Applied Aerospace & Defense (AADX) Q2 2026 Earnings Report

The call highlights strong operational momentum: record revenue, record adjusted EBITDA, meaningful backlog growth (> $1.1B), a strengthened balance sheet following the IPO and clear full-year guidance. Offsetting these positives are significant non-recurring GAAP charges (primarily accelerated share‑based compensation) driving a large GAAP net loss, near-term cash use from working capital and ongoing supply-chain/raw-material monitoring. Management communicated confidence that many adverse items are transitory and that margins and cash flow should improve in H2 and into 2027.

Applied guided to full‑year 2026 revenue of $670–$690 million and non‑GAAP adjusted EBITDA of $150–$155 million, expecting revenue to build through the year with Q4 as the largest quarter and positive free cash flow in 2H; Q2 results included revenue of $167.3M (up 47.4% YoY; pro forma +21.3%), adjusted EBITDA $36.4M (21.8% margin), consolidated gross margin 22.2% (≈6ppt drag from accelerated share‑based comp), net loss $154M (incl. $110M share‑based comp), backlog >$1.1B (from $871M at year‑end) with roughly half the backlog expected to convert in 2027, pro‑forma net leverage ~2.7x, total debt $405.8M (down from $643.4M), net debt $387.7M, cash $18.1M and $125M revolver availability; 2026 capex expected ≈$50M ( $21M YTD), first‑half operating cash use $82.1M (including ~$36M working‑capital build), and an anticipated full‑year effective tax rate of ~7% (GAAP, non‑pro forma basis).