INNOVATE Touts Growth as Debt Pressure Forces Potential Asset Sales

NEW YORK, NY – March 26, 2026 – INNOVATE Corp. (NYSE: VATE) today announced robust fourth-quarter and full-year 2025 financial results, showcasing significant top-line growth driven by its powerhouse Infrastructure segment. The diversified holding company reported a 61.7% year-over-year revenue increase for the fourth quarter, alongside a 12.5% rise for the full year. However, this impressive growth narrative is shadowed by substantial underlying financial pressures, including a widening annual net loss, a heavy debt load, and a stark “going concern” warning in its recent regulatory filings that has triggered plans to sell key business units.

For the full year, consolidated revenue reached $1.25 billion, up from $1.11 billion in 2024. The fourth quarter was particularly strong, with revenue hitting $382.7 million. The company also narrowed its net loss attributable to common stockholders for the fourth quarter to $7.8 million, a significant improvement from the $16.9 million loss in the same period last year.

“INNOVATE delivered strong results to close the year, delivering top line growth of 12.5% in 2025,” said Avie Glazer, Chairman of INNOVATE, in a statement. He highlighted momentum in the company’s diverse segments, setting a positive tone for the operational performance.

The Engine of Growth: Infrastructure's Dominance

The primary driver of INNOVATE’s impressive revenue figures was its Infrastructure segment, DBM Global (DBMG). The division, which includes steel fabrication and construction modeling, reported a staggering 65.7% increase in fourth-quarter revenue to $373.9 million. For the full year, the segment's revenue grew to $1.21 billion.

This performance is bolstered by a rapidly growing project pipeline. DBMG’s adjusted backlog—a key indicator of future revenue—swelled to $1.8 billion by the end of 2025, a dramatic increase from $1.1 billion a year prior. Management pointed to a ramp-up in the New York City market and other western markets as sources of this positive momentum.

“Our Infrastructure segment, led by DBM Global, continues to gain momentum and is seeing meaningful activity ramp up in the New York City market,” Glazer noted. “During the quarter, we added a significant amount to our backlog that now totals $1.8 billion, which further strengthens our visibility.”

This growth aligns with broader trends in the steel fabrication industry, where demand for infrastructure and renewable energy projects is surging. DBMG’s strong position and robust backlog suggest its operational strength is set to continue providing a solid foundation for INNOVATE’s top-line performance into 2026.

Seeds of Innovation: Bets on Life Sciences and Spectrum

Beyond its industrial core, INNOVATE is making strategic, long-term bets in high-growth sectors. The Life Sciences segment, though still a small portion of overall revenue, achieved critical milestones. Its subsidiary, MediBeacon, received U.S. Food and Drug Administration (FDA) approval for its next-generation MediBeacon® TGFRTM System. This first-in-kind device offers a point-of-care method for measuring kidney function without requiring blood or urine samples, a significant advancement in a market driven by an aging population and rising rates of chronic kidney disease.

“MediBeacon officially initiated its Center of Excellence commercial rollout in the United States, which serves as a pivotal step in continuing our goal to improve kidney health,” said Paul Voigt, Interim CEO of INNOVATE. The company has already secured initial orders and expects placements to increase as inventory builds.

Meanwhile, R2, another Life Sciences subsidiary focused on aesthetic technology, secured a landmark multi-year agreement in China for a minimum of 600 of its systems. This deal, valued at approximately $10 million including consumables, taps into China's booming medical aesthetics market, which is projected to grow at over 14% annually. This international success helped R2 achieve a 27.6% increase in full-year revenue to $12.5 million, despite a softer fourth quarter.

INNOVATE’s Spectrum segment, which faced headwinds from a soft advertising market and customer cancellations, is looking toward 2026 for a turnaround. The company anticipates benefits from new network launches, such as Lionsgate's MovieSphere Gold, and is poised for significant expansion after favorable FCC rulings for Low Power Television (LPTV) broadcasters. These rulings have opened the door for INNOVATE to potentially expand its spectrum coverage into over 40 new U.S. markets at marginal cost. The segment is also continuing joint trials with a major mobile carrier to test data delivery to smartphones, a potential new revenue stream for its broadcast assets.

The Profitability Paradox: A Heavy Debt Burden Looms

Despite the strong revenue performance and strategic wins, INNOVATE’s bottom line tells a different story. The full-year net loss attributable to common stockholders widened to $64.0 million in 2025 from $35.8 million in 2024. A key contributor to this loss was a substantial increase in interest expense, which climbed to $89.0 million for the year, up from $74.5 million previously.

The company’s balance sheet reveals the source of this pressure. As of December 31, 2025, INNOVATE held total principal outstanding indebtedness of $687.2 million. This heavy leverage has drawn scrutiny. Last July, S&P Global Ratings downgraded INNOVATE’s credit rating to 'CC', labeling a debt exchange as “distressed” because it extended maturity dates and delayed interest payments.

Liquidity is also a significant concern. The company's most recent 10-K filing from March 2026 contained a formal warning about its ability to continue as a “going concern,” citing high leverage and tight liquidity. An analysis of its balance sheet shows that short-term obligations of over $1 billion far exceed its current assets of $451.5 million, resulting in a current ratio of just 0.43 and underscoring the immediate financial strain.

A Strategy Under Pressure: Asset Sales on the Horizon

The mounting debt pressure has forced INNOVATE's hand. According to its regulatory filings, the company missed key milestones tied to its debt covenants, which required it to reduce leverage. As a result, management has commenced a formal process to sell two of its core subsidiaries: its primary growth engine, DBM Global, and its broadcasting arm, HC2 Broadcasting Holdings Inc., which constitutes a major part of the Spectrum segment.

This move presents a profound paradox: to solve its debt crisis, INNOVATE may have to divest the very asset that is delivering its most impressive growth. The sale of DBMG would fundamentally reshape the company, stripping it of its largest revenue and profit contributor. The potential sale of its broadcasting assets further complicates the future of its Spectrum strategy, even as it pursues expansion opportunities.

Management acknowledged these challenges, stating they are actively working to address the company's finances. “Across INNOVATE, we are advancing our strategic priorities and strengthening the foundation of the Company,” Voigt stated, emphasizing a continued focus on financial discipline. The coming months will be critical, as the company navigates the complex process of divesting assets to stabilize its capital structure while attempting to capitalize on the hard-won innovations in its remaining portfolio.