Palladyne Raises 2026 Revenue Guidance Floor to $25 Million
Key Facts
Palladyne AI raised the low end of its fiscal 2026 revenue guidance to $25 million and kept the high end at $27 million, according to its earnings release issued on November 10. The company said the new range represents annual growth of 377% to 415% compared with revenue of $5.2 million in 2025. The revision follows record third-quarter revenue, alongside growth in component revenue and government contracts. But the company’s outlook also includes annual operating cash burn near the high end of its range, or slightly above it. The results therefore combine accelerating sales with expectations that elevated operating spending will continue during the year.
Third-quarter revenue was $8.6 million, up 895% year over year and 48% from the second quarter, according to the filing with the U.S. Securities and Exchange Commission. The chief executive said revenue from the components business rose 26% from the previous quarter, attributing part of the increase to the first delivery of the next-generation Brain FC-1 flight computer. Revenue from government contracts also rose 135% sequentially, the company said. The comparison shows that quarterly growth was not limited to one line item: the company reported increases in components and government contracts alongside higher total revenue. The release did not specify a separate value for either business in the figures cited here.
Backlog stood at $18.7 million on September 30, including $15.3 million funded, and the company expects to convert most of it into revenue over 12 to 18 months. However, the balance declined 24% during the quarter, reflecting the recognition of about $8.6 million in revenue, compared with approximately $2.7 million in net new contracts. This means revenue recorded during the period drew down part of the available backlog, while new contracts provided a partial offset. The funded portion offers a separate indicator from total backlog, while the company has set a time frame for recognizing most of the remaining balance. These figures tie the outlook for future revenue to the execution of existing orders and the signing of new business, according to the company.
On commercial expansion, Palladyne said its collaboration with FANUC America includes joint sales efforts to offer its software to manufacturers, from Fortune 500 companies to small and midsize businesses. FANUC has more than 40 million products installed worldwide, the release said, a base that could make the software available to a broad range of industrial companies. The filing described the relationship as a collaboration and joint sales effort, without specifying the financial value of any resulting contracts. In defense-related systems, the company said its Swarm OS was integrated with Anduril’s Lattice system during Project Convergence Capstone 6. The U.S. Army evaluated the system on 9 performance criteria and gave it the highest possible rating on all of them; the release did not announce a new contract resulting from the evaluation.
Cash, cash equivalents and marketable securities totaled $47 million on September 30, up from $43.7 million on June 30. The company said this liquidity was sufficient to meet operating, working capital and capital expenditure needs for at least 12 months. At the same time, it expects annual operating cash burn to be near the high end of its $32 million to $36 million range, or slightly above it. The expected fourth-quarter trajectory differs: the company expects cash burn to be below the average of the elapsed quarters, with revenue and gross margin higher than in the first half. These expectations remain tied to the company’s estimates for spending and revenue during the rest of the year.
Palladyne said it expects 2026 growth to extend into 2027, without providing a revenue forecast for next year in the filing. All 20.5 million warrants, which allowed holders to buy about 3.4 million shares, expired on September 24, as did the 2.3 million remaining shares of contingent consideration tied to the reverse merger. The company said these instruments expired without exercise or issuance, and that fully diluted shares outstanding declined 9%. In trading on November 9, Palladyne shares closed at $3.54, while FANUC shares, traded under the ticker FANUY, closed at $17.41, according to L7 data. These figures show the stocks’ moves in the session before the earnings announcement and do not represent prices after the filing.