{ "docId": "019dd923-622c-750b-8b98-405eb4149c5a", "docSlug": "d9c5fbbb51d2", "documentTitle": "Red Cat Holdings, Inc. (RCAT)", "authorId": "53_Kerrisdale_Capital", "authorName": "Kerrisdale Capital", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2025-01-09 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 10, "pageCount": 29, "prevPage": 9, "nextPage": 11, "slideType": "research-note", "function": "analyze_data", "density": "overcrowded", "nDataPoints": 8, "notes": "The slide is a dense text-based research note analyzing the financial implications of the SRR contract for Red Cat.", "elementsJson": [ "paragraph", "quote_block" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-405eb4149c5a/10", "deckHref": "/decks/019dd923-622c-750b-8b98-405eb4149c5a", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-405eb4149c5a.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-405eb4149c5a#slide-10", "components": [ { "bbox": null, "kind": "callout", "text": "To summarize Red Cat's version of their SRR win: Teal will be the sole supplier to the Army of about 12 thousand drones and 6 thousand controllers at a cost of $45 thousand per system, for a total revenue over a 5-year period (that's based on the press release) of about $265 million.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-3f41-721f-9e45-5f90983cfe07", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.72, "x": 0.14, "y": 0.41 }, "kind": "paragraph", "text": "We're now in that process for the LRIP contract... we think it's easily going to be in the close to 50 million anyway for 2025 calendar.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "20e691d0-d809-4831-a58e-e20e27836f9a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.72, "x": 0.14, "y": 0.25 }, "kind": "paragraph", "text": "Right now, in the National Defense Authorization Act, we're sitting at an approximate program line value... of $79.5 million.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "666ee91b-8052-41b1-af84-5e8dad9ec955", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.72, "x": 0.14, "y": 0.09 }, "kind": "paragraph", "text": "The average price of a system, which includes two drones and one controller is around $45,000... The Army's stated authorized acquisition objective (AAO) is 5,880 systems.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "695c9817-8cff-4dba-89c3-e381ecb34a76", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.72, "x": 0.14, "y": 0.66 }, "kind": "paragraph", "text": "Before we get to the real numbers underlying the SRR contract... it's worth looking at a timeline of Red Cat's claims regarding the size of the SRR program:", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6f091baf-cd0a-496f-8684-2c6a1d8e376e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.72, "x": 0.14, "y": 0.34 }, "kind": "paragraph", "text": "The key takeaway from this is what we're talking about today specifically is the SRR program of record and typically year over year, you could expect somewhere in the range of 30% added for spares, repairs and training.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8de5795f-58b3-4419-81b8-f9f19574838b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.72, "x": 0.14, "y": 0.53 }, "kind": "paragraph", "text": "In response to a question about whether Red Cat/Teal will be the only provider... Teal will be the sole supplier to the Army of about 12 thousand drones and 6 thousand controllers at a cost of $45 thousand per system.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a71f2762-ea1b-4e94-894c-3a5804439398", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.72, "x": 0.14, "y": 0.72 }, "kind": "quote", "text": "July 27th, 2022 Earnings Call: “If we get a huge order from the government or if we win tranche 2, which is for tens of thousands of drones and hundreds of millions of dollars worth of revenue, we want to have the capital in the bank instead of doing things like buybacks.”", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "bbe37233-0105-4054-8741-c728edf29ae3", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "If we get a huge order from the government or if we win tranche 2, which is for tens of thousands of drones and hundreds of millions of dollars worth of revenue, we want to have the capital in the bank instead of doing things like buybacks. — July 27th, 2022 Earnings Call", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-3f41-721f-9e45-60ef99673080", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }