Xer Tech reported a narrowed first-half net loss of SEK 37.8 million on Tuesday, down from SEK 45.2 million in the same period last year, as revenue climbed to SEK 6 million from SEK 1.2 million. Operating costs surged to SEK 47 million, more than double the prior-year period, driven by investment in defense-focused drone platforms and operational scaling.
The Stockholm-based company, which develops unmanned aerial systems for military and infrastructure security applications, highlighted its X8 platform as a key growth driver. Deployed with approximately 15 clients, including European armies and navies, the X8 offers up to 3.5 hours of flight endurance and a 10-kilogram payload capacity. Unit prices range from $200,000 to $900,000. CEO Erik Herlyn emphasized the platform’s hybrid propulsion system as a proprietary advantage during the earnings call.
Xer Tech launched the X8 PRO in the second quarter, increasing payload capacity to 7 kilograms while maintaining a 2.5-hour flight duration. The company is also developing the X12 platform, designed to carry a 20-kilogram payload for three hours, featuring a European-made engine—a contrast to the U.S.-sourced engine used in the X8. Xer Tech is building 10 drones for inventory and demonstrations, with about 5% to 10% of component costs currently sourced outside Europe.
The company’s defense sales strategy focuses on securing large contracts, described by Herlyn as "elephant hunting." He noted the defense market’s slow decision-making cycles but underscored growing demand for drone-based security solutions amid rising threats to critical infrastructure in Europe. Herlyn cited overflights of power plants, rail yards, and data centers as key vulnerabilities.
Xer Tech’s operating cash flow remained negative at SEK 18 million in H1 2026, though total cash flow turned positive at SEK 27 million, primarily due to SEK 36 million raised in a share issue and SEK 15 million acquired in a reverse takeover. Non-cash accounting charges of SEK 14.3 million were recorded. The company’s estimated normalized quarterly burn rate, excluding revenue and one-off items, stands at SEK 12 million to SEK 13 million.
Xer Tech’s shares fell 11.11% to $3.04 in recent trading, extending a year-to-date decline of 31%. The 52-week range is reported between $0.19 and $0.77. An extraordinary general meeting is scheduled for September 17, with the company participating in NATO’s REPMUS exercise in Portugal through September 25.
The company’s gross profit margin over the last 12 months stood at -165%, while its current ratio was 3.4. InvestingPro rated its financial health as "WEAK," with a Piotroski score of 1 out of 9.
