DPC Holdings — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue reached $308.1 million for the three months ended September 27, 2026, a 39.2% increase year-over-year from $221.4 million; for the nine months ended September 27, 2026, revenue was $813.4 million, up 33.3% from $610.4 million.
• GAAP net income was $31.8 million for the quarter compared to a net loss of $42.2 million in the prior year quarter; for the nine months, GAAP net loss was $146.8 million compared to $144.7 million in the prior year.
• GAAP earnings per share (EPS) were $0.21 for the quarter versus a loss of $0.37 per share in the prior year; for the nine months, EPS was a loss of $1.17 versus a loss of $1.28 in the prior year.
• Adjusted EBITDA was $58.2 million for the quarter, up 55.6% year-over-year from $37.4 million, with an adjusted EBITDA margin of 18.9% (up 200 basis points); for the nine months, adjusted EBITDA was $146.1 million, up 42.7% from $102.4 million, with a margin of 18.0% (up 120 basis points).
• Adjusted net income was $72.8 million for the quarter versus $24.3 million in the prior year; for the nine months, adjusted net income was $89.4 million versus $6.0 million.
• Adjusted EPS was $0.49 for the quarter versus $0.22 in the prior year; for the nine months, adjusted EPS was $0.71 versus $0.05.
• Cash and cash equivalents were $277.1 million with borrowings of $85.6 million as of September 27, 2026, resulting in a net cash position of $191.5 million.
• Deferred revenue was $81.9 million as of September 27, 2026, compared to $0 at December 31, 2025.
• Free cash flow for the nine months was $(154.3) million; adjusted free cash flow for the nine months was $62.9 million (excluding the $217.2 million Management Incentive Plan payment).

Guidance and Future Outlook:

• Full Year 2026 revenue guidance was raised to $1,115 million–$1,130 million from a previous range of $1,000 million–$1,040 million.
• Full Year 2026 adjusted EBITDA guidance was raised to $204 million–$207 million from $182 million–$187 million.
• Full Year 2026 adjusted EBITDA margin guidance is approximately 18% to 19.0% (excluding metal inflation).
• Full Year 2027 revenue guidance is $1,230 million to $1,330 million.
• Full Year 2027 adjusted EBITDA guidance is $240 million to $260 million.
• Full Year 2027 adjusted EBITDA margin guidance is approximately 19.5%.
• Full Year 2027 adjusted EPS guidance is $1.00 to $1.10.
• Full Year 2027 free cash flow guidance is $(20) million to $20 million.
• Full Year 2027 total capital expenditure guidance is $145 million to $170 million.
• The company expects over $300 million of annual incremental margin-accretive revenue from strategic partnerships by 2031.
• The fifth strategic customer partnership is expected to deliver over $100 million of annual incremental margin-accretive revenue by 2032.

Business Segments and Product Lines:

• Engine Products segment revenue grew 43% year-over-year, driven by 47% growth in Europe and 37% growth in North America, reflecting above-market growth in Aerospace and Industrial Gas Turbine (IGT) markets.
• Engine Products segment adjusted EBITDA grew 70% year-over-year, with 46% growth in Europe and 129% growth in North America; the segment adjusted EBITDA margin increased 380 basis points to 23.8%.
• Turbo Wheels segment revenue increased 11.9% in the quarter to $50.9 million; excluding the divested Ivostud business, revenue grew 20%.
• Turbo Wheels segment adjusted EBITDA decreased 19.4% to $2.5 million in the quarter; excluding Ivostud, adjusted EBITDA increased 12%.
• The company signed a fifth strategic customer partnership, a minimum 10-year contract with an IGT OEM for gas turbine blades and vanes, with customer funding anticipated to cover ~80% of a >$200 million capacity investment at the Bochum, Germany facility.
• The company acquired a 50% stake in Montana Precision Products (MPP) from SeaCast, a joint venture with Unison (a GE Aerospace company), for cash on October 30, 2026.
• The company divested Ivostud, a non-core business held for sale, to Lenbach Equity Opportunities III. GmbH & Co. KG on October 23, 2026.
• The company secured its first contract to supply casting products into the Unmanned Aerial Vehicle (UAV) end market in 2027 within the Turbo Wheels segment.

Market and Competitive Landscape:

• The Aerospace market is driven by rising air travel, ageing fleets, and higher fuel prices supporting fuel-efficient engines.
• The IGT market is driven by increasing electricity demand, energy transition, security, climate change, reliability, and AI advancement/data center development.
• Industry consolidation is expected to reduce the number of independent, scalable casting suppliers, positioning DPC to capture additional market share.
• Over 70% of revenue is under Long-Term Agreements (LTAs), with an order book of approximately $1 billion as of the reporting date, up from $725 million at December 31, 2025.
• The company faces metal cost inflation, which diluted the consolidated adjusted EBITDA margin by 90 basis points in the quarter.

Risks and Challenges:

• Metal cost inflation pass-through impacts margins, though the company utilizes value-based pricing and pass-through mechanisms.
• The company faces risks related to customer program delays, design changes, or cancellations affecting order conversion.
• Execution risks exist regarding capacity expansion and bringing new manufacturing capabilities online on time and on budget.
• The company faces risks related to the successful integration of the MPP joint venture and realization of expected benefits.
• The company has stated an intention not to pay cash dividends for the foreseeable future.

Management Commentary and Tone:

• CEO Mike Quinn described the quarter as "exciting," citing record revenue, adjusted EBITDA, and margin progression.
• Management highlighted that visible growth is "stronger or clearer than ever," supported by a strong order book and strategic partnerships.
• Management expressed confidence in the structural growth drivers of the Aerospace and IGT end markets.
• The tone indicates a focus on operating leverage, pricing benefits, and operational excellence to drive margin expansion.

Other Key Points:

• The company refinanced debt facilities with a new $325 million unsecured senior revolving credit facility with $150 million accordion capacity, replacing term loans and ABL facilities.
• The refinancing includes a loss on extinguishment of debt of approximately $21.5 million in the quarter.
• The company completed its IPO on June 26, 2026, with net proceeds of $1,062.4 million used to repay the Shareholder PIK Loan.
• The company paid a non-recurring Management Incentive Plan (MIP) of $217.2 million in the nine-month period.
• Capital expenditure for the nine months was $33.6 million, including capacity investments supported by strategic customer partnerships.
• The company operates 14 advanced manufacturing facilities across North America, Europe, the United Kingdom, and Asia.
• The company's adjusted net cash position improved significantly from a net debt position of $(524.6) million as of December 31, 2025, to a net cash position of $191.5 million as of September 27, 2026.