Everforth (EFOR) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenues reached $1,007.0 million, exceeding the high end of guidance but down 1.3% year-over-year; net income was $14.2 million, and adjusted EBITDA was $96.7 million (9.6% margin), both above guidance.

• Commercial Segment growth was led by demand in application modernization, data and AI, and cloud services, with TMT industry revenue up 5.6% year-over-year; Federal Segment saw strong contract awards and backlog.

• Quinnox acquisition for $290 million expanded the Commercial Segment, enhancing enterprise platform and engineering capabilities; integration is progressing as planned.

• AI adoption and operationalization are key market trends, with new platforms and internal innovation driving operational efficiency and client outcomes.

• Financial flexibility improved through refinancing and upsizing of the revolving credit facility post-quarter.

Financial highlights

• Q2 2026 revenues: $1,007.0 million; Commercial Segment: $701.7 million (down 0.9% YoY); Federal Segment: $305.3 million (down 2.3% YoY).

• Gross margin: 28.3% (Commercial: 32.1%, down 90 bps; Federal: 19.6%, up 40 bps).

• Net income: $14.2 million; adjusted EBITDA: $96.7 million (9.6% margin); adjusted net income: $37.2 million; adjusted EPS: $0.91.

• Free cash flow: $46.3 million; operating cash flow: $52.2 million; cash and equivalents: $152.9 million.

• Long-term debt at June 30, 2026: $1.44 billion; net leverage ratio: 3.1x.

Outlook and guidance

• Q3 2026 revenue guidance: $994 million to $1.024 billion; adjusted EBITDA: $95 million–$105 million (margin 9.6%–10.3%); net income: $14.5 million–$23 million; adjusted EPS: $0.92–$1.10.

• Gross margin expected at 28.0%–28.5% for Q3.

• Strategic planning expenses expected to decline as cost-saving initiatives progress.

• Management expects sufficient liquidity for obligations and capital needs for the next 12 months and beyond.

• Commercial momentum expected to drive high end of guidance; federal acceleration anticipated in Q4 and 2027.