Overview

• U.S. drone and robotics provider's Q1 revenue rose 849% yr/yr to $15.5 mln

• Gross margin improved to 12.7% from negative 52.1% a year ago

• Company announced acquisitions and strategic partnerships, including pending Quaze Technologies deal

Outlook

• Red Cat targets annual revenue in short-medium term between $150 mln and $180 mln

• Company expects improving margins and greater product diversity

• Red Cat says it is ready to scale as defense budgets for UAVs and USVs may rise in 2027

Result Drivers

• NEW DRONE ORDERS - Co said large new orders for Black Widow drones from NATO and Asia-Pacific allies drove revenue growth

• STRATEGIC PARTNERSHIPS - Co cited new partnerships, including with Ukraine’s Spetstechnoexport, as supporting next-generation product development

• ACQUISITIONS - Co said recent and pending acquisitions, including Apium Swarm Robotics and Quaze Technologies, expand capabilities and product diversity

Company press release: ID:nGNX93gjZ4

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q4 Revenue		$15.5 mln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the aerospace & defense peer group is "buy"

• Wall Street's median 12-month price target for Red Cat Holdings Inc is $20.00, about 88.3% above its May 6 closing price of $10.62

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