DPC Q2 Earnings Call Highlights

Key Points

• DPC reported record second-quarter results, with revenue up 34% year over year to $269 million and adjusted EBITDA up 33% to $48 million. Engine Products led growth, supported by strong aerospace and industrial gas turbine demand, capacity investments and pricing.
• Metal-cost inflation, particularly for hafnium, increased revenue by about four percentage points but did not affect adjusted EBITDA. DPC expects its full-year adjusted EBITDA margin, excluding the mathematical impact of pass-through costs, to be around 19%.
• DPC initiated 2026 guidance for $1.0 billion-$1.04 billion in revenue and $182 million-$187 million in adjusted EBITDA. Four strategic partnerships are expected to generate more than $200 million in annual revenue at full production by 2029, while the company prioritizes capacity expansion and other organic investments.

DPC NYSE: DPC Holdings reported record second-quarter revenue and adjusted EBITDA in its first earnings release as a public company, citing strong demand across aerospace and industrial gas turbine, or IGT, markets, higher production capacity and value-based pricing.

For the quarter ended June 28, 2026, revenue rose 34% year over year to $269 million, while adjusted EBITDA increased 33% to $48 million. Adjusted EBITDA margin was 17.8%, broadly flat from the prior-year period and ahead of the first quarter, the company said.

Chief Executive Officer Mike Quinn said the results were ahead of expectations and reflected continued profitable growth following the company’s listing. “We’re continuing to deliver record profitable growth,” Quinn said during the earnings call.

Engine Products Drives Growth

DPC’s Engine Products operations were the principal source of quarterly growth. Combined Engine Products revenue increased 39%, while segment EBITDA rose 53%. The segment’s EBITDA margin expanded 210 basis points to 23.5%, including the effect of metal-cost inflation.

In Europe, gross segment revenue increased 49%, driven primarily by demand in IGT, which represents about 75% of the division’s revenue. EBITDA increased 54%, and margin rose 80 basis points to 24.2%.

In North America, gross segment revenue rose 29% to $97 million. Aerospace accounts for 88% of that division’s revenue, and the company attributed the growth to increased output following capacity investments. EBITDA margin expanded 340 basis points to 22.6%.

Company-wide aerospace revenue grew 47% in the quarter, supported by demand for engine structural castings and components. IGT revenue increased 42%, reflecting electricity-demand growth and the role of gas turbines in supporting grid reliability and renewable-energy integration. Transportation revenue was flat.

The Turbo Wheels business, which accounted for 19% of revenue and 3% of EBITDA, reported a 2% increase in gross segment revenue. Excluding Ivostud, a business DPC said it is marketing for sale, revenue increased 8% on market-share gains and favorable mix. Adjusted EBITDA for the division fell to $2 million, largely because of Ivostud’s performance.

Metal Inflation Affects Reported Margin, Not EBITDA

Management said metal cost inflation added approximately four percentage points to second-quarter revenue, as higher commodity costs were passed through to customers under long-term agreements and spot pricing arrangements. The added revenue was offset by higher cost of goods sold, leaving adjusted EBITDA unchanged but reducing reported EBITDA margin by 60 basis points.

Quinn identified hafnium as the principal source of recent inflation pressure. He said the metal’s price had risen from roughly $5,000 per kilogram in November to between $12,500 and $13,000 per kilogram. Hafnium is used largely in DPC’s IGT operations.

Chief Financial Officer David Egan said the company expects the full-year adjusted EBITDA margin, excluding the year-over-year impact of metal pass-through, to be around 19%. The company’s reported margin will continue to reflect the dilutive mathematical effect of higher pass-through revenue, despite no underlying EBITDA impact.

Partnerships and Capacity Expansion

During the quarter, DPC signed its fourth strategic customer partnership, this time with an aerospace original equipment manufacturer. The agreement includes long-term arrangements covering existing castings and superalloys, along with volume commitments supporting construction of a new superalloy facility in Alabama.

DPC now has four strategic partnerships—two with aerospace OEMs and two with IGT OEMs. The agreements have LTA durations ranging from five to 15 years and are margin-accretive, according to management. They may include customer capital contributions or capacity-reservation payments.

The company estimates the four partnerships will generate more than $200 million in annual revenue at full production rates in 2029. Egan said a small contribution is expected in 2027, followed by a larger contribution in 2028 and full run-rate production in the second half of 2029.

Quinn said the company aims to add approximately one major strategic partnership annually, although the timing depends on contract negotiations and the company’s capacity to implement projects.

DPC continues to invest in facilities across the U.S., Mexico, the U.K. and Germany. Its new aerospace blades-and-vanes equipment in Oxford is expected to begin contributing revenue in 2027, with greater production in 2028 and full-rate output in 2029. The company also expects its Mexicali operation to become a fully developed aerospace business in 2027 after it installs heat-treatment capability and completes NADCAP certification.

Full-Year Outlook and Capital Priorities

DPC initiated full-year 2026 guidance for revenue of $1.0 billion to $1.04 billion and adjusted EBITDA of $182 million to $187 million. The revenue outlook includes metal-cost inflation pass-through, while the EBITDA outlook does not reflect an impact from those pass-throughs.

The company ended the quarter with transaction-adjusted net cash of $118 million following IPO and private-placement proceeds. Egan said DPC plans to prioritize organic investment, including capacity expansion, capital expenditures and working capital needed to support growth.

Management also said it may pursue bolt-on acquisitions, particularly businesses with annual revenue of roughly $50 million to $100 million or assets that strengthen its supply chain. Quinn cited tooling as one area where additional vertical integration could be considered.

While the company expects cash use to remain elevated through its current growth phase, including higher capital expenditures in 2027, Egan said DPC sees potential for stronger cash generation as investments mature and operations move into a more normalized phase.

About DPC (NYSE:DPC)

DPC Holdings is a manufacturer of engineered engine products which include complex precision cast components and nickel- and cobalt-based superalloys primarily serving Aerospace and IGT end markets. DPC Holdings is based in United Kingdom.

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