Key Highlights

  • TATT reported record third-quarter 2026 Revenue of $55.6 million, up 20.2% from $46.2 million.
  • Gross Margin reached a record 30.9%, with Gross Profit up 48.2% to $17.2 million.
  • Net income rose to $7.7 million, or $0.58 per diluted share, from $4.8 million, or $0.37.
  • Adjusted EBITDA hit a record $10.9 million, or 19.6% of revenue, up 60.9%.
  • Backlog fell to $577 million from $615 million at the end of the second quarter.

Record $55.6 Million Quarter Lifts Net Income to $7.7 Million

TAT Technologies (NASDAQ:TATT) reported third-quarter 2026 results for the quarter ended Sep 30, 2026, on Nov 2, 2026. Revenue grew 20.2% to a record $55.6 million, compared with $46.2 million a year earlier. Net income rose to $7.7 million from $4.8 million, and Diluted Earnings per Share increased to $0.58 from $0.37.

The company provides aviation aftermarket services, including repair and overhaul of auxiliary power units (APUs) and heat exchangers, as well as trading, leasing and distribution of aircraft parts. Operating Income reached $9.0 million, or 16.3% of revenue, versus $5.3 million, or 11.4%.

For the first nine months of 2026, revenue increased 13.8% to $149.6 million and net income rose 58.3% to $19.1 million. Excluding a one-time $3.4 million after-tax gain on an equity-method asset sale in the second quarter, nine-month net income would have been about $15.7 million, or $1.46 per diluted share versus $1.02.

APU Revenue Jumps 34.4% and Trading and Distribution Surges 85.5%

APU revenue grew 34.4% in the quarter, supported by new contract wins, an improving Supply chain and a return to full operating run rate. Heat exchanger revenue rose 7.3%. Trading, leasing and distribution revenue climbed 85.5%, helped by several large transactions and a new distribution agreement with a major OEM, though management said quarterly results in that segment will fluctuate with deal timing.

Gross profit climbed 48.2% to $17.2 million, a record gross margin of 30.9%, as capacity shifted from landing gear to higher-margin APU work and the efficiency initiatives took full effect. Adjusted EBITDA, a non-GAAP measure, rose 60.9% to $10.9 million, or 19.6% of revenue, from $6.8 million, or 14.6%.

Landing Gear Contracts Come Out of a Backlog That Eases to $577 Million

Backlog was $577 million at quarter-end versus $615 million at the end of the second quarter. The decline reflects $34 million of landing gear contracts that management removed because components are short, and excluding them backlog was essentially unchanged. Landing gear made up less than 4% of third-quarter revenue.

Long-term agreements account for roughly 60% to 65% of revenue, while 35% to 40% comes from short-term needs. One of those MRO agreements was recently extended to 2036.

Operating cash flow was $3.8 million after a $10.6 million inventory build, mostly to support the distribution channel. The company ended the quarter with net cash of $42.6 million, a Debt-to-Equity Ratio of 6% and a new $100 million three-year revolving Credit facility. It also converted shekel-denominated loans into US dollar loans to lower interest costs and remove currency exposure.

Taxes Starting in 2027 and Sustained Margins Shape the Final Quarter Outlook

Management expects to finish 2026 on a strong note and said the average margin of the last three quarters is a reasonable guide for the near term. It expects to use its remaining tax-loss carryforwards in Israel and the United States and begin paying income taxes in 2027 at an average rate of about 15% to 19%. The company did not publish formal guidance and said it is open to strategic acquisitions to build on its aftermarket platform.