SPAR Group (SGRP) Q1 2026 earnings summary

Executive summary

• Net revenues for Q1 2026 were $30.5 million, down 10.3% year-over-year, primarily due to reduced US Remodel activity, while US merchandising revenue grew 5% and Canada revenue increased 3%.

• Achieved positive EBITDA and gross margins of 22.3%, up from 21.4% in the prior year, reflecting a shift to higher margin recurring merchandising revenue.

• Net loss was $553,000 ($0.02/share), compared to net income of $462,000 ($0.02/share) in Q1 2025.

• Adjusted EBITDA was $737,000, down from $1.5 million in the prior year.

• Settlement agreement reached with a co-founder and former CEO, closing a legacy chapter and aligning management.

Financial highlights

• Gross profit: $6.8 million (22.3% margin), up from 21.4% in prior year.

• SG&A expenses: $6.2 million, but normalized SG&A declined $1.9 million versus 2025 quarterly average.

• Operating loss: $42,000, compared to $1 million operating income in prior year.

• Cash and cash equivalents: $4.3 million as of March 31, 2026.

• Net cash used by operating activities: $3.9 million, mainly due to working capital timing and higher accounts receivable.

Outlook and guidance

• Fiscal 2026 revenue guidance: $143–$151 million; gross margin guidance: 20.5%–22.5%; SG&A (excluding unusual items): $25.5–$26.5 million.

• Q2 and Q3 expected to be the strongest quarters; Q4 traditionally weaker.

• Most remaining 2026 revenue is under contract or highly confident forecast.

• Targeting 25% gross margins over the next 18–24 months.

• Management expects sufficient liquidity for the next 12 months, assuming continued access to credit facilities and stable operations.