All right. We are back at Cantor's Global Technology and Industrials Conference. I have the distinct pleasure today of hosting AIRO Group with Dr. Chirinjeev Kathuria, the Executive Chairman, CEO Joseph Burns, and CFO Dr. Mariya Pylypiv. Thank you for coming. We're very excited today, and we appreciate you attending. Thanks, Colin. Thank you. Of course. Keeping in mind, as a former IR, the quiet period, today we're gonna talk through mostly the high-level aerodynamics rather than specific numbers. Getting into it, can you just talk through what AIRO views as the core earnings drivers of its business? How does the company think about those drivers longer term within the context of the aerospace, defense, and mobility markets? Joe, you wanna start tonight? Sure. Our core drivers, obviously right now we're in a fascinating new era of aerospace and defense. Drones are obviously the big topic of the day. That is our primary driver right now, particularly on the military side. We don't see an end to that stack at this point in time. There's just a big need for replenishment of conventional systems and then growth. In fact, we were just in a conference yesterday with US-Ukraine partners, and it's very, very obvious that it's just a growing area, and it's a new way to sort of fight the battle, so to speak. We're excited about that, and that's our primary area, followed by our secondary area, which is the large cargo drone, formerly an eVTOL segment, but now really focusing on the cargo aspects in the drone world. You know, I could add to what Joe is saying. We're seeing strong demand for, you know, from our NATO customers. As of 9:30, we had about $190 million of orders in progress that are gonna be delivered through 2026. You know, we'll see steady recurring revenues also coming in from our avionics training business, and Joe mentioned as we get cargo certification. Got it. Then maybe talking about moats, talking through kind of how you view your moats across the aerospace, defense, and mobility business and appreciating mobility business being more of a pro forma drone strategy. Then how do you think about the team's understanding of those moats, and how does that shape your investment strategy? If we talk about moats and some of our strong defensive areas, clearly the drone side is in it for us. We have a very unique product known as the RQ-35. It's been battle proven. We have thousands of them in theater right now in Ukraine. They are long-lasting. It's not just a one-and-done type of a vehicle. It's a real aircraft that goes out for a minimum of 500 missions. What's unique to it in the small space is we can fly in a highly GPS contested environment, which is certainly all of Ukraine right now with jamming and spoofing, but a big part of all of Eastern Europe. We see it all the time in commercial jets through small aircraft. It does dramatically affect almost every drone in the theater except ours, so we have a huge edge there. We also are pretty big on the AI enablement and using AI for self-autonomy, and continuing to grow into that pathway, with onboard AI on the aircraft coming out with our next version. That's a big deal for us because now you can fly the aircraft without an operator. It truly is autonomy, not just a set pattern, but actually go out and do target recognition, pattern recognition, et cetera, which applies in a lot of other areas beyond the military. We talk about commercial farming and spotting forest fires, et cetera. We can truly do that now. It's been talked about for a long time, but we're able to do that in this environment. Those are two of our big moats there. Another thing is now we have U.S. production, so we opened up a brand-new facility in North Phoenix. We just had a big staff meeting out there to kind of kick off the facility. It's a beautiful new area. We had some Cantor reps there as well. We have the ability now to produce a significant number of aircraft there for the U.S. military, for the U.S. government, and there are requirements to manufacture within the U.S., which we can do now. Got it. Thank you so much for that. You mentioned onboard AI. You know, one of the things I think that folks underappreciate about your story is the level of kind of avionics differentiation you have versus peers, your satellite subsystem understanding, things like alt-PNT and waveform interception. Maybe talk about within that context of technology, AI, satellite architectures, what are the key technology areas that AIRO is focused on, and how does AIRO think about the trade-off between spending organic R&D dollars versus acquiring additional capabilities? Certainly, the communication sector is big, right? If they're jamming GPS signals, somebody's gonna be jamming your communication spectrum too. We're particularly good at that with spread spectrum radios, the ability to communicate. It's just as critical to communicate with an airframe as it is to actually fly without having the right signals as well. You mentioned satellites. I mean, there are lots of new developments in the LEO satellite world that we are very interested in and done some work with. Right now, the cellphone network can actually act as a backup for us for both navigation systems, and even in Ukraine, it's a dramatically large network that we can use the 5G signals, soon to be 6G in most places around the planet. We're very plugged into that. Also the AI pieces or not AI, but avionics. We're very unique in that we actually manufacture all of our own avionics, both for man-rated aircraft. In fact, we have over 16,000 installations of avionics in aircraft that are flying with people on them. Having that ability to rapidly implement technologies that are certified and rated by, say, FAA and other agencies, be able to roll that into the drone environment is really a huge edge for what we're able to do moving forward. Got it. I'm sorry, the second part of the question is probably better for Mariya to answer, but I went a long way. I think you've answered it already. In terms of R&D spending, we are focusing on our core divisions, which is drones and avionics, and we are focusing on production, scalability, improving our products, and that will be the focus going forward. Got it. Okay. Within that context, as we think about the synergies within the businesses, obviously, you know, focusing more on drones and the pro forma company being, it sounds like drones on the defense side, plus drones on the cargo side. Can you maybe talk about kind of how you think about that synergy umbrella between those two drone products as well as your avionics business? You talked about that a little bit, but, you know, perhaps maybe kind of talk about it as well within the context of training and how you think about that synergy- Sure. over time. Well, the first synergy is really between the two product lines themselves, right? Drones are drones, and I know that's the dramatic oversimplification, but the flight control technologies, the actual flight stack, as we call it, that actually drives these, the AI enablement, will apply from our smallest drone all the way across to the biggest one. We do not have to go out and develop the huge software suite to do something separate. It's already built into our product line. It allows us to grow rapidly in an area where other companies will have to go out and develop that from scratch or pay excessive, exorbitant amounts to do it. We already have that built in, so that's a big part of our strategy there. As for the training, every company that builds a flying aircraft has a training component. I see training really growing dramatically. We know there's a training need for, say, commercial pilots, right? Everybody has to retire at 65 worldwide, if you're gonna fly any kind of a jet. To get out of that and to train pilots, there's always gonna be a need for that. The airline industry is growing, but we're really focusing more on the drones and in that sort of technology market. There are not a lot of technology standards or training standards in the world as to how you train the pilots. We see that as a real opportunity. You know, I've been heavily involved in training on the commercial airline side for years. We know how to train people. That'll be a part of our product line, and it is a differentiator for us as well. In fact, we have troops embedded in Ukraine right now that are training the Ukrainian military to use our products. We're particularly good at that, and I think that's a huge market moving forward as the FAA and the other DGACs around the world get their legs underneath them. They're gonna be able to go out and actually set training standards for drones and things that are flying over everybody's heads today. You wanna make sure whoever's flying them knows what they're doing and has the proper training, and we're in a very good position to do that. Got it. Yeah. Go ahead, Chirinjeev. No, no, what I was gonna say is, you know, being vertically integrated, there's a lot of cost, you know, efficiencies, especially since, you know, we're sending, you know, GPSes to Joby, so that really helps. On the R&D side, you know, we were just awarded a $4.5 million counter electronic warfare program. We're moving up the R&D, but there's a lot of, the vertical integration gives us a lot of synergies and is able to really adapt to different, you know, you know, needs in the conflict zone, as you've seen with the RQ-35. Got it. Maybe thinking longer term, how do you kind of view the balance of long-term earnings and where you kind of want the earnings from the company to come from? I think drones will continue being our long-term growth segment. Training and avionics will be more predictable growth, where we know where they will be ending up. As certification progresses with our cargo drone, that will be a very material contribution to our revenue growth. We also see on the avionics side a fairly significant growth in the sensors platforms. I don't know if everybody's familiar, but we actually manufacture our own GNSS or GPS sensors. Having the ability to navigate this new environment with, you know, higher-powered signals and jamming and spoofing is something that's really critical. I think in the drone world particularly, there's gonna be a need for more high-quality sensors, not the $10 Amazon sensors that are out there today, right? Something that really can fly through some of these aberrations that are in the market today, with a very precise, you know, centimeter-grade type of a signal is really important. That's an area we're really excited that we're in and continue to expand our growth in that area. Got it. Digging further into the defense tech business, you know, what are the key points in the RQ-35 that make it superior? We touched on a little bit in satellite architectures, in-house avionics, you know, training synergies. Maybe talk to kind of the compare and contrast between other products. What are some of the public signposts that you might point to investors around AIRO's capability versus other Group 1 fixed wing capabilities? Well, there's some pretty obvious ones, and if you look at drones lost in conflict, right? We've had none of them shot down or electronically shot down by signals. That's a huge number for us, right? To have a drone of this size, whereas a lot of competition, a lot of the newer entries, sort of the FPV drones just don't. They can't fly through a lot of that interference. That's a big point for us. The fact that our drones that are flying today average over 500 flight segments is another big number. That's not a one and done. It goes out and flies a mission, comes back. It's easy to maintain, easy to charge. You You get back in the air right away. In fact, many of our drones are in the air more in their life than they're on the ground, which is a pretty staggering number when you think about it. Mm-hmm. Got it. Maybe turning to the U.S. side, as you think about government programs, what are the key government programs to be aware of for the RQ-35 Heidrun? How would you compare customers' understanding of current security threats versus their activity levels versus government spending? Essentially, the concept that we've seen year to date is large appropriated dollars, not a lot of outflows to the drone manufacturers, and essentially perhaps a misunderstanding of the level of need, and kind of the level of urgency around the next 24 months of national security timeline. Maybe talk to kind of how you think customers are shaping the programs, and maybe talk to how they're working to expedite the dollars out the door. We've seen a lot of that, and I'm sorry. I'm getting off. No, go ahead, Joe. We've seen a lot of activity around this. You know, drone dominance is one that comes to mind, right? The drone dominance program. It's a recognition by the Department of War that, look, it's not all about manned systems. It's not about Patriot missiles. It's not about HARM missiles, very expensive systems to take down a $3,000 or $30,000 Shahed type of a drone. It's really about how do you go level to level in mass volume. While the drone dominance program today is currently focused on super low-end kind of commodity, you know, $3,000, $4,000 range drones, we think that's gonna go up. It'll reach some sort of a midpoint. It's not gonna be a race to the bottom. It's there now because they wanna get people excited and involved. I think they're kind of going through a learning process as well with these two conflicts that we have going on today between Ukraine and Iran. There's a lot of learning cycle there. We're right in the middle of that. We're getting a lot of response around the RQ-35 for very specific programs on the ISR, that's intelligence surveillance reconnaissance, which is what we're particularly good at. The U.S. military and DoD is waking up and saying, "Hey, we really need a good ISR platform as well, because we can't always send a manned asset into a conflict area, but we can send a you know $100,000-ish drone to go in and do the same thing and get maybe more accurate data that's completely AI-driven without any fear of loss of life for the mission." It's really woken up a lot of people. We're doing a lot of flight demos for special ops groups around the U.S. as well. Got it. I think one thing, you know, what's unique about AIRO, our drones are battlefield-proven and tested in Ukraine, especially, as Joe was pointing out, the RQ-35, which is targeting and reconnaissance. One of the major signposts, you know, we just opened up our facility in Phoenix. We've completed, you know, the first production of the RQ-35, a full flight test. That really positions us really well for the U.S. programs. You know, we're making a lot of progress towards Blue UAS certification, which will complete the first half of 2026. As you can see, what's happening in the Middle East is really important, how drones are effective. Our other partnership with drones, our first-person view, kinetic drones, again, they've been used very successfully in the battlefield. I think that's what makes AIRO really unique compared to the other drone companies that are out there. Got it. Maybe taking it aside or kind of a sub vein on that, but if you can talk a little bit about the capability bleed and essentially how RQ-35 is able to service Group 2 or even Group 3 mission sets, and essentially kind of, you know, what are customers saying in terms of, I guess, the acceleration of programs for Group 1 drones that can do Group 2, Group 3. We're looking at some variants on the actual RQ-35, one of them being known as the RQ-70, which will allow us quite a bit more flight time. It's a much larger airframe, fully autonomous, all AI-enabled. So it's really about flight time duration, over-the-horizon link for communication stack. Today we can fly, we say it's 40 kilometers. That's really our radio range line of sight. The higher you get or if you fly, say, another RQ aircraft as a radio relay, we can go extensively further, which is not a flight time limitation. It's really about communications. We mentioned earlier about SATCOM, etc. Mm-hmm. Putting that technology in the airframe, it's virtually an unlimited range, theater range for what we're trying to do. Pretty much every country in the world we could fly over with that type of a new technology. That gets us into the next level where we need to go. That's great. That's it. It's very exciting. As you think about essentially kind of the sales pipeline ex-US, where do you see regions of defense customers that are the most prepared versus least prepared for the requirements, and how do you consider that versus the current consumption rate of products? Today, really, the NATO European countries that are really involved in the Ukrainian conflict are really leading the fight for process supply chain. They know how to buy these airframes in bulk. Obviously, they're one of our largest customer sets. That's a huge area for us now. Now it's really about educating other areas, including the U.S., right? To get into the drone world, part of bringing our drones to the United States so we can manufacture and sell into the DoD. But we're real excited about the Middle East, Africa regions for sure, and then Asia is a big area for us, too. In fact, we've set up some satellite offices and have done a pretty big hiring campaign to bring in the right people with knowledge of those areas to really start to sell into those theaters. They're seeing the effectiveness of the product. They may not be involved in conflicts, but bear in mind, people need to patrol their own borders. They don't know what's around the next corner, so they need to have the eyes and ears out there, without dramatically expanding their manned aircraft air forces around the world. This is a way for them to do it rather inexpensively to gather phenomenal intel, on what's going on and keep an eye on the sky all the time. Got it. Maybe for the audience's understanding and folks on the webcast, what Joe's kind of describing there is essentially the need for ISR regardless of the threat environment. I think that's a fair characterization. Absolutely. Got it. You know, we also get the question, what happens when all these conflicts stop? Well, first of all, there's 60 conflicts going on in the world today, right? Or maybe 61, if I count it right. There's always some activity in the world that you're gonna need this type of technology. It's also very important to note that throughout history, when a conflict has ended, there's always a monitoring piece. The monitoring always gets in trouble when you have manned assets doing it, right? Someone will stumble across the border or an aircraft will fly over a border, whereas in the drone world, this is ideally situated for these types of post-conflict environments to go out and do the monitoring and make sure everybody's abiding by the treaties. In fact, the numbers of drones required to do that's even higher than what they need today in the combat theater. We're excited about the future. Hopefully, it's a peaceful world from here on out, and we'll be a part of that. That's great. Switching back over to maybe the drone product for cargo. Can you just talk about the level of government customer demand, and what is your understanding of kind of the air certification requirements around that? Maybe talk the folks on the webcast through your differentiated approach to certification versus other folks, and how that gives you significant benefits. Sure. We'll start with the certification first. You know, we are approaching and working directly with the government of Canada, Transport Canada, to certify the airframe. The understanding needs to be out there that while we would love to do it in the U.S. with FAA, I think they're challenged on resources right now. In fact, a lot of the FAA support has been. They've lost a lot of people to other types of operators, right? People are going out and getting civilian jobs outside the government. It's hard to find FAA resources to certify products. We went up to Canada initially and had some great discussions with them. They're up there with open arms for us. We're going to manufacture in Montreal at a former aerospace facility. We're in programs already where Canada is actually providing us funding to do that. Certification is, you do it through Canada, and you go through what's called Part 29 standards for rotorcraft. Using those standards, we'll be able to certify this aircraft without any modifications, basically, to the rule set. The beautiful thing about that is the day that it's certified in Canada, it becomes automatically reciprocally certified in the United States. Got it. Talking maybe perhaps on the avionics business, can you just talk about kind of your understanding of how satellite architectures are influencing your avionics design process? Perhaps maybe if you could talk about how the team weighs capability, affordability, and supply chain certainty versus their product growth. Satellites are interesting right now with all the preponderance of. When I go out and fly to Europe, you can look out and see the string of pearls, as they call it, right? Just the sheer numbers of Starlink satellites and other companies out there. Data is becoming a commodity, and it's super reliable. It's very hard to jam that when it comes from the sky. We view that as a real good alternative pathway. The beautiful thing about what we build today is it's all point-to-point. We build our own architecture. We establish our own. If anybody's familiar with the OSI layers, we establish our own physical layer, with the aircraft to the ground controller directly. Again, once you get beyond the 40 miles, then you start to lose that a little bit. We have an alternative plan where we'll integrate some sort of a receiver chipset in there, whether it's Iridium, Starlink, built into all of our avionics products, including on the manned side. We'll have a built-in comm link for that. In the aircraft itself, we'll actually choose the cheapest way on the airframe or the most reliable, depending on what conflict you might be in. As I mentioned before, 5G is available everywhere in the world, even in conflict zones. That's another good pathway, and it's a very secure path. There's a lot of architecture things that are in there. Since we are an avionics manufacturer, we can integrate these things extremely inexpensively. You're talking maybe $50-$100 per set to put in a whole satcom system. That's unbelievably inexpensive. Why not build it into everything that we fly? Got it. Maybe pivoting to margins. As you think about kind of the investing trade-off in the current environment, where does the team spend most of its time evaluating between R&D, CapEx, and SG&A investment decisions? Right now we're focusing on our highest growth division, which is drones. Most of our focus goes into the build-up of the Phoenix facility, so we can deliver the drones to the U.S. government. R&D, as Joe Burns described, we're developing consistently new products. The focus goes there, and that will be the main focus in terms of drones, and then avionics, new products coming in as integration between drones and avionics divisions, as well as cargo. That's great. I appreciate that. There's some investment also that is going into training as we're bidding for higher value contracts with the DoD. Got it. Our IDIQ contract. Brilliant. Thank you. Thank you. Maybe talking about the team's philosophy on cost management, what are some of the lessons that you think are critical for maintaining cost controls as you scale? As we're scaling again, we're focusing on being very disciplined in how we spend. Again, focus is on our drone division in terms of production, scaling that production, and improving our margins. Also big fans of just-in-time inventory, right? We don't want to carry a lot of excess inventory. As long as we have our supply chain secured, and we feel very confident about that, it's really a matter of making things roll in and roll out within the same cycle time. It's a great way to control costs. From a higher level, our corporate overhead, right? We are extremely stingy on hires and how we bring the right people in. I like the lean organization. You can ask our CFO. I tend to question everything, but I think that's really important for a young company. Got it. We are very cost-conscious, as well as standardizing all the processes across all the divisions, so that it helps us with our cost management. Okay. I think since our drones are in the evolving battlefield, as technology changes, our customer needs change, we can adapt very quickly to what, you know, the, what NATO needs or the U.S. DoD or Department of War needs. I think that's one quick advantage that we have. Got it. Okay. Then as you think about optimizing cash flow generation, you mentioned before just in time. Sounds like a pretty stringent approach to working capital. You know, maybe kind of at a high level, if you can talk about kind of how you think about managing working capital just in time and optimizing cash flow versus things like supply chain certainty and but at a very high level, obviously. Joe, I think, answered it through we are very conscious about working capital as well as making sure we deliver to our customer needs, because sometimes they are evolving, and they're rapid, and we need to deliver very quickly. We are maintaining the balance between those two quite stringently. Got it. Perhaps pivoting to capital deployment. As we think about kind of some of the factors within, the right to acquire and essentially the subpartners and smaller products and smaller capabilities that you see, where are you kind of focused, or where are you spending most of your time? In terms of acquisition, we're looking again, opportunistic, but focus is on the drones development and aligned avionics division. When we're looking in a supply chain area, we're looking for something that will help us with our supply chain resilience, enhancement of our products and also cost structure. That would be the main focus areas in terms of opportunities for acquisition. Got it. Overall, if you look at it, you know, over time, drones will still be our largest growth and cash contributor. While avionics and training will provide, you know, a more predictable, recurring, high visibility. As Joe pointed out, using existing rotorcraft certification and getting into cargo, we're not, you know, moving people, so there's a lower threshold which will, you know, generate a lot of revenue in the long term. Got it. In terms of kind of the subcomponent supply chain, where are you seeing the best signals to kind of continue your vertical integration? To what extent should we think about AIRO's avionics business as a potential defense electronics roll-up similar to, you know, say, Mercury Systems? Sure. I think if you can continue to specialize in your own sensors, and there are a lot of companies that can do that, we are in the position to do that, just to control our own destiny, so to speak, and supply chain. Certainly, if you look at U.S. production, right, we have to certify the parts where they come from. In the origin, it has to either be from U.S. or friendly countries, and next year it's about 73% has to come from the United States. Controlling that inventory, we know exactly where the parts come from, right? It's not like going to Amazon and just ordering something, which people do all the time. You don't know the country of origin. It's a pretty significant chain for us to go through that. If we manufacture ourselves, and we can go down to board-level manufacturing, we do it for avionics all the time. We're able to control that supply, get the raw components in quickly, and then stock up as needed. It also gives us the opportunity then to sell outside of our own product nest and really get into some other areas. It was referred to a little earlier. We're actually selling the GNSS sensors to a large eVTOL player, right? We think that's a good business plan for us because we think it's a superior sensor set and it's man-rated. We have the ability to do that in-house that a lot of companies just can't do. We wanna take advantage of that opportunity since we have the facilities now to do it. Got it. As we think about your current capability set, are there any areas within the portfolio that you might be open to shaping over time or view as kind of less core to the thesis over time? I think the big one for us is training, right? It's such a fluid market, having come from the airline environment. You hire a lot of pilots, and then you stop for six months, and you hire a lot of pilots, and it really does impact all the way through the supply chain. Whereas I think, on the drone side, having a smaller training footprint that trains specific to those products is an area that we would probably spend more focus on moving forward. Okay. Because it's more predictable. I don't like the unpredictability of the industry. I understand it. I've been doing it for 30-plus years, but I think having the predictability in the drone world and a smaller training footprint is really. The one area we would look at it would be in the training side. Okay, got it. Maybe in the last 90 seconds here, are there any key points that you think we missed that investors should be aware of? You're up. I think, you know, couple things. I think, you know, one advantage, as we talked about, having drones from all capabilities, from reconnaissance to targeting, to first-person view, kinetic drones, that are all battlefield proven is extremely important. Those drones, you know, address good growth margins. I think we're very well positioned, you know, in the Department of War for the upcoming procurements with our Phoenix facility and Blue UAS certification. Just, you know, in the last week, the Middle East war just shows how effective, you know, drone technology is. You know, just having, you know, a great, you know, management team is, you know, really important. You know, Joe, you know, ran the United Continental merger. Mariya's experience as a CFO, John Uczekaj, who's our President and Chief Operating Officer, is a really good management team. Yeah, I wouldn't underestimate the commercial side of everything we're doing. Right now, the military conflicts have just kind of sucked all the air out of the room. It has really developed a lot of new technologies. I think you'll see as an industry, a tremendous amount of civilian applications coming out, and we're in a very good position to take advantage of those as well. That's great. Well, I appreciate the time, and thank you for coming to our conference. Thank you. This is fantastic. Appreciate it. Thanks, Colin.