WidePoint Corporation 2026 Q2 Earnings Call

Sir, please proceed. 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 solution set, more than two decades of proven performance, and the deep integration of our solutions into DHS's operations. Precedent also reinforces our view. Unsuccessful bidders protested 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 protestor 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 CWMS 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 represent 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 CWMS 2.0. 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%-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%-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 1st, 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 earning 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.