AIRO Group (AIRO) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $8.9 million, down from $11.8 million in Q1 2025, due to product mix, shipment timing, and operational disruptions across Drones, Avionics, and Training segments.

• Net loss widened to $15.5 million from $2.0 million in Q1 2025, driven by higher operating expenses, lower gross profit, and ongoing investments.

• Gross margin fell to 26.6% from 58.8% year-over-year, mainly due to unfavorable sales mix and increased costs in the Drones segment.

• Strategic shift to focus on the drone market, launching new platforms (RQ-70, JC-250, JX-250, RQ-35), scaling manufacturing, and targeting Blue UAS certification in Q2 2026.

• Ongoing evaluation of the Training business's strategic fit, with potential for divestiture or restructuring as focus intensifies on drones and avionics.

Financial highlights

• Q1 2026 revenue was $8.9 million, down $2.9 million year-over-year, with Drones down $2.0 million, Avionics down $0.5 million, and Training down $0.4 million.

• Gross profit was $2.4 million (26.6% margin), down from $6.9 million (58.8% margin) year-over-year, due to a higher mix of drone upgrades.

• Operating loss increased to $17.2 million from $3.1 million in Q1 2025, driven by lower revenue, higher costs, and increased post-IPO investments.

• Adjusted EBITDA was -$12.8 million, compared to $0.1 million in Q1 2025.

• Cash balance at March 31, 2026 was $54.2 million, with minimal debt.

Outlook and guidance

• Reiterated full-year 2026 revenue growth guidance of 15%-25% year-over-year.

• Majority of drone backlog ($150 million+ as of April 30, 2026) expected to convert to revenue within 12 months.

• Anticipates record second half and fourth quarter in 2026, with 2027 revenue growth expected to outpace 2026.

• Full-year 2026 adjusted EBITDA guidance in the negative mid to high teens dollar range, with most losses in the first half.

• Expects low single-digit gross margin compression for 2026, mainly due to Q1 mix.