Star Equity Holdings, Inc. (STRR) Earnings
Star Equity Holdings, Inc. is expected to report next earnings on November 12, 2026 (in NaN days), with a consensus EPS estimate of $0.04. STRR has beaten EPS estimates in 2 of its last 12 reported quarters (average surprise -187.2% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Aug 14, 2026 | $-0.07 | $-0.15 | -104.6% | $55M | -3.5% |
| May 12, 2026 | $-0.20 | $-0.99 | -395.0% | $50M | -4.8% |
| Mar 18, 2026 | $0.18 | $-0.10 | -155.6% | $57M | -2.0% |
| Nov 13, 2025 | $0.32 | $0.02 | -93.8% | $48M | -22.7% |
| Aug 8, 2025 | $0.17 | $0.12 | -29.4% | $24M | +17.1% |
| May 14, 2025 | $-0.25 | $-0.52 | -108.0% | $13M | -27.9% |
| Mar 20, 2025 | $-0.17 | $0.15 | +188.2% | $17M | +4.6% |
| Nov 19, 2024 | $-0.26 | $-0.29 | -11.5% | $14M | -12.4% |
| Aug 13, 2024 | $-0.25 | $-0.29 | -16.0% | $13M | -4.7% |
| May 20, 2024 | $-0.10 | $-0.45 | -350.0% | $9M | -11.0% |
| Mar 22, 2024 | $-0.15 | $-0.10 | +33.3% | $14M | +54.2% |
| Aug 11, 2023 | $0.25 | $-0.30 | -220.0% | $9M | -64.9% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q2 FY2026 · August 14, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
### Merger and Synergy Updates - Star Equity achieved $3 million in merger synergies from the Hudson acquisition, exceeding the original projection of $2 million, driven by a $1.5 million year-over-year reduction in corporate costs for the first half of 2026. - The company announced a signed merger agreement to acquire Hart Hanks for $5 per share, totaling ~$38 million in enterprise value on a fully diluted basis. The deal will be funded 50% in cash (from Star's existing cash, Hart Hanks' existing cash, and Hart Hanks' $25 million revolver) and 50% in Star Equity preferred stock, with no external capital required and no common shares issued. - Management estimates $10 million in total annual cost synergies from the Hart Hanks merger. Pro forma combined annual revenue is projected at ~$400 million, with pro forma adjusted EBITDA of ~$30 million once synergies are fully realized. The merger is expected to close in Q4 2026, following regulatory review and Hart Hanks shareholder approval (no Star shareholder vote is required). ### Capital Allocation - The company ended Q2 2026 with $8.9 million in total cash (including $2.1 million in restricted cash), and working capital excluding cash improved to $21.5 million from $22.4 million at year-end 2025, showing progress in more efficient working capital management. - Star Equity repurchased ~$0.2 million in common shares during Q2 2026, with $1.6 million remaining in the $3 million share repurchase authorization approved in September 2025. Management views shares as undervalued and continues to consider repurchases an attractive capital allocation. ### Operational Performance by Division - **Business Services (Hudson Talent Solutions):** The division delivered modest YoY revenue growth despite sustained talent market pressure. Gross profit decline was limited to 4% YoY due to operational efficiency and AI/automation investments. $1.5 million in growth investments were made in the Hudson Fusion digital platform and geographic expansion, up from $0.8 million in Q2 2025. Regional performance is mixed: the Americas delivered 10% gross profit growth, while EMEA and Asia-Pac posted 10% and 13% gross profit declines respectively. Management has seen an uptick in new client conversations following geographic expansion and digital enhancements. - **Building Solutions:** Q2 2026 performance missed expectations due to broad softness in residential and commercial construction markets, plus project timing: most revenue from a large project completed in Q2 will be recognized in Q3 2026. New orders reached $17.3 million, the highest quarterly intake in a year, and backlog grew quarter-over-quarter. The division has gained traction in niche, high-demand segments including workforce housing, affordable housing, and senior/assisted living. Management remains focused on disciplined project selection and margin management. - **Energy Services:** The division delivered strong double-digit growth across all key metrics, driven by higher equipment utilization and new client wins in the geothermal and mining segments. Increased CapEx over the past year to expand rental tool inventory (to meet unmet customer demand that could not be fulfilled by prior underinvestment) has driven the growth momentum.
Guidance
- Management maintains a target normal run rate for Building Solutions of $20 million in quarterly revenue, 25% gross profit margin, and a 10-15% annual adjusted EBITDA margin, which the division is currently below due to ongoing market softness. - The 10 million in cost synergies from the Hart Hanks acquisition is expected to be fully realized within approximately one year of closing, aligned with the timeline of the prior Hudson merger. - Management expects current elevated CapEx for Energy Services (approximately twice the maintenance level) to drop back to a maintenance run rate of ~$1 million annually after the current round of tool inventory expansion is completed. - No material changes to full-year 2026 guidance were provided for existing core divisions beyond the structural updates from the announced Hart Hanks acquisition.
Segment performance
1. Business Services Division: Q2 2026 revenue was $36.4 million, a 2% increase from $35.5 million in Q2 2025. Gross profit was $17.8 million, a 4% decrease from $18.6 million year-over-year (YoY). Adjusted EBITDA was $1.6 million, down from $2.2 million YoY. By region, Asia Pacific contributes 62% of divisional revenue and 43% of gross profit, the Americas contributes 39% of gross profit, and EMEA contributes 18% of gross profit. Trailing 12-month adjusted EBITDA margin was 5.4%, down from 7.9% YoY due to growth investments. 2. Building Solutions Division: Q2 2026 revenue was $14.6 million, down from pro forma $20.4 million in Q2 2025. Gross profit was $3.2 million, down from pro forma $5.2 million YoY. Adjusted EBITDA was $0.5 million, down from pro forma $2.3 million YoY. End-of-quarter backlog was $10.6 million, up from $8.0 million at the end of Q1 2026, and the trailing 12-month book-to-bill ratio was 0.77, up from 0.72 last quarter. 3. Energy Services Division: Q2 2026 revenue was $3.9 million, a 19% increase from pro forma $3.3 million in Q2 2025. Gross profit was $1.9 million, a 75% increase from pro forma $1.1 million YoY. Adjusted EBITDA was $1.2 million, a 126% increase from pro forma $0.5 million YoY.
Risks & headwinds
- Broad macroeconomic uncertainty and low labor attrition have frozen client hiring decisions for Business Services, leading to slower new business ramp and lower new logo wins than management expected. Geopolitical uncertainty in EMEA also creates ongoing weakness for that region. - Persistent softness in the single-family and commercial construction markets, particularly in the Northeast and Upper Midwest where Building Solutions operates, has kept quarterly new orders and revenue below target run rates, leading to lower-than-expected factory capacity utilization. - The Hart Hanks acquisition faces closing risks, including SEC approval of the required S-4 filing, potential competing superior offers during the 30-day go-shop period, and Hart Hanks shareholder approval. There is also execution risk for stemming the historical revenue decline Hart Hanks has experienced across its segments, particularly the Revenue Solutions segment. - Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from projections, as detailed in Star Equity's SEC filings.
Analyst Q&A
Q: Why was Building Solutions Q2 performance below expectations, and what is the target normal run rate for the division? /
A: Management expected $20 million in quarterly revenue and $20 million in quarterly new orders, but Q2 revenue was $14.6 million and new orders came in at $17.3 million. Broad weakness in single-family and commercial multifamily construction in the division's core Northeast and Upper Midwest markets has kept activity low. The division has only gained traction in niche segments including workforce, affordable, and senior housing, which has not yet offset broader market softness.
Q: What is your strategy to reverse Hart Hanks' historical revenue decline, and how does this acquisition impact the pending G Group strategic process? /
A: Management believes Hart Hanks' core adjusted EBITDA is understated when adjusted for lease and pension expenses, making the acquisition multiple attractive. Management sees early signs of stabilization (such as the recently won Samsung client contract) and plans to drive stabilization through large cost synergies, then accelerate digital and AI improvements to grow the business. For G Group, the strategic alternatives process is still ongoing, and management will provide updates when there is material news to announce.
Q: Why is Energy Services performing so well, and how will its CapEx trend going forward? /
A: Prior owners held back on capital investments for tool inventory ahead of their retirement, leaving the business unable to fulfill customer demand for rental equipment. After acquisition, Star invested in expanding the tool fleet, allowing the business to win new clients and increase utilization in core and growth segments including mining and geothermal. The current elevated CapEx (twice maintenance levels) is temporary; after the fleet expansion is complete, CapEx will return to a maintenance run rate of ~$1 million annually.
Q: When do you expect to fully realize the $10 million in cost synergies from the Hart Hanks acquisition? /
A: Synergy realization will happen in phases: quick, early synergies from eliminating duplicative public company overhead (such as audits, boards, and D&O insurance) will be realized in the first quarter after closing. Additional synergies from consolidating duplicate corporate functions (finance, accounting, IT) will follow quickly. Management expects the full $10 million in synergies to be realized within one year of closing, matching the timeline of the prior Hudson merger.