Bloomfield, Connecticut, October 28 /PRNewswire/ -- Arxis, Inc. (Nasdaq: ARXS) (the “Company” or “Arxis”) today announced its financial results for the third quarter ended September 30, 2026. Arxis is a leading designer and manufacturer of proprietary critical electronic and mechanical engineering components.
Highlights for Q3 2026 (all comparisons below are against Q3 2025 unless otherwise noted):
- Revenue of $564 million, up 36% year-over-year
- Net profit of $84 million, compared to a net loss of $10 million in the same period last year; net profit margin of 14.8%, compared to -2.4% in the same period last year.
- Diluted earnings per share of $0.20
- Adjusted EBITDA (1) was $256 million, a 67% year-over-year increase; adjusted EBITDA margin (1) improved by 840 basis points to 45.4%.
- Adjusted net profit was $160 million, representing a 498% year-over-year increase.
- Adjusted diluted earnings per share (1) is $0.37
- Net cash flow from operating activities was $169 million, an 118% year-over-year increase; free cash flow (1) was $150 million, an 117% year-over-year increase.
Raise full-year 2026 guidance (all comparisons below are against the midpoint of prior guidance, unless otherwise noted):
- Revenue range of $2.05 billion to $2.07 billion represents a 5% increase.
- The adjusted EBITDA (1) range is $855 million to $865 million, representing an 8% increase.
- Adjusted EBITDA margin (1) was approximately 41.7%, up 130 basis points.
Providing guidance for 2027 for the first time (unless otherwise noted, all comparisons below are against the midpoint of the 2026 guidance):
- Revenue range of $2.4 billion to $2.5 billion represents reported revenue growth of 17% to 21% and organic growth of 10% to 15%.
- Adjusted EBITDA (1) range is $1.01 billion to $1.06 billion, representing growth of 17% to 23%.
- The adjusted EBITDA margin (1) is 42.1% to 42.4%, including approximately 20 to 30 basis points of dilution from acquisitions expected to be completed in 2026.
Kevin Perhamus, President and CEO of Arxis, said: “We continue to advance our M&A strategy, completing the acquisitions of Schatz Bearing and StratEdge, as well as the previously announced Omnetics transaction, bringing our total number of acquisitions this year to six. With the support of Arcline and an active pipeline of deals, we are well positioned to sustain this momentum.”
Revenue increased 36% this quarter, including 29% organic growth, with all three end markets performing strongly. Net income rose by $94 million to $84 million, with a net margin of 14.8%. Adjusted EBITDA increased 67% to $256 million, with margins expanding by 840 basis points to 45.4%, reflecting operating leverage from higher shipment volumes, stronger pricing realization, and continued productivity gains. Net cash flow from operations was $169 million, and free cash flow was $150 million, representing increases of 118% and 117% respectively, driven by profit growth and more efficient working capital management.
Our strong performance and contributions from recent acquisitions support us in raising our full-year 2026 guidance once again. We are also providing our first 2027 guidance, anticipating another year of robust organic growth and continued margin expansion, supported by the execution of our long-term growth algorithm.
Unaudited condensed consolidated results for the third quarter of 2026
Revenue of $564 million, up 36% year-over-year, including 29% organic growth, reflecting sustained momentum across three end markets. Industrial Technologies led the quarter, driven by favorable demand trends; Defense & Aerospace and Commercial Aerospace both achieved strong double-digit growth. Both Electronics Components and Mechanical Components segments contributed to growth, supported by underlying market demand, new business wins, and pricing realization.
Net profit was $84 million, an increase of $94 million year-over-year, with a net profit margin of 14.8%, compared to -2.4% in the same period last year. The improved performance was primarily driven by stronger operational results, lower interest expenses following the use of IPO proceeds to repay debt, and reduced income tax expenses.
Adjusted EBITDA (1) increased 67% year-over-year to $256 million, and adjusted EBITDA margin (1) expanded by 840 basis points to 45.4%. The margin expansion reflects operating leverage from higher sales volumes, disciplined pricing execution, and continued productivity and cost management initiatives.
Recent acquisition activities
On August 17, 2026, Arxis completed its previously announced acquisition of Omnetics Connector Corporation (“Omnetics”). Omnetics is a leading designer and manufacturer of proprietary high-reliability Micro-D-Sub and Nano-D-Sub connectors and interconnect systems used in critical defense and aerospace, commercial aviation, and medical applications.
In September 2026, Arxis completed the acquisition of Schatz Bearing, LLC (“Schatz”) and StratEdge Corporation (“StratEdge”). Schatz produces highly engineered precision bearings for aerospace, defense, and industrial applications. StratEdge designs and manufactures ceramic packages for high-frequency, high-power electronics used in defense, aerospace, and other demanding applications.
The combined purchase price for these two acquisitions is approximately $151 million.
Full-year 2026 guidance
The 2026 adjusted EBITDA margin guidance includes approximately 30 to 40 basis points of dilution from acquisitions expected to be completed in 2026.
Full-year 2027 guidance
The 2027 adjusted EBITDA margin guidance includes approximately a 20 to 30 basis point dilution from acquisitions completed in 2026.
Telephone conference and live stream information
Arxis will hold an investor conference call on Thursday, October 29, 2026, at 8:30 AM Eastern Time to discuss third-quarter results. A live webcast of the call and related presentation materials will be available on the company’s News & Events section 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 critical electronic and mechanical components serving the aerospace & defense, medical technology, and specialized industrial markets. Leveraging strong intellectual property and world-class engineering and operational capabilities, Arxis designs and delivers innovative solutions to meet customers’ most complex performance requirements. Arxis is a portfolio company of Arcline Investment Management. For more information, visit www.arxis.com.
About Arcline Investment Management
Arcline Investment Management is a private investment firm managing over $35 billion in assets. Arcline is dedicated to building the next-generation industrial conglomerate platform—market-leading, mission-critical industrial platforms designed to deliver compounded returns over decades. For more information, visit www.arcline.com.
Non-GAAP financial metrics
This press release contains certain "non-GAAP financial measures," which are financial measures that exclude or include amounts other than those included in the most directly comparable measures calculated and presented in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), including adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted diluted net income per share, free cash flow, and net leverage. The company uses these non-GAAP financial measures to evaluate its business operations.
The non-GAAP financial measures set forth in this press release are supplemental performance and liquidity metrics that the company believes help investors understand its financial condition and operating results and assess future prospects. The company believes it is important to disclose these non-GAAP financial measures in addition to the corresponding U.S. GAAP financial measures because they exclude non-cash or other items that may not reflect core operating results or the overall health of the company. The company believes these non-GAAP financial measures provide investors with greater transparency, enabling them to understand the information used by management in making operating decisions and allowing investors to view the company’s performance from a “management perspective.” The company further believes that providing this information helps investors understand the company’s operating performance and the methods management uses to evaluate and measure it. When read in conjunction with U.S. GAAP results, these non-GAAP financial measures serve as a benchmark for analyzing underlying business trends and may also serve as one of the bases for management’s financial, operational, and planning decisions. Finally, these measures are commonly used by analysts and other parties to evaluate peer companies.
The company defines adjusted EBITDA as net income (loss) before net interest expense, income tax expense (benefit), and depreciation and amortization, and further adjusted for transaction costs and other transaction-related expenses, acquisition and integration costs, restructuring costs, share-based compensation expenses and related employer payroll taxes, and other non-recurring, non-operating, or non-representative adjustments to income and expenses that do not reflect core operating performance (as applicable). The company defines adjusted EBITDA margin as adjusted EBITDA divided by revenue. The company believes that adjusted EBITDA and adjusted EBITDA margin are important metrics for management and investors because they eliminate the impact of items that the company believes do not reflect core operating results or the overall financial health of the company, and facilitate consistent comparisons across different periods and with peers.
The company defines adjusted net income as net income (loss) adjusted to exclude amortization of intangible assets, acquisition and integration costs, restructuring costs, transaction and other transaction-related expenses, share-based compensation expenses and related employer payroll taxes, and other items that management believes do not reflect the company’s core operating performance, and to include the income tax effects related to these adjustments. Adjusted net income per share is calculated by dividing adjusted net income attributable to common shareholders by the weighted-average number of diluted common shares outstanding during the applicable period. The company believes that adjusted net income and adjusted net income per share provide useful supplemental measures for investors to evaluate the company’s underlying operating performance and compare results across periods.
The company defines free cash flow as net cash flow from operating activities minus capital expenditures. The company believes this metric helps management and investors assess the company’s ability to generate cash from its operations, which can be used to repay debt and pursue strategic investments and acquisitions.
The company defines net leverage as net debt divided by adjusted EBITDA for the past twelve months. Net debt is total debt minus cash and cash equivalents. The company believes this metric helps assess the company’s capital structure, level of indebtedness, and ability to repay debt.
Management acknowledges that these non-GAAP financial measures have limitations, including that other companies may calculate them differently, or use them in different contexts or for different purposes, which may affect comparability between companies. To address these and other limitations discussed below, management does not view these measures in isolation, nor does it consider them substitutes for the corresponding GAAP financial measures. A reconciliation to the most directly comparable GAAP financial measures is provided below. Readers should review the reconciliation tables below and should not rely on any single financial measure to evaluate the company’s business. Unless otherwise noted, amounts in the tables are presented in thousands of dollars. Certain columns and rows in the tables may not sum exactly due to rounding. Percentages reported are calculated based on the underlying figures in thousands of dollars.
Forward-looking statements
This press release contains forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995 and other securities laws, which are subject to risks and uncertainties. Such statements may include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “guidance,” “will,” “may,” or negative forms of these words and similar expressions.
These forward-looking statements reflect the company’s current expectations based on judgments and assumptions, and are inherently uncertain, subject to risks, uncertainties, and other factors that could cause actual results, performance, or achievements to differ materially from current expectations. Risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to: the company’s business being concentrated in the aerospace and defense industries; unique business risks associated with supplying companies contracted by the U.S. government; intense competition; rapid industry changes; declines in or slower-than-expected growth in the markets for the company’s products and services; cost overruns; supply and pricing of certain components and raw materials from suppliers; inflation; the possibility that the company’s products may not perform as expected; a decentralized organizational structure; restrictive covenants in debt and related agreements; the ability to comply with extensive government regulations; the ability to maintain government or industry approvals; product liability lawsuits and product recalls; the ability to acquire, maintain, protect, and enforce intellectual property and proprietary rights upon which the company’s business depends; the ability to realize the anticipated benefits of recent restructuring; and substantial transaction costs incurred and expected to continue to be incurred in connection with recent restructuring and as a publicly traded company.
These and other uncertainties may cause the company’s actual future results to differ materially from those expressed in forward-looking statements. Additional relevant factors are described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the company’s filings with the U.S. Securities and Exchange Commission, including those set forth in the company’s Form 10-Q quarterly report for the quarter ended September 30, 2026. Except as required by law or regulation, the company undertakes no obligation to update or revise any forward-looking statements. This press release also contains certain forward-looking financial information based on current estimates and projections, and actual results may differ materially.
Contact Information:
Investor Relations
[email protected]
+1 860-243-7100 (press 1 to contact Arxis)