Karman Holdings Inc.（KRMN）公佈截至2026年3月31日第一季度（2026財年第一季）業績

10-Q
 
 
 
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

  
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 

 
 
 
 
 

 
 ☒

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 For the quarterly period ended March 31, 2026 
 

 
 
 
 
 

 
 ☐

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

  
For the transition period from ________ to _________
 
Commission File Number: 001-42520
 
KARMAN HOLDINGS INC. 
(Exact name of Registrant as specified in Charter)
 
 

 
 
 
 
 
 

 
 Delaware

  

 85-2660232

 

 
 (State or jurisdiction of incorporation or organization)

  

 (I.R.S. Employer Identification No.)

 

 
  

  

  

 

 
 5351 Argosy Avenue, Huntington Beach, CA

  

 92649

 

 
 (Address of principal executive offices)

  

 (Zip Code)

 

  
 
(714) 898-9951
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
 
 

 
 
 
 
 
 
 
 

 
 Title of each class

  

 Trading
Symbol(s)

  

 Name of each exchange on which registered

 

 
 Common Stock, $0.001 Par Value

  

 KRMN

  

 New York Stock Exchange

 

 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 

 
 
 
 
 
 
 
 
 
 

 
 Large accelerated filer

 

 ☐

  

 Accelerated filer

 

 ☐

 

 
 Non-accelerated filer

 

 ☒

  

 Smaller reporting company

 

 ☐

 

 
  

  

  

  

 Emerging growth company

  

 ☒

 

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ NO ☒
Number of shares of registrant’s common shares outstanding as of May 5, 2026 was 132,526,299.
 

  

 
  

 Karman Holdings Inc.
Table of Contents
 

 
 
 
 
 
 

 
 

  

 Page

 

 
  

 PART I: FINANCIAL INFORMATION

 

 

 
 Item 1.

 Financial Statements (unaudited)

 3

 

 
  

 Condensed Consolidated Balance Sheets 

 3

 

 
  

 Condensed Consolidated Statements of Income (Loss)

 4

 

 
  

 Condensed Consolidated Statements of Equity 

 5

 

 
  

 Condensed Consolidated Statements of Cash Flows 

 6

 

 
  

 Notes to Condensed Consolidated Financial Statements

 7

 

 
 Item 2.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 23

 

 
 Item 3.

 Quantitative and Qualitative Disclosures About Market Risk

 32

 

 
 Item 4.

 Controls and Procedures

 32

 

 
  

 PART II: OTHER INFORMATION

  

 

 
 Item 1.

 Legal Proceedings

 34

 

 
 Item 1A.

 Risk Factors

 34

 

 
 Item 2.

 Unregistered Sales of Equity Securities and Use of Proceeds

 34

 

 
 Item 3.

 Defaults Upon Senior Securities

 34

 

 
 Item 4.

 Mine Safety Disclosures

 34

 

 
 Item 5.

 Other Information

 34

 

 
 Item 6.

 Exhibits, Financial Statement Schedules

 35

 

 
 Signature

  

 37

 

  

 2

 
  

 PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Karman Holdings Inc. 
Condensed Consolidated Balance Sheets
(in thousands, except par value and share data)
(unaudited)

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 March 31

  

  

 December 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 ASSETS

  

  

  

  

  

  

 

 
 Current assets

  

  

  

  

  

  

 

 
 Cash and cash equivalents

  

 $

 73,798

  

  

 $

 33,959

  

 

 
 Accounts receivable, net

  

  

 98,614

  

  

  

 78,716

  

 

 
 Contract assets

  

  

 169,370

  

  

  

 156,298

  

 

 
 Inventory

  

  

 16,140

  

  

  

 10,662

  

 

 
 Prepaid and other current assets

  

  

 12,370

  

  

  

 11,768

  

 

 
 Total current assets

  

  

 370,292

  

  

  

 291,403

  

 

 
 Property, plant and equipment

  

  

 150,149

  

  

  

 134,793

  

 

 
 Less accumulated depreciation

  

  

 (42,831

 )

  

  

 (39,384

 )

 

 
 Net property, plant and equipment

  

  

 107,318

  

  

  

 95,409

  

 

 
 Other assets

  

  

  

  

  

  

 

 
 Goodwill

  

  

 439,210

  

  

  

 352,513

  

 

 
 Intangible assets, net

  

  

 400,459

  

  

  

 285,888

  

 

 
 Operating lease right-of-use assets

  

  

 10,727

  

  

  

 6,021

  

 

 
 Finance lease right-of-use assets

  

  

 81,706

  

  

  

 66,193

  

 

 
 Other assets

  

  

 8,026

  

  

  

 6,669

  

 

 
 Total other assets

  

  

 940,128

  

  

  

 717,284

  

 

 
 Total assets

  

 $

 1,417,738

  

  

 $

 1,104,096

  

 

 
  

  

  

  

  

  

  

 

 
 LIABILITIES AND EQUITY

  

  

  

  

  

  

 

 
 Current liabilities

  

  

  

  

  

  

 

 
 Accounts payable

  

 $

 38,425

  

  

 $

 31,632

  

 

 
 Accrued payroll and related expenses

  

  

 12,901

  

  

  

 13,776

  

 

 
 Contract liabilities

  

  

 25,752

  

  

  

 22,814

  

 

 
 Current portion of operating lease liabilities

  

  

 2,254

  

  

  

 1,815

  

 

 
 Current portion of finance lease liabilities

  

  

 4,553

  

  

  

 4,401

  

 

 
 Short term notes payable, net of debt issuance costs

  

  

 5,610

  

  

  

 3,836

  

 

 
 Income taxes payable

  

  

 5,106

  

  

  

 5,299

  

 

 
 Other current liabilities

  

  

 10,195

  

  

  

 5,094

  

 

 
 Total current liabilities

  

  

 104,796

  

  

  

 88,667

  

 

 
 Long-term liabilities

  

  

  

  

  

  

 

 
 Long-term notes payable, net of current portion and net of debt issuance costs

  

  

 752,180

  

  

  

 495,312

  

 

 
 Noncurrent operating lease liabilities, net of current portion

  

  

 9,200

  

  

  

 4,949

  

 

 
 Noncurrent finance lease liabilities, net of current portion

  

  

 93,195

  

  

  

 76,995

  

 

 
 Other liabilities

  

  

 6,928

  

  

  

 7,650

  

 

 
 Deferred tax liabilities

  

  

 45,748

  

  

  

 47,832

  

 

 
 Total long-term liabilities

  

  

 907,251

  

  

  

 632,738

  

 

 
 Total liabilities

  

  

 1,012,047

  

  

  

 721,405

  

 

 
 Commitments and contingencies (Note 14)

  

  

  

  

  

  

 

 
 Equity:

  

  

  

  

  

  

 

 
 Preferred stock, $0.001 par value; authorized — 100,000,000 shares; issued and outstanding — none

  

  

 —

  

  

  

 —

  

 

 
 Common stock; $0.001 par value; authorized — 1,000,000,000 shares; issued and outstanding — 132,526,299 and none, respectively

  

  

 133

  

  

  

 132

  

 

 
 Additional paid in capital

  

  

 388,660

  

  

  

 373,455

  

 

 
 Accumulated other comprehensive income

  

  

 75

  

  

  

 75

  

 

 
 Retained earnings

  

  

 16,823

  

  

  

 9,029

  

 

 
 Stockholders' equity

  

  

 405,691

  

  

  

 382,691

  

 

 
 Total liabilities and stockholders' equity

  

 $

 1,417,738

  

  

 $

 1,104,096

  

 

 The accompanying notes are an integral part of the condensed consolidated financial statements 

 3

 
  

 Karman Holdings Inc. 
Condensed Consolidated Statements of Income (Loss) 
(in thousands, except per share amounts)
(unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three Months Ended March 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Revenue

  

 $

 151,210

  

  

 $

 100,124

  

 

 
 Cost of goods sold

  

  

 87,345

  

  

  

 60,673

  

 

 
 Gross profit

  

  

 63,865

  

  

  

 39,451

  

 

 
 Operating expenses

  

  

  

  

  

  

 

 
 General and administrative expenses

  

  

 28,637

  

  

  

 23,288

  

 

 
 Depreciation and amortization expense

  

  

 13,776

  

  

  

 6,200

  

 

 
 Operating expenses

  

  

 42,413

  

  

  

 29,488

  

 

 
 Net operating income

  

  

 21,452

  

  

  

 9,963

  

 

 
 Interest expense, net

  

  

 (12,646

 )

  

  

 (11,373

 )

 

 
 Other income

  

  

 (174

 )

  

  

 (80

 )

 

 
 Income (loss) before provision for income taxes

  

  

 8,632

  

  

  

 (1,490

 )

 

 
 Provision for income taxes

  

  

 (838

 )

  

  

 (3,308

 )

 

 
 Net income (loss)

  

  

 7,794

  

  

  

 (4,798

 )

 

 
 Net income (loss) per common share, basic and diluted

  

 $

 0.06

  

  

 $

 (0.04

 )

 

 
 Weighted-average common share, basic and diluted

  

  

 132,526

  

  

  

 132,175

  

 

 The accompanying notes are an integral part of the condensed consolidated financial statements 

 4

 
  

 Karman Holdings Inc. 
Condensed Consolidated Statements of Equity
(in thousands)
(unaudited)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

 Common Stock

  

  

  

  

  

  

  

  

  

  

  

  

  

 

 
  

 Shares

  

  

 Amount

  

  

 Additional Paid-In Capital

  

  

 Retained Earnings

  

  

 Accumulated Other
Comprehensive
Income

  

  

 Total

  

 

 
 Balance, January 1, 2026

  

 132,391

  

  

 $

 132

  

  

 $

 373,455

  

  

 $

 9,029

  

  

 $

 75

  

  

 $

 382,691

  

 

 
 Issuance of common stock upon acquisition of Seemann Composites and Materials Sciences

  

 135

  

  

  

 1

  

  

  

 15,205

  

  

  

 —

  

  

  

 —

  

  

  

 15,206

  

 

 
 Net income

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 7,794

  

  

  

 —

  

  

  

 7,794

  

 

 
 Balance, March 31, 2026

 $

 132,526

  

  

 $

 133

  

  

 $

 388,660

  

  

 $

 16,823

  

  

 $

 75.00

  

  

 $

 405,691

  

 

  
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

 Common Stock

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

 

 
  

 Shares

  

  

 Amount

  

  

 Additional Paid-In Capital

  

  

 Members' Equity

  

  

 Accumulated Deficit

  

  

 Accumulated Other
Comprehensive
Income

  

  

 Total

  

 

 
 Balance, January 1, 2025

  

 —

  

  

 $

 —

  

  

 $

 —

  

  

 $

 204,258

  

  

 $

 (8,337

 )

  

 $

 75

  

  

 $

 195,996

  

 

 
 Share-based compensation

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 1,410

  

  

  

 —

  

  

  

 —

  

  

  

 1,410

  

 

 
 Contributions

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 1,474

  

  

  

 —

  

  

  

 —

  

  

  

 1,474

  

 

 
 Conversion of member's equity into common stock in initial public offering

  

 123,754

  

  

  

 124

  

  

  

 207,018

  

  

  

 (207,142

 )

  

  

 —

  

  

  

 —

  

  

  

 —

  

 

 
 Issuance of common stock in initial public offering, net

  

 8,421

  

  

  

 8

  

  

  

 154,828

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 154,836

  

 

 
 Net loss

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (4,798

 )

  

  

 —

  

  

  

 (4,798

 )

 

 
 Balance, March 31, 2025

  

 132,175

  

  

 $

 132

  

  

 $

 361,846

  

  

 $

 —

  

  

 $

 (13,135

 )

  

 $

 75

  

  

 $

 348,918

  

 

 The accompanying notes are an integral part of the condensed consolidated financial statements  

 5

 
  

 Karman Holdings Inc. 
Condensed Consolidated Statements of Cash Flows 
(in thousands)
(unaudited)
 

 
 
 
 
 
 
 
 
 
 
 

 
  

 Three Months Ended March 31,

  

 

 
  

 2026

  

  

 2025

  

 

 
 Cash flows from operating activities

  

  

  

  

  

 

 
 Net income (loss)

 $

 7,794

  

  

 $

 (4,798

 )

 

 
 Adjustments to reconcile net income to net cash provided by (used in) operating activities

  

  

  

  

  

 

 
 Depreciation and amortization

  

 16,633

  

  

  

 9,455

  

 

 
 Amortization of debt issuance costs

  

 430

  

  

  

 587

  

 

 
 Non-cash interest expense and other non-cash adjustments

  

 191

  

  

  

 453

  

 

 
 Deferred income taxes

  

 (2,083

 )

  

  

 1,072

  

 

 
 Share-based compensation expenses

  

 —

  

  

  

 1,410

  

 

 
 Changes in operating assets and liabilities, net of effects of acquisitions

  

  

  

  

  

 

 
 Change in accounts receivable

  

 (9,108

 )

  

  

 7,452

  

 

 
 Change in contract assets

  

 (7,099

 )

  

  

 (14,932

 )

 

 
 Change in inventory

  

 (4,319

 )

  

  

 (534

 )

 

 
 Change in prepaids and other assets

  

 (121

 )

  

  

 10,327

  

 

 
 Change in contract liabilities

  

 (270

 )

  

  

 (3,867

 )

 

 
 Change in accounts payable, accruals and income taxes payable

  

 (2,010

 )

  

  

 (19,957

 )

 

 
 Net change in ROU assets and lease liabilities

  

 171

  

  

  

 (252

 )

 

 
 Net cash used in operating activities

  

 209

  

  

  

 (13,584

 )

 

 
 Cash flows from investing activities

  

  

  

  

  

 

 
 Purchases of property and equipment

  

 (7,375

 )

  

  

 (5,042

 )

 

 
 Investment in convertible note

  

 —

  

  

  

 (6,000

 )

 

 
 Acquisitions of businesses, net of cash acquired

  

 (210,150

 )

  

  

 —

  

 

 
 Net cash flows used in investing activities

  

 (217,525

 )

  

  

 (11,042

 )

 

 
 Cash flows from financing activities

  

  

  

  

  

 

 
 Net proceeds from issuance of common stock in initial public offering

  

 —

  

  

  

 153,808

  

 

 
 Finance lease payments

  

 (1,055

 )

  

  

 (1,226

 )

 

 
 Proceeds from notes payable

  

 265,000

  

  

  

 —

  

 

 
 Repayments of notes payable

  

 (1,920

 )

  

  

 (2,281

 )

 

 
 Payments of debt issuance costs

  

 (4,870

 )

  

  

 —

  

 

 
 Repayments of revolving line of credit

  

 —

  

  

  

 (25,000

 )

 

 
 Cash contributed from equity holders

  

 —

  

  

  

 1,474

  

 

 
 Net cash provided by financing activities

  

 257,155

  

  

  

 126,775

  

 

 
 Net increase in cash and cash equivalents

  

 39,839

  

  

  

 102,149

  

 

 
 Cash and cash equivalents, beginning

  

 33,959

  

  

  

 11,530

  

 

 
 Cash and cash equivalents, ending

  

 73,798

  

  

  

 113,679

  

 

 
 Supplemental Disclosures

  

  

  

  

  

 

 
 Cash paid during the period for interest

 $

 12,906

  

  

 $

 11,038

  

 

 
 Cash paid during the period for income taxes, net of refund

 $

 3,200

  

  

 $

 3,656

  

 

 
 Supplemental Non-Cash Investing and Financing Activities

  

  

  

  

  

 

 
 Non-cash acquisition of finance lease right-of-use assets

 $

 17,253

  

  

 $

 —

  

 

 
 Non-cash acquisition of operating lease right-of-use assets

 $

 5,129

  

  

 $

 77

  

 

 
 Common stock issued in acquisition of business

 $

 15,205

  

  

 $

 —

  

 

 
 Acquisitions of property and equipment included in liabilities

 $

 2,324

  

  

 $

 1,028

  

 

 
 Acquisition of business included in liabilities

 $

 —

  

  

 $

 485

  

 

  
The accompanying notes are an integral part of the condensed consolidated financial statements

 6

 
  

 Karman Holdings Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1.Organization and Basis of Presentation

Description of Business
Karman Holdings Inc. (the “Company”) conducts business as Karman Space and Defense (“Karman”). Karman is headquartered in Huntington Beach, California. It currently operates multiple subsidiaries in California, Washington, Oregon, Utah, Mississippi, Pennsylvania, South Carolina and Alabama.
Karman specializes in the rapid design, development and production of mission-critical, next-generation system solutions for launch vehicle, satellite, spacecraft, missile defense, hypersonic and Unmanned Aircraft Systems (“UAS”) customers. Karman’s integrated payload protection, propulsion, and hydro/aerodynamic interstage system solutions are deployed across a wide variety of existing and emerging programs supporting priority Department of War (“DoW”) and space sector initiatives.
Initial Public Offering
On February 12, 2025 the Company’s Registration Statement on Form S-1 for its initial public offering (the “IPO”) was declared effective. Prior to the effectiveness of the IPO, the Company was a Delaware limited liability company named TCFIII Spaceco Holdings LLC. On February 12, 2025,the Company converted into a Delaware corporation and changed its name to Karman Holdings Inc. Pursuant to the conversion, all outstanding equity interests and all outstanding P Units were converted into an aggregate of123.8 million shares of common stock of Karman Holdings Inc.
On February 14, 2025, the Company completed the IPO of 26.5 million shares of its common stock at a public offering price of $22.00 per share, of which, 8.4 million shares were sold by the Company. The aggregate net proceeds from the offering, after deducting underwriting discounts and commissions, payments to Phantom Unit holders and other offering expenses, were approximately $147.3 million. See Note 10 and Note 11 for details.
Basis of Presentation 
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented.

These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, include all adjustments of a normal recurring nature necessary to present fairly, in all material respects, the Company’s financial position, results of operations and cash flows. These unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Operating results for the three months periods presented are not necessarily indicative of the results to be expected for the full year. 
 
2. Summary of Accounting Policies and Recent Accounting Pronouncements
The accounting policies followed by the Company are set forth in Part II, Item 8, Note 2, Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Use of Estimates 
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. Management periodically evaluates estimates used in the preparation of the financial statements for continued reasonableness. Appropriate adjustments, if any, to estimates are made prospectively based upon such periodic evaluations. It is reasonably possible that changes may occur in the near term that would affect managements’ estimates with respect to revenue recognition, estimates of cost to complete contracts, allowance for credit losses, share-based payments, accrued expenses, inventory, deferred taxes, property and 

 7

 
  

 equipment and valuation of net assets acquired in business combinations, and the impairment assessment of goodwill and intangible assets. 
Recently Issued Accounting Pronouncements 
Recently Issued Accounting Pronouncements Adopted
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which simplifies the application of the current expected credit loss model for current accounts receivable and current contract assets under ASC 606. The update is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company adopted ASU 2025-05 on January 1, 2026, and the adoption did not have a material impact on the Company's consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which introduces targeted improvements to the recognition and measurement requirements for interim reporting. The amendments are intended to reduce the complexity of interim financial reporting by aligning certain requirements with those for annual reporting. The standard is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. The Company is assessing the effect of this update on our consolidated financial statements and related disclosures.
In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures. The ASU requires updated disclosures, in the notes to the financial statements, of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity disclose the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization and depreciation, depletion, and amortization recognized as part of oil and gas producing activities included in relevant expense captions. The amendments also require disclosure of qualitative descriptions of amounts remaining in relevant expense captions that are not separately disaggregated and to disclose the total amount of selling expenses as well as the entity’s definition of selling expenses. The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2027, and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and footnote disclosures.

3. Revenue 
The Company recognizes revenue for each separately identifiable performance obligation in a contract representing a promise to transfer a distinct good to a customer. In most cases, goods provided under the Company’s contracts are accounted for as a single performance obligation due to the complex and integrated nature of its products. These contracts generally require significant integration of a group of goods to deliver a combined output. Warranties are provided on certain contracts, but do not typically provide for services beyond standard assurances and are therefore not considered to be a separate performance obligation. Assets recognized from costs to obtain or fulfill a contract are not material. Payment terms are typically forty-five days, but may vary. 
The Company generates revenue under a range of contract types including fixed-price, time and material and cost-plus fixed fee contracts. Substantially all revenue is recognized over time as control is transferred to the customer, measured with the input method based on costs incurred compared to estimated total costs at completion. In general, the Company’s contracts contain termination clauses that entitle the Company to payment for work performed to-date for goods that do not have an alternative use. Amounts recoverable in the event of terminations include reasonable profit margins. Control is effectively transferred as the Company performs its contractual obligations. 
Remaining Performance Obligation
As of March 31, 2026, the Company had $723.3 million of remaining performance obligations. The Company expects to recognize approximately 42.0% of the remaining performance obligations as revenue in remaining 2026, 24.1% in 2027, and 33.9% thereafter.
Contract Estimate

 8

 
  

 The Company generally recognizes revenue over time using the input method, measured by the percentage of total costs incurred to-date relative to estimated total anticipated costs for each contract. This method is used because the Company considers total costs to be the best available measure of progress toward satisfaction of its performance obligations. Use of the input method requires the Company to make reasonable estimates regarding the costs associated with the design, manufacture, and delivery of its products. 
The Company estimates profit on these contracts as the difference between total estimated revenue and total estimated costs at completion (EAC) and recognizes profit as costs are incurred. Significant judgment is used to estimate total costs at completion. EAC’s are estimated using historical actual margins as a percentage of revenue, applied to open contracts. Unforeseen events and circumstances can alter the estimate of the costs and potential benefits associated with a particular contract. 
The nature of Company’s business can give rise to significant contract modifications, which can impact performance obligations and transaction price. A contract modification exists when the parties to a contract agree to a change in the scope and/or price of a contract. Contracts are often modified for changes in contract specifications or requirements. Most of the Company’s contract modifications are for goods that are not distinct in the context of the contract and are therefore accounted for as part of the original performance obligation through a cumulative catch-up adjustment in the period they are identified. 
Changes in contract estimate, including those arising from contract modifications, may result in the recognition of revenue in the current period for performance obligations satisfied or partially satisfied in prior periods or the reversal of previously recognized revenue when current estimates differ from prior estimates. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, the Company recognizes the total loss in the condensed consolidated statements of income (loss) in the period in which it is identified. During the three months ended March 31, 2026 and 2025, changes in contract estimates on revenue recognition were immaterial.
Contract Assets and Liabilities
The timing of Company billings is generally dependent upon agreed-upon contractual terms, milestone billings based on the completion of certain phases of the work, or when products are provided. Billing can occur prior to revenue recognition, resulting in deferred revenue or subsequent to revenue recognition, resulting in unbilled revenue. The asset, “contract assets” represents revenue recognized in excess of amounts billed. These contract assets are not considered a significant financing component of the Company’s contracts as the payment terms are intended to protect the customer in the event the Company does not fulfill its obligations under the contract. The liability, “contract liabilities” represents amounts billed in excess of revenue recognized. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. 
The following table summarizes our contract assets and liabilities: 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 March 31,

  

  

 December 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
  

  

 (in thousands)

  

 

 
 Contract assets

  

 $

 169,370

  

  

 $

 156,298

  

 

 
 Contract liabilities

  

 $

 25,752

  

  

 $

 22,814

  

 

 Changes in contract assets and contract liabilities are primarily due to the timing of payments from customers and the Company satisfying performance obligations during the normal course of business. The amount of revenue recognized from changes in the transaction price associated with performance obligations satisfied in prior year during the period ended March 31, 2026 and December 31, 2025 was not material. The following table summarizes the changes in contract assets and contract liabilities for the three months ended March 31, 2026 and 2025:

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 March 31,

  

  

 March 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
  

  

 (in thousands)

  

 

 
 Contract assets, beginning of period

  

 $

 156,298

  

  

 $

 107,222

  

 

 
 Contract assets recorded during the period

  

  

 85,552

  

  

  

 61,662

  

 

 
 Reclassified to accounts receivable during the period

  

  

 (72,480

 )

  

  

 (46,730

 )

 

 
 Contract assets, end of period

  

 $

 169,370

  

  

 $

 122,154

  

 

  

 9

 
  

  

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 March 31,

  

  

 March 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
  

  

 (in thousands)

  

 

 
 Contract liabilities, beginning of period

  

 $

 22,814

  

  

 $

 29,868

  

 

 
 Customer advances received or billed

  

  

 11,290

  

  

  

 7,269

  

 

 
 Recognition of unearned revenue

  

  

 (8,352

 )

  

  

 (11,136

 )

 

 
 Contract liabilities, end of period

  

 $

 25,752

  

  

 $

 26,001

  

 

 
Disaggregation of Revenue
The following table presents our disaggregated revenue and revenue growth by end-markets for the three months ended March 31, 2026 and 2025, respectively. Substantially all of the Company’s customers are government or commercial enterprises based in the United States. 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three Months Ended March 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
  

  

 (in thousands, except percent)

  

 

 
 Hypersonics & Strategic Missile Defense

  

 $

 35,688

  

  

 $

 30,056

  

 

 
 Space & Launch

  

  

 43,854

  

  

  

 33,871

  

 

 
 Tactical Missiles & Integrated Defense Systems

  

  

 45,260

  

  

  

 36,197

  

 

 
 Maritime Defense Systems

  

  

 26,408

  

  

  

 —

  

 

 
 Total revenue

  

 $

 151,210

  

  

 $

 100,124

  

 

 

 
4. Supplemental Financial Statement Data
Inventory 
The Company determines the cost basis for inventory using the lower of cost or net realizable value. Cost is determined by using the weighted average method. The following table summarizes our inventory:
 

 
 
 
 
 
 
 
 
 
 
 

 
  

 March 31,

  

  

 December 31,

  

 

 
  

 2026

  

  

 2025

  

 

 
 Raw materials

 $

 14,150

  

  

 $

 7,644

  

 

 
 Work in progress

  

 1,479

  

  

  

 1,974

  

 

 
 Finished goods

  

 511

  

  

  

 1,044

  

 

 
 Inventory

 $

 16,140

  

  

 $

 10,662

  

 

 
Accounts Receivable and Credit Loss Reserves
Accounts receivable are comprised of unsecured amounts due from customers and presented net of any allowance for credit losses. The Company recognizes its estimate of expected losses on accounts receivable within the scope of the current expected credit losses (“CECL”) model. All accounts receivable balances 180 days beyond the contractual due date will be reserved at 50% and balances one year beyond the contractual due date will be reserved at 100%. For contract assets, the Company establishes a reserve for contract assets when a job exceeds a certain length of inactivity unless there is persuasive evidence the balance will still be recoverable. 
The following table summarizes accounts receivable as of March 31, 2025 and December 31, 2025, and the change in allowance for credit losses for the three months ended March 31, 2026 and 2025:

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 March 31,

  

  

 December 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
  

  

 (in thousands)

  

 

 
 Accounts receivable, gross

  

 $

 100,109

  

  

 $

 79,599

  

 

 
 Allowance for credit losses

  

  

 (1,495

 )

  

  

 (883

 )

 

 
 Accounts receivable, net of allowance for credit losses

  

 $

 98,614

  

  

 $

 78,716

  

 

  

 10

 
  

  

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 March 31,

  

  

 March 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
  

  

 (in thousands)

  

 

 
 Allowance for credit losses, beginning balance

  

 $

 (883

 )

  

 $

 (712

 )

 

 
 Credit loss recoveries (expenses)

  

  

 (106

 )

  

  

 79

  

 

 
 Write-offs

  

  

 58

  

  

  

 119

  

 

 
 Other

  

  

 (564

 )

  

  

 —

  

 

 
 Allowance for credit losses, ending balance

  

 $

 (1,495

 )

  

 $

 (514

 )

 

 
Concentration of Credit Risk
For the three months ended March 31, 2026, the Company had two customers with greater than 10% of the Company’s revenue, these customers comprised 25.6% and 11.6% of the Company’s total revenue. These two customers accounted for 27.8% and 40.7% of accounts receivable, as of March 31, 2026 and December 31, 2025, respectively.
For the three months ended March 31, 2025, the Company had three customers with greater than 10% of the Company’s revenue, these customers comprised 23.4%, 15.5% and 13.7% of the Company’s total revenue. 
One supplier accounted approximately 12.0% and 23.8% of accounts payable as of March 31, 2026 and December 31, 2025, respectively. 
 
Property and Equipment
Property and equipment consisted of the following as of March 31, 2026 and December 31, 2025: 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 March 31,
2026

  

  

 December 31,
2025

  

 

 
  

  

 (in thousands)

  

 

 
 Land and buildings

  

 $

 6,611

  

  

 $

 6,611

  

 

 
 Machinery and equipment (7-10 year assets)

  

  

 91,418

  

  

  

 85,729

  

 

 
 Vehicles (5 year assets)

  

  

 432

  

  

  

 265

  

 

 
 Office furniture and equipment (5-7 year assets)

  

  

 2,489

  

  

  

 1,435

  

 

 
 Computer systems (3 year assets)

  

  

 3,144

  

  

  

 2,941

  

 

 
 Leasehold improvements (life tied to lease duration)

  

  

 22,096

  

  

  

 18,840

  

 

 
 Construction in process

  

  

 23,959

  

  

  

 18,972

  

 

 
 Total property and equipment

  

  

 150,149

  

  

  

 134,793

  

 

 
 Less accumulated depreciation

  

  

 (42,831

 )

  

  

 (39,384

 )

 

 
 Property and equipment, net

  

 $

 107,318

  

  

 $

 95,409

  

 

 
Depreciation expense for the three months ended March 31, 2026 and 2025 was $3.4 million and $2.8 million, respectively, of which, $2.9 million and $2.1 million was recorded in cost of goods sold, respectively, and the remainder in operating expenses in the accompanying unaudited condensed consolidated statements of income (loss). 

 
5.Business Combination

MTI acquisition
On April 2, 2025 (the “MTI Acquisition Date”), the Company, through its indirect wholly-owned subsidiary Karman Parent LLC (“Karman Parent”), acquired all the issued and outstanding membership interests and other equity interests of MTI Metal Technology Inc., pursuant to the terms of a Securities Purchase Agreement (the “MTI Agreement”) in exchange for cash consideration (the “ MTI Acquisition”). The acquisition of MTI expands the Company’s capabilities in advanced materials and is expected to strengthen its position in the strategic missile defense market through enhanced product offerings and customer relationships. 
The MTI Acquisition met the requirements to be considered a business combination under ASC 805. The assets and liabilities acquired, affected for adjustments to reflect fair values assigned to assets purchased and liabilities assumed, and results of operations, 

 11

 
  

 are included in the Company’s condensed consolidated financial statements from the MTI Acquisition Date. The Company recorded the acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the acquisition date as required under ASC 805.
The MTI Acquisition was funded with borrowings from the Company’s term note under its Citibank credit agreement and was accounted for using the acquisition method of accounting. The fair value of the total purchase consideration transferred was $82.3 million. The MTI Acquisition does not have any contingent consideration arrangements.
Acquisition-related costs for the MTI Acquisition have been expensed as incurred and are included in general and administrative expenses in the condensed consolidated statements of income (loss). No acquisition-related expenses were recorded for the three months ended March 31, 2026 or 2025.
The accounting for the MTI Acquisition w