Mobilicom Limited Warrants 2026 Q2 Earnings Call

Good afternoon, everyone. My name is Liad Gelfer, Mobilicom, Director of Finance. Welcome to Mobilicom First Half 2026 Financial and Operating Results conference call. Joining me today is Oren Elkayam, Mobilicom's Founder and Chief Executive Officer. Earlier today, Mobilicom issued a press release announcing its financial results and business highlights for the six months ended June 30, 2026. A copy is available on the investor relations section of the company's website. Before we begin, please note that today's call includes forward-looking statements under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially as described in our SEC filings, including our most recent Form 20-F. This statement speaks only as of today, and we undertake no obligation to update them. We will also refer to non-IFRS measures reconciled to IFRS in today's press release.

Today's agenda includes summary of the first half and a brief introduction to Mobilicom, financial highlights and our equity and cash position, first half achievements and design wins, progress against the 2026 outlook, our U.S. defense market position, CEO closing statement, and we will close with Q&A session. This webinar is being recorded and will be available for replay in irmobilicom.com. With that, I would like to turn the call over to Oren Elkayam, Founder and Chief Executive Officer.

Oren, please go ahead. Thank you very much, Liad, and good afternoon, everyone.

It was a good quarter with continuous execution of our vision. We can share that we had about $1.2 million in revenue for the second quarter. I would like to emphasize that 100% of our revenue this period were from off-the-shelf product sales to customers, all from enterprise, defense, mainly customers, and majority of that came from the U.S. market. We maintain a very high growth margin with our hardware solution in addition to the software licensing. We maintain strong financial cash position with nearly $16 million cash in hand, which is adjusted numbers. We launched two products in the period, the SkyHopper Multiband and the SCARPer Tactical, and won two new design wins based on those products.

One of which is with the Israeli tier 1 player in this market for a new short to mid-range loitering munition platform, which we anticipate that will have large volumes in the future. Ongoing monthly delivery cadence continue with our U.S. tier 1 customer for the U.S. Department of War program of records, and we also have seen the regulation by FCC and others. We received FCC Trusted Drone exemption status for all of our products, cyber, software, and the hardware solution. I think that based on those achievements, I want to thank our leaders and employees worldwide for the execution behind these results and a special thanks to Yossi Segal, our co-founder, for his continuous innovation and technology leadership. For those joining for us for the first time, the next 2 slides will give you some short overview of who is Mobilicom and company overview at a glance.

In high-level terms, Mobilicom offers the essential IP-based high-value cybersecurity software and hardware solution or subsystem, you can call it, for drones, robotics, and autonomous systems and manufacturers. Those are proprietary solutions that are powering, connecting, securing, safeguarding the autonomous systems. Mobilicom is not doing the drone. Mobilicom is doing the guts, the important IP-based subsystem to drones, robotics, and autonomous systems. We can say that investment in Mobilicom and Mobilicom itself is in the convergence of 3 major trends that we see in the market today. One is drone, second is cybersecurity, and third is robotics autonomy, which position the company extremely well for the growth that is expected from those markets. In this slide, you can see Mobilicom has 2 essential 2 segments. One is hardened hardware. Hardened is, in this case, meaning secured, more challenging to hack. And then a cybersecurity and software business.

Mobilicom hardware solution were certified as U.S.-approved products by the Department of War and the U.S. agencies. We have the Blue UAS Select, as you can see on the logo below. We have the Trusted Cyber Certification. We obtained the NDAA validation following testing, not with self-declaration, which is much more progress. We achieved the equipment frequency allocation for the Department of War under the DD 1494 and the newly released FCC Trusted Drone, a new regulation that was initiated this year to build and promise a U.S. ecosystem for the future. Our business model is very vivid. We get first foot in the door with secured hardware, which yielding 50%-60% growth margin, which is very fit for hardware. And then we cross-sell the cyber or software solution, which can get to up to 90% growth margin and has minimal competition today.

Since we are already a hardware supplier to drones and autonomous platform, the platform maker can incorporate cybersecurity or software from Mobilicom without undergoing any new procurement cycle. Mobilicom in the cybersecurity for small size autonomous system is a leader in this market and well-positioned to the success that is built on the fact that new standards are required and the change is coming in the coming quarters. The first half of this year shows that the model is working in both directions, and the clearest example is the AI-enabled autonomous weapon system design win that we had recently, where we sold both hardware and software and were selected together from day 1. I will come back to it at a later stage. I will now hand it over to Eliad for the first half financial highlights.

Thank you, Oren. The detailed figures are on the slides and in today's release. Rather than just read them, let me give you the four things they tell us. First, the shape of the half. The majority of our revenues landed in the second quarter. That is what the program moving to a monthly delivery looks like. During the quarter, we entered the monthly delivery cadence under the program of record, and we expect the cadence to continue through to the second half. Second, backlog. It is lower than the end of the first quarter, precisely because it shipped under monthly delivery cadence. Backlog behave as throughput rather than a stock of waiting orders. Orders received since the first half year end are already building it for the second half fulfillment. Third, margin. Held with this band our hardware model is built on.

Even as production volume stepped up, we are scaling without giving away the value of the IT. Fourth, the cost side. Our EBITDA loss works out to roughly half a million USD a month, in line with our adjusted cash burn. The model difference between the two is the working capital we deliberately built for second half deliveries. Both measures tell the same story, a controlled target investment in production readiness ahead of tier 1 volume. The IFRS net loss is a much larger figure, but the substantial majority of it is non-cash, share-based compensation, currency movement, and the warrant valuation. The full reconciliation was in today's release. Let's move to the equity and strong cash position slide. On the equity side, the capital structure on this slide is deliberately simple, and everything is visible.

One class of ordinary shares, a non-warrant position, and no leverage of any kind, no debt, no facilities, no ATM program. Two points worth taking away. The cash that came in during the half arrived from holders exercising instruments they already held, not from any new issuance. The warrants still outstanding represent additional potential capital of $12.6 million already built into the structure, sitting on the top of the cash we hold today, totaling $28.5 million. Put together, the balance sheet give us a multi-year runway and the freedom to execute the second half from strength. Back to you, Oren. Thank you, Liad.

I think that we can see here the focus on six achievements that we are presenting. I will not review them one by one, but I would like to give you my thoughts on where we should focus with those slides and achievements. One is we expanded onto new platform through two different routes. The larger munition win came through the tier 1 relationship we already hold, a new platform category for us, with the potential to scale alongside when the program advanced to mass production, which shows capability to have a strong relationship with a customer, especially tier 1, and then the success of first platform is yielding the expansion to a second platform, in this case, longer range, different mission. Mobilicom is working across the board with multi-platforms at the same tier 1 manufacturer, and that's important execution for us.

On the same point of expanding to new platforms, we have the AI-enabled autonomous system win place for our products. Two software, which is the ICE, electronic warfare resistance solution, and the OS3 cybersecurity for autonomy, and two hardware, the SCARPer data link, and the 10-inch Mobile Ground Control Station, all together to one onto a single new program spanning drone and ground robotics with the first order already delivered. That is a clear proof that we sell an integrated stack rather than components. An integrated stack means substantially more Mobilicom content, more value on every platform, and retention rate of the customer is the highest you can achieve. That is part of our unique position in the market, which is unmatched by any other player. Second point I would like to emphasize is the speed.