Graham Corporation's Q3 2025: Navigating Contradictions in Navy Orders, Energy Policy, and Market Demand

These are the key contradictions discussed in Graham Corporation's latest 2025 Q3 earnings call, specifically including: U.S. Navy's Approach to Shipbuilding, Impact of Changes in Energy Policy, Workload Balance and Capacity Expansion, NextGen Nozzle Orders and Market Demand, Defense Aftermarket Sales, and Navy Opportunities:



Revenue Growth Across Key Markets:
- Graham Corporation reported sales of $47 million for Q3 2025, a 7.3% increase over the prior year period.
- Growth was driven by strength across key end markets, with defense notably up 11%.

Gross Margin and Profitability Improvement:
- The company's gross margin improved by 260 basis points, reaching 24.8% of sales for Q3 2025.
- Improvement was supported by leverage on higher volume, favorable mix, and improving execution.

Leadership Transition and Succession Plan:
- Graham implemented a two-phase leadership transition, with Matt Malone appointed as President and COO, and Mike Dixon promoted to General Manager of Barber Nichols.
- The transition reflects the company's ability to develop and promote internal talent to ensure continuity in its strategic vision.

Defense Order Lumps and Strategic Pipeline:
- Defense orders were down compared to the prior year due to the absence of large follow-on orders.
- The company remains confident in the order flow, supported by long-term contracts and strategic programs.

Increased Capital Expenditures and Long-term Investments:
- Graham expects capital expenditures for fiscal 2025 to be in the range of $15 million to $19 million.
- Investments focus on capacity expansion, capabilities, and productivity enhancements to support long-term growth.