Bloomfield, Connecticut, October 28th / PRNewswire / -- Arxis, Inc. (Nasdaq ticker: ARXS) (hereinafter referred to as the "Company" or "Arxis") today announced its financial results for the third quarter ending September 30, 2026. Arxis is a leading designer and manufacturer of proprietary key electronic and mechanical engineering components.

Highlights of the Third Quarter of 2026(Unless otherwise specified, the following comparisons are all for the third quarter of 2025):

• Revenues of $564 million, a year-on-year increase of 36%
• Net profit was 84 million US dollars, compared to a loss of 10 million US dollars in the same period last year; net profit margin was 14.8%, compared to -2.4% in the same period last year.
• Diluted earnings per share of $0.20
• After adjustment, EBITDA (1) amounted to 256 million US dollars, a year-on-year increase of 67%; after adjustment, the profit margin of EBITDA (1) increased by 840 basis points to 45.4%.
• After adjustment, the net profit (1) amounted to 160 million US dollars, a year-on-year increase of 498%.
• Adjusted diluted earnings per share (1) are $0.37.
• The net cash flow generated from operating activities was $169 million, a year-on-year increase of 118%; free cash flow (1) was $150 million, a year-on-year increase of 117%.

Upgraded the full-year guidance for 2026Unless otherwise specified, the following comparisons are all based on the values from previous guidelines:

• Revenue ranges from $2.05 billion to $2.07 billion, representing a growth of 5%.
• After adjustment, the range for EBITDA (1) is set between $855 million and $865 million, representing a growth of 8%.
• After adjustment, the EBITDA profit margin (1) is approximately 41.7%, an increase of 130 basis points.

First guidance for 2027 provided(Unless otherwise specified, the following comparisons are all based on the figures from the 2026 guidelines):

• Revenue ranges from $2.4 billion to $2.5 billion, representing a reported revenue growth of 17% to 21%, as well as an organic growth of 10% to 15%.
• After adjustment, the EBITDA (1) range is set from $1.01 billion to $1.06 billion, representing a growth of 17% to 23%.
• After adjustment, the EBITDA profit margin (1) is set between 42.1% and 42.4%, which includes a dilution of about 20 to 30 basis points due to the acquisition completed in 2026.

Arxis, President and CEO, Kevin Perhamus stated: "We continue to advance our mergers and acquisitions strategy, having completed the acquisitions of Schatz Bearing and StratEdge. At the same time, we also completed the previously announced Omnetics transaction, bringing our total number of acquisitions so far this year to six. With the support of Arcline and an active pipeline of deals, we are well-positioned to sustain this momentum."

Revenue increased by 36% this quarter, including 29% organic growth, with all three major terminal markets performing strongly. Quarterly net profit rose by $94 million to $84 million, with a net margin of 14.8%. After adjustment, EBITDA increased by 67% to $256 million, and the profit margin expanded by 840 basis points to 45.4%, reflecting higher shipment volumes, stronger price realization, and continued productivity improvements. Net cash flow from operating activities was $169 million, and free cash flow was $150 million, both growing by 118% and 117% respectively, thanks to profit growth and more efficient working capital management.

Our strong performance, as well as the contributions from recent acquisitions, have enabled us to raise our full-year guidance for 2026 once again. We are also providing guidance for 2027 for the first time; we expect that with the support of our long-term growth strategy, another year of strong organic growth and continued expansion of profit margins will be achieved.

Unaudited condensed consolidated results for the third quarter of 2026

Revenues amounted to 564 million US dollars, a year-on-year increase of 36%, including 29% organic growth, reflecting the sustained growth momentum in the three major terminal markets. The industrial technology business led the way this quarter, driven by favorable demand trends; both the defense and aerospace as well as commercial aviation businesses achieved strong double-digit growth. Both the electronic components and mechanical components business segments contributed to the growth, driven by basic market demand, acquisition of new business, and price realization.

Net profit was $84 million, an increase of $94 million compared to the same period last year, with a net profit margin of 14.8%, whereas it was -2.4% during the same period last year. The improvement in performance is mainly due to stronger operational results, a decrease in interest expenses after using the funds raised through IPO to repay debts, and a reduction in income tax expenses.

After adjustment, EBITDA increased by 67% year-on-year to $256 million, and the adjusted EBITDA profit margin expanded by 840 basis points to 45.4%. The expansion in profit margin reflects the operational leverage brought about by higher sales volumes, prudent pricing implementation, as well as ongoing productivity and cost management measures.

Recent Acquisition Activities

On August 17, 2026, Arxis completed the acquisition of Omnetics Connector Corporation ("Omnetics") as previously announced. Omnetics is a leading designer and manufacturer of proprietary, high-reliability Micro-D-Sub and Nano-D-Sub connectors and interconnection systems, which are used in critical defense and aerospace, commercial aviation, as well as medical applications.

In September 2026, Arxis completed the acquisitions of Schatz Bearing, LLC (“Schatz”), and StratEdge Corporation (“StratEdge”). Schatz produces highly engineered precision bearings for aerospace, defense, and industrial applications. StratEdge designs and manufactures ceramic packages dedicated to high-frequency, high-power electronic products for defense, aerospace, and other high-demand applications.

The combined purchase price for these two acquisitions is approximately $151 million.

2026 Annual Guidelines

After the adjustment in 2026, the EBITDA profit margin guidance includes a dilution of approximately 30 to 40 basis points due to the acquisition completed in 2026.

2027 Annual Guidance

After the adjustment in 2027, the EBITDA profit margin guidance will include a dilution of about 20 to 30 basis points due to the acquisition completed in 2026.

Teleconference and live webcast information

Arxis will hold a investor conference call on Thursday, October 29, 2026, at 8:30 a.m. Eastern Time to discuss the third-quarter results. The live webcast of the conference call and related presentation materials will be available on the company's website under the News and Events section: https :// ir.arxis.com. The replay of the live broadcast will be available for 30 days after the conference ends.

About Arxis

Arxis is a leading designer and manufacturer of proprietary key electronic and mechanical components, serving the aerospace and defense, medical technology, as well as professional industrial markets. Lending on its strong intellectual property and world-class engineering and operational capabilities, Arxis designs and provides innovative solutions to meet the most complex performance requirements of its customers. Arxis is a portfolio company under Arcline Investment Management. For more information, please visit www.arxis.com.

About Arcline Investment Management

Arcline Investment Management is a private investment firm that manages assets worth over $35 billion. Arcline is committed to creating the next generation of industrial composite platforms – namely, market-leading and mission-critical industrial platforms aimed at achieving sustained compound growth over several decades. For more information, please visit www.arcline.com.

Non-GAAP financial indicators

This press release contains several “non-GAAP financial indicators,” which are financial indicators that exclude or include certain amounts among the most directly comparable indicators calculated and presented under U.S. Generally Accepted Accounting Principles (“GAAP”). These include adjusted EBITDA, adjusted EBITDA profit margins, adjusted net profit, adjusted diluted earnings per share, free cash flow, and net leverage. The company uses these non-GAAP financial indicators to evaluate its business operations.

The non-GAAP financial indicators presented in this press release are supplementary performance and liquidity indicators. The company believes that these indicators help investors understand the company's financial condition and operating results, as well as assess its future prospects. In addition to the corresponding U.S. GAAP financial indicators, the company deems it important to disclose these non-GAAP financial indicators as they exclude non-cash items or other elements that may not reflect the core operating results or the overall health of the company. The company believes that these non-GAAP financial indicators provide investors with greater transparency, enabling them to understand the information used by management in making operational decisions and allowing them to view the company's performance from a "management perspective." Furthermore, the company believes that providing this information helps investors understand the company's operating performance and the methods used by management to evaluate and measure that performance. When read in conjunction with the U.S. GAAP financial results, these non-GAAP financial indicators provide a benchmark for analyzing underlying business trends and can also serve as one of the bases for management to make financial, operational, and planning decisions. Lastly, these indicators are also commonly used by analysts and other stakeholders to evaluate companies in the same industry.

The company will define the adjusted EBITDA as net profit (loss) before deducting net interest expenses, income tax expenses (income), as well as depreciation and amortization. Furthermore, it will adjust for transaction costs and other transaction-related expenses, acquisition and integration costs, restructuring costs, share-based payment expenses and related employer payroll taxes, as well as other non-recurring, non-operating, or income and expense adjustments that do not reflect core operating performance (where applicable). The company will define the adjusted EBITDA margin as the adjusted EBITDA divided by revenue. The company believes that the adjusted EBITDA and adjusted EBITDA margins are important indicators for management and investors, as they exclude items that the company considers do not reflect core operating results or the overall health of the company, and facilitate consistent comparisons over different time periods and compared to peers.

The company defines adjusted net profit as the net profit (loss) after excluding amortization of intangible assets, acquisition and integration costs, restructuring costs, transaction and other transaction-related expenses, share-based payment expenses, and related employer payroll taxes, as well as other items that management believes do not reflect the company's core operating performance. The impact of income tax related to these adjustments is also taken into account. The method for calculating adjusted earnings per share is to divide the adjusted net profit attributable to common shareholders by the diluted weighted average number of common shares during the applicable period. The company believes that adjusted net profit and adjusted earnings per share can provide investors with useful supplementary indicators for assessing the company's basic operating performance and comparing performance across different periods.

The company defines free cash flow as the net cash flow generated from operating activities minus capital expenditures. The company believes that this indicator helps management and investors assess the company's ability to generate cash from operations, which can be used for debt repayment, strategic investments, and acquisitions.

The company defines net leverage as net debt divided by the adjusted EBITDA of the past twelve months. Net debt is total debt minus cash and cash equivalents. The company believes that this indicator helps to assess the company's capital structure, debt level, and solvency.

Management acknowledges that these non-GAAP financial indicators have limitations, including the possibility that other companies may calculate them in different ways, or use them in different contexts or for different purposes, which can affect comparability between companies. To compensate for these limitations and others discussed below, management does not view these indicators in isolation, nor does it use them as a substitute for the corresponding financial indicators of US GAAP. A comparison table with the most directly comparable US GAAP financial indicators is provided below. Readers should refer to this comparison table and should not rely on any single financial indicator to assess the company's performance. Unless otherwise stated, the figures in the tables are presented in thousands of dollars. Some columns and rows in the tables may not add up exactly due to rounding. The percentages listed in the report are calculated based on the figures at the thousand-dollar level.

Forward-looking Statements

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995 and other securities laws, which are subject to risks and uncertainties. Such statements may include words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “guides,” “will,” “may,” or their negative forms, as well as similar expressions.

These forward-looking statements reflect the company's current expectations, which are based on judgments and assumptions and carry inherent uncertainties. They are subject to risks, uncertainties, and other factors that may cause actual results, performance, or achievements to differ significantly from these current expectations. Risks, uncertainties, and other factors that could lead to significant differences between actual results and those expressed or implied in the forward-looking statements include, but are not limited to: the company's business being concentrated in the aerospace and defense industries; unique business risks associated with supplying companies that have contracts with the U.S. government; intense competition; rapid changes in the industry; markets for the company's products and services experiencing declines or growth below expectations; cost overruns; the supply and pricing of certain components and raw materials from suppliers; inflation; the possibility that the company's products may not perform as expected; a decentralized organizational structure; restrictive covenants in debt and related agreements; the ability to comply with extensive government regulations; the ability to maintain government or industry approvals; product liability lawsuits and product recalls; the ability to acquire, maintain, protect, and enforce intellectual property and proprietary rights upon which the company's business depends; the ability to achieve the expected benefits of recent reorganizations; and significant transaction costs associated with the recent reorganization and being a publicly traded company, which have occurred and are expected to continue to occur.

These and other uncertainties may lead to significant differences between the company's actual future results and the statements contained in these forward-looking statements. For more relevant factors, please refer to the "Risk Factors" and "Management's Discussion and Analysis of Financial Conditions and Operating Results" sections in the documents submitted by the company to the U.S. Securities and Exchange Commission, including the content presented in the company's 10-Q quarterly reports for the quarter ending September 30, 2026. Except as required by law or regulation, the company has no obligation to update or revise forward-looking statements. This press release also contains certain forward-looking financial information based on current estimates and projections, and actual results may differ significantly.

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