Executive Summary

Q1 2025 revenue rose 11.3% YoY to $205.9M, driven by record Aerospace sales; GAAP diluted EPS was $0.26 and adjusted EPS was $0.44 as margins expanded with volume and efficiency gains .
Against S&P Global consensus, Astronics delivered a revenue beat (~$206.0M actual vs $191.9M estimate) and an adjusted EPS beat ($0.44 actual vs $0.30 estimate); S&P’s EBITDA definition showed a slight miss versus its estimate while company-reported adjusted EBITDA was $30.7M (14.9% margin) (all starred values from S&P) .
Bookings hit a quarterly record at $279.7M (book-to-bill 1.36x) and backlog reached a record $673.0M, underpinned by a $57M FLRAA order; 76% of backlog is expected to convert within 12 months .
2025 revenue guidance was maintained at $820–$860M; capex outlook increased to $35–$50M to support consolidation, capacity and automation; management highlighted tariff risks ($10–$20M potential annual material cost impact before mitigation) and detailed mitigation levers .

What Went Well and What Went Wrong

What Went Well
- Aerospace delivered record sales of $191.4M (+17% YoY) with adjusted segment operating margin at 16.2%; CEO: “Our Aerospace business is performing quite well, with another quarter of double-digit revenue growth” .
- Bookings and backlog set new records ($279.7M bookings; $673.0M backlog), including a $57M FLRAA development order; CEO reiterated FLRAA as a significant long-term driver .
- Margin expansion from operating leverage and productivity drove adjusted operating income to $22.6M (11.0% margin) and adjusted EBITDA to $30.7M (14.9% margin) .
What Went Wrong
- Test Systems remained challenged: sales fell to $14.6M (–32% YoY), with a $1.9M estimated cost revision on a long-term mass transit contract and segment operating loss of $(2.2)M; bookings were thin at $12.0M .
- UK litigation drove a $6.2M reserve true-up (damages and interest accrual) and ~$3.0M in legal expenses in the quarter; management flagged potential legal-fee reimbursement risk (plaintiff estimate ~$7.2M) .
- Macro/tariff uncertainty: management estimated potential annual material cost headwind of $10–$20M before mitigation, creating downside risk to outlook if not offset .

Financial Results

Performance vs prior quarters and prior year

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	203.7	208.5	205.9
GAAP Diluted EPS ($)	(0.34)	(0.08)	0.26
Adjusted Diluted EPS ($)	0.35	0.48	0.44
Gross Margin (%)	21.0%	24.0%	29.5%
Operating Margin (%)	4.1%	4.3%	6.4%
Adjusted EBITDA ($M)	27.1	31.5	30.7
Adjusted EBITDA Margin (%)	13.3%	15.1%	14.9%

Q1 2025 vs S&P Global consensus (Primary EPS is S&P’s “adjusted EPS” construct)

Metric	Estimate	Actual	Surprise
Revenue ($M)	191.9*	205.9	+7.3%
Primary EPS ($)	0.30*	0.44	+0.14
EBITDA ($M)	26.5*	25.0*	(1.5)
Company Adjusted EBITDA ($M)	—	30.7	—

Values marked with * retrieved from S&P Global.

Segment and market detail

Segment / Market (Q1 2025)	Sales ($M)	YoY %	Segment Op Margin	Adjusted Segment Op Margin
Aerospace	191.4	+17.0%	11.6%	16.2%
- Commercial Transport	137.5	+13.3%	—	—
- Military Aircraft	33.3	+94.8%	—	—
- General Aviation	15.2	(22.0%)	—	—
- Other	5.3	(4.5%)	—	—
Test Systems	14.6	(32.1%)	(15.3%)	(10.2%)
Total	205.9	+11.3%	6.4%	11.0%

KPIs and cash/liquidity

KPI	Q3 2024	Q4 2024	Q1 2025
Bookings ($M)	189.2	195.9	279.7
Book-to-Bill (x)	0.93x	0.94x (TTM 1.02x)	1.36x (TTM 1.08x)
Backlog ($M)	611.9	599.2	673.0
Cash from Operations ($M)	8.5	26.4	20.6
Capex ($M)	1.9	3.2	2.1
Net Debt ($M)	174.6	156.6	134.2 (LT debt net of cash)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance (Q1 2025)	Change
Revenue	FY 2025	$820–$860M (Mar-4-2025)	$820–$860M (maintained)	Maintained
Capex	FY 2025	$35–$40M (Mar-4-2025)	$35–$50M	Raised
Backlog conversion	Next 12 months	—	~76% of $673M backlog expected to convert	New disclosure
Tariff impact (materials)	FY 2025 run-rate	—	Potential $10–$20M before mitigation	New disclosure
Test Systems program timing	2025	Volume start 2H25 cited earlier	U.S. Army radio test program remains on track for Q4 start	Narrowed timing

Earnings Call Themes & Trends

Topic	Prior Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Tariffs/Macro	No quantified impact; macro watched	Estimated $10–$20M annual cost headwind pre-mitigation; levers include supply-chain shifts, pass-through pricing, duty drawback, FTZs; awaiting clarity	Elevated risk; mitigation plan forming
Supply chain & ops leverage	Efficiency improvements driving margins; refinancing executed	Margin expansion with higher volume; “routine” operational execution underpinning results	Improving
Boeing/Airbus build rates	Boeing strike impact discussed; outlook constructive	Encouraged by Boeing rate progression; Airbus equally important; no major change in 2025 expectation	Stabilizing to improving
FLRAA program	Driver of Military growth	$57M Q1 order; ~ $90M total development billings expected; strategic long-term driver	Strengthening
Test Systems execution	Restructuring; radio test ramp in 2H25; bookings soft	EAC +$1.9M on long-term contract; bookings $12M; deeper review underway; Army program volume start still Q4	Under review
Legal proceedings	UK damages risk flagged; reserves rising	UK damages $12.4M paid Q2; $5.7M interest reserved; plaintiff legal fees est. $7.2M; appeals likely into 2026	Largely contained; monitoring fee outcome

Management Commentary

“Our first quarter results show a very strong start to 2025… Adjusted EBITDA of $31 million, or 15% of sales… record bookings… record backlog” — Peter Gundermann, CEO .
“Adjusted operating income was $22.6 million or 11% of sales… adjusted EPS $0.44… interest expense declined $2.6 million YoY due to our successful refinancing” — Nancy Hedges, CFO .
“We estimate our tariff obligation… before mitigations is in the range of $10 million to $20 million… we have a full toolkit to deal with final tariffs… supply chain modifications… pass-through pricing… duty drawback, free trade zones” — CEO .
“Our Test business… results were complicated by the increase in estimate at completion on an elongated and complex long-term contract… we expect results to improve steadily… anchored by the production start for the U.S. Army radio test program… on track for the fourth quarter” — CEO .

Q&A Highlights

Tariff exposure and mitigation: Management cannot time mitigation until tariff clarity, estimates roughly 3/4 direct and 1/4 indirect exposure; prior pivot away from China provides some insulation .
Portfolio/business reviews: Ongoing reviews could lead to rationalization; Test Systems is the largest area under scrutiny given persistent challenges .
737/MAX exposure: No major changes communicated by Boeing; Astronics expects to build at slightly reduced rate versus Boeing’s and is encouraged by rate progression into 2025; China impact not seen as consequential for 2025 .
Test Systems EAC risk: Additional risk remains on the long-term project; company is validating estimates amid a deeper review .
UK legal tail risk: Worst-case legal fee reimbursement estimated at ~$7.2M; total UK-related cash outlays around $20–$23M worst-case; appeals likely extend into 2026 .

Estimates Context

S&P Global consensus for Q1 2025: Revenue ~$191.9M* vs actual $205.9M; Primary EPS $0.30* vs adjusted EPS $0.44; EBITDA $26.5M* vs S&P EBITDA “actual” $25.0M* and company Adjusted EBITDA $30.7M .
Implications: Street models likely need to raise revenue run-rate and adjusted EPS trajectory given stronger Aerospace volume and operating leverage; differences in EBITDA definition (S&P vs company “Adjusted EBITDA”) should be reconciled in models. Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Aerospace is the growth and margin engine: record sales, bookings and backlog with adjusted segment margin at 16.2%; momentum appears durable across Commercial Transport and Military, notably FLRAA .
The print was a clean top-line and adjusted EPS beat vs S&P consensus, with strong gross/operating margin expansion; GAAP results reflect legal accruals and costs .
Tariffs are the primary macro swing factor; management has credible mitigation levers but timing awaits policy clarity; near-term headline risk remains .
Test Systems remains the weak link; watch for scope outcomes from the business review and Q4 U.S. Army radio test production start as catalysts for improving profitability .
Liquidity improved (net debt down to ~$134M; $20.6M CFO), enabling continued investment (capex raised to $35–$50M) and optionality on capital allocation as operations strengthen .
Additional product/award news in Q1 (EmPower UltraLite G2 recognition; SkyShow Server launch) underscores competitive positioning in cabin power and IFEC .
Near-term trading: stock sensitivity likely to tariff headlines and Test Systems updates; medium-term thesis anchored by Aerospace backlog conversion, margin expansion, and FLRAA program execution .

Notes: All company metrics and quotes are from the Q1 2025 8‑K/press release and earnings call. S&P Global consensus and S&P-defined actuals are starred and may differ from company non‑GAAP definitions. Values marked with * retrieved from S&P Global.

ASTRONICS CORP (ATRO)·Q1 2025 Earnings Summary