Red Cat misses Gauntlet II drone contract, threatening annual financial outlook

Red Cat Holdings (RCAT) failed to secure a spot in the Pentagon's Gauntlet II drone program. Subsidiary Teal Drones reached the final round but was excluded from the nine selected awardees.

The Defense Department announced winners to compete for orders totaling 60,000 drones. These contracts cover two distinct mission categories for the U.S. military.

The exclusion removes a significant government contract opportunity for the company. Analysts expect the loss to negatively impact Red Cat's full-year financial outlook.