Arxis (ARXS) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 results with revenue of $459 million, up 21% year-over-year, and Adjusted EBITDA of $175 million, up 31% year-over-year, with net income of $53 million versus a loss in the prior year.

• Growth was broad-based across Defense & Space, Commercial Aerospace, and Industrial Technology, each posting double-digit revenue increases.

• 17% organic growth and 4% from acquisitions (notably Micro-Tronics) contributed to performance.

• Completed IPO in April 2026, raising $1.22 billion in net proceeds, supporting debt repayment and strategic acquisitions.

• Robust M&A pipeline and strengthened post-IPO balance sheet support future growth.

Financial highlights

• Adjusted EBITDA margin expanded by 290 basis points year-over-year to 38.2%.

• Free cash flow for Q1 was $25 million, more than doubling year-over-year.

• Net income improved to $53 million from a $4 million loss; net income margin rose to 11.6%.

• Net leverage declined from 4.2x to 2x TTM EBITDA post-IPO, with $1.1 billion in available liquidity.

• Debt reduction expected to lower annual cash interest expense by over $70 million versus 2025.

Outlook and guidance

• FY2026 revenue guidance: $1.86–$1.88 billion, with Adjusted EBITDA of $720–$730 million and margin expected at 38.8%.

• Midpoint implies 18% revenue growth (15% organic) and 27% EBITDA growth year-over-year.

• CapEx projected at $63 million (3% of revenue); interest expense to decline to ~$135 million; effective tax rate ~25%.

• 90% of FY2026 revenue is already booked in backlog, providing high visibility and low risk to guidance.

• Favorable demand outlook across all key end markets, supported by robust backlogs and customer investment cycles.