Astronics Q1 Earnings Call Highlights
Astronics (NASDAQ:ATRO) raised its full-year 2026 revenue outlook after reporting a stronger first quarter marked by record bookings and backlog, higher margins and broad demand across its aerospace and test systems businesses.
Chairman, President and CEO Peter Gunderman said the company viewed the quarter as “a strong start to the year,” citing revenue at the high end of its guidance range and the second-highest quarterly total in Astronics’ history, behind only the fourth quarter of 2025. Chief Financial Officer Nancy Hedges reported first-quarter sales of $231 million, up 12% from $206 million in the prior-year period. The total included $4.6 million from the BMA acquisition.
The company increased its 2026 revenue guidance to a range of $970 million to $1 billion, up from its prior outlook of $950 million to $990 million. Gunderman said the midpoint of the new range would represent a 14% increase over 2025 sales, while the high end would represent 16% growth. He said the forecast assumes organic growth.
Bookings and Backlog Reach Records
Astronics reported bookings of more than $290 million in the first quarter, producing a book-to-bill ratio of 1.26. Gunderman said the bookings total was an all-time record and was not driven by a single large order.
“Rather, it was driven by growing customer demand across our business, demonstrating strong market conditions for our full range of products,” Gunderman said.
Backlog ended the quarter at $734 million, also an all-time record. Hedges said aerospace backlog reached $651.4 million, up from $600.8 million at the end of 2025, while test systems backlog ended the quarter at $83 million.
Gunderman also addressed the conflict involving Iran, saying Astronics had seen “no war-related pushouts, delays, or cancellations” since hostilities began in late February. In response to an analyst question, he said Middle East airlines were being affected in terms of flights and traffic, but the company had not seen a business impact. He added that rising fuel prices could pressure low-cost carriers, though he said those carriers are not typically major customers for Astronics’ in-flight entertainment and connectivity products.
Margins Improve as Earnings Rise
Gross profit rose to $75 million, or 32.6% of sales, compared with $61 million, or 29.5% of sales, in the first quarter of 2025. Hedges said the 310-basis-point improvement reflected higher volume, improved productivity and a $2.8 million cumulative catch-up adjustment on the MV-75 program, which added about 120 basis points of margin. Those benefits were partially offset by a $1.7 million increase in tariff expenses.
Income from operations more than doubled to $27.2 million from $13.1 million a year earlier. Adjusted operating Income was $29.6 million, with adjusted operating margin of 12.8%, up from 11% in the prior-year period.
Net income was $25.5 million, or $0.67 per diluted share, compared with $9.5 million, or $0.26 per diluted share, in the first quarter of 2025. Adjusted net income rose to $22.5 million from $17 million, and adjusted diluted earnings per share increased to $0.59 from $0.44.
Adjusted EBITDA was $37.9 million, up 23.3% from $30.7 million, while adjusted EBITDA margin expanded to 16.4% from 14.9%.
Aerospace Leads Growth
Aerospace segment sales rose 11.7% to $213.8 million. Hedges said commercial transport sales increased 13.7% to $156.4 million, driven by higher demand for seat motion and lighting and safety products, along with continued strength in in-flight entertainment and connectivity, or IFEC. General aviation sales rose 40.7% to $21.4 million, primarily from higher IFEC product sales into the VVIP market. Military aircraft sales were essentially flat at $33.5 million.
Astronics also recast its product line sales into categories aligned with its strategic focus areas. Hedges said IFEC revenue, which includes passenger power and connectivity hardware, was $110.7 million, up 7.4% and representing just over 48% of total sales. Lighting and safety revenue rose 1.6% to $52.8 million. Flight-critical electrical power sales increased 16.2% to $24.8 million.
Seat motion sales were $13.2 million, nearly doubling from $6.7 million in the prior-year quarter, according to Hedges, reflecting strong demand and the contribution from the BMA acquisition. Gunderman later said first-quarter seat motion sales were $20 million under the new product line presentation and that the company expects year-over-year growth in 2026 to be “north of 100%.”
Aerospace operating profit was $35.3 million, or 16.5% of sales, compared with $22.3 million, or 11.6% of sales, a year earlier. Hedges attributed the improvement to higher volume, production efficiencies, the MV-75 profit catch-up and lower litigation-related expense and reserve adjustments connected to a U.K. patent dispute, partially offset by tariffs.
Test Systems Await Army Program Production
Test systems sales increased 15.4% to $16.8 million from $14.6 million. Segment operating profit was $400,000, compared with an operating loss in the prior-year quarter.
Management said it expects the U.S. Army Radio Test Program to move into production in the coming weeks. Gunderman said Astronics was the sole-source winner of an IDIQ program valued by the Army at $215 million over an expected five-year performance period. In response to an analyst question, he said a full-year revenue contribution from the program could be $40 million to $50 million, with about $20 million expected in the second half of 2026.
Outlook Points to Record Second Quarter
For the second quarter, Astronics expects sales of $245 million to $250 million, which Hedges said would be a new quarterly record for the company. She said revenue is expected to increase further in the second half as the Army Radio Test Program enters production and aerospace programs continue to ramp.
Hedges said the company remains focused on reaching sustainable high-teens adjusted operating margins on a consolidated basis, supported by volume leverage, productivity improvements, lower litigation costs and product mix.
Gunderman said Astronics is benefiting from five major market forces: rising commercial aircraft production rates, demand for onboard connectivity and power, growth in flight-critical electrical power products, momentum in seat motion and an improving outlook for test systems. He said Boeing’s 777X, expected to come online next year, would be “a significant program” for Astronics.
Cash from operations was $10.6 million in the quarter, compared with $20.6 million a year earlier, reflecting higher working capital needs to support revenue growth. capital expenditures were $11.2 million, up from $2.1 million, as the company invested in capacity, productivity and facility consolidation, including work at a new Seattle facility expected to be completed in the second quarter. Astronics expects full-year 2026 capital expenditures of $40 million to $45 million.
About Astronics (NASDAQ:ATRO)
Astronics Corporation (NASDAQ: ATRO) is a global leader in the design and manufacture of advanced technologies primarily for the aerospace, defense and semiconductor industries. Headquartered in East Aurora, New York, the company was founded in 1968 and has grown through a combination of internal development and strategic acquisitions. Astronics operates multiple business units focused on power conversion, distribution and control; cabin electronics and connectivity; aircraft lighting and safety solutions; and automated test systems.
The company's aerospace products include onboard power generation and management systems, in-flight entertainment and connectivity hardware, LED and fluorescent lighting for aircraft cabins and cockpits, and safety equipment such as escape slide power units.
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