Graham 2025 Q4 Earnings Beats Expectations with Net Income Up 228%

Graham (GHM) reported its fiscal 2025 Q4 earnings on Jun 09th, 2025. Graham's results exceeded expectations, with earnings per share (EPS) of $0.43, surpassing the analyst consensus of $0.19. The company's guidance for fiscal 2026, projecting a 10% revenue increase at the midpoint, aligns with market expectations. Management remains focused on strategic investments to support growth. The leadership transition announcement, with Matt Malone stepping in as CEO, reflects Graham's commitment to its long-term strategic goals.

Revenue
Revenue for Graham in 2025 Q4 increased by 20.9% to $59.34 million, up from $49.07 million in 2024 Q4. The company experienced significant growth driven by strength across all markets, particularly in the Defense and Space sectors.

Earnings/Net Income
Graham's EPS rose 226.4% to $0.40 in 2025 Q4 from $0.12 in 2024 Q4, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $4.39 million in 2025 Q4, marking 228.0% growth from $1.34 million in 2024 Q4. The EPS performance reflects strong earnings momentum.

Price Action
The stock price of Graham has tumbled 9.78% during the latest trading day, has jumped 13.47% during the most recent full trading week, and has surged 34.56% month-to-date.

Post-Earnings Price Action Review
The strategy of buying GHM when revenues beat expectations and holding for 30 days has historically delivered strong results, offering a 149.21% return that significantly outperforms the benchmark. However, the approach carries a high maximum drawdown of -50.86%, reflecting a moderate risk-to-reward profile. The Sharpe ratio of 0.48 suggests that while the returns have been attractive, investors should be mindful of the associated volatility and risk levels. This strategy requires careful consideration of market conditions and risk tolerance.

CEO Commentary
"We closed fiscal 2025 with strong momentum, as our fourth quarter results reflected solid execution and sustained demand across our diversified product portfolio," said Daniel J. Thoren, Chief Executive Officer. The company experienced significant revenue growth driven by Defense projects and Space demand, with a notable operating margin increase reflecting improved efficiency. Mr. Thoren emphasized ongoing investments in projects with an expected 20%+ return on invested capital, including facility expansions and technological advancements that will enhance margins and create revenue opportunities. He expressed confidence in the company's strategic positioning to achieve long-term growth and profitability targets.

Guidance
Graham Corporation initiated fiscal 2026 guidance with projected revenue of $225 million to $235 million, representing a 10% increase at the midpoint compared to fiscal 2025. Additionally, the company anticipates Adjusted EBITDA in the range of $22 million to $28 million, reflecting a 12% increase at the midpoint over fiscal 2025. Management is strategically focused on investing in key organic and inorganic growth opportunities to support these targets.

Additional News
Graham Corporation has announced a significant leadership transition. Effective June 10, 2025, Daniel J. Thoren will move from CEO to Executive Chairman and Strategic Advisor, with Matt Malone stepping up as the new CEO. This transition is part of Graham's succession strategy to strengthen its leadership team. Additionally, Michael E. Dixon will become Vice President of Graham Corporation and General Manager of Barber-Nichols. These leadership changes are intended to support Graham's long-term growth objectives and strategic initiatives. The company also secured a major $136.5 million follow-on contract to support the U.S. Navy's Virginia Class Submarine program, reinforcing its position as a key supplier of critical naval components.