Palladyne AI Corp. Common Stock Jefferies Global Industrials Conference 2026

First and foremost, we are an embodied AI company. That is really central to everything that we do. And embodied AI means we make artificial intelligence software that sits on machines to make machines smarter. It's not something that sits in the cloud. It sits on the machine and enables the machine to be able to observe, reason, and act much in a similar way to the way we humans do. So that's central to what we do. Beyond that, we have weapons systems that are designed from the ground up to be able to leverage our AI. And we also manufacture components, both avionics and precision components, that are designed to be built into weapons systems that leverage our AI. So we are both a defense prime.

We are also a subcontractor to other defense primes, and we are happy to sell our software and our products both directly to the government and to other primes.

I came back to the company 2 and a half years ago, and we did a pivot then, and we decided to focus primarily on our AI software, and we started planting a lot of seeds. I don't know if you're a gardener, but I like the analogy. We planted a lot of seeds back then. In year one, we had little shoots that came up, and we were encouraged, but there wasn't a lot to be able to point to publicly and say there was reason for a lot of enthusiasm. We're now going on, this will be coming up on my third year with the company, back at the company. I can say now we're getting a serious crop to harvest. We're starting to do some of that harvesting.

Across every one of the initiatives in the company, whether it is our autonomous swarming software for drones, whether it is our industrial robotics AI software to enhance manufacturing, whether it is the drones that we've developed internally, or our avionics and precision components business, we are seeing significant interest across the board, and we're generating meaningful revenues compared to where we were historically. I feel like it's harvest time, and it's across the company, that's why I'm as enthusiastic as I am. Most importantly, back to the AI theme, we have an entirely different type of AI architecture than anybody else has tried to deploy. That is a leap of faith that we had to take, that our customers had to take, and that our investors had to take, and we're seeing it pay off.

So much so now that we have more calls coming in from potential customers than we are making going out. To me, that's a kind of a tide change, and I like that.

I have to say this up front. My lawyers say that I can't reiterate guidance because of where we are in the quarter, so I won't get to the specifics of the guidance. What I will say is when you take a look at the $13 million of new contracts in just the second quarter, where that put us from a backlog perspective, the fact that we don't talk about backlog, and we don't include numbers in backlog unless it is contractually committed. So it is a binding legal commitment from our customer. You look at that kind of ramp, and we are just in the first inning.

I think when I look at where we are from kind of the progression of that business and those shoots coming up that I was talking about ready for harvest, I think it's all trending in exactly the right direction.

Most of the trials or demonstrations that we have been doing for the last year or so have been on the AI side. That is the high margin software business. As we scale that does not require more CapEx. It does not require a lot more OpEx. Once we created the software, we start stamping it out, sending out copies of it. That is what our primary focus has been. We have had a number of successful exercises with the U.S. Army. We have had a number of successful demonstrations with the Air Force. As I said, that is now yielding inbound calls to us. Word is spreading throughout the Department of War about our capabilities, and we are getting inbound calls from folks we have never talked to or heard of before. That is extremely encouraging. We are getting glowing reviews on the way the product is performing, and most importantly, we are being told, of course, this is not statistically significant in any way, but we are being told that nobody else's software does anything close to what ours does.