Karman Holdings Inc.

Karman reported Q2 revenue of $182 million, up 58% year over year and 20% sequentially. Gross profit was $78 million, up 66%, and gross margin was 43%; net income was $14 million, up 106% year over year; adjusted EBITDA was $55 million, up 55%; and adjusted EPS was $0.14, 43% above last year. For the first six months, revenue was $333 million, up 55%; gross profit was $142 million, up 64%; net income was $22 million versus $2 million a year ago; adjusted EBITDA was $99 million, up 51%; and adjusted EPS was $0.25, up 56%. Backlog was $1.3 billion and bookings were nearly $500 million. Full-year 2026 guidance was raised to revenue of $730 million to $745 million and adjusted EBITDA of $215 million to $222.5 million, with a midpoint margin of 29.7%. Management reaffirmed 25% or higher organic growth for 2026, expects second-half revenue to be split roughly 47%/53% between Q3 and Q4, and kept capital expenditures at 5% of revenue, or roughly $37 million.

Jonathan Rambeau framed the quarter as evidence that Karman is becoming a more integrated, scaled platform, highlighting record bookings, backlog, new customer agreements, and progress on capacity expansion. He said the company is pursuing both organic and inorganic growth, with a new European foothold via the Walker acquisition and continued emphasis on munitions, space, and second-source opportunities. His tone was confident and expansionary, but he also stressed tighter focus on cash and operational discipline.

Michael Willis emphasized the financial strength of the quarter, citing $182 million of revenue, $78 million of gross profit, $55 million of adjusted EBITDA, and record $1.3 billion backlog. He said cash and cash equivalents were $52 million, cash used in operations was $4 million due mainly to receivables and contract assets, and year-to-date CapEx was $22 million, with second-half CapEx expected to step down toward the full-year 5% of revenue plan. He also noted net debt of $752 million, a pro forma leverage ratio of roughly 3.7x adjusted EBITDA, and expected pro forma leverage of about 3.5x by year-end if Walker closes; the term-loan repricing should save about $4 million annually in interest.

Analysts focused on the new space-and-launch LTA, second-source opportunities, organic growth durability, free cash flow, margins, backlog duration, and the impact of the Blue Origin/New Glenn anomaly. Management said the LTA is a 5-year agreement that should begin contributing in the back half of 2026 and then roll off at a relatively even pace over the following 4.5 years. On second sourcing, management called it a net opportunity: they do not expect a meaningful long-term margin hit, and they see chances to win additional second-source work where suppliers have not invested enough. On free cash flow, management said they still believe long-term free cash flow should be 80% to 90% of net income, and on backlog they said most of the $500 million in quarterly bookings supports 2027 and beyond.