Applied Aerospace & Defense (NYSE: AADX) (“Applied” or “the Company”), a premier provider of advanced design, engineering, and vertically integrated manufacturing solutions for leading and next-generation space and defense technology companies, today reported its financial results for the second quarter ended June 30, 2026.

Second Quarter 2026 & Recent Highlights:

  • Generated record revenue of $167.3 million, up 47.4% year over year

  • Incurred a net loss of $154.0 million primarily due to share-based compensation and transaction expenses related to the Company’s June 2026 initial public offering (“IPO”)

  • Delivered record Adjusted EBITDA of $36.4 million, up 38.5% year over year

  • Grew contract backlog to over $1.1 billion providing solid multi-year revenue visibility

  • Successfully completed a $683.0 million IPO, raising approximately $635.6 million of net primary proceeds (after underwriting discounts, commissions, and offering expenses) via the sale of approximately 34.2 million primary shares of common stock at $20.00 per share

“The second quarter saw Applied successfully complete our initial public offering and begin our next chapter as a public company,” said Trip Ferguson, Chief Executive Officer of Applied. “The IPO meaningfully strengthened our balance sheet and enhanced our financial flexibility, reducing pro forma net leverage to 2.7x, and provided new resources to invest in our people, our capabilities and our operations as we scale the business to support a broad and expanding range of our customers’ most critical programs.”

“Applied is positioned at the intersection of two powerful, long term, and uncorrelated demand drivers: an unprecedented growth outlook for the commercial space economy and a dynamic global threat environment that necessitates highly capable advanced manufacturing capacity and major new investments in defense technology,” Ferguson explained. “Across both end markets, the ability to manufacture highly engineered systems at the speed, quality, and scale required by our customers has never been more important. Applied was purpose-built for this mission. Our differentiated capabilities, long-tenured customer relationships and embedded positions across a diverse array of large and enduring programs of record and next-generation growth programs make us a trusted partner to the leading defense primes and bold new innovators in commercial space and defense technology.”

Ferguson continued, “Our second quarter performance reflects the strength of that position, with significant revenue growth across each of our three core markets. Demand for space and launch systems remains high, demand for precision strike systems continues to build rapidly, we are ramping several important next-generation programs, and aftermarket demand remains strong as we enable mission readiness for our customers’ defense aviation fleets. Together with over $1.1 billion in backlog, this provides us with strong multi-year revenue visibility. We are also making progress integrating our recent acquisitions and adding qualified capacity in the areas where our customers need it most. Looking ahead, we remain focused on operational excellence, disciplined investment, and expanding our content on enduring and next-generation programs to drive profitable growth and create long-term value for our customers and shareholders.”

Second Quarter 2026 Financial Results

Consolidated revenue was $167.3 million, up 47.4% compared to the prior year period of $113.5 million. Revenue growth in the second quarter of 2026 was driven by strength across all the Company’s key end markets, reflecting continued demand for our highly engineered systems and contributions from recent acquisitions. Excluding the impact of acquisitions completed in 2026, revenue increased $22.5 million or 19.8%.

The following table presents the Company’s revenue disaggregated by end market for the three and six months ended June 30, 2026 and 2025:

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2026

 

 

2025

 

 

2026

 

 

2025

Space and Launch Systems

$

38,802

 

$

24,476

 

$

73,853

 

$

50,807

Defense Aviation and Airborne Systems

 

78,929

 

 

75,309

 

 

158,352

 

 

147,351

C5ISR(1) and Precision Strike Systems

 

49,587

 

 

13,714

 

 

69,464

 

 

26,365

Total revenue

$

167,318

 

$

113,499

 

$

301,669

 

$

224,523

(1) Command, Control, Communication, Computers, Cyber, Intelligence, Surveillance, and Reconnaissance

Revenue growth in Space and Launch Systems of $14.3 million was primarily attributable to increased volumes on launch vehicle and satellite production programs amid higher launch cadence and proliferated constellations.

Revenue growth in Defense Aviation and Airborne Systems of $3.6 million was primarily attributable to sustained aftermarket demand across a large installed base of aircraft, as well as continued new production activity. Demand is supported by increases in global defense budgets across a broad range of fixed-wing and rotorcraft platforms, including increasing funding for next-generation fixed-wing, vertical lift, and autonomous airborne systems.

Revenue growth in C5ISR and Precision Strike Systems of $35.9 million was primarily attributable to higher revenue across a range of integrated air and missile defense systems and radar programs. Near term demand is expected to remain supported by missile and munition rearmament, layered missile defense priorities, and continued national defense and budget investments in next-generation precision strike systems.

Contract Backlog

As of June 30, 2026, the Company had contract backlog of $1.13 billion. Contract backlog represents the total value of existing contracts, less amounts previously invoiced, as of the backlog date.

Full Year 2026 Outlook

For the full year 2026, the Company expects total revenue of between $670 million and $690 million, and non-GAAP Adjusted EBITDA of between $150 million and $155 million.

Non-GAAP Adjusted EBITDA is provided in the full year 2026 Outlook on a forward-looking basis. The Company does not provide a reconciliation of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with GAAP because such reconciliation cannot be prepared without unreasonable effort given the difficulty of projecting event driven transactional and other non-core operating items in any future period. The magnitude of these items, however, may be significant.

Conference Call and Webcast

Applied will host a conference call today at 8:30 a.m. Eastern Time to discuss the Company’s financial results. The live webcast of the conference call and accompanying presentation materials can be accessed through Applied’s website at https://investors.applied-ad.com/. For those unable to access the webcast, the conference call can be accessed by dialing (877) 407-0789 (domestic) or +1 (201) 689-8562 (international) and requesting the Applied Second Quarter 2026 Earnings Conference Call. An audio replay of the conference call can be accessed by dialing (844) 512-2921 (domestic) or +1 (412) 317-6671 (international) and providing the passcode 13761567.

About Applied Aerospace & Defense

Applied Aerospace & Defense, Inc. is a premier provider of advanced design, engineering, and vertically integrated manufacturing solutions for leading and next-generation space and defense technology companies. Applied builds complex, mission-critical hardware for extreme operating environments across three core markets: Space & Launch Systems, Defense Aviation & Airborne Systems, and C5ISR & Precision Strike Systems. With over 120 years of advanced manufacturing heritage, Applied employs a nationwide infrastructure of 11 purpose-built facilities across six states and more than 1.5 million square feet of production capacity, supported by IP-enabled process expertise for the full lifecycle management of rapid prototyping, large-scale production, and aftermarket sustainment of enduring platforms. Applied Aerospace & Defense is a publicly traded company on the New York Stock Exchange (NYSE) under the ticker symbol “AADX.” To learn more visit www.applied-ad.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements, including statements about our future results of operations, financial condition, business strategy, prospects, and plans and objectives. Forward-looking statements may be identified by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would,” the negative of these words, or similar terms or expressions, although not all forward-looking statements contain these identifying words.

Forward-looking statements are based on our current expectations and projections about future events and trends we believe could affect our business, financial condition, results of operations, and prospects. These statements involve risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements. Such risks, uncertainties and other factors include, without limitation:

  • changes in economic, capital market, and political conditions in the U.S. and globally;

  • changes in U.S. or foreign government defense spending, policies, and priorities;

  • significant declines in business with key customers, or the cancellation, reduction, or deferral of customer orders;

  • our performance on our contracts and programs, including our ability to control costs;

  • the rapid pace of technological change, and the potential for reduced demand for our capabilities and products if we fail to keep up;

  • our ability to establish and maintain important relationships with government agencies and prime contractors;

  • requests or expectations from government customers that we make investments in our business that may not directly benefit stockholders;

  • our acquisition strategy, including our ability to complete acquisitions on satisfactory terms and successfully integrate acquired businesses;

  • our ability to attract, train, and retain experienced senior management and qualified engineering, operational, and other personnel, and the impact of work stoppages or other labor disruptions;

  • shortages, delays, or increased costs associated with critical components, raw materials, and services from suppliers and subcontractors;

  • disruptions affecting our manufacturing facilities and operations;

  • our ability to renew facility leases on favorable terms, and the potential business impact associated with relocating operations, including risk to our information technology systems and security;

  • technology failures, cybersecurity incidents, and unauthorized access to our information systems or sensitive proprietary information;

  • settlements, penalties, remediation, and attorney’s fees if we fail to comply with the numerous legal and regulatory requirements to which we are subject;

  • fines and compliance- and remediation-related costs associated with environmental, health and safety laws, regulations, and permitting requirements;

  • pending, threatened, and future legal and regulatory proceedings, audits, investigations, and other contingencies;

  • changes in trade policies, the implementation of sanctions, imposition of tariffs and counter-tariffs, and other trade measures and restrictions;

  • our ability to protect and enforce our intellectual property rights and defend against infringement claims;

  • our indebtedness, restrictive covenants under our credit facilities, and the effect of debt service obligations on our operational and financial flexibility; and

  • other risks and uncertainties described in our filings with the Securities and Exchange Commission.

You should not rely on forward-looking statements as predictions of future events. The forward-looking statements in this press release relate only to events as of the date on which the statements are made. Except as required by law, we undertake no obligation to update or revise any forward-looking statements to reflect events, circumstances, or new information after the date of this press release. We may not achieve the plans, intentions, or expectations in our forward-looking statements, and you should not place undue reliance on them. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

Applied Aerospace & Defense, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share data)
 

 

June 30,

 

December 31,

 

 

2026

 

 

 

2025

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

18,108

 

 

$

15,475

 

Accounts receivable, net

 

69,590

 

 

 

71,386

 

Contract assets

 

197,668

 

 

 

140,817

 

Inventories

 

60,963

 

 

 

57,375

 

Prepaid expenses and other current assets

 

8,735

 

 

 

6,521

 

Total current assets

 

355,064

 

 

 

291,574

 

Property, plant and equipment, net

 

167,037

 

 

 

119,777

 

Goodwill

 

581,427

 

 

 

342,491

 

Intangible assets, net

 

353,299

 

 

 

199,672

 

Other assets

 

43,392

 

 

 

45,787

 

Total assets

$

1,500,219

 

 

$

999,301

 

Liabilities and shareholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

45,772

 

 

$

37,894

 

Contract liabilities

 

25,287

 

 

 

21,550

 

Accrued expenses and other current liabilities

 

63,299

 

 

 

26,342

 

Current portion of long-term debt

 

5,318

 

 

 

7,068

 

Current portion of finance lease liabilities

 

1,825

 

 

 

1,628

 

Total current liabilities

 

141,501

 

 

 

94,482

 

Long-term debt, net

 

395,173

 

 

 

626,975

 

Finance lease liabilities, net of current portion

 

29,224

 

 

 

30,405

 

Deferred income taxes

 

55,804

 

 

 

35,184

 

Other non-current liabilities

 

50,636

 

 

 

52,791

 

Total liabilities

 

672,338

 

 

 

839,837

 

Shareholders’ equity:

 

 

 

Common stock, $0.01 par value; 1,000,000,000 shares authorized, 172,393,518 and 129,678,789 shares issued and outstanding at June 30, 2026 and December 31, 2025

 

1,724

 

 

 

1,297

 

Additional paid-in capital

 

1,058,943

 

 

 

221,850

 

Accumulated deficit

 

(232,140

)

 

 

(63,037

)

Accumulated other comprehensive loss

 

(646

)

 

 

(646

)

Total shareholders’ equity

 

827,881

 

 

 

159,464

 

Total liabilities and shareholder’s equity

$

1,500,219

 

 

$

999,301

 

Applied Aerospace & Defense, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share data)
 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2026

 

 

 

2025

 

 

 

2026

 

 

 

2025

 

Revenue

$

167,318

 

 

$

113,499

 

 

$

301,669

 

 

$

224,523

 

Cost of goods sold

 

130,132

 

 

 

81,472

 

 

 

230,904

 

 

 

161,612

 

Gross profit

 

37,186

 

 

 

32,027

 

 

 

70,765

 

 

 

62,911

 

Selling, general, and administrative expenses

 

123,315

 

 

 

11,579

 

 

 

151,617

 

 

 

23,946

 

Intangible asset amortization expense

 

10,103

 

 

 

6,538

 

 

 

18,213

 

 

 

13,076

 

Operating (loss) income

 

(96,232

)

 

 

13,910

 

 

 

(99,065

)

 

 

25,889

 

Interest expense, net

 

26,249

 

 

 

16,934

 

 

 

44,020

 

 

 

33,654

 

Loss before income taxes

 

(122,481

)

 

 

(3,024

)

 

 

(143,085

)

 

 

(7,765

)

Income tax expense

 

31,490

 

 

 

1,651

 

 

 

26,018

 

 

 

4,223

 

Net loss and comprehensive loss

$

(153,971

)

 

$

(4,675

)

 

$

(169,103

)

 

$

(11,988

)

 

 

 

 

 

 

 

 

Net loss per share – basic and diluted

$

(1.04

)

 

$

(0.05

)

 

$

(1.20

)

 

$

(0.14

)

Weighted average shares outstanding – basic and diluted

 

148,176,486

 

 

 

88,550,670

 

 

 

140,398,304

 

 

 

88,334,005

 

Non-GAAP Financial Measures

We present in this press release certain financial information based on our Adjusted EBITDA and Adjusted EBITDA Margin. The non-GAAP financial measures are supplemental measures of our performance that we believe help investors understand our financial condition and operating results and assess our future prospects. We believe that presenting these non-GAAP financial measures, in addition to the corresponding GAAP financial measures, are important supplemental measures that exclude non-cash or other items that may not be indicative of or are unrelated to our core operating results and the overall health of our company. We believe that providing this information assists our investors in understanding our operating performance and the methodology used by management to evaluate and measure such performance. When read in conjunction with our GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as one basis for financial, operational and planning decisions. Finally, these measures are often used by analysts and other interested parties to evaluate companies in our industry.

We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted to eliminate certain non-cash charges and other items not reflective of ongoing operations, which include: acquisition-related expenses, integration expenses and restructuring costs, share-based compensation expense and other costs. We define Adjusted EBITDA Margin as Adjusted EBITDA expressed as a percentage of revenue.

Although we use Adjusted EBITDA and Adjusted EBITDA Margin and for the purposes described above, these non-GAAP financial measures have inherent limitations and should neither be considered in isolation nor as substitutes for analyzing our financial results as reported under GAAP. For example:

  • Adjusted EBITDA and Adjusted EBITDA Margin do not reflect significant interest expense or the related cash requirements to service our debt;

  • These measures exclude depreciation and amortization, which are non-cash charges, but do not account for the future cash needs to replace depreciated or amortized assets;

  • These measures exclude substantial amortization expense associated with our intangible assets, limiting the measures’ usefulness;

  • These measures do not include our provision for income taxes which generally represents taxes paid in the period or that are payable in the future, which are necessary aspects of our operations;

  • These measures exclude share-based compensation expense, which is an important component of employee compensation; and

  • These measures exclude costs related to the IPO and certain acquisition-related and post-merger integration and restructuring costs, which are necessary elements of certain acquisitions.

Because of these limitations, Adjusted EBITDA and Adjusted EBITDA Margin should not be considered as measures of cash available for investment in our business. Management addresses these limitations by evaluating these metrics alongside other GAAP measures, such as revenue, to assess our operating performance. These metrics are non-GAAP financial measures, are not defined by GAAP and should not be considered alternatives to net loss or cash flows from operations as determined under GAAP. Moreover, our methods of calculating Adjusted EBITDA and Adjusted EBITDA Margin may differ from those used by other companies with similarly titled measures and therefore may not be directly comparable.

Adjusted EBITDA

The following table sets forth the reconciliation of net loss to Adjusted EBITDA and presentation of net loss margin and Adjusted EBITDA margin for the three and six months ended June 30, 2026 and 2025:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

(in thousands, except percentages)

 

2026

 

 

 

2025

 

 

 

2026

 

 

 

2025

 

Net loss

$

(153,971

)

 

$

(4,675

)

 

$

(169,103

)

 

$

(11,988

)

Income tax (benefit) expense

 

31,490

 

 

 

1,651

 

 

 

26,018

 

 

 

4,223

 

Interest expense, net

 

26,249

 

 

 

16,934

 

 

 

44,020

 

 

 

33,654

 

Depreciation and amortization

 

15,127

 

 

 

9,664

 

 

 

27,236

 

 

 

19,387

 

Share-based compensation expense

 

110,086

 

 

 

802

 

 

 

110,842

 

 

 

1,604

 

Transaction costs(1)

 

5,176

 

 

 

48

 

 

 

19,161

 

 

 

562

 

Integration and restructuring costs(2)

 

2,047

 

 

 

1,336

 

 

 

4,320

 

 

 

3,377

 

Legal contingencies loss(3)

 

—

 

 

 

109

 

 

 

—

 

 

 

116

 

Management fees(4)

 

233

 

 

 

421

 

 

 

482

 

 

 

677

 

Other(5)

 

—

 

 

 

16

 

 

 

—

 

 

 

37

 

Adjusted EBITDA

$

36,437

 

 

$

26,306

 

 

$

62,976

 

 

$

51,649

 

Net loss margin

 

(92.0

)%

 

 

(4.1

)%

 

 

(56.1

)%

 

 

(5.3

)%

Adjusted EBITDA margin

 

21.8

%

 

 

23.2

%

 

 

20.9

%

 

 

23.0

%

(1)

Includes transaction-related costs associated with mergers, acquisitions, and costs related to the IPO.

(2)

Includes acquisition integration and restructuring costs, including plant consolidation and reconfiguration, reductions in force, and executive severance expense.

(3)

Includes losses from legal disputes and settlements from third parties.

(4)

Includes management fees paid to our parent company in accordance with our management services agreement which was terminated upon the closing of the IPO.

(5)

Includes other costs that we believe are not indicative of day-to-day operations of the business.

 

Media gallery

About The Author
Business Wire