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    KULR
    Earnings call· Jun 2026(Q2 FY26)

    KULR Technology Group Q2 FY26 earnings call KULR

    Aug 13, 2026 Source

    Executive summary

    KULR Q2 FY26 — Strategic Refocus Amidst Operational Headwinds

    KULR faced significant revenue and profitability challenges in Q2 FY26, reporting a gross loss and a substantial net loss, primarily due to supply chain bottlenecks and internal execution issues. The company is strategically refocusing on its core KULR ONE battery business, divesting Bitcoin holdings, and building out its Texas manufacturing capacity. Management anticipates a stronger second half, driven by the operationalization of the new facility and increasing demand from the U.S. drone market.

    Highlights

    5

    • SG&A declined approximately 9% year-over-year in Q2 FY26, reflecting early cost discipline.

    • R&D expenses were about 3% lower in H1 FY26 compared to the prior year.

    • The company repaid its $20 million credit facility in full, resulting in $0 debt and approximately $60 million cash on the balance sheet.

    • Secured initial defense drone battery orders from a U.S. drone maker, representing a customer opportunity exceeding $5 million.

    • New Texas facility and production lines are expected to be operational and contributing in Q3 FY26.

    Concerns

    5

    • Q2 FY26 revenue was $2.1 million, down significantly from both prior year and Q1 FY26.

    • The company reported a gross loss in Q2 FY26.

    • First half net loss was approximately $51 million, including a $31.4 million non-cash mark-to-market change from digital asset holdings.

    • Supply chain constraints caused delays in production and delivery of battery products in Q2 FY26.

    • Execution focus issues arose from carrying more customer programs than resources could execute, leading to delayed shipments.

    Guidance & targets

    5
    CategoryTargetConfidence
    Texas facility and battery production lines
    operational and contributing to the business
    high materiality
    High
    Delayed shipments
    recovering
    medium materiality
    Medium
    Pipe volumes
    starting to ramp
    medium materiality
    Medium
    NDA-compliant power electronics and chargers
    shipping
    medium materiality
    High
    U.S. drone procurement cycles
    converting into orders
    high materiality
    Medium

    Operational metrics

    21
    Revenue
    $2.1Mdown significantly from prior year and Q1
    Q2 FY26

    Second quarter revenue fell short of expectations.

    Energy Management platform revenue
    $4.76Mslightly higher year-over-year vs $4.73M
    H1 FY26

    Core energy platform business remained essentially stable on a first half basis.

    Total revenue
    $6.03Mvs $6.1M a year ago
    H1 FY26

    Total first half revenue.

    SG&A spending
    declined ~9%YoY
    Q2 FY26

    Reflects early progress in making the company more efficient.

    SG&A spending
    declined ~5%
    H1 FY26

    SG&A declined approximately 5% in the first half.

    R&D expense
    ~3% lower
    H1 FY26

    First half R&D expense was also about 3% lower.

    Net loss
    ~$51M
    H1 FY26

    Approximately $51 million first half net loss.

    Non-cash mark-to-market change (Bitcoin)
    ~$31.4M
    H1 FY26

    Reflected in the first half net loss, unrelated to operating performance.

    Cash balance
    ~$60M
    current

    With approximately $60 million on our balance sheet and no debt, we believe we have the financial resources to execute our growth strategy.

    Credit facility repaid
    $20Min full
    post Q2 FY26

    Repaid using proceeds from Bitcoin sales, releasing 565 Bitcoin pledged as collateral.

    Bitcoin sold
    333
    post Q2 FY26

    Used proceeds from the sale of 333 Bitcoin to fully repay the $20 million Coinbase loan.

    Bitcoin pledged as collateral
    565released
    post Q2 FY26

    Released after repayment of the $20 million Coinbase loan.

    Mining services agreement termination fee
    $150k
    post Q2 FY26

    Terminated mining services agreement, eliminating about $2.1 million of remaining operating expense commitments.

    Raw materials inventory increase
    fivefold
    since end of 2025

    Investing more in production readiness, inventory expected to increase further in H2.

    Defense drone battery customer opportunity
    exceeds $5M
    Q2 FY26

    Secured initial defense drone battery orders from a U.S. drone maker participating in the drone dominance initiative.

    Drone dominance program budget
    $1.1B
    this summer

    Moved from plan to purchase order this summer.

    Drone units delivered (initial order)
    30,000
    current

    The first delivery order has been accepted, roughly 30,000 units are being delivered right now.

    Drone units to be ordered (next batch)
    60,000
    September

    The department has said it will order 60,000 more in September.

    Drone units target
    hundreds of thousands
    by 2027

    On the way to hundreds of thousands of drones by 2027.

    FY27 budget request for drones and counter drone systems
    >$70B
    FY27

    The largest such investment in U.S. history.

    KULR ONE Air solid-state cells energy density
    >350
    current

    Demonstrated KULR ONE Air with next-generation solid-state cells at over 350 watt hour per kilogram.

    Product announcements

    4
    ProductTypeDetails
    KULR ONE Air with next-generation solid-state cellsmilestone
    NDA-compliant 6S chargerslaunch
    18S charger prototypemilestone
    NDA-compliant chargerslaunch

    Deals & partnerships

    2
    Oracle SpaceBattery providers for orbital transport mission

    KULR was selected by Oracle Space as battery providers for its orbital transport mission.

    U.S. drone makerInitial defense drone battery ordersexceeds $5M

    Secured initial defense drone battery orders from a U.S. drone maker participating in the drone dominance initiative.

    Capital programs

    1
    Texas facility expansionunderway

    Benefit: approximately 25,000 square foot facility, new automated production line for both cylindrical and pouch cells

    The new Texas facility was not yet contributing in the second quarter. The facility and production lines are coming up nicely, and we expect them to be operational in the third quarter.

    Risks & headwinds

    5
    Supply chain constraintsQ2 FY26

    delayed production and delivery of battery products

    Mitigation: Multi-sourcing components to reduce single supplier bottlenecks; investing more in production readiness and raw materials inventory.

    Execution focus issuesQ2 FY26

    carrying more customer programs than resources can execute with speed and quality

    Mitigation: Evaluating all customer engagements and prioritizing engineering and manufacturing resources towards highest value opportunities; strengthening qualification of new opportunities.

    Board and management changesQ2 FY26

    consumed significant management bandwidth and slowed decision-making

    Mitigation: Transition is now behind us; leadership team is set and aligned; company-wide operating review underway to standardize data and refine workflows.

    Production capacity limitationsQ2 FY26

    new Texas facility was not yet contributing in Q2

    Mitigation: New Texas facility and production lines expected to be operational in Q3 FY26, providing expanded manufacturing footprint and automated lines.

    Volatility from digital asset holdingsH1 FY26

    $31.4 million non-cash mark-to-market change in H1 FY26

    Mitigation: Exited Bitcoin mining, begun reducing Bitcoin holdings, repaid credit facility, and authorized management to sell any and all Bitcoin holdings.

    What to watch in Q3 FY26

    5

    Texas facility operational status

    Q3 FY26
    CurrentNot yet contributing in Q2 FY26
    TargetOperational and contributing to the business

    Why it matters

    The new facility is crucial for increasing production capacity and meeting anticipated demand, directly impacting revenue and gross margin.

    Our new Texas facility was not yet contributing in the second quarter. The good news is that the facility and the production lines are coming up nicely, and we expect them to be operational in the third quarter.

    2 min read6 chapters

    Detailed Narrative

    01

    Q2 Performance and Challenges

    KULR's second quarter revenue of $2.1 million fell significantly short of expectations, resulting in a gross loss. Management attributed this underperformance to four key challenges: supply chain constraints leading to long lead times and bottlenecks, execution focus issues due to over-commitment of resources, management bandwidth consumed by Board and management changes, and the new Texas facility not yet contributing to production capacity.

    02

    Strategic Refocus and Simplification

    In response to Q2 challenges, KULR is prioritizing its core operating business, KULR ONE, focusing on product revenue growth, gross margin improvement, and cost discipline. The company has exited Bitcoin mining, repaid its $20 million credit facility in full using Bitcoin sale proceeds, and aims to simplify its balance sheet to reduce volatility and preserve financial flexibility. This strategic shift allows for greater concentration on the energy system platform for physical AI.

    03

    Operational Improvements and Capacity Building

    A company-wide operating review is underway to standardize data, refine workflows, and strengthen systems for better operational visibility. KULR is becoming more selective with vendors and customers, prioritizing programs with strong economics and strategic value. The new 25,000 square foot Texas facility, featuring automated production lines for cylindrical and pouch cells, is expected to be operational in Q3 FY26, enhancing manufacturing capacity and vertical integration.

    04

    U.S. Drone Market Opportunity

    The U.S. drone market is transitioning from policy to purchase orders, driven by initiatives like the Department of War's $1.1 billion drone dominance program. This program has already accepted initial delivery orders for 30,000 units, with plans for 60,000 more in September and hundreds of thousands by 2027. The FY27 budget request includes over $70 billion for drones, creating significant demand for American-made batteries like KULR's, especially as foreign parts are being phased out.

    05

    Product Development and Ecosystem Expansion

    KULR is actively developing its battery ecosystem beyond just the pack. This includes sampling NDA-compliant 6S chargers and completing an 18S charger prototype, with shipping expected by the end of 2026. The company also demonstrated KULR ONE Air with next-generation solid-state cells achieving over 350 Wh/kg and was selected by Oracle Space as battery providers for an orbital transport mission, showcasing technological advancements and market penetration.

    06

    Second Half Outlook

    Management anticipates a significant improvement in the second half of 2026. This outlook is based on the recovery of delayed shipments, the new Texas facility becoming operational and contributing, pipe volumes starting to ramp, and NDA-compliant power electronics and chargers shipping by year-end. The company expects the U.S. drone procurement cycles to increasingly convert into firm orders, driving revenue growth and improved profitability.

    AI-generated summary of the company’s earnings call. Not investment advice.