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…
Earnings analysis · 10-Q
YSS earnings analysis
Filed August 13, 2026 · Our reading of the company's report
The latest report
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…
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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.
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.
Reported figures
- Earnings per share
- $-0.31
What stood out
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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.
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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.
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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.
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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.
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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.
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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.
What to watch
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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.
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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.
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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.
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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.
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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.
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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.
Management's outlook
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.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.