Shares of Red Cat Holdings Inc. (NASDAQ: RCAT) are experiencing a significant pre-market plunge of 12.63% on Thursday, as investors react to the drone technology company's disappointing first-quarter 2025 financial results released after market close on Wednesday. The sharp decline comes as the company reported wider-than-anticipated losses and a substantial revenue miss, raising concerns about its near-term growth prospects.
Red Cat reported quarterly revenue of $1.63 million, falling well short of analyst estimates of $3.85 million and representing a 6.75% decrease from the same period last year. The company also posted a loss of $0.27 per share, significantly wider than the expected loss of $0.08 per share. These results have clearly shaken investor confidence, leading to the pre-market selloff.
Despite the disappointing quarterly performance, Red Cat's management maintained an optimistic outlook. CEO Jeff Thompson highlighted recent operational achievements, including partnerships with companies like Palantir and expansion into new areas such as Unmanned Surface Vessels. The company also reiterated its full-year 2025 revenue guidance of $80 to $120 million. However, the market's immediate reaction suggests that investors may need more convincing evidence of the company's ability to meet these ambitious targets given the current underperformance.
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