Red Cat Holdings Q2 Earnings: Revenue, EPS Miss Estimates As Drone Company Prioritizes Long-Term Growth Over Short-Term Sales

Red Cat Holdings Inc RCAT reported second-quarter financial results for fiscal year 2025 after the bell on Monday. Here’s a rundown of the report.

What Happened: Red Cat reported second-quarter revenue of $1.53 million, missing analyst estimates of $4.13 million. The drone technology company reported a second-quarter loss of 18 cents per share, missing analyst estimates for a loss of eight cents per share, according to Benzinga Pro.

“In the second half of 2024, our company decided to focus on the Black Widow, anticipating its success in the SRR final production contract,” said Jeff Thompson, CEO of Red Cat. 

“We halted production of the Teal 2 to retool for the Black Widow, prioritizing long-term growth over short-term revenue. This strategy has proven successful, enabling us to meet the demands of the new Army contract and all other Black Widow sales and programs of record while managing critical technology integration through our Red Cat Futures Initiative partners. We are now well-positioned to fulfill these demands.”

Red Cat ended the quarter with $5.7 million in cash and accounts receivable. The company noted that it has closed on an additional $6 million in financing since the end of the quarter.

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What’s Next: Red Cat expects full-year revenue for calendar year 2025 of $80 to $120 million.

“We are also pleased to announce our partnership with Palantir. With Palantir’s Artificial Intelligence and visual navigation, we believe the Black Widow is one of the most capable drones ever fielded by the Department of Defense. This rucksack-portable drone, powered by Palantir’s software, will boost revenue per drone and increase gross margins,” Thompson said.

Red Cat on Monday announced a partnership with Palantir Technologies Inc PLTR to integrate navigation software into its Black Widow drones. The collaboration is expected to help transform autonomous small unmanned aircraft systems operations for modern warfare.

Red Cat’s management team will further discuss highlights from the quarter on a call with analysts and investors at 4:30 p.m. ET.

RCAT Price Action: Red Cat Holdings shares were down 13.88% in after-hours, trading at $9.04 at the time of publication Monday, according to Benzinga Pro.

Photo: MAcroEcon via Shutterstock