BAER — Q2 2026 Financial Report Analysis

Firefighting flying grew, the one-off Spanish work fell away, and the debt bill kept rising

Bridger Aerospace, a Montana company that flies water-scooping firefighting planes and fire-spotting aircraft mainly for the US Forest Service and Department of the Interior, reported second-quarter 2026 revenue of $30.5 million, down 1% from $30.8 million a year earlier. That flat headline hides two opposite moves. The work Bridger is actually built for grew: fire suppression revenue rose 19% and aerial surveillance rose 36%, both "primarily driven by increased flight hours," according to the 10-Q. Offsetting that, a year ago Bridger booked $5.1 million for refurbishing ("return-to-service") old Spanish water bombers for a partner, plus $3.3 million of one-off training and flight services. Those had mostly ended this quarter. The net result was a net loss of $0.5 million, compared with net income of $0.3 million a year earlier.

Some context on timing. Most US wildfires burn in the second and third quarters, so Bridger earns most of its money in those six months and loses money in the winter. In the first quarter of 2026 it booked only $8.5 million of revenue. The jump to $30.5 million in Q2 is the normal start of fire season, not a sudden turnaround. The third quarter is usually the biggest: in 2025 it brought in roughly $68 million of the year's $122.8 million.

At a glance

• US revenue +16% ($29.7M vs $25.7M). With the Spanish refurbishment revenue removed, the core business grew at a healthy rate on more flying hours for its Super Scoopers and surveillance planes.
• Adjusted EBITDA $8.1M, down 25% (margin 27% vs 35%). Adjusted EBITDA is management's measure of operating profit before interest, tax, depreciation and certain non-cash items. Profit fell even though core revenue grew, because flight-operations costs rose 28% and last year's high-margin one-off training work did not repeat.
• Cash $7.2M against about $245M of debt. Cash fell from $31.4 million at year-end as customers had not yet paid for the season's work. Bridger drew $24 million on its credit lines in the first half to cover the gap.

Key figures

Operating margin is our own calculation from the income statement: Bridger does not report an "operating income" line. n/m = not meaningful (a swing from profit to loss, or between two losses).

What drove the quarter

The core business flew more. Fire suppression is Bridger's six CL-415EAF "Super Scoopers", amphibious planes that skim water from a lake and drop it on a fire. That revenue rose $3.5 million to $21.5 million. Aerial surveillance is small planes that spot fires and coordinate the aircraft over them. It rose $1.4 million to $5.5 million. The 10-Q credits both to more flight hours but does not disclose how many hours were flown. US revenue as a whole rose 16% even though it also absorbed the loss of the $3.3 million of one-off training work from Q2 2025, so the growth in recurring flying was stronger than 16%.

The Spanish refurbishment work wound down. Under a 2023 deal, Bridger manages the refurbishment of four ex-Spanish government CL-215T scoopers that a partner (MAB) owns and pays for. Bridger bought two of them in December 2025 for $50 million. That work brought in $5.1 million in Q2 2025 but only $0.8 million this quarter. Management describes it as "mostly non-contributing to margin" (it cost $4.8 million to do in Q2 2025), so losing it barely affects profit.

Costs grew faster than core revenue. Flight-operations costs rose 28% to $10.1 million. The 10-Q attributes $1.4 million of the increase to aircraft depreciation and fuel and $1.0 million to staff "necessary to support operational growth." Maintenance costs fell 16%, but only because the Spanish refurbishment ended. Underneath that, hangar lease costs rose $0.7 million. This is why adjusted EBITDA fell $2.7 million while core revenue grew $4.0 million: the $3.3 million of one-off training revenue from last year had few costs attached, and this year's new revenue came with higher fuel, depreciation and payroll costs.

What the headline numbers hide

• The modest net loss is flattered by a non-cash gain. Bridger's warrants (rights to buy shares at $11.50, issued at its 2023 SPAC listing) fell in value as its stock dropped to $1.92 at June 30. That produced a $2.9 million paper gain, recorded as a reduction in SG&A (selling, general and administrative costs). A separation agreement with a former executive also reversed about $3.3 million of previously recorded stock compensation. Without those items the quarter's loss would have been several million dollars larger. If you remove the warrant and earnout revaluations from both years, SG&A was about $8.3 million in each quarter. That is our calculation from the reconciliation table.
• Shareholders bear a second cost that never shows up in net income. Bridger has $421.4 million of Series A preferred stock, which ranks ahead of common shareholders. Each quarter its redemption value grows by accrued interest: $7.1 million in Q2. That amount is subtracted before reaching common shareholders, so the loss per common share was $(0.13) on a net loss of only $0.5 million. The preferred stock is larger than the company's total assets of $324.1 million. The common stockholders' deficit (assets minus liabilities and preferred) is $387.1 million.
• Interest eats much of the peak-season profit. Q2 interest expense was $6.6 million, 22% of revenue, and up 15% because of more borrowing. For the first half, interest of $12.8 million was more than four times the $2.8 million of gross income. Since the October 2025 refinancing, the main term loan costs SOFR (a benchmark short-term rate) plus 6.00%, and it is secured on essentially all of the company's assets, including the aircraft.
• Cash conversion is poor at this point in the year, as expected. First-half operating cash flow was -$36.8 million, compared with a net loss of $31.8 million. Receivables (money customers owe) rose from $3.2 million to $20.5 million, which management attributes to "seasonal working capital usage and the timing of customer receipts." That is the normal pattern: in 2025 the company generated $16.7 million of operating cash for the full year after a weak first half. But the swing is bigger this year, -$36.8 million compared with -$16.2 million in the first half of 2025. The gap was filled with a $14.0 million draw on the delayed-draw term loan and $10.0 million on the revolving credit line. $4.0 million of the revolver was repaid on July 22.
• Covenants matter here. The credit agreement requires total leverage no higher than 7.00x through December 2026, tightening to 6.00x in 2027, and minimum operating cash flow of $30 million. Leverage means debt measured against earnings. Bridger says it was in compliance at June 30. It also warns that a weak season "could" put it "out of compliance with our financial covenants." Borrowing room left at June 30 was $75.7 million on the delayed-draw loan and $11.5 million on the revolver.
• Dilution is creeping. Weighted shares outstanding rose 4.8% to 56.4 million. A $100 million at-the-market share-sale program is in place but unused as of August 3, 2026.

Takeaway: Bridger's firefighting business grew in Q2: US revenue +16%, Super Scooper revenue +19%. But the company carries about $245 million of debt plus $421 million of preferred stock on $123 million of 2025 revenue. Interest took 22% of revenue even in a busy quarter, and cash was down to $7.2 million at the start of the peak season. Common shareholders' outcome depends almost entirely on a strong third quarter.

Outlook: a lot is riding on the second half

Management reiterated full-year 2026 guidance of $135–145 million revenue and $55–60 million adjusted EBITDA. Excluding the Spanish refurbishment work, that is 29% revenue growth. First-half revenue was $39.0 million and first-half adjusted EBITDA was -$6.3 million. To reach the guidance, the second half must deliver roughly $96–106 million of revenue and $61–66 million of adjusted EBITDA. The second half of 2025 delivered about $76 million and $40 million, so this is a big step up. These are our figures, calculated from the company's reported full-year and half-year numbers.

The case that it can happen is mostly contractual:

• In May the Forest Service gave the four Super Scoopers 160-day task orders, up from 120 days. Bridger puts the guaranteed standby revenue at at least $30 million, and the orders run into the fourth quarter. Standby revenue is paid for having the aircraft ready, whether or not they fly.
• In July Bridger won a 112-day Interior Department task order for a King Air 350 surveillance plane.
• In July it leased two of its own scooper aircraft to Avincis for firefighting in Portugal through mid-October. This is its first revenue-earning work in Europe.
• Also in July, Texas A&M Forest Service awarded a $58 million contract for Bridger to buy, modify and deliver three King Air 360 surveillance aircraft over three years.

The CEO pointed to US wildfire acreage already above 5 million acres by late July, about 2 million more than a year earlier.

Our read: the guaranteed standby days support revenue regardless of how much flying happens. But reaching the top of the range likely needs heavy flight hours through August and September, and the jump in second-half profit the guidance assumes leaves little room for a quiet late season. What to watch in Q3: whether adjusted EBITDA margin returns to the mid-30s, whether the $20.5 million of receivables turns into cash, and whether Bridger has to draw more on the delayed-draw loan or start selling shares through the at-the-market program. Bridger does not disclose flight-hour counts, so the Q3 filing's revenue-by-service table will be the clearest check on how much of the season actually flew.