AIRO Group Holdings Reports Third Quarter 2025 Results, Highlighting Strong Operational Progress, Robust Liquidity, and Growing Demand for Unmanned Systems

AIRO Group Holdings, Inc. (NASDAQ: AIRO) (“AIRO” or the “Company”), a global aerospace and defense technology leader specializing in next-generation unmanned systems and advanced aviation platforms, today announced its financial results for the third quarter ended September 30, 2025. The results reflect continued momentum across AIRO’s drone, defense, training, and electric air mobility businesses, alongside the Company’s strengthened balance sheet and expanding international partnerships.

AIRO continues to operate at the forefront of the rapidly growing unmanned aerial systems (UAS) sector, benefiting from robust global demand and evolving defense requirements across U.S., NATO, and allied markets. Despite the timing shift of several drone shipments into the fourth quarter, the Company delivered significant operational progress, advanced multiple strategic initiatives, and entered Q4 with a strong order book and expanded international footprint.

Management Commentary

“We are continuing to see strong demand within the broader drone industry and unprecedented tailwinds driven by evolving defense requirements and the proven effectiveness of unmanned systems in modern conflicts,” said Dr. Chirinjeev Kathuria, Executive Chairman of AIRO. “Our partnerships with battle-tested Ukrainian technology innovators and our expansion into higher-volume production reinforce our commitment to delivering the advanced, mission-ready solutions our allies require.”

Chief Executive Officer Joe Burns added:
“While our third-quarter revenue was impacted by customer-requested capability enhancements that shifted certain drone deliveries into the fourth quarter, we are very pleased with the company’s overall performance through the first nine months of 2025. Our strengthened financial position, improved operating metrics, and growing portfolio of high-value defense programs place AIRO in a strong position heading into 2026.”

Third Quarter 2025 Financial Results

Revenue Performance

AIRO reported third-quarter revenue of $6.3 million, compared to $23.7 million in the same quarter of 2024. As previously noted, the decrease primarily reflects shipment timing in the Drone segment, where approximately $20 million of revenue originally expected in Q3 shifted to Q4 due to customer-driven capability upgrades.

The Company remains confident in its full-year trajectory, supported by a significant increase in order intake entering the final months of 2025. As of November 14, 2025, AIRO had booked $24.5 million in fourth-quarter revenue, positioning the Company for a strong year-end performance.

Year-to-Date (YTD) Revenue

Revenue for the first nine months of 2025 totaled $42.6 million, compared to $47.2 million during the same period last year. The variance is attributed to the timing of drone shipments and product mix shifts within the Company’s UAS portfolio.

Gross Margin

AIRO reported a year-to-date gross margin of 58.1%, compared to 64.7% in the prior-year period. Third-quarter gross margin was 44.4%, reflecting the temporarily lower revenue base and the impact of shipment timing.

Profitability Measures

Net loss for Q3 improved significantly to $(8.0) million, compared to $(30.3) million in the prior-year quarter, driven by lower one-time expenses and improved operating discipline.
EBITDA improved to $(5.7) million, from $(23.1) million in Q3 2024.
Adjusted EBITDA was $(8.0) million, compared to $10.9 million in the prior-year quarter, reflecting timing and scaling costs associated with new initiatives.

AIRO continues to focus on improving operational efficiencies, managing costs, and scaling its high-margin defense and training businesses.

Balance Sheet and Liquidity

The Company ended the quarter with $83.7 million in cash and restricted cash.

A key financial milestone during the quarter was the completion of an upsized underwritten public offering, issuing 4,830,000 shares, including the full over-allotment option, for gross proceeds of $89.4 million. AIRO used $19.4 million of these proceeds to repurchase 1.1 million shares from existing stockholders, while the remaining funds will support:

Strategic growth initiatives
Expansion of drone manufacturing
Continued investment in R&D
Potential acquisitions that align with AIRO’s long-term strategic roadmap

The strengthened liquidity position enhances AIRO’s ability to meet rising demand and scale its next-generation UAS solutions for global defense and commercial customers.

Operational and Strategic Highlights

1. AIRO–Nord Drone Group Joint Venture (JV)

In November 2025, AIRO signed a definitive Joint Venture Agreement with Nord Drone Group, forming AIRO Nord-Drone, LLC. This joint venture is poised to become a major transatlantic defense production platform, combining:

AIRO’s U.S.-based aerospace manufacturing, procurement expertise, and government relationships
Nord Drone’s combat-proven UAS designs, advanced control systems, and established production facilities

Nord Drone currently manufactures 4,000+ drones per month, including FPV strike drones, loitering munitions, and multi-role bomber platforms, with scalability to produce up to 25,000 units per month. These systems are already deployed in active frontline environments, providing AIRO with access to highly validated, battlefield-tested technologies.

The JV will support U.S., NATO, Ukraine, and other allied markets, responding to urgent procurement needs and long-term modernization programs. Completion of the JV remains subject to regulatory and customary closing conditions.

2. Sky-Watch Awarded $4.5 Million for Counter-Electronic Warfare (CEW) Development

AIRO subsidiary Sky-Watch, together with Aalborg University and a leading technology partner, secured a $4.5 million award to advance Counter-Electronic Warfare capabilities across its UAS platforms.

Building on the combat deployment of the RQ-35 Heidrun—a drone specifically designed for GPS-denied and EW-contested environments—the CEW program will enhance:

Survivability in GNSS-denied airspace
Resistance to high-energy EW attacks
Mission continuity across contested theaters

The development program will begin in Q1 2026, with the first demonstrator expected mid-year.

3. Letter of Intent for Bullet Interceptor Drone JV

In October 2025, AIRO signed a non-binding Letter of Intent to form a 50/50 joint venture with Degree-Trans LLC (Bullet). Bullet’s advanced interceptor drone—capable of speeds up to 300 mph—is one of the fastest unmanned defense platforms on the market.

The JV would:

Integrate Bullet’s fixed-wing interceptor technologies into AIRO’s U.S. production pipeline
Expand availability to NATO, U.S., and Ukrainian defense markets
Support missile defense, anti-UAS operations, and high-speed interception missions

Execution of a definitive JV agreement is pending.

4. U.S. Manufacturing Expansion

AIRO has initiated plans for a new U.S. facility dedicated to:

RQ-35 Heidrun production scale-up
Next-generation drone development
Engineering support operations

The site will be AS9100-compliant and will serve both defense and select commercial customers, positioning AIRO for long-term, high-volume production.

5. Advancements in Electric Air Mobility and Canadian Operations

AIRO introduced a medium-lift cargo UAV concept leveraging Jaunt Air Mobility’s Slowed Rotor Compound (SRC) technology. This design supports middle-mile logistics, defense resupply, and autonomous cargo missions.

The Company also expanded development activities in Québec’s YMX Innovation Zone, where Jaunt is pursuing up to $34 million in Canadian funding, of which approximately 30% has already been committed.

AIRO expects full-year 2025 revenue to exceed 2024 revenue of $86.9 million, subject to timely supplier deliveries and customer acceptance of upgraded drone systems. With a robust fourth-quarter pipeline, expanded partnerships, and strengthening demand from U.S. and international defense markets, the Company anticipates a strong finish to the year and continued growth into 2026.

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