Unusual Machines, Inc.

Unusual Machines reported more than $16.7 million in Q2 operating revenue, up 687% year over year from Q2 2025 and 107% from Q1 2026. GAAP net loss was approximately $7.8 million, or $0.16 per share, an improvement from $0.32 per share in Q2 2025. Gross margin was 34.7%, and adjusted EBITDA loss improved to about $400,000 from about $1.6 million in Q1. Revenue year to date was $24.8 million. The company ended Q2 with $229 million in cash, over $86 million in short-term investments, about $42.4 million in inventory and deposits, and $367.5 million in total working capital, with no debt. For Q3, management said its internal target is $12 million to $14 million in revenue, with an internal target of $25 million for Q4. Management also reiterated that it is preparing for heavier demand in late 2026 and into 2027, but said these are internal targets, not formal guidance.

CEO Allan Evans said the quarter marked a shift from hoping the company could be a major supplier in the drone industry to believing it will be one. He emphasized that demand remains strong, supply is constrained, and the business is being transformed with added manufacturing capacity, new product categories, and supply-chain work to support a larger opportunity. His tone was confident and urgent, with repeated emphasis on the need to build infrastructure quickly to keep up with demand from drone dominance and counter-drone programs.

CFO Brian Hoff highlighted $16.7 million of Q2 revenue, 34.7% gross margin, and operating expenses of $13.6 million, including $5.7 million of noncash stock compensation and about $1.8 million of nonrecurring expenses. He said adjusted EBITDA loss narrowed to about $400,000 from about $1.6 million in Q1. He also pointed to a $2.3 million realized gain from investments and about $1.8 million of interest income. On the balance sheet, he cited $229 million in cash, over $86 million in short-term investments, about $42.4 million in inventory and deposits, and $367.5 million in total working capital, saying the company is positioned to fund growth and inventory purchases.

Analysts focused on revenue momentum, working-capital needs, supply-chain bottlenecks, counter-drone demand, pricing, and the company’s long-term scale potential. Management said Q3 internal revenue targets are $12 million to $14 million and Q4 is targeted at $25 million internally, while stressing those are not formal guidance. Evans said supply constraints are coming from electronics vendors, sensors, magnets, and other parts, and that the company is working through multiple sourcing issues. He also said the counter-drone market could become larger and more consistent than the legacy FPV market, while confirming discussions with the OSC continue but offering no update on potential U.S. government investment.