Star Equity Holdings (HSON) posts 57% Q1 revenue growth but deeper loss
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Star Equity Holdings, Inc. reported a much larger loss despite strong growth for the quarter ended March 31, 2026. Revenue rose to $50.1 million, up 57.1% from the first quarter of 2025, while gross profit increased to $20.6 million, up 25.4%.
Net loss attributable to common shareholders widened to $4.4 million, or $1.17 per diluted share, compared with a loss of $1.8 million, or $0.59 per share, a year earlier. Adjusted net loss per diluted share was $0.99 versus $0.38, and adjusted EBITDA loss increased to $1.6 million from $0.7 million.
Building Solutions generated $11.6 million of revenue with an adjusted EBITDA loss of $0.9 million and quarter-end backlog of $8.0 million. Business Services delivered $35.0 million of revenue and an adjusted EBITDA loss of $0.3 million, while Energy Services produced $3.5 million of revenue and $1.0 million of adjusted EBITDA.
The company ended the quarter with $10.3 million in total cash, including restricted cash, and used $1.4 million in operating cash flow. It repurchased 70,424 shares for about $0.7 million and highlighted approximately $215 million of U.S. net operating loss carryforwards as of December 31, 2025.
Positive
- None.
Negative
- None.
Insights
Strong top-line growth contrasts with deeper losses and higher cash use.
Star Equity delivered sharply higher Q1 2026 revenue of $50.1M (up 57.1%) and gross profit of $20.6M, helped by contributions from Building, Business, and Energy segments and prior acquisitions. Energy Services was particularly strong, with revenue of $3.5M and adjusted EBITDA of $1.0M.
Despite this, profitability deteriorated. Net loss attributable to common shareholders expanded to $4.4M and adjusted EBITDA loss to $1.6M, reflecting higher operating expenses and corporate costs. Building Solutions margins compressed, and Business Services swung from positive to negative adjusted EBITDA.
Liquidity remains moderate with $10.3M in total cash at March 31, 2026 and negative operating cash flow of $1.4M. Management is also allocating capital to buybacks, repurchasing 70,424 shares for about $0.7M. Subsequent filings may provide more color on how cost actions and merger synergies translate into margin trends over future quarters.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q1 2026 revenue: $50.1 million
Q1 2026 gross profit: $20.6 million
Net loss to common shareholders: $4.4 million
+5 more
8 metrics
Q1 2026 revenue
$50.1 million
Up 57.1% from first quarter of 2025
Q1 2026 gross profit
$20.6 million
Up 25.4% year-over-year
Net loss to common shareholders
$4.4 million
Q1 2026 vs $1.8 million in Q1 2025
Adjusted EBITDA loss
$1.6 million
Q1 2026 vs $0.7 million loss in Q1 2025
Cash including restricted cash
$10.3 million
Balance at March 31, 2026
Building Solutions revenue
$11.6 million
Q1 2026 segment revenue
Business Services revenue
$35.0 million
Q1 2026 segment revenue
Energy Services adjusted EBITDA
$1.0 million
Q1 2026 segment adjusted EBITDA
Key Terms
Adjusted EBITDA, pro forma, backlog, book-to-bill ratio, +2 more
6 terms
Adjusted EBITDA financial
"Adjusted EBITDA loss (non-GAAP measure)* increased to $1.6 million versus adjusted EBITDA loss of $0.7 million"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
pro forma financial
"Pro forma adjusted net loss per diluted share was $0.22 in the first quarter of 2025."
Pro forma refers to financial information that is prepared based on estimates or adjustments to show what a company's results might look like under certain scenarios, such as new projects or acquisitions. It helps investors understand the potential impact of future events by providing a clear, hypothetical view of financial performance, much like a weather forecast shows possible future conditions.
backlog financial
"Building Solutions quarter-end backlog was $8.0 million, and the trailing 12-month book-to-bill ratio was 0.72."
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.
book-to-bill ratio financial
"Building Solutions quarter-end backlog was $8.0 million, and the trailing 12-month book-to-bill ratio was 0.72."
The book-to-bill ratio compares the value of new orders a company receives to the value of products it ships out or bills for over a certain period. If the ratio is above 1, it means the company is getting more orders than it is completing, which can indicate growth. If it's below 1, it suggests demand is slowing down.
net operating losses financial
"As of December 31, 2025, Star had $215 million of usable net operating losses (“NOL”) in the U.S."
Net operating losses are the amount by which a company’s allowable tax deductions exceed its taxable income in a given year, creating a tax loss that can be carried forward or backward to reduce taxes in other years. For investors this matters because NOLs can lower future tax payments and boost cash flow—think of them as unused tax credits a business can apply later to improve profitability and valuation or make the company more attractive in a sale or investment.
Earnings Snapshot
Revenue: $50.1 million
Q1 2026
Revenue
$50.1 million
+57.1% vs Q1 2025
Gross profit
$20.6 million
+25.4% vs Q1 2025
Net loss attributable to common shareholders
$4.4 million
vs $1.8 million loss in Q1 2025
Adjusted EBITDA
($1.6 million)
vs ($0.7 million) in Q1 2025
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 11, 2026
(Exact name of registrant as specified in charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (203 ) 489-9500
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 2.02. | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. | ||||
On May 11, 2026, Star Equity Holdings, Inc. (the "Company") issued a press release announcing its financial results for the three months ended March 31, 2026. A copy of such press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. In addition, on May 11, 2026, the Company issued a presentation supplementary to its press release, which presentation is furnished herewith as Exhibit 99.2.
The information in this Current Report on Form 8-K furnished pursuant to Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS. | ||||
(d) Exhibits
The exhibit listed in the following Exhibit Index is provided as part of the information furnished under Item 2.02 of this Current Report on Form 8-K:
EXHIBIT INDEX
| 99.1 | Press Release of Star Equity Holdings, Inc. issued on May 11, 2026 | ||||
| 99.2 | Earnings Presentation issued on May 11, 2026 | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| STAR EQUITY HOLDINGS, INC (Registrant) | ||||||||
| By: | /s/ JEFFREY E. EBERWEIN | |||||||
| Jeffrey E. Eberwein | ||||||||
| Chief Executive Officer | ||||||||
| Dated: | May 11, 2026 | |||||||
2
Exhibit 99.1
For Immediate Release
Star Equity Holdings Reports 2026 First Quarter Results
Significant New Business Wins and Contract Renewals
Realized Merger Synergies of $2.6 Million (1)
OLD GREENWICH, CT - May 11, 2026 - Star Equity Holdings, Inc. (Nasdaq: STRR and STRRP) ("Star" or the "Company"), a diversified holding company, announced today financial results for the first quarter ended March 31, 2026.
2026 First Quarter Summary
•Revenue of $50.1 million increased 57.1% from the first quarter of 2025.
•Gross profit $20.6 million increased 25.4% from the first quarter of 2025.
•Net loss attributable to common shareholders was $4.4 million, or $1.17 per diluted share, compared to net loss attributable to common shareholders of $1.8 million, or $0.59 per diluted share, for the first quarter of 2025. Adjusted net loss per diluted share (non-GAAP measure)* was $0.99 compared to adjusted net loss per diluted share of $0.38 in the first quarter of 2025. Pro forma adjusted net loss per diluted share was $0.22 in the first quarter of 2025.
•Adjusted EBITDA loss (non-GAAP measure)* increased to $1.6 million versus adjusted EBITDA loss of $0.7 million in the first quarter of 2025; pro forma adjusted EBITDA loss was $1.2 million in the first quarter of 2025.
•Total cash including restricted cash was $10.3 million at March 31, 2026.
Jeff Eberwein, CEO of Star, noted, “The first quarter is almost always our weakest quarter of the year and in this year's first quarter, startup delays for new projects and broader macroeconomic conditions caused our Building Solutions and Business Services divisions to perform worse than expected. Our Energy Services division, however, maintained solid momentum. We believe our focus on operational and cost improvements and continued investments in growth and innovation are strengthening our competitive position and will drive significantly improved results as the year progresses.”
Jake Zabkowicz, Global CEO of Hudson Talent Solutions ("HTS"), added, “Gross profit increased 6.4% at HTS year-over-year, reflecting steady improvement despite continued macroeconomic uncertainty and sustained pressure in the talent market. We have maintained a strong focus on innovation and operational efficiency, including the expanded deployment of agentic AI solutions to enhance recruiter productivity, improve candidate matching, and deliver greater value to clients. These efforts are helping our ability to navigate the current environment while positioning us to capitalize on improving market conditions in the future. As an example, new business activity and contract renewals with legacy clients accelerated meaningfully in the first quarter of 2026, exceeding levels seen in any quarter of 2025.”
Rick Coleman, COO of Star, added, “Residential and commercial construction markets remained soft in the first quarter causing our Building Solutions division to perform below internal expectations, primarily due to delays in several pending contract awards and severe winter weather in both of our key geographies. However, underlying demand remains intact, as evidenced by recently secured new business, including the $4.2 million multifamily housing project in New Hampshire for our KBS business we announced on April 30, 2026. In contrast, our Energy Services division delivered a strong quarter, continuing to gain share across core markets, with particularly strong performance in mining and geothermal end markets."
Mr. Eberwein concluded, “We remain focused on disciplined execution, rigorous cost management, and prudent capital allocation, including the active evaluation of M&A opportunities across all three of our operating divisions, as we continue to advance our strategic priorities. We believe we are well positioned to navigate near-term market volatility while driving increased profitability and long-term shareholder value.”
* The Company provides non-GAAP measures as a supplement to financial results based on accounting principles generally accepted in the United States ("GAAP"). Adjusted EBITDA, EBITDA, adjusted net income or loss, and adjusted net income or loss per diluted share are defined in the division / segment tables at the end of this release and a reconciliation of such non-GAAP measures to the most directly comparable GAAP measures is included within such division / segment tables.
1 $2.6 million of synergies on an annualized basis. Please reference slide 4 of Star's Q1 earnings call presentation.
1
Division Highlights
Building Solutions
First quarter Building Solutions revenue was $11.6 million and gross profit was $1.6 million. Adjusted EBITDA loss was $0.9 million.
Pro forma ("PF")(1) Building Solutions revenue was $12.1 million for the first quarter of 2025, and PF gross profit was $2.9 million. PF adjusted EBITDA was $0.3 million.
Building Solutions quarter-end backlog was $8.0 million, and the trailing 12-month book-to-bill ratio was 0.72.
Business Services
First quarter 2026 Business Services revenue was $35.0 million, up from $31.9 million in the prior year quarter, while gross profit was $17.4 million, up from $16.4 million a year ago. Business Services adjusted EBITDA loss was $0.3 million, down from adjusted EBITDA of $0.2 million in the prior year quarter.
Regionally, Americas and EMEA gross profit grew 21% and 11%, respectively. This growth was partially offset by APAC, where gross profit declined by 8%.
Energy Services
First quarter 2026 Energy Services revenue was $3.5 million. Gross profit was $1.5 million. Energy Services adjusted EBITDA was $1.0 million in the first quarter.
PF Energy Services revenue for the first quarter of 2025 was $2.6 million and PF gross profit was $1.3 million. First quarter 2025 PF adjusted EBITDA was $0.5 million.
(1) Pro forma Building Solutions, Energy Services, and Investments results for the full first quarter of 2025. Alliance Drilling Tools was acquired by Star Operating Companies on March 3, 2025.
3
Corporate Costs
In the first quarter of 2026, the Company's corporate costs were $1.9 million, up from $0.9 million in the prior year quarter, but down $0.7 million on a PF basis. Corporate costs in the first quarter of 2026 and 2025 excluded non-recurring expenses of $0.2 million and $0.3 million, respectively. The decrease in corporate costs was primarily driven by the Merger.
Liquidity and Capital Resources
The Company ended the first quarter of 2026 with $10.3 million in cash, including $2.2 million in restricted cash. The Company used $1.4 million in cash flow from operations during the first quarter of 2026 compared to using $0.8 million in cash flow from operations in the first quarter of 2025.
Share Repurchase Program
In the first quarter of 2026, the Company repurchased 70,424 shares for approximately $0.7 million As of the end of the first quarter of 2026, the Company has approximately $1.8 million remaining under its $3 million repurchase program authorized in September 2025 and continues to view share repurchases as an attractive use of capital.
NOL Carryforward
As of December 31, 2025, Star had $215 million of usable net operating losses (“NOL”) in the U.S., which the Company considers to be a very valuable asset for its stockholders. In order to protect the value of the NOL for all stockholders, the Company has a rights agreement and charter amendment in place that limit beneficial ownership of Star common stock to 4.99%. Stockholders who wish to own more than 4.99% of Star common stock, or who already own more than 4.99% of Star common stock and wish to buy more, may only acquire additional shares with the Board’s prior written approval.
Conference Call/Webcast
The Company will conduct a conference call on Tuesday, May 12, 2026 at 10:00 a.m. ET to discuss this announcement. Individuals wishing to listen can access the webcast on the investor information section of the Company's web site at www.starequity.com.
If you wish to join the conference call, please use the dial-in information below:
•Toll-Free Dial-In Number: (833) 890-6161
•International Dial-In Number: (412) 504-9848
The archived call will be available on the investor relations section of the Company's website at www.starequity.com.
4
About Star Equity Holdings, Inc.
Star Equity Holdings, Inc. is a diversified holding company that seeks to build long-term shareholder value by acquiring, managing, and growing businesses with strong fundamentals and market opportunities. Its current structure comprises four divisions: Building Solutions, Business Services, Energy Services, and Investments. For more information visit www.starequity.com.
On August 22, 2025, the Company completed its previously announced acquisition of Star Operating Companies, Inc. (“Star Operating”, formerly known as Star Equity Holdings, Inc.), pursuant to the Agreement and Plan of Merger, dated as of May 21, 2025 (the “Merger Agreement”), by and among the Company, Star Operating and HSON Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”). Upon the terms and subject to the conditions of the Merger Agreement, on August 22, 2025, at the effective time of the merger pursuant to the Merger Agreement (the “Merger”), Merger Sub merged with and into Star Operating, with Star Operating continuing as the surviving corporation of the Merger as a wholly owned subsidiary of the Company. Effective September 5, 2025, the Company changed (i) its name to Star Equity Holdings, Inc. and (ii) its trading symbols on Nasdaq to STRR and STRRP.
Building Solutions
The Building Solutions division operates in three specialties: (i) modular building manufacturing; (ii) structural wall panel and wood foundation manufacturing, including building supply distribution operations; and (iii) glue-laminated timber (glulam) column, beam, and truss manufacturing.
Business Services
The Business Services division provides flexible and scalable recruitment solutions to a global clientele, servicing organizations at all levels, from entry-level positions to the C-suite. The division focuses on mid-market and enterprise organizations worldwide, partnering consultatively with talent acquisition, HR, and procurement leaders to build diverse, high-impact teams and drive business success.
Energy Services
The Energy Services division engages in the rental, sale, and repair of downhole tools used in the oil and gas, geothermal, mining, and water-well industries.
Investments
The Investments division manages and finances the Company’s real estate assets as well as its investment positions in private and public companies.
Investor Relations:
The Equity Group
Lena Cati
(212) 836-9611
lcati@theequitygroup.com
Forward-Looking Statements
This press release contains statements that the Company believes to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release, including statements regarding the Company’s future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as “anticipate,” “estimate,” “expect,”
“project,” “intend,” “plan,” “predict,” “believe,” and similar words, expressions, and variations of these words and expressions are intended to identify forward-looking statements. All forward-looking statements are subject to important factors, risks, uncertainties, and assumptions, including industry and economic conditions that could cause actual results to differ materially from those described in the forward-looking statements. Such factors, risks, uncertainties, and assumptions include, but are not limited to, (1) global economic fluctuations, (2) changes in the cost and availability of commodities, materials, and equipment, (3) risks related to providing uninterrupted service to clients, (4) the ability of clients to terminate their relationship with the Company at any time, (5) risks associated with real estate ownership, (6) the Company’s ability to successfully achieve its strategic initiatives, (7) risks related to fluctuations in the Company’s operating results from quarter to quarter, (8) risks related to potential acquisitions or dispositions of businesses by the Company, (9) our profitability and growth being tied to the success of our operating businesses, (10) risks associated with our financial investments in other businesses, (11) our ability to improve existing products and services and develop, introduce, and market new products and services successfully, (12) the loss of or material reduction in our business with any of the Company’s largest customers, (13) competition in the Company’s markets, (14) risks related to potential decreases in demand for products, (15) our ability to maintain costs at an acceptable level, (16) the negative cash flows and operating losses that may recur in the future, (17) risks related to international operations, including foreign currency fluctuations, political events, trade wars, natural disasters or health crises, including the Russia-Ukraine war, and potential conflict in the Middle East, (18) risks relating to how future credit facilities may affect or restrict our operating flexibility, (19) our ability to generate or borrow sufficient cash to make payments on our indebtedness, (20) risks related to indebtedness, (21) risks associated with the Company’s investment strategy, (22) the Company’s dependence on key management personnel, (23) the Company’s ability to attract and retain highly skilled professionals, management, and advisors, (24) the Company’s ability to collect accounts receivable, (25) the Company’s exposure to legal proceedings, investigations and disputes, and limits on related insurance coverage, (26) the Company’s ability to utilize net operating loss carryforwards, (27) the potential for goodwill impairment, (28) volatility of the Company’s stock price, (29) risks related to our historically low trading volume, (30) risks related to securities or industry analysts, (31) the Company’s ability to declare dividends, (32) risks associated with failure to pay dividends on our Series A Preferred Stock, (33) our history of annual net losses, (34) risks related to our international operations, (35) risks related to compliance with federal and state laws, regulations, and other rules, (36) our exposure to employment-related claims, legal liability, and costs from clients, employees, and regulatory authorities, (37) risks related to the imposition of licensing or tax requirements or new regulations, (38) the effect of Anti-takeover provisions in our organizational documents, (39) the effect of the protective amendment contained in our Restated Certificate of Incorporation, (40) the impact of our stockholder rights plan, or “poison pill,” on stockholder decision making, (41) risks related to our scaled disclosure requirements as a smaller reporting company, (42) the Company’s heavy reliance on information systems and the impact of potentially losing or failing to develop technology, (43) the adverse impacts of cybersecurity threats and attacks, and (44) risks related to the use of new and evolving technologies, and (45) those risks set forth in “Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.” The foregoing list should not be construed to be exhaustive. Actual results could differ materially from the forward-looking statements contained in this press release. In view of these uncertainties, you should not place undue reliance on any forward-looking statements, which are based on our current expectations. These forward-looking statements speak only as of the date of this press release. The Company assumes no obligation, and expressly disclaims any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Financial Tables Follow
5
STAR EQUITY HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Revenues: | |||||||||||
| Building Solutions | $ | 11,598 | $ | — | |||||||
| Business Services | 35,005 | 31,866 | |||||||||
| Energy Services | 3,458 | — | |||||||||
| Investments | — | — | |||||||||
| Total revenues | 50,061 | 31,866 | |||||||||
| Cost of revenues: | |||||||||||
| Building Solutions | 9,957 | — | |||||||||
| Business Services | 17,559 | 15,468 | |||||||||
| Energy Services | 1,915 | — | |||||||||
| Investments | 75 | — | |||||||||
| Total cost of revenues | 29,506 | 15,468 | |||||||||
| Gross profit | 20,555 | 16,398 | |||||||||
| Operating expenses: | |||||||||||
| Salaries and related | 18,740 | 14,345 | |||||||||
| Office and general | 4,597 | 2,564 | |||||||||
| Marketing and promotion | 922 | 930 | |||||||||
| Depreciation and amortization | 311 | 283 | |||||||||
| Total operating expenses | 24,570 | 18,122 | |||||||||
| Operating loss | (4,015) | (1,724) | |||||||||
| Non-operating income (expense): | |||||||||||
| Interest (expense) income, net | (13) | 71 | |||||||||
| Other income / (expense), net | (31) | (71) | |||||||||
| Loss before income taxes | (4,059) | (1,724) | |||||||||
| (Benefit from) provision for income taxes | (266) | 32 | |||||||||
| Net loss | (3,793) | (1,756) | |||||||||
| Dividend on Series A perpetual preferred stock | (592) | — | |||||||||
| Net loss attributable to common shareholders | $ | (4,385) | $ | (1,756) | |||||||
| Loss per share: | |||||||||||
| Basic | $ | (1.01) | $ | (0.59) | |||||||
| Diluted | $ | (1.01) | $ | (0.59) | |||||||
| Loss per share, attributable to common shareholders | |||||||||||
| Basic | $ | (1.17) | $ | (0.59) | |||||||
| Diluted | $ | (1.17) | $ | (0.59) | |||||||
| Weighted-average shares outstanding: | |||||||||||
| Basic | 3,744 | 2,985 | |||||||||
| Diluted | 3,744 | 2,985 | |||||||||
| Dividends declared per share of Series A perpetual preferred stock | $ | 0.25 | $ | — | |||||||
6
| STAR EQUITY HOLDINGS, INC. | ||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||
| (unaudited) | ||||||||||||||
| March 31, 2026 | December 31, 2025 | |||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 8,093 | $ | 10,269 | ||||||||||
| Restricted cash, current | 1,649 | 1,819 | ||||||||||||
| Investments in equity securities | 4,157 | 3,767 | ||||||||||||
| Accounts receivable, less allowance for expected credit losses of $310 and $275, respectively | 32,839 | 35,220 | ||||||||||||
| Note receivable, current portion | 256 | 256 | ||||||||||||
| Inventories, net | 7,072 | 6,988 | ||||||||||||
| Prepaid and other | 3,992 | 4,168 | ||||||||||||
| Total current assets | 58,058 | 62,487 | ||||||||||||
| Property and equipment, net of accumulated depreciation of $7,001 and $6,367, respectively | 15,868 | 18,610 | ||||||||||||
| Operating lease right-of-use assets | 14,078 | 11,675 | ||||||||||||
| Goodwill | 5,913 | 5,944 | ||||||||||||
| Intangible assets, net of accumulated amortization of $4,949 and $4,795, respectively | 1,526 | 1,688 | ||||||||||||
| Long-term investments | 953 | 953 | ||||||||||||
| Notes receivable, net of current portion | 8,766 | 8,629 | ||||||||||||
| Deferred tax assets, net | 2,786 | 1,911 | ||||||||||||
| Restricted cash, non-current | 553 | 1,322 | ||||||||||||
| Other assets | 12 | 12 | ||||||||||||
| Total assets | $ | 108,513 | $ | 113,231 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 4,514 | $ | 4,769 | ||||||||||
| Accrued salaries, commissions, and benefits | 8,152 | 7,526 | ||||||||||||
| Accrued expenses and other current liabilities | 6,681 | 6,907 | ||||||||||||
| Short-term debt | 6,789 | 8,473 | ||||||||||||
| Deferred revenue | 876 | 1,496 | ||||||||||||
| Operating lease obligations, current | 745 | 655 | ||||||||||||
| Total current liabilities | 27,757 | 29,826 | ||||||||||||
| Income tax payable | 100 | 99 | ||||||||||||
| Operating lease obligations | 13,624 | 11,235 | ||||||||||||
| Long-term debt, net of current portion | 5,589 | 6,056 | ||||||||||||
| Other liabilities | 441 | 308 | ||||||||||||
| Total liabilities | 47,511 | 47,524 | ||||||||||||
| Commitments and contingencies | ||||||||||||||
| Stockholders’ equity: | ||||||||||||||
Series A Preferred stock, $0.001 par value; 10,000 shares authorized: 2,691 shares issued and 2,370 shares outstanding for both periods | 3 | 3 | ||||||||||||
Common stock, $0.001 par value, 20,000 shares authorized; 5,389 and 5,366 shares issued; 3,707 and 3,755 shares outstanding, respectively | 5 | 5 | ||||||||||||
| Additional paid-in capital | 530,028 | 530,136 | ||||||||||||
| Accumulated deficit | (439,727) | (435,934) | ||||||||||||
| Accumulated other comprehensive loss, net of applicable tax | (1,447) | (1,364) | ||||||||||||
Treasury stock, at cost: 1,682 and 1,611 common shares, respectively, and 321 preferred shares for both periods | (27,860) | (27,139) | ||||||||||||
| Total stockholders’ equity | 61,002 | 65,707 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 108,513 | $ | 113,231 | ||||||||||
7
| STAR EQUITY HOLDINGS, INC. | ||||||||||||||||||||||||||||||||||||||
| DIVISION ANALYSIS - QUARTER TO DATE | ||||||||||||||||||||||||||||||||||||||
| RECONCILIATION OF ADJUSTED EBITDA | ||||||||||||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||||||||
| For The Three Months Ended March 31, 2026 | Building Solutions | Business Services | Energy Services | Investments | Corporate | Total | ||||||||||||||||||||||||||||||||
| Revenue, from external customers | $ | 11,598 | $ | 35,005 | $ | 3,458 | $ | 159 | $ | (159) | $ | 50,061 | ||||||||||||||||||||||||||
| Gross profit | $ | 1,641 | $ | 17,446 | $ | 1,543 | $ | 84 | $ | (159) | $ | 20,555 | ||||||||||||||||||||||||||
| Net loss attributable to common shareholders | $ | (1,744) | $ | (599) | $ | 404 | $ | 145 | $ | (2,591) | $ | (4,385) | ||||||||||||||||||||||||||
| Dividends on Series A perpetual preferred stock | — | — | — | — | 592 | 592 | ||||||||||||||||||||||||||||||||
| Net loss | (1,744) | (599) | 404 | 145 | (1,999) | (3,793) | ||||||||||||||||||||||||||||||||
| Provision from income taxes | — | (766) | — | — | 500 | (266) | ||||||||||||||||||||||||||||||||
| Interest income, net | 126 | 158 | 43 | (173) | (141) | 13 | ||||||||||||||||||||||||||||||||
| Total depreciation and amortization | 264 | 192 | 401 | 75 | 10 | 942 | ||||||||||||||||||||||||||||||||
EBITDA (loss) (1) | (1,354) | (1,015) | 848 | 47 | (1,630) | (3,104) | ||||||||||||||||||||||||||||||||
| Foreign currency gain/loss | — | 52 | — | — | (7) | 45 | ||||||||||||||||||||||||||||||||
| Corporate administrative charges | 399 | 235 | 73 | — | (707) | — | ||||||||||||||||||||||||||||||||
| Gains on sale and leaseback transactions | — | — | (37) | — | — | (37) | ||||||||||||||||||||||||||||||||
| Other non-operating expense (income) | (2) | 56 | (32) | 177 | (16) | 183 | ||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 8 | 202 | — | — | 274 | 484 | ||||||||||||||||||||||||||||||||
Interest income (2) | — | — | — | 227 | — | 227 | ||||||||||||||||||||||||||||||||
| Unrealized (gain) loss on equity securities | — | — | — | 23 | (2) | 21 | ||||||||||||||||||||||||||||||||
| Severance/non-recurring salary | — | 77 | 130 | — | 79 | 286 | ||||||||||||||||||||||||||||||||
| Transaction costs related to mergers and acquisitions | — | — | — | — | 57 | 57 | ||||||||||||||||||||||||||||||||
| Financing costs | 23 | — | 51 | — | 4 | 78 | ||||||||||||||||||||||||||||||||
| Other non-recurring expenses | — | 53 | — | 2 | 59 | 114 | ||||||||||||||||||||||||||||||||
Adjusted EBITDA (loss) (1) | $ | (926) | $ | (340) | $ | 1,033 | $ | 476 | $ | (1,889) | $ | (1,646) | ||||||||||||||||||||||||||
| For The Three Months Ended March 31, 2025 | Business Services | Corporate | Total | |||||||||||||||||
| Revenue, from external customers | $ | 31,866 | $ | — | $ | 31,866 | ||||||||||||||
| Gross profit | $ | 16,398 | $ | — | $ | 16,398 | ||||||||||||||
| Net loss | $ | (973) | $ | (783) | $ | (1,756) | ||||||||||||||
| Provision for income taxes | 76 | (44) | 32 | |||||||||||||||||
| Interest income, net | 121 | (192) | (71) | |||||||||||||||||
| Total depreciation and amortization | 280 | 3 | 283 | |||||||||||||||||
EBITDA (loss) (1) | (496) | (1,016) | (1,512) | |||||||||||||||||
| Corporate administrative charges | 325 | (325) | — | |||||||||||||||||
| Foreign currency gain/loss | 105 | 8 | 113 | |||||||||||||||||
| Other non-operating expense (income) | 1 | (43) | (42) | |||||||||||||||||
| Stock-based compensation expense | 237 | 149 | 386 | |||||||||||||||||
| Severance/non-recurring salary | 54 | — | 54 | |||||||||||||||||
| Transaction costs related to mergers and acquisitions | — | 284 | 284 | |||||||||||||||||
| Other non-recurring expenses | — | 49 | 49 | |||||||||||||||||
Adjusted EBITDA (loss) (1) | $ | 226 | $ | (894) | $ | (668) | ||||||||||||||
(1) Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income (expense), stock-based compensation expense, and other non-recurring severance and professional fees (“Adjusted EBITDA”) are presented to provide additional information about
8
the Company's operations on a basis consistent with the measures which the Company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the Company's profitability or liquidity. Furthermore, EBITDA and Adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies.
(2) The Company allocates all corporate interest income to the Investments Division.
9
| STAR EQUITY HOLDINGS, INC. | ||||||||||||||||||||||||||||||||||||||
| DIVISION ANALYSIS - QUARTER TO DATE | ||||||||||||||||||||||||||||||||||||||
| RECONCILIATION OF PRO FORMA ADJUSTED EBITDA | ||||||||||||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||||||||
| For The Three Months Ended March 31, 2025 | Building Solutions | Business Services | Energy Services | Investments | Corporate | Total | ||||||||||||||||||||||||||||||||
Pro forma revenue, from external customers (1) | $ | 12,118 | $ | 31,866 | $ | 2,556 | $ | 158 | $ | (158) | $ | 46,540 | ||||||||||||||||||||||||||
Pro forma gross profit (1) | $ | 2,929 | $ | 16,398 | $ | 1,257 | $ | 83 | $ | (158) | $ | 20,509 | ||||||||||||||||||||||||||
Pro forma net loss attributable to common shareholders (1) | $ | (865) | $ | (973) | $ | (319) | $ | (348) | $ | (1,233) | $ | (3,738) | ||||||||||||||||||||||||||
| Dividends on Series A perpetual preferred stock | — | — | — | — | 479 | 479 | ||||||||||||||||||||||||||||||||
| Pro forma net loss | (865) | (973) | (319) | (348) | (754) | (3,259) | ||||||||||||||||||||||||||||||||
| Provision from income taxes | — | 76 | — | — | (2,234) | (2,158) | ||||||||||||||||||||||||||||||||
| Interest income, net | 182 | 121 | (4) | (155) | (200) | (56) | ||||||||||||||||||||||||||||||||
| Total depreciation and amortization | 1,015 | 280 | 198 | 75 | 12 | 1,580 | ||||||||||||||||||||||||||||||||
Pro forma EBITDA (loss) (2) | 332 | (496) | (125) | (428) | (3,176) | (3,893) | ||||||||||||||||||||||||||||||||
| Unrealized (gain) loss on equity securities | — | — | — | 224 | — | 224 | ||||||||||||||||||||||||||||||||
| Foreign currency gain/loss | — | 105 | — | — | 8 | 113 | ||||||||||||||||||||||||||||||||
| Corporate administrative charges | — | 325 | — | — | (325) | — | ||||||||||||||||||||||||||||||||
| Other non-operating expense (income) | — | 1 | 20 | — | (43) | (22) | ||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 11 | 237 | — | — | 189 | 437 | ||||||||||||||||||||||||||||||||
Interest income (3) | — | — | — | 215 | — | 215 | ||||||||||||||||||||||||||||||||
| Severance/non-recurring salary | — | 54 | — | — | — | 54 | ||||||||||||||||||||||||||||||||
| Transaction costs related to mergers and acquisitions | — | — | 595 | — | 746 | 1,341 | ||||||||||||||||||||||||||||||||
| Impairment of cost method investment | — | — | — | 61 | — | 61 | ||||||||||||||||||||||||||||||||
| Loss (gain) on equity method investment | — | — | — | 251 | — | 251 | ||||||||||||||||||||||||||||||||
| Financing costs | 8 | — | — | — | 4 | 12 | ||||||||||||||||||||||||||||||||
| Other non-recurring expenses | (28) | — | — | — | 49 | 21 | ||||||||||||||||||||||||||||||||
Pro forma adjusted EBITDA (loss) (2) | $ | 323 | $ | 226 | $ | 490 | $ | 323 | $ | (2,548) | $ | (1,186) | ||||||||||||||||||||||||||
(1) Pro forma Building Solutions, Energy Services, and Investments results for the full first quarter of 2025. Alliance Drilling Tools was acquired by Star Operating Companies on March 3, 2025.
(2) Pro forma Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating (income) expense, stock-based compensation expense, and other non-recurring expenses (“Adjusted EBITDA”) are presented to provide additional information about the Company's operations on a basis consistent with the measures which the Company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the Company's profitability or liquidity. Furthermore, EBITDA and Adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies.
(3) In Q1 2025, the Company allocated all Star Operating Companies corporate interest income to the Investments Division.
10
STAR EQUITY HOLDINGS, INC.
INCOME PER DILUTED SHARE
(in thousands, except per share amounts)
(unaudited)
| Adjusted | Diluted Shares | Per Diluted | ||||||||||||||||||
| For The Three Months Ended March 31, 2026 | Net Loss | Outstanding | Share (1) | |||||||||||||||||
| Net loss | $ | (3,793) | 3,744 | $ | (1.01) | |||||||||||||||
| Dividends on Series A perpetual preferred stock | (592) | 3,744 | (0.16) | |||||||||||||||||
| Net loss attributable to common shareholders | (4,385) | 3,744 | (1.17) | |||||||||||||||||
| Intangible amortization from acquisitions | 159 | 3,744 | 0.04 | |||||||||||||||||
| Gains on sale and leaseback transactions | (37) | 3,744 | (0.01) | |||||||||||||||||
| Unrealized (gain) loss on equity securities | 21 | 3,744 | 0.01 | |||||||||||||||||
| Severance/non-recurring salary | 286 | 3,744 | 0.08 | |||||||||||||||||
| Transaction costs related to mergers and acquisitions | 57 | 3,744 | 0.02 | |||||||||||||||||
| Financing costs | 78 | 3,744 | 0.02 | |||||||||||||||||
| Other non-recurring expenses | 114 | 3,744 | 0.03 | |||||||||||||||||
Adjusted net loss (2) | $ | (3,707) | 3,744 | $ | (0.99) | |||||||||||||||
| Adjusted | Diluted Shares | Per Diluted | ||||||||||||||||||
| For The Three Months Ended March 31, 2025 | Net Loss | Outstanding | Share (1) | |||||||||||||||||
| Net loss | $ | (1,756) | 2,985 | $ | (0.59) | |||||||||||||||
| Intangible amortization from acquisitions | 238 | 2,985 | 0.08 | |||||||||||||||||
| Severance/non-recurring salary | 54 | 2,985 | 0.02 | |||||||||||||||||
| Transaction costs related to mergers and acquisitions | 284 | 2,985 | 0.10 | |||||||||||||||||
| Other non-recurring expenses | 49 | 2,985 | 0.02 | |||||||||||||||||
Adjusted net loss (2) | $ | (1,131) | 2,985 | $ | (0.38) | |||||||||||||||
11
STAR EQUITY HOLDINGS, INC.
PRO FORMA INCOME PER DILUTED SHARE
(in thousands, except per share amounts)
(unaudited)
| Adjusted | Diluted Shares | Per Diluted | ||||||||||||||||||
| For The Three Months Ended March 31, 2025 | Net Loss | Outstanding | Share (1) | |||||||||||||||||
Pro forma net loss (3) | $ | (3,259) | 3,729 | $ | (0.87) | |||||||||||||||
| Dividends on Series A perpetual preferred stock | (479) | 3,729 | (0.13) | |||||||||||||||||
Pro forma net loss attributable to common shareholders (3) | (3,738) | 3,729 | (1.00) | |||||||||||||||||
| Intangible amortization from acquisitions | 962 | 3,729 | 0.26 | |||||||||||||||||
| Unrealized (gain) loss on equity securities | 224 | 3,729 | 0.06 | |||||||||||||||||
| Severance/non-recurring salary | 54 | 3,729 | 0.01 | |||||||||||||||||
| Transaction costs related to mergers and acquisitions | 1,341 | 3,729 | 0.36 | |||||||||||||||||
| Impairment of cost method investment | 61 | 3,729 | 0.02 | |||||||||||||||||
| Loss (gain) on equity method investment | 251 | 3,729 | 0.07 | |||||||||||||||||
| Financing costs | 12 | 3,729 | — | |||||||||||||||||
| Other non-recurring expenses | 21 | 3,729 | 0.01 | |||||||||||||||||
Pro forma adjusted net loss (2)(3) | $ | (812) | 3,729 | $ | (0.22) | |||||||||||||||
(1) Amounts may not sum due to rounding.
(2) Adjusted net income or loss per diluted share are Non-GAAP measures defined as reported net income or loss and reported net income or loss per diluted share before items such as acquisition-related costs and non-recurring expenses after tax that are presented to provide additional information about the Company's operations on a basis consistent with the measures that the Company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. Adjusted net income or loss per diluted share should not be considered in isolation or as substitutes for net income or loss and net income or loss per share and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as measures of the Company's profitability or liquidity. Further, adjusted net income or loss and adjusted net income or loss per diluted share as presented above may not be comparable with similarly titled measures reported by other companies.
(3) Pro forma Building Solutions, Energy Services, and Investments results for the full first quarter of 2025. Alliance Drilling Tools was acquired by Star Operating Companies on March 3, 2025.
12
1 A Diversified Holding Company www.starequity .com Creating Shareholder Value through Organic Growth, Acquisitions, and Share Repurchases Q1 2026 Earnings Call May 11, 2026 Common Stock: Nasdaq: STRR Series A 10% Preferred Stock: Nasdaq: STRRP 2 “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This presentation contains statements that the Company believes to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release, including statements regarding the Company’s future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “predict,” “believe,” and similar words, expressions, and variations of these words and expressions are intended to identify forward-looking statements. All forward-looking statements are subject to important factors, risks, uncertainties, and assumptions, including industry and economic conditions that could cause actual results to differ materially from those described in the forward-looking statements. Such factors, risks, uncertainties, and assumptions include, but are not limited to, (1) global economic fluctuations, (2) changes in the cost and availability of commodities, materials, and equipment, (3) risks related to providing uninterrupted service to clients, (4) the ability of clients to terminate their relationship with the Company at any time, (5) risks associated with real estate ownership, (6) the Company’s ability to successfully achieve its strategic initiatives, (7) risks related to fluctuations in the Company’s operating results from quarter to quarter, (8) risks related to potential acquisitions or dispositions of businesses by the Company, (9) our profitability and growth being tied to the success of our operating businesses, (10) risks associated with our financial investments in other businesses, (11) our ability to improve existing products and services and develop, introduce, and market new products and services successfully, (12) the loss of or material reduction in our business with any of the Company’s largest customers, (13) competition in the Company’s markets, (14) risks related to potential decreases in demand for products, (15) our ability to maintain costs at an acceptable level, (16) the negative cash flows and operating losses that may recur in the future, (17) risks related to international operations, including foreign currency fluctuations, political events, trade wars, natural disasters or health crises, including the Russia-Ukraine war, and potential conflict in the Middle East, (18) risks relating to how future credit facilities may affect or restrict our operating flexibility, (19) our ability to generate or borrow sufficient cash to make payments on our indebtedness, (20) risks related to indebtedness, (21) risks associated with the Company’s investment strategy, (22) the Company’s dependence on key management personnel, (23) the Company’s ability to attract and retain highly skilled professionals, management, and advisors, (24) the Company’s ability to collect accounts receivable, (25) the Company’s exposure to legal proceedings, investigations and disputes, and limits on related insurance coverage, (26) the Company’s ability to utilize net operating loss carryforwards, (27) the potential for goodwill impairment, (28) volatility of the Company’s stock price, (29) risks related to our historically low trading volume, (30) risks related to securities or industry analysts, (31) the Company’s ability to declare dividends, (32) risks associated with failure to pay dividends on our Series A Preferred Stock, (33) our history of annual net losses, (34) risks related to our international operations, (35) risks related to compliance with federal and state laws, regulations, and other rules, (36) our exposure to employment- related claims, legal liability, and costs from clients, employees, and regulatory authorities, (37) risks related to the imposition of licensing or tax requirements or new regulations, (38) the effect of Anti- takeover provisions in our organizational documents, (39) the effect of the protective amendment contained in our Restated Certificate of Incorporation, (40) the impact of our stockholder rights plan, or “poison pill,” on stockholder decision making, (41) risks related to our scaled disclosure requirements as a smaller reporting company, (42) the Company’s heavy reliance on information systems and the impact of potentially losing or failing to develop technology, (43) the adverse impacts of cybersecurity threats and attacks, and (44) risks related to the use of new and evolving technologies, and (45) those risks set forth in “Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.” The foregoing list should not be construed to be exhaustive. Actual results could differ materially from the forward-looking statements contained in this press release. In view of these uncertainties, you should not place undue reliance on any forward-looking statements, which are based on our current expectations. This presentation reflects management’s views as of the date presented. All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. Forward-Looking Statements 3 Q1 2026: Consolidated Financial Results US$ In Millions, except EPS '+ / - (1) Q1 2026 Q1 2025 (5) Revenue + 8% $50.1 $46.5 Gross Profit + —% $20.6 $20.5 Adjusted SG&A(2) (3) + 3% $23.2 $22.5 Adjusted EBITDA(4) - (39)% $(1.6) $(1.2) Net Income (Loss) attributable to common shareholders - (17)% $(4.4) $(3.7) Adjusted Net Income (Loss) attributable to common shareholders - (357)% $(3.7) $(0.8) Diluted EPS attributable to common shareholders - (17)% $(1.17) $(1.00) Adjusted Diluted EPS attributable to common shareholders(4) - (350)% $(0.99) $(0.22) (1) + / - indicates whether the caption was higher (+) or lower (-) than the comparison period. (2) Excludes stock compensation expense of $0.5 million and $0.4 million for the three months ended March 31, 2026 and 2025, respectively. (3) For the three months ended March 31, 2026 and 2025, SG&A excludes non-recurring expenses of $0.5 million and $1.4 million, respectively. (4) Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS are non-GAAP financial measures. Please reference the Appendix of this presentation for a reconciliation of these non-GAAP measures. (5) Pro forma Building Solutions, Energy Services, and Investments results for the full first quarter of 2025. Alliance Drilling Tools was acquired by Star Operating Companies on March 3, 2025. 4 (1) Please reference the slides in the Appendix of this presentation for a reconciliation of this non-GAAP measure. (2) Pro forma Building Solutions, Energy Services, and Investments results for the full first quarter of 2025. Alliance Drilling Tools was acquired by Star Operating Companies on March 3, 2025. Based on "Corporate" column in Reconciliation of Adjusted EBITDA table. Corporate Cost Savings
5 Q1 2026 Cash Flow Summary 6 Balance Sheet: Selected Items US$ In Millions 3/31/2026 12/31/2025 Selected Assets Cash $8.1 $10.3 Restricted Cash $2.2 $3.1 Accounts Receivable $32.8 $35.2 Stockholders’ Equity Stockholders' Equity $61.0 $65.7 Working Capital Current Assets $58.1 $62.5 Current Assets ex-cash $50.0 $52.2 Current Liabilities $27.8 $29.8 Working Capital $30.3 $32.7 Working Capital ex-cash $22.2 $22.4 7 Business Services Division (slides 10– 12) Energy Services Division (slide 13) Business Divisions Current businesses: opportunities, financial highlights, and future goals Building Solutions Division (slides 8 – 9) 8 Q1 2026: Building Solutions Financial Results US$ In Millions '+ / - (1) Q1 2026 Q1 2025 (2) Revenue - (4)% $11.6 $12.1 Gross Profit - (44)% $1.6 $2.9 Adjusted EBITDA(3) - (387)% $(0.9) $0.3 (1) + / - indicates whether the caption was higher (+) or lower (-) than the comparison period. (2) Building Solutions Q1 2025 financials from Star Operating Companies, Inc. Q1 2025 earnings. (3) Adjusted EBITDA is a non-GAAP financial measure. Please reference the slides in the Appendix of this presentation for a reconciliation of this non-GAAP measure.
9 Building Solutions: Backlog Historical Backlog (USD in thousands) Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Beginning Backlog (1) $ 17,190 $ 27,913 $ 25,739 $ 20,032 $ 9,598 (+) New Orders $ 22,841 $ 18,223 $ 15,680 $ 7,541 $ 9,983 (-) Recognized Revenue $ 12,118 $ 20,398 $ 21,387 $ 17,975 $ 11,598 Ending Backlog $ 27,913 $ 25,739 $ 20,032 $ 9,598 $ 7,983 LTM Book to Bill Ratio 1.23 1.19 1.01 0.72 (1) Backlog defined as future revenue under contract. 10 Q1 2026: Business Services Financial Results US$ In Millions '+ / - (1) Q1 2026 Q1 2025 Revenue + 10% $35.0 $31.9 Gross Profit + 6% $17.4 $16.4 Adjusted EBITDA(2) - (250)% $(0.3) $0.2 (1) + / - indicates whether the caption was higher (+) or lower (-) than the comparison period. (2) Adjusted EBITDA is a non-GAAP financial measure. Please reference the slides in the Appendix of this presentation for a reconciliation of this non-GAAP measure. 11 Q1 2026: Business Services Operating Dashboard TTM New Business = $75.0M $13.7M in New Logo and $61.3M in renewals and expansions from our legacy clients over the past four quarters TTM Gross Profit = $71.8M Relatively stable (slight increase) over the past four quarters TTM Adjusted EBITDA Margin decreased versus Q3 2025 but remains above Q3 FY24 (3) 12 Q1 2026: Business Services Regional Split Revenue Gross Profit EMEA EMEA APAC APAC Americas Americas
13 Q1 2026: Energy Services Financial Results US$ In Millions '+ / - (1) Q1 2026 Q1 2025 (2) Revenue + 35% $3.5 $2.6 Gross Profit + 23% $1.5 $1.3 Adjusted EBITDA(3) + 111% $1.0 $0.5 (1) + / - indicates whether the caption was higher (+) or lower (-) than the comparison period. (2) Pro forma results for the full first quarter of 2025. Alliance Drilling Tools was acquired by Star Operating Companies on March 3, 2025. (3) Adjusted EBITDA is a non-GAAP financial measure. Please reference the slides in the Appendix of this presentation for a reconciliation of this non-GAAP measure. 14 Appendix 1. Non-GAAP earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) and non-GAAP earnings before interest, income taxes, depreciation and amortization, non-operating income (expense), stock-based compensation expense, and other non-recurring items (“Adjusted EBITDA”) are presented to provide additional information about the Company's operations on a basis consistent with the measures which the Company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities, or other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the Company's profitability or liquidity. Furthermore, EBITDA and Adjusted EBITDA as presented above may not be comparable with similarly titled measures reported by other companies. Reconciliation of Non-GAAP Financials 15 16 Q1 2026 Building Solutions Business Services Energy Services Investments Corporate Total (3) Revenue, from external customers $ 11.6 $ 35.0 $ 3.5 $ 0.2 $ (0.2) $ 50.1 Gross profit (1) $ 1.6 $ 17.4 $ 1.5 $ 0.1 $ (0.2) $ 20.6 Net loss attributable to common shareholders $ (1.7) $ (0.6) $ 0.4 $ 0.1 $ (2.6) $ (4.4) Dividends on Series A perpetual preferred stock — — — — 0.6 0.6 Net loss (1.7) (0.6) 0.4 0.1 (2.0) (3.8) Provision from income taxes — (0.8) — — 0.5 (0.3) Interest income, net 0.1 0.2 — (0.2) (0.1) — Total depreciation and amortization 0.3 0.2 0.4 0.1 — 0.9 EBITDA (loss) (2) (1.4) (1.0) 0.8 — (1.6) (3.1) Foreign currency gain/loss — 0.1 — — — — Corporate administrative charges 0.4 0.2 0.1 — (0.7) — Gains on sale and leaseback transactions — — — — — — Other non-operating expense (income) — 0.1 — 0.2 — 0.2 Stock-based compensation expense — 0.2 — — 0.3 0.5 Interest income — — — 0.2 — 0.2 Unrealized (gain) loss on equity securities — — — — — — Severance/contingent salary — 0.1 0.1 — 0.1 0.3 Transaction costs related to mergers and acquisitions — — — — 0.1 0.1 Financing cost — — — — — — Other non-recurring expenses — 0.1 0.1 — 0.1 0.2 Adjusted EBITDA (loss) (2)(4) $ (0.9) $ (0.3) $ 1.0 $ 0.5 $ (1.9) $ (1.6) Q1 2025 Business Services Corporate Total (3) Revenue, from external customers $ 31.9 $ — $ 31.9 Gross profit (1) $ 16.4 $ — $ 16.4 Net loss (1.0) (0.8) $ (1.8) Provision for income taxes 0.1 — — Interest income, net 0.1 (0.2) (0.1) Total depreciation and amortization 0.3 — 0.3 EBITDA (loss) (2) (0.5) (1.0) (1.5) Corporate administrative charges 0.3 (0.3) — Foreign currency gain/loss 0.1 — 0.1 Other non-operating expense (income) — — — Stock-based compensation expense 0.2 0.1 0.4 Severance/contingent salary 0.1 — 0.1 Transaction costs related to mergers and acquisitions — 0.3 0.3 Other non-recurring expenses — — — Adjusted EBITDA (loss) (2)(4) $ 0.2 $ (0.9) $ (0.7) (1) Represents Revenue less direct contracting costs and reimbursed expenses for Business Services. (2) EBITDA is a non-GAAP measure defined as earnings before interest, income taxes, depreciation and amortization. Adjusted EBITDA is a non-GAAP measure defined as earnings before interest, income taxes, depreciation and amortization, non-operating income, stock-based compensation expense, and other items such as non-recurring severance and professional fees. (3) Amounts may not sum due to rounding. (4) Adjusted net income or loss per diluted share is a Non-GAAP measure defined as reported net income or loss per diluted share before items such as acquisition-related costs and non-recurring severance and professional fees after tax that is presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. Adjusted net income or loss per diluted share should not be considered in isolation or as a substitute for net income or loss per diluted share and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Further, Adjusted net income or loss per diluted share as presented above may not be comparable with similarly titled measures reported by other companies. Reconciliation of Non-GAAP Financial Measures Q1 2026 and 2025
17 (1) Amounts may not sum due to rounding. (2) Adjusted net income or loss per diluted share is a Non-GAAP measure defined as reported net income or loss per diluted share before items such as acquisition-related costs and non-recurring severance and professional fees after tax that is presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. Adjusted net income or loss per diluted share should not be considered in isolation or as a substitute for net income or loss per diluted share and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Further, Adjusted net income or loss per diluted share as presented above may not be comparable with similarly titled measures reported by other companies. Adjusted Net Loss (1) Per Diluted Share (1) Three Months Ended Three Months Ended March 31, 2026 March 31, 2026 Net loss $ (3.8) $ (1.01) Dividends on Series A perpetual preferred stock (0.6) (0.16) Net loss attributable to common shareholders (4.4) (1.17) Intangible amortization from acquisitions 0.2 0.04 Gains on sale and leaseback transactions — (0.01) Unrealized (gain) loss on equity securities — 0.01 Severance/contingent salary 0.3 0.08 Transaction costs related to mergers and acquisitions 0.1 0.02 Financing cost — 0.01 Other non-recurring expenses 0.2 0.04 Adjusted net loss (2) $ (3.7) $ (0.99) Reconciliation of Non-GAAP Financial Measures Q1 2026 and 2025 Adjusted Net Loss (1) Per Diluted Share (1) Three Months Ended Three Months Ended March 31, 2025 March 31, 2025 Net loss $ (1.8) $ (0.59) Intangible amortization from acquisitions 0.2 $ 0.08 Severance/contingent salary 0.1 $ 0.02 Transaction costs related to mergers and acquisitions 0.3 $ 0.10 Other non-recurring expenses — 0.02 Adjusted net loss (2) $ (1.1) $ (0.38) 18 Q1 2025 Building Solutions Business Services Energy Services Investments Corporate Total (3) Pro forma revenue, from external customers (1) $ 12.1 $ 31.9 $ 2.6 $ 0.2 $ (0.2) $ 46.5 Pro forma gross profit (1) $ 2.9 $ 16.4 $ 1.3 $ 0.1 $ (0.2) $ 20.5 Pro forma net loss attributable to common shareholders (1) $ (0.9) $ (1.0) $ (0.3) $ (0.3) $ (1.2) $ (3.7) Dividends on Series A perpetual preferred stock — — — — 0.5 0.5 Pro forma net loss (0.9) (1.0) (0.3) (0.3) (0.8) (3.3) Provision from income taxes — 0.1 — — (2.2) (2.2) Interest income, net 0.2 0.1 — (0.2) (0.2) (0.1) Total depreciation and amortization 1.0 0.3 0.2 0.1 — 1.6 Pro forma EBITDA (loss) (2) 0.3 (0.5) (0.1) (0.4) (3.2) (3.9) Unrealized (gain) loss on equity securities — — — 0.2 — 0.2 Foreign currency gain/loss — 0.1 — — — 0.1 Corporate administrative charges — 0.3 — — (0.3) — Other non-operating expense (income) — — — — — — Stock-based compensation expense — 0.2 — — 0.2 0.4 Interest income (3) — — — 0.2 — 0.2 Severance/contingent salary — 0.1 — — — 0.1 Transaction costs related to mergers and acquisitions — — 0.6 — 0.7 1.3 Impairment of cost method investment — — — 0.1 — 0.1 Loss (gain) on equity method investment — — — 0.3 — 0.3 Financing cost — — — — — — Other non-recurring expenses — — — — — — Pro forma adjusted EBITDA (loss) (2) $ 0.3 $ 0.2 $ 0.5 $ 0.3 $ (2.5) $ (1.2) (1) Pro forma Building Solutions, Energy Services, and Investments results for the full first quarter of 2025. Alliance Drilling Tools was acquired by Star Operating Companies on March 3, 2025. (2) EBITDA is a non-GAAP measure defined as earnings before interest, income taxes, depreciation and amortization. Adjusted EBITDA is a non-GAAP measure defined as earnings before interest, income taxes, depreciation and amortization, non-operating income, stock-based compensation expense, and other items such as non-recurring severance and professional fees. (3) Amounts may not sum due to rounding. (4) Adjusted net income or loss per diluted share is a Non-GAAP measure defined as reported net income or loss per diluted share before items such as acquisition-related costs and non-recurring severance and professional fees after tax that is presented to provide additional information about the company's operations on a basis consistent with the measures which the company uses to manage its operations and evaluate its performance. Management also uses these measurements to evaluate capital needs and working capital requirements. Adjusted net income or loss per diluted share should not be considered in isolation or as a substitute for net income or loss per diluted share and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. Further, Adjusted net income or loss per diluted share as presented above may not be comparable with similarly titled measures reported by other companies. Reconciliation of Pro Forma (1) Non-GAAP Financial Measures Pro Forma Adjusted Net Loss (3) Pro Forma Per Diluted Share (3) Quarter Ended Quarter Ended March 31, 2025 March 31, 2025 Pro forma net loss (3) $ (3.3) $ (0.87) Dividends on Series A perpetual preferred stock (0.5) (0.13) Pro forma net loss attributable to common shareholders (3) (3.7) (1.00) Intangible amortization from acquisitions 1.0 0.26 Unrealized (gain) loss on equity securities 0.2 0.06 Severance/contingent salary 0.1 0.01 Transaction costs related to mergers and acquisitions 1.3 0.36 Impairment of cost method investment 0.1 0.02 Loss (gain) on equity method investment 0.3 0.07 Financing cost — — Other non-recurring expenses — 0.01 Pro forma adjusted net loss (2)(3) $ (0.8) $ (0.22) 19 Contact Us Jeff Eberwein CEO Rick Coleman COO Shawn Miles EVP – Finance admin@starequity.com Investor Relations The Equity Group Inc. Lena Cati Senior Vice President 212-836-9611 / lcati@theequitygroup.com
FAQ
How did Star Equity Holdings (HSON) perform financially in Q1 2026?
Star Equity’s Q1 2026 revenue was $50.1 million, up 57.1% from Q1 2025. Gross profit reached $20.6 million, but net loss attributable to common shareholders widened to $4.4 million, or $1.17 per diluted share, from $1.8 million last year.
What were Star Equity Holdings (HSON) non-GAAP results for Q1 2026?
Star Equity reported an adjusted net loss per diluted share of $0.99 in Q1 2026, versus $0.38 a year earlier. Adjusted EBITDA loss increased to $1.6 million from $0.7 million, reflecting higher operating costs despite strong revenue growth and merger-related changes.
How did Star Equity Holdings (HSON) business segments perform in Q1 2026?
In Q1 2026, Building Solutions generated $11.6 million revenue with an adjusted EBITDA loss of $0.9 million. Business Services produced $35.0 million revenue and an adjusted EBITDA loss of $0.3 million, while Energy Services delivered $3.5 million revenue and $1.0 million of adjusted EBITDA.
What is Star Equity Holdings (HSON) liquidity position after Q1 2026?
At March 31, 2026, Star Equity held $10.3 million in total cash, including $2.2 million of restricted cash. The company used $1.4 million in operating cash flow during the quarter and reported working capital of $30.3 million, with current assets of $58.1 million.
What net operating loss (NOL) balance does Star Equity Holdings (HSON) report?
As of December 31, 2025, Star Equity reported approximately $215 million of usable U.S. net operating loss carryforwards. The company views these NOLs as a valuable asset and has ownership-limiting provisions intended to help preserve their potential tax benefit.
How did Building Solutions backlog trend for Star Equity Holdings (HSON)?
Building Solutions ended Q1 2026 with $8.0 million in backlog, down from $9.6 million at year-end 2025. The trailing 12‑month book‑to‑bill ratio was 0.72, indicating that recognized revenue exceeded newly booked orders over that period.