Star Equity Holdings, Inc.

What they do

Star Equity runs four reportable segments. Building Solutions includes KBS Builders (modular buildings in Maine/New England), EdgeBuilder and Glenbrook (structural wall panels, engineered wood products and lumber distribution in the Upper Midwest, together 'EBGL'), and Timber Technologies Solutions (glue-laminated timber). Business Services is Hudson Talent Solutions, LLC (HTS), providing RPO, project RPO, contingent workforce, contract staffing and MSP services to mid-to-large multinationals, while Energy Services is Alliance Drilling Tools, Inc. (ADT), which makes drilling tools and downhole equipment for directional drilling. The Investments segment holds corporate-owned real estate and a small number of public and private investments.

Revenue drivers

• Building Solutions — Construction products and modular building manufacturing through KBS, EBGL (EdgeBuilder/Glenbrook) and Timber Technologies Solutions, serving New England and the Upper Midwest. Q2 2026 revenue was $14.6 million with $3.2 million gross profit and $0.5 million adjusted EBITDA, and quarter-end backlog was $10.6 million.
• Business Services (Hudson Talent Solutions) — Recruitment process outsourcing, contingent workforce and professional contract staffing for mid-to-large multinational clients. Management said Q2 2026 revenues rose modestly year-over-year with gross profit down 4%, with Americas growth offsetting softer Asia Pacific and EMEA conditions.
• Energy Services (Alliance Drilling Tools) — Manufactures specialized drilling tools and downhole equipment used in directional drilling for oil and gas, plus mining, geothermal and water wells. Management cited strong year-over-year gains in revenue, gross profit and adjusted EBITDA on activity increases and new client wins in geothermal and mining.
• Investments — Holds corporate-owned real estate and a limited number of publicly traded and private company investments. This segment produced a $5.5 million realized gain in the second quarter of 2025, which inflated prior-year pro forma adjusted EBITDA.

Recent performance

Second quarter 2026 revenue was $54.9 million, up 54.6% from the second quarter of 2025, with gross profit of $22.8 million, up 22.3%. Net loss attributable to common shareholders was $2.5 million, or $0.66 per diluted share, versus a $0.7 million loss, or $0.23 per diluted share, a year earlier. Adjusted EBITDA rose to $2.2 million from $1.3 million in Q2 2025, though pro forma Q2 2025 adjusted EBITDA was $8.5 million including a $5.5 million Investments gain. Total cash including restricted cash was $8.9 million at June 30, 2026. Full-year 2025 revenue was $172.2 million with a net loss of $6.7 million and operating cash flow of negative $7.3 million.

Strategy

Star positions itself as a diversified holding company where corporate management handles capital allocation, strategic oversight, M&A, capital markets and investor relations, while subsidiaries run day-to-day operations and organic growth. Management said it realized $3.0 million of annualized merger synergies from the August 2025 Star Operating Companies combination and is actively evaluating M&A opportunities across all three operating divisions. The company cites a $215 million U.S. net operating loss carryforward as of December 31, 2025 that it expects to enhance after-tax returns on future growth and transactions. Building Solutions is targeting workforce, affordable and assisted-living senior housing, and management highlighted the previously announced $4.2 million New Hampshire multifamily project. HTS is expanding deployment of agentic AI and automation tools to improve recruiter productivity and candidate matching.

Risks

• Construction market softness — Building Solutions missed expectations in Q2 2026 on market softness and contract timing, with a trailing 12-month book-to-bill ratio of 0.77.
• Talent market and macroeconomic pressure — Demand for RPO and contracting services is tied to client hiring, and management cited continued macroeconomic uncertainty and sustained pressure in the professional talent market.
• Losses and negative operating cash flow — The company reported net losses of $4.8 million in 2024 and $6.7 million in 2025, with operating cash flow of negative $2.8 million and negative $7.3 million in those years.
• Inflation, interest rates and geopolitics — The 10-K states inflationary pressure has raised costs for labor, raw materials and transportation, and that tariffs, U.S./China trade tensions and conflicts including the war in Ukraine and war in Iran create demand and supply-chain uncertainty.

Outlook

Management said it remains focused on disciplined execution, cost management and returns-driven capital allocation, including active evaluation of M&A across all three operating divisions. It expects Energy Services momentum from geothermal and mining client wins to continue, and said one large Building Solutions project largely constructed in Q2 2026 will now be recognized mainly in Q3. HTS expects its AI and automation initiatives to support productivity while it waits for improving talent market conditions.