Loar Q2 Earnings Call Highlights

Record quarter: Loar’s second-quarter sales rose 17% year over year to $172 million, while adjusted EBITDA margin expanded 220 basis points to a record 40.5%. Commercial OEM sales led growth, increasing 28%, supported by stronger Boeing and Airbus demand.

Raised 2026 outlook: The company now expects $665 million-$675 million in sales, $265 million-$270 million in adjusted EBITDA and adjusted EPS of $1.32-$1.36, with no additional acquisitions assumed.

Strong growth pipeline: Loar’s organic business pipeline reached approximately $750 million over the next five years, including $200 million of opportunities already secured through certifications, qualifications or purchase orders. Recent acquisitions Beadlight, LMB and Harper are performing ahead of expectations.

Loar NYSE: LOAR reported record second-quarter sales, adjusted EBITDA and adjusted EBITDA margin, while raising its full-year 2026 outlook as commercial aerospace demand and organic business wins supported growth. Chief Executive Officer and Executive Co-Chairman Dirkson Charles said the quarter marked the company’s 16th consecutive quarter of sequential adjusted EBITDA growth. He attributed the results to collaboration across business units, focused resource allocation and demand across commercial OEM, commercial aftermarket and defense markets.

Second-quarter sales rose 17% year over year to $172 million on a pro forma basis that includes Beadlight, LMB Fans & Motors and Harper Engineering. Net organic sales increased 12% from the prior-year quarter, according to Treasurer and Chief Financial Officer Glenn D’Alessandro.

Commercial OEM Leads End-Market Growth Commercial OEM sales increased 28% from the second quarter of 2025, making it the company’s fastest-growing end market for the second consecutive quarter. Charles said improved supply-chain conditions had unlocked demand for Loar’s components, with the Boeing 787, Airbus A320 family and Boeing 737 family among the platforms showing the largest sales increases.

Commercial aftermarket sales increased 12%, driven primarily by secular growth in air travel, D’Alessandro said. Charles said customers have been ordering more conservatively than earlier in the supply-chain disruption cycle, but he did not express concern about an inventory-related downturn. He said inventory levels in the supply chain had declined and that Loar expects stronger commercial aftermarket growth in 2027 than in 2026.

Defense sales increased 8% from the prior-year period. Management said the defense business remains subject to uneven government ordering patterns, particularly against a strong comparison in the prior year, but it sees no change in the underlying health of the market. For the full year, Loar expects commercial OEM revenue to rise by a high-double-digit percentage, commercial aftermarket sales to grow by a low-double-digit percentage, and defense revenue to increase by a mid-single-digit percentage. The outlook is on a pro forma basis, assuming all business units had been owned since the start of 2025.

Margins Improve Despite Acquisition Amortization Adjusted EBITDA increased by $20 million year over year, while adjusted EBITDA margin expanded 220 basis points to 40.5%, from 38.3% a year earlier. D’Alessandro cited operating leverage and execution of the company’s strategic initiatives, including productivity efforts, new-business wins and value-based pricing. Gross profit margin declined 60 basis points, largely due to higher non-cash amortization associated with acquired intangible assets from LMB and Harper Engineering. Excluding that non-cash effect, gross margin would have increased 100 basis points from...