Earnings analysis · 10-Q
LYNX earnings analysis
Filed November 5, 2026 · Our reading of the company's report
The latest report
Lyntris delivered strong third-quarter growth, with revenue up 90.4% year over year to $194.429 million and all three missions expanding, led by Air & Missile Defense and Space ISR & Resilient Communications. Cash…
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Lyntris delivered strong third-quarter growth, with revenue up 90.4% year over year to $194.429 million and all three missions expanding, led by Air & Missile Defense and Space ISR & Resilient Communications. Cash generation and leverage improved materially, supported by $118.902 million of nine-month operating cash flow, $108.303 million of free cash flow and net leverage of 1.2x. However, gross margin fell to 22.2%, GAAP EPS remained negative at $0.03, and unremediated material weaknesses, government concentration and variable-rate debt remain significant risks.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $-0.03
What stood out
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Revenue surged 90.4% year over year
Third-quarter revenue increased $92.337 million, or 90.4%, to $194.429 million from $102.092 million in the prior-year quarter. Management attributed the growth to organic expansion across all three core missions in U.S. and allied-nation programs.
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Radar programs drove mission growth
Air & Missile Defense revenue rose $50.526 million, or 153.8%, to $83.369 million, driven by flagship radar programs entering full-rate and low-rate production and expansion of early-stage development programs.
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Space revenue more than doubled
Space ISR & Resilient Communications revenue increased $29.466 million, or 107.9%, to $56.763 million, primarily reflecting recently awarded international and domestic space-payload programs.
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Backlog reached $1.013 billion
Backlog increased to $1.013 billion at September 30, 2026 from $427.233 million at September 30, 2025 and $475.8 million at December 31, 2025, reflecting new awards and expansion of existing programs.
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Cash generation improved sharply
Operating cash flow improved to $118.902 million for the first nine months, versus cash used of $16.780 million in the prior-year period. Free cash flow was $108.303 million versus negative $19.952 million, while quarterly free cash flow was $79.469 million.
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Debt reduction strengthened liquidity
Cash increased to $88.367 million from $19.148 million at December 31, 2025, while total debt declined to $197.900 million from $284.701 million and net leverage improved to 1.2x from 4.2x.
What to watch
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Production mix compressed gross margin
Gross margin declined to 22.2% from 27.1% in the prior-year quarter, while cost of revenue increased 103.0% to $151.191 million versus revenue growth of 90.4%. Management cited a higher proportion of large, low-rate production programs and increased materials and subcontractor utilization.
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GAAP profitability remains fragile
The company reported a GAAP net loss of $3.025 million and GAAP EPS of negative $0.03 for the quarter despite $11.090 million of operating income. The company also recorded $7.423 million of other expense, primarily associated with debt extinguishment and refinancing costs.
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Unremediated control weaknesses
Material weaknesses in financial reporting controls remained unremediated as of September 30, 2026, causing management to conclude that disclosure controls were not effective. The company cannot provide an expected remediation timeline and stated that remediation may be time-consuming and costly.
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U.S. government concentration persists
Revenue concentration remains high: approximately 89% of nine-month 2026 revenue was derived from U.S. contracts, substantially all directly or indirectly with the U.S. government, versus 97% in the prior-year period. Appropriations, continuing resolutions, shutdowns and program cancellations could affect revenue and backlog.
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Variable-rate debt remains material
The new credit facility had $197.900 million of total debt at September 30, 2026, including $198.7 million of variable-rate borrowings disclosed for interest-rate risk; a 1% rate increase was estimated to raise nine-month interest expense by approximately $1.8 million.
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CMMC certification creates contract risk
The filing adds substantial compliance exposure from CMMC: the Department of War expects nearly all new contracts to require compliance over a three-year phased implementation that began in November 2025. Failure to achieve required certification could prevent bidding on new or follow-on awards and affect revenue, profitability and cash flow.
Management's outlook
The 10-Q does not provide new quantitative revenue or EPS guidance. Management states that cash and available credit facilities are expected to meet liquidity requirements for at least 12 months following November 4, 2026. The previously disclosed full-year 2026 outlook of $623 million-$630 million revenue and $95.5 million-$97.0 million Adjusted EBITDA was provided in the earnings release, not quantified in the 10-Q MD&A.
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.