Arxis, Inc.

Good day and thank you for standing by. Welcome to the ARCSIS first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Brian Wendlandt, head of FP&A and investor relations. Please go ahead.

Thank you, Josh. Good morning, and welcome to the ARCSIS First Quarter 2026 Results Conference Call. Joining me today are Kevin Perhamis, our Chief Executive Officer, and Azad Badash, our Chief Financial Officer. Before we begin, I'd like to remind everyone that today's discussion will contain forward-looking statements relating to future events and expectations. Actual results may differ materially from those projected due to a number of risks and uncertainties. please refer to our most recent SEC filings and today's earnings materials for a discussion of factors that could cause actual results to differ materially from those forward-looking statements. During today's call, we may also reference certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are included in today's earnings release and related presentation materials. With that, I'll turn the call over to Kevin.

Thanks, Brian. And good morning, everyone. I'm Kevin Perhamis, CEO of ArcSys. And welcome to our first earnings call as a public company. I'm going to start with a performance update, and then I'd like to walk through the ArcSys business model, the playbook, and the long-term growth algorithm that makes us so unique. With that, let's get started on slide three. We delivered an outstanding start to 2026. with first quarter sales of $459 million, up 21 percent year-over-year, and adjusted EBITDA of $175 million, up 31 percent year-over-year. The revenue growth was broad-based and highly diversified. New business wins, underlying market volume, modest price increases, and acquisitions each contributed mid-single digit growth during the quarter, highlighting the balanced nature of our growth algorithm. We also saw double digit growth across all three of our end markets. In defense and space, we continue to benefit from our alignment to key government spending priorities. In commercial aerospace, we are experiencing the benefits of ramping production rates, And within industrial technology, we are seeing solid momentum across several applications, especially medical technology and semiconductor. Overall, first quarter results reinforce our confidence in the full-year outlook, and we are excited to initiate strong guidance for fiscal year 2026. In summary, we expect strong growth to continue with the midpoint of our guidance range yielding 18% revenue growth and 27 percent EBITDA growth compared to prior year results. In addition, our partnership with ArcLine continues to be a significant strategic advantage in sourcing and executing acquisitions, including the successful completion of the Microtronics acquisition in January. And finally, following the IPO, we now have a substantially strengthened balance sheet and achieved net leverage of two times, positioning us to continue deploying capital across our M&A pipeline. Moving on to page four, I want to remind everyone of our differentiated business model and playbook. ArcSys designs and builds proprietary components, things like bearings, capacitors, connectors, and seals that perform in the harshest environments. These components are vital to the world's most advanced defense, aerospace, and industrial technology platforms. At the core of our model is a highly proactive and collaborative selling engine. Our engineers meet with our customers' engineers. They solve a problem, which results in a custom product that gets designed into the bill of materials, typically as the only qualified part, and then stays there for decades. Each of our business units own at least one foundational proprietary technology that dramatically improves the product performance and is exclusive to ArcSys. Across our 46 business units, we own 67 of these technologies, which underpin the 90% proprietary revenue shown at the bottom of this page. Examples of these technologies include Cryoflex as part of our PacAero business, and KRON within the Comatix business. When applied to a bearing, KRON transforms a standard bearing into a highly engineered custom product with five to 10 times the value. You'll also see our end market mix on this page. Approximately 50% defense in space, 20% commercial aerospace, and 30% industrial technology. We are highly diversified across virtually every metric, with 40,000 part numbers, more than 600 platforms, and over 5,000 customers. This diversification provides a highly stable foundation for the business and allows us to sleep really well at night. Finally, we have a nice balance between our two segments, electronic and mechanical components. And while the product families are quite different in the two segments, the underlying business model remains entirely consistent. Turning to page five, this slide summarizes why ArcSys is so unique. It starts with the markets we serve. We operate in highly attractive end markets with strong long-term demand drivers, high qualification requirements, and very long platform life cycles. Those dynamics create durable demand for ArcSys. The second piece is the nature of our products. Our components are highly engineered, proprietary, and deeply embedded inside our customers' platforms. Once we are designed in, those positions tend to stay in place for decades because the switching costs are high and the qualification cycles are long. The next three elements summarize our playbook called ArcSys Edge. First, we operate with a decentralized structure. Our business units move quickly, they are empowered to make decisions, and are accountable for performance. At the same time, the whole organization stays highly connected through a common operating system, shared processes, and aligned incentives. We are also unified. Second is our new business engine. We systematically track opportunities across the portfolio drive cross-selling between business units, and align compensation directly to growth generation. That creates a very proactive commercial culture and is the reason we can continue to grow faster than the markets we serve. And finally, M&A is embedded directly into the model. We operate in a highly fragmented market, and we've built a repeatable process around sourcing, underwriting, integrating and scaling acquisitions without disrupting the broader organization. From the beginning, ArcSys was built to be a long-term compounder, built by hand-selecting the companies with the best business models and integrating them one at a time into the ArcSys playbook. We did this in partnership with ArcLine. Let's look at slide six. ArcSys and ArcLine bring different strengths to the model. ArcSys brings the operating side, engineering expertise, customer relationships, the playbook, and processes that allow us to integrate and scale businesses while keeping them entrepreneurial, empowered, and decentralized. ArcLine brings deep capabilities around sourcing, research, underwriting, and long-term portfolio strategy with more than 60 investment professionals to support transaction evaluation and market analysis. This is a true partnership that creates a much more systematic approach to capital allocation than you typically see in an industrial company. We believe that combination, strong industrial operators paired with institutional quality capital allocators, is a key structural advantage. Moving on to slide seven. At the end of the day, everything we've discussed points to one thing. A business intentionally built to compound organically and through acquisitions. This model has produced and will continue to produce a highly durable financial profile. High single-digit organic revenue growth driven by strong markets, new business, and pricing. Approximately 50% incremental EBITDA conversion on that growth. translating into low double-digit organic EBITDA growth. This organic growth is supplemented by disciplined acquisition execution, which will provide meaningful incremental EBITDA growth. Ultimately, our objective is straightforward, to build a company that creates long-term value through world-class operational excellence and capital allocation, resulting in sustained long-term growth. a next generation industrial compounder. With that, let me turn it over to Azad to provide more detail on our first quarter results and fiscal 2026 guidance.