Second quarter 2026
Filed Oct 20, 2026XTI Aerospace reported $32.4 million of second-quarter revenue and updated full-year 2026 revenue guidance to $125 million to $130 million, while consolidated GAAP results included a $2.5 million net loss and the company disclosed liquidity and credit-facility risks.
Supplemental combined revenue increased 29% year over year to $32.449 million, but gross profit declined 7% and gross margin fell to 17.4% from 24.1%. Consolidated results remained loss-making, cash declined to $7.214 million at June 30, 2026, and the filing cites substantial doubt about the Company’s ability to continue as a going concern.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q2 2026 revenue (consolidated) (in thousands)GAAP | $32.45M | – | – |
| Six months ended June 30, 2026 revenue (consolidated) (in thousands)GAAP | $60.15M | – | – |
| Q2 2026 revenue (supplemental combined) (in thousands)other | $32.45M | – | 29 % |
| Q2 2026 cost of revenues (consolidated) (in thousands)GAAP | 26.81M | – | – |
| Six months ended June 30, 2026 cost of revenues (consolidated) (in thousands)GAAP | 49.36M | – | – |
| Q2 2026 gross profit (consolidated) (in thousands)GAAP | 5.64M | – | – |
| Six months ended June 30, 2026 gross profit (consolidated) (in thousands)GAAP | 10.79M | – | – |
| Q2 2026 gross profit (supplemental combined) (in thousands)other | 5.64M | – | (7 )% |
| Q2 2026 gross profit percentage (supplemental combined)other | 17.4 % | – | (28 )% |
| Q2 2026 research and development expense (in thousands)GAAP | 577K | – | – |
| Six months ended June 30, 2026 research and development expense (in thousands)GAAP | 1.77M | – | – |
| Q2 2026 sales and marketing expense (in thousands)GAAP | 1.98M | – | – |
| Six months ended June 30, 2026 sales and marketing expense (in thousands)GAAP | 4.34M | – | – |
| Q2 2026 general and administrative expense (in thousands)GAAP | 11.86M | – | – |
| Six months ended June 30, 2026 general and administrative expense (in thousands)GAAP | 23.60M | – | – |
| Q2 2026 merger and acquisition transaction costs (in thousands)GAAP | 90K | – | – |
| Six months ended June 30, 2026 merger and acquisition transaction costs (in thousands)GAAP | 90K | – | – |
| Q2 2026 amortization of intangible assets (in thousands)GAAP | 228K | – | – |
| Six months ended June 30, 2026 amortization of intangible assets (in thousands)GAAP | 458K | – | – |
| Q2 2026 total operating expenses (in thousands)GAAP | 14.72M | – | – |
| Six months ended June 30, 2026 total operating expenses (in thousands)GAAP | 30.26M | – | – |
| Q2 2026 loss from operations (in thousands)GAAP | −9.08M | – | – |
| Six months ended June 30, 2026 loss from operations (in thousands)GAAP | −19.47M | – | – |
| Q2 2026 net loss from continuing operations, net of tax (in thousands)GAAP | −850K | – | – |
| Six months ended June 30, 2026 net loss from continuing operations, net of tax (in thousands)GAAP | −32.60M | – | – |
| Q2 2026 net loss (in thousands)GAAP | −2.45M | – | – |
| Six months ended June 30, 2026 net loss (in thousands)GAAP | −37.45M | – | – |
| Q2 2026 net loss attributable to XTI Aerospace, Inc. (in thousands)GAAP | −2.75M | – | – |
| Six months ended June 30, 2026 net loss attributable to XTI Aerospace, Inc. (in thousands)GAAP | −38.02M | – | – |
| Q2 2026 net loss per share, basic and dilutedGAAP | $(0.07 ) | – | – |
| Q2 2026 loss per share from continuing operations, basic and dilutedGAAP | $(0.03 ) | – | – |
| Q2 2026 loss per share from discontinued operations, basic and dilutedGAAP | $(0.04 ) | – | – |
| Six months ended June 30, 2026 net loss per share, basic and dilutedGAAP | $(1.03 ) | – | – |
| Six months ended June 30, 2026 loss per share from continuing operations, basic and dilutedGAAP | $(0.90 ) | – | – |
| Six months ended June 30, 2026 loss per share from discontinued operations, basic and dilutedGAAP | $(0.13 ) | – | – |
| Six months ended June 30, 2026 net cash used in operating activities (in thousands)GAAP | −21.01M | – | – |
| Six months ended June 30, 2026 net cash used in investing activities (in thousands)GAAP | −864K | – | – |
| Six months ended June 30, 2026 net cash provided by financing activities (in thousands)GAAP | 12.13M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Full year 2026 outlook
- Revenue$125 million to $130 million
- Gross margin17 percent to 19 percent
- NoteExpected transition to positive net cash provided by operating activities during the fourth quarter of 2026.
What drove it
- The Company said demand for enterprise drone solutions continues to build across enterprise and government buyers.
- The quarter included the addition of XREAL xbx a01+ AR screen-casting glasses to Drone Nerds’ product lineup.
- Drone Nerds entered a partnership with DBOX to expand autonomous drone docking solutions in U.S. public-safety and government markets.
- The Company reduced corporate and ADS headcount and related compensation, consolidated its office footprint, and terminated non-core consulting, vendor and software contracts.
- The supplemental combined financial information excludes non-recurring transaction-related costs associated with the Drone Nerds acquisition.
Concerns
- Supplemental combined gross profit declined 7% to 5,643 (in thousands) and gross profit percentage declined to 17.4 % from 24.1 %.
- The Company reported a consolidated Q2 loss from operations of (9,082 ) (in thousands).
- Cash and cash equivalents declined to $7,214 (in thousands) as of June 30, 2026 from $16,696 (in thousands) as of December 31, 2025.
- The filing identifies substantial doubt about the Company’s ability to continue as a going concern.
- Risks include the ability to obtain a waiver of existing cross-defaults under the asset-based credit facility and to restructure or repay acquisition-related promissory notes before the limited waiver period expires, which may occur on ten days’ notice from noteholders and in any event no later than December 31, 2026.
- The outlook assumes continued access to the asset-based credit facility and no material further changes in tariff policy.
- The filing cites Section 232 tariffs that took effect on September 3, pending drone-related regulations, and pending regulatory inquiries and proceedings relating to Anzu Robotics.
What to watch
- Delivery against full-year 2026 revenue guidance of $125 million to $130 million and gross profit as a percentage of revenue of 17 percent to 19 percent.
- Whether operating-cost reductions support the expected transition to positive net cash provided by operating activities during the fourth quarter of 2026.
- Availability under the Drone Nerds credit facility, resolution of cross-defaults, and the required restructuring or repayment of acquisition-related promissory notes.
- The effect of Section 232 tariffs and other drone-related regulations on demand, supply conditions, gross margin and the full-year outlook.
- Progress in recovering gross profit percentage from the 17.4 % reported in Q2 supplemental combined financial information.
Balance sheet and cash flow
- As of June 30, 2026, cash and cash equivalents were $7,214 (in thousands), compared with $16,696 (in thousands) as of December 31, 2025.
- As of June 30, 2026, the Company had $7.2 million of unrestricted cash and cash equivalents and $9.1 million of remaining availability on the borrowing base under its credit facility at Drone Nerds.
- As of September 30, 2026 on a preliminary basis the Company had $5.1 million of unrestricted cash and cash equivalents.
- Asset-based revolving line of credit was $8,760 (in thousands) as of June 30, 2026.
- Acquisition-related promissory note-related party was $4,431 (in thousands) as of June 30, 2026.
- Total stockholders’ equity (deficit) was $(25,589 ) (in thousands) as of June 30, 2026.
- For the six months ended June 30, 2026, net cash used in operating activities was $(21,008 ) (in thousands).
- For the six months ended June 30, 2026, borrowings on the asset-based revolving line of credit were $45,008 (in thousands), while repayments were $(36,248 ) (in thousands).
- On a preliminary basis, average monthly operating cash outflows of ADS and corporate operations, excluding Drone Nerds, during the third quarter were approximately $1.1 million per month, down approximately 42% from the second quarter and 62% from the first quarter.
Analysis
XTI’s supplemental combined business generated Q2 revenue of $32,449 (in thousands), up $7,319 (in thousands), or 29 %, from $25,130 (in thousands) in the 2025 pro forma comparison. The growth indicates increased activity at the current combined operating footprint centered on Drone Nerds. The company identified continuing demand across enterprise and government buyers and expanded its portfolio through the XREAL xbx a01+ addition and the DBOX partnership.
Revenue growth did not translate into improved gross profitability in the supplemental combined comparison. Gross profit was 5,643 (in thousands), down from 6,047 (in thousands), while gross profit percentage fell to 17.4 % from 24.1 %. The full-year gross-profit-percentage outlook of 17 percent to 19 percent places the reported quarter within the guided range, but the margin decline makes execution on product mix, supply conditions and tariff exposure important.
Consolidated GAAP operations remained loss-making. Q2 loss from operations was (9,082 ) (in thousands), following total operating expenses of 14,725 (in thousands), including 11,855 (in thousands) of general and administrative expense. Net loss was (2,450 ) (in thousands), with other income and expense materially affected by an 8,413 (in thousands) change in fair value of warrant liability. For the six months ended June 30, 2026, net cash used in operating activities was (21,008 ) (in thousands).
Liquidity remains the central constraint. Cash and cash equivalents were $7,214 (in thousands) at June 30, 2026, and preliminary unrestricted cash and cash equivalents were $5.1 million at September 30, 2026. The company cited $9.1 million of remaining borrowing-base availability, reported an $8,760 (in thousands) asset-based revolving line of credit balance, and disclosed cross-default, refinancing and going-concern risks. Management has reduced corporate and ADS costs and expects positive net cash provided by operating activities in the fourth quarter of 2026. The revenue outlook is $125 million to $130 million, subject to continued credit-facility access and no material further tariff-policy changes.
Management, verbatim
Demand for enterprise drone solutions continues to build across enterprise and government buyers and, as one of the nation’s leading enterprise drone providers, we believe we are well positioned to capitalize on that opportunity.
Jeremy Schneiderman, Interim Chief Executive Officer
While we are navigating a dynamic regulatory environment, including Section 232 tariffs that took effect on September 3 and other pending drone-related regulations, our team remains focused on accelerating growth by strengthening our product offerings, increasing our marketing investments, and maintaining disciplined expense management.
Jeremy Schneiderman, Interim Chief Executive Officer
Not in the filing
stated, not guessed- Prior outlook was not provided, so comparison with prior guidance is unavailable.
- Segment revenue and segment-level comparisons were not reported.
- Non-GAAP revenue, gross profit, operating income, net income, and EPS measures were not reported.
- Free cash flow was not reported.
- Q2 operating cash flow, investing cash flow, financing cash flow, and free cash flow were not reported as standalone quarterly metrics.
- Share repurchases, dividends, and other capital-return actions were not reported.
- Total debt was not reported on a single line item.
- Guidance for operating expenses and tax rate was not reported.
- Quarter-over-quarter comparisons were not reported for the financial-statement line items.
- A prior-year consolidated revenue comparison was not reported because the 2025 consolidated revenue field is shown as —.
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.