Summary of Palladyne AI FY Conference Call Company Overview - **Company Name**: Palladyne AI (NasdaqGM: PDYN) - **Headquarters**: Salt Lake City, with offices in Kansas City, Tucson, Huntsville, and Boston - **Employee Count**: Approximately 140 as of the end of last year - **History**: Over 30 years in operation, initially focused on R&D with the Pentagon, acquired by Raytheon in 2007, and went public through a D-SPAC merger in 2021 [1][2][3][4] Core Business Segments Artificial Intelligence Products - **SwarmOS**: Drone swarming AI software enabling autonomous collaboration among drones without human intervention [5][6] - **Palladyne IQ**: AI for industrial robots allowing rapid task learning and multi-tasking capabilities [7][8] Defense Applications - **Robotic Applications**: AI systems used for tasks like corrosion and paint stripping on aircraft parts, traditionally labor-intensive [9] - **Partnerships**: Collaborations with companies like Red Cat and Draganfly for drone development [9][10] - **Manufacturing Capabilities**: Acquired companies producing precision parts for defense systems like the F-35 and Abrams tank, enabling vertical integration from design to production [10][18] Financial Performance and Projections - **Revenue Guidance for 2026**: Expected revenues between $24 million and $27 million, with a focus on modest market penetration of AI products [22][24] - **Cash Position**: $47 million cash on hand as of the end of last year, with a monthly R&D expenditure of approximately $2.1 million [22][23] Market Position and Competitive Advantage - **Embodied AI**: Distinction from cloud-based AI, with real-time processing capabilities and no reliance on cloud connectivity, reducing latency and costs [29][30] - **Cost-Effectiveness**: Development of low-cost, attritable munitions and UAVs, with a focus on economic attrition warfare [16][26] Industry Trends and Opportunities - **Defense Modernization**: Alignment with U.S. government initiatives to modernize the defense industrial base, creating favorable conditions for Palladyne AI's products [25][26] - **Market Expansion**: Potential for growth in both defense and commercial sectors, leveraging advancements in AI technology [24][25] Key Takeaways - **Innovative Development**: Rapid product development cycles, exemplified by the SwarmStrike and Banshee systems, which can go from concept to test flight in under six months [14][15] - **Market Readiness**: Products are in the early stages of market introduction, with ongoing trials and support from key defense customers [5][24] - **Long-Term Vision**: A strategic approach to growth with a focus on education and market penetration over the next three years [24]

America's Cross-Domain Force Multiplier NASDAQ: PDYN / January 2026 Disclaimer This presentation and any related oral statements contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited to, statements regarding Palladyne AI's preliminary unaudited revenue for the year ended December 31, 2025, preliminary unaudited backlog and cash and cash equivalents as of December 31, 2025, estimated cash burn for 2026, anticipated growth and ...

Summary of Palladyne AI Conference Call Company Overview - **Company**: Palladyne AI (NasdaqGM:PDYN) - **Industry**: Defense Technology and Artificial Intelligence Key Points and Arguments Strategic Transformation - Palladyne AI is undergoing a strategic transformation to become a fully integrated AI and defense technology company through the acquisitions of GuideTech and Crucis [4][8][20] - The launch of Palladyne Defense marks a significant shift from a pure-play AI company to a vertically integrated defense technology business [7][8][20] Product Offerings - **Palladyne IQ**: Powers robotics automation for commercial and industrial robots [6] - **Palladyne Pilot**: Provides advanced autonomous cooperation for unmanned systems, rebranded as **SwarmOS** for defense applications [6][11] - **Banshee**: A low-cost, reusable precision loitering munition designed for tactical operations [14][15] - **SwarmStrike**: A long-range, intelligent loitering munition that delivers cruise missile capabilities at lower costs [16] Market Demand and Positioning - The Department of Defense (DoD) is shifting focus towards cost per effect, reshoring production, and integrating AI into mission systems [9][10] - Palladyne Defense aims to fill a market gap by providing agile, vertically integrated solutions that can scale production and meet rapid iteration requirements [10][20] Financial Projections - The combined acquisitions are expected to triple Palladyne AI's revenue from approximately $8 million in 2024, with positive adjusted EBITDA contributions [20][21] - An 18-month backlog exceeding $10 million is anticipated, including contracts with the U.S. Air Force and Navy [21][24] Acquisitions and Integration - **GuideTech**: Contributes engineering talent and rapid prototyping capabilities, enabling the transition from concept to prototype in less than six months [12][40] - **Crucis**: A certified U.S. manufacturer that supports major defense programs and aligns with national strategies for reshoring production [18][19] Operational Structure - Palladyne AI will operate through two focused businesses: Palladyne Defense and Palladyne Commercial, both powered by a shared autonomy core [22][23] - The defense segment integrates SwarmOS, GuideTech, and Crucis to serve government and public safety customers [22] Leadership and Expertise - The leadership team has been strengthened with experienced individuals from military and national security backgrounds, enhancing the company's strategic direction [26] Future Outlook - Palladyne AI is positioned for significant growth in 2026, with expectations of increased customer engagement across its portfolio [27] - The company is focused on advancing its technology and integrating new products to meet the evolving demands of the defense sector [27][28] Additional Important Information - The company has a strong financial foundation with $57.1 million in cash and equivalents as of September 30 [24] - A new U.S. patent has been announced covering key elements of embodied AI and autonomous coordination capabilities [24] - The sales cycle for defense products remains uncertain, but the acquisitions are expected to provide more avenues for monetization [48][49] This summary encapsulates the critical aspects of Palladyne AI's conference call, highlighting the company's strategic direction, product offerings, market positioning, financial outlook, and operational structure.