Karman Holdings 2025 Q3 Earnings Strong Performance with 78% Net Income Surge

Karman Holdings reported fiscal 2025 Q3 earnings on Nov 8, 2025, with revenue surging 41.7% to $121.79 million and net income rising 78.1% to $7.64 million. The company raised full-year revenue guidance and outlined 2026 growth prospects, but the stock dipped 5.96% post-earnings due to an EPS miss.

Revenue

Karman’s revenue growth was driven by all three core segments. Hypersonics and Strategic Missile Defense revenue reached $36.61 million, while Tactical Missiles and Integrated Defense Systems climbed to $44.48 million. The Space and Launch segment contributed $40.70 million, reflecting robust demand across defense and space markets. Total revenue of $121.79 million marked a 42% year-over-year increase, underscoring the company’s strategic market expansion and operational execution.

Earnings/Net Income

Earnings per share (EPS) doubled to $0.06, up from $0.03 in 2024 Q3, while net income surged 78% to $7.64 million. Despite the EPS beat, the stock reacted negatively to the earnings miss, highlighting investor sensitivity to short-term volatility.

Post-Earnings Price Action Review

The stock price of Karman Holdings experienced mixed movements post-earnings. A 9.28% gain on the latest trading day was offset by a 16.10% weekly decline and a 7.73% monthly drop. The EPS miss, despite strong revenue growth, triggered a 5.96% after-hours slide. Market sentiment remains divided, with Raymond James maintaining a Strong Buy rating and $100 price target, while concerns persist over profit margins and rising debt. The company’s high P/E ratio of 857.4 and recent $130 million term loan raise questions about financial leverage. Historical volatility, including the 5.96% post-earnings drop, suggests further price swings are likely. Although full-year guidance was raised and 2026 growth expectations remain cautious (20–25%), Raymond James’ bullish outlook hints at potential upside. However, risks like debt accumulation and margin compression could pressure the stock if negative sentiment or additional misses persist.

CEO Commentary

CEO John R. Thompson attributed Q3’s performance to strategic market expansion and disciplined cost management. He emphasized investments in digital infrastructure and R&D to strengthen high-margin segments, while acknowledging supply chain disruptions and inflationary pressures. The CEO expressed cautious optimism about navigating macroeconomic uncertainties through agility and a diversified portfolio.

Guidance

Karman raised 2025 full-year revenue guidance to $461–$463 million and adjusted EBITDA to $142–$143 million. For 2026, preliminary growth expectations of 20–25% were outlined, supported by $758 million in funded backlog.

Additional News

Karman acquired Five Axis Industries for $88 million, expanding capabilities in commercial space systems. The company secured a $130 million term loan to fund working capital and acquisitions, increasing leverage but signaling aggressive growth plans. Raymond James reiterated a $100 price target, while RBC Capital raised its target to $93. Recent analyst updates highlighted mixed sentiment, with concerns about management experience and margin stability.