Palladyne AI Reiterates 2026 Guidance After Record Quarter
Second-quarter revenue reached $5.8 million, and the company kept its $24 million to $27 million full-year outlook intact.
Palladyne AI Corp. (PDYN) reported second-quarter revenue of $5.8 million, up 470% from $1.0 million a year earlier and 63% from $3.5 million in the first quarter, and reiterated full-year 2026 revenue guidance of $24.0 million to $27.0 million.
The U.S.-based aerospace, defense and industrial technology company said the increase was driven by both acquisitions and organic growth. Sequential growth of 63%, compared with 107% year-over-year growth in the first quarter, marked a faster sequential ramp as the company described a second-half acceleration.
President and Chief Executive Officer Ben Wolff said the headline was $13.0 million of new contract awards, which he said is why the company is comfortable reiterating guidance. Backlog stood at $24.6 million as of June 30, 2026, up 43% from $17.3 million at March 31, 2026, after those awards were net of revenue recognized. The company expects a majority of that backlog to be recognized as revenue over the next 12 to 18 months.
During the quarter, Palladyne signed an exclusive U.S. partnership with Israel Aerospace Industries covering HARPY, HAROP and Mini HARPY long-range loitering munitions, with no upfront payment and up to ten years of exclusivity. It also secured $2.6 million in BRAIN flight-computer orders from a defense prime, including a $2.3 million contract supporting a low-cost kinetic counter-UAS interceptor, and commenced a previously announced $4.2 million Air Force Research Laboratory HANGTIME contract. A $2.9 million U.S. Air Force STRATFI option exercise brought total program value for the Palladyne IQ embodied AI architecture to over $10.6 million.
The company was competitively selected for two U.S. Army contracts under the Disruptive Applications Broad Agency Announcement to validate SwarmOS and Gremlin-X with 4th Infantry Division warfighters. It demonstrated those systems at the Army’s Ivy Mass exercise, participated in an additional Department of War exercise in July, and said it has been invited to five more through March 2027.
Operating loss widened to $13.4 million from $8.1 million a year earlier, mainly reflecting higher stock-based compensation and continued investment in Palladyne Aerospace and Defense. GAAP net loss was $12.3 million, or $0.27 a share, compared with $7.5 million, or $0.20 a share, in the year-ago quarter. Non-GAAP net loss was $10.8 million, or $0.23 a share. Non-cash stock compensation expense was $2.3 million, versus $1.1 million a year earlier. The quarter included a $0.8 million non-cash gain on warrant liability revaluation.
Cash, cash equivalents and marketable securities totaled $43.7 million as of June 30, 2026, roughly flat with March 31, 2026. Operating cash burn ran higher than the prior quarter. That increase reflected early scaling of revenue against the cost base, one-time capital expenditures of roughly $0.9 million, added Aerospace and Defense headcount, and additional engineers supporting existing contracts and programs including Gremlin-X.
Wolff said the company is taking those costs against contracts it can already see and expects quarterly cash usage to come down as revenue and margins ramp through the second half. Palladyne reiterated full-year 2026 operating cash burn of $32.0 million to $36.0 million, or $8.0 million to $9.0 million per quarter on average.
The company expects sequential revenue growth in the third quarter as backlog converts, new contracts are awarded and performed, and commercial deployments expand. Based on its liquidity position and expected backlog conversion, management said it is well-positioned to execute its 2026 plan.