CVU earnings analysis
What we found in CVU's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
CPI Aerostructures delivered a meaningful year-over-year turnaround in Q2 2026, with revenue up 15.8%, gross margin rising to 22.0%, operating income of $1,195,785, and diluted EPS of $0.05. Growth was concentrated in military subcontract programs, while prime government and commercial revenue contracted and gross margin declined sequentially from 25.8%. The principal concern is liquidity: first-half operating cash flow and calculated free cash flow were negative, cash fell to $835,875, and borrowings rose to $19,111,172 despite reported profitability.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue growth accelerated
- Q2 2026 revenue increased 15.8% year over year to $17,581,532 from $15,179,108, and rose from $17,359,940 in Q1 2026. Management attributed growth primarily to the RTX MPBD Missile Wing, NGJ Mid-Band/Advanced Tactical Pods, and NGJ Low-Band Pods programs.
- Gross margin remains substantially improved
- Gross margin expanded to 22.0% from 4.4% a year earlier, a 1,760-basis-point improvement, but declined from 25.8% in Q1 2026. Gross profit increased 483.6% year over year to $3,871,737.
- Return to operating profitability
- Operating income was $1,195,785, or a 6.8% operating margin, versus an operating loss of $(1,990,642), or negative 13.1%, in Q2 2025. SG&A was broadly stable at $2,675,952 versus $2,654,024.
- EPS turned positive
- Diluted EPS improved to $0.05 from $(0.10) in Q2 2025, although it declined from $0.09 in Q1 2026. Net income was $685,615 versus a net loss of $(1,324,959) in the prior-year quarter.
- Defense subcontract mix drove growth
- Military subcontract revenue grew 25.1% to $15,340,158 from $12,266,475, while prime government revenue fell 46.4% to $716,367 and commercial revenue declined 3.3% to $1,525,007. The company operates as one reportable segment.
- Backlog expanded
- Total backlog increased to $533,136,000 from $504,522,000 at December 31, 2025, including funded backlog of $100,033,000. Approximately 95% of total backlog was attributable to government and military contractor contracts.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Earnings have not converted to cash
- Operating cash flow remained negative at $(425,705) for the first six months of 2026, while calculated free cash flow was $(486,244) after $60,539 of capital expenditures. Accounts receivable increased $4,159,175 in the period, absorbing cash despite reported net income of $1,922,333.
- Low cash and increased borrowings
- Cash declined 7.0% to $835,875 from $899,199 at December 31, 2025, while total borrowings under the credit facilities increased to $19,111,172 from $18,373,672. The revolver balance rose to $9,173,672 from $8,373,672.
- Working-capital funding exposure
- Contract assets remained elevated at $34,278,512 versus $33,670,354 at year-end, and contract liabilities increased to $2,970,578 from $1,628,382. Management cautioned that reported earnings and actual cash receipts can diverge materially and that additional borrowing may be required.
- Contract estimate volatility persists
- Q2 included a net unfavorable estimate adjustment of $676,503, primarily related to the Embraer Phenom-300 Engine Inlet Assemblies and Sikorsky UH60 Gunner Windows programs. These adjustments reflect contract-level risks involving labor productivity, material costs, schedules, funding, and customer-directed delays.
- Customer and program concentration
- Customer concentration increased: the two largest customers represented 53% and 10% of Q2 revenue, while 38% and 36% of accounts receivable were owed by two largest customers at June 30, 2026. Substantially all backlog is subject to termination at will and rescheduling without significant penalty.
- Tariff and cash-counterparty exposure
- The filing states there were no material changes to the risk factors in the 2025 Form 10-K. It nevertheless newly quantifies tariff exposure: future procurements may increase raw-material and subassembly costs, potentially reducing profitability on fixed-price contracts; the company also held $458,011 of uninsured cash balances.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.05
- Gross margin
- 22.0%
- Operating margin
- 6.8%
- Segment
- Single operating and reportable segment: $17,581,532 revenue for Q2 2026; government subcontracts $15,340,158, prime government contracts $716,367, and commercial contracts $1,525,007.
What they said about what is next.
No quantitative revenue or EPS guidance was provided. Management stated that existing resources are expected to be sufficient to meet current working capital needs for at least the next 12 months from the June 30, 2026 financial statement issuance date.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 15, 2026
- CPI Aerostructures, Inc. (CVU) reported a Q1 2026 revenue increase of 12.7% to $17.4 million compared to $15.4 million in the previous year. Earnings per share improved to $0.10 from a loss of $0.10, reflecting a…
- 10-K · April 29, 2026
- CPI Aerostructures Inc. (CVU) experienced revenue fluctuations over the past year, with Q4 2025 revenue at $19M and a gross margin of 20.3%. The company reported an EPS of $0.05 in its latest quarter and had been…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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