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Aug 7, 2026, 4:05 PM ETTechnology

Castellum — Second Quarter and First Half 2026 Earnings Summary

CTMCASTELLUM INC
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Financial Performance

  • First half 2026 revenue increased 10% year-over-year to $28.2 million, compared to $25.7 million in the first half of 2025; Q2 2026 revenue was $13.9 million, stable compared to $14.0 million in Q2 2025.
  • First half 2026 gross profit was $9.8 million (up 2% year-over-year from $9.6 million), with a gross margin of 34% in Q2 2026 compared to 36% in Q2 2025.
  • First half 2026 Adjusted EBITDA was $0.4 million, down from $0.6 million in the first half of 2025; Q2 2026 Adjusted EBITDA was $0.03 million, down from $0.50 million in Q2 2025.
  • First half 2026 net loss was $(1.4) million ($(0.02) per share), an improvement from $(1.5) million ($(0.02) per share) in the first half of 2025; Q2 2026 net loss was $(1.1) million ($(0.01) per share), compared to $(0.3) million in Q2 2025.
  • Cash and cash equivalents were $16.9 million as of June 30, 2026, up from $15.8 million at March 31, 2026 and $14.9 million at December 31, 2025.
  • The company maintained a debt-free balance sheet with no long-term debt as of June 30, 2026.
  • Total assets were $41.8 million as of June 30, 2026, compared to $41.9 million at December 31, 2025.

Guidance and Future Outlook

  • Management expects full-year 2026 to be a record year in terms of revenue.
  • Approximately 16% of the $271.7 million backlog is expected to be recognized over the next 12 months, and approximately 48% over the next 24 months.
  • The company aims to translate backlog and pipeline growth into durable, higher-margin performance in the second half of 2026.
  • Management plans to continue investing in business development, investor relations, and acquisition activities, accepting lower near-term EBITDA for a stronger multi-year growth profile.

Business Segments and Product Lines

  • Total backlog was $271.7 million as of June 30, 2026, compared to $273.3 million at March 31, 2026 and $265.0 million at December 31, 2025.
  • Qualified pipeline totaled $953.5 million as of June 30, 2026, up from $938.0 million at March 31, 2026.
  • Achieved Cybersecurity Maturity Model Certification (CMMC) Level 2, validating eligibility to support Department of Defense (DoD) programs.
  • Secured a directed $4.0 million U.S. Navy ADMACS modernization subcontract.
  • Won a position on the U.S. Navy's $250.0 million LIIS CMDS Logistics IT MAC, creating a multi-year pipeline for naval maintenance and logistics IT modernization.
  • Revenue growth in the first half was driven by the ramp-up of major long-term prime contracts won in 2025, specifically the NAVAIR PMA-290 Special Missions program and the NAWCAD Lakehurst MO&I award.

Market and Competitive Landscape

  • The company operates in the cybersecurity, electronic warfare, and software services sector focused on the federal government.
  • Management notes that revenue recognition timing factors, such as the wind-down of certain contracts contributing to Q2 2025 revenue, are common in the industry.
  • The company is selectively pursuing M&A opportunities that offer differentiated capabilities, contract vehicles, or customer access, prioritizing accretive valuations.

Risks and Challenges

  • Gross margin in Q2 2026 was impacted by a higher mix of subcontractor work, which carries lower margins than direct labor, and costs associated with completing remaining work on firm-fixed-price contracts.
  • EBITDA declined due to planned investments in business development, investor relations, and acquisition activities, which are front-loaded relative to revenue generation.
  • Forward-looking statements highlight risks including the ability to execute on backlog, compete against new and existing competitors, integrate acquired companies, and maintain NYSE American listing.

Management Commentary and Tone

  • CEO Glen Ives expressed confidence in delivering record revenue for 2026, citing the $272 million backlog and expanding pipeline.
  • CFO David Bell stated that the business is funded entirely from operating cash flow, providing flexibility to invest in growth while maintaining a solid financial profile.
  • Management emphasized a focus on disciplined execution in the second half of 2026 to convert backlog into organic revenue growth and enhance shareholder value.

Other Key Points

  • The company is executing Phase 3 of its evolution, focusing on converting backlog and pipeline into revenue and selectively pursuing M&A.
  • The company is investing in mission-critical technologies including AI/ML, 5G, and model-based systems engineering.
  • A conference call to discuss results was scheduled for August 7, 2026, at 10:00 am ET.
  • The company holds $10.7 million in goodwill and $4.8 million in intangible assets as of June 30, 2026.
Castellum — Second Quarter and First Half 2026 Earnings Summary