XTI Aerospace Posts Diluted EPS of $0.19 and Revenue of $35.3 Million in Third Quarter
Key Facts
XTI Aerospace reported results on November 12 for the third quarter ended September 30, 2026, posting revenue of $35.3 million and diluted earnings of $0.19 per share, and reaffirmed its full-year outlook. The company said revenue rose 8.8% from the second quarter and 46.1% from third-quarter 2025 revenue on a comparable basis. By contrast, earnings per share alone do not reflect operating performance: the company posted an operating loss, while net income was supported by an accounting gain from changes in the fair value of warrant liabilities. The company’s figures did not include comparisons with analyst estimates for revenue or earnings per share. The results therefore center on sales growth, improved adjusted earnings, the source of the accounting gain and available liquidity.
Gross profit was $7.7 million, and the company said its reported margin reached about 21.7%, including one-time benefits. Excluding nonrecurring items, the margin fell to 16.0%, a measure showing how much gross profit remained from revenue after those benefits were removed. In the second quarter of 2026, revenue was $32.449 million and gross profit was $5.643 million, for a margin of 17.4%. The quarter-over-quarter comparison shows improvement in revenue and gross profit, while the adjusted third-quarter margin remains below the reported margin because of the differing treatment. XTI said some of the revenue increase came from orders in September ahead of the application of Section 232 tariffs.
The company reported net income of $26.575 million, compared with a diluted loss per share of $0.61 in the third quarter of 2025; diluted earnings per share in the current quarter were $0.19. But operations showed a loss of $4.998 million, while the gain from changes in the fair value of warrant liabilities was $32.023 million. The gap between net income and the operating loss highlights the effect of revaluing liabilities on the quarter’s accounting result. The reported net profit therefore is not operating profit, and positive earnings per share alone are not enough to describe the performance of the underlying business. The company did not compare these figures with analyst expectations in its results statement.
On an adjusted basis, earnings before interest, taxes, depreciation and amortization turned to $1.6 million in the third quarter, compared with a loss of $4.9 million in the second quarter of 2026. The company linked part of its expense control to reducing general and administrative expenses to 29.2% of sales, from 39.2% in the first half of the year. It said the cost restructuring included reducing headcount, consolidating office space, and ending consulting contracts and commitments with noncore vendors and software providers. The improvement in expenses and adjusted earnings presents a different picture from the reported operating loss, while the gain from revaluing warrants remained a separate factor in net income. As for the quarterly revenue increase, the company said some September orders preceded the start of tariffs, which an earlier statement said took effect on September 3.
Liquidity at September 30 included $5.7 million in unrestricted cash and equivalents, along with $11.9 million in additional borrowing availability under Drone Nerds’ borrowing base. Average monthly operating cash outflows for ADS and the parent company, excluding Drone Nerds, were about $1.1 million in the third quarter. The company said that average was down about 42% from the second quarter and 62% from the first quarter of 2026. These figures distinguish cash currently available from the credit facility that can be drawn, and also indicate a lower cash burn rate in the specified operations. According to the company’s statement, its outlook depends on continued access to the credit facility and no further material changes in tariff policy.
Management reaffirmed its 2026 revenue outlook of $125 million to $130 million and a gross profit margin of 17% to 19%. The interim chief executive said the company had halted its XTI aircraft business and was focusing on Drone Nerds and the commercial and enterprise aircraft market. He added that product growth and expense discipline “are expected to drive a transition toward positive operating cash flow during the fourth quarter of 2026.” This sets a specific timeline for the positive cash flow target in the fourth quarter, while the full-year outlook remains tied to the financing and tariff assumptions cited by the company. The outlook remains management’s projection alongside quarterly results showing sales growth and improved adjusted earnings, with an operating loss and net income affected by a gain from revaluing warrant liabilities.