Palladyne AI Revenue Jumps 895% to $8.6 Million in Third Quarter
Key Facts
Palladyne AI reported record revenue of $8.6 million in the third quarter of 2026, up 895% year over year and 48% from the previous quarter, according to the company's results. GAAP net loss was about $12.0 million, or $0.25 per share, compared with a loss of $3.7 million, or $0.09 per share, in the same period of 2025. By contrast, the company reported a non-GAAP loss of $8.2 million, or $0.17 per share, versus $6.4 million, or $0.16 per share, a year earlier. Palladyne raised the lower end of its full-year revenue outlook while keeping the upper end at $27 million. The results pair rapid revenue growth with widening operating losses as the company seeks to expand its business and develop its products.
Operating loss rose to $13.4 million in the third quarter from $8.1 million a year earlier. The company attributed the increase mainly to higher stock-based compensation, the addition of employees to support growth, and increased research and development expenses related to Gremlin-X development. Stock-based compensation expense, a non-cash item, was $4.8 million, compared with $1.1 million in the third quarter of 2025. The results also included a non-cash gain of $1.1 million from revaluing warrant liabilities, compared with a gain of $3.8 million in the year-earlier period. These items illustrate how net loss has diverged from revenue growth as operating costs and development investment continue to rise.
On revenue, the chief executive said components business revenue increased 26% from the second quarter, driven in part by the first delivery of next-generation BRAIN FC-1 flight computers. He added that government contract revenue rose 135% sequentially. Revenue in the second quarter of 2026 was $5.8 million, up 470% year over year and 63% from the first quarter. The rise to $8.6 million in the third quarter marks a further acceleration from the previous quarter's level. The chief executive said the SwarmOS platform received the highest possible rating across all nine performance criteria evaluated by the U.S. Army during Project Convergence Capstone 6.
Backlog totaled $18.7 million as of September 30, 2026, including $15.3 million in funded orders, and the company expects to recognize most of it as revenue over the next 12 to 18 months. Backlog fell 24% during the quarter after the company recognized about $8.6 million in revenue, against roughly $2.7 million in net new contracts. Backlog had stood at $24.6 million on June 30, showing a decline during the quarter as revenue was recorded. Cash, cash equivalents and marketable securities totaled $47.0 million at the end of September, up from $43.7 million at the end of June. The company said fourth-quarter operating cash burn would be below the average quarterly burn for the first nine months, citing higher revenue and improved margins.
The company raised the lower end of its 2026 revenue range to $25 million, while keeping the upper end at $27 million. The range implies expected growth of between 377% and 415% from 2025 revenue of $5.2 million. The company said its implied fourth-quarter guidance points to revenue growth of between 329% and 449% compared with the fourth quarter of 2025. It expects full-year operating cash burn to be near the upper end of its previous range, or slightly above it; that range was $32 million to $36 million. Operating cash burn for the first nine months included capital expenditures of $1.8 million, according to the company's filing. Palladyne is scheduled to discuss the results on a conference call on November 10, 2026, at 8 a.m. Eastern time.
PDYN closed at $3.54 in the November 9 session, according to EL7 data. An Investing.com report on the morning of November 10 said the stock was up about 19.5% in premarket trading, from its previous closing price to $4.23. The report cited analysts' revenue estimate of about $7.54 million for the third quarter, while the company actually recorded $8.6 million. This came alongside the release of third-quarter results and the increase in the lower end of the annual outlook. The available data do not include the stock's trading range in the November 9 session.