Palladyne AI (PDYN) investor relations material

Strategic partnership announcement

• Announced exclusive U.S. partnership with Israel Aerospace Industries (IAI) to Americanize, manufacture, integrate, and market IAI’s battle-proven loitering munition systems for the U.S. Department of Defense, with up to 10 years of exclusivity based on milestones.

• Partnership structure includes domestic manufacturing, systems integration, and engineering support from IAI, with expansion potential to additional systems and no upfront exclusivity payment; IAI receives a standard industry royalty rate and supplies certain subsystems.

• Palladyne will adapt IAI’s HAROP, HARPY, and Mini HARPY systems to U.S. requirements, integrating SwarmOS autonomy software.

• Manufacturing will leverage existing U.S. facilities, with capacity to scale based on government demand and support from certified precision machining and heavy fabrication capabilities.

• Partnership positions the company to address shifting Department of Defense priorities toward cost-effective, domestically produced, autonomous systems.

Product and technology highlights

• SwarmOS enables real-time, collaborative autonomy across drones from multiple manufacturers, functioning in comms-degraded and GPS-denied environments, and is supported by patented Decentralized Embodied Collaborative Autonomy (DECA).

• Recent Department of Defense and Department of War exercises demonstrated SwarmOS on drones from four OEMs, with positive feedback and invitations to further exercises.

• Product portfolio includes Gremlin-X mini bomber, SwarmStrike mini cruise missile, ARRW near-hypersonic missile, and Brain avionics suite.

• IAI’s loitering munitions offer persistent, autonomous suppression of enemy air defenses, with proven operational history and advanced targeting capabilities.

Manufacturing and operational scale

• Vertically integrated U.S. manufacturing supports major defense programs (F-35, F-16, Tomahawk) and includes certified precision machining and heavy fabrication.

• Significant available capacity and growing backlog, with key customers including Lockheed Martin and Boeing.

• Initial investments focus on leveraging existing people and facilities; larger volumes may require additional space but not significant CapEx.