XTIA · XTI Aerospace, Inc.

XTI Aerospace's Q1 2026 results reflect its strategic pivot to a drone-focused operating model post-Drone Nerds acquisition and Inpixon RTLS divestiture. Revenue of $27.7 million, primarily from UAS solutions via Drone Nerds, declined 9% from pro forma Q1 2025 levels due to product mix and seasonality, with Q1 typically the weakest quarter. Gross margin compressed to 18.6% from 23.6%, attributed to hardware-heavy sales; management anticipates expansion to 19-21% for full-year 2026 as enterprise services, training, and higher-margin solutions grow. Net loss widened to $31.7 million, driven by a $21.4 million non-cash warrant fair value loss, though adjusted EBITDA loss halved to ~$5 million from Q4 2025's ~$10 million via cost reductions and operational streamlining. Liquidity strengthened with $15.2 million cash, $8.1 million ABL availability under the new $20 million JPMorgan facility, and $7.4 million warrant exercise proceeds. Guidance signals confidence: ≥$160 million revenue, breakeven cash flow in Q3, year-end cash $15-17 million, and $5-10 million ABL availability. CEO Scott Pomeroy emphasized disciplined execution, margin improvement, and Drone Nerds' enterprise/government pipeline growth amid NDAA-compliant demand trends. Risks include liquidity needs for acquisitions and warrant volatility.