Red Cat Holdings misses Q3 revenue estimates; stock tumbles
Investing.com -- Red Cat Holdings, Inc. (NASDAQ:RCAT), a provider of advanced drone solutions for defense and national security, saw its shares fall 10% in after-hours trading Thursday after reporting third-quarter revenue that missed analyst expectations despite substantial YoY growth.
The company reported third-quarter revenue of $9.65 million, a 646% increase YoY but below the analyst consensus of $14.12 million. Red Cat posted an adjusted EPS loss of -$0.16, worse than the analyst estimate of -$0.09. The company’s shares tumbled in after-hours trading as investors reacted to both the earnings miss and weaker-than-expected guidance.
For the fourth quarter, Red Cat provided revenue guidance of $20-23 million, below the consensus estimate of $26.4 million. The company also updated its 2025 annual revenue guidance to between $34.5-37.5 million.
"Our record-breaking third quarter revenue and the expansion of our contract with the U.S. Army clearly demonstrates the accelerating adoption of our specialized solutions within the defense and national security sectors," said Jeff Thompson, CEO of Red Cat. "We are seeing significant returns on our focused strategy, with our products being validated by major government agencies and NATO allies."
Despite the revenue miss, Red Cat highlighted several positive developments, including the expansion of its U.S. Army Limited Rate Production Tranche 2 contract to approximately $35 million. The company also reported a strong balance sheet with $212.5 million in cash and accounts receivable at the end of Q3.
Red Cat recently launched its Maritime Division, Blue Ops, focused on uncrewed surface vessel weapons systems, and expanded manufacturing capacity at its facilities. The company’s FANG FPV Drone system was added to the Department of War’s Blue UAS Cleared List, confirming its compliance with government cybersecurity requirements.
Chris Ericson, Red Cat CFO, noted that the company’s financial position gives it "the appropriate strength and ability to execute the demands of the U.S. Army’s SRR program, continue building out our USV division and take advantage of possible technology acquisitions."
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
