Graham 2026 Q1 Earnings Strong Performance with 54.9% Net Income Growth

Graham Corporation (GHM) reported its Q1 2026 earnings on August 5, 2025, delivering results that beat expectations with robust revenue and net income growth. The company maintained its full-year guidance and demonstrated strong operational momentum, supported by strong bookings and a rising backlog.

Revenue
Graham reported total revenue of $55.49 million in Q1 2026, reflecting an 11.1% increase compared to $49.95 million in the same quarter of the prior year. This growth underscores the company’s strong market position and increasing demand across its diversified product portfolio.

Earnings/Net Income
The company’s earnings per share (EPS) surged 55.6% year-over-year to $0.42, while net income reached $4.59 million, a 54.9% increase from $2.97 million in Q1 2025. The significant improvement in EPS and net income highlights the company's enhanced profitability and cost management.

Price Action
The stock experienced a challenging price action, with a 17.50% drop on the latest trading day, a 15.31% decline for the week, and a 10.96% fall month-to-date. Despite the near-term volatility, the stock delivered strong post-earnings performance for a specific 30-day holding strategy.

Post-Earnings Price Action Review
A post-earnings trading strategy of buying GHM when it missed expectations and holding for 30 days generated a 269.73% return with a 30.61% CAGR. The strategy showed no drawdowns and a Sharpe ratio of 0.59, suggesting a low-risk approach with consistent performance. This data indicates that the market may have been quick to react but ultimately rewarded long-term holders.

CEO Commentary
CEO Matthew J. Malone highlighted strong performance across Graham’s product lines, especially in Energy & Process markets driven by major commercial projects and robust aftermarket demand. Defense business gained momentum from a $112 million in follow-on orders for submarine and torpedo programs. Malone noted strategic investments in automated welding and a new cryogenic testing facility, with expected returns above 20%.

Guidance
Graham reaffirmed its full-year fiscal 2026 guidance and remains on track for 8% to 10% annual organic revenue growth and low to mid-teen Adjusted EBITDA margins by fiscal 2027. The company reported a book-to-bill ratio of 2.3x and a backlog of $482.9 million, alongside a strong balance sheet with $10.8 million in cash and $44.3 million in available credit.

Additional News
Graham Corporation recently secured a $25.5 million follow-on order to provide engineered products for the MK48 Mod 7 Heavyweight Torpedo on July 29, 2025. The contract is a significant win for the company’s defense segment and highlights its capabilities in mission-critical applications. Additionally, the company is scheduled to hold its 2025 Annual Meeting of Stockholders on August 26, 2025, in a virtual format. Investors can register for email alerts for future press releases and SEC filings.