HUNTSVILLE, Alabama, August 12, 2026, 07:31 EDT — U.S. markets remain closed for regular session, while premarket deals are underway.
- Revenue for the second quarter climbed 47.4%, reaching a record high of $167.3 million.
- Backlog totaled $1.13 billion, equivalent to 1.66 times the midpoint of 2026 revenue.
- The midpoint of the guidance implies a 25.4% increase in quarterly revenue for the second half compared to the first half’s rate.
Applied Aerospace & Defense NYSE:AADX on Wednesday announced its backlog reached $1.13 billion. The sizable order book highlights a large pipeline. Turning these orders into revenue is now critical for the share price.
The company, which recently went public, projected 2026 revenue between $670 million and $690 million. The midpoint, $680 million, suggests sales of $378.3 million in the second half. This figure is 25.4% higher than the average quarterly pace in the first half.
Revenue for the second quarter climbed 47.4% to $167.3 million. Organic growth accounted for 19.8%. Based on company data, acquisitions contributed 58.2% of the total dollar rise. This composition is important in terms of execution and integration risks.
| Q2 measure | 2026 | 2025 | Change |
|---|---|---|---|
| Revenue | $167.3 million | $113.5 million | up 47.4% |
| Adjusted EBITDA | $36.4 million | $26.3 million | up 38.5% |
| Adjusted EBITDA margin | 21.8% | 23.2% | down 1.4 points |
| GAAP net loss | $154.0 million | $4.7 million | Loss increased |
| Share-based compensation | $110.1 million | $0.8 million | gain of $109.3 million |
Adjusted EBITDA increased at a slower pace than revenue. The margin declined by 1.4 percentage points to 21.8%. The company left out $110.1 million in share-based compensation from adjusted EBITDA.
Precision-strike operations drove the most significant business change. Sales in C5ISR and Precision Strike almost increased fourfold. Defense aviation remained the biggest segment, rising by just 4.8%.
| End market | Q2 2026 revenue | Q2 2025 revenue | Growth |
|---|---|---|---|
| Space and Launch Systems | $38.8 million | $24.5 million | up 58.5% |
| Defense Aviation and Airborne Systems | $78.9 million | $75.3 million | up 4.8% |
| C5ISR and Precision Strike Systems | $49.6 million | $13.7 million | up 261.6% |
| Total | $167.3 million | $113.5 million | up 47.4% |
The midpoint is not guaranteed. Applied requires an average of $189.2 million in quarterly revenue through December, which stands 13.1% higher than its record second quarter.
| 2026 conversion test | Amount | Investor reading |
|---|---|---|
| Revenue forecast, full-year | $670 million-$690 million | $680 million midpoint |
| Revenue in first half | $301.7 million | $150.8 million quarterly average |
| Revenue target for second half | $378.3 million | $189.2 million average per quarter |
| Needed growth rate | 25.4% | Compared to first-half quarterly level |
| Backlog as share of revenue guide midpoint | 1.66 times | Backlog gives visibility but not yet revenue |
The June IPO altered the company’s balance sheet. Applied secured $635.6 million in net primary proceeds. By quarter-end, total debt had decreased to around $400.5 million. Net debt was down about 38% compared to December. The number of shares outstanding rose 32.9%.
The stock closed at $20.59 on Tuesday, putting its market value at approximately $3.55 billion. When quarter-end net debt is included, the resulting enterprise value is close to $3.93 billion. This figure represents about 25.8 times the midpoint of 2026 adjusted EBITDA. The estimate is initial and relies on reported quarter-end debt figures.
Wall Street was optimistic ahead of the report. Six out of seven analysts had a Buy rating on the stock, with none assigning a Sell. Most of those targets were set prior to Wednesday’s results. Updates will reveal if the backlog compensates for concerns around margins and integration.
| Analyst | Recommendation | Price target |
|---|---|---|
| Baird | Outperform | $30 |
| BofA Securities NYSE:BAC | Buy | $24 |
| Morgan Stanley NYSE:MS | Equal-weight | $23 |
| RBC Capital Markets (TSE:RY) | Outperform | $24 |
| Stifel NYSE:SF | Buy | $24 |
| Wolfe Research | Outperform | $23 |
| Seven-analyst consensus | 6 Buy / 1 Hold / 0 Sell | $25.14 average |
Chief Executive Trip Ferguson stated, “The IPO meaningfully strengthened our balance sheet and enhanced our financial flexibility.” The company maintained its full-year forecast, matching Wall Street expectations. Company statement
Barron’s reported the stock ended Tuesday 4.3% lower at $20.59. The results were released at 06:30 EDT. With early premarket trading thin, initial moves in the regular session could be more indicative.
Risks: Most of the reported revenue growth stemmed from acquisitions. Factors such as customer concentration, contract delays, shifts in defense budgets, and integration expenses may hinder future conversion. The IPO resulted in a larger share count for public investors.
Investors now await specifics on the backlog schedule and the rate of organic growth. Applied’s conference call is set to begin at 08:30 EDT. The main issue remains: what portion of orders will be recognized as revenue within the current year?
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