Red Cat Holdings slashes revenue forecast after $16M quarterly loss
Red Cat Holdings, a leading provider of uncrewed aerial and watercraft systems, has revised its annual revenue outlook significantly downwards. The company also reported a substantial net loss for the quarter and a significant miss on its third-quarter revenue. Despite these setbacks, Red Cat has secured a major contract with the U.S. Army and launched a new maritime division.
Red Cat's annual revenue projection has been drastically reduced to $34.5-$37.5 million, a significant drop from the previous estimate of $80-$120 million. This revision comes after the company missed its third-quarter revenue forecast, reporting only $9.65 million against analyst expectations of $16.7 million. The company's net loss for the quarter totaled $16.02 million, with a loss per share of $0.16, nearly double the forecasted $0.07-$0.09.
On a positive note, Red Cat has expanded its contract with the U.S. Army for the Short-Range Reconnaissance (SRR) program to approximately $35 million, focusing on its Black Widow drone system. The company has also launched Blue Ops, a new maritime division focused on uncrewed watercraft, and opened a 155,000-square-foot production facility in Georgia. Despite these advancements, Red Cat's stock has declined in nine of the last ten trading sessions, trading well below its moving averages. The stock plunged nearly 10% on Thursday and another 7.5% on Friday, with total losses over the week reaching nearly 24%.
Red Cat Holdings faces significant financial challenges, with a drastically reduced revenue outlook and substantial losses. However, the company has secured a major contract with the U.S. Army and expanded its offerings with the launch of Blue Ops. Investors will closely watch Red Cat's progress as it navigates these challenges and continues to grow its uncrewed aerial and watercraft systems business.
