SGRP earnings analysis
What we found in SGRP'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
SPAR Group produced a materially better second quarter, with $409,000 of net income, $0.02 diluted EPS, $1.209 million of operating income and $2.139 million of adjusted EBITDA. However, revenue fell 4.5% year over year because of lower U.S. remodel volume, gross margin contracted 70 basis points to 22.8%, and first-half operating cash flow remained negative $8.7 million. Canada’s 29.4% revenue growth and SG&A savings were constructive, but liquidity reliance, covenant exposure, material control weaknesses and newly disclosed shareholder litigation support a neutral outlook.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue Declined on Lower Remodel Volume
- Second-quarter revenue was $36.906 million, down $1.723 million, or 4.5%, from $38.629 million in the prior-year quarter. Management attributed the decline primarily to lower remodel-business volume.
- Operating Profitability Improved
- Gross margin was 22.8% versus 23.5% a year earlier, a 70-basis-point decline. Operating income increased 69.1% to $1.209 million from $0.715 million, lifting operating margin to approximately 3.3% from 1.9%.
- Quarter Returned to Profitability
- Net income was $409,000 compared with a $1,000 net loss in the prior-year quarter, and diluted EPS was $0.02. Adjusted EBITDA increased to $2.139 million from $1.313 million.
- Canada Growth Partly Offset U.S. Decline
- Canada revenue grew $1.0 million, or 29.4%, to $4.4 million, driven by merchandising services. This partly offset the $2.7 million, or 7.7%, decline in U.S. revenue to $32.5 million.
- Cost Savings Supported Margins
- SG&A declined 14.7% to $6.767 million from $7.934 million, with SG&A as a percentage of revenue improving to 18.3% from 20.5%. Management attributed the reduction to implemented cost-savings measures.
- Operating Cash Burn Improved
- Six-month operating cash flow remained negative at $8.7 million, although this improved from $11.9 million of cash used in the prior-year period. Investing cash use was approximately $1.0 million, while financing provided approximately $9.4 million.
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.
- Continued Operating Cash Burn
- Operating cash flow was negative $8.7 million for the first six months, while investing activities used approximately $1.0 million. The company also received $3.0 million under an unsecured promissory note, indicating reliance on financing to support liquidity.
- Liquidity and Covenant Exposure
- Management says liquidity is expected to be sufficient over the next 12 months, but warns that delayed collection from major clients, a significant reduction in client business or an economic downturn could materially affect cash resources and the ability to fund operations. The company is subject to financial covenants under various credit facilities.
- New Shareholder Litigation
- A new shareholder derivative action was filed on June 5, 2026, amended on July 24, 2026, and followed by an arbitration action on July 30, 2026. The company states it cannot estimate any reasonably possible loss and warns of substantial costs, management distraction and potential adverse effects on its business and financial condition.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.02
- Gross margin
- 22.8%
- Operating margin
- 3.3%
- Segment
- U.S.: $32.5 million revenue, down 7.7% year over year from $35.2 million
- Segment
- Canada: $4.4 million revenue, up 29.4% year over year from $3.4 million
What they said about what is next.
The 10-Q does not provide quantitative revenue or EPS guidance. Management states that cash availability should be manageable and sufficient to support working capital and capital expenditure requirements over the next 12 months, subject to customer collections, business volume and economic conditions.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 12, 2026
- SPAR Group, Inc. reported Q1 2026 net revenues of $30.5 million, reflecting a 10.3% decrease year-over-year, and a net loss of $0.39 per share, missing analyst expectations. While gross margins improved slightly to…
- 10-K · March 31, 2026
- SPAR Group positions itself as a North America–focused merchandising and brand marketing services provider with a three‑part strategy to grow the core business, introduce/acquire new services, and invest in technology…
- 10-Q · August 14, 2025
- SPAR Group reported Q2 (three months ended June 30, 2025) net revenues of $38,629,000, down $4.8M (-11.0%) versus Q2 2024 but up roughly $4.6M (+13.5%) versus Q1 2025. Gross margin expanded to 23.5% and the company…
- 10-Q · May 15, 2024
- SPAR Group reported quarterly revenues of $68,693 (in thousands) for the three months ended March 31, 2024, up $4,313 from $64,380 in the year‑ago quarter, and reported diluted EPS of $0.28 versus $0.04 a year earlier.…
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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