Core Insights - Dana Incorporated reported strong financial results for 2025, with adjusted EBITDA and adjusted free cash flow exceeding preliminary estimates, and reaffirmed its targets for 2026, emphasizing new business growth and increased margins [1] 2025 Financial Highlights - Sales for 2025 totaled $7.5 billion, a decrease from $7.7 billion in 2024, attributed to lower demand across all end markets, partially offset by customer recoveries and currency translation [1] - Adjusted EBITDA for 2025 was $610 million, up from $395 million in 2024, driven by cost-saving actions and performance improvements [1] - Adjusted free cash flow for 2025 was $331 million, exceeding preliminary estimates by $16 million [1] - The company repurchased 34 million shares, representing 23% of shares outstanding, and returned $704 million to shareholders [1] 2026 Financial Outlook - Dana announced a capital return program extension and increase from $1 billion to $2 billion, with a new business backlog of $750 million and an expected $200 million incremental growth in 2026 [1] - Preliminary guidance for 2026 includes sales between $7.30 billion and $7.70 billion, adjusted EBITDA between $750 million and $850 million, and an implied adjusted EBITDA margin of 10.0% to 11.0% [1] - The company plans to host a Capital Markets Day on March 25, 2026, to discuss its long-term financial guidance as part of the Dana 2030 strategy, targeting approximately $10 billion in sales by 2030 [1] Fourth Quarter 2025 Performance - Fourth-quarter sales reached $1.9 billion, an increase from $1.8 billion in the same period of 2023, driven by higher demand for light truck programs [1] - Adjusted EBITDA for the fourth quarter was $208 million, representing an 11.1% margin, compared to $84 million (4.7% margin) in the same period of 2024 [1] - Operating cash flow for the fourth quarter was $406 million, up from $302 million in the fourth quarter of 2024 [1] Strategic Initiatives - The company completed the sale of its Off-Highway business and achieved $248 million in cost savings, aligning with its preliminary estimates [1] - Dana's strategic priorities have focused on enhancing profitability, improving margins, and maintaining financial agility [1]

Company Overview - Karman Holdings operates as a specialized provider of mission-critical systems and hardware for the aerospace and defense sector, focusing on high-performance solutions for applications in space, missile defense, and hypersonics [6] - The company reported a market capitalization of $9.1 billion and revenue of $428.2 million for the trailing twelve months (TTM), with a net income of $11.3 million [4] - Karman's latest quarter showed record revenue of $121.8 million, reflecting a 42% year-over-year increase, alongside adjusted EBITDA of $37.7 million and a 31% margin [10] Financial Position - StepStone Group acquired 292,428 shares of Karman Holdings, valued at approximately $21.11 million, making it the fund's second-largest disclosed U.S. equity holding [2][3] - This new position represents 9.9% of StepStone's 13F reportable assets under management [3] - Karman shares were priced at $68.44, more than tripling from the February IPO price of $22 per share [3] Business Strategy and Market Position - Karman generates revenue primarily through the sale of specialized aerospace and defense hardware, including payload protection systems and propulsion solutions, serving government agencies and defense contractors [8] - The company's funded backlog reached a record $758.2 million, up 31% since year-end, providing multi-year revenue coverage across missile defense, hypersonics, and space launch programs [10] - Karman's competitive edge lies in its integrated capabilities in design, manufacturing, and testing, which support advanced aerospace and defense initiatives [6] Investment Perspective - StepStone's investment in Karman highlights a strategy to gain exposure to defense and space spending, focusing on fundamentals rather than short-term market fluctuations [9] - Karman's demand is closely tied to government and defense budgets, making its earnings less sensitive to economic swings but reliant on execution and sustained federal spending [11] - Future returns for Karman will depend on backlog conversion and margin discipline rather than multiple expansion alone [11]