XBP Global (XBP) cuts quarterly net loss and lifts efficiency targets in Q2 2026
Rhea-AI Filing Summary
XBP Global Holdings reported second quarter 2026 results for the quarter ended June 30, 2026. Revenue was $191.3 million, compared with pro forma revenue of $222.5 million for the prior-year quarter, while pro forma gross margin was 21.5%. Adjusted Gross Margin reached 24.9%, the highest level to date.
The company reported a net loss of $16.7 million for the quarter, a substantial improvement from a net loss of $65.1 million in the prior-year period. Pro Forma Normalized EBITDA was $21.9 million, up from $20.2 million a year earlier. For the first half of 2026, net cash used in operating activities improved to $15.2 million from $75.9 million in the first half of 2025. Management highlighted a higher-margin revenue mix, benefits from its AI-first automation strategy, and raised its annualized efficiency target to $65–$75 million, with about $35 million expected in 2026. XBP Global also closed $121.3 million of total contract value in the quarter and has engaged a financial advisor in connection with previously announced strategic alternatives.
Positive
- Net loss sharply narrowed to $16.7 million from $65.1 million in the prior-year quarter, indicating materially improved bottom-line performance even with lower revenue.
- Operating cash burn improved materially, with net cash used in operating activities of $15.2 million for the first half of 2026 versus $75.9 million in the first half of 2025.
- Management raised its annualized efficiency target to $65–$75 million from $55–$60 million, with about $35 million expected to be realized during calendar 2026.
- Second quarter Pro Forma Normalized EBITDA increased to $21.9 million from $20.2 million, and Adjusted Gross Margin improved to 24.9% from 22.0%, showing stronger underlying profitability metrics.
Negative
- Revenue declined on a pro forma basis, with Q2 2026 revenue of $191.3 million versus pro forma revenue of $222.5 million for Q2 2025.
- Stockholders’ equity decreased to $46.5 million at June 30, 2026 from $87.3 million at December 31, 2025, reflecting accumulated losses and balance sheet pressure.
Filing Explained
At June 30, 2026, XBP reported $18,579 thousand cash, $9,380 thousand restricted cash, and $25,266 thousand current debt plus $347,642 thousand long-term debt.
The August 13 Form 8-K reports completed second-quarter results for the period ended
At
The release describes a “clear step-up in profitability,” but the quarter still reported a GAAP net loss of
Common shares issued and outstanding were
8-K Event Classification
Key Figures
Key Terms
Pro Forma Normalized EBITDA financial
Adjusted Gross Margin financial
reorganization items financial
DIP New Money Loans financial
ABL Facility financial
right-of-use arrangements financial
Earnings Snapshot
Management raised its annualized efficiency target to $65–$75 million, with approximately $35 million expected to be realized during calendar year 2026.
FAQ
How did XBP (XBP Global Holdings) perform financially in Q2 2026?
What was XBP’s Pro Forma Normalized EBITDA in Q2 2026?
How is XBP’s margin profile changing in 2026?
What efficiency targets has XBP (XBP Global Holdings) set?
How strong were XBP’s bookings and pipeline in Q2 2026?
What does XBP’s cash flow look like for the first half of 2026?
Is XBP Global pursuing strategic alternatives?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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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-2of this chapter).
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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 August 13, 2026, XBP Global Holdings, Inc. (the “Company”) issued a press release reporting financial results for the quarter ended June 30, 2026. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information contained in Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it 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 expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits.
Exhibit No. | | Description |
99.1 | Press Release dated August 13, 2026, announcing Second Quarter 2026 results | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
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.
Dated: August 13, 2026
XBP GLOBAL HOLDINGS, INC. | ||
By: | /s/ Dejan Avramovic | |
Dejan Avramovic | ||
Chief Financial Officer | ||
Exhibit 99.1
XBP Global Holdings, Inc. Reports Second Quarter 2026 Financial Results
August 13, 2026
IRVING, TX, August 13, 2026 (GLOBE NEWSWIRE) – XBP Global Holdings, Inc. (“XBP Global” or “the Company”) (NASDAQ: XBP), a multinational technology and services company orchestrating mission-critical systems that enable hyper-automation and digital transformation, today announced its financial results for the quarter ended June 30, 2026.
Second Quarter 2026 Highlights
| • | Revenue totaled $191.3 million, a decline of 14.0% year-over-year on a pro forma basis1 |
| • | Gross margin of 21.5%, an 80 basis point increase year-over-year on a pro forma basis |
| • | Record adjusted gross margin2 of 24.9%, a 290 basis point increase year-over-year on a pro forma basis1 |
| • | Net loss of $16.7 million |
| • | Normalized EBITDA2 of $21.9 million, representing an 8.4% increase year-over-year on a pro forma basis1 |
| • | Closed $121.3 million of total TCV, representing a 51.6% increase year-over-year and 41.9% above the trailing four-quarter average1,3 |
| • | Closed $36.0 million of new ACV, representing a 57.0% increase year-over-year and 39.3% above the trailing four-quarter average1,3 |
| • | The Company now expects to achieve $65 to $75 million in annualized operational efficiencies resulting from Company-wide AI led automation efforts, an increase from the previous target of $55 to $60 million, with an expected 2026 in-year benefit of approximately $35 million. |
"Our second quarter results reflect a clear step-up in profitability, with Normalized EBITDA of $21.9 million and adjusted gross margin of 24.9%, our highest level to date," said Andrej Jonovic, Chief Executive Officer of XBP Global. “The improvement reflects both a favorable revenue mix in the quarter and the impact of our AI-first automation strategy. The latter is particularly important because automation-driven efficiencies compound over time, and the progress we have made allows us to raise our annualized efficiency target to $65 to $75 million, up from our prior target of $55 to $60 million, with approximately $35 million expected to be realized during calendar year 2026."
"On the commercial side, we closed $121.3 million of total contract value in the quarter, split fairly evenly between new and renewal revenue. New bookings increased year-over-year and sequentially, and our late-stage pipeline continues to strengthen. Demand remains strongest where organizations require secure, on-premise automation solutions with strict data sovereignty and human oversight requirements, particularly in healthcare, though timing on public sector contracts remains volatile. Our priorities for the balance of the year remain unchanged: continue strengthening and converting the pipeline while advancing our AI-driven automation initiatives and structural margin improvement efforts. The Company has engaged a financial advisor in connection with the previously announced strategic alternatives."
Below are the notes referenced above:
| (1) | Pro forma results reflect the combined company as if the July 2025 acquisition of Exela Technologies BPA, LLC (together with its subsidiaries and certain affiliates “BPA”) had occurred on January 1, 2025, and include adjustments to provide period-to-period comparability where the reported results exclude the results of XBP Europe Holdings, Inc. (as it existed prior to such acquisition, “XBP Europe”) until July 31, 2025. |
| (2) | Adjusted Gross Margin and Normalized EBITDA are non-GAAP measures. A reconciliation of non-GAAP measures is attached to this release. |
| (3) | Total Contract Value (“TCV”) represents the initial estimated revenue related to contracts signed in the period without regard for early termination or revenue recognition rules. Changes to contracts and scope are treated as TCV only to the extent of the incremental new value. New TCV represents TCV attributable to expansion and new scope for existing clients, as well as TCV attributable to new clients. Annual contract value (“ACV”) represents the annualized value of the TCV, calculated by dividing the TCV of each individual contract by its respective duration in years. |
Earnings Call and Supplemental Investor Presentation
The Company will host a live conference call at 5:00 pm Eastern Time on August 13, 2026, accompanied by a live webcast. Hosting the call will be Andrej Jonovic, Chief Executive Officer and Dejan Avramovic, Chief Financial Officer.
Participant Call-In Registration: Participants who wish to join the conference by telephone must register using the following dial-in registration link to receive the dial-in number and a personalized PIN code that will be required to access the call: https://register-conf.media-server.com/register/BI96e42402195a4ebaa3e543bd987a20f0.
Participant Live Webcast Registration: To access the live webcast, please visit https://edge.media-server.com/mmc/p/qzjqc7fx or XBP Global’s Investor Relations website at https://investors.xbpglobal.com/.
Rebroadcast: Following the live webcast, a replay will be available on XBP Global’s Investor Relations website.
An investor presentation relating to our second quarter 2026 performance will be available at https://investors.xbpglobal.com.
About Pro Forma Financial Information
This press release includes certain pro forma financial information, which is presented for informational purposes only and is not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Pro forma results are presented on an unaudited basis as if the acquisition of BPA had been consummated on January 1, 2025, regardless of the actual closing date.
For financial reporting purposes, BPA is treated as the accounting acquirer, and results exclude XBP Europe until July 31, 2025. As a result, reported results for periods prior to July 31, 2025 are not comparable to previous annual earnings results presented by the Company.
Pro forma financial information is intended to provide investors with a clearer understanding of the underlying performance and trends of the combined business by illustrating the impact of the acquisition on historical results. These results are designed to facilitate period-to-period comparisons and enhance transparency into ongoing operations.
Pro forma information is based on certain assumptions and adjustments, including the elimination of intercompany transactions, acquisition-related costs, and the alignment of accounting policies, as described in the accompanying tables and footnotes. This information is unaudited and does not purport to represent what actual results would have been had the acquisition occurred at the dates indicated, nor does it project future results.
Pro forma financial information should be read in conjunction with historical financial statements, related notes, and the pro forma adjustments and explanatory notes included in this release.
About Non-GAAP Financial Measures
This press release also includes certain non-GAAP financial measures, including EBITDA, Normalized EBITDA, Pro Forma Normalized EBITDA, and Adjusted Gross Margin which are not prepared in accordance with GAAP.
Management believes these non-GAAP measures are useful supplemental measures; however, investors are encouraged to review the Company’s GAAP results and not rely on any single financial measure.
These measures provide investors with additional insight into financial performance, results of operations, and liquidity, and help facilitate comparisons of underlying business trends across periods. Management uses these measures to evaluate performance consistently by excluding the effects of capital structure (such as varying debt levels, interest expense, and transaction costs from acquisitions).
We define EBITDA as net income (loss), plus taxes, interest expense, and depreciation and amortization. We define Normalized EBITDA as EBITDA plus non-recurring transaction costs, non-cash equity compensation, restructuring and related expenses, loss/(gain) on sale of assets, impairment of goodwill and other non-recurring items such as reorganization items. We define Pro Forma Normalized EBITDA as Normalized EBITDA plus management’s estimates of the impact of the accounting acquisition of XBP Europe and reorganization of BPA, had such transactions occurred at the beginning of the earliest period presented. We define Adjusted Gross Margin as GAAP gross profit, adjusted to exclude severance, restructuring and related expenses, and discontinued operations, expressed as a percentage of total revenue. Management believes that Adjusted Gross Margin provides useful supplemental information to investors regarding the underlying operational performance of our business, facilitates period-over-period comparisons of core operating efficiency, and aligns with the metrics management uses to evaluate performance and allocate resources.
Non-GAAP financial measures should not be considered in isolation or as alternatives to liquidity or financial measures determined in accordance with GAAP. A limitation of these measures is that they exclude significant expenses and income required by GAAP to be recorded in the financial statements. In addition, the determination of which items to exclude or include requires the application of management judgement, and these measures may not be comparable to similarly titled measures reported by other companies.
These measures are not required to be uniformly applied, are unaudited, and should not be considered in isolation or as substitutes for results prepared in accordance with GAAP, and their presentation may not be comparable to similar measures used by other companies. Net loss is the GAAP measure most directly comparable to the non-GAAP measures presented here. For a reconciliation of the comparable GAAP measures to these non-GAAP financial measures, see the schedules attached to this release.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. These statements include financial forecasts, projections, and other statements about future operations, financial position, business strategy, market opportunities, and trends. Forward-looking statements can often be identified by terms such as “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “plan,” “targets,” “projects,” “could,” “would,” “continue,” “forecast,” or similar expressions. All forward-looking statements are based on estimates, forecasts, and assumptions that are inherently uncertain and subject to risks and factors that could cause actual results to differ materially. These include, but are not limited to: (1) risks related to the acquisition and related restructuring, including the inability to realize anticipated benefits, disruptions to operations, and costs associated with the acquisition; (2) legal proceedings; (3) failure to maintain compliance with Nasdaq listing standards; (4) competition and market conditions; (5) economic, geopolitical, and regulatory changes; (6) challenges in retaining clients, employees, and suppliers; and (7) other risks detailed in the Company’s filings with the SEC, including the “Risk Factors” section of its Annual Report on Form 10-K for 2025. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date made. XBP Global undertakes no obligation to update these statements, except as required by law. There is no assurance that XBP Global or its subsidiaries will achieve the results projected in these statements.
About XBP Global
XBP Global is a multinational technology and services company powering intelligent workflows for organizations worldwide. With a presence in 20 countries and approximately 9,200 employees, XBP Global partners with over 2,000 clients, including many of the Fortune 100, to orchestrate mission-critical systems that enable hyper-automation.
Our proprietary platforms, agentic AI-driven automation, and deep domain expertise across industries and the public and private sectors enable our clients to entrust us with their most impactful digital transformations and workflows. By combining innovation with execution excellence, XBP Global helps businesses reimagine how they work, transact, and unlock value.
For more news, commentary, and industry perspectives, visit: https://www.xbpglobal.com/
And please follow us on social:
X: https://X.com/XBPglobal
LinkedIn: https://www.linkedin.com/company/xbpglobal/
The information posted on XBP Global’s website and/or via its social media accounts may be deemed material to investors. Accordingly, investors, media and others interested in XBP Global should monitor XBP Global’s website and its social media accounts in addition to XBP Global’s press releases, SEC filings and public conference calls and webcasts.
Investor Relations: investors@xbpglobal.com | Media Queries: press@xbpglobal.com
XBP Global Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of June 30, 2026 (Successor) and December 31, 2025 (Successor)
(in thousands of United States dollars except share and per share amounts)
| | Successor | ||||
| | Consolidated | ||||
| | June 30, | | | ||
| | 2026 | | December 31, | ||
Assets | | | | | | |
Current assets | | | | | | |
Cash and cash equivalents | | $ | 18,579 | | $ | 37,113 |
Restricted cash | |
| 9,380 | |
| 31,553 |
Accounts receivable, net of allowance for credit losses of $3,826 and $5,660, respectively | | | 129,417 | | | 130,281 |
Related party receivables and prepaid expenses | | | 980 | | | 736 |
Inventories, net | | | 11,204 | | | 11,365 |
Assets held for sale | | | 2,340 | | | — |
Prepaid expenses and other current assets | | | 24,876 | | | 28,699 |
Total current assets | |
| 196,776 | |
| 239,747 |
Property, plant and equipment, net of accumulated depreciation of $19,155 and $11,094, respectively | | | 72,504 | | | 82,956 |
Operating lease right-of-use assets, net | | | 26,386 | | | 30,339 |
Goodwill | | | 189,881 | | | 189,881 |
Intangible assets, net | | | 325,628 | | | 344,080 |
Other noncurrent assets | |
| 16,594 | |
| 15,094 |
Total assets | | $ | 827,769 | | $ | 902,097 |
| | | | | | |
Liabilities and Stockholders' Equity | |
| | |
| |
Liabilities | |
| | |
| |
Current liabilities | | | | | | |
Current portion of long-term debt | | $ | 25,266 | | $ | 34,334 |
Accounts payable | | | 64,493 | | | 55,700 |
Related party payables | | | 3,748 | | | 5,343 |
Income tax payable | | | 5,848 | | | 6,158 |
Accrued liabilities | | | 50,729 | | | 47,101 |
Accrued compensation and benefits | | | 58,075 | | | 56,314 |
Accrued interest | | | 9,803 | | | 13,685 |
Customer deposits | | | 18,354 | | | 21,691 |
Deferred revenue | | | 13,285 | | | 11,881 |
Obligation for claim payment | | | 44,086 | | | 55,632 |
Current portion of finance lease liabilities | | | 4,147 | | | 4,390 |
Current portion of operating lease liabilities | | | 10,104 | | | 9,814 |
Total current liabilities | |
| 307,938 | |
| 322,043 |
Long-term debt, net of current maturities | | | 347,642 | | | 353,267 |
Finance lease liabilities, net of current portion | | | 5,252 | | | 6,857 |
Net defined benefit liability | | | 7,611 | | | 6,241 |
Deferred income tax liabilities | | | 47,527 | | | 52,595 |
Long-term income tax liabilities | | | 9,395 | | | 10,554 |
Operating lease liabilities, net of current portion | | | 18,369 | | | 22,530 |
Other long-term liabilities | | | 37,571 | | | 40,671 |
Total liabilities | | | 781,305 | | | 814,758 |
Commitments and Contingencies (Note 9) | |
| | |
| |
| | | | | | |
Stockholders' Equity | |
| | |
| |
Common stock, par value of $0.0001 per share; 400,000,000 shares authorized; 11,778,409 shares issued and outstanding as of June 30, 2026 and 11,755,434 shares issued and outstanding as of December 31, 2025 | | | 12 | | | 12 |
Preferred stock, par value of $0.0001 per share; 20,000,000 shares authorized; none issued and outstanding as of June 30, 2026 and December 31, 2025 | | | — | | | — |
Additional paid in capital | | | 438,912 | | | 437,995 |
Accumulated deficit | | | (394,589) | | | (351,123) |
Accumulated other comprehensive profit: | | | | | | |
Foreign currency translation adjustment | | | 534 | | | (1,263) |
Unrealized pension actuarial gains, net of tax | | | 1,595 | | | 1,718 |
Total accumulated other comprehensive profit | | | 2,129 | | | 455 |
Total stockholders' equity | | | 46,464 | | | 87,339 |
Total liabilities and stockholders' equity | | $ | 827,769 | | $ | 902,097 |
XBP Global Holdings, Inc. and Subsidiaries
Condensed Consolidated and Combined Statements of Operations
For the three and six months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor)
(in thousands of United States dollars except share and per share amounts)
(Unaudited)
| | Successor | | | Predecessor | ||||||||
| | Consolidated | | | Combined and Consolidated | ||||||||
| | Three Months | | Six Months | | | Three Months | | Six Months | ||||
| | 2026 | | 2026 | | | 2025 | | 2025 | ||||
Revenue | | $ | 191,311 | | $ | 388,396 | | | $ | 182,164 | | $ | 372,660 |
Related party revenue | | | — | | | — | | | | 548 | | | 2,032 |
Cost of revenue (exclusive of depreciation and amortization) | |
| 150,155 | |
| 302,052 | | | | 145,052 | |
| 295,697 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | |
| 27,936 | |
| 70,751 | | | | 20,719 | | | 42,980 |
Depreciation and amortization | |
| 15,268 | |
| 30,117 | | | | 8,582 | | | 19,120 |
Related party expense, net | |
| 1,674 | |
| 4,280 | | | | 2,793 | | | 5,346 |
Operating profit (loss) | |
| (3,722) | |
| (18,804) | | | | 5,566 | | | 11,549 |
Other expense (income), net: | |
| | |
| | | | | | | | |
Interest expense, net | |
| 13,890 | |
| 27,959 | | | | 46,942 | | | 70,721 |
Debt modification and extinguishment costs, net | |
| — | |
| — | | | | 12 | | | 121 |
Sundry expense, net | |
| 1,409 | |
| 1,017 | | | | 693 | | | 2,005 |
Other income, net | |
| (561) | |
| (1,122) | | | | (25) | | | (48) |
Loss before reorganization items and income taxes | |
| (18,460) | |
| (46,658) | | | | (42,056) | | | (61,250) |
Reorganization items, net | |
| — | |
| — | | | | 22,505 | | | (38,340) |
Loss before income taxes | |
| (18,460) | |
| (46,658) | | | | (64,561) | | | (22,910) |
Income tax expense (benefit) | |
| (1,756) | |
| (3,191) | | | | 500 | | | 2,528 |
Net Loss | | $ | (16,704) | | $ | (43,467) | | | $ | (65,061) | | $ | (25,438) |
Net loss per common share | | | | | | | | | | | | | |
Basic and diluted | | | (1.42) | | | (3.69) | | | | | | | |
XBP Global Holdings, Inc. and Subsidiaries
Condensed Consolidated and Combined Statements of Cash Flows
For the six months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor)
(in thousands of United States dollars except share and per share amounts)
(Unaudited)
| | Successor | | | Predecessor | ||
| | | | | Combined and | ||
| | Six Months Ended | | | Six Months Ended | ||
| | 2026 | | | 2025 | ||
Cash flows from operating activities | | | | | | | |
Net Loss | | $ | (43,467) | | | $ | (25,438) |
Adjustments to reconcile net loss to cash used in operating activities | | | | | | | |
Depreciation and amortization | | | 30,117 | | | | 19,120 |
Original issue discount, debt premium and debt issuance cost amortization | | | 3,056 | | | | (14,669) |
Reorganization items, net | | | — | | | | (81,383) |
Interest on BR Exar AR Facility | | | — | | | | (2,399) |
Debt modification and extinguishment loss (gain), net | | | — | | | | 121 |
Provision for credit losses | | | (1,527) | | | | (180) |
Deferred income tax provision | | | (5,149) | | | | 375 |
Equity-based compensation expense | | | 1,017 | | | | 204 |
Unrealized foreign currency loss (gain) | | | 1,564 | | | | (76) |
Loss (gain) on sale of assets | | | 381 | | | | (9) |
Payment-in-kind interest | | | 2,975 | | | | 20,860 |
Change in operating assets and liabilities, net of effect from acquisitions | | | | | | | |
Accounts receivable | | | 2,409 | | | | (27,073) |
Prepaid expenses and other current assets | | | 2,230 | | | | (2,734) |
Accounts payable and accrued liabilities | | | (6,797) | | | | 36,075 |
Related party receivables (payables) | | | (1,839) | | | | 1,483 |
Additions to outsourced contract costs | | | (156) | | | | (140) |
Net cash used in operating activities | | | (15,186) | | | | (75,863) |
| | | | | | | |
Cash flows from investing activities | | | | | | | |
Purchase of property, plant and equipment | | | (2,415) | | | | (2,238) |
Additions to internally developed software | | | (1,002) | | | | (1,006) |
Proceeds from sale of assets | | | 84 | | | | 3 |
Net cash used in investing activities | | | (3,333) | | | | (3,241) |
| | | | | | | |
Cash flows from financing activities | | | | | | | |
Cash paid for debt issuance costs | | | (2,453) | | | | (222) |
Cash paid for withholding taxes on vested RSUs | | | (100) | | | | — |
Principal payments on finance lease obligations | | | (2,446) | | | | (2,689) |
Borrowings from other loans | | | 20,823 | | | | 3,275 |
Proceeds from Issuance of July 2030 Notes | | | 870 | | | | — |
Proceeds from Super Senior Term Loan | | | 10,000 | | | | — |
Proceeds from ABL Facility | | | 272,800 | | | | — |
Repayments on ABL Facility | | | (289,124) | | | | — |
Repayment of Second Lien Note | | | (6,250) | | | | — |
Proceeds from DIP New Money Loans | | | — | | | | 80,000 |
Borrowing under BR Exar AR Facility | | | — | | | | 15,775 |
Repayments under BR Exar AR Facility | | | (1,440) | | | | (22,862) |
Borrowing under Amended BR Exar AR Facility | | | 24,625 | | | | — |
Repayments under Amended BR Exar AR Facility | | | (18,986) | | | | — |
Repayments on 2028 Term Loan Facilities | | | (1,628) | | | | — |
Principal repayments on senior secured term loans and other loans | | | (28,450) | | | | (13,078) |
Net cash provided by (used in) financing activities | | | (21,759) | | | | 60,199 |
Effect of exchange rates on cash, restricted cash and cash equivalents | | | (429) | | | | 113 |
Net decrease in cash, restricted cash and cash equivalents | | | (40,707) | | | | (18,792) |
Cash, restricted cash and cash equivalents | | | | | | | |
Beginning of period | | | 68,666 | | | | 64,067 |
End of period | | $ | 27,959 | | | $ | 45,275 |
Supplemental cash flow data: | | | | | | | |
Income tax payments, net of refunds received | | $ | 3,018 | | | $ | 2,914 |
Interest paid | | | 24,147 | | | | 9,024 |
Cash paid for reorganization items | | | — | | | | 43,043 |
Noncash investing and financing activities: | | | | | | | |
Assets acquired through right-of-use arrangements | | | 2,711 | | | | 9,600 |
Amounts reclassified from property, plant, and equipment to fixed assets held-for-sale | | | 2,340 | | | | — |
Accrued capital expenditures | | | 321 | | | | 163 |
Reconciliation of Revenue and Gross Profit As Reported to Combined Pro Forma Revenue and Pro Forma Adjusted Gross Profit for the Three and Six Months Ended June 30, 2026 and June 30, 2025
(in thousands of United States dollars)
(Unaudited)
| | Three Months Ended | | Six Months Ended |
| ||||||||
| | June 30, | | June 30, | | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | | ||||
As Reported Revenues | | $ | 191,311 | | $ | 182,712 | | $ | 388,396 | | $ | 374,692 | |
Intercompany Eliminations | | | — | | | (1,022) | | | — | | | (2,648) | |
Revenue Adjusted for XBP Europe | | | — | | | 40,819 | | | — | | | 80,149 | |
Pro Forma Revenue | | $ | 191,311 | | $ | 222,508 | | $ | 388,396 | | $ | 452,193 | |
| | | | | | | | | | | | | |
As Reported Cost of Revenue | | $ | 150,155 | | $ | 145,052 | | $ | 302,053 | | $ | 295,696 | |
Intercompany Eliminations | | | — | | | (374) | | | — | | | (568) | |
Cost of Revenue Adjustment for XBP Europe | | | — | | | 31,723 | | | — | | | 59,966 | |
Pro Forma Cost of Revenue | | $ | 150,155 | | $ | 176,401 | | $ | 302,053 | | $ | 355,094 | |
| | | | | | | | | | | | | |
As Reported Gross Profit | | $ | 41,156 | | $ | 37,660 | | $ | 86,343 | | $ | 78,996 | |
Intercompany Eliminations | | | — | | | (648) | | | — | | | (2,080) | |
Gross Profit Adjustment for XBP Europe | | | — | | | 9,096 | | | — | | | 20,183 | |
Pro Forma Gross Profit | | $ | 41,156 | | $ | 46,107 | | $ | 86,343 | | $ | 97,098 | |
Pro Forma Gross Margin | | | 21.5 | % | | 20.7 | % | | 22.2 | % | | 21.5 | % |
| | | | | | | | | | | | | |
Pro Forma Gross Profit | | $ | 41,156 | | $ | 46,107 | | $ | 86,343 | | $ | 97,098 | |
Severance | | | 5,944 | | | 505 | | | 7,052 | | | 1,320 | |
Restructuring and related expenses | | | 452 | | | — | | | 458 | | | — | |
Cost of Revenue from Previously Discontinued Operations | | | 154 | | | 2,243 | | | 154 | | | 2,314 | |
Adjusted Gross Profit (non-GAAP) | | $ | 47,706 | | $ | 48,855 | | $ | 94,007 | | $ | 100,732 | |
Adjusted Gross Margin (non-GAAP) | | | 24.9 | % | | 22.0 | % | | 24.2 | % | | 22.3 | % |
Reconciliation of Net Income to Pro Forma Normalized EBITDA for the Three and Six Months Ended June 30, 2026 and June 30, 2025
(in thousands of United States dollars)
(Unaudited)
| | Three Months Ended | | Six Months Ended | ||||||||
| | June 30, | | June 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Net income (loss) | | $ | (16,704) | | $ | (65,061) | | $ | (43,467) | | $ | (25,438) |
XBP Europe Net Loss | | | — | | | (6,577) | | | — | | | (10,930) |
Pro Forma Net Income (Loss) | | $ | (16,704) | | $ | (71,638) | | $ | (43,467) | | $ | (36,368) |
Income tax expense | | | (1,756) | | | 1,014 | | | (3,191) | | | 3,804 |
Interest expense (income), net | | | 13,890 | | | 48,940 | | | 27,959 | | | 74,455 |
Depreciation and amortization | | | 15,268 | | | 9,223 | | | 30,117 | | | 20,417 |
Pro Forma EBITDA | | $ | 10,698 | | $ | (12,462) | | $ | 11,418 | | $ | 62,308 |
Severance | | | 6,835 | | | 943 | | | 8,162 | | | 2,596 |
Optimization and restructuring expenses (1) | | | 1,709 | | | 1,075 | | | 4,440 | | | 3,900 |
Restructuring and related expenses (2) | | | 821 | | | — | | | 1,085 | | | — |
Non-cash equity compensation (3) | | | 533 | | | 523 | | | 1,017 | | | 4,445 |
EBITDA from Previously Discontinued Operations (4) | | | 505 | | | 1,825 | | | 505 | | | 2,634 |
Foreign exchange losses, net | | | 347 | | | (311) | | | 1,093 | | | (382) |
Reorganization items | | | 322 | | | 22,505 | | | 8,938 | | | (38,340) |
Loss (gain) on sale of assets (5) | | | 156 | | | — | | | 381 | | | — |
Changes in fair value of warrant liability | | | (2) | | | — | | | (2) | | | 2 |
Transaction fees | | | — | | | 4,880 | | | 481 | | | 4,903 |
DMR Related write-off | | | — | | | 1,209 | | | — | | | 1,209 |
Payroll tax penalties | | | — | | | 19 | | | — | | | 2,789 |
Debt modification and extinguishment costs (gain), net | | | — | | | 12 | | | — | | | 121 |
Pro Forma Normalized EBITDA | | $ | 21,924 | | $ | 20,219 | | $ | 37,518 | | $ | 46,185 |
| (1) | Represents the annualized run-rate cost savings from optimization and restructuring initiatives implemented during the period. These adjustments reflect the impact as if such cost savings had been realized for the entire period presented. |
| (2) | Represents one-time costs associated with restructuring, including professional and legal fees |
| (3) | Represents non-cash charges related to stock-based compensation |
| (4) | Represents loss related to discontinued operations |
| (5) | Represents a loss/(gain) recognized on the disposal of property, plant, and equipment and other assets |
Source: XBP Global Holdings, Inc.