XTI Aerospace, Inc. reported its financial results for the third quarter ended September 30, 2026, and provided an outlook for the remainder of the year. The company, which operates through its subsidiary Drone Nerds, LLC, reported revenue of $35.3 million for the quarter. This figure represents an 8.8% increase from the second quarter of 2026 and a 46.1% increase compared to the third quarter of 2025 on a pro forma basis. The company attributes the sequential growth to demand observed in September ahead of Section 232 tariffs implemented during the year.
For the third quarter, the company reported a gross profit of $7.7 million. The gross profit margin was approximately 21.7%, inclusive of one-time benefits related to tariff recoveries. Excluding these non-recurring amounts, the gross profit margin was 16.0%. The company also reported an adjusted EBITDA of $1.6 million for the quarter, a significant improvement compared to negative $4.9 million in the second quarter of 2026.
Management highlighted a strategic pivot to focus on the Drone Nerds business, which has resulted in the discontinuation of the XTI aircraft business. The company has implemented cost realignment initiatives, including a reduction in corporate and development-division headcount, consolidation of its office footprint, and termination of non-core consulting and software contracts. These efforts contributed to a reduction in general and administrative expenses to 29.2% of sales from 39.2% in the first six months of 2026.
XTI Aerospace reiterated its full-year 2026 revenue guidance, projecting revenue between $125 million and $130 million. The company also forecasted a full-year 2026 gross profit margin of 17% to 19%. The outlook is contingent upon continued access to the company's asset-based credit facility and no material changes in tariff policy.
Regarding liquidity, as of September 30, 2026, the company held $5.7 million in unrestricted cash and cash equivalents. Additionally, there was $11.9 million of remaining availability under the borrowing base at Drone Nerds. During the third quarter, the company took significant action to reduce corporate and ADS headcount, resulting in average monthly operating cash outflows of approximately $1.1 million per month, a decrease of 42% compared to the second quarter.
In other business developments, the company announced a partnership with AirSight to expand drone detection offerings, introduced the ABZ Innovation C30 High-Pressure Cleaning Drone, and launched the Evolver Drone as a First Responder (DFR) program. The company also appointed Dr. Allan Evans as Chairman of the Board and Jeremy Schneiderman as Interim Chief Executive Officer.
