AIRO Q2 2026 Earnings Call: Umsatz steigt um 76 %, Drohnen-Auftragsbestand erreicht 163 Mio. USD

AIRO meldete für das zweite Quartal 2026 dank gestiegener Drohnenauslieferungen höhere Umsätze und Margen. Das Management bekräftigte seinen Wachstumsausblick für das Gesamtjahr, wies jedoch darauf hin, dass der Zeitpunkt der Auslieferungen sowie Währungseffekte die Ergebnisse der zweiten Jahreshälfte beeinflussen werden.

Wichtigste Erkenntnisse

• Der Umsatz im zweiten Quartal 2026 stieg im Vergleich zum Vorjahr um fast 76 % auf 43,2 Millionen US-Dollar. Treibende Kraft war das Drohnensegment, was durch eine schwächere Entwicklung in den Bereichen Avionik und Ausbildung teilweise kompensiert wurde.
• Die Bruttomarge stieg von 61 % im Vorjahr auf 64 %, was eine Verschiebung des Produktmixes hin zu Drohnen widerspiegelt.
• Das Betriebsergebnis verbesserte sich von einem betrieblichen Verlust von 19,7 Millionen US-Dollar im zweiten Quartal 2025 auf 1,7 Millionen US-Dollar. Das bereinigte EBITDA stieg von 4,7 Millionen auf 6,8 Millionen US-Dollar.
• Der Auftragsbestand im Drohnensegment wuchs im Vergleich zum Vorquartal um etwa 9 % auf rund 163 Millionen US-Dollar. Er setzt sich aus internationalen Aufträgen zusammen, hauptsächlich für die RQ-35, und enthält noch keinen Auftragsbestand aus den USA.
• Das Management bekräftigte seine Prognose eines Umsatzwachstums von 15 % bis 25 % für das Gesamtjahr 2026, obwohl für die zweite Jahreshälfte ein zusätzlicher Währungsdruck in Höhe von mehreren Millionen US-Dollar erwartet wird.
• Die RQ-35 erhielt die Blue-UAS-Zertifizierung, während der Produktionsstart der RQ-70 weiterhin für Januar 2027 geplant ist. Die JC250 und JX250 liegen für ihren Erstflug im weiteren Verlauf des Jahres 2026 weiterhin im Zeitplan.

Wichtigste Finanzdaten

Geschäfts- und operative Entwicklung

Drohnensysteme

Drohnenauslieferungen waren im zweiten Quartal der Hauptumsatztreiber. Der Auftragsbestand von rund 163 Millionen US-Dollar besteht vollständig aus internationalen Bestellungen und betrifft hauptsächlich die RQ-35 mit nur einem geringen Beitrag der RQ-70. Das Management geht davon aus, dass der Großteil des Auftragsbestands innerhalb von 12 Monaten in Umsatz umgewandelt wird.

Die RQ-35 erhielt die Blue-UAS-Zertifizierung und qualifiziert sich damit für Beschaffungen der US-Regierung und von Verteidigungsbehörden gemäß NDAA-Anforderungen. Laut Management hat das Unternehmen auf mehrere US-Angebotsaufforderungen reagiert, jedoch wurden die US-Möglichkeiten noch nicht in den Auftragsbestand aufgenommen.

AIRO stellte zudem die Langstrecken-ISR-Plattform RQ-70 vor. Das System ist für eine Flugdauer von bis zu acht Stunden und eine Reichweite von 100 Kilometern ausgelegt, einschließlich des Betriebs in Umgebungen ohne GPS. Das Management bekräftigte, dass der Produktionsstart voraussichtlich im Januar 2027 erfolgen wird, und bezeichnete das erste Interesse von Kunden aus dem Verteidigungssektor als stark.

Entwicklung der JC250 und JX250

Die Frachtdrohne JC250 und die ISR-Variante JX250 liegen für ihren Erstflug im späteren Verlauf des Jahres 2026 weiterhin im Zeitplan. Die unternehmensspezifischen Entwicklungskosten liegen aufgrund der gemeinsamen Plattformbasis, Lieferantenverhandlungen, Plattformsynergien und der F&E-Umsetzung um einen niedrigen zweistelligen Prozentsatz unter den internen Erwartungen.

Das Management erklärte, dass die Entwicklung dieser unbemannten Fracht- und ISR-Varianten erheblich weniger koste als die zuvor vom Unternehmen in Betracht gezogene Passagierplattform.

Avionik und Ausbildung

Der Umsatz im Bereich Avionik blieb im Vergleich zum Vorquartal bei stabiler Produktnachfrage weitgehend unverändert. AIRO hat seine Avioniksparte sowie den expandierenden US-Drohnenbetrieb in Phoenix konsolidiert und rechnet in den kommenden Quartalen mit betrieblichen und lieferkettenbezogenen Synergien.

Die Entwicklung im Ausbildungsbereich blieb weiterhin hinter den Erwartungen zurück. Das Management verwies auf die geringe Übereinstimmung zwischen aktuellen Einzelaufträgen der US-Regierung und den Fähigkeiten von AIRO sowie auf die kapitalintensive Struktur des Segments. Das Unternehmen prüft strategische Alternativen und rechnet damit, bis Jahresende über die Ausrichtung des Segments zu entscheiden.

Prognose des Managements

• AIRO behielt seine Prognose für das Umsatzwachstum im Gesamtjahr 2026 von 15 % bis 25 % gegenüber dem Vorjahr bei.
• Der Umsatz im ersten Halbjahr entsprach rund 50 % der aktuellen Erwartungen des Managements für das Gesamtjahr, nachdem eine wesentliche Drohnenauslieferung vom dritten in das zweite Quartal vorgezogen wurde.
• Das Management rechnet für die zweite Jahreshälfte mit einem Umsatz auf dem Niveau des ersten Halbjahres oder leicht darüber.
• Für das dritte Quartal wird im Vergleich zum zweiten Quartal ein Rückgang des Umsatzes erwartet, gefolgt von einem stärkere vierten Quartal. Das Management rechnet damit, dass der Umsatz im vierten Quartal leicht über dem des zweiten Quartals liegen wird.
• Zusätzlicher Gegenwind von der Währungsseite wird den Umsatz der zweiten Jahreshälfte gegenüber den bisherigen Annahmen voraussichtlich um einige Millionen US-Dollar schmälern. Dieser Effekt ist in der beibehaltenen Prognose enthalten.
• Für die Bruttomarge im Gesamtjahr wird ein leichter Rückgang gegenüber 2025 erwartet; sie dürfte weitgehend auf dem Niveau des ersten Halbjahres 2026 liegen.
• Das bereinigte EBITDA für das Gesamtjahr wird weiterhin im Bereich von minus 15 bis knapp 20 Millionen US-Dollar erwartet, wobei die Quartalsentwicklung weitgehend dem Rhythmus des Umsatzverlaufs folgt.
• Das Management rechnet ab 2027 mit dem Übergang zu einem positiven freien Cashflow.

Risiken und Beobachtungspunkte

Die Quartalsergebnisse von AIRO reagieren weiterhin empfindlich auf den Zeitpunkt großer Drohnenauslieferungen. Das Vorziehen einer wesentlichen Lieferung in das zweite Quartal dürfte zu einem Umsatzrückgang im dritten Quartal gegenüber dem Vorquartal beitragen.

Aufgrund der internationalen Ausrichtung des Unternehmens stellt die Währungsentwicklung eine weitere kurzfristige Belastung dar. Das Management rechnet nun für die zweite Jahreshälfte mit stärkeren Umsatzauswirkungen als zuvor angenommen.

Das Ausbildungssegment bleibt kapitalintensiv und entwickelte sich unter den Erwartungen, was die strategische Überprüfung auslöste. Das Management verwies zudem auf Genehmigungsprobleme mit der ukrainischen Regierung, die den Fortschritt der Joint Ventures Nord und Bullitt beeinträchtigt haben, betonte jedoch, dass das Wachstum nicht von einer einzelnen Partnerschaft abhängt.

AIRO investiert weiterhin in Fertigungskapazitäten und neue Produkte. Obwohl die Entwicklungsausgaben für die JC250 und JX250 unter dem Plan liegen, rechnet das Management für das Gesamtjahr weiterhin mit einem deutlich negativen bereinigten EBITDA.

Wichtigste Punkte aus der Analysten-Fragerunde

Die Analysten konzentrierten sich auf die Zusammensetzung des Auftragsbestands, US-Auftragschancen, die Nachfrage nach der RQ-70, Entwicklungsausgaben und den freien Cashflow. Das Management stellte klar, dass der aktuelle Auftragsbestand von 163 Millionen US-Dollar keine US-Aufträge enthält. Die Blue-UAS-Zertifizierung wird als wichtiger Schritt gesehen, um die US-Pipeline in feste Aufträge und Auftragsbestand umzuwandeln.

Hinsichtlich der Liquidität führte das Management den im Vergleich zum 31. Juli niedrigen Barmittelbestand zum 30. Juni hauptsächlich auf Auslieferungen gegen Ende des Quartals und den Zeitpunkt des Zahlungseingangs von Forderungen zurück. Nachfolgende Zahlungseingänge hoben den vorläufigen Barmittelbestand auf rund 56 Millionen US-Dollar an.

Das Management erklärte, dass strategische Alternativen für den Ausbildungsbereich weiterhin geprüft werden, wobei Drohnen und Avionik als Kernprioritäten für die Kapitalallokation des Unternehmens festgelegt wurden. AIRO prüft zudem Partnerschaften und Übernahmen, die das Drohnen-, Avionik- und Elektronikportfolio erweitern und gleichzeitig die quartalsweisen Umsatzschwankungen verringern könnten.

Vollständiges Transkript der Telefonkonferenz

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

Thank you for standing by. My name is Jonathan, and I will be your conference moderator today. At this time, I would like to welcome everyone to the Aero Q2 2026 earnings call. [Operator Instructions]

I would now like to turn the call over to Jack Senft, Investor Relations at Aero. Please go ahead.

Unknown Executive

Thank you, Operator, and good morning, everyone. Welcome to the Aero Group Holdings, Incorporated second quarter 2026 earnings call. We appreciate you joining us today and look forward to sharing an update on our progress and performance. With me on the call are Dr. Chiranjeev Kathuria, our Executive Chairman, Captain Joseph Burns, our Chief Executive Officer, and Dr. Mariya Pylypiv, our Chief Financial Officer. Today's call will include forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to Aero's 2026 outlook.

Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. Forward-looking statements represent management's beliefs and assumptions only as of the date made. Information on factors that could affect the company's financial results is included in the company's most recent annual report on Form 10-K and other filings with the SEC from time to time. In addition to our prepared remarks, our earnings press release, SEC filings, and a replay of today's call can be found on our Investor Relations website at investor.theaerogroup.com. We have also posted our earnings presentation on the Investor Relations section of our website.

In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not a substitute for, or superior to measures of financial performance prepared in accordance with GAAP. Reconciliations between GAAP and non-GAAP financial measures and the discussion of the limitations of using non-GAAP measures versus their closest GAAP equivalents is available in our earnings release. Additionally, we plan to discuss drone segment backlog, a definition of which can be found in our earnings release. We will also discuss our cash balance as of July 31, 2026, which is a preliminary estimate based on information available to us as of the date of this presentation. Additional information on this metric can be found in the earnings presentation on our Investor Relations website.

With that, I will turn it over to our Executive Chairman, Dr. Chiranjeev Kathuria.

Chirinjeev Kathuria

Thanks, Jack, and thank you all for joining us today. Aero delivered a strong second quarter that was marked by revenue outperformance against expectations driven by solid execution within our drone segment. Gross margins improved to 64%, leading to a small operating profit for the quarter, a big improvement from the loss we saw in the same period last year. Looking ahead, and as Mariya will discuss in her section, we are reiterating full-year revenue growth guidance of 15% to 25%. She will detail some additional thoughts to think through the rest of the year. On top of this, total drone backlog grew roughly 9% from last quarter to approximately $163 million.

On the strategic front, it was also a busy quarter. The RQ-35 drone achieved Blue UAS certification, which opens up meaningful new opportunities in U.S. defense procurement. We also unveiled our new RQ-70 long-range ISR platform. Development continues on the JC250 and the JX250 cargo and ISR drone variants, and costs there are coming in below expectations, with the first flight still on track for later this year. We remain squarely focused on the unmanned drone market. Second quarter was a solid quarter of execution, and we expect that momentum to continue as we scale manufacturing, diversify our revenue base, and stay disciplined on cost, all while continuing to invest in Aero's next phase of growth.

With that, let me turn it over to Joe to discuss our strategy and the operational highlights.

Joseph Burns

Thank you, Chiranjeev, and thank you all for joining us on today's earnings call. I am happy to report second quarter results that exceeded expectations, finishing out a strong first half of the year. Our second quarter results were marked by on-time drone deliveries plus multiple announcements. These recent developments highlight our execution on strategy, but we are not done here. While second quarter top-line results mark sequential growth versus our 1Q performance, this demonstrates the variable nature of our business. Still, second quarter results topped expectations. We are reiterating our full-year guidance ranges we previously provided. Mariya will walk through the financial details later in the call.

Now let me provide some updates on our portfolio and strategic positioning at Aero. We have a solid, growing portfolio of products and services. We remain focused on the overall drone market, whether it be through new product developments or through partnerships and inorganic opportunities. We are actively working to reduce quarterly variability by expanding our international and domestic revenue base. One such milestone on our product side, and one that I'm especially pleased to highlight, is that our RQ-35 drone is now officially Blue UAS certified. With this approval, the RQ-35 is recognized by the Department of Defense as a secure, compliant unmanned aircraft system, eligible for government and defense procurement under NDAA requirements.

As most of you know, Blue UAS streamlines access to the DoD and federal procurement channels, accelerating our ability to compete for and secure U.S. defense contracts, which we expect will support Aero's long-term revenue growth across domestic and international markets. We believe the Blue UAS milestone is a testament to the RQ-35, from its embedded technology, use cases, and performance on the battlefield. The RQ-35 and now our recently unveiled RQ-70 continue to set our technology apart from the rest of the pack. The RQ-35 is battle-tested, having been deployed in the Ukraine conflict, and the platform is extremely quiet, hand-launched, and purpose-built for ISR missions. It has demonstrated real resilience, even against electronic warfare and in GPS and GNSS-denied environments.

With up to 50 kilometers of range and 150 minutes of flight time, it delivers extended time on target, quick frontline serviceability with a smart battery for reliable performance. The RQ-35 platform also offers onboard AI with edge computing, which enables real-time identification and classification of enemy assets and threats, while strengthening navigation, situational awareness, and mission execution. This drives faster, more informed decisions in the field. As a note, edge computing brings our flying servers closer to the battle, allowing us to significantly speed up and improve target recognition and decision speed, which reduces the already jammed bandwidth required by other competitor systems. Our goal is to embed AI across all of our product and service offerings at Aero.

The RQ-70 is our newest platform, built on years of RQ-35 battle data and leveraging our existing manufacturing and NDAA supply chain. We are already engaged with multiple defense customers on future deployment. It offers configuration flexibility between standard, long-range, and VTOL configurations and includes a modular design that lets it serve as a standalone ISR drone for NATO and allied customers. Our RQ-70 is built for up to 8 hours of endurance, 100 kilometers of range, and resilience in GPS-denied environments. We are reaffirming expected production start in January 2027. Capabilities such as these further set Aero apart with strong customer validation to date. We are building on that momentum with new initiatives and will continue to provide updates in the quarters ahead.

On the product side, we're making great progress developing our cargo and ISR drone variants, the JC250 and JX250. We have been strategically evaluating and selecting suppliers for the vehicle, and we are reaffirming our expectation for the first flight later this year. I am also happy to report that Aero-specific costs for development are running below our internal expectations by a low double-digit percent. There are a few driving factors. First, because the cargo and ISR variants share a common foundation, we are developing them at a fraction of the cost of their passenger counterpart. Second, we have made real progress in supply chain negotiations, which is lowering our input costs. Third, we are realizing synergies across the platform faster than we had modeled. And finally, our R&D team has been executing efficiently, which is keeping development costs disciplined. Taken together, these factors are giving us confidence in the cost trajectory of this program.

While still in the early innings, all the developments that I mentioned represent our efforts in diversifying our product portfolio and stabilizing revenue variability over time. On the avionics and electronics side of our portfolio, Aero delivered largely flat revenue quarter-over-quarter as demand for our avionics products remained stable and consistent with the prior quarter. Despite the static growth year-to-date, we are actively advancing next-generation sensor and navigation solutions, which were on display at the EAA AirVenture Oshkosh in late July. We received solid feedback at the trade show with customers highlighting our product reliability and functionality. Avionics continues to play a critical and strategic role within our broader company profile. With our avionics and ramping U.S. drone operations now consolidated under one roof in Phoenix, we expect synergies here to begin bearing fruit in the coming quarters.

These dynamics are part of what reinforces Aero's long-term competitive advantage. Over time, we expect to bring more avionics systems in-house across our unmanned platforms, streamlining operations, reducing supply chain complexity, and ultimately strengthening our gross margin profile. Lastly, on the services side, we are continuing to evaluate strategic alternatives for training, and we expect to have an update on that direction by the end of the year. We believe the training segment remains a valuable asset with a significant long-term opportunity, although the segment is capital-intensive and often requires meaningful ongoing investment. Recall, while underlying demand persists within this segment, performance here has been below expectations. This is driven by the fact that the task orders coming out of the U.S. government are not within the strengths of Aero.

We believe this narrative will shift over time, and we are positioning, investing, and strengthening our training asset to pursue upcoming long-term close air support training opportunities. That said, we are exploring all possible avenues for the business, but our focus remains on unmanned systems. Overall, we are encouraged by the momentum generated across our portfolio during the second quarter. From achieving Blue UAS certification for the RQ-35 and advancing customer engagement around our new RQ-70 platform to progressing development of our cargo and ISR drone variants and positioning our avionics business for future synergies, we continue to execute on our strategy of expanding capabilities, diversifying revenue streams, and embedding AI across our offerings. While there is still work ahead, we believe these milestones reinforce the strength of our technology and market position, and we look forward to building on this momentum in the quarters to come.

We remain disciplined on our capital initiatives. We continue to evaluate inorganic opportunities carefully, focusing on acquisitions that would be accretive in the near term and that strategically enhance our product portfolio, namely for drones, avionics, and electronics. We also see M&A as having the potential to play an important role in reducing Aero's quarterly revenue variability over time. As I have discussed in the past, our balance sheet gives us real flexibility to act when the right opportunity comes along, and selective M&A will continue to play a vital role in how we endeavor to maximize long-term shareholder value. With the multiple drone deliveries in 2Q, and given the timing of these drone deliveries at quarter end, our cash balance as of July 31, 2026, was approximately $56 million, significantly strengthening Aero's balance sheet.

In closing, the initiatives, discipline, and efforts we have employed to date bolster our strategy of delivering mission-ready ISR systems that can be produced, upgraded, and supported at scale. I'm also grateful for the colleagues beside me today and for every employee who makes this company what it is. Our leadership team brings extensive industry experience to the table, and as we continue to add key personnel, we are further strengthening our competitive position in the market. With that, I will turn it over to Mariya, who will walk you through the financial results in more detail. Mariya?

Mariya Pylypiv

Thank you, Joe, and good morning, everyone. For the second quarter of 2026, revenue was $43.2 million, compared to $24.6 million in the second quarter of 2025. This represents growth of nearly 76% year-over-year. Revenue for the quarter was ahead of expectations, driven by outperformance against expectations in our drone segment, partially offset by underperformance in avionics and training. Gross profit for the quarter was $27.7 million, representing a gross margin of 64%, compared to a gross profit of $15 million and gross margin of 61% versus the same period last year. The improvement in gross margins, both sequentially and year-over-year, was also driven by a product mix shift back towards drone products, consistent with expectations. Recall, our first quarter margins were impacted by upgrade revenue, negatively impacting margins.

Operating income for the quarter was $1.7 million versus negative $19.7 million in the second quarter of 2025. This year-over-year improvement is a result of higher revenue, improved gross margins, and IPO-related costs incurred in the prior year period. We remain disciplined on costs while continuing to invest selectively in the infrastructure needed to support our growth. Our second quarter net loss was $2 million versus a net income of $5.9 million in the second quarter 2025. Second quarter 2026 EBITDA was $5.1 million compared to $18.9 million in the prior year period. On an adjusted basis, EBITDA was $6.8 million, up from $4.7 million in the second quarter 2025.

As Joe mentioned, on the cost side for our JC250 and JX250 platform, I am happy to report that development costs are tracking below our internal expectations. The shared foundation between our cargo and ISR variants means we are developing them at a fraction of the cost of the passenger version, and we are realizing savings beyond our original projections by roughly a low double-digit percentage. We retain flexibility to adjust our spending pace up or down as conditions warrant. Right now, though, we believe the right path forward is deliberate, efficient investment to put the required infrastructure in place to support our next phase of growth.

Turning to cash flow and liquidity, as of June 30, 2026, we had $25.9 million in cash on the balance sheet, with $6.8 million in debt. Accounts receivables were higher than usual at quarter end, driven by the multiple drone deliveries late in the quarter. As of July 31, we had approximately $56 million of cash, primarily reflecting the subsequent collection of international drone receivables outstanding at quarter end. This strengthened our liquidity position and provides us with continued flexibility to execute against our strategic priorities. As of June 30, 2026, we had roughly $163 million in drone backlog. We expect the majority of this backlog to convert to revenue within the next 12 months. We will be updating our backlog to include U.S. opportunities and ongoing pursuits in the coming quarters. We expect this will meaningfully increase the total backlog as those orders are incorporated.

We define backlog as orders we reasonably expect to convert to revenue over the next 12 months. As this metric provides visibility into near-term demand, our broader pipeline continues to expand, underscoring the long-term demand trends we have discussed throughout today's call. Based on our current visibility, we are reiterating our full-year revenue growth guidance of 15% to 25% year-over-year. Let me provide some additional context on the expected cadence for the remainder of the year. First, 1 material drone delivery originally expected in the third quarter was completed in the second quarter. As a result, first half revenue represented approximately 50% of our current full-year expectations. Second, reflecting that pull forward, we currently expect second half revenue to be in line with, or modestly above, first half revenue. Within the second half, we expect third quarter revenue to decline sequentially from the second quarter, followed by a stronger fourth quarter. We currently expect fourth quarter revenue to be modestly above the second quarter.

Third, given the international nature of our business, foreign exchange remains a factor in our outlook. We now anticipate greater FX headwinds in the second half, with an incremental revenue impact of a few million dollars compared with our prior expectations. We have incorporated that impact into our outlook and remain confident in our full-year guidance range. We continue to expect modest gross margin compression versus 2025, with full-year gross margin broadly in line with first half levels.

Turning to profitability, we continue to expect full-year 2026 adjusted EBITDA in the negative mid to high teens millions, with the quarterly cadence expected to broadly follow revenue. In closing, our strategy remains focused on 3 priorities: diversifying our revenue base, scaling manufacturing, and accelerating new product introductions. As those products ramp up and make up a larger share of revenue, we expect that to reduce quarterly volatility and strengthen backlog growth over time. Specifically, with the introduction of the RQ-70, the first delivery of the Zentra camera suite, and the JC250 and JX250 coming online late next year, we expect to begin seeing the benefits of that revenue stability next year, with continued improvements in the quarters and years to follow.

That progress is exactly why fiscal year '26 is a year of accelerated investment for us. As I have said before, we are still early in our growth phase and we intend to invest accordingly, while staying disciplined on costs and preserving flexibility to adjust our cost structure as needed. That balance supports our confidence in Aero's long-term growth trajectory. With that, Operator, we're ready for questions.

Operator

[Operator Instructions] Our first question is from the line of Colin Canfield from Cantor Fitzgerald. Your line is now open. Please go ahead.

Fragen und Antworten

Colin Canfield

Maybe if we could start on drone order trends to parse out the mix of U.S. and international drone orders for the RQ-35, discuss the milestones that you need to see to essentially increase the backlog. The comment you made on materially increasing backlog, basically, what milestones does it take to recognize that backlog increase? And then if you could also talk about early customer interest for the RQ-70.

Mariya Pylypiv

Hi Colin, thank you for your question. So I'll start. Our $163 million backlog represents international drone backlog and does not currently include any U.S. backlog. We expect that the majority of that backlog will convert to revenue over the next 12 months. So naturally, the portion of it extends into 2027. In terms of the U.S., we have responded to a number of RFQs and continue to see a growing pipeline of opportunities. And as those opportunities convert into orders, and we expect them to be able to convert into backlog, it will provide additional visibility for U.S. backlog, which will incrementally add to the $163 million backlog we are currently reporting today. As far as additional products being included, it's mostly composed out of the RQ-35. There's a very small percentage of the RQ-70 being added to this number right now.

Joseph Burns

And if I, this is Joe, good morning, Colin, if I could follow on with that. Some of the milestones, obviously key milestones for us were the Blue UAS certification, which will allow us into the U.S. market. So that was a big one. The RQ-70 announcement and launch of that product are also a big milestone to enhance our expansion of our margin profile. You also mentioned or asked a question about early customer interest in the RQ-70. It's been very strong because it does fill a gap in sort of that high-end ISR market, that long duration flight, ease of operations, and low costs. So we feel very, very strong about the RQ-70 filling in the interest category as well.

Colin Canfield

Maybe if we could talk about free cash flow. The foundational building blocks and kind of the level of investment related to the defense transport platform. Just kind of walk through how you think about the investment on that program and flexing down, and perhaps maybe kind of how you think about that relative to the company's ability to generate free cash flow. Thank you.

Mariya Pylypiv

Thank you, Colin. So I'll start and then I'll let Joe add anything I missed. So in terms of free cash flow, we are very comfortable right now with our liquidity position, and it's closely tracking our internal expectations. The biggest factor for the quarter was timing as we were building inventory to support deliveries. So those deliveries occurred at the end of the quarter, a significant portion of receivables converted into cash. And as I mentioned earlier, as of July 31, our cash and cash equivalents were approximately $56 million.

In terms of investments for the air mobility, our costs have been reduced, which Aero is very comfortable with. Right now they're running in the low double digits below initial expectations. And while we have not provided the size of the investments, we are still tracking on time. And overall, because we shifted our focus on ISR and cargo drones, it significantly reduced our expected development costs compared to the passenger platform, which obviously provides significant upside for our liquidity. And if we think about moving forward, free cash flow, we anticipate there should be a shift into positive cash flow in 2027 and beyond.

Joseph Burns

That's great. Thank you. And to expand on the JX250 and the JC250, our ISR and cargo variants of that large cargo transport, you know, we've talked about in the past about eVTOL. This is an eVTOL aircraft, but it's different than what we had previously discussed in the passenger realm. We don't carry passengers on this. It's basically a large cargo drone. Very long duration, hybrid drive can use conventional fuels. So we think there is a new and growing market for this type of transport if you think about sort of combat operations, the ability to resupply, get critical medical information to and from, etc. So for us, it's a real opportunity to jump into somewhat of a new market. You're starting to see that, obviously, in this industry as well.

Operator

Thank you. Your next question comes from the line of Andre Madrid from U.S. Bancorp BTIG. Your line is now open. Please go ahead.

Andre Madrid

I was wondering if you could provide us an update on where you're at with Nord and Bullitt, those JVs.

Joseph Burns

Sure. This is Joe. Good question, Andre. So as you probably know at this point, there are some significant order issues or significant issues with the Ukrainian government's permitting process. You know, in their current [indiscernible] government, there is [indiscernible] of aircraft coming into [indiscernible] transfers. We are still [indiscernible] and we're working [indiscernible] council over there and [indiscernible] these permits. But that said, the partnerships and JVs like these are really a compelling route for us. I want to make it clear that we're not dependent on any one of them for growth.

The partnership and JVs will expand our access to multiple markets and help accelerate our growth plans. We're currently evaluating additional partnerships as well in this particular market, and those specifically for drone dominance. So we're excited about other opportunities. It's really opened our eyes as to what's available, what the markets look like for us. And with the ability for our certification routes, we're excited about [indiscernible] in these things moving forward.

Andre Madrid

That's really helpful. And then maybe pivoting to training for a bit. I know you guys had mentioned last quarter your decision to pursue strategic alternatives or consider strategic alternatives there. Is there any update that you can provide as to maybe how that's tracking and when the decision might be made?

Joseph Burns

Sure, we're planning to have decisions by year-end. We're making a lot of discussions around it. As we mentioned before, we're actively evaluating a range of strategic options. And our intent in disclosing this is to be transparent with the market. Well, really our core focus right now is on drone and avionics operations. And we see limited synergies between the training segment and our core business, which is important while we're evaluating the long-term strategic fit. Training is expensive. We have made a significant investment so far, but we're still excited about the opportunities in this particular business. But as always, drones are our main focus, and that's where we want to look at focusing most of our capital.

Andre Madrid

Yes, that's really helpful, Joe. I appreciate it. I'll leave it there. Thanks.

Operator

Thank you. There are no further questions. We have reached the end of the Q&A session. This concludes today's call. Thank you for attending. You may now disconnect.