TLDR
-
Graham Corporation stock rose 14.50% to $48.09 following strong Q4 and fiscal 2025 results.
-
Q4 revenue grew 21% year-over-year, gross margin expanded to 27.0%.
-
Full-year sales up 13%, with record backlog of $412.3 million.
-
Fiscal 2026 revenue guidance set between $225M–$235M, signaling 10% growth at mid-point.
-
CEO Daniel J. Thoren to transition to Executive Chairman; Matt Malone appointed as new CEO.
Graham Corporation ($GHM) stock soared 14.50% to $48.09 in early trading on June 5, 2025, after the company reported solid fourth-quarter and full-year fiscal 2025 results.
The earnings call is scheduled for 11 AM EDT. Revenue for the quarter ending March 31, 2025, climbed 21% year-over-year to $59.3 million, supported by robust demand across all business segments. Gross margin expanded 110 basis points to 27.0%, while operating margin improved to 9.3%, up from 3.1% a year earlier.
Net income for the quarter totaled $4.4 million, with adjusted net income at $4.8 million and adjusted EBITDA of $7.7 million, representing 12.9% of sales.
For the full fiscal year 2025, Graham delivered sales growth of 13%, totaling $209.9 million. Gross margin for the year expanded 330 basis points to 25.2%, while net income rose sharply to $12.2 million compared to $4.6 million in the prior year. Adjusted EBITDA reached $22.4 million, 10.7% of sales.
Defense Market Drives Growth
Sales to the defense sector were a major driver of revenue expansion. In Q4, defense sales increased by 28%, or $7.7 million, driven by program growth, better execution, pricing improvements, and milestone achievements. Energy & Process sales contributed $1.8 million in growth, mainly from foreign capital equipment and aftermarket sales.
The defense segment accounted for 83% of Graham’s record $412.3 million backlog as of March 31, 2025, ensuring revenue visibility into the next two years. The company booked $86.9 million in new orders during Q4, including a $50 million contract for submarine program materials.
Operational Investments and Cost Management
Gross profit for fiscal 2025 rose to $52.9 million, benefiting from higher volumes, improved pricing, and a $1.3 million government grant for welder training. SG&A expenses increased to $38.9 million, reflecting investments in personnel, technology upgrades like ERP implementation, and costs related to the P3 Technologies acquisition.
Operating cash flow for the year was $24.3 million, with $19.0 million in capital expenditures focused on facility and capability expansion. The company ended fiscal 2025 debt-free, with $21.6 million in cash and $44.7 million available on its credit facility.
Management Transition in Place
Graham announced leadership changes aligned with its succession plan. Effective June 10, 2025, CEO Daniel J. Thoren will assume the role of Executive Chairman. Matt Malone, current President and COO, will step in as CEO.
Outlook for Fiscal 2026
For fiscal 2026, Graham anticipates revenue of $225 million to $235 million, up 10% at the midpoint. Adjusted EBITDA is forecasted between $22 million and $28 million. The outlook includes an estimated $2 million to $5 million tariff impact, subject to trade policy changes.
The company remains confident in meeting its long-term targets, supported by organic growth initiatives and potential acquisitions.
