INNOVATE Q3 Earnings Call Highlights

Key Points

• Q3 revenue rose 42.8% to $495.5 million, while net income was $15.8 million versus a year-ago loss of $9.4 million. Adjusted EBITDA more than doubled to $40.5 million, led by infrastructure results.
• INNOVATE sold DBM Global after the quarter for approximately $413 million in cash at closing, plus an ownership interest in buyer IES Holdings. Proceeds were used to repay its credit line and redeem $325 million of notes, reducing principal indebtedness to $238.3 million.
• Results were mixed outside infrastructure: life sciences revenue fell 61.3% to $1.2 million, while Spectrum revenue declined to $3.7 million, partly reflecting the sale of a controlling interest in broadcasting.

INNOVATE NYSE: VATE reported a 42.8% increase in third-quarter revenue, driven primarily by its infrastructure business, which the company sold after the quarter ended. The sale generated approximately $413 million in cash at closing and helped fund debt repayments, executives said on the company’s earnings call.

Revenue rose to $495.5 million from $347.1 million a year earlier. Net income attributable to common and participating preferred stockholders was $15.8 million, or $1.10 per diluted share, compared with a loss of $9.4 million, or $0.71 per diluted share, in the prior-year quarter.

Adjusted EBITDA, a non-GAAP measure, increased to $40.5 million from $19.8 million. CFO Mike Sena said the improvement was primarily driven by infrastructure, life sciences and non-operating corporate results, partly offset by a decline at Spectrum.

DBM Global Sale Reshapes Portfolio

INNOVATE completed the sale of DBM Global to IES Holdings on Oct. 5, after the reporting period. Interim CEO Paul Voigt said the transaction provided substantial liquidity and an ownership interest in IES, allowing INNOVATE to participate in DBM Global’s future performance.

For the third quarter, infrastructure revenue increased 45% to $490.6 million, while adjusted EBITDA rose to $43.6 million from $23.5 million. Sena attributed the gains largely to higher activity and project efficiencies in DBM Global’s commercial structural steel fabrication and erection business.

DBM Global’s adjusted backlog, which includes awarded but unsigned contracts, was approximately $2.7 billion at Sept. 30, up from $1.8 billion at the end of 2025. Reported backlog was $2.6 billion, compared with $1.7 billion at year-end.

Voigt said DBM Global generated approximately $500 million of revenue from existing backlog during the quarter while replenishing its pipeline. He cited technology, healthcare and New York City as key areas of activity.

INNOVATE also sold a controlling interest in its broadcasting business to CONX Corp. during the quarter. It retained a 25% stake and an option to acquire up to an additional 15%. Voigt said the business had 287 operating stations as of the call.

Life Sciences and Spectrum Results

Life sciences revenue fell 61.3% to $1.2 million from $3.1 million, as R2 recorded lower unit sales across product lines and regions, Sena said. The segment’s adjusted EBITDA loss improved, primarily because of lower compensation-related expenses at R2.

Voigt said R2 ended the quarter with 116 systems carrying into the fourth quarter, representing approximately $1.9 million of future revenue. Production of its Glacial fx system was underway at EIT LLC, with 30 systems delivered and approximately 60 in production for anticipated delivery by Nov. 30.

At MediBeacon, Voigt said commercialization of the TGFR System was progressing alongside reimbursement discussions with the Centers for Medicare & Medicaid Services and private payers. The company has secured orders for 600 monitors in China, with shipments planned from the fourth quarter of 2026 through the second quarter of 2027.

MediBeacon also received an investigational device exemption approval from the Food and Drug Administration authorizing U.S. validation studies for its third-generation wireless TGFR sensor, Voigt said.

Spectrum revenue declined to $3.7 million from $5.6 million, and adjusted EBITDA fell to $300,000 from $1 million. Sena said the results included only two months of consolidated broadcasting operations following the sale of the controlling interest, compared with three months a year earlier.

Debt Reduced After Sale

INNOVATE had $583.3 million in principal indebtedness at Sept. 30, excluding held-for-sale liabilities, up from $529.8 million at the end of 2025. Cash and cash equivalents, excluding held-for-sale assets and restricted cash, were $4.9 million.

Sena said the company used net proceeds from the DBM Global sale to repay its corporate credit line and redeem $325 million of senior secured notes. Following those repayments, principal indebtedness stood at $238.3 million, which the company expects to reduce further through asset monetizations.

About INNOVATE (NYSE:VATE)

INNOVATE Corp. NYSE: VATE is a diversified holding company focused primarily on infrastructure and life sciences businesses. Through its subsidiaries, the company operates businesses involved in structural steel fabrication, industrial construction, engineering and related infrastructure services, as well as the development and commercialization of medical technologies. Its infrastructure operations are centered on DBM Global, a provider of structural steel and related services for commercial, industrial, institutional and infrastructure projects.

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