Palladyne AI (PDYN) Q4 2025 earnings summary

Executive summary

• 2025 marked a pivotal year, transitioning from a development-stage AI firm to a vertically integrated industrial and defense platform through acquisitions and product launches, including GuideTech, Warnke Precision Machining, and MKR Fabricators, launching Palladyne Defense and expanding into advanced avionics, engineering, and manufacturing.

• Commercially released Palladyne IQ 2.0, signed first customer, introduced IntelliSwarm for collaborative autonomy, and expanded into the space domain via Air Force Research Laboratory and Portal Space Systems engagements.

• Strategic focus is on edge-based, biologically inspired AI for autonomous systems, with significant differentiation in defense and commercial markets.

• Strengthened IP portfolio with new patent issuance and four new applications related to AI software.

• Backlog grew from $13.5M at year-end 2025 to nearly $18M by mid-Q1 2026, reflecting new contract wins and expanded customer base.

Financial highlights

• Q4 2025 revenue rose 118% year-over-year to $1.7M, primarily due to post-acquisition contributions.

• Full-year 2025 revenue fell 33% to $5.2M.

• Q4 cost of revenue was $1.4M, R&D expense $3.8M, G&A expense $4.7M, and sales/marketing expense $1M, all up year-over-year due to acquisitions and expanded operations.

• Q4 operating loss was $9.3M; Q4 GAAP net loss $1.5M ($0.04/share), non-GAAP net loss $6.9M ($0.16/share), with a $46M non-cash gain from warrant liabilities and a $2.5M non-cash tax benefit.

• Cash, equivalents, and marketable securities totaled $47M at year-end 2025; Q4 net cash burn was $10M, including $8.5M from operations.

Outlook and guidance

• 2026 revenue guidance is reiterated at $24M–$27M, implying 357%–415% year-over-year growth, driven by organic growth and contributions from acquired businesses.

• Backlog increased over 30% since year-end to nearly $18M by mid-February 2026.

• 2026 quarterly operating cash usage is projected at $8M–$9M, reflecting ongoing investment in SwarmOS, IQ, and acquired programs.

• No specific gross margin or profitability guidance provided, but focus remains on higher-margin opportunities, especially in AI and select hardware.

• Guidance reflects contributions from acquisitions, backlog conversion, and monetization of new development programs.