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- **Revenue Growth**: 23% YoY to $66 million, driven by defense and space programs.
- **Backlog Expansion**: Record $500 million, 35%+ to convert in 12 months.
- **Strategic Acquisitions**: Xdot Bearing Technologies adds foil-bearing tech for SMRs and space.
- **Operational Efficiency**: 10.8% EBITDA margin, $13.6M cash flow, $4.1M capex in automation.
- **Defense Momentum**: MK48 torpedo orders, SCEPS development, Navy partnerships.

**【Management Opening Remarks】**
- Revenue for Q2 2026 was $66 million, up 23% YoY, driven by defense and space programs.
- Adjusted EBITDA increased 12% to $6.3 million, with a margin of 10.8%.
- Backlog reached a record $500.1 million, up 23% YoY, with 35%-40% expected to convert to revenue within 12 months.
- Announced a $25.5 million follow-on order for the MK48 Mod 7 Torpedo program and a new 30,000 sq. ft. manufacturing facility in Batavia, NY.

**【CEO Commentary】**
- Defense revenue growth of 32% reflects material receipts and new programs, while space bookings of $22 million highlight expansion in commercial launch systems.
- Xdot Bearing Technologies acquisition adds foil-bearing expertise, enabling entry into small modular reactors and fuel cell applications.
- Cryogenic test facility in Florida and automated welding systems enhance production scale and efficiency.
- Book-to-bill ratio of 1.3x underscores strong demand across all end markets.

**【CFO Commentary】**
- Gross profit increased 12% to $14.3 million, with margins impacted by 180bps from high-material-receipts sales mix.
- Operating cash flow of $13.6 million supports capital expenditures of $4.1 million in automation and testing infrastructure.
- Fiscal 2026 guidance reaffirmed, with 8%-10% organic growth and low to mid-teen EBITDA margin targets.
- Tariff impact narrowed to $2-$4 million annually, reflecting sourcing discipline.

**【Q&A Highlights】**
- Space orders of $22 million will convert to revenue over 12-24 months, with $15 million recognized in Q2 and $7 million in Q3.
- Government shutdown delays minimal; Navy programs remain resilient with long-term visibility.
- Xdot integration enhances bearing technology for SMRs and space applications, with spare parts demand growing 15% YoY.
- Small modular reactors and cryogenic testing facilities position for nuclear energy growth.
- MK48 torpedo program expansion and SCEPS development for next-gen torpedoes reflect strategic defense focus.

Graham Corporation (GHM) Q2 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

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Loss on Impairment of Other Assets

Loss on Disposal of Assets

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Gain (Loss) on Change in Fair Value

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Other Non-Operating Income (Loss)

Net Interest Expense

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Net Income

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Total Comprehensive Income Attributable to Owners of the Company

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Diluted EPS from Discontinued Operations

GHM

GHM fundamentals

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