Redwire (RDW) saw its shares fall 12% following its fourth-quarter earnings report, despite reporting a 9% year-over-year revenue increase. The decline reflects investor concerns over margin pressure and slowing growth in its space infrastructure segment.
- Redwire revenue rose 9% YoY to $237 million in Q4 2025
- Adjusted EBITDA dropped 15% to $52 million vs. $61 million in Q4 2024
- Gross margin declined to 46% from 51% in previous quarter
- Stock price fell 12% after earnings announcement on January 18, 2026
- 2026 revenue growth guidance lowered to 6%-8% range
- EPS forecasts revised down by 14% post-earnings
Redwire Inc. (RDW) experienced a sharp reversal in investor sentiment after releasing its fiscal 2025 fourth-quarter results, with shares dropping 12% on January 18, 2026. The company reported total revenue of $237 million, up 9% compared to $217 million in the same period the prior year, driven by increased demand for satellite components and payload integration services. However, adjusted EBITDA declined to $52 million, a 15% decrease from $61 million in Q4 2024, signaling growing cost pressures amid rising input costs and extended project timelines. Despite the top-line improvement, Redwire’s gross margin fell to 46%, down from 51% in the previous quarter, primarily due to higher material expenses and labor costs associated with advanced manufacturing initiatives. Management cited ongoing challenges in securing long-term contracts for its next-generation space platforms, which has led to a more cautious outlook for 2026. The company now anticipates full-year revenue growth of 6% to 8%, below the earlier consensus forecast of 10%. The market reaction underscores the increasing scrutiny on profitability metrics among space technology firms. Institutional investors have begun adjusting valuations based on cash flow sustainability rather than just revenue expansion. Analyst estimates for RDW’s 2026 earnings per share were revised downward by 14% following the report, reflecting concerns about margin compression and execution risks in high-growth segments. The stock’s underperformance highlights a broader trend in the space sector: investors are demanding stronger returns on capital deployed, especially as government spending remains constrained and private-sector funding shows signs of fatigue.