Redwire Q2 2026 earnings: Revenue reaches a record as gross margin turns positive

Redwire (NYSE: RDW) reported Q2 2026 revenue of $117.1 million, up 89.6% year over year, while its GAAP net loss improved by $56.0 million to $41.0 million. Reported gross margin turned positive at 27.8%, and contracted backlog reached a record $542.1 million, although non-GAAP adjusted EBITDA remained negative.

Core earnings data

Record revenue and the reversal in gross margin were the quarter’s most significant financial changes. Losses also narrowed substantially, but Redwire remained unprofitable on both a GAAP net income basis and an adjusted EBITDA basis.

Adjusted EBITDA included $12.5 million of research and development expense. The company did not quantify how much of the revenue increase came from individual programs or contracts.

Adjusted EBITDA is a non-GAAP measure. The last-12-month book-to-bill ratio was 1.52 at the end of Q2 2026.

Business and operating performance

Contract activity supported Redwire’s record backlog. The company announced follow-on Stalker Block 30 awards from U.S. Marine Corps and U.S. Army organizations, as well as Penguin uncrewed aerial system contracts that included a multi-year, high-eight-figure award from an undisclosed NATO country and a contract serving the Taiwan Coast Guard.

Redwire also delivered nearly 200 Octopus intelligence, surveillance and reconnaissance payloads during the first half of 2026, more than 15% above the prior-year period. This is a year-to-date figure rather than a standalone Q2 result.

In space-based pharmaceutical research, the company said more than 50 PIL-BOX units had flown since the first mission in November 2023. After the quarter ended, Redwire opened a facility in Georgetown, Indiana, and announced an expansion in Huntsville, Alabama to add capacity and capabilities.

Positive gross margin has not yet produced profitability

The move from a negative 30.9% gross margin to a positive 27.8% indicates that Redwire generated substantially more revenue after direct costs than it did one year earlier. That improvement, combined with higher revenue, helped reduce the adjusted EBITDA loss to $3.2 million.

However, the company still recorded a $41.0 million GAAP net loss. The difference shows that operating expenses, financing and accounting items outside reported gross profit remained material. Redwire highlighted $12.5 million of R&D spending within adjusted EBITDA, reflecting continued investment even as it worked toward profitability.

Liquidity and the balance sheet

Redwire ended June with total liquidity of $607.8 million, up 366.9% from the end of 2025. That total consisted of $557.0 million in cash and cash equivalents, $50.0 million of borrowing capacity under existing credit facilities and $0.8 million of restricted cash.

The company also reduced its aggregate term loans from $90.0 million to $50.0 million during the quarter. On the balance sheet, short-term debt was $4.5 million and long-term debt, net, was $43.6 million as of June 30, compared with $5.2 million and $80.0 million, respectively, at the end of 2025.

Several working-capital accounts increased during the first half. Contract assets rose to $72.0 million from $44.0 million, inventory increased to $85.4 million from $55.8 million, and deferred revenue reached $85.0 million from $60.1 million. The supplied results did not include operating or free cash flow figures, so the effect of these changes on cash generation cannot be evaluated from this release alone.

Common shares outstanding increased to 249.2 million from 191.9 million at December 31, 2025. The release did not provide an explanation for the change, but the higher share count is relevant when assessing future per-share results.

2026 guidance

Redwire reaffirmed its existing full-year revenue forecast rather than raising or lowering it. Management cited $214.0 million of first-half revenue and backlog visibility as support for maintaining the range.

Based on first-half revenue, the forecast implies approximately $236 million to $286 million of revenue in the second half of 2026. Conversion of backlog into recognized revenue will therefore be an important factor.

Risks investors need to monitor

• Profitability remains unproven: Gross margin improved sharply, but Redwire still reported a $41.0 million net loss and negative adjusted EBITDA. Continued R&D and other expenses could delay sustained profitability.
• Backlog must convert into revenue: The $542.1 million backlog provides visibility but is not equivalent to recognized revenue. Program delays, cancellations or execution problems could affect the full-year forecast.
• Working-capital requirements are rising: Higher contract assets and inventory may support future deliveries, but investors need operating cash flow data to determine whether growth is translating into cash generation.
• Government exposure and contract mix: Redwire depends on government customers and identifies customer concentration, budget processes and changes in fixed-price versus cost-plus contract mix as risks to revenue and margins.
• Integration and capital structure: The company identifies integration of Edge Autonomy as a continuing risk, while the increase in common shares outstanding could affect future per-share performance.

Summary

Redwire’s Q2 2026 results showed a major improvement in operating economics: revenue reached a record, gross margin turned positive and adjusted EBITDA moved closer to breakeven. The company also entered the second half with record backlog and substantially greater liquidity, but the remaining net loss, negative adjusted EBITDA, higher working-capital balances and need to convert backlog into revenue remain the main issues to monitor.