KULR Technology Group reported significant growth in its third-quarter earnings for 2026, with revenue soaring 197% year-over-year to $7.4 million amid increased product shipments. However, the company is facing challenges with low profit margins and widening operating losses.
Product sales contributed to the surge, totaling $6.5 million and representing 88% of overall revenue. KULR shipped products to 22 customers, up from 18 in the same period the previous year. Despite the revenue growth, the company reported a gross margin of approximately 4%, down from 17% a year ago, and an operating loss that worsened to $11 million from $8.7 million.
CEO Michael Mo stated that while the quarter laid a foundation for future growth, it did not signify a full turnaround for the company. He emphasized the need for improved margins, reduced costs, and decreased losses. “Our margin is not where the business needs to run, our costs are too high, and our losses have to come down,” Mo said.
Despite an overall net income of $4.5 million for the quarter, this figure was primarily attributed to a $15.8 million increase in the value of Bitcoin rather than operations. The company has since exited its Bitcoin investments and ended the quarter with $54.5 million in cash, no debt, and $64.4 million in working capital.
KULR is narrowing its focus to key areas, including autonomous systems, energy storage, and space, alongside implementing cost-saving measures. The company anticipates these changes will generate approximately $4 million in annualized savings starting in 2027.
CFO Mike Kimel explained that initial orders for KULR ONE Max energy storage systems were priced to secure long-term contracts, which led to lower margins. Additionally, the company is undergoing a reduction in workforce and is reassessing professional services and administrative expenses for further savings.
Third-quarter operating expenses totaled $11.3 million, with about $5 million allocated for research and development, which has increased from $2.3 million a year prior. Mo mentioned that R&D spending is expected to decline as production lines are completed and certain projects wrap up.
The company has recently begun leveraging two AI-based systems designed to enhance operational efficiency without reverting to previous staffing levels. KULR recently opened its new facility, Forge 2, in Texas, which has begun producing battery systems for its clients.
Moving forward, KULR is focusing on enhancing production efficiency and controlling costs while diversifying its offerings in target markets. The company is also preparing for increased shipments of KULR ONE Max products, particularly for energy storage needs in Japan.
