2026 first quarter highlights (Inpixon results excluded and reflected in discontinued operations):
Revenue of $27.7 million
Gross profit of $5.1 million
Gross profit as a percentage of revenue of 18.6 percent
2026 Financial Outlook and Guidance(1):The Company expects to achieve the following targets for the full year 2026:
Full year 2026 revenue of $160 million or greater
Full year 2026 gross profit as a percentage of revenue of 19 percent to 21 percent
Breakeven cash flow in the third quarter 2026
Cash at year-end in the range of $15 million to $17 million
Drone Nerds earnings before interest, income taxes, depreciation and amortization ("EBITDA") as a percentage of revenue in the range of 9 percent to 10 percent
End 2026 with $5 million to $10 million of availability under its asset-based lending ("ABL") facility
Second-half of 2026 consolidated adjusted EBITDA in the range of $2 million to $3 million or greater
(1) Please refer to the "Non-GAAP Measures" and Schedule 1 for the definitions and reconciliations of our Non-GAAP financial measures including "Adjusted EBITDA".
2026 first quarter events:
In February 2026, completed the divestiture of the Inpixon RTLS business to further streamline the Company's focus on its drone platform and core growth initiatives
In February 2026, secured $20 million Asset-Based Lending ("ABL") credit facility with JPMorgan to support growth and liquidity, subject to customary borrowing conditions, covenants and availability
Received approximately $7.4 million in net proceeds from the exercise of warrants during the quarter
Appointed Clinton Weber and Jonathan Ornstein to XTI's Board of Directors, further enhancing the Board's aviation, aerospace and unmanned systems experience
"We believe the first quarter demonstrated continued progress in repositioning XTI Aerospace around a more scalable and financially disciplined operating model," said Scott Pomeroy, Chairman and Chief Executive Officer of XTI Aerospace. "Drone Nerds continued to expand its enterprise and government engagement, pipeline activity strengthened entering the second quarter, and we continued executing against our cost reduction and operational efficiency initiatives. Our focus remains on disciplined execution, margin improvement, liquidity management, and building long-term shareholder value."
Liquidity and Capital ResourcesAs of March 31, 2026, the Company had $15.2 million of unrestricted cash and cash equivalents, $4.6 million drawn and $8.1 million of remaining availability on the borrowing base under its credit facility.
The Company expects to end the year between $15 million and $17 million in cash and cash equivalents. From a liquidity and cash flow perspective, the Company has made meaningful progress during the first quarter of 2026 and continued executing on its cost reduction and operational realignment initiatives. Adjusted EBITDA improved significantly compared to prior periods, with adjusted EBITDA loss improving from approximately negative $10 million in fourth quarter 2025 to approximately negative $5 million this quarter, reflecting the impact of actions taken to streamline operations, reduce spending and better align its cost structure with the current scale and focus of the business. The Company is on track to cross a key threshold which should result in the permanent transition from its historical cash burn to positive cash flow during the third quarter of 2026. From there, the Company expects to continue to deliver ongoing and increasing positive cash flow during its fourth quarter of 2026 and beyond.
In addition, the Company expects to have between $5 million and $10 million in available capacity under its ABL facility as of December 31, 2026.
Based on management's current operating plans and assumptions, including expected cash flows from the Drone Nerds business and availability under the Company's ABL credit facility, the Company believes its existing sources of liquidity are intended to support the ordinary-course operating needs of the Drone Nerds business. The Company may, however, require or seek additional capital to support strategic acquisitions and to address the Company's overall capital structure.
Unaudited Supplemental Combined Financial InformationFor purposes of this release, the Company defines "pro forma" as unaudited supplemental combined financial information.
The Company has provided unaudited supplemental financial information of the combined company in this press release. The following financial information combines XTI and Drone Nerds historical operating results as if the businesses had been operated together on a combined basis during prior periods. This financial information is intended to illustrate the current operating footprint of the Company following the acquisition of Drone Nerds and divestiture of the Company's Industrial IoT / Real-Time Location Systems business.
The unaudited supplemental combined financial information is not "pro forma" financial information as that term is used in Article 11 of Regulation S-X. The unaudited supplemental combined financial information was not prepared in accordance with Article 11 of Regulation S-X and differs from the unaudited pro forma condensed combined financial information included in the Current Report on Form 8-K/A filed with the SEC on February 9, 2026 (the "Pro Forma 8-K Filing"), which was prepared in accordance with Article 11 of Regulation S-X. The unaudited supplemental combined financial information was not prepared in accordance with Article 11 of Regulation S-X and is presented for illustrative purposes to assist investors in understanding the operational performance of the combined business, timing and operational impact of the acquisition, and integration of the combined business, and should not be considered a substitute for the pro forma financial information included in the Company's prior filings prepared in accordance with Article 11 of Regulation S-X.
Consequently, the unaudited supplemental combined financial information is intentionally different from, but does not supersede, the pro forma financial information set forth in the Pro Forma 8-K Filing or the pro forma financial information set forth in the Company's most recent annual report on Form 10-K
In addition, the unaudited supplemental combined financial information does not purport to indicate the results that actually would have been obtained had the companies been operated together during the periods presented, or which may be realized in the future. The unaudited supplemental combined financial information has no impact on XTI's or Drone Nerds' previously reported consolidated balance sheets or statements of operations, cash flows or equity.
XTI Aerospace, Inc. and SubsidiariesPro Forma(1) Combined Financial Data(Unaudited)
For the Three Months Ended
March 31,
2026(Actual)
2025(Pro Forma)
(in thousands, except percentages)
Amount
Amount
$ Change
% Change
Revenues
$
27,696
$
30,587
$
(2,891)
(9)
%
Gross profit
5,146
7,228
(2,082)
(29)
%
Gross profit %
18.6
%
23.6
%
(5.0)
%
(21)
%
Net loss from continuing operations
(31,746)
(7,265)
(24,481)
(337)
%
(1) For information on unaudited supplemental combined financial information presented, see the section titled "Unaudited Supplemental Combined Financial Information" in this press release.
The unaudited supplemental combined financial information excludes non-recurring transaction-related costs associated with the Drone Nerds acquisition.
Conference Call and Webcast (Live Q&A Format) The Company will post prepared remarks to the Investor Relations section of its website before the market opens on Thursday, May 14, 2026. These remarks are intended to provide additional detail and context regarding the Company's financial results and business update.
The Company will host a live webcast on Thursday, May 14, 2026 at 3:30 PM CT (4:30 PM ET), which will consist of a video-based question and answer session with Scott Pomeroy, Chief Executive Officer, Jeremy Schneiderman, Chief Executive Officer of Drone Nerds, and Brooke Turk, Chief Financial Officer. As part of this format, prepared remarks will not be read but will be available in the Investor Relations section of the Company's website at xtiaerospace.com under "IR News & Events."
Investors and analysts are invited to participate and may register in advance using this link: XTI Aerospace May 14 Earnings Webcast. The registration link is also available in the "Investor Relations" section of the Company's website under "IR News & Events." Dial-in information will be included upon registration.
The replay of the event will be publicly available to all investors in the Investor Relations section, under "IR News & Events" section of the Company's website at xtiaerospace.com following the conclusion of the question and answer session and will remain available for 30 days.
About XTI Aerospace, Inc. XTI Aerospace, Inc. (NASDAQ:XTIA) is an aerospace company providing unmanned aircraft systems ("UAS") solutions through its commercial drone solutions division, operated through Drone Nerds, LLC and two development-stage divisions focused on autonomous defense systems and domestic manufacturing of unmanned systems components designed to support federal procurement and sourcing requirements. XTI's commercial drone solutions business provides hardware distribution, training, service, repair, and lifecycle support to enterprise, public safety and government customers.
XTI Aerospace is headquartered in Addison, Texas. For more information about XTI, please visit xtiaerospace.com and follow XTI on LinkedIn, Instagram, X, and YouTube.
Cautionary Statement Regarding Forward-Looking StatementsThis press release contains certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact contained in this press release are forward-looking statements.
Forward-looking statements may be identified by words such as "believe," "continue," "could," "would," "will," "expect," "intend," "plan," "target," "estimate," "project," or similar expressions. These statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied. Such risks include, but are not limited to, market adoption, regulatory requirements, supply chain conditions, technological development, integration of the acquired businesses, the Company's liquidity and ability to access additional capital on acceptable terms or at all, the Company's negative stockholders' equity and the sufficiency of its capital resources, and changes in applicable laws or regulations, customer demand variability and seasonal purchasing patterns, the Company's ability to achieve projected gross margins and operating cost reductions, working capital timing and inventory management, the outcome of pending legal proceedings involving the Company and its subsidiaries, the Company's ability to maintain relationships with key suppliers, restrictions and covenants under the Company's ABL credit facility, risks related to the Company's development-stage ADS and ATM divisions which have not generated revenues, and the potential for significant non-cash charges related to changes in the fair value of warrant liabilities as well as the other risks and uncertainties described in the Company's filings with the SEC. XTI undertakes no obligation to update any forward-looking statements to reflect subsequent events or circumstances, except as required by applicable law. Readers are encouraged to review the risk factors described in XTI's filings with the SEC, including its most recent Annual Report on Form 10-K and subsequent filings.
Non-GAAP Measures:This press release contains certain financial measures that are not recognized under generally accepted accounting principles in the United States ("GAAP"). XTI uses earnings before interest, income taxes, depreciation amortization ("EBITDA") and Adjusted EBITDA and important supplemental measures of the Company's operating performance.
A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures for historical periods is provided in Schedule 1. As noted above under "2026 Financial Outlook and Guidance," the Company is unable to provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP measures without unreasonable efforts due to the inherent difficulty in forecasting and quantifying certain reconciling items, including, without limitation, changes in the fair value of warrant liability.
The Company's 2026 financial outlook is based on management's current expectations and assumptions regarding customer demand, product availability, gross margin trends, operating cost levels, and the timing of working capital normalization. These targets are forward-looking statements and are subject to the risks and uncertainties described below and in the Company's filings with the U.S. Securities and Exchange Commission (the "SEC"), including with respect to pending legal proceedings, liquidity, the Company's capital structure and the other matters described under "Cautionary Statement Regarding Forward-Looking Statements" below.
The Company has not provided a reconciliation of forward-looking Adjusted EBITDA or other forward-looking non-GAAP measures to the most directly comparable GAAP financial measures because certain reconciling items, including changes in the fair value of warrant liability and other items, depend on future events outside the Company's control and cannot be reasonably predicted or determined without unreasonable efforts. The variability of these items could have a significant and potentially unpredictable impact on future GAAP results.
Contacts:
General inquiries:Email: [email protected]Web: https://xtiaerospace.com/contact
Investor Relations:Dave Gentry, CEORedChip Companies, Inc.Phone: 1-407-644-4256Email: [email protected]
XTI Aerospace, Inc. and SubsidiariesConsolidated Statements of Operations(In thousands, except per share data)(Unaudited)
For the Three Months Ended
March 31,
2026
2025
Revenues
$
27,696
$
—
Cost of Revenues
22,550
—
Gross Profit
5,146
—
Operating Expenses
Research and development
1,197
1,124
Sales and marketing
2,363
275
General and administrative
11,746
6,796
Amortization of intangible assets
230
8
Total Operating Expenses
15,536
8,203
Loss from Operations
(10,390)
(8,203)
Other (Expense) Income
Interest expense, net
(154)
(217)
Loss on extinguishment of debt
—
(421)
Warrant issuance expense
—
(2,016)
Change in fair value of warrant liability
(21,447)
503
Other income (expense), net
245
(344)
Total Other (Expense) Income
(21,356)
(2,495)
Loss from continuing operations before income taxes
(31,746)
(10,698)
Income tax benefit
—
15
Net loss from continuing operations, net of tax
(31,746)
(10,683)
Loss from discontinued operations, net of tax
(3,252)
