Press Release: Star Equity Holdings, Inc. Announces 2025 Second Quarter Financial Results

Dow Jones
08/13

Q2 2025 revenues increased 76% to $23.7 million and gross profit increased 182% to $6.3 million

Generated Adjusted EBITDA of $7.0 million

Quarter-end Building Solutions backlog stands at $25.7 million

OLD GREENWICH, Conn., Aug. 13, 2025 (GLOBE NEWSWIRE) -- Star Equity Holdings, Inc. (Nasdaq: STRR; STRRP) ("Star" or the "Company"), a diversified holding company, reported today its financial results for the second quarter (Q2) ended June 30, 2025. All 2025 and 2024 amounts in this release are unaudited.

Q2 2025 Financial Highlights vs. Q2 2024 (unaudited)

   -- Revenues increased by 75.8% to $23.7 million from $13.5 million. 
 
   -- Gross profit increased by 182.2% to $6.3 million from $2.2 million. 
 
   -- Net income was $3.5 million (or $1.08 per basic and $1.07 per diluted 
      share) compared to net loss of $3.8 million (or $1.19 loss per basic and 
      diluted share). 
 
   -- Non-GAAP adjusted net income was $6.0 million (or $1.87 per basic and 
      $1.86 per diluted share) compared to net loss of $0.9 million (or $0.29 
      loss per basic and diluted share). 
 
   -- Non-GAAP adjusted EBITDA was a gain of $7.0 million versus a loss of $0.5 
      million. 

Year-to-Date 2025 Financial Highlights vs. Year-to-Date 2024 (unaudited)

   -- Revenues increased by 62.1% to $36.6 million from $22.6 million. 
 
   -- Gross profit increased by 147.7% to $9.4 million from $3.8 million. 
 
   -- Net income was $2.3 million (or $0.71 per basic and $0.71 per diluted 
      share) compared to a net loss of $6.0 million (or $1.90 loss per basic 
      and diluted share). 
 
   -- Non-GAAP adjusted net income was $4.3 million (or $1.35 per basic and 
      $1.34 per diluted share) compared to a net loss of $2.3 million (or $0.73 
      loss per basic and diluted share). 
 
   -- Non-GAAP adjusted EBITDA was a gain of $6.2 million versus a loss of $1.6 
      million. 

"In the second quarter of 2025, consolidated revenues increased by 76% due to strong Building Solutions division performance as well as the inclusion of revenues from the acquisitions of Timber Technologies Solutions ("TT") and Alliance Drilling Tools ("ADT")," commented Rick Coleman, Chief Executive Officer. "Second quarter 2025 Building Solutions overall revenues increased substantially compared to the same quarter last year driven by multiple large commercial projects produced and delivered in the quarter. Looking forward, our quarter-end Building Solutions backlog, representing orders under contract, remains strong at $25.7 million, which makes us optimistic the division will show strong second half and full-year 2025 performance. Lastly, our Energy Services division quarterly performance was robust despite challenging macroeconomic conditions, and we continue to be pleased with the integration of the ADT business and team into our holding company platform."

Jeff Eberwein, Executive Chairman of the Board of Directors, noted, "I'm pleased to report that Star's second quarter results include $5.8 million in adjusted EBITDA from our Investments Division, mainly due to a $5.5 million realized gain on Star Equity Fund's investment in Servotronics, which was acquired by TransDigm at the end of Q2. This successful investment marked a watershed win for Star Equity Fund, the public investments arm of our Investments division."

Mr. Eberwein added, "In May 2025, Star Equity signed a definitive merger agreement with Hudson Global, Inc. (Nasdaq: HSON) (the "Merger"). The completion of the Merger is subject to the approval of the shareholders of both the Company and Hudson, with both meetings scheduled for August 21, 2025. The NewCo created via the Merger is expected to create considerable value for Star Equity shareholders due to increased scale, further diversification of revenue streams, and the elimination of redundant public company costs."

Revenues

The Company's Q2 2025 revenues increased 75.8% to $23.7 million from $13.5 million in Q2 2024.

 
Revenues in $ 
 thousands        Q2 2025   Q2 2024    % change   6M 2025   6M 2024    % change 
                  --------  --------  ----------  --------  --------  ---------- 
Building 
 Solutions        $20,384   $13,483     51.2%     $32,502   $22,601     43.8% 
Energy Services     3,324        --      N/M        4,130        --      N/M 
Investments           158       194    (18.6)%        316       382    (17.3)% 
Intersegment 
 elimination         (158)     (194)   (18.6)%       (316)     (382)   (17.3)% 
                   ------    ------   ------       ------    ------   ------ 
Total Revenues    $23,708   $13,483     75.8%     $36,632   $22,601     62.1% 
                   ======    ======   ======       ======    ======   ====== 
 

Q2 2025 and 6M 2025 Building Solutions revenue increased by 51.2% and 43.8%, respectively, from the prior year, primarily due to increased revenues at KBS. The inclusion of a full quarter of revenues from TT, acquired on May 17, 2024, also contributed to strong division performance. Q2 2025 results also included approximately $3.3 million in revenues from ADT which were not included in the prior year period.

Our Building Solutions segment backlog of $25.7 million and strong sales pipeline indicate continued strong demand for new projects. Although the revenue impact and timing are uncertain, customer feedback gives us confidence in our ability to convert pipeline opportunities into signed contracts adding to our backlog in the coming months.

Gross Profit

 
Gross profit 
 (loss) in $ 
 thousands         Q2 2025     Q2 2024     % change    6M 2025     6M 2024     % change 
                  ----------  ----------  ----------  ----------  ----------  ---------- 
Building 
 Solutions        $5,243      $2,229       135.2%     $8,172      $3,907       109.2% 
Building 
 Solutions gross 
 margin             25.7%       16.5%        9.2%       25.1%       17.3%        7.8% 
Energy Services    1,084          --         N/M       1,366          --         N/M 
Energy Services 
 gross margin       32.6%         --%        N/M        33.1%         --%        N/M 
Investments           84         181       (53.6)%       167         265       (37.0)% 
Intersegment 
 elimination        (158)       (194)      (18.6)%      (316)       (382)      (17.3)% 
                   -----       -----      ------       -----       -----      ------ 
Total gross 
 profit           $6,253      $2,216       182.2%     $9,389      $3,790       147.7% 
                   =====       =====      ======       =====       =====      ====== 
Total gross 
 margin             26.4%       16.4%       10.0%       25.6%       16.8%        8.8% 
 

Q2 2025 and 6M 2025 Building Solutions gross profit increased 135.2% and 109.2%, respectively, versus the same period last year primarily due to the inclusion of revenues from TT and ADT as well as improved gross profit and gross margin at KBS.

Operating Expenses

On a consolidated basis, Q2 2025 sales, general and administrative ("SG&A") expenses increased by $1.1 million, or 20.2%, versus the prior year period, while as a percentage of revenue SG&A decreased in Q2 2025 to 27.1% versus 39.6% in Q2 2024. The major driver of this increase in Q2 2025 was the inclusion of SG&A from ADT and, to a lesser extent, TT, (full quarter in Q2 2025 versus partial quarter in Q2 2024) as well as increased M&A expenses in Q2 2025 versus Q2 2024.

Net Income

Q2 2025 net income was $3.5 million, or $1.08 per basic and $1.07 per diluted share, compared to a net loss of $3.8 million, or $1.19 loss per basic and diluted share in the same period in the prior year. Q2 2025 non-GAAP adjusted net income was $6.0 million, or $1.87 per basic and $1.86 per diluted share, compared to non-GAAP adjusted net loss of $0.9 million, or $0.29 loss per basic and diluted share, in the prior year period.

Year-to-date 2025 net income was $2.3 million or $0.71 per basic and $0.71 per diluted share, compared to net loss of $6.0 million, or $1.90 loss per basic and diluted share, in the same period in the prior year. Year-to-date 2025 non-GAAP adjusted net income was $4.3 million, or $1.35 per basic and $1.34 per diluted share, compared to adjusted net loss of $2.3 million, or $0.73 loss per basic and diluted share, in the prior year period.

Non-GAAP Adjusted EBITDA

Q2 2025 non-GAAP adjusted EBITDA was a gain of $7.0 million versus a loss of $0.5 million in the same quarter of the prior year, primarily due to realized gains on securities at our Investments Division. Year-to-date 2025 non-GAAP adjusted EBITDA was a gain of $6.2 million, compared to a loss of $1.6 million in year-to-date 2024, primarily due to realized gains on securities at our Investments Division and higher margins at our Building Solutions division.

Operating Cash Flow

Q2 2025 cash flow from operations was an outflow of $1.7 million, compared to an outflow of $1.9 million for Q2 2024. 6M 2025 cash flow from operations was an outflow of $1.1 million, compared to an outflow of $4.3 million for 6M 2024. The operating cash flow improvement is attributable to favorable results from operations, particularly in our Building Solutions division, and strong accounts receivable collections. Subsequent to quarter-end in early July, the cash from our "Receivable from brokers" was received and will therefore be recorded as operating cash flow in the third quarter of 2025.

Operations Dashboard

 
                   Building Solutions Division 
----------------------------------------------------------------- 
 
                        Q2 
(USD in thousands)    2024(1)  Q3 2024  Q4 2024  Q1 2025  Q2 2025 
Beginning Backlog(2)  $14,806  $13,957  $19,567  $17,190  $27,913 
(+) New Orders        $12,635  $19,273  $14,718  $22,841  $18,223 
(-) Recognized 
 Revenue              $13,483  $13,663  $17,095  $12,118  $20,398 
                       ------   ------   ------   ------   ------ 
Ending Backlog        $13,957  $19,567  $17,190  $27,913  $25,739 
 

(1) Includes impact of TT from date of acquisition on May 17, 2024.

(2) Backlog defined as future revenue under contract.

Share Repurchase Program

On August 7, 2024, the Company's board of directors authorized a new stock repurchase program under which the Company is authorized to repurchase up to $1.0 million of its issued and outstanding shares of common stock. The Company repurchased 73,855 shares for $279 thousand under this program in 2024. Under the program, the Company had remaining authorization to repurchase up to $721 thousand of its issued and outstanding shares of common stock as of June 30, 2025.

Preferred Stock Dividends

In Q2 2025, the Company's board of directors declared a cash dividend to holders of our Series A Preferred Stock of $0.25 per share, for an aggregate amount of approximately $0.7 million. The record date for this dividend was June 1, 2025, and the payment date was June 10, 2025.

NOL Carryforward

As of December 31, 2024, Star had $44.6 million of U.S. federal and $17.6 million of state net operating losses ("NOLs"), which the Company considers to be a valuable asset for its stockholders. Certain of these NOLs will expire in 2025 through 2044 unless previously utilized. In order to protect the value of the NOLs for all stockholders, the Company has a rights agreement and charter amendment in place that limit beneficial ownership of the Company's common stock to 4.99%. Stockholders who wish to own more than 4.99% of Star common stock, or who already own more than 4.99% of Star common stock and wish to increase their holdings, may only acquire additional shares with the Board's prior written approval.

Conference Call Information

A conference call is scheduled for 10:00 a.m. ET (7:00 a.m. PT) on August 13, 2025 to discuss the results and management's outlook. The call may be accessed by dialing (833) 630-1956 (toll free) or (412) 317-1837 (international), five minutes prior to the scheduled start time and referencing Star Equity. A simultaneous webcast of the call may be accessed online from the Events & Presentations link on the Investor Relations page at www.starequity.com/events-and-presentations/presentations; an archived replay of the webcast will be available within 15 minutes of the end of the conference call.

If you have any questions, either prior to or after our scheduled Earnings Conference call, please e-mail admin@starequity.com or lcati@theequitygroup.com.

Use of Non-GAAP Financial Measures by Star Equity Holdings, Inc.

This release presents the non-GAAP financial measures "adjusted net income (loss)," "adjusted net income (loss) per basic and diluted share, " and "adjusted EBITDA." The most directly comparable measures for these non-GAAP financial measures are "net income (loss)," "net income (loss) per basic and diluted share," and "cash flows from operating activities." The Company has included below unaudited adjusted financial information, which presents the Company's results of operations after excluding acquired intangible asset amortization, unrealized gain (loss) on equity securities and lumber derivatives, litigation costs, transaction costs, financing costs, interest income, impairment of cost method investment, loss/gain on equity method investment, recruitment fee, and income tax adjustments. Further excluded in the measure of adjusted EBITDA are stock-based compensation, interest, depreciation, and amortization.

A discussion of the reasons why management believes that the presentation of non-GAAP financial measures provides useful information to investors regarding the Company's financial condition and results of operations is included as Exhibit 99.2 to the Company's report on Form 8-K filed with the Securities and Exchange Commission ("SEC") on August 13, 2025.

About Star Equity Holdings, Inc.

Star Equity Holdings, Inc. is a diversified holding company with three divisions: Building Solutions, Energy Services, and Investments.

Building Solutions

Our Building Solutions division operates in three businesses: (i) modular building manufacturing; (ii) structural wall panel and wood foundation manufacturing, including building supply distribution operations; and (iii) glue-laminated timber (glulam) column, beam, and truss manufacturing.

Energy Services

Our Energy Services division engages in the rental, sale, and repair of downhole tools used in the oil and gas, geothermal, mining, and water-well industries.

Investments

Our Investments division manages and finances the Company's real estate assets as well as its investment positions in private and public companies.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this press release that are not statements of historical fact are hereby identified as "forward-looking statements" for the purpose of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon management's current beliefs, views, estimates and expectations, including as pertains to (i) the plans and objectives of management for future operations, including plans or objectives relating to acquisitions and related integration, (ii) projections of income, EBITDA, earnings per share, capital expenditures, cost reductions, capital structure or other financial items, (iii) the future financial performance of the Company or acquisition targets and (iv) the assumptions underlying or relating to any statement described above. Forward-looking statements generally are identified by the words "believe", "expect", "anticipate", "estimate", "project", "intend", "plan", "should", "may", "will", "would", "will be", "will continue" or similar expressions. Such forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon the Company's current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which the Company has no control over. Actual results and the timing of certain events and circumstances may differ materially from those described above as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation, the cyclical nature of our operating businesses, the Company's debt and its ability to repay, refinance, or incur additional debt in the future; the Company's need for a significant amount of cash to service, repay the debt, and to pay dividends on the Company's preferred stock; the restrictions contained in the debt agreements that limit the discretion of management in operating the business; legal, regulatory, political and economic risks in markets and public health crises that reduce economic activity and cause restrictions on operations; the length of time associated with servicing customers; losses of significant contracts or failure to get potential contracts being discussed; disruptions in the relationship with third party vendors; accounts receivable turnover; insufficient cash flows and resulting lack of liquidity; the Company's inability to expand its business operations; the liability and compliance costs regarding environmental regulations; the lack of product diversification; existing or increased competition; risks to the price and volatility of the Company's common stock and preferred stock; stock volatility and in liquidity; risks to preferred stockholders of not receiving dividends and risks to the Company's ability to pursue growth opportunities if the Company continues to pay dividends according to the terms of the Company's preferred stock; the Company's ability to execute on its business strategy (including any cost reduction plans); the Company's failure to realize expected benefits of restructuring and cost-cutting actions; the Company's ability to preserve and monetize its net operating losses; risks associated with the Company's possible pursuit of acquisitions; the risk that the conditions to the closing of the proposed Merger are not satisfied, including the failure to timely obtain stockholder approval for the transaction, if at all; uncertainties as to the timing of the consummation of the proposed Merger and the ability of each of the Company and Hudson to consummate the proposed Merger; risks related to the Company's ability to manage its operating expenses and its expenses associated with the proposed Merger pending closing; risks related to the market price of the Company's common stock relative to the value suggested by the exchange ratio; unexpected costs, charges or expenses resulting from the transaction; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed Merger; risks related to the inability of the combined company to success operate as a combined business; risks associated with the possible failure to realize certain anticipated benefits of the proposed Merger, including with respect to future financial and operating results; the Company's ability to consummate successful acquisitions and execute related integration; general economic and financial market conditions; failure to keep pace with evolving technologies and difficulties integrating technologies; system failures; losses of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; and the continued demand for and market acceptance of the Company's services. For a detailed discussion of cautionary statements and risks that may affect the Company's future results of operations and financial results, please refer to the Company's filings with

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