Swarmer, Inc Common Stock 2026 Q2 Earnings Call

Sir, please proceed. Thank you, operator, and thank you, everyone, for joining us.

The second quarter of 2026 marked our first full quarter as a public company and an important period of progress across the business. We successfully expanded our customer base, advanced deployments across multiple unmanned platforms, and continued investing in the people, technology, and partnerships that we believe will support our next phase of growth. From a broader perspective, our investment thesis remains unchanged. We continue to believe the defense and security industries are in the early stages of a fundamental transition toward autonomous and collaborative systems. Millions of drones are expected to be produced annually, yet the challenge is no longer simply manufacturing hardware. The challenge is coordinating, controlling, and scaling large numbers of autonomous platforms operating in complex environments. That is the problem Swarmer was built to solve.

Our software serves as the intelligence layer that enables one operator to coordinate large numbers of autonomous systems in real-time. Because we are platform agnostic, our objective is not to build a drone. Our objective is to become the software layer that powers autonomous systems across air, land, and maritime domains. What makes our platform unique is that it continues to learn from real-world operations. Since April of 2024, Swarmer technology has supported more than 100,000 combat missions in Ukraine. Those missions generate telemetry, sensor information, and operational feedback that allows us to refine performance and improve our AI and autonomy capabilities over time. We believe this real-world data advantage is difficult to replicate and serves as a meaningful differentiator as autonomy becomes increasingly important. During the quarter, we continued to make progress in implementing this strategy. Perhaps the most visible example was the expansion of our SkyKnight program.

As announced during the quarter, our customer expanded the original agreement, adding approximately $1 million of contracted license value, increasing the potential value of the combined contract to approximately $14.2 million if all options are exercised. Importantly, SkyKnight is not one of the largest drone manufacturers operating in Ukraine today. By our estimates, there are 20 or more drone companies in Ukraine alone who are currently shipping higher volumes than SkyKnight, and yet this single opportunity accounted for a contract of $3.9 million that could grow to $14.2 million if all options are exercised. We believe that this fact highlights the size of the opportunity in front of us. If a manufacturer of this scale can generate a software opportunity of this magnitude, we believe there are many additional manufacturers and platforms that could represent meaningful future opportunities as autonomy adoption continues to increase.

Before moving on, I'd like to briefly address the accounting treatment of the expanded SkyKnight program as it impacted our reported revenue for the quarter. As disclosed in today's earnings release, we received $1.4 million during the quarter under the SkyKnight program upon delivery of the software licenses to the customers. However, under the applicable accounting treatment, some of these amounts were not recognized as revenue and were instead recorded as an advance on our balance sheet. Importantly, this accounting treatment does not change the underlying commercial significance of the program. The licenses were delivered, and the wire transfer was received. We continue to believe that SkyKnight demonstrates a scalable model that can be replicated across additional manufacturers and platforms, creating future opportunities for software licensing revenue as adoption of autonomy continues to expand.

Beyond individual customer wins, we continue to strengthen the ecosystem around our platform, which we believe is a key driver of long-term adoption and growth. Each relationship addresses a different part of the value chain, whether that's computing hardware, data acquisition, interoperability, platform integration, or operational deployment. For example, our partnership with Oak Grove Technologies demonstrates successful integration of Swarmer software on a proven U.S. platform from a company based near Fort Bragg that is deeply embedded in the special operations community. Oak Grove is also well-known as a training facility and provides courses to operators on things like drone use. So a partnership with them helps us cover the awareness layer in ensuring that operators are exposed to the existence of Swarmer's advanced autonomy and the possibilities it brings. Our collaboration with Lantronix is aimed at creating a next-generation compute platform for small unmanned systems.

Most unmanned systems in Ukraine, if they require any level of autonomy, use either Raspberry Pi on the low end or NVIDIA Jetson on the high end. There is no good option in between. We see an opportunity to create a wedge in the market by owning the compute platform that could become the industry standard for autonomous drones, and by ensuring that everyone who uses this platform for their compute needs will also get Swarmer's operating system built in and will be able to upgrade to full autonomy at the click of a button. Our cooperation with Molfar gives us access to a large database of open-source intelligence data that can be used to improve our models.

Our cooperation with Brightline, which has already been in use by the special operations community in the U.S., allows us to gain access to operational data from a variety of unmanned platforms, even if the manufacturers of these platforms did not choose to integrate with us yet. We believe there is a data flywheel of success. Companies that get deployed more, gather more data, use this data to train better models, and therefore get deployed more because their models work better. We are already benefiting from this flywheel, but now with these additional sources of high-quality data, we can move even faster and train our models on data gathered by others too. Collectively, these relationships expand the reach of our software, increase the number of platforms we can support, and create additional opportunities to scale adoption over time.

We believe this ecosystem approach positions Swarmer to participate in a much larger portion of the autonomous systems market than would be possible through any single platform or program alone. While partnerships remain an important part of our growth strategy, we are also increasingly evaluating opportunities to invest in, acquire, and help scale complementary defense technologies that have been proven in real-world operational environments. As our Chairman, Erik Prince, recently discussed in his shareholder letter, many of the most innovative defense companies in the world are being built under demanding battlefield conditions, yet often lack capital, commercial infrastructure, and international reach needed to scale globally. We believe access to capital, strategic support, and distribution channels can be just as valuable as the technology itself.

Our objective is not simply to expand Swarmer's software footprint, but to build a broader platform that helps identify, accelerate, and commercialize proven defense technologies while creating long-term value for shareholders. Last but not least, as you'll hear from Brooks in a few minutes, we have raised over $26 million through our equity line of credit since it was announced. From a practical standpoint, we believe these additional resources may help us to explore opportunities and move faster when they arise, in accordance with the vision articulated by our Chairman, Erik Prince, in his letter to shareholders this quarter. Conceptually, we also believe it shows that investors are receptive to Erik's vision, and it has been well-received. Operationally, we also continued building the company. During the quarter, we expanded our engineering and product capabilities, increased integrations across partner platforms, and continued deploying systems with multiple manufacturers operating in active environments.

As we discussed last quarter, revenue is often a lagging indicator in our industry because defense procurement cycles are lengthy and deployments frequently precede scaled production. As a result, we continue to focus on indicators such as platform integrations, customer adoption, deployment success, and progression from evaluation to production. We believe we are making meaningful progress on each of these fronts. Looking ahead, we remain focused on expanding adoption across a wider range of unmanned systems, deepening our integration with manufacturers, supporting programs as they transition into scaled deployment, and evaluating strategic opportunities that can accelerate growth and strengthen our position within the autonomous systems ecosystem. We continue to believe Swarmer can become a foundational software layer for autonomous and collaborative systems across multiple domains. With that, I will turn it over to Brooks to walk through the financials in more detail.

Thank you, Alex. Revenue for the second quarter of 2026 was approximately $216,000, compared to $138,000 in the second quarter of 2025. As Alex discussed, we received $1.4 million under the SkyKnight program in the quarter upon delivery of the software licenses to the customers. However, under the applicable accounting treatment, approximately $200,000 was recognized as revenue, $100,000 was recorded as deferred revenue, and the remainder was recorded as an advance on the balance sheet. As a result, the financial statements reflect minimal revenue from the deal. Despite this accounting presentation, the underlying contract value remains unchanged, with the SkyKnight program representing approximately $3.9 million of contracted license value and up to approximately $14.2 million if all available options are exercised. We continue to view the program as an important commercial validation of our technology and a meaningful long-term opportunity.