Summary of AADX Q2 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: $167.3 million, up 47.4% year-over-year; pro forma growth of 21.3% when including CBI's prior year revenue.

Adjusted EBITDA: $36.4 million, reflecting a 38.4% increase; adjusted EBITDA margin at 21.8%, down from 23.2% year-over-year.

Net Loss: $154 million, primarily due to $110 million in share-based compensation from the IPO and increased interest expenses.

Contract Backlog: Grew to a record $1.1 billion, up from $871 million at year-end, providing strong visibility for future revenue.

Net Debt: Reduced to $387.7 million, with a pro forma net leverage of 2.7x.

2Strategic Updates and Business Highlights

IPO Impact: The successful IPO strengthened the balance sheet and provided resources for growth investments.

Market Focus: AADX operates in three core markets: Space and Launch Systems (23% of revenue), Defense Aviation and Airborne Systems (47%), and C5ISR & Precision Strike Systems (30%).

Operational Capabilities: Emphasis on integrated capabilities and a diverse customer base, with a focus on high-performance materials and advanced manufacturing processes.

M&A Activity: Ongoing evaluation of potential acquisitions to enhance capabilities, with synergies from the CBI acquisition being realized.

3Forward Guidance and Outlook

2026 Revenue Guidance: Expected between $670 million and $690 million, with a strong backlog supporting growth.

Adjusted EBITDA Guidance: Projected between $150 million and $155 million for the full year.

Second Half Expectations: Anticipated revenue growth in the second half, with the fourth quarter expected to be the strongest.

4Bad News, Challenges, or Points of Concern

Margin Compression: Initial margin compression due to early-stage program ramp-ups, with expectations for improvement as programs mature.

Cash Flow: Net cash used in operating activities was $82.1 million in the first half, primarily due to IPO-related costs and working capital build, although positive free cash flow is projected for the second half.

Supply Chain Risks: Ongoing supply chain congestion and raw material inflation, particularly in aluminum, are being monitored closely.

5Notable Q&A Insights

Backlog Conversion: Management indicated that about half of the backlog is expected to convert to revenue in 2027, with strong visibility across all end markets.

Working Capital Investments: Investments are being made to support growth, with a focus on capital expenditures of approximately $50 million for the year.

Funding Landscape: The company is somewhat insulated from potential impacts of continuing resolutions in government funding due to its diversified portfolio and long-term contracts.

New Business Opportunities: AADX is actively pursuing multiyear agreements and partnerships with both established primes and new entrants in the defense and space sectors. Overall, AADX demonstrated strong growth in Q2 2026, supported by a solid backlog and strategic investments, while also facing challenges related to margin compression and supply chain dynamics. The outlook remains positive, with expectations for continued revenue growth and operational improvements in the second half of the year.