Red Cat Holdings (RCAT) Q1 2025 Earnings Call May 14, 2025 04:30 PM ET Speaker0 Please note this event is being recorded. During this call, management will be making forward looking statements, including statements that address Redcat's expectations for future performance or operational results. Forward looking statements involve risks and other factors that that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors desc ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission File Number: 001-40202 Red Cat Holdings, Inc. (Exact name of registrant as specified in its charter) Nevada 88-0490034 (State ...

Core Insights - Red Cat Holdings, Inc. reported its financial results for Q1 2025, highlighting a revenue of $1.7 million and a net loss of $23.1 million, compared to a revenue of $6.6 million and a net loss of $6.8 million in Q1 2024 [3][8][9] - The company has raised $30 million in capital, enhancing its liquidity to support production and meet growing demand, particularly from the U.S. Army's SRR program [3][4] - Red Cat is expanding its product offerings with the introduction of Unmanned Surface Vessels (USVs) and new drone models, including the Black Widow and Edge 130, targeting various international markets [3][4] Recent Operational Highlights - The partnership with Palantir aims to optimize manufacturing and cost efficiency through the deployment of Warp Speed, enhancing supply chain management and production processes [3][4] - The company has introduced its Black Widow™ and Edge 130 drones to multiple international markets, including Latin America, the Middle East, and Asia Pacific [3][4] - Red Cat's Family of Systems now includes a new line of USVs, marking its entry into the maritime autonomy market [3][4] Financial Performance - Q1 2025 revenue was $1.7 million, with a gross loss of $850,410, and total operating expenses of $11.6 million [8] - The company ended the quarter with cash and accounts receivable totaling $9.3 million, down from $9.2 million at the end of Q4 2024 [6][8] - The annual revenue guidance for 2025 is set between $80 million and $120 million, with specific sales targets for various products [3][4]

Core Insights - Red Cat Holdings, Inc. is expanding its multi-domain capabilities by entering the unmanned surface vessel (USV) market, responding to the growing global demand for autonomous platforms [1][2][3] - The strategic partnership with a leading USV manufacturer enhances Red Cat's position in the maritime autonomy sector, aligning with U.S. defense priorities amid rising geopolitical tensions [2][3][4] Company Developments - Red Cat's new line of USVs is designed for both autonomous operation and manned-unmanned teaming (MUM-T), with over 10,000 hours of operational time in live combat missions [4][5] - The company plans to start production of a seven-meter Expeditionary Multi-Role Craft in Q3, which is tailored for high-speed, long-range maritime operations [5][6] - The USVs are built for larger payloads, extended endurance, and increased firepower, making them suitable for various military operations [5][6] Industry Context - The entry into the maritime domain is a direct response to the U.S. and its allies' need for advanced defense solutions to counter rising maritime threats, particularly in the Indo-Pacific region [2][3] - Red Cat aims to provide American-manufactured solutions that meet the urgent operational needs of U.S. and allied naval forces [2][3] - The company is positioned to shape the future of autonomous warfare and strengthen U.S. defense manufacturing through its innovative USV offerings [3][4]

Group 1: Archer Aviation Inc (ACHR) - Archer Aviation's shares increased by 22.7% to $11.14 following positive first-quarter earnings results [1] - The stock has been on an upward trend since early April, rebounding from a 320-day moving average at $5.50 [1] - ACHR is experiencing its best trading day since November and has gained 14.2% year-to-date, marking its highest levels since mid-February [1] Group 2: Options Activity - ACHR is among the most actively traded stocks in the options market, with 170,000 calls and 62,000 puts exchanged, five times the average options volume [2] - The May 11 call option is the most popular, with new positions being opened [2] Group 3: Joby Aviation Inc (JOBY) - Joby Aviation's shares rose by 2% to $7.15, marking its fifth consecutive winning session [3] - The company's first-quarter earnings were deemed "unimpressive," with losses of 18 cents per share matching estimates and revenue missing expectations [3] - Despite the disappointing earnings, JOBY's stock rose 3.4% in the post-earnings session [4] Group 4: Red Cat Holdings Inc (RCAT) - Red Cat Holdings' shares increased by 4.2% to $6.41, also aiming for a fifth consecutive gain [4] - The stock is facing potential resistance at the 80-day moving average, which is above its current price [4] - Year-to-date, RCAT's stock has decreased by 50% [4]

Core Viewpoint - Red Cat, a drone technology company, is set to report its Q1 2025 financial results on May 14, 2025, and will host a conference call to discuss these results and corporate developments [1][2]. Company Overview - Red Cat (Nasdaq: RCAT) specializes in integrating robotic hardware and software for military, government, and commercial operations [4]. - The company operates through two wholly owned subsidiaries, Teal Drones and FlightWave Aerospace, and has developed a Family of Systems that includes the Black Widow™, TRICHON™, and FANG™ drones [4]. Conference Call Details - The earnings conference call will take place at 4:30 p.m. ET on May 14, 2025, with a question-and-answer session following management's remarks [2]. - Interested parties can join the call by dialing specific numbers for domestic and international participants or through a live webcast [3].

Industry Overview - Drone technology has evolved from military applications to a disruptive force in various industries, including agriculture, logistics, and construction, providing real-time data collection and autonomous delivery solutions [1][3] - The global drone tech market is projected to grow at a CAGR of 14.3% from 2025 to 2030, while the commercial drone market is expected to grow at a CAGR of 20.8% from 2025 to 2032, driven by the adoption of small UAVs for commercial applications [5] Technological Advancements - The integration of AI and advanced technologies like 5G has enhanced the capabilities of modern drones, allowing for autonomous navigation and improved real-time data transmission [2] - Drones are being utilized in agriculture for crop monitoring and irrigation, in construction for site surveys and inspections, and in logistics for last-mile deliveries [3] Key Companies - Draganfly, Inc. (DPRO) is actively involved in various sectors, including agriculture and public safety, with a focus on commercial drone solutions [4] - Ondas Holdings Inc. (ONDS) designs and markets drone solutions for industrial and government applications [4] - Red Cat Holdings, Inc. (RCAT) specializes in robotic hardware-software integration for military and commercial uses, with recent acquisitions enhancing its product portfolio [7] - Kratos Defense & Security Solutions, Inc. (KTOS) provides high-performance unmanned aerial target drone systems and has secured significant contracts with the U.S. Navy and Air Force [10][12] Recent Developments - Draganfly launched the APEX Drone, designed for portability and dual payload capabilities, positioning the company for growth in both commercial and military markets [13] - Kratos secured a $59.3 million contract for the production of BQM-177A Subsonic Aerial Target aircraft, part of a larger $227.6 million contract, indicating strong demand for its products [12] - Red Cat is collaborating with Palantir to enhance its drone capabilities for military applications, integrating advanced navigation software into its systems [8]

Core Viewpoint - Red Cat Holdings, Inc. has successfully closed a registered direct offering, raising approximately $30 million through the sale of 4,724,412 shares of common stock, positioning the company for significant growth in the drone industry focused on aerospace and defense technologies [1][2]. Group 1: Financial Details - The offering resulted in gross proceeds of approximately $30 million before deducting placement agent fees and other expenses, and it closed on April 11, 2025 [1]. - The company intends to use the net proceeds from the offering for general corporate purposes, including working capital [3]. Group 2: Company Overview - Red Cat is a drone technology company that integrates robotic hardware and software for military, government, and commercial operations, with subsidiaries Teal Drones and FlightWave Aerospace [6]. - The company has developed a Family of Systems, including the Black Widow™, a small unmanned ISR system awarded the U.S. Army's Short Range Reconnaissance Program contract, and other products like TRICHON™ and FANG™ [6]. Group 3: Growth Strategy - Red Cat aims to drive growth through military contracts and strategic partnerships, including a recent collaboration with Palantir Technologies [8]. - The company is reiterating its 2025 revenue guidance of $80-120 million, driven by military contracts and strategic partnerships [8]. - Recent key hires include Christian Koji Ericson as CFO and Shawn Webb as President of FlightWave Aerospace, enhancing military drone production capabilities [8].

Core Viewpoint - Red Cat Holdings, Inc. has announced a registered direct offering of 4,724,412 shares of common stock, expected to generate approximately $30 million in gross proceeds before expenses [1][2]. Group 1: Offering Details - The offering is set to close on or about April 11, 2025, pending customary closing conditions [1]. - Northland Capital Markets is acting as the exclusive placement agent for this transaction [2]. - The offering is made under an effective shelf registration statement on Form S-3, which was declared effective by the SEC on December 11, 2024 [3]. Group 2: Use of Proceeds - The net proceeds from the offering will be utilized for general corporate purposes, including working capital [2]. Group 3: Company Overview - Red Cat Holdings, Inc. specializes in drone technology, integrating robotic hardware and software for military, government, and commercial applications [5]. - The company operates through two wholly owned subsidiaries, Teal Drones and FlightWave Aerospace, and has developed a Family of Systems that includes the Black Widow™, TRICHON™, and FANG™ drones [5].

Core Insights - Red Cat Holdings, Inc. has appointed Shawn Webb as President of FlightWave Aerospace Systems Corporation, effective immediately, to enhance operational strategy and manufacturing capacity [1][4] Company Overview - Red Cat Holdings, Inc. is a drone technology company that integrates robotic hardware and software for military, government, and commercial operations [7] - The company operates through two subsidiaries, Teal Drones and FlightWave Aerospace, and has developed a Family of Systems including the Black Widow™, TRICHON™, and FANG™ [7] Leadership Experience - Shawn Webb brings over 25 years of experience in operational strategy and engineering in the aerospace sector, previously serving as Vice President of Operations at AeroVironment Inc. [2][3] - At AeroVironment, he led significant capacity and revenue expansion in the Loitering Munition Systems Business Segment [2] - Webb has also held senior roles at BEGA North America and Bombardier Aerospace, focusing on continuous improvement and lean manufacturing [3] Strategic Vision - Webb's appointment is seen as crucial for scaling FlightWave's manufacturing capacity and ramping up production of the Edge 130 Blue, which will evolve into TRICHON™ with enhanced capabilities [4][5] - The defense industry is experiencing significant opportunities for small Unmanned Aerial Systems (sUAS), aligning with Red Cat's vision for integrated ISR and precision strike capabilities [5] Product Information - FlightWave Aerospace Systems Corporation manufactures dual-use VTOL drones, including the Edge 130, which is noted for its industry-leading flight endurance and AI capabilities [8]