0001819810-26-000063
SEC filingRedwire's Q1 2026 revenue surged 58% to $96.97M on the Edge Autonomy acquisition, but net loss widened to $76.5M from $2.9M, driven by $42.5M of accelerated equity compensation.
Redwire's first-quarter 2026 results were heavily shaped by the June 2025 acquisition of Edge Autonomy (Redwire Defense Tech Intermediate Holdings, LLC). Total revenue increased 58% to $96.97 million, from $61.40 million in the year-ago quarter. The acquisition contributed $36.4 million of revenue, while the legacy Space segment was essentially flat at $52.67 million versus $52.13 million. Management noted a favorable shift in contract mix also added $4.0 million, partially offset by $4.8 million of incremental net unfavorable EAC adjustments versus the prior year.
Gross profit expanded to $25.81 million from $9.04 million, a 185% improvement, and gross margin rose to 27% from 15%. The margin expansion was primarily driven by the Edge Autonomy acquisition, which contributed $17.1 million of gross profit. Operating expenses grew sharply: SG&A increased to $82.89 million from $18.75 million, reflecting $42.1 million of accelerated Edge Incentive Unit vesting within the Defense Tech segment. Research and development spending jumped to $12.58 million from $0.81 million, as the company invested in high-potential opportunities and Edge Autonomy-related R&D. As a result, operating loss widened to $69.70 million from $14.32 million. Net loss of $76.50 million compared with a net loss of $2.95 million, and diluted EPS was $(0.40) versus $(0.09).
At March 31, 2026, Redwire reported total assets of $1,511.13 million, up from $1,449.14 million at December 31, 2025. Cash, cash equivalents and restricted cash stood at $145.21 million, an increase of $50.03 million from the end of 2025. The company had $144.51 million in cash and cash equivalents and $30.0 million of available borrowings under its existing credit facilities. Inventory increased to $69.35 million from $55.85 million, and contract assets increased to $61.44 million from $44.02 million, reflecting production timing. Deferred revenue also rose to $79.85 million from $60.12 million, helped by increased bookings with advanced payments.
Debt totaled $90.33 million gross at quarter-end, including a $90.0 million JPMorgan term loan, with unamortized discounts and issuance costs reducing net debt to $88.20 million. In February 2026, the company refinanced its JPMorgan credit agreement into an amended and restated facility that provided a $30 million revolving credit facility (maturing May 31, 2029) and a new $90 million term loan maturing May 31, 2029. The refinancing resulted in a $2.5 million loss on extinguishment. The Adams Street credit agreement was terminated in February 2026 without penalty. Goodwill increased slightly to $775.97 million due to measurement period adjustments, and intangible assets net of amortization were $326.70 million.
Operating cash flow used $6.67 million in Q1 2026, an improvement from $45.08 million used in Q1 2025. The improvement occurred despite a much larger net loss because non-cash charges were substantial: depreciation and amortization totaled $11.25 million, and equity-based compensation was $46.74 million. Working capital provided $6.95 million of positive cash flow, including a $19.82 million increase in deferred revenue and a $12.82 million decrease in accounts receivable, partially offset by a $14.08 million increase in inventory and a $17.64 million increase in contract assets.
Investing activities used $6.04 million, including $4.76 million for property, plant and equipment and $1.28 million for intangible assets. Financing activities provided $63.08 million, driven by $65.32 million of proceeds from issuance of common stock, primarily through the ATM facility, and $89.80 million of debt proceeds, partially offset by $88.08 million of debt repayments. Free cash flow was not explicitly disclosed; however, the operating cash outflow plus capital expenditures of $6.04 million implies a negative free cash flow of roughly $12.7 million for the quarter, based on the disclosed components. The company ended the quarter with cash of $145.21 million, up from $95.18 million at the start of the quarter.
Management attributed the revenue and gross margin expansion to the Edge Autonomy acquisition and favorable contract mix, while noting that unfavorable EAC adjustments in the Space segment reduced gross profit by $1.10 million net. The book-to-bill ratio was 1.92, and contracted backlog increased to $498.08 million from $411.25 million at December 31, 2025. Remaining performance obligations totaled $393.4 million, with approximately 68% expected to be recognized within the next twelve months.
The company highlighted several recent developments, including a $12.8 million contract for ELSA solar array wings, purchase orders exceeding $20 million for the Stalker Block 30 UAS program, and a NASA award of $4.0 million for the International Space Station. It also noted that its advanced imaging and navigation technology launched on the Artemis II mission subsequent to quarter-end.
Management stated its belief that existing sources of liquidity will be sufficient to meet working capital and debt service obligations for at least the next twelve months. No formal quantitative guidance was provided. Risks discussed in the filing include the NASA strategic shift away from the Lunar Gateway, potential impacts from tariffs, reliance on U.S. government contracts, and the risk that sales to Ukraine decline. The company also identified material weaknesses in internal control over financial reporting, including incomplete deployment of process-level controls and IT general controls for European operations and the recently acquired Redwire Defense Tech business, though it noted these weaknesses did not result in a material misstatement in the condensed financial statements.
Segment-wise, Space revenue was $52.67 million, up 1% year-over-year, with operating income of $(4.00) million and an operating margin of -8%. Defense Tech revenue was $44.30 million, up 378%, but operating loss was $(46.90) million, reflecting the accelerated equity compensation charge. Segment Adjusted EBITDA was $3.72 million in total: $(1.65) million for Space and $5.36 million for Defense Tech.
Net EAC adjustments were unfavorable by $1.10 million before taxes, driven by $6.8 million of unfavorable adjustments in the Space segment, partially offset by $5.6 million of favorable adjustments in Defense Tech, including the reversal of loss reserves. Revenue by customer group showed National Security rising to $45.97 million from $19.47 million, Commercial and other increasing to $30.89 million from $23.79 million, and Civil space increasing to $20.10 million from $18.13 million.
Other notable items: the company recognized $46.74 million of total equity-based compensation, of which $42.06 million was in SG&A and $0.47 million in cost of sales. Private warrants outstanding were 2,633,195 at March 31, 2026, with a fair value liability of $4.53 million. Convertible Preferred Stock remained at 46,505.13 shares, with a liquidation preference of $136.67 million. Related party revenue was $0.16 million in the quarter. The number of shares outstanding increased to 198,918,728 from 191,915,804 at December 31, 2025, mainly due to ATM sales of 6,942,924 shares in Q1 2026.