Redwire Corporation Reports 30% Revenue Decline in Q1 2025, Net Loss Improves

Redwire Corporation reported a significant decline in financial performance for the first quarter of 2025, with revenues totaling $61.4 million, a decrease of 30% from $87.8 million in the same period of 2024. The company's gross profit also fell to $9.0 million, down 39% year-over-year, resulting in a gross margin of 15%. The decline in revenue was attributed to timing issues in production cycles for larger contracts, particularly in power generation offerings. Operating expenses increased to $18.7 million, representing 31% of revenues, up from 20% in the prior year, primarily due to higher labor costs and transaction expenses related to acquisitions.

The company reported a net loss of $2.9 million for the quarter, an improvement from a net loss of $8.1 million in the previous year. This reduction in losses was partly due to a significant gain of $13.6 million from changes in the fair value of private warrant liabilities, contrasting with a loss of $1.1 million in the same quarter of 2024. The effective tax rate for the quarter was 5.8%, compared to a negative rate of 1.4% in the prior year, reflecting a shift in the mix of earnings between U.S. and foreign jurisdictions.

In terms of strategic developments, Redwire is in the process of acquiring Edge Autonomy Holdings, LLC, a deal valued at $925 million, which is subject to stockholder approval. The company also secured contracts for additional investigations with NASA and was awarded a contract to provide docking mechanisms for the European Space Agency's lunar Gateway habitation module. These developments indicate a focus on expanding its capabilities and market presence in the space infrastructure sector.

Operationally, Redwire's backlog as of March 31, 2025, was $291.2 million, slightly down from $296.7 million at the end of 2024. The book-to-bill ratio improved to 0.92 from 0.40 year-over-year, suggesting a positive trend in contract awards relative to revenue. The company reported a cash position of $54.2 million and available borrowings of $35 million from existing credit facilities, indicating a stable liquidity position despite the operational challenges faced.

Looking ahead, Redwire's management expressed cautious optimism, emphasizing the importance of executing its business strategy amid economic uncertainties, including inflation and supply chain pressures. The company aims to leverage its existing contracts and new acquisitions to drive future growth, although it acknowledges the risks associated with market conditions and operational execution.