SKYX Platforms Corp.(SKYX)Q4 2025 法說會逐字稿

Good day, and welcome to SKYX Platform's Fourth Quarter 2025 Earnings Conference Call. Before we begin, I would like to remind everyone that statements made during this conference call that are not historical facts are forward-looking statements. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Forward-looking statements may include, but are not limited to, statements regarding our anticipated financial performance, growth strategy, market opportunities, product development, commercialization efforts, regulatory developments and expected future events. Additional risks and uncertainties are described in the company's filings with the U.S. Securities and Exchange Commission, including the most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. We undertake no obligation to update any forward-looking statements, except as required by applicable law. Please note, this event is being recorded. I would now like to turn the conference over to Ran Kohen, Founder and Executive Chairman. Please go ahead.

Good afternoon. Thank you for joining us, SKYX Platforms. We will give you today an overview starting with our President, Steve Schmidt, and then moving forward to our CEO, Lenny Sokolow. Steve, please go ahead. Thank you.

Great. Ran, thank you very much, and it's great to be with you here this afternoon. Let me start with, as we've mentioned and most industry experts know, the lighting and home decor markets, along with new homebuilding, have been in decline for the past few years. But despite this, SKYX, through our technology and versatility of products, continues to grow. And so let's talk about the growth that we continue to demonstrate. First, on the financial side. We are reporting another record quarter revenue with $25 million in Q4, demonstrating eight consecutive quarters of year-over-year growth with annual record revenue of $92 million in 2025 compared to $86 million in 2024 as we continue to grow our market penetration. Gross profit increased to $28 million in 2025 compared to $25 million in 2024, representing a $3 million or 13% increase. Operating cash used in 2025 amounted to $13 million compared to $18 million in 2024, representing a $5 million or 27% reduction in cash used in operating activities. And as we've announced prior, we have raised $29 million in Q1 2026 through investments from fundamental institutions. Now on the business front, a lot of initiatives and a lot of key things to report. We announced collaboration with NVIDIA AI Ecosystem Connect program, which will grow our collaboration with NVIDIA into future smart home projects. We announced the launch of our advanced SKYFAN and Turbo Heater on our e-commerce platform across 60 websites, 1stoplighting.com and U.S. leading retailers, including Home Depot, Target, Lowe's and Walmart. Based on the growing sales of our patented Turbo Heater Fan, SKYX is expanding the category of all-season ceiling fan heat-in-winter and cool-in-summer, which will result in additional products in new designs and larger sizes. Next, we expect to continue to grow all of this in 2026 to advance our path to becoming cash flow positive. As we have mentioned in prior calls, we're very excited about the hotel and building area, and we hope to share more on this in the next few quarters. Our enhanced safety code standardization team continues its progress towards its goal of a safety mandatory standardization in homes and buildings of its life-saving ceiling outlet receptacle technology. Next, we expect to supply our advanced and smart home technologies to upcoming and future key projects in the U.S. and globally, including in New York, a North Carolina smart home community, Austin, Texas, San Antonio, Texas, South Florida, including Miami, the new $4 billion smart city, Saudi Arabia, Egypt, among other areas. Next, we expect to deploy over 1 million units of our advanced and smart home plug-and-play technologies during the course of these projects. We continue to grow our market penetration and expect to deploy over 100,000 of our products into homes and units by the end of 2026 through the Retail and Pro segments. Our technology expansion provides additional opportunities for future recurring revenues through interchangeability, upgrades, AI services, monitoring, subscriptions and more. Finally, we'll be launching a new AI-driven software in 2026 for our e-commerce platform of 60 websites, which is expected to increase our conversion rate in sales up to 30%. So a lot of progress on all fronts and a lot more to come. So with that, let me turn the call over to our CEO, Len Sokolow, who will give you more clarity on the financials and other business details. Len, over to you.

Great. Thank you very much, Steve. Appreciate it. So we're very encouraged. As Steve mentioned, we've had growth in revenues—eight consecutive quarters year-over-year—and over the last three years we've had three years of consecutive growth in annual revenues. And again, to reiterate, all while the building, lighting and home decor markets have been in a significant slowdown in these past years. Our revenues increased to $92 million from $86 million. Our gross profit increased to $28 million from $25 million, and our gross margin increased 2 percentage points to 30% from 28%. We're very focused and highly focused on all of these financial metrics and expect further improvements in 2026 and beyond. We're further encouraged by the indications and customer feedback on our Turbo Heater Fan and the fact that we are creating a new category of all-season fans. This is a new category that's important to understand, and this category is a precursor to the additional category of our all-in-one smart home platform and hub, which we expect to launch beginning in Q3 2026. All in all, this will be our third new category based on our plug-and-play razor-and-blade model. The concept of our plug-and-play and razor-and-blade model is now proving that the categories we're creating are impactful, have tremendous potential and many opportunities. The lighting all-season ceiling fans and our all-in-one platform and hub reflect this. We're well funded to accelerate our growth. So with that, if I could turn it back to Ran.

Yes. Thank you, Lenny. As Steve and Lenny mentioned, we are in a slow new-build lighting and home decor market. We're expanding based on our unique technologies and versatility of products in our e-commerce platform. In the past 10 months, we've shown significant growth in the Builder segment. We expect and hope to keep growing the Builder segment, and we hope we can share more on this in the near future. Very important also, we strongly believe that we add significant value for hotel renovations. With our technology, you can renovate a hotel in the electrical lighting segment in a few days rather than a few months. We demonstrated that case during the Marriott renovation demo. We had an investment of $16.5 million led by the Shaner Group that owns 80 hotels with over 60 Marriotts. Our goal is to grow in this hotel segment. As Steve mentioned, we're progressing there, and we hope to share more in the near future. We're also excited about starting to work with NVIDIA. We hope we can elaborate more on this, and we're getting great reaction to our all-in-one smart platform and hub. It solves many problems in one solution. As Lenny mentioned, we hope to start production and launch it around mid-2026 to Q3 2026. We are making progress on all fronts. Again, it's a razor-and-blade model. Sometimes we'll supply the razors before the blades. Obviously, the blades provide more revenue than the razor, but the razor sets the stage. If Tesla had to put billions of dollars of charging stations, thankfully it doesn't cost us that much to put our razors out there. It's a program and a model that we believe is working well and will work even better. As Lenny said, it opens the door to create new categories like the lighting categories, now the ceiling fans and the heater—an all-season ceiling fan that provides a solution for both winter and summer. We're happy with the indications and the first sales we had, and we're growing nicely. Now it's already March and it's getting warm, but we still see nice sales. We expect to grow this category significantly, add designs and add different sizes based on feedback and demand. We currently have the 24-inch that we launched. We expect to have the same version in 30-inch based on demand, and we expect to come with other designs that will provide totally different looks, more powerful for larger homes and rooms and up to 60 inches in some models that we hope to share and launch soon. With that being said, I will turn to Q&A. We have Jacob Stephan here with us from Lake Street. Jacob, please go ahead.

Just first, in the press release, you talked about a significant, prominent leader in the safety code standardization timeline. I'm wondering if you could touch on that a little bit. What kind of specific milestones remain to achieve overall standardization?

Yes. We're happy to do so. As we all know, leading our code division is Mark Earley, who is the former Head of the National Electrical Code and Chief Engineer of the National Fire Protection Association; he helped write the code books for 33 years in America regarding electrical safety. Joining him a couple of years ago is Eric Jacobson, the former President and CEO of the American Lighting Association. Those are great leaders to have on our team. We're progressing nicely with the 10 votes we already got in the National Electrical Code and the historical vote by ANSI and NEMA that specified our receptacle specifications as the standard. As we said, we're one step away from mandatory adoption. In addition, we recently had a very senior member join our team who is trying to help us move it through additional channels. There are several safety organizations in the U.S. established over the past 50 to 100 years with criteria focused on saving lives, mitigating injuries and reducing property damage. Some are independent and nonprofit; some are part of the government and receive budgets to find technologies like ours with life-safety aspects and bring them to fruition. To remind everyone, there are approximately 500 million installations annually in the U.S. where people risk their lives to go on ladders, touch electrical wires, and falls from ladders happen, especially when people are carrying obstacles or making unstable movements. We're encouraged about this opportunity. We have engaged a very senior member to help us work with government safety organizations. Creating safety is key, and that will also enhance product growth. Everything can be made here in the U.S. and our technology can be fully automated here, so there's no labor factor. Therefore, it's not only saving lives, it's enhancing the economy and creating many jobs. We have people who strongly believe we can expedite this through other agencies. I know you like detailed information, so I hope that covers it.

Yes. No, I appreciate it. Very helpful. So I guess when you look at the path to cash flow positive that you guys are discussing, looking at the cash operating expenditure line, it looks like $13 million of operating cash use on an annual basis, or is that quarterly? Assuming 30% gross margins, is a good quarterly revenue number that gets you to cash flow breakeven around $35 million, if I'm backing into the numbers correctly?

I want to be careful with the numbers and not make a mistake here, but we are launching a few products, including the Turbo Heater Fans, and we have some large box orders. We already started working with Home Depot, Target, Lowe's and Walmart, and we expect to expand into other channels. If we land one SKU in a big-box retail chain, that can be a game changer toward accelerating our path to cash flow positive. Meanwhile, as we're launching the new AI-driven software on our e-commerce platform, it helps increase conversion rates. I would say we already converted about 15% of our sites to that new software and we are seeing results, including increases in conversion and, in some cases, gross margin. We have several levers we are considering and expect to launch additional products this year that will enhance our position. I want to be careful giving a precise quarterly number, but I believe the required quarterly revenue to breakeven could be lower than $35 million because we are blending in more products with higher gross margins and doing joint ventures announced last year that provide much higher gross margins. That's why you saw the gross margin jump from 28% to 30%. We're focused on continuing that path. If one of the products we launch lands in the right order, it can create a spike that turns our burn into cash flow positive.

Okay. Very helpful. Just one last quick one. Regarding the hotel channel, that's an exciting opportunity for you. From an actual improvement standpoint, how interest-rate sensitive is that market? I imagine the builds are financed. Any color on that?

You're talking about the high interest-rate effect. I'm sure our product's time-saving aspect is particularly valuable in the hotel segment. Time savings create major labor cost savings, and we've had great reaction from that segment. They haven't specifically told us that interest rates are affecting their decisions related to our products, but the time-saving element provides significant cost reduction on labor, which is expensive in hotels since labor is paid by the hour. So I don't think high interest rates hurt us, but I haven't heard anyone specifically tie their decision to our products to interest-rate concerns.

I appreciate it, guys. Congrats on a good year here.

Thank you. We have Barry Sine from Litchfield. Barry?

A couple of questions, if you don't mind. First, could you give us a rough breakdown: how much of the revenue in 2025 came from smart plug-related products, and how much from traditional lighting fixtures across all the websites you have?

Obviously, over 90% of our business is still legacy business, but we're growing month-to-month and day-to-day with our plug-and-play products. We didn't publish a specific split, but the growth curve is a hockey-stick. As we said, we hope to get up to or maybe over 100,000 of our products into homes by the end of this year. We expect that the smart plug percentage will continue to grow, and that's the path we're on. The legacy business remains the majority today.

You've announced a number of major construction projects, either in new housing or hotels. I'm having trouble keeping track of them. Could you recap how many major projects you're going into now? How many units would that be? And where are we in terms of construction— which ones are actually ready to start taking smart plug products?

We announced around 12 projects in the past 10 months. The largest is the smart city project originally announced as $3 billion and now $4 billion in Miami. They have started site work there, and we hope to start supplying some product toward the end of the year. There are other projects in South Florida. There's a Saudi project through a joint venture with a U.S. group that could be a significant number of units; we hope that will start toward the end of this year in some capacity and could include hotels, buildings and homes. We also announced projects in Texas, including Austin and San Antonio; Austin we hope to start supplying very soon, San Antonio perhaps in the second half of this year or maybe second quarter depending on construction schedules. We also announced a New York project that we believe will be supplied very soon. In general, we anticipate around one million products overall across the projects we announced during the course of these projects; that's our estimate and subject to change but it is a rough estimate based on the projects.

That's fantastic. So given the visibility on all of those projects, you said a minute ago that smart plugs are about 10% of your revenue. It sounds like that's going to increase dramatically this year, with positive implications for margins. The financial outlook for 2026 looks very different than 2025. Is that a fair characterization?

That's definitely our goal. Right now, over 90% of the business is legacy, but getting to 10% or more for smart products is very feasible and probably achievable given the path we're on. We expect the percentage to continue to increase and that will have a positive effect on margins and the financial outlook for 2026.

Okay. And my last question: in the press release, on the second page there's a bullet about insurance companies. You have several ways to drive mandatory usage of your products and one would be through insurance companies mandating usage. The release said you would expect this to happen once you complete an entire range of advanced plug-and-play products. What is your timeline to complete the entire range of smart plug products?

We're close—I'd say about 80% complete. There are already discussions on this segment. The all-in-one smart hub platform with integrated smoke detectors, seal detectors, emergency lights, 911-calling aspects and more has generated significant excitement. We might start working with insurance companies even before the full platform is released, but it's definitely a play we are pursuing. An insurance company could spec our solution and that can accelerate adoption even faster than regulatory mandatory adoption. We're working on that angle and hope to be more open about developments in the very near future.

Those are my questions. Really making great progress.

Thank you. We have Patrick McCann. Pat, how are you?

I was curious about the Smart Heater Fan. From your press releases and so forth, I believe it didn't hit the market for the majority of Q4, so it wasn't able to have the full effect on your results. I know it was expected to be a fairly significant catalyst toward breaking even on operating cash flow. How is that going so far in Q1? How much will that affect your path to cash flow positive here in Q1, especially since Q1 is largely winter months where there would be demand for something like that? Is it being well received? Is it meeting expectations now that it's been to market for a bit?

Yes. We're seeing great signs and indications. We're working to expand the category. We're getting feedback that some people want larger versions—customers asked for 30-inch when the current product is 24-inch, and other demands for much larger projects with 54-inch or 60-inch designs. We have a great reception and are confident. Ceiling fans are mainly a summer product, though they sell year-round; peak is typically summer. What we're seeing now is encouraging: although it's March and typically slower for heaters, because it's an all-season product, we are seeing good sales in March as well. We started late; we sold a few units in Q4 and more in Q1, and we're bringing additional products. We believe eventually this product will be a main catalyst for turning us to cash flow positive. The signs look good. I don't want to provide exact timing on cash-flow, but we strongly believe this will be a main catalyst toward that path.

And then my other question regarding big-box retailers like Home Depot and Walmart: could you clarify the current situation between having the slate of products on their websites versus availability in store? Which products are widely available in-store or in many locations?

As mentioned previously, with Home Depot we have a branded SKY Plug page, which allows us to present many products in that channel. Many big-box retailers rely on online signals to decide what to carry in stores. Online lets you present multiple colors and variations—brushed nickel, chrome, black, gold—and the winning color signals guide in-store assortments. So initially we launched products online. We are in discussions on which colors and SKUs will go into stores. We're talking to several big-box retailers; some are public, some not yet announced. We feel confident we will start landing products in stores. Once products are in stores, that can be game-changing in volume. Online continues to grow and builders often buy online, but a single in-store order for a fan color can be material for us. We're working on it and expect to share more in the near future. Okay. Thank you very much for everyone here. I appreciate your time and questions. Steve, anything else?

We covered it.

We covered it. Thank you all for joining. We look forward to our next call. It should be exciting with our path here, and it's actually just a couple of months from now, even less. Looking forward to talking to all of you soon, and thank you for your time.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.