Nov 2, 2026 earnings call — Record quarter driven by APU and distribution growth
TAT reported third quarter revenue of $55.6 million, up 20.2% year-over-year, and record adjusted EBITDA of $10.9 million.
Revenue $0.1B (est $0.1B) · EPS $0.58 (est $0.39)
Key quotes
"Our APU business continued to grow, leveraging new contracts won since the beginning of the year and the benefits of continued improvement in supply chain."
"Margin expansion was driven by revenue growth, a more favorable business mix with higher contribution from APUs and heat exchangers, the addition of trading and distribution revenue, and continued improvement in operations efficiency."
"The new distribution agreement announced in early Q3, alongside our existing MRO agreements, one of which has been recently extended to 2036, provide a strong foundation for growth that we believe can outpace the broader industry."
Analyst Q&A 5
Why revenue was stronger and Q4 outlook
Q (Jonathan Siegmann · Stifel): He asked why Q3 revenue and APU revenue were stronger than expected and how to think about Q4. He also asked whether landing gear work was being done by others or just deferred.
A: Management said revenue improved for several concrete reasons: they announced several large APU contract wins, supply-chain issues have steadily improved since Q1, and internal capacity and efficiency improved so they can finish more units. They expect this positive trend to continue given the strong intake on APUs. On landing gear, they said it is a small part of the business, and some customers may seek alternatives while others will wait — time will tell.
"First of all, we announced several large wins of APU contracts since the beginning of the year, and we are seeing more and more of these contracts coming to our shop." — Igal Zamir (CEO)
Distribution deal, inventory, and APU demand
Q (Josh Sullivan · Jones Trading): He asked if the new distribution agreement broadens the company’s interest in other business areas or M&A, whether inventory is serving as a strategic supply-chain buffer, and what APU demand might look like into 2027.
A: Management said trading and distribution is an important segment and they are interested in expanding opportunities there while supply-chain issues persist. They said the inventory is not mainly a strategic buffer but is needed to support customers under the distribution agreement because lead times remain long. On APUs, they said removals are driven by repair need and, as long as fleets keep flying, APU demand should stay steady.
"So we are definitely interested in expanding opportunities in this direction." — Igal Zamir (CEO)
Will parts and trading be less lumpy?
Q (Ben Klieve · StoneX Benchmark): He asked whether the expanded parts and trading business will make results more consistent or if the business will stay lumpy.
A: Management said quarter-to-quarter fluctuation will continue because these are large deals that depend on finding as-removed assets, repairing them, and then closing deals. They noted that closing larger deals takes more time. They also said year-to-date results are the base they plan to grow from.
"So there will continue to be fluctuation between the quarter." — Igal Zamir (CEO)
Backlog shift to shorter, last-minute work?
Q (Alexandra Mandery · Truist): She asked whether the backlog shift (removing landing gear contracts) means customers are moving to shorter, last-minute repairs instead of longer contracts like APUs.
A: Management said they do not see a move to shorter-cycle work. They took a conservative approach and removed only one landing gear line from backlog because they were struggling to sell it; they said long-term agreements still represent roughly 60%-65% of revenue while about 35%-40% comes from non-contractual short-term work. They are not aware of any change in customer indications about future consumption under long-term agreements.
"All in all, on the landing gear, we just decided to take a conservative approach and not to keep in the backlog something that we are currently really struggling to sell." — Igal Zamir (CEO)
Defense business update into 2027
Q (Jaeson Schmidt · Lake Street): He asked for an update on the defense business and how that order book is building into 2027.
A: Management said TAT is primarily a commercial company but has some defense business. They saw defense sales grow this year and have some opportunities next year to continue growing that segment, which is growing nicely alongside commercial. They do not expect anything special in the defense sector going into next year.
"We have some opportunities for next year to continue on growing it." — Igal Zamir (CEO)