2026 revenue guidance implies 357% to 415% year-over-year growth, with backlog increasing more than 30% since year-end to nearly $18 million midway through the first quarter
2025 culminated in structural repositioning following November acquisitions
Launch of Palladyne Defense and commercialization of Palladyne IQ 2.0 position Company for execution in 2026
SALT LAKE CITY--(BUSINESS WIRE)--March 05, 2026--
Palladyne AI Corp. (NASDAQ: PDYN and PDYNW) ("Palladyne AI"), a U.S.-based defense and industrial technology company delivering embodied AI-powered collaborative autonomy solutions, advanced avionics, precision-manufactured components, UAVs, and advanced aerospace engineering services, today announced financial results for the fourth quarter and full year ended December 31, 2025.
Ben Wolff, President and Chief Executive Officer of Palladyne AI, commented:
"2025 was a year of operational validation that culminated in structural transformation. In November, we completed the acquisitions of GuideTech, Warnke Precision Machining and MKR Fabricators and launched Palladyne Defense. That repositioning expanded our capabilities beyond autonomy software to include advanced avionics, engineering services, proprietary airframe and missile development and certified U.S.-based manufacturing. We exited 2025 as a fundamentally different company, with expanded backlog, deeper defense engagement and an integrated autonomy-to-manufacturing stack aligned with evolving Department of War priorities.
"Over the past few months, we have moved decisively to execute across the defense and commercial parts of our business. We commercially released Palladyne IQ 2.0, integrating feedback from potential customers into its development, and recently signed our first customer for the product. We also introduced IntelliSwarm, integrating SwarmOS into the BRAIN X2 flight module, and demonstrated collaborative autonomy between our recently branded Gremlin-X$(TM)$ (formerly Project Banshee) platform running IntelliSwarm and multiple Red Cat platforms operating with SwarmOS, validating distributed, multi-platform collaboration in real-world environments.
"We also established our presence in the space domain. Through our satellite-related development work with the Air Force Research Laboratory, we are extending SwarmOS capabilities to integrate communications with space-based systems. Separately, our engagement with Portal Space Systems advances propulsion design for next-generation space platforms and establishes a foundation for potential future collaboration surrounding collaborative autonomy."
Recent Strategic and Operational Highlights
-- Launched Palladyne Defense following the acquisitions of GuideTech,
Warnke Precision Machining and MKR Fabricators, integrating autonomy
software, advanced avionics engineering and design, components,
proprietary UAVs and missile systems, and certified U.S.-based
manufacturing;
-- Commercially released Palladyne IQ 2.0 and signed an initial customer
following customer-driven refinement throughout 2025;
-- Hired Matt Muta as President of Commercial and Industrial to focus on
capturing commercial opportunities;
-- Branded Project Banshee (next-generation autonomous UAV mini-bomber
platform currently under development) as Gremlin-X;
-- Demonstrated collaborative autonomous swarming between the Gremlin-X
platform utilizing IntelliSwarm, and multiple Red Cat platforms operating
with SwarmOS;
-- Expanded into the space domain through satellite-related development
work with the Air Force Research Laboratory and propulsion design
engagement with Portal Space Systems;
-- Progressed development milestones across Gremlin-X and new BRAIN
variants;
-- Secured missile propulsion subsystem contract from a new defense prime
customer; and
-- Strengthened intellectual property portfolio through a new patent
issuance supporting advanced swarming and decentralized autonomy
architectures and filed four new patent applications related to
Palladyne's AI software products and technologies.
Fourth Quarter 2025 Financial Highlights (vs. fourth quarter 2024)
-- Revenue increased 118% to $1.7 million compared to $0.8 million;
-- Operating loss of ($9.3) million compared to ($6.5) million;
-- GAAP net loss and basic and diluted loss per share (EPS) of ($1.5)
million, and ($0.04), compared to ($53.0) million, and ($1.75);
-- *Non-GAAP net loss and Non-GAAP EPS of ($6.9) million, and ($0.16),
compared to ($5.2) million, and ($0.17);
-- Cash, cash equivalents and marketable securities totaled $47.0 million
at December 31, 2025;
-- Backlog as of December 31, 2025, was $13.5 million.
Full Year 2025 Financial Highlights (vs. full year 2024)
-- Revenue decreased 33% to $5.2 million compared to $7.8 million;
-- Operating loss of ($32.4) million compared to ($26.9) million;
-- GAAP net income and diluted EPS of $10.0 million, and $0.24, compared
to a net loss of ($72.6) million, and ($2.71);
-- *Non-GAAP net loss and Non-GAAP EPS of ($25.2) million, and ($0.60),
compared to ($22.6) million, and ($0.84).
*see GAAP to Non-GAAP reconciliation at the end of this press release
2026 Outlook
The Company reiterates its previously announced full year 2026 revenue guidance of $24 million to $27 million, representing expected year-over-year growth of approximately 357% to 415% compared to 2025 revenue of $5.2 million. Supporting this guidance, Palladyne AI had a contracted 12-18 month backlog of nearly $18.0 million as of mid-February 2026, a more than 30% increase since December 31, 2025.
The guidance reflects revenue contributions from acquired entities, backlog conversion and monetization of development programs secured during and following the Company's fourth quarter repositioning. Management believes recent contract wins and expanding program activity across air and space domains provide increased visibility into achieving these targets.
The Company continues to advance product maturation milestones and pursue early customer wins across Palladyne IQ 2.0, SwarmOS and BRAIN platforms while maintaining a disciplined focus on execution.
Conference Call
Palladyne AI will host a conference call today, Thursday, March 5, 2026, at 8:00 a.m. Eastern Time to discuss its financial and operational results, strategy and future opportunities.
Dial-in and Webcast Information
Thursday, March 5, 2026, at 8:00 a.m.
Date/Time: Eastern Time
Toll-Free (North America): 1-877-407-0789
Toll/International: 1-201-689-8562
Conference Call ID: 13758938
Webcast Link:
https://viavid.webcasts.com/starthere.jsp?ei=1753897&tp_key=50d08a7821
Call me(TM): Participants can use the Guest dial-in #s above and be answered
by an operator, or click the Call me(TM) link for instant telephone access
to the event. Call me(TM) link will be made active 15 minutes prior to the
scheduled start time.
https://callme.viavid.com/viavid/?callme=true&passcode=13757186&h=true&info=
comp any&r=true&B=6
Replay Information
Toll-Free (North America) 1-844-512-2921
Toll/International: 1-412-317-6671
Conference Call ID: 13758938
Expiration: Thursday, March 19, 2026, 11:59 p.m. Central
Time
About Palladyne AI
Palladyne AI is a U.S.-based technology company developing patented embodied artificial intelligence, collaborative autonomy solutions, advanced avionics, autonomous systems, advanced UAV engineering services, and precision-manufactured components for defense and industrial markets. Palladyne AI delivers secure, American-developed and operated platforms designed to meet the stringent requirements of U.S. government and public-sector customers, including data sovereignty, security, and compliance.
Palladyne AI's embodied AI is designed to operate in complex, contested, and high-risk environments, enabling distributed tasking, human-on-the-loop decision-making, degraded-communications resilience, and multi-domain coordination. Its platform-agnostic autonomy stack combines real-time sensor fusion, adaptive AI models, and edge-native orchestration - without vendor lock-in - to support autonomous and collaborative systems across air, ground, maritime, and industrial domains where performance, resilience, and trust are paramount. For more information about Palladyne AI, including GuideTech and Palladyne Defense, please visit www.palladyneai.com/.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the capabilities or future capabilities of Palladyne AI's technology and related products, including IntelliSwarm; anticipated growth, operating scale and operating inflection of the Company; the applicability of Palladyne AI's products and technology to the space domain; 2026 expected financial performance, including expected revenue and sources of revenue; the time of customer acquisition, revenue recognition and backlog realization; the benefits of its AI software and other products and the markets for its products and services; and the applicability of IntelliSwarm and its autonomy software to different kinds of machines (such as UAVs, UGVs and ROVs); future development and qualification plans; and intended future target customers. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events, or results of operations, are forward-looking statements. These statements may be preceded by, followed by, or include the words
"believes," "estimates," "expects," "projects," "forecasts," "may," "will," "should," "seeks," "plans," "scheduled," "anticipates," "intends" or "continue" or similar expressions. Such forward-looking statements involve risks and uncertainties that may cause actual events, results, or performance to differ materially from those indicated by such statements. These forward-looking statements are based on Palladyne AI's management's current expectations and beliefs, as well as a number of assumptions concerning future events. However, there can be no assurance that the events, results, or trends identified in these forward-looking statements will occur or be achieved. Forward-looking statements speak only as of the date they are made, and Palladyne AI is not under any obligation and expressly disclaims any obligation to update, alter or otherwise revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
Readers should carefully review the statements set forth in the reports which Palladyne AI has filed or will file from time to time with the Securities and Exchange Commission (the "SEC"), in particular the risks and uncertainties set forth in the sections of those reports entitled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements, " for a description of risks facing Palladyne AI and that could cause actual events, results or performance to differ from those indicated in the forward-looking statements contained herein. The documents filed by Palladyne AI with the SEC may be obtained free of charge at the SEC's website at www.sec.gov.
PALLADYNE AI CORP.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share data)
As of
-----------------------------------------
December 31, 2025 December 31, 2024
------------------- -------------------
Assets
Current assets:
Cash and cash
equivalents $ 18,219 $ 31,188
Marketable securities 28,836 8,883
Accounts receivable,
net of allowance for
credit losses of $0.0
million and $0.3
million at December
31, 2025 and 2024,
respectively 1,055 134
Unbilled receivables 2,455 1,179
Inventories 339 71
Prepaid expenses and
other current assets 1,653 1,275
--------------- ---------------
Total current assets 52,557 42,730
Property and equipment,
net 8,889 4,244
Intangible assets, net 10,430 --
Goodwill 14,731 --
Operating lease assets 8,645 8,841
Other non-current assets 460 438
--------------- ---------------
Total assets $ 95,712 $ 56,253
=============== ===============
Liabilities and
stockholders' equity
(deficit)
Current liabilities:
Accounts payable $ 1,058 $ 435
Accrued liabilities 3,550 2,919
Current operating lease
liabilities 1,058 1,079
--------------- ---------------
Total current liabilities 5,666 4,433
Warrant liabilities 2,772 51,396
Operating lease
liabilities 9,725 9,957
Other non-current
liabilities 2,874 --
--------------- ---------------
Total liabilities 21,037 65,786
--------------- ---------------
Commitments and
contingencies
Stockholders' equity
(deficit):
Common stock, $0.0001 par
value, 165,000,000 shares
authorized as of December
31, 2025 and December 31,
2024; 46,117,164 and
33,883,894 shares issued
and outstanding as of
December 31, 2025 and
December 31, 2024,
respectively 5 3
Additional paid-in capital 555,451 481,289
Accumulated other
comprehensive income 11 6
Accumulated deficit (480,792) (490,831)
--------------- ---------------
Total stockholders' equity
(deficit) 74,675 (9,533)
--------------- ---------------
Total liabilities and
stockholders' equity
(deficit) $ 95,712 $ 56,253
=============== ===============
PALLADYNE AI CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except share and per share data)
Three Months Ended
December 31, Year Ended December 31,
------------------------- -------------------------
2025 2024 2025 2024
----------- ----------- ----------- -----------
Revenue, net $ 1,661 $ 761 $ 5,246 $ 7,786
Operating
expenses:
Cost of revenue
(exclusive of
items shown
separately
below) 1,402 554 2,690 3,488
Research and
development 3,758 2,612 12,899 10,437
General and
administrative 4,683 3,461 17,199 16,842
Sales and
marketing 1,014 618 4,744 4,134
Asset write-down
and
restructuring -- -- -- (192)
---------- ---------- ---------- ----------
Total
operating
expenses 10,975 7,245 37,650 34,709
---------- ---------- ---------- ----------
Loss from
operations (9,314) (6,484) (32,404) (26,923)
Interest income,
net 432 277 1,944 1,244
Gain (loss) on
warrant
liabilities 4,630 (46,760) 37,740 (46,935)
Other income, net 221 -- 221 2
---------- ---------- ---------- ----------
Income (loss)
before income tax
expense (4,031) (52,967) 7,501 (72,612)
---------- ---------- ---------- ----------
Income tax benefit
(expense) 2,538 (2) 2,538 (5)
---------- ---------- ---------- ----------
Net income (loss) $ (1,493) $ (52,969) $ 10,039 $ (72,617)
========== ========== ========== ==========
Net income (loss)
per share
Basic $ (0.04) $ (1.75) $ 0.26 $ (2.71)
Diluted $ (0.04) $ (1.75) $ 0.24 $ (2.71)
Weighted-average
shares used in
computing net
income (loss) per
share
Basic 42,329,510 30,277,019 38,841,116 26,774,895
Diluted 42,329,510 30,277,019 42,125,932 26,774,895
PALLADYNE AI CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Year Ended December 31,
-------------------------------
2025 2024
------------- ---------
Cash flows from operating activities:
Net income (loss) $ 10,039 $ (72,617)
Adjustments to reconcile net income
(loss) to net cash used in operating
activities:
Stock-based compensation 4,447 2,805
Depreciation of property and
equipment 974 825
Amortization of intangible assets 118 --
Change in fair value of warrant
liabilities (37,740) 46,935
Allowance for credit losses -- 285
Amortization of investment discount (1,386) (75)
Deferred income tax benefit (2,541) --
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable 1,096 136
Unbilled receivable (960) 855
Inventories 58 994
Prepaid expenses and other current
assets (132) 1,048
Operating lease assets & other
non-current assets 1,005 1,242
Accounts payable (708) (819)
Accrued liabilities and current
operating lease liabilities (904) (3,164)
Operating lease liabilities (1,003) (1,077)
--------- --------
Net cash used in operating activities (27,637) (22,627)
--------- --------
Cash flows from investing activities:
Purchases of property and equipment (713) (265)
Acquisition of a business, net of
cash acquired (5,302) --
Purchases of marketable securities (75,563) (8,859)
Maturities of marketable securities 57,000 16,000
--------- --------
Net cash (used in) provided by
investing activities (24,578) 6,876
--------- --------
Cash flows from financing activities:
Proceeds from exercise of stock
options 74 130
Proceeds from issuance of common
stock under ESPP 148 --
Proceeds from the exercise of
warrants 6,419 --
Shares repurchased for payment of
tax withholdings -- (105)
Payment of obligations under finance
leases (20) (3)
Payment of debt obligations (3,696) --
Proceeds from the issuance of
warrants -- 4,432
Proceeds from issuance of common
stock 36,371 20,028
Payment of transaction costs related
to issuance of common stock (50) (682)
--------- --------
Net cash provided by financing
activities 39,246 23,800
--------- --------
Net (decrease) increase in cash and
cash equivalents (12,969) 8,049
Cash and cash equivalents at beginning
of period 31,188 23,139
--------- --------
Cash and cash equivalents at end of
period $ 18,219 $ 31,188
========= ========
Supplemental disclosure of cash flow
information:
Cash paid for income taxes $ 2 $ 10
Supplemental disclosure of non-cash
activities:
Common stock issued in connection with
a business acquisition $ 15,872 $ --
Purchases of property and equipment
financed through notes payable $ 113 $ --
Warrant liabilities reclassified to
equity upon exercise $ 10,883 $ --
PALLADYNE AI CORP. NON-GAAP
FINANCIAL MEASURES
(Unaudited)
To supplement our financial statements presented in accordance with GAAP and to provide investors with additional information regarding our financial results, we have presented in this release non-GAAP net income (loss) and non-GAAP net income (loss) per share (non-GAAP EPS), each of which are non-GAAP financial measures. Non-GAAP net income (loss) and non-GAAP EPS are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies.
We define non-GAAP net income (loss) as our GAAP measures of net income (loss) excluding the impacts of stock-based compensation expense, gain or loss on change in fair value of warrant liabilities, expenses related to business combinations and other non-recurring or non-operating expenses. We define non-GAAP EPS as non-GAAP net income (loss) divided by weighted average outstanding shares.
The most directly comparable GAAP measures to non-GAAP net income (loss) and non-GAAP EPS are net income (loss) and EPS, respectively. We believe excluding the impact of the previously listed items in calculating non-GAAP net income (loss) and non-GAAP EPS can provide a useful measure for period-to-period comparisons of our core operating performance. We monitor, and have presented in this release, non-GAAP net income (loss) and non-GAAP (EPS) because they are each a key measure used by our management and board of directors to understand and evaluate our operating performance and to establish budgets. We believe non-GAAP net income (loss) and non-GAAP EPS help identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we include in net income (loss) but not in non-GAAP net income (loss). Accordingly, we believe non-GAAP net income (loss) and non-GAAP (EPS) provide useful information to investors, analysts and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance.
Non-GAAP net income (loss) and non-GAAP (EPS) are not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of non-GAAP net income (loss) and non-GAAP EPS rather than net income (loss) and EPS, which is for each the most directly comparable financial measure calculated and presented in accordance with GAAP. In addition, the expenses and other items that we exclude in our calculations of non-GAAP net income (loss) and non-GAAP EPS may differ from the expenses and other items, if any, that other companies may exclude from non-GAAP net income (loss) and non-GAAP EPS when they report their operating results, limiting the usefulness of non-GAAP net income (loss) and non-GAAP EPS for comparative purposes.
In addition, other companies may use other measures to evaluate their performance, all of which could reduce the usefulness of non-GAAP net income (loss) and non-GAAP EPS as tools for comparison.
The following table reconciles non-GAAP net income (loss) to net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP (in thousands, except share and per share data):
Three Months Ended
December 31, Year Ended December 31,
------------------------- -------------------------
2025 2024 2025 2024
----------- ----------- ----------- -----------
Net income (loss) $ (1,493) $ (52,969) $ 10,039 $ (72,617)
Non-GAAP
adjustments:
Stock-based
compensation
expense 1,101 578 4,447 2,805
(Gain) loss on
warrant
liability (4,630) 46,760 (37,740) 46,935
Asset
write-down and
restructuring
(1) -- -- -- (192)
Transaction
Expenses (2) 631 466 631 466
Income tax
benefit
related to
business
combinations (2,541) -- (2,541) --
---------- ---------- ---------- ----------
Non-GAAP net loss $ (6,932) $ (5,165) $ (25,164) $ (22,603)
========== ========== ========== ==========
Net income (loss)
per share
Basic $ (0.04) $ (1.75) $ 0.26 $ (2.71)
Diluted $ (0.04) $ (1.75) $ 0.24 $ (2.71)
Non-GAAP net loss
per share
Basic $ (0.16) $ (0.17) $ (0.65) $ (0.84)
Diluted $ (0.16) $ (0.17) $ (0.60) $ (0.84)
Weighted-average
shares used in
computing net
loss per share
Basic 42,329,510 30,277,019 38,841,116 26,774,895
Diluted 42,329,510 30,277,019 42,125,932 26,774,895
(1) Asset write-down and restructuring benefit for the twelve months ended
December 31, 2024, reflects restructuring charges, net of estimate
adjustments, and is included within general and administrative expenses
within the consolidated statements of operations.
(2) Transaction expenses for the twelve months ended December 31, 2025,
primarily consisted of legal and accounting costs incurred in
connection with the business combinations completed in November 2025.
Transaction expenses for the twelve months ended December 31, 2024,
primarily consisting of brokerage, legal and accounting fees incurred
in connection with our issuance of warrants in November 2024. In both
periods, these costs are included within general and administrative
expenses within the consolidated statements of operations.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260305148397/en/
CONTACT: Palladyne AI Investor Contact:
Brian S. Siegel, IRC$(R)$, M.B.A.
Senior Managing Director
Hayden IR - Chicago
(346) 396-8696 (o)
brian@haydenir.com
IR@palladyneai.com
Palladyne AI Press Contact:
Heath Meyer
(858) 768-1527
PR@palladyneai.com
(END) Dow Jones Newswires
March 05, 2026 06:00 ET (11:00 GMT)
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