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PDYN, Palladyne AI Corp.

Software asset-light Unprofitable

We are a U.S.-based technology company developing and offering embodied AI software and collaborative autonomy solutions, advanced avionics, UAVs, advanced UAV engineering services and precision-manufactured components for defense and commercial/industrial markets.

Our core AI software offerings, Palladyne IQ, SwarmOS and Palladyne Pilot, consist of full-stack, closed-loop autonomy software that is intended to enhance the functionality and operational effectiveness of third-party robotic systems across a range of applications.

We are positioning our defense business as a mid-tier U.S. technology prime defense contractor aiming to combine innovative autonomy, practical engineering and American production to bring intelligent systems into active service faster, safer and more cost-effectively than legacy approaches.

Latest annual: FY2025 10-K

PDYN · Palladyne AI Corp.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$5M

−32.6% YoY · −10% 5-yr CAGR

Vital signs · TTM

Cash & investments $44M

Cash burn · annual $30M

Runway 1.4 yrs

Gross margin 32%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Unprofitable. No meaningful revenue yet; the record is the cash on hand against the burn.
What moves the needle: Operating margin has run around −1215% through the cycle on a 24% gross margin, the operating line deeply negative — so the lever is the path to a margin at all: revenue growth against the cost curve and the cash runway, not the level of a margin that isn't there yet. Stock-based pay runs about 85% of sales, a real and recurring claim on owners that the GAAP margin understates. Read this kind of business on retention and the cost of growth. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median −333%, above 15% in 0 of 4 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2020–2025

realized figures from each filing · older years to the left

2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
							Income statement
$9M	$5M	$15M	$6M	$8M	$5M	$7M	RevenueRevenue
36%	24%	20%	18%	55%	49%	32%	Gross marginGross mgn
83%	n/m	436%	512%	216%	328%	281%	SG&A / revenueSG&A/rev
160%	345%	234%	635%	134%	246%	197%	R&D / revenueR&D/rev
($21M)	($81M)	($177M)	($121M)	($27M)	($32M)	($37M)	Operating incomeOp. inc.
−238.3%	n/m	n/m	n/m	−345.8%	−617.7%	−528.6%	Operating marginOp. mgn
($21M)	($82M)	($157M)	($116M)	($73M)	$10M	($25M)	Net incomeNet inc.
							Cash flow & returns
($17M)	($42M)	($65M)	($77M)	($23M)	($28M)	($30M)	Operating cash flowOp. cash
$458K	$531K	$1M	$2M	$825K	$974K	$1M	DepreciationDeprec.
$1M	($4M)	$55M	$25M	$46M	($43M)	($11M)	Working capital & otherWC & other
$950K	$5M	$1M	$782K	$265K	$713K	$647K	CapexCapex
10.8%	92.4%	10.3%	12.7%	3.4%	13.6%	9.1%	Capex / revenueCapex/rev
($18M)	($47M)	($67M)	($77M)	($23M)	($28M)	($31M)	Owner earningsOwner earn.
−202.3%	−922.0%	−459.1%	n/m	−294.0%	−540.4%	−438.3%	Owner earnings marginOE mgn
($18M)	($47M)	($67M)	($77M)	($23M)	($28M)	($31M)	Free cash flowFCF
−202.3%	−922.0%	−459.1%	n/m	−294.0%	−540.4%	−438.3%	Free cash flow marginFCF mgn
—	—	$30M	—	$0	$5M	$5M	AcquisitionsAcquis.
-1013%	—	-128%	-538%	—	-57%	-55%	ROICROIC
-64%	-38%	-109%	-283%	—	13%	-36%	Return on equityROE
−64%	−38%	−109%	−283%	—	13%	−36%	Retained to equityRetained/eq
							Balance sheet
$34M	$217M	$114M	$39M	$40M	$47M	$44M	Cash & investmentsCash+inv
$1M	$788K	$2M	$555K	$134K	$1M	$2M	ReceivablesReceiv.
$707K	$1M	$4M	$1M	$71K	$339K	$989K	InventoryInvent.
$972K	$2M	$4M	$1M	$435K	$1M	$1M	Accounts payablePayables
$786K	$113K	$2M	$329K	($230K)	$336K	$2M	Operating working capitalOper. WC
$36M	$228M	$129M	$45M	$43M	$53M	$50M	Current assetsCur. assets
$4M	$6M	$11M	$8M	$4M	$6M	$6M	Current liabilitiesCur. liab.
10.2×	37.1×	12.3×	5.3×	9.6×	9.3×	7.8×	Current ratioCurr. ratio
—	—	—	—	$0	$15M	$15M	GoodwillGoodwill
$38M	$236M	$168M	$60M	$56M	$96M	$93M	Total assetsAssets
$2M	—	$0	—	—	—	$2M	Total debtDebt
($31M)	—	($114M)	—	—	—	($42M)	Net debt / (cash)Net debt
$33M	$214M	$144M	$41M	($10M)	$75M	$70M	Shareholders’ equityEquity
26.0%	849.6%	244.7%	195.9%	36.0%	84.8%	64.1%	Stock comp / revenueSBC/rev
							Per share
100M	113M	24.5M	25.6M	26.8M	42.1M	45.1M	Shares out (diluted)Shares
$0.09	$0.04	$0.60	$0.24	$0.29	$0.12	$0.16	Revenue / shareRev/sh
$-0.21	$-0.72	$-6.42	$-4.51	$-2.71	$0.24	$-0.56	EPS (diluted)EPS
$-0.18	$-0.41	$-2.73	$-3.02	$-0.85	$-0.67	$-0.69	Owner earnings / shareOE/sh
$-0.18	$-0.41	$-2.73	$-3.02	$-0.85	$-0.67	$-0.69	Free cash flow / shareFCF/sh
$0.01	$0.04	$0.06	$0.03	$0.01	$0.02	$0.01	Cap. spending / shareCapex/sh
$0.33	$1.89	$5.90	$1.60	$-0.36	$1.77	$1.55	Book value / shareBVPS

The diluted share count moved ×1/4.62 into 2022 — shares retired, not a split the totals corroborate — and the per-share figures carry the counts as filed.

The diluted share count moved ×1.57 into 2025 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

Per-share growththe realized rate an owner's share compounded

	5-yr	5-yr
Revenue / share	+7.2%/yr	+7.2%/yr
Capital spending / share	+12.3%/yr	+12.3%/yr
Book value / share	+40.1%/yr	+40.1%/yr

The year, in the company's words

the filing →

Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction, and stated figures check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.

Product Revenue-99.9%
“Product Revenue Revenue derived from product sales decreased by $2.7 million, or 100%, from $2.7 million for the year ended December 31, 2024 to $0.0 million for the year ended December 31, 2025. The decrease was primarily due to one-time legacy hardware product sales during the year ended December 31, 2024 that did not recur in 2025.”
✓ figure matches the filed record

The record, charted

FY2020–2025

Each measure over its full record; the current point and the worst year marked.

Share count

42Mpeak FY2021

ROIC

−57%low FY2020

Gross margin

49%low FY2023

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

($28M)owner earningsvs.$10Mnet incomelow FY2023

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $10M of profit but ($28M) of owner earnings: $38M less than the profit line, taken out by capital spending and the timing of cash.

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$10M	($73M)	($116M)	($157M)	($82M)
Depreciation & amortizationnon-cash charge added back	+$974K	+$825K	+$2M	+$1M	+$531K
Stock-based compensationreal costnon-cash, but a real cost	+$4M	+$3M	+$12M	+$36M	+$43M
Working capital & othertiming of cash in and out, other non-cash items	−$43M	+$46M	+$25M	+$55M	−$4M
Cash from operations	($28M)	($23M)	($77M)	($65M)	($42M)
Capital expenditurecash put back in to keep running and to grow	−$713K	−$265K	−$782K	−$1M	−$5M
Owner earnings	($28M)	($23M)	($77M)	($67M)	($47M)
Owner-earnings marginowner earnings ÷ revenue	-540%	-294%	-1259%	-459%	-922%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $4M), owner earnings is nearer ($33M).

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? —

No meaningful interest burden

Little or no interest expense reported

What this means
Little or no interest expense reported, the business isn't leaning on lenders to operate.
How heavy is the debt, net of cash? +$46M

Net cash

Cash $18M + ST investments $29M − debt $1M

What this means
Cash and short-term investments exceed every dollar of debt by $46M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? -24d

Negative, funded by others

DSO 73 + DIO 46 − DPO 144 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money.

Is it a good business?

Return on invested capital -538%

Below average through the cycle

4-yr median, range -1013%–-57%; -56% latest = NOPAT ($32M) ÷ invested capital $58M

Industry peers: median -18%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 4 years (it ran -56% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin -540%

Consumes cash through the cycle

6-yr median margin, range -1259%–-202%; latest ($28M) = operating cash ($28M) − maintenance capex $713K

Industry peers: median -161%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -540% of revenue this year, a -540% median across 6 years. Treating stock comp as the real expense it is (less $4M of SBC) leaves ($33M).
Are earnings backed by cash? -2.75×

Thinly cash-backed

Cash from ops ($28M) ÷ net income $10M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? —

Not enough data

What this means
The filing data didn't include the inputs for this check.
Investing or harvesting? 0.73×

Harvesting

Capex $713K ÷ depreciation $974K

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $5M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 9.28×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $1M vs $47M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (6-yr record) · 5 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-1.26/share (latest year $0.21), the averaged base the calculator's gate runs on, and book value is $1.58/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2020–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 1 of 6

What this means
Lost money in 5 year(s), look at what happened there before trusting the average.
Operating margin −1016% → −977% (3-yr avg ends)

What this means
Through the cycle the operating margin widened — about −1016% early to −977% lately, median −1215% — pricing power intact or improving.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Worst year 2023 · −1968.0% op. margin

What this means
Operations went underwater in 2023, understand why before trusting the good years.

Does AI threaten the moat?

Elevated contestability

The product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“We have intentionally designed our AI/ML Foundational Technology to: Allow robotic systems to be poly-functional, learn multiple tasks and handle disruptions or obstacles efficiently and without human intervention.”

AI has collapsed the cost of building a capable substitute for the very thing this business sells. When a credible alternative can be assembled for a fraction of the incumbent's price, it is pricing power that erodes first, not revenue tomorrow. The live question is whether the moat survives that, not whether it held in the past. Whether that question is answerable at all is yours to decide, against your own circle of competence.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$50M

Cash & short-term investments$44M
Receivables$2M
Inventory$989K
Other current assets$4M

Current liabilities$6M

Accounts payable$1M
Other current liabilities$5M

Current ratio7.85×all current assets ÷ what's due · Graham looked for 2×

Quick ratio7.69×stricter: inventory excluded

Cash ratio6.81×strictest: cash alone against what's due

Working capital$44Mthe cushion left after near-term bills

Cash runway1.4 yrsthe business is consuming cash; this is how long the cash on hand lasts at that rate

Revenue, latest quarter vs. a year ago+106.9%the freshest read on whether the business is still growing

Current ratio, recent quarters6.5× → 7.8×

Deeper floors

Tangible book value$45Mequity stripped of goodwill & intangibles

Net current asset value$28MGraham's net-net: current assets less all liabilities

Debt incl. operating leases$11M$11M of it operating leases

Deferred revenue$591Kcustomer cash collected before delivery; operating float

From the company's latest filing.

Acquisitions & goodwill

from the balance sheet & the 6-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$25M26% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity20%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$35Mover 6 years buying other businesses, against $9M of capital spent building

$70M written down across 1 year (2022): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 6-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid.

Insider ownership13.4%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$4M
The slice of the business handed to employees in shares this year, 85% of revenue. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Palladyne AI Corp. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2020–2025.

1 of the 3 tests turned up something to look into; the other 2 came back clean.

Look hereDid receivables and inventory outpace sales?20% → 36% of sales
Receivables and inventory grew from $2M to $3M while revenue grew −20%: working capital is climbing faster than sales (20% of revenue then, 36% now). That can mean customers paying slower, stock building up, or revenue pulled forward. The filing's cash-flow and receivables notes say which.

And these came back clean

Did debt outgrow the business?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Acquisitions, Contingencies as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Software

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
RCATRed Cat Holdings Inc.	$41M	18%	-562.0%	-53%	-250%
QXLQuantum X Labs Inc.	$27M	95%	-9.4%	-2%	3%
GEGGLGreat Elm Group, Inc.	$16M	93%	-46.5%	-12%	-3%
NXTTNext Technology Holding Inc.	$12M	59%	-24.0%	-1%	-29%
PDYNPalladyne AI Corp.	$5M	30%	-916.4%	-333%	-500%
DJTTrump Media & Technology Group Corp.	$4M	55%	-3360.9%	-18%	-943%
ODYSOdysight.ai Inc.	$3M	29%	-593.1%	-442%	-584%
PHUNPhunware Inc.	$3M	51%	-175.0%	-124%	-161%
Group median	—	53%	-368.5%	-36%	-205%

The price

What a price has to assume.

What the price implies

reverse-DCF

Palladyne AI Corp. is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.

Today’s price $

The assumptions Required return 9% Years to get there 10 Revenue growth 0%

Revenue, delivered−6%/yr’20→’25

Mature owner-earnings margin 15%

Enter a price to run it.

Owner earnings it must reach—

Margin the price demands—

Owner-earnings margin today−438%

Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.

Weigh PDYN against another business →

Cite: Owner Scorecard, "Palladyne AI Corp. (PDYN), the owner's record," https://ownerscorecard.com/c/PDYN, data as of 2026-07-09.

Manual order: ← PDM its page in the Manual PEB →

Industry order: ← PDFS the Software chapter PERF →