Unusual Machines, Inc.

Greetings and welcome to Unusual Machines Second Quarter 2026 Financial Results 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 Petralia, Investor Relations for Unusual Machines. Christine, over to you.

Thank you, Operator. Good morning, everyone. With us today are Unusual Machines CEO, Allan Evans, and CFO, Brian Hoff. During this call, management will make forward-looking statements regarding our expectations for product demand Revenue Growth, Manufacturing Expansion, Gross Margins, and Anticipated Regulatory Development. Actual results may differ materially due to factors including government program funding and timing, customer concentration, inventory risks, manufacturing challenges, supply chain disruptions, tariffs, impacts, and other risks described in our Form 10-K for the year ended December 31, 2025. We undertake no obligation to update forward-looking statements except as required by law. For a complete discussion of risk factors, please refer to our SEC filings and the shareholder letter accompanying this call. In addition to reporting financial results in accordance with GAAP, we will discuss certain non-GAAP financial measures, including adjusted EBITDA. We believe these measures provide useful supplemental information to investors regarding our operating performance. A reconciliation of non-GAAP measures to the most directly comparable GAAP measures is included in the shareholder letter earnings press release, which are also available on our website and filed with the SEC. 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 over the call to our CEO, Allan Evans. Please go ahead, Allan.

Thank you, Christine. Good morning, everyone, and thank you for joining us today. During this call, I will discuss our second quarter 2026 performance. In the second quarter, we generated more than $16.7 million in operating revenue. This is 687% year-over-year growth from the second quarter in 2025, and it's more than double the revenue we generated last quarter, the first quarter of 2026. We generated a gap loss of approximately $7.8 million for the quarter, which represents a net loss of $0.16 per share, and that's a reduction in loss when compared to the $0.32 per share from the second quarter of 2025. The key takeaway from this quarter for me is that we are continuing to dramatically increase revenue while getting closer to consistent profitability. The Q2 results begin to reflect the underlying financial structure Unusual Machines is working to achieve. There is rapid continued growth, doubling to almost $17 million in revenue, with the growth driven entirely from our enterprise segment. At the same time, we've managed to reduce our non-GAAP adjusted EBITDA from a loss of $1.6 million last quarter to a loss of only $400,000 this quarter. Our margins have remained consistent and healthy with the slightly lower than target depression that we see from rapid growth. And we finished the quarter with a 34.7% growth margin. This is in that backdrop of scaling as our headcount went from 141 employees to 240 employees as of July 1st. A healthy balance sheet remains a priority for us. and we took the opportunity to raise another $60 million at $30 a share. We did this with block ATM transactions. Right now we have about $367.5 million in total working capital and no debt. It's very important to remember that we don't burn cash. So this money remains in the war chest and enables us to both manage inventory and make investments that accelerate our customers and the entire drone marketplace. The success of this quarter and of the company just would not be possible without the hard work everyone on the entire Unusual Machines team puts in. Everybody works hard and brings incredible energy to all of the challenges we face. I am confident we can handle continued growth because I am confident in everyone I have the pleasure of working with. So I want to say thank you to everyone working at Unusual Machines. I'll hand this call off to our CFO, Brian Hoff, to cover our financial results in detail. And then once he finishes, I'm going to go into more detail on both this quarter and our plans going forward. With that, I'm handing the call off to our CFO, Brian Hoff.