Loar Holdings Inc. ((LOAR)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Loar Holdings Inc. Earnings Call: Optimism Amidst Challenges
The recent earnings call for Loar Holdings Inc. exuded a positive sentiment, underscored by strong sales growth, record margins, and a promising outlook for 2026. Despite facing challenges such as margin dilution from recent acquisitions and expected normalization in defense growth, the company’s robust performance and strategic initiatives have set a confident tone for the future.
Record Sales and Margin Growth
Loar Holdings Inc. reported record sales of $127 million in the third quarter of 2025, marking a significant 15% increase compared to the previous year. The company also achieved a record adjusted EBITDA margin of 38.7%, reflecting a growth of 190 basis points from the prior year. This impressive financial performance highlights the company’s ability to capitalize on market opportunities and optimize its operational efficiency.
Strong Commercial Aftermarket and Defense Performance
The commercial aftermarket segment saw a remarkable 19% increase in sales during Q3 2025, driven by heightened demand for air travel and an aging fleet. Additionally, defense sales surged by 70%, fueled by new product launches and an expanded market share. These sectors have been pivotal in driving the company’s overall growth and profitability.
Positive 2026 Outlook
Looking ahead to 2026, Loar Holdings anticipates continued growth in both the commercial OEM and aftermarket sectors, projecting low double-digit increases. The company expects net sales to range between $540 million and $550 million, with an adjusted EBITDA margin of approximately 39%. This optimistic outlook is supported by strategic initiatives and market trends.
Successful New Product Growth
Loar Holdings is poised for new product growth, expecting a 3% increase over the next two years. This growth is attributed to new product certifications and the synergies realized from recent acquisitions, positioning the company to capitalize on emerging market opportunities.
Temporary Margin Dilution from Acquisitions
The acquisition of Beadlight resulted in some margin dilution during Q3 2025. However, this was offset by the overall increase in margins, demonstrating the company’s effective integration strategies and focus on long-term profitability.
Defense Market Growth Normalization
After a robust performance in 2025, defense growth is expected to decelerate to mid-single digits in 2026. This anticipated normalization reflects the previous market strength and the company’s strategic adjustments to maintain steady growth.
Guidance and Future Expectations
During the earnings call, Loar Holdings provided guidance for 2026, projecting net sales between $540 million and $550 million and adjusted EBITDA between $209 million and $214 million. The company expects an adjusted EBITDA margin of approximately 39%, with net income ranging from $80 million to $85 million and adjusted EPS between $0.98 and $1.03 per share. This guidance underscores the company’s confidence in sustaining growth and improving margins despite potential challenges in the aerospace and defense markets.
In conclusion, the earnings call for Loar Holdings Inc. highlighted a positive sentiment, driven by record sales and margins, strong sector performances, and a promising outlook for 2026. While challenges such as margin dilution and defense growth normalization exist, the company’s strategic initiatives and robust performance provide a solid foundation for future success.