Unusual Machines reports Q3 2026 revenue of $13.9 million

Item 2.02. Results of Operations and Financial

Condition.

On November 5, 2026, Unusual Machines, Inc. (the "Company") issued a shareholder letter announcing its financial results for the third quarter ended September 30, 2026. A copy of the shareholder letter is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference .¹

The information contained in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. Furthermore, the information contained in this Item 2.02 or Exhibit 99.1 shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing .

Item 9.01. Financial

Statements and Exhibits.

(d) Exhibits

Exhibit No.

Exhibit

99.1

Shareholder Letter dated November 5, 2026 (furnished herewith)

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Unusual Machines, Inc.

Date: November 5, 2026

By:

/s/ Brian Hoff

Name:

Brian Hoff

Title:

Chief Financial Officer

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SHAREHOLDER LETTER DATED NOVEMBER 5, 2026

Exhibit 99.1

Unusual Machines Third Quarter 2026 Shareholder Letter

Revenue Increases 551% Year Over Year as Company Expands U.S. Manufacturing

Capacity and Strengthens Position for 2027

Conference call today at 4:30 p.m. ET

ORLANDO, FLORIDA / ACCESS Newswire / November 5, 2026 / **Unusual Machines

(NYSE American: UMAC) ("Unusual Machines" or the "Company"), a leading provider of NDAA-compliant drone components, today announced it filed its Form 10-Q with the U.S. Securities and Exchange Commission for the third quarter ended September 30, 2026, and provided the following letter to its shareholders from CEO Allan Evans.

Dear Shareholders,

This shareholder letter follows the completion of our third quarter of 2026.

During the quarter, we executed our plan on schedule, and our continued growth is reflected in the following details.

In the third quarter, we generated $13.9 million in revenue, reflecting 551% year-over-year growth compared to the third quarter of 2025.² This represents a 17% quarter-over-quarter decrease, but was still at the high end of our revenue targets. This resulted from investment in foundational work to support future growth. Those growth drivers included installing more capital equipment to improve motor throughput and margins, investing in growing Upgrade Energy's business prior to closing and scaling its operations, and building out new additive manufacturing production capacity. All three of these initiatives are well underway, and we expect they will contribute meaningful revenue in the fourth quarter of 2026 and throughout 2027. This type of growth can put pressure on gross margins. Despite this, we maintained our margins, finishing the quarter at 35.4%.⁴

The work our team did with Upgrade Energy (prior to closing) is one example of growth not fully reflected in our recognized revenue. During the first half of 2026, Upgrade Energy generated about $3.37 million in revenue. At the start of the third quarter, our team began working with their team to scale, helping their workforce grow from 24 to 49 employees. That expansion helped support Upgrade's third-quarter revenue of $3.32 million, nearly matching the $3.37 million generated during the entire first half of the year.

Our financial results reflect our continued effort to grow operations, meet demand, and build capacity for future growth. In Q3 2026, we grew from 240 to 276 employees. This capacity growth continues, with our total headcount growing to 325 employees after the close of the Upgrade Energy acquisition. We made approximately $3.0 million in equipment purchases in the third quarter.^{7 7}Our inventory and prepaid inventory increased from $42.4 million at the end of the second quarter to $65.9 million at the end of the third quarter⁷, while finished goods only increased from $4.4 million to $9.3 million. Our accounts receivable increased from $9.3 million to $18.7 million. These are all strong indicators of operational growth, positioning us for future revenue growth.

It is easy to overlook the positives when the quarter's net loss was $25 million.^{3 3}This loss is almost entirely driven by non-cash items, including an unrealized loss on short-term investments of $18.4 million and stock compensation expense of $5.5 million.³ While I believe GAAP results may partially obfuscate actual financial performance, we remain on track with an adjusted EBITDA loss of approximately $0.7 million for the quarter.⁵ See the discussion of Non-GAAP Financial

Measures and Table 2 below. I am extremely encouraged by our relatively small adjusted EBITDA loss in a quarter where revenue does not yet reflect the benefits of our ongoing investments in growth. I continue to believe that Unusual Machines can achieve positive adjusted

EBITDA in 2027 without compromising our growth plans.

This financial goal has become more important as the macroeconomic environment for domestic drone companies is changing. We recognize that the entire segment is now trading at lower revenue multiples than it was a few months ago, making it more challenging, and less desirable, for both private and public companies to raise capital. This change is no surprise, as it occurs across maturing industries. It will require us to shift from an external investment mindset to an approach focused on reinvesting internally generated gains to drive growth until we scale substantially or the marketplace undergoes meaningful change. Our capital position and financial discipline allow us to continue growing, while the challenging financial environment may also create high-value strategic opportunities in the next year.

We want to provide additional context around our financial results and the scaling of Unusual Machines as we continue to execute during this growth phase.

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Operations Update

Our workforce expansion continues. Headcount grew from 240 employees at the end of the second quarter of 2026 to 276 at the end of the third quarter of 2026.⁶ As of today, the Company has grown to more than 340 employees, and we are continuing to expand and scale production.

Demand is not driven by a single product. We are adding shifts and increasing capacity across all our facilities. We have also added batteries through the Upgrade Energy acquisition and have begun expanding into additive manufacturing. Our single best-selling product accounted for approximately 19% of our revenue. This mix