Two small public companies selling autonomy software for drones and robots reported third-quarter results on November 10. Both are trying to grow from software into a broader defense hardware business. Their numbers show how different that path can look.
Palladyne AI: record revenue, wider loss
Palladyne AI, based in Salt Lake City, reported record revenue of $8.6 million, up 895% from about $0.9 million a year earlier and 48% from the second quarter. Government contract revenue rose 135% quarter over quarter and components revenue rose 26%. The company beat estimates and the shares rose about 13%.
Palladyne transformed itself last November with acquisitions that added avionics, precision components, UAVs and aerospace engineering services to its autonomy software. CEO Ben Wolff pointed to top marks from the Army for its autonomy software, rising shipments of components and its BRAIN product, and a commercial channel partner reaching manufacturers it couldn’t reach alone.
The costs grew too. The operating loss was $13.4 million against $8.1 million a year earlier, and the GAAP net loss was $12.0 million, or $0.25 a share. Stock-based compensation was $4.8 million. Backlog fell 24% in the quarter to $18.7 million, of which $15.3 million is funded, because revenue recognised outran $2.7 million of new contracts. Cash and securities rose to $47.0 million.
Palladyne raised the low end of its 2026 revenue guidance to $25 million and kept the top at $27 million. Expiring warrants and contingent shares cut its fully diluted share count by 9%.
Swarmer: a software company becoming a robot maker
Swarmer, based in Austin, makes software that lets one operator control many drones. It says the software has supported more than 100,000 combat missions in Ukraine since April 2024. Its own revenue in the quarter was $25,554, down from about $36,000, mostly from support services. The net loss widened to about $9.3 million on operating expenses of $9.4 million. The stock fell after hours.
The real story is an acquisition. Swarmer agreed in September to buy Ratel Robotics, a Ukrainian maker of unmanned ground vehicles. Shareholders approved the share issuance on November 2, and the deal should close this month. Ratel’s preliminary, unaudited revenue was $42.1 million for the first nine months of 2026, including $32.5 million in the third quarter and $14.9 million in September alone. Management expects $35 million to $40 million of Ratel revenue in the fourth quarter at 13% to 17% operating margins. The deal includes revenue targets of $77 million for 2026, $130 million for 2027 and $187 million for 2028.
Swarmer raised money through an equity line and ended September with about $37.3 million of cash, up from $25.3 million. The risks are plain: revenue concentrated in Ukraine and dependent on its budget, unaudited numbers, integration and dilution.
Two routes to the same market
Palladyne is building a US defense supplier one acquisition and Army contract at a time. Swarmer is buying a business that has already scaled under wartime demand. Both are betting that autonomy software alone won’t support a public company, and that the money is in the machines it runs.