Factorial Energy (FAC) Q3 2026 earnings summary

Executive summary

• First commercial drone-cell sales generated $26k of Q3 2026 revenue, ahead of the prior 2027 timeline; aerospace is the initial market, with automotive a longer-term opportunity.

• Aerospace cells advanced from testing to system integration, a flight-duration record, commercial order and revenue; automotive development continued with Mercedes-Benz and Stellantis.

• Q3 net income of $8.8m included a $24.0m non-cash warrant-liability remeasurement gain, despite a $16.4m operating loss.

• Cash and cash equivalents were $95.4m at September 30; the current operating plan projects funding into H1 2028, subject to assumptions and execution risks.

Financial highlights

• Q3 revenue was $26k vs. $1.831m in Q3 2025; cost of revenue was $1.831m, including a $1.779m inventory write-down, producing a $1.805m gross loss.

• Q3 net income of $8.8m vs. a $34.6m loss in Q3 2025 primarily reflected a $24.0m non-cash warrant-liability fair-value gain; results also included a $4.1m arbitration judgment expense.

• Nine-month revenue was $26k; operating loss was $35.9m vs. $52.1m, and net loss was $11.1m vs. $58.1m.

• Q3 R&D expense was $4.1m vs. $5.9m and SG&A was $6.5m vs. $4.6m; nine-month R&D fell to $12.6m from $19.4m, while SG&A rose to $17.4m from $15.6m.

• Non-GAAP operating expenses were $9m in Q3 and $24m year to date, excluding $4.1m of previously disclosed legal judgments.

Outlook and guidance

• FY2026 non-GAAP operating expenses are expected at $36m-$38m, below prior guidance of ~$40m; higher Q4 spending reflects shifted cost timing and production costs moving to inventory and cost of revenue.

• FY2026 capex is expected at $10m-$12m vs. prior guidance of ~$13m; milestone-based equipment payment timing may shift some spending into early 2027.

• More meaningful commercial revenue is expected in 2027 as production programs begin; revenue is expected to remain modest and vary by quarter until programs ramp.

• Current plans project available cash funding operating and capital needs into H1 2028; estimates depend on assumptions that may prove incorrect.

• FEST and Solstice line expansions remain on track for end-2027 and end-2028, respectively; early demand is planned to be served through expanded U.S. and South Korean fabrication lines.