Unusual Machines (UMAC) investor relations material

Industry overview and market opportunity

• U.S.-based drone component manufacturing is being ramped up to address supply chain security and regulatory requirements, shifting production from overseas to domestic facilities.

• Demand is driven by defense programs aiming to produce over 1 million small, attritable drones in the coming years, with each drone containing $600–$1,000 in components.

• Key federal programs like Drone Dominance, PBAS, and SkyFoundry are fueling large-scale procurement, with the Department of War targeting 90,000 drones this year and 250,000 next year.

• Regulatory changes, including the NDAA and FCC bans on foreign-made drone parts, are accelerating the shift to U.S. suppliers and boosting demand.

• The company is positioned as a value, high-volume supplier, differentiating itself from premium-priced competitors.

Operational expansion and financial profile

• Workforce has grown from under 20 to over 120 employees, with five U.S. facilities and one in Australia, supporting increased production capacity.

• Manufacturing has scaled to three shifts for motors and two for assembly, with automation expected to 5–10x motor output in Q2–Q3 2026.

• Over $160 million raised in the past year, with $100 million in cash and no debt, providing a strong balance sheet for further investment.

• Inventory and raw material purchases are being made 6–9 months in advance to meet anticipated demand and long lead times.

• Margin targets are close to 40%, with break-even expected at $40 million in annual revenue; operational cash burn is about $1 million per quarter.

Strategic focus and growth drivers

• The primary focus is on supplying U.S. defense programs, with a B2B2G model targeting all drone manufacturers rather than single contracts.

• Regulatory shifts are a major catalyst, with the FCC ban on foreign components expected to drive further adoption of U.S.-made parts in the next two quarters.

• Revenue growth of 133% year-over-year has been driven by defense and enterprise demand, with a shift away from retail.

• Backlog visibility is strong for 2026, with incremental upside expected as program awards are announced in the coming weeks.

• Long-term vision includes expanding into commercial and consumer drone markets, with potential M&A to accelerate growth and broaden the product portfolio.