INNOVATE NYSE: VATE reported higher first-quarter revenue and a narrower loss as growth in its infrastructure business offset weaker results in its Life Sciences and Spectrum segments, management said on the company’s first-quarter 2026 earnings call.
Interim CEO Paul Voigt said the company delivered “a strong start to the year,” citing “solid execution across the portfolio and improving visibility into 2026.” Consolidated revenue for the quarter was $364.8 million, while adjusted EBITDA was $19.7 million.
CFO Mike Sena said total revenue rose 33% from $274.2 million in the prior-year period, primarily driven by the Infrastructure segment. Net loss attributable to common stockholders and participating preferred stockholders narrowed to $17.2 million, or $1.29 per fully diluted share, compared with a loss of $24.8 million, or $1.89 per fully diluted share, a year earlier. Adjusted EBITDA increased from $7.2 million in the prior-year quarter.
Infrastructure Drives Revenue Growth
INNOVATE’s Infrastructure segment, which includes DBM Global, generated first-quarter revenue of $357.9 million and adjusted EBITDA of $23 million. Sena said revenue increased 35.1% from $264.9 million in the prior-year quarter, driven by the timing and size of projects at DBM Global’s commercial structural steel fabrication and erection business.
That increase was partially offset by lower activity in the industrial maintenance and repair business, where certain large construction projects active in the comparable period have since been completed.
Voigt said DBM Global’s first-quarter performance reflected “consistent execution and continued strength,” with healthy sales activity, disciplined project selection and strong conversion rates. He said the company maintained adjusted backlog of $1.8 billion from the end of 2025 while increasing revenue compared with the prior-year quarter.
As of March 31, reported backlog was $1.6 billion, while adjusted backlog, including awarded but not yet signed contracts, was $1.8 billion. That compared with reported backlog of $1.7 billion and adjusted backlog of $1.8 billion at the end of 2025.
Voigt said technology, healthcare and New York City opportunities were contributing to backlog levels near record highs. He also highlighted demand tied to technology-related construction markets, including artificial intelligence infrastructure, energy systems, advanced manufacturing and digital connectivity.
“Technology companies are expected to continue spending at historic levels on computing infrastructure,” Voigt said, adding that DBM Global continues to see opportunities in data centers, chip makers and other specialty technology projects.
DBM Global’s gross margin compressed by about 140 basis points year over year to 14.2%, while adjusted EBITDA margin was 6.4%, which Voigt said was largely consistent with the prior-year quarter.
Life Sciences Advances Regulatory and Commercial Programs
Life Sciences revenue declined 48.4% to $1.6 million from $3.1 million in the prior-year quarter. Sena said the decrease was attributable to R2, primarily due to lower Glacial FX and Glacial Rx unit sales in North America, partially offset by higher Glacial Spa unit sales outside North America.
Despite the lower revenue, adjusted EBITDA losses in Life Sciences decreased. Sena said that was primarily due to fewer equity method losses recognized from MediBeacon and lower recurring selling, general and administrative expenses resulting from reduced compensation-related expenses at R2 and Pansend. The improvement was partially offset by lower gross profit at R2.
Voigt said MediBeacon continued to make progress on regulatory, clinical and commercial initiatives. He said the company completed a week-long notified body quality systems audit with no observations, consistent with the Medical Device Single Audit Program. MediBeacon also received the CE mark under the European Medical Device Regulation for the TGFR Monitor and TGFR reusable sensor.
MediBeacon is targeting additional approvals in Asia-Pacific markets this year in collaboration with its partner, Voigt said. He also said the company has received FDA Investigational Device Exemption approvals for several clinical efforts, including ocular angiography, the TGFR wireless sensor and a study focused on renal functional reserve.
R2 reported worldwide revenue of $1.6 million in the quarter, while total demand reached $2.2 million. Voigt said the company had a backlog of approximately 160 systems globally, representing nearly $2 million in revenue, including orders received early in the second quarter. International gross system sales outside North America rose 58.6% compared with the first quarter of 2025, and R2 appointed a new distributor in South Korea, which Voigt described as an estimated $2 million opportunity.
Voigt also noted that R2 is seeking external capital to continue its progress through the year.
Spectrum Faces Advertising and Network Headwinds
The Spectrum segment reported first-quarter revenue of $5.3 million and adjusted EBITDA of $700,000. Sena said revenue declined by $900,000 year over year and adjusted EBITDA fell by $700,000, primarily due to the termination of a few networks and individual markets after the comparable period.
Voigt said Spectrum continued to face softness in advertising demand and network cancellations but added that the company was encouraged by progress on strategic initiatives. He said the NAB conference in Las Vegas produced “a meaningful number” of strategic and commercial opportunities that the company is following up on.
Voigt also pointed to favorable Federal Communications Commission rulings related to low-power television and Class A stations. During an LPTV license window that opened March 19, INNOVATE filed applications for more than 60 new licenses to expand its national footprint and increase population coverage. The company also reallocated more than 25 Class A licenses from smaller markets to larger markets to improve spectrum protection and positioning for any future spectrum auctions.
A collaborative project with a mobile wireless carrier continues to advance, Voigt said, with successful trials completed and discussions underway regarding new market launches in the second half of 2026. He added that a petition filed with the FCC in March proposing 5G Broadcast conversions to low-power television continues to gain industry support, though no formal FCC action has been taken.
Cash Rises, Debt Increases
INNOVATE ended the quarter with $134.6 million in cash and cash equivalents, excluding restricted cash, compared with $112.1 million at the end of 2025. On a standalone basis, the non-operating corporate segment held $2.5 million in cash and cash equivalents, down from $4.2 million at year-end.
Total principal outstanding indebtedness was $699 million as of March 31, up from $687.2 million at the end of 2025. Sena said the increase was primarily driven by payment-in-kind interest at the non-operating and Life Sciences segments, partially offset by lower debt at Infrastructure. DBM Global ended the quarter with $76.6 million in principal debt, down $11.1 million from year-end 2025, mainly due to a lower credit line balance.
Voigt said INNOVATE continues to work with lenders on strategic alternatives as it focuses on addressing its capital structure. No analysts asked questions during the call’s question-and-answer session.
About INNOVATE NYSE: VATE
INNOVATE Corp., through its subsidiaries, operates in infrastructure, life sciences, and spectrum areas in the United States. The Infrastructure segment provides industrial construction, structural steel, and facility maintenance services, such as fabrication and erection of structural steel and heavy steel plate services, and large-diameter water pipes and water storage tanks; fabrication of trusses and girders; and 3-D building information modeling and detailing for commercial, industrial, and infrastructure construction projects, such as buildings and office complexes, hotels and casinos, convention centers, sports arenas and stadiums, shopping malls, hospitals, dams, bridges, mines, metal processing, refineries, pulp and paper mills, and power plants.
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