와이드포인트(WYY) 2026년 2분기 실적발표 컨퍼런스 콜: CWMS 3.0 및 ATV 드라이브 전망

와이드포인트(WidePoint Corporation, NYSE American: WYY)가 2026년 6월 30일로 종료된 2분기에 매출액, 매출총이익, 현금 창출이 모두 증가했다고 발표했다. 또한 31억 달러 규모의 CWMS 3.0 계약 착수 가능성에 대비하고 마진이 높은 ATV 계약 이행을 지속하면서 소폭의 흑자로 돌아섰다.

핵심 요약

• 2분기 매출은 통신사 서비스 매출과 매니지드 서비스 수수료 증가에 힘입어 전년 동기의 3,730만 달러에서 3,800만 달러로 증가했다.
• 매출총이익은 510만 달러(매출 대비 14%)에서 580만 달러(매출 대비 15%)로 증가했다. 통신사 서비스를 제외한 매출총이익률은 30%에서 36%로 개선됐다.
• 와이드포인트는 2025년 2분기 61만 8,000달러(주당 0.06달러)의 순손실에서 2026년 2분기에는 6만 6,000달러(희석 주당 0.01달러)의 순이익을 기록했다.
• 조정 EBITDA는 18만 3,000달러에서 63만 5,000달러로 증가했으며, 잉여현금흐름(FCF)은 9만 달러에서 62만 7,000달러로 늘어났다.
• 경영진은 10년간 31억 달러 규모의 CWMS 3.0 사업자에 대한 이의제기가 2026년 10월 7일 이전에 해결될 것으로 예상하고 있다. 회사는 이의제기로 인한 영향이 3분기 또는 4분기 실적에 실질적인 악영향을 미치지는 않을 것으로 전망한다.
• ATV 계약은 연말까지 본격 가동될 것으로 예상되며, 구축 작업은 2027년 1분기 말이나 2분기 초에 본격화될 전망이다. 당초 계약 규모는 5년간 약 4,500만 달러였으며, 예상 매출총이익률은 70% 수준이다.

주요 재무 실적

2026년 상반기 매출은 7,860만 달러를 기록해 전년 동기(7,080만 달러) 대비 780만 달러 증가했다. 매출총이익은 990만 달러에서 1,140만 달러로 증가했고, 조정 EBITDA는 27만 6,000달러에서 140만 달러로 늘었으며, 잉여현금흐름은 15만 5,000달러에서 130만 달러로 확대됐다.

와이드포인트는 2분기 말 기준 1,000만 달러의 사용 제한 없는 현금과 약 2억 1,900만 달러의 연방 정부 수주잔고(자금 배정 및 미배정 금액 포함)를 보유하고 있다. 갱신된 회전신용공도 약정을 통해 약정 준수 조건 하에 최대 400만 달러의 차입 한도를 확보하고 있다.

사업 및 영업 실적

CWMS 3.0

미국 국토안보부(DHS)는 상한선 31억 달러 규모의 10년 만기 CWMS 3.0 계약 단독 사업자로 와이드포인트를 선정했다. 해당 선정 건에 대한 이의제기가 미국 회계감사원(GAO)에서 심사 중이며, GAO는 2026년 10월 7일까지 결정을 내려야 한다.

DHS는 또한 와이드포인트에 상한선 1억 1,300만 달러, 최장 6개월의 이행 기간을 갖는 CWMS 2.5 브릿지 계약을 체결했다. 경영진은 이 브릿지 계약을 통해 이의제기가 해결되는 동안 발주 연속성을 유지할 수 있을 것이라고 밝혔다.

사업 계획 측면에서 경영진은 CWMS 3.0의 수주 상한액이 연평균 약 3억 달러의 매출을 나타낸다고 설명했다. 회사는 연간 약 1억 5,000만 달러 규모가 CWMS 2.0과 유사하게 유지될 것으로 예상하며, 통신사 서비스 약 80%, 매니지드 서비스 약 20%의 비중으로 구성될 것으로 본다.

연간 약 1억 5,000만 달러의 추가 사업 기회는 매니지드 서비스 및 솔루션 작업에 집중될 것으로 예상된다. 경영진은 계약이 완전히 본격화되고 확장된 후 이 사업이 8%~10%의 순이익률을 뒷받침할 수 있을 것으로 보고 있다. 추가 업무가 주로 솔루션 기반이므로 인력이 비례하여 늘어날 것으로 기대하지는 않는다.

ATV 계약

와이드포인트는 미국 3대 통신사 중 한 곳과의 SaaS 계약 이행 범위를 확장했다. 기존 연방 정부 구축 대상 기기는 200만~250만 대 수준으로 예상된다.

당초 ATV 계약 규모는 5년간 약 4,500만 달러(연간 약 900만 달러)였으며, 예상 매출총이익률은 70% 수준이다. 와이드포인트와 해당 통신사는 이 플랫폼을 주 및 지방 정부 고객으로 확장하는 방안에 대해서도 초기 논의를 시작했다.

2분기 동안 와이드포인트는 ATV 이행과 관련해 조건에 부합하는 내부 인건비 약 70만 달러를 자본화했다. 연초 이후 누적 자본화 금액은 130만 달러다. 해당 비용과 관련 이연수익은 서비스 가동 후 계약 기간에 걸쳐 인식될 예정이다.

SEWP VI, DaaS 및 MobileAnchor

와이드포인트는 미국 항공우주국(NASA)의 10년, 600억 달러 규모 SEWP VI 조달 프로그램에서 카테고리 A 주계약자로 선정됐다. 발주는 2026년 11월 1일부터 시작될 예정이며, 경영진은 2027년 1분기부터 발주 활동이 본격화될 것으로 보고 있다.

회사는 향후 몇 달 안에 서비스형 디바이스(DaaS) 수주 계약을 성사시킬 수 있을 것으로 신중하게 낙관하고 있다. LA28이 가장 명확한 단기 가시성을 제공하고 있으며, 더욱 작은 규모의 두 가지 DaaS 사업 기회도 계약 수주에 가까워지고 있다. 경영진은 대형 DaaS 프로젝트의 매출총이익률을 60%~70% 수준으로 예상한다.

MobileAnchor 파일럿 사업이 계속 진행 중이다. 또한 와이드포인트는 USAccess, 미국 재무부 국세청(IRS), 나토 NCIA, DHS 미국 이민서비스국(USCIS), 국방인적자원데이터센터(DMDC) 등이 포함된 정보요청서에 대응하고 있다.

경영진 전망

경영진은 기존 CWMS 2.0 작업 지시서와 CWMS 2.5 브릿지 계약이 연속성을 제공하므로, CWMS 3.0 이의제기가 2026년 3분기나 4분기 실적에 중대한 영향을 미치지는 않을 것으로 보고 있다.

10월 7일까지 이의제기가 해결되면 4분기에 새로운 CWMS 3.0 작업 지시서가 들어오기 시작할 수 있다. 작업 지시서의 유입이 불균등할 수는 있지만, 경영진은 2027년이 의미 있는 성장의 해가 될 것으로 기대한다. 회사의 장기 시나리오에서는 CWMS 3.0이 2028년 말까지 구상된 규모에 도달할 것으로 가정한다.

ATV 플랫폼은 2026년 말까지 가동될 예정이다. 경영진은 4분기에 일부 기기가 도입되고, 2027년 1분기 말이나 2분기 초에 더 광범위하게 확산될 것으로 예상한다.

영업비용은 SEC 속진 제출 법인 관련 규정 준수 비용 증가, 건강보험료 상승, 인플레이션, 인건비 상승으로 인해 압박을 받을 것으로 예상된다. 또한 와이드포인트는 단기적으로 양자후암호(PQC)에 대한 투자를 계획하고 있어 설비투자(CAPEX)가 증가할 것이라고 경영진은 밝혔다.

리스크 및 관전 포인트

• CWMS 3.0 작업 지시서 및 마진 개선 기회의 시점은 GAO의 이의제기 결정 결과와 시점에 달려 있다.
• CWMS 3.0의 활성화 과정은 고르지 않을 수 있으며, 31억 달러라는 수치는 확정된 매출이 아닌 계약 상한선이다.
• ATV 이행 작업은 계속 진행 중인 한편, 주 및 지방 정부, 포춘 500 기업으로의 확장 가능성에 대한 논의는 아직 초기 단계다.
• SEWP VI는 자격을 갖춘 다수의 사업자가 참여하는 경쟁 조달 프로그램이므로 작업 지시 수주가 보장되지는 않는다.
• 2026년 2월에 시작된 DHS의 부분 셧다운으로 인해 일부 계약에 대한 청구 가능 활동이 줄어들었다.
• 규정 준수 비용, 인건비, 건강보험료, 양자후암호 투자가 단기 비용 및 설비투자에 부담으로 작용할 수 있다.

애널리스트 Q&A 주요 내용

경영진은 ATV 구축이 초기 출시에서 본격적인 확장 단계까지 진행되는 데 약 3~6개월이 걸릴 수 있다고 밝혔다. 아직 정확한 추정치는 없지만, 주 및 지방 정부 고객으로 확장하면 연방 정부 구축 대비 기기 수가 잠재적으로 두 배로 늘어날 수 있다.

와이드포인트는 미국의 다른 2개 주요 이동통신사도 유치하기 위해 노력하고 있다. 경영진은 이들의 잠재적 규모가 기존 ATV 사업 기회와 유사하다고 설명하면서도 논의는 아직 초기 단계임을 강조했다.

LA28의 경우 경영진은 연말까지 계약 세부 조건 합의를 완료하여 2027년에 구축을 시작할 수 있기를 기대하고 있다. 와이드포인트는 파트너사인 CDW에 주로 SaaS 및 DaaS 라이선스를 제공할 예정이므로 경영진은 적용 확대 기간이 비교적 짧을 것으로 보고 있다.

MobileAnchor에 대해 경영진은 직접적인 홍보 활동과 고객의 문의 모두에서 수요가 발생하고 있다고 밝혔다. 민간 파트너사로는 CDW, 인그램 마이크로(Ingram Micro), 테크 데이터(Tech Data) 등이 있으며, MobileAnchor는 DaaS 및 신원 관리 프로젝트의 추가 옵션 상품으로 입지를 다지고 있다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good afternoon. Welcome to WidePoint's Second Quarter 2026 Earnings Conference Call. My name is Holly, and I will be your operator for today's call.

Joining us for today's presentation are WidePoint's President and CEO, Jin Kang; Chief Revenue Officer, Jason Holloway; and Chief Financial Officer, Robert George. Following their remarks, we will open up the call for questions from WidePoint's publishing analysts and major investors. If your questions were not taken today and would like additional information, please contact WidePoint's Investor Relations team at WYY@gateway-grp.com.

Before we begin the call, I would like to provide WidePoint's safe harbor statement that includes cautions regarding forward-looking statements made during this call. The matters discussed in this conference call may include forward-looking statements regarding future events and the future performance of WidePoint Corporation that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks and uncertainties are described in the company's Form 10-Q filed with the Securities and Exchange Commission.

Finally, I would like to remind everyone that this call will be made available for replay via a link in the Investor Relations section of the company's website at www.widepoint.com.

Now I would like to turn the call over to WidePoint's President and CEO, Mr. Jin Kang. Sir, please proceed.

Jin Kang

Thank you, operator, and good afternoon, everyone. Thank you for joining us today to review our financial and operational results for the second quarter ended June 30, 2026.

Q2 marked a transformational period and a key inflection point for WidePoint as we strengthened our foundation and sharpened our outlook for a profitable growth trajectory over the next decade. As many of you are aware, in late June, the Department of Homeland Security named WidePoint the single awardee of the 10-year $3.1 billion CWMS 3.0 contract. This award will provide a strong platform to expand our role, deepen our customer relationship and create meaningful long-term value for DHS. As many of you are already aware of what CWMS 3.0 means for WidePoint, we'd like to use today's discussion to focus on two key topics: first, the status of the award protest; and second, the financial outlook and growth opportunity we see under the contract over the next decade.

To address the protest directly, we firmly believe the protest will not be successful. We continue to operate and prepare with confidence that WidePoint will remain the single awardee of the CWMS 3.0 following the protest period. Our confidence is grounded in the strength of WidePoint's solution set, more than two decades of proven performance and the deep integration of our solutions into DHS' operations. Precedent also reinforces our view. Unsuccessful bidders protest the CWMS 2.0, the CWMS 1.0 and the GSA FSSI TEMS awards, the predecessors to CWMS 3.0. WidePoint prevailed in all three cases. We believe this protest will reach the same outcome, allowing us to move forward and begin executing on the opportunities ahead.

The GAO is required to issue a decision within 100 days of protest filing, setting an outside deadline of October 7, 2026. DHS and the protester have submitted their responses, and the matter is now in the decision window with GAO. Although the deadline falls in early October, we remain optimistic that GAO could issue its decision sooner. In the meantime, our team continues preparing for the full launch of work under CWS 3.0. Additionally, on August 6, DHS awarded a short-term bridge contract, the CWMS 2.5 with a contract ceiling of $113 million with a six-month period of performance comprised of a three-month base period and three one-month options. This award was to ensure that there were no gaps in the ordering period. This bridge contract will ensure business continuity as the protest is settled.

Our second topic is the financial outlook for CWMS 3.0 over the next decade. For discussion purposes, the contract's $3.1 billion ceiling represents an average annual revenue of approximately $300 million per year. This equates to approximately twice the annual revenue run rate under CWMS 2.0. We expect the original $150 million in annual value to remain consistent with the CWS 2.0. Though due to pricing adjustment, we believe this will be slightly more profitable. Consistent with the CWMS 2.0 split between carrier and managed services revenue, we expect the split to remain roughly 80% carrier and 20% managed services revenue.

We see the greatest value in the approximately $150 million of additional annual opportunity, which we expect to be concentrated towards managed services and solution-based work. Based on historical federal contracting economics, this type of managed services and solution-based work typically supports an 8% to 10% net profit margin. Applying this net profit margin to the additional $150 million annual opportunity, we believe CWMS 3.0 holds the potential to materially strengthen WidePoint's future earnings profile once the contract is fully ramped and scaled.

DHS underwent a significant set of reviews to increase the contract ceiling and face scrutiny at both the departmental and congressional levels. We view that entire process and the resulting ceiling increase as a strong signal of institutional commitment to the CWMS program, its long-term potential and the value WidePoint and the contract vehicle provides DHS. We also expect the scope of work on the CWMS 3.0 to expand beyond smartphones and traditional IoT devices to additional connected devices and form factors. Although the pipeline continues to evolve in real time, we see meaningful pent-up federal demand for high-value solutions that can be delivered through the CWMS contract vehicle using WidePoint's capabilities.

While the contract ceiling was effectively doubled on an annual basis, we do not expect a corresponding increase in headcount because the approximate $150 million in additional annual opportunity is expected to consist primarily of solutions-based work. Any incremental staffing needs should be relatively minimal. The timing of the full CWMS 3.0 ramp and the execution of margin-accretive opportunities currently depends on the conclusion of the protest. If resolved on or before October 7, we may see some new task orders to begin arriving in the fourth quarter. We expect 2027 to be a year of meaningful ramp-up with task orders likely to arrive unevenly as the program begins scaling.

If CWMS 3.0 reaches the contemplated scale by the end of 2028, the approximate $150 million of additional annual opportunity, together with an assumed 8% to 10% net profit margin supports our view that the contract could materially and positively change WidePoint's future earnings potential. For now, we look forward to expected decision from GAO and commence work under CWMS 3.0.

Beyond CWMS, the second quarter saw two additional major developments. A few days before the CWMS announcement, WidePoint was named a prime contract awardee on the 10-year $60 billion NASA Solutions for enterprise-wide procurement or SEWP VI contract. WidePoint was selected as a prime contractor awardee under the category A, which covers information technology, communications and audiovisual solutions. Similar to the Navy Spiral 4 contract, SEWP VI provide us with a more efficient way to connect with our federal customers with our full portfolio of solutions and scale mission-critical support where agency need it most.

As many of you are aware, the federal acquisition cycle is long and arduous process. Thus, by qualifying for such contract vehicles like SEWP VI and Navy Spiral 4, we can shorten the acquisition process and open the door to new opportunities with a majority of task orders projected to be solutions based under SEWP VI, capturing even a small fraction of the contract ceiling could have a meaningful impact on WidePoint. The ordering period is set to start on November 1. And as such, we expect activities to begin ramping up as early as Q1 2027. Nonetheless, we remain prepared to take advantage of our seat at the table and pursue the opportunities ahead.

We also saw new and encouraging development under our SaaS contract with one of the big three U.S. telecommunications carriers. We will be referring to this contract as the ATV contract going forward. In late June, we announced an expanded implementation scope under the ATV contract to support additional operational requirements. As we continue to work through the implementation phase with the carrier, we identified additional implementation needs. We view this expanded scope as a clear indicator of the carrier's confidence in our platform, technical expertise and ability to execute increasingly complex deployment requirements at scale. With this expanded scope, we now anticipate the official go-live by the end of the year.

ATV is a margin-accretive contract that we believe will meaningfully support WidePoint's future earnings trajectory. The original contract was valued at approximately $45 million over five years or roughly $9 million per year. At an estimated 70% gross margin profile, along with the expanded scope I previously highlighted, ATV has the potential to generate a material contribution to our bottom line and further enhance our EPS trajectory once fully ramped.

Lastly, before I hand the call off to Jason, I'd like to reiterate the strong underlying fundamentals of the business that have supported our progress thus far. As we pursue and secure opportunities that position WidePoint for sustainable growth, our current business and the market we serve remain healthy and expanding. In the first half of 2026 alone, WidePoint was awarded $58 million in new and renewal contractual actions, demonstrating both the strength of the foundation we have built and growing customer demand across the federal and commercial sectors. WidePoint continues to expand customer and partner relationships, win and renew engagements and ultimately build a strong pipeline that supports our shift towards higher-value as-a-service work. The rest of the year centers on fortifying the foundation to accelerate WidePoint's future trajectory. We expect 2027 to begin reflecting the company's evolving profile. And by the end of 2028, we anticipate a stronger organization platform capable of accelerating growth beyond current levels.

That said, I will now hand the call over to Jason, who will provide additional insight into our sales and marketing initiatives, including the expanding potential of the ATV contract and recent DaaS developments. Jason?

Jason Holloway

Thanks, Jin, and good afternoon, everyone.

To start with an update on the ATV contract, as Jin mentioned, we were pleased to announce at the end of the second quarter, the expanded integration engagement with our carrier customer. During these conversations and through the implementation, WidePoint and our carrier customer have also identified and begun initial discussions about extending the partnership beyond its current federal scope to the carrier state and local government clients. The current existing contract is expected to cover 2 million to 2.5 million devices at the federal level. The potential expansion could increase both the number of devices managed and the total value of the engagement. To preface, this potential expansion remains in the early stages of discussion. However, we believe WidePoint's technical expertise, differentiated capabilities and decades of experience serving government clients with the most stringent security requirements positions us to compete effectively in the market.

That said, our primary focus now continues to center on completing the implementation phase and reaching the go-live status. Both parties remain committed to launch by year-end. Regardless of the official launch date, this will be one of the largest government mobility management deployments in the industry to date.

On to DaaS to provide an update on our pipeline. We remain cautiously optimistic that we will close a DaaS opportunity in the next few months. The LA28 DaaS opportunity is one where we currently have the clearest line of sight. We are cautiously optimistic that the required contracting should begin in the near term. Beyond LA28, we have two additional DaaS opportunities that are close to closing. These two opportunities are much smaller than the other major opportunities in the pipeline as the client wants to implement in tranches. Still, progress in the pipeline is encouraging and reinforces our confidence in the broader level of activity. Larger opportunities with Fortune 100 size organizations also remain active, and we continue to believe we can convert these engagements over time.

Fortune 100 size organizations can have workforces and device footprints spanning hundreds of thousands of devices, and DaaS revenue is billed based on the number of devices managed per person per month. And with DaaS margin economics expected to land in the 60% to 70% range on these large engagements, securing even one of these engagements could materially improve our EPS outlook. We remain optimistic about the DaaS pipeline and look forward to sharing material updates on future calls.

SEWP VI was another major second quarter highlight. Our team has been working diligently with contacts at the highest levels of the federal government who hold funding and have a need for our service. Government-wide acquisition contracts like SEWP VI come especially handy during these conversations because they provide a readily available pre-competed vehicle that can shorten customer acquisition cycles. And while competition will be high with many other organizations qualifying and competing under SEWP VI, we believe WidePoint stands out among a small group of providers under Category A positioned to support multiple portions of the available solution categories. With the ordering period beginning November 1, SEWP VI has the potential to generate incremental opportunities beyond those we have highlighted over the past several quarters.

Lastly, MobileAnchor continues to gain traction. Beyond the several pilot programs currently underway, which are continuing to progress, we've been extremely busy responding to numerous requests for information to very high-level organizations such as USAccess , Treasury IRS, NATO NCIA or NATO Communications and Information Agencies, DHS' USCIS or U.S. Citizenship and Immigration Services and Defense Manpower Data Center or DMDC. We will keep you posted as these high-level profile opportunities make their way through the process.

With that, I will now turn the call over to Bob to discuss our financial results. Bob?

Robert George

Thanks, Jason, and thanks to everyone for joining us today. I'm pleased to share the details of our financial results for the second quarter ended June 30, 2026.

Total revenue for Q2 increased to $38 million compared to $37.3 million in the same period last year. Total revenue for the six-month period was $78.6 million, a $7.8 million increase from the $70.8 million in the same period last year. Now I'll provide a further breakdown of our revenues. Our carrier services revenue for Q2 was $24.1 million, an increase of $1.8 million compared to $22.2 million last year. Carrier services revenue for the six-month period was $49.8 million, an increase of $5.2 million compared to $44.6 million in the same period last year. The increase during both periods was the result of growth in the number of phone lines under management during the second half of 2025 for our DHS customer.

Managed services fees for Q2 were $9.7 million, an increase of $1.1 million compared to $8.6 million last year. Managed services fees for the six-month period were $19 million, a $1.8 million increase compared to $17.2 million in the same period last year. The increase during both periods was primarily due to the additional task order with U.S. Customs and Border Protection awarded in September 2025 to manage 30,000 additional phone lines. Billable service fees for Q2 were $1.2 million and remained relatively consistent with the same period last year. Billable service fees for the six-month period were $2.5 million compared to $3.1 million in the same period last year. The decrease was primarily due to the impact from the partial shutdown of DHS beginning February 2026, which resulted in reduced billable activity on certain contracts.

Reselling and other services for Q2 were $3 million compared to $5.1 million in the same period last year. The decrease was primarily due to certain nonrecurring revenues booked in the second quarter of 2025. Revenue in the current year period reflects a more normalized pattern of revenue recognition in this area. Reselling and other services for the six-month period was $7.2 million, an increase of $1.3 million compared to $5.9 million in the same period last year. The increase was primarily related to the absence of the out-of-period adjustment recorded in the first quarter of 2025.

Gross profit for Q2 increased by $700,000 to $5.8 million or 15% of revenues compared to $5.1 million or 14% of revenues in the same period last year. Gross profit for the six-month period increased $1.5 million to $11.4 million or 15% of revenues compared to $9.9 million or 14% of revenues in the same period last year. The more significant metric of gross profit percentage, excluding carrier services during Q2 was 36% compared to 30% in the same period last year. Gross profit percentage, excluding carrier services during the six-month period was 35% compared to 33% in the same period last year. Our gross profit percentage will vary from period to period based on the revenue mix.

Sales and marketing expenses in Q2 were $600,000 or 2% of revenues and remained relatively consistent compared to the same period last year. Sales and marketing expenses for the six-month period were $1.3 million or 2% of revenues and also were relatively consistent compared to the same period last year. General and administrative expenses in Q2 were $4.9 million or 13% of revenues and remained relatively consistent compared to the same period last year. General and administrative expenses for the six-month period totaled $9.8 million or 13% of revenues and also remained relatively consistent compared to the $9.7 million or 13% of revenues in the same period last year.

Additionally, the second quarter and year-to-date periods benefited from the capitalization of approximately $700,000 and $1.3 million, respectively, of qualifying internal labor costs associated with the implementation of our ATV contract. These costs were deferred as the contract implementation assets rather than recognized as general and administrative expenses during the period. Excluding the impact of these capitalized implementation costs, operating expenses would have increased more significantly compared to prior year periods. Upon the ATV contract going live, the deferred implementation costs, together with the related deferred revenue will be recognized over the expected contract term as cost of sales and revenue.

In addition, to the extent that our internal IT personnel continue to perform billable customer support services after go-live, the related labor costs are expected to be classified as direct costs rather than general and administrative expenses. As our business grows, we expect general and administrative expenses to increase in absolute dollars. However, we expect those costs to remain relatively consistent as a percentage of revenue.

Depreciation and amortization expense for Q2 was $181,000 compared to $233,000 in the same period last year. The decrease was a result of certain capitalized assets reaching the end of their amortization periods. Depreciation and amortization expense for the six-month period remained consistent at $409,000 compared to $457,000 in the same period last year.

Adjusted EBITDA, a non-GAAP measure for Q2 was $635,000 compared to $183,000 in the same period last year. Adjusted EBITDA for the six-month period was $1.4 million compared to $276,000 in the same period last year. Free cash flow, also a non-GAAP measure, which we define as adjusted EBITDA minus capital investments increased to $627,000 in Q2 compared to $90,000 in the same period last year. Free cash flow for the six-month period increased to $1.3 million compared to $155,000 in the same period last year.

For Q2, net income was $66,000, resulting in basic and diluted EPS of $0.01 per share compared to a net loss of $618,000 or a loss of $0.06 per share in the same period last year. Net income for the six-month period totaled $143,000 or basic and diluted EPS of $0.01 per share compared to a net loss of $1.3 million or a loss of $0.14 per share in the same period last year. Federal funded and unfunded contract backlog totaled approximately $219 million as of June 30, 2026.

Moving to the balance sheet. We ended the quarter with $10 million in unrestricted cash. We also renewed our revolving line of credit facility that provides us with $4 million in potential borrowing capacity subject to maintaining compliance with our covenants. We also maintain an at-the-market or ATM stock offering facility, which provides flexibility to sell shares into the open market at prevailing market prices. We have not used the ATM since it was put in place, and we do not intend to do so at current valuations.

Looking ahead into the second half of the year, we expect to incur additional costs as WidePoint transitions to an accelerated SEC filer. While this classification is a result of our success reflected by higher public float, it will result in higher external audit fees, consulting costs and other compliance-related expenditures spread across the third and fourth quarter. Beginning in 2027, we expect the annual impact to be slightly below the amount we expect to incur in the second half of 2026 and for it to be spread across four quarters, moderating the effect on quarterly operating expenses.

Further, under current market conditions, we also expect higher health insurance costs, inflationary pressures and rising labor costs to weigh on our operating expense profile. We also expect to make a onetime payment under employee incentive arrangements that are contingent upon both the award of the CWMS 3.0 contract and the final resolution of the related protest in WidePoint's favor. While the related accounting recognition may occur over time in accordance with GAAP, the underlying awards are unique to CWMS 3.0 and are not recurring.

Additionally, over the coming periods, we plan to make targeted investments in post-quantum cryptography to keep our cybersecurity solutions at the forefront of the industry. We believe these investments will strengthen our long-term competitive position and support the evolving security needs of our government and commercial customers. While these investments will result in elevated capital expenditures in the near term, we believe they will position the company to improve margins and profitability over time as we scale existing programs, execute under key contract awards, including CWMS and the ATV contracts and continue to expand our customer base and pipeline. We believe these strategic investments will strengthen our long-term growth prospects and competitive positioning.

This completes my financial summary. For a more detailed analysis of our financial results, please refer to our Form 10-Q, which was filed prior to this call. With that, I will now hand the call over to Jin.

Jin Kang

Thank you, Bob, and thank you, Jason.

While we continue to navigate through the CWMS 3.0 protest period, many task orders under the current CWMS 2.0 vehicle remain in place through the second quarter of 2027. And now with the interim CWMS 2.5 bridge contract in place, DHS can continue to modify these task orders and issue additional task orders. Several modifications and quote revisions are already underway and more significant modifications remain possible if the protest should extend beyond the current expectations. Accordingly, we do not anticipate any material impact from the protest in our third or fourth quarter results.

We view 2026 as a year of execution, not transition. With major contracts secured and implementations underway, we are well positioned for a meaningful ramp in 2027 that should provide an early glimpse of WidePoint's evolving financial and operating profile. By the end of 2028, we expect to begin delivering against our financial targets and accelerating growth beyond those levels.

Before we turn to Q&A, I would like to pass the call over to Jason once more. Jason?

Jason Holloway

Thanks, Jin. Before we turn to Q&A, I wanted to share a personal update with all of our shareholders and supporters. After 10 years with WidePoint, I've made the decision to retire at the end of the year. When I joined WidePoint in 2016, my goals were clear: stabilize and streamline sales and marketing, position the company for success, return WidePoint to profitability and set it on a sustainable growth trajectory. I'm pleased to say those objectives have been achieved. While the work took a bit longer than I initially expected, I am confident that WidePoint is now on the correct path.

Over the next few months, I will be transitioning my responsibilities and mentoring my successor to ensure a smooth handoff. I will also remain actively involved with the management team and our customers to help convert current opportunities into paying contracts. I will always be a champion for WidePoint, working with the Board and management to support the company's growth. I remain a dedicated shareholder and will continue to support WidePoint's long-term success. At the same time, I need to give certain personal obligations a higher priority now. Thank you to the management team and especially every member of the staff. It has been a challenging, rewarding and enjoyable ride, and I am very proud of what we have accomplished together.

This concludes our prepared remarks. We will now take questions from our analysts and major shareholders. Operator, will you please open the call for questions?

Operator

[Operator Instructions] Your first question for today is coming from Scott Buck with Titan Partners.

질의응답

Scott Buck

First, Jason, congratulations. On ATV contract, if we're talking about launch by the end of 2026, what is the time line from launch to full deployment?

Jin Kang

We should have some devices implemented at the end of this year in Q4. But we feel that the ramp-up time is going to be probably towards the end of the first quarter, beginning of second quarter.

Scott Buck

Okay. So between three and six months. Perfect. And then you talked about potential expansion to state and local governments. Could you help us understand what the incremental, I don't know, number of devices or incremental opportunity that could potentially mean in terms of revenue?

Jin Kang

I think the state and local -- the population would rival those of the federal government. So we could potentially see a doubling of the number of devices. And they're also talking about taking us into their Fortune 500 customers. And so that could grow some more. We don't know the exact number at this time because we don't know how many -- what's the customer base ATV has. But we'll know more as we get into the implementation towards the end of this year.

Scott Buck

Okay. Perfect. And then last one from me. I just want to ask about backlog real quick. What does the book-to-bill look like ex CWMS?

Jin Kang

The contract backlog, the $219 million is what we have past quarter executed from the federal government. Most of that $219 million is funded requirements from the federal government. And some of those have contract period of performance that's minimally 12 months and some of them 18. And when you say book-to-bill, we will get all of that work as revenue over time.

Operator

Your next question for today is from Casey Ryan with AmerX.

Casey Ryan

I just wanted to circle back, you were talking -- I think you mentioned that there may be a second wireless carrier opportunity. And I just wanted to confirm that. And then also if it was the same sort of target, like it was kind of federal workforce coverage and then maybe state and local after that.

Jin Kang

Yes. As we stated, we have one of the three major carriers. And so the other two are definitely targets of opportunity, and we are feverishly working towards capturing those two opportunities as well. And the size of it is comparable.

Casey Ryan

Yes. Because is it fair for me to think that all three of the big carriers serve federal, state and local governments maybe equally or in some significant market share amounts?

Jin Kang

Yes, they do. And they all have similar cybersecurity requirements. And so because of our FedRAMP authorized status and FedRAMP certification, we will be sought out, and we are also reaching out to them. And we are in conversation, preliminary conversations with them. Nothing material at this time, though.

Casey Ryan

Okay. And then I think just briefly on the Olympics, I think we talked about the practicalities of sort of deployment might require that a decision be made at some point. Would you expect that to happen in '26 and just say what has to happen by '26 because it's going to be in '28 or could it slip longer?

Jin Kang

Yes, the time is definitely not. I mean it's -- the sort of the crunch time is going to happen probably beginning of next year. But we're hopeful to get all the Ts and Cs done by the end of this year so that we will be ready to start to implement. And again, this is a Software-as-a-Service and a DaaS opportunity. So our main lift will be providing the licenses for our partner, CDW, to use in order to implement their DaaS program. So the ramp-up period should be pretty quick.

Casey Ryan

Okay. All right. Great. And then the last thing I had, I was really curious about MobileAnchor, I've always been interested in, but I think Jason mentioned that there's a lot of inbound coming. And I'm wondering how the inbound is sort of materializing. Is that your own direct efforts trying to get the technology out there? Or are people just hearing about you and saying, hey, this is something that we need and something viable. And so it's actually people calling you not out of the blue, but maybe without you having to pursue them formally?

Jin Kang

Yes, it's a little of both. And so our challenge has been in order to getting to the right person and the decision-maker. And so we've been working with political operators that have various connections in the organization. We're having some reasonable luck there. So we are getting some inbound calls. And we're also getting calls from various entities that have to work with secure identities. And because we are one of the two external certificate authorities, they know that we have this solution. And so we get the inbound calls through that as well as people just hearing about us and wanting to implement the most secure multifactor authentication solution available. So through our marketing as well as inbound unsolicited calls.

Casey Ryan

Yes. Okay. Great. And then last question is about MobileAnchor. What's the opportunity set in commercial segments, I guess? I mean we've talked about government, but -- and is there a partner in the commercial space where you work to sort of get MobileAnchor out of the marketplace?

Jin Kang

Yes. Our partners in the commercial side -- I mean, on the private sector side is CDW, Ingram Micro, Tech Data. Those are the folks that are involved with various identity and access management solutions. And so we're working with them, and I think that there's a lot of applicability there. And so as part of our DaaS programs, one of the services and the solutions that we will provide is the MobileAnchor and identity and access management. So we've got to get our foot in the door first with DaaS and upsell the mobile anchor and identity management solution.

Operator

At this time, this concludes our question-and-answer session. If your question was not taken, please contact WidePoint's IR team at WYY@gateway-grp.com. That's WYY@gateway-grp.com. I'd now like to turn the call back to Mr. Jin Kang for closing remarks.

Jin Kang

Thank you, operator, and we appreciate everyone taking the time to join us today. As the operator mentioned, if there were any questions we did not address today, please contact our IR team. You can find their full contact information at the bottom of today's earnings release. Thank you again, and have a great evening.

Operator

Thank you for joining us today for WidePoint's Second Quarter 2026 Conference Call. You may now disconnect.