KULR Technology Group, Inc. Q2 FY2026 earnings call

Q2 Performance Challenges

• Supply chain bottlenecks for new component parts led to extended lead times, delaying planned Q2 production and customer shipments.
• Overextension: The company was running more customer programs than available engineering and manufacturing resources could support, hurting execution speed and quality.
• Leadership transition: Board and management changes during the quarter consumed significant senior management bandwidth and slowed decision-making, which is now fully completed.
• New capacity not yet online: The new Texas manufacturing facility was not operational and did not contribute revenue in Q2 2026.

Core Business Demand Highlights

• Underlying demand for the company's high power battery systems for physical AI, defense, drones, and critical infrastructure remains strong, with market growth still in the early stage in the U.S.
• Q2 product revenue was led by two large orders from new customers for custom new battery configurations, demonstrating ongoing customer and product expansion.
• The company secured an initial defense drone battery order from a U.S. drone maker participating in the Department of War's Drone Dominance Initiative, with a total customer opportunity exceeding $5 million, and was selected as the battery provider for Oracle Space's orbital transport mission.

Total Q2 2026 revenue came in at $2.1 million, down year-over-year and sequentially from Q1 2026, with an overall gross loss for the quarter. For the first half of 2026, total company revenue was $6.03 million, compared to $6.1 million in the prior year first half. The core Energy Management Platform (CoolerOne battery systems) segment generated first half 2026 revenue of $4.76 million, which is slightly up from the $4.73 million posted in the prior year first half, representing 79% of total first half 2026 revenue. No separate segment performance data was provided for the exited Bitcoin mining business beyond its impact on overall net results.

• The new 25,000 square foot Texas manufacturing facility, including a new automated production line capable of producing both cylindrical and pulse cells, is on track to become operational and begin contributing revenue in Q3 2026.
• Delayed Q2 shipments are expected to be recovered and recognized in the second half of 2026, leading to improved revenue performance relative to Q2.
• The company expects to begin shipping NDA-compliant chargers to U.S. customers by the end of 2026, following completed prototyping of 18S chargers and ongoing sampling of NDA-compliant 6S chargers.
• Management reaffirmed its core accountability metrics for 2026: product revenue growth, gross margin improvement, and cost discipline, with no explicit full-year financial guidance provided.

• Supply chain constraints for new custom components continue to create production bottlenecks and delivery delays, even after mitigation via multi-sourcing and increased raw material inventory.
• Limited engineering and manufacturing resources mean the company cannot pursue all available customer opportunities, and poor prioritization could lead to missed revenue or subpar profitability.
• U.S. defense drone procurement growth could be slower than expected, limiting the near-term demand wave the company is positioned to capture.
• Holding Bitcoin created significant balance sheet and income statement volatility unrelated to core operating performance, though this risk is being mitigated via full divestment.

No questions were asked or answered during this earnings call, as the call concluded after management's prepared remarks.