Core Viewpoint - Graham reported a significant improvement in profitability for Q1 FY2026, with non-GAAP EPS of $0.45 exceeding analyst estimates, but GAAP revenue fell short of expectations at $55.5 million [1][2]. Financial Performance - Non-GAAP EPS increased by 36% year-over-year, from $0.33 in Q1 FY2025 to $0.45 in Q1 FY2026 [2][6]. - GAAP revenue was $55.5 million, which was below the expected $63.4 million, despite an 11% year-over-year increase [2][5]. - Gross margin improved to 26.5%, up 1.7 percentage points from the previous year, while operating margin rose to 8.9% compared to 6.5% in Q1 FY2025 [2][5]. - Adjusted EBITDA climbed 33% to $6.8 million [2][6]. Orders and Backlog - The total order figure reached $125.9 million, more than doubling compared to the same quarter last year, resulting in a record book-to-bill ratio of 2.3x [7][11]. - Backlog increased by 22% year-over-year to $482.9 million, with approximately 87% tied to Defense projects [7][11]. Business Strategy - Graham focuses on expanding into new markets, innovation, and deepening ties to U.S. defense programs while maintaining financial discipline [4][3]. - The integration of P3 Technologies has enhanced capabilities in turbomachinery, allowing for novel project pursuits [12]. Future Guidance - The company maintains its FY2026 guidance, projecting net sales between $225 million and $235 million and adjusted EBITDA of $22 million to $28 million [14]. - Capital expenditures for FY2026 are planned between $15 million and $18 million, targeting 8-10% annual organic revenue growth [14].

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $13.2 million, representing a 30.2% increase compared to the prior quarter but a 43.1% decrease year-over-year due to lower product volumes [27][28] - GAAP gross loss was $3.8 million, or 29.1% of revenue, compared to a gross loss of $4.3 million, or 42.5% of revenue in the prior quarter [28] - GAAP net loss was $12.2 million, or $0.96 per diluted share, an improvement from a loss of $15.4 million, or $1.21 per diluted share in the prior quarter [30] - Adjusted EBITDA loss was $9.8 million, better than guidance, compared to losses of $12.2 million in the prior quarter [31] Business Line Data and Key Metrics Changes - The company added multiples of its current annual revenue run rate to its backlog, signing agreements totaling more than 6.5 gigawatts with Tier 1 accounts [21] - The contracted portion of the company's backlog now stands at $502 million, reflecting $67 million in new purchase order additions since November 12, 2024 [31] Market Data and Key Metrics Changes - The company is seeing increasing international traction, particularly in Australia and Europe, with a focus on a specially designed tracker for the Indian market [19][24] - The bidding run rate has nearly doubled compared to the second quarter of the previous year, indicating strong market demand [18] Company Strategy and Development Direction - The company is focused on converting its backlog into revenue and achieving quarterly profitability in 2025 [13][26] - The strategy includes enhancing domestic content capabilities and increasing international project engagements [18][19] - The company aims to provide value through easier, faster, and safer installations, which is critical in a stressed labor market [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's recovery and growth prospects, highlighting a clear inflection point in the adoption of its differentiated technology [10][25] - The company anticipates a back-half weighted year, with significant growth expected in the second half of 2025 [48] Other Important Information - The company ended the quarter with $11.2 million in cash and has additional liquidity from a $3.2 million earn-out and an upsized note offering expected to bring in $10 to $15 million [32] - The company is also focused on improving its supply chain management to mitigate exposure to steel price volatility [74] Q&A Session Summary Question: Can you share the mix of 1P versus 2P in the five-gigawatt agreement with Recurrent Energy? - The agreement will predominantly utilize 1P technology, with a mix of 1P and 2P based on geographical considerations [39][44] Question: What is the revenue outlook for Q2 and Q3? - The company expects Q2 to potentially be flat compared to Q1, with a focus on execution and project completion [50] Question: How much faster is the 1P technology compared to previous estimates? - The 1P technology is still expected to be 30% to 40% faster, with a focus on safety and efficiency in installation [61] Question: What are the target gross margins for the business in the long term? - The company aims to align its gross margins with peers, with expectations of improvement as volume increases [67][70] Question: How is the company managing supply chain exposure amid steel price volatility? - The company has limited exposure as it secures steel at the time of purchase order negotiation, mitigating risks associated with price fluctuations [74]