YSS earnings analysis
What we found in YSS'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
York delivered Q2 revenue of $92.547 million, up 10% year over year but down from $116 million in Q1, while gross margin improved to 24% from 11% a year earlier. Profitability remained weak: diluted EPS was negative $0.31, operating loss was $41.313 million and net loss increased to $39.343 million. Operating cash outflow reached $186.637 million in the first half, although IPO proceeds lifted cash to $534.0 million. The sharp reduction in full-year revenue guidance to $375 million-$405 million and the unresolved revenue-recognition material weakness outweigh the improved margin and backlog trends.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue grew year over year
- Q2 revenue was $92.547 million, up $8.708 million, or 10%, from $83.839 million in Q2 2025, but down from $116 million in Q1 2026. Management attributed the year-over-year increase to recently acquired businesses and higher ground-services revenue.
- Gross margin expanded materially
- Gross profit increased 133% to $22.180 million from $9.526 million, and gross margin expanded to 24% from 11% in Q2 2025 and 19% in Q1 2026. The improvement primarily reflected lower unfavorable EAC adjustments, which were $(439,000) versus $(13.812 million) year over year.
- Backlog reached $592.0 million
- Backlog increased to $592.049 million at June 30, 2026 from $542.557 million at December 31, 2025. Management expects to recognize over 55% of backlog as revenue within the next 12 months.
- IPO strengthened liquidity
- Cash and cash equivalents were $534.0 million at June 30, 2026, compared with $162.573 million at the beginning of the year, following $587.766 million of financing cash flow that included IPO proceeds. Financial debt was $148.1 million and the $150.0 million revolving facility was undrawn.
- IDIQ wins support future pipeline
- The company won three IDIQ contracts in Q2 2026 and another in Q3 2026, with two task orders awarded to date. Management believes these initial task orders could lead to more significant task orders in 2027.
- Cash burn remained substantial
- Operating cash flow was negative $186.637 million for the six months ended June 30, 2026, while investing cash flow was negative $29.738 million, primarily due to acquisitions of Orbion and Solestial. Cash use was driven by increases in accounts receivable, contract assets and inventories and a decrease in contract liabilities.
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.
- EPS miss and wider net loss
- Q2 diluted EPS was negative $0.31 versus the $0.13 loss expected, and net loss widened 62% year over year to $39.343 million from $24.234 million. Loss from operations was $41.313 million, or 45% of revenue.
- Large guidance reduction
- Full-year 2026 revenue guidance was reduced to $375 million-$405 million from $545 million-$595 million, a reduction of $170 million-$220 million at the range endpoints. Management cited the shift from expected large awards to smaller program-specific bills, continuing resolutions and IDIQ on-ramps.
- Operating cash burn and funding risk
- Operating cash flow used $186.637 million in the first six months of 2026, versus $99.822 million in the prior-year period. The company reported an accumulated deficit of $423.2 million and stated that future funding depends on successful execution and operating results.
- Material weakness remains
- Disclosure controls were ineffective as of June 30, 2026 because a material weakness in identifying the correct measure of progress for over-time revenue recognition had not been remediated. Management stated that the new controls had not been in place for a sustained period sufficient to test effectiveness.
- Revenue covenant sensitivity
- The credit agreement requires minimum trailing-twelve-month revenue of $264,387,082 at June 30, 2026 and $319,190,794 at September 30, 2026, plus minimum liquidity of $105.0 million. Although the company reported compliance at June 30, 2026, weaker revenue and cash burn increase covenant sensitivity.
- T1DES program scope reduced
- The SDA shifted priorities away from T1DES and descoped the planned launch of the remaining constellation. Although management does not currently anticipate a material financial impact, negotiations regarding implementation remain ongoing.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $-0.31
- Gross margin
- 24%
- Operating margin
- -45%
What they said about what is next.
Full-year 2026 revenue guidance was lowered to $375 million-$405 million from the prior $545 million-$595 million outlook, primarily because expected new-business revenue was removed amid shifts in U.S. government acquisition methodologies.
The filing reads worse than the one before it.
What came before.
- 10-Q · May 14, 2026
- York Space Systems Inc. reported a 9% increase in Q1 2026 revenue, reaching $116.3 million, while EPS came in at $0.0, slightly above expectations. Despite facing higher operating expenses and a significant net loss of…
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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