York Space Systems — Q3 2026 Earnings Summary

Financial Performance:

• Revenue for the three months ended September 30, 2026, was $84.2 million, a 7% decrease year-over-year from $90.8 million in Q3 2025.
• Revenue for the nine months ended September 30, 2026, was $293.1 million, a 4% increase year-over-year from $280.9 million in the same period in 2025.
• Gross profit for the quarter was $15.5 million, a 23% decrease year-over-year from $20.3 million, driven by lower revenues.
• Gross margin for the quarter was 18%, down 400 basis points from 22% in Q3 2025.
• Gross profit for the nine months ended September 30, 2026, was $59.8 million, a 10% increase year-over-year from $54.4 million.
• Net loss for the quarter was $807.4 million, a 3,921% increase year-over-year from $20.1 million, primarily due to a $749.7 million non-cash goodwill impairment charge.
• Net loss for the nine months ended September 30, 2026, was $961.6 million, a 1,616% increase year-over-year from $56.0 million.
• Adjusted EBITDA (non-GAAP) for the quarter was $(27.6) million, a 711% increase in loss year-over-year from $(3.4) million.
• Adjusted EBITDA (non-GAAP) for the nine months ended September 30, 2026, was $(40.7) million, a 493% increase in loss year-over-year from $(6.9) million.
• Contribution margin (non-GAAP) for the quarter was $34.0 million, up from $31.7 million in Q3 2025, with a contribution margin percentage of 40% compared to 35% in the prior year period.
• Contribution margin (non-GAAP) for the nine months ended September 30, 2026, was $113.4 million, up from $87.3 million in the prior year period, with a contribution margin percentage of 39% compared to 31%.
• Cash and cash equivalents as of September 30, 2026, were $308.9 million, with $150 million available under the Revolving Facility, totaling $459 million in liquidity.
• Long-term debt, net, was $139.7 million as of September 30, 2026, down from $145.0 million as of December 31, 2025.
• Backlog stood at $581.0 million as of September 30, 2026, up from $542.6 million as of December 31, 2025.

Guidance and Future Outlook:

• Full-year 2026 revenue guidance was narrowed to a range of $380 million to $400 million.
• The identified pipeline of government opportunities is $14.9 billion as of November 12, 2026, an increase of $3 billion from June 30, 2026, covering the next two years.
• Management expects greater demand for competition and vendor diversity following the election, leading to a realignment of government resources toward proven providers.
• York anticipates IDIQ awards converting into funded task orders in 2027 and beyond.
• The proposed acquisition of Outlook Industries is expected to open a new market for unmanned platforms, targeting the $3.08 billion unmanned ground systems market and the $10.31 billion unmanned surface and underwater vessel markets.

Business Segments and Product Lines:

• York secured two task orders supporting the U.S. Space Force's Space Data Network (SDN) to advance multi-vendor interoperability and Space Exchange Point development.
• York was selected for the U.S. Space Force's NITE-STAR IDIQ contract to support space test and training missions.
• The company introduced the LX/V-CLASS spacecraft platform designed for Very Low Earth Orbit (VLEO) to address demand for higher-fidelity observation and resilient orbit diversity.
• York expanded into Geosynchronous Earth Orbit (GEO) as prime contractor for the U.S. Space Force's Tetra 3 and 4 missions (Nemesis), with spacecraft delivery targeted for Q4 2026.
• ALL.SPACE and NAVSYS demonstrated resilient communications and PNT in a GPS-denied environment during the Arcane Thunder exercise.
• York activated a second antenna in Mwulire, Rwanda, doubling simultaneous satellite contact capacity for equatorial coverage.
• York identified Tomorrow.io as the customer for its $187 million commercial contract to serve as prime contractor for the initial phase of the DeepSky early warning constellation using the M-CLASS platform.
• ALL.SPACE secured orders from Viasat for multiple Hydra MAX terminals and follow-on U.S. Navy orders for 59 Hydra MAX 2 terminals, bringing the Navy's total procurement to 108 systems with combined orders valued at over $25 million.
• York announced a collaboration with Terma to combine spacecraft platforms with Terma's space electronics and software expertise to access European markets.
• Orbion announced a partnership with ENPULSION to bring Hall-effect propulsion systems to European satellite manufacturers.

Market and Competitive Landscape:

• York positions itself to benefit from a shift in U.S. government procurement toward competition and vendor diversity independent of total budget size.
• The company leverages its delivery record, production capacity, and competitive pricing to compete for significant awards.
• York is expanding its addressable market through adjacent markets including unmanned platforms, VLEO, and GEO.
• The company highlights its integrated ecosystem of spacecraft platforms, global ground infrastructure, software, and mission operations capabilities as a competitive advantage.

Risks and Challenges:

• A $749.7 million non-cash goodwill impairment charge was recorded due to difficulty in estimating the timing and amount of future contract awards beyond 2026.
• Forward-looking statements carry risks including disruptions in U.S. government operations, funding changes, and procurement priority shifts.
• There is a risk that pipeline opportunities may be delayed, reduced, cancelled, or awarded to competitors.
• The proposed acquisition of Outlook Industries faces risks regarding regulatory approvals, closing conditions, and integration success.
• Risks include cost overruns on contracts, concentration of customers and backlog, and potential failure of spacecraft systems to operate as intended.
• The company faces risks related to supply chain disruptions, scarcity of critical components, and macro-economic conditions.

Management Commentary and Tone:

• CEO Dirk Wallinger stated that the identified pipeline grew more than 30% compared to the last quarter and that York has secured critical contract positions to compete for significant awards in 2027 and beyond.
• Wallinger expressed confidence that York's delivery record and production capacity position the company to benefit from the realignment of government resources.
• CFO Brian Frantz noted that contribution margins are benefiting from a shift to newer programs and that a long-term trend toward increased profitability is expected as the company moves up the value chain.
• Frantz highlighted that more satellites in operation create opportunities for ongoing mission operations revenue and that expansion into adjacent markets broadens the addressable market.
• Brian Frantz was appointed as permanent Chief Financial Officer, having served as interim CFO since August 2026 and Chief Accounting Officer since September 2025.

Other Key Points:

• York opened a larger office in Austin in October to support its growing software team and development of capabilities for satellite constellations and future unmanned operations.
• The company completed the acquisition of Outlook Industries, establishing the foundation for York Terrestrial Systems.
• York previously acquired Orbion Space Technologies, Inc., Solestial Space Technology, Inc., and All.Space Holdings, Inc., with integration and benefits expected.
• The company reported a $592.8 million net proceeds from the issuance of common stock in connection with its IPO during the nine months ended September 30, 2026.
• York identified Tomorrow.io as the customer behind its previously announced $187 million commercial contract for the DeepSky constellation.
• The company's backlog increased by four new contract wins and modifications of $17 million, plus $44 million from York subsidiaries during the third quarter.