Good afternoon, and thank you for joining us for Guerrilla RF's Third Quarter 2026 Earnings Webcast. I'm Devin Chase with Alliance Advisors Investor Relations. With me today are Ryan Pratt, Founder and Chief Executive Officer, and Mike John Williams, Chief Financial Officer. Before we begin, please note that today's remarks contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially. These refer to the company's filings with the SEC for discussion of those risks. The company undertakes no obligation to update these statements except as required by law. We'll also refer to adjusted EBITDA, a non-GAAP measure, A reconciliation to net loss, the most directly comparable gap measure, is included in the company's third-quarter earnings press release and 10Q. This recording reflects information as of November 2nd, 2026. Because this is a recorded presentation, there is no live Q&A, but investors are welcome to contact us with questions or to schedule a meeting with management at guerrillerf-ir at allianceadvisors.com. And with that, I'll turn it over to Ryan.
Thanks, Devin, and thank you for listening, everyone. Since this is our first quarterly earnings webcast, I'll start with a quick introduction for anyone newer to the company, then walk through the third quarter results and the growth opportunities we are executing on. I've been in the RF industry for more than 20 years. My father co-founded RF Micro Devices, so I grew up around this business and spent the first part of my career designing chips at RF Micro Devices and then Skyworks before founding Guerrilla RF in 2013. We are a fabulous semiconductor company. We design high-performance RF and microwave chips, which are the building blocks that let a radio send and receive signals. The company works with global partners for manufacturing, which keeps our business model capital light. Today, we have over 190 products in our catalog, and we have shipped more than 330 million devices. To give you an understanding of how our revenue builds, it takes us about a year to design a new chip and another year or two to get it designed into a customer's product. But once designed into a customer platform and in production, products in the analog semiconductor industry can generate revenue over extended product life cycles, often spanning many years. Our customers build tactical radios, satellite terminals, cell site equipment, and vehicles, among others. These aren't consumer products that get redesigned every year, which can give us a long and durable revenue tail. In fact, approximately 45 to 50 percent of our revenue is typically derived from programs five years old or more. We believe we have three core competencies. First, our products are well-engineered. Second, we give our customers' engineers a high level of application support. And third, we rarely discontinue parts, encouraging long-term service and product support. You can see that model demonstrated in our third quarter results. Revenue was a record $10.1 million, up 61% from a year ago and up 26% from the second quarter. Gross margin expanded 416 basis points to 71.7% for the third quarter of fiscal 2026, compared with 67.5% for the prior year period, and operating income was $2.4 million, compared with a small operating loss during the prior year period. On a gap basis, we reported a net loss of $3.7 million. However, this largely reflected a $6 million non-cash charge from the change in fair value of our warrant liabilities, with adjusted EBITDA for this past quarter being $2.9 million, or 28.5% of revenue. In addition, we ended the quarter with a record backlog of $16.2 million. While we experienced revenue growth across three of our four market categories, aerospace and defense revenue grew 259% year-over-year and represented about 40% of total revenue, up from 18% during the year-ago period and 27% sequentially. Demand is coming primarily from drones and unmanned systems, satellite communications, and tactical communications. To put the A&D opportunity in perspective, our market assessment estimates that the broader addressable market for RF semiconductors in aerospace and defense was approximately $2.4 billion in 2025, and could grow to approximately $3.2 billion by 2030. That represents annual growth of about 6%, with faster growth in several of our target areas, including satellite communications, drone communications, and counter drone systems. Elsewhere in the business, our infrastructure category revenue grew 78% for the third quarter of 2026, compared with the prior year period on higher repeater, distributed antenna system, and base station sales, and our catalog revenue grew 32% over the same periods on demand across a broad range of applications. Looking further out, gallium nitride, or GAN, is expected to broaden our opportunity in aerospace and defense and other high-power applications. GAN products sell at much higher price points than our average chip today and allow us to address additional portions of the RF signal chain. We recently expanded our design support through Model Ethics, adding simulation models that help customers evaluate our GAN products before building hardware. We also began sampling three additional high-power devices for navigation, military systems, and 5G infrastructure. These are important steps toward bringing our GAN portfolio into more customer designs. With that, I will hand it over to Mike, our CFO.
Thanks, Ryan. Total revenue for the third quarter was $10.1 million, up 61% year-over-year. By market, aerospace and defense generated $4.1 million in revenue, up 259% year-over-year. Catalog revenue was $2.5 million, up 32% year-over-year. Automotive was $2.1 million, down 9% year-over-year, but up from $1.9 million in the second quarter. And infrastructure was $1.4 million, up 78% year-over-year. Starting this quarter, we have broken E&D out from the Catalog category in our Earnings Release and 10Q, and recast prior periods so the comparisons are consistent. Gross profit increased 70% to $7.2 million, and gross margin was 71.7%, up 416 basis points from the year-ago period. This reflects fixed overhead costs spread across higher revenue and a shift in mix towards higher margin products and end market. Operating expenses for the quarter were $4.8 million, up 8% year-over-year, with the increase primarily driven by variable expenses associated with higher sales. More importantly, revenue growth of 61% significantly outpaced expense growth, demonstrating the operating leverage in our model. Operating expenses for the quarter declined to approximately 48% of revenue from 71% during the year-ago period. That operating leverage, combined with gross margin expansion, drove operating income of $2.4 million and an operating margin of 24.1%, compared with an operating loss of $0.2 million in the prior year quarter. On a GAAP basis, we reported a net loss of $3.7 million, or $0.35 per share. I want to be clear about what's behind that. The net loss includes a $6 million, or $0.56 per share, non-cash charge from the quarterly reassessment of our warrant liabilities. The charge had the effect of reducing reported earnings, but did not affect operating income or cash flow. Adjusted EBITDA was $2.9 million, or 28.5% of revenue. That compares with $0.3 million during the year-ago period and $1.5 million in the second quarter. Now, turning to cash, operating cash flow was $2.3 million in the quarter, up from $0.9 million during the year-ago period, and our cash balance increased to $6.3 million from $4.6 million at the end of June. For the first nine months of 2026, we generated $3.5 million in operating cash flow, compared with a use of $2.5 million in the same period last year. We ended the third quarter with a record backlog of $16.2 million, up 19% from $13.6 million at June 30, 2026, and up from $6.6 million at September 30, 2025. Our backlog is comprised of firm customer orders and typically converts to revenue within one to two quarters. So, we view it as a near-term indicator of momentum rather than a multi-year order book. For the first nine months of the year, revenue was $24.6 million, up 53% over the prior year period, while operating expenses were down about 7%. On a GAAP basis, for the nine months ended September 30, 2026, net loss was $4.8 million, compared with a loss of $4.7 million in the prior year period. The net loss for the last nine months included an $8.1 million, or approximately $0.76 per share, non-cash charge from the reassessment of our warrant liabilities since year-end. The charge had the effect of reducing reported earnings, but did not affect our operating income or cash flow. By contrast, adjusted EBITDA for the nine months ended September 30, 2026, was $4.8 million, compared with a loss of $3 million in the same period last year. The main takeaway from our recent results is that the business is scaling and that revenue ramp resulted in higher operating cash flow. This positions us to fund more of our product roadmap and our continued expansion in aerospace and defense from internally generated cash flow. Meanwhile, we plan to continue responsibly investing in R&D and in our commercial team. With that, I'll hand it back to Ryan.
Thanks, Mike. We have a strong third quarter with record revenue, higher margins, and positive operating cash flow. Aerospace and Defense is now our largest market, and we see room to continue growing as we work with existing customers and seek out new design ones. As Mike indicated, we entered the fourth quarter with record backlog. Our priorities now are to deliver on our existing orders, support our customers, and continue developing our GAN portfolio, which we expect to contribute more to revenue next year. Thanks again for listening to our first earnings webcast. We look forward to keeping you updated and to meeting many of you in the months ahead.
This concludes today's presentation. Thank you for listening.
