Karman Holdings Inc. Reports Record Earnings and Growth

Karman Holdings Inc. ((KRMN)) has held its Q3 earnings call. Read on for the main highlights of the call.

Karman Holdings Inc.’s recent earnings call painted a picture of optimism and robust performance. The company reported record-breaking revenue and growth, with strategic acquisitions and increased backlog contributing to a positive outlook. Despite some concerns about potential impacts from the federal government shutdown and dual sourcing risks, the overall sentiment remains positive, driven by strong market demand and strategic growth initiatives.

Record-Breaking Revenue and Growth

Karman Space & Defense achieved a record quarterly revenue of $122 million, marking a 42% increase compared to the third quarter of fiscal year 2024. The gross profit saw a 48% rise to $50 million, and adjusted EBITDA reached a new quarterly high of $38 million. These figures underscore the company’s strong financial performance and growth trajectory.

Increased Backlog and Strategic Acquisitions

The company’s funded backlog reached an unprecedented $758 million, providing full visibility to the midpoint of the full-year revenue guidance. Karman also completed a significant $1.2 billion secondary equity offering and acquired Five Axis Industries, which expands its capabilities with intellectual property-rich content for the commercial space industry.

Guidance Raised for Fiscal Year 2025

Karman Space & Defense has raised its 2025 guidance, increasing revenue expectations by $7 million at the midpoint to a range of $461 million to $463 million. Adjusted EBITDA is also expected to rise by $2.5 million, reaching between $142 million to $143 million, reflecting confidence in continued growth.

Strong Market Demand Across End Markets

Revenue growth was reported across all three end markets: Hypersonics and Strategic Missile Defense saw a 36% increase, Space and Launch grew by 47%, and Tactical Missiles and Integrated Defense Systems experienced a 42% rise. This broad-based growth highlights the robust demand for Karman’s offerings.

Positive Outlook for Future Growth

Looking ahead, Karman anticipates annual growth consistent with its recent revenue CAGR of 20% to 25% for 2026, excluding future acquisitions. This outlook underscores the company’s confidence in sustaining its growth momentum.

Federal Government Shutdown Uncertainty

While the federal government shutdown has not yet impacted the 2025 guidance, there is uncertainty regarding its potential effects on future bookings and 2026 operations. This remains a watchpoint for the company moving forward.

Potential Risks of Dual Sourcing

Market concerns about potential dual sourcing by customers could impact Karman’s revenue ramp across missiles and other programs. The company is aware of these risks and is likely to strategize accordingly.

Forward-Looking Guidance

During the earnings call, Karman Space & Defense reported a record quarterly revenue of $122 million, driven by growth across all end markets. The company increased its full-year guidance for 2025, projecting revenue between $461 million to $463 million and adjusted EBITDA of $142 million to $143 million. The funded backlog provides a strong foundation for 2026, with anticipated annual growth consistent with recent revenue CAGR of 20% to 25%.

In summary, Karman Holdings Inc.’s earnings call highlighted a period of strong performance and strategic growth. The company reported record-breaking revenue and increased guidance for fiscal year 2025, driven by robust demand across its end markets. While there are some concerns about potential risks, the overall sentiment remains positive, with a strong outlook for future growth.