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If you enjoyed this, consider Ian's Insider Corner to enjoy access to similar initiation reports for all the new stocks that we buy. Membership also includes an active chat room, weekly updates, and my responses to your questions.Ian leads the investing group Ian's Insider Corner . Features of the group include: the Weekend Digest which covers everything from new ideas to updates on current holdings and macro analysis, trade alerts, an active chat room, and direct access to Ian. Learn More .Ian Bezek is a f ...

Redwire (RDW) 2025 Conference September 03, 2025 04:10 PM ET Speaker0Conrad, SVP on the aerospace and defense equity research team at Jefferies, and welcome to our annual Jefferies Industrial Conference. Very excited to have Peter Cannito, chairman and CEO of RedWire joining us today. I think we're gonna you're gonna give a a brief presentation and then we'll do a little bit of fireside chat. Or was that wrong?Speaker1Yeah. No, Greg. I think we're just eager to hear your questions.Speaker0Okay. Perfect. May ...

Core Insights - Pomerantz LLP is investigating potential securities fraud or unlawful business practices by Redwire Corporation and its officers/directors [1] Financial Performance - Redwire reported Q1 2025 revenue of $61.4 million, missing consensus estimates by $13.14 million, marking a 30.1% year-over-year decline [3] - The company attributed delays in U.S. government contract awards to leadership transitions and shifting budget priorities [3] - Following the Q1 results, Redwire's stock price fell by $0.75, or 6.63%, closing at $10.56 per share [4] - For Q2 2025, Redwire revised its revenue outlook to $470 million to $530 million, indicating a 43.2% compound annual growth rate from 2023 to 2025 at midpoint, but reduced from previous guidance [5] - The company also withdrew its adjusted EBITDA forecast for 2025 due to volatility in government contracting and project cost challenges [5] - After the Q2 announcement, Redwire's stock price dropped by $4.23, or 30.87%, closing at $9.47 per share [6]

Core Insights - Gabelli Funds, LLC is hosting the annual Aerospace & Defense Symposium on September 4, 2025, at The Harvard Club in New York City, focusing on strong demand outlook and high barriers to entry in the Aerospace and Defense industry [1] - The symposium will feature top executives from over ten companies, discussing themes such as defense spending, aftermarket opportunities, and M&A potential [1] Agenda Highlights - The event will start at 7:30 AM with a welcome and introduction by the Gabelli Funds Team [2] - Notable companies participating include Astronics Corporation, Textron Inc., Moog Inc., HEICO Corporation, and Elbit Systems Ltd., among others, with scheduled presentations throughout the day [2][3] - The agenda includes one-on-one meetings with management, providing attendees with networking opportunities [1]

Core Insights - Pomerantz LLP is investigating potential securities fraud or unlawful business practices by Redwire Corporation and its officers/directors [1] Financial Performance - Redwire reported Q1 2025 revenue of $61.4 million, missing consensus estimates by $13.14 million, marking a 30.1% year-over-year decline [3] - The company attributed delays in U.S. government contract awards to leadership transitions and shifting budget priorities [3] - Following the Q1 results, Redwire's stock price fell by $0.75, or 6.63%, closing at $10.56 per share [4] - For Q2 2025, Redwire revised its revenue outlook to $470 million to $530 million, indicating a 43.2% compound annual growth rate from 2023 to 2025 at midpoint, but reduced from previous guidance [5] - The company also withdrew its adjusted EBITDA forecast for 2025 due to volatility in government contracting and project cost challenges [5] - After the Q2 announcement, Redwire's stock price dropped by $4.23, or 30.87%, closing at $9.47 per share [6]

Group 1 - Gabelli Funds, LLC is hosting the annual Aerospace & Defense Symposium on September 4, 2025, at The Harvard Club in New York City, focusing on strong demand outlook and high barriers to entry in the industry [1] - The symposium will feature top executives from over ten companies, discussing themes such as large aftermarket opportunities, growth exceeding GDP, defense spending, and M&A potential [1] - Attendees will have the opportunity for one-on-one meetings with management, enhancing networking and investment insights [1] Group 2 - Featured companies at the symposium include AIRO Group Holdings, Elbit Systems, Albany International, Graham Corporation, and several others, indicating a diverse representation within the Aerospace and Defense sector [2] - The event is set to start at 8:30 am, providing a structured schedule for discussions and networking [3]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Q2 2025 unaudited financials show total assets surged to **$1.51 billion** due to the Edge Autonomy acquisition, alongside increased net losses and significant cash used in operations [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects a substantial increase in total assets and a shift to positive shareholders' equity, primarily driven by the Edge Autonomy acquisition - Total assets increased dramatically to **$1.51 billion** as of June 30, 2025, from **$292.6 million** at December 31, 2024, primarily driven by the Edge Autonomy acquisition, which resulted in a significant increase in Goodwill (to **$789.3 million**) and Intangible Assets (to **$396.1 million**)[12](index=12&type=chunk) Condensed Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $244,522 | $125,925 | | Goodwill | $789,254 | $71,161 | | Intangible assets, net | $396,130 | $61,788 | | **Total Assets** | **$1,508,186** | **$292,617** | | **Total Current Liabilities** | $167,429 | $149,343 | | Long-term debt, net | $185,464 | $124,464 | | Warrant liabilities | $23,014 | $55,285 | | **Total Liabilities** | **$448,701** | **$344,526** | | **Total Shareholders' Equity (Deficit)** | **$907,592** | **($188,714)** | - Total shareholders' equity shifted from a deficit of **$188.7 million** to a positive equity of **$907.6 million**, mainly due to a large increase in Additional Paid-in Capital from stock issued for the Edge acquisition and a common stock offering[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) The statements of operations show a significant decline in revenues and a swing to gross loss, leading to substantially increased net losses for Q2 and YTD 2025 Key Operating Results (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $61,760 | $78,111 | $123,155 | $165,903 | | Gross Profit (Loss) | ($19,064) | $12,984 | ($10,023) | $27,809 | | Operating Income (Loss) | ($91,891) | ($7,130) | ($106,208) | ($10,707) | | Net Income (Loss) | ($96,979) | ($18,087) | ($99,927) | ($26,183) | | Basic and Diluted EPS | ($1.41) | ($0.42) | ($1.66) | ($0.59) | - Revenues decreased **21%** in Q2 2025 compared to Q2 2024, with the company swinging from a gross profit of **$13.0 million** in Q2 2024 to a gross loss of **$19.1 million** in Q2 2025[15](index=15&type=chunk) - Operating expenses increased significantly, driven by a sharp rise in Selling, General and Administrative (SG&A) expenses to **$54.5 million** and Transaction Expenses to **$16.6 million** in Q2 2025, largely due to the Edge Autonomy acquisition[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements indicate a substantial increase in cash used in operations and investing activities, offset by significant cash provided by financing activities Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | ($132,744) | ($6,742) | | Net cash provided by (used in) investing activities | ($161,729) | $544 | | Net cash provided by (used in) financing activities | $323,489 | $6,929 | | **Net increase (decrease) in cash** | **$29,488** | **$554** | - Cash used in operating activities increased significantly to **$132.7 million** for the first six months of 2025, compared to **$6.7 million** in the prior year period, driven by a larger net loss and unfavorable changes in working capital[23](index=23&type=chunk) - Investing activities used **$161.7 million**, primarily for the acquisition of businesses (**$151.8 million**)[23](index=23&type=chunk) - Financing activities provided a substantial **$323.5 million** in cash, mainly from proceeds from issuance of common stock (**$328.7 million**) and new debt (**$190.3 million**), used for acquisition, debt repayments, and preferred stock repurchase[23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes provide further context on significant financial events, including business combinations, debt, equity transactions, income taxes, and commitments [Note C – Business Combinations](index=18&type=section&id=Note%20C%20%E2%80%93%20Business%20Combinations) This note details the acquisition of Edge Autonomy, including consideration, goodwill, intangible assets recognized, and its initial financial contribution - On June 13, 2025, the Company completed the acquisition of Edge Autonomy, a provider of uncrewed airborne system (UAS) technology[44](index=44&type=chunk) Edge Autonomy Acquisition Consideration (June 13, 2025, in thousands) | Consideration Type | Value | | :--- | :--- | | Cash consideration | $160,000 | | Fair value of common stock issued | $862,561 | | Payable to the seller | $7,171 | | **Total Purchase Consideration** | **$1,029,732** | - The acquisition resulted in the recognition of **$709.5 million** in goodwill and **$332.4 million** in intangible assets, which are preliminary and subject to adjustment[45](index=45&type=chunk)[47](index=47&type=chunk) - For the period from the acquisition date (June 13) to June 30, 2025, Edge Autonomy contributed **$5.9 million** in revenue and a net loss of **$34.9 million**[50](index=50&type=chunk) [Note I – Debt](index=24&type=section&id=Note%20I%20%E2%80%93%20Debt) This note outlines the increase in total debt, including a new term loan and a repaid seller note, primarily for the Edge Autonomy acquisition - Total debt, net of issuance costs, increased to **$190.7 million** as of June 30, 2025, from **$125.7 million** at year-end 2024[66](index=66&type=chunk) - In June 2025, the company's subsidiary entered into a new **$90.0 million** term loan with JPMorgan Chase Bank to help finance the Edge Autonomy acquisition[74](index=74&type=chunk) - The company also entered into a **$100.0 million** Seller Note with an affiliate of AE Industrial Partners to finance the acquisition, which was fully repaid in June 2025 using proceeds from an equity offering, resulting in **$20.0 million** of interest expense[75](index=75&type=chunk)[76](index=76&type=chunk) [Note K – Warrants and Capital Stock Transactions](index=26&type=section&id=Note%20K%20%E2%80%93%20Warrants%20and%20Capital%20Stock%20Transactions) This note details warrant redemptions and exercises, alongside a significant equity offering that generated substantial net proceeds - In February 2025, the company redeemed all outstanding public warrants, and during the first six months of 2025, **6.7 million** public warrants were exercised for proceeds of **$77.5 million**[83](index=83&type=chunk) - During the first six months of 2025, **5.1 million** private warrants were exercised (**4.6 million** on a cashless basis), leaving **2.6 million** outstanding as of June 30, 2025[86](index=86&type=chunk)[87](index=87&type=chunk) - In June 2025, the company completed an equity offering, issuing **15.5 million** shares of common stock for net proceeds of **$245.0 million**[88](index=88&type=chunk) [Note L – Income Taxes](index=27&type=section&id=Note%20L%20%E2%80%93%20Income%20Taxes) This note explains the income tax benefit recognized in Q2 2025, primarily due to the realization of deferred tax assets following the Edge Autonomy acquisition - The company recorded an income tax benefit of **$32.6 million** for Q2 2025 and **$32.8 million** for the six months ended June 30, 2025, resulting in a negative effective tax rate of **(25.2)%** for the quarter[89](index=89&type=chunk)[92](index=92&type=chunk) - The tax benefit is primarily due to the recognition of deferred tax assets and a corresponding reduction of the valuation allowance, as the company determined it is now more-likely-than-not that a portion of these assets will be realized following the acquisition of Edge Autonomy[92](index=92&type=chunk) [Note M – Commitments and Contingencies](index=29&type=section&id=Note%20M%20%E2%80%93%20Commitments%20and%20Contingencies) This note details the settlement of a class action lawsuit and the ongoing status of a derivative lawsuit, with expected recovery through D&O insurance - The Lemen v. Redwire Corp. class action lawsuit was settled for **$8.0 million**, with the company paying this amount into escrow during the first six months of 2025[96](index=96&type=chunk) - A derivative lawsuit, Yingling v. Cannito, et al., remains pending, with the company believing allegations are without merit and expecting recovery through D&O insurance[98](index=98&type=chunk) [Note N – Convertible Preferred Stock](index=31&type=section&id=Note%20N%20%E2%80%93%20Convertible%20Preferred%20Stock) This note covers the issuance of PIK dividends, the repurchase of preferred stock, and the outstanding shares' convertibility and liquidation preference - In May 2025, the company issued **8,068.27** shares of Series A Convertible Preferred Stock as a paid-in-kind (PIK) dividend, valued at **$33.3 million**[104](index=104&type=chunk) - In June 2025, the company used proceeds from its common stock issuance to repurchase **11,195.81** shares of its Convertible Preferred Stock from Bain Capital for **$61.5 million**[105](index=105&type=chunk) - As of June 30, 2025, **103,855.14** outstanding shares of Convertible Preferred Stock were convertible into approximately **34.8 million** shares of common stock and had a liquidation preference of **$567.3 million**[110](index=110&type=chunk)[112](index=112&type=chunk) [Note O – Revenues](index=35&type=section&id=Note%20O%20%E2%80%93%20Revenues) This note details revenue by customer group, significant unfavorable EAC adjustments impacting gross profit, and remaining performance obligations Revenue by Customer Group (in thousands) | Customer Group | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Civil space | $15,600 | $25,052 | $33,735 | $47,978 | | National security | $14,821 | $16,247 | $34,289 | $30,169 | | Commercial and other | $31,339 | $36,812 | $55,131 | $87,756 | | **Total revenues** | **$61,760** | **$78,111** | **$123,155** | **$165,903** | - The company recorded significant net unfavorable estimate at completion (EAC) adjustments, which reduced gross profit by **$25.2 million** in Q2 2025 and **$28.3 million** in the first six months of 2025[118](index=118&type=chunk) - The 2025 unfavorable EAC adjustments were primarily due to a **$14.7 million** adjustment on a program in the RF systems offerings, stemming from increased technical complexity and costs needed to meet customer specifications[118](index=118&type=chunk) - As of June 30, 2025, the company had **$242.8 million** in remaining performance obligations, with approximately **78%** expected to be recognized as revenue within the next 12 months[119](index=119&type=chunk) [Note P – Equity-Based Compensation](index=38&type=section&id=Note%20P%20%E2%80%93%20Equity-Based%20Compensation) This note explains the substantial increase in equity-based compensation expense, primarily driven by the Edge Incentive Units related to the Edge Autonomy acquisition - Total equity-based compensation expense was **$32.7 million** for Q2 2025, a significant increase from **$1.9 million** in Q2 2024[136](index=136&type=chunk) - The increase was primarily driven by **$29.6 million** in expense related to the Edge Incentive Units, which were amended and partially vested in connection with the Edge Autonomy acquisition[122](index=122&type=chunk)[136](index=136&type=chunk) - As of June 30, 2025, approximately **$57.3 million** of unrecognized compensation cost related to unvested Tranche II and III Edge Incentive Units remains, expected to be recognized over a weighted-average period of **1.97 years**[122](index=122&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the **21%** Q2 2025 revenue decrease, negative gross margin, and surging operating expenses, attributing them to EAC adjustments and the Edge acquisition, while highlighting a **1.47** book-to-bill ratio and sufficient liquidity [Results of Operations](index=46&type=section&id=Results%20of%20Operations) This section details the **21%** Q2 revenue decline, the swing to a gross loss, and the significant increase in SG&A and interest expenses, largely due to acquisition-related costs Comparison of Three Months Ended June 30, 2025 and 2024 (in thousands) | Metric | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $61,760 | $78,111 | ($16,351) | (21)% | | Gross Profit (Loss) | ($19,064) | $12,984 | ($32,048) | (247)% | | SG&A Expenses | $54,464 | $18,088 | $36,376 | 201% | | Operating Loss | ($91,891) | ($7,130) | ($84,761) | 1,189% | | Net Loss | ($96,979) | ($18,092) | ($78,887) | 436% | - The decrease in Q2 revenue was primarily due to **$17.7 million** of net unfavorable EAC adjustments in 2025 versus **$3.1 million** in 2024, and timing of production on large contracts, partially offset by **$13.0 million** in revenue from the Edge Autonomy and Hera acquisitions[170](index=170&type=chunk) - The increase in SG&A expenses was primarily due to a **$30.7 million** increase in equity-based compensation, including **$29.6 million** related to the Edge Incentive Units[173](index=173&type=chunk) - Interest expense increased by **$20.7 million**, mainly due to **$20.0 million** of interest expense recognized on the repayment of the Seller Note used for the Edge acquisition[177](index=177&type=chunk) [Key Performance Indicators](index=54&type=section&id=Key%20Performance%20Indicators) This section presents the book-to-bill ratio and contracted backlog, noting the impact of the Edge Autonomy acquisition on both metrics Book-to-Bill Ratio | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Three Months Ended** | 1.47 | 1.47 | | **Last Twelve Months** | 0.87 | 1.28 | - For Q2 2025, contracts awarded included **$73.7 million** of acquired contract value from the Edge Autonomy acquisition[202](index=202&type=chunk) Contracted Backlog (in thousands) | Date | Backlog | | :--- | :--- | | June 30, 2025 | $329,483 | | December 31, 2024 | $296,652 | - The increase in backlog is primarily due to the addition of **$73.7 million** in contract value acquired with Edge Autonomy[205](index=205&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) The company reports **$76.5 million** in cash and **$35.0 million** in available borrowings, with management confident in sufficient liquidity for the next twelve months - As of June 30, 2025, the company had **$76.5 million** in cash and cash equivalents and **$35.0 million** in available borrowings from its credit facilities[210](index=210&type=chunk) - Management believes existing sources of liquidity will be sufficient to meet working capital needs and comply with debt covenants for at least the next twelve months[213](index=213&type=chunk) [Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20Regarding%20Market%20Risk) As a smaller reporting company, Redwire is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Redwire is not required to provide quantitative and qualitative disclosures about market risk[226](index=226&type=chunk) [Item 4. Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of June 30, 2025, due to material weaknesses in internal control over financial reporting, with remediation planned by December 31, 2025 - Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses in internal control over financial reporting[227](index=227&type=chunk) - Identified material weaknesses include insufficient segregation of duties, lack of formal controls over financial reporting, and ineffective IT general controls[228](index=228&type=chunk)[229](index=229&type=chunk) - The company is implementing a remediation plan, targeting full remediation for U.S. operations (excluding Edge Autonomy) by December 31, 2025, with European operations extending beyond this date[233](index=233&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, with details on the Lemen v. Redwire settlement and the ongoing Yingling v. Cannito derivative lawsuit provided in Note M - The company is subject to litigation from time to time in the ordinary course of business, with details on specific pending matters found in Note M – Commitments and Contingencies[236](index=236&type=chunk)[237](index=237&type=chunk) [Item 1A. Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) New risks from the Edge Autonomy acquisition include integration challenges, shareholder dilution, dependence on UAS market adoption, increased competition, regulatory complexities, and geopolitical risks from Ukraine sales - The company may be unable to successfully integrate Edge Autonomy's operations and realize anticipated synergies due to challenges in combining business practices, cultures, and systems[239](index=239&type=chunk) - Following the acquisition and a related stock offering, AE Industrial Partners beneficially owns approximately **55.6%** of the company's common and convertible preferred stock (on an as-converted basis), giving it majority voting power[242](index=242&type=chunk) - The company's future growth now depends on the demand for and adoption of uncrewed aircraft systems (UAS) technology, an emerging market[254](index=254&type=chunk) - A significant portion of Edge Autonomy's historical sales were to customers in Ukraine, which have been declining and may continue to decline, posing a risk to future revenue[255](index=255&type=chunk)[262](index=262&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the reporting period - There were no unregistered sales of equity securities during the period[265](index=265&type=chunk) [Item 5. Other Information](index=69&type=section&id=Item%205.%20Other%20Information) No directors or officers reported adopting, modifying, or terminating Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers informed the company of any adoption, modification, or termination of a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[268](index=268&type=chunk)

Financial Data and Key Metrics Changes - Redwire recorded revenue of $61.8 million, showing a sequential increase, but faced a sequential decrease in adjusted EBITDA from negative $2.3 million to negative $27.4 million due to unfavorable estimated at completion (EAC) changes [24][25]. - The net loss decreased sequentially to negative $97 million, influenced by EACs, non-cash expenses, and transaction costs [25][26]. - Total liquidity reached a record level of $113.6 million, a 27.4% improvement from the previous quarter and a 103.4% year-over-year increase [26][27]. Business Line Data and Key Metrics Changes - The acquisition of Edge Autonomy was completed, enhancing Redwire's capabilities in multi-domain operations and contributing to a backlog of $329.5 million as of June 30, 2025 [15][22]. - The Stalker platform was added to the Defense Innovation Unit's UAS Blue List, facilitating easier access to U.S. government contracts [7][62]. - The U.S. Army's Long Range Reconnaissance Program (LRR) has an estimated funding of $325 million for fiscal year 2026, positioning Redwire Edge Autonomy favorably for participation [10][83]. Market Data and Key Metrics Changes - The U.S. government is funding key programs, including approximately $24 billion for the Golden Dome and $2.6 billion for NASA Gateway, indicating significant growth potential for Redwire [18][21]. - NATO allies committed to invest 5% of GDP annually in defense spending, which could benefit Redwire's operations in Europe [20][21]. Company Strategy and Development Direction - Redwire's growth strategy focuses on five key principles: providing foundational products, delivering multi-domain platforms, exploring new markets, unlocking breakthrough technologies, and executing accretive M&A [5][6]. - The creation of SpaceMD aims to commercialize drug development in space, leveraging microgravity for innovative therapeutics [36][39]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the U.S. government budgeting process, which has delayed some contract awards into 2026, but noted positive trends in funding opportunities [17][21]. - The company remains optimistic about future growth, despite setbacks in adjusted EBITDA, emphasizing the long-term nature of space investments [40][41]. Other Important Information - Redwire's contract awards during 2025 totaled $90.6 million, with a book-to-bill ratio of 1.47 times, indicating a strong pipeline of opportunities [22]. - The acquisition of Edge Autonomy is expected to lower the proportion of business exposed to EAC volatility, enhancing financial stability [34][50]. Q&A Session Summary Question: How does the company balance accounting controls and engineering complexity? - Management explained that EACs introduce volatility during development phases, and a complete portfolio review was conducted to understand these dynamics before reinstating EBITDA guidance [46][48]. Question: What was the due diligence process for the Edge Autonomy acquisition? - The acquisition was based on unique technologies and expected free cash flow positivity, with Edge Autonomy showing strong financial results during due diligence [52][53]. Question: What is the impact of the Blue List inclusion for Edge Autonomy? - Inclusion on the Blue List enhances credibility and simplifies procurement processes for federal agencies, making it easier to compete for contracts [62][63]. Question: What is the expected margin profile going forward? - Management indicated that while EACs were taken conservatively, future cash flow and margins are expected to improve as projects progress [81]. Question: What is the funding status for the LRR program? - The $325 million funding is for fiscal year 2026, with expectations for prompt execution due to the administration's focus on UAS dominance [83][87].

Financial Performance & Outlook - Redwire reported Q2 2025 revenue of $61.8 million, including $5.9 million from Edge Autonomy[61] - The company's net loss for Q2 2025 was $(97.0) million, which includes over $90 million in non-cash, transaction-related, EAC impact, and non-recurring activity[61] - Adjusted EBITDA for Q2 2025 was $(27.4) million, impacted by a net unfavorable EAC change of $25.2 million[61] - Total liquidity as of June 30, 2025, was $113.6 million, including $76.5 million in cash and cash equivalents[61] - Redwire forecasts full-year 2025 revenue to be between $385 million and $445 million, including Edge Autonomy from the date of close[70] - Including Edge Autonomy from January 1, 2025, the company forecasts revenue between $470 million and $530 million for the full year 2025[70] Backlog and Pipeline - The company's contracted backlog increased from $291 million as of March 31, 2025, to $329 million as of June 30, 2025[55] - The total pipeline as of June 30, 2025, is over $11 billion[55] - Q2 2025 contract awards totaled $90.6 million, resulting in a book-to-bill ratio of 1.47x[55] Strategic Initiatives - Redwire successfully completed the first deployment test for one of its ROSA wings for the lunar Gateway's Power and Propulsion Element, which will generate 60kW[33] - Stalker UAS was added to the DoD's Blue List of approved drones during Q2 2025[37] - Redwire was awarded a prototype phase agreement by the U S Army to develop and deliver Stalker UAS for the LRR program[39]