Star Equity (STRR) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue rose 21.1% year-over-year to $17.1M, with full-year revenue up 16.5% to $53.4M, driven by acquisitions of Timber Technologies and Big Lake Lumber; Q4 2025 revenue grew 69% to $56.8M, with FY 2025 revenue up 23% to $172.2M.

• Gross profit in Q4 2024 increased 55.9% to $4.4M, but full-year gross profit declined 7.3% due to one-time adjustments; Q4 2025 gross profit rose 38% to $24.2M, with FY 2025 gross profit up 14% to $79.9M.

• Adjusted EBITDA improved from $1.1M in Q4 2024 to a 156% increase in Q4 2025, with FY 2025 adjusted EBITDA up 364% year-over-year.

• Net loss from continuing operations was $2.5M in Q4 2024 and $2.4M in Q4 2025, but pro forma adjusted net income for FY 2025 reached $5.0M versus a loss in FY 2024.

• The acquisition of Alliance Drilling Tools (ADT) in March 2025 established the Energy Services division, diversifying operations and providing a new growth platform.

Financial highlights

• Q4 2024 gross margin improved to 26.0% from 20.2% year-over-year; Q4 2025 adjusted EBITDA margin improved significantly.

• SG&A expenses increased 31.7% in Q4 2024 to $1M, and for the year to $17M, mainly due to acquisitions; Q4 2024 SG&A was $4.2M, or 24.7% of revenue.

• Cash and equivalents fell to $5.6M at year-end 2024 from $18.9M, then to $10.3M at year-end 2025; debt increased to $11.3M at year-end 2024.

• Working capital increased to $62.5M at year-end 2025 from $40.1M a year earlier.

• Share repurchases totaled $279K in 2024, with $721K remaining authorized.

Outlook and guidance

• Positive momentum from late 2024 continued into Q1 2025, with multiple large project signings and a growing sales pipeline; Building Solutions backlog declined through 2025 but is expected to recover in 2026.

• Management anticipates continued organic growth, acquisitions, and share repurchases to drive shareholder value.