Graham 2026 Q2 Earnings Revenue Surges 23% Despite EPS Decline

Graham Corporation (GHM) reported fiscal 2026 Q2 results on Nov 8, 2025, with revenue exceeding expectations but earnings falling short. The company reaffirmed full-year guidance despite a 6.7% decline in EPS and a 5.8% drop in net income.

Revenue

Defense sales surged 32% to $9.9 million, while energy and process markets saw an 11% increase. Total revenue hit $66.03 million, up 23.3% from the previous year, driven by robust demand across defense, energy, and space sectors.

Earnings/Net Income

Graham’s EPS fell to $0.28 from $0.30, with net income declining to $3.09 million. Adjusted EPS, however, rose to $0.31, reflecting operational efficiencies. The earnings shortfall underscores margin pressures despite strong top-line growth.

Post-Earnings Price Action Review

The strategy of buying Graham shares on the date of its revenue raise announcement and holding for 30 days yielded cumulative profits of 109.1% over three years, outperforming the simple buying strategy’s 39.7%. This outperformance aligns with GHM’s consistent revenue growth and positive market sentiment post-earnings.

CEO Commentary

CEO Matthew Malone highlighted 23% revenue growth, a 12% rise in adjusted EBITDA to $6.3 million, and a record $500.1 million backlog. Strategic investments include a new Batavia facility for defense capacity and the Xdot Bearing Technologies acquisition to enhance high-speed machinery capabilities.

Guidance

Graham maintained 2026 guidance: 8%–10% organic revenue growth and low-to-mid-teen EBITDA margins. CapEx prioritizes high-ROIC projects, while Xdot’s $1 million annual revenue contribution is excluded from 2026 forecasts.

Additional News

1. Acquisition Activity: Graham acquired Xdot Bearing Technologies to bolster its capabilities in high-speed rotating machinery, a strategic move to enhance competitiveness in aerospace and defense.

2. Facility Expansion: A new 30,000 sq ft Batavia facility is operational, expanding defense production capacity to meet rising demand for Navy programs.

3. Cryogenic Testing: Construction of a cryogenic propellant testing facility in Florida is underway, expected to support space industry growth.

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