Do you think it is professional/appropriate to wear red? and in general this dress?
I don't see any reason why not to wear that dress.
Judging by the picture, it doesn't seem too "provocative" or "showing too much skin", so even though I am male and don't know much about fashion, I think this dress is OK.
As a rule of thumb, even though this is outside work hours and outside the office, it is still a company event, thus you can take the chance to wear something more of your liking, but still I suggest you try to keep it professional (that is, don't go for something way too provocative or informal).
Additionally, you could ask around with your female coworkers and see what kind of dress they will wear, so you can judge if yours is "too much". You can also ask if there is a dress code already in place for events like this in your company (something HR or your boss can surely answer).