CAPS News & Events

Capstone Holding announced that as it accelerates its transformation to a "full stack AI" company over the course of 2026, it expects to rely less heavily on legacy software vendors such as Salesforce, Sage, Atlassian, Asana, Workday, and Adobe. Matthew Lipman, Chief Executive Officer of Capstone, said, "As we architect the transformation, what would have been multiple million-dollar IT projects that take 18 months and are a complete distraction for the team will be done rapidly, with minimal disruption and at a small fraction of the cost. Our AI software will be constantly improving itself. AI will allow Capstone and other middle-market companies to implement capabilities that were unreachable. These tools are democratizing technology."

Capstone Holding Corp. highlighted early-2026 market conditions "that reinforce Capstone's execution strategy and support continued progress toward sustainable earnings growth." In January, the Russell 2000 outperformed the S&P 500 for 14 consecutive trading sessions, affirming analyst expectations of small-cap leadership in 2026. The company said, "Investor flows are rotating toward small companies with improving margins, putting Capstone in a position of strength as it transitions from platform expansion to monetizing scale." "We expect Capstone's profitability trajectory to become easier for the market to assess as the year progresses," said Matthew Lipman, CEO. "Renewed investor interest in small caps is constructive for our strategy. Management is focused on execution, and we believe sustained financial performance will support a re-rating over time."

The company said, "Capstone Holding published an investor FAQ detailing management's strategy to convert platform scale into margin expansion, cash generation, and long-term per-share value creation. The FAQ provides additional clarity on the Company's capital allocation, with growth initiatives increasingly supported by operating leverage and senior credit to reduce long-term dilution risk...Key Highlights: Reduced Reliance on Equity Financing: With operating leverage and cash generation improving, Capstone expects an increasing share of growth initiatives to be funded through operating cash flow and senior credit rather than equity issuance. Defined Path to Profitability: Management targets a positive corporate EBITDA run-rate beginning in Q2 2026, supported by operating leverage, high-margin products and services, purchasing power, and sustained cost discipline. Strategy-Aligned Capital Structure: Capstone's capital structure is designed to remain flexible as cash flow scales-supporting extensions, refinancing, or consolidation into longer-dated senior facilities. Management does not view debt maturities as a constraint on operations or growth. Disciplined, Accretive Growth Model: Capstone continues to pursue selective acquisitions that enhance route density, margin mix, and operating leverage. Acquisitions are evaluated for immediate accretion, strategic fit, and per-share value creation. Financial Outlook on Track: Capstone continues to pursue a $100M revenue run-rate and steady progress towards 10% EBITDA margins as the business transitions from platform expansion to monetizing scale."

Capstone Holding announced the execution of a cost rationalization program accelerating the Company's transition to positive free cash flow and EBITDA. The initiatives remove approximately $2M in annualized corporate overhead expenses, effective immediately. "2026 is the year we translate the $70 million run-rate platform we've built into a durable profitability engine," said Matthew Lipman, CEO. "By reducing corporate overhead by $2M, we are immediately positioning the Company for sustainable, cash-generative growth. We have a clear line of sight to a positive EBITDA run-rate." The Company has eliminated non-core investor relations and consulting expenditures. This results in an immediate ~$1.7M reduction in operating expenses, directly accretive to the bottom line. Lipman has voluntarily reduced his annual base cash salary to $1.00 for the next year, aligning executive remuneration directly with common shareholder equity appreciation. Management targets these cost reductions to establish a positive Corporate EBITDA run-rate beginning in Q2, independent of revenue growth, materially strengthening Capstone's financial profile against macroeconomic volatility.