Red Cat Holdings: can 161% revenue growth and an Army contract become a durable defense business?

Red Cat Holdings (Nasdaq: RCAT) reported 2025 full year revenue of 40.7 million dollars, a 161 percent increase year on year, with the fourth quarter alone jumping 1,985 percent to 26.2 million dollars, driven by the ramp of its U.S. Army Short Range Reconnaissance programme win and rising international demand for its Black Widow drone systems. The company more than quintupled its production footprint to 254,000 square feet across three facilities, received its first NATO NSPA order for 100 Black Widow drones, secured contracts with two Asia-Pacific allies, beat out Teledyne FLIR for the SRR programme, and launched the FANG FPV combat drone to address attack drone demand generated by the Pentagon's Drone Dominance initiative.

The financial picture is mixed. Cash rose sharply to 167.9 million dollars after 234 million in equity issuances, giving Red Cat runway to keep scaling, but the net loss widened to 72.1 million dollars and the accumulated deficit stands at 196.8 million with no…