Revenue and EPS Performance
Revenue of $29.8 million and non-GAAP EPS of $0.04, both at the high end of the guidance range. Revenues grew 3% sequentially and 3% year-over-year, excluding Gridspertise.
Gross Margin Expansion
GAAP gross margin improved from 40% last quarter to 44.8%. Non-GAAP gross margin increased from 40.6% in Q4 to 45.3% in Q1, driven by favorable product mix and cost optimization.
Drone Business Momentum
OEM engagements increased from 10 to 17, with significant progress in securing follow-on orders with Red Cat's teal drones. The drone business has potential to contribute 10% to 15% of revenue by fiscal 2027.
Introduction of EdgeFabric.ai and Kompress.ai
Launched EdgeFabric.ai for Edge AI deployment and Kompress.ai, a SaaS platform targeting the industrial air compressor market, both expected to drive future growth and recurring revenue.
Strong Balance Sheet and Cash Flow
Cash and cash equivalents increased by over $2 million to $22.2 million, with positive operating cash flow of approximately $3.6 million generated in the first quarter.