Defense budgets are turning into orders, and the order books now say more about the industry than the quarterly revenue lines do. This week's results show demand arriving at every layer of the supply chain at once, from components and electronics to specialty materials and launch.
The common thread is timing. Appropriated money takes quarters to reach suppliers, so orders, backlogs and revenue rarely land in the same report.
Order books hit records together
Mercury Systems booked $370M of orders in its fiscal first quarter, up 48% from a year earlier, for a book-to-bill of 1.46. Backlog reached nearly $2.1B, up 44.7%, with more than $1B due to become revenue within 12 months. Revenue of $253.2M rose 12.4% and beat the highest Street estimate of $246.2M, and earnings of 52 cents came in against a top estimate of 33 cents.
Rocket Lab posted a record backlog of $3.57B, a 52% jump from the end of the prior quarter. Its launch backlog reached 117 launches, with more than 55 spacecraft in development, and the company signed about $1B of new launch contracts in the quarter. Revenue of $268M rose 73%, and fourth-quarter guidance points to $270M to $290M.
The defense backlog story has a longer arc, and space defense spending has its own catalysts.
Revenue Rose at All Five Suppliers in the Same Quarter
Revenue for the quarter ended September 30, 2026, $ millions
Bar chart. TransDigm: Revenue ($M) $3K. Rocket Lab: Revenue ($M) $268. Mercury Systems: Revenue ($M) $253. Firefly Aerospace: Revenue ($M) $111. Elmet Group: Revenue ($M) $79.6.
Source: Source: Company earnings releases, SEC filings
TransDigm sets the pace
TransDigm Group reported fourth-quarter net sales of $2,988M, up 23% and above the top end of its own guidance. Net income was $586M, and EBITDA As Defined reached $1,583M at a 53.0% margin.
The aircraft components maker guided fiscal 2027 net sales to $11.95B to $12.15B, about 14% growth at the midpoint, with an EBITDA margin near 52%. It expects defense revenue growth in the high single digits, alongside similar gains in the commercial aftermarket.
Capital deployment ran just as hot. TransDigm put more than $7B to work in fiscal 2026, including $4.4B of acquisitions such as Simmonds Precision Products and Prince & Izant, and share repurchases of roughly $2.8B, a company record.
Raw materials get federal backing
Elmet Group, a tungsten and precision components supplier, grew revenue 55.6% to $79.6M. Adjusted EBITDA rose 129.4% to roughly $17.0M, and gross margin expanded 960 basis points to 31.3%.
Firm order backlog reached a record $347.4M, up 298% from a year earlier and up 164% in a single quarter. Behind it sits a $450M committed investment from the Department of War and a Defense Logistics Agency framework worth up to $2B.
Elmet's Order Book Nearly Quadrupled in a Year
Firm order backlog, $ millions, at quarter end
Line chart. Q3 2025: Order Backlog ($M) $87.3. Q2 2026: Order Backlog ($M) $132. Q3 2026: Order Backlog ($M) $347.
Source: Source: Elmet Group earnings release
Elmet has also agreed to buy OSRAM's metal production operations in Germany, committed roughly $150M to Blue Moon Metal's Springer Tungsten Complex in Nevada, put $125M into producer Masan High-Tech Materials and plans $165M of expansion.
Where the cash burn still bites
Firefly Aerospace grew revenue 259% to $110.7M and reported a record backlog of $1.7B, up from $1.5B a quarter earlier. It was onboarded as a vendor to NASA's $10B CLPS 2 lunar program and narrowed full-year revenue guidance to $440M to $450M, lifting the low end from $420M.
The space names still lose money. Firefly's adjusted EBITDA loss widened to $69.5M from $46.3M a year earlier, and Rocket Lab's adjusted EBITDA loss was $18.0M, with fourth-quarter guidance pointing to a loss of $14M to $20M.
Funding costs are moving the wrong way for those companies. October's consumer inflation report came in hot, and fed funds futures now suggest a 100% likelihood of a December rate increase.
Budget timing is the other risk. Firefly lists delays or reductions in appropriations and disruptions to federal government operations among the risks it cites. Rocket Lab's Neutron rocket is now targeted for no earlier than 2027 after problems with first-stage composite structures, even though it already carries 16 contracted missions.
Pentagon procurement has its own playbook. The simpler read is that the backlog is the part of the earnings report that carries into next year, and this week gave the market a full set of evidence that budgets are turning into signed work.
