Smith-Midland (NASDAQ: SMID) Q2 2026 profit falls as backlog climbs to $57.4M
Rhea-AI Filing Summary
Smith-Midland Corporation reported second quarter 2026 revenue of $23.4 million, down from $26.2 million a year earlier, as results faced a difficult comparison to a large prior-year barrier project. Gross profit was $5.4 million versus $7.8 million, with gross margin declining to 23.2% from 29.7%.
Operating income was $2.0 million compared to $5.5 million, and net income was $1.4 million, or $0.26 per diluted share, versus $4.2 million and $0.79 per diluted share. Product sales were $11.2 million and service revenue $12.2 million. Utility product sales rose to $2.0 million, a 126 percent increase, while barrier rental revenue decreased as a major 2025 project did not recur.
Backlog reached $57.4 million as of August 1, 2026, up from $54 million a year earlier, supported by new awards including a $10 million I-81 contract and additional data center work. Cash was $10.7 million and debt $4.1 million as of June 30, 2026. The company highlights infrastructure demand and plans capacity investments, while noting ongoing inflationary pressures and previously disclosed material weaknesses in internal controls.
Positive
- Backlog growth and new awards: Backlog rose to $57.4 million as of August 1, 2026 from $54 million a year earlier, supported by a $10 million I-81 contract and additional data center projects.
- Strong utility product growth: Utility product sales reached $2.0 million, representing a 126 percent increase year over year, reflecting higher demand from utility and data center-related infrastructure markets.
- Solid balance sheet: The company reported $10.7 million in cash versus $4.1 million in total debt as of June 30, 2026, providing financial flexibility for planned capital investments.
Negative
- Revenue and earnings decline: Quarterly revenue fell to $23.4 million from $26.2 million, with net income down to $1.4 million from $4.2 million and diluted EPS to $0.26 from $0.79.
- Margin compression: Gross profit declined to $5.4 million from $7.8 million, and gross margin fell to 23.2% from 29.7% due to the absence of a high-margin barrier rental project.
- Internal control weakness disclosed: The company cites “our material weaknesses in internal controls” among key risks that could affect results, indicating ongoing remediation needs in financial reporting processes.
Filing Explained
As of
Key Figures
Revenue: $23.4 million
Gross margin: 23.2%
Net income: $1.4 million
+5 more
8 metrics
Revenue
$23.4 million
Second quarter 2026 revenue compared to $26.2 million in Q2 2025
Gross margin
23.2%
Second quarter 2026 gross margin versus 29.7% in the prior-year quarter
Net income
$1.4 million
Second quarter 2026 net income compared to $4.2 million in Q2 2025
Diluted EPS
$0.26
Second quarter 2026 diluted earnings per share versus $0.79 a year earlier
Backlog
$57.4 million
Backlog recorded as of August 1, 2026, versus $54 million one year prior
Cash balance
$10.7 million
Cash as of June 30, 2026, compared to $11.9 million at end of fiscal 2025
Total debt
$4.1 million
Debt outstanding as of June 30, 2026
Utility product sales
$2.0 million
Second quarter 2026 utility product sales, a 126 percent increase year over year
Key Terms
backlog, gross margin, barrier rental revenue, royalty income, +2 more
6 terms
backlog financial
"Backlog was approximately $57.4 million recorded as of August 1, 2026"
A backlog is the amount of work or orders that a company has received but hasn't completed yet. It’s like a restaurant with many dishes to serve; the backlog shows how many orders are still waiting to be finished. It matters because a large backlog can indicate strong demand or potential delays in delivering products or services.
gross margin financial
"Gross margin for the second quarter of 2026 was 23.2% compared to 29.7%"
Gross margin is the difference between how much money a company makes from selling its products and how much it costs to produce them, expressed as a percentage of sales. It shows how efficiently a company is turning sales into profit before other expenses like marketing or salaries. Higher gross margin means the company keeps more money from each sale, which is a good sign of financial health.
barrier rental revenue financial
"Barrier rental revenue was $3.2 million compared to $5.8 million"
royalty income financial
"Royalty income was $929,000 compared to $1.3 million"
Royalty income is money a company or individual receives for allowing others to use its intellectual property, natural resources, or patented processes — like collecting rent when you let someone use your idea, song, mineral rights, or technology. It matters to investors because royalties can provide steady, often high-margin cash flow with low ongoing costs, making a business more predictable and easier to value; think of it as a durable revenue stream that keeps paying as long as the asset is in demand.
MASH TL-3 standards technical
"reflecting the replacement of barrier to comply with new MASH TL-3 standards"
material weaknesses in internal controls regulatory
"our material weaknesses in internal controls, cyber security risks"
A material weakness in internal controls is a significant flaw in a company’s systems for producing accurate financial reports that creates a reasonable possibility of a major error or omission. Think of it like a broken alarm system that can fail to detect a fire — it makes financial statements less reliable and raises the risk of restatements, audit qualifications, regulatory action, and sudden changes in investor confidence.
Earnings Snapshot
Revenue: $23.4 million
Quarter ended June 30, 2026
Revenue
$23.4 million
Compared to $26.2 million in the second quarter of 2025
Gross profit
$5.4 million
Compared to $7.8 million in the prior-year quarter
Gross margin
23.2%
Compared to 29.7% in the second quarter of 2025
Operating income
$2.0 million
Compared to $5.5 million in the second quarter of 2025
Net income
$1.4 million
Compared to $4.2 million in the second quarter of 2025
Diluted EPS
$0.26
Compared to $0.79 in the second quarter of 2025
FAQ
How did Smith-Midland (SMID) perform in Q2 2026 versus Q2 2025?
Smith-Midland reported Q2 2026 revenue of $23.4 million, down from $26.2 million in Q2 2025, and net income of $1.4 million versus $4.2 million. Lower results mainly reflect the absence of a large, high-margin barrier rental project present in the prior year.
How large is Smith-Midland’s (SMID) backlog as of August 1, 2026?
Backlog was approximately $57.4 million as of August 1, 2026, up from $54 million a year earlier. Management expects most of this backlog to be fulfilled within 12 months, though some projects extend over multi-year timelines.
What key new contracts did Smith-Midland (SMID) secure after Q2 2026?
The company secured a $10 million I-81 project with the Virginia Department of Transportation, a $1.7 million data center project in Louisiana, and is producing nearly $1 million in utility vaults for a Virginia data center, supporting future revenue.
What is Smith-Midland’s (SMID) cash and debt position as of June 30, 2026?
As of June 30, 2026, Smith-Midland held $10.7 million in cash and had total debt of $4.1 million. Accounts receivable totaled $24.6 million, and capital spending in the quarter was $1.9 million for growth investments.
How did Smith-Midland’s (SMID) product and service revenues split in Q2 2026?
In Q2 2026, product sales were $11.2 million, while service revenue, including barrier rentals, royalties, and shipping and installation, totaled $12.2 million. Barrier rental revenue declined, but shipping and installation revenue increased versus the prior-year quarter.
AI-generated analysis. How Rhea-AI works. Not financial advice.
