York Space Systems Q1 Earnings Call Highlights

Key Points

• York Space Systems reported Q1 2026 revenue of $116.3 million, topping internal expectations, and reaffirmed its full-year revenue guidance of $545 million to $595 million despite some supply-chain timing delays.
• Backlog rose 18% to $642.3 million, helped by a $187 million commercial satellite constellation contract, with most of that revenue expected in 2027 and 2028 rather than this year.
• Management emphasized aggressive expansion through acquisitions and vertical integration, including Orbion Space Technology and the planned ALL.SPACE deal, while also highlighting new government awards tied to national security space programs.

York Space Systems NYSE: YSS reported first-quarter 2026 revenue ahead of internal expectations and reaffirmed its full-year outlook, while management highlighted new commercial and government awards, acquisition activity and efforts to accelerate satellite delivery timelines following the company’s January initial public offering.

President and CEO Dirk Wallinger said the quarter marked “a strong and focused start to the year,” pointing to revenue growth, backlog expansion and progress on strategic initiatives. Chief Financial Officer Kevin Messerle said revenue for the quarter was $116.3 million, up $10.1 million, or 9%, from the prior-year period.

The increase was “primarily driven by growth in our major government programs,” Messerle said, partially offset by a tough comparison with the prior-year quarter, when York accelerated production of its first 21 Tranche 1 Transport Layer communication satellites ahead of their September launch.

Margins Pressured by One-Time Items

York reported gross margin of 19%, down 4 percentage points from a year earlier. Messerle attributed the decline to the net impact of estimate-at-completion adjustments, which benefited results last year but weighed on this year’s quarter, along with a non-recurring depreciation expense.

Gross margin dollars were $22.2 million, compared with $24.6 million a year earlier. Contribution margin rose 1 percentage point to 34%, which Messerle said reflected a richer mix of newer programs that tend to carry higher margins than older programs. Contribution margin dollars increased to $40.1 million from $35.3 million.

Operating expenses rose as the company expanded. Messerle said SG&A plus R&D expenses increased 35% year over year, driven by higher headcount, public company costs and incremental salaries and costs tied to the acquisitions of ATLAS in August 2025 and Orbion in March 2026.

Adjusted EBITDA was negative $3.6 million, compared with positive $5.5 million a year earlier. Loss per share was $1.51, with approximately $1.07 tied to two substantial non-recurring, non-cash charges associated with the IPO, Messerle said.

York ended the quarter with $655.7 million in cash and cash equivalents and $150 million available under its revolving facility, for total liquidity of $805.7 million. Capital expenditures were $2.1 million, compared with $1.2 million in the year-ago quarter.

Backlog Rises on Commercial Win

Backlog increased 18% to $642.3 million at quarter-end from $542.6 million as of Dec. 31, 2025. Messerle said the increase was driven by a commercial contract win announced in March, partially offset by revenue recognized during the quarter.

Wallinger said York finalized a $187 million commercial contract in February for a 20-plus satellite constellation built on the M-CLASS platform. He said the company has completed the kickoff with the customer and begun early design work, with significant revenue contribution expected in 2027.

During the Q&A session, Messerle said the commercial contract will contribute some revenue this year, “less than $30 million or so,” with most revenue expected in 2027 and 2028. He described the program as likely being on the longer end of York’s typical two- to three-year program range because of “pretty innovative payloads” being developed by the customer and York’s chief technology officer.

Full-Year Guidance Reaffirmed Despite Supply Timing

York reaffirmed its 2026 revenue guidance of $545 million to $595 million, representing 48% year-over-year growth at the midpoint. Messerle said the outlook remains unchanged despite component supply delays that are expected to push a portion of second-quarter revenue into the second half of the year.

“It’s all a timing thing,” Messerle said in response to a question from Baird analyst Peter Arment. He said the delays are tied to a handful of suppliers and that, because York recognizes revenue on a percentage-of-completion basis, delays in development and production status on certain purchase orders can shift revenue later in the year. Messerle said second-quarter revenue could be roughly flat year over year.

In response to a question from Jefferies, Messerle said about 70% of the midpoint of the full-year revenue range is already in backlog, consistent with what the company said on its prior call. The remaining 30% depends on new business, and he said York has made some progress on that requirement through the commercial contract signed in the first quarter.

Acquisitions Support Vertical Integration and Adjacent Markets

Wallinger said the IPO expanded York’s ability to invest in its “first-mover advantage,” including scaling its business development organization and building inventory. The company has begun building the first 20 satellite platforms into inventory, which Wallinger said could reduce time to orbit by up to 75% in response to rapid delivery demand.

York completed the acquisition of Orbion Space Technology in the first quarter. Wallinger said Orbion strengthens supply chain control and integrates flight-proven propulsion technology, while continuing to operate as a wholly owned subsidiary.

The company also signed an agreement in April to acquire ALL.SPACE, which develops and manufactures jam-resistant, multi-band mobile tactical terminals for satellite communications. Wallinger said ALL.SPACE’s Hydra Terminal systems provide resilient, network-agnostic communications on the move across space, air, land and maritime domains.

Wallinger said the acquisition, expected to close in the third quarter subject to regulatory approvals, will help York expand into adjacent markets, particularly unmanned systems. He said ALL.SPACE has supported the U.S. Army and U.S. Navy through programs including Next Generation Tactical Terminal and satellite terminal non-geostationary programs.

Management Addresses National Security Space Demand

On government opportunities, Wallinger said York won multiple indefinite-delivery/indefinite-quantity awards in March tied to next-generation national security space architectures. He said the awards support critical national defense and war-fighting space capabilities, including systems relevant to missions such as Golden Dome, and that York expects task orders “in the near term.”

Wallinger also addressed questions about the Space Development Agency and the evolving Space Data Network budget. He said transport capabilities remain an “enduring need” and that York views the shift toward Space Data Network as an opportunity. He cited budget line items including a roughly $3 billion Space Data Network backbone and an $800 million “multiple vendor procurement” line item, which he described as encouraging for competition.

Wallinger said York is under contract for seven mission sets outside Space Data Network, including advanced fire control, Moving Target Indicator, remote proximity operations, tracking data relay, advanced waveforms, weather and IDS. He said the company is tracking opportunities across classified, Golden Dome and other mission areas, and characterized York as one of a small number of U.S. companies positioned to deliver hundreds of satellites immediately.

York also secured an extension to its NASA PEX contract through 2027, Wallinger said. He added that business development activity remains strong across government, classified and commercial markets.

“We’re extremely excited about what’s going to happen here in the next couple of quarters in 2026 and 2027,” Wallinger said in closing remarks, citing contract vehicles, allocated budgets and the company’s ability to deliver.

About York Space Systems NYSE: YSS

York Space Systems is a leading, U.S.-based, space and defense prime(1) providing a comprehensive suite of mission-critical solutions for national security, government and commercial customers. York is one of the only space and defense primes with proprietary hardware and software capabilities designed to address customers' complex mission requirements across the critical elements of the entire space ecosystem throughout the mission lifecycle. York is the number one provider to the U.S. Department of Defense's (“DoD”) Proliferated Warfighter Space Architecture (“PWSA”) by number of spacecraft operating in-orbit, by number of contracts, and by variety of contract types as of September 2025.

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