Karman shares jump 42.5% after raising 2026 forecast

Karman Space & Defense (KRMN), which supplies capabilities to more than 150 customers, reported third-quarter results that topped profit estimates and raised its fiscal 2026 forecast. Revenue grew 65.6% from a year earlier.

Shares rose 42.5% at 3:59 p.m. ET, from a $32.09 close.

Here's how the company did:

• Revenue: $201.62 million vs. $121.79 million a year earlier, above the $198.59 million consensus estimate
• Adjusted EPS: 19 cents vs. 10 cents a year earlier, topping the 16-cent consensus estimate
• GAAP diluted EPS: 16 cents vs. 6 cents a year earlier
• Net income: $20.91 million vs. $7.64 million a year earlier
• Adjusted EBITDA: $60.51 million vs. $37.73 million a year earlier, a 30.0% margin

Revenue has risen in each of the last three quarters, from $121.8 million in the third quarter of 2025 to $182.1 million in the second quarter of 2026.

Raised 2026 guidance

The company raised its fiscal 2026 revenue forecast to $755 million to $760 million, from the $730 million to $745 million range it gave on Aug. 6. It raised its adjusted EBITDA forecast to $225 million to $227 million, from $215.0 million to $222.5 million. The forecasts exclude future acquisitions.

Chief Executive Officer Jon Rambeau said the company is focused on building backlog for 2027 and beyond while supporting its long-term organic revenue growth target of 20% to 25%.

Segment results

Hypersonics and Strategic Missile Defense revenue rose 39.6% to $51.10 million, driven by higher production of key interceptor programs and a new surface-to-surface missile system. Tactical Missiles and Integrated Defense Systems revenue rose 51.9% to $67.58 million, on core production programs including unmanned aircraft systems and counter-UAS.

Space and Launch revenue fell 6.9% to $37.91 million, reflecting customer order timing tied to shifting launch schedules. Maritime Defense Systems contributed $45.04 million, mainly from legacy and next-generation submarine and surface vessel programs.

Backlog and bookings

Backlog reached a record $1.7 billion at quarter-end, up 108% from the end of fiscal 2025. Bookings were nearly $465 million, including a seven-year Lockheed Martin contract supporting the THAAD program.

The company is negotiating two additional long-term agreements, executing the initial phases of two second-source opportunities, and pursuing three more.

Acquisitions, cash and costs

The company completed its acquisition of Walker Precision Holdings Limited, expanding its presence in the European defense market.

Net cash from operating activities was $26.73 million, and free cash flow was $13.37 million after $13.36 million of property and equipment purchases.

General and administrative expenses rose to $41.52 million from $20.00 million a year earlier. Interest expense, net, was $18.00 million, up from $10.00 million.

Chris Boynton is chief financial officer, and Mike Willis is departing from that role.