Earnings call transcript: SKYX Platforms Q3 2025 earnings miss by small margin

SKYX Platforms Corp reported its Q3 2025 earnings, showing a slight miss on revenue expectations but continued growth in key areas. The company's earnings per share (EPS) was -$0.07, compared to the forecasted -$0.06, marking a 16.67% negative surprise. Revenue came in at $24 million, just below the $24.45 million forecast. Despite the earnings miss, the stock saw a modest increase of 0.63% in aftermarket trading, reflecting cautious optimism among investors.

Key Takeaways

• SKYX Platforms reported a slight miss on revenue expectations with $24 million.
• The company has achieved seven consecutive quarters of revenue growth.
• Stock price increased by 0.63% in aftermarket trading.
• Plans for upcoming product launches and innovations in smart home technology.
• Continued focus on expanding into global markets and B2B segments.

Company Performance

SKYX Platforms continues its streak of revenue growth, reporting $24 million in Q3 2025, up from $23 million in the previous quarter. The company's gross profit and margins have also improved, reflecting operational efficiencies. In the context of the smart home industry, SKYX is positioning itself uniquely with a focus on standardizing smart ceiling platforms, which could provide a competitive edge.

Financial Highlights

• Revenue: $24 million, up from $23 million in Q2 2025.
• Earnings per share: -$0.07, improved from -$0.08 in the previous quarter.
• Gross profit increased by 8% to $8 million.
• Gross margin rose by 4% to 32%.

Earnings vs. Forecast

The company reported an EPS of -$0.07, slightly below the forecast of -$0.06, resulting in a negative surprise of 16.67%. Revenue fell short of expectations by 1.84%, coming in at $24 million against a forecast of $24.45 million. While these misses are minor, they reflect challenges in meeting market expectations.

Market Reaction

Following the earnings release, SKYX Platforms' stock experienced a slight uptick of 0.63% in aftermarket trading, rising to $1.59. This movement suggests a neutral to mildly positive investor sentiment, likely driven by the company's continued revenue growth and strategic initiatives in the smart home technology space.

Outlook & Guidance

Looking forward, SKYX Platforms plans to deploy 50,000 products by the end of Q4 2025 and anticipates significant growth in its B2B segment in 2026. The company is also focusing on expanding its product line and entering new markets, particularly in the Middle East. These initiatives are expected to bolster future revenue streams.

Executive Commentary

Steve Schmidt, President of SKYX Platforms, expressed optimism about the company's progress, stating, "We are making significant progress and are working on additional significant business opportunities." Khadija Mustafa, former Microsoft AI Head, highlighted the company's potential to transform the smart home industry, saying, "SKYX has the potential to change [the smart home] by starting where others have been less focused."

Risks and Challenges

• Potential impacts of a U.S. government shutdown on operations.
• Continued net losses, although reduced, present a financial challenge.
• Market saturation and competition in the smart home technology sector.
• Supply chain disruptions could affect product deployment and manufacturing.
• Economic conditions in target markets, particularly in the Middle East.

Q&A

During the earnings call, analysts inquired about the revenue mix between consumer and B2B sales, strategies for margin improvement, and the potential impacts of a U.S. government shutdown. The management detailed opportunities in the Middle East market and emphasized their focus on expanding the company's B2B segment.

Full transcript - SKYX Platforms Corp (SKYX) Q3 2025:

Speaker 4: Good day and welcome to the SKYX Platforms Corp Third Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. Before we begin, I would like to remind everyone that today's call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. For more details, please refer to our Form 10-Q for the quarter ended September 30, 2025, and other filings with the SEC.

SKYX undertakes no obligation to update forward-looking statements except as required by law. I would now like to turn the conference over to Rani Kohen, Founder and Executive Chairman. Please go ahead.

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Thank you. Welcome to our Third Quarter Conference Call. We will start today. We have some significant things that are happening for us recently, and we're happy to be and share some of them with our emphasis. I will pass it to Steve Schmidt, our President, excuse me, Len Sokolow, our CEO, Steve Schmidt, our President, former CEO, I should say, A.C. Nielsen, the data corporation. Thank you. Please, Steve.

Steve Schmidt, President, Former CEO of A.C. Nielsen, SKYX Platforms Corp: All right, Rani, hey, thank you very, very much. It's great to be with you here this afternoon. I also want to welcome you to our Third Quarter Earnings Call. As you're going to hear today, we are making significant progress, and I'd like to emphasize that there are more significant things to come on several fronts in the very near future. We've reported record revenue of $24 million in the Third Quarter 2025 compared to $23 million for the Second Quarter 2025 as we continue to grow our market penetration. Our revenues have now increased for seven consecutive quarters from Q1 2024 to Q3 of 2025. We've signed an agreement with a prominent U.S. and international real estate developer's Global Venture Group to deploy our advanced smart home technologies to buildings and hotels in Middle East projects, including Saudi Arabia and Egypt.

We expect to deploy hundreds of thousands of units to tens of thousands of homes and hotel rooms to Middle East projects, including Saudi Arabia and Egypt. This is another major step for us as we anticipate more to come in the real estate segment. We will be supplying our technologies to a 278-apartment project in Austin, Texas, built by prominent developers Landmark Companies, providing over 10,000 units of our advanced and smart plug-and-play technologies. Again, another major prominent development group, and again, we anticipate more to come. As previously shared, we have established a major collaboration with a Miami $3 billion mixed-use urban smart home city project. We expect to supply over 500,000 units of our advanced smart home plug-and-play platform technologies for the entire smart city project. After our successful demonstration of our technologies during a recent Marriott hotel renovation, we expect to significantly expand our hotel segment.

We hope to share more information about our hotel channel expansion in the very near future. We can continue to grow by developing over 50,000 of our products into homes and units by the end of Q4 2025 through retail and pro segments. It's important to emphasize that our technologies expansion provides additional opportunities for future recurring revenues through interchangeability, upgrades, AI services, monitoring, subscriptions, and data. As former CEO of A.C. Nielsen, I understand the importance of data and the revenue opportunity associated with it. Khadija Mustafa, former head of Microsoft AI, will be shortly expanding on this significant opportunity. Regarding our safety code standardization, our team continues to make progress and is receiving significant support from a prominent leader with its government safety organization process for safety mandatory standardization in homes and buildings of our ceiling outlet and receptacle technology.

We are confident with the recent progress that our team is making with our mandatory application for our ceiling receptacle. On the product front, we expect to launch our patented advanced and smart turbo heater fan and variety of plug-and-play ceiling fans during this month. We anticipate it will be a major step towards our positive cash goal. In the area of AI, a significant development is our upcoming launch of a new AI-driven software for our e-commerce platform of 60 websites, expected to increase our conversion rate and sales by 30%. The AI-native e-commerce platform designed to elevate B2B and B2C experiences through our innovative and smart product line. In the area of cash, as of September 30, 2025, we reported a total of $13 million in cash, cash equivalents, restricted cash, and receivables.

The company has recently raised $5 million in additional capital from two of our leading shareholders. This is another proof of confidence from our lead investors and in continuation of our path of raising funds from strategic long-term investors and shareholders, as well as from insiders, including myself. Before I pass it to Len Sokolow, our CEO, I'd like to emphasize again, like I did in our last call, that we are making significant progress and are working on additional significant business opportunities, and we hope to be able to share a significant amount of this more in the very, very near future. With that, let me turn the call over to Len Sokolow, our CEO. Len?

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Just pass it to Lenny. And Lenny Sokolow will talk now, our CEO. Afterwards, I'm going to talk. And last and not least, we have with us today Khadija Mustafa, the former head of AI for Microsoft and also that has a relationship with the G42 Emirates' well-known global AI and development firm. So please, Lenny.

Len Sokolow, CEO, SKYX Platforms Corp: Great. Thank you, Rani, very much. Thank you, Steve, for that update. Just to reiterate is that what we've reported is a year-to-year and sequential growth. I mean, this is material for us, and it's a very positive trend that our expectation is that we're able to continue. In addition to the $5 million that in terms of recently raised capital, again, it's important to understand these are from two leading shareholders of ours. Of even greater importance is the fact that these were reflected in notes approximating $11 million, and they're now been restructured and coming due with a maturity date out five years to 2030. It's very reflective of their understanding of where we are, their belief in what we have, and their confidence in our strategy and our development.

I think that'll be reflected, as we'll see in this quarter's disclosures coming into the end of the year. We continue to use and leverage our cash position through the e-commerce platform of our 60 websites, among other methods, including the support from leading strategic investors and insiders. Of interesting note is that we have a growth we're showing in our deferred revenue, which is our revenues that are of sold product primarily from our websites that are in transit for a day or two until the customer receives that. That growth is showing an acceleration of our revenues primarily from our e-commerce platform. As common with a company such as ours, when we have sales that are converted into cash rapidly, this is often referred to as the Dell working capital model.

We leverage our trades payable to finance our operations and to enhance our cash position and, in effect, lowering our cost of capital through the support of our vendors. This opportunity and this structure is one that we've rolled into some of our key manufacturing partners that can give us the same mechanics of the Dell working capital model to help finance our purchases and support our inventory needs. I think it's important to understand that we're very focused on multiple levels with respect to cash leverage and cash conservation. The gross profit for the third quarter ending in September 30 increased sequentially by 8% to $8 million compared to $7 million in the second quarter ending June 30, 2025. This also concurrent with this is the fact that we had a small decrease in our cash from operating expenses that we've used.

We're not generating additional expenses as we generate more gross profit. The gross margin for the third quarter ending September 30, 2025 increased sequentially by 4% to 32% compared to 30% in the second quarter ending June 30, 2025. Our net loss per share decreased by 1 cent to 7 cents per share in the third quarter as compared to 8 cents in the second quarter. Adjusted EBITDA loss per share, a non-GAAP measure, remained at 2 cents per share in the third quarter as compared to 2 cents per share in the second quarter of 2025. We're showing a small decrease in our EBITDA loss, which is a good indicator, positive indicator for us. With that, I would like to pass it on to Rani if you want to go ahead.

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Yes. Thank you, Steve and Lenny. I gave great cover here. Again, to emphasize some of the things that Steve mentioned, we're experiencing great progress with developers. Started with the smart city and projects prior to that in Miami and went through with the project in Austin from another prominent developer, Landmark. Now the collaboration and the signing agreement with Global Venture, that are major and prominent developers that are expanding towards the Middle East, including Saudi Arabia and Egypt. We're optimistic about a future towards those regions and others that we hope down the road that we'll be able to share with you. Also, we are experiencing, as Steve mentioned, after our Marriott demo, a successful demo that we shared the video online. It's still there somehow, but this opened some doors for some significant business that we believe will happen.

We hope, as Steve mentioned, to announce it sooner than later. We are working, and we expect to open some more doors towards those channels. Also, when we are supplying to the builder and the hotel segment, as Lenny mentioned, we are leveraging our relationships with manufacturers that want to join our ride here and participate in places like the smart city in Miami or the buildings we are doing here in the U.S. or hopefully the hotel segment, as well as the global segment in the Middle East. We are leveraging that to get funding from them. That is another way we are leveraging what we are doing and the penetration we have thanks to our technology that opens doors with builders, with hotels, and other projects internationally. Vendors do want to participate with us and are helping us here to fund it. As Lenny calls it, the Dell model.

The concept is that we are supplying, getting paid, and pay the vendors after. That is quite significant when it comes to continuing managing our cash flow here. Last but not least, before I move it on to Khadija Mustafa, the former head of AI for Microsoft and also former global head of sales for Microsoft, as Steve mentioned, we're making progress with the mandatory. We see some significant steps that are taken behind the scenes, and we hope that we're getting closer to that day. There is people to remind everyone. People are dying. People, many injuries, many fires, significant number of ladder falls and everything here on a daily base. Our product can prevent most, if not all of these.

I think we're getting some attention from very high levels, and we hope that we'll be able to share more in the near future. With that, I'll pass it to Khadija Mustafa. Please, Khadija.

Khadija Mustafa, Former Head of AI for Microsoft, SKYX Platforms Corp: Thank you, Ronnie. Delighted to be here. I think, as you've already heard from the team, SKYX is gaining solid traction and expanding very fast. Everything from Miami Smart City Initiative all the way to the partnership with Global Venture Group that's opening doors for projects in Saudi Arabia, Egypt, and sort of expanding into other parts of the Middle East. I just wanted to sort of call that out and mention that it's not just about growth. It's about progression towards really going into the global space and scaling out. That's so important because if you look at what's happening in Saudi alone, if I take that as an example, I'm sure you've been watching. The pace of innovation is extraordinary. Every sector there is rethinking itself, adopting advanced next-generation technologies to leapfrog what the rest of the world has done or is doing.

They have a lot, they have very big appetite. That is just one country out of the different areas where SKYX is expanding. This is where SKYX fits perfectly. When you combine that also with the population and urbanization trend that is happening across emerging markets, getting in now means that SKYX is going to be helping set the foundation for how people are going to live and work in the years ahead and also the decades ahead, which is very important. Now, just for me personally, having had a front-row seat in the tech industry for 27 years, there are a few observations that have sort of made me even more excited about the opportunity and how SKYX is well-positioned. There is not a single company that has yet unified the smart home or call it smart building space. It is still fragmented.

There's sort of a long tail of devices and ecosystems across different tech companies as well as lots of sort of unbranded technologies that don't seamlessly talk to each other. This is where SKYX has the potential to change that by starting where others have been less focused or not focused. If you think about the tech world, right, they're thinking about technology. What SKYX is doing is it's thinking about the integrated physical layer, which is going to enable the technology. Through its standardized all-in-one smart ceiling platform, SKYX is really creating the infrastructure that can connect everything else. This is what makes it so strategic because it completes the ecosystem, not only for the sort of mega-cap big tech companies, but also for the next wave of startups driving smart space innovation.

Right now, I think everyone is scrambling and getting in because we have this opportunity to really drive a lot of innovation with AI. Whether it's innovators, like I said, big or small companies, there's an opportunity to build an entirely new AI-driven set of services. We all know that AI integration, AI incorporation is pretty much the focus of every organization and government on earth, not to talk of all the individuals in the mix who are trying to figure out how they can sort of rescale and really take the power of this technology and apply it to everything they're doing. Just to give a few examples, obviously, I think SKYX's opportunity is much greater. Think about adaptive lighting that responds to presence and mood, predictive safety systems.

Rani just talked about, unfortunately, people have big safety issues in this space, but predictive safety systems that detect electrical or environmental issues before they become hazards. I'm sure you've all been watching the pollution issues that are happening in a lot of cities, real-time energy optimization tied to grid demand. Think about wellness and productivity insights drawn from the spaces we occupy every day. I like to think of this in terms of sockets or nodes of intelligence. The first was the smartphone. It was connecting the individual. So much of that data is now being used for all these smart services. The second is the car. I mean, it's connecting mobility. In fact, we haven't even mastered the car space, but it's happening. Now SKYX is defining the third socket or the third node.

This is about the spaces where we live and work, turning them into these active, intelligent nodes in the broader connected ecosystem. Steve mentioned this incredibly rich source of data. What makes this even more significant is that it's not just about the home, right? Because smart home is definitely a key place. It's transformative in its own right. It's about every kind of built environment. The team was talking about hotels, hospitals, offices, retail spaces, you name it. The list goes on. Each of those becomes a new opportunity for SKYX's platform to enable a wide array of AI-powered services and capabilities, again, at scale and globally. This is an opportunity both for SKYX to build on it, but the entire ecosystem is going to want to get onto the bandwagon, leveraging that information and then creating their own set of services.

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Great. Khadija, thank you so much. That's well-needed here because we're getting a lot of questions on our expansion and what type of products we bring. We put it usually as a general title as AI services and AI ecosystem. I think you brought a lot of color here. We want to thank you very much for this. Before we move to Q&A, I would like also to emphasize one of Steve's points here. We're getting very close to launch our heater fan, a turbo heater fan, and ceiling fans plug and play. We anticipate that that's going to bring us here very close to our goal here very soon of cash positive. We're looking forward to launch those products really in the next coming weeks now. It's all in production. It's all en route here.

We hope to have some announcements on this as well very soon. Thank you again to Khadija and team. Then we'll take some Q&A here. Barry Stein.

Barry Stein, Analyst: Yeah. Good afternoon. Can you hear me?

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Yes.

Barry Stein, Analyst: Okay. Thanks for taking the question, Rani. So a couple of questions, trying to get a better sense of the near-term revenue outlook, if you do not mind. You mentioned that you expect to deploy over 50,000 of your products by the end of Q4. I assume that is the total unit sales in the fourth quarter. If so, how does that compare to Q3? What kind of average selling price might we be thinking of? I assume that is expensive lighting fixtures, just simple Sky Plugs. Can you give me a little more color on that number?

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: I'll give you more color to that segment or that question in a way is to remind everyone we always emphasize our razor and blade model where our razor is a ceiling receptacle that opens the door for a simple fixture that can cost $50 or for a fancy fixture that can cost $500 or $1,000, or as Khadija mentioned, to our future all-in-one smart platform. We can't anticipate exactly what consumers will put in when they buy the receptacles. Our growth is with the number of units. We anticipate, correct, to be approximately 50,000 by the end of this year. Our mix is more as we get to the market, for example, we're in lighting chandeliers for a while. We started wall sconces. We're starting now down lights and recessed lights. We will start ceiling fans and the heater fan this quarter.

Those are revenue makers, a higher ticket per item. Once we land them, we'll have a better picture. We think that as we land those significant items here, we expect to have a variety of plug-and-play ceiling fans and a variety of the heater fan in several colors. We anticipate and we hope to get them to several places that we're working on now. We'll let everyone know once we launch in each segment and each channel as well. The big picture is, we are actually landing soon the exit signs, the emergency lights. They are supposed to land very soon.

Together with our turbo heater fan and the plug-and-play, and the more we add products into the mix and the smart products that are going to come here, I think that the razors are going to start accepting their blades. The blades, the more we have variety and higher ticket items, the revenues should improve. We also, as you all know, and we announced that we're working on a unique software that we're working to launch in our websites that we believe will increase our conversion rate and sales overall. We are optimistic for the future. We just want to try to be careful with what we say on numbers. As you can see from our press releases, and we do everything we say we will, and we're landing products step by step.

We anticipate that the numbers will come as we land more and more products.

Barry Stein, Analyst: If I can follow up, please, you just mentioned the software upgrade in the website. Maybe you could talk a little bit more exactly what you're doing. How do you increase revenue by 30% with a software upgrade? That sounds like a great upgrade. More importantly, when might we see the effects on revenue? My sense is that's probably a product or an upgrade that goes through to early 2026. It's not an immediate, it's not like fourth quarter is going to be up 30%. What are you doing more specifically, and when would investors see the results of that upgrade?

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: We are in the process of merging the software in. We are very careful as we are merging in because we want to be secured with what we are selling today and not rush it. We expect to have it hopefully done by Q1 or latest Q2 of 2026. Once fully merged, in combination with the new products we have, we do anticipate to increase conversion rate by all kinds of AI methods that have better, if we say, radars on what type of consumers are better chances for us to convert them and bring them more to our website, as well as a better experience overall in the website itself. Those softwares are quite sophisticated. With AI today, there are many tools. Especially when you have unique products, you have a better chance to drive people into your websites because of your uniqueness.

The combination of all, our e-commerce team is led by Huey Long, former Amazon that worked with Bezos and actually created the brand Basics, and him and his team. Together with our Executive Chairman, Kyle Johnson, that is an extremely capable person in the e-commerce arena, we are working with some key engineers that joined our company to maximize that potential. The softwares that were good five years ago, ten years ago are nothing to compare to the type of softwares you have today. That merge is expected to really take us to the next level of e-commerce.

Barry Stein, Analyst: Okay. My next question, you guys have announced.

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Again, Barry, one thing we're going to also emphasize, I'm sorry, to answer your question completely is, as we stated, we're going to have focus on the B2B segment and the pro segment that are currently through our website. Most of the stuff we do today is direct to builders on the B2B segment. Today, we feel and see that even the pro and builder segment are joining more online. That's an additional factor that we're focusing on.

Barry Stein, Analyst: Okay. My next question, you guys have announced so many customer announcements, builders, and so on in so many different places: Saudi Arabia, Egypt, Miami, Marriott Hotel. Which of those? It looks like the Marriott Hotel is done from the videos. The Miami project looks like it's still getting permit approvals. Which of those are currently shipping, and which of those are yet to come?

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: With the Marriott demo, it was an important demo to showcase and to open the door to much more business that we hope we'll be able to expand soon. We have some local projects that we're supplying. We're starting to supply very soon to Austin, Texas, as well as some projects here in Florida. We believe the smart city in Miami and the Saudi are more next year to start supplying. Again, it's a razor and the blade model. There's some time, but we're working on other projects that hopefully we will be able to share with the market soon.

Barry Stein, Analyst: Finally, you mentioned that your product, the smart plug, will reduce injuries. I just yesterday installed a light fixture, and I cut my finger and almost fell off the ladder. I can attest to what you're saying. Your products can't become mandatory fast enough. That's all my questions. Thank you.

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Thank you. I wish you know how sad it is and the data that we have here. One day we'll publish it. It's really shocking. We think there's 500 million U.S. installations. If you take the best example, let's say, in a perfect world, that 99% of those installations go perfect. Unfortunately, it's not the case. That leaves you from 500 to about 5 million that go wrong. It does not mean that everything goes wrong, someone gets injured or dies. I can tell you there's a significant number out of those that cutting your hand is really, you're in a good spot with this. Next time you're here, we'll show you a bit more data. Thank you, Barry, for your questions. Good questions. Thank you.

Barry Stein, Analyst: Make it $5 million a month.

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Yeah. Yes.

Barry Stein, Analyst: Thank you.

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Okay. Pat McCann from Noble Capital, please, Pat.

Pat McCann, Analyst, Noble Capital: Hey. Thanks for taking my questions. First, I was just curious with regard to the upcoming launch of the ceiling heater fan. I was wondering, do you have, is there a level of visibility you already have in terms of billings for that that you can expect in Q4 to kind of give you that visibility towards adjusted EBITDA break-even in Q4? Or is it more just kind of an expectation of what will happen once they become available?

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: We have some visibility. Again, we want to land them here, and it is coming very soon. We need to supply them in certain times, and that is our main focus. I think today in our press release, we did say that we anticipate things to start landing this month of November. Once they land, we have some ideas. We want to be careful here. It looks like we are landing also a variety of ceiling fans. Sometimes you have delays and everything comes together. I think that is what is happening here, we hope. Once we land them, we will have a better picture. There is some anticipation here.

Pat McCann, Analyst, Noble Capital: Got it. My other question was just in terms of revenue mix, looking ahead to 2026, do you have a sense of how you think things are going to play out in terms of the mix between consumer sales on the websites and so forth versus these builder partnerships starting to take a little more effect? Do you have any sense of a general mix between those two revenue types?

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Currently, our revenues for this year are mainly retail. We anticipate a big growth on the B2B starting in 2026. We already see some signs of it. Major growth will start in 2026. If you're asking, I think the future of next year or the following year will definitely see much more significant numbers coming from B2B. Eventually, I think B2B, but you never know with retails because we have some partnerships we announced with some big box like Home Depot. That can generate major numbers too. That can also generate major numbers with the B2B because Home Depot is growing that segment as well. We can't really come with what's going to sell first, what segments are going to come. We can definitely tell you that we are anticipating to grow significantly with the B2B segment.

Pat McCann, Analyst, Noble Capital: Thanks. That's all I had. Congrats on the quarter.

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Thank you. Thank you, Pat. We have Jack Vanderohe with us. Please, Jack.

Jack Vanderohe, Analyst: Hey. Okay. Great. Appreciate the update. Clearly, progress on all fronts. A lot of moving parts. You're tackling a lot. Good to hear. Where do I start? Rani, maybe just if you could touch on, and maybe this is for Len as well, with the gross margin in the recent move with the websites and the new software to boost conversion rates, what am I looking at here in the third quarter? This is a record gross margin historically on any quarter. Where does this go from here, I guess? Maybe there's some noise in the near term. Are we going to see a big uptick in benefits? Was this just product mix? I mean, it seems like you have all your next-gen products coming out, which I presume are higher margin, and you're also boosting margins on the e-commerce front. Just love to get your thoughts.

Where are we in the big picture of further upside there?

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Yeah. In the big picture, and then maybe Lenny explained it nicely with the numbers practically. The big picture, the more we merge our own products, the higher gross margins we expect to see. That's what's happening with our websites, including a combination of our new software that's going to kick in. I think we're quite optimistic to gross margins growing here. It's like to blend more and more in our products into that. Obviously, for success, many reasons. The new software will definitely help on this front as well. The mixture of our products into the market, the more we have our own products and the new software are both because the new products is also to the builder segment. With the software, it's to retail and to builders.

We see that our test shows that we have an opportunity to significantly continue growing our gross margins. What you see this quarter is really an example of what we said quarters before. Lenny, do you want to emphasize a bit more?

Len Sokolow, CEO, SKYX Platforms Corp: It's all, Jack, as we talked about, it's all about the margin blend. And as we land and sell more of our own product, even now on the websites, the e-commerce, we've got product we're landing, plug and play, ready. That supports the margin blend increase. Then you've got even a different margin profile when we go through the, let's say, the direct-to-retail channel like a Home Depot. We're not on the website itself. We have a different margin profile that's now blended with the e-commerce. Actually, as the e-commerce site grows, we're going to grow more B2B, which will, I think, impact the top line and the margin as well. We've got a lot of positive features, B2C, B2B, with respect to margin profile.

We haven't yet experienced, although we're very focused on licensing, which has a margin potential of 85% or more. That is to be realized in the future.

Barry Stein, Analyst: Excellent.

Len Sokolow, CEO, SKYX Platforms Corp: Any other questions, Jack?

Jack Vanderohe, Analyst: Yeah. I have one more. I appreciate all the color there. That's very encouraging to hear. I guess two more questions. Just real quick, I wanted to ask because of the drama with the recent U.S. government shutdown extended, ongoing, and now we're at the end of it here. Just what does this do in terms of your guys' progress in seeking the application for standardization of your product, your ceiling receptacle? Is there any impact at all? Is this behind us? I just want to know if this has any implication. I know you only want to share so much information. I just like to hear an update there.

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Generally, with all the tariffs, what it did is, and it's still not completely settled, but it looks like it will be. Those are the signs. That really made a lot of manufacturers much more creative. They went over to Taiwan and Vietnam and Cambodia with dealing. We announced, as you recall, a US source. Actually, it gave us more options of product. Sometimes it's the same manufacturers. It's just open facilities in different countries. Sometimes it's new manufacturers. That actually, hopefully, it ends this way. At the end of the day, it might be a benefit that opened more doors and more channels for us to import and collaborate with additional manufacturers. When it comes to the standardization, I think one thing that's very unique to our product, you can see that the government's pushing for manufacturing in the US.

We can tell you that what we do when it comes to the plug and receptacle and even the smart boards can be done here. Not only can it be done here, the biggest problem the U.S. has with manufacturing is the labor cost is 5-10x compared to other countries. When it comes to products like what we do, the receptacle, the plug, or the smart boards, and even the all-in-one smart platform, it can be fully automated production. That is what we will do. That opens the door to U.S. manufacturing. We are definitely leveraging that. I think a mandatory will significantly improve U.S. businesses and make America safe and maybe make America smart too because really, in our product, and it is a great question, standardization can be contingent on U.S. manufacturing. We actually can meet the criteria.

For example, car manufacturers will take them three to five years until they get all the robots in place. Our technology is fully automated and manufacturing. That is something that U.S. expects to grow. You saw probably that Apple is committed to do manufacturing here because laptops and phones, those industries can do to be manufactured today fully automated. Hopefully, we will get closer to standardization. That is going to open the door for more business here in the U.S. for us.

Jack Vanderohe, Analyst: Excellent. Just one more quick follow-up for clarity. The target kind of for, I think you were trying to track towards 50, was it 50,000 homes by the end of this year? Can you just maybe tie that to any of the more specific larger projects like smart city projects, the hotels, all of these moving parts? Are you going to receive orders in advance of the actual installation that are going to be? Is that 50,000 including any orders from any of these major project developments?

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Not from the Miami City yet and not from the hotels yet. I think there's a couple of projects that we are starting to supply. Yeah, the end of the year is really around the corner. In 45 days and the builder segment, I think we are supplying some products. We did supply already. It really looks like 2026 will start to be a significant part of our business, the builder and B2B and hopefully the hotel segment. We're working on some interesting things there. Hopefully, we'll, as Steve said, be able to share some of it.

Jack Vanderohe, Analyst: Okay. Great. I appreciate the update, guys. Thank you.

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Okay. Yeah. Yes, we have Tom Hayes from Ross. So please, Tom.

Tom Hayes, Analyst, Ross: Hey, thanks, guys. Appreciate the time and appreciate all the color today. I apologize if I missed it. Rani, can you just talk a little bit about the Middle East opportunity? I think one of your speakers discussed the opportunity there that the Middle East seems to be fast adopters of this changing technology. Just going to talk about, is it going to be the opportunity with commercial development, retail development, or residential developments? Just kind of broadly speaking, how do you kind of see that your new program working out?

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Yeah. In the Middle East, as many know, really a lot of emphasis there on development of advanced technologies. I think that that's what really opened the door for us to sign that agreement with Global Venture Group that are expanding toward that region. What they feel is that our technology can increase what they're doing, the value of what they're doing, provide better homes and hotels. They also anticipate to collaborate with other builders there and introduce our product because, as Khadija Mustafa mentioned earlier, that region is really massive growth now. I think Saudi in particular, people say that they want to be Dubai on steroids there. That's what we hear from people and developers. The more advanced buildings want to be, I think the better fit we have into those areas. We're here in South Florida and Austin, Texas.

We see it locally. We are talking to other developers here in that area and nationwide. Hopefully, we are working on some additional global segments. Definitely, I think the world is trying to get more advanced when it comes to construction, smart home. Obviously, safety is always a significant item.

Tom Hayes, Analyst, Ross: I appreciate that. Maybe just one follow-up for me on the turbo heater fan. Sounds like it's shipping this month or certainly this quarter. This is wiring. I'm assuming it's going to be selling through your websites. But is that also going to be a Home Depot item as well?

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Yeah. We anticipate that to be in our websites. We anticipate that to be in several accounts. We believe Home Depot is going to be one of them. We will announce it when we can. We have a relationship, so that is public record. Our Razor and the Blade model is the way to expand. I think the turbo heater fan can be a significant item for us once landed here. Hopefully, we will have more accounts and retailers to announce the usage of it. We are working on this. We hope to be able to announce more than Home Depot. We still need to see.

Tom Hayes, Analyst, Ross: All right. Appreciate it, guys. Thank you.

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Thank you. Okay.

Speaker 4: Yes, that concludes. Please, go ahead. That concludes the question and answer session. I would like to turn the conference back over to Rani Kohen for any closing remarks. Please go ahead.

Rani Kohen, Founder and Executive Chairman, SKYX Platforms Corp: Thank you, everyone, for joining our call. As you saw, hopefully, that we are making some progress. As Steve said, we are optimistic to continue that progress and talk to you soon in our next call and maybe before if we have interesting things to share. Thank you very much again, everyone. Looking forward to talking to you again soon.

Speaker 4: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

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