Ducommun (DCO) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 revenue of $209 million, up 9% year-over-year, driven by strong commercial aerospace (up 18%) and defense demand, marking the fourth consecutive quarter above $200 million and 20th consecutive quarter of year-over-year growth.

• Gross margin expanded to 26.9%, a 70 bps increase year-over-year, with adjusted EBITDA margin reaching 16.9%, progressing toward the Vision 2027 goal of 18%.

• Net income surged to $9.9 million (4.7% of revenue), with adjusted EPS at $0.75, both up sharply year-over-year, driven by higher operating income and improved margins.

• Bookings remained strong with a last twelve months (LTM) book-to-bill ratio of 1.1x and remaining performance obligations (RPO) at $1.07 billion.

• Management remains highly confident in the Vision 2027 strategy, emphasizing engineered product content, value-added pricing, and long-term missile program agreements.

Financial highlights

• Revenue: $209 million, up 8.6% year-over-year; gross profit: $56.2 million (26.9% margin); operating income: $15.7 million (7.5% margin); adjusted EBITDA: $35.4 million (16.9% margin).

• Adjusted operating income grew 135% year-over-year to $18 million; GAAP operating income up 216% to $16 million.

• Net income: $9.9 million ($0.64 per diluted share), up from $1.4 million ($0.09); adjusted net income: $11.7 million ($0.75 per share), up from $3.5 million ($0.23).

• Cash flow from operations: $11.2 million, up from $0.8 million.

• SG&A expenses decreased by $4.5 million, mainly due to lower stock-based compensation.

Outlook and guidance

• Reiterates mid to high single-digit revenue growth for full-year 2026, with quarterly revenues projected to fluctuate depending on destocking levels.

• Expects continued strength in defense and recovery in commercial aerospace, with destocking headwinds expected to dissipate by year-end.

• Missile program production expected to accelerate in late 2026 and 2027, driving significant future growth.

• Confident in achieving Vision 2027 targets: $950M–$1,000M revenue and 18% adjusted EBITDA margin.

• 70% of the $1.07 billion RPO expected to be recognized as revenue in the next 12 months.