TAT Technologies Reports Second Quarter 2025 Results

Rhea-AI Summary

TAT Technologies (NASDAQ: TATT) reported strong Q2 2025 results with significant growth across key metrics. Revenue increased 18.0% to $43.1 million, while net income rose 31.5% to $3.4 million compared to Q2 2024. The company's gross profit grew 35.6% to $10.8 million, representing 25.1% of revenues.

Notable achievements include a $45 million capital raise and growth in LTA and backlog value by $85 million to $524 million. Operating cash flow improved significantly, generating $6.9 million in Q2 2025 compared to $(4.1) million used in Q2 2024. The company's adjusted EBITDA increased 39.2% to $6.1 million, representing 14.0% of revenues.

Management expressed confidence in sustaining growth and expanding profit margins through 2026, citing strong order intake and increasing MRO activity.

[ "Revenue growth of 18.0% YoY to $43.1 million in Q2 2025", "Net income increased 31.5% to $3.4 million", "Successful $45 million capital raise strengthening balance sheet", "LTA and backlog value grew by $85 million to $524 million", "Operating cash flow improved to $6.9 million from $(4.1) million in Q2 2024", "Gross profit margin expanded to 25.1% from 21.9% YoY" ]

Positive

• None.

Negative

• Slowdown reported in MRO activity, though beginning to re-accelerate

Insights

Financial Analyst

TAT Technologies delivered strong Q2 2025 results with 18% revenue growth, 62.2% increase in operating income, and significant improvement in cash flow.

TAT Technologies has delivered impressive Q2 2025 results, demonstrating substantial growth across key financial metrics. Revenue increased by 18.0% to $43.1 million, while gross profit jumped 35.6% to $10.8 million, representing an improvement in gross margin from 21.9% to 25.1% year-over-year. Even more notable is the 62.2% surge in operating income to $4.4 million, with operating margin expanding from 7.5% to 10.3%.

The company's profitability metrics show a strong upward trajectory, with net income rising 31.5% to $3.4 million and Adjusted EBITDA growing 39.2% to $6.1 million. Perhaps most significant is the dramatic improvement in cash flow from operations, which swung from negative $4.1 million in Q2 2024 to positive $6.9 million this quarter—a critical indicator of the company's strengthening financial health.

Beyond quarterly performance, TAT's long-term prospects are bolstered by an $85 million increase in LTA and backlog value, now totaling $524 million. This substantial backlog provides enhanced revenue visibility and stability for coming years. The recent $45 million capital raise further strengthens the balance sheet, creating financial flexibility for potential strategic acquisitions and expansion initiatives.

TAT's ability to outperform the broader aerospace MRO market despite noted slowdowns speaks to the effectiveness of their diversified business model across trading and MRO/OEM segments. With management reporting a recent reacceleration in MRO intake and continued new contract wins, including for the 777APU, the company appears well-positioned to maintain growth momentum through 2026 while expanding profit margins.

NETANYA, Israel, Aug. 11, 2025 /PRNewswire/ -- TAT Technologies Ltd. (NASDAQ: TATT) (TASE: TATT) ("TAT" or the "Company") a leading provider of products and services to the commercial and military aerospace and ground defense industries, reported today its unaudited results for the three-month and six-month period ended June 30, 2025.

Financial highlights for the second quarter of 2025:

• Revenues increased by 18.0% to $43.1 million compared to $36.5 million for the second quarter of 2024. For the first half of 2025 revenues increased by 20.7% to $85.2 million compared to $70.6 million in the first half of 2024.
• Gross profit increased by 35.6% to $10.8 million compared to $8.0 million for the second quarter of 2024 (25.1% of revenues in Q2\25 compared to 21.9% of revenues in Q2\24). For the first half of 2025 gross profit increased by 38.1% to $20.8 million compared to $15.1 million in the first half of 2024 (24.4% of revenues in H1\25 compared to 21.3% of revenues in H1\24)
• Operating Income increased by 62.2% to $4.4 million compared to $2.7 million for the second quarter of 2024, (10.3% of revenues in Q2\25 compared to 7.5% of revenues in Q2\24). For the first half of 2025 operating income increased by 74.1% to $8.6 million compared to $4.9 million in the first half of 2024 (10.1% of revenues in H1\25 compared to 7.0% of revenues in H1\24).
• Net Income increased by 31.5% to $3.4 million compared to $2.6 million for the second quarter of 2024. For the first half of 2025 net income increased by 53.5% to $7.2 million compared to $4.7 million in the first half of 2024.Adjusted EBITDA increased by 39.2% to $6.1 million (14.0% of revenues) compared to $4.3 million (11.9% of revenues) for the second quarter of 2024. Adjusted EBITDA for the first half of 2025 increased by 47.1% to $11.8 million compared to $8.0 million in the first half of 2024 (13.9% of revenues in H1\25 compared to 11.4% in H1\24).
• Cash flow provided by operating activities for the three and six months ended June 30, 2025, was $6.9 million and $1.9 million, respectively, compared to cash flows used in operating activities of $(4.1) million and $(7.6) million for the three and six months ended June 30, 2024, respectively.

Mr. Igal Zamir, TAT's CEO and President, commented: "TAT Technologies delivered another quarter of organic growth and improved profitability, with second quarter revenue growing 18% year over year, adjusted EBITDA increasing 39%, and $7 million in cash generated from operations. We continue to outpace the industry, despite certain slowdowns in MRO activity, by leveraging the diversification of our business across trading and MRO\OEM segments. Over the last month, MRO intake began to re-accelerate, providing greater visibility and reinforcing our confidence in continued year-over-year growth."

"In addition to the double-digit revenue growth, the value of our LTA and backlog grew by approximately $85 million to $524 million, which will flow into revenue over the coming years," added Mr. Zamir. "The broad-based growth was driven by winning several new contracts, including some for the 777APU, and also by increasing the volume of activity from existing contracts for both OEM and MRO."

Mr. Zamir continued, "This quarter, we successfully completed a capital raise of $45 million, further strengthening our balance sheet. From this position of increased strength, we are continuing to evolve in alignment with the significant opportunities in front of us. Our diversified offering has positioned us to perform well relative to the broader market, and we are now beginning to explore accretive strategic opportunities to further enhance our growth prospects. As we scale, we are also taking steps to strengthen our Board of Directors with capabilities to support the next phase of the Company's development. We remain focused on scaling the business and creating tangible, long-term value for our shareholders."

With the growing LTA value and backlog, strong order intake, and the ramp up in MRO activity, we are confident in our ability to sustain growth and expand profit margins through 2026," concluded Mr. Zamir.

Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with GAAP, the Company also presents Adjusted EBITDA.  The adjustments to the Company's GAAP results are made with the intent of providing both management and investors with a more complete understanding of the Company's underlying operational results, trends and performance. Adjusted EBITDA is calculated as net income excluding the impact of: the Company's share in results of affiliated companies, share-based compensation, taxes on income, financial (expenses) income, net, and depreciation and amortization. Adjusted EBITDA, however, should not be considered as an alternative to net income and operating income for the period and may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. Adjusted EBITDA is not a measure of financial performance under generally accepted accounting principles and may not be comparable to other similarly titled measures for other companies. See reconciliation of Adjusted EBITDA below.

About TAT Technologies LTD

We are a leading provider of solutions and services to the aerospace and defense industries. We operate four operational units: (i) original equipment manufacturing ("OEM") of heat transfer solutions and aviation accessories through our Kiryat Gat facility (TAT Israel); (ii) maintenance repair and overhaul ("MRO") services for heat transfer components and OEM of heat transfer solutions through our subsidiary Limco Airepair Inc. ("Limco"); (iii) MRO services for aviation components through our subsidiary, Piedmont Aviation Component Services LLC ("Piedmont") (mainly Auxiliary Power Units ("APUs") and landing gear); and (iv) overhaul and coating of jet engine components through our subsidiary, Turbochrome Ltd. ("Turbochrome").

TAT's activities in the area of OEM of heat transfer solutions and aviation accessories through TAT Israel primarily include the design, development and manufacture of (i) a broad range of heat transfer solutions, such as pre-coolers heat exchangers and oil/fuel hydraulic heat exchangers, used in mechanical and electronic systems on board commercial, military and business aircraft; (ii) environmental control and power electronics cooling systems installed on board aircraft and ground applications; and (iii) a variety of mechanical aircraft accessories and systems such as pumps, valves, and turbine power units.

TAT's activities in the area of MRO and OEM of heat transfer solutions include the MRO of heat transfer components and to a lesser extent, the manufacturing of certain heat transfer solutions. TAT's Limco subsidiary operates a Federal Aviation Administration ("FAA")-certified repair station, which provides heat transfer MRO services for airlines, air cargo carriers, maintenance service centers and the military.

TAT's activities in the area of MRO services for aviation components include the MRO of APUs and landing gear. TAT's Piedmont subsidiary operates an FAA-certified repair station, which provides aircraft component MRO services for airlines, air cargo carriers, maintenance service centers and the military.

TAT's activities in the area of jet engine overhaul through its Turbochrome facility includes the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes and afterburner flaps.

Contact:
Mr. Eran Yunger
Director of IR
erany@tat-technologies.com

Safe Harbor for Forward-Looking Statements

This press release and/or this report contains "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements include, without limitation, statements regarding possible or assumed future operation results. These statements are hereby identified as "forward-looking statements" for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause our results to differ materially from management's current expectations. Actual results and performance can also be influenced by other risks that we face in running our operations including, but are not limited to, general business conditions in the airline industry, changes in demand for our services and products, the timing and amount or cancellation of orders, LTAs and backlog, the price and continuity of supply of component parts used in our operations, and other risks detailed from time to time in the Company's filings with the Securities Exchange Commission, including, its annual report on form 20-F and its periodic reports on form 6-K. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
	June 30,		December 31,
	2025		2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$    43,126		$       7,129
Short-term bank deposits	57		-
Accounts receivable, net of allowance for credit losses of $425    and $400 as of June 30, 2025, and December 31, 2024, respectively	32,266		29,697
Inventory	76,414		68,540
Prepaid expenses and other current assets	6,610		7,848
Total current assets	158,473		113,214
NON-CURRENT ASSETS:
Property, plant and equipment, net	44,646		41,576
Operating lease right of use assets	3,475		2,282
Intangible assets, net	1,558		1,553
Investment in affiliates	4,188		2,901
Funds in respect of employee rights upon retirement	709		654
Deferred income taxes	295		877
Restricted deposit	291		305
Total non-current assets	55,162		50,148
Total assets	$213,635		$    163,362
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term loans	$      2,088		$        2,083
Short-term loans	-		4,350
Accounts payable	15,564		12,158
Accrued expenses and other	15,273		18,594
Current maturities of operating lease liabilities	993		939
Total current liabilities	33,918		38,124
NON-CURRENT LIABILITIES:
Long-term loans	10,310		10,938
Liability in respect of employee rights upon retirement	1,098		986
Operating lease liabilities	2,528		1,345
Total non-current liabilities	13,936		13,269
COMMITMENTS AND CONTINGENCIES (NOTE 4)	-		-
Total liabilities	47,854		51,393

 

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
U.S dollars in thousands
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0 par value at June 30, 2025 and at December 31, 2024 respectively Authorized: 15,000,000 shares at June 30, 2025 and 13,000,000 at December 31, 2024; Issued: 13,161,762 and 11,214,831 shares at June 30, 2025 and at December 31, 2024, respectively; Outstanding: 12,887,289 and 10,940,358 shares at June 30, 2025 and at December 31, 2024, respectively	-		-
Additional paid-in capital	135,578		89,697
Treasury stock at cost	(2,088)		(2,088)
Accumulated other comprehensive income (loss)	600		(76)
Retained earnings	31,691		24,436
Total shareholders' equity	165,781		111,969
Total liabilities and shareholders' equity	$   213,635		$     163,362

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
U.S. dollars in thousands	Three months ended				Six months ended
	June 30,                               June 30,
	2025		2024		2025		2024
Revenues:
Products	$  12,463		$     11,732		$25,187		$     23,667
Services	30,641		24,793		60,059		46,946
	43,104		36,525		85,246		70,613
Cost of goods:
Products	9,112		7,673		17,443		16,659
Services	23,167		20,868		47,024		38,904
	32,279		28,541		64,467		55,563
Gross profit	10,825		7,984		20,779		15,050
Operating expenses:
Research and development, net	240		343		564		620
Selling and marketing	2,185		1,993		4,113		3,653
General and administrative	3,965		2,916		7,497		6,225
Other income	-		(2)		-		(390)
	6,390		5,250		12,174		10,108
Operating income	4,435		2,734		8,605		4,942
Interest expenses	(324)		(413)		(659)		(763)
Other financial income (expenses), net	(776)		106		(499)		7
Income before taxes on income (taxes benefit)	3,335		2,427		7,447		4,186
Provision for taxes on income (taxes benefit)	211		44		803		(109)
Profit before share of equity investment	3,124		2,383		6,644		4,295
Share in profits of equity investment of affiliated companies	318		234		611		432
Net income	$   3,442		$    2,617		$ 7,255		$  4,727

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
U.S. dollars in thousands, except share and per share data
Earnings per share
Basic	$ 0.30		$    0.26		$ 0.65		$    0.46
Diluted	$ 0.30		$   0.25		$ 0.64		$   0.44
Weighted average number of shares outstanding
Basic	11,447,986		10,394,654		11,196,992		10,386,859
Diluted	11,666,309		10,561,420		11,409,488		10,722,153

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
U.S. dollars in thousands
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net income	$  3,442		$    2,617		$  7,255		$   4,727
Other comprehensive income (loss), net
Net unrealized losses from derivatives	-		-		-		(27)
Change in foreign currency translation adjustments	148		164		676		164
Total comprehensive income	$  3,590		$  2,781		$ 7,931		$ 4,864

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
U.S. dollars in thousands, except share data
		Share capital							Accumulated
		Number of shares issued			Amount		Additional paid-in capital		other comprehensive income (loss)		Treasury shares		Retained earnings		Total equity
BALANCE AT DECEMBER 31, 2023		10,377,085			$      3,140		$      76,335		$              27		$    (2,088)		$     13,269			$     90,683
CHANGES DURING THE 6 MONTHS ENDED JUNE   30, 2024:
Comprehensive income		-			-		-		137		-		4,727			4,864
Exercise of option		49,109			12		(12)		-		-		-			-
Share based compensation		-			-		189		-		-		-			189
BALANCE AT JUNE 30, 2024		10,426,194			3,152		76,512		164		(2,088)		17,996			95,736
BALANCE AT DECEMBER 31, 2024		11,214,831			-		89,697		(76)		(2,088)		24,436			111,969
CHANGES DURING THE 6 MONTHS ENDED JUNE 30, 2025:
Comprehensive income		-			-		-		676		-		7,255			7,931
Exercise of option		79,633			-		-		-		-		-			-
Issuance of common shares on public offering, net of issuance costs of $2,769		1,625,000			-		39,415		-		-		-			39,415
Exercise of the underwriters' option on public offering, net of issuance costs of $413		242,298			-		5,953		-		-		-			5,953
Share based compensation		-			-		513		-		-		-			513
BALANCE AT JUNE 30, 2025		13,161,762			$             -		$  135,578		$          600		$  (2,088)		$  31,691			$  165,781

 

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
U.S. dollars in thousands, except share data
		Share capital							Accumulated
		Number of shares issued			Amount		Additional paid-in capital		other comprehensive income		Treasury shares		Retained earnings		Total equity
BALANCE AT MARCH 31, 2024		10,382,637			$       3,141		$     76,376		$                -		$   (2,088)		$     15,379		$   92,808
CHANGES DURING THE 3 MONTHS ENDED JUNE   30, 2024:
Comprehensive income		-			-		-		164		-		2,617		2,781
Exercise of option		43,557			11		(12)		-		-		-		(1)
Share based compensation		-			-		148		-		-		-		148
BALANCE AT JUNE 30, 2024		10,426,194			3,152		76,512		164		(2,088)		17,996		95,736
BALANCE AT MARCH 31, 2025		11,214,831			-		89,919		452		(2,088)		28,249		116,532
CHANGES DURING THE 3 MONTHS ENDED JUNE 30, 2025:
Comprehensive income		-			-		-		148		-		3,442		3,590
Exercise of stock option		79,633			-		-		-		-		-		-
Issuance of common shares on public offering, net of issuance costs of $2,769		1,625,000			-		39,415		-		-		-		39,415
Exercise of the underwriters' option on public offering, net of issuance costs of $413		242,298			-		5,953		-		-		-		5,953
Share based compensation		-			-		291		-		-		-		291
BALANCE AT JUNE 30, 2025		13,161,762			$              -		$  135,578		$  600		$   (2,088)		$    31,691		$ 165,781

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$  3,442		$  2,617		$   7,255		$  4,727
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	1,208		1,431		2,513		2,805
Non-cash financial (income) expenses	600		(276)		508		(486)
Change in allowance for credit losses	75		40		25		40
Share in profits of equity investment of affiliated companies	(318)		(234)		(611)		(432)
Share based compensation	291		148		513		189
Gain on disposal of property, plant and equipment	-		(1)		-		(355)
Deferred income taxes, net	63		306		582		(103)
Changes in operating assets and liabilities:
Decrease (increase) in trade accounts receivable	882		(5,430)		(2,594)		(6,250)
Decrease (increase) in prepaid expenses and other current assets	1,697		(129)		1,183		(283)
Increase in inventory	(3,434)		(2,906)		(7,295)		(5,543)
Increase (decrease) in trade accounts payable	2,972		(209)		3,406		(909)
Decrease (increase) in accrued expenses and other	(529)		543		(3,571)		(1,047)
Net cash provided by (used in) operating activities	6,949		(4,100)		1,914		(7,647)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment	-		-		-		1,306
Purchase of property and equipment	(3,305)		(978)		(6,167)		(1,967)
Net cash used in investing activities	(3,305)		(978)		(6,167)		(661)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term loans	(516)		(510)		(1,087)		(950)
Proceeds from issuance of ordinary shares and exercise of the underwriters' option	48,550		(1)		48,550		-
Issuance costs of ordinary shares and exercise of the underwriters' option	(2,820)		-		(2,820)		-
Net change in short term loans from banks	(10,719)		4,668		(4,350)		668
Net cash provided by (used in) financing activities	34,495		4,157		40,293		(282)
Net increase (decrease) in cash and cash equivalents and restricted cash	38,139		(921)		36,040		(8,590)
Cash and cash equivalents and restricted cash at beginning of period	5,335		9,273		7,434		16,942
Cash and cash equivalents and restricted cash at the end of period	$   43,474		$  8,352		$  43,474		$  8,352
Supplementary information on investing and financing activities not involving cash flows:
Additions of operating lease right-of-use assets and operating lease liabilities	$ 1,688		$  245		$    1,835		$    590
Reclassification between inventory and property, plant and equipment	-		-		579		60
Unpaid issuance costs of ordinary shares and exercise of the underwriters' option	362		-		362		-
Supplemental disclosure of cash flow information:
Interest paid	249		410		516		852

 

 

TAT TECHNOLOGIES LTD. AND ITS SUBSIDIARIES  RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (NON-GAAP)  (UNAUDITED) (U.S. dollars in thousands)
	Three months ended							Six months ended
	June 30,							June 30,
	2025				2024			2025		2024
Net income	$ 3,442				$ 2,617			$ 7,255		$4,727
Adjustments:
Share in results and sale of equity investment of affiliated companies	(318)				(234)			(611)		(432)
Taxes on income (tax benefit)	211				44			803		(109)
Financial expenses, net	1,100				306			1,158		756
Depreciation and amortization	1,328				1,468			2,691		2,898
Share based compensation	291				148			513		189
Adjusted EBITDA	$ 6,054				$ 4,349			$ 11,809		$ 8,029

View original content:https://www.prnewswire.com/news-releases/tat-technologies-reports-second-quarter-2025-results-302526872.html

SOURCE TAT Technologies Ltd.

FAQ

What were TAT Technologies (TATT) key financial results for Q2 2025?

TAT reported Q2 2025 revenue of $43.1 million (up 18.0%), net income of $3.4 million (up 31.5%), and adjusted EBITDA of $6.1 million (up 39.2%) compared to Q2 2024.

How much did TAT Technologies raise in their recent capital raise?

TAT Technologies successfully completed a $45 million capital raise in Q2 2025, strengthening their balance sheet.

What is TAT Technologies' current backlog value?

TAT's LTA and backlog value grew by $85 million to reach $524 million, which will convert to revenue over the coming years.

How did TAT Technologies' operating cash flow perform in Q2 2025?

Operating cash flow improved significantly to $6.9 million in Q2 2025, compared to negative $(4.1) million in Q2 2024.

What is TAT Technologies' outlook for future growth?

Management expressed confidence in sustaining growth and expanding profit margins through 2026, supported by growing LTA value, strong order intake, and increasing MRO activity.