press release that are not historical facts are forward-looking statements. You can identify forward-looking
statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,”
“seeks,” “intends,” “plans,” “estimates,” or “anticipates,” or similar expressions
which concern our strategy, plans, projections or intentions. These forward-looking statements may be included throughout this press
release and include, but are not limited to, statements relating to AIRO’s expectations around its strategic initiatives and growth
trajectory, statements relating to estimates and forecasts of financial and performance metrics, including full year 2026 outlook, the
amount and timing of Drone backlog and opportunity pipeline converting to revenue, the sufficiency of AIRO’s cash and restricted
cash to support ongoing strategic initiatives, the demand for, market acceptance of and opportunity of AIRO’s products and services
and other statements that are not historical fact. By their nature, forward-looking statements are not statements of historical fact
or guarantees of future performance and are subject to risks, uncertainties, assumptions or changes in circumstances that are difficult
to predict or quantify, including those described in the section titled “Risk Factors” in AIRO’s Annual Report on Form
10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (“SEC”) on March 31, 2026 as
well as other filings AIRO may make with the SEC in the future. Forward-looking statements represent AIRO’s management’s
beliefs and assumptions only as of the date such statements are made. AIRO undertakes no obligation to update any forward-looking statements
made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the
occurrence of unanticipated events, except as required by law.
Non-GAAP
Financial Measures and Backlog
To
supplement its condensed consolidated financial statements prepared and presented in accordance with GAAP, AIRO uses EBITDA, Adjusted
EBITDA and Adjusted EBITDA margin, as described below, to facilitate analysis of its financial and business trends and for internal planning
and forecasting purposes. AIRO defines (1) EBITDA as net loss before depreciation and amortization, income tax (benefit) expense,
net, and interest (income) expense, net, (2) Adjusted EBITDA as net loss before depreciation and amortization, income tax (benefit)
expense, interest (income) expense, net, gain on extinguishment of debt, stock-based compensation, strategic workforce transition
costs, contingent consideration fair value adjustments, warrant fair value adjustment, and IPO contingencies, and (3) Adjusted EBITDA
margin as Adjusted EBITDA divided by revenue. The above items are excluded from EBITDA and Adjusted EBITDA because these items are either
non-cash in nature, or because the amount and timing of these items is unpredictable, or because they are not driven by core results
of operations, thereby rendering comparisons with prior periods and competitors less meaningful. AIRO believes Adjusted EBITDA provides
useful information to investors and others in understanding and evaluating its results of operations, as well as provides useful measures
for period-to-period comparisons of its business performance. Moreover, Adjusted EBITDA is a key measurement used by AIRO management
internally to make operating decisions, including those related to analyzing operating expenses, evaluating performance and performing
strategic planning and annual budgeting.
There
are limitations associated with the use of non-GAAP financial measures. These non-GAAP financial measures should not be considered as
alternatives to performance measures derived in accordance with GAAP. AIRO’s presentation of these non-GAAP financial measures
should not be construed to imply that its future results will be unaffected by items that are excluded from these metrics. In addition,
AIRO’s definitions of these non-GAAP financial measures may be different from similarly titled non-GAAP measures used by other
companies. These non-GAAP financial measures have limitations as an analytical tool and you should not consider any of these non-GAAP
financial measures in isolation or as a substitute for analysis of our results as reported under GAAP. See the tables that follow for
a reconciliation of EBITDA and Adjusted EBITDA to net loss and Adjusted EBITDA Margin to net loss margin, the most directly comparable
financial measures stated in accordance with GAAP.
Drones
segment backlog represents unfilled orders for which we have purchase orders, definitive agreements, or high probability of
conversion with customers, as well as orders for which NATO countries have allocated funds but for which no definitive agreement
has been executed but is expected once through the administrative process, in each case against for which we expect to perform and recognize
the majority of revenue in the next 12 months. Drones segment backlog amounts outside of the United States were translated to
U.S. dollars using applicable exchange rates as of market close on November 5, 2026, and may increase or decrease based on fluctuations
in foreign exchange rates. Drones segment backlog reported in prior quarters excluded U.S. backlog. Beginning with the third quarter
of 2026, AIRO will include U.S. backlog in its reported Drones segment backlog to reflect the ramp-up of its U.S. manufacturing
efforts. Opportunity pipeline represents all active opportunities being pursued across AIRO’s four business segments. There can
be no assurance that the stated Drones segment backlog or opportunity pipeline will convert to revenue.
AIRO
Group Holdings, Inc.
Condensed
Consolidated Balance Sheets
(unaudited)
| (Amounts in thousands, except par value amounts) | |
September 30, 2026 | | |
December 31, 2025 | |
| ASSETS | |
| | | |
| | |
| Current assets: | |
| | | |
| | |
| Cash | |
$ | 37,818 | | |
$ | 74,358 | |
| Restricted cash | |
| - | | |
| 193 | |
| Accounts receivable, net | |
| 16,572 | | |
| 12,385 | |
| Related party receivables | |
| - | | |
| 393 | |
| Inventory | |
| 18,368 | | |
| 11,639 | |
| Prepaid expenses and other current assets | |
| 7,323 | | |
| 7,508 | |
| Total current assets | |
| 80,081 | | |
| 106,476 | |
| Property and equipment, net | |
| 13,662 | | |
| 8,986 | |
| Right-of-use operating lease assets | |
| 3,543 | | |
| 3,278 | |
| Goodwill | |
| 567,447 | | |
| 571,653 | |
| Intangible assets, net | |
| 76,765 | | |
| 83,487 | |
| Other assets | |
| 209 | | |
| 259 | |
| Total assets | |
$ | 741,707 | | |
$ | 774,139 | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
| | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Accounts payable | |
$ | 9,991 | | |
$ | 6,599 | |
| Related party payables | |
| 3,513 | | |
| 8,892 | |
| Accrued expenses | |
| 7,507 | | |
| 7,624 | |
| Operating lease liabilities, current | |
| 1,051 | | |
| 902 | |
| Deferred revenue | |
| 6,119 | | |
| 4,497 | |
| Related party borrowings | |
| 5 | | |
| 1,161 | |
| Current maturities of debt | |
| 1,166 | | |
| 1,190 | |
| Total current liabilities | |
| 29,352 | | |
| 30,865 | |
| Long-term debt, net of current maturities | |
| - | | |
| 500 | |
| Deferred tax liability | |
| 1,069 | | |
| 1,046 | |
| Long-term deferred revenue | |
| 11 | | |
| 8 | |
| Operating lease liabilities, noncurrent | |
| 2,584 | | |
| 2,478 | |
| Other long-term liabilities | |
| 800 | | |
| 50 | |
| Total liabilities | |
| 33,816 | | |
| 34,947 | |
| | |
| | | |
| | |
| Stockholders’ equity: | |
| | | |
| | |
| Common stock, $0.000001 par value; 1,000,000 shares authorized; 33,075 issued and 31,857 outstanding as of September 30, 2026 and 32,594 issued and 31,376 outstanding as of December 31, 2025 | |
| - | | |
| - | |
| Additional paid-in capital | |
| 966,940 | | |
| 963,022 | |
| Treasury shares, 1,218 shares as of September 30, 2026 and December 31, 2025 | |
| (21,220 | ) | |
| (21,220 | ) |
| Accumulated other comprehensive income | |
| 2,172 | | |
| 7,947 | |
| Accumulated deficit | |
| (240,001 | ) | |
| (210,557 | ) |
| Total stockholders’ equity | |
| 707,891 | | |
| 739,192 | |
| Total liabilities and stockholders’ equity | |
$ | 741,707 | | |
$ | 774,139 | |
AIRO
Group Holdings, Inc.
Condensed
Consolidated Statements of Operations
(unaudited)
| | |
Three months ended
September 30, | |
Nine months ended
September 30, |
| (Amounts in thousands, except per share amounts) | |
2026 | |
2025 | |
2026 | |
2025 |
| Revenue | |
$ | 17,510 | | |
$ | 6,284 | | |
$ | 69,591 | | |
$ | 42,629 | |
| Cost of revenue | |
| 7,616 | | |
| 3,494 | | |
| 29,645 | | |
| 17,872 | |
| Gross profit | |
| 9,894 | | |
| 2,790 | | |
| 39,946 | | |
| 24,757 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | |
| Research and development | |
| 7,925 | | |
| 4,124 | | |
| 22,205 | | |
| 11,891 | |
| Sales and marketing | |
| 3,687 | | |
| 1,603 | | |
| 8,019 | | |
| 4,794 | |
| General and administrative | |
| 11,415 | | |
| 9,043 | | |
| 38,359 | | |
| 42,822 | |
| Total operating expenses | |
| 23,027 | | |
| 14,770 | | |
| 68,583 | | |
| 59,507 | |
| Loss from operations | |
| (13,133 | ) | |
| (11,980 | ) | |
| (28,637 | ) | |
| (34,750 | ) |
| Other income, net: | |
| | | |
| | | |
| | | |
| | |
| Interest income (expense), net | |
| 128 | | |
| 79 | | |
| 712 | | |
| (9,198 | ) |
| Gain on extinguishment of debt, net | |
| - | | |
| - | | |
| - | | |
| 15,559 | |
| Other income, net | |
| 987 | | |
| 3,325 | | |
| 877 | | |
| 26,055 | |
| Total other income, net | |
| 1,115 | | |
| 3,404 | | |
| 1,589 | | |
| 32,416 | |
| Loss before income tax benefit (expense) | |
| (12,018 | ) | |
| (8,576 | ) | |
| (27,048 | ) | |
| (2,334 | ) |
| Income tax benefit (expense) | |
| 21 | | |
| 613 | | |
| (2,396 | ) | |
| (1,731 | ) |
| Net loss | |
$ | (11,997 | ) | |
$ | (7,963 | ) | |
$ | (29,444 | ) | |
$ | (4,065 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net loss per share – basic and diluted | |
$ | (0.38 | ) | |
$ | (0.28 | ) | |
$ | (0.93 | ) | |
$ | (0.19 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted-average number of shares of common stock used in computing net loss per share, basic and diluted | |
| 31,671 | | |
| 28,248 | | |
| 31,513 | | |
| 21,085 | |
AIRO
Group Holdings, Inc.
Non-GAAP
Reconciliations
(UNAUDITED)
| | |
Three Months Ended September 30, | |
Nine Months Ended September 30, |
| (In thousands, except percentages) | |
2026 | |
2025 | |
2026 | |
2025 |
| Net loss | |
$ | (11,997 | ) | |
$ | (7,963 | ) | |
$ | (29,444 | ) | |
$ | (4,065 | ) |
| Depreciation and amortization | |
| 3,316 | | |
| 2,909 | | |
| 9,651 | | |
| 9,035 | |
| Income tax (benefit) expense | |
| (21 | ) | |
| (613 | ) | |
| 2,396 | | |
| 1,731 | |
| Interest (income) expense, net | |
| (128 | ) | |
| (79 | ) | |
| (712 | ) | |
| 9,198 | |
| EBITDA | |
| (8,830 | ) | |
| (5,746 | ) | |
| (18,109 | ) | |
| 15,899 | |
| Gain on extinguishment of debt | |
| - | | |
| - | | |
| - | | |
| (15,559 | ) |
| Stock-based compensation | |
| 1,312 | | |
| 1,092 | | |
| 3,918 | | |
| 19,855 | |
| Strategic workforce transition costs1 | |
| - | | |
| - | | |
| 635 | | |
| - | |
| Contingent consideration fair value adjustments | |
| - | | |
| - | | |
| - | | |
| (20,272 | ) |
| Warrant fair value adjustment | |
| - | | |
| - | | |
| - | | |
| (1,843 | ) |
| IPO contingencies2 | |
| - | | |
| (3,391 | ) | |
| - | | |
| (1,322 | ) |
| Adjusted EBITDA | |
$ | (7,518 | ) | |
$ | (8,045 | ) | |
$ | (13,556 | ) | |
$ | (3,242 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net loss margin | |
| (68.5 | )% | |
| (126.7 | )% | |
| (42.3 | )% | |
| (9.5 | )% |
| Adjusted EBITDA Margin | |
| (42.9 | )% | |
| (128.0 | )% | |
| (19.5 | )% | |
| (7.6 | )% |
| 1 | Strategic
workforce transition costs consist of severance and other direct employee-related costs incurred in connection with the Company’s
strategic workforce realignment and organization optimization initiatives. These costs are included in general and administrative expenses
in the accompanying condensed consolidated statements of operations. |
| | |
| 2 | IPO
contingencies for the three months ended September 30, 2025 are made up of a $1.2 million
charge related to the Libertas warrants, net of a $4.5 million gain on deferred compensation.
IPO contingencies for the nine months ended September 30, 2025 are made up of $1.0 million
related to services with KippsDeSanto & Co. regarding the acquisition of Aspen Avionics,
$0.8 million related to the Perrin legal settlement, $0.5 million in legal services accrual,
$0.2 million for the NGA contingent fee agreement, $0.3 million in bonus payments, the $0.6
million Aspen contingent debt, a $1.2 million charge related to the Libertas warrants, the
$0.1 million cash portion of the Aspen carve-out plan, net of a $5.9 million gain on deferred
compensation. |
Investor
Relations Contact
Jack
Senft
AIRO Group Holdings, Inc.
InvestorRelations@theairogroup.com
Media
Contact
Dan
Johnson
AIRO
Group Holdings, Inc.
media@theairogroup.com
Source:
AIRO Group Holdings, Inc.
