Ralliant (RAL) Baird 2026 Global Industrial Conference summary

Business and market position

• Instruments, sensors and safety systems serve mission-critical utility, aerospace, defense, electronics and industrial manufacturing applications.

• Sensors provide actionable monitoring data; safety technologies prioritize timing and accuracy, while precision instruments measure, monitor and analyze system performance.

• Portfolio exposure spans electrification, power-grid modernization, datacenter infrastructure, physical AI, and defense surge, modernization and replenishment.

Strategy and outlook

• Priorities include capturing electrification and defense investment cycles, deepening customer loyalty, and applying RBS to improve financial performance; growth areas also include AI-related electronics hardware.

• 2026 guidance includes 13%-14% revenue growth, 350 bps adjusted EBITDA margin expansion and 50% YoY EPS growth; a separate outlook cites 47%-50% adjusted EPS growth.

• Backlog and business momentum support continued revenue growth into 2027, with adjusted EBITDA growth targeted to exceed revenue growth.

• A unified business model, technical sales and applications teams, facility expansion, automation and AI-enabled engineering support profitable growth.

Defense and space

• Defense and space represents 18% of revenue and is approaching 20%; $1.5B of backlog is being served through footprint productivity for 2027, with added capacity planned for 2028 and beyond.

• Seven-year framework agreements through 2035 are converting into firm first-year purchase orders; further agreement opportunities remain in the funnel.

• 2027 delivery depends on customer-supplier coordination, supply availability and efficient second and third shifts amid demand above historical levels.

• A facility conversion for defense electronics targets certified production in early 2028; earlier readiness could unlock upside.

• Segment EBITDA margins are expected at 28%-29% through 2027; larger 2028+ contracts may bring margins toward the mid-to-high 20s. Affordable low-cost munitions could involve 10x-20x traditional missile-program volumes with lower content dollars per unit.