RCAT · Red Cat Holdings, Inc.

Red Cat Holdings delivered explosive Q1 2026 revenue growth to $15.5 million, an 849% year-over-year surge driven by strong demand for Black Widow drones, evidenced by new orders from a NATO ally via the NATO Support and Procurement Agency and a second Asia-Pacific ally for military use. Gross margins flipped positive to 12.7% from negative 52.1% a year ago, with a 199% sequential improvement from Q4 2025, reflecting better cost management and higher-margin product mix amid scaling production. However, operating expenses ballooned to $29.3 million, primarily from $16.7 million in general and administrative and $8.0 million in R&D, leading to a wider operating loss of $27.3 million and net loss of $26.6 million or $0.22 per share. Cash burned $32.0 million in operations due to inventory buildup to $62.7 million from $30.4 million at year-end, supporting growth, with ending cash at $131.9 million after $35.9 million net decrease. Strategic moves bolster positioning: acquisition of Apium Swarm Robotics enhances swarm drone and USV controls; pending Quaze Technologies buy adds wireless power for extended operations; Ukraine partnership via Spetstechnoexport targets next-gen USVs; Blue Ops manufacturing deal with HADDY scales VARIANT 7 production. CEO Jeff Thompson projects $150-180 million annual revenue short-to-medium term, citing backlog, margins, and diversity amid U.S. defense focus on UAVs/USVs, with manufacturing now operational for integrated systems.