KULR Technology Group Q3 Earnings Call Highlights

Key Points

• Revenue surged 197% year over year to $7.4 million, driven by product shipments, but gross margin was only about 4%, and the operating loss widened to $11 million.
• Reported net income of $4.5 million was not driven by operations; it reflected a $15.8 million increase in Bitcoin value. KULR exited Bitcoin and ended the quarter with $54.5 million in cash and no debt.
• KULR is narrowing its focus to autonomous systems, energy storage and space, while cutting costs; workforce and other reductions are expected to yield about $4 million in annualized savings starting in 2027.

KULR Technology Group NYSEAMERICAN: KULR reported a sharp increase in third-quarter 2026 revenue as product shipments grew, but executives said margins and operating losses remain obstacles as the company cuts costs and narrows its focus.

Revenue rose 197% to $7.4 million from $2.5 million a year earlier. Product sales reached $6.5 million, accounting for 88% of revenue, and the company shipped to 22 product customers, up from 18 a year earlier.

CEO Michael Mo said the quarter provided a foundation for growth but did not complete a turnaround. “Our margin is not where the business needs to run, our costs are too high, and our losses have to come down,” he said.

Revenue Growth Outpaces Margin Recovery

Gross margin was approximately 4%, recovering from a gross loss in the second quarter but falling from 17% a year earlier. CFO Mike Kimel said initial KULR ONE Max energy storage orders carried low margins, while several custom battery assembly programs incurred labor and production costs above their contract values. Transition and facility costs related to the Caban acquisition also weighed on margins.

KULR has exited the custom programs that did not meet its economic standards, Mo said. He added that the initial KULR ONE Max production builds were priced to win long-term accounts.

The company reported an $11 million operating loss from continuing operations, compared with an $8.7 million loss a year earlier. Net income was $4.5 million, or $0.10 per share, but Kimel said that result reflected a $15.8 million increase in the value of KULR’s Bitcoin between June 30 and the dates it was sold, rather than operating performance.

KULR completed its exit from Bitcoin and repaid its Coinbase loan. It ended the quarter with $54.5 million in cash, $64.4 million in working capital, no debt and no digital assets. The company’s former Bitcoin mining business is reported as discontinued operations, Kimel said. Its at-the-market stock offering program remains paused through year-end.

Cost Reductions and AI Tools

KULR implemented a reduction in force as it concentrated on fewer programs and strategic customers. The company expects the workforce reduction and other actions to deliver approximately $4 million in annualized cost savings beginning in 2027. Kimel said KULR is also reviewing professional services, engineering, facilities and administrative expenses for further efficiencies.

Third-quarter operating expenses were $11.3 million, including about $5 million in research and development and $5.9 million in selling, general and administrative expenses. R&D rose from $2.3 million a year earlier, while SG&A fell 3% from a year earlier and 6% from the second quarter.

Mo said R&D spending is expected to decline beginning in the fourth quarter and decrease further in 2027 as production lines and product development programs are completed. Approximately $700,000 of third-quarter R&D work was reimbursed under a Texas Space Commission award and reported as grant revenue, he said.

Executives said two internally developed AI-based systems are intended to help KULR grow without returning to its previous headcount. Mo said the company’s Designer Pro engineering platform can complete battery pack design and verification in as little as a couple of hours, compared with a couple of weeks previously. KULR began shipping packs designed with the tool in October.

Kimel said the company’s KULR Intelligent Operating System helps coordinate activities including manufacturing and employee training. He cautioned that some savings depend on completing new systems and processes before older costs can be eliminated.

Production and Market Priorities

KULR’s new Texas facility, Forge 2, began operating in the third quarter and is producing battery systems for customers participating in the Drone Dominance program, Mo said. Shipments previously delayed by long lead times began going out during the quarter. KULR ended the period with $4.4 million in inventory and approximately $1.1 million in supplier deposits positioned against fourth-quarter shipments.

The company is focusing its KULR ONE platform on autonomous systems, energy storage and space. Mo said shipments of KULR ONE Max for distributed energy storage deployments in Japan were a major contributor to third-quarter product growth. He also expects a 2027 ramp in battery solutions for autonomous systems that comply with National Defense Authorization Act sourcing requirements.

Kimel said revenue growth alone would not be sufficient. “We need to improve production efficiency, control costs, and focus on business with better long-term economics,” he said.

About KULR Technology Group (NYSEAMERICAN:KULR)

KULR Technology Group, Inc. develops thermal management, battery safety and energy-storage solutions for high-performance electronics and battery-powered systems. Its technologies are designed to improve the safety, reliability and operating efficiency of lithium-ion batteries and other heat-generating components. The company offers products and engineering services for applications including electric vehicles, aerospace and defense systems, space programs, energy storage, consumer electronics and other industrial equipment.

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