SKYX Platforms Corp. (SKYX) Earnings Call Transcript

Good afternoon. and welcome to the SkyX Platforms Corporation second quarter 2026 earnings conference call. Before we begin, I'd like to remind everyone that during today's call, management may make forward-looking statements within the meaning of the federal security laws. These statements are based on current expectations and assumptions and involve risk and uncertainties that could cause actual results to differ materially from those expressed today. by such statements. For a discussion of these risks and uncertainties, please refer to Sky X Platforms Corp's filings with the Securities and Exchange Commission. company undertakes no obligation to update any forward-looking statements except as required by law. During today's call, management will also discuss certain non-GAAP financial measures where applicable reconciliations to the most directly comparable GAAP measures can be found in the company's earnings release and SEC filing. I would now like to turn the conference over to your host, Ronnie Cohen, founder and executive chairman of SkyX Platforms. Ronnie, please go ahead.

Thank you, Rob. Good afternoon. Welcome to our 2026 second quarter We will start, as you will see, we made tremendous progress here, and we will start with our president, Steve Schmidt. Steve?.

Ronnie, thank you very much. First of all, good afternoon to everyone and welcome to our second quarter 2026 earnings call. As you will see today, we are continuing to execute on all our priorities in the second quarter of 2026 as well as in the weeks that followed. First, a few financials. In Q2, our sales grew 14% to $25.3 million, compared to $22.1 million in Q1, 2026, representing 10 consecutive quarters of growth year over year as we continue to grow our market penetration. And all of this despite the real estate and home decor markets continuing to decline. Next, we are also reporting over $27.7 million in cash and cash equivalents as of June 30, 2026. We believe we have sufficient cash to achieve our goals, including becoming cash flow positive as we exit 2026. So now let's talk about many of the key initiatives and our progress to date. We recently announced that we will supply our technologies during a renovation of a Marriott City Center Hotel in Durham, North Carolina. In May, we announced our technology will become brand standard for European Hotel Developers Group, OTT, developer of over 250 hotels and buildings across Europe. Next, in May, we also announced that we will deploy our technologies to our first European hotel in France during a renovation of an historical architectural preservation hotel, the Grand Hotel du Parc, formerly the Grand Medicis Hotel. In June, we announced that we will deploy our technologies to our second European hotel during a renovation of a five-star Accor Hospitality Group hotel, Ozark Prague. Next, we signed an additional agreement with Group OTT Heritage Hospitality Group to deploy and market our technologies to the vast European hotel market of over 132,000 hotels. Importantly, in May 2026, we signed a license agreement for our advanced technologies with a global lighting company, Euroface, with operations in the US, Canada, and globally. We expect to deploy over 1 million units of our products, including our advanced smart home plug and play technologies during the course of our projects and to deliver over 100,000 units by the end of 2026 through our pro and retail segments. Our future projects in the U.S. and globally, which we've announced, include projects in North Carolina, Austin, San Antonio, South Florida, including Miami's new $4 billion smart city, New York, Europe, South Carolina, and New York. Saudi Arabia and Egypt. Next, despite record hot summer weather, our sales of our patented turbo heater fan are continuing to grow and we expect sales to significantly grow towards fall and winter seasons and we will provide additional products in new designs and sizes. Our technologies expansion provides additional opportunities for future recurring revenues through interchangeability, upgrades, AI services, monitoring, subscriptions, and more. Next, our enhanced safety code standardization team continues its progress towards its goal of a safety-mandated standardization in homes and buildings of our life-saving ceiling outlet and receptacle technology. tremendous amount of success and progress in Q2. So with that let me now turn the call over to Len Sokolow, our CEO, to provide additional details on our plan.

performance. Len? Great, thank you very much Steve. As Steve mentioned we generated an increase of 14% in revenues to a record $25.3 million in the second quarter of 2026. This is compared to $22.1 million in revenues in the first quarter of 2026 and an increase of 10% compared to 23 million for the second quarter of 2025. As of June 2026, we reported 27.7 million in total cash, cash equivalents and restricted cash. This is compared to 10.1 million as of December 31, 2025. Revenues for six months ended June 30, 2026 increased 10% to a record 47.4 million compared to 43.2 million for the six months ended June 30, 2025. The gross profit for the second quarter ending June 30 increased comparatively for the second quarter of 2025 by 4% to $7.3 million. And gross profit for the six months ended June 30, 2026 increased by 10% to $13.9 million compared to the $12.7 million. for the six months end of June 30, 2025. Our net cash used in operating activities was reduced by approximately 39% to $3.7 million in the second quarter of 2026 from $6 million in the first quarter of 2026. And the company reduced interest bearing debt by 2 million as of June 30, 2026. And with that,.

if I could turn it over to Ronnie, please. Thank you, Lenny. Thank you, Steve. As you can see, and as you see, we continue our progress with 10 consecutive year over year quarters of growth. Our builder and hotel segments are continuing to grow. Our value proposition is very strong in those 2 segments of hotels and builders. we save up to 90% of time and by this of installation or renovation and by this up to 90% of cost of renovation and installation. These million units, that we expect that we have in our pipeline and expect it to be supplied are not only we're going to generate revenue for us, it's important to say that those can create recurring revenues through AI services, monitoring, subscription, interchangeability, upgrades, or season or renovations. So this is just the beginning, what you see here, but this is definitely a segment we're very focused on and we believe then that very soon we'll have more to say in those segments. We are also progressing with our code mandatory standardization or making progress. Our code team believes that we're getting closer to our goal. Again, it's a long progress of 14 years now that we met all the conditions and beyond, and we expect this to keep on progressing in the next coming months. We are also making progress with insurance companies based on the safety elements our products. We have interests and discussions with insurance companies and we believe that as we continue our progress, we will have a to collaborate with insurance companies, that segment looks promising for our future. With that being said, we're also... in final stages of launching our AR driven software on our e-commerce platform and we expect in the near future to also enhance our e-commerce platform towards the builder and hotel segments as that is where we see tremendous growth opportunities for us and we are several discussions on additional projects in this area. With that being said, we'll open now for Q&A.

We welcome your questions. Thank you. Thank you, Ronnie. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please. please, while we poll for questions. Our first question comes from Jacob Stephan with Lake Street Capital Markets. Your line is now live.

Hey guys, appreciate you taking the questions. Congrats on a good quarter here. Maybe just first touching on the gross margin front, Q2 at 29% was down from kind of 30% in Q1. when we look at the second half and kind of correlating that with your comments on stronger second half, What specifically are you kind of factoring into kind of a gross margin front as we look at the back half of the year?.

This is a mixture of our products. As we continue our growth with the turbo heater fan and other products that we'll supply to our builder and hotel segment, the blend of revenue on this side will grow and blend the products with higher gross margins. will be much higher and we expect to grow that segment as we continue.

in the next coming quarters. Okay. And I guess on the B2B front, you know, You know, we've kind of talked about the 1 million units reserved for several quarters now. I guess, you know, can you provide any detail on, you know, what has shipped kind of in the first half.

what you are kind of expecting in the back half of the year? We are, yes, we are starting to supply some projects this quarter and continuing in Q4 and Q1 and 2027 in general. So we have a pipeline. and we're starting to supply to some of those buildings and hotels in mentioned in our segment.

GOT IT. AND LAST ONE FOR ME. ON GEN 3, YOU GUYS HAVE TALKED ABOUT A MID KIND OF Q3 I guess, you know, I didn't see anything about it in the press release, but maybe where does that launch stand today?.

with the heater turbo heater fan uh gen 3 yes okay the monitoring gen 3 uh gen 3 is uh We're happy to say that we already have some production samples in our hands that are testing very well. And at that stage, we'll need to wait for all the code approvals, the U.S., FCC, and other code approvals we need for that device and testing. That is not up to us, the timetable, but we're happy on our end that the software and hardware are in very good condition, and now it's about the regulators to get the final approvals. to start the mass production and to be able to supply it to the quarter. So in the next quarter, hopefully. But there's great demand growing for that product from several angles. And we are looking forward to finalizing all the code approvals that we can start delivering that product. Awesome. Very helpful. Thanks, guys. Thank you, Jacob. Great hearing from you.

Our next question comes from Joe Gomez with Noble Capital Markets. Your line is now live.

Good afternoon. Thanks for taking my questions. Thank you for having you. I just kind of wanted to follow up on the units. You talked about deploying more than 100,000 during 2026. Just, you know, how confident are you that you'll hit or exceed that goal this year?.