Arrive AI (NASDAQ:ARAI) reported modest recurring revenue and a wider first-quarter loss while emphasizing operational milestones tied to its autonomous logistics infrastructure platform, including supply chain changes, software development progress and plans for broader deployment of its Arrive Point systems.
Chairman, CEO and Founder Dan O’Toole said the company is still early in its commercialization cycle and is focused on what he called “milestones per quarter,” rather than traditional financial metrics such as revenue or earnings per share. O’Toole compared the company’s current stage to an early-stage pharmaceutical company that is measured by development, validation, manufacturing readiness and commercialization preparation before scaled revenue arrives.
Revenue Remains Early as Loss Widens
Chief Financial Officer Todd Pepmeier said Arrive AI generated first-quarter revenue of $14,925, all of which came from recurring subscription revenue from deployed Arrive Points. In response to an analyst question, Pepmeier said more than 90% of reported revenue came from the company’s deployment at Hancock Health, with one other small revenue deployment active during the quarter.
The company reported a first-quarter net loss of $6.4 million, compared with a loss of about $2 million in the same quarter of 2025. Pepmeier said the increase was primarily due to higher operating expenses and non-cash items related to the company’s convertible note facility.
Arrive AI ended the quarter with $5.7 million in cash and $2.8 million in short-term investments, for total cash and short-term investments of about $8.5 million. Pepmeier said the balance sheet was strengthened by a $10 million draw in January 2026 from the company’s existing credit facility.
The company’s quarterly cash burn rate is approximately $3 million, driven mostly by salary costs and research and development expenses. Pepmeier said expenses are expected to remain near that level in the short term before increasing modestly in the fourth quarter.
AP3 Improvements and Next-Generation Platform in Focus
O’Toole said Arrive AI has made progress in stabilizing and optimizing AP3 production through a new manufacturing partnership in India. He said the arrangement has improved supply chain reliability, cost structure and unit delivery speed.
The company remains on track for an improved AP3 release in July, with broader availability expected beginning in October. O’Toole said the July release is not a complete redesign but a refinement focused on reliability, deployment readiness and customer scalability.
Arrive AI is also working on its next-generation platform, internally referred to as APX. O’Toole said the company expects early APX prototypes in the coming development cycle and described the platform as a step forward in functionality, manufacturability and long-term scalability.
Chief Operating Officer Mark Hamm said the company slowed down last quarter to incorporate learnings from AP3 units in the field, including at Hancock Health, while improving the AP3 supply chain and pulling forward some next-generation technologies. Hamm said AP3 units should be available in higher quantities in the fourth quarter.
Arrive OS and In-House Software Development Advance
O’Toole said the company has completed much of the foundational work for Arrive OS, a software layer intended to unify deployment management, monitoring, integrations and future network functionality across the Arrive ecosystem. He said phased rollout activity is expected to begin in the third quarter.
Arrive AI has also brought software development fully in-house following an internal reorganization. O’Toole said the company has removed portions of its legacy software stack and replaced them with internally developed systems that are improving performance and iteration speed on current AP3 units.
“We own and control all of our software that is being built in-house,” O’Toole said, adding that the move is saving the company time and money while giving it greater control over its technology roadmap.
Capital Strategy Includes Standstill Agreement
Pepmeier said Arrive AI expects to file a shelf registration statement with the SEC, calling it standard corporate practice and saying it does not reflect immediate financing plans. He said the filing is intended to give the company flexibility to raise capital when conditions are favorable.
The company also reached a standstill agreement with Streeterville Capital through the end of the year. Pepmeier said the agreement should reduce volatility tied to prior conversion activity and provide conditions for more natural price discovery. He added that Arrive AI believes it has sufficient capital available to support its business plan through the standstill period under ordinary market conditions.
During the question-and-answer session, Pepmeier said the company had roughly eight months of runway at quarter-end based on current liquidity and burn rate, and that $19 million remains available on the Streeterville facility if Arrive AI chooses to use it. He also said the company is putting in place an at-the-market facility to potentially raise capital at a lower cost.
Healthcare, International and Residential Opportunities Discussed
O’Toole described Hancock Health as an important proof point for Arrive AI, saying it has helped demonstrate how automation can keep healthcare professionals focused on higher-value activities. Chief Strategy Officer Neerav Shah said labor pressure in healthcare, including nursing shortages, supports the use case for reducing burdens on nurses.
Asked about drone approvals, Hamm said drone delivery still faces hurdles, though some regions, including Texas, are active. He said ground robots, traditional logistics couriers and delivery services are already active across many campuses, and Arrive AI is pursuing those opportunities.
On international opportunities, O’Toole said the company is taking a “home first” approach because it is more cost-effective to deploy resources and learn close to home. Shah said regulations remain a factor for beyond visual line of sight drone operations, while Chief Legal Counsel John Ritchison said Arrive AI has 10 issued U.S. patents, more than 14 additional patents in the pipeline and 77 international patents pending, with more than 10 issued or allowed internationally.
O’Toole also said residential delivery infrastructure represents a major long-term opportunity, noting that the company is evaluating new subdivisions and housing developments. He said Arrive AI is developing more modern-looking products for residential and broader infrastructure use.
O’Toole closed the call by noting that the company marked the one-year anniversary of its Nasdaq debut and said Arrive AI has grown to nearly 50 employees. He said the company remains focused on executing its roadmap, expanding deployments and positioning itself for autonomous logistics infrastructure opportunities.
About Arrive AI (NASDAQ:ARAI)
We were incorporated on April 30, 2020, in the State of Delaware under the name of Dronedek Corporation. The Company changed its name to Arrive Technology Inc on July 27, 2023. The Company changed its name to Arrive AI Inc on September 30, 2024. We are a developmental technology company with a focus on designing and implementing a commercially viable smart mailbox and platform system for smart, secure, and seamless exchange of packages, goods, supplies, food, and medications between people, through the use of robots, and drones.
