Q2 2026 Knightscope Inc Earnings Call

Speaker #1: Ready. Executive Vice President and Chief Financial Officer. And I'm joined by William Santana Lee, founder, chairman, and Chief Executive Officer. By now you should have had a chance to review our second quarter 2026 earnings release.

Speaker #1: Which was published at 1:05 PM Pacific Time just after markets close. Before we begin, please note that today's discussion contains overlooking statements within the meaning of the private securities litigation reform act.

Speaker #1: Of 1995. Including statements regarding our goals, growth, prospects, product roadmap, and outlook. Actual results may differ; materially, due to the risks and uncertainties described under risk factors in our most recent annual report on Form 10-K, as as updated by our other SEC filings.

Speaker #1: Forward-looking statements speak only as of today. And we undertake no obligation to update them except as required by law. With that, it is my pleasure to turn this call over to Bill.

Speaker #2: Thank you, Apoorv, and good afternoon, everyone. Thank you for spending part of your day with us. I'm going to start with the business and marketing highlights from the second quarter.

Speaker #2: What we won, what we built, and how we're setting up the second half of the year. Then I'll hand the call back over to Apoorv, who'll take you through the financials in detail.

Speaker #2: So let's dive right in. The second quarter of 2026 was the best quarter in Knightscope's history. Revenue came in at $9 million, up more than 200% from $2.7 million in the same quarter last year.

Speaker #2: And a new quarterly record for the company. We now serve 434 clients across 42 states. That marks two consecutive record quarters following first quarter revenue that was up 106% year over year.

Speaker #2: Back in May, I stood in front of institutional investors in New York and made a simple commitment: each quarter, better than the last. We have delivered exactly what we said we would do.

Speaker #2: In the second quarter, we built on the momentum from the first quarter of 2026, and we believe that we have laid the groundwork to keep it going forward.

Speaker #2: This compounding effect is the result of relentless commitment to execution across the entire organization. Apoorv will walk you through the drivers behind those numbers in just a few minutes.

Speaker #2: The integration of our recent acquisition, now known as our security force, is proceeding as planned. And the collaboration between the teams is amazing to witness.

Speaker #2: Seeing firsthand the team collaborate on our new H1 wearable that will define the future augmented security agent, or ASA, is truly, truly invigorating. The teams are operating and beginning to work as one, as we look to expand our offerings with our current client base.

Speaker #2: This was our second acquisition as a public company, and the discipline the team has shown—closing it, filing it, and now integrating it—without missing a beat tells you a lot about the caliber of the team.

Speaker #2: More importantly, it strengthens exactly how we intend to differentiate Knightscope. The unique combination of hardware, software, and humans delivered as one managed service. This team has been working on efficiencies in delivering tangible results, including cutting the assembly time for one of our product lines by almost 80%.

Speaker #2: We've grown the depth of our technical team significantly, as we're seeing interest in Knightscope grow significantly. We restructured our field service network in Northern California and the Northeast region by building relationships with local service providers, and by insourcing field services in Southern California to provide better services while lowering our service delivery costs.

Speaker #2: We also strengthened the leadership in the company, recruiting multiple senior executives with a track record of scaling companies. Growth with discipline, that is the operating model.

Speaker #2: The K7, our all-new autonomous security robot, passed its alpha prototype gate review. And we remain on track for initial deployments in the fourth quarter of 2026, as we move into the beta prototype phase.

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Speaker #2: In April, we announced our partnership with Carnegie Mellon University, the top robotics institution in the country. Whose graduate robotics program is now working directly on autonomous patrol technology under the guidance of our engineering team.

Speaker #2: We're taking a disciplined approach to the K7's market introduction, focused on success in the field. Client interest in the K7 deployment continues to grow.

Speaker #2: First hand: the team collaborate on our new H1 wearable that will define the future augmented security agent, or ASA, is truly, truly invigorating. The teams are operating and beginning to work as one, as we look to expand our offerings with our current client base.

[Company Representative] (Knightscope): Firsthand, the team collaborate on our new H1 wearable that will define the future augmented security agent or ASA, is truly invigorating. The teams are operating and beginning to work as one as we look to expand our offerings with our current client base. This was our second acquisition as a public company, and the discipline the team has shown, closing it, filing it, and now integrating it without missing a beat tells you a lot about the caliber of the team. More importantly, it strengthens exactly how we intend to differentiate Knightscope. The unique combination of hardware, software, and humans delivered as one managed service. This team has been working on efficiencies and delivering tangible results, including cutting the assembly time for one of our product lines by almost 80%. We have grown the depth of our technical team significantly as we are seeing interest in Knightscope grow significantly.

Bill Santana Li: Firsthand, the team collaborate on our new H1 wearable that will define the future augmented security agent or ASA, is truly invigorating. The teams are operating and beginning to work as one as we look to expand our offerings with our current client base. This was our second acquisition as a public company, and the discipline the team has shown, closing it, filing it, and now integrating it without missing a beat tells you a lot about the caliber of the team. More importantly, it strengthens exactly how we intend to differentiate Knightscope. The unique combination of hardware, software, and humans delivered as one managed service. This team has been working on efficiencies and delivering tangible results, including cutting the assembly time for one of our product lines by almost 80%. We have grown the depth of our technical team significantly as we are seeing interest in Knightscope grow significantly.

Speaker #2: Simultaneously, significant work is well underway on an all-new Signals platform, designed to orchestrate our autonomous robots' stationary devices, sensors, augmented security agents, and our mission intelligence remote monitoring.

Speaker #2: This was our second acquisition as a public company, and the discipline the team has shown—closing it, filing it, and now integrating it—without missing a beat tells you a lot about the caliber of the team.

Speaker #2: An industry-first, that combines pioneering proprietary 3D digital twin technology with AI agents to eliminate blind spots and provide an auditable trail for proof of work.

Speaker #2: More importantly, it strengthens exactly how we intend to differentiate Knightscope: the unique combination of hardware, software, and humans delivered as one managed service. This team has been working on efficiencies in delivering tangible results, including cutting the assembly time for one of our product lines by almost 80%.

Speaker #2: Hardware-software-and-humans working as one, one team, one force. Now, let me spend a few minutes on the brand. Because security is not sold, it is adopted through trust.

Speaker #2: And building trust at a national scale requires showing up everywhere, with clients, with the media, with communities, with recruits, and with Wall Street. This quarter, we sharpened our positioning.

Speaker #2: We've grown the depth of our technical team significantly, as we're seeing interest in Knightscope grow significantly. We restructured our field service network in Northern California and the Northeast region by building relationships with local service providers, and by insourcing field services in Southern California to provide better service while lowering our service delivery costs.

[Company Representative] (Knightscope): We restructured our field service network in Northern California and the Northeast region by building relationships with local service providers, and by insourcing field services in Southern California to provide better services while lowering our service delivery costs. We also strengthened the leadership in the company, recruiting multiple senior executives with a track record of scaling companies. Growth with discipline, that is the operating model. The K7, our all new autonomous security robot, passed its alpha prototype gate review, and we remain on track for initial deployments in Q4 2026 as we move into the beta prototype phase. in April, we announced our partnership with Carnegie Mellon University, the top robotics institution in the country, whose graduate robotics program is now working directly on autonomous patrol technology under the guidance of our engineering team.

Bill Santana Li: We restructured our field service network in Northern California and the Northeast region by building relationships with local service providers, and by insourcing field services in Southern California to provide better services while lowering our service delivery costs. We also strengthened the leadership in the company, recruiting multiple senior executives with a track record of scaling companies. Growth with discipline, that is the operating model. The K7, our all new autonomous security robot, passed its alpha prototype gate review, and we remain on track for initial deployments in Q4 2026 as we move into the beta prototype phase. in April, we announced our partnership with Carnegie Mellon University, the top robotics institution in the country, whose graduate robotics program is now working directly on autonomous patrol technology under the guidance of our engineering team.

Speaker #2: Knightscope is a managed service provider, the only company uniquely combining hardware, software, and humans into one integrated offering. We are building the nation's first autonomous security force.

Speaker #2: We also strengthened the leadership in the company, recruiting multiple senior executives with a track record of scaling companies. Growth with discipline—that is the operating model.

Speaker #2: That message resonated strongly with institutional investors during our non-deal roadshows in New York and its momentum is building. The team has been hard at work preparing for GSX 2026.

Speaker #2: The K7, our all-new autonomous security robot, passed its alpha prototype gate review. We remain on track for initial deployments in the fourth quarter of 2026, as we move into the beta prototype phase.

Speaker #2: The security industry's largest gathering, September 14 through the 16th, in Atlanta, Georgia, where we'll officially launch the autonomous security force on the biggest stage in our industry.

Speaker #2: If you're attending, come and see us. One more signal of momentum: in June, we hosted a career night at our headquarters, here in Silicon Valley.

Speaker #2: In April, we announced our partnership with Carnegie Mellon University, the top robotics institution in the country, whose graduate robotics program is now working directly on autonomous patrol technology under the guidance of our engineering team.

Speaker #2: And there was literally a line around the building to get in. The best people in the country want to work on this mission, and we're hiring the best of the best.

Speaker #2: We're taking a disciplined approach to the K7's market introduction, focusing on success in the field. Client interest in the K7 deployment continues to grow.

[Company Representative] (Knightscope): We are taking a disciplined approach to the K7's market introduction focused on success in the field. Client interest in the K7 deployment continues to grow. Simultaneously, significant work is well underway on an all-new Signals platform designed to orchestrate our autonomous robots, stationary devices, sensors, augmented security agents, and our Mission Intelligence remote monitoring. An industry first that combines pioneering proprietary 3D digital twin technology with AI agents to eliminate blind spots and provide an auditable trail for proof-of-work. Hardware, software, and humans working as one. One team, one force. Now let me spend a few minutes on the brand, because security is not sold, it is adopted through trust. Building trust at a national scale requires showing up everywhere with clients, with the media, with communities, with recruits, and with Wall Street. This quarter, we sharpened our positioning.

Bill Santana Li: We are taking a disciplined approach to the K7's market introduction focused on success in the field. Client interest in the K7 deployment continues to grow. Simultaneously, significant work is well underway on an all-new Signals platform designed to orchestrate our autonomous robots, stationary devices, sensors, augmented security agents, and our Mission Intelligence remote monitoring. An industry first that combines pioneering proprietary 3D digital twin technology with AI agents to eliminate blind spots and provide an auditable trail for proof-of-work. Hardware, software, and humans working as one. One team, one force. Now let me spend a few minutes on the brand, because security is not sold, it is adopted through trust. Building trust at a national scale requires showing up everywhere with clients, with the media, with communities, with recruits, and with Wall Street. This quarter, we sharpened our positioning.

Speaker #2: With that, I'll turn it over to Apoorv to take you through the numbers.

Speaker #3: Thanks, Bill.

Speaker #2: Revenue for the second quarter was $9 million, an increase of 228% compared with 2.7 million in the second quarter of 2025. And a new quarterly record.

Speaker #2: Simultaneously, significant work is well underway on an all-new Signals platform, designed to orchestrate our autonomous robots, stationary devices, sensors, augmented security agents, and our Mission Intelligence remote monitoring.

Speaker #2: Growth was driven by the full-quarter contribution from the security force acquisition, in addition to our core ASR subscriptions and ACD deployments. Growth margin was 0.7 million, or approximately 7% of revenue, compared with the growth loss of 0.9 million in the prior year period.

Speaker #2: An industry first that combines pioneering proprietary 3D digital twin technology with AI agents to eliminate blind spots and provide an auditable trail for proof of work.

Speaker #2: Hardware, software, and humans working as one—one team, one force. Now, let me spend a few minutes on the brand, because security is not sold; it is adopted through trust.

Speaker #2: This marks our second consecutive quarter of positive growth margin, driven by full-quarter impact of the immediately accreted security force acquisition and margin expansion across both technology product lines.

Speaker #2: And building trust at a national scale requires showing up everywhere—with clients, with the media, with communities, with recruits, and with Wall Street. This quarter, we sharpened our positioning.

Speaker #2: Demonstrating that our integrated technology plus services model is structurally more profitable than either business alone. Operating expenses were $13.8 million, compared with $5.4 million in the second quarter of 2025.

Speaker #2: Knightscope is a managed service provider, and the only company uniquely combining hardware, software, and humans into one integrated offering. We are building the nation’s first autonomous security force.

[Company Representative] (Knightscope): Knightscope is a managed service provider, the only company uniquely combining hardware, software, and humans into one integrated offering. We are building the nation's first Autonomous Security Force. That message resonated strongly with institutional investors during our non-deal roadshows in New York, and its momentum is building. The team has been hard at work preparing for GSX 2026, the security industry's largest gathering, 14 September through 16 September in Atlanta, Georgia, where we will officially launch the Autonomous Security Force on the biggest stage in our industry. If you are attending, come and see us. One more signal of momentum. In June, we hosted a career night at our headquarters here in Silicon Valley, and there was literally a line around the building to get in. The best people in the country want to work on this mission, and we are hiring the best of the best.

Bill Santana Li: Knightscope is a managed service provider, the only company uniquely combining hardware, software, and humans into one integrated offering. We are building the nation's first Autonomous Security Force. That message resonated strongly with institutional investors during our non-deal roadshows in New York, and its momentum is building. The team has been hard at work preparing for GSX 2026, the security industry's largest gathering, 14 September through 16 September in Atlanta, Georgia, where we will officially launch the Autonomous Security Force on the biggest stage in our industry. If you are attending, come and see us. One more signal of momentum. In June, we hosted a career night at our headquarters here in Silicon Valley, and there was literally a line around the building to get in. The best people in the country want to work on this mission, and we are hiring the best of the best.

Speaker #2: Primarily driven by investments in R&D to support the development of our next-generation technology, as well as increased headcount across all departments and the integration of the security force.

Speaker #2: That message resonated strongly with institutional investors during our non-deal roadshows in New York, and its momentum is building. The team has been hard at work preparing for GSX 2026.

Speaker #2: Despite the $3.9 million increase in R&D expenses from last year, the acquisition improved our operating leverage by adding higher margin revenue and leveraging our existing operating infrastructure.

Speaker #2: The security industry's largest gathering, September 14 through 16, in Atlanta, Georgia, where we'll officially launch the autonomous security force on the biggest stage in our industry.

Speaker #2: We expect these benefits to continue and strengthen as we achieve our new product development milestones. Net loss for the quarter was $14.1 million, or 79 cents per share, compared with a net loss of $6.3 million, or 90 cents per share in the prior year period.

Speaker #2: If you're attending, come and see us. One more signal of momentum: In June, we hosted a career night at our headquarters here in Silicon Valley.

Speaker #2: And there was literally a line around the building to get in. The best people in the country want to work on this mission, and we're hiring the best of the best.

Speaker #2: This was primarily due to the higher OPEX highlighted earlier, as well as approximately $1 million in other expenses related to the fair value and the change in the fair value of the contingent consideration, or earn-out, due to the seller of the recent acquisition.

Speaker #2: With that, I'll turn it over to Apurva to take you through the numbers.

[Company Representative] (Knightscope): With that, I will turn it over to Apoorv to take you through the numbers.

Bill Santana Li: With that, I will turn it over to Apoorv to take you through the numbers.

Speaker #3: Thanks, Bill. Revenue for the second quarter was $9 million, an increase of 228% compared with $2.7 million in the second quarter of 2025, and a new quarterly record.

Apoorv S Dwivedi: Thanks, Bill. Revenue for the Q2 was $9 million, an increase of 228%, compared with $2.7 million in the Q2 of 2025, and a new quarterly record. Growth was driven by the full quarter contribution from the Security Force acquisition, in addition to our core ASR subscriptions and ACD deployments. Gross margin was $0.7 million or approximately 7% of revenue compared with a gross loss of $0.9 million in the prior year period. This marks our second consecutive quarter of positive gross margin, driven by full quarter impact of the immediately accretive Security Force acquisition and margin expansion across both technology product lines, demonstrating that our integrated technology plus services model is structurally more profitable than either business alone. Operating expenses were $13.8 million compared with $5.4 million in the Q2 of 2025.

Apoorv Dwivedi: Thanks, Bill. Revenue for the Q2 was $9 million, an increase of 228%, compared with $2.7 million in the Q2 of 2025, and a new quarterly record. Growth was driven by the full quarter contribution from the Security Force acquisition, in addition to our core ASR subscriptions and ACD deployments. Gross margin was $0.7 million or approximately 7% of revenue compared with a gross loss of $0.9 million in the prior year period. This marks our second consecutive quarter of positive gross margin, driven by full quarter impact of the immediately accretive Security Force acquisition and margin expansion across both technology product lines, demonstrating that our integrated technology plus services model is structurally more profitable than either business alone. Operating expenses were $13.8 million compared with $5.4 million in the Q2 of 2025.

Speaker #3: Growth was driven by the full-quarter contribution from the Security Force acquisition, in addition to our core ASR subscriptions and ACD deployments. Gross margin was $0.7 million, or approximately 7% of revenue, compared with a gross loss of $0.9 million in the prior year period.

Speaker #2: Turning to the balance sheet, we ended the quarter with cash and cash equivalents of $8.2 million, this is flat to prior year, and with an improving cash conversion cycle due to the effects of the acquisition.

Speaker #2: In summary, record revenue immediately accreted margins from the acquisition, expanding margins from maturing machines and network and service efficiencies, and continued discipline in expense management.

Speaker #3: This marks our second consecutive quarter of positive gross margin, driven by the full-quarter impact of the immediately accretive Security Force acquisition and margin expansion across both technology product lines.

Speaker #2: The financial profile of the company is strengthening, in step with the operational execution Bill described earlier. And now, we'll open it up to Q&A.

Speaker #3: Demonstrating that our integrated technology-plus-services model is structurally more profitable than either business alone. Operating expenses were $13.8 million, compared with $5.4 million in the second quarter of 2025.

Speaker #2: So, Bill, what I'll do is I'll read the questions to you. You'll give me all the easy questions. All the hard questions go to you.

Speaker #2: The really bad ones.

Speaker #3: We'll send an email.

Speaker #2: So, the first question, from the autonomous security force strategy, bundles machines, software, and licensed human agents. What are the unit economics? What is the blended ASF contract more profitable per client than a standalone robot lease?

Speaker #3: This was primarily driven by investments in R&D to support the development of our next-generation technology, as well as increased headcount across all departments and the integration of the security force.

Apoorv S Dwivedi: Primarily driven by investments in R&D to support the development of our next generation technology, as well as increased headcount across all departments and the integration of the Security Force. Despite the $3.9 million increase in R&D expenses from last year, the acquisition improved our operating leverage by adding higher margin revenue and leveraging our existing operating infrastructure. We expect these benefits to continue and strengthen as we achieve our new product development milestones. Net loss for the quarter was $14.1 million or $0.79 per share, compared with a net loss of $6.3 million or $0.90 per share in the prior year period. This was primarily due to the higher OPEX highlighted earlier, as well as approximately $1 million in other expenses related to the fair value and the change in the fair value of the contingent consideration or earn-out due to the seller of the recent acquisition.

Apoorv Dwivedi: Primarily driven by investments in R&D to support the development of our next generation technology, as well as increased headcount across all departments and the integration of the Security Force. Despite the $3.9 million increase in R&D expenses from last year, the acquisition improved our operating leverage by adding higher margin revenue and leveraging our existing operating infrastructure. We expect these benefits to continue and strengthen as we achieve our new product development milestones. Net loss for the quarter was $14.1 million or $0.79 per share, compared with a net loss of $6.3 million or $0.90 per share in the prior year period. This was primarily due to the higher OPEX highlighted earlier, as well as approximately $1 million in other expenses related to the fair value and the change in the fair value of the contingent consideration or earn-out due to the seller of the recent acquisition.

Speaker #3: Despite the $3.9 million increase in R&D expenses from last year, the acquisition improved our operating leverage by adding higher-margin revenue and leveraging our existing operating infrastructure.

Speaker #3: Oof.

Speaker #2: Okay. I think we start off where humans can't do everything, and technology can't do everything.

Speaker #3: Yeah.

Speaker #2: But that combination is extremely, extremely powerful. And so what we need to think about is how do we solve the problem for the client?

Speaker #3: We expect these benefits to continue and strengthen as we achieve our new product development milestones. Net loss for the quarter was $14.1 million, or $0.79 per share.

Speaker #2: Not trying to optimize margins for individual discrete items. If you go pull just a contracts and the margins for traditional guarding unarmed, they're not very attractive, right?

Speaker #3: Compared with the net loss of $6.3 million, or $0.90 per share in the prior year period. This was primarily due to the higher opex highlighted earlier, as well as approximately $1 million in other expenses related to the fair value and the change in the fair value of the contingent consideration, or earn-out, due to the seller of the recent acquisition.

Speaker #2: They're positive, but they're not, you know, software margins. If you're able to scale software, you know, you're 60, 70, 80% gross margins, probably on the low end, you're 10, 20% on the human guarding side.

Speaker #3: Turning to the balance sheet, we ended the quarter with cash and cash equivalents of $8.2 million. This is flat compared to the prior year, and with an improving cash conversion cycle due to the effects of the acquisition.

Apoorv S Dwivedi: Turning to the balance sheet, we ended the quarter with cash and cash equivalents of $8.2 million. This is flat to prior year and with an improving cash conversion cycle due to the effects of the acquisition. In summary, record revenue, immediately accretive margins from the acquisition, expanding margins from maturing machines and network and service efficiencies, and continued discipline in expense management. The financial profile of the company is strengthening in step with the operational execution Bill described earlier. Now we will open it up to Q&A. Bill, what I will do is I will read the questions to you.

Apoorv Dwivedi: Turning to the balance sheet, we ended the quarter with cash and cash equivalents of $8.2 million. This is flat to prior year and with an improving cash conversion cycle due to the effects of the acquisition. In summary, record revenue, immediately accretive margins from the acquisition, expanding margins from maturing machines and network and service efficiencies, and continued discipline in expense management. The financial profile of the company is strengthening in step with the operational execution Bill described earlier. Now we will open it up to Q&A. Bill, what I will do is I will read the questions to you.

Speaker #2: If you're able, at scale, and we've done this, remember we did the analysis of our longest standing clients. You know, you're somewhere in the 50, 60, 65% gross margin over that five-year period.

Speaker #3: In summary, we recorded revenue, immediately accretive margins from the acquisition, expanding margins from maturing machines and network and service efficiencies, and continued discipline in expense management.

Speaker #2: So the Jedi mind trick is to be able to land with what achieves security officer would accept today. Which are licensed armed and unarmed agents.

Speaker #2: And then over time, become that trusted advisor. Hey, we've operated at your facility for quite some time now. I wouldn't really stretch the staff that way.

Speaker #3: The financial profile of the company is strengthening in step with the operational execution we described earlier. And now, we'll open it up to Q&A.

Speaker #2: You might want to consider based on the data that we have. You might want to shuffle some things around and add some technology, maybe pay the team more appropriately.

Speaker #2: So, Bill, what I'll do is I'll read the questions to you. I'll give you all the easy questions.

[Company Representative] (Knightscope): You will give me all the easy questions.

Bill Santana Li: You will give me all the easy questions.

Speaker #2: And over time, we I want to see and this is going to take some time to scale, but I want to see us, you know, in the 50, 55, 60% gross margin net when all said and done.

Apoorv S Dwivedi: I will give you all the easy questions.

Apoorv Dwivedi: I will give you all the easy questions.

[Company Representative] (Knightscope): All the hard questions go to you.

Bill Santana Li: All the hard questions go to you.

Speaker #4: All the hard questions go to you—the really tough ones.

Apoorv S Dwivedi: That's all right.

Apoorv Dwivedi: That's all right.

[Company Representative] (Knightscope): The really bad ones.

Bill Santana Li: The really bad ones.

Speaker #2: We'll send an email. So the first question, from the autonomous security force strategy—bundles of machines, software, and licensed human agents—what are the unit economics?

Apoorv S Dwivedi: We'll send an email. The first question from the Autonomous Security Force strategy bundles machines, software, and licensed human agents. What are the unit economics? What is the blended ASF contract more profitable per client than a standalone robot lease?

Apoorv Dwivedi: We'll send an email. The first question from the Autonomous Security Force strategy bundles machines, software, and licensed human agents. What are the unit economics? What is the blended ASF contract more profitable per client than a standalone robot lease?

Speaker #2: And again, we need to focus on solving the client's problem and stop, as I keep driving our team crazy, stop selling widgets. Don't, you know, please buy my robot, please buy my sensor, please, you know, hire my agent.

Speaker #2: Why is the blended ASF contract more profitable per client than a standalone robot lease?

Speaker #2: We really need to focus on positive outcomes for our clients. Hopefully, significantly improved quality and over time, reduce those costs so the last bit I would say, it's deter.

Speaker #4: Oof. Okay. I think we start off where humans can't do everything. And technology can't do everything. But that combination is extremely, extremely powerful. And so what we need to think about is how do we solve the problem for the client, not trying to optimize margins for individual discrete items.

[Company Representative] (Knightscope): Oof. Okay. I think we start off where humans can't do everything, and technology can't do everything.

Bill Santana Li: Oof. Okay. I think we start off where humans can't do everything, and technology can't do everything.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

[Company Representative] (Knightscope): But that combination is extremely powerful. So what we need to think about is how do we solve the problem for the client, not trying to optimize margins for individual discrete items. If you go pull just the contracts and the margins for traditional guarding unarmed, they are not very attractive, right?

Bill Santana Li: But that combination is extremely powerful. So what we need to think about is how do we solve the problem for the client, not trying to optimize margins for individual discrete items. If you go pull just the contracts and the margins for traditional guarding unarmed, they are not very attractive, right?

Speaker #2: You want to deter negative activity before it occurs. And that could be a human presence, it could be a technology. You want to be able to detect mostly that's technology, where you're able to do, say, superhuman capabilities that a human wouldn't be able to process.

Speaker #4: If you go pull just the contracts and the margins for traditional guarding—unarmed—they're not very attractive, right? They're positive, but they're not software margins.

Speaker #2: Then you need to actually respond. You saying, "Hi, let me all these alerts and stuff," and you don't respond, or 90% of the alerts are false, kind of problematic.

Speaker #2: But the key here is the data wheel. Is being able to learn over time. So deter, detect, respond, learn, improve the algorithms, improve the technology, improve our standard operating procedures, and over time, you become that much more effective for the client, and if you do that really well, that client will tell the next client.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

[Company Representative] (Knightscope): They are positive, but they are not software margins. If you are able to scale software, you are 60%, 70%, 80% gross margins. Probably on the low end, you are 10%, 20% on the human guarding side. If you are able at scale, and we have done this, remember?

Bill Santana Li: They are positive, but they are not software margins. If you are able to scale software, you are 60%, 70%, 80% gross margins. Probably on the low end, you are 10%, 20% on the human guarding side. If you are able at scale, and we have done this, remember?

Speaker #4: If you're able to scale software, you're at 60, 70, 80% gross margins—probably on the low end. You're at 10, 20% on the human guarding side.

Speaker #4: If you’re able, at scale—and we’ve done this, remember—we did the analysis of our longest-standing clients. You’re somewhere in the 50%, 60%, 65% gross margin over that five-year period.

Apoorv S Dwivedi: Yep.

Apoorv Dwivedi: Yep.

[Company Representative] (Knightscope): We did the analysis of our longest standing clients.

Bill Santana Li: We did the analysis of our longest standing clients.

Speaker #3: Yeah.

Speaker #2: And I think part of that also is, you know, going back to the outcome. So unit economics work when we're selling to a traditional audience, and we kind of are, but the expectations are traditional.

Apoorv S Dwivedi: That is right.

Apoorv Dwivedi: That is right.

[Company Representative] (Knightscope): You're somewhere in the 50%, 60%, 65% gross margin over that five-year period. The Jedi mind trick is to be able to land with what a chief security officer would accept today.

Bill Santana Li: You're somewhere in the 50%, 60%, 65% gross margin over that five-year period. The Jedi mind trick is to be able to land with what a chief security officer would accept today.

Speaker #4: So the Jedi mind trick is to be able to land with what a chief security officer would accept today, which are licensed, armed, and unarmed agents.

Speaker #2: Oh, I'm going to go buy a camera. I'm going to go buy a guarding service. I'm going to go buy access control. I'm going to go buy something else.

Apoorv S Dwivedi: Right.

Apoorv Dwivedi: Right.

[Company Representative] (Knightscope): Which are licensed, armed and unarmed agents, and then over time, become that trusted advisor. "Hey, we've operated at your facility for quite some time now.

Bill Santana Li: Which are licensed, armed and unarmed agents, and then over time, become that trusted advisor. "Hey, we've operated at your facility for quite some time now.

Speaker #4: And then, over time, become that trusted advisor. Hey, we've operated at your facility for quite some time now. I wouldn't really stretch the staff that way.

Speaker #2: And each one has its own unique unit economics.

Speaker #3: Or the cameras doesn't don't talk to the.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

[Company Representative] (Knightscope): I wouldn't really stretch the staff that way. You might want to consider, based on the data that we have, you might want to shuffle some things around and add some technology, maybe pay the team more appropriately." Over time, I want to see, and it's going to take some time to scale, but I want to see us in the 50%, 55%, 60% gross margin net when all is said and done.

Bill Santana Li: I wouldn't really stretch the staff that way. You might want to consider, based on the data that we have, you might want to shuffle some things around and add some technology, maybe pay the team more appropriately." Over time, I want to see, and it's going to take some time to scale, but I want to see us in the 50%, 55%, 60% gross margin net when all is said and done.

Speaker #2: Right. The guard, the guard doesn't talk to the remote monitoring team. The remote monitoring team doesn't talk to the investigation team. Why is the chief security officer having to manage 8, 10, 12 different vendors?

Speaker #4: You might want to consider based on the data that we have. You might want to shuffle some things around and add some technology, maybe pay the team more appropriately.

Speaker #2: They're all very, you know, competent in invoicing you. But can you actually account for everything that happened with an audible? Proof of work and a track record of everything that happened at that location.

Speaker #4: And over time, we—I want to see—and this is going to take some time to scale, but I want to see us in the 50%, 55%, 60% gross margin net, when all is said and done.

Speaker #3: Yeah. And I think that's how we'll prove out is that the solution is based sales approach takes away the unit economics and focuses on outcomes.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

Speaker #4: And again, we need to focus on solving the client's problem and stop—as I keep driving our team crazy—stop selling widgets. Don't, 'Please buy my robot.'

[Company Representative] (Knightscope): Again, we need to focus on solving the client's problem and stop, as I keep driving my team crazy, stop selling widgets.

Bill Santana Li: Again, we need to focus on solving the client's problem and stop, as I keep driving my team crazy, stop selling widgets.

Speaker #2: Yeah. Next question is, what is the appetite for additional M&A? And what criteria would you be looking for in a potential transaction? Is the incremental revenue the priority or something else?

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

[Company Representative] (Knightscope): Don't, "Please buy my robot, please buy my sensor, please hire my agent." We really need to focus on positive outcomes for our clients. Hopefully, significantly improved quality, and over time, reduce those costs. The last bit I would say, it's deter. You want to deter negative activity before it occurs, and that could be a human presence, it could be technology. You want to be able to detect. Mostly that's technology, where you are able to do, say, superhuman capabilities that a human wouldn't be able to process. Then you need to actually respond.

Bill Santana Li: Don't, "Please buy my robot, please buy my sensor, please hire my agent." We really need to focus on positive outcomes for our clients. Hopefully, significantly improved quality, and over time, reduce those costs. The last bit I would say, it's deter. You want to deter negative activity before it occurs, and that could be a human presence, it could be technology. You want to be able to detect. Mostly that's technology, where you are able to do, say, superhuman capabilities that a human wouldn't be able to process. Then you need to actually respond.

Speaker #4: Please buy my sensor. Please hire my agent. We really need to focus on positive outcomes for our clients—hopefully, significantly improved quality and, over time, reduced costs.

Speaker #3: Okay, so I've this recent acquisition was the 25th in my professional career. Doing deals as I often say, the deal part is actually relatively speaking easy.

Speaker #4: So the last bit, I would say, is deter. You want to deter negative activity before it occurs. And that could be a human presence.

Speaker #4: It could be technology. You want to be able to detect—mostly that's technology—where you're able to do, say, superhuman capabilities that a human wouldn't be able to process.

Speaker #3: It's the day one and integration after is going to make or break a deal. So you got to be very careful what you pick.

Speaker #4: Then you need to actually respond. You saying, "Hi, let me handle all these alerts and stuff," and then you don't respond, or 90% of the alerts are false, is kind of problematic.

Speaker #3: I think it probably sits in three buckets. The first bucket, there's probably somebody's going to do the research here, but plus or minus maybe 8,000 guarding firms in the US, plus or minus maybe 6,000 have more than 100 employees.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

[Company Representative] (Knightscope): You saying, "Hi, let me, all these alerts and stuff," and you don't respond, or 90% of the alerts are false, kind of problematic. But the key here is the data wheel, is being able to learn over time. So deter, detect, respond, learn.

Bill Santana Li: You saying, "Hi, let me, all these alerts and stuff," and you don't respond, or 90% of the alerts are false, kind of problematic. But the key here is the data wheel, is being able to learn over time. So deter, detect, respond, learn.

Speaker #4: But the key here is the data wheel—being able to learn over time. So: deter, detect, respond, learn.

Speaker #3: I believe most of them owned by boomers that are retiring. The kids don't want to take over the business. And the large big box staffing companies aren't likely to buy them.

Speaker #2: Learn.

Apoorv S Dwivedi: Learn. Yeah.

Apoorv Dwivedi: Learn. Yeah.

Speaker #4: Improve the algorithms, improve the technology, improve our standard operating procedures, and over time, you become that much more effective for the client. If you do that really well, that client will tell the next client.

[Company Representative] (Knightscope): Improve the algorithms, improve the technology, improve our standard operating procedures, and over time, you become that much more effective for the client. If you do that really well, that client will tell the next client.

Bill Santana Li: Improve the algorithms, improve the technology, improve our standard operating procedures, and over time, you become that much more effective for the client. If you do that really well, that client will tell the next client.

Speaker #3: So you literally have an illiquid market.

Speaker #2: Yep. And I think part of that also is going back to the outcome. So unit economics work when we're selling to a traditional audience—and we kind of are—but the expectations are traditional.

Apoorv S Dwivedi: Yep. I think part of that also is going back to the outcome. Unit economics work when we are selling to a traditional audience, and we kind of are, but the expectations are traditional. "Oh, I am going to go buy a camera. I am going to go buy a guarding service. I am going to go buy access control. I am going to go buy something else." Each one has its own unique unit economics.

Apoorv Dwivedi: Yep. I think part of that also is going back to the outcome. Unit economics work when we are selling to a traditional audience, and we kind of are, but the expectations are traditional. "Oh, I am going to go buy a camera. I am going to go buy a guarding service. I am going to go buy access control. I am going to go buy something else." Each one has its own unique unit economics.

Speaker #2: Yeah.

Speaker #3: Which is an interesting dynamic. For doing a roll-up, I think if we're a private equity shop, you'd look at the recent acquisition as you bought a platform company.

Speaker #3: You've got a growing company, a strong management team, actual results, and something that you want to build on. So I think there's opportunities for us to organically grow the security force.

Speaker #2: Oh, I'm going to go buy a camera. I'm going to go buy a guarding service. I'm going to go buy access control. I'm going to go buy something else.

Speaker #2: And each one has its own unique unit economics.

[Company Representative] (Knightscope): Or the cameras do not talk to the

Bill Santana Li: Or the cameras do not talk to the

Speaker #4: Or the cameras don’t talk to the...

Speaker #2: Right.

Apoorv S Dwivedi: Right

Apoorv Dwivedi: Right

Speaker #4: The guard—the guard doesn't talk to the remote monitoring team. The remote monitoring team doesn't talk to the investigation team. Why is the chief security officer having to manage 8, 10, 12 different vendors?

Speaker #3: Maybe there's some bolt-on acquisitions as we get further along. So that's the first bucket. Second bucket, we've been actively looking at remote monitoring companies.

[Company Representative] (Knightscope): the guard. The guard does not talk to the remote monitoring team. The remote monitoring team does not talk to the investigation team. Why is the chief security officer having to manage eight, 10, 12 different vendors? They are all very competent in invoicing you. But can you actually account for everything that happened with an auditable proof-of-work and a track record of everything that happened at that location?

Bill Santana Li: the guard. The guard does not talk to the remote monitoring team. The remote monitoring team does not talk to the investigation team. Why is the chief security officer having to manage eight, 10, 12 different vendors? They are all very competent in invoicing you. But can you actually account for everything that happened with an auditable proof-of-work and a track record of everything that happened at that location?

Speaker #3: This could be immediately accretive because that remote monitoring company likely does not have a security force component. And likely does not have a technology or robotics component.

Speaker #4: They're all very competent in invoicing you, but can you actually account for everything that happened, with an audible proof of work and a track record of everything that happened at that location?

Speaker #2: Yeah.

Speaker #3: But does have a client base cash flowing and we could be highly synergistic. Again, we need to be kind of a little picky here.

Speaker #2: Yeah, and I think that's what we'll prove out, is that with a solutions-based sales approach, it takes away the unit economics and focuses on outcomes.

Apoorv S Dwivedi: Yeah. I think that is what we will prove out is that the solutions-based sales approach takes away the unit economics

Apoorv Dwivedi: Yeah. I think that is what we will prove out is that the solutions-based sales approach takes away the unit economics

[Company Representative] (Knightscope): Yep

Bill Santana Li: Yep

Apoorv S Dwivedi: and focuses on outcomes.

Apoorv Dwivedi: and focuses on outcomes.

Speaker #4: Yep.

[Company Representative] (Knightscope): Yep.

Bill Santana Li: Yep.

Speaker #3: Make sure we're careful. But we've been shopping for that. I think lastly, we live here in Silicon Valley. 22,000 startups, as I often say, some of the most brilliant minds in the world backed by millions and sometimes billions of dollars.

Speaker #2: Next question is, what is the appetite for additional M&A? And what criteria would you be looking for in a potential transaction? Is incremental revenue the priority, or something else?

Apoorv S Dwivedi: Next question is, what is the appetite for additional M&A, and what criteria would you be looking for in a potential transaction? Is the incremental revenue the priority or something else?

Apoorv Dwivedi: Next question is, what is the appetite for additional M&A, and what criteria would you be looking for in a potential transaction? Is the incremental revenue the priority or something else?

Speaker #4: Okay. So this recent acquisition was the 25th of my professional career. Doing deals, as I often say, the deal part is actually, relatively speaking, easy.

[Company Representative] (Knightscope): Well, this recent acquisition was the 25th in my professional career. Doing deals, as I often say, the deal part is actually, relatively speaking, easy. It is the day 1 and integration after is going to make or break a deal.

Bill Santana Li: Well, this recent acquisition was the 25th in my professional career. Doing deals, as I often say, the deal part is actually, relatively speaking, easy. It is the day 1 and integration after is going to make or break a deal.

Speaker #3: Literally 95% fail. And so there's all kinds of goodies and assets sitting around. I think going in time, it could be a piece of technology.

Speaker #4: It's the day one and integration after is going to make or break a deal. So you got to be very careful what you pick.

Speaker #3: It could be a particular algorithm. It could be a sensor. It could be a team. So we're always on the lookout there. So those would be the three buckets.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

[Company Representative] (Knightscope): You got to be very careful what you pick. I think it probably sits in three buckets. The first bucket there is probably, somebody is going to do the research here, but plus or minus maybe 8,000 guarding firms in the US, plus or minus maybe 6,000 have more than 100 employees. I believe most of them owned by boomers that are retiring. The kids don't want to take over the business. And the large big box staffing companies aren't likely to buy them. So you literally have an illiquid market.

Bill Santana Li: You got to be very careful what you pick. I think it probably sits in three buckets. The first bucket there is probably, somebody is going to do the research here, but plus or minus maybe 8,000 guarding firms in the US, plus or minus maybe 6,000 have more than 100 employees. I believe most of them owned by boomers that are retiring. The kids don't want to take over the business. And the large big box staffing companies aren't likely to buy them. So you literally have an illiquid market.

Speaker #4: I think it probably sits in three buckets. The first bucket, there's probably—somebody's going to do the research here—but, plus or minus, maybe 8,000 guarding firms in the US; plus or minus, maybe 6,000 have more than 100 employees.

Speaker #3: Continued inorganic growth on the security force side, remote monitoring opportunities that likely to be highly synergistic, and then the last one would be on the technology side.

Speaker #2: Yeah.

Speaker #3: I would probably even go a little bit, you know, to kind of summarize that. If you think about our strategy, which is hardware plus software plus humans, right?

Speaker #4: I believe most of them are owned by boomers who are retiring. The kids don't want to take over the business, and the large, big-box staffing companies aren't likely to buy them.

Speaker #3: We're really good at the hardware. Hardware, we have. The humans piece is we're working on that, and that's where the opportunity is. And the software is where the opportunity is because, again, there's so many people working on some really brilliant technologies and analytics and software that if we can find the right one to plug in, why don't we just do that?

Speaker #4: So you literally have an illiquid market.

Speaker #2: Yeah.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

Speaker #4: Which is an interesting dynamic. For doing a roll-up, I think if we were a private equity shop, you'd look at the recent acquisition as if you bought a platform company.

[Company Representative] (Knightscope): Which is an interesting dynamic for doing a roll-up. I think if we're a private equity shop, you'd look at the recent acquisition as you bought a platform company. You've got a growing company, a strong management team, actual results, and something that you want to build on. I think there's opportunities for us to organically grow the security force. Maybe there's some bolt-on acquisitions as we get further along. That's the first bucket. Second bucket, we've been actively looking at remote monitoring companies. This could be immediately accretive because that remote monitoring company likely does not have a security force component.

Bill Santana Li: Which is an interesting dynamic for doing a roll-up. I think if we're a private equity shop, you'd look at the recent acquisition as you bought a platform company. You've got a growing company, a strong management team, actual results, and something that you want to build on. I think there's opportunities for us to organically grow the security force. Maybe there's some bolt-on acquisitions as we get further along. That's the first bucket. Second bucket, we've been actively looking at remote monitoring companies. This could be immediately accretive because that remote monitoring company likely does not have a security force component.

Speaker #2: Yeah. And then again, if you go on our brand new shiny website at nightscope.com, it literally says, on the homepage, for you, the chief security officers of the United States of America.

Speaker #4: You've got a growing company, a strong management team, actual results, and something that you want to build on. So I think there are opportunities for us to organically grow the security force.

Speaker #2: And so any decision that we would be making would be in your interest for us to build the most powerful autonomous security force offering to really fix the client's problems and frankly, our nation's problems.

Speaker #4: Maybe there's some bolt-on acquisitions as we get further along. So that's the first bucket. Second bucket, we've been actively looking at remote monitoring companies.

Speaker #3: Right.

Speaker #4: This could be immediately accretive because that remote monitoring company likely does not have a security force component, and likely does not have a technology or robotics component.

Speaker #2: Next question. Let's talk about clients. Can you give your perspective on client retention? Renewals among the legacy security force client base.

Apoorv S Dwivedi: Yep.

Apoorv Dwivedi: Yep.

[Company Representative] (Knightscope): Likely does not have a technology or robotics component.

Bill Santana Li: Likely does not have a technology or robotics component.

Apoorv S Dwivedi: Yep.

Apoorv Dwivedi: Yep.

Speaker #3: I'm sure this is not 100% accurate but one of the reasons we made the acquisition was very rarely to zero have they the security force lost the clients.

Speaker #4: But it does have a client base that is cash flowing and could be highly synergistic. Again, we need to be a little picky here and make sure we're careful.

[Company Representative] (Knightscope): But does have a client base, cash flowing, and could be highly synergistic. Again, we need to be kind of a little picky here, make sure we're careful. But we've been shopping for that. I think lastly, we live here in Silicon Valley, 22,000 startups, as I often say, some of the most brilliant minds in the world backed by millions and sometimes billions of dollars, literally 95% fail. There's all kinds of goodies and assets sitting around at any point in time. It could be a piece of technology, it could be a particular algorithm, it could be a sensor.

Bill Santana Li: But does have a client base, cash flowing, and could be highly synergistic. Again, we need to be kind of a little picky here, make sure we're careful. But we've been shopping for that. I think lastly, we live here in Silicon Valley, 22,000 startups, as I often say, some of the most brilliant minds in the world backed by millions and sometimes billions of dollars, literally 95% fail. There's all kinds of goodies and assets sitting around at any point in time. It could be a piece of technology, it could be a particular algorithm, it could be a sensor.

Speaker #4: But we've been shopping for that. I think, lastly, we live here in Silicon Valley—22,000 startups, as I often say. Some of the most brilliant minds in the world.

Speaker #3: They may have fired a client, which is different.

Speaker #2: Yeah.

Speaker #3: But the retention has been really strong there. I think one. I look at our client base. We're now 434 plus clients across 42 states.

Speaker #4: Backed by millions, and sometimes billions, of dollars—literally, 95% fail. And so there are all kinds of goodies and assets sitting around at any point in time.

Speaker #3: If you go to our there's a new investor updated deck. If you go to ir.nightscope.com, our new IR site, you can pull that down.

Speaker #4: It could be a piece of technology. It could be a particular algorithm. It could be a sensor. It could be a team. So we're always on the lookout there.

Speaker #3: I think there's a slide on there that reflects something to the effect of if you take the top five of the 434 clients, their security spend is on the order of about $850 million.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

[Company Representative] (Knightscope): It could be a team. We're always on the lookout there. Those would be the three buckets. Continued inorganic growth on the security force side, remote monitoring opportunities that likely will be highly synergistic, and the last one would be on the technology side.

Bill Santana Li: It could be a team. We're always on the lookout there. Those would be the three buckets. Continued inorganic growth on the security force side, remote monitoring opportunities that likely will be highly synergistic, and the last one would be on the technology side.

Speaker #4: So those would be the three buckets: continued inorganic growth on the security force side, remote monitoring—opportunities that are likely to be highly synergistic—and then the last one would be on the technology side.

Speaker #3: So what is the easiest sale you're ever going to get? Frankly, an existing client.

Speaker #2: I would probably even go a little bit further to kind of summarize that. If you think about our strategy, which is hardware plus software plus humans, right?

Apoorv S Dwivedi: Yeah. I would probably even go a little bit to kind of summarize that if you think about our strategy, which is hardware plus software plus humans, right? We are really good at the hardware. The hardware we have. The humans piece is we are working on that, and that is where the opportunity is, and the software is where the opportunity is because, again, there are so many people working on some really brilliant technologies and analytics and software that if we can find the right one to plug in, why do not we just do that?

Apoorv Dwivedi: Yeah. I would probably even go a little bit to kind of summarize that if you think about our strategy, which is hardware plus software plus humans, right? We are really good at the hardware. The hardware we have. The humans piece is we are working on that, and that is where the opportunity is, and the software is where the opportunity is because, again, there are so many people working on some really brilliant technologies and analytics and software that if we can find the right one to plug in, why do not we just do that?

Speaker #2: Yeah.

Speaker #3: And so I've been very much focused on thinking through strategies and approaches on how do we leverage the 434 and see what good we can do for them.

Speaker #2: We're really good at the hardware. Hardware, we have. The human piece—we're working on that. And that's where the opportunity is. And the software is where the opportunity is, because, again, there are so many people working on some really brilliant technologies and analytics and software that if we can find the right one to plug in, why don't we just do that?

Speaker #3: And along the way, we've met a lot of folks that are struggling with the existing kind of setup. So there's going to be primary focus on existing clients.

Speaker #4: Yeah. And then again, if you go on our brand new, shiny website at knightscope.com, it literally says on the homepage, "For you, the chief security officers of the United States of America."

[Company Representative] (Knightscope): Yeah. If you go on our brand new shiny website at knightscope.com, it literally says on the homepage, "For you, the chief security officers of the United States of America." Any decision that we would be making would be in your interest for us to build the most powerful Autonomous Security Force offering, to really fix the client's problems and frankly, our nation's problems.

Bill Santana Li: Yeah. If you go on our brand new shiny website at knightscope.com, it literally says on the homepage, "For you, the chief security officers of the United States of America." Any decision that we would be making would be in your interest for us to build the most powerful Autonomous Security Force offering, to really fix the client's problems and frankly, our nation's problems.

Speaker #3: With some additional new clients as we go along. But the opportunity is certainly there. If taken a very long time to go build the foundation, to make all this happen, but this is a unique opportunity in time and a unique company.

Speaker #4: And so any decision that we would be making would be in your interest for us to build the most powerful autonomous security force offering, to really fix the client's problems and, frankly, our nation's problems.

Speaker #3: This is a managed service provider for physical security that's never existed. And I knowing what we know, let's just say everyone in the building's in good spirits, right?

Speaker #2: Right. Next question. Let's talk about clients. Can you give your perspective on client retention—renewals among the legacy security force client base?

Apoorv S Dwivedi: Right. Next question. Let us talk about clients. Can you give your perspective on client retention, renewals among the legacy Security Force client base?

Apoorv Dwivedi: Right. Next question. Let us talk about clients. Can you give your perspective on client retention, renewals among the legacy Security Force client base?

Speaker #2: Yeah. Number four. Can you expand on the meaningful synergies from the security force acquisition?

Speaker #3: This is it. This is it.

Speaker #4: I'm sure this is not 100% accurate, but one of the reasons we made the acquisition was that very rarely to zero have they—the security force—lost the clients.

[Company Representative] (Knightscope): I am sure this is not 100% accurate, but one of the reasons we made the acquisition was, very rarely to zero have the Security Force lost a client. They may have fired a client, which is different.

Bill Santana Li: I am sure this is not 100% accurate, but one of the reasons we made the acquisition was, very rarely to zero have the Security Force lost a client. They may have fired a client, which is different.

Speaker #2: Easy one.

Speaker #3: It is easy.

Speaker #2: You do it then.

Speaker #3: Meaningful synergies. So I think we want to look at it from a few different angles. Obviously, you've seen the numbers. There's a significant component on the revenue growth.

Speaker #4: They may have fired a client, which is different.

Speaker #2: Yep.

Apoorv S Dwivedi: Yep.

Apoorv Dwivedi: Yep.

Speaker #4: But the retention has been really strong there. I think, one, I look at our client base—we're now 434-plus clients across 42 states.

[Company Representative] (Knightscope): The retention has been really strong there, I think, one. I look at our client base. We are now 434 plus clients across 42 states. There is a new investor updated deck. If you go to ir.knightscope.com, our new IR site, you can pull that down. I think there is a slide on there that reflects something to the effect of, if you take the top five

Bill Santana Li: The retention has been really strong there, I think, one. I look at our client base. We are now 434 plus clients across 42 states. There is a new investor updated deck. If you go to ir.knightscope.com, our new IR site, you can pull that down. I think there is a slide on there that reflects something to the effect of, if you take the top five

Speaker #3: You know, triple digit growth, two quarters in a row is kind of not normal. And over time, Wall Street will begin to learn that you cannot ignore company growing triple digit in a market with a 230 billion dollar TAM and working on robotics and AI and a unique set of humans in the loop.

Speaker #4: If you go to our site, there's a new investor update deck. If you go to ir.knightscope.com, our new IR site, you can pull that down.

Speaker #4: I think there's a slide on there that reflects something to the effect of, if you take the top five of the 434 clients, their security spend is on the order of about $850 million.

Speaker #3: Like, that's not something you're going to be able to ignore. The best thing that we can do, continue to improve the financial performance of the company.

Apoorv S Dwivedi: Yeah

Apoorv Dwivedi: Yeah

[Company Representative] (Knightscope): of the 434 clients, their security spend is on the order of about $850 million. What is the easiest sale you are ever going to get?

Bill Santana Li: of the 434 clients, their security spend is on the order of about $850 million. What is the easiest sale you are ever going to get?

Speaker #3: Continue to grow. Communicate, communicate, communicate. But at the end of the day, we know we're right. We just need to execute. So in terms of the synergies, there's 434 clients.

Speaker #4: So, what is the easiest sale you're ever going to get? Frankly, an existing client.

Apoorv S Dwivedi: Security client.

Apoorv Dwivedi: Security client.

[Company Representative] (Knightscope): Frankly, an existing client.

Bill Santana Li: Frankly, an existing client.

Speaker #3: So you might imagine a large portfolio of nationwide blue chip clients that have only had security force kind of footprint. I guess, pun intended.

Speaker #2: Yep.

Apoorv S Dwivedi: Yep.

Apoorv Dwivedi: Yep.

[Company Representative] (Knightscope): I have been very much focused on thinking through strategies and approaches on how we leverage the 434 and see what good we can do for them. Along the way, we have met a lot of folks that are struggling with the existing kind of setup. There is going to be a primary focus on existing clients, with some additional new clients as we go along. The opportunity is certainly there. It has taken a very long time to go build the foundation to make all this happen. This is a unique opportunity in time and a unique company. This is a managed service provider for physical security that has never existed. Knowing what we know, let us just say everyone in the building is in good spirits.

Bill Santana Li: I have been very much focused on thinking through strategies and approaches on how we leverage the 434 and see what good we can do for them. Along the way, we have met a lot of folks that are struggling with the existing kind of setup. There is going to be a primary focus on existing clients, with some additional new clients as we go along. The opportunity is certainly there. It has taken a very long time to go build the foundation to make all this happen. This is a unique opportunity in time and a unique company. This is a managed service provider for physical security that has never existed. Knowing what we know, let us just say everyone in the building is in good spirits.

Speaker #4: So I've been very much focused on thinking through strategies and approaches on how we leverage the 434, and see what good we can do for them.

Speaker #3: And no technology. So there's a significant opportunity for we already landed.

Speaker #4: And along the way, we've met a lot of folks that are struggling with the existing kind of setup. So there's going to be primary focus on existing clients, with some additional new clients as we go along.

Speaker #2: Yeah.

Speaker #3: Let's go expand and be very thoughtful about, okay, please tell us what issues you're having. Not by generalities. That particular address and that particular location, what incidents have you had?

Speaker #4: But the opportunity is certainly there. It's taken a very long time to go build the foundation to make all this happen, but this is a unique opportunity in time.

Speaker #3: What's the budget? Where are you struggling? How can we be helpful? Have you thought about X, Y, and Z? You know, what's the lighting look like?

Speaker #3: What's the signage look like? Try to be that thoughtful, trusted, advisor that hopefully we can win that trust over time. And go expand with technology.

Speaker #4: And a unique company. This is a managed service provider for physical security—that's never existed. And knowing what we know, let's just say everyone in the building's in good spirits, right?

Speaker #3: Similarly, you're kind of cross-selling, doing the other way. So we have a lot of clients that have only technology, that have an existing security I'll say staffing model with a lot of the big box staffing companies.

Apoorv S Dwivedi: Right. Yep. Number four, can you expand on the meaningful synergies from the Security Force acquisition? This is an easy one.

Apoorv Dwivedi: Right. Yep. Number four, can you expand on the meaningful synergies from the Security Force acquisition? This is an easy one.

Speaker #2: Yep. Number four. Can you expand on the meaningful synergies from the Security Force acquisition? This is an easy one. Yeah.

Speaker #3: And aren't too particularly fond of the quality of service.

[Company Representative] (Knightscope): It is easy?

Bill Santana Li: It is easy?

Speaker #4: Is it easy? You do it then. Meaningful synergies. So, I think we want to look at it from a few different angles. Obviously, you've seen the numbers.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

[Company Representative] (Knightscope): You tell me then. Meaningful synergies. I think we want to look at it from a few different angles. Obviously, you have seen the numbers. There is a significant component on the revenue growth. Triple-digit growth two quarters in a row is not normal. Over time, Wall Street will begin to learn that you cannot ignore a company growing triple digit in a market with a $230 billion TAM, and working on robotics and AI, and a unique set of humans in the loop. That is not something you are going to be able to ignore. The best thing that we can do, continue to improve the financial performance of the company, continue to grow, communicate. At the end of the day, we know we are right. We just need to execute. In terms of the synergies, there are 434 clients.

Bill Santana Li: You tell me then. Meaningful synergies. I think we want to look at it from a few different angles. Obviously, you have seen the numbers. There is a significant component on the revenue growth. Triple-digit growth two quarters in a row is not normal. Over time, Wall Street will begin to learn that you cannot ignore a company growing triple digit in a market with a $230 billion TAM, and working on robotics and AI, and a unique set of humans in the loop. That is not something you are going to be able to ignore. The best thing that we can do, continue to improve the financial performance of the company, continue to grow, communicate. At the end of the day, we know we are right. We just need to execute. In terms of the synergies, there are 434 clients.

Speaker #2: Yeah.

Speaker #3: And so for us to say, hey, listen, we offer executive protection. We have armed agents. We have unarmed agents. We will be unveiling the H1 wearable here shortly.

Speaker #4: There's a significant component on the revenue growth. Triple-digit growth two quarters in a row is kind of not normal. And over time, Wall Street will begin to learn that you cannot ignore a company growing triple digits in a market with a $230 billion TAM and working on robotics and AI, and a unique set of humans in the loop.

Speaker #3: So we'll have augmented security agents that no one in the industry will have. How can we help you with that? So there's that kind of cross synergy is really important.

Speaker #3: And I think the second one the third one. First was financial. Second cross-selling. Third is just cultural.

Speaker #2: Yeah.

Speaker #3: One of the most difficult parts of M&A is, again, not just the integration. It's people. It's people, people, people. And trying to get everyone in the same boat rowing in the same direction is not easy.

Speaker #4: That's not something you're going to be able to ignore. The best thing that we can do, continue to improve the financial performance of the company.

Speaker #4: Continue to grow. Communicate, communicate, communicate. But at the end of the day, we know we're right; we just need to execute. So, in terms of the synergies, there are 434 clients.

Speaker #3: Sometimes public companies have to do stuff that a normal private company would never do. And vice versa. And so little by little, we got to kind of get that to work.

Speaker #4: So you might imagine a large portfolio of nationwide blue-chip clients that have only had a security force kind of footprint—I guess, pun intended.

Speaker #3: But I'll say this in good form. The security force team is highly disciplined. Command and control.

[Company Representative] (Knightscope): So you might imagine a large portfolio of nationwide blue-chip clients that have only had Security Force kind of footprint.

Bill Santana Li: So you might imagine a large portfolio of nationwide blue-chip clients that have only had Security Force kind of footprint.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

Speaker #2: Yeah.

[Company Representative] (Knightscope): I guess pun intended, and no technology.

Bill Santana Li: I guess pun intended, and no technology.

Speaker #3: Follow orders. And off you go. The kind of original technology side of Nightscope, Silicon Valley, Scrum, let's kind of pie in the sky, think about how we're going to do this.

Speaker #4: And no technology. So there's a significant opportunity for we already landed.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

[Company Representative] (Knightscope): There is a significant opportunity for, we already landed.

Bill Santana Li: There is a significant opportunity for, we already landed.

Speaker #2: Yep.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

Speaker #4: Let's go expand and be very thoughtful about—okay, please tell us what issues you're having. Not in generalities. That particular address and that particular location—what incidents have you had?

[Company Representative] (Knightscope): Let's go expand and be very thoughtful about.

Bill Santana Li: Let's go expand and be very thoughtful about.

Apoorv S Dwivedi: Yeah

Apoorv Dwivedi: Yeah

[Company Representative] (Knightscope): Okay, please tell us what issues you are having. Not by generalities, that particular address and that particular location. What incidents have you had? What is the budget? Where are you struggling? How can we be helpful? Have you thought about X, Y, and Z? What is the lighting look like? What is the signage look like? Try to be that thoughtful, trusted advisor that hopefully we can win that trust over time, and go expand with technology. Similarly, you are kind of cross-selling, doing the other way though. We have a lot of clients that have only technology, that have an existing security, I will say staffing model with a lot of the big box staffing companies, and are not too particularly fond of the quality of service.

Bill Santana Li: Okay, please tell us what issues you are having. Not by generalities, that particular address and that particular location. What incidents have you had? What is the budget? Where are you struggling? How can we be helpful? Have you thought about X, Y, and Z? What is the lighting look like? What is the signage look like? Try to be that thoughtful, trusted advisor that hopefully we can win that trust over time, and go expand with technology. Similarly, you are kind of cross-selling, doing the other way though. We have a lot of clients that have only technology, that have an existing security, I will say staffing model with a lot of the big box staffing companies, and are not too particularly fond of the quality of service.

Speaker #3: Let's collaborate and all this other thing. And for this to be successful. It's not one or the other. You actually need to think about how to do this so that you can get the best of both worlds.

Speaker #4: What's the budget? Where are you struggling? How can we be helpful? Have you thought about X, Y, and Z? What's the lighting look like?

Speaker #4: What's the signage look like? Try to be that thoughtful, trusted advisor, and hopefully we can win that trust over time and go expand with technology.

Speaker #2: Yeah.

Speaker #3: You need to add some discipline, command and control, on a little bit too much of a loose process. And then at the same time, you can't stifle everything.

Speaker #4: Similarly, you're kind of cross-selling, doing it the other way. So, we have a lot of clients that have only technology, that have an existing security—I’ll say staffing model—with a lot of the big box staffing companies.

Speaker #3: Right. I don't know if this is going to be true. We're going to end it. We're going to find out. But my gut tells me that it's probably two-thirds command and control because we're going to have a very large footprint out in the wild.

Speaker #4: And aren't too particularly fond of the quality of service.

Speaker #3: And you can't just tell an agent to say, go be autonomous. Do whatever you kind of feel is because it's not going to work.

Speaker #2: Yep.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

Speaker #4: And so for us to say, hey, listen, we offer executive protection. We have armed agents. We have unarmed agents. We will be unveiling the H1 wearable here shortly.

[Company Representative] (Knightscope): For us to say, "Hey, listen, we offer executive protection. We have armed agents. We have unarmed agents. We will be unveiling the H1 wearable here shortly, so we will have augmented security agents that no one in the industry will have. How can we help you with that?

Bill Santana Li: For us to say, "Hey, listen, we offer executive protection. We have armed agents. We have unarmed agents. We will be unveiling the H1 wearable here shortly, so we will have augmented security agents that no one in the industry will have. How can we help you with that?

Speaker #3: But at the same time, the security force team has so much knowledge, experience, and relationships and insights from the industry and that influence on the technology.

Speaker #4: So we'll have augmented security agents that no one in the industry will have. How can we help you with that? So that kind of cross-synergy is really important.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

[Company Representative] (Knightscope): So there is that kind of cross synergy is really important. I think the second one, or third one. First was financial, second cross-selling, third is just cultural.

Bill Santana Li: So there is that kind of cross synergy is really important. I think the second one, or third one. First was financial, second cross-selling, third is just cultural.

Speaker #3: We're already seeing some benefits of that. We actually have agents here today testing out the prototypes for the H1 wearable. And so I think that's where one plus one equals seven.

Speaker #4: And I think the second one and the third one—the first was financial, the second cross-selling, and the third is just cultural.

Speaker #2: Yep.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

Speaker #4: One of the most difficult parts of M&A is, again, not just the integration. It's people. It's people, people, people. And trying to get everyone in the same boat, rowing in the same direction, is not easy.

[Company Representative] (Knightscope): One of the most difficult parts of M&A is, again, not just the integration, it is people. It is people. Trying to get everyone in the same boat rowing in the same direction is not easy.

Bill Santana Li: One of the most difficult parts of M&A is, again, not just the integration, it is people. It is people. Trying to get everyone in the same boat rowing in the same direction is not easy.

Speaker #3: I agree. I think on the top line, if you think about, you know, or go to market strategy, we're uniquely positioned to go after that outcome-based approach, which, you know, we think we have the right positioning to do so.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

Speaker #4: Sometimes public companies have to do stuff that a normal private company would never do—and vice versa. So, little by little, we’ve got to kind of get that to work.

[Company Representative] (Knightscope): Sometimes public companies have to do stuff that a normal private company would never do, and vice versa. Little by little, we got to get that to work, but I will say this in good form. The Security Force team is highly disciplined. Command and control.

Bill Santana Li: Sometimes public companies have to do stuff that a normal private company would never do, and vice versa. Little by little, we got to get that to work, but I will say this in good form. The Security Force team is highly disciplined. Command and control.

Speaker #2: Yeah.

Speaker #3: Simultaneously, as you're, you know, we've talked about this, if you look at the P&L below the gross margin, the OpEx side, we're already integrating finance, integrating HR, integrating so those synergies in the shared services model internal to the corporation allows us to kind of do some of the cultural things you were talking about.

Speaker #4: But I'll say this in good form: the security force team is highly disciplined—command and control.

Speaker #2: Yep.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

Speaker #4: Follow orders. And off you go. The kind of original technology side of Nightscope, Silicon Valley, Scrum, let's kind of pie in the sky, think about how we're going to do this.

[Company Representative] (Knightscope): Follow orders, and off you go. The kind of original technology side of Knightscope, Silicon Valley, Scrum, let's kind of pie in the sky, think about how we are going to do this. Let's collaborate and all this other thing. For this to be successful,

Bill Santana Li: Follow orders, and off you go. The kind of original technology side of Knightscope, Silicon Valley, Scrum, let's kind of pie in the sky, think about how we are going to do this. Let's collaborate and all this other thing. For this to be successful,

Speaker #3: And financially, I think it's also really important that in order to be public. It costs literally millions of dollars, right?

Speaker #2: Absolutely.

Speaker #3: And just because we add more revenue and more capabilities, more everything, we can now sweat the assets that we have. So a crude example would be like, if we had solely one client, but we needed to remotely monitor the health of those machines and the security aspects of it, you still need four people to run 24/7, right?

Speaker #4: Let's collaborate and all this other thing. And for this to be successful, it's not one or the other. You actually need to think about how to do this so that you can get the best of both worlds.

Apoorv S Dwivedi: Yeah

Apoorv Dwivedi: Yeah

[Company Representative] (Knightscope): it is not one or the other. You actually need to think about

Bill Santana Li: it is not one or the other. You actually need to think about

Apoorv S Dwivedi: Yep

Apoorv Dwivedi: Yep

[Company Representative] (Knightscope): how to do this so that you can get the best of both worlds.

Bill Santana Li: how to do this so that you can get the best of both worlds.

Speaker #2: Absolutely.

Apoorv S Dwivedi: Absolutely.

Apoorv Dwivedi: Absolutely.

Speaker #4: You need to add some discipline, command and control, on a little bit too much of a loose process. And then at the same time, you can't stifle everything.

[Company Representative] (Knightscope): You need to add some discipline, command and control on a little bit too much of a loose process. At the same time, you cannot stifle everything.

Bill Santana Li: You need to add some discipline, command and control on a little bit too much of a loose process. At the same time, you cannot stifle everything.

Speaker #3: It's not. But if you added, you know, 30 more clients, do you need to 30 times 40?

Speaker #2: Right.

Speaker #4: Right? I don't know if there's going to be true. We're going to end it. We're going to find out. But my gut tells me it's probably two-thirds command and control because we're going to have a very large footprint out in the wild.

Apoorv S Dwivedi: Right.

Apoorv Dwivedi: Right.

[Company Representative] (Knightscope): Right. I do not know if this is going to be true. We are going to end it. We are going to find out, but my gut tells me that it is probably two thirds command and control because we are going to have a very large footprint out in the wild. You cannot just tell an agent to say, "Go be autonomous.

Bill Santana Li: Right. I do not know if this is going to be true. We are going to end it. We are going to find out, but my gut tells me that it is probably two thirds command and control because we are going to have a very large footprint out in the wild. You cannot just tell an agent to say, "Go be autonomous.

Speaker #2: Yeah.

Speaker #3: No. You don't need to do that. So there's some scaling. As we add there's more efficiencies as we continue to scale.

Speaker #2: Absolutely.

Speaker #3: And you're not going to, you know, quintuple the marketing department because you quintuple the revenue, right? So there's a lot of leverage coming. And as we committed during the recent non-deal roadshows, every quarter is going to be better than the last.

Speaker #4: And you can't just tell an agent to say, go be autonomous, do whatever you kind of feel, because it's not going to work.

Apoorv S Dwivedi: Right.

Apoorv Dwivedi: Right.

[Company Representative] (Knightscope): Do whatever you kind of feel is the right." That is not going to work. At the same time, the Security Force team has so much knowledge, experience, relationships, and insights from the industry, and that influence on the technology-

Bill Santana Li: Do whatever you kind of feel is the right." That is not going to work. At the same time, the Security Force team has so much knowledge, experience, relationships, and insights from the industry, and that influence on the technology-

Speaker #4: But at the same time, the security force team has so much knowledge, experience, and relationships and insights from the industry and that influence on the technology.

Speaker #3: And that's a tall order. We've been working very hard and we've got two quarters to prove it. We just need to keep at it.

Speaker #2: Question on pipeline. Any thoughts on I know we don't share pipeline data, but it looks like we're getting asked for some indication.

Apoorv S Dwivedi: Yeah

Apoorv Dwivedi: Yeah

Speaker #4: We're already seeing some benefits of that. We actually have agents here today testing out the prototypes for the H1 wearable.

[Company Representative] (Knightscope): we are already seeing some benefits of that. We actually have agents here today testing out the prototypes for the H1 wearable. I think that is where one plus one equals seven.

Bill Santana Li: we are already seeing some benefits of that. We actually have agents here today testing out the prototypes for the H1 wearable. I think that is where one plus one equals seven.

Speaker #3: I think the best thing for us to say is we have 434 clients.

Speaker #2: Wonderful.

Speaker #4: And so I think that's where one plus one equals seven.

Speaker #2: Yep.

Speaker #2: Yeah, I agree. I think on the top line, if you think about our go-to-market strategy, we're uniquely positioned to go after that outcome-based approach, which we think we have the right positioning to do as well.

Apoorv S Dwivedi: Yeah. I agree. I think on the top line, if you think about our go-to-market strategy, we are uniquely positioned to go after that outcome-based approach, which we think we have the right positioning to do so.

Apoorv Dwivedi: Yeah. I agree. I think on the top line, if you think about our go-to-market strategy, we are uniquely positioned to go after that outcome-based approach, which we think we have the right positioning to do so.

Speaker #3: Somebody can go do a guesstimate with Claude or whatever. I might have done that. I don't know. There's not an auditable number because it's literally a guesstimate from AI.

Speaker #3: But those 434 is probably three to six billion dollars. Annual security spend. If five is 850. Right? You can imagine it's somewhere in the billions range.

Speaker #4: Yep.

[Company Representative] (Knightscope): Yep.

Bill Santana Li: Yep.

Speaker #2: Simultaneously, as we've talked about this, if you look at the P&L below the gross margin, the OPEX side, we're already integrating finance, integrating HR, integrating—so those synergies in the shared services model, internal to the corporation, allow us to kind of do some of the cultural things you were talking about.

Apoorv S Dwivedi: Simultaneously, we have talked about this. If you look at the P&L below the gross margin, the OpEx side, we start already integrating finance, integrating HR, integrating. So those synergies in the shared services model internal to the corporation allows us to kind of do some of the cultural things you were talking about.

Apoorv Dwivedi: Simultaneously, we have talked about this. If you look at the P&L below the gross margin, the OpEx side, we start already integrating finance, integrating HR, integrating. So those synergies in the shared services model internal to the corporation allows us to kind of do some of the cultural things you were talking about.

Speaker #2: Yeah.

Speaker #3: So I think that's the most important focus. And then we need to focus on the technology itself. We've got a lot of we're at all-time high as a poorve noted on expenditures and R&D.

Speaker #4: And financially, I think it's also really important that in order to be public, it costs literally millions of dollars, right?

[Company Representative] (Knightscope): And financially, I think it is also really important that. In order to be public,

Bill Santana Li: And financially, I think it is also really important that. In order to be public,

Apoorv S Dwivedi: Yeah

Apoorv Dwivedi: Yeah

[Company Representative] (Knightscope): it costs literally millions of dollars, right?

Bill Santana Li: it costs literally millions of dollars, right?

Speaker #3: Why is that? Well, we've got an all-new K7 that everyone's really excited about. Takes time and money to go do that. We've got an all-new H1 wearable that's going to go on our agents and our agents only.

Speaker #2: Absolutely.

Apoorv S Dwivedi: Absolutely.

Apoorv Dwivedi: Absolutely.

Speaker #4: And just because we add more revenue and more capabilities—more of everything—we can now sweat the assets that we have. So, a crude example would be: if we had solely one client, but we needed to remotely monitor the health of those machines, and the security aspects of it, you still need four people to run 24/7, right?

[Company Representative] (Knightscope): Just because we add more revenue and more capabilities, more everything, we can now sweat the assets that we have. A crude example would be if we had solely one client, but we needed to remotely monitor the health of those machines and the security aspects of it, you still need four people to run 24/7, right?

Bill Santana Li: Just because we add more revenue and more capabilities, more everything, we can now sweat the assets that we have. A crude example would be if we had solely one client, but we needed to remotely monitor the health of those machines and the security aspects of it, you still need four people to run 24/7, right?

Speaker #3: That's going to, you know, also take some time and money.

Speaker #2: Yeah.

Speaker #3: We've got the all-new Signals platform, a piece of software that's going to orchestrate everything hardware, in terms of the robots, the stationary devices, the sensors, plus our agents, plus our mission intelligence remote monitoring.

Speaker #4: It's not. But if you added 30 more clients, do you need to do 30 times 40? No, you don't need to do that. So there's some scaling.

Apoorv S Dwivedi: Right.

Apoorv Dwivedi: Right.

[Company Representative] (Knightscope): But if you added 30 more clients, do you need to 30 times 40? No, you do not need to do that. There is some scaling as we add. There is more efficiencies as we continue to scale.

Bill Santana Li: But if you added 30 more clients, do you need to 30 times 40? No, you do not need to do that. There is some scaling as we add. There is more efficiencies as we continue to scale.

Speaker #3: That piece of software is an industry first. This is like literally we're going to remotely monitor a location in three dimensions. This is going to be absolutely exhilarating and invigorating to showcase this at GSX and actually put it into the field.

Speaker #4: As we add, there are more efficiencies as we continue to scale.

Speaker #2: Absolutely.

Apoorv S Dwivedi: Absolutely.

Apoorv Dwivedi: Absolutely.

Speaker #4: And you're not going to quintuple the marketing department because you quintuple the revenue, right?

[Company Representative] (Knightscope): You are not going to quintuple the marketing department because you quintuple the revenue, right?

Bill Santana Li: You are not going to quintuple the marketing department because you quintuple the revenue, right?

Speaker #2: Right.

Speaker #4: So, there's a lot of leverage coming. And as we committed during the recent non-deal roadshows, every quarter is going to be better than the last.

Apoorv S Dwivedi: Right.

Apoorv Dwivedi: Right.

[Company Representative] (Knightscope): There is a lot of leverage coming, and as we committed during the recent non-deal roadshows, every quarter is going to be better than the last, and that is a tall order. We have been working very hard, and we have got two quarters to prove it. We just need to keep at it.

Bill Santana Li: There is a lot of leverage coming, and as we committed during the recent non-deal roadshows, every quarter is going to be better than the last, and that is a tall order. We have been working very hard, and we have got two quarters to prove it. We just need to keep at it.

Speaker #3: Not a science fair project. So all that R&D is going to have I think a very handsome return on investment over the coming years.

Speaker #4: And that's a tall order. We've been working very hard, and we've got two quarters to prove it. We just need to keep at it.

Speaker #2: Absolutely. I think the last question is some somebody asked, I would love to hear Bill's thoughts on when he believes the public will catch on and the stock price will rise.

Apoorv S Dwivedi: A question on pipeline. Any thoughts on, I know we don't share pipeline data, but it looks like we're getting asked for some indication.

Apoorv Dwivedi: A question on pipeline. Any thoughts on, I know we don't share pipeline data, but it looks like we're getting asked for some indication.

Speaker #2: Question on pipeline. Any thoughts on—I know we don't share pipeline data—but it looks like we're getting asked for some indication.

Speaker #3: Oh, my. Like I said, I despite all the emails, texts, and voicemails, I don't control the stock price.

Speaker #4: I think the best thing for us to say is we have 434 clients.

[Company Representative] (Knightscope): I think the best thing for us to say is we have 434 clients.

Bill Santana Li: I think the best thing for us to say is we have 434 clients.

Speaker #2: Yep.

Speaker #2: You do.

Apoorv S Dwivedi: Yep.

Apoorv Dwivedi: Yep.

Speaker #3: So all I can do and the team can do is improve our financial performance of the company. We can grow the company and we can communicate, communicate, communicate.

Speaker #4: Somebody can go do a guesstimate with Claude or whatever. I might have done that. I don't know. There's not an auditable number because it's literally a guesstimate from AI.

[Company Representative] (Knightscope): Somebody can go do a guesstimate with Claude or whatever. I might have done that. I don't know. There's not an auditable proof-of-work number because it's literally a guesstimate from AI, but those 434 is probably $3 billion to $6 billion of annual security spend. If five is 850-

Bill Santana Li: Somebody can go do a guesstimate with Claude or whatever. I might have done that. I don't know. There's not an auditable proof-of-work number because it's literally a guesstimate from AI, but those 434 is probably $3 billion to $6 billion of annual security spend. If five is 850-

Speaker #3: The rest is literally up to the market. And I'll just restate what I said earlier. If you think about where the company is going, we have all the pieces all now beginning to get integrated into one holistic managed service provider.

Speaker #4: But those 434 is probably $3 to $6 billion of annual security spend. If five is $850 million, right? You can imagine it's somewhere in the billions range.

Apoorv S Dwivedi: Yeah

Apoorv Dwivedi: Yeah

[Company Representative] (Knightscope): right? You can imagine it's somewhere in the billions range.

Bill Santana Li: right? You can imagine it's somewhere in the billions range.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

Speaker #4: So I think that's the most important focus. And then we need to focus on the technology itself. We're at an all-time high, as our reports have noted, on expenditures in R&D.

[Company Representative] (Knightscope): I think that is the most important focus, and then we need to focus on the technology itself. We are at all-time high, as Apoorv noted, on expenditures in R&D. Why is that? We have an all-new K7 that everyone is really excited about.

Bill Santana Li: I think that is the most important focus, and then we need to focus on the technology itself. We are at all-time high, as Apoorv noted, on expenditures in R&D. Why is that? We have an all-new K7 that everyone is really excited about.

Speaker #3: We know that this is a massive pain point for this multi-billion dollar industry. And so if we just focus on fixing the damn problem, like you're going to get rewarded for it.

Speaker #4: Why is that? Well, we've got an all-new K7 that everyone's really excited about. Takes time and money to go do that. We've got an all-new H1 wearable that's going to go on our agents and our agents only.

Speaker #3: So the best thing the team can do is continue to focus on execution. Top line revenue growth up, cost of goods down, careful with our fixed cost basis.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

[Company Representative] (Knightscope): It takes time and money to go do that. We have an all-new H1 wearable that is going to go on our agents and our agents only. That is going to also take some time and money.

Bill Santana Li: It takes time and money to go do that. We have an all-new H1 wearable that is going to go on our agents and our agents only. That is going to also take some time and money.

Speaker #4: That's going to also take some time and money.

Speaker #3: Scale things up and get the technology to do magical things that no one in the industry is going to be able to do or can do.

Speaker #2: Yep.

Apoorv S Dwivedi: Yep.

Apoorv Dwivedi: Yep.

Speaker #4: We've got the all-new Signals platform, a piece of software that's going to orchestrate everything hardware, in terms of the robots, the stationary devices, the sensors, plus our agents, plus our mission intelligence remote monitoring.

[Company Representative] (Knightscope): We have the all-new Signals platform, a piece of software that is going to orchestrate everything, hardware, in terms of the robots, the stationary devices, the sensors, plus our agents, plus our Mission Intelligence remote monitoring. That piece of software is an industry first. This is literally, we are going to remotely monitor a location in three dimensions. This is going to be absolutely exhilarating and invigorating to showcase this at GSX and actually put it into the field, not a science fair project. All that R&D is going to have, I think, a very handsome return on investment

Bill Santana Li: We have the all-new Signals platform, a piece of software that is going to orchestrate everything, hardware, in terms of the robots, the stationary devices, the sensors, plus our agents, plus our Mission Intelligence remote monitoring. That piece of software is an industry first. This is literally, we are going to remotely monitor a location in three dimensions. This is going to be absolutely exhilarating and invigorating to showcase this at GSX and actually put it into the field, not a science fair project. All that R&D is going to have, I think, a very handsome return on investment

Speaker #3: And then put the numbers up on every queue and every K. And then the way the stock should respond is simply on the numbers.

Speaker #4: That piece of software is an industry first. This is literally we're going to remotely monitor a location in three dimensions. This is going to be absolutely exhilarating and invigorating to showcase this at GSX and actually put it into the field, not a science fair project.

Speaker #3: And that's why we urge you to look at the changes from all these years prior to what happened in the first quarter.

Speaker #2: Yeah.

Speaker #3: What happened in the second quarter, and now start thinking what the third, fourth quarter, and next year is going to look like. We are building something extremely special.

Speaker #4: So all that R&D is going to have, I think, a very handsome return on investment over the coming years.

Speaker #3: And all the pieces of the pie are all the pieces of the entire puzzle are falling in together. And I've literally and this is not the founder being the founder and going to glass half full or building a glass factory.

Apoorv S Dwivedi: Absolutely

Apoorv Dwivedi: Absolutely

[Company Representative] (Knightscope): over the coming years.

Bill Santana Li: over the coming years.

Speaker #2: Absolutely. I think the last question was from somebody who asked, "I would love to hear Bill's thoughts on when he believes the public will catch on and the stock price will rise."

Apoorv S Dwivedi: Absolutely. I think the last question is, somebody asked, "I would love to hear Bill's thoughts on when he believes the public will catch on and the stock price will rise.

Apoorv Dwivedi: Absolutely. I think the last question is, somebody asked, "I would love to hear Bill's thoughts on when he believes the public will catch on and the stock price will rise.

Speaker #3: I've never literally been this excited about Knightsgo's future in all 13 years of my career here. We've got an unbelievable team. We got unbelievable technology.

Speaker #4: Oh, my. Like I said, despite all the emails, texts, and voicemails, I don't control the stock price. You do. So all I can do and the team can do is improve our financial performance of the company.

[Company Representative] (Knightscope): Oh, my. Like I said, despite all the emails, texts, and voicemails, I don't control the stock price. You do. All I can do and the team can do is improve our financial performance of the company. We can grow the company, and we can communicate, communicate. The rest is literally up to the market. I'll just restate what I said earlier. If you think about where the company is going, we have all the pieces, all now beginning to get integrated into one holistic managed service provider. We know that this is a massive pain point for this multi-billion dollar industry.

Bill Santana Li: Oh, my. Like I said, despite all the emails, texts, and voicemails, I don't control the stock price. You do. All I can do and the team can do is improve our financial performance of the company. We can grow the company, and we can communicate, communicate. The rest is literally up to the market. I'll just restate what I said earlier. If you think about where the company is going, we have all the pieces, all now beginning to get integrated into one holistic managed service provider. We know that this is a massive pain point for this multi-billion dollar industry.

Speaker #3: We've got existing clients. We just need to focus on execution. And on that last point, how do you de-risk the execution side? You hire brilliant people.

Speaker #4: We can grow the company, and we can communicate, communicate, communicate. The rest is literally up to the market. And I'll just restate what I said earlier.

Speaker #2: Yeah. Absolutely. With that, I think this concludes our Q&A. I'll hand it back to you if you have any comments.

Speaker #4: If you think about where the company is going, we have all the pieces all now beginning to get integrated into one holistic managed service provider.

Speaker #3: Thank you, Poor, for doing this. Let me leave you with this. In the second half of the year, we expect to deliver on these four things.

Speaker #3: First, initial K7 deployments in the fourth quarter. Second, the official launch of the autonomous security force at GSX in September. Third, the initial launch of Signals or software orchestration platform.

Speaker #4: We know that this is a massive pain point for this multi-billion-dollar industry. And so, if we just focus on fixing the damn problem, you're going to get rewarded for it.

Apoorv S Dwivedi: Yeah.

Apoorv Dwivedi: Yeah.

[Company Representative] (Knightscope): If we just focus on fixing the damn problem, you're going to get rewarded for it. So the best thing the team can do is continue to focus on execution. Top line revenue growth up, cost of goods down, careful with our fixed cost basis.

Bill Santana Li: If we just focus on fixing the damn problem, you're going to get rewarded for it. So the best thing the team can do is continue to focus on execution. Top line revenue growth up, cost of goods down, careful with our fixed cost basis.

Speaker #4: So the best thing the team can do is continue to focus on execution, top line revenue growth up, cost of goods down, careful with our fixed cost basis, scale things up, and get the technology to do magical things that no one in the industry is going to be able to do or can do.

Speaker #3: And fourth, the same thing you've seen the last two quarters. So thank you to our clients for their trust, to our shareholders for their support, and most of all, to the absolutely relentless Knightsgo team one team, one mission, one force.

Apoorv S Dwivedi: Yeah.

[Company Representative] (Knightscope): Scale things up and get the technology to do magical things that no one in the industry is going to be able to do or can do, and then put the numbers up on every Q and every K. Then the way the stock should respond is simply on the numbers. That's why we urge you to look at the changes from all these years prior to what happened in the Q1.

Apoorv Dwivedi: Yeah.

Bill Santana Li: Scale things up and get the technology to do magical things that no one in the industry is going to be able to do or can do, and then put the numbers up on every Q and every K. Then the way the stock should respond is simply on the numbers. That's why we urge you to look at the changes from all these years prior to what happened in the Q1.

Speaker #4: And then put the numbers up on every Q and every K. And then the way the stock should respond is simply on the numbers.

Speaker #4: And that's why we urge you to look at the changes from all these years prior to what happened in the first quarter.

Speaker #2: Yep.

Apoorv S Dwivedi: Yeah

Apoorv Dwivedi: Yeah

Speaker #4: What happened in the second quarter, and now start thinking what the third, fourth quarter, and next year is going to look like. We are building something extremely special.

[Company Representative] (Knightscope): what happened in the Q2, and now start thinking what the Q3, Q4, and next year is going to look like. We are building something extremely special, and all the pieces of the entire puzzle are falling in together. I have literally, and this is not the founder being the founder and kind of glass half full or building a glass factory, I have never literally been this excited about Knightscope's future in all 13 years of my career here. We have got an unbelievable team. We got unbelievable technology. We have got existing clients. We just need to focus on execution. On that last point, how do you de-risk the execution side? You hire brilliant people.

Bill Santana Li: what happened in the Q2, and now start thinking what the Q3, Q4, and next year is going to look like. We are building something extremely special, and all the pieces of the entire puzzle are falling in together. I have literally, and this is not the founder being the founder and kind of glass half full or building a glass factory, I have never literally been this excited about Knightscope's future in all 13 years of my career here. We have got an unbelievable team. We got unbelievable technology. We have got existing clients. We just need to focus on execution. On that last point, how do you de-risk the execution side? You hire brilliant people.

Speaker #4: And all the pieces of the pie are all the pieces of the entire puzzle are falling in together. And I've literally and this is not the founder being the founder in kind of glass half full or building a glass factory.

Speaker #4: I've never literally been this excited about Knightscope's future in all 13 years of my career here. We've got an unbelievable team. We've got unbelievable technology.

Speaker #4: We've got existing clients; we just need to focus on execution. And on that last point: how do you de-risk the execution side? You hire brilliant people.

Speaker #2: Yep. Absolutely. With that, I think this concludes our Q&A. I'll hand it back to you if you have any comments.

Apoorv S Dwivedi: Yeah, absolutely. With that, I think this concludes our Q&A. I will hand it back to you if you have any comments.

Apoorv Dwivedi: Yeah, absolutely. With that, I think this concludes our Q&A. I will hand it back to you if you have any comments.

Speaker #4: Thank you, Paul, for doing this. Let me leave you with this. In the second half of the year, we expect to deliver on these four things.

[Company Representative] (Knightscope): Thank you, Apoorv, for doing this. Let me leave you with this. In the H2 of the year, we expect to deliver on these four things. First, initial K7 deployments in the Q4. Second, the official launch of the Autonomous Security Force at GSX in September. Third, the initial launch of Signals, our software orchestration platform, and fourth, the same thing you have seen the last two quarters. So thank you to our clients for their trust, to our shareholders for their support, and most of all, to the absolutely relentless Knightscope team. One team, one mission, one force.

Bill Santana Li: Thank you, Apoorv, for doing this. Let me leave you with this. In the H2 of the year, we expect to deliver on these four things. First, initial K7 deployments in the Q4. Second, the official launch of the Autonomous Security Force at GSX in September. Third, the initial launch of Signals, our software orchestration platform, and fourth, the same thing you have seen the last two quarters. So thank you to our clients for their trust, to our shareholders for their support, and most of all, to the absolutely relentless Knightscope team. One team, one mission, one force.

Speaker #4: First, initial K7 deployments in the fourth quarter. Second, the official launch of the autonomous security force at GSX in September. Third, the initial launch of Signals our software orchestration platform.

Speaker #4: And fourth, the same thing you've seen the last two quarters. So thank you to our clients for their trust, to our shareholders for their support, and most of all, to the absolutely relentless Knightsgo team.

Speaker #4: One team, one mission, one force.

Operator: Goodbye

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