AIRO Restores Operating Profit After First-Quarter Loss
Second-quarter revenue reached $43.2 million, up 76% from a year earlier, and gross margin recovered to 64%.
AIRO Group Holdings (AIRO), a next-generation aerospace and defense company, reported second-quarter revenue of $43.2 million, up 76% from $24.6 million a year earlier, after a first quarter that the company had described as the low point for 2026.
The sequential recovery was the quarter’s defining turn. First-quarter revenue had been $8.9 million, with a 26.6% gross margin, a $17.2 million operating loss and a $15.5 million net loss. In the second quarter, gross margin was 64%, operating income was $1.7 million, and the company posted a net loss of $2.0 million, or $0.06 a share, versus net income of $5.9 million a year earlier.
Second-quarter growth reflected stronger-than-expected performance in the Drones segment, partially offset by underperformance in Avionics and Training. Gross profit was $27.7 million. The margin improvement, both sequentially and year over year, primarily reflected a favorable product mix shift back toward higher-margin drone products. Profitability also reflected higher revenue, improved gross margins, and the absence of initial public offering costs incurred in the prior-year period.
Adjusted EBITDA was $6.8 million, or 16% of revenue. Operating expenses totaled $26.0 million, including $7.6 million of research and development, $2.4 million of sales and marketing, and $16.1 million of general and administrative expense. General and administrative expense included $635,000 of strategic workforce transition costs.
Drone backlog stood at about $163 million as of June 30, 2026, up 9% from the first quarter. The majority of that backlog is expected to convert to revenue over the next 12 months. The figure excludes U.S. backlog, which is expected to meaningfully increase the overall backlog once included. Drones backlog is defined as unfilled orders with purchase orders or other definitive agreements with customers outside the United States, plus NATO-funded orders not yet under definitive agreement, against which the company expects to recognize the majority of revenue in the next 12 months.
Chief Executive Officer Joe Burns said the quarter demonstrated execution and momentum, with 76% revenue growth, significant margin expansion, and the $163 million drone backlog. He said the company achieved Blue UAS certification for the RQ-35, introduced the RQ-70 long-range ISR platform, and advanced next-generation cargo and ISR aircraft. In the first quarter, the company had begun marketing an AI-enabled RQ-35 variant, unveiled the JX250 and JC250 aircraft with first flight targeted for 2026, and said it was evaluating strategic alternatives for the Training segment.
Cash totaled $25.9 million as of June 30, with minimal debt. Accounts receivable rose to $46.2 million from $12.4 million at year-end 2025, primarily reflecting multiple drone deliveries late in the period. Subsequent to quarter-end, those payments were collected and cash was approximately $56 million as of July 31, 2026, a preliminary estimate that had not been audited.
The company reiterated full-year 2026 revenue growth guidance of 15% to 25% year over year and reiterated full-year Adjusted EBITDA guidance in the negative mid- to high-teens dollar range. Revenue recognition may vary meaningfully across quarters depending on contract timing, production schedules and delivery milestones.
Executive Chairman Dr. Chirinjeev Kathuria said growing customer demand, a strong drone backlog, and engagement across U.S. and allied defense markets position the company for long-term shareholder value.