AIAI's first quarter after its direct listing: revenue, 95% from a Texas civil contractor, fell 10.6% to $58.3M, with a $40.9M net loss driven by deal costs and amortization of a related-party AI license.
Revenue
$58M
-10.6% YoY
Net income
-$41M
Diluted EPS
$-0.56
Operating margin
-78.0%
This period vs a year ago
Same period last year
This period
Revenue▼-10.6%
≈$65M
$58M
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
A Texas construction firm with an AI label, and a $40.9 million quarterly loss
AIAI Holdings went public on Nasdaq through a direct listing on May 14, 2026. A direct listing means existing shares simply start trading; no new money is raised from investors. Eight days earlier, on May 6, it bought six private companies in exchange for its own stock. The name suggests an AI software business. The numbers show something else: in the second quarter, about 95% of revenue came from C.C. Carlton Industries (CCCI), a civil construction contractor in Central Texas that builds roads, utilities and site work. That business shrank. Combined revenue fell 10.6% to $58.3 million, and the company lost $40.9 million, against a $0.6 million profit a year earlier. Most of the loss is accounting and deal costs, not cash, but the underlying business also went from positive to negative on management's own adjusted measure.
At a glance
$58.3 million revenue, down 10.6%. Construction revenue fell about $10.0 million because projects started late, the mix shifted toward lower-value public utility work, and bad weather slowed crews. The five newly acquired non-construction businesses added about $3.1 million.
$40.9 million net loss. $20.6 million of one-time deal and listing costs and $17.6 million of amortization (a non-cash charge that spreads the cost of acquired intangible assets over time) explain most of it. Of that amortization, about $14.5 million relates to an AI technology license bought from a company controlled by the founder.
Adjusted EBITDA of -$2.5 million, versus +$2.4 million a year ago. This is the company's own "cash-like" profit measure, which strips out those charges. Even on that generous basis, the business lost money this quarter.
How to read these numbers
The 10-Q splits the quarter into two legal pieces, which is why a normal year-on-year comparison is awkward:
April 1 to May 6, 2026 ("Predecessor"): CCCI on its own, before the deal.
May 7 to June 30, 2026 ("Successor"): AIAI plus all six acquired companies.
The comparison figure (April to June 2025) is CCCI alone. Management adds the two 2026 pieces together into a "combined" quarter. That sum is not a GAAP figure (GAAP being the standard US accounting rules), but it is the only way to compare with last year, and it is what the table below uses unless noted.
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Metric
Q2 2026 (combined)
Q2 2025 (CCCI only)
YoY Change
Revenue
$58.3M
$65.2M
-10.6%
Gross profit
$4.9M
$6.8M
-27.8%
Gross margin
8.5%
10.5%
-2.0 pts
Operating income (loss)
-$45.5M
$0.9M
n/m
Operating margin
-78.0%
1.3%
n/m
Net income (loss)
-$40.9M
$0.6M
n/m
EPS (diluted), May 7 to June 30 only
-$0.56
n/a (was a partnership)
n/a
Adjusted EBITDA (company measure)
-$2.5M
$2.4M
-$4.9M
Remaining contracted work (backlog), June 30
$186.8M
n/d
n/a
Gross margin is the share of revenue left after the direct costs of doing the work (labor, materials, subcontractors). Operating margin is what's left after all operating costs, before interest and tax. "n/m" means the percentage change isn't meaningful because the sign flipped. EPS only covers the 55 days after the listing, because before May 7 there were no public shares.
What the business actually is
AIAI describes itself as a company that buys businesses and improves them with AI technology it licenses. After the May 6 deals it owns:
CCCI – civil construction in Central Texas. It brought in $55.2 million of the combined quarter's $58.3 million revenue.
Constellation Network – blockchain-based data verification. It also holds and stakes crypto tokens (it earns tokens for helping run a blockchain network).
Bond Street – sells and leases copiers, scanners and printers.
MediGuide and Vanguard Health Solutions – telehealth, medical second opinions, and case management for accident victims.
AI Research Corporation (AIR) – mathematical and scientific research aimed at AI.
In the 55 days after the deal, healthcare brought in $1.2 million and technology (Constellation plus Bond Street) $1.9 million, against $36.0 million from construction. The AI element is not yet a revenue line. The filing describes the AI plan as expected ("should enable faster revenue recognition"). It does not report any revenue from AI products or any measured cost savings.
Why construction revenue fell
The MD&A (management's discussion section of the 10-Q) says CCCI's revenue fell about $10.0 million. It gives three reasons: "delays in awarded project launches," fewer early-stage projects underway, and "a shift in project mix toward publicly bid utility projects," which pay out more slowly and carry "lower contract values and margins." Weather also held back work. Management says new awards "remained strong," but projects started late in the quarter "due to market uncertainty and cost volatility."
Margins fell by more than revenue. CCCI kept its full workforce through the slowdown ("irrespective of construction slowdowns"), so labor costs stayed in place while revenue dropped. Fuel and material price increases "could not be passed on to customers." As a result, the direct cost of the work rose from 89% to 91% of revenue for the quarter. For the first half it went from 88% to 92%.
What the headline numbers hide
Most of the loss is non-cash or one-time, but not all of it. Management's adjusted EBITDA adds back $20.6 million of acquisition and listing costs, $19.0 million of depreciation and amortization, $2.2 million of stock pay, $0.6 million of pre-deal transaction costs at CCCI, a $0.5 million crypto loss and a $5.7 million tax benefit (subtracted). About $14.3 million of the deal costs was paid in shares rather than cash. Even after all of that, the quarter comes out at -$2.5 million, against +$2.4 million a year ago. The underlying operation lost money.
The amortization charge is permanent, not a one-off. The filing projects $58.5 million of intangible amortization for the second half of 2026, then about $115 million a year from 2027 to 2030. That compares with roughly $230–250 million a year of revenue at the current run-rate. Most of it comes from the AI license, carried at $481.0 million gross and written off over 5 years. So GAAP profit is very unlikely in the near term, even if operations recover.
Cash went out, not in. Operating cash flow was -$14.3 million for the combined first half, against +$8.8 million a year earlier. Cash fell to $11.2 million at June 30 from $15.6 million at December 31. That happened even though the deals brought in $13.5 million of cash from the acquired companies. Contract assets, meaning work already booked as revenue but not yet billable to the customer, nearly tripled to $41.7 million from $14.6 million. The MD&A calls this a "$25.6 million unfavorable change" in cash flow. Revenue recognized ahead of billing is normal in construction, but a jump this size while revenue fell is worth watching.
Current liabilities exceed current assets. On the balance sheet, current liabilities are $108.3 million and current assets are $81.8 million, a gap of $26.5 million. The MD&A describes working capital as "a surplus of $26.5 million," which does not match the balance sheet. The balance sheet includes $20.6 million of contingent consideration that will be paid in shares, not cash; excluding it, the gap is still about $5.9 million. In a separate place, the MD&A says adjusted EBITDA was "negative $3.6 million in Combined Current Quarter… from $6.8 million". Those are the six-month figures, not the quarter's.
Heavy dealings with the founder's own companies. AIAI issued 25.1 million shares to Messier 42 (M42), a company controlled by founder John P. Rochon, for a perpetual AI license valued at $379.3 million. It issued another 16.3 million shares, valued at $246.0 million, for non-voting preferred stock in an entity whose main asset is about 5.4% of M42. Together that is 41.4 million of the 69.7 million Class A shares outstanding. The founder also lent $7.1 million at 4% (interest added to the loan rather than paid in cash; not due before September 30, 2027) and contributed $4.1 million of capital. From about August 2027, M42 will charge a technology-services fee of 3% of AIAI's total annual revenue, payable in cash or shares. The first 15 months are free.
Founder control and dilution. The founder holds 7.6 million Class B shares. They carry voting control but no economic rights. Other equity still to come: contingent shares worth an estimated $20.6 million owed to Vanguard's former owners if revenue targets are hit, $2.0 million of shares owed to service providers, and 3.75 million already-vested replacement options.
Internal controls are not effective. Management concluded its disclosure controls were "not effective." It cites material weaknesses at CCCI in IT controls, segregation of duties, and the number of staff with public-company accounting expertise. A material weakness means a real risk that a significant misstatement is not caught. Remediation has started.
Pro forma view. Pro forma figures restate history as if all six companies had been owned since January 1, 2025. On that basis, Q2 2026 revenue was $61.5 million, against $70.1 million a year earlier, and the net loss was $58.6 million, against $23.0 million.
Takeaway: Despite the name, AIAI is today mostly a Central Texas civil contractor, and that business shrank and lost money this quarter. On top of it sit roughly $115 million a year of amortization from a related-party AI license and other deal intangibles, plus a future fee to the founder's company of 3% of revenue. Operating cash flow and adjusted EBITDA both turned negative, cash is $11.2 million, and near-term funding depends on the founder, credit lines and selling new shares.
After the quarter: a $200 million share-sale facility
On September 18, 2026, AIAI signed an agreement with B. Riley Principal Capital II. It lets AIAI sell up to $200 million of new Class A shares to B. Riley over up to 36 months, at a 3.0% discount to the market price, once a resale registration is effective. AIAI chooses whether and when to sell. Sales are capped at 19.99% of the shares outstanding unless stockholders approve more or a Nasdaq pricing exception applies, and B. Riley can't own more than 4.99% at any time. AIAI also issued 182,927 shares to B. Riley as a commitment fee. This kind of facility gives the company a source of cash, but every sale adds new shares and reduces existing holders' percentage of the company.
Outlook
Management gives no revenue or profit guidance. What the filing does say:
Backlog: $186.8 million of contracted work not yet done, of which $186.1 million is expected within 12 months. At the current run-rate that is roughly three quarters of revenue. It supports a rebound in construction revenue if the delayed project starts turn into work. The second and third quarters are normally CCCI's strongest.
Funding: management expects cash on hand, cash from operations, credit lines, "financial support from our Founder" and capital markets to be enough for the next 12 months. It also says its acquisition and AI rollout "will require additional capital." CCCI's $8.0 million credit line was fully drawn at June 30, and its $16.6 million revolving note had $13.8 million outstanding.
Our read: the next report (Q3 2026) will be the first full quarter of combined results. Three things to watch: whether construction margins recover toward last year's roughly 11%; whether contract assets start turning into billings and cash; and how many shares are sold through the B. Riley facility. The AI plan can only be checked once the filing shows revenue or measured cost savings attributed to it. Until then, it is a stated intention, not a result.