SKYX Platforms Q1 2026 Earnings Call Transcript

Quartr
Provided by Quartr
May 11, 2026

Key Takeaways

  • Positive Sentiment: The company reported its 9th consecutive quarter of year‑over‑year growth with revenues up 10% to $22 million, cash and equivalents rising to over $32 million, and gross margin improving to 30%, which management says supports a goal of becoming cash‑flow positive in 2026.
  • Positive Sentiment: SKYX announced a strategic partnership with Europe’s Group OTT to deploy its smart/AI platform (first installation at the Grand Hôtel de Bordeaux) and says it has a developer pipeline that could reach 1 million+ units across large projects and up to 132,000 hotels in Europe.
  • Positive Sentiment: Retail traction continues as the patented turbo heater fan is scaling through big‑box channels (Home Depot, Target, Walmart, Lowe’s) and the company is expanding the product line (new sizes/colors) to create an “all‑season” ceiling fan category.
  • Neutral Sentiment: The Generation 3 All‑in‑One Smart Platform is on track for a mid‑year/third‑quarter launch and is positioned to enable recurring revenues (subscriptions, AI/monitoring services, insurance integrations), but timing and monetization remain uncertain.
  • Negative Sentiment: Despite improvements, the company remains unprofitable (net loss per share $0.07; adjusted EBITDA loss per share $0.03) and many growth drivers are forward‑looking and dependent on regulatory standardization, supply‑chain scale‑up, and conversion of signed deals into purchase orders.
AI Generated. May Contain Errors.
Earnings Conference Call
SKYX Platforms Q1 2026
00:00 / 00:00

Transcript Sections

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Operator

Good afternoon, ladies and gentlemen. Welcome to SKYX Platforms Corp.'s Earnings Conference Call. Before we begin, I would like to remind everyone that statements made during this call may include forward-looking statements within the meanings of the federal securities laws. These statements are based on current expectations and assumptions and are subject to the risks and uncertainties that could cause actual results to differ materially. Please refer to the company's SEC filings, including its most recent Forms 10-Q for a discussion of these risks and uncertainties. The company undertakes no obligation to update any forward-looking statements except as required by law. In addition, the company may discuss certain non-GAAP financial measures during today's call. Reconciliations to most directly comparable GAAP measures are available in the company's earnings press release. I would now like to turn the call over to Founder and Executive Chairman, Rani Kohen.

Operator

Please go ahead, sir.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Thank you very much. Good afternoon to all. We welcome you to our Q1 2026 earnings call, and I'll pass it to our President, Steve Schmidt. Thank you, Steve.

Steve Schmidt
Steve Schmidt
President at SKYX Platforms

All right, Lenny. Excuse me. I'm sorry, Rani. Thank you very much. First of all, good afternoon to everybody. Let me start by saying that we are happy to share that we are continuing our progress and growing our market penetration, and remain focused on our razor and blade model through B2B segments for hotels and builders, as well as on the retail aspects through our e-commerce platform and big box retail. As we previously have discussed, we are continuing our growth despite the slow new build market that is affecting smart home, lighting, and home decor segments. Let's start with four key financial points demonstrating our positive progress.

Steve Schmidt
Steve Schmidt
President at SKYX Platforms

First, we're pleased to report nine consecutive quarters of growth year-over-year, with a 10% increase in record revenues for Q1 2026, with $22 million compared to $20 million in Q1 2025 as we continue to grow our market penetration. Next, our cash position improved significantly to over $32 million in cash and cash equivalents as of March 31st, 2026. We believe we have sufficient cash to achieve our goal of becoming cash flow positive in 2026. Our gross profit improved by 16% to $7 million in Q1 2026, compared to $6 million in Q1 2025. Finally, our gross margin improved to 30% in Q1 from 28% in Q1 2025. Lenny Sokolow will be providing additional insights shortly on these financial results. Let's talk about the business front.

Steve Schmidt
Steve Schmidt
President at SKYX Platforms

We've entered into a strategic partnership agreement with prominent European hotel and real estate developer Group OTT, or OTT Group, to deploy our advanced smart and AI platform technologies as a brand standard throughout its our hotel and building segments. Group OTT has developed over 250 hotels and buildings across Europe. We just announced that we will be deploying our advanced and smart technologies to its first European hotel, master renovation of a historical architectural preservation hotel, the Grand Hôtel de Bordeaux, formerly the Grand Medesis in Bordeaux, France. We have signed an additional agreement with the Group OTT Heritage Hospitality Group to deploy and market our technologies to the vast European hotel market over 132,000 hotels.

Steve Schmidt
Steve Schmidt
President at SKYX Platforms

We expect to supply our advanced smart home technologies to upcoming and future key projects in the U.S. and globally, including New York, North Carolina, Austin, San Antonio, South Florida, including Miami's new $4 billion smart city, Europe, Saudi Arabia, and Egypt. Our technologies reduces up to 90% of the time and cost of buildings and hotel renovations and installations or new builds. We continue our discussions with additional hotel groups and owners regarding utilization of our game-changing advanced and smart platform technologies. We expect to deploy over one million units of our products, including an advanced smart home plug-and-play technologies during these projects and to over 100,000 units and homes by the end of 2026 through our pro and retail segments.

Steve Schmidt
Steve Schmidt
President at SKYX Platforms

Despite warmer weather, our sales of our patented turbo heater fan are continuing to grow, and we are expanding the category of the all-season ceiling fan, heat in winter and cool in summer, and we are working on additional products in new designs and larger sizes. In Q1, we announced the beginning of our collaboration with NVIDIA AI Ecosystems Connect program. We expect to grow our collaboration with NVIDIA into future smart home projects. Our technology expansion provides additional opportunities for future recurring revenues through interchangeability, upgrades, AI services, monitoring, subscriptions, and more. Finally, our enhanced safety code standardization team continues its progress towards its goal of a safety-mandated standardization in homes and buildings of our life-saving ceiling outlet receptacle technology. A lot of great progress. It's my pleasure now to turn the call over to Lenny Sokolow, our CEO, who will provide additional insights. Lenny.

Lenny Sokolow
Lenny Sokolow
CEO at SKYX Platforms

Thank you very much, Steve. Appreciate it. I'm very pleased to announce, you know, strong financial and operational results for the first quarter and most recently. This reflects our continued momentum in revenue growth, operational execution, and market expansion. As we have referenced, we generated the greatest increase in year-over-year revenues of 10%, with a record $22 million in revenues in the first quarter of 2026, compared to $20 million for the first quarter of 2025. This reflects nine consecutive year-over-year quarters of growth. As of March 31, 2026, we reported $32 million in total cash equivalents, and restricted cash, compared to $10 million as of year-end, December 31, 2025. We continue to leverage the rapid conversion of our e-commerce sales into cash, advancing our cash position.

Lenny Sokolow
Lenny Sokolow
CEO at SKYX Platforms

This is often referred to, as we've mentioned before, the Dell working capital model, lowering our cost of capital along with it. We believe we have sufficient cash to achieve our goals of becoming cash flow positive exiting 2026. Our gross profit for the first quarter ending March 31, 2026 increased comparatively by 16% to $7 million as we compare it to the first quarter ending March 31, 2025. The gross margin for the first quarter ending March 31, 2026 increased comparatively by 2% to 30% compared to 28% in the first quarter ending March 31, 2025. Net loss decreased. This is a net loss per share decreased by $0.02 to $0.07 per share in the first quarter of 2026, compared to $0.09 in the first quarter of 2025.

Lenny Sokolow
Lenny Sokolow
CEO at SKYX Platforms

Our adjusted EBITDA loss per share, which is a non-GAAP measure, decreased to 3% to $0.03 per share in the first quarter of 2026 as compared to $0.04 per share in the first quarter of 2025. If I could turn it over to Rani Kohen.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Thank you, Steve. Thank you, Lenny. We will open in a minute our phone for Q&A. We would like to emphasize, as Steve mentioned, that we're laser-focused in our razor and blade model and on the B2B segment through hotels and builders. Reaction is actually very strong and very positive. We hope we can announce more on this front in the near future. We're also happy with the growth of our retail segment. As Steve mentioned, despite warm weathers now around the country, we are continuing to see growth in our turbo heater. That's one of many products we intend to offer on the razor and blade model.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

As we mentioned before, we are going to expand that category to create an all-season ceiling fan. As you all know, ceiling fans is a product that's mainly focused for summertime and warm weathers. We strongly feel that this can open a whole new category, especially based on the demand we have for that product. In the next coming months, this year, we believe it's gonna be a strong aspect of our razor and blade model, showing additional types of ceiling fans in sizes of 18 inch. As we have now 24 inch, it's gonna be 18 inch, a bit smaller, but also a large one with 28 inches.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

We're also going to do for much bigger rooms, starting with 42 inches, a new model, new design with the same turbo heater with three blades at 42 inch, 54 inch, as well as 60 inch. We really think that this is a category that with time we can create a lot of demand to those different type of heater, turbo heater fans. We're going to offer them in five colors and we intend to expand this. In the next coming months, you will see more announcements and additional products in hopefully additional places that we'll be able to announce. With that being said, we're also progressing with the standardization aspect. We also hope to introduce our products this year to insurance companies.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

We believe, strongly believe that that can have another angle of standardization as we hold many products that have strong aspects when it comes to life saving and eliminating the need to touch hazardous wires, long time on ladders, with heavy or large size devices. With the launch of our Generation 3 All-in-One Smart Platform hub, adding the smoke detectors, CO detectors, emergency light, 911 calling, night light, and many other safety features, we have strong indications that we will cooperate with insurance companies that are quite excited towards our launch in the second half of 2026. With that being said, thank you again, and we will pass it to Q&A here.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

I think we have Jacob from Lake Street, first in line.

Operator

Yes, thank you very much, sir. Ladies and gentlemen, we will now be conducting the question and answer session. For the participants making use of speaker equipment, it may be necessary to pick up your handset before pressing the star keys. If you'd like to ask a question, please key in star and then one on your telephone keypad. A confirmation tone will indicate that the line is in the question queue. You may key in star and then two to leave the question queue. The first question comes from Jacob Stephan of Lake Street Capital Markets. Please go ahead.

Jacob Stephan
Analyst at Lake Street Capital Markets

Hey, guys. Congrats on a nice quarter. Thanks for taking the questions. Maybe just first, wanted to touch on the construction project pipeline here. I know you got 12 major projects over the past year, one million total units, and obviously Group OTT. I guess how many of these projects so far have moved from kind of the signed agreement to, I would guess you would call it like an active supply order? Maybe if you could give us any sense of updated timing on the Austin, N.Y., or Miami smart city projects, that would be great.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Yes. Thank you, Jacob. We are actually a few projects already have moved to purchase orders. We expect to start supplying products in the next coming months to several places, including in Texas, I believe Austin, as well as I think New York, San Antonio maybe, and hopefully even to one of the European hotels we announced. The first European hotel we announced.

Jacob Stephan
Analyst at Lake Street Capital Markets

Okay. Maybe, I guess if you could give us an overview of the developer pipeline, just beyond, you know, what you already have, signed and purchase order. Maybe you could give us a sense of, you know, what the future pipeline looks.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

We can say that we're entertaining discussions with several developers on new projects as well as hotel developers. We're confident that this is a strong path for us, the B2B segment, as Steve mentioned, for hotels and builders. The value proposition with saving almost up to 90% of time and labor costs of those renovations and installations is quite significant. The razor and blade model opens the door to start with maybe something simple, but to upgrade down the road, the subscription model, AI services and recurring revenues can be quite significant for us down the road as we penetrate.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Our goal is to focus on the razor and the blade, penetrate buildings, and then once we penetrate a property and deliver our receptacles, we kind of quote-unquote, "Have an ownership" on that electrical and electronic real estate that we strongly believe will be fruitful down the road.

Jacob Stephan
Analyst at Lake Street Capital Markets

Got it. Maybe just moving on to big box retail. You now have the turbo heater at Home Depot, Target, Walmart, Lowe's. Maybe if you could kinda quantify, you know, what a single in-store SKU order from one of these big box retailers could be, that would be helpful. Maybe if you have any, you know, comments on the pipeline there.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Steve mentioned, and I repeated that despite that warm weather's now, we expect that slowdown with that product, but we're happy to announce that we're actually seeing continuing growth. I think word-of-mouth, people now recognizing they can buy a fan that also has a heater, all in one. That opens the doors to really really good customer reviews in addition to word-of-mouth product, and we see that growth. As you know, dealing with big box retail, such as Home Depot, Target, and Lowe's and others, if you penetrate those stores and if you penetrate significantly, beyond a few stores or a few hundred stores, that can be even a few hundred stores can be significant revenues.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Obviously, when you go over 1,000 stores or 2,000 stores, that can be a major turning point for us, and it looks promising. You know, we hope towards the winter or hopefully earlier, to get to be able to talk about it in more detail.

Jacob Stephan
Analyst at Lake Street Capital Markets

Got it. Understood. Appreciate you taking the questions.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Thank you, Jacob.

Operator

The next question comes from.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

I think, we have.

Operator

Next question comes from.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Please.

Operator

Tom Hayes of Roth Capital Partners. Please go ahead.

Tom Hayes
Tom Hayes
Analyst at Roth Capital Partners

Good afternoon, guys. Can you hear me okay?

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Hi there.

Tom Hayes
Tom Hayes
Analyst at Roth Capital Partners

Hey.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Tom.

Tom Hayes
Tom Hayes
Analyst at Roth Capital Partners

Hey.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Good afternoon.

Tom Hayes
Tom Hayes
Analyst at Roth Capital Partners

Hey, Rani. Can you hear me? Good afternoon.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Yes, Tom from Roth Capital. Good afternoon, Tom.

Tom Hayes
Tom Hayes
Analyst at Roth Capital Partners

Good afternoon, Rani. Just wondering about the strong Q1 gross margin performance. I was just wondering if you could kind of talk about what was the drivers on the year-over-year growth.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

I think that, you know, our focus in implementing more new products in our e-commerce and other big box retail, in a combination of our some of our a new software, AI-driven that's already almost I would say in a third of our e-commerce platform. Combined, you know, products for lighting, the heaters, the home décor products, a combination of our strong emphasis and growth is starting to show, and we hope to continue to show that in the next coming quarters.

Tom Hayes
Tom Hayes
Analyst at Roth Capital Partners

Okay. Appreciate that. Maybe appreciate all the color that you gave us on the turbo heater fan. I was just wondering, now that it's really gonna become a all-season fan, do you see more opportunity in the winter or the summer for the unit?

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

We believe that in the winter, it would provide more emphasis with the and purchases, based on in addition to decorating a home and impulse buy, 'cause many people don't think about a ceiling fan or if they see one, if it's not urgent, will probably not buy it during the winter. If they're aware of it and there's a new category that can serve winters as well as summers, I think we strongly believe that we can continue seeing additional growth in winter times. The data shows that most of the space heaters are very strong from October through February. Those five months are probably three quarters of the market, and then March through August is really only 20%.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

I would say 75+% through October through February and then 25% between March and August. We think that this coming winter could be quite significant for that product. Although, as we mentioned, we're already seeing growth in the summer, and that's a pleasant surprise.

Tom Hayes
Tom Hayes
Analyst at Roth Capital Partners

Okay. Appreciate that. Maybe one last one. Just wondering if you could give us an update. I know you'd been working on updating your 60 websites. I was just wondering kind of where you are in that process and then kind of when you expect to have that all wrapped up. Thank you.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Yes. I think we were around a third into it now. I think last call we were around 20%+, and now I think we're 30%+ of websites that merge into the AI-driven software. I think we'll continue our progress this quarter, and we hope and believe that Q3, during Q3, we can finalize that product project. That's our anticipation.

Tom Hayes
Tom Hayes
Analyst at Roth Capital Partners

Thank you very much.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Thank you, Tom.

Operator

The next question comes from Barry Sine of Litchfield Hills Research. Please go ahead.

Barry Sine
Barry Sine
Analyst at Litchfield Hills Research

Hey. Good afternoon, gentlemen. I wanna follow up on that last question, where we talked about the website upgrades. Obviously, you had a very strong quarter, revenue up 10%. Could you know, give us some sense how much of that is coming from the website upgrades, you know, the contractor shipments and then obviously the SKYFAN & Turbo Heater? Sales were very strong, both through your website channels as well as through retailers. If you could give us a little color on what drove the growth in the quarter, please.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

We really think, as I mentioned earlier, it's all the above. We think we're emphasizing on growth in all aspects. Obviously, the SKYX and the SkyPlug products, as much as we can, the turbo heater and definitely the new AI-driven software that we're implementing on the websites that we already completed the implementation, we do see this. It's a combination of all the above and our e-commerce home decor and lighting products, as well as we mentioned, our own products, including the turbo heater fan. It's a consolidated effort here to continue our growth on all fronts.

Barry Sine
Barry Sine
Analyst at Litchfield Hills Research

Okay. Just on the website upgrade, maybe you could give us a little more detail. What exactly are you doing with the websites, and why has that been so successful? What is causing consumers to spend more through your websites?

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Today, you know, the older softwares, and I can say even five years ago, someone implemented the new software, today it's aged five years afterwards. Any improvement you have by AI identifying customers that have more, more focused on customers that are able to acquire or purchase our products within lighting, smart lighting, home decor, et cetera, that can identify better, faster turnaround of this customer, easier maneuvering through the sites. As the AI would show you go to one place, you're interested in a certain area. Today, the AI is really able to profile you much faster as what type of customer you are and what type of products there are higher chances for you to acquire.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

All of this AI-driven software today, they are, as we all know about AI, way more advanced than what you had the newest software five years ago. The difference is, as we all know with AI, is quite significant and AI attacks all fronts at once. This is just the beginning. We believe as we fully implement the entire AI-driven software in our platform, we will see towards the end of the year, and the learning and the data that we can get is quite significant compared to what we had in our own software. It's all the above that really helps us to grow our business on the e-commerce site.

Barry Sine
Barry Sine
Analyst at Litchfield Hills Research

Okay. My last question on the regulatory front. Could you give us a bit more detail on what actions you took in the most recent quarter in terms of, you know, getting governed entities to do some type of a mandate, you know, whichever entity that might be, you know, how many meetings were there and so on, really feedback? A similar question with the insurance companies, because it just seems obvious the insurance companies should be requiring this, you know, for projects where they're covering workmans comp on the job site.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Barry, thank you. That's a great question, actually. You know, as we mentioned, it's a slow process. That's the bad news. The good news is we started that process over 14 years ago and achieved a lot here. We're on the final stages, we believe. We're working on all fronts. As we mentioned there, NFPA and NEC, then there are other bodies that report directly to the government, and the government bodies that all have this clear criteria of saving lives, mitigating injuries and property damages. They were established in the past 50 years-100 years for that purpose, okay, of saving lives. They really need to find products like us and bring them to the finals. Obviously, we're helping them not to find us and we finding them.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

That's part of, you know, that's part of that type of organizations that we need to help. Our code team, led by Mark Earley, the former Head of the National Electrical Code, the Chief Engineer of the National Fire Protection Association, together with Eric Jacobson, the former President CEO of American Lighting Association, those two gentlemen are leading our team here. They're having meetings almost every month now or even more than once a month. We're stepping it forward. We're working on some other aspects.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

We got some more help with hopefully with government agencies and also experts on ladder falls that joined us to emphasize how significant our safety aspect or how much we can reduce ladder falls is quite significant. In a quite significant way. As you know or people know, most of the ladder fall happens close to 80%, according to data we saw, are in homes. Many of those ladder falls happen when you have heavy or big obstacles in your hand and/or your unstable movements that you have with trying to twist wires. Reducing that time by up to 95%-99% can be quite significant in reduction of ladder falls.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

With that being said, Steve Schmidt and myself with other members are actually focused now, and Steve is leading it with insurance companies. We, we think is, as you mentioned, that insurance companies, if you look at their history, they mandated or required or promoted safety products, starting with smoke detectors, CO detectors, emergency lights in commercial buildings and other products that we're working on that we didn't disclose yet. Ethan, we have, you know, so many of them together that our initial discussions now are looking quite well. We hope that once we have the All-in-One Smart Platform in the market, that we will hear some. We're confident Steve had, and our team had some good discussions.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

We're confident on that we have a significant play that we strongly believe that can save many billions of dollars on an annual basis to insurance companies. We're progressing on this front as well.

Barry Sine
Barry Sine
Analyst at Litchfield Hills Research

Well, that's great. Thank you very much.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Thank you, Barry.

Operator

Thank you.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Jack.

Operator

Our next question comes from Jack Vander Aarde of Maxim Group. Please go ahead.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Okay, thanks. Congrats on the momentum. It seems like progress is accelerating. It's great to see. Rani, just it sounds like there is progress being made on the standardization front. It sounds like your new smart plug and plug-and-play product rollout's ramping. Can you maybe just remind us of the vision and provide an update on your General Electric, your GE? I think you signed a five-year global licensing partnership agreement back in, at the end of 2023. Is GE still in the cards here? What's the vision there with them if so?

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

As you know, yes, we have this contract, and as you know, GE merged some of those divisions. Our licensing division is merged with Dolby. We are in connection with the GE former, not former, but they're part of Dolby or a collaboration with Dolby on this. Yes, they're in the game. We expect that as we progress with the standardization, in the mandatory, the licensing will become a major thing for us. I think this licensing segment will become quite significant for us. It's also with insurance companies that can be, if you heard our other answer. Those are two things we expect can help us significantly on the licensing aspect.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Okay, great. Maybe a question for Lenny or Rani as well. I think last quarter, I believe the Generation 3 All-in-One Smart Platform was on track for maybe a third quarter or fourth quarter launch this year. One, just an update there. I have a follow-up.

Lenny Sokolow
Lenny Sokolow
CEO at SKYX Platforms

Yeah, thanks, Jack. I think we are on track. You know, we think by mid to third quarter, we should be on track for generation, the All-in-One Platform. We called it our Generation 3.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Okay.

Lenny Sokolow
Lenny Sokolow
CEO at SKYX Platforms

For, you know, getting production. We're in, you know, so far we're, we believe that's the, you know, the, in the, in our projection.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Excellent. Just a quick follow-up there. Is this the product you foresee this product being what unlocks a recurring revenue stream for you? I don't know, is there any color you can provide on what that might look like in terms of a recurring revenue stream from this product? Thanks.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Yes, Jack. That's a great question. Thank you. The All-in-One Smart Platform hub is actually a product that helps several industries or segments into all in one. We have the home security industry that will have our safety, home security, excuse me, home security sensors for burglars, etc. We will have also the home safety segment in this platform, as we discussed earlier with for insurance companies, etc. That's another segment that will be inside. We have the smart home features that will be part of this. We have the communication features, Wi-Fi extenders and Wi-Fi communication. Any type of communication. We will have also hospitality sensors, that's another industry.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

We can do the same for the cruise industry with that platform, and that can go also to elder living and facilities. Also there's a growing market of home elder living, that people stay in their homes, but they have visits and monitoring in their own homes. That can be quite significant market for that product, as well as hospitals. That's also a significant aspect for us. As you can see, there's several segments and industries that our All-in-One Smart Platform can serve.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

As it comes for what we can generate, first of all, significant data aggregation that we have and precise data that will help us in many aspects in learning and studying and very strong knowledge of those industries and where the platform, All-in-One Smart Platform hub will be implemented in. Obviously, that's gonna generate, depends on what industry, but it's gonna generate monitoring subscriptions, AI services that are definitely down the road we expect to see. To answer your question, that's definitely this product is where we expect that to open doors with the recurring monitoring subscription opportunities to come in all of those industries.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Okay, excellent. Great to hear. Congrats on the continued momentum. Thank you.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Thank you.

Lenny Sokolow
Lenny Sokolow
CEO at SKYX Platforms

Thank you.

Operator

The next question comes from Sam Movish with a private investor. Please go ahead.

Sam Movish
Shareholder at Private Investor

Yes. Hello, everyone. Again, congratulations on a stellar quarter. Lenny, I don't know if you remember, we talked probably about six months ago or so. Thanks again for having me, congratulations on a good quarter. A few questions. Starting off first, about this time last year, you had announced a partnership with Profab, a local manufacturer. Was just looking for an update on your partnership with Profab, and kind of a guidance on what percentage of your products are now made in the U.S., versus what percentage of your products are made in the non-U.S., and where kind of Profab fits within that.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

I'll answer that product development question. Thank you for that question. Profab is a leading electronic sophisticated PCB, electronic boards manufacturing with the industries like our military, aviation, hospitals, and other sophisticated industries. They're investors in our team, and they're also long-term partners of ours. We expect, as we grow the All-in-One Smart Platform opportunities here in the U.S., to have a Made in U.S. opportunity. Part of our product development, and all the testing and manufacturing and Six Sigma process is done together with them. They're a great partner to have and really a leading manufacturer in here in South Florida now where the tech is growing. It's a growing company not related even to us.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Great to have them as a partner and we're looking forward to manufacture together with them some of the products here with a goal to have a strong US manufacturing channel. That's in development, and once we start production of the All-in-One Smart Platform, we will look into how to start making some of this product made in the U.S.

Sam Movish
Shareholder at Private Investor

Great. Thank you. That sounds like a bright future. Do you anticipate costs being relatively manageable as you migrate the manufacturing, especially with the All-in-One platform? Are the margins, do you plan on those being able to be sustained or continue to grow as we've seen in the past few quarters?

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Yes, that's a great question. Not like in the car industry. That's still a few years away, but it's happening with Tesla and others to become fully automated or 80%, 90% fully automated with robots that are being manufactured by leading with Tesla and other companies. The electronic board, the PCB, is actually already in a mode that can be fully automated. By that, you don't have the 5x-10x labor situation that U.S. has compared to other places in Far East and Asia or Mexico and other places.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Therefore, the US government today is really looking into manufacturing anything that can be fully automated made in the U.S. Has a great chance to be manufactured in the U.S. because the differences will not be as significant because the labor is not a big factor during these type of productions.

Sam Movish
Shareholder at Private Investor

Understood. Thank you for shedding a little bit more light on that. Few more questions just as we think about the manufacturing for the next All-in-One Smart Platform, as we think about the pipeline of these major projects that you have. Do you have any concerns about meeting the future demand, especially for those B2B contracts and, kind of as you look forward to meaningfully scaling the production of your products, do we think we can really kinda take that jump from where we are now to, say, a year from now as we're meeting, you know, kinda millions of products being deployed?

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

As we stated this several times, including, I think, I believe in our latest press releases, including today, we are collaborating with manufacturers all around the world. In addition to China, we have Taiwan, and we have Cambodia, Philippines, U.S. and Vietnam options. We're in discussions with all of them because we did not want to rely on one area of the world or one country. All the manufacturers we associate ourself with are all mass production and are each one of them able to produce millions of units. It's a combination of cost and quantity. Quantity, we're okay, and we strongly believe those manufacturers are part of the validation, are capable to do the products in the million, each one of them.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

It's really the cost factor, where will be the best place to manufacture. When it comes to quantities, we think we're in very good shape.

Sam Movish
Shareholder at Private Investor

Great. Thank you. Sounds like you're quite nimble as needed. Last question here, hopefully it's an easy one, just have seen this in other parts of kinda my coverage. You know, we've seen some disruption to Middle East funding and projects just during the recent conflict. I know that you have a few Middle East projects. Notably, you've got Egypt, you've got some Saudi Arabia plans. Are those relationships continuing to kinda stay steady? Have we seen any disruption or, say, trepidation about moving forward from those parties?

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

No. We are actually in discussions with those parties, and they're moving ahead with their projects. This is expected to happen. We hope to start something and be able to announce something even this year. We have discussions towards that. It's those projects, Middle East has tremendous growth. Obviously, there was some issues with the war that probably didn't help anyone. As those projects are long-term and in planning stages, there's no interruption to what they're doing, and we're in discussions with those groups, and looks like everything is moving forward according to plan.

Sam Movish
Shareholder at Private Investor

Fabulous. Thank you for the clarity there and thank you for taking my questions. That's all I've got. Congratulations again on a stellar quarter. Thank you, everyone.

Lenny Sokolow
Lenny Sokolow
CEO at SKYX Platforms

Sam, if you have anything else in the future, feel free to call. Happy to answer any more questions.

Sam Movish
Shareholder at Private Investor

Thank you very much, Lenny. I appreciate that.

Lenny Sokolow
Lenny Sokolow
CEO at SKYX Platforms

Okay. All right. All right, take care. Bye.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Thank you very much.

Operator

Thank you.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

I think-

Operator

Ladies and gentlemen, with no further questions in the question queue, we have reached the end of the question and answers. I will now hand back for closing remarks.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Thank you again for all the participants. We look forward to continue our progress and sharing it with you in the near future and our next earning call, hopefully sooner than that in some aspects. We will be happy to announce if we have something to share with the market. Thank you and good evening to all.

Operator

Thank you, sir.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Thank you, Steve.

Operator

Ladies and gentlemen.

Rani Kohen
Rani Kohen
Founder and Executive Chairman at SKYX Platforms

Thank you, Lenny.

Operator

Ladies and gentlemen, that concludes today's event. Thank you for attending. You may now disconnect your line.

Executives
    • Lenny Sokolow
      Lenny Sokolow
      CEO
    • Rani Kohen
      Rani Kohen
      Founder and Executive Chairman
    • Steve Schmidt
      Steve Schmidt
      President
Analysts
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