Castellum (CTM) Q2 2024 earnings summary

Executive summary

• Focused on cybersecurity, IT, electronic warfare, and information operations for defense and federal markets, with primary customers in U.S. government and select commercial sectors.

• Sequential revenue growth to $11.5 million in Q2 2024 from $11.3 million in Q1 2024.

• Gross profit increased to $4.7 million from $4.5 million sequentially.

• Net loss narrowed to $1.85 million in Q2 2024 from $2.7 million in Q1 2024.

• Recent developments include a $2.7M equity raise, a new $4M revolving credit facility, expansion of the stock incentive plan, and the completed GTMR acquisition.

Financial highlights

• Q2 2024 revenue was $11.5M, down 8% year-over-year but up sequentially; six-month revenue was $22.9M, up 2%.

• Q2 2024 net loss was $1.85M, a 12% improvement from Q2 2023 and narrowed from Q1 2024; six-month net loss was $6.02M, a 7% improvement year-over-year.

• Gross profit for Q2 2024 was $4.7M (down 10% YoY, up sequentially); six-month gross profit was $9.19M (down 1% YoY).

• Adjusted EBITDA for Q2 2024 was $0.29M, up from $(0.1)M in Q1 2024.

• Cash at June 30, 2024 was $2.41M, with $2.47M unused borrowing capacity.

Outlook and guidance

• Management expects continued revenue recognition from a $132.8M total backlog, with 45% expected in the next 12 months.

• Management expects continued focus on revenue growth, operational improvements, and Adjusted EBITDA growth, with new customer opportunities and improved cost structure.

• Uncertainty remains due to federal budget processes, contract funding, and political environment.