Record Annual Revenue and Growth
Fiscal 2026 revenue reached a record $245.0M, up 17% year-over-year. Management cites disciplined execution and diversified end markets as drivers of the increase.
Graham
· GHM
June 8th, 2026
Summary
- Earnings Call Date:
- 2026-06-08
- Change Since:
- +20.96%
- Next Earnings Date:
- 2026-08-11
Earnings Call Sentiment
PositiveThe call presented strong commercial momentum and several record metrics (revenue, orders, backlog) alongside meaningful strategic investments and acquisitions that expand capabilities and liquidity. Management provided confident FY2027 guidance with substantial top-line and EBITDA growth expected. Offsetting these positives were margin pressure in the quarter due to product mix, one-time acquisition accounting impacts, higher SG&A from integration/investment activity, and lumpy cash flow/working capital dynamics. Overall, the positive operational and financial momentum and strong backlog outweigh near-term margin and integration headwinds.
Company Guidance
Graham guided fiscal 2027 to revenue of $285–$295 million (about 18% growth at the midpoint) and adjusted EBITDA of $35–$40 million (≈44% growth at the midpoint versus FY26’s $26M), with gross margin targeted at 24.5–25.5% and SG&A expected to be 16.5–17.5% of sales (which includes roughly $2.5M of incremental people/technology/commercialization investments and $4–$5M of equity‑based comp, acquisition/integration and ERP conversion costs); they expect a fiscal 2027 effective tax rate of 18–20% and capital expenditures of $18–$22M (≈7% of revenue) including a new 30,000 sq ft Arvada facility, while noting FlackTek’s current ~10% adjusted EBITDA margin should improve as revenue scales. Guidance is supported by a record $533M backlog (up 29% YoY) with ~35–40% expected to convert to revenue in the next 12 months, record FY26 orders of $359M and a 1.5x book‑to‑bill, and a strong liquidity position (over $100M available after a $50M strategic investment from T. Rowe Price and use of the $80M revolver); prior‑year investments were made with a >20% ROIC hurdle and are expected to drive operating leverage and margin expansion as volume grows.
Record Orders, Backlog and Strong Book-to-Bill
Orders were a record $359M for the year (book-to-bill 1.5x). Backlog finished at a record $533M, up 29% year-over-year, with ~35%–40% of backlog expected to convert to revenue in the next 12 months, providing strong near-term revenue visibility.
Segment Momentum — Defense and Space
Defense revenue grew 21% year-over-year and remains a major driver of backlog; Space showed strong momentum with Q4 space revenue up 14% and space orders up 132% year-over-year, reflecting transitions from development to production and multiple customer wins.
Profitability and Adjusted Results
Full-year adjusted EBITDA increased 16% to $26.0M with adjusted EBITDA margin of 10.6% (in line with prior year). Adjusted net income rose 14% to $15.6M ($1.40 per diluted share) versus $1.24 prior-year adjusted EPS.
Strategic Acquisitions and Investments
Completed acquisitions of Xdot and FlackTek (FlackTek contributed $2.8M of Q4 sales). Investments completed or underway include Batavia Navy facility, automated welding, X-ray inspection, cryogenic test facilities (Jupiter and Arvada), and ERP upgrade; these expand capacity, capabilities and long-term competitiveness.
Strong Balance Sheet and Liquidity
Operating cash flow of $15.9M and net capex $15.8M for the year. Subsequent to year-end, received a $50M strategic investment (T. Rowe Price accounts), used ~$13M to repay debt, and combined with revolver have over $100M available liquidity to support organic and inorganic growth.
Confident Guidance for Fiscal 2027
Management guided FY2027 revenue of $285M–$295M (midpoint ~18% growth) and adjusted EBITDA $35M–$40M (midpoint ~44% growth vs FY2026), with gross margin expected to improve to 24.5%–25.5% and capex guidance of $18M–$22M.
Operator
Good evening and welcome to Graham Corporation Fiscal 4Q '26 Earnings Call. [Operator Instructions]. It is now my pleasure to introduce your host, Tom Cook of Investor Relations. Thank you. You may begin.
Tom Cook
Thank you, Shamali, and good morning, everyone. Welcome to Graham's Fiscal Fourth Quarter and Full Year 2026 Earnings Call. With me on the call today is Matt Malone, President and CEO, and Chris Thome, Chief Financial Officer. This morning, we released our financial results. Our earnings release and accompanying presentation for today's call are available on our website at ir.grahamcorp.com. You should be aware that we may make forward-looking statements during the formal discussion as well as during the Q&A session. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated here today. These risks and uncertainties and other factors are provided in the earnings release as well as with other documents that are filed by the company with the Securities and Exchange Commission.
You can find these documents on our website or at sec.gov. During today's call, we will also discuss non-GAAP financial measures. We believe these will be useful in evaluating our performance. However, you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and s...
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