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    RDW
    Earnings call· Jun 2026(Q2 FY26)

    Redwire Q2 FY26 earnings call RDW

    Aug 6, 2026 Source

    Executive summary

    Redwire Q2 FY26 — Record Revenue, Backlog, and Strategic Investments

    Redwire delivered a strong Q2 FY26, marked by record revenue and backlog, driven by robust demand across its Space and Defense Tech segments. The company significantly strengthened its balance sheet, providing ample liquidity for strategic internal investments and accretive M&A, while reaffirming its full-year revenue guidance.

    Highlights

    5

    • Achieved record quarterly revenues of $117.1 million, an 89.6% increase year-over-year and 20.7% sequentially.

    • Ended the quarter with a record contracted backlog of $542.1 million, up 64.5% year-over-year and 8.8% sequentially.

    • Reported a strong book-to-bill ratio of 1.42 for the quarter and 1.52 on a last 12 months basis.

    • Strengthened balance sheet with record total liquidity of $607.8 million, including $557.8 million in cash.

    • Achieved record gross margins of 27.8%, a significant improvement year-over-year.

    Concerns

    3

    • Adjusted EBITDA remained negative at $3.2 million for the quarter, despite significant improvement.

    • Net loss was $41 million, though improved by $56 million year-over-year.

    • Inventory buildup of 23% sequentially was a drag on cash, though framed as a strategic investment.

    Guidance & targets

    3
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $450 million to $500 million
    high materiality
    High
    Gross Margin
    low to mid-20s
    medium materiality
    Medium
    Inventory Levels
    come up a little bit more
    low materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Space
    Majority of revenue is recognized over time.
    Backlog: $322 million
    		$55.2 million———
    Defense Tech
    Primary driver behind significant year-over-year revenue increase due to Edge Autonomy acquisition. Majority of revenue is recognized at a point in time.
    Backlog: $220.2 million
    		$61.9 million———

    Operational metrics

    15
    Adjusted EBITDA
    negative $3.2 millionsignificant increase on both a year-over-year and sequential basis
    Q2 FY26

    Marked improvement year-over-year.

    Net Loss
    $41 millionimproved by $56 million on a year-over-year basis
    Q2 FY26
    R&D Investment
    $12.5 millionincreased from $1.7 million on a year-over-year basis
    Q2 FY26

    Elevated investment continued, accelerating maturation of products and solutions.

    Total Liquidity
    $607.8 millionsignificant sequential and year-over-year improvement
    Q2 FY26 end

    Comprised of cash, cash equivalents, restricted cash and undrawn revolver capacity.

    Cash, Cash Equivalents and Restricted Cash
    $557.8 millionincreased by over 6x to $557.8 million
    Q2 FY26 end

    Primary driver of liquidity.

    Undrawn Revolver Capacity
    $50 million
    Q2 FY26 end
    Net ATM Proceeds
    $487.9 million
    Q2 FY26

    Raised during the quarter, primarily driving balance sheet improvement.

    Total Debt
    $48.9 millionreduced by 75% to $48.9 million
    Q2 FY26 end
    Net Interest Expense
    less than $1 millionversus $23.8 million in Q2 2025
    Q2 FY26
    Series A Preferred Shares
    100% reduction
    Q2 FY26

    Fully converted into common shares.

    Warrants Outstanding
    202,00092% reduction
    Q2 FY26 end
    Common Shares Outstanding
    249.9 million
    Q2 FY26 end
    Inventory Levels
    23%sequentially
    Q2 FY26

    Strategic investment, expected to increase further in Q3.

    Octopus ISR Payloads Delivered
    nearly 200more than 15% increase on a year-over-year basis
    YTD Q2 FY26
    Gross Margin
    27.8%significant improvement on a year-over-year basis
    Q2 FY26

    Achieved record gross margins.

    Industry KPIs

    7
    MetricValueDetails
    Book to bill ratio1.42ratio
    Total company backlog$542.1 millionUSD
    Defense program awards$981 millionUSD
    Program segment backlog—
    Unit deliveries by programnearly 200units
    Program margins eac chargesnet neutral
    Production capacity expansion164,000 square feetsq ft

    Orderbook & backlog

    3
    Contracted Backlog$542.1 millionJune 30, 2026

    8.8% sequential increase; 64.5% year-over-year increase

    Bookings$165.8 millionQ2 FY26

    significant increase on a year-over-year basis

    Bookings (Last 2 Quarters)more than $350 millionQ1-Q2 FY26

    Product announcements

    2
    ProductTypeDetails
    Octopus E140 MWIRlaunch
    Octopus E180 HD MWIRlaunch

    Deals & partnerships

    6
    Space Systems CommandIndefinite Delivery, Indefinite Quantity (IDIQ) contract for National Space Test and Training Complex (NITE-STAR) Capability Development$981 million

    Redwire was selected as 1 of 15 vendors. Provides support to space and ground-based engineering activities to enhance test, evaluation and training operations. Allows Redwire to apply capabilities such as next-gen spacecraft, digital engineering and space domain awareness.

    SpaceXAgreement to purchase an entire Starfall spacecraft for microgravity development

    SpaceMD, Redwire's venture company, signed a historic agreement. The Starfall spacecraft enables affordable, routine access to the microgravity environment. First mission slated for launch in 2028, expected to carry up to 32 PIL-BOXes.

    Undisclosed NATO customerMultiyear contract to deliver Penguin Mk3 aircrafthigh eight-figuremultiyear

    Part of a multiyear modernization program for the country's UAS capabilities. Penguin Mk3 chosen for its scalable, adaptable solution for modern defense environments.

    Taiwan Coast GuardTranche 1 contract

    One of the key awards during the quarter.

    United States Marine CorpsFollow-on award for Stalker Block 30

    Key follow-on award.

    U.S. ArmyFollow-on award for Stalker Block 30

    Key follow-on award.

    Capital programs

    2
    Microgravity Center of Excellencecompleted

    Benefit: 30,000 square feet of expanded lab space and a payload operations center

    Brand-new facility in Georgetown, Indiana, focused on accelerating space-enabled research, development and manufacturing for pharmaceutical and biotech innovation.

    Huntsville, Alabama Expansionunderway

    Benefit: 164,000 square feet

    Supported by approximately $8.5 million in eligible state and local economic development incentives. Will accelerate production of Stalker aircraft, Octopus ISR payloads, advanced power solutions and space capabilities.

    Risks & headwinds

    1
    EAC adjustmentsQ2 FY26

    net neutral impact on results, including adjusted EBITDA

    Mitigation: measures in place to mitigate and monitor

    What to watch in Q3 FY26

    5

    Inventory levels

    Q3 FY26
    Current23% sequential increase in Q2 FY26
    Targetfurther increase

    Why it matters

    Management is strategically increasing inventory to improve responsiveness and cut turnaround times for UAS systems, impacting working capital.

    I would expect that actually inventory levels will probably come up a little bit more as we move into Q3.

    Q&A highlights

    8

    Asked about the sustainability and future expansion opportunity for gross margins, and the current common share count after recent balance sheet restructuring.

    Management expressed pride in Q2 gross margin of 27.8% but guided to 'low to mid-20s' for the near term due to potential EAC adjustments. They stated the current common share count is 249.9 million.

    “I'll stay with the guide in the kind of that low to mid-20s as we move forward. ... we're 249.9 million common shares.”

    asked by Brian Kinstlinger · answered by Chris Edmunds

    2 min read6 chapters

    Detailed Narrative

    01

    Capital Allocation Strategy

    Redwire is implementing an investment framework focused on three pillars: balance sheet strength, internal capacity/capability/innovation, and accretive M&A. The company has aggressively refinanced, delevered, and built liquidity to create a strong foundation, significantly reducing interest expense. This provides dry powder for internal investments in new product advancement and expanded capacity, as well as for accretive M&A, leveraging its proven track record of 11 acquisitions and successful integration, including Edge Autonomy.

    02

    Strategic Infrastructure Expansion

    To bolster production momentum, Redwire opened a new 30,000 square foot microgravity Center of Excellence in Georgetown, Indiana, with expanded lab space and a payload operations center linked to the International Space Station. Additionally, a major 164,000 square foot expansion in Huntsville, Alabama, supported by approximately $8.5 million in state and local incentives, is expected to be completed in Q4 2027. This Huntsville facility will accelerate production of Stalker aircraft, Octopus ISR payloads, advanced power solutions, and space capabilities.

    03

    Space Segment Milestones

    Redwire was selected as one of 15 vendors on the Space Systems Command's $981 million National Space Test and Training Complex (NITE-STAR) IDIQ contract, providing a pathway to apply its capabilities in next-gen spacecraft, digital engineering, and space domain awareness. The company's Roll-Out Solar Array (ROSA) Technology will support NASA's SR-1 Freedom mission to Mars, launching in 2028. These 60-kilowatt ROSA wings are the most powerful ever built, targeting space stations, large spacecraft, and potential lunar infrastructure.

    04

    Microgravity Development Breakthrough

    SpaceMD, Redwire's venture company, signed a historic agreement to purchase an entire Starfall spacecraft from SpaceX, enabling affordable, routine access to the microgravity environment. The first Starfall mission, slated for launch in 2028, is expected to carry up to 32 PIL-BOXes, making it the largest dedicated commercial microgravity research mission in history. This significantly scales Redwire's microgravity capabilities for pharmaceutical, biotech, and other in-space manufacturing.

    05

    Defense Tech Growth and Product Innovation

    Redwire was awarded a high eight-figure multiyear contract to deliver Penguin Mk3 aircraft to an undisclosed NATO customer, part of a multiyear modernization program. The company also secured a Tranche 1 contract for the Taiwan Coast Guard and follow-on awards for Stalker Block 30 from the USMC and U.S. Army. In sensors and payloads, Redwire delivered nearly 200 Octopus ISR payloads year-to-date, a 15% increase YoY, and launched two new products, the E140 MWIR and E180 HD MWIR, with initial sales already made.

    06

    Financial Strength and Outlook

    The company ended Q2 FY26 with record total liquidity of $607.8 million, including $557.8 million in cash, and reduced total debt by 75% to $48.9 million. Net interest expense decreased to less than $1 million from $23.8 million in Q2 FY25. Redwire reaffirmed its full-year 2026 revenue forecast of $450 million to $500 million, representing 41.6% year-over-year growth at the midpoint, with over 90% visibility into the guidance.

    AI-generated summary of the company’s earnings call. Not investment advice.