Miami, October 20th / PRNewswire / -- XTI Aerospace, Inc. (Nasdaq ticker: XTIA) ("XTI Aerospace", "XTI" or "the Company") is an aerospace and advanced technology platform company, as well as the parent company of Drone Nerds, LLC ("Drone Nerds"). Drone Nerds is a leading drone solutions platform for commercial, corporate, and government customers. The company today announced its financial results for the second quarter ending June 30, 2026, and updated its outlook for 2026.

Highlights of the second quarter of 2026 (excluding the performance data marked with Inpixon; related figures are included in the terminated business operations):

• Revenue of $32.4 million
• $5.6 million in gross profit
• Gross profit accounts for approximately 17% of revenue.

"The demand from enterprises and government buyers for enterprise-level drone solutions continues to grow, and as one of the leading providers of enterprise-level drones in the United States, we believe we are in a favorable position to seize this opportunity," said Jeremy Schneiderman, interim CEO of XTI Aerospace. "My focus is on building a well-disciplined organization, spending cautiously, and continuously executing stably. Importantly, the management team, sales team, and technical experts who have built this business are still in place and are committed to supporting our customers in the fields of public safety, government, energy, infrastructure, agriculture, and commercial markets."

"Although we are in a dynamic regulatory environment, including the tariffs under Section 232 that came into effect on September 3rd and other pending drone-related regulatory measures, our team remains focused on accelerating growth by strengthening our products, increasing marketing efforts, and maintaining strict cost management. This marks an exciting new chapter for the company. While we take a cautious approach to our outlook for the whole year, we are still confident in driving performance improvements and achieving sustainable growth."

Updated 2026 financial outlook and guidance:

• Revenues for the entire year of 2026 amounted to $125 million to $130 million.
• The gross profit margin for the entire year of 2026 is expected to be between 17% and 19%.

The company stated that the aforementioned outlook assumes continued access to its asset-based credit line support, as well as no significant further changes in tariff policies, and is subject to the risks mentioned in the 'Cautionary Statement Regarding Forward-Looking Statements' below.

Second Quarter of 2026 and Recent Matters:

• Announces the addition of XREAL, xbx, and a01 to the product line that already includes Drone Nerds; this is a lightweight augmented reality (AR) screen projection glasses.
• Establish a partnership with DBOX, and through Drone Nerds's enterprise solution portfolio, expand access to autonomous drone landing solutions in the US public safety and government markets.
• Dr and Allan Evans have been appointed as Chairman of the Board of Directors, while Jeremy Schneiderman has been appointed as Interim Chief Executive Officer, further enhancing the company's expertise in the enterprise-level drone market in the United States.
• A committee composed of independent directors, with the assistance of an independent legal advisor, completed an internal review of matters related to the company's former CEO and corporate governance. The conclusion was that no financial misstatements were found.

Liquidity and Corporate Cost Reduction

As of June 30, 2026, the company held $7.2 million in unrestricted cash and cash equivalents, and under the credit arrangement of Drone Nerds, there was still an available borrowing limit of $9.1 million.

During the second quarter, the company took significant measures to reduce the number of employees and related compensation in its corporate and ADS businesses, consolidate office spaces, and terminate non-core consulting, supplier, and software contracts. According to preliminary data, in the third quarter, the average monthly operating cash outflow for the company's ADS and corporate businesses (excluding Drone Nerds) was approximately $1.1 million, which is a decrease of about 42% compared to the second quarter and a decrease of 62% compared to the first quarter.

As of September 30, 2026, according to preliminary data, the company holds $5.1 million in unrestricted cash and cash equivalents. The company continues to reduce its monthly cash expenditure and is expected to generate net cash flow from operating activities in the fourth quarter of 2026.

Unaudited supplementary consolidated financial information

For the purposes of this press release, "supplementary consolidated" financial information refers to the unaudited supplementary consolidated financial information described below.

In this press release, the company provides unaudited supplementary financial information that presents the situation of the combined entity. The following financial information XTI and Drone Nerds's historical operating results, assuming that the two companies have been operating as a consolidated entity during the preceding period. This information is intended to illustrate the company's current business profile after the acquisition of Drone Nerds and the divestiture of its Industrial Internet of Things/Real-Time Locationing Systems business.

The unaudited supplementary consolidated financial information is not considered “pro forma” financial information as defined in Article 11 of the S-X Regulations. This information has not been prepared in accordance with Article 11 of the S-X Regulations, and it differs from the unaudited pro forma consolidated financial information presented in the company’s 8-K/A filing submitted to the U.S. Securities and Exchange Commission on February 9, 2026. The latter was prepared in compliance with Article 11 of the S-X Regulations and provides annual results as of December 31, 2024, as well as nine-month results as of September 30, 2025, which includes the period covered by this press release. However, those periods are not separately highlighted in the 8-K/A filing. The unaudited supplementary consolidated financial information is intended solely to assist investors in understanding the operating performance of the consolidated business, the timing of the acquisition, and its operational impacts, as well as the integration of the consolidated business. It should not be regarded as a substitute for the pro forma financial information that the company has previously prepared in accordance with Article 11 of the S-X Regulations and included in its regulatory filings.

Therefore, the unaudited supplementary consolidated financial information differs from the pro forma financial information presented in Pro Forma 8- K Filing, as well as the pro forma financial information in the company's most recent 10-K annual report, although it does not replace the latter.

In addition, the unaudited supplementary consolidated financial information is not intended to indicate what results would actually be achieved if the two companies were to operate jointly during the stated period, nor what results may be achieved in the future. This information will not affect the consolidated balance sheets, income statements, cash flow statements, or statements of equity previously disclosed by XTI or Drone Nerds.

Unaudited supplementary consolidated financial information does not include one-time transaction costs related to the acquisition of Drone Nerds.

Teleconference

The company will not hold a conference call regarding the second-quarter performance. It is currently planned to resume conference calls when the third-quarter performance for 2026 is released.

Regarding XTI Aerospace, Inc.

XTI Aerospace, Inc. ("XTI") (Nasdaq ticker: XTIA) focuses on creating leading platforms for commercial and government drones in the rapidly growing drone systems industry. Through its subsidiaries Drone Nerds, LLC, and XTI, it provides support to enterprises and government clients in areas such as public safety, agriculture, construction, and energy, covering the entire lifecycle of drone projects, including hardware procurement and deployment, training, services, maintenance, as well as its proprietary Always Flying™ programs. The company's established customer base in the United States and its reputation as a trusted solution provider make it a market entry partner for drone manufacturers and software developers looking to expand their presence in the U.S. market.

For more information, please visit xtiaerospace.com. Follow XTI on LinkedIn, Instagram, X, and YouTube.

Warning Statement Regarding Forward-Looking Statements

This press release contains certain “forward-looking statements” as defined by the U.S. 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. Except for statements regarding historical facts in this press release, all other statements are forward-looking statements.

Forward-looking statements can be identified by words such as “believe”, “continue”, “may”, “will”, “expect”, “intend”, “plan”, “goal”, “estimate”, “predict”, and similar expressions. These statements are subject to risks, uncertainties, and other factors, and may result in significant differences between actual outcomes and the explicitly or implicitly stated outcomes.Related risks include, but are not limited to: whether the company can be exempted from existing cross-defaults under its asset-based credit lines and restructure or repay promissory notes related to the acquisition before the expiration of the limited exemption period; noteholders may exercise their rights after 10 days' notice, and no later than December 31, 2026; whether lenders will refuse further loans or accelerate the repayment of outstanding borrowings; significant doubts regarding the company's ability to continue as a going concern; whether the company can maintain its listing status on NASDAQ for its common stocks; the impact of Section 232 tariffs and other trade measures; pending regulatory investigations and proceedings related to its Anzu Robotics subsidiaries; potential conflicts of interest that may arise from the temporary CEO's economic interests among the noteholders related to the acquisition; market acceptance, regulatory requirements, supply chain conditions, technology development, integration of acquired businesses, the company's liquidity, and the ability to obtain additional capital under acceptable terms or not at all; the company's negative shareholders' equity and insufficient capital resources; changes in applicable laws or regulations; fluctuations in customer demand and seasonal purchasing patterns; the company's ability to achieve expected gross margins and reduce operating costs; cash flow 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 obligations under the company's ABL credit arrangements; risks related to the contraction of the company's ADS business and the development of ATM business that has not yet generated revenue; significant non-cash expense risks related to changes in the fair value of warrant liabilities; and other risks and uncertainties mentioned in the documents submitted by the company to the U.S. Securities and Exchange Commission. The financial outlook and other forecasts in this press release are based on management's current expectations and assumptions and are particularly subject to the impacts of the aforementioned risks.Except as required by applicable laws, XTI does not assume any obligation to update any forward-looking statements to reflect subsequent events or circumstances. Readers are advised to refer to the risk factors disclosed in the documents submitted by XTI to the U.S. Securities and Exchange Commission, including its most recent 10-K annual report and subsequent filing documents.

Contact Information:

General inquiries:

Investor Relations: