AirJoule Technologies Corporation (AIRJ) Earnings

Management highlights

- Strategic Planning Milestones * 2025 was focused on building the foundation for commercialization via initial deployments at the GE Vernova joint venture; 2026 is focused on transitioning from one-off deployments to productized commercial sales, laying the groundwork for scaled commercial pipeline growth in 2027 and beyond. * Macro tailwinds from accelerating water scarcity are increasing demand: multiple large hyperscalers have canceled multibillion-dollar data center projects over water access concerns, dozens of US states have introduced data center moratorium bills tied to water stress, and institutional investors are pushing for greater water use disclosure, creating strong demand for Airtel's on-site water generation technology. - Product Development Updates * The first-generation AirJewel core platform design is locked, with performance and durability improvements completed via optimization of airflow distribution, thermal management, and contactor coating. The core platform will launch in two product variants: - AirJewel Core AWG: Target commercial launch in late 2026, focused on the US military and small residential deployments, developed via a Cooperative Research and Development Agreement with the US Army Engineer Research and Development Center. - AirJewel Core DH: Target commercial launch in 2027, a dehumidification variant using the same core hardware optimized for 30-50% relative humidity control. It delivers up to 40% energy savings vs conventional desiccant wheel technology, with initial target markets of dry and cold storage facilities. * The first full-scale AirJewel Prime system is completed and operational at the company's Newark, Delaware facility. Prime is engineered for scaled manufacturing, uses 16 standardized vacuum chambers from established suppliers, with mostly off-the-shelf components and only the sorbent-coated contactor manufactured in-house. It is designed to produce up to 2,000 liters of water per day with <200 watt-hours per liter when paired with low-grade waste heat. The first Prime unit is planned for deployment in Europe as part of the Net Zero Innovation Hub collaboration, and a second unit will be built as an internal showcase for customer demonstrations. * Products are already designed to meet FDA bottled water standards and strict California water quality standards, with UL electrical certification in progress. - Governance Updates * Max Baucus will step down from the Board of Directors effective May 28, 2026 after six years of service. Stu Porter will assume the role of lead independent director and chair of the nominating and governance committee to strengthen governance ahead of commercialization. - Commercial Pipeline Development * Hyperscale data centers: Ongoing detailed technical and economic evaluation with a leading hyperscale operator for discrete site deployments. AirJewel Prime addresses water permit constraints by generating on-site distilled water from waste heat, with CapEx recoverable in just days of avoided construction delay. The first Prime unit will be demonstrated in Europe as part of the Net Zero Innovation Hub aligned with EU waste heat reuse requirements. * Residential development: Deepening co-development with a global partner for water-scarce US Southwest markets, with a successful pilot completed at the Red Dot Ranch Foundation climate-positive housing development in California. * Distributed distilled water: Early-stage conversations with industry partners, with operating costs projected below 10 cents per gallon, undercutting the current delivered price of distilled water in most US markets. * Middle East: Exclusive distribution agreement with 10X Investment covering six Gulf countries, with initial proof-of-value installations planned for 2026 ahead of scaling. The company will participate in the UN Water Conference hosted in Abu Dhabi in December 2026 to build market awareness.

Guidance

- Full-year 2026 cash spending guidance for Airtel Technologies and the joint venture remains unchanged from prior guidance. - The company's combined $35 million cash position with zero debt is sufficient to fund all operations, JV activities, and planned commercial deployments through 2027. - Modest pilot deployment revenue is expected from the JV in 2026, with meaningful commercial revenue expected to begin in 2027 after core product certifications and first Prime deployments are completed. - Contract manufacturing for scaled volume production is still targeted to begin ramping in 2028, aligned with expected customer demand growth.

Segment performance

Airtel Technologies is a pre-revenue product company focused on bringing its atmospheric water generation and dehumidification products to commercialization. For Q1 2026, the company reported net operating expenses of $3.6 million and a net loss of $49.8 million. The majority of the net loss came from a $55 million non-cash impairment charge related to the Airtel JV equity method investment, resulting in a total $63.1 million loss from the JV investment, partially offset by a $14.7 million tax benefit. Total operating expenses for the Airtel JV in Q1 2026 were approximately $5.5 million, and Airtel Technologies contributed $10 million in capital to the JV during the quarter. Airtel Technologies ended the quarter with $31.1 million in cash on hand, and combined cash across the company and JV was $35 million with zero outstanding debt.

Risks & headwinds

- All forward-looking statements related to product commercialization, revenue growth, and market demand are subject to inherent risks and uncertainties, many of which are outside the company's control, and actual results may differ materially from expectations. - The non-cash $55 million impairment charge recorded in Q1 2026 was triggered by a temporary trough in the company's share price at quarter-end; while the charge has no impact on cash, JV operations, or commercial trajectory, future share price volatility could result in additional interim impairment assessments. - Customer adoption of new technology is dependent on customer requirements for pilot testing and performance validation, and regulatory permitting requirements vary across markets, which could delay commercial revenue growth. - Scaling manufacturing to meet projected customer demand requires validation of new component suppliers and contract manufacturing partners, which carries execution risk.

Analyst Q&A

• Q: What customer requirements are needed to close orders, how much additional performance improvement can be achieved for the completed Prime unit, and will the first unit be deployed to a customer site? /

  A: Customer conversion follows different paths: some customers require on-site pilots, while others will move forward after reviewing real-world performance data from the Newark operational unit, with customer needs varying on a case-by-case basis. Performance improvements will come from component optimization (fans, pumps) and sorbent formulation/quantity tweaks over the coming months, with a full performance update planned for the next earnings call. The first Prime unit will be deployed, but specific details will be disclosed in a future call. /

• Q: Now that core and Prime designs are stable, what is the roadmap for unit cost reduction, is the current sorbent formulation locked, and is contract manufacturing still on track to ramp in 2028? /

  A: Cost reduction work is ongoing for core and just starting for Prime, focused on sourcing the most cost-effective, high-quality off-the-shelf components, with validation to be completed ahead of each product launch. The current sorbent is stable, high-performing, and available at scale; the company continues to evaluate new sorbents, but new materials will only be adopted if they deliver meaningful performance improvements. Initial conversations with contract manufacturing partners have begun, and ramping scaled contract manufacturing in 2028 remains the plan, with timing aligned to customer demand pull. /

• Q: How does the company prioritize its different end markets, and is the data center opportunity tied exclusively to the larger Prime system? /

  A: The AI data center opportunity is indeed primarily a Prime use case, and the company sees significant current demand pull from this market driven by growing water scarcity and permitting constraints. Each end market has different go-to-market timelines based on regulatory requirements and validation needs: the US military will be an early adopter for Core AWG, followed by residential development and the Core DH dehumidification product, and the company is managing all timelines in parallel. /

• Q: What is the timeline for closing water purchase agreements (WPAs), and what size of data center deployments does the company expect initially? /

  A: WPAs are most attractive for Prime deployments that utilize waste heat to drive down water production costs, and the company expects to secure WPA commitments in 2026 alongside Prime equipment sales. The 1-3% of total data center CapEx figure cited in investor materials represents the cost to meet 100% of a 100MW data center's water demand, and initial deployments are expected to be far smaller than full replacement. Most current data center conversations are for new builds in water-scarce regions facing permitting delays, with additional value from improved sustainability and resiliency for hyperscalers.