Palladyne AI Q2 2025 Earnings Disappoint with Wider Net Loss and Revenue Decline.

Palladyne AI reported a net loss of $7.49m in Q2 2025, a 41% increase from Q2 2024. The company's shares are down 8.7% from a week ago. Despite the disappointing revenue, the company's revenue is forecast to grow 81% p.a. on average during the next 2 years, compared to a 4.8% growth forecast for the Machinery industry in the US.

Palladyne AI (PDYN) reported its fiscal 2025 Q2 earnings on August 6, 2025, revealing a significant decline in revenue and a widening net loss compared to the previous year. The company's total revenue dropped by 62.6% year-over-year to $1.01 million, with the majority of the revenue stemming from a single product development contract. The net revenue, adjusted for returns and allowances, also stood at $1.01 million, underscoring the company’s heavy reliance on contract-based income [1].

Despite maintaining a stable EPS of $-0.20, Palladyne AI’s net loss widened to $7.49 million in 2025 Q2, a 40.7% increase from the $5.32 million loss recorded in the same period the previous year. The widening loss is attributed to ongoing operational costs and investment in product development. While the company set a record for the highest net income in five years, the overall performance remains a cause for concern given the significant deterioration in profitability [1].

The company's shares are down 8.7% from a week ago, reflecting investor concerns about the financial performance. However, Palladyne AI expects its revenue to grow at an average annual rate of 81% over the next two years, compared to a 4.8% growth forecast for the Machinery industry in the US. This growth forecast is driven by strategic priorities, including the completion of product development and capitalizing on growing demand in defense and industrial AI spending [1].

Palladyne AI raised $34.8 million in H1 2025, ending with $62.7 million in cash and plans for a $50M equity offering to fund strategic opportunities. The CEO emphasized the company’s strong financial position and its ability to fund operations for at least two and a half years, even in the absence of new revenue. The company also outlined its intent to continue issuing press releases and leveraging social media to keep investors informed [1].

References:
[1] https://www.ainvest.com/news/palladyne-ai-2025-q2-earnings-net-loss-widens-record-performance-2508/