XTI Aerospace Reports Third Quarter 2026 Results
XTI Aerospace, Inc. (XTIA) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 XTI Aerospace Reports Third Quarter 2026 Results FORT LAUDERDALE, Fla., Nov. 12, 2026 /PRNewswire/ -- XTI Aerospace, Inc. (Nasdaq: XTIA) (“XTI Aerospace,” “XTI,” or the “Company”), parent company of Drone Nerds, LLC, (“Drone Nerds”), a leading drone solutions platfor
Facts are quoted from the filing text and checked against it.
How this was made
The 30-second read
Why it matters
The reaffirmed guidance and turnaround to positive adjusted EBITDA may attract short‑term buying interest, though execution risk remains.
Market read
Primary earnings disclosure for a micro‑cap with new guidance; modest trading relevance.
What to watch
Potential volatility from Section 232 tariff policy and the success of new drone offerings.
XTI Aerospace reports Q3 2026 revenue of $35,314 thousand on a supplemental combined basis, up 46 percent year over year, with Adjusted EBITDA of $1,579 thousand and a GAAP net income of $26,002 thousand driven largely by a warrant liability fair value line; full-year 2026 outlook reiterated
Revenue grew sharply on the supplemental combined basis and Adjusted EBITDA turned positive, with G&A cut to 29.2 percent of sales. However, the quarter's 21.7 percent gross margin includes one-time tariff recovery benefits (16.0 percent excluding them), the GAAP net income depends on a $32,023 thousand change in fair value of warrant liability, cash fell to $5,657 thousand, nine-month operating cash outflow was $19,003 thousand, and the cautionary statement lists going concern and Nasdaq listing as risks.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenues, three months ended Sep 30 (supplemental combined, unaudited)other | $35.31M | 8.8% | 46.1% |
| Cost of revenues, three months ended Sep 30 (supplemental combined)other | $27.64M | – | 44 % |
| Gross profit, three months ended Sep 30 (supplemental combined)other | $7.68M | – | 53 % |
| Gross profit as a percentage of revenue, three months ended Sep 30, inclusive of one-time benefitsother | approximately 21.7% | – | – |
| Gross profit margin excluding nonrecurring amounts, three months ended Sep 30non-GAAP | 16.0% | – | – |
| Pro forma gross margin, three months ended Sep 30 (supplemental combined reconciliation table)other | 22 % | – | – |
| Operating expenses, three months ended Sep 30 (supplemental combined)other | $12.68M | – | (26)% |
| Loss from operations, three months ended Sep 30 (supplemental combined)other | −$5.00M | – | (59)% |
| Other expense, net, three months ended Sep 30 (supplemental combined, as printed)other | 31.67M | – | 2963 % |
| Pro forma net income (loss) from continuing operations, three months ended Sep 30 (supplemental combined)other | $26.68M | – | (340)% |
| Pro Forma Adjusted EBITDA, three months ended Sep 30 (supplemental combined)non-GAAP | $1.58M | – | (128)% |
| Pro Forma Adjusted EBITDA margin, three months ended Sep 30non-GAAP | 4 % | – | – |
| Adjusted EBITDA, three months ended Sep 30 (highlights section)non-GAAP | $1.6M | – | – |
| Adjusted EBITDA, three months ended Sep 30 (Schedule 1 reconciliation, company EBITDA basis)non-GAAP | $1.58M | – | – |
| EBITDA, three months ended Sep 30 (Schedule 1)non-GAAP | $27.23M | – | – |
| Revenues, three months ended Sep 30 (GAAP, Statements of Operations)GAAP | $35.31M | – | – |
| Gross profit, three months ended Sep 30 (GAAP)GAAP | $7.68M | – | – |
| Total operating expenses, three months ended Sep 30 (GAAP)GAAP | $12.68M | – | – |
| General and administrative expense, three months ended Sep 30 (GAAP)GAAP | $10.32M | – | – |
| Sales and marketing expense, three months ended Sep 30 (GAAP)GAAP | $1.81M | – | – |
| Loss from operations, three months ended Sep 30 (GAAP)GAAP | −$5.00M | – | – |
| Change in fair value of warrant liability, three months ended Sep 30 (GAAP, Other Income)GAAP | 32.02M | – | – |
| Net income from continuing operations, three months ended Sep 30 (GAAP)GAAP | $26.68M | – | – |
| Net income attributable to XTI Aerospace, Inc., three months ended Sep 30 (GAAP)GAAP | $26.00M | – | – |
| Net income per diluted share, three months ended Sep 30 (GAAP)GAAP | $0.19 | – | – |
| Net income per basic share, three months ended Sep 30 (GAAP)GAAP | $0.68 | – | – |
| Revenues, nine months ended Sep 30 (supplemental combined, unaudited)other | $95.46M | – | 20 % |
| Cost of revenues, nine months ended Sep 30 (supplemental combined)other | $76.99M | – | 25 % |
| Gross profit, nine months ended Sep 30 (supplemental combined)other | $18.47M | – | 1 % |
| Pro forma gross margin, nine months ended Sep 30 (supplemental combined)other | 19 % | – | – |
| Operating expenses, nine months ended Sep 30 (supplemental combined)other | $42.94M | – | 13 % |
| Loss from operations, nine months ended Sep 30 (supplemental combined)other | −$24.47M | – | 24 % |
| Pro forma net loss from continuing operations, nine months ended Sep 30 (supplemental combined)other | −$5.92M | – | (81)% |
| Pro Forma Adjusted EBITDA, nine months ended Sep 30 (supplemental combined)non-GAAP | −$8.24M | – | (28)% |
| Pro Forma Adjusted EBITDA margin, nine months ended Sep 30non-GAAP | (9)% | – | – |
| Adjusted EBITDA, nine months ended Sep 30 (Schedule 1, company EBITDA basis)non-GAAP | −$8.24M | – | – |
| Net loss from continuing operations, nine months ended Sep 30 (GAAP)GAAP | −$5.92M | – | – |
| Net loss attributable to XTI Aerospace, Inc., nine months ended Sep 30 (GAAP)GAAP | −$12.02M | – | – |
| Net loss per diluted share, nine months ended Sep 30 (GAAP)GAAP | $(0.32) | – | – |
| Net cash used in operating activities, nine months ended Sep 30 (GAAP)GAAP | −$19.00M | – | – |
Full year 2026 outlook
- Revenue$125 million to $130 million
- Gross margin17 percent to 19 percent
- NoteOutlook reiterated in the Q3 2026 release
- NoteAssumes continued access to the asset-based credit facility and no material further changes in tariff policy
- NoteThe company states it cannot provide a reconciliation of forward-looking non-GAAP measures to GAAP measures without unreasonable efforts
Capital returns
- No share repurchases or common dividends are reported in the filing.
- Preferred stock dividends of $42 thousand for the nine months ended Sep 30, 2026, compared with $29 thousand for the nine months ended Sep 30, 2025.
- Restructured $4.7 million of promissory notes that had previously been in default.
What drove it
- Company states Q3 revenue was partially driven by September demand ahead of Section 232 tariffs implemented this year.
- Company states the gross profit margin of approximately 21.7% is inclusive of one-time benefits, primarily relating to tariff recoveries; excluding the nonrecurring amounts, the gross profit margin was 16.0%.
- Company states G&A was reduced to 29.2% of sales from 39.2% in the first six months of 2026, through cost realignment including headcount reductions, office footprint consolidation, and termination of non-core consulting, vendor and software contracts.
- Severance and restructuring charges of $817 thousand were added back in the Q3 Pro Forma Adjusted EBITDA reconciliation.
- The GAAP net income line includes a $32,023 thousand change in fair value of warrant liability, which the company excludes in arriving at Adjusted EBITDA.
- Company states that the strategic pivot to focus on Drone Nerds is substantially complete and that the XTI aircraft business has been discontinued.
- Inpixon results are excluded and reflected in discontinued operations, per the highlights section.
Concerns
- The cautionary statement lists the company's ability to continue as a going concern and its ability to maintain the Nasdaq listing of its common stock among risks.
- The cautionary statement lists the potential for significant non-cash charges related to changes in the fair value of warrant liabilities.
- Cash of $5,657 thousand at Sep 30, 2026 compares with nine-month operating cash outflow of $(19,003) thousand.
- Q3 gross margin of approximately 21.7% includes one-time benefits; excluding them, the margin is 16.0%, compared with the full-year 2026 gross margin outlook of 17 percent to 19 percent.
- Nine-month GAAP net loss from continuing operations was $(5,921) thousand, and nine-month GAAP net loss per diluted share was $(0.32).
- The cautionary statement references potential conflicts of interest arising from the Interim Chief Executive Officer's economic interest in the holders of the company's acquisition-related notes.
- The cautionary statement references pending regulatory inquiries and proceedings and pending legal proceedings involving the company and its subsidiaries.
- The ATM division is described in the cautionary statement as having not generated revenues.
- The filing states that the company's outlook assumes continued access to its asset-based credit facility.
- The cautionary statement references restrictions and covenants under the ABL credit facility.
What to watch
- Whether Q4 2026 revenue and gross margin land within the reiterated full-year ranges of $125 million to $130 million and 17 percent to 19 percent, given Q3 gross margin excluding nonrecurring amounts was 16.0%.
- Whether the company reaches positive ongoing operating cash flows in Q4 2026, as stated by management.
- Cash balance trend from $5,657 thousand and use of the $11.9 million borrowing base availability.
- Continued access to the asset-based credit facility, which the outlook assumes.
- Changes in the fair value of the warrant liability, which drove a $32,023 thousand line in Q3 GAAP other income.
- Maintenance of the Nasdaq listing and the status of the going concern language in the cautionary statement.
- Status of the $4.7 million restructured promissory notes and the cross-default waiver from JPMorgan Chase Bank, N.A.
- Sustainability of the G&A ratio at 29.2% of sales following the headcount, office and contract reductions.
- Revenue contribution from the new offerings the company named: AirSight partnership, ABZ Innovation C30 cleaning drone, and Evolver DFR program.
Balance sheet and cash flow
- Unrestricted cash and cash equivalents of $5.7 million as of Sep 30, 2026 (balance sheet: $5,657 thousand, compared with $16,696 thousand at Dec 31, 2025).
- $11.9 million of remaining availability on the borrowing base under the credit facility at Drone Nerds.
- Asset-based revolving line of credit of $5,928 thousand at Sep 30, 2026 (no balance at Dec 31, 2025 printed).
- Warrant liability of $24,459 thousand at Sep 30, 2026, compared with $22,561 thousand at Dec 31, 2025.
- Total assets of $69,871 thousand at Sep 30, 2026, compared with $81,246 thousand at Dec 31, 2025.
- Total stockholders' equity of $5,831 thousand at Sep 30, 2026, compared with $17,738 thousand at Dec 31, 2025.
- Total equity of $16,985 thousand at Sep 30, 2026, compared with $27,743 thousand at Dec 31, 2025.
- Net cash used in operating activities of $(19,003) thousand for the nine months ended Sep 30, 2026, compared with $(30,356) thousand for the nine months ended Sep 30, 2025.
- Net cash used in investing activities of $(922) thousand for the nine months ended Sep 30, 2026, compared with $(126) thousand for the nine months ended Sep 30, 2025.
- Net cash provided by financing activities of $9,362 thousand for the nine months ended Sep 30, 2026, compared with $58,568 thousand for the nine months ended Sep 30, 2025.
- Average monthly operating cash outflows of ADS and corporate operations (excluding Drone Nerds) were approximately $1.1 million per month in Q3 2026, down approximately 42% from Q2 and 62% from Q1, as stated by the company.
- The company states that it expects a transition to positive ongoing operating cash flows during Q4 2026.
Analysis
XTI Aerospace reported Q3 2026 results that are difficult to compare with the prior year because the headline table is an unaudited supplemental combined presentation of XTI and Drone Nerds, not the GAAP statements. On that combined basis, revenue was $35,314 thousand, up 46.1% from $24,164 thousand in the prior-year quarter and up 8.8% sequentially, and the company attributes part of the quarter's revenue to September demand ahead of Section 232 tariffs. On the GAAP statements, the company reports Q3 2026 revenue of $35,314 thousand against a dash for Q3 2025, because the GAAP statements carry the Drone Nerds results only from the acquisition onward. The company's own explanation of the 21.7% gross margin is that it includes one-time benefits, primarily tariff recoveries; excluding them the margin was 16.0%. Gross profit on the combined basis rose 53% to $7,677 thousand, while the nine-month gross profit was $18,466 thousand, up 1% from the prior-year combined $18,306 thousand as margin compressed to 19% from 23%.
Cost discipline is the most visible change. Combined operating expenses fell 26% to $12,675 thousand from $17,189 thousand, and the company states that G&A fell to 29.2% of sales from 39.2% in the first six months of 2026, attributing this to headcount reductions, office consolidation and the termination of non-core contracts. Combined Pro Forma Adjusted EBITDA was $1,579 thousand, a 4% margin, compared with $(5,592) thousand a year earlier; the highlights section states that the figure compares with negative $4.9 million in Q2 2026. Schedule 1 presents the same $1,579 thousand against a prior-year $(7,536) thousand on the company's EBITDA basis, so the prior-year figure differs between the two reconciliations and both should be read with their basis. Q3 GAAP net income was $26,002 thousand attributable to XTI, but the GAAP statement shows a $32,023 thousand change in fair value of warrant liability within other income, which the company removes in its Adjusted EBITDA; the reader should weigh the quarter's profit against that line rather than against operating results. GAAP diluted EPS was $0.19 for the quarter, against $(0.61) a year earlier, and nine-month GAAP net loss per diluted share was $(0.32).
Balance sheet and liquidity are the main constraints in the filing. Cash and cash equivalents were $5,657 thousand at Sep 30, 2026, down from $16,696 thousand at Dec 31, 2025, and nine-month operating cash outflow was $(19,003) thousand. Management reports average monthly cash outflows of ADS and corporate operations of about $1.1 million in Q3, down about 42% from Q2 and 62% from Q1, and states that it expects positive ongoing operating cash flow in Q4 2026. The company also reports $11.9 million of remaining borrowing base availability at Drone Nerds, an asset-based revolving line of credit balance of $5,928 thousand, a warrant liability of $24,459 thousand, and total stockholders' equity of $5,831 thousand. The company restructured $4.7 million of promissory notes that had been in default and obtained a cross-default waiver from JPMorgan Chase Bank, N.A. on its revolving credit facility. Its cautionary statement lists going concern, Nasdaq listing maintenance and access to the ABL facility among risks.
Guidance was reiterated, not changed: full-year 2026 revenue of $125 million to $130 million and gross profit of 17 percent to 19 percent of revenue. The filing does not print a prior-year figure for the full-year range or any operating expense or tax guidance, so no guidance comparison is made. Set against the nine-month results of $95,459 thousand revenue and 19% pro forma gross margin, reaching the revenue range would require the remaining quarter to carry the balance of the range, and reaching the margin range would depend on whether the quarter's gross margin, which the company says excluding one-time items was 16.0%, moves into the range. Management's commentary on the outlook is that it assumes continued credit facility access and no material further tariff changes. The company also states that it cannot reconcile forward non-GAAP measures to GAAP because of warrant liability fair value changes.
The disclosure is transparent about the reshaping of the business: the company states that the XTI aircraft business has been discontinued, the Inpixon results are reflected in discontinued operations, and the ATM division has not generated revenue. For investors the central questions are whether the cost base reductions hold in Q4 without tariff-related gross margin support, whether operating cash flow turns positive as management expects, and how the company funds operations if cash continues to decline from $5,657 thousand.
Management, verbatim
Our strategic pivot to focus on our Drone Nerds business is substantially complete,
Jeremy Schneiderman, Interim Chief Executive Officer
The growth opportunities we see across our portfolio combined with continued disciplined expense management is expected to lead to the transition to positive ongoing operating cash flows during the fourth quarter of 2026.
Jeremy Schneiderman, Interim Chief Executive Officer
Not in the filing
stated, not guessed- Q2 2026 revenue in dollars was not printed; only the 8.8% sequential change is given.
- Q2 2026 gross profit, operating expenses and other quarterly figures for the prior quarter were not printed as values.
- GAAP prior-year (Q3 2025) revenue and gross profit are shown as a dash in the statements; no figure is printed.
- The GAAP statements do not print a year-over-year percentage change for any line; supplemental combined percentage changes are not applied to GAAP lines.
- No segment or business-line revenue breakdown is printed; the filing does not split revenue between Drone Nerds and other businesses.
- Third-quarter operating cash flow was not printed; cash flow is given only for the nine-month period.
- Cash balance at Q3 2025 and the Q2 2026 cash balance were not printed.
- Prior-period guidance was not provided, so no guidance comparison is made.
- Full-year 2026 operating expense, tax rate and net income guidance were not printed.
- The percentage change of the GAAP interest expense line and other GAAP other income lines year over year is not printed.
- Share repurchases and common dividends were not reported in the filing.
- Q3 2025 gross margin on the GAAP basis and on the supplemental combined basis (apart from the 21% pro forma margin printed in the reconciliation table) was not printed.
- Discontinued operations per-share and revenue figures for Q2 2026 were not printed.
- Weighted average share count changes year over year are not analyzed beyond the printed figures.
- The 46% combined revenue change in the reconciliation table and 46.1% in the highlights are both printed; the difference is not explained in the filing.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. 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
XTI Aerospace, a Nasdaq‑listed drone solutions provider, disclosed its Q3 2026 financials and reaffirmed its 2026 outlook in an SEC Form 8‑K.
Ticker impact
XTI Aerospace filed its 8‑K reporting Q3 2026 results and reaffirmed full‑year 2026 revenue guidance of $125‑$130 million.
likely modest upside as investors price in reaffirmed cash flow outlook
Quarterly revenue grew 46% YoY, adjusted EBITDA turned positive and the firm reiterated a higher‑end revenue target, indicating improved operating performance.
Market effects
Positive signal for the commercial drone and enterprise UAV sector as XTI’s pivot to Drone Nerds shows demand growth.
Limited to U.S. investors; no broader regional effect.
Minimal global impact beyond niche drone technology markets.
Counterpoint
The company’s recent restructuring and cash burn could still pose execution risk despite the guidance.
Key entities
- ExecutiveJeremy Schneiderman
Interim CEO who commented on the strategic pivot to Drone Nerds.
- PartnerAirSight
Drone detection software provider partnered with XTI to expand offerings.
