Red Cat (RCAT) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of $20.2 million, up 527% year-over-year, driven by scaling drone deliveries to the U.S. Army and new contracts with Japan and NSPA in Europe.

• Gross profit reached $3.3 million, with gross margin improving to 16.1% from 11.6% in Q2 2025 and 12.7% in Q1 2026, reflecting higher sales and manufacturing efficiencies.

• Revenue diversification increased, with Army now representing 50% of revenue versus 73% in 2025; key new customers include Japan and NSPA.

• Operating expenses rose to $41.9 million, mainly due to increased R&D, sales and marketing, and G&A costs tied to business expansion and compliance initiatives.

• Net loss for Q2 2026 was $35.3 million, or $0.26 per share.

Financial highlights

• Q2 2026 revenue: $20.2 million (up from $3.2 million in Q2 2025); H1 2026 revenue: $35.7 million (636% YoY growth).

• Q2 gross profit: $3.3 million (16.1% margin); H1 gross profit: $5.2 million (15% margin).

• Operating loss: $38.6 million in Q2 2026; adjusted EBITDA loss: $31.8 million.

• Cash balance as of June 30, 2026: $325.6 million; working capital: $396.5 million.

• Operating cash outflow for H1 2026: $78.7 million, mainly due to inventory purchases.

Outlook and guidance

• Target 2026 revenue remains $150–$180 million, with significant ramp expected in H2.

• Gross margin expected to reach 30% by year-end, driven by economies of scale and product mix shift toward USVs.

• Blue Ops and Teal divisions expected to be profitable by year-end if internal targets are met.

• Sufficient liquidity is expected for at least the next twelve months due to recent capital raises.

• Management expects to capitalize on growing demand for unmanned and autonomous systems across defense and national security sectors.