Xer Tech (XER) Investor update summary

Investment case and market

• Hybrid X8 bridges electric drones and helicopters, delivering 3.5 hours of endurance with payloads up to 10 kg, roughly 5x battery-drone endurance.

• More than USD 20m invested; the platform has been validated by commercial clients, European navies and armies, with pilots converting to follow-on orders.

• Management estimates the addressable niche at ~5% of the cited USD 60bn UAV market; the broader UAV market is forecast to grow at 15.5% CAGR for 2025–2034.

• Rising defence budgets, UAV substitution and demand for autonomous monitoring support expansion; NATO spending targets cited at 3.5%+ of GDP.

Platform and market validation

• X8 PRO is in production and deployed from Arctic to desert environments; the Swiss-designed hybrid-electric platform is produced in Sweden and Switzerland.

• X12 is in development for up to 30 kg payload and seven hours of flight, targeting maritime and cargo applications.

• More than 30 payloads have been integrated for ISR, SIGINT, maritime surveillance, mine and unexploded-ordnance detection; one platform adapts to defence, energy and security missions.

• NATO exercises in Estonia, Latvia and Portugal, including REPMUS 2026, have demonstrated capabilities to NATO nations and informed maritime-system development.

• Work spans Rheinmetall, Bundeswehr, Swedish and Swiss armed forces and navies, PLATH, Destinus, ConocoPhillips and ST Engineering.

Revenue model and defense outlook

• One-off systems range from USD 200k to USD 1.2m; commercial drone sales typically run ~$100k plus ~$100k for payloads and systems, with one remote-area system sold near $500k.

• Annual service, software and maintenance revenue is USD 50k–190k per system; sensor-data software is already generating sales, with operations, analytics and AI subscriptions planned for 2026.

• Drone gross margin is ~75%, payload gross margin 20–50%; recurring offerings include training, predictive maintenance and capability retrofits.

• Defence sales run 80%–90% through integrators including Thales, Rheinmetall, Saab, PLATH, SERCO and Rohde & Schwarz; large orders may take several more quarters.

• A potential SEK 230m North American-backed demining project in southern Africa remains under discussion, more likely next year than this year, with hardware deliveries spread over several years.