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Redwire Corp (RDW)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was weak with a significant miss vs consensus: revenue $61.8M vs ~$80.5M estimate, and EPS -$1.41 vs ~-$0.15 estimate; Adjusted EBITDA fell to -$27.4M, driven by unfavorable EAC adjustments on a complex RF program and transaction-related/non-cash items. Bold miss vs estimates is likely to pressure near-term sentiment. *
  • Guidance was reset: combined FY 2025 revenue (as if Edge Autonomy closed 1/1/25) lowered to $470–$530M (from $535–$605M), and Adjusted EBITDA guidance was withdrawn given contracting timing uncertainty; new FY 2025 revenue including Edge only from 6/13/25 is $385–$445M.
  • Liquidity improved to a record $113.6M (cash $76.5M + undrawn revolver $35.0M + restricted cash $2.1M), backlog climbed to $329.5M, and quarterly book-to-bill reached 1.47 (flat YoY), providing medium-term support despite near-term profitability pressure.
  • Strategic catalysts: acquisition of Edge Autonomy (closed 6/13) diversifies revenue toward production and “point-in-time” recognition, Stalker UAS added to DoD Blue List and awarded a prototype phase agreement for the U.S. Army LRR program; technical milestones in ROSA for Gateway and Mason lunar/Mars manufacturing; formation of SpaceMD and a royalty agreement signal monetization optionality.

What Went Well and What Went Wrong

What Went Well

  • Liquidity and backlog strength: total liquidity reached $113.6M and contracted backlog rose to $329.5M; quarterly book-to-bill was 1.47, indicating pipeline conversion momentum.
  • Strategic execution: closed Edge Autonomy acquisition, expanding production-weighted mix and global footprint; CEO: “With Edge Autonomy, we are uniquely positioned to transform the future of multi-domain operations.”
  • Technical and program wins: successful Gateway Roll-Out Solar Array deployment test; Mason passed CDR with NASA participation; Stalker UAS added to DoD Blue List and prototype phase award under LRR.

What Went Wrong

  • Top-line/earnings miss and profitability deterioration: revenue down 20.9% YoY to $61.8M; net loss widened to -$97.0M; Adjusted EBITDA fell to -$27.4M, with ~$25.2M unfavorable EAC largely tied to one RF program, plus equity comp ($29.6M), transaction expenses ($16.6M) and interest ($20.0M) related to Edge Autonomy transaction.
  • Cash burn: Q2 operating cash flow -$87.7M and free cash flow -$93.5M, driven in part by >$35M M&A-related and non-recurring interest outflows.
  • Guidance uncertainty: FY 2025 Adjusted EBITDA guidance withdrawn due to contracting timing; combined revenue target lowered, reflecting budget delays and EAC impacts.

Financial Results

Summary vs prior periods

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$69.6 $61.4 $61.8
Net Loss ($USD Millions)$(67.2) $(2.9) $(97.0)
EPS ($USD)$(1.38) $(0.09) $(1.41)
Adjusted EBITDA ($USD Millions)$(9.2) $(2.3) $(27.4)
Cash from Operations ($USD Millions)$7.1 $(45.1) $(87.7)
Free Cash Flow ($USD Millions)$3.0 $(49.1) $(93.5)
Book-to-Bill (x)0.51 0.92 1.47

Q2 2025 vs Wall Street consensus (S&P Global)

MetricEstimateActual
Revenue ($USD Millions)$80.5*$61.8
EPS ($USD)-$0.15*-$1.41
EBITDA ($USD Millions)$(0.59)*$(70.19)*

Values retrieved from S&P Global.*

KPIs

KPIQ1 2025Q2 2025
Total Liquidity ($USD Millions)$89.2 $113.6
Cash & Equivalents ($USD Millions)$54.2 $76.5
Contracted Backlog ($USD Millions)$291.2 $329.5
Contracts Awarded ($USD Millions)$56.2 $90.6

Note: Redwire did not provide segment revenue breakdown in the Q2 press release/8-K.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue (Combined, assumes Edge Autonomy closed 1/1/25)FY 2025$535–$605M $470–$530M Lowered
Revenue (Including Edge from 6/13/25 close date)FY 2025N/A$385–$445M New
Adjusted EBITDA (Combined)FY 2025$70–$105M; positive FCF Withdrawn Withdrawn
Free Cash Flow (Combined)FY 2025Positive Not reiterated Withdrawn/Unspecified

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
EAC volatility on development programs2024 had $17.7M net unfavorable EACs; Q4 2024 had $9.1M unfavorable EACs Q2 saw $25.2M unfavorable EAC tied to a complex RF program; management emphasized conservative accounting and improved controls Intensifying near-term, mitigation efforts underway
Government budget delays (NASA/SDA/DoD)Q1 cited U.S. award delays amid leadership transitions and budget uncertainty Continued delays with signs of improving indicators (Golden Dome, drone dominance memo, NATO/Canada defense spending) Mixed: delays persist, outlook improving
UAS/Defense tech momentum (Edge Autonomy)Acquisition pending; strategic rationale articulated in FY24 release Acquisition closed; Stalker on DoD Blue List; prototype phase award for LRR program Accelerating
Product performance (ROSA, Mason)FY24/early 2025 highlights: ROSA orders; PIL-BOX missions Successful Gateway ROSA test; Mason passed CDR with NASA participation Positive execution
SpaceMD microgravity pharma monetizationQ1: additional ISS pharma investigations awarded SpaceMD launched; royalty agreement executed to monetize IP from PillBox missions Expanding optionality
International momentum (EU/NATO/Canada)Q1: expanding EU presence; ESA contracts NATO 5% GDP defense commitment; Canada +$9B plan cited as tailwinds Improving

Management Commentary

  • CEO on strategic positioning: “With Edge Autonomy, we are uniquely positioned to transform the future of multi-domain operations and provide decisive advantages to U.S. and allied warfighters.”
  • CFO on guidance reset and EACs: Revised combined FY 2025 revenue to $470–$530M and withdrew Adjusted EBITDA guidance due to contracting timing; Q2 adjusted EBITDA impacted by $25.2M net unfavorable EACs on an RF development program.
  • CEO on SpaceMD: “SpaceMD represents the evolution of our venture optionality strategy… we expect to receive royalties from the commercial sales of resulting pharmaceutical products.”

Q&A Highlights

  • EACs and accounting controls: Management emphasized conservative recognition of EACs and improved accounting controls; withdrew EBITDA guidance pending portfolio review and greater budget clarity.
  • Edge Autonomy financial profile: Edge is a mature, production-heavy business with higher gross margins; management expects FCF positivity as scale increases.
  • LRR program details: Stalker awarded prototype phase agreement; evaluation to occur in coming months; FY 2026 budget includes ~$325M for LRR procurement.
  • SpaceMD structure and royalties: Separate entity aids pharma engagement; royalty agreement validates the commercialization model.
  • Integration roadmap: 12-month integration playbook; initial focus on financial reporting, then strategic alignment and combined BD opportunities.

Estimates Context

  • Q2 2025 results vs consensus: revenue $61.8M vs ~$80.5M estimate (miss); EPS -$1.41 vs ~-$0.15 estimate (miss); S&P-defined EBITDA actual ~-$70.2M vs estimate ~-$(0.6)M. The magnitude of EACs and guidance withdrawal implies further downward estimate revisions near term. *

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Significant miss and guidance withdrawal create near-term overhang; watch for resolution of the RF program EACs and evidence of cash burn moderation in H2.
  • Liquidity and backlog provide cushion; book-to-bill at 1.47 and backlog at $329.5M support medium-term revenue visibility.
  • Edge Autonomy improves mix toward production, potentially reducing percent-of-completion volatility and enhancing gross margin profile.
  • Defense catalysts: Stalker Blue List and LRR prototype phase position RDW for FY 2026 procurement; monitor contract timing amid budget dynamics.
  • Civil space execution remains strong (ROSA, Mason); SpaceMD royalty model introduces non-linear upside if pharma partners scale.
  • Expect consensus to rebase lower following the Q2 miss and EBITDA guidance withdrawal; reassessment of FY 2025/2026 profitability and cash flow likely. *
  • Tactical: stock reaction will hinge on near-term contract awards, updates on RF program remediation, and proof points that Edge Autonomy drives steadier revenue recognition and cash conversion.