Palladyne AI reported third-quarter revenue of $8.6M, up 895% from a year earlier and 48% from the prior quarter.
Government contract revenue climbed 135% quarter over quarter, and the company raised the low end of full-year 2026 revenue guidance to $25M while keeping the top end at $27M. Revenue for the first nine months of 2026 reached $17.9M, against $3.6M a year earlier.
The quarter also brought the first shipments of the BRAIN FC-1, a cost-optimized flight control computer, which pushed components revenue up 26% sequentially.
Its SwarmOS software integrated with Anduril's Lattice at the Army's Project Convergence Capstone 6, running multi-drone operations across different vendors' aircraft.
The Army scored SwarmOS on nine performance criteria and gave it the highest possible rating on all nine, reinforcing the credibility of its defense pipeline. The drone dominance race is the wider story.
Palladyne Led Defense Autonomy Revenue Growth Last Quarter
Year-over-year revenue growth in latest reported quarter, %
Bar chart. % Growth. Palladyne AI: % Growth 895%. Red Cat: % Growth 527%. Kratos: % Growth 35.70%.
Source: Palladyne AI SEC filing, Kratos SEC filing, 24/7 Wall St
Scale is showing up across the group
Kratos Defense & Security Solutions posted revenue of $471.8M, up 35.7%, with bookings of $1.037B and a book-to-bill ratio of 2.2 to 1. Last-twelve-month bookings reached $2.614B for a 1.6 to 1 book-to-bill.
Its unmanned systems segment went the other way, falling to $74.6M from $87.2M, a drop tied to a Valkyrie shipment to an international customer in the year-ago quarter.
AeroVironment disclosed a multiyear contract vehicle with a ceiling of $940M and an initial award of roughly $315M. The ceiling is a maximum, not guaranteed revenue. The award sits on top of a record $1.5B funded backlog reported for the fiscal first quarter.
Red Cat Holdings grew revenue 527% to $20.19M in its fiscal second quarter and reaffirmed a fiscal 2026 target of $150M to $180M.
AeroVironment's autonomous systems president, Trace Stevenson, framed the award as evidence the factories are already running.
The cash burn is the catch
Palladyne expects full-year 2026 operating cash burn close to or slightly above the high end of its $32M to $36M guided range, reflecting higher operating expenses, research and development and working capital to fund growth.
It ended September with $47M in cash, cash equivalents, and marketable securities, up from $43.7M three months earlier.
Backlog fell 24% during the quarter to $18.7M, of which $15.3M is funded, after the company recognized revenue faster than it signed new contracts.
Kratos is spending too, guiding to full-year capital expenditures of $100M to $110M and a free cash flow use of $110M to $120M. The mismatch between orders and valuations has its own history.
Hanging over the group is privately held Anduril, valued at roughly $90B in an October tender offer, 48% above the $61B mark it set in May.
The company is on track to generate $4.3B in sales this year, per a Reuters report, while losing about $1B, putting the private leader at roughly 21x sales.
Whenever Anduril lists, that multiple becomes the yardstick every public autonomy name gets measured against.
