Item 1. Business
Item 1. Business
Overview
Our mission is to make the United States of America the safest country in the world. We serve clients across commercial, government, healthcare, education, transportation, and residential markets.
We are a security technology company headquartered in Sunnyvale, California. We provide integrated, technology-enabled security solutions designed to improve safety outcomes for our clients across the United States.
Our strategy is centered on building and delivering outcomes-driven safety through the integration of three core components that encompass our Knightscope Autonomous Security Force:
1. Hardware – ASRs, ECDs, and a variety of sensing technologies;
2. Software – cloud-based platform for real-time security monitoring, data analysis and event management, diagnostics tools designed to keep ECDs operational and reliable, and tools that enable the management and monitoring of ASRs in the field; and
3. Human– on premise licensed security personnel and remote monitoring with human-in-the-loop verification, escalation, and response.
We deliver these components as an integrated managed service. By combining hardware, software, and human personnel into a unified operational framework, we seek to provide clients with end-to-end accountability rather than fragmented security tools.
Our capabilities currently focus on deterrence, detection, and reporting. We are in the process of evolving our service model to “Deter, Detect, Respond” including response capabilities, where appropriate and legally permissible. Response capabilities, when provided, are intended to be conducted by properly licensed personnel and subject to applicable federal, state, and local laws.
We believe that integrating humans as a delivery and operational mechanism for our autonomous systems enables our product suites to operate in a more multi-modal manner, consistent with how many clients structure security procurement with a multi-layer approach. Security buyers frequently expect the presence of licensed personnel as part of a comprehensive security program, and our model is designed to align with those expectations while incorporating automation and AI-driven technologies.
Recent Developments
On February 27, 2026, we completed the acquisition (the “Event Risk Acquisition”) of all the issued and outstanding membership interest of Event Risk LLC, an Indiana limited liability company (“Event Risk”) pursuant to a Securities Purchase Agreement (the “Event Risk Agreement”). As a result of the transaction, Event Risk became a wholly owned subsidiary of the Company. The aggregate purchase consideration consisted of (i) a $5.0 million cash payment at closing, (ii) repayment of Event Risk’s outstanding indebtedness of $1.1 million, (iii) the issuance of 1,724,418 shares of the Company’s Class A Common Stock, (iv) $4.0 million of deferred cash payments, payable in quarterly installments beginning March 31, 2027 through December 31, 2028 and (v) any post-closing purchase price adjustments.
See Note 11 to our financial statements, which are included in Item 8 “Financial Statements and Supplementary Data” of this Annual Report for additional information on the Event Risk Acquisition and “Item 1A. Risk Factors—Risks Related to the Event Risk Acquisition” of this Annual Report for a discussion of the associated risks. The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Event Risk Agreement filed as an exhibit to this Annual Report on Form 10-K.
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Industry Background
The U.S. security services and public safety market is large and fragmented, consisting of traditional guarding companies, hardware manufacturers, monitoring providers, and software vendors. Security coverage has historically been labor-intensive and scales proportionally with headcount.
The security services industry continues to face significant structural challenges that impact operating performance and service delivery. Rising labor costs and ongoing wage inflation have increased the cost of personnel, while persistent workforce shortages and high turnover rates create staffing instability and elevate recruiting and training expenses. At the same time, customers are demanding enhanced real-time monitoring, detailed reporting, and comprehensive documentation, increasing operational complexity. Regulatory requirements and liability considerations continue to expand, requiring greater compliance oversight and risk management. Additionally, the proliferation of cameras, devices, and other sensors has led to rapidly growing volumes of data that often require human interpretation, creating inefficiencies and increasing the burden on personnel. Collectively, these factors are reshaping industry economics and driving demand for more efficient, technology-enabled solutions. Security buyers increasingly seek integrated solutions capable of combining physical presence, automated detection, real-time monitoring, and structured escalation protocols under a single accountable provider.
Knightscope Autonomous Security Force
We are developing a multi-modal security platform consisting of hardware, software, and human operations that function together as a single unified system.
Hardware
Our current hardware offerings include:
● K1 Hemisphere (K1H) – Fixed-location presence equipped with license plate recognition, where permitted, ideal for high-traffic areas of vehicles or pedestrians
● K5 ASR – A high-visibility deterrent with rugged weatherproof capabilities, ideal for patrolling outdoor environments
● K1 Blue Light Towers (BLT) – traditional blue light emergency towers typically found on school campuses and healthcare facilities
● K1 Blue Light Emergency Phone (BLEP) – typically found in parking structures and transportation hubs
● K1 Call Box – used along highways for emergency roadside assistance
We are developing next-generation hardware platforms, including:
● K7 ASR – Designed for larger and more complex environments
● K1 Capsule (K1C) – next generation blue light technology
● K1 Super Tower (K1ST) – next generation blue light technology in tower format including area lighting
Our hardware platforms are designed to support deterrence through visible presence, detection through integrated sensors and analytics, and reporting through data capture and event documentation.
Software
We currently deploy the following software throughout our platform:
● Knightscope Security Operations Center (“KSOC”) – browser-based user interface utilized to gain real time and historical data from the network of ASRs
● Knightscope Emergency Management System (“KEMS”) – A diagnostics tool designed to monitor the health and status of deployed ECDs.
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Human Operations
Our Risk and Threat Exposure (“RTX”) analysts provide our clients with a comprehensive, human-in-the-loop remote monitoring service that enhances the capabilities of their ASRs running 24/7. Once operational for a client, RTX analysts provide proactive monitoring by verifying alerts triggered by Knightscope devices. They engage in live streaming and review of all ASR camera feeds upon receiving alerts, which may include detecting suspicious individuals, unauthorized vehicles identified through license plate recognition, or other predefined security breaches. In the event of an incident, RTX analysts can perform digital talk-downs to intervene directly, conduct virtual security tours, and generate detailed incident reports for clients. This integrated approach is intended for clients to benefit from advanced technological monitoring complemented by human expertise, leading to a more robust and responsive security posture. By combining autonomous monitoring with professional oversight, Knightscope's RTX service enhances threat detection, reduces response times, and provides clients with actionable intelligence to maintain safer environments.
Market Opportunity
Based on third-party industry reports and internal analysis, management estimates that the combined U.S. addressable opportunity for private security services, public safety and security technology, emergency communication systems, and related autonomous solutions is significant. They include the deployment of such services and technology in the following industries and settings:
● Public safety and government
● Enterprise and corporate campuses
● Critical infrastructure
● Retail and hospitality
● Healthcare
● Education
● Transit and smart cities
● Residential and community
For context, we estimate the U.S. security services industry, which term for Knightscope encompasses a number of direct and related industry categories, such as public safety infrastructure, transportation safety, education security, digital security, and critical infrastructure, among others, to have a total addressable market worth upwards of $230 billion in 2026. Additional spending on public safety technology, emergency communication infrastructure, AI-powered analytics, and associated services contribute to the size of the broader opportunity. These estimates are derived from industry research and internal assumptions and may not reflect actual revenue potential and are not indicative of our future performance or market penetration.
Business Strategy
Our strategy is focused on scaling an integrated Knightscope Autonomous Security Force through:
● Expansion of licensed guarding capabilities, including organic growth and potential acquisitions;
● Deployment of autonomous systems within guarding contracts;
● Expansion of software-driven orchestration; and
● Integrating enforcement services to our deterrence, detection, and reporting capabilities.
Security procurement processes frequently require licensed guarding providers capable of assuming contractual accountability. By operating licensed guarding services, we are able to compete for comprehensive contracts and deploy automation within those engagements.
We believe that integrating humans and autonomous systems enables a multi-modal operating model that more closely aligns with client expectations for security delivery.
Over time, increased software integration may alter site-level economics. However, such outcomes depend on operational execution, customer adoption, labor conditions, regulatory compliance, and technological performance.
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Research and Development
Our research and development activities are focused on advancing next-generation hardware platforms and core software capabilities that support our integrated Knightscope Autonomous Security Force platform. These efforts are directed primarily toward the development of the following:
● K7 ASR – Designed to address the security needs of large, complex environments such as airports, industrial zones, and university campuses.
● K1 Capsule and Super Tower – Defining the next generation of blue light technologies and capabilities into a comprehensive offering designed to provide multiple features to enhance security within a single unit, making it a valuable addition to high-risk or remote areas.
These efforts are intended to expand deployment flexibility and improve operational reliability across commercial, institutional, and government environments. Product development and release timing is subject to, among other things, engineering, regulatory, capital and supply chain constraints, component availability, testing outcomes, and certification requirements.
Intellectual Property
The Company holds twelve patents collectively related to its ASRs, the security data analysis and display features of the KSOC and its parking monitor feature that will begin to expire starting January 16, 2035. The Company owns a trademark registration for its name “Knightscope” in the U.S. The Company relies and expects to continue to rely on a combination of confidentiality agreements with its employees, consultants, and third parties with whom it has relationships, as well as trademark, copyright, patent, trade secret, and domain name protection laws, to protect its proprietary rights.
Manufacturing and Suppliers
We manufacture and assemble our products at our facility in Sunnyvale, California using components sourced from a network of domestic and international suppliers. Our supply chain includes mechanical components, electronic assemblies, batteries, imaging systems, communication modules, and other specialized parts.
During 2025, we experienced significant supply chain constraints, including increased lead times, limited component availability, higher logistics costs, and pricing volatility. These challenges were driven in part by global supply chain disruptions, electronic component shortages, inflationary pressures, and tariff-related cost increases. As a result, we experienced intermittent interruptions in production schedules and increased bill-of-material costs, particularly affecting our ECD product line.
Certain components used in our ECD products and other platforms are sourced from single suppliers or from a limited number of qualified suppliers. In some cases, these components require certification, customization, or regulatory compliance that limits short-term substitution. During 2025, extended lead times from certain single-source or limited-source suppliers materially affected our ability to meet production schedules and customer delivery timelines. These disruptions contributed to higher input costs, inconsistent production cadence, and reduced sales in certain periods.
While we maintain relationships with multiple suppliers across our broader component base and seek to diversify sourcing where feasible, alternative suppliers for certain specialized components may not be immediately available or may require additional engineering validation and qualification. Transitioning to alternative suppliers can require testing, redesign, certification, and incremental cost.
Tariffs and trade policy changes affecting imported components have also increased input costs for certain materials and subassemblies. We may be unable to fully offset such increases through pricing adjustments or supplier negotiations.
We continue to evaluate supply chain resilience initiatives, including supplier diversification, inventory management strategies, and longer-term procurement agreements. However, global supply chain volatility, component shortages, geopolitical factors, inflation, and transportation constraints may continue to impact production timelines, margins, and our ability to meet customer demand.
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Next-generation hardware platforms, including the K7 and K1 configurations, may require additional supplier qualification, tooling, and component sourcing efforts, which could further expose us to supply chain risks and capital requirements.
See Item 1A. Risk Factors—Risks Related to Our Business and the Global Economy for additional discussion of supply chain, tariff, and component availability risks.
Competition
We operate in a competitive and fragmented market and compete across multiple segments of the physical security and public safety industries. Our competitors include:
● Traditional security guard providers, including national and regional firms delivering on-site personnel-based services;
● Security system integrators that design, install, and maintain surveillance and access control systems;
● Surveillance hardware manufacturers offering cameras, sensors, and ECDs;
● Remote monitoring service providers; and
● Robotics and autonomous systems companies developing ground-based or aerial patrol technologies.
Some competitors focus on a single component of the security value chain, while others offer bundled services. Many have longer operating histories, larger customer bases, greater brand recognition, broader geographic reach, and significantly greater financial and operational resources than we do.
Competition is based on factors including service reliability, pricing and total cost of ownership, regulatory compliance and licensing, technological performance, integration capabilities, reputation, and financial stability. In certain cases, customers may elect to perform security functions internally rather than engage third-party providers.
Our operating model integrates licensed security personnel with autonomous hardware and software within a managed service framework. This structure allows us to compete for contracts that require licensed guarding capabilities while incorporating technology-enabled monitoring and detection systems. Moreover, with the completion of the Event Risk Acquisition and integrating licensed response services with autonomous machines and AI-driven orchestration software, we are building a unified operating model designed to deliver deterrence, detection, and response as one coordinated system that we believe will expand our competitive footprint. Our ability to compete effectively depends on continued product development, operational execution, cost management, regulatory compliance, and customer adoption.
Government Regulation
Our operations are subject to extensive federal, state, and local laws and regulations that govern security services, technology deployment, data handling, labor practices, and trade compliance. Regulatory requirements vary by jurisdiction and may change over time, potentially increasing compliance costs or operational complexity.
In addition, we are subject to a variety of laws and regulations relating to privacy, data protection, cybersecurity, and the use of certain technologies that may collect or process information. Our products and cloud-based platforms may collect, process, store, and transmit data, including video, audio, geolocation, and other information generated in connection with customer deployments. The legal and regulatory landscape governing privacy, data protection, cybersecurity, artificial intelligence (“AI”), and automated technologies is rapidly evolving at the federal, state, and local levels. These laws and regulations may impose requirements relating to data handling, security safeguards, breach notification, transparency, and contractual obligations. Compliance with these evolving requirements may require us to implement and maintain appropriate administrative, technical, and physical safeguards, update internal policies and procedures, and incur additional compliance and litigation-related costs. Failure to comply with applicable requirements could result in investigations, enforcement actions, litigation, monetary penalties, contractual liability, or reputational harm.
As a provider of services to U.S. federal agencies, we are also subject to certain information security and compliance requirements applicable to government contractors. These requirements may include ongoing monitoring, documentation, and assessment obligations. Failure to maintain required authorizations or comply with applicable standards could adversely affect our ability to perform under government contracts.
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Compliance with these regulatory requirements may require ongoing investment in personnel, processes, and technology. Regulatory changes, enforcement actions, or noncompliance could result in fines, penalties, operational restrictions, reputational harm, or increased costs.
Backlog and Seasonality
As of December 31, 2025, the Company had a total backlog of approximately $2.8 million, comprised of $0.7 million related to ASR orders and $2.1 million related to orders for ECD.
We have not experienced any significant effects relating to seasonality for our products and services.
Human Capital
As of December 31, 2025, the Company had 90 full-time employees working out of our combined headquarters and manufacturing facility in Sunnyvale, California as well as remotely. As a result of the Event Risk Acquisition, which was completed on February 27, 2026, our workforce has increased significantly to over 400 employees.
We are not a party to any collective bargaining agreements.
The Company believes that our future growth and success will depend in part on our ability to attract and retain highly skilled employees. The executive management team is responsible for developing and executing the Company’s human capital strategy. The human capital strategy includes the attraction, acquisition, engagement, and development of the Company’s employees as resources allow.
Available Information
We file reports and other information with the SEC, which are accessible on the SEC’s website at www.sec.gov. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available, free of charge, on our website at ir.knightscope.com. We make these reports available through our website as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the SEC. We regularly post important information and updates on our investor relations website at ir.knightscope.com. The information provided on, or accessible through, our website is not a part of, or incorporated into, this Annual Report on Form 10-K. You may also access this information, free of charge, at the SEC’s website at http://www.sec.gov.
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