Graham (GHM) Q3 2026 earnings summary

Executive summary

• Revenue grew 21% year-over-year to $56.7 million in Q3 FY26, driven by strong performance across Defense, Energy & Process, and Space markets, with Defense sales up 31% and Energy & Process up 13%.

• Net income for Q3 FY26 was $2.8 million ($0.25 per diluted share), up 79% year-over-year; adjusted net income was $3.5 million ($0.31 per share).

• Adjusted EBITDA increased 50% to $6.0 million, with a margin of 10.7%, reflecting disciplined execution and productivity initiatives.

• Orders reached $71.7 million, with a book-to-bill ratio of 1.3x and record backlog of $515.6 million, up 34% year-over-year.

• Completed acquisitions of XDot Bearing Technologies and FlackTek, expanding technology platforms and market reach.

Financial highlights

• Gross profit increased 15% to $13.5 million; gross margin was 23.8%, down 100 bps year-over-year due to sales mix and absence of prior year grant benefit.

• Net income margin for Q3 FY26 was 5.0%; adjusted EBITDA margin was 10.7%.

• Adjusted net income per diluted share was $0.31, compared to $0.18 in the prior year quarter.

• Cash and cash equivalents at quarter end were $22.3 million; operating cash flow was $4.8 million.

• SG&A as a percentage of sales declined 200 bps to 18.6% despite higher absolute spend.

Outlook and guidance

• Full-year FY26 net sales guidance raised to $233–$239 million (from $225–$235 million); adjusted EBITDA guidance increased to $24–$28 million.

• Gross margin expected at 24.0%–25.0% of sales; effective tax rate expected at 16%–18%.

• Capital expenditures for FY26 projected at $15–$18 million, focused on facility and equipment upgrades.

• At midpoint, guidance implies 12% revenue and 16% adjusted EBITDA growth.

• Long-term targets reaffirmed: 8%–10% organic revenue growth and low to mid-teen adjusted EBITDA margins by FY27.