Detailed narrative
Broadcasting Strategic Transaction
During the quarter, Broadcasting completed a refinancing transaction providing $105 million of financing, used to retire existing debt, repurchase equity interests, and fund transaction costs. This significantly improves the segment's balance sheet. Additionally, INNOVATE entered a definitive agreement with CONX Corp. for CONX to acquire a controlling interest (approximately 75%) in Broadcasting, with INNOVATE retaining 25% and an option to increase to 40%.
CONX has committed up to $75 million of post-closing equity capital, and the refinancing loan is expected to be extinguished upon closing. The transaction is subject to regulatory and SEC approvals.
Infrastructure Segment Record Performance
DBM Global achieved a record second quarter with $414 million in revenue, a 77.6% increase year-over-year, and adjusted EBITDA of $48.7 million, up from $19.3 million in the prior year. Gross margin improved by 60 basis points to 18.5%, and adjusted EBITDA margin increased by 350 basis points to 11.8%.
The segment's adjusted backlog grew to $2.7 billion, providing strong revenue visibility and reflecting exceptional execution and continued strength in its end markets.
Infrastructure End Market Strength and Pipeline
DBMG's sales activity remained healthy, driving meaningful backlog growth and positioning the business for continued success. Key drivers of activity include data centers, technology, healthcare, and New York City, fueled by sustained investment in physical infrastructure tied to computing artificial intelligence, advanced manufacturing, semiconductor production, energy systems, and digital connectivity.
The company has a robust pipeline of opportunities expected to be awarded in the second half of the year, supporting backlog well into 2027 and 2028.
Life Sciences (MediBeacon) Commercial and Regulatory Progress
MediBeacon continued to advance the commercial rollout of its TGFR systems across the United States and internationally, expanding placements at leading healthcare institutions and completing training at academic medical centers. Commercial engagement is strong, with discussions ongoing with over 100 healthcare institutions.
The company is also engaging with CMS and commercial payers to support reimbursement pathways and is conducting studies under Investigational Device Exemption (IDE) for heart failure and renal function reserve applications. Internationally, MediBeacon has CE mark approval in Europe and is progressing commercialization in China.
Life Sciences (R2) Global Demand and Operational Expansion
R2 demonstrated strong global demand, reaching $3.6 million, with $2.2 million in revenue recognized during the quarter. The company exited the quarter with a backlog of approximately 110 systems globally, representing $1.4 million of future revenue. R2 expanded its global presence by securing registrations for Glacial Rx in Thailand and Malaysia, initiating in-country testing in Korea for a planned Glacial FX launch, and advancing manufacturing transfer to EIT, expected to reach first production build soon.
The company has also improved sales productivity and reduced costs.
Consolidated Financial Overview
Consolidated total revenue for Q2 FY26 was $421.6 million, a 74.2% increase from $242 million in the prior year, primarily driven by Infrastructure. Net income attributable to common stockholders increased to $10.4 million ($0.71 per diluted share) compared to a net loss of $22 million ($1.67 per diluted share) in the prior year.
Total adjusted EBITDA was $46.3 million, up from $15.7 million, mainly due to Infrastructure and Life Sciences, partially offset by Spectrum. The company had $87.8 million in cash and cash equivalents as of June 30, 2026, and total principal outstanding indebtedness of $626.4 million.