AIRO Group Holdings, Inc. (AIRO): Results of Operations and Financial Condition
AIRO Group Holdings, Inc. (AIRO) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 AIRO Reports Second Quarter 2026 Results MCLEAN, Va. - AIRO Group Holdings, Inc. (NASDAQ: AIRO) (“AIRO” or the “Company”), a global leader in advanced aerospace and defense technologies, today announced financial results for the second quarter ended June 30, 2026. (A
How this was made
The 30-second read
Why it matters
Traders can update models around revenue growth, gross margin sustainability, and the credibility of backlog conversion into revenue over the next 12 months, using the reiterated full-year guidance and Adjusted EBITDA range.
Market read
Fresh quarterly financials plus reiterated 2026 revenue growth and Adjusted EBITDA guidance provide a concrete basis for re-pricing expectations and positioning into upcoming quarters.
What to watch
The cash balance jump to a preliminary ~$56M as of July 31 is not audited, and the backlog figure excludes US backlog that is expected to increase later, which can complicate near-term forecasting.
AIRO Reports Second Quarter 2026 Results
Revenue grew 76% to $43.2 million, gross margin expanded to 64%, and the Company generated operating income of $1.7 million. However, AIRO reported a net loss of $(2) million, Avionics and Training underperformed, and full-year Adjusted EBITDA guidance remains in the negative mid- to high-teens dollar range.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $43.2 million | – | 76% |
| Cost of revenueGAAP | $ 15,493 (in thousands) | – | – |
| Gross profitGAAP | $27.7 million | – | 84% |
| Gross profit marginGAAP | 64% | – | – |
| Research and development expenseGAAP | $ 7,576 (in thousands) | – | – |
| Sales and marketing expenseGAAP | $ 2,355 (in thousands) | – | – |
| General and administrative expenseGAAP | $ 16,102 (in thousands) | – | – |
| Total operating expensesGAAP | $ 26,033 (in thousands) | – | – |
| Income from operationsGAAP | $1.7 million | – | – |
| Income from operations marginGAAP | 4% | – | – |
| Interest income (expense), netGAAP | $ 208 (in thousands) | – | – |
| Gain on extinguishment of debtGAAP | - | – | – |
| Other income (expense), netGAAP | $ 206 (in thousands) | – | – |
| Total other incomeGAAP | $ 414 (in thousands) | – | – |
| Income before income tax expenseGAAP | $ 2,068 (in thousands) | – | – |
| Income tax expenseGAAP | $ (4,062 ) (in thousands) | – | – |
| Net lossGAAP | $(2) million | – | – |
| Net loss marginGAAP | (4.6)% | – | – |
| Net loss per share – basicGAAP | $ (0.06 ) | – | – |
| Net loss per share – dilutedGAAP | $ (0.06 ) | – | – |
| EBITDAnon-GAAP | $ 5,065 (in thousands) | – | – |
| Adjusted EBITDAnon-GAAP | $6.8 million | – | 45% |
| Adjusted EBITDA Marginnon-GAAP | 15.8% | – | – |
| Drone backlogother | $163 million | 9% | – |
full-year 2026 outlook
- Revenue15% to 25% year over year
- NoteAdjusted EBITDA guidance in the negative mid- to high-teens dollar range
- NoteThe Company expects the majority of Drone backlog to convert to revenue over the next 12 months.
What drove it
- Revenue growth reflected stronger-than-expected performance in the Company’s Drones segment.
- Gross-margin improvement was primarily driven by a favorable product mix shift back toward higher-margin drone products.
- Profitability growth reflected higher revenue, improved gross margins, and the absence of costs associated with the Company’s initial public offering incurred during the prior-year period.
- AIRO achieved Blue UAS certification for the RQ-35, introduced the RQ-70 long-range ISR platform, and advanced its next-generation cargo and ISR aircraft.
Concerns
- Drones segment strength was partially offset by underperformance in the Company’s Avionics and Training businesses.
- The Company reported a net loss of $(2) million, compared with net income of $5.9 million.
- Adjusted EBITDA Margin was 15.8%, compared with 19.1% in the prior-year period.
- Revenue recognition may vary meaningfully across quarters depending on contract timing, production schedules and delivery milestones.
- Drone backlog excludes the Company’s U.S. backlog.
What to watch
- Conversion of the approximately $163 million Drone backlog, for which the Company expects the majority of revenue recognition over the next 12 months.
- Inclusion and expected meaningful increase from the Company’s U.S. backlog.
- Performance in the Avionics and Training businesses.
- The preliminary cash balance of approximately $56 million as of July 31, 2026.
- Progress toward full-year 2026 revenue growth expectations of 15% to 25% year over year and Adjusted EBITDA guidance in the negative mid- to high-teens dollar range.
Balance sheet and cash flow
- Cash totaled $25.9 million as of June 30, 2026.
- Restricted cash was $ 153 (in thousands) as of June 30, 2026.
- Accounts receivable, net was $ 46,167 (in thousands) as of June 30, 2026, compared with $ 12,385 (in thousands) as of December 31, 2025.
- Inventory was $ 14,514 (in thousands) as of June 30, 2026, compared with $ 11,639 (in thousands) as of December 31, 2025.
- Revolving lines of credit were $ 5,492 (in thousands) as of June 30, 2026.
- Current maturities of debt were $ 1,348 (in thousands) as of June 30, 2026.
- Long-term debt, net of current maturities was - as of June 30, 2026.
- The Company had a cash balance of approximately $56 million as of July 31, 2026. This amount is a preliminary estimate and has not been audited, reviewed, or compiled by the Company’s independent registered public accounting firm.
Analysis
AIRO reported a sharp acceleration in second-quarter revenue, with revenue of $43.2 million rising 76% from $24.6 million. Management attributed the growth to stronger-than-expected Drones segment performance, although this was partially offset by underperformance in Avionics and Training. Drone backlog was $163 million, up 9% compared to the first quarter of 2026, and the Company expects the majority of this backlog to convert to revenue over the next 12 months.
Product mix drove a substantial improvement in gross profitability. Gross profit was $27.7 million and gross margin was 64%, compared with 61% in the prior-year period and 27% in the first quarter of 2026. AIRO specifically attributed both sequential and year-over-year margin improvement to a shift back toward higher-margin drone products. Operating income was $1.7 million, compared with an operating loss of $(19.7) million in the prior-year period.
Despite operating profitability, AIRO recorded a net loss of $(2) million, versus net income of $5.9 million in the prior-year period. Adjusted EBITDA rose 45% to $6.8 million, while Adjusted EBITDA Margin was 15.8%, compared with 19.1% in the prior-year period. The release states that profitability growth reflected higher revenue, improved gross margins, and the absence of prior-year initial public offering costs.
Liquidity shifted during the quarter as cash totaled $25.9 million as of June 30, 2026, while accounts receivable increased to $ 46,167 (in thousands) from $ 12,385 (in thousands) as of December 31, 2025. Management said receivables increased primarily because of multiple late-quarter drone deliveries, and that payment of those deliveries was collected after quarter end. The Company cited a preliminary cash balance of approximately $56 million as of July 31, 2026, while cautioning that the figure is unaudited and not necessarily indicative of the full third-quarter cash balance.
AIRO reiterated its full-year 2026 revenue-growth expectation of 15% to 25% year over year and its full-year Adjusted EBITDA guidance in the negative mid- to high-teens dollar range. The guide leaves gross margin, operating expenses, and tax-rate assumptions undisclosed. Management also highlighted that government and defense contract timing, production schedules, and delivery milestones can cause revenue recognition to vary meaningfully across quarters.
Management, verbatim
The second quarter demonstrated the strength of our execution and momentum, with revenue growth of 76%, significant margin expansion, and Drone backlog growth of 9% to $163 million.
Joe Burns, Chief Executive Officer of AIRO
Based on this progress, we are reiterating our full-year 2026 revenue growth guidance of 15% to 25% year-over-year.
Joe Burns, Chief Executive Officer of AIRO
With growing customer demand, a strong Drone backlog, increasing engagement across U.S. and allied defense markets, and multiple growth initiatives underway, we believe AIRO is well positioned to create meaningful long-term shareholder value.
Dr. Chirinjeev Kathuria, Executive Chairman
Not in the filing
stated, not guessed- Revenue by Drones, Avionics, and Training segment
- Prior-quarter revenue, gross profit, operating income, net income, EPS, operating expenses, and Adjusted EBITDA
- Operating cash flow
- Free cash flow
- Capital expenditures
- Share repurchases
- Dividends
- A total-debt figure
- Full-year 2026 revenue dollar guidance
- Full-year 2026 gross-margin guidance
- Full-year 2026 operating-expense guidance
- Full-year 2026 tax-rate guidance
- Prior-quarter or prior-year Drone backlog amount
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
AIRO filed an 8-K (Item 2.02) with its Q2 2026 results and an attached earnings release (Exhibit 99.1).
Ticker impact
AIRO reported Q2 2026 results with 76% revenue growth to $43.2M, 64% gross margin, and reiterated 2026 revenue growth guidance of 15% to 25%.
Likely supportive for the stock if investors view backlog conversion and margin expansion as sustainable; otherwise could face skepticism around cash burn and defense delivery timing.
This is a primary-source 8-K with specific financial datapoints (revenue, margins, operating income, net loss) and explicit guidance ranges, which typically drive re-rating and positioning ahead of subsequent quarters.
Market effects
Reinforces demand and execution momentum in the drone and aerospace-defense segment, potentially supporting sentiment toward small-cap defense tech peers.
Limited direct regional spillover; primarily US defense procurement and allied market execution narrative.
Modest, as the disclosure is company-specific and not a global policy or procurement shift.
Counterpoint
Despite strong revenue growth and backlog, profitability remains fragile with a net loss and reliance on defense delivery milestones that can shift quarter to quarter.
Key entities
- companyAIRO Group Holdings, Inc.
Advanced aerospace and defense technology company reporting Q2 2026 results, backlog, and reiterated 2026 guidance.
- executiveJoe Burns
CEO quoted on execution momentum, Blue UAS certification for the RQ-35, and reiteration of full-year revenue growth guidance.
- executiveDr. Chirinjeev Kathuria
Executive Chairman quoted on demand, backlog, and positioning for long-term shareholder value.
