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Segments
 3 Months Ended
Mar. 31, 2026
Segments [Abstract]  
Segments

Note 11 - Segments

 

The Company’s Chief Executive Officer (“CEO”), acting as the Chief Operating Decision Maker, or (“CODM”), regularly reviews and manages certain areas of its businesses, resulting in the Company identifying two reportable segments for the three months ended March 31, 2026: Unmanned Aircraft Systems (“UAS”) and Advanced Defense Systems (“ADS”). The Company manages and reports its operating results through these two reportable segments. This allows the Company to enhance its customer focus and better align its business models, resources, and cost structure to the specific current and future growth drivers of each business, while providing increased transparency to the Company’s shareholders.

 

For the three months ended March 31, 2025, the Company operated as one segment: Commercial Aviation, which included the TriFan 600 development program. As of early 2026, the TriFan 600 program has been paused and is no longer identified as an operating segment by management. Management determined that continued development of the TriFan 600 program would require substantial additional time and capital that it does not plan to allocate at this time.

Given the strategic shift, as well as the addition of the UAS segment in the fourth quarter of the prior year, the Company did not recast the segment financial information for the three months ended March 31, 2025.

 

The UAS segment includes operating results of Drone Nerds, which is owned by the Company’s majority-owned subsidiary, XTI Drones Holdings, which provides an integrated suite of UAS solutions across hardware distribution, training, compliance management support, repair and maintenance, fleet sustainment, and related services. This segment is focused on revenue generation and lifecycle support for enterprise, public safety, government, and defense customers.

 

The ADS segment reflects a strategic shift away from the TriFan 600 program and toward nearer-term unmanned systems opportunities. Management determined that continued development of the TriFan 600 program would require substantial additional time and capital, and the Company therefore appointed new divisional leadership and redirected existing resources toward unmanned systems opportunities that it believes may offer nearer-term commercial applications. The ADS segment is focused on the design, development, and production of unmanned platforms for defense and commercial applications, with an emphasis on serving defense customers and supporting domestic procurement initiatives aligned with U.S. national security priorities. 

 

The CODM evaluates segment performance primarily based on revenues, gross profit, and income (loss) from operations for the UAS segment, and research and development spending for the ADS segment. Unallocated operating expenses include costs that are not specific to a particular segment but are general to the group; included expenses incurred for administrative and accounting staff, public company costs, general liability and other insurance, accrued consulting fees and transaction bonuses relating to former Legacy Inpixon executives, professional fees and other similar corporate expenses. The UAS segment reflects results of Drone Nerds beginning in November 2025. There were no UAS segment operations during the three months ended March 31, 2025. Segment operating results are presented on a consolidated basis prior to the allocation of net income (loss) attributable to noncontrolling interests. Substantially all revenues and long-lived assets for continuing operations are located in the United States.

 

The following tables reflect the results of operations from our business segments for the periods indicated below (in thousands):

 

   Three Months Ended March 31, 2026 
           Unallocated     
   UAS   ADS   Costs   Total 
Revenue  $27,696   $
—
   $
—
   $27,696 
Cost of revenue   22,550    
—
    
—
    22,550 
Gross Profit   5,146    
—
    
—
    5,146 
Operating expenses                    
Research and development   48    1,149    
—
    1,197 
Sales and marketing   1,426    9    928    2,363 
General and administrative(1)   1,892    400    9,454    11,746 
Other expenses(2)   222    8    
—
    230 
Total operating expenses   3,588    1,566    10,382    15,536 
Income (loss) from operations  $1,558   $(1,566)  $(10,382)  $(10,390)

 

(1)Unallocated general and administrative costs primarily consist of stock compensation, personnel expenses, professional fees, and public company costs.

 

(2) Other expenses include amortization of intangibles.
   Three Months Ended March 31, 2025 
   Commercial
Aviation		   Unallocated
Costs		   Total 
Operating expenses               
Research and development  $1,124   $
—
   $1,124 
Sales and marketing   53    222    275 
General and administrative(1)   549    6,247    6,796 
Other expenses(2)   8    
—
    8 
Total operating expenses   1,734    6,469    8,203 
Loss from operations  $(1,734)  $(6,469)  $(8,203)

 

(1)Unallocated general and administrative costs primarily consist of stock compensation, personnel expenses, professional fees, and public company costs.

 

(2)Other expenses include amortization of intangibles.

 

The reporting package provided to the Company’s CODM does not include the measure of assets by segment as that information isn’t reviewed by the CODM when assessing segment performance or allocating resources.