Star Equity Holdings (STRR) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue rose 57.1% year-over-year to $50.1 million, driven by the August 2025 merger, acquisitions, and new business wins, with $2.6 million in annualized merger synergies realized, exceeding initial expectations.

• Gross profit increased 25.4% to $20.6 million, with the merger and acquisitions contributing significantly.

• Net loss attributable to common shareholders widened to $4.4 million ($1.17 per diluted share), with adjusted net loss per diluted share at $0.99, as margins compressed and operating expenses rose.

• Mixed divisional performance: Energy Services delivered strong growth and profitability, while Business Services and Building Solutions faced challenging market conditions, project delays, and talent environment pressures.

• Strategic priorities include disciplined execution, cost management, investing in growth, and evaluating accretive M&A opportunities.

Financial highlights

• Revenue increased 57% year-over-year to $50.1 million; gross profit rose 25% to $20.6 million.

• Adjusted EBITDA loss was $1.6 million, compared to a $0.7 million loss in the prior year period; pro forma adjusted EBITDA loss was $1.2 million in Q1 2025.

• Ended Q1 with $10.3 million in total cash, including $2.2 million restricted; cash and equivalents declined to $8.1 million from $10.3 million at year-end 2025.

• Generated over $3 million from sale-leaseback transactions and repurchased $700,000 of stock, with $1.8 million remaining under authorization.

• Net cash used in operations was $1.4 million; capital expenditures were $1.3 million.

Outlook and guidance

• Management expects improved results in subsequent quarters, citing operational improvements, new business wins, and investments in growth and innovation.

• Comfortable with Bloomberg consensus for Q2 Adjusted EBITDA above $2 million and full-year range of $8–$10 million.

• Expect Q2 positive EBITDA to exceed Q1 loss, with backlog and book-to-bill ratios anticipated to recover as activity normalizes.

• Focus remains on disciplined execution, cost management, and evaluating M&A opportunities.

• Management expects sufficient liquidity for at least the next 12 months.