AIRO, Through Its Leading Drone Technology Business, Sky-Watch, Secures $4.5M Development Program to Advance Counter-Electronic Warfare Technologies
MCLEAN, Va.--(BUSINESS WIRE)--November 14, 2025--
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 third quarter ended September 30, 2025.
Third Quarter 2025 Financial Highlights
-- Revenue: $6.3 million in Q3 2025, with approximately $20 million of
Drone shipments shifting into Q4 2025
-- As of November 14, 2025, booked fourth quarter revenue of $24.5
million
-- YTD Revenue of $42.6 million, versus $47.2 million in the
prior-year period.
-- Gross margin (YTD): 58.1%, versus 64.7% in the prior-year period.
-- Net loss: $(8.0) million in Q3, improved from $(30.3) million in the
prior-year quarter.
-- EBITDA: $(5.7) million in Q3, improved from $(23.1) million in the
prior-year quarter. YTD EBITDA of $15.9 million, an improvement from
$(21.7) million in the prior-year period.
-- Adjusted EBITDA: $(8.0) million in Q3, compared to $10.9 million in the
prior-year quarter.
-- Balance sheet: Completed an upsized $89.4 million follow-on public
offering, strengthening liquidity to support growth initiatives.
-- Outlook: The Company expects full-year 2025 revenue to exceed 2024
revenue of $86.9 million.
Operational Highlights
-- Nord Drone Group joint venture (JV) signed. Signed a Joint Venture
Agreement in November 2025 focused on accelerating deployment of
combat-proven UAS across the U.S., Ukraine, and NATO markets. Under the
proposed structure, AIRO will contribute manufacturing oversight, R&D,
and government procurement expertise, while Nord Drone brings proprietary
technologies, production facilities, and established defense
relationships. Nord Drone currently produces roughly 4,000 drones per
month, with capacity to scale to 25,000 units, and its systems are
already active in frontline operations. This collaboration will integrate
Nord Drone's high-volume, battlefield-tested platforms with AIRO's RQ-35
Heidrun and broader unmanned portfolio, significantly broadening our
reach and accelerating our ability to meet allied operational needs. The
consummation of the JV is subject to a number of closing conditions.
-- Sky-Watch awarded $4.5 million to develop advanced Counter Electronic
Warfare $(CEW)$. AIRO's leading drone technology business, Sky-Watch, in
partnership with Aalborg University--renowned for its engineering
excellence--and a leading technology collaborator, has been awarded $4.5
million to develop advanced CEW capabilities for integration across
Sky-Watch UAS platforms. Building on the operational success of the RQ-35
ISR drone, already trusted for missions in GNSS/GPS-denied and
EW-contested environments, this program is focused on critical onboard
systems designed to help customers operate in even harsher conditions and
counter high-energy, targeted EW threats. Development is expected to
begin in Q1 2026, with the first demonstrator expected mid-2026,
reinforcing AIRO's commitment to providing the warfighter with dynamic,
resilient tools for the most challenging operational theaters.
-- Bullet (Degree-Trans LLC) interceptor drone LOI. Signed a Letter of
Intent in October 2025 to establish a 50/50 joint venture to produce and
deploy Bullet's combat-proven fixed-wing UAV technology across the United
States, NATO defense markets and Ukraine. Under the terms of the LOI,
AIRO intends to integrate Bullet's high-speed, modular interceptor drone
platform into U.S. manufacturing and defense infrastructure. The advanced
interceptor drone achieves remarkable speeds of up to 300 mph,
establishing it as one of the fastest unmanned aerial defense systems
available. The LOI is non-binding and subject to the execution of a
definitive JV agreement.
-- U.S. manufacturing expansion announced. Initiated plans for a new U.S.
manufacturing and engineering site to scale RQ-35 Heidrun production and
accelerate next-generation drone development. The facility is expected to
support AS9100 aerospace quality standards and serve defense and select
commercial customers.
-- Electric Air Mobility: cargo drone and Canada expansion. Introduced a
medium lift cargo UAV concept for middle mile logistics supported by
Jaunt Air Mobility's Slowed Rotor Compound $(SRC)$ technology, and expanded
activities within Québec's YMX Innovation Zone to advance testing,
certification, and early deployment. Jaunt is pursuing approximately $34
million in Canadian support through grants, reimbursements, and tax
incentives, with about 30 percent already committed and the balance
subject to additional program approvals.
"While our third quarter revenue was impacted by timing delays related to customer-requested capability enhancements to certain drone platforms, I'm pleased with our overall progress during the first nine months of 2025," said Joe Burns, Chief Executive Officer of AIRO.
Dr. Chirinjeev Kathuria, Executive Chairman, added, "We are continuing to see strong demand within the broader drone industry and unprecedented tailwinds driven by evolving defense requirements and the proven effectiveness of unmanned systems in modern conflicts. Our current and expected partnerships with battle-tested Ukrainian technology providers like Bullet and Nord Drone Group position us at the forefront of next-generation unmanned systems development."
Third Quarter 2025 Financial Results
Third quarter revenue was $6.3 million, compared to $23.7 million in the prior-year period. The decrease reflects shipment timing in the Drones segment after customer-requested capability enhancements, which shifted approximately $20 million of planned third quarter deliveries into the fourth quarter. As of November 14, 2025, the Company has booked fourth quarter revenue totaling $24.5 million.
Training revenue increased by $0.9 million to $1.6 million in the third quarter of 2025 compared to prior-year period, driven by higher activity under multiple IDIQ contracts and higher-margin ground target vehicle programs. The Company submitted a sources-sought response for the next Naval Special Warfare contract, projected at approximately $20 million over five years, reinforcing Coastal Defense's role as a trusted provider of specialized military flight training to the U.S. and allied nations.
Gross profit was $2.8 million, down from $16.3 million in the prior year. Gross margin was 44.4% as compared to 68.7% in the prior year, reflecting product mix and shipment timing, particularly in Drones.
Net loss was $8.0 million compared to $30.3 million in the third quarter of 2024, reflecting lower one-time items and overall operating cost controls.
EBITDA was $(5.7) million, an improvement from $(23.1) million in the prior-year period. Adjusted EBITDA was $(8.0) million compared to $10.9 million in the prior-year quarter, primarily reflecting the revenue timing and increased operating expenses as noted above and increased operating expenses as the Company scales its public company operations.
As of September 30, 2025, cash and restricted cash totaled $83.7 million. During the quarter the Company completed an upsized underwritten public offering of 4,830,000 shares of common stock, including the full exercise of the underwriters' option to purchase 630,000 additional shares on September 12, 2025, for gross proceeds of $89.4 million before underwriting discounts, commissions, and expenses. The Company used $19.4 million of proceeds to repurchase 1.1 million shares of its common stock from certain existing stockholders and intends to use the remaining proceeds to fund growth initiatives across its operating segments and to pursue opportunistic acquisitions of complementary businesses, products, services, or technologies that align with its strategy.
EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See "Non-GAAP Financial Measures" below for the definition of each non-GAAP financial measure and the tables that follow for a reconciliation of each of these non-GAAP measures to net (loss) income, the most comparable GAAP measure.
Outlook
The Company expects full-year 2025 revenue to exceed 2024 revenue of $86.9 million, subject to supplier deliveries and customer acceptance as AIRO incorporates customer-requested capability enhancements on certain drone models.
Conference Call and Webcast
AIRO will host a conference call to discuss its third quarter 2025 results and business outlook on November 14, 2025, at 8:00 am ET. Participants can join the call by dialing 1 (800)-715-9871 (US) or 1 (646)-307-1963 (international) and enter the access code 7911023. To listen to the live audio webcast and Q&A, visit the Event & Presentations section of AIRO's investor relations website at AIRO Group Holdings, Inc. - Events & Presentations, or by clicking on the link HERE. To avoid delays, it is recommended that participants dial into the conference call 15 minutes ahead of the scheduled start time.
A replay of the webcast will be available on the website within 24 hours after the call. The earnings press release, and related materials will also be available on AIRO's investor relations website at https://investor.theairogroup.com/.
About AIRO
AIRO Group Holdings is a next-generation aerospace and advanced air mobility platform driving innovation in defense and commercial markets. Headquartered in McLean, VA, with operations in the U.S., Canada, and Denmark, AIRO combines global reach with deep technical expertise. Through a vertically integrated model and a differentiated technology portfolio, AIRO delivers solutions across four high-growth segments: Drones, Avionics, Training, and Electric Air Mobility.
Forward-Looking Statements
The statements contained in this press release that are not historical facts are forward-looking statements. You can identify forward-looking statements because they contain words such as "believes," "expects," "may," "will," "should," "seeks," "intends," "plans," "estimates," or "anticipates," or similar expressions which concern our strategy, plans, projections or intentions. These forward-looking statements may be included throughout this press release, and include, but are not limited to, statements relating to estimates and forecasts of financial and performance metrics, including fourth quarter and full year 2025 expected results, statements regarding AIRO's joint venture with Nord Drone Group and proposed joint venture with Bullet, including the goals of, and opportunities for, each joint venture and the ability to consummate the joint ventures on the terms described herein or at all and the timing thereof, the timing and development of CEW capabilities, AIRO's plans for a manufacturing and engineering development facility, expectations concerning expanded Canadian operations, future products and developments, the intended use of proceeds from AIRO's follow-on offering, the market acceptance and opportunity of AIRO's products and services, and other statements that are not historical fact. By their nature, forward-looking statements are not statements of historical fact or guarantees of future performance and are subject to risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify, including those described in the section titled "Risk Factors" in AIRO's Quarterly Report on Form 10-Q for the period ended June 30, 2025 filed with the Securities and Exchange Commission ("SEC") on August 13, 2025 as well as other filings AIRO may make with the SEC in the future. Forward-looking statements represent AIRO's management's beliefs and assumptions only as of the date such statements are made. AIRO undertakes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.
Non-GAAP Financial Measures
To supplement its condensed consolidated financial statements prepared and presented in accordance with GAAP, AIRO uses EBITDA, Adjusted EBITDA and Adjusted EBITDA margin, as described below, to facilitate analysis of its financial and business trends and for internal planning and forecasting purposes. AIRO defines (1) EBITDA as net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, (2) Adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, gain on extinguishment of debt, stock-based compensation, contingent consideration and warrant fair value adjustments, goodwill impairment, and other one-time adjustments related to the IPO, and (3) Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. The above items are excluded from EBITDA and Adjusted EBITDA because these items are either non-cash in nature, or because the amount and timing of these items is unpredictable, or because they are not driven by core results of operations, thereby rendering comparisons with prior periods and competitors less meaningful. AIRO believes EBITDA, Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating its results of operations, as well as provides useful measures for period-to-period comparisons of its business performance. Moreover, Adjusted EBITDA is a key measurement used by AIRO management internally to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting.
There are limitations associated with the use of non-GAAP financial measures. These non-GAAP financial measures should not be considered as alternatives to performance measures derived in accordance with GAAP. AIRO's presentation of these non-GAAP financial measures should not be construed to imply that its future results will be unaffected by items that are excluded from these metrics. In addition, AIRO's definitions of these non-GAAP financial measures may be different from similarly titled non-GAAP measures used by other companies. These non-GAAP financial measures have limitations as an analytical tool, and you should not consider any of these non-GAAP financial measures in isolation or as a substitute for analysis of our results as reported under GAAP. See the tables that follow for a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), and Adjusted EBITDA Margin to net income (loss) margin, the most directly comparable financial measures stated in accordance with GAAP.
AIRO GROUP HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2025 2024
--------------- ----------------
ASSETS
Current assets:
Cash $ 83,485,824 $ 20,740,590
Restricted cash 192,921 170,088
Accounts receivable, net 1,255,800 8,960,705
Related party receivables 384,164 790,967
Inventory 16,194,693 8,822,721
Prepaid expenses and other
current assets 5,086,596 2,309,676
Deferred offering costs - 798,796
------------ ------------
Total current assets 106,599,998 42,593,543
Property and equipment, net 7,943,414 6,833,817
Right-of-use operating lease
assets 2,151,438 352,486
Goodwill 571,568,402 557,508,331
Intangible assets, net 86,063,523 93,502,277
Other assets 249,436 208,333
------------ ------------
Total assets $ 774,576,211 $ 700,998,787
============ ============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 4,247,481 $ 16,439,760
Related party payables 710,557 1,099,970
Accrued expenses 11,645,845 17,457,155
Operating lease liabilities,
current 505,772 212,591
Deferred revenue 2,797,747 10,339,978
Related party borrowings 5,619,063 5,971,281
Revolving lines of credit - 126,589
Current maturities of debt 4,459,378 27,992,450
Investor notes at fair value 1,716,712 13,819,000
Deferred compensation 365,477 -
Due to seller - 3,147,762
------------ ------------
Total current liabilities 32,068,032 96,606,536
Long-term debt, net of current
maturities 674,746 688,270
Long-term deferred compensation - 11,218,573
Deferred tax liability 523,868 767,331
Long-term deferred revenue 9,619 10,158
Operating lease liabilities,
noncurrent 1,702,800 146,214
Other long-term liabilities 50,000 50,000
Contingent consideration - 42,782,276
------------ ------------
Total liabilities 35,029,065 152,269,358
------------ ------------
Stockholders' equity:
Common stock 31 16
Additional paid-in capital 962,397,353 764,691,988
Stockholder loan (5) (5)
Treasury shares (20,011,133) -
Accumulated other comprehensive
income (loss) 7,678,527 (9,509,285)
Accumulated deficit (210,517,627) (206,453,285)
------------ ------------
Total stockholders' equity 739,547,146 548,729,429
------------ ------------
Total liabilities and
stockholders' equity $ 774,576,211 $ 700,998,787
============ ============
AIRO GROUP HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended September Nine months ended September
30, 30,
---------------------------- ------------------------------
2025 2024 2025 2024
------------ ------------ ------------ ------------
Revenue $ 6,283,692 $ 23,685,377 $ 42,628,570 $ 47,205,649
Cost of revenue 3,493,750 7,403,642 17,871,536 16,661,748
----------- ----------- ----------- -----------
Gross profit 2,789,942 16,281,735 24,757,034 30,543,901
----------- ----------- ----------- -----------
Operating
expenses:
Research and
development 4,124,171 3,258,612 11,891,640 9,576,867
Sales and
marketing 1,602,461 1,557,498 4,793,682 4,217,556
General and
administrative 9,043,189 3,838,776 42,821,681 12,279,659
Goodwill
impairment - 37,994,000 - 37,994,000
----------- ----------- ----------- -----------
Total
operating
expenses 14,769,821 46,648,886 59,507,003 64,068,082
----------- ----------- ----------- -----------
Loss from
operations (11,979,879) (30,367,151) (34,749,969) (33,524,181)
----------- ----------- ----------- -----------
Other income
(expense):
Interest income
(expense), net 79,665 (1,675,616) (9,197,656) (2,917,364)
Gain on
extinguishment
of debt - - 15,559,069 -
Other income,
net 3,325,049 4,095,037 26,055,344 2,312,872
----------- ----------- ----------- -----------
Total other
income
(expense) 3,404,714 2,419,421 32,416,757 (604,492)
----------- ----------- ----------- -----------
Loss before income
tax benefit
(expense) (8,575,165) (27,947,730) (2,333,212) (34,128,673)
Income tax benefit
(expense) 613,149 (2,382,796) (1,731,130) (3,811,383)
----------- ----------- ----------- -----------
Net loss $ (7,962,016) $(30,330,526) $ (4,064,342) $(37,940,056)
=========== =========== =========== ===========
Net loss per share
-- basic and
diluted (1) $ (0.28) $ (1.85) $ (0.19) $ (2.32)
=========== =========== =========== ===========
Weighted-average
number of shares
of common stock
used in computing
net income (loss)
per share, basic
and diluted (1) 28,248,045 16,387,180 21,085,294 16,387,180
(1) Prior year share and per share amounts have been retroactively adjusted
to reflect the impact of a 1-for-1.7 reverse stock split effected on
March 7, 2025.
AIRO GROUP HOLDINGS, INC.
Non-GAAP Reconciliation
(Unaudited)
Three Months Ended Nine Months
September 30, Ended September 30,
------------------------- --------------------------
(in thousands,
except
percentages) 2025 2024 2025 2024
----------------- ------- -------- -------- --------
Net loss $(7,962) $(30,331) $ (4,065) $(37,940)
Depreciation and
amortization 2,910 3,134 9,035 9,478
Income tax
(benefit)
expense (613) 2,383 1,731 3,811
Interest (income)
expense, net (80) 1,675 9,198 2,917
------ ------- ------- -------
EBITDA (5,745) (23,139) 15,899 (21,734)
Gain on
extinguishment - - (15,559) -
Stock-based
compensation 1,092 122 19,855 593
Contingent
consideration
fair value
adjustments - (4,100) (20,272) (2,400)
Warrant fair value
adjustment - - (1,843) -
Goodwill
impairment - 37,994 - 37,994
IPO
contingencies(1) (3,391) - (1,322) -
------ ------- ------- -------
Adjusted EBITDA $(8,044) $ 10,877 $ (3,242) $ 14,453
====== ======= ======= =======
Net loss margin (126.7)% (128.1)% (9.5)% (80.4)%
Adjusted EBITDA
Margin (128.0)% 45.9% (7.6)% 30.6%
(1) IPO contingencies for the three months ended September 30, 2025 are made
up of a $1.2 million charge related to the Libertas warrants, net of a $4.5
million gain on deferred compensation. IPO contingencies for the nine months
ended September 30, 2025 are made up of $1.0 million related to Kipps, $0.8
million related to the legal settlement, $0.5 million legal accrual, $0.2
million for NGA, $0.3 million bonus, $0.6 million Aspen contingent debt, $1.2
million charge related to the Libertas warrants, $0.1 million cash portion of
the Aspen carve-out, net of a $5.9 million gain on deferred compensation.
View source version on businesswire.com: https://www.businesswire.com/news/home/20251114854366/en/
CONTACT: Investor Relations Contact
Dan Johnson
AIRO Group Holdings, Inc.
InvestorRelations@theairogroup.com
(END) Dow Jones Newswires
November 14, 2025 06:35 ET (11:35 GMT)