Nov 5, 2026, 4:17 PM ETIndustrials

Karman Space & Defense — Third Quarter Fiscal Year 2026 Earnings Summary

KRMNKARMAN HOLDINGS INC

Financial Performance

Reported record quarterly revenue of $201.6 million for the three months ended September 30, 2026, representing a 65.6% year-over-year increase compared to $121.8 million in the prior-year quarter; nine-month revenue reached $534.9 million, up 58.7% year-over-year.
Achieved record quarterly net income of $20.9 million, a 174% increase from $7.6 million in the prior-year quarter; earnings per fully diluted share were $0.16 versus $0.06 previously.
Reported record quarterly adjusted EBITDA of $60.5 million, a 60% year-over-year increase from $37.7 million; adjusted earnings per fully diluted share were $0.19 compared to $0.10 in the prior-year quarter.
Generated $26.7 million in net cash provided by operating activities for the quarter and $13.4 million in free cash flow.
Total backlog reached a record $1.7 billion at quarter-end, an increase of 108% compared to fiscal year-end 2025.
Net cash provided by operating activities for the nine months ended September 30, 2026, was $23.8 million, compared to a use of $30.8 million in the prior-year period.
Cash and cash equivalents increased to $68.2 million as of September 30, 2026, from $34.0 million at December 31, 2025.
Long-term debt, net of current portion, increased to $851.5 million as of September 30, 2026, from $495.3 million at December 31, 2025.

Raised full-year fiscal 2026 revenue guidance to a range of $755 million to $760 million.
Raised full-year fiscal 2026 adjusted EBITDA guidance to a range of $225 million to $227 million.
Management targets a long-term organic revenue growth rate of 20% to 25%.
Guidance excludes the impact of any future acquisitions.
Management is currently negotiating two additional long-term agreements and executing initial phases of two second-source opportunities.
The company is actively pursuing three more opportunities in a strong demand environment.

Hypersonics and Strategic Missile Defense: Revenue was $51.1 million for the quarter (up 39.6% YoY) and $130.2 million for the nine months (up 28.1% YoY), driven by increased production of key interceptor programs and a new surface-to-surface missile system.
Space and Launch: Revenue was $37.9 million for the quarter (down 6.9% YoY) but $123.8 million for the nine months (up 8.5% YoY); quarterly decline was due to customer order timing and shifting launch schedules, while nine-month growth was driven by orders from emerging and legacy providers.
Tactical Missiles and Integrated Defense Systems: Revenue was $67.6 million for the quarter (up 51.9% YoY) and $175.8 million for the nine months (up 45.1% YoY), driven by core production programs including unmanned aircraft systems and counter-UAS.
Maritime Defense Systems: Revenue was $45.0 million for the quarter and $105.0 million for the nine months, primarily driven by legacy and next-generation submarine and surface vessel programs; prior year figures were included in other end markets.
Generated quarterly bookings of nearly $465 million across all end markets.
Secured a significant seven-year contract with Lockheed Martin supporting the THAAD program.
Completed the acquisition of Walker Precision Holdings Limited to expand presence in the European defense market.

Supplies capabilities to more than 150 customers across more than 150 programs.
Operates as a specialized engineering and manufacturing partner for critical defense and space programs.
Management notes a strong demand environment and is gaining market share while creating shareholder value.
The company's unique merchant supplier position allows it to support high-priority defense programs enhancing national security.
The Space and Launch business supports both space exploration and emerging commercial space opportunities.

Significant portion of revenue is generated from contracts with the U.S. military, making the business dependent on U.S. defense budget spending.
U.S. government contracts are subject to competitive bidding processes that may consume resources without generating revenue.
Business operations expose the company to numerous legal and regulatory requirements; violations could materially adversely affect operations.
Risks include inability to enforce intellectual property or defend against infringement assertions.
Future performance depends on the ability to efficiently integrate acquisitions, obtain and retain contracts, and react to changes in government spending timing and amounts.
Forward-looking statements regarding adjusted EBITDA cannot be reconciled to GAAP measures without unreasonable effort due to high variability in excluded non-core operating items.

CEO Jon Rambeau highlighted record results including 66% total revenue growth, 25% organic revenue growth, 60% adjusted EBITDA growth, and a doubling of backlog.
Management expressed confidence in the increased fiscal 2026 guidance and focus on building backlog for 2027 and beyond.
The tone indicates an offensive strategy to gain market share and create value for shareholders amidst strong demand.
Management emphasized expanding the team, broadening the global footprint, and strengthening the organization.
CFO Chris Boynton, COO Jonathan Beaudoin, and departing CFO Mike Willis participated in the conference call.

Completed the acquisition of Walker Precision Holdings Limited during the quarter.
Acquired Seemann Composites, LLC and Materials Sciences LLC during the nine-month period, contributing to transaction-related expenses.
Issued term loans netting $230.2 million in the quarter and $490.3 million for the nine months.
Paid $1.2 million in finance lease payments for the quarter and $3.4 million for the nine months.
Incurred $1.9 million in debt issuance costs during the quarter related to credit agreement amendments.
The company hosts a conference call and live webcast on November 5, 2026, at 1:30 pm Pacific time.
A supplemental investor presentation is available on the company's Investor Relations website.