11/6/2025

speaker
Operator
Conference Operator

machines third quarter 2025 earnings conference call and webcast at this time all participants are in a listen only mode a question and answer session will follow the formal presentation if anyone should require operator assistance during the conference please press star zero on your telephone keypad please note this conference is being recorded I will now turn the conference over to Christine Petrullia investor relations for unusual machines

speaker
Christine Petrullia
Investor Relations, Unusual Machines

Thank you, Operator. Good afternoon, everyone. With us today on Usual Machines, CEO Alan Evans and CFO Brian Haas. During this call, management will make forward-looking statements, including statements that address Unusual Machines' expectations regarding the impact from tariffs, our ability to add more employees to our ranks, our factory expansions, our ability to increase our margins and revenues, our ability to achieve aggressive growth, our expectation that the marketplace will change in quarter four of 2025 and 2026, our plan of keeping our cash burn low, our ability to scale our motor and headset manufacturing capabilities, our ability to scale supply chains to meet our customers' needs, receipt of orders from the U.S. Department of War, our ability to continue to grow revenue, the timing of our 2026 inventory and other expenses, revenues, expected gap profits, and positive cash flow from operations and our expectation that the U.S. drone market will continue to explode. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Unusual Machines' most recently filed 10-Q, Form 10-K, and Prospective Supplements. Except as required by law, Unusual Machines disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. As a reminder, this call is being recorded, and a replay will be available on Unusual Machines' website at www.unusualmachines.com. Now let me hand the call over to our CEO, Alan Evans. Please go ahead, Alan. And there's Alan.

speaker
Alan Evans
Chief Executive Officer

Oh, I'm sorry. I was muted. Thanks, Christine. Sorry, everyone. Before we get into the meat of the call, I want to address the format change to this audio-only format. We moved to this channel for our earnings calls because of direct integrations with a lot of investor portals like Bloomberg Terminals. This should give all of our investors, especially the ones unable to make the call, faster and easier access to information. As our company keeps evolving, we really do appreciate feedback, and we would love to hear any thoughts that you have, both good or bad, on the new format. So please email us at investors at unusualmachines.com if you have anything to say. Now, today is a good day. We were profitable in the third quarter. Let me repeat that. We were not just cash flow positive. We actually had our first profitable quarter as a company. The good news doesn't stop there. It was the sixth quarter in a row we achieved record revenues. It was our best gross margin quarter of all time. It is the first quarter where more than 50% of our revenue was from enterprise sales, and we already have enterprise purchase orders totaling more than $16 million from a diverse set of customers going forward. We closed the rotor lab acquisition. Our motor factory in Orlando is turned on, and we're currently producing American-made motors. We executed our staircase financing strategy and currently have more than $130 million in the bank. Our strategic investments have improved partnerships and yielded financial returns. Finally, our team has grown from 19 people at the start of the quarter to over 60 people today, and we're continuing to scale to meet demand. Eighteen months ago, we set out with an idea to transform this company from a retail channel into a leader in the onshore production of drone components. The results of this quarter finally show initial results from those seeds we planted and all the hard work we have done. It is not just a good quarter, but rather it's the first signs of a successful transformation and the beginning of rapid growth for unusual machines. This would not be possible without the work our entire team puts in. As we continue to grow, both old and new employees are working hard and bringing incredible energy to the challenges we face. The culture and quality of our workforce made me just very excited for what we can collectively achieve going forward. And the way that we've maintained our culture as we've grown has made me very confident our workforce can handle the imminent wave of demand we're starting to face. We've been aggressively growing as the marketplace changes, and I am sure that is what most of you really want to hear about. I'll hand this call off to our CFO, Brian Hoff, to cover our financial results in detail. And once he's finished, we'll talk about the future. With that, I'm handing the call over to our CFO, Brian Hoff. Thank you, Alan.

Disclaimer

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