Karman Holdings Inc. Q4 FY2025 earnings call

John Rambo introduced his new role, emphasizing excitement to lead the team. Tony Koblinski summarized strong financial and operational results in 2025, including completing three acquisitions and expanding capabilities. Mike Willis detailed Q4 and full-year financial performance, capital allocation priorities. Jonathan Beaudoin discussed operations and capacity expansion initiatives, such as investing in capacity, hiring, supply chain management, and implementing the Carmen operating system. John Rambo provided 2026 outlook, expecting revenue and adjusted EBITDA growth with organic and inorganic growth roughly split.

Fourth quarter 2025: Record quarterly revenue was $134 million, a 47% increase compared to Q4 2024. Gross profit was $54 million, up 54%, with a gross profit margin of 40%. Adjusted EBITDA was $42 million, a 59% year-over-year increase. Backlog reached $801 million, a 38% year-over-year growth. Full year 2025: Revenue was $472 million, a 37% increase compared to 2024. Gross profit was $190 million, with a 40% margin. Adjusted EBITDA was $145 million, a 37% year-over-year increase. Fourth quarter end market mix: Hypersonics and strategic missile defense (SMD) revenue was $48 million, up 42%, representing 27% of quarterly revenue; Space and launch revenue was $36 million, up 25%, representing 36%; Tactical missiles and integrated defense systems (IDS) revenue was $50 million, up 77%, representing 37%. Full year end market mix: Space and launch represented 32% of annual revenue, hypersonics and SMD 32%, and tactical missiles and IDS 36%.

2026 full-year revenue expected to be $715 to $730 million and non-GAAP adjusted EBITDA $207 to $218 million, representing 53% year-over-year revenue and 46% adjusted EBITDA growth. Revenue growth roughly split between organic and inorganic. First half expected to represent approximately 45% of total revenue and adjusted EBITDA. Golden Dome and other growth factors have uncertainty in timing but confidence in materializing. Backlog over $1 billion provides approximately 80% visibility to the midpoint of full-year revenue guidance range as of March 20th, 2026.

Temporary slowdown in contracting activity during Q4 2025 and Q1 2026 due to federal government shutdown. Supply chain risk low but some minor areas to watch. Uncertainty in timing of Golden Dome and other growth factors. Potential risk of customers trying to add second sources.

Q: Peter Arment asked about multi-year frameworks for primes' ramping up on missile production and Carmen's part.

A: John said Carmen will benefit from frameworks but need to work further with primes to understand demand profile, with significant increases likely materializing from Q4 2026 and beyond.

Q: Ken Herbert asked about capacity utilization and CapEx 5% of revenue.

A: Mike said existing floor space can be expanded before Salt Lake City facility opens, and it will quadruple UAS launch capability and double nozzle production rate on certain programs.

Q: Ken Herbert asked about margin in backlog and pricing pressure.

A: Tony said backlog has no notable mixed changes, but Siemens has a different profile with cost plus vs firm fixed contracts, and over time will work to put into firm fixed.

Q: Clark Jeffries asked about M&A integration headwinds to EBITDA margins.

A: Mike said it's in line with expectations, operating leverage brings about 50 bps a year, and adjusted margin lower in 2026 due to contract mix.

Q: John Godden asked about supply chain and Golden Dome timing.

A: John said supply chain risk low, and Golden Dome timing uncertain with opportunity coming towards end of 2026 and 2027.

Q: Alexandra Mandery asked about contract delays and its impact on outlook.

A: Said it's a timing matter, in constant communication with customers and confident it's just a delay.

Q: Amit Daryanani asked about backlog composition.

A: Said all four end markets have solid growth drivers and composition shifts by quarter but balanced long term.

Q: Michael LaShock asked about NASA and hypersonics exposure.

A: John said NASA has other areas like space vehicles and hypersonics is a significant focus with growth.

Q: Ken Herbert asked about customers adding second sources risk.

A: Said not aware of initiatives, focus is to not be a choke point and provide redundancy.