KULR Needs Drone Orders To Show Up In Revenue As Texas Ramp Faces Test

KULR Technology Group heads into its third-quarter report with a simple but unforgiving question hanging over it: can a company that stumbled badly last quarter turn a genuinely improving drone-procurement backdrop into actual shipments, revenue and positive gross margin? Management spent the last call apologizing for a weak second quarter and promising a second-half recovery. This report, due before the open on November 10, is the first real chance to see whether that promise was a plan or a hope.

The Street offers little help in framing the bar. There is no usable consensus for earnings or revenue, and management has not issued formal guidance, so the yardsticks have to come from the company's own history. Last year's third quarter brought in $6.9 million of revenue with a loss of 26 cents a share. The second quarter of this year produced just $2.1 million and a 24-cent loss, down from $4.8 million in the first quarter, when blended gross margin ran near 29%. Getting back to first-quarter revenue levels would be a credible start; matching last year's third quarter would signal the recovery is real.

The most important line item may be gross margin. KULR swung to an outright gross loss last quarter, and management blamed four things: supply-chain delays on new parts, too many customer programs for its resources, distraction from board and management turnover, and a new Texas facility that was not yet contributing. Each of those should be easier to judge now. The company built raw-materials inventory roughly fivefold since the end of 2025 to prepare for second-half demand, which should ease part shortages but also ties up cash if orders slip. The roughly 25,000-square-foot Texas plant with automated lines was slated to come online this quarter. Evidence that it is producing, and that margins have climbed back into positive territory, would validate the turnaround narrative. Another quarter of negative gross margin would suggest the problems are structural rather than temporary.

Demand is where management sounded most confident. It pointed to the Defense Department's $1.1 billion drone dominance program moving from planning to purchase orders, with about 30,000 units delivering and 60,000 more expected in September, plus a federal budget request exceeding $70 billion for drones and counter-drone systems. KULR also landed a defense drone battery order worth more than $5 million and was selected by Oracle Space for an orbital mission. The key test is conversion: how much of that $5 million order shipped, whether follow-on orders arrived, and whether the NDAA-compliant chargers remain on track to ship by year-end. Investors should also note how much capacity talk has shrunk, from ambitions of 50,000 to 100,000 packs a month a year ago to roughly 10,000. Any further trimming would be a red flag.

The balance sheet is the cushion. KULR exited Bitcoin mining, repaid its $20 million Coinbase loan and finished the first half with about $60 million in cash, no debt and no at-the-market share sales. Continued cost discipline, after SG&A fell 9% in the second quarter, and a clear read on cash burn will matter given the stock's price.

The market has delivered its verdict on the last quarter. Shares are down nearly 43% since the prior report, against a 6% drop in the S&P 500, and at $1.43 they sit just above their post-earnings low of $1.40 and about half their 200-day average. Sentiment has nonetheless swung from mildly bearish to fairly bullish, suggesting some traders see a washed-out setup. That optimism needs proof. If revenue rebounds and gross margin turns positive on drone battery shipments, the recovery story holds. If not, the improving demand backdrop will look like an opportunity KULR could not capture.

This earnings preview was originally published on Earnings Whispers.

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