Karman Holdings Inc.

What they do

Karman designs, develops and produces critical systems aligned with U.S. Department of War and allied mission priorities, including hypersonics, strategic missile defense, tactical missiles, space and launch, and maritime defense applications. It operates as a holding company whose sole asset is the capital stock of its subsidiaries, following a corporate conversion from TCFIII Spaceco Holdings LLC (d/b/a Karman Space and Defense) in connection with its February 2025 IPO. The company reports four end markets: Hypersonics and Strategic Missile Defense, Space and Launch, Tactical Missiles and Integrated Defense Systems, and Maritime Defense Systems.

Revenue drivers

• Tactical Missiles and Integrated Defense Systems — Largest segment in Q2 2026 at $63.0 million, up 55.4% year over year, and $108.3 million for the first half, up 41.1%.
• Hypersonics and Strategic Missile Defense — Q2 2026 revenue of $43.4 million, up 24.2% year over year, and $79.1 million for the first half, up 21.7%.
• Space and Launch — Q2 2026 revenue of $42.1 million, up 6.3% year over year, and $85.9 million for the first half, up 17.0%.
• Maritime Defense Systems — Newly broken-out segment (previously in other end markets) with Q2 2026 revenue of $33.6 million and $60.0 million for the first half.

Recent performance

Q2 2026 revenue was a record $182.1 million, up 58.2% year over year, with organic growth of 24.4%. Net income was a record $14.0 million, up 106.1%, and diluted EPS was $0.11 versus $0.05 in the prior-year quarter. Non-GAAP adjusted EBITDA was a record $54.6 million, up 54.7%, and non-GAAP adjusted diluted EPS was $0.14 versus $0.10. Backlog reached a record $1.3 billion at quarter end, up 65% from fiscal year-end 2025.

Strategy

Management is scaling capacity for existing program requirements while pursuing new alternative supplier positions and content areas. The company agreed to acquire Walker Precision Engineering for approximately $94 million to expand into the European defense market. It completed a debt repricing expected to reduce annual interest expense by approximately $4 million. Bookings in the quarter totaled nearly $500 million, including a large multi-year contract with a space and launch customer, and management says it is negotiating three additional long-term defense agreements with combined potential value of more than $1 billion.

Risks

• Customer concentration — The three largest customers accounted for approximately 51.5% of revenue in 2025, so reduced purchasing by one could materially harm results.
• Supplier concentration — One supplier accounted for approximately 23.8% of accounts payable as of December 31, 2025.
• Order deferral and demand timing — Governments and businesses may modify, defer or cancel purchases in response to tighter credit, decreased cash availability and declining confidence, and customers may delay payment of receivables.
• Government contract dependence — Loss of GSA contracts or GWACs could impair the company's ability to attract new business.

Outlook

Management raised its 2026 outlook to $730-$745 million in revenue and $215-$222.5 million in adjusted EBITDA. It cites a strengthening demand environment, including more than $90 billion in recent prime contractor awards for THAAD and PAC-3 interceptors and over $76 billion for new Columbia and Virginia class submarines. It points to record $1.3 billion backlog as providing strong visibility into 2026 and momentum for 2027 and beyond.