Applied Aerospace & Defense (NYSE:AADX) Releases Quarterly Earnings Results, Misses Expectations By $0.26 EPS

Key Points

• Quarterly earnings missed expectations: Applied Aerospace & Defense reported a loss of $0.25 per share, $0.26 below the consensus estimate of $0.01.
• Growth and backlog remain strong: Second-quarter revenue increased 47.4% year over year to $167.3 million, adjusted EBITDA rose 38.4% to $36.4 million, and backlog exceeded $1.1 billion. Management reaffirmed its 2026 revenue and adjusted EBITDA guidance.
• Financial position improved, but pressures persist: IPO proceeds enabled $626.2 million of debt repayment, while early-stage program costs, working-capital investment, supply-chain congestion and inflation weighed on margins and first-half cash flow.

Applied Aerospace & Defense (NYSE:AADX - Get Free Report) announced its quarterly earnings results on Wednesday. The company reported ($0.25) earnings per share for the quarter, missing the consensus estimate of $0.01 by ($0.26), Zacks reports.

Here are the key takeaways from Applied Aerospace & Defense's conference call:

• Record growth and backlog: Second-quarter revenue rose 47.4% year over year to $167.3 million, while adjusted EBITDA increased 38.4% to $36.4 million. Contract backlog reached a record above $1.1 billion, providing visibility through 2026 and into 2027.
• Strong outlook maintained: Management reaffirmed 2026 guidance of $670 million–$690 million in revenue and $150 million–$155 million in adjusted EBITDA, with revenue expected to build through the year and the fourth quarter projected to be the largest.
• Balance sheet strengthened by IPO: The offering generated $635.7 million in net proceeds, enabling debt repayment of $626.2 million and reducing pro forma net leverage to approximately 2.7x. The company also expects to generate positive free cash flow in the second half.
• Near-term margin and cash-flow pressures remain: Gross margin was affected by the ramp-up of early-stage programs and learning-curve costs, while first-half operating cash flow was negative $82.1 million due to IPO and acquisition costs and a $36 million working-capital build. Supply-chain congestion and raw-material inflation are additional risks, though management expects margin improvement as programs mature.
• Demand momentum spans key markets: Management cited continued strength in commercial space, defense aviation aftermarket activity, collaborative combat aircraft, precision strike, and solid rocket motor cases, alongside an active M&A pipeline and opportunities with both major defense primes and newer entrants.

Applied Aerospace & Defense Stock Performance

Shares of AADX stock traded down $1.26 during trading hours on Wednesday, hitting $19.33. 1,304,213 shares of the company's stock were exchanged, compared to its average volume of 1,332,396. Applied Aerospace & Defense has a 12-month low of $16.57 and a 12-month high of $24.24. The stock has a 50 day simple moving average of $19.76.

Insider Activity

In other Applied Aerospace & Defense news, Director James C. Katzman bought 25,000 shares of Applied Aerospace & Defense stock in a transaction that occurred on Thursday, June 4th. The shares were bought at an average price of $20.00 per share, with a total value of $500,000.00. Following the acquisition, the director owned 29,250 shares in the company, valued at approximately $585,000. This trade represents a 588.24% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Susan D. Lynch bought 8,000 shares of the firm's stock in a transaction that occurred on Thursday, June 4th. The stock was acquired at an average price of $20.00 per share, for a total transaction of $160,000.00. Following the transaction, the director owned 8,000 shares in the company, valued at $160,000. This trade represents a ∞ increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. In the last 90 days, insiders acquired 58,500 shares of company stock valued at $1,170,000.

Analysts Set New Price Targets

AADX has been the topic of a number of recent analyst reports. Jefferies Financial Group upgraded Applied Aerospace & Defense to a "strong-buy" rating in a research report on Monday, June 29th. Zacks Research raised Applied Aerospace & Defense to a "hold" rating in a report on Tuesday, June 30th. Morgan Stanley initiated coverage on Applied Aerospace & Defense in a research report on Monday, June 29th. They set an "equal weight" rating and a $23.00 price target for the company. Royal Bank Of Canada initiated coverage on shares of Applied Aerospace & Defense in a research report on Monday, June 29th. They issued a "moderate buy" rating and a $24.00 price objective on the stock. Finally, Wolfe Research initiated coverage on shares of Applied Aerospace & Defense in a research note on Monday, June 29th. They issued an "outperform" rating and a $23.00 target price on the stock. One equities research analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating and two have issued a Hold rating to the company. According to data from MarketBeat, the company has an average rating of "Moderate Buy" and an average price target of $24.62.

Applied Aerospace & Defense Company Profile

Applied Aerospace and Defense Inc specializes in providing advanced design, engineering and vertically integrated manufacturing solutions for next-generation space and defense technology companies. Its core service offerings include design and analysis, fabrication and assembly and inspection, qualification and testing. Applied Aerospace and Defense Inc is based in HUNTSVILLE, United States.

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