Executive Summary

Q3 2025 revenue was $1.97M, down 40.0% year over year (vs. $3.28M in Q3 2024) and down 53.1% sequentially (vs. $4.20M in Q2 2025); gross profit was $0.76M and diluted EPS was ($0.09) as operating losses widened on lower volume .
Mix skewed to Drones ($1.06M) and Sensors ($0.91M); Europe/MEA and North America were the largest regions, but EMEA declined sharply vs. last year, driving the top‑line contraction .
No formal guidance was provided; management emphasized growing U.S. defense opportunities (DLA quotes for eBee TAC/VISION valid through Jan 2027) and a strengthened balance sheet (cash $16.63M at 9/30/25; subsequent ~$11.5M net from Series G) as execution enablers .
Key near‑term catalysts are U.S. defense procurement conversions (DLA submissions, Army eBee VISION sale) and distributor expansion; headwinds include YoY revenue decline and higher operating expenses tied to R&D and go‑to‑market investments .

What Went Well and What Went Wrong

What Went Well
- Defense traction: submitted multiple quotes via four primes to DLA (eBee TAC/VISION), valid through Jan 2027; U.S. Army 1‑4 IN purchased eBee VISION for JMRC training .
- International/regulatory progress: renewed ANATEL certification for eBee X in Brazil, reinforcing market access in a key LATAM market .
- Balance sheet flexibility: quarter‑end cash $16.63M, up from $3.61M at year‑end; subsequent Series G raised net ~$11.5M, while warrant liabilities fell to $0.12M from $16.4M at 12/31/24 .
What Went Wrong
- Revenue contraction: Q3 revenue fell to $1.97M from $3.28M in Q3 2024 and from $4.20M in Q2 2025, reflecting softer EMEA drones vs. last year and lower overall volume .
- Margin/opex pressure: gross profit fell to $0.76M; total opex rose to $3.91M (+12% YoY), driven by R&D, sales initiatives, and consulting tied to camera‑segment growth .
- No quantitative guidance: absence of revenue/margin outlook limits near‑term estimate calibration and visibility; management commentary focused on pipeline and production readiness rather than specific targets .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($)	$3,284,984	$3,650,000	$4,200,000	$1,970,209
Gross Profit ($)	$1,634,267	$2,130,000	$2,340,000	$758,977
Gross Margin (%)	49.8% (calc. from 34:7)	58.5%	55.7%	38.5% (calc. from 34:7)
Total Operating Expenses ($)	$3,495,427	$3,140,000	$4,410,000	$3,913,753
Operating Income (Loss) ($)	$(1,861,160)	$(1,000,000)	$(1,280,000)	$(3,154,776)
Net Income (Loss) ($)	$(3,459,754)	$7,060,000	$5,780,000	$(2,615,163)
Diluted EPS ($)	$(16.03)	N/A	N/A	$(0.09)

Segment and geography

Segment revenue (Q3 2025 vs. Q3 2024):

Segment Revenue ($)	Q3 2024	Q3 2025
Drones	$2,146,151	$1,057,717
Sensors	$1,070,396	$912,492
SaaS	$68,437	$0
Total	$3,284,984	$1,970,209

Geography (Q3 2025): NA $0.80M; EMEA $0.49M; APAC $0.41M; LATAM $0.22M; Other $0.05M .

KPIs and balance sheet

KPI	Q3 2024	Q3 2025
Cash & Equivalents ($)	$3,613,996 (12/31/24 reference)	$16,628,558
Working Capital ($)	N/A	$21,321,682
Warrant Liabilities ($)	$16,400,000 (12/31/24)	$123,000
Total Opex ($, quarterly)	$3,495,427	$3,913,753
9M Drone Revenue ($)	$4,644,177 (9M’24)	$6,028,625 (9M’25)
Subsequent Financing	—	~$11.5M net (Series G, Nov 10, 2025)

Estimate comparison (S&P Global)

Metric	Q3 2025 Actual	S&P Global Consensus
Revenue	$1.97M	N/A (unavailable via S&P Global)
Diluted EPS	($0.09)	N/A (unavailable via S&P Global)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal financial guidance (revenue/margins/OpEx, etc.)	FY/Quarter	Not provided	Not provided	Maintained: no formal guidance

Management reiterated focus on execution, defense pipeline conversion, production readiness, and balanced investment, without issuing numerical guidance .

Earnings Call Themes & Trends

No Q3 2025 earnings call transcript was available in our document set; themes below reflect management’s Q3 press release and 10‑Q commentary, and prior-quarter press releases.

Topic	Previous Mentions (Q1 2025, Q2 2025)	Current Period (Q3 2025)	Trend
U.S. defense pipeline/procurement	Q2: Blue UAS listings; record drone demand; 92% YoY drone sales; margin expansion .	DLA quotes via four primes for eBee TAC/VISION valid through Jan 2027; U.S. Army eBee VISION sale; late‑stage opportunities .	Improving pipeline; awaiting PO conversions.
Product innovation (sensors)	Q1/Q2: RedEdge‑P Dual momentum .	Launched RedEdge‑P Triple; early customer engagement .	Positive product cadence.
Regulatory/market access	—	ANATEL renewal for eBee X in Brazil .	Expanded LATAM access.
Distributor/channel expansion	—	New distributors in Egypt and Chile .	Broader reach.
Margins/cost discipline	Q1: GM 58.5%; opex down 27.9% YoY; Q2: GM 55.7% .	Lower volume pressured GM dollars; opex up 12% YoY on R&D/sales/consulting .	Mixed: investment vs. near-term deleverage.
Balance sheet/liquidity	Q1/Q2: improving cash .	Cash $16.6M; subsequent ~$11.5M net Series G; working capital $21.3M .	Strengthened runway.
Regional trends	Q2: strong global demand .	EMEA drones down vs. Q3 2024; NA steady; APAC/Sensors meaningful .	Mixed by region; tough EMEA comp.

Management Commentary

“With the support of our recent financing, we are better equipped to execute with discipline; strengthen production readiness; and advance priority customer programs as we expand our global footprint…with a growing focus on the burgeoning U.S. defense market.” — CEO Bill Irby .
“We believe this focus will help EagleNXT convert pipeline activity into durable, revenue‑generating programs.” — CEO Bill Irby .

Q&A Highlights

No Q3 2025 earnings call transcript was available; management’s qualitative commentary is sourced from the Q3 press release and 10‑Q .

Estimates Context

S&P Global Wall Street consensus for Q3 2025 revenue and EPS was not available; as a result, we cannot assess beat/miss vs. consensus. Actuals: revenue $1.97M; diluted EPS ($0.09) .
Given the YoY revenue decline and opex increase, we expect downward adjustments to near‑term revenue run‑rate models but improved liquidity should mitigate solvency concerns pending defense order conversion .

Key Takeaways for Investors

Defense conversion is the swing factor: multiple DLA quotes (valid through Jan 2027) and recent U.S. Army sale provide visible pipeline, but the timing of purchase orders will drive revenue re‑acceleration .
Near‑term top‑line reset: Q3 revenue decline reflects tough EMEA comp and lower volume; watch order intake and 4Q seasonality to gauge recovery trajectory .
Liquidity improved: $16.6M cash at quarter‑end and ~$11.5M net Series G proceeds extend runway for production readiness and commercial execution .
Investment for growth: opex up 12% YoY on R&D and sales initiatives; acceptable if it converts to defense/public safety wins and sensor commercialization (RedEdge‑P Triple) .
Watch mix and geography: EMEA drones fell sharply YoY; NA defense/public safety momentum could rebalance mix if U.S. orders land .
Structural cleanup: warrant liabilities reduced to $0.12M from $16.4M at 12/31/24, lessening non‑cash P&L volatility seen in prior quarters .
No guidance: absent numerical outlook, trading likely centers on contract announcements, DLA/DoD order timing, and additional distributor wins .

Supporting detail (select references):

Q3 2025 results and segment/geographic splits: 10‑Q (filed Nov 14, 2025) .
Q3 2025 earnings press release (Exhibit 99.1 to 8‑K, Nov 17, 2025) with operational updates and CEO commentary .
Prior quarter releases for trend context: Q2 2025 (Aug 15, 2025) and Q1 2025 (May 16, 2025) .
Balance sheet/liquidity and subsequent Series G financing details: 10‑Q and Nov 6/10, 2025 updates .

AgEagle Aerial Systems Inc. (UAVS)·Q3 2025 Earnings Summary