Palladyne AI Reports Fourth Quarter and Full Year 2025 Results and Reiterates 2026 Revenue Guidance of $24 to $27 Million
SALT LAKE CITY--( BUSINESS WIRE)-- Palladyne AI Corp. (NASDAQ: PDYN and PDYNW) (“Palladyne AI”), a U.S.-based defense and industrial technology company delivering embodied AI-powered collaborative autonomy solutions, advanced avionics, precision-manufactured components, UAVs, and advanced aerospace engineering services, today announced financial results for the fourth quarter and full year ended December 31, 2025.
"2025 was a year of operational validation that culminated in structural transformation," said Ben Wolff, President and Chief Executive Officer of Palladyne AI.
Ben Wolff, President and Chief Executive Officer of Palladyne AI, commented:
“2025 was a year of operational validation that culminated in structural transformation. In November, we completed the acquisitions of GuideTech, Warnke Precision Machining and MKR Fabricators and launched Palladyne Defense. That repositioning expanded our capabilities beyond autonomy software to include advanced avionics, engineering services, proprietary airframe and missile development and certified U.S.-based manufacturing. We exited 2025 as a fundamentally different company, with expanded backlog, deeper defense engagement and an integrated autonomy-to-manufacturing stack aligned with evolving Department of War priorities.
“Over the past few months, we have moved decisively to execute across the defense and commercial parts of our business. We commercially released Palladyne IQ 2.0, integrating feedback from potential customers into its development, and recently signed our first customer for the product. We also introduced IntelliSwarm, integrating SwarmOS into the BRAIN X2 flight module, and demonstrated collaborative autonomy between our recently branded Gremlin-X™ (formerly Project Banshee) platform running IntelliSwarm and multiple Red Cat platforms operating with SwarmOS, validating distributed, multi-platform collaboration in real-world environments.
“We also established our presence in the space domain. Through our satellite-related development work with the Air Force Research Laboratory, we are extending SwarmOS capabilities to integrate communications with space-based systems. Separately, our engagement with Portal Space Systems advances propulsion design for next-generation space platforms and establishes a foundation for potential future collaboration surrounding collaborative autonomy.”
Recent Strategic and Operational Highlights
Fourth Quarter 2025 Financial Highlights (vs. fourth quarter 2024)
Full Year 2025 Financial Highlights (vs. full year 2024)
*see GAAP to Non-GAAP reconciliation at the end of this press release
2026 Outlook
The Company reiterates its previously announced full year 2026 revenue guidance of $24 million to $27 million, representing expected year-over-year growth of approximately 357% to 415% compared to 2025 revenue of $5.2 million. Supporting this guidance, Palladyne AI had a contracted 12-18 month backlog of nearly $18.0 million as of mid-February 2026, a more than 30% increase since December 31, 2025.
The guidance reflects revenue contributions from acquired entities, backlog conversion and monetization of development programs secured during and following the Company’s fourth quarter repositioning. Management believes recent contract wins and expanding program activity across air and space domains provide increased visibility into achieving these targets.
The Company continues to advance product maturation milestones and pursue early customer wins across Palladyne IQ 2.0, SwarmOS and BRAIN platforms while maintaining a disciplined focus on execution.
Conference Call
Palladyne AI will host a conference call today, Thursday, March 5, 2026, at 8:00 a.m. Eastern Time to discuss its financial and operational results, strategy and future opportunities.
Dial-in and Webcast Information
Date/Time:
Thursday, March 5, 2026, at 8:00 a.m. Eastern Time
Toll-Free (North America):
1-877-407-0789
Toll/International:
1-201-689-8562
Conference Call ID:
13758938
Webcast Link:
Toll-Free (North America)
1-844-512-2921
Toll/International:
1-412-317-6671
Conference Call ID:
13758938
Expiration:
Thursday, March 19, 2026, 11:59 p.m. Central Time
About Palladyne AI
Palladyne AI is a U.S.-based technology company developing patented embodied artificial intelligence, collaborative autonomy solutions, advanced avionics, autonomous systems, advanced UAV engineering services, and precision-manufactured components for defense and industrial markets. Palladyne AI delivers secure, American-developed and operated platforms designed to meet the stringent requirements of U.S. government and public-sector customers, including data sovereignty, security, and compliance.
Palladyne AI’s embodied AI is designed to operate in complex, contested, and high-risk environments, enabling distributed tasking, human-on-the-loop decision-making, degraded-communications resilience, and multi-domain coordination. Its platform-agnostic autonomy stack combines real-time sensor fusion, adaptive AI models, and edge-native orchestration - without vendor lock-in - to support autonomous and collaborative systems across air, ground, maritime, and industrial domains where performance, resilience, and trust are paramount. For more information about Palladyne AI, including GuideTech and Palladyne Defense, please visit www.palladyneai.com/.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the capabilities or future capabilities of Palladyne AI’s technology and related products, including IntelliSwarm; anticipated growth, operating scale and operating inflection of the Company; the applicability of Palladyne AI’s products and technology to the space domain; 2026 expected financial performance, including expected revenue and sources of revenue; the time of customer acquisition, revenue recognition and backlog realization; the benefits of its AI software and other products and the markets for its products and services; and the applicability of IntelliSwarm and its autonomy software to different kinds of machines (such as UAVs, UGVs and ROVs); future development and qualification plans; and intended future target customers. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events, or results of operations, are forward-looking statements. These statements may be preceded by, followed by, or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,” “intends” or “continue” or similar expressions. Such forward-looking statements involve risks and uncertainties that may cause actual events, results, or performance to differ materially from those indicated by such statements. These forward-looking statements are based on Palladyne AI’s management’s current expectations and beliefs, as well as a number of assumptions concerning future events. However, there can be no assurance that the events, results, or trends identified in these forward-looking statements will occur or be achieved. Forward-looking statements speak only as of the date they are made, and Palladyne AI is not under any obligation and expressly disclaims any obligation to update, alter or otherwise revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
Readers should carefully review the statements set forth in the reports which Palladyne AI has filed or will file from time to time with the Securities and Exchange Commission (the “SEC”), in particular the risks and uncertainties set forth in the sections of those reports entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” for a description of risks facing Palladyne AI and that could cause actual events, results or performance to differ from those indicated in the forward-looking statements contained herein. The documents filed by Palladyne AI with the SEC may be obtained free of charge at the SEC’s website at www.sec.gov.
PALLADYNE AI CORP.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share data)
As of
December 31, 2025
December 31, 2024
Assets
Current assets:
Cash and cash equivalents
$
18,219
$
31,188
Marketable securities
28,836
8,883
Accounts receivable, net of allowance for credit losses of $0.0 million and $0.3 million at December 31, 2025 and 2024, respectively
1,055
134
Unbilled receivables
2,455
1,179
Inventories
339
71
Prepaid expenses and other current assets
1,653
1,275
Total current assets
52,557
42,730
Property and equipment, net
8,889
4,244
Intangible assets, net
10,430
—
Goodwill
14,731
—
Operating lease assets
8,645
8,841
Other non-current assets
460
438
Total assets
$
95,712
$
56,253
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable
$
1,058
$
435
Accrued liabilities
3,550
2,919
Current operating lease liabilities
1,058
1,079
Total current liabilities
5,666
4,433
Warrant liabilities
2,772
51,396
Operating lease liabilities
9,725
9,957
Other non-current liabilities
2,874
—
Total liabilities
21,037
65,786
Commitments and contingencies
Stockholders’ equity (deficit):
Common stock, $0.0001 par value, 165,000,000 shares authorized as of December 31, 2025 and December 31, 2024; 46,117,164 and 33,883,894 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively
5
3
Additional paid-in capital
555,451
481,289
Accumulated other comprehensive income
11
6
Accumulated deficit
(480,792
)
(490,831
)
Total stockholders’ equity (deficit)
74,675
(9,533
)
Total liabilities and stockholders’ equity (deficit)
$
95,712
$
56,253
PALLADYNE AI CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except share and per share data)
Three Months Ended December 31,
Year Ended December 31,
2025
2024
2025
2024
Revenue, net
$
1,661
$
761
$
5,246
$
7,786
Operating expenses:
Cost of revenue (exclusive of items shown separately below)
1,402
554
2,690
3,488
Research and development
3,758
2,612
12,899
10,437
General and administrative
4,683
3,461
17,199
16,842
Sales and marketing
1,014
618
4,744
4,134
Asset write-down and restructuring
—
—
—
(192
)
Total operating expenses
10,975
7,245
37,650
34,709
Loss from operations
(9,314
)
(6,484
)
(32,404
)
(26,923
)
Interest income, net
432
277
1,944
1,244
Gain (loss) on warrant liabilities
4,630
(46,760
)
37,740
(46,935
)
Other income, net
221
—
221
2
Income (loss) before income tax expense
(4,031
)
(52,967
)
7,501
(72,612
)
Income tax benefit (expense)
2,538
(2
)
2,538
(5
)
Net income (loss)
$
(1,493
)
$
(52,969
)
$
10,039
$
(72,617
)
Net income (loss) per share
Basic
$
(0.04
)
$
(1.75
)
$
0.26
$
(2.71
)
Diluted
$
(0.04
)
$
(1.75
)
$
0.24
$
(2.71
)
Weighted-average shares used in computing net income (loss) per share
Basic
42,329,510
30,277,019
38,841,116
26,774,895
Diluted
42,329,510
30,277,019
42,125,932
26,774,895
PALLADYNE AI CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Year Ended December 31,
2025
2024
Cash flows from operating activities:
Net income (loss)
$
10,039
$
(72,617
)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation
4,447
2,805
Depreciation of property and equipment
974
825
Amortization of intangible assets
118
—
Change in fair value of warrant liabilities
(37,740
)
46,935
Allowance for credit losses
—
285
Amortization of investment discount
(1,386
)
(75
)
Deferred income tax benefit
(2,541
)
—
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable
1,096
136
Unbilled receivable
(960
)
855
Inventories
58
994
Prepaid expenses and other current assets
(132
)
1,048
Operating lease assets & other non-current assets
1,005
1,242
Accounts payable
(708
)
(819
)
Accrued liabilities and current operating lease liabilities
(904
)
(3,164
)
Operating lease liabilities
(1,003
)
(1,077
)
Net cash used in operating activities
(27,637
)
(22,627
)
Cash flows from investing activities:
Purchases of property and equipment
(713
)
(265
)
Acquisition of a business, net of cash acquired
(5,302
)
—
Purchases of marketable securities
(75,563
)
(8,859
)
Maturities of marketable securities
57,000
16,000
Net cash (used in) provided by investing activities
(24,578
)
6,876
Cash flows from financing activities:
Proceeds from exercise of stock options
74
130
Proceeds from issuance of common stock under ESPP
148
—
Proceeds from the exercise of warrants
6,419
—
Shares repurchased for payment of tax withholdings
—
(105
)
Payment of obligations under finance leases
(20
)
(3
)
Payment of debt obligations
(3,696
)
—
Proceeds from the issuance of warrants
—
4,432
Proceeds from issuance of common stock
36,371
20,028
Payment of transaction costs related to issuance of common stock
(50
)
(682
)
Net cash provided by financing activities
39,246
23,800
Net (decrease) increase in cash and cash equivalents
(12,969
)
8,049
Cash and cash equivalents at beginning of period
31,188
23,139
Cash and cash equivalents at end of period
$
18,219
$
31,188
Supplemental disclosure of cash flow information:
Cash paid for income taxes
$
2
$
10
Supplemental disclosure of non-cash activities:
Common stock issued in connection with a business acquisition
$
15,872
$
—
Purchases of property and equipment financed through notes payable
$
113
$
—
Warrant liabilities reclassified to equity upon exercise
$
10,883
$
—
PALLADYNE AI CORP.
NON-GAAP FINANCIAL MEASURES
(Unaudited)
To supplement our financial statements presented in accordance with GAAP and to provide investors with additional information regarding our financial results, we have presented in this release non-GAAP net income (loss) and non-GAAP net income (loss) per share (non-GAAP EPS), each of which are non-GAAP financial measures. Non-GAAP net income (loss) and non-GAAP EPS are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies.
We define non-GAAP net income (loss) as our GAAP measures of net income (loss) excluding the impacts of stock-based compensation expense, gain or loss on change in fair value of warrant liabilities, expenses related to business combinations and other non-recurring or non-operating expenses. We define non-GAAP EPS as non-GAAP net income (loss) divided by weighted average outstanding shares.
The most directly comparable GAAP measures to non-GAAP net income (loss) and non-GAAP EPS are net income (loss) and EPS, respectively. We believe excluding the impact of the previously listed items in calculating non-GAAP net income (loss) and non-GAAP EPS can provide a useful measure for period-to-period comparisons of our core operating performance. We monitor, and have presented in this release, non-GAAP net income (loss) and non-GAAP (EPS) because they are each a key measure used by our management and board of directors to understand and evaluate our operating performance and to establish budgets. We believe non-GAAP net income (loss) and non-GAAP EPS help identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we include in net income (loss) but not in non-GAAP net income (loss). Accordingly, we believe non-GAAP net income (loss) and non-GAAP (EPS) provide useful information to investors, analysts and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance.
Non-GAAP net income (loss) and non-GAAP (EPS) are not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of non-GAAP net income (loss) and non-GAAP EPS rather than net income (loss) and EPS, which is for each the most directly comparable financial measure calculated and presented in accordance with GAAP. In addition, the expenses and other items that we exclude in our calculations of non-GAAP net income (loss) and non-GAAP EPS may differ from the expenses and other items, if any, that other companies may exclude from non-GAAP net income (loss) and non-GAAP EPS when they report their operating results, limiting the usefulness of non-GAAP net income (loss) and non-GAAP EPS for comparative purposes.
In addition, other companies may use other measures to evaluate their performance, all of which could reduce the usefulness of non-GAAP net income (loss) and non-GAAP EPS as tools for comparison.
The following table reconciles non-GAAP net income (loss) to net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP (in thousands, except share and per share data):
Three Months Ended December 31,
Year Ended December 31,
2025
2024
2025
2024
Net income (loss)
$
(1,493
)
$
(52,969
)
$
10,039
$
(72,617
)
Non-GAAP adjustments:
Stock-based compensation expense
1,101
578
4,447
2,805
(Gain) loss on warrant liability
(4,630
)
46,760
(37,740
)
46,935
Asset write-down and restructuring (1)
—
—
—
(192
)
Transaction Expenses (2)
631
466
631
466
Income tax benefit related to business combinations
(2,541
)
—
(2,541
)
—
Non-GAAP net loss
$
(6,932
)
$
(5,165
)
$
(25,164
)
$
(22,603
)
Net income (loss) per share
Basic
$
(0.04
)
$
(1.75
)
$
0.26
$
(2.71
)
Diluted
$
(0.04
)
$
(1.75
)
$
0.24
$
(2.71
)
Non-GAAP net loss per share
Basic
$
(0.16
)
$
(0.17
)
$
(0.65
)
$
(0.84
)
Diluted
$
(0.16
)
$
(0.17
)
$
(0.60
)
$
(0.84
)
Weighted-average shares used in computing net loss per share
Basic
42,329,510
30,277,019
38,841,116
26,774,895
Diluted
42,329,510
30,277,019
42,125,932
26,774,895
Asset write-down and restructuring benefit for the twelve months ended December 31, 2024, reflects restructuring charges, net of estimate adjustments, and is included within general and administrative expenses within the consolidated statements of operations.
Transaction expenses for the twelve months ended December 31, 2025, primarily consisted of legal and accounting costs incurred in connection with the business combinations completed in November 2025. Transaction expenses for the twelve months ended December 31, 2024, primarily consisting of brokerage, legal and accounting fees incurred in connection with our issuance of warrants in November 2024. In both periods, these costs are included within general and administrative expenses within the consolidated statements of operations.