Palladyne AI (PDYN) Q4 2025 earnings summary

Executive summary

• 2025 marked a pivotal year, transitioning from validation of AI products to a structural transformation via acquisitions and vertical integration, including GuideTech, Warnke Precision Machining, and MKR Fabricators, launching Palladyne Defense and expanding into advanced avionics, engineering, and manufacturing.

• The company now operates as a vertically integrated, embodied AI-centric industrial and defense platform, with expanded capabilities in AI, UAVs, manufacturing, defense, and the space domain via Air Force Research Laboratory and Portal Space Systems engagements.

• Commercially released Palladyne IQ 2.0, signed first customer, and introduced IntelliSwarm for collaborative autonomy.

• Strengthened IP portfolio with new patent issuance and four new applications related to AI software.

Financial highlights

• Q4 2025 revenue rose 118% year-over-year to $1.7M, driven by post-acquisition contributions; full-year 2025 revenue fell 33% to $5.2M.

• Q4 cost of revenue was $1.4M, R&D expense $3.8M, G&A $4.7M, and sales/marketing $1M, all up year-over-year due to acquisitions and growth.

• Q4 operating loss was $9.3M, GAAP net loss $1.5M ($0.04/share), non-GAAP net loss $6.9M ($0.16/share), with a $46M non-cash gain from warrant revaluation and a $2.5M non-cash tax benefit.

• Full-year 2025 GAAP net income was $10.0M (EPS: $0.24), compared to a $72.6M loss in 2024 (EPS: $(2.71)); non-GAAP net loss for 2025 was $25.2M (EPS: $(0.60)).

• Cash, equivalents, and marketable securities totaled $47M at year-end; Q4 net cash burn was $10M, including $8.5M from operations; backlog was $13.5M.

Outlook and guidance

• 2026 revenue guidance remains $24M–$27M, reflecting both organic growth and full-year contribution from acquired businesses, implying 357%–415% year-over-year growth.

• Backlog increased over 30% since year-end to nearly $18M by mid-February 2026.

• Expected 2026 quarterly operating cash usage is $8M–$9M, up from 2025 due to investments in SwarmOS, IQ, and new headcount.

• Guidance reflects contributions from acquisitions, backlog conversion, and monetization of new development programs.

• No specific gross margin or profitability guidance provided, but focus remains on higher-margin opportunities, especially in AI and select hardware.