INNOVATE Corp. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated revenue for the three months ended September 30, 2026, was $495.5 million, a 42.8% increase compared to $347.1 million in the prior year quarter.
• Consolidated revenue for the nine months ended September 30, 2026, was $1,281.9 million, a 48.5% increase compared to $863.3 million in the prior year period.
• Net income attributable to common stockholders and participating preferred stockholders for the three months ended September 30, 2026, was $15.8 million, compared to a net loss of $9.4 million in the prior year quarter.
• Net income attributable to common stockholders and participating preferred stockholders for the nine months ended September 30, 2026, was $9.0 million, compared to a net loss of $56.2 million in the prior year period.
• Basic earnings per share for the three months ended September 30, 2026, were $1.12, compared to a loss of $0.71 per share in the prior year quarter.
• Diluted earnings per share for the three months ended September 30, 2026, were $1.10, compared to a loss of $0.71 per share in the prior year quarter.
• Total Adjusted EBITDA for the three months ended September 30, 2026, was $40.5 million, a 104.5% increase compared to $19.8 million in the prior year quarter.
• Total Adjusted EBITDA for the nine months ended September 30, 2026, was $106.5 million, a 149.4% increase compared to $42.7 million in the prior year period.
• Cash and cash equivalents as of September 30, 2026, were $4.9 million, compared to $5.1 million as of December 31, 2025.
• Current portion of debt obligations as of September 30, 2026, was $574.5 million, compared to $513.0 million as of December 31, 2025.
• Total liabilities as of September 30, 2026, were $1,216.3 million, compared to $1,165.4 million as of December 31, 2025.
• Total stockholders' deficit as of September 30, 2026, was $205.9 million, compared to $226.2 million as of December 31, 2025.

Guidance and Future Outlook:

• Management intends to use all net proceeds from the sale of DBM Global to reduce outstanding debt.
• The Company is focused on addressing liquidity and maximizing value for shareholders within its remaining portfolio.
• MediBeacon plans to ship TGFR Monitors to the China market from the fourth quarter of 2026 through the second quarter of 2027.
• R2 Technologies expects to continue expanding its international footprint, with production of Glacial fx underway.
• The Company faces substantial doubt regarding its ability to continue as a going concern if it fails to consummate sufficient asset sales or realize sufficient proceeds from the sale of IES common stock to meet near-term debt maturities and mandatory redemption obligations.

Business Segments and Product Lines:

• Infrastructure:
  • Revenue for the three months ended September 30, 2026, was $490.6 million, a 45.0% increase compared to $338.4 million in the prior year quarter.
  • Net income attributable to INNOVATE was $25.2 million, compared to $8.8 million in the prior year quarter.
  • Adjusted EBITDA was $43.6 million, compared to $23.5 million in the prior year quarter.
  • Reported backlog was $2.6 billion and adjusted backlog was $2.7 billion as of September 30, 2026, compared to $1.7 billion and $1.8 billion, respectively, as of December 31, 2025.
  • DBM Global was sold to IES Holdings on October 5, 2026, for approximately $413 million in total cash consideration at closing (including $35 million for tax election costs) plus 430,974 shares of IES common stock.
• Life Sciences:
  • MediBeacon expanded engagement to more than 120 U.S. medical institutions for its TGFR System.
  • MediBeacon advanced reimbursement initiatives with the Centers for Medicare & Medicaid Services and key private payors.
  • R2 Technologies reported revenue of $1.2 million for the quarter, with demand of $3.1 million and a backlog of 116 systems globally.
  • R2 launched Glacial Rx and Glacial fx in Thailand and extended the maturity of its secured promissory note with Lancer Capital to December 31, 2026.
  • Preferred equity at R2 was converted to common equity.
• Spectrum:
  • INNOVATE sold its controlling interest (75%) in HC2 Broadcasting to CONX CORP. on September 1, 2026, retaining a 25% ownership interest.
  • Broadcasting segment revenue for the three months ended September 30, 2026, was $3.7 million, compared to $5.6 million in the prior year quarter.
  • Net income attributable to INNOVATE was $25.9 million, including a $32.9 million gain on sale, compared to a net loss of $5.9 million in the prior year quarter.
  • Adjusted EBITDA was $0.3 million, compared to $1.0 million in the prior year quarter.

Market and Competitive Landscape:

• The increase in Infrastructure revenue was driven by the timing and size of projects at DBMG's commercial structural steel fabrication and erection business, as well as increased activity in industrial maintenance and repair.
• The decrease in Life Sciences revenue was attributable to R2, reflecting decreases in unit sales across all product lines and regions due to liquidity constraints.
• The decrease in Spectrum revenue was driven by the disposition of a controlling interest, resulting in two months of consolidated revenue in the current period compared to three months in the comparable period.
• The Company faces risks related to increased competition in the markets in which its operating segments conduct business.

Risks and Challenges:

• Substantial doubt exists about the Company's ability to continue as a going concern and meet near-term debt maturities and mandatory redemption obligations.
• There is a risk that insufficient or delayed proceeds from the sale of IES common stock could result in defaults, cross-defaults, or acceleration of other obligations.
• The Company faces illiquidity regarding its retained 25% interest in HC2 Broadcasting and uncertainty regarding the timing, price, and occurrence of any sale of that interest.
• R2's indebtedness matures on December 31, 2026, and there is uncertainty regarding the Life Sciences segment's ability to raise additional capital.
• The Company faces covenant noncompliance risk and dependence on distributions from subsidiaries to fund operations and debt payments.
• Risks include fluctuations in the market price of IES common stock, potential indemnification claims from divestitures, and the ability to remain in compliance with NYSE listing standards.

Management Commentary and Tone:

• Avie Glazer, Chairman, stated that the Company executed on key strategic priorities, noting that DBM Global capped its final quarter with exceptional performance and that the sales of HC2 Broadcasting and DBM Global mark meaningful progress in unlocking asset value and simplifying the capital structure.
• Paul Voigt, Interim CEO, stated that the focus now turns to opportunities within the remaining portfolio, addressing liquidity, and maximizing shareholder value.
• Management expressed encouragement regarding progress at MediBeacon and HC2 Broadcasting's initiatives to unlock potential for spectrum assets.

Other Key Points:

• The sale of DBM Global to IES Holdings was completed on October 5, 2026.
• The sale of a controlling interest in HC2 Broadcasting to CONX CORP. was completed on September 1, 2026.
• The Company classified its Infrastructure and Spectrum segments as held for sale, resulting in a $5.8 million net decrease in depreciation and amortization.
• A $10.3 million deemed dividend on R2's preferred stock attributable to non-controlling interests was recorded in the current period.
• Interest expense increased by $7.7 million to $31.1 million for the quarter, primarily due to increased principal balances at the Non-Operating Corporate segment and a loan entered into with CONX.
• Selling, general and administrative expenses increased by $5.8 million, driven by compensation-related expenses, severance costs, and professional fees.
• The Company received a $32.9 million gain on the sale of the controlling interest in HC2 Broadcasting.
• The IES common stock received as consideration for the DBM Global sale is subject to a maximum 60-day lock-up period.