Karman Space & Defense Delivers Record Revenue and Expands Backlog, Signaling Robust Multi-Year Growth
Record Q3 Results Show Consistent Gains Across All Core Segments
Karman Space & Defense (NYSE: KRMN) reported its strongest quarterly results ever for the third quarter of fiscal 2025, propelled by double-digit growth in every major end-market. Revenue surged to $121.79 million—up 41.7% year over year—while net income climbed to $7.64 million, representing a 78.1% jump. Adjusted EBITDA hit a new high of $37.73 million, increasing 34.4% from the prior year.
| Segment | Q3 2025 Revenue ($M) | Q3 2024 Revenue ($M) | Change (%) |
|---|---|---|---|
| Hypersonics & Strategic Missile Defense | 36.61 | 26.93 | +36.0 |
| Space & Launch | 40.70 | 27.64 | +47.2 |
| Tactical Missiles & Integrated Defense Systems | 44.48 | 31.40 | +41.7 |
| Total Revenue | 121.79 | 85.97 | +41.7 |
Backlog Reaches New High, Providing Visibility Into 2026
The company’s funded backlog rose to $758.2 million—a 30.8% increase since year-end 2024—driven by broad-based demand across more than 130 programs and 80 customers. Year-to-date revenue now totals $337 million, with non-GAAP adjusted earnings per share (EPS) of $0.10 in the third quarter, more than double the prior year.
This surge reflects rising production in missile programs (including PrSM, Standard Missile 3 & 6), order timing in the launch sector, and strong rates for GMLRS and UAS products.
Guidance Raised for 2025; 2026 Growth Projected at 20–25%
Bolstered by recent momentum, Karman tightened its 2025 full-year outlook: revenue is now expected between $461–463 million, and adjusted EBITDA between $142–143 million—each about 34% higher than last year’s midpoint ranges. Looking ahead, management signaled confidence with a preliminary 2026 revenue growth target of 20–25% (excluding acquisitions), consistent with its recent historical pace.
| Fiscal Year | Revenue Outlook ($M) | Adj. EBITDA Outlook ($M) | Implied YoY Revenue Growth (%) |
|---|---|---|---|
| 2024 (Actual) | 254.01 (9 months) | 79.79 (9 months) | — |
| 2025 (Guidance) | 461–463 | 142–143 | ~34* |
| 2026 (Preliminary Target) | ~553–579 | Not disclosed | 20–25 (vs. 2025) |
*vs. prior guidance midpoints
Balance Sheet Strengthened Through Secondary Equity and Acquisition
Karman completed a $1.2 billion non-dilutive secondary equity offering, marking the exit of its private equity sponsor and a show of market confidence in the company’s prospects. Additionally, the acquisition of Five Axis Industries expands capabilities in the commercial space segment, while the company increased its term loan to $505 million and paid down its revolving credit facility.
Profitability Remains Strong Even Amid Growth
The company sustained high margins, with adjusted EBITDA margin at 31.0% for the quarter, underscoring operational discipline even as revenue expands. Net income margin was 6.3%, up from 5.0% a year ago.
| Q3 2025 | Q3 2024 |
|---|---|
| Adj. EBITDA Margin: 31.0% | 32.6% |
| Net Income Margin: 6.3% | 5.0% |
Takeaway: Backlog and Cash Infusion Point to Sustained Sector Momentum
Karman’s strong Q3 numbers, increased 2025 outlook, and preliminary 2026 guidance all signal growing demand and a robust outlook for the space and defense solutions sector. The company’s balance sheet has been reinforced by a secondary equity raise and acquisition-driven expansion. For investors and industry observers, Karman’s continued record-setting results—and its $758 million backlog—suggest that management’s multi-year growth thesis has traction.
Investors can hear more from leadership on the live webcast and conference call on November 6, or access replay and supplemental presentations via Karman’s investor relations site. While actual results will depend on factors such as government spending and competitive dynamics, Karman’s financial performance and backlog offer a noteworthy indicator of its growing relevance in both government and commercial space arenas.
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