Palladyne AI (PDYN) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of $5.8 million, up 470% year-over-year and 63% sequentially, driven by acquisitions, organic growth, and new product sales.

• Backlog increased to $24.6 million as of June 30, 2026, with $13 million in new contract awards and strong visibility into the second half of 2026.

• Net loss widened to $12.3 million for Q2 2026, reflecting higher operating expenses from expanded operations and increased headcount.

• Significant progress in field validation of autonomy software and hardware, including successful U.S. Army and Air Force exercises and new contracts.

• Expanded partnership with Israel Aerospace Industries for exclusive U.S. rights to advanced loitering munitions, with up to ten years of exclusivity.

Financial highlights

• Q2 2026 revenue: $5.8 million (470% YoY growth, 63% sequential growth); six-month revenue: $9.3 million, up 242% YoY.

• Product revenue: $2.7 million; engineering services: $1.9 million; AI product development: $1.2 million.

• Gross margin: 29%, impacted by underutilized manufacturing capacity and increased cost of revenue.

• Operating loss: $13.4 million; GAAP net loss: $12.3 million ($0.27/share); non-GAAP net loss: $10.8 million ($0.23/share).

• Cash, cash equivalents, and marketable securities totaled $43.7 million at quarter end; working capital was $43.8 million.

Outlook and guidance

• Full-year 2026 revenue guidance reaffirmed at $24–$27 million (357%–415% YoY growth).

• Operating cash burn guidance maintained at $32–$36 million for 2026, with cash usage expected to decline in H2.

• Majority of current backlog expected to convert to revenue over the next 12–18 months.

• Management believes liquidity and backlog position support execution of the 2026 plan.

• Company may seek additional capital opportunistically.