Second Quarter 2026
Filed Aug 6, 2026Ducommun Incorporated Reports Second Quarter 2026 Results Record Revenue and Gross Margin; Remaining Performance Obligations at All-Time High
Record net revenue and gross margin, double-digit revenue growth, higher profitability and operating cash flow, and an all-time-high $1.2 billion RPO supported a strong reported quarter.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net revenueGAAP | $224.5 million | – | 12% |
| Gross profitGAAP | $62.9 million | – | $9.9 million |
| Gross marginGAAP | 28.0% of revenue | – | 160 bps |
| Operating incomeGAAP | $28.3 million | – | $10.6 million |
| Operating marginGAAP | 12.6% of revenue | – | – |
| Adjusted operating incomenon-GAAP | $26.7 million | – | – |
| Adjusted operating marginnon-GAAP | 11.9% of revenue | – | – |
| Net incomeGAAP | $20.4 million | – | 60% |
| Net income marginGAAP | 9.1% of revenue | – | 270 bps |
| Diluted earnings per shareGAAP | $1.31 per diluted share | – | – |
| Adjusted net incomenon-GAAP | $18.4 million | – | 35% |
| Adjusted diluted earnings per sharenon-GAAP | $1.18 per diluted share | – | – |
| Adjusted EBITDAnon-GAAP | $38.4 million | – | 21% |
| Adjusted EBITDA marginnon-GAAP | 17.1% of revenue | – | 130 bps |
| Interest expenseGAAP | $3.5 million | – | – |
| Net cash provided by operationsGAAP | $33.5 million | – | – |
| Remaining performance obligationsother | $1.2 billion | – | – |
| Bookingsother | $309.7 million | – | – |
| Book-to-billother | 1.4x | – | – |
| Corporate General and Administrative expensesGAAP | $9.9 million | – | – |
| Corporate General and Administrative expenses as a percentage of total Company revenueGAAP | 4.4% of total Company revenue | – | – |
| Electronic Systems segment operating incomeGAAP | $25.5 million | – | $5.0 million |
| Electronic Systems segment operating marginGAAP | 19.4% of revenue | – | – |
| Electronic Systems adjusted operating incomenon-GAAP | $25.9 million | – | – |
| Electronic Systems adjusted operating marginnon-GAAP | 19.7% of revenue | – | – |
| Structural Systems segment operating incomeGAAP | $12.8 million | – | $3.5 million |
| Structural Systems segment operating marginGAAP | 13.7% of revenue | – | – |
| Structural Systems adjusted operating incomenon-GAAP | $14.6 million | – | – |
| Structural Systems adjusted operating marginnon-GAAP | 15.7% of revenue | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Electronic Systems$10.0 million higher revenue within military and space end-use markets due to higher rates on several missiles and fixed-wing aircraft platforms, partially offset by lower rates on a classified program, radar, and naval platforms; $7.9 million higher revenue in commercial aerospace end-use markets due to higher rates on large aircraft and other commercial aerospace platforms; and $3.8 million higher industrial end-use revenue mainly due timing of orders. | $131.4 million | – | – |
| Structural Systems$4.1 million higher revenue within commercial aerospace end-use markets due to higher rates on large aircraft platforms, partially offset by $2.1 million lower revenue within military and space end-use markets due to lower rates on selected military rotary-wing aircraft platforms, partially offset by higher rates on selected missiles platforms. | $93.1 million | – | – |
VISION 2027 outlook
- Note18% Adjusted EBITDA
What drove it
- Net revenue increased primarily from $12.0 million higher commercial aerospace revenue due to higher rates on large aircraft platforms.
- Military and space revenue was $7.9 million higher due to higher rates on several missiles and fixed-wing aircraft platforms, partially offset by lower rates on a classified program, selected radar, rotary-wing aircraft, and naval platforms.
- Industrial revenue increased $3.8 million mainly due to timing of orders.
- Gross margin improvement was primarily due to higher manufacturing volume and savings from the facility consolidation program, partially offset by unfavorable product mix.
- Operating-income growth reflected higher gross profit and a compensation clawback of $3.9 million included as a reduction in selling, general and administrative expenses.
- Operating cash flow benefited from higher net income, higher accounts payable, and higher contract liabilities, partially offset by higher accounts receivable and higher inventories.
Concerns
- The Company expects some continued destocking headwinds in the remaining quarters of 2026, although it stated that those pressures have begun to ease gradually.
- Unfavorable product mix partially offset gross-margin improvement and segment operating-income gains.
- Military and space revenue was partially offset by lower rates on a classified program, selected radar, rotary-wing aircraft, and naval platforms.
- Structural Systems military and space revenue was affected by lower rates on selected military rotary-wing aircraft platforms.
- Interest expense increased primarily because of a higher outstanding debt balance.
- The compensation clawback of $3.9 million reduced SG&A expenses and contributed to operating-income growth. કંપની
What to watch
- The pace of commercial aerospace ramp activity, including single-aisle aircraft such as the Boeing 737 MAX and Airbus A320.
- Whether remaining 2026 destocking pressures continue to ease gradually.
- Revenue and order growth in the missile franchise, including PAC-3 and SM-6 missile platforms.
- Conversion of the all-time-high $1.2 billion RPO and $309.7 million quarterly bookings into revenue.
- Progress toward the VISION 2027 financial goal of 18% Adjusted EBITDA.
- Sustainability of margin expansion amid unfavorable product mix and facility-consolidation savings.
Balance sheet and cash flow
- Net cash provided by operations was $33.5 million compared to $22.4 million during the second quarter of 2025.
- Interest expense was $3.5 million compared to $3.0 million in the comparable period of 2025.
- The year-over-year increase in interest expense was primarily due to a higher outstanding debt balance, partially offset by lower interest rates.
Analysis
Ducommun reported a record second quarter, with net revenue of $224.5 million compared to $200.8 million for the second quarter of 2025. Growth was led by $12.0 million higher commercial aerospace revenue from higher rates on large aircraft platforms and $7.9 million higher military and space revenue from several missile and fixed-wing aircraft platforms. Industrial revenue increased $3.8 million mainly due to timing of orders. The Company reported bookings of $309.7 million, a 1.4x book-to-bill, and an all-time-high $1.2 billion of remaining performance obligations.
Profitability improved across the reported measures. Gross profit was $62.9 million and gross margin was a record 28.0% of revenue, compared to $53.0 million and 26.4% of revenue in the prior-year period. The Company attributed the margin improvement to higher manufacturing volume and savings from the facility consolidation program, partially offset by unfavorable product mix. Operating income was $28.3 million, compared to $17.7 million, while adjusted EBITDA was $38.4 million, or 17.1% of revenue, compared to $31.6 million, or 15.8% of revenue.
Net income rose to $20.4 million, or $1.31 per diluted share, from $12.8 million, or $0.84 per diluted share. Reported operating-income growth included a $3.9 million compensation clawback that reduced SG&A expenses. CG&A expenses were $9.9 million, compared to $12.0 million, with the clawback partly offset by higher compensation and benefits costs and higher professional services fees. Interest expense increased to $3.5 million from $3.0 million, primarily due to a higher outstanding debt balance, partially offset by lower interest rates.
Electronic Systems generated $131.4 million of revenue, with operating income of $25.5 million and adjusted operating income of $25.9 million. Structural Systems generated $93.1 million of revenue, with operating income of $12.8 million and adjusted operating income of $14.6 million. Both segments cited higher manufacturing volume as a contributor to operating-income growth, while unfavorable product mix was an offset.
Cash generation improved, as net cash provided by operations was $33.5 million compared to $22.4 million during the second quarter of 2025. The Company cited higher net income, accounts payable, and contract liabilities, partially offset by higher accounts receivable and inventories. Looking ahead, management expects continued destocking headwinds in the remaining quarters of 2026, though it stated that the pressures have begun to ease gradually. The stated VISION 2027 financial goal is 18% Adjusted EBITDA.
Management, verbatim
An outstanding second quarter and first half of 2026 for Ducommun. I could not be happier. Our team continued to make great progress towards our VISION 2027 goals with another record for revenue and gross margin during the second quarter. Net revenue grew by double digits at 12%, led by the continued ramp in commercial aerospace, along with solid gains in our defense business.
Stephen G. Oswald, chairman, president and chief executive officer
Margin expansion was very strong in the quarter expanding 160 bps year-over-year to an all-time record 28.0%. Adjusted EBITDA expanded by 130 bps year-over-year from 15.8% to 17.1% and DCO is in excellent shape working towards the VISION 2027 financial goal of 18% Adjusted EBITDA.
Stephen G. Oswald, chairman, president and chief executive officer
Halfway through year four, our strong performance across revenue, gross margin, and Adjusted EBITDA margins along with our record level of Remaining Performance Obligations positions us well towards meeting our VISION 2027 targets. While we expect to see some continued destocking headwinds in the remaining quarters of 2026, we have begun to see those pressures ease gradually. Ducommun’s missile franchise also continues to gain strength both in revenue and orders, and we are well positioned to benefit from the expected major ramp-up in missile production.
Stephen G. Oswald, chairman, president and chief executive officer
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported revenue, profitability, segment revenue, cash flow, bookings, remaining performance obligations, and book-to-bill.
- Free cash flow.
- Cash balance.
- Debt balance.
- Capital-return activity, including share repurchases and dividends.
- A formal quantitative outlook for the remaining quarters of 2026, including revenue, gross margin, operating expenses, and tax rate.
- Prior-year amounts for adjusted net income and adjusted diluted earnings per share.
- Percentage year-over-year growth rates for Electronic Systems and Structural Systems revenue.
- Non-GAAP reconciliation details.
- Income tax expense and effective tax rate.
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.