Everforth (EFOR) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenues reached $1,007.0 million, exceeding the high end of guidance, with Adjusted EBITDA margin at 9.6%, both above guidance.

• Net income was $14.2 million, with Adjusted Net Income at $37.2 million and Adjusted EPS of $0.91.

• Commercial Segment growth was driven by demand in application modernization, data and AI, cloud services, and TMT industry strength; Quinnox integration is enhancing platform and engineering capabilities.

• Federal Segment saw $169.3 million in new contract awards, backlog at $2.7 billion, and strong performance in National Security and cybersecurity programs.

• AI adoption and operationalization are key market trends, with new platforms like TotalSight and AgentBloc launched to accelerate secure enterprise AI deployment.

Financial highlights

• Q2 2026 revenues: $1,007.0 million (down 1.3% YoY); Commercial: $701.7 million (down 0.9% YoY); Federal: $305.3 million (down 2.3% YoY).

• Gross margin: 28.3% (Commercial: 32.1%, Federal: 19.6%); net income: $14.2 million; Adjusted EBITDA: $96.7 million (9.6% margin).

• Free cash flow: $46.3 million (48% of Adjusted EBITDA); cash and equivalents: $152.9 million.

• $11.5 million deployed for share repurchases; $923 million remains under authorization.

• Long-term debt at June 30, 2026 was $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 to $105 million (margin: 9.6%–10.3%).

• Net income guidance: $14.5 million to $23 million; Adjusted EPS: $0.92–$1.10.

• Strategic planning expenses expected to decline as cost-saving initiatives progress; Q3 SG&A expected at $7.5–$9.5 million.

• Free cash flow conversion target for full year: 60–65% of Adjusted EBITDA.

• Management expects liquidity and credit facility availability to be sufficient for obligations and capital needs for the next 12 months and beyond.