Lyntris Q3 2026 Earnings Results & Report

Lyntris EPS Results

• Actual EPS: $0.15
• Consensus EPS: $0.08
• Beat/Miss: Beat by +$0.07
• One Year Ago EPS: N/A

Lyntris Revenue Results

• Actual Revenue: $194.43 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Lyntris (NYSE:LYNX) is a defense technology company delivering sense-to-act connectivity solutions for the modern, connected battlespace. Lyntris Inc. is based in WASHINGTON.

Lyntris Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Revenue and backlog surged: Third-quarter revenue rose 90% year over year to $194 million, while backlog exceeded $1 billion, up 113% from fiscal year-end 2025, with a 1.5 book-to-bill ratio. Management cited broad-based demand, particularly in air and missile defense and space, though the company’s outlook depends partly on customer schedules and award timing.
• Positive Sentiment: Growth outlook remains strong: Lyntris forecast fiscal 2026 revenue of $623 million–$630 million and adjusted EBITDA of $95.5 million–$97 million; executives also said they remain comfortable with revenue growth of 30% or more from 2026 to 2027.
• Negative Sentiment: Margin expansion may take longer: Third-quarter adjusted EBITDA margin was 14.7%, with management pointing to a higher mix of early design and development work and initial production. Executives still see a path to a “two-handle” margin over the medium to long term, but said expansion may occur more slowly than initially expected.
• Positive Sentiment: Cash generation and leverage improved: The company reported $79 million in quarterly free cash flow and ended the quarter with net leverage of 1.2, down from 4.2 at the start of the fiscal year. Management cautioned that cash flow can vary with customer payment timing and program spending.
• Positive Sentiment: International and space opportunities are expanding: International customers now account for nearly a quarter of backlog, and Lyntris highlighted its selection as prime payload integrator for the U.S. Space Force’s PTS-G program as an example of taking on broader work. Executives said the same technology could support additional domestic and allied programs.

Presentation

[Operator]

Good afternoon, and welcome to the Lyntris third quarter 2026 earnings conference call. All participants are currently in a listen-only mode. Following the prepared remarks, we will open the call for questions. Please note that today's conference is being recorded. I will now turn the call over to Nathan Rutledge, Senior Vice President and Head of Investor Relations. Nathan, please go ahead.

[Nathan Rutledge, SVP and Head of Investor Relations at Lyntris]

Good afternoon, and welcome to Lyntris third quarter fiscal year 2026 earnings call. Please turn to slide two. Before we begin, please note that certain information presented on this call contains forward-looking statements. Forward-looking statements are based on current expectations, forecasts, and assumptions that involve risks, uncertainties, including but not limited to economic, competitive, governmental, and technological factors outside of our control. These factors may cause our business strategy or actual results to differ materially from forward-looking statements. For further information on these risks, please review the risk factors discussed in our registration statement on Form S-1 filed with the SEC, as well as the Form 8-K filed today, the associated earnings release, and the safe harbor statement contained therein. All forward-looking statements should be considered in conjunction with those in our earnings release.

[Nathan Rutledge, SVP and Head of Investor Relations at Lyntris]

Company undertakes no obligation to revise any forward-looking statements in today's remarks or to update them to reflect events or circumstances occurring after this call. We will also discuss certain non-GAAP financial measures. Definitions and reconciliations to the most directly comparable GAAP measures are included in our earnings materials. We have also posted a slide presentation at investors.lyntris.com in the News and Events section. The information discussed on this call is time-sensitive and is accurate only as of today, November 4th, 2026. Joining me today are Brian Morrison, our Chief Executive Officer, Matt Alty, our President, and Tim Paulin, our Chief Financial Officer. With that, I'll turn the call over to you, Brian.

[Brian Morrison, CEO at Lyntris]

Thank you, Nathan, and welcome, everyone. I'm excited to share Lyntris' third quarter results. Our quarter was driven by strong performance, growing customer demand, and an expanding role on programs that matter to the future of defense and space. Let's look at slide four. I'll start with our third quarter highlights. Tim will review our financial results, and then Matt will discuss the capabilities and programs driving our growth. I'll then return for our outlook and priorities before we take your questions. In August, Lyntris made its debut on the New York Stock Exchange. That IPO strengthened our balance sheet and increased our capacity to invest in the business and support future growth. Our focus now is to build on the strong business momentum we experienced leading up to the IPO, and which we have continued to see since the listing.

[Brian Morrison, CEO at Lyntris]

We will continue to execute as these programs advance, translating today's opportunities into sustained long-term growth. Our purpose is straightforward. We help customers connect the modern battle space from sense to act. Our engineering talent and proprietary technology help detect threats, share and interpret information, and enable a response. We bring these capabilities together to meet demanding mission requirements, working with government agencies and military customers, as well as both established and emerging primes. Our track record of delivering for these customers positions us to grow as their programs advance, and we will take on a larger role as their needs evolve. In the third quarter, we delivered total revenue of $194 million, a year-over-year increase of 90%, or 89% organically. Adjusted EBITDA grew 91% to $28.5 million, representing a margin of 14.7%.

[Brian Morrison, CEO at Lyntris]

Adjusted net income was $17 million, or $0.15 per share, and free cash flow for the quarter was $79 million. These results exceeded our expectations, demonstrating strong momentum in our business as we continue executing against our strategic priorities. Our third quarter performance reflects strong customer demand and the increasing relevance of our technology to evolving mission requirements. Customers need to detect threats at greater distances, operate across more frequency bands, and respond with greater speed and accuracy. Those requirements closely suit the capabilities we have brought together at Lyntris, from sensing and communications to software that connects information to command and control. We see broad-based growth across a number of programs, particularly in air and missile defense and space ISR and resilient comms, supported by the modernization of U.S. and allied radar systems and the growing need for resilient space-based communications.

[Brian Morrison, CEO at Lyntris]

International customers are also investing in sovereign defense and space capabilities, creating additional opportunities for our technology. Much of this increased activity supports well-funded, high-priority programs with room to grow as programs move through the development life cycle. This work includes upfront engineering and initial production that generate revenue and adjusted EBITDA today, but also establish the technology and manufacturing foundation for follow-on work. The first system requires more engineering effort. Subsequent systems build on that work, creating the opportunity for higher margins as production expands. These program positions are an essential part of our long-term growth strategy. Engaging with customers early on allows us to embed our technology in their solutions and expand our role as programs mature. Our merchant supplier model also allows us to apply that technology across multiple customers and programs.

[Brian Morrison, CEO at Lyntris]

We welcome the additional revenue and adjusted EBITDA dollars from this work while continuing to focus on driving execution and profitability for the long term across the portfolio. That customer demand is also reflected in our backlog. We ended the quarter with a total backlog of just over $1 billion, up about $100 million sequentially and 113% compared with $476 million at the end of fiscal 2025. Our book-to-bill in the quarter was 1.5. Even with the strong revenue growth we delivered this quarter, orders continue to significantly exceed revenue, strengthening our visibility into future activity and supporting our confidence in the continued growth of this business. Orders during the quarter included both initial awards and follow-on commitments that move programs from development into low-rate production. International demand continues to support our growth.

[Brian Morrison, CEO at Lyntris]

While international customers have historically represented about 15% of revenue, their share of our backlog has grown substantially in the fiscal year, accounting now for nearly a quarter of our total backlog. These trends strengthen visibility into future activity and support our confidence in sustained growth. Slide five shows how that growth is taking shape across our core missions. Air and missile defense revenue increased 154% to $83 million, reflecting accelerated activity on a major radar program where we are supporting initial fielding and low-rate initial production, along with contributions from programs across the production life cycle. Across this mission area, our positions span initial fielding, low-rate production, and programs preparing for higher production volumes. The absolutely essential modernization of U.S. and allied radar systems creates opportunities to build on these positions as customers demand greater range, accuracy, and sensitivity in response to a rapidly evolving threat environment.

[Brian Morrison, CEO at Lyntris]

In maritime domain awareness, revenue grew 29% to $54 million. Our work there spans naval radar, command and control, defensive cyber, and integrated maritime sensor networks, including unmanned systems. These capabilities help customers understand activity across their waters, protect mission networks, and coordinate a response. In space ISR and resilient comms, revenue grew 108% to $57 million as we met rapidly growing sensing and communications demands. Here, we're expanding from integrated antenna solutions into full-up satellite payload solutions. Our recently announced role as a prime payload integrator on PTS-G illustrates that broader capability. We also see a substantial international opportunity in sovereign ground antenna and satellite payloads as allied nations seek resilient space-based communications capabilities tailored to their own requirements. Our space heritage across geostationary and medium Earth orbits, together with our expertise in multi-frequency antennas, gives us a strong foundation to address this emerging demand.

[Brian Morrison, CEO at Lyntris]

As requirements become more complex and deployment timelines compress, we see opportunities to bring these capabilities together into broader payload solutions and apply our technology across additional customer programs. Across all of our core mission areas, we're seeing opportunities to advance positions we've spent years establishing. Our engineering expertise and track record of delivery give us a foundation to support customers as their programs advance and requirements expand. This quarter demonstrated what that can mean for Lyntris. Customers asked us to do more, and we met the moment, driving growth in revenue and in our bottom line. Tim will now walk through the financial results in some greater detail.

[Tim Paulin, CFO at Lyntris]

Thank you, Brian. We're now on slide six. Our third quarter results reflect both growth in customer demand and faster pace of activity on existing programs. I'll walk through the financial detail on slide six, and then we'll cover free cash flow and our balance sheet. As Brian mentioned, revenue was $194 million, up 90% year-over-year, or 89% organically, reflecting increased activity in air and missile defense, integrated satellite payload programs, and allied maritime programs. Adjusted EBITDA increased 91% to $28.5 million, with a margin of 14.7%. Higher revenue and cost actions offset the program mix, including more upfront engineering and initial production on programs where we are embedding our proprietary technology, as well as growing investment in public company capabilities. As these programs move into higher rate production, we expect to benefit from the engineering work already completed and greater manufacturing scale.

[Tim Paulin, CFO at Lyntris]

On a GAAP basis, we reported a net loss of $5 million, or $0.04 per share, compared to a net loss of $3.5 million, or $0.03 per share, in the prior year period. Adjusted net income was $17 million, or $0.15 per share, versus $1.7 million and $0.02 per share in the prior period. Our adjusted net income measure excludes acquisitions and integration-related costs, stock-based compensation, amortization of acquired intangibles, and certain other items together with related tax effects. The year-over-year improvement in adjusted net income was primarily driven by stronger results of operations, lower interest expense, and adjustments for one-time items such as share-based compensation and loss on debt extinguishment. Turning to our results for the nine months ended September 30th, 2026. Revenue increased 55% to $435 million, reflecting stronger growth on new and existing programs.

[Tim Paulin, CFO at Lyntris]

On a GAAP basis, we reported a net loss of $18 million, or $0.17 per share, compared to a net loss of $13.2 million, or $0.14 per share, in the prior year period. Adjusted net income was $30.6 million, or $0.28 per share, versus $2.4 million and $0.03 per share in the prior period. The increase in our net loss is mainly attributable to non-recurring stock-based compensation expenses and the loss on refinancing debt, partially offset by stronger operational performance and lower interest expense. Adjusted EBITDA grew 65% to $66.3 million, supported by top-line growth and effective cost controls, yielding an adjusted EBITDA margin of 15.2%, a year-over-year increase of 90 basis points. Reconciliations of adjusted EBITDA, adjusted net income, adjusted diluted earnings per share, and free cash flow to the corresponding GAAP measures are included in our earnings materials. Turning now to free cash flow.

[Tim Paulin, CFO at Lyntris]

Operating activities generated approximately $84 million of cash in the quarter, while capital expenditures were $5 million, resulting in a free cash flow of $79 million. Free cash flow excludes IPO proceeds. Through the first nine months, operating cash flow was $119 million, capital expenditures were $11 million, for a free cash flow of $108 million. Lyntris delivered strong free cash flow this quarter, supported by earnings and favorable customer payments. Across our portfolio, we received payments at different points in program execution, including upfront funding, progress payments, and payments following delivery. We work with customers to align payments terms with program requirements and reduce the working capital required for growth. Our mix of payment structures, disciplined working capital management, and low capital intensity support an attractive cash flow profile. Cash flow will vary from quarter to quarter as receipts and program spending move through the business.

[Tim Paulin, CFO at Lyntris]

We expect continued strong cash generation as we execute our backlog, further strengthening our balance sheet and financial flexibility. We also took important steps to strengthen our balance sheet during the quarter. In July, we entered into a new $200 million term loan, plus $100 million revolving credit facility, which came with materially lower interest rates than our prior facilities. Additionally, we used about $60 million of IPO proceeds to repay debt and ended the quarter with no balance on our revolver. We ended the quarter with $88 million in cash and $198 million in debt, bringing net leverage to 1.2, down significantly from 4.2 at the beginning of the fiscal year. Looking ahead, we expect net leverage to continue declining over time, although working capital requirements may lead to some quarter-over-quarter variability.

[Tim Paulin, CFO at Lyntris]

Our strengthened balance sheet provides greater financial flexibility to support customer commitments, fund working capital needs, and invest in future growth. With that, I'll turn it over to Matt to discuss our capabilities and progress we're making across key programs. Matt.

[Matt Alty, President at Lyntris]

Thank you, Tim. Let's now turn to slide seven. I'd like to start by taking a step back and examining the mission environment, because it explains why customers choose Lyntris. Warfare has changed in three fundamental ways. Firstly, our adversaries are adapting faster, and the threats we encounter are more complex and numerous across every domain. We operate in a spectrum that is now congested, contested, and weaponized, and detecting, tracking, and responding to these threats requires sensors with more range, sensitivity, and accuracy. Second, the data. Following the proliferation of sensor networks, data often remains siloed by service and platform, which is a problem when decision timelines are compressed. Commanders need a clear, integrated view of the battle space that enables faster, more informed decisions. Third, connectivity. Adversaries have industrialized electronic warfare, and legacy architectures, satellites, and waveforms can become single points of failure.

[Matt Alty, President at Lyntris]

The United States and its allies need secure, resilient links, and many allied nations are building sovereign capabilities to protect their own borders. Together, these dynamics are reshaping mission requirements and creating significant opportunities for Lyntris. Turning to slide eight. Lyntris capabilities cover the full path from sensing to action. Our sensors are used to detect threats and communicate data in highly contested environments. Our sensor architecture shapes how those sensors behave and prepares their output to be fused with other sources. Our data and mission software then turns that information into an integrated picture that supports faster, more informed decisions. Our solutions are modular by design. We build proven hardware and software building blocks that can be adapted for different platforms and missions, so a customer can start with a single component and scale to a fully integrated subsystem.

[Matt Alty, President at Lyntris]

That modularity is why our technology appears in every domain, from integrated satellite payloads and interceptor subsystems to radar on next-generation fighters, multi-band ground terminals, and maritime systems. The platforms differ, but the same core technology carries across each one. Together, these capabilities support the three missions that Brian described earlier: maritime domain awareness, air and missile defense, and space ISR and resilient communications. Slide nine shows how we bring those capabilities to market. Our merchant vendor supplier model gives us multiple paths to participate in customer programs. We work with both established defense primes and newer entrants, and our technologies often support more than one team competing for the same opportunity. We also work directly with end users, including the U.S. services and allied governments. Engaging early helps us understand their requirements and build our proprietary technology into the solutions that can advance with the program.

[Matt Alty, President at Lyntris]

Proprietary technology is central to that approach. Approximately 85% of our product revenue comes from products built on design IP that we own, and the vast majority of our business comes from sole, single, or directed source positions. As of the end of last year, we supported more than 200 programs. Those IP-derived positions provide continuity as programs advance, and they are the foundation for the program momentum on the next slide. Let's turn to slide 10, where three programs show how our capabilities address the needs we described earlier and how our role can grow over time. We'll begin with air and missile defense. LTAMDS is a program that we've supported from concept, and the program has recently transitioned into production and deployment phase under a U.S. Army contract valued at over $1.7 billion to the prime.

[Matt Alty, President at Lyntris]

In September, we announced production orders under a long-term purchase agreement with Raytheon, supporting demand through 2028. LTAMDS is being developed to provide the Army with 360-degree integrated air and missile defense capabilities. The precision thermal management assemblies that we build at Lyntris help the radar's high-power electronics maintain stable temperatures and directly support the radar sensitivity, accuracy, and range. Detecting and tracking a threat, however, is only the first step. In maritime domain awareness, our customers need to interpret data faster so they can make informed decisions, develop a plan, and coordinate a response. Our command and control solutions bring information from multiple sensors into a shared operational picture, enabling faster, more informed decisions. For the Navy's Maritime Tactical Command and Control Program, or MTC2, we deliver a command and control platform that combines data integration, visualization, and mission planning.

[Matt Alty, President at Lyntris]

It helps fleet planners at sea and ashore understand the operating environment, plan missions, and coordinate operations. In Morocco, we adapted our Garda C2 technology to connect distributed sensors, operational sensors, mobile systems, and ships, creating a common operating picture tailored to the Moroccan Navy's requirements. In Egypt, we are applying that approach to an awarded maritime domain awareness program that brings together coastal sensors, operational centers, and command and control software. Each is an example of an established technology reaching another customer through an architecture tailored to its needs. In space ISR and resilient communications, we've taken on a broader payload role. Earlier this month, we announced our selection as the prime payload integrator supporting the U.S. Space Force's Protected Tactical Satellite Communications–Global Program, or PTS-G.

[Matt Alty, President at Lyntris]

Our work spans radio frequency architecture, pointing systems, antenna, and full payload integration and testing at our Antenna Center of Excellence in Longmont, Colorado. Building on 20 years of space heritage, this program expands our role from integrated antenna solutions to integrated satellite payloads. The same RF and antenna capabilities apply to sovereign payload opportunities that Brian described earlier. Many international customers need increasingly complex satellite systems that can operate in contested environments, often on compressed schedules. Building on established technology allows us to reduce technical risk and quickly adapt designs to their specific mission requirements. Together, these programs show how we leverage established technology, expand our role in mission-critical programs, and create additional paths for growth. Slide 11 shows how those positions can develop through four stages: develop, deploy, expand, and sustain and upgrade. The stages can overlap, and we participate at different points across programs.

[Matt Alty, President at Lyntris]

In develop, we help establish the architecture and solve technical challenges on well-funded, high-priority customer programs. This upfront engineering work embeds our proprietary technology in the customer's system and positions us for repeat production, incremental content, and margin expansion as the program scales. In deploy, we integrate and field the solution, drawing on established designs, manufacturing processes, and software. The LTAMDS program I shared a moment ago is a prime example where we are scaling production of thermal management technology to directly support a high-growth program. In expand, we bring that technology to additional customers or missions, or take on more of an existing system. Expansion can also mean leveraging the same proprietary technology to address a similar requirement on an adjacent program. For example, our thermal management IP supports multiple AESA radar programs, and our RF and precision pointing technologies support multiple SATCOM programs, both domestically and internationally.

[Matt Alty, President at Lyntris]

Because we're a merchant supplier, we can support multiple customer teams at the same time, so an investment in our IP extends well beyond any single program award. Leveraging established technology and increasing production volumes can improve program economics over time. In sustain and upgrade, we support fielded systems and add capabilities as requirements change or the system is upgraded to adapt to an emerging threat or mission requirement, including internationally, as we are doing with the CAPTOR-E Mark 2 radar upgrade for the U.K. Typhoon fleet. We support customers with programs at different stages of this life cycle. Programs entering production today often reflect years of earlier engineering work. At the same time, the development work we undertake today helps establish positions that can support growth for many years to come.

[Matt Alty, President at Lyntris]

Participating early allows us to help customers solve demanding technical requirements and incorporate our proprietary technology into the solution. Successful execution then gives us a foundation to support subsequent deployments, production orders, and upgrades. The mix of activity across these stages may affect margins from period to period. Our objective is to improve the profitability of established programs while building the next generation of growth opportunities. Back to Brian.

[Brian Morrison, CEO at Lyntris]

Thanks, Matt. That life cycle progression that Matt talked about is fundamental to our long-term growth strategy. We see opportunities to expand our role on existing programs, broaden the solutions we provide, and bring our technology to new customers and missions. Our priority is to translate those opportunities into sustained growth and strong financial performance. We're focused on aligning engineering, suppliers, and production capacity with the commitments we already have in hand. We're also bringing more capabilities together around customer requirements. Our task now then is to turn product improvements into consistent execution and measurable financial results. Turning to slide 12, I'll start with our fiscal 2026 outlook. For full year 2026, we expect revenue of $623 million-$630 million, representing approximately 61% year-over-year growth at the midpoint. Adjusted EBITDA of $95.5 million-$97 million, or expected growth of about 54%.

[Brian Morrison, CEO at Lyntris]

We expect growth to come from increased activity on established air and missile defense programs, continued integrated payload execution, and delivery against already awarded maritime programs. Backlog conversion and follow-on orders support that opportunity, with customer schedules and award timing influencing the pace of revenue. Our margin assumptions reflect higher volume, improved operating efficiency, and a greater contribution from our technology, partly offset by continued initial fielding activity and investment to support growth. With more design and initial deployment work than we had initially anticipated, we now expect adjusted EBITDA margin expansion to occur over a somewhat longer period than initially anticipated, although that work is helping us to overdrive EBITDA and revenue today. We remain confident in our long-term margin improvement strategy. Our work embeds our IP in customer solutions and creates opportunities for higher margin with peak production as programs expand.

[Brian Morrison, CEO at Lyntris]

As I've suggested, we welcome the additional revenue and adjusted EBITDA dollars associated with this increased volume. We're building interest around differentiated technologies, strong positions on critical programs, and the ability to deliver integrated solutions across connected missions. Our priorities are clear: execute consistently, expand our proprietary content, and drive greater efficiency as we scale. By doing so, we believe we can strengthen our competitive position, capture a greater share of our customers' evolving needs, and translate that growth into higher earnings and stronger cash generation over time. I want to thank our employees for their expertise and commitment, which helped us drive these results. I want to thank our customers for their trust and our shareholders for joining us on this next chapter. We look forward to updating you on our progress. With that, I'll take your questions.

[Operator]

We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you have additional questions, you may rejoin the queue. To ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from the line of John Godyn with Citi. John, your line is now open.

[John Godyn, Managing Director at Citi]

Hey, guys. The results are tremendous. To state the obvious, we've been in a market here where investors lack conviction and struggle to see through political risk that I suppose they think will derail growth across defense. So Brian and Matt, I wanted to use my question to dialogue a bit about that. What demand signals you're seeing on the ground that are driving this upside surprises to revenue? How much visibility you have that this momentum is going to continue, and hopefully give us the conviction that the market right now is lacking?

[Brian Morrison, CEO at Lyntris]

Yeah. Thanks, John. I appreciate the question, and I am happy to have you here with us today. I would say the business is oriented, and I think you have heard me say this before, around those missions that we believe must endure no matter what. Those national and international security priorities that have bipartisan support among national security thinkers in really meaningful and long-lasting ways. There are just some inescapable truths about our national security situation today. We are not where we should be in terms of our ability to detect and respond to, for example, air and missile threats. Regardless of what the political landscape or the market landscape looks like on any given day, this is a meaningful problem that the U.S. government has to solve, and it is a problem that is understood by policymakers inside the executive branch and the legislative branch across parties.

[Brian Morrison, CEO at Lyntris]

Matt, do you want to add anything to that?

[Matt Alty, President at Lyntris]

Yeah, I think in addition to what Brian just said, I think if you look at our core technology, John, whether it is operating over more frequency bands or operating over more power, we are seeing that applicability increase, so that is really driving additional growth. We are seeing that not only here in the U.S., but we talked about this previously, but when you look at it internationally, that desire to have European nations to have their own sovereign capabilities, particularly in space, particularly when they are operating now in contested environments where you have got to have resilient communication or data transmission plays directly into that core IP that we developed over the past few years. That is a key driver that we see continuing for the near term.

[Brian Morrison, CEO at Lyntris]

Now, you also asked about visibility, John, and a 1.5 book-to-bill in a discrete quarter when you have a record-breaking revenue is a pretty good indicator, I think, of both the durability of our demand and our visibility going forward with a backlog over $1 billion.

[John Godyn, Managing Director at Citi]

Excellent. If I could just follow up, at the end of the prepared remarks, there was some commentary about the margin outlook going forward. Can we just maybe take a second to elaborate on that and just kind of understand how you guys see the margins from here?

[Brian Morrison, CEO at Lyntris]

Yeah. In short, I continue to believe that in the medium and long term, this is a company with a two-handle on our margin rate. The question is, how rapidly will we get there? I think that we have talked about 100 basis points a year of margin improvement. I still think that's achievable, but as you saw in this quarter, we had some modest margin compression, although certainly growth in EBITDA and top line. So, we're just growing from a different point, and as I said, it will take perhaps a somewhat longer period to get there, but I continue to believe this is a two-handle business.

[John Godyn, Managing Director at Citi]

Excellent. Appreciate the clarification. Thanks.

[Brian Morrison, CEO at Lyntris]

Thanks, John.

[Operator]

Our next question comes from the line of Louie DiPalma with William Blair. Louie, your line is now open.

[Louie DiPalma, Analyst at William Blair]

Great. Brian, Matt, Tim, and Nathan, good afternoon, and congrats on your first earnings as a public company and the results. For my first question, there has been significant industry investment and a lot of excitement associated with LEO satellite communications, and you have won several contracts related to GEO and MEO satellites. You discussed the PTS-G, and I believe you have also won work for some international customers, I believe in Europe. Can you discuss why you expect GEO will continue to play a major role on the battlefield operations, and what of your IP is really a key technology here that allows you to provide these anti-jammable radio communications for satellites? Thanks.

[Matt Alty, President at Lyntris]

Yeah. Thanks for the question, Louie. I will kind of provide a couple of parts to my answer. I mean, the core of everything we do from a space perspective is our heritage. We have got over 20 years of space heritage, specifically in the GEO and the MEO orbits. As you know, those are very, very challenging orbits. You are typically fielding an asset that is of a high value that has to operate for a number of years and continue to perform as it did the day that it was launched. That heritage really gives us a seat at the table when it comes to meeting these very, very challenging mission requirements.

[Matt Alty, President at Lyntris]

To the resiliency part of your question as to why we are uniquely positioned to meet those requirements, our vertically integrated capability where we can design, build, and test gives us a unique position where we can work with our customers very, very early as they are looking to meet those mission requirements and develop and deploy solutions far faster than other suppliers in industry. That has given us an opportunity to win not only those GEO and MEO opportunities here in the U.S., but we are seeing a lot of demand right now from European nations who have woken up to the fact that they do not have guaranteed access to U.S. assets. If you look at their requirements specifically over in Europe, they are looking for assured communications that can be fielded in a contested environment and provide that connectivity regardless of that operating environment.

[Matt Alty, President at Lyntris]

We've got some very, very specific antenna IP that allows us to build complex payloads that meet those very, very specific mission requirements. In GEO, you can position one satellite to provide coverage in a very, very specific geographic region, whereas with LEO, you need these broader constellations. Just one final comment that I would add is, we do support LEO missions as well, but when you think about that initial question around where do we see growth over the next five to 10 years, we see significant demand across those more complex, difficult missions in GEO and MEO, where we have some very unique IP that allows us to differentiate ourselves versus, say, the more commoditized LEO markets.

[Louie DiPalma, Analyst at William Blair]

Thanks, Matt. For Tim, as it relates to the margin trajectory, have you been winning a significant number of R&D contracts that perhaps have a lower margin initially, and then the margin's just going to scale up as the projects move to low rate initial production and then full rate initial production? Or just as a high level, can you explain the lumpiness in the margins?

[Tim Paulin, CFO at Lyntris]

I think you captured the concept correctly, although I would adjust your initial R&D comment. It's not R&D, it is design and development, I would say. So there are earlier stage programs, there was an outside proportion of those types of programs in the quarter, which is affecting the margin, the way you're commenting. But yes, your second part of your comment I would strongly agree with. As those programs go to low rate, full rate, we expect to see margin expansion there.

[Brian Morrison, CEO at Lyntris]

Yeah. Louie, Brian here. You've hit on a core feature of the business though, which is that we do work in the early stages of a program life cycle, because that gives us access and sticky access to the latter stages of a program life cycle, where we have opportunities to add ever more of our content and do ever more for our customers, and frankly, just generate operating efficiencies in the manufacturing world. So we see those margins just naturally on many of those programs improving over time.

[Louie DiPalma, Analyst at William Blair]

Thanks, Brian, and thanks everyone.

[Brian Morrison, CEO at Lyntris]

Thanks, Louie.

[Operator]

Your next question comes from the line of Ronald Epstein with Bank of America. Ronald, your line is now open.

[Brian Morrison, CEO at Lyntris]

Hey, Ron.

[Andrew Steinhardt, Analyst at Bank of America]

Hi. Hi, this is Andrew Steinhardt on for Ronald. Thanks for taking my question.

[Brian Morrison, CEO at Lyntris]

Oh, hey, Andrew.

[Andrew Steinhardt, Analyst at Bank of America]

I was just curious to get your guys' thoughts on the capital allocation strategy going forward, given that free cash flow was strong during the quarter and year to date, but there is debt on the balance sheet, but leverage is in a healthy position. How are you guys thinking about that?

[Brian Morrison, CEO at Lyntris]

Yeah. I agree with you that I am comfortable with our leverage position where it is, and I will note, of course, that we are growing and naturally delevering. As to capital allocation, you are right to note that there is cash on the balance sheet, and the way Matt and I think about capital allocation is roughly as follows. One, we have a disciplined strategic view of technologies that we are interested in and technology areas where we want to be. So we will deploy capital to access those technology nodes either through M&A or through IRAD. That said, those are, I think, the principal ways in which we would deploy capital. I think it is also possible that we would do some opportunistic share repurchase, where we think that we are undervalued in the market.

[Brian Morrison, CEO at Lyntris]

If we have cash, we might do some share repurchase in the future after running the appropriate regulatory traps for that. I don't think that there is a possibility that we would use that excess cash to delever, because we're already delevering from growth. I don't anticipate that we would use that cash for a dividend. But aside from those exceptions, I think we're just always looking for the highest and best use of our precious cash and our shareholder capital. Matt, do you want to add anything to that?

[Matt Alty, President at Lyntris]

I think you covered it, Brian.

[Andrew Steinhardt, Analyst at Bank of America]

Got you. That's very helpful. I guess just a quick follow-up, can you talk about the Minnesota tech hub? What sort of products will actually be developed there, and why St. Paul?

[Brian Morrison, CEO at Lyntris]

Yeah. We recognized that location as a great source of talent, particularly in some emerging work we're doing in both healthcare and in radars. The healthcare part of the business is a small part of the business, but it's important. It's about cutting edge solutions for military healthcare going forward. We're also looking to put some of our radar work into that location. It's just a great source of talent, and we've had really good relationships with the Minnesota community, and that's sort of what led us there.

[Andrew Steinhardt, Analyst at Bank of America]

Thank you. I'll pass it back there.

[Brian Morrison, CEO at Lyntris]

Thanks, Andrew.

[Operator]

As a reminder, to ask a question, please press star then one on your telephone keypad. Our next question comes from the line of Peter Arment with Baird. Peter, your line is now open.

[Peter Arment, Analyst at Baird]

Thanks. Hey, good afternoon, Brian, Matt, Tim, Nathan. Nice results. Hey, Brian, both the air missile defense and space revenues were materially above, I think, street expectations. Any specific programs that you can highlight that are really driving that? I mean, LTAMDS, obviously, I know is ramping. Is that one of the key programs? Or any color there would be really helpful.

[Brian Morrison, CEO at Lyntris]

Yeah. It is not limited to any one program, Peter. You are right. It is pretty broad across the mission area. That said, you are right. LTAMDS is growing. We have an air and missile defense radar program that is in initial fielding that is growing in significant ways. In space, our space payloads business is going kind of gangbusters, and that is driving accelerated growth there.

[Peter Arment, Analyst at Baird]

Okay, got it. Just as a quick follow-up, back to kind of the margin question. It sounds like mix is the big driver here, just a lot more volume on the top line, but some of the design development work is kind of the carry. The 15.4% at the midpoint for margins for this year for adjusted EBITDA. Is that the kind of new jumping off point, or does this mix begin to evolve back to what you expected?

[Brian Morrison, CEO at Lyntris]

I think the mix will evolve back to what we have expected over time. I do not want to get into providing 2027 guidance at this moment, and I think any precision on that would be a little bit premature. That said, we are only taking work that has real strategic enduring value. If it helps us on the top line and the EBITDA dollars, but has somewhat compression effect on the margin in the short term, I think that is a trade we will make when it has strategic value. Matt, do you want to add anything?

[Matt Alty, President at Lyntris]

Yeah, the only thing that I would add, just thinking ahead over the next few quarters, a lot of the IP that we are developing are really cornerstone elements then of those future systems. We are confident as we complete the development of this kind of core IP, we will see margin benefit from it as we see kind of follow-on work on those same kind of opportunities.

[Peter Arment, Analyst at Baird]

Got it. Very clear, gentlemen. I will jump back in the queue. Thanks.

[Operator]

Your next question comes from the line of Michael Ciarmoli with Guggenheim. Michael, your line is now open.

[Michael Ciarmoli, Analyst at Guggenheim]

Hey. Good evening, guys. Thanks for taking the questions. Congrats, and nice results out of the gate here. Maybe just, we have commonly heard from investors about maybe some top line growth hesitation. You put out a pretty kind of sporty expectation for a multi-year revenue CAGR. Just in light of kind of what we have seen out of the gate, the guidance, it certainly sounds like you are not going to be short on any growth opportunities, kind of what you just said, developing more cornerstone IP. Do we think about this kind of revenue CAGR kind of accelerating? Or just maybe help us, because it seems like the growth here and the guidance is materially higher than expectations, so just trying to get a sense of how this growth environment evolves here over the coming periods.

[Brian Morrison, CEO at Lyntris]

Yeah. I appreciate the question. We will be back in early 2027 to provide 2027 guidance, but what I can tell you now is Matt and Tim and I are completely comfortable with the idea that we will grow 30% or more 2026 to 2027, which is, I think, what kind of underlies your question. Fair question, given that we blew it out of the water here in Q3, and we have got good guidance for full year, but I still feel confident in that 30%.

[Michael Ciarmoli, Analyst at Guggenheim]

Okay. That's helpful. Then maybe just back to the margin question. You kind of used that term that the space payloads are going gangbusters, and I tend to think of those larger, more sophisticated payloads carrying a little bit more risk. Is it fair to say that you've got some more conservative booking rates on those programs? Is that also a factor in the margin? As you get maybe closer to delivery or execute on milestones, we could see some management reserve release there?

[Matt Alty, President at Lyntris]

Yeah. I don't want to get into the specifics of management reserve, but what I would say is, just back to my earlier comment, when you think about those space payloads or kind of any of the key programs that we're supporting, there are key elements of the IP that we will invest into early that we are very, very confident then are applicable to future opportunities. A great example would be one of our recent acquisitions where we acquired a business that brought us motion control technology for some of the antenna that we would use in our space applications. The investment into that technology will be directly applicable to a whole range of resilient solutions that we'll field either in space or on ground applications.

[Matt Alty, President at Lyntris]

So, for sure, as we take that IP, invest into it now, and then apply it to future wins, we're very, very confident we'll see margin growth as we do that.

[Brian Morrison, CEO at Lyntris]

Yeah. I think Matt's right. I think we think of that space payload business, that space payload part of the business as a franchise. As we are developing and designing, testing technologies for today's customer, they will be applicable to the payload pipeline that we have that is robust, that will result in better margins going forward on that future work. That is not to say that we're not always looking at our management reserves and our EACs on any given project as it goes forward to get margin growth, but that just gives you a sense of how we think about it.

[Matt Alty, President at Lyntris]

Yeah, I would just kind of add to Brian's point there. I would think of this more in terms of non-recurring engineering, NRE, that we are thinking through as we kind of bid that work. We just kind of look at that and say, "Hey, we'll invest into this NRE knowing that it's going to allow us to win work in the future and not reoccur that NRE," which then drives improved margin on those future orders.

[Michael Ciarmoli, Analyst at Guggenheim]

Perfect. That's helpful. Thanks, guys.

[Operator]

Our last question comes from the line of Amit Daryanani with Evercore. Amit, your line is now open.

[Amit Daryanani, Senior Managing Director at Evercore ISI]

Perfect. I guess I'll have to ask the EBITDA margin question as well. I'll ask you both my questions at once. On EBITDA margin, if I looked at September quarter 14.7%, can you talk about how much of a headwind explicitly you folks had for these engineering costs, R&D headwinds you're talking about? I know you said 100 basis points of margin expansion is a bit of a stretch goal. Secondly, could you spend some time on talking about the levers that actually enable EBITDA margin expansion, trying to get back to the two handle over time, as you said. I think it'd be helpful to just understand what do you think in the building blocks of the EBITDA margin expansion from here? My second one on the backlog, can you talk about what's the-

[Brian Morrison, CEO at Lyntris]

Let me just pause you for a second because can I just pause you for a second? Operator, I did not hear most of that. It came through garbled. Did it come through garbled for you?

[Operator]

Yes. I was wondering if there's a possible solution for the line, for the analyst.

[Amit Daryanani, Senior Managing Director at Evercore ISI]

Let's see.

[Brian Morrison, CEO at Lyntris]

Can you try that again?

[Amit Daryanani, Senior Managing Director at Evercore ISI]

Yeah.

[Brian Morrison, CEO at Lyntris]

I think that is a little better.

[Amit Daryanani, Senior Managing Director at Evercore ISI]

Okay.

[Brian Morrison, CEO at Lyntris]

Yeah.

[Amit Daryanani, Senior Managing Director at Evercore ISI]

I was just thinking, Brian, if you just talk about EBITDA margins in September at 14.7%, how much were the engineering R&D headwinds that you folks had? If you just talk about that. Then conceptually, to get EBITDA margins to a two handle over time, what are the building blocks? I think it would just be helpful to understand what are the different stepping stones to kind of get to these higher margins over time. Then my follow-up really was just to understand the backlog. Was there any shift in duration that drove the uptick in backlog? That would be helpful as well. Thank you.

[Brian Morrison, CEO at Lyntris]

Yeah. I'll start with the last question, which is, was there any shift in duration on the backlog? There was not a meaningful change in what we think of as our weighted average period of performance. I think backlog comparisons here are fair. There's no sort of seven-year award that has dropped into the backlog and affected it in a meaningful way. Then I think the first part of your question was, what are the real levers to driving margin rates higher? I think they're as follows. One, we have talked, I think, somewhat less on this call than I might have anticipated about our really rapidly growing international business, which is somewhat more accretive from a margin perspective.

[Brian Morrison, CEO at Lyntris]

It's also true that we're signing ever more firm fixed price work, which, although it carries some modest amount of increased risk, it also carries the reward of higher margin rates. As our revenue is growing at this high rate, of course, we see operational leverage as we move forward, and we'll look for that to drive our margin rates going forward. Then finally, we're really at an inflection point, and you see it first in our space business, but there's other places where I think we'll soon be seeing it, where we're really recognizing the power and capability of the entire company on a job-over-job basis. What that means is that we're able to do more and more for the customer, and that work generates a higher margin because it's higher value for the customer. Matt, do you want to add anything to that?

[Matt Alty, President at Lyntris]

I would just build upon that last comment you made. I mean, our space payloads is a great example of that, where we've moved from individual antenna solutions to now integrated antennas that kind of are built for a very, very specific mission requirement. Now we're taking that and building that into an integrated payload. That obviously comes with both revenue and margin benefit as we move up that value chain to a higher level assembly.

[Operator]

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

[Brian Morrison, CEO at Lyntris]

Thank you all.

Participants

Executives

• Nathan Rutledge, SVP and Head of Investor Relations
• Brian Morrison, CEO
• Tim Paulin, CFO
• Matt Alty, President

Analysts

• John Godyn, Managing Director at Citi
• Louie DiPalma, Analyst at William Blair
• Andrew Steinhardt, Analyst at Bank of America
• Peter Arment, Analyst at Baird
• Michael Ciarmoli, Analyst at Guggenheim
• Amit Daryanani, Senior Managing Director at Evercore ISI