MTRN

Image source: The Motley Fool. Friday, Aug. 7, 2026 at 9:00 a.m. ET Director, Investor Relations and Corporate FP&A - Kyle Kelleher President and Chief Executive Officer - Jugal Vijayvargiya Vice President and Chief Financial Officer - Shelly Chadwick Need a quote from a Motley Fool analyst? Email [email protected] Operator: Greetings. Welcome to the Materion Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Kyle Kelleher, Director, Investor Relations and Corporate FP&A. You may begin. Kyle Kelleher: Good morning, and thank you for joining us on our second quarter 2026 earnings conference call. This is Kyle Kelleher, Director, Investor Relations and Corporate FP&A. Before we begin our remarks this morning, I would like to point out that we have posted materials on the company's website that we will reference as part of today's review of the quarterly results. You can also access the materials through the download feature on the earnings call webcast link. With me today is Jugal Vijayvargiya, President and Chief Executive Officer; and Shelly Chadwick, Vice President and Chief Financial Officer. Our format for today's conference call is as follows: Jugal will provide opening comments on the quarter. Following Jugal, Shelly will review the detailed financial results in addition to discussing expectations for 2026. We will then open up the call for questions. Let me remind investors that any forward-looking statements made in the presentation, including those in the outlook section and during the question-and-answer portion, are based on current expectations. The company's actual performance may materially differ from that contemplated by the forward-looking statements as a result of a variety of factors. Those factors are listed in the earnings press release we issued this morning. Additionally, comments regarding earnings before interest, taxes, depreciation, depletion and amortization, net income and earnings per share reflect the adjusted GAAP numbers shown in Attachments 4 through 9 in this morning's press release. The adjustments are made in the prior year period for comparative purposes and remove special items, noncash charges and certain discrete income tax adjustments. And now I'll turn over the call to Jugal for his comments. Jugal Vijayvargiya: Thanks, Kyle, and good morning, everyone. I'm pleased to be with you today to discuss our second quarter performance and to highlight the momentum we're seeing across our markets as we continue to accelerate into the back half of the year. Q2 was truly a milestone quarter for Materion. Our diverse portfolio of critical materials continues to enable the technologies shaping the future, and our results clearly reflect the role that we play. Strong end market trends, combined with meaningful new business wins are driving double-digit growth across the company. Amid unprecedented levels of demand, our teams delivered exceptional performance, supplying the advanced materials our customers depend on and doing so with unwavering commitment in precision. We delivered the highest quarterly sales and earnings in our company's history. All 3 businesses achieved double-digit sales and EBITDA growth. Performance Materials grew value-added sales by 13%. Electronic Materials increased by 15% and Precision Optics delivered an impressive 26% sales growth. Profitability was even stronger, reflecting outstanding operational leverage and disciplined execution. For the first time, we exceeded 23% adjusted EBITDA margin, a milestone achievement for the company. Electronic Materials delivered 32% adjusted EBITDA margin, marking its fifth consecutive quarter of expansion and the highest margin on record. Precision Optics surpassed 20% margins, delivering its best profit in more than 5 years and continuing its strong trajectory of transformational performance. Across all our businesses, higher volumes, strong price/mix and outstanding operational execution came together to produce record earnings of $1.90 per share, up nearly 40% from a year ago. We generated solid free cash flow in the quarter, driven by strong earnings performance, improvements in working capital and disciplined capital investments. Let me provide some color on our sales growth from an end market perspective. Sales to the semiconductor market were up 23% year-over-year as AI continues to drive growth across leading edge logic and memory, and we continue to see outsized growth across power and communication markets. We delivered our highest quarterly sales to the aerospace and defense market, fueled by continued strong demand and new business in space and defense applications, along with market recovery in commercial aerospace. Industrial markets posted strong results across all 3 segments, led by Performance Materials as data center build-outs are positively impacting nonresidential construction and increasing demand for our beryllium-nickel spring material. Energy shipments were up more than 20%, driven by our new business wins in next-generation energy applications. Finally, telecom & data center grew almost 50%, propelled by the AI infrastructure build-out and significant wireless network expansion outside the U.S. As we look to the back half of the year, we're excited about the broad-based strength we're seeing. The demand signals across our key markets remain robust, and our order patterns give us confidence that this momentum will continue to build. What's even more encouraging is that the strength is not isolated. It's accelerating. We exited the quarter with record backlog, up roughly 30% from last year and 20% since the start of the year. Incoming orders in the first half reached a new high, growing nearly 30% year-over-year. Defense continues to stand out. We secured $90 million of incoming orders in the first half alone and now have more than $500 million in open RFQs across major programs. Space orders have doubled year-over-year. Commercial aerospace backlog continues to build and semiconductor orders are up 20% with a meaningful uptick in demand for high-performance memory applications. These are important data points, and they tell a clear story. Demand for our material solutions continues to strengthen and the trends driving our markets remain firmly positive. Given the results we've achieved and what we are seeing across our order book, we are increasing our full year growth outlook for the second consecutive quarter. We now expect mid-teens year-over-year sales growth, reflecting the strengthening demand across our end markets and the applications we serve. And as a result, we are raising our full year adjusted EPS guidance to a range of $6.80 to $7.20, a roughly 30% increase versus last year at the midpoint and 12% from the midpoint of our prior guidance. Before I turn the call over to Shelly, I'd like to take a deeper dive into one of the most exciting and rapidly expanding markets we serve, the space market. Space has become a major growth engine for Materion, and our materials support an exceptionally wide range of mission-critical applications. What distinguishes Materion is not just the range of applications we serve, but the vital role our materials play in ensuring mission success in the most demanding environments, whether it's satellites, telescopes, launch systems, planetary exploration vehicles or emerging in-space power systems. Across satellite platforms, our technologies are integral to systems that collect, transmit and process mission-critical data. We supply filter arrays for earth observation satellites, optical filters and mirrors for laser communication systems, thermal management materials that support precision optics assemblies and semiconductor materials that enable high-performance computing and next-generation communications at orbit. In orbital and deep space systems, including telescopes and probes, our beryllium mirrors, optical filters and beamsplitters provide the stability and clarity required for advanced scientific missions. We also support propulsion and imaging systems with engineered alloys and semiconductor sensor materials designed for efficiency and durability in extreme environments. Our capabilities extend from orbit back to the ground. For ground to space systems, we provide beryllium components, advanced optical coatings and high-performance filters used in observatories, laser communication ground stations and next-generation infrastructure that supports the movement of critical data around the world. We also play an essential role in launch systems, supplying materials for engine components, structural assemblies and advanced heat shielding systems. Our precious metal and chemical materials enhance engine efficiency and support thermal barrier coatings that are critical to mission reliability. And once spacecraft reach their destination, our materials remain central. In rovers and exploration vehicles, our lightweight structural materials and advanced optical coatings help ensure reliable performance in harsh and unpredictable environments. Looking ahead, our beryllium and alloyed materials are increasingly being designed into advanced microreactor concepts that will power future in-space propulsion and surface power systems. Across all these applications, the message is clear. Materion is embedded across the full space value chain from launch to orbit, from exploration to communication, from ground systems to emerging in-space power. Our materials are enabling the technologies that are expanding human capability and accelerating scientific discovery. And this quarter, we strengthened our position even further. We secured a new $15 million program to deliver advanced materials critical to engine performance for a major commercial space customer. This is a meaningful win and a clear signal of the trust customers place in Materion to support their most demanding missions. Q2 was an exceptional quarter. I'm incredibly proud of what our people have accomplished. Their commitment and hard work were evident across the board and were instrumental in delivering our outstanding results. I'm excited about the trajectory that we're on and look forward to what's next. With that, I'll turn the call over to Shelly to walk through the financial details. Shelly Chadwick: Thanks, Jugal, and good morning, everyone. During my comments, I will reference the slides posted on our website this morning, starting on Slide 11. In the second quarter, value-added sales, which exclude the impact of pass-through precious metal costs, were a record $308.2 million, up 15% from the prior year and up 18% sequentially. This year-over-year increase was driven by our highest quarterly aerospace and defense sales and significant growth seen across semiconductor, industrial, energy and telecom & data center. Additionally, as Jugal mentioned, all 3 of our businesses delivered double-digit year-over-year sales growth, highlighting the strong performance seen across the company. Adjusted earnings per share were a record $1.90, up 39% from the prior year and up 50% sequentially. Turning to Slide 12. Adjusted EBITDA was a record $71.8 million or 23.3% of value-added sales, an increase of 29% year-over-year with 250 basis points of margin expansion. This increase was driven by higher volume and favorable price/mix and strong operational performance, along with the benefit of some onetime items. Moving to Slide 13. Let me review second quarter results by business segment. Starting with Performance Materials, value-added sales were $190 million in the quarter, up 13% year-over-year and up 36% sequentially. This year-over-year increase was driven by significant growth across the aerospace and defense, telecom & data center, energy and semiconductor end markets. In addition to market strength, the strong sequential increase was driven by new business initiatives and the return to a normalized level of clad strip sales. Adjusted EBITDA was $48.3 million or 25.4% of value-added sales, up 16% compared to the prior year period with 80 basis points of margin expansion. This increase was driven by higher volume and strong price/mix. Sequentially, adjusted EBITDA was up 70% with 500 basis points of margin expansion. Looking out at the second half of 2026, we expect continued top line momentum supported by accelerating order book activity across most of our end markets, led by space, defense and semiconductor. Turning to Slide 14. Electronic Materials delivered another exceptional quarter. Value-added sales were $87.4 million, up 15% year-over-year, driven by continued strength in semiconductor as AI adoption fuels high demand for semiconductor chips and data storage devices, complemented by the benefit of new business wins. We delivered a record adjusted EBITDA of $28 million or 32% of value-added sales, up 57% year-over-year with nearly 900 basis points of margin expansion. This marks the fifth consecutive quarter of expanded margins in EM. These outstanding results reflect the higher volume, favorable price/mix and strong operational performance, along with the impact of new business and benefits from the cost optimization work done over the last few years. For the remainder of 2026, we expect to see additional top line improvement driven by increasing demand from the semiconductor market and continued contributions from new business. On Slide 15, Precision Optics value-added sales were $30.8 million, up 26% year-over-year, driven by new business wins and growth across all end markets. This marks the segment's strongest quarter since 2021 and its fifth consecutive quarter of top line growth. Adjusted EBITDA was $6.6 million or 21.4% of VA sales, up 206% year-over-year with significant margin expansion. This represents the first quarter delivering north of 20% adjusted EBITDA margin since 2021 and the sixth consecutive quarter of bottom line improvement. The continued improvement reflects the benefit of the ongoing transformation of our Precision Optics business with the new program wins and operational improvements leading the way. Looking out at the second half, we expect continued top line growth supported by new program wins, along with favorable end market dynamics. Moving now to cash debt and liquidity on Slide 16. We ended the quarter with a net debt position of approximately $421 million and $233 million of available capacity on our existing credit facility with leverage at 1.8x, below the midpoint of our targeted range. We saw strong cash performance in the quarter, generating $59 million in free cash flow from higher earnings and working capital improvements with approximately 150% cash conversion. We expect to continue strong free cash flow performance in the back half of the year, targeting roughly 75% conversion for the full year. Lastly, turning to Slide 17. Our robust first half results paired with record backlog and continued order rate momentum give us increased confidence in delivering stronger-than-anticipated full year results. We now anticipate mid-teens top line growth for 2026 and are raising our adjusted EPS outlook to $6.80 to $7.20 compared to our prior guidance of $6 to $6.50. This represents approximately a 30% year-over-year increase at the midpoint and underscores the momentum we are seeing across the company and the strength of our operating performance. This concludes our prepared remarks. We will now open the line for questions. Operator: [Operator Instructions] The first question comes from Dan Moore with CJS Securities. Will Gildea: This is Will on for Dan. In defense, orders are up 50% year-to-date. There seems to be prolonged conflicts developing on multiple fronts. How would you describe your outlook for growth, not necessarily for this year, but for 2027 and beyond relative to where you saw things entering this year? Jugal Vijayvargiya: Yes. Well, defense has certainly been an important driver of growth in our business. We've been talking the last few quarters about the level of new bookings that we're doing on defense, and they continue to increase every quarter. And then we're also talking about open RFQs that we have, and they've been increasing every quarter. So in fact, the latest data that we shared here is $90 million of incoming orders that we've had year-to-date, and we've got $500 million plus of open RFQs. Last quarter, that number, by the way, was around $300 million of open RFQs. So with everything going on, I think, in the world and just the general spending that the U.S. is projecting as well as, I would say, the allied countries are projecting, we expect this trend to continue and have defense be a strong driver of growth for our business, not only for this year, but I would expect that, I think, going on as well in the out years. So important market for us and one that I think we are very well suited with our material set to continue to see the growth. Will Gildea: That is very helpful. And then just one more. Can you take a minute or 2 and take a deeper dive into Precision Optics? Obviously, you've done a lot of work on the cost and margin front, but what are the biggest drivers of the top line growth year-to-date? And where do you see the most opportunity going forward? Jugal Vijayvargiya: Yes. Well, needless to say, Precision Optics has had a wonderful run over the last 5 quarters. We made leadership change and just general business changes in that area, and it's paid really, really great dividends for us. The top line has improved. The bottom line has improved even more, and we expect the top and bottom line to continue to do well on an ongoing and going-forward basis. We've had significant support from new business activity. The team has been involved in a number of different fronts. In particular, I would say, a growing semiconductor market. Also in the defense area, the space area have been important drivers. Life sciences is an important market for them. Industrial is an important market for them. So the market growth and market tailwinds certainly have helped. But I think what's really been great is the new business initiatives that the teams have been focused on. Some of those have materialized and are showing up in the growth rate. Others will continue to materialize as we go forward and hopefully will contribute to further growth in that business. On the operational side, the team has made significant progress, I think, on the manufacturing, the productivity, the yields, of course, rightsizing the business to the appropriate sales levels and ensuring that we're delivering to our customers in a timely manner and therefore, delivering the right level of margin growth as you've seen. So to deliver 20% plus margins is -- hasn't been seen in the last 5 years. And so it's really a milestone quarter for that business. And our expectation is that this business will continue to improve and contribute to the midterm target that we have of the overall company of 23% margin. So we're excited about what the business has achieved. And more importantly, I think we're excited about -- more excited about what the business can achieve over the next 3 to 5 years. Operator: Next question comes from Mike Harrison with Seaport Research Partners. Michael Harrison: Congrats on a strong quarter here. You noted that the space order book is up 100% year-on-year. I assume that's off a relatively small base. Hopefully, at some point, you break out space from the rest of aerospace and defense. Definitely appreciate the details here on Slide 8 that you provided on where you guys participate in the market. I was hoping that maybe you could dig a little bit deeper for us as we look at these applications, where are you seeing the fastest growth today? Or if we want to think about maybe where some of the largest addressable markets or largest longer-term opportunities could lie, again, referring to the illustration there on Slide 8. Jugal Vijayvargiya: Yes. Well, first of all, this is a very, very exciting market for us. We've talked about it over the last few years that this used to be a very niche market for us. But of course, it has emerged into one that is extremely exciting, growth-oriented, accelerated growth. I mean just to give you a perspective, I think we said up to last quarter that our business in the last few years, basically in the, I'll call it, the 3- to 4-year window had increased 5x. I'm here to say that now we're up to 6x growth in the last 3 to 4 years. So the continued growth in the space market is exciting for us. You mentioned that it's off of a small base. I would say not that small. It's a relatively good-sized business for us. So when you look at aerospace and defense for the quarter, I mean, you could approximate perhaps around 25 or so percent 1/4 of the business be in the -- directionally in the space side of things. So fairly sizable business for us, what it has evolved into. When you look at our biggest markets on that page you're referring to -- the slide that you're referring to, certainly launch and satellites are our 2 largest areas. We have significant content on the launch side. We have significant content on the satellite side. And then looking at the growth, I mean, the in-space propulsion and the surface power. So when you think about powering and providing remote power or quick power to this overall market, we are actively engaged on a number of fronts in that area. There are certainly some boxes that are more, again, niche, more science-oriented or one-off type of activities. But I think when you look at launch, you look at satellites, strong markets, you look at the power side, really, really high growth opportunity for us. And then when you look at the ground to space, that's, I would say, a little more of an emerging market as well. So exciting area for us. Michael Harrison: All right. And then I wanted to revisit this question on Electronic Materials margin and how sustainable it could be. We've discussed in the past that you might be seeing some unusually strong mix as well as the benefits from cost actions that you've taken. But this is a business that historically was more like mid- to high teens EBITDA margin. Q2 results, you're basically double that. So I guess given the strength that you're seeing in the order book and the improvement in the cost structure and what appears to be an upgraded mix, where do the margins go from the 32% that you reported this quarter? Shelly Chadwick: Mike, I'll start on that one. So certainly, we're really excited about the performance of that business this quarter, right? I mean, 32%, as you said, is something that is really a big step forward from where the business has been. And there's a number of factors going on. You talked about the mix. Mix is certainly in play here. We had a very nice mix in Q2, just given on what we could -- what orders came in, in the quarter and what we shipped out. As we look at the order book for the full year, that's probably a richer mix than we'll see all year. But the -- it's undeniable that there's been a big step forward in that business. And it's partly a little bit of volume, but it's a lot of the improvements that have been made in the business and making sure we get the value for our products. So I expect that structurally that margins are going to be well ahead of last year. This is not a new floor, as I always say. Jugal Vijayvargiya: Yes. Mike, I think it's important to note that when we had those, you mentioned the mid- sort of teens, high teens types of margins, we made it very clear at that time that this is not where we want this business to be, right? This is an Electronic Materials business, and it deserves and it needs to have electronic material level margins. So we're never satisfied with the mid-teens and the high teens type of margins that you mentioned. But frankly, we're not satisfied with where we are, right? We want to continue to drive better sales, better profitability going forward. But of course, we have to manage and balance the growth with the profitability, as Shelly indicated, we're a very balanced company when it comes to, I think, supplying in the semiconductor market. We talked about this before, whether it's power semi, communications, data storage, logic, memory, high-bandwidth memory, some of the accelerated growth activities that are going on in logic and memory right now. Of course, data storage with all the data center activity is growing. I mean so we really do provide a breadth of product that kind of goes across the entire semiconductor value chain. And our goal and objective is to make sure that we never, of course, go back to those types of margins, and we continue to build and drive a very balanced portfolio with good margin that should be coming with an Electronic Materials type of business. Michael Harrison: All right. And then just kind of a question on raw materials and energy costs and pricing specific to the Performance Materials segment, can you talk about any impact that you saw from -- I guess, it's probably more higher energy and freight costs that could impact you there. But just curious how much pricing is in that 13% growth number that you posted for value-added sales? And are there some materials within Performance Materials where you can push pricing harder given that this is a very strong demand environment and you may have relatively limited competition? Jugal Vijayvargiya: Yes. Look, we learned a lot during the COVID time frame, right, on how to manage supply, how to manage constraints and how to make sure that we can manage our operations accordingly. We also learned a lot during the inflationary times and I'd also call it the growth times about how to manage the appropriate pricing mechanisms and making sure that if we are seeing some cost impact that we are appropriately discussing those with our customers and making sure that those prices are adjusted too with our customers. We want to make sure that we're not the sponge with regard to that. Our teams continue to do that. They continue to manage it very well. And I think we've got processes in place to be able to do that. So wherever we see inflationary type impacts, so you mentioned energy as an example, if there are scenarios like that, we make sure that we have those appropriate discussions with our customers. So certainly, price is an important enabler to our growth, not only in PM, by the way, I mean it's really across the board because we want to make sure that we are getting the value -- we're delivering the value and then we're getting the appropriate return for that value that we're delivering. So it's an important element, and it's an important element in terms of being able to capture, particularly for the cost increases that we may see from our customers. Operator: Our next question comes from David Silver with Freedom Capital Markets. David Silver: So I'll preface my questions by saying these are exceptionally strong results. So the questions I'm having, at least a couple of them might sound a little nitpicky. But anyway, first thing I'd like to ask is maybe about R&D spend and just resourcing to continue to support what looks like pretty strong growth. But year-to-date, I mean, your R&D expense is flattish and your revenues are up well above double -- your value-added revenues are up well above double digits. Is this -- would I be correct in thinking, Jugal, that over time, your business is going to become a little more R&D intensive, more collaborations for leading-edge facilitating technology products? And what are your plans maybe on that -- in that regard, just for staffing and resourcing to support what looks to be some well above trend line growth for your company? Jugal Vijayvargiya: Yes. Good observation, David. And I can assure you and I can tell you that R&D is an extremely important enabler because innovation for us is at the core of what we do and making sure that we're providing the solutions to our customers that they need and that they may need going forward. So we are very much focused on that. At the same time, we're very much focused on making sure that many of the R&D activities are actually being funded by our customers and by various government entities. So we -- when we work with our customers, we make sure that in many cases, just like we do that on CapEx, by the way. I mean, so it's a very similar model to the CapEx model that we work with our customers on what type of support we are able to have with them so that they're jointly funded R&D activities and not just only funded by Materion. So when you look at some of our numbers, we kind of have to make sure that we're keeping all of that understood regarding R&D spending. The other element I would think of R&D spending is we are leveraging our portfolio and in a platform development way and going to our customers in a platform development way. The third is leveraging our portfolio in a way that we can grow with our existing technologies and existing solutions that we have. So I think R&D is a very, very important enabler and one that we're focused on. And I think -- I like to think of ourselves as a very sort of research and development heavy company, providing the solutions to our customers, but making sure that we're doing it in a very cost-effective way, leveraging, I think, support from our customers as needed. David Silver: Okay. Great. The next question kind of regards trends in sales along with trends in your order book or your backlog. So 15%-ish value-added revenue growth, 30% growth in your backlog. I'm thinking back a few years during another kind of bullish or very strong growth period for your company and several others that I followed towards the earlier part of the pandemic. And at that time, due to supply chain concerns and some other things, there was definitely a big dose of overordering or prebuying that worked itself out over the next couple of years. So nice on the way up, but there was a shakeout period to follow. As you look at your order book overall, I mean, what gives you confidence that the orders that you're filling now are really for or the orders that you're taking are really for kind of current demand and maybe not just buffer stocks or safety stocks for your customers? Jugal Vijayvargiya: Yes. Again, a good question. What I would tell you is that our order book that we have and the orders that we're getting is broad-based. It really runs across our important end markets that we have and not focused on, first of all, 1 or 2 things. Second, I would comment on is that when you look at the type of orders that we're getting and the areas that we're getting the orders in, we believe it is for consumption now and maybe in the next, let's say, 6 to 9 months and not some inventory buildup. So let's start with defense. We all know what's going on in the world, and we know what's happening with the overall defense spending globally. And so we believe that's actually for builds that are happening and not inventory buildup. When we look at space, space is another area where the same applies. When you look at commercial aerospace, I mean you look at the build rates that are going on and the increasing build rates that Boeing and Airbus are having and then now COMAC is coming on board, we believe it is for the orders that they have in place and the build rates that are going on. If you look at new energy applications, new energy applications, it is for the things that are going on and the development that CFS is doing or Kairos is doing and other new energy companies are doing and not for a build. Look at the supplies that we're making in the semiconductor side with memory applications, with high-bandwidth memory, high-performance logic, data storage, we know what's going on in the builds, whether it's data centers, whether it's for AI applications, it is for builds that are happening today. So in general, what I would tell you is our order book is broad-based. It runs across the various markets that we have. And we believe it is for applications that are happening now and not necessarily for inventory buildup that may be happening in various markets for the next 3 to 5 years. So we feel pretty good about, I think, what we're seeing across the board. David Silver: And I'll just repeat, my comment or observation was not about your company in particular, but just about a range of companies I was tracking several years ago. So thank you for that. Last question is really just kind of housekeeping. But going through one of the earlier slides, I believe, when you were talking about revenues, in your commentary, I think you used the term onetime items or special items or something that may have boosted either revenue or EBITDA this quarter that it counted. It wasn't nonrecurring, but maybe it was an unusual item. Did I hear that correctly? And if so, what did that refer to? Shelly Chadwick: Yes, I'll take that. You did hear that correctly. We had -- every quarter, we've got some onetime things that usually go both ways. I would say this quarter, we had a few that all went the positive way. So it was a little bit more impactful, call it, a few million, $2 million to $3 million in total. Nothing major stands out there. Some -- a refund, a settlement, a little bit of royalty income. So just a number of good guys that helps along the results a little bit, but nothing overly material. Operator: [Operator Instructions] The next question is from Dave Storms with Stonegate. David Storms: Just want to maybe start with the new contract win, the $50 million new contract win. Is there anything more you can tell us about this, maybe term or start date or anything like that? And if not, maybe you could just talk generally about how you're seeing the contracts like that in the market, are they all roughly the same size? Is there a lot more out there? Just anything like that would be helpful. Jugal Vijayvargiya: Yes. I mean in terms of actually the specific details of the application and the business, we're able to provide what we shared with you already. But this is a program that I'm going to say is probably going to run about maybe about a year, 1.5 years. We're basically in the process now. So we would expect probably this level of sales to be finished out by the end of next year. We get contracts that are anywhere from $1 million to -- you may recall, in space, about a year, 1.5 years ago, we announced 2, 3 sort of combined contracts of the same applications worth about $200 million, right? I mean -- and it was a multiyear contract and it's, in fact, just part of the overall space growth that we are seeing today. So the contracts vary in size, small, large, but I think this is a fantastic business win for critical materials that are going to be used in engine performance, and we're quite excited about it over the next 4 to 6 quarters. David Storms: That's great commentary. I appreciate that. And then maybe one more. Going back to defense and some of the drivers that you mentioned earlier that are driving that market. Second order impact of that, as we've seen is impact on the energy markets. Just curious as to how you're seeing the energy markets develop? Are operators being slower to move? Or could that be a bit of a lagger to the defense market or really anything else you're seeing there? Jugal Vijayvargiya: Yes. I mean energy, of course, has been an important market for us historically. I mean we've been a major player in the oil and gas. We continue to be. The oil rig count has not necessarily increased, but we continue to have good applications, I think, on the energy side. But what I think is really more exciting for us on the energy side is the new energy applications that we've been working on. And if those materialize over a period of time, those could mean significant boost to our energy market. So overall, I would say the energy market has been steady, but in general, but I think it's been boosted for us because of the new energy applications. Operator: We have a follow-up question coming from Mike Harrison with Seaport Research Partners. Michael Harrison: Just a few more for me. First of all, it doesn't look like you've increased your CapEx outlook. And I'm just curious, as you look at kind of the record backlog and the strength in the order book, can you just talk about where you stand on capacity and how you're thinking about maybe the need for additional growth CapEx in the coming years? Jugal Vijayvargiya: Yes. Well, I mean, we, as you know, pay a lot of attention to CapEx, and we paid a lot of attention to how we can get CapEx funding through our customers, through government entities, through any other type of partnerships and things like that. So we want to make sure that we're very prudent about the level of CapEx spending that we do. At the same time, we're making sure that we're driving more efficiency in our plants, more productivity in our plants, improving our yields, et cetera, so that we can get more output from the existing CapEx and existing equipment that we have. We certainly have been investing at the rate that is needed to make sure that as the growth is coming through, we're able to deliver to that growth. We don't want to outspend the growth. We want to be very prudent and cautious about that. But like I said, I think from a capacity standpoint, we are well positioned to be able to support the growth that's there. And I think we're well positioned to support the growth that's coming in the next year. So it's just, I think, great capital management from our team. Shelly Chadwick: Maybe just a quick housekeeping comment on CapEx. As you know, we were awarded a $65 million investment to expand beryllium capacity from one of the primes. Some of that money will be spent and refunded or sent to us this year. That number will come through CapEx, but is not shown in the CapEx forecast in our materials, just for clarity. Michael Harrison: All right. So in actuality, the CapEx number is higher than that $75 million you show in the forecast? Shelly Chadwick: It will be, right? But we'll just -- we'll have funds come in that offset. Jugal Vijayvargiya: Yes. Mike, this gets back to the strategy that, as you know, we've been leveraging for a number of years now, right? I mean, wherever we can, we want to make sure that we're developing joint activities with our customers, right, and taking on responsibility in a meaningful way with our customers. Michael Harrison: Okay. And then I guess last question is really -- I know it's very early to be looking at 2027, but you guys are looking at 30% EPS growth this year, record backlog, record margins, strong order patterns. As investors are starting to think longer term, are there any modeling assumptions that you're willing to share at this point in terms of how we might think about sales growth or margin performance into next year? Jugal Vijayvargiya: Yes. As you know, for '27, we'll start to put our heads together and start to talk with our teams later this year and start to put our kind of forecast together and then we share it with you guys in the January-ish early next year time frame. What I can tell you, and we've been talking about it, of course, is the general direction of where the markets are headed, right? We talk about defense and kind of what's happening and the backlog we have and the growth rate that we've seen. I mean, we all see, again, what's happening on the geopolitical and the spending side, we're seeing what's happening on space. We're seeing what's happening on the AI side, the data center side, the high-performance logic and memory, the need for energy that the world has, especially as data centers become more and more enabled and energy is needed and so on. So we talk about, of course, the market trends and what's happening in the market trends and the role that we play and how important of a player we are, I think, in those various markets. But of course, we'll have to put all that together and what that means for '27 and beyond and be able to share that with you guys at another time. Operator: We have reached the end of the question-and-answer session. And I will now turn the call over to Kyle Kelleher for closing remarks. Kyle Kelleher: Thank you. This concludes our second quarter 2026 earnings call. A recorded playback of this call will be available on the company's website, materion.com. I'd like to thank you for participating on this call and your interest in Materion. I will be available for any follow-up questions. My number is (216) 383-4931. Thank you again. Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation. Before you buy stock in Materion, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Materion wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Materion. The Motley Fool has a disclosure policy. Materion (MTRN) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Materion Corporation? Here are five stocks we like better. Record Q2 performance: Value-added sales rose 15% year over year to $308.2 million, while adjusted EPS climbed 39% to a record $1.90. Adjusted EBITDA increased 29% to $71.8 million, with margins expanding to 23.3%. Broad-based demand and backlog growth: Semiconductor sales grew 23%, telecom and data-center sales nearly 50%, and energy shipments more than 20%. Backlog rose roughly 30% year over year, supported by strong defense, space, semiconductor and aerospace orders. Raised 2026 outlook: Materion now expects mid-teens sales growth and adjusted EPS of $6.80–$7.20, up from its previous $6.00–$6.50 forecast, reflecting continued momentum across its operating segments. Materion (NYSE:MTRN) reported record second-quarter sales and earnings, supported by double-digit growth across its three operating segments and rising demand from semiconductor, aerospace and defense, energy, industrial, and telecom and data-center customers. President and CEO Jugal Vijayvargiya said the company delivered its highest quarterly sales and earnings in its history. Value-added sales, which exclude pass-through precious-metal costs, rose 15% year over year to a record $308.2 million. Adjusted earnings per share increased 39% from the prior-year period and 50% sequentially to a record $1.90. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Adjusted EBITDA reached $71.8 million, up 29% year over year, while adjusted EBITDA margin expanded 250 basis points to 23.3% of value-added sales. CFO Shelly Chadwick said the improvement reflected higher volumes, favorable price mix and operational execution, as well as $2 million to $3 million of positive one-time items, including a refund, settlement and royalty income. Vijayvargiya said sales to semiconductor customers climbed 23% year over year as artificial-intelligence-related demand supported leading-edge logic, memory, power and communications applications. Telecom and data-center sales increased nearly 50%, driven by AI infrastructure construction and wireless-network expansion outside the U.S. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High The company also recorded its highest quarterly sales to aerospace and defense customers. Management cited demand and new business in defense and space applications, alongside a recovery in commercial aerospace. Energy shipments increased more than 20%, aided by new business in next-generation energy applications, while industrial-market performance was led by demand for beryllium-nickel spring material used in applications connected to data-center-related nonresidential construction. Materion entered the quarter with record backlog, up roughly 30% from a year earlier and 20% from the beginning of 2026. Incoming orders during the first half rose nearly 30% year over year to a new high, according to Vijayvargiya. Defense incoming orders totaled $90 million in the first half, while open requests for quotations exceeded $500 million. Space orders doubled from the prior year. Semiconductor orders increased 20%, including higher demand for high-performance memory applications. Commercial aerospace backlog continued to build. → No Hangover: Revisiting Microsoft One Week After Earnings Management said it believes the order activity is broadly tied to current customer production needs rather than inventory accumulation. Vijayvargiya pointed to defense spending, commercial-aircraft build rates, data-center construction and ongoing development in energy applications as support for that view. Performance Materials generated value-added sales of $190 million, up 13% year over year and 36% sequentially. The segment’s adjusted EBITDA rose 16% to $48.3 million, representing a 25.4% margin. Management attributed the growth to aerospace and defense, telecom and data center, energy and semiconductor demand, as well as new business and a return to normalized clad-strip sales. Electronic Materials posted value-added sales of $87.4 million, up 15% year over year. Its adjusted EBITDA increased 57% to a record $28 million, and adjusted EBITDA margin expanded by nearly 900 basis points to 32%. Chadwick said the result benefited from favorable quarterly mix, higher volumes, new business, pricing and cost-optimization work. She cautioned that the second-quarter mix was likely richer than what the segment would see throughout the full year, but said margins should remain structurally ahead of last year’s levels. Precision Optics reported value-added sales of $30.8 million, a 26% increase and the segment’s strongest quarter since 2021. Adjusted EBITDA rose 206% to $6.6 million, producing a 21.4% margin. Vijayvargiya said new business, operational improvements, productivity, improved yields and changes made within the business contributed to the performance. He identified semiconductor, defense, space, life sciences and industrial markets as contributors to the segment’s growth. Management described space as an expanding growth market, with its business in the sector increasing about sixfold over the past three to four years. Vijayvargiya said launch systems and satellites are Materion’s two largest space-related areas, while in-space propulsion, surface power and ground-to-space systems represent additional opportunities. During the quarter, the company secured a $15 million program with a major commercial-space customer for advanced materials used in engine performance. Management expects the program to run for roughly one to one-and-a-half years, with sales substantially completed by the end of 2027. Materion said it has sufficient capacity to support expected growth while remaining selective with capital spending. Chadwick noted that a previously awarded $65 million investment from a prime contractor to expand beryllium capacity will flow through capital expenditures as funds are spent and reimbursed, but is not included in the company’s stated capital-expenditure forecast. The company generated $59 million in free cash flow during the quarter, supported by earnings and working-capital improvements. Cash conversion was approximately 150% for the period. Materion ended the quarter with net debt of about $421 million, available credit-facility capacity of $233 million and leverage of 1.8 times. For 2026, Materion raised its outlook for the second consecutive quarter. The company now expects mid-teens year-over-year sales growth and adjusted EPS of $6.80 to $7.20, compared with prior guidance of $6.00 to $6.50. At the midpoint, the new EPS outlook represents roughly 30% year-over-year growth, according to management. Materion Corporation (NYSE: MTRN) is a global supplier of advanced materials and precision-engineered solutions. The company develops and manufactures high-performance alloys, engineered clad and composite materials, precision thin film products, and advanced optical and electronic materials. Materion's offerings address critical performance requirements for industries where material properties such as strength, wear resistance, conductivity and optical clarity are paramount. Materion's core businesses include beryllium and beryllium composites for aerospace and defense platforms, nickel- and copper-based specialty alloys for industrial and medical applications, optical coatings and substrates for scientific instrumentation, and electronic materials used in semiconductor production. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Materion Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Materion Corporation MTRN used its second-quarter 2026 call to emphasize strengthening demand across defense, space, semiconductors, energy and data-center applications. Record backlog and rising orders gave management confidence to lift its full-year outlook for a second consecutive quarter. MTRN’s second-quarter 2026 adjusted earnings of $1.90 per share topped the Zacks Consensus Estimate of $1.55. Revenues of $613.9 million also surpassed the Zacks Consensus Estimate of $548.13 million, while value-added sales reached $308.2 million. Materion Corporation price-consensus-eps-surprise-chart | Materion Corporation Quote President and CEO Jugal Vijayvargiya said Materion now expects mid-teens sales growth for 2026, reflecting stronger demand across its primary markets and applications. CFO and vice president of finance Shelly Chadwick raised adjusted earnings guidance to $6.80-$7.20 per share from $6.00-$6.50. The new midpoint is approximately 30% above 2025 and 12% above the prior midpoint. Chadwick said the outlook is supported by first-half execution, record backlog and continuing order momentum. Management also expects strong second-half free cash flow and targets roughly 75% conversion for the year. Vijayvargiya said backlog ended the quarter about 30% above the prior year and 20% higher than at the start of 2026. First-half incoming orders reached a record and increased nearly 30%. Defense incoming orders totaled $90 million in the first half, while open requests for quotation exceeded $500 million, up from roughly $300 million in the prior quarter. Semiconductor orders rose 20%, with stronger high-performance memory demand. Vijayvargiya said space orders doubled from a year earlier, while commercial aerospace backlog continued to build. He described the strength as broad-based rather than concentrated in one or two markets. Vijayvargiya said Materion's space business has expanded about sixfold over the past three to four years. He estimated that space now represents roughly one-quarter of the aerospace and defense business. Launch systems and satellites are the largest current applications. Management also sees growth opportunities in in-space propulsion, surface power and ground-to-space infrastructure. Materion secured about $15 million of new business for advanced materials used in engine performance for a major commercial space customer. Vijayvargiya said the program should run roughly one to one-and-a-half years, with sales expected through the end of 2027. Adjusted EBITDA reached $71.8 million, or 23.3% of value-added sales, with 250 basis points of year-over-year margin expansion. Higher volume, favorable price and mix, and operating execution drove the improvement. Electronic Materials posted a 32% adjusted EBITDA margin, while Precision Optics reached 21.4%, its first result above 20% since 2021. Performance Materials delivered a 25.4% margin. A Seaport Research Partners analyst questioned whether Electronic Materials' margin was sustainable. Chadwick said the second quarter carried the richest mix expected for the year and should not be treated as a new floor, although structural profitability remains well above last year. A Prime Executions analyst asked whether backlog reflected current consumption or inventory building. Vijayvargiya said orders are tied largely to demand over the next six to nine months across defense, space, aerospace, energy and semiconductors. Management also addressed approximately $2 million-$3 million of favorable one-time items. Chadwick cited a refund, a settlement and royalty income, describing the aggregate benefit as helpful but not material. A Seaport Research Partners analyst asked whether capacity spending must rise. Vijayvargiya said Materion can support expected growth through productivity, yield improvements and selective investment, while customer and government funding help limit the company's direct burden. Management's tone remained confident but measured. Vijayvargiya emphasized that Materion intends to fund capacity in step with demand rather than outspend the growth opportunity. Chadwick noted that a prime contractor's $65 million award to expand beryllium capacity will increase reported capital spending, but related reimbursements will offset the cash requirement. The approach reflects a focus on translating demand into earnings and cash while preserving discipline. MTRN carries a Zacks Rank #2 (Buy) at present, indicating favorable earnings-estimate revision trends and stronger near-term potential within the Zacks framework. However, its Value, Growth and Momentum Scores are all D, while the VGM Score is F. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The weak Style Scores temper the favorable Rank because they are designed to complement it. The Rank can change as analysts revise estimates following the just-reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Materion Corporation (MTRN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

MAYFIELD HEIGHTS, Ohio, August 05, 2026--(BUSINESS WIRE)--Materion Corporation (NYSE: MTRN) today reported strong second-quarter 2026 financial results and raised its full-year outlook. Financial Summary Net sales were $613.9 million versus $431.7 million in the prior year period; value-added sales1 were $308.2 million versus $269.0 million in the prior year period Net income of $38.8 million, or $1.84 per share, diluted, versus $25.1 million, or $1.21 per share, in the prior year period; adjusted earnings of $1.90 per share versus $1.37 in the prior year period Operating profit of $51.7 million versus $36.8 million in the prior year period; record adjusted EBITDA2 of $71.8 million or 23.3% of value-add sales versus $55.8 million or 20.8% in the prior year period, with 250 basis points margin expansion Strong free cash flow3 generation of $59 million in the quarter with ~150% cash conversion Increasing full-year adjusted earnings per share outlook to $6.80 – $7.20, up 30% versus 2025 at the midpoint Business Highlights Delivered record quarterly value-added sales, adjusted EBITDA and adjusted EPS Each business segment delivered double-digit year over year sales growth Exceeded 23% quarterly adjusted EBITDA margin for the first time in Company’s history Exited the quarter with record backlog, up ~30% year over year and ~20% since the beginning of year Awarded ~$15M in new business to supply advanced materials critical to engine performance for a large commercial space customer "It is an exciting time at Materion, as our advanced material solutions are powering the critical technologies that are moving the world forward, and demand across our diverse end markets continues to accelerate. Thanks to the dedication and flawless execution across our teams, we achieved record sales and profitability in the second quarter, setting a strong foundation for the rest of the year," said Jugal Vijayvargiya, President & CEO of Materion. "We continue to see strong order rate momentum, driven by new business wins and rising demand from our existing customers. We closed out the quarter once again with record backlog, giving us the confidence to meaningfully raise our full-year outlook." SECOND-QUARTER 2026 RESULTS Net sales for the quarter were $613.9 million, compared to $431.7 million in the prior year period. Value-added sales were $308.2 million for the quarter, up 15% from the prior year period driven by the highest quarterly aerospace & defense sales with significant growth seen across semiconductor, industrial, energy and telecom & data center end markets. Operating profit for the quarter was $51.7 million and net income was $38.8 million, or $1.84 per diluted share, compared to operating profit of $36.8 million and net income of $25.1 million, or $1.21 per share, in the prior year period. Excluding special items4, adjusted EBITDA was at an all-time quarterly high of $71.8 million, a quarterly record of 23.3% of value-added sales, compared to $55.8 million or 20.8% of value-added sales in the prior year period. The record adjusted EBITDA and margin was driven by higher volume, strong price/mix and operational performance, as well as some favorable one-time items. Adjusted net income was $40.1 million excluding acquisition amortization, or $1.90 per diluted share, compared to $1.37 per share in the prior year period. OUTLOOK Our first half results combined with increasing backlog and strong order rate momentum improves our confidence in delivering record full-year results. We now expect mid-teens top‑line growth and are raising our full‑year adjusted earnings per share guidance to $6.80 to $7.20, a 30% increase from prior year at the midpoint. ADJUSTED EARNINGS GUIDANCE It is not possible for the Company to identify the amount or significance of future adjustments associated with potential insurance and litigation claims, legacy environmental costs, acquisition and integration costs, certain income tax items, or other non-routine costs that the Company adjusts in the presentation of adjusted earnings guidance. These items are dependent on future events that are not reasonably estimable at this time. Accordingly, the Company is unable to reconcile without unreasonable effort the forecasted range of adjusted earnings guidance for the full year to a comparable GAAP range. However, items excluded from the Company's adjusted earnings guidance include the historical adjustments noted in Attachments 4 through 8 to this press release. CONFERENCE CALL Materion Corporation will host an investor conference call with analysts at 9:00 a.m. Eastern Time, August 5, 2026. The conference call will be available via webcast through the Company’s website at www.materion.com. By phone, please dial (888) 506-0062. Calls outside the U.S. can dial (973) 528-0011; please reference participant access code of 962575. A replay of the call will be available until August 19, 2026 by dialing (877) 481-4010 or (919) 882-2331 if international; please reference replay ID number 53275. The call will also be archived on the Company’s website. FOOTNOTES 1 Value-added sales deducts the impact of pass-through metals from net sales2 EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization3 See reconciliation of operating cash flow to free cash flow in Attachment 94 Details of the special items can be found in Attachments 4 through 8 ABOUT MATERION Materion Corporation is a global leader in advanced materials solutions for high-performance industries including semiconductor, industrial, aerospace & defense, energy and automotive. With nearly 100 years of expertise in specialty engineered alloy systems, inorganic chemicals and powders, precious and non-precious metals, beryllium and beryllium composites, and precision filters and optical coatings, Materion partners with customers to enable breakthrough solutions that move the world forward. Headquartered in Mayfield Heights, Ohio, the Company employs more than 3,000 talented people worldwide, serving customers in more than 60 countries. FORWARD-LOOKING STATEMENTS Portions of the narrative set forth in this document that are not statements of historical or current facts are forward-looking statements. Our actual future performance may materially differ from that contemplated by the forward-looking statements as a result of a variety of factors. These factors include, in addition to those mentioned elsewhere herein: the global economy, including inflationary pressures, potential future recessionary conditions and the impact of tariffs and trade agreements; the impact of any U.S. Federal Government shutdowns or sequestrations; the condition of the markets which we serve, whether defined geographically or by segment; changes in product mix and the financial condition of customers; our success in developing and introducing new products and new product ramp-up rates; our success in passing through the costs of raw materials to customers or otherwise mitigating fluctuating prices for those materials, including the impact of fluctuating prices on inventory values; our success in identifying acquisition candidates and in acquiring and integrating such businesses; the impact of the results of acquisitions on our ability to fully achieve the strategic and financial objectives related to these acquisitions; our success in implementing our strategic plans and the timely and successful start-up and completion of any capital projects; other financial and economic factors, including the cost and availability of raw materials (both base and precious metals), physical inventory valuations, metal consignment fees, tax rates, exchange rates, interest rates, pension costs and required cash contributions and other employee benefit costs, energy costs, regulatory compliance costs, the cost and availability of insurance, credit availability, and the impact of the Company’s stock price on the cost of incentive compensation plans; the uncertainties related to the impact of war, terrorist activities, and acts of God; changes in government regulatory requirements and the enactment of new legislation that impacts our obligations and operations; the conclusion of pending litigation matters in accordance with our expectation that there will be no material adverse effects; the disruptions in operations from, and other effects of, catastrophic and other extraordinary events including outbreaks from infectious diseases and other extraordinary events including geopolitical conflicts such as the conflict between Russia and Ukraine and the conflict between the United states and Iran; realization of expected financial benefits expected from the Inflation Reduction Act of 2022; and the risk factors set forth in Part 1, Item 1A of the Company's 2025 Annual Report on Form 10-K and in other reports that we file with the SEC. View source version on businesswire.com: https://www.businesswire.com/news/home/20260804646762/en/ Contacts Investor Contact: Kyle Kelleher(216) [email protected] Media Contact: Jason Saragian(216) [email protected] https://materion.com

This article first appeared on GuruFocus. Value-Added Sales: Record $308.2 million, up 15% year-over-year and 18% sequentially. Adjusted EPS: Record $1.90, up 39% year-over-year and 50% sequentially. Adjusted EBITDA: Record $71.8 million, or 23.3% of value-added sales, up 29% year-over-year with 250 basis points of margin expansion. Performance Materials Value-Added Sales: $190 million, up 13% year-over-year and 36% sequentially. Performance Materials Adjusted EBITDA: $48.3 million, or 25.4% of value-added sales, up 16% year-over-year with 80 basis points of margin expansion. Electronic Materials Value-Added Sales: $87.4 million, up 15% year-over-year. Electronic Materials Adjusted EBITDA: Record $28 million, or 32% of value-added sales, up 57% year-over-year with nearly 900 basis points of margin expansion. Precision Optics Value-Added Sales: $30.8 million, up 26% year-over-year. Precision Optics Adjusted EBITDA: $6.6 million, or 21.4% of value-added sales, up 206% year-over-year. Free Cash Flow: $59 million generated in the quarter, with approximately 150% cash conversion. Net Debt: Approximately $421 million, with leverage at 1.8 times. Full-Year 2026 Adjusted EPS Guidance: Raised to $6.80 to $7.20, up from prior guidance of $6 to $6.50. Warning! GuruFocus has detected 5 Warning Signs with MTRN. Is MTRN fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record quarterly sales and earnings, with all three business segments achieving double-digit sales and EBITDA growth. Adjusted EBITDA margin exceeded 23% for the first time, driven by strong operational leverage and disciplined execution. Electronic materials delivered a record 32% adjusted EBITDA margin, marking its fifth consecutive quarter of margin expansion. Precision Optics surpassed 20% margins, delivering its best profit in over five years and continuing its transformational performance. Record backlog up roughly 30% year-over-year and 20% since the start of the year, with incoming orders in the first half growing nearly 30% year-over-year. Raised full-year adjusted EPS guidance to $6.80-$7.20, representing approximately a 30% increase year-over-year at the midpoint. Strong free cash flow generation of $59 million in the quarter, with approximately 150% cash conversion. Defense orders up 50% year-to-date, with $90 million in incoming orders and over $500 million in open RFQs. Space orders doubled year-over-year, and the company secured a new $15 million program for a major commercial space customer. Semiconductor sales up 23% year-over-year, driven by AI adoption and growth in power and communication markets. Adjusted EBITDA benefited from one-time items totaling $2 million to $3 million, which may not be recurring. Electronic materials margin of 32% may not be sustainable at that level for the full year due to a richer mix in Q2. R&D spend remained flat year-to-date despite significant revenue growth, potentially limiting future innovation support. The company did not increase its CapEx outlook despite record backlog, which could strain capacity if demand continues to outpace investment. Energy market growth is steady but not accelerating, with oil and gas rig counts not increasing, and new energy applications are still in development. The company did not provide specific 2027 guidance, leaving uncertainty about the sustainability of current growth rates. Potential for customer over-ordering or pre-buying in the current strong demand environment, which could lead to a future shakeout. The $15 million space contract win is relatively small compared to the company's overall backlog, and its contribution may be limited. The company's leverage ratio of 1.8 times, while below target, still indicates a significant net debt position of approximately $421 million. The company's growth is heavily dependent on continued geopolitical tensions and defense spending, which could be volatile. Q: In defense, orders are up 50% year to date. How would you describe your outlook for growth, not necessarily for this year, but for 2027 and beyond relative to where you saw things entering this year?A: Jugal Vijayvargiya (President and CEO): Defense has certainly been an important driver of growth. We've been talking about the level of new bookings on defense, and they continue to increase every quarter. We have $90 million of incoming orders year-to-date and over $500 million in open RFQs, up from around $300 million last quarter. With everything going on in the world and the general spending that the US and allied countries are projecting, we expect this trend to continue and have defense be a strong driver of growth for our business, not only for this year, but in the out years as well. Q: Given the strength you're seeing in the order book and the improvement in the cost structure, where do the margins go from the 32% that you reported this quarter in Electronic Materials?A: Shelly Chadwick (CFO): We're really excited about the performance of that business this quarter. Mix is certainly in play here; we had a very nice mix in Q2. As we look at the book for the full year, that's probably a richer mix than we'll see all year. But it's undeniable that there's been a big step forward in that business. It's partly a little bit of volume, but it's a lot of the improvements that have been made in the business and making sure we get the value for our products. I expect that structurally margins are going to be well ahead of last year. This is not a new floor. Q: Can you take a deeper dive into Precision Optics? What are the biggest drivers of the top-line growth year to date and where do you see the most opportunity going forward?A: Jugal Vijayvargiya (President and CEO): Precision Optics has had a wonderful run over the last five quarters. We made leadership changes and general business changes in that area, and it's made great dividends. The top-line has improved, and the bottom line has improved even more. There's significant support from new business activity, particularly in the semiconductor, defense, and space areas. On the operational side, the team has made significant progress on manufacturing, productivity, and yields. Delivering 20% plus margins hasn't been seen in the last five years, so it's really a milestone quarter. Our expectation is that this business will continue to improve and contribute to the mid-term target of 23% margin for the overall company. Q: You noted that the space order book is up 100% year on year. Where are you seeing the fastest growth today, and where could the largest addressable markets or largest longer-term opportunities lie?A: Jugal Vijayvargiya (President and CEO): This is a very exciting market for us. Our business in the last three to four years has grown six times. It's a relatively good size business for uswhen you look at aerospace and defense for the quarter, roughly 25% of the business is directionally in the space side. Launch and satellites are our two largest areas. Looking at growth, in-space propulsion and surface power are really high growth opportunities. The ground-to-space market is a little more emerging, but it's an exciting area for us. Q: Can you talk about any impact from higher energy and freight costs? How much pricing is in that 13% growth number for Performance Materials, and can you push pricing harder given the strong demand environment?A: Jugal Vijayvargiya (President and CEO): We learned a lot during the COVID timeframe on how to manage supply and constraints. We also learned during inflationary times about managing appropriate pricing mechanisms. If we are seeing cost impacts, we are appropriately discussing those with our customers and making sure prices are adjusted. We want to make sure that we're not the sponge. Price is an important enabler to our growth, not only in PM but across the board, because we want to make sure we are getting the value we deliver and the appropriate return for that value. Q: Your R&D expense is flattish while revenues are up well above double-digits. Would I be correct in thinking your business is going to become a little more R&D intensive, and what are your plans for staffing and resourcing?A: Jugal Vijayvargiya (President and CEO): R&D is an extremely important enabler because innovation is at the core of what we do. Many of the R&D activities are actually being funded by our customers and various government entities. It's a very similar model to the CapEx model, where we work with customers on jointly funded R&D activities. We are leveraging our portfolio in a platform development way. R&D is a very important enabler, and we're focused on doing it in a very cost-effective way, leveraging support from our customers as needed. Q: Your value-added revenue growth is 15% while backlog is up 30%. What gives you confidence that the orders you're taking are for current demand and not just buffer stocks or safety stocks for your customers?A: Jugal Vijayvargiya (President and CEO): Our order book is broad-based and runs across our important end markets. When you look at the type of orders we're getting, we believe it is for consumption now and maybe in the next six to nine months, not inventory buildup. In defense, we know what's happening with global defense spending, so we believe it's for builds that are happening. In commercial aerospace, we look at the increasing build rates at Boeing, Airbus, and Comac. In new energy applications, it's for the development that CFS and other companies are doing. In semiconductors, we know what's going on with data centers and AI applications. We feel pretty good about what we're seeing across the board. Q: You used the term "one-time items" that may have boosted EBITDA this quarter. What did that refer to?A: Shelly Chadwick (CFO): We have one-time things every quarter that usually go both ways. This quarter, we had a few that all went the positive way, so it was a little bit more impactfulcall it a few million, $2 million to $3 million in total. Nothing major stands out: a refund, a settlement, a little bit of royalty income. Just a number of good guys that helped along the results a little bit, but nothing overly material. Q: Can you tell us more about the new $15 million contract win? What is For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record quarterly sales and earnings driven by double-digit growth across all three business segments and unprecedented demand for advanced materials. Performance was bolstered by significant operational leverage and disciplined execution, leading to a milestone adjusted EBITDA margin exceeding 23%. The semiconductor market grew 23% year-over-year, fueled by AI-driven demand for leading-edge logic, high-performance memory, and power applications. Telecom and data center sales surged nearly 50%, propelled by global AI infrastructure build-outs and wireless network expansion outside the U.S. The space market has evolved into a major growth engine, with business increasing 6x over the last few years as Materion embeds across the full value chain from launch to orbit. Industrial market strength was specifically linked to data center build-outs, which increased demand for beryllium-nickel spring materials used in nonresidential construction. Management attributed margin expansion in Electronic Materials to a richer product mix and the successful realization of multi-year cost optimization initiatives. Increased full-year sales growth outlook to mid-teens, reflecting accelerating demand signals and a record backlog up 30% year-over-year. Raised full-year adjusted EPS guidance to $6.80–$7.20, representing a 30% increase over the prior year at the midpoint. Anticipate continued top-line momentum in the second half of 2026, led by robust order book activity in space, defense, and semiconductor markets. Targeting approximately 75% free cash flow conversion for the full year, supported by working capital improvements and disciplined capital allocation. Guidance assumes a normalized level of clad strip sales and continued contributions from new business initiatives across all segments. Q2 results included approximately $2 million to $3 million in positive one-time items, including a settlement, a refund, and royalty income. Secured a $65 million investment from a defense prime to expand beryllium capacity, which will be reflected in CapEx but offset by customer funding. Management noted that while current Electronic Materials margins of 32% are exceptional, they may represent a peak mix rather than a permanent new floor. The company is increasingly utilizing a 'jointly funded' R&D and CapEx model to mitigate financial risk while supporting customer-specific innovation. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management highlighted $500 million in open RFQs for defense, up from $300 million in the prior quarter, indicating a long-term growth trajectory. Space orders have doubled year-over-year, with the market now representing roughly 25% of the total Aerospace & Defense segment. The segment's return to 20%+ margins for the first time since 2021 was driven by leadership changes, rightsizing, and improved manufacturing yields. Growth is being fueled by new business in life sciences and semiconductor applications rather than just market recovery. Management expressed confidence that current orders reflect immediate consumption for active builds in AI, data centers, and defense programs. The order book is broad-based across multiple end markets, reducing the risk of a 'shakeout' period seen in previous cycles.

Materion (MTRN) came out with quarterly earnings of $1.9 per share, beating the Zacks Consensus Estimate of $1.55 per share. This compares to earnings of $1.37 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +22.58%. A quarter ago, it was expected that this supplier of engineered materials to technology companies would post earnings of $1.24 per share when it actually produced earnings of $1.27, delivering a surprise of +2.42%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Materion, which belongs to the Zacks Mining - Miscellaneous industry, posted revenues of $613.91 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 12.00%. This compares to year-ago revenues of $431.66 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Materion shares have added about 82.7% since the beginning of the year versus the S&P 500's gain of 13%. While Materion has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Materion was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.75 on $559.7 million in revenues for the coming quarter and $6.45 on $2.23 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Mining - Miscellaneous is currently in the bottom 22% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, MP Materials Corp. (MP), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly earnings of $0.02 per share in its upcoming report, which represents a year-over-year change of +115.4%. The consensus EPS estimate for the quarter has been revised 816.7% lower over the last 30 days to the current level. MP Materials Corp.'s revenues are expected to be $99.21 million, up 72.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Materion Corporation (MTRN) : Free Stock Analysis Report MP Materials Corp. (MP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

ATI Inc. ATI is set to release second-quarter 2026 results before the market opens on Aug. 6. The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an earnings surprise of roughly 8.56% on average. It posted an earnings surprise of 13.6% in the last reported quarter. ATI is expected to have benefited from strong aerospace and defense demand, favorable pricing and operational efficiencies. ATI’s shares have gained 159.4% over the past year compared with the Zacks Aerospace - Defense Equipment industry’s 9.8% growth. Image Source: Zacks Investment Research Let’s see how things are shaping up for this announcement. The Zacks Consensus Estimate for second-quarter consolidated revenues for ATI is currently pegged at $1,220 million, indicating a year-over-year rise of 6.98%. ATI is expected to have benefited from strong demand across aerospace, defense and specialty energy markets in the second quarter, supporting higher shipments of proprietary alloys, forgings and specialty materials while driving margin expansion. The ongoing ramp in commercial aircraft production, increasing adoption of next-generation jet engines and rising defense spending are likely to have remained key growth drivers. The company also continues to benefit from investments in nuclear power and gas turbine infrastructure to meet rising electricity demand from AI-driven data centers. Its financial outlook remains supported by expanding margins, strong free cash flow generation and disciplined capital allocation. ATI expects adjusted free cash flow of $465-$525 million for full-year 2026, reflecting continued confidence in its earnings. Investments in its nickel melt system and new vacuum induction melting capacity are expected to strengthen its differentiated product portfolio while limiting execution risk. Earnings growth is also expected to have been supported by favorable pricing, cost reductions, productivity improvements, operational efficiencies and ATI's strong competitive position in titanium and nickel-based superalloys. Continued debt reduction, disciplined share repurchases and targeted capital investments in high-margin aerospace applications further position the company to outperform expectations and sustain profitable growth. ATI Inc. price-eps-surprise | ATI Inc. Quote Our proven model predicts an earnings beat for ATI this time around. The combination of a positive Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is just the case here. Earnings ESP: Earnings ESP for ATI is +1.32%. The Zacks Consensus Estimate for the second quarter is currently pegged at $1.03. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Zacks Rank: ATI currently carries a Zacks Rank #2. Here are some companies you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter: Avient Corporation AVNT, scheduled to release earnings on Aug. 6, has an Earnings ESP of +0.87% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. The consensus estimate for AVNT’s earnings for the second quarter is currently pegged at 89 cents. Albemarle Corporation ALB, scheduled to release earnings on Aug. 5, has an Earnings ESP of +2.21% and carries a Zacks Rank #3 at present. The consensus mark for ALB’s second-quarter earnings is currently pegged at $3.35. Materion Corporation MTRN, slated to release earnings on Aug. 5, has an Earnings ESP of +5.39%. The Zacks Consensus Estimate for MTRN's earnings for the second quarter is currently pegged at $1.55. MTRN currently carries a Zacks Rank #2. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ATI Inc. (ATI) : Free Stock Analysis Report Albemarle Corporation (ALB) : Free Stock Analysis Report Materion Corporation (MTRN) : Free Stock Analysis Report Avient Corporation (AVNT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Century Aluminum Company CENX is expected to report second-quarter 2026 results on Aug. 6, after market close. The consensus mark for earnings has moved down 1.6% over the past 90 days to $2.40 per share for the quarter. Century Aluminum Company price-eps-surprise | Century Aluminum Company Quote CENX’s earnings missed the Zacks Consensus Estimate in each of the trailing four quarters, delivering a negative average surprise of 75.7%. Our proven model does not conclusively predict an earnings beat for CENX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, but that is not the case here. Earnings ESP: The Earnings ESP for CENX is 0.00%. You can uncover the best stocks before they are reported with our Earnings ESP Filter. Zacks Rank: CENX currently has a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 Rank stocks here. Century Aluminum's second-quarter performance is likely to have been supported by a favorable aluminum pricing environment, but investors may remain cautious about the sustainability and quality of the earnings improvement. The company projected adjusted EBITDA of $315-$335 million, up sharply from $231 million in the first quarter, primarily driven by higher realized aluminum prices and stronger regional premiums. Management estimated that favorable LME prices and delivery premiums would contribute roughly $85-$95 million to quarterly EBITDA, making commodity prices the dominant earnings driver. Higher input costs are likely to have prevented CENX from capturing the full benefit of stronger aluminum markets. The company expects raw-material inflation to reduce adjusted EBITDA by around $10 million, reflecting continued pressure from elevated prices for coke, pitch and caustic soda. It also noted that alumina costs remained under pressure because of geopolitical disruptions in the Middle East, highlighting that supply-chain risks and commodity inflation continued to weigh on margins despite stronger selling prices. These headwinds suggest that earnings growth remained highly dependent on favorable metal prices rather than improvements in operating efficiency. Century is likely to have faced elevated operating costs in the second quarter. While energy benefits of about $15 million are projected to support earnings, management expected a $15-$20 million drag from operating expenses and other items, with ongoing Mt. Holly expansion and Grundartangi restart activities affecting margins before delivering full production benefits. Benefits from the Grundartangi restart are expected to materialize mainly in the third quarter, suggesting only a limited contribution to second-quarter operating results. Although Century is likely to have benefited from stronger aluminum prices, improved premiums and higher production during the quarter, much of the expected earnings growth appears to be driven by favorable external market conditions. Persistent raw-material inflation, elevated operating costs, restart-related expenses and the company's high dependence on commodity prices could temper investor enthusiasm. Shares of CENX have surged 114.7% in the past year compared with the industry’s 26.5% growth. Image Source: Zacks Investment Research Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter: Avient Corporation AVNT, scheduled to release earnings on Aug. 6, has an Earnings ESP of +0.87% and carries a Zacks Rank #2. The consensus estimate for AVNT’s earnings for the second quarter is currently pegged at 89 cents. Materion Corporation MTRN, slated to release earnings on Aug. 5, has an Earnings ESP of +5.39% and carries a Zacks Rank #2 at present. The consensus mark for MTRN’s second-quarter earnings is currently pegged at $1.55. Albemarle Corporation ALB, scheduled to release earnings on Aug. 5, has an Earnings ESP of +2.21%. The Zacks Consensus Estimate for ALB's earnings for the second quarter is currently pegged at $3.35. ALB currently carries a Zacks Rank #3. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Century Aluminum Company (CENX) : Free Stock Analysis Report Albemarle Corporation (ALB) : Free Stock Analysis Report Materion Corporation (MTRN) : Free Stock Analysis Report Avient Corporation (AVNT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research