Aerospace and defense company Cadre (NYSE: CDRE) reported Q1 CY2025 results beating Wall Street’s revenue expectations, but sales fell by 5.6% year on year to $130.1 million. The company’s full-year revenue guidance of $633 million at the midpoint came in 5.8% above analysts’ estimates. Its GAAP profit of $0.23 per share was 91.7% above analysts’ consensus estimates.
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Cadre (CDRE) Q1 CY2025 Highlights:
- Revenue: $130.1 million vs analyst estimates of $126.2 million (5.6% year-on-year decline, 3.1% beat)
- EPS (GAAP): $0.23 vs analyst estimates of $0.12 (91.7% beat)
- Adjusted EBITDA: $20.5 million vs analyst estimates of $16.2 million (15.8% margin, 26.6% beat)
- The company lifted its revenue guidance for the full year to $633 million at the midpoint from $586.5 million, a 7.9% increase
- EBITDA guidance for the full year is $117 million at the midpoint, above analyst estimates of $111.1 million
- Operating Margin: 10.4%, up from 8.7% in the same quarter last year
- Free Cash Flow Margin: 12.4%, up from 0.6% in the same quarter last year
- Market Capitalization: $1.21 billion
“Following a record year, we continued to see strong and recurring demand for our best-in-class, mission-critical safety products in the first quarter,” said Warren Kanders, CEO and Chairman.
Company Overview
Originally known as Safariland, Cadre (NYSE: CDRE) specializes in manufacturing and distributing safety and survivability equipment for first responders.
Sales Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, Cadre’s sales grew at a decent 7.6% compounded annual growth rate over the last four years. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.
Long-term growth is the most important, but within industrials, a stretched historical view may miss new industry trends or demand cycles. Cadre’s annualized revenue growth of 9.7% over the last two years is above its four-year trend, suggesting its demand recently accelerated. 
Cadre also breaks out the revenue for its most important segment, Products. Over the last two years, Cadre’s Products revenue (body armor, corrections tools, sensors) averaged 12.5% year-on-year growth. This segment has outperformed its total sales during the same period, lifting the company’s performance.
This quarter, Cadre’s revenue fell by 5.6% year on year to $130.1 million but beat Wall Street’s estimates by 3.1%.
Looking ahead, sell-side analysts expect revenue to grow 18.4% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and suggests its newer products and services will catalyze better top-line performance.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Cadre has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.5%.
Looking at the trend in its profitability, Cadre’s operating margin decreased by 2 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
This quarter, Cadre generated an operating profit margin of 10.4%, up 1.7 percentage points year on year. This increase was a welcome development, especially since its revenue fell, showing it was more efficient because it scaled down its expenses.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Sadly for Cadre, its EPS declined by 10.7% annually over the last four years while its revenue grew by 7.6%. This tells us the company became less profitable on a per-share basis as it expanded.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Cadre, its two-year annual EPS growth of 24.1% was higher than its four-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.
In Q1, Cadre reported EPS at $0.23, up from $0.18 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.
Key Takeaways from Cadre’s Q1 Results
We were impressed by how Cadre blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. We were also excited it lifted its full-year revenue and EBITDA guidance in a "beat-and-raise" quarter. Zooming out, we think this print featured some important positives. The stock traded up 3.8% to $30.70 immediately following the results.
Cadre had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
