Topic: OpEx phasing in 2026 and A&D revenue composition
Key points:
Q1 is seasonally higher spend; OpEx expected to increase slightly in Q1 and Q2, then drop steeply in Q3 and Q4, with year-over-year reduction less than 2025.
A&D is one of the top industrial segments, on track to become the largest industrial segment in FY2026; revenue growth from 2024 to 2025 was ~16% year-over-year.
A&D revenue streams are diverse across four areas (naval, lightweight structures, rocket propulsion, aero propulsion); no specific breakdown provided.
Littleton capacity expansion should be completed by early summer, phasing in during H2 2026.
Mgmt stance: Bullish on A&D — strong technology base, good runway, growing demand from DoD-driven applications via Tier 1 suppliers.
Q1 2026 revenue decline year-over-year (midpoint) is partly due to Geomagic divestiture (high revenue in Q1 2025); replacement revenue and OpEx savings expected to offset.
Mgmt stance: Neutral-cautious — prudent on near-term guidance due to macro uncertainty; confident in A&D and Healthcare trends, but consumer discretionary is a wildcard.
Q3 — Kieran McCabe
Topic: R&D spending outlook and A&D demand drivers (efficiency vs. new programs)
Key points:
R&D spending was heavy for ~3 years to refresh product lines; now throttling back as new products launch; next platforms are 1–3 years out.
R&D budget for 2026 is rightsized, still double-digit but lower double-digit as a percentage; not excessively cut.
A&D demand comes from both new weaponry/vehicles (drones, naval ships) and cost savings (single-piece castings, reduced cycle time, localized supply chains).
Example: naval components reduced from 12–15 months production time with additive manufacturing.
Mgmt stance: Bullish on A&D — additive is critical for cost savings and cycle time reduction; company well-positioned with broadest technology portfolio (metals + 5 polymer platforms).