Fort Lauderdale, Florida, November 12th / PRNewswire / -- XTI Aerospace, Inc. (Nasdaq ticker: XTIA) ("XTI Aerospace", "XTI" or "the Company"), is also the parent company of Drone Nerds, LLC ("Drone Nerds"), the latter being a leading drone solutions platform for commercial, corporate, and government customers. The company today announced its financial results for the third quarter ending September 30, 2026, and reiterated its outlook for 2026.

Highlights of the Third Quarter of 2026(Excluding performance data marked with Inpixon; the relevant portion is included in the terminated business operations):

• Revenues amounted to 35.3 million US dollars, representing a quarter-on-quarter increase of 8.8% compared to the second quarter of 2026 and a year-on-year increase of 46.1% compared to the third quarter of 2025; the growth was driven by the anticipatory demand in September before the implementation of the 232 tariff measures this year.
• 7.7 million US dollars in gross profit
• Gross profit margin is approximately 21.7%, which includes one-time gains, mainly related to the recovery of tariffs; after excluding non-recurring amounts, the gross profit margin is 16.0%.
• Selling, general and administrative expenses (G&A) as a percentage of sales decreased to 29.2%, lower than 39.2% in the first half of 2026; cost restructuring measures include reducing staff in the company and development departments, consolidating office spaces, and terminating non-core consulting, supplier, and software contracts.
• After adjustment, EBITDA amounted to 1.6 million US dollars, while in the second quarter of 2026, there was a loss of 4.9 million US dollars.

XTI Aerospace Interim CEO Jeremy Schneiderman stated: "The work of shifting our strategic focus to Drone Nerds business has been basically completed. We have ceased the operation of our XTI aircraft business, reduced the expenses of our corporate headquarters, and are now focusing on the tremendous opportunities in the commercial and enterprise drone market. We have a unique advantage in helping customers manage drone projects, covering aspects such as aircraft payload, software, fleet management and training, as well as services and maintenance."

"In the past few months, we have continued to strengthen our product portfolio by adding high-pressure cleaning, airport detection, and first responder projects. We see opportunities for growth in our product portfolio, coupled with ongoing strict cost management, which we expect to drive the company to achieve positive ongoing operating cash flow in the fourth quarter of 2026."

2026 Full-Year Financial Outlook and Guidance:

• Revenues for the entire year of 2026 amounted to $125 million to $130 million.
• The gross profit margin for the entire year of 2026 is expected to be between 17% and 19%.

The company stated that its outlook assumptions include continued access to asset-based credit line support, and that there will be no further significant changes in tariff policies; it is also subject to the risks mentioned in the 'Cautionary Note on Forward-looking Statements' below.

Third Quarter of 2026 and Recent Events:

• Announces cooperation with AirSight, a provider of drone detection and airspace security software solutions, aiming to expand Drone Nerds's drone detection products in its enterprise solution portfolio.
• Introduces the ABZ Innovation C30 high-pressure cleaning drone into its product portfolio
• Launch of Drone as First Responder ( DFR ) project Evolver DFR, providing police, fire, and emergency services with everything needed to dispatch drones for emergency calls.
• Appoint Dr. Allan Evans as the Chairman of the Board of Directors, and appoint Jeremy Schneiderman as the Interim Chief Executive Officer.

Liquidity and Corporate Cost Cuts

As of September 30, 2026, the company held $5.7 million in unrestricted cash and cash equivalents, and there was still an available borrowing limit of $11.9 million under the Drone Nerds credit arrangement.

In the second and third quarters, the company took significant measures to reduce the number of employees and related compensation in the company and the ADS department, consolidate office spaces, and terminate non-core consulting, supplier, and software contracts. In the third quarter, the average monthly operating cash outflow for the company's ADS and company business (excluding Drone Nerds) was approximately $1.1 million, which is a decrease of about 42% compared to the second quarter and a decrease of 62% compared to the first quarter.

The company has also recently restructured notes totaling $4.7 million that had previously defaulted; at the same time, the company has obtained a cross-default exemption from its revolving credit line from JPMorgan Chase Bank ( JPMorgan Chase Bank , N.A ).

Unaudited supplementary consolidated financial information

For the purposes of this press release, "supplementary consolidated" financial information refers to the unaudited supplementary consolidated financial information described below.

In this press release, the company provides unaudited supplementary financial information that consolidates the historical operating results of XTI and Drone Nerds, assuming that both businesses have been operated as a consolidated entity during the preceding period. This financial information is intended to showcase the company's current business landscape after acquiring Drone Nerds and divesting its Industrial Internet of Things/Real-Time Locationing Systems business.

The unaudited supplementary consolidated financial information is not the “pro forma” financial information as defined in Article 11 of the S-X Regulations. This information has not been prepared in accordance with Article 11 of the S-X Regulations, nor is it the same as the unaudited pro forma consolidated financial information attached to the company’s Form 8-K/A current report submitted to the U.S. Securities and Exchange Commission on February 9, 2026. The latter was prepared in compliance with Article 11 of the S-X Regulations and covers the year ending December 31, 2024, as well as the nine-month period ending September 30, 2025; whereas the 2025 period mentioned in this press release is presented separately. This unaudited supplementary consolidated financial information is intended solely to assist investors in understanding the operating performance of the consolidated business, the timing of the acquisition, and its operational impacts, as well as the integration of the consolidated business. It should not be considered a substitute for the pro forma financial information that was previously prepared in accordance with Article 11 of the S-X Regulations and included in the company’s previous filings.

Therefore, this unaudited supplementary consolidated financial information is intentionally different from the financial information prepared for comparison presented in Pro Forma, K Filing, or the company's most recent annual report Form 10-K, but it does not replace the latter.

In addition, this unaudited supplementary consolidated financial information is not intended to indicate what actual results would have been achieved if the relevant companies had operated on a consolidated basis during the specified periods, nor does it predict what results may be achieved in the future. This information will not affect the consolidated balance sheets, income statements, cash flow statements, or statements of shareholders' equity previously disclosed by XTI or Drone Nerds.

The unaudited supplementary consolidated financial information does not include one-time transaction costs related to the acquisition of Drone Nerds.

Teleconference

The company will hold a live web conference on Thursday, November 12, 2026, at 4:30 PM Eastern Time in the United States. During this time, there will be a Q&A session with the interim Chief Executive Officer Jeremy Schneiderman and the Chief Financial Officer Brooke Turk.

Investors and analysts can participate and register in advance through the following link: https :// xti-aerospace-3q-2026-conference-call.open-exchange.net. The registration link can also be found under the “Investor Relations” section on the company’s website, in the “IR News & Events” subsection. Dial-in information will be provided after registration.

The replay of the event will be publicly released on the company's website at xtiaerospace.com under the investor relations section " IR News & Events " to all investors after the Q&A session is concluded, and it will be retained for 30 days.

Regarding XTI Aerospace, Inc.

XTI Aerospace, Inc. ("XTI") (Nasdaq ticker: XTIA) focuses on creating leading platforms for commercial and government drones in the rapidly growing drone systems industry. Through its subsidiaries Drone Nerds, LLC, and XTI, it provides support to enterprises and government clients in areas such as public safety, agriculture, construction, and energy, covering the entire lifecycle of drone projects, including hardware procurement and deployment, training, services, maintenance, as well as its proprietary Always Flying™ solutions. With its established customer base in the United States and reputation as a trusted solution provider, the company has become a market entry partner for drone manufacturers and software developers looking to expand their presence in the U.S. market.

For more information, please visit xtiaerospace.com. Follow XTI on LinkedIn, Instagram, X, and YouTube.

Warning Regarding Forward-Looking Statements

This press release contains certain “forward-looking statements” as defined by the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended. Except for statements regarding historical facts in this press release, all other statements are forward-looking statements.

Forward-looking statements can be identified by words such as “believes”, “continues”, “may”, “will”, “expects”, “intends”, “plans”, “targets”, “estimates”, “predicts”, etc. These statements are subject to risks, uncertainties, and other factors that may cause significant differences between actual results and those expressed or implied. Relevant risks include, but are not limited to: the company's ability to continue as a going concern, its ability to maintain its listing on NASDAQ for its common shares, the impact of Section 232 tariffs and other trade measures; pending regulatory investigations and proceedings related to the company and its subsidiaries; potential conflicts of interest that may arise from the temporary CEO's economic interests among the holders of notes related to the acquisition; market acceptance, regulatory requirements, supply chain conditions, technology development, integration of acquired businesses, the company's liquidity and ability to obtain additional capital under acceptable terms or not at all, the adequacy of the company's shareholders' equity and capital resources, as well as changes in applicable laws or regulations, fluctuations in customer demand and seasonal purchasing patterns, the company's ability to achieve expected gross margins and reduce operating costs, cash flow timing and inventory management, the outcome of pending legal proceedings involving the company and its subsidiaries, the company's ability to maintain relationships with key suppliers, restrictions and obligations under the company's ABL credit arrangements, risks associated with the contraction of the company's ADS divisions, as well as development risks of ATM divisions that have not yet generated revenue, and the potential impact of significant non-cash expenses related to changes in the fair value of warrant liabilities, as well as other risks and uncertainties described in the company's filings with the Securities and Exchange Commission. The financial outlook and other projections in this press release are based on management's current expectations and assumptions and are particularly subject to these risks. Except as required by applicable law, XTI assumes no obligation to update any forward-looking statements to reflect subsequent events or circumstances.Readers are advised to refer to the risk factors listed in the documents submitted by XTI to the US Securities and Exchange Commission, including its most recent quarterly report Form 10-Q, annual report Form 10-K, and subsequent filing documents.

Non-GAAP indicators

This press release contains several financial indicators that do not comply with generally accepted accounting principles in the United States (“GAAP”). XTI uses Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) and adjusted EBITDA as important supplementary indicators of the company's operating performance.

For the historical period, the reconciliation of these non-GAAP indicators with the most directly comparable GAAP indicators is shown in Appendix 1. As mentioned in the '2026 Annual Financial Outlook and Guidance' above, due to inherent difficulties in forecasting and quantifying certain reconciliation items, including but not limited to changes in the fair value of warrant liabilities, the company is unable to provide a forward-looking reconciliation of non-GAAP financial indicators with the most directly comparable GAAP indicators without making unreasonable efforts.

The company's financial outlook for 2026 is based on management's current expectations and assumptions regarding customer demand, product supply, gross margin trends, operating cost levels, and the timing of the return to normal working capital. These targets are forward-looking statements and are subject to the risks and uncertainties described in the documents submitted by the company to the U.S. Securities and Exchange Commission (“SEC”), including pending legal proceedings, liquidity, the company's capital structure, and other matters mentioned in the “Cautionary Notes Regarding Forward-Looking Statements” below.

The company has not provided a reconciliation of the forward-looking adjusted EBITDA or other forward-looking non-GAAP indicators with the most directly comparable GAAP financial indicators, as certain reconciliation items, including changes in the fair value of warrant liabilities and other items, depend on future events beyond the company's control and cannot be reasonably predicted or determined without unreasonable effort. Fluctuations in these items may have a significant and unpredictable impact on future GAAP results.

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Appendix 1

EBITDA and the adjusted EBITDA

XTI Aerospace defines EBITDA as the net profit (loss) before deducting interest, income tax, depreciation, and amortization. After adjustment, EBITDA is defined as the result after excluding certain items from EBITDA, including: (i) non-cash equity incentive expenses; (ii) severance and restructuring costs; (iii) changes in the fair value of warrant liabilities; and (iv) selected exceptional or non-recurring expenses.

The company believes that EBITDA and the adjusted EBITDA facilitate the Board of Directors, management, investors, and lenders to more consistently compare operational performance and set operational targets by excluding factors such as capital structure and other items that affect comparability over time. The reason the company discloses EBITDA and the adjusted EBITDA is that it believes these indicators, in addition to the GAAP indicator, can also provide useful information regarding business influencing factors and trends. EBITDA and the adjusted EBITDA are non-GAAP financial indicators and should not be used alone, nor should they replace the financial information prepared according to GAAP. The calculation methods for these non-GAAP indicators may differ from those of similar indicators used by other companies. The most comparable financial indicators are net profit, as well as the reconciliation information of GAAP and non-GAAP indicators listed in the table below.