MRO Market Recovery: Contradictory Insights and Future Expectations from Q1 to Q2 2025

Revenue and Backlog Growth:
- TAT Technologies reported an 18% increase in revenue to $43 million in Q2 2025, with a 20% increase for the first 6 months compared to the same periods in the previous year.
- Long-term agreement value and backlog expanded by $85 million to $524 million.
- Growth was driven by strategic diversification and market share gains, especially in new contracts and expansions within the customer base.

Gross and Operating Margins Expansion:
- Gross profit increased by 35%, and gross margin improved by 320 basis points to 25.1% in Q2 2025.
- Operating income rose by 62% to $4.4 million.
- The expansion was attributed to operational efficiencies, cost structure optimization, and product mix enhancement.

Cash Flow and Financial Strength:
- TAT Technologies generated approximately $7 million in positive cash flow from operations in Q2 2025.
- The strong cash flow was driven by better collections from customers and improved payment terms from suppliers.

Board and Leadership Changes:
- TAT focused on strengthening its Board of Directors to align with growth strategy and new challenges, including M&A, capital markets, and U.S. market background.
- The changes aimed to enhance the board's composition with industry expertise to support the company's growth initiatives.