Drone Manufacturer Uncovers Excellent $1B Drone Opportunity in American Military Sector
Research Report

1. Unusual Machines Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$3,000 and US$6,000.
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On December 2, the Department of War (DoW) unveiled the Drone Dominance Program (DDP) — Request for Information (RFI), marking the initial step toward what is anticipated to be one of the largest procurement cycles for low-cost, attritable small UAS in U.S. history, according to a December 3 research note featuring Unusual Machines Inc. (UMAC:NYSEAMERICAN) by Needham Analyst Austin Bohlig.

The RFI outlines a clear path for US$1 billion in orders, covering approximately 340,000 drones over four phases in the next two years. We consider this development highly significant, as it supports our belief that the unmanned supercycle is poised to accelerate substantially in 2026.

"While the program is structured to accommodate several drone OEM vendors, we believe Unusual Machines (UMAC) is particularly well positioned to capitalize on this opportunity, given its leadership as one of the few domestic suppliers of low-cost, flight-critical components essential for meeting the program’s supply-chain requirements," Bohlig wrote "Based on the anticipated unit volumes, we estimate this represents a US$170 million addressable market opportunity for UMAC across the program’s initial phases."

Details of the Drone Dominance Program RFI

The DoW's RFI initiates efforts to gather industry input for a major procurement of low-cost, attritable small UAS for one-way attack missions. An RFI is a non-binding market research tool used to gather industry capabilities, interest, and pricing insights before issuing a Request for Proposal (RFP).

According to the RFI, drone vendors will be evaluated through a series of progressively challenging Gauntlet events, with systems flown by military operators and assessed on mission performance, scalability, and compliance with NDAA and secure-supply-chain requirements, the analyst said.

The RFI outlines a four-phase procurement schedule totaling approximately US$1 billion and 340,000 drones purchased over a two-year period, with unit volumes increasing sharply in each tranche.

According to the planned award table in the RFI, the DoW intends to procure 30,000 units in Phase I (US$150 million) and 60,000 units in Phase II (US$300 million), both awarded in six-month increments beginning in February 2026. The program then scales further in 2027, with 100,000 units in Phase III (US$300 million) and 150,000 units in Phase IV (US$345 million), each delivered over subsequent six-month performance periods.

DDP Most Impactful For UMAC

"While each tranche of the DDP is structured to support multiple vendors, we believe Unusual Machines (UMAC) is uniquely positioned to benefit from this initiative given its role as one of the few domestic suppliers of low-cost, flight-critical components essential for low-cost attritable drones," the analyst wrote. "Based on our analysis, low cost attritable drones contain roughly seven key components that together represent ~ US$500 of UMAC content per drone."

With the program outlining deliveries totaling 340,000 drones over the next two years, we estimate this equates to a US$170 million total addressable market opportunity for UMAC, with potentially US$45 million available in 2026, Bohlig said. Combined with the company’s existing US$16 million backlog expected to be fulfilled in the first half of 2026, as well as emerging opportunities tied to PBAS and Skyfoundry, Bohlig said the firm continued to view UMAC as positioned for significant growth in 2026 as these programs scale.

UMAC Risks

While we are optimistic about Unusual Machines' potential as a key supplier in the reshoring of the U.S. drone supply chain, investors should be aware of several risks inherent to both the broader drone sector and UMAC's specific business model, Bohlig said. These risks could lead to short-term volatility and affect the company's ability to achieve its financial goals.

Despite strong legislative support and increasing DoW budgets, the timing of major program awards and ramp-ups for small UAS remains inherently uncertain, according to the analyst. Procurement processes can be delayed by changing defense priorities, budget negotiations, or administrative obstacles, resulting in uneven revenue recognition and inconsistent quarter-to-quarter performance.

A significant part of UMAC's growth strategy relies on key OEM customers securing major small UAS contracts, including PBAS and other attritable drone programs, he said.

"While we remain confident in these customers’ positioning, which we believe is supported by close political ties, there is no guarantee these awards will be secured or ramp at the expected pace," Bohlig wrote. "Any shortfall in customer wins could directly impact UMAC’s growth trajectory."

Other risks include raw material and component supply risks, rising competitive pressure, scaling execution, and merger and acquisition integration.