The quarter came in modestly ahead of published expectations. Revenue was $182.1 million versus a published consensus near $180 million, adjusted EBITDA was $54.6 million versus roughly $51.6 million expected, and adjusted EPS was $0.14 versus about $0.13 expected.
| Metric | Q2 FY2026 | Q2 FY2025 / expectation | Change |
|---|---|---|---|
| Revenue | $182.1M | $115.1M / ~$180M expected | +58.2% YoY |
| GAAP net income | $14.0M | $6.8M | +106.1% YoY |
| GAAP diluted EPS | $0.11 | $0.05 | +$0.06 YoY |
| Adjusted EBITDA | $54.6M | $35.3M / ~$51.6M expected | +54.7% YoY |
| Adjusted EBITDA margin | 30.0% | 30.7% | Down 70 bps |
| Adjusted EPS | $0.14 | $0.10 / ~$0.13 expected | +$0.04 YoY |
| Backlog | $1.3B | $0.8B at FY2025-end | +65% |
(Financial Highlights; Second Quarter Fiscal Year 2026 Financial Results; Reconciliation of GAAP to Non-GAAP Financial Measures)
The more important surprise was the raised full-year outlook. Management lifted 2026 revenue guidance to $730 million–$745 million from the prior $720 million–$735 million range, and adjusted EBITDA guidance to $215.0 million–$222.5 million from $208.5 million–$219.5 million. That raises the midpoint by $10 million for revenue and $4.75 million for EBITDA, indicating the quarter's strength was not treated as merely timing-related. (Business Outlook for the Full Year 2026)
Demand visibility strengthened materially, but profitability did not expand with it. Nearly $500 million of quarterly bookings and a $1.3 billion backlog support the higher outlook, with growth broad-based across missile defense, tactical systems, space, and maritime defense. However, adjusted EBITDA margin slipped to 30.0% from 30.7%, so the beat was driven primarily by scale rather than improving operating leverage. Tactical Missiles and Integrated Defense Systems grew 55.4% year over year, while Space and Launch grew only 6.3%, partly reflecting launch-schedule timing. (Backlog; Second Quarter Fiscal Year 2026 Financial Results; Reconciliation of GAAP to Non-GAAP Financial Measures)
The filing adds strategic upside but also more execution and leverage exposure. Karman agreed to acquire Walker Precision Engineering for approximately $94 million, completed a debt repricing expected to reduce annual interest expense by about $4 million, and ended the quarter with $751.3 million of term debt plus $102.1 million of finance-lease liabilities. The interest savings are helpful, but the acquisition and balance-sheet burden mean integration and debt reduction remain part of the investment case rather than solved issues. (Second Quarter Fiscal Year 2026 and Subsequent Highlights; Condensed Consolidated Balance Sheets)
Net read: a genuine but not dramatic positive reset. The earnings beat was narrow, while the raised outlook, unusually strong bookings, and backlog growth provide the more durable upside relative to expectations. The offset is slightly lower margin and continued acquisition-related complexity, keeping this from being a clean, broad-based beat.
Read the original 8-K on SEC EDGAR ↗