Loar Holdings Inc. reported fourth‑quarter 2025 results that exceeded expectations, with adjusted earnings per share of $0.26 versus a consensus estimate of $0.197, a beat of $0.063 or roughly 32%. Revenue reached $131.75 million, topping the $130.6 million consensus by $1.15 million, or 0.9%. The company’s adjusted EBITDA margin held steady at 38.7%, matching the record margin achieved in the third quarter and underscoring its pricing power and operational leverage.
Full‑year 2025 performance continued to strengthen, with net sales rising 23.2% to $496.3 million and adjusted EBITDA growing 29.2%. The company’s 2025 adjusted EBITDA margin expanded to 38.1% from 36.3% in 2024, reflecting a favorable mix shift toward higher‑margin products and disciplined cost management.
Looking ahead, Loar lifted its 2026 full‑year sales guidance to $640‑$650 million from the prior $540‑$550 million range, while lowering adjusted EPS guidance to $0.76‑$0.80 from $0.98‑$1.03 and GAAP EPS guidance to $0.60‑$0.65 from $0.82‑$0.88. Management cited a projected interest expense of about $80 million in 2026 versus $25 million in 2025, driven by $685 million of debt used to fund the recent acquisitions of LMB Fans & Motors and Harper Engineering.
CEO Dirkson Charles said, "As we close the year, I am pleased to report that Loar once again delivered record results across key financial metrics, including Net Sales, Adjusted EBITDA, and Adjusted EBITDA Margin." He added, "Driven by favorable end‑market dynamics and disciplined execution across the organization, our team delivered strong operating performance while advancing our long‑term value creation strategy." Charles also noted, "We also successfully completed the acquisitions of LMB Fans & Motors and Harper Engineering, further strengthening our portfolio and expanding our growth platform as we enter the next phase of the company's evolution." CFO Glenn D'Alessandro highlighted operating cash flow, stating, "Through the nine months of 2025 the business has delivered strong performance and most notably has generated $82 million of operating cash flow." Milgrim, Loar’s senior vice president, described the acquisitions as "margin accretive," and Charles emphasized that proprietary products now represent 89% of the portfolio, up from 85% previously.
The earnings beat was driven by robust demand in core aerospace and defense markets and the successful integration of the LMB and Harper acquisitions, which added high‑margin product lines and expanded the company’s geographic reach. The maintained 38.7% EBITDA margin reflects pricing power and operational leverage, while the 29.2% EBITDA growth indicates effective cost control. The guidance shift—higher sales but lower EPS—signals management’s confidence in revenue expansion but caution about profitability, primarily due to the anticipated jump in interest expense from acquisition debt. The company expects the acquisitions to become accretive within a year, supporting the raised sales outlook.
Investors reacted cautiously, weighing the upside in revenue and margin strength against the higher interest costs that will pressure earnings in 2026. The market’s tempered response reflects concerns about valuation multiples and the impact of the projected $80 million interest expense on future profitability.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.