Applied Aerospace & Defense, Inc.

TTM revenue, gross profit and net loss are Defense Briefing calculations using FY2025 plus H1 2026 minus H1 2025. TTM gross profit is $147.2M, equal to a 25.6% margin. EPS is not presented as a TTM figure because the IPO, stock split and changing weighted-average share base make a simple additive calculation misleading. Official Q2 diluted EPS was -$1.04 and H1 diluted EPS was -$1.20. N/M means not meaningful.

Applied Aerospace & Defense designs, engineers, manufactures, tests and sustains complex hardware that sits inside spacecraft, launch vehicles, military aircraft, missiles, radar systems and communications platforms. It generally operates below the platform-prime level. Applied supplies qualified subsystems and specialized production processes rather than bidding to lead the complete aircraft, spacecraft or weapon program.

The company reports three markets: Space and Launch Systems, Defense Aviation and Airborne Systems and Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance and Reconnaissance and Precision Strike Systems, abbreviated as C5ISR and Precision Strike Systems. Its work spans early design and prototyping through qualification, serial production, repair and aftermarket sustainment.

Applied's strategic value comes from manufacturing processes that are expensive to recreate, slow to qualify and difficult to move once embedded in a platform. In fiscal 2025, 87% of revenue came from sole-source or single-source positions, 89% involved intellectual-property-enabled processes and the average customer relationship was 39 years.

Public company disclosures identify long-running supplier relationships or awards involving RTX's Raytheon business, Lockheed Martin and Sikorsky, Northrop Grumman and Boeing. Applied does not disclose customer-by-customer revenue or a prime-contractor backlog split.

Space and Launch Systems

Launch-vehicle structures, payload-deployment hardware, spacecraft assemblies, solar-array structures, sunshades, thermal structures, solar sails, passive deorbit systems, radar and communications antennas, radio-frequency structures, propellant tanks and reusable landing-system components.

Program disclosures include advanced-material support for Firefly Aerospace's Blue Ghost lunar lander and deployable-space work for a NOAA solar-sail mission. Individual supplier contract values were not publicly disclosed.

Defense Aviation and Airborne Systems

Flight-control surfaces, fuselage assemblies, fuel tanks, aerial-refueling structures, landing-gear assemblies, arresting-hook assemblies, rotor hubs, mechanical transmissions, engine shafts, intelligence, surveillance and reconnaissance sensor mounts and aftermarket repair or overhaul.

C5ISR and Precision Strike Systems

Radomes, radio-frequency-transparent enclosures, networked sensing hardware, communications structures, radio-frequency test services, integrated air and missile-defense components, missile bodies, launch assemblies, solid-rocket motor cases, propulsion structures and survivability enclosures.

Integrated Engineering and Manufacturing

Design for manufacturability, structural analysis, tooling, prototyping, composite and metallic fabrication, complex machining, assembly, nondestructive inspection, three-dimensional metrology, thermal-cycle testing, structural-load testing, configuration management and lifecycle sustainment.

Direct Government Award

Selected Disclosed Program Positions

The $105.048M AH-64 figure is the announced firm-fixed-price contract value, not cash obligated at award. The Department of Defense notice states that funding and work locations will be determined with each order. The other entries are disclosed supplier or program positions and are not presented as direct federal contract awards. Applied's public government-contract record understates total government exposure because a large share of work arrives through prime-contractor subcontracts and purchase orders. Applied does not disclose a defense-only backlog or a contract-by-contract backlog schedule.

Government-linked work remains the economic base. Approximately 83% of fiscal 2025 revenue came from U.S. government and other government contracts, either directly or through prime contractors. Applied also benefits from a mixed lifecycle model: development and production create growth while repair, overhaul and sustainment provide recurring demand from installed platforms.

Q2 growth was broad but not purely organic. Applied said revenue excluding acquisitions completed during 2026 increased $22.5M, or 19.8%, year over year. C5ISR and Precision Strike produced the sharpest reported increase as integrated air and missile defense, radar, missile and munition demand expanded. Space and Launch rose with launch cadence and proliferated-constellation activity. Defense Aviation grew more slowly but retained support from aftermarket demand and new production.

Primary Growth Levers

• Convert the approximately $3.8B weighted opportunity pipeline into funded orders and contracted backlog. Pipeline is not backlog and does not represent awarded revenue.
• Execute production ramps on missile defense, precision strike, military aviation, launch and spacecraft programs without eroding fixed-price margins.
• Increase Applied content per platform by combining composites, metallic structures, propulsion hardware, testing, repair and sustainment across the acquired portfolio.
• Deploy the approximately $50M fiscal 2026 capital program into manufacturing efficiency, new capabilities and capacity tied to customer demand.
• Integrate Consolidated Boring, Ultracor and Vestigo while maintaining quality systems, delivery performance and cash discipline.

Backlog reached $1.13B at 30-JUN-2026, up $258.7M from year-end. Applied attributed approximately $178.5M of that increase to the Consolidated Boring acquisition, with the balance primarily reflecting new orders in excess of billings. The company separately reported $947.6M of remaining performance obligations. Backlog and remaining performance obligations are different measures and neither is a guarantee of future revenue.

Management's first formal public-company outlook calls for $670M to $690M of fiscal 2026 revenue and $150M to $155M of non-GAAP Adjusted EBITDA. The midpoint implies a substantial step-up from fiscal 2025, but the quality of that growth will depend on acquisition mix, production ramps, fixed-price execution and working-capital conversion.

For national security, the relevant issue is capacity rather than branding. Missile, air-defense and space programs only benefit from a larger supplier base if Applied can turn backlog into qualified hardware on schedule. For capital, the same production ramp determines whether revenue growth converts into cash after acquisitions, interest, capital spending and working-capital investment.

Management expects fiscal 2026 revenue of $670M to $690M and non-GAAP Adjusted EBITDA of $150M to $155M. The outlook is supported by space-launch cadence, missile and munition rearmament, integrated air and missile defense, radar demand, rotorcraft aftermarket activity and several production ramps. Applied does not provide forward GAAP net-income or EPS guidance, which limits clean valuation comparisons after a quarter dominated by IPO-related share-based compensation and transaction costs.

Backlog provides visibility but not certainty. At 30-JUN-2026, total contract backlog was $1.13B and remaining performance obligations were $947.6M. Applied expects 39% of RPO to be recognized during the rest of 2026, 49% in 2027 and 12% later. Customers may still terminate, cancel or adjust orders under contract terms, so neither backlog nor RPO should be treated as guaranteed revenue.

The IPO materially reduced leverage. Term-loan principal was $405.8M at quarter-end and the revolver had $125.0M of unused capacity. The less comfortable number is cash conversion. Applied used $82.1M of operating cash during H1 2026, partly because contract assets and inventory grew by about $36.4M as the company invested ahead of deliveries and partly because acquisition and IPO transaction costs increased. That is a normal risk for a fast-growing manufacturer, but it becomes a problem if production ramps keep consuming working capital without corresponding collections.

For national security, Applied matters because qualified manufacturing is itself a constraint. A prime contractor can have funded demand and still miss schedule if critical structures, missile bodies, rotorcraft parts or deployable-space hardware cannot be produced fast enough. Applied's 11-site footprint gives customers another scaled source across several bottleneck processes. For capital, the same footprint must now behave like one operating system rather than a portfolio of acquisitions.

Watch Next

• Q3 revenue growth excluding acquisitions and whether the 19.8% Q2 ex-acquisition pace holds.
• Backlog conversion and the relationship between $1.13B of backlog and $947.6M of remaining performance obligations.
• Operating cash flow as contract assets and inventory convert into deliveries and customer collections.
• Gross-margin movement after the IPO quarter and as CBI, Ultracor and Vestigo integration progresses.
• Execution against the $670M-$690M revenue guide and $150M-$155M Adjusted EBITDA guide.
• Capital spending against the approximately $50M fiscal 2026 plan and any new capacity tied to missile, air-defense or space production ramps.
• Any new direct government awards that reveal the size, funding structure and competitive status of work now hidden inside prime-contractor subcontracts.

Applied competes in a fragmented supplier market. No single peer matches the full portfolio, so the relevant comparison changes by manufacturing process, qualification record and platform.

Named companies are representative competitors or substitutes in specific lanes. They do not all compete with Applied across its complete product portfolio.

Applied's moat is qualification plus process depth. Aerospace and defense customers do not casually move flight-critical hardware between suppliers. A new source must reproduce tooling, materials, process controls, test evidence, quality systems and program documentation before it can ship qualified parts. That creates switching cost once Applied is embedded in a platform.

• Source position: 87% of fiscal 2025 revenue came from sole-source or single-source work.
• Process intellectual property: 89% of fiscal 2025 revenue involved IP-enabled manufacturing processes. Applied reported 25 issued U.S. patents, one pending U.S. application and two issued foreign patents after giving pro forma effect to Consolidated Boring.
• Customer duration: Average customer relationships spanned 39 years.
• Lifecycle coverage: The company can enter at design, scale production and remain through repair or sustainment.
• National footprint: 11 facilities and approximately 1.5M square feet of manufacturing space provide capacity across multiple specialized processes.
• Customer alignment: Applied generally avoids competing with prime-contractor customers for full platform leadership.

The moat remains execution-dependent. A qualified position protects revenue only while Applied meets cost, quality and schedule requirements. Fixed-price contracts can turn a valuable sole-source position into a margin problem if labor, material or ramp costs exceed assumptions.

• Acquisition integration: Applied combines multiple operating cultures, enterprise systems, qualification regimes and quality environments. CBI is the largest recent acquisition and its purchase accounting remains preliminary.
• Working-capital consumption: H1 2026 operating cash use was $82.1M. Applied attributed part of the increase to about $36.4M of additional contract assets and inventory tied to production investment, plus higher acquisition and IPO transaction costs.
• Fixed-price exposure: Cost overruns, labor inflation, material-price increases and ramp inefficiency can compress margins when contracts do not permit full recovery.
• Government concentration: Approximately 83% of fiscal 2025 revenue was government-linked, directly or through prime contractors.
• Backlog quality: The $1.13B backlog is total corporate backlog and includes contracts or orders that may be cancelled, terminated or adjusted. Applied does not disclose a defense-only subtotal.
• GAAP earnings distortion: Q2 included $110.1M of share-based compensation tied largely to IPO vesting. That makes headline GAAP loss difficult to compare with underlying operations, while Adjusted EBITDA excludes economically real costs such as share-based compensation and interest.
• Leverage and acquisition appetite: IPO proceeds cut debt sharply, but $405.8M of term-loan principal remained at 30-JUN-2026. Another acquisition cycle could rebuild balance-sheet risk.
• Sponsor control: AA&D Holdings reported 126,786,731 shares, or 73.5%, after the July distribution, preserving voting control.
• Program timing: Customer schedule changes, qualification delays and production-ramp problems can move revenue and cash between periods.
• Public-float volatility: AADX began trading in June 2026 and has a short public-market history, concentrated ownership and limited reporting history as one combined enterprise.
• Supply chain and labor: Specialized materials, skilled machinists, engineers and certified processes are not quickly replaceable.
• Customer insourcing: Prime contractors can internalize manufacturing or technology development that Applied currently supplies.
• Disclosure limits: Classified programs and prime-contractor subcontracts can obscure contract values, end users, funded amounts and the actual composition of government-related backlog.

No active corporate social account was verifiable from the company or investor-relations sites as of 24-AUG-2026. Unverified lookalike, predecessor and regional accounts are omitted.

No open-market insider sale was identified through 24-AUG-2026. The July transaction was a no-consideration pro rata distribution, not a sale.

The public company is new, but the operating businesses are not. Applied was incorporated in Delaware as GB Eagle Topco, Inc. on 07-OCT-2022. Greenbriar Equity Group used the entity to combine established aerospace and defense manufacturers into a broader subsystem supplier. The legal parent changed its name to Applied Aerospace & Defense, Inc. on 14-NOV-2025.

Applied disclosed approximately 80% sponsor ownership at 30-JUN-2026. After the 15-JUL-2026 pro rata distribution, AA&D Holdings reported 126,786,731 shares, or 73.5%, on a Schedule 13G filed 13-AUG-2026. The sponsor stake still leaves Applied within the NYSE controlled-company regime.

Applied's consolidation strategy sits inside a broader defense-industrial pattern. Defense Briefing's history of Pentagon prime consolidation explains why a scaled mid-tier manufacturer can gain capacity, qualification depth and bargaining power without becoming a platform prime.