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…
Earnings analysis · 10-Q
CVU earnings analysis
Filed August 13, 2026 · Our reading of the company's report
The latest report
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…
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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.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.05
- 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 stood out
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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.
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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.
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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.
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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.
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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.
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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.
What to watch
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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.
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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.
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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.
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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.
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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.
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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.
Management's outlook
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.
Earlier filings 2
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 itself. Analysis can contain errors; check the source document for full context.