Second Quarter Fiscal Year 2026
Filed Aug 6, 2026Karman Space & Defense Reports Second Quarter Fiscal Year 2026 Financial Results
Record quarterly revenue, net income and Adjusted EBITDA rose sharply year over year, all reported end markets grew, backlog reached $1.3 billion, and the Company raised its full-year revenue and Adjusted EBITDA outlook.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Three Months Ended June 30, 2026 RevenueGAAP | $182.1M | – | up 58.2% |
| Six Months Ended June 30, 2026 RevenueGAAP | $333.3M | – | up 54.9% |
| Three Months Ended June 30, 2026 Cost of goods soldGAAP | 103.8M | – | – |
| Six Months Ended June 30, 2026 Cost of goods soldGAAP | 191.2M | – | – |
| Three Months Ended June 30, 2026 Gross profitGAAP | 78.23M | – | – |
| Six Months Ended June 30, 2026 Gross profitGAAP | 142.1M | – | – |
| Three Months Ended June 30, 2026 General and administrative expensesGAAP | 31.34M | – | – |
| Six Months Ended June 30, 2026 General and administrative expensesGAAP | 59.98M | – | – |
| Three Months Ended June 30, 2026 Depreciation and amortization expenseGAAP | 12.07M | – | – |
| Six Months Ended June 30, 2026 Depreciation and amortization expenseGAAP | 25.84M | – | – |
| Three Months Ended June 30, 2026 Operating expensesGAAP | 43.41M | – | – |
| Six Months Ended June 30, 2026 Operating expensesGAAP | 85.82M | – | – |
| Three Months Ended June 30, 2026 Net operating incomeGAAP | 34.83M | – | – |
| Six Months Ended June 30, 2026 Net operating incomeGAAP | 56.28M | – | – |
| Three Months Ended June 30, 2026 Interest expense, netGAAP | −15.28M | – | – |
| Six Months Ended June 30, 2026 Interest expense, netGAAP | −27.93M | – | – |
| Three Months Ended June 30, 2026 Income before provision for income taxesGAAP | 19.27M | – | – |
| Six Months Ended June 30, 2026 Income before provision for income taxesGAAP | 27.90M | – | – |
| Three Months Ended June 30, 2026 Provision for income taxesGAAP | −5.23M | – | – |
| Six Months Ended June 30, 2026 Provision for income taxesGAAP | −6.07M | – | – |
| Three Months Ended June 30, 2026 Net incomeGAAP | $14.03M | – | up 106.1% |
| Six Months Ended June 30, 2026 Net incomeGAAP | $21.83M | – | – |
| Three Months Ended June 30, 2026 Net income marginGAAP | 7.7 % | – | – |
| Six Months Ended June 30, 2026 Net income marginGAAP | 6.5 % | – | – |
| Three Months Ended June 30, 2026 Net income per common share, basicGAAP | $ 0.11 | – | – |
| Six Months Ended June 30, 2026 Net income per common share, basicGAAP | $ 0.16 | – | – |
| Three Months Ended June 30, 2026 Net income per common share, dilutedGAAP | $ 0.11 | – | – |
| Six Months Ended June 30, 2026 Net income per common share, dilutedGAAP | $ 0.16 | – | – |
| Three Months Ended June 30, 2026 Adjusted EBITDAnon-GAAP | $54.58M | – | a 54.7% year over year increase |
| Six Months Ended June 30, 2026 Adjusted EBITDAnon-GAAP | $99.37M | – | – |
| Three Months Ended June 30, 2026 Adjusted EBITDA marginnon-GAAP | 30.0 % | – | – |
| Six Months Ended June 30, 2026 Adjusted EBITDA marginnon-GAAP | 29.8 % | – | – |
| Three Months Ended June 30, 2026 Adjusted EPSnon-GAAP | $ 0.14 | – | – |
| Six Months Ended June 30, 2026 Adjusted EPSnon-GAAP | $ 0.25 | – | – |
| Backlog as of June 30, 2026other | $1.3B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Three Months Ended June 30, 2026 Hypersonics and Strategic Missile DefenseGrowth in key interceptor program production and increased production associated with a new surface-to-surface missile system. | $43.42M | – | up 24.2% |
| Three Months Ended June 30, 2026 Space and LaunchContent supporting both legacy and emerging launch providers, partially offset by customer order timing associated with shifting launch schedules. | 42.07M | – | up 6.3% |
| Three Months Ended June 30, 2026 Tactical Missiles and Integrated Defense SystemsStrength in core production programs, including unmanned aircraft systems and counter-UAS, and emerging programs transitioning to production. | 63.01M | – | up 55.4% |
| Three Months Ended June 30, 2026 Maritime Defense SystemsLegacy and next generation submarine programs. Revenue was previously included within other end markets. | 33.56M | – | * |
| Six Months Ended June 30, 2026 Hypersonics and Strategic Missile DefenseGrowth in key interceptor program production and increased production associated with a new surface-to-surface missile system. | $79.11M | – | up 21.7% |
| Six Months Ended June 30, 2026 Space and LaunchContent supporting both legacy and emerging launch providers, partially offset by customer order timing associated with shifting launch schedules. | 85.93M | – | up 17.0% |
| Six Months Ended June 30, 2026 Tactical Missiles and Integrated Defense SystemsStrength in core production programs, including unmanned aircraft systems and counter-UAS, and emerging programs transitioning to production. | 108.3M | – | up 41.1% |
| Six Months Ended June 30, 2026 Maritime Defense SystemsRevenue was previously included within other end markets. | 59.97M | – | * |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Full Year 2026 outlook
- Revenue$730 million to $745 million
- NoteNon-GAAP Adjusted EBITDA: $215.0 million to $222.5 million
- NoteExcluding the impact of any future acquisitions.
What drove it
- Total revenue growth reflected growth across all end-markets and the Company's diversified portfolio of more than 150 customers and programs.
- Quarterly bookings totaled nearly $500 million across all end markets, including a large, multi-year contract with a space and launch customer.
- Backlog was $1.3 billion as of June 30, 2026, up 65% compared to the end of fiscal year 2025.
- The Company is actively negotiating three additional long-term defense agreements with a combined potential value of more than $1 billion.
- The Company agreed to acquire Walker Precision Engineering for approximately $94 million, expanding its presence into the European defense market.
Concerns
- Adjusted EBITDA margin was 30.0 % in the quarter versus 30.7 % in the prior-year quarter.
- Space and Launch growth was partially offset by customer order timing associated with shifting launch schedules.
- Interest expense, net was (15,284) (in thousands) in the three months ended June 30, 2026.
- The full-year outlook excludes the impact of any future acquisitions.
- Management identified risks related to acquisition integration, contract retention, government spending timing and amount, demand, competition, and regulation.
What to watch
- Conversion of the $1.3 billion backlog into fiscal year 2026 revenue and Adjusted EBITDA.
- Progress on the large, long-term space and launch agreement and the three additional defense agreements under negotiation.
- Capacity scaling to meet existing program requirements and wins of alternative supplier positions on new programs and content areas.
- Completion and integration of the Walker Precision Engineering acquisition.
- Margin performance as volume, contract mix, general and administrative expenses, investment levels, and contract-estimate adjustments evolve.
Balance sheet and cash flow
- Cash and cash equivalents as of June 30, 2026: $ 51,741 (in thousands); December 31, 2025: $ 33,959 (in thousands).
- Current portion of term note as of June 30, 2026: $ 5,610 (in thousands); December 31, 2025: $ 3,836 (in thousands).
- Term note, net of current, as of June 30, 2026: $ 751,327 (in thousands); December 31, 2025: $ 495,312 (in thousands).
- Finance lease liabilities, net of current, as of June 30, 2026: $ 97,130 (in thousands); December 31, 2025: $ 76,995 (in thousands).
- Total liabilities as of June 30, 2026: 1,022,880 (in thousands); December 31, 2025: 721,405 (in thousands).
- The Company completed a debt repricing expected to reduce annual interest expense by approximately $4 million.
Analysis
Karman reported record second-quarter revenue of $ 182,063 (in thousands), up 58.2% year over year, with organic growth of 24.4%. Net income more than doubled to $ 14,032 (in thousands), up 106.1%, while diluted EPS was $ 0.11 versus $ 0.05. First-half revenue was $ 333,273 (in thousands), up 54.9%, and first-half net income was $ 21,826 (in thousands) versus $ 2,009 (in thousands).
Growth was broad based across the reported end markets. Tactical Missiles and Integrated Defense Systems was the largest quarterly revenue contributor at 63,012 (in thousands), up 55.4%, driven by core production programs and emerging programs transitioning to production. Hypersonics and Strategic Missile Defense rose 24.2%, while Space and Launch increased 6.3% despite customer order timing associated with shifting launch schedules. Maritime Defense Systems contributed 33,562 (in thousands) of quarterly revenue, with revenue previously included within other end markets.
Profitability expanded in absolute dollars, with gross profit of 78,234 (in thousands) and net operating income of 34,829 (in thousands). Adjusted EBITDA increased 54.7% to $ 54,580 (in thousands), although Adjusted EBITDA margin was 30.0 % compared with 30.7 % a year earlier. Interest expense, net was (15,284) (in thousands). The Company stated that its completed debt repricing is expected to reduce annual interest expense by approximately $4 million.
Demand visibility strengthened through a record $1.3 billion backlog, up 65% from the end of fiscal year 2025, and quarterly bookings of nearly $500 million. The Company raised its full-year outlook to $730 million to $745 million in revenue and $215.0 million to $222.5 million in non-GAAP Adjusted EBITDA, excluding future acquisitions. Karman also agreed to acquire Walker Precision Engineering for approximately $94 million, adding European defense-market presence while making execution and integration relevant areas to monitor.
Management, verbatim
Our team produced another quarter of record performance, generating revenue of $182 million driven by year over year organic growth of 24.4 percent and total growth of 58 percent, and adjusted EBITDA of $55 million, an increase of 55 percent.
Jon Rambeau, chief executive officer of Karman Space & Defense
Our record $1.3 billion backlog provides exceptionally strong visibility in to our fiscal year 2026 outlook and positions us to achieve this year’s goals while building even stronger momentum for 2027 and beyond.
Jon Rambeau, chief executive officer of Karman Space & Defense
We are scaling capacity to meet existing program requirements and we are simultaneously going on offense - winning alternative supplier positions on new programs and in new content areas. We believe Karman remains well positioned to create long-term shareholder value in this unique and accelerating demand environment.
Jon Rambeau, chief executive officer of Karman Space & Defense
Not in the filing
stated, not guessed- Prior-quarter comparisons were not reported for the income-statement metrics or segment revenue.
- GAAP gross margin was not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Share repurchases were not reported.
- Dividend declarations or payments were not reported.
- Prior outlook was not provided, so comparison of actual results with prior guidance is unavailable.
- A numerical prior-year comparison for Maritime Defense Systems was not reported because its revenue was previously included within other end markets.
- Forward guidance for gross margin, operating expenses, and tax rate was not reported.
AlphAI 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.