Mobilicom Ltd (MOB) Earnings

Management highlights

• **Progress Against 2026 Annual Goals - Tier 1 pipeline: Met the full-year goal of 3-4 Tier 1 partners in design win/R&D stages with 4 partners secured, including two new U.S. Tier 1 ISR drone design wins announced in the quarter; 3 Tier 1 partners remain in initial production (meeting the full-year target of 3-4); 1 partner is in ramp-up production out of a full-year goal of 2; Total of 8 active Tier 1 customers against a full-year target of 8-10 - Software/cybersecurity and OEM ecosystem: Ongoing engagement with Nvidia and Qualcomm ecosystem partners, progressing toward the full-year goal of 4-6 OEM partners and 2 AI autonomy software partners • **Program of Record Updates - U.S. Army LASSO program: Mobilicom's solutions are embedded in a Tier 1 partner's platform that has progressed to the initial deployment phase; no orders have been received to date, but progress expands the company's U.S. defense footprint beyond the Marine Corps to the U.S. Army - U.S. Marine Corps OPFL program: Mass production ramp-up commenced in January 2026, with a $2.2 million additional purchase order received in Q1 2026; this is a multi-year program of record expected to run 5-10+ years with ongoing demand for units, spare parts and maintenance • **Regulatory & Compliance Progress - Mobilicom was added to the FCC's new Trusted Drone List, joining existing key U.S. defense certifications including Blue UAS Framework SELECT, NDAA validation, trusted cyber certification, and DD4094 frequency allocation approval. Only products on the FCC list can participate in future U.S. federal programs, creating a structural competitive advantage for approved vendors like Mobilicom • **Operational Updates - Production: Strategic long-lead inventory buildup is ahead of initial plan, in response to stronger-than-expected demand from Tier 1 customers; U.S. contract manufacturer selection is ongoing, with final terms under negotiation - New product launches: Released SkyOper Tactical, a wearable software-defined communication solution for dismounted defense teams; released Scarper multiband, a next-generation communication platform with twice the frequency capacity of existing market solutions - International expansion: Secured a design win with initial orders from a UAE-based defense manufacturer, and an initial order from an Israeli customer for India deployment • **Q1 2026 Financial Performance - Total revenue visibility (recognized revenue + backlog) was $2.4 million, up 50% year-over-year - Reported Q1 revenue was $548,000, down from $844,000 in Q1 2025, driven entirely by delivery timing shifts related to customer production scale-up, with underlying demand remaining intact - Order backlog was $1.8 million as of quarter end, up 151% year-over-year; additional post-quarter orders under the OPFL program and from other global customers are scheduled for 2026 delivery - Cash position was $70.7 million as of March 31, with zero debt and a clean balance sheet; the company terminated its at-the-market equity facility from a position of strength, as it did not need additional capital - Monthly operating cash burn was approximately $528,000, directed toward integration work for new design wins, long-lead inventory buildup, and U.S. manufacturing expansion

Guidance

• Management maintained its prior 2026 full-year growth outlook, reaffirming the annual pipeline and operational targets it set at the 2025 annual earnings call, and confirmed that Q1 progress is on track to meet or exceed these targets • For the two new U.S. Tier 1 ISR design wins, management guided that initial revenue will be recognized in late 2026, with material revenue contribution starting in 2027, as integration and validation are expected to complete by Q3 2026 • Management expects U.S. manufacturing capacity expansion to be completed in 2026, which will reduce foreign exchange exposure and position the company to meet U.S. Department of Defense requirements for domestic production • Mobilicom expects to move toward positive operating cash flow as order momentum continues to build through 2026, supported by its current cash position and disciplined capital allocation

Segment performance

Mobilicom operates two core product segments: 1. **Hardware Solutions**: Hardened communication and data link systems designed for contested environments, with gross margins of 50-60%. This segment generates the majority of current revenue, and serves as the foundation for cross-selling software and cybersecurity solutions. 2. **Cybersecurity & Software Solutions**: Electronic warfare protection and cybersecurity solutions for drone and robotics platforms, with gross margins near 90%. This is a high-growth, scalable segment operating on a per-unit licensing model, with limited direct competition at present. No separate revenue figures are broken out for each segment in the quarter.

Risks & headwinds

• Forward-looking results are subject to general risks and uncertainties that could cause actual performance to differ materially from management expectations, including changes in U.S. defense procurement priorities, regulatory changes, and delays in customer program milestones • Foreign exchange volatility between the U.S. dollar and Israeli shekel impacts labor costs for Mobilicom's Israeli R&D and operations team; while the company has implemented short-term currency hedging, exchange rate movements could create margin pressure until U.S. operations and production expand to balance this exposure • Revenue recognition for current design wins and programs is dependent on customer integration, validation, and procurement timelines, which can extend beyond initial expectations and delay revenue generation • The FCC Trusted Drone and U.S. defense certification requirements create barriers to entry for non-approved vendors, but the company must continue to maintain all required certifications to remain eligible for future U.S. federal programs

Analyst Q&A

• Q: What is the typical timeline from a new Tier 1 design win to significant revenue, specifically for the two new ISR design wins? /

  A: For most Mobilicom customer programs, integration and certification take 6-12 months after a design win, followed by initial production and then ramp-up. For the two new design wins, integration is already well progressed, with validation expected to complete by Q3 2026. This will allow for initial orders in late 2026, with meaningful revenue contribution starting in 2027 and continuing long-term, as both customers are established large Tier 1 players with existing existing demand for their platforms. Both customers are integrating Mobilicom to close capability gaps they cannot meet with existing solutions, creating a clear path to scale once validation is complete.

• Q: What competitive advantage does inclusion in the FCC Trusted Drone list provide, both for U.S. and international business? /

  A: Inclusion of all Mobilicom product lines in the list means Federal customers and their OEMs can use Mobilicom components without restriction, and provides independent government validation of Mobilicom's position as a trusted drone technology provider. The list creates a limited "walled garden" of approved vendors, as non-listed products cannot participate in future U.S. federal programs. It also acts as a gating criteria for large-scale procurement: many recent programs have rejected winning bids that did not meet all required U.S. certification and cybersecurity requirements, while Mobilicom already holds all necessary approvals. For international and allied customers, U.S. certification also accelerates partnership opportunities, as companies targeting NATO or U.S. aligned procurement need certified components to qualify.

• Q: What is the long-term opportunity for Mobilicom from progress in the U.S. Army LASSO program, compared to the existing OPFL program? /

  A: Any U.S. program of record is a substantial long-term opportunity for Mobilicom, as it brings multi-year commitments for equipment, maintenance, and spare parts. While LASSO is still in initial deployment with no orders yet received, the Army is significantly larger than the Marine Corps, meaning LASSO represents a much larger potential scalable opportunity than the existing OPFL program. This progress also confirms the historical dynamic that once a platform with embedded Mobilicom technology wins one program of record, it is much more likely to win additional programs; the Tier 1 partner in this case is targeting 8 total programs (4 U.S., 4 international), so success on LASSO would open additional large opportunities beyond the program itself.

• Q: How does Israeli shekel/U.S. dollar foreign exchange volatility impact Mobilicom, and how is the company managing this risk? /

  A: Mobilicom's R&D and operational center in Israel, which provides critical access to leading drone and cybersecurity talent, has labor costs denominated in Israeli shekels, so FX volatility does impact operating costs. However, all production completed in Israel is priced in U.S. dollars, insulating production margins from exchange rate moves. As the company expands its U.S. team and on-shores production capacity in 2026 to meet U.S. DoD requirements, FX exposure will gradually decrease. In the short term, Mobilicom has implemented currency hedging strategies to mitigate volatility.