Episode Details

York Space Systems (YSS) Q2 2026 — Q2 2026 (ended June 30; 8-K accepted 4:06pm ET Aug 13, after the close, so Aug 14 is the reaction): revenue $92.5M up 10.4%, gross margin 24% from 11%, GAAP loss per share $0.31. Full-year guidance cut from $545M-$595M to $375M-$405M. The stock fell 5.04% to $10.93. York grew revenue 52% in 2025, IPO'd in January 2026, and guided the year to $545M-$595M - reaffirming it word for word on May 14. On August 13 it cut to $375M-$405M. Growth did not slow. It stopped. THE CALL: SELL (3/5, REAL FRANCHISE, GROWTH GUIDE AT ZERO) — base-case value ~$9.43 vs ~$10.93 today. KEY METRICS: - CALL: SELL, 3/5. Fair value about $9.43 vs the $10.93 close on Aug 14, roughly 14% lower. Bear $6.38, base $9.33, bull $13.51 (25/55/20) on 2027 revenue of $430M/$500M/$650M at 1.5x/2.1x/2.5x EV-to-sales plus net cash. The Street disagrees: 4 buy, 3 hold, 0 sell across 7 firms, consensus target $33.38. A call on the revision cycle, not on solvency. - THE QUARTER (ended Jun 30, 2026): revenue $92.5M, up 10.4% but DOWN 20.5% from Q1's $116.3M. Gross profit $22.2M vs $9.5M, a 24% margin against 11%; cost of revenue FELL 5.3%. GAAP loss per share $0.31 vs $0.25; York reports no adjusted EPS. Adjusted EBITDA minus $9.5M vs minus $8.9M - WORSE, because SG&A rose $15.0M, more than the entire $12.7M gross profit gain. - THE GUIDANCE ROUND-TRIP: FY2026 revenue guidance was $545M-$595M on March 19, REAFFIRMED verbatim on May 14, then cut to $375M-$405M on August 13 - minus $180M at the midpoint (31.6%), and 30.1% below the $557.6M consensus. Against FY2025 actual revenue of $386.2M the new range is minus 2.9% to plus 4.9%, after York grew 52.3% in 2025. - THE IMPLIED SECOND HALF: first-half revenue was $208.9M, so the guide leaves $166.1M-$196.1M for H2 against $196.1M in H2 2025 - minus 15.3% at the low end. At the VERY TOP of management's own range the implied second half is $196.110M against $196.112M a year ago: flat to within two thousand dollars. The best case in the range is no growth. - WHY IT HAPPENED: 91% of Q2 revenue came from ONE customer, down from 96%. York became the first performer to COMPLETE its T1TL deliveries, putting 21 more satellites on orbit for a 42-for-42 record. The program that is essentially the whole revenue line is finished; follow-on work moves to IDIQ vehicles management concedes are slow to start. Backlog fell 7.8% to $592.0M. - THE COVENANT NOBODY READS: the Nov 2025 credit agreement sets a MINIMUM REVENUE covenant, trailing twelve months, tested quarterly. The Dec 31, 2026 test is $372.5M, and at a calendar year end that figure IS full-year revenue. The low end of the new guide, $375.0M, clears it by 0.7%. The March-guide cushion was $197M; now $17.5M. NOT a default warning: equity cures and a leverage toggle exist; York was in compliance at June 30. - THE CASH, AND WHO FUNDED THE WORK: contract liabilities - customer cash collected in advance - fell $110.3M to $18.2M. Roughly 51% of the $186.6M first-half operating burn was the float unwinding. Receivables went $11.5M to $55.8M, unbilled contract assets $76.8M to $115.0M. Cash was $534M at June 30, but All.Space took $155M out on July 8, so pro forma cash is about $379M, or $231M net of the term loan. What to watch: UP: a funded task order York must quantify in a filing, or 2027 guidance above the $617.0M minimum-revenue level its lenders set. DOWN: another quarter of falling backlog with task orders unfunded. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.