Redwire Q2 Earnings Call Highlights

Key Points

• Record quarterly performance: Redwire’s Q2 revenue rose 89.6% year over year to $117.1 million, while gross margin reached a record 27.8%, helped by growth in its higher-margin defense technology business.
• Backlog and outlook strengthened: Contracted backlog increased 64.5% year over year to a record $542.1 million, supported by a 1.42 quarterly book-to-bill ratio. The company reaffirmed its 2026 revenue guidance of $450 million to $500 million and expects revenue to build in the second half.
• Balance sheet improved: Redwire ended the quarter with $607.8 million in liquidity after raising $487.9 million through an equity offering, while total debt fell 75% year over year to $48.9 million.

Redwire NYSE: RDW reported record second-quarter revenue, gross margin and contracted backlog for 2026, as growth in its defense technology business and continued demand for space systems supported results. The company reaffirmed its full-year revenue outlook and said it expects revenue to build during the second half.

Revenue for the second quarter reached $117.1 million, up 20.7% sequentially and 89.6% from the year-earlier period. The space segment generated $55.2 million in revenue, while defense technology contributed $61.9 million. Chief Financial Officer Chris Edmonds said the Edge Autonomy acquisition was the primary driver of the substantial year-over-year increase in defense technology revenue.

“With more than $350 million in bookings during the last two quarters, we continue to expect our revenue to build in the second half of the year,” Edmonds said.

Margins Improve as Defense Mix Grows

Gross margin rose to a record 27.8% during the quarter, improving both sequentially and year over year. Edmonds attributed the result to a stronger defense technology contribution, which historically carries higher margins, as well as a business mix shifting from development programs into production. He also said estimated-at-completion, or EAC, changes had a net-neutral effect during the quarter.

Redwire recorded a net loss of $41 million, an improvement of $56 million from the prior-year period. Adjusted EBITDA was negative $3.2 million, which management said was a significant improvement both year over year and sequentially.

While the company highlighted the margin progress, Edmonds said Redwire continues to focus on cost control and program execution. He told analysts that the company’s prior view of gross margins in the low-to-mid-20% range remains an appropriate near-term expectation, while additional expansion could occur as space backlog is replenished and defense technology grows.

Research and development spending increased to $12.5 million in the quarter from $1.7 million a year earlier. Management said the increased investment is intended to mature products and solutions to meet customer demand.

Backlog Reaches $542.1 Million

Second-quarter bookings totaled $165.8 million, producing a quarterly book-to-bill ratio of 1.42. The last-12-month book-to-bill ratio was 1.52. Contracted backlog grew 8.8% from the first quarter and 64.5% from a year earlier to a record $542.1 million.

• Space backlog was $322 million as of June 30.
• Defense technology backlog was $220.2 million.
• Management noted that most defense technology revenue is recognized at a point in time, while most space revenue is recognized over time.

Edmonds said the company has now posted five consecutive quarters of backlog growth. He described the macro environment as supportive and said Redwire’s last-12-month book-to-bill ratio signals growth, though he cautioned that contract awards can be uneven across quarters.

For 2026, Redwire reaffirmed its revenue forecast of $450 million to $500 million. The midpoint would represent 41.6% year-over-year growth. The company reported year-to-date revenue of $214 million and said it had visibility into more than 90% of the midpoint of its annual revenue guidance.

Balance Sheet Strengthened Through Equity Raise

Redwire ended the quarter with total liquidity of $607.8 million, consisting of $557.8 million in cash equivalents and restricted cash and $50 million of undrawn revolver capacity. The increase was primarily driven by $487.9 million in net proceeds raised through its at-the-market equity program during the quarter.

Management said total debt fell 75% year over year to $48.9 million, while net interest expense declined to less than $1 million from $23.8 million in the second quarter of 2025. The company also said its Series A preferred shares have fully converted into common stock and outstanding warrants were reduced 92% to 202,000, with those warrants scheduled to expire in September.

Edmonds said Redwire had 249.9 million common shares outstanding. The company increased inventory to support faster delivery times for its unmanned aircraft systems, particularly in defense markets, and expects inventory levels may rise further in the third quarter.

Production Expansions and Defense Technology Programs

Chief Executive Officer Peter Cannito outlined a capital allocation framework centered on balance sheet strength, internal investment and accretive acquisitions. He said the company has completed 11 acquisitions to date and continues to assess acquisition opportunities following the integration of Edge Autonomy.

Redwire opened a 30,000-square-foot microgravity center of excellence in Georgetown, Indiana, featuring expanded laboratory space and a payload operations center linked to the International Space Station. The site will support pharmaceutical and biotechnology research, development and manufacturing in microgravity.

The company also announced a planned 164,000-square-foot expansion in Huntsville, Alabama, expected to be completed in the fourth quarter of 2027. The project is supported by approximately $8.5 million in eligible state and local economic-development incentives and is intended to expand production of Stalker aircraft, Octopus intelligence, surveillance and reconnaissance payloads, power systems and space capabilities.

Among recent contract and program updates, Redwire said it was selected as one of 15 vendors for the Space Systems Command’s $981 million NITE-STAR capability development indefinite-delivery, indefinite-quantity contract. The company also received a high eight-figure, multiyear award to supply Penguin Mk3 aircraft to an undisclosed NATO customer, along with a Taiwan Coast Guard contract and follow-on Stalker Block 30 awards from the U.S. Marine Corps and U.S. Army.

Redwire delivered nearly 200 Octopus ISR payloads year to date, up more than 15% from the prior year. Cannito said the company’s development pipeline includes the Stalker Block 40 and Penguin Mk3 platforms, as well as expanded payload and radio-frequency capabilities.

In microgravity operations, Redwire’s venture company SpaceMD signed an agreement to purchase an entire SpaceX Starfall spacecraft. The first SpaceMD Starfall mission is slated for 2028 and is expected to carry up to 32 PIL-BOX units for microgravity research and manufacturing payloads.

About Redwire (NYSE:RDW)

Redwire Corporation is a space infrastructure company specializing in the design, engineering and manufacturing of mission-critical hardware and software for the spaceflight industry. The company's offerings include deployable structures, solar power systems, radio frequency antennas, advanced composites and transparent optics. Redwire serves a broad customer base that spans civil space agencies, national defense organizations and commercial satellite operators, helping enable missions ranging from communications and Earth observation to deep-space exploration.

Formed through the strategic combination of several specialized space technology firms, Redwire's portfolio encompasses both flight-proven hardware and cutting-edge in-space manufacturing capabilities.

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