Redwire’s third quarter results were marked by rapid year-on-year growth, yet the market responded negatively as the company’s revenue fell meaningfully short of Wall Street’s expectations. Management attributed the shortfall primarily to delays in U.S. government contract awards, particularly affecting critical defense and reconnaissance programs. CEO Peter Cannito described the impact as "a temporary near-term timing issue," citing strong customer demand but slower-than-expected contracting activity due to the ongoing government shutdown. The company also pointed to its acquisition of Edge Autonomy as a key contributor to revenue growth and operational transformation during the quarter.
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Redwire (RDW) Q3 CY2025 Highlights:
- Revenue: $103.4 million vs analyst estimates of $132 million (50.7% year-on-year growth, 21.7% miss)
- EPS (GAAP): -$0.29 vs analyst expectations of -$0.15 (93.3% miss)
- Adjusted EBITDA: -$2.57 million vs analyst estimates of $8.33 million (-2.5% margin, significant miss)
- The company dropped its revenue guidance for the full year to $330 million at the midpoint from $500 million, a 34% decrease
- Operating Margin: -39.8%, down from -10.8% in the same quarter last year
- Backlog: $355.6 million at quarter end
- Market Capitalization: $1.01 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Redwire’s Q3 Earnings Call
- Sujeeva De Silva (ROTH Capital Partners) asked about the impact of delayed contract awards on 2026 outlook. CEO Peter Cannito explained that these are "not lost awards," emphasizing timing issues and pointing to a strong expected rebound once government funding resumes.
- Sujeeva De Silva (ROTH Capital Partners) followed up on pipeline priorities, asking which product areas were most emphasized. Cannito highlighted UAS orders as a major priority, but stressed that all five product areas have "extraordinary potential" for future growth.
- Greg Konrad (Jefferies) requested clarification on gross margin sustainability and the effect of purchase accounting adjustments. Cannito confirmed that a 27–30% gross margin is the target range going forward, with one-time adjustments now fully absorbed.
- Scott Buck (H.C. Wainwright) inquired about the completion and size of cost-cutting initiatives. Cannito and incoming CFO Chris Edmunds detailed ongoing efforts, targeting a $10 million annual savings run-rate and further operating efficiencies.
- Retail Shareholder (as presented by management) questioned the company’s susceptibility to the government shutdown. Cannito explained that Redwire’s contract cycle meant key awards were scheduled for this period, uniquely exposing the company to delays compared to peers.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be monitoring (1) the pace at which delayed U.S. government contracts—especially in UAS and defense programs—are awarded and move into production; (2) the effectiveness of cost reduction and operating efficiency initiatives in supporting margin improvement; and (3) continued expansion of Redwire’s product lines, particularly in VLEO spacecraft, space infrastructure, and microgravity research. Execution on production ramp-up and maintaining a diversified customer base will be important indicators of progress.
Redwire currently trades at $6.16, down from $7.30 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).
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