Hey everyone, this is Kenny Coins with Marathon Money and we're back. And so many people have been asking me since the stock went up on June 2nd to like $33. You know, the first time we had this show, it was at 11 bucks. A lot of great things happened between April and July. You know, today is July 7th and I'm really, really happy about how the stock's been moving since we brought Alan on the show. The first thing I want to say, and I just want to review some of the things that happened between April, the motor factory capacity doubled. And is that Alan, am I correct on that?
Yeah, I mean, not overnight, right? We brought in more people and more machines, but we're basically at double what we were pretty much now versus the start of the quarter.
Upgrade Energy acquisition, you know what I mean? You signed on a 52 million plus another 26 million earn out. How is that going? That upgraded on May 11th.
No, that's going great, actually. 10 people from our team are over there now working on integration with them. We're helping them hire so that everybody comes on board when they come on board and just working to close. And also announced, we added another almost 15,000 square feet in Orlando to also do batteries.
Man, that's amazing. Can you elaborate what they're going to bring to the business?
Yeah, batteries are another really important product for drones. And if you think about right now with defense, a lot of it is one way. So, you only need one or two batteries per drone. But when you start to think about delivery or domestic or anything like that, it's more like five to 10 batteries per drone. So, when you really look at what the FAA is doing and, you know, not only is the defense segment big, but really then the domestic segment, I think batteries are going to be about 50% of the TAM for the domestic segment. So, starting to really get up to speed, be sure we're reliable there, get all of that working, provide American-made batteries for the warfighter, and then ultimately American-made batteries for delivery companies or whoever replaces DJI. So, it takes time. You know, it takes time to get factories up and running and quality good and everything else. So, we're just trying to go as fast as we can to be ready.
And because I see, because when you guys added the acquisition, that pretty much going to put you guys in the playing field you guys want to be in. That's going to give you guys a bigger web, a longer life to stretch. Is that how I'm seeing it? Because you now have a company that already knows how to do this.
Yeah, so they're really good. We've been working with them for a long time selling their batteries through anyway. So, we've already made a lot of our stuff work together. Our initial goal as a company a couple of years ago when we set out was to first do the whole powertrain. All the way from the batteries through the motors because that whole thing, if it doesn't work well together, you don't get the best performance. But also, if it doesn't work well together, the drone falls out of the sky. So, we think if we have the whole powertrain platform, we get really good at that and pair it all, then you know, as drones are delivering pizzas or burritos or whatever, you can be sure that the core propulsion engine isn't going to cause it to fall out of the sky. And then you can build the AI and the cameras and everything on top of that. So, we're really interested in that basic propulsion layer and being a primary parts provider for that. And getting to the quality and the scale and everything that where we're good enough where then a lot of other companies can use that as a starting point for all the awesome stuff they do.
So, can we talk about like quarter one earnings that came out in May, you know what I mean, and let's talk about quarter one 2025. That was 2 million in revenue. Quarter one of 2026 and 8.1 million in revenue. So, those numbers are correct. Yeah, that is a 300% plus growth. What would you say like under your leadership like what was done differently to make up that gap? In one year.
You know, what you see is the market turned on with drone dominance and a lot of the other actions a little more than a year ago with government buys. And so we really have migrated from being a primary retail store to being an enterprise sales channel. And we just started building capacity ahead of that and now we're there. And then I think what we did was really smart. Last August September we built our whole leadership layer. You know, and some people started a little later, but we really have good senior leadership team that's been able to scale and continues to scale to let us build into this as the market opportunity has shown up.
Oh, I can't hear you. You're muted, Kenny. I apologize. No, I definitely then. I definitely seen that. You know, Trump came out. That's kind of what like segue to my next question. You know, Trump's administration came out with the funding discussing like drones and drone warfare. And then that's kind of when your stock kind of like started really skyrocketing up because I know in the last interview there is that BRIC program funding happening in August and September that we spoke about. Can you elaborate on the funding and the president and the administration being behind all this?
Yeah, and I would say it's even bigger than just the administration. Like this is a bipartisan supported thing in Congress. So it doesn't even matter what side of the table you sit on. Everybody is sort of pro robotics, pro automation, pro drones inside the Defense Department. So I just want people to be sure to at least recognize it's not as partisan as some of the other items are. What you saw was last year some of the programs like the drone dominance program and the NDAA, the budget for defense really starting last October had the first chunk of money to do drones and counter drones. And you see it really coming up now that they're talking about the budget for next year, the NDAA for next year. They're talking about a lot more money for DOG, which is the autonomous warfare group. They just recently appointed somebody at a very senior level in the DoD to oversee all autonomous systems including drones. So they're really starting to look at this as a whole category that's much bigger and starting to drive government purchases into the category across all size classes. And as part of that, those customers that are selling drones and other systems into the defense department or the Department of War, depending on your nomenclature of choice, they need domestic parts now. And so we're seeing that like snowball demand where government budgets are a big slow-moving machine and they're really now moving more and more toward drones and robotics. And we're seeing that reach downhill to us as a component supplier in a very meaningful way.
You know, I was thinking when you talk about like what the whole, you know, US is doing, definitely with the military, definitely with Congress, I'm thinking about like is that also going to be in R&D where you guys going to take some of that money you guys will be receiving because I know you guys are just the kind of like I don't want to say the middleman, but you guys are kind of like the Nvidia. You know what I mean? It doesn't matter who win, you guys are supplying it. And that's one of the I think a lot of retail investors, investors in general, institutional investors really like because then you don't really lose. Now, actually don't lose at all, because it doesn't matter you don't need to be on the side of table. You just kind of just need to supply the product for those individuals that win or do even if some of them don't win, they still need the product. You still are supplying it. And I think that as that makes you a lot bigger, which leads into my next and a lot of institutional firms are now saying your stock is worth $40, $50, $60. And from the leadership standpoint, how does that make you feel? And but also just personally, but like business-wise, like what fundamentals do you see that maybe retail investors are not seeing and they're missing out?
I'm from a leadership perspective, it's a lot of pressure. So, you know, I take it very seriously. I think everybody in our company does. What we're seeing is a weird market dynamic that it doesn't happen very often, which is everything from China got kicked out. So, you don't have to make the market. Like we don't really have to advertise. We don't have to put a ton of money into knocking on doors to drive incoming sales. So many drone companies know what kind of motors they want. They know what kind of components they want. They know what they want for batteries. And now they have to find different vendors. And so what we have is this opportunity if we keep scaling not just production, but improve quality, get our systems right, get procurement right. Like do all the things to become a big boy as a company really fast. And that's hard. So, I'm not dismissing that challenge. If we can do that, then there's a defense and domestic demand for billions of dollars worth of parts today. You know, I think if we were producing $500 million worth of parts at the same level volume, consistency, quality that the Chinese vendors were that we would sell them all. And so we're just trying to get up that ladder as fast as we can without falling down. And that I think that's where a lot of people are looking forward and saying, 'Hey, we think Unusual Machines is well positioned. They haven't screwed it up yet. They're less likely to screw it up. In a few years, if they can keep growing at this rate, you know, where are we going to be? Like imagine we can hit another 300X. Right? Then we'll record a 1B next year. It'd be pretty good. We'd be starting to get there. But then we'd probably have to do another 300X after that. You know, and once you're there, like if we can get there, we'd be at a 100 million a year run rate. Okay, we're getting into it. If we can do that again, now you're looking at fractional billion run rate. And so I think really the upside and the downside with the enthusiasm around our share price for lack of a better is that there is pressure to continue growing at this pace operationally without breaking, but there's also the resources and the excitement and the awareness to do it. So the whole it's kind of the whole world being like, 'Well, you started doing it, so we believe you can do it.'
And now on your side. Yeah. We're on your side now. Now perform.
Exactly. Exactly. And so it's really exciting that people care, but it's also Woo. All right. You know, but do full send. Yeah. So but yeah, go ahead. The most exciting thing for me is everybody who owns our stock who's there, who's it's a mandate from ownership to go after it. And that's really empowering. It lets us go after it. It lets us do stuff like the $70 million material order. Right? Because we can't build stuff if we don't have our raw materials. So, we ordered $70 million worth of raw material because it takes about 6 months to get in before the factories are even ready to consume it. Like, that's a pretty aggressive move.
Yeah, that is a pretty aggressive move. Just to change the topic. So, you know, you made that move. You know, the management at Drone Markets currently supply and manage expected to exceed supply through Q3. This is not widely known through like Reddit or Reddit channel had to like tell. But, I feel like that's like kind of your biggest tailwind. So, like, is customers like really waiting in line for this?
Yeah, there's just not a lot of good options, right? And honestly, I wish we could sell more stuff faster to everybody. We like we're just about as fast as we can make things and validate that they're quality and get them done, they're going out the door. And, you know, everybody's trying to figure it out. There's a whole lot of rapid scaling headache across the entire industry, including with us, right? And you're really starting to see it and people are adapting to it and I think the push from the current administration coupled with where the markets are at and how much they believe and value this segment, you're seeing people that are solving problems in a way that's much faster than this would have ever been done through traditional procurement. So, I think while it's messy and aggressive and fast and really hard, it's also working. And I think that is the really fascinating part of all this, right? Like, we're being more aggressive, our customers are being more aggressive, we're making more drones faster, more parts faster, onshoring faster than we would have any other way.
Man, that's amazing. That's amazing. I do want to talk to you about one of your, you know, people that you promoted or your team promoted, chief revenue officer, Stacey Wright, who, you know, transferred another company from 1.7 billion revenue to like 2 million quarterly revenue, and then she's the one that made the whole PWD happen, the 3.75 million. Like, how is that like your secret weapon?
Yeah, our whole staff is a secret weapon. Stacey's great. Like, she drew our COO, Tyler, who we recently promoted to VP, as our chief product. Everybody involved cares so much about the customer being successful, about quality, about what we're doing that you know, it's not a 40-hour workweek. Right? Like, it's answering the phone on the weekend. It's solving the problem. It's going above and beyond. And it's doing it not to like get the sale, but to solve the problem. It's doing it with human connection and really caring. And she's been incredible and is building out her team and does a great job. So, you know, and she actually is the opposite of a traditional sales problem. She doesn't have to go out there and get someone to buy. She has to like manage an overwhelming amount of demand, set allocation, be sure people's expectations are met, take in feedback because we're growing up on what we're doing good and bad. And we get mostly the feedback on what we're doing bad. Just, you know, that's human nature. And then distribute that across the company so we can improve really quickly. And she's been doing just an incredible job. So, yeah, really excited.
Yeah, you know what I mean? I read a lot, definitely the stuff you guys got going on, and try to read through your 10-K, try to read through the stuff that you put out there, or you know, try to find like things that most people wouldn't know. And you know, I heard that she came from another company, did extremely well, came over here, brought things over to you guys, managing a lot. So, like I feel like it's one of like you guys know it seems like you guys know how to build a good team. And that's very important for any business.
Yeah, you know, we all get along, right? So, we're a collaborative culture. We're not here to tear somebody down or throw blame on anyone else. Like, basically, we're you know, everybody knows I tell everybody, you know, 20% of our decisions are going to be wrong. Like we're going too fast for that not to be true. And the second you're not willing to be wrong and just own it and everybody collectively help you move on, then you're not willing to be aggressive enough to win in the current marketplace. And so, when that's true and everybody's sort of on a team together, everybody puts in the work. It's been really cool. But just to see that and see everyone step up and then not try to tear other people down for their own good. It's one heck of a team.
It is. It is. I see that. You guys are doing very well. I do want to talk about the defensive dollar. And then if some of the things you can't say because everybody should know SEC. But you know, Unusual Machines expected like component opportunity 90 million in 2026. And it kind of jumps high in 2027 for 250 million dollars. These numbers are formed from company guidance. It's not really well known out there, but this is just something I picked up by reading. Can you, am I wrong or can you elaborate?
