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Aug 12, 2026, 9:08 AM ETBasic Materials

Capstone Holding Corp. — Q2 2026 Earnings Summary

CAPSCAPSTONE HOLDING CORP
Source

Financial Performance

  • Revenue increased 67% year-over-year to $21.5 million in Q2 2026, compared to $12.9 million in Q2 2025.
  • Gross profit grew 92% year-over-year to $6.0 million in Q2 2026, compared to $3.1 million in Q2 2025.
  • Gross margin expanded 357 basis points year-over-year to 27.9% in Q2 2026, up from 24.4% in Q2 2025.
  • Stone Business Adjusted EBITDA was $2.0 million in Q2 2026, a 126% increase year-over-year from $0.9 million in Q2 2025, representing a 9.4% margin.
  • Stone Business Adjusted EBITDA improved $2.9 million sequentially from the first quarter of 2026.
  • Net loss (GAAP) was $(1.4) million in Q2 2026, compared to a net loss of $(0.7) million in Q2 2025.
  • SG&A expenses declined versus both the prior year and the previous quarter due to maturing integration initiatives.

Guidance and Future Outlook

  • The Company reaffirmed FY2026 guidance of $72.1 million in revenue, $18.7 million in gross profit, and approximately $3.8 million in Stone Business Adjusted EBITDA.
  • Management targets a $100 million annual revenue run rate while expanding Stone Business Adjusted EBITDA margins from approximately 5% to 10%.
  • Future acquisitions are expected to resume opportunistically once the current platform is fully optimized and market conditions support attractive returns on invested capital.
  • The Company anticipates entering Q3, its strongest selling season, with considerable momentum following a historically cold and wet winter.

Business Segments and Product Lines

  • Eldorado Stone reached 81 dealers across 17 states within ten weeks of its launch.
  • BrikClad continues to gain momentum in Canada.
  • Nature's Edge launched during the second quarter.
  • The Company opened its ninth location on August 17, a greenfield site serving Wilmington and Myrtle Beach, with five customers signed prior to opening.
  • The AI Operating System has been live since April 7 across supply chain and finance functions, supporting forecasting, procurement, routing, and inventory management.
  • The AI system facilitated the conversion of $700,000 in surplus inventory announced in July.
  • Gross margin expansion was driven by scale, a higher mix of owned brands and installation, and purchasing and freight efficiencies, including $480,000 in annualized savings from the Midwest distribution consolidation announced in May.

Market and Competitive Landscape

  • Capstone operates as a national, technology-enabled building products distribution platform across 38 U.S. states and Canada.
  • The platform aggregates and delivers proprietary stone veneer, hardscape materials, and modular masonry systems through the Instone operating platform and inventory portal.
  • The Company combines digital infrastructure, owned-inventory logistics, and disciplined acquisitions to drive scalable margin expansion and operating leverage.

Management Commentary and Tone

  • CEO Matthew Lipman stated the Company achieved the profitability and EBITDA inflection guided to in the first quarter, noting the platform is larger, more productive, and more profitable than a year ago.
  • Lipman highlighted that gross profit continues to outpace revenue growth, indicating scale is reaching the bottom line.
  • Management emphasized a priority on capital-efficient organic growth and believes the Company is well-positioned to execute on second-half objectives.

Other Key Points

  • Stone Business Adjusted EBITDA turned positive in Q2 2026 as previously guided, delivering the inflection point targeted in Q1.
  • Integration synergies are driving productivity through shared systems, centralized purchasing, and logistics optimization.
  • The Company will post an investor presentation and Form 10-Q detailing the reconciliation of Stone Business Adjusted EBITDA to GAAP net income (loss) in the Investor Relations section of its website.
  • The press release includes a detailed definition of Stone Business Adjusted EBITDA as a non-GAAP measure, excluding corporate costs, share-based compensation, and other specific items.
  • Forward-looking statements include risks related to liquidity, financial covenants, debt refinancing, going concern status, acquisition timing, and macroeconomic conditions.