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Applied Energetics Stock Declines as Q2 Loss Widens Y/Y
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Shares of Applied Energetics (AERG - Free Report) have lost 7% since reporting results for the second quarter of 2026. This compares with the S&P 500 index’s 0.4% decline over the same time frame. Over the past month, the stock has declined 6.3% against the S&P 500’s 2.7% return.
Revenue & Earnings Performance
Applied Energetics reported second-quarter revenues of $62,000, down 11.9% from $70,335 a year earlier. The net loss widened 13% to $4.28 million from $3.79 million. After preferred-stock dividends, the loss attributable to common stockholders was $4.29 million compared with $3.79 million in the prior-year period. The basic and diluted loss per share was unchanged at 2 cents. Gross profit nevertheless increased to $40,430 from $22,845 as cost of revenues fell 54.6% to $21,570.
Applied Energetics Inc. Price, Consensus and EPS Surprise
The quarterly operating loss increased to $4.30 million from $3.79 million as total operating expenses rose to $4.34 million from $3.81 million. As of June 30, 2026, cash and cash equivalents stood at $1.12 million, down from $6.44 million as of Dec. 31, 2025. Current assets of $2.21 million exceeded current liabilities of $1.40 million, producing working capital of about $811,000.
Total assets fell to $4.07 million from $9.06 million at year-end 2025, while stockholders’ equity declined to $2.19 million from $7.56 million. Accounts payable increased to $539,961 from $220,908, and notes payable rose to $202,554 from $48,000.
For the first six months, operating activities used $5.12 million in cash compared with $4.13 million a year earlier. The company also used about $80,000 for equipment purchases, including a trailer for transporting testing equipment. One customer generated all second-quarter revenues, while accounts receivable totaled $81,000 and carried no allowance for doubtful accounts.
Factors Influencing the Results
Revenues were constrained because two active customer contracts became unfunded in April 2025 and were still unfunded. Applied Energetics suspended work on them, although the contracts remain open and the parties are seeking alternative funding, including from other parts of the U.S. Department of War.
General and administrative expenses increased 21.1% year over year to $3.42 million, reflecting higher staffing-related costs, stock-based compensation and recruiting expenses. Research and development spending more than doubled to $699,234, driven by new engineering personnel and purchases of specialized components and optical fibers for prototype demonstrations and continued ultrashort-pulse laser development. These increases were partly offset by a 65.6% decline in selling and marketing expenses to $223,330, mainly because the year-earlier quarter included about $450,000 to establish the Battle Lab.
Quarterly employee and consulting stock-based compensation within general and administrative expenses totaled $1.33 million, up from $1.16 million.
Management Commentary & Program Progress
Management said that Applied Energetics continued internal research despite the contract suspensions and remained focused on laser productization, systems integration, software development, beam-director design and turning its business-development pipeline into contracts and teaming arrangements.
During the quarter, it added two business-development contractors and a marketing agency to broaden market awareness among targeted customers.
An April 17 requisition from the University of Rochester totaled $243,000 for the next phase of work supporting the university’s Laboratory for Laser Energetics. The company said that the work was expected to be completed by Sept. 30, 2026, with planning underway for another phase. Integration work involving its ultrashort-pulse technologies and the Kord Firefly platform extended into the third quarter. Management also said that one field test completely disabled a drone sensor at a range meeting prospective customer specifications.
Liquidity & Outlook
Management believes that cash on hand and anticipated government-contract revenues can meet near-term requirements, but warned that execution of its business plan is uncertain. Recurring losses, limited contract activity and the need for more capital raised substantial doubt about the company’s ability to continue as a going concern. Federal budget cuts, contract-award timing, tariffs, inflation and shortages of semiconductors, and optical components remain additional risks.
Other Developments
After June 30, Applied Energetics received $2 million from investors under an equity offering, but had not closed the financing and said final terms could change. The proceeds were therefore recorded as a liability pending finalization.
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Applied Energetics Stock Declines as Q2 Loss Widens Y/Y
Shares of Applied Energetics (AERG - Free Report) have lost 7% since reporting results for the second quarter of 2026. This compares with the S&P 500 index’s 0.4% decline over the same time frame. Over the past month, the stock has declined 6.3% against the S&P 500’s 2.7% return.
Revenue & Earnings Performance
Applied Energetics reported second-quarter revenues of $62,000, down 11.9% from $70,335 a year earlier. The net loss widened 13% to $4.28 million from $3.79 million. After preferred-stock dividends, the loss attributable to common stockholders was $4.29 million compared with $3.79 million in the prior-year period. The basic and diluted loss per share was unchanged at 2 cents. Gross profit nevertheless increased to $40,430 from $22,845 as cost of revenues fell 54.6% to $21,570.
Applied Energetics Inc. Price, Consensus and EPS Surprise
Applied Energetics Inc. price-consensus-eps-surprise-chart | Applied Energetics Inc. Quote
Other Key Business Metrics
The quarterly operating loss increased to $4.30 million from $3.79 million as total operating expenses rose to $4.34 million from $3.81 million. As of June 30, 2026, cash and cash equivalents stood at $1.12 million, down from $6.44 million as of Dec. 31, 2025. Current assets of $2.21 million exceeded current liabilities of $1.40 million, producing working capital of about $811,000.
Total assets fell to $4.07 million from $9.06 million at year-end 2025, while stockholders’ equity declined to $2.19 million from $7.56 million. Accounts payable increased to $539,961 from $220,908, and notes payable rose to $202,554 from $48,000.
For the first six months, operating activities used $5.12 million in cash compared with $4.13 million a year earlier. The company also used about $80,000 for equipment purchases, including a trailer for transporting testing equipment. One customer generated all second-quarter revenues, while accounts receivable totaled $81,000 and carried no allowance for doubtful accounts.
Factors Influencing the Results
Revenues were constrained because two active customer contracts became unfunded in April 2025 and were still unfunded. Applied Energetics suspended work on them, although the contracts remain open and the parties are seeking alternative funding, including from other parts of the U.S. Department of War.
General and administrative expenses increased 21.1% year over year to $3.42 million, reflecting higher staffing-related costs, stock-based compensation and recruiting expenses. Research and development spending more than doubled to $699,234, driven by new engineering personnel and purchases of specialized components and optical fibers for prototype demonstrations and continued ultrashort-pulse laser development. These increases were partly offset by a 65.6% decline in selling and marketing expenses to $223,330, mainly because the year-earlier quarter included about $450,000 to establish the Battle Lab.
Quarterly employee and consulting stock-based compensation within general and administrative expenses totaled $1.33 million, up from $1.16 million.
Management Commentary & Program Progress
Management said that Applied Energetics continued internal research despite the contract suspensions and remained focused on laser productization, systems integration, software development, beam-director design and turning its business-development pipeline into contracts and teaming arrangements.
During the quarter, it added two business-development contractors and a marketing agency to broaden market awareness among targeted customers.
An April 17 requisition from the University of Rochester totaled $243,000 for the next phase of work supporting the university’s Laboratory for Laser Energetics. The company said that the work was expected to be completed by Sept. 30, 2026, with planning underway for another phase. Integration work involving its ultrashort-pulse technologies and the Kord Firefly platform extended into the third quarter. Management also said that one field test completely disabled a drone sensor at a range meeting prospective customer specifications.
Liquidity & Outlook
Management believes that cash on hand and anticipated government-contract revenues can meet near-term requirements, but warned that execution of its business plan is uncertain. Recurring losses, limited contract activity and the need for more capital raised substantial doubt about the company’s ability to continue as a going concern. Federal budget cuts, contract-award timing, tariffs, inflation and shortages of semiconductors, and optical components remain additional risks.
Other Developments
After June 30, Applied Energetics received $2 million from investors under an equity offering, but had not closed the financing and said final terms could change. The proceeds were therefore recorded as a liability pending finalization.