Ducommun (DCO) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of $224.5 million, up 12% year-over-year, with double-digit growth in both commercial aerospace (16%) and military/space (7%) segments, and net income of $20.4 million ($1.31/diluted share), marking the fifth consecutive quarter above $200 million and 21st consecutive quarter of year-over-year growth.

• Gross margin reached a record 28%, up 160 basis points year-over-year, and adjusted EBITDA was $38.4 million (17.1% of revenue), both on track for Vision 2027 goals.

• Bookings reached $310 million, resulting in a book-to-bill ratio of 1.4x for the quarter and 1.3x for the last twelve months, with remaining performance obligations at $1.16 billion.

• Missile business grew 68% in Q2, now 35% of LTM defense revenue and over 20% of total revenue, with defense growth expected to accelerate in 2027 and beyond due to long-term missile framework agreements.

• Completed a restatement of prior financials due to errors in stock-based compensation expense recognition, resulting in compensation clawbacks and revised SG&A expenses.

Financial highlights

• Q2 2026 revenue: $224.5 million, up from $200.8 million in Q2 2025 (12% growth); gross profit: $62.9 million (28% margin); operating income: $28.3 million (12.6% margin); adjusted EBITDA: $38.4 million (17.1% margin); net income: $20.4 million ($1.31/diluted share); adjusted net income: $18.4 million ($1.18/share).

• Net cash from operations was $33.5 million in Q2; free cash flow YTD: $38.3 million; net cash provided by operating activities for the first six months of 2026 was $44.8 million.

• Interest expense for Q2 2026 was $3.5 million, with a weighted-average interest rate on debt of 5.56% as of July 4, 2026.

• Debt-to-equity ratio: $277.5 million total debt vs. $690.4 million equity as of July 4, 2026; $369.8 million unused borrowing capacity under the revolving credit facility.

• Capital expenditures totaled $6.3 million in Q2 2026; projected at $20–24 million for 2026.

Outlook and guidance

• Reiterated full-year guidance of mid to high single-digit revenue growth, with double-digit growth in 1H 2026 expected to moderate to low-to-mid single digit growth in 2H 2026.

• 70% of the $1.16 billion in remaining performance obligations as of July 4, 2026 are expected to be recognized as revenue in the next 12 months.

• Destocking headwinds in commercial aerospace expected to ease by end of 2026, with missile and defense business poised for further growth as new framework agreements are finalized.

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

• Management expects the OBBBA tax legislation to reduce cash tax liability for 2026.