Welcome, everyone, to Mobilicon 2025 annual financial report webinar with investors. Joining us are Liad Gelfer, head of finance, and Ornel Kayyam, CEO and founder. This webinar covers Mobilicon 2025 financial reports with investors. Please note that today's presentations contain forward-looking statements subject to material risks. I'm addressing everyone to refer to our Form 20F for a full description. The agenda will include summary of 2025 annual financial and operational key highlights, 2026 financial outlook, and lastly, Q&A session with investors and analysts. This webinar is being recorded and be later available on the company's investor website. I will now pass the call to our CEO, Oren Ilkayam. Oren, the presentation is yours.
Thank you, Liad. So I would like to start with a very brief introduction of Mobilicom for those of you that are not familiar with the company. And we'll continue with my belief on 2025 as we see it. So, Mobilicom offers an essential IP-based, high-value cybersecurity software hardware and cybersecurity solution. Those are subsystems sold to drones or robotics manufacturers. Those proprietary solutions are the ones that power, connect, secure, and safeguard drones or robotics. Mobilicom is actually in the convergence of three major trends. Drones, the cybersecurity, and robotics autonomy, which positions the company extremely well going forward. Mobilicom has essentially two divisions, a hardened hardware solution, harder in this case means secured, more challenging to hack, and then cybersecurity software business, As you can see on this slide, Mobilicom Hardware Solution were certified in 2025 as a US-approved product with the BlueOS Select, the Trusted Cyber, the NDA Validation, and the DD4094 Electronic Equipment Allocation. The business model is very vivid. We get foot in the door with secured hardware, which yields 50% to 60% in margin, and then cross-sell the cybersecurity and software solution with up to 90% margin at minimal competition. Since we are already a hardware supply to many of those drones platform providers, we can incorporate cybersecurity and software without undergoing a new procurement cycle. Mobilicom is a leader in this area and is well positioned to success. I would like to start by giving you my insight on 2025. 2025 marked a turning point for our business, securing Mobilicon position in the U.S. defense market. We achieved critical milestones with the certifications of Mobilicon products for the Department of War, with the Blue OS Select Program, with the Trusted Cyber Verification, with the NDAA Validation, and the Equipment Frequency Allocation. Over 70% of our revenue and growth came from the U.S. market. It was the year where we reinforced our position as leader in cybersecurity offering and are standing with the following. We have released the Secured Autonomy Framework, which is an innovative approach to the market. We formed strategic partnership, completed integration, and launched joint product with two NVIDIA AI autonomy computer providers. We established strategic partnership and introduced joint offering with an AI autonomy software providers. Our solutions are first to comply with the newly issued Department of War Cyber Regulation, the CSRMC. We are proud to be a key contributor to our top-tier U.S. drone provider, supplying essential hardware and software solutions for their loitering kamikaze drone. Over nearly four years of joint journey, at the start of 2025, we processed orders worth hundreds of thousands of dollars every few months. We finished the year with ultimately reaching a purchase order of $1.5 million for a quarter. That shows the significant growth and our anticipation for next year. We are thrilled that this partner, the top-tier customer, has recently secured the Department of War program of record. A dedicated budget of approximately $250 million in deliveries planned over the next five years, and with option to extend that further. We have experienced massive increase in our balance sheet in 2025, driven by additional funding from warrant exercise and fundraising activity. We finished the year with over $19 million cash in hand, reducing our monthly burn rate to the lowest in our history. This is a solid financial position that will allow us to grow in the coming years, 26 and 27, which are pivotal years for our growth. We expanded our leadership and team by hiring new members, resulting in larger and stronger U.S. team, as well as EMEA, Europe, Middle East, Africa team. This growth allows us to broaden our outreach across U.S., EMEA, and Asia Pacific, leading to new customer acquisitions. I think that this is the time to thank our leaders and employees worldwide for their efforts and dedication that have resulted in an impressive achievement so far. I would like to express a special thanks to Yossi Segal, our co-founder, for his continuous innovation and leadership in technology. Thanks to all of them, we are in the right place in the right time. We are still in an early stage of our scalability and growth, given our current position. I would like to hand off the call to Liad, our head of finance, to review our financial result first, and then I will continue briefing you on our activities in 2025 and the forward looking expectation for 2026. Liad, please continue.
Thank you, Oren. We closed the year with $90 million in cash, up by 120% from previous year at $8.7 million. Out of that, 20.6% raised via warrant exercise and equity, as Oren mentioned earlier. We have zero debt, zero credit lines, zero convertible, very strong flexibility. Revenue closed at $3.4 million, a 7% year-over-year growth. Out of that, over 70% from the U.S., mainly in the defense sector. Q4 closed at $226K. It's a second quarter of over $900K revenue. The H2 acceleration is the forward signal for our company. Gross margin at 53% only on hardware. It's IP-based technology margin consistent with our prior periods with operations set for scaled production delivery in the future. Monthly blend was $159K, down 41% year-over-year, as Oren mentioned, lowest in the company history, and enabled the company several years of running on existing cash. On a gap basis, the 23.7 net loss includes 30.7 of non-cash warrant fair value, which is IFRS requirement, and $5.9 million non-cash share best compensation. Neither is cash out of the door. Non-FRS EBITDA was $4 million, which is really close to the $3.2 million of last year. Full reconciliation, you can see in our 20th. The barren rate was decreasing over the years from $350K up to $159K in 2025. It's a 52% reduction while growing revenues. This is operating model maturity, not a cost-cutting. Our model, which reflects unique return on investment capital, hardware is an asset-like contract manufacturing at high margins. Software licensing and near-zero marginal cost per customer. So we're talking about how operating leverage as we scale. We have a straightforward route to becoming cash flow positive, which we'll discuss over the next slide. About the balance sheet strength, the table shows cash up at 121%, more than double from last year. Again, zero debt, equity is up by 190% to 8.8 million. It's reflecting a strong capital stewardship. On the 9.1 non-current financial ability, as mentioned earlier, this is an IFRS mark-to-market accounting for our warrants. Not debt, no cash repayment, and when warrants are exercised, it automatically converts to equity. Exactly what happened with the 12.6% of the exercise in 2025. As of December 31st, 2025, we had 12.2 million shares outstanding. On a fully diluted, excluding ESOP and RSU, it was 15 million. Including all grants, we're talking about $17.8 million. This excludes warrant at about $5 per strike. If exercised, it's additional $40.1 million additional capital. The key metrics here that 75 market cap on outstanding and $108 million on fully diluted. We believe what makes Mobilicum a hidden gem is that it's relatively low EV for revenue factor at around 19.6 multiplier at the end of the year, which decreased to 17 multiplier under the current market cap. In comparison, our drone sector peers listed on Nasdaq have multiples of 40 and even higher. The 42 cash as a percent of the fully diluted market cap can bring us a really substantial cash caution for the future. I will now hand off the call back to Oren to review our 2025 operational highlights. Oren, it's yours.
Thank you, Eliad. So obviously we had quite a lot of achievements in 2025, but I would like to focus on the key achievements and main ones that will help us grow significantly in 2026 and 2027. And let's go through a few of them. I think that the most important milestones that we have achieved in the end of 25 is, and beginning of 26, is the fact that a tier one, a U.S. tier one partner, Mobilicom partner, won a program of record, which is a formally funded multi-year acquisition program. This is the gold standard of defense procurement. Our tier one customer won nearly $250 million POR program of record with our Skyoper Pro Datalink and ICE electronic warfare resistance software as essentially embedded components inside. Production has commenced. Deployment has commenced. Purchase orders started as the customer ramped up to full production scale. Mobilicum expects continuous order over the next five years. And POR earners are usually historically win additional program of records by other corps in the DOW as well as allied nations. This is a compounding multi-year revenue driver for Mobilicum. Mobilicum in fact expects the program of Ergo project to increase significantly since it was set four years ago before the surge in demand for loitering munition kamikaze drone caused by the recent conflict in Ukraine in the Middle East I will give you one example the physical year 2026 budget request by the Marines show a massive increase in autonomy investment of over 5 billion dollars suggesting a high demand for capabilities like those offered in this program of record. So I think that one of the biggest milestones achieved after years and years of joint work is this program of record that will pivot Mobilicom's success going forward and will be the base of additional wins by this partner and other partners that are using Mobilicom's solution. A second important milestone this year was the U.S. regulatory compliance. This builds on the Blue UAS framework certification from February 2025, where the Scarper family of products models were DOD, Department of War approved, and the NDAA hardware and software compliance, where the trusted cyber certification was achieved. and the DD-1494 electromagnetic allocation map was accomplished. Mobilicom has arguably has a comprehensive U.S. regulatory certification stack in the drone communication and cybersecurity space. What this means for competitors is product not on this list cannot participate in U.S. federal program. that is a structural competitive moat. There is essentially a very little competition space right now in the United States. In the data link and communication segment, there are only five data link SOX providers in this space. In the market that is going to grow rapidly, some will say to tenfold very fast. Therefore, there is expected that every one of those players will win and grow significantly. That showcase our unique position with this regulatory in a market that is experiencing very high growth. In EMEA and Asia Pacific, we experience expansion and wins. Mobilicom invests in business expansion and locked new design wins with customers across Europe, Asia Pacific. For example, we have new customers in Europe, in Germany. We have an India ISR platform. We have Middle East, UAE partners and customers. We have Asia Pacific growth with a tier one player in the robot as a robotic provider. So, significant expansion is occurring in other markets as well. Our OS-free and secured autonomy was a very big breakthrough this year. We reinforced our position as leader in cybersecurity offering for small-sized drones and robotics with the release of the secured autonomy framework, which is a leading market position for us and for the market security. We formed a strategic partnership and completed integration and launched first product with two NVIDIA AI autonomy computer providers, AI Tech and Arc. We established strategic partnership and joint offering with the leading AI autonomy provider, Paladine AI. Our solution complied to the newly released cybersecurity regulatory that was recently released by the Department of War, which is going to be a pivotal, compelling event for the industry, requiring all platforms and definitely autonomous platforms to have active cybersecurity like Mobilicom's OS3 solution, which is currently the sole solution in the marketplace. Together, this partnership creates a hardware-to-software flywheel, embedded hardware drives deployment, while the software generates recurring high-margin revenue, and certification protects the moat. I would like to expand further about the OS3 and the American Department of War CSRMC standardization. In November 2025, the U.S. Department of War issued cybersecurity risk management construct, the CSRMC. This mandate, mandate a shift from static to continuous active real-time cybersecurity defense across all autonomous systems by September 2027, as estimated. In the defense market, September 2027 is tomorrow, which means that companies will have to decide by the time they will realize what they have to accomplish and deploy between buy versus make, buy will more probably be the solution of choice. Our OS3 platform was designed for exactly this. It was not built in response to the regulation. It was built ahead of it. We believe we are one of the first commercial available solution fully addressing CSRMC requirements. Combined with the recent FCC Trust drone mission, our OS3 position reinforced why we describe Mobilicom as the emerging standard for autonomy system cybersecurity. Every defense drone manufacturer that must comply with the CRMC should evaluate our solution, and we are already in the room. Another important milestone was the transitioning to ordinary shares. We accomplished ADS to ordinary share conversion in December 2027. Another promise we made for the market and executed on time. trading as Mobilicom since December 8. This removes fees and fraction. It opens index eligibility. It simplifies U.S. market access, a structural upgrade to our capital market profile. Giving our achievement as well as our position to capture market share in this rapidly growing market, we are still in the early stage of our scalability and growth. we would like now to present the outlook for 2026. So obviously, given the fact that we are only in the market growth, we are unable to provide guidance for 2026 in numbers. But we can say a lot on what our expectation on the business delivery that will lead to revenue growth significantly in 2026 and 2027. We can see from the outlook of our hardware business that we are embedded across multiple players in tier one, tier two, and tier three platform makers around the globe. But we would like to focus on tier one because we believe that the tier one customer pipeline is the one that will determine the success because the big players are going to win the big programs and budgets. We finished the year of 2025 with six total tier one customers, two of them in design in an R&D stage, four of them in initial production. We anticipate to have between eight to 10 tier one, tier one players across the globe, where three to four will be in R&D stage, three to four initial production, and two will be in the ramp up production, mass production scale. In fact, those of you that follow what is happening with Mobilicon, with the recent growth in the Q4 of 2025, the orders that we received ahead of time, the program of record that was achieved, the first of the two ramp-up was already happening. Delivery, production, and scalability is already happening, and the ramp-up of the first one is already delivered. So we are on time. In addition to that, few additional players are under integration. Significant players from U.S. platform makers are in integration with Mobilicom. So we are expanding the 3.1 customer pipeline in U.S. and in the world, as we promised. On the cybersecurity and software pipeline, we had in 2025 two NVIDIA partner-based for our solution. we estimated that we can accomplish four to six NVIDIA and Qualcomm, Qualcomm being a significant player on the smallest drones that we are seeing right now scaling dramatically. Therefore, we will have those four to six partners, Qualcomm and NVIDIA base, as well as additional AI autonomy software partners that will position Mobilicom very strongly in the software and cybersecurity business for the drones or robotics market, and we'll specifically position Mobilicom as the center with the secured autonomy concept and partnership to provide a complete offering for the autonomy of drones or robotics, which is the future of every deployment going forward. With regard to casual positive, which is our aim, we have indicated in the past that an annual rate of 12 million dollars in revenue is the line where we can get to cash flow positive which means that the quarterly run rate of about three million dollars will bring us to cash flow positive run rate we anticipate again that we can reach this point in three to four quarters as the customers and programs of the governments are scaling so as they would deploy and as the programs are ramping up forward, as we see happening right now, and customers are ramping up in their production, Mobilicom delivering to those customers, the harder and softer will reach that point. Again, after you saw our cash position, we have more than enough funding in place to reach the cash flow positive targets that we have. Another important guidance that we would like to describe is our production and delivery capacity. We believe and discuss in the next slide the strategic inventory and ready-to-deliver-at-scale position that we would like to accomplish, and the U.S. manufacturing strategy. Both of them will bring us to the capability to expand our capacity of production. In the hardware annual production capacity, we want to exceed 3,000 units. On the software annual delivery capacity, obviously, it's unlimited being software solution. And those are the capacity that we want to achieve. I would like to specifically describe two important activities and milestones for 2026. In the supply chain context, I would like to share with you that AI electronics demand has surged. Global defense race is under place. The tariff situation with the U.S. tariffs on China drone components is significant. China export control are hardened and creating a big issue for the industry. And there is 16 to 24 weeks component lead times right now in the market. And we see competitors without forward inventory are facing production delays. So we are entering a perfect storm situation when all of those elements on the left side are creating a very big industry-wide challenge. And that's, for us, a big opportunity. Our response is proactive pre-buying the long-term and long-time items components. We would like to have MCU and RF models ahead of everybody else. We would like to have NDAA-compliant parts now, and we would like to utilize our significant cash position and financial strength to our success going forward. The results, when POR, program of record orders, accelerate as we expect, we fulfill immediately. When new PORs are entering, we will fulfill immediately. When competitor shortage creates gaps, we stepped in. Pre-buying at today prices protect our gross margin from further tariff escalation. Cash-constrained competitors cannot replicate this strategy. Therefore, our balance sheet is not a safety net, is our weapon right now. And that's why the growing financial balance sheet, which was improved quarter by quarter last year, is going to be utilized to build the stage for the great success going forward. Let's discuss the U.S. manufacturing. Obviously, some of you follow the American Security Drone Act, the ASDA, in force since December 2025. ban federal funds for foreign adversary drone components. You cannot buy and use any foreign components or drones based on this act. The Executive Order 14307 directs agencies to prioritize U.S. manufactured drones. We are establishing U.S.-based assembly and integration to comply. And as was announced just a few days ago, the Department of War has already designated us as a trusted drone provider, one of only four global players that receive it in weeks after the legislation has passed. That designation explicitly supports our path to U.S. production. We aim to be manufacturing domestically by the end of 2026. The five-step plan that we have established is establish U.S. Assembly, leverage our program of record momentum to justify the investment, which is not high, by the way. We will create a regulatory moat versus non-compliant competitors. We will scale towards the government's plan to reach 1 million drone-a-year vision, and we'll unlock the full federal addressable market from Obilicom, not just our current customer base, beyond that. So we believe that with the right U.S. production scalability, in addition to the production scalability that we have around the globe, will enable us to win bigger business and continue the momentum that was created. And that also reinforced the position that we gained with the Department of Work and the FCC that established Mobilicom as a critical strong component provider and put that in the government books as can be seen days ago. So that, I think, reinforced our position. I would like to provide some comments summarizing the presentation to date before questions. There are eight good reasons why Mobilicom is a compelling opportunity today. First, the FTC trusted drone set Mobilicom as one of few first players and the only company with multiple products exempts. The DOW, Department of Work, validation of our technology is a critical milestone for the investor community. The program of record that our partner won of starting from $250 million with five years funded program of record that is our system embedded inside and production is running is a great pivotal stage for Mobilicom that will build upon us. The certification of BlueAS Select and others with a full compliance stack as US solution for our Skyoper hardware solution are DOD certified and are important because the competitor's number is low and those that are not in the game and not in the list will not be able to win the growth of the American market as Mobilicom is going to enjoy. The secured autonomy and OS-free industry first to comply to the recent Department of War standardization and regulation is critical, together with NVIDIA and Qualcomm Compute that we have. Our strong balance sheet with $19 million in cash, zero debt, and many several years of runway is an important factor. The capital efficiency under $160,000 per month and three consecutive years of reduction give us a clear path to cash flow positive target. The U.S. production by the end of this year, expand our production capacity in the regulatory mode versus competitors is important position. And we are expanding our tier one drone platform partners and increasing our cybersecurity and autonomy position with NVIDIA and Qualcomm AI partners. All of those show that Mobilicom in 2025 built a foundation. 2026 is where we are compounds, it compounds. And 2027 will grow even higher and better. So we have a very exciting years ahead of us.
Thank you, Or. We'll now move to the investor analyst Q&A session. Our next questions are coming from Barry Shine, Barry Shine, sorry, with LeachFeed his research. Barry, your line is live.
Hey, good afternoon, gentlemen. Can you hear me okay?
Yes, we do.
Okay, a couple of questions if you don't mind. First, I wanted to talk about just getting an update, make sure we're all on the same page in terms of current ownership and dilution. It looks like from the 20F, and by the way, Lead, thank you very much for getting that out so timely so we have it for this call. Looks like insider ownership is about 7.6% currently following the tax transactions that management did last year. Is that about right?
I would like to correct you. The insider's ownership is much higher than that. First, I would like to mention that the sales to cover transaction conducted in 2025 were mandatory tax withholding sales related to the RICU vesting, not restrictionary insider sales. We didn't have any description, any insider service in 2025. The sales to cover executed under the 10B5 broker plan was completed. The insiders, including board members and key executives, currently hold about 15% on a fully diluted base. So much higher than you mentioned.
Okay, I'm glad I asked. And in terms of scalability and your capital requirements. So in the presentation, you gave a lot of numbers, $19 million in cash. There's still additional warrants that if those are exercised, that would bring your cash up to about $33 million, no debt. So you seem to be in pretty good shape. Your CapEx is minimal. And I'm assuming when you talk about U.S. manufacturing, you're going to do that through a contract manufacturer. You're not going to break ground and build your own factory. So it's, and I think, Oren, you said during the script that you do have more than enough So if you kind of bring us up to date, because there are other companies in the space where we're seeing a lot of capital raises, and as you know, those come with dilution.
I think it's an important question. Thank you for that, because I think that this is where we shine. This is our uniqueness, and I believe the difference between Mobilicom and everything else that you see on the market right now in the drone related business our business model intentionally maintains a very low capital requirement for our hardware production we use contract manufacturing we do not own facilities and factories for the software delivery has near zero marginal cost our assets base is ip know-how certification the customer relationship not the production equipment if we have to scale two times or even 10 times in production increase uh does not require potential proportional capital investment it requires supply chain preposition which with our 19 million dollar cash in hand and much less than that we can accommodate in coordination with contract manufacturers that we can use so we are taking producers around the We give them the drawings and know-how of Mobilicom that they can build a solution for us. They build it harder, and then we burn inside the IP and software that makes this harder, the valuable product that we have. So we control the IP, we control the know-how, and we can scale fast with no significant capital investment. And that's the beauty around Mobilicom business model. We do not anticipate needing equity raises to reach cash flow positive. The 19.1 million cash position with the existing very low, very low burn rate provides sufficient runway to fund operation and strategic inventory throughout their programs of record, ramp up and additional programs of record that we anticipate. the U.S. manufacturing specifically. We are establishing assembly operation, not building new factories. The capital requirement is manageable and is already built into our operational plan. So for your question, we do not anticipate any fundraising. We don't need that in order to build the capacity even to go two times or 10 times on our capacity of production.
Okay, that's very helpful. My next question, you touched on this in your prepared bookmarks. I wanted to ask about the Federal Communications Commission's announcement where you're included in the first batch in their trusted program. Congratulations on that. if you could kind of translate that for investors, what does that mean in terms of your ability as you go out and you talk to prospective customers or even your existing customer base? What does that mean? And then maybe we can discuss what that means in terms of the impact on the bottom line on the EBITDA generation for 2026.
I think that before I'm answering the question, I think that we have to emphasize the fact that the government of the United States and this administration issued a new legislation under the FCC related to drones and drone components being produced or delivered from outside of the United States. And in within weeks, within weeks, one of the first companies to get a waiver for that and be acknowledged as a critical drone solution provider with multiple solution inside is Mobilicon. That says volume about our position, because the fact that the Pentagon and others are calling us and working with us on understanding our needs and capacity and scalability and production and so on, give you some insight on Nobilicom's position within the U.S. DOW marketplace. With regard to your question, the FCC-trusted drone designation is more than just compliance milestone. It's certified that our entire product range, including the Scarper data link, the mesh networking, the ground control station, and our newly cybersecurity and software solutions like the OS3 and the ICE electronic magnetic resistance solution possess no national security risk and is considered as a critical component for the U.S. Department of War. We are one of the four companies worldwide that receive it within weeks. We are the only one with multiple products included. This designation removes the procurement barriers for U.S. federal buyers. It strengthens our position with the blue UAS market. It supports our U.S. manufacturing plan. So for the near terms, we believe it will accelerate existing customer procurement decision and facilitate new discussion with drone manufacturers that previously was hesitant to do business due to regulatory concern. In the long term, it will enhance Mobilicom's standing with the Department of War and increase awareness and perception of Mobilicom among global drone and robotics manufacturers worldwide. So I think that has immense important milestone for Mobilicom's success going forward.
And then if I can sneak in one more, if I can. I wanted to ask about the impact of the current situation with Iran. Obviously, the United States and Israel are engaged in combat operations there. And I know that you have to be very sensitive in terms of you generally don't disclose customers or operations. So let me ask this question more hypothetically. Hypothetically, if I was the prime minister of a small Middle Eastern country, you know, in combat operations, you know, with a larger country that was some distance away, how might I utilize Mobilicom's products or, you know, drones that incorporated Mobilicom components into those drones?
Very, I appreciate your sensitive question. We would like to say the following. We have contractual confidential obligation with all our defense customers and definitely with the government we are dealing with. And this is a standard practice in this industry. And we do not comment on specific operational deployments or theaters where the weapons are being carried or used. But what I can say is that our systems are in production with Tier 1 U.S. providers and Israeli Tier 1 drone and loitering kamikaze drone manufacturers, whose platforms are sold to the U.S. Department of Defense, to the Israeli Minister of Defense, to European allies and nations. Those platforms are being actively deployed right now as we speak to the soldiers. No more demos and testing. Those are real deployments into soldiers in those nations as we speak. The recent program of record that was won by, for example, the recent program of record that was won by our top tier U.S. partner is also heavily deployed with the U.S. Marines, which if you follow the news are usually the first to reach u.s war conflict area zones around the world so i don't want to say more than that but i think that i gave enough clues here the fcc by the way trusted drone designation specifically citing our role in u.s defense and national security program it also reflects the operational relevance of our technology to the defense community. So going backward to that, and the fact that we are defined as critical software, cyber, and hardware provider to US that receive this waiver immediately within weeks speaks volumes about that. We believe that the geopolitical urgency in the structural tailwinds of our business is in the tailwinds of our business. We believe that conflicts globally are demonstrating that drones without robust communication, without electronic warfare resistance, without cybersecurity that Mobilicom has, are rapidly neutralized. Therefore, that reality is driving the CSRMC mandate and the US ASD legislation and accelerating the procurement timeline for our customers and for Mobilicom products.
Did I answer that? that's a great answer i understand the sensitivity but you gave a lot of information you know working around that sensitivity so thank you very much and those are my questions thank you thank you barry thank you barry for the questions uh we have received a few more questions from investors uh the first one is can you provide an update on new customer wins over the past quarter particularly within U.S. and not to align defense programs and how these may translate into recurrent revenue?
So in the past six months, we had a few design wins across the globe. We have design wins with a European-German partner. We had a UAE, which is an important ally to the United States, design wins and purchase orders. We had design wins and purchase orders for an Indian ISR, Intelligence Surveillance Reconnaissance Platform. We had an Asian Tier 1 robotics partner that have consecutive orders. These wins follow a consistent pattern. There is an initial design win, then there is initial orders, and there is follow-on production orders that lead to platform expansion. So this is the pattern that we see. Recurring revenue dynamics, once embedded in production drone platform, our system generates reorders at each production run of those customers. One example is our Israeli Tier 1 or the U.S. Tier 1 that has placed multiple consecutive production orders over the last two years for the loitering munition and adds new platforms. So they not only produce more from quarter to quarter and place that into the hands of soldiers in different allies in the United States. and because of the nature of their larger ammunition, they also scale and add new platform to Mobilicom. So we've seen that happens with Mobilicom. The same is happening with our Asian tier one, for example, robotics partner is on their second order right now, which is twice the size of the previous order. This is not one-time project revenue. This is the beginning of platform embedded recurring demand. So we see sequence that is repeated by the Israeli T1s, the American top-tier player, the Asian top-tier players. So we anticipate that that will continue with the same partner for other partners that we have, which will eventually scale Mobilicom revenue, scale our business, and scale our market share across the software, the cyber, and hardware business.
Thank you. Another question received was, Following your participation in the recent program of record through the major U.S. defense contractors, what visibility do you have into additional program wins or expansions, and how should investors think about scaling revenues from these opportunities?
So I would like to say the following. Our top-tier U.S. customer, which won the program of record for the DOW just recently, is aiming for multiple additional programs of record with the Department of War and few additionals with allied nations. As we mentioned, we believe that program of record winners, as we mentioned and we can see in typical history, is that program of record winners typically secure more program of record from other corps of America and from allied nations. This creates a compounding multi-year revenue growth opportunity for Mobilicon. We estimate some of those wins could materialize in the coming year and two. So we anticipate those additional wins in the coming future. In addition, we have discussed in the past our Israeli-based Tier 1 customers that are addressing the U.S. programs of record as well that could be materialized in the coming year as well. So we have not one, but several tier ones that are progressing on several programs of record around the globe. Furthermore, I can say that based on our achievements in 2025 and the win of program of record and the scalability, other significant drone players in the United States are right now, right now under integration with Mobilicom. Those company platforms are already in production, and they already have delivery programs to the U.S. Department of War and their allied nations. So winning them and entering as a solution in their platform will open immediate delivery to other programs as well. So for revenue scaling, a program of record creates a five-year funded production program, and that can then be extended. If a second program of record or similar scale will be awarded, the combined revenue runway would materially change our cash flow positive timeline. We do not guide on specific POR probability, but we believe that our certified product portfolio, the field proven track record, The regulatory compliance position put us as a credible choice for additional programs to be won by our partners, and that will leverage and will promote Mobilicom significantly. So we have one, we anticipate more, and anyone more will just scale significantly Mobilicom progress and revenue generation and cash flow positive, obviously, and profitable company. And then the software per-unit licensing model will kick in that will even accelerate more the Mobilicom growth.
Thank you, Arne. Last question. As the business scales, how do you expect the mix between hardware and software revenue to evolve? And what implications does that have for the gross margins and long-term operating leverage?
I would like to start by saying that what we've seen in history in other revolutions, similar to the drones or robotics revolution or autonomy revolution we've seen here, that the business always started with hardware, but the long-term winners and the profitable companies came from the operating system, software, cyber side of business. Given that, we said that the hardware, which is lucrative solution based on IP that Mobilicum own, giving us a very lucrative, a significant gross margin to start with, which is the foot in the door. And then we are scaling and cross-selling the software and cybersecurity solution. So today, revenue is mainly hardware driven with software embedded as part of our end-to-end solutions. The gross margins of the hardware is 50% to 60%, reflecting a genuine IP value of our system. As software partnerships commercialized, like the iSuite, the OS3 licensing, the Secured Autonomy Framework, the partnership with Paladin AI Bundle Solution, all of those are per-unit licensing. per unit licensing, the software revenue layer growth is 80% to 90% growth margin. So the trajectory is that as those tier one customer move from design means to ramp up phase, hardware volume increase, simultaneously, the software and cybersecurity licensing per unit add their margin recurring software revenue, which then the mix of the, over time, we expect the software to represent an increased percentage of our total revenue, improving the blended gross margin and operating leverage. So I would like to say that the 50 to 60 percent hardware margin, which is very steep and high, by the way, is only the floor, but not the ceiling to where we can get. And if you add to that the ROIC, the return on investment capital, That's the magic of Mobilicom in comparison to all the other peers, because then we have a lucrative business that needs very little capital investment to scale 10 times, but we have the benefits of the high gross margin and the software and cyber gross margin that bring most of our revenue and gross margin to the bottom line. And that's the magic of Mobilicom.
Thank you, Oren. due to the interest of time we have no time for other questions but we will be glad if you could send us by email with the irmobilicom.com contact and we will do our best to answer every question that you didn't succeed to do today we want to thank everyone for joining Mobilicom 2025 annual earning calls and remind everyone that this webinar was recorded and we presented in our AI website under news and media section. Thank you very much to everyone and goodbye.