r/Castellum_Inc_CTM

There’s been a lot to digest with Castellum ($CTM) over the last couple of days, so I wanted to put together the biggest takeaways from both the recent Navy development and two separate conversations that Mounwp and I had with CEO Glen Ives.
First — the Trump/Navy development.
President Trump has reportedly directed the Navy to move away from EMALS on future aircraft carriers and return to steam-powered catapults.
Naturally, this raised some concern because Castellum subsidiary Specialty Systems (SSI) has extensive experience supporting Aircraft Launch and Recovery Equipment (ALRE).
However, I think an important distinction is getting lost in some of the discussion:
ALRE is much broader than EMALS.
Aircraft still need to launch and recover regardless of whether the underlying catapult technology is electromagnetic or steam. Engineering, systems integration, software, testing and technical support don’t simply disappear because the technology changes.
After the news broke, Mounwp reached back out to Glen. According to Mounwp’s summary of that communication, Castellum had anticipated this issue, and Glen indicated that whether the technology is steam or electric, there should still be substantial engineering, systems-integration and software-engineering work.
That does not guarantee CTM wins that work, and I don’t think this development should somehow be spun as bullish.
But I also haven’t seen evidence that CTM’s ALRE business has suddenly been destroyed, existing ALRE work has been cancelled, or that some massive portion of backlog has disappeared.
For me, this is something to monitor, not something to panic over or dismiss.

My Call With Glen + Mounwp’s Separate Call
What I found particularly interesting is that Mounwp and I spoke with Glen completely separately, asked different questions, and still came away with a very similar understanding of Castellum’s broader strategy.
The simplest way I can describe it is:
Organic growth + acquisitions + business-development investment + new capabilities/contract access = an attempt to build a substantially larger defense contractor over time.
My conversation focused heavily on the financial side.
Castellum currently has roughly $17M in cash and zero debt.
I asked why they couldn’t simply use that cash to grow organically instead of pursuing acquisitions.
The answer, as I understood it, comes down to speed and capabilities.
$17M in cash gives CTM capital.
It doesn’t instantly give them new customers, contract vehicles, specialized employees, capabilities, agency relationships or access to adjacent markets.
Those things can be built organically, but that takes time.
An acquisition can potentially bring an established business that already possesses them.
And importantly, the strategy isn’t organic growth OR acquisitions.
It’s organic growth AND acquisitions.

Zero Debt Doesn’t Mean “Never Use Debt”
Another clarification from my conversation:
I did not come away believing Glen is philosophically opposed to debt.
He explained that Castellum previously had roughly $12M in debt with limited cash flow, which restricted the company’s flexibility.
Today CTM is in a completely different financial position.
My understanding of Glen’s philosophy was essentially:
Don’t take on debt just because you can. Preserve flexibility, but if a future deal requires debt and the opportunity justifies it, debt remains an option.

Why Hasn’t an Acquisition Happened Yet?
This was another area where our conversations overlapped.
CTM is evaluating potential companies, but acquisitions are two-sided transactions.
Castellum can identify a company it wants to acquire, but the seller may not be ready.
Some targets are founder-owned. Others may involve private equity. A seller might want another six months, another year, or simply not be ready at all.
One clarification from my call:
When a 6–12 month timeframe came up, Glen was NOT telling me CTM’s acquisition is 6–12 months away.
He was explaining the types of timelines certain potential sellers can operate on.

The Increased Spending / Profitability Debate
This was another area where Glen apparently gave both of us very similar explanations.
Could CTM make its near-term financials look better by reducing expenses?
Potentially, yes.
Cut business development.
Reduce acquisition-related spending.
Reduce certain growth investments.
Assuming everything else stayed equal, EBITDA/profitability would look better.
But management’s argument is that doing so could sacrifice future growth.
Glen does not appear interested in optimizing Castellum around remaining a ~$55M–$60M company that generates a little profit every year.
The ambition discussed with me was to use organic growth, acquisitions and expanded capabilities to eventually build something much larger — with roughly $100M–$150M discussed as part of that broader long-term ambition.
That is NOT guidance and not a guarantee.
It’s simply how I understood the scale management is ultimately trying to reach.

Mounwp Got Some Different Context
Our calls weren’t redundant.
Mounwp got additional context surrounding:
● Precise Systems as an example of an acquisition-led government contractor
● The acquisition “flywheel”
● PMA-290 and its expected ramp
● The Russell 2000 as a potential milestone
● How acquisitions can add capabilities, vehicles and access to new opportunities
My conversation went deeper into:
● The ~$17M cash position
● Zero debt and potential future debt usage
● Why cash alone doesn’t replace acquisitions
● Backlog conversion
● Contract ceilings vs. actual revenue
● Acquisition timing
● Near-term profitability vs. growth investment
Put together, I think the two conversations provide a much clearer picture of what Glen is trying to build.

But Management Doesn’t Get a Free Pass
Understanding the strategy doesn’t mean assuming it will work.
Eventually, execution has to prove the thesis.
I want to see:
Backlog → Revenue
BD spending → Contract wins
Acquisition strategy → An actual acquisition
Higher spending → Stronger future financial performance
PMA-290 → Meaningful contribution as it ramps
And now:
Navy policy changes → Evidence SSI can adapt and remain relevant
If backlog remains large but doesn’t convert over an extended period, that’s a problem.
If CTM keeps talking about acquisitions but never completes one, that’s a problem.
If expenses remain elevated without producing measurable growth, that’s a problem.
And if the Navy’s move away from EMALS eventually results in material cancellations/reductions to CTM work, then the thesis needs to be updated accordingly.

Where I Stand
The Navy development doesn’t make me more bullish on CTM, but based on the information currently available, I also don’t think the extreme reaction that CTM’s ALRE opportunity has been “destroyed” is justified.
The bigger takeaway from both conversations with Glen is that the strategy itself seems pretty clear now.
The question is no longer:
“What is management trying to do?”
The much more important question is:
“Can management actually execute it?”
That’s what I’m watching over the next several quarters.
I made a full video breaking down the Navy development, what Mounwp reported after reaching back out to Glen, and comparing both of our separate conversations with him.
Video: [INSERT YOUTUBE LINK]
For transparency: my conversation with Glen was not a formal interview, and my comments are based on my notes and recollection rather than a word-for-word transcript. Anything regarding Mounwp’s conversation or subsequent communication with Glen is based on the summary Mounwp provided. Nothing here is financial advice.
Curious what everyone else thinks: Does the Navy/steam development materially change your CTM thesis, and what do you most want to see Castellum execute on over the next few quarters?

I guess this could be bad news (future wise) for Castellum's subsidiary (Specialty Systems Incorporated).

Trump orders Navy to return to steam catapults on aircraft carriers

Hey everyone,

I had a productive and constructive call with Glen this afternoon and he walked me through a lot of detail on the company’s strategy and reaffirmed Castellum’s commitment to growing organically while accelerating through acquisitions. There was a lot of discussion, so let me lay out my takeaways:

Glen pointed out to Precise Systems as a reference for the kind of path Castellum is on. Precise was founded back in 1990 out of Lexington Park, MD, doing engineering, program management, and software development for the Navy, Marine Corps, and Air Force, with work in electronic warfare, unmanned systems, and airborne weapons systems. For a long time it was a steady established contractor and not much more than that. Their turning point came in January 2023, when Bluepoint Investment Partners, a private equity firm which focuses on lower-middle market defense and government services companies, made an investment that turned Precise Systems into an acquisition platform. In about three years, Precise made four big acquisitions. They picked up Excet for physical-sciences research and CBRNE work in late 2023, then Jardon & Howard Technologies (JHT) for embedded hardware, software, and open-architecture avionics, and then Mission Focused Systems for systems engineering and cybersecurity early this year. Last week, they acquired Ternion Corp which expands their modeling, simulation and training capabilities. Each acquisition added a genuinely different capability and reached new customers across the DoD and into the intelligence community, rather than just buying more of what they already did. In June, Precise was awarded both a $44.7 million contract for NSWC Structural Performance Engineering Services and a five-year $116.8 million contract for airborne electronic attack warfare at NSWC. This is the disciplined and steady acquisition cadence Castellum is working to achieve.

We don’t have exact details of Precise’s revenue numbers since they’re a privately-owned company but one site estimates that its revenue for 2025 was $368.1 million. Precise proves the model works at this size and in this exact market. Glen also explained that most of the attractive targets are privately held, either founder-owned or increasingly owned by private equity. These businesses don’t trade publicly, don’t openly share their financials, and only become available when the owner decides it’s time to sell it to another buyer. Private equity owned firms run on an investment horizon where a firm buys a company, grows it for several years, and then exits, and that exit window is the moment it becomes acquirable. The company Castellum most wants might simply not be available right now, because the founder isn’t ready or the PE owner hasn’t decided to sell just yet, but that same company or companies could open up eventually. It’s really been about identifying the targets that will, building and keeping the relationships warm, and staying ready and capitalized so that when that window finally opens, usually on the seller’s timeline and not theirs, the company can finally advance discussions to complete an accretive acquisition. This is why patience and readiness are a such a central part of how they operate. They aren’t being slow, they’re positioning to act on windows they don’t actually control.

He reaffirmed the core loop the whole strategy runs on. Accretive acquisitions grow the business and bring in new contract vehicles, these vehicles open up more contract bids and opportunities, winning that work grows headcount and revenue, and the bigger base funds more investment in business capture and the next acquisition. Each turn of the wheel makes the next one easier, and Glen’s mentioned he’s been busy with client meetings and had another one to get to right after our call. The investment in business capture the company keeps talking about is certainly real, active work that the CTM team is working expeditiously to make and achieve.

He said that if the company really wanted to show profit, it has plenty of ways to do it, but there wouldn’t be business growth as a result. Pulling back on the business development, investor relations, and acquisition spending would let them print a profit, but it would cost them the growth that spending generates. The judgment they’ve made is that the best interests of the company and its long-term shareholders lie in continuous growth and development rather than optimizing near-term profit. That’s the front-loaded investment thesis from the earnings report, and it’s genuinely stated as a deliberate and purposeful choice they’re making because they believe the long-term compounding is worth far more than the earnings they’d show today.

He explained why this next acquisition matters so much in how they approach it. Once it’s announced, a series of acquisitions can follow, and that’s what the front-loaded investment is about. They’re doing the groundwork now, building the relationships, the readiness, the capital position, and the capture capability, to set up a repeatable engine rather than a single deal. Getting this first one sets the template and the credibility for the ones that come after, in the same way Bluestone’s investment set up Precise Systems.

Revenue can go flat or dip because of contract modifications or timing and delivery changes that affect when it actually gets recognized, and that’s just a thing that happens in the industry. For Castellum, their contracts, and PMA-290 in particular, were set to start ramping up this year. Q2 reflects contracts that are still in the earlier part of their ramp, with the acceleration ahead of them, and PMA-290 ramping is a named driver of second-half growth straight from Glen.

On the stock itself, he shares that a near-term goal is getting Castellum into the Russell 2000. Getting into the Russell 200 matters because index inclusion brings passive flows, since the funds and ETFs that track the index automatically buy the stock, and that’s adds steady, non-discretionary demand that can bring price stability to a small-cap that trades thinly and can be volatile. For a stock that we’ve recognized that is disconnected from its fundamentals, that kind of demand serves as a real stabilizer however Glen was clear that inclusion into the Russell 2000 was just a stepping stone for what’s much higher. The long-term goal is considerably higher as the business keeps growing and the contracts keep materializing, so it’s a stepping stone toward more broader recognition and a more stable, more fairly valued stock. Glen will alert me when they release the website, and will touch bases with the community to provide more updates as I receive them.

Sold 150k shares this morning kept 50k to lock away and forget. As I sold brought the price down 3 cents more🤣. Wish y'all the best and good luck going forward 👍

A lot of us saw Q2 revenue sitting flat and panicked, but if you look at how federal contracting actually works, this was completely expected and already priced into the transition phase.

​Why Q2 revenue was flat/slightly lower (And why it’s not a problem):

​Legacy Contract Expirations: Legacy defense contracts from 2025 hit their natural expiration dates in Q2, removing a chunk of base revenue.

​The New Contract Ramp: Brand new prime contract wins (like the NAWCAD Lakehurst award) backfilled 100% of that lost revenue, even though these new contracts are only 12% to 17% into their execution phase.

​The Delayed Boom: Federal task orders don't turn on like a light switch; they ramp up over 3 to 6 months. The old expiring work is now behind us, and the massive revenue ramp from these new contracts is right in front of us.

​The proof is in the Balance Sheet:

​10% H1 Growth: First-half revenue reached $28.2M—up 10% YoY. To set a record full-year, CTM only needs ~$12.35M/quarter in H2 (well below our current $13.86M run rate).

​Fortress Cash Stack: Ended Q2 with $16.9M in cash and ZERO long-term debt.

​Massive Pipeline: Sitting on a $271.7M backlog and a expanded $953.5M qualified pipeline.

​Management spent money upfront in Q2 on business development and talent hiring because big contract awards are lining up.

All is pointing to the company setting up for a monster second half of the year as those new contracts hit full billing capacity. Hold steady and let the contract execution play out.

I will admit, I had slightly higher expectations going into this quarter just like the rest of you, but the more I sat with the actual report and what management said, the more I came away genuinely interested. Headline numbers and the underlying reasons in my opinion tell two different things here but to fully understand what’s going on, we must analyze this report thoroughly.

Q2 revenue was $13.9M, effectively flat against $14.0M for Q2 2025 and down modestly from Q1’s $14.3M. First half revenue was $28.2M, up 10% year over year. Gross margin compressed to 34% from 36%. Adjusted EBITDA came in at $0.03M against $0.50M a year ago. Net loss was $1.1M, or ($0.01) per share, while cash rose to $16.9M from $15.8M at the end of Q1. The backlog held at $271.7M and the pipeline expanded to $953.5M from $938M.

Taken at face value, this is a very soft quarter for Castellum. The value of actually doing the work is understanding why it looks this way, because nearly every measure in this financial report came with a reason behind it and not actually deterioration as one might suspect. Management communicated that they consciously prioritized business development, investor relations, and acquisition activity ahead of maximizing near-term earnings. David Bell, CFO, said that the EBITDA decline reflects “the planned 2026 investments in business development, investor relations, and acquisitions activities,” and that “the economics of this work are inherently front-loaded…certain costs are recognized well in advance of the revenue it is intended to generate”. This was a deliberate choice to spend ahead of growth which was explained by the company.

Total operating expenses rose to $5,813,511 from $5,443,970 one year ago, which is an increase of about $370k. Gross profit for this quarter slipped to $4,719,419 from $5,060,447, down about $341K. If you put these together, you’re getting roughly a $700K adverse swing against flat revenue which accounts essentially the entire EBITDA decline. Stock based compensation rose, to $795,538 from $511,814 as part of an agreement during the shareholders meeting to increase the stock based compensation package. They spent ahead of growth in a quarter where they understood that revenue would be flat. As the revenue ramps, that same spending base should work as the leverage rather than a continued drag.

Pay attention to the front-loaded model, because this comes directly from the CFO’s own words about costs being recognized ahead of revenue. At the corporate level, BD, IR, and acquisition spend is incurred now for revenue later. At the contract level, a new award ramps into full billing over time rather than switching on at once. That’s why the newer NAWCAD contracts are still early on, and most of their revenues are ahead. The company attributed the flat revenue to “gains from the ramp up of SSI’s NAWCAD Lakehurst contract, particularly offset by the expected wind down of certain contracts that contributed additional revenue in the second quarter of 2025”. My analysis for this is that the revenue actually left the base as those older contracts expired, and the company still printed $13.9M against $14M. The newer work backfilled almost all of it, while those contracts are, per the earlier data, only 12-17% into execution. So they absorbed the loss of prior-year revenue and held the line using contracts with most of their ramp still ahead. To simplify this, the expiring work is behind them while the ramping work is largely in front.

The CFO attributed Gross margin coming down to 34% from 36% to “a higher mix of subcontractor work, which typically carries a lower margin than direct labor, as well as the cost to complete the remaining work on the two firm-fixed-price contracts.” We documented the Peraton subcontract escalating across five consecutive tranches to roughly $103M obligated, and the Booz Allen SMEP subaward on the USSOCOM side. Subcontract revenue runs at thinner margins than direct labor, so a quarter weighted towards it pulls blended margin down. The margin dip and the Corvus subcontract growth we’ve tracked are likely the same phenomenon that we know about and have direct access to information of.

If you’ve been following me, you would know that the front loaded model was made observable through their job openings. We noted five roles posted as “contingent on award or funding” over the past few weeks:

— RF Engineer (DoD CIO Persistent Spectrum Monitoring)
— Policy Analyst, DoD/ITU
— PKI Engineer, Aberdeen Proving Ground
— Instructional Designer, Washington DC, VCF Transformation
— Senior Data Scientist, Fort Belvoir, VA

The way contingent hiring works usually in the government contracting industry is that a role posted as contingent on award means the company has an internal line of sight to a contract it expects to win that hasn’t been announced. They line up cleared talent ahead of time so they can staff the day the award lands, because putting cleared people on the work immediately is often part of what wins the recompete and smooths the transition. Sourcing TS/SCI-cleared engineers, especially at the $165K-$185K amounts in those postings is expensive and slow so they’re doing that ahead of time. These contract awards could also take weeks and months before they’re announced so it’s strategic for them that they would opt to do this.

I expected cash for this quarter to be at $17M, and cash rose to $16.9M for the quarter, up about $2M since the year end, and the CFO stated that they “funded the business entirely from operating cash flow during the first half, ending the period with a debt-free balance sheet.” For a company this size, self-funding the BD, IR, and acquisition investment without debt or a raise is significant and it shows that their business strategy is intact.

Management guided to record full-year revenue and their first half of $28.2M is 10% above what they reported during the first half of 2025. I should continue to point out that the board’s own $63.84M threshold from the CEO compensation amendment remains on target, but now it would require $35.6M in revenue for the second half and doing so would require the company to report record revenues for Q3 and Q4. Record revenue is achievable, beating 2025’s revenue of $52.9M but we may have to see contract awards materialize for them to achieve the $63.84M baseline objective. I’m curious and will continue to reach out for more clarity about this and more clarity that they will provide tomorrow during the conference call but my thesis hasn’t changed. Castellum is at its inflection point and is expeditiously working towards growth and expansion.

GLEN IVES, CEO:
- Record revenue of $28.2M, as compared to H1 revenue of $25M
- This record combined with the company’s current trajectory allows them to anticipate record revenue growth for 2026
- The second quarter played out largely as they anticipated with regards to contract execution, timing factors for month to month, quarter to quarter in our industry
- Castellum will continue funding their growth investments entirely from their own operations with a debt-free balance sheet and growing cash positions
- Growth for the first half was driven by the continued ramp-up of the three major long term prime contracts which were from the GTMR contract and the $66.2M NAWCAD contract by SSI
- These contracts form the growth base for us in 2026 and well beyond
- The $100,000 variance primarily reflects gains from the ramp-up of SSI’s NAWCAD Lakehurst, partially offset by the expected 2026 wind-down of two firm fixed-press contracts that contributed meaningful revenue in the second quarter of 2025
- We also saw lower volume on certain Corvus subcontracts due to a slower-paced trend we have observed in the government back-filing funded open positions
- These are all dynamics that we continue to work through and they are cyclical in nature in our industry
- Contracts do wind down, new contracts ramp up and the crossover quarters can look flat even when the underlying trajectory is clearly up
- We expanded our business development capacity this year specifically to increase the volume and quality of the opportunities we pursue and we are seeing that investment show up in our pipeline
- Our pipeline is constantly audited for realism
- SSI was awarded a $4M subcontract for ADMACS, was a very significant win for us; our government mission customer specifically chose SSI based on their remarkable past performance and their ability to do the job; Although the monetary value may not be large, there is real potential for future growth
- We achieved Cyber Security Maturity Model Certification Level 2 confirming that Castellum and all of its subsidiaries are trusted with unclassified information supported by Department of War programs
- 2026 is a year in which we are purposely and strategically investing in business development, investor relations, and meaningful acquisition activities
- We think about these investments as the upfront work required to win, grow, and scale Castellum; they come before new contract awards and before the associated revenue shows up in our results
- We are making these investments from a position of financial strength funded by our own operations
- There may be concern about our current net profitability, can say there are actually many ways to ensure profit, but as a young company on the move, and committed to real growth and value, these growth investments are healthy and vital to our longer-term net profitability

DAVID BELL, CFO:
- As Glen described, the small $100,000 difference reflects gains from the early ramp-up of the $66.2M NAWCAD Lakehurst MO&I contract, partially offset by expected wind down of two firm fixed price contracts, on which revenue was recognized in the second quarter of last year, and as well as lower volume on certain Corvus subsidiary subcontracts
- Two factors drove the margin change; First, we carried a higher mix of subcontractor work in the current quarter, particularly on the PMA 290 contract and other large programs; Secondly, we absorbed the cost to complete the remaining work on two fixed price contracts
- The increase [in higher operating expenses] was driven primarily by higher fringe expenses, reflecting the head count additions and higher health insurance costs; we also ramped up our acquisition and investor relations activities
- I want to reinforce Glen’s earlier point here, the EBITDA decline was expected and it reflects the planned 2026 investments in business development, investor relations and acquisition activities we committed to
- The ECONOMICS OF THIS WORK IS INHERENTLY FRONT-LOADED; Expenses are generally recognized well in advance of the revenue they’re intended to generate
- WE ARE TRADING LOWER NEAR-TERM EBITDA FOR STRONGER MULTI-YEAR GROWTH PROFILE
- Net cash provided by operating activities was $2.4 million for the first half, compared to net cash used of $2.3 million in the first half of prior year, a positive swing of over $4.5 million; this improvement was primarily driven by strong collections on accounts receivable
- We did not undertake any equity or debt transactions in the first half of 2026; our liquidity was funding entirely through cash generated from operations
- Ended the quarter with $16.9 million in cash, up from $15.8 million, and $14.9 million from year end; that’s an increase of $2 million since year end generated by the operations of the business itself
- We have no long term debt and stockholders’ equity stood at $35.9 million at the end of the quarter
- WE ARE FUNDING GROWTH INVESTMENTS INTERNALLY WHILE THE CASH BALANCE GROWS, AND THAT GIVES US FLEXIBILITY BOTH FOR ORGANIC INVESTMENT AND DISCIPLINE M&A
- We expect to recognize approximately 16% of the backlog over the next 12 months, and approximately 48% percent cumulatively when including the following 24 months; the timing of funding and option exercises rest with our customers, but this backlog provides a multi-year foundation of revenue visibility that we believe differentiates Castellum at our size
- Growth-focused planned investments are temporarily compressing EBITDA
- We remain committed to deliver record full-year revenue for 2026

GLEN IVES, CEO:
- Phase 3 of Castellum’s evolution remain consistent and are directly aligned to our 2026 updated strategy
- The first half of 2026 was focused on deploying the right resources to those priorities in the context of a very dynamic government contracting environment
- We do expect to deliver record revenue for the full year
- Our focus on the second half is translating that growth into durable, higher margin performance
- These investments are already contributing to the growth we delivered in the first half, and expect it to continue contributing throughout the remainder of the year
- A LARGER, HIGHER QUALITY PIPELINE PURSUED BY A STRONGER CAPTURE TEAM PRODUCES MORE AWARDS OVER TIME
- Our job is to keep that engine running at full throttle and to execute flawlessly on the programs we have already won
- We are also actively pursuing M&A opportunities that meet our criteria; Our standards have not and will not change; We are proactively evaluating businesses that bring differentiated capability, the right contract vehicles, and customer access we do not already have
- An evaluation that is ACCRETIVE to our shareholders and will posture us to grow and scale Castellum effectively, efficiently, and expeditiously
- WE WILL PASS ON A TRANSACTION RATHER THAN FORCE ONE THAT ISN’T IN OUR BEST INTERESTS STRATEGICALLY
- With no debt and a growing balance sheet position, we can afford to be patient and disciplined, while still pressing full throttle to find that right opportunity
- We do believe that underlying budget environment remains supportive of defense and national security spending with backing from both sides of the aisle, particularly where your company, CTM, operates, highly relevant areas, cybersecurity, electronic warfare, C5ISR, autonomous systems, and all the related mission technologies
- The first half of 2026 was a record revenue half for the company, and we expect the full year to be a record as well
- Our company, Castellum, has never been stronger or well-postured in position for future growth than we are today; Our work, our technology solutions and services are more relevant than ever; They are meaningful and in very real demand by our mission customers;
- IT IS THE WORK WE BELIEVE IN, WORK WE LOVE TO DO, WORK THAT EXCITES US EACH AND EVERYDAY, AND IT IS VITAL WORK AND SERVICE AND DIRECT SUPPORT OF OUR NATIONAL SECURITY AND OUR WAR FIGHTERS
- AND FINALLY, IT IS THE WORK THAT NO ONE DOES BETTER THAN US
- I would challenge anyone to find another company our size that has achieved that level of success in such a relatively brief period of time
- Our team are absolutely relentless and true in their shared commitment to our mission and direct support of national security and our warfighters

Q&A:

Q: “What stage are you at in this investment if you’re expecting incremental increases in the back half or if you think that was largely done in the first half?”; “What do you expect the EBITDA margin potential and the operating leverage of the business to be once you begin to build off this base.”

A: DAVID BELL: “We had in our planning the prior year to make investment in our business development by adding in-housing our business development activities, and I think if you look at our pipeline, you’d see that we have very actively engaged in putting qualified, verified and qualified pipeline capabilities. A lot of it came from the discipline of our team that has special knowledge of the areas that we historically worked in the Navy space and also expanding beyond the Navy space, which has been our bread and butter; It will take a while for that to develop; We have a number of contracts that we have submitted and we’re waiting to hear back on those and we have another slate and we have a schedule of contracts that we’ve identified that we’re bidding that will take us out through the end of the year. We’ll come back to you as we develop that”
“We are doing a fantastic discipline of looking for contracts, looking for businesses that either deepen us and where we’re competent or expand our breadth of service or also expand our customer base to where we can provide services that we currently perform; we have super high performance ratings in the work that we do and we’re looking for partners, other companies that want to do the same type of work so we can expand that work and the quality of service that we do; we’re looking for companies with positive EBITDA, companies where we can build synergies; Naturally, there will be some EBITDA improvement. We are not going to load up our expenses, we’re going to make things efficient and where we can eliminate costs. We’re going to eliminate costs. We don’t need various groups, we can create good synergies and if we have great operators and we’re efficient, it will build, affect our EBITDA. Our EBITDA is partially driven by the investments that we’re making now as well as the public company costs we carry when we acquire a company, they’re not going to bring those incremental costs. Were think there’s a lot of ripe opportunities out there that will be accretive and incremental.”
GLEN: “I actually moved our strategy up by 18 to 24 months based upon that success in 2025; We made a calculated purposeful decision that this was a time for us to continue our growth.”

Further answers:
- ALRE will continue to be a backbone of the business, demand will continue to grow from aircraft carriers for the next decade which will allow for more opportunities to expand, build, and deliver on those operations
- Government is scheduled to have several aircraft carriers with ALRE in the Gerald Ford class, Castellum is positioned well to be a main force in that technology area
- Management reaffirms the importance of growing the company through their organic growth strategy and acquisitions, buybacks are not an option on the table for them as of right now
- The company will continue to be patient while it finds the right accretive acquisition for them for the right price, and they’ve continued to do this while still having positive cash operating income
- We have the size and capacity to handle business growth and business size, have people that can take on additional work while maintaining a growing large successful company
- Management is working to increase outreach and engagement with investors, and analysts, and are making active, deliberate, outreach to all those in the know. Castellum is not prepared to give guidance right now, but are providing as much information as they can that they believe is reliable and appropriate