Palladyne AI Reports $72.6 Million Net Loss, Revenue Increases by 27% in 2024

Palladyne AI Corp., formerly known as Sarcos Technology and Robotics Corporation, reported a net loss of $72.6 million for the fiscal year ending December 31, 2024, a decrease from the $115.6 million loss recorded in 2023. The company’s revenue increased by 27%, reaching $7.8 million, up from $6.1 million in the previous year. This growth was primarily driven by a significant rise in product revenue, which surged by 200% to $2.7 million, attributed to one-time legacy hardware sales. However, revenue from product development contracts fell by 3% to $5.1 million, reflecting the completion of certain contracts without immediate replacements.

In a strategic pivot announced in November 2023, Palladyne AI shifted its focus from hardware to software, specifically its AI/ML Foundational Technology. This transition included workforce reductions aimed at streamlining operations and reducing costs, resulting in a 73% decrease in research and development expenses, which fell to $10.4 million from $39 million in 2023. General and administrative expenses also decreased by 46% to $16.8 million, while sales and marketing expenses dropped by 62% to $4.1 million, reflecting the company's efforts to conserve cash and focus on its new product strategy.

Palladyne AI is currently in the process of commercializing its two primary software products: Palladyne IQ, aimed at industrial robots and cobots, and Palladyne Pilot, designed for unmanned platforms. The initial commercial version of Palladyne IQ was released in October 2024, with expectations to begin generating revenue from both products in 2025. The company anticipates that its customer base will initially consist of early adopters in sectors such as industrial manufacturing and defense. As of December 31, 2024, Palladyne AI reported a backlog of $3 million, with $2.4 million funded and $0.6 million unfunded.

As of the end of 2024, Palladyne AI had approximately $40.1 million in cash, cash equivalents, and marketable securities, a slight increase from $39.1 million in 2023. The company has incurred losses and negative cash flows since its inception and expects to continue this trend in the near term. The accumulated deficit stood at $490.8 million as of December 31, 2024. The company has raised capital through equity offerings, including approximately $25 million in gross proceeds from the sale of common stock and warrants during the year.

Looking ahead, Palladyne AI's management has indicated that the successful commercialization of its AI/ML Foundational Technology is critical for future revenue generation. The company is focused on enhancing its product offerings and establishing a customer base while navigating the uncertainties of market demand and pricing. The outlook remains cautious, with the potential for significant losses if the anticipated revenues do not materialize before financial resources are exhausted.