Arxis Reports Record First Quarter 2026 Results; Initiates Full-Year 2026 Guidance
Rhea-AI Summary
Arxis (NASDAQ: ARXS) reported record first quarter 2026 results and issued full-year 2026 guidance. Q1 revenue was $459 million, up 21% year-over-year, with 17% organic growth. Net income was $53 million versus a $4 million loss, and Adjusted EBITDA was $175 million, up 31% with a 38.2% margin.
Full-year 2026 guidance targets revenue of $1,860–$1,880 million and Adjusted EBITDA of $720–$730 million, implying 18% and 27% growth at the midpoint. Arxis also completed a $1,221 million IPO, repaid $946 million of Term Loan B debt, and closed the Micro-Tronics acquisition.
Positive
- Q1 2026 revenue $459 million, up 21% year-over-year
- Q1 organic revenue growth of 17%
- Net income improved to $53 million from a $4 million loss
- Q1 Adjusted EBITDA $175 million, up 31%; margin 38.2%
- Free cash flow increased 107% to $25 million
- IPO raised $1,221 million; $946 million Term Loan B repaid
- Full-year 2026 revenue guidance up 18% at midpoint to ~$1.87 billion
- Full-year 2026 Adjusted EBITDA guidance up 27% at midpoint to ~$725 million
Negative
- None.
News Market Reaction – ARXS
In the May 28 session, ARXS gained 17.81%, reflecting a significant positive market reaction. Argus tracked a peak move of +11.8% during that session. Argus tracked a trough of -10.3% from its starting point during tracking. Our momentum scanner triggered 62 alerts that day, indicating high trading interest and price volatility. Trading volume was elevated at 2.7x the daily average, suggesting notable buying interest.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 14 | Earnings call timing | Neutral | -4.2% | Announced date and webcast details for Q1 2026 earnings release. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Limited earnings-tag history: the prior earnings-related scheduling release saw a -4.18% move after announcement.
Recent news flow for ARXS is sparse, with one prior earnings-tag event on May 14, 2026 announcing the timing of today’s results call and webcast. That scheduling headline saw a -4.18% move, offering little insight into how investors might respond to actual results. Since then, the company completed its IPO and insiders reported multiple purchases tied to the offering, setting the backdrop for this first reported quarter and initial full-year 2026 guidance.
Key Terms
adjusted EBITDA financial
free cash flow financial
initial public offering financial
restricted stock units financial
basis points financial
Term Loan B debt financial
Class A Common Stock financial
Convertible Common Stock financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
First Quarter 2026 Highlights (all comparisons against the first quarter of 2025, unless otherwise noted):
- Revenue of
$459 million 21% - Net income of
$53 million $(4) million - Net income margin of
11.6% , compared to (1.1)% - Adjusted EBITDA1 of
$175 million 31% - Adjusted EBITDA margin1 improved by 290 bps to
38.2%
Initiating Full-Year 2026 Guidance (all comparisons against the full-year 2025, unless otherwise noted):
- Revenue range of
$1,860 $1,880 million 18% growth at the midpoint - Adjusted EBITDA1 range of
$720 $730 million 27% growth at the midpoint - Adjusted EBITDA margin1 of approximately
38.8% at the midpoint, an increase of 290 bps
"Following the successful completion of our IPO in April, we are entering our next phase as a public company with strong momentum across our Electronic and Mechanical Components segments," said Kevin Perhamus, Arxis' President and Chief Executive Officer. "Proceeds from the IPO will support our growth objectives, specifically relating to strategic acquisitions. Our proprietary Arxis EDGE business system continues to support commercial execution, identify cross-sell opportunities, and accelerate integration across acquired businesses, contributing to continued growth and increased margin expansion across both segments."
"Arxis delivered record first quarter performance, with revenue increasing
"We believe the outlook across our end markets remains favorable. In Defense & Space, we continue to see strong demand supported by increasing
(1) | Additional detail on non-GAAP financial measures, including reconciliations, is provided in the appendix. |
First Quarter 2026 Unaudited Condensed Combined Consolidated Results
Three Months Ended March 31 | |||
(Dollars in millions, except per share amounts) | 2026 | 2025 | Change |
Revenue | 21 % | ||
Net income (loss) | NM | ||
Net income margin | 11.6 % | (1.1) % | NM |
Adjusted EBITDA1 | 31 % | ||
Adjusted EBITDA margin1 | 38.2 % | 35.3 % | 290 bps |
Net cash provided by operating activities | 76 % | ||
Free cash flow1 | 107 % | ||
NM = not meaningful due to the small prior-year comparison base. |
Revenue of
Net income of
Adjusted EBITDA1 was
Capital Structure Updates
Arxis successfully completed its initial public offering on April 17, 2026. Proceeds from the IPO will support continued investment in the Company's growth objectives, primarily strategic acquisitions.
The Company began trading on NASDAQ under the ticker symbol "ARXS" and raised approximately
Acquisition Updates
On January 5, 2026, Arxis completed the acquisition of Micro-Tronics, a designer and manufacturer of highly engineered rubber-to-metal-bonded seals and diaphragm seal assemblies used in mission-critical aerospace and defense applications.
Full Year 2026 Guidance
Full Year 2026 Guidance | |||
(Dollars in millions) | 20263 | 2025 | Change at |
Revenue | 18 % | ||
Adjusted EBITDA2 | 27 % | ||
Adjusted EBITDA margin2 | ~ | 35.9 % | 290 bps |
(2) | Arxis has not reconciled its full year 2026 guidance related to Adjusted EBITDA and Adjusted EBITDA margin to its most directly comparable forward looking GAAP financial measure because such information is not available, and management cannot reliably predict all of the necessary components of such GAAP measure without unreasonable effort or expense. |
(3) | Includes Micro-Tronics acquisition. |
Conference Call and Webcast Information
Arxis will host an investor conference call to discuss its first quarter results and full-year 2026 guidance at 8:00 a.m. ET on Thursday, May 28, 2026. A live webcast of the call, along with related presentation materials, will be available on the News & Events section of the Company's website at https://ir.arxis.com. A replay of the webcast will be available for 30 days following the call.
About Arxis
Arxis is a leading designer and manufacturer of proprietary, engineered components that deliver cutting-edge performance in extreme environments. Our companies are trusted innovators serving the most demanding industries, including Defense and Space, Commercial Aerospace, and Industrial Technology. Our team of over 500 engineers works hand-in-hand with our customers' engineering teams to develop custom engineered components that address their most complex technical challenges and that perform under the most challenging conditions. Arxis is a portfolio company of Arcline Investment Management. For more information, visit www.arxis.com.
Non-GAAP Financial Measures
This press release includes certain "non-GAAP financial measures," which are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with accounting principles generally accepted in
The non-GAAP financial measures presented in this press release are supplemental measures of our performance and our liquidity that we believe help investors understand our financial condition and operating results and assess our future prospects. We believe that presenting these non-GAAP financial measures, in addition to the corresponding
We define Adjusted EBITDA as net income (loss) before interest expense, net, income tax expense (benefit), depreciation and amortization, further adjusted for certain non-cash items that we may record each period, as well as non-recurring items such as transaction costs and other deal related expenses, acquisition and integration costs, restructuring costs, share-based compensation expense, when applicable. We define Adjusted EBITDA margin as Adjusted EBITDA divided by Revenue. We believe that Adjusted EBITDA and Adjusted EBITDA margin are important metrics for management and investors as they remove the impact of items that we do not believe are indicative of our core operating results or the overall health of our company and allows for consistent comparison of our operating results over time and relative to our peers.
We define Free Cash Flow as net cash provided by (used in) operating activities less capital expenditures. We believe this measure allows management and investors to evaluate the capacity of our operations to generate cash that is available to service debt and make strategic investments and acquisitions.
Management recognizes that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company. To compensate for these and the other limitations discussed below, management does not consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These statements may include words such as "believe", "expect", "anticipate", "intend", "plan", "estimate", "guidance", "will", "may," and negatives or derivatives of these or similar expressions.
These forward-looking statements reflect our current expectations, are based on judgments and assumptions, are inherently uncertain and are subject to risks, uncertainties, and other factors, which could cause our actual results, performance, or achievements to differ materially from current expectations. Some of the risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: the concentration of our business on the aerospace and defense industries; the unique business risks of supplying products to companies contracting with the
These or other uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements, and these and other factors are more fully discussed under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's filings with the Securities and Exchange Commission, including those set forth in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. We do not undertake any obligation to update or revise our forward-looking statements except as may be required by law or regulation. This press release also includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.
Contact:
Investor Relations
ir@arxis.com
+1 860-243-7100 (Select 1 for Arxis)
Table 1: Condensed Combined Statements of Operations | ||||||
(Unaudited, in thousands) | ||||||
Three Months Ended March 31, | ||||||
2026 | 2025 | |||||
Revenue | $ | 458,858 | $ | 380,079 | ||
Cost of revenue | 224,015 | 217,168 | ||||
Gross profit | 234,843 | 162,911 | ||||
Selling, general and administrative expenses | 88,317 | 68,626 | ||||
Amortization of intangible assets | 36,023 | 34,080 | ||||
Operating income | 110,503 | 60,205 | ||||
Interest expense, net | 43,958 | 68,260 | ||||
Other income, net | (2,467) | (1,229) | ||||
Net income (loss) before income taxes | 69,012 | (6,826) | ||||
Income tax expense (benefit) | 15,703 | (2,502) | ||||
Net income (loss) | $ | 53,309 | $ | (4,324) | ||
Table 2: Condensed Combined Balance Sheets | ||||||
(Unaudited, in thousands) | ||||||
March 31, 2026 | December 31, 2025 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 238,918 | $ | 250,303 | ||
Accounts receivable, net | 244,277 | 216,936 | ||||
Contract assets | 78,786 | 67,780 | ||||
Inventories | 325,995 | 315,604 | ||||
Prepaid expenses and other current assets | 55,978 | 57,058 | ||||
Total current assets | 943,954 | 907,681 | ||||
Property, plant and equipment, net | 408,334 | 397,929 | ||||
Intangible assets, net | 2,415,087 | 2,429,879 | ||||
Goodwill | 2,756,880 | 2,745,351 | ||||
Operating lease right-of-use assets, net | 64,840 | 64,651 | ||||
Other assets | 50,634 | 50,943 | ||||
Total assets | $ | 6,639,729 | $ | 6,596,434 | ||
Liabilities and members' equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 58,029 | $ | 56,467 | ||
Contract liabilities, current | 23,876 | 30,027 | ||||
Operating lease liabilities, current | 10,701 | 10,584 | ||||
Debt, current | 27,103 | 26,853 | ||||
Accrued expenses and other current liabilities | 135,458 | 163,230 | ||||
Total current liabilities | 255,167 | 287,161 | ||||
Debt, noncurrent | 2,625,392 | 2,606,459 | ||||
Contract liabilities, noncurrent | 1,414 | 1,414 | ||||
Operating lease liabilities, noncurrent | 54,121 | 53,798 | ||||
Deferred tax liabilities | 384,078 | 384,420 | ||||
Other long-term liabilities | 136,283 | 139,124 | ||||
Total liabilities | 3,456,455 | 3,472,376 | ||||
Members' equity | 3,183,274 | 3,124,058 | ||||
Total liabilities and members' equity | $ | 6,639,729 | $ | 6,596,434 | ||
Table 3: Condensed Combined Statements of Cash Flows | ||||||
(Unaudited, in thousands) | ||||||
Three Months Ended March 31, | ||||||
2026 | 2025 | |||||
Cash flow from operating activities: | ||||||
Net income (loss) | $ | 53,309 | $ | (4,324) | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating | ||||||
Depreciation and amortization | 51,528 | 48,994 | ||||
Amortization of deferred financing cost and accretion of paid-in-kind interest | 1,338 | 1,908 | ||||
Amortization of inventory fair value adjustment | 722 | 18,177 | ||||
Loss (gain) on sale and disposal of assets | 194 | 316 | ||||
Share-based compensation expense | 2,480 | 2,330 | ||||
Interest rate hedges change in fair value | (725) | 88 | ||||
Deferred income taxes | 68 | (4,217) | ||||
Loss on extinguishment of debt | — | 15,535 | ||||
Changes in operating assets and liabilities, net of business acquisitions: | ||||||
Accounts receivable | (23,329) | (14,602) | ||||
Inventories | (5,528) | (15,831) | ||||
Prepaid expenses and other current assets | 841 | (29,566) | ||||
Accounts payable | 2,057 | (5,771) | ||||
Accrued expenses and other current liabilities | (27,526) | 16,648 | ||||
Contract assets and liabilities, net | (17,180) | (5,263) | ||||
All other assets and liabilities | (1,840) | (3,168) | ||||
Other operating activities, net | 60 | (492) | ||||
Net cash provided by (used in) operating activities | 36,469 | 20,762 | ||||
Cash flow from investing activities: | ||||||
Capital expenditures | (11,703) | (8,795) | ||||
Proceeds from sale and disposal of assets, net of cash sold | 21 | — | ||||
Acquisition of businesses, net of cash acquired | (68,819) | (48,450) | ||||
Net cash used in investing activities | (80,501) | (57,245) | ||||
Cash flow from financing activities: | ||||||
Proceeds from issuance of debt | 25,000 | 2,692,000 | ||||
Repayments of debt | (6,751) | (2,598,321) | ||||
Payments of debt financing fees | — | (38,907) | ||||
Issuance of related party notes receivable | — | (3,000) | ||||
Settlement of related party notes receivable | 4,361 | 1,500 | ||||
Repayments of related party payables | — | (7,000) | ||||
Distributions | (307) | (350,257) | ||||
Contributions | 11,344 | 385,000 | ||||
Other financing activities, net | (145) | (521) | ||||
Net cash provided by financing activities | 33,502 | 80,494 | ||||
Effect of exchange rate changes on cash and cash equivalents | (855) | (2,065) | ||||
Net increase (decrease) in cash and cash equivalents | (11,385) | 41,946 | ||||
Cash and cash equivalents, beginning of the period | 250,303 | 110,838 | ||||
Cash and cash equivalents, end of the period | $ | 238,918 | $ | 152,784 | ||
Supplemental schedule of non-cash investing and financing activities: | ||||||
Settlement of related party notes receivable in exchange for membership units | $ | 18,748 | $ | — | ||
Rollover equity issued in connection with acquisition | 2,500 | — | ||||
Operating lease assets obtained in exchange for operating lease liabilities | 2,309 | 10,849 | ||||
Table 4: Reconciliation of Net income (loss) to Adjusted EBITDA and Adjusted EBITDA Margin | ||||
(in thousands, except for percentages) | ||||
Three Months Ended March 31, | ||||
2026 | 2025 | |||
Net income (loss) | $ 53,309 | $ (4,324) | ||
Interest expense, net | 43,958 | 68,260 | ||
Income tax expense (benefit) | 15,703 | (2,502) | ||
Depreciation and amortization | 51,528 | 48,994 | ||
Acquisition and integration costs(1) | 722 | 18,749 | ||
Restructuring costs(2) | 270 | 1,737 | ||
Transaction and other deal related expenses(3) | 7,225 | 881 | ||
Share-based compensation expense(4) | 2,480 | 2,330 | ||
Other non-recurring adjustments(5) | — | — | ||
Adjusted EBITDA | $ 175,195 | $ 134,125 | ||
Revenue | $ 458,858 | $ 380,079 | ||
Adjusted EBITDA Margin | 38.2 % | 35.3 % | ||
(1) Represents costs incurred to integrate acquired businesses and product lines into our operations, facility relocation costs, rebranding, system implementation costs and employee expenses related to acquisitions. This also includes amortization expenses of inventory step-up recorded in connection with purchase accounting of acquired businesses. |
(2) Represents severance, facility consolidation/closure costs and other charges associated with restructuring programs. |
(3) Represents third-party transaction-related costs for acquisitions comprising deal fees, legal, financial and tax due diligence expenses and valuation costs that are required to be expensed as incurred. |
(4) Represents the compensation expense under our share-based plans and deferred compensation plans. |
(5) Represents other income and expense adjustments that are non-recurring, non-operational or not reflective of core performance, such as loss on disposal of assets, commercial commitments or legal settlements, income from transition services agreements and non-operational pension impacts. |
Table 5: Reconciliation of Net cash provided by operating activities to Free Cash Flow | ||||
(in thousands) | ||||
Three Months Ended March 31, | ||||
2026 | 2025 | |||
Net cash provided by operating activities | $ 36,469 | $ 20,762 | ||
Less: | ||||
Capital expenditures | (11,703) | (8,795) | ||
Free Cash Flow | $ 24,766 | $ 11,967 | ||
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SOURCE Arxis