XTI Aerospace, Inc.

What they do

XTI Aerospace provides unmanned aerial systems solutions through two reportable segments: UAS, operated through majority-owned XTI Drones Holdings, LLC, which owns Drone Nerds, LLC and Anzu Robotics, LLC, and ADS, formerly XTI Aircraft. Drone Nerds is an OEM-agnostic distributor and services platform supporting more than 50 hardware and software manufacturers, selling UAS platforms and related equipment plus training, compliance, repair and maintenance, and fleet lifecycle support. ADS has not generated revenue and is focused on designing and developing unmanned platforms for defense and commercial applications. The prior Inpixon business was divested in the first quarter of 2026 and is reported as discontinued operations.

Revenue drivers

• UAS (Drone Nerds) — OEM-agnostic distribution of drone hardware plus attached services such as operator training, compliance management, repair and maintenance, fleet sustainment, and financing; the filings state it constitutes substantially all of the Company's revenues.
• Advanced Systems and Defense (ADS) — Earlier-stage division redirected from the paused TriFan 600 program toward design and development of unmanned platforms for defense and commercial use; no revenues generated to date.
• Domestic manufacturing and technology division — A third division the Company says it expects to continue developing, intended to support domestic procurement; not yet a revenue source in the filings.

Recent performance

First quarter 2026 revenue was $27.7 million with gross profit of $5.1 million, or 18.6 percent of revenue, per the May 14, 2026 earnings release. The 10-Q notes the quarter reflects a full period of Drone Nerds activity following its November 2025 acquisition, while the prior-year period does not, limiting comparability, and Inpixon results are excluded as discontinued operations. Full-year 2025 revenue was $22.5 million with a net loss of $68.8 million; the first quarter of 2026 revenue alone exceeded the full prior year. As of March 31, 2026, the Company reported $15.2 million of unrestricted cash, total liabilities of $92.0 million, and negative shareholder equity of $26.6 million. Adjusted EBITDA loss improved from approximately negative $10 million in fourth quarter 2025 to approximately negative $5 million in first quarter 2026.

Strategy

The Company's stated priorities are expanding the Drone Nerds distribution and services platform, pursuing targeted acquisitions to add geography and capabilities, and developing advanced unmanned systems and domestic manufacturing. It aims to increase revenue per customer and margins through service attachment such as training, compliance support, repair, fleet management, and financing, and describes itself as an OEM-agnostic, multi-vendor ecosystem. The TriFan 600 program has been paused, with its intellectual property and engineering work product preserved, and the former XTI Aircraft division redirected toward unmanned defense and commercial platforms under ADS. Management has appointed Steve Zohr to lead the reoriented ADS division. In February 2026 the Company secured a $20 million asset-based lending facility with JPMorgan and completed the divestiture of the Inpixon RTLS business.

Risks

• Liquidity and additional capital needs — The 10-K states the Company's ability to fund operations and execute its long-term development strategy depends on maintaining sufficient liquidity and obtaining additional capital over time, and it reported negative shareholder equity of $26.6 million at March 31, 2026.
• Dependence on a single revenue platform — Substantially all revenues come from Drone Nerds, leaving results concentrated in one acquired distribution business, while the ADS segment has not generated any revenues.
• Regulatory and procurement risk — The UAS business is subject to evolving federal, state, local and international regulatory requirements, and government and defense procurement is subject to platform compliance, cybersecurity, and domestic sourcing requirements.
• OEM and dealer program access — The Company states its OEM-agnostic model depends on continued access to OEM products and dealer programs, which are subject to change.

Outlook

Management targets full-year 2026 revenue of $160 million or greater, gross margin of 19 to 21 percent, breakeven cash flow in the third quarter of 2026, and year-end cash of $15 million to $17 million. It also targets Drone Nerds EBITDA of 9 to 10 percent of revenue, second-half 2026 consolidated adjusted EBITDA of $2 million to $3 million or greater, and $5 million to $10 million of availability under the ABL facility at year-end. The Company expects to continue delivering increasing positive cash flow in the fourth quarter of 2026 and beyond, based on expected Drone Nerds cash flows and ABL availability.