McCoy Global (MCB) Q2 2026 earnings summary

Executive summary

• Revenue for Q2 2026 declined 28% year-over-year to $17.2 million, mainly due to geopolitical instability in the Middle East and shipping disruptions through the Strait of Hormuz, which delayed shipments and customer capital decisions.

• Net earnings dropped 92% to $0.1 million, reflecting lower shipment volumes and reduced absorption of operating costs.

• Adjusted EBITDA was $1.9 million (11% of revenue), down from $4.8 million (20% of revenue) in Q2 2025, impacted by lower volumes and strategic pricing to convert inventory into cash.

• smartProduct revenue accounted for 61% of total revenue, continuing to represent the majority of sales.

• Liquidity improved with $7.4 million in operating cash flow generated, ending the quarter with no debt and $8.3 million in net cash.

Financial highlights

• Booked backlog at June 30, 2026 was $18.4 million, down from $24.6 million in Q2 2025.

• Book-to-bill ratio was 0.70, compared to 0.93 in Q2 2025.

• Gross profit margin fell to 20% from 36% year-over-year, primarily due to lower revenue and reduced fixed cost absorption.

• General and administrative expenses decreased due to lower stock-based compensation, bad debt recoveries, and reduced headcount.

• Sales and marketing expenses also declined, offset by higher marketing spend; as a percentage of revenue, these expenses increased by 1%.

Outlook and guidance

• Geopolitical instability in the Middle East is expected to continue impacting logistics, project deferrals, and order activity through 2026.

• About 30% of backlog is destined for the Middle East, where delivery timing and revenue recognition remain at risk.

• Several large TRS contract awards in the region are pending, representing significant future opportunities, though timing is uncertain.

• Management expects North American drilling activity to remain subdued, with adoption of new technology proceeding gradually.

• Capital expenditures for the remainder of 2026 will focus on technology development and strategic rental equipment investments.