Elmet Group (ELMT) Q1 2026 earnings summary

Executive summary

• Revenue for Q1 2026 grew 20.7% year-over-year to $56.0 million, driven by the Critical Materials Components (CMC) division and strong demand in aerospace, defense, and government markets, with favorable tungsten pricing.

• Adjusted EBITDA more than doubled to $9.2 million (16.4% margin), and adjusted net income rose to $4.7 million ($0.24/share), up from $1.9 million ($0.10/share) in Q1 2025.

• Completed an IPO in April 2026, raising between $125.5 million and $128.2 million in net proceeds, consolidating common stock, and strengthening the balance sheet for debt reduction and future investments.

• Backlog reached a record $113.3 million, up 34.1%–52% year-over-year, with strong ADG market demand and 95% of backlog scheduled for delivery within the year.

• Net loss from continuing operations was $0.3 million, primarily due to a one-time $3.8 million tax expense from a corporate reorganization.

Financial highlights

• Gross profit increased 37.5%–37.6% to $11.8 million, with gross margin improving to 21.2% from 18.6% year-over-year.

• Operating expenses rose 73.6% to $10 million, including IPO and restructuring costs, higher G&A, and stock-based compensation.

• CMC division revenue grew 23.2% to $48.2 million, with gross margin rising to 20.3%; EMP division revenue increased 7.2% to $7.8 million, but gross margin declined due to product mix.

• Adjusted EBITDA margin for Q1 2026 was 16.4% (vs. 9.6%–9.7% in Q1 2025).

• Net debt was $48.5 million as of April 3, 2026; cash and equivalents at quarter-end ranged from $1.8 million to $2.6 million.

Outlook and guidance

• Management expects continued margin expansion through manufacturing improvements, higher-margin product mix, and economies of scale.

• EMP division anticipated to see higher relative growth in Q2 and subsequent quarters.

• Backlog and strong order pipeline position the company for a solid year, with robust demand in defense, aerospace, and energy markets.

• Management targets gross margins approaching 30% within five years, up from the 2025 baseline.

• Ongoing volatility in raw material costs and supply chain disruptions, especially for tungsten and molybdenum, are expected.