Applied Aerospace & Defense Reports 47.4% Revenue Growth but $154M Net Loss in Q2 2026

Applied Aerospace & Defense, Inc. reported significant financial results for the second quarter of 2026, with total revenue reaching $167.3 million, a 47.4% increase from $113.5 million in the same period last year. For the first half of 2026, revenue totaled $301.7 million, up 34.4% from $224.5 million in the first half of 2025. The growth was driven by increased demand across all core markets, particularly in Space and Launch Systems, which saw a revenue increase of 58.5%, and C5ISR and Precision Strike Systems, which experienced a remarkable 261.6% growth. The company attributed approximately $31.3 million of the quarterly revenue increase to contributions from acquisitions completed in 2026.

Despite the revenue growth, Applied Aerospace & Defense reported a net loss of $154.0 million for the second quarter, compared to a loss of $4.7 million in the prior year. The loss for the first half of 2026 was $169.1 million, significantly higher than the $12.0 million loss recorded in the first half of 2025. The increase in losses was primarily due to a substantial rise in selling, general, and administrative expenses, which surged to $123.3 million from $11.6 million in the previous year, largely driven by share-based compensation expenses related to the company's initial public offering (IPO) and costs associated with recent acquisitions.

The company completed several strategic acquisitions in early 2026, including Vestigo Aerospace, Consolidated Boring Inc., and Ultracor, which collectively enhanced its capabilities in advanced manufacturing and space technology. The acquisitions contributed to a significant increase in goodwill, which rose to $581.4 million as of June 30, 2026, from $342.5 million at the end of 2025. The total assets of the company also increased to $1.5 billion, up from $999.3 million at the end of the previous fiscal year, reflecting the impact of these acquisitions.

Operationally, Applied Aerospace & Defense reported a contract backlog of $1.13 billion as of June 30, 2026, an increase from $870 million at the end of 2025. This growth was driven by new orders and the backlog generated from the recent acquisitions. The company also noted a significant increase in its employee headcount, which is essential for supporting its expanded operations and production capabilities. The company’s cash and cash equivalents stood at $18.1 million, up from $15.5 million at the end of 2025, bolstered by net proceeds of approximately $635.6 million from its IPO.

Looking ahead, Applied Aerospace & Defense anticipates continued growth driven by increasing demand in the aerospace and defense sectors, particularly in response to geopolitical tensions and the need for advanced technology solutions. The company plans to leverage its recent acquisitions to enhance its product offerings and expand its market share. However, it also acknowledged potential challenges, including supply chain disruptions and inflationary pressures, which could impact future performance. The company remains focused on integrating its acquisitions effectively and optimizing its operational efficiencies to support long-term growth objectives.