Palladyne AI Corp. reported first-quarter 2026 revenue of $3.5 million, up 107% from $1.7 million in the same period a year earlier, as the company expanded its defense artificial intelligence, autonomous systems and robotics activities during its first full quarter operating as a vertically integrated defense and industrial AI business.
The Salt Lake City-based company, which trades on Nasdaq under the symbols PDYN and PDYNW, said its backlog was approximately $17 million as of March 31, net of revenue recognized. The figure reflected about $7 million in new contract awards during the quarter. Palladyne AI said it expects a majority of the backlog to convert to revenue over the next 12 to 18 months.
Operating loss widened to $11.9 million from $6.9 million in the prior-year quarter. The company attributed the increase to a full quarter of operating expenses from businesses acquired in November 2025 and continued investment in defense and commercial programs.
GAAP net loss was $12.6 million, or $0.28 per basic and diluted share, compared with GAAP net income of $22.8 million, or diluted earnings per share of $0.64, in the first quarter of 2025. The latest quarter included a $1.0 million non-cash loss related to warrant liabilities, while the prior-year period included a $29.2 million non-cash gain on warrant liabilities.
On a non-GAAP basis, Palladyne AI reported a net loss of $10.2 million, or $0.23 per basic and diluted share, compared with a non-GAAP net loss of $5.3 million, or $0.15 per basic and diluted share, in the year-earlier period.
Cash, cash equivalents and marketable securities totaled $43.7 million as of March 31, down from $47.1 million at the end of 2025.
The company reiterated its full-year 2026 revenue guidance of $24 million to $27 million, compared with 2025 revenue of $5.2 million. Palladyne AI said it expects revenue to increase sequentially each quarter, with growth accelerating in the second half of the year as backlog converts, new contracts are awarded and performed, and commercial deployments expand.
Palladyne AI said consolidated quarterly operating cash usage is expected to average approximately $8 million to $9 million for 2026. First-quarter cash usage was modestly above that range, which the company attributed to lower-than-planned government revenue from the government shutdown and working capital investment linked to production activity.
During the quarter, Palladyne AI demonstrated collaborative autonomous swarming involving its Gremlin-X platform, formerly known as Project Banshee, using IntelliSwarm and multiple Red Cat platforms operating with SwarmOS. The company also progressed development of new BRAIN flight computer variants and received follow-on orders worth approximately $500,000 from an existing defense prime customer for the commercialized X2 variant.
The company expanded its work with Draganfly by testing SwarmOS across Draganfly’s defined mission-ready drone components and completing a flight simulation. It also said it entered the space domain through an Air Force Research Lab HANGTIME award, under which SwarmOS is planned for use in coordinating autonomous systems across satellite, aerial and ground domains.
Palladyne AI also secured contracts tied to spacecraft and missile system programs. Through GuideTech, the company will support Portal Space Systems in developing maneuverable spacecraft platforms, including work involving navigation, guidance, spacecraft modeling, embedded software and avionics. Through Palladyne Defense, it secured a contract with a major U.S. defense prime contractor to deliver a propulsion subsystem for an existing U.S. missile system program, which is expected to contribute nearly $1 million in 2026 revenue.
In its commercial and industrial business, Palladyne AI hired Matt Muta as president of commercial and industrial and began active deployment of Palladyne IQ 2.0 with its first commercial customer. The company said initial robot systems integration is underway and that it continues to advance the IQ 2.0 product roadmap and deployment pipeline.
Palladyne AI said it also added to its intellectual property portfolio through a new patent issuance related to swarming and decentralized autonomy architectures and filed two new patent applications related to its AI software products and technologies.
