Q: What is Redwire Corp.(RDW) 2025Q4 Earnings Summary?
**Bullish Points:**
1. Redwire Corporation reported revenues of $335.4 million for the fiscal year ended December 31, 2025, a 10% increase from the previous year.
2. The acquisition of Edge Autonomy contributed significantly to revenue growth, adding $107.1 million.
3. The company's contracted backlog as of December 31, 2025, was $411.2 million, indicating future revenue growth potential, with a book-to-bill ratio of 1.32, suggesting strong demand for its offerings.
4. The Defense Tech segment contributed $125.6 million in revenue, while the Space segment contributed $209.8 million.
5. The company raised $245.0 million in net proceeds from issuing 15.5 million shares of common stock.
6. The company recognized a $25.0 million tax benefit in 2025, primarily due to the recognition of deferred tax assets related to the Edge Autonomy acquisition.
7. Capital expenditures increased to $23.3 million in 2025, indicating significant investments in the Space and Defense Tech segments.
**Bearish Points:**
1. The company experienced a significant increase in cost of sales, up 23% to $318.1 million, partly due to costs related to the Edge Autonomy acquisition and non-cash expenses from purchase accounting adjustments.
2. Gross profit decreased by 61% to $17.3 million, with gross margin dropping from 15% to 5%.
3. Selling, general, and administrative expenses rose by 140% to $171.3 million, driven by increased share-based compensation and costs associated with the Edge Autonomy acquisition.
4. The company recorded an impairment expense of $34.7 million related to goodwill and intangible assets in the Space Europe reporting unit.
5. Interest expense increased significantly to $39.7 million, primarily due to costs associated with the repayment of the Seller Note and new credit agreements.
6. Redwire Corporation's net loss for the year was $226.6 million, compared to a loss of $114.3 million in the previous year.
7. The Space segment reported a loss from operations of $(49.2) million, while the Defense Tech segment reported a loss from operations of $(93.6) million.
8. The company identified material weaknesses in internal controls over financial reporting, particularly in IT general controls and process-level control activities, which are being remediated.
9. Equity-based compensation expenses increased to $59.0 million in 2025 from $11.3 million in 2024.
10. The company settled a class-action lawsuit for $8.0 million, with $1.1 million expected to be recovered from insurance.
**Summary:**
Redwire Corporation demonstrated revenue growth and future revenue potential through strategic acquisitions and a strong contracted backlog. However, the company faced significant challenges, including increased costs, decreased gross profit, higher operating expenses, and substantial net losses. The identification of material weaknesses in internal controls and increased equity-based compensation expenses also pose concerns. Overall, while there are positive indicators for future growth, the financial performance for 2025 reflects considerable operational and financial hurdles that need to be addressed.
For more information, you can read the original text of Redwire Corp.'s financial report.
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