Unusual Machines, Inc.

Greetings and welcome to Unusual Machines fourth quarter and fiscal year 2025 financial results conference call and webcast. At this time all participants are on a listen only mode and 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. And please note, this conference is being recorded. I will now turn the conference over to your host, Christine Petraglia, Investor Relations for Unusual Machines. Mom, the floor is yours.

Thank you, operator. Good morning, everyone. With us today, our Unusual Machines CEO, Alan Evans, and CFO, Brian Hoff. During this call, management will make forward-looking statements, including statements that our expectations concerning the growth of our operations, our business and our revenues, the growth of the NDAA compliant drone market, our anticipated growth margins, our plans to scale manufacturing capacity, including the timing and success of new production lines for motors, batteries, cameras, and headsets our ability to achieve cash flow positive operations in the future, our workforce expansion plans, and future acquisitions we may make. The results expected by some or all of these forward-looking statements may not occur. Factors that affect our ability to achieve these results include the risks that enough of our customers receive orders under the drone dominance program, or other government programs and in turn place component orders with us as well as potential funding reductions, program delays or changes in procurement priorities. Our dependence on a limited number of enterprise customers and the risk of customer concentration, the risks that our inventory build up will become obsolete or that we cannot sell such inventory at reasonable margins. Our ability to manage our rapid growth, including integrating new employees and maintaining quality control. Risks relating to manufacturing bugs, delays, or failure to achieve anticipated production efficiencies. The availability of satisfactory labor pool to meet our planned growth potential, supply chain disruptions, or component shortages. The impact from tariffs, including inflation and increased costs of goods sold. The risk that our automated production equipment may not be operational on the anticipated timeline. Any risk that our auditors may require us to make changes to our financial statements and the risk factors contained in our Form 10-Q filed with the SEC on November 6, 2025. Prospective supplements filed with the SEC on September 2, 2025, July 15, 2025, and May 6, 2025. And in our Form 10-K, for the year ended December 31, 2025, which we anticipate filing in the coming days. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Any forward-looking statement made by us herein speaks only of the date on which it is made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law. And 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.

Thank you, Christine. Good morning, everyone, and thank you very much for joining us this Monday. During this call, I will discuss our 2025 annual performance and also emphasize results specific to the fourth quarter. In the year 2025, we generated approximately 11.2 million in revenue. This is 101% year-over-year growth from 2024. Over the course of the year, we raised $157.8 million through equity financing and closed out the year with $103.3 million as part of our $157.4 million in total working capital. This is a massive, massive balance sheet increase from the $3.7 million we had in cash at the start of 2025. The 2025 results taken in aggregate don't clearly portray the dramatic changes that occurred throughout the year. The year was a turning point for our business as we underwent the transformation from an online retail store to become a drone components producer and enterprise sales business. This can clearly be seen in the quarterly percentage of our revenue that was attributed to our enterprise segment. It was 31% in quarter one, 48% in quarter two, 57% in quarter three, and 81% in quarter four. Hardware companies like ours that rapidly scale operations and often see revenues, we often see these revenues follow operation scaling by a quarter or so. Our growth shift started in the third quarter when we went from 19 employees to 38 employees across the quarter. At the same time, we also began to expand our footprint from the 6,900 square feet to the 62,500 square feet that we had at the end of 2025. The fourth quarter results, the financial results, are representative of the start of this growth process because the growth process started in the third quarter. and I would like to cover them in more detail. The fourth quarter was our seventh consecutive quarter with record revenues, and it is not even close. We generated approximately $4.9 million in the fourth quarter, which represents quarterly sequential growth of 133%. While growing, we were also able to sustain gross margins of approximately 36% which did exceed our internal expectations for the quarter. We continue to scale operations in the quarter, growing from 38 employees to 81 employees at the end of 2025, and we started production of our motors in some scale at our motor factory in November. We expect this operational growth from quarter four to be evident in the 10Q we file at the end of the first quarter of 2026. even now we are continuing to scale as quickly as we can to meet demand and are already over 140 total employees our ipo was only two years ago and we went public with the plan to transform into a leader for onshoring the production of drone components in a relatively short period of time we have managed to undergo that transformation and we are absolutely in the early phases of rapid growth. This success would not be possible without the work our entire team puts in. As we continue to grow, we now have a few older and many, many newer employees. Everyone is working hard and bringing just incredible energy and ideas to all of the challenges we face. I am confident that we can handle the growth because I am confident in everyone I work with. So I want to say thank you to everyone working at Unusual Machines. I will now hand this off to our CFO, Brian Hoff, to cover our financial results in detail. And once he finishes, I will go into much more detail on what this looks like going forward. With that, I am handing the call to our CFO, Brian Hoff.