Star Equity Holdings, Inc. recently disclosed its financial outcomes for the second quarter of 2026, alongside announcing a significant strategic maneuver: the acquisition of Harte Hanks. This move, valued at approximately $38 million, aims to bolster Star Equity's presence in business process outsourcing, particularly in customer care and logistics. While the Energy Services division demonstrated robust growth through diversification, the Building Solutions segment grappled with market headwinds. Company leadership emphasized surpassing merger synergy goals from a prior acquisition and outlined a financing strategy for the new acquisition that avoids diluting common shares, underscoring a commitment to digital transformation and rigorous operational management.
The second quarter of 2026 presented a mixed financial landscape for Star Equity Holdings. Total revenue surged to $54.9 million, marking a 54.6% increase from the previous year. However, the company recorded a net loss attributable to common shareholders of $2.5 million, or $0.66 per diluted share. Adjusted EBITDA, a key measure of operational performance, improved to $2.2 million from $1.3 million year-over-year, despite falling short of the pro forma $8.5 million in Q2 2025. This was primarily influenced by strategic investments in the Business Services sector.
The Business Services division, including Hudson Talent Solutions, saw its revenue climb to $36.4 million, a modest 2% rise, despite a challenging professional talent market. Investments totaling $1.5 million were channeled into the Hudson Fusion digital platform and geographic expansion, reflecting the company's long-term growth strategy. Conversely, the Building Solutions division experienced a revenue decline to $14.6 million, down from a pro forma $20.4 million, impacted by a soft construction market and project delays. Despite these challenges, the division's order intake reached $17.3 million, the highest since Q2 2025, and its backlog improved to $10.6 million.
A standout performer was the Energy Services division, which posted a 19% revenue increase to $3.9 million, along with a 126% jump in Adjusted EBITDA to $1.2 million. This growth was attributed to enhanced tool utilization and new client engagements in the geothermal and mining industries. Looking ahead, Star Equity aims to leverage the Harte Hanks acquisition to achieve approximately $400 million in combined revenue and $30 million in Adjusted EBITDA, factoring in $10 million in projected cost synergies. The acquisition is expected to close in the fourth quarter of 2026, pending regulatory approvals and a 30-day "go-shop" period.
In addition to the acquisition, the company is actively repurchasing shares, having allocated $0.2 million in Q2, with $1.6 million remaining under its current authorization. Management believes the stock remains undervalued and views buybacks as an attractive capital allocation strategy. The company also holds $215 million in usable U.S. Net Operating Loss (NOL) carryforwards, which it plans to utilize to boost after-tax returns. These strategic initiatives, including digital innovation and market diversification, are poised to strengthen Star Equity's competitive standing and drive future financial improvements.
