Second Quarter 2026
Filed Aug 11, 2026Astronics Corporation Reports Record Operating Income on 27% Sales Growth for Second Quarter 2026
Record sales, operating income, bookings and backlog were accompanied by substantial year-over-year margin expansion, positive operating cash flow, lower long-term debt and raised 2026 revenue guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Sales, three months ended July 4, 2026GAAP | $259,957 | – | 27.0% |
| Gross profit, three months ended July 4, 2026GAAP | $86,897 | – | 64.5% |
| Gross margin, three months ended July 4, 2026GAAP | 33.4% | – | – |
| Income from operations, three months ended July 4, 2026GAAP | $40,467 | – | 750.5% |
| Operating margin, three months ended July 4, 2026GAAP | 15.6% | – | – |
| Net income, three months ended July 4, 2026GAAP | $35,060 | – | 2,568.2% |
| Net income margin, three months ended July 4, 2026GAAP | 13.5% | – | – |
| Diluted earnings per share, three months ended July 4, 2026GAAP | $0.75 per diluted share | – | – |
| Adjusted operating income, three months ended July 4, 2026non-GAAP | $43,226 | – | 136.4% |
| Adjusted operating margin, three months ended July 4, 2026non-GAAP | 16.6% | – | – |
| Adjusted net income, three months ended July 4, 2026non-GAAP | $32,623 | – | 137.4% |
| Adjusted EBITDA, three months ended July 4, 2026non-GAAP | $51,549 | – | 102.9% |
| Adjusted EBITDA margin, three months ended July 4, 2026non-GAAP | 19.8% | – | – |
| Sales, six months ended July 4, 2026GAAP | $490,576 | – | 19.5% |
| Gross profit, six months ended July 4, 2026GAAP | $162,030 | – | 42.5% |
| Gross margin, six months ended July 4, 2026GAAP | 33.0% | – | – |
| Income from operations, six months ended July 4, 2026GAAP | $67,697 | – | 278.3% |
| Operating margin, six months ended July 4, 2026GAAP | 13.8% | – | – |
| Net income, six months ended July 4, 2026GAAP | $60,600 | – | 458.9% |
| Net income margin, six months ended July 4, 2026GAAP | 12.4% | – | – |
| Adjusted operating income, six months ended July 4, 2026non-GAAP | $72,786 | – | 78.0% |
| Adjusted operating margin, six months ended July 4, 2026non-GAAP | 14.8% | – | – |
| Adjusted net income, six months ended July 4, 2026non-GAAP | $55,124 | – | 79.5% |
| Adjusted EBITDA, six months ended July 4, 2026non-GAAP | $89,450 | – | 59.3% |
| Adjusted EBITDA margin, six months ended July 4, 2026non-GAAP | 18.2% | – | – |
| Quarterly bookingsother | $306.2 million | – | – |
| Quarterly book-to-bill ratioother | 1.18:1 | – | – |
| Trailing twelve months bookingsother | $1.06 billion | – | – |
| Trailing twelve months book-to-bill ratioother | 1.13:1 | – | – |
| Backlog at quarter endother | $780.6 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| AerospaceSales growth was primarily related to increased demand for seat motion and inflight entertainment & connectivity products in Commercial Transport. The segment also included $5.9 million from the acquisition of BMA. | $237.3 million | – | 22.6% |
| Test SystemsSales were up $11.6 million from the comparator quarter. Prior-year sales were negatively impacted by a $6.4 million revision of estimated costs to complete certain long-term mass transit contracts. | $22.7 million | – | – |
2026 outlook
- Revenue$1.02 billion to $1.04 billion
- NoteThe Company expects to be free cash flow positive for the remainder of the year.
What drove it
- Consolidated sales growth was driven by continued Aerospace demand, primarily from Commercial Transport, and Test Systems sales growth.
- Gross profit growth and margin expansion were primarily attributable to higher volume, improved productivity, and a $2.0 million IEEPA tariff refund.
- Aerospace operating profit reflected higher volume, improving production efficiencies, a $2.0 million IEEPA tariff refund, a $4.6 million decrease in litigation-related expenses and legal reserve adjustments related to the UK patent dispute, and the absence of a $6.2 million prior-year simplification charge.
- Aerospace bookings were $243.1 million, with a 1.02:1 book-to-bill ratio. The finalized current engineering phase of the MV-75 FLRAA program generated a $27.4 million booking.
- Test Systems bookings were $63.1 million, including a $44.7 million U.S. Army order initiating full-rate production for the TS-4549/T Radio Test Sets Program. Its book-to-bill ratio was 2.78:1.
Concerns
- Test Systems profitability continues to be negatively affected by mix and under absorption of fixed costs at current volume levels.
- Approximately $4.1 million of current-quarter Test Systems revenue related to dedicated raw materials for the U.S. Army and U.S. Marine Corps Radio Test Set programs carried no margin. Margin on that revenue will be recognized through 2026 as production progresses further.
- Higher working-capital requirements, including higher inventory levels, offset higher cash earnings.
- Tax expense in the quarter of $2.8 million reflects benefits of a partial valuation allowance reversal and research and development costs expected to be expensed.
What to watch
- Execution on anticipated revenue growth in coming quarters, which is driving higher inventory levels.
- The expected ramp of the TS-4549/T Radio Test Sets Program. The first production order is expected to cover deliveries over the next 18 months, and the Company expects similar annual orders in each of the coming four years.
- Expected completion of the MV-75 FLRAA development program in mid-2027.
- The expected repayment of approximately $2.2 million, including interest, following the favorable United Kingdom Court of Appeal judgment, and the amount of potential legal-fee reimbursements, which cannot be estimated at this time.
- Free cash flow performance for the remainder of 2026 and elevated capital expenditures related to deferred spending, consolidation of operations and capacity improvement in a new Seattle facility.
Balance sheet and cash flow
- Cash provided by operations in the second quarter of 2026 was $30.1 million.
- Capital expenditures in the quarter were $5.7 million and $16.9 million year-to-date.
- Long-term debt decreased $24.1 million to $310.3 million at July 4, 2026, compared with the end of 2025.
- Available liquidity was $253.2 million at quarter-end, including $15.4 million in available cash and $237.8 million in availability on its revolver.
Analysis
Astronics reported a strong second quarter, with sales rising 27.0% to $259,957 and gross profit rising 64.5% to $86,897. Gross margin expanded to 33.4% from 25.8%, while income from operations increased to $40,467 from $4,758 and operating margin reached 15.6% from 2.3%. Net income was $35,060, or $0.75 per diluted share, compared with $1,314, or $0.03 per diluted share, in the prior-year period.
Aerospace remained the principal growth and profit driver. Segment sales reached $237.3 million, up 22.6%, led by Commercial Transport demand for seat motion and IFEC products, with $5.9 million contributed by BMA. Aerospace operating profit was $48.3 million, or 20.3% of sales. The reported operating improvement benefited from higher volume and productivity, the $2.0 million IEEPA tariff refund, lower litigation-related expenses and the absence of a prior-year simplification charge.
Test Systems sales were $22.7 million, up $11.6 million from the comparator quarter, and segment operating profit was $0.6 million compared with a $6.7 million operating loss. The comparison benefited from the prior-year revision of estimated costs to complete long-term mass transit contracts. Current profitability remains constrained by mix, fixed-cost under absorption and approximately $4.1 million of no-margin raw-material revenue for radio test-set programs, for which margin is expected to be recognized through 2026 as production progresses.
Demand indicators strengthened. Consolidated quarterly bookings were a record $306.2 million, producing a 1.18:1 book-to-bill ratio, while backlog reached a third consecutive quarterly record of $780.6 million. Test Systems recorded $63.1 million of bookings, including a $44.7 million U.S. Army production order, and Aerospace recorded $243.1 million of bookings, including a $27.4 million MV-75 FLRAA engineering-phase booking. These orders support management's expectation for momentum to build in the second half.
Cash provided by operations was $30.1 million despite higher working-capital requirements and inventory investment. Capital expenditures were $5.7 million in the quarter and $16.9 million year-to-date, reflecting deferred-spending catch-up, operational consolidation and Seattle capacity improvements. Long-term debt declined $24.1 million to $310.3 million, and liquidity was $253.2 million. The Company raised 2026 revenue guidance to $1.02 billion to $1.04 billion and expects to be free cash flow positive for the remainder of the year.
Management, verbatim
We had a very strong second quarter, with record sales, operating income, bookings and backlog. Our adjusted EBITDA margin of 19.8% was a multi-year high. We see continued strength across our range of markets and products, resulting in another step up in our forecasted 2026 revenue level. We expect momentum to build during the second half of the year. It is an exciting time for our Company.
Peter J. Gundermann, Chairman, President and Chief Executive Officer
Our Aerospace business delivered excellent results for the second quarter, achieving record quarterly sales and a 20.3% operating margin. A highlight in the quarter was the finalization of the development contract for the MV-75 FLRAA program, which resulted in a net booking of $27 million. We continue to perform well on that program with expected completion of the development program occurring in mid-2027. Overall, demand for our products remains robust, the team is executing well and we believe we are well positioned for further growth.
Peter J. Gundermann, Chairman, President and Chief Executive Officer
The big news in the second quarter for our Test business was the first production order for the U.S. Army’s TS-4549/T Radio Test program. Its contribution to our second quarter results was marginal, but the program’s impact will be significant as it ramps up in the coming quarters. This first production order is expected to be followed by similar annual orders in each of the coming four years.
Peter J. Gundermann, Chairman, President and Chief Executive Officer
Not in the filing
stated, not guessed- Previous-quarter comparisons for reported financial metrics
- Non-GAAP adjusted diluted earnings per share
- Share repurchases
- Dividends
- Free cash flow amount
- Forward gross-margin guidance
- Forward operating-expense guidance
- Forward tax-rate guidance
- Prior-quarter outlook for comparison
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.