Crossroads Capital Q1 2026 Investor Letter Highlights Performance and Key Holdings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: Yahoo Finance
- Fund Performance: Crossroads Capital reported a 4.2% net increase in Q1 2026, with a gross return of 21.3% and a net return of 17.1% since inception, indicating resilience and growth potential amidst market volatility.
- Market Environment: The stable market trends of 2025 were disrupted by geopolitical tensions linked to Trump's unpredictable foreign policy, causing the S&P 500 to decline by approximately 4.3%, yet Q1 fundamentals aligned with broader market trends, suggesting sustained investor confidence.
- Merlin, Inc. Contribution: Merlin, Inc. (NASDAQ:MRLN) contributed 40% to the fund's net gains in Q1, despite a one-month return of -37.81%, highlighting its volatility as a newly public company while reflecting potential long-term value.
- Investment Strategy: Crossroads Capital categorizes Merlin, Inc. as a special situation investment, believing that its market repricing has barely begun, and if milestones are met, it will further enhance its position in the portfolio, demonstrating confidence in future growth.
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About MRLN
Merlin, Inc. is an aerospace and defense technology company. The Company’s non-human pilot system, Merlin Pilot, integrates hardware and software to deliver an autonomous flight solution that spans the flight process from takeoff to touchdown. It utilizes sensor technologies to assess the aircraft’s state and its surrounding environment, allowing it to navigate and recommend trajectory adjustments as necessary. It uses artificial intelligence (AI) to interpret air traffic control voice communications through natural language processing. Its system complements human pilots with software that uses learning techniques for weather navigation and can operate without ground communications and Global Positioning System (GPS) navigation. Its Aircraft Platforms include C-130J and Tactical Autonomy. The C-130J is used in military transport aircraft globally. The Tactical Autonomy focuses on mobility and refueling systems to improve staffing and surge capabilities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Crossroads Capital Q1 2026 Investor Letter Highlights Performance and Key Holdings
- Fund Performance: Crossroads Capital reported a 4.2% net increase in Q1 2026, with a gross return of 21.3% and a net return of 17.1% since inception, indicating resilience and growth potential amidst market volatility.
- Market Environment: The stable market trends of 2025 were disrupted by geopolitical tensions linked to Trump's unpredictable foreign policy, causing the S&P 500 to decline by approximately 4.3%, yet Q1 fundamentals aligned with broader market trends, suggesting sustained investor confidence.
- Merlin, Inc. Contribution: Merlin, Inc. (NASDAQ:MRLN) contributed 40% to the fund's net gains in Q1, despite a one-month return of -37.81%, highlighting its volatility as a newly public company while reflecting potential long-term value.
- Investment Strategy: Crossroads Capital categorizes Merlin, Inc. as a special situation investment, believing that its market repricing has barely begun, and if milestones are met, it will further enhance its position in the portfolio, demonstrating confidence in future growth.
See More
Merlin, Inc. Reports Increased Q1 Loss Amid Revenue Growth
- Financial Performance: Merlin, Inc. reported a GAAP net loss of $90.4 million in Q1, a significant increase from a loss of $12.7 million in Q1 2025, indicating substantial challenges in profitability.
- Revenue Growth: Despite the widening losses, the company achieved revenue of $1 million in Q1, reflecting an 11.1% year-over-year increase, which highlights growth potential in certain business areas.
- Cash Position: As of March 31, 2026, Merlin's cash, cash equivalents, and short-term investments totaled $122.8 million, a significant increase from $59.3 million at December 31, 2025, enhancing the company's liquidity and financial stability.
- Financing Impact: The company raised $80 million through a PIPE to support program execution; however, the share issuance led to a 2.5% decline in stock price, and an 8% drop following the financing announcement, indicating market sensitivity to dilution effects.
See More
Merlin Raises $80M Through PIPE Financing Agreement
- Financing Agreement Details: Merlin has signed a securities purchase agreement with an existing institutional shareholder to raise $80 million through a private investment in public equity (PIPE), planning to issue 8 million shares of common stock and 4 million warrants at a strike price of $6.67 per share, expiring in five years, thereby enhancing the company's capital structure.
- Stock Price Movement: Following the financing announcement, Merlin's shares fell by 2.5% during early trading on Wednesday, reflecting market concerns over potential dilution, which may impact investor confidence and short-term stock performance.
- Cash Flow Enhancement: With this financing, Merlin expects total cash and cash equivalents to reach $183 million, a significant increase from the current $107 million, thereby enhancing financial flexibility to support growth plans and commercial launch timelines for 2026-2027.
- Planned Use of Funds: The company stated that proceeds from the investment will be used to support revenue generation and long-term value creation, including advancing core platform development, funding regulatory approval activities, scaling program capacity, and supporting the execution and expansion of existing and new customer contracts.
See More
Merlin Raises $80M via PIPE Investment to Strengthen Balance Sheet
- Funding Size: Merlin announced an $80M private investment in public equity (PIPE) from an existing institutional investor, issuing 8M new common shares along with warrants for 4M additional shares at $6.67 each, valid for five years, indicating a proactive capital-raising strategy.
- Cash Flow Enhancement: Following the transaction, the company's total cash position will increase from approximately $107M to about $183M, significantly strengthening its financial standing and providing robust funding support for future business expansion.
- Use of Proceeds: The net proceeds will be allocated to platform growth, regulatory approvals, scaling operations, and expanding customer contracts, reflecting the company's strategic focus on future growth and market expansion plans.
- Stock Price Reaction: Despite the financing bolstering the balance sheet, the stock is trading at $10.62, down approximately 8.13%, which reflects market concerns over equity dilution and may impact investor confidence.
See More
Merlin Inc. Secures $80 Million in PIPE Financing
- Financing Agreement: Merlin Inc. has entered into a securities purchase agreement with an existing institutional shareholder to raise $80 million through a PIPE, which will increase total cash resources to $183 million, thereby enhancing financial flexibility to accelerate growth plans for 2026-2027.
- Equity Issuance Details: The transaction involves the issuance of 8 million shares of common stock and warrants for 4 million shares at a strike price of $6.67, with the deal expected to close around May 1, 2026, further solidifying the company's capital structure.
- Clear Use of Proceeds: Proceeds from the financing will be allocated to advance core platform development, support regulatory approval activities, and scale program capacity, aiming to enhance revenue generation and create long-term value, demonstrating the company's clear roadmap for future growth.
- Increased Market Confidence: CEO Matt George noted that this investment reflects the confidence of a long-term partner in the business, and the capital infusion will provide additional flexibility to accelerate execution against the defined revenue growth path.
See More
Merlin Partners with RIG for UAE Autonomy Solutions
- Exclusive Partnership: Merlin has entered into an exclusive teaming agreement with Remah International Group in the UAE to introduce its autonomy capabilities, aiming to explore suitable use cases and aircraft platforms, thereby advancing technological progress in aviation autonomy within the UAE.
- Strategic Importance: Amid heightened geopolitical tensions in the Middle East, this collaboration not only enhances the UAE's defense capabilities but also reduces risks to human aircrews, thereby increasing operational flexibility and persistence in complex missions, ensuring mission success.
- Certification and Investment: Merlin's autonomy systems are in the process of certification, and RIG's support will ensure reliability across both civil and military operations, promoting national AI capabilities and sovereign investment while expanding applications across the aviation sector.
- Optimistic Market Outlook: Merlin's CEO highlighted the strong demand for aviation autonomy in the Middle East, combined with RIG's support for innovation, making this partnership poised for significant market potential to effectively address evolving mission requirements and geopolitical challenges.
See More
Crossroads Capital Q1 2026 Investor Letter Highlights Performance and Key Holdings
- Fund Performance: Crossroads Capital reported a 4.2% net increase in Q1 2026, with a gross return of 21.3% and a net return of 17.1% since inception, indicating resilience and growth potential amidst market volatility.
- Market Environment: The stable market trends of 2025 were disrupted by geopolitical tensions linked to Trump's unpredictable foreign policy, causing the S&P 500 to decline by approximately 4.3%, yet Q1 fundamentals aligned with broader market trends, suggesting sustained investor confidence.
- Merlin, Inc. Contribution: Merlin, Inc. (NASDAQ:MRLN) contributed 40% to the fund's net gains in Q1, despite a one-month return of -37.81%, highlighting its volatility as a newly public company while reflecting potential long-term value.
- Investment Strategy: Crossroads Capital categorizes Merlin, Inc. as a special situation investment, believing that its market repricing has barely begun, and if milestones are met, it will further enhance its position in the portfolio, demonstrating confidence in future growth.
See More
Merlin, Inc. Reports Increased Q1 Loss Amid Revenue Growth
- Financial Performance: Merlin, Inc. reported a GAAP net loss of $90.4 million in Q1, a significant increase from a loss of $12.7 million in Q1 2025, indicating substantial challenges in profitability.
- Revenue Growth: Despite the widening losses, the company achieved revenue of $1 million in Q1, reflecting an 11.1% year-over-year increase, which highlights growth potential in certain business areas.
- Cash Position: As of March 31, 2026, Merlin's cash, cash equivalents, and short-term investments totaled $122.8 million, a significant increase from $59.3 million at December 31, 2025, enhancing the company's liquidity and financial stability.
- Financing Impact: The company raised $80 million through a PIPE to support program execution; however, the share issuance led to a 2.5% decline in stock price, and an 8% drop following the financing announcement, indicating market sensitivity to dilution effects.
See More
Merlin Raises $80M Through PIPE Financing Agreement
- Financing Agreement Details: Merlin has signed a securities purchase agreement with an existing institutional shareholder to raise $80 million through a private investment in public equity (PIPE), planning to issue 8 million shares of common stock and 4 million warrants at a strike price of $6.67 per share, expiring in five years, thereby enhancing the company's capital structure.
- Stock Price Movement: Following the financing announcement, Merlin's shares fell by 2.5% during early trading on Wednesday, reflecting market concerns over potential dilution, which may impact investor confidence and short-term stock performance.
- Cash Flow Enhancement: With this financing, Merlin expects total cash and cash equivalents to reach $183 million, a significant increase from the current $107 million, thereby enhancing financial flexibility to support growth plans and commercial launch timelines for 2026-2027.
- Planned Use of Funds: The company stated that proceeds from the investment will be used to support revenue generation and long-term value creation, including advancing core platform development, funding regulatory approval activities, scaling program capacity, and supporting the execution and expansion of existing and new customer contracts.
See More
Merlin Raises $80M via PIPE Investment to Strengthen Balance Sheet
- Funding Size: Merlin announced an $80M private investment in public equity (PIPE) from an existing institutional investor, issuing 8M new common shares along with warrants for 4M additional shares at $6.67 each, valid for five years, indicating a proactive capital-raising strategy.
- Cash Flow Enhancement: Following the transaction, the company's total cash position will increase from approximately $107M to about $183M, significantly strengthening its financial standing and providing robust funding support for future business expansion.
- Use of Proceeds: The net proceeds will be allocated to platform growth, regulatory approvals, scaling operations, and expanding customer contracts, reflecting the company's strategic focus on future growth and market expansion plans.
- Stock Price Reaction: Despite the financing bolstering the balance sheet, the stock is trading at $10.62, down approximately 8.13%, which reflects market concerns over equity dilution and may impact investor confidence.
See More
Merlin Inc. Secures $80 Million in PIPE Financing
- Financing Agreement: Merlin Inc. has entered into a securities purchase agreement with an existing institutional shareholder to raise $80 million through a PIPE, which will increase total cash resources to $183 million, thereby enhancing financial flexibility to accelerate growth plans for 2026-2027.
- Equity Issuance Details: The transaction involves the issuance of 8 million shares of common stock and warrants for 4 million shares at a strike price of $6.67, with the deal expected to close around May 1, 2026, further solidifying the company's capital structure.
- Clear Use of Proceeds: Proceeds from the financing will be allocated to advance core platform development, support regulatory approval activities, and scale program capacity, aiming to enhance revenue generation and create long-term value, demonstrating the company's clear roadmap for future growth.
- Increased Market Confidence: CEO Matt George noted that this investment reflects the confidence of a long-term partner in the business, and the capital infusion will provide additional flexibility to accelerate execution against the defined revenue growth path.
See More
Merlin Partners with RIG for UAE Autonomy Solutions
- Exclusive Partnership: Merlin has entered into an exclusive teaming agreement with Remah International Group in the UAE to introduce its autonomy capabilities, aiming to explore suitable use cases and aircraft platforms, thereby advancing technological progress in aviation autonomy within the UAE.
- Strategic Importance: Amid heightened geopolitical tensions in the Middle East, this collaboration not only enhances the UAE's defense capabilities but also reduces risks to human aircrews, thereby increasing operational flexibility and persistence in complex missions, ensuring mission success.
- Certification and Investment: Merlin's autonomy systems are in the process of certification, and RIG's support will ensure reliability across both civil and military operations, promoting national AI capabilities and sovereign investment while expanding applications across the aviation sector.
- Optimistic Market Outlook: Merlin's CEO highlighted the strong demand for aviation autonomy in the Middle East, combined with RIG's support for innovation, making this partnership poised for significant market potential to effectively address evolving mission requirements and geopolitical challenges.
See More
