AIRO Group Stock price
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $208.58m | Revenue (TTM) = $106.64m
Market Cap = $208.58m | Estimated Revenue = $112.00m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $189.57m | Revenue (TTM) = $106.64m
Enterprise Value = $189.57m | Forward Revenue = $112.00m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net Margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Revenue per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
AIRO Group Stock Analysis
Analyst Opinions
9 Analysts have issued a AIRO Group forecast:
Analyst Opinions
9 Analysts have issued a AIRO Group forecast:
AIRO Group Events
Past Events
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AUG
13
Q2 2026 Earnings Call
about 2 months ago
|
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MAY
14
Q1 2026 Earnings Call
5 months ago
|
StocksGuide Free
AIRO Group — Q2 2026 Earnings Call
1. Management Discussion
Thank you for standing by. My name is Jonathan, and I will be your conference moderator today. At this time, I would like to welcome everyone to the Aero Q2 2026 earnings call. [Operator Instructions]
I would now like to turn the call over to Jack Senft, Investor Relations at Aero. Please go ahead.
Thank you, Operator, and good morning, everyone. Welcome to the Aero Group Holdings, Incorporated second quarter 2026 earnings call. We appreciate you joining us today and look forward to sharing an update on our progress and performance. With me on the call are Dr. Chiranjeev Kathuria, our Executive Chairman, Captain Joseph Burns, our Chief Executive Officer, and Dr. Mariya Pylypiv, our Chief Financial Officer. Today's call will include forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to Aero's 2026 outlook.
Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. Forward-looking statements represent management's beliefs and assumptions only as of the date made. Information on factors that could affect the company's financial results is included in the company's most recent annual report on Form 10-K and other filings with the SEC from time to time. In addition to our prepared remarks, our earnings press release, SEC filings, and a replay of today's call can be found on our Investor Relations website at investor.theaerogroup.com. We have also posted our earnings presentation on the Investor Relations section of our website.
In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not a substitute for, or superior to measures of financial performance prepared in accordance with GAAP. Reconciliations between GAAP and non-GAAP financial measures and the discussion of the limitations of using non-GAAP measures versus their closest GAAP equivalents is available in our earnings release. Additionally, we plan to discuss drone segment backlog, a definition of which can be found in our earnings release. We will also discuss our cash balance as of July 31, 2026, which is a preliminary estimate based on information available to us as of the date of this presentation. Additional information on this metric can be found in the earnings presentation on our Investor Relations website.
With that, I will turn it over to our Executive Chairman, Dr. Chiranjeev Kathuria.
Thanks, Jack, and thank you all for joining us today. Aero delivered a strong second quarter that was marked by revenue outperformance against expectations driven by solid execution within our drone segment. Gross margins improved to 64%, leading to a small operating profit for the quarter, a big improvement from the loss we saw in the same period last year. Looking ahead, and as Mariya will discuss in her section, we are reiterating full-year revenue growth guidance of 15% to 25%. She will detail some additional thoughts to think through the rest of the year. On top of this, total drone backlog grew roughly 9% from last quarter to approximately $163 million.
On the strategic front, it was also a busy quarter. The RQ-35 drone achieved Blue UAS certification, which opens up meaningful new opportunities in U.S. defense procurement. We also unveiled our new RQ-70 long-range ISR platform. Development continues on the JC250 and the JX250 cargo and ISR drone variants, and costs there are coming in below expectations, with the first flight still on track for later this year. We remain squarely focused on the unmanned drone market. Second quarter was a solid quarter of execution, and we expect that momentum to continue as we scale manufacturing, diversify our revenue base, and stay disciplined on cost, all while continuing to invest in Aero's next phase of growth.
With that, let me turn it over to Joe to discuss our strategy and the operational highlights.
Thank you, Chiranjeev, and thank you all for joining us on today's earnings call. I am happy to report second quarter results that exceeded expectations, finishing out a strong first half of the year. Our second quarter results were marked by on-time drone deliveries plus multiple announcements. These recent developments highlight our execution on strategy, but we are not done here. While second quarter top-line results mark sequential growth versus our 1Q performance, this demonstrates the variable nature of our business. Still, second quarter results topped expectations. We are reiterating our full-year guidance ranges we previously provided. Mariya will walk through the financial details later in the call.
Now let me provide some updates on our portfolio and strategic positioning at Aero. We have a solid, growing portfolio of products and services. We remain focused on the overall drone market, whether it be through new product developments or through partnerships and inorganic opportunities. We are actively working to reduce quarterly variability by expanding our international and domestic revenue base. One such milestone on our product side, and one that I'm especially pleased to highlight, is that our RQ-35 drone is now officially Blue UAS certified. With this approval, the RQ-35 is recognized by the Department of Defense as a secure, compliant unmanned aircraft system, eligible for government and defense procurement under NDAA requirements.
As most of you know, Blue UAS streamlines access to the DoD and federal procurement channels, accelerating our ability to compete for and secure U.S. defense contracts, which we expect will support Aero's long-term revenue growth across domestic and international markets. We believe the Blue UAS milestone is a testament to the RQ-35, from its embedded technology, use cases, and performance on the battlefield. The RQ-35 and now our recently unveiled RQ-70 continue to set our technology apart from the rest of the pack. The RQ-35 is battle-tested, having been deployed in the Ukraine conflict, and the platform is extremely quiet, hand-launched, and purpose-built for ISR missions. It has demonstrated real resilience, even against electronic warfare and in GPS and GNSS-denied environments.
With up to 50 kilometers of range and 150 minutes of flight time, it delivers extended time on target, quick frontline serviceability with a smart battery for reliable performance. The RQ-35 platform also offers onboard AI with edge computing, which enables real-time identification and classification of enemy assets and threats, while strengthening navigation, situational awareness, and mission execution. This drives faster, more informed decisions in the field. As a note, edge computing brings our flying servers closer to the battle, allowing us to significantly speed up and improve target recognition and decision speed, which reduces the already jammed bandwidth required by other competitor systems. Our goal is to embed AI across all of our product and service offerings at Aero.
The RQ-70 is our newest platform, built on years of RQ-35 battle data and leveraging our existing manufacturing and NDAA supply chain. We are already engaged with multiple defense customers on future deployment. It offers configuration flexibility between standard, long-range, and VTOL configurations and includes a modular design that lets it serve as a standalone ISR drone for NATO and allied customers. Our RQ-70 is built for up to 8 hours of endurance, 100 kilometers of range, and resilience in GPS-denied environments. We are reaffirming expected production start in January 2027. Capabilities such as these further set Aero apart with strong customer validation to date. We are building on that momentum with new initiatives and will continue to provide updates in the quarters ahead.
On the product side, we're making great progress developing our cargo and ISR drone variants, the JC250 and JX250. We have been strategically evaluating and selecting suppliers for the vehicle, and we are reaffirming our expectation for the first flight later this year. I am also happy to report that Aero-specific costs for development are running below our internal expectations by a low double-digit percent. There are a few driving factors. First, because the cargo and ISR variants share a common foundation, we are developing them at a fraction of the cost of their passenger counterpart. Second, we have made real progress in supply chain negotiations, which is lowering our input costs. Third, we are realizing synergies across the platform faster than we had modeled. And finally, our R&D team has been executing efficiently, which is keeping development costs disciplined. Taken together, these factors are giving us confidence in the cost trajectory of this program.
While still in the early innings, all the developments that I mentioned represent our efforts in diversifying our product portfolio and stabilizing revenue variability over time. On the avionics and electronics side of our portfolio, Aero delivered largely flat revenue quarter-over-quarter as demand for our avionics products remained stable and consistent with the prior quarter. Despite the static growth year-to-date, we are actively advancing next-generation sensor and navigation solutions, which were on display at the EAA AirVenture Oshkosh in late July. We received solid feedback at the trade show with customers highlighting our product reliability and functionality. Avionics continues to play a critical and strategic role within our broader company profile. With our avionics and ramping U.S. drone operations now consolidated under one roof in Phoenix, we expect synergies here to begin bearing fruit in the coming quarters.
These dynamics are part of what reinforces Aero's long-term competitive advantage. Over time, we expect to bring more avionics systems in-house across our unmanned platforms, streamlining operations, reducing supply chain complexity, and ultimately strengthening our gross margin profile. Lastly, on the services side, we are continuing to evaluate strategic alternatives for training, and we expect to have an update on that direction by the end of the year. We believe the training segment remains a valuable asset with a significant long-term opportunity, although the segment is capital-intensive and often requires meaningful ongoing investment. Recall, while underlying demand persists within this segment, performance here has been below expectations. This is driven by the fact that the task orders coming out of the U.S. government are not within the strengths of Aero.
We believe this narrative will shift over time, and we are positioning, investing, and strengthening our training asset to pursue upcoming long-term close air support training opportunities. That said, we are exploring all possible avenues for the business, but our focus remains on unmanned systems. Overall, we are encouraged by the momentum generated across our portfolio during the second quarter. From achieving Blue UAS certification for the RQ-35 and advancing customer engagement around our new RQ-70 platform to progressing development of our cargo and ISR drone variants and positioning our avionics business for future synergies, we continue to execute on our strategy of expanding capabilities, diversifying revenue streams, and embedding AI across our offerings. While there is still work ahead, we believe these milestones reinforce the strength of our technology and market position, and we look forward to building on this momentum in the quarters to come.
We remain disciplined on our capital initiatives. We continue to evaluate inorganic opportunities carefully, focusing on acquisitions that would be accretive in the near term and that strategically enhance our product portfolio, namely for drones, avionics, and electronics. We also see M&A as having the potential to play an important role in reducing Aero's quarterly revenue variability over time. As I have discussed in the past, our balance sheet gives us real flexibility to act when the right opportunity comes along, and selective M&A will continue to play a vital role in how we endeavor to maximize long-term shareholder value. With the multiple drone deliveries in 2Q, and given the timing of these drone deliveries at quarter end, our cash balance as of July 31, 2026, was approximately $56 million, significantly strengthening Aero's balance sheet.
In closing, the initiatives, discipline, and efforts we have employed to date bolster our strategy of delivering mission-ready ISR systems that can be produced, upgraded, and supported at scale. I'm also grateful for the colleagues beside me today and for every employee who makes this company what it is. Our leadership team brings extensive industry experience to the table, and as we continue to add key personnel, we are further strengthening our competitive position in the market. With that, I will turn it over to Mariya, who will walk you through the financial results in more detail. Mariya?
Thank you, Joe, and good morning, everyone. For the second quarter of 2026, revenue was $43.2 million, compared to $24.6 million in the second quarter of 2025. This represents growth of nearly 76% year-over-year. Revenue for the quarter was ahead of expectations, driven by outperformance against expectations in our drone segment, partially offset by underperformance in avionics and training. Gross profit for the quarter was $27.7 million, representing a gross margin of 64%, compared to a gross profit of $15 million and gross margin of 61% versus the same period last year. The improvement in gross margins, both sequentially and year-over-year, was also driven by a product mix shift back towards drone products, consistent with expectations. Recall, our first quarter margins were impacted by upgrade revenue, negatively impacting margins.
Operating income for the quarter was $1.7 million versus negative $19.7 million in the second quarter of 2025. This year-over-year improvement is a result of higher revenue, improved gross margins, and IPO-related costs incurred in the prior year period. We remain disciplined on costs while continuing to invest selectively in the infrastructure needed to support our growth. Our second quarter net loss was $2 million versus a net income of $5.9 million in the second quarter 2025. Second quarter 2026 EBITDA was $5.1 million compared to $18.9 million in the prior year period. On an adjusted basis, EBITDA was $6.8 million, up from $4.7 million in the second quarter 2025.
As Joe mentioned, on the cost side for our JC250 and JX250 platform, I am happy to report that development costs are tracking below our internal expectations. The shared foundation between our cargo and ISR variants means we are developing them at a fraction of the cost of the passenger version, and we are realizing savings beyond our original projections by roughly a low double-digit percentage. We retain flexibility to adjust our spending pace up or down as conditions warrant. Right now, though, we believe the right path forward is deliberate, efficient investment to put the required infrastructure in place to support our next phase of growth.
Turning to cash flow and liquidity, as of June 30, 2026, we had $25.9 million in cash on the balance sheet, with $6.8 million in debt. Accounts receivables were higher than usual at quarter end, driven by the multiple drone deliveries late in the quarter. As of July 31, we had approximately $56 million of cash, primarily reflecting the subsequent collection of international drone receivables outstanding at quarter end. This strengthened our liquidity position and provides us with continued flexibility to execute against our strategic priorities. As of June 30, 2026, we had roughly $163 million in drone backlog. We expect the majority of this backlog to convert to revenue within the next 12 months. We will be updating our backlog to include U.S. opportunities and ongoing pursuits in the coming quarters. We expect this will meaningfully increase the total backlog as those orders are incorporated.
We define backlog as orders we reasonably expect to convert to revenue over the next 12 months. As this metric provides visibility into near-term demand, our broader pipeline continues to expand, underscoring the long-term demand trends we have discussed throughout today's call. Based on our current visibility, we are reiterating our full-year revenue growth guidance of 15% to 25% year-over-year. Let me provide some additional context on the expected cadence for the remainder of the year. First, 1 material drone delivery originally expected in the third quarter was completed in the second quarter. As a result, first half revenue represented approximately 50% of our current full-year expectations. Second, reflecting that pull forward, we currently expect second half revenue to be in line with, or modestly above, first half revenue. Within the second half, we expect third quarter revenue to decline sequentially from the second quarter, followed by a stronger fourth quarter. We currently expect fourth quarter revenue to be modestly above the second quarter.
Third, given the international nature of our business, foreign exchange remains a factor in our outlook. We now anticipate greater FX headwinds in the second half, with an incremental revenue impact of a few million dollars compared with our prior expectations. We have incorporated that impact into our outlook and remain confident in our full-year guidance range. We continue to expect modest gross margin compression versus 2025, with full-year gross margin broadly in line with first half levels.
Turning to profitability, we continue to expect full-year 2026 adjusted EBITDA in the negative mid to high teens millions, with the quarterly cadence expected to broadly follow revenue. In closing, our strategy remains focused on 3 priorities: diversifying our revenue base, scaling manufacturing, and accelerating new product introductions. As those products ramp up and make up a larger share of revenue, we expect that to reduce quarterly volatility and strengthen backlog growth over time. Specifically, with the introduction of the RQ-70, the first delivery of the Zentra camera suite, and the JC250 and JX250 coming online late next year, we expect to begin seeing the benefits of that revenue stability next year, with continued improvements in the quarters and years to follow.
That progress is exactly why fiscal year '26 is a year of accelerated investment for us. As I have said before, we are still early in our growth phase and we intend to invest accordingly, while staying disciplined on costs and preserving flexibility to adjust our cost structure as needed. That balance supports our confidence in Aero's long-term growth trajectory. With that, Operator, we're ready for questions.
[Operator Instructions] Our first question is from the line of Colin Canfield from Cantor Fitzgerald. Your line is now open. Please go ahead.
2. Question Answer
Maybe if we could start on drone order trends to parse out the mix of U.S. and international drone orders for the RQ-35, discuss the milestones that you need to see to essentially increase the backlog. The comment you made on materially increasing backlog, basically, what milestones does it take to recognize that backlog increase? And then if you could also talk about early customer interest for the RQ-70.
Hi Colin, thank you for your question. So I'll start. Our $163 million backlog represents international drone backlog and does not currently include any U.S. backlog. We expect that the majority of that backlog will convert to revenue over the next 12 months. So naturally, the portion of it extends into 2027. In terms of the U.S., we have responded to a number of RFQs and continue to see a growing pipeline of opportunities. And as those opportunities convert into orders, and we expect them to be able to convert into backlog, it will provide additional visibility for U.S. backlog, which will incrementally add to the $163 million backlog we are currently reporting today. As far as additional products being included, it's mostly composed out of the RQ-35. There's a very small percentage of the RQ-70 being added to this number right now.
And if I, this is Joe, good morning, Colin, if I could follow on with that. Some of the milestones, obviously key milestones for us were the Blue UAS certification, which will allow us into the U.S. market. So that was a big one. The RQ-70 announcement and launch of that product are also a big milestone to enhance our expansion of our margin profile. You also mentioned or asked a question about early customer interest in the RQ-70. It's been very strong because it does fill a gap in sort of that high-end ISR market, that long duration flight, ease of operations, and low costs. So we feel very, very strong about the RQ-70 filling in the interest category as well.
Maybe if we could talk about free cash flow. The foundational building blocks and kind of the level of investment related to the defense transport platform. Just kind of walk through how you think about the investment on that program and flexing down, and perhaps maybe kind of how you think about that relative to the company's ability to generate free cash flow. Thank you.
Thank you, Colin. So I'll start and then I'll let Joe add anything I missed. So in terms of free cash flow, we are very comfortable right now with our liquidity position, and it's closely tracking our internal expectations. The biggest factor for the quarter was timing as we were building inventory to support deliveries. So those deliveries occurred at the end of the quarter, a significant portion of receivables converted into cash. And as I mentioned earlier, as of July 31, our cash and cash equivalents were approximately $56 million.
In terms of investments for the air mobility, our costs have been reduced, which Aero is very comfortable with. Right now they're running in the low double digits below initial expectations. And while we have not provided the size of the investments, we are still tracking on time. And overall, because we shifted our focus on ISR and cargo drones, it significantly reduced our expected development costs compared to the passenger platform, which obviously provides significant upside for our liquidity. And if we think about moving forward, free cash flow, we anticipate there should be a shift into positive cash flow in 2027 and beyond.
That's great. Thank you. And to expand on the JX250 and the JC250, our ISR and cargo variants of that large cargo transport, you know, we've talked about in the past about eVTOL. This is an eVTOL aircraft, but it's different than what we had previously discussed in the passenger realm. We don't carry passengers on this. It's basically a large cargo drone. Very long duration, hybrid drive can use conventional fuels. So we think there is a new and growing market for this type of transport if you think about sort of combat operations, the ability to resupply, get critical medical information to and from, etc. So for us, it's a real opportunity to jump into somewhat of a new market. You're starting to see that, obviously, in this industry as well.
Thank you. Your next question comes from the line of Andre Madrid from U.S. Bancorp BTIG. Your line is now open. Please go ahead.
I was wondering if you could provide us an update on where you're at with Nord and Bullitt, those JVs.
Sure. This is Joe. Good question, Andre. So as you probably know at this point, there are some significant order issues or significant issues with the Ukrainian government's permitting process. You know, in their current [indiscernible] government, there is [indiscernible] of aircraft coming into [indiscernible] transfers. We are still [indiscernible] and we're working [indiscernible] council over there and [indiscernible] these permits. But that said, the partnerships and JVs like these are really a compelling route for us. I want to make it clear that we're not dependent on any one of them for growth.
The partnership and JVs will expand our access to multiple markets and help accelerate our growth plans. We're currently evaluating additional partnerships as well in this particular market, and those specifically for drone dominance. So we're excited about other opportunities. It's really opened our eyes as to what's available, what the markets look like for us. And with the ability for our certification routes, we're excited about [indiscernible] in these things moving forward.
That's really helpful. And then maybe pivoting to training for a bit. I know you guys had mentioned last quarter your decision to pursue strategic alternatives or consider strategic alternatives there. Is there any update that you can provide as to maybe how that's tracking and when the decision might be made?
Sure, we're planning to have decisions by year-end. We're making a lot of discussions around it. As we mentioned before, we're actively evaluating a range of strategic options. And our intent in disclosing this is to be transparent with the market. Well, really our core focus right now is on drone and avionics operations. And we see limited synergies between the training segment and our core business, which is important while we're evaluating the long-term strategic fit. Training is expensive. We have made a significant investment so far, but we're still excited about the opportunities in this particular business. But as always, drones are our main focus, and that's where we want to look at focusing most of our capital.
Yes, that's really helpful, Joe. I appreciate it. I'll leave it there. Thanks.
Thank you. There are no further questions. We have reached the end of the Q&A session. This concludes today's call. Thank you for attending. You may now disconnect.
AIRO Group — Q2 2026 Earnings Call
AIRO Group — Q1 2026 Earnings Call
1. Management Discussion
Thank you for standing by. My name is Janine, and I will be your conference operator for today. At this time, I would like to welcome everyone to AIRO First Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Dan Johnson, Executive Vice President of Investor Relations. Please go ahead.
Thank you, operator, and good morning, everyone. Welcome to the AIRO Group Holdings, Inc. First Quarter 2026 Earnings Call. We appreciate you joining us today and look forward to sharing an update on our progress and performance.
With me on the call are Dr. Chirinjeev Kathuria, our Executive Chairman; Captain Joseph Burns, our Chief Executive Officer; and Dr. Mariya Pylypiv, our Chief Financial Officer. Replay information for today's call can be found in our earnings press release issued earlier this morning.
Today's call will include forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to AIRO's 2026 outlook. Forward-looking statements represent our management's beliefs and assumptions only as of the date made. Information on factors that could affect the company's financial results is included in its discuss non-GAAP financial measures.
These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Reconciliations between GAAP and non-GAAP financial measures and a discussion of the limitations of using non-GAAP measures versus their closest GAAP equivalent is available in our earnings release. Additionally, we plan to discuss drone segment backlog, a definition of which can be found in our earnings release.
With that, I'll turn it over to our Executive Chairman, Dr. Chirinjeev Kathuria.
Thanks, Jack, and thank you all for joining us today. First, I will begin with a brief strategic overview before turning it over to Joe to walk through the business. 2025 was a foundational year for our company, and we believe the first quarter was another step in creating the key infrastructure that we can leverage throughout the remainder of this growth year. We continue to execute on our vision for a differentiated integrated aerospace and defense platform positioned at the intersection of defense mobility, security and training. I am proud of our team's effort as we refine our strategic focus on opportunities that best align customer demand, operational time lines, and durable long-term value. This focused approach allows us to deploy capital more effectively, accelerate platform development, and scale the business in a disciplined manner as a newly public company.
Our call today will highlight a few key points that I want to emphasize before turning it over to Joe. First, as Joe will note further, we are repositioning the business to focus on the drone market. This is intentional and part of our strategy to diversify our product portfolio. In doing so, we recently introduced several new platforms, including the RQ-70, which complements the RQ-35 with extended range, higher payload capacity, upgraded sensors, and a competitive price point. We also recently unveiled the JC-250 and the JX-250 drone aircraft, designed to achieve over 1,000 miles of range and 16 hours of endurance in the ISR configuration.
Together, these platforms broaden our addressable market and reinforce our focus on scalable, mission-ready drone solutions. Second, we are reaffirming our expectations to achieve Blue UAS certification in the second quarter of 2026. And third, demand remains stable with the total drone backlog exceeding $150 million as of April 30th, and we're reiterating our full year guidance of 2026 revenue growth guidance of 15% to 25%. Consistent with that outlook, our first quarter top line results were in line with internal expectations. We believe this first quarter performance sets the stage for stronger execution and growth across the remaining quarters of the year.
With that, let me turn it over to Joe to discuss our segments and the market. Joe?
Thank you, Chirinjeev. It's great to be with you all here today. I am pleased to report a solid start to the year, highlighted by disciplined investment to build out our operational infrastructure. Top line results were in line with our internal expectations, and the quarter reflects the revenue lumpiness inherent in our business model. Despite this variability, we remain highly confident in our ability to deliver within the full year guidance ranges we previously provided. Mariya will walk you through the financial details later in this call.
Our NATO business is typically driven by larger country-specific orders, which can create quarter-to-quarter variability in delivery timing. This does not impact our full year performance, as these orders are generally fulfilled within the calendar year tied to funding. While supply chain dynamics can also influence timing, these effects have historically normalized within the year and are reflected in our planning assumptions.
As a result, our confidence in our full year outlook remains strong. At the same time, we're actively working to reduce quarterly variability by expanding our international and domestic revenue base. We have invested in business development, scaled manufacturing across Denmark and the United States, and advanced key initiatives such as Blue UAS certification and new product introductions. Over time, we expect these actions to improve revenue balance, reduce volatility and support continued backlog growth. Against this backdrop, I want to be very clear, we are executing on a strategic shift in how we position our business. We are sharpening our focus around the drone market, where we see the most significant and immediate opportunity while positioning us for long-term growth.
AIRO's flight heritage, engineering expertise and operational know-how position us extremely well to capitalize on this momentum. As part of this effort, we are continuing to optimize our portfolio, including evaluating strategic alternatives for our training business. We see ongoing underlying demand across the training market, and CDI remains a valuable, albeit asset-heavy operation. That said, we are assessing its long-term role within our portfolio as we scale our other segments. We expect to discuss this in more detail later in the call. And at the same time, we are continuing to strengthen our core drone offerings.
Over the past several quarters, we have been developing new products and solutions that expand our addressable market, build on our core capabilities, and further strengthen our competitive advantage relative to other drone manufacturers. We are concentrating our efforts on a large cargo drone platform and an ISR variant. These programs leverage a common foundation, can be developed at a fraction of the cost, and face significantly lower regulatory hurdles. We believe this approach enables more predictable, diversified revenue streams, and represents the most efficient deployment of our resources. This focus meaningfully differentiates AIRO from many public peers and positions us as a pure-play drone company with scalable demand over time.
It also aligns tightly with our mission and positions us to move faster, scale more efficiently and create durable shareholder value. All said, I'm proud to share that we've unveiled two new drone variants this past week at AUVSI's XPONENTIAL 2026 conference in Detroit, the JX-250 and the JC-250. In the ISR configuration, the JX-250, the drone is expected to achieve over 1,000 miles of range with up to 16 hours of endurance. We are targeting first flights later this year and expect these aircraft to be operationally ready and commercialized in 2027, consistent with our prior expectations. These drones leverage our unique patented IP for slow rotor technology and are complementary of our existing drone products. This represents another step in diversifying our product portfolio, and we believe we are still in the early innings of that effort.
Turning to our broader product lineup, the RQ-35 Heidrun continues to serve as our core platform today. At the same time, we are very excited about several new platforms we plan to introduce over the coming months. One such platform is the RQ-70, which is complementary to the RQ-35. The RQ-70 Dainn addresses a distinct operational profile with enhanced capabilities, most notably being a significantly extended flight range. It also offers higher payload capacity and upgraded sensor options. We also expect the RQ-70 to be highly competitive from a pricing standpoint, coming in below many legacy competitor systems. As a result, we believe this platform is well positioned to gain market share quickly following its introduction.
Another key differentiator is our AI integration, which is directly enhancing the value we deliver to customers. As I have mentioned on previous calls, our goal at AIRO is to embed AI across every product we build, including both drones and avionics. We are already marketing and selling the AI-enabled full-stack RQ-35 Heidrun. Over the course of the year, we will roll out additional onboard AI applications, leveraging our existing platform infrastructure. For example, our onboard AI enables real-time identification and classification of enemy assets and threats while strengthening navigation, situational awareness, mission execution, and autonomy. This drives faster, more informed decisions in the field. This is just the beginning.
Our road map extends across the entire fleet, with AI enhancing autonomy and mission performance, especially in GPS denied environments. These capabilities further set AIRO apart with strong customer validation to date. We are building on that momentum with new AI initiatives and we'll continue to provide updates in the quarters ahead. We are also reaffirming our time line to achieve Blue UAS certification in the second quarter of 2026. As I've alluded in prior calls, the Blue UAS certification is a key milestone for AIRO that is finally within reach. This incredible opportunity significantly expands our total addressable market as it provides us the chance to support the U.S. Department of Defense, plus aiding in rapidly scaling domestic adoption. Being Blue UAS certified is a key priority for the AIRO team.
Receiving the green light for Blue UAS certification supports our Made in America expansion strategy, and the AIRO team has experienced fully assembling RQ-35 Heidrun drones in our U.S. manufacturing facility in Phoenix, Arizona. Turning to avionics, Aspen, our core avionics business, performed in line with our top line expectations for the quarter.
Segment margins were impacted primarily by upgrade-related pricing programs as well as the timing of operating expenses during the period. Neither of these factors change our long-term view of the strength and trajectory of that business. We continue to see consistent demand for Aspen products, particularly driven by performance, reliability, and technological differentiation of our sensor and GPS offerings. Additionally, we maintain a solid pipeline supported by multiple multiyear OEM agreements while continuing to invest in the development and innovation of the Aspen product portfolio.
Innovation remains a core priority for Aspen. We are actively advancing next-generation sensor and navigation solutions, which we displayed at the AUVSI XPONENTIAL Trade show this past week. These generation systems are designed to expand functionality, improve performance and further solidify Aspen's leadership position in avionics sensing and GPS technology. Strategically, Aspen continues to play a critical role within our broader company profile with meaningful synergies yet to be unlocked.
We see compelling opportunities to integrate Aspen Avionics more deeply into our drone business. Over time, we also anticipate increased internalization of avionics systems onboard or unmanned platforms. Synergies like this have the potential to streamline our operation, reduce supply chain complexity, and ultimately strengthen our long-term gross profit margin profile. These dynamics reinforce AIRO's long-term competitive advantage.
On to our training business. Performance for the period was largely as expected, but also reflects the variability that can characterize this segment. As I alluded to earlier, we continue to see underlying demand across the training market. However, many of these task orders that are available are not yet favorable to CDI, yet. CDI remains a valuable asset, and we continue to see the long-term potential in this segment. That said, the training business carries a more asset-heavy operating model.
And as a result, we are assessing its strategic fit and longer-term role within our broader portfolio, particularly as we further develop and scale our operating agreements. Looking ahead, we are well positioned to pursue several upcoming long-term close air support training opportunities. At the same time, we are exploring a range of strategic alternatives for this segment, including maintaining our current approach. We believe that a greater emphasis on unmanned systems, combined with operational efficiencies and synergies across our other businesses may offer stronger alignment with AIRO's long-term vision of capital and allocation priorities, and we are evaluating the most effective path forward to support that strategy.
Turning to capital deployment, our strong balance sheet with minimal debt gives us flexibility, and we are being deliberate in how we use it. We continue to evaluate inorganic opportunities with discipline, focusing on acquisitions that would be accretive within 12 months and that strategically enhance our drone and avionics platforms. We do, however, see a fundamental disconnect between our stock price and the underlying value of the business. And at current levels, we view share repurchases as an attractive and flexible way to return capital and drive long-term shareholder value long term.
At the same time, we remain committed to a balanced capital allocation framework, and we'll continue to evaluate disciplined inorganic opportunities that support our core platforms. Overall, our approach is to deploy capital in a way that maximizes long-term shareholder value with selective M&A playing a vital role. In closing, the initiatives, discipline and efforts, we have deployed to date bolster our strategy of delivering mission-ready ISR systems that can be reduced, upgraded, and supported at scale.
With that, I will turn it over to Mariya, who will walk you through the financial results and provide more context on the puts and takes to our guidance ranges.
Thank you, Joe, and good morning, everyone. For the first quarter of 2026, revenue was $8.9 million, compared to $11.8 million in the first quarter of 2025. This decrease in revenue was as expected and modestly ahead of our internal expectations. However, these fluctuations reflect expected business top line variability with timing-related customer shipments. Gross profit for the quarter was $2.4 million, representing a gross margin of 26.6% compared to a gross profit of $6.9 million and gross margin of 58.8% versus the same period last year. This decrease in gross margin year-over-year is not reflective of our true underlying demand. Rather, the margin compression is a result of revenue mix shift solely in Q1 towards drone upgrades.
Our internal estimates do not assume that upgrades will be the dominant driver of drone revenue in the remaining quarters this year. Instead, we assume [ pure ] drone deliveries will be the leading driver of revenue in Q2 and in the remaining quarters, favorably impacting margins going forward. Operating loss for the quarter was $17.2 million, versus $3.1 million in the first quarter of 2025. This year-over-year decline is a result of lower revenue, higher cost of sales, and higher operating expenses due to the post-IPO investments that we have previously communicated.
We remain disciplined in our cost control efforts and our continued focused deployment of investments in key areas to build up the required infrastructure to support our demand. Our first quarter net loss was $15.5 million, up from $2 million in the first quarter of 2025 due to the factors we just discussed. First quarter 2026 EBITDA was negative $14.3 million compared to positive $2.7 million in the prior year period. Adjusted EBITDA for the quarter was negative $12.8 million, compared to just about breakeven in the first quarter 2025. This reflects the same product mix dynamics and continued investments in scaling the business.
We do have ample levers in our arsenal that allow us to moderate or accelerate spending when needed, though we believe we are at the point in our growth journey, where spending in an efficient but deliberate manner is the correct path forward as we build the necessary infrastructure to succeed in our next chapter as a public company.
Turning to cash flow and liquidity. As of March 31, 2026, we had $54.2 million in cash on the balance sheet with little debt. As of April 30, 2026, we had more than $150 million in drone backlog, showing stability from the $150 million we reported on our fourth quarter call just over a month ago. We expect the majority of this backlog to convert to revenue within the next 12 months. As a reminder, this excludes any U.S. backlog, which will provide considerable upside to our backlog estimate once included. We intentionally view our backlog as conservative, and alongside a robust sales pipeline, this positions us to generate incremental top line contribution beyond the revenue embedded in our current backlog.
We continue to define this metric as backlog that we expect to reasonably convert over the next 12 months. And given we are looking at 12 months from today, this provides visibility into more than just first quarter of 2027. While this backlog represents demand over the near term, our total pipeline continues to grow and is reflective of the long-term demand we have highlighted throughout this call. Given our visibility for the remainder of the year, we expect a record second half, and more specifically, a record fourth quarter, providing strong momentum heading into 2027. That said, for 2027, we expect revenue growth to outpace what we have projected for 2026, with further outperformance coming from U.S. demand.
Turning to our outlook. Based on our current order pipeline and demand environment, we are reiterating our full year 2026 revenue growth of 15% to 25% year-over-year. Despite a year-over-year decrease in revenue this quarter due to reasons Joe outlined earlier, we are extremely confident that AIRO will achieve our guided revenue growth expectations and ultimately believe we have a very strong opportunity to outperform this guided range.
Let me provide some additional color on our internal assumptions. First, we expect this first quarter to be the low watermark for the year with respect to both top and bottom lines. We expect a roughly 40 to 60 first half, second half split, with the third quarter sequentially lower versus the second quarter. Those expectations reflect our current visibility of large drone order deliveries as a part of our typical order of business. Second, we expect low single-digit gross margin compression compared to fiscal year '25, largely driven by first quarter dynamics, which again included a higher percentage of drone upgrades versus our internal assumptions. Third, the ramp-up in our investments needed to scale our operations, impacting both research and development and sales and marketing, will be partially offset by a decrease year-over-year in our general and administrative costs.
As a reminder, we are deliberately accelerating our investments to build the foundation for our future as a high-growth company. Turning to profitability. As we continue to invest in building infrastructure to support our long-term growth, we're initiating full year 2026 adjusted EBITDA guidance in the negative mid to high teens dollar range. We expect the majority of the EBITDA loss to occur in the first half of the year, with the first quarter performance in line with or modestly better than the second quarter.
Again, we are still in the early stages of our growth phase, and we are deliberately accelerating investment to support long-term expansion. At the same time, we remain disciplined in our cost management and retain significant flexibility to adjust our cost structure as needed. In closing, and to reiterate, we are actively making investments now to reduce our quarterly variability going forward, most notably on the top line. We are specifically diversifying our revenue base, scaling manufacturing and accelerating new product introductions. As these products ramp up and contribute to a larger share of revenue, this will translate into reduced quarterly volatility with improved backlog growth. This ultimately reinforces our long-term confidence.
With that, operator, we are ready for questions.
[Operator Instructions] Our question comes from the line of Andre Madrid from BTIG.
2. Question Answer
I wanted to ask first on the Bullet and Nord JVs. I mean, what's the latest there? Have they officially closed? And if so, what could we expect in the way of financial contribution, maybe not this year, but into '27?
Thank you, Andre. It's Joe. Appreciate the question. We're still working through the regulatory issues for those two particular joint ventures. And we're making great progress outlining terms, and we hope to close them in a very timely manner. The partnerships and JVs are a compelling route for us because they really can expand our access to multiple markets beyond just the United States or beyond the host country where they happen to be.
We're also evaluating other partnerships as well, continuing to look at those opportunities and platforms where there are really clear strategic alignment. All that said, we're still details to finalize basically, as we said before, around the regulatory environment. And as soon as we get that finalized, we will absolutely be in a position to notify everyone that these things are solidly signed. Mariya, any follow-on for that?
No, Joe, you answered it perfectly. Thank you.
All right. That's helpful. And then I want to talk about pipeline. You obviously indicated that it remains very robust. But is there any kind of quantitative color that you can provide there to characterize the pipeline?
Andre, in terms of the backlog, currently, we are just discussing it from our best visibility in the next 12 months. But we are actively building our pipeline, and it's getting -- it's expanding monthly across multiple geographies and customers. What I will add is our current backlog is, as I mentioned in the call, it's next 12 months and only focused on our out of U.S. Sky Watch drone orders, and it does not include our -- the backlog we're building in U.S. and for other products that we are unveiling. Joe, do you want to add anything?
Yes, to further clarify that. As I mentioned a little earlier, we are very much on track for our Blue UAS certification in the United States. Part of that involved investing heavily, as you saw in our OpEx numbers for the first quarter, heavily in our factory in Phoenix. And once the factory was up and the process hoops have been gone through, we feel very confident in getting our final Blue UAS certification. As soon as that happens, obviously that opens us up for UAS sales of the RQ-35 within the United States. And as those sales come in, we will adjust any earnings guidance or numbers as appropriate based on that. But we want to be conservative and are waiting for that particular trigger to happen.
Got it. Got it. And I guess on that point, as you await Blue UAS certification, I know you guys were previously had your eyes set on Drone Dominance. As we look down the road to further phases of that program, I mean, are you considering future bids? If so, like maybe what do some of your proposals look like? Are you partnering with somebody? Is there any color you can give there as to where you're at?
Sure. I think Drone Dominance has taken a very interesting path, right? The initial ones we saw were kind of -- there was a lot of concern with the way the bid process went out. I think the government came back and refined it to a much more solid process. They still have some issues, we believe, in the actual bidding itself. But yes, we are involved in this as a sub right now. We know we have the manufacturing capability to work these.
We're excited about the future of it. We're doing a lot of internal design of airframes as well to help further enhance our ability to produce a large part of the Drone Dominance is around what's known as NDAA compliance. In other words, ensuring that there are no Chinese components in the particular airframes. And we're very confident of our supply chain and our ability to provide a -- an aircraft that's largely U.S. manufactured, if not 100%. We do see more phases for drone dominance coming out as well in the near future.
There are no further questions at this time. This concludes today's conference call. Thank you for your participation. You may now disconnect.
Thank you.
AIRO Group — Q1 2026 Earnings Call
Financial data from AIRO Group
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 107 107 |
4%
4%
100%
|
|
| - Direct Costs | 44 44 |
16%
16%
41%
|
|
| Gross Profit | 63 63 |
15%
15%
59%
|
|
| - Selling and Administrative Expenses | 57 57 |
11%
11%
54%
|
|
| - Research and Development Expense | 17 17 |
100%
100%
16%
|
|
| EBITDA | -11 -11 |
181%
181%
-11%
|
|
| - Depreciation and Amortization | 10 10 |
24%
24%
9%
|
|
| EBIT (Operating Income) EBIT | -21 -21 |
2,568%
2,568%
-20%
|
|
| Net Profit | -25 -25 |
22%
22%
-24%
|
|
In millions USD.
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AIRO Group Stock News
Company Profile
AIRO Group Holdings, Inc. engages in the purpose of acquiring and integrating various companies engaged in the aerospace and defense industry. The company is headquartered in Albuquerque, New Mexico and currently employs 151 full-time employees. The company went IPO on 2025-06-13. The firm operates through four segments: Drones, Avionics, Training, and Electric Air Mobility. The Drones segment develops, manufactures, and sells drones. Military drones are sold through the Sky-Watch brand. The Avionics segment develops, manufactures, and sells avionics for military and general aviation aircraft, drones, and electric vertical take-off and landing aircraft (eVTOLs). Its advanced avionics products include flight displays, Connected Panels, and GPS/GNSS sensors, which are sold through its Aspen Avionics brand. The Training segment provides military pilot training and also offers professional training and consulting services to the United States (U.S.) military, select NATO countries, and other U.S. allies under its CDI brand. Electric Air Mobility segment is developing a rotorcraft eVTOL for cargo and passenger use through its Jaunt brand for fixed route flights, on-demand trips, and cargo operations.
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| Head office | United States |
| CEO | Capt. Burns |
| Employees | 223 |
| Website | theairogroup.com |


