AMPG — Q2 2026 Financial Report Analysis

Revenue fell 27% as last year's one-off 5G order didn't repeat, and spending nearly doubled

AmpliTech Group, a Long Island maker of radio-frequency amplifiers and microwave components that also distributes chip packaging through its Spectrum unit, reported second-quarter 2026 revenue of $8.07 million, down 26.8% from $11.03 million a year earlier. The drop is less alarming than it looks. Last year's quarter was swollen by low-margin 5G radio sales fulfilled from orders that came with the Titan Crest asset purchase in April 2025, and those didn't recur. Excluding that, the underlying businesses grew: Spectrum's distribution sales more than doubled, and the core amplifier and passive-component lines rose 42.7%. The net loss still widened, to $3.09 million from $1.77 million, because operating expenses rose 95% to $5.45 million as the company spent on 5G product development, marketing, stock-based pay and amortization of the Titan assets.

At a glance

• Gross margin of 27.9%, up from 7.8% — the share of revenue left after paying for the goods sold. The improvement comes from not repeating last year's thin-margin 5G pass-through sales, but it is down sharply from the roughly 48% implied for Q1 2026.
• Operating expenses of $5.45 million against $2.25 million of gross profit — the company spends well over twice what its products earn, so revenue has to grow a lot before the business breaks even.
• About $33 million of cash and Treasury bills on a simple pro forma basis — $12.95 million at June 30 plus about $20.1 million of net proceeds from rights exercised in July, or close to two years at the first half's pace of cash burn (about $9.2 million including capital spending).

Key figures

For the first half, revenue was $13.42 million (-8.2%), gross margin 35.9% (vs 14.0%), and the net loss $4.61 million (vs $3.61 million).

What drove the quarter

The 5G comparison. In the year-ago quarter AmpliTech booked revenue from fulfilling sales orders it acquired along with Titan Crest's 5G O-RAN radio intellectual property (O-RAN is an open standard for mobile-network radio equipment). The 10-Q says the year-over-year drop in 5G sales is "primarily attributable" to that. You can see it in the segment and geography split: manufacturing and engineering revenue fell from $9.32 million to $4.01 million, almost entirely in international sales, which dropped from $8.67 million to $3.00 million. That prior-year revenue carried almost no profit — the whole company's gross margin was 7.8% — so losing it cost little profit.

Distribution carried the quarter. Spectrum, which distributes integrated-circuit packages and lids used to assemble chips, grew sales to $4.06 million from $1.71 million, which management attributes to "higher sales volumes through distribution channels." It was the only profitable segment, earning $1.13 million of segment net income at a gross margin of about 43.6%.

The core amplifier business is small but growing. Sales of amplifiers and related passive microwave components and subsystems rose $328,260, or 42.68%, per the MD&A. That puts the legacy product line at about $1.1 million a quarter — real growth, but on a small base.

Spending stepped up across the board. SG&A (selling, general and administrative costs) rose 91% to $4.08 million. The filing cites higher parent-company costs, "including increased amortization expense, legal fees and stock-based compensation," plus trade shows (IMS, Network X) and two consultants hired to market the 5G product line. R&D more than doubled to $1.37 million, of which $1.08 million was 5G work (prototypes, testing, consultants) and $0.30 million was MMIC chip design.

What the headline numbers hide

• About half of the operating loss is non-cash. Stock-based compensation was $0.92 million in the quarter (vs $0.10 million a year ago), and depreciation and amortization was $0.54 million; amortization of intangible assets alone rose to $0.42 million from $0.15 million, mostly the Titan IP. Strip those out and the operating loss is about $1.7 million. That is a smaller loss, but still a loss, and stock pay dilutes shareholders even though it uses no cash.
• Cash burn ran well ahead of the accounting loss. For the first half, operating cash flow was -$8.68 million against a net loss of $4.61 million. Three things widened the gap: receivables up $2.90 million, prepaid expenses up $1.39 million, and $1.61 million of new long-term deposits. The deposits are advance payments for dedicated production capacity, a planned "5G technology campus" and an IoT disinfecting sprayer, and none of these are operating yet. Last year's first half also looked better because payables rose $4.41 million; this year they rose just $0.08 million.
• Receivables grew while sales shrank. Accounts receivable stood at $6.25 million at June 30, up from $3.35 million at December 31, even though first-half revenue fell 8%. Part of this reflects a strong June quarter (revenue up about 51% from Q1), but $6.25 million is more than three-quarters of a full quarter's sales still uncollected. Watch whether it comes down in Q3.
• Gross margin fell sharply from Q1. First-half figures imply Q1 2026 revenue of about $5.35 million at roughly a 48% gross margin, against 27.9% in Q2. The manufacturing segment drives it: its implied gross margin fell from about 48% in Q1 to about 12% in Q2 ($4.01 million revenue, $3.52 million cost of goods). The 10-Q doesn't explain the Q2 mix, so it's unclear whether lower-margin 5G shipments returned or something else changed.
• Dilution is the funding model. First-half equity raises brought in about $16.4 million (a rights offering and a registered direct offering), and July's Series A rights exercise added 4.38 million shares at $5.00. That takes the share count to roughly 30.0 million, up from 20.7 million at the start of the year. Series B rights at $6.00 remain outstanding until November 20, 2026. On July 7, the same month it closed the rights raise, the board approved a $10 million buyback over 24 months. Buying back stock while still selling new stock to fund losses is an odd combination, and so far there's no sign of repurchases.
• No tax or interest distortion: there was no income tax provision and no debt interest, so the EPS move comes entirely from operations plus the larger share count.

The Titan deal got cheaper, and later

The 5G O-RAN radio IP from Titan Crest is the centre of AmpliTech's growth plan, and it's running late. On August 6, 2026, AmpliTech amended the agreement because of what the filing calls Titan's "substantial delinquency in timely delivering products," which "caused us substantial delays in developing our products." The total price dropped from $8 million to $7 million. The final $2 million ($1 million cash and $1 million in stock) is now due only when a fully developed design package is transferred and AmpliTech's manufacturing partner confirms it's suitable for full production. The balance sheet still carries a $3 million contingent liability for the old terms, and the company previously expected that milestone in Q3 2026.

Takeaway: The 27% revenue drop is mostly an easy-to-explain comparison against last year's one-off, low-margin 5G pass-through orders. The real issue is cost: AmpliTech now spends $5.45 million a quarter to earn $2.25 million of gross profit, and its 5G radio product, the reason for that spending, has been delayed by its IP seller. The ~$33 million of cash buys time, but shareholders are paying for that time through dilution.

Outlook

AmpliTech gives no revenue or earnings guidance. Management says existing cash and working capital are enough to cover obligations for the next 12 months, which looks credible given the July raise. Working capital was $22.9 million at June 30, before the roughly $20 million of July proceeds.

What to watch in the Q3 10-Q (likely mid-November, based on last year's November 14 filing):

1. Whether the Titan design package is actually transferred and the 5G O-RAN radio moves toward production. Without it, the 5G R&D and marketing spend has no product to sell.
2. Manufacturing-segment gross margin. It fell from about 48% to about 12% between Q1 and Q2, so a rebound would suggest Q2 was a mix blip, and another weak quarter would point to a pricing or cost problem.
3. Receivables and cash burn. First-half operating cash burn of $8.7 million is about twice the net loss. Collecting the $6.25 million of receivables would show the June-quarter revenue was real, collectable business.
4. Whether Spectrum's distribution growth holds. It is currently the only profitable part of the company.

Our read: the underlying product lines are growing, but from a small base, and the cost structure assumes a 5G revenue stream that hasn't arrived. Until it does, expect continued operating losses of roughly $3 million a quarter on a GAAP basis.