KULR Technology Group, Inc. Q1 FY2026 earnings call

Core 2026 Company Priorities

• Focus on top-line product revenue growth, gross margin improvement, and disciplined cost reduction to convert customer traction into profitable revenue
• Maintain a solid financial position with $19 million in cash and 1,085 Bitcoin in treasury; all new cash resources are allocated to battery business expansion, with no new cash purchases of Bitcoin (Bitcoin acquired only via existing mining contracts)
• Added 25,000 square feet of new manufacturing space to support production scaling and high-volume customer programs, expanding total domestic production capacity to over 56,000 square feet in Webster, Texas

Product Segment Updates

• Cooler One Air (UAS, autonomous systems, humanoid robots): Gained broad adoption for the 6S3P lift battery, expanded the product line with new configurations for long-duration flight and heavy-lift agriculture applications. Completed design of a mil-spec EMI-resistant battery management system (BMS) for defense drone applications, added two new humanoid robot customer engagements, and is exploring solid-state and lithium metal cell configurations to exceed 380 watt-hours per kilogram.
• Cooler One Space (satellite missions): Selected for multiple new low-earth orbit (LEO) and geostationary orbit (GEO) missions in Q1. Existing XLT and Reach series batteries remain active across multiple satellite programs, with recent BMS improvements delivering higher radiation tolerance and improved current carrying capabilities for expanded mission use.
• Triton (maritime autonomous systems): In development and testing with multiple OEM partners, adapting space-grade safety and reliability standards for underwater autonomous systems, where battery failure is non-recoverable. Testing across multiple chemistries (solid-state, nickel metal hydride, lithium iron) to identify optimal configurations.
• Cooler One Max (AI data center and telecom backup): Presented at the Open Compute Project European Summit to pursue IP licensing of PPR and thermal management technology for data center backup applications. Progressed 48-volt high-power platform development, including improved power conversion efficiency and custom distributed BMS. For the telecom market, secured over half a dozen new customer engagements for its battery-as-a-service offering, which allows operators to shift battery backup from CapEx to OpEx.

Governance and Strategic Validation

• Streamlined the board of directors to 3 members (2 independent), adding two new directors with targeted expertise: Ben Frank (Microsoft, enterprise platform ecosystem development) and Mike Kimmel (pricing and margin optimization) to support scaling and profitability. These changes also reduce SG&A expenses.
• The recent industry acquisition of a U.S. drone battery manufacturer for over $50 million validates Cooler's strategic positioning: the autonomous systems supply chain is consolidating around NDA compliance, domestic vertical integration, and full ecosystem platforms, which Cooler has already built organically.

Cooler Technology Group operates four primary product segments: Cooler One Air (for drones, autonomous systems, humanoid robots), Cooler One Space (for satellite missions), Triton (for autonomous maritime systems), and Cooler One Max (for AI data center and telecom backup power). In Q1 2026, total company revenue grew 98% year-over-year to $4.8 million, with total product revenue growing 84% year-over-year to $2.1 million. Overall blended gross margin for the company reached 29% (up from 8% in Q1 2025), while product sales gross margin hit 26%. Revenue contribution percentages per segment were not explicitly disclosed in the transcript. Total operating loss decreased 22% year-over-year, with R&D expense declining 28-35% year-over-year and SG&A declining 8-9% year-over-year.

• Management reaffirms its 2026 focus on production scaling for the Cooler One platform, with new automated production lines scheduled to be installed in Q2 2026 and operational in H2 2026. Once operational, the new lines will deliver a production capacity of 10,000 battery packs per month, reduce unit costs, and improve gross margins.
• Management expects the customer development activity and program transitions seen in Q1 to drive revenue growth in the second half of 2026, though no specific numerical revenue guidance was provided.
• Cost discipline will continue through 2026, with management expecting further reductions in operating expense after the 22% year-over-year reduction in operating loss seen in Q1, supported by new board-level expertise in pricing and margin optimization.

No explicit risks or operational failures were discussed during the Q1 2026 earnings call. Management only included the standard mandatory forward-looking statement disclaimer that actual results may differ materially from expectations due to general business and market risks, referencing the risk factors disclosed in the company's most recent Form 10-K.

Q: What drove Q1 2026 revenue growth, and what is revenue visibility for the rest of 2026?

A: Primary drivers include disciplined cost reduction, with year-over-year R&D expense down 35% and SG&A down 8%. New director Mike Kimmel's pricing and margin expertise will continue to improve cost discipline and help convert top-line growth into durable profitability. Management did not provide explicit quantitative revenue guidance for the full year.

Q: How many Cooler One Air programs are moving into production, and what does this mean for H2 2026 revenue?

A: Multiple programs are in transition to production: the 6S3P lift pack is already in broad production, new long-duration lift configurations are moving from design to customer qualification, 6S/12S/18S BMS for large UAVs are on track with customers, and two new humanoid robot customer programs were added in Q1. All these transitions are expected to drive H2 2026 revenue growth, though no specific program count was disclosed.

Q: Is defense demand accelerating, and is it becoming a larger part of near-term opportunities?

A: Defense customer development activity is clearly accelerating, with conversations now focused on volume delivery timelines rather than early-stage development. Defense and defense-adjacent programs have become a larger near-term opportunity, and Cooler's NDAA-compliant supply chain partnerships (including with domestic solid-state and lithium metal cell suppliers) position the company well to capture this growing demand.

Q: When will gross margin improvements be visible, and is the automated production line still on schedule for H2 2026?

A: Q1 2026 already shows visible improvement, with product gross margin reaching 26% (up from low single digits in 2025). The automated line is on schedule: it will be installed in the new 25,000 sq ft facility in Q2 and start production in Q3, enabling 10,000 packs per month of capacity, lowering unit costs and improving gross margins. Additional in-house infrastructure (copper cutting, UN 38.3 certification equipment) also reduces costs and lead times.

Q: What are 2026 capital allocation and cash usage priorities?

A: All cash will be focused on scaling battery production and sales, with spending allocated to facility and equipment CapEx, working capital for inventory, controlled SG&A (with ongoing cost reduction efforts), and investment in team expansion to meet growing customer demand.