Red Cat (RCAT) Q4 2025 earnings summary

Executive summary

• Achieved record Q4 2025 revenue of $26.2 million, up 1,985% year-over-year and 172% sequentially, driven by strong defense and government demand and rapid production scaling.

• Full year 2025 revenue reached $40.7 million, a 161% increase from 2024, reflecting transformational growth and expanded program wins.

• Expanded production capacity by 520% to 254,000 sq. ft. by year-end 2025, including a new USV division and operational factory in Georgia.

• Established an office in Kyiv, Ukraine, and secured a letter of request to supply drones, marking a significant international opportunity.

• Secured new international military orders and launched new drone and USV platforms.

Financial highlights

• Q4 2025 revenue: $26.2 million (up 1,985% year-over-year, up 172% sequentially).

• Full year 2025 revenue: $40.7 million (up 161% year-over-year).

• Q4 gross margin: 4.2% (up 85% year-over-year, down 2.4% sequentially); full year gross margin: 3.1% (up 332 bps year-over-year).

• Q4 2025 gross profit was $1.1 million, reversing a loss of $1.0 million in Q4 2024; full-year gross profit was $1.3 million, compared to a loss of $30,000 in 2024.

• Net loss for Q4 2025 was $19.7 million; full-year net loss was $72.1 million, compared to $53.5 million in 2024.

Outlook and guidance

• Not providing official annual guidance until government contracts are secured, but internal scenarios range from $100 million to $170 million in 2026 revenue.

• Strong momentum in customer engagement and contract activity expected to continue into 2026, with a focus on scaling production and expanding the customer base.

• Will update the market with guidance as soon as contracts are in hand.