Aug 18, 2026 earnings call — Record bookings and upgraded FY27 outlook
Company reported record bookings of $660 million in Q4 and raised FY 2027 revenue outlook to total revenue approaching $1.1 billion.
Revenue $0.3B (est $0.3B) · EPS $0.37 (est $0.38)
Key quotes
"In Q4, we delivered a record quarter with $660 million of bookings resulting in record fiscal year bookings of $1.5 billion up 49.8% year over year and a book-to-bill of 1.57 for the year."
"In our efforts to progress toward our targeted EBITDA margin profile in the low to mid-20s, we are focused on the following drivers:"
"Net working capital decreased approximately $18 million year over year or 4%."
Analyst Q&A 7
Why margins improve in 2027
Q (Peter Arment · Baird): He asked what is driving margin improvement through 2027 — pricing, mix, volume, or backlog, and how to characterize the margin expansion. He also asked if any single customer program is now a large percent of backlog and about CPA bookings for the year.
A: Management said margin improvement is a continuation of reducing lower-margin backlog through FY 2027. They expect margins to increase through the year and to be operating in line with their target profile by year-end, with progress into FY28. They also said bookings were broad based and CPA finished the year very strong.
"We have got increased line of sight now to getting to our target profile, and we talked about how we expect to get there through FY 2027 and FY 28." — William L. Ballhaus (CEO·CHAIR)
What backlog and Palantir mean for revenue/margins
Q (Ken Herbert · RBC): He asked whether the stepped-up fiscal 2027 revenue outlook reflects large framework/UCA agreements or growth beyond the core business, and he asked if the Palantir agreement is mostly EBITDA enhancement or could impact revenue too.
A: They said the outlook reflects broad-based increased demand and a big jump in next-12-month backlog, about a billion, but many market tailwinds are not included in the outlook. On Palantir, they are early but see potential to increase revenue, margin, operating leverage and cash; they will update as results come in. They also said they have not factored in backlog conversion improvements yet.
"if you kind of piece together what is behind our outlook, 1 of the biggest jumps we saw this quarter was the increase in our next 12 months backlog." — William L. Ballhaus (CEO·CHAIR)
Backlog helps production and capital use
Q (Jonathan Ho · William Blair): He asked how greater backlog coverage improves production efficiency, supply-chain planning, and facilities utilization. He also asked about capital priorities and free cash flow uses going forward.
A: They said higher backlog gives strong visibility to plan and lets them work with the supply chain to optimize across the full product life cycle. For capital, the priority is lowering net debt and leverage, while making targeted investments in inventory, facilities and CapEx to scale and accelerate organic growth.
"it gives us a great ability to look forward to plan, to work with our supply chain to try and optimize across the full life cycle." — William L. Ballhaus (CEO·CHAIR)
Limits to multi-year growth and CapEx plan
Q (Kyle · Jefferies): He asked whether anything (budget certainty, inventories, etc.) limits growth over multiple years and how conservative the company is. He also asked what is embedded in next year’s free cash flow for working capital and CapEx, and about supply-chain health.
A: They said growth is driven by a natural progression from development to higher-rate production across the portfolio, and there are additional tailwinds not included in the outlook. CapEx is expected to be flat year over year, focused on optimizing operations, capacity, footprint and automation, and they may bring in material earlier to reduce lead times where backlog justifies it.
"The areas that we are focused on are the areas that Bill's brought up in his discussion earlier and has brought up in prior quarters, is really optimizing our operations from both the capacity and a footprint standpoint." — David Farnsworth (CFO)
Why international sales fell versus domestic growth
Q (JPMorgan): He asked why international sales were down ~15% while domestic grew 13% — was it capacity taken by domestic demand or international headwinds? He also asked what drove strong EW growth.
A: They said domestic growth shows strong demand (86% domestic growing 13%), and international deliveries slowed because they outsourced manufacturing to a contract manufacturer and are ramping that partner. They expect those delivery issues to be worked out over the next few quarters and said EW growth is broad based across the portfolio, not from a single area.
"As we have discussed in prior calls, over the last year, we have outsourced our manufacturing in our international business to a contract manufacturer." — William L. Ballhaus (CEO·CHAIR)
CPA servers: size, margins, and competition
Q (Austin Moeller · Canaccord Genuity): He asked for revenue growth or target share for CPA ruggedized servers and whether those servers have higher or lower margins than other programs. He also asked if smaller form factors could let them take share from other network computing manufacturers.
A: They declined to give specific revenue or margin figures and said they do not talk about the margin profile of any of their products. They did say CPA demand is strong and growing, CTG activity is ahead of expectations, and smaller form factors are drawing customer interest which could open new markets and platforms given their security advantage.
"we do not talk about the margin profile of any of our products." — David Farnsworth (CFO)
Memory agreement size and multiyear bookings
Q (Stifel): He asked how significant the memory-securing agreement was to bookings and whether it fits typical backlog margins. He also asked which segments contribute to multiyear agreement duration and confidence.
A: They said they have not given specific booking amounts, but the memory agreement was one of their more significant, multiyear bookings and that part of the business tends to run at the higher end of their margin profile. They added that some multiyear orders exist across the business but larger munitions framework agreements are still potential tailwinds in their pipeline and have not yet materialized into bookings.
"I would say that it was 1 of our more significant bookings for the quarter, a multiyear booking." — William L. Ballhaus (CEO·CHAIR)