Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 81

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 81
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    $5,289  
    $(16,129) 
     (305)%
  
    Income tax benefit (provision) 
    $5  
    $(16) 
    $21  
     (131)%
  
    Net loss 
    $(47,176) 
    $(21,747) 
    $(25,429) 
     117%

    *
    Amounts used to calculate
    dollar and percentage changes are based on numbers in the thousands. Accordingly, calculations in this item, which may be rounded
    to the nearest hundred thousand, may not produce the same results.

Revenues

The revenue amount for the
periods presented represents the results of the revenue-generating Industrial IoT segment. Revenues for the nine months ended September 30,
2025 were $3.6 million compared to $2.2 million for the comparable period in the prior year for an increase of approximately $1.4 million.
The increase was primarily attributable to a $0.9 million increase in hardware revenue related to the Company’s IoT business, resulting
from improved supply chain conditions. These improvements followed the resolution of disruptions caused by regional conflict in the Middle
East, which had impacted operations of the Company’s Israeli supplier and resulted in delays in hardware product deliveries during
the first half of 2025. In addition, we communicated our plan to explore our strategic options to wind down and/or sell the hardware
portions of our Industrial IoT business to our customers which resulted in customers increasing their hardware purchases, and as a result,
we do not expect this trend to continue. In addition, recurring software revenue increased by $0.4 million due to existing IoT customers
adding new locations to their contracts.

45

Cost of Revenues and Gross Profit

Cost of revenues for the nine
months ended September 30, 2025 was $1.7 million compared to $0.8 million for the comparable period in the prior year.

Gross profit for the nine
months ended September 30, 2025 and 2024 was $1.9 million and $1.3 million, respectively. The gross margin percentage was 53% and
61% for the nine months ended September 30, 2025 and 2024, respectively. The margin decrease is due primarily to a shift in sales mix
to lower margin hardware products during the first nine months of 2025.

Operating Expenses

Operating expenses for the
nine months ended September 30