Red Cat Holdings, Inc. (RCAT) on Q4 2021 Results - Earnings Call Transcript
Operator: Welcome to the Red Cat Holdings 2021 Year-End Financial Results and Corporate Update Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Jules Abraham with Core IR. Please go ahead. Jules Abraham: Thank you, Kate and good afternoon, everyone. Thank you for joining us for the Red Cat Holdings 2021 year-end financial results and corporate update conference call. Joining us today from Red Cat Holdings are Jeff Thompson, Chief Executive Officer of Red Cat Holdings; and Joseph Hernon, Chief Financial Officer. During this call, management will be making forward-looking statements including statements that address Red Cat Holdings' expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Red Cat's most recently filed periodic reports on Form 10-K and Form 10-Q and the Form 8-K filed with the SEC today. The contents of this call contain time-sensitive information that is accurate only as of today, August 12, 2021 and accepted as required by law, Red Cat disclaims any obligation to publicly update, or revise any information to reflect events or circumstances that occur after this call. It's now my pleasure to turn the call over to Jeff Thompson, Chief Executive Officer. Jeff? Jeffrey Thompson: Thank you. Thank you for that introduction. So to recap our last year we hit many material milestones. Starting from almost zero revenue to $5 million is a large milestone for a new company, and specifically in a new space. I'd like to congratulate everyone at the Red Cat companies for an amazing job. We closed three acquisition Fat Shark, Skypersonic and Rotor Riot, we announced our fourth acquisition Teal Drone which is one of the few companies approved to sell to the Department of Defense. We reorganized the company into a consumer and enterprise divisions giving our teams, a clear path forward. We integrated Dronebox into Skypersonic software platform and we uplifted to the NASDAQ and has seen our liquidity expand. Although, I'm excited and proud what the Red Cat has accomplished over the last four quarters. I'm more excited about the next couple of years. We believe there are two significant catalysts that will grow our opportunity exponentially. Number one, the infrastructure bill. There are 617,000 bridges in the US, 3.5 million miles of storm sewers, before you take the bridge or sewer pipe you need to inspect it. These two categories alone and there are many more in the infrastructure space would expand the already $20 billion inspection space. We believe this here and now revenue opportunity fits perfectly with the Skypersonic Dronebox platform. We continue to get traction with large potential customers in the inspection space and we'll inform our investors as we get these customer wins. Number two recent bipartisan legislation to ban all Chinese drones from federal funds for five years. This reports public safety and first responders across the US to use Made in USA drones which, again, we are well positioned. This is an entire segment that currently goes to Chinese drone manufacturers. These two catalysts will drive the entire drone ecosystem. I would also like to give an update on the Teal Drones acquisition. We are trying to close the transaction as quickly as possible as they are starting to gain sales traction. After we announced the Teal Drone's definitive agreement they received several orders from the federal government, state and local agencies, defense contractors and commercial entities. And just yesterday they have been down selected to continue being evaluated for a potential OTA contract award with the US Army for their SRR or Short-Range Reconnaissance -- 2 program. We believe the team at Teal Drones has built a premier made in USA drone platform that the Department of Defense can rely on. We expect Teal Drones to have a great 2022. Drones, they're the new EVs that fly, and we believe they're going to change the world. And with that I'm going to hand the call over to Joseph Hernon, our Chief Financial Officer. Joseph Hernon: Thanks, Jeff. I'm going to comment on some of the financial aspects of some of the points that Jeff just made. As he noted we reported an approximately tenfold increase in our revenues during fiscal 2021 increasing from approximately $400,000 to almost $5 million just a tremendous increase in really our first year as a truly commercial enterprise. The revenue mix during the recently completed fiscal year was about 75% from Fat Shark, and about 25% from Rotor Riot. We expect both of those divisions to continue, subsidiaries to continue growing in fiscal 2022, but even more exciting, as Jeff noted we expect Skypersonic to really leverage the opportunity of the new infrastructure bill and contribute to some meaningful revenue and beyond that towards the end of this fiscal year after we close Teal we expect to see them also contribute revenues. So we feel really good about revenue growth in fiscal '22, and beyond that, but it's certainly it's good to see some good growth right in the near term. On an operating basis while we did report a pretty significant net loss of $13 million it's really misleading when we back out some of the big non-cash charges that we had. We had some pretty complex financings during fiscal 2021 conversely, we've done some, recently done some very simple financings, which I think is a good contrast of how we've evolved as a company not only operationally but how the Wall Street and the market viewed us. So, we had some complex securities that we had an issue to raise some capital and those resulted in some pretty big non-cash charges. Collectively, all of these non-cash charges totaled more than $11 million. So our true cash burn during fiscal 2021 was only approximately $1.6 million. As a Chief Financial Officer, I feel great about that. We had that very modest cash burn, even though we were integrating three different acquisitions throughout the year which can be a real challenge to the company. So as I mentioned recently in the past few months, we've had some great recognition by the market. We raised $16 million in a straight common stock offering in May and followed that up with an even bigger stock offering in July for $40 million. So, we've got a very strong balance sheet right now. We've got the financial resources to execute on some clear growth opportunities we seeing in front of us. And so we feel really, really good from a financial perspective. We just completed our first quarter four fiscal '22 but the rest of the years looking really great. And I think the last point that I want to make is we've been very gratified, Jeff and I, when we started the year to see the management team from each of the acquired companies elect to join in a leadership role at Red Cat. It happened at Rotor Riot. It happened Fat Shark. It happened at Skypersonic, and it's scheduled to happen at Teal Network. So, we're really heartened to see really talented entrepreneurs, see the opportunity of joining the Red Cat team and we're really excited about the next one to 5 to 10 years as drones truly make a big impact on so many commercial opportunities. Jeff? Jeffrey Thompson: Jules, I think we can hand it over to questions now. Operator: Our first question is from Mike Marinac of NECS. Please go ahead. Mike Marinac: Hello? How is everyone doing? Jeffrey Thompson: Doing great. Mike Marinac: You can hear me, okay? Jeffrey Thompson: We can hear you. Mike Marinac: Okay. My question is for whoever would like to take the lead. I don't really have a specific question. But I've been following along with Red Cat, and as far as I understood, before the acquisitions of Fat Shark, Skycopter, Teal Riot it was a very small business, maybe with 6 or 8 individuals involved. So, I don't know, looks like for you guys whoever would like to field the question just to go through what has changed as far as Red Cat and growth and the ability to manage all these subsidiary. And one other specific question is would you guys been interrupted or able to describe your interest in pursuing drone deliveries and things like that or if that's too far down the timeline that you're focused on the current infection and military contracts that you've been discussing? Jeffrey Thompson: Yes, thanks for the question. And just as a high level, the original team that was the founding team of Red Cat most of them are integrated into the Dronebox platform, which has now been integrated alongside the Skypersonic platform and now the company has approximately 43 employees before the Teal acquisition closes. The delivery world as we think that is a little too far out for us right now. We are preferring to focus on here and now revenue, which we believe the inspection space is here and now revenue. It's a lot of it is not controlled by the FAA rules which is slowing down a lot of drone companies because most of the inspections are done in confined spaces that are indoors. So we are not controlled by the FAA for those types of deployments. So we focus on that type of revenue. We also the Teal acquisition is already looking to start to bear fruit and they have very large revenue opportunities in the next 12 months through some of the DoD offerings that are happening. So are as Joe mentioned, we're pretty darn excited about the next 12 months and then some. Mike Marinac: Am I still on the line? Operator: Yes. Jeffrey Thompson: Yes, you are. Mike Marinac: Okay. So the residential or commercial delivery aspect if you were sought after by perhaps a large entity, you would not be in a position to provide technology or components to them at this time? Jeffrey Thompson: No, we are absolutely in the position to help drone delivery companies. We would expect if they want to remain compliant the ways that they could actually utilize the Dronebox platform for compliance and insurance. There is also other aspects that we bring to the table from workflow to recording of the flight. So there's lots of things that we can do for delivery drone service providers, but we're -- we think that's still a small market in the short term. Mike Marinac: Okay. Thanks for the explanation. Jeffrey Thompson: Yes. Operator: There are no other questions at this time. This concludes our question-and-answer session. I would like to turn the conference back over to management for closing remarks. Jeffrey Thompson: Yes, thanks, folks, everybody for joining. It's our first call. It looks like we had a pretty large attendance is what I'm looking at right now. I also want to let everybody know that the drone -- the Red Cat team will be at the AUVSI Exponential Conference in Atlanta, next week, and hopefully we'll see you there. Thanks, everybody. Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Red Cat Holdings, Inc. (NASDAQ:RCAT) Appoints New President and Reports Earnings
- Red Cat Holdings, Inc. (NASDAQ:RCAT) appoints Shawn Webb as President of FlightWave Aerospace Systems Corporation, aiming to bolster its drone technology sector leadership.
- RCAT reported an EPS of -$0.09, surpassing the estimated EPS of -$0.10, and a revenue of $7.49 million, significantly exceeding expectations.
- Despite positive sales, RCAT's financial ratios indicate ongoing losses and challenges in cash flow generation, with a negative P/E ratio of -12.80 and a price-to-sales ratio of 33.47.
Red Cat Holdings, Inc. (NASDAQ:RCAT) is a company that focuses on drone technology for military, government, and commercial uses. Recently, the company appointed Shawn Webb as President of its subsidiary, FlightWave Aerospace Systems Corporation. This move is part of Red Cat's strategy to strengthen its leadership team and enhance its operations in the drone technology sector.
On April 7, 2025, RCAT reported an earnings per share (EPS) of -$0.09, which was better than the estimated EPS of -$0.10. This indicates that the company is performing slightly better than analysts expected, despite still operating at a loss. The company's revenue of approximately $7.49 million significantly surpassed the estimated revenue of $2.4 million, showcasing strong sales performance.
Despite the positive revenue figures, RCAT has a negative price-to-earnings (P/E) ratio of -12.80, indicating ongoing financial losses. The price-to-sales ratio is 33.47, meaning investors are paying $33.47 for every dollar of sales. This high ratio suggests that investors have high expectations for the company's future growth.
RCAT's enterprise value to sales ratio is 34.03, reflecting its valuation in relation to sales. The enterprise value to operating cash flow ratio is -29.07, highlighting challenges in generating positive cash flow from operations. These metrics suggest that while the company is valued highly, it faces difficulties in converting sales into cash flow.
The company's debt-to-equity ratio is 0.51, indicating a moderate level of debt compared to equity. This suggests that RCAT is not overly reliant on debt for financing. Additionally, the current ratio of 1.43 indicates that the company has a reasonable level of liquidity to cover its short-term liabilities, providing some financial stability.
Red Cat Holdings, Inc. (NASDAQ:RCAT) Appoints New President and Reports Earnings
- Red Cat Holdings, Inc. (NASDAQ:RCAT) appoints Shawn Webb as President of FlightWave Aerospace Systems Corporation, aiming to bolster its drone technology sector leadership.
- RCAT reported an EPS of -$0.09, surpassing the estimated EPS of -$0.10, and a revenue of $7.49 million, significantly exceeding expectations.
- Despite positive sales, RCAT's financial ratios indicate ongoing losses and challenges in cash flow generation, with a negative P/E ratio of -12.80 and a price-to-sales ratio of 33.47.
Red Cat Holdings, Inc. (NASDAQ:RCAT) is a company that focuses on drone technology for military, government, and commercial uses. Recently, the company appointed Shawn Webb as President of its subsidiary, FlightWave Aerospace Systems Corporation. This move is part of Red Cat's strategy to strengthen its leadership team and enhance its operations in the drone technology sector.
On April 7, 2025, RCAT reported an earnings per share (EPS) of -$0.09, which was better than the estimated EPS of -$0.10. This indicates that the company is performing slightly better than analysts expected, despite still operating at a loss. The company's revenue of approximately $7.49 million significantly surpassed the estimated revenue of $2.4 million, showcasing strong sales performance.
Despite the positive revenue figures, RCAT has a negative price-to-earnings (P/E) ratio of -12.80, indicating ongoing financial losses. The price-to-sales ratio is 33.47, meaning investors are paying $33.47 for every dollar of sales. This high ratio suggests that investors have high expectations for the company's future growth.
RCAT's enterprise value to sales ratio is 34.03, reflecting its valuation in relation to sales. The enterprise value to operating cash flow ratio is -29.07, highlighting challenges in generating positive cash flow from operations. These metrics suggest that while the company is valued highly, it faces difficulties in converting sales into cash flow.
The company's debt-to-equity ratio is 0.51, indicating a moderate level of debt compared to equity. This suggests that RCAT is not overly reliant on debt for financing. Additionally, the current ratio of 1.43 indicates that the company has a reasonable level of liquidity to cover its short-term liabilities, providing some financial stability.
Red Cat Holdings, Inc. (NASDAQ:RCAT) Earnings Preview and Growth Prospects
- Red Cat Holdings, Inc. (NASDAQ:RCAT) is expected to report quarterly earnings with an EPS of -$0.10 and projected revenue of $2.4 million.
- The company's revenue growth in 2025 is anticipated to be driven by new military contracts, with projections ranging from $80 million to $120 million.
- Despite a 50% decline in stock price, Red Cat's collaboration with Palantir could enhance drone capabilities, potentially increasing software gross margins to 80-90%.
Red Cat Holdings, Inc. (NASDAQ:RCAT) specializes in drone technology, focusing on military applications. The company is set to release its quarterly earnings on April 7, 2025. Wall Street analysts expect the earnings per share to be -$0.10, with projected revenue of approximately $2.4 million. Despite these figures, Red Cat is anticipated to experience substantial revenue growth in 2025.
The company's growth is primarily driven by new military contracts, which are expected to boost revenues significantly. Projections for 2025 range from $80 million to $120 million, a substantial increase from the current quarter's expectations. This growth is supported by high gross margins, which are crucial for profitability. The collaboration with Palantir is set to enhance Red Cat's drone capabilities, potentially increasing software gross margins to an impressive 80-90%.
Despite a significant 50% decline in its stock price, Red Cat's future appears promising. The company has a negative price-to-earnings (P/E) ratio of approximately -14.76, indicating it is not currently profitable. However, the price-to-sales ratio of 38.58 suggests that investors are willing to pay a premium for each dollar of sales, reflecting confidence in future growth. The enterprise value to sales ratio is 39.13, slightly higher than the price-to-sales ratio, indicating the company's total valuation in relation to its sales.
Red Cat faces challenges in generating positive cash flow from operations, as indicated by an enterprise value to operating cash flow ratio of -33.43. The earnings yield is -6.78%, further highlighting the company's current lack of profitability. However, the debt-to-equity ratio of 0.51 suggests a moderate level of debt relative to equity, which is manageable. Additionally, the current ratio of 1.43 indicates that the company has a reasonable level of short-term liquidity to cover its current liabilities.
Red Cat Holdings, Inc. (NASDAQ:RCAT) Earnings Preview and Growth Prospects
- Red Cat Holdings, Inc. (NASDAQ:RCAT) is expected to report quarterly earnings with an EPS of -$0.10 and projected revenue of $2.4 million.
- The company's revenue growth in 2025 is anticipated to be driven by new military contracts, with projections ranging from $80 million to $120 million.
- Despite a 50% decline in stock price, Red Cat's collaboration with Palantir could enhance drone capabilities, potentially increasing software gross margins to 80-90%.
Red Cat Holdings, Inc. (NASDAQ:RCAT) specializes in drone technology, focusing on military applications. The company is set to release its quarterly earnings on April 7, 2025. Wall Street analysts expect the earnings per share to be -$0.10, with projected revenue of approximately $2.4 million. Despite these figures, Red Cat is anticipated to experience substantial revenue growth in 2025.
The company's growth is primarily driven by new military contracts, which are expected to boost revenues significantly. Projections for 2025 range from $80 million to $120 million, a substantial increase from the current quarter's expectations. This growth is supported by high gross margins, which are crucial for profitability. The collaboration with Palantir is set to enhance Red Cat's drone capabilities, potentially increasing software gross margins to an impressive 80-90%.
Despite a significant 50% decline in its stock price, Red Cat's future appears promising. The company has a negative price-to-earnings (P/E) ratio of approximately -14.76, indicating it is not currently profitable. However, the price-to-sales ratio of 38.58 suggests that investors are willing to pay a premium for each dollar of sales, reflecting confidence in future growth. The enterprise value to sales ratio is 39.13, slightly higher than the price-to-sales ratio, indicating the company's total valuation in relation to its sales.
Red Cat faces challenges in generating positive cash flow from operations, as indicated by an enterprise value to operating cash flow ratio of -33.43. The earnings yield is -6.78%, further highlighting the company's current lack of profitability. However, the debt-to-equity ratio of 0.51 suggests a moderate level of debt relative to equity, which is manageable. Additionally, the current ratio of 1.43 indicates that the company has a reasonable level of short-term liquidity to cover its current liabilities.
Red Cat Holdings, Inc. (NASDAQ: RCAT) Faces Financial Challenges Despite Innovative Drone Technology
- Red Cat Holdings, Inc. (NASDAQ: RCAT) reported an earnings per share (EPS) of -$0.18, missing the estimated EPS of -$0.08, indicating the company's current lack of profitability.
- The company's revenue for the fiscal second quarter was approximately $1.53 million, significantly lower than the estimated $4.13 million, reflecting in a high price-to-sales ratio of about 52.81.
- Despite financial strains, RCAT maintains a debt-to-equity ratio of 0.51 and a current ratio of 1.43, suggesting moderate debt levels and reasonable liquidity.
Red Cat Holdings, Inc. (NASDAQ: RCAT) is a company that focuses on drone technology for military, government, and commercial uses. Based in San Juan, Puerto Rico, RCAT integrates robotic hardware and software to enhance its offerings. Despite its innovative approach, the company faces financial challenges, as seen in its recent earnings report.
On December 16, 2024, RCAT reported an earnings per share (EPS) of -$0.18, which was below the estimated EPS of -$0.08. This indicates that the company is not currently profitable, as highlighted by its negative price-to-earnings (P/E) ratio of approximately -28.52. A negative P/E ratio suggests that the company is not generating enough earnings to cover its share price.
RCAT's actual revenue for the fiscal second quarter was approximately $1.53 million, significantly lower than the estimated $4.13 million. This shortfall is reflected in the company's price-to-sales ratio of about 52.81, meaning investors are paying $52.81 for every dollar of sales. The enterprise value to sales ratio is slightly higher at 53.42, indicating a similar valuation challenge.
The company's financial performance is further strained by a negative enterprise value to operating cash flow ratio of around -41.39. This suggests difficulties in generating positive cash flow from operations. Additionally, the earnings yield is negative at approximately -3.51%, reinforcing the lack of profitability.
Despite these challenges, RCAT maintains a debt-to-equity ratio of 0.51, indicating a moderate level of debt compared to its equity. The current ratio of 1.43 suggests that the company has a reasonable level of liquidity to cover its short-term liabilities, providing some financial stability amidst its earnings struggles.
Red Cat Holdings, Inc. (NASDAQ: RCAT) Faces Financial Challenges Despite Innovative Drone Technology
- Red Cat Holdings, Inc. (NASDAQ: RCAT) reported an earnings per share (EPS) of -$0.18, missing the estimated EPS of -$0.08, indicating the company's current lack of profitability.
- The company's revenue for the fiscal second quarter was approximately $1.53 million, significantly lower than the estimated $4.13 million, reflecting in a high price-to-sales ratio of about 52.81.
- Despite financial strains, RCAT maintains a debt-to-equity ratio of 0.51 and a current ratio of 1.43, suggesting moderate debt levels and reasonable liquidity.
Red Cat Holdings, Inc. (NASDAQ: RCAT) is a company that focuses on drone technology for military, government, and commercial uses. Based in San Juan, Puerto Rico, RCAT integrates robotic hardware and software to enhance its offerings. Despite its innovative approach, the company faces financial challenges, as seen in its recent earnings report.
On December 16, 2024, RCAT reported an earnings per share (EPS) of -$0.18, which was below the estimated EPS of -$0.08. This indicates that the company is not currently profitable, as highlighted by its negative price-to-earnings (P/E) ratio of approximately -28.52. A negative P/E ratio suggests that the company is not generating enough earnings to cover its share price.
RCAT's actual revenue for the fiscal second quarter was approximately $1.53 million, significantly lower than the estimated $4.13 million. This shortfall is reflected in the company's price-to-sales ratio of about 52.81, meaning investors are paying $52.81 for every dollar of sales. The enterprise value to sales ratio is slightly higher at 53.42, indicating a similar valuation challenge.
The company's financial performance is further strained by a negative enterprise value to operating cash flow ratio of around -41.39. This suggests difficulties in generating positive cash flow from operations. Additionally, the earnings yield is negative at approximately -3.51%, reinforcing the lack of profitability.
Despite these challenges, RCAT maintains a debt-to-equity ratio of 0.51, indicating a moderate level of debt compared to its equity. The current ratio of 1.43 suggests that the company has a reasonable level of liquidity to cover its short-term liabilities, providing some financial stability amidst its earnings struggles.
