SKYX Platforms Corp. (NASDAQ:SKYX) Q1 2025 Earnings Conference Call May 14, 2025 4:30 PM ET Company Participants Rani Kohen - Founder, Inventor and Executive Chairman Steven Schmidt - President Leonard Sokolow - Co-CEO Conference Call Participants Patrick McCann - Noble Capital Jack Vander Aarde - Maxim Group Operator Good day, and welcome to the SKYX Platforms Corp. First Quarter 2025 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] Before we begin, please note that to ...

Financial Data and Key Metrics Changes - The company reported first quarter sales of $20.1 million for 2025, an increase from $18.9 million in the first quarter of 2024, marking a 6% year-over-year growth [5][12] - Gross profit for the first quarter of 2025 increased sequentially by 2% to $5.7 million, with gross margin improving by 4.82% compared to the fourth quarter of 2024 [7][13] - General and administrative expenses decreased by 17% to $6.6 million in the first quarter of 2025 from $7.9 million in the same quarter of 2024 [7][14] - Net cash used in operating activities decreased by 29% to $4 million in the first quarter of 2025 compared to $6.1 million in the fourth quarter of 2024 [13] - The adjusted EBITDA loss decreased to $3.6 million or $0.04 per share in the first quarter of 2025, compared to a loss of $4.5 million or $0.05 per share in the first quarter of 2024 [13][14] Business Line Data and Key Metrics Changes - The company continues to grow its market penetration of advanced and smart plug-and-play products, expecting to reach 30,000 homes in the U.S. and Canada by the end of the second quarter of 2025 [6][14] - The partnership with Profab Electronics aims to enhance production capabilities and efficiency, contributing to the company's growth strategy [15][16] Market Data and Key Metrics Changes - The total addressable market (TAM) in the U.S. is estimated at approximately $500 billion, with over 42 billion sealing applications available [10] - The company is focused on the retail and professional segments, with expected revenue streams from product sales, royalties, licensing, subscriptions, and monitoring [10] Company Strategy and Development Direction - The company is pursuing a razor-and-blade model, with a product range that includes advanced ceiling electrical outlets and smart home plug-and-play products [9] - The company is working on launching new patented products and enhancing its supply chain through partnerships with manufacturers in the U.S. and abroad [15][16] - The management emphasizes the importance of safety code standardization and is actively working with government organizations to expedite this process [17][45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth momentum and the potential to become cash flow positive in the second half of 2025 [6][12] - The management highlighted the importance of strategic investments and partnerships to support the company's growth trajectory [8][27] - The company is exploring various manufacturing options to mitigate tariff impacts and enhance domestic production capabilities [39][40] Other Important Information - The company recently secured approximately $4 million in additional equity, part of a broader financing round totaling approximately $15 million [7][8] - The management team includes prominent leaders with extensive experience in the electrical code and lighting industries, which is expected to enhance the company's credibility and influence [17] Q&A Session Summary Question: Current state of manufacturing and cost differences with U.S. partnership - The company is collaborating with Profab Electronics to automate production, with minimal cost differences anticipated [22][24] Question: Additional investment from the Shaner Group and hotel distribution channel - The company welcomes strategic investments and is working on product launches that will enhance its market position [26][28] Question: Goals for domestic manufacturing and automation timeline - The company aims to increase domestic production and is exploring options to achieve this, with automation expected to take time due to tooling and production processes [36][41] Question: Safety code standardization process and expected product orders - The company is exploring ways to expedite the safety code standardization process, with a focus on saving lives and mitigating injuries [42][44]

Financial Data and Key Metrics Changes - The company reported first quarter sales of $20.1 million for 2025, an increase from $18.9 million in the first quarter of 2024, marking the fifth consecutive quarter of year-over-year revenue growth [5][12] - General and administrative expenses decreased by 17% to $6.6 million compared to $7.9 million in the first quarter of 2024 [7][13] - Gross profit increased to $5.7 million, with a gross margin improvement of 4.82% sequentially from the fourth quarter of 2024 [7][14] - Net cash used in operating activities decreased by 29% to $4 million compared to $6.1 million in the fourth quarter of 2024 [13] - Adjusted EBITDA loss decreased to $3.6 million or $0.04 per share, compared to $4.5 million or $0.05 per share in the first quarter of 2024 [13][14] Business Line Data and Key Metrics Changes - The company continues to grow its market penetration of advanced and smart platform products, expecting to have products in 30,000 U.S. and Canadian homes by the end of the second quarter of 2025 [6][14] - The product range includes advanced ceiling electrical outlets and smart home plug-and-play products, with a focus on a razor and blade model for recurring revenues [8][9] Market Data and Key Metrics Changes - The total addressable market (TAM) in the U.S. is approximately $500 billion, with over 42 billion sealing applications [10] - The company is utilizing an e-commerce platform of over 60 websites to enhance market penetration in both retail and professional segments [11] Company Strategy and Development Direction - The company is focused on building a resilient, efficient, and localized supply chain, with partnerships in the U.S. and overseas [15] - Plans to launch new patented products are underway, with expectations for significant growth in the second half of 2025 [16][18] - The company aims to mitigate risks associated with tariffs by exploring domestic manufacturing options while maintaining relationships with international suppliers [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current momentum and significant activity within the business, indicating a strong belief in achieving cash flow positivity in the second half of 2025 [4][6] - The management team is actively working on safety code standardization, which is expected to enhance product adoption and market penetration [17][46] Other Important Information - The company secured approximately $4 million in additional equity through preferred stock investments, part of a broader financing round totaling approximately $15 million [7][8] - The company is focused on the razor and blade model, which includes a variety of smart home products that can lead to recurring revenue streams [9][10] Q&A Session Summary Question: Current state of manufacturing and cost differences with U.S. partnership - The company is collaborating with Profab Electronics to automate production, with minimal cost differences anticipated [22][23] Question: Additional investment from the Shaner Group and hotel distribution channel - The company welcomes strategic investments and is rolling out production for products needed in the hotel market [25][27] Question: Goals for domestic manufacturing and automation timeline - The company aims to increase domestic production and is exploring options for automation, which will take time to fully implement [36][41] Question: Safety code standardization process and expected product orders - The company is working with various organizations to expedite the safety code standardization process, with a focus on saving lives and mitigating injuries [42][46]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41276 SKYX PLATFORMS CORP. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organiz ...

Financial Performance - SKYX reported record revenues of $20.1 million for Q1 2025, a 6% increase from $18.9 million in Q1 2024[3] - Revenue for Q1 2025 was $20,113,938, an increase of 6% compared to $18,977,821 in Q1 2024[24] - Net loss for Q1 2025 was $9,052,128, compared to a net loss of $9,676,201 in Q1 2024, indicating a 6.4% improvement[24] - Net loss for Q1 2025 was $9,052,128, a decrease from a net loss of $9,676,201 in Q1 2024, representing an improvement of approximately 6.4%[26] - Adjusted EBITDA for Q1 2025 was $(3,624,931), compared to $(4,532,747) in Q1 2024, indicating a year-over-year improvement of about 20%[29] - Adjusted EBITDA loss per share improved to $(0.04) in Q1 2025 from $(0.05) in Q1 2024[12] Expenses and Liabilities - General and Administrative expenses decreased by 17% to $6.6 million in Q1 2025, down from $7.9 million in Q1 2024[3] - Cost of revenues for Q1 2025 was $14,402,488, up from $13,399,771 in Q1 2024, reflecting a 7.4% increase[24] - Total liabilities increased to $58,890,928 as of March 31, 2025, compared to $56,833,619 as of December 31, 2024[23] - Operating lease liabilities decreased slightly to $22,162,444 as of March 31, 2025, from $22,727,366 as of December 31, 2024[22] - Interest expense increased to $1,378,223 in Q1 2025 from $787,854 in Q1 2024, representing an increase of approximately 75%[29] Cash Flow and Investments - Net cash used in operating activities decreased by 29% to $4.3 million in Q1 2025 compared to $6.1 million in Q4 2024[9] - Cash used in operating activities decreased to $4,324,675 in Q1 2025 from $6,109,196 in Q1 2024, reflecting a reduction of approximately 29.2%[26] - Cash and cash equivalents at the end of Q1 2025 were $12,303,307, down from $19,789,663 at the end of Q1 2024, a decline of about 37.8%[26] - The company had a net cash outflow from investing activities of $413,365 in Q1 2025, compared to $53,647 in Q1 2024, indicating increased investment activity[26] - The company reported a net cash inflow from financing activities of $1,540,852 in Q1 2025, down from $3,522,253 in Q1 2024, a decrease of approximately 56%[26] Market and Growth Strategy - The company expects to achieve cash flow positivity in the second half of 2025, supported by significant projects and orders[1] - The total addressable market (TAM) in the U.S. is estimated at $500 billion, with over 4.2 billion ceiling applications[6] - The company aims to have its products in 30,000 U.S. and Canadian homes by the end of Q2 2025, with expectations for tens of thousands more in the second half of 2025[3] - SKYX's e-commerce platform, comprising over 60 websites, is expected to enhance market penetration and cash flow[16] - Management anticipates continued efforts to drive product adoption and market share growth despite current economic uncertainties[19] Shareholder Equity - Total stockholders' equity (deficit) was $(722,394) as of March 31, 2025, down from $4,053,428 as of December 31, 2024[23] - Weighted average number of common shares outstanding increased to 103,548,494 in Q1 2025 from 95,091,003 in Q1 2024[24] Other Financial Metrics - The company reported a depreciation and amortization expense of $1,007,817 in Q1 2025, slightly down from $1,060,571 in Q1 2024[29] - The company recognized $3,041,157 in share-based payments in Q1 2025, compared to $3,295,029 in Q1 2024, a decrease of about 7.7%[29] - Proceeds from the issuance of common stock in Q1 2025 amounted to $459,634, significantly lower than $3,655,755 in Q1 2024[26]

Core Insights - The company anticipates its products will be in 30,000 U.S. and Canadian homes by the end of Q2 2025, with expectations for further growth in the second half of 2025 [1][3] - The company is progressing with significant projects and orders that are expected to lead to cash flow positivity in the second half of 2025 [1][15] - General and Administrative expenses decreased by 17% compared to Q1 2024, while gross margin and gross profit improved by 4.8% and 2% respectively in Q1 2025 compared to Q4 2024 [1][3][8] - The company secured an additional $4 million in preferred stock funding, part of a broader financing round totaling approximately $15 million, led by The Shaner Group [1][11] Financial Performance - The company generated record revenues of $20.1 million in Q1 2025, a 6% increase from $18.9 million in Q1 2024 [3][8] - Cash, cash equivalents, and restricted cash as of March 31, 2025, were reported at $12.3 million, down from $15.5 million as of March 31, 2024 [10] - Net cash used in operating activities decreased by 29% to $4 million in Q1 2025 compared to $6.1 million in Q4 2024 [9] - Adjusted EBITDA loss per share improved to $(0.04) in Q1 2025 from $(0.05) in Q1 2024 [12] Market Strategy and Collaborations - The company is focused on a "Razor & Blades" business model, with advanced plug & play products expected to generate recurring revenues through upgrades and subscriptions [7][15] - The total addressable market (TAM) in the U.S. is estimated at $500 billion, with over 4.2 billion ceiling applications [7] - Collaborations with major retailers like Home Depot and Wayfair are expected to enhance market penetration [14][15] - A strategic partnership with JIT Electrical Supply will expand the company's footprint in the electrical and lighting markets [15] Safety and Standardization Efforts - The company is receiving support for its safety code standardization efforts from prominent leaders in government safety organizations [2][14] - The safety code team believes its products can significantly reduce risks such as fires and electrocutions, potentially saving insurance companies billions annually [7][14] Leadership and Management - The management team includes former executives from Fortune 100 companies, indicating strong leadership and industry experience [13] - Recent appointments include Huey Long as head of e-commerce and Greg St. John as President of Lighting, Fans, and Smart Home Products, aimed at enhancing market strategies [15]

Funding Announcement - SKYX Technologies has secured approximately $4 million in recent funding from strategic investors through the purchase of preferred stock at $2.00 per share [1] - This investment is part of a broader financing round totaling approximately $15 million to date, led by The Shaner Group, which owns and develops over 70 hotels worldwide [1][2] - The funding round also saw substantial participation from company insiders, including SKYX President Steve Schmidt and Co-CEOs Lenny Sokolow and John Campi, indicating their confidence in the company's strategic vision and growth trajectory [2] Company Overview - SKYX Technologies is focused on creating advanced and smart home platform technologies, holding over 97 issued and pending patents globally [3] - The company owns more than 60 lighting and home décor websites, catering to both retail and commercial segments [3] - SKYX aims to enhance safety and lifestyle in homes and buildings, positioning its products as essential in every room [3]

Core Insights - SKYX Technologies will host a Corporate Update call on May 14, 2025, to present its first quarter 2025 overview and financial results [1] - The company has over 97 issued and pending patents globally and owns more than 60 lighting and home décor websites [3] Company Overview - SKYX is positioned as a highly disruptive advanced and smart home platform technology company, aiming to enhance safety and lifestyle in homes and buildings [3] - The company emphasizes high quality and ease of use in its technologies, which are considered essential in every room of homes and buildings [3] Conference Call Details - The conference call is scheduled for May 14, 2025, at 4:30 PM Eastern Time, with dial-in options provided for U.S./Canada and international participants [2] - A playback of the call will be available until June 14, 2025, with specific instructions for accessing the replay [3]

Core Insights - SKYX Technologies has announced a strategic manufacturing partnership with Profab Electronics to enhance its supply chain capabilities and production efficiency [1][4] - The partnership aims to establish U.S.-based production capabilities, ensuring better control over manufacturing processes and maintaining high standards of quality and safety [4][3] - Profab Electronics specializes in high-quality electronic contract manufacturing, offering services such as new product introduction, production assembly, and integrated supply chain services [2] Company Overview - SKYX Technologies focuses on advanced and smart home platform technologies, holding over 97 patents globally and managing a portfolio of more than 60 lighting and home décor websites [1][6] - The company emphasizes high quality and ease of use in its products, which are designed to enhance safety and lifestyle in homes and buildings [6] - Profab Electronics has over four decades of experience in the electronic manufacturing sector, with a strong focus on advanced automation and scalable manufacturing solutions [2]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 48% in 2024, increasing from $58.8 million in 2023 to $86.3 million in 2024 [4][19] - The company achieved record revenue of $23.7 million in Q4 2024, compared to $22.2 million in Q4 2023 [6][19] - General and administrative expenses were reduced by $5.7 million to $31.4 million in 2024 from $37 million in 2023 [8][20] - The company reported a $3.3 million decrease in total liabilities from 2023 to 2024 [9][20] - Adjusted EBITDA loss per share improved to $0.13 in 2024 from $0.17 in 2023, with a 14% decrease in net loss to $13.1 million in 2024 from $15.2 million in 2023 [21][22] Business Line Data and Key Metrics Changes - Net sales of advanced and smart home-related products surged over 1,000% [5] - The company expects its products to be in 20,000 homes by Q1 2025, with additional tens of thousands of units expected in 2025 [5][11] - The company continues to focus on a razor and blade model, with a product range that includes advanced ceiling and electrical outlet technologies [12][26] Market Data and Key Metrics Changes - The company is expanding its market penetration in the U.S. and Canada, with significant collaborations with Home Depot and Wayfair [12][13] - The company anticipates significant projects and order growth, aiming to become cash flow positive in the second half of 2025 [5][10] Company Strategy and Development Direction - The company is focusing on enhancing its e-commerce platform and expanding its product offerings through collaborations with leading lighting companies [12][13][30] - The management emphasizes the importance of safety standardization for their technology, which is expected to gain support from safety organizations [6][23] - The company is optimistic about its growth strategy, particularly in the builder and pro segments, leveraging its razor and blade model [25][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving cash flow positivity in the second half of 2025, driven by significant projects and orders [10][20][75] - The management is encouraged by the quarter-to-quarter growth in revenues and the positive feedback from builders and hotel owners [25][70] Other Important Information - The company secured $1.45 million in funding in March 2025, including from a strategic investor [8] - The company has appointed key industry veterans to enhance its e-commerce and product strategy [17][29] Q&A Session Summary Question: Impact of tariffs and partnership with Ruee - Management indicated that they have been working with factories in Vietnam, Taiwan, and Cambodia to mitigate tariff impacts, ensuring that new tariffs will not affect their business [36][38] Question: Insights on mandatory approval process - Management noted that they are receiving support from high-level industry experts to expedite the safety standardization process for their technology [42][44] Question: Fourth quarter gross margin dip - Management explained that the dip in gross margin is temporary and attributed to the integration of new products with higher margins, expecting improvements in Q2 [47][49] Question: Update on Home Depot and Wayfair collaborations - Management provided an update on the ongoing product integration and training programs with Home Depot and Wayfair, expressing optimism for future growth [52][55] Question: Impact of new e-commerce head on strategy - Management highlighted that the new e-commerce head will enhance their online presence and competitive pricing strategy, aiming to improve conversion rates [66][68] Question: Expansion into residential homebuilder channel - Management confirmed that they expect to reach 20,000 homes by the end of Q1 2025, with plans for additional tens of thousands of units in the pipeline [70][72] Question: Path to cash flow positivity - Management outlined that achieving cash flow positivity will depend on increasing product offerings and securing significant projects and orders [74][75]