Karman Holdings Inc.

Karman reported Q1 fiscal 2026 revenue of $151 million, up 51% year over year. Gross profit was $64 million, up 62%, with gross margin of 42%; adjusted EBITDA was $45 million, up nearly 50%; adjusted EPS was $0.11 per diluted share versus $0.05; and net income was $8 million versus a $5 million loss a year ago. Backlog grew 61% year over year to more than $1 billion. For FY2026, management raised guidance to revenue of $720 million to $735 million and adjusted EBITDA of $208.5 million to $219.5 million, implying a 29.4% margin at the midpoint. The company said full-year revenue growth is expected to be roughly half organic and half inorganic, with the impact of the higher guidance weighted to the second half of 2026.

Jon Rambeau emphasized that he sees Karman’s strategy as already working and does not plan major strategic changes, focusing instead on customer relationships, on-time delivery, and continued organic and inorganic growth. He framed the company as a differentiated merchant supplier across defense, space, and launch, and said he wants to unlock more value through better integration of capabilities. His tone was confident and constructive, with repeated references to strong demand, record backlog, and opportunities that extend through 2027 and beyond.

Mike Willis said the quarter showed record financial performance, with $151 million of revenue, $64 million of gross profit, 42% gross margin, and $45 million of adjusted EBITDA. He noted cash and cash equivalents ended at $74 million, up $40 million from year-end 2025, while debt stood at $758 million at SOFR plus 2.75%; leverage is expected to decline to about 3x adjusted EBITDA by the end of 2026. CapEx was $7 million in the quarter and is expected to be about 5% of revenue, or approximately $36 million, for the year. He also said G&A and interest expense should rise moderately because of Seemann and MSC, and the statutory tax rate is expected to be 26.5% for FY2026.

Analysts focused on the new missile framework agreements, asking how firm the commitments are and whether they imply acceleration later in 2026 and into 2027. Management said the commitments vary by customer and come in different forms, including letters of intent and draft long-term agreements, with some modest 2026 upside but much more visibility for 2027-2029 and beyond. Questions also centered on unmanned systems, M&A targets, labor availability, and supply chain; management said Karman sees opportunities across UAV and larger aircraft integration, is pursuing close-adjacent bolt-on acquisitions, and is not seeing significant labor or supply chain constraints. On the revenue visibility question, management said the 90% figure includes a mix of already planned work and upside, with most of the new commitment value tied to future years.