RCAT earnings analysis
What we found in RCAT's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Red Cat Holdings reported substantial growth in Q1 2026, with revenues of $15.5 million, a staggering 849% increase from $1.6 million in Q1 2025. However, the company reported a diluted EPS of -$0.22, missing consensus estimates. Operational challenges remain evident with significant cash outflows and rising expenses, indicating ongoing financial stress despite promising revenue growth.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue Growth of 849%
- Q1 2026 revenues reached $15.5 million compared to $1.6 million in Q1 2025, an increase of $13.8 million.
- Gross Profit Turnaround
- Gross profit improved to $2.0 million in Q1 2026 from a loss of $0.8 million in Q1 2025.
- Increase in Operating Expenses
- Total operating expenses surged to $29.3 million in Q1 2026, up from $11.6 million in Q1 2025, a rise of 152%.
- Significant Cash Outflows
- Operating cash flow was -$31.9 million in Q1 2026, compared to -$15.9 million in Q1 2025.
- Strong Cash Position
- As of March 31, 2026, cash totaled $131.9 million, highlighting liquidity despite operational losses.
- Inventory Management Challenges
- Inventory balances totaled $62.7 million at the end of Q1 2026.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- High Operating Cash Flow Losses
- Net cash used in operating activities increased to $31.9 million in Q1 2026 from $15.9 million in Q1 2025.
- Increased Legal Risks
- The company is involved in several legal proceedings, including class action lawsuits that could adversely affect its financial condition.
- Weak Internal Controls
- Management noted issues with internal controls over financial reporting, creating risks for misstatements.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $-0.22
- Gross margin
- 13%
What they said about what is next.
Management anticipates annual revenues between $150 million and $180 million for the current fiscal year.
The filing reads about the same as the one before it.
What came before.
- 10-K · March 19, 2026
- Red Cat reported a sharp top-line increase to approximately $41.0M in 2025 (from $16.0M in 2024) driven by a $26.235M Q4 2025 quarter, but profitability and cash generation deteriorated materially with a 2025 free cash…
- 10-Q · August 14, 2025
- Red Cat reported Q2 revenue of $3,218,577, down 49.9% YoY from $6,419,669, while gross margin improved to 11.7% from 4.2% YoY. Operating loss widened to $12,646,547 (operating margin -392.9%) driven by sharp increases…
- 10-Q · December 16, 2024
- Red Cat reported a sharp revenue decline to $1,534,727 for the three months ended October 31, 2024 and a GAAP net loss of $13,334,618 (loss per share $0.18). Operating loss widened to $9,116,419 and management added…
- 10-Q · March 18, 2024
- Revenue and gross margin improved sharply in the quarter — revenue rose to $5,847,933 from $1,667,683 a year earlier and gross margin moved to $1,101,651 (18.8% of sales) from a $(96,929) loss. Despite top-line…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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