M-tron Industries, a defense electronics manufacturer spun out from The LGL Group in 2022, reported a 15% year-over-year increase in second-quarter revenue to $15.1 million, driven by rising demand for missile components and counter-drone systems. The company’s stock has gained roughly 625% since its $11 IPO price, trading near $80 after reaching a 52-week high of $102 in late July.
Defense programs now account for 70% of revenue, up from prior levels, with missile content alone contributing 33% of total sales. Gross margins expanded to 44.28% in the last 12 months, exceeding the company’s target range of 43% to 46% and approaching its long-term goal of 50%. Adjusted EBITDA margins stood at approximately 22%, supported by a 37% increase in backlog over the prior 12 months. Cash on the balance sheet totaled about $95 million, up from roughly $10 million when CEO Cameron Pforr joined in 2021.
The company raised approximately $70 million through warrant and rights offerings over the past six to seven months, with subscription rates of 82% to 83% at the basic level and full coverage after oversubscription allocations. M-tron generates roughly $6 million to $8 million in annual cash flow after capital expenditures, maintaining a current ratio of 16.63 and a financial health score of 3.21 out of 5.
Nearly 30% of last year’s revenue came from products developed in the past three to four years, including a counter-drone radar program that grew from $150,000 to $6 million in current-year sales, with expected annual growth of threefold over the next two years. The company also secured $9.5 million in radar orders earlier this year. M-tron serves all 10 global defense primes and maintains over 70 long-standing customer relationships, including 45 programs of record.
Executives highlighted a potential inflection point in 2028 as the Pentagon’s fiscal 2027 budget proposal targets missile spending to nearly double from $43 billion to $82 billion annually, though funding remains subject to authorization. Purchase orders could begin as early as the first quarter of 2027, with material revenue impact expected in 2028. Raytheon and Lockheed signed frame agreements in February, which are not yet funded in the current budget.
M-tron’s manufacturing footprint includes primary sites in Orlando, Florida, and Yankton, South Dakota, with assembly operations in New Delhi, India. The company sources steel and aluminum from Korea, Germany, and Canada, and quartz crystals primarily from Japan due to limited U.S. domestic capacity. Tariffs are estimated to reduce gross margins by about 1 percentage point. The company is actively seeking acquisitions in RF components, targeting power amplifiers, low-noise amplifiers, waveguides, tunable filters, and antennas.
