SKYX Platforms (NASDAQ:SKYX) Chief Executive Officer Lenny Sokolow outlined the company’s product strategy, planned merger with smart-home device provider Deako, and expansion efforts during Noble Capital Markets’ Virtual Equity Conference.
Sokolow said SKYX is focused on plug-and-play electrical products designed to reduce the need for wiring during installation of lighting fixtures, ceiling fans and smart-home devices. The company’s platform includes ceiling-mounted receptacles and related products, while Deako offers modular wall switches, outlets and related devices that can be installed into a receptacle after initial wiring.
Deako Merger and Builder Distribution
SKYX recently announced its planned merger with Deako and expects the transaction to close soon, according to Sokolow. He said Deako sells to approximately 50 homebuilders, including D.R. Horton and Toll Brothers, and has products installed in 350,000 homes. Deako has sold 32 million products, he said.
Sokolow said the companies see cross-selling potential because SKYX products may be sold through Deako’s builder relationships, while Deako devices may be deployed in SKYX development projects. He described the merger as an opportunity to combine complementary product lines, apps, research and development efforts, and administrative functions.
He said the companies are already planning to rationalize technology, R&D, accounting and administrative operations following the closing. Deako shareholders are expected to own a little more than 15% of the combined company, according to Sokolow.
Asked about Deako’s financial performance and anticipated merger synergies, Sokolow said SKYX had not disclosed detailed information. He said the company expects historical information through the third quarter to be included in financial filings expected around November, potentially in an 8-K.
Sokolow said Deako’s existing builder channel could accelerate SKYX’s access to large builders. While SKYX has generally pursued relationships with developers and project owners, he said Deako built its business by working upward through the traditional builder channel.
Smart-Home Platform and Recurring Revenue Goals
The CEO said SKYX’s Generation 3 platform is intended to combine several smart-home functions in a ceiling-mounted device, including an app, speaker, smoke and carbon monoxide detection capabilities, connectivity and compatibility with platforms such as Amazon Alexa and Google.
Sokolow said the ceiling location could improve Wi-Fi and Bluetooth range compared with devices located at wall outlets. He also said the combined company intends to use Matter-compatible technology to support interoperability among smart-home products.
Beyond hardware sales, Sokolow identified potential future recurring revenue opportunities from monitoring, emergency-response-related services, subscriptions, connectivity and data. He said potential services could include 911 calling, fire and smoke monitoring, police or fire department contact, music subscriptions, audiobooks and 5G internet access.
“Those margins are very high because there’s no cost to it. It’s almost like licensing,” Sokolow said, estimating margins for certain subscription-type services could exceed 85%.
He also said the company believes data collected through connected devices could have value, although he said the method and timing of monetization remain to be determined.
Projects, Product Pipeline and Licensing
Sokolow cited multiple announced residential, hospitality and commercial projects as potential deployment opportunities. These include a $4 billion smart-city project north of Wynwood in Miami, two Trump Towers in Hyderabad, India, totaling 65 stories and 2.2 million square feet, multifamily projects in Texas and North Carolina, a smart-home community in Pittsford, New York, and hotel renovation projects in France, Prague and Durham, North Carolina.
He said SKYX expects to deploy tens of thousands of units in the Hyderabad project and has about 1 million units in its disclosed project pipeline. However, he noted that product delivery timing depends partly on developers’ permitting, construction and scheduling processes.
The company expects to reach 100,000 homes by year-end, Sokolow said. He added that SKYX hopes product deliveries for certain announced projects will begin before the end of the year.
Sokolow also said SKYX expects its turbo heater and fan products to contribute to revenue growth and margin expansion in the fourth quarter and first quarter. The company is producing larger versions of the product, including 42-inch, 52-inch and 60-inch models, he said.
On licensing, Sokolow said Eurofase signed a five-year, non-exclusive agreement to license SKYX’s plug-and-play technology. He said SKYX believes further licensing demand could develop as builders and developers adopt the technology.
SKYX has been added as a defined receptacle in the National Electrical Code, according to Sokolow. He said the company is pursuing mandatory adoption, though he did not provide a timeline. The company and Deako together hold about 120 patents and patent applications, he said.
About SKYX Platforms (NASDAQ:SKYX)
SKYX Platforms Corp. is a technology company focused on making residential and commercial properties smarter, safer and more connected. Its platform is designed to simplify the installation and use of smart-home technology by integrating connectivity and automation capabilities into common electrical and lighting products.
The company develops and markets products such as smart ceiling fans, lighting fixtures, electrical wiring devices, switches, receptacles, plugs and related smart-home solutions.
