Red Cat Holdings Inc (RCAT) Q4 2025 Earnings Report

Red Cat Holdings reported Q4 2025 results that underscore a challenging near-term operating environment and continued cash burn. Revenue for the quarter was $1.63 million, down 72.1% year-over-year, while gross profit was negative by approximately $0.85 million, yielding a gross margin of about -52.2%. Operating loss reached $23.12 million, driving a net loss of $23.12 million and an earnings per share of -$0.27. EBITDA was also negative at -$23.12 million, signaling weak operating leverage under current cost structure and product mix. The company generated negative operating cash flow of roughly $15.91 million and free cash flow of about $16.18 million for the quarter, with cash on hand of $7.72 million at period end.

From a liquidity perspective, Red Cat carried total debt around $27.81 million and net debt of about $20.09 million, with current assets of ~$29.41 million and current liabilities of ~$28.91 million, yielding a thin current ratio near 1.02. The balance sheet carries sizable goodwill and intangible assets (~$25.72 million combined) that may invite impairment considerations if the revenue trajectory does not stabilize. Management commentary in the dataset is not provided (earnings transcript is empty), so investor takeaways rely on the reported numbers and trend signals rather than explicit guidance. Given the scale of cash burn and the absence of near-term profitability, the key questions for investors center on whether the company can accelerate revenue, improve unit economics, and extend runway through cost discipline or external financing.

Overall, the QQ4 2025 results highlight a high-risk, high-uncertainty profile for RCAT in the near term. While the drone and FPV market presents a long-run growth runway, near-term performance suggests material margin compression and liquidity challenges that require clear strategic leverage to restore profitability and cash generation.