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MT

MIND TECHNOLOGY, INC (MIND)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY2026 revenue rose to $13.6M (+72% q/q, +35% y/y) with gross margin at ~50%, returning the company to profitability; Adjusted EBITDA was $3.1M .
  • EPS was $0.24 vs S&P Global consensus of $0.19, and revenue beat $12.1M consensus with $13.6M actual; both had one published estimate, implying a modest but meaningful beat in a thinly covered name [GetEstimates]*.
  • Backlog declined sequentially to $12.8M from $21.1M given heavy system deliveries and summer order timing, but management flagged two imminent orders totaling ~$10M and a strong pipeline; aftermarket mix reached ~68% of first-half revenue, supporting margins .
  • Tactical capital flexibility: established a $25M ATM and $4M buyback authorization; management framed this as dual-track optionality for acquisitions or repurchases to enhance shareholder value .
  • Near-term narrative catalysts: confirmation of pending orders, evidence of Huntsville capacity-driven aftermarket growth, and clarity on FY2026 trajectory (“similar to FY2025”) with a goal of positive adjusted EBITDA and profitability in remaining quarters .

What Went Well and What Went Wrong

What Went Well

  • Strong execution and profitability: revenue $13.6M, operating income $2.7M, net income $1.9M, Adjusted EBITDA $3.1M; gross margin ~50% aided by aftermarket mix and cost optimization .
  • Aftermarket momentum: management highlighted aftermarket revenue accounting for ~68% of first-half revenues, often at higher margins due to lower discounting, supported by Huntsville expansion .
  • Strategic optionality: ATM ($25M) and buyback ($4M) programs established for flexible capital deployment and potential tuck-in acquisitions; reiterated clean, debt-free balance sheet and working capital of ~$25.1M, cash ~$7.8M .

Quotes:

  • “We resumed our cadence of positive Adjusted EBITDA and profitability...” .
  • “After-market activities accounted for about 68% of our revenues in the first six months...” .
  • “The ATM facility enables us to raise capital… Conversely… buying our own stock is the best use of our capital.” .

What Went Wrong

  • Backlog down sequentially: firm order backlog fell to $12.8M from $21.1M with summer pauses and deliveries; management cited decision-making delays and macro uncertainty .
  • Order timing volatility: Q1 shipment deferrals (~$5.5M) pushed into Q2; investors probed backlog math variances, underscoring lumpy system deliveries and aftermarket order accounting .
  • Elevated OpEx and seasonality: SG&A increased to ~$3.6M, with Q1 non-recurring UK restructuring and tax analysis costs impacting prior quarter; margin gains rely on sustained mix/efficiency .

Financial Results

MetricQ4 2025Q1 2026Q2 2026
Revenue ($USD)$15.044M $7.902M $13.561M
Diluted EPS ($USD)$0.25 $(0.12) $0.24
Gross Profit Margin %43.5% (GP $6.550M / Rev $15.044M) 42% (CFO) 50% (CFO)
Operating Income ($USD)$2.782M $(0.658)M $2.664M
Net Income ($USD)$2.031M $(0.970)M $1.929M
EBITDA ($USD)$2.922M $(0.451)M $2.816M
Adjusted EBITDA ($USD)$3.017M $(0.179)M $3.097M

Actual vs S&P Global Consensus (Q2 2026):

MetricQ2 2026
Revenue Actual ($USD)$13.561M
Revenue Consensus Mean ($USD)$12.080M*
Primary EPS Actual ($USD)$0.24
Primary EPS Consensus Mean ($USD)$0.19*
Revenue - # of Estimates1*
Primary EPS - # of Estimates1*

Values marked with * retrieved from S&P Global.

Segment/KPI snapshot:

KPIQ4 2025Q1 2026Q2 2026
Firm Order Backlog ($USD)$16.2M (as of 1/31/25) $21.1M (as of 4/30/25) $12.8M (as of 7/31/25)
Aftermarket Mix (% of revenue)—~71% (Q1 commentary) ~68% (first half)
Cash and Equivalents ($USD)$5.336M $9.172M ~$7.832M
Working Capital ($USD)—~$22.8M ~$25.1M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDAFY2026 (rest of year)Expect positive Adj. EBITDA and profitability in Q2 and remainder of year Expect positive Adj. EBITDA and profitability in each remaining quarters and full year Raised specificity (quarterly + full-year)
Revenue Growth TrajectoryFY2026Anticipated improved results; shipment timing can impact quarters FY2026 results “similar to FY2025”; growth likely high-single-digit/low-double-digit depending on timing Calibrated to steadier growth vs prior year
Backlog/OrdersNear-termBacklog $21.1M; GunLink order >$4M expected in FY Backlog $12.8M; two imminent orders totaling ~$10M not yet in backlog Visibility reinforced despite sequential decline
Capital AllocationOngoingShelf registration planned $25M ATM and $4M buyback authorized (through Aug 2027) Added dual-track optionality

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2025, Q1 2026)Current Period (Q2 2026)Trend
Order Timing/BacklogQ1: ~$5.5M shipments deferred; backlog $21.1M; GunLink order >$4M expected Backlog $12.8M after heavy deliveries; two ~$10M imminent orders; summer pauses typical Timing volatility persists; pipeline strong
Aftermarket MixHistorically ~40%; Q1 ~71% due to deferrals First half ~68%; higher margins; supported by Huntsville expansion Structurally higher aftermarket contribution
Gross MarginQ1 gross margin ~42% Q2 gross margin ~50% on mix and efficiencies Improving on mix/scale
Macro/TariffsLimited direct U.S. tariff exposure; 95% revenue ex-U.S. Customers cautious; some seismic softness; offshore wind mixed; long-term bullish Near-term caution, long-term constructive
Huntsville FacilityExpansion capex ~$500K; revenue ramp “several million” potential Positioned to support repairs/manufacturing; U.S. production aids NOL usage Capacity online; ramping through FY26
Capital StrategyShelf planned ATM $25M and buyback $4M established Execution-ready optionality
Tuck-in AcquisitionsExploring scale options Target additive, low-risk tuck-ins (products/divisions) Active evaluation continues

Management Commentary

  • “We resumed our cadence of positive Adjusted EBITDA and profitability… We also generated improved Seamap revenues driven by systems sales and the growing contributions from our after-market activities.” .
  • “There are two orders in particular totaling about $10 million that we believe are imminent… These orders are not in our backlog, but we are highly confident that they will be received soon.” .
  • “Barring any unforeseen circumstances, we expect to achieve positive adjusted EBITDA and profitability in each of the remaining quarters of fiscal 2026 and on a full-year basis.” .
  • “The ATM facility enables us to raise capital… Conversely… buying our own stock is the best use of our capital.” .
  • “We continue to have a differentiated and market leading suite of products, a clean capital structure and strong balance sheet.” .

Q&A Highlights

  • Aftermarket magnitude: Analyst gauged parts/services at ~$7M in Q2; management indicated “ballpark,” highlighting upward trend and Huntsville ramp through year-end and into next year .
  • Backlog reconciliation: Questions on variance from $21.1M to $12.8M; management cited summer pauses, delivery timing, and aftermarket orders flowing through backlog at times—no cancellations .
  • Capital programs: Clarified rationale for simultaneous ATM and buyback—preparedness to pursue acquisitions or repurchase shares based on opportunity and valuation discipline .
  • Growth cadence: Investor inferred high single-digit to low double-digit FY growth; management agreed but cautioned quarterly lumpiness due to deliveries .
  • Strategic initiatives/NOLs: U.S. facility expansion supports revenue generation domestically, aiding utilization of U.S. tax attributes; exploring additive partnerships/products, including maritime security applications .

Estimates Context

  • Q2 FY2026 results versus S&P Global consensus: Revenue $13.561M vs $12.080M*, EPS $0.24 vs $0.19*; both had one estimate, indicating thin coverage and higher variance risk [GetEstimates]* .
  • Implications: Consensus should move higher on gross margin trends (~50%) and aftermarket mix, but backlog timing and macro caution may temper the pace of upward revisions .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Mix-driven margin upside: Aftermarket at ~68% of first-half revenues and Huntsville capacity support gross margins around 50% near term; watch mix as a key driver of profitability .
  • Order timing remains lumpy: Sequential backlog decline reflects deliveries and seasonal pauses; two ~$10M imminent orders could re-accelerate the booking cadence .
  • Capital flexibility is a catalyst: ATM ($25M) and buyback ($4M) introduce optionality for strategic moves and shareholder returns; monitor potential tuck-ins and repurchase activity .
  • FY2026 profile: Management now targets positive adjusted EBITDA and profitability each remaining quarter and full-year, with growth “similar to FY2025”—expect steadier but less explosive top-line versus last year .
  • Focus on execution: Cost optimization and production efficiencies underpin margin stability; sustained spare parts/service demand should offset system delivery lumpiness .
  • Watch macro signals: Customer caution and seismic softness can delay commitments; long-term marine exploration and global projects (wind, rare earths) remain constructive .
  • Near-term trading: Be alert to order announcements, margin confirmation, and any buyback activity—these are likely stock-moving events in a thinly covered micro-cap with improving fundamentals .