found on page five. With these accomplishments as background, today I'll summarize our record second quarter performance, highlight the progress we've made, and outline the priorities guiding our next phase of growth. Then Mike will discuss our financial results and guidance, Jonathan will provide updates on demand, integration, and capacity expansion, and I will discuss our growth trajectory before we take your questions. From a performance point of view, as shown on page six, we delivered another quarter of record financial results with quarterly revenue of $182 million, non-GAAP adjusted EBITDA of $55 million, and backlog reaching $1.3 billion, giving us 95% visibility to the midpoint of our full-year revenue guidance. We expect our strong organic growth rate to continue and want to provide additional clarity on why short-term organic growth isn't as useful a metric for our integrated business model as it may be for other companies. Some companies manage newly acquired businesses in more of a holding company fashion with minimal operational integration. In contrast, we identify and acquire companies that bring unique and valuable capabilities to Carmen, capabilities that allow us to offer greater value to our customers and we begin the integration process on day one. This means that we seek to exploit these capabilities immediately to the benefit of Carmen and our customers regardless of the amount of time they have been a part of the company. For example, if a newly acquired business is better suited to manufacture products for a long-standing program, then we will move production to that site, regardless of whether the output is considered organic or inorganic. An example is what we're doing now in Gulfport, where we're transitioning certain products for our space and launch end market from another long-standing business. We categorize this as inorganic, even though it's really organic business that we're simply moving to a recently acquired site that is best suited its delivery. From an operational and customer perspective, what we call that revenue is much less important than making the best business decision for the customer and the enterprise. To provide a second and slightly different example, following the acquisition of our Cedar City, Utah Energetics business, we immediately began pursuing new use cases and customers for its capabilities. Having seen rapid success, we created new revenue streams within that recently acquired business that would not have been possible had they remained independent we aim to continue pursuing this strategy of moving work and combining capabilities across all of our businesses and will not constrain that strategy by managing to a quarterly organic growth metric that could reduce long-term value capture for the enterprise with that said we remain focused on end markets with very strong organic growth vectors and we remain confident in our ability to deliver 20% to 25% annual organic growth for the foreseeable future. Our demonstrated performance supports that growth rate. Quarterly year-over-year organic growth in the five full quarters since our IPO has ranged from 19% to 36%, including 24.4% organic growth year-over-year in the most recent quarter. As we move forward, we will periodically share organic growth at a minimum annually while continuing to focus on optimizing the company for maximum shareholder returns over time. Beyond our financial results, we achieved significant commercial milestones that positioned Carmen for sustained profitable growth. As we first announced in May 2026, we secured four large contingent supply agreements, one of which converted to a firm contract in the second quarter with the others expected to close by the end of the year. Additionally, while protecting our single and sole source positions on Munitions Advisory Council, or MAC programs, remains a top priority, we see this moment as an opportunity also to go on offense in terms of increasing our share as a second source to prime contractors. Not all suppliers have invested as proactively as Carmen, positioning us to step in and become a second source where we aren't participating today. Here are several examples of the progress we've made. First, separation motors for a major munitions program. Second, expected selection as a second source on a small propulsion system for a widely deployed anti-armor weapon system. Third, emerging opportunity as a second supplier for large solid rocket motor, or SRM, cases. Fourth, an opportunity to be a second source supplier for a shroud system on a widely recognized interceptor program and finally we're also engaging with customers on an opportunity for a future lower cost interceptor program these wins and opportunities reflect growing customer confidence in carmen's ability to scale innovate and deliver critical hardware at speed and at high volume they also reinforce what industry leaders have recently demonstrated framework agreements are converting into large production contracts as highlighted by the more than 90 billion dollars in THAAD and PAC-3 interceptor contracts recently awarded to Lockheed Martin. And these large contracts are not limited to missile defense, as the Navy recently awarded an historic 76.6 billion dollars in contracts for five new Columbia and nine new Virginia-class submarines, programs that we support extensively through our maritime defense and market. Those contract awards underscore the strength of our pipeline and the state of the global security environment that drives our customers mission every day the demand environment remains strong with an urgency to replenish depleted munitions and interceptor stockpiles at an unprecedented rate in fact some customers are now citing demand to increase certain annual production buys by as much as a factor of 10 which would dwarf earlier projections of two three or four times multiples of current build rates carmen is purpose-built to respond to this market demand, and we continue to partner with prime contractors to help them deliver reliably and efficiently. Having covered our Q2 highlights, I'd like to turn for a moment to my go-forward priorities. First, continue our track record of strong financial performance while capturing generational demand that we see continuing through at least the end of the decade. Second, fully unlock the value of Carmen, leveraging differentiated IP, a growing and well-capitalized development and production system, and a talented workforce. Having now visited 17 of our 20 current and expected to be acquired sites, I have confidence the whole will be realized as more than the sum of the parts. And third, drive operational excellence through technology, capacity, and a rigorous operating rhythm. To support these priorities, we've identified key areas of focus. First, drive disciplined delivery of free cash. While we still view growth and margin performance as top priorities, you will see increased focus on this metric in 2027, and this will be reflected in our executive compensation incentive framework beginning next year. Second, create financial flexibility. As we find opportunities for operational efficiency and operating leverage, this will provide options for price reduction, business reinvestment, or margin improvement in a way that best maximizes long-term shareholder returns. And third, continued expansion of our total addressable market within the high growth end markets we currently occupy through both organic and inorganic means. I am pleased with the progress we've made at the midpoint of the year, and I remain confident that 2026 will be another year of record performance. With that, and to further discuss that performance, I'll turn it over to Mike.

Thank you, John. Our record second quarter results demonstrate the continued strength and momentum of the carbon business model. Pages 7 and 8 include key financial metrics. Revenue of $182 million, up 58% year-over-year, and 20% sequentially. Gross profit of $78 million, up 66%, with a gross margin of 43%. Net income of $14 million, up 106% year-over-year. Adjusted EBITDA of $55 million, up 55% year-over-year. Adjusted EPS of $14 cents, 43% above last year. Backlog of $1.3 billion, up 65% compared to the end of fiscal year 25. Bookings in the quarter totaled nearly $500 million from all end markets, including a large space in launch LTA. Organic revenue grew 24.4% year-over-year in the quarter. As John mentioned, full quarterly organic revenue growth since our IPO has ranged between 19% and 36%, supporting our annual 20% to 25% organic revenue growth target. Each of our legacy markets delivered year-over-year quarterly and year-to-date growth. Tactical missiles and IDS grew 55% to $63 million year-over-year quarterly and 41% to $108 million year-to-date, led by strength and core production programs, including unmanned encounter UAS and emerging programs transitioning into production. Maritime defense systems contributed $34 million in the quarter and $60 million year-to-date, driven by legacy and next-generation submarine programs. Hypersonics and Strategic Missile Defense grew 24% to $43 million year-over-year quarterly and 22% to $79 million year-to-date, driven by growth in key interceptor program production and increased production associated with a new surface-to-surface missile system. Space and Launch grew 6% to $42 million year-over-year quarterly and 17% to $86 million year-to-date, supported by content for both legacy and new launch providers, partially offset by customer order timing associated with shifting launch schedules. Our second quarter revenue mix was as follows. Tactical Missiles and IDS, 35%, Hypersonics and SMD, 24%, Space and Launch, 23%, and Maritime Defense Systems, 18%. For the six months ending June 30th, revenue rose to $333 million, up 55% year-over-year. Gross profit increased to $142 million, up 64% year-over-year. Net income grew to $22 million, up from $2 million a year ago. Adjusted EBITDA jumped to $99 million, up 51% year-over-year. And adjusted EPS climbed to $0.25, up 56% year-over-year. Looking now at the balance sheet, we continue to prioritize growth as we make capital allocation decisions, understanding that CapEx and working capital will continue to consume cash through this high-growth cycle. That said, we're also placing increased emphasis on cash management and will include free cash flow metrics in our executive compensation program, as John described earlier. Cash and cash equivalents totaled $52 million, up $18 million from year-end. Cash used in operations was $4 million, driven primarily by increases in accounts receivable and contract assets. This reflects the working capital requirements associated with the 58% revenue growth driving our receivables, as well as contract assets from production ramps and investments we are making to expand our capacity. We expect volume and cash generation to accelerate in the second half of 26, delivering free cash flow of $15 to $20 million. Accounts receivable growth in the second quarter was a function of timing and our growth, with significant deliveries taking place late in the quarter. Accounts receivable is likely to continue to grow in Q3 and Q4, but we do not expect AR days to grow. CapEx year-to-date was $22 million, supporting growth across nozzle capacity, UAS launchers, launch vehicles, maritime programs, and spacecraft manufacturing. This represents a slightly higher run rate than our 5% guidance for the year, implying a step down in CapEx in the second half of 2026. Our CapEx does not include customer-funded capital. We are investing ahead of orders to strengthen our ability to respond to the generational demand cycle we expect to persist for a number of years. Turning now to leverage. Net debt was $752 million at the end of the second quarter. Our Q2 leverage ratio was roughly 3.7 times adjusted EBITDA on a pro forma basis. Subject to regulatory approval of the Walker acquisition, we expect our pro forma leverage ratio to be approximately three and a half times by the end of the year. Since the quarter end, we repriced our term loan B to SOFR plus 2.25%, a 50 basis point reduction, equivalent to a savings of approximately $4 million a year in interest payments. We also previously increased our evolving credit facility from $50 million to $150 million, providing greater strategic flexibility. Now I'd like to provide a brief update on M&A and our auditor. We announced the execution of an agreement to acquire Walker with a total consideration of £70 million or approximately $94 million. The adjusted EBITDA multiple we expect to pay at closing is consistent with the other acquisitions we have made since our IPO. The regulatory review process is underway and we expect the acquisition to be completed by year-end. Our integration of semen and MSC is on track, delivering higher than expected margin as we prepare to transition space and launch work to Gulfport location. We are not seeing meaningful changes in valuation expectations across our robust proprietary M&A pipeline. We continue to represent and acquire a choice for IP rich, first or second generation owners seeking long-term growth for the businesses they've created. We engaged PwC as our new auditor this quarter. Their scale and expertise are well aligned with our business model and growth strategy. I'll now provide an update on our full-year guidance. Given our strong first-half results, record backlog, and 95% visibility, we are raising our 26 outlook shown on page 9. We now expect full-year revenue of $730 to $745 million, and non-GAAP adjusted EBITDA of $215 to $222.5 million, 29.7% margin at the midpoint. This represents year-over-year revenue growth of 57% and adjusted EBITDA growth of 51% to the midpoint. This outlook does not include the financial results from the Walker acquisition. Importantly, we reaffirm expectations for 25% or higher organic growth in 26. We expect second half revenue to increase sequentially with approximately a 47-53% split between Q3 and Q4. With high visibility, much of our growing record backlog supports our plans for 2027 and beyond. Lastly, for 26 modeling purposes, we expect a statutory tax rate of 26.5% and capital expenditures of 5% of revenue, roughly $37 million. Now I'll turn the call over to Jonathan.

Thank you, Mike. As John stated earlier, integration of acquired businesses is key to our strategy and enables us to create value that would not exist if these businesses remained standalone. integration of our recent acquisitions continues to move ahead smoothly, including Siemen and MSC, which remains on track for completion this year. We are realizing early benefits, capturing new business pursuits, leveraging our collective capability, along with increasing production of existing Carmen products by utilizing available capacity at the newly acquired facilities. For example, our Cedar City, Utah business is helping secure our positions to compete for second-source propulsion system opportunities on a MAC interceptor and a key program of record air-to-ground missile system. An additional illustration is our initiative to manufacture space launch vehicle systems at the Gulfport facility, leveraging its large-scale maritime production capabilities to meet the specialized demands of space launch products. All business development opportunities and pursuits have been incorporated into our company-wide BD systems, allowing us to fully utilize Carmen's capabilities to address customer needs. We have started implementing the Carmen operating system across all companies acquired since our IPO, with progress varying by location. In the second quarter, our machine utilization monitoring system was launched at our Albany, Oregon facility. Given the unprecedented levels of demands, it is imperative to ensure we have sufficient capacity to satisfy our customers' requirements ahead of their need. We are optimizing existing assets by evaluating utilization rates at recently acquired businesses and leveraging the Carmen operating system to identify and address output constraints. In addition, we are investing in expanded capacity to accommodate future demand. Installation of advanced equipment is underway to support our significant Space Launch Award with enhanced spacecraft production capabilities slated for deployment in Q4-2026. We continue to advance our Salt Lake City Manufacturing Center, which will support both Tactical Missile and IDS and Hypersonic and SMD customers. The first production equipment arrived last month and we expect initial production capability in the fourth quarter, 2026. The transition of select production from the Seattle area to SLC will release meaningful capacity to support development, low rate, and full rate production at that location. Maintaining strong visibility across our supply chain is necessary to support our growth strategy. As our business continues to grow, so does our customer and program count, up, now at more than 150. This increased diversification also applies to our supply chain, with no one vendor now making up 10% of our accounts payable. Our customers control the supply of key high temperature composite materials, ensuring that we have access to the materials required to support them. In parallel, we are working to qualify our proprietary MG Resin as an alternative solution to support the significant expansion and high temperature material demand. We continue to monitor raw metallic material availability, and at this time, we have not experienced any constraints for our products. Turning now to our AI initiatives, we are advancing AI-enabled capabilities across engineering and select business processes with the goal of reducing cycle times and expanding capacity. Our core initiative, what we call Project Moonshot, is focused on securely applying AI to our historical engineering and program data accumulated over several decades to accelerate design, engineering, and proposal workflows. Over time, we believe these capabilities could improve capture probability and drive growth. We expect to share additional examples of our progress next quarter. Now I'll turn it back to John.

Well, thank you, Jonathan. As we look toward the balance of the year, we remain focused on performance and growth, complementing our strong organic growth, we also expect to continue to pursue our growth strategy through additional acquisitions, with a focus on munitions and space capabilities that complement our current footprint in domestic and international markets. Beyond the current year, we believe that we are well positioned to deliver 20 to 25 percent annual organic growth for a multi-year period. At that growth rate, revenue could double in three to four years, with potential inorganic growth accelerating that timeline. There's no question that this is an exciting time for Carmen and we're just getting started. Now, let's take your questions.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up, at which point you may return to the queue for another two questions. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Peter Arment with Baird. Your line is open. Please go ahead.

Yeah, thanks. Good afternoon, guys. Nice results. And maybe just first question, the new LTA within space and launch, could you give us a little more color on kind of the timing and when you expect that to start to contribute to the top line?

Yeah, sure. Sure, Peter. I'll start off with that one if I could. This is one we had mentioned in our prior quarter earnings call. We talked about a contingent supply agreement that we were actively negotiating in space and launch. And at that time, I think we had mentioned approximately a $250 million value for that LTA. That did come through just a bit below that that number but not too far from it and it's a five-year agreement so you can see there'll be some amount of that that'll start to feather in over the balance of this year following on to some to some prior year agreements that had already been in place and that'll just you know burn off on um you know following this year it'll burn off at a relatively level rate across the following four and a half or so years okay super helpful and then just as a follow-up.

The guidance raised, the second half, implies kind of a sequential step up on the top line. Do we assume that tactical missiles, IDS, will still be the main driver of the top line, or maybe any color you could give on end markets or segments? Thanks.

I think end markets are going to continue to be kind of steady course from what you've saw in the first six months, so we would expect tactical missiles and IDS to remain pretty strong in the second half.

Got it. Thanks. I'll jump back in the queue. Thanks, guys.

Thanks, Peter.

Your next question comes from the line of Louis De Palma with William Blair. Your line is open. Please go ahead.

Great. John, Michael, Jonathan, and Steve, nice work on the strong quarter.

Thank you.

Thank you, Louis. on the prior quarter earnings, you announced that you were in negotiations with several framework agreements. I was wondering if you could provide an update in terms of the progress with those framework agreements and potential timing on when they might become definitized.

Yeah, sure. I'd be happy to answer that, Louie. You know, we continue to have active discussions with our prime customers on those three contingent supply agreements. We've made progress on all three of those, and we are continuing to anticipate, as we did prior quarter, that those would have firm agreements in place between now and the end of the year. We have, I would say, reasonable confidence that we'll see initial contracts coming through as early as Q3. But again, I think by the end of the year, we'll see those fall into place. We've been going back and forth. And as you might imagine, as the prime contracts come through, we have to sort of have our time in the queue to get to the detailed negotiations with those customers. But the conversations are ongoing. And if anything, I think the expectation in terms of the total quantity volume that we'll be seeing coming through those is going to be at or above what was anticipated last quarter.

Great. And across the industry, John, you've observed and many investors have observed how the Department of War is looking for second suppliers for many of the leading platforms. For instance, Northrop Grumman was added as a second supplier for the Pac-3 system, like overall in aggregate, do you view this second supplier trend as having a positive, neutral, or potentially negative impact on Carmen's business?

Yeah, I can tell you, Louis, that's an active conversation that we're having almost every day. And certainly, you know, as you are, we're well aware of the conversation around second sourcing. I would call it a net opportunity for Carmen. And the reason I would say that is, first off, We really have leaned out ahead a bit in terms of anticipating where demand was going to be, getting equipment on order, getting facilities in place. You know, Jonathan talked a little bit about our expansion facility that's well underway, and we're quite excited about that. So while we know our customers are being asked to look hard at second sourcing, our commitment is, A, we'll convince them that we have the volume, I'm sorry, the capacity in place to support the volume. And we're going to continue to be a reliable and competitive partner to them. And if there is an instance where they're asked to develop a second source, we'd work with them to make sure that that was more of a contingency plan versus a meaningful diversion of volume from Carmen. On the other side of the coin, I think a big positive for us in terms of our opportunity to go on offense here and look for opportunities where other suppliers have not been able to build confidence with the primes that they're going to be able to meet the demand and meet the production ramp. And so we've had, as I mentioned in my remarks just a few minutes ago, a number of opportunities that have either come through or that we feel reasonably confident will come through for us to be a second source on certain programs for certain components. And in at least a couple of these instances, those will be meaningful, large, long-term upside opportunities for Carmen. So while those are not all in the bag yet, I'm feeling optimistic so far based on the conversations we've had. Thanks, John.

Your next question comes from the line of Ken Herbert with RBC Capital Markets. Your line is open. Please go ahead.

Thank you very much for the time and the question. John, I wanted to follow up on just a comment you made right there at the end of your prepared remarks, and that involved post-26, sort of a 20% to 25% organic growth framework for the business. I mean, it does represent a slight, at least at a headline level, slowdown from what we're seeing this year. but maybe you could just talk about confidence around that, how you see, you know, maybe the opportunity to continue with sort of this mid-20s organic growth framework, and maybe just as you thought about providing that sort of longer-term outlook, what you went through as the puts and takes as you think about that.

Yeah, I guess, Ken, I did not intend to communicate a slowdown. In In fact, we see a very steady trend over time as we look back across the last five or so quarters that we've been public. And as we look to the foreseeable future, we see it being a consistent trajectory. And I think if you just look at the end markets and some of the demand we're seeing there, particularly the missiles, munitions, interceptors, where we see space and launch headed, where we see the unmanned systems and counter UAS systems going, I think it easily supports that continued demand signal, at least through the end of the decade.

Perfect. Thanks. And if I could, just on the comments around free cash, we can appreciate sort of where you are in the investment cycle and supporting growth. But maybe if you could just remind us again and appreciate as well the increased focus on that you're bringing to the business, how we think about sort of conversions, maybe in the near term, but more importantly, what you think the business should or could support in the longer term as we continue to see the growth and ideally some of the investments in terms of CapEx and working capital start to moderate a bit.

Yeah. Hey, Ken, this is Mike. I think that longer term, we would still maintain that free cash flow should be in the range of 80 to 90% of net income. Now, in this growth cycle and right now we do have a use of cash for both working capital as well as capex on the working capital side at this level of growth that we're seeing we certainly have an increase on receivables and which is which would be expected um we also are leaning forward to help support the upcoming ramp and so you are seeing inventory and contract assets that are on the rise first half of the year was a little bit heavier on capex we were able to pull things to the left to help support the ramp coming, which is why we do expect CapEx to be a little bit lower as a percentage of revenue in the second half. And long-term, we would still maintain that where we're at in terms of 5% of revenue on CapEx, we think that's an adequate level to support the growth that we're seeing for the rest of the decade. Thank you.

Your next question comes from the line of Amit Dharianini with Evercore. Your line is open. Please go ahead.

Thanks a lot. I have two as well. I guess maybe just to start with on the operating leverage side, your EBITDA margin I think came in around 29.8% in the first half. And the full year guide sort of implies it's going to step down a bit in the back half of the year despite sales, I think, being higher. Can you just walk through what is driving that margin drop? Is it just the acquired entity that perhaps at a lower margin or their startup costs, their some capacity investments? I'd love to just understand kind of what's driving that downtick and if there's a way to think about normalized EBITDA margin as you're going to 27.

Hey, Amit. So our guidance on the four-year EBITDA margins, they're in line with the margins that we guided to a quarter ago slightly better. But the reason why they were a little bit stronger in the first half of the year is really due to a mix of contract type. And that does relate a little bit to acquisitions. And when you think about the Siemens and MSC acquisition that we did in February, they happen to have a much higher percentage of cost plus type contracts. And those naturally do carry a lower EBITDA margin than a firm fixed. So what we saw in the first half and particularly in the second quarter is a more favorable contract mix where we did not have as much revenue proportionately coming from those cost plus contracts. So we see that normalizing in the second half, but still better than what we thought we would be a quarter ago.

Got it. Perfect. That's helpful. And then the 1.3 billion backlog number, obviously very impressive. Can you just talk about what is the duration of this thing look like? Is there a way for us to at least conceptually think how much of that would convert to sales in the back half of this year versus 27? And then what's beyond that? I would love to just kind of understand how much of this uptick is being driven by duration versus anything else. Thank you.

I can start with that. So the very strong booking quarter, nearly half a billion that we had in the second quarter, much of that, in fact, most of it was to support 2027 and beyond. And so that gives us great confidence for the outlook. Now, we do only have 5% left to book this year. It's no white space or go-get. It's really just timing of PO placement. of those bookings and specifically of the large LTA that we ended up getting on space and launch, there is opportunity that some of that revenue will start to occur in the back half of the year. But most of the bookings really are supporting our longer term strategy.

Perfect. That's it for me. Thanks a lot.

Your next question comes from the line of John Godin with Citi. Your line is open. Please go ahead.

Hey, guys. Thanks for taking my question. It's great to see the organic growth reaccelerate in the second quarter. And just because of the laser focus on that, I was hoping maybe we could just revisit organic growth in the back half of the year. You could kind of discuss the shape in a little bit more detail, just to level set, everybody.

Hey, John. Yeah, great quarter in the second quarter at the 24.4% on organic. We do believe that on the year, we are going to be at 25% or slightly better on organic. So we're going to expect to see that continue to increase in Q3 and again in Q4. So kind of that sequential buildup that we were talking to a little bit at the start of the year in terms of how the year would play out, but we would get to 25% or slightly better on the full year. So you're going to see an acceleration in the second half. Got it.

And it sounds like you mentioned you're 95% covered for the year. So tremendous visibility into that. Is there anything that can happen between now and the end of the year that would actually cause, create upward pressure to that number? Like what would be a source of upside surprise to organic growth from here?

In terms of upside surprise that you might see, I think if the framework agreements that we talked about would convert earlier than the end of the year, there could be some additional upside that we might see as that gets up and running. As we had previously discussed, we're anticipating right now and planning for those to really start hitting us in the first part of 2027. But as we've seen, there's a sense of urgency to get that work contracted. And we're hopeful that we might see some opportunity for upside. But it's a little bit too early to count on that right now. Got it.

And if I could just ask one more, John, you know, in the prepared remarks, you were talking about fully unlocking the value of Carmen. one of the things you mentioned was margins. In the conversations that I have with investors, it's not unusual that investors think kind of 30% EBITDA margins are the right normalized level roughly, but it sounded to me like you might think over the long term there could be upside beyond that. Did I hear that correctly? And maybe you can just sort of unpack those comments a little bit more.

Yeah, certainly happy to do that. I don't want to set an expectation that margins will exceed 30% on a continuing basis as we go forward. However, what we are very focused on right now as we continue to integrate the company, it's been very apparent to me as I've traveled around to almost every one of our physical locations that, as you would expect, with a number of recently acquired businesses, their initial integration has been completed and there is still more opportunity to optimize the enterprise. And the way we're thinking about that optimization is to find opportunities for financial flexibility. And we're thinking about that in three ways. One is, you know, we recognize that as our customers pursue some of these generational increases in capacity and look to lock in long-term arrangements, there could be pressure put on our pricing. And we want to make sure we have contingency in place to be able to manage that while still maintaining our margin performance. We're also looking at whether we might want to take that financial flexibility and look at reinvestment in the business to capture the next generation franchises that are yet to be identified. And the third opportunity would be, obviously, if we decided the best long-term value to our shareholders was to deliver that as additional margin for the business, that's an option that we would like to have available as well. So it's a strategy we're going to continue to, I would say, pursue very intentionally and we'll provide updates as we start to make progress on that. All right, guys.

Thanks a lot.

As a reminder, if you would like to ask a question, press star one to raise your hand. Your next question comes from the line of Michael Leshock with KeyBank Capital Markets. Your line is open. Please go ahead.

Hey, good afternoon. Maybe just a follow up on the margins there. I'm curious if you have a sense of what the margin difference is between a second source opportunity and maybe a legacy Carmen sole source program. It sounds like there's quite a bit of second source opportunities that you're pursuing, and you mentioned it's a net positive. Just curious what your expectations are on the margin impact, should that become a bigger piece of revenue over time?

Yeah, thanks for the question, Michael. I don't see that there's going to be an unappreciable, you know, either increase or decrease in margins as a result of the second source opportunities. You know, certainly we will perhaps be a bit more aggressive initially in pricing if we needed to, to secure a very nice long-term franchise for the company, but we wouldn't, you know, enter into something that would be significantly dilutive to margins over the long term. We would have an appropriate business case and think that through carefully before we made that decision. You know, obviously we want to look at finding a way to meet our customers where they are today, look at the price point they're paying today. Can we be competitive with that? Can we make the business case close in terms of any capital investment we might have to make there? But as I said, for the ones that are already in the pipeline that we have clear visibility to, I think we feel comfortable that, you know, Carmen type margins would be in family with these new ones.

Okay, great. And then maybe on space, If you could provide any details on the new Glenn anomaly and the impact that had, if any at all, I would expect it to be minimal. But just curious on the puts and takes as we look longer term, given they're a meaningful customer within that segment.

Yeah, sure. The long term outlook for space and launch overall continues to be very favorable for us. And, you know, we certainly do talk on a regular basis with Blue Origin. And I think I might have mentioned last quarter that the conversations we've had with them from almost immediately following the mishap were that things are full steam ahead from a production point of view. The relationship hasn't slowed down. If anything, it's accelerated and strengthened over time. So I feel very good about where we are and where we'll continue to go as a partner with Blue Origin.

Great. Thanks so much.

Your next question comes from the line of Alexandra Mandary with Truist Securities. Your line is open. Please go ahead.

Hey, nice results, and thanks for taking my question. You mentioned working to qualify your MG resin. I guess, what are qualification lead times right now, and are there any discussions with the Department of War to support the acceleration of those processes, to support demand more quickly?

Yeah, I appreciate the question. This is Jonathan. We are receiving funding to further develop MG resin. It's both for use as an ablative material in solid rocket motor nozzles and for carbon carbon, so kind of two applications of the MG resin system. So that will further advance it. And then we're working with the propulsion primes to find a project or a platform that we would then insert it. At that time, it's probably call it a year to two years for a full qualification at a platform level.

Awesome. Thank you.

We have a follow-up question from Amit Darianini with Evercore. Your line is open. Please go ahead.

Yep. Thanks for letting me get back on. I guess, John, you were initially talking about just the organic growth, and you talked about how the way you integrate acquisitions makes it difficult for you folks to disclose the quarterly organic growth going forward. I guess the question for you would be, you know, when you evaluate an acquisition target, Presumably, part of the model separates the return on the target's standalone organic base you would get from the return on integration synergies, like moving the Gulfport-type work that you just cited. Historically, has that split been formal when you look at a deal and you underwrite it for IRR and stuff internally? And I guess the question is that now that you're going to disclose the organic and inorganic less frequently, does that change how you internally are looking at deals pre- and post-synergies at all? or is this really purely an external reporting decision of not giving information?

Yeah, thanks for the question, Ahmed. I guess first off, I would say, you know, this is something that, you know, our approach and how we think about it has remained consistent. And typically, when we evaluate an opportunity, we would really make the base investment decision based on the current business plan or projection that we would see as we model the opportunity or the property. So really, from there, we bring the business on as a, you know, call it instant bolt-on. We start the integration process, and then we typically will work the upside opportunities from there. We certainly do talk about, as we're evaluating an acquisition, the strategic value and how we can bring the portfolio more tightly together and unlock additional opportunities. but the base case is typically made on the, call it the organic growth we'd see resident in that business. So as we think about our model going forward and our plans to talk about organic growth annually, I don't see that really changing the way we would evaluate a target.

Perfect. Thank you.

There are no further questions at this time. I will now turn the call back to John Rambeau, CEO, for closing remarks.

Great. Well, thank you everyone for joining the call today. Before we close, I'd just like to emphasize three key points from today's call. First, Carmen continues to deliver 20 to 25% annual organic growth, and we reaffirm our expectation of delivering 25% or higher organic growth in 2026. This growth rate varies quarter to quarter, but has remained consistent on average over the five full quarters since our Q1 2025 IPO. Second, we're strengthening our platform, expanding internationally, adding valuable new capabilities, deepening customer relationships, producing higher operational efficiency, and tightening our focus on cash. And third, we're deploying capital effectively by expanding our capacity to address generational demand and positioning Carmen to deliver sustained 20 to 25% organic growth and adjusted EBITDA margins of up to 30% for years, supplemented by inorganic growth. This is only made possible by the efforts of our outstanding Carmen employees, whose relentless focus on serving our customers continues to inspire. Thank you for joining us today for your interest in Carmen Space and Defense. You can find our SEC filings and relevant news on our website at carmen-sd.com. We look forward to speaking with you again following our next quarter.

This concludes today's call. Thank you for attending. You may now disconnect.