Applied Aerospace & Defense (AADX) Q3 2026 earnings summary

Executive summary

• Q3 revenue reached a record $182.1 million, up 48.6% YoY; revenue excluding 2026 acquisitions grew 20.3%.

• Adjusted EBITDA rose 37.4% to $39.7 million; backlog was $1.26 billion and Q3 bookings were $254 million, a 1.4x book-to-bill ratio.

• Growth spanned all three end markets, while ramp costs, supplier constraints and approval delays weighed on margins and 2026 expectations.

Financial highlights

• Q3 revenue was $182.1 million versus $122.5 million; gross profit was $42.7 million versus $34.3 million, and operating income was $16.4 million versus $15.7 million.

• Net income was $30.6 million versus $2.7 million, including a $24.2 million tax benefit; diluted EPS was $0.18 versus $0.03.

• Adjusted EBITDA was $39.7 million versus $28.9 million; adjusted EBITDA margin was 21.8% versus 23.6%.

• Nine-month revenue was $483.7 million versus $347.0 million; net loss was $138.5 million versus $9.2 million, substantially affected by IPO-related compensation and transaction costs.

• Nine-month Adjusted EBITDA was $102.6 million versus $80.5 million; gross margin was 23.5% versus 28.0% for Q3 and nine months.

Outlook and guidance

• FY 2026 revenue guidance is $660 million–$670 million and Adjusted EBITDA guidance is $137 million–$142 million.

• Supplier and approval delays are expected to shift $15 million–$20 million of rotorcraft aftermarket revenue from Q4 into H1 2027; orders are funded and the shift is viewed as timing.

• Q4 gross margin is expected near 26%, ~200 bps below prior expectations; margins are expected to improve through H1 2027 and return to the high-20s in H2 2027.

• Remaining performance obligations were $1.041 billion, with 17% expected to be recognized through year-end 2026, 58% in 2027 and 25% thereafter.

• FY 2026 tax benefit is expected at $5 million–$10 million; Q4 free cash flow is expected to turn positive as CapEx moderates and contract assets burn down.