Sign in

You're signed outSign in or to get full access.

WC

WIDEPOINT CORP (WYY)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $38.0M with gross margin of 14% (33% ex-carrier services); net loss was $0.62M or $(0.06) EPS; adjusted EBITDA was $0.18M and free cash flow was $0.09M .
  • Revenue missed S&P Global consensus ($39.93M) by ~$2.05M; EPS consensus was 0.00 across 2 estimates, versus actual $(0.06), implying a miss; timing of DaaS wins and pipeline slippage drove the variance* [Values retrieved from S&P Global].
  • FY2025 guidance (Revenue $154–$163M, Adj. EBITDA $2.8–$3.0M, FCF $2.4–$2.6M, goal positive EPS) remains in place from Q1; management emphasized H2 momentum with first DaaS contract signed in July .
  • Catalysts: DHS CWMS 3.0 recompete positioning (incumbency, FedRAMP ITMS), continued Navy Spiral 4 task orders, and commercial DaaS ramp; backlog stood at ~$265M entering H2 .

What Went Well and What Went Wrong

What Went Well

  • “We secured our first DaaS contract in July…an important milestone…beginning of a broader momentum shift heading into the second half of the year,” underscoring H2 revenue visibility in commercial managed services .
  • Backlog remained strong at ~$265M as of June 30, providing revenue line-of-sight; segment mix supported ex-carrier gross margin at 33% .
  • Strategic partnerships broadened, including BroadSat (edge secure connectivity), ECA identity certificates for a top-tier aerospace & defense contractor, and a federal health research agency DaaS contract, strengthening pipeline breadth .

What Went Wrong

  • Revenue and EPS missed limited Street consensus; management cited shifted timing of several anticipated H1 opportunities, pushing conversion into H2/H1’26* [Values retrieved from S&P Global].
  • Profitability remained pressured: GAAP net loss $(0.62)M and modest adjusted EBITDA $0.18M; Q1 was also loss-making due to a one-time out-of-period ASC 606 adjustment impacting reselling revenue .
  • Operating cash generation still constrained; although Q2 unrestricted cash rose to $6.8M, billing delays with a major customer and incremental H2 investments for DaaS scale temper near-term FCF trajectory .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$37.7 $34.2 $38.0
Gross Margin (%)13% 14% 14%
Gross Margin ex-Carrier (%)36% 40% 33%
Net Income ($USD Millions)$(0.36) $(0.72) $(0.62)
Diluted EPS ($USD)$(0.04) $(0.08) $(0.06)
Adjusted EBITDA ($USD Millions)$0.63 $0.09 $0.18
Free Cash Flow ($USD Millions)$0.59 $0.07 $0.09
Unrestricted Cash ($USD Millions)$6.8 $3.7 $6.8

Segment breakdown:

Segment Revenue ($USD Millions)Q4 2024Q1 2025Q2 2025
Carrier Services$24.6 $22.4 $22.2
Managed Services Fees$9.4 $9.3 $9.2
Billable Services Fees$1.0 $1.8 $1.3
Reselling & Other$2.7 $0.79 (incl. $(2.7)M out-of-period) $5.1

KPIs:

KPIQ4 2024Q1 2025Q2 2025
Federal Contract Backlog ($USD Millions)~$290 $268 ~$265
Adjusted EBITDA Positive (quarters)30th consecutive 31st consecutive Continues positive

Estimates comparison (S&P Global):

MetricQ2 2025 ConsensusQ2 2025 Actual
Revenue ($USD)$39.93M*$37.88M*
Primary EPS ($USD)$0.00*$(0.06)
# of Estimates (Revenue / EPS)2 / 2*—

Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$154M–$163M $154M–$163M Maintained
Adjusted EBITDAFY 2025$2.8M–$3.0M $2.8M–$3.0M Maintained
Free Cash FlowFY 2025$2.4M–$2.6M $2.4M–$2.6M Maintained
EPSFY 2025Goal positive Goal positive Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
DHS CWMS 3.0 RecompeteFavorable positioning; ATO and FedRAMP status; confident to re-win RFI responded; incumbency; operational integration; visibility Emphasized incumbency, best-value approach; FedRAMP a differentiator Strengthening
Navy Spiral 4 Task OrdersInitial $2.5M base year, options to $25M; competing vs big 3 carriers +2 modest awards; more RFQs; expirations driving activity ~$0.3M connectivity/device resell in Q2; expecting future growth Building
DaaS (Commercial)Strategic partnerships needed; facility build-out planned Dedicated DaaS facility, new hires; robust pipeline First DaaS contract secured in July; 90% of pipeline large commercial managed services Accelerating H2
FedRAMP ITMSAchieved status; market access expands Listed on marketplace; differentiator Integral to DHS CWMS bid and commercial identity offerings Embedded
Macro/Gov Efficiency (DOGE)Insulated; cost-saving alignment; essential services Continued alignment; potential tailwinds Focus on best value awards; backlog supports visibility Neutral-to-positive
Working Capital/BillingClean 10-K; cash $6.8M; invoice approval issues noted Major customer invoice timing impacting cash; LOC capacity Unrestricted cash $6.8M; investments to scale DaaS Stabilizing

Management Commentary

  • “We secured our first DaaS contract in July…we believe [it] marks the beginning of a broader momentum shift heading into the second half of the year.” — Jin Kang, CEO .
  • “Strategic partnerships remain a core pillar…BroadSat…‘dome of defense’ to the edge; ECA certificates for a top-tier aerospace & defense contractor.” — Management release highlights .
  • “Backlog ~$265M at June 30; carrier services $22.2M; reselling & other $5.1M with ~$0.3M from Spiral 4 connectivity/device resells.” — Robert George, CFO .

Q&A Highlights

  • DHS CWMS 3.0 structure and positioning: management reiterated incumbency advantages, FedRAMP authorization, and “best value” procurement expectations supporting re-award likelihood .
  • Backlog phasing: ~$47M scheduled for rest of year and ~$92M for next year, with expectation of backlog growth as new awards land .
  • Spiral 4 trajectory: four contracts secured to date across a ~$2.6–$2.7B vehicle; resell activity starting to flow, with more task orders anticipated .
  • DaaS clarity: DaaS model and ITMS platform integration explained; near-term timing slip into H2 acknowledged with infrastructure investments to scale .

Estimates Context

  • Revenue missed S&P Global consensus ($39.93M) by ~$2.05M; EPS consensus was 0.00 (2 estimates), with actual $(0.06). Management attributed variance to timing shifts in anticipated H1 opportunities, with traction building in H2 via DaaS and partnerships* . Values retrieved from S&P Global.
  • Limited analyst coverage (2 estimates) suggests potential estimate volatility; H2 momentum and backlog conversion may drive upward revisions to revenue/EBITDA if DaaS and Spiral 4 task orders close on schedule* Values retrieved from S&P Global.

Key Takeaways for Investors

  • H2 setup looks stronger: first DaaS contract plus expanding commercial pipeline (90% large managed services) should improve mix and margins in coming quarters .
  • Despite Q2 miss vs consensus, backlog (~$265M) and DHS CWMS incumbency/FedRAMP positioning underpin revenue visibility and a credible path to FY guidance .
  • Segment mix matters: lower reselling reliance vs prior year improved ex-carrier gross margin (33%); watch carrier services growth vs margin-dilutive effects .
  • Cash improved and liquidity adequate; near-term investments (DaaS facility, staffing) are targeted at accelerating revenue conversion in H2’25/H1’26 .
  • Contract flow: Spiral 4 task orders starting to contribute; DHS CWMS 3.0 timing is key near-term binary—incumbent advantage and best-value framework are favorable .
  • Tactical trade: Near-term volatility likely around DHS recompete headlines and DaaS ramp; positive award/newsflow would be catalysts, while delays could pressure estimates and shares .

Additional Q2 2025 press releases referenced:

  • DaaS management/support contract with a federal health research agency .
  • 3-year ECA identity certificates for a top-tier U.S. aerospace & defense contractor .
  • Partnership with BroadSat Technologies LLC for end-to-end secure connectivity at the edge .