INNOVATE Corp. Q2 FY2025 earnings call

• INNOVATE delivered consolidated revenues of $242 million and adjusted EBITDA of $15.7 million in Q2 2025. - Took steps to refinance debt to extend maturities. - DBM Global's adjusted backlog increased y-o-y to over $1.3 billion, with a project adding ~$400 million to backlog in Q3. - R2's revenue increased due to more shipments outside North America, and Glacial Skin showing strong patient treatment and social media growth. - Spectrum launched new networks and is exploring data casting using ATSC 3.0 and 5G broadcast.

Infrastructure: DBM Global achieved revenues of $233.1 million and adjusted EBITDA of $19.3 million in the second quarter. Revenue decreased 23.6% compared to the prior year. Gross margin compressed by ~230 basis points to 17.9% and adjusted EBITDA margin by ~240 basis points to 8.3% year-over-year. Adjusted backlog increased ~$300 million y-o-y to over $1.3 billion, with a sizable project adding ~$400 million to backlog in Q3. Life Sciences: R2 saw top line revenue increase to $3.2 million in Q2 2025 from $1.7 million in Q2 2024, driven by increased shipments outside North America. Patient treatments for Glacial Skin grew 115.1%, average monthly utilization per provider up 28.5%, social media mentions up 51.6%, and web users up 140.6%. MediBeacon's transdermal GFR monitoring systems progressing, with certain products approved. Spectrum: Second quarter revenues were $5.7 million, adjusted EBITDA $1 million, down y-o-y. Recent launches of networks like Marathon Ventures Nosey, Confess, and Lionsgate's MovieSphere Network, with ad sales softness improving, and exploring data casting opportunities.

• DBM Global expected to remain well positioned in H2 2025 with strong backlog and robust pipeline. - R2 expected to have another strong quarter in Q3 with its backlog of ~50 units globally. - Spectrum anticipated more over-the-air network content, especially from the streaming space, with improving ad sales outlook for Q4 2025.

• Margin compression in Infrastructure segment, with gross margin and adjusted EBITDA margin decreasing year-over-year. - Fluctuating tariff situation could impact DBM Global's projects. - Regulatory approvals for MediBeacon's products, like Lumitrace, being on track but still a risk. - Economic volatility could affect ad sales in Spectrum segment.

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