Lyntris Q3 Earnings Call Highlights

Key Points

• Revenue surged 90% to $194 million, driven by air and missile defense and space programs; the backlog topped $1 billion, with a 1.5 book-to-bill ratio.
• Lyntris forecast fiscal 2026 revenue of $623 million to $630 million, but said increased early-stage engineering work may delay margin expansion. Management still sees a path to adjusted EBITDA margins in the 20% range over the medium to long term.
• Quarterly free cash flow was $79 million, and net leverage fell to 1.2 times from 4.2 times at the fiscal year’s start. The company said potential uses of capital include acquisitions, R&D and opportunistic share repurchases.

Lyntris NYSE: LYNX reported a 90% increase in fiscal third-quarter revenue as demand for air and missile defense systems and satellite payloads helped push its backlog above $1 billion. Executives said the growth came with a greater share of early-stage engineering work, which could slow the pace of margin expansion.

Revenue rose to $194 million in the quarter, including 89% organic growth. Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, increased 91% to $28.5 million, with a margin of 14.7%.

The company reported a net loss of $5 million, or $0.04 per share, compared with a loss of $3.5 million, or $0.03 per share, a year earlier. Adjusted net income rose to $17 million, or $0.15 per share, from $1.7 million, or $0.02 per share.

Chief Executive Officer Brian Morrison said the results exceeded the company’s expectations. He pointed to orders that exceeded revenue and a backlog of just over $1 billion, up about $100 million from the prior quarter and 113% from the end of fiscal 2025. The quarterly book-to-bill ratio was 1.5.

Defense and Space Programs Drive Growth

Air and missile defense revenue increased 154% to $83 million, helped by accelerated work on a major radar program supporting initial fielding and low-rate production. Revenue from space intelligence, surveillance and reconnaissance and resilient communications grew 108% to $57 million. Maritime domain awareness revenue rose 29% to $54 million.

Morrison said growth was spread across programs, though he identified increasing activity on the Lower Tier Air and Missile Defense Sensor, or LTAMDS, and a separate air and missile defense radar program in initial fielding. He also cited strong growth in the space payloads business.

President Matt Alty said Lyntris announced production orders in September under a long-term purchase agreement with Raytheon for LTAMDS, supporting demand through 2028. Lyntris supplies thermal management assemblies for the radar’s electronics.

Alty also highlighted the company’s selection as prime payload integrator for the U.S. Space Force’s Protected Tactical Satellite Communications–Global program, known as PTS-G. The work expands Lyntris’ role from integrated antenna solutions to integrated satellite payloads, he said.

International customers accounted for nearly a quarter of backlog, compared with a historical share of about 15% of revenue, Morrison said. Alty cited demand from European nations for sovereign space communications capabilities that can operate in contested environments.

Margin Expansion May Take Longer

Lyntris expects fiscal 2026 revenue of $623 million to $630 million, representing approximately 61% growth at the midpoint. It forecast adjusted EBITDA of $95.5 million to $97 million, or roughly 54% growth.

Morrison said more design and initial deployment work than anticipated means adjusted EBITDA margin expansion will take somewhat longer than initially expected, even as that work adds revenue and EBITDA dollars. Chief Financial Officer Tim Paulin said early-stage design and development programs represented an outsized proportion of activity in the quarter.

Executives said margins could improve as programs advance into production and Lyntris reuses technology developed for earlier work. Morrison also cited international business, a greater share of firm fixed-price contracts, operating leverage and broader integrated solutions as potential sources of margin improvement.

Morrison said he continues to believe Lyntris can achieve an adjusted EBITDA margin in the 20% range over the medium to long term. He said annual improvement of 100 basis points remains achievable, but the company is starting from a different point than previously expected.

Asked about future revenue growth, Morrison declined to provide detailed 2027 guidance but said management was “completely comfortable” with growth of 30% or more from 2026 to 2027.

Cash Flow and Capital Allocation

Operating activities generated approximately $84 million in the quarter. After $5 million in capital spending, free cash flow was $79 million, excluding IPO proceeds. Paulin said earnings and favorable customer payments supported cash generation, while noting that cash flow will vary with the timing of receipts and program spending.

Lyntris ended the quarter with $88 million in cash and $198 million in debt. Net leverage fell to 1.2 times from 4.2 times at the beginning of the fiscal year. The company used about $60 million of proceeds from its August initial public offering to repay debt and had no balance outstanding on its revolving credit facility.

Morrison said potential capital uses include acquisitions and internal research and development, with opportunistic share repurchases also possible. He said he did not anticipate using excess cash for a dividend or further debt reduction, noting that growth is reducing leverage.

About Lyntris (NYSE:LYNX)

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

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