TAT Technologies (TATT) Q1 2026 earnings summary

Executive summary

• Entered 2026 with robust operations and record customer demand, with backlog and long-term agreements reaching $580 million at Q1 end, up from $550 million at end of 2025, driven by new contract wins and strong MRO intake.

• Q1 2026 revenue was $41.1 million, down 2.4% year-over-year due to supply chain disruptions and component shortages, but gross profit held steady at $10 million and gross margin improved to 24.4%.

• Operating income declined to $3 million (7.3% of revenue), and net income was $3.4 million, both down year-over-year.

• Adjusted EBITDA was $4.9 million (11.8% margin), down from $5.7 million (13.6%) in Q1 2025.

• M&A remains a strategic priority, with a dedicated team and expanded pipeline actively evaluating accretive bolt-on opportunities.

Financial highlights

• Q1 2026 revenue: $41.1 million (down 2.4% YoY); gross profit: $10 million (up 0.8% YoY); gross margin: 24.4% (up 80bp YoY).

• Operating income: $3 million (down 28.4% YoY); operating margin: 7.3% (down 260bp YoY).

• Net income: $3.4 million (down 10.8% YoY); diluted EPS: $0.26 (down 24.3% YoY).

• Adjusted EBITDA: $4.9 million (11.8% margin), down 15.5% YoY.

• Positive operating cash flow of $1.9 million, versus negative $5 million in Q1 2025.

Outlook and guidance

• Full-year revenue and EBITDA growth guidance remains intact, with expectations for meaningful growth in 2026 as supply chain issues resolve.

• Management expects supply chain disruptions to resolve in the coming months, supporting a return to growth in Q2 and the second half of 2026.

• Gross margin is expected to continue improving in 2026, supported by operational efficiencies and cost management initiatives.

• High global demand for component MRO and new aircraft production is expected to drive growth, with a projected market CAGR of 6.9% from 2025–2032.

• Strategic focus on M&A, expanding OEM certifications, and leveraging long-term agreements to support future growth.