WidePoint Corporation (WYY) - Q2 2026 10-Q Summary
Business Context and Reporting Period
WidePoint Corporation is a provider of Technology Management as a Service (TMaaS), specializing in federally compliant mobile technology asset lifecycle management, identity management, and IT as a Service. The company operates as a single segment serving primarily U.S. federal government agencies. This report covers the quarterly period ended June 30, 2026.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Revenues | $38.0 million | $37.3 million | $78.6 million | $70.8 million |
| Gross Profit | $5.8 million | $5.1 million | $11.4 million | $9.9 million |
| Gross Margin | 15.4% | 13.7% | 14.6% | 14.0% |
| Net Income (Loss) | $66,420 | $(618,459) | $143,380 | $(1,342,522) |
| EPS (Diluted) | $0.01 | $(0.06) | $0.01 | $(0.14) |
| Cash & Equivalents | $10.0 million (as of June 30, 2026) | |||
| Working Capital | $2.8 million (as of June 30, 2026) | |||
| Debt | $0 outstanding on $4.0M credit facility |
Material Changes vs. Prior Period
- Revenue Growth: Q2 2026 revenue increased 2% year-over-year, driven by a $1.8 million increase in Carrier Services revenue due to growth in phone lines managed for the Department of Homeland Security (DHS). Managed Services revenue declined 7% due to the absence of non-recurring revenues booked in Q2 2025.
- Profitability Turnaround: The company reported a net income of $66,420 in Q2 2026, a significant improvement from a net loss of $618,459 in the same period in 2025. This was driven by improved gross margins in Managed Services (36% vs 30% prior year) and higher interest income.
- Expense Management: General and Administrative (G&A) expenses remained relatively flat despite revenue growth, partially due to the deferral of approximately $0.7 million in internal IT labor costs related to a long-term customer contract implementation.
- Cash Flow: Net cash used in operating activities was $1.0 million for the six months ended June 30, 2026, compared to $55,000 in the prior year period, primarily driven by an increase in accounts receivable and unbilled receivables.
Outlook, Risks, and Contingencies
- CWMS 3.0 Contract Protest: On June 24, 2026, WidePoint was selected as the sole awardee of the DHS Cellular Wireless Managed Services (CWMS) 3.0 contract, a 10-year IDIQ with a ceiling of approximately $3.1 billion. However, a post-award protest was filed on June 29, 2026. The outcome is uncertain, and the contract is not yet fully operational.
- Contingent Compensation: Management anticipates potential cash incentive compensation of up to $0.6 million and stock-based compensation of up to $0.4 million contingent upon the final resolution of the CWMS 3.0 protest in the company's favor.
- Compliance Costs: As the company transitions from a smaller reporting company to an accelerated filer, it expects incremental compliance costs (audit, legal, personnel) of approximately $0.8 million in the second half of 2026.
- Liquidity: The company maintains $10.0 million in unrestricted cash and has access to a $4.0 million revolving credit facility (currently unused). Management believes these resources are sufficient for the next 12 months.
Investor Verification Checklist
- Contract Protest Status: Monitor the resolution of the GAO protest regarding the $3.1 billion DHS CWMS 3.0 contract, as this is a critical growth driver.
- Deferred Costs Recognition: Track the timing of the "go-live" for the long-term customer contract to understand when the $0.7 million+ in deferred IT labor costs will be amortized to Cost of Revenue.
- Accounts Receivable Aging: Review the composition of the $41.8 million in unbilled receivables (99% related to U.S. Federal Government) to assess collection risks and cash flow timing.
- Accelerated Filer Transition: Verify the actual impact of increased compliance costs on future operating margins as the company moves to accelerated filer status.