Business Context and Reporting Period
Company: Bridger Aerospace Group Holdings, Inc. (BAER)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter and six months ended June 30, 2026
Business Overview: Bridger provides aerial wildfire surveillance, relief, suppression, and airframe modification services. The company operates as a single segment with a fleet of 21 aircraft, primarily serving government agencies in the United States and Spain. The business is highly seasonal, with peak demand typically occurring in the second and third quarters.
Key Financial Metrics
| Metric (in thousands) | Q2 2026 | Q2 2025 | 6M 2026 | 6M 2025 |
|---|---|---|---|---|
| Revenues | $30,494 | $30,751 | $39,006 | $46,397 |
| Gross Income | $11,322 | $12,051 | $2,786 | $10,490 |
| Net (Loss) Income | $(498) | $308 | $(31,802) | $(15,230) |
| Loss Attributable to Common Stockholders | $(7,607) | $(6,328) | $(45,939) | $(28,427) |
| Adjusted EBITDA | $8,140 | $10,819 | $(6,340) | $5,744 |
| Cash and Cash Equivalents (End of Period) | $7,241 | $17,036 | $7,241 | $17,036 |
| Total Debt (Principal) | $245,037 | $222,492 | $245,037 | $222,492 |
| Series A Preferred Stock (Mezzanine Equity) | $421,394 | $393,376 | $421,394 | $393,376 |
Note: All figures in thousands except per share data. Loss per share (basic and diluted) for Q2 2026 was $(0.13) and $(0.82) for the six months ended June 30, 2026.
Material Changes vs. Prior Period
- Revenue Decline (6M): Revenues decreased 16% year-over-year to $39.0 million for the six months ended June 30, 2026. This was primarily driven by a 39% decrease in Maintenance, Repair, and Overhaul (MRO) revenue ($5.1 million decline) due to reduced return-to-service work on Spanish Scoopers, and a 99% drop in "Other services" revenue.
- Firefighting Growth (Q2): Despite the six-month decline, Q2 2026 saw a 19% increase in Fire Suppression revenue ($21.5 million) and a 36% increase in Aerial Surveillance revenue ($5.5 million) compared to Q2 2025, driven by increased flight hours.
- Widening Losses: Net loss for the six months ended June 30, 2026, widened to $31.8 million from $15.2 million in the prior year period. Adjusted EBITDA turned negative at $(6.3) million for the six-month period, compared to positive $5.7 million in 2025.
- SG&A Volatility: Selling, General, and Administrative (SG&A) expenses increased 46% year-over-year for the six-month period to $22.0 million. This increase was driven by higher workforce costs and a $2.7 million decrease in the fair value of contingent consideration in 2025 that did not recur in 2026. However, Q2 2026 SG&A decreased 19% due to a $3.7 million favorable change in warrant fair value and a $2.4 million reduction in stock-based compensation related to an executive separation.
- Liquidity Position: Cash and cash equivalents decreased significantly from $31.4 million at year-end 2025 to $7.2 million at June 30, 2026. Net cash used in operating activities was $36.8 million for the six months ended June 30, 2026.
Guidance, Outlook, and Risks
- Liquidity Outlook: Management believes existing cash, available borrowing capacity, and operating cash flows will be sufficient to fund operations for the next 12 months. The company has $11.5 million remaining on its Revolver and $75.7 million on its Delayed Draw Term Loan (DDTL).
- Debt Covenants: The company is in compliance with its Credit Agreement financial covenants as of June 30, 2026, including a Total Leverage Ratio cap of 7.00x and a minimum operating cash flow of $30.0 million.
- Seasonality and Climate: Results are heavily influenced by the North American fire season. Management notes that climate change trends (warmer springs, longer summers) are expected to increase the frequency and severity of wildfires, potentially driving future demand.
- Warrant Liability: The company has significant warrant liabilities (Public and Private Placement) classified as liabilities. As of June 30, 2026, the stock price ($1.92) was well below the exercise price ($11.50), making cash exercise unlikely in the near term.
- Contingencies: The company has a contingent obligation related to the Spanish Scoopers agreement with MAB. If the company does not purchase the remaining aircraft and they are not sold to a third party, the company may be liable for up to $15.0 million. No liability was recorded as of June 30, 2026.
Investor Verification Checklist
- Cash Burn Rate: Verify the sustainability of operations given the $36.8 million cash outflow from operations in the first half of 2026 and the drop in cash reserves to $7.2 million.
- Revenue Concentration: Confirm the stability of the top two customers, who accounted for 71% and 16% of Q2 2026 revenues, respectively.
- Debt Service Capacity: Assess the ability to meet the $30.0 million minimum operating cash flow covenant and the 7.00x leverage ratio given the current negative Adjusted EBITDA.
- Spanish Scooper Contingency: Monitor the status of the remaining two Spanish Scoopers and the potential $15.0 million liability exposure if they are not purchased or leased.
- Stock-Based Compensation Adjustments: Review the impact of the $3.3 million net reduction in stock-based compensation expense due to the executive separation agreement, noting that this is a non-recurring item.