Jeff Thompson, CEO of Red Cat Holdings (RCAT), says robust defense spending will lead to equally robust earnings in his company. He talks about the ways drone makers are trying to stay ahead of the spending curve and how Red Cat specifically is benefitting from the $1.5 trillion U.S. defense budget. Jeff talks about his milestones he sees in the years ahead for Red Cat.
Segment originally aired Wednesday, March 4, 2026.
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Questions asked in this interview
9
0:00From your perspective looking at it, do we have more room to run to the upside here?
1:09Or are we really seeing people chasing geopolitical headlines and risk right now?
2:59And in this conversation, what differentiates Redcat's platform in a market that suddenly is feeling a little crowded and being discussed far more regularly than we have?
3:53And this does not end itself in a few weeks, as is the expectation right now?
4:11And as far as the software integration in terms of the drones and the things incorporated in them and the life cycle upgrades, how important is all of that to Redcat maintaining its competitive moat?
5:02And also, I guess, to follow on that, how many customers are explicitly prioritizing a secure domestic supply chain right now?
5:43And if we see this de-escalation, which parts of your pipeline remain the most resilient?
6:56... here as we move into this modernization cycle and this ever changing warfare tech and defense tech here, what specific milestone would you want investors to be looking at from Redcat specifically over, say, the next 12 to 24 months?
And thanks for the sports pick there too as well. That's John Najarian, the co-owner at Market Rebellion. Want to shift gears here. Take a look at defense spending and the uptick that we've seen in the defense sector this week. To help us do that, Jeff Thompson, the CEO of Redcat, is joining us right now to discuss the future of defense technology. Jeff, great to have you with us today. We've seen the defense sector do really well already this year, just on increased defense budgets. Obviously, with the outbreak of this ongoing situation in Iran, we've seen a lot of money pour into defense tech this week, and it's a big part of every conversation. From your perspective looking at it, do we have more room to run to the upside here?
Yeah, without a doubt. And Molly, thanks for having me. If you look at where everybody's heading, we have $1 trillion budget this year that just got released. And it looks like it's going to be a $1.5 trillion budget next year. So the growth is going to be maintained. And with all the events that are happening, you know, everyone seems to be in growth mode. I mean, we're upping up production in all of our different subsidiaries right now since Saturday. So yeah, I think there's a lot more growth.
And as you look at it, you know, the demand that we're seeing is this strength sustainable because it's based in structural demand? Or are we really seeing people chasing geopolitical headlines and risk right now?
Well, if you look at what you're going to have to do after these things calm down. You guys had a guest yesterday, General Clark, who was talking about the Strait of Hormuz, and he was talking about having drones doing escorts. And we make vehicles that do that. You know, my own self going after that market is crucial. But we're going to have to maintain that strait for years to come to make sure it stays safe.
With sea drones and drones becoming a big part of this conversation. In every defense tech conversation I've had since this started, drones have been in some way or autonomous vehicles have been in some way a part of the conversation. As we look at this, and the story's really shifting here from hype and discussion to execution here, what proof points can investors take from Redcat over the next 12 months? If you do need to ramp scale?
Well, we spent the last year ramping our production and our factories. We recently won a contract with the Army last year to supply at the platoon level for each rucksack. So we have contracts now, but everyone's ramping because of, you know, this is, you know, Ukraine. If you look at it, it's basically Drone War One. It's changed warfare. It's going to be drone against drone. But the most important part is production and the factory. We look at it as the factory is the weapon, so you have to be able to scale. And we spent the last 12 to 18 months scaling our production, and now we're just going to be building drones and delivering them.
And in this conversation, what differentiates Redcat's platform in a market that suddenly is feeling a little crowded and being discussed far more regularly than we have?
Yeah. Well, again, it goes back to manufacturing, having the scale and the capability to produce at scale put you way ahead of everybody else. I mean, there's a program called Drone Dominance, which is a massive billion dollar plus program where we're basically having fly offs against each other. But, you know, one of the biggest questions during that fly off last week was how much can you produce? So it really goes back to manufacturing and then having products that are actually manufacturable. Anyone can make a prototype, but it's very difficult to manufacture stuff at scale, and that's what we need because the new warfare methods are all based on mass. And when we say mass, it's not people anymore, it's drones.
And you said you spent the last year or so ramping up that production there. How ready are you if demand really ramps up quickly here? And this does not end itself in a few weeks, as is the expectation right now?
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Thompson, J. (2026, March 7). Red Cat (RCAT) CEO on Earnings Potential in $1.5T U.S. Defense Spending [Interview transcript]. Schwab Network. CEOInterviews.AI. https://ceointerviews.ai/interview/1170596/
MLA
Jeff Thompson. "Red Cat (RCAT) CEO on Earnings Potential in $1.5T U.S. Defense Spending." Schwab Network, 7 Mar. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/1170596/.
BibTeX
@misc{thompson2026_1170596,
author = {Jeff Thompson},
title = {Red Cat (RCAT) CEO on Earnings Potential in $1.5T U.S. Defense Spending},
howpublished = {Interview transcript, Schwab Network. CEOInterviews.AI},
year = {2026},
month = {mar},
url = {https://ceointerviews.ai/interview/1170596/},
note = {Speaker-attributed transcript with timestamps}
}
