Operator
Welcome to the FFEAI Robotics Ecosystem, Inc. 3rd Quarter, 2026 Earnings Call. Please note that this conference is being recorded. At this time, all participants are in a listen-only mode. As a reminder, this call is being recorded, and a replay will be available on the company's Investor Relations website. I am pleased to turn the call over to today's host, Jimmy Shaw, Head of Investor Relations at FFR. Jimmy, please begin.
Welcome, everyone, to FF Robotics' third quarter 2026 earnings call, our first quarterly call since we completed the acquisition of the robotics business on October 23. Joining me are Y.T. Jia, our chief executive officer, and Jerry Wong, our executive chairman. Before we begin, please note that today's discussion contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding the company's strategy, product plans, and timelines, targeted milestones, expected expenses, liquidity and capital resources, and anticipated business development. Forward-looking statements are based on management's current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially, including the risk factors described in the company's annual report on Form 10-K and its quarterly reports on Form 10-Q filed with the SEC. The company's financial statements have been prepared on a going concern basis, and the related disclosures in the Form 10-Q describe conditions that raise substantial doubt about the company's ability to continue as a going concern. The company undertakes no obligation to update forward-looking statements except as required by law. All figures discussed today are unaudited, including stand-alone combined financial results of the robotics business acquired from FFAI for the nine months ended September 30, 2026, prior to the acquisition. These results are not included in FFR's reported third quarter 2026 financial results. Following prepared remarks, we will take a few investor questions submitted in advance. Today's discussion covers FFR's third quarter results and developments since quarter end. With that, I will turn the call over to Jerry. Thank you, Jimmy, and thank you to everyone for joining us.
This is our first quarterly report as FFR after the October 23 closing. We now operate as a pure-play robotics company built around the four-core, full-stack AI ecosystem focused on humanoid and bionic robot products, physical AI technology, and industry solutions. Our product philosophy is One Brain, All Robots, Diverse Capabilities, a unified AI and software platform designed to support three primary robot forms, humanoids, quadrupeds, and mobile manipulators. I'll begin by highlighting the third quarter performance of the robotics business that is now part of FFR, provide an update on progress since the transaction closed, and discuss how we are bringing our products, services to customers, and financial results. YT will provide our business outlook. First, let me provide some context on the third quarter operating performance of the acquired robotics business. These metrics reflect the July through September period prior to the transaction closing. As such, they are not included in FFR's consolidated third-court results and remain subject to final review and confirmation. The company's business covers R&D, manufacturing, commercialization, and deployment, supported by the four-core, full-stack AI ecosystem and RoboShare, a robot sharing and service platform. Across our four cores, namely Physical AI, Brain and Developer Platform, Physical AI Devices, Industry Productivity Solutions, and the Physical AI Data Factory, our strategy is to create a continuous value loop, deploying solutions in real-world environments, On the robot device front, we have launched more than 20 robot products across three form factors and have been delivering them to customers. We are building the FFRobot World 2.0, that is our physical AI devices portfolio, across humanoid, quadruped, and mobile manipulator form factors. FFRobotics sold and shipped 351 devices in October, a new monthly record, and cumulative sales and shipments reached 1,168 units. Those totals include periods before the acquisition. The yearly sales and shipment target in 2026 remains at 2,000 units. On October 14, we jointly launched two robots, FF Nova and FF Nova Mini. As previously announced, Nova is our entry-level physical AI humanoid robot priced at $2,490 with a developer skills pack at $390. Nova Mini for early education is priced at $299, with a companion course at $499. We also launched the Nova Reinforcement Learning Developer Program, Developer Community Recruitment, and the Physical AI Spark Program curriculum. In terms of physical AI brain and developer platform, we unveiled FF Omnimind as the brand name for FF Brain on our first Investor Day. Omnimind combines foundation models, motion control, and skills, and is designed to work across robot forms, tasks, and scenarios, driving FF robots from task autonomy to general autonomy. As of November 6, Omnimind and its model ranked number one overall on RoboColiseum's global leaderboard, where RoboColiseum tests global embodied AI models in simulation, including GR00T, N1.7, GPT-6 Astra, Cloud Opus 5.5, and Pi 0.5. FFR is accelerating the deployment of NVIDIA SONIC across its multi-form robot platforms. The NVIDIA SONIC data, models, and deployment solutions based on FFMaster have been fully open-sourced, 100% via GitHub and Hugging Face, while the FFR NeoFuturist robot now fully supports SONIC, further expanding its development and application on more advanced robot platforms. On the developer platform, we previously introduced six developer tools, BrainBlocks, a block-based programming tool for K-12 students, CreateStudio, a motion skill creation tool based on teleoperation and video imitation, EAI Soul, which helps shape a robot's personality and conversational style. EAI Scribe, which generates skills from natural language instructions. EAI Studio, which supports the full workflow from data collection through inference, and an SDK and API for professional engineers. BrainBlocks recently introduced an AI module and motion recording and playback, with support for FF Nova Mini. The AI module can recognize gestures, body poses, objects, and sounds. Users can train it to recognize new gestures and sounds and incorporate them into block-based programs. They can also record a sequence of movements by positioning the robot in a series of poses, then have the robot play them back without writing code. In addition, a simulation sandbox for FFNOVA is currently in beta testing and is expected to launch by the end of November, providing developers with a simulated environment for development and testing. For the Industry Productivity Solutions Corps, we launched our Robotics Education Ecosystem Solution 1.0 and have continued to improve it. In October, we also introduced the Physical AI Spark Program curriculum to help educational institutions and families learn about physical AI through hands-on experience with robots. The Physical AI Data Factory has active data orders and has completed the full commercial cycle, from device deployment and data collection through cleaning, annotation, quality control, delivery, and payment collection. We continue to deliver first-person data and have received payments for those deliveries. We have also completed a pilot order for a leading frontier research lab, which is now in final evaluation. In addition, we have made a portion of our real robot teleoperation data set openly available on Hogging Face. RoboShare, our robot sharing and service platform, connects robot owners with businesses, educational institutions, and other organizations seeking flexible access to robotic solutions. We have expanded its core operations team, established standard service procedures, and onboarded 10 third-party companies and more than 100 robots. Our goal is for RoboShare to become the robot-sharing platform with the largest fleet and broadest range of robots in North America. Our initial focus includes four industries, including education and research, security and inspection, industrial and logistics, and commercial and service application. Our education and research ecosystem serves both schools and families. Our offering combines the robots with curriculum, skills, and the developer program. Our joint robotics lab with California Science and Technology University and Boston International Business School is part of that work. As we reported during our investor day, we believe FRR has become the number one provider of K-12 robotics education in the United States, and we are working toward a broader national education position. Security and inspection ecosystem entered proof of concept with an initial group of customers and industry partners. Industrial warehousing solution entered technical feasibility assessment. Security and inspection will use professional system integrators as a core sales channel. Our industrial and logistics ecosystem has entered the technical feasibility assessment stage, and we aim to initiate the proof-of-concept POC phase as soon as possible. We are working with partners to advance the application of mobile manipulator robots in warehouse sorting, material handling, and other scenarios, accelerating customer validation and commercialization. In the third quarter, we advanced our commercial and services ecosystem across use cases, including robot performances, guided tours, guest reception, and interactive experiences. Through RoboShare, we deploy multiple robots at paid commercial events. These deployments provide early evidence of their commercial potential in entertainment, brand promotion, and customer engagement. We are also exploring guided tour and reception services in showrooms, commercial facilities, and corporate settings. By expanding our regional partner network and standardizing service operations, we are laying the groundwork for broader deployment. Let me turn to how we reach customers, through our partners, and direct sales. Recently, we have announced strategic partnerships with KYA Group, intended to support access to U.S. government and institutional channels, with California Science and Technology University and Boston International Business School, to establish the BBFFCSTU Joint Robotics Lab, and with Pinnacle on business-to-business real estate brokerage solution and consumer home security applications. We are developing top-tier K-12 school customers and plan to replicate our physical AI education and training solutions and K-12 school solutions across the U.S. In our November 8 update, we reported security and inspection sales contracts with North American integrators and distributors. Our home security work with Pinnacle remains in proof of concept. We have completed the initial build-out of core capabilities under Phase 1 of its Building USA Acceleration Program by the end of July, 2026, and unveiled its three-phase roadmap at the FF Robotics Building USA Launch and Business Partner Conference held in August. On the financial side, I will cover three things. Our third quarter results in two segments. The financial implications of the October 23 closing and our outlook with a near-term emphasis on the fourth quarter of 2026. First, how to read the quarter. Our third quarter results do not include the robotics business. That acquisition closed on October 23, after the end of the quarter. Financial statements of the robotics business and pro forma financial information will be filed with the SEC. Within those third quarter results, RoboShare reached an important commercialization milestone by recognizing revenue for the first time, consistent with the target we communicated last quarter to begin generating revenue in Q3. We ended the third quarter with $3.2 million in cash and $6.9 million in total assets, with net loss of approximately $2.7 million as we continued to invest in growth. During the quarter, the company also completed an orderly exit from its legacy digital asset holdings by September 30, 2026. Now, turning to the acquired robotics business, which represents an important part of FFR's operating strategy going forward. As noted earlier, the acquisition closed on October 23, 2026. Therefore, the robotics business' operating results for the third quarter are not included in FFR's consolidated third quarter 2026 financial results. The following are unaudited combined financial results of the acquired robotics business for the nine months ended September 30, 2026, prior to the acquisition. For the first nine months of 2026, The acquired robotics business generated approximately $2.3 million in revenue, of which approximately $1.1 million was recognized in the third quarter alone. This represents nearly half of the nine-month total and reflects an acceleration in commercial activity, with third-quarter revenue nearly matching that of the entire first half of 2026. Gross profit for the nine-month period was approximately $593,000, representing a gross margin of approximately 26%. Operating expenses were approximately $28 million, including approximately $7.3 million in research and development expenses, representing 26.2% of total operating expenses. Net loss for the nine-month period was approximately $27.4 million, representing an average monthly net loss of approximately $3 million. Of this amount, approximately $24.4 million of costs were funded directly by the parent and recorded as capital contributions, and net cash used in operating activities was approximately $2.5 million. This reflects a relatively lean operating structure. As FFR integrates and scales the robotics business, we intend to maintain a disciplined cost structure, improve operating efficiency, and closely manage cash consumption. From a balance sheet perspective, the acquired robotics business enters the transaction with a relatively light liability structure and positive net asset position. As of September 30, 2026, the acquired robotics business had approximately $4.9 million of cash and cash equivalents and $8.2 million of total assets. Total liabilities were approximately $1.4 million, resulting in approximately $6.8 million of net assets and $6.7 million of working capital. The robotics business came into FFR's closing with a clean balance sheet and a light capital structure. As of September 30, 2026, it had no outstanding borrowings or convertible debt, and FFR did not assume any of FFAI's financing obligations in the acquisition. Now, turning briefly to the closing of the acquisition. On October 23, FFR completed its all-stock acquisition of FFAI's robotics business. As previously disclosed, FFR issued common shares and non-voting convertible preferred shares to the Cayman seller as transaction consideration. With the acquisition completed, the robotics business and related assets had been transferred to FFR. Following the transaction, FFR continues trading on NASDAQ as a pure-play company focused on humanoid and bionic physical AI robotics within a four-core full-stack AI ecosystem. Further details of the transaction structure and consideration are available in our SEC findings. At the acquisition closing, YT Jia became chief executive officer, I became executive chairman, and Chen Shi became lead independent director. Jason Dodier remained on the board as an independent director. YT will discuss our outlook, including the remainder of 2026 and beyond. YT, please go ahead.
Thank you, Jerry, and thank you, everyone, for joining us. First thing first, I want to emphasize that we have completed our orderly exit from the digital asset treasury strategy and redeployed the resources previously committed to it toward our robotics operations. We have continued to build the governance and SEC reporting processes appropriate for a NASDAQ-listed operating company, and we will keep those systems in place as we integrate the acquired robotics business. We also continued to advance the company's AI governance framework and achieved positive progress across organization governance, business processes, data, models, and token governance. Looking further at our business and operating plans by Q1-2027, we intend to formally launch a Robotics Education 100 City initiative. For security and inspection, we target to complete POC in real industrial scenarios and plan a self-developed lightweight mobile manipulator robot. For industry and logistics, we hope to empower third-party integrators, build a self-developed security and inspection turnkey solution, and a campus-based security solution. For commercial and service, we will create a new robot entertainment and performance model, as well as a campus ecosystem navigation solution. We also plan to extend our sales channels to 30 cities across 5 states. Now, let me share a few updates on our plans for the four cores of our robotic ecosystem. Starting with the brain and developer platform, we plan to introduce our physical cloud technology platform and productivity token during CES time period. By bringing together our robotics brain and developer platform capabilities, we aim to make robots with different forms and capabilities more affordable and accessible to educational institutions and K-12 schools. Looking ahead, FFR's brain strategy will focus on aggregation plus small models plus vertical technology solutions. We're building the platform to support different robot forms and applications through shared AI capabilities, software architecture, and developer tools. We are exploring commercialization through software licensing, platform services, technology integration, and partnerships across the developer ecosystem. For the Devices Core, our focus is on continuing to grow robot sales and deployments while maintaining positive unit growth margins on deliveries. We will also continue to expand and upgrade FFRobot world. For industry productivity solutions, we plan to continue improving our education solution and introduce version 2.0. For our security and inspection solutions, we have established a phased development and acceptance plan for Robot Management System or RNS 1.0. In the first half of 2027, we plan to validate the cloud-based inspection workflow, followed by single robot inspection and unattended operation using a physical robot. We also plan to advance customer-side pilots. After that, we plan to expand RMS capabilities to include management of multiple robot models, mobile operation, and automatic return to the charging dock and resumption of patrols. These capabilities are intended to support the deployment of our security and inspection solutions across multiple sites. For the data factory, we'll continue building our capabilities in data collection, processing, annotation, management, quality control, and utilization. We plan to combine simulation and real-world operating data to train, validate, and improve our physical AI models, while exploring opportunities in data licensing, processing, and related services. For RoboShare, in the fourth quarter, we will focus on strengthening its rental and on-site services in the Bay Area. We plan to expand the robots available for rent through dealers and third-party equipment owners, while local operating partners support deployment and operation at customer sites. In the first quarter of 2027, we plan to advance the next phase of our 10-cities strategy, entering Chicago and Dallas through the events market, expanding from New York into Boston and Miami, and working with partners in the UAE to explore opportunities in the Middle East. We are also exploring how to bring skills from FF Omnimind and the EAI developer platform into rental projects, so customers can configure robots for their tasks using existing skills and reduce the need to set them up from scratch. On Build in USA, Phase 2 is underway. We are working toward factory operation by year-end and toward the first locally produced robot in the U.S. at our factory by first quarter of 2027. Lastly, I want to reaffirm our full year 2026 guidance of approximately 2,000 robots sold and shipped with positive unit growth margins for the acquired robotics business on a standalone basis. That guidance includes pre-acquisition periods and is not FFR's reported consolidated result. Jimmy, back to you for investor questions.
Thank you, YT. We will now take a few investor questions submitted in advance. Question 1. How confident is management in the full-year 2026 guidance and the near-term growth potential for the business?
As I just noted, we reaffirm our full-year 2026 standalone guidance of approximately 2,000 robots sold and shipped with positive unit growth margins for the acquired business. Our confidence is supported by the delivery progress already reported. Cumulative sales and shipments reached 817 units at the end of September, as reported by FFAI before the closing. October then reached a record 351 devices, bringing the cumulative total to 1,068 won. The remainder of 2026, and especially the fourth quarter, is our near-term focus. On the next few quarters, we are targeting more record performance in sales and shipments. We will certainly provide additional details to the market in due time.
Question 2. What is the current position of FFR's balance sheet, and how should stockholders read the third quarter results given the October 23 closing?
Our third quarter results do not include the acquired robotics business because the acquisition closed after the end of the quarter. As of September 30, 2026, we have $3.2 million in cash and cash equivalents, $6.9 million in total assets, and $5 million in stockholders' equity. These balances reflect our financial position prior to the acquisition. Those balances predate the acquisition. The acquisition was completed entirely in stock and brought no cash proceeds from that issuance. As disclosed in our Form 10-Q, there is substantial doubt about our ability to continue as a going concern, and we will need to raise additional capital to fund our operations.
Question 3. What is FFR's current sales reach across geographies, channels, and industries, and what can you share about customers and how the robots are being used?
Sales reach is now a core part of how we describe the business, alongside the hardware and software. Education and research serves educational institutions and families through NOVA, NOVA Mini, Curriculum, Skills, and the Developer Program. Nationwide implementation has begun, and the joint lab with California Science and Technology University and Boston International Business School is part of that work. We intend to launch a K-12 Robotics Education 100 city plan, as mentioned earlier. Beyond education, applications include campus patrol, facility inspection, and warehouse security. Our November 8 update reported security and inspection sales contracts with integrators and distributors. The pinnacle home security proof of concept remains in progress. For commercial and services, we are developing offerings in robot entertainment, rentals, experiential and event marketing, and reception services with a geographic focus that includes northeastern U.S. with a focus in New York, New Jersey, Connecticut, and Pennsylvania, among others. We also cover Southern California and Las Vegas areas. Our physical AI data factory has also delivered egocentric training data and received payment.
Question 4. How is the Built-in USA program progressing, and how could changes in the U.S. regulatory environment, including restrictions on foreign-made robotics hardware and software, affect FFR?
Phase 1 of Built-in USA was completed before the closing. Phase 2 is now the operating focus. As previously mentioned, we are working toward factory production by year-end and toward the first locally produced robot body in the first quarter of 2027. Subject to the timing confirmation already noted, regulation could affect which products we can deploy, when we can deploy them, and the cost of doing so. On July 28, 2026, the FCC added foreign-produced advanced robotic devices, including humanoid and quadruped robots, to its cover list. We continue to monitor developments in this area.
Question 5. When do you expect the transaction shares to be registered, and what does the transaction mean for shares outstanding and the public float?
The acquisition consideration was issued at closing, including non-voting convertible preferred shares. Conversion of those preferred shares into common stock requires stockholder approval, completion of the applicable Regulation 14 process, and other conditions. As we presented at Investor Day, FFAI's consideration shares are subject to an 18-month lockup from the October 23 closing. That lockup continues after conversion, subject to specified exceptions in the agreements. As presented at our October 26th Investor Day, existing public stockholders represented the freely tradable public float at closing or approximately 11% on an as-converted, fully diluted basis after stockholder approval, assuming the then-described capitalization. The remainder is subject to lock-up, employee vesting, or registration. That presentation is illustrative. It is not today's common share count or freely tradable float. And conversion of preferred shares does not, by itself, increase the shares that can be freely sold.
At this time, there are no additional questions. This concludes the FF Robotics Earnings Call. Thank you for participating. You may now disconnect.
