Twin Disc Powers into Fiscal 2027 with Record Revenue and Strong Backlog
As the calendar flipped to fiscal 2027, Twin Disc, Inc. capped off a stellar year of performance by announcing record revenue in its fourth quarter. The company's strong demand and order momentum carried over from previous quarters, leading to an impressive 18% top-line growth for Q4 2026.
John H. Batten, Twin Disc CEO, took the stage during the company's conference call to discuss the quarterly results, which included operating income of $7.8 million, net income of $9.4 million, and free cash flow of $17.2 million. The company's performance was driven by strong demand from its defense customers, including the U.S. Navy and NATO.
"Defense activity is strong and continues to be a key structural growth driver for us," Batten stated during the call. "We're seeing increasing demand from our customers, which includes the U.S. Navy and NATO." The company's current defense customers include shipbuilders for the U.S. Navy and NATO, for whom they provide transmissions and driveline components.
The company also reported strong sales momentum in its oil and gas segment, with e-frac opportunities driving a higher margin profile. While gross margins were down in the quarter due to product mix and tariff dilution, Twin Disc is optimistic about its prospects for future growth.
Twin Disc's cash flow improved significantly in Q4 2026, reaching $17.2 million. As a result of this strong performance and confidence in the business going forward, the company's board recently approved a 25% increase in its quarterly dividend to $0.05 per share.
The company closed out fiscal 2026 with a record-breaking revenue quarter, fueled by growth across multiple product groups. Its six-month backlog remained strong at $178.3 million, despite strong shipments and an effort to reduce past due backlog. Twin Disc's robust project pipeline and considerable sales momentum in the markets it serves are expected to carry over into fiscal 2027.
Batten emphasized that defense is a key structural growth driver for the company, representing a significant long-term revenue opportunity. With global defense becoming more of a priority given the current geopolitical environment, Twin Disc believes it is well-positioned to benefit from increased spending as defense budgets grow.
The company's strong Q4 performance capped off a successful year of operational execution, with its product groups showing growth across multiple segments. As Twin Disc looks ahead to fiscal 2027, it appears poised for continued success, driven by its strong backlog, robust project pipeline, and diverse customer base.
