Graham (GHM) TD Cowen 46th Annual Aerospace & Defense Conference 2025 summary

Strategic transformation and leadership

• Diversified from energy to defense and space, doubling revenue since 2021 and reducing reliance on cyclical energy markets.

• Leadership transition planned for June, with Matt Malone becoming CEO and Dan Thoren moving to executive chairman focused on business development.

• Five-year plan targets $200M+ revenue and low to mid-teen EBITDA by 2027, with steady margin improvement and operational execution.

• Executive development and succession planning have been prioritized to strengthen the management team for long-term growth.

Market focus and innovation

• Defense sector now represents the majority of backlog, with sole-source contracts and long-term visibility, including $1B in opportunity.

• Investments in technology and automation, such as automated welding and advanced analytics, drive efficiency and margin expansion.

• Space business leverages cryogenic and propulsion expertise, focusing on mission-critical MEO/GEO markets and astronaut life support systems.

• New energy initiatives include next-gen steam ejector nozzles and small modular nuclear components, targeting both legacy and advanced energy markets.

Financial performance and outlook

• Q3 revenue grew 7% YoY to $47M, with defense up 11% and aftermarket orders up 50%, supporting higher gross margins.

• Adjusted EBITDA margin reached 8.6%, with a 36% YoY increase, and is expected to rise as acquisition-related earnouts expire.

• Debt-free balance sheet, strong cash flows, and $50M credit line provide ample capacity for organic and inorganic growth.

• FY2025 guidance: $200M–$210M revenue, $18M–$21M EBITDA; FY2027 targets: $240M–$250M revenue, $35M EBITDA, 8–10% organic growth.