Ducommun Posts Record Revenue as Margins Expand
Second-quarter revenue reached a record $224.5 million, up 11.8% from a year earlier.
Ducommun Incorporated (DCO), an aerospace and defense manufacturer, posted record gross margin in the second quarter as sales growth accelerated and profitability broadened across its operating segments. Gross margin rose to 28.0%, up 160 basis points from a year earlier and 110 basis points from the first quarter.
Revenue increased to $224.5 million from $200.8 million a year earlier and $209.0 million in the first quarter. Year-over-year growth accelerated to about 12% from 9% in the preceding quarter. GAAP net income climbed 60% to $20.4 million and more than doubled sequentially from $9.9 million.
Electronic Systems led the advance, with revenue rising 19.8% to $131.4 million and its share of company sales increasing to 58.5%. Structural Systems revenue grew 2.1% to $93.1 million, reducing its sales mix to 41.5%.
Structural Systems produced the larger improvement in profitability despite its slower growth. Its operating margin expanded 350 basis points to 13.7%, while the Electronic Systems margin increased 80 basis points to 19.4%. Adjusted segment margins were 15.7% and 19.7%, respectively.
Commercial-aerospace revenue increased $12.0 million as production rates rose for large aircraft, though growth moderated to 16% from 18% in the first quarter. Military-and-space revenue added $7.9 million, a stronger gain than in the preceding quarter, supported by missile programs including PAC-3 and SM-6 and fixed-wing aircraft including the F-15. Industrial revenue returned to growth with a $3.8 million increase tied to order timing.
Adjusted EBITDA rose 21% to $38.4 million, and its margin widened 130 basis points to 17.1%. GAAP operating margin increased to 12.6% from 8.8%, aided by a $3.9 million compensation clawback recorded as a reduction to selling, general and administrative expenses and excluded from adjusted results.
Demand strengthened alongside the margin gains. Bookings rose to $309.7 million from $118.8 million, lifting book-to-bill to 1.4 from 0.6. Remaining performance obligations reached a record $1.159 billion, with nearly all of the increase from year-end concentrated in Electronic Systems.
Destocking pressures have begun to ease gradually, an improvement from the first-quarter expectation that the headwinds would persist through the remaining quarters of 2026. The company still expects some destocking pressure for the rest of the year.