Turns out that a whole lot of global instability is blowing the IPO window wide open for defense companies.
Applied Aerospace & Defense—a Huntsville, Alabama-based, PE-backed defense and space subsystem manufacturer—went public on the New York Stock Exchange yesterday, raising $650M in its IPO and valuing the company at $3.25B after pricing shares near the top of the targeted range.
- Applied A&D’s IPO is the latest in a string of strong public market debuts from the defense world in the past few months, joining drone-maker Aevex, HawkEye 360, Ukrainian-American drone software company Swarmer, and defense components manufacturer Arxis.
Team player: Applied A&D (NYSE: AADX) doesn’t make flashy next-gen aircraft, autonomous systems, missiles, or space-bound rockets, but they supply subsystems and hardware to the companies that make them.
- Applied works across space and launch systems, aviation, and C5ISR and precision-strike, making the unsexy stuff for the companies that deliver the final product and take the credit. That includes missile bodies, satellite solar arrays, propellant and fuel tanks, aircraft wings, and a whole lot more.
- The 75-year-old company—then called Applied Aerospace—was acquired by PE firm Greenbriar Equity Group in 2022 and, in 2025, merged with another Greenbriar portfolio company, an even older A&D hardware and systems supplier called PCX Aerosystems, to form Applied Aerospace & Defense.
- Greenbriar is set to keep a roughly 80 percent stake after the IPO, according to the S-1.
Business is booming: The surge in defense spending—especially on all the stuff they supply systems and hardware for, from fighter jets to comms platforms and space launch vehicles—has made the whole “rising tide lifts all boats” thing ring true for Applied.
- Last year, they generated about $500M in revenue, a nearly 25 percent jump from 2024, with an Adjusted EBITDA Margin of roughly 24 percent.
- According to their S-1 filing, about a third of their revenue last year was “tied to systems for aftermarket and sustainment, providing long-term revenue visibility due to long-duration platform service lives.”
- That growth has continued this year—in the first quarter, they generated $134M in revenue, a 21 percent increase from Q1 of 2025.
- They also have over a billion dollars in backlog, according to the S-1.
“We’re seeing generational demand across space and defense, with the space economy, but really the instability in the world today is driving defense tech demand,” Applied A&D’s CEO Trip Ferguson told Tectonic yesterday. “The war in Iran has accelerated some areas, given the need for replenishment, operational tempo, and new threat profiles.”
“The other part is the shift from multi-decade-long FAR-based programs to what I call the iPhone model—technology changing every three to five years that’s enabling new demand across new systems, which really drives Applied, since we sit in the middle,” he added. “This IPO really enables Applied to scale both with internal investment and through other acquisition opportunities, so it’s a very healthy way of positioning the business.”
Rising tide: And given that Applied works across a wide range of major space and defense programs, they’re pretty immune to the more unpredictable contracting cycles that make public markets (and quarterly reports) tricky for other defense and space companies.
“Applied is designed to have uncorrelated demand across our markets—space launch, defense aviation, C5ISR,” Ferguson said. “Our business is incredibly diversified across over 150 platforms, so that diversity helps us smooth out the cycles, as well as having a very large percentage of our business with an aftermarket effect that produces cash flows and helps us really have predictability.”
The unsexy side of defense, at least on the balance sheet, is looking pretty sexy.