Redwire Corporation (RDW) saw its shares drop approximately 10% in after-hours trading Wednesday after the space infrastructure company reported first-quarter revenue that fell short of analyst expectations and unveiled plans to sell up to $350 million in common stock.
Q1 Financial Results
The Jacksonville, Florida-based company posted revenue of $97.0 million for the quarter ended March 31, a 57.9% increase from $61.4 million a year earlier, but below the analyst consensus of roughly $104.6 million. Net loss widened significantly to $76.5 million, compared with $2.9 million in the same period last year, driven by over $44 million in non-recurring items, primarily related to equity-based compensation for Edge Autonomy incentive units.
Adjusted EBITDA deepened to a loss of $9.2 million from a $2.3 million loss a year ago. However, gross margin improved to 26.6% from 14.7%, reflecting better operational execution and portfolio management, according to Chief Financial Officer Chris Edmunds.
Record Backlog and Guidance
Despite the quarterly miss, Redwire reported a record backlog of $498.1 million, and management reaffirmed its 2026 revenue guidance of $450 million to $500 million. The book-to-bill ratio, which compares orders booked to revenue recognized, reached 1.92, indicating strong demand. Chairman, CEO, and President Peter Cannito highlighted key contracts including the $1.8 billion Andromeda IDIQ for advanced spacecraft, the first order for its ELSA solar array, and additional Marine Corps demand for Stalker drones.
Stock Sale and Dilution Concerns
Investors reacted negatively to the announcement of a proposed sale of up to $350 million in common stock through agents including Truist Securities, J.P. Morgan, BofA Securities, Canaccord Genuity, and H.C. Wainwright. Proceeds may be used for working capital, capital projects, debt repayment, acquisitions, or other corporate purposes. The company cautioned that further equity offerings could dilute existing shareholders' stakes.
Market Context
The earnings report comes amid a busy period for publicly traded space companies. Firefly Aerospace and Voyager Technologies recently delivered mixed results, while Rocket Lab is scheduled to report earnings Thursday. Investors are closely watching whether space and defense firms can capitalize on government demand while controlling costs.
Redwire, which completed its Edge Autonomy acquisition on June 13, 2025, now reports in two segments: Space and Defense Tech. The company ended the quarter with $175.2 million in liquidity, including $144.5 million in cash and equivalents.
Management will host an earnings call at 9 a.m. ET Thursday, with investors focused on whether the record backlog and defense contracts can support the 2026 revenue target amid widening losses and potential dilution from the stock sale.
