Xer Tech reported a narrowed net loss of SEK 37.8 million in the first half of 2026, down from SEK 50.1 million a year earlier, as revenue climbed to SEK 6 million driven by defense sector contracts and extended demonstrations.
Operating costs more than doubled to SEK 47 million, while operating cash flow remained negative at SEK -18 million. Total cash flow turned positive at SEK 27 million, primarily due to financing activities including a SEK 36 million share issue and SEK 15 million from a reverse takeover. Accounting charges related to the reverse takeover totaled SEK 14.3 million, all non-cash items.
The company’s gross profit margin over the last twelve months stood at -165%, reflecting ongoing investment in product development and commercial expansion. Xer Tech’s cash burn rate is estimated at SEK 12-13 million per quarter, excluding revenue and one-off items. The company’s financial health score on InvestingPro was rated "WEAK" with a Piotroski Score of 1 out of 9.
Shares fell 11.11% following the results, with the stock trading near a 52-week low of $0.36 after peaking at $7.30 last year. Year-to-date returns stand at -31%.
Defense remains the primary revenue driver, with the X8 platform deployed across more than a dozen European militaries. The hybrid propulsion system enables up to 3.5 hours of flight endurance and payloads up to 10 kilograms, with system sales ranging from $200,000 to $900,000 per unit. The X8 PRO variant, launched in Q2, increases payload capacity to 7 kilograms while maintaining 2.5 hours of endurance.
Xer Tech is developing the X12 platform to carry a 20-kilogram payload for three hours, incorporating a European-made engine to meet NATO supply-chain requirements. CEO Erik Herlyn acknowledged slow procurement cycles in defense but emphasized the company’s strategy of targeting large contracts, describing the approach as "elephant hunting."
Commercial activity includes a SEK 500,000 system sale to Copperbelt for BVLOS power line inspections in Zambia and a contract with Canadian service provider Perspectum Drone Inspection Services for methane gas detection along a pipeline from Alberta to Houston refineries.
Herlyn also highlighted growing security risks to European infrastructure, citing drone overflights of critical sites such as power plants, rail yards, and data centers as a persistent threat. The company is pushing to localize 90-95% of component sourcing within Europe to align with NATO client demands, though the X8’s current engine remains U.S.-sourced.
Upcoming milestones include participation in NATO’s REPMUS exercise in Portugal through September 25 and an extraordinary general meeting scheduled for September 17.
