INNOVATE Corp.

What they do

INNOVATE operates through three reportable segments: Infrastructure (DBM Global, a family of companies providing fully integrated structural and steel construction services), Life Sciences (Pansend, focused on healthcare and biotechnology product development), and Spectrum (HC2 Broadcasting Holdings, an operator of Over-The-Air broadcasting stations across the U.S. including Puerto Rico), plus an Other segment. The company has initiated sales processes for the Infrastructure and Spectrum segments to satisfy milestone covenants added to certain debt agreements in the third quarter of 2025.

Revenue drivers

• Infrastructure (DBM Global) — Structural and steel construction services; generated $414.0 million of the $421.6 million consolidated second-quarter 2026 revenue, making it effectively the whole company today.
• Spectrum (Broadcasting) — Operates over-the-air broadcast stations across the U.S. and Puerto Rico; classified as held for sale in the second quarter of 2026 and subject to a pending sale of a controlling interest.
• Life Sciences (Pansend) — Healthcare and biotechnology product development; the quarterly release cites MediBeacon's targeted TGFR system introduction at centers of excellence in the U.S. and China, and R2's expanding international presence.
• Other — Businesses and investments that do not meet separately reportable segment thresholds; described as limited remaining activities.

Recent performance

Second-quarter 2026 revenue was $421.6 million, up 74.2% from $242.0 million a year earlier, and six-month revenue was $786.4 million versus $516.2 million. Net income attributable to common and participating preferred stockholders was $10.4 million, or $0.71 diluted per share, compared with a $22.0 million loss in the prior-year quarter. DBM Global drove the quarter with revenue of $414.0 million (up 77.6%), net income attributable to INNOVATE of $26.4 million, and Adjusted EBITDA of $48.7 million versus $19.3 million. Total Adjusted EBITDA was $46.3 million, up 194.9% year over year. Reported and adjusted DBMG backlog was $1.9 billion and $2.7 billion, respectively, at June 30, 2026.

Strategy

Management is executing courted disposals: a sales process for all or substantially all of DBMG's assets or equity interests, and a definitive agreement to sell a controlling interest in Broadcasting to CONX CORP., after which CONX is expected to own approximately 75% and INNOVATE approximately 25%. If both transactions close, the company says substantially all consolidated operating revenue would be eliminated and assets would consist largely of net cash or proceeds, a minority interest in the surviving entity, the remaining Life Sciences segment and limited Other activities. The stated near-term focus is strengthening the balance sheet, repaying or managing debt obligations triggered by a DBMG change of control, and building value in remaining segments organically and inorganically. Management has said it would use proceeds from strategic transactions to address the capital structure.

Risks

• Going-concern and covenant risk — The company disclosed substantial doubt about its ability to continue as a going concern, and failure to complete sufficient asset sales, including a DBMG sale, would put it in violation of debt covenants absent waivers.
• Debt repayment triggered by DBMG sale — A Potential DBMG Sale triggers change-in-control provisions of the DBMG Credit Agreement and repayment or other obligations under the Revolving Line of Credit, the 10.50% 2027 Senior Secured Notes and the 2027 Convertible Notes; a cash shortfall could delay or prevent closing.
• Revenue elimination after disposals — If the Spectrum Merger and a DBMG sale are consummated, substantially all consolidated operating revenue would be eliminated, leaving income dependent on minority-investment distributions and interest on cash.
• Balance sheet deficit — As of June 30, 2026, total liabilities of $1.23 billion exceeded total assets of $1.01 billion, producing shareholder equity of negative $243.2 million.

Outlook

Management expects the pending Spectrum sale and any DBMG sale to substantially reshape the business, so it cautions that past results are not a reliable indicator of future performance. After those transactions, the company expects its primary income to be dividends or distributions from minority investments and interest on marketable securities and cash. Interim CEO Paul Voigt said the company remains focused on strengthening its balance sheet, advancing growth initiatives and creating long-term shareholder value. No specific revenue or earnings guidance was provided.