Red Cat (NASDAQ:RCAT) Posts Quarterly Earnings Results, Misses Estimates By $0.08 EPS

Red Cat (NASDAQ:RCAT) released its earnings results on Thursday. The company reported ($0.22) earnings per share for the quarter, missing the consensus estimate of ($0.14) by ($0.08), Zacks reports. The firm had revenue of $26.24 million during the quarter, compared to analysts’ expectations of $18.78 million. Red Cat had a negative net margin of 138.36% and a negative return on equity of 37.69%. The business’s revenue was up 849.1% compared to the same quarter last year.

Here are the key takeaways from Red Cat’s conference call:

• Record Q1 revenue of $15.5M (up 849% YoY) with gross margin turning positive to 12.7%; company reports cash of $131.9M, net working capital of $190.6M and is targeting $150–$180M annual revenue and ~30% gross margin in the short-to-medium term.
• The Black Widow is presented as a combat‑proven ISR sensor platform (deployed in three theaters, 52+ minute endurance, 10+ km range) integrated with Anduril Lattice and SignLink, with on‑hand capacity to build ~$220M worth and large addressable opportunities (Ukraine, Drone Dominance, U.S. services, Japan, Taiwan).
• Blue Ops USV manufacturing is operational in Valdosta with ~145 fiberglass hulls and ~100 3D‑printed 5m boats planned this year (management cites ~ $150M in potential USV sales) and participation in INDOPACOM/Taiwan RFPs and regional engagements.
• Strategic tech integrations and tuck‑ins — acquisition of Apium (swarming), integration work with Anduril and SignLink, ongoing talks with Palantir, and a pending Quais deal — are positioned to expand software, swarming and platform capabilities and improve competitive differentiation.
• Operating expenses rose to $29.3M (including $8.0M R&D) with expected OpEx increases in H2 and a $62.7M inventory/prepaid balance; management also warns of manufacturing tooling limits for USVs, creating near‑term execution and margin pressure despite stated liquidity.

Red Cat Price Performance

Shares of NASDAQ:RCAT traded up $0.01 during midday trading on Friday, hitting $10.37. The company had a trading volume of 8,703,799 shares, compared to its average volume of 9,665,742. Red Cat has a twelve month low of $5.71 and a twelve month high of $18.78. The stock has a market cap of $1.27 billion, a price-to-earnings ratio of -14.81 and a beta of 1.21. The business’s 50-day simple moving average is $13.39 and its 200-day simple moving average is $11.44.

More Red Cat News

Here are the key news stories impacting Red Cat this week:

• Positive Sentiment: Red Cat reported strong Q1 revenue growth, with sales rising 849% year over year to about $15.5 million, and gross margin improved meaningfully versus last year, showing the business is scaling quickly.
• Positive Sentiment: The company highlighted expanding global defense demand, including deeper Asia-Pacific defense relationships and Japan’s order for 173 Black Widow systems, which may support future bookings and investor optimism. Red Cat Holdings (RCAT) Is Down 11.6% After Surging Sales But Ongoing Losses And Japan Defense Deal
• Positive Sentiment: Ladenburg Thalmann upgraded Red Cat to strong-buy, adding a bullish analyst signal after the quarterly report.
• Neutral Sentiment: Management’s earnings call transcript is now available, giving investors more detail on the company’s execution and outlook. Red Cat Holdings, Inc. (RCAT) Q1 2026 Earnings Call Transcript
• Negative Sentiment: Red Cat posted a Q1 loss of $0.22 per share, wider than the $0.14 loss expected by analysts, and revenue came in below consensus, which likely pressured the stock.
• Negative Sentiment: Despite stronger sales, the company still reported a large net loss, underscoring ongoing profitability challenges that may limit near-term upside.

Institutional Investors Weigh In On Red Cat

Several hedge funds and other institutional investors have recently added to or reduced their stakes in RCAT. Bank of America Corp DE increased its stake in Red Cat by 407.0% during the fourth quarter. Bank of America Corp DE now owns 3,397 shares of the company’s stock worth $44,000 after acquiring an additional 2,727 shares during the last quarter. Royal Bank of Canada increased its stake in Red Cat by 76.4% during the first quarter. Royal Bank of Canada now owns 57,800 shares of the company’s stock worth $340,000 after acquiring an additional 25,031 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. increased its stake in Red Cat by 63.6% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 229,259 shares of the company’s stock worth $1,348,000 after acquiring an additional 89,095 shares during the last quarter. Goldman Sachs Group Inc. increased its stake in Red Cat by 28.7% during the first quarter. Goldman Sachs Group Inc. now owns 266,099 shares of the company’s stock worth $1,565,000 after acquiring an additional 59,334 shares during the last quarter. Finally, Cetera Investment Advisers acquired a new stake in Red Cat during the second quarter worth $97,000. Institutional investors and hedge funds own 37.97% of the company’s stock.

Wall Street Analysts Forecast Growth

RCAT has been the subject of several recent research reports. Needham & Company LLC increased their price target on Red Cat from $16.00 to $20.00 and gave the company a “buy” rating in a report on Thursday, March 19th. Wall Street Zen cut Red Cat from a “hold” rating to a “sell” rating in a report on Saturday, May 2nd. LADENBURG THALM/SH SH raised Red Cat to a “strong-buy” rating in a report on Wednesday. Northland Securities set a $22.00 price target on Red Cat in a report on Tuesday, January 20th. Finally, Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Red Cat in a report on Tuesday, April 21st. Two analysts have rated the stock with a Strong Buy rating, one has assigned a Buy rating and one has given a Sell rating to the company. Based on data from MarketBeat, the stock currently has an average rating of “Buy” and a consensus price target of $20.67.

About Red Cat

Red Cat Holdings, Inc (NASDAQ: RCAT) is a technology holding company that develops and delivers advanced robotics, autonomy, and sensing solutions for defense, national security, public safety and commercial customers. Headquartered in American Fork, Utah, the company brings together a portfolio of specialized operating businesses focused on unmanned aerial systems (UAS), mission management software, precision mapping sensors and engineering services.

Through its UAS segment, Red Cat designs and manufactures small to medium-sized fixed-wing and vertical-takeoff drones that support intelligence, surveillance and reconnaissance (ISR) missions.