Redwire’s first quarter results reflected a challenging period, with management attributing the sharp revenue decline to delayed contract awards, particularly in the U.S. government sector. CEO Peter Cannito pointed to transition-related delays at agencies such as NASA and budget uncertainties as key factors. Despite these headwinds, the company highlighted notable contract wins in Europe and ongoing contributions from its established product lines, especially in space infrastructure and mission systems. Management acknowledged the dynamic nature of the market but expressed confidence in Redwire’s positioning across both space and defense segments.
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Redwire (RDW) Q1 CY2025 Highlights:
- Revenue: $61.4 million vs analyst estimates of $73.57 million (30.1% year-on-year decline, 16.5% miss)
- EPS (GAAP): -$0.09 vs analyst estimates of -$0.35 (74.5% beat)
- Adjusted EBITDA: -$2.27 million vs analyst estimates of -$2.04 million (-3.7% margin, relatively in line)
- The company reconfirmed its revenue guidance for the full year of $570 million at the midpoint
- EBITDA guidance for the full year is $87.5 million at the midpoint, above analyst estimates of $36.82 million
- Operating Margin: -17.1%, down from -4.1% in the same quarter last year
- Backlog: $291.2 million at quarter end
- Market Capitalization: $2.28 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 Redwire’s Q1 Earnings Call
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Greg Konrad (Jefferies) asked about risks and opportunities in Europe as space and defense spending shifts. CEO Peter Cannito explained that while funding priorities are evolving, Redwire is positioned to benefit from both increased investment and program realignment.
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Suji DeSilva (Roth Capital Partners) inquired about milestones for the ispace-U.S. lunar partnership. Cannito identified bidding for and winning CLPS (Commercial Lunar Payload Services) task orders as upcoming milestones to watch.
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Mike Crawford (B. Riley Securities) requested details on Edge Autonomy’s recent performance and pipeline. CFO Jonathan Baliff said historical information was included in regulatory filings and emphasized expected operating leverage post-acquisition.
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Colin Canfield (Cantor Fitzgerald) questioned free cash flow expectations for Redwire and Edge Autonomy. Cannito responded that cash flow should improve as delayed revenues convert and milestone payments are received, with capital expenditure expected to remain moderate.
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Brian Kinstlinger (Alliance Global Partners) asked about the margin mix of new bids and pipeline composition. Baliff noted a shift toward higher-margin, larger projects but added that some large contracts might lower percentage margins while growing absolute profit.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will be monitoring (1) the closing and integration of the Edge Autonomy acquisition and its impact on Redwire’s margins and revenue mix, (2) the pace and scale of new contract awards, especially as U.S. government decision-making stabilizes, and (3) the commercialization of in-space manufacturing technologies, including the PIL-BOX platform’s traction with biopharma partners. Progress on European market expansion and the ability to secure larger prime contracts will also be critical.
Redwire currently trades at $15.60, up from $11.30 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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