AIRSHIP(AISP) - 2025 Q1 - Quarterly Results

Q1 2025 Earnings Overview Q1 2025 Financial Highlights Airship AI reported Q1 2025 net revenue of $5.5 million, gross profit of $2.2 million (40% margin), and net income of $23.7 million, driven by non-cash fair value gains, with operating cash outflow of $2.1 million and $8.8 million in cash at quarter-end Q1 2025 Financial Highlights | Indicator | Amount (Million USD) | | :-------------------------------- | :------------------- | | Net Revenue | 5.5 | | Gross Profit | 2.2 | | Gross Margin | 40% | | Operating Loss | (1.7) | | Other Income (primarily from fair value changes) | 25.4 | | Net Income | 23.7 | | Basic Earnings Per Share | 0.75 | | Net Cash Outflow from Operating Activities | (2.1) | | Cash and Cash Equivalents (as of March 31) | 8.8 | Q1 2025 Operational Highlights Airship AI focused on strengthening sales and sales engineering teams, actively participating in industry trade shows, and transitioning to a partner-driven sales model in Q1 2025, reporting $2 million in backlog and approximately $135 million in validated sales pipeline - The company expanded its internal sales and sales engineering staff, adding experienced sales professionals[7] - Participation in multiple customer and partner trade shows significantly increased engagement and visibility[7] - A government-exclusive event was held, highlighting solutions for southern border challenges[7] Operational Data | Indicator | Amount | | :-------------------- | :-------------- | | Backlog (as of March 31, 2025) | $2.0 Million | | Validated Sales Pipeline (quarter-end) | ~$135 Million | Management Insights & Future Outlook Management Commentary Management noted robust Q1 2025 revenue and increased investments despite new government budget approvals, anticipating significant business activity from mid-Q2 into Q3 driven by pipeline progression, federal supplemental appropriations, and strong commercial interest, confident in achieving 30% annual revenue growth and positive cash flow - Despite new government budget approval challenges, Q1 2025 achieved $5.5 million in robust revenue and a 40% gross margin[6] - Significant business activity is anticipated to increase from mid-Q2 and continue into Q3[8] - Federal customers are expected to receive additional funding through supplemental appropriations, creating new market opportunities[9] - Strong market interest and early success have been observed in the commercial sector through collaboration with integrators and partners[10] - The digital transformation strategy focuses on leveraging edge AI to address existing and emerging threats in public safety and security[11] - Multiple new AI products, including advanced computer vision analytics and generative AI applications, are expected to launch in 2025[11] - The company is confident in achieving 30% annual revenue growth and positive cash flow operations[13] 2025 Outlook and Strategic Initiatives Airship AI projects 30% revenue growth and positive cash flow for 2025, driven by strategic investments in sales, new Outpost AI products, Acropolis platform innovation, and commercial market expansion, supported by up to $25 million in common stock offerings and a $50 million S-3 shelf registration - Anticipates 30% revenue growth and positive cash flow for calendar year 2025[7] - Tactical and strategic investments will be made in sales and business development organizations[7] - New Outpost AI products will be released, and custom AI models supporting emerging edge analytics workflows will be expanded[7] - Continued innovation of the core Acropolis software platform will support cloud deployments in highly secure operating environments[7] - Expansion opportunities will be developed and executed in commercial and retail markets, especially with companies combating organized retail crime[7] - An at-the-market offering agreement has been entered into with Roth Capital Partners, LLC, allowing for the issuance of up to $25 million in common stock[7] - The company's S-3 shelf registration statement became effective on March 21, 2025, permitting the sale of up to $50 million in securities[7] Company Information About Airship AI Holdings, Inc. Founded in 2006 and headquartered in Redmond, Washington, Airship AI is a wholly-owned U.S. technology company specializing in AI-driven video, sensor, and data management surveillance platforms to enhance public safety and operational efficiency for public sector and commercial clients - Airship AI, founded in 2006 and headquartered in Redmond, Washington, is a wholly-owned U.S. technology company[14] - Its core business is an AI-driven video, sensor, and data management surveillance platform aimed at enhancing public safety and operational efficiency[14] - Key products include Outpost AI edge hardware and software, the Acropolis enterprise management software stack, and Command visualization tools[14] Forward-Looking Statements This section contains forward-looking statements under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, covering financial, performance, and operational metrics, market opportunities, technological developments, and business relationships, based on management's current expectations and assumptions, with no obligation to update - Statements are forward-looking under the U.S. Private Securities Litigation Reform Act of 1995 safe harbor provisions[16] - Cover estimates and projections regarding financial, performance, operational metrics, market changes, technological developments, and customer relationships[16] - Based on management's current assumptions and expectations, subject to risks and uncertainties detailed in the company's Form 10-K and other SEC filings[16] - The company undertakes no obligation to update these forward-looking statements[17] Financial Statements Condensed Consolidated Balance Sheets As of March 31, 2025, Airship AI's total assets were $12.9 million, with total liabilities significantly decreasing to $36.4 million due to substantial gains from fair value changes in warrant and contingent liabilities, improving the shareholder deficit to negative $23.5 million Condensed Consolidated Balance Sheet Highlights (as of March 31) | Indicator | March 31, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------- | :---------------- | :----------- | | Cash and Cash Equivalents | $8,812,178 | $11,414,830 | -$2,602,652 | | Total Current Assets | $11,662,139 | $12,659,470 | -$997,331 | | Total Assets | $12,931,066 | $13,707,454 | -$776,388 | | Total Current Liabilities | $6,295,009 | $5,654,790 | +$640,219 | | Warrant Liabilities | $18,659,435 | $34,180,618 | -$15,521,183 | | Contingent Liabilities | $8,199,079 | $23,304,808 | -$15,105,729 | | Total Liabilities | $36,440,615 | $66,730,591 | -$30,289,976 | | Total Stockholders' Deficit | $(23,509,549) | $(53,023,137) | +$29,513,588 | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) In Q1 2025, Airship AI's net revenue was $5.5 million, a significant decrease from Q1 2024, with a gross profit of $2.2 million (40% gross margin), and despite an operating loss, the company achieved a net income of $23.7 million and basic EPS of $0.75, driven by non-cash gains from fair value changes Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Highlights (as of March 31) | Indicator | March 31, 2025 | March 31, 2024 | Year-over-Year Change | | :-------------------------------------- | :------------- | :------------- | :-------------------- | | Net Revenue | $5,503,028 | $10,575,015 | -$5,071,987 | | Cost of Sales | $3,268,024 | $7,946,888 | -$4,678,864 | | Gross Profit | $2,235,004 | $2,628,127 | -$393,123 | | Gross Margin | 40.6% | 24.8% | +15.8 pp | | Operating Loss | $(1,714,357) | $(1,402,533) | -$311,824 | | Other Income (Expense), Net | $25,422,342 | $(30,561,936) | +$55,984,278 | | Net Income (Loss) | $23,707,985 | $(31,964,469) | +$55,672,454 | | Basic Earnings Per Share | $0.75 | $(1.40) | +$2.15 | | Diluted Earnings Per Share | $0.61 | $(1.40) | +$2.01 | - Gain from fair value change in contingent liability: $9,823,605 in Q1 2025, compared to a loss of $21,484,850 in Q1 2024[22] - Gain from fair value change in warrant liability: $15,521,183 in Q1 2025, compared to a loss of $6,847,091 in Q1 2024[22] Condensed Consolidated Statements of Cash Flows In Q1 2025, Airship AI's operating activities resulted in a cash outflow of $2.1 million, with financing activities leading to a net cash outflow of $0.5 million, primarily due to founder advance repayments, resulting in a $2.6 million net decrease in cash and cash equivalents, ending the quarter at $8.8 million Condensed Consolidated Statements of Cash Flows Highlights (as of March 31) | Indicator | March 31, 2025 | March 31, 2024 | Year-over-Year Change | | :-------------------------------------- | :------------- | :------------- | :-------------------- | | Net Cash Outflow from Operating Activities | $(2,097,844) | $(1,695,084) | -$402,760 | | Net Cash (Outflow) Inflow from Financing Activities | $(497,399) | $293,249 | -$790,648 | | Net Decrease in Cash and Cash Equivalents | $(2,595,243) | $(1,401,835) | -$1,193,408 | | Cash and Cash Equivalents, End of Period | $8,812,178 | $1,725,817 | +$7,086,361 | - Repayment of founder advances totaling $0.6 million[24] - Non-cash item: Issuance of common stock for contingent shares totaling $5,282,125[24]