Star Equity Holdings (STRR) Q2 2026 earnings summary

Executive summary

• Revenue for Q2 2026 rose 54.6% year-over-year to $54.9 million, driven by the Star Operating Companies acquisition, with gross profit up 22.3% to $22.8 million.

• Net loss attributable to common shareholders widened to $2.5 million ($0.66 per diluted share), compared to a $0.7 million loss ($0.23 per share) in Q2 2025.

• Adjusted EBITDA increased to $2.2 million from $1.3 million year-over-year, but EBITDA loss was $0.6 million due to prior-year gains in Investments.

• Merger synergies of $3.0 million annualized were realized, exceeding original targets, and the company continues to focus on cost management and capital allocation.

• Announced a merger agreement to acquire Harte Hanks for $38 million, funded half in cash and half in preferred stock, with expected $10 million in cost synergies.

Financial highlights

• Total cash (including restricted) was $8.9 million at June 30, 2026; cash and equivalents decreased from $10.3 million at year-end 2025.

• Share repurchases totaled $0.2 million in Q2 2026, with $1.6 million remaining under the $3 million authorization.

• Dividend on Series A preferred stock was $0.25 per share in Q2 2026; $1.2 million paid in preferred dividends in H1 2026.

• Net cash used in operations was $3.1 million YTD, with capital expenditures of $2.8 million.

• Working capital at June 30, 2026, was $57.8 million, down from $62.5 million at year-end 2025.

Outlook and guidance

• Management expects improved profitability and value creation through disciplined execution, cost control, and strategic M&A.

• The $215 million U.S. NOL position is expected to enhance after-tax returns on future growth and transactions.

• Anticipate closing the Harte Hanks merger by year-end, with combined revenue projected at $400 million and pro forma adjusted EBITDA of $30 million post-synergies.

• Building Solutions anticipates temporary revenue slowdowns due to project delays but sees strong pipeline demand.

• Energy Services outlook remains positive, supported by stable oil prices and increased drilling activity.