TAT Technologies Ltd.

Second-quarter revenue was $52.9 million versus $43.1 million in Q2 2025, up nearly 23%. Gross profit increased 23% year over year to $13.3 million, with gross margin remaining above 25%. Operating income was $5.6 million, or 10.6% of revenue, versus $4.4 million, or 10.3% a year ago. Net income was $8.1 million versus $3.4 million, and diluted EPS was $0.61 versus $0.30; excluding a one-time $4.3 million gain from selling a minority interest, net income was $4.6 million, or $0.35 per diluted share. Adjusted EBITDA, excluding the one-time gain, was $7.4 million, or 14% of revenue, versus $6.1 million, also 14%, in Q2 2025. For the first half, revenue was $94.1 million, gross profit was $23.4 million, gross margin was 24.8%, operating income was $8.6 million, net income was $11.5 million, and adjusted EBITDA was $12.3 million, or 13.1% margin. Backlog ended June 30, 2026 at a record $615 million in one part of the call and management later referred to a record backlog of $650 million. Management did not provide formal revenue or EPS guidance, but said backlog, improving supply chain conditions, and the Honeywell agreement support confidence in continued profitable growth; they also said new wins should flow over 3 to 5 years and that Q2 included some catch-up from Q1.

Igal Zamir framed the quarter as an inflection point, saying TAT delivered another record quarter and strengthened its position as a more important aftermarket partner across the aviation ecosystem. He emphasized the strategic importance of the Honeywell deal, the extension of MRO authorization to 2036, and the addition of distribution rights that broaden TAT’s platform coverage. His tone was confident and constructive, but he repeatedly tied the pace of further improvement to supply-chain normalization and disciplined execution.

Ehud Ben-Yair said the quarter benefited from strong demand, record backlog, and better supply conditions that allowed more work to convert into revenue. He cited revenue of $52.9 million, gross profit of $13.3 million, gross margin above 25%, operating income of $5.6 million, net income of $8.1 million, and adjusted EBITDA of $7.4 million excluding the one-time gain. He also noted operating cash outflow of $0.6 million, explained by higher inventory and delayed collections, and said working capital would remain elevated because TAT is buying inventory for the Honeywell distribution business and to protect against market shortages. On the balance sheet, he highlighted net cash of $43 million, a 0.2 debt-to-cash ratio, a 0.43 debt-to-last-4-quarter-EBITDA ratio, and a new $100 million, 5-year revolving credit facility to support M&A and growth.

Analysts focused heavily on supply-chain normalization, especially the APU and landing gear businesses, asking how many units had been stuck, what the quarter’s results implied, and when conditions might fully normalize. Management said the Q1 APU bottleneck has largely cleared, but lead times remain extended across the industry and OEM-dependent parts are still difficult; for landing gear, they said lead times can exceed 12 months and visibility is limited. Questions also centered on Honeywell and M&A, with management saying the Honeywell deal adds distribution capability and long-term visibility, while M&A targets will be pursued with discipline, typically at lower multiples than TAT trades for and with limited leverage. Management also clarified that Q2 backlog conversion included some catch-up from Q1 and should not be treated as a new baseline.