Airship AI Holdings, Inc. Q3 FY26 Results

The third quarter further demonstrated our ability to execute against a growing pipeline of opportunities while strengthening Airship AI’s position as a trusted provider of mission-critical artificial intelligence solutions across the federal government. The awards announced during the quarter reflect more than continued demand for our technology; they demonstrate the increasing adoption of our purpose-built platforms within established programs of record and emerging operational initiatives. We believe this represents an important evolution in our business as we expand beyond individual deployments toward broader, enterprise-scale opportunities supporting the agencies responsible for protecting our homeland. Notable components of these awards included substantial orders for our Outpost AI edge appliance, leveraging our advanced edge analytics capabilities both as a standalone platform and as an integrated component of larger systems and programs of record. We also experienced meaningful demand for our Fortress AI server-side analytics platform, delivering enterprise-scale processing capabilities designed to analyze hundreds to thousands of concurrent data sources in real time. Together, these platforms provide a complementary, distributed AI architecture that enables intelligence to be generated at the edge, processed at enterprise scale, and integrated into existing operational systems. We believe this architecture represents a significant competitive differentiator as federal agencies increasingly seek scalable, interoperable AI capabilities that enhance existing infrastructure rather than require costly replacement of legacy investments. One of the most compelling aspects of our current opportunity is the potential to expand our footprint within agencies and programs where our technology is already deployed. As customers continue to operationalize our solutions, we believe we are increasingly positioned to support additional mission requirements, broader geographic deployments, and larger enterprise-wide implementations. This expansionary opportunity is complemented by new pilot programs that introduce our technology into additional operational environments and establish potential pathways toward future production deployments. Our strategy remains focused on leveraging proven capabilities, existing customer relationships, and established integration frameworks to expand our presence within some of the federal government's most important operational programs. During the quarter, we also hosted our annual customer engagement event, bringing together more than 100 federal law enforcement customers for a week of hands-on training, technology demonstrations, and strategic discussions. This represented our largest and most successful event to date, with participation spanning senior agency leadership to frontline operational personnel. Beyond demonstrating our currently deployed capabilities, the event provided direct insight into evolving mission requirements and substantial engagement around emerging technologies, including our next-generation agentic AI software offerings. We believe the evolution from traditional video analytics toward increasingly autonomous, AI-driven operational workflows represents a natural extension of our existing technology platforms and an important opportunity to expand the value we deliver to our customers. Looking ahead to the fourth quarter, our immediate priority remains executing against our approximately $28.3 million order backlog, converting contracted demand into delivered systems, operational deployments, and recognized revenue. This backlog includes hardware and software supporting established programs of record, as well as new pilot deployments that we believe offer meaningful future expansion opportunities. Importantly, we are also seeing increased procurement activity across several of our key federal customer agencies, supported by funding already in place for critical homeland security and law enforcement initiatives. These activities include several anticipated large-scale Indefinite Delivery/Indefinite Quantity (IDIQ) contract vehicles that could provide important procurement pathways for future deployments. While the timing and ultimate value of these opportunities remain subject to government acquisition decisions, we believe our existing customer relationships, operationally validated technology, and established presence within federal programs position us favorably to pursue opportunities substantially larger than many of our historical deployments. Supported by a strong balance sheet and significant order backlog, we remain focused on achieving positive cash flow from operations for the full year while continuing to strategically invest in our platforms, expand our technology capabilities, and support emerging AI-driven requirements across federal and commercial markets. As we approach 2027, we believe Airship AI is entering an increasingly important phase of its growth trajectory. We have established a foundation of differentiated technology, trusted customer relationships, and operational deployments that we believe positions us to pursue significantly larger programs and broader enterprise adoption. With growing demand for both edge and enterprise AI capabilities, an expanding set of funded federal initiatives, and a strong backlog providing visibility into future deliveries, we believe we are well positioned to scale our business, pursue greater operating leverage, and capitalize on what we see as a substantial long-term market opportunity.

The third quarter shows the core business doing what it should: growing, funding itself, and funding what comes next. What comes next is our agentic AI software layer, which now represents the largest share of our development effort. It sits on top of the cameras, video management and access-control systems our customers already own, and lets them ask questions of that data in plain language and act on the answers, without ripping anything out. We expect to put a first release in the hands of initial customers around year end, with broader federal and commercial partner availability to follow. Over time, we believe this changes what customers pay us for: less for licenses and hardware, and more for the operating results our software delivers.